BYD’s AI car shocks market 🚗 China’s superchips rival Nvidia ⚡ DeepSeek AI adoption explodes 🤖

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2025-02-17 | subscribe | homepage

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

Key highlights shaping the week:

• Ne Zha 2 dominates the global box office now at $1.65B

• BYD’s AI-powered budget cars for under 100,000 yuan

• Chinese businesses are rapidly adopting DeepSeek

• China’s companies pay out a record $328B in dividends

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.

🚀 Headlines

China’s BYD disrupts EV market with ultra-affordable AI-driven car system (link)

BYD launched its latest “God’s Eye” driving assistance system, offering three variants with up to three LiDAR sensors. The “God’s Eye” system will be available on all BYD models, including the BYD Seagull, Qin Plus DM-i, and Seal 05 DM-i, priced below 100,000 yuan. The entry-level “God’s Eye C” system features a three-camera cluster, 12 cameras, 5 mm-wave radars, and 12 ultrasonic radars, powered by the DiPilot 100 system with 100 TOPS computing power. The mid-tier “God’s Eye B” includes a LiDAR sensor powered by the DiPilot 300 system with 300 TOPS. The top-tier “God’s Eye A” uses three LiDARs and the DiPilot 600 system with 600 TOPS. The company has 110,000 engineers, with 5,000 focused on intelligent driving R&D. In 2024, BYD’s ADAS training mileage was 72 million km daily.

European firms continue to expand in China with UK’s Synthomer’s opening innovation center, and Germany’s Zeiss building HQ campus (link, link)

UK's Synthomer has officially opened its new China Innovation Centre (CIC) in Shanghai, a 2,000 m² facility equipped with more than 10 R&D laboratories. This center aims to enhance Synthomer’s capabilities in developing high-performance polymers and innovative ingredients for coatings, adhesives, construction, health, renewable energy, and electric vehicles. The CIC joins Synthomer’s global network of five innovation centers and seven technical centers.

German optical systems manufacturer Zeiss Group plans to buy land in Shanghai to build its China headquarters campus, covering 40,000 square meters with an investment of over CNY600 million (USD82.4 million). China became Zeiss’ largest market in 2021, and its China revenue reached CNY15.2 billion (USD2.1 billion) in the fiscal year ended Sept. 30, 2024, a six-fold increase in 10 years.

Nvidia invests in China’s driverless startup WeRide, sending its stock up more than 90% (link)

California-based NVIDIA bought 1.7 million shares in China’s self-driving startup WeRide, sending its shares up by 96% in premarket trading. The news comes just three months after WeRide made its public debut, raising USD 440.5 million through its U.S. IPO. Founded in 2017 by Qing Lu, Tony Han, and Yan Li, WeRide made history as China’s first L4 autonomous driving startup. The company has attracted backing from major players like the Renault-Nissan-Mitsubishi alliance and GAC Group. Before going public, the startup secured USD 1.442 billion in funding through 11 rounds, with backing from 41 investors, including USA’s The Carlyle Group and France-based Idinvest Partners. Nvidia’s latest investments and exits reflect a broader shift in strategy, with the company doubling down on AI-driven mobility while stepping away from certain automation and MedTech bets.

Chinese businesses rush to integrate DeepSeek AI at unprecedented scale (link)

Chinese businesses are rapidly adopting DeepSeek’s AI model, with 8 automakers, 9 financial securities firms, 3 state-owned telecom operators, and smartphone brand Honor integrating it. Alibaba, Huawei, Tencent, and Baidu are also facilitating client access to the AI model. NetEase’s martial arts game Justice Mobile introduces a DeepSeek-powered character. This surge is unprecedented in scale and industry breadth. Since the start of 2025, AI-related Chinese stocks have risen 15%, outperforming the MSCI China Index by 9%. DeepSeek’s open-source model allows customization and is significantly cheaper than OpenAI’s ChatGPT, which is not officially available in mainland China. DeepSeek’s affordability is pressuring other AI models to cut prices. 20-days after the launch DeepSeek hits 20 million daily active users, reaching 40% of ChatGPT’s base.

Ne Zha 2 becomes world’s top 10 grossing movies of all time, with the power of 138 Chinese animation companies and over 4,000 staff (link, link)

As of February 17, the box office of the Chinese animated film Ne Zha 2 has exceeded RMB12 billion (USD1.65 Billion), ranking 10th in global box office history. The latest box office forecasts indicate that the total box office for Ne Zha 2 will exceed 14.5 bln yuan (USD 2 Billion), surpassing all other animation films including those of Disney. The film's success is a reflection of the dynamic collaboration across the entire Chinese animation industry chain from IP incubation centers like Chengdu, to Beijing, where companies like Beijing Enlight Media provided strong financial support, and to the technical prowess of animation studios in Shanghai and Suzhou. 138 Chinese animation companies and over 4,000 staff members have worked on the movie. Over the eight trading days since the end of the Chinese New Year holiday, Enlight Media’s stock price has surged by more than 260% to CNY102 billion (USD14 billion).

Chinese companies don’t know where to put their cash — and it’s sparking a record rise in dividend payouts (link)

Chinese companies are offering record dividend payouts and share buybacks, with listed firms paying out 2.4 trillion yuan ($328 billion) in dividends in 2024, according to the China Securities Regulatory Commission (CSRC). Additionally, companies bought back shares worth 147.6 billion yuan, an all-time high. Goldman Sachs estimates that cash distribution could reach 3.5 trillion yuan in 2025. The dividend yield on Chinese stocks has climbed to around 3%, the highest in nearly a decade. This trend is driven by government initiatives to improve corporate efficiency and attract investors. State-owned enterprises (SOEs) like PetroChina and CNOOC Group are leading the surge, with dividend yields of 8% and 7.54%, respectively. The government’s push aims to draw investors back to the stock market, especially amid a lack of attractive alternatives in real estate and equities.

China’s supercomputer chips get 10 times more powerful than Nvidia (link)

Chinese researchers have reportedly achieved a near-tenfold performance boost over Nvidia-powered US supercomputers using domestically made GPUs. The team from Hohai University in Nanjing used a “multi-node, multi-GPU” parallel computing approach with domestic CPUs and GPUs. Their model achieved a speedup of six using just seven nodes, an 89% reduction in node usage compared to the Oak Ridge National Laboratory’s TRITON model. In a flood simulation at the Zhuangli Reservoir, the Chinese model completed the task in three minutes using 200 nodes and 800 GPUs, achieving a speedup of over 160 times. This breakthrough highlights China’s efforts to mitigate reliance on Western chip technologies amid US sanctions. The research code is available on an open-source platform, with potential applications in hydrometeorology and water management.

China to switch from feed-in tariff (FIT) to market-oriented renewables pricing by June 2025 (link)

China will transition from its feed-in tariff (FIT) system to a market-driven renewable energy pricing model by June 2025. This reform will shift wind and solar projects to competitive bidding and market transactions. Existing projects commissioned before June 2025 will follow a price-difference settlement mechanism. New projects will have dynamically adjusted power purchase agreements based on local renewable energy targets and competitive bidding. The policy includes three key components: full market pricing, a sustainable price settlement mechanism, and differentiated treatment for existing and new projects. This marks the biggest shift in renewable energy pricing since 2018, aiming to enhance competition but creating uncertainty over future returns for investors. Analysts expect prices to decline post-June 2025, potentially leading to a surge in project installations before the deadline.

🎁 Bonus Stories

Warner Bros., China's Jinjiang to open Harry Potter Studio Tour in Shanghai by 2027 (link)

Warner Bros. Discovery and China’s Jinjiang International Holdings are set to build a “Making of Harry Potter” studio tour in Shanghai by 2027, with an investment of over CNY2 billion (USD274 million). The project, located at Jinjiang Paradise, is expected to attract around 2 million visitors annually. Construction will likely start in the second half of 2025, with Warner Bros. holding a controlling stake in the joint venture. The studio tour will be a 53,000-square-meter indoor museum combined with an experiential display of movie props and technology, differentiating it from Disney and Legoland. The Wizarding World of Harry Potter at the Universal Studios in Beijing opened in 2021. Jinjiang Paradise in Shanghai, established in 1984, covers 103,000 square meters and currently undergoing a comprehensive renovation and upgrade, expected to reopen in 2027.

China's sovereign wealth funds are 2nd and 3rd globally with USD 2.4 trillion in assets and Hong Kong rounds out the top 10 with 500 billion (link)

The world’s largest sovereign wealth funds manage $13.7 trillion in assets, with the top 10 holding over USD 9.6 trillion. Norway’s Government Pension Fund Global is the largest, with $1.74 trillion. Following next are China’s two biggest funds, holding USD 2.4 trillion in assets. The China Investment Corporation (USD1.33 trillion) and SAFE Investment Company (USD1.09 trillion), play key roles in financing strategic initiatives like the Belt and Road. Through these funds, billions have been invested in railroads, green energy, and mining projects across Africa. Notably, Chinese investment across the region is 2.5 times greater than Western nations put together.

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