Tag: China

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China’s Consumer Price Index (CPI) climbs by 0.6% – less-than-expected

China flag and charts

On Monday 9th September 2024, China announced that its consumer price index (CPI) increased by 0.6% year-on-year in August 2024, falling short of expectations and due mainly to decreasing costs in transportation, home goods, and rents.

The consumer price index was projected to rise by 0.7% year-on-year in August 2024, based on a poll. However, the producer price index experienced a decline of 1.8% year-on-year in August, exceeding the analysts’ forecast of a 1.4% decrease.

China’s inflation rate increased by 0.6% year-on-year, which was below the 0.7% economists had anticipated according to a Reuters poll. Month-on-month, the Consumer Price Index (CPI) saw a rise of 0.4%, also falling short of the expected 0.5%.

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U.S. introduces new microchip-related export controls

U.S. chip rules

The Biden administration is reportedly implementing new export controls on essential technologies, such as quantum computing and semiconductor materials, in response to China’s progress in the global chip market

These controls encompass quantum computers and their components, sophisticated chipmaking tools, semiconductor technologies, certain metal and metal alloy components and software, and high-bandwidth chips, which are vital for AI applications.

While the U.S. intensifies its measures to curb China’s expansion, there is noticeable hesitancy within the global industry.

The U.S. Department of Commerce issued new regulations on Friday, 6th September 2024, encompassing quantum computers and their components, sophisticated chipmaking tools, certain metal and metal alloy components and software, as well as high-bandwidth chips, which are vital for AI applications.

See report details here

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Black Myth Wukong – China’s first global gaming hit sells millions in a week

Black Myth

China’s inaugural venture into high-end video gaming has smashed global records, enhancing the industry’s international aspirations despite the gaming restrictions imposed by Beijing.

Black Myth: Wukong, an action-adventure game rooted in Chinese mythology, surpassed 10 million units sold just three days following its release on 20th August 2024. A week and a half later, it continued to hold the second spot in revenue rankings in the U.S., and remained the top-selling game worldwide, according to the Steam video game platform where it sells for around $60.

Hero Games co-published the game and was an early investor in its developer Game Science.

About the game

The game Black Myth: Wukong is an action RPG rooted in Chinese mythology. The story is based on Journey to the West, one of the Four Great Classical Novels of Chinese literature. You shall set out as the Destined One to venture into the challenges and marvels ahead, to uncover the obscured truth beneath the veil of a glorious legend from the past.

Black Myth: Wukong
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U.S. and China reportedly reach agreement to cooperate on financial stability

U.S. & China flags

The U.S. and China recently signed an agreement to cooperate on financial stability. This agreement was part of a meeting of the U.S. – China Financial Working Group held in Shanghai. 

The discussions were reportedly described as professional, pragmatic, candid, and constructive.

The agreement includes measures for both countries to collaborate on capital markets, cross-border payments, and monetary policy. Representatives from various financial institutions and regulatory bodies from both nations participated in the meeting.

This cooperation aims to enhance financial stability and address potential financial risks more effectively. It’s a significant step towards fostering economic collaboration between the two largest economies in the world.

See full report here

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Over half of new cars sold in China are electric or hybrid

Electric, hydrogen, gas and petrol hybrid vehicles

China has seen new energy vehicles surpass traditional fuel-powered cars in monthly sales for the first time.

(Data as per the China Passenger Car Association’s July 2024).

New energy vehicles, comprising solely battery-operated and hybrid-powered cars, represented 51% of China’s new passenger car sales as registered in July 2024 as reported by China Passenger Car Association.

This marks an increase from a 36% market share the same time in 2023, and a rebound from just under one-third in January 2024.

Report accuracy

The accuracy of the association’s data has previously faced scrutiny. July’s report revealed that battery-only vehicles had higher sales than hybrids, achieving a 28% market share.

But sales and delivery reports from companies like BYD suggest a growing consumer preference for hybrid vehicles in China which sits in line with the China Passenger Car Association data.

As the largest global automobile market, China has experienced a slowdown in overall economic growth, leading to strong competition and a price war within the new energy vehicle sector.

Policy

For over ten years, the Chinese government has ‘supported’ the local new energy vehicle industry with subsidies and beneficial policies. The most recent trade-in initiative aimed at stimulating consumption has particularly encouraged the purchase of new energy vehicles.

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China’s rival to Elon Musk’s Starlink internet launches satellites to low Earth orbit

Internet satellites

On Tuesday 6th August 2024, China launched its inaugural batch of internet satellites, which are expected to be part of a constellation designed to compete with SpaceX’s Starlink.

The constellation, named “Thousand Sails,” comprises over 15,000 satellites in low-Earth orbit that are anticipated to provide worldwide internet coverage.

China plans to have 648 satellites in orbit by 2025 as part of the first phase of the constellation’s deployment, aiming to establish a global internet network, as reported by state media CCTV.

The satellite system will be in direct competition with Elon Musk’s Starlink.

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Apple’s iPhone crown slips again in China

Mobile

Apple has been ousted from the top five smartphone vendors in China during Q2, as local brands like Huawei continue to escalate competition

Apple is no longer among the top five smartphone vendors in China as local brands take over the market.

Apple’s market share in China has declined, falling to 14% in the second quarter from 15% in the first quarter and 16% 2023.

For the first time in history, domestic vendors have taken over all top five positions in China.

According to reports, incorporating Apple’s Intelligence systems in its products in mainland China will be crucial over the next 12 months, as Chinese brands are rapidly integrating generative AI into their designs.

This is not good news for Apple. The company is facing challenges, notably lagging behind in the AI innovation race, and compounded by a rapidly falling share of the mobile market in China.

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Which governments hold the most Bitcoin?

Bitcoin cartoon

U.S., UK and Germany hold more Bitcoin than you may think.

According to the Arkham website, the United States’ government holds some 212,847 BTC making it one of the biggest holders of Bitcoin, while the treasuries of the U.K. and Germany reportedly hold around 61,245 BTC and 49,858 BTC each. (These values alter daily).

In addition to Bitcoin, the U.S. government also holds around $200 million in other cryptocurrencies like Ether (ETH), as well as major stablecoins like USDC.

U.S. Bitcoin holding by current value according to Arkham

Data from Arkham (as of 12th July 2024)

Arkham, a crypto intelligence platform focused on deanonymizing entities on the blockchain network, has introduced a dashboard featuring the governments with the largest crypto holdings.

The U.K. government, reportedly ranked second, holds around $3.5 billion worth of Bitcoin at current valuations, according to Arkham’s data. The German government owns roughly $2.5 billion.

UK Bitcoin holding by current value according to Arkham

Data from Arkham (as of 12th July 2024)

Other world governments holding Bitcoin

China, Russia, Ukraine, El Salvador, Finland, Bhutan and many others.

In 2021, El Salvador became the first country to make Bitcoin legal tender and mandated all local businesses to accept payments in BTC. 

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China’s exports beat forecast – but imports drop

Bust container port

In June 2024, China’s imports fell by 2.3% year-on-year in U.S. dollar terms, missing the expected 2.8% growth forecast by analysts.

However, exports rose by 8.6%, surpassing the anticipated 8% growth. This resulted in a 2% increase in year-to-date imports and a 3.6% rise in exports for the first half of the year compared to the same period last year.

Additionally, China’s trade with the Association of Southeast Asian Nations (ASEAN) surged by 7.1% in the first half of the year, solidifying ASEAN as China’s largest regional trading partner, followed by the European Union.

Trade with Brazil grew rapidly in the first half of the year, with Chinese exports to the country surging by 24.4%.

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China’s inflation data missed projections – rising 0.2% in June 2024

China CPI data

China’s consumer price inflation rose by 0.2% in June 2024 from a year ago, falling short of expectations. Meanwhile, producer prices remained in line with forecasts.

Main points

Consumer Price Index (CPI)

China’s CPI was expected to rise by 0.4% year-on-year in June, according to poll conducted by Reuters. However, the actual increase was only 0.2%. Lacklustre domestic demand has contributed to keeping inflation subdued in China, unlike major economies such as the U.S., where prices have remained elevated.

Producer Price Index (PPI) 

The PPI, which measures factory-gate prices, dropped by 0.8% from a year ago, aligning with expectations. This reflects the ongoing challenges faced by manufacturers and businesses.

Core CPI

Stripping out more volatile food and energy prices, core CPI rose by 0.6% year-on-year in June. While this is slightly slower than the 0.7% increase for the first six months of the year, it indicates a relatively stable inflation trend.

Pork and beef

Notably, pork prices surged by 18.1% in June compared to a year ago, while beef prices fell by 13.4%.

In summary, China’s inflation remains subdued due to weak demand, even as other global economies experience higher price pressures. Policymakers will closely monitor these trends to ensure economic stability.

Note: this information is based on data from the National Bureau of Statistics and reflects the situation as of 10th July 2024.

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An important rare Earth metal

Tungsten rare Earth metal

Tungsten is a critically important rare earth metal, renowned for its unique and valuable properties.

Tungsten has the highest melting point among all metals, which makes it exceptionally suitable for high-temperature applications.

Key aspects of its importance

Industrial and technological applications

Tungsten is used in many industries where hardness, high density, high wear resistance, and high-temperature resistance are required. This includes mining, construction, energy generation, electronics, aerospace, and defence sectors. It is used in weapons, autos, electric car batteries, semiconductors and industrial machinery.

Fact: approximately 2Kg of tungsten goes into every electric vehicle.

Alloys

Metals are frequently alloyed with Tungsten to enhance their strength without substantially adding to their weight. This property is vital for uses like arc-welding electrodes and heating elements in high-temperature furnaces.

Significance

Tungsten is acknowledged as a critical metal because of its economic significance and the scarcity of its sources. It is reported that China produces the majority of the world’s tungsten, controlling approximately 80% of the supply of this rare earth metal.

Durability and flexibility

Tungsten’s durability, flexibility, and resistance to corrosion contribute to its popularity across various industries and applications. It ranks among the hardest and most resilient materials found in nature.

These characteristics render tungsten not just crucial but also indispensable for numerous high-tech applications. The rarity of tungsten and the intricate nature of its extraction and refinement processes enhance its value even further.

World suppliers of tungsten

According to Statista.com the global tungsten market was valued at over $5 billion USD in 2022. It’s projected to grow significantly, with estimates suggesting it could reach over $9.5 billion USD by 2030

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China manufacturing and Japan’s GDP contracts – Asia markets mixed

Economic data

Over the last weekend of June 2024, China released its official PMI figures, with the manufacturing PMI remaining at 49.5, the same as in May 2024, indicating a second consecutive month of contraction.

On Monday 1st July 2024, Japan adjusted its first-quarter GDP figures, showing a contraction of 2.9% year-on-year, a revision from the previously reported 1.8%.

Asia markets started the second half 2024 mixed as investors assessed June business activity data from China as well as Japan’s GDP revision.

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Chinese auto sales overtake U.S. for the first time

EV competition

For the first time, automotive companies in China surpassed their U.S. counterparts in car sales last year, driven by BYD and expansion in emerging markets, according to a data released Thursday 13th July 2024.

Chinese brands such as BYD now at the forefront, reportedly sold 13.4 million new vehicles last year. In comparison, American brands sold approximately 11.9 million units. Japanese brands remained at the top with 23.59 million sales.

China’s sales growth rate surpassed that of the U.S., with a 23% rise from the previous year compared to the U.S.’s 9% increase.

The consistent high pricing by legacy automakers has inadvertently steered consumers towards more affordable Chinese alternatives.

No surprise here then as manufacturers milked profits from legacy lineups!

Tariffs have now been introduced on China to curb their automakers runaway success.

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The EU imposes higher tariffs of up to 38% on Chinese EVs

EU and EV's

In a significant development that may affect the electric vehicle (EV) market, the European Union (EU) has tentatively agreed to levy tariffs on Chinese EV manufacturers.

This decision reportedly follows an inquiry into the surge of inexpensive, government-subsidized Chinese vehicles entering the EU market.

From 4th July 2024, Chinese EV producers who participated in the investigation will incur an average duty of 21%, while those who did not will face a substantial 38.1% tariff. Specific rates will be imposed on firms such as BYD, Geely, and SAIC.

Additionally, non-Chinese automobile companies manufacturing some EVs in China, including those based in the EU like BMW, will also be impacted. Tesla might receive a specially calculated duty rate upon request.

These levies are on top of the current 10% tariff on all electric cars manufactured in China. The EU’s action comes after the United States’ drastic measure last month to increase its tariff on Chinese electric cars from 25% to 100%.

Some critics view this anti-subsidy probe as protectionist, potentially harming China-EU economic relations and the worldwide automotive production and supply chain. The German Transport Minister has reportedly cautioned about the possibility of a trade conflict with Beijing.

Although the tariffs are intended to shield the EU’s own industry, they highlight the challenges of maintaining a balance between free trade and competitiveness in the swiftly changing EV sector.

Unless a qualified majority of EU nations opposes it, the tariffs will become permanent in November 2024. The European car industry stresses the need for free and fair trade but recognizes that promoting the adoption of electric cars requires a diverse strategy.

As the dispute over tariffs persists, the repercussions for the EV market are yet to be determined.

One thing is for sure, the consumer will suffer through these tariffs and also through extra road tax levies yet to be introduced, especially in the UK.

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China’s exports up by 7.6% in May – more than expected

China exports increase

China’s exports in May increased more than anticipated, whereas imports fell short of expectations, according to customs data released on Friday 7th May 2024.

Exports increased by 7.6% in May from the previous year, surpassing the analysts’ expectations of 6% growth. Imports, however, increased by 1.8% during that time, missing forecasts of an expected 4% growth.

According to analysts’ calculations based on official data, China’s imports and exports to the U.S. and EU declined during that period. However, trade with the Association of Southeast Asian Nations (ASEAN) increased, with a 4.1% year-on-year rise in China’s exports to the region from January to May.

China’s exports to Russia decreased, but its imports from Russia grew by 7.5%. Despite trade tensions with the U.S., China’s exports have remained robust, contributing to the country’s overall economic growth.

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IMF upgrades China’s growth forecast to 5%

China GDP

On Wednesday 29th May 2024, the International Monetary Fund increased its projection for China’s economic growth this year to 5% from the previous 4.6%, citing robust first-quarter figures and recent policy actions.

This revision reportedly came after the IMF’s routine evaluation visit to China. The institution now predicts that China’s economy will expand by 4.5% in 2025, an increase from the earlier estimate of 4.1%.

However, by 2029, the IMF expects China’s growth to slow to 3.3%, influenced by an aging demographic and a decline in productivity growth. This is a decrease from the previous medium-term growth forecast of 3.5%.

China’s economy experienced a stronger-than-anticipated growth of 5.3% in the Q1, bolstered by robust exports. Meanwhile, April’s data indicated that consumer spending continued to be weak, although there was a resurgence in industrial activity.

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Chinese EV makers continue their BIG push into European markets

EV

This expansion occurs as the European Union investigates subsidies provided to Chinese electric vehicle manufacturers, a situation that may lead to the imposition of tariffs.

In May 2024 Nio opened a new EV showroom in Amsterdam, while Xpeng introduced its G9 and G6 sports utility vehicles in France.

Over the years, China’s electric vehicle industry has flourished due to the government’s incentives and support, raising concerns among politicians in Europe and the U.S.

Public marketing campaigns are unfolding against the backdrop of a European Commission investigation into subsidies provided to Chinese electric vehicle manufacturers. The outcome of this inquiry may result in EU tariffs being imposed on Chinese EV imports.

The United States has preempted such measures, with the Biden administration enacting a 100% tariff on Chinese EV imports.

Meanwhile, Chinese EV producers are intensifying their international expansion efforts, aiming to compete with Elon Musk’s Tesla on a global scale and secure an early advantage over traditional car manufacturers.

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Big tech companies pledge AI safety commitments

AI Kill Switch!

Leading technology companies, such as Microsoft, Amazon, and OpenAI, have united under a significant international accord for artificial intelligence (AI) safety measures, established at the Seoul AI Safety Summit on Tuesday 21st May 2024.

Following the agreement, firms from various nations, including the UK, China, Canada, the U.S., France, South Korea, and the United Arab Emirates, have pledged to voluntarily commit to the secure development of their cutting-edge AI models.

Framework

AI model developers who have not already done so agreed to issue safety frameworks that detail how they will address the challenges posed by their advanced models, including the prevention of technology misuse by malicious entities.

These frameworks will feature ‘red lines’ that tech companies will establish to delineate the types of risks associated with advanced AI systems that are deemed ‘unacceptable.’ These risks encompass, but are not limited to, automated cyberattacks and the potential for bioweapons.

Kill switch

In the event of such dire scenarios, companies have declared their intention to introduce a ‘kill switch’ that would halt the development of their AI models should they be unable to ensure the mitigation of these risks.

“It is unprecedented for so many prominent AI firms from diverse regions of the world to concur on identical commitments regarding AI safety,” Rishi Sunak, the UK Prime Minister reportedly said on Tuesday 21st May 2024.

He further noted that these commitments would guarantee that the world’s foremost AI companies will maintain transparency and accountability concerning their safe AI development strategies.

This agreement builds upon a prior set of pledges made in November 2023 by entities engaged in the creation of generative AI software.

The involved companies have consented to seek feedback on these standards from ‘trusted actors,’ which include their respective national governments when suitable, prior to their publication in anticipation of the forthcoming AI summit – the AI Action Summit scheduled to take place in France in early 2025.

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China’s Baidu has exceeded revenue expectations, thanks to a resurgence in advertising and the expansion of its cloud services

Baidu

Baidu, one of China’s leading search engine firms, surpassed analysts’ revenue forecasts for the Q1 on Thursday 16th May 2024.

This was predominately due to a recovery in advertising revenue and a surge in demand for its AI-driven cloud products.

The company announced a revenue of 31.51 billion yuan ($4.37 billion) for the quarter ending 31st March 2024, exceeding the average analyst projection of 31.21 billion yuan, according to a latest dataset.

Shares of Baidu listed in the U.S. saw an approximate 3% increase in premarket trading.

The tech giant has been actively enhancing its sales efforts focused on AI-centric products and services.

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IMF warns U.S. and China trade divisions threaten a ‘reversal’ for global economy

U.S. & China trade tensions

Tensions between Washington and Beijing have intensified, with the U.S. ramping up trade restrictions and sanctions on China due to national security concerns.

Since Ukraine’s invasion, there has been a roughly 12% drop in trade between the blocs, and foreign direct investments have decreased by 20% compared to those within the bloc’s constituents.

If these divisions persist, the IMF forecasts that the economic impact on global GDP could be as high as 7% in the worst-case scenario.

A senior International Monetary Fund official cautioned on Tuesday, 7th May 2024, that the rift between the U.S. led Western and China-aligned economic blocs endangers global trade cooperation and economic growth.

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China’s economy expanded by 5.3% in Q1

On a quarter-by-quarter basis, China’s GDP grew 1.6% in the first quarter, compared to analysts’ expectations of around expectations of 1.4%.

Beijing’s growth target for 2024 is around 5%.

China’s growth was driven in part by external demand, as export volume grew by 14% year on year.

Industrial output for March grew 4.5% year on year, missing expectations of 6%.

Retail sales grew 3.1% year on year, lower than expectations of 4.6%.

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Why are big name EV makers worried about a… ‘Seagull’

Small generic electric car

The EV named ‘Seagull’ sub $10,000 price tag. This vehicle will likely take-off!

Global automakers are becoming increasingly concerned that Chinese competitors, such as the Warren Buffett-endorsed BYD, might saturate their EV market with cheaper EVs, potentially undermining local production and reducing vehicle prices.

Concerns have been raised that this could damage national automotive industries, and balance sheets. However, it would undoubtedly benefit consumers by providing more affordable entry-level electric vehicles.

The BYD Seagull, an all-electric hatchback manufactured in China, is priced at only 69800 yuan (under $10,000) and is said to be profitable for the rapidly growing Chinese automaker.

There’s fear among global automakers that BYD and other Chinese rivals could flood their markets, undercutting domestic production and vehicle prices.

The Chinese are coming to a town near you – it’s just business.

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New guidelines from China reportedly blocks U.S. chips in government computers

U.S. China trade microchip trade battle

China has reportedly prohibited the use of U.S. processors from both AMD and Intel in government computers and servers. The directive is designed to encourage the use of domestic alternatives.

Chinese government agencies are now required to choose ‘safe and reliable’ domestic alternatives for these chips. The sanctioned list features processors from Huawei and the state supported firm Phytium, both of which face bans in the U.S.

In addition to processors, China is now also restricting Microsoft Windows on government devices, opting instead for domestically produced operating systems.

These guidelines are part of a broader tech trade battles between China and the U.S. While the impact on Intel and AMD remains to be seen, it’s clear that China is taking aggressive steps to reduce reliance on U.S. built technology.

The global tech landscape continues to evolve, and these decisions have far-reaching implications for both countries and the industry as a whole.

U.S. and China trade tensions are unlikely to recede anytime soon.

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Intuitive Machines lands on the moon 22nd February 2024 in historic first for a U.S. company

First U.S. landing on the moon since 1972

A U.S. company has gone to the moon – and creates a little piece of history

Intuitive Machines’ Nova-C cargo lander, named ‘Odysseus’ after the mythological Greek hero, is the first U.S. spacecraft to soft land on the lunar surface since 1972.

Japan, India and China have all had recent successful moon mission ahead of the U.S.

Intuitive Machines is the first company to pull off a moon landing – government agencies have carried out all previously successful missions.

The company’s stock surged in extended trading Thursday, after falling 11% in regular trading.

Lander visual

Hunt for water

The targeted landing site was a cratered terrain next to a 5km-high mountain complex known as Malapert. It’s the southernmost point on the Moon ever visited by a spacecraft.

It’s on the shortlist of locations where Nasa is considering sending astronauts later this decade as part of its Artemis programme.

It is reported that there are some deep craters in this region that never see any sunlight – they’re permanently in shadow – and scientists believe frozen water could be inside them.

Art illustration on Intuitive Machines luna lander

Art illustration on Intuitive Machines luna lander

See other recent moon landings