CX Daily: How Chinese Factories Are Finding Their Way to Mexico

Makers of furniture and appliances can dodge the effects of the U.S.-China trade war while avoiding pandemic-related supply chain disruptions

Jul 04, 2022

Apart from traditional destinations in Southeast Asia for relocating manufacturing from China, Mexico is becoming a new alternative.

Manufacturing /

In Depth: How Chinese factories are finding their way to Mexico

Chinese manufacturers are increasingly setting their sights on Mexico for bringing production closer to the American market, reflecting higher costs of Chinese exports under U.S. tariffs and pandemic-related disruptions of global supply chains.

The 2018 trade war between China and the U.S. was a catalyst in a manufacturing exodus from China as rounds of tariff levies almost wiped out the narrow profits of the garment and furniture manufacturing industries in China, forcing many producers to move factories abroad.

Hong Kong /

Xi stresses Hong Kong must be governed by ‘patriots’ as city’s new chief sworn in

A swearing-in ceremony for Hong Kong’s new chief executive, John Lee, and his cabinet took place Friday, the 25th anniversary of the territory’s return to China.

Lee, a former security chief, took his oath of office in front of President Xi Jinping, on his first trip outside the Chinese mainland since the Covid-19 pandemic began two-and-a-half years ago.

FINANCE & ECONOMY

PMI /

China manufacturing activity recovers as Covid curbs eased, Caixin PMI shows

Activity in China’s manufacturing sector rebounded into expansionary territory for the first time in four months in June, a Caixin-sponsored survey showed Friday, as production improved amid easing Covid-19 prevention and control measures.

The Caixin China General Manufacturing Purchasing Managers’ Index (PMI), which gives an independent snapshot of the country’s manufacturing sector, rose to 51.7 in June from 48.1 the previous month, the survey showed. Readings above 50 signal expansion.

Shenzhen /

Chinese tech giants cut back on office space in Shenzhen

Demand for office space in tech hub Shenzhen’s top commercial properties remained depressed in the second quarter as some Chinese internet giants scaled back operations amid a strict regulatory environment and repeated Covid-19 outbreaks.

The vacancy rate of the southern city’s Grade-A offices climbed to 21.3% at the end of June, up 0.7 of a percentage point from a quarter earlier and 0.8 of a percentage point from the end of December, according to a report released Wednesday by real estate services company Jones Lang LaSalle Inc. (JLL).

China’s home sales show signs of turning the corner

Listing /

Noah Holdings seeks $43 million in Hong Kong secondary listing

Noah Holdings Ltd., one of China’s biggest wealth management companies, plans to raise as much as HK$338 million ($43 million) by selling stock in Hong Kong, the company said Thursday in a prospectus.

The company, which serves high net worth investors, is among Chinese businesses facing delisting in the U.S. in the long-running U.S.-Sino dispute over auditing rules.

Quick hits /

China adds $45 billion to stimulus to pay for infrastructure
Great Wall Asset Management misses second deadline for 2021 report

BUSINESS & TECH

Trucks in an open-pit coal mine April 3 in Fushun, Northeast China’s Liaoning province. Photo: VCG

Coal /

China to ramp up coal output as energy demand soars

China is expected to produce as much as 200 million more tons of coal this year than in 2021, with several regional hubs following Beijing’s call to ensure sufficient supply as the country faces shrinking coal imports and soaring energy prices.

China began boosting the coal supply in October in the wake of a nationwide power crunch that was caused by reduced output and a spike in power demand. In April, the State Council reiterated the importance of coal for the country’s energy security and pushed for an additional 300 million tons of production capacity this year.

Tencent /

Two Tencent vice presidents step down

Two of Tencent Holdings Ltd.’s vice presidents — Cheng Wu and Lai Zhiming — stepped down but will continue to lead important parts of the tech giant’s sprawling business interests, Caixin learned.

Cheng will continue to be CEO of China Literature Ltd., an online publishing and e-book firm controlled by Tencent, a post he assumed in April 2020.

Data /

China outlines legal path for cross-border data transfer

China’s cybersecurity watchdog is seeking public comments on a draft rule outlining a legal path for cross-border transfer of personal data.

Under the draft rule released Thursday by the Cyberspace Administration of China (CAC), qualified data processing entities could legitimately transfer personal data abroad by signing standard contracts with overseas recipients. Such contracts would embed terms in line with China’s data protection law, experts said.

Quick hits /

Zijin Mining pours $269 million more into lithium assets
Shares of AI giant SenseTime dive as much as 51% as lockup expires

Tech Insider /

Probed apps back in stores, Alibaba launches carbon accounting tool

Caixin Global China Watch

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