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Here’s 10 Things You Might Have Missed in China Last Week (1/15 to 1/19):

1. Baidu's Military Connection Raises Sanction Concerns

Reports indicate that China’s military has linked its AI program with Baidu’s ChatGPT-like service, sparking fears of potential US sanctions due to its involvement in state-backed military projects. Baidu denies affiliation with the People's Liberation Army, but as a leading AI firm in China, it may face sanctions from the US and its allies. $Baidu(BIDU.US)$ $BIDU-SW(09888.HK)$ $Chatgpt Concept(BK1347.HK)$ $ChatGPT(BK2136.US)$

2. Beijing Stock Exchange Launches Corporate Bond Trading

The Beijing Stock Exchange commenced trading in corporate bonds of three state-backed investment companies on January 15. The move aims to provide domestic investors with alternatives amid interest rate cuts and lackluster stock performance. Chinese investors, perceiving stocks as risky, often favor fixed-income investments. $KRANESHARES BLOOMBERG BARCLAYS CHINA BOND INCLUSION INDEX ETF(KBND.US)$

3. BYD's $14 Billion Investment in Intelligent Vehicles
BYD Company, the world's largest EV manufacturer, is investing $14 billion in "whole vehicle intelligence." The company introduced Xuanji, an intelligent architecture for developing smart electric cars. This significant investment aligns with China's potential leadership in adopting autonomous vehicles, including flying cars. $BYD Company Limited(002594.SZ)$ $BYD COMPANY(01211.HK)$

4. Private Equity Expected to Return to China in 2024

Bain & Co predicts a return of private equity (PE) investors to China in 2024 after a drop in mergers and acquisitions (M&A) in 2023. PE firms, awash with cash, see an opportunity in China's expected corporate profitability increase. Their granular approach to investment may reveal prospects not apparent to stock market investors. $HKEX(00388.HK)$ $HSBC HOLDINGS(00005.HK)$

5. Bridgewater Associates Doubling China Exposure

Bridgewater Associates is raising $281 million for its China-focused investments, aiming to double its exposure in the country. Despite a challenging market, Bridgewater's professional management has generated above-par returns, offering Chinese investors a hedge against economic weakness and a struggling real estate market. $iShares China Large-Cap ETF(FXI.US)$ $Invesco China Technology ETF(CQQQ.US)$

6. Continued Decline in China's Second-Hand Home Prices

Second-hand home prices in China continue to fall, particularly as buyers remain cautious amid real estate market challenges. Property prices in 1st tier cities fell 1.1% month-on-month and were down 3.5% year-on-year in December. Declines were more pronounced in 2nd and 3rd tier cities. $Global X MSCI China Real Estate ETF(CHIR.US)$ $COUNTRY GARDEN(02007.HK)$ $CG SERVICES(06098.HK)$ $EVERGRANDE(03333.HK)$

7. China's December Retail Sales Growth Below Expectations

Retail sales in China grew 7.4% in December, reaching $614 billion, but fell below the expected 8%. Full-year 2023 retail sales amounted to $6.64 trillion, up 7.2%. Online retail sales accounted for a record high of 32.7% of total retail sales at $2.17 trillion. $Meituan(ADR)(MPNGF.US)$ $MEITUAN-W(03690.HK)$ $Meituan ADR(MPNGY.US)$

8. China's 2023 GDP Growth at 5.2%

China's GDP grew by 5.2% in 2023, supported by strong retail sales and increased government spending on infrastructure projects. Expectations for 2024 are 5% to 5.2%, with Beijing increasing support through lower interest rates and higher liquidity via lower bank reserve requirement ratios. $iShares MSCI China ETF(MCHI.US)$ $Kraneshares Tr Bosera Msci China A Sh Etf(KBA.US)$

9. Investigation Into Shein's Data Sharing with US Regulators

China's Cyberspace Administration will investigate Shein for sharing data with US regulators. The review focuses on Shein’s data handling concerning its Chinese business partners, suppliers, and employees. This follows Shein’s application for a US listing, emphasizing the need to address data issues before an IPO. $BABA-SW(09988.HK)$ $Alibaba(BABA.US)$ $PDD Holdings(PDD.US)$ $Pinduoduo Concept(BK0724.SH)$ $Cainiao Smart Logistics Network Limited(810537.HK)$

10. Anticipated Decline in China's New Energy Vehicle Sales

China's new energy vehicle (NEV) sales are expected to decline by 15.3% in January compared to December. Retail sales of passenger vehicles could reach 2.2 million units, a 6.5% decline from December. NEV sales are expected to be 800,000 units, down 15.3% month-on-month, with a 36.4% penetration rate. $GEELY AUTO(00175.HK)$ $GEELY AUTOMOBILE H(GELYY.US)$ $NIO Inc(NIO.US)$ $NIO Inc. USD OV(NIO.SG)$ $NIO-SW(09866.HK)$ $XPeng(XPEV.US)$ $XPENG-W(09868.HK)$ $Tesla(TSLA.US)$ $LI AUTO-W(02015.HK)$ $Li Auto(LI.US)$
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