To The Moon

1. China’s November Caixin Services PMI reading accelerated again in a positive sign for the economy.

The November reading for the private-sector-driven Caixin Services PMI was 51.5, beating market forecasts of just 50.5, and significantly better than the 50.4 reading in October. This is the second month of acceleration in China’s services industry. It’s also the first better-than-expected reading since July, as the services sector escaped contraction this year. Meanwhile, the Caixin Manufacturing PMI for November came in at 50.7, which was higher than the 49.3 contraction level expected by the market. It was an improvement from the 49.5 reading in October and signaled the first improvement since August. These figures point to expanding activity in key sectors of the economy despite lingering worries of an economy under fire from the trade war and a problematic real estate industry. $KraneShares Bosera MSCI China A 50 Connect Index ETF(KBA)$ $iShares MSCI China ETF(MCHI)$ $iShares China Large-Cap ETF(FXI)$

2. China’s credit rating was maintained but the outlook was cut from Stable to Negative by Moody’s on debt concerns.

Credit ratings agency Moody’s Investors Service maintained China’s long-term credit rating of A1, which is deemed still well within Investment Grade. But it slashed its outlook for Chinese debt from Stable to Negative due to concerns about a buildup in debt as Beijing acts to restore balance in its ailing property market. However, Beijing’s approach to reviving its economy has been very measured, with most policies geared towards improving quantity and access to already available liquidity. China has so far resisted the temptation to repeat the bazooka-type stimulus that it unleashed in 2008. $KraneShares CICC China Leaders 100 Index ETF(KFYP)$ $KraneShares Bloomberg Barclays China Bond Inclusion Index ETF(KBND)$ $Global X China Financials ETF(CHIX)$ $Global X MSCI China Real Estate ETF(CHIR)$

3. E-commerce related parcel deliveries reached a new record as online shopping in China stays buoyant.

Chinese e-commerce logistics firms shipped the country’s 120 billionth parcel this week, reaching a figure that is already 8.5% higher than all the parcels delivered in 2022. That’s nearly 100 parcels for each living person in China. Nearly 360 million e-commerce related parcels are shipped every single day in the country, which is a testament to both the hu $IGG, Inc.(IGGGF)$ ge market and the high degree of automation that the entire e-commerce supply chain has achieved. Smart logistics in China is a huge and growing industry that’s seen its size more than double to RMB 54.4 billion from 2016 to 2020. There’s still enormous potential for growth as smart logistics remains a fraction of China’s RMB 12.7 TRILLION logistics market as of 2022. $Alibaba(BABA)$ $Alibaba(09988)$ $Pinduoduo Inc.(PDD)$ $JD.com(JD)$ $JD-SW(09618)$ $Bilibili Inc.(BILI)$ $BILIBILI-W(09626)$ $KUAISHOU-W(01024)$ $KUAISHOU TECHNOLOGY(KUASF)$

4. Chinese EV manufacturer Nio, Inc. has received approval to produce vehicles in mainland China.

Nio is one of the biggest electric vehicle startups in China with monthly operations running close to 200,000 deliveries a year. Yet, until recently, the company has contracted manufacturing of its EVs to Anhui Jianghuai Automobile Group (JAC). In October, Nio expressed interest to acquire JAC’s two factories worth RMB 4.5 billion ($614 million), which appears to be a move in anticipation of its production license approval. The ability to manufacture vehicles on its own gives Nio more control over its operations and essential for establishing itself as a marquee brand in China’s booming but highly competitive EV market. $NIO Inc.(NIO)$ $NIO Inc.(NIO.SI)$ $NIO-SW(09866)$ $Li Auto(LI)$ $LI AUTO-W(02015)$ $XPeng Inc.(XPEV)$ $XPENG-W(09868)$ $GEELY AUTO(00175)$ $Geely Automobile Holdings Ltd.(GELYY)$ $Tesla Motors(TSLA)$ $BYD Co., Ltd.(BYDDF)$ $BYD COMPANY(01211)$

5. China’s National Press and Publication Administration approved 87 domestic online games in November.

The regulator for China’s digital entertainment industry announced the approval of another 87 online games in November intended for domestic release. This includes the title, Beyond the World, operated by a subsidiary of Netease, the second-largest online gaming company in China in terms of game revenue. The NPPA has been approving more than 80 new domestic titles and several dozen foreign titles every few months after a long period of intense regulatory scrutiny on the content that is made available to young consumers. Despite the crackdown, China’s online gaming industry, currently the second largest in the world next to the US, is expected to grow 8.5% a year from 2022 to 2027 to reach $90.5 billion according to ResearchAndmarkets. $NetEase(NTES)$ $NTES-S(09999)$

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