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2025-04-28 | subscribe | homepage

Welcome back to this week’s edition of the China Insights Weekly Newsletter!

Here are some of the key highlights for this week’s edition:

• Toyota and Nissan expand EV production with USD 3.4B investment in China

• Manus AI raises USD 75M as China pushes MCP standards for AI agents

• China’s quantum computer Jiuzhang solves 2.6 billion years of calculations in 4 minutes

• Huawei’s 910C chip prepares to ship as China counters US tech restrictions

Dive deeper into these stories and more by clicking the headlines below. We value your feedback. Let us know your thoughts or suggestions on LinkedIn, X or Facebook.

🚀 Headlines

Toyota signs agreement to invest 2 billion USD in Shanghai, Nissan to invest additional USD 1.4 billion in China by 2026 (link, link)

Toyota Motor Corporation has reached a strategic agreement with the Shanghai Municipal Government to establish a wholly-owned Lexus electric vehicle factory in Shanghai's Jinshan District. The project represents an investment of 2.02 billion USD (14.6 billion yuan), with an initial land acquisition of about 277 acres (1,692 mu). This marks the second major foreign automaker to set up a wholly-owned manufacturing facility in China after Tesla and the first such venture by a Japanese automaker. The factory will integrate R&D, manufacturing, and sales functions, focusing on producing Lexus-branded EVs and advanced battery technology. Toyota aims to localize over 95% of components, potentially reducing costs by 15-20% compared to imported models. The project aligns with Toyota's goal of expanding its global EV lineup to approximately 15 models by 2027 and producing about 1 million electric vehicles annually.

Nissan plans to invest an additional USD 1.4 billion in China by 2026 to launch about 10 new vehicles and reverse its sales decline. In 2024, Nissan sold fewer than 700,000 vehicles, less than half of its sales four years earlier. The company also unveiled its first plug-in hybrid, the Frontier Pro, and the N7 battery electric sedan. Nissan aims to export from China to many countries, except the United States.

China’s tech giants are driving MCP adoption to upgrade AI chatbots, US-based Benchmark joins USD 75m funding round in China’s Manus AI (link, link)

China is driving the adoption of the MCP (Model Context Protocol) standard, transforming AI assistants into practical digital helpers capable of interacting with apps and services. Tech giants, including Ant Group, Alibaba Cloud, and Baidu are deploying MCP-based services, with Ant Group's MCP server integrating with Alipay for payment services and Alibaba Cloud launching an MCP marketplace offering over 1,000 services. Baidu supports MCP to foster AI application use cases. The protocol enables AI agents to perform tasks like making payments, booking appointments, and checking maps, representing an evolution beyond traditional chatbots. While China's MCP adoption shows promise, challenges include international standards competition, regulatory scrutiny, security concerns, and technical integration issues.

US venture capital firm Benchmark has joined a USD 75m funding round in China’s Manus AI, valuing the startup at USD 500m. Manus AI aims to replace everyday tasks with AI agents. The funding will support international expansion into the Middle East, Japan, and the US. Manus AI’s general AI Agent can screen CVs, analyze stocks, and create travel itineraries. The company recently launched a USD 39/month subscription service, competing with OpenAI’s ChatGPT. Existing investors include Tencent Holdings, HSG, and ZhenFund.

The Stanford AI Index notes that Chinese models have rapidly closed the quality gap with US models, with performance differences shrinking from double digits in 2023 to near parity in 2024.