China News This Week: Wednesday 30 March 2022

This week's news and trends in China:

 Health

The 2022 China Health Supplement Trends White Paper: Download the white paper with data, trends and case studies from China's health supplement category, many which are relevant to other industries.

 Chinese Consumers

Land of Opportunities: Why China Keeps Drawing More Foreign Investment: Foreign direct investment (FDI) into mainland China expanded 37.9% year on year to ¥243.7 billion in the first two months of this year. In US dollar terms, the inflow went up 45.2% to $37.86 billion. The strong growth built on a record high of ¥1.15 trillion ($260 billion) in FDI in 2021. On the other side, China’s yuan is under pressure amid 'unprecedented' capital outflows following the Russian invasion of Ukraine.

Authorities Suspend In-Person Tomb Sweeping: Shanghai called a halt to on-the-spot tomb sweeping at all cemeteries in the city through to April 5. This year's Qingming Festival, a traditional time for Chinese people to pay respects to their ancestors, falls on April 5, but the sweeping season began days ago. The annual festival is likely to be toned down across China. During last year's Qingming, 3.43 million people visited Shanghai's 54 cemeteries and columbariums.

Amid Pandemic and Unrest, Chinese University Students are Desperate for Death Education, Says Study: More than 56% of students surveyed said they needed death education, the same proportion as sought sexual education. The findings suggested the Covid-19 pandemic and other worldwide unrest might have changed attitudes towards death among China’s younger generation.

Digital China

China’s Instagram (RED) Wants More Male Users. It’s Using Women as Bait: Lifestyle platform Xiaohongshu (Little Red Book) used to be a rare safe space for Chinese women online. Around 140-180 million female users are active on the platform every month. In 2021, women were estimated to make up 90% of users. Then, the company began marketing itself to men as a place to meet "beautiful ladies." Its algorithms effectively fill the feeds of new male users with photos of young women. According to the platform, 30% of users are now male.

Food & Beverage

China’s Insistence on Food Security is Hurting Consumers: The Chinese government is right to be concerned about the source of its food, but protectionism is not the answer. China has approximately 20% of the world’s population, but only 10% of its arable land and only 5% of its water. China relies on imports for only around 10% of its food. That is very high compared to other countries. China has generally less efficient farmers and import restrictions which leads to structurally higher prices for agricultural commodities within China.

Bamboozling World of Natural Wines: There's a buzz around Shanghai and the rest of China pertaining to natural wines but in reality few consumers know what makes a natural wine natural.

 Environment

China Faces Worst Crop Conditions Ever Due to Climate Change: "China faces big difficulties in food production because of the unusual floods last autumn," says China’s agriculture minister Tang Renjian. "Many farming experts and technicians told us that crop conditions this year could be the worst in history." More than 860 people died or went missing in natural disasters last year, which damaged almost 30 million acres of crops. The floods delayed planting on more than 18 million acres of land, about one-third of China’s total winter wheat acreage. The amount of first- and second-grade crops, where there are more than 2.7 million seedlings on every acre of land, fell by more than 20% this year compared with normal years. Seasonal droughts are forecast to reduce yields of China’s three major staple foods — rice, wheat and corn — by 8% by the end of the decade.

 Beauty

How Ancient Chinese Wisdom Is Revolutionising C-Beauty: Local brand HerBeast, founded in 2020, sells a 15ml bottle of essential oil sold at ¥468 ($74), competing at the premium range with similarly priced Estée Lauder and Lancôme. Touting "skincare long-termism," the label exclusively uses native herbs and plants as product ingredients and focuses its storytelling on indigenous insights. Fengsi has launched shampoo lines informed by ancient Chinese hair care practices, challenging conventional formulas rooted in modern Western science. In the health space, TCM-inspired food companies TipsYou, LF Herbify, and Hope Water are making herb gummies and soft drinks to strengthen blood and Qi — the vital energy that animates the body according to Chinese natural philosophy.

Chinese Tourists

China Eastern Faces Losses, Regulatory Scrutiny After Fatal Crash: The plane crash, China’s first in 12 years, comes as its airline sector is struggling to find its footing amid the COVID-19 pandemic, with air passenger traffic far below 2019 levels due to repeated outbreaks and a steep fall in international travel due to China’s strict quarantine rules. The crash has caused many cancellations from travellers in the short term. Across the industry, 78.4% of all flights scheduled for last Tuesday were cancelled, largely attributed to Covid, as China deals with its largest outbreak in two years.

Sport

China to Boost Public-Service System for Sports, Fitness: China will increase the supply of basic services oriented toward public fitness and sporting interests to boost the population's participation rate in such activities and the accessibility of related facilities. By 2025, China is expected to have 2.6 metres of sports venues per capita with 38.5% of people taking part in regular exercise. By 2035, the participation rate should exceed 45%.

Education

China’s Wealthy Still Value Western Education, but Most Feel their Children’s Future Lies in China, Survey Reveals: Chinese families with a wealth of at least ¥10 million ($1.6m) value a Western education, however they see a brighter future for their children in their home country. About 60% of those who have studied abroad themselves said they were "satisfied" with their experience, and one third said they were "very satisfied." Parents want their children to learn to "think independently", "shoulder responsibilities" and "solve problems" from their international education, which is harder to find in a domestic education system that has long been focusing on academic achievements. USA, UK, Canada and Australia, remain the most popular destinations, but an increasing number are considering other European countries and countries along the "Belt and Road" amid a deteriorating relationship between China and the West. The average age of students starting their study abroad has increased from 18 to 21, with students going for graduate programmes surging by eight times compared to last year.

 Luxury

Chanel’s Draconian Store Policy Is a Miss: Chanel enacted a new in-store queue management system in its 24 stores in South Korea following increased "reselling". Customers are now required to provide contact numbers as well as their reasons for entering the brick-and-mortar stores. The move is likely to be aimed at staving off Daigou sellers and has led to the traffic in boutiques decreasing by 30%.

How Did Covid-19 Spark a Boom in Luxury Yacht Sales for Benetti? From Shifting to Virtual Events to Adapting to Gen Z and Millennial Buyers, Here’s Everything You Need to Know: Benetti received record orders as wealthy customers look to luxury yachts for a safer and more open, yet intimate space – with millennials and Gen Zers expecting more fun and entertainment. Since the pandemic, Chinese consumers are moving from just business-orientated yachts into multifunctional spaces, to include leisure space. Chinese consumers also generally prefer bigger yachts – every year the yachts are getting bigger and bigger. Since Benetti started focusing on the Asia-Pacific market, the company has seen revenues of over $288 million with 75% of sales from Greater China.