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China’s Once-Booming Piano Industry Hits Sour Note as Market Shrinks

China used to have a thriving piano industry, but piano sales have plummeted in recent years as the number of piano learners shrinks. After a decade of expansion, China’s piano sector now faces huge changes. Piano seller Mr. Fan says sales have declined precipitously since 2019, with 2023 sales between 10% and 30% of previous levels. Many dealers and companies face closure. The music education market is also declining, with teachers struggling financially.

Mr. Fan cites two main reasons for the decrease in demand. First, middle-class incomes and expectations have fallen in recent times. Second, parents feel that practicing piano is fruitless in the face of extreme competition, preferring to spend money on vacations. Some also believe that the decline may reflect parents diversifying interests as children age.

Piano consumption used to concentrate among middle-class families in top-tier mainland Chinese cities. A 2008 policy enabled “piano fever,” allowing extra exam points to art students who had high grades in piano classes. This grade-boosting policy, which incentivized piano lessons and piano practice, ended in 2018. Along with falling birth rates across China and relatively poorer financial prospects for Chinese parents, the piano industry has toughened.

During the pandemic, piano companies like Hailun and Pearl River Piano reported weak sales. They blamed factors including suspension of school and of in-person piano lessons. In 2023, major piano makers announced plunging revenues, which they ascribed primarily to weak demand.

Industry statistics indicate that at the beginning of 2022, China had 650,000 music instruction centers and 25,000 piano stores, and that about 30% of these closed by the end of 2022. The sector faces declining consumer demand, loss of disposable income, and waning confidence in the value of musical training.

Source: Central News Agency (Taiwan), January 16, 2024
https://www.cna.com.tw/news/acn/202401160288.aspx

Briefings | | |   Economy/Resources

UDN: China’s Exports Fell 4.6 Percent Last Year

United Daily News (UDN), one of the primary Taiwanese news groups, recently ran a report on official 2023 data published by the China’s General Customs Administration. According the data, which are denominated in U.S. dollars, 2023 exports fell by 4.6 percent year-over-year, imports fell by 5.5 percent year over year, and aggregate imports and exports decreased by 5.0 percent year-over-year. China’s annual trade surplus was US$823.22 billion.

The last time that China experienced a decline in USD-denominated exports was seven years ago, in 2016, when exports fell by 7.7 percent.

At the “2023 Imports and Exports Press Conference” held by China’s State Council Information Office, official RMB-denominated data were released. Priced in RMB, China’s 2023 exports increased by 0.6 percent year-over-year, imports decreased by 0.3 percent year-over-year, and aggregate imports and exports increased by 0.2 percent year-over-year.

 

Chinese YoY Trade Growth, 2023
in USD in RMB
Exports -4.6% +0.6%
Imports -5.5% -0.3%
Aggregate -5.0% +0.2%

 

Wang Lingjun, deputy director of China’s General Customs Administration, said “the complexity, severity, and uncertainty of the external environment have increased. To further promote the stable growth of international trade, China needs to overcome some difficulties and make more efforts.”

Source: UDN, January 12, 2024
https://udn.com/news/story/7333/7703838

Briefings | | |   Economy/Resources Geo-Strategic Trend

China’s “Cultural Enterprises” Expanding Overseas

People’s Daily reported that many Chinese culture enterprises — companies providing culture-related services and entertainment or selling products related to China’s culture heritage — have been expanding to the global market in recent years.

The People’s Daily report gave the following examples of cultural enterprises: Chinese TV series with Chinese culture elements, such as silk embroidery, qipao (traditional Chinese dress), jade carving, etc, have become popular online; commercial virtual reality videos to show undersea world near the coast of China; and companies hosting online livestreams of the Peking Opera performance.

At China’s 2023 Cultural, Trade, Investment and Financing Expo in Hefei City, Anhui Province, approximately 1,000 companies from both domestic and international origins participated. The expo showcased over ten thousand cultural products and various distinctive artistic skills.

Source: People’s Daily, January 3, 2024
http://world.people.com.cn/n1/2024/0103/c1002-40151847.html

Briefings | | |   Economy/Resources

China Launches Nationwide University Probe into Retracted Research Papers to Address Academic Integrity Crisis

Given the large number of withdrawals of papers published by Chinese scholars in international journals, China’s Ministry of Education has recently required universities to launch self-checks of retracted papers.  Education departments in several provinces followed suit, also mandating self-checks of retracted papers. Numerous Chinese schools have made announcements on the topic, saying that publishers’ retractions of Chinese papers in 2023 has negatively impacted China’s academic reputation.

Wuhan University has reviewed papers from the past three years. Shandong University requested that all faculty and graduate students comprehensively identify retracted papers. The Henan Education Department received a ministry list of retracted papers from China’s Ministry of Education and has asked schools to investigate papers on the list, verifying each paper’s research process and data acquisition. Verified academic transgressions will be “dealt with” by Henan’s Education Department.

Around 30 Chinese universities conducted similar reviews in mid-2023, citing a ministry notice issued in April 2023 calling for the clean up academic misconduct dating back to 2018.

China publishes the second most papers in the Science Citation Index (SCI), following only the United States. The rate of paper retractions by Chinese scholars is very high, accounting for 52% of all SCI retractions in 2022 out of 5,488 worldwide. The main reasons for retraction are that papers come from “research paper mills,” contain plagiarism, contain unreliable data, or that peer review fraud occurred.

Source: Central News Agency (Taiwan), January 4, 2023
https://www.cna.com.tw/news/acn/202401040296.aspx

Briefings | | |   Economy/Resources

DW Chinese: China’s December Manufacturing PMI Hit Six-Month Low

Deutsche Welle Chinese Edition recently reported that, according to official data released by the Chinese National Bureau of Statistics, China’s manufacturing Purchasing Managers Index (PMI) in December was 49.0 percent, a decrease of 0.4 percentage points from the previous month. China’s PMI has been declining for three consecutive months and has now hit a new six-month low. The PMI was also below the Reuter’s estimated median forecast of 49.5 percent.

China’s National Bureau of Statistics said that the decline in manufacturing PMI was affected by factors such as the low production rates of some raw materials during the off-season. Some economists expressed the belief that China must take government action to increase support for the economy, lest the trend of slow growth should continue. Analysts expect the central bank to lower interest rates and the bank reserve requirement ratio (RRR) during the coming weeks.

The data from the Bureau of Statistics also showed that, in December, the new orders sub-index of the PMI was 48.7 percent, a decrease of 0.7 percentage from the previous month. This indicates that demand in the manufacturing market has declined. The employment sub-index was 47.9 percent, a decrease of 0.2 percentage from the previous month, indicating that employment in manufacturing has declined. The Bureau’s senior statistician said that the external environment (referring to China’s relationship with other countries) is “increasingly complex, severe, and uncertain.” He added that the reduction of overseas orders and insufficient effective domestic demand are the main difficulties facing Chinese companies.

Source: DW Chinese, December 31, 2023
http://tinyurl.com/2ccpp5mr

Briefings | | |   Economy/Resources

Guangming Daily: China and Latin America’s Activities in 2023

Guangming Daily, a major mouthpiece of the Chinese Communist Party’s (CCP), reviewed the development in the relationships between China and Latin American countries in 2023:

In 2023 there were many high-level exchanges between China and Latin American countries. Leaders from ten countries paid visits to China: Brazil, Honduras, Argentina, Chile, Colombia, Venezuela, Barbados, Suriname, Cuba, and Uruguay. President Xi Jinping met with the Presidents of Mexico and Peru in San Francisco, USA. China established diplomatic relations with Honduras, elevated bilateral relations with Venezuela to the status of “all-weather strategic partnership,” with Colombia and Nicaragua to “strategic partnerships,” and with Uruguay to “comprehensive strategic partnership.” China also deepened its cooperation with Cuba under the banner of “building a shared destiny.”

The Chinese Communist Party (CCP) held exchanges with Latin-American political parties. [Representatives of] many Latin-American political parties attended the high-level dialogue between the CCP and the world’s political parties in March, 2023; China and Cuba held their fifth communist theory conference in Beijing in April; and China held the third China-Latin America Poverty Reduction and Development Forum in July.

From January to October 2023, trade between China and Latin America reached 2.835 trillion yuan (US$ 390 billion), a 6 percent increase from the same period during the previous year. Chinese companies actively invested in Latin America, particularly in the fields of new energy and the digital economy. On May 11, China and Ecuador signed a free trade agreement. From May 30 to June 2, China and Peru held their fifth round of negotiations for the upgrade of the China-Peru Free Trade Agreement. On July 4, China and Honduras launched negotiations for a free trade agreement. On August 31, China signed a free trade agreement with Nicaragua, making Nicaragua China’s fifth free trade partner in the Latin American region. In addition, China initiated free trade agreement negotiations with El Salvador last year, and negotiations with Uruguay are also underway.

Honduras joined the Belt and Road Initiative (BRI) in 2023; it is the 22nd Latin American country in the BRI circle. Countries like Cuba, Argentina, Chile, and Uruguay signed specific cooperation plans with China. Latin American nations actively participated in the third BRI Cooperation Summit Forum, with the President of Chile attending the forum three times consecutively. By September 2023, China implemented over 200 infrastructure projects in Latin America, including roads, railways, light rails, schools, hospitals, sports venues, bridges, tunnels, airports, ports, and power facilities.

China and Latin American countries, all being developing nations, collaborated extensively in addressing international issues, global challenges, and promoting the reform of the global governance system. Close coordination between China and Brazil supported Argentina in joining the BRICS family (Editor’s Note: this article was written before Argentina officially announced that it would not join BRICS). Latin American countries actively supported the “Three Major Global Initiatives” (Editor’s Note: this refers to Xi Jinping’s Global Development Initiative, Global Security Initiative, and the Global Civilization Initiative), with several countries joining the “Friends of the Global Development Initiative” group. China and Latin American countries actively consulted and reached broad consensus in addressing hot issues such as the Ukraine crisis and the Israel-Palestine conflict. China supported Brazil’s bid for the 30th Conference of the Parties to the United Nations Framework Convention on Climate Change in 2025, and advocated for the establishment of a “Climate Compensation Fund” for vulnerable economies in Latin America.

Source: Guangming Daily, December 26, 2023
https://news.gmw.cn/2023-12/26/content_37051988.htm

Briefings | | |   Economy/Resources Geo-Strategic Trend Government/Politics

China Faces Food Supply Risks

China is intensifying efforts to address food security concerns. Following recent discussions at the Central Economic Work Conference and the “San Nong” (agriculture, rural areas, farmers) work conference, Xi Jinping stressed that the local party and government organs share “joint responsibility for food security.”

China has officially claimed that its supply of staple foods exceeds 100 percent self-sufficiency and is “absolute secure.” However, “staple foods” typically refer to only rice and wheat. China still imports significant amounts of other essential grains including corn, sorghum, and legumes. A report from the Rural Development Institute of the Chinese Academy of Social Sciences has warned of a potential grain gap of 130 million tons by the end of the “14th Five-Year Plan” period (2021-2025), with a cereal gap of about 25 million tons. A report from the China Macroeconomic Forum last year indicated that “more than one-third of all food [consumed in China] is now reliant on imports.” China’s food self-sufficiency rate has declined over the past 20 years, dropping from 93.6 percent in 2000 to the current rate of 65.8 percent. The rate for soybeans was 62.4 percent in 2000 and has since fallen to 16.6 percent.

China’s network of food imports is dependent on a few countries, primarily the United States. Beijing no doubt sees this as a geopolitical risk. To diversify imports, China seeks to “enhance cooperation” with over 140 countries.

China’s second strategic worry is the vulnerability of the sea-based food transportation routes on which it relies. As of 2023, the majority of food imported to China traveled through the Suez Canal and the Strait of Malacca (which connects the Indian Ocean with the South China Sea). Transport through the Suez Canal is currently disrupted by Houthi military activity in the Red Sea, forcing ships bound for China to travel a much longer route circumnavigating Africa. A sea blockade at the Strait of Malacca would cause further delays or disruption to China’s food import network.

Source: Voice of America, December 26, 2023
https://www.voachinese.com/a/7412613.html

Briefings | | |   Economy/Resources Government/Politics

Where Did China’s Newly-Printed Money Go?

A posting on social platform X discussed why the record high of 28 trillion yuan (US$4 trillion) currency that China issued in 2023 didn’t lead to the expect result of boosting economy:

The excess currency, primarily intended to circulate through loans, encountered a lack of demand. Individuals and businesses refrained from borrowing, causing the money to passively flow back, resulting in passive deleveraging. Traditionally, a significant portion of loans flowed into real estate which would drive up development and consumption. But this time the reduced demand (and the dismal projected return) for property purchases and land acquisitions led to idle funds in commercial banks. Consequently, most of the 28 trillion yuan were returned to China’s central bank. The government became the primary borrower, with local governments issuing new city investment bonds to replace old bonds approaching maturity. The total amount of investment bonds issued by city governments in China now exceeds 65 trillion yuan.

Source: Twitter, @TheXiangYang

Briefings | | |   Economy/Resources Government/Politics