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LVMH Is Shifting Out of Hong Kong as Chinese Shoppers Stay Home

This article from Bloomberg may be of interest to subscribers. Here is a section:

LVMH is shifting resources out of Hong Kong, reflecting waning interest in what used to be Asia’s premium shopping hub as mainland Chinese consumers switch to shopping at home.

The top global luxury conglomerate wants to focus more of its investment in burgeoning metropolises such as Shanghai, Chengdu, Guangzhou and Shenzhen as Hong Kong loses its relevance in the Greater China region, according to people familiar with the matter, who asked not to be identified discussing private deliberations. 

To that end, it’s already moved the regional headquarters of some brands, including the group’s local head office, to Shanghai, and relocated some senior executives to the mainland, the people said.



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CATL Says New Super Strong Battery May Power Electric Flight

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China’s Contemporary Amperex Technology Co. Ltd., known as CATL, unveiled its strongest battery to date Wednesday, saying that it could one day be used to power electric aircraft.  

The battery, which loads more power into a smaller package, has an energy density of 500 watt-hours per kilogram, CATL’s Chief Scientist Wu Kai said during a presentation at the Shanghai auto show. CATL’s most recent battery, called Qilin, has an energy density of 255 Wh/kg and can power an electric vehicle for 1,000 kilometers (620 miles) on one charge. 

The technology, which CATL calls a condensed state battery, is potentially a breakthrough that will help electrify sectors wed to fossil fuels because existing batteries are either too heavy or unsafe. Still, questions remain about the materials it will use, its cost and ultimate market impact.
 



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Buffett Praises BYD and TSMC After Selling Shares of Both Firms

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Warren Buffett called electric-car maker BYD Company Ltd. “extraordinary” and said chip manufacturer Taiwan Semiconductor Manufacturing Co. is a “fabulous enterprise.” That hasn’t stopped him from selling shares of both firms.

“We’ll find things to do with the money that I’ll feel better about,” the Berkshire Hathaway Inc. chairman and chief executive officer said of BYD in an interview with CNBC in Tokyo Wednesday. He said Berkshire wasn’t in a hurry to reduce that stake after recently trimming its holdings of BYD H shares to 10.9% from 11.13%, according to a filing this week.

The billionaire investor took credit for Berkshire’s investment in TSMC amid speculation that one of his investing deputies picked the stock. He said the decision to reduce its stake in the business by 86% in the fourth quarter — which could have fetched $3.7 billion assuming the shares were sold at the average price over the period — resulted from concerns over geopolitical tensions between China and Taiwan, conditions he described as being outside of the company’s control.

“I re-evaluated that part of it,” Buffett said. “I didn’t re-evaluate the business, the management, or anything of the sort.”



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Political moves heat up as Indonesian parties hunt for presidential, vice-presidential candidates

This article from the Strait Times may be of interest to subscribers. Here is a section: 

The PDI-P, which secured 22 per cent of parliamentary seats in 2019, is the only party that can nominate candidates without having to ally with other parties. Both Mr Widodo and Mr Ganjar are members of PDI-P.

For Mr Ganjar, the main obstacle to being named PDI-P’s presidential candidate is his own party, said Padjadjaran University political communication expert Kunto Adi Wibowo.

“If Ganjar wants the nomination, PDI-P should be the one to nominate him. He doesn’t want to quit his own party. But will Megawati (Sukarnoputri) give the ticket to Ganjar while she is grooming Puan (Maharani)?,” he said.

Ms Megawati is PDI-P’s chief, while Ms Puan, her daughter, is the House of Representatives Speaker and ranks low in electability rating polls.

Prof Firman noted that both PDI-P and Gerindra may finally have to strike a “tough deal” if they cannot come up with their nominees amid the constant rise in popularity of Dr Anies, given the solidity of his support. 

“If they are forced by pressing circumstances, they will make a deal and resort to the most popular candidates,” he said.  



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Star Banker's Disappearance Unnerves China's Business Elite

This article from Bloomberg may be of interest. Here is a section: 

Increasingly in China, a suddenly absent boss has come to signal a crackdown or investigation by authorities. In many cases, the person is said to be “assisting” graft probes.

Publicly listed companies typically report they have lost contact with the executive and need to make their own inquiries into what happened within the country’s opaque legal system.

A suave and outspoken dealmaker, Bao built China’s pre- eminent tech-focused investment bank. He convinced a Jack Ma-backed company to become a cornerstone investor when his firm went public in 2018 and has been the go-to banker for the biggest tech stars. 

Bao is among China’s “western-educated individuals with lots of connections with the global financial elite,” said Victor Shih, an associate professor at University of California San Diego who specializes in China’s banking policies. “We don’t see those types suddenly running into such serious trouble that
often.”

Bao studied English literature at China’s prestigious Fudan University and received a master’s degree in business and economics from the BI Norwegian School of Management in 1995. He once said it was his mission to “participate in the value creation of the greatest entrepreneurs” in China. 

A former banker at Morgan Stanley and Credit Suisse Group AG, Bao founded China Renaissance in 2005, making a name for the firm by brokering tough mergers that led to the formation of ride-hailing service Didi Global Inc. and food-delivery giant Meituan. 



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Chinese-Owned Rival to Shein Makes Splashy Super Bowl Debut

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PDD Holdings Inc.’s service, which like Shein has gained a reputation for cut-rate pricing and fast delivery, ran two 30-second spots featuring a trendy shopper twirling and dancing to phrases like “Cha-ching! I feel so rich, oh yeah.” PDD, formerly known as Pinduoduo, said it’s also giving away a total of $10 million to users via online sweepstakes.

Temu launched in September and rapidly scaled Apple’s US app store. It’s now considered a serious competitor to Shein, the fast-fashion phenomenon that’s also fired up American shoppers. But PDD, which plans to launch Temu in Canada as soon as this month, offers a broader range of goods from pet supplies to groceries. 



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What the War in Ukraine Says About Deterring China

This article by Max Hastings for Bloomberg may be of interest. Here is a section: 

Leaders go to war because they believe they can win, as did Putin in Ukraine. It is entirely feasible to reinforce both Taiwanese and US capabilities in the region, to a point at which Beijing must doubt its ability to prevail in the necessary amphibious assault, a perilous and difficult undertaking.

The Ukraine experience has rewritten in lights a towering lesson of history: To deter aggression, there is no substitute for credible armed forces. We in the UK and the rest of the West are supremely fortunate that America still possesses these, despite the caveats about the Navy’s vulnerabilities in the Pacific.

Yet more important even than weapons is will. Many people, sometimes including myself, have doubted and continue to doubt whether, if China does invade Taiwan, the US and its allies will undertake military action in response. This is a reprise of the 1950 Korean uncertainty, with one important difference: 73 years ago, there was nothing in South Korea of material value to the West; its armies fought instead to defend a principle. In modern Taiwan, by contrast, advanced semiconductors represent an industry of towering importance both to China and ourselves.



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Made-in-China Cars Are Primed to Conquer the Global Market

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“To fight the Chinese, we will have to have comparable cost structures,” Stellantis NV CEO Carlos Tavares said on Dec. 19, speaking to reporters at a powertrain plant in Tremery in northern France. “Alternatively, Europe will have to decide to close its borders at least partially to Chinese rivals. If Europe doesn’t want to put itself in this position, we need to work harder on the competitiveness of what we do.”

And

The growth in the supply chain in China has also kept pace with car manufacturing. Domestic companies now make almost all parts, including those they used to import until about a decade ago, such as high-strength steel and reinforced fiberglass. As a result, China ran a trade surplus in vehicles and vehicle parts for the first time in 2021. The assembly lines still depend on advanced machines from Japan and Germany, though.

“There seems to have been a step change,” Dyer says. “The long-term trend is for increasing sales of Chinese brands around the world.”



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Morgan Stanley IM Says the Decade of Emerging Markets Has Begun

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“Every decade, there is a new leader in the market. In the 2010s, it was US stocks and mega-cap tech,” Kandhari said in a phone interview. “Leaders of this decade can clearly be emerging-market and international stocks.” Morgan Stanley IM has $1.3 trillion in assets under management.

The asset class has had a strong start to the year, with the MSCI emerging-markets index soaring 8.6% compared with a 4.7% advance for the US benchmark. The gains come as China’s pullback from its strict Covid Zero policy brightens the economic outlook, while investors position for the end of aggressive central bank interest-rate hikes. Many also still see US stocks as expensive, with those in emerging-markets trading at a nearly 30% discount.

There’s a growing disconnect between US’s shrinking share of the global economy and the size of its stock market capitalization, Kandhari said. Along with fund allocations to emerging-markets that are well below historical averages and inexpensive currencies, that gives them a lot of room to outperform, she said.

“What really drives this asset class is the growth differential, and that growth differential of the EM is improving relative to the US,” she said.



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The Future of Uncertainty

Thanks to a subscriber for this transcript of 3rd Atal Bihari Vajpayee Memorial Lecture delivered by Ambassador Bilahari Kausikan of Singapore in New Delhi yesterday. Here is a section: 

First, no country can avoid engaging with both the US and China. Dealing with both simultaneously is a necessary condition for dealing effectively with either. Without the US there can be no balance to China anywhere; without engagement with China, the US may well take us for granted. The latter possibility may be less in the case of a big country like India, but it is not non-existent.

Second, I know of no country that is without concerns about some aspect or another of both American and Chinese behaviour. The concerns are not the same, nor are they held with equal intensity, and they are not always articulated – indeed, they are often publicly denied -- but they exist even in the closest of American allies and in states deeply dependent on China.



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