Chinese Economics Thread
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2023-09-18 09:02:52Global Times Editor : Li Yan
Some domestically produced products which offer quality assurances have become extremely popular, with certain brands even selling out, while netizens engage in heated discussions and offer practical suggestions in support of domestic products.
The domestic brand Fenghua, also known as Bee & Flower, is specialized in producing shampoo, conditioner, as well as skincare and cleansing products. Fenghua has launched three new cleansing packages priced at 79 yuan ($10.79) through its live streaming platform, and released a video stating, "whether salaries increase or not, Fenghua will not raise prices." It has been called the "most down-to-earth business battle" by netizens.
The topic "Fenghua Business Battle" topped the Sina Weibo hot search list on Wednesday, with the domestic brand officially announced that due to insufficient production capacity, current product lines are sold out.
On the same day, Fenghua's flagship store on major digital platforms rose by 500,000 followers in one day, while its live broadcast room also displayed the words "rational consumption."
Additionally, more domestic brands such as HongXing Erke, Shanghai Baiyu Toothpaste and Shanghai Sulfur Soap all announced 79-yuan package a day later.
Also on Thursday, the children's skincare brand Yumeijing registered accounts on short video platforms Xiaohongshu and Douyin overnight, with netizens jokingly said that these brands finally joined the internet. According to media reports, its first live streaming sales exceeded 1 million yuan.
These came after makeup and beauty influencer Li Jiaqi made "inappropriate remarks" on September 10 targeting a netizen who complained the eyebrow pencil from a home-made brand Huaxizi priced at 79 yuan was "too expensive."
In addition to their "business battle," domestic brands' "team-building style" live streaming has also attracted customers' attention.
According to media reports, when entering the livestream rooms for a number of domestic brands, one can see a variety of domestic products neatly arranged in front of the camera. After the products of its own brand in the livestream room are sold out, the host starts to introduce products from other domestic brands.
On Saturday, the official account for Fenghua said after selling out that it would help promote domestic brands that missed out on the business battle. Many official accounts of domestic brands such as Malawangzi and Luhua left comments hoping to get help. Netizens commented that Fenghua has sounded the call for the gathering of domestic brands.
Other netizens suggest that a chain of domestic products supermarkets could be established, especially in rural areas. When more people realize that buying domestic products is a patriotic act, they will definitely be willing to do so.
According to media reports, the popularity and sold-out status of many domestic products is due to their successful tapping into current market demand positioning themselves as being cost-effective and affordable, commentator Xie Xiaowen said.
Fenghua has received no government penalty in its 38 years of operations, indicating that the enterprise does not relax quality because of low prices, according to the Economic Daily.
In addition to recent popular Chinese brands, others like Huili shoes and Refosian silks and satins have long been well-known both domestically and internationally, due to their exquisite craftsmanship and superior quality.
Regarding the Huaxizi incident, some netizens commented that instead of spending money on marketing, it is more important to focus on ensuring high quality, which is the fundamental aspect of developing domestic products.
He is probably using PPP instead of nominal GDP. Otherwise no way China gets Poland's level of GDP per capita and becomes bigger than US and EU GDP combined.
One thing I don't understand about PPP figure about China. If you divide China's PPP GDP by Nominal, that is 33/19 trillion. You have a ratio of 1.76. But for India that Ratio is 13/3.7 trillion = 3.5. This ratio should be the difference in price between Country A and US. So, that means prices in China is 1.76 times cheaper than prices in US. But for India its 3.5 times Cheaper.
Is China really that much more expensive than India? Or is the PPP GDP of India exaggerated? What is opinion of people who have traveled both countries?
I've noticed that for countries with similar nominal GDP per capita, the PPP to nominal ratio for China is among the lowest (if not the lowest).
2022 Nominal GDP per capita
China 12,720
Argentina 13,686
Bulgaria 13,773
Malaysia 11,972
Mexico 11,091
2022 PPP GDP per capita
China 21,476
Argentina 26,505
Bulgaria 33,582
Malaysia 33,434
Mexico 21,512
PPP / Nominal ratio
China 1.688
Argentina 1.937
Bulgaria 2.438
Malaysia 2.793
Mexico 1.691
broadsword
Brigadier
What is the premier local brand of dishwashing detergent?
If China has already peaked, why are Black Rock managers studying Xi Jinping thoughts instead of Bidenomics?
I found this, dunno if that helps:
Could be the relatively low estimated share of informal economy in China as compared to the likes of Argentina. That would impact the reported GDP size as well as PPP adjustments thereafter.
A lot of GDP PPP calculations have room for mystery factors. The World Bank's own figures for India have a variance of 70% between GDP PPP calculated from their conversion factor and the GDP PPP they give. Even including the World Bank estimated 20.1% informal sector % of GDP only brings the error rate down to 43%. I quite doubt those informal sector figures given 92% of Indian employment is informal. 20.1% is close to that of Germany (15.1%). I've seen 43.1% for India mentioned elsewhere and that would bring error rate down to 16%. Still seems like there's a lot of room for politically motivated adjustments.
The ICP also seems to release only once every 6 years and all PPP estimates between then are up to each individual organization to determine. The last ICP report was for 2017 and released in 2020, so if that keeps up maybe we'll get the 2023 edition in 2026.
There's also the differences in included items for GDP calculation between countries.
If you just look at Big Macs, for which we have global statistics, then the Chinese PPP/nominal conversion factor seems justified while India's is a bit inflated
US/local Big Mac price:
China: 1.6
India: 2.2
Argentina: 0.9
Brazil: 1.2
Thailand: 1.5
I would be shocked, shocked!! If western economists calculating China's PPP conversion factor are nothing but completely impartial and totally accurate