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News from China

ASEAN summit kicks off, highlights post-COVID-19 recovery

12th November 2020

The Association of Southeast Asian Nations on Thursday opened its 37th summit under the chairmanship of Vietnam via video conference, with focus on recovery from COVID-19 and the role of the bloc in the post-pandemic world.

Speaking at the opening ceremony, General Secretary of the Communist Party of Vietnam Central Committee and Vietnamese President Nguyen Phu Trong noted that in 2020 all ASEAN countries showed their courage and determination with efforts to overcome challenges and difficulties.

The cohesiveness and responsiveness of ASEAN have been shown strongly in COVID-19 prevention and control and the efforts to recover from the epidemic, he said.

Trong emphasized that in the new context, regional dialogue and cooperation frameworks with ASEAN playing a central role need to be well promoted.

Vietnamese Prime Minister Nguyen Xuan Phuc also delivered a speech at the ceremony, announcing that ASEAN will officially finalize the negotiations for the Regional Comprehensive Economic Partnership and sign the deal at the upcoming RCEP summit, which would affirm strong determination on free trade and ASEAN's ties with partners.

He suggested that ASEAN should focus resources and efforts at the highest level on gradually reducing the risk of COVID-19, making vaccines and effective treatment methods available soon, and promoting measures to support businesses in resuming production and activities to ensure employment and livelihoods for local people.

Within the framework of the summit, the bloc will approve the ASEAN Comprehensive Recovery Framework and its implementation plan, Phuc said, noting that the recovery of trade exchange in the region is underway and the bloc may consider resuming travel routes for ASEAN citizens.

Comprising over 20 high-level events, the 37th ASEAN summit and related summits are scheduled for November 12-15.

Established in 1967, ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Vietnam is the ASEAN chair for 2020.

Source: Shanghai Daily, November 12, 2020

Singles Day sales expected to be the best yet

11th November 2020

Alibaba’s Singles Day shopping event has raked in 372.3 billion yuan (US$56.5 billion) in sales, the e-commerce giant said 30 minutes after its annual shopping frenzy kicked off.

Thanks to a prolonged sales period this year, consumers have already grabbed discounts on daily necessities, gifts and home decoration items since the beginning of the month.

Jennifer Ye, PwC’s Chinese mainland consumer markets leader, expects the shopping festival to become a barometer of China's economic recovery.

Top digital sites have already had good results in the run-up period that started in early November.

Total sales of Alibaba’s two top livestreamers reached over 9.1 billion yuan (US$1.38 billion) in just two days of pre-sales.

JD's sales, which started on November 1, also bore fruitful results.

Sales of daily groceries and premium home appliances and fresh food increased seven times and 10 times in the first few minutes.

"I've kept a close eye on JD's coupons for children’s illustration books and I managed to make full use of the 400 yuan discount to buy gifts for my cousins," said Miriam Yuan, a college teaching assistant in Shanghai.

Daniel Zhang, Alibaba Group chairman and CEO, said two separate shopping windows would allow merchants to benefit from more exposure and selling opportunities.

China's total retail sales returned to growth in the third quarter and online retail sales posted a 9.7 percent gain.

The two categories with the highest likely spending increases on Singles Day are consumer electronics products and health and wellness products, according to a study by Bain & Co.

As e-tailers move to lower tier cities to acquire new customers and growth opportunities, they may face challenges as the cost of serving and attracting users keeps rising.

Jonathan Cheng, a Bain partner and China retail practice leader, suggests a customized product assortment with a more cost-efficient supply chain to make the most of their investment in the biggest sales event.

COVID-19 is having little impact on the shopping frenzy, according to consultancy firm Oliver Wyman.

According to its survey of 1,000 domestic respondents, 48 percent plan to increase their spending. Among this group, more than half said it is driven by more discounts and better choices, while 39 percent said they simply have more money to spend after COVID-19 outbreak.

“While we look forward to another record sales year, 14 percent of consumers feel that COVID-19 has brought too much uncertainty to take advantage of crazy deals," said Jacques Penhirin, a partner at Oliver Wyman.

He expects imported brands to lose momentum, despite their strong attraction in the beauty sector.

As many as 55 percent of respondents intend to buy from rising social e-commerce platforms such as Pinduoduo, Red and WeChat Mini stores.

This year, Singles Day goes beyond online shopping for physical products.

Offline stores and even wet markets see this as a crucial moment to appeal to online shoppers who not only order food takeaway from online sites, but also fresh food and groceries.

Gaolaojiu, a Sichuan style hotpot chain restaurant, is offering coupons on Alibaba's lifestyle services unit Koubei to expand its influence beyond its regular customers.

Zhou Gang, the caterer’s Shanghai regional manager, said Singles Day is widely recognized as a promotion season for not only physical goods but for caterers and offline services, and those who are not familiar with the hotpot chain can also leverage the discounts.

Source: Shanghai Daily, November 11, 2020

China's inflation eases to 0.5% in October

10th November 2020

China's consumer inflation eased for a third straight month in October as food prices tumbled, official data showed on Tuesday.

Consumer price index, a main gauge of inflation, rose 0.5 percent year on year last month, narrowing from the 1.7-percent rise in September, according to data from the National Bureau of Statistics .

On a monthly basis, consumer prices dropped 0.3 percent. Food prices, which account for nearly one-third of China's CPI, went down 1.8 percent last month.

Dong Lijuan, a senior statistician with the NBS, attributed the tamed inflation to the drop in food prices, especially eggs, vegetables and pork.

In breakdown, pork prices fell 7 percent last month, a further decline of 5.4 percentage points than September, as hog production capacity continues bouncing back, and pork supply keeps improving. Prices of eggs and vegetables dropped 2.3 percent and 2.1 percent respectively from September amid abundant supply.

Dong said that the high base of comparison in the same period last year, waning carry-over effect and the falling pork prices have led to the further decline in year-on-year CPI growth.

Tuesday's data also showed China's producer price index, which measures costs for goods at the factory gate, fell 2.1 percent year on year in October.

Source: Shanghai Daily, November 10,2020

Overseas firms approve of new 'dual circulation'

9th November 2020

China’s “dual circulation” development pattern is not about having its doors-closed, but rather opening up vast opportunities in the domestic as well as global markets, according to foreign firms attending the third China International Import Expo.

Saw Choon Seong, China president of Air Products, a US-based industrial gases manufacturer, said he is very excited about the “dual circulation” development pattern, where domestic and foreign markets can boost each other, with the domestic market as the mainstay.

“The ‘dual-circulation’ pattern will allow our company to introduce world-leading technologies, equipment and solutions to China, and at the same time bring proven domestic technologies to other markets,” Saw said.

Though a first-time exhibitor at the CIIE, Air Products has been in the Chinese market for more than 30 years, during which it has built up broad capabilities, including technology, engineering, manufacturing and gasifiction experience, and applied them to projects worldwide. The firm has already reaped several handsome cooperation agreements in the first two days of the expo.

Willie Tan, CEO of Skechers China, Korea and Southeast Asia, expressed similar excitement. “I believe that this new strategy will push local consumption greatly and bring about the fast growth of China’s economy.”

The new pattern will also enhance China’s relationship with those international companies and further help the development of China’s opening-up policy, Tan said.

“The success of this year’s CIIE is one of the best ways to implement this ‘dual circulation’ pattern,” he said, noting that to win the Chinese market, the US sportswear company has launched several new products at the expo.

According to Thomas Wevelsiep, chief financial officer of German chipmaker Infineon Technologies China, the expo serves as a great opportunity to demonstrate technologies and reach out to more potential customers.

“Both internal and external circulation translates into greater demand and more opportunities,” Wevelsiep said.

Infineon announced that it will expand its insulated gate bipolar transistor assembly line in Wuxi, east China’s Jiangsu Province, making it into one of the company’s largest IGBT assembly sites.

“For years, Infineon has benefited from China’s business-friendly market environment, and we observe the further development of the Chinese market with great optimism,” said Wevelsiep.

Source: Shanghai Daily, November 9, 2020

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