PMI points to mod­est ex­pan­sion

China Daily (Canada) - - SHANGHAI -

picked up at a mar­ginal pace.

De­spite the pickup in de­mand, the growth pace in prices charged by ser­vices providers fell in Novem­ber, while that for in­put costs re­mained solid and un­changed from Oc­to­ber, which was not good for com­pa­nies’ prof­its, Zhong said.

“Ris­ing la­bor costs, house rents and meat prices this year have weighed on many cater­ing busi­nesses,” said Ha Nan, founder and CEO of Bei­jing Liushan­men Tech­nol­ogy, which was set up in 2015 and fo­cuses on pro­vid­ing an in­no­va­tive type of cater­ing sup­ply chain ser­vice.

But Ha said the trend of ris­ing la­bor costs has prompted mid and small-sized chain restau­rants to con­tain costs by co­op­er­at­ing with his com­pany, which cen­tral­izes and in­dus­tri­al­izes the pro­duc­tion of semi-fin­ished dishes for the restau­rants.

Dong Dengxin, an eco­nom­ics pro­fes­sor at Wuhan Univer­sity of Science and Tech­nol­ogy, said the ser­vices sec­tor is where new busi­ness mod­els con­cen­trate, un­der­pin­ning the economy’s tran­si­tion to in­no­va­tion-based growth.

Of­fi­cial data showed the ser­vices sec­tor ac­counted for 58.8 per­cent of China’s GDP growth in 2017. Tang Yao, an as­so­ciate pro­fes­sor at Guanghua School of Man­age­ment at Pek­ing Univer­sity, ex­pected the num­ber to fur­ther in­crease. “With this in­crease, the economy’s re­liance on external de­mand will con­tinue to drop,” Tang said.

The of­fi­cial PMI of the ser­vices sec­tor also recorded solid ex­pan­sion at 52.4 in Novem­ber, 0.3 per­cent­age point higher than the pre­vi­ous month.

Ouyang Shi­jia contributed to the story.

Con­tact the writers at [email protected]­

Lead­ing Chi­nese ride-hail­ing player Didi Chux­ing on Wed­nes­day an­nounced an or­ga­ni­za­tional re­struc­tur­ing plan to boost safety and ef­fi­ciency, amid mount­ing com­pe­ti­tion in the sec­tor.

The com­pany said in a post on its of­fi­cial WeChat ac­count that it had ap­pointed a chief in­for­ma­tion safety of­fi­cer as well as a chief se­cu­rity of­fi­cer, as part of its broader push to en­sure safety for both driv­ers and pas­sen­gers on its plat­form.

The reshuf­fle also in­cludes new, en­larged units for emer­gency re­sponse and lo­cal gov­ern­ment co­or­di­na­tion, as well as an external ad­vi­sory group, Didi said in its state­ment.

More­over, the Bei­jing-based com­pany will in­te­grate its mul­ti­ple types of rel­a­tively low-price and pre­mium ride-hail­ing ser­vices into a sin­gle busi­ness group, which will in­vest re­sources to meet com­pli­ance stan­dards, con­tin­u­ously cre­ate user value and strengthen its ride-hail­ing ecosys­tem.

“The new setup will also strengthen our safety and ef­fi­ciency per­for­mance in the in­ter­ests of the healthy and sus­tain­able de­vel­op­ment of Didi as well as the broader in­dus­try,” the com­pany added.

In a move to en­hance its on­estop plat­form for ve­hi­cle op­er­a­tions and car-owner ser­vices, Didi will also merge its Xiaoju Au­to­mo­bile So­lu­tions with As­set Man­age­ment Cen­ter to be­come a new com­pre­hen­sive au­to­mo­bile so­lu­tions plat­form.

On top of run­ning busi­nesses such as used car trans­ac­tions, auto sales, leas­ing and fi­nanc­ing, car main­te­nance, and re­fu­el­ing and recharg­ing, the new auto-so­lu­tions plat­form will also ex­plore new op­er­a­tional and re­tail busi­ness mod­els for its driver-part­ners.

Yang Xinzheng, an ex­pert at the China Academy of Trans­porta­tion Science, said China has been step­ping up ef­forts to pre­vent se­vere ac­ci­dents from hap­pen­ing in the coun­try’ s ride hail­ing in­dus­try. The push by Didi to en­sure safety is a good sign that the sec­tor is shift­ing from the sole pur­suit of fast ex­pan­sion to qual­ity growth, which is the key to en­sur­ing sus­tain­able de­vel­op­ment.

The over­haul of its cor­po­rate struc­ture also comes amid re­newed com­pe­ti­tion in China’s ride-hail­ing mar­ket. A string of au­tomak­ers such as BMW AG and China’s largest car­maker, SAIC Mo­tor, are en­ter­ing the sec­tor, in the hope of opt­ing for di­ver­si­fied rev­enue streams.

In China, on-de­mand mo­bil­ity ser­vices, in­clud­ing ride-hail­ing, were worth $15 bil­lion last year, ac­cord­ing to a re­port by Strat­egy&, a con­sult­ing firm un­der PwC.

The num­ber is ex­pected to grow by 33 per­cent an­nu­ally to $201 bil­lion in 2025, and $656 bil­lion in 2030.


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