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ECONOMY

By Ding Yi / Mar 31, 2020 05:11 PM / Economy

Photo: VCG

Photo: VCG

China’s major internet companies saw modest growth in revenue in the first two months of 2020 despite the spread of the novel coronavirus, which paused much of the country’s economic activities.

In January and February, the Chinese internet sector and its related services generated a combined revenue of 131.1 billion yuan ($18.5 billion), representing a year-on-year increase of 4.5%, according to statistics from the Ministry of Industry and Information Technology (MIIT). However, the growth rate was 5.5 percentage points lower than the same period of 2019. All firms surveyed had an annual revenue of more than 5 million yuan in the previous year.

The MIIT attributed the revenue growth to virus-driven demand for telecommuting, online education and digital entertainment.

In the January-February period, revenue derived from information services, including streaming music and videos, online games and digital news, reached 96.6 billion yuan, accounting for 73.7% of the total, the ministry said.

It added that the country’s major internet firms earned 1.74 billion yuan by providing internet data services during the period, a result of rapid growth in traffic to apps amid the outbreak. As of the end of February, the number of apps available on app stores in China reached 3.52 million, the statistics showed.

Despite modest revenue growth, the surveyed internet companies suffered a year-on-year decrease of nearly 20% in total operating profit to 9.51 billion yuan during the period. But the profit decline did not dampen the companies’ enthusiasm for research and development spending, which was up 10.6% year-on-year to 8 billion yuan during the two months.

Beijing, Shanghai and the provinces of Guangdong, Zhejiang and Fujian accounted for 86.6% of the country’s total internet-related revenue, according to the statistics.

Contact reporter Ding Yi (yiding@caixin.com)

Related: China’s Major Internet Firms See 10-Month Revenue Grow 21% Year-on-Year


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ECONOMY

By Yang Ge / Mar 31, 2020 12:54 PM / Economy

Photo: VCG

Photo: VCG

Things were looking sunny last year for JA Solar, one of the world’s top solar panel makers. But investors were more focused on what lies ahead during these uncertain coronavirus times, even as the company reported (link in Chinese) its 2019 profit soared 87% to 1.3 billion yuan ($183 million), even as its revenue rose by a more modest 7.7% to 21.2 billion yuan.

Despite those healthy gains, JA Solar warned that the heavens themselves could prevent a repeat performance in 2020. It used the Chinese term for “act of God” or “force majeure” as a major risk it faces this year due to potential impact from the coronavirus pandemic now sweeping the world.

It gave that outlook as a raft of research houses are ratcheting down their global demand forecasts for solar panels this year, especially in the non-China market that now accounts for about three-quarters of JA Solar’s sales.

Earlier this month BloombergNEF lowered its forecast for new solar installations in 2020 to 108-143 gigawatts (GW) from a previous 121-154 GW — representing a downward adjustment of 7% to 10%. UBS has lowered its outlook even more, by about 13%, to 130 GW.

But UBS analyst Alex Liu said the downward revision isn’t a major cause for concern, since most solar farm builders are saying they still plan to go ahead with their projects. They just may get delayed by several months due to logistical issues created by the virus. Investors seem to be taking the news in stride, with JA Solar’s stock largely holding steady during the last two trading days.

Contact reporter Yang Ge (geyang@caixin.com)

Related: China's GCL to Build World’s Biggest Solar Panel-Making Plant


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By Shen Xinyue and Mo Yelin / Mar 30, 2020 10:06 AM / Economy

Photo: VCG

Photo: VCG

While the Covid-19 pandemic has slowed in China its impact to the economy and job market could be far reaching.

The pandemic delivered a heavy blow to a Chinese economy that was already struggling to manage downward pressures and a weakening job market. Economists widely project that the economy is contracting in the first quarter, dragging projected 2020 GDP growth down to 4% or even lower. Based on 2018 and 2019 data, every 1 percentage point of GDP growth affects more than 2 million jobs.

China’s official urban employment rate jumped to a record 6.2% in February from 5.3% in January. During the first two months of 2020, 1.08 million new jobs were added in China’s urban areas, down 660,000 from the same period last year.

The February surge in unemployment reflects massive business suspensions and workforce cuts, according to Zhang Yi, a senior official at the National Bureau of Statistics. Industries including retail, catering, accommodations, transportation, logistics and entertainment have experienced the biggest job losses, Zhang said.

At two cabinet meetings in March, Premier Li Keqiang repeatedly called for efforts to stabilize the job market.

Compounding the challenge is that the structure of China’s job market has changed profoundly since the 2008 financial crisis. The number of migrant workers, who are mainly employed in construction and manufacturing, has declined sharply over the past 10 years as the older generation retired. In 2019, 2.4 million new migrant workers entered the job market, down from 10 million each year a decade ago.

Consequently, policymakers can’t just flip a switch to spur hiring in labor-intensive sectors such as property and infrastructure as they could a dozen years ago.

Related: Job Openings in China Fall Over 30% Amid Coronavirus


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By Ding Yi / Mar 23, 2020 05:27 PM / Economy

Photo: VCG

Photo: VCG

China’s smart speaker market saw explosive growth in 2019, with products manufactured by Alibaba, Baidu and Xiaomi accounting for more than 90% of total sales, according to statistics released Friday by research firm IDC.

Last year, about 45.9 million smart speakers were shipped in China, representing an increase of 109.7% from 2018, the statistics showed.

Alibaba claimed the top spot with shipments of 15.61 million Tmall Genie smart speakers in 2019, which marked a year-on-year rise of 87.9%. Baidu came in second shipping 14.9 million Xiaodu smart speakers, while Xiaomi was third with 11.3 million shipments of Mi AI smart speakers, IDC said.

The research firm attributed the trio’s strong performance to their efforts to expand product lines, improve the user experience and diversify marketing strategies.

Despite strong growth in 2019, IDC projected that China’s smart speaker shipments are likely to drop 25.8% year-on-year in the first quarter of 2020 due to the impact of the coronavirus outbreak, which has led to factory shutdowns and disruptions to supply chains.

Contact reporter Ding Yi (yiding@caixin.com)

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


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By Guo Yingzhe and Shen Fan / Mar 19, 2020 01:45 PM / Economy

Photo: VCG

Photo: VCG

While several Chinese local governments have been issuing consumption vouchers to shore up the coronavirus-hit economy, an official at the country’s top economic planner has told them to take into account their fiscal capacity.

Local governments need to consider how much funding they can afford when rolling out measures to stimulate consumer spending, and to ensure that the measures can bring real benefits to businesses and the public, Ha Zengyou, a department head at the National Development and Reform Commission, told (link in Chinese) a press briefing on Wednesday.

Recently, city governments in Nanjing, Jinan and Ningbo have issued vouchers for residents which can be spent on specific activities such as tourism, entertainment and catering, some of the sectors hit hardest by the epidemic due to travel and other restrictions.

Official data show that China’s retail sales, which include spending by governments, businesses and households, fell 20.5% year-on-year for the two months of January and February, the steepest fall on record. Catering sales plunged by an even larger amount of 43.1%.

Ha said that the consumption shock was relatively substantial in the short run. But as life and production gradually returns to normal, consumer demand will recover soon, he said.

He said the commission supports local governments to take such measures but they have to consider how much local funding they can afford while at the same time ensuring that measures bring real benefits to businesses and people.

Read the full story on Caixin Global later today.

Contact reporter Guo Yingzhe (yingzheguo@caixin.com)

Related: China Gets Back to Work, but Finds Few Customers


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By Ding Yi / Mar 18, 2020 01:00 PM / Economy

Photo: VCG

Photo: VCG

Digital payments continued to grow in China in the last quarter of 2019, while mobile payments grew even faster.

For the three months through December, the country’s banks processed 62.1 billion electronic payments, representing a total of 654.9 trillion yuan ($93.45 trillion), according to statistics released Tuesday by the People’s Bank of China (PBOC), the country’s central bank. The transaction value was up 6.3% from the same period of 2018.

Of those payments, 30.7 billion were mobile transactions, representing a year-on-year increase of 73.6%. A total of 94.9 trillion yuan changed hands via mobile devices, up 21.3% from the same period last year

Overall, 95.9 billion non-cash transactions were processed by the country’s banks during the period, representing 969.6 trillion yuan, the central bank said.

Meanwhile, non-bank entities processed 202.5 billion online transactions in the quarter, representing a total of 68.6 trillion yuan. Those figures jumped 28.3% and 21.1%, respectively, from a year ago.

The number of people using mobile payments in China is expected to reach 790 million in 2020, with facial recognition payments on track to be adopted more widely across the country, according to a report by iiMedia Research. The country’s two most widely used mobile payment services, Alipay and WeChat Pay, are currently both touting their respective payment machines that allow customers to make payments by simply scanning their faces.

Contact reporter Ding Yi (yiding@caixin.com)

Related: TransferWise and Alipay Team Up for International Money Transfers


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By Chen Xuewan and Lu Yutong / Mar 11, 2020 04:50 PM / Economy

Photo: VCG

Photo: VCG

China will halve its subsidy budget for new solar power plants this year and stop subsidies completely for new offshore wind farms, in the latest move to alleviate government financial pressures.

The National Energy Administration announced Tuesday that this year’s national subsidies for new solar power projects will be 1.5 billion yuan ($215.8 million) 50% lower than before. One billion yuan will be allocated to large solar projects through an auction process, and the remainder will be used for residential solar systems.

The country is also scrapping subsidies for new offshore wind projects starting this year, and is set to end subsidies for new onshore wind farms in 2021. Shi Jingli, a professor at a research institute under China’s top economic planner, told Caixin that the generous subsidies that have previously been given to offshore wind farms over the past few years have weighed heavily on central government’s finances and caused severe deficits in its subsidy funds. Scrapping part of the subsidies for renewable energy is a reasonable action in order to allocate funds wisely.

Considering the impact of the coronavirus outbreak on business operations, the authority has extended the application period for the auction to mid-June, and given one more month for solar and wind farm applications to connect their power generators to the state’s electrical grid to the end of April -- a process necessary for power plant to sell electricity.

Read the full story on Caixin Global later.

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Contact reporter Lu Yutong (yutonglu@caixin.com)


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By Ding Yi / Mar 10, 2020 03:08 PM / Economy

Photo: VCG

Photo: VCG

China’s smartphone vendors suffered bigger losses in February than January as the Covid-19 outbreak kept many handset manufacturing plants from resuming normal operations and consumers continued to stay home to avoid infection.

In the second month of 2020, China smartphone shipments totaled 6.34 million, down 54.7% year-on-year, according to the China Academy of Information and Communications Technology (CAICT), a think-tank affiliated to the Ministry of Industry and Information Technology (MIIT). The February figure marks an even more dramatic decline from January when smartphone shipments totaled 20.4 million unites.

In February, shipments of Android-powered smartphones, including those made by Huawei and Xiaomi, accounted for 92.2% of total shipments, the CAICT said, meaning that Apple sold less than 500,000 iPhones in China that month, down from 1.27 million units in the same month of 2019.

Apple has been reopening its retail stores in China and its major manufacturing partner Foxconn has been gradually resuming production at its key complex in the central Chinese city of Zhengzhou since late February in an attempt to recover from the coronavirus-linked sales hit. Foxconn said last week that it expects to return to normal production by the end of March.

Previously, market research firm IDC predicted that China is likely to see its smartphone shipments plummet by nearly 40% in the first quarter of 2020 due to the impact of the coronavirus, which has led to factory shutdowns, supply chain disruptions and logistics restrictions. In addition, many consumers are staying home to avoid infection, which is also driving down sales.

Contact reporter Ding Yi (yiding@caixin.com)

Related: IDC Forecasts First-Quarter Plunge in China Smartphone Shipments


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By Yuan Ruiyang and Isabelle Li / Mar 04, 2020 05:55 PM / Economy

Photo: VCG

Photo: VCG

In some parts of China, leaving the lights on is a smart career move.

A Caixin investigation shows how local companies and officials are fraudulently boosting electricity consumption and other metrics in order to meet tough new back-to-work targets as the spread of Covid-19 in China has waned.  

Many local governments are using electricity consumption figures as a proxy for the resumption of business in reports to Beijing.

The East China province of Zhejiang has been lauded as a prime example of the nation’s return to work by China’s top economic planner, which reported on Feb. 24 that its work resumption rate was more than 90%. But company insiders in the province admitted leaving lights and air-conditioners running all day in their empty offices, as a way to curry favor with officials and manufacture flashy statistics that local governments can report in their press releases.

Meanwhile in the industrial city of Botou, some 230 km (143 miles) south of Beijing, the head of a local manufacturer told Caixin his company had been reported to have resumed work, but the local government’s unwillingness to risk an outbreak meant it had not actually done so at all.

He further said the local government asked him to falsely report the number of employees who had returned to work, and even went as far as to directly coach workers about how to respond to inspections.

Read the full story on Caixin Global later today.                                                               

Related: In Depth: China’s Titanic Challenge Curing Virus-Stricken Economy

Contact reporter Isabelle Li (liyi@caixin.com) and editor Flynn Murphy (flynnmurphy@caixin.com)


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By Bloomberg / Mar 04, 2020 11:40 AM / Economy

Photo: VCG

Photo: VCG

Active users of mobile games developed by Tencent and NetEase have surged in China as quarantines keep people at home, underscoring the relative outperformance of their shares amid the coronavirus-driven market tumult.

For Mahjong and Game For Peace, two of Tencent’s most popular titles, daily active users increased 109% and 44%, respectively, in the two months through February, according to App Store data from mobile app researcher Apptopia Inc. Other Tencent games including Honor of Kings, Happy Poker, and QQ Speed have also seen usage increases of more than 20% over the two-month period.

The spike in game-playing comes as more people in China have been subject to quarantines as part of the nation’s attempt to contain the coronavirus, which has spread from the city of Wuhan throughout the world. At least 80,000 cases have been reported in China, and the illness has killed almost 3,000 people there.

This year’s increase was more than double the growth seen during the previous Chinese New Year holiday period. Aggregate DAUs across all six games grew 48% from December 2019 to February 2020, compared with 19% in the year-ago period.

Related: ByteDance Eyes Tencent, NetEase With Key Gaming Appointment


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By Yang Ge / Mar 03, 2020 02:41 PM / Economy

Photo: VCG

Photo: VCG

The new coronavirus may be heating up homes, as many Chinese opt to stay housebound to avoid getting infected. But it’s having the opposite effect on China’s housing market, which has just experienced one of its chilliest months in recent memory.

Sales for Chinese property developers plunged 38% in February compared with the same month a year earlier, based on the average from a list of the nation’s 100 largest companies compiled by real estate data cruncher CRIC. On a month-to-month basis, February sales plunged by an even higher 44% when compared with January, CRIC said.

The latest data show that smaller firms are getting hit more than the larger ones. But everyone is suffering after local governments ordered the shuttering of sales offices that are the primary place where most deals for new homes are negotiated and signed.

Among the top 20, leading developer Evergrande was the lone developer to record a gain in February, with sales more than doubling from a year earlier. But that happened only after it launched a “marketing for everyone” campaign midway through the month, offering hefty 25% discounts for 613 of its properties.

In the face of bans on their bricks-and-mortar sales offices, many companies have turned to online showrooms to try and make up some of the shortfall. CRIC found that of the 100 top developers, 92 are now operating online sales offices.

Related: In Depth: China’s Property Market Grinds to a Halt Amid Coronavirus Curbs


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By Ding Yi / Mar 03, 2020 01:54 PM / Economy

Photo: VCG

Photo: VCG

Chinese tech giant Baidu had the highest number of driverless vehicles and registered the most kilometers traveled by autonomous vehicles on Beijing's test approved roads in 2019, according to a survey.

The Beijing-based company’s 52 autonomous vehicles traveled 754,000 kilometers during road tests in the Chinese capital last year, accounting for about 85% of the total distances driven by self-driving cars owned by 12 licensed firms including Tencent, Didi and Nio, the survey showed, which was released Monday by the Beijing Innovation Center for Mobility Intelligent (BICMI).

Baidu was also the only company to test self-driving vehicles carrying human passengers on Beijing roads that year, BICMI said.

Guangzhou-based startup Pony.ai came in second on the city’s road-test list, but lagged far behind Baidu with 111,200 kilometers driven by five autonomous vehicles. Japanese automaker Toyota claimed the third spot with four driverless cars covering 11,100 kilometers, according to the survey. Last week, Pony.ai raised $400 million from Toyota to boost the development and commercialization of automated vehicles.

Overall, the 12 companies tested a total of 73 autonomous vehicles on Beijing roads last year, covering 886,600 kilometers, up from 153,600 kilometers eight firms drove in 2018, according to the survey.

The survey did not provide the number of cases in which a human driver had to take control of the car to avoid an accident, namely the level of “disengagement” that California’s counterpart report demands, but said that 86% of “disengagements” were due to human takeovers caused by change of data recorders and test routes or personal reasons while the remaining 14% were attributable to software system failures.

Beijing is among the few Chinese cities that allow eligible companies to conduct road tests of autonomous vehicles. As of the end of last December, the city has allowed 151 roads to be used for autonomous vehicle tests, totaling more than 500 kilometers in length.

Contact reporter Ding Yi (yiding@caixin.com)

Related: China Plans to Mass Produce Driverless Cars by 2025 Later Than Previous Forecast


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By Ding Yi / Feb 28, 2020 06:15 PM / Economy

Photo: VCG

Photo: VCG

IDC has officially joined the growing number of market research firms forecasting that the Covid-19 outbreak could wreak havoc on smartphone sales in China, the world’s biggest market.

According to the market research firm’s latest report, China is likely to see its smartphone shipments plummet by nearly 40% in the first quarter of 2020 thanks to impact of the virus, which has resulted in factory shutdowns, supply chain disruptions and logistics restrictions.

IDC also predicts the virus will drive an increase in the share of handsets sold via online channels in the first-half of the year, given that many brick-and-mortar stores have closed to avoid further spread of infections, the report said.

As more than 70% of smartphones sold globally are made in China, the public health crisis may cause global smartphone shipments to drop by 2.3% year-on-year in 2020, with a recovery likely to happen in 2021 due to increasing demand for 5G-enabled cellphones, according to the report.

IDC’s forecast comes after the China Academy of Information and Communications Technology, a research institute under the country’s Ministry of Industry and Information Technology, released its latest statistics showing that China’s mobile phone shipments nosedived by 38.9% year-on-year to 20.8 million units in January.

Contact reporter Ding Yi (yiding@caixin.com)

Related: China’s Handset Shipments Plummet Nearly 40% in January


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By Ding Yi / Feb 26, 2020 05:49 PM / Economy

Photo: IC

Photo: IC

China’s cellphone vendors had a tough time in January.

In the first month of 2020, mobile phone shipments in China nosedived by 38.9% year-on-year to 20.8 million units, according to statistics from the China Academy of Information and Communications Technology (CAICT), a research institute under the Ministry of Industry and Information Technology (MIIT).

The figure comes after the Lunar New Year holiday and amid the Covid-19 outbreak, which has caused the closure of countless handset manufacturing plants and brick-and-mortar stores selling mobile phones.

Earlier this month, several research firms downgraded their first-quarter outlook for China’s smartphone market citing the effects of the coronavirus. Both IDC and Strategy Analytics said that the country’s smartphone shipments are likely to suffer a year-on-year drop of more than 30% in the first three months of this year due to the epidemic, which has so far claimed more than 2,700 lives in China.

Since mid-February, some mobile phone producers have gradually resumed operations, including Apple manufacturing partner Foxconn, which is allowing workers from the central province of Henan to return to work at its Zhengzhou complex.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Foxconn Allows Henan Workers to Return to Its Zhengzhou Complex


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By Ding Yi / Feb 26, 2020 03:56 PM / Economy

Photo: VCG

Photo: VCG

Despite a slowdown in the economy and trade tensions with the U.S., China had 799 billionaires in 2019, more than both the U.S. and India put together, according to the annual Hurun Global Rich List, which measured the wealth of some 2,816 billionaires from 71 countries and regions.

“China today has more billionaires than the U.S. and India combined,” said Rupert Hoogewerf, chairman of the Shanghai-based Hurun Report, which published the rankings Wednesday. He added that a boom in tech valuations and strong stock markets in China, the U.S. and India pushed the number of global billionaires to a record high of 2,816.

In 2019, China created 182 billionaires, three times the number as those in the U.S., according to the Hurun Report.

Alibaba founder Jack Ma, who retired in September last year, climbed a place to become the world’s 21st richest person with a net worth of $45 billion last year, retaining his title as China’s wealthiest person. Ma ranked just ahead of Tencent’s Pony Ma with a net worth of $44 billion and Xu Jiayin of property developer Evergrande with $33 billion.

An overseas pushback against Huawei and a U.S. blacklisting did not prevent the company’s founder, 76-year-old Ren Zhengfei from growing his personal fortune by 7% to $3 billion. He ranked at 903rd, the same as U.S. President Donald Trump.

Amazon founder Jeff Bezos was the world’s richest man for a third consecutive year with a $140 billion fortune, according to the list.

Contact reporter Ding Yi (dingyi@caixin.com)

Related: China Home to One-Third of World’s Best Unicorn Investors, Hurun Report Says


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By Ding Yi / Feb 25, 2020 01:28 PM / Economy

Photo: VCG

Photo: VCG

China aims to achieve mass production of vehicles with “conditional” self-driving capabilities by 2025, according to a development plan jointly released Monday by the country’s National Development and Reform Commission (NDRC) and several other government agencies.

The Society of Automotive Engineers (SAE) divides autonomous driving technology into six levels from 0 to 5. “Conditional” driving automation refers to Level 3 technology which allows a car to drive itself only under certain circumstances in which a human driver is ready to take control in case of an emergency.

The target set by the development plan is a downgrade from what was said in a 2018 NDRC draft, in which the government agency outlined that, by this year, intelligent cars would already account for 50% of all new vehicles sold in China.

The rollback comes as autonomous vehicle developers continue to face technological challenges in their efforts to make driverless cars 100% safe. Accidents involving autonomous vehicles in the past few years have fueled public fears about sharing roads with such cars.

The development plan also provides a possible solution to some of the safety concerns, including the use of “vehicle-road coordination technology.” The technology is used to increase the interaction between smart road infrastructure and a self-driving car, which in turn strengthens the car’s capabilities of understanding the surrounding road conditions.

According to the development plan, China will ramp up its efforts to build smart roads, a new-generation transport network control system and the 5G-powered internet capabilities of vehicles.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Chinese Truckmaker and Israeli Sensor Firm Team Up on Self-Driving Trucks


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By Ding Yi / Feb 24, 2020 01:10 PM / Economy

Photo: VCG

Photo: VCG

China was the world’s biggest purchaser of handsets compatible with 5G networks.

5G smartphone shipments in China accounted for 46% of the global total last year, according to a report by research firm Counterpoint. The country started commercial roll out of 5G services in October 2019.

Huawei and its sub-brand Honor captured a combined 74% of China’s 5G smartphone sales last year. But globally, the embattled Chinese company was eclipsed by its South Korean rival Samsung, which was the world’s biggest 5G smartphone vendor with a global market share of over 40% in 2019, the report said.

Counterpoint also said that China’s Covid-19 coronavirus outbreak will have an impact on the global smartphone market as nearly half of the world’s smartphones are made in China, where the epidemic has disrupted the supply chains of many handset makers and led to the shutdown of many brick-and-mortar stores selling the devices.

“The OEMs which will be affected the most are the ones having production facilities in the Wuhan area like Lenovo and Motorola, and the ones for whom China is the major market like Huawei,” Counterpoint analyst Varun Mishra said in a statement, making reference to hardware companies. “OEMs like Realme, Honor, and Xiaomi, which are more reliant on online distribution are likely to be least affected compared to those that have a relatively high share of offline sales,” the analyst added.

Mishra predicted that the Chinese smartphone market may see a 20% drop in sales in the first quarter of 2020 due to the epidemic.

According to a report by another research firm, Strategy Analytics, global shipments of 5G smartphones are likely to reach 199 million units in 2020, a dramatic growth from 19 million units shipped in 2019.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Huawei Smartphones Slip Under Weight of U.S. Sanctions


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By Liu Yanfei and Lu Yutong / Feb 19, 2020 03:55 PM / Economy

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Photo: VCG

Hong Kong’s unemployment surged to a three-year high as consumption figures plunged in the city caused by months of unrest and the Covid-19 outbreak. Economists forecast the Asian financial center could post an unprecedented second year of economic contraction in a row.

The city’s unemployment rate rose to 3.4% for the period of November 2019 to January this year, the highest since 2017, data from the Hong Kong government said Tuesday. As of January, Hong Kong’s unemployment rate has increased for five consecutive months.

“The recent coronavirus infection has seriously disrupted many economic activities, especially tourist-related industries,” said Law Chi-kwong, secretary for Labour and Welfare Bureau in Hong Kong. Industries including retail, catering and lodging have a combined unemployment rate of 5.2% , and it further rose to 5.7% with regards to the construction industry, the highest rate in six years, Law noted.

Hong Kong closed parts of its border crossing with the mainland in early February in an effort to stem the spread of the highly contagious epidemic, and Chinese mainland suspended the issuing of traveling passes to Hong Kong and Macau, which has further hit the city’s economy.

Read the full story on Caixin Global later.

Contact reporter Lu Yutong (yutonglu@caixin.com)

Related: Moody’s Downgrades Hong Kong for ‘Inertia’ Over Protests


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By Guo Yingzhe and Cheng Siwei / Feb 11, 2020 01:13 PM / Economy

Photo: VCG

Photo: VCG

China’s fiscal revenue grew at the slowest pace since 1987 last year amid slowing economic growth and big tax and fee cuts, official data showed Monday.

Fiscal revenue grew 3.8% to 19 trillion yuan ($2.7 trillion) in 2019, according to (link in Chinese) the Ministry of Finance, missing the annual target of 5% growth. It was 2.4 percentage points lower than the revenue growth for 2018 and the second consecutive annual slowdown.

The central government collected 4.5% more revenue than the previous year, while local governments collected 3.2% more. This meant they missed the officially set growth targets of 5.1% and 4.9%.

Tax and fee cuts are the major reason for the revenue slowdown, the finance ministry said. Tax revenue for 2019 rose only 1%, 7.3 percentage points lower than the previous year. China cut taxes and fees by over 2.3 trillion yuan last year in order to ease corporate burden and shore up the slowing economy.

As tax cuts hit government revenue, authorities have resorted to other revenue sources to make up the funding shortfall, such as selling state-owned assets including land, and creaming off more profits from state-owned enterprises. Official data showed that nontax revenue in 2019 grew 20.2%, while it fell 4.7% the previous year.

Contact reporter Guo Yingzhe (yingzheguo@caixin.com)

Related: Local Governments Miss 2019 Revenue Targets

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By Flynn Murphy / Feb 10, 2020 04:30 PM / Economy

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Photo: VCG

Twin surveys by foreign business groups reveal the impact of China’s virus outbreak on British and American companies operating in the country, which complain of revenue losses, disrupted staffing and added compliance costs.

More than half of 126 British companies surveyed by the Beijing-based British Chamber of Commerce in China said the outbreak had a significant negative impact on their business, while almost all had been adversely affected in some way.

More than a quarter could not predict when they would return to business as usual, while 23% expected normal operations to resume by the end of the month and 31% by the end of March.

In the survey, released Monday, about half of British firms said they needed clarity from the Chinese government about its policies on containing the virus and potential economic stimulus measures.

A small proportion of British companies were actually benefiting from the potentially deadly disease — mostly those engaged in online and study abroad education services.

A survey by the AmCham Shanghai released on Friday found 87% of 127 U.S. companies operating in China expected their 2020 revenues to suffer as a result of the outbreak, with almost a quarter expecting them to drop 16% or more.

Twenty-nine percent of the U.S. respondents said their corporate headquarters did not fully understand the outbreak's potential economic impact. About 10% expected to relocate jobs out of China but most did not, with a third saying it was too early to know.

Considerably more relocations were expected from British companies. Almost a quarter of surveyed companies that employ British nationals said they would move them — 9% back to the U.K., and 14% elsewhere outside the Chinese mainland.

Read the full story on Caixin Global later today.

Contact reporter Flynn Murphy (flynnmurphy@caixin.com)


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