China's new subsidy plan excludes Apple's expensive iPhones, setting the limit at $818

The most recent financial incentive from China provides a 15% discount for buying smartphones, tablets, and smartwatches.

The financial aid will have a limit of 500 yuan for each buy, and buyers can only benefit from the discounted price for a single item in each product category.

The Department of Trade announced on Wednesday that all local and international firms have the same rights to participate in the subsidy program in a fair and transparent manner.

The starting costs for Apple's iPhone 16 Pro and iPhone 16 Pro Max are set at 7,999 yuan and 9,999 yuan, respectively.

Grabbing attention is the latest treasure, but how to unearth it

Even with their restricted range of products, recent research indicates that small enterprises have the potential to compete with dominant industry players by successfully engaging the interest of consumers.

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"An abundance of information results in a scarcity of attention," notes Herbert Simon, an American Nobel Laureate who introduced the idea of attention economy. In an era where we are swamped with information, it's crucial for businesses to excel at capturing and capitalizing on the attention of consumers.

Social media sites such as YouTube, Instagram, and TikTok have led to the rise of numerous content creators, also known as "influencers", many of whom have achieved worldwide fame. The industry of influencer marketing has witnessed a significant surge, growing from $1.7 billion in 2016 to an estimated $24 billion by the close of this year, as per the 2024 Benchmark report on the state of influencer marketing, published by the social media analysis company, Influencer Marketing Hub.

In China, the practice of live stream selling has gained immense popularity, especially among renowned influencers. A prime example of this is Crazy Little Yang Brother or Crazy Xiaoyangge, who not only hosts e-commerce live streams but also surpasses his contemporaries by earning an impressive annual net income of 3.21 billion Chinese yuan (US$451 million). This trend is hardly surprising, as a recent study by KPMG titled 'Navigating the future of seamless commerce in Asia Pacific' revealed that Generation Z considers social commerce and live streaming commerce as significant aspects of their shopping experiences.

"Profiting from attention via e-commerce is a viable business model in both the immediate future and the long run," states Tony Ke, an Associate Professor from the Marketing Department at the Chinese University of Hong Kong (CUHK) Business School.

Online shopping platforms aren't the sole entities utilizing content to engage customers and profit from their attention via direct merchandise selling. The New York Times has launched an online shop that provides not just books, but a wide array of clothing and accessories. Vogue has taken it a step further by inaugurating an internet store that features items handpicked by its editorial staff.

How can global corporations succeed in the digital competition?

Digital platforms present intricate and expensive endeavors for businesses. Recent studies suggest tactics to increase their effectiveness in improving global sales.

[This article is brought to you by our promotional partner.] With China being the globe's second biggest economy, its businesses have gained significant relevance in the international market and are progressively enhancing their digital footprint. The most recent report from the National Data Administration indicates that China's key digital sectors were responsible for 10 per cent of the nation's GDP in 2023.

Chinese global corporations, such as technology leaders Huawei, Tencent, and Xiaomi, are making significant strides internationally. For example, Tencent Cloud has experienced a significant increase in its international business in the past three years, particularly in Southeast Asia, Japan, the Middle East, and Europe. Therefore, it's crucial for managers of these multinational enterprises to focus on their digital strategies to optimise profits and reduce expenses.

"Multinational enterprises' (MNEs) international sales are influenced by the amount of time and resources they devote to the creation and management of digital platforms in this rapidly advancing tech world," states Li Jingyu, who is an Assistant Professor in the Management Department at the Business School of the Chinese University of Hong Kong (CUHK).

In joint research, Professor Li explored the effect of managerial focus on digital platforms concerning international sales. The research, named Digital platform attention and international sales: An attention-based view, was jointly written with Pan Yigang from York University, Caleb Tse from Nanyang Technological University, and Yang Yi from Shanghai Jiao Tong University.

The term "digital platform attention" pertains to the comprehensive energy, focus, and resources multinational enterprises (MNEs) assign to the administration and enhancement of their digital platforms. This idea springs from the attention-based view theory that underscores the importance of managerial focus in driving a company's success.

"Multinational enterprises that consistently focus on digital platforms tend to have a greater impact on global customers and improve their international sales," suggests Professor Li. "However, those with a broader or more dispersed focus tend to struggle with their international sales."

Deciphering price trends in China's stock markets

Some small-scale investors drive daily price variations in growing stock markets, but these shifts might be susceptible to loss.

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Shares that have shown good performance historically tend to maintain this trend in the near future, and the opposite is also true. This is a phenomenon known as price momentum, indicating that a stock's past performance can impact its future trajectory. In American stock markets, this price momentum is typically observed within a mid-term period of one to 12 months, before it switches direction in the long-term span of two to five years.

Nonetheless, Chinese stock exchanges, despite ranking second globally with over 4,700 publicly traded companies, do not demonstrate medium momentum and extended-term price reversals. Rather, their stock prices reveal a significant momentum on a day-to-day basis, suggesting a daily price momentum.

"Stocks in China's markets that show robust performance today are predicted to continue this trend tomorrow," suggests Jiang Wenxi, an Associate Professor in the Finance Department at the Business School of the Chinese University of Hong Kong (CUHK). "This trend usually lasts for one to two days before it typically reverses within a week."

In a scholarly article called Daily Momentum and New Investors in an Emerging Stock Market, Professor Jiang and another associate professor from the same faculty, Gao Zhenyu, in collaboration with Xiong Wei A from Shenzhen Stock Exchange and Xiong Wei from Princeton University, attempted to clarify this occurrence.

Professor Jiang notes that the Chinese stock market is mainly dominated by individual investors, a characteristic typical of budding markets, and regularly sees an arrival of new investors. He further adds that these novice investors, with their limited investment knowledge, are likely to fall victim to cognitive distortions and are easily affected by the emotional repercussions of market changes.

Chinese electric vehicle manufacturers persist in slashing prices, despite the risks involved. The sector is launching another bout of price rivalry, which could potentially force less successful competitors out of the market by 2025.

The typical sales price for a pure electric vehicle, also referred to as a battery EV (BEV), dropped by 24,000 yuan (equivalent to US$3,275), settling at 225,000 yuan in the previous month, according to Cui Dongshu, the chief secretary of the China Passenger Car Association (CPCA). He mentioned in a report released on Monday that such a significant price reduction is unusual in the globe's biggest car and EV market.

"He stated that a significant amount of new electric vehicle models were introduced at reduced prices, leading to a near-universal reevaluation of electric car costs. The price cuts, he said, were pursued quite assertively."

The financial assistance program for swapping gas-guzzling vehicles for electric ones was in effect from July to December, causing a flurry of customers to quickly finalize purchases before the year concluded.

It's expected that Beijing will roll out new incentives this year to boost the sales of eco-friendly vehicles in 2025. However, the announcement isn't anticipated until after the annual National People's Congress session concludes in March.

Based on information from the CPCA, an unprecedented 227 models, including electric and gasoline vehicles, saw a reduction in their prices last year. This is a significant increase from the 148 models in 2023. Back in 2022, merely 95 cars were sold at a discounted price.

The economy of Abu Dhabi is receiving a significant lift from Chinese investments, with a particular focus on ports, energy, and real estate. These investments are generating employment opportunities, contributing to the development of infrastructure, and enhancing the emirate's reputation as a worldwide center, according to the director of the investment office.

Firms from China are playing a significant role in diversifying Abu Dhabi's economy by escalating their investments in sectors like ports, industry, energy, and real estate, as stated by a representative from the Abu Dhabi Investment Office (ADIO).

Chinese firms are pumping money into the UAE's capital, leading to job creation, enhancing infrastructure growth, and bolstering the city's position as an international business center, according to Hareb Al Mheiri, the Executive Director of the Investor Growth Sector at ADIO, an organization dedicated to endorsing investment in the city.

Al Mheiri highlighted in a discussion that a significant trend is the growing participation of Chinese companies in the development of ports and industrial areas. This includes their role in the China-UAE Industrial Capacity Cooperation Showcase Zone at the Khalifa Economic Zones Abu Dhabi Group, which is boosting the emirate's industrial potential.

There has been a significant increase in Chinese investment in the real estate sector, particularly in high-end residential developments and the hospitality industry, he noted. This trend is partially fueled by the growing number of Chinese tourists, which in turn is encouraging more investment in tourism facilities.

"Chinese corporations are setting up production units [here], leveraging the emirate's strategic position and beneficial business climate to penetrate regional markets," said Al Mheiri.

Abu Dhabi, home to 90% of the UAE's oil wealth and a majority of the nation's sovereign wealth, is pursuing a strategy to broaden its economic base. It aims to enhance its reputation as a financial hub and free trade zone.

Honor, a smartphone manufacturer from China, is aiming to capitalize on Indonesia's increasing demand for high-end mobile devices. The company plans to kick off its initial entry with the release of over 30 products in the Indonesian market this year. Additionally, Honor intends to establish more than 10 interactive 'experience' stores across the country.

Looking ahead at future financial periods, we hold a strong belief in the possibilities of the Indonesian market. We see potential not only in the general market but also in the middle to high-end smartphone sector. This belief stems from the fact that Indonesia is the leading economy in Southeast Asia and boasts the largest and most youthful demographic," Li expressed during a press briefing on Friday.

Li stated that in Indonesia, their primary attention will be on products of medium to high value and they will aim for long-term market investments.

Tencent and Xiaomi pull Hong Kong shares to a six-week low due to US-China political tensions

The Defense Department included Tencent, CATL, and numerous other companies on the list of 'Chinese military companies', triggering significant losses.

The Hang Seng Index fell by 1.2 per cent to 19,447.58 on Tuesday, bringing the benchmark down to the same level it was at on November 29. The Tech Index also decreased by 0.9 per cent, while the Shanghai Composite Index saw an increase of 0.7 per cent. The Nasdaq Golden Dragon Index, which consists of Chinese stocks listed in the US, dropped 1.2 per cent overnight.

The company behind WeChat, Tencent, experienced a significant drop of 7.3 per cent, falling to HK$379.60. This is the largest decrease since October 8, mirroring its 7.8 per cent decline in New York. The biotechnology company Wuxi Biologics also saw a decrease of 2.5 per cent, reducing its value to HK$16.18, while Xiaomi dipped by 5.9 per cent to HK$34.15. Leading the downturn among prominent electric vehicle manufacturers, Li Auto's shares dropped by 1.6 per cent to HK$92.85.

China's largest EV battery manufacturer, Contemporary Amperex or CATL, experienced a 2.8 per cent drop, taking its value to 249.45 yuan in Shenzhen's market.

"Concerns about future strain are increasing as the action introduces ambiguity to other Chinese technology companies," stated Xing Zhaopeng, a high-ranking strategist at the Australia & New Zealand Banking Group. "The effect still remains minimal due to their restricted business dealings with the US."

Forty minutes and

Trump returns: what lies ahead for China, Asia, and the world? | Discussion Column with Yonden Lhatoo

US actions cause new blow to Chinese tech stocks, pulling Tencent and CATL into military realm

Both shares plummeted in Hong Kong and Shenzhen exchanges, wiping off $38 billion in market worth as a result of the US intervention.

Several of China's leading private tech firms experienced a new blow on the stock market following the US's decision to include Tencent Holdings and Contemporary Amperex Technology, also known as CATL, in a list of Chinese military entities. This move escalates geopolitical strains ahead of Donald Trump's upcoming inauguration later this month.

Tencent, the company behind the dominant app WeChat, experienced a 7.3% drop to HK$379.60 in Hong Kong, mirroring a 7.8% decrease in its American depositary shares in New York the previous night. CATL, the global leader in electric vehicle battery production, saw a decline of 2.8% to 249.45 yuan in Shenzhen. Meanwhile, SenseTime Group, the top AI firm in China which has also been blacklisted, remained steady at HK$1.33 after an initial drop of up to 5.3% in the city.

Tencent and CATL suffered a joint loss of US$38 billion in market value, as the Hang Seng Index dropped 1.2 per cent, hitting almost a six-week low. Both companies have described the shift as an error and misinterpretation.

Seven minutes to seven

Rise or Fall: Is China's Stock Market Craze Sustainable?

Even though the register doesn't function as a trade embargo or penalty, and firms have the opportunity to request removal from the blacklist, this action will probably incite increased wariness among investors. The incoming President, Donald Trump, who decreed a prohibition on U.S. investments in these organizations in 2020, is set to retake the White House on January 20.

"The decision suggests ongoing instability, especially in light of President Trump's proposed additional tariffs," stated Kai Wang, a strategist at the US research company, Morningstar. "Consequently, it wouldn't be surprising if investors remain cautious about China-related matters until the Chinese government provides more detailed information about its financial aid. Furthermore, this situation could deter certain funds from investing in the company, which would further decrease the value of its stock."

Miniso has released US$550 million in bonds to fund its worldwide growth and repurchase its shares. The retailer from China is intensifying its endeavors to expand internationally with the aim of establishing a worldwide chain of 40,000 stores.

Miniso Group Holding, a Chinese retailer specializing in economical lifestyle products, is securing $550 million through a debt instrument. This funding will aid in their global growth initiatives and allow for stock repurchases.

The company based in Guangzhou is set to issue this amount in securities linked to equity, which will mature on January 14, 2032, as stated in a document submitted to the Hong Kong stock exchange on Tuesday. After six years, these securities can be converted into cash and they come with a 0.5% interest rate, which is payable twice a year. The offering will conclude the upcoming Tuesday.

The starting price for the instrument is set at US$8.28, which is approximately HK$64.39. This price is 26.1% higher than Monday's closing price of HK$51.05. The equity-linked securities will have a value expressed in lots of US$200,000.

"The intricate tool could lower Miniso's funding expenses and aid the firm in decreasing costs by approximately 4 per cent," stated Richard Lin, the head consumer analyst at SPDB International. "As a growing number of Chinese businesses aim to grow globally, they will progressively depend on foreign capital for financing."

4:41 AM

The food chain from the mainland, HotMaxx, intends to shake up Hong Kong's retail market by offering products at discounted prices.

Lin anticipates that more businesses will start to release debt with increasingly complex structures.

Shares of Miniso, listed in Hong Kong, experienced a drop as high as 8.3 percent before reducing losses and finally settling at HK$48.40.

Smithfield, the American pork-processing subsidiary of WH Group, has applied for a listing on Nasdaq. WH Group, a Chinese firm, bought out Smithfield for US$4.7 billion in 2013, ending its 14-year trading on the New York Stock Exchange (NYSE).

Smithfield Foods, the biggest pork processing company in the US and a branch of WH Group, has sought a place on the Nasdaq, in a move following their Chinese parent company's decision to finalize the split that was declared half a year ago.

The American division has not yet determined the amount of funds to be raised or the number of fresh shares up for sale. WH initially announced its intention to spin-off in July of the previous year.

WH Group has stated that the proposed Smithfield offering will begin when market conditions are favorable, and once the SEC gives its approval to the registration statement. It was also mentioned that the proposed separation and the Smithfield share listing are dependent on approval from the appropriate authorities, favorable market conditions and other factors.

Chinese corporations are increasingly opting to list their overseas branches separately, a trend that's gaining traction as a strategy for global expansion, particularly as domestic trade is stalling due to a decrease in consumer expenditure.

Viewpoint | Macau's Emergence as Financial Center Creates Opportunities for Hong Kong

Hong Kong, with its sturdy financial bodies and extensive investor base, has the potential to significantly aid in the development of Macau's financial sector.

The latest Financial System Act of Macau, enacted in 2023, showcases the government's dedication to enhancing its financial infrastructure and staying abreast with the changing financial technology landscape. The act notably features a distinct segment dedicated to financial technology, which establishes a legal structure for the provisional authorization of financial technology initiatives on a trial basis.

Despite the lack of a stock exchange in Macau, the city has given the green light to two financial asset trading platforms. In August 2018, the Macau administration sanctioned the creation of the Chongwa (Macao) Financial Asset Exchange (MOX). This platform primarily facilitates debt securities transactions for Chinese companies and local Chinese government financial entities.