4/2/2021 Financial News: Communist China’s March PMI Dropped, Digital Yuan Tested Across The Hong Kong Border

Image source: xinhuanet

1.Communist China’s March Factory Activity Slowed Down

BEIJING(Reuters) – Falling short of analyst expectations of 51.3, the Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) of Communist China dropped to 50.6 last month from February’s 50.9. Communist China’s factory activity in March experienced the slowest growth since April 2020 due to softer overall domestic demand. In addition, producer price inflation in February already reached its highest level in more than two years. According to the survey, underlying economic conditions remained positive even as input and output inflationary pressures intensified for manufacturers.

The Caixin survey focuses on small, private and export-oriented firms while the official survey typically polls large and state-owned manufacturers. The findings contrast with those in an official survey showing faster growth in manufacturing activity as large firms increased production after the Lunar New Year holidays.

2.Communist China Tests Its Digital Yuan Across the Hong Kong Border

The People’s Bank of China announced on April 1 its completion of the first cross-border use test of the digital yuan with the Hong Kong Monetary Authority. The test was launched in Shenzhen, targeting Hong Kong residents who frequently travel to and from Shenzhen and who have visited Shenzhen occasionally. After successful testing, Hong Kong residents can use their Hong Kong mobile phone number to register and open a digital yuan wallet for small purchases. When making purchases, they only need to show the payment code to complete the payment through the POS machine.

Comment: Communist China is looking to push the digital yuan beyond its borders via Hong Kong with the goal of gaining adoption in other countries and ultimately dominating the global financial market with its digital currency.

3.SMIC Will Increase Prices Across the Board After April 1

SMIC, the leading chipmaker in Communist China, informed its customers via email of across-the-board price increases starting from April 1. Orders that have been placed but not processed yet will be subject to the new price, regardless of the timing of the order and the percentage of the payment. It is also mentioned that SMIC’s price hike started as early as March and the price increase varied among customers and between 8-inch and 12-inch products. In this latest round of price hike, prices are expected to increase by about 15% – 30%.

4.Surging Prices and Shortage of Graphics Cards

Because of bitcoin mining, scalper hype, and surge in game demand, the price of graphics cards has skyrocketed in Communist China. According to a recent survey by CCTV, taking the mid-to-high-end RTX 3070 graphics card as an example, when it was launched last September, the official price was only 3,899 yuan. Soaring to about 8,000 yuan, the price has more than doubled. Even used graphics cards are being sold at high prices. In addition, chip shortage limits the supply of graphics cards. For example, when a graphics card manufacturer released a new product in March, fewer than 20 units were available for purchase.

5.Communist China’s Energy Monster Shares Jumped Nearly 18% in U.S. Debut

Hong Kong (Reuters) – Shares of Alibaba-backed Energy Monster, Communist China’s largest provider of mobile charging devices, increased almost 18% in its Nasdaq debut on Thursday after the company’s initial public offering (IPO) was priced below the indicated range. The company filed its prospectus under the name of Smart Share Global and sold 17.65 million shares at $8.50 each, raising about $150 million. According to Reuters, Energy Monster was involved in an ownership dispute as the U.S. IPO was underway. There are also concerns about the future of Chinese companies listed in the U.S. following the SEC’s moves about international companies that do not meet U.S. auditing standards delisted.

6.TSMC Promises $100bn Investment to Meet Demand

The CEO of TSMC, the world’s largest chip manufacturer, recently announced that the company plans to invest US$100 billion in the next three years to build new facilities and expand existing facilities to increase production capacity and meet demand. The company is recruiting thousands of new employees, purchasing land and equipment, and constructing facilities in multiple locations around the world. TSMC is already building a $12 billion chip facility in Arizona. It is also expanding in Taiwan, including building a 3-nanometer chip facility featuring the world’s most advanced chip production technology, in the southern Taiwanese city of Tainan. He also informed customers that the company will suspend wafer price cuts for the four quarters starting from December 31 this year.

By 【Financial Team – Kate】
News Collection: 文罡、Kate
Proofreading: Tracy

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