This week’s China market and marketing news:
China’s Fifth Plenum: What You Need to Know: The Fifth Plenum and the finalising of China’s draft 14th Five-Year Plan wrapped up last week. There were no real surprises in the new plan which elevated China’s self-reliance in technology into a national strategic pillar, aiming to become a global leader in innovation within 15 years. Other goals also reaching to 2035 included a pledge to see the nation’s carbon emissions peaking and starting to decline in the period, while raising per capita GDP to the status of a moderately developed country. Quality, rather than the pace of growth was emphasised, with no specific GDP targets mentioned, however these may come next year with Beijing ambitious in its growth outlook. China’s military will modernize and grow. Above all, China says that it is sticking to its strategy of boosting domestic demand and opening up the economy over the next five years.
China’s Export-Import Bank Sets Up $52.2 Billion Credit Line to Support CIIE: China’s Export-Import Bank will raise a credit line supporting imports to ¥350 billion ($52.2 billion) for CIIE deals, up from last year’s ¥300 billion. ¥180 billion of this year’s quota will be allocated to imports from countries that are part of the Belt and Road Initiative. $71.13 billion worth of tentative deals were reached for one-year purchases were signed at CIIE last year. CIIE starts tomorrow, 5 November, and will run until 10 November.
Don’t Be Blind to China’s Rise in a Changing World: The world order is changing, yet many are missing this because of a persistent anti-China bias. China’s extraordinary performance isn’t new. In fact, apart from the 1839-1949 “Century of Humiliation”, it has historically been one of the world’s most powerful countries and cultures. This year nearly half the world’s initial public offerings will be in China, including Ant Financial’s $37 billion listing, the world’s biggest ever. It has a growing population of well-educated people, with around a third of the world’s science and technology university majors, three times that of the US [FT paywall]. For UK relations with China, it is not Cold War, but a Values War; not decoupling, but some divergence.
Trending in China: Are China’s Blue-Collar Wages Really Higher Than Graduate Salaries?: #BlueCollarSalariesBeatCollegeGrads? has been viewed by 39 million social media users and garnered around 2,000 comments. As factories face staff shortages, many workers now earn more than ¥10,000 ($1,500) a month, whereas the typical starting salary for a college grad is ¥4,000 ($600). Commentators spoke of Huawei offering PhD grads ¥2 million ($300,000) salaries and reminded people not to compare the end point of one group of workers with the starting point of others.
China’s Stance on Homosexuality Has Changed. Its Textbooks Haven’t: A lawsuit brought by a student is part of an effort to get schools, editors and publishers to recognize that being gay is not a mental disorder. In 2015, a student sued the Ministry of Education over textbooks that describe homosexuality as an affliction, arguing that the government was responsible for ensuring the books’ quality and should disclose its approval process; she lost two years later. In 2014, a Chinese court ordered a clinic to compensate a man who underwent electroshock therapy designed to “cure” homosexuality, saying the clinic had committed consumer fraud.
Hangzhou Bans Mandatory Facial Recognition in Residential Communities: Amid mounting public concerns over biometric data safety, the eastern Chinese city of Hangzhou has become the first in the country to prohibit the compulsory use of such technology in residential communities. Community managers are also forbidden from selling residents’ information to third parties.
Singles Day: The West Wants In: According to Edited, products first discounted during Singles Day week increased 9% in the US and 86% in the UK in 2019, including from brands and retailers as diverse as Macy’s, Asos, Furla, Uniqlo, The Modist and Opening Ceremony.
Tapping into New Growth Opportunities in China’s F&B Market: In 2019, China’s food imports reached $90.8 billion, 23.4% up on 2018. In 2018 aquatic products was the category was the highest value import category at $12.2b, and also the fastest growing at 42.9% year-on-year. Meat products were the next biggest at $11.1b, dairy products at $10.6b and fruit products at $8.0 billion. New Zealand, Australia and US were China’s three biggest sources of imported food. 71.7% of snacks bought online in 2019 were imported, 31.9% of beverages, 30.4% of cereals, 22.5% of instant food, 21.0% of canned food, 14.5% of healthcare food and 10.1% of fresh food.
China’s Dairy Boom: Yili Pegs Post-COVID-19 Health Demands and Tech as Key to Consumption Boost – Exclusive Interview: 51% of Chinese respondents say they are buying more white (regular) milk than before, 34% are buying the same as before according to GlobalData. Apart from regular milk, Chinese consumers are also showing a preference for dairy products that have immune-boosting properties or reduced sugar content post-Covid.
China’s New Cheese Rules Could Cultivate Market of Fromage Connoisseurs: The likely new national standard will mean that products that are made up of less than 50% of natural cheese can only be called ‘cheese-based products’, not cheese products. Previously food items that contained as little as 15% of cheese could be called cheese products. Few related products available in stores reveal their actual cheese content. Chinese people consume 100 grams of cheese per capita a year.
150-Year-Old Peking Duck Brand Bleeds Cash as Trends Pass It By: Quanjude’s loss came as the 156-year-old company, which operates a chain of restaurants nationwide besides selling precooked ducks, struggled to meet the needs of a new generation of eaters. Despite its history, it is not popular with old or young consumers. The lagging development of its brand, menu and services have put it in a weak position in a competitive market.
China’s Top Airline Returns to Profit as Domestic Routes Bloom: China’s largest carrier, China Southern Airlines, reported a net profit of ¥711 million ($106 million) for Q3. Revenue dropped by 40%, but cost savings that include lower fuel consumption and cheaper oil prices helped lift the bottom line. Domestic air traffic in the mainland was only 2% lower year-on-year in September, with all major state-owned airlines recording gains in domestic passengers.
Tencent-backed Esport Star Honour of Kings DAU Reaches 100 million: 100 million people a day are actively playing mobile game Honour of Kings, becoming the world’s first esport product to reach such a volume of users. The game, where an estimated 50% of players are female, has also been a merchandising success with an array of branded toy models, clothing, school stationery, FMCG and beauty products. It has also partnered with luxury brand Burberry and created a Bruce Lee-themed game skin.
Louis Vuitton Picks Wuhan in China for Global Exhibition Launch – a Sign of Confidence in World’s Biggest Luxury Market: Wuhan, where the Covid-19 coronavirus was first identified, is the first place in the world to host a new exhibition “See LV” by the world’s No.1 luxury brand. After a strict lockdown to stop the spread of the virus, Wuhan is nearly back to normal, and Chinese luxury consumers have been spending with a vengeance.