Key Economic Indicators Show Rebound in October, According to National Bureau of Statistics

On November 15, the National Bureau of Statistics reported a significant rebound in key economic indicators for October, including consumption, services, and trade.

The added value of industrial enterprises above the designated size increased by 5.3% year-on-year in October. From January to October, the added value of these enterprises grew by 5.8% year-on-year, maintaining the same growth rate as in the January-September period.

Retail sales of consumer goods in October totaled CNY 4.54 trillion, a year-on-year increase of 4.8%, accelerating by 1.6 percentage points compared to September, with a 0.41% growth month-on-month. Cumulatively, from January to October, total retail sales reached CNY 39.90 trillion, up 3.5% year-on-year, a 0.2 percentage point increase from the January-September period.

In terms of investment, fixed asset investment (excluding rural households) from January to October amounted to CNY 42.32 trillion, representing a 3.4% year-on-year increase, consistent with the growth rate in the January-September period. Excluding real estate development investment, fixed asset investment grew by 7.6%.

Data Source: https://www.stats.gov.cn/sj/zxfb/202411/t20241115_1957431.html

Shanghai Announces New Tax Policies to Boost the Property Market？

On November 18, Shanghai’s Ministry of Finance, State Taxation Administration, and Ministry of Housing and Urban-Rural Development unveiled new VAT and preferential tax policies for residential property transactions, set to take effect on December 1, 2024.

Key Policy Adjustments:

Personal Income Tax Adjustment for Non-Ordinary Housing Sales:

• The previous regulation requiring individuals to calculate personal income tax at 2% of the transfer revenue for non-ordinary housing sales has been eliminated.
• Other personal income tax policies remain unchanged, including the exemption for individuals selling their sole residence after using it for over five years.

VAT Exemption for Housing Sales:

• Homes held for two years or more (including two years) are exempt from VAT.
• Homes held for less than two years will be taxed at a 5% VAT rate on the total transaction value.

Deed Tax Adjustments:

• For first-home buyers: Deed tax is 1% for properties 140 square meters or smaller and 1.5% for larger properties.
• For second-home buyers: Deed tax is 1% for properties 140 square meters or smaller and 2% for larger properties.

The policy changes aim to alleviate the tax burden on property transactions and stimulate housing market activity in Shanghai. By reducing taxes on long-held properties and offering preferential deed tax rates, the measures are likely to encourage both homebuyers and sellers, fostering a more vibrant real estate market.

Will these adjustments significantly benefit Shanghai’s real estate industry? Glopen will continue to monitor the impact closely.

U.S. Tightens Export Restrictions on TSMC, Impacting Advanced Chip Supplies to China

On November 11, the U.S. Department of Commerce issued a letter to TSMC, imposing restrictions on the export of certain advanced chips with 7-nanometer or smaller designs to mainland China. These precision chips are critical for powering AI accelerators and graphics processors (GPUs).

The Financial Times reported on the matter, citing three sources familiar with the situation. According to two of them, TSMC’s future supply of such semiconductors to customers in mainland China would require explicit approval from Washington.

This development mirrors the challenges faced by Huawei four years ago when a supply disruption from TSMC dealt a significant blow to the company. Today, a growing number of Chinese technology firms are encountering similar hurdles. Notably, over 70% of TSMC’s high-end chip orders originate from the United States, making the company heavily reliant on U.S. markets while also constrained by U.S.-imposed regulations.

The origins of these restrictions can be traced back to the Trump administration, which raised concerns about TSMC’s trade practices and proposed potential punitive measures. The current administration appears to be maintaining a similar approach, citing national security as a key consideration. It is highlighted that the competition in the global semiconductor and AI markets is growing.

Tmall Revamps Double Eleven Festival Amid Shifts in E-Commerce Landscape

The “Double Eleven” shopping festival, a hallmark of China’s e-commerce industry for 16 years, underwent notable changes in 2024. Tmall has discontinued its iconic Double Eleven gala, ceased announcing real-time sales data, and executives are no longer giving media interviews.

Historically, Double Eleven was synonymous with record-breaking sales figures. In 2015, sales on Taobao and Tmall reached CNY 91.217 billion. By 2016, they crossed the CNY 100 billion milestone, climbing to CNY 120.7 billion. In subsequent years, sales continued to soar, reaching CNY 168.2 billion in 2017 and CNY 213.5 billion in 2018. However, since then, specific sales data for the event have not been publicly disclosed.

The evolving e-commerce landscape is a key reason for the festival’s diminishing allure. Platforms like Pinduoduo and JD.com have disrupted the ecosystem with innovative consumption models. Competition now extends beyond price wars to focus on brand-building and enhancing the consumer experience. With more choices available, consumers are prioritizing quality and practicality over promotional hype.

The rise of social media and live commerce has also played a transformative role. Consumers are increasingly drawn to interactive live streaming campaigns with personalized recommendations, diluting the appeal of centralized shopping festivals like Double Eleven. For many, the event has become part of “everyday shopping” rather than an eagerly awaited promotional moment, reflecting a normalization of consumption habits.

Despite these changes, the growth of e-commerce remains robust. The global e-commerce market is projected to reach nearly $6 trillion in 2024, with China accounting for more than half of the total sales. However, Alibaba’s pioneering dominance in the sector has given way to a more diverse and competitive ecosystem, as new platforms emerge to cater to varied consumer needs and drive market innovation.

Influencer Li Ziqi Returns After Three-Year Absence, Garnering Massive Online Buzz

Li Ziqi, one of China’s most renowned influencers, made a highly anticipated return on November 12 after a three-year hiatus from posting content. Her comeback quickly became a trending sensation, with her latest video featuring traditional Chinese lacquerware techniques amassing 120 million views and over 1.94 million interactions, including shares, comments, and likes, on Sina Weibo by 10 am on November 13.

Li rose to fame in 2016 with her short videos portraying idyllic rural life in Sichuan province, where she lived with her grandmother. Often dressed in traditional attire, Li captivated audiences with poetic depictions of planting seeds, crafting bamboo furniture, and preparing Chinese dishes. Her new videos, shared across platforms such as Douyin, Sina Weibo, and Xiaohongshu, showcase her transformation of a shed into a woodland cloakroom and her craftsmanship in creating wardrobe doors using lacquerware techniques—a Chinese intangible cultural heritage.

Li’s influence extends far beyond China’s borders. She posted the new videos on YouTube as well, where she holds a Guinness World Record for being the Chinese-language YouTube channel with the most and has reached 20 million subscribers as of today. Her overseas audience continues to be captivated by her portrayal of China’s serene and picturesque rural life, praising the simplicity and elegance of her work.

“Li Ziqi posting two new videos after three long hard years is the equivalent of the sun breaking through and warming a frigid desolate frozen wasteland. And I feel like I’m being enveloped in a warm comforting hug,” wrote one enthusiastic fan on social media platform X.

Li’s return is not just a cultural moment but also a significant business event, underscoring the enduring appeal of Chinese traditional craftsmanship and rural aesthetics in both domestic and international markets.