CiCM 9th August 2023

NEWS IN CHINA

China's consumer prices dropped by 0.3% year-on-year in July, marking the first decline since February 2021, according to official data from the National Bureau of Statistics. Food prices were a major contributor, with a 1.7% dip in July compared to a 2.3% rise in June. Notably, pork prices fell by 26% in July after a 7.2% decrease in June. Meanwhile, the price of fresh vegetables declined by 1.5%, and industrial consumer product prices were down by 1.9%. However, on a month-on-month basis, July's Consumer Price Index (CPI) increased by 0.2%, an improvement from the 0.2% decline in June. The core CPI, which excludes volatile food and energy prices, rose by 0.8% year-on-year in July, up from a 0.4% rise in June. The producer price index, which gauges factory-gate prices, also fell by 4.4% in July year-on-year, continuing the declining trend in the last 10 months. Analysts argued that reforms such as more public expenditure, tax cuts, and a decrease in interest rates are required to promote consumption.

China has overtaken Japan as the world's largest vehicle exporter, with a significant surge in shipments attributed to the rising popularity of new energy vehicles (NEVs). In the first half of the year, Chinese auto manufacturers exported 2.34 million vehicles, up almost 77% year-on-year, while Japan lagged at 2.02 million units, up 17%. China's NEV exports, including EVs and plug-in hybrids, totaled 534,000 units in the same period, accounting for around 23% of the country's total vehicle exports. Notably, Tesla, BYD, and SAIC are prominent players in this trend, with SAIC aiming for over 1.23 million total exports this year. Chinese automakers' expansion into markets like Europe, Russia, and Southeast Asia has further boosted overseas sales.

China successfully launched the HJ-2 06 satellite for disaster monitoring on Wednesday. The satellite was carried into orbit by a Long March-2C rocket that lifted off from the Taiyuan Satellite Launch Center in Shanxi Province at 6:53 a.m. Beijing Time. The newly launched satellite shares the same configuration as the HJ-2 05 satellite already in orbit, offering two image modes with spatial resolutions of 5 meters and 25 meters. The satellite's primary role will be disaster monitoring, including floods, typhoons, and landslides. It will provide essential data support for emergency management, ecological environments, natural resources, water conservancy, agriculture, and other sectors. This launch marked the 482nd flight of the Long March carrier rockets.

Since its inception in 2017, North China's Shanxi Province has managed 700 China-Europe freight train journeys, connecting 13 countries along the Belt and Road route. Recently, the 700th train departed from Zhongding logistics park loaded with products such as ceramic tableware, car tires, and glassware. The train, carrying 77 containers and approximately 1,814 tonnes of cargo, will traverse Horgos port in Xinjiang Uygur Autonomous Region before reaching destinations like Kazakhstan in around 10 days. The province's high-level opening-up strategy has led to the expansion of goods transported via these trains, encompassing diverse categories like medicines, ceramics, and local specialty items, beyond the initial offerings of wheels and stainless steel.

In response to the severe flooding caused by typhoon "Dusuri" in the Haihe River Basin, the Ministry of Finance and the Ministry of Water Resources have promptly allocated 1 billion yuan in advance. This fund is intended to provide compensation to individuals affected by the flooding, particularly those utilizing the national flood storage and detention areas in Tianjin, Hebei and Henan. These areas, which successfully stored 1.847 billion cubic meters of floodwater, played a crucial role in alleviating flood pressure downstream. The compensation aims to assist people in recovering from losses incurred in crops, professional breeding, economic forests, housing, and household agricultural production machinery. The goal is to help them swiftly restore normal production and living conditions.

China has issued its first national guidelines for developing industrial standards in the hydrogen energy sector, covering production, storage, transport, and utilization. While China is a global leader in hydrogen production and consumption, the guidelines aim to enhance the use of renewable sources, as less than 0.1 percent of the produced hydrogen is currently renewable. Hydrogen's low carbon emissions and versatile applications align with China's clean energy goals and carbon neutrality targets. The guideline outlines key tasks for domestic and international standardization in the next three years, with the goal of strengthening China's hydrogen energy industry. It complements the 2021-2035 plan for hydrogen energy development, aiming to establish a robust hydrogen energy ecosystem by 2025 and significantly increase renewable hydrogen's contribution by 2035. The China Hydrogen Alliance predicts that China's hydrogen energy market will grow to 43 million tonnes by 2030, experiencing almost a 30-fold increase in market scale. During this period, green hydrogen is expected to rise from 1 percent of energy in 2019 to 10 percent.

SOCIAL MEDIA CHATTER IN CHINA

Netizens embrace sensible shoes in step with the gender equality movement: The Barbie movie has sparked a new trend in China where consumers are shifting towards comfortable footwear over high heels. The character's choice of sensible Birkenstock shoes in the film has led to a surge in sales for the brand, inspiring women to embrace what's being called the "ugly but comfortable" shoe trend. The film's success, earning $1 billion globally with a significant popularity even in China, aligns with rising awareness of gender equality. Women now constitute nearly 80% of the film's viewers. This shift in footwear preference has also boosted the popularity of Crocs and "shoe accessories." Observers note that embellishing perforated shoes with decorations adds elegance. One online commentator highlighted the discomfort caused by high heels, expressing a desire for Birkenstocks instead. Another noted the ever-changing nature of shoe fashion, citing the popularity of pairing perforated shoes with long socks. A commenter emphasized the need for embellishments to enhance these shoes, comparing them to rustic houses requiring decoration. The discourse reflects the ongoing shift between fashion and rustic styles, The trend highlights a rejection of patriarchal symbols, coinciding with a broader global movement toward gender equality.

INDIA WATCH

China has introduced its first national guidelines for the hydrogen energy industry supply chain standards, aiming to advance industry development through standards. The guidelines establish a standard system for hydrogen energy production, storage, transport, and usage. This move bolsters China's new energy and green development sectors, complementing the 2021-2035 hydrogen energy development plan. China currently leads global hydrogen production, generating 33 million tons annually. On the other hand, the International Energy Agency (IEA) believes India has the potential to become a "superpower" in green hydrogen production, driven by its abundant renewable capacity. The IEA's executive director, Fatih Birol, stated that India cannot afford to miss the opportunity to lead in green hydrogen. While the current cost of green hydrogen production is higher than that of hydrogen from hydrocarbons, scaling up production and support from governments and multilateral agencies could lead to cost reductions. India's rapid strides in clean energy and transition are seen as key factors for its potential to be a leader in green hydrogen. Birol also mentioned that India is expected to surpass China as the largest driver of global oil demand growth but expressed hope for growth in the electrification of transportation to slow down oil demand in the future. Recently, India and Saudi Arabia have initiated talks for a potential partnership in green hydrogen projects. Discussions involve investment opportunities, technology exchange, and joint research and development efforts. India's National Green Hydrogen Mission aims for a minimum annual production capacity of five million metric tonnes of green hydrogen by 2030 using renewable energy. Additionally, Larsen & Toubro (L&T) plans to invest around $4 billion over the next five years in the clean energy segment, with a focus on constructing 2-3 million tonnes of green hydrogen and ammonia capacity. L&T intends to produce green hydrogen using electrolyzers powered by renewable energy from ReNew Power, with plans to extend the project to other refineries.

Prepared By

Akshita Pant

Akshita Pant is a post-graduate research scholar with a degree in Masters in International Relations from Amity University. Her expertise lies in the field of geopolitics, particularly focusing on China and East Asia. With a keen interest in India's foreign policy, national security, and culture, with a deep passion for understanding the complexities of international relations.