Xi’s 2035 Climate Pledge 🌍 AI Town in Shanghai 🤖 BYD World Speed Record 🏎️

China Insights Weekly for September 29. Unpacking China’s economic and technological advances.

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Tomas Kucera & Yereth Jansen
September 29, 2025

2025-09-29 | subscribe | homepage

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

  • China opens USD 21T bond repo market to foreign investors, boosting yuan’s global role

  • Henkel invests USD 71M in Shanghai R&D hub, bringing 500 scientists together

  • China dominates global shipbuilding, holding over half of new orders despite US port fees

  • Floating wind turbine airship cuts power costs by 30% in successful Xinjiang test

🚀 Headlines

China has opened its USD 21 trillion bond market to foreign investors, granting them full access to repurchase transactions. This move aims to align China more closely with global standards and deepen liquidity. As of August, 1,170 foreign institutions from 80 countries and regions held about 4 trillion yuan (USD 550 billion) worth of Chinese bonds. The new rules will adopt global repo practices, enhancing the attractiveness of yuan assets and accelerating China's financial integration. The reform includes a 12-month transition period for current participants.

The People’s Bank of China (PBOC) has officially launched the e-CNY International Operations Center in Shanghai, introducing three business platforms to promote the digital yuan’s international use. These include a cross-border payment platform to address inefficiencies in international transactions, a blockchain service platform for standardized on-chain transactions, and a digital assets platform offering financial-grade services. The launch follows a plan outlined by PBOC Governor Pan Gongsheng in June to advance digital finance innovation and promote the cross-border use of e-CNY.

German industrial giant Henkel has opened a new Inspiration Center for Adhesive Technologies in Shanghai, investing EUR 60 million (USD 70.8 million). The 33,000-square-meter center, located in the Zhangjiang Hi-Tech Park, brings together over 500 scientists and technical experts. It features more than 30 advanced laboratories focused on areas like thermal management and semiconductor testing. The center aims to promote cross-industry collaboration and knowledge exchange, connecting Henkel’s global innovation ecosystem. Henkel has a full supply chain layout in China, including an application technology center in Dongguan, a high-end factory in Yantai, and a pilot plant testing base in the Shanghai Chemical Industry Park.

Germany’s Mercedes-Benz has acquired a 3% minority stake in Chongqing Qianli Technology, an autonomous-driving systems company backed by Geely, to enhance its smart vehicle capabilities in China. This strategic investment aims to support the localization of Mercedes-Benz’s R&D and product development, ensuring its upcoming models are better aligned with Chinese consumer expectations and regulatory demands. The move reflects a broader trend of foreign automakers partnering with local tech firms to stay competitive in China’s rapidly evolving automotive market.

Chinese automaker BYD has set a new world speed record with its U9 Xtreme hypercar, reaching 496 km/h. This surpasses the previous record for a production car held by Bugatti and is 80 km/h faster than the previous electric car record holder Rimac Nevera, which tops out at 412 km/h. BYD set an electric car world record at the end of August at 472.41 km per hour. The U9 Xtreme also achieved a lap time of 6 minutes and 59 seconds on Germany's Nürburgring track, making it one of the fastest cars on the circuit. The U9 Xtreme features a 2,200 kW quad-motor powertrain that generates 2978 horsepower, significantly more powerful than other electric hypercars like the Rimac Nevera and Lotus Evija. The current U9 model, priced at over USD 150,000, has an 80 kWh BYD blade battery pack with a CLTC range of up to 450 km. The U9 Xtreme is expected to be even more expensive.

China has pledged to cut its greenhouse gas emissions by 7–10% below peak levels by 2035, as announced by President Xi Jinping at a U.N. climate leaders’ summit. This commitment comes ahead of COP30 in Brazil. Xi also promised that China will expand its wind and solar power capacity to over six times the 2020 level within a decade, with non-fossil fuels accounting for more than 30% of domestic energy consumption. The announcement follows other major economies outlining their 2035 targets, including Brazil’s 59–67% emissions cut and the EU’s 66–72% reduction goal. Additionally, China launched the world’s largest coal-power carbon capture project at the Huaneng Zhengning power plant in Gansu, which will capture 1.5 million tons of CO2 annually using domestic technology. China also aims to surpass a 35% electrification rate by 2030, up from the current 28%.

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GL Ventures, Pudong Venture Capital launch USD 281.4 million fund to build AI town in Shanghai (link)

GL Ventures and state-owned Pudong Venture Capital have launched a CNY 2 billion (USD 281.4 million) fund to build an AI innovation town in Shanghai’s Pudong New Area. The fund aims to support AI technology innovation and application across various scenarios, focusing on the development of the Zhangjiang AI Innovation Town. The town, covering 2 square kilometers, will include 700,000 square meters of industrial space, 1 million square meters of commercial facilities, and 7,000 homes. The goal is to gather 500 AI companies by 2027 and 1,000 by 2030, creating a globally influential AI innovation and industrial center worth tens of billions of US dollars. Pudong, one of China’s first AI innovation zones, already hosts over 600 leading AI firms with a sector size exceeding CNY 160 billion (USD 22.5 billion).

Despite U.S. port fees targeting Chinese-built ships, China continues to dominate global ship orders. According to a CSIS report analyzing S&P Global data, Chinese shipyards captured 53% of global ship orders by tonnage in the first eight months of 2025, similar to full-year 2023 levels before the U.S. maritime probe. In 2024, China’s share jumped to 73%, as shipowners sought to lock in contracts ahead of potential restrictions. Starting October 14, ships built in China or owned by Chinese entities will face port fees in the U.S., with estimates suggesting fees could top USD 1 million for large container ships. Last year, China built over 1,000 commercial ships, while the U.S. built fewer than 10. Major operators like MSC have placed orders for Chinese-built ships despite the fees, though they have redirected these ships away from U.S. trade routes. HSBC estimates COSCO Shipping could face USD 1.5 billion in port fees in 2026.

Chinese cities are intensifying their tech rivalry by offering rent-free office incentives to attract innovative startups. Shenzhen, Hangzhou, and Suzhou have launched programs providing rent-free space for tech firms in sectors like the digital economy, robotics, and advanced manufacturing. Shenzhen allocated 100,000 square meters of rent-free space in state-owned industrial parks. Hangzhou’s Qiantang Smart City offered three years of rent-free space at its 20,000-square-meter robotics park, saving one local startup CNY 164,000 (USD 23,050) annually. Guangzhou and Shanghai joined in, offering additional incentives like multimillion-yuan financing support and employee housing. Shanghai’s Zero-Bound Cube project provides rent-free offices and free housing for entrepreneurs in fields like hard tech and data processing.

China has successfully tested the world’s largest floating wind turbine, the S1500, in Hami, Xinjiang. This megawatt-scale commercial system, resembling a giant Zeppelin, measures 60 meters long, 40 meters wide, and 40 meters tall. Unlike traditional turbines, the S1500 requires no tower or deep foundation, reducing material use by 40% and electricity costs by 30%. It features 12 turbine-generator sets, each rated at 100 kW, capturing high-altitude winds and transmitting power via a tether cable. Developed by Beijing SAWES Energy, with support from Tsinghua University and the Aerospace Information Research Institute, the S1500 builds on previous prototypes like the S500 and S1000. High-altitude winds offer stronger, steadier energy potential, making airborne turbines like the S1500 a valuable resource for renewable energy.

The S1500 has successfully completed its maiden flight in northwest China's Hami.

📸 China Snapshot

At the edge of Dunhuang in Gansu, the giant dunes of the Mingsha Sand Dunes tower over the desert, their golden ridges stretching for miles. The tiny dots in the photo are climbers tackling one of the steepest slopes, behind the 30-minute ascent that rewards with sweeping views of the desert and the nearby Crescent Lake oasis, a natural pool that has survived for over 2,000 years. Dunhuang was once a vital stop on the Silk Road, and the dunes’ name, Mingsha or “Singing Sand,” comes from the haunting sound produced when the wind sweeps across their surface. Few places capture the blend of natural wonder and historic resonance quite like this desert edge of China.

Photo by Yereth Jansen

🎁 Bonus Stories

Former Korea Advanced Institute of Science and Technology (KAIST) professor Song Ik-ho, known for being the youngest professor appointed at the institute, has moved to a professorship at the Chengdu University of Electronic Science and Technology (UESTC) in China. UESTC is on the U.S. Department of Commerce’s “export control list” due to its development of technologies with potential military applications. Song, a leading scholar in communications and signal processing, served at KAIST for 37 years. His move is part of a growing trend of South Korean scholars relocating to Chinese institutions. A survey by the Korean Academy of Science and Technology revealed that 61.5% of its members received overseas offers in the past five years, with 82.9% from China, and 72.7% of researchers aged 65 and above received such offers.

Chengdu University of Electronic Science and Technology (UESTC)

The International 2026 (TI15), Dota 2's premier esports world championship, will be held in Shanghai, China, marking its return to the city after 7 years. Dota 2 is a multiplayer online battle arena (MOBA) video game by US-based game developer Valve. TI15 will be the second time Shanghai hosts the event, following TI9 in 2019. The 2019 event had USD 34 million prize money and was held in Shanghai’s Mercedes-Benz Arena. It was the most-watched Dota 2 event ever on the livestreaming platform Twitch, with a peak of over 1.1 million viewers during the grand finals. Despite Dota 2's declining popularity in China compared to its peak during the TI3 to TI8 era, the country remains a strong choice for esports events due to its large audience and logistical advantages. The tournament is expected to attract significant attention and potentially boost Dota 2's popularity in China.

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China Insights is brought to you by Tomas Kucera and Yereth Jansen, CEO at Darling Advertising + Design in Shanghai.

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