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- Hilton Hits 700 Hotels in China 🏨 Lululemon & Hermès Lookalikes Surge 👜 China Leads in 89% of Tech 📊
Hilton Hits 700 Hotels in China 🏨 Lululemon & Hermès Lookalikes Surge 👜 China Leads in 89% of Tech 📊
China Insights Weekly for September 2, 2024. Unpacking China’s Economic and Technological Advances.
Welcome back to this week’s edition of the China Insights Weekly Newsletter!
Some of the key takeaways this week:
700th Hotel in China: Hilton opens its 700th hotel and plans to add 100 more each year across the country.
USD 416 Million Brewery: Carlsberg launches a USD 416 million brewery in Guangdong, producing 500,000 kiloliters of beer annually.
373,083 Cars Sold: BYD sets a new record, selling 373,083 vehicles in August, with strong growth in overseas markets.
3 Years Behind TSMC: China’s chip-making technology is now just 3 years behind industry leader TSMC.
Image: Midjourney
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🚀 Headlines
US-based Hilton is rapidly expanding in China, opening its 700th hotel and targeting 100 new hotels annually, with plans to open one every two days. The company opened 700th hotel in China on August 16th with the 275-room Conrad Chongqing. That is also the 15th Conrad-branded hotel that has opened in the country. In the first half of 2024, Hilton expanded its presence into 25 new mainland locations, including Changshu in East China’s Jiangsu province and Guilin in southwestern China’s Guangxi autonomous region. Out of the international hotel companies, Hilton trails only IHG Hotels & Resorts, which currently manages 740 hotels in China.
Near-copies of some of the world’s most popular fashion staples, from Lululemon’s yoga tights to Hermès’ handbags known in Chinese as “pingti” and Gen Z shopping parlance as “dupes,” popularity reflects a backlash against brands among formerly label-loving Chinese shoppers. But they’re not cheap counterfeits either: these local makers sell products at relatively high prices by promising the same quality as top global brands — just without the logos. Sales have skyrocketed since last year, as Chinese consumers search for better value. It is the same instinct that’s pushing consumers to seek out products sold directly by manufacturers, cutting out the brand middlemen. In the 12 months ending in July, some of the top local labels selling cheaper alternatives saw double-to-triple-digit growth on China’s dominant e-commerce platforms. At the same time, some of the foreign brands whose products they emulate saw slower growth or declines.
Danish brewer Carlsberg Group started making beer at its new RMB3 billion (USD416 million) plant in China's southern Guangdong province. It can make 500,000 kiloliters of beer a year and is a world-leading facility for green production as well as environmental, social, and governance practices. It has two bottled beer production lines turning out up to 48,000 bottles an hour; a canned beer line producing 90,000 cans per hour; and a beer barrel line churning out 90 barrels an hour. Carlsberg's first research and development center outside of Europe is also at the new brewery. The company invested an additional RMB500 million (USD70.1 million) to build the Carlsberg Group Asia Development Centre. The Foshan plant is Carlsberg's first ‘sponge brewery,’ recycling up to 3,000 cubic meters of rainwater through a collection and treatment system that will lower overall water consumption.
An analysis by Japan-based TechanaLye, a semiconductor research company, shows China's current semiconductor technology is approaching a level three years behind industry leader Taiwan Semiconductor Manufacturing Company (TSMC). Shanghai-based SMIC's 7-nm mass-produced Kirin 9010 chip supplied to Huawei in 2024 is 118.4 square millimeters, TSMC's 5-nm Kirin 9000 chip it supplied to Huawei in 2021 is 107.8 sq. mm. The two chips have similar areas and performance levels. Huawei's recently released Pura 70 Pro has 37 semiconductors that support memory, sensors, cameras, power supply, and display functions. Of these, 14 were from Huawei subsidiary HiSilicon, 18 from other Chinese manufacturers, and just five from foreign manufacturers, including South Korea's SK Hynix for DRAM and Germany's Bosch for motion sensors. Some 86% of the phone's chips were made in China.
Think Tank the Australian Strategic Policy Institute (ASPI) has released an update to its Critical Technology Tracker, revealing that China leads the way in 89% of the technologies it tracks. It determines a country’s performance based on the amount of high-impact research it generates – as measured by the number of publications its institutions produced in the top 10% of cited papers in respective fields. Launched in 2023, the project tracks 64 critical technologies across fields. Today, China leads in 57 out of 64 technologies while the United States picks up the remaining seven. In 2023 China led in 37 of 44 critical or emerging technologies. China's most recent gains occurred in quantum sensors, high-performance computing, gravitational sensors, space launch technology, and semiconductor chip fabrication.
China’s use of the renminbi in cross-border transactions has reached record highs this year. In July, 53% of China’s inbound and outbound transactions used the Chinese currency, up from about 40% for the same month in 2021. Cross-border use of China’s currency received a boost after US sanctions limited Russia’s ability to transact in dollars following its invasion of Ukraine. Growth of trade settled in renminbi has also been helped by currency swap lines that Beijing opened or renewed throughout 2023 with Saudi Arabia, Argentina, and Mongolia — all commodity producers with goods China wants. Since 2022, new clearing banks for the renminbi have also been established in Laos, Kazakhstan, Pakistan, Brazil, and Serbia. One reason China has kept its exchange rate with the US dollar stable this year despite selling pressure on the yuan is to encourage trading partners to transact more in renminbi.
BYD Sells Record 373,083 Cars in August, Buys German Distributor to Continue Europe Expansion (link, link)
BYD sold a record 373,083 cars in August, marking a 35.97% increase year-on-year and an 8.97% increase from July. This includes 148,470 battery electric vehicles (BEVs), which are fully electric cars, up 1.95% year-on-year. The company also sold 222,384 plug-in hybrid electric vehicles (PHEVs), which combine an electric motor with a traditional combustion engine, marking the sixth consecutive record high since March and a 73.12% increase year-on-year.
Plug-in hybrid models continued to see strong growth. In August, BYD sold 31,451 vehicles in overseas markets, up 25.69% year-on-year and 4.79% from July. In the January-August period, BYD’s new energy vehicle (NEV) sales, which include both BEVs and PHEVs, totaled 2,328,449 units, up 29.92% year-on-year. The company sold 264,869 units overseas, up 125.46% year-on-year.
BYD also announced plans to acquire its German distributor, Hedin Electric Mobility, as the Chinese NEV maker intensifies its expansion into the European market. The transaction includes the transfer of two flagship stores operated by Hedin Mobility’s German retail division in Stuttgart and Frankfurt.
China’s coastal region Hainan has welcomed the world’s largest single-capacity 20MW offshore wind turbine. Wind turbine manufacturer, Mingyang Smart Energy’s wind turbine has been carefully designed to thrive in medium-to-high wind speeds and built to withstand Category 17 typhoon conditions. It can withstand strong winds of 79.8 m/s. The turbine has a rotor diameter spanning from 260 to 292 meters (853 to 958 feet) that covers a maximum swept area equivalent to nine soccer fields. The turbine can generate 80 million kWh annually at an average wind speed of 8.5 m/s. Mingyang plans an even larger turbine with a planned power output of 22 MW. It is expected to have a diameter of over 1,000 feet and the prototype could be ready by 2025. These huge turbines are possible to make thanks to lightweight carbon fiber technology.
📸 China Snapshot
Captured from a high-speed train journey between Qingdao and Shanghai earlier today, this snapshot reveals a vast field of solar panels near Lianyungang in Jiangsu Province. As China continues to expand its renewable energy initiatives, sights like these are becoming increasingly common across the country.
🎁 Bonus Stories
The world's first professional, multimodal large language model (LLM) for the field of lunar science has been released in China to significantly accelerate the processing speed of massive amounts of lunar data. The new tool was debuted at the China International Big Data Industry Expo in Guiyang by the Chinese Academy of Sciences' Institute of Geochemistry and the Alibaba Cloud Intelligence Group. The Institute of Geochemistry has built a comprehensive platform with the world's most complete bank of data related to the exploration of the moon. LLM identifies lunar craters and remembers them by size, depth, and shape to provide scientists with important bases for the study of the moon's geological evolution. There are more than 1 million lunar craters with a diameter of over 1 kilometer and countless smaller ones. Researchers now only need to input an image of a lunar crater, and the LLM will determine its shape, size, and age.
The Shanghai Major is the first Counter-Strike Major in Asia and the final competition of 2024. The Perfect World Shanghai Major 2024 has three stages to the tournament. It all starts on November 30 with the Opening Stage Swiss format. The Major will have 24 teams participating. The teams will have to battle it out in the Regional Major Ranking (RMR) events before they can earn their spot in the Shanghai Major. This includes 8 teams in the elimination stage and 16 teams in the opening stage of the tournament. The eight teams in the elimination stage will all come from the European RMR event. The 16 teams in the opening stage of the tournament will come from various regions and the distribution is as follows: 7 from Americas RMR, 6 from European RMR, and 3 from Asia Pacific RMR.
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