Weekly Highlights of Global Investment | Issue 82,August 10,2024

Brief

Tesla Suspends Global Factory Plans, Focuses on Expanding Charging Network; HP to Move 70% of PC Production Out of China Within Three Years; Offshore Renminbi Breaks 7.1 Mark Against the Dollar；Fortune Global 500 for 2024 Revealed: Walmart Remains World's Largest Company; Infineon's largest silicon carbide power semiconductor fab opened in Malaysia with mass production expected in 2025; Foxconn Zhengzhou Plant Expansion and Recruitment for iPhone 16 Production and New Energy Vehicle Projects; The new building of McDonald's China Science and Technology Research and Development Center officially opened; BYD Opens First Store in Poland; Toyota Costa Motors is investing INR 200 billion to expand its operations in Maharashtra; Singapore coatings brand Nippon Asia-Pacific R&D Innovation Center officially opened in Pudong, Shanghai; France's Sanofi has confirmed that it will invest 1.3 billion euros to expand its insulin production site in Germany.

Policy and Industry  Dynamics

Tesla Suspends Global Factory Plans, Focuses on Expanding Charging Network

On August 7, it was reported that Tesla has decided to suspend its plans for building a factory in Thailand and will instead focus on expanding the local charging network. Sources indicate that not only has the Thailand factory plan been put on hold, but Tesla has also canceled all new factory projects, including potential ones in Thailand, Malaysia, and Indonesia. Tesla is now concentrating on the operations of its existing factories in China, the U.S., and Germany. In addition to expanding its Supercharger network in Thailand, Tesla plans to promote its vehicles in the country, including showcasing the all-electric Cybertruck at a tour in Thailand before September 2024.

HP to Move 70% of PC Production Out of China Within Three Years

On August 7, reports revealed that HP is considering relocating more than 50% of its personal computer (PC) production from China and setting up a "backup" design center in Singapore. An insider noted that HP has even set an internal target to shift 70% of its laptop production outside of China within two to three years. Currently, at least five of HP's suppliers are building new manufacturing plants or warehouses in Thailand, with two of them expanding capacity in response to HP's requests since the beginning of this year.

Shell BYD JV establishes new company with $100 million registered capital

August 6, Shell (Shenzhen) New Energy Technology Co., Ltd. was established, the legal representative of Liang Ruyi, registered capital of 100 million yuan, the scope of business including investment activities with its own funds, intelligent control system integration, electric vehicle charging infrastructure operations, energy storage technology services, charging pile sales, auto parts and accessories retail. Shareholding panoramic penetration map shows that the company is wholly owned by Shenzhen Shell BYD Electric Vehicle Investment Company Limited, the latter by Shell (China) Limited, BYD Automotive Industry Company Limited shareholding of 80%, 20% respectively.

Japan's Top Three Automakers See Sales Decline in China in July

Recently, the July sales figures for Japan's top three automakers in China were released, showing declines across the board. Toyota sold 143,400 vehicles, down 6.1% year-over-year. Honda sold 52,567 vehicles, a significant decrease of 41.4%. Nissan sold 47,102 vehicles, a drop of 20.8%. Toyota and Honda have seen a sales decline for six consecutive months, while Nissan has experienced a four-month decrease.

Offshore Renminbi Breaks 7.1 Mark Against the Dollar

On August 5, the offshore renminbi (RMB) broke the 7.1 level against the U.S. dollar, rising more than 600 points within a day, reaching its highest level since December 29, 2023. Industry experts attribute this significant rise over the past two trading days to the weak U.S. non-farm payroll data for July released on the evening of August 2. Fan Ruoying, a researcher at the Bank of China Research Institute, also noted that the RMB's strong performance is partly due to its linkage with the Japanese yen. This year, the exchange rate trends of the RMB and yen have been somewhat similar, with both currencies having significant differentials against the dollar. The recent sharp appreciation of the yen has also indirectly boosted the RMB's exchange rate.

Foxconn Expands in Zhengzhou Amidst Shifts from Southeast Asia

In late July, Foxconn announced a substantial investment of approximately 1 billion yuan in expanding its operations in Zhengzhou, aiming to establish a new headquarters and bolster its involvement in new energy sectors such as electric vehicles, energy storage batteries, digital healthcare, and robotics. This move comes amidst a significant recruitment drive at its Zhengzhou plant, which is gearing up for the production of the iPhone 16. The surge in demand has led to hourly wages reaching 25 yuan and bonuses of up to 7,500 yuan for those completing three months of work, with over 50,000 new employees expected to be hired soon. Concurrently, Foxconn has made strides in the automotive sector with the establishment of Foxconn New Energy Vehicle Industry Development (Henan) Co., Ltd., a wholly-owned subsidiary focused on auto parts, new materials, and vehicle sales. This shift back to China is notable given recent challenges with labor quality and infrastructure in India and Vietnam, where Foxconn had previously relocated parts of its production. Issues such as lower education levels among Indian workers and incomplete supply chains in Vietnam, which necessitate importing components from China, have led to increased costs and inefficiencies. As a result, Foxconn is reinforcing its operations in China to better support its supply chain and meet the high demands of its production lines.

WeChat Pay Integrates with Hong Kong's Octopus Taxi Payment Network

On August 5, Tencent announced that WeChat Pay HK has been integrated with Hong Kong's Octopus mobile payment terminals installed in taxis. This update allows Hong Kong residents and mainland Chinese visitors to pay using WeChat by scanning the Octopus mobile payment terminal's QR code, supporting payments in both Hong Kong dollars and RMB without transaction fees. Taxi drivers in Hong Kong can enter the fare into the commercial Octopus app, which then displays the amount and payment QR code. Currently, 25,000 taxi drivers are using the commercial version of the Octopus app to process payments.

Fortune Global 500 for 2024 Revealed: Walmart Remains World's Largest Company

On August 5, the 2024 Fortune Global 500 list was announced. The total revenue of the companies on this year's list amounts to approximately $41 trillion, about one-third of the global GDP, showing a slight growth of 0.1% from last year. Walmart has maintained its position as the world's largest company for the eleventh consecutive year. Amazon has returned to the second spot, while China's State Grid Corporation remains in third place. Saudi Aramco and China Petroleum & Chemical Corporation (Sinopec) are ranked fourth and fifth, respectively.In the profitability rankings, U.S. tech giants Apple, Alphabet (Google's parent company), and Microsoft are the second, fourth, and fifth most profitable companies, respectively. Among Chinese companies, Industrial and Commercial Bank of China (ICBC), China Construction Bank, and Agricultural Bank of China made it into the top ten for profitability, with ICBC reporting profits exceeding $51.4 billion.

MNCs Global Investment

Infineon's largest silicon carbide power semiconductor fab opened in Malaysia, with mass production expected in 2025

On August 8, Infineon announced that the first phase of its new fab project in Gulin, Malaysia, officially started operations and is expected to achieve mass production in 2025. When completed, the plant will be the world's largest 200 mm silicon carbide power semiconductor fab.Infineon pointed out that the first phase of the plant took only 13 months from construction to completion, which is already ahead of schedule.It is understood that the first phase of the plant, with an investment of up to 2 billion euros, will focus on the production of silicon carbide power semiconductors and cover the production of gallium nitride epitaxy. The first phase of the new fab will create 900 jobs. Overall, the new fab will create up to 4,000 jobs. In fact, as early as 1973, Infineon started its business operations in Malacca and entered the Malaysian market. In 2006, Infineon opened its first front-end fab in Asia in Gulin. Currently, Infineon employs more than 16,000 highly skilled employees in Malaysia.

Foxconn Zhengzhou Plant Expansion and Recruitment for iPhone 16 Production and New Energy Vehicle Projects

In late July, Foxconn (Hon Hai Precision Industry Co., Ltd.) announced an investment in building a new headquarters in Zhengzhou with a total investment of approximately 1 billion yuan. The expansion aims to develop new energy-related businesses, including electric vehicles, energy storage batteries, digital healthcare, and robotics. With the upcoming release of the iPhone 16, Foxconn’s Zhengzhou plant is experiencing a peak in recruitment. According to recruitment agencies, the demand for workers on the production lines has surged, with hourly wages reaching up to 25 yuan and bonuses of up to 7,500 yuan for completing three months of work. It is anticipated that over 50,000 new employees will join within the next two weeks. Foxconn’s automotive sector expansion is also progressing. In early 2024, Foxconn New Energy Vehicle Industry Development (Henan) Co., Ltd. was established, registered in Zhengzhou Airport Economic Zone, Henan. This new company is 100% owned by Foxconn’s New Business Development Group Co., Ltd., and its business scope includes auto parts, new materials, and vehicle sales.

Singapore's Perrelli Group joined hands with Mingyu Travel and Hyatt Hotels to open four hotels in Tianjin

Tianjin Pengli Mingyu Hotel Group opened on August 7. Pengrelli Mingyu Hotel Group is a collaboration between Singapore Pengrelli Group and Mingyu Business Travel, Hyatt Hotels Group under the development concept of "rooted in China, with a global view" layout of four hotels, including Tianjin Pengrelli · Hyatt Hotel, Tianjin Pengrelli Hotel, Tianjin Pengrelli Mingyu Hotel. The hotel group is managed by Mingpeng Hotel Management Company, a joint venture between Mingyu Business Travel and Pengrelli Group.

SAIC Motor Plans to Establish Latin American Hub in Mexico

On August 7, SAIC Motor's MG brand announced plans to establish a Latin American hub in Mexico, which will include an automotive factory and a research and development center. Zhang Wei, head of MG's Mexican operations, stated that this move will not only facilitate local vehicle production but also generate targeted market intelligence for Latin America. Additionally, the company plans to introduce its high-end IM brand to the Mexican market.

Hubei's First Hydrogen Energy Off-Grid Ultra-Fast Charging Station to Be Established

On August 7, it was announced on Chutian Expressway's official WeChat account that Hubei's first hydrogen energy off-grid ultra-fast charging station project was successfully signed in Wuhan on August 6. This project is a collaboration between Chutian Expressway, a subsidiary of Hubei Communications Investment Group, Shanghai Reborn Energy Group Co., Ltd., and Hydrogen Energy Technology (Shanghai) Co., Ltd. According to the strategic cooperation agreement, the three parties will work together to set up hydrogen energy off-grid ultra-fast charging stations along Hubei's expressways, providing ultra-fast charging services for new energy vehicles and accelerating the commercialization of hydrogen energy off-grid ultra-fast charging stations.

The new building of McDonald's China Science and Technology Research and Development Center was officially opened

On August 6, the new building of McDonald's China Science and Technology Research and Development Center was officially opened. The new building, located in Baijiahui Innovation Community, Xuanwu District, Nanjing, will serve as the research headquarters of McDonald's China, which will house more than 450 technical experts and provide a strong impetus for the digital development of McDonald's "self-research and innovation". Within five years, McDonald's China plans to invest 4 billion yuan in digital research and development and innovation, to better serve customers, restaurants and enterprises, and to help the industrial upgrading and new quality productivity development of the catering industry.

BYD Opens First Store in Poland

On August 6, BYD opened its first dealership in Poland, located in the capital city, Warsaw. The opening ceremony was attended by BYD Executive Vice President and President of BYD Americas, Li Ke; General Manager of BYD's European Automotive Sales Division, Shu Youxing; and representatives from Cichy-Zasada, Poland's largest automotive dealership group. The event also featured the delivery ceremony for the first BYD Seal vehicles.

Toyota Costa Motors is investing INR 200 billion to expand its operations in Maharashtra

On August 5, Toyota Costa Motors (TKM) planned to set up a new manufacturing plant in the Indian state of Maharashtra with an investment of about INR 200 billion ($2.38 billion). This significant investment underscores TKM's commitment to expanding its presence and driving sustainable mobility solutions in India. The Memorandum of Understanding (MoU) signed with the Maharashtra government reflects TKM's intention to strategically upgrade its manufacturing capacity, complementing its existing operations in Karnataka with two manufacturing units in Bidadi, near Bangalore.

Singapore coatings brand Nippon Asia-Pacific R&D Innovation Center officially opened in Pudong, Shanghai

On August 3, the groundbreaking ceremony of Nippon Asia-Pacific R&D Innovation Center and Nippon Magic Paint Packaging Base was held in Shanghai Pudong New Area. As an important part of Nippon's global R & D and manufacturing system, the project will fully ensure product innovation, R & D and landing, further deepen Nippon's core strategy of "in China, for China", and practice the firm commitment of "in China, for the world" to accelerate the vigorous development of new quality productivity in the painting industry. In 2020, Nippon Asia-Pacific R&D Innovation Center and Nippon Magic Paint Packaging Base project signed to settle in Shanghai Pudong New Area Jinqiao Economic and Technological Development Zone, committed to building an efficient innovation ecosystem, is expected to be completed in 2026.

The US Marriott International Group introduced the W hotel brand to Hangzhou

Marriott International announced on August 3 that it has signed an agreement with Zhongan Business Group, part of China New City Group, to bring the W Hotel brand to Hangzhou. W Hotel Hangzhou is expected to open in 2031, located in Qianjiang Century City, Hangzhou's new Central Business District, northwest of the intersection of Minhe Road and Li Yi Road, is expected to become a new benchmark in the luxury hotel industry in Hangzhou. Currently, Marriott International has more than 70 luxury hotels in Greater China. The signing of W Hotel Hangzhou will further expand the Group's growing luxury business footprint, while also promoting Hangzhou as one of the top destinations for luxury travelers in China.

France's Sanofi has confirmed that it will invest 1.3 billion euros to expand its insulin production site in Germany

French pharmaceutical giant Sanofi announced on August 2 that it has confirmed that it will invest 1.3 billion euros to expand its insulin production site in Frankfurt, Germany. Sanofi said the expansion would take place at the company's existing bio park, covering about 36,000 square meters, the equivalent of five football fields. It will be operational by 2029. The project is supported by the German national government and the government of the state of Hesse and is awaiting approval from the European Union. Sanofi is one of the world's leading insulin producers.

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