“The Beijing Headache: Price Wars, Unemployment, and Weak External Demand Manupacting Sector Data Data from China Surprised to the Upside this Week, Raising Expectionations That Beijing Will The RatingDog China General Manufacting PMI UNEXPECTEDLY ROSE FROM 49.5 IN JULY TO 50.5 IN AUGUST, CRUCILY ABOVE”, – WRITE: www.fxempire.com
Rising Costs and Intense Competition Continue to Affect Profit Margins Across The Industrial Sector. Industrial Profits Decklined 1.7% (JULY) Year-on-Year After Droping 1.8%
EV Price Wars and Market Competition Price Wars Have Strained Profit Margins, Forcing Firms to Manage Costs and Reduce Staffing Levels. China’s Unemployment Rate Increated From 5% in June to 5.2% in July. Record Graduate Numbers Added to the Labor Market Strain. Youth Unemployment Soared 17.8% in July, Up from 14.5% in June.
China Beige Book Recently Quoted The Media Regarding the Ongoing Price War Among Electric Vehicle (EV) Manufacturars, Stating:
“China’s Campaign to Stamp Out A Ferocious Ev Price War Sems to Be Having Limited Effect, W/All of the Nation’s Top 20 Auto Brands either Keping Discounters. July. ”
Despite Intense Competition, Chinese Ev Makers Have Reported Impressive Delivery Numbers in August. Accorging to cn wire, nio delvered 31,305 vehicles, up 55.2% year-on-year (yoy). Meanwhile, Xiaopeng Motors Reportedly Delivered 37.709 UNITS, UP 169% YOY, WITH SEPTEMBER DELIVERESE EXPECTED TO BREAK 40,000.
“The only Japanese and Korean Car Brands that Will Survive The China OnSlaughhht Will Likely Be Toyota, Honda, Kia/Hyundai, Vinfast. The Other Just Donwere Anae. Same Tire and Boring Products at Premium Prices. ”
Stifling The Competition would Give Chinese Automakers A Stronger Footold and Potentilly Ease Price Pressures.
Global Trade and Brics Unity Addressing External Demand, Price Wars, The Labor Market, and Domestic Consumption Are Key for Beijing.
India, IRAN, AND RUSSIA WERE AMONDDEES AT A China Summit As Beijing Bids to Weaken the Us Administration’s Influence on Global Trade Terms. Rebuilding Ties with India and Establishing A Trade Pact with Nations Affected by US Tariffs Could Develop A Broader Economy Independent of the Us.
China would Likely Benefit Significantly from Such A Development. Stronger Trade Ties with India, Russia, and Other Nations Could Address Weak External Demand, Ease Domestic Competition, Boost Output, and Support The Labor Market.
The Latest Developments May Bring Brics Greater Unity, A Potential Bugbear for President Trump. With US-CHINA Trade Talks Resuming Last Week, Trump’s Reaction to the China Summit and How Aggrieved Nations Respond Will Be Crucial.
India Recently Found Itself in the Us Administration’s Sights Over Oil Imports From Russia. In the lead-up to the US Presidential Election, Trump Threated 100% Tariffs on the Brics Nations, Warning:
“If You Abandon the Dollar, You’re Not Doing Business with The United States Because We Will Impose A 100 Percent Tariff on Your Goods.”
Crucially, A unified briques Bloc and Stronger Trade Ties Between China, India, Russia, and Other Nations Could Dampen the Effect of Further Tariff Hikes on Trade. China has a vested interest in brics bework a successful Economic Powerhouse.
China President XI Calls for Closer Ties On Monday, September 1, China President XI Jinning Spoke at the Summit. HE REPORTEDly Stated:
“We Will Always Stand on the Side of International Fairness and Justice, OPPOSE Hegemonism and Power Politics. We Need to Better Align Development Strategies and Promte And Markets, Improve Trade, Enhance Green Energy, Science, Tech Innovation, and AI COOPERATION.
Natixis Asia Pacific Chief Economist Alicia Garcia Herrero Recently Commented On China’s Outlook for Terms of Trade, Stating:
“Rerouting Will Be Much Harder in the Second Half. So that’s Going to Hit Chinese Exports Indirectly. SO, that’s what’s the Second Half is Tougher and the GOVERNMENT HAS BEEN PREPARING.”
Less Reliance on Demand from the US and Rising External Demand from Brics Nations Could Alter The Global Trade Landscape.
Mainland Stock Markets Hit Fresh 2025 Highs On Monday, September 1, Mainland China’s CSI 300 and The Shanghai Composite Index Gained 0.60% and 0.46%, Respectively, Striking New Year-To-Date Highs. Notably, The CSI 300 Hit The Highest Level Since March 2022, While the Shanghai Composite Neared a 10-YEAR HIGH.
Despite YTD Gains of 14.96% and 15.63%, The Two Indexes Remain Well Bell of Below All-Time Highs, Suggesting Room for Further Upside. Optimism over Beijing’s 5% GDP Growth Target, Bolstered By Beijing’s Stimulus Measures, Continues to Fuel Demand for Mainland-Listed Stocks.
Both Indexes Have OutperForMed the Nasdaq Composite Index (YTD: 11.11%) But Trail The Hang Seng Index (27.7%).
Trade Developments and Beijing’s Next Round of Policy Support Could Be Critical For Market Momentum.
Renewed US-CHINA Trade Tensions, Disagreements Across Brics Member States, and the Absense of Fresh Stimulus Could Deril The Bullish Sentiment.