China’s CPI Rises 0.2% Year-on-Year in November, Driven by Food Prices
In November 2024, China’s national Consumer Price Index (CPI) increased by 0.2% year-on-year, according to data released. Urban and rural areas saw rises of 0.1% and 0.2%, respectively. Food prices climbed by 1.0%, while non-food prices remained stable. Prices of consumer goods were flat, but service prices registered a 0.4% increase. From January to November, the nation’s consumer prices rose by an average of 0.3% compared to the same period in 2023.
On a month-on-month basis, the CPI dropped by 0.6% in November, with both urban and rural areas experiencing a 0.6% decline. Food prices decreased notably by 2.7%, while non-food prices fell slightly by 0.1%. Consumer goods prices fell by 0.7%, and service prices declined by 0.3%.
Breakdown of Major Categories:
- Food and Tobacco: Increased by 0.9% year-on-year, contributing approximately 0.26 percentage points to the CPI.
- Other Goods and Services: Rose significantly by 5.2%.
- Clothing and Healthcare: Both categories recorded year-on-year growth of 1.1%.
- Education, Culture, and Entertainment: Increased by 1.0%.
- Living Goods and Services: Fell by 0.3%.
- Housing: Declined slightly by 0.1%.
- Transportation and Communication: Dropped by 3.6%.
The November figures reflect a continued modest increase in consumer prices, largely driven by food and tobacco, alongside softer non-food inflation. However, notable monthly declines in food prices highlight ongoing volatility within the sector.
Data Source: https://www.stats.gov.cn/sj/zxfb/202412/t20241209_1957689.html
China’s Trade Surplus Expands in November Amid Strong Export Growth
In November, China’s total goods trade reached CNY 3.7506 trillion, marking a 1.2% year-on-year increase. Exports rose to CNY 2.2217 trillion, up 5.8%, while imports declined to CNY 1.5289 trillion, down 4.7%.
From January to November, the cumulative total for goods trade stood at CNY 39.7861 trillion, reflecting a 4.9% year-on-year increase. Exports totaled CNY 23.0383 trillion, up 6.7%, and imports reached CNY 16.7477 trillion, up 2.4%. The total trade value with ASEAN reached CNY 6.29 trillion, an increase of 8.6%, accounting for 15.8% of China’s total trade. The European Union was China’s second-largest trading partner, with bilateral trade totaling CNY 5.09 trillion , up 1.3%, representing 12.8% of total trade. The United States ranked as the third-largest trading partner, with trade reaching CNY 4.44 trillion, a 4.2% increase, accounting for 11.2% of total trade.
Key Trade Highlights:
General Trade: Grew 3.7%, accounting for 64.1% of the total trade volume.
Private Enterprises: Exports and imports from private firms increased by 8.7%, contributing 55.3% to the total trade, a 2.0 percentage point increase from the same period last year.
Electromechanical Products: Exports grew 8.4%, comprising 59.5% of total exports.
The robust growth in exports, particularly driven by electromechanical products and the continued dynamism of private enterprises, highlights the resilience of China’s trade sector despite external challenges.
Data Source：
NVIDIA Faces Antitrust Probe in China Amid Rising Global Scrutiny
On December 9, China’s State Administration for Market Regulation (SAMR) announced the launch of an antitrust investigation into NVIDIA Corporation, citing potential violations of the Anti-Monopoly Law of the People’s Republic of China. The investigation focuses on NVIDIA’s $6.9 billion acquisition of Mellanox in 2020, a deal seen as having significant implications for the global supercomputing and artificial intelligence sectors.
The Chinese regulator has imposed two key conditions for NVIDIA’s operations in China:
- The company is prohibited from engaging in bundled sales within the Chinese market.
- Over the next six years, NVIDIA must adhere to principles of fairness, reasonableness, and non-discrimination by ensuring the supply of graphics cards and related equipment to Chinese enterprises.
The announcement triggered a market reaction, with NVIDIA’s shares falling 2.55% on Monday, opening at $137.13 and closing at $130.00. This decline wiped out $88.9 billion in market value in a single day. NVIDIA responded to the probe, stating it is confident in its business practices and will cooperate fully with regulatory authorities.
The investigation follows a series of similar actions by France, the United States, and the European Union, reflecting broader concerns over NVIDIA’s dominant position in the GPU market. NVIDIA commands over 80% of the global GPU market and holds an overwhelming 90% share in the data center GPU sector, a critical area for AI and high-performance computing. This dominance has drawn antitrust attention worldwide, with regulators seeking to address concerns over market competition and supply-chain dependencies.
As NVIDIA faces increasing scrutiny from major economies, the outcome of China’s investigation could set a precedent for its operations in one of the world’s largest markets for advanced technology.
Fierce Competition in China’s EV Market: Jiyue Struggles Dispite Strong Shareholders
On December 11, Jiyue CEO Xia Yiping issued an internal memo acknowledging the severe financial challenges facing the company and outlining a series of drastic measures to address its crisis. These include department mergers, halting sales operations, no test drive, and reducing the workforce to a skeleton team for basic business continuity, with no guarantee of salary.
Jiyue’s financial struggles are starkly reflected in its performance. From December 2023 to November 2024, the company sold just 14,055 units of its two models, the Jiyue 01 and Jiyue 07, with monthly sales peaking below 3,000 units. This average of 1,171 units per month pales in comparison to dominant players in China’s new energy vehicle (NEV) market, where monthly sales regularly exceed 10,000 units. Meanwhile, the automotive industry’s profit margin dropped to 4.6% from January to September 2024, marking the lowest level in a decade.
Following the announcement, discontent among employees and suppliers escalated, with videos of internal meetings and protests surfacing across social media. Reports have also surfaced, though unverified, alleging that Jiyue’s CFO has fled to Singapore with critical financial records.
Jiyue’s deteriorating capital chain has further exacerbated the crisis, with suppliers reportedly facing outstanding debts amounting to billions of yuan. One supplier revealed that the company has been placed into receivership, underscoring the mounting financial pressure within China’s hyper-competitive EV market.
In response to the crisis, Jiyue’s primary stakeholders, Baidu and Geely, announced that they will step in to stabilize operations and ensure end-customer interests are safeguarded.
The situation highlights the brutal realities of China’s NEV sector, where price wars and narrowing profit margins are forcing smaller players like Jiyue to the brink. As the competition intensifies, only companies with strong financial backing and market adaptability will remain viable.
We will continue to monitor the developments within Jiyue and the broader industry landscape.
Starbucks China’s Localized Expansion Sets New Milestone with Rapid Growth in FY2024
In fiscal year 2024, Starbucks China achieved remarkable growth by adding 790 net new stores, marking a 12% year-on-year increase. The coffee giant expanded into 166 new county-level markets, nearly doubling last year’s figure and setting a historic record. Notably, half of the newly opened stores are located in lower-tier cities, underscoring Starbucks’ strategic focus on tapping into emerging markets. As of December 14, Starbucks China operates over 7,600 stores, covering 1,000 county-level cities- including and lower than tier 3 cities.
Starbucks has successfully localized its business by integrating into local communities and embracing unique cultural elements. Examples include its signature community-themed stores, such as Wukang Road in Shanghai, Baoyuanli in Wuhan, MixC Mall in Hangzhou, Nantou Ancient Town in Shenzhen, and the scenic Aranya in Qinhuangdao.
The company has also benefited from policy support, such as the 144-hour visa-free policy for foreign tourists and initiatives like the Shanghai Shopping Festival. Over the past two months, the Starbucks Reserve Roastery in Shanghai has welcomed an average of 6,000 visitors per day, including a large number of international tourists and influencers.
Starbucks China serves as a prime example of the importance of localization in achieving sustainable growth. By aligning its offerings with local culture and community needs, Starbucks has strengthened its position in China’s competitive coffee market while appealing to both domestic and international customers. However, the landscape has become increasingly challenging as domestic coffee brands like Luckin Coffee, Manner Coffee, and M Stand has grown. These emerging competitors are reshaping the market with aggressive pricing, innovative business models, and localized strategies that match Chinese consumers’ behaviors. As the coffee industry evolves, Starbucks must carefully strategize to maintain its growth momentum and brand loyalty amidst a highly competitive environment.
0 Comments