To The Moon

1. The Biden Administration warned China to expect updated technology export curbs in October.

The message put China on notice after Huawei last month released the Mate 60 Pro smartphone that defied expectations. The smartphone’s capabilities made light of existing export curbs that sought to prevent Huawei from coming up with a product capable of coming even close to the iPhone. The chipset in the Mate 60 Pro was made by domestic chip manufacturer SMIC, another company targeted by US export curbs, and boasts of capabilities similar to those used by Apple using process nodes several generations behind. SMIC’s chipset may be more expensive to make to deliver iPhone-like performance but Huawei can always reduce costs in other components given its access to China’s advanced manufacturing supply chain. $Apple(AAPL)$ $SENSETIME-W(00020)$ $Taiwan Semiconductor Manufacturing(TSM)$ $Qualcomm(QCOM)$ $ASML Holding NV(ASML)$

2. China’s investment in its power sector could reach $13.7 trillion between 2020 and 2060.

This was according to the State Grid Corp. of China and it factors in investments necessary to reach the country’s net-zero goal by 2060. China accounts for about 29% of global CO2 emissions, the largest of all countries. But on a per capita basis, China’s emissions are less than half that of the U.S., Australia and Canada. In 2022, power firms in China invested $170 billion, including $40 billion in solar power generation. This means investments will only get increasingly bigger each year as China pushes for more renewable energy projects to attain its net-zero goal. It doesn’t mean the country will stop building coal-fired power plants but will aim to produce more energy from renewables than fossil fuels going forward. $HUADIAN POWER(01071)$ $YANKUANG ENERGY(01171)$ $HUANENG POWER(00902)$ $CHINA RES POWER(00836)$ $SOLARGIGA(00757)$

3. Tourism in the Asian gambling Mecca of Macau picked up dramatically during the 4-day Golden Week holiday.

There were 530,300 visitors flowing into the former Portuguese colony, which was up 4.3X compared to a year ago. Granted much of China was still subject to strict lockdowns this time in 2022, the growth is still a welcome development for Macau’s gambling and entertainment sector. There’s still plenty of room for improvement, as pre-pandemic levels of tourist arrivals during Golden Week 2019 were recorded at 1.04 million. This doesn’t mean Macau’s recovery is still 50% below what could be considered normal, as August 2023 arrivals of 3.2 million have practically returned to 2019 levels. It means that Chinese travelers may be opting to skip Macau during this Golden Week break, possibly due to tighter budgets. $Las Vegas Sands(LVS)$ $MGM Resorts International(MGM)$ $Wynn(WYNN)$ $SJM Holdings Ltd.(SJMHY)$

4. China and Brazil completed their first trade transaction using only the two countries’ currencies.

The trade involved a pulp company in Brazil exporting goods to China, which used a closed-loop mechanism for converting yuan to Brazilian real. The two countries have a bilateral trade worth $157 billion as of 2022, which could mean that much demand for US dollars will disappear as the two emerging market nations seek closer financial and trade ties. It will add to the yuan’s growing share of global trade, which amounted to 24% in the first 7 months of the year. China already conducts more than half of its cross-border trade in yuan, helping alleviate the pressure of the yuan during the US dollar’s recent rampage in the foreign exchange market.

5. BYD introduced a right-hand-drive version of its popular Seal model in Thailand to a strong market reception.

The company singed a deal with a domestic partner to manufacture EVs in Thailand last December 2022. Their factory will be capable of producing 150,000 EVs a year when it opens in 2024 and will cater to the local market as well as Thailand’s Asian neighbors. Thailand is known to be the Detroit of Southeast Asia, having become a manufacturing hub for the likes of Toyota and Ford early on. BYD’s Seal garnered 1,289 orders in the first 3 hours of its launch event in the country, which is a strong indicator of good acceptance of Chinese EV brands in one of the largest car markets in Southeast Asia. This region will be a growth driver for the company as growth is set to taper in China in the coming years. $BYD Co., Ltd.(BYDDF)$ $BYD COMPANY(01211)$ $Li Auto(LI)$ $XPeng Inc.(XPEV)$ $XPENG-W(09868)$ $NIO Inc.(NIO)$ $NIO Inc.(NIO.SI)$ $NIO-SW(09866)$ $Tesla Motors(TSLA)$