February 2023

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Staying informed on China is a full-time job. As international keynote speaker and YouTube influencer on China, I read on average 4 hours per day China news and articles. With this newsletter, I compile my top-of-mind links and stories coming from China that should not take you more than ten minutes every month to keep China’s innovation on your radar.

'This Month In China’ monthly newsletter brings you the latest news, developments, cases, and insights in business, technology, innovation and new trends coming from China.

This newsletter does not focus on geopolitical, economical, or new policies from China, but rather on innovation advancements coming from China that is seldom covered in Western media.

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HOW CHINA MADE A DIFFERENCE THIS MONTH

Last month, there was a lot of ‘hot air’ news that Western media released about China. We probably all read about James-Bond style spy balloons, Beijing’s inappropriate victory claim over covid, China’s overconfident 2023 GDP growth predictions, Beijing’s empty peace proposals to end the war in Ukraine, and rumors on how China is considering to deliver weapons to Moscow. It was one of those months, where all foreign news about China felt like either really bad or totally made-up. I leave you to be the judge of that. Instead, let me share some more positive China news of February 2023 that did not ‘air’ much, but caught my eye.

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1. China’s renewable energy capacity surpassed coal for first time

2. China’s hyperloop completes first test run

3. Temu, the ‘unknown’ app that could afford a Super Bowl ad

4. Chinese Apps remove ChatGPT as global AI race is heating up

5. China added 74 new unicorns in 2022

6. Beijing publishes rules to revive offshore listings

7. The first ‘made-in-China’ C919 commercial airplane is getting ready to take on Airbus and Boeing

(Click the links in titles below to read a larger news article on each topic)

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1. China’s renewable energy capacity surpassed coal for first time

China reached a milestone to be less dependent on its capacity of coal-fired power than on renewable energy.

In 2022, China’s renewable energy installed capacity increased significantly (80% wind and solar) resulting in a year-on-year increase of 22% or 125 million kilowatts (the total wind and solar capacity of Belgium in 2022). ?

China is still mostly dependent on fossil-fuels as well as adding new coal-plants replacing the older polluting ones, but at the same time reduces its carbon emissions domestically at impressive speed. The world cannot decouple from China’s factory of renewables any day soon if we want to reach our own carbon neutrality goals.

Also check out my latest blog: How India and China will save the planet

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2. China’s hyperloop completes first test run

China completed a first test of a pod that traveled at 50km/h through a vacuum tube of 2km length. It will be extended to 60km length over the next few years to achieve a top speed of 1,000km/h.?

Elon Musk proposed the idea of a ‘hyperloop’ back in 2012 and established ‘The Boring company’ later on. Richard Branson did the same reaching a speed of 172km/h in 2022. So, what is the big deal with China? Musk and Brandon have pretty much abandoned the idea of transporting humans with a hyperloop.

?The Chinese government on the other hand is now in full support of making a hyperloop a reality. If we remember high-speed and maglev trains, the same happened: the West or Japan comes up with the idea but can’t find enough clients beyond China. China used to buy (or copy) the technology in the past, now they are capable to develop and keep innovating independently.

Can’t wait to one day travel from Shanghai to Beijing in 90 minutes!

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3. Temu, the ‘unknown’ app that could afford a Super Bowl ad

It costs 6 million USD to air a 30-second spot at the Super Bowl. Chinese ecommerce App Temu aired its Superbowl commercial twice with the title “Shop Like A Billionaire”. Most American viewers had never heard of Temu before, and surely not of the Chinese parent company Pinduoduo (PDD).

Temu is a bargain-hunter App that ships super cheap products directly from the Chinese factory floor to your front door. PDD is Alibaba’s biggest competitor in China. They have a market cap valuation of 118 billion USD, so they can surely afford a Superbowl ad!

?Their secret: They bargain the lowest prices with factories and producers by enabling friends on social media to buy together in a fun way. They are cutting out the middle man and deliver directly from the factory to end-user. It’s called ‘shopatainment’ and ‘direct-to-consumer’ model.

After short-video App Tik Tok and fast-fashion App Shein, the next App that could get Americans addicted to a novel business model coming from China could very well be Temu! Jeff Bezos, you are warned!

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4. Chinese Apps remove ChatGPT as global AI race is heating up

ChatGPT has taken the world by storm. Microsoft’s OpenAI backed generative AI-powered chatbot has taught ChatGPT the ability to simulate human-like conversations and generate coherent text. The world’s attention on the ChatGPT model is mostly on U.S. innovation. But in China, most tech giants such as Baidu, Tencent, Bytedance (Tik Tok), NetEase, JD.com, … are about to launch their own Chinese ChatGPT version. Here is the list. The ChatGPT race is on!

?Despite that OpenAI’s ChatGPT supports Chinese language, the app is off-limits in China. However, more than 100 million Chinese tried it via VPN or 3rd-party integration. Chinese tech firms have rushed to integrate the technology into search, e-commerce, mobile games, industrial products. At the same time, Chinese scammers are having the time of their life.

?China’s Ministry of Science and Technology sees the potential to push ChatGPT technology into society and is supporting local versions of ChatGPT. Regulators ban OpenAI’s ChatGPT and add censoring filtering layers. That could limit the training of Chinese AI models of the Chinese chatbots, but we should also watch how regulators outside China will deal with the risks of ChatGPT services.

?ChatGPT is now becoming the next geopolitical tech war, with limitation on access to AI chips. As a city, Shanghai is trying to attract AI talent to win the AI race with ChatGPT and AI chip developments.

Want to know how ChatGPT is describing me? Find the 7 mistakes!

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5. China added 74 new unicorns in 2022

?China remained stable in adding 74 new unicorns in 2022 (of a total of 364 unicorns) despite the more than difficult year of funding, lockdowns, supply chain disruptions and bad economic year. America did much better with 182 new unicorns, but dropped 28% with a decline from 254 new unicorns in 2021. China and America represent together 77% of all new unicorns added globally.

70% of China’s new unicorns come from these industries: clean technology; renewable energy; and healthcare and smart logistics. More than 10 semiconductor companies also made the list. In the US enterprise service providers and cryptocurrency-related companies made up half of the country’s new unicorns in 2022. Funding of China’s unicorns seems to follow Beijing’s guidance.

6. Beijing publishes rules to revive offshore listings

China’s securities watchdog published new rules to come into effect om March 31st to regulate offshore listings, reviving foreign IPOs by Chinese firms after a regulatory freeze was imposed in July 2021. Chinese offshore listings in U.S. ground to a halt?in 2022.

On top, two months ago, the U.S. accounting watchdog said that it had full access to inspect and investigate firms in China for the first time. It is huge news that both Beijing and Washington regulators will support U.S. listing of Chinese firms, even in restricted sectors for foreign investment in China (under so-called variable interest entity - VIE). This is first time China recognizes VIEs!

We can expect most of the 200 existing Chinese firms listed in U.S. to keep their listing for now, and see the recovery of US IPOs from Chinese companies. At same time, Chinese new rules do favor Hong Kong or domestic listings, and geopolitical tensions will also affect the decision of Chinese firms to think twice when evaluating IPO in U.S. or China/Hong Kong.???????

7. The first ‘made-in-China’ C919 commercial airplane is getting ready to take on Airbus and Boeing

In 2008, China started the development of its first commercial airplane by the state-owned enterprise COMAC. Critics are very skeptical that China could ever make a plane competing with Boeing or Airbus or get certification abroad. ?As 80% of C919’s components are made in the United States and France, the future of the C919 is much dependent on Washington. ??

?Six months after its official certification in China, the C919 airplane just completed its 100-hour validation flight process for China Eastern Airlines. Soon, the airline should get an operating permit for the C919 allowing it to carry up to 192 customers on a flight in China.

Boeing and Airbus dominate the commercial aircrafts market in China. But COMAC’s C919 could break the duopoly with a price expected to be half of the direct competitors Boeing 737 and Airbus A320. The next step for COMAC will be to develop and build every component locally before Washington starts an aviation war with China.

In the meantime, China is getting ready for take-off! Would you fly in a C919 the next time you travel in China??

If you know of any other breaking China innovation news from February that I missed, do let me know so I can add it in next month’s newsletter!

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