Brief
New Zealand will be included in the list of China’s visa-free countries; The US inflation rate in June dropped to a 3 year low of 3%; EU imposed additional tariffs on Chinese made EVs; European companies compete for Chinese EV factories with investment already made; Taiwan’s electricity crunch may impact the global semiconductor industry; Turkey plans to impose a 40% tariff on cars imported from China; 9 of China’s departments issue policies on e-commerce exports; Freight rates skyrocket amongst the chaos of the global shipping scene; Amazon and Vrio launching satellites to provide internet to 7 South American countries; Foxconn and Nokia reveal plans to produce 5G devices in Vietnam; ByteDance invests $2.1 billion to build a regional artificial intelligence center in Malaysia; Supermicro, Datasection, Foxconn, KDDI, and Sharp collaborate to create a large-scale Asian AI data center; Keshun joined hands with VinGroup to build Vietnam’s first modern battery gigafactory; BYD opens its first store in the Caribbean with plans to enter more overseas markets this year; Volvo shifts EV Production to Belgium in Anticipation of new EU Tariffs; Morocco is finally chosen by Gotion High Tech as the location of their new 20 GWh gigafactory; Hitachi Energy shares plans to invest $4.5 billion into electricity grid; Samsung’s global distribution center opened in Suzhou Park on June 7th; China Unicom opened its first branch in Saudi Arabia.
Policy and Industry Dynamics
New Zealand Will be Included in the List of Countries with China's Visa-Free ExemptionOn June 13th, China announced that it would include New Zealand as a visa-free country allowing tourists to visit without a visa. Half an hour after the announcement, the search rate of China-related keywords on some OTA platforms increased by 65% compared to the previous day due to New Zealand tourists. Ctrip data showed that since the beginning of this year, the top 10 popular destinations for New Zealand tourists to China are Shanghai, Beijing, Guangzhou, Chengdu, Shenzhen, Hangzhou, Chongqing, Xi'an, Nanjing and Changsha. Qin Jing, vice president of the group, said that New Zealand and China are important destinations and source countries for each other. Since December last year, direct flights between China and Singapore have returned to 2019 levels, which have supported the growth of tourists from both sides.US inflation fell to a 3 Year Low of 3% as Prices Ease UpThe United States Bureau of Labor and Planning reported on Wednesday, June 12th that the inflation rate dropped to 3% in June, the lowest it’s been since early 2021. The inflation rate hadn’t declined to the Federal Reserve’s target of 2%, though it’s still down from the 3.6% of the prior month. However, from May to June the CPI, which excludes volatile items such as food and energy, rose 0.2%, an increase of 0.1% but still not drastic. Despite the bettering inflation rate, the Fed is still considering raising its benchmark rate when it meets in two weeks. Albeit, with prices slowing or even falling across a range of goods and services, economists say the central bank could hold off on what’s expected to be a second hike in September if inflation continues to decline.European Union Imposes Additional Tariffs on Chinese EVsOn June 12th, the European Commission declared that starting from July 4th it will impose extra tariffs of up to 38.1% on imported Chinese electric vehicles. European automakers are facing an influx of lower-priced EVS from Chinese rivals. On average these EVs are 20% cheaper than EU made models, and their share of the EU market has risen from less than 1% in 2019 to 8% in 2024. These tariffs were put into place in hopes of preventing the collapse of European EV manufacturers in the face of such fierce competition. In response, Beijing stated that it would also take measures to safeguard its interests. Several European carmakers have voiced their opinions against these tariffs as well, stating that the EU didn’t need to increase barriers to trade and that the negative effects of the tariffs would outweigh any potential benefits. Chinese car makers are making the best of the situation by investing in European production, as producing in Europe would allow them to avoid having to import cars and therefore avoid the tariffs.European Companies Compete to Attract Chinese EV ProducersOn June 10th, according to Reuters, despite the caution the European governments have shown toward budget chinese electric vehicles flooding their markets, they are engaged in a fierce competition for a share of the manufacturing investment and jobs these EV companies bring. Despite cheaper domestic manufacturing costs, Chinese EV makers such as BYD, Chery Automobile and SAIC Motor are keen on building their brands in Europe to save on shipping costs and potential tariffs. Not only has Volvo started shifting its production to Belgium, but Hungary had secured a factory investment from BYD last year and is negotiating with Great Wall Motor. Likewise, Spain has also secured investment from Chery while several automakers such as Dongfeng have held investment discussions with Rome.Taiwan Energy Crunch May Impact Global Semiconductor IndustryCNBC revealed on June 10th that Taiwan, the world’s semiconductor powerhouse, is not only an energy crunch but a electricity crunch which could possibly affect the global semiconductor industry. TSMC, a Taiwanese company, is the world’s largest manufacturer of advanced chips and it accounts for about 60% of the global foundry revenue. With the recent boom in generative AI, TSMC has become a key supplier to tech giants such as Apple and Nvidia. Taiwan has endured three major outages in the last seven years, with several smaller disruptions in the past year. It relies on imports for over 97% of its energy needs, coming in the form of coal and gas. Due to this reliance, the island is vulnerable to energy supply disruptions. The Atlantic Council’s Webster stated that any energy disruption will slow down chipmaking and raise global semiconductor prices.Turkey Announced a 40% Tariff that Will be Imposed on Imported Cars from ChinaTurkey decided to impose an additional 40% tariff on cars imported from China according to a presidential decision released on June 8th. This tariff will have a minimum of $7,000 per vehicle and be implemented on July 7th. In the statement, the Turkish Ministry of Commerce said that the purpose of imposing tariffs is to increase the market share of domestically produced vehicles and reduce the current account deficit.Nine Departments, Including the Ministry of Commerce of China, Issued Opinions on Expanding Cross-Border E-Commerce Exports and Promoting the Construction of Overseas WarehousesOn June 8, the Ministry of Commerce of China and nine other departments jointly issued opinions on expanding cross-border e-commerce exports and promoting the construction of overseas warehouses: Actively cultivate cross-border e-commerce business entities; Vigorously support the development of cross-border e-commerce enabling industries; Enhance the ability to serve cross-border e-commerce enterprises; Support cross-border e-commerce enterprises to "borrow the sea"; Strengthen the organization construction and talent training of the cross-border e-commerce industry; Increase financial support (smooth financing channels for cross-border e-commerce enterprises); Enhance cross-border fund settlement services; Promote cross-border e-commerce supply chain to reduce costs and increase efficiency; Strengthen the construction of relevant infrastructure and logistics systems; Promote the high-quality development of cross-border e-commerce overseas warehouses; Enhance the logistics support capacity of cross-border e-commerce; Help cross-border e-commerce related enterprises to "go global"; Optimize cross-border e-commerce export supervision; Improve cross-border data management and service levels; Actively carry out the construction of standards and rules and international cooperation; Accelerate the construction of standards in the field of cross-border e-commerce; Improve the level of corporate compliance management; Continue to deepen international exchanges and cooperation.Global Container Shipping is Chaotic and the Liner Punctuality Rate has PlummetedOn June 4th, sources from Video Number revealed that global container shipping has been thrown into chaos with freight rates skyrocketing, port congestion, and container shortages. The congestion in the port of Singapore has reached a record high with the average waiting time for container ships extended to 7 days and the cargo volume has reached 400,000 TEUS. As a result, sea freight rates continue to soar. In the last week of May, Shanghai's export container freight index exceeded 3,000 points, with a cumulative increase of 57% in the past month. At the beginning of the year, the shipping industry had even been laying off employees, stopping routes and dismantling ships, but now its capacity has been completely absorbed by the Red Sea crisis. The global liner schedule reliability rate fell to 52%, down sharply from 65% in the same period last year.Amazon and Vrio Plan to Launch Satellite Internet in South AmericaAmazon and telecommunications firm Vrio announced on June 13th that they plan to jointly launch a satellite internet service in seven South American countries: Argentina, Brazil, Chile, Urugua, Peru, Ecuador, and Colombia. Amazon had already confirmed it’s investment of $10 billion in 2019. Amazon’s Project Kuiper, set to launch mid 2025, will provide internet using 3,236 satellites in low Earth orbit. This is especially important because “around 200 million people in the region have poor, little, or no internet access” according to Vrio’s vice president.Foxconn and Nokia will Produce 5G Devices in VietnamOn June 12th, Nokia insiders revealed that Foxconn will produce Nokia 5G AirScale products in Bac Giang Province, Vietnam according to Global TMT News. Products include the latest generation of massive MIMO AirScale devices for 5G infrastructure. The project will start in July and is expected to ramp up production in September.ByteDance Plans to Invest $2.1 Billion USD in MalaysiaOn June 11th, according to global TMT news, Malaysia's Minister of Trade and Industry Zafrul posted on social media site X that ByteDance plans to invest 10 billion ringgits (about $2.1 billion) in Malaysia to establish a regional artificial intelligence center. Zafrul said ByteDance also plans to invest an additional RM 1.5 billion to expand its existing data center facilities in Johor, Malaysia. He said the additional investment will help Malaysia achieve its target of growing the digital economy to 22.6% of GDP by 2025.Sharp, Supermicro and Others Have Joined Forces to Create a Large-Scale Asian AI Data CenterOn June 11th, according to PR Newswire, Supermicro joined forces with Datasection, Foxconn, KDDI and Sharp to create a large-scale Asian AI data center. Supermicro will work with systems integrator Datasection to develop a total IT rack-scale liquid cooling solution with advanced NVIDIA GPUs for the new data center. In addition, Supermicro plans to build a liquid cooling system with plumbing, water towers, and monitoring equipment. Built on the site of the former Sharp Sakai facility, the new facility will support advanced systems optimized for the NVIDIA AI Enterprise platform and deliver powerful performance for cutting-edge LLM, ML and generative AI applications.Keshun Helped Build Vietnam's First Modern Battery "Super Factory"On June 10th, China Building Waterproof Magazine shared that Keshun Co., Ltd. is joining hands with VinGroup, the largest private enterprise group in Vietnam, to participate in the construction of the VinES battery factory project to help the localized production of electric vehicles in Vietnam. This is the first lithium iron phosphate battery factory in Vietnam, and it has a designed annual production capacity of 5GWh. The factory is mainly used for electric vehicle batteries and energy storage systems to meet the production needs of VinFast’s, a subsidiary of VinGroup Group, new energy vehicles.BYD Opens its First Store in the CaribbeanOn June 10th, according to 36 Krypton news, BYD is rapidly occupying overseas markets. A few days ago, the company opened its first store in the Caribbean and plans to enter 10 new overseas markets by the end of this year.Volvo shifts EV Production to BelgiumOn June 9th New York Times reported that Volvo cars has started to shift production of Chinese-made electric vehicles to Belgium in anticipation of new European Union Tariffs. Volvo, owned by Zhejiang Geely Holding Group Co., was originally planning to halt sales of Chinese-built EVs bound for Europe due to these tariffs before deciding instead to shift production. This would allow the sales of the EVs to continue without being impacted by the tariffs as they would be produced in Belgium rather than imported. The manufacturing of certain Volvo models bound for the United Kingdom could also potentially be moved to Belgium.Gotion High Tech Chooses Morocco as the Location of Their New Battery PlantGotion High Tech Co. Ltd. finally decides Morocco as location of their new 20 GW-hour battery plant according to Electrek News on June 8th. Gotion High-Tech Co. Ltd. is a China-based company that specialized in energy solutions and battery R&D. It had previously announced the new 20 GWh plant in conjunction with InoBat, a Solvak EV battery startup, however the intended location remained unknown until now. The factory had an initial estimated price of $1.3 billion, however, Gotion recently revealed plans to expand the factory to hold a 100 GWh annual battery capacity instead bumping the total investment to about $6.5 billion.Hitachi Energy Expands Electricity Grid with a $4.5 Billion InvestmentHitachi Energy announced on June 7th that it plans to invest an additional $4.5 billion into manufacturing, engineering, digital, R&D and partnerships by 2027. These investments will go into partnerships, supply chain, digitalization, and automation allowing the company to expand its global reach and provide better goods and services. The company also announced that it was investing $330 million to expand and modernize its factory in Ludvika and build a new campus is Sweden.Samsung’s Semiconductor Global Distribution Center Opened in SuzhouOn June 7th, Samsung’s semiconductor global distribution center officially opened in Suzhou Industrial Park. The Samsung Semiconductor Global Distribution Center project is located in the free trade zone of the park, and the new customized warehouse is a double-layer constant temperature warehouse. The total construction area of the project is about 20,000 square meters, and the inventory can reach 90,000 boxes, which fully meets the needs of overseas logistics. The annual regulatory value exceeds $20 billion US dollars.China Unicom Established its First Branch in the Middle EastOn June 6th, China Unicom Saudi Arabia officially opened in Riyadh. According to reports, China Unicom Saudi Arabia is the first Chinese communications operator to obtain commercial registration certificates in Saudi Arabia, and it is also the first branch established by China Unicom in the Middle East.Follow Us for Int'l Cooperation and Investment NewsJoin Our Membership for More Benefits