Shanghai LEGOLAND set for 2025 🎢 Alibaba unveils 100+ AI models 🌐 China's wind & solar boom 🌬️

2024-09-23 | subscribe | homepage

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

Some of the key takeaways this week:

• 100+ AI models: Alibaba unveils over 100 open-source AI models, including a free Sora-like text-to-video tool.

• 334GW of solar power: China on track to install 334GW of solar capacity in 2024, 56% of global additions.

• 65nm resolution: China makes progress in chip equipment, developing a laser-based immersion lithography machine with 65nm or better resolution.

• 442GW of wind power: China leads global wind turbine installations with 442GW total capacity, growing at 19.1% annually.

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.

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🚀 Headlines

Alibaba unveiled over 100 open-source AI models, including free Sora-like text-to-video tool (link)

Alibaba Group has made more than 100 new AI models available to the global open-source community, including a free text-to-video generator to rival OpenAI's Sora. The new open-source Qwen 2.5 models cover language, audio, and vision, along with specialized code and mathematical models. The Qwen family aims for Alibaba to compete in the AI field with major players such as OpenAI, Google, and Meta.

The launch of Qwen 2.5 marks entrance into multi-modal AI, which is regarded as the next frontier, enabling more versatile and human-like interaction. Tongyi Wanxiang, the new text-to-video tool, can produce high-definition videos based on text prompts in both Chinese and English, however, currently limited to only 5 seconds. Qwen2-VL, a visual AI model upgrade that can analyze and answer questions about videos longer than 20 minutes, making it suitable for mobile devices, vehicles, and robotics applications. Since its launch in April last year, Qwen has been downloaded over 40 million times.

USA’s Mondelēz International to acquire Evirth, a China leader in fast-growing cakes and pastries (link)

USA’s giant Mondelēz International had signed an agreement to acquire a significant majority stake in Evirth, a leading manufacturer of cakes and pastries in China. The consumer category is currently estimated at USD3 billion, growing at a compound annual growth rate of 15%. Chinese consumers increasingly seek fresh, premium options with innovative and sophisticated taste profiles to meet a growing range of snacking occasions. Mondelēz already had a minority investment in Evirth to develop, manufacture, and supply some of its iconic brands, including Oreo and Philadelphia. Evirth is growing rapidly, driven by its strong distribution in club stores across China, as well as its R&D and technical expertise. The move represents an important step forward in Mondelēz’s strategy to accelerate growth in the cakes and pastries category – a core focus for the company, alongside chocolate and biscuits.

Germany’s Covestro to construct new TPU application development center in Guangzhou (link)

Covestro, a leading materials manufacturer, is set to begin construction on a new Thermoplastic Polyurethanes (TPU) Application Development (AD) Center in Guangzhou, South China. This marks the company’s second significant TPU investment in a short period, following the announcement and commencement of its largest TPU plant in Zhuhai last year. The new AD center aims to bring Covestro closer to its customers by integrating technical expertise with innovative solutions, focusing on key applications such as paint protection films (PPF), specialty cables, consumer electronics, footwear, and various extrusion and injection molding uses. Construction for the Guangzhou facility will begin in late 2024, with operations expected to start in 2025. The new center will help the company and its customers tap into the growing market in China and rest of Asia-Pacific.

BYD now holds 100% of Denza car brand, takes over remaining 10% stake from Mercedes Benz (link)

BYD has bought the remaining 10% of Denza from Mercedes Benz, after increasing its stake from 50% to 90% in 2022. Denza was founded in February 2011 as a 50-50 joint venture between BYD and Daimler, China's first Sino-foreign joint venture focused on New Energy Vehicles (NEVs). After initial slow sales, BYD relaunched the Denza brand in mid-2022 and unveiled the D9 MPV (multi-purpose vehicle) on May 16, 2022, as the first model of the updated brand. In the January-August period of this year, Denza sold 79,894 units and the D9 contributed 71,342 units, or 89%. Denza will officially launch the tri-motor Denza Z9GT on September 20, and the model will have a pre-sale price of RMB 339,800 (USD47,900).

China makes progress in development of essential chip equipment (link)

Chinese state-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Ministry of Industry and Information Technology (MIIT) said in an announcement this month. The specification marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group (SMEE) — which stood at around 90nm. Companies like SMEE are racing to develop machines that can close the gap with suppliers like ASML, which are now barred from shipping to China. Yangtze Memory Technologies (YMTC) has also made significant strides in advancing chip technology by adopting homegrown tools, which now account for a larger share of the manufacturing process. While its NAND chip performance matches industry leaders, the latest chip using YMTC's Xtacking 4.0 technology has 70 fewer layers than its predecessor due to lower production yields with Chinese tools.

Solar power continues to surge in 2024, China to install more than the rest of the world combined for 2nd year in a row (link)

In China, the country with the largest solar fleet, solar additions for January-July 2024 were 28% higher than in the same period in 2023, surpassing the country’s total solar additions in 2022. If this rate of additions is sustained, it would lead to a total installed capacity of 334 GW, making up 56% of global capacity additions for 2024. This rate of growth is only slightly below the rest of the world, meaning China’s share of global installations for 2024 is estimated to be similar to last year when it accounted for 57%, allowing the country to surpass its wind and solar capacity targets six years early. Last year marked a significant change in China’s solar power deployment. It installed more in 2023 than the entire world did in 2022. In 2022 and 2021, its share of global additions was smaller, at 42% and 34% respectively. The combined additions of China, the United States, India, Germany, and Brazil are on track to make up 75% of global solar additions in 2024.

China leads the top 15 countries by total installed wind turbine capacity, global power installations reached a new high in 2023 (link)

Global wind power installations reached a new high in 2023, increasing renewable energy’s share of total power generation to 30%. China leads the top 15 countries by total installed wind turbine capacity with 442GW and the growth rate of new capacity is running at 19.1% per year. In 2023, clean power made up 35% of China's electricity mix, with hydro the largest single source of clean power at 13%. Wind and solar hit a new record share of 16%, above the global average (13%). China generated 37% of global wind and solar electricity in 2023, enough to power Japan. China remains the global green energy champion and has already passed peak emissions, whereas due to the growing use of fossil fuels amongst the Western economies, emissions have reached an all-time high and are continuing to climb.

Significant rise in clean power generation leads to reduced pollution in China (link)

China’s air quality continues to improve. Concentrations of small airborne particulates fell 2.9% over the first half of 2024 from the same period last year, according to the Finland-based Centre for Research on Energy and Clean Air. The air quality improvements were greatest in the southwest, where rebounding hydropower reduced the need to burn coal. A significant rise in clean power generation, coupled with the downturn in heavy industries tied to the real estate sector, led to a reduction in fine particulate matter. The power sector, a major driver of China’s emissions growth, has seen a significant slowdown in emissions increases due to robust growth in solar and wind power generation. In the first seven months of 2024, solar and wind power generation increased by 37%, compared to the previous year.

🎁 Bonus Stories

Top Japanese mathematician Kenji Fukaya leaves US to join China's Tsinghua University (link)

In a significant development, acclaimed Japanese mathematician Kenji Fukaya has left his post in the United States to take up a full-time professorship at China’s Tsinghua University. Fukaya, formerly a permanent member of the Simons Centre for Geometry and Physics at Stony Brook University, gave his inaugural lecture at Tsinghua on September 11. His course on symplectic geometry drew a large crowd of students and faculty. Fukaya, now associated with both the Yau Mathematical Sciences Centre and the Beijing Institute of Mathematical Sciences and Applications, expressed hope that the return of more China-born researchers to teach in the country would promote the development of a community of highly skilled, domestically educated mathematicians. These institutions were established at Tsinghua by Chinese-American mathematician Shing-Tung Yau.

Building blocks for Shanghai LEGOLAND are in place, to open in 2025 (link)

The much-anticipated LEGOLAND Shanghai Resort is scheduled to open in Jinshan District in 2025, with testing of the rides and show set equipment expected to begin in the fourth quarter. The resort is a comprehensive tourist destination designed for families with children aged between two and 12, featuring eight LEGO-themed lands and a hotel. It will offer over 75 interactive rides, exciting shows, and attractions that let kids and adults play and grow together. UK’s Merlin Entertainment is currently constructing three Legolands in China in Shenzhen, Chengdu, and Shanghai two of which were started in 2019, with a total investment of CNY13.6 billion (USD2.1 billion).

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