S&P Global Services PMI of China Hits 12-Month High in July

 

 

China’s services sector gathered pace in July, with the S&P Global Services PMI climbing to 52.6 from June’s 50.6—its fastest expansion in over a year and marking the 31st consecutive month in growth territory.

 

 

 

 

Surveyed firms widely reported that new business drove the mid-year acceleration, with order growth the strongest in more than a year. External demand also turned positive for the first time in three months, as increased tourism activity and more stable trade conditions pushed new export orders to their fastest growth rate since February.

 

 

The latest data also showed sales prices rising in July—an indicator of renewed confidence, as companies, for the first time in six months, were able to pass higher costs on to customers.

 

 

Overall, the services sector’s robust performance contrasted with the slowdown in manufacturing, underscoring the economy’s reliance on consumer-facing and service-oriented industries in the second half.

 

 

“Growth in the services economy accelerated as we entered the second half of the year,” said Jingyi Pan, Associate Director of Economics at S&P Global Market Intelligence. “Better demand conditions have supported the latest round of activity gains.”

 

 

Li Auto’s Crash Test Gambit Backfires, Pulling an Unwilling Rival Into the Spotlight

 

 

When Li Auto debuted its flagship i8 on July 29, it sought to make a statement — literally. A slickly produced video showed a 2.6-ton i8 slamming head-on into an 8-ton Dongfeng Liuzhou Chenglong truck. The truck’s cab separated from its cargo bed and crumpled over the i8’s windshield, while the EV’s passenger cell emerged unscathed. The visual was as arresting as it was controversial.

 

 

Dongfeng Liuzhou wasted no time firing back. On July 31, it accused Li Auto of staging “customized collision conditions” — a deliberately engineered, non-standard crash scenario — that bore little resemblance to conventional safety tests. The result, it warned, not only tarnished its brand image but also risked misleading the public and creating safety misconceptions.

 

 

The China Automotive Engineering Research Institute (CAERI), which carried out the test, confirmed on August 3 that it was indeed a non-standard, vehicle-to-vehicle experiment intended solely to validate the i8’s safety design. Crucially, it was never meant to evaluate the Chenglong truck or any other brand. That nuance, however, had been omitted from the rollout — leaving social media to fill in the blanks with suspicion and speculation.

 

 

The fallout was swift. Netizens questioned Li Auto’s motives for singling out a Chenglong truck, while Dongfeng Liuzhou found itself an unwilling co-star in a PR drama, facing questions from drivers and long-time customers. In the end, the reputational bruising was mutual.

 

 

By August 6, the three parties — Li Auto, CAERI, and Dongfeng Liuzhou — closed ranks with a rare joint statement, calling on China’s auto industry to practice strict self-discipline, uphold transparency in R&D and testing, and steer clear of marketing that strays into disparagement.

 

 

 

 

Freshhippo’s Costco Fantasy Meets a Cold Reality

 

 

On August 31, Shanghai’s last Freshhippo X Membership Store will close for good—discreetly ending what was once pitched as the company’s “second growth curve” and audacious attempt to challenge Costco and Sam‘s Club.

 

 

Launched in 2020 with the curious ambition to blend Sam’s Club-style exclusivity with bargain-bin pricing, Freshhippo somehow succeeded in pleasing neither side. Affluent shoppers found little worth paying extra for, while bargain hunters found little worth leaving the couch for. The rollout began with fanfare—Shanghai’s first X store, a swift leap into Beijing in mid-2021, and a breakneck opening spree of four more locations in just over a month between December 2021 and January 2022. By October 2023, the brand had 10 stores across four cities.

 

 

 

 

But the math was merciless. High rents, high overheads, and low repeat visits turned the concept into a slow bleed. The most symbolic casualty? The Jianguo Road store in Beijing—prime real estate, stratospheric rent, lackluster sales—dead in a six-month flat.

 

 

Meanwhile, the fresh grocery battleground only grew more vicious. Meituan, JD.com, and Dingdong ramped up instant retail and fresh delivery, leaving Freshhippo wedged between cash-rich competitors and its own muddled strategy.

 

 

Now the retailer is beating a tactical retreat to two “more focused” formats: Fresh Life, a large-store concept marrying fresh produce with online-offline integration, and NB Neighborhood, small community outlets hawking discounted essentials.

 

 

BMW to Recall Over 230,000 Vehicles in China Over Safety Risks

 

 

BMW (China) Automotive Trading Ltd and BMW Brilliance Automotive Ltd will recall more than 230,000 imported and domestically produced vehicles in China, the State Administration for Market Regulation (SAMR) announced on August 8.

 

 

 

 

The recall targets defective monitoring mechanisms for insulation failures, which, under certain conditions, could mistakenly shut down high-voltage systems. This could lead to sudden power loss in electric drive units, raising the risk of collisions.

 

 

In addition, affected vehicles are equipped with starter generators containing improperly manufactured power connectors. These defects can cause loose connections between the generator’s positive terminal and the 48V harness, increasing electrical resistance. In extreme cases, this could result in engine stalling during operation or even fires due to overheating in the engine compartment.

 

 

BMW has submitted recall plans to SAMR in compliance with regulations. Authorized dealers will provide free inspections of starter generators and related cables, replacing or repairing components as needed to remove safety hazards.

 

 

This recall expands on an earlier action announced on May 9, 2025, covering certain imported and domestic BMW models.

 

 

China’s First Nationwide Childcare Subsidy Arrives — and So Do the Price Hikes

 

 

On August 1, 2025, Beijing unveiled a landmark policy: the country’s first nationwide childcare subsidy. Families with children under the age of three will now receive 3,600 yuan (US$501) annually per child — no paperwork hurdles, no income thresholds. Policymakers hope the measure will soften China’s demographic decline, especially in lower-income regions where the payout looms larger in household budgets.

 

 

In Gansu, for instance, the sum represents over 13.5% of average annual income; in Shanghai, just 4.1%. Economists expect it to boost spending in smaller cities and perhaps, over time, lift birth rates.

 

 

Yet, in a twist that parents might call “too on the nose,” the subsidy’s debut has coincided with sharp jumps in baby product prices. One infant formula brand climbed from 191 yuan per can on July 17 to 269 yuan on August 1 — almost exactly when the subsidy took effect — a 40% surge. A popular diaper brand rose from 257 yuan to 318 yuan per pack, up 61 yuan in a week.

 

 

The timing may be pure coincidence. But to many parents, it feels like their subsidy has already been… pre-spent.