China News This Week: Wednesday 13 April 2022
This week's news and trends in China:
Chinese Consumers
Brands Shy Away From Celebrity Marketing in China: Celebrity marketing events in March 2022 fell by 50.9% compared with the same period last year. Conversely, co-branded marketing surged 91.3% and new product marketing was up 57.6%, while sports marketing jumped 6.6 times.
Shanghai's Chaotic Covid Lockdown Puts Other Chinese Cities on Edge: As Shanghai's Covid-19 lockdown leaves residents struggling to access food or medical care, citizens elsewhere in China fear similar stringent measures are heading their way - even as officials seek to assure the public they are well prepared. In Guangzhou, where all 18 million residents faced mandatory testing after a handful of infections were found last week, officials stressed that food and other supplies were well taken care of - despite one local paper reporting shortages at supermarkets due to "panic buying." Shanghai has eased the lockdown despite the surge in Covid cases, allowing 'appropriate activity' in areas where there have been no cases for at least two weeks. The lockdown will be lifted on 7,565 communities and sites. Chinese health authorities have warned of Covid contamination risks on clothing imported from South Korea.
Why Shanghai Has Done a U-turn on its 'Relaxed' Covid Approach: Until last month, Shanghai had taken a more relaxed approach than other Chinese cities. The main reason Shanghai has differed until now is its importance for the Chinese economy. Shanghai has made up over 10% of China's total trade since 2018. In 2020, cargo flights into Shanghai Pudong International Airport accounted for 3.4 million tonnes of goods - a million more than the airports in the other tier 1 cities of Beijing, Guangzhou and Shenzhen combined. China could stand to lose $30 billion of GDP for each week that the city is locked down.
Upgraded China-New Zealand FTA to Bring Brighter Shared Future: Ambassador: An upgraded FTA went into force on April 7, seeing New Zealand liberalise 100% of tariff lines and China liberalise 97%. Since the initial bilateral FTA in 2008, two-way trade between China and NZ has grown at an average of 11% a year. Trade in goods hit a new record in 2021.
US Seeks to Realign Its Commercial Ties With China, Trade Chief Says: The US is seeking to realign its commercial ties with China rather than seek a "divorce" between the world’s biggest economies, trade chief Katherine Tai said. Asked whether US-China tensions could lead to decoupling, Tai said the Biden administration’s policy was focused instead on "realignment in the global economy." That includes addressing the lack of visibility, accountability and diversity in supply chains that has led to disruptions in recent years. US goods exports to China grew 21% last year to a record $149 billion. 858,000 American jobs are supported by exports to China, according the U.S.-China Business Council.
Digital China
Driverless Delivery Vehicles Transform Grocery Trade: Navigating by radar and sensors, a typical unmanned delivery vehicle automatically calculates optimal routes and avoids barriers and pedestrians. It sends messages to the recipient when approaching final destinations. Compared with traditional delivery, unmanned delivery feature lower delivery costs, larger carrying capacity and higher safety for one-hour delivery. It also provides a viable alternative to address some challenges, such as rising labour costs and a shortage of couriers.
Billionaire Founder of JD.com Steps Down as Tech Execs in China Retreat from the Spotlight: Richard Liu is passing the baton to Lei Xu, JD.com's current president, well regarded for improving JD's user acquisition and retention. Liu is the latest in a series of recent leaders' resignations from China's tech giants amid tighter regulations of the industry. The founders of ByteDance and Pinduoduo recently stepped down meaning that only Tencent's Pony Ma, Xiaomi's Lei Jun and Baidu's Robin Li are the only founder-CEOs remaining in the big tech firms.
Food & Beverage
Beyond Meat Launches Store on Pinduoduo as China’s Appetite for Plant-Based Protein Soars: The PDD store follows previous launches on Hema and JD platforms. Beyond Meat also has plans to open a R&D centre in Shanghai soon. Beijing has signalled its intent to support the growth of the domestic plant-based food sector. The vegan food sector is forecast to be worth $12 billion by 2023. A study into fake meat reported that it is not as sustainable as its advocates claim and risks entrenching domination of food systems by giant agri-business firms, standardise diets of processed foods, and industrial supply chains that harm people and the planet.
Beauty
Chinese Courts Penalise Copycat Fragrance Using Iconic Trade Dress of CHANEL N°5: After Chanel successfully won 3D trademark protection at the Xi'an Intermediate Court following a blatant rip off of its perfume bottle, the judgment was dismissed by the Shaanxi High Court, but ruling upheld under the trade dress protection on an unfair competition basis - an increasingly common approach for protecting iconic products.
Health
China’s One Trillion Yuan Sleeping Economy: Over the last decade the average hours of sleep in China shortened by 1.5 hours to 7.06 in 2021 compared to 8.5 in 2012. With 300 million Chinese people suffering from the issue, the pandemic has exacerbated sleep deprivation among the young in particular. This is something that affects almost everyone: 94% of the population are not getting the healthy standard of quality sleep.
China Relies on Traditional Medicine to Fight COVID Surge in Shanghai: Shanghai is distributing millions of boxes of traditional Chinese medicine (TCM) to residents, such as herbal products and flu capsules, which it says can treat COVID-19 in the battle to control its largest virus outbreak. About 98% of Shanghai's COVID-19 patients are taking TCM treatment, while a comprehensive study in Singapore found TCM to have no impact on fighting Covid-19.
Fashion
Shein's $100 billion valuation is Fast Fashion's Big Moment: Chinese fast fashion 'real-time' retailer Shein is now valued at more than Zara and H&M combined. It's median price for a dress is $13, versus $29.99 at H&M and $49.90 at Zara, with around 100 times more options to choose from than the two retailers. Its rise will test the industry's green commitments as a whole.
Cars
How China Turned Its Car Industry From Copycat To Global Player: It’s not just in styling where the Chinese vehicles have evolved, but in engineering as well. For instance, the Chinese-made Nio EP9 is currently the fastest electric car around the Nurburgring. Perhaps the most interesting of all the vehicles produced in China is the Wuling Mini EV, which only costs around $4,500 and is currently outselling the Tesla Model 3 in China. China's production and sale of new energy vehicles are expected to double and take 65% of the global market in the first quarter of this year.
Luxury
How China's Luxury Sector is Coping With the Latest Lockdowns: Luxury labels have been spoiling customers with a range of food supplies, from fresh vegetables to full course meals served by Michelin star restaurants. Sales associates continue to livestream, post product updates on WeChat, and initiate one-on-one consultations.
