To The Moon

1. #China released its 2nd quarter #GDP growth, which came in at 6.3%. That was significantly lower than expectations of 6.8% to 7.0% growth. The growth vs. the previous quarter was 0.8%, indicating a slowdown from the 2.2% growth registered in the 1st quarter. The economy remains on shaky footing as the real estate and manufacturing sector have been struggling. The fact that China had its slowest GDP growth of just 0.4% in the 2nd quarter of 2022, indicating a lower base, shows us just how difficult a job President Xi has ahead of him to get China’s economy on track to attain their target 5% GDP growth for the full year. However, this increases the likelihood of Beijing enacting more forceful stimulus in the coming days and weeks. If they fail to announce anything new and significant, it will result in renewed selling pressure for both Chinese equities and the Chinese yuan. $KraneShares Bosera MSCI China A 50 Connect Index ETF(KBA)$ $iShares MSCI China ETF(MCHI)$ $China Fund, Inc.(CHN)$ 2. #Semiconductor output in China grew 5.7% to 32.2 billion units in June compared with year-ago levels. However, output for the first half of 2023 was still 3% lower than last year’s levels, while imports of semiconductors fell 18.5% over the same period. With more export restrictions on semiconductor technology and equipment targeting China set to take effect in the near future, along with newly proposed restrictions on service and repairs of already sold equipment by Dutch manufacturers to Chinese customers, turning around the domestic chip industry will be largely up to local manufacturers ability to ramp up legacy chip output. But it was reported that telecom giant Huawei is looking to reenter the 5G smartphone market by the end of the year. So, China may already have advanced in its quest to develop newer generation chips despite being handicapped by US trade restrictions. $ASML Holding NV(ASML)$ $NVIDIA Corp(NVDA)$ $Taiwan Semiconductor Manufacturing(TSM)$ $Advanced Micro Devices(AMD)$ 3. The Beijing government plans to launch 14 measures to support the development of technology platform companies as a follow-up to last week’s words of support and praise from Premier #LiQiang. While some of these measures are meant to correct issues such as false advertising and fraudulent merchants, others aim to streamline the regulatory aspect so that individual merchants on platforms like #Alibaba, #Taobao or http://JD.com will have an easier time to expand, obtain necessary licenses, and transform themselves into enterprises for increased reach and credibility among consumers. While these are good measures, it still doesn’t address the need to stimulate consumption to take the pressure off other parts of China’s economy suffering right now from a global slowdown and a weak real estate market. $Alibaba(BABA)$ $JD.com(JD)$ $Pinduoduo Inc.(PDD)$ 4. The National Bureau of Statistics released data on per capita disposable income in China that showed a growth of 6.5% during 1H23. It hit a nominal RMB 19,672 per person as of end June, or about $2,730. That works out to $5,460 per year which is still well below the US per capita disposable income of $46,790. While China has nearly 4.5 times the number of people, the capacity to spend in China is undoubtedly much smaller despite it being the world’s 2nd largest economy. And with a much higher savings rate of 45% compared with just 4.6% in the US, Chinese will need to open up their wallets more to keep the economy from slowing down any further. $Global X China Consumer ETF(CHIQ)$ $Amazon.com(AMZN)$ $Apple(AAPL)$ 5. U.S. Special Envoy for Climate #JohnKerry is in Beijing to discuss #climate issues where the two countries can work together and find common ground in a world they are increasingly seeing each other as rivals. This is the third high-ranking US official to visit China since the start of June, increasing hopes for a thaw in their relationship. Like the previous two visits by Anthony Blinken and Janet Yellen, expectations are low - probably even lower - of any breakthrough during John Kerry’s visit. US tariffs against China’s renewable energy equipment exports, such as #solarpanels, remain in place and have contributed to the slowdown in new renewable energy capacity installations last year. Growth in new installations could pick up this year after President Biden issued a 2-year waiver on tariffs for imported solar equipment from Southeast Asia, including some countries suspected of helping China circumvent tariffs. $Daqo New(DQ)$ $JinkoSolar(JKS)$ $Sunrun(RUN)$