China's retail incentives encourage hesitant buyers to shop during the Lunar New Year

Purchases of consumer products like smartphones and tablets skyrocket, though future retail trends remain unclear.

The substantial financial aid provided by Beijing to stimulate spending is working as intended, with consumers taking advantage of the situation to upgrade various devices and home appliances.

Customers, who have been holding off on spending since the beginning of the year in hopes of larger government subsidies, have embarked on a spending binge during the Lunar New Year holiday, despite the subsidy amount remaining unchanged from the previous year.

As an illustration, smartphone sales in Shanghai have seen a significant increase of over 90% since January 20, compared to the same time frame a year ago. Similarly, tablet sales have skyrocketed, with an increase of over 200%, as shown by data from Suning.com, a leading home-appliance chain in mainland China.

"The surge in purchases of home appliances and electronics is due to the government's commitment to boost the economy," stated Eric Han, a high-ranking executive at Suolei, a consultancy agency in Shanghai. "However, it's uncertain if this retail growth will continue post-holiday."

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JSR, a key player in the semiconductor supply chain, anticipates an increase in chip sales due to DeepSeek. The affordable AI models offered by DeepSeek are predicted to drive long-term demand for semiconductors, according to the Japanese chip materials provider.

Five past ten

Chinese AI innovator DeepSeek has seized the number one position in the US App Store, toppling ChatGPT from its reign.

Emoto stated in a discussion that progress in AI technology is always beneficial. Regardless of whether DeepSeek alters the landscape of the industry, he mentioned it wouldn't significantly affect them. He further added that the advent of innovative AI technologies is a favorable trend.

Biotech companies in China are profiting from lucrative licensing agreements following notable drug discoveries. PharmCube, a data provider, reports that China is currently developing 4,804 new drug candidates, placing it second globally, with the US leading with 5,268.

Analysts suggest that if the drug candidates from Chinese biotech start-ups are successfully developed and launched, their licensing agreements with international partners could potentially generate billions in revenue.

In the otherwise uninspiring industry, a key highlight was the robust transaction activity involving Chinese sellers and mostly American buyers. This involved preclinical or clinical-stage molecules, often referred to as asset out-licensing or business development. This statement was made by Zhang Jialin, the leader of China healthcare research, in a report issued on January 21.

Usually, it takes around ten years to create new medications. This extensive process involves preliminary laboratory studies and tests on animals to confirm the safety and effectiveness of potential drugs. Only after these steps are completed, human clinical trials are conducted. Following successful trials, requests for marketing authorization are then submitted to regulatory authorities.

Out-licensing usually entails a pharmaceutical innovator and patent holder transferring the rights to another drug company. This is done for the purpose of additional funding in clinical trials, which ultimately aims to gain regulatory approval and marketing in specified markets.

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The MSCI China Health Care Index, an index that follows 51 middle and large-cap stocks, dropped by 19.5% last year, lagging behind the 18.8% increase seen in the wider MSCI China Index. The health industry's measure experienced declines between 19% and 25% over the prior four years and didn't perform as well as the more comprehensive index over the past three years.

The Chinese startup, Unitree, predicts that humanoid robots will be extensively utilized in commerce within this decade. Unitree anticipates a significant advancement in the abilities of humanoid robots by 2026, at which point their applications in the business world are expected to become more defined.

The achievement displayed at the Spring Festival Gala highlights the advancements made by Unitree. Over the last two years, the company has ramped up its development of humanoid robots, particularly as the sector becomes more saturated with both international and local competitors due to recent developments in AI models.

One minute and one

Robots take the spotlight in a dance performance at China's Spring Festival Gala.

"The crux of humanoid robots lies in the 'mind' – implying intelligence," stated Huang Jiawei, the marketing director, during a conversation with the South China Morning Post.

The disruption of DeepSeek services intensifies its challenges in the midst of political examination, however, some view this as a chance for growth. A digital assault on the Chinese AI new venture has resulted in sporadic service interruptions over several days, while third parties like Nvidia are promoting their in-house solutions.

Five past ten

The Chinese AI innovator, DeepSeek, has claimed the prime position in the US App Store, ousting ChatGPT from the top spot.

Australia's Finance Minister Jim Chalmers has issued a warning to users to tread carefully with DeepSeek this week, as reported by Reuters. The Italian data protection authority has disallowed access to the app due to concerns over its handling of personal information. The app has been taken down from the Apple App Store and Google Play store in Italy. Additionally, both Ireland and South Korea are seeking more details from DeepSeek about how it uses personal data, as per Reuters' coverage.

Standard Chartered relies on yuan resources amidst US-China conflicts and potential threats from Trump

The bank has already experienced an increased requirement for foreign-exchange administration and hedging, and an executive predicts this need will only amplify.

The instability in the market during the tenure of US President Donald Trump and the increasing attractiveness of yuan assets are driving a surge in Standard Chartered Bank's capital markets and trading operations this year, says a high-ranking official.

John Thang, who heads markets and strategic client management and solutions for Hong Kong, Greater China, and North Asia, stated that Trump's plans for inflationary policies and his tariff talk directed at China and other nations are causing shifts in the markets. This is influencing predictions on interest rates, foreign currency, and credit.

"The market has experienced instability each time Trump made a move or even when he remained silent, not to mention when he actually spoke," stated Thang.

Standard Chartered, a bank in Hong Kong that issues notes, has already observed a rise in the need for managing foreign exchange and hedging. The requirement for companies and financial establishments to handle risks will continue to expand, according to Thang.

The management of risks associated with the Yuan will become a crucial issue for market players, given the currency's recent instability, he further commented.

Chinese equities are projected to benefit from a $236 billion injection from state-owned investors, according to UBS. The Chinese government's encouragement for insurers, mutual funds, and social-security funds to ramp up their A-share investments is expected to stabilize market fluctuations, as per industry experts.

James Wang, who heads China strategy for the Swiss bank, suggested in a separate statement that establishing a more extended investment timeframe for the main institutional investors in the A-share market could help decrease the market's inherent fluctuations. He further added that this could also inspire more long-term capital infusion into the stock market.

Wang stated that China's most recent actions have the potential to produce steady inflows amounting to nearly 1.3 percent of market capitalisation annually.

Shares in Hong Kong surge as UBS predicts significant fund investments due to government aid initiatives. UBS anticipates a fund influx of US$236 billion in 2025, following Beijing's order to bolster the capital markets.

Shares in Hong Kong climbed, positioning the market for a successful month, as investors speculated on significant capital inflows following China's increased efforts to protect the country's financial markets from the effects of U.S. trade sanctions.

On Monday, the Hang Seng Index rose by 0.7% to reach 20,197.77, marking a monthly increase of 0.6%. The Tech Index also made gains, rising by 1.4%. With the exception of a 9.2% drop last year, the city's key indicator has recorded a successful January each year since 2021.

Indices in domestic markets took a hit prior to the week-long Lunar New Year break, as the Shanghai Composite Index gave up its entire 0.7 per cent increase. Both the index and the CSI 300 measure of stocks from Shenzhen and Shanghai saw a decline of 3 per cent in January.

Two-thirty-one

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On Sunday, the China Securities Regulatory Commission revealed new steps to enhance index-related products, while also appointing a group of insurance companies to back its initiative. Last week, Beijing declared its intention to channel more mutual and insurance funds into stocks to counter potential US policy offensives.

UBTech, a Chinese robotics manufacturer, aims to begin large-scale production of industrial humanoid robots by the end of the year. The company intends for over 60% of the humanoid robots they plan to distribute this year to be their forthcoming model, the Walker S2.

UBTech Robotics, a company based in Shenzhen, intends to start large-scale production of its humanoid robots by the end of this year, says a high-ranking official. This move comes as the company, which is currently operating at a loss, seeks to increase production in the face of intense rivalry in China's robotics industry.

UBTech plans to distribute approximately 500 to 1,000 Walker S Series industrial humanoid robots to its clients and collaborators this year. These include automobile manufacturers, Apple's supplier Foxconn, and the logistics company SF Express, according to the company's chief brand officer, Michael Tam. He shared this information during an interview at the recent China Conference in Guangzhou, organized by the South China Morning Post.

Tam stated that UBTech's ultimate goal is to introduce humanoid robots to every household. However, the company's primary emphasis at the moment is on industrial robots.

According to Tam, factories require humanoid robots to assist in addressing the issue of labor scarcity.

Factories offer a less complex and more predictable environment for humanoid robots to function and learn, as they are not yet intelligent enough to serve humans at home, according to Tam.

Established in 2012 and going public in Hong Kong in 2023, UBTech is a major force in China's robotics sector. The company provides an extensive selection of non-humanoid robots used in various applications including cleaning, delivery, and service. In October of the previous year, they introduced their most sophisticated industrial humanoid, the Walker S1.

Sunac China reduces expenses on a defaulted debt of US$715 million associated with a project in Beijing. The terms of the restructuring enable the Chinese developer to significantly decrease its yearly borrowing expenses from 9.6 per cent to 4.12 per cent.

Sunac China, a leading residential and commercial property developer in the nation, successfully reduced its borrowing expenses and avoided a potential fine after rearranging a 5.2 billion yuan (equivalent to US$715.6 million) unpaid debt related to a premium housing and business project in Beijing.

The developer has entered into a contract with China Credit Trust and China CITIC Financial Assets to settle the debt accrued by its subsidiary, Beijing Oceanwide Dongfeng Real Estate, over a period of four years, ending in January 2029. This information was revealed in a filing with the Hong Kong stock exchange on Monday. The firm managed to reduce the original debt by 1.64 billion yuan before it defaulted in September 2023, the company stated.

Sunac announced that the lenders have consented to forgo the default penalty, decrease the accumulated late interest to 650 million yuan, and reduce the yearly interest on the remaining debt to 6.5 per cent from 9.6 per cent. This essentially reduced its loan costs on the initial debt to 4.12 per cent from the date of borrowing, it further stated.

Ten fifty-seven

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Sunac stated that this has offered "a full departure solution" for the trust investors, significantly easing the project's debt burden. This gives the project more robust financial backing.

The Chinese AI innovator, DeepSeek, has taken the leading position in the US App Store, surpassing ChatGPT. DeepSeek has incorporated its logic model into the online and application versions of its chatbots, offering unrestricted usage without any charges.

The chatbot application from Chinese AI company, DeepSeek, has ousted OpenAI’s ChatGPT to secure the leading position on the US iOS App Store. This could potentially reshape the AI industry, given its commitment to open-source strategies.

The AI chatbot from DeepSeek, which was launched in the US App Store on January 10 and can be used at no cost, saw a tremendous growth in popularity in the US following the Chinese company's subsequent introduction of its R1 open-source reasoning model.

The launch of DeepSeek's R1 reasoning model has garnered significant interest worldwide in the tech industry due to its blend of superior performance and affordability, making it more competitive than its American counterparts such as OpenAI’s o1 series of reasoning models. According to DeepSeek's official website, their model stands toe-to-toe with OpenAI's o1.

DeepSeek has incorporated the logic model into the web and application variants of its chatbots, offering unlimited access free of charge.

Contrarily, OpenAI has a pricing structure of $200 a month for unrestricted usage of its o1 models. Alternatively, they offer a basic package at a minimum cost of $20 per month, which provides limited access.

R1 secured the third position in the ranking by Chatbot Arena, a project conducted by AI scientists at UC Berkeley that assesses the performance of an AI model.

It is only surpassed by two models from Google's Gemini series, outperforms a range of OpenAI's o1 models, and currently holds the top position as the highest-ranked open-source model according to Chatbot Arena.

Beijing announces a $7.2 billion infusion of insurance funds for stocks

China Pacific, Taikang Life, and Sunshine Life are among the companies investing 'patient capital' into A shares to assist with market stabilization.

Beijing has released another roster of insurance firms participating in a program aimed at strengthening and stabilizing the stock market through the infusion of long-term capital.

The State Council's National Financial Regulatory Administration (NFRA), a body that supervises the financial industry, has given the green light to the second round of long-term equity investment trial ventures, valued at 52 billion yuan (US$7.2 billion). This news was announced by state media on Sunday.

The roster comprises of China Pacific Insurance, Taikang Life Insurance, Sunshine Life Insurance, and pertinent insurance asset-management firms, as per the reports.

These organizations will be involved in the trial program by means of contract-based funding, a method in which the investment is handled based on preset conditions and goals specified in an agreement. It is anticipated that the insurance companies will use the influence of long-term and patient capital to uphold the steady functioning of the capital market, according to the reports.

A week ago, Trump issued threats to start applying tariffs on products from China starting from the next month. He also revealed a strategy to surpass China in the realm of artificial intelligence.