Apple Expands China Suppliers 🍏 Domino's China Dominates 🍕Inbound Tourism Soars 🌎

2024-05-19 | subscribe | homepage | read online

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 🚀 Headlines

Apple increased its China headquartered suppliers by 10%, and manufacturing sites in 2023 (link)

Apple increased its China-headquartered suppliers and Chinese manufacturing sites in 2023 while using fewer suppliers from Taiwan, the US, Japan, and South Korea. Apple’s official list of suppliers covers 187 companies. Chinese suppliers have formed the largest camp of Apple suppliers since 2020, and their number increased to 52 last year from 48 in 2022. The number of manufacturing or development facilities in China—including those owned by domestic and foreign companies—grew by 10 to 286. Around 84% of Apple’s suppliers had facilities in China last year.

The number of Apple suppliers operating in Vietnam surged 40% to 35 last year, while the number in Thailand grew by about a third to 24. The number of suppliers in India remained at 14. A growing footprint in India and Southeast Asia does not necessarily translate to a reduced reliance on China. 37% of the 35 suppliers in Vietnam are from China and Hong Kong, including AirPods assemblers Luxshare and Goertek, and iPad assembler BYD.

Large capacity of Chinese car factories is due to the shift from Internal Combustion Engine (ICE) cars to New Energy Vehicles (NEVs) (link)

China is expected to make 27mn passenger vehicles this year, despite annual production capacity for 48.8mn units, according to Goldman Sachs forecasts. This is mostly driven by a years-long structural shift in Chinese car sales, with a boom in electric vehicles and a massive fall in sales of internal combustion engine (ICE) cars. Exports are expected to rise 25 percent this year to more than 5.3mn cars.

According to Goldman Sachs, the capacity utilization rate for plants producing ICE cars in China will decline from 54 percent of a factory’s capacity being used this year to 48 percent in 2030. For EVs, capacity utilization will improve from 58 percent this year to about 80 percent by the end of the decade. Does the current overcapacity argument hold? “If exporting 12 percent of Chinese-made EVs is called overcapacity, then what about Germany, Japan and the US, who export 80, 50 and 25 percent, respectively, of their automobiles?”

Domino's Pizza China achieves remarkable expansion and dominates global sales rankings (link)

At the beginning of May, DPC Dash, American Domino's Pizza's exclusive master franchisee in the China mainland, expanded its presence by entering three new cities: Taizhou, Huizhou, and Jinhua in one week. The opening of these locations expands the rapidly growing DPC Dash store network across 33 cities in China. DPC Dash operates over 850 stores in China, and aims to hold its 1000th grand opening in the fourth quarter of 2024. The response from customers has propelled DPC Dash to achieve another milestone, as the company now accounts for all of the top 20 spots for first 30-day sales among Domino's stores globally.

56% of Japanese firms in China plan to invest the same or more in 2024 compared to 2023 (link)

Twenty percent of the 1,741 Japanese firms in China polled by the Japanese Chamber of Commerce and Industry in China between mid-March and mid-April said they increased their investment in the country in the three months ended March 31, while 24 percent claimed their investment in China remained unchanged in the period. The two figures are 1 percentage point and 2 percentage points higher than in the fourth quarter of last year. For the whole year, about 56 percent of Japanese firms said they would maintain or increase their investment in the country. Some 31,300 Japanese companies have operations in China, the highest number among countries worldwide.

Panasonic to pour USD167 million into China expansion in 2024 (link)

Panasonic Holdings, a Japanese electronics giant, will invest CNY1.2 billion (USD167 million) in China this year to accelerate its expansion. The local arm has poured money into 18 factories since 2019. A factory in Zhejiang province's Jiaxing, located near Shanghai, with an investment of CNY440 million (USD61 million), started operations last month. Exports make up at least a quarter of Panasonic CNA's revenue. The two biggest export segments are home appliances, accounting for 30 to 40 percent of the total, as well as building solutions such as heating and air conditioning, which have a 30 percent share.

International tourists to China up 300% in the first quarter of 2024, China opens further allows visa-free entry to foreign tourist groups on cruise ships (link)

In the first quarter of 2024, inbound tourism showed strong signs of recovery, the number of foreign visitors to China had grown more than threefold compared to the same period in 2023. Effective May 15, 2024, China implemented a visa-free policy for foreign tourist groups entering via cruise ships. Under this policy, foreign tourist groups, comprising two or more individuals, who travel by cruise ship and are organized by Chinese domestic travel agencies, can now enjoy visa-free entry as a cohesive group at cruise ports in 13 cities along the Chinese coast. These cities include, Tianjin, Shanghai, Qingdao, Guangzhou, Shenzhen, Sanya.

Chinese investment projects in Germany rose by 42% last year, Chinese companies ranked 3rd with 200 projects (link)

The number of Chinese investment projects in Germany hit 200 in 2023, up 42 percent from the year before, reaching the highest value since 2017. Chinese companies ranked third in terms of the number of investment projects in Germany, behind the United States with 235 and Switzerland with 202. There was a sharp rise in investment by Chinese firms in the renewable energy sector, accounting for 20.5 percent of the total project count, which was more than three times the figure in 2022.

The machinery manufacturing sector accounted for 14.5 percent, a 52 percent gain, while electronic products made up 11.5 percent, double that of 2022. The most prominent areas of business engagement for Chinese companies were marketing and sales, accounting for 45 percent of the total. Research, development, and production tallied 22 percent, while the establishment of European headquarters worked out at 12 percent.

🎁 Bonus Stories

Oil begins to flow through China-backed longest African oil pipeline making Niger fastest growing African economy in 2024 (link)

The first oil from the Niger-Benin pipeline has successfully reached the port town of Sémè Kraké in Benin. Spanning 1,950km, this crude pipeline, which connects Niger’s Agadem oil fields to the Atlantic Ocean, is the longest of its kind on the continent and is operated by China National Petroleum Corporation (CNPC). With a capacity of 110,000 barrels per day, it is poised to transform Niger’s oil sector. Thanks largely to the successful operation of the project and the anticipated large-scale oil production and exports Niger is expected to be Africa’s fastest-growing economy in 2024, with a GDP growth forecast of 12.8%.

China signed AEO deals with Burundi and Iceland to ease customs clearance (link)

The move means that Authorized Economic Operators (AEO) - certified companies in China, Burundi, and Iceland will enjoy priority clearance, more relaxed import inspection, and customs liaison services. The deal penned with Burundi is China's third in Africa after Uganda and South Africa, raising the number of such tie-ups with participants in China's Belt and Road initiative to 36. China has signed these types of agreements with 28 economies, including Singapore, the European Union, and New Zealand, covering 54 countries and regions.

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