A price war broke out in China

chiny24.com 3 years ago

Shanghai household 2022

Last year 73.8% of Shanghai residents had a permanent resident and a check-in card, the alleged Hukou (户口)¹. 66.01% of Shanghai families had 1 child, 29.46% had two, and 4.53% had more than two. The average Shanghai resident had her first kid at 31.18.²

Source:

¹Hukou – is simply a strategy of registration (register) of a permanent resident. It is distinguished by urban or agrarian humou, each of which is inherited. There is simply a circumstantial form of “attribution to the ground”. The book of hukou contains information on the conclusion of marriage, the birth of children, divorces, the death of members of the immediate household and the kind and place of residence. Having a hucou brings large comfort to the lives of large cities with large budgets for all kinds of social services. Having a local hukou enables faster acquisition of housing, gives access to preferential loans, a larger scope of insurance and wellness care, social assistance, facilitates the admission of children to kindergarten, school, is simply a condition for taking up employment in government administration, access to municipal housing, free education. In fresh years, individual cities have loosened the rules for obtaining a hukou.

²https://news.xinmin.cn

Average dwelling area

According to analyses by the Ministry of Housing and Urban improvement (住房和城乡建设部) the average surviving area in China at the end of 2021 was 41.76 m², including in cities 42.29 m²and in agrarian areas 46.8 m².

The largest average area has apartments in:

Beijing (76.6 m)²),
Shanghai (73.86 m)²) and
GuangZhou (Canton) and ShenZhen (72.06 m)²).

In these 4 cities the largest housing heads are recorded (low housing to population ratio). In another cities of China, the housing marketplace seems to be saturated, but there is simply a problem everywhere with the renovation and renovation of an ageing housing substance.

Source:

https://www.yicai.com

Turbulence and economy

China's economy is reviving, but not without problems. This concerns, among another things, the decline in the profits of industrial enterprises¹. According to the data of the State Statistical Office (国家统计局) in the first 2 months of this year, they decreased by 22.9% compared to the same period of the erstwhile year. The declines in profits in manufacture have already been observed since the mediate of last year, but the first 2 months of the year are a crucial (violent) decrease in profits. In companies

State profits decreased by 1.5%,
in private by 19.9%,
in abroad by 35.7%.

There was a slight decrease in the mining industry, by 0.1%. In production companies by 32.6%.

The situation was different for companies active in the production and supply of fuels, electricity, heat, gas and water. Their profits increased by 38.6% y/y.

The average period for settling claims between companies was 66 days and increased by 7.3 days/year.

Is this an accident at work or something more serious? More serious conclusions should be stopped, at least until the end of the second quarter.

Source:

¹Data of the State Statistical Office (国家统计局).

The investigation concerns industrial companies whose yearly revenues are at least RMB 20 million (approximately PLN 12.72 million).

http://www.stats.gov.cn

Relief remains

According to the announcement of Prime Minister Li Qiang (李强), by the end of 2024 a preferential taxation policy was adopted in 2022 as part of efforts to defend and revive the economy affected by the effects of stringent rules against the Covid-19 epidemic.¹

Last year the reductions in taxes, fees, taxation returns or deferred payments totalled 4.2 trillion RMB (about PLN 2,66 trillion). This amount included 2.4 trillion RMB (approx. PLN 1.55 trillion) of VAT-related reductions, the largest in decades.

Li Qiang besides announced that the zero work rate for coal imports introduced in April 2022 would besides be maintained. Coal imports increased by 71% in China during the first 2 months of this year.

Source:

¹https://new.qq.com

Apple and China

Following the break due to the Covid-19 epidemic in Beijing, another China improvement Forum (中国发展高层论坛) took place. It was attended by nearly 100 heads of the largest global corporations. As usual, the heads of American companies (BHP Group Ltd., Rio Tinto Plc., HSBC Holdings Plc, Standard Chartered Plc, Nestle SA, Boston Consulting Group Inc., Bridgewater Associates, Invesco Ltd., Blackstone Inc., Apple And others).

The regular guest of this forum is Tim Cook CEO Apple.¹

In his speech, he presented Apple's almost 30-year relation with China, both as a marketplace and as a production centre. He stressed that Apple was increasing with the mediate State during this period, and that the relation between the company and 1 of its largest markets became “symbiotic”. Cook besides praised China's efforts to make innovative technologies, stating that “innovations are developing rapidly here and I believe they will proceed to accelerate.”

Tim Cook besides mentioned “the request for young people to learn critical reasoning skills”.

Apple plans to increase its agrarian education programme in China to RMB 100 million (about PLN 63.43 million).

Source:

¹https://finance.eastmoney.com

https://cpu.baidu.com

The price war...

...in the car industry. It was started by Tesla ShangHai Co., Ltd. (特斯拉上海有限公司), which at the beginning of the year lowered its car prices by 5–10%. It didn't take long for the competition to react.¹ The Chinese producers not only began to lower their car prices, but enabled buyers to usage local and central subsidies to buy a NEV car. Local grants scope from 2000 RMB to 15000 RMB (approx. 1268 ~ 9513 PLN) for the acquisition of a single car. It is known that a price war between large players in the Chinese marketplace can lead to the collapse of smaller producers. The price war presently includes not only NEV cars, but besides diesel cars as well as luxury cars.

More than 35 Chinese producers are active in price clashes. And this is the first case in the past of Chinese automobiles to get local companies to get specified a competitive tool.

In total, 173 different car models were included in the price reductions. Over 41% of all producers Electric cars cut prices of 100 000 RMB and more (about 63,445 PLN) and 20% of them decreased prices between 50 000 and 100 000 RMB (about 31,724 to 63,445 PLN).

Given that China is the largest automotive marketplace globally, it can be expected that the "domestic war" of Chinese producers will translate into an increase in the activity of these producers on abroad markets.

Source:

¹https://www.shobserver.com

Reserves hold tight

According to the State Administration of abroad Currency (国家外汇管理局), at the end of February this year the value of China's abroad reserves was PLN 3.133 trillion (approx. PLN 13.78 trillion).¹

Source:

¹http://www.news.cn

A increasing number of complaints

At the end of February this year, there was a strong increase in the number of complaints, complaints, interventions concerning website activities. These included the posting of false information, fake news, pornographic content, gambling advertising, content violating civilian rights, and average rumors violating the welfare of people and companies.

According to the Central Administration of the Cyberspace of China (中央网信办举报中心) in February, 14.599 million specified applications were submitted, which means an increase of 10.4% m/m and 18.4% y/y.¹ In the same period of the erstwhile year, 12,332 million specified notifications were registered.

Source:

¹http://society.people.com.cn

http://www.cac.gov.cn/

HuaWei's on the straight?

HuaWei (华为) has not presented any fresh model of his smartphone to the planet for a long time. Finally, the company organized a spring presentation, during which the latest “children” of the Chinese producer, including HuaWei P60 and Mate X3, was presented.¹

HuaWei P60 is simply a model from a fresh flagship series.

The heart of these phones is the Qualcomm Snapdragon 8+ processor, which does not supply 5G (!!!) connectivity. This is simply a consequence of US sanctions on HuaWei. Another consequence of the sanctions is HuaWeia's own operating system, or Android Harmony OS 3.

P60 has an OLED 6.67 inch screen with a resolution of 2700×1220 pixels, in which the selfie camera lens is placed. There were 3 cameras on the rear wall of the device:

variable aperture (f/1.4-f4.0)
with OIS stabilisation, wide-angle and
with a telephoto lens.

Battery 4810 mAh with wireless/inductive charging capability. Stereo and NFC speakers.

Memory-dependent prices:

128 GB 4488 RMB (approx. PLN 2840)
512 GB 5988 RMB (approx. PLN 3790).

HuaWei besides presented another premier models from this family, namely:

HuaWei P60 Pro at the price of 6988 RMB (approx. 4425 PLN) for a version with a memory of 256 GB and 7988 RMB (approx. 5060 PLN) for a version with memory of 512 GB and

P60 Art at the price of 8988 RMB (approx. 5690 PLN) with memory of 512 GB and 10988 RMB (approx. 6960 PLN) with memory of 1 TB.

HuaWei MateX3 is simply a folding smartphone. It was equipped with a flexible 7.8 inch diagonal screen with a resolution of 2496×2224 pixels. The screen reaches a brightness of up to 1000 rivets and can be unfolded at different angles. On the outside of the housing, an OLED screen with a resolution of 2504×1080 pixels was mounted, which is protected by Kunlun glass. The rear of the housing is mounted:

Sony IMX766 RYYB and OIS
a telephoto camera and
Wide-angle camera.

The heart of this model is the Qualcomm Snapdragon 8+ 4G processor. 4800 mAh battery with wireless/inductive charging capability. In the Collector’s Edition version, a fresh generation carbon battery with a capacity of 5060 mAh. Price range:

from 12 999 RMB (approx. PLN 8210) for 256 GB memory
to Collector’s Edition for 15 999 RMB (about 10 127 PLN) with memory of 1 TB.

Does HuaWei go consecutive about smartphones? It's besides early to judge. What is certain is the fact that HuaWei presently produces most of the parts for its smartphones. The biggest challenge is both limited access to the latest microprocessors and expanding competitive force on the Chinese market. But in this peculiar case, force can bring unexpected and very interesting fruit...