2023 China’ official GDP figure is growth 5.2% yoy, as reported today.
The caveat is that the growth is in RMB terms. However, due to RMB devaluation, GDP in USD terms is flat for 2 years.
2021 GDP in RMB: 114,923.7 bn
2023 GDP in RMB: 126,058.2 bn
2021 average FX: 1 USD = 6.4529 RMB
2023 average FX: 1 USD = 7.0742 RMB
2023 vs 2021 GDP in RMB terms grew by 9.7%, or 4.7% annually;
while RMB vs USD dropped by 9.6%, or 4.7% annually.
So GDP in USD terms is flattish for 2 years.
2023 China has 9.02 mn new born, a record low. Birth rate is 6.39‰ (per 1000 people).
In Japan, it is estimated to have 726,416 new borns in 2023, also a record low.
Strict covid control had negative impact on birth rate. And the remote working culture seems very different in Asia vs. say the US. There is almost no remote working in China. And I don’t think remote working in Japan is mainstream. Remote working seems to be very good to raise kids.
How did average price change?
Average price per sqft for 2 bedrooms dropped ~17% in 2009 and ~4% in 2010.
Overall average price per sqft looks slightly down / rather flattish in 2010 across all types.
Difference across areas is huge – certain areas can continue to drop over 10% in 2010.
Source: https://www.millersamuel.com/files/2011/10/MMR10.pdf
How was median income level?
Median household income level in New York County (Manhattan) in 2010 was $63,188, dropping 7.5%.
Median household income level in New York State in 2010 was $49,780, slightly dropping.
A 118 sqm 2-bedroom home (or 1,270 sqft), with average price per sqft of $1,097, is equivalent to 22x a median Manhattan family’s annual income in 2010, or 28x a median NY state family’s annual income in 2010.
Monthly median income from a Manhattan household can buy 4.8 sqft, or 0.446 sqm, at average 2-bedroom price.
Source: Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MHINY36061A052NCEN
Source: Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MEHOINUSNYA646N
Another source for median household income is here, from nyc.gov: https://www.nyc.gov/assets/planning/download/pdf/data-maps/nyc-population/acs/house_income_nyc_boro_06_10.pdf
Employee counts at the end of 2020, 2021, 2022:
Their R&D expenses combined is likely to be similar as Tesla’s R&D expenses in 2023, or ~$4bn.
CapEx (rmb, mn) in 1H 2022, 2H 2022, 1H 2023:
Despite a macro downturn, Nio is spending more in capex.
Nio’s capex is now 26% of its revenue in 23H1; XPEV capex has come down a bit to 16% of revenue; Li Auto had the best ratio at 5.4% of revenue in 23H1.
The trio has spent 18bn rmb in capex from H2 2022 to H1 2023, or ~$2.5bn in usd.
To compare, Tesla has spent $7.8bn in capex during the same period; Rivian spent $1.1bn and Lucid spent $1bn.
While Tesla and Li Auto’s gross profits are higher than their capex number, the other 4 companies were burning their own cash.
Middle-east (CYVN, Abu Dhabi based) is backing Nio in 2023, providing ~$3bn net new funding to Nio.
EU (Volkswagen) is backing Xpev in 2023, providing ~$700mn financing to Xpev.
Source: https://assets.jpmprivatebank.com/content/dam/jpm-pb-aem/global/en/documents/eotm/outlook-2024.pdf
Some macro notes
Based on official data. Mutual funds can be several types: equity, debt, money market, QDII (foreign), mixed etc.
Therefore, “equity + mixed” types should represent the domestic rmb equity market mutual fund sizes.
The mutual fund size peaked in 2021 and kept dipping in 2023.
On Monday, Feb 8, Tesla announced it bough $1.5 billion bitcoin and would accept it as a payment method soon.
A few takeaways:
1/ There will be more companies using bitcoin to manage their cash, adding to the demand for it.
2/ Bitcoin as a payment method will be more mainstream. Now people not only can rely on selling it to the market, but maybe can buy a Model Y. The future question would be – what will the “economy” look like on Mars? I bet Bitcoin will be important.
Questions remain –
How Tesla is gonna price its cars? in fixed Bitcoin? that will cause a collision with USD, etc. as Bitcoin is volatile on a daily basis.
HK’s Hang Seng Index will incorporate Chinese internet giants Alibaba, Xiaomi and Meituan Dianping – companies with dual-class or equivalent structures, starting from August, with a weighting cap of 5%. The tech trio are also eligible to join the Hang Seng China Enterprises Index. The Hang Seng is tracked by $20 billion of exchange-listed products globally and $8 billion of local retirement plans, the index provider said in a consultation paper in January. // FT | Hang Seng Indexes
On May 18, HeyTea 喜茶 announced the roll-out of its first artificial meat product, partnering with Starfield 星期零. The 未来肉芝士堡 is priced at ¥25. // 36kr | WeChat
Before HeyTea, its competitor Naixue’s Tea also partnered with Starfield on artificial meat burger last November. Last month, Starbucks and KFC in China launched their artificial / plant-based meat products. // Sina | 36kr
ByteDance is marching into automobile sector with plans to integrate Douyin and Toutiao into cars. The research and development (R&D) team for the Internet of Vehicles (IoV) team are former employees of smartphone maker Smartisan 锤子手机, who joined the company after ByteDance acquired Smartisan (team & patents) in early 2019. // 36kr | kr-asia
Chinese black-box doll retailer Pop Mart 泡泡玛特 has raised more than $100 million in funding from China Renaissance and Loyal Valley Capital in what is expected to be its last round before an IPO. // avcj | 36kr
On April 17, China 2020 Q1 GDP data is released. China’s economy shrank 6.8% in the first three months of 2020 compared with a year earlier, the first such contraction since Beijing began reporting quarterly gross domestic product in 1992. // WSJ
On April 15, China cut the benchmark interest rate for the second time this year, lowering the medium-term lending facility (MLF) for financial institutions to 2.95%. The one-year loan prime rate (LPR), based on banks quotations, was lowered by 20 basis points (bps) from 4.05% to 3.85%. // Reuters | PBOC
China’s central bank has introduced a homegrown digital currency across four cities as part of a pilot program. Internal tests of the digital currency are being conducted in four large cities around China—Shenzhen, Suzhou, Chengdu and Xiong’an, a satellite city of Beijing. // WSJ
As China is reopening its economy, getting consumers to spend is one of the key initiatives. Many cities collaborate with Alipay to give residents discount coupons for various needs. Wuhan, which reopened on April 8, on April 17 announced that it is going to offer coupons worth of 2.3 billion RMB for restaurant, shopping malls, grocery stores and other cultural/sports spendings. // cnbeta
Things that pushed the market upward:
STAT – Early peek at data on Gilead coronavirus drug suggests patients are responding to treatment
White House – Reopening guideline
Texas Tribune – Texas to restart the economy, loosens some restrictions