Chinascope – Page 49

China’s Household Bank Deposits Increased by 58 Billion Yuan Over Last Four Years

According to the latest data released by the People’s Bank of China, household bank deposits increased by a total of 58.24 Trillion Yuan (US$ 8 Trillion) during the period from early 2020 to January 2024. Of the increase, 82% was attributable to time deposits. The total increase in deposits over these four years is equivalent to the increase seen during the period from 2009 to 2019.

Commentators have attributed the influx in bank deposits to “the international and domestic situation.” Many affluent families decided to halt investments during the pandemic. Meanwhile, ordinary families, facing reduced income, chose to conserve their resources and earn interest by saving money in banks.

With the increase in deposits, Chinese banks have been under pressure to issue loans and generate returns. Since the start of the COVID-19 pandemic, China has seen reduced demand for bank loans due to the decrease in China’s overseas orders and the rapid shrinkage of the country’s investment in infrastructure / housing construction. Property values have been falling, the Chinese stock market is declining, and private capital investment have seen significant contraction. Apart from export-oriented companies with existing orders, other businesses learned the lesson that they should not make investments, putting banks in a difficult position.

Source: Radio Free Asia, February 26, 2024
https://www.rfa.org/mandarin/yataibaodao/jingmao/gt1-02262024233157.html

Briefings | | March 1, 2024 | Economy/Resources

China’s Foreclosure Market Sees Record Listings, Flat Sales in 2023

Data from China Index Academy, a Chinese real estate research firm, shows 100,400 foreclosed properties were put up for auction in January 2024, a 48.2% year-over-year increase from January 2023. About 12,700 foreclosed properties sold in January 2024 for ¥27.31 billion (US$ 3.8 billion). The transaction rate of 12.63% was lower than the 15.8% seen in January 2023.

Foreclosure transaction rates were higher in economically strong regions. Five provinces/municipalities – Shanghai, Zhejiang, Beijing, Tianjin and Fujian – saw rates of over 20%. Shanghai had the highest rate, at 38.6% (154 out of 399 listings sold). Zhejiang had the second highest rate, 35.94% (1,185 out of 3,297 sold).

China’s foreclosure market has seen increased attention in recent times due to economic headwinds and uncertainty. The China Index Academy estimates that there are about 800,000 foreclosure listings in China in 2023, a record 36.7% year-over-year increase compared with 2022. Only 149,000 of these 2023 listings transacted, however, totaling ¥300.41 billion (US$ 41.7 billion), on par with the total for 2022.

Industry insiders believe foreclosure listings and transactions will keep rising in 2024, indicating a hot foreclosure market. The economic climate and real estate conditions will continue to be key factors influencing supply and demand.

Source: Central News Agency (Taiwan), February 25, 2024
https://www.cna.com.tw/news/acn/202402250010.aspx

Briefings | | February 29, 2024 | Economy/Resources

Chinese E-Commerce Giants Temu and SHEIN Gain Ground in Japan

Chinese e-commerce platforms like Temu and SHEIN have seen large gains in Japan by offering low prices and decent quality. Temu, which focuses on daily essentials, has acquired over 15 million monthly active users in Japan within 6 months of its launch. This figure already exceeds 50% of the average user base of Japan’s top 3 e-commerce sites – Amazon Japan, Rakuten Ichiba, and Yahoo Shopping. Meanwhile, SHEIN has surpassed leading Japanese fashion marketplace ZOZOTOWN with 8.39 million users in January 2024, more than triple the number from a year earlier.

The secret behind behind the business models of Temu and SHEIN is the direct supply chain they have with small and medium manufacturers in China. This allows them to offer competitive pricing without compromising much on quality. Aggressive marketing tactics like heavy discounts and coupons have also helped them to rapidly gain market share.

As growth in the overseas footprint of Chinese ecommerce firms (now including TikTok) continues, they face barriers ranging from national security concerns to consumer rights and competition / IP infringement issues.

Some have voiced concern that the rise of Temu and SHEIN in Japan could threaten existing Japanese players. Moreover, these firms may face issues with the Japanese government over human rights concerns and intellectual property violations affecting the companies’ supply chains. SHEIN is also facing a lawsuit from leading Japanese fashion brand Uniqlo.

In the US, Temu and SHEIN are already in the crosshairs of the US-China Economic and Security Review Commission for links to forced labor in Xinjiang as well as IP theft.

Source: Nikkei Chinese, February 21, 2024
https://zh.cn.nikkei.com/china/ccompany/54870-2024-02-21-05-00-53.html

Briefings | | February 29, 2024 | Geo-Strategic Trend

Foreign Automakers Struggle in China’s Shifting Market

Japanese and Western automakers are struggling in the Chinese market, with steeper sales declines in 2023 compared to the Chinese auto market more broadly.

Honda’s 2023 sales fell 10% to 1.23 million vehicles in China while Nissan’s sales dropped 16% to 790,000 units. Toyota sales were flat at 1.9 million units. Mitsubishi Motors announced in October 2022 that it would cease production in China due to poor sales. Within about two months Mitsubishi’s dealership in Guangzhou was replaced by an outlet for a Chinese auto brand.

Volkswagen’s 2023 sales in China rose 2% to 3.23 million while sales of GM’s Buick brand fell 20% and Cadillac sales dropped by 8%.

Sales in China of electric and plug-in hybrid passenger vehicles increased by 30% in 2023, with Chinese automaker BYD expanding its selection of electric car models. China’s market for gasoline passenger vehicles shrank 7%, while the broader market for passenger vehicles (including electric vehicles) grew 4% to 21.92 million units.

Japanese brands Honda and Nissan lagged in electric vehicle sales even as their gasoline models face fierce price competition from Chinese brands. Japanese automakers face hard choices on where to focus limited resources. They face stiff price competition from Chinese manufacturers, though sales in China remain high enough to warrant continued competition in the electric vehicle segment. The plug-in hybrid segment may get less attention going forward.

Fierce price competition has spread to affect gasoline car models, and major foreign brands have cut prices substantially. Japanese brands offered steep discounts, with discounts on new Hondas averaging $3,500 and Nissan discounts averaging $3,200. Meanwhile, the average discount on BYD vehicles averaged just $750.

Source: Nikkei Chinese, February 22, 2024
https://zh.cn.nikkei.com/industry/icar/54748-2024-02-22-05-00-31.html

Briefings | | February 29, 2024 | Geo-Strategic Trend

Xinhua: National Data Administration Launches Survey on Data Resources

A recent Xinhua article reported that, according to China’s National Data Administration (NDA), China has launched a “national data resources survey.” This nationwide survey will investigate the generation, storage, circulation, exchange, development, utilization, and security of China’s data resources. Its goal is to “implement the NDA’s ‘Overall Plan for the Construction of Digital China,’ assess China’s baseline of data resources, accelerate the utilization of data resources, and better leverage the value of the data element.” The survey will be jointly conducted by the NDA, the Office of the Central Cybersecurity and Information Technology Commission, the Ministry of Industry & Information Technology, and the Ministry of Public Security.

The survey targets the following organizations: provincial data management agencies, industry and information technology departments, public security departments (bureaus), provincial key data collection and storage equipment vendors, consumer Internet platform and industrial Internet platform companies, big data and artificial intelligence technology companies, application companies, data exchanges, central-government-owned enterprises, industry associations, chambers of commerce as well as the National Information Center.

Source: Xinhua, February 21, 2024
http://www.xinhuanet.com/20240221/3e499e3361d947619b117cfc4b9c9a9b/c.html

Briefings | | February 28, 2024 | Information/Technology

Mingpao: China’s 2023 Foreign Direct Investment Hit 30-Year Low

Mingpao, one of the primary Hong Kong newspapers, recently ran a report on data released by China’s State Administration of Foreign Exchange. According to the released data, China’s “Direct Investment Liabilities” in its international balance of payment table rose by just US$33 billion in 2023. This represents a decrease of 82 percent from 2022, marking the lowest level of Foreign Direct Investment (FDI) in China since 1993.

According to data from the Japanese government, net new investment by Japanese companies in China last year was the lowest in at least 10 years, and was lower than the funds flowing from Japan into Vietnam or India. Taiwanese government data showed that new investment by Taiwanese companies in Mainland China last year also reached the lowest level since 2001, with new investment reaching a year-over-year decrease of 39.8 percent. New foreign investment by Korean companies in China in the first nine months of 2023 also dropped 91 percent compared with 2022, falling to the lowest level since 2002. However, German companies’ direct investment in Mainland China hit record high last year.

Advanced economies across the globe have raised interest rates even as China has been cutting rates to stimulate its economy. Thus international companies are increasingly incentivized to store their cash overseas, outside of China, where they can earn more interest.

Source: Mingpao, February 20, 2024
http://tinyurl.com/3xx4p6r2

Briefings | | February 28, 2024 | Economy/Resources Geo-Strategic Trend

China Daily Editorial Advocates French “Strategic Autonomy,” Collaboration with China

China Daily published an English-language editorial on French-Chinese relations titled “France’s insistence on strategic autonomy means it’s immune to bloc confrontation.” The editorial advocates for France and other European countries to collaborate with China and not go along with U.S. attempts at isolating China. Guangming Daily also published a Chinese-language commentary on the editorial.

Here are some excerpts from the China Daily piece:

“This year marks the 60th anniversary of the founding of diplomatic relations between China and France.”

“Thanks to France’s strategic independence, as well as the two countries’ common commitment to multilateralism, Sino-French relations have demonstrated stability and sustainability amid the global volatility. Despite the attempts of the United States to drive a wedge between them, they continue to seek to explore the potentialities of new areas of cooperation.”

“In the 25th China-France Strategic Dialogue … in Paris on Tuesday, “the willingness and openness the French side expressed to continue to deepen the already broad and productive pragmatic cooperation with China was a clear dismissal of the ‘security concerns’ the US has been hyping up with regard to cooperation with China. The green economy, clean technology, nuclear energy, artificial intelligence and aerospace are all ‘sensitive fields’ that the US seeks to exclude China from.

“That, along with the stable bilateral cooperation between China and other major EU members, including Germany and Spain … should serve to prove to the decision-makers of the European Union the necessity of upholding the bloc’s strategic autonomy in handling relations with China, as well as the rationality of providing a fair, transparent and sound business environment for Chinese enterprises. Doing so can help avoid the EU footing the bill for the US’ geopolitical gambling.”

Sources:
1. China Daily, February 21, 2024
https://global.chinadaily.com.cn/a/202402/21/WS65d5eb9fa31082fc043b85dd.html
2. Guangming Daily, February 22, 2024
https://world.gmw.cn/2024-02/22/content_37160410.htm

Briefings | | February 26, 2024 | Geo-Strategic Trend US-China Relations

Xinhua Commentary Series: Spotlight on the U.S. Presidential Election

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.”