Price Trends in China’s Production Materials – Mid August 2024

The latest report from the National Bureau of Statistics of China provides a comprehensive overview of the price fluctuations in significant production materials across the country as of mid-August 2024. The data reflects a diverse range of products, highlighting both increases and decreases in market prices.

• Overall Price Movement: In mid-August, out of 50 monitored products, 12 saw price increases, while 36 experienced declines, and 2 remained stable compared to the previous period.
• Black Metals: Notable declines were observed in black metal prices: Rebar (Φ20mm, HRB400E): Decreased by 4.2% to CNY 3093.6 per ton. Ordinary Medium Plate (20mm, Q235): Fell by 6.3% to CNY 3250.3 per ton.
• Nonferrous Metals: Some products in this category experienced price increases: Electrolytic Copper (1#): Increased by 0.7% to CNY 72774.3 per ton. Aluminum Ingots (A00): Rose by 1.3% to CNY 19157.1 per ton.
• Chemical Products: The chemical sector showed mixed results: Sulfuric Acid (98%): Slight increase of 0.2% to CNY 481.8 per ton. Caustic Soda: Decreased by 1.0% to CNY 820.9 per ton.
• Energy Sector: The prices of liquefied natural gas (LNG) and wax showed minor increases, while liquefied petroleum gas (LPG) and gasoline prices experienced slight declines.
• Coal Prices: The coal market also faced downward pressure, with significant drops in the prices of various coal types, including: Coking Coal: Decreased by 6.3% to CNY 1700.0 per ton. Metallurgical Coke: Fell by 5.5% to CNY 1727.2 per ton.
• Agricultural Products: Agricultural commodities showed varied trends: Rice: Remained stable at CNY 4070.3 per ton. Cotton: Experienced a notable drop of 2.4% to CNY 14361.0 per ton.

The fluctuations in production material prices reflect ongoing adjustments in the Chinese market, influenced by factors such as supply chain dynamics, demand shifts, and broader economic conditions. Businesses operating in or with China should closely monitor these trends to adapt their strategies accordingly, ensuring they remain competitive in a changing economic landscape.

Data Source: https://www.stats.gov.cn/sj/zxfb/202408/t20240823_1956084.html

Geely Automobile’s Electrifying Leap: A New Era of Growth

Geely Automobile’s financial performance in 2024 has been nothing short of remarkable. The company reported revenue exceeding CNY 100 billion for the first time, a 46.6% increase from the previous year. Net profit surged by an extraordinary 575% to CNY 10.6 billion. This significant growth is primarily attributed to the outstanding performance of its premium brands, such as Lynk & Co and Zeekr, which have seen substantial increases in sales. For instance, Zeekr’s sales alone jumped by 136% year-on-year, underlining its importance in Geely’s portfolio.

Moreover, the overall success of Geely’s new energy vehicle (NEV) segment played a critical role, contributing significantly to the company’s profitability. The NEV sales grew by 112% in the first half of 2024, with over 670,000 units sold. This growth was not just a result of increased sales volume but also due to the higher profit margins associated with premium NEV models, particularly those under the Zeekr and Lynk & Co brands. The success of these brands has allowed Geely to capture a larger share of the rapidly expanding electric vehicle market, both domestically and internationally.

Geely’s financial health is further reinforced by strategic measures such as a 45% reduction in net debt and a significant increase in free cash flow, positioning the company for continued growth. This financial stability has enabled Geely to invest heavily in research and development, particularly in cutting-edge technologies like autonomous driving and battery innovations, which are expected to drive future growth.

Looking forward, Geely has adjusted its annual sales target to 2 million vehicles, demonstrating confidence in its growth strategy. This target reflects the company’s focus on both increasing its market share and continuing its leadership in the NEV sector. With a robust pipeline of new models and ongoing expansion into key global markets, Geely is well-positioned to sustain its upward trajectory in the competitive global automotive market.

Data Source: https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0821/2024082100186_c.pdf

Hilton to Maintain Rapid Expansion in China, Targeting 100 New Hotels Per Year

Hilton, the US-based hospitality giant, is doubling down on its growth in China, opening its 700th hotel in the country in late August. The company, which operates 671 hotels across China as of May 2024, has been adding at least 100 new hotels annually for the past five years and plans to maintain this rapid expansion pace in the coming years.The opening of the 700th property, Conrad Chongqing, marks Hilton’s debut in the city and the establishment of its West region office to further support the company’s ambitious expansion plans.

This move comes less than a year after Hilton opened its 600th hotel in Nanjing, Jiangsu province. Hilton’s growth strategy in China is driven by initiatives focused on localization, innovation, diversity, and partnership. In the first half of 2024, Hilton introduced its brands to 25 new locations, including cities like Changshu, Guilin, and Rizhao.

Confidence in China’s Hospitality Market

Hilton’s confidence in the Chinese market stems from the country’s strong economic performance and the growing demand for travel. China’s GDP rose by 5.3% in the first quarter of 2024, while the accommodation and catering sector surged by 7.3% during the same period. In the first half of 2024, the number of domestic tourists reached 2.725 billion, a y-on-y increase of 14.3%. Jenny Milos, Vice President of Brand Management, Suites and Focused Service at Hilton Asia-Pacific, stated that the company is excited about the future investment and development potential across China, driven by the continued expansion of the middle-income group, rising resident incomes, and government structural reforms.

Data Source: https://zwgk.mct.gov.cn/zfxxgkml/tjxx/202407/t20240726_954368.html

5-Minute Drone Delivery at the Great Wall

Exciting developments are taking place at the Great Wall of China, particularly in the South Nine Towers area of Badaling, which recently opened to the public. This less commercialized section of the Great Wall offers visitors a chance to experience its historical charm while enjoying activities such as hiking and photography.

Drone Delivery Service

In a remarkable innovation, visitors can now order takeout directly on the Great Wall, with delivery times slashed to just five minutes thanks to drone technology. This service is operational from 10 AM to 4 PM and offers a range of options, including steamed buns and sandwiches, perfect for those looking to satisfy their hunger during hikes. The drone delivery fee is an affordable 4 yuan (approximately 56 US cents), matching the cost of regular deliveries. Once an order is placed, a worker retrieves the food from a nearby store and transports it to a hotel rooftop. There, the package is weighed and prepared for delivery. An operator then attaches it to the drone, which flies autonomously to a designated watchtower where another worker is ready to receive it.

Environmental Responsibility

In addition to delivering food, the drones will also assist in carrying trash to recycling stations after the delivery period, highlighting a commitment to environmental responsibility in this new venture.

Economic Impact

CNN emphasizes China’s burgeoning “low-altitude economy,” showcasing the rapid development of the drone industry within the country. As the first drone delivery service in Beijing, this initiative adds to the growing trend of drone logistics across China, which is the world’s largest manufacturer and exporter of civilian consumer drones. This technology not only enhances convenience for urban dwellers but also improves logistics in rural areas, demonstrating the versatility and potential of drone applications in everyday life.

The introduction of drone delivery at the Great Wall represents a significant leap forward in both tourism and technology. It may set a precedent for similar innovations in other tourist destinations around the world.

Data Source: https://edition.cnn.com/2024/08/23/world/video/china-great-wall-drone-delivery-digvid

The Rise of Black Myth: Wukong, A New Era for Chinese Gaming

The gaming world is abuzz with excitement following the release of Black Myth: Wukong on August 20, 2024. This groundbreaking title, developed by Game Science, marks a significant milestone as China’s first true AAA game (A Triple-A game is a video game produced or developed by a major publisher with a large budget for both development and marketing.These games are often equivalent to blockbuster movies and are known for their high production values, large teams, and boundary-pushing graphics and animation). As a result, Black Myth: Wukong represents a major breakthrough for the Chinese gaming industry, capturing both domestic and international attention.

A Cultural Epic

Set against the backdrop of the classic Chinese novel Journey to the West, one of the Four Great Classical Novels of Chinese literature, Black Myth: Wukong invites players to step into the shoes of the legendary Monkey King, Sun Wukong, embarking on an epic journey to uncover the truth behind him.

Record-Breaking Launch

The game’s launch was nothing short of spectacular. Within hours of its pre-loading, Steam reported a staggering peak download bandwidth of 70 Tbps. In just three days, Black Myth: Wukong sold over 10 million copies and generated over 400 million yuan (approximately $73 million) in revenue, making it one of the top-selling game globally on Steam. On its release day, the game boasted 1.6 million concurrent players, surpassing established titles like Counter-Strike 2, Dota 2, and Elden Ring.

Cultural Impact and Global Reach

Black Myth: Wukong serves as a cultural ambassador, showcasing stunningly realistic Chinese landscapes, ancient architecture, and mythical creatures. Reports indicate that Shanxi province hosts 27 of the game’s 36 filming locations, further enriching the game’s authenticity. The game’s trailers and gameplay demos, all together, have garnered over 100 million views on Bilibili and over 10 million views on YouTube, demonstrating its widespread appeal.

Inspiring a New Generation

The game’s popularity has inspired many international players to delve into Journey to the West, with fans creating content that explores Chinese mythology. This engagement signifies a growing interest in Chinese cultural narratives, positioning Black Myth: Wukong as a potential catalyst for future titles that can resonate with global audiences.

A Shift in the Gaming Landscape

Historically, the gaming industry has been dominated by Western narratives, often drawing from European legends and historical stories. Titles like Contra, Super Mario, and Warcraft III have primarily catered to English-speaking audiences. However, Black Myth: Wukong represents a transformative shift, as it is the first Chinese game developed by a Chinese team based on a Chinese legend to achieve significant global influence.

Future Prospects

As the gaming landscape evolves, Black Myth: Wukong sets a precedent for future Chinese titles, showcasing the potential of Chinese legends as compelling narratives in the gaming realm. The success of this game not only highlights the capabilities of Chinese developers but also opens the door for a broader appreciation of Chinese cultural heritage in the global gaming industry.