CX Weekly Briefing: Chinese E-Commerce Runs Into More Trouble in Europe

The past week in and around China has seen significant developments in business, finance, and international relations, reflecting broader trends and ongoing challenges across the country’s economy and governance.

Headline Business and Tech stories include a major regulatory action in Europe: French authorities fined fast-fashion giant Shein €40 million ($47.1 million) for advertising false discounts and making unsubstantiated environmental claims. This crackdown is part of broader EU scrutiny facing Chinese e-commerce companies, such as Temu and AliExpress, over concerns that their low-priced goods are flooding the European market; meanwhile, efforts to grow business in Europe come as these platforms face stricter regulations in the U.S. [para. 3]

China’s embattled property sector continues its alarming downward slide, with contracted sales by the top 100 developers plummeting 22.8% year-on-year in June—much steeper than May’s 8.6% decline. For the first half of 2025, cumulative sales dropped 10.8% compared to the previous year, falling to merely 27% of 2021 levels. This persistent slump has heightened pressure on Beijing to take more forceful actions, and recent State Council discussions suggest new stabilization policies are forthcoming. [para. 4]

Amid these economic uncertainties, Hong Kong’s stock exchange is witnessing a rush of industrial robotics firms going public, highlighting a strategic move among Chinese automation companies to leverage favorable IPO conditions. Leading this trend is Geekplus, aiming to raise HK$2.36 billion ($300 million) at a valuation of HK$21.83 billion, with other firms such as Standard Robots and Robotphoenix Intelligent Technology also seeking listings. [para. 5]

In finance and economics, China’s official manufacturing PMI edged up to 49.7 in June, indicating some recovery as U.S.-China trade tensions ease, though the sector remained in contraction. While large manufacturers saw improvements, small firms continued to struggle, and both export orders and employment dropped. The composite PMI crept up to 50.7, with nonmanufacturing at 50.5, pointing to an uneven recovery overall. [para. 6]

Regulators are intensifying scrutiny of China’s wealth management sector, with Bank of China Ltd.’s wealth management unit fined 12.9 million yuan ($1.8 million) for various compliance lapses such as poor investment management and liquidity violations. This is part of a broader regulatory crackdown that has led to several penalties on bank wealth management subsidiaries since June 2024. [para. 7]

China’s national asset management companies, like Cinda Asset Management, are bolstering stakes in commercial banks through convertible bond investments. For example, Cinda converted bonds to increase its shareholding in Shanghai Pudong Development Bank to 3.01%, easing the bank’s bond burden by over 100 billion yuan. Several other major asset management companies are following a similar strategy. [para. 8]

On the international stage, U.S. President Donald Trump announced a trade agreement with Vietnam: Vietnam purportedly agreed to fully open its market to U.S. products in return for accepting a 20% tariff on Vietnamese exports to the U.S., and U.S.-bound goods transiting Vietnam would incur a 40% tariff. However, Vietnamese official confirmation was not reported, and the talks included U.S. demands for less Chinese tech in these exports. [para. 9][election_info]

Domestically, a national audit revealed that 175 counties misused over 4.1 billion yuan in agricultural subsidies, repurposing funds for salaries, debt payments, and other unrelated expenses. Problems included fraudulent claims for farmland development, sometimes on unusable land, reflecting the fiscal distress facing local governments amid tax revenue declines and the property market crisis. [para. 10]

Finally, there is political change in Xinjiang, as Chen Xiaojiang, a high-ranking Communist Party official experienced in water conservancy and anti-corruption, replaced Ma Xingrui as the region’s new party chief. [para. 11]