Today’s Focus: Vicious Competition in China’s Auto Industry Could Lead to “Real Estate-style Collapse”; Guangdong Villagers Resist Demolition, Accuse CCP of Chaos; US Accuses China of Deliberately Poisoning with Fentanyl Continuously Exported Through Third Countries.
First, let’s take a look at China’s auto industry. Amid China’s economic downturn and real estate collapse, the Chinese auto industry is also in jeopardy. The Chinese auto market is deeply mired in internal competition and price wars due to the economic downturn and fierce competition.
Starting from mid-May, a price-cutting trend swept through the Chinese auto market. On May 20, FAW Hongqi suddenly announced a price reduction on its 2025 H9 model, with the starting price plummeting from 329,800 yuan to 235,800 yuan. Following that, BYD announced price cuts up to 34% on 22 of its models. Subsequently, brands like Changan, Zhejiang Zero Run, and Geely Auto followed suit in reducing prices. Especially with newcomers like Xiaomi and Huawei entering the fray, the overall competitive landscape of the auto industry has become more complex.
According to data from the China Passenger Car Association, the scale of price reductions in the Chinese auto market from January to May 2024 has exceeded 90% of the entire year of 2023, with new energy vehicles generally operating at a loss. According to data from the China Automobile Distribution Association, the auto industry’s profit in 2024 decreased by 7.3% compared to the previous year, with a profit margin of only 4.4%; in the first quarter of 2025, the average profit margin in the auto industry was only 3.9%, hitting a ten-year low.
The internal competition in the auto industry has escalated into a war of words. At the “2025 China Auto Chongqing Forum” held from June 6th to 7th, major auto companies engaged in a fierce exchange of criticisms, condemning the industry’s “internal competition”, with strong focus on BYD’s public opinion battle. For example, BYD’s Brand Manager Li Yunfei criticized the industry as “some people being both bad and stupid,” while Geely Auto’s Vice President Yang Xueliang retorted with “thieves shouting to catch thieves.”
Li Shufu, Chairman of Geely Holding Group, also criticized some companies for using “unspeakable” competitive methods that severely disrupt market order and industry ecology. Unbridled internal competition and simple price wars will inevitably lead to corner-cutting, counterfeiting, and other violations, leading to a situation of disorderly competition.
In recent years, many auto companies have continued to engage in price wars to boost sales, with some markets even witnessing the phenomenon of “zero-kilometer second-hand cars”. The so-called “zero-kilometer second-hand cars” refer to new cars being quickly turned into second-hand sales after being registered, creating a false impression of “hot sales” and misleading consumers.
Wei Jianjun, Chairman of Great Wall Motors, recently warned of this phenomenon in an interview, pointing out that the “zero-kilometer second-hand cars” anomaly has affected numerous trading platforms, involving thousands of dealers. He further revealed that some heavily indebted auto companies use this method to mask operational risks, hinting at a potential crisis similar to the “Evergrande of the auto industry”, with implications pointing to BYD, which has debts exceeding 584.7 billion yuan.
US economist Davy J. Wong told Epoch Times that Wei Jianjun’s mention of the industry having the “Evergrande worries” essentially points to the essence: the auto industry, like the real estate industry, is heading towards a cycle trap of “financing-expansion-internal competition-collapse”.
He believes that Chinese auto companies are currently caught in a state of “self-destructive competition”, with the root cause not just being about technology, market, or consumer choices, but stemming from structural distortions at the three levels of capital, policy, and management. CCP policies have led to an influx of capital into auto companies, resulting in excess capacity and imbalanced corporate structures, along with causing an industry-wide over-expansion. Many companies still adhere to “real estate thinking” or “financial leverage model”, prioritizing scale and market capitalization over the real value of products and brand building.
Former Guangxi automotive mechanical structural design engineer Huang Guocheng pointed out recently in an interview with Epoch Times that Chinese auto companies focus on aesthetics, colors, and interior decorative elements, while neglecting investment in performance and safety. Rushing to catch up on government subsidies and policy dividends, these companies have hasty R&D processes, leading to poor product stability.
Huang Guocheng also revealed the serious corruption in China’s auto industry, with many safety tests being controlled by government agencies. If companies do not provide benefits, the testing procedures can become difficult. To pass inspections, many companies use specially made samples for testing vehicles, incorporating additional reinforced materials like thick steel plates and fire-proof cotton. However, in actual production, these companies cut corners to reduce costs, posing significant safety hazards.
US economist Davy J. Wong stated that China’s product quality crisis not only affects domestic markets but also puts Chinese auto brands in a triple predicament overseas: a crisis of quality trust, strengthened policy barriers, and damage to global image, facing a re-stigmatization of “Made in China = low price, low quality”. In other words, internal competition not only destroys the internal ecology of Chinese autos but also risks ruining their “going global dream”.
Although CCP has claimed to crack down on the vicious competition in the auto industry, the effect has been minimal. Wang Xiouwen, assistant researcher at the Taiwan Institute for National Defense Security Studies, told Epoch Times that CCP’s official stance against internal competition is to manage the market with politics, which may prove difficult. Currently, China is facing excess internal production capacities and cannot digest so many electric vehicles, while exports face policies protecting domestic auto industries in various countries, leaving internal boasting as the only option. He said, “Perhaps CCP is unable to control it, can only express it verbally, otherwise there wouldn’t be the Evergrande issue in real estate either.”
Switching to the situation in Guangdong regarding demolition projects. The Guangzhou Tianhe District government in Guangdong Province, China, recently proposed demolition in certain areas, leading to resistance from residents who accuse the government of disrupting livelihoods and oppressing villagers. The urban village renovation project in Tianhe District, named the “Huanwushan Ciyuan District” project, involves the comprehensive renewal and redevelopment of two major urban villages, Changban Village and Yuangang Village, covering approximately 203 hectares. Official media states that this endeavor will free up inefficient existing land resources, providing industrial support and innovative services spaces for universities and research institutes.
According to information gathered by Epoch Times reporters, since early June, residents of Changban Village have been gathering daily at the ancestral temple to assert their rights, casting opposing votes on the demolition project, while residents of Yuangang Village have been congregating daily at the village committee, holding slogans like “Restore our voting rights” to defend their rights. The process has seen police present on-site to disperse the gatherings.
The redevelopment project is divided into three phases, involving not just the demolition of residential homes but also schools, collective village land, state-owned old factories, etc., in a widespread demolition effort. A Changban Village resident using the alias “Zhao Pei” expressed to Epoch Times reporters, “Oppose demolition, disagree with the renovation, no need for changes.”
The governing street office under the Tianhe District government, known as the “Changxing Street Office”, issued a public notice on April 30th stating that the demolition project had obtained the consent of the majority. However, villagers claimed there were irregularities in the process.
During the voting, elderly villagers were called by the village committee personnel to sign intention forms, with many elderly individuals being misled and not informed of the compensation plan.
Authorized proxies voted without the owner’s consent; secondly, during the voting, only names were signed without thumbprints, causing the entire Changban Village population to reject the so-called voting results presented by the government and demand a re-vote from the village committee.
Zhao Pei stated that for such a significant matter as demolition, authorities should convene a village assembly. Currently, two-thirds of the population over 18 in the village contributes 1,500 yuan per household, jointly hiring a lawyer to pursue legal procedures.
It is explained that nearly every household in Changban Village and Yuangang Village has six to seven-story buildings, around twenty years old, constructed during a time when the government allowed high-rise constructions, and over the years, the main income for villagers has been rental revenue.
During times of economic prosperity, tenants in village homes were essentially migrants working in the city. However, in the past two years, Guangzhou has witnessed a wave of business closures, leading migrant workers to lose jobs and many returning to their hometowns. Villagers note that currently, the village houses are mostly being rented to residents from within the province.
Zhao Pei mentioned that in the current economic downturn, villagers are not financially struggling due to rental income, and if demolition were to take place, the villagers would lose out on their income, resulting in a significant drop in their living standards. People are inevitably unwilling to undergo demolition.
A resident of Yuangang Village, using the alias “Xiaomei”, stated that although the compensation plan for Yuangang Village has not been disclosed, based on observing compensation plans from other villages, the compensation for returning to the original site is calculated only up to 3.5 stories, with a maximum compensation area of 280 square meters with an additional 4,000 yuan per square meter for any area exceeding the limit. As the residential areas in Yuangang and Changban villages are quite large, they are hesitant to accept such compensation terms.
Xiaomei said, “The government is causing chaos, treating villagers as fools. Regardless of the social conditions, the government, along with developers, comes to exploit the people, harming the common folk for political achievements.”
Zhao Pei stated, “The entire village must unite; the government should not tamper with even a single blade of grass or parcel of land.”
Turning to the fentanyl issue amidst US-China tensions. FBI Director Kash Patel stated in a media interview on June 6th, when addressing the fentanyl problem, that the Chinese Communist Party (CCP) purposefully poisoned American society.
He remarked, “The root of the American fentanyl crisis lies with the Chinese Communist Party (CCP), as the CCP exports fentanyl precursors to the United States.”
The fentanyl crisis in American society has resulted in tens of thousands of American deaths annually. According to data from the Centers for Disease Control and Prevention, between May 2022 and April 2023, over 77,000 people died from overdosing on fentanyl and other synthetic opioid drugs. In 2024, nearly 50,000 individuals in the US died from fentanyl-related issues.
Patel believes that the CCP’s export of fentanyl precursors is a targeted tactic, with its long-term plan to harm “young people who could have pursued careers as police, soldiers, or teachers,” with the aim of weakening the US.
Commentator Zhou Xiaohui’s article on Epoch Times points out that Patel’s remarks suggest that the CCP is deliberately harming millions of Americans by intentionally distributing fentanyl. The CCP authorities are reportedly supporting the illicit synthesis of drugs and flooding the American market. This understanding has been recognized by the political spectrum in the US, as Patel, a former top intelligence official appointed by Trump, once again confirms with strong evidence, signifying an exceptional significance.
According to data from the United Nations Office on Drugs and Crime, China has between 40,000 to 100,000 pharmaceutical companies. The European police organization also noted that China is the world’s largest producer and seller of lab-synthesized drugs.
Furthermore, in April last year, the US-China Economic and Security Review Commission pointed out that the CCP openly subsidizes the public sale of illicit synthetics and evidence from screenshots of their National Tax Bureau’s official website export tax-rebate rate inquiry tool.
Patel stated that the CCP is lying to the world, claiming to have ceased production of fentanyl precursors. About a dozen precursor substances can be used to manufacture fentanyl. While the CCP promises to halt the production of certain precursors, it continues to sell all these substances.
With the Trump administration cracking down on the southern border to combat drug trafficking routes, the CCP is now transferring precursors to Canada and India for manufacturing, then distributing globally from there.
According to the latest annual Threat Assessment Report issued by the Drug Enforcement Administration (DEA) in May, the US government expressed concern about the complex fentanyl “super-labs” within Canada.
The report states, “The operational scale in Canada has the potential to expand, filling the supply gap caused by the interruption of Mexican fentanyl production and distribution.”
The US is also intensifying efforts to collaborate with the governments of Canada and India to combat the manufacture and distribution of fentanyl drugs. In January this year, two pharmaceutical companies in India, Raxuter Chemicals and Athos Chemicals, were accused of committing criminal conspiracy, allegedly importing fentanyl precursor chemicals and distributing them to the US, Mexico, and other regions. Raxuter’s founder and executive Bhavesh Lathiya was arrested in New York City and indicted.
Prosecutors alleged that these companies used deception and fraud to evade detection, including mislabeling packaging, falsifying customs forms, and making false declarations at border crossings.
This May, the federal government arrested 16 individuals in five states and seized over 400 kilograms of fentanyl. This is the largest fentanyl case ever cracked by the DEA.
Last month, three Chinese citizens and one Chinese company were indicted for allegedly importing pill presses and other equipment used in the manufacture of fentanyl “deadly counterfeit drugs” into the United States.
Zhou Xiaohui emphasized that the US has had multiple talks with the CCP regarding the fentanyl issue and reached agreements. However, with the CCP deliberately spreading fentanyl to harm Americans, the CCP will naturally not admit to this strategy and may likely feign cooperation with the US to combat fentanyl precursor production. It serves as a reminder that when dealing with enemies like the CCP, the US cannot afford to be played around with on the fentanyl problem.
【Epoch Focus Production Team】