Caixin Weekly Sneak Peek: Explore a preview of Caixin’s flagship Chinese-language magazine, Caixin Weekly, through AI translation.

Apr 27, 2024 20:24 PM
In-Depth: The Complex Causes of Overcapacity Need Response From Supply and Demand Sides
- In 2024, China's central economic meetings highlighted challenges of overcapacity in certain industries. High-level visits and discussions with the U.S. and Germany focused on capacity issues, leading to new bilateral mechanisms for economic balance and growth discussions.
- Rapid export growth in sectors like electric vehicles and photovoltaics has drawn global attention to China's production capabilities, raising concerns about overcapacity despite a strong market demand projected for the future.
- Discussions around capacity utilization rates reveal varying standards across industries and countries, with no universal benchmark for ideal rates. China's industrial capacity utilization hit a low in early 2024, prompting debates on whether emerging industries can be judged by current supply-demand metrics alone.
This article is selected from the Apr 29 issue of Caixin Weekly
Apr 27, 2024 15:14 PM
Wei Shangjin's Column: Is the Indian Economy Overrated?
- The 2023 Indian general elections began on April 19, highlighting differing economic trajectories between India and China, with India experiencing robust growth and an increase in stock market activity, while China faces economic slowdowns.
- India has surpassed China as the world's most populous nation as of April 2023, with a younger demographic profile and significant multinational corporate shifts favoring Indian manufacturing due to lower labor costs and ongoing international trade shifts.
- Despite these advantages, concerns about India's economic potential being overstated are raised due to lower female labor participation rates compared to China, higher levels of protectionism, and ongoing issues with corruption potentially hindering foreign investment and overall economic progress.
This article is selected from the Apr 29 issue of Caixin Weekly
Apr 27, 2024 14:54 PM
Decline in Newborns Creates Surplus Funds For Vaccine Purchases
- China's National Immunization Program (NIP) has not expanded significantly since 2007, despite ongoing discussions and proposals at national conferences to include new vaccines like HPV and PCV, which are highly recommended by the WHO but still not part of China's NIP.
- The decline in birth rates in China has led to a reduction in vaccine procurement costs, saving over 1 billion yuan, potentially providing a financial opportunity to expand the NIP. However, there is concern about the sustainability of funding for such expansions.
- Indonesia has successfully incorporated additional vaccines into its national program, including HPV and PCV, offering them for free to all citizens. This contrasts with China’s slower pace in adopting new vaccines into its NIP despite similar economic conditions and public health challenges.
This article is selected from the Apr 29 issue of Caixin Weekly
Apr 27, 2024 14:34 PM
Are Non-Woven Bags Truly Eco-Friendly?
- Li Jingjing, a resident of Beijing's Chunfeng community, practices resourcefulness by repurposing items like glass jars and crab shells into useful objects. However, she struggles with the accumulation of non-woven fabric bags from daily online grocery orders, which quickly piled up to over 200 in her home.
- The non-woven fabric bags became popular as an alternative to single-use plastic bags following China's stricter plastic pollution control measures starting in 2020. Despite being marketed as eco-friendly, these bags are essentially made of plastic and need to be reused at least 11 times to be more environmentally beneficial than traditional polyethylene bags.
- Hainan province took a pioneering step by including thin non-woven fabric bags under its plastic restriction policies in January 2023, addressing the issue that these bags often end up being used only once due to their poor durability and inability to hold moisture, thus contributing significantly to environmental waste.
This article is selected from the Apr 29 issue of Caixin Weekly
Apr 27, 2024 14:14 PM
Horgos Becomes China's Largest Overland Export Port for Autos
- The practice of "parallel car exports" from China, where traders buy new cars domestically and sell them as used cars abroad, has seen a significant increase in recent years. This surge was particularly notable following the Russia-Ukraine conflict in February 2022, which led to a demand gap in Russia due to international sanctions and withdrawal of foreign car manufacturers.
- In response to the booming market, Chinese traders exploited regulatory loopholes and tax differences within the Eurasian Economic Union countries (including Kazakhstan and Kyrgyzstan) to export cars more profitably. However, by early 2024, Russia began tightening regulations, closing loopholes that allowed for cheaper customs processes through intermediary countries.
- Despite these challenges, parallel car exports have become a substantial part of China's trade with Russia, prompting both small and large-scale traders to adapt their strategies. The industry is moving towards more regulated practices with increased costs and longer capital turnover times due to new Russian import policies.
This article is selected from the Apr 29 issue of Caixin Weekly
Apr 27, 2024 13:44 PM
Israel and Iran's Brinkmanship Threatens Global Economy
- On April 13, 2024, Iran launched a significant direct attack on Israel from its territory with over 300 drones and missiles, marking a new height in the long-standing conflict between the two nations. This was in retaliation for an Israeli airstrike on April 1 that killed several Iranian officials in Syria.
- The U.S. and Israel were prepared for the attack, intercepting most of the incoming weapons with minimal damage reported. Post-attack, both countries showed restraint; President Biden urged Israeli Prime Minister Netanyahu to avoid further escalation, emphasizing defense support but not backing retaliatory actions against Iran.
- Iran portrayed the strike as self-defense and expressed no intention of escalating regional tensions further. Both nations signaled a desire to deescalate following the exchange, amidst global concerns about potential broader conflicts impacting economic and geopolitical stability in the Middle East.
This article is selected from the Apr 29 issue of Caixin Weekly
Apr 27, 2024 13:24 PM
Syngenta's Paused IPO Awaits Breakthrough in China Market
- Syngenta Group, a leading global agrochemical company, has paused its planned IPO on China's A-share market after withdrawing a 65 billion yuan application in March 2024. This follows a previous withdrawal from the STAR Market in May 2023. The withdrawals were attributed to the large fundraising scale challenging for the A-share market to absorb and a downturn in the agrochemical industry affecting Syngenta's performance.
- From 2020 to 2022, Syngenta Group reported increasing revenues but faced a significant profit drop by 86.9% in the first nine months of 2023 compared to the same period in 2022. Financial challenges included high initial financial leverage and interest expenses from debts incurred during aggressive acquisitions, including the $49 billion purchase of Swiss Syngenta by ChemChina.
- Despite setbacks, Syngenta remains committed to eventually relisting, focusing on enhancing its R&D capabilities within China to meet local agricultural transformation needs. The group aims to leverage its global network to promote Chinese agricultural innovation globally while facing stringent regulatory environments and market cultivation challenges for genetically modified (GM) crops in China.
This article is selected from the Apr 29 issue of Caixin Weekly
Apr 27, 2024 13:05 PM
Why New Energy Vehicle Insurance Is Seen as Expensive by Owners, But Unprofitable by Insurers?
- Xiaomi launched its first car, the SU7, on March 28, 2024, sparking interest in the new energy vehicle market. The insurance costs for the SU7 are comparable to those of a fuel vehicle priced over 500,000 yuan, with premiums ranging from 7,000 to 9,900 yuan depending on the model.
- New energy vehicles (NEVs) face higher insurance rates and claim frequencies compared to traditional fuel vehicles. Insurance companies often operate at a loss in this segment due to high risk and payout rates associated with NEVs. Regulatory adjustments aim to address these issues by optimizing insurance mechanisms for NEVs.
- A draft notice from China's financial regulatory authority proposes expanding the pricing autonomy for NEV insurance by adjusting the autonomous pricing coefficient range from 0.65-1.35 to 0.5-1.5, allowing insurers more flexibility in setting premiums based on risk levels and potentially reducing instances of coverage denial.
This article is selected from the Apr 29 issue of Caixin Weekly
Apr 27, 2024 12:44 PM
Amid Mortgage Downturn and Rising Credit Card Defaults, What's Next for Retail Lending?
- In 2023, the growth rate of retail loans in the banking sector slowed due to a decline in personal housing mortgage loans, traditionally a major component of retail lending. By the end of Q3 2023, the year-over-year growth rate of domestic retail loans was 6.85%, a decrease of 32 basis points from the same period in 2022.
- The balance of personal housing loans nationwide by the end of 2023 was ¥38.17 trillion, marking a year-over-year decrease of 1.6% and the first negative growth since 1997. Major banks reported similar trends with a collective reduction in mortgage loan balances amounting to ¥5166.26 billion, or a decline of 1.95%.
- Amidst these challenges, banks have shifted focus towards consumer loans targeting high-quality customer groups and personal business loans aimed at individual entrepreneurs and rural households, seeing these as areas with potential for growth despite existing financing difficulties for these groups.
This article is selected from the Apr 29 issue of Caixin Weekly
Apr 20, 2024 19:27 PM
In-Depth: How to Balance Pension Fund Contribution Pressure with Corporate Tax Relief?
- Social security payment bases are increasing across various regions due to annual adjustments based on local average wages, which have been rising in recent years. This increase is causing higher costs for businesses and individuals, adding pressure to employment costs.
- In response to economic challenges and calls from businesses for reduced burdens, some local governments have implemented measures such as temporarily lowering medical insurance rates for employees. For example, Shanghai has reduced the rate from 10% to 9%, effective March 2024.
- Despite these reductions in medical insurance contributions, the overall burden of social security payments remains high due to the rigid increases in pension contribution bases. This situation is particularly challenging for small and medium-sized enterprises and flexible employment individuals who face significant financial strain from these adjustments.
This article is selected from the Apr 22 issue of Caixin Weekly
Apr 20, 2024 15:24 PM
Xu Xiaoqing's Column: Why Do Gold and the U.S. Dollar Continue to Diverge?
- Gold prices have historically been inversely related to the U.S. dollar and real interest rates, but in recent years, despite similar dollar levels, gold prices have risen due to increased reserves by global central banks and de-dollarization trends accelerated by geopolitical events like the Russia-Ukraine conflict.
- The divergence between the U.S. dollar and gold has intensified this year, with gold prices rising even amidst high interest rates and a strong dollar, influenced by expectations of continued fiscal expansion depending on the outcome of the U.S. presidential election.
- The long-term logic for rising gold prices hinges on whether U.S. fiscal expansion continues, which could weaken the dollar's long-term credit; however, short-term economic benefits from fiscal expansion have kept the U.S. economy relatively strong compared to others.
This article is selected from the Apr 22 issue of Caixin Weekly
Apr 20, 2024 15:05 PM
Hong Kong's Property Market Sees Modest Rebound After Cooling Measures Abolished
- After Hong Kong's government abolished residential property market cooling measures ("撤辣") on February 28, 2024, the real estate market saw a significant rebound. Transactions surged with new properties selling over 400 units in just four days, surpassing the total monthly sales of February.
- The initial surge in property inquiries and transactions post-policy change began to wane by mid-April. Real estate agents reported a decrease in both viewing and transaction volumes, indicating that the initial rush might be losing momentum.
- Despite the short-term boost in transactions, long-term sustainability remains uncertain. The market faces challenges such as high interest rates and economic uncertainties which could affect future demand and prices.
This article is selected from the Apr 22 issue of Caixin Weekly
Apr 20, 2024 14:44 PM
Facing Trade Protectionism Abroad, China's Wind Power Industry Must Find Opportunities Amid the Risks
- The EU has launched an investigation into Chinese wind turbine manufacturers under its Foreign Subsidies Regulation (FSR), citing concerns about subsidies and market distortion. This follows similar actions against other Chinese industries like electric vehicles and photovoltaics.
- Chinese wind turbines are reportedly priced 50% lower than European-made ones in the EU market, with payment terms extending up to three years, which is seen as a significant competitive advantage that the EU attributes to subsidies.
- In response, China argues that its competitiveness in the wind energy sector is not subsidy-driven and criticizes the EU for protectionism. The ongoing dispute highlights broader geopolitical tensions and challenges in global trade relations between China and the EU.
This article is selected from the Apr 22 issue of Caixin Weekly
Apr 20, 2024 14:24 PM
As Logistics Firms Face Pressure to Cut Costs, How Can They Maintain Service Levels?
- After the implementation of new regulations requiring door-to-door delivery by couriers, both consumers and delivery personnel are dissatisfied. Consumers complain about ineffective communication with couriers leading to deliveries still being left at parcel lockers or stations, while couriers face increased costs and time commitments.
- The new "Express Delivery Market Management Measures" enforced from March 1, 2024, prohibit express companies from confirming receipt of parcels without customer consent or delivering parcels to automated parcel terminals without permission. This has led to increased logistics costs, impacting the low-cost structure critical for e-commerce transactions in China.
- The overall cost of logistics in China remains high compared to developed countries, with a logistics cost to GDP ratio significantly above global averages. Efforts are underway to reduce these costs through infrastructure improvements and regulatory changes, but challenges persist due to uneven industrial distribution and the need for more efficient transportation modalities like rail over road transport.
This article is selected from the Apr 22 issue of Caixin Weekly
Apr 20, 2024 14:05 PM
China's First-Quarter Economic Growth Exceeds Expectations, But Concerns Linger
- China's GDP in Q1 2024 exceeded expectations with a growth rate of 5.3%, slightly higher than the last quarter of 2023 and above the forecasted average of 4.9%. This growth was driven mainly by improvements in the industrial and service sectors, contributing over 90% to the GDP increase.
- Despite robust economic performance at the start of the year, concerns remain about slowing macroeconomic indicators in March, such as industrial production and retail sales, which were below market expectations. However, fixed asset investment showed significant improvement.
- Major financial institutions like Morgan Stanley, Goldman Sachs, and UBS have revised their forecasts for China's annual economic growth upwards due to stronger-than-expected export growth. The IMF is also considering revising its growth projections for China following these positive results.
This article is selected from the Apr 22 issue of Caixin Weekly
Apr 20, 2024 13:44 PM
Laura Cha Bids Farewell to HKEX After 30 Years
- Laura Cha, also known as Shih May-lung, will step down as the Chairperson of the Hong Kong Stock Exchange on April 24, 2024. She has held significant regulatory positions in both mainland China and Hong Kong for over 30 years, including Vice Chairman of the China Securities Regulatory Commission (CSRC) and various roles within the Hong Kong Securities and Futures Commission.
- During her tenure at CSRC starting in 2001 amidst a tumultuous period for Chinese securities markets characterized by rampant malpractices like IPO frauds and market manipulation, she implemented numerous reforms including establishing legal frameworks for securities regulation which led to public censures and administrative penalties against numerous companies.
- As Chairperson of the Hong Kong Stock Exchange since 2018, Cha pushed for internationalization of the exchange though faced challenges due to social movements, COVID-19 pandemic, and geopolitical conflicts. Under her leadership, despite a decline in IPOs and global ranking, she maintained efforts towards enhancing international dialogue and cooperation with other exchanges such as Saudi Arabia’s stock exchange.
This article is selected from the Apr 22 issue of Caixin Weekly
Apr 20, 2024 13:24 PM
How Citadel's Ken Griffin Views Opportunities in China's Economy and Market
- Ken Griffin, founder of Citadel Investment and Citadel Securities, is one of the most successful hedge fund managers globally. As of 2023, Citadel manages $61 billion with a 38% return in 2022, making it the highest cumulative return hedge fund historically. Citadel Securities has become a leading market maker in the U.S., handling about $400 billion in trades daily.
- Griffin has donated $1.56 billion across various sectors including education and politics, and is a major donor to the Republican Party. He recently contributed $5 million to Nikki Haley's presidential campaign.
- Griffin's views on China are positive; he participated in the China Development Forum (CDF) in Beijing and plans to expand Citadel's footprint in China by bidding for Credit Suisse Securities (China). His approach emphasizes leveraging technology and talent for business growth, evidenced by hiring experts like Zhao Peng as CEO of Citadel Securities.
This article is selected from the Apr 22 issue of Caixin Weekly
Apr 20, 2024 13:05 PM
Nine New Guidelines for Capital Market Emphasize Strict Regulation, Risk Prevention
- The State Council of China has issued new guidelines, known as the "new 'National Nine Articles'", aimed at enhancing supervision and risk prevention to promote high-quality development in the capital market. This includes full-chain management from listing to delisting, increased regulation of market institutions, and strengthened oversight of algorithmic and high-frequency trading to ensure market fairness.
- To implement these guidelines, the China Securities Regulatory Commission (CSRC) has released several draft rules, and stock exchanges are revising their business rules, forming a "1+N+X" policy system. These measures address issues revealed by stock market fluctuations since August 2023 and aim to resolve long-standing contradictions in the capital market.
- The new regulations emphasize stricter IPO standards, including higher thresholds for profitability and revenue on main boards and growth boards, while also focusing on improving company quality through rigorous entry barriers. This approach is expected to impact the scale of equity financing in 2024 significantly, with projections suggesting a substantial decrease compared to 2023.
This article is selected from the Apr 22 issue of Caixin Weekly
Apr 13, 2024 20:24 PM
In-Depth: With Rivals Closing In, Alibaba Retreats - Can It Stage a Comeback?
- Alibaba, under the leadership of founder Jack Ma and executives Daniel Zhang and Joseph Tsai, is refocusing on its core e-commerce and cloud computing businesses after a period of reflection and business contraction. This shift includes divesting non-core assets, such as traditional retail operations, to protect its main revenue streams amid challenges like the pandemic, competition, and regulatory fines.
- Alibaba's internal restructuring aims to improve user experience and organizational efficiency in response to past shortcomings in market competition. The company has initiated significant personnel changes, emphasizing AI-driven strategies and prioritizing customer satisfaction over chasing KPIs.
- Despite efforts to revitalize growth through strategic adjustments in e-commerce and cloud services, Alibaba faces intense competition both domestically and internationally. Its stock price has significantly declined from its peak in 2020, reflecting market skepticism about the effectiveness of these reforms. Meanwhile, Alibaba continues to explore opportunities for expansion in international markets through platforms like AliExpress (速卖通) and its B2B services.
This article is selected from the Apr 15 issue of Caixin Weekly
Apr 13, 2024 14:44 PM
Public Funds Not Profitable, Industry Faces Pay Cuts and Layoffs: What Can Be Gained After the Painful Period?
- In 2023, Chinese public mutual funds reported a total loss of 1.46 trillion yuan in equity funds, partially offset by profits from bond and money market funds totaling 909.7 billion yuan, resulting in a net loss of 492.8 billion yuan for fund holders.
- Despite an overall increase in the net asset value of public mutual funds to 27.6 trillion yuan at the end of 2023 (up by 6.03% from 2022), this growth was driven by expansions in bond and money market funds, while equity products saw reductions in both share and net value.
- The Chinese stock market experienced fluctuations throughout 2023 with frequent rotations between sectors and themes, weakening the profitability of public mutual funds, particularly equity products which saw reduced issuance to record lows amid fee reductions initiated in the second half of the year.
This article is selected from the Apr 15 issue of Caixin Weekly

The Earnings Wrap

Singatron Electronic(China) Co.,Ltd.’s Net Profit Dropped 24.8% in 2023

Mar 15, 2024 03:12 PM
Shenzhen Techwinsemi Technology Co.,Ltd.’s Net Profit Dropped 61.7% in 2023

Mar 01, 2024 05:01 PM
Zhejiang Rongsheng Environmental Protection Paper Co.,Ltd.’s Net Profit Rose 61% in 2023

Mar 01, 2024 05:01 PM