Taiwan elections can weaken an unstable status quo 4 Jan 2024 The Democratic Progressives are vying for a third term but another re-election of the independence leaning party will frustrate China. While market indicators are buoyant, more of the same in the island's local politics can make Sino-US ties worse.
Tesla-BYD rivalry is mostly manufactured, for now 3 Jan 2024 Elon Musk’s outfit ceded its title of world’s biggest EV maker to the Chinese company. In a growing industry, that’s irrelevant, plus BYD has a home advantage. The longer-term danger to Tesla, assuming geopolitics doesn't upend its supply chain, is if its peer advances in tech.
China policy risk returns as stock market grinch 22 Dec 2023 Shares in Tencent and NetEase plunged after surprise new curbs from Beijing on video-game spending and rewards. It smacks of President Xi Jinping’s crackdowns on private tutoring, tech and other sectors – and gives overseas investors another reason to be wary jumping back in.
China’s automakers will defy the great uncoupling 22 Dec 2023 There are industries, like microchips, where American trade warriors can cleave friendly supply chains from China. Cars aren’t one of them. Despite $80 bln of announced investments, lagging tech holds US champions back. In 2024, that will prove the limits of protectionism.
China’s Huawei could be the surprise IPO of 2024 21 Dec 2023 Ren Zhengfei has long insisted the telecoms giant and chip designer he founded will never go public, but the company is now central to Beijing’s technology ambitions, which require heavy funding. A Huawei listing would also breathe life into China’s ailing stock market.
The Li clan will deal their way out of value trap 20 Dec 2023 The Hong Kong-based empire founded by Li Ka-shing is unloved by investors. Despite his son Victor’s efforts to boost value, the $20 bln CK Hutchison trades at a big discount to its net assets. With 80% of revenue outside Greater China, it makes sense to explore a sale or breakup.
Nio’s $2 bln Christmas gift requires some strings 19 Dec 2023 Shareholders welcomed the money-losing electric-car maker’s latest infusion from CYVN. But cash alone won’t put Nio on track unless it focuses and cuts costs. With a 20% stake and two board seats, the Abu Dhabi investor could push for some New Year’s Resolutions to boost returns.
Beijing will build safety net around housing hole 18 Dec 2023 China’s debt-stricken developers have left 20 mln homes unfinished. Local governments can turn the crisis into an opportunity by taking on stalled projects and converting them into public housing. State firms will increase their presence in the property market in the process.
China’s lead in Southeast Asia appears fragile 14 Dec 2023 Xi Jinping’s visit to Vietnam this week shows he is reinforcing alliances in the region as fast as he’s letting others slide. Yet while China's $722 bln trade relationship with the bloc dominates, distrust of the country is rising too. That’s a bad signal for future business.
Chinese equities are ready for long march upwards 14 Dec 2023 Share prices and valuations in the world’s second-largest economy are near 2016 lows. Foreigners have retreated but any recovery will depend on Beijing and domestic buyers. Patient investors willing to stomach geopolitical tensions and other risks could earn big rewards.
Hong Kong’s property pain may soon get real 13 Dec 2023 The city’s leader John Lee is talking tough on illegal structures, a hot topic in the world’s most unaffordable housing market. Tackling the issue will frustrate the rich and may hit government revenues but it would please Beijing and the public. The necessity to act is growing.
Wanda tycoon pays price for overexpansion 13 Dec 2023 Once Asia’s richest man, Wang Jianlin has been forced to give up control of his mall operator to avert a $4.1 bln funding crunch. To avoid further problems at China’s biggest landlord, Dalian Wanda now needs to prove its assets are attractive to both shoppers and investors.
TikTok works hard to keep Indonesia party going 11 Dec 2023 The ByteDance-owned short-form video app is merging its online shopping business in the archipelago with local rival GoTo’s Tokopedia unit. Its $1.5 bln funding and 75% stake in the new entity will allow TikTok to bypass a recent ban on e-commerce sales in the fast-growing market.
China’s state pension fund joins the national team 7 Dec 2023 The $400 bln National Social Security Fund will be allowed more flexibility on equity investments, per new draft rules. It’s the first big asset allocation overhaul in over 20 years, so change was due. It also signals Beijing is sparing no effort to shore up the capital market.
Midea will test China Inc’s welcome overseas 7 Dec 2023 The world’s largest home appliance company plans to use proceeds from a Hong Kong listing to buy global brands. It follows the $48 bln firm’s 2017 purchase of Germany’s Kuka. Outbound M&A has shrunk but a weak Chinese economy provides a growing incentive to pursue deals abroad.
China credit warning is well-timed plea for action 6 Dec 2023 Moody’s has put the country’s ratings on downgrade watch. It may seem tardy, given how long property woes and local government debt have vexed investors. But with Beijing heading into a busy planning season, reminders of the need for responsible economic policy are welcome.
CATL prepares to power up wildest electric dreams 5 Dec 2023 The world’s largest battery maker boasts $14 bln in net cash, making a possible Hong Kong listing seem unnecessary. But the extra funds would help CATL grow in Europe and could potentially fuel explosive expansion in Southeast Asia and the US too.
Temu takes edge, and shine, off Shein 29 Nov 2023 The shopping app’s huge success helped parent PDD double quarterly revenue, sending its New York stock up 18%. It puts the planned US debut of its rival, valued at $60 bln, in perspective. Shein will test appetite for hot China-linked deals but it’s not a singular phenomenon.
Slowing China still leads the race for commodities 28 Nov 2023 The world’s second-largest economy may expand by a sub-par 4% next year. But that would be 27% of global growth. And Beijing’s shift from property to greener sectors will support its appetite for copper, steel and such. Investors looking just at the big picture risk missing out.
Foxconn is still running with difficult status quo 27 Nov 2023 Terry Gou’s exit from Taiwan’s presidential election race may shield the $45 bln firm he founded from immediate political crossfire from Beijing. However, the Apple supplier’s push to move production outside of China leaves it firmly on frontlines of rising cross-strait tensions.