China News This Week: Wednesday 26 January 2022

This week's news and trends in China:

 Chinese Consumers

Chanel vs Irrational Nationalism in China: It's not an uncommon technique for local brands to raise their profile, but China's online consumers commented overwhelmingly in favour of the foreign brand this time.

China Tops Forecasts with 8.1% Growth in 2021 but Headwinds Loom: China's economy rebounded in 2021 with its best growth in a decade, helped by robust exports, but there are signs that momentum is slowing on weakening consumption and a property downturn, pointing to the need for more policy support.

Twice as Many Chinese to Head Home for Lunar New Year Despite Call to ‘Stay Put,’ Study Finds: Despite Beijing again pushing for people to remain in the places where they work over the upcoming Chinese New Year holiday to stem further covid outbreaks, the ‘stay put’ request is expected to have less influence this year. Around twice as many people are likely to head home this Spring Festival according to the country’s top investment bank China International Capital Corp. Figures from the Ministry of Transport expect 1.78 billion trips - accounting for 72% of people - up from 840 million a year ago. A Chinese mayor has been derided by state media and on social media after a detention threat for Lunar New Year returnees.

China Widens Testing Blitz After Mail Suspected for Covid: Residents who received overseas mail between Jan 16-19 were told to take a coronavirus test within three days. Beijing residents have been asked to minimize purchases from high-risk countries and disinfect parcels thoroughly when unpacking. This is in light of Chinese officials saying that there is no evidence that you can catch covid from non-frozen goods from overseas. Beijing now requires workers in the imported cold chain food industry to hold Covid-19 nucleic acid negative test certificates within three days, instead of the previous seven days. In Beijing, consumers buying cold and flu drugs will also be tested for Covid.

China’s Foreign Firms Are Running Out of a Key Resource: Foreigners: Nearly two years of strict border controls have led to a growing shortage of foreign talent in China. As many as 100,000 foreigners may be waiting for permission to return to Shanghai alone, local media outlet SmartShanghai estimates. In a recent survey, British firms based in China named the country’s tight border controls as their number one concern. Representatives from other international chambers of commerce in China say their members share similar views. In December, a senior official in Shanghai told a forum that the city "is longing for global professionals more than ever."

The Hunt for Beijing's Wild Leopard Cats: Leopard cats live under the shadows of the alpine skiing slopes of the Winter Olympics. Beijing is one of the few major capital cities with a species of wild cat - which experts say shows the city is home to a diverse range of wildlife - yet little is known about how these animals live in a metropolis of over 20 million people.

Digital China

Shopify, JD.com Pair Up in China as Ecommerce Competition Intensifies: Shopify merchants will be able to sell on JD's cross-border platform JD Worldwide and open up access to its 550 million active customers in China. Shopify merchants in the US can start selling their products in China within three to four weeks.

Apple's iPhone 13 Tops China's Smartphone Sales for Six Consecutive Weeks: The new camera, 5G feature and lower price help the world's most valuable company gain the top spot for the first time since December 2015. In recent years, Apple has usually sat around the No. 4 or No. 5 position in China. Chinese smartphone brands have launched a counter-attack to Apple's surprise surge with gaming-optimised devices, foldable screens, special selfie cameras and more.

Apple Shares 'Shot on iPhone 13 Pro' Film Celebrating Chinese New Year: This year's Lunar New Year sees another 'Shot on iPhone' movie with the story of a father, a son and a forgotten village with an out-of-this-world dream.

Food & Beverage

Coke and Pepsi Copy Genki Forest’s Sugar-Free Beverages: One of the most innovative consumer brands to emerge in China in recent years, Genki Forest, has created a market for pricey sugar-free drinks. Now major global and Chinese players are piling in to compete.

Luckin Coffee May Return to the US Stock Market After Being Delisted Following a $300 Million Accounting Fraud: Luckin’s third-quarter revenue jumped 106% to $370 million, though the strong growth can likely be attributed to a decline in year-ago sales during the first year of the COVID-19 pandemic. Luckin operates 5,671 stores, about 500 more stores than Starbucks operates in China.

 Entertainment

Foreign Titles Squeezed in China Film Market Just 39% of the 67 imported films allowed in China last year were American, down from 46% in 2020 and 47% in 2019. Less than a third (28%) of the foreign films screened last year were 2021 titles. Most were older, and a tenth of them were archive titles that dated from before 2010. Last year, approvals were granted later than ever, often just days in advance, giving Hollywood studios little time to create effective marketing campaigns in China, compared with Chinese films which are given months to prepare and build awareness.

 Pets

China’s Pet Market Grew 21% in 2021 Amid Young Adults' Animal Craze: China's pet market grew 21% to ¥249 billion ($39.2 billion) in 2021 from 2020. Urban households had nearly 58.1 million cats and almost 54.3 million dogs as of last year. The average dog owner spent ¥2,634 ($415), up 17% on 2020, with cat owners spending ¥1,826 ($288), similar to 2020. 46% of all pet owners in China were born after 1990. More than a fifth of the total were born after 1995.

 Luxury

In China, Spending on Luxury Goods Increased by $20 Billion Last Year: Spending on luxury goods in China has nearly doubled since the start of the pandemic, growing 36% last year to ¥471 million ($74.3 billion) according to Bain. Online luxury sales grew 56%. Leather goods were the faster growing category at 60%.

Eyeing Chinese Market, Global Luxury Brands Embrace Year of the Tiger: At the duty-free stores in south China's island province of Hainan, tiger elements and red can be seen almost everywhere. 81 million tourists visited Hainan last year, up 25.5% from 2020. Limited edition luxury Lunar New Year items are a big hit, covering cosmetics, clothing, bags, watches, and wine, among others.