E-commerce platforms become indispensable for foreign companies to keep their Chinese customers
Jan-26-2021 By : fcccadmin
Cross-border e-commerce platforms, which now have become the only channel for many domestic consumers who want to buy overseas products, have become indispensable for foreign brands who want to keep onboard their Chinese consumers. The cross-border business-to-consumer (B2C) marketplace under Alibaba Group – one of the most popular platforms in China – had more than 29,000 brands across 5,800 categories at the end of December 2020, over 80% of them entering China for the first time. Brands, particularly small- and medium-sized players that have been hard-hit by the Covid-19 pandemic, are trying their best to enter new markets and find fresh channels for growth, according to the platform.
Apart from Tmall, another leading platform, JD Worldwide, also previously said it has helped 270 new foreign brands to further expand sales channel in China in the first half of 2020 to meet the increasing consumption demand. The “foreign brands festival” has attracted an increasing number of Chinese consumers to purchase online. Over the past year, China’s cross-border e-commerce imports and exports increased by 31.1% year-on-year, according to the General Administration of Customs. Figures have further improved from the first half of 2020, when trade volumes via cross-border e-commerce platforms increased by 26.2% year-on-year, with exports and imports up by 28.7% and 24.4%, respectively.
“Under the weight of the pandemic, cross-border e-commerce has gone from strength to strength,” Customs Spokesman Li Kuiwen, said. Chinese e-commerce platforms have also been investing heavily to provide convenience to foreign brands and shorten procedures. For instance, Tmall Global announced a new suite of solutions at the 2021 Tmall Global New Seller Virtual Summit last week, to help global brands capture growing consumption opportunities in China. “We hope to provide foreign merchants with more confidence through this virtual summit, and provide solutions for those who cannot ‘go out’ due to the pandemic,” Maggie Liu, General Manager of Tmall Global, told the Global Times. “Chinese consumers can’t travel abroad right now, but the demand is still there,” Liu added. The most popular product categories are health and beauty products, and home appliances. Overseas brands and retailers can receive tailored consultation, operations and content support as well as other value-added services through Tmall Global and its partner network worldwide.
JD.com held online investment promotion conferences in South Korea and Singapore last year to reach local brand merchants and to help them enter the Chinese market. Chinese e-commerce platforms are also paying attention to logistics. Tmall Global has set up bonded warehouses and arranged for chartered flights, the Global Times reports.
Despite pandemic, China’s exports still grew by 3.6% last year, GDP up 2.3%
Jan-19-2021 By : fcccadmin
China’s exports increased by 3.6% in 2020, far better than initially expected. China’s GDP grew by 2.3% last year – the slowest since 1976. However, China was also the only major economy showing positive GDP growth. In the fourth quarter of 2020, the Chinese economy grew by 6.5% year-on-year, the National Bureau of Statistics (NBS) said, a remarkable recovery from the historic 6.8% contraction in the first quarter when the coronavirus struck. The solid recovery also lifted China’s GDP to CNY101.6 trillion, a new milestone above the CNY100 trillion mark. According to the World Bank, the U.S. economy is expected to contract by 3.6% in 2020, and the eurozone’s by 7.4%, while the global economy is expected to decline by 4.3%.
China’s retail sales dropped 3.9% year-on-year in 2020, as consumers cut back spending during the challenging times. The catering sector saw the biggest drop of 16.6% in revenues, as restaurants were forced to close or consumers were restricted to eat out as part of the country’s anti-epidemic efforts. “In 2021, China’s economy is expected to rise strongly in the first and second quarters, and then return to a long-term medium level. Annual growth is expected to be around 9.2%,” ICBC International Economists Cheng Shi and Wang Yuzhe wrote in a research note to the Global Times. Value-added industrial output increased 2.8% year-on-year. Fixed-asset in?vestment (FAI) saw a steady recovery, climbing 2.9% year-on-year in 2020, with investment in high-tech industries, health care and education above average. A total of 11.86 million new urban jobs were created in 2020, 131.8% of the target set for the whole year.
The country’s exports in U.S. dollars grew by 18.1% year-on-year to USD281.93 billion in December. For all of 2020, exports gained 3.6% to USD2.59 trillion, according to Customs data. Imports were up 6.5% to USD203.75 billion in December, while the full-year figure dropped 1.1% to USD2.06 trillion. China became the only major economy in the world to achieve positive commodity trade growth in 2020, General Administration of Customs (GAC) Spokesman Li Kuiwen told a press conference. The country’s exports were up only 0.5% in U.S. dollar terms in 2019, a sharp decline from a 9.9% gain in 2018. Imports shrank by 2.8% in 2019, a free fall from a rise of 15.8% in 2018. China’s exports of medical devices and stay-at-home products surged in 2020, contributing to the global fight against the pandemic. The country’s exports of textile items – including masks – medical instruments and medicines jumped 31% in 2020 year-on-year, boosting overall export growth by 1.9 percentage points. Exports of laptops, tablets and household appliances grew up 22.1%, fueling export growth by 1.3 percentage points. Exports of infrared thermometers rose more than 2,358% in the first half of 2020, reaching USD1.059 billion in value.
Wang Tao, Chief China Economist at UBS, said China’s exports were stronger than expected in 2020, owing to rising demand for protective gear and stay-at-home products. “This was the case even in the U.S. market where Chinese products face higher tariffs,” Wang said, expecting a strong global recovery to help China’s exports surge an estimated 10% in dollar terms this year. A possible slow-down in travel around Chinese Spring Festival this year due to heightened coronavirus control measures would help exporters work around the clock to deliver goods to their buyers. Many regions in the country including Zhejiang and Guangdong provinces, have rolled out measures including Spring Festival subsidies and overtime pay, to encourage migrant workers to avoid traveling to their hometowns for the holidays. The Ministry of Commerce (MOFCOM) is now working with other departments including the Ministry of Transport to increase shipping capacity and stabilize freight rates, Li Xingqian, a Ministry official said.
China’s auto market saw a forecast-beating performance in 2020 despite the impact of the Covid-19 epidemic. The number of automobiles sold in the country totaled 25.31 million last year, down 1.9% year-on-year, narrowing 6.3 percentage points from the decline seen in 2019, according to the China Association of Automobile Manufacturers (CAAM). In 2020, China produced 25.23 million automobiles, down 2% year-on-year, narrowing 5.5 percentage points from the drop in 2019. In December, auto sales reached 2.83 million, up 6.4% on-year, while production totaled 2.84 million, a 5.7% gain from a year ago. China’s auto exports surged 35.5% on-year to 145,000 units, a historic high. Auto sales are expected to exceed 26 million units in 2021, up 4% year-on-year.
U.S. bans eight Chinese mobile apps, including Alipay and WeChat Pay
Jan-12-2021 By : fcccadmin
U.S. President Donald Trump has signed an executive order to ban eight Chinese mobile apps: Ant Group’s Alipay mobile payment app, QQ Wallet, WeChat Pay, CamScanner, SHAREit, Tencent QQ, VMate and WPS Office. The executive order goes into effect in 45 days. Trump said that the apps can access private information from their users, which could be used to “track the locations of federal employees and contractors, and build dossiers of personal information”. The order instructs Commerce Secretary Wilbur Ross to evaluate other apps that could pose a “national security threat”. Chinese Foreign Ministry Spokeswoman Hua Chunying said that the ban is another example of the United States abusing national power to unjustifiably crack down on foreign companies. She urged the U.S. to respect the principles of the market economy and fair competition and abide by international economic and trade rules.
Meanwhile, the New York Stock Exchange (NYSE) again reversed a previous decision not to delist the three Chinese telecom companies China Mobile, China Unicom (Hong Kong) and China Telecom. The NYSE originally announced on December 31 that it would delist them. On January 8, after consulting with relevant regulators, it decided instead to keep them listed. The decision on January 10 marks a return to the original plan. The NYSE said in a statement that its latest decision to move forward with the delisting was based on new specific guidance received from the U.S. Department of the Treasury’s Office of Foreign Assets Control.
The Chinese Foreign Ministry has repeatedly criticized these moves and vowed to take necessary measures to protect Chinese businesses. Alibaba and Tencent are globalized corporations with a combined market capitalization of over USD1.3 trillion and very diversified global investors, including those in the U.S. Following the reports, Alibaba’s and Tencent’s share prices dropped. It remains unclear how the firms would respond to the U.S. move.
China said that it would take necessary measures to safeguard companies’ rights and interests in response to the United States considering adding Alibaba and Tencent to a blacklist of firms allegedly owned or controlled by the Chinese military, forcing their delisting from the U.S. stock market. Targeting Asia’s two most valuable companies would be U.S. President Donald Trump’s most dramatic step yet against Chinese companies. Defense Department officials are also discussing adding other Chinese firms to the list. Some investors expressed skepticism, however, that Alibaba and Tencent would face long-term restrictions. The Pentagon has so far blacklisted 35 firms, including China’s top chipmaker SMIC and oil firm CNOOC.
In the final days of his presidency, Trump is expected by some observers to crack down on more Chinese companies, including SOEs and other businesses in critical sectors of the Chinese economy, such as state-owned oil companies, banks and utility providers, according to the Global Times. Trump could also order the delisting of all Chinese firms from the U.S. and label China as a currency manipulator. The U.S. could also attempt to try to cut off China from the U.S. dollar payment system, known as the Society for Worldwide Interbank Financial Telecommunications (SWIFT), analysts said. However, China also holds many cards, including its massive holdings in U.S. Treasuries, access to crucial materials such as rare earths, and a huge domestic market that many U.S. businesses rely on, analysts said. The Global Times said that any response to U.S. aggression would likely be measured and targeted. For example, after the New York Stock Exchange said it would delist three Chinese telecom firms, Dong Shaopeng, Advisor for the China Securities Regulatory Commission (CSRC), suggested that China should also require U.S. companies doing business in China to report their links to the U.S. military, the Global Times reports.
EU-China investment agreement still expected to be signed before year-end
Dec-22-2020 By : fcccadmin
According to the China Daily, the anticipated signing of the long-awaited Comprehensive Agreement on Investment (CAI) between China and the European Union will secure open and fair markets for both sides, while building a solid foundation for productive future engagements, quoting interviews with European business leaders. The two sides are believed to have made “positive progress” during the 35th round of CAI negotiations. The talks focused on remaining issues, including text and lists. China and the EU have held 10 rounds of CAI talks this year, according to the Ministry of Commerce (MOFCOM). The teams from both sides will continue their efforts to achieve the negotiation’s goal – to reach the CAI by 2020 – Ministry Spokesman Gao Feng said last week. The recent signing of the Regional Comprehensive Economic Partnership (RCEP) is expected to boost trade and investment activities within the Asia-Pacific region. Similarly, a China-EU CAI will make China a vital trading destination and create more opportunities for companies from Asia and Europe, as well as support the growth of the Belt and Road Initiative, said Zhang Jianping, Director General of the Beijing-based China Center for Regional Economic Cooperation.
Schott, a German producer of specialty glass and a supplier of pharmaceutical packaging, believes that both regions can benefit from better free trade deals. “We are looking forward to the early signing of the CAI, and we have already talked to many of our customers in China to convey that we are in support of building a closer relationship,” said Frank Heinricht, CEO and Chairman of the Board of Schott. “I am definitely positive about the outlook, and I think that Europe and China are coming close to each other,” he said, adding that the company has invested €320 million globally in its 2020 fiscal year, mostly to expand production capacity in China.
China’s early recovery from the Covid-19 pandemic, rebounding consumption levels, and the efficient resumption of production have helped global companies in China to remain viable and profitable compared with other parts of the world, said Julien Hueber, Executive Vice President of the Industry Solution and Project Business Group at Nexans, a French cable manufacturer. “Our strategic focus is to base ourselves in China and cover the whole Asia-Pacific region. China’s business environment is continuously improving, especially its performance in the prevention and control of the pandemic has boosted our confidence and enhanced China-EU business ties via the accelerated pace of CAI talks,” he said. Supported by two manufacturing bases in Jiangsu and Shandong provinces, Hueber said the company will keep adding investment in China.
Thanks to the complementary industrial structures between China and the EU, and booming China-Europe freight train services, China replaced the United States as the EU’s largest trading partner in the third quarter, reflecting the resilience and potential of bilateral economic and trade ties, China’s Foreign Ministry said earlier this month. China’s foreign trade with the EU jumped by 4.7% on a yearly basis to CNY4.05 trillion during the first 11 months of this year, according to the General Administration of China Customs (GACC), the China Daily reports.
But according to the South China Morning Post, although China’s relationship with the European Union is set to get a much-needed boost as the CAI is signed, it is unlikely to lead to a softening of Brussels’ stance on Beijing. According to people with knowledge of the talks, the CAI has won widespread but conditional backing from most EU member states. The European Commission has secured breakthroughs, with China agreeing to further open up its markets to European firms, and has also demanded Beijing make a commitment to ending the use of forced labor, the sources said. China’s traditionally trade-driven relations with the EU worsened after the EC last year referred to Beijing as a systemic rival for the first time. According to sources, China has made concessions on sectors like financial services, manufacturing and property. In return, China secured the EU’s agreement to open up its renewable energy sector to Chinese investment, a clause that drew opposition from some Eastern European member states like Poland and Lithuania. Jiang Feng, a European Affairs Professor at Shanghai International Studies University, said the China-EU negotiations showed the importance of making compromises, adding that the deal would benefit the world economy. Song Luzheng, Research Associate at Fudan University’s China Institute, said that “by agreeing to an investment deal with China, the EU is showing Washington that it needs to do more to draw Brussels into its camp, while China is showing the U.S. that China can rise up to the challenge from the U.S. by stabilizing ties with the EU”.
U.S. President-elect says he will not immediately lift U.S. tariffs on Chinese imports
Dec-08-2020 By : fcccadmin
U.S. President-elect Joe Biden has told the New York Times he will not immediately lift U.S. tariffs on Chinese imports, but would wait for a review of the U.S.-China trade deal. Some Chinese analysts expressed “cautious optimism” after Biden chose economists with no obvious anti-China views, including Treasury Secretary nominee Janet Yellen, for his cabinet. The new team is unlikely to be chaotic and erratic in the trade talks, though tensions will likely persist given their longstanding grievances over China, and the intention to contain China’s rise, experts noted. Yellen will have direct dealings with China, as the U.S. Treasury Department is tasked with reviewing other countries’ currency policies, imposing sanctions on other countries and entities, as well as taking part in trade policy formation. It also oversees the collection of tariffs on hundreds of billions of dollars worth of Chinese goods. Treasury Secretary Mnuchin was also a key member of the U.S. negotiating team with China.
“The Biden administration may revise Trump’s erratic approach of imposing sanctions on certain Chinese companies. At the same time, the U.S. may cooperate with its allies to establish rules on human rights, freedom of speech, and the environment to contain China’s development,” Gao Lingyun, an expert at the Chinese Academy of Social Sciences (CASS) in Beijing, told the Global Times. While Chinese officials have not spoken about the future of the phase one trade agreement with the U.S., lingering tariffs or future trade negotiations with the U.S. under Biden, they have sent clear positive signals that they will carry out the deal and want to engage with the U.S. in a constructive manner, according to the Global Times.
A Chinese Customs official pointed out that China has fulfilled its commitment under the phase one trade agreement with the U.S. to implement dozens of quarantine protocols that paved the way for expanding imports of U.S. animal and plant products. “As of now, 37 inspections of animal and plants related to the China-U.S. economic and trade agreement have been completed in a timely and high-quality manner,” Zhao Zenglian, head of the Department of Animal and Plant Quarantine at the General Administration of Customs (GAC), said at a press briefing. Since the phase one trade agreement took effect, the GAC has addressed issues related to market access for U.S. potatoes, barley and pet foods, and removed a ban on U.S. poultry imposed during an earlier bird flu epidemic. Reciprocally, Chinese citrus, fresh jujube and pears were allowed to be exported to the U.S., Zhao added. “This is very clearly a positive signal that China is continuing to implement the phase one deal in line with its domestic demand and economic trends,” Li Yong, Deputy Chairman of the Expert Committee of the China Association of International Trade, told the Global Times. In October, Chinese imports of U.S. soybeans – a closely watched gauge of the progress of the phase one deal – skyrocketed almost 200% year-on-year, reaching 3.4 million tons.
Last week, the U.S. Treasury Department imposed sanctions on the China National Electronics Import & Export Corp (CEIEC) for allegedly “supporting Venezuelan President Nicolas Maduro’s efforts to undermine democracy”. China’s cooperation with Venezuela is in line with international rules under the principles of mutual development and should not be politicized, Hua Chunying, Spokeswoman for China’s Foreign Ministry said, adding that China will take necessary measures to protect the rights of Chinese companies. The U.S. government also added four Chinese companies to its blacklist: Semiconductor Manufacturing International Corp (SMIC). China National Off-shore Oil Corp (CNOOC), China Construction Technology Co and China International Engineering Consulting Corp. The move brings the total number of blacklisted Chinese companies to 35. A recent executive order by the U.S. President prevents U.S. investors from buying these companies’ securities.
China’s exports to the U.S. rose by 1.6% to USD354 billion in the first 10 months this year. However the Global Times reported that trade between China and the U.S. is still thorny and uncertain, as issues like tariffs and higher shipping costs loom large. Many Chinese enterprises, not seeing a turnaround in the situation, have shifted their focus from U.S. to other markets, mainly Europe.
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