Original link: https://www.latepost.com/news/dj_detail?id=1138
Overall consumption was poor in April, with autos performing worst
A combination of multiple factors resulted in a double-digit decline in retail sales of goods in April (-11.1%), second only to February and March 2020. Part of the consumption was transferred online, and e-commerce retail sales increased by 5.2% in the month. The omni-channel rice, noodles, grains, oils, beverages, medicines and other necessities to deal with diseases and lockdowns also achieved year-on-year growth.
The retail sales of catering and automobiles, which are mainly offline consumption, both fell by a large proportion. The former fell by 22.7%, and the latter fell by 31.6%. Retail sales of goods other than automobiles were 8.4% lower in April than a year earlier.
Automobile retailing, which accounts for about 10% of retail sales of consumer goods, is seen as a hope for a recovery in consumption and industry. Last month, the State Council asked all localities not to impose new restrictions on car purchases, and has implemented incremental targets for the gradual increase in purchase restrictions. In 2008 and 2015, when the economic growth pressure was relatively high, China cut taxes twice to stimulate consumption.
At the beginning of 2020, the high-level officials said for the first time, “We must actively stabilize traditional bulk consumption such as automobiles, and encourage areas where automobile purchases are restricted to appropriately increase the quota of automobile license plates, so as to drive the consumption of automobiles and related products.”
The sales data of automobiles in April are only better than those of new energy vehicles. The retail sales of the month increased by 52.6% year-on-year, and the proportion of sales in the price range of 100,000 to 150,000 yuan and 150,000 to 200,000 yuan increased by 10.22% compared with March respectively. and 3.44 percentage points.
In the week of May 2, the number of new energy vehicles registered was 54,000, with a daily average of 7,700, and the average daily number of registrations increased by 71.7% year-on-year. During the same period, the average daily registration of passenger vehicles decreased by 29.1% year-on-year. The common problem encountered by new energy OEMs is insufficient production capacity, mainly due to poor production and transportation in the Yangtze River Delta region, which occupies an important position in the industrial chain. Li Auto’s April deliveries halved.
What is uncertain now is how much residents’ willingness to consume will be after the production capacity is restored. An analyst at Hongta Securities said that if the follow-up policy wants to boost consumption, in addition to protecting market players, “it is also crucial to improve residents’ expectations of future income.”
In some places where you can’t dine in for several months, and most of the time you can’t order takeout, if the policy allows, you may see a crowd of people in the restaurant, which is the so-called retaliatory consumption. However, as Sheng Songcheng, a professor at Shanghai University of Finance and Economics, said, some of the lost consumption is lost and cannot be recovered.
For example, in the catering industry, people eat three meals a day, and those with better appetites add one or two more meals. However, no matter how much consumers can eat, it will be difficult for them to recover the lost turnover of two or three months of closing the store within the next six months. The same applies to barber shops, massage shops for the blind, and various sports and fitness venues that can be seen everywhere. The clothing business, which is very seasonal, may also struggle to recover quickly. It is possible for the industry to deal with out-of-season clothes at a discount of one or two or even by pound.
Consumers can not buy or are unwilling to buy things, the corresponding enterprises will lose a revenue. If the company’s income is zero, the income of their employees or upstream and downstream companies will be affected, and everyone will then control their own consumption or investment.
According to the central bank’s quarterly survey, at the end of the first quarter of this year, 54.7% of respondents chose “more savings”. At the end of April, the accumulative total of 7.12 trillion yuan of new household deposits by financial institutions nationwide during the year was the largest in the same period since statistics were available.
Responding to requests, many Asian countries have wooed Tesla to build a local factory
Many governments hope to introduce Tesla, replicate what Tesla has achieved in Shanghai, develop the local new energy vehicle industry chain, and provide more jobs and taxes.
On May 14, Indonesian President Joko Widodo met with Tesla CEO Elon Musk in Texas, the United States. The two sides discussed about Tesla’s investment or technical cooperation in Indonesia. Last week, Malaysian Prime Minister Ismail Sabri said he had personally invited Tesla to invest in car production in Malaysia.
In March last year, India’s Minister of Highways and Transport, Gadkari, called out Tesla, saying that India has made various preparations and incentives to ensure that the production cost of electric vehicles is reduced, “whether you (Tesz) Whatever support you want, our government will be there for you.”
Musk has said that Tesla will consider building a second Gigafactory in Asia, and the results of the site selection will be announced this year.
An auto analyst told us that the reference criteria for the location of the Tesla factory are mainly three points: whether the local automobile industry cluster is formed, whether it is possible to achieve 100% local production of parts; whether the local shipping conditions are convenient for cars to be exported to Europe and North America; whether local policy support meets Tesla’s requirements.
The analyst believes that Tesla is most likely to build a factory in Indonesia, where several battery factories have invested heavily.
Tesla’s power battery supplier CATL announced last month that it would invest 38 billion yuan in Indonesia to build a power battery industry chain including nickel mining, battery production and battery recycling. In the same month, the “K Battery Alliance” formed by South Korea’s LG Energy and other companies announced that it would invest 9 billion US dollars (about 60 billion yuan) in Indonesia to build a power battery industry chain.
Real estate investment and sales decrease, central bank cuts first-home loan interest rate
- According to data from the National Bureau of Statistics, the sales of commercial housing across the country fell by 47% year-on-year in April, reaching 813.4 billion yuan; the overall decline from January to April was 30%.
- The sales area of commercial housing decreased by 39% year-on-year to only 87.22 million square meters. From January to April, the overall decrease was 20.9% compared with last year;
- National real estate development investment fell by 2.7% year-on-year from January to April, of which the area of new housing construction fell by 26.3% year-on-year;
- The funds in place for real estate development companies fell by 23.6% year-on-year from January to April;
- Overall, April extended the decline in March, with the real estate development climate index at 95.89, the lowest since 2016. The index of 100 is a moderate level of prosperity, and below 95 is a low level of prosperity.
- Subject to the pressure of housing sales, it is more difficult for housing enterprises to withdraw funds. Deposits and advance receipts used to be the largest source of funds for housing companies. In April, this part of the funds fell by 37% year-on-year, which was already lower than the self-raised funds of housing companies.
- Yesterday was the deadline set by the Hong Kong Stock Exchange to submit the 2021 audited annual report. 13 mainland real estate companies failed to submit on time, including Sunac, Evergrande, Shimao, etc. Eight of them have yet to release important financial data for last year and were suspended from trading by the Hong Kong Stock Exchange last month.
- After the local government has successively introduced policies to encourage housing purchases, the People’s Bank of China and the China Banking and Insurance Regulatory Commission issued a national stimulus policy yesterday, adjusting the lower limit of the first-home loan interest rate to not lower than the loan market quotation rate (LPR) of the corresponding term minus 20 basis points (0.2%). .
- Under the current LPR, the lower limit is 4.4%.
- Calculated on the basis of a loan of 5 million yuan, a period of 30 years, and equal principal and interest repayments, which is equivalent to a monthly reduction of 600 yuan in repayment, and a reduction of 216,000 yuan in expenditures in the next 30 years.
- However, the actual first-home mortgage interest rate in each city can follow the national lower limit, or it can remain unchanged or increase. Therefore, the actual effect of this easing policy remains to be seen.
- According to the research report of CICC, the mainstream interest rate of first home loan in Baicheng in April was 5.17%, which was 57 basis points higher than the 5-year LPR.
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The price of natural rough diamonds has increased by 20%, and the downstream can only accept it
- The country with the largest land area in the world has not only natural gas but also abundant natural diamond mines under the permafrost. The Alrosa PJSC company here produces 30% of the world’s natural diamonds, about the same as diamond leader De Beers.
- In early April, the United States required Alrosa’s customers to stop all transactions with the company by May 7. Jewelers including Tiffany, Signet and others have stopped sourcing diamonds from the country. The price of small rough diamonds has risen 20 percent so far in March as the United States accounts for about half of the world’s diamond market and high demand is looking for new supplies of diamonds.
- Diamond companies are using blockchain to identify the origin of diamonds. De Beers is building the Tracr blockchain platform at scale to guarantee traceability of diamonds. Israel’s Sarine Diamond Technology Group has also joined Aura, a blockchain platform for the luxury goods industry launched by LVMH, Prada and other groups to trace the origin of diamond products.
- The supply of natural diamonds may be difficult to increase in the short term. De Beers said its mines were running at full speed and that the expansion of its flagship South African mine would not be completed until 2024, with no substantial increase in production until then.
- The cultivated diamonds, which are regarded as substitutes for natural diamonds, are identical to natural diamonds in terms of physical, chemical and optical properties, but their market acceptance is still limited. Consulting firm Bain expects lab-grown diamonds to account for 15 percent of the global diamond market by 2030. In response to investor questions this month, jewelry brand Chow Tai Sang said that the price of natural diamonds has been rising recently, but that cultivated diamonds have not yet been found to have a significant impact on consumer behavior.
“Every 1 percentage point change in consumption increases or decreases life expectancy by 10 days”
On May 14, economists such as Justin Yifu Lin, Huang Yiping, Li Daokui, and industry figures such as Bridgewater Fund founder Rui Dalio gave speeches at the 2022 Tsinghua PBCSF Chief Economist Forum. The key points are as follows:
- Justin Yifu Lin (Professor and Dean of the Institute of New Structural Economics, Peking University) believes that China should have an annual growth potential of 8%:
- In 2014, China overtook the United States to become the world’s largest economy in terms of purchasing power parity.
- At present, China’s per capita GDP is low, and the per capita share of science and technology is even lower. However, as China continues to catch up and take advantage of the latecomers, China should have an annual growth potential of 8%. Under the guarantee of a better political environment, China can maintain dynamic economic growth.
- Huang Yiping (Deputy Dean of the National School of Development of Peking University) believes that we must “save the economy at any cost”. The prototype of this sentence is the “protect the euro at all costs” proposed by the former president of the European Central Bank during the European debt crisis:
- In the third year of China’s anti-epidemic efforts, many companies and households have encountered serious cash flow problems. At present, “stabilizing” the economy needs to be placed first in macro policies, with the emphasis on the stability of small, medium and micro enterprises and the stability of people’s lives.
- Ray Dalio (founder of Bridgewater Fund) believes that the world faces a high-risk environment:
- The current international community is in a period of large-scale debt monetization, internal conflict, and the rise of major powers. Whenever this happens, a high-risk environment is created. In particular, the issuing countries of the three major currencies are constantly “printing money” and should be alert to the risk of financial bubbles.
- Huang Qifan (distinguished professor at Fudan University) believes that the RMB cannot be anchored to the US dollar for a long time:
- The renminbi should be anchored to its own GDP, including tax, and its own national debt credit, so that it can have a truly independent monetary policy.
- It is impossible to “talk about the color change of coal”. Even if the “30·60” carbon neutrality target is achieved, coal power is still an important supplement.
- Li Daokui (Freeman Chair Professor of Economics at Tsinghua University): In the past 30 years, for every 1% increase (decrease) in consumption, life expectancy will increase (shorten) by 10 days.
- Li Xunlei (Chief Economist of Zhongtai Securities) believes that consumer coupons should be issued:
- The role of monetary policy is limited this year, and the fiscal policy has been very aggressive in reducing taxes and fees. Consumer vouchers can directly become corporate income, which is more targeted than issuing cash to residents.
CHART OF THE DAY
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OTHER NEWS
In March, the domestic market shipped 21.46 million mobile phones, down 40.5% year-on-year.
According to the China Academy of Information and Communications Technology, the domestic market shipped 21.46 million mobile phones in March this year, a year-on-year decrease of 40.5%; of which 19.215 million were domestic brands, a year-on-year decrease of 42.4%. From January to March, the overall shipment of mobile phones was 69.346 million units, a year-on-year decrease of 29.2%. SMIC said last week that global smartphone shipments will fall by at least 200 million units this year, with Chinese brands mostly affected.
Sohu’s first-quarter advertising revenue fell 29% quarter-on-quarter, while game revenue rose 10%.
Sohu’s revenue from January to March was US$193 million, down 13% year-on-year, and its net profit was US$3 million, down 94.6% year-on-year. Among them, online game revenue was US$158 million, down 11% year-on-year and up 10% month-on-month; on the one hand, the popularity of games naturally declined, but recent updates and promotions boosted revenue. Affected by the automobile, real estate, online education and other industries, Sohu’s advertising revenue in the first quarter was US$24 million, down 23% year-on-year and 29% quarter-on-quarter; it is expected to increase by -7% to 5% quarter-on-quarter in the second quarter.
“Voice of China” IP operator Xingkong Huawen applied for listing in Hong Kong.
The prospectus shows that from 2019 to 2021, Star Chinese’s revenue was 1.806 billion yuan, 1.56 billion yuan, and 1.12 billion yuan, respectively, with a profit of 380 million yuan, a loss of 27.8 million yuan, and a loss of 352 million yuan. The company mainly operates entertainment IP, and variety show IP includes “The Voice of China” and “This! There are 8,522 music IPs, and movie IPs include many old movies in Hong Kong, such as “Jingwumen”, “A Chinese Ghost Story” and “Rouge Buckle”. Among them, the revenue from variety shows accounted for 78%.
Shanghai, Shenzhen, and Guangzhou airports saw a drop in passenger traffic in April, and financial subsidies may directly subsidize domestic passenger flights of domestic airlines.
Shanghai Airport’s passenger throughput in April was 42,600, a year-on-year decrease of 98.93%; of which domestic throughput was 8,300, a year-on-year decrease of 99.79%. Shenzhen Airport handled 1,088,700 passengers in April, down 73.52% year-on-year. Guangzhou Baiyun Airport handled 690,000 passengers in April, down 86.58% year-on-year. According to a number of media reports, the Civil Aviation Administration of China informed the airline that the finance plan is to provide financial support for domestic passenger flights of domestic airlines. Cash allowances may be granted per flight hour per shift.
Industrial electricity consumption fell 1.4% year-on-year in April, while service sector electricity consumption fell 6.8% year-on-year.
According to the National Energy Administration, in April this year, the electricity consumption of the whole society was 636.2 billion kWh, a year-on-year decrease of 1.3%; among which, agricultural electricity consumption was 7.8 billion kWh, a year-on-year increase of 5.5%, and industrial electricity consumption was 446.8 billion kWh, a year-on-year decrease. The electricity consumption of the service industry was 97.9 billion kWh, a year-on-year decrease of 6.8%. The domestic electricity consumption of urban and rural residents was 83.7 billion kwh, a year-on-year increase of 5.5%.
In April, the added value of industrial enterprises above designated size decreased by 7.08% from the previous month.
According to the National Bureau of Statistics, after deducting price factors, the added value of industrial enterprises above designated size in April this year fell by 2.9% year-on-year and 7.08% from the previous month. Among them, the added value of the mining industry increased by 9.5% year-on-year, the manufacturing industry decreased by 4.6%, and the previous values were 12.2% and 4.4% respectively; the added value of foreign and Hong Kong, Macao and Taiwan-invested enterprises decreased by 16.1%, and the private enterprises decreased by 1.1%. -1.1%, 6%.
From January to April, the express delivery volume in Shanghai decreased by 26.9% year-on-year.
According to the State Post Bureau, in April this year, the business volume of express delivery companies nationwide completed 7.483 billion pieces, down 11.9% year-on-year, and business income was 74.05 billion yuan, down 10.1% year-on-year. From January to April, the express delivery business volume in Shanghai was 837 million pieces, down 26.9% year-on-year; 141 million pieces in Jilin, down 15.2% year-on-year; 622 million pieces in Beijing, down 10.1% year-on-year; 271 million pieces in Shaanxi, down 12.7% year-on-year.
Tesla’s Shanghai plant has been delayed by a week to resume normal production.
According to media reports, Tesla’s Shanghai plant has postponed its production recovery plan. It plans to continue single-shift production this week, with a daily output of about 1,200 vehicles; from next week, production will return to pre-epidemic levels, with 2,600 vehicles per day. The report said that according to the current regulations, the Shanghai factory can only produce under “closed-loop” conditions, but it is not easy to double the number of workers in the factory, and it also faces obstacles to suppliers and logistics supply.
The locations of the three major U.S. automakers are listed as high-susceptibility areas for the new crown.
Ford, GM and Chrysler said over the weekend that they had asked auto plant workers in southeastern Michigan to resume wearing masks to work. Wearing masks does not affect operations, but the risk is that six counties in the region are currently listed by the CDC as areas with high Covid-19 infection rates, and if the outbreak breaks out among workers, it will drag down production.
BlackRock, Bridgewater, and Jinglin increased their positions in Chinese concept stocks in the first quarter.
According to the latest position report, in the first quarter of this year, BlackRock, the world’s largest asset management institution, bought a total of 1.05 million shares of Ideal Auto and 550,000 shares of Weilai Auto. The market value of the positions at the end of the period was US$772 million and US$1.36 billion respectively; in addition, it also increased its holdings. 4% of Pinduoduo, 4% of Baidu, and 28% of Alibaba. Bridgewater Fund increased its holdings of Pinduoduo, Baidu, and Alibaba by 85%, 50%, and 75%, respectively; the market value of its holdings at the end of the period was $198 million, $149 million, and $814 million. The Chinese-funded private equity giant Jinglin Assets focused on increasing its positions in NetEase, Shell, JD.com, and Manbang, and reduced its holdings in Pinduoduo.
Domestic oil price hikes.
According to the National Development and Reform Commission, starting from 24:00 today (16th), the domestic gasoline price will increase by 285 yuan per ton, and the diesel price will increase by 270 yuan per ton. This is the 9th adjustment and the 8th price increase this year. Yuan. Nationally, the price of No. 92 gasoline, No. 95 gasoline, and No. 0 diesel increased by 0.22 yuan, 0.24 yuan, and 0.23 yuan per liter, respectively; the price of No. 95 gasoline in many places exceeded 9 yuan per liter.
Both volume and price rose, and Saudi Aramco’s first-quarter net profit increased by 80% year-on-year.
Saudi state-owned oil giant Saudi Aramco achieved a net profit of US$39.5 billion from January to March this year, an increase of 82% year-on-year and a month-on-month increase of 22%. This was mainly due to higher crude oil prices and volumes, as well as higher margins in the processing segment. Saudi Aramco produces about one-eighth of the world’s crude oil, and its net profit last year exceeded $110 billion. Since the beginning of this year, oil prices have risen by more than 45%, and its stock price has also risen by nearly 30%. Last Wednesday, it surpassed Apple to become the world’s most valuable company.
Internet Explorer will be retired on June 16, and Edge will take over.
Microsoft Edge browser announced today that Internet Explorer will be officially retired on June 16. Launched in 1995, IE was once the default browser for Windows systems, and its global market share reached 95% in 2003. However, as major technology companies successively launched free browsers, IE’s market share gradually fell to less than 2%. Microsoft launched the Edge browser in 2016 and currently has a market share of more than 10%.
Terra depleted $3 billion in bitcoin reserves and still failed to hold UST.
The latest price of the UST stablecoin has dropped to $0.078 (theoretically should be stable at $1). To make matters worse, officials said today that in order to prop up the price of UST, it has almost depleted all its bitcoin reserves – it held more than 80,000 bitcoins last week, worth more than $3 billion, and this Monday only left 313 bitcoins, worth about $9.3 million; the remaining assets will be used to compensate users.
To retain talent, Goldman Sachs allows senior employees to take free time off.
According to media reports, Goldman Sachs began to implement a “flexible vacation” plan in May, and senior employees such as partners will not be limited by the number of days and can take free vacations when needed. In addition, from 2023, employees at all levels will take at least three weeks of vacation each year. The industry believes that Goldman Sachs eliminated benefits such as free restaurants last month, and increased vacations may help retain talent; but senior bankers are workaholics, and unlimited vacations are of little practical use.
Wheat prices jumped 5 percent after India announced export curbs.
Wheat prices jumped more than 5 percent after India announced restrictions on wheat exports on Friday. But India’s wheat exports last year ranked only eighth in the world, and analysts believe the jump in prices reflects a heightened market tension over food supplies. Last week, the U.S. Department of Agriculture predicted that wheat production in major growing countries such as China, the European Union, Australia and Argentina would all decline this year; India had previously forecast a bumper wheat harvest and said it was “ready to feed the world”, but the recent record high temperatures may significantly reduce the production rate. Cut production. China’s wheat self-sufficiency rate last year was about 93 percent.
The EU no longer mandates the wearing of masks at airports and on planes.
The European Union Aviation Safety Agency (EASA) this week scrapped mandatory face masks at airports and on planes, as most people have become immune through vaccination or infection. EASA said the lifting of the ban may be beneficial to the recovery of aviation and tourism, but stressed that masks are still the most effective way to prevent the spread of the new crown, and airlines can continue to require passengers to wear masks. Health officials warned the government to be cautious, saying a more severe variant of the virus could emerge at any time.
Poor expectations, British small businesses slowed financing, banks reduced lending.
Only 9% of small businesses sought financing in the January-March period this year, the lowest in eight years, a survey in the UK showed. Due to the same poor expectations from banks, only 43% of small businesses were approved for financing, a record low. Tighter lending to small companies will further drag on the recovery, the researchers said.
Reliance, India’s largest retailer, has acquired dozens of small food daily chemical brands and plans to benchmark Unilever.
According to media reports, Reliance (Reliance Group) is following the example of Unilever. It plans to acquire dozens of small food and daily chemical brands, and is building a team of distributors to cover grocery stores, supermarkets, etc. across India. $6.5 billion in sales over five years. Unilever’s annual sales in India are about $6.5 billion, covering 90% of households. Reliance’s industries cover energy, telecommunications, retail, e-commerce, etc., and it made a lot of profits in the oil business in the first quarter of this year.
The EU is studying how to buy gas in rubles without violating sanctions.
According to media reports, the EU is drafting new payment guidelines to provide a way to pay for Russian gas in rubles without violating sanctions; the plan could be for energy companies to open accounts in banks, pay in dollars or euros, and then Bank exchange for rubles. Since the end of February, the exchange rate of the dollar against the ruble has risen by more than 1:130, and now it has fallen back to 1:64, which is lower than the level at the end of February. However, there are reports that the EU is close to reaching an agreement to ban Russian oil imports in stages.
McDonald’s will sell its Russian operations and stop using its iconic arches, name, menu.
When McDonald’s opened its first restaurant in Moscow’s Pushkin Square 32 years ago (1990), hundreds of people are said to be lining up in the square for burgers and fries. At present, McDonald’s has more than 800 restaurants and 62,000 employees in Russia; the future employment of employees will be one of the terms of sale.
Text | Gong Fangyi Li Zinan Lin Guangying Intern Wang Yuqing
Editor | Gong Fangyi
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