2024 Calendar Week 4

1.China’s car exports to reach 5.221 million units in 2023, surpassing Japan as top car exporter

According to the most recent data released by the General Administration of Customs (GAC), China’s automobile exports reached a remarkable 5.221 million units in 2023. This represents a substantial surge of 57.4% compared to the previous year, setting a new record. The surge in China’s auto exports in 2023 is noteworthy as it is anticipated to match the combined exports of 2021 and 2022.

As reported by the Associated Press, China is on the verge of surpassing Japan as the world’s leading auto exporter. Since 1980, Japan has held this position for over four decades due to its high cost-effectiveness and fuel efficiency. However, data released by the Japan Automobile Manufacturers Association (JAMA) reveals that Japan exported 3.99 million cars in the first 11 months of 2023. Projections indicate that annual car exports in 2023 are expected to hover around 4.35 million units, nearly one million units less than China’s impressive 5.221 million car exports for the same year.

The year 2022 marked the onset of the rapid proliferation of electric vehicles in China and an enhancement in the brand image of local enterprises. This phenomenon has consistently eroded the market share of German and Japanese brands. Japanese cars, reliant on cost-effectiveness and low fuel consumption, are finding it increasingly challenging to compete. Furthermore, the absence of substantial investment by Japanese car companies in new energy vehicles has led to a sharp decline in the sales of Japanese automobiles in the Chinese market. Notably, in 2023, sales volumes for Toyota, Honda, and Nissan in China all experienced a decline, with Nissan China witnessing a significant 24% drop.

The surge in the popularity of electric vehicles in China has prompted domestic brands to expand globally. Over the past two years, major Chinese car companies such as BYD, SAIC, Great Wall, Changan and Chery have made substantial investments in and established factories overseas. According to available data, BYD achieved sales of 242,800 units of new energy vehicles overseas in 2023. China’s automobile globalization is a relatively recent development, with Chinese enterprises only recently making substantial strides in the international market.

2.China’s shipbuilding industry has led the world for 14 consecutive years, marking a full breakthrough

On January 15, the Ministry of Industry and Information Technology unveiled the latest data highlighting China’s remarkable achievements in the shipbuilding industry. For an impressive 14 consecutive years, China has secured the top position globally in the three pivotal indicators of shipbuilding: completion volume, new orders, and hand-held orders. Notably, China stands as the sole country where all three indicators have simultaneously experienced comprehensive growth.

The data for 2023 underscores the industry’s exceptional performance, with the shipbuilding completion volume reaching 42.32 million DWT(Deadweight Tonnage), reflecting an impressive 11.8% increase from the preceding year. Equally noteworthy is the surge in new orders, which escalated by 56.4% to a volume of 71.2 million DWT. As of the close of 2023, the volume of orders in hand reached 139.39 million DWT, marking a substantial 32.0% increase from the previous year. This significant achievement marks the first instance where all indicators have achieved double-digit growth concurrently.

In the preceding year of 2022, China surpassed both Japan and South Korea in all three major indicators for the first time. Building on this success, 2023 witnessed historic milestones for several large shipyards, culminating in China surpassing Greece to claim the title of the world’s largest ship-owning country.

China has not only outpaced foreign competitors in all construction indexes but has also showcased its prowess through noteworthy projects. The docking of China’s inaugural domestically built large cruise ship, ‘AIDA Mordor,’ and the ahead-of-schedule naming and delivery of the 174,000 cubic meters large liquefied natural gas (LNG) carrier ‘LNG Geneva’ are emblematic of China’s capabilities. China can now simultaneously construct aircraft carriers, large LNG carriers, and large cruise ships—a feat marking a historic zenith.

This pinnacle in the shipbuilding industry harks back to the Ming Dynasty’s ‘Zheng He to the West’ period in historical context. Unlike a transient moment of glory, China’s current shipbuilding peak signifies the dawn of a new era, reflecting sustained excellence and innovation in this crucial sector.

3.Apple’s complete range of iPhones will be involved in a promotion in China for the first time

On January 15, Apple’s official website in China made an announcement regarding a limited-time ‘New Year Promotion’ scheduled from January 18 to January 21. This promotional event entails a reduction in the prices of designated Apple products for purchases made using eligible payment methods, with discounts reaching up to 800 RMB

Traditionally, Apple has been known to offer price reductions before the annual release of new products in September, a strategy aimed at clearing inventory of older models. However, this year, a departure from this trend is evident, as the announcement comes merely three months after the release of new products, suggesting a sense of urgency on Apple’s part.

Recent developments reveal a decline in Apple’s stock price and sales. Data indicates a substantial 30% year-on-year decrease in iPhone sales in China during the first week of 2024. Moreover, Apple’s share price has experienced a significant drop of $200 billion over the past few months, leading to downgrades in its rating by professional organizations in the United States.

Market analysts attribute Apple’s challenging start in 2024 to two primary factors:

1. Seasonal Surge in Demand: Apple appears to be aiming to capitalize on the seasonal increase in demand anticipated during the upcoming Chinese New Year. The implementation of price cuts is a strategic move to stimulate sales during this festive period.

2. Competition from Chinese Brands: Chinese brands, particularly in the high-end cell phone market, are intensifying competition for Apple. The Xiaomi 14 series, Vivo X100 series, and Huawei’s high-end series have exerted considerable pressure on Apple. Following the release of Huawei Mate 60 series in September 2023, Huawei has demonstrated accelerated progress, compelling even Apple to make substantial price cuts in response to the competitive landscape.

In light of these challenges, the dynamics of the smartphone market are evolving rapidly, with Apple navigating a changing landscape marked by both market conditions and formidable competition from Chinese counterparts.

4.Tsinghua University denies the rumor that 80% of its graduates have gone abroad

Amidst a heated debate surrounding an internet rumor claiming that ‘80% of Tsinghua University graduates go abroad,’ Tsinghua University took the initiative to address the matter officially on January 17. The university disclosed the employment outcomes of its 2023 graduates, revealing that the proportion opting to go abroad for further study is a modest 8.0%. Additionally, Tsinghua University emphasized that a significant majority of alumni who pursued studies abroad in the past two decades have returned to contribute substantially in diverse fields

To provide a broader context, Tsinghua University utilized the example of China’s C9 Consortium colleges and universities, which includes renowned institutions such as Tsinghua University, Peking University, Zhejiang University, Fudan University, Shanghai Jiaotong University, Nanjing University, Xi’an Jiaotong University, University of Science and Technology of China, and Harbin Institute of Technology. The study-abroad rates at these esteemed institutions have been consistently decreasing over the past several years, dropping from 23.7% in 2018 to 13.1% in 2022.

The growing strength of China on the global stage has attracted increasing attention and interest from overseas students. Recognizing the abundant opportunities within China, a rising number of international students are opting to return. In 2023, over 600,000 students went abroad for their studies, and more than 83.3% of them (500,000 students)returned to their home country for employment. In a notable milestone, the number of returning students surpassed one million for the first time in 2021. This trend reflects a broader pattern since the reform and opening up, with over 6 million Chinese students having returned home, contributing to the nation’s continued development and progress.

5.A sharp decline in Hong Kong and Chinese Stock Markets Raises Doubts About Economic Recovery

On January 17th, both the Hong Kong and Chinese stock markets underwent a substantial downturn, reaching historic lows. The Hang Seng Index in Hong Kong witnessed a decline of 589.02 points, approximately 3.71%, breaching the longstanding support level of 16,000 points and closing at 15,282.32. This marks the lowest point for the Hang Seng Index since November 2022. The Hang Seng Tech Index also recorded a significant decrease of 4.99%. On the Chinese mainland, the CSI 300 Index fell by 2.18%, closing at 3,229.08, reaching its lowest level in five years. The Shanghai Composite Index concluded with a 2.09% decrease, closing at a new low of 2,822.62.

Experts attribute the causes of this stock market downturn to various factors, with the most significant correlation being the economic slowdown indicated by China’s release of GDP data for 2023. China’s economic growth for each quarter of the preceding year is as follows: Q1 – 4.5%, Q2 – 6.4%, Q3 – 4.9%, and Q4 – 5.2%. The annual economic growth rate for the entire year stood at 5.2%.

According to CNBC, the impact on market sentiment stems from China’s Q4 economic data falling below expectations. The National Bureau of Statistics of China reported a Q4 economic growth of 5.2%, slightly below the anticipated 5.3%. Of particular concern to the market is the QoQ growth rate of only 1%, indicating a significant deviation from the official narrative of a strengthened economic recovery in the fourth quarter.

Many economic forecasting institutions suggest that the continuous decline in the Chinese real estate market may result in a lower economic growth rate for China in 2024 compared to 2023. Analysts express concerns over December’s data, indicating that the Chinese real estate crisis may not be improving and could potentially deepen. Retail sales growth is slowing, and investment conditions remain lukewarm. They highlight that, among the recently released economic data in China, only industrial output data shows some signs of improvement.

Simultaneously, Premier Li Keqiang emphasized at the World Economic Forum that China is committed to avoiding excessive stimulation and is not willing to accumulate long-term risks for short-term growth. Chinese leaders are striving to shift the national reliance away from the real estate and construction sectors, which have traditionally served as pillars of economic growth. Additionally, they aim to reduce dependence on borrowing, while factors such as population decline and an aging labor force contribute to increased uncertainty in the future.

Jun Rong Yeap, Market Strategist at IG Group, a Singapore-based financial services company, commented, “The series of economic data released by China today seems to reflect more on the current economic situation—an imbalanced growth environment. This doesn’t provide much evidence to believe in a sustainable turnaround in the economy anytime soon.”

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