ByteDance AI in Cars 🚗 China GPU Wins Microsoft 💻 Airbus Orders Hit $55B ✈️

Welcome back to China Insights Weekly. Here are some of the key highlights for this week’s edition:

• Electric two-wheelers surge overseas, as fuel shocks lift demand across Southeast Asia

• CSSC delivers the world’s largest car carrier, extending China’s shipbuilding lead

• Renewables pass 60% of capacity, with hydrogen and EV charging scaling fast

• Tiangong plans six modules, as China prepares for the post-ISS era

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🚀 Headlines

China's AI race evolves into feature war in cars, Tencent launches Hunyuan Hy3 AI model preview (link, link)

ByteDance’s Doubao AI chatbot is now used by over 50 car brands, integrated into 145 car models, and more than 7 million vehicles, including the Mercedes‑Benz GLC, SAIC Audi E7X, and SAIC Volkswagen ID. ERA 9X. Alibaba’s Qwen AI is being integrated into vehicles from BYD and a Volkswagen joint venture, enabling voice‑commanded food delivery, hotel bookings, and package tracking. DeepSeek has also been integrated with 9 automakers, including Geely, Dongfeng, and Leapmotor. Many Chinese automakers are adopting a multi‑model strategy, integrating AI assistants from different providers either across different vehicle models or even within the same vehicle for different functions such as navigation, entertainment, and voice control.

Tencent has released a preview of its Hunyuan Hy3 foundation model, improving reasoning and coding capabilities, and integrated it into its chatbot, coding tool, and QQ. In March, the company reorganized research teams and plans to more than double AI spending to over USD 5 billion in 2026. Hy3 uses a Mixture of Experts architecture with 295 billion total parameters, activating 21 billion at a time to reduce costs. The project is now led by Chief AI Scientist Yao Shunyu, an OpenAI alumnus who returned to China to spearhead the development. Meanwhile, Tencent is in talks to take up to a 20% stake in DeepSeek’s first outside funding round, as Chinese tech giants build their own models while also investing in rivals to hedge across the fast‑moving AI market.

Chinese GPU maker Lisuan Tech joins Nvidia, AMD, and Intel to earn Microsoft Windows WHQL certification (link)

Chinese GPU maker Lisuan Tech has become only the fourth company ever, after US companies Nvidia, AMD, and Intel, and the first in China, to earn Microsoft WHQL certification for its drivers. The certification was awarded for the LX 7G100 graphics card, built on a 6nm process and featuring 12GB of GDDR6 memory. Performance is close to an Nvidia RTX 4060. WHQL certification allows the driver to be distributed through Windows Update and ensures compatibility and security. WHQL allows Lisuan’s GPUs to be pre‑installed in branded commercial PCs (Lenovo, Dell, Huawei) and to meet mandatory Windows compatibility requirements in finance, government, and industrial tenders. The milestone marks significant progress in software reliability for Chinese GPUs and could open the door to global markets.

Airbus lands USD 21.4 billion order and total USD 55 billion over six big deals with Chinese carriers since December (link)

Airbus has secured a USD21.4 billion deal with China Southern Airlines and Xiamen Airlines, the European aircraft maker’s sixth large order from Chinese carriers since the end of last year. China Southern has ordered 102 planes from Airbus' A320neo family, and Xiamen Airlines has ordered 35. China Eastern ordered 101 A320neo planes in March, including the A320neo, A321neo, and A321XLR, with a sticker price of USD15.8 billion. At the end of 2025, Juneyao Airlines and Spring Airlines unveiled deals for 25 A320 and 30 A320neo worth USD8.2 billion, while Air China said it was buying 60 A320neo valued at USD9.5 billion. China Express Airlines also put in an order for three A320 costing up to USD420 million. All deals totaled over 55 billion USD and 356 planes. The A320 is one of the world's most-used single-aisle passenger jets, with around 11,300 in service. More than 2,000 fly in China, accounting for nearly half of the country's civil aviation fleet. The A320neo is the next-generation upgrade.

Iran conflict boosts China’s electric two-wheeler exports to Southeast Asia (link)

Orders for Chinese electric motorcycles are fully booked through July, driven by rising demand from Europe, Southeast Asia, and Latin America. Q1 2026 exports by private firms rose 30% from last year. In Chongqing, one of China’s major motorcycle manufacturing hubs, exports reached 170 million yuan (about USD 23.4 million) in the same period, up 23.6% from a year earlier. Exports to Myanmar jumped 617.5% year‑on‑year to 64.7 million yuan, while shipments to Laos (+25.7%) and Cambodia (+34.2%) reached 43.5 million and 38.2 million yuan, respectively. Mainstream export models now offer over 150 km per charge, and Chinese vendors are also delivering battery‑swapping solutions for regions with unreliable grid access. In 2025, China’s combined exports of motorcycles, electric motorcycles, and e‑bikes reached a record 45.03 million units worth RMB 18.29 billion, up 23% from the previous year.

China produces half of the world’s tea with brands starting to expand overseas (link)

China is the world's largest tea producer, with output reaching 3.92 million metric tons in 2025 – nearly half of global production. Exports totaled 418,800 tons valued at RMB 11 billion (USD 1.6 billion), up 11.9% and 8.9% year-on-year, respectively. However, China's average tea export price is only USD 4-5 per kilogram, compared to USD 6-8 for Sri Lankan Ceylon tea and USD 25-30 for Japanese matcha. Green tea accounts for 88% of export volume. The industry is highly fragmented, with over 1.6 million tea-related companies and leading players holding less than 5% market share. New generation tea brands are expanding overseas: Mixue Bingcheng has over 4,400 stores outside China and Chagee has over 350. Early results include Longchi Gujing, an Xihu Longjing brand, generating about 20% of its revenue from overseas.