2023 Calendar Week 48

1. China launched a unilateral visa-free initiative for six nations: France, Germany, Italy, the Netherlands, Spain, and Malaysia

“From December 1, 2023 to November 30, 2024, citizens from the six countries-France, Germany, Italy, the Netherlands, Spain and Malaysia-holding ordinary passports can be exempted from visa to enter China and stay for no more than 15 days for business, tourism, family visit and transit purposes.”

-Cited from Foreign Ministry Spokesperson Mao Ning’s Regular Press Conference

According to the French newspaper “Les Echos,” following China’s announcement of a unilateral visa exemption for France, the French Ministry of Foreign Affairs promptly responded on Friday. It was stated that all Chinese individuals who have studied in France for at least one semester and have successfully obtained a master’s degree, regardless of whether the degree was conferred by a French or Chinese institution, will be eligible for a five-year multiple-entry short-term visa to France. French Foreign Minister Colonna also mentioned that this measure aims primarily to facilitate the travel of Chinese students between the two countries. The implementation of this policy is currently in the preparatory stage, and specific details will be disclosed shortly.

The German Ambassador to China, Patricia Flor, communicated through different social media platforms, affirming, “The decision to remove visa requirements for Germany will significantly facilitate the travel of German citizens to China.” Beyond expressing appreciation for China’s policy, Ambassador Flor conveyed additional positive developments for Chinese travelers intending to visit Germany. “The visa appointment waiting period at the embassy in Beijing and its partner, VFS Global, has been reduced to just a few days,” mentioned Flor.

Data Source:https://www.mfa.gov.cn/eng/xwfw_665399/s2510_665401/202311/t20231124_11186670.html

 

2.NIO and Changan Automobile Forge Battery Swap Business Partnership; Negotiations Underway with 4-5 Other Automakers

On November 21st, Changan Automobile and NIO signed a battery swap business cooperation agreement in Chongqing. Both parties will collaborate on establishing battery swap standards, developing battery swap networks and sharing infrastructure, jointly researching battery swap vehicle models, and implementing an efficient battery asset management mechanism. This marks NIO’s first partnership in five years since it entered the battery swap service, and the first cooperative vehicle model is rumored to launch in 2025.

This collaboration presents significant advantages for NIO in three key aspects.

1. Overcoming Skepticism:

The battery swap model by NIO has faced persistent skepticism. Changan’s partnership serves as a robust counterattack against critics, demonstrating support for NIO within the national automotive sector.

2. Standard Leadership:

NIO has taken the initiative in setting battery swap standards. Collaborating with established automakers like Changan is crucial for standard integration, laying the foundation for future partnerships with other automotive companies.

3. Market Confidence and Stability:

Amidst the formidable growth of new players like Li Auto and XPeng Motors, NIO has faced fewer positive developments this year. Partnering with Changan not only boosts market confidence but also stabilizes consumer trust, providing a positive narrative for NIO.

However, several uncertainties surround this collaboration.

1. Ambiguity in Cooperation Model:

The specific cooperation model between Changan and NIO remains unclear. Changan’s role and financial commitment are pivotal for NIO’s future development, and further clarification is needed for the collaboration’s success.

2. Changan’s Strategic Shift:

The sudden emphasis on battery swap by Changan, especially given its previous focus on the B2B market with models like the Eado EV460 battery swap edition, raises questions. Is Changan targeting the consumer market, and why the sudden embrace of a model not widely favored by most automakers?

3. Impact on NIO Brand Experience:

The collaboration’s effect on the user experience of NIO’s brand customers remains uncertain and warrants attention.

In light of NIO’s expanding losses this year, reaching CNY 107.9 billion in net losses for the first half, strategic external collaborations in the battery swap business are seen as a means to reduce operational costs and expedite the company’s return to profitability, aligning with the recent internal optimization efforts announced by CEO William Li on November 3rd.

 

3.China and Saudi Arabia Sign Bilateral Currency Swap Agreement while Chinese currency strengthened

Last week,China and Saudi Arabia have signed a bilateral currency swap agreement with a size of 50 billion CNY. This agreement underscores the strengthening economic ties between the two nations, facilitating financial cooperation and trade transactions. The three-year validity period of the agreement further solidifies the commitment to mutual economic collaboration. China, being Saudi Arabia’s largest trading partner, continues to promote the use of the CNY in transactions, aligning with a broader global trend of diversifying away from the U.S. dollar in non-oil trade. This development represents a strategic move to deepen economic integration and enhance trade and investment facilitation between China and Saudi Arabia.

Domestically, with the stabilization and rebound of the economy coupled with policy signals promoting “expectation stability,” CNY has significantly strengthened. The onshore CNY against the U.S. dollar has accumulated a rise of 647 basis points to reach 7.1488, while the offshore CNY against the U.S. dollar has accumulated a rise of 693 basis points to reach 7.1483. The central parity rate of the CNY has been cumulatively adjusted upwards by 577 basis points to reach 7.1151.

CNY Index Performance: CFETS, BIS, SDR

According to data, as per the statistics from the State Administration of Foreign Exchange, in October, China’s international balance of goods and services trade showed exports of $298 billion, imports of $271.9 billion, resulting in a surplus of $26.1 billion. The total turnover in China’s foreign exchange market in October reached 16.24 trillion yuan (equivalent to $2.26 trillion). As of the end of June, China’s external securities investment assets (excluding reserve assets) amounted to $1.0817 trillion. Among these, equity investments stood at $606.3 billion, while bond investments were at $475.4 billion.

 

4.Moutai Cocktail Launched with Jay Chou as Product Endorser and Chief Tasting Officer, reaching out younger generations

Moutai is strategically targeting a younger demographic through diverse initiatives. On November 20, Moutai collaborated with MOJT Mojito to unveil the highly anticipated “Taste of Guizhou” series of cocktails, with popular singer Jay Chou serving as the spokesperson.

An analysis of Moutai’s recent partnerships reveals a focus on collaborations with industry leaders in food and beverages, including Mengniu, Luckin Coffee, and Dove. However, the introduction of cocktails represents a novel collaboration with a wine company, signaling a departure from their typical collaborations. This move not only sets an example for other liquor companies but also imparts valuable lessons

Firstly, the importance of exploring synergies between established and emerging wine brands is emphasized. Successful collaborations hinge on differentiation, evident in products like soy sauce coffee and the “Guizhou flavor” cocktail. Moutai, leverages its established reputation to appeal to a younger market. Simultaneously, emerging brands like Mojito, endorsed by Jay Chou, gain credibility and publicity through association with a classic brand.

Secondly, the development of innovative flavors necessitates a departure from traditional approaches. While authenticity holds undeniable value for seasoned liquor enthusiasts, the broader beverage and FMCG markets require continuous exploration of new products to cater to a diverse consumer base.

In recent years, Guizhou Moutai has proactively introduced trendy, personalized, and stylish products to attract young consumers and expand its customer base. Despite the appealing aroma of traditional sauces, the challenge lies in capturing the authentic flavor preferences of the younger generation.

 

5.Taobao canceled its Double Twelve shopping festival

On November 24, the news of Taobao’s cancellation of the “Double 12” event quickly gained traction on Weibo, sparking discussions among Chinese netizens. This decision signifies that Taobao will not be hosting the traditional “Double 12” activities this year; instead, it plans to launch an event in December called the “Taobao End of Year Good Price Festival,” expected to commence at the end of November.

Since the inaugural “Double 12” promotional event across all platforms in 2013, a decade has passed. The announcement of Taobao discontinuing the Double 12 event prompted immediate reactions, with some expressing a desire to continue shopping and opposing the cancellation of Double 12. Others suggested that a more innovative approach was needed rather than a mere change

Schedule of year-round promotions

Taobao has revealed that the “Taobao Good Price Festival” will kick off on December 9 at 8 p.m. This new event promises increased discounts, participation from larger merchants, and a broader range of goods compared to the previous year’s “Double 12” sale. The “Taobao year-end good price festival” serves as a continuation and enhancement of the preceding Good Price Festival.

Prominently, leading Chinese e-commerce platforms have moved away from extensive advertising campaigns, leading to an elongation of the shopping cycle and a reduced focus on real-time sales data competitiveness. The current atmosphere, in contrast to the bustling Double Eleven and Double Twelve events in the past two years, is characterized by a noticeable tranquility. Tmall’s monthly promotional activities illustrate that shopping festivals now span two-thirds of the year, featuring intense competition among major businesses and merchants offering short-term festival deals and employing hunger marketing to sustain consumer spending.

Nevertheless, with the standardization of corporate strategies, prolonged marketing endeavors, and financial constraints, a segment of younger consumers is expressing signs of “consumerism fatigue.” This trend signifies a growing inclination to disengage from the intensity of shopping festival promotions and adopt a more measured approach to consumption.

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