Reuters: 

Good afternoon. A question from Reuters. Analysts say the fact that producer prices continue to decline compared with 2023 levels is evidence of overcapacity among Chinese manufacturers, as that suggests factory owners are cutting costs in the distribution and sales process. China's exports fell 7.5% in March in U.S. dollar terms. So does that show Chinese factory owners are no longer able to cut prices to attract buyers abroad? And what can they do in the future to improve their fortunes? Thank you.

Wang Lingjun:

Thank you for your question. I would like to address it from two perspectives.

First, we do not think that the decline in producer prices necessarily indicates the so-called "overcapacity." The decrease in product prices can often be attributed to various factors, such as fluctuations in raw material prices, technological updates, and voluntary concessions made by manufacturers. Particularly in today's rapidly evolving technological landscape, companies continuously invest in research and development, innovation, and the application of new technologies and processes. This not only improves product quality but also greatly reduces production costs, allowing for the expansion of profit margins downstream.

Second, the global popularity of Chinese products stems from their innovation and quality. For example, China's strong research and development capabilities have led to the creation of smart and environmentally friendly home appliances that provide consumers with a better experience, meeting their higher demands for quality of life. Similarly, China's reliable, durable, and high-performance engineering machinery, coupled with comprehensive after-sales service, enjoys global popularity and can be found at major overseas construction sites. Additionally, Chinese ceramics, an important symbol of Chinese civilization, embody Chinese culture and stories and are exported internationally. These achievements are the results of our companies' diligent efforts and the rational choices of numerous users and consumers. Thank you.