Latest news with #AlfredoMontufar-Helu
CNBC
5 days ago
- Business
- CNBC
China plans subsidy vouchers for seniors to ease strain on its aging population, drive consumption
China is planning to offer subsidy coupons to seniors in a rare use of direct fiscal support as Beijing seeks to ease the financial strain on its aging population and drive consumption of elderly-care services. The allowances will be paid monthly in the form of electronic coupons to cover part of the costs for seniors' care services, according to a joint statement issued by the ministry of civil affairs and ministry of finance on Wednesday. Chinese policymakers have avoided direct cash handouts similar to what the U.S. and Hong Kong offered during the pandemic to stimulate spending, even as they step up efforts to support employment and improve social welfare. "The financial burden that elderly care generates for Chinse households ... is one of major current constraints to reducing precautionary savings and boosting domestic consumption," said Alfredo Montufar-Helu, a Beijing-based advisor to multinational enterprises. Seniors will be assessed for their physical disability, and only those evaluated as "moderately, severely or completely disabled" will be allowed to claim such subsidies, according to the official statement. The allowances are currently set between 500 yuan and 800 yuan a month and can be used to pay for a portion of the costs for certain senior-care services, such as meal and bathing assistance, rehabilitation and day care. Details of the plan may be further "optimized" as authorities will run a pilot in select cities this month before a nationwide roll-out later this year. The scheme will last for 12 months. The measures could incentivize the adoption of such senior care services and ease the "hefty elderly care burden" for family members, said Tianchen Xu, senior economist at Economist Intelligence Unit. Echoing that view, Lynn Song, chief economist for Greater China at ING, said that while "strengthening of the social safety net has been one of the main goals in order to better unlock consumption, these measures can be interpreted as steps in this direction." As China's population ages and middle-class consumers facing job uncertainty scale back spending, the so-called silver economy — a sector that provides goods and services for people over 50 — has been on the rise, with more businesses targeting seniors who have accumulated sufficient retirement funds. "It's crucial for the government to keep pushing forward with reforms and strategies that tackle the deeper structural [supply-demand] imbalances," Montufar-Helu said. The fiscal aid will be primarily funded by the central government, with local authorities contributing a smaller share, according to the statement Wednesday. "Elder care is a key component of the country's broader services consumption ... the initiative is designed to foster new growth drivers and better align economic development with social welfare," the statement reads, translated by CNBC. Economists have ramped up calls for Beijing to prioritize policies aimed at strengthening the country's social safety net to tackle the aging population, high youth jobless rate and tepid domestic consumption. "Mounting demographic and economic pressures are forcing Beijing to highlight the social policy agenda in the upcoming 15th five-year plan," Eurasia Group said in a note Thursday. "Bolstering the social safety net, especially through changes to pensions and healthcare, is high on the agenda to adapt to a rapidly graying society," Eurasia Group said in a note Thursday. About 22% of China's population was aged 60 or older at the end of 2024, the statement said, up from 18.7% in 2020. The population aged 65 years and above in China reached 216.8 million in 2023, accounting for 15% of the total population.
West Australian
06-07-2025
- Business
- West Australian
China slammed ‘blind box' addiction — but that shouldn't faze Labubu-maker Pop Mart
Beijing may have warned against 'blind box' toys, but analysts are betting that Pop Mart International — the company behind Labubu dolls — will remain one of China's hottest consumer brands this year. In an editorial on June 20, China's state media People's Daily called for tighter regulations around selling blind-boxed toys and trading cards to children under the age of eight, such as verifying buyers' age upon payment and requiring parental approval in online transactions. Without naming Beijing-headquartered Pop Mart, the paper slammed businesses for enticing young children to spend heavily on 'blind cards' and 'mystery boxes' — a model central to Pop Mart's appeal. The company often sells its dolls in a blind box to buyers who don't know what character is inside until they open it. Sequentially, Pop Mart's share price plunged 12.1 per cent for the week ending June 20, marking its steepest fall since late 2023, denting a massive rally that sent its shares over 600 per cent higher over the last 12 months. Its stock has regained some ground since then, hovering near the all-time high levels hit in mid-June. The state media commentary on blind-box toys is reminiscent of Beijing's regulations on video games in recent years, which were aimed at curbing gaming addiction and unsupervised in-game purchases by minors. That led to restrictions on how long minors can play video games, as part of a sector-wide crackdown that wiped out billions of dollars in value from China's gaming giants. 'The magnitude of Chinese policymakers' impact [on businesses] is way higher than that in other countries,' said Alfredo Montufar-Helu, senior advisor for the China Center at The Conference Board, a think tank. That said, analysts view the fears of regulatory headwinds as overblown as Gen Zers and millennials, rather than young children, are Pop Mart's main consumer demographic. Pop Mart will largely be insulated from intensifying regulatory scrutiny as it targets younger adults with adequate purchasing power, Montufar-Helu said. Local peers that focus on minors, however, will likely be 'heavily impacted,' said Jeff Zhang, equity analyst at Morningstar. There's another factor that could cushion the regulatory impact on Pop Mart. It's increasingly driven by overseas sales, especially in Southeast Asia, he said. And the share of its China revenue will fall to about 30 per cent in the next 10 years, he projected. Pop Mart's overseas sales in 2024 have already surpassed the company's overall sales in 2021. Pop Mart derived about 61 per cent of its revenue from mainland China in 2024, according to its annual report, drawing the rest mainly from Southeast Asia and East Asia, as well as Hong Kong, Macau and Taiwan. Its sales in North America grew more than 550 per cent last year from a year earlier, and the company has 90 physical stores and vending machine spots across the United States. HSBC Bank expects Pop Mart's overseas revenue in 2025 to more than double to 14 billion yuan ($3b) from 2024 on strong sales momentum from 'Labubu 3.0,' released in April. This figure would account for more than half of its entire projected revenue this year, up from 39 per cent in 2024. That just builds on the meteoric growth that the company enjoyed last year, when revenue more than doubled to 13.04 billion ($2.8b) yuan, while profits nearly tripled. The rapidly growing popularity of the ugly-cute toys contrasts with otherwise sluggish consumption in the country, as many become increasingly frugal in the face of an economic slowdown. Younger Chinese consumers want to build toy collections for the sense of 'affordable exclusivity' it gives them, said Montufar-Helu, as it can be satisfying to be 'one of the lucky ones to get the special edition' at a reasonable price. Pop Mart sells blind-boxed toys with prices ranging from about 59 yuan ($12.50) to 5999 yuan ($1277). Collectors often spend hundreds or thousands of yuan, and rare models can fetch six-figure sums at second hand auctions. 'The very point about blind boxes is the unknown, the uncertainty. There is some inherent curiosity about what someone's gonna get. That brings about a certain degree of excitement when people are buying blind boxes,' said Chris Wong, senior clinical psychologist at Singapore-based Resilienz Clinic. 'When that uncertainty is resolved,' he said, referring to when the blind box is opened, '[that] usually comes with certain pleasant emotions, like fun, surprise and delight. That also plays a part in why people just keep on doing that.' Seeing others share their own experiences of blind boxes on social media also amplifies such a response from the brain, as it fulfils the human need for social connection, the psychologist said. But although the Labubu frenzy shows no sign of slowing, Pop Mart still faces other challenges that may dent its momentum, analysts said. 'While Pop Mart's major IPs, such as Labubu have received some global popularity over the past two years . . . there is no guarantee that what is popular now will stay relevant over the next five to ten years,' Mr Zhang said. Other risks include uncertainty around the company's ability to meet shifting demand and scalping, which could drive genuine consumers out of the market, HSBC analysts said. Pop Mart issued a rare apology last month after a surge in orders caused delivery delays, with consumers complaining online about not having receiving orders weeks after placing them. Counterfeit toys may also dampen Pop Mart's reputation at home and abroad, analysts said, despite the government's efforts in stepping up scrutiny at export checkpoints. Customs at the Ningbo port, one of the country's busiest ports, seized over a million counterfeit Labubu dolls in the first six months of this year, over intellectual property violations and smuggling concerns. To keep its brand fresh, Pop Mart has taken a page from Disney's playbook, doubling down on expanding its IP portfolio, launching pop-up stores, a film studio and a theme park. Pop Mart's founder Wang Ning once hinted at his aspiration to turn the company into 'China's Disney.' But those initiatives don't come cheap. 'Animation production requires a strong storytelling team that can consistently deliver compelling narratives,' said Echo Gong, an independent Shanghai-based retail consumption consultant. She added that managing a theme park also demands an entirely different skillset and far greater investment than simply selling toys.
CNBC
04-07-2025
- Business
- CNBC
China slammed 'blind box' addiction — but that shouldn't faze Labubu-maker Pop Mart
Beijing may have warned against "blind box" toys, but analysts are betting that Pop Mart International — the company behind Labubu dolls — will remain one of China's hottest consumer brands this year. In an editorial on June 20, China's state media People's Daily called for tighter regulations around selling blind-boxed toys and trading cards to children under the age of eight, such as verifying buyers' age upon payment and requiring parental approval in online transactions. Without naming Beijing-headquartered Pop Mart, the paper slammed businesses for enticing young children to spend heavily on "blind cards" and "mystery boxes" — a model central to Pop Mart's appeal. The company often sells its dolls in a blind box to buyers who don't know what character is inside until they open it. Sequentially, Pop Mart's share price plunged 12.1% for the week ending June 20, marking its steepest fall since late 2023, denting a massive rally that sent its shares over 600% higher over the last 12 months. Its stock has regained some ground since then, hovering near the all-time high levels hit in mid-June. The state media commentary on blind-box toys is reminiscent of Beijing's regulations on video games in recent years, which were aimed at curbing gaming addiction and unsupervised in-game purchases by minors. That led to restrictions on how long minors can play video games, as part of a sector-wide crackdown that wiped out billions of dollars in value from China's gaming giants. "The magnitude of Chinese policymakers' impact [on businesses] is way higher than that in other countries," said Alfredo Montufar-Helu, senior advisor for the China Center at The Conference Board, a think tank. That said, analysts view the fears of regulatory headwinds as overblown as Gen Zers and millennials, rather than young children, are Pop Mart's main consumer demographic. Pop Mart will largely be insulated from intensifying regulatory scrutiny as it targets younger adults with adequate purchasing power, Montufar-Helu said. Local peers that focus on minors, however, will likely be "heavily impacted," said Jeff Zhang, equity analyst at Morningstar. There's another factor that could cushion the regulatory impact on Pop Mart. It's increasingly driven by overseas sales, especially in Southeast Asia, Zhang said. And the share of its China revenue will fall to about 30% in the next 10 years, he projected. Pop Mart's overseas sales in 2024 have already surpassed the company's overall sales in 2021. Pop Mart derived about 61% of its revenue from mainland China in 2024, according to its annual report, drawing the rest mainly from Southeast Asia and East Asia, as well as Hong Kong, Macau and Taiwan. Its sales in North America grew more than 550% last year from a year earlier, and the company has 90 physical stores and vending machine spots across the United States. HSBC Bank expects Pop Mart's overseas revenue in 2025 to more than double to 14 billion yuan ($1.95 billion) from 2024 on strong sales momentum from "Labubu 3.0," released in April. This figure would account for more than half of its entire projected revenue this year, up from 39% in 2024. That just builds on the meteoric growth that the company enjoyed last year, when revenue more than doubled to 13.04 billion yuan, while profits nearly tripled. The rapidly growing popularity of the ugly-cute toys contrasts with otherwise sluggish consumption in the country, as many become increasingly frugal in the face of an economic slowdown. Younger Chinese consumers want to build toy collections for the sense of "affordable exclusivity" it gives them, said Montufar-Helu, as it can be satisfying to be "one of the lucky ones to get the special edition" at a reasonable price. Pop Mart sells blind-boxed toys with prices ranging from about 59 yuan to 5,999 yuan. Collectors often spend hundreds or thousands of yuan, and rare models can fetch six-figure sums at secondThe state media commentary on blind-box toys is reminiscent of Beijing's regulations on video games a few years ago,hand auctions. "The very point about blind boxes is the unknown, the uncertainty. There is some inherent curiosity about what someone's gonna get. That brings about a certain degree of excitement when people are buying blind boxes," said Chris Wong, senior clinical psychologist at Singapore-based Resilienz Clinic. "When that uncertainty is resolved," he said, referring to when the blind box is opened, "[that] usually comes with certain pleasant emotions, like fun, surprise and delight. That also plays a part in why people just keep on doing that." Seeing others share their own experiences of blind boxes on social media also amplifies such a response from the brain, as it fulfils the human need for social connection, the psychologist said. But although the Labubu frenzy shows no sign of slowing, Pop Mart still faces other challenges that may dent its momentum, analysts said. "While Pop Mart's major IPs, such as Labubu" have "received some global popularity over the past two years ... there is no guarantee that what is popular now will stay relevant over the next five to ten years," Zhang said. Other risks include uncertainty around the company's ability to meet shifting demand and scalping, which could drive genuine consumers out of the market, HSBC analysts said. Pop Mart issued a rare apology last month after a surge in orders caused delivery delays, with consumers complaining online about not having receiving orders weeks after placing them. Counterfeit toys may also dampen Pop Mart's reputation at home and abroad, analysts said, despite the government's efforts in stepping up scrutiny at export checkpoints. Customs at the Ningbo port, one of the country's busiest ports, seized over a million counterfeit Labubu dolls in the first six months of this year, over intellectual property violations and smuggling concerns. To keep its brand fresh, Pop Mart has taken a page from Disney's playbook, doubling down on expanding its IP portfolio, launching pop-up stores, a film studio and a theme park. Pop Mart's founder Wang Ning once hinted at his aspiration to turn the company into "China's Disney." But those initiatives don't come cheap. "Animation production requires a strong storytelling team that can consistently deliver compelling narratives," said Echo Gong, an independent Shanghai-based retail consumption consultant. She added that managing a theme park also demands an entirely different skillset and far greater investment than simply selling toys.
Mint
12-06-2025
- Business
- Mint
Supply chains become new battleground in the global trade war
SINGAPORE : A key lesson from the latest skirmish in the U.S.-China trade war: The era of weaponized supply chains has arrived. Earlier this week, Washington and Beijing ended a standoff involving the most potent new tool in superpower statecraft—export controls. As part of a monthslong trade fight, the two sides choked off the supply of such exports as rare earths or semiconductor technology in bid to gain an edge. So when Chinese and American negotiators finally met in London to discuss a truce, the talk focused far more on dialing back supply-chain curbs than they did on tariffs, market access and other standard trade-negotiation topics. That shift highlights how the rivalry between the U.S. and China is increasingly about who controls the levers of global economic power. For businesses and investors, the potential for these tools to be used more broadly in the pursuit of geopolitical goals by Washington and Beijing adds another layer of complexity to an economic backdrop already clouded by tariffs. 'The amount of uncertainty generated by this is significant," said Alfredo Montufar-Helu, senior adviser at the Conference Board in Beijing. 'It is something new." To some analysts, the use of export controls means future trade talks between the U.S. and China will increasingly resemble the arms-control dialogues of the Cold War, when the U.S. and the Soviet Union worked to limit the buildup of nuclear weapons, without giving up the deterrent effect their possession conferred. Today, instead of warheads, the U.S. and China are wielding a range of new economic weapons that have the potential to cause widespread economic pain. Following the latest skirmish, China agreed to resume exports of rare-earth magnets and critical minerals needed by U.S. companies—but only for six months, The Wall Street Journal reported. 'If you look at traditional arms-control treaties, the primary goal was to prevent a catastrophic, worst-case scenario from materializing," said Emily Benson, head of strategy at the advisory firm Minerva Technology Futures and a former Commerce Department official. 'And that's certainly what we see here in the economic domain." In many essential sectors of the modern economy, China has the upper hand. The world's second-largest economy accounts for around a third of global manufacturing output, giving it a potential chokehold on auto parts, basic ingredients for drugs, key parts of the electronics supply chain and a host of other industrial sectors. It is the world's No. 1 exporter of machinery, ships, steel, ceramics, textiles and dozens of other goods, according to data from the International Trade Center, a U.N.-backed agency that promotes open trade. The U.S. dominates fewer sectors—but its clout in advanced technology gives it an outsize advantage. Supply-chain resilience became a hot topic in government buildings and corporate boardrooms during the Covid-19 pandemic, when the virus and the lockdowns aimed at containing it revealed the global economy's vulnerability to major disruptions, especially in China, the world's largest factory floor. Auto factories in Missouri shut down in 2021 over a shortage of Chinese-made chips. European Union solidarity crumbled as individual countries raced to secure their own domestic supplies of ventilators, masks and other equipment. Companies examined their supply chains to check for weak spots and in many cases opted to build up inventory, find additional manufacturing bases and take other steps to build greater resilience in their supply chains in the event of fresh disruption. These efforts did little to weaken China's grip on key supply chains. The pandemic also underlined the potential for governments to turn their economic dominance against their rivals and adversaries. Under the Biden administration, the U.S., which for years made abundant use of its dominant position in global finance to impose sanctions on countries including Iran and Russia, wielded one of the most powerful economic tools America possesses: its tech prowess. Washington tightened controls on exports of high-end semiconductors to China, and persuaded allies including Japan and the Netherlands to limit supplies to China of lithography machines and other essential chipmaking tools. The goal was to thwart China's ambition to supplant the U.S. as the world's foremost technological power. In response, China has begun flexing its own economic muscle by tightly controlling the export of rare earths and other critical minerals that are essential for the manufacture of car engines, chips, smartphones and a host of other advanced technologies. It upped the ante this year by extending those controls to the export of rare-earth magnets, indispensable components in everything from air-conditioning units to jet fighters. The U.S. said China agreed to speed approvals of magnet exports as part of a trade truce agreed in Geneva in May, which lowered substantially tariffs imposed by both countries on the other's imports. Yet Washington soon grew frustrated at the slow pace of approvals, which automakers complained was hurting production. Officials again reached for export controls to raise the pressure on Beijing, notifying companies that exports to China of jet engines and related parts, chipmaking software, and ethane, a component of natural gas used in manufacturing plastics, were suspended, The Wall Street Journal reported. This week's talks in London were aimed at easing this standoff. The two sides said they agreed to 'a framework" to restore the May truce, without providing many details. President Trump in a post on his Truth Social network said Wednesday that a deal is done and that the supply of magnets and rare earths from China to the U.S. economy will resume. But China's move to put a six-month limit on rare-earth export licenses for American manufacturers signals that Beijing could use this weapon against the U.S. again if trade tensions erupt again. The potential for export controls to disrupt trade adds to the pressure on companies already struggling to navigate tariffs and mushrooming trade conflicts. Companies operating in the U.S. and China will increasingly need to split their supply chains into two, said Eric Zheng, president of the American Chamber of Commerce in Shanghai. 'Companies will, generally speaking, continue to derisk, however you define this, essentially by treating the U.S. and China as two separate markets," he said. Write to Jason Douglas at
Gulf Today
25-04-2025
- Business
- Gulf Today
China exempts some goods from US tariffs to limit trade war pain
China has exempted some US imports from its 125% tariffs and is asking firms to identify critical goods they need levy-free, according to businesses notified, in the clearest sign yet of Beijing's concerns about the trade war's economic fallout. The dispensation, which follows de-escalatory statements from Washington, signals that the world's two largest economies were prepared to rein in their conflict, which had frozen much of the trade between them, raising fears of a global recession. Beijing's exemptions - which business groups hope would extend to dozens of industries - pushed the US dollar up slightly and lifted equity markets in Hong Kong and Japan. 'As a quid-pro-quo move, it could provide a potential way to de-escalate tensions,' said Alfredo Montufar-Helu, a senior adviser to the Conference Board's China centre, a think tank. But, he cautioned: 'It's clear that neither the US nor China want to be the first in reaching out for a deal.' China has not yet communicated publicly on any exemptions. A Friday statement by the Politburo, the Communist Party's elite decision-making body, focused on efforts to maintain stability at home by supporting firms and workers most affected by tariffs. The readout, which followed the Politburo's regular monthly meeting, showed that Beijing was also ready to hunker down and fight a trade war of attrition if needed to outlast Washington in enduring the pain from the breakdown of their relationship. A Ministry of Commerce taskforce is collecting lists of items that could be exempted from tariffs and is asking companies to submit their own requests, according to a person with knowledge of that outreach. The ministry said on Thursday it had held a meeting with more than 80 foreign companies and business chambers in China to discuss the impact of US tariffs on investment and the operation of foreign firms in the country. 'The Chinese government, for example, has been asking our companies what sort of things are you importing to China from the US that you cannot find anywhere else and so would shut down your supply chain,' American Chamber of Commerce in China President Michael Hart said. Hart added some member pharmaceutical companies had reported being able to import drugs to China without tariffs. He believed the exemptions were drug-specific, not industry-wide. The chief executive of French aircraft engine maker Safran said on Friday it had been informed last night that China had granted tariff exemptions on 'a certain number of aerospace equipment parts' including engines and landing gear. The tariff exemptions under consideration by Beijing could provide cost relief for companies in China and take pressure off US exports at a time when the Trump administration has shown signs of wanting to make a deal with Beijing. The European Union Chamber of Commerce in China also said it had raised the issue of tariff exemptions with the commerce ministry and was awaiting a response. 'Many of our member companies are significantly impacted by the tariffs on critical components imported from the US,' President Jens Eskelund said. A list of 131 categories of products said to be under consideration for tariff exemptions was circulating on Chinese social media platforms and among some businesses and trade groups on Friday. Reuters could not verify the list, which included items ranging from vaccines and chemicals to jet engines. Huatai Securities said the list corresponded to $45 billion worth of imports to China last year. China's customs agency and Ministry of Commerce did not reply to requests for comment. China's foreign ministry said it was not familiar with tariff exemption plans, redirecting queries to 'relevant authorities'. LASTING FIGHT While Washington has said the trade stand-off with China is economically untenable and already offered tariff exemptions to some electronic goods, China has repeatedly said it is willing to fight to the end unless the US lifts its 145% tariffs. But China's economy headed into the trade war with rising unemployment, deflationary pressures and heightened concern that a mounting backlog of unsold exports could drive domestic prices even lower. While China ran a trillion-dollar trade surplus in 2024, it also relies on the United States for key imports, including the petrochemical ethane needed to make plastics, and some drugs. Big pharmaceutical companies including AstraZeneca and GSK have at least one manufacturing site in the US for drugs sold in China, according to Chinese government data. Major ethane processors have already sought tariff waivers from Beijing because the US is the only supplier. Exemptions may be only a tiny step in a long process. 'For those U.S.-manufactured goods that cannot be procured from any other country, I do think there is an interest to exempt them of import tariffs, even if this is done unilaterally,' Montufar-Helu said. 'But for some other goods like energy and agricultural commodities, I think the calculation is very different given that there are other sources that China can tap.' Reuters
