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The Star
5 days ago
- Business
- The Star
Beijing urged to curb 'free milk tea'-style cash burn in e-commerce battle
With e-commerce platforms locked in fierce competition for China's instant retail market, a prominent Chinese economist has called for government guidance that balances regulatory oversight with innovation and a push for new growth drivers. Wang Yiming, a central bank adviser, said 'quick commerce' – involving the rapid delivery of food and essential goods, often within 30 minutes – creates new opportunities for consumption, which could be vital for long-term growth. He urged officials to guide the sector's high-quality development through targeted policy measures. 'Anti 'involution'-style competition is not against competition itself, but against behaviours that undermine fair competition,' said Wang, who also serves as vice-chairman of the China Centre for International Economic Exchanges, a Beijing-based governmental think tank. 'Instead, the goal is to raise competition to a higher level – moving away from a zero-sum mindset towards a win-win approach through innovation, quality upgrades and a better industrial ecosystem.' Beijing has increasingly warned about 'neijuan' – cutthroat competition that drives prices down and suppresses domestic demand. E-commerce giants, including Alibaba and Meituan, have been at the centre of the controversy as they fight to lure customers through aggressive subsidies. After warnings from China's market regulator in late July, the three firms pledged to embrace 'rational' competition and stop incentives such as free giveaways. However, they continue to offer substantial discount coupons. Alibaba owns the South China Morning Post . At a closed-door meeting in late July organised by the Beijing-based think tank New Economist, Wang said the current cycle of competition reflects shifting market dynamics as platforms prioritise speed, efficiency and deeper customer engagement over sheer size and geographic reach. 'On the surface, competition among e-commerce platforms appears to be a battle for market share, but beneath this lies a deeper transformation driven by the technology revolution, reshaping e-commerce service models,' Wang said. Instant retail holds strong potential to boost domestic demand, he added, as China's service sector still has ample room for growth while household spending on services continues to rise. In a research note released last week, Morgan Stanley analysts said instant retail can help merchants expand their customer reach, especially to lower-income consumers in smaller cities, while subsidies from platforms boost consumption, rider incomes and employment. 'Quick commerce is unlocking new spending and replacing offline consumption, with limited cannibalisation of the current e-commerce pie,' the note's authors said, estimating that market demand could reach 2.5 trillion yuan by 2030. Despite Beijing's pressure on the industry, which is limiting giveaways and other incentives, competition would likely remain intense because it has proven effective in attracting new users and boosting demand, according to the analysts. 'China's 'anti-involution' guideline should curb 'free milk tea'-style cash burn. It's not aimed at stopping competition, but rather guiding it towards efficiency, innovation and ecosystem sustainability, including rider welfare and merchant profitability,' they added. Meanwhile, Wang urged the government to develop policies that help companies upgrade technology – such as by adopting large AI models – while stimulating consumption. He called for a full-chain regulatory framework to adapt to the new economic model, combining advanced guidance, active prevention and oversight. Stronger collaboration between government, businesses and industry groups is needed to set standards and refine anti-monopoly rules, balancing efforts to curb unfair practices with the need to protect innovation, he said. – South China Morning Post
Muscat Daily
22-04-2025
- Business
- Muscat Daily
Oman and China convene 14th round of strategic consultations
Talks focus on enhancing political, economic and cultural cooperation Beijing, China – The Sultanate of Oman and the People's Republic of China held the 14th round of strategic consultations in Beijing on Tuesday, reinforcing their long-standing diplomatic ties and exploring opportunities to broaden cooperation across multiple sectors. The Omani delegation was headed by H E Sheikh Khalifa bin Ali al Harthy, Undersecretary for Political Affairs in the Foreign Ministry and the Chinese side was led by His Excellency Liu Bin, Assistant Minister of Foreign Affairs of China. Discussions centred on strengthening bilateral collaboration in political, economic and cultural fields, while also exchanging views on regional and international issues of mutual interest. Both nations reaffirmed their shared commitment to strategic partnership and constructive dialogue. In addition to the consultations, H E Sheikh Khalifa held separate meetings with H E Zhai Jun, China's Special Envoy to the Middle East, and Zhang Xiaoqing, President of the China Centre for International Economic Exchanges and Deputy Director of the National Development and Reform Commission. These meetings focused on bolstering economic cooperation and increasing trade and investment exchanges between the two countries. The Omani delegation also included His Excellency Nasser bin Mohammed al Busaidi, Ambassador of Oman to China; Ambassador Sheikh Abdulaziz bin Mohammed al Hosni, Head of the Asia and Pacific Department; as well as a number of senior officials from both sides. The strategic consultations reflect the ongoing efforts by Muscat and Beijing to advance their comprehensive relationship, guided by mutual respect and a shared vision for regional stability and economic growth.
