This week’s news and trends in China:
There’s More to China’s Post-Pandemic Boom than Meets the Eye, Economists Say: China is “already in another mindset compared to the rest of the world,” says Alexis Garatti, head of macroeconomics at Euler Hermes. The US and China – the two biggest economies in the world are bouncing back strongly, driving demand for resources and consumer goods, with luxury soaring in China. This has contributed to Bernard Arnault, CEO of LVMH, briefly edging out Amazon’s Jeff Bezos as the world’s richest person last week. Globally, luxury good sales are expected to return to 2019 levels this year.
Chinese Shoppers, Stuck in China, Revive Local Malls: Retail sales in China grew 34% in the first quarter, over the same quarter last year. Ground-floor shopping mall rents increased 0.2% from a year ago. Numerous shopping complexes are seeing sales above 2019 levels, particularly those with luxury stores.
Three-Child Policy: China Lifts Cap on Births in Major Policy Shift: Married Chinese couples may have up to three children, China announced on Monday. The policy change will come with “supportive measures” including lower educational costs for families, stepped up tax and housing support, guaranteeing the legal interests of working women and clamping down on “sky-high” dowries. It would also look to educate young people “on marriage and love”. 29,000 of 31,000 respondents in a Xinhua poll said they would “never think of it.”
ByteDance Rival Kuaishou Posts 37% Quarterly Sales Growth: Kuaishou’s revenue surged to $2.65 billion for the three months to March. But the company is now grappling with an influx of new rivals, from up-and-comers like Bilibili to super app WeChat. Advertising surpassed virtual gifts or tips during live-streaming videos to become Kuaishou’s biggest earnings driver last year, while GMV on its nascent online marketplace grew 300% to ¥118.6 billion ($18.6 billion). Monthly active users expanded slower to 520 million, up from the 495 million a year earlier.
Pandemic Gives Boost to Dairy Consumption: This year, the average daily dairy intake reached 260ml, versus 237mls in 2019 according to a study by the China Dairy Industry Association and Royal FrieslandCampina. 30.7% say they have increased dairy intakes since the pandemic. 11.1% increased their dairy intake types, with more people having dairy snacks and yogurt, in addition to liquid milk, milk powder and cheese. For much deeper, real-time analysis, see our Dairy Tracker.
China’s Pork Prices Fall as Consumers Tuck Into Poultry, Other Meats: Pork’s share in the total of pork, beef, mutton and poultry produced shrank from 63.3% to 53.8% between 2017 and 2020, while poultry rose from 22.5% to 30.9%.
Spotlight on snacking: Occasions and food rituals evolve amid COVID-19, says Glanbia: The top trends in Chinese snacking are “Snack Cravings,” “Crunchy Textures” and “Health-Focused,” according to Glanbia. Texture preferences are typically crunchy and crispy snacks. Healthy ingredients providing protein, vitamin, and mineral fortification will give consumers a better-for-you option that they can feel good about.
China’s Telemedicine Boom Sparks Mad Rush for Doctors: About 10% of China’s 3.86 million doctors are thought to be on telemedicine apps, and the figure is only expected to rise. China’s digital health care market grew 44% to ¥314 billion ($49.3 billion) in 2020, and could hit ¥4.2 trillion ($659 billion) by 2030.
China’s Women Reject Ad Telling Them How to Dispose of Their Pads: By including an adhesive strip for sealing pads after rolling them up and using outdated euphemisms to describe menstrual products, domestic company Sofy’s latest campaign only contributes to period shaming, women say.
In ‘Involuted’ China, Eating Disorders Are a Hidden Epidemic: Just a few decades ago, eating disorders were extremely rare in China. But in recent years, cases of anorexia, bulimia, and binge-eating disorder have skyrocketed, with health experts placing blame on China’s social “involution” — or intense social competition — and toxic beauty standards that encourage extreme weight loss.
Nation Leads Way for Overseas Travel Resumption: Destination risk levels, pandemic control policies and friendliness toward travellers from China are the top concerns for Chinese selecting a destination. 43% would be more confident about travelling overseas after being fully vaccinated; 56% said lifting quarantine would have a bigger influence on their foreign travel plans, while the same proportion said zero confirmed cases would be the key factor. Some 45% said the resumption of international flights would influence them the most.
Tencent’s Silent Pursuit of Global Gaming Domination: The world’s largest games company Tencent has a 43% share of China’s domestic games market. 21% of its games revenue comes from outside of China. It is continuing to grow organically as well as through investments and acquisitions. In 2019, it closed 10 games related deals, 31 in 2020 and already this year, it has completed 51 – one deal every 2.5 days in 2021 on average.
China Shelves Dozens of Races After Deadly Ultramarathon: At least 60 marathons and cross-country races have been cancelled or postponed in China after 21 runners died when extreme weather hit an ultramarathon in late May.
Wall Street’s New Love Affair with China: Goldman Sachs, an emblem of the globally dominant American finance industry, has unveiled a wealth partnership with the state-owned ICBC. Earlier last month, BlackRock received approval for a wealth management partnership with China Construction Bank, while JPMorgan Asset Management has announced plans to invest $415m in China Merchants Bank’s wealth unit. From Europe, Amundi and Schroders have gained approvals for majority-owned partnerships in wealth management. Goldman Sachs estimates 60% of all Chinese household assets were in property in 2020, and a further 24% were in cash and deposits. In an era that is increasingly defined by geopolitical competition and a push towards economic “decoupling”, American finance has never been closer to Chinese wealth. [paywall]