On the day of “Double Eleven” (November 11), the transaction volume of its e-commerce platform announced by Alibaba reached 268.4 billion yuan, setting a new record.
In the context of the Sino-US trade war, the American agricultural products that had been outstanding in the “Double Eleven” in previous years did not enter the Chinese shopping cart on a large scale. And the Chinese have increased their efforts to “buy and buy”, can China help China boost domestic demand and complete economic transformation?
American Cherry becomes "Chilean Cherry"
In the "Double Eleven", if you search for "American Cherry" in Taobao or Tmall, the result is all Chilean cherries. One of the reasons is that Chilean cherries mature later than American cherries, and in the “Double Eleven” season. However, even the US cherry in the current season is still facing a disadvantage in the Chinese market.
As the Sino-US trade war escalated, China’s retaliatory tariffs soon extended to American fruit. According to Reuters news, the US exports of Chinese cherries fell from 1,505 tons in May 2017 to 337 tons in the same period of 2018. This year, it fell further to 187 tons, shrinking to nearly 90%.
In the previous year, the popular American snake fruit on the “Double Eleven” was searched in Taobao. The first sales volume was the apple of Gansu, the origin of China. The actual sales from the United States were flat, and most of the sales were dozens. In 2015, “Double Eleven” sold 1 million American Washington Plus Apples in 24 hours.
Before the trade war, American fruit has always been a "star" on Taobao and Tmall. On September 19, 2014, Alibaba was listed in the United States. Ali invited eight ringers. The only non-Chinese person was the cherry fruit farmer Pete Verbrugge in Washington State.
Five years ago, Pete Verbrugge's fruit company sold 108 tons of American cherries in a pre-sale, equivalent to one day's sales of 1,000 large and medium-sized supermarkets.
Since then, Alibaba has partnered with Northwest Cherry Growers to promote American cherries and make China the largest overseas market for the latter.
此后，阿里巴巴还和美国西北樱桃种植者协会（Northwest Cherry Growers）合作推广美国樱桃，并使中国成为后者最大的海外市场。
American fruit farmers quickly became interested in the Chinese market, but they soon suffered losses. Thurlby, president of the Northwest Cherry Growers Association of the United States, said in an interview with the US media that in addition to the direct losses caused by the decline in exports to China, the contraction of the Chinese market has put pressure on all other markets, and prices are generally affected.
Apple has also suffered heavy losses. According to the US Apple Association, total US apple exports in the 2018-19 season have fallen by 27% year-on-year.
苹果同样遭受重创。美国苹果协会（US Apple Association）数据显示，2018－19季，美国苹果总出口量已同比下降27%。
Belt and Road Cherry
Under China’s retaliatory tariffs on the United States, the tax rate of American fruits has risen to 50% after many adjustments, and tariffs such as cherries and apples are as high as 60%.
Under high tariffs, imported fruits from other countries appear to be more competitive, and the vacated market is occupied by what China calls the “Belt and Road” countries.
In addition to the Chilean cherries that have been selling well in China in the past two years, in May of this year, the cherry of Uzbekistan in Central Asian countries accounted for nearly half of the total imports of cherries in China.
In June and July, cherries from Turkey's Izmir and Afyon provinces landed in China. The former tested 10 tons of water for the first time, while the latter signed an order of 1,500 tons with Chinese importers. In addition, the cherries of Tajikistan and Kyrgyzstan also entered China.
China also seems to be interested in helping the fruits of these countries to replace the United States, such as relaxing the pest control standards, from less than ten days of refrigeration, to only a few hours of fumigation.
These countries are regarded by China as a country covered by their “Belt and Road” initiative. China hopes to increase trade with these countries through the establishment of transportation and other infrastructure. However, some skeptics also reminded that China has invested heavily in infrastructure through a large amount of borrowing, so that the “Belt and Road” countries are unable to repay, and they are trapped in debt traps, and have to give up the use or management rights of infrastructure to China.
The challenge behind the “Double Eleven”
The total turnover of “Double Eleven” was RMB 268.4 billion. Although it has once again set a staggering record, the growth rate has slowed sharply in the past two years.
Compared with the previous year's doubled growth rate, this year's growth rate was 25.7%, a slight decrease from last year.
Analysts said that sales growth was less than last year, as China's overall e-commerce industry slowed as China's economic growth rate hit a record low.
But including e-commerce, China still has high hopes for boosting consumption.
Due to various factors such as slowing global demand, capacity transfer, and trade wars, exporting this carriage is no longer the main driver of the Chinese economy. And China's high government debt also makes it possible to increase infrastructure investment and bring systemic risks.
Therefore, consumption has become the focus of China's stimulus. Reuters quoted an expert from the China National Information Center as saying that in addition to the stabilization of consumption this year, industrial added value and investment are all falling, and the downward pressure on the economy has only increased. Therefore, expanding domestic demand to stimulate consumption has become the focus of current policies.
However, China faces a special “urban-rural duality” structure. Urban residents have become the main consumers of consumption. A large number of rural residents are still at low income levels. Their consumption needs have not been released, and further growth in consumption is likely to enter the bottleneck period.