Consumer confidence in China is nearing a 'critical juncture' where it could skyrocket following a series of stimulus measures, according to UBS. The Swiss bank has suggested that homegrown brands and private labels are likely to profit as Chinese households decrease their savings and increase their spending.

The consumer sector in China, which has been negatively affected by a prolonged property downturn that has stunted economic growth and lowered morale, may be approaching a critical juncture. This comes as consumers start to save less and increase their spending in response to the stimulus package introduced last September, according to analysts.

The rate of growth in surplus savings of households slowed down in 2024 and saw a decrease in the third quarter, while there was a 3 to 4 percent yearly rise in societal retail sales, as per a report by UBS revealed on Monday. The Swiss bank credited this turnaround to the lessening impact of the Covid-19 pandemic, along with favorable government measures.

Local brands are poised to gain advantages, and private brands could potentially become the main factor for this year's growth due to their limited market presence. However, what's more significant is that they could profit from a possible shift away from the "downtrading" trend observed in the previous year.

UBS suggests that due to enhancements in quality and accessibility of channels, customers might not view local brands or private labels as 'cheap alternatives' to internationally-branded products. Instead, they are increasingly selecting local brands or private labels, guided by a practical mindset.

An independent study released by the bank in October discovered that almost half of the participants transitioned to local brands and private labels within the past year, attributing this change to "greater worth for their money". This tendency was particularly prevalent among consumers in major and mid-sized cities.

Investor hopes for a rebound in consumption continue to be muted due to the possibility of increased US tariffs and ongoing strain on real estate prices. The Monday report forecasts that China's total real consumption growth will likely hover about 3.8 per cent in the period of 2025-2026.

Industry professionals believe that tourism and student accommodation will boost the value of hotel properties in Hong Kong. They predict a prosperous year for hotel owners, as they anticipate a surge in tourism and the opportunity for proprietors to sell their assets at higher prices.

The hotel sector in Hong Kong has experienced significant transactions totaling HK$7.85 billion within the last two years, not only in 2024, as reported by Colliers. An altered statement from a high-ranking official at Colliers reads: "Even with difficulties, the hotel industry is set for a hopeful year in the future."

The number of tourists, which surged by 33% to 44.5 million in 2024, is expected to maintain its pace due to government initiatives aimed at enhancing its economic impact. Additionally, the city is grappling with a lack of student housing, which is driving the need for transforming hotels into student lodgings.

The hotel and tourism industry is projected to increase its contribution to the city's economy from 2.6% in 2023 to 5% by 2029, mirroring its importance last observed in 2018. According to a strategic plan revealed in December, Hong Kong aims to stimulate the economy with a HK$120 billion (US$15.4 billion) injection, creating 65,000 new employment opportunities within the coming five years.

"Even with obstacles, the hotel industry is set up for a hopeful year ahead," stated Shaman Chellaram, the leading director for Asia in valuation and advisory services at Colliers. He further added, "We also anticipate an increase in occupancy rates," considering the forthcoming events such as the Lunar New Year fireworks, the Rugby Sevens competition in March, and the Coldplay concert in April.

The planned 23-floor hotel is set to feature eight suites and 91 rooms, in addition to a commercial hub, boasting approximately 138,000 square feet of space for retail stores, eateries, and event spaces. This information was disclosed in a recent submission by Miramar to the Hong Kong stock exchange.

Trump authorizes executive order postponing TikTok prohibition, warns of imposing duties

Trump lengthens the deadline by 75 days, cautioning China with potential tariffs if Beijing fails to sanction a deal related to the brief-video application.

"Whether or not I proceed with the agreement is undecided. TikTok has no value whatsoever. If I don't give it the green light, it needs to shut down. I gathered this information from the proprietors," Trump stated on Monday.

"On TikTok, I possess the authority to either auction it off or shut it down, and we'll arrive at that decision… We might also need endorsement from China, I'm not certain, but I'm confident they'll give it the green light," he further stated.

Trump hinted that if there was an opportunity to strike a beneficial agreement with TikTok and China disapproved, he believes they would eventually give their consent due to the threat of imposing tariffs on China.

"Perhaps, I'm not confirming that I'd do it, but it's definitely a possibility. If we were to declare that 'it won't get approved', that could be perceived as a definite aggression. In response, we might impose tariffs ranging from 25, 30, 40, 50 per cent, or even up to 100 per cent."

Shares in Hong Kong surge despite Trump's tariff threat to China over the TikTok agreement. The US president postpones TikTok's prohibition for 75 days and issues a tariff warning to China should Beijing reject a deal related to the brief-video application.

The Hang Seng Index saw an increase of 0.9 per cent, closing at 20,106.55 on Tuesday, and the Hang Seng Tech Index experienced a rise of 2.1 per cent. In mainland China, the CSI 300 Index had a marginal growth of 0.1 per cent, while the Shanghai Composite Index experienced a slight decline of 0.1 per cent.

The largest chip manufacturer in China, Semiconductor Manufacturing International Corporation, experienced a 6.4 per cent increase in its share price, reaching HK$41.90. Similarly, Sunny Optical, a producer of iPhone camera lenses, saw its shares rise by 7.3 per cent to HK$70.20. Additionally, car makers Li Auto and Geely Auto saw their share prices increase by 5.3 per cent to HK$94.10 and 3.1 per cent to HK$14.74 respectively.

The Hang Seng Index has been performing admirably in recent days, largely due to last week's encouraging economic figures from China and hopes for better US-China ties, says Kenny Wen, who leads the investment strategy at KGI Asia.

"He noted that the positive aspect is also due to the postponement of immediate tariffs on China," he said, suggesting that potential increases might be restricted in the lead-up to the Lunar New Year holiday next week.

Nvidia's CEO whirls through Taiwan: from Lunar New Year celebrations to night market trips

Jensen Huang engaged with leading figures in the industry, such as TSMC's originator Morris Chang and Foxconn's chairman Liu Young-way.

Huang held a notable lunch event in Taipei on Sunday, which saw the participation of 36 senior leaders from Taiwan's premier tech firms.

At the meal, Huang humorously commented on the group picture snapped post-lunch, in which he, along with a few others, were crouching in the front row. He playfully remarked, "The front row works out. The back row doesn't," which elicited chuckles from those present.

Huang underscored the vital role that supply chain partners play in Nvidia's tech advancements. He pointed out that 45 global factories are currently running round the clock to manufacture supercomputers equipped with Nvidia's Grace and Blackwell chips.

The bond clearance systems of Hong Kong and Macau have been interconnected to establish a more substantial market for raising funds. On the first day of this connection, four new bond issues totaling 3.2 billion patacas (US$401 million) were settled, along with 18 transactions in the secondary market.

On the initial day, Benjamin Chan, the chairman of the Monetary Authority of Macao (AMCM), announced that four fresh bond issues in Macau, valued at 3.2 billion patacas (equivalent to US$401 million), were cleared through Hong Kong's CMU. Additionally, 18 secondary-market dealings were carried out by investors from both Hong Kong and Macau.

"The inaugural day of linking the two clearing houses was a success," he stated during an event at the World Trade Centre in Macau. "We anticipate a rise in the involvement of institutional investors in the Macau debt markets following this association."

The link will establish an international investment and funding route, allowing investors from both markets to engage in each other's bond market more conveniently and effectively, according to the HKMA.

The immediate connection demonstrates Hong Kong's position as a "central hub" and signifies a significant progression in transforming the CMU into a global CSD in Asia, a statement from HKMA's CEO Eddie Yue Wai-man highlighted.

Taiwanese companies Compal and Inventec are considering expanding to the United States as a response to Trump's tariffs, with Texas being a preferred location. The state's robust power infrastructure and close geographical distance to Mexico make it an attractive choice for the Taiwanese laptop industry.

Executives from Taiwanese laptop manufacturers Compal and Inventec are considering expanding their operations into the United States, with Texas being a prime potential location. This move is seen as a preparatory measure in response to the possible tariffs threatened by President Donald Trump.

Trump, who resumed his role as US president on Monday, has unsettled businesses and governments globally by promising to implement 10% tariffs on all goods imported into the US. Trade specialists have warned that such action would disrupt trade patterns, increase expenses and provoke countermeasures against US exports.

In a conversation with journalists prior to the firm's yearly closing celebration this month, Compal's President and CEO, Anthony Peter Bonadero, mentioned they had discussed potential investment opportunities with numerous southern American states. They are also keeping a close watch on how Trump's trade levies on Mexico are progressing.

Texas is a top contender primarily due to the energy capacity they've developed. Samsung is establishing a massive fabrication plant there, which has resulted in an increase in power and infrastructure. Unique to Texas is its own independent power grid, a feature not found in any other US state. We are still assessing this, but nothing has been finalized as of now.

The Chinese yuan increased in value following a softer approach towards China in Trump's initial speech. As concerns about a trade war diminished, the Chinese currency experienced a rise against the US dollar. However, there is a concern that this uptick might not last long.

The Chinese yuan experienced a sharp increase on Monday night after US President Donald Trump adopted a more mild stance on China in his initial speech. Experts predict that the currency will maintain its stability for the foreseeable future.

The value of the offshore yuan steadily increased, moving from more than 7.31 to less than 7.27 against the US dollar. By Tuesday noon, the offshore yuan was approximately 7.269 per US dollar.

The People's Bank of China established the median rate, often referred to as the fixing rate, at 7.1703 against the US dollar on Tuesday. This is the most robust level it has reached since the beginning of November.

The president and chief economist of Pinpoint Asset Management, Zhang Zhiwei, linked the rise of the yuan mainly to Trump's omission of tariff policies against China in his inaugural address.

Worries in the market regarding the trade war have been sidelined, but they have not vanished. Individuals are still anticipating further signs from the US administration concerning tariff discussions," he stated.

Moving forward, Zhang anticipates that the yuan will mostly retain its stability, with minor variations primarily influenced by the changes in the US dollar.

In recent times, the yuan has continued to experience strain as the US dollar, seen as a safe bet, has fortified due to predictions that the US Federal Reserve will reduce the frequency of rate cuts this year.

China is set to permit overseas investors to move onshore bonds offshore through repurchase agreements and derivatives. This move is part of China's efforts to liberalize its markets and reinforce Hong Kong's role as an offshore center for the yuan.

China intends to provide international investors who own the nation's domestic bonds with additional fundraising alternatives, in a final-stage reform that further liberalizes the country's financial markets and bolsters Hong Kong's position as an offshore yuan center.

Domestic bonds provided by the Finance Ministry and the policy banks in mainland China, under the same scheme, will also serve as security for derivatives trades at OTC Clearing Hong Kong. This organization, a trading partner set up by Hong Kong's stock exchange, offers clearing and settlement services. This action is anticipated to take effect in the first quarter.

Up until recently, mainland Chinese bonds were seen as a "less adaptable investment choice" for foreign investors. This was because they couldn't be utilized as security in repos, collateral finance dealings, or as margin collateral for other operations, according to William Shek, who heads the markets and securities services in Hong Kong for HSBC Holdings.

"Shek stated that these fresh initiatives greatly enhance their functionality by permitting onshore bonds to be utilized as collateral in international markets for the first time. Further potential applications, such as cross-currency repos, may also come to light," he further explained.

Following the initiation of the Bond Connect program in July 2017, offshore investors' ownership of mainland China bonds has increased by 4.7 times, reaching 4.16 trillion yuan (US$568 billion) by 2024.

Hong Kong's Towngas and Singapore's Global Energy will collaborate to create a green methanol supply chain. The agreement will leverage Towngas' expertise in green methanol production and Global Energy's proficiency in managing the supply chain.

Towngas, the only gas supplier in Hong Kong and part of China Gas, has partnered with a marine fuel and logistics firm based in Singapore. Their aim is to establish a supply chain for green methanol. This is the most recent effort by the company to cater to the energy transition requirements of the region.

Towngas has entered into a formal agreement with Global Energy Trading with the intention of creating eco-friendly methanol supply chains throughout Asia, according to a statement released by the Hong Kong-based company on Monday.

"This collaboration marks a crucial progression in the eco-friendly transformation of marine fuel supply," was stated. "Through unifying Towngas' prowess in eco-friendly methanol production with Global Energy's proficiency in supply chain administration and market operational skills, we are establishing a solid framework to expedite the decarbonisation process in the shipping industry."

According to Towngas, Global Energy, a pioneer Singaporean company that owns and operates specialized methanol bunkering tankers, supplied 4.7 million tonnes of marine fuel in the previous year.

In the previous year, Towngas entered into a series of contracts to create environmentally friendly fuels for the aviation and marine sectors, which have committed to achieving zero net carbon emissions by the year 2050.

Towngas is dedicated to attaining zero carbon emissions by transitioning to energy sources that have a lower carbon footprint, such as green naphtha, green methane, green methanol, and green hydrogen. The company aims to reduce the carbon content of the gas it provides by 36% from the levels in 2019 by the year 2035.

ByteDance, the Chinese company that owns TikTok, has launched an AI code editor, which relies on Microsoft software, amidst a postponed TikTok ban. This new software is specifically designed for Chinese programmers working abroad, following a temporary relief granted by the Trump administration.

The recently launched integrated development environment (IDE), known as Trae, is aimed particularly at international markets. It provides coders the opportunity to interact with an AI assistant during programming and generate pieces of code or compose project-level code using natural language cues.

The artificial intelligence capabilities of the tool are driven by OpenAI's GPT-4o or Anthropic's Claude-3.5-Sonnet, and at present, these features can be utilized at no cost. The tool's user interface is compatible with both English and Chinese, catering to the numerous programmers based overseas in China. The firm has not yet disclosed if it intends to add more languages to its support list.

The software has been introduced on Apple's macOS and a Microsoft Windows version is currently being developed, as stated on the website. The software is disseminated by ByteDance's subsidiary Spring (SG) Pte, based in Singapore, which is also the firm responsible for the launch of its Cici chatbot in 2023.

Troubled Chinese developer Vanke endures a bond downgrade from Fitch Ratings

S&P Global also lowers the ratings of the debt-ridden builder's bonds by two levels due to worries about the firm's liquidity.

The demotion is indicative of a decline in China Vanke's sales and cash flow, which is diminishing its financial safety net in preparation for significant debt repayments in the capital market due in 2025, as per the analysis by Fitch.

Fitch noted that the changes also accounted for doubts regarding the immediate sales outcomes of the housing constructor, its capacity to secure steady domestic financial resources, and the possible consequences of latest news stories concerning the location of its highest-ranking official. Such events might impact the trust of home purchasers and the overall market's view of the firm, Fitch stated.

On the same day, S&P Global Ratings reduced China Vanke's bond rating by two levels to B-, due to worries about the company's liquidity.

S&P analysts have stated that they think the financial stress on China [Vanke] has increased, after evaluating its cash availability to be lower than their earlier predictions.