Chinascope – Page 14

CNA: BMW Quits Price War in China

Primary Taiwanese news agency Central News Agency (CNA) recently reported that China’s auto market has been in serious trouble, and German luxury car brand BMW has been actively cutting prices since last year to maintain its market share. It now seems that BMW China will withdraw from China’s price war and adopt a new strategy of “volume reduction for price protection.” This became the hottest topic on Chinese social media at one point a few days ago.

According to local media reports, BMW China has been actively cutting prices. The average discount rate on BMW sales in 2023 was 17.66 percent. BMW delivered 825,000 vehicles last year in China, an annual increase of four percent. These delivery numbers came at the cost of a sharp decline in BMW’s profits, which fell more than 30 percent year-over-year.

In the first half of this year, BMW sold 375,947 vehicles (including the Mini brand, which is owned by BMW), with sales down four percent year-over-year. Now, price cuts are hurting both profit and sales. A BMW China salesperson revealed that the prices of all models will be adjusted upwards starting from July 10, and there will be another price increase after July 15. All previous price-cut offers will be cancelled.

Another German luxury car brand, Mercedes-Benz, has also entered the price war. Mercedes sales in the first half of the year also fell by nearly six percent. Mercedes has not made any official remarks regarding its pricing strategy. Meanwhile, Porsche sales China in have been even worse. In the first half of the year, Porsche sales in China totaled only 29,551 units, a 33 percent decrease from the same period last year.

Source: CNA, July 12, 2024
https://www.cna.com.tw/news/acn/202407120327.aspx

Briefings | | July 16, 2024 | Economy/Resources

China’s Photovoltaic Industry Faces Extensive Oversupply

Chinese companies have dominated the world’s photovoltaic industry (i.e. solar panel production). The sector represents one of the “new three products” (new energy vehicles (i.e. electric vehicles), lithium batteries, photovoltaic products) comprising Beijing’s current industrial strategy. In 2023, China’s exports of the “new three products” totaled 1.06 trillion yuan (US$ 150 billion), surpassing the trillion-yuan mark for the first time. Within just half a year, however, the entire Chinese photovoltaic industry has fallen into a loss territory.

As of July 9, among the listed companies that have disclosed their mid-year performance forecasts, most companies in the photovoltaic industry are forecasting significant losses. Among them, seven companies – LONGi Green Energy, Tongwei Co., Ltd., TCL Zhonghuan, Aiko Solar, Shuangliang Eco-Energy, Jingyuntong, and Hongyuan New Energy – are expected to have loss exceeding 1 billion yuan each. LONGi Green Energy, the world’s largest photovoltaic company, indicates a net loss of 4.8 billion to 5.5 billion yuan. Its market value has fallen from its peak of 550 billion yuan to below 100 billion yuan.

In the past, China provided heavy national subsidies to the photovoltaic industry that had attracted many manufacturers enter this field, producing homogeneous products. By the end of 2023, China’s annual production reached 861 gigawatts, more than twice the global installation volume of 390 gigawatts. It is predicted that the capacity will increase by another five to six hundred gigawatts this year. It is estimated that China’s silicon wafer, battery, and module production capacity to be put into operation in 2024 will be sufficient to cover the global annual demand till 2032 (nine years).

Critics point out, “(China’s) support for the photovoltaic industry is a result of government policy, rather than market guidance. (The current overcapacity) was inevitable. It is a result of a planned economy that has mismatched production and market (demand).”

Source: Epoch Times, July 14, 2024
https://www.epochtimes.com/gb/24/7/14/n14290396.htm

Briefings | | July 16, 2024 | @CS Economy/Resources Government/Politics

Japan’s 2024 Defense White Paper Reveals Significant Reduction in Number of Chinese Missiles and Aircrafts

The Japanese Ministry of Defense recently released its 2024 Defense White Paper, revealing a significant reduction in the number of intermediate-range missiles possessed by the Chinese Rocket Force. The 2024 Defense White Paper reported 212 intermediate-range missiles, down from 278 in the 2023 report. The decline since 2021 has been even greater.

In 2023, there were a total of 70 DF-21 series missiles; by 2024, only 24 DF-21A/E missiles remained, with all DF-21B/C/D series missiles, including the so-called “carrier killer” DF-21D, disappearing.

China’s DF-26 missile count has reached to 140, an increase of 30 from 2023. Additionally, the number of nuclear warheads has increased to 410, up from 350 in both 2022 and 2023.

The number of J-20 aircraft has increased from 140 in 2023 to 200 in 2024. The number of J-16 aircraft has grown from 262 in 2023 to 292 in 2024. The J-10 fighter jets remain at 588 units as 2023. The number of carrier-based J-15 aircraft remains 60, insufficient to fully equip its two aircraft carriers.

Source: Epoch Times, July 12, 2024
https://cn.epochtimes.com/gb/24/7/12/n14289761.htm

Briefings | | July 16, 2024 | Defense/Military

“People’s Court” Finds Xi Jinping Guilty of Genocide and Crimes against Humanity

A “people’s court” known as The Court of the Citizens of the World, held a trial in Hague, against China’s top leader Xi Jinping, from July 8 to July 12. Based on evidence of Xi’s effective control over the state organs committing widespread and systematic violations in Tibet and Xinjiang, the court confirmed charges of crimes against humanity in Tibet and genocide and crimes against humanity to Uyghurs in Xinjiang, against Xi Jinping.

Though the court cannot take forcible actions against Xi, it hopes that its findings can compel countries to impose sanctions or reconsider their economic and political ties with China.

Source: VOA, July 13, 2024
https://www.voachinese.com/a/the-court-of-the-citizens-of-the-world-issues-arrest-warrant-for-xi-jinping-charging-him-with-crimes-against-humanity-and-genocide-071324/7696652.html

Briefings | | July 16, 2024 | Government/Politics

China’s ‘Youth Retirement Homes’: A Growing Trend Amid Economic Pressures

“Youth Retirement Homes” have recently emerged across China, offering young people a space to relax and recharge from over competition in urban life. These facilities, which charge only a few hundred yuan per week, provide outdoor activities, social events, and opportunities for like-minded young people to interact.

The primary clientele includes freelancers, artists, photographers, and young people facing life challenges. The topic has gained significant attention on Chinese social media, with over 5 million views on Xiaohongshu.

While some view these homes negatively, labeling them as “lying flat” centers, supporters argue they provide necessary respite from the intense pressures of modern life in China, including high housing costs and demanding work schedules (996 culture).

Surprisingly, Chinese officials have shown a positive attitude towards these facilities, seeing them as potential drivers for rural revitalization.

David Xu, founder of IMC Talent in Hong Kong, attributes the popularity of youth retirement homes to increased competition for jobs, devalued university degrees, and economic downturn, leading to disappointment and a desire to escape among young people.

Wang Guochen, a researcher at Chung-Hua Institution for Economic Research, warns that prolonged absences from work could hinder human capital accumulation and potentially slow China’s long-term economic development.

Source: Central News Agency (Taiwan), July 8, 2024
https://www.cna.com.tw/news/acn/202407080157.aspx

Briefings | | July 10, 2024 | Economy/Resources

Japanese Beauty Brand BAUM Exits China amid Broader Foreign Business Exodus

Japanese cosmetics brand BAUM, owned by Shiseido, announced its withdrawal from the Chinese market. This move is part of a broader trend of multinational companies leaving China in recent years, extending from manufacturing to the beauty industry.

BAUM’s Tmall flagship store will stop accepting new orders from July 10, and its concept store in Shanghai has already closed. Shiseido cited “strategic adjustment” as the reason for this decision.

Experts attribute this trend to various factors, including China’s “dynamic zero-COVID” policy, difficulties faced by foreign businesses, and the inability to repatriate profits easily. The recent controversy over Japan’s nuclear wastewater discharge has also led to a boycott of Japanese beauty products in China.

Despite these challenges, some Chinese officials continue to welcome foreign investment. The Vice Minister of Industry and Information Technology stated that China has lifted all restrictions on foreign investment in manufacturing.

However, critics argue that the deteriorating business environment in China is driving foreign companies to relocate to Southeast Asia, India, and even back to their home countries. This exodus includes major corporations like Samsung, Philips, Tesco, Yahoo, Canon, Lotte, and Sony.

The trend reflects broader concerns about China’s economic policies and international relations, potentially impacting its position in global supply chains and its appeal as a market for foreign businesses.

Source: Radio Free Asia, July 8, 2024
https://www.rfa.org/mandarin/yataibaodao/jingmao/ql2-shiseido-baum-withdraw-china-07082024065833.html

Briefings | | July 10, 2024 | Geo-Strategic Trend

Hong Kong Strengthens “Patriotic Education” with New Initiatives and Programs

Guangming Daily reported that China’s “Patriotic Education Law” came into effect on January 1, 2024. In April, the Hong Kong Special Administrative Region (SAR) government established a Patriotic Education Working Group. Recently, Hong Kong has carried out a variety of patriotic education activities.

In May, the Hong Kong government announced that the “Hong Kong Museum of Coastal Defense” would be reestablished under a new name: the “Hong Kong Museum of Anti-Japanese War and Coastal Defense.” The aim of this change is “is to help visitors gain a deeper understanding of the history of the anti-Japanese War (WWII), appreciate the close ties between Hong Kong and China, and enhance visitors’ sense of national identity, belonging, and pride.”

The government pushed out new middle school curriculum guidelines on the subject of Chinese history: the “Hong Kong National Security Education Curriculum Framework.” The national security education curriculum frameworks pertains to 15 subjects. All elementary and middle schools are required to fly the national flag on every school day, on New Year’s Day, on the Hong Kong SAR Establishment Day, and on National Day. Schools are also required to hold a flag-raising ceremony once a week. Elementary and middle schools are instructed to organize national education activities on major holidays. The General Studies subject at the elementary schools is to include content on national identity and Chinese culture. Chinese history has become a compulsory subject in middle school. The high school’s Citizenship and Social Development subject is to closely align with China’s development.

The Guangming Daily reported that universities and middle and high schools in Hong Kong are actively engaging in various exchange and internship programs in mainland China “to help Hong Kong youth gain a better understanding of the motherland and enhance their sense of affinity towards the country.” The Hong Kong Joint Publishing Group, including Hong Kong Sanlian Bookstore, Hong Kong Zhonghua Book Company, and the Hong Kong Commercial Press, publishes approximately 2,000 new books in Chinese and English each year. Among these, hundreds of publications are on national education, many of which have won prestigious publishing awards both domestically and internationally. For example, they published a series of books of “How Much Do You Know About the National Flag, National Emblem, and National Anthem,” the series of “My Home in China,” and the picture book “Our Country, Our Security.”

Source: Guangming Daily, June 30, 2024
https://politics.gmw.cn/2024-06/30/content_37411267.htm

Briefings | | July 9, 2024 | Government/Politics

Wu Guoguang: Xi Jinping’s Reversal of the Course, Will China’s Transition be Peaceful or Marked with Bloodshed?

Cheng Xiaonong: U.S.-China Strategic Relations Have Crystallized

Xinhua Commentaries: “Exposing the Three Major Political Deficits of the U.S.”

The CCP’s Performing Arts Troupes in the U.S.