CX Weekly Briefing: Chinese EV-Makers Dominate at Home

The past week’s news from China reveals key developments in business, technology, finance, and society. This summary presents main highlights and statistical details, with paragraph markers indicating their source.

[para. 2] Chinese homegrown auto brands have taken a record 68.7% share of passenger car sales for the first four months of the year, selling nearly 6 million vehicles—a rise of more than 25% year-on-year. Growth is driven especially by strong demand for new-energy vehicles (NEVs), a sector where many foreign carmakers have lagged since 2021 due to slow adaptation to the surging electric car market. China now stands as the world’s largest market for NEVs.

[para. 3] Contemporary Amperex Technology Co. Ltd. (CATL), the leading global battery manufacturer, is set to debut on the Hong Kong stock exchange on May 20. Its maximum share price is HK$263 ($33.81), potentially raising as much as HK$40.64 billion. CATL plans to use most proceeds to finance its Hungary battery factory, making this one of Hong Kong’s largest IPOs in years.

[para. 4] The U.S. Commerce Department reiterated that the use of Huawei’s Ascend AI chips worldwide breaches export restrictions, further strengthening U.S. efforts to limit China’s access to advanced chips. The department’s Bureau of Industry and Security will issue guidance warning about using U.S. AI chips in Chinese model training and inference. Meanwhile, Nvidia’s CEO, Jensen Huang, met with Beijing officials to reaffirm Nvidia’s commitment to China despite ongoing trade limits.

[para. 5] After two months of delays, Chinese developer Jinke Property Group and its subsidiary received court approval for debt restructuring, now entering enforcement. Jinke amassed over 100 billion yuan ($13.9 billion) in debts with 9,000+ creditors amid China’s real estate crisis. The restructuring incorporates debt-to-equity swaps, trust units, and some debt forgiveness. The company’s founder is expected to retain undiluted control.

[para. 6] On the economic front, China’s consumer price index (CPI) fell 0.1% year-on-year in April, its third straight month of decline, while the producer price index (PPI) dropped 2.7%. The CPI slip is attributed mainly to falling international oil prices, although some services saw rising costs. Lower prices for manufacturing inputs globally contributed downward pressure on the PPI.

[para. 7] China’s currency, the yuan, strengthened to about 7.18 per dollar—the highest since November—after progress in China-U.S. trade talks. The central bank set the yuan’s reference rate at 7.1991, marking a significant shift. Analysts suggest further appreciation is possible, contingent on ongoing trade talks and fiscal policy direction.

[para. 8] Following Beijing and Washington’s agreement to reduce tariffs, global banks have revised up GDP growth forecasts for China. Goldman Sachs predicts 4.6% GDP growth in 2024, while UBS offers a more cautious 3.7% to 4% projection. This optimism supersedes earlier estimates based on the expectation of sustained tariffs over 100% between the world’s two largest economies.

[para. 9] China’s unemployment insurance payouts jumped to 46.5 billion yuan in Q1, a 22% rise, though officials argue this likely reflects better uptake of social security programs—not a major unemployment spike. Expanded benefits aim to offset the impact of the U.S.-China trade war, targeting lower-income groups and boosting domestic consumption.

[para. 10] China continued visa-free expansion for foreign visitors, with Brazil, Argentina, Chile, Peru, and Uruguay added from June. The policy has fueled a surge in foreign arrivals, supporting China’s goal to boost domestic consumption.

[para. 11] Finally, the Ministry of Education issued AI guidelines for schools, encouraging students to experience and responsibly use AI. It forbids using AI to complete work entirely and mandates supervision for elementary students, and prohibits teachers from inputting sensitive data.

[para. 2]