Apple’s China R&D hub 🍏 AstraZeneca’s $2B drug deal 💊 ByteDance's AI earbuds 🎧

2024-10-14 | subscribe | homepage

Welcome back to this week’s edition of the China Insights Weekly Newsletter!

With perhaps the most pleasant season in China in full swing, China’s business and tech sectors continue to surge forward. Here’s some of the headlines this week:

• Apple’s 215,000-Square-Foot Shenzhen Lab: Apple opens its largest R&D facility outside the US, focusing on the iPhone and Vision Pro, with plans to hire 1,000 staff.

• AstraZeneca’s $2B Drug Deal: AstraZeneca secures a massive $2 billion licensing deal with China’s CSPC for an experimental cardiovascular drug.

• 400 Robotaxis in Wuhan: Baidu’s Apollo Go fleet expands to 400 vehicles in Wuhan, marking a new milestone in China’s growing robotaxi services.

Dive deeper into these stories and more by clicking the headlines below. We value your feedback—let us know your thoughts or suggestions on LinkedIn, X or Facebook.

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🚀 Headlines

Chinese new energy vehicles sales continued to surge in September 2024, surpassing previous record set in August (link)

Chinese domestic new energy vehicle (NEV) sales in September were a record 1.176 million units, up 18.8% from the previous month and up 45.5% from the previous year, accounting for 51.8% of the domestic automobile sales and surpassing 1 million mark for 2nd month in a row. China’s domestic automobile sales were 2.27 million units in September, up 16.9% from the previous month and down 6% from the previous year. Automobile exports were 539,000 units, up 5.4% from the previous month and up 21.4% from the previous year. China exported 105,000 NEVs in September, up 19.3% year-on-year and 6.0% month-on-month, accounting for 24% of the total monthly vehicle exports. Electric Vehicles (EVs) accounted for 82% of the NEV exports. For the first nine months of 2024, China exported 4.312 million vehicles, including 968,000 NEVs, up 30.2% year-on-year.

Apple's largest research lab outside the US opens in China, plans to hire 1000 staff (link)

Apple has opened a new testing and development lab for the iPhone and Apple Vision Pro in Shenzhen, China, with plans for 1,000 staff. It is situated in Shenzhen Park in Hetao, around seven miles from the Apple Holiday Plaza Shenzhen store. The lab currently spans 215,000 square feet and is expected to expand later. The lab is part of the region's Greater Bay Area economic development hub. Said to be for testing and research concerning the company's major products, specifically the iPhone, iPad, and Apple Vision Pro. Apple has been conducting research and development in Shenzhen since around 2017.

USA's Eli Lilly to build manufacturing facility in China's Suzhou with USD 200 million investment (link)

Five months after Indianopolis-headquartered Eli Lilly secured the first of two approvals for tirzepatide in China — one for Type 2 diabetes and the other for obesity — the company revealed plans to expand its manufacturing site in Suzhou to produce the in-demand drugs along with other pipeline medicines. Lilly will invest USD200 million for the upgrade. The new project will bring Lilly’s total investment in Suzhou to nearly 15 billion yuan (USD2.1 billion). The 28-year-old site, which is the Indianapolis pharma’s lone manufacturing facility in China, employs 500 employees. With the expansion, Lilly plans to add 120 new positions at the site, which will supply medicines for China and Europe.

UK’s AstraZeneca licenses China’s CSPC’s cardiovascular drug in USD 2 billion global deal (link)

Cambridge-headquartered AstraZeneca has forged a licensing pact worth USD2 billion with the Chinese firm CSPC for access to an experimental small molecule treatment for dyslipidemia. Dyslipidemia, a condition involving unhealthy levels of cholesterol and other fats in the blood, is a major risk factor in cardiovascular diseases, which make up the world's biggest killer with 17.9 million deaths per year. The oral drug developed by Shijiazhuang, Hebei Province-based CSPC is designed to prevent the production of a low-density lipoprotein that is involved in the transport of cholesterol in the bloodstream and thus it may treat and prevent a range of cardiovascular diseases. According to the deal terms, CSPC is eligible for USD 100 million upfront in addition to up to USD 1.92 billion in payments based on development and commercialization milestones and royalties.

Huawei introduces HarmonyOS Next to compete with iOS and Android (link)

Shenzhen-based Huawei is set to release its new mobile operating system HarmonyOS Next on Tuesday positioning it as a competitor to Apple’s iOS and Google’s Android. This launch is part of Huawei’s ongoing effort to create a Chinese mobile ecosystem amid continuing US sanctions. HarmonyOS Next is designed to be a completely independent platform, no longer supporting Android-based applications. The system will debut on multiple Huawei devices, including the Mate 60 series, the foldable Mate X5 smartphone, and the 13.2-inch MatePad Pro tablet. Since January, it has been available to developers in China. Huawei claims that over 10,000 applications and services have been developed for the new system. HarmonyOS has captured a 17% market share in the first quarter of this year which positions HarmonyOS as the second-largest operating system in China, surpassing Apple’s iOS, which dropped to 16%. Android continues to lead the market with a 68% share.

TikTok owner ByteDance launches USD170 earbuds in China as it enters AI wearables (link)

ByteDance, owner of the popular short-video app TikTok, launched its first earbuds, which enable users to talk directly with the company’s generative artificial intelligence (GenAI) chatbot without waking up their smartphone. ByteDance’s self-developed chatbot, Doubao, is currently China’s most popular GenAI app. The open-ear wearables, Ola Friend, are currently available only in China. They are designed to serve as an audio assistant when the user is traveling, practicing English, listening to music, or simply looking for company. The service is powered by the firm’s large language model – the technology behind GenAI applications. Weighing 6.6 grams each, the earbuds come in four colors: purple, silver, black and white. Priced at 1,199 yuan (USD170), the product is set to ship on October 17.

China is leading adoption of robotaxis with at least 8 cities trialing the service for passangers (link)

In Chinese cities it is becoming normal to board a robotaxi (or robobus) as several operators are vying for dominance and have expanded fleets. Apollo Go by Chinese tech company Baidu currently has as many as 400 robotaxis on the road in the city of Wuhan. Several companies are operating public trials and services in the cities of Guangzhou, Shenzhen, Shanghai and Beijing. Smaller cities are also being included by some companies and they are also often where companies launched their first trial services. While initial trials were often free and even on an application basis, robotaxis now have low fare structures. Chinese provider WeRide has also run a public trial in Abu Dhabi. Singapore has a robobus service by the same company. Many current robotaxis are limited to specific areas, times of day or distances and might have a remote safety operator, who under Chinese law can look after as many as three taxis. Some operations may include on-board safety drivers, which are not needed for any specific maneuvers of the vehicle.

China's higher education enrollment rate exceeds 60% (link)

The post-secondary education enrollment rate in China topped 60.2 percent in 2023, up from 30 percent in 2012. In 1949 80% of the Chinese population was illiterate. Universities have also become the sources of cutting-edge technological research and disruptive innovation, undertaking over 60% of China's basic research and major scientific tasks, hosting 60% of the national key laboratories, and receiving more than 60% of national science and technology awards. Last year, over 10.42 million students were enrolled in universities, colleges and vocational schools nationwide, up 2.73% year on year. The country boasted 3,074 higher-educational institutions in 2023, 61 more than in 2022. Beijing tops the country with 92 higher education institutions, while Wuhan and Guangzhou are tied for the second place with 83 higher education institutions.

🎁 Bonus Stories

Academic bars define a new Chinese bar trend, blending intellectual discourse with casual socializing (link)

Academic bars (学术酒吧) are transforming China’s nightlife. The new concept blends the casual atmosphere of a bar with intellectually stimulating activities like lectures, discussions, and workshops. This concept’s hashtags amassed 1.7 million views on Xiaohongshu, reflecting its popularity among young Chinese urbanites who value intellectual and social experiences. Bunker (街垒), a small roadside bar on Urumqi Road in Shanghai introduced academic presentations into its setting this summer. Topics often revolve around social sciences, including economics, society, and technology, with speakers from prestigious institutions such as Harvard and Yale. Last month, Xiaohongshu launched its pop-up academic bar in Shanghai, featuring popular talk show hosts and writers. The trend is quickly spreading to other cities such as Beijing with Meta Space Bar (空格酒谈), Tianjin with H.lounge, and Nanjing.

Saga city of the light, the world’s largest immersive theater experience opens in Shanghai (link)

In the vein of the popular and long-running production Sleep No More comes Shanghai's latest foray into massively ambitious interactive theater: SAGA City of Light. With a performance area of over 12,000 square meters, SAGA City of Light is the single largest theater show (Area Covered) ever created - officially recognized by Guinness World Records. The show includes over 50 separate scenes, 130 actors, 26,000 vintage props, and cinematic scenes. SAGA City of Light is undertaken by French production company Puy du Fou, known for their bafflingly gigantic, large-scale theme park-meets-theater pieces in Europe. Guests wind their way through the massive 12,000-square-meter space, chasing their own storylines through the alleys and doorways, being thrown into the back of a truck, stowing away on a riverboat, or talking their way onto an old train.

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