China’s Real Estate Market Sees Decline in First Seven Months of 2024

The National Bureau of Statistics of China has released the key figures for the real estate market in the first seven months of 2024. The data shows a significant decline across various indicators compared to the same period last year.

Investment and Construction

• Real estate investment reached CNY 6,087.7 billion, down 10.2% y-on-y. Residential investment was CNY 4,623 billion, decreasing by 10.6%.

• Floor space under construction was 70,328.6 million square meters, down 12.1%. Residential floor space under construction was 49,153.2 million square meters, decreasing by 12.7%.
• The new construction area was 4,373.3 million square meters, down 23.2%. The residential new construction area was 3,168.4 million square meters, decreasing by 23.7%.
• Completed floor space was 3,001.7 million square meters, down 21.8%. Residential completed floor space was 2,186.7 million square meters, decreasing by 21.8%.

Sales and Inventory

• Sales of commercial residential buildings reached 5,414.9 million square meters, down 18.6% y-on-y. Sales of residential buildings decreased by 21.1%.
• Sales of commercial residential buildings amounted to CNY5,333 billion, down 24.3%. Sales of residential buildings decreased by 25.9%.
• Inventory of commercial residential buildings reached 7,392.6 million square meters at the end of July, up 14.5% y-on-y. Inventory of residential buildings increased by 22.5%.

Financing

• Funds raised by real estate developers reached CNY 6,190.1 billion, down 21.3% y-on-y. Domestic loans decreased by 6.3%, foreign investment decreased by 45%, and personal mortgage loans decreased by 37.3%.

Real Estate Climate Index

• The Real Estate Climate Index stood at 92.22 in July.

The data clearly shows a significant downturn in China’s real estate market, with declines in investment, construction, sales, and financing. The Real Estate Climate Index also indicates a less favorable market environment compared to the previous year. Developers and investors should closely monitor the situation and adjust their strategies accordingly.

Data Source: https://www.stats.gov.cn/sj/zxfb/202408/t20240815_1955982.html

Surge in Global Interest for BRICS PAY Payment

Recent reports indicate that 159 countries are ready to adopt this innovative payment platform, signaling a major shift towards de-dollarization and enhanced trade among emerging economies.

Key Highlights

1. Widespread Adoption: According to Elvira Nabiullina, the Governor of Russia’s Central Bank, a remarkable 159 countries have expressed their interest in adopting the BRICS payment system upon its launch. This interest reflects a growing trend among nations seeking alternatives to the SWIFT system.
2. Launch Timeline: The BRICS payment system is expected to go live in October 2024, coinciding with the upcoming BRICS summit in Kazan, Russia. This timing is critical as it aligns with the bloc’s efforts to facilitate trade and economic cooperation among member states.
3. Strategic Importance: The BRICS PAY system aims to allow transactions in local currencies, reducing reliance on the US dollar and minimizing transaction costs. This initiative is central to the BRICS alliance’s broader strategy of enhancing economic sovereignty and fostering bilateral trade relationships.
4. Technological Advancements: The payment platform will utilize advanced technologies, including blockchain, to ensure security and efficiency in transactions. This innovative approach is designed to provide a seamless experience for businesses and consumers alike.
5. Global Impact: The potential adoption of BRICS PAY by 159 countries could significantly alter the dynamics of international trade. It presents an opportunity for member nations to engage in economic exchanges without the constraints of traditional financial systems.

As the BRICS alliance continues to push for a more inclusive and equitable financial system, the BRICS PAY initiative stands out as a pivotal development. The anticipated launch in October 2024 is set to attract considerable attention. But could this alliance reshape how countries conduct trade globally? Let’s keep the attention on this project.

Data Source: https://dinarrecaps.com/our-blog/159-countries-set-to-adopt-brics-new-payment-system

Airlines Suspend Flights to China Amid Ongoing Challenges

Several foreign airlines have recently announced the suspension of flights to major Chinese cities, including Beijing and Shanghai. This trend, which began in May 2024, includes significant players such as British Airways, which will halt its London to Beijing route starting October 26, 2024, for at least one year. Other airlines from Australia and Brunei have also ceased operations, while carriers from Germany and France are considering similar actions.

U.S. Airlines Delay Resumption of Flights

The three largest U.S. airlines—American Airlines, Delta Air Lines, and United Airlines—have reached alignment with the U.S. Department of Transportation (DOT) to delay the resumption of nearly 100 weekly flights to China until at least late October 2024. This decision is attributed to ongoing low demand for flights and complex geopolitical factors affecting the U.S.-China aviation market. The airlines had previously requested this extension, citing that demand for flights remains depressed and that many pre-pandemic frequencies are still unoperated.

• Current Operations: As of March 2024, the total number of seats available between the U.S. and China is approximately 181,000, down 79% from 846,000 seats in March 2019. Delta currently operates flights to Shanghai from Seattle and Detroit, American flies to Shanghai from Dallas-Fort Worth, and United connects to both Shanghai and Beijing from San Francisco.

Increase in Weekly Flights Authorized

Despite the suspensions and delays, the U.S. government has recently increased the number of weekly flights that Chinese airlines can operate to the U.S. from 35 to 50, effective March 31, 2024. This increase marks a gradual return towards pre-pandemic levels, where over 150 flights were common. Major airlines like Air China and China Southern Airlines are taking advantage of the new slots, with Air China now offering 14 round-trip flights per week and China Southern Airlines providing 10.

• Flight Capacity Trends: The number of flights between China and the U.S. has increased to 100 weekly from 70 prior to the March adjustment. However, this is still significantly lower than the pre-pandemic capacity. Chinese airlines have fully utilized their 50 flight slots, while U.S. airlines have confirmed 39 of their available slots.

Broader Market Implications

The ongoing restrictions and flight reductions have led to a notable shift in international travel patterns. While the U.S.-China market remains constrained, other international markets involving China, such as those with Southeast Asia and Europe, are experiencing a resurgence. For example, capacity between China and Vietnam has returned to pre-pandemic levels, and flights to Japan and South Korea are also recovering rapidly.

• Economic Impact: The U.S. Secretary of Commerce has estimated that a return to 2019 tourism levels from China could inject approximately $30 billion into the U.S. economy and create around 50,000 jobs. However, the current state of U.S.-China aviation relations, characterized by limited flight capacity and ongoing geopolitical tensions, poses challenges to achieving these economic benefits.

The landscape of U.S.-China airline operations is marked by a combination of flight suspensions, delayed resumption of services, and a gradual increase in authorized flights. As airlines navigate these complexities, stakeholders in the aviation industry must remain vigilant to adapt to the evolving market dynamics and seize opportunities for growth in other international routes.

Colin Huang, Founder of Pinduoduo, Becomes China’s Richest Person

On August 20, 2024, Colin Huang, the founder of Pinduoduo, has officially become China’s richest person, with a personal fortune exceeding $60 billion. Huang’s wealth surge is primarily attributed to the explosive growth of the e-commerce platform he created, which has reshaped China’s online shopping landscape.

Revolutionizing E-commerce with Pinduoduo

Founded in 2015, Pinduoduo quickly rose to prominence with its unique social commerce model. The platform encouraged users to team up and purchase products at discounted prices, a strategy that resonated particularly well with consumers in lower-income regions across China. Pinduoduo’s gamified shopping experience and interactive features rapidly attracted millions of users, positioning the platform as a formidable competitor to industry giants like Alibaba and JD.com.

Overcoming Challenges and Cementing Market Position

Pinduoduo’s rapid ascent was not without obstacles. The platform faced significant criticism over counterfeit goods, a common challenge in the early stages of Chinese e-commerce. In response, Huang invested heavily in supply chain management and quality control, improving Pinduoduo’s market reputation. Strategic partnerships in logistics also played a crucial role, ensuring reliable delivery services that helped maintain user trust.

Accumulating Wealth and Securing Market Dominance

In 2018, Pinduoduo’s successful IPO on NASDAQ saw its market capitalization soar past $100 billion. Huang’s sharp business acumen and deep understanding of the Chinese market led him to the top of China’s wealth rankings in 2020, a position he has maintained ever since. His wealth reflects both the immense potential of Pinduoduo and his ability to navigate and capitalize on China’s evolving consumer landscape.

Looking Ahead: From Entrepreneur to Philanthropist

Though Huang has stepped back from the day-to-day operations of Pinduoduo, his impact on China’s e-commerce industry remains significant. Today, Huang focuses on philanthropy and investments in emerging technologies, aiming to drive future innovation. His journey from tech entrepreneur to China’s richest person serves as an inspiration to a new generation of business leaders.

Data Source: https://finance.yahoo.com/quote/PDD/

The Xiaomi SU7 vs. Zeekr 007 Collision Test Controversy

Recently, a collision test between the Xiaomi SU7 and the Zeekr 007 has sparked widespread discussion and debate.

Head-on Collision: The Test and Its Findings

In a bold move, automotive blogger Gao Ruoxiang conducted a frontal collision test at 60 km/h with a 90% overlap between the Xiaomi SU7 and the Zeekr 007. The aftermath of the test revealed contrasting outcomes:

– The Zeekr 007: Despite the impact, the vehicle maintained functionality, with operable windows and doors, and even triggered an automatic alarm service.

– The Xiaomi SU7: The vehicle experienced power loss, rendering the doors inoperable.

Analysis and Controversy

Gao Ruoxiang attributed Xiaomi SU7’s issues to the detachment of the small battery’s positive terminal, which led to a power loss. He criticized the design choice of placing the small battery in the front right of the vehicle, suggesting inexperience on Xiaomi’s part.

But based on the record, before the test, the battery in Xiaomi SU7 had been removed. This was probably the main cause of the collision result. Data from the National Economic Vehicle Surveillance and Management Center (EVSMC) platform indicates that the vehicle’s data was offline for an extended period before the collision, suggesting that the 12-volt battery had been disconnected for a long time. Subsequently, the 12-volt battery was reconnected. At the time of the collision, the national monitoring platform data was missing, and the 12-volt battery was in a disconnection state.

Xiaomi’s Response: A Defense and a Call for Professionalism

Xiaomi Motors responded with a statement questioning the rigor, completeness, and scientific nature of the test. They emphasized that the Xiaomi SU7 underwent stringent collision tests during development, revealing no safety concerns. Xiaomi urged that vehicle impact tests should be conducted by professional organizations.

Apologies and Clarifications

Following the backlash, Gao Ruoxiang issued an apology, acknowledging the inaccuracy of his initial claim about the battery’s positive terminal. He also clarified that the video contained no commercial elements and was not influenced by any company.

Public and Expert Scrutiny

The incident has been met with skepticism from both the public and automotive experts. Criticisms include inconsistencies in the depiction of the Xiaomi SU7’s battery condition and the test conditions themselves, such as not removing the battery or using a tow device.

Zeekr’s Stand: Denouncing Unfair Practices

Zeekr Motors responded by dissociating themselves from any collaboration on this test. They condemned any misinformation and reserved the right to pursue legal action. Zeekr expressed their disagreement with and non-participation in any marketing tactics that discredit competitors.

Final Thoughts

As the debate continues, one thing is clear: the integrity and transparency of automotive safety tests are paramount.

Data Source: https://www.thepaper.cn/newsDetail_forward_28422471