To The Moon

1. China’s consumer price index (CPI) fell 0.3% in December, slightly better than the 0.4% decline expected by the market. It’s the third straight month of negative CPI growth, pointing to deflation that’s not getting worse but becoming stickier. China’ Producer Price Index (PPI) for the month fell 2.7%, slightly worse than the 2.6% decline expected. #inflation

2. China’s exports for December grew at a faster-than-expected rate of 2.3% year-on-year vs. consensus estimates of only 1.5%. Imports also grew 0.2%, which was better than consensus estimates of an 0.5% decline. This resulted in a trade surplus of $75.34 billion, higher than expectations of just $74.95 billion. Despite both exports and imports declining for the full year, China’s trade surplus remained relatively steady at $823 billion.

3. The amount of new loans created in December reached RMB 1.17 trillion, or RMB 240 billion less than a year ago. It was also far lower than the RMB 1.35 trillion in new loans the market had expected. Meanwhile, M2 Money Supply for the last month of the year grew 9.7%, lower than the consensus forecast of 10.1%. #stimulus

4. China’s total vehicle output and sales smash above 30 million units in all of 2023. The country’s total vehicle production grew 11.6% to 30.16 million units, while total vehicle sales grew 12% to 30.09 million units. Total vehicle exports grew 58% to reach a record 4.91 million units, which makes China the world’s top auto exporter ahead of Japan. $BYD Co., Ltd.(BYDDF)$ $BYD COMPANY(01211)$ $NIO Inc.(NIO)$ $NIO Inc.(NIO.SI)$ $NIO-SW(09866)$ $XPeng Inc.(XPEV)$ $XPENG-W(09868)$ $Li Auto(LI)$ $LI AUTO-W(02015)$ $GEELY AUTO(00175)$ $Geely Automobile Holdings Ltd.(GELYY)$

5. China is expected to lead the recovery in global oil consumption in 2024 according to research firm Wood Mackenzie. The country is forecast to increase its oil demand by 530,000 barrels per day this year, or a little over a quarter of the 2 million bpd expected growth in global oil consumption. That’s being driven by surging highway and air travel, as well as recovery in industry with the help of Beijing’s stimulus policies. $United States Oil Fund(USO)$ $PETROCHINA(00857)$

6. Hong Kong could be the next bitcoin ETF market after the US Securities and Exchange Commission green-lit the product this week. Eleven bitcoin ETFs launched in the US this week shortly after the SEC approval, generating strong response from investors looking at an alternative way of investing in cryptocurrency. Hong Kong is said to already have 10 similar funds preparing to launch spot crypto ETFs, which could see massive interest among locals, including cross-border mainland investors. $Hong Kong Exchange & Clearing Ltd.(HKXCY)$

7. The People’s Bank of China (PBoC) approved RMB 100 billion in mortgages to eight cities for the government’s pilot project aimed at supporting the real estate market. The mortgages were for unsold units in these cities that are meant to be used as long-term rentals. The loans carry a 3% interest per annum for up to 30 years and can only be applied to completed projects in order to alleviate some of the excess inventory in the industry. $Global X MSCI China Real Estate ETF(CHIR)$ $China Resources Land Ltd.(CRBJF)$

8. The PBoC intends to maintain its loose monetary policy throughout 2024 as it aids the government in growing the economy. These policies will likely include more reductions in the reserve requirement ratio (RRR) to increase available funds to borrowers, as well as lowering policy interest rates further. Both tools have been used occasionally in 2023 but so far have had muted impact on real estate demand and new loan creation. $Global X China Financials ETF(CHIX)$

9. China’s technology giants are looking to wean themselves of microchips by Nvidia as a result of the ongoing export restrictions placed by the Biden administration. Alibaba and Tencent have opted to forgo Nvidia’s lower-powered artificial intelligence (AI) chips meant to skirt US export restrictions in favor of locally made chips from Huawei. Baidu, another leader in AI in China, also decided to go with Huawei chips instead of Nvidia. $Alibaba(BABA)$ $Alibaba(09988)$ $TENCENT(00700)$ $Tencent Holding Ltd.(TCEHY)$ $Baidu(BIDU)$ $BIDU-SW(09888)$

10. Tesla China is cutting the price of its popular models in an effort to retain market share in the world’s largest and most competitive electric vehicle market. The Model 3 will be 6% cheaper at RMB 245,900 ($34,633) and the Model Y will drop 2.8% to RMB 258,900 ($36,465). Other models also saw price cuts of 2.1% to 3.9%. The company grew China sales by 15.7% in December to 75,805 units, bringing to 603,664 units in total last year’s deliveries. $Tesla Motors(TSLA)$

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