China urges BYD, EV rivals to end price war and avoid cost undercutting

Chinese officials summoned the heads of major electric vehicle makers, including BYD Co., to Beijing earlier this week to address concerns about the long-running price war, according to people familiar with the matter.
The meeting was hosted by the Ministry of Industry and Information Technology, the market regulator and the top economic planning agency, said the people, who asked not to be identified discussing private information. The gathering was attended by senior executives from more than a dozen manufacturers that also included Zhejiang Geely Holding Group Co. and Xiaomi Corp., the people said.
Officials told EV makers to 'self-regulate,' and that they shouldn't sell cars below cost or offer unreasonable price cuts. They also addressed issues such as 'zero-mileage' cars and mounting bills owed to suppliers that are squeezing cash flow along the supply chain and acting as quasi-debt financing for automakers, the people said.
It's rare for China's market, industry, and economic regulators to jointly host a meeting with the car industry on operational matters like pricing. The move shows how much scrutiny the nation's top leadership is paying to the sector, amid concerns the price war is becoming unsustainable and could send weaker companies into bankruptcy. However, the gathering didn't result in a mandatory directive and it's not clear what consequences manufacturers would face if they don't follow the verbal warnings, the people said.
BYD and Xiaomi didn't respond to requests for comments. A representative from Geely referred to a recent speech by Chairman Li Shufu who said the company resolutely rejects price wars and will compete on technology and its values.
The Ministry of Industry and Information Technology, the State Administration for Market Regulation and the National Development & Reform Commission didn't reply to faxed questions. The Ministry of Commerce said during a routine briefing on Thursday that it will work with other departments to strengthen guidance for the auto industry, ensure fair competition and promote healthy development.
Chinese automaker stocks were down across the board on Friday. Shares of BYD slipped by as much as 2.7 per cent while Xiaomi decreased 2.4 per cent. Geely Automobile Holdings Ltd. in Hong Kong fell 1.7 per cent.
The warnings come after BYD kicked off the latest round in the price war late last month with discounts of as much as 34 per cent, leading to criticism from industry bodies and state media.
Without naming BYD, the China Automobile Manufacturers Association released a statement saying the move by a certain company started a new round of 'price war panic' that was plunging the sector into a 'vicious cycle' and threatening supply chain security. 'Disorderly price wars intensify vicious competition, further compressing corporate profit margins,' the association said.
Media outlets directly controlled by the Communist Party leadership including Xinhua, the People's Daily and state broadcaster CCTV have all published reports in recent days that called for automakers to stop discounting and restore order to the industry. Otherwise, this could lead to low-priced and low-quality products that will damage the international reputation and the image of 'Made-in-China,' the People's Daily said.
This week's meeting marked the second time in recent days that industry leaders have been rebuked over 'zero-mileage' cars — a practice in which automakers that have failed to meet their sales targets offload new vehicles to supply chain financing companies or used car dealers.
These essentially new cars then appear on the resale market with no mileage, while manufacturers record them as sales despite them not having reaching the end-consumer. The Ministry of Commerce also met with at least two major carmakers and online used cars platforms last week on the issue.
Carmakers have been trying to pass on the hit from the price war to suppliers, demanding lower prices for parts and delaying bill payment by months. A price cut demand by BYD to one of its suppliers late last year attracted media coverage and scrutiny of how the EV behemoth may be using supply chain financing to mask its ballooning debt. A report by accounting consultancy GMT Research puts BYD's true net debt at closer to 323 billion yuan ($45 billion), compared with the 27.7 billion yuan officially on its books as of the end of June 2024, through delaying its payments to suppliers and other related financing. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Mint

an hour ago

• Mint

A toy maker sued Trump over tariffs and won. Its operations are still in tatters.

On paper, things are looking up for Rick Woldenberg and his Illinois-based educational-toy business. Tariffs on Chinese imports are down from stratospheric levels. Federal courts have ruled the duties were invalid in the first place. And trade deals could further ease import duties. But on the ground, it is a different story. Crucial equipment has been disassembled, packed and trucked hundreds of miles on mountain roads only to be trucked back on short notice. Staff members are constantly re-evaluating a catalog of more than 2,000 toys and games, deciding which to keep producing and which to put on ice indefinitely. And the business recently had to raise prices. 'We're moving at the speed of light here—flying the plane while fixing it," said Woldenberg, who runs the family business. Founded by his grandfather in 1916, it now comprises two companies, Learning Resources and hand2mind. For weeks, Woldenberg and his roughly 500 employees—most at a suburban Chicago headquarters—have hastened to halt shipments, reroute cargo, raise prices and freeze expansion plans. The companies sued President Trump and other administration officials in federal court, winning a reprieve that is now under appeal and on hold. On Wednesday, the companies asked the Supreme Court to intervene in their favor. Through it all, the most pressing questions are how to move toy production out of China, where to move it—and how to get tons of manufacturing equipment there in time to meet deadlines for end-of-the-year holidays. 'It's almost like an evacuation," Woldenberg said. 'We don't have a place to make important items our reputation is built around." Lining up new factories in another country is just the start. Heavy manufacturing-molds must be transported hundreds or thousands of miles by truck or ship and then reassembled. Quality-control processes and safety inspections must be re-created. On Woldenberg's list: Vietnam, India and Cambodia. One place he isn't considering: the U.S. American injection-molding factories aren't set up—or cost-effective—for the painting, assembly and labor-intensive finishing the toys need, he said. Employees have hurried to halt shipments, reroute cargo, raise prices and freeze expansion plans. Woldenberg's production has been centered on China since the 1990s, when his companies started pairing up with contract manufacturers there. Factories compete vigorously for his companies' relatively small batches, and have plenty of the unskilled but experienced workers needed to manually smooth, paint, assemble and package the products, he said. After the tariffs of Trump's first term, Woldenberg began exploring new manufacturing centers and moved production for about 15% of his products to Vietnam and India over nearly three years. Last year, the companies imported $65 million of products, about 60% from China. When Trump won his second term in November, Woldenberg prepared for a trade war with China and drafted a plan to offset tariffs as high as 40%: Cut costs by 10% in every department. Rein in capital expenditures. Negotiate concessions from factories in China. (He said he got about 5% on average 'after a lot of arguing.") Keep his own price increases under 10%. Then, Trump slapped 145% tariffs on goods from China. Woldenberg threw out his plan. With tariffs at that level, he started planning to move production. That meant relocating the company's 1,500 injection molds installed in Chinese factories, weighing what he estimated to be 1.5 million pounds combined. But where? The answer was clear for one of his top products: GeoSafari Jr. Kidnoculars—bright blue, green and yellow binoculars sold under the Educational Insights brand. Amazon alone has shipped more than 9,000 a month lately, pricing them just under $10 each, and ranking it No. 1 among nature exploration toys. A factory near Hanoi already made some Kidnoculars. Woldenberg's team ordered the 13 molds in China to be sent there. They filled a flatbed truck with bulky blocks of metal stacked on pallets and wrapped in plastic. By May 1, the Kidnocular molds had arrived. Production began soon after. 'That's probably the single easiest product to move," Woldenberg said. Cooper the STEM Robot, a newcomer to the Learning Resources lineup, proved trickier. The cheerful, blue-and-black programmable ball with alligator-clip hands has sensors to detect objects and light, and can wheel along a line drawn by a child. It sells for $79.99 online. Woldenberg's team hasn't found a place to build it, or other electronics, outside China. 'Once the inventory that we have is gone, I don't know how we're going to replenish it," he said. Woldenberg doesn't dodge publicity. Under President Barack Obama, he fought tougher lead-testing rules—and in recent weeks has campaigned on cable television to end Trump's tariffs. His daughter, a company executive, posts TikToks explaining the pain of tariffs. The companies sued in late April, challenging the tariffs on constitutional and other grounds. 'It's not really our corporate personality to wait for the building to fall on our head," Woldenberg said. 'No one's going to save me. We are going to save ourselves." In court, he argued that even the president's emergency powers don't let him impose such tariffs without legislation. The government said that losing the case would hurt trade negotiations and that Trump needed to maintain the tariffs to pursue delicate talks over border crossings, narcotics control and rebuilding U.S. manufacturing. While the case wound through the courts, the tariff policy kept changing. In mid-May, the U.S. and China reached a surprise deal, lowering the new U.S. tariffs on Chinese imports to 30% for 90 days. Production in China for Woldenberg was back on, at least for a few weeks. His team moved quickly, turning around a truck about to cross China's border with Vietnam, weighed down by heavy steel molds needed for making Sight Word Swat, the Sneaky, Snacky Squirrel Game and other games and toys. Aborting the shipment cost the company $13,000. Two more trucks bearing company molds had already crossed the border. Woldenberg would have held off moving them had he known a deal was coming. Costs in Vietnam were running 10% to 30% higher than in China for many products, he said. More good news arrived at the end of May. A federal judge ruled that the government couldn't impose the tariffs on imports by Woldenberg's companies. The government appealed within hours. Meanwhile, the tariffs remained in place. For Woldenberg, the temporary deal with China and his initial court victory are promising but not enough. His team is heading to India and Vietnam in coming weeks to oversee new production lines, which take time to get up to speed. Some molds, including those for the Peeksville Hide & Cheep Chicken Coop, are en route to India by ship. The company just raised prices, averaging 5% to 10%. Trump recently suggested on social media that tariffs on China would be 55%. Tariff rates for Vietnam and India are scheduled to rise sharply in July—to 46% and 26%, respectively. Woldenberg says he can't predict whether those will stick, rise or fall, but says he can't afford to import from China if tariffs are 55%. 'We're like a refugee from a war—if the higher ground we sought isn't safe, we will load everything up in a donkey cart and move again," Woldenberg said. 'It's a really terrible way to run a business." Write to Theo Francis at

The Print

an hour ago

• The Print

China sees Iran attack as a strategic dead-end for US. A no-win situation

Chinese analysts broadly view the US position as a strategic dead-end, and that the Trump administration seeks compromise but is structurally incapable of achieving it. Chinese public opinion coalesces around decisive views: Trump's reckless military intervention has driven the Middle East to a perilous tipping point. The US and Israel emerge as unmistakable aggressors, while Iran is framed as standing on a moral high ground. Commentators lament a spiralling cycle of violence among Iran, Israel, and the US—a conflict with no foreseeable resolution. China's verdict on the American airstrikes on Iran is clear: Beijing leads on peace; Washington on chaos. Its response to the United States' recent attack on Iran's nuclear facilities was outright condemnation. Russia aligned closely, warning that Washington's global credibility has suffered yet another blow. Public sentiment largely echoes this narrative, with social media users portraying the attack as ensnaring US President Donald Trump in a dangerously complex trap. Chen Feng, an Observer (Guancha) columnist, sums up the dilemma: Trump's strike on Iran's nuclear sites has locked him in a lose-lose trap. Thriving on spectacle and drama, Trump's alliance with Israeli Prime Minister Benjamin Netanyahu was theatrical, flaunting a 'team' dynamic that boosted his bravado. But the show came at a high cost. Iran's swift retaliation, hitting Israeli cities like Haifa with homegrown missiles, exposed cracks in Israel's defences and turned the region's airspace volatile. Attempts at regime change risk uniting Iran's factions instead of breaking them. Chen warns, 'Removing leaders like (Ayatollah Ali) Khamenei won't erase Iran's ideology. What Netanyahu calls 'lasting peace' may spark endless war. With the fuse lit, both he and Trump hold the match.' Adding to this perception of instability, viral content on microblogging site Weibo portrays scenes of Israelis fleeing via Egypt's Taba crossing, invoking historical echoes of Jewish diasporas. Hu Xijin, former editor-in-chief of the Global Times, dismisses Trump as politically untrustworthy; a leader whose promises are tactical manoeuvres and not genuine commitments. He critiques American imperialism as inherently deceitful, a bully to the weak and craven before rivals. For over three years, Hu argues, Russia's nuclear posture has been a check on Western ambitions; and Trump's erratic policies toward Russia, North Korea, and Iran reveal imperialism's frailty under pressure. Liu Zhongmin, a professor at Shanghai Foreign Studies University and vice president of the China Middle East Society, notes a clear downward trajectory for US influence in the Middle East. He argues that the intricate trilateral relationship between the US, Israel, and Iran is becoming increasingly unstable and unpredictable. Also read: Trump tried to belittle India, but his Iran gamble has handed Modi unexpected diplomatic space Rising narrative of defiance On Weibo, the question dominating the discourse is this: how would Iran retaliate? Hashtags like Iran is on fire have drawn nearly a billion views, projecting a rising tide of support for Iran's defiance. The narrative that Iran is 'setting an example for the world' is gaining momentum. While many acknowledge Iran's limitations in striking the US mainland directly, there is consensus that Tehran will retaliate asymmetrically, through unpredictable and potentially destabilising tactics. Wang Jin, director of the Center for Israeli Studies at Northwest University, foresees intensified regional conflict as longstanding red lines crumble. He anticipates that the US will soon claim a diplomatic victory, but warns this could provoke severe backlash within Iran, including escalated attacks on American interests across the Middle East. Despite Iran's increasingly fragile position, facing dwindling foreign support and stretched resources, its resolve appears unyielding. Some commentators advocate for a potential China-Russia-Iran 'grand alliance' to counter US hegemony, a prospect that would further reshape the geopolitical landscape. Also read: Iran has fewer options & more risks than before. Its choices will affect all of Middle East China's calculated role For China, Iran is not just a geopolitical concern but a crucial economic partner. Niu Xinchun, executive director of the China Institute of Arab Studies, highlights the security challenges threatening Chinese investments and business activities in Iran, especially in engineering and technology exports. Zou Zhiqiang, a researcher at Fudan University's Center for Middle East Studies, stresses that China is prioritising efforts to broker a ceasefire between Iran and Israel, alongside pushing for a diplomatic settlement between Iran and the US. A commentator noted China's caution about direct intervention in Iran due to the risks. Yet, Iran's strategic role—as a Shanghai Cooperation Organisation (SCO) member, key Belt and Road Initiative (BRI) partner, and an ancient civilisation and resource-rich nation—means China cannot remain passive. It must balance non-intervention with leadership by upholding the moral high ground, condemning aggression, promoting peace, and deepening diplomatic and cultural ties. The consensus: avoid military involvement but engage actively to shape the region's future. As the Middle East conflict escalates, with the US now deeply involved, it opens a new front for China-Russia cooperation and an opportunity for Beijing to assert its narrative of resistance against perceived American unilateralism and hegemony. In this discourse, China positions itself as the peacemaker and promoter of stability, in stark contrast to the US, framed as the escalator of conflict. Sana Hashmi is fellow at the Taiwan-Asia Exchange Foundation. She tweets @sanahashmi1. Views are personal. (Edited by Zoya Bhatti)

Time of India

an hour ago

• Time of India

How middlemen funnel illegal Chinese vapes into the United States

A small firm near Chicago is under scrutiny for importing millions of unauthorized Chinese vapes into the U.S., becoming a key player in the illegal e-cigarette supply chain. Despite FDA warnings about the appeal of these flavored vapes to children, large quantities continue to enter the country, often mislabeled. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads From an office a 15-minute drive from Chicago's O'Hare International Airport, one small firm helped import millions of unauthorized Chinese-made vapes last year alone, forming a key link in the supply chain feeding U.S. demand for illegal a little over four years, the firm, a customs brokerage run by a man named Jay Kim, became a go-to broker for the Chinese vape industry. The firm worked on 60% of all shipments of vapes and vape parts from China to the U.S. in 2024 registered by the Food and Drug Administration, according to a Reuters analysis."A lot of them have FDA authorization," Kim said in an interview in his office in April, referring to the vape shipments his firm FDA data on imports into the U.S. of FDA-regulated goods such as tobacco products or medicines showed the products Kim's firm helped bring into the United States included unauthorized brands like Lost Mary and Geek FDA has declared those brands illegal to import or sell, warning their array of fruit and candy flavors may appeal to children. The agency says nicotine can harm developing brains, and impact attention, learning and mood in young people, who can get hooked more easily on the addictive chemical.A Lost Mary spokesperson said it had no connection or contact with Kim's firm, and flavors play a key role in helping adult users quit smoking. The maker of Geek Bar did not respond to a request for Chinese city of Shenzhen is the biggest source of vapes, both legal and illegal, coming into the United States. In 2024, China exported more than 26 billion yuan ($3.6 billion) in vapes to the U.S., according to Chinese customs data. But U.S. customs figures show only $333 million in Chinese vapes were officially received in the U.S. that same in custom data between the U.S. and its trading partners are not uncommon, but a 90% gap was unusual, two customs data specialists told Reuters. Unauthorized vapes often arrive in the U.S. disguised as other items like shoes and toys, according to the FDA, which leads efforts to control the vape used FDA and U.S. customs data, interviews with vape and tobacco industry insiders, and information from U.S. regulators and law enforcement to build a picture of how unauthorized vapes make their way onto U.S. found a group of middlemen based on U.S. soil - including some customs brokers and distributors - who played key roles in the vape supply chain, and sometimes take steps to avoid detection. Trump Administration officials have promised a crackdown; FDA Commissioner Marty Makary has said the agency will stop illegal imports and distribution."Our borders have been far too porous when it comes to challenges like illegal e-cigarette products coming from other countries," an FDA spokesperson said, adding that the agency is planning to use artificial intelligence to "stem the flow of products that are appealing to our nation's children."In May, the FDA and Customs and Border Protection announced a $34 million seizure of unauthorized vapes in Chicago. Officials found many of the shipments in the seizure, which took place in February, contained vague product descriptions and incorrect part of the operation, for the first time, the agency sent letters to 24 middlemen involved in the vape supply chain, including U.S. importers and customs letters warned the middlemen it was a crime to make false statements to the government, and asked them to explain how they ensured they followed tobacco laws, according to the was not able to establish whether Kim was among the customs brokers who received a letter from the FDA. He did not respond to detailed questions about Reuters' brokers do not buy or sell goods themselves. Rather, they are paid by others, usually the importer, to help navigate the customs process by submitting documents and fielding enquiries from border officials, according to Lenny Feldman, a managing partner at the law firm Sandler, Travis & brokers may be breaking the law if they are found to have not conducted proper due diligence, said briefly to Reuters at his office in April, Kim said his firm did not deal with vape shipments anymore after exiting the business last said that a former employee of his firm had gotten him into working with vape clients and took those customers with her when she the FDA data reviewed by Reuters showed that vape-related shipments handled by Kim have continued throughout 2025, including in June. The FDA, which was directed to fire 3,500 employees in March, works with CBP to catch unauthorized vape shipments at the border.A spokesperson for CBP told Reuters the agency seized over 3 million units of illegal vapes valued at $76 million in 2024. "CBP has encountered bad actors exploiting shipments to transit illicit goods, including illegal vapes, synthetic opioids, precursor chemicals and related paraphernalia," the spokesperson FDA said that over the past two years, efforts by FDA and CBP had led to the seizure of around 7.1 million e-cigarettes with an estimated retail value of over $136 of Health and Human Services Robert F. Kennedy Jr. said the administration would "wipe out" fruity and sweet flavored vapes from China that appeal to kids. "We are going to get rid of all of them," he told the Senate Committee on Health, Education, Labor and Pensions in Congressman Raja Krishnamoorthi said middlemen like Kim bear some responsibility for the flood of vapes, but lays most of the blame with the FDA, which he accuses of sitting idle while illegal vapes flood into the country."The FDA is a disaster. It's asleep at the switch," he said. "You have illicit vapes all over the place."IN PLAIN SIGHT The Trump Administration's tariffs on China, as well as vape seizures, have already dented supply, Reuters reported this month. Vape shipments recorded by the FDA collapsed in May, with a shortage of popular brand Geek Bar in FDA has authorized 34 different vape products made by companies like British American Tobacco and Altria , but no fruity or sweet flavored vapes that the FDA says could appeal to yet executives at BAT estimate unauthorized devices make up 70% of vape sales in the U.S., valuing their sales at $8.14 billion last supply chain ferrying illegal Chinese-made vapes into the U.S. mostly operates in plain starts with a network of exporters based in China. After a vape shipment clears customs in the U.S., it is passed along to its U.S. buyer - usually a distributor, which then sells them to smaller wholesalers and retailers FDA collects data on U.S.-based recipients of vape shipments. The largest in 2024 was Reynolds American, the U.S. subsidiary of the top ten largest U.S. vape recipients also included six obscure firms, opened in 2023 or 2024 and sometimes operating out of residential second-largest recipient of vape shipments in 2024 was a Chicago-based company called Somo Trade LLC , established in 2023, Reuters analysis of FDA data and state business filings show.A woman at the business' address, a residential home on Chicago's north side, told a Reuters reporter that the property was not involved in the vape recipient of vapes, Rongda Trade, is registered to a house on the same street as Somo Trade , opened the same month, and has already been shut down, its filings show. No one answered the door when Reuters visited the one answered at a residential address linked to Lila Trade on Chicago's southwest side, either. The name of the registered agent, Xiaohong Dai, was not among those listed on four mailboxes out could not find websites for any of the firms, and their state business filings did not contain any contact in February, New York Attorney General Letitia James sued 13 different companies which she said were major U.S. vape distributors, accusing them of working closely with Chinese manufacturers to fuel the unauthorized vape industry."Together, Defendants have established an industry for flavored e-cigarettes, particularly disposable vapes, and staked out their own lucrative shares in the soaring market," the complaint states. "All have engaged in reprehensible, illegal conduct and aim to addict youth to their products."Mitch Zeller, former head of the FDA's Center for Tobacco Products during the Obama, Trump and Biden administrations, placed the blame on U.S.-based distributors, such as those named in James' lawsuit, for feeding demand."There's only a handful of middlemen, middle companies, that are responsible for taking the illegal, imported stuff being misclassified and mislabeled and getting it into interstate commerce," he said.