Musk’s Secret Beijing Trip 🚗, Record-Breaking LNG Ships 🚢, Hainan's Luxury Boom 💎

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2024-05-05 | subscribe | homepage | read online

Welcome to this week’s edition of the China Insights Weekly newsletter. We've sifted through hundreds of sources to bring you the latest business and tech insights on China in under 5 minutes. Let’s dive right in!

Musk makes surprise visit to Beijing as Tesla passes data security rules and reaches mapping navigation deal in China (link)

Tesla CEO Elon Musk made an unannounced trip to China on Sunday seeking approval for driver-assistance software. Musk met with Premier Li Qiang, who as the Chinese Communist Party secretary for Shanghai helped the company set up what is now its top plant globally. Tesla managed to clear two of the most important hurdles: reaching a mapping and navigation deal with Chinese tech giant Baidu Inc., and meeting requirements for how it handles data security and privacy issues. Baidu — one of about only 20 qualified suppliers with the country’s top-level mapping credentials that can be applied to driver-assistance functions — will allow Tesla to tap the Chinese company’s lane-level navigation and mapping services. Tesla has been using Baidu for in-car mapping and navigation since 2020.

China Manufacturing Expands at Fastest Pace in 14 Months (link)

Activity in China’s manufacturing sector expanded at the fastest pace in 14 months in April, with new export orders growing at the quickest clip since November 2020, a Caixin private export-oriented company survey showed Tuesday. The Caixin China General Manufacturing Purchasing Managers’ Index (PMI), which gives an independent snapshot of the sector, came in at 51.4 in April, up 0.3 points from the previous month. Meanwhile, the China National Bureau of Statistics (NBS) Manufacturing PMI survey focused on large companies with state-owned presence showed a deceleration from 50.8 in March to 50.4 in April. A reading above 50 signals an expansion in activity, while a number below that indicates a contraction.

Chinese Universities Tsinghua and Beida top 2024 Asian University Rankings, 7 out of the top 10 are from Mainland China or Hong Kong (link)

Beijing’s two stand-out institutions, Tsinghua University and Peking University, retain their positions at number one and two, respectively, in the Times Higher Education top 2024 Asian University Rankings. The ever-improving strength of China’s research output and its impact on the wider region could prove to be a real tectonic shift. Small changes at the top of the table reflect wider trends. Last year, mainland China claimed four of the top 10 spots; now it has five, with Zhejiang University moving up to 9th position from 12th.

QatarEnergy signed the world's biggest shipbuilding contract in history with China's CSSC, to build 18 largest LNG vessels for USD 6 billion (link)

QatarEnergy signed an agreement with China State Shipbuilding Corporation (CSSC) for the construction of 18 ultra-modern QC-Max size LNG vessels for $6bn. The new vessels, with a capacity of 271,000 cubic meters each, will be constructed at China’s Hudong-Zhonghua Shipyard, located on the South side of Shanghai’s Changxing island. Eight of the 18 QC-Max size LNG vessels will be delivered in 2028 and 2029, while the other ten will be delivered in 2030 and 2031.

Investcorp and China Investment Corporation initiate a USD 1 billion investment platform (link)

Investcorp, a leading global alternative investment firm, and China Investment Corporation (CIC), one of the world’s largest sovereign wealth funds, have announced the launch of “Investcorp Golden Horizon” to invest in high-growth companies across Saudi Arabia, the rest of the countries of the Gulf Cooperation Council (GCC) and China. The Platform has a target size of USD 1 billion and will be anchored by reputable institutional and private investors from the GCC, as well as CIC. Target companies are expected to have high growth potential in attractive sectors, including consumer, healthcare, logistics, and business services.

Hainan cements status as a duty-free shopping mecca with tourist arrivals and revenue at record highs (link)

In the first quarter of 2024, Hainan’s service trade grew by an impressive 29.62% YoY to $2.03 billion, with service exports surging 40.22% YoY to $1.01 billion. Fueled by an influx of international visitors, particularly from South Korea, Malaysia, Russia, Mongolia, and Singapore, Hainan’s inbound travel services revenue spiked to $273 million. The island's tourism sector rebounded last year, with tourist arrivals and revenue expanding by 49.9% and 71.9%, respectively, both record highs. The robust figures underscore China’s ambitious plans to develop the island into a world-class free-trade port by 2025. Luxury spending is expected to be a key growth driver, with high-end boutiques forecast to comprise 40% of duty-free sales by 2025.

China continues to dominate the EV Battery Manufacturing industry with a 60% market share and 6 companies in the Top 10 (link)

Despite efforts from the US and EU to secure local domestic supply, all major EV battery manufacturers remain based in Asia. The Chinese company Contemporary Amperex Technology Co. Limited (CATL) now has a 34% share of the market and supplies batteries to a range of made-in-China vehicles, including the Tesla Model Y. In 2023, BYD surpassed LG Energy Solution to claim second place. This was driven by demand from its models and growth in third-party deals, including providing batteries for the made-in-Germany Tesla Model Y and Toyota bZ3. Overall, the global EV battery market size is projected to grow from $49 billion in 2022 to $98 billion by 2029.

US-based Hasbro to open Asia's first and world’s largest Peppa Pig outdoor theme park in Shanghai in 2027 (link)

The park’s development comes from Hasbro’s partnership with Chinese company Max-Matching Entertainments Co. The company invested approximately $331 million in the park and has signed as Hasbro’s strategic local partner in the venture. The Peppa Pig amusement park will cover about 48 acres on Changxing Island, China’s third-largest island, located about 50 miles from Shanghai. The single-IP theme park will feature rides, shows, and a themed hotel. It is expected to open in 2027.

🎁 Bonus Stories

China’s oral care market to triple in just 5 years to $21 billion in 2025 (link)

In China, oral care has advanced beyond the basics, fueled by Gen Z’s demand for innovative, high-tech products including breath fresheners, dental floss, mouthwashes, whitening, and rinses. In 2021, the country’s oral care market size was $8 billion (52 billion RMB). In response to the flourishing demand for more specialized products, China’s oral care market is expected to reach $21 billion (152 billion RMB) in 2025. Young women account for 70 percent of online oral care consumers. Gen Z seeks premium packaging, innovative flavors, gum protection, anti-sugar properties, germicidal effects, and even Helicobacter pylori prevention.

China’s ‘unprecedented’ space mission blasts off to the far side of the moon to collect samples and bring them back to earth (link)

China on Friday launched a Chang’e-6 lunar probe to collect samples from the far side of the moon in what would be the first in global space exploration. The 53-day mission aims to return around 5 pounds of lunar samples to Earth for analysis. If successful, scientists hope the findings could unlock fresh information about the moon’s origins. In 2020, China became the first country in 4 decades to bring back to Earth moon samples from the near side of the moon. This new mission is a complex, multistep campaign supported by 5 spacecraft.

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