Why do some Chinese hate Apple? Tesla and Apple's grim prospect in China 2024-03-22 02:01

hi everyone okay let me adjust my camera hold on this is better is this better okay okay happy Tuesday happy Wednesday welcome to l r talk we'll talk about Apple and Tesla um how's everyone doing well okay um I took a nap today so I'm wide awake I don't think I'll fall asleep today okay well for those of you who were concerned if I was doing well last I mean this Tuesday I am uh doing much better today all right let's get started let's talk about Apple and Tesla there are two American high-tech companies that have invested heavily in China and the country has become the largest single market for both companies outside the us contributing SE uh 19% for apple and 22% for Tesla of their total revenue in the recent fiscal year now China's economic downturn has affected apple and Tesla's sales as demand for high-end cell phones and EV cars wains apple and Tesla are also the first targets um of us China decoupling amid the escalating geopolitical tension the increasingly daunting challenges and uncertainties in the Chinese market has made their stocks are the worst performing stocks among the seven major US tech stocks I've been reading about Tesla and Apple's Grim outlook for some time I mean in China for some time and this morning I saw that Tim Cook is in Shanghai and there's a video showing a Chinese woman throwing a temper tantrum in front of a group of Apple Fans that piqued my interest and this woman was mad at Apple her behavior somehow shows the kind of challenges that Apple has in the Chinese market so I will play you that video um now we haven't finished the first quarter of 2024 yet but Tesla's stock has slid 30% year-to dat already its sales and prices have both dropped in China with more troubling is the recent dis uh um is the reaction that Beijing has um to the recent disclosure of space x uh in a classified contract with the US intelligence agent agency to build a spy Network a spy satellite Network so we will also talk about China's reaction so today's um agenda is first we'll talk about Apple's troubles and then uh followed with Tesla's troubles in China okay first things first Apple so on February 1st Apple released its first quarter financial report for the fiscal year 2024 uh which which was actually the fourth quarter of 2023 calendar year Apple's Revenue in the greater China region for the for the last quarter um of last year last quarter of 2023 was 20.83% I backtrack so Apple state that stated that it achieved sales growth in all regions outside of Greater China sales in Greater China decreased by nearly 133% compared to the same period last year making the companies uh making the company's poorest performance in China in recent years now since Apple launched its iPhone 15 last September sales of iPhone 15 or 15 series um have lacked behind previous generations Apple sales in ch in the Chinese market contined to be weak this year during their Luna New Year period Apple even offered discounts of more than 1300 unen in China to stimulate consumption or purchase but the effect was limited although Apple stores still sell the devices at full price um in January Apple offered rare discounts for the iPhone 15 in mland China um through its thirdparty retailers so given that apple had not reduced the price of its latest iPhones for many years this move was unusual um and then they Apple offered discounts again during the March 8th women's day um let's talk about how deep the discounts were so for example iPhone 15 um 128 GB was priced at 45 4588 4588 reming be um um pin Doo's website right PDD I I think it's short name is PDD pinor um it's 1411 1,411 uh un lower than its retail price of $59.99 and that's a 24% discount and iPhone 15 Pro Max 256 GB uh usually sells for 99,999 y in the stores uh but it's priced at $88.99 y on jd.com and that's a 11% discount so although iPhone selles in the Chinese market are increasingly reliant on discounts sales volumes weren't up according to data from market research firm Counterpoint research on March released on March 5th the first six weeks of this year um Apple's iPhone sales during the first six weeks of this this year Apple's iPhone sales in China fell by 24% uh when compare with the same period last year and the company now ranked fourth among Chinese smartphone suppliers it used to it used to be number two and its market share has dropped from 19% in 2023 to now 15.7% meanwhile sales of huawei's uh Flagship phones are soaring Huawei has been promoted by the Chinese government as a domestic brand um in its patriotic proper aganda now hwe chose to announce its new 5G phone the mate 60 Pro during us Commerce Secretary uh what's her name uh Rondo Rondo Gina Rondo yeah during her visit to China last August and shortly after right so they while we announced its new G uh 5G phone in August then in September we heard some government agencies in Beijing and tenin uh prohibited their its employees from bringing foreign brand phones cell phones uh such as iPhones into workplace and in December sources inside China confirmed that in the previous couple of months right so in uh October November possibly September government departments and state-owned Enterprises in at least eight provinces uh Jang guangong an sh Shand and had verbally instructed employees to start using domestic um cell phones and this mandate may be Nationwide um if it's not already oh sorry this mandate will be Nation white if it's not already so facing these challenges Apple's CEO Tim Cook is in Shanghai now he posted on weo yesterday that he met with a Millan Chinese actor his name is Jun Kai actually here's here's the wayo post let me make this bigger um on the bond and had a traditional shanes breakfast uh with him with the actor and the actor he if you look at the post uh Tim spoke in a CH in a shahin dialect so he wrote n instead of niow in a in a shahin dialect uh so here's his post and the actor also posted his pictures with Tim Cook and the post quickly went viral on web and perfectly synced to the promotion of the grand opening of Apple's new store in Shanghai uh Cook's visit to China coincides with the opening of Apple's new store in the most affluent part of Shanghai which is in the chingan district on March 21st that's today this store is the 57th Apple Store in the greater China region and the eighth in Shanghai um according to Chinese media the 3800 square meter uh store would be Apple's highest spec flagship store in China with a total investment exceeding 11 million us and it's second only to the global flagship store on Fifth Avenue in New York um I don't know why Apple opened another store in Shanghai uh in the middle of you know declining sales uh that I don't know but uh but because of the successful social media campaign uh launched by Apple showing Tim Cooks breakfast and his leisurely walk with the Chinese actor on the bond the opening of the new Apple store has attracted a lot of attention from the public in Shanghai uh PE Apple Fans let me show you uh here we go Apple Fans gathered for the grand opening to get a glimpse of Tim Cook um here here you see the the the video and you see some people actually show holding a white screen you know reminiscent of the white paper movement see that and take a look at the amount of police um um on site let me play that again you want to play that again yeah so this this was the grand opening was 7 o'clock or 7:30 at night uh so look at the crowd in front of the new store and the white screens that people held out on their iPad um but not everyone there uh was a Apple fan there was [Music] um there was a one Chinese woman who detested her compatriots um detested her compatriots love of foreign Brands and she got into an intense I mean an intense quarrel with the others and someone captured the incident on a video I have never seen a video that so vividly illustrates the division among Chinese consumers over the issue of domestic versus foreign brand or apple versus Huawei um the woman I mean you will see that yourself the woman used very strong words and I think my translation in English isn't colorful enough to do her justice um if you haven't seen how Chinese argue and fight with each other this is your chance chance to to see it um so let me play that video please keep in mind that the subtitles move very fast because I try to catch the the the uh all the dialogues going back and forth but um but if I say w woman that means that's the woman that you see I you you're only going to see one woman on the screen that's this woman who hates Apple uh but the sub subtitle I tried to show you what other people were saying um on site so here we go here's the video for spe fore foree fore spee [Laughter] okay all right so that's hilarious I mean have you seen Chinese getting mad and getting into a argument I mean the language they use and now you see it it's um um what can I say oh as result of as a result of I don't know as a result of this or some other uh concerns that the authorities have I think this group uh in front of the Apple Store was um uh dispersed very quickly I think that the crowd uh uh was dispersed very quickly I don't know what exactly what happened happed uh but that's that's what happened in front of the the new Apple Store uh last night right no actually this morning actually this morning uh it's yeah our time this morning it's their night it's 7:30 their night U so it's our 7:30 in the morning um oh my goodness now you know why I say apple is in trouble right uh anyways you see the the brain you see the effect of brainwashing on people I mean that woman wasn't I mean she really spoke from her heart you know uh she wasn't she wasn't just saying it you know at one point I was wondering if she could be one of those hired individuals you know imp planted there to you know to kind of uh to kind of offset the you know the support for Apple there but then you know I don't think so I mean she doesn't look like someone who is Faking It Anyways so now you know uh in the video Someone AR you know who argued with the woman uh in the beginning said that Tim Cook would was going to Beijing as requested by the Chinese leader and what he referred to was the annual China development Forum or CDF to be held at the diai state G house in Bing from March 24th to the 25th according to the Wall Street Journal um on March the 19th other American CEOs expected at The Forum in addition to Apple's Tim Cook include um qualcomm's uh Cristiano Aman fizer uh Albert uh borla Steven schwamman from Blackstone and Ray Dalo founder of bridgew Associates it has been speculated it has been announced that China's Premier Le Chang uh is not going to meet uh the CEOs alone so it has been speculated that shi Jinping might uh meet with the CEOs himself in the past the Premier was the one who received the CEOs um in Shanghai Tim also met with some of Apple's suppliers including byd uh byd electronics he met with Wan trfu the chairman and president of uh byd company so that's what I want to show you uh what I want to tell you about Apple now let's talk about Tesla Tesla's challenge in China is more complex than Apple uh because in addition to the situation in which sales is going down due to overall economic hardship um and government agencies banning Tesla cars on premise because these two issues uh are what apple is experiencing right so on one hand declined sales due to overall economic hardship and on the other hand the government is uh actively Banning foreign brands now in addition to having those two problems like apple Tesla has another challenge and that is Beijing feels threatened by Space X uh Spa X's star Shield Project with the US national reconnaissance office but before we get into uh beijing's reaction on the disclosure of spa space AIS project let me first talk about the decline ing sales let me give you some sales data and how Tesla has addressed it I would I would just quickly go over some numbers with you because I I don't think you have already seen it um Tesla's shipment from his Shanghai Giga Factory dropped to the lowest level in 14 months uh this February last month uh the China passenger car Association released the data on March 4th showing that Tesla delivered 63,65 vehicles from the Shanghai Factory in February and the lowest since December 2022 shipments in February fell nearly 16% compared to the previous month and it's down by 19% year-over-year and on the day this was announced Tesla's stock fell 7.2% to $188 it has been by the way its stock has been down by 30% since the beginning of the year and we are only through the first quarter I mean we're not even through the first quarter right we're what 21st of March um so we're still in the first quarter and its stock has fell by 30% now the good news is that Tesla isn't the only company suffering from poor sales according to the passenger car Association sales of new energy Vehicles including pure EVs and also plugins decreased by 9% last month compared to February 2023 and Tesla's biggest competitor in China byd suffered a 37% decline in sales in the same month when compared with the same period last year Tesla and byd are considered the highend sector in the EV Market in the Chinese EV Market its sales somehow are more affected by the decline um um in in the consumer demand so facing such um facing slow demand and intensifi the competition Tesla significantly reduced the prices of its model 3 and model Y and offered cash discounts for some model y vehicles so for example on March 1st Tesla announced that customers who take delivery of model 3 and model y by the end of March can enjoy discounts of up to 34,600 Y and that's about 4800 us it's a discount of almost 15% um for the model 3 Cars Tesla also provides a limited time Insurance subsidy of 8,000 un uh for the real whe Drive version of model 3 and model Y and if buyers want to change the car's uh the car's color the uh the car the car company offers a discount of 10,000 un um byd also reduced the starting price of its um hybrid SUV the s s Sun Dynasty I mean its cars are named by the different dynasties so the S pro hybrid SUV the price is down by 15% Jil Gilly or I don't know Gilly or Jilly Jilly Auto also lowered the starting price of its bestselling um Galaxy models by 15% and 9% so you see a price War um is happening in China um and the price cuts are as deep as 15% now a PRI a price wood in the Chinese market will hurt Tesla's competitors more this is because Tesla enjoys a high profit margin but its competitors don't because they rely on government subsidies to be profitable um with that said I want to say that Tesla's real challenge in China may be a political one on March 16th Reuters disclosed that the star Shield unit of Elon musk's starx is building a spy satellite Network for the national reconnaissance office Uh u a US intelligence agency hold on one second okay the satellites uh can track Targets on the ground and share that data with the US intelligence and Military um personnels it would it would enable the US government to quickly capture continuous imagery of activities on the ground nearly anywhere on the uh in the world uh this will Aid intelligence and military operations now this uh planned star Shield network is separate from um from the starlink network it represents one of the US government's most sought-after capabilities in space because it's designed to offer the the most persistent pervasive and Rapid coverage of activities on Earth um so basically no one can hide now Beijing has reacted to it the day after reuter's article an official we account associated with the pla the CH uh the Chinese people's liberations Army um with whose name sounds like the Chinese name of the whall account sounds like political commentary of the and it posted this reaction uh here's I have a I have an imagery um I'll just read you section of it uh the links are provided in the description of the video um so it says such a maneuver by the US highlights its shamelessness and double standards the world is not dictated but what the US says or wants to do we advise the American company not here at Tesla or I mean Elon musk's company SpaceX um not to act as accomplice to such actions at the same time every country in the world should be vigilant and take precautions against the US government in creating new and greater security threats the next day um which is the 18th shinua uh published article uh actually shinar republished an article authored by the global times and the this one is more detailed um it talked about its concerns it goes It goes something like this sorry this is this is the um this is the global Times article excuse me it says uh it quoted to military experts in the article so it says uh military expert we don't you told the global times on the 17th that the reason the US national reconnaissance office chose Space X is mainly because of the advantage of the companies large number of small satellites which can cover more orbital levels to the maximum extent possible due to the large number of satellites surveillance of a certain area May achieve full coverage and by full coverage we mean both the monitored area and monitoring time the star Shield system uses a large number of spy satellites to conduct intelligence reconnaissance globally thus creating an omnipresent spy network of above all countries around the world it went on to talk about counter measures uh it says once the American spy satellite network is established countries and regions will definitely take some counter measures such as transferring relevant facilities underground or using optical camouflage for concealment therefore the establishment of a spy satellite network doesn't make make it easy for the US to obtain sensitive intelligence information from countries globally now ccp's biggest concern I think is expressed in the article in the next passage it says this once the surveillance system of spy satellites controlled by the US becomes operational it will pose a significant threat to world peace and stability potentially impacting the lives of Ordinary People the vast network of spy satellites in space would not only monitor military targets but also um many many civilian targets even the daily lives of ordinary people may be exposed to surveillance which will have a negative impact on information security and personal privacy protection now the CCP uh isn't concerned with private personal privacy or personal protection as described in the passage that's not what it meant because the CCP has spent so much money to build surveillance systems to watch its own citizens it has violated all sorts of personal privacies right so it has no concern for personal privacy it understands that with the star Shield networking space the Americans are able to watch the moves of all the CCP officials right Beijing is concerned with the leader's privacy and protection and that's what it meant and and this is what it worries about um the article also named Elon Musk is this is this is how it addressed Elon Musk it says when Elon when musk founded Space X his goal was to realize the dream of establishing space Technologies as the company continues to develop SpaceX has achieved many successes and accomplishments but if it cooperates with the US military deeply and carries out tasks such as intellig such as intelligence gathering musk has deviated from it from his original intention in establishing the company the article ended with this line it said it is precisely because of the approach Ro um taken by the United States that someday in the future we may have to face one reality which is that space will become a new Battle Ground okay with all that said I think Elon Musk and Tesla uh will have quite a challenge ahead of them in battling the CCP um we should keep an eye on you know how the CCP react to this um it's certainly U nerve-wracking for uh to the CCP to the CCP leader to the leadership and it will certainly put pressure on Elon Musk and make it make him make his company make Tesla more difficult to do its business in China um so we'll see how Elon Musk U handles that that's all I want to share with you today let me see if people have questions for me all right um let me start from the beginning I'll go through the super chats first uh let's see let me get rid of this slide all right let's see if people have questions for me put my name in the front so I know it's addressed to me C2 well thank you uh all right um let's see somebody said uh thank you uh well thank you C2 thank thank you suan let's see control opposition there isn't okay David Lan Ela musk gave the CCP SpaceX technology though without considering of the Civil military Fusion thoughts wait wait a minute it it just jumped Elam mus gave the CCP paa SpaceX technology though without considering of the civilian military Fusion thoughts are you saying that I don't think I I don't know if he did that that's really you know totally senseless that's reckless um action on his on his part what I heard is China put so much pressure on Elam mus ask to uh to ask him not to provide the um starlink um broadband service over China and also over Taiwan and ilon agreed right Elon agreed to Shield um his stlink service from above millon China and then he also included Taiwan in that and that's and um the the the um Gallagher the congressman from from is it from kenduck Kentucky no from Wisconsin the head of the the Congressional um China China Affairs committee wrote a letter to Elon Musk ask him to explain that remember that so yeah so he has he has um gave in he has um gave in to um I mean I can understand how he agreed to CCP uh by temporarily not offering start Link in China but why Taiwan you know I mean Taiwan Taiwan you know is a is a separate Market I mean his Global China Market does not include Taiwan so why does he include Taiwan in this in this ban I mean that's just a bad decision on his part um thank you vanat all right let's see Nick Fury China just annexed part of Gulf of token next to Vietnam violating un Clos will Vietnam and China Clash before 2030 um let's talk about yeah speaking of Vietnam let's talk about the resignation of its President right uh somebody said leay went to Vietnam and then the next thing we know is its president resigned I'm just kidding it has nothing to do with me my trip to Vietnam shall we say and I mean on the surface I mean Vietnam is very similar to to China I mean he was he he stepped down I mean he stepped down on on grounds of what corruption so the vcp is using corruption as as a as um you know as as a way to uh sack its officials so it's very similar but we know it's probably the result of political uh aim fighting I think the there's growing opposition to the current vcp leader and I heard that the the the the president that's stepping down the guy is only in his 50s is Young um he was likely the successor of the of the V of the current party leader so the fact that he stepped down is an indication that uh the internal opposition opposition is growing stronger um so all of that is very similar to the CCP right so you know anti-corruption you know political cleansing in the name of anti-corruption um and then inter internal political infightings and that's all very similar to the CCP but on the other hand it's also different because the guy resigned uh at least the vcp allowed a high ranking official to resign but in in the history of the CCP you don't see a CCP leader resign um they'll just quickly remove him or send him into retirement or or do something but they don't accept resignations um because that's a very Western liberal concept you know uh once you work for the CCP you don't have the choice of quitting and that that's that's the idea um um someone asked me C2 what do you think of the depiction of the cultural revolution in Netflix's three body problem I have not seen that so I cannot comment on it but thank you for mentioning it so maybe I'll check it out okay um booya 3 360 report the Chinese have malware in all us infrastructure will these Business Leaders help address this major concern that's a good question I think the US got the the CCP bad actions uh by the CCP right the the accumulative bad actions uh by the CCP in the past decade is now costing the US taxpayer a lot of money to address think about the the the money we'll have to spend to address these infrastructure um uh threats um so so so we're basically paying the price for the our politicians ignorance for the past 20 years and now you know now we have to address them all and and there are so many issues um so I hope our politicians work smart you know they should try to address the root issues if you just try to address you know the problem as they pop up you know it will it will be very uh exhausting um all right let's see waboo waboo how do you feel about Japan devalue their currency in in exchange for US Dollars rumor has it Japan will have lots of buying power within the next five years well the Japanese economy is certainly doing very well you know it has finally stepped out of the shadow of the last decades um how do I feel about Japan devalue their currency in exchange for US dollar yeah it it's what at 150 100 $1 to 150 unen Yen um it is low what do I think of it um I I cannot say anything at this point I think currency as one the currency war is a double-edged sword it can it can go both ways so I I'd better look into that before I say anything um uh John as US troops in Taiwan comments why not and I mean this is one of the in you know before CCP made has made this issue like one of like the three conditions for it to start uh war on Taiwan right one of this uh you know foreign military on Taiwan but look what happened you know not much so that just shows you the CCP is paper tiger although today we have heard from um one of the US uh commanders station in the Pacific region and his Testament he's saying that he's saying something he said something to the effect that CCP or shim has ordered the paa to be prepared for War by 20127 which is not that far away from now it's only three years away okay um all right that seems to be all I don't have any other questions I think I'm oh here's EDC my friend in China tells me that byd can sell an EV car only because the cost of Labor is low in China do you think that this is true or are there heavy subsidies from the government I did an analysis to compare byd to Tesla uh I did actually two programs at the beginning of 2023 and byd isn't you know was profitable only because of the government subsidies you know byd uh large s soes or large companies that are controlled by the government such as B byd I mean byd is not a s soe but it's it's almost like a s soe because uh because it's strategically important to the CCP these companies are also prone to corruption so why do you think it wouldn't be profitable without government subsidies right so it's not a these companies are not very efficient um so its profit margin is very small um before it at the beginning of 2023 when Tesla reduced its prices uh to be more competitive you know the Chinese officials and and his competitors begged him to increase prices and that surprised Elon Musk you don't have you don't have competitors coming bangging you to increased price but that that was that just told you how how um how unprofitable the other Chinese EV makers were and now that you know the the competition is much more intense and everyone is is is reducing prices so it would definitely hurt the Chinese EV makers more than Tesla because Tesla's profit margin was very high I think I did a calculation at one point it was about 30% I I don't remember the exact number but you can look at my two live streams in the beginning of I think it was in January of 2023 so Tesla is able can afford a discount but the other Chinese EV makers are not able to unless the Chinese government is giving them money behind the scene but the question is how much money does xinping still has uh still have uh to to to help these EV makers I really doubt it um let's see that seems to be all that's all that's all the questions I have addressed all right uh let me go back yeah I think that's all well thank you very much for joining me and I will see you over the weekend oh here's one from C2 last question it's last question I know you were recently in Vietnam what was the favorite dish you ate what was the favorite dish you ate um I don't know I don't know what you call that but there was there were it it seems to be a mainstate of Vietnamese cuisine that they offer you all sorts of grilled meat with a variety of fresh leaves and then chopped vegetables and use very thin rice paper to wrap them I don't know what you call that but my Vietnamese friends you know in you know on the show please help me I don't know what it's called but that's my favorite because you um first of all it's you know it's it's very interesting it's almost like you know you you have to make your own food and then you eat a lot of fresh vegetables which I like um uh so I think that's just that's wonderful and that's unique to Vietnamese food because the other noodle soup like fur or you know chicken noodle soup or roasted duck noodle soup or I mean we have similar items we have similar dishes in Chinese food but the wraps the rice paper wraps is unique in Vietnamese food so that's what I like it I don't know what it's called it's spring rolls well here we have the already wrapped spring rolls right we buy fresh rolls or summer they call it summer rolls it's already wrapped but over there you make your own rolls and the paper is Tiny it's it's a palm palm size Square rice paper um and and you mostly wrap everything with lettuce leaves U but the paper serves as adhesive to be honest with you the rice paper is sticky so it just you know sticks you know everything together so it's different from the the fresh rolls we eat here okay it sounds like a it's like it's like a experiment you know you feel like you're in a lab you know working with all these ingredients it's quite fun I like it rice paper rolls I'm a vietamese okay good good well people help me tell me what it's called is there a venese name for it um and almost transparent yeah the the rice paper is very thin it's trans almost transparent yeah all right that was my last question I thank you very much for joining me and I'll see you this weekend okay stay well bye bye