Affected by factors such as the Fed’s ultra-low interest rates and high government subsidies for the new crown epidemic, US housing prices have risen sharply recently. In 183 metropolitan areas in the United States, ninety-nine percent of housing prices are rising, representing a double-digit increase of nearly ninety percent.

At the same time, housing prices in countries around the world are also soaring, and housing prices in major countries in Europe, Asia-Pacific, and North America are all rising at an accelerated rate.

Image source: Photograph

U.S. housing prices have soared, with double-digit increases in nearly 90% of the regions

According to Xinhua News Agency, housing prices in the United States have risen sharply recently, and housing prices in some areas have repeatedly hit new highs. Analysts believe that the main reason for the current round of housing price increases in the United States is that demand exceeds supply. The negative effects of falling housing affordability and increasing polarization between the rich and the poor are gradually emerging.

According to the latest statistics from the National Association of Realtors, April The median price of existing home sales in the United States rose 19.1% year-on-year.Among the 183 metropolitan areas monitored by it, 99% of the regional housing prices rose in the first quarter of this year, and 89% of the regional housing prices rose by double-digits. .

In addition, the S&P/Cass Schiller House Price Index, an important indicator of the price level of the US real estate market, rose 13.2% year-on-year in March, further accelerating from 12% in February, marking the largest increase since December 2005.

According to Hexunnews,The past year was the hottest year for residential sales in the United States in the past 14 years.58% of the houses were sold within two weeks of listing, and 45% of the houses were sold at a price higher than the listing price, both breaking records.

In April this year, the median sales price of existing homes in the United States increased 16.2% year-on-year to 319,200 US dollars, or 2.03 million yuan, the highest since 1989; the median sales price of second-hand houses increased 19.1% year-on-year to 341,600 U.S. dollars, about 2.18 million yuan, its annual increase and median price both hit record highs.

In the past year, housing prices in all 50 states and the District of Columbia have risen. The top 5 states with the highest annual value added are: Idaho 23.7%; Utah 19.2%; Arizona 17.4%; New Hampshire 16.2%; Connecticut 15.9%.

High subsidies “ignite” the enthusiasm for buying houses, and negative effects have emerged

Economists generally believe that the Fed’s ultra-low interest rates, high government subsidies for the new crown epidemic, maintenance of social distancing and other epidemic prevention and control measures, as well as the increase in housing purchase age groups, have increased the demand for home purchases. At the same time, housing inventory has fallen and new homes have been under construction. The resulting supply gap is the main driver of the recent surge in US housing prices.

According to Xinhua News Agency, since last year, the Fed’s ultra-loose monetary policy has brought a lot of liquidity, and US mortgage interest rates have been kept at a low level. Yang Xiaojing, an associate professor in the Department of Marketing at the University of South Carolina in the United States, believes that low interest rates have increased the number of consumers who can afford the cost of buying a house loan. At the same time, consumers can afford houses with a higher total price, thereby boosting house prices.

The US government’s high subsidies further “ignite” people’s enthusiasm for buying houses . After the outbreak of the new crown epidemic, the US government introduced a series of large-scale economic relief measures. Among them, the issuance of unemployment benefits and family relief payments has significantly increased the personal income of US residents and boosted family spending including house purchases.

In addition, since the outbreak, anti-epidemic measures such as maintaining social distancing have led to an increase in demand for real estate in areas with low population densities. At the same time, the widespread use of home telecommuting has increased people’s demand for improved housing conditions, which has led to an increase in the demand for housing purchases.

The negative impact of rising housing prices in the United States is gradually showing. The National Association of Realtors in the United States said that with the rising housing costs, many families have intensified the pressure to buy houses, especially first-time home buyers. There are data showing, About 60% of households in the U.S. have been unable to pay for a new house that is at the current median price .

Yang Xiaojing believes that rising housing prices in the United States have further aggravated the polarization between the rich and the poor. Low-income people are increasingly unable to afford the increasingly expensive housing prices. At the same time, housing rents are also “rising,” increasing their daily expenses. In the short term, more people will rely on government subsidies. On the other hand, high-income people can enjoy the dividends brought by more real estate appreciation.

According to financial news from Phoenix.com, Nobel laureate in economics, Robert Shiller (Robert Shiller) is worried that the hotly-traded property market, stock market and “currency circle” in the US market are forming bubbles. Schiller believes that investors have a “Wild West” mentality in these areas.

Schiller pointed out that “the real estate market has a great upward momentum, and prices may not fall within a year.” He believes that the current real estate market environment is similar to 2003, which is 5 years before the real estate market crashed in 2008.

Regarding the future trend of U.S. housing prices, Bank of America stated in a research report that the supply and demand of the U.S. housing market is seriously imbalanced, and the gradual normalization will be a long process. It is expected that high housing prices will continue for a period of time.

Economists believe that how the Fed’s monetary policy will evolve in the future will become an important variable affecting the trend of the US real estate market.

Global housing prices continue to accelerate, with housing prices rising in nearly 90% of countries

It is not only the United States that has seen soaring housing prices.

According to a report from Chinanews.com, Asia’s largest real estate technology company Juwai IQI Group released the “Global House Price Report for the First Quarter of 2021” on the 2nd, showing that the global housing market boomed in the first quarter, with prices soaring in Europe, the United States, Canada, and some countries and regions in the Asia-Pacific region. .

This report shows that in the first quarter of this year, housing prices in many countries in Europe, Asia-Pacific, and North America have been accelerating and have reached an “astounding level”, and this “level of prosperity is completely unprecedented.” The report believes that low interest rates and monetary easing are the main reasons for the rise in global housing prices.

The report shows that among the 57 housing markets for which housing statistics have been published globally, the actual housing prices (that is, prices adjusted for inflation) have risen in 43 markets. From the perspective of nominal housing prices, Of 57 countries, 50 countries have seen nominal housing prices rise, and only 7 countries have seen housing prices fall, accounting for nearly 90% .

Among European countries, Montenegro, Slovakia, Turkey, Sweden and Germany all experienced strong house price increases.

According to the China Youth Daily, ING Groep analyzed that the Netherlands is facing a shortage of housing supply. Last year, Dutch house prices rose by 7.8%, and in 2019 they rose by 6.9%. House prices in Austria, Germany and France have also maintained steady growth.

House prices in various countries are rising, and the houses here are not only “1 yuan purchase” but also free decoration

However, when global housing prices are skyrocketing, some places tell the story of “buying a house for 1 yuan”.

According to a CCTV financial report, in Croatia, due to the impact of urbanization, the population of some small villages and towns continues to decrease. In order to attract new residents, some places have launched houses priced at only 1 Kuna (about 1 yuan) , These ultra-low-priced houses have attracted the attention of global buyers.

The conditions set by the local government for buyers are: they must be younger than 40 years old, have a stable income, and buyers must promise to live in the town for at least 15 years in the future. For eligible buyers, the town government can provide a subsidy of 25,000 kuna (approximately RMB 25,000) for the renovation of each house. Up to now, 17 of the first batch of 19 properties launched by the town government have been sold.

A local government official said: “We have received a lot of inquiries from all over the world, but we mainly focus on potential buyers around us. This measure has achieved remarkable results.”

These ultra-low-cost houses are old houses that have been vacant for many years or unfinished houses. Some houses do not even have doors and windows.

The analysis believes that in recent years, the process of urbanization has led to a steady decline in population and economic shrinkage in some remote or poor areas of Europe. In order to avoid becoming completely empty, many small towns use “low-priced housing” as their selling point to attract foreign populations to join. Apart from Croatia, it is not uncommon to sell houses for one euro in countries such as France and Italy.

Edit| Duan Lian Du Bo

Proofreading| He Xiaotao

Cover image source: Photograph.com

Daily Economic News Comprehensive Xinhua News Agency, Hexun.com, Phoenix Finance, China News Network, CCTV Finance, China Youth Daily,Public information, etc.

Prices rise by five percent Highest US inflation since 2008

Status: 10.06.2021 5:44 p.m.

In the USA, consumer prices have risen as sharply as they did almost 13 years ago – which is felt above all by car buyers. The European Central Bank also expects higher inflation in the euro countries. Is it just a short-term phenomenon or is inflation now making its big comeback? In the USA there is a growing fear of ever higher prices. Some are already pulling Parallels to the 1970s when President Jimmy Carter failed to get a grip on high inflation and job misery. Although the USA is still a long way from the double-digit inflation rates of that time, the price jumps are getting bigger from month to month. After inflation had risen above four percent in April, it has now climbed to 5.0 percent in May. That is the highest rate since August 2008. Experts had only expected an increase in the cost of living of 4.7 percent. “The dreaded five has become a reality,” said market observer Thomas Altmann from investment management company QC Partners.

Federal Reserve under pressure

The strong growth impressively proves that the price surge in April was not a slip-up, said LBBW analyst Dirk Chlench. “The US Federal Reserve is coming under increasing pressure to reconsider its view that the recent price hikes are only of a temporary nature.” As in April, the prices for used cars turned out to be the biggest inflation driver. They rose again strongly – and, according to the US Department of Labor, accounted for around a third of the monthly price increase.

Core inflation at its highest level since 1992

Particularly alarming is core inflation, which excludes volatile components such as energy and food. It climbed 3.8 percent in May. The last time there was such a sharp increase was in 1992. In April, the core inflation rate was 3.0 percent. The end of the corona lockdowns and the trillion dollar cash injections by the US government have been driving inflation in the US for months. Prominent economists like Larry Summers, Olivier Blanchard and Mohamed El-Erian warn against underestimating the danger. According to Blanchard, the high government spending under US President Joe Biden could overheat the economy.

Just a passing trend?

Most economists are still looking at the trend with serenity, however. In their opinion, the development is mainly based on temporary factors. The US service sector is back in normal mode in many places. Prices for air travel and hotel accommodation are picking up again and are well above the previous year’s level, says chief economist Thomas Gitzel from VP Bank. “So there are so-called base effects at work once more.” At the same time, the shortage of semiconductors is now at least indirectly affecting consumer prices. If there are no new cars due to a lack of semiconductors, customers switched to used cars. These would have become significantly more expensive. Gitzel predicts that the price level will slowly drop from a high level in the summer months. The US Federal Reserve (Fed) claims that inflation will only pick up temporarily. Because compared to the previous year, the economic downturn in the Corona year 2020 resulted in high rates of price increase. That is why the central bank has not yet seen itself under pressure.

Little movement on Wall Street

Wall Street barely reacted to the renewed surge in inflation. The Dow Jones rose by 0.6 percent, the S&P 500 even jumped to a record high. The US dollar gained against the euro. So investors do not anticipate a tightening of monetary policy in the US for the time being. In the eurozone, too, the money locks are still strongly open. The European Central Bank (ECB) is sticking to its trillion-dollar anti-corona crisis program (PEPP) and plans to expand bond purchases in the next quarter compared to the first three months of the year. In doing so, the central bank wants to avoid tightening the financing conditions for companies, states and private households.

ECB raises inflation forecast

The rising inflation hardly worries the euro watchdogs . The higher euro will dampen inflation, said ECB President Christine Lagarde. Nonetheless, the ECB raised its inflation forecast. According to the central bank, inflation should be 1.9 percent in 2021. In March, the ECB was still assuming an increase of 1.5 percent. For 2022, the monetary authorities expect an annual price increase of 1.5 percent and for the following year unchanged at 1.4 percent. According to the ECB, inflation that is too high can lead to a price spiral. Higher prices mean consumers get less goods for their money. So they demand higher wages in order to be able to maintain their standard of living. In turn, in order to pay the higher wages, companies continue to raise the prices of their products. On the other hand, permanently low prices are seen as a risk for the economy: companies and consumers could then postpone investments – in the hope that it will soon become even cheaper. In the medium term, the ECB is aiming for an annual inflation rate of just under two percent. In Germany, the inflation rate is already above this level. In May the Consumer prices compared to the same month last year by 2.5 percent , the highest value since September 2011.

Rising producer prices “Hidden inflation” as a warning sign

As of: 06/09/2021 1:32 p.m.

In China, producer prices have risen faster than they have been in 13 years. In Germany, too, inflationary pressure from producers is growing. When will consumers feel this? From Angela Göpfert, tagesschau.de In China, producer prices rose by 9.0 percent in May, the strongest they have been since 2008. Anyone who thinks what is happening in China does not affect the German consumer is wrong. As far away as China may feel for some German consumers: The fresh data from China are fueling the inflation debate in this country, as they reveal a problem that Germany and the euro zone are also facing.

“Hidden inflation” also in Germany

In April, producer prices in the Federal Republic of Germany soared by 5.2 percent compared to the same month last year. That was the highest increase since August 2011, when prices rose sharply after the financial and economic crisis. The producer prices are considered to be an important leading indicator for the development of consumer prices. They usually only meet with far less media interest, which is why they are sometimes referred to as “hidden inflation”.

Energy prices as a driver of inflation

So the crucial question is: Will producer price inflation also reach consumers? So far, not much of that has been felt. In April consumer prices in Germany climbed by 2.0 percent compared to the same month last year. Around half of this increase was due to the rise in energy prices. A look at the recent past of the German economy also shows that consumer prices have mostly only increased significantly at a much slower pace when producer prices have risen similarly. The producer price inflation was therefore only to a small extent reflected in rising consumer prices.

Consumers have saved a lot of money

But this time everything could be different. The reason is a special effect of the corona pandemic, which has never come to fruition in this pronounced form: the deferred demand. “The corona pandemic inhibited private demand for months and led to a kind of compulsory saving. The savings surplus now amounts to over 150 billion euros and is likely to rise to around 200 billion euros by the end of 2021,” said LBBW economist Jens-Oliver Niklasch across from tagesschau.de . This corresponds to a potential increase in consumer demand of up to 17 percent compared to the pre-Corona year 2019.

Companies can pass on more costs

“If we open everything now, then this strong additional demand will meet an offer that has become more expensive in terms of costs. The probability is correspondingly high that the companies will be able to pass on a larger part of the costs,” says Niklasch. Michael Holstein, chief economist at DZ Bank, is convinced that “the manufacturing companies will certainly try to pass on part of their cost increase to their customers.”

Savers are actually expropriated

Against this background, LBBW economist Niklasch initially expects inflation rates to continue to rise over the remainder of the year. In the second half of the year, the VAT effect should come into its own: “Then we will probably reach inflation figures of over three percent.” This has very real consequences for consumers and savers in Germany: With interest rates of zero percent and an inflation rate of over two or even three percent, the real interest rates, i.e. the nominal interest rates minus the inflation rate, are negative. Savers who invest their money in overnight money accounts or savings books are actually expropriated. This is fueling the flight into stocks and real estate, which in turn continues to inflate the price bubbles in these markets.

Wage-price spiral not yet in sight

After all: LBBW expert Niklasch sees the rising inflation rates as a temporary phenomenon, the ingredients for a permanent increase are not there. “For inflation rates to rise over the long term, wages would have to go along with them; a wage-price spiral like the one in the 1970s would be needed. But we are not seeing that in Germany at the moment.” From January 2022, the inflation rate should quickly drop below the two percent mark.

Stress on industry harms the economy

But even if the rising producer prices were not or only slightly reflected in rising consumer prices, that would not bode well. If producers cannot pass the rising prices on to consumers, that would indicate weak consumption dynamics. That seems to be the case in China at the moment, as Commerzbank foreign exchange expert Hao Zhou points out. “As a result, there is a risk that industrial profits will shrink rapidly, which will weigh on the general economic outlook.” So regardless of whether the producers pass the rising producer prices on to the consumers or not: they are always a warning signal.

According to the people of Nhan Trach beach village (Bo Trach district, Quang Binh province), Nhan Trach personal market has existed for a long time and has its own characteristics of a coastal fishing village. Nhan Trach market only takes place within 3 hours, from 4 am to 7 am every day. Boats of fishermen in Nhan Trach sea village (Bo Trach district, Quang Binh province) docked at the start of the Nhan Trach market meeting. The boats of fishermen in Nhan Trach sea village (Bo Trach district, Quang Binh province) came to the shore carrying fresh seafood. Fresh scads are caught by the fishermen of Nhan Trach sea village and brought to the shore for the market. Fishermen transport fish from boats to Nhan Trach market. The scene of buying and selling fish takes place bustling in Nhan Trach market. Many small traders in the big markets of Quang Binh province such as Dong Hoi, Hoan Lao (Bo Trach district), Quan Hau (Quang Ninh district) … come to Nhan Trach market to buy and sell seafood. Ms. Nguyen Van (70 years old, in Nhan Trach commune, Bo Trach district, Quang Binh province) said: “I got up early and went to Nhan Trach market to buy fresh fish that fishermen had just caught. The fish is brought home and cooked immediately, so it is very delicious, salty and salty with the taste of the sea.” Fresh squids have just been caught by fishermen and brought to Nhan Trach market for sale. The fishermen of Nhan Trach sea village had a “sea fortune” season, brought them to Nhan Trach market, and were immediately purchased by traders.

Mr. Nguyen Vu Khac Huy, Director of Vina Phu Quoc Travel and Permanent Vice President of Phu Quoc Tourism Association, said that tourism in Phu Quoc is very exciting now, on average, there are 60 flights a day, more 20 trains and ferries take guests to Phu Quoc. Each week, the company receives an average of 1,000-1,500 visitors, if on holidays like April 30, the number of visitors is expected to nearly double. Currently, the prices of services in Phu Quoc are stable, with no signs of increase. However, according to Mr. Huy, this time, if guests book services such as hotels for the April 30th holiday, places are almost overloaded. Usually on holidays, the prices of services increase 10-30%, but the number of units does not increase much. Accommodation in Phu Quoc has opened nearly 100% of the total capacity, with the exception of a small percentage of properties that are too difficult to close for repair. Tourists take souvenir photos at the tower of Ponargar (Nha Trang). Photo: TUY UYEN Meanwhile, Mr. Nguyen Van Khoa, Chairman of Binh Thuan Tourism Association, said that due to the impact of COVID-19 epidemic, the number of tourists coming to Binh Thuan is not much on normal days. It is expected that this April 30, visitors to Binh Thuan will increase. To open the door to welcome guests during the holidays, Binh Thuan currently has about 16,000 rooms including one to five star accommodation types serving tourists. On the occasion of the holiday, the service price increased by 30%, this is normal because businesses have to pay costs, especially the employee’s salary policy when working on holidays as prescribed … Similarly, Mr. Le Van Son – General Manager of Liberty Central Nha Trang Hotel, Vice President of Nha Trang Hotel Association – Khanh Hoa, said that the unit’s room capacity is currently 70%, this April 30 ceremony is sure will reach 100%. “On this occasion, our room rates hardly increase, if any, it is just a small surcharge. Currently, accommodation establishments in Nha Trang have opened 30-40%. The reason is that companies still find the market uncertain. Maybe close to the holiday, some establishments will open the door to save customers to save costs ”- Mr. Son said. Long-distance tours in the North are also chosen by many guests during the April 30 holiday. Photo: HN According to representatives of Saigontourist travel company, realizing the increasing demand of tourists after Tet holiday, from March the company reopened all the itineraries to domestic tourist destinations such as tours to the Northeast, Northwest, Heritage journey in the Central region to Da Nang – Hoi An – Hue – Quang Binh … Currently, all tours 30-4 by plane have been sold out with promotional prices announced by the company. If you want to buy an airline tour, you will have to follow the new price. Tour price is calculated as the service price at the time of booking. In addition, the company continues to book all package tour services, airline tickets, hotels … for guests in need. A representative of the Ben Thanh travel company said that thanks to good control of COVID-19, visitors are now assured of their willingness to travel, a lot of tourists have booked summer tours, planning travel in April. , 5, 6. The most popular tourist destinations are Phu Quoc, Phan Thiet, Vung Tau, Da Lat and Da Nang. In particular, in order to quench the thirst for summer tourism 2021, the company launched a dream-priced Da Nang tour designed with a 5-star standard hotel, super-promotion price … Accordingly, package tours of three, four days only priced from 3,490,000-4,090,000 VND (including round-trip air tickets) … Currently, more than 500 guests have booked Da Nang tours for the months of April and May; more than 400 customers ordered round-trip flight ticket service and tourist hotel service in Phu Quoc. According to the representative of Ben Thanh tourism, Phu Quoc Island has increased its attractiveness thanks to the launch of new entertainment spots, especially the appearance of Grand World – The City of Sleeplessness brings unique experiences for visitors at Pearl Islands. Similarly, Vietnam Travel Company said it has received nearly 6,500 seats for the occasion of April 30. The favorite destinations are the paradise of Phu Quoc Pearl Island, Phan Thiet; Long-term destinations such as the Six-day North Road …. are also chosen by guests on this holiday.

The container crisis is re-emerging, and the cost is passed on to consumers?

It’s the season of shipping contract signing again. Most large retailers and manufacturers will sign annual agreements with shipping companies to lock in their container freight rates. However, signing the shipping contract for the next 12 months at the current shipping price can be said to be a lot of work. The import and export companies complained repeatedly.

From China to the West Coast of the United States to European ports, container prices have been hovering near record highs for several months.

It is understood that the Freightos Baltic Daily Indices (Freightos Baltic Daily Indices) recently hit a record high again. According to George Griffiths of S&P Global Platts’ global container freight pricing team, on the major global trade routes connecting Asia and North America, the contract price of a 40-foot container has been around US$2,500 to US$3,000 in recent weeks. , An increase of 25% to 50% from a year ago.

In the United States and other parts of the world, shipping usually has two peak seasons each year, including Christmas purchases before the Spring Festival holiday and late summer. The transition period between these two peak seasons can clear the previous container cargo backlog, but due to the Suez in March The congestion of the canal has worsened the backlog of container cargo.

Due to the shortage of containers and skyrocketing shipping prices, many foreign trade companies have been affected, and many companies even count it as a cost, which is borne by consumers.

An industry insider said: “The freight rates of the two main international container routes from Shanghai to Rotterdam and Shanghai to Los Angeles remain high. Merchants have begun to sign a one-year freight contract and put the freight into the cost.” Obviously, the freight rate has skyrocketed, and the company may be affected. These additional costs will eventually be passed on to consumers, especially smaller companies are more susceptible to the impact of freight and price increases.

It is understood that due to the impact of freight and raw materials, many companies have adjusted their commodity prices one after another, and some companies have raised commodity prices four times before and after. A person in charge of a foreign trade company said bluntly: “Price increases are inevitable, and once goods are piled up in containers or ports, the prices will increase more. However, fortunately, all competition is on the same ship.”

Previously, the world’s three largest shipping companies, ONE, Hapag-Lloyd and Maersk, have informed shippers that the chaotic situation of container trade is expected to wait until the second half of the year to return to normal.

On April 13, the State Council Information Office held a press conference. Due to the impact of the relevant international epidemic, the transportation market, especially the shipping market, saw a sharp rise in transportation prices and the shortage of international shipping containers.

In response to issues such as “difficult to find a box”, Li Kuiwen, a spokesperson for the General Administration of Customs and Director of the Statistical Analysis Department, responded at the press conference that the General Administration of Customs is closely monitoring the latest changes in the international transportation market in conjunction with relevant departments such as transportation. In terms of creating a business environment, in conjunction with relevant departments, we are continuing to work hard to promote the healthy development of foreign trade.

Air freight increases again, Apple’s Huawei chartered flight is wrong?

While the shipping situation is not optimistic, air freight also adds to the congestion for sellers. An Amazon seller said that the three UPS tickets that he issued at the beginning of the month are still blocked in Hong Kong, and the explanation given by the freight forwarder is that Apple and Huawei chartered flights and vaccines, resulting in fewer and fewer flights. In addition, the price of air freight has been constantly increasing. rise.

The seller raised a question. If it is for vaccine transportation, it is understandable. Those brands have not released new products. Why do they have chartered flights? Many sellers said that this should be an excuse for freight forwarders. The so-called “brand charter” had a similar excuse as early as October last year. It should be that orders are still being queued, but the recent air freight prices are really shocking.

Earlier, due to the blockage of the Suez Canal, many sellers’ bulky goods such as bicycles and treadmills have also begun to board the plane. Many sellers bluntly say that it is better to spend more money than to wait. If you have to wait that long, it will be a drain on the company.

I learned from the freight forwarding office that the United States has recently increased the price of air delivery very severely. The price of one flight has been increased three times. The price list has just been sent out, and it didn’t take long to notify the price increase.

Not only that, the recent Amazon FBA listing speed has made sellers complain. A forwarder issued a notice and received a DPD notice. Due to the recent adjustment of the Amazon Amm warehouse’s warehousing plan, the goods currently sent to the warehouse are likely to be delayed and slow to sign. Remind sellers and friends to avoid sending to Amazon Amm warehouse (Spedition AmmHamburger Str. 99, 90451 Nürnberg, Germany). Recently, sellers and friends who have sent to the warehouse should pay more attention, prepare in advance, and pay more attention to the information in the warehouse.

In addition, several freight forwarders have learned that not only the prices of sea and air transportation have risen, but the prices of railway channels have also increased. According to the freight forwarder, the information obtained by their company’s inquiry is that the railway to Rotterdam has risen to 11,000 US dollars, which is three times the amount before the epidemic, and the position is extremely tight. “At present, the freight rates of Eurokey Port and West Coast Port are almost twice the highest rates I have seen in the past 20 years in the industry.”

Source: Hugo Net

Can the China-Europe Express train continue to “fire”?Analysis on the development prospects of China-Europe Express

China Railway Express

In the current layout of semiconductor companies in my country, SMIC is undoubtedly the leader and the most advanced company in domestic chip foundries. It has successfully mastered the production technology of 14nm chips and has begun to launch an offensive horn to 7nm. As for the achievements of SMIC, Liang Mengsong played a key role in it. It can even be said that without Liang Mengsong, there would be no SMIC today. However, it was such a leader in chip manufacturing and R&D who submitted his resignation to the SMIC Board of Directors at the end of 2020, which aroused widespread domestic discussion.

Liang Mengsong has worked for TSMC and Samsung, two companies with the world’s top chip manufacturing technology, and has made significant contributions during his tenure. In 2017, Liang Mengsong formally joined SMIC, served as its co-CEO, and became a director. While the precarious SMIC was respite, it also ushered in a major change. During Liang Mengsong’s tenure, he led SMIC to successfully achieve the five-generation leap. It took 300 days to upgrade SMIC from 28nm process level to 14nm process level, which enabled SMIC to secure its position as the most advanced chip foundry in China. Currently the only domestic chip foundry that has achieved 14nm mass production. However, why is such a powerful person in the field of chip manufacturing suddenly submitting his resignation? In this regard, the outside world has mainly speculated on three points.

One is because of the controversy over SMIC’s future development route

Liang Mengsong adheres to the advanced process technology route, and believes that SMIC should launch into 7nm and higher-level processes, and strive to catch up with the R&D and production steps of TSMC and Samsung, making SMIC a real breakthrough in technology. However, the new leader Jiang Shangyi believes that SMIC should adopt packaging technology and chiplet technology, and strive to make breakthroughs in these two areas to make SMIC gain more profits. In this environment, Liang Mengsong submitted his resignation.

The second is because of the checks and balances of power, or Liang Mengsong did not get the corresponding respect

As the company’s co-CEO, the company’s major personnel changes should be known long in advance. However, Liang Mengsong was not informed of the news until a few days before Jiang Shangyi took office, which made Liang Mengsong extremely unbalanced. Of course, Jiang Shangyi and Liang Mengsong had had grievances before, which further aggravated Liang Mengsong’s dissatisfaction and submitted his resignation.

The third is because of the internal power struggle of SMIC

Before Liang Mengsong joined SMIC, SMIC was in a state of disarray, with all parties competing with each other and no control. This is mainly because Zhang Rujing introduced capital from the United States, Singapore, China and other countries when he was founded. Under the leadership of Liang Mengsong, SMIC has made continuous breakthroughs in technology, and naturally some capital is not happy.

Although Liang Mengsong submitted his resignation to SMIC, he did not get a reply immediately. On the contrary, now it has been satisfactorily resolved, making SMIC a promising future. After the resignation storm, Liang Mengsong continued to serve as the co-CEO of SMIC, and achieved tremendous improvements in all aspects such as salary. Liang Mengsong’s resignation storm has come to an end! SMIC has laid down its capital and its salary has quadrupled. It is reported that Liang Mengsong’s annual salary has risen from US$340,000 to US$1.53 million, which has quadrupled, and he has obtained a house worth about 22.5 million yuan. It is not difficult to see from this that SMIC has indeed made a bloody effort in order to retain Liang Mengsong.

With a four-fold increase in salary and a delivery of properties worth 22.5 million, Liang Mengsong’s resignation finally ended. In this ending, some people might think that Liang Mengsong is just for the money? In fact, personally feel that whether it is or not, this is human instinct, even if it is the original intention of Liang Mengsong’s resignation, there is nothing wrong with it. From the perspective of Liang Mengsong’s contribution to SMIC, he can fully accept such treatment. Not to mention that Liang Mengsong almost donated his income from SMIC to Chinese charity.

After Liang Mengsong’s resignation storm ended successfully, SMIC was once again on the right track of research and development. It is reported that SMIC will conduct trial production of 7nm process chips in April this year, which is undoubtedly a huge piece of good news for the Chinese semiconductor industry. Once it succeeds, it shows that my country has successfully entered the high-end chip manufacturing process industry and solved the worries of many technology companies.

In fact, it should be expected that Liang Mengsong will stay at SMIC in the end. Liang Mengsong’s contribution to SMIC is indelible, and it also proves that Liang Mengsong’s key to SMIC’s future development. For such an outstanding semiconductor scientific research talent, SMIC will naturally not let Liang Mengsong go away at the critical moment of the national semiconductor industry and the shortage of related talents. And even if Liang Mengsong resigns from SMIC, with his own level, he can enter other major scientific research companies such as Huawei HiSilicon, continue to lead China’s semiconductor industry to prominence and shine in scientific research.