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Summary Hennessy is exploring a plan to bottle cognac in China to avoid high tariffs imposed on European brandy imports. The trial involves shipping bulk cognac to China for bottling locally, which could affect 2025 sales if successful. The move has sparked labor strikes at Hennessy’s bottling facility in southwestern France. Hennessy, a cognac producer under French luxury conglomerate LVMH, has announced plans to trial bottling operations in China to counter steep tariffs imposed by Beijing. These anti-dumping measures, implemented in Octo ber, raised duties on bottled brandy imports from the European Union to over 30%. China, which accounted for $1.7 billion in cognac exports last year, remains the second-largest and most profitable market for the industry.

As the world’s second-largest economy, China remains a focal point in global trade and investment strategies. In 2024, the nation navigates a complex economic climate shaped by both domestic challenges and international pressures. From shifts in consumer behavior to the enduring strain on its property sector, these five economic indicators offer a detailed snapshot of where China stands and what it means for global business. 1. Retail Sales Retail sales act as a barometer of domestic consumption and public sentiment toward the economy. October 2024 saw a 4.8% year-on-year increase, marking the highest growth in eight months. This rise was bolstered by key shopping festivals such as Golden Week and Singles' Day, signaling a recovery in consumer activity. What This Means: The surge in retail sales reflects a potential pivot toward a consumption-driven economy, a critical step in reducing China's export dependency. Sustained retail growth may signify stronger domestic demand, encouraging businesses to target China’s expanding middle class. Challenges Ahead: Despite recent gains, China's economic strategy must account for uneven spending patterns, with rural areas lagging behind urban consumer hubs.

Summary The aircraft’s production must increase to meet hundreds of pending orders, requiring reliance on foreign suppliers. Major airlines like Air China and China Eastern demand different configurations, complicating manufacturing. While foreign components are essential now, China aims to develop domestic alternatives to achieve industrial independence. Tianjin Yonghao Audi, once the largest Audi dealership in Tianjin, abruptly ceased operations on November 12, 2024, due to a severe cash flow crisis. The closure was triggered by the sudden withdrawal of funding from a key banking partner, leaving the dealership unable to meet its financial obligations. Claims against the company have already surpassed CNY 100 million (USD 13.8 million), and a resolution is expected by December 12, according to local reports.

Summary Hycan, an EV startup backed by GAC, has shut its Shanghai office and delayed severance payments for employees. The company's sales plunged 82% year-over-year, with restructuring plans underway amidst severe financial struggles. GAC retains a minor stake in Hycan, with its NEV division, GAC Aion, holding a 21% share. Hycan Automobile Technology, a GAC-backed electric vehicle (EV) startup, has closed its Shanghai office due to severe operational difficulties. Despite promising to pay severance by October 31, the company has failed to fulfill this commitment, leaving employees in financial distress.

Summary Huawei has started pre-orders for its new Mate 70 smartphone and two pro versions via its official store. An event for the Mate brand is scheduled for November 26, where the latest lineup is expected to be unveiled. The Mate series highlights Huawei's resilience amid U.S. sanctions, leveraging domestically produced semiconductors. Huawei Technologies announced on Monday that pre-orders are now open for its new Mate 70 smartphone series, including two pro versions, through its official online store. Interestingly, no deposit is required at this stage, and pricing details remain undisclosed. The launch follows the successful return of Huawei's premium 5G smartphones last year with the Mate 60 series.

Summary Lenovo’s quarterly profit surged 44% year-over-year, driven by strong sales of AI-related products. AI PCs accounted for 14% of Lenovo’s notebook shipments in China last quarter, showing rapid growth. The company’s revenue rose 24% to USD 17.9 billion, with non-PC revenue nearing 50% of the total. Lenovo Group reported a 44% increase in net profit for the second fiscal quarter, amounting to USD 359 million. The profit boost was largely attributed to a surge in sales of artificial intelligence-related products, including AI-powered personal computers (PCs). Total revenue grew by 24% year-over-year to USD 17.9 billion, marking a significant recovery for the world’s largest PC maker.

Summary BYD achieved record-breaking sales exceeding 500,000 new energy vehicles in October. The company hired nearly 200,000 employees in just three months to meet surging demand. Other Chinese NEV makers, including Xiaomi Auto and Xpeng, are also ramping up production and recruitment. BYD, China’s leading new energy vehicle (NEV) manufacturer, has hit a new high in its operations, reporting sales of over 500,000 NEVs in October while hiring approximately 200,000 workers between August and October. This unprecedented hiring spree is aimed at boosting production to meet escalating global demand for its vehicles and components.

Summary China plans to fast-track intelligent connected vehicle trials, focusing on autonomous driving and smart infrastructure. Key regions for development include the Yangtze River Delta and the Greater Bay Area. By 2027, China aims to lower logistics costs and significantly enhance rail-water intermodal transport efficiency. China has unveiled a comprehensive plan to accelerate the integration of intelligent connected vehicles (ICVs) into its transport network, marking a significant step towards the future of mobility. The joint in itiative, led by the Ministry of Transport and the National Development and Reform Commission, emphasizes autonomous driving trials and the construction of smart highways, waterways, and ports. Regions such as the Yangtze River Delta and the Guangdong-Hong Kong-Macao Greater Bay Area will serve as key hubs for these developments, reflecting the government’s commitment to fostering innovation and enhancing transport efficiency.

Summary CATL expresses interest in building a U.S. facility if trade policies under Trump permit it. Trump’s policies are aimed at promoting U.S.-based EV manufacturing while blocking Chinese EV and battery imports. CATL currently supplies Tesla and Ford with licensed technology for U.S. battery production. China’s leading battery manufacturer, Contemporary Amperex Technology Co. Ltd (CATL), has signaled willingness to establish a plant in the United States if President-elect Donald Trump’s trade policies allow for smoother Chinese investments in the EV supply chain. Robin Zeng, CATL’s chairman, conveyed in an interview that while previous attempts at U.S. investment were blocked, the company remains open to revisiting the possibility. “Originally, when we wanted to invest in the U.S., the U.S. government said no,” Zeng noted. “For me, I’m really open-minded.”

Summary Alibaba and JD.com report historic growth during Singles' Day despite economic challenges. Categories like collectible toys and home appliances showcase changing consumer interests. Singles' Day cements its global status with sales surpassing $198 billion. China’s annual Singles' Day shopping extravaganza concluded with groundbreaking success, signaling a rebound in consumer confidence and a surge in e-commerce innovation. The festival, orchestrated by e-commerce giants Alibaba and JD.com, spanned nearly a month this year, transforming from its original 24-hour format into a prolonged period of deals and promotions. Both platforms reported robust sales growth and increased shopper engagement, though exact figures were withheld.

Summary Air China becomes the launch customer for COMAC's C929 widebody jet, alongside substantial deals for its C919 and rebranded C909 regional jets. The Zhuhai Air Show unveils a model of China’s first commercial uncrewed spaceplane and showcases upgraded military and commercial aircraft. The event highlights China's efforts to challenge global aerospace leaders while addressing domestic and international market demands. The Zhuhai Air Show, China’s largest aerospace event, opened to a showcase of bold innovations and substantial commercial achievements, underscoring the nation’s aspirations in aviation and space exploration. The event, which runs until November 17, 2024, brought together industry leaders and public spectators to wit ness China's evolving role in global aerospace.