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Monthly Archives: June 2025 - 6. page

Temu and Shein See Sharp Decline in U.S. Sales Amid Tariff Hikes and De Minimis Crackdown

Following Trump’s imposition of higher tariffs on Chinese goods and a crackdown on the “de minimis” loophole, Chinese e-commerce platforms Temu and Shein have seen a sharp decline in popularity in the U.S. market.

The “de minimis” exemption previously allowed tax-free treatment for e-commerce parcels valued under $800. Chinese platforms like Temu and Shein took advantage of it and became the biggest shippers. Now, those goods are subject to a 54 percent tariff and the per-item postal duty was increased to $100 in April and May and $200 starting in June.

Several measures in the U.S. have shown Temu and Shein’s sales declines:

  • Daily Active Users (DAUs): Temu dropped by 52 percent in May compared to March; Shein declined by 25 percent.
  • Monthly Active Users (MAUs): Temu dropped by 30 percent and Shein 12 percent.
  • Rankings in the Apple App Store: Temu fell to the 132nd place from its top-three standing a year prior; Shein slipped to 60th, down from the top ten.
  • Advertising spending in the U.S.: In May, Temu cut its ad budget by 95 percent year-over-year; Shein by 70 percent. In April, Temu reduced their ad budget by 40 percent and Shein 65 percent.

According to CNBC, Temu and Shein have begun adjusting their supply chain strategies, moving away from the “China direct shipping” model – where suppliers ship directly to consumers – to setting up local warehousing and distribution systems in the U.S. However, this shift introduces additional costs and management challenges.

Amidst the high U.S. tariffs, many Chinese platforms are now accelerating to shift to other markets, particularly in Europe. According to HSBC, 90 percent of Temu’s 405 million global monthly active users in Q2 2025 were from outside the U.S., especially from low-income regions such as Latin America.

Source: Epoch Times, June 5, 2025
https://www.epochtimes.com/gb/25/6/5/n14525505.htm

Briefings | | |   @CS Economy/Resources US-China Relations

Chinese Universities Abandon English Departments Amid Policy Changes and AI Disruption

English departments, once among the most popular programs at Chinese universities, are facing widespread closures across the country. Multiple factors including government policies, AI advancement, and market oversaturation have contributed to the decline of what was previously considered a prestigious field of study.

The trend began gaining attention in October 2023 when the University of Science and Technology of China, a top-tier “985 university,” announced plans to eliminate its English program along with five other undergraduate majors. As the first elite institution to take this step, the decision sparked significant debate about the future of English education in China.

The closures reflect broader policy shifts affecting English language education. China’s “double reduction” policy implemented in 2021 dramatically reduced after-school tutoring, leading to the closure of 95.6% of offline and 87.1% of online supplementary education institutions by September 2022. English training centers, being the most numerous, suffered the heaviest losses.

Further policy changes reduced English instruction hours in public schools. Under new curriculum standards introduced in 2022, English classes now account for only 6-8% of total class time, ranking third from bottom among all subjects, equal to moral and legal education.

Cultural attitudes are also shifting. As China’s international status rises and Chinese culture gains global influence, English is no longer viewed as an essential skill. Teachers report that students increasingly question the importance of learning English.

The job market presents additional challenges. Nearly 994 Chinese universities offer English programs, representing nearly 80% of all institutions, creating severe oversupply. With economic pressures mounting, employers prefer candidates with technical skills over language specialists.

AI technology poses perhaps the greatest threat to English majors’ career prospects. Advanced translation software and artificial intelligence tools now perform many tasks traditionally handled by English graduates, including interpretation and translation work. One teacher noted that some English majors produce work inferior to AI translations, questioning their market value.

A university instructor summed up the transformation: “English was a glorious profession over ten years ago, but the situation is completely different now.”

Source: Central News Agency (Taiwan), June 4, 2025
https://www.cna.com.tw/news/acn/202506040202.aspx

Briefings | | |   Economy/Resources

China Maintains Shipbuilding Dominance Despite US Pressure

China’s shipbuilding industry continues to demonstrate remarkable resilience and competitiveness despite mounting pressure from the Trump administration’s efforts to counter Chinese maritime dominance and revitalize America’s domestic shipbuilding sector.

According to the latest data from the China Association of the National Shipbuilding Industry, China maintained its global leadership position from January to April this year. The country achieved completion volumes of 15.32 million deadweight tons, new orders of 30.69 million deadweight tons, and outstanding orders of 229.78 million deadweight tons, representing global market shares of 49.9%, 67.6%, and 64.3% respectively.

The robust demand has led to unprecedented order backlogs. Companies like Dalian COSCO KAWASAKI Ship Engineering report their shipyards are fully booked until the first half of 2029. Similarly, Hengli Shipbuilding (Dalian) holds approximately 170 ship orders, primarily from European clients, with schedules extending to 2029 and two new shipyards set to commence operations by the end of June.

Industry analysts attribute this sustained growth to several factors, including the aging global fleet and accelerated vessel replacement driven by environmental regulations from the European Union and the International Maritime Organization (IMO). Guangfa Securities analyst Wang Jiahao suggests that while the US Section 301 investigation may create short-term market volatility, it will not significantly impact China’s long-term shipbuilding competitiveness.

The US has responded with targeted measures, including plans to impose higher port fees on Chinese-owned and operated vessels while offering reduced rates for ships built in China but operated by non-Chinese companies. President Trump has also signed executive orders directing national security advisor Mike Waltz to develop strategies for revitalizing America’s domestic shipbuilding industry and maritime employment.

China’s shipbuilding transformation has been remarkably rapid. According to the Center for Strategic and International Studies, China’s share of global commercial shipbuilding grew from less than 5% in 2000 to over 50% by 2024, while the US share remains below 0.1%. The China Shipbuilding Group now produces more commercial vessel tonnage annually than the entire US shipbuilding industry has built since World War II.

Source: Central News Agency (Taiwan), June 3, 2025
https://www.cna.com.tw/news/acn/202506030052.aspx

Briefings | | |   Economy/Resources

Kyrgyzstan Considers Joining China’s Cross-Border Payment System

Kyrgyzstan is exploring the possibility of connecting its state-owned banks to China’s Cross-border Interbank Payment System (CIPS), a Chinese alternative to the SWIFT payment network, according to the country’s central bank press service.

The development emerged from high-level financial talks held in Beijing on June 3, where Kyrgyzstan’s National Bank Governor Melis Turgumbayev and Finance Minister Almaz-Baketayev met with Chinese Finance Minister Lan Fo’an. The meeting was conducted within the framework of deepening financial and economic cooperation between the two nations.

The central focus of discussions centered on developing cross-border payment infrastructure and strengthening settlement and banking connections between Kyrgyzstan and China. Both sides emphasized the strategic importance of establishing direct and stable interaction channels between their financial institutions.

Key initiatives discussed included integrating Kyrgyzstan’s state banks into China’s CIPS system and opening correspondent accounts for Kyrgyz banks at authorized Chinese financial institutions. These measures aim to facilitate smoother bilateral financial transactions and reduce dependency on traditional Western payment systems.

CIPS, developed by the People’s Bank of China, serves as China’s cross-border interbank payment system primarily designed for cross-border yuan settlements. The system has gained prominence as an alternative to SWIFT, particularly as countries seek to diversify their international payment mechanisms amid evolving global financial dynamics.

This potential integration represents a significant step in Sino-Kyrgyz financial cooperation and aligns with China’s broader Belt and Road Initiative objectives in Central Asia. For Kyrgyzstan, joining CIPS could enhance trade efficiency with China, its major economic partner, while providing alternative channels for international transactions beyond traditional Western-dominated systems.

Source: Sputnik News, June 4, 2025
https://sputniknews.cn/20250604/1065821024.html

Briefings | | |   Geo-Strategic Trend

CNA: TikTok Acquired Indonesia’s Largest E-commerce Company

Primary Taiwanese news agency Central News Agency (CNA) recently reported that TikTok, owned by China’s ByteDance, completed a deal in January 2024 to acquire 75.01 percent of Tokopedia, Indonesia’s largest e-commerce platform owned by GoTo, for US$840 million.

Indonesia’s antitrust authorities said yesterday that they found a significant increase in market concentration during their investigation and that there was a possibility that prices would rise after the acquisition due to market dominance. Based on the results of the investigation, the authorities have the power to rule on violations of competition laws and impose fines or issue administrative injunctions.

The Indonesian government has a list of requirements for TikTok and Tokopedia, including ensuring the openness of payment and logistics systems and prohibiting self-preferencing and predatory pricing practices. The authorities also required the two companies to submit reports every three months for two years, and to provide a list of logistics and payment partners before and after the acquisition, as well as the agreements with them.

Source: CNA, May 29, 2025
https://www.cna.com.tw/news/aopl/202505290375.aspx

Briefings | | |   Geo-Strategic Trend

Jorg Wuttke: China is not an Open Market, We Should not Harbor Illusions

Major Taiwanese news network Liberty Times Network (LTN) recently reported that Jorg Wuttke, former president of the EU Chamber of Commerce in China, just published a commentary titled “China Illusion”.

The commentary pointed out that the idea that China could replace the United States and become a reliable partner of Europe in the near future is “ridiculous.” A glance at the trade data will make everything clear: in terms of exports, German companies’ exports to Poland alone have exceeded their exports to China; and since November last year, the entire EU has exported more to Switzerland than to China. “The trend is so clear that there is no need to deceive ourselves anymore,” Wuttke wrote. “Our exports to China have peaked and will only decrease. Chinese leaders want to achieve self-sufficiency, and foreign companies will become less and less welcome. At the same time, China’s competitiveness is increasing rapidly. Many of the products we used to sell to China are now being sold back to Europe from China.”

The commentary said that, another important aspect of foreign trade relations is investment, and the data on investment is even more shocking. Europe’s direct investment in the United States is US$3.5 trillion per year, while its investment in China is only about US$10 billion a year. “In a 430-page position paper I published as president of the EU Chamber of Commerce in China, the Chamber listed thousands of shortcomings of the Chinese market, but ultimately there was only one fundamental problem: the Chinese market is not open. Only selected foreign companies are allowed to enter China,” Wuttke wrote. The idea that China will open up to the outside world on a large scale in the future is purely wishful thinking. China is a closed society. This hurts Chinese companies too, because their profits are so slim.
Wuttke further indicated that, currently, the United States is trying to stem the flood of cheap Chinese goods, but these products will inevitably flood into European and other markets. And all countries, whether Thailand, Russia or Turkey, will eventually establish trade protection mechanisms, which will mean the end of free trade.

Wuttke served as a long-time chairman of the EU Chamber of Commerce in China until 2023. And he has lived in China for 35 years.

Source: LTN, June 8, 2025
https://ec.ltn.com.tw/article/breakingnews/5067949

Briefings | | |   Geo-Strategic Trend

Xinhua: Mainland Delivers Two Heavy Blows Against “Taiwan Independence” Forces

Xinhua News Agency reports that on June 5, mainland China launched two major countermeasures targeting “Taiwan independence” separatist forces:

The first one was that the public security authorities issued a wanted notice for 20 major criminal suspects of Taiwan’s “Information and Electronic Warfare Command,” including Ning Enwei, offering rewards for their capture. It said that this organization has carried out cyberattacks and infiltration operations against mainland China, Hong Kong, and Macao, stolen sensitive data and critical intelligence on a large scale, and collaborated with anti-China forces in the U.S. and the West to conduct public opinion and cognitive warfare against the mainland to incite “color revolutions.”

The second one was that mainland announced sanctions against Taiwan-based company Sicuens International Co Ltd, as a punishment for “hardline Taiwan independence” figure Shen Boyang. Beijing said Shen has been organizing and systematically engaging in separatist activities, aggressively promoting “Taiwan independence” ideology and anti-mainland sentiment, especially targeting Taiwanese youth. The sanction is against the company which Shen’s father, Shen Tucheng, serves as a key executive. The company has been involved in trade and business partnerships with some mainland companies.

The younger Shen is a legislator from the Democratic Progressive Party (DPP) in Taiwan and has now been sanctioned by Beijing for the third time within a year. Shen believes the sanctions are in response to his recent legislative efforts related to national security, including a bill requiring lawmakers to report visits to China and another imposing penalties for pro-unification activities. He is also a key advocate of Taiwan’s Great Recall (大罢免) campaign in Taiwan, a rising political movement in which citizens mobilize to recall underperforming or allegedly pro-Beijing members of parliament mainly from the Kuomintang party.

Sources:
1. Xinhua, June 6, 2025
http://www.xinhuanet.com/mrdx/20250606/0509b2d5300540ed9b51db7303d10dc3/c.html
2. Epoch Times,  June 6, 2025
https://www.epochtimes.com/gb/25/6/6/n14526295.htm

Briefings | | |   Geo-Strategic Trend Government/Politics

Lianhe Zaobao: Caixin Manufacturing PMI Fell into Contraction Range in May

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that, in May, the Caixin China Manufacturing Purchasing Managers’ Index (PMI) fell into contraction territory (below 50) for the first time in eight months, showing the impact of the U.S. tariffs on China’s manufacturing industry.

Caixin’s May manufacturing PMI reached 48.5, a 32-month low. Caixin’s data showed that, in the face of the high tariffs imposed by U.S. President Trump since April 2, China’s sub-index of new export orders in May fell further into the contraction range, the largest decline since July 2023. This also caused the sub-index of new orders in May to fall to a new low since October 2022. On the manufacturing job market side, faced with continued weak demand, the employment sub-index in May continued to decline below 50 and recorded the largest drop this year. The employment of investment goods manufacturing companies decreased significantly.

In the meantime, the National Bureau of Statistics of China released its official May Manufacturing PMI at 49.5. Caixin PMI is a well-respected economic indicator monitored globally by financial institutions. Compared with the government official PMI, the Caixin PMI results represent more on the side of small and medium-sized export-oriented companies.

Source: Lianhe Zaobao, June 3, 2025
https://www.zaobao.com.sg/finance/china/story20250603-6554941

Briefings | | |   Economy/Resources