So, what’s up in China? 🇨🇳
Issue 241, covering 23 Jul - 29 Jul 👇
1. Olympics + AI for China? 🇨🇳🤖🏟 Alibaba's cloud computing unit is offering an AI-infused platform to support the Olympics broadcast. This marks "the first time in the history of the Olympic Games" that a cloud platform is the main method of content distribution, taking over from satellite.

2.⁠ Billion dollar fund for AI in China. 🇨🇳🤖 Shanghai announced last week 100 billion yuan ($13.79 billion) in funds to boost its integrated circuit, biomedicine and AI industries. The fund for the AI sector will focus on fields including intelligent chips, software, autonomous driving and intelligent robots.

1. Luxury still not doing good in China? 📉 LVMH reported a 14% quarterly drop in Asia sales, excluding Japan, worsening from a 6% decline in the first quarter. Many other competitors are also experiencing slowdowns in China. This trend follows reduced spending by Chinese shoppers and gov't regulations on luxury influencers flaunting wealth.

2. Faster gains in China industrial profits. 📈 This is even as businesses were grappling with a downshift in consumers' sentiment amid a shaky economic recovery. Profits rose 3.6% YoY last month, following a 0.7% gain in May. First-half earnings were up 3.5%, accelerating from a 3.4% increase in January-May, per NBS data.

5.⁠ China’s new approach to consumer stimulus. 🛍 China is using ultra-long treasury bonds to fund a consumer goods trade-in program. About 150 billion yuan will subsidise replacements of old appliances, cars, bicycles and other goods. Though small in scale, this move addresses low consumer sentiment with demand-targeted measures.

1. China’s degree programs getting longer? 🎓 Chinese universities plan to extend postgraduate programs as students delay entering the job market. Some students welcome the extra year for better mastery and internships, while others prefer staying in school due to poor job prospects.

2. What are China’s street girlfriends? 💌 Young women were seen selling hugs and companionship from street stalls, sparking social media debate about the paid companionship economy. A viral photo shows a stall in Shenzhen with prices like 1 yuan for a hug, 10 yuan for a kiss and 15 yuan to watch a movie together.

8.⁠ Chinese actors act “primitive” to scare tourists. 🧌 A park in China's Liaoning province is attracting attention after a viral video showed actors dressed as primitive beings scaring visitors. The actors, dressed in fake animal skins and armed with wooden bows, interact with visitors by crawling, roaring and slapping themselves. While some netizens enjoy the added experience, others worry it might frighten timid visitors and young children.

_

1. https://finance.yahoo.com/news/alibaba-puts-olympics-cloud-adding-093000059.html
2. https://www.reuters.com/world/china/shanghai-launches-138-bln-funds-boost-integrated-circuit-biomedicine-ai-sectors-2024-07-26/
3. https://www.bbc.com/news/articles/c29d8wk594lo
4. https://www.thestandard.com.hk/breaking-news-print/218797/China's-industrial-profits-post-faster-gains-in-June-despite-faltering-economy
5. https://economictimes.indiatimes.com/news/international/business/fridges-not-bridges-china-veers-off-beaten-path-with-consumer-stimulus/articleshow/112035066.cms
   https://www.reuters.com/world/china/fridges-not-bridges-china-veers-off-beaten-path-with-consumer-stimulus-2024-07-26/
6. https://www.sixthtone.com/news/1015592
7. https://www.scmp.com/news/people-culture/trending-china/article/3271980/china-sees-growth-strictly-no-sex-street-girlfriends-who-sell-their-wares-stalls
8. https://www.8days.sg/entertainment/asian/chinese-actors-dress-primitive-beings-scare-visitors-833086

China’s EVs in person? 🇨🇳🚗 Walk with me through a Li Auto store in Chengdu. The cars are comfy, equipped with fridges and massage seats, and have a large screen for passengers, just to name a few cool features. 👇 More below.

Beyond Li Auto, I’ve been to BYD, Nio, XPeng, and here are a few popular features:

🚗 Flat back seats which are ideal for passengers to sleep comfortably on long journeys. Yes, Chinese families travel domestically increasingly by car.

🚗 Big screens (and navigation bars) in both the front and back, fully connected to your entertainment apps.

🚗 Designs are modern and stylish (the roof is at times a bit too low for my taste) and set at an affordable price. Li Auto’s models went for 150,000 to 250,000 yuan (US$ 20,000 to 35,000), offering great value for money. Xiaomi cars are hard to get, but even more affordable.

✔️ The stores have salespeople work in shifts where they go live to showcase different cars in the store, answer questions, and chat with customers, like community leaders.

✔️ They often stream in 2-hour shifts, bringing the showroom experience to any potential customers’ home.

✅ Between 2009 and 2017, the Chinese government invested over $60 billion to boost EV production.

✅ In 2011, only about 1,000 battery-powered and hybrid cars were sold. By 2023, this number skyrocketed to 9.5 million.

✅ By 2035, EVs are expected to account for 50% of all new car sales. China is already ahead, aiming for a 20% nationwide penetration rate by 2025 and hoping that by 2030, three in five new cars will be electric.

What’s your take on these innovations and future projections?

____
Insights via CBBC, China Daily

(Continued)

🐼 At the same time, there’re many areas built for ‘grand utilisation’, that are still quite deserted. Check out this Chengdu Tianfu International Airport.

🐼 The airport is located in Tianfu New Area, a target development zone in Chengdu, 50 km southeast of city’s downtown. The airport opened in June 2021. It’s huge, neat, nice, efficient, and still at times, quite empty.

🐼 Checked their stats earlier though — and it seems that in 2023, Tianfu Airport ranked 39th busiest airport in the world and 5th busiest in China, when ranked by passenger traffic. It served 44.8 million passengers in 2023 alone.

🐼 Spoke with a friend living in Tianfu New Area, too, and according to the locals, the grand infrastructure, like large parks, the art centre, residential and commercial facilities are still rather empty. All good things take time, of course.

This being said, for now we shall focus more on bringing back consumers and tenants, rather than building more infrastructure. People on the ground get it. Local administrators are catching on, too.

So, what’s up in China? 🇨🇳
Issue 240, covering 16 Jul - 22 Jul 👇
1. China’s e-commerce seeing robust growth? 🛍️📈 Online retail sales during 2024H1 is up 9.8% YoY to 7.1 trillion yuan ($996 billion), according to the Ministry of Commerce. While retail sales of goods reached about 6 trillion yuan, marking an increase of 8.8%, officials say. Being on the ground here, few feel the increase.

2.⁠ China cuts interest rates to support its economy. 🇨🇳 China cut major short and long-term interest rates today. The country faces deflation, a property crisis, rising debt and weak sentiment. The People's Bank of China reduced the seven-day reverse repo rate to 1.7% from 1.8% “and would also improve the mechanism of open market operations.”

3.⁠ Alibaba reports big drop in carbon emissions. 🌿 The e-commerce giant cut carbon dioxide emissions by 2.32 million tonnes, a 63.5% improvement over the previous year. Over half of the power consumption in its cloud data centres came from clean electricity, as the company aims for carbon neutrality by 2030.

1. Shanghai unveils new Star index. 🚀 The Shanghai Stock Exchange will launch the Star 200 Index next month to track its Sci-Tech innovation board. Debuting on August 20, it includes 200 small-cap stocks with good liquidity. The index excludes stocks already in the Star 50 and Star 100.

2. President Xi vows to rewire China's finances to aid debt. 💸 The country will shift more revenue from the central to local governments, including a larger share of consumption tax. Chinese policymakers face pressure to resolve local governments' 66 trillion yuan ($9.1 trillion) debt and rebalance the economy.

3. China's youth trust science amid job market anxiety. 🧪 A Zhaopin survey found engineering majors dominate 41 of the top 50 best-paid slots for those with 3 years of work experience. The rest are in science and management, with no arts degrees. 🥹 Graduates in fields like electrical engineering and computer science have better chances at state-owned enterprises, the report says.

7.⁠ Chinese celebrity pastries under fire? 🔥🍪 Actor Bai Jingting opened his first cafe last month in Shanghai. Guests wait nearly 2 hours, paying up to 48 yuan for coffee and 18 yuan for pastries, more expensive than Luckin Coffee. Some social media users criticised the price and taste of the pastries, comparing them to hamster treats.

———

1. https://www.chinadaily.com.cn/a/202407/19/WS669a31f5a31095c51c50efdb.html
2. https://www.reuters.com/markets/asia/china-central-bank-cuts-short-term-policy-rate-2024-07-22/
3. https://www.scmp.com/tech/tech-trends/article/3271301/alibaba-reports-big-drop-carbon-emissions-more-clean-electricity-usage-data-centres?module=top_story&pgtype=section
4. https://www.thestandard.com.hk/section-news/section/50023920/264605/Shanghai-unveils-new-Star-index
5. https://www.business-standard.com/amp/world-news/xi-jinping-vows-to-rewire-china-s-finances-help-indebted-regions-124072100738_1.html
6. https://finance.yahoo.com/news/chinas-youth-anxious-over-job-093000282.html
7. https://radii.co/article/actor-bai-jingtings-mini-cookies-spark-online-outrage

China’s retail market in 2024? 🛍🇨🇳 Technavio expects the Chinese retail industry to grow US$1.19b from 2024 to 2028 at 8.09%. As for now, Chinese retailers and shopping centres are continually developing new consumption scenarios, categories and business models to promote new growth areas. 👇 Let’s take a look at 3 of these areas.

So, what’s up in China? 🇨🇳
Issue 239, covering 9 Jul - 15 Jul 👇
1. China’s GDP numbers are out. 🤔📈🇨🇳 China's GDP grew by 5% YoY in the first half of 2024 to 61.68 trillion yuan ($8.49 trillion), per the National Bureau of Statistics data. In the second quarter, the economy rose by 4.7% YoY after a 5.3% growth in the first quarter.

2.⁠ China expands visa-free transit policy. 🇨🇳✈️ China's National Immigration Administration announced that the 144-hour visa-free transit policy has been expanded to three more entry ports, bringing the total to 37.

3.⁠ Chinese tech firms face higher EU compliance costs? 🇨🇳🤖 The EU's first comprehensive AI rules, effective August 1, are projected to raise assessment and compliance costs for Chinese tech firms. China's regulation focuses on GenAI and is government-led, while the EU's AI Act focuses on user rights.

1. Surgeon operates on patient 5,000 km away? 🩺 Chinese medical experts performed the first remote lung cancer operation using a domestically-made 5G surgical robot. Doctors in Shanghai operated the system, while the robot completed the surgery on a patient 5,000 kilometres away in Xinjiang.

2. China's home prices see narrowed drops. 📉 Major Chinese cities reported falling home prices in June. More cities reversed the declining trend in home prices on a monthly basis. For new homes, 64 out of 70 major cities saw price declines, and for resold homes, 66 out of 70 saw price falls.

3. Nursing homes for GenZ and millennials? 🏠 Across China, hostels, coffee shops, and rural resorts are branding themselves as “junior nursing homes” reserved exclusively for GenZs and millennials. The phrase “junior nursing home” has reached over 4.2 million searches on RED. Many of these junior nursing homes market themselves as a chance for young people to “lay flat.”

7.⁠ Chinese people are buying up subway ad space. 🚇 A subway train company in China launched in-system personalised billboards to boost its finances and entertain commuters. Prices range from 380 yuan (US$50) to 999 yuan, depending on duration and location. People are putting up their resumes, marriage and birthday announcements, etc.

1. Chinese university launches ‘Panda Studies’ program? 🐼 In a nationwide first, a Chinese university launched a “school of giant panda studies” to train experts in protecting the animal. The program aims to foster conservation experts for habitat restoration, panda breeding and releasing animals into the wild.

__

1. https://www.ecns.cn/news/economy/2024-07-15/detail-iheeixnu9400528.shtml
2. https://news.cgtn.com/news/2024-07-15/China-expands-visa-free-transit-policy-to-more-ports-1vfvF59S9Ve/p.html
3. https://finance.yahoo.com/news/chinese-tech-companies-face-increased-093000150.html
4. https://www.shine.cn/news/metro/2407142729/
5. https://shorturl.at/EBgrq
6. https://radii.co/article/chinese-gen-zs-and-millennials-relax-at-junior-nursing-homes
7. https://www.scmp.com/news/people-culture/trending-china/article/3270461/china-subway-offers-affordable-billboard-space-generating-more-profits
8. https://www.sixthtone.com/news/1015498

(Continued)

❗️ It doesn't help that China is one of the most expensive countries in the world to raise a child.

✅ A recent study by China's YuWa Population Research Institute found that the average cost to raise a child to age 17 in China is about $74,800. This increases to over $94,500 if supporting the child through a bachelor’s degree.

✅ The report states that in China, raising a child to age 18 costs 6.3 times the GDP per capita, the second highest ratio after South Korea. South Korea, with the world's lowest fertility rate, has child-rearing costs at about 7.8 times its GDP per capita.

✅ The report notes that the cost of raising a child relative to GDP per capita is lower in other countries: 2.08 times in Australia, 2.24 in France, 4.11 in the US, and 4.26 in Japan. Japan, like China, faces challenges with an ageing population and declining birth rate.

What’s your take? 🤓👇 Shall this unique curriculum be available nationwide?

_
Insights via PeopleCN, The Guardian, CNN, video via Chinavideoroom on TG

Chinese children are learning real life skills! 🇨🇳👶 Watch this recent viral video of a Chinese kindergarten class sewing and ironing on their own. Similar videos have gone viral on X and TikTok, with foreigners praising China’s curriculum. Let’s take a look!

👶 In fact, these videos come a kindergarten in Xuzhou where sewing and cooking are part of the curriculum.

👶 Beyond culinary arts and hemming, these children engage in traditional crafts like calligraphy and paper-cutting, integrating rich cultural heritage into their learning.

👶 Over 570 schools in Xuzhou have special “labour zones” for agricultural activities, promoting hands-on learning experiences.

✔️ China's population declined for the second executive year in 2023. Births last year dropped to just over 9 million, half the number from 2016.

✔️ Several local governments in China have introduced measures to boost the birthrate, including cash subsidies for additional children and discounts on IVF. These incentives have so far made little impact on the falling birthrate.

(Continued)

✔️ China's smartphone sales hit 63.3 million devices in 2024 Q1, up 1% from last year. This marked the end of an 11-quarter slump.

✔️ The Gen AI-capable smartphone offers Chinese vendors a chance to stand out in the high-end market and challenge Apple in 2024.

✔️ Canalys predicts that Gen AI-capable smartphones will make up 12% of 2024 shipments in mainland China, surpassing the global average of 9%. Xiaomi, OPPO and HONOR are already leading this trend.

✅ Revenue in China's smartphone market in 2024 is projected to reach a staggering US$105.5 billion.

✅ This market is expected to grow at a compound annual growth rate of 5.58% from 2024 to 2028.

✅ By 2028, the volume of China's smartphone market is expected to reach 400 million units. However, a slight decline in growth is anticipated for 2025, with a rate of -1.4%.

What’s your take? 🤓👇 Have you gotten your hands on a Gen AI-capable smartphone yet?

___
Insights via Shanghai Daily, Canalys, Statista

(Continued)

The great outdoor boom continues.

✔️ A recent survey on ways to enjoy spring by China Youth Daily found that 85% of 1,333 respondents prefer outdoor spring activities with flower viewing followed by camping and flying kites.

✔️ During the Qingming Festival last month, bookings for flower-rich scenic spots increased nearly 4 times over the previous year, Ctrip reports.

✔️ 62% of respondents viewed spring outings as a chance to slow down, while 52% hoped to make new friends through these activities.

Many of the recent youth focused trends seem to be about going outdoors or niche sports. 🤓 What’s your take?

__
Insights via NewsCN, Radii, CGTN