China strikes gold 💰 100K flying cars in 2030 🚁 Alibaba outperforms OpenAI 🤖

2024-12-02 | subscribe | homepage

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

This week, China is making headlines across innovation, global partnerships, and its thriving domestic market. Here are some of this week’s highlights.

• Huawei’s Mate 70 Takes On Apple: Powered by HarmonyOS Next, it leads China’s high-end smartphone market.

• Saudi Aramco’s $10B Bet: Breaks ground on a petrochemical complex in Fujian with Sinopec.

• 100,000 ‘flying cars’ eVTOLs by 2030: China scales urban air traffic for logistics, tourism, and family travel.

• 11.11 Sales Surge Online: E-commerce drives 45% of PC and 47.5% of tablet sales.

Dive deeper into these stories and more by clicking the headlines below. We also list 6 of the biggest upcoming expos every week in the bottom of the newsletter. Don’t miss it!

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🚀 Headlines

Huawei’s new homegrown Chinese smartphone takes on Apple and Android (link)

Huawei has launched the Mate 70 smartphone with its new Kirin 9020 chip, priced starting at 5,499 yuan (USD 760), featuring its new HarmonyOS Next operating system, which does not support Android-based apps and is a fully homegrown platform. This move is part of Huawei's strategy to counter potential further sanctions by the US and represents a significant step in the company's software evolution. Huawei's market share for high-end smartphones (over USD 600) in China has grown from 11% in Q3 2022 to 33% in Q3 2023, while Apple's share dropped from 72% to 52% in the same period. In Q2 2024 ranked 3rd globally. Huawei has set a goal of having 100,000 apps on its Harmony OS within 6-12 months. Currently, Harmony supports over 15,000 apps. Mate 70 series could achieve over 10 million shipments in its lifetime.

China military’s supercomputer tops global rankings again (link)

China's Tianhe Exa-node Prototype supercomputer, developed by the National University of Defense Technology, has topped the Green Graph500 list for the second time since 2021, ranking first in the big data category. The supercomputer achieved a performance of 6,320 MTEPS/W (million traversed edges per second per watt), outperforming its previous record of 4,385 MTEPS/W. This metric measures a system's efficiency in internal data communication. The Green Graph500 list assesses the energy efficiency of supercomputers in processing large graphs, which is crucial for AI computing tasks such as graph analysis, a growing field focused on identifying connections within graph structures. The Tianhe Exa-node Prototype's performance indicates significant breakthroughs in complex data analysis, which is essential for advancing next-generation intelligent technologies.

Saudi Aramco and China’s Sinopec started building a USD 10 billion petrochemical complex in China's Fujian (link)

Saudi Aramco has commenced construction on a USD 10 billion integrated refining and petrochemical complex in Fujian Province, China, in collaboration with China Petroleum & Chemical Corporation (Sinopec) and Fujian Petrochemical Company Limited (FPCL). The facility will include a 16 million-tonne-per-year oil refining unit, a 1.5 million-tonne-per-year ethylene unit, and a two million-tonne paraxylene and downstream derivatives capacity, along with a 300,000-tonne crude oil terminal. FPCL will hold a 50% stake, while Aramco and Sinopec will each own 25%. The project, expected to be operational by the end of 2030, aligns with Aramco's liquids-to-chemicals strategy to meet the rising global demand for petrochemicals. This development underscores Aramco's commitment to China's energy security and its role as a reliable energy supplier.

UK’s GlaxoSmithKline (GSK) pays USD 300 million for T cell-engager from Chinese biotechnology company Chimagen (link)

GlaxoSmithKline (GSK) has bought global rights to a novel dual CD19-CD20-targeted T cell engager (TCE) from Chimagen, a Shanghai-based biotech, for lupus and other autoimmune indications. Outlicensings continue to be a good source of capital for Chinese biopharmaceutical companies. Chimagen will receive USD 300 million upfront and be eligible for another USD 550 million in milestones. The company also continues to own CMG1A46 rights for oncology indications. Chimagen is conducting Phase I trials of CMG1A46 for leukemia and lymphoma in the US and China. However, GSK will start tests of the candidate in 2025 for lupus erythematosus (SLE) and lupus nephritis (LN).

Hungary has become a top destination for Chinese investments in Europe with a 44% share (link）

Hungary has become the leading destination for Chinese investments in Europe, capturing 44% of all inflows last year. This growth is driven by Hungary’s economic neutrality and strategic partnerships, with over HUF 4 trillion (€10bn) in ongoing Chinese projects, generating tens of thousands of jobs. Key investments include CATL’s €7.4bn EV battery factory, the largest Chinese greenfield project in Europe, and new ventures by Wasion Holdings (smart electricity) and Zhejiang (automotive components). Hungary also hosts Central and Eastern Europe’s first renminbi clearing center. Tourism ties are strengthening, with Chinese visitor numbers now exceeding pre-pandemic levels.

Alibaba's new AI model outperforms OpenAI's o1 in specific benchmarks, now available for free download (link)

Alibaba has launched a new AI model, QwQ-32B-Preview, which outperforms OpenAI's o1-preview and o1-mini models on specific benchmarks such as the AIME and MATH tests, which assess logic puzzles and math problem-solving. Developed by Alibaba’s Qwen team, QwQ-32B-Preview has 32.5 billion parameters and can handle prompts up to 32,000 words. The model is available under a permissive license for download and use on the AI development platform Hugging Face. The model's responses align with Chinese regulatory standards, avoiding politically sensitive topics. This development highlights the ongoing competition in the AI sector, especially as OpenAI's valuation recently soared to USD 157 billion.

China to have 100,000 eVTOLs serving families and travelers by 2030 (link)

China is set to have 100,000 electric vertical takeoff and landing (eVTOL) vehicles serving families and travelers by 2030, according to the China Low Altitude Economic Alliance. Major urban air traffic networks and ground service facilities are expected to be operational within 2–3 years, paving the way for eVTOL commercialization. Prices for four- to five-seat models are projected to drop from RMB 10 million to RMB 2–3 million by 2030. Unmanned aerial vehicles are also anticipated to expand across logistics, agriculture, emergency rescue, and tourism. By 2030, China’s low-altitude economy is forecast to surpass RMB 3 trillion, with the drone industry alone exceeding RMB 1 trillion.

E-commerce channels outpace offline sales during China’s 11.11 shopping festival (link)

China's "11.11" shopping festival experienced accelerated growth, with e-commerce sales surpassing offline sales. The electronics consumption market was boosted by national policies, particularly China’s Action Plan for Promoting Large-scale Equipment Renewal and Consumer Goods Trade-in, which offered discounts of 15%-20% on select items. This policy, along with the popularity of the game Black Myth: Wukong and the back-to-school season, advanced the "11.11" shopping period to October 15. China's PC market shipments are projected to reach 40.3 million units in 2024, with 45% of shipments made online. Mobile phone sales grew by 3% in Q3 2024, with e-commerce driving 48.6% of shipments. Tablet market shipments through online retail channels are expected to be 47.5% in 24Q4.

🎁 Bonus Stories

World’s largest gold deposit found, worth over USD 80 billion in China (link)

The world's largest gold ore deposit has been discovered in central China’s Hunan Province. The deposit contains approximately 1,000 metric tons of high-quality gold, valued at around USD 83 billion, surpassing the South Deep mine in South Africa. The Geological Bureau of Hunan Province identified 40 gold veins within a 2-kilometer depth, holding an estimated 300 metric tons of gold, with potential for additional reserves at greater depths. Samples indicate that each metric ton of ore could contain up to 138 grams of gold, an exceptionally high grade. This discovery could further bolster China's dominance in the global gold market, where it is the world’s largest consumer and contributes about 10% of the world's output.

China’s Pop Mart’s Labubu toy character breaks records in Thailand (link)

Beijing-based Pop Mart’s Labubu toy character has achieved record-breaking popularity in Thailand, leading global TikTok mentions with over 365,000 comments. Officially named an “Amazing Thailand Experience Explorer” by the Tourism Authority of Thailand, Labubu has become a cultural phenomenon. Pop Mart’s first Labubu-themed store in Southeast Asia, at Mega Bangna, generated RMB 10 million (USD 1.4 million) on opening day. In the first half of 2024, international sales hit RMB 1.35 billion (USD 189 million), up 259.6% year-on-year, with Southeast Asia contributing over 40% (RMB 560 million/USD 78.4 million). The success is bolstered by celebrity endorsements, including Blackpink’s Lisa, and frequent restocking of Thai stores.

📆 Upcoming China Expos

• ChinaCoat 2024: Dec 3–5, Guangzhou (www.chinacoat.net)

• International Electronics Circuit Exhibition 2024: Dec 4–6, Shenzhen (www.hkpcashow.org)

• EP Shanghai 2024: Dec 5–7, Shanghai (www.epchinashow.com)

• Interclean China 2024: Dec 11–13, Shanghai (www.intercleanshow.com)

• Aquatech China 2024: Dec 11–13, Shanghai (www.aquatechtrade.com)

• HOTELEX Shenzhen 2024: Dec 12–14, Shenzhen (www.hotelex.cn)

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