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China’s Movie Market Saw First Box Office Decline in Nine Years

The China Business Journal recently reported from the Shanghai International Film Festival that statistics showed that the Chinese movie market saw a box office year-over-year decline of 6.35 percent in the first five months of this year. During this period, the national total viewership also declined from 689 million people to around 589 million. This is the first time since 2011 for the Chinese movie market to suffer a decline in box office revenue. One of the reasons for this dramatic decline was that, in 2018, the entertainment industry was hit with tax related scandals. Domestic movie makers were affected when the stock they held lost 72 percent of its value in the stock market. Another major issue is that half of the movies in the Chinese market were from the United States. The current poor relationship between China and the U.S. led to a government intervention which affected U.S. movie distribution in China. Even domestic movies were limited in choosing themes and stories.

Source: China Business Journal, June 16, 2019

Lianhe Zaobao: China’s Industrial Output Growth Rate In May Reached 17-Year Low

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that, according to data that the National Bureau of Statistics of China just released, in May, China’s industrial output saw a five percent year-over-year growth. However, this rate is the lowest it has been in 17 years, since February 2002. Apparently, this is a direct result of the trade war between China and the United States. Analysts expressed their belief that the cause of the lower growth was a massive stimulus package, which includes tax cuts, more debt, and government spending. The growth rate was lower than expected. The same data report from the Bureau of Statistics also indicated that, in May, government revenue suffered a negative growth. Experts expect the Chinese government to make more infrastructure investments in the near future.

Source: Lianhe Zaobao, June 15, 2019

Epoch Times: Mainland Auto Inventory Exceeds Warning Line for 17 Consecutive Months

According to the Epoch Times, the latest issue of the “China Automobile Dealer Inventory Alert Survey” shows that the mainland’s automobile inventory index in May is above the inventory warning line. The car inventory has exceeded the inventory warning line for 17 consecutive months.

The China Automobile Dealers Association (China Automobile Association) recently released the latest issue of the “China Automobile Dealer Inventory Alert Survey.” The survey showed that the automobile dealer inventory warning index was 54.0 percent in May, down 7 percent from the previous month and up 0.3 from the same period last year. Since 2018, mainland car sales have declined for 10 consecutive months, and dealers’ revenue targets have fallen sharply. The high inventory has become a major concern.

According to Changjiang Business Daily news, the “Report on the current living conditions of China’s auto dealers and related report recommendations” that the China Automobile Association issued show that the current inventory in the industry is more than 3 million units, the equivalent to two months of sales. The cost of carrying a high inventory has eroded the gross profit on the new cars. In addition, the implementation of emission standards for phase VI also increased the dealers’ pressure to clear the inventory of cars made using the emission standard of phase V.

According to the survey of the Automobile Association, in June, the automobile market is about to enter the off-season. Therefore, the market demand in June is expected to decline compared with that in May. The automobile market will continue to be sluggish and the pressure on dealers will further increase.

The article quoted comments stating that the decline in automobile sales shows that the economic environment is also slowing down. For the mainland, the causes are the economic downturn and the expected decrease in personal income. In addition, the sharp rise in the price of necessities, such as pork and fruits and vegetables, has caused the people’s monthly living expenses to rise. When people revise their spending plans, they have to delay or eliminate spending on big expenditures such as tourism and car purchases.

Source: Epoch Times, June 9, 2019

Chinese Official Manufacturing PMI Number Fell below 50 Percent

Well-known Chinese news site Sina recently reported that China’s National Bureau of Statics just released its May Manufacturing PMI (Purchasing Managers Index) number. The PMI index for the Chinese manufacturing sector turned out to be 49.4 percent. The key sub-indexes that brought down the overall number were New Orders (49.8 percent), Raw Material Inventory (47.4 percent) and Employment Level (47.0 percent). These meant that the market demand for manufacturing products is weak and the manufacturers are consuming existing material for production while unemployment is increasing in the sector. Among the different sizes of the companies, large scale manufacturers are doing relatively well (50.03 percent), medium and small scale manufacturers are suffering declines (48.8 percent and 47.8 percent, respectively). PMI is an indicator of financial activity reflecting purchasing managers’ acquisition of goods and services. A PMI number below 50 typically reflects a decline.

Source: Sina, May 31, 2019

Beijing News: Beijing Announced Grain and Oil Market Stabilization Plan

Beijing News recently reported that the City of Beijing just announced and deployed an emergency response plan to balance the city’s grain and oil market. This is another emergency market control plan for life’s necessities, after the pork market and the vegetable market. As a “mega consumer city,” Beijing’s goal for the new emergency plan is to ensure that the market prices of grain and oil related products are controlled to be within certain ranges. The plan aims to control the price adjustments in the wholesale market. Based on past statistics, Beijing’s wholesale price fluctuations are typically more severe than those of the retail prices. The plan is to reflect the concerns related to the mid-to-long term impact under the complex domestic and international market pressure. Starting in 2013, Beijing established price control emergency funds within the government budget.

Source: Beijing News, May 13, 2019

VOA: As the US-China Trade War Escalates, China’s Employment Situation Is Getting Grim

As the US-China trade tensions intensify, China expects a record 8.34 million college graduates to enter the job market this summer. It is believed that the recent increase in tariffs that the U.S. has imposed has made China’s export-dependent economy more vulnerable. China’s employment situation will become more and more severe for all job seekers, including college graduates. A recent survey showed that the actual employment rate this year was only 52 percent due to the fact that college graduates have not been able to find matching professions after their graduations. The survey found that this means that at least 4 million graduates will soon become unemployed, although many of them may choose to continue their studies. A report that Renmin University of China and the Career Platform Recruitment Network completed jointly found that, in the first quarter of this year, the number of job seekers in China increased by 31 percent compared to the same period last year. It was the highest increase since 2011. The report concluded that the China Job Market Prosperity Index has fallen to its lowest level since 2014. However, the latest official statistics describe a slightly different situation. According to official data, the unemployment rate in China’s urban areas remained at 5.2 percent in March, down 0.1 percentage points from February.

Source: Voice of America, May 17, 2019