Weblog with daily updates of the news on a frugal, fair and beautiful China, from the perspective of internet entrepreneur, new media advisor and president of the China Speakers Bureau Fons Tuinstra
Tesla is losing its China market in the competition with its Chinese competitor. It might lose the rest of the world unless foreign protectionism saves the American car, says Shanghai-based business analyst Shaun Rein at CNBC. Nobody can beat China when it comes to price wars, he adds, and Chinese manufacturers will dominate the market in five to ten years, he adds.
Days are gone when Chinese consumers carried large plastic bags of cash to pay for houses, cars, international trips, and other big-ticket purchases. Credit cards are big among especially younger consumers, says Shanghai-based business analyst Shaun Rein at the WSJ.
After a lackluster start of 2024, consumer expert Ben Cavender sees a modest improvement in consumer sentiment in China, he tells Reuters. He said some companies were thinking about how to grow their business in China again after years of holding off on investing, which was helping sentiment to improve.
Reuters:
Other analysts said the spending data could be a turning point, as consumption in China has struggled to recover since the lifting of COVID curbs, weighed down by a property market downturn, high youth unemployment and concerns over job security amid an economic slowdown.
“Our sense is that there is a small but growing sentiment within white collar jobs that the market situation is improving and this is also leading to greater willingness to spend,” said Ben Cavender, managing director at Shanghai-based China Market Research Group.
He said some companies were thinking about how to grow their business in China again after years of holding off on investing, which was helping sentiment to improve.
In February, average spending per trip during the Lunar New Year holiday, one of the biggest holidays, fell 9.5% versus 2019 according to Reuters calculations based off government data, prompting analysts to say that “consumption downgrading” was still happening.
The USA is dealing with huge problems and cannot afford to challenge China directly, but decided to stabilize the relations between both countries, says Shanghai-based business analyst Shaun Rein to CNBC-TV18. But the USA is for sure keeping economic pressure going, he adds.
Political analyst Victor Shih breaks down the relations between China, the US, and the rest of the world in a discussion from the Chevron Auditorium in the I-House on “China-US Futures: Pathways to Peaceful Coexistence”. Key takeaways: many problems perceived by American politicians with China are not as bad as they try to let us believe.
China’s economy is facing rough weather, but while the luxury market has its problems, some segments are doing better than ever, says Rupert Hoogewerf, Hurun Report Chairman and Chief Researcher at the Hurun Report. And more important, the happiness of China’s high net worth individuals is increasing he adds at the 20th anniversary of the Hurun Best of the Best Awards.
Rupert Hoogewerf:
“This year marks the 20th anniversary of the Hurun Best of the Best Awards, our 20th year of tracking the brand choices and lifestyle changes of China’s luxury consumers.”
“Although the size of the luxury car market, defined as cars costing over CNY500,000, has continued to shrink, the size of other premium industries has basically increased, especially the likes of luxury travel and traditional luxury, bringing the overall size of China’s premium market up 3% to CNY1.7tn. In China, this is one of the rare trillion-Yuan industries, others including elderly care, automobiles, real estate, etc… China’s luxury consumers are now undoubtedly the world’s biggest spenders when it comes to luxury in the world.”
“With the global economy facing many uncertainties, the Hurun Economic Confidence Index of China’s high net worth individuals has declined for the second year, but is still at a high level compared with the past. This year, the Hurun Happiness Index is at its highest level for a decade, especially for Generation X and in terms of family life.”
“In the coming year, China’s HNWIs surveyed plan to increase their investments in gold, funds and bank deposits, and decrease their investments in real estate, both for residential and commercial, and art.”
“Gifting continues to be on the rise again, with Chinese HNWI males preferring to gift watches, baijiu and electronic products.”
“The priorities of China’s HNWIs have changed dramatically. ‘Health’ becomes the most important thing. High net worth individuals also increased their enthusiasm for exercise by 20%. The UHNWIs demand nutritionists and family doctors more than investment advisers.”
Hong Kong-based marketing guru Ashley Dudarenok discusses the way China’s market is different from the rest of the world in terms of platform, consumer behavior, and other elements of the crowded and fast-moving market. A debate on Vistatalks with Maria Coa.
Journalist and author Ian Johnson discusses his latest book, Sparks: China’s Underground Historians and their Battle for the Future, at the Hoover Institution at Stanford University, on why and how he came to write his book. Questions are asked by Orville Schell is the Arthur Ross Director of the Center on U.S.-China Relations at Asia Society in New York and Glenn Tiffert a distinguished research fellow at the Hoover Institution and a historian of modern China.
Temu, owned by Pinduoduo, is one of the leaders in online retail that has been ruffling international competitors in the past year. Business analyst Shaun Rein looks for the BBC at the firm’s international expansion. “They’re proud that Chinese companies can slay the e-commerce dragons from the United States like Amazon,” he adds.
BBC:
Temu is owned by Chinese giant Pinduoduo – “a monster in Chinese e-commerce,” according to Shaun Rein, founder of the China Market Research Group.
“Throughout China, everyone buys products on Pinduoduo, from speakers to t-shirts or socks,” he says.
The company consistently trades places with rival Alibaba for the top spot of most valuable Chinese firm listed on a US stock exchange. Its current worth sits at just under $150bn (£117bn).
With the Chinese consumer market under its spell, Pinduoduo expanded overseas with Temu, using the same model that had ensured its previous success. According to Mr Rein, who is based in Shanghai, the firm has become a great source of pride and patriotism.
“They’re proud that Chinese companies can slay the e-commerce dragons from the United States like Amazon,” he adds.
A quick scroll through the Temu app or website will bring up anything from steel-toecap trainers to a device designed to help the elderly and pregnant women put on socks. A menagerie of manufactured goods, almost entirely produced in factories in China, Mr Rein explains.
US lawmakers have started debate on a law that would ban the successful TikTok app. Political analyst Kaiser Kuo dismisses the effort as misguided at best, he writes in the ChinaFile. “In a sense, the threat of TikTok is real: In this crisis of confidence, and in a state of moral panic that we’ll look back on red-faced a decade out, TikTok is causing us to inflict grievous self-harm.”
Kaiser Kuo:
The bill that got through Congress on Wednesday to effectively ban TikTok—let’s not pretend either that this bill isn’t specifically about TikTok, or that a forced divestiture isn’t tantamount to a ban—is the latest example of a classic pattern of American behavior: In a panicked attempt to preserve the American way of life, we undermine that very way of life. This time, we seem to be falling over one another to sacrifice our openness, a cornerstone of American strength, out of exaggerated fear that a social media app owned by a Chinese company could be our undoing. As usual, this whole episode says much more about us than it does about China. We have a terrible track record of making bad decisions while in the throes of a moral panic, from Prohibition to the Patriot Act. A closer analogy can be found in the Trump administration’s moves to restrict Chinese STEM students and researchers from coming and working in the U.S., and the subsequent China Initiative. Out of a fear that Chinese industrial espionage would confer an advantage on Beijing, we somehow decided that we were better off if all that prodigious Chinese STEM talent went back to China or just stayed there.
If we accept that we ought to take preemptive action against threats to national security, even if they are only latent and potential, any actions should address those potential threats in good faith. In this case, the threats are data harvested by social media falling into the hands of the Chinese, and social media being used by China to advance a hostile agenda. The bill now making its way to the Senate does not address either of these threats. Instead, it takes aim only at one relatively minor potential vector. Not only is the preponderance of valuable data on TikTok out in the open—the content itself, not the metadata—and would be there just the same irrespective of who owned the company, but Beijing can easily either buy valuable data from brokers, vacuum it up from other social media properties, or just acquire it the old fashioned way, through hacking.
That the motive behind this bill is not, in fact, data security is driven home by the refusal of legislators to accept ByteDance’s own proposal, Project Texas, which was devised in consultation with the Austin-based tech company Oracle and The Committee on Foreign Investment in the United States (CFIUS) and would see data localized and housed entirely on servers controlled by Oracle with oversight entirely by U.S. citizens vetted and approved by Oracle. Project Texas would make TikTok the most locked-down, secure social media property in the U.S., if not in the world. The notion that even under that plan, Beijing would still decide to squeeze ByteDance just to acquire data it could obtain far more easily, and in ways that wouldn’t seriously imperil the only Chinese social media company to have enjoyed any global success, is just risible.
And influence? If TikTok is a potent vector for Chinese propagandists, one has to ask: How’s that working out for you, Beijing? Across its years of popularity, American attitudes toward China have plummeted, not improved. If we’re looking for causation, it is clear enough that, if anything, it’s our low national opinion of China driving D.C.’s animus toward TikTok. In a sense, the threat of TikTok is real: In this crisis of confidence, and in a state of moral panic that we’ll look back on red-faced a decade out, TikTok is causing us to inflict grievous self-harm.
AI is going to change our lives in the next five to ten years, says AI expert Alvin Wang Graylin, co-author of the new book Our Next Reality, in an interview at MRTV. “Nothing will be the same anymore! In this 90-minute in-depth discussion Alvin Wang Graylin gives us fascinating insights on how the AI-powered Metaverse will change all our lives and what we can do to make it an overall positive outcome for our society,” MRTV writes.
AI is going to have a major beneficial effect on extended reality (XR), like augmented reality (AR), virtual reality (VR) and mixed reality (MR), says Alvin Wang Graylin, China President and Global VP of Corporate Development at HTC at Golf Business. “Motion tracking, hand tracking, voice interactions, spatial scanning, and procedural world generation would all not be possible without AI,” adds Graylin.
Gulf Business:
When combined with extended reality (XR) technologies such as augmented reality (AR), virtual reality (VR) and mixed reality (MR), AI opens a world of creative possibilities but raises new issues related to privacy, manipulation, and safety.
“AI will solve the biggest issue the XR space faces by democratising content creation and bringing its cost to near zero,” said Alvin Wang Graylin, China President and Global VP of Corporate Development at HTC – who will be speaking at DeepFest 2024.
“And immersive technologies will enable unlimited virtual worlds to give an outlet for the energy and renewed purpose to the billions of displaced workers that AI will create in the coming decade due to its massive gains in productivity.”
The promise of XR is fueling predictions for an array of once-unthinkable possibilities within the fast-emerging metaverse. “By 2030 people could be spending more time in the metaverse than in the real world,” KPMG said in a report while projecting that people will be applying for jobs, earning a living, meeting with friends and shopping using the virtual capabilities of the metaverse…
A study by PwC revealed that the use of AR and VR for soft skills training was four times faster than in a traditional classroom setting.
Together with AI, XR will deliver physical interactions dynamically and in real-time. The innovative technology will achieve this by overlaying digital elements in the real-world environment, enabling businesses to deliver contextually pertinent just-in-time data, support, and information to people who are navigating complex experiences.
“AI-related technologies have been a major part of almost all aspects of enabling immersive computing to be possible. Motion tracking, hand tracking, voice interactions, spatial scanning, and procedural world generation would all not be possible without AI,” said Graylin.
From enhancing productivity to transforming customer experiences, XR presents an array of benefits for businesses looking to gain a competitive edge in the market. Companies can use the technology to virtually design and test new products and experiences much faster and at a fraction of the cost and to deliver immersive and personalised entertainment experiences that can’t be replicated in the real world.
China’s consumers are still nervous, the economy is weak, but looking good in the longer run, says Shanghai-based business analyst Shaun Rein at CNBC. Consumers are trading down now, but both real estate and infrastructure are not helping the economy, he adds. In the next decade, China’s middle class will grow from 400 to 800 million. Rein saw many of his clients move temporarily to Japan but is sure they will return to China.
About 90 percent of the China expats have left, estimates China lawyer Mark Schaub in his latest China Chitchat. And while new people are slowly coming back, those who left are struggling to sell their business, he says. What are the challenges they are facing, Schaub summarizes in the first part.
Mark Schaub:
Much more challenging is selling a business in which you have invested your lifeblood and passion for a long time. There is a combination of guilt (selling and leaving the employees behind) and fear (will those employees, the buyer, bank, authorities screw me over on the way out).
No entrepreneur I have met so far seems happy about the prospect – compounding this is that most are not so young (sorry guys – if I know you and you fall in this category and you are reading this then rest assured I did not mean you – I consider you to be very young) so this sale also impacts their future financial security.
The seller really needs to think in detail about what they want and weigh up differences but also think about how things will turn out for your specific business (i.e. special challenges or leverage or weaknesses you may have).
The common challenges with such sales are 1) certainty of obtaining purchase price overseas; 2) dealing with potential Chinese buyers and selecting the right one; 3) dealing with the transition (i.e. period in which you remain a minority shareholder and still be employed by the target); and 4) securing that the second sale (i.e. the minority shareholding) is secured in respect of timing, certainty and value.
Another challenge is to run the project quickly and smoothly. For almost all entrepreneurs selling a company in China is a new experience. It is common and sensible to be apprehensive and cautious, but a slow process is not in your interest as the seller.
Accordingly, to optimize the process you need to: 1) have a clear strategy, 2) understand what is possible, 3) have game played in your head all possible scenarios, 4) have a trusted group of advisors, 5) everyone is well briefed about your business and interests, and 6) carefully select the buyer (this is NOT just the highest price but also integrity and capability to implement).
Multinationals do not have to look at Vietnam and India as a replacement for China, says business analyst Shaun Rein at CNBC. In the next ten years China’s middle class is going to grow massively, and cannot be beaten by anybody else, he adds. “About 400 million poorer Chinese are getting into the middle class in the years to come,” he says.
Financial expert Victor Shih dives into the 2024 figures at the annual NPC and concludes China cannot roll over debts anymore and finance its budget like it did before. He tells Bloomberg that central state policies have increasingly replaced a market-driven economy.
The Book “Our Next Reality” is available on Amazon: 
