David Fuller and Eoin Treacy's Comment of the Day
Category - China

    CATL Unveils EV Battery With One-Charge Range of 1,000 Kms

    This article may be of interest to subscribers. Here it is in full:

    Contemporary Amperex Technology Co. Ltd. unveiled an electric-car battery it said has a range of over 1,000 kilometers (620 miles) on a single charge and is 13% more powerful than one planned by Tesla Inc., a major customer. 

    CATL, as the world’s biggest maker of electric-car batteries is known, will start manufacturing the next-generation “Qilin” next year, according to a video the Chinese company streamed online Thursday. The battery charges faster than existing cells, and is safer and more durable, CATL said. 

    The Qilin battery, named after a mythical Chinese creature, has an energy density of up to 255 watt-hour per kilogram, Ningde, Fujian-based CATL said. 

    “It’s an important advancement for CATL as it keeps them at the forefront on the innovation side,” said Tu Le, managing director of Beijing-based consultancy Sino Auto Insights. “Being the lowest cost provider isn’t enough to command loyalty, there needs to be more to it -- and that seems to be the Qilin battery for CATL.”

    CATL’s shares climbed 5.9% in Shenzhen, closing at the highest since Feb. 9. 

    The company said Wednesday it raised 45 billion yuan ($6.7 billion) in a private placement of shares, with the proceeds intended for production and upgrade of lithium-ion battery manufacturing in four Chinese cities, as well as research and development.

    CATL has experienced a wave of volatility this year, grappling soaring prices of raw materials as well as rumors of trading losses. Its first-quarter net income slid 24% from a year earlier to 1.49 billion yuan. The company hasn’t explained a 1.79 billion yuan derivatives liability, the first such charge since it listed.

    Read entire article

    Chinese Developer Accepts Wheat, Garlic as Payment to Woo Buyers

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    As China’s property slump persists, one developer is trying to entice farmers to buy homes by accepting their crops as payment. 

    Central China Real Estate Ltd. is offering to pay farmers as much as 160,000 yuan ($24,000) for their wheat to offset down payments for homes in its River Mansion residential project in Shangqiu, a city in Henan province, according to a Monday marketing post. Weeks ago, it offered to accept garlic from growers looking to buy homes in another project in Kaifeng city.

    The move reflects how far some developers are willing to go to attract wary homebuyers as the economy slows and the industry endures a crippling cash crunch. Central China, the country’s 37th-largest builder, recently sought state support when its parent company agreed to sell a stake to the provincial government. 

    Its perk to farmers appears aggressive. Central China was offering to buy wheat at 4 yuan a kilogram, higher than the record 3-3.1 yuan that China’s state stockpiling company was purchasing the grain for earlier this month. 

    Landlocked Henan is China’s largest wheat-producing area. The country just had another bumper harvest of winter-sown wheat. 

    Similarly for garlic, Central China offered to pay 10 yuan a kilogram last month. That’s higher than the 6.92 yuan wholesale price as of June 10, according to weekly data released by the commerce ministry. 

    Read entire article

    China Economy Czar Vows Support for Tech Firms After Crackdown

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    China’s top economic official gave an unusual public show of support for digital platform companies Tuesday, suggesting Beijing may be ready to let up on a year-long clampdown on technology giants as it battles a slowing economy.

    The government will support the development of digital economy companies and their public listings, Vice Premier Liu He, who is President Xi Jinping’s most senior economic aide, said after a symposium with the heads of some of the nation’s largest private firms. Baidu Inc. founder Robin Li, Qihoo 360 Technology Co.’s Zhou Hongyu and NetEase Inc. chief William Ding were among the tech luminaries spotted at the forum, according to a video posted online.

    Liu’s remarks reported by state media were short on detail but signal further easing of the regulatory risk for China’s technology behemoths including Baiduand Tencent Holdings Ltd., as investors await clues on whether a rout in their shares is near an end. The Hang Seng Tech Index rallied as much as 6% Tuesday on optimism the meeting would affirm Beijing’s intention to dial back some of its restrictions.

    Read entire article

    Patience through Bumpy Final Leg of Bear Market

    Thanks to a subscriber for this report from Morgan Stanley which may be of interest. Here is a section.

    Politburo Brightens Mood for China Stocks After Gloomy Month

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    “The meeting addressed most of the pressing issues in the economy and is intended to boost confidence and turn around negative sentiment,” said Xiong Yuan, chief economist at Guosheng Securities. “It’s a rare exception that the Politburo publishes the statement during the trading day. Clearly it’s meant to incentivize investors to hold on to positions ahead of the holiday.

    China’s top leaders responded to calls from investors and analysts alike to revive an economy hurt by Covid lockdowns that this week spread to Beijing and Yiwu, disrupting business operations and roiling global supply chains. The Politburo’s readout -- which was released at the earliest time of day of any since at least January 2017 -- came ahead of a five-day break for onshore markets.

    While headwinds for China’s economy and markets still remain, in particular the government’s adherence to Covid Zero, traders are now asking whether this can be the long-awaited market bottom. 

    The CSI 300 Index jumped 2.4% Friday, trimming this year’s loss to 19%. That still makes it one of the world’s worst performing national benchmarks, far outpacing the 13% decline in MSCI Inc.’s Asia Pacific gauge.

    Read entire article

    Will China lead the world into another 2008 crisis or will they spend their way out of trouble?

    Thanks to a subscriber for this article from the Financial Times which may be of interest. Here is a section:

    Weijian Shan, whose group PAG manages more than $50bn, said his fund had diversified away from China and was being “extremely careful” about its portfolio in the country.

    “We think the Chinese economy at this moment is in the worst shape in the past 30 years,” he said in a video of a meeting viewed by the Financial Times.

    “The market sentiment towards Chinese stocks is also at the lowest point in the past 30 years. I also think popular discontent in China is at the highest point in the past 30 years.”

    In the video, Shan said that large parts of the Chinese economy, including its financial centre Shanghai, had been “semi-paralysed” by “draconian” zero-Covid policies and that the impact on the economy would be “profound”.

    “China feels to us like the US and Europe in 2008,” Shan added. “While we remain long-term confident in China’s growth and market potentials, we are very cautious towards China markets.”

    Read entire article

    I helped build ByteDance's vast censorship machine

    This article from Protocol may be of interest to subscribers. Here is a section: 

    Our role was to make sure that low-level content moderators could find "harmful and dangerous content" as soon as possible, just like fishing out needles from an ocean. And we were tasked with improving censorship efficiency. That is, use as few people as possible to detect as much content as possible that violated ByteDance's community guidelines. I do not recall any major political blowback from the Chinese government during my time at ByteDance, meaning we did our jobs.

    It was certainly not a job I'd tell my friends and family about with pride. When they asked what I did at ByteDance, I usually told them I deleted posts (删帖). Some of my friends would say, "Now I know who gutted my account." The tools I helped create can also help fight dangers like fake news. But in China, one primary function of these technologies is to censor speech and erase collective memories of major events, however infrequently this function gets used.

    Dr. Li warned his colleagues and friends about an unknown virus that was encroaching on hospitals in Wuhan. He was punished for that. And for weeks, we had no idea what was really happening because of authorities' cover-up of the severity of the crisis. Around this time last year, many Chinese tech companies were actively deleting posts, videos, diaries and pictures that were not part of the "correct collective memory" that China's governments would later approve. Just imagine: Had any social media platform been able to reject the government's censorship directives and retain Dr. Li and other whistleblowers' warnings, perhaps millions of lives would have been saved today.

    Read entire article

    Xi Puts Ideology Before Economy With Market-Busting Lockdowns

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    China’s worst equity selloff since early 2020 reflects a growing concern about President Xi Jinping: He
    can’t afford the political costs of shifting from a Covid Zero strategy that is pummeling the economy. 
    In Shanghai, a weekslong Covid-19 lockdown got even worse, with workers in hazmat suits fanning out over the weekend to install steel fences around buildings with positive cases. In Beijing, the process is just getting started, as authorities on Monday began shutting down a bustling district in the capital to
    quash fresh outbreaks. 

    The threat of paralyzing China’s two largest and wealthiest cities with a strategy abandoned by most countries helped push the CSI 300 down 4.9%, the gauge’s steepest one-day drop since the first such lockdown in Wuhan two years ago. The spreading lockdowns have investors worried that Xi is sacrificing the Communist Party’s reputation for pragmatic economic management to defend a political narrative that portrays him as the world’s most successful virus-fighter.

    “This Covid situation is really putting China into a very dark moment, perhaps the darkest moment in economic terms for the last couple of decades,” Junheng Li, JL Warren Capital founder and chief executive officer, said of the Shanghai lockdown during an interview on Bloomberg TV. “It’s a confidence
    crisis in a sense that you’ve got the most affluent city in China with this consensus disappointment and resentfulness towards a very non-sensible policy.”

    “People really don’t know, what’s a clear path to get China out of this Covid situation,” Li said.

    Read entire article

    China Stocks Plunge as Xi Offers No Respite From Covid Lockdowns

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    In a sign that authorities are keen for the slide to end, the China Securities Regulatory Commission said that on Thursday it met with institutional investors such as the National Social Security Fund, banks and insurers to ask them to boost their equity investments.

    Lockdowns in major cities across the country, coupled with capital outflow risks as the Federal Reserve hikes rates, have dampened sentiment toward local Chinese shares. Investors who had expected authorities to ramp up stimulus have since been underwhelmed, with Wednesday’s decision by banks to keep lending rates unchanged serving as another setback.

    “The market is flooded with pessimism,” said Wu Wei, fund manager at Beijing Win Integrity Investment Management Co. “While there have been some policies since Liu He, the greater weight on people’s minds now is the virus. No one can accurately guess the bottom. Judging from the virus situation, we could still see a further slide.”

     

    Read entire article