Reports

    China News Brief
    June 13, 2024

    EU to impose up to 38.1% duties on Chinese EVs, risking retaliation; Dior faces court over Chinese-owned suppliers’ alleged worker exploitation; Rolex hikes prices in China amid rising gold costs, demand.
    Aerial view of a large number of vehicles waiting for shipment at Lianyungang Port on May 7, 2023 in Lianyungang, Jiangsu Province, China. Image: Getty Images

    EU to impose up to 38.1% duties on Chinese EVs, risking retaliation#

    The European Commission will impose extra duties  of up to 38.1% on Chinese electric vehicles starting in July, in response to excessive subsidies, risking retaliation from Beijing. This move follows the US’ decision to quadruple duties on Chinese EVs to 100%. The new EU tariffs will significantly increase costs for Chinese carmakers like BYD and SAIC. European automakers, facing competition from cheaper Chinese EVs, see this as a shift in EU trade policy to protect its market. Shares of European carmakers fell due to fears of Chinese retaliation. The outcome depends on whether Beijing retaliates or negotiates a solution.

    Dior faces court over Chinese-owned suppliers’ alleged worker exploitation #

    An Italian subsidiary of the French luxury brand Dior has been placed under court administration  following allegations of worker exploitation among its suppliers. A Milan judge appointed an external director for Manufacturers Dior SRL after an investigation into four of its Chinese-owned suppliers revealed mistreatment of workers, including illegal immigrants and those lacking required documents. Inspections by Italian police found that several of the 32 staff were living and working in substandard conditions with continuous production cycles. This incident follows similar judicial actions against other luxury brands in Italy, such as Armani, also accused of exploiting workers.

    Rolex hikes prices in China amid rising gold costs, demand#

    Rolex recently increased prices  on nearly 300 watch models in China by 1% to 4%, with the highest hikes for gold, rose gold, and white gold models. For example, the 18K white gold Oyster Perpetual Cosmograph Daytona rose from 268,300 RMB ($36,996) to 279,500 RMB ($38,540). This second price increase in six months is due to a 17% rise in international gold prices. Rolex aims to maintain profitability and meet consumer demand by strategically adjusting prices. In 2023, Rolex achieved 10.1 billion Swiss francs ($8.8 billion) in revenue, capturing a 30% market share. The brand is also expanding its production capacity with a new facility in Bulle, Switzerland.

    Vivienne Westwood plans Hong Kong IPO within three years#

    Carlo D’Amari, CEO of British fashion brand Vivienne Westwood , revealed in an interview that the brand is initiating plans to go public, with an expected listing in Hong Kong within three years. D’Amari noted that the focus of the global fashion retail market has shifted from the US to China. He anticipates Vivienne Westwood’s sales to reach approximately 205 million euros ($223.45 million) by the end of 2024, a significant increase of about 90% compared to the previous year. In recent years, Vivienne Westwood has accelerated its expansion in the Chinese market, opening stores in cities such as Beijing, Shanghai, Chengdu, Hefei, Shenzhen, Wuhan, and Tianjin.

    China issues draft rules to boost cross-border e-commerce#

    On June 11, China issued draft rules to promote the construction of overseas warehouses and expand cross-border e-commerce businesses , which have become crucial to its foreign trade, according to the Chinese commerce ministry. Companies like Shein, Temu, and AliExpress, which ship made-in-China products globally, have seen rapid growth. This expansion offers new growth opportunities for firms previously focused on the domestic market, which is currently hampered by a macroeconomic slowdown, a prolonged property crisis, and income insecurity. The ministry’s announcement includes improving cross-border data management, optimizing export supervision, and supporting financing channels to help these businesses “go global.”

    Beijing drafts livestreaming sales compliance guidelines#

    The Beijing Municipal Market Supervision Bureau today drafted the Beijing Live Streaming Sales Compliance Guidelines  (Draft for Public Comment) and is now seeking public feedback. The draft guidelines propose that livestreaming sales personnel should consciously oppose undesirable phenomena such as prioritizing traffic, distorted aesthetics, fan group chaos, materialism, and food waste. They should not indirectly advertise health supplements by introducing health and wellness knowledge, nor should they mislead consumers with false claims like “the lowest price on the internet.” Additionally, in addition to adhering to relevant regulations, virtual images synthesized using artificial intelligence technology must also “follow the rules.”

    Chinese tourists drive 125% surge in Asian bookings to Germany for Euro 2024#

    As anticipation builds for the Uefa Euro 2024, Trip.com Group, a leading travel service provider, reports a 125% increase in bookings from Asian travelers heading to Germany . This surge is spearheaded by Chinese tourists, showcasing a remarkable 132% increase, as they flock to experience Europe’s rich football culture and vibrant city life. Germany, with its deep-rooted football heritage, is set to host the Euro 2024 starting June 14. Trip.com’s data underscores a robust trend in sports tourism, particularly from Asia, emphasizing an escalating enthusiasm for both football and international travel. Fans from countries such as China, Japan, South Korea, and various Southeast Asian countries plan to visit Germany this summer. Key cities like Frankfurt, Munich, and Cologne are top destinations, with Frankfurt leading in booking volumes. This influx of visitors is expected to inject significant revenue into Germany's local economies, particularly benefiting the hospitality and service sectors.

    Miu Miu taps Liu Haocun to bolster brand presence in China#

    Italian fashion brand Miu Miu has announced actress Liu Haocun  as its new brand ambassador. As of now, Liu has over 3.31 million followers on Sina Weibo. Other Miu Miu brand ambassadors in China include Lexie Liu, Qiu Tian, Zhao Jinmai, and Lim Yoon-ah.

    Chanel to open second Shenzhen store at MixC World#

    According to sources, Chanel  will open its second store in Shenzhen at MixC World, with the project developer having already issued a pre-tender announcement. The new store will be located at the core of MixC World’s atrium, covering an area of approximately 1,300 square meters and spanning three floors. According to the pre-tender announcement, construction is scheduled to start on July 15 this year and be completed by November 30. If Chanel confirms its location, MixC World in Shenzhen will house luxury brands including Hermès, LV, Chanel, Dior, and Gucci.

    Converse, Feng Chen Wang unveil new apparel collection#

    Converse and Feng Chen Wang continue their collaboration with a new apparel collection , following the 2-in-1 Chuck 70 shoes. This collection blends classic sportswear elements with Wang’s deconstructionist style, featuring tops, polo shirts, T-shirts, vests, cargo pants, dresses, and jackets. Highlights include a stretchy fabric dress with an exaggerated side slit, sneaker-inspired dresses and nylon jackets with unique drawstring designs, and two-in-one detachable cargo pants. The collection reinterprets Feng Chen Wang’s signature multi-layered designs, asymmetric cuts, and stitching craftsmanship.

    Nike, Tsinghua University launch sustainable leadership program#

    Nike and Tsinghua University recently announced their renewed collaboration  in the field of sustainability by officially launching the Tsinghua-Nike Sustainable Leadership Program. This initiative aims to cultivate future advocates and leaders in sustainable development, supporting the achievement of the “dual carbon” goals. Following their joint launch of the Carbon Neutral Industry-Academia-Research Integration Program during the sixth China International Import Expo, this project represents another deep cooperation in sustainability between Nike and Tsinghua University. Scheduled to commence in September, the program will leverage the strengths of both parties, attracting innovative and leadership-potential students from various departments at Tsinghua University to form a closely-knit, open, and inclusive community.

    Cartier opens first store in Jiangxi province#

    Cartier  recently opened its first store in Jiangxi province at Nanchang Wushang Mall, offering a full range of jewelry and watches. Local consumers expressed excitement, viewing it as recognition of the city’s high-end consumption potential. Despite being a blank spot for luxury brands, Jiangxi is now attracting interest, though many brands remain cautious about rapid expansion due to cooling industry conditions. In 2024, LVMH’s Q1 revenue fell by 2%, and Cartier’s parent company Richemont saw a 1% decline. As luxury brands focus on stability, they are prioritizing expansions in major cities’ landmark shopping centers. However, they continue to open new stores in select non-first-tier cities, targeting high-net-worth individuals rather than the broader middle class.

    ‘996’ work culture pushes young Chinese to smaller towns#

    Reflecting a broader trend, many young Chinese professionals  are leaving the high-pressure “996” work culture of big cities like Shanghai and Shenzhen for smaller towns, driven by the high cost of living and a slowing economy. The backlash against long working hours has intensified, exemplified by public outrage over Baidu executive Qu Jing’s controversial comments on work expectations. While the urban-rural gap in amenities has narrowed, some analysts warn that this shift might be temporary, with workers likely returning to larger cities when the economy improves.