As we have been reporting in the Trends Journal, Beijing will no longer take orders or follow rules set by Washington. (See our 23 March article, “CHINA TELLS U.S TO FU.”)
Following what we had noted, this is the front-page headline of today's Wall Street Journal – Beijing’s Message to America: We’re an Equal Now
Yes, equal now, superior later. As we have forecast, the 20th century was the American century – the 21st century will be the Chinese century. The business of China is business; the business of America is war.
CHINA’S CONSUMERS ARE SHOPPING AGAIN. After lagging the country’s manufacturing recovery for months, consumer spending in China surged in March.
The nation’s official purchasing managers index for nonmanufacturing businesses climbed from 51.4 in February to 56.3 in March, the National Bureau of Statistics reported.
Readings above 50 signal economic expansion.
The Chinese government has been working to rebalance its economy, shifting some emphasis from manufacturing exports to domestic consumption.
The purchasing managers index for manufacturing also rose last month, reaching 51.9 from February’s reading of 50.6.
CHINA CAR SALES PUT PEDAL TO METAL. Sales of passenger vehicles in China ballooned 69 percent to 5.09 million during 2021’s first quarter, with consumers’ appetite for luxury cars and electric vehicles (EVs) returning the market to pre-pandemic strength, the China Passenger Car Association (CPCA) reported.
BMW and Mercedes-Benz set new sales records during the period, with consumers taking the keys to 229,748 and 222,520 units, respectively.
For the quarter, 437,000 EVs left dealers’ lots, booking an 8-percent market share for the period.
March was Tesla’s best sales month so far in China, delivering 35,748 of its locally-assembled Model Y sedans.
In contrast, General Motors sold 780,200 vehicles, fewer than in any first quarter since 2012, not counting 2020’s pandemic-plagued period. China has been the company’s only major market outside of the U.S.
Ford’s sales edged up from 136,279 two years earlier to 153,822 for the period, reversing a long slide but still only about half the number it sold in the same period in 2016.
Foreign makers, especially of mid-market vehicles, are being squeezed by Chinese manufacturers as they rival western companies in styling and engineering.
However, China’s car market is likely to need until at least 2024 to regain its 2018 peak, when 5.67 million vehicles were sold, the CPCA predicted.
The country’s recently weak equities market has discouraged shoppers from buying high-ticket items such as new cars, analysts say.
CHINA SLASHED LENDING IN AFRICA BEFORE PANDEMIC, STUDY SHOWS. China’s loans to African nations plummeted from $28 billion in 2016 to $9.9 billion in 2018 and $7 billion in 2019, according to a report by Johns Hopkins University’s China Africa Research Initiative (CARI).
The figures mirror a late 2020 Boston University study showing that China sharply curbed lending around the world.
The cutbacks possibly reflect China’s decision that many African nations had borrowed too much, a conclusion proved true in recent months.
The International Monetary Fund recently warned the developed world to prepare for a debt crisis among emerging nations (see separate story).
In March, Ethiopia, heavily indebted to China, asked for debt relief through a G20 program for countries whose economies were crippled by the global shutdown.
The Ethiopian government stopped borrowing from commercial banks “because they have too many loans,” a Chinese official said in comments quoted by the Financial Times.
Zambia, which had borrowed heavily from China for years, became the first African country to default on its Eurobond loans this year.
Other countries struggling under hefty Chinese loans include Angola, Cameroon, Djibouti, and Kenya.
China owns about 20 percent of loans made to African nations, CARI’s data shows.
China’s loans were not made with the idea of seizing national assets in case of default, CARI director Deborah Brautigan said in comments cited by the FT.
Instead, the loans were largely intended to create markets for Chinese goods and were driven by purely commercial motives divorced from Chinese government geopolitical strategies, she said.
CHINESE SPORTING GOODS FIRMS IN STOCK-MARKET SPRINT. Share prices for Anta Sports Products and Li Ning have more than doubled over the past 12 months on the Hong Kong stock exchange.
The stock price for Anta, the world’s third-largest sporting goods company by revenue, closed at the equivalent of $16.84 on 9 April, giving it a market value of about $45 billion; rival Li Ning, started by the Olympic gymnast of the same name, closed at $7.
The two companies are third and fourth in sporting goods sales in China and, according to analysts, are the only domestic brands growing their market shares at home.
The two are bested by Nike, share prices for which grew 62 percent over the last year, and Adidas, for which the stock price gained 37 percent.
However, as we had reported, Adidas and Nike are being hammered by a Chinese consumer boycott after both spoke out against slave labor being used in the Xinjiang province’s cotton industry.
And as we noted, domestic brands have gained sales as part of a surge in Chinese national spirit sparked by the international boycott of Xinjiang’s cotton.
And the two Chinese companies also are beginning to rival Western makers in quality and innovation, the Wall Street Journal reported, which also draws domestic consumers' loyalty.
In the U.S., Anta has an endorsement deal with Klay Thompson, a Golden State Warriors guard; Li Ning has a sponsorship with Miami Heat forward Jimmy Butler.