To The Moon

1. China continues to grow its gold reserves as it looks to diversify away from the US dollar.

The People’s Bank of China (PBoC) reported #gold reserves of 71.2 million ounces as of the end of October, or an increase of 740,000 ounces compared to the previous month. The current gold reserves equate to 2,214 tonnes worth about $142 billion at today’s prices. #China has been steadily increasing its gold reserves since the early 2000’s when its total reserves still stood at about 500 tonnes. However, Beijing has been known not to release the full picture of its gold purchases, and estimates place the government’s real gold reserves at about double the official tally. Meanwhile, domestic gold demand has been strong, with consumption rising 7.3% to 835 tonnes in the first 9 months of the year. $SPDR Gold Shares(GLD)$ $Chow Tai Fook Jewellery Group Limited(CJEWY)$ $Luk Fook Holdings International Ltd(LKFLF)$

2. Two of China’s established automobile brands record hefty growth in October sales.

The GAC Group, China’s 5th largest automaker, sold 224,449 cars last month, up 5.6% year-on-year. Of this amount, the company sold 46,800 new energy vehicle (NEV), up 39% compared with the same month a year ago. Meanwhile, Great Wall Motors, the 8th largest automaker in China, reported a 31% year-on-year jump in sales of automobiles. Total sales for the month reached 131,308 units. The performance of these two companies shows that growth is not isolated to China’s most popular brands like BYD, NIO, Li Auto, Geely and Xpeng. In fact, most of China’s established brands are leading the charge in #exports to emerging markets, offering value for money in an industry previously dominated by Japanese and Korean brands. $GAC GROUP(02238)$ $GREATWALL MOTOR(02333)$

3. China’s trade with the rest of the world in October drew a mixed picture for the economy.

On the one hand, exports fell 6.4% to $274.83 billion for the month compared with the same period a year ago. That was significantly worse than the 3.5% decline the market was expecting and indicates weak global demand, partly due to decoupling effects, an ongoing trade war with the US, and slowing economic growth in general. On the other hand, imports grew 3% to $218.3 billion, which surprised a market expecting a 5% year-on-year fall. The sudden improvement in imports in China could be a sign of recovering domestic consumption following PBoC efforts to boost liquidity and lower interest rates. China’s total trade in October reached $493.13 billion, down 2.5% year-on-year, with the trade surplus dropping 31% to $56.5 billion. $iShares MSCI China ETF(MCHI)$ $KraneShares Bosera MSCI China A 50 Connect Index ETF(KBA)$ $KraneShares CICC China Leaders 100 Index ETF(KFYP)$

4. Foreign companies continue to increase investments in China despite decoupling rhetoric.

At the recently held China International Import Expo (CIIE) in Shanghai, several Japanese firms announced plans to increase their investments in the country. These include #Panasonic, Muji, and a host of other Japanese firms that seek to tap China’s growing market for consumer goods. #Muji, for example, is a fashion and lifestyle products retailer with 361 stores in China as of August 2023 and eyeing 50 new store openings a year. Another popular Japanese brand, #Lawson, plans to expand to 10,000 locations in China by 2025, or double what the company had as of May 2023. However, Japanese car companies are starting to exit China after being unable to quickly adapt to the changing market towards electrified vehicles.

5. Tesla will be raising the prices of versions of its Model Y electric sedan in China.

This comes after the company raised the price of its high-spec Model Y by RMB 14,000 ($1,920) last month in an attempt to exit from the industry price war that has boosted sales but eroded profitability for nearly every single automaker. Tesla also faced a 2.6% month-on-month fall in October deliveries in China to 72,115 units. It was also just 0.6% higher than the same period a year ago, in stark contrast to the industry leader, BYD, which registered a 38.4% year-on-year increase in deliveries last month. In the 3rd quarter of 2023, Tesla’s market share in China fell to 9.89% from 12.98% the previous quarter, and it looks like the 4th quarter is going to be worse for the company unless it can find a way to lure back the buyers with better models in the world’s most competitive EV market. $BYD Co., Ltd.(BYDDF)$ $BYD COMPANY(01211)$ $Tesla Motors(TSLA)$ $NIO Inc.(NIO)$ $NIO Inc.(NIO.SI)$ $NIO-SW(09866)$ $XPeng Inc.(XPEV)$ $XPENG-W(09868)$ $Li Auto(LI)$ $LI AUTO-W(02015)$ $GEELY AUTO(00175)$ $Geely Automobile Holdings Ltd.(GELYY)$

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