China’s insurance market to double in 10 years, Swiss Re CEO says

The size of China’s insurance industry is expected to double in the next 10 years amid strong economic growth, making the country an even more important market for the group, said Christian Mumenthaler, group CEO of Swiss Re.

China’s economy continued its steady recovery in April, official data released on Friday showed.

The country is expected to maintain an annual economic growth rate of about 5 percent, continuing to rank among the world’s fastest-growing economies, Mumenthaler said in an exclusive interview with China Daily.

China’s insurance market is growing faster than its economy, Mumenthaler added.

“The size of premiums could double in 10 years, so we want to be part of that. I’m very excited about the market opportunities in China,” he said.

Art lovers find HK a growing cultural paradise

Crowds at Hong Kong’s M+ museum, Asia’s first global museum of visual culture. [Photo provided to]

Hong Kong, known for its blend of Eastern and Western cultures, is experiencing a thriving art scene, with affluent collectors seeking to make significant art purchases this year.

A telling example is the Art Basel show held in March in the special administrative region – a barometer of the global art market. For the first time since 2019, the exhibition regained its pre-pandemic magnitude, featuring 242 prominent galleries from the Asia-Pacific, Europe, the Americas, Africa and the Middle East. Among them, 69 galleries made a comeback after a hiatus, while 23 galleries participated in the fair for the first time.

“This edition reflected the city itself to the world – utterly alive and teeming with energy, a meeting place of tradition and the avant-garde, a port of cultures and an essential bridge in the evolving art landscape across regions,” said Angelle Siyang-Le, director of Art Basel Hong Kong.

China sees increasingly fierce NEV competition for market leaders

Consumers browse NEVs at a car fair in Shanghai on March 23, 2024. Photo: VCG

Consumers browse NEVs at a car fair in Shanghai on March 23, 2024. Photo: VCG

Competition in China’s new-energy vehicle (NEV) industry has intensified as local and international brands rush to announce price cuts and release new models to seek more market share. 

Industry analysts said that the fierce competition comes amid the transition of China’s NEV sector from a period of a large number of investments to a mature market, and the entire market will be further concentrated on a couple of leading firms.

Rather than hyping “overcapacity” in China’s NEV sector to contain China’s high-tech development, Western politicians and media outlets should acclaim China’s contribution to the world because the country’s advantages such as continuous innovation, complete industrial chains and full competition have made NEVs cheaper and more popular around the world.

On Monday, Chinese automaker Li Auto announced price cuts of about 5 percent on four of its models and the company said it would refund the difference to owners who bought those models earlier this year.

The move came one day after US automaker Tesla on Sunday trimmed the price of its Model 3 from 245,900 yuan ($34,630) to 231,900 yuan. It now offers the Model Y from 249,900 yuan onward, compared with 263,900 yuan previously, according to the company’s China website.

So far in April, more than 10 NEV brands have reportedly announced price cuts or other promotional activities.

“In the first quarter [of 2024], the number of car models that had price cuts exceeded 60 percent of the number in all of 2023, most of which were NEV models such as all-electric vehicles and plug-in hybrids,” Cui Dongshu, secretary-general of the China Passenger Car Association, told the Global Times on Monday.

This will be a key year for NEV makers to gain a firm footing in China’s auto market, so competition will be extremely fierce, Cui said. 

However, he said that Chinese NEV makers will likely have more scope to make a profit this year due to price declines in raw materials like lithium carbonate and economies of scale amid the rapid development of the market.

China’s NEV market is undergoing a structural adjustment from a period when companies made a large number of investments to a mature market, and thus competition has become extremely fierce, Cao Heping, an economist at Peking University, told the Global Times on Monday.

However, this does not mean there is “overcapacity” in China’s NEV sector, and the US vehemently hyping “overcapacity” in the Chinese sector is a political trick to build “a small yard, high fence” around the high-tech sector, Cao said.

“Washington is petty and small-minded,” Cao said. In the 1980s, US companies produced a lot of products like computers and digital devices in China. At that time, the US didn’t blame China for “overcapacity.” 

Seeing that China’s industrial chain is climbing from the lower end to the middle and high end today, the US has started to crack down on China by breaking market economy rules, he said.

Washington’s attempt to outcompete China is not benign competition, but vicious competition, in which the US sets traps for the competitor at every turn, according to Cao. He urged the US to maintain an open and cooperative attitude toward China so as to jointly contribute to global technology advance.

China’s vehicle market got off to a good start in the first quarter of 2024, with production and sales each exceeding 6.6 million units, according to the China Association of Automobile Manufacturers. The market share of NEVs remained above 30 percent, the data showed.

Amid the rapid development of the NEV industry in China, the penetration rate of passenger NEVs exceeded 50 percent in the first half of April, as reported by China Central Television on Sunday, outperforming traditional fuel passenger vehicles.

With the approach of the Beijing International Automobile Exhibition on Thursday, domestic automakers have been intensively releasing new models, which are expected to drive up domestic sales in the second quarter. 

After a hiatus of four years, the exhibition will see the global debuts of 117 models, including 30 from multinational producers. Exhibitors include international brands like BMW, Mercedes-Benz and Audi, and new car brands like Nio, Xpeng and Xiaomi, according to the official website of the exhibition.

The event, along with policies to support trade-ins, will be a catalyst for domestic car spending, Cui said, expressing positive projections for China’s auto market in the second quarter.

Debunking the fallacy of ‘Chinese economic data less transparent’

Economists' VIEW logo

Illustration: Chen Xia/Global Times

Illustration: Chen Xia/Global Times

Since the beginning of this year, foreign media outlets and institutions have been throwing mud at the Chinese economy by accusing it of a “lack of transparency in Chinese economic data.” Citing cases of individual Chinese provinces revising data from previous years, they claimed that the revisions were due to a previous falsification. 

However, on the other hand, institutions such as the IMF have maintained high expectations for China’s economic growth. For example, in early February of 2024, the IMF released a report predicting that China’s economy will grow by 4.6 percent in 2024. On April 10, Goldman Sachs released a research report raising its forecasts for China’s year-on-year economic growth for the first quarter of 2024 to 7.5 percent and a 5 percent from 4.8 percent for the whole year. 

How can we debunk the fallacy of “lack of transparency in Chinese economic data”?

To begin with, China’s economy is currently undergoing a period of structural adjustment, requiring attention to both addressing existing issues and sustaining robust development momentum. It is necessary to consider these two aspects as a whole rather than just looking at one-sided data.

Since 2022, China’s real estate sector has undergone a major adjustment, leading to a continuous weakening of the related industry investment chain and exposing debt risks in some regions or companies. Over the past 20 years, the real estate market has been booming, but the drawbacks brought about by a development model based on high leverage, high debt, and high turnover need to be addressed. Moreover, the interests involved in this industry are very broad.

Even so, at least seven or eight years ago, the government, enterprises, and academia were actively planning for new industries, new models, and new arenas, accumulating a considerable development foundation. Therefore, new growth points have emerged, including new-energy vehicles, lithium-ion batteries, photovoltaic equipment, among others. 

In sectors including infrastructure construction, clothing, food, housing, transportation, education, healthcare, and aged care, China’s robust domestic demand market continues to thrive, driven by a sizable population, ongoing urbanization, and rising consumer spending levels – attributes not fully shared by other major economies.

According to the latest statistics, the total number of middle-income individuals in China has exceeded 500 million. China is the world’s second-largest consumer market and second-largest import market, as well as the largest automobile market, consumer electronics market, and online retail market. China’s manufacturing industry accounts for nearly 30 percent of the global total. The robust domestic market cycle, along with a steady export market, provides a solid foundation for the Chinese economy to weather fluctuations in the real estate sector.

The Purchasing Managers’ Index (PMI) for March showed that the PMI has been in the expansion territory for five consecutive months. The Consumer Price Index (CPI) has moderately rebounded, and exports have also increased. This indicates that the Chinese economy is indeed undergoing structural adjustments, and the process of eliminating the dependence on real estate is also underway. The consistent trend of economic stabilization and recovery persists.

Second, the lack of structural research on China’s economic data, confusing concepts, and oversimplified comparisons all contribute to “self-misleading” conclusion of the fallacy of “lack of transparency in Chinese economic data.”

When analyzing economic data, it is important to observe in terms of both amount and structure, as well as the corresponding context. In times of significant economic changes, it becomes even more essential to have structural analysis in mind. 

A very typical case is that many foreign media and institutions have claimed that “foreign investment is not coming to China” based on the data from the State Administration of Foreign Exchange (SAFE). In fact, the rules for data statistics by the SAFE and the Ministry of Commerce (MOFCOM) are different, and from the perspective of both the stock and increment of foreign investment in China, the situation is not negative, and there are even some promising aspects. There is no such thing as “lack of transparency in Chinese economic data.”

Taking the foreign direct investment data from the second quarter of 2023. There are differences between the data from SAFE and MOFCOM. In fact, the SAFE data was compiled according to the “asset/liability principle,” while the MOFCOM data was compiled according to the “directional principle.”

Currently, most countries, including China and the US, compile foreign direct investment data based on the “directional principle” because this method can more directly reflect the source of investment and assess the situation of foreign investors entering the country, making it easier for international comparisons. 

Generally, foreign direct investment data compiled with the “asset/liability principle” is usually higher than the data compiled with the “directional principle.” However, in recent years, there have been cases where the latter is higher than the former. Regardless of which data is used, it is not accurate to simply say that “Chinese economic data is not transparent” or to conclude that “foreign capital is withdrawing from China.”

Last but not least, foreign media and institutions view the Chinese economy with an ideological bias, deliberately exaggerating and sensationalizing individual cases in an attempt to influence public perception.

Driven by their own sense of superiority, some foreign media and institutions do not accept the reality that the Chinese economy is steadily recovering and can withstand internal and external pressures. They hold biased and skeptical attitudes toward Chinese economic data. 

By highlighting the cases of data falsification by some Chinese companies, they magnify external concerns with the aim of influencing the perception of China’s economic governance. In response, we must not only pay full attention to and legally crack down on the falsification of data by individual companies, continuously improve supervision mechanisms, but also firmly counter the narrative of “lack of transparency in Chinese economic data” by some foreign media and institutions.

Currently, the various levels of investigation teams directly under the National Bureau of Statistics (NBS), including provincial, municipal, and county-level teams, are legally conducting data collection and screening, playing a significant role in ensuring the accuracy of data. Based on these data collection efforts, they are cracking down on cases of false reporting, over-reporting, and under-reporting. 

For a long time, China’s economic governance and decision-making have been based on seeking truth from facts, relying on data from the NBS to have a full understanding of objectively existing problems. In recent years, a series of specific measures to boost the economy have been proposed based on these data and changes in the internal and external environment. Therefore, China does not have the motivation to “obscure” economic data. 

The author is a senior financial observer. [email protected]

China enters ‘show’ time, demonstrating resolve on opening-up

Photo: Qi Xijia/GT

Visitors at the Hainan Pavilion at CICPE Photo: Qi Xijia/GT

Following intensive visits to China by foreign CEOs in March, China has entered a week of international trade exhibitions. This highlights the potential of China’s dynamic consumer market and the country’s unswerving commitment to opening-up.

Chinese officials have taken the opportunity to drive home the point that the door to China’s opening-up will only get wider, and representatives from leading multinationals told the Global Times that they are optimistic about the development of the Chinese consumer market, which is set to drive their revenue growth and instill new positivity into the global economy.

The 4th China International Consumer Products Expo (CICPE), Asia’s largest premium consumer products expo, began on Saturday in South China’s Hainan Province.

The six-day event, which lasts through April 18, will host more than 4,000 brands from 71 countries and regions to showcase their products for global consumers. More than 55,000 purchasers and professional buyers are expected to attend the event, with more than 300 brands launching about 1,000 new products during the expo.

In tandem with the CICPE, the Spring session of the China Import and Export Fair, or Canton Fair, will be held from Monday to May 5 in Guangzhou, South China’s Guangdong Province. A total of 137,000 buyers from 215 countries and regions have completed pre-registration for the mega trade show, according to China’s Ministry of Commerce.

The week of trade expos comes as the Chinese economy began the year on a solid footing, with some major international financial institutions raising their Chinese GDP projections for 2024. The resilience of the world’s second-largest economy and the attractiveness of its vast consumer market and manufacturing products offer a strong rebuttal to some Western media outlets’ hype about the Chinese economy reaching its peak, analysts said.

The international trade exhibitions allow the world to further identify and trust the China market and its economic prosperity, and also demonstrate the status of China’s economy, which plays a spearhead role in the world economy amid a complex global political environment, Cao Heping, an economist at Peking University, told the Global Times on Sunday.

Cao said that the observations and impressions of the investors who participate in the two trade shows will be conveyed abroad and boost confidence in the global market.

These overseas investors gain valuable firsthand information on China’s investment potential from these interactions, and they will be noticing the advantages of the China market in the unstable global political and economic environment, Cao noted.

Goldman Sachs and Citi recently released separate reports stating that China’s economy had gotten off to a good start in 2024. It is expected that the GDP growth target of “about 5 percent” set by the Chinese government can be achieved, and the forecast for China’s GDP growth rate for the full year has been raised, according to the Xinhua News Agency.

“The current wave of a backlash against economic globalization may be challenging, but the world will never return to a state of isolation. China will always be an important opportunity for global development. The door to China’s opening-up will only get wider,” said Peng Qinghua, vice chairman of the Standing Committee of the National People’s Congress, said in welcoming remarks for the CICPE on Saturday.

“The Chinese economy is resilient, dynamic and full of potential, and its strong long-term outlook remains unchanged,” Sheng Qiuping, Chinese vice minister of commerce, said in remarks on Saturday.

To many exhibitors, the CICPE, the first major international exhibition held in China so far this year, offers opportunities for global companies to explore the massive market in China.

“Expos such as the CICPE are wonderful opportunities to promote Ireland and what it has to offer, and they are excellent platforms for Irish companies to introduce themselves to Chinese consumers. Quite a few Irish companies return again and again to these expos,” Ambassador of Ireland to China Ann Derwin told the Global Times in an exclusive interview.

Ireland, the country of honor for the CICPE with a dedicated exhibition venue, aims to show its scientific and technological innovation, education, investment, tourism and culture.

With a population of 1.4 billion and a 400 million strong middle class, China has a per capita GDP exceeding $12,000, making it one of the most promising consumer markets in the world, analysts said.

Representatives of leading multinationals told the Global Times that they are optimistic about the development of the Chinese consumer market, which is set to drive their revenue growth and instill new positivity into the global economy.

Volkswagen Group China (VGC) demonstrated its commitment to Chinese customers with a spectacular lineup of 13 models at the CICPE.

“Building on our existing successful partnership with Hainan Province, and riding on the tremendous opportunities presented by the Hainan Free Trade Port, Volkswagen Group China is committed to contributing to the e-mobility and green development of Hainan,” Zhang Lan, VGC vice president of sales and marketing, told the Global Times on Saturday.

Since the beginning of 2024, China has accelerated its pace of opening-up, with the announcement of the 24-point measures to stabilize foreign investment and a range of visa exemption policies to facilitate business travel.

Efforts are also being strengthened to boost consumption by promoting equipment upgrades and consumer goods trade-ins, bringing new opportunities for foreign companies.

Jack Chan, EY China chairman, told the Global Times on Saturday that China is an important engine for global economic growth for all sorts of businesses, and China’s continued efforts to open up will provide more “motivation” for investors to tap into this massive market.

“We believe that the foreign investment performance in China this year will maintain a high-quality development trend,” Chan said. “We look forward to enhanced foreign investment in high-tech industries, the digital economy and sustainable development.” 

Retail sales in the first two months of 2024 hit 8.13 trillion yuan ($1.14 trillion), increasing 5.5 percent year-on-year, according to the National Bureau of Statistics.

China is due to report its first-quarter growth data this week.

Apple iPhone’s shipments plunging 33% in February in China due to stiff competition

Consumers line up in an Apple store in Shenzhen, South China's Guangdong Province on September 22, 2023, as Apple's latest iPhone 15 series and watches start their first day of in-store pickup. Photo: VCG

Consumers line up in an Apple store in Shenzhen, South China’s Guangdong Province on September 22, 2023, as Apple’s latest iPhone 15 series and watches start their first day of in-store pickup. Photo: VCG

Apple is witnessing a substantial drop in iPhone shipments in China, with a 33-percent reduction in February from the previous year, as the US company faces rising competition from Chinese domestic rivals such as Huawei and Xiaomi.

The tech giant shipped around 2.4 million smartphones in February in China, marking the second consecutive decline of the year, extending the trend of weakening demand for the company’s flagship device in its most crucial overseas market.

Since the release of the latest iPhone in September last year, iPhone sales in the China market have remained stagnant. In January, iPhone shipments totaled around 5.5 million units, declining approximately 39 percent year-on-year, according to data from the China Academy of Information and Communications Technology (CAICT).

It’s still notable that China`s overall smartphone market shrunk by a third in February, CAICT data showed, partly impacted by the later timing of the Chinese New Year this year. 

With a total shipment of only 2.4 million units for foreign smartphone brands last month, Apple accounts for most of those shipments, as the only overseas player with a meaningful market share, according to Bloomberg reports.

Apple’s struggle began with Huawei’s resurgence in the premium 5G smartphone segment back in September last year. Following the release of the Mate 60 series, Huawei has seen a surge in domestic market sales.

Despite facing unjustified bans from the US government, Huawei is still a formidable competitor in the Chinese market. This, along with the slowdown in the latest iPhone shipments, led the company to offer rare discounts on its products in January.

Analysts are optimistic about China’s market growth in the second half of the year, but warn of a possible slowing trend as Chinese smartphone makers aggressively promote smartphones with advanced AI capabilities, according to Bloomberg.

Amid the shipments downturn and the stiff competition in China, Apple is ramping up efforts in the Chinese smartphone market. Apple CEO Tim Cook visited China last week and stressed China’s critical role in its supply chain due to China’s rich talent resources and strong innovation vitality.

In 2023, Apple held a 17.3-percent market share, becoming China’s top smartphone brand for the first time. The company has reportedly sought a partnership with Chinese search engine Baidu to provide generative AI solutions in its devices sold in China. 

Global Times

US should play a responsible role in ensuring stable, smooth new-energy supply chain: FM spokesperson

The manufacturing line of a NEV factory in Southwest China's Chongqing Municipality Photo: VCG

The manufacturing line of a NEV factory in Southwest China’s Chongqing Municipality Photo: VCG

Ensuring a stable and smooth global supply chain serves the interests of all, and is a responsibility that should be shared by all parties, including the US, a Chinese Foreign Ministry spokesperson said on Thursday, in response to comments made by US Treasury Secretary Janet Yellen on Chinese new-energy products.

A Chinese expert in China-US trade said that China’s edge in new-energy industries are the result of Chinese entrepreneurship, massive investment in tech innovation and the country’s comprehensive manufacturing strength, as well as the choice of the market, which US officials should respect.

On Wednesday, Yellen said she intended to warn Chinese officials in “a constructive talk” about the negative effects of subsidies for China’s clean energy products, including solar panels and electric vehicles (EVs), during a planned visit to China, according to a report by Reuters. 

Yellen reportedly said China’s “overproduction” of solar panels, EVs and lithium-ion batteries have “distorted” global markets and hurt jobs in other industrial and developing economies.

In response, Foreign Ministry spokesperson Lin Jian said at a routine press conference on Thursday that China firmly opposes trade protectionism and unilateral bullying.

The global industrial and supply chains are shaped and developed by the laws of market and business choices combined, Lin pointed out, noting that the vigorous development of China’s new-energy sector relies on technological innovation and excellent quality formed amid global market competition, rather than relying on so-called subsidies for support and protection.

“Speaking of subsidies, I would like to point out the US is leveraging the US Inflation Reduction Act (IRA)’s tax credit policies to distort fair market competition and disrupt the global industrial chain, violating relevant rules of the WTO and the principle of market economy,” Lin said. 

“China firmly opposes such acts by the US and urges the US to correct its discriminatory industrial policies,” said Lin.

Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Thursday that any mismatch in supply and demand can only be addressed through global industry dialogue and cooperation. 

Zhou urged the US side to observe the laws of market, refrain from unilateral control measures under the pretext of protecting national security, and lower tariffs on Chinese goods.

In mid-March, Donald Trump, now presumably the Republican Party US presidential candidate, threatened that he would hit cars made in Mexico by Chinese companies with a 100-percent tariff, according to Bloomberg.

In what analysts say is a “reasonable, legitimate and well-founded” move, China lodged a dispute complaint at the WTO against the US over discriminatory subsidies on new-energy vehicles (NEVs) under the US IRA on Tuesday.

The move not only aims to safeguard the interests of Chinese new-energy vehicle companies and a fair competitive environment for the global NEV industry, but also to firmly defend the rules-based multilateral trading system and resolutely maintain the stability of the global NEV industrial chain and supply chain, a spokesperson of the Ministry of Commerce said on Thursday. 

In 2023, China accounted for around 60 percent of global electric car sales, according to the International Energy Agency (IEA). China doubled solar panel capacity in 2023, and wind power capacity rose by 66 per cent from a year earlier, the IEA estimated.

China is a current leader in new-energy industry. In 2023, its export value of solar panels, electric vehicles and lithium-ion batteries totaled 1.06 trillion yuan, increasing 29.9 percent from 2022, customs data showed.

China’s new-energy industry deserves to be rewarded as their successes stem from risky endeavors that aim to transform the world into a green, better living place, Zhou said.