World News

cross-posted from: https://feddit.org/post/5165357

Companies around the world are starting to cut prices and costs and scale back activity in China, as the world's second-biggest economy continues to flag despite Beijing's efforts to turn things around.

Big names including Hermes, L'Oreal, Coca-Cola, United Airlines, Unilever, and Mercedes (MBGn.DE) said Chinese customers are curbing spending as a property crisis drags on and youth unemployment stays high.

Some are already shifting their China strategies. French carbon graphite maker Mersen said last week it would close a factory making power transmission products in China because it cannot compete with local rivals.

International food companies such as Danone and Nestle have meanwhile deepened price cuts or are seeking to boost online shopping volumes.

Coca-Cola CEO James Quincey said on an earning call that the operating environment in China remained challenging. "The economy is kind of not taking off," he told investors.

[...]

Birkin handbag maker Hermes is compensating for lower traffic in China with higher average basket values, selling jewellery, leather goods and ready-to-wear for men and women.

After opening a store in Shenzhen last week, Hermes plans a second opening in Shenyang in December and a flagship outlet in Beijing next year.

But for others, business in China has changed for the long term.

"We used to fly, I think, roughly 10 flights a day to China, and I think those days are gone," United Airlines CEO Scott Kirby said.

[...]