China Market Watch: Growth in Postal Sector and New Auto Sales Records Set

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China-market-watch

China’s postal sector projected to reach RMB 1 trillion in revenue in 2020

China’s State Post Bureau has estimated that the country’s postal sector will make over RMB 1 trillion in revenue in 2020, the Bureau said. Around one million jobs will be created from 2016 to 2020 in the sector, mostly in China’s more rural regions, thereby generating quality postal services in underserved parts of the country. China’s postal system is the largest delivery network in the world, and has delivered more than 30 billion parcels this year.

China uncovers 500,000 food safety violations in the last nine months

The China Food and Drug Administration (CFDA) has announced that around 500,000 food-related scandals have been uncovered in the country over the last nine months. Chinese food safety departments conducted over 15 million individual inspections in the first three quarters of 2016. Offences include rice contaminated with heavy metals, the use of recycled cooking oil, melamine contaminated infant formula, use of industrial gelatine in food, counterfeit and low-quality salts, as well as counterfeit ingredients and false advertising. China has been continuously scourged by food scandals, though such scandals have not featured as heavily in the media following the implementation of stricter food safety laws this year.

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Auto output and sales in China set new records in 2016

The China Association of Automobile Manufacturers has announced that the country’s auto sales and output continued to expand during the first 11 months of 2016, reaching a record high. From January to November, around 25 million cars were sold, up 14.1 percent year-on-year. New energy vehicle sales more than doubled last year’s sales, while general vehicle production rose by 14.3 percent compared to 2015. Continued growth in the industry can be attributed to tax reductions for smaller cars and an increase in demand for SUVs, as well as reports of a stabilizing economy both domestically and abroad. The small vehicle tax cut scheme has since increased, which may affect sales in 2017.

China’s efforts to curb air pollution to impact commodities supply

In an effort to combat increasing levels of air pollutants, China has shut down exhaust heavy factories such as steel mills, textile and cement factories, and coal fired power plants. This effort will have significant effects on 2017’s bulk commodity markets. Raw materials such as iron ore and coal will be most affected by the closures. Other incidences of factory closures, such as in Hangzhou for the G20 summit, were prepared for in advance, giving markets time to adjust accordingly. Iron ore delivery is set to drop by 9.3 percent this week, the biggest decline since May 2016. Similarly, steel and industrial coke are set to fall by 11 and four percent respectively this week.


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