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ECONOMY

By Du Caicai and Ren Qiuyu / Nov 12, 2019 12:42 PM / Economy

Photo: VCG

Photo: VCG

Pork prices in China hit an eight-year high last month according to the latest Consumer Price Index (CPI) released by the country’s National Bureau of Statistics.

The data shows pork prices rose 101% year-on-year and 20.1% from September. The CPI itself rose 3.8% year-on-year, a 0.8% rise from September, with pork prices accountable for about 2.43% of that increase. The price hikes are driven by an ongoing severe pork shortage after China’s stock was decimated by the African swine fever outbreak first reported in August 2018.

The skyrocketing prices for China’s favorite meat are now the highest the country has seen since 2012. Prices for alternative meats like beef, mutton, chicken, and duck also rose due to the rising cost of pork.

Analysts have said that pork may continue to get more expensive until the second half of 2020, with steep increases between November 2019 and February 2020.

Contact reporter Ren Qiuyu (qiuyuren@caixin.com)

Related: China Approves Brazilian Swine-Offal Imports as Pig Fever Rages

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ECONOMY

By Wang Xiaoqing, Qian Tong, Xue Xiaoli and Denise Jia / Nov 12, 2019 12:23 PM / Economy

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Photo: VCG

This has been a year of failure in the sharing economy. WeWork’s initial public offering flopped. Uber and Lyft’s stocks have sunk way below their IPO prices. Airbnb faces a safety crisis. Ofo is on the verge of bankruptcy. Didi Chuxing is struggling with resuming its carpooling service after drivers murdered passengers.

The bursting bubble has forced Wall Street and investors to question their judgment, startups to revamp their growth strategies and governments to consider how to regulate the emerging sector.

WeWork created the most dramatic scene after the shared-workspace provider canceled its initial public offering (IPO) and stuck private equity investors led by Japan’s SoftBank Group with catastrophic losses. In the July-September quarter, SoftBank’s Vision Fund wrote down investments in more than 20 other companies, including Uber, as the sharing economy startups failed to deliver profits.

While SoftBank is one of the most-exposed tech investors, the sector’s rough 2019 is sending ripple effects broadly through the nascent sharing economy industry. The failure of WeWork’s IPO and the disappointing stock performance of already-listed companies show that investors in public markets have been more realistic than private equity investors like SoftBank. It’s expected that there will be more reverse valuations of tech companies between the private and public markets.

Read the full story on Caixin Global.

Related: WeWork Putting the Brakes on China Push: Report

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By Dave Yin / Nov 12, 2019 05:53 AM / Economy

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Photo: VCG

China raised its 2019 national rare earths production quotas by at least 10% last week amid heightened optimism of a phased trade deal with the U.S., though such hopes weakened over the weekend based on remarks by U.S. President Donald Trump.

The world’s largest producer of the chemical elements set its mining quota for the year at 132,000 tons and the smelting and separation quota at 127,000 tons, according to a statement (link in Chinese) Friday by the Ministry of Industry and Information Technology. The quotas were up 10% and 10.4% respectively from 2018 allotments.

The announcement followed months of speculation that China might leverage its dominance in rare earths in the trade war by restricting sales to the U.S., a major buyer. The country’s exports fell 18.2% year-on-year in May amid comments from Beijing that it would not tolerate use by countries that seek to hurt China’s interests.

Rare earths are 17 minerals used in products ranging from consumer electronics to military equipment. China releases national quotas semiannually, though this year’s November release came three months later than last year’s second-half announcement.

On Thursday, the Ministry of Commerce said China and the U.S. agreed to roll back tariffs on each other’s goods in phases, raising expectations of an imminent deal. The same day, China’s State Council issued new guidelines on foreign capital that would lift many restrictions on foreign financial institutions seeking to operate in the country.

However, Trump disputed that there was a breakthrough in negotiations, telling reporters Friday that he had not agreed to a rollback.

China accounted for 80% of U.S. rare earths supply in 2018, and the country controls at least 80% of the world’s processing capacity for these elements. In a bid to cut dependence on the country, U.S. and Australian officials are discussing joint development of critical mineral deposits.

Contact reporter Dave Yin (davidyin@caixin.com)

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By Lin Jinbing / Nov 09, 2019 06:27 PM / Economy

China should not cut back in supporting traditional industries while it strives to catch up with the world’s rapid technological advancement, a renowned researcher said in a panel discussion at the 10th Caixin Summit in Beijing on Friday.

Policymakers should attach equal importance to upgrading traditional industries and cultivating emerging industries in their pursuit of high-quality economic development, said Yang Weimin, a deputy director of the economic committee of the Chinese People’s Political Consultative Conference, the country’s highest political advisory body.

Local governments should not blindly shut down companies in traditional industries just because of pollution problems or hidden risks, Yang warned.

In the foreseeable future, China will still have a large domestic market space, with a huge population of 1.4 billion people, in which traditional industries like agriculture, food, textiles and chemical manufacturing can thrive, Yang said, adding that consumption of many products produced by traditional industries — except coal consumption — is far from its peak.

Furthermore, traditional sectors can still produce high-tech, high-quality and high value-added products through digital transformation and intelligent development, he said.

Contact reporter Lin Jinbing (jinbinglin@caixin.com)

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By Dave Yin / Nov 02, 2019 02:38 AM / Economy

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Photo: VCG

China’s wants the country’s top experts to remember its younger minds.

China’s Ministry of Education called for a three-year revamp of the higher education system, aiming to devote vast resources to undergraduate studies, including the expertise of those who are part of the controversial Thousand Talents Program.

By 2021, the ministry wants 10,000 national-level courses and 10,000 provincial-level courses of “top quality,” taught online, offline, via virtual reality and in practical settings, according to a Thursday directive (link in Chinese).

Those courses will be designed by “high level talent” such as scholars of the renowned Chinese academies of sciences and engineering, recipients of the National Science Fund for Distinguished Young Scholars and Chang Jiang Scholars Program fellows. They will also draw on experts from the Thousand Talents Program, a government-backed recruitment project to lure scientific talent from foreign countries to work in China, and a similarly named Ten Thousand Talents Program.

The guidelines also demand that university teaching staff devote time to bachelor’s degree students. In addition to raising their qualifications, professors and associate professors who don’t teach undergraduates for three years will be removed from the system, according to the announcement.

Universities, school presidents and professors who don’t focus on undergraduate studies “are not up to standards,” the ministry said in a statement.

The new courses will be evaluated annually by the Ministry of Education. They must incorporate development of “moral character” as well as integrate “cutting-edge technological development.”

They must also increase the level of difficulty of Chinese bachelor’s programs, notorious for having loose graduation requirements following an arduous “gaokao” university entrance exam. Under the guidelines, multiple second chances for retaking failed exams and so-called “bird courses” that make for easy credits are getting the ax.

“Students should have to jump in order to reach (their goals),” the ministry said. “(The plan) will make the curriculum more challenging … improve the quality of courses, make teachers stronger, students busier, supervision stricter, results more concrete, and create a world-class undergraduate education system with Chinese characteristics.”

It is not the first time the Ministry of Education has attempted to make bachelor’s degree programs more rigorous. In September 2018, the ministry announced regulations asking universities to cancel make-up exams and come up with stricter graduation requirements. However, to report higher graduation and employment rates to authorities, many universities are incentivized to do the opposite.

Meanwhile, China’s Thousand Talents Program has been mired in controversy both at home and abroad.

The U.S. government alleges that the initiative, designed to use foreign-educated researchers to fulfill Beijing’s broader desire to become a global leader in high-tech areas, encourages intellectual property theft from American institutions.

He Jiankui, the Chinese scientist who claimed last year to have helped create the world’s first genetically edited human babies, participated in the program, as did the CEO of a Chinese startup that said it built China’s first fully homegrown web browser, later revealed to be based on Google Chrome. In May, Emory University in the U.S. fired two Chinese-American researchers for allegedly failing to fully reveal their ties to China. One of the two was a member of the Thousand Talents Program.

Contact reporter Dave Yin (davidyin@caixin.com)

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By Wen Simin and Denise Jia / Oct 30, 2019 02:56 AM / Economy

Photo: VCG

Photo: VCG

A charity fund of Hong Kong billionaire Li Ka-shing will donate HK$200 million ($25.5 million) to help local small and medium restaurants.

The donation is part of the Li Ka-shing Foundation’s previously announced HK$1 billion ($127 million) pledge to support local small and medium businesses in Hong Kong to overcome challenges amid months of unrest rattling the city.

Each qualified restaurant will get HK$60,000, which will be disbursed before the end of November, the foundation said Tuesday in a statement.

To speed up the disbursement, the application process will be simplified as much as possible. Any restaurants employing fewer than 50 people and having a proper business registration and license can apply for the assistance fund.

The foundation said the restaurant sector has suffered difficulties more serious than when the severe acute respiratory syndrome (SARS) outbreak hit Hong Kong in 2003, with about a 30% drop in overall revenue and closure of about 200 restaurants.

The next target of the support program will be the retail industry. The foundation said it is now working closely with representatives from retailers.

Contact reporter Denise Jia (huijuanjia@caixin.com)

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By Du Caicai and Denise Jia / Oct 26, 2019 05:16 AM / Economy

Photo: VCG

Photo: VCG

China’s hog production could bottom out by the end of this year and is expected to return to normal next year, a senior official at the Ministry of Agriculture and Rural Affairs said Friday.

As of the end of September, pig herds in 12 provinces either increased or held stable compared with the previous month, indicating hog production may be entering a recovery phrase from the devastating African swine flu epidemic, Wei Baigang, director of the Agriculture Ministry’s Planning Department, said Friday at a press conference.

But overall numbers still look challenging. Data tracking 400 counties throughout the country showed that September pig herds continued to decline from August and from the same month last year and that the year-on-year drop was expanding. The monthly decline was 3% and yearly drop 41.1%.

The government has launched a series of measures to restore pork production, and the policy effect is gradually emerging, but some local policies have not been fully implemented.

As a result of the outbreak of African swine fever and subsequent plunge in pork supplies, average prices in the world’s largest consumer of the meat surged past 50 yuan ($7) per kilogram as of Thursday, up 42% from September and 78% from August.

Contact reporter Denise Jia (huijuanjia@caixin.com)

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By Ding Yi / Oct 25, 2019 05:57 PM / Economy

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Photo: VCG

Move over, Beijing, Shanghai, and Guangzhou. Those older megacities that traditionally attracted many of China’s best and brightest are losing some of their attraction for technology workers, who increasingly prefer a generation of “new first-tier cities” that offer higher salaries, a new survey showed.

According to the survey released on Thursday by recruitment app Boss Zhipin, 15 such “new first-tier cities” offered technology professionals an average monthly salary of 12,153 yuan ($1,719), up 6.6% year on year, in the first three quarters of 2019.

Of those 15, the picturesque city of Hangzhou, about 200 kilometers from Shanghai and home to e-commerce giant Alibaba, needs technology experts most urgently. The number of technology-related job vacancies accounted for 16.8% of all job opportunities in the city, the survey showed.

Nanjing ranked second after Hangzhou in needing people engaged in technology.

The term “new first-tier cities” was created by local media six years ago when 15 cities, including Hangzhou and Nanjing, were recognized with the designation, based on five assessment criteria.

The survey also said that artificial intelligence-related jobs in the “new first-tier cities” paid the highest salaries in the first three quarters of this year, hitting the 20,000 yuan mark on average, as the central government threw its strong support behind the area.

Following the broader government call to support technological development, a dozen major cities in China including Hangzhou, Wuhan and Xi’an, have joined a fierce race for talent by offering a wide range of incentives over the last two years.

Contact reporter Ding Yi (yiding@caixin.com)

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By Mo Yelin / Oct 21, 2019 12:40 PM / Economy

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Photo: VCG

China’s online retail sales in the first nine months of the year rose 16.8% year-on-year to 7.3 trillion yuan ($1.03 trillion), according to data published Friday by the National Bureau of Statistics (NBS).

Though that growth was lower than the 27.7% recorded for the same period last year, online sales — excluding services — as a percentage of total retail sales rose 2 percentage points to 19.5%.

Total retail sales for the nine-month period rose 8.2% to 29.7 trillion yuan. Nearly half of the total retail growth came from online sales, according to NBS.

Online retail has also boosted logistics services, with China handling a total of 44 billion packages in the first nine months of the year, an increase of 26.7% over the same period in 2018, according to the State Post Bureau.

Contact reporter Mo Yelin (yelinmo@caixin.com)

Related: China’s Online Retail Sales Growth Slows

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By Lin Jinbing / Oct 18, 2019 11:30 AM / Economy

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Photo: VCG

China’s economic growth slowed further in the third quarter, reaching a new low not seen for nearly three decades, amid sluggish domestic and global demand clouded by the ongoing trade war with the U.S.

Year-on-year growth in China’s gross domestic product (GDP) edged down to 6% in the third quarter from a 6.2% rise in the previous quarter, marking the lowest level in available figures dating back to 1992, according to data (link in Chinese) released Friday by the National Bureau of Statistics (NBS). The reading marked the second straight quarter of slowdown, and was in line with the average forecast for the period among economists polled by Caixin.

In the first three quarters of this year, the country’s GDP grew 6.2% year-on-year.

Read the full story on Caixin Global later today.

Contact reporter Lin Jinbing (jinbinglin@caixin.com), editor Yang Ge (geyang@caixin.com)

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By Zhang Qi and Ren Qiuyu / Oct 16, 2019 01:24 PM / Economy

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Photo: VCG

The International Monetary Fund (IMF) revised down its projections for both Chinese and global economic growth for the second time this year in the latest installment of its World Economic Outlook report, which was published Tuesday.

The report predicts that global growth will slow to 3% in 2019, down 0.3 percentage points from the Fund’s April projection. Meanwhile, China’s annual economic growth will fall 0.2 percentage points from April to 6.1%, the report says.

The increasingly pessimistic outlook for global growth reflects slowing industrial output, the trade and technology tensions between the U.S. and China, and slowing demand in China, the report said. The January version of the report anticipated 3.5% global growth, which was revised down to 3.3% in April and down further to 3.2% in July.

The IMF projected that China’s 2019 economic growth would be 6.2% in January, 6.3% in April, and 6.2% in July.

Contact reporter Ren Qiuyu (qiuyuren@caixin.com)

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By Shen Fan and Liu Jiefei / Oct 15, 2019 03:14 PM / Economy

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Photo: VCG

Multiple local governments in eastern China, one of the country’s most developed and wealthiest regions, reported plummeting industrial profits for the first eight months of the year, fueling concerns that the world’s second-largest economy is slowing further.

Of the 10 provincial-level regions of eastern China, six saw industrial companies’ profits decline year-on-year in the period from January to August, according to data from the National Bureau of Statistics (NBS).

Shanghai led the drop, posting a 19.6% plunge in profits. Beijing came second with a 14.4% decrease. Shandong, Hebei, and Jiangsu provinces, as well as Tianjin municipality, also recorded declines.

The picture remained bleak nationwide, with NBS data showing that China’s overall industrial profits fell 1.7% year-on-year during the same period, mainly due to the sluggish performance of upstream companies and the automobile manufacturing sector.

That, in turn, owed much to the ongoing economic slowdown, trade frictions with the United States, falling prices of industrial products, and a high comparison base from last year.

Read the full story on Caixin Global later today.

Contact Reporter Liu Jiefei (jiefeiliu@caixin.com)

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By Dave Yin / Oct 08, 2019 06:00 PM / Economy

Photo: VCG

Photo: VCG

A cooling economy might be hitting consumption growth at home, but Chinese travelers seem more than willing to whip out their digital wallets abroad.

Data from mobile payment platform Alipay on overseas transactions during China’s weeklong National Day holiday, which ran from Oct. 1 to Oct. 7 and is also known as Golden Week, shows a 10% year-on-year increase in in-store transaction volume as well as an average total spending increase of 15% per user to about 2,500 yuan ($351).

In a press release, Ant Financial, the company that operates Alipay, attributed the growth partly to rapidly rising growth in the platform’s use in several so-called “emerging destinations” such as Europe and Southeast Asia during the past 12 months. Transaction volume in Portugal, for example, grew 64-fold compared with last year’s Golden Week, Alipay said. In the Philippines, transaction volume grew 26-fold.

Japan, Thailand, South Korea, Malaysia, Australia, and Singapore continued to top the list of destinations by transaction volume, mostly unchanged from 2018. The Philippines, which didn’t rank in the top 10 last year, surged to No. 7.

Chinese consumers’ demand for cross-border payment services has been steadily growing. The country’s cross-border business-to-business e-commerce transaction volume is expected to reach $1.24 trillion by 2020, making up more than half of global transactions, according to global consulting firm Accenture.

Alipay also dominates China’s trillion-dollar mobile payment market, particularly in the field of online shopping. The company claims its payment services cover 110 countries and regions around the world.

But it will soon have to contend with U.S.-based PayPal, which recently became the first foreign company to obtain a digital payment license in China. Industry insiders told Caixin they expect the American company to go after cross-border payments.

Contact reporter Dave Yin (davidyin@caixin.com, @yindavid)

Related: PayPal at Last Obtains China Digital Payment License

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By Tang Ziyi / Oct 07, 2019 05:54 PM / Economy

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Photo: VCG

China’s online retail sales growth weakened in the first eight months of this year, official data showed, amid a slowing national economy.

Online retail sales rose by 16.8% year-on-year over the period, down from the 28.2% growth the year before, according to data published last month by the National Bureau of Statistics.

The domestic online retail market recorded sales of 6.4 trillion yuan ($900 billion) from January to August. Sales of physical goods, including products such as clothes and food, were up 20.8% to 5.1 trillion yuan during the period, the data showed.

The lackluster performance comes as China grapples with a slowing economy and trade frictions with the U.S. In August, China’s major economic indicators, including fixed-asset investment and value-added industrial output, posted worse-than-expected performances.

Contact reporter Tang Ziyi (ziyitang@caixin.com)

Related: Update: China’s Economic Activity Slowed Further in August

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By Tang Ziyi / Oct 07, 2019 01:55 PM / Economy

Photo: VCG

Photo: VCG

As self-driving vehicles edge closer to widespread rollout in China, the country is taking its autonomous mobility technology onto the high seas.

China has built its first research and development test base for autonomous ships in the southern coastal city of Zhuhai next to Macao, state-owned newspaper Economic Daily reported Monday.

Called the Xiangshan Ocean Science and Technology Port, the 52,000-square-meter base will design, develop and test smart marine technology and unmanned seafaring systems. Backed by local unicorn Zhuhai Yun Zhou Intelligent Technology, it is expected to go into operation at the end of the year, the report said.

Zhang Jinghua, an officer at the Zhuhai National High-Tech Industrial Development District where the base is located, said it will help the Chinese government to promote the technology and innovation required to develop the marine economy in the Greater Bay Area, a densely populated group of southern port cities that include Guangzhou, Macao, and Hong Kong.

The project marks China’s latest step in strengthening its capacity to built autonomously operated vessels that can navigate the seas without human personnel. In 2017, the country commenced operations at what it then claimed was the world’s largest automated cargo terminal in Shanghai, state-owned broadcaster CCTV reported.

Contact reporter Tang Ziyi (ziyitang@caixin.com)

Related: Hong Kong’s Cargo Terminal Operators Team Up to Turn the Tide

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By Zhao Runhua and Matthew Walsh / Sep 10, 2019 06:23 PM / Economy

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Photo: VCG

A top Chinese agricultural research institute has edged closer to a vaccine for deadly African swine fever that has ravaged the country’s pork industry.

Researchers at the Chinese Academy of Agricultural Sciences announced Tuesday that a potential vaccine developed by its Harbin-based veterinary science research institute has completed lab safety and efficiency tests and now awaits biosafety tests at the Ministry of Agriculture and Rural Affairs with a view to launching clinical trials in the near future.

As of July, African swine fever, which currently has no reliable vaccine or cure, had resulted in the culling of more than 1 million pigs in China and roiled the world’s largest pork market. Pork prices in China in August surged 46.7% year-on-year and helped to sustain a 17-month high in consumer inflation.

Last Monday, the ministry said that the government had approved no commercial vaccines to combat African swine fever and that the ministry itself had not yet given the go-ahead to any clinical trials.

Contact reporter Zhao Runhua (runhuazhao@caixin.com)

Related: Agriculture Ministry Rejects Claimed Swine Fever Vaccine Fix

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By Bloomberg / Sep 10, 2019 04:38 AM / Economy

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Photo: VCG

Chinese auto sales fell for the 14th time in 15 months, extending what’s already been a historically prolonged slump in the world’s largest car market.

Sales of sedans, sport utility vehicles, minivans and multipurpose vehicles in August fell 9.9% from a year earlier to 1.59 million units, the China Passenger Car Association said Monday.

Automakers reeling from the industry’s longest downturn in three decades continue to face headwinds as economic growth slows and trade tensions with the U.S. persist. To help stimulate demand, China has rolled out a series of supportive measures to encourage consumption — the latest coming last month when the government issued guidelines to loosen car-purchase restrictions.

But the slide continues, battering carmakers’ earnings. Top Chinese SUV maker Great Wall Motor Co. reported that first-half profit tumbled 59%, and the country’s biggest automaker — SAIC Motor Corp. — recently predicted its first annual sales decline in at least 14 years. Billionaire Li Shufu’s Geely Automobile Holdings Ltd. recorded a sales drop of 19% in August.

Separately, Indian car sales tumbled 41% — the most on record — in August amid a prolonged slump. In the U.S., which was experiencing its own downturn, automakers posted a much-needed rebound last month — though deliveries were helped by the inclusion of the Labor Day weekend in August.


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By Tanner Brown / Sep 02, 2019 10:27 AM / Economy

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Photo: VCG

After shrinking for two straight months, China’s manufacturing activity expanded in August, as factory output grew at its fastest clip in five months, a Caixin survey showed Monday.

Read the full story here.

By Tanner Brown / Sep 02, 2019 09:17 AM / Economy

Photo: VCG

Photo: VCG

As the Chinese proverb says: The moon waxes only to wane, and water surges only to overflow.

After nearly 10 years of steady expansion, the world economy faces growing concerns of a looming recession. There are plenty of reasons to worry as major economies including those of China, Britain and Germany are struggling with downward pressures or entering a contraction, underlining mounting uncertainties in a world rattled by growing protectionism and mounting trade barriers.

Analysts say the question is not whether there will be another recession, but when.

Find out what the details tell us here, in our in-depth read.
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By Zhao Runhua / Aug 30, 2019 01:54 PM / Economy

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Photo: VCG

China’s population of internet users hit a record high in the first half of 2019, with the vast majority of them primarily using their phones to get online, a new report shows.

The total number of Chinese netizens grew by 26 million from the end of 2018 to 854 million by mid-2019, with 847 million using mobile internet, according to industry tracker the China Internet Network Information Center.

During this period, 686 million people in China browsed news online, 639 million shopped online, 421 million ordered food-delivery services online, 759 million watched videos, and 339 million used ride-hailing services, according to the report.

One factor contributing to the continued rise in internet service take-up has been the country’s push for network operators to roll out fast and cheap internet, according to the report. The report said each Chinese internet user consumed on average 7.2GB data per month during the first half of 2019, about 120% the global average. 

The report provided no information on 5G internet usage in China.

Related: No 4G Network Slowing to Give Way to 5G, Ministry Says

Contact reporter Runhua Zhao (runhuazhao@caixin.com)

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