🌟 Jet Disputes & Cars: US-China Air Tension, Automotive Boom & Warcraft’s Epic Return 🎮

2024-04-14

Welcome to this week’s edition! We've sifted through hundreds of sources to bring you the latest business and tech insights on China in under 5 minutes.

US airlines’ moves to limit flight frequencies into China are not grounded in market realities

A request by US airlines to the Biden administration to block further Chinese carriers’ flights does not appear to be grounded in market realities. Current US-China flights are split evenly on both sides at 50 per week and remain just about 25% of 2019 levels. While demand may be lower than pre-pandemic, there is scope to continue restoring seats to the benefit of US and Chinese carriers. Blocking further flights would be reciprocated. Russian overflight is an issue, but some Chinese airlines aren’t engaging in the practice on Beijing-East Coast routes.

Spending over China’s Tomb-Sweeping Festival exceeds the pre-pandemic level

Domestic travel and spending during China’s Tomb-Sweeping festival topped pre-pandemic levels, a sign that consumption may be recovering in the world’s second-largest economy. Total tourism spending over the three-day holiday rose 12.7% from 2019 on a comparable basis to 53.95 billion yuan ($7.5 billion).

China’s auto exports set monthly record in March

China’s passenger vehicle exports jumped 39% year-on-year in March to 406,000 units, setting a monthly record. Of the exported vehicles, around 120,000 were new-energy vehicles (NEVs). NEV exports in March increased by 70.9% compared with a year ago.

Microsoft and NetEase to re-launch Warcraft game in China, ending feud 

Chinese video games giant NetEase said it is working with Microsoft to bring popular games including “World of Warcraft” back to the country after a public fallout that ended a decade-long partnership in 2023.

French auto parts giant Valeo starts work on USD400 million Shanghai plant

Construction on Valeo's new factory for driver assistance systems costing CNY2.9 billion (USD400.7 million) got underway in Shanghai earlier this week, as the French car components maker continues to invest heavily in China's automobile industry. The plant will produce cameras for unmanned vehicles, LIDAR, domain controllers and chip-binding equipment.

Volkswagen to invest $2.7 billion in Chinese production site

Volkswagen announced on Thursday plans to invest 2.5 billion euros (USD2.68 billion) in China to expand its production and innovation hub in the city of Hefei in Anhui Province. Hefei site will help bring technologies to market around 30% faster.

Alibaba’s AliExpress has launched a new marketing campaign to encourage more Chinese brands to enter overseas markets

Through the campaign, called 10 Billion Yuan (USD1.4 billion) of subsidies, AliExpress, Alibaba Group Holding’s international e-commerce platform, aims to recruit big businesses that are already doing cross-border e-commerce and merchants from its online retail platform Tmall, with 1,000 slots available. Participating companies will be offered a fully managed model, in which AliExpress handles operations, sales, and logistics fulfillment, as well as a semi-managed model.

China’s e-commerce model eclipses Western efforts YNAP, Farfetch

The state of luxury multi-brand e-commerce in the West is in shambles. A combination of decreased consumer loyalty, lack of brand support, unexciting customer journeys, and lack of personalized experiences have led to its demise. Meanwhile, in China, the largest global e-commerce platforms in terms of revenue — JD.com, Tmall, Taobao, and Luxury Pavilion — are thriving marketplaces for high-end brands. Over the past year, 56% of the mainland’s online luxury shoppers used JD.com for their purchases. E-tailer Tmall commands the largest market share in China, responsible for some 51% of all transactions on B2C platforms — consumers spend an average of seven minutes a day on the platform.

🎁 Bonus Story

China begins work on the 575km Saharan railway from Algeria to Marocco to diversify its iron ore imports

China Railway Construction Corporation (CRCC) has begun work on a 575km railway through the Sahara Desert, between the Algerian iron ore mine at Gara Djebilet and the Moroccan rail system. Gara Djebilet is thought to have one of the largest high-grade ore deposits in the world. At present, China imports the majority of its ore imports from Australia (79%) and Brazil (19%). As it is responsible for 52% of global steel output – 1 billion tonnes – the geopolitical risks are considerable. Algeria hopes to reduce its dependence on its oil and gas industries, which presently contribute 19% of its GDP and 93% of its export earnings.

Feel free to share any comments or feedback by replying to this email!

Thanks for joining us at the finish line. Mark your calendars for more insights coming your way next Sunday.

Share China Highlights with your friends. Simply send them your referral link below!

You can also find us on LinkedIn here. Hope to see you again next week!

Interested in starting a newsletter yourself? Check out Beehiiv!