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ECONOMY

By Ding Yi / Jul 01, 2020 03:59 PM / Economy

China’s spending on products and services powered by information technology (IT) will continue to grow in 2020, as the government pledges more investment in “new infrastructure” to embrace digitalization.

The figure for this year’s IT spending is expected to hit 2.1 trillion yuan ($297 billion), representing a moderate year-on-year increase of 2.7%, according to a report by market research firm IDC.

IDC predicted that the biggest consumption source for IT products and services will be the economically developed Yangtze River Delta covering Shanghai and the coastal provinces of Zhejiang and Jiangsu, which will account for 23.6% of the total spending.

The second-largest consumption source will be the Beijing-Tianjin-Hebei region with a share of 16.6%, followed by the Greater Bay Area with 14.9%, IDC said. The Greater Bay Area links Hong Kong, Macau and some Guangdong cities into an integrated economic and business region.

Chongqing and the provinces of Hubei, Hunan, Jiangxi and Sichuan will collectively account for 12.1% of the total spending, IDC added.

Xiao Hongliang, a senior analyst at IDC, said that Beijing’s efforts to transform China into a digital economy and its bet on “new infrastructure” will drive the country’s IT spending growth at a time when the coronavirus pandemic is taking the shine off the Chinese economy.

“New infrastructure” refers to projects that support tech-based developments involving artificial intelligence (AI), the Internet of Things (IoT), big data, robotics and 5G networks, among others.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Alibaba Takes Lead in China’s Cloud Services Market


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ECONOMY

By Yang Ge / Jun 23, 2020 01:28 PM / Economy

Photo: IC

Photo: IC

It may sound modest, but a low-speed trial that took place Sunday in Shanghai could be paving the way for a futuristic Chinese rail network capable of speeds up to 600 kph (373 mph).

Just a year after its official launch in the port city of Qingdao, a rudimentary magnetic levitation (maglev) train being developed by top railway equipment builder CRRC Corp. has conducted an important trial in China’s commercial capital. The trial itself won’t break any speed records, with the single-carriage train ambling down the 1.5 km track at speeds of around 50 kph, with a maximum of around 100 kph.

But the test successfully demonstrated the technology’s coupling capabilities — a key factor for maglev trains that attain their super high speeds through frictionless travel that see trains “float” above the track through use of magnetic forces. The planned top speed of 600 kph is considerably higher than China’s current high-speed rail network’s top speed is 350 kph.

Following Sunday’s test, CRRC is planning to launch a five-carriage maglev train by the end of this year. Many more trials will be needed after that to gradually increase the speed to someday reach the 600 kph goal, Tongji University Professor Sun Zhang told Caixin. Accordingly, fans of the futuristic technology shouldn’t hold their breath waiting for maglev trains to make their commercial debut in China.

A good comparison could come from a similar system being developed by Japanese rail operator JR, which began trials for its own maglev on a 42.8 km track in 2015. A planned line that will use that technology to connect the cities of Tokyo and Nagoya over a distance of about 350 km is still way off in the distance, with a planned launch set for 2027.

Contact reporter Yang Ge (geyang@caixin.com)

Related: China Announces $14 Billion for Intercity, High-Speed Rail Projects


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By Ding Yi / Jun 23, 2020 01:07 PM / Economy

Apple will reportedly start kicking unlicensed mobile games off its Chinese App Store next month, a move that will end the practice of allowing developers to sell games on the platform while they were awaiting government approval.

The iPhone maker has informed China’s developers that they must comply with a Chinese government policy from July that requires paid games, or games offering in-app purchases, to obtain government licenses before publication, Bloomberg reported Monday, citing people familiar with the matter.

The rule, which has been enforced by China’s major Android app stores since 2016, is expected to affect about one-third of the reportedly 60,000 games currently available on China’s iOS App Store that are either paid for or contain in-app purchases, the report said.

The rule could deal a particularly heavy blow to small developers and may change how they operate. Some could switch their revenue model to in-app advertising to steer clear of the approval process associated with paid apps, or they might team up with larger developers like Tencent to obtain licenses, but in the process cede some of their autonomy.

Apple’s move comes as the Chinese government cracks down on games which it considers to be spreading “offensive” content, and amid efforts to fight gaming addiction.

In March, Apple removed the unlicensed pandemic simulation game Plague Inc. from its Chinese App Store after local regulators said some of its content was “illegal.”

Contact reporter Ding Yi (yiding@caixin.com)

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By Ding Yi / Jun 17, 2020 06:07 PM / Economy

Photo: VCG

Photo: VCG

The State Grid, China’s biggest electricity distributor, has announced plans to invest 24.7 billion yuan ($3.5 billion) in digital infrastructure in 2020 amid efforts to revitalize the economy with investment in “new infrastructure” that supports tech-based projects.

In order to promote the implementation of the investment plan, the State Grid has signed strategic cooperation agreements with several tech companies including Tencent, Alibaba, Baidu and Huawei, with the goal of building digital infrastructure in the energy sector including big data centers, the industrial internet, 5G networks and artificial intelligence (AI).

The announcement about the investment plan comes a month after Premier Li Keqiang highlighted the role of “new infrastructure” in China’s drive to accelerate the tech-powered structural upgrade of its economy in his government work report delivered during the annual “Two Sessions” political meetings.

In April, China’s National Development and Reform Commission (NDRC), the country’s top economic planner, defined “new infrastructure” as including information-based infrastructure such as 5G and the Internet of Things (IoT), convergent infrastructure supported by the application of the internet, big data and AI; and innovative infrastructure that supports scientific research, technology development and product development.

Over the last two months, China’s major tech companies have expressed enthusiasm for participating in “new infrastructure” development by rolling out their respective investment blueprints.

Alibaba has promised to invest 200 billion yuan in its cloud infrastructure over the next three years to help businesses embrace digitalization. Tencent followed suit with plans to pour 500 billion yuan into high-tech areas of cloud computing, AI, blockchain, IoT and 5G networks over the next half-decade.

Contact reporter Ding Yi (yiding@caixin.com)

Related: State Grid Juices Up Electric Charging Station Footprint


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By Ding Yi / May 28, 2020 12:52 PM / Economy

Photo: VCG

Photo: VCG

Revenue growth and R&D spending slowed sharply at China’s major internet companies in the first four months of 2020, even as the coronavirus-induced lockdown increased demand for some internet-driven services like telecommuting, online education and digital entertainment.

Between January and April, the Chinese internet sector and related services generated combined revenue of 344.6 billion yuan ($48.1 billion), up 4.9% year-on-year, according to statistics released Wednesday by the Ministry of Industry and Information Technology (MIIT). R&D spending rose 5.3% to 17.3 billion yuan. All firms surveyed had annual revenue of more than 5 billion yuan in the previous year.

The revenue growth rate was 15.3 percentage points lower than the same period of last year, while the R&D investment growth was down by 16.1 percentage points.

During the January-April period, revenue derived from information services, including streaming music and video, online games and digital news, totaled 215.2 billion yuan, accounting for nearly 62% of the total, the MIIT said. The ministry added that the country’s major internet companies earned 4.9 billion yuan by providing internet data services in the period, fueled by demand for cloud and big data services.

During the period, profit earned by the surveyed internet companies reached 32.7 billion yuan, up 4.8% from a year ago. But that growth rate was 29.1 percentage points lower than the same period of last year.

As of the end of April, the number of apps available on app stores in China reached 3.59 million, with game-related apps taking the biggest share of 24.6%, the statistics showed.

Beijing, Shanghai and the provinces of Guangdong, Zhejiang and Fujian accounted for 88.8% of the country’s total internet-related revenue, with Zhejiang posting the biggest year-on-year internet-related revenue growth of 30.9%, according to the statistics.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Chinese Internet Companies’ Revenue Topped 1 Trillion Yuan in 2019


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By Ding Yi / May 27, 2020 12:54 PM / Economy

Photo: VCG

Photo: VCG

China has reportedly crafted a general technical plan for the country’s first long-haul, wide-body jetliner, a key aircraft designer said Tuesday, as Beijing steps up its efforts to challenge the duopoly of Airbus and Boeing.

Wu Guanghui, who helped design China’s first homegrown airliner, the C919, told state-owned newspaper the Beijing Youth Daily that the new plane, known as the CR929, will be able to carry 280 passengers on journeys of up to 12,000 kilometers and is expected to start commercial flights sometime between 2025 and 2028.

The CR929 is co-developed by the state-owned aircraft-maker Commercial Aircraft Corporation of China (COMAC) and Russian aerospace conglomerate United Aircraft Corp., the report said.

Wu, who made the remarks Tuesday on the sidelines of the ongoing annual session of the National People’s Congress (NPC), China’s top legislature, added that the CR929 aircraft’s development is still in the preliminary design phase and gave no further details.

He also shared further details of the development of China’s first homegrown single-aisle aircraft, the C919, saying that the program’s six prototype airplanes have conducted test flights needed for obtaining related flight certificates in four Chinese cities last year.

The C919 is a narrow-body airliner launched by COMAC in 2008. The organization has so far received 815 orders for the C919 from 28 domestic and foreign customers, the Beijing Youth Daily reported Wu as saying.

Contact reporter Ding Yi (yiding@caixin.com)

Related: China’s Homegrown Jetliner Completes New Test Flight


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By Ding Yi / May 26, 2020 12:26 PM / Economy

China’s smart speaker market contracted in the first four months of 2020, as sales consolidated around products manufactured by the trio of Alibaba, Baidu and Xiaomi, according to statistics from market research firm IDC.

For the four months through April, about 10.56 million smart speakers were shipped in China, representing a year-on-year decline of 14.7%, the statistics released Monday showed. IDC largely attributed the drop to the coronavirus pandemic, but said that sales have turned around as brick-and-mortar stores have gradually reopened in March and April.

Alibaba claimed the top spot with shipments of 3.71 million Tmall Genie smart speakers during the period, giving it a market share of 35.2%. Last week, the Hangzhou-based e-commerce giant announced plans to invest 10 billion yuan ($1.41 billion) to develop artificial intelligence-powered smart speakers in a move that could help it retain its dominance in the emerging and competitive market.

Baidu came in second with a market share of 30.9%, a performance IDC said was largely attributable to sales of its touch-screen smart speakers. Xiaomi was third with a market share of 30.4%, meaning the three top players collectively accounted for more than 96% of the market.

IDC predicts that smart speaker makers will double down on boosting their products’ AI capabilities like speech recognition and developing apps that can be compatible with smart speakers.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Baidu Unveils Budget Touch-Screen Smart Speaker with Focus on Child Safety


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By Ding Yi / May 25, 2020 12:39 PM / Economy

Photo: VCG

Photo: VCG

China may fail to achieve the target of domestically manufacturing 70% of its semiconductors under the “Made in China 2025” industrial modernization strategy, according to a report by U.S. market research firm IC Insights.

Published in 2015, the strategy outlines China’s ambition to attain global leadership in high-tech manufacturing in advanced industries like semiconductors, artificial intelligence and information technology.

Integrated circuit production in China, including output by domestic and foreign players, only accounted for 15.7% of the country’s $125 billion chip market in 2019, a slight increase from 15.1% in 2014, IC Insights said. It forecasts the proportion will only grow to 20.7% by 2024, when the market is likely to be worth $208 billion.

The figures looked even gloomier when China-based production by foreign companies was excluded. The report showed that firms headquartered on the Chinese mainland accounted for only 6.1% of China’s overall integrated circuits market last year, including imports.

The report estimates that China will find it impossible to become self-sufficient in integrated circuits production over the next five to 10 years because of its small, underdeveloped chip production base and the growing difficulty of purchasing advanced semiconductor manufacturing equipment from overseas.

Amid ongoing trade tensions, the United States has tightened restrictions on overseas semiconductor manufacturers using American chipmaking technology that wish to ship to Chinese tech firms like Huawei.

Contact reporter Ding Yi (yiding@caixin.com)

Related: China Hits Back at New U.S. Restrictions on Huawei


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By Ding Yi / May 13, 2020 12:55 PM / Economy

Photo: VCG

Photo: VCG

China’s smartphone vendors saw an end to three consecutive months of shipment contraction in April, as factories and stores reopened amid a relaxation of coronavirus-related restrictions.

In the fourth month of this year, China’s smartphone shipments totaled 40.78 million units, representing a year-on-year increase of 17.2%, according to a report released Tuesday by the China Academy of Information and Communications Technology (CAICT), a think tank affiliated with the Ministry of Industry and Information Technology.

The country’s smartphone shipments saw year-on-year declines of 36.6% in January, 54.7% in February and 21.9% in March, previous CAICT data showed.

April’s figures showed early signs of a recovery for handset makers, which have been gradually restarting production since March. In the first quarter, Huawei was the only major smartphone seller that saw slight shipment growth in its home market, delivering 30.1 million units compared with 29.9 million units over the same period last year, according to research firm Canalys.

CAICT did not give details of shipments of Android-powered smartphones in its April figures, making it difficult to know how many Apple handsets were delivered in China last month. The U.S. company shipped nearly 2.5 million iPhones in the country in March, up from about 500,000 phones a month earlier.

The number of new smartphone models released in April fell 5.9% year-on-year to 32, with many smartphone brands preferring virtual product releases as the industry continues to recover from the effects of the pandemic, the CAICT report added.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Huawei Only Major Smartphone Vendor With Shipment Growth in China in First Quarter


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By Ding Yi / May 04, 2020 04:50 PM / Economy

Photo: VCG

Photo: VCG

Huawei was the only major smartphone vendor that saw shipment growth in China in the first three months of 2020, as the coronavirus pandemic disrupted supply chains and dampened consumption in the country.

In the first quarter, Huawei shipped 30.1 million smartphones in its home market, slightly up from 29.9 million units a year earlier, according to statistics released by research firm Canalys on Friday. That gave the company the biggest market share of 41.4%, compared with 33.9% the same period last year.

Huawei is growing more dependent on the domestic market for its smartphone-related revenue as its latest mobile phones have lost access to Google Mobile Services and updates to the licensed version of Google’s Android operating system since it was placed on the U.S.’s so-called “entity list” last year, thus possibly reducing its phones’ appeal to global consumers.

Huawei’s growth came at the expense of its Chinese rivals Oppo, Vivo and Xiaomi, which ranked second, third and fourth with respective market shares of 17.2%, 16.7% and 10.7% in the first quarter. In the same quarter of last year, the three companies’ market shares in the Chinese market were 19.1%, 17% and 11.9% respectively. They also all suffered respective year-on-year shipment drops of 26%, 19% and 26% respectively.

The fifth spot was taken by Apple, which increased its China market share by 1.2 percentage points year-on-year to 8.5%, even though the U.S. tech giant saw its shipments fall by 4% to 6.2 million units during the quarter.

China’s total smartphone shipments fell by 18% year-on-year to 72.6 million units, according to IDC data.

“Looking ahead, we remain cautious about the speed of recovery in China’s smartphone market this year, and maintain our best-case scenario of 326 million shipments for 2020, including 137 million 5G smartphones,” said Nicole Peng, vice president of mobility at Canalys.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Huawei’s HiSilicon Becomes China’s Top Smartphone Chip Vendor Despite Flat Sales


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By Ding Yi / May 04, 2020 12:53 PM / Economy

Photo: IC

Photo: IC

Spending on robots, drones and related services in China is likely to exceed $121 billion in 2024, accounting for 44% of the global total, a new report predicts, as the past three months have provided a golden opportunity to show their usefulness in the fight against the coronavirus pandemic.

Between 2020 and 2024, hardware purchases — including robotic systems, after-market robotic hardware and system hardware — will make up about two-thirds of China’s total robot-related spending, the report said. Buyers will mainly come from the manufacturing, healthcare and retail sectors. Software spending will mostly go toward purchases of command-and-control application systems, while service-related spending will be spread across various needs including systems integration.

“In the long term, the pandemic will be a catalyst for further development and deployment of robotic systems” IDC analyst Yao Yumo said in a statement. Yao predicted that emerging technologies such as 5G and artificial intelligence will play a key role in promoting the development of robotic and drone technologies.

During China’s battle against the coronavirus, robots have been used to deliver meals to patients, take body temperatures and disinfect wards in short-staffed hospitals, reducing the possibility of cross infections and saving on protective gear for medical workers.

Contact reporter Ding Yi (yiding@caixin.com)

Related: In Depth: Covid-19 Gives Robots a Chance to Shine


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By Ding Yi / Apr 29, 2020 03:54 PM / Economy

Photo: VCG

Photo: VCG

The coronavirus-induced contraction in China’s handset market in the first quarter of 2020 did not have a huge impact on the smartphone processor shipments of Huawei-owned HiSilicon, which outstripped erstwhile champion Qualcomm to become the country’s biggest smartphone chip seller during the period.

A report by CINNO Research showed that while the absolute number of smartphone chips HiSilicon shipped in the first quarter of 2020 stayed relatively flat compared to the same period the year earlier — 22.21 million smartphone chips compared to 22.17 million in 2019 — its market share grew from 24.3% to 43.9%. These figures meant it overtook previous market leader Qualcomm.

CINNO Research linked HiSilicon’s market share gain to Huawei, which equipped more than 90% of its smartphones sold in China in the first quarter with HiSilicon-made chips.

HiSilicon’s performance strikes a sharp contrast to its three major rivals ― Qualcomm, MediaTek and Apple ― which all saw their China market shares shrink in the first quarter. Of the three companies, second-placed Qualcomm was hit the hardest, suffering a year-on-year market share drop of 15 percentage points to 32.8%.

Taiwan-based MediaTek and Apple came in third and fourth with respective market shares of 13.1% and 8.5%, according to the report.

Overall, in the three months through March, China’s smartphone processor shipments plunged 44.5% year-on-year, the reported said.

In the first three months of this year, China’s smartphone shipments dropped 34.7% year-on-year to 47.7 million units, according to statistics provided by the China Academy of Information and Communications Technology, a think tank affiliated with the Ministry of Industry and Information Technology.

Contact reporter Ding Yi (yiding@caixin.com)

Related: China’s Falling Smartphone Shipments Show Signs of Leveling Off


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By Ding Yi / Apr 28, 2020 03:04 PM / Economy

Photo: VCG

Photo: VCG

The Alibaba-backed 5-year-old online lender MYbank provided loans to more than 20 million small and micro businesses in China as of the end of 2019, about 80% of which had no record of borrowing money from traditional banks.

The figures’ publication comes at a time when many small Chinese companies are struggling to access funding and recover from the fallout of the coronavirus pandemic, which has crippled the country’s economic activity for much of the first quarter.

MYbank said its average loan size was 31,000 yuan ($4,300) in 2019, up 20% year-on-year, with the default rate standing at around 1%, lower than the industry average of 3.22%.

MYbank also said that it plans to extend credit lines to 70% of the country’s small and micro businesses this year.

As of February, there were 83.5 million individually-owned businesses registered in China, employing more than 200 million workers, MYbank said, citing statistics from China’s State Administration for Market Regulation.

In recent years, small and micro businesses accounted for more than 60% of China’s gross domestic product, according to a report compiled by the country’s central bank and the China Banking and Insurance Regulatory Commission in 2018.

In 2018, Alibaba’s fintech arm Ant Financial launched an initiative aiming to supply small and micro businesses with loans totaling 1 trillion yuan over the next three years through MYbank. That was part of its efforts to use cloud technology to reduce financing costs and fast-track the loan approval process for such firms.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Ant Financial’s Vanguard Tie-Up Wins Regulator Approval


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By Ding Yi / Apr 24, 2020 04:12 PM / Economy

Photo: VCG

Photo: VCG

Chinese carmaker BYD has entered into a partnership with Toyota subsidiary Hino Motors to develop electric commercial vehicles. This is in addition to BYD’s existing deal with the top Japanese automaker to make battery-powered cars for the Chinese market.

The partnership comes as the Chinese government announced it will extend subsidies and tax exemptions for new-energy vehicles for two years amid a market contraction.

In their separate statements published on Thursday, BYD and Hino did not specify what kinds of electric commercial vehicles they will jointly build, but a Reuters report said that the partnership will focus on electric buses and trucks.

Currently, Warren Buffet-backed BYD is touting its electric buses in the overseas markets. In February, the Los Angeles Department of Transportation placed an order for 155 electric buses, of which 130 are built by BYD. At the time, the agency said that the deal was the largest single purchase of such vehicles in American history.

The partnership between BYD and Hino comes three weeks after BYD and Toyota announced a joint venture that is slated to begin in May making electric vehicles for consumers in China.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Toyota and BYD Launch EV Joint Venture in China


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By Chen Xuewan and Lu Yutong / Apr 15, 2020 05:10 PM / Economy

Photo: VCG

Photo: VCG

State Grid Corp. of China has said it will increase the number of electric vehicle (EV) charging stations by 10 times in 2020 from last year’s level, pledging 2.7 billion yuan ($382 million) of investment as part of the government’s push to support high-tech infrastructure.

The country’s largest electricity distributor rolled out the plan in a virtual conference on Tuesday. According to the meeting, a total of 78,000 charging stations will be installed in 18 provincial regions, with 53,000 earmarked for local residential areas and 18,000 for public use.

Charging points for EVs have been categorized as part of “new infrastructure” projects which China announced in March with the aim of creating new momentum for economic development. Construction of fifth-generation telecom networks and data centers also fall under the category.

Other power groups have joined the high-profile investment scheme. China Southern Power Grid Co. Ltd. said on Friday that it will build stations with 380,000 charging points in the next four years through investment or acquisitions.

China has seen a sharp rise in the installation of charging stations for its fast-growing EV market in recent years. As of 2019, the nation had built more than 510,000 public charging points and 703,000 private ones, according to data from state-backed China Electric Vehicle Charging Infrastructure Promotion Alliance (EVCIPA).

Read the full story on Caixin Global later.

https://www.caixinglobal.com/

Contact reporter Lu Yutong (yutonglu@caixin.com)


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By Ding Yi / Apr 14, 2020 04:40 PM / Economy

Photo: VCG

Photo: VCG

China’s smartphone vendors suffered a third straight month of shipment contraction in March, as the coronavirus outbreak crippled production and dampened consumption.

During the month, China’s smartphone shipments totaled 21 million units, down 21.9% year-on-year, according to a report released Monday by the China Academy of Information and Communications Technology (CAICT), a think tank affiliated with the Ministry of Industry and Information Technology (MIIT). The March decline is more modest than that in February and January, when smartphone shipments fell 54.7% and 36.6%, respectively.

Of all smartphones shipped in March, nearly 88% were Android-powered handsets, meaning that Apple shipped roughly 2.5 million iPhones in China during the period, the report said. In February, Apple shipped just about 500,000 phones in China.

Also the number of new smartphone models released in March fell 15% to 34, with many smartphone brands like Huawei moving their new product releases online, the reported added.

Operations of phone manufacturing facilities, brick-and-mortar stores and e-commerce logistics in China gradually returned to normal in March as the coronavirus outbreak has shown signs of leveling off in the country.

Taking the first three months of 2020 together, China’s smartphone shipments dropped 34.7% year-on-year to 47.7 million units in the first quarter, according to the CAICT, milder than research firm IDC’s previous estimate for a decline of 40% for the quarter.

Contact reporter Ding Yi (yiding@caixin.com)

Related: China’s Smartphone Shipments Nosedive More Than 50% in February


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By Ding Yi / Apr 14, 2020 02:19 PM / Economy

Photo: VCG

Photo: VCG

Chinese food-delivery company Meituan Dianping has hit back at allegations that it is charging hefty commissions for its delivery services, as the country’s catering industry struggles to recover from a coronavirus-induced downturn.

On Friday, the Guangdong Restaurant Association published an open letter to Meituan urging the delivery giant to cut its commission rates by at least 5% for all Guangdong restaurants and drop its exclusivity clause forbidding restaurants from working with other delivery service providers. In the letter, the association also criticized Meituan for “charging up to 26% commission to new restaurants” in what it called a “ratio surpassing what most restaurants can tolerate.”

Meituan told Caixin that more than 80% of restaurants on its platform paid commissions of between 10% and 20% in 2019, figures that “were much lower than the rumored numbers.”

The company added that its average profit per delivery order was less than 0.2 yuan ($0.03) in the fourth quarter of 2019, accounting for just 2% of its revenue.

In a separate statement, Meituan senior vice president Wang Puzhong said that the company’s delivery unit had lost money for five consecutive years since its establishment and that it only moved into the black in 2019.

The company promised to engage in talks with restaurants to find a solution that could help them out of their current troubles.

A person from a large restaurant chain, who asked not to be named, told Caixin that Meituan hiked up their company’s commission charges by a large margin in 2019. “(Restaurants) are becoming more reliant on the platform as it generates more and more traffic,” he said, without specifying how much commission his particular restaurant pays for each delivery. Rival delivery firm Ele.me also raised their commission rate a few days after Meituan, the person added.

According to its most recent earning report, Meituan’s food delivery revenues increased by 42.8% year-on-year to 15.7 billion yuan in the fourth quarter of 2019. However, the company projected that it would suffer revenue decline and operating losses due to the novel coronavirus outbreak in the first quarter of 2020.

This isn’t the first time that Chinese food-delivery companies have come under fire for their business practices. In February, several catering associations from the city of Chongqing and the provinces of Hebei, Yunnan and Shandong separately called on Meituan and Ele.me to reduce commissions for deliveries when the coronavirus led to many restaurants having to close to the public.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Meituan Feuds with Italian Startup Over Offloaded Mobike Assets


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By Zhang Erchi and Yang Ge / Apr 14, 2020 02:06 PM / Economy

Photo: VCG

Photo: VCG

Watch out world, China’s high-tech chip-making ambitions have just taken a big step forward.

Just a week after an unprecedented lockdown was lifted in its virus-stricken hometown of Wuhan, Yangzte Memory Technologies Co. Ltd. has just unveiled a flash memory chip that it says can compete with leading-edge products from global giants like Samsung, which dominate the global market for the key component used in smartphones and other computing devices.

The company said its new 128-layer NAND flash memory chip, the X2-6070, has passed sample verification by several partners — a key step before mass production can begin. It added that actual mass production could begin as soon as the end of this year, or by the first half of 2021.

The chips are the densest produced to date by any Chinese company for NAND — meaning they have similar storage capacity to the most widely used chips now on the market. The chips will come in two specifications, one with 1.33Tb and one with 512Gb of memory.

NAND is one of two main types of computer memory, the other being DRAM. The market is currently dominated by the likes of Samsung, Western Digital, Micron Technology and Kioxia, the company formerly known as Toshiba Memory. But China wants to break into the space as part of its broader ambitions to become more self-reliant in high-tech microchips.

Contact reporter Yang Ge (geyang@caixin.com)

Related: How China’s Chip Industry Defied the Coronavirus Lockdown


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By Ding Yi / Apr 10, 2020 01:38 PM / Economy

Photo: VCG

Photo: VCG

Two of China’s top electric carmakers reported significant year-on-year sales drops last month, as consumers put spending on hold after Beijing scaled back subsidies in mid-2019 and the Covid-19 outbreak also dampened spending.

In March, BAIC BJEV sold 5,992 new energy vehicles (NEVs), representing a year-on-year decline of 66.1%. Rival carmaker BYD also released gloomy figures for the month, selling 12,256 NEVs, down by nearly 60% compared to the same period of last year.

Total NEV sales by manufacturers to dealers in China dropped 49.2% year-on-year to 56,000 units in March, according to statistics released by the China Passenger Car Association.

However, there are some signs of hope. While March year-on-year sales fell for the two companies, the figures were up significantly compared to February, when the coronavirus pandemic crippled production of many carmakers in China. In February, BAIC BJEV and BYD shipped just 1,002 and 2,803 NEVs, respectively.

The effect of the plummeting sales has spilled over to China’s vehicle battery producers including leader Contemporary Amperex Technology (CATL), which has projected that its first-quarter net profits will drop by 20% to 30% year-on-year thanks to the coronavirus and sluggish NEV sales.

Contact reporter Ding Yi (yiding@caixin.com)

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By Ding Yi / Apr 02, 2020 06:19 PM / Economy

Photo: VCG

Photo: VCG

Spending on medical, beauty and catering services in China have shown signs of increasing as some local governments have lifted lockdowns and travel limits originally aimed at curbing the spread of the coronavirus, according to data provided by Alipay.

From Mar. 18 to Mar. 27, spending on dental health and medical beauty service have all increased on Alipay’s digital lifestyle platform compared with the previous 10-days when the platform was first launched. The cities of Shanghai, Nanjing and Beijing are the largest source of consumers, Alipay said in a statement emailed to Caixin, although they provided no detail about the specific sale volumes.

In addition, several local governments are using Alipay to give out electronic coupons to citizens in a bid to drive consumption. For instance, the Hangzhou municipal government distributed 1.68 billion yuan ($237 million) in consumption coupons to residents via Alipay on Mar. 27, a move that helped the city’s Century Hualian supermarkets achieve sales of 60 million yuan in just three days following their issuance, Alipay said, citing an executive at the retail chain. Alipay’s domestic rival WeChat Pay also serves as a platform through which consumers can obtain government-issued digital consumption coupons.

Digital platforms are being used by central and local governments as they try to combat the worst economic effects of the outbreak. In March Alipay was selected by the Ministry of Human Resources and Social Affairs as a partner to co-launch a virtual recruitment campaign. On Mar. 23, nearly 60,000 employers partnered with Alipay to launch an online job fair that will last through the end of June and is expected to attract one million job seekers, Alipay said.

Contact reporter Ding Yi (yiding@caixin.com)

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