China’s 25% stock surge 📈 1000 flying car pre-orders 🚁 LG’s $1.5B exit from LCD market 📺

2024-10-07 | subscribe | homepage

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

As the National Day Holiday wraps up today, here are some of the key takeaways from this week in China’s business and tech sectors:

• BYD’s 18% Global EV Share

• Huawei’s 100% Made-in-China Laptop

• 10,000-Drone Light Show in Shenzhen

• China Telecom’s 1 Trillion-Parameter AI

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 stock market grew 25% in 9 days, went from the worst to the best-performing stock market globally (link)

Beijing’s announcements of economic support have fueled China’s CSI 300 blue-chip index to rally over 25% in a nine-day winning streak. Last Monday, it surged over 8% to its best day in 16 years and the Shanghai Composite Index rose 8.06% before the markets closed for a week-long holiday. The previous week, the People’s Bank of China stimulated the markets as it moved to lower the amount of cash that banks must hold on hand, known as the reserve requirement ratio or RRR, by a half-percentage point. The central bank also cut the benchmark interest rate on seven-day reverse repurchase agreements by 20 basis points to 1.5%. The Ministry of Finance has yet to release major policies to support growth, despite reports of such plans.

In 2024 Chinese new energy vehicle sales account for 67% of the world’s total (link)

For the first eight months of 2024, the world’s new energy vehicle (NEV) sales were 9.39 million units, accounting for 16.1% of the total sales. Pure electric vehicles accounted for 10.4%, while plug-in hybrid vehicles accounted for 5.7%, and hybrid vehicles accounted for 5.6%. During this period, China’s NEV sales accounted for 67% of the global share, of which July to August was as high as 73%. China’s share has stabilized at 62% and 77% in the pure electric vehicle and plug-in hybrid markets. China’s NEV penetration rate reached 36.4%, Germany reached 16%, Norway reached 60.6%, the United States only 9%, and Japan only 3%.

For the first eight months of 2024, China's global pure electric vehicle market share reached 62%. In terms of Chinese automaker’s share in the world’s pure electric market, BYD’s share has reached 18.5% in the 3rd quarter. Geely’s share rose to 8.9%. China’s share of global plug-in hybrids from January to August 2024 rose to 77%. In the 3rd quarter, it reached 83%. China’s hybrid market share reached 18.2% in Q3 2024.

Huawei laptop teardown shows China’s steps toward tech self-sufficiency (link)

China’s demand that the public sector use domestic semiconductors can best be seen in Huawei’s Qingyun L540 laptop. The device features a self-designed processor and a Chinese-made operating system, stripped out foreign-made components and software as much as possible. The computer has become the signature model of China’s localization campaign known as Xinchuang, or “IT application innovation”. The laptop’s HiSilicon 9006C processor sits underneath the SK Hynix RAM chip that was made before US sanctions. Most of the important chips were designed by Chinese groups, representing about USD109 of the USD182 worth of integrated circuits in the laptop. The laptop also contains Chinese software running on the local hardware. The device runs on the Chinese-made Unity Operating System, based on Linux. Users can play music, edit photos, or create Word documents and spreadsheets, similar to a Windows machine, but all of the applications are made in China. The laptop’s Word-like application is made by the Chinese software group Kingsoft.

China’s Anta and USA’s Kyrie Irving’s basketball legend’s father team up to conquer Western markets (link)

China’s Anta sportswear giant launched the “Kai 1 Speed” basketball shoes, co-designed by Kyrie Irving’s father. On September 28, the exclusive “Twin Flame” colorway hit the shelves of more than 60 Foot Locker stores across North America and Europe, as well as DSG Footwear locations. This marks a new chapter for Anta, following the global debut of the Kai 1 series in Dallas in March, with subsequent rollouts in New York, San Francisco, Dubai, Singapore, Manila, and cities across China. The release is a cornerstone of Anta’s broader global strategy. Until now, its presence in North America was largely confined to niche sneaker boutiques. Foot Locker, DSG together with JD Sports, dominate the sports retail landscape in the West, wielding immense influence with their vast networks and market authority. For Anta, securing space in these retailers is a major milestone.

Xpeng Aeroht gets 150 more for a total of 1000 new pre-orders for its modular flying car (link)

China’s Xpeng Aeroht, the flying car subsidiary of Xpeng, said it has secured new pre-orders worth nearly RMB 300 million (USD42.8 million) for its modular flying car. The eVTOL (Electric Vertical Takeoff and Landing) maker entered into strategic partnerships with Gaozhi Aviation and Aocheng Aviation -- two companies based in Hangzhou, Zhejiang province -- and signed pre-order contracts for 150 modular flying cars. The modular flying car consists of a flying car and a parent vehicle that can recharge the flying car. Xpeng Aeroht will begin pre-sales of the modular flying car at the end of 2024, with mass production and deliveries in 2026. It will be priced at no more than RMB2 million (USD285,000). On September 4, the company said it had already received more than 1,000 pre-orders for its modular flying car.

China makes generative AI model breakthrough, the world's largest mobile carrier trains its trillion-parameter LLM on China’s domestic AI chips (link, link)

China has developed a single generative AI (GAI) model across multiple data centers — a massive feat considering the complexity of using different GPUs in a single data center, and even more so in multiple geographic locations. China is the first country to manage this achievement. Chinese researchers have been working on melding GPUs from different brands into one training cluster to combine their limited stocks of sanctioned high-end, high-performance chips, like the Nvidia A100, with less powerful but readily available GPUs, like Huawei’s Ascend 910B to overcome the high-end GPU shortage within China.

The world’s largest cell phone company, China Telecom, announced the development of two LLMs trained entirely on domestically produced chips. Its open-source TeleChat2-115B, which has over 100 billion parameters, and a second unnamed model, which reportedly has 1 trillion parameters, were trained using tens of thousands of locally manufactured chips. It did not specify who supplied the chips, however, Huawei has recently begun sending samples of its new Ascend 910C processor to Chinese server and telecom companies for testing. TikTok owner ByteDance recently put in an order for 100,000 Ascend processors.

Korean LG Display sells its Guangzhou LCD plants to China’s TCL for USD1.5 as it exits the global TV panel market (link)

TCL China Star Optoelectronics Technology (CSOT), a leading Chinese maker of liquid crystal displays, said it will buy LG Display's two LCD factories in Guangzhou for CNY10.8 billion (USD1.5 billion). TCL will acquire 80% of LG Display's 8.5-generation LCDs panel plant and its LCD module factory. The 8.5-gen LCD plant mainly makes big television panels and has a monthly output of 180,000 units. LG Display's Guangzhou factories primarily serve South Korean and Chinese TV makers, including Samsung Electronics, LG Group, and Skyworth. The plants hold around 6% of the global LCD panel market. The deal will make TCL CSOT 2nd globally in large-generation LCD production capacity. It also marks LG Display's complete exit from LCD TV panels after once being the largest supplier. The industry is controlled by powerful Chinese panel makers such as BOE, TCL CSOT, and HKC. These companies dominate 70-85% of the 65-/75-/85-inch LCD TV panel market and nearly 100% for ultra-large-sized LCD TVs.

China achieves the world’s 1st long-distance terahertz communication that can boost 6G (link)

Chinese researchers have successfully transmitted high-definition video signals over a distance of 1.2 km (0.75 miles) using terahertz wireless communication technology. It sets a new record for the longest terahertz wireless communication transmission experiment in the frequency range above 0.5THz. The research was conducted at 4000 meters on the astronomical observation base on the Qinghai-Xizang Plateau. This experiment utilized superconducting terahertz receivers, marking their first-ever application in a long-distance wireless communication system. The breakthrough has far-reaching implications, particularly for the development of 6G. Terahertz waves occupy the electromagnetic spectrum between microwaves and optical infrared frequencies, with wavelengths ranging from 3,000 to 30 micrometers. It offers a much wider bandwidth than current communication systems, allowing for significantly faster data transfer speeds.

🎁 Bonus Stories

China’s VSPO to launch Asia's first premier multi-title esports tournament (link)

VSPO, a leading Chinese esports firm backed by Tencent Holdings, will launch Asia's first premier tournament later this year, with players competing in various games across the continent. Esports Asian Champions League (ACL) will cover between 7 and 10 games in its inaugural season, which will last for about 6 months. the event will produce more than 300 million minutes of esports content. VSPO will set up a series of extended reality gaming arenas to bring the ACL to fans online while also holding an offline event for the final stage of the season in Shanghai next summer. The new ACL is also a partner of the Esports World Cup, which is funded by Saudi Arabia's Public Investment Fund and held its first tournament from July 3 to August 25.

Guinness world record-breaking drone spectacle lights up Shenzhen for China’s October 1st national day (link)

Chinese technology company Good Media has set two Guinness World Records with a spectacular drone light show in Shenzhen, celebrating China's National Day. The event featured 10,197 drones performing synchronized maneuvers, creating intricate formations and images that illuminated the night sky. This remarkable display showcased not only China's advancements in drone technology but also its potential for large-scale choreographed aerial performances. The drones, equipped with LED lights, were programmed to fly in perfect unison, breaking the previous records for the most drones airborne simultaneously from a single computer and the largest aerial image formed by drones. These records were set only weeks after another 8000 drone show in Shenzhen set previous records. Shenzhen had 600,000 multi-drone operations last year.

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