China Content Hub China Quantitative Insight Reports

China Quantitative Insight Reports

Grassroots data driven intelligence content, leveraging our extensive HOLT data library and new alternative data sources to bring our clients a unique level of insight across several industry sector and macro trends.

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Report

November 17, 2021

CQi Energy Bulletin: Solar - Sharp price hikes slow overseas and domestic order growth

CQi surveys show new orders from both overseas and domestic customers to the CQi solar panel are growing more slowly, slowed by sharp upstream cost inflation. With higher costs delaying projects, we are skeptical China’s 2021 installation will greatly exceed last year’s performance. Rising cost inflation is lifting the adoption of new technology.

November 15, 2021

CQi Materials – Power tariffs hiked; more hikes ahead

Most CQi-tracked materials panels saw their YoY demand indices fall further in October. They expect demand to stay negative YoY in November. Power cuts remained firm for upstream producers but loosened for semi-producers. Nearly 60% of our panelists saw their outsourced power tariffs increase in October. The rest will likely get an increase soon.

November 14, 2021

CQi Ecommerce – Online shopping weaker, merchants happy with the anti-monopoly crackdown

CQi conducted interviews with ecommerce merchants about the changes wrought by Beijing’s regulatory campaign against internet giants in 2021. The merchants welcome the anti-monopoly effort. They expect to grow their business more easily if barriers between platforms are removed. We also noticed that online shopping has weakened.

November 14, 2021

CQi Business Monitor - Production cuts continue, easing costs in shipping and materials help stabilise manufacturers’ profitability

CQi’s survey of private companies found that power rationing and production curbs extended into October, and in some cases, November. This suggests further weakness in industrial production in 4Q. Shipping costs showed more signs of easing. Manufacturers are putting off input purchasing, expecting prices of key materials to fall further.

November 11, 2021

CQi Property – Mixed picture of policy changes; CQi talks with realtors

Our survey shows a handful of banks cut mortgage rates, although average rate rose. There are signs of easing in mortgage application process. Government supervision of presale revenues tightened; developer loans were tight but banks showed more interest. Rental yields were stable in Tier 2 cities, up in Tier 3 cities and down in Tier 4-5 cities.

November 10, 2021

CQi Consumer: Toys and Dolls - Toy story for young Chinese: Blind box stands out

CQi visited 20 Tier 1-3 cities in October and interviewed toy players aged 13 to 31 to find out about art toy consumption trends in China. We find that the market is growing fast as more consumers are attracted to toys and planning a bigger budget. Blind box is the most popular category but policy risk is an overhang.

November 9, 2021

CQi Energy Bulletin: Coal - Short-term gain vs. long-term pain; weighing up Beijing’s policy interventions

CQi surveys show Beijing’s recent interventions improved coal supply. But our contacts are cautious on the sustainability of near-term production growth. From a long-term perspective, they worry that excessive administrative measures to boost coal oversupply, deviating from Beijing’s carbon neutralization roadmap.

November 7, 2021

CQi Consumer Monthly Watch - Rocketing vegetable prices hit consumers

CQi’s survey shows that inflation is keenly felt by our panel as food prices rose due to bad weather and higher production costs. The CQi Consumer Sentiment Index didn’t improve despite the panel’s slightly better income outlook. Their interest in buying property rose a bit. They are ready to pay a premium for smart features of big home appliances.

November 4, 2021

CQi Financials - Chinese mutual funds in 3Q: H share position falls, materials sector ramps up, PMs expect style shift in 4Q

Wind data show Chinese mutual funds’ total H share investment fell by 22% in 3Q, contributing to the slowdown in southbound flows. Their position in materials increased the most QoQ, while that in real estate improved slightly. Moutai’s status as the No. 1 held stock by mutual funds is being challenged by CATL.

November 2, 2021

CQi Strategy - How will homeowners respond to a property holding tax? 

CQi talked to 200+ families who own more than one home in 20 cities to see how they would react if their city is included in the pilot property holding tax scheduled for the next five years. Our survey reveals that a tax of around 1% could provoke heavy selling in the secondary market with a spillover impact on household consumption.

October 26, 2021

CQi Strategy - Cross-border ecommerce: service providers in a sweet spot

As China's 600,000 ecommerce exporters face increasing policy risks on foreign platforms this year, a much smaller number of firms that provide store-building, advertisement, data and logistics services to ecommerce vendors remain in a sweet spot.

October 21, 2021

CQi Consumption - Post the tutoring crackdown, where are Chinese parents putting their money?

CQi talked with parents on our monthly consumer panel about their life after Beijing implemented the "Double Reduction" policy. We find that children's attendance in K12 after-school academic tutoring courses has declined significantly. Parents want to shift to quality-oriented education. Also the policy alone is unlikely to encourage more births.

October 19, 2021

CQi Strategy - China's transition to inflation exporter picks up pace

CQi surveys saw a sudden acceleration in price hikes by exporters in 3Q. We expect export prices to continue rising through the winter, adding inflationary pressure in the US and other developed countries. In the long run China's decarbonisation campaign will be a key driver of the country's transition from an exporter of deflation to inflation.

October 19, 2021

CQi Materials - Impact of power cuts varies, upstream hit harder

Hit by power cuts, the demand indices of all CQi-tracked materials panels entered negative territory on a YoY basis. Nearly half of the panelists say their production was affected by power cuts. The panels believe upstream materials producers took a bigger hit than downstream users in most materials sectors. All panels are negative on demand in 4Q.

October 19, 2021

CQi Business Monitor - Manufacturers reeling from a quarter of shocks; service firms cautious on policy risks

Utilisation rates at manufacturers fell in 3Q, as 29% of factories were ordered to cut production on power rationing. The auto and parts industry was the most affected by output curbs and input shortages. Banks continued to tighten credit standards on loans to SMEs. Regulatory uncertainty has increasingly weighed on private companies' sentiment.

October 18, 2021

CQi Property – Positive signs

This CQi survey shows prices and sales fell in September and 1-7 October and the panel's price and sales outlook softened. Mortgage rate continued rising, but more managers saw quicker mortgage application process. More managers noticed that Evergrande projects suspended presales or construction, but several saw activity resuming in recent days.

October 18, 2021

CQi Energy Bulletin: Solar: Further price hikes ahead as output cuts bite

CQi surveys show that output reductions at the key material suppliers we track, especially the silicon material and wafer producers, created a new catalyst for price hikes in the supply chain. New orders on CQi's solar panel grew slightly slower in September than August. Most exporters we track plan to stop exporting to the US.

October 17, 2021

CQi NEV Market Monitor - Winners and losers from the power cuts

CQi surveys show some manufacturers in the NEV supply chain suffered power cuts, curbed materials output. Tight supply then pushes up prices. Meanwhile, accelerating NEV sales may intensify competition for materials supply among domestic brands.

October 14, 2021

CQi Consumer Monthly Watch - CQi Consumer Sentiment Index shows continuous weakening trend into October

Our latest survey shows that consumer sentiment keeps falling despite the modest income growth rebound in the month. Their spending intentions improved slightly but remain weak. The consumers' interest in property investment slid, reflecting the fallout from the Evergrande crisis.

October 13, 2021

CQi Financials - Financial stability unlikely threatened by Evergrande crisis

This CQi survey shows the Evergrande crisis may trigger widespread credit tightening for other developers. Yet a PBoC stress test reveals that the impact of severe property loan risk may be moderate compared with other risk factors.

October 12, 2021

CQi Video - How It Works: NEV charging piles

CQi is launching a new series ‘How It Works'. These are video interviews with people in industry that can help investors better understand areas they are interested in. For our first installment, we speak with a sales person from a charging pile company.

October 12, 2021

CQi Energy Bulletin: Coal - Coal supply at main producer provinces may not pick up fast enough to ease power crunch this winter

CQi surveys show key producing provinces (Shanxi, Inner Mongolia, and Shaanxi) have issued new measures to boost coal output, including allowing unauthorized coal mines to run. Yet, with the winter peak season approaching, output may not pick up quickly enough to meet the supply-demand gap in the near future.

October 10, 2021

CQi Seasoning - Haitian dominates Chinese kitchens, consumers' intention to upgrade is weak

In September, CQi visited the kitchens of our consumer monthly panelists to find out their usage of major Chinese condiments. We find that they care about brand when buying, but their willingness to increase spending in this area is weak. Haitian dominates the panelists' usage of soy sauce and oyster sauce.

September 29, 2021

CQi Consumer Credit - Weakness seen in Huiminbao model, policy risk peaks in consumer credit, WMP boom continues

CQi's consumer survey shows that most Huiminbao insurance buyers regard the product as an addition to, rather than a substitute for, their existing medical insurance. Huiminbao's penetration ratio on the CQi panel will likely double to 20% in 12 months, far below the 70-80% industry experts say is needed for it to be sustainable.

September 27, 2021

CQi Business Monitor - Production cuts are spreading; they may speed up manufacturers' green investment

Output curbs mandated by local authorities have spread. More disruptions to supply chains and raw materials price increases are on the cards, but the production cuts may inadvertently accelerate investment in green equipment and the shift to renewable energy sources, CQi's on-the-ground contacts tell us.

September 28, 2021

CQi Strategy - Common prosperity: It's still about growth

Beijing's fresh call for ‘common prosperity' appears to be more egalitarian than some past iterations, but in CQi's view it remains pro-growth. The primary goal is to forge an "olive-shaped" society by expanding the scale of the medium-income population. If successful this would benefit consumption and wealth management industry in the long run. 

September 28, 2021

CQi Healthcare - Hospitals show mixed results in cataracts surgical volumes amid GPO and COVID

China's aging population is driving strong demand for cataracts treatment, as Beijing targets consumables such as intraocular lenses to bring down medical costs. As GPO is rolled out in most of the country, CQi's recent survey of ophthalmologists illustrates the policy impact on patient volume, surgical prices, and choice of products in hospitals.

September 19, 2021

CQi Alcohol - Budweiser benefits from growing Chinese spending on beer

CQi surveyed beer consumers and retailers in late August. Both expect higher beer consumption in 2021 vs. 20. Beer drinkers are chasing premium brands and willing to try new flavours. The sales of Snow and Budweiser will likely grow. The outlook for Tsingtao is gloomier. Carlsberg 1664's momentum is strong, while the views on Wusu beer are mixed.

September 16, 2021

CQi Energy Bulletin: Solar - Orders still strong but worries of oversupply ahead; significant reform in power supply

New orders on CQi's solar panel maintained still fast YoY growth in August, though slightly lower than July. The producers' utilization rates to improve further in the 4Q peak season. Meanwhile, Beijing formally launched a pilot direct trading scheme for green power, which could fundamentally change China's power supply and benefit renewables.

September 16, 2021

CQi Financials - Online brokerage sector: CQi checks on investors' preferences

CQi's interviewed experienced individual investors and stock market influencers on what it is that underpins online brokers' rapid growth momentum. In the A share market, East Money stands out in terms of traffic volumes and its licensing advantage. In the global market, FUTU leads with its user friendly interface.

September 15, 2021

CQi Business Monitor - Fujian outbreak threatens services and domestic travel

Our latest survey shows stronger headwinds faced by private companies. The rising COVID cases in Fujian province threaten more lockdown measures that will deepen the slowdown in the service sector. Export order growth remained stronger than domestic orders for now, yet overseas orders may leave China when more Asian countries reopen.

September 14, 2021

CQi Special Report - China's Carbon Challenge: Industrial transformation and the road to carbon neutral

This report taps CQi's extensive on-the-ground network to examine how steel, aluminium and copper producers, coal traders and light manufacturers are preparing for carbon reductions, as China embraces carbon neutral goals. It also includes a clear take on the implications for the financial industry, and the solar and NEV sectors.

September 13, 2021

CQi Materials - Power impact on aluminium may last longer than market expects

Most CQi-tracked materials panels saw their YoY order or sales indices continue falling or staying below 50 in August. Their outlook for September generally remains weak. Although power supply may gradually improve in autumn, the energy intensity requirement may continue to constrain aluminium supply for the rest of this year.

September 13, 2021

CQi Property - Leading developers' liquidity crunch hurts the market further

CQi's August survey shows that news of leading developers' liquidity squeeze weighed further on buyer sentiment. Managers on our panel are not confident of meeting their annual sales target, albeit their short-term outlook improved for seasonal reasons. Developers' pricing strategies diverged in August and managers' price outlook softened.

September 9, 2021

CQi Consumer Monthly Watch - Outlook weakens following income slowdown

After the continuous slowdown in disposable income, in August CQi-tracked consumers' outlook for the future dipped too. Their concerns over their children's education picked up as students returned to school under the ‘double reduction' policy. Investment sentiment on real estate continues to drop, while interest in stocks grew in August.

September 7, 2021

CQi Strategy - The struggling service sector: CQi surveys restaurants, nightclubs and retailers

CQi visited 90 restaurants, nightclubs and retailers in 32 cities to check on business. Activity at the venues fell to a low for this year due to tighter virus containment measures and cooling consumer sentiment. We expect service consumption to remain soft as Beijing is unlikely to abandon its zero-COVID strategy.

September 6, 2021

CQi Healthcare - High rate of myopia drives robust demand for its control and correction

The increasing prevalence of myopia in China, especially among schoolchildren and adolescents, has prompted government and families to take measures. CQi surveyed parents, optometrists and eye surgeons in August to understand the latest demand, and how various technologies are adopted to manage and treat the condition.

September 6, 2021

CQi Alcohol - Cognac & whiskey sellers in poor spirits

CQi talked with consumers and checked cognac & whiskey retailers to examine consumption of western spirits. Feedback shows foreign spirits are much less popular than beer and wine. Their growth potential is limited. The post pandemic recovery is slow, but the attraction of Pernod Ricard's Martell and Chivas' to young consumers draws our attention.

August 24, 2021

CQi Strategy - Property tightening outlook: CQi answers to two critical questions

Will Beijing resort to property loosening again to counter a sharper-than-expected economic slowdown? CQi's short answer is "not now". Will Beijing allow one or two top developers to go bankrupt? Our answer is "unlikely". For leading developers, the winter is just coming but they still have a good chance to survive.

August 17, 2021

CQi Energy Bulletin: Solar - Export order growth quickens, domestic order growth slows again

New overseas orders received by the exporters on the CQi solar panel grew faster in July despite higher prices, confirming the pricing power of leading Chinese producers. Domestic new order growth slowed again for the second month reflecting more price sensitivity at home.

August 16, 2021

CQi Materials - Steel cuts still on the agenda; power cuts and weather hurt output and construction demand

Due to recent extreme weather, the YoY demand indices of most of CQi's material panels continued sliding in July. In August the steel and copper panels expect their YoY order indices to dip, while the aluminium and cement panels expect the opposite. Despite varied views on steel output restrictions, the requirements are rolling out to more regions.

August 15, 2021

CQi NEV Market Monitor – Tesla price cuts could put it back on the road to recovery in China

Leading domestic NEV makers we track think Tesla has gained significant cost advantages after optimizing its supply chain and manufacturing process. Our findings indicate restrictions on capacity expansion for leading NEV makers may loosen. And, we wonder if Tesla may resume its expansion in Shanghai.

August 15, 2021

CQi Business Monitor - SMEs upended by Delta outbreak and floods; credit easing necessary but not sufficient to support small businesses

The Chinese authorities' zero-tolerance approach to the latest COVID outbreak deepened supply chain bottlenecks and accelerated the slowdown in new orders of SMEs. Restrictive travel policy will subdue domestic tourism during the coming Golden Week in October, further delaying the recovery of the service sector.

August 10, 2021

CQi Property - Listcos under more pressure to cut prices amid policy squeeze

CQi's July survey reveals stricter mortgage lending as Beijing tightens its focus on sector deleveraging and property policy. Pressure from developers on their showroom managers to sell is increasing. Projects in Tier 2 cities and those of listed developers appear to be under bigger downside pressure in the next 1-2 months, our survey shows.

August 10, 2021

CQi Consumer Monthly Watch - Consumer sentiment softens further

CQi's survey in July shows more consumers are worried about healthcare. Their outlook remains tepid, while income growth slid further in July. Their intention to buy big ticket items also weakened. The panel's investment sentiment on bank deposits and WMPs rose, while their interest in property and A shares cooled.

August 3, 2021

CQi Healthcare - Consumers flock to online healthcare in 1H; + deep dive on Ali Health, JD Health, Ping An GD users 

CQi's semi-annual online healthcare survey of 800 urban consumers reveals increased adoption of online medical consultation and pharmaceutical e-commerce in 1H. A separate survey of 200+ frequent users of Alibaba Health, JD Health or Ping An Good Doctor shows that consumers value the convenience of buying drugs online. 

July 28, 2021

CQi Financials – Chinese mutual funds in 2Q: F&B positions lower, semiconductor ramps up, buying the education dips

Wind data show less than half of Chinese mutual funds able to invest in H Shares did so in 2Q, similar to 1Q. The growth pace of their investments in H Shares in 2Q fell to a quarter of those in 1Q, adding to slower southbound flows. Mainland mutual funds' positions in the F&B sector fell further in 2Q while that in semiconductors grew fastest QoQ.

July 28, 2021

CQi Ecommerce – Kicking tyres amid a policy firestorm

As Chinese technology companies are buffeted by regulatory intervention, CQi revisited our regular panel of e-shoppers in July to get a view of grassroots activity. Their feedback highlights the growing usage of private traffic pools on WeChat and reduced enthusiasm for community group buying. Their overall online spending rebounded slightly in 2Q.

July 26, 2021

CQi Strategy – Moving mountains: A Beijing perspective on the regulatory crackdown

Beijing's crackdown on tutoring sector is driven by the same rationale that is behind the property tightening as well as reforms in the public health system. The primary goals include slowing the expansion of economic and social inequality and slowing and even reversing the falling birth rate by lowering the principal costs associated with child rearing.

July 26, 2021

CQi Strategy - Shein and the broader picture of China's booming e-commerce exports

CQi talked to a group of e-commerce exporters to look into the rise of Shein and the backdrop of China's booming e-commerce exports aided by strong government support. Policy support for e-commerce exports has implications for Sino-US trade relations as well as China's national strategy of industrial upgrading and climbing the value-chain.

July 21, 2021

CQi Dairy - Dairy brands milking consumer demand

CQi talked to soft drinks consumers about their views on liquid milk. Their growing awareness of milk's nutrition and concerns about health contribute to growth potential in the sector. They prefer pure milk to yogurt, and their interest in flavored milk drinks is declining. They value brand names and trust domestic companies.

July 14, 2021

CQi Materials - 3Q outlook weaker but remains positive

None of the CQi-tracked materials panels saw their YoY demand indices go up in June. For July, the panels expect their YoY demand indices to remain at June's level. In 2Q, the demand growth on most material panels was far below their expectations. The panels expect their 3Q growth to continue softening but stay positive YoY.

July 14, 2021

CQi Energy Bulletin: Solar - Price corrections

CQi surveys reveal modest price corrections recently in each core segment of the solar supply chain. The price adjustments come in the wake of continuous price hikes in the past five months have softened domestic and overseas new order growth on the CQi panel in June. Exporters we track expect to see their module exports grow in 2H from 1H.

July 13, 2021

CQi Strategy - Why are China's 840 million vaccinated people not increasing spending?

In contrast to what is seen in some developed countries, the large scale vaccination in China has done little to boost consumption or corporate activity. To bring consumption back to normal China needs to shift to a more sustainable virus-control mode characterized by low hospitalization and deaths but higher public tolerance for infection.

July 12, 2021

CQi Property - Tightening continues, Evergrande slashes prices in lower tier cities

CQi's June survey reveals further mortgage tightening, tougher checks of down payment sources at more projects and control of second-hand property prices in some cities. Sales and prices continued to slow with more projects offering down payment loans to boost sales. Managers see tight lending in the secondary market aiding primary sales.

July 11, 2021

CQi Business Monitor - Data security: automobile and mobile apps

A regulation that will impose various restrictions on cross-border data transfer by carmakers and firms in autonomous driving technology is being drafted by the Cyberspace Administration of China, something that participants along the EV value chain should be aware of.

July 8, 2021

CQi Consumer Monthly Watch - Sentiment slides amid lower income growth

The household income growth weakened further. The consumers' health concerns ticked up. A larger share of the panel changed their outlook from positive to neutral. As the investment sentiment on property and stocks softens, the consumers prefer to keep their money in the bank to secure their asset. Their willingness to consume also fell.

July 7, 2021

CQi Beverage - Chinese consumer views on RTD, milk tea and coffee

CQi visited famous milk tea shops and coffee chains and interviewed consumers about their appetite and brand preferences for soft drinks. Spending on bottled water will rise further. Consumers are keen on the "sugar-free" concept. The market is not an easy win for milk tea chains, as seen by their limited impact on coffee.

July 4, 2021

CQi Financials – China insurance sector: high-end trend

CQi's survey of 300 insurance buyers at the end of May suggests that consumers' are leaning towards high-end products a reflection of higher purchasing power among high-income people and young adults. Also, penetration of insurance product sales in online channels is expected to continue growing.

June 29, 2021

CQi Healthcare - Consumers value cancer detection, implying huge potential for early screening market

China's physical exam market is expanding as older age cohorts expand in size and the demand for disease prevention and detection rises. Our survey shows that consumers value cancer screening most in their routine physical exams. While use of some early cancer screening products is still nascent, consumers expressed interest in the new technology.

June 10, 2021

CQi Property – 2H outlook: Tightening continues, slower growth ahead; rising rent

CQi survey reveals tougher lending and Beijing's serious stance on misuse of business loans. MoM price growth in Tier 2 and Tier 4-5 cities slowed, but accelerated in Tier 3 cities. Managers expect mild HoH sales growth, implying a further slowdown in YoY sales. Rental yield rose in Tier 3-5 cities but fell in Tier 2 cities from November 2020.

June 10, 2021

CQi Energy Bulletin: Solar – Signs of trouble ahead

Overseas orders to the CQi panel continued growing in May, but price hikes may be beginning to soften foreign clients' demand. Two big exporters reported some overseas clients boycotting solar products made in Xinjiang province. Most contacts think the Biden Administration may escalate measures against China's solar industry.

June 9, 2021

CQi Business Monitor – Tough times for manufacturers, inflation pressures rising in services

Manufacturing companies on CQi's panel shared with us the severe challenges they face in the current operating environment. The second-order effects of the pandemic are squeezing their profit margins. China's manufacturers may find themselves in paradoxical situation, where they are worse off in 2021 than 2020, despite a recovering world economy. 

June 8, 2021

CQi Consumer Monthly Watch – Outlook holds firm despite weaker income Growth

CQi's regular check on Chinese consumers from Tier 1-5 cities reveals disposable income slowed in May. Their outlook on future financial conditions remained stable. Consumer spending intentions held up, as inflation pressure eased further as food prices fell seasonally. Retail investors' interest in stocks and funds rose.

June 8, 2021

CQi Beauty Insights – Medical aesthetics spending to grow as consumers become more wary of risks

CQi visited cosmetics consumer panel in May to get their views on aesthetic medicine. Consumer's annual spending on medical aesthetics is likely to grow, while they are more wary of the risks involved. They prefer non-surgical or minimally invasive procedures like hyaluronic acid injection. They trust public hospitals and friends' recommendations.

June 4, 2021

CQi NEV Market Monitor – FLASH – Tesla still hurting

CQi surveys carried out in early June indicate new orders received by the five Tesla sales centers we track fell more than managers had earlier expected, indicating the damage caused by the recent public relation crisis is ongoing. 

June 1, 2021

CQi Healthcare – Surgeons expect accelerated growth in TAVR, but view high price as main obstacle

China's TAVR market has seen fast growth in recent years, but it is still in a nascent period. CQi talked with three TAVR surgeons from hospitals with the largest TAVR volumes in China for their views on demand prospects, their evaluations of various devices in China, as well as how expanded TAVR indications have affected their clinical practice. 

May 31, 2021

CQi Beauty Insights – 2021: Small yet noteworthy rise of Chinese brands

CQi revisited the cosmetics consumer panel in early May. As the penetration and number of products in use is already high, the intention to further increase spending has softened. Rising trust in Chinese brands drives more users to Proya, JALA and Florasis. Estee Lauder keeps growing, L'Oreal is well penetrated and LG H&H is gaining market share.

May 21, 2021

CQi Energy Bulletin: Solar – Market remains upbeat, but cost inflation bites

Despite ongoing cost inflation, new overseas and domestic orders on the CQi panel grew faster YoY in April. Expecting prices to rise further, some solar power station developers we surveyed in mid-May have rising concerns that the increasingly expensive modules may force some PV development projects to be postponed.

May 19, 2021

CQi Financials – Value of consumer finance license goes up, JD hit hardest by new rules

CQi surveyed 12 managers from micro-lending firms in April about how their businesses are adapting to tighter regulations over online lending. A consumer finance license may be the best alternative to the micro-lending license, the qualifications for which have been raised significantly, our survey shows.

May 19, 2021

CQi Healthcare – Good prospects for clear aligner and digital dentistry with post-COVID recovery

CQi's survey of 50 dentists has shed some light on clear aligner, a fast-growing but underpenetrated dental segment. It shows a competitive landscape with a growing number of domestic and global players offering innovative products. With demand recovered from the pandemic, we expect accelerated penetration of clear aligner and digital dentistry.

May 17, 2021

CQi Materials – Inflation hurting

With the base effect fading, almost all CQi materials panels saw their YoY demand indices fall sharply in April. Meanwhile, high materials prices began to hurt demand. Thanks to environmental controls, steel panel expects its scrap consumption in 2Q to increase further. Cement plants are cautious about 2Q gross margins amid surging coal prices.

May 17, 2021

CQi Property – Tougher checks on down payments extended; big cities resilient

CQi survey shows banks tightened checks on down payment funding at slightly more projects in April, and people with low incomes or those who borrow from non-lineal relatives are affected. Mortgage application process slowed and mortgage rates rose MoM. Big cities outperformed small cities in sales, prices, and consumer confidence on price growth.

May 16, 2021

CQi NEV Market Monitor – Tesla under siege: a storm in a teacup?

Most sales managers CQi surveyed do not believe Tesla will recover soon from its recent public relations crisis in China and may see further sales declines this month. With rising public awareness of vehicle safety, the managers and NEV makers say their customers are showing a stronger interest in autonomous driving systems using multiple LIDARs.

May 16, 2021

CQi Strategy – Surprisingly low consumer awareness of "carbon neutrality"

A CQi survey shows fewer than 20% of our consumer panel know what "carbon neutrality" or "peak carbon emissions" mean, even though these ambitious goals have received extensive official media coverage and become one of the hottest themes in A-share market. With such low awareness, the carbon neutrality campaign may lack sufficient public support.

May 12, 2021

CQi Business Monitor – April sales remain strong for SMEs, helping ease margin squeeze from rising input costs

Two-thirds of the service firms feel consumer purchasing power has recovered to or exceeded that of pre-COVID levels, buttressing the continued rebound in the service sector. Supply side constraints remain critical for the manufacturers, but strong sales revenues helped offset some of the impact of input cost increases' on profitability in April.

May 12, 2021

CQi Consumer Monthly Watch – Inflation concerns not rising yet

CQi's consumer survey in late April reflects stable disposable income growth. Most of the panel expect their income and family financial conditions to remain unchanged in a year. Their concerns over inflation are tempered by falling pork prices. But a higher share of households are worried about their children's education.

May 11, 2021

CQi Ecommerce – Ecommerce giants' ad income faces threat from sales via video

Feedback from video merchants and e-shoppers highlights growing influence of livestreaming and short videos on consumers' online shopping behavior. It also shows that merchants intend to re-allocate their marketing budgets, continuous growth in use of community group purchases and the rising sensitivity of consumers to the price of food delivery.

May 11, 2021

CQi Strategy –  China's 7th census results – CQi's quick take

Delayed by about a month, the National Bureau of Statistics (NBS) released headline results of China's 7th population census on 11 May. New births in 2020 were the lowest recorded since 1961, and population aged further, the data show.

April 27, 2021

CQi Financial – Mutual funds: Investment in H shares, banking sector ramps up, famous PMs gaining market

New issuance of mutual funds in China has slowed since the start of the year, but the funds' investment in H shares has gone up, according to Wind. We also found that large mutual fund firms and famous PMs are consolidating the market, based on Wind data. Mutual funds' position in the banking sector grew fastest QoQ.

April 27, 2021

CQi Strategy – Bracing for a strong service sector rebound

The next few months may see a strong rebound in service consumption, as income growth and COVID vaccination accelerate. In the upcoming May holiday, domestic travel may hit a historic high of 200 million person-times, Ctrip, a leading online travel agency, forecasts. The biggest downside risk may be a COVID outbreak triggered by imported variants.

April 21, 2021

CQi Tourism – Plan now! Travel after COVID era

In early April, CQi surveyed 400 tourists across China about their appetite for leisure travel after the pandemic. Most are still cautious for now. Interest is high in Thailand, Hong Kong and Macau. Our survey shows Ctrip, merged with Qunar dominates both domestic and outbound travel and will likely benefit from the bounce-back in overall tourism.

April 21, 2021

CQi Consumer – Reining cats and dogs

CQi's consumer panel survey reveals a low rate of pet ownership in China, but we believe this number will grow. We also find that foreign pet food companies such as Mars and Champion stand out, but domestic brands are catching up, based on our panel's feedback. The dog and cat owners buy pet products mainly from big ecommerce platforms.

April 15, 2021

CQi Business Monitor – SMEs resume capex plans with stronger demand and financial health; moderate credit tightening felt

CQi's survey shows China's private sector returned to pre-crisis levels of activity in 1Q21. Yet, rising materials costs have taken a toll on manufacturers' profitability. They also see moderate credit tightening in 1Q: A quarter of them report that banks have tightened lending standards.

April 14, 2021

CQi Materials – When carbon reduction meets inflation

All CQi-tracked materials panels saw sharp demand growth in 1Q due to the negative growth base in 1Q20. Their 2Q expectations are closer to normal territory than 1Q. Most steel mills on our panel expect Hebei's curtailment measures to expand to other provinces to fulfill MIIT's output target; but fast rising PPI may be an obstacle in the near term.

April 13, 2021

CQi Business Monitor – China's home sharing market: growth prospect and challenges ahead

Chinese consumers' growing interest in authentic travel experiences is driving demand for non-traditional accommodation, official statistics show. On CQi's consumer panel, 70% of respondents are interested in choosing a homestay on their next domestic trip. Beijing's antitrust campaign may have a negative impact on the leading platforms. 

April 13, 2021

CQi Property – Strict checks on sources of down payment

More than 20% of the projects CQi tracks say their partner banks have strengthened the scrutiny of mortgage applicants' down payment funding source, and that this will impact 10% of their potential buyers. This, combined with other tightening measures, weighed on prices at the projects, speculation and developers' liquidity, our survey shows.

April 12, 2021

CQi Energy Bulletin – Solar: Avenues to cost reduction

The use of large-size wafers could be the most important means to cut costs and grow profits over the next five years say the solar producers we survey. The panel's new overseas order growth quickened in March, while domestic order growth slowed. With better supply, leading producers expect solar glass prices to correct in 2Q.

April 8, 2021

CQi Consumer Monthly Watch – Property warms up; concern over education mounts amid tightening of after-school tutoring

CQi's consumer survey shows household disposable income grew. The panel's outlook on economic conditions improves, and they are more interested in property. Concerns over healthcare eased significantly. In contrast parents' anxiety over their children's education surged as Beijing addresses the problem by limiting students' extra-curricular study.

March 30, 2021

CQi Baby Diaper – HUGGIES leads global players' market share Growth

CQi revisited 210+ mothers and 39 maternal & infant stores for the latest on China's baby diaper market. The big brands (Merries, Pampers, HUGGIES, Goo.Nand moony) grabbed market shares from smaller ones in 2020. Competition is fiercer among domestic brands. Hengan's Anerle lost ground in Tier 1-2 cities, but its Q.MO grew in lower-tier cities.

March 27, 2021

CQi Strategy –  China's anti-monopoly campaign: CQi expert interview

CQi interviewed a 25 year veteran of China's internet sector to seek his insights on where the campaign is likely heading and the impact on ecommerce platforms, internet finance, gaming, community group purchases and venture capital investment. We ask him to comment on the potential losses and gains of Alibaba, Tencent, Pinduoduo, JD and ByteDance.

March 21, 2021

CQi Healthcare – Cancer immunotherapy price war heats up as major players cut prices

Cancer immunotherapy was first approved in China less than three years ago, but the annual treatment cost per patient has since dropped from Rmb600,000 to less than Rmb50,000. As major players like Hengrui, Innovent and MSD enter into a fierce price war in 2021, who will take the lead? CQi talks to oncologists and patients for their views.

February 18, 2021

CQi Lending Lens – Southbound: Immature domestic retail investors' institutionalization may contribute to H-share volatility

The accelerating institutionalization of Chinese retail investors, seen in CQi surveys and Wind data, is likely to provide steady inflows to both the A- and H-share markets in the foreseeable future. However, our study suggests that institutionalization is still at an early stage.

February 18, 2021

CQi Business Monitor – January survey finds no respite for global shipping, PPI turns positive on input cost inflation

Our survey in January finds the global shipping crunch showing little sign of easing. Shortages of vessels, containers and workers, compounded by robust US consumer demand, created serious logistics bottlenecks. Higher factory gate prices charged by our SMEs are reflected in PPI, which turned positive in January, for the first time in 19 months.

February 9, 2021

CQi Property – Lending slowdown and tightening in big cities

A CQi survey reveals slower mortgage lending and city level tightening even as general mortgage conditions are little changed. Sales managers expect a modest impact from the recent policy tightening in big cities. Travel restrictions related to recent COVID outbreaks may aid post-CNY sales in large cities, while hurting lower tier city sales.

February 9, 2021

CQi Materials – Positive forward price views on metals; COVID policy hits workers travel home

All CQi material panels saw strong YoY growth in January due to low base. They expect the base effect of COVID related production closures last year to continue. Large numbers of workers are not returning home this CNY. Steel and copper panels expect their operations to return to normal faster than in previous years.

February 7, 2021

CQi Strategy –  What's going on with COVID vaccination and when could China achieve "herd immunity"?

CQi surveys of families and businesses, and our talks with local CDC experts indicate that China's COVID-19 vaccination program is speeding up even as it faces various obstacles. These include tight supply, increasing public hesitation and complacency, and the risk that new COVID variants could undermine the vaccines' efficacy.

February 4, 2021

CQi Property – Positive impact of hukou reform on property sales has peaked

With hukou restrictions now virtually removed in all 1,970 small cities and some Tier 1 cities taking milestone steps to loosen their hukou controls, the positive impact of hukou reform on home demand, especially in small cities, may have peaked, CQi surveys suggest. Meanwhile, room for further hukou relaxation still exists in large cities.

February 4, 2021

CQi Consumer Monthly Watch – Retail investors' interest in stocks, funds & Hong Kong market rises

CQi visited the retail investors on our consumer panel at the end of January and noticed their high interest in funds and the HK stock market. In household income growth, the lower income groups continue leading the recovery. We also heard increasing complaints among Chinese consumers about inflation in January.

February 3, 2021

CQi Ecommerce – Survey of community group purchase value chain shows Meituan leads, PDD lags

After Beijing tightened the regulation of community group purchasing, CQi surveyed different players along the supply chain. Meituan Youxuan not only leads in popularity, but is also ranked second next to Xingsheng Youxuan for its operational capabilities by group leaders and merchants. Duoduo Maicai's performance is disappointing.

January 31, 2021

CQi Strategy – What's behind the antitrust campaign targeting Big Tech?

China's internet giants have been in the eye of an antitrust storm since November. The anti-monopoly campaign in the internet sector is apparently approved by the top Party leadership and is focused on "three major monopolies" and "one major risk", CQi believes based on our read of new government rules.

January 20, 2021

CQi Healthcare  - China's explosive online health market

A CQi survey shows consumers mostly use online health platforms to make doctor's appointments. In e-commerce, JD Health is widely used by our panel in top-tier cities, while Alibaba Health is more popular in lower-tier cities. Ping An Good Doctor is our panel's top choice for online medical consultation, followed by HaoDaifu and WeDoctor.

January 17, 2021

CQi NEV Market Monitor – Local brands feel the heat of Tesla price cuts

All contacts at 15 sales centres of four leading domestic NEV brands that CQi surveyed say the Tesla Model Y's recent price cut has affected their business, directly resulting in 2.3-4.3% of their orders being cancelled. The CQi NEV panel believes the average price of NEVs will fall from here while core raw material prices could go up.

January 17, 2021

CQi Business Monitor – Private firms finished 2020 strong, but higher input costs begin to pinch

Private companies tracked by CQi are on a much sounder footing in 4Q than in the previous quarters of 2020. Domestic and overseas orders continued to rebound and firms' financial conditions further improved. However, rising input costs, reflected in soaring commodity prices, are increasingly a concern for small businesses.

January 14, 2021

CQi Education – CQi surveys students of Xueersi.com, Yuanfudao, Zuoyebang, Youdao and Koolear

The pandemic in 2020 made it easy for online education companies to raise money in the capital market. The key question now is whether these platforms can retain the customers. To answer this question, CQi surveyed nearly 300 students using the five top K12 online education platforms in November and compared the platforms' weaknesses and strengths.

January 14, 2021

CQi Strategy – China COVID update: New outbreak a risk to business ahead of CNY

A dip in household consumption poses the biggest risk to China's economy in the current COVID-19 outbreak. The traditional part of the service sector is most vulnerable to such a scenario. The pickup in cases in a few northern Chinese cities in December had already dented consumer sentiment in that month as shown by CQi's latest Consumer Monthly.

January 13, 2021

CQi Strategy – Model Y splash and the China supply chain

The shining debut of Tesla's Shanghai-made Model Y is evidence that China has retained its role as the world's manufacturing powerhouse even as it moves higher up the value chain. After over two years of integration, Tesla and China's NEV supply chain are closely bound. This process may be replicated in clean energy and healthcare industries.

January 12, 2021

CQi Property – Financial squeeze to hurt smaller developers and secondary market more

CQi's survey indicates that new caps on loans to property sector may have a mild impact but the impact on small developers may be disproportionately felt. Managers' short-term outlook in Tier 2-3 cities remains unchanged from November, but in Tier 4-5 cities it wanes. Price growth slowed in December and is likely to be mild in the next 1-2 months.

January 11, 2021

CQi Energy Bulletin – Solar: Wafer size matters

CQi's latest survey on 22 manufacturers shows 166mm and 182mm wafers currently have higher gross margins than 210mm wafers. PV system developers say using higher-efficiency modules based on larger wafers could be critical to cutting development cost. CQi's solar panel expects Europe to contribute more to future sales revenues.

January 7, 2021

CQi Consumer Monthly Watch – Sentiment tempered by lingering pandemic

The YoY household disposable income growth tracked by CQi turned positive at the end of 2020. But the recurrence of COVID-19 in China cast a shadow over consumers' outlook on income, family financial situation and business conditions. Their intentions to spend and borrow loans are also affected. The panel's interest in the A-share market rose.

January 4, 2021

CQi Wealth Management – How are Chinese high-net-worth individuals changing after COVID-19?

The investment preferences of China's growing number of high-net-worth individuals (HNWIs) are changing amid the volatile market environment resulting from the pandemic, a China Banking Association survey shows.

December 15, 2020

CQi Catering – Dining at Haidilao, Xiabu Xiabu, Jiumaojiu, Yum China & McDonald's

CQi surveyed nearly 300 diners of several listed restaurant chains in early December. These consumers expect a strong increase in their dining-out spending in 2021 over 2020. The comments on Haidilao are generally positive and consumers' willingness to buy Haidilao-branded instant food and condiments is high.

December 15, 2020

CQi NEV Market Monitor – A bumper year!

Despite the pandemic, 2020 could be the best year for NEV players since China embraced this industry in 2013. Besides potentially record-breaking sales, the year also saw accelerated trading-up among consumers and rising consolidation in the sector. We see leading brands reap the early benefits of autonomous driving commercialization.

December 14, 2020

CQi Strategy – Demographic alarm rings louder in 2020

Births at maternity hospitals CQi surveyed in 20 cities dived 24% YoY in 10M20, and are expected to slide further in 2021. With China's once in a decade national census due for release in April our findings foreshadow rising pressure on policy makers to remove remaining family planning controls and switch to proactively support the birth rate.

December 14, 2020

CQi Business Monitor – SMEs brace for stimulus withdrawal

Orders and profitability for SMEs on the CQi panel continue to see solid improvement. Despite this, about 30% of manufacturers we track expect that they will be significantly affected by the expiry, at the end of December, of a number of COVID-related stimulus measures benefiting SMEs.

December 13, 2020

CQi Energy Bulletin – Solar: Growing pains

The supply-demand gap of silicon materials narrowed modestly, while the shortage of solar glass worsens. The producers say such growing pains may last longer than expected, as the whole supply chain experiences rapid and large-scale capacity expansions. The tier-1 players expect to cut ASPs next year to protect demand for their products.

December 13, 2020

CQi Property – This month we talk to 180 realtors on the secondary and rental markets

Prices on CQi panel rose strongly MoM in November. Investor sentiment eased further. In short term, developers face less pressure to cut prices and sales outlook improved slightly. In secondary market, realtors expect more properties to be listed, likely to help secondary sales but to weigh on primary sales. Yields on our rental panel fell further.

December 8, 2020

CQi Consumer Monthly Watch – Luxury ecommerce lacks price advantage

CQi tested the popularity of four luxury ecommerce platforms in late November. The platforms' lack of price advantages, consumer concerns about product authenticity and their preference for buying luxury in physical stores result in few purchases from the platforms. In November the blue-collar workers on our panel saw faster income growth.

December 7, 2020

CQi Strategy – Pork prices could bring deflation in 2021

Pork prices peaked in 1Q20, trended in line with the scenario CQi laid out based on the results of our survey. The ongoing recovery in pork supply could see prices fall further in 2021, and probably bottoming in 4Q21 if the pork cycle we surveyed before repeats. The falling pork prices may push CPI into negative territory in 1Q21.

December 3, 2020

CQi Business Monitor – Will COVID-19 accelerate or slow the shift of manufacturing out of China?

In the early days of COVID-19, there was a rise in commentary suggesting the pandemic would quicken the trend of companies leaving China. However, the strength and resilience of China's manufacturing evident in 2Q and 3Q, China's joining regional trade deals and a new US President may convince some firms to put their relocation plans on hold.

November 24, 2020

CQi Strategy – Stimulus expiration and bond defaults may prompt easier money supply in the near term

The looming expiration of many of the COVID-related stimulus measures as well as recent turmoil in the corporate bond market may force policy makers to ease money supply in the near term. Looking further into next year CQi expects monetary and fiscal policy to become incrementally tighter than in 2020.

November 15, 2020

CQi Energy Bulletin – Solar: Switching to the fast lane ahead

The leading brands CQi tracks are benefiting more from the domestic solar market recovery than smaller players, evidenced by their accelerating sales growth and October new orders growth. For the next three years, producers on the panel expect a double-digit CAGR amid pro-solar policy moves in both domestic and overseas markets.

November 15, 2020

CQi Wine – Talk with Penfolds distributors after import halt

CQi's revisit to Penfolds distributors confirms news reports of China's ban on Australian wine import. Our check shows that the distributors' reluctance to sell has exacerbated the tight supply of Penfolds and resulted in price surges. In the long run, the distributors have confidence in the brand and hope the ban could be lifted in 4-6 months.

November 12, 2020

CQi Property – 2021 Outlook

Property prices on the CQi panel fell MoM in October. Sales were up YoY, but down MoM. Managers' feedback show price cuts are still likely in the next 1-2 months, and their view on sales is negative. For 2021, China's property sales and new starts are likely to drop by low single digits and investment may slow yet remain positive.

November 12, 2020

CQi Business Monitor – Stronger orders and profitability for small & medium enterprises in October

The business environment for private companies tracked by CQi improved in October. However, changing consumption patterns arising from the pandemic have created winners and losers in the economy, and our data shows that the pace of recovery differs widely among sectors.

November 11, 2020

CQi Consumer Monthly Watch – Chinese appetite for "fake meat" is small

CQi looked at consumers' appetite for fake meat in late October, and finds that it faces a difficult pathway to popularity in China. As a processed food some consumers are concerned about health while others are sensitive to price. Separately, the panel's income outlook improves further and their intentions to buy luxury goods rose.

November 9, 2020

CQi Consumer – 5G mobile launch boost

5G mobile phone ownership on CQi's consumer panel hit 13% in October and real 5G users account for just 4%. A further 30% plan to buy 5G phones, fewer than in May. But replacement cycle, acceleration of 5G mobile launches and operators' promotions may turn consumers who don't plan to buy 5G mobile phones into 5G users faster than expected.

November 9, 2020

CQi Consumer Credit – Booming wealth management, gloom for consumer loans

A CQi semi-annual survey of urban Chinese consumers shows increasing enthusiasm for wealth management services. In contrast, a smaller share of the panel used consumer loans in February through August, reflecting their cautious sentiment during the pandemic. Tighter regulation will likely hamper consumer loan issuance, experts say.

November 5, 2020

CQi Strategy – Biden win could add marginal fuel to China's recovery

Latest CQi surveys show that, compared with the re-election of President Trump, a victory by Joe Biden in the US presidential election is seen by the minority of consumers and SME owners who expressed a preference as having a marginally more positive outcome for their lives and businesses over the next four years.

October 22, 2020

CQi NEV Market Monitor – Tesla begins to export made-in-Shanghai vehicles; its price cuts in China viewed well

Tesla begins to export China-made Model 3 vehicles to Europe, and our source says about 20% of its Shanghai plant's capacity will go to export. Tesla's latest price cut may boost sales strongly and bring new challenges to its Chinese rivals. The panel remains positive on 4Q outlook, expecting more government procurement and policy incentives.

October 20, 2020

CQi Materials – 4Q expectations soften

CQi-tracked materials panels saw a mixed demand picture in September: cement and steel outperformed, while copper underperformed. With the property tightening, most panels lowered their growth expectation for 4Q, although they still expect positive YoY demand growth. Steel mills' high output may put pressure on their profitability in the winter.

October 20, 2020

CQi Luxury – Chinese consumers aspire to premium luxury after pandemic

CQi's survey of 400 luxury shoppers across China shows their overall spending has declined due to the pandemic. Most of the purchases now happen onshore. CQi also sees a clear upgrade trend. The internet is important for searching information, but it's hard for ecommerce to grow a big role selling luxury goods.

October 19, 2020

CQi Lending Lens – New avenues for NPL disposal and capital replenishment

Official data shows the YoY growth of incremental loans fell significantly in 3Q to 5% from 29% in 2Q, echoing earlier CQi surveys reflecting a switch to "moderation mode". New channels are initiated to carry out the goal of Rmb3.4tn in NPLs disposal. Consolidation and SPBs, two means of solving banks capital inadequacy threats are gaining ground.

October 19, 2020

CQi Property – Feeling the pains of tightening

Financing policies for developers and property buyers tightened. CQi expects more merger and acquisition among leading developers and scale of newly issued mortgages to be limited. Close to 40% projects on CQi panel cut prices during 1-8 October, led by listed developers. Managers' sales outlook wanes and developers' pricing strategies are split.

October 18, 2020

CQi Business Monitor – Survey of SMEs shows slowing progress of domestic rebound

Data from this month's survey of private companies indicate the economic rebound is mostly on track. However, the SMEs have not recovered all of the lost ground. Demand remains weaker than a year ago. Orders at the service companies and profitability among the manufacturers show a small relapse in September, aggravated by rising input costs.

October 18, 2020

CQi Strategy – Emerging signs of slowing recovery despite 'revenge consumption' in Golden Week

CQi data suggest the sustainability of the much heralded "revenge consumption" seen during the October Golden Week may be in doubt. The latest CQi surveys saw momentum slide in several key areas: consumer sentiment, new orders at service SMEs, and property sales in key cities in September.

October 15, 2020

CQi Energy Bulletin – Solar: Wafer giants secure long-term silicon supply to prompt vertical integration

Wafer giants tracked by CQi signed long-term contracts recently to secure silicon supply and facilitate vertical integration, as solar market growth looks set to become more sustainable. Expecting more PV installations in 2021-25, the solar players we track are prioritizing the development of higher-efficiency batteries.

October 12, 2020

CQi Consumer Monthly Watch – Top destinations for leisure travel during the Golden Week holiday

A smaller share of the CQi consumer panel travelled for leisure during the Golden Week this year than last. Still, tourism is picking up. Chongqing, Shanghai and Sanya overtook Beijing, Qingdao and Chengdu as the top 3 destinations. Disposable incomes improved and upper and lower middle income groups' YoY income growth turned positive.

September 21, 2020

CQi Lending Lens – Banks' profitability being eroded as provisions for bad loans increase

Chinese banks' unprecedented net profit decline in 1H20 looks set to continue in 2H, due to the massive provision increase required by Beijing to dispose of Rmb3.4tn in NPLs this year. If listed banks' 2H loan impairment losses are of the same scale as those in 1H, their net profit growth could be negative 16% YoY in 2020.

September 21, 2020

CQi Materials – Cement demand slightly better than expected

The average cement sales on the CQi panel grew by 3.8% YoY in 1H September, slightly better than their earlier expectation. Meanwhile, long steel demand was weaker than expected. We believe brought-forward restocking and speculation demand in July are the main contributors to the demand divergence in the steel and cement sectors.

September 20, 2020

CQi NEV Market Monitor – Can China's NEV players replicate the smartphone industry's success?

Are there parallels between the development of China's smartphone brands and the more recent emergence of New Energy Vehicles? The CQi panel says there are and they believe that domestic NEV players will be able to replicate the smartphone industry's success. Official data show that inventory at Tesla's Shanghai factory rose considerably in August.

September 20, 2020

CQi Strategy – Policy refocusing on long-term goals amid looming decoupling risks

CQi sees increasing signs that COVID-19 is no longer at the centre of Beijing's policy making. Facing escalating risks of decoupling with the US, policy has refocused on long term economic and social goals, a shift that we believe will be unveiled in the 14th Five-Year Plan due to be drawn up next month.

September 15, 2020

CQi Consumer – Midea, Gree, Haier & Xiaomi lead in big home appliance

CQi conducted a survey on consumer appetite for big home appliances in August. The overall purchase plan for the next 12M is weaker than the past 12M. CQi sees growing demand for sweeping robots and dishwashers due to their lower penetration. Compared to traditional makers like Midea, Gree and Haier, Xiaomi is winning customers by being 'smart'.

September 15, 2020

CQi Business Monitor – Orders inch forward, shipping costs spike, fashion falls foul and factory wages finally rise

Business conditions for SMEs continued to improve but the pace of progress varies widely across sectors. Export orders remain negative; domestic orders are close to returning to 2019 levels. Factory wage growth turned positive YoY for the first time since January, yet labour market slack is evident. Some SMEs try livestreaming with mixed results.

September 14, 2020

CQi Materials – Environmental enforcement tightens but YoY impact seen weaker

All CQi-tracked material panels saw positive demand growth in August thanks to the accelerating recovery in manufacturing. Most panels expect demand to stay positive in September. Despite renewed environmental enforcement, the majority of the panels expect winter cuts to be less impactful, or the same, as last year.

September 10, 2020

CQi Property – Tightening continues; sales and prices outlook positive

Several cities tightened property rules in August and early September. Beijing clarified the "three red lines" on refinancing of developers. Mortgage application process showed signs of slowing. CQi expects developers to cut prices for the rest of the year given the low fulfilment rates. Managers' short-term sales outlook remained positive.

September 9, 2020

CQi Energy Bulletin – Solar: Leading players bid on capacity expansion of promising technologies

Most solar producers CQi surveyed recently still face tight silicon supply, with a supply gap of 10% on average. Leading players are conducting large-scale capacity expansion on monocrystalline type products, PERC and TOPCon battery technologies.

September 6, 2020

CQi Consumer Monthly Watch – Consumption warming up

CQi's consumer survey shows that household income continued to rebound. The panel's outlook on future family financial conditions also improved. Their intention to spend is warming up as fewer people predict a YoY income decline after the pandemic. Their preference for property picked up but sentiment toward the stock market softened a bit.

September 2, 2020

CQi Consumer – The growing commercial health insurance market

China's aging population and shrinking workforce are weighing heavily on government coffers, according to a recent CQi report Ready to retire: China's baby boomers step down. Now, as the economy slows further due to the COVID19 pandemic, we expect the government will tighten the growth of national (aka social) health insurance fund expenditure.

August 26, 2020

CQi Business Monitor – Jobs in a pandemic: survey of college graduates

A majority of the graduating students CQi interviewed last month told us it was harder to find a job than in previous years. Salaries for those who found work are much lower than they expected. The tough job situation today has dented students' confidence in the future.

August 24, 2020

CQi Special Report – Ready to retire: China's baby boomers step down

Leveraging its vast grassroots network, CQi examines one of the most important issues China faces in the coming decade: the country's aging population. In the 2020s the baby boomer generation – born in the 1960s – will retire, marking an acceleration in the decline of China's workforce and a massive addition to the ranks of the country's elderly.

August 23, 2020

CQi Strategy – Post COVID-19: Long-term changes in consumer behavior

CQi's consumer panel list the "long-term changes" in their life post COVID-19. The results reflect growing caution among families, which from a 1-3 years' perspective may weigh on travel, luxury goods, dining out and imported fresh food. Meanwhile, healthcare, online shopping, sportswear and kitchenware may benefit from the trend.

August 19, 2020

CQi Materials – Cement plants on the money as sales recover

Sales at 65% of the CQi-tracked cement panel turned positive in 1H August as the wet season comes to an end. And 72% of our panel report sales growth has been in line with their earlier expectations. Cement sales in 1H August grew 3% YoY, up from July's -4%. Infrastructure continued to outperform among major downstream sectors.

August 19, 2020

CQi Lending Lens – Joint lending faces more regulation and consolidation; Ant Group leads

Joint lending involving Internet tech companies has been a key driver of China's booming consumer credit market. However CQi analysis shows that the Rmb2 trillion loan market is slowing due to the pandemic and fiercer competition. Tech giants like Ant Group, Ping An and WeBank are expected to consolidate their leading position.

August 18, 2020

CQi NEV Market Monitor – Exports offer appeal to Tesla and supply chain players

Tesla may look at exports sooner than anticipated as its production capacity is ramping up faster than its sales growth in China, say our industry contacts. Most battery producers and materials suppliers we track are accelerating their exports into overseas markets. Sales centres indicates customers are interested in battery-as-a-service (BAAS).

August 16, 2020

CQi Materials – Quick turnaround expected post floods

Hit hard by floods, sales at CQi's cement panel was down by 3.9% YoY in July. But the panel expects August demand to quickly recover. All other CQi material panels saw positive YoY order growth in July and expect the same in August. MIIT's new steel capacity swap rules might have little impact on new capacity being added from now to 2022.

August 14, 2020

CQi Business Monitor – Policy continuity needed for SMEs

COVID-19 continued to weigh heavily on overseas demand for exporting manufacturers on CQi panel. Profitability of SMEs saw little improvement in July. Private companies remain reliant on government's support measures and some of them expect to be badly impacted if authorities withdraw monetary and fiscal stimulus now.

August 12, 2020

CQi Property – Further tightening likely; full-year sales outlook improves

More local governments issued tightening policies, raising the prospect of further tightening in cities with price hike. Property prices on CQi panel rose MoM in July, but managers' full-year outlook softens given the renewed tightening and oversupply seen in the rest of the year. Sales rose YoY in July and managers' full-year outlook improved.

August 10, 2020

CQi Energy Bulletin – Solar: Tight material supply drives up prices

The CQi solar survey reveals upside room for prices in the near future as tight material supply remains and order backlogs grow. Further price hikes in supply chain could hurt solar system developers, and in turn dampen demand and export growth, our industry panel says. Some producers we track are planning a strategic shift to the domestic market.

August 10, 2020

CQi Consumer Monthly Watch – Consumer confidence softens, while A-share sentiment rises

CQi's consumer survey reflects continued recovery in household disposable income growth. The panel's income outlook continues to be dampened by uncertainty around the coronavirus however. More consumers plan to hold back on their post-virus consumption. The panel's investment sentiment on bank deposits, stocks and their own businesses improved.

August 9, 2020

CQi Strategy – Profile of A-share investors

CQi interviewed 200 retail investors in the A-share market. The mood among them seems far from overheated despite the July rally, and the families' ample savings appear to be supportive of more stock buying. While a bull market may boost overall consumption only mildly, it could offer stronger support to spending on travel, education and autos.

July 28, 2020

CQi Ecommerce – Discussion with merchants about PDD

CQi revisited 500 e-shoppers for our ecommerce survey and 46 PDD merchants about the platform's sustainability. The reopening of economic activity offline has diverted some online traffic. Alibaba maintains its leading position. JD and PDD gained popularity. The PDD merchants appreciate the effectiveness of the cheap prices in attracting consumers.

July 22, 2020

CQi Strategy – Three key factors weighing on consumption recovery

Based on recent surveys, CQi sees income decline, debt repayment pressure and consumers' fears of a 2nd COVID outbreak as the three key factors weighing on consumption in China. The slower recovery in retail consumption when compared with investment may persist throughout 2H as these three factors remain in play.

July 17, 2020

CQi Entertainment – Survey shows Bili gains vs iQiyi's loss in 1H20

CQi survey shows that although iQiyi still leads in long-form video traffic, the share of iQiyi subscribers on the panel has declined from October. In contrast, the number of Bilibili's subscribers has jumped. Douyin keeps its leading edge on short video, and also becomes the most popular platform where people watch livestreaming.

July 16, 2020

CQi Business Monitor – Headwinds for exports still strong, rebound in domestic activity flattening

Business conditions for private companies tracked by CQi improved in 2Q in terms of demand, profitability and access to financing. Export orders of manufacturers, however, continued to see a steep YoY decline. The pace of recovery in domestic demand seems to be flattening out. New orders of service SMEs dipped slightly more YoY in June than in May.

July 15, 2020

CQi NEV Market Monitor – Customers see autonomous driving as a must rather than a plus

NEV makers and sales centres CQi tracks say customers today see autonomous driving functions as a critical factor for their purchase decisions. This could be a new catalyst for autonomous driving's commercialization, which has been accelerating since late last year. Tesla leads in autopilot applications, but faces new rivals.

July 15, 2020

CQi Lending Lens – Moving to moderate mode

CQi financials surveys confirm that monetary policy is switching to a moderate mode as the economy recovers and the authorities move to rein in capital arbitrage. Most of the lending firm manager's CQi talks to make it clear the loan extension policy has softened the NPL rate. Meanwhile, New Asset Management Rule may be prolonged for a second time.

July 13, 2020

CQi Materials – Positive 3Q outlook

All CQi-tracked materials panels saw positive YoY growth in June. All panels expect positive growth for July though cement plants we talked to in flood affected areas yesterday now expect to see negative demand. For 2Q, the panels had flat or positive YoY demand growth, and their expectations for 3Q are generally higher than 2Q.

July 12, 2020

CQi Strategy – COVID-19: Analysis of a second wave

The second COVID-19 outbreak in Beijing in June hurt local SMEs' revenue growth and prompted consumers to cut spending again, CQi surveys show. The government response was fast and overwhelming and infections were quickly contained. Beyond the capital, CQi-tracked SMEs, property projects and consumers are on high alert for a second outbreak.

July 9, 2020

CQi Energy Bulletin – Could intensifying geopolitical conflicts interrupt China's solar export recovery?

The CQi energy panel said some of their overseas orders, previously cancelled because of the pandemic, have come back. Despite the escalation of tensions between China and its key trading partners in the solar sector, i.e. India, Europe, and Oz, exporters expect that, in 2H, they will achieve single-digit growth and domestic demand will recover.

July 9, 2020

CQi Property – Price growth accelerates; Tier 2 cities to benefit from Hukou reforms

CQi's latest survey shows property sales continued to rebound in June and managers are confident on sales in the next 1-2 months. Price growth picked up, and three cities issued modest tightening measures in response. With more hukou policy loosening in big cities, smaller property markets face more pressure from population outflow.

July 8, 2020

CQi Sportswear – Heavy promotions in the wake of pandemic; Nike holds firm in lead position

CQi talked with both sportswear consumers and retailers in June. COVID-19 has hit business hard and resulted in heavy promotions throughout 2020. But long-term growth prospects seem strong driven by people's demand for both sports and leisure wear. Nike holds firm to its lead position in China. Li Ning stands out in lower-tier cities.

July 7, 2020

CQi Consumer Monthly Watch – Tensions with Australia show impact

CQi checked with our consumer panel about their attitude toward Australia. Clearly the deteriorating relationship between the two countries has led to an increase in negative views and affected the appetite for Australian products. Also their desire to travel to Australia and send their children to study there is affected by the tension.

July 2, 2020

CQi Strategy – Auto dealership survey: Trading up continues amid tepid post-virus recovery

CQi revisited 50 auto dealers to reveal a tepid recovery in sales under the impact of COVID-19. The dealers still expect a double-digit sales decline this year, but a 9% YoY rebound in 2021. They are more confident in NEVs than in ICE cars. The price trend of the best-selling cars provides strong proof that auto buyers are continuing to trade up.

June 25, 2020

CQi Business Monitor – China-based European businesses navigating in the dark

The Business Confidence Survey by the EU Chamber of Commerce gives an extensive analysis of European firms' operations in China. COVID-19 is expected to exacerbate the slowdown in revenue growth that EU firms reported for 2019. Despite the challenges, EU firms will remain committed to China but they call for Beijing to widen market access for them.

June 22, 2020

CQi Strategy – Auto buyer survey: Who is buying cars?

A CQi survey of 233 families interested in buying a car gives insights on the COVID-19 impact on auto demand. Though 25% went ahead with their plan to buy in the past year, another 25% cancelled. The 51% planning to buy in the next two years clearly prefer foreign & JV brands to domestic ones, and a third of them are considering an EV.

June 18, 2020

CQi Lending Lens – Bank capital inadequacy: threats and solutions

Banking data shows that liquidity easing designed to spur economic recovery risks triggering capital inadequacy thresholds at Chinese banks something that may require them to raise capital promptly. CQi analysis of bank data suggests that about Rmb1.4tn in capital may be needed in 2Q-4Q to keep banks' capital ratio stable compared with 4Q19.

June 14, 2020

CQi NEV Market Monitor – Bringing NEVs to the countryside and allowing global brands to raise stakes in JVs

CQi sees early signs of a market recovery but the momentum is weak. Managers at NEV sales centres say bringing NEVs to the countryside may help them tap into the extensive potential demand from rural consumers. Beijing may welcome more global brands to increase their stakes and even gain controlling shares in their NEV joint ventures in China.

June 14, 2020

CQi Materials – Domestic demand stable; exports still weak

The majority of CQi material panels saw flat or positive YoY demand growth in May, but exports remain weak. With the pent-up orders having been mostly released, most of the panels expect orders to fall slightly YoY in June. Steel mills plan to further lift their utilization rate in June despite the wet season, a traditionally slower demand period.

June 12, 2020

CQi Business Monitor – Exporters strive to survive and PPE boom to falter as domestic recovery inches forward

Export orders at CQi-tracked SMEs fell more in May than in April; domestic orders improved at a slow but steady pace. Struggling exporters seek various ways to mitigate losses, such as diversifying to producing medical supplies and tapping into domestic markets. Some Chinese manufacturers appear to be speeding up automation.

June 10, 2020

CQi Strategy – How likely is a wave of consumer defaults?

CQi consumer surveys and our reading of banks' NPL disclosures indicate increasing repayment pressure on households. Yet a significant increase in household defaults still seems unlikely thus far. Families with debt have to use an average 37% of their disposable income to pay down debt, up slightly from pre-virus level.

June 9, 2020

CQi Property – Full-year outlook still weak; virus brings down rental yield

Full-year outlook on sales of sales managers CQi surveyed in May did not improve much from March, though their short-term outlook was positive. Managers saw property new starts rise MoM in their cities. Rental yield at delivered residential projects dipped vs November last. Only low-end projects saw their average rent pick up as renters downgraded.

June 9, 2020

CQi Consumer – Stronger appetite for 5G but smaller demand for premium models

Compared with CQi's 5G check in January, our consumer survey in May finds that after the COVID-19 outbreak more respondents want to upgrade to 5G. Apart from being attracted by the faster speed, they want to get ready for the emergence of 5G applications. Models priced at Rmb3,000-3,999 looks set to be the best-sellers.

June 4, 2020

CQi Consumer Monthly Watch – Recovering sentiment

CQi's consumer survey in May reveals a recovery in Chinese consumer sentiment. Expectations of better financial conditions and business conditions at their employers in 12M are almost back to pre-pandemic levels. Family incomes continue to retrace losses. Spending plans also improved. Slightly more consumers want to invest in their own businesses.

June 3, 2020

CQi Energy Bulletin – China's squeeze on Australian coal and LNG imports

CQi's energy panel expects Beijing to quietly impose tougher restrictions on Australian coal imports. Domestic coal producers don't think they can fully meet the potential supply gap stemming from import cuts, especially for coking coal; they don't expect Beijing to restrict Australian LNG imports given the high cost of breaching an LNG contract.

May 28, 2020

CQi Education – Insights into China's K-12 after-school tutoring market

CQi's survey among parents shows their persistent determination to invest in childrens' education. COVID-19 has boosted the use of online education. When life goes back to normal CQi expects the demand for online-merge-offline grow significantly. Our findings suggest market consolidation helps TAL and New Oriental increase their market share.

May 27, 2020

CQi Business Monitor – Virus disruptions to overseas education

The pandemic has severely disrupted overseas studies for Chinese students. CQi spoke with two education consultant who project a 30-40% decline in Chinese student enrolments worldwide in 2020. Such a drop would have financial implications on foreign universities and the current account balances of host countries. Australia appears the most exposed.

May 27, 2020

CQi Strategy – Consolidation to pick up among home developers amid liquidity stress

By studying the financing and sales activities of property developers, CQi believes liquidity stress at smaller developers is likely to continue despite monetary easing. As a result, sector consolidation looks set to accelerate. CQi surveys also suggests new home buying demand has been too soft to mitigate developers' liquidity risks.

May 27, 2020

CQi Lending Lens – Banks' role in supporting jobs will affect profitability

Regulators will continue to urge banks to increase support for the post-virus recovery, according to the government work report. A research note by the PBoC recently warns that banks' profit growth may stall or turn negative this year, reflecting the regulator's awareness that banks' profitability is the price to pay for doing national service.

May 19, 2020

CQi Consumer Credit – Three types of lenders on risk

CQi interviewed three types of lenders in mid-May. The bank is cautious in loosening credit access to consumers, especially low-quality borrowers; the internet finance firm is rushing to apply AI technology to detect risks early; and the P2P company remains subject to tightened regulations enforced on this industry in the past several years.

May 18, 2020

CQi Materials – Recovery picking up pace

CQi's steel and cement panels saw negative demand YoY while aluminium and copper panels had flat or positive growth in April. Thanks to the boost from infrastructure and property completion, cement, copper and aluminium panels expect positive growth or only a marginal dip in May. Cement margins improve on weak coal prices a trend that may continue.

May 17, 2020

CQi Property – Continuous recovery; full-year completions to be positive YoY

CQi's latest survey shows due to price cuts by developers around the May holiday and rising new supply, sales recovery continued in early May. 'New' demand post-CNY played increasing role in the sales recovery. Our survey also shows that the pandemic's impact on property completions was mild and we expect completions to rise YoY for the full year.

May 14, 2020

CQi NEV Market Monitor – Lithium ore imports from Oz intact; Tesla's latest price cut could win more customers

Battery material producers CQi surveyed expect lithium ore imports from Australia to remain intact despite political tensions between Beijing and Canberra. They expect Australia to remain a key supplier to China's lithium-ion battery production and its NEV market boom. We believe Tesla's latest price cut to help it reclaim lost ground in May.

May 13, 2020

CQi Business Monitor – Private firms struggle with tumbling export orders and sluggish domestic demand

China's private enterprises continue to feel the pain from the economic fallout of the pandemic. CQI's panel's export orders fell 30% YoY in April. The domestic sector has shown a partial recovery so far, but companies' domestic orders still dropped by double-digits YoY. 37% of companies laid off workers in April and 29% planned to do so soon.

May 13, 2020

CQi Consumer – Snapshot of small home appliance purchases

CQi surveys in late April show consumer plans to buy small home appliances dominate over plans to buy big home appliances in the next 6 months. Kitchenware is a big part of China's small appliance consumption, its sales boosted by the "stay-at-home" life during the epidemic. Domestic brands dominate; Midea and Joyoung are leaders.

May 10, 2020

CQi Energy Bulletin – Poor timing for the resumption of US LNG imports

Lessons learned from the COVID-19 outbreak are set to make public health one of Beijing's top investment priorities in CQi's view. Leveraging on insights provided by senior doctors at top local hospitals, CQi outlines five key areas where new investment might be concentrated.

May 10, 2020

CQi Beauty Insights III – Medical cosmetology: wanted

A recent CQi survey of Chinese women's appetite for cosmetic procedures reveals their strong interest. The vast majority of the women we spoke with want cosmetic dental treatment. The most popular facial procedures are laser skin treatment, eye plastic surgery and skin booster injection. South Korea and public hospitals are most trusted providers.

May 10, 2020

CQi Consumer Monthly Watch – Income rebounds slightly, spending intentions remain weak

Our latest consumer survey shows households' income continued to improve in April, but their sluggish outlook dampens their spending intentions. More consumers on the panel have received consumption vouchers and the multiplier effect on their spending has improved. They dislike risky assets for investment and put more money into bank deposits.

May 4, 2020

CQi Strategy – Embracing a pickup in healthcare investment

Lessons learned from the COVID-19 outbreak are set to make public health one of Beijing's top investment priorities in CQi's view. Leveraging on insights provided by senior doctors at top local hospitals, CQi outlines five key areas where new investment might be concentrated.

April 28, 2020

CQi Ecommerce – Livestreaming boom; sluggish food delivery

CQi's quarterly ecommerce survey shows online sales were resilient during the virus outbreak and momentum will likely grow stronger in the coming quarters. Livestreaming sales are attracting more interest from both consumers and merchants. Fewer consumers ordered food delivery in 1Q, but Meituan holds onto its leading position.

April 27, 2020

CQi Strategy – COVID-19 stimulus: How it works

Recent CQi surveys show Beijing's credit and fiscal easing and tax and fee exemptions, as well as local government driven measures have helped ease cash flow stress among private enterprises but we see via our survey findings insufficient support in the current stimulus for service SMEs, exporting SMEs and low income households.

April 21, 2020

CQi Strategy – Pork price peak in 1Q good news for policymakers

Based on 'CQi Strategy – Pigs in 2020' published on 5 December 2019, the findings of our survey were that pork price in China would peak in 1Q20 and th't's come to fruition. National average pork price in 3W April dropped to Rmb53/kg from a peak of nearly Rmb60/kg in 3W February according to the Ministry of Agriculture.

April 16, 2020

CQi Lending Lens – Controlled liquidity easing

Cash flow stress among SMEs, which spiked in 1Q, is expected to ease substantially under the combined effects of credit expansion, local government intervention and business resumption, according to a recent CQi survey. Local governments are pushing lending to SMEs, part of an effort to stave off job losses.

April 15, 2020

CQi Business Monitor- Steep 1Q losses for SMEs, exporters to face bigger challenges in 2Q

We see deep damage to SME revenues, profitability and financial health in 1Q. The collapse in export orders received by the SMEs in March suggests that 2Q will be difficult for exporters, even as the domestic economy slowly recovers. Appetite for investment and labour on our SME panel is weak. SMEs have not felt the benefits of credit easing.

April 14, 2020

CQi NEV Market Monitor – Damage control; Tesla well-positioned; market may hit bottom in May

Battery makers and material suppliers CQi surveyed have tried to mitigate the pandemic's impact by suspending some production lines, cutting wages or stopping new plant construction. Feedback from NEV sales centres implies China's NEV market may hit bottom in May. Tesla could benefit from the recovery.

April 14, 2020

CQi Materials – Cautious 2Q demand outlook

All CQi-tracked materials panels saw negative YoY order growth amid the slow demand recovery in March, and expect another negative month in April. The panels have largely pushed back their estimated timing of demand normalization. Other than the cement panel, most of the other materials panels expect negative YoY demand growth in 2Q. 

April 13, 2020

CQi Consumer – Caution continues

CQi's latest consumer survey shows little improvement in their intention to consume. The panel's disposable income did improve in March vs February but YoY growth remained negative. Local governments have issued vouchers aiming to stimulate consumption, but the average leverage is only 1.2, based on feedback from the consumers who got them.

April 9, 2020

CQi Property – Weeks to normal; Wuhan update

As China's property market began to slowly recover, developers' pricing strategies diverged among city tiers, CQi's latest surveys reveal. Showroom managers expect it will take five weeks for their local markets to return to normal. A successful land auction on 31 March relaunched Wuhan's property market.

April 9, 2020

CQi Energy Bulletin – Solar hit by pandemic, but will shine again

Solar producers surveyed by CQi in early April cut their sales growth expectations for 2020 sharply as a result of the pandemic, with rising concerns about new orders. CQi believes Beijing's latest subsidy cuts could further motivate solar players to cut costs to achieve grid parity, and explore opportunities in the 5G and NEV sectors.

April 8, 2020

CQi Wine – TWE: snapshot suggests slow growth in China

CQi recently interviewed two tier 2 distributors and one retailer of Treasury Wine. TWE's Penfolds has strong brand awareness among Chinese consumers but is hurting from reduced demand for mid-to high-end wine. TWE does get credit for reducing counterfeits and parallel imports but the distributors are critical of its sales strategy.

April 7, 2020

CQi Beauty Insights – L'Oreal leads; Chinese brands make headway

The pandemic is hurting income growth in China, yet we expect the cosmetics market to return positive growth this year. L'Oreal Group's brands dominate both skincare and makeup, and remain high on our "Want-to-Buy" list in 2020. Domestic brands appeal to young consumers who are heavily influenced by social marketing and live-streaming ecommerce.

April 2, 2020

CQi Business Monitor-Beijing's two policy tools: Infrastructure and consumption

Beijing has stepped up efforts to stem the devastating impact of COVID-19. Infrastructure will again be front and centre of stimulus. CQi spoke to recruiters to see if the job market can hold up to boost consumption. We expect firms' hiring plans to freeze and wage growth to be static. 

April 1, 2020

CQi Strategy – Implications of a looming export crash

Having already plummeted 16% YoY in 2M20, China's exports look set to shrink further in the coming quarters as the pandemic worsens in China's major export markets. Exporting manufacturers surveyed by CQi expect sales to drop 30% YoY in 2020, echoing anecdotes we heard of massive export order cancellations across multiple sectors. 

April 1, 2020

CQi Property – Resumption accelerates

CQi's survey of 180 for-sale residential projects in 80 Tier 2-5 cities on 25-31 March indicates that the property market resumption has picked up into the end of March. Showroom managers reported increases in showrooms reopening, customer traffic, sales and property construction.

March 26, 2020

CQi Strategy – As China gets back to normal the pace of schools reopening is a key indicator

CQi flagged a good measure of a return to normalcy across China in an earlier Strategy note: local government plans to reopen schools. By 25 Mar, seven provinces had partially reopened schools, and eight other provinces have announced dates for school reopening. The remaining 16 provinces & municipalities have not specified the date for reopening.

March 26, 2020

CQi Business Monitor – How strong will a rebound in China's outbound tourism be? 

The two travel industry professionals CQi talked to are optimism about the longer-term development of outbound tourism which we are sympathetic. But we are concerned about the near-term implications of the virus: labour market uncertainty sees households in a more precarious financial position and more hesitant on consumption. 

March 19, 2020

CQi Strategy – Virus survey III: Faster resumption

This week CQi revisited the 343 enterprises we surveyed last month about the impact of the virus outbreak. Most of them are back to work and business has returned to 60-70% of normal levels. Cash flow stress seems to have eased slightly but firms are still bearish on the full year, expecting double-digit declines in revenue and profit.

March 17, 2020

CQi Infant formula- Recent A2M store visits amid COVID-19

CQi recently visited two maternal & infant stores in Shanghai and Jinjiang. Based on our interviews, we found the COVID-19 epidemic has had little impact on infant formula sales. A2 Milk has gained popularity on social marketing, but its future growth will rely on its innovation capability and investment in an on-the-ground sales force.

March 16, 2020

CQi Property – Conservative policies; market far from normal

Property prices on CQi panel fell across Tier 2-5 cities in response to the falling sales and weak buyer sentiment. Two Tier-3 cities' attempts to lower first down-payment ratio were cancelled quickly, a show of Beijing's resolve to curb speculation. The resumption of property construction was still slow and is likely to be slow in the near term. 

March 15, 2020

CQi Materials – Demand outlook cut

All CQi-tracked materials panels saw a big demand hit in February as downstream customers undertook a slow return to work. All materials panels expect negative YoY demand growth in 1H. We expect such a negative trend could last throughout 2020. Our examination of local governments' investment plans reveals that current plans are only up by 1% YoY. 

March 12, 2020

CQi NEV Market Monitor – Market reboot, government support

Domestic NEV players are slowly resuming operations. Battery producers on CQi panel are most pessimistic about their full-year performance. Growing output by Tesla's Shanghai plant contributes to a reshaping of China's NEV supply chain. We don't expect the revival of LFP battery to weaken NCM players' lead.

March 4, 2020

Asia Technology Strategy: Smartphones: Modest negative demand impact likely; 5G largely on track in China

Better-than-expected growth outside of China and for overall iPhone units in 2019 would have called for a positive revision to our global smartphone units estimates for 2020.

March 4, 2020

CQi Business Monitor- Foreign and domestic firms strategies amid the virus

A large share of SMEs on CQi panel plan to cut wages and staff to cope with the worsening financial health. An American Chamber of Commerce survey reveals similar measures being taken by firms. Most firms on CQi panel do not think that the virus will accelerate relocation out of China, a similar view to that reported by Amcham member companies.

March 3, 2020

CQi Consumer Credit – CMB leads; Tencent may rise to challenge Ant Financial in online lending

CQi's recent survey of Chinese households shows China Merchant Bank's lead in consumer credit. It also points to the surge of "community shopping" on Wechat, furthered by the COVID-19 virus outbreak, which gives Tencent the opportunity to develop its lending business.

February 25, 2020

CQi Strategy – Virus survey II: A slower return to work and less confident in a post-virus rebound

CQi's 2nd round of surveys across SMEs, property projects, auto dealers and cement plants indicate business is resuming more slowly than firms expected it would. Except for cement plants, most firms expect only a moderate rebound post the virus. In the struggle to survive many firms have cut jobs and wages, adding a negative drag on consumption. 

February 20, 2020

CQi Business Monitor-SMEs squeezed on falling demand and supply restrictions

Due to the epidemic and different timing of CNY this year versus last, manufacturing SMEs reported a YoY drop in orders. Service SMEs posted first YoY sales decline in five months. Logistics, tourism and food services were affected. We expect orders to fall further, transportation and labour costs to rise and margins to be squeezed for this month.

February 19, 2020

CQi Property – Virus hurts, policy supports

Property sales in 1-6 weeks of the year fell significantly YoY. Most showrooms are shut and half the projects on CQi panel have online showrooms. Sales managers expect 1H sales to fall sharply and prices to correct; those in the PRD&Fujian are less gloomy than others. Most policies from local governments aim to ease developers' liquidity pressure.

February 18, 2020

CQi Materials: Appliance and machinery sectors may recover first

CQi-tracked materials panels expect negative YoY demand this month due to the virus outbreak. The steel, aluminium and copper panels are less negative about demand from home appliance and machinery sectors. Demand for credit picked up only slightly thanks to receivables settlements before CNY, but may rise further if downstream liquidity worsens.

February 18, 2020

CQi Strategy – Tax cuts key to recovery

Eight CFOs on our SME panel reflected that large scale tax cuts in 2019 benefited consumers more than corporates, and manufacturers more than service enterprises. Given the growing risk due to the epidemic, more aggressive tax cuts, more flexible collection mechanisms, and faster tax refunds may be part of the government response.

February 14, 2020

CQi NEV Market Monitor – Virus outbreak puts sharp brake on NEV market

CQi's NEV panel tells us the ongoing virus outbreak has put a pause on the domestic NEV market. This black swan event will affect the whole industry chain and accelerate the wash out of underperformers, in particular Tier 2-3 battery producers and NEV makers face a severe challenge from an emerging liquidity crunch and rising default risks.

January 17, 2020

CQi Strategy: The deal, recovery and policy persistence

We expect China to take seriously its commitment under the Phase One trade deal leading to a surge in U.S. exports to China. CQi surveys saw more signs of recovery in big ticket consumption and manufacturing investment, led by 5G mobiles, auto upgrading, home appliances as well as manufacturing investment in automation and pollution control.

January 17, 2020

CQi Lending Lens: Loan rate falls and credit demand goes up

The CQi lending panel reports that the real borrowing cost of guaranteed loans dipped 4bps, and expectations of a relatively loose monetary environment in 1Q have risen. We think it will reduce local governments' special use bond issuance costs but continue to squeeze banks' NIM. Credit demand rose sharply, in particular for working capital loans.

January 15, 2020

CQi Materials: Sentiment improves

Demand of CQi's materials panels was flat or positive YoY in December. The sentiment of material panels and downstream manufacturers have lifted. Seasonal price corrections in cement and aluminium may be muted by low inventory levels in the supply chain. CQi's steel panel expects scrap supply to loosen slightly YoY in 2020.

January 15, 2020

CQi Business Monitor: SMEs see orders bounce and improving capex in 4Q

CQi's recent visit to 400 privately owned manufacturing and services businesses in 90+ cities reveals an improving economy. Both their domestic and export order growth jumped and they are relatively optimistic about 1Q. The firms' capex was up mildly in 4Q. Utilization rates stayed high. These SMEs are seeing improved support from commercial banks.

January 15, 2020

CQi infant formula: A2 and Feihe outperform

CQi's survey to 240 young mothers and 40 maternal & infant store owners in 20 cities indicates consumers' rising confidence in Chinese milk. Feihe is the most popular brand in lower-tier cities. A2 is fast penetrating the China market. Offline channels contribute to most of the sales and will continue to be important compared with online stores.

January 10, 2020

CQi Property: Policy tweaks

Mortgage rates edged up month-on-month (MoM). Some cities loosened policy and a few tightened. Prices and sales across city tiers were also mixed but the short term outlook for both prices and sales improved at the projects. The gap between the home affordability in Tier 2 and Tier 3 cities is small, which makes Tier 2 cities relatively more attractive to buyers.

January 9, 2020

CQi Consumer: 5G mobile sales gaining momentum

Half of the respondents planning to upgrade to 5G phones will buy in 2020. As prices of 5G mobile plans and phones fall, more consumers may be spurred to buy. The panel's YoY income growth weakens for the third month in a row. These households' free cash is returning to bank deposits while stock market sentiment has improved on the month.

January 3, 2020

CQi Strategy: Auto sales recovery and the macro impact

Half of fifty the auto dealers that CQi visited expect their sales growth to turn positive in 2020, with an average growth across the panel expected to be over 6% YoY, versus negative 1% in 2019. The sales pick up will be led by upgrading demand, dealers say, suggesting foreign joint venture (JV) brands will do better. Dealers are positive on electric vehicles (EV). 

November 27, 2019

CQi Material: Near-term demand holds up

Most CQi materials panels reported positive demand growth in October except for steel mills. Panels expect the trends to continue in November, but our observations suggest steel demand may beat expectations. Among all panels, cement plants are the most optimistic about prices in 4Q. In terms of capex spend compared to a year ago, CQi panels are cautious.

November 26, 2019

CQi Property: 2020 outlook

In October, home prices fell MoM in Tier 2 and Tier 4-5 cities; price growth in Tier 3 cities slowed. Home sales rose YoY in Tier 1-2 but fell YoY in Tier 3 cities. CQi panel expects price and sales momentum for the next 1-2 months to weaken. We expect China's property sales to fall by 0-5% YoY and investment to grow in mid-single digit in 2020.

November 15, 2019

CQi Consumer: Tracking consumer sentiment in over 50 cities

CQi consumer survey reveals slightly weaker sentiment among Chinese consumers in Oct vs Sept. YoY growth of household disposable income of the "high" and "upper middle" income groups slowed. Inflation still hurts but expectations on further price hikes cooled a bit. Interest in property investment improved but in China's stock market was still low.

November 15, 2019

CQi Strategy: Trade war pains vs economic resilience

CQi finds manufacturing under pressure from the trade war. The broad service and property sectors remain resilient; middle class households saw strong income growth. We are positive on prospects for a "phase one" trade deal. With trade tensions easing, the next few quarters may see a mild recovery in consumption and manufacturing investment.