China Sets to Assist Auto Sector to Recover from Covid-19 Impact
Under the impact of the Covid-19 epidemic this spring, in the two major auto manufacturing centers in Northeast and East China, the vehicle assemblies which used to work around the clock are forced to sit idle in the middle of strict lockdown. In fact, China’s auto industry is experiencing an unprecedented supply chain crisis.
Automobile is a pillar industry of China’s economy. Since March, the major production areas of China’s auto industry, such as Jilin and Shanghai, have been locked down due to the fight against the epidemic. In addition to the shutdown of factories, logistics are also blocked. Factories cannot purchase necessary materials or deliver products. These challenges are affecting the auto industry across the country. Both the government and enterprises are actively coordinating measures to get the industry back on track. At the same time, the working model of the supply chain requires innovation after the epidemic.
More Friendly Measures and Regulations Should be Introduced to Safeguard the Welfare of the Flexibly Employed
Flexible employment helps ease job pressure and broaden employment channels for individuals. In the meantime, this new form of employment also helps companies to reduce costs and improve efficiency. But flexible employment has also brought unprecedented challenges to traditional labor relations, and corresponding laws and policies need to be introduced to deal with them.
In academic circles, flexibly employed job seekers include freelancers such as writers, independent designers, and livestreaming anchors. This kind of jobs may not conform to the traditional mentality of people seeking stable careers, but they show that the employment concept of the younger generation has undergone profound changes. They want to have more flexible working hours, do what they love, and earn some money. Also, flexible employment has brought unprecedented challenges to traditional labor relations, exposing many problems, which need to be solved by the introduction of friendly regulations and policies.
Fluctuation of RMB Becoming New Norm, Posing Risks for China’s Export Industry
For three consecutive days, the RMB exchange rate continued to decline. Since June 2020, the CFETS RMB exchange rate index released by the China Foreign Exchange Trade System has continued to fluctuate and rise, with an increase of more than 16% so far, putting pressure on the profits of export traders. A senior securities practitioner told Caijing that from June 2020 to early 2021, the appreciation of the RMB is mainly manifested in the appreciation of the bilateral exchange rate against the US dollar, which heavily affects the financial situation of Export companies. The two-way fluctuation of the RMB exchange rate has become new norm.
Since 2020, the SAFE and other relevant departments have made a lot of efforts to urge enterprises to establish a risk-neutral concept and support enterprises to manage exchange rate risk. Recently, the regulatory authorities announced new policies to improve financial services and increase support for the real economy.
Some Major Sports Brands are Facing Backlash in China
The “golden era” of Nike and Adidas in China now appears to come to an end. An enterprise can seek follow-up development only if it stands firm first.
Every March and April are the days when sports brands swarm to release their financial reports. Despite the impact of the COVID-19 epidemic, the performance of various companies in 2021 has clearly improved. Several domestic sports brands have made impressive progress. However, also in the Chinese market, the performance of foreign brands in 2021 is worrisome, especially the former leading brands like Nike and Adidas. Judging from the annual report, Adidas’ global revenue growth rate reached 15%, but only 3% in greater China. Changes in market share seem to be more convincing. The market share of the above two companies in China in 2021 dropped from 43% to 40%. Why Nike and Adidas suffered setbacks in China is a question worth pondering. Regardless of the impact of the epidemic, the most effective development path for Nike and Adidas is digital transformation.
