Chinese Economic Weekly Review - Jul.2~Jul.8
The must-see weekly hotspots of China's economy, all here for you!
The U.S. Department of Commerce responds to China's export controls on gallium and germanium: Will consult with allies to find a solution
In order to safeguard national security and interests, the Chinese Ministry of Commerce and the General Administration of Customs issued a notice on July 3rd, announcing the implementation of export controls on gallium and germanium, two crucial metals, starting from August 1st, 2023. In response to this decision, the U.S. government has finally issued a statement.
According to a report by Reuters on July 5th, a spokesperson for the U.S. Department of Commerce stated that the United States "strongly opposes" China's announcement of export controls on gallium and germanium, which are essential for the production of semiconductors and other electronic products. The spokesperson added that the United States will consult with allies and partners to address this issue.
MJ Comment: So, it turns out the U.S. can also use the phrase "strongly opposes." Ha ha!
"Commitment Letter for Upholding Fair Market Order in the Automotive Industry" Officially Signed
On the morning of July 6th, the conference forum of the China Automotive Forum was held. Under the witness of relevant departments, the China Association of Automobile Manufacturers, along with executives from various automotive companies including FAW, Dongfeng, SAIC, Changan, BAIC, GAC, China National Heavy Duty Truck Group, Chery, JAC, Geely, Great Wall, BYD, NIO, Li Auto, XPeng, and Tesla, jointly signed the "Commitment Letter for Upholding Fair Market Order in the Automotive Industry."
The commitment letter emphasizes that all automotive companies should adhere to industry regulations, regulate market marketing activities, maintain fair competition order, and refrain from disrupting the market's fair competition order by abnormal pricing. It also stresses the importance of marketing and promotional methods, discouraging exaggerated claims, false advertising, and misleading consumers for the purpose of attracting attention or increasing customer acquisition.
MJ Comment: Less than three days after the announcement, Tesla China has started to indirectly reduce prices again...
News: Pinduoduo's Temu Platform Reportedly Launches in Japan
July 6th - According to Reuters, Pinduoduo's budget e-commerce platform, Temu, has launched in Japan, marking its first entry into the Asian market.
It has been reported that the dropdown menu on the Temu website now includes Japan as a selectable destination for shipping. However, neither Temu nor Pinduoduo have provided comments regarding their recent expansion or future plans. Since its launch in the United States in September of last year, Temu, headquartered in Boston, has expanded to 22 other countries and regions, ranking high or even at the top of the app download charts in many of these locations.
MJ Comment: Will the Japanese people embrace this e-commerce model?
NetEase Announces the Transition of Buy-to-Play Game "Yongjie Wujian" to Free-to-Play Starting July 14th
During today's second-anniversary press conference, NetEase, a leading Chinese gaming company, officially announced that their martial arts adventure game, "Yongjie Wujian," will transition from a buy-to-play model to a free-to-play model starting July 14th. The game will also be available on the PS5 platform on the same day.
As a gesture of appreciation, the game's developers will provide sincere incentives in the form of in-game items to all players who have created characters before July 14th.
MJ Comment: Just a bit of context, due to various historical factors, the PC gaming market in China has been relatively stagnant. NetEase taking the gamble to release "Yongjie Wujian" was indeed a bold move, but ultimately, it is difficult to overcome the distorted gaming market in China.
Ant Group Fined 71.23 Billion, Alibaba Group Shares Soar 8%
On the evening of July 7th, the financial regulatory authorities imposed a fine (including confiscation of illegal gains) of 7.123 billion yuan on Ant Group and its subsidiaries. The financial regulatory authorities announced that they have successfully carried out rectification of the platform company's financial business and have shifted the focus of their work to normalized supervision. Ant Group has completed its rectification and entered a new stage of development.
This morning, Ant Group announced the initiation of a share buyback program, with a total repurchase proportion not exceeding 7.6% of the total share capital. According to the announcement, the repurchase price corresponds to an estimated valuation of approximately 567.1 billion yuan for the company, representing a decrease of about 40% compared to the valuation during its Series C financing round in 2018 (approximately 960 billion yuan).
MJ Comment: With the negative factors largely addressed, is Ant Group finally able to go public? However, considering the current regulatory restrictions, the valuation that Ant Group can achieve upon listing may be significantly lower than previously anticipated.