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UDN: North Korea’s Kim Yo-Jong Unofficially Wants to Invite Japanese Prime Minister to Visit

United Daily News (UDN), one of the primary Taiwanese news groups, reported that North Korean leader Kim Jong-un’s sister Kim Yo-jong recently made an unusual comment, saying that North Korea is open to improving relations with Japan. She hinted that North Korea may invite the Japanese leader to visit Pyongyang in the future. The remarks came in response to Japanese Prime Minister Fumio Kishida saying not long ago that there has been a strong need to change the current relationship between the two countries.

North Korea’s official Korean Central News Agency reported that Kim Yo Jong said that, as long as Japan abandons its bad habit of criticizing North Korea’s exercise of legitimate defense rights and stops talking about the “already resolved” issue of Japanese abductions by North Korea, the two countries can work together. However, Kim Yo Jong emphasized that this was just her personal opinion (rather than an statement from the North Korean government).

In January, Kim Jong-un sent a rare telegram to Kishida expressing condolences after the Noto earthquake in Japan. Analysts say it may be that North Korea is signaling desire for improved relations with Japan.

The Japanese government has been analyzing the content of Kim Yo Jong’s statements and has declined to comment for the time being.

The senior official for North Korea affairs at the U.S. State Department said that the U.S. supports all diplomacy and dialogue between Japan and North Korea. An official from South Korea’s Ministry of Foreign Affairs said that communications between Japan and North Korea should be conducive to denuclearization of North Korea as well as to peace and stability on the Korean Peninsula.

Source: UDN, February 17, 2024

Sohu: U.S. Wafer Fab Construction Near Slowest in the World

Well-known Chinese news site Sohu (NASDAQ: SOHU) recently reported on a study done by Georgetown University’s Walsh School of Foreign Service Think Tank regarding the speeds at which various countries have been able to complete construction of silicon wafer fabs (integrated circuit fabrication facilities). Sohu reported that the construction speed of wafer fabs in the United States is among the slowest in the world, and that Mainland China is quickly catching up in speed to the U.S. Below are some key points from the article:

Since the 1890s, a total of 635 new wafer fabs have been built around the world, with an average construction time of 682 days. The fastest construction time for wafer fabs is in Japan, which takes an average of 584 days to construct its factories , followed by South Korea at 620 days, Taiwan at 654 days, Europe and the Middle East at 690 days, and Mainland China at 701 days. In the United States, it takes up to 736 days, which is only slightly faster than the 781 days in Southeast Asia.

In 1990s and 2000s, wafer fabs construction in the United States took an average of only 675 days. By the 2010s, the fab construction speed had slowed to 918 days. Meanwhile, Mainland China and Taiwan shortened their fab construction times to 675 and 642 days, respectively. Entering the 2020s, the construction of wafer fabs in the United States is even more difficult and often cannot be completed on schedule. For example, TSMC’s Fab #21 in Arizona has been postponed for another year; Intel’s factory in Ohio has been postponed from 2025 to the end of 2026; and Samsung’s factory in Texas has been postponed to 2025.

The biggest factor leading to slowdown of fab construction in the United States is the various complicated laws and regulations, which may seem to be of benefit to the public, but which seriously hinder the development of semiconductors.

Source: Sohu, February 17, 2024

HK01: MSCI Removes 66 Chinese Companies From Indices

HK01, a popular Hong Kong-based online media network, recently reported that finance company MSCI removed 66 Chinese stocks from its benchmark China Index and its All Country World Index during the latest MSCI quarterly review. The move by MSCI comes as Mainland China and Hong Kong stock markets plummeted, losing trillions of dollars in market value from their peak in 2021.

Most of the removed companies are in the real estate, pharmaceuticals, internet, and aviation sector. Specific names removed including famous companies such as Weibo, China Southern Airlines, Ping An Healthcare and Technology, as well as real estate developers Gemdale Group and Greentown China. The number of Chinese companies removed was the greatest seen in at least two years. The removals will be effective from the close of trading on February 29, 2024.

China’s weight in global investment portfolios has fallen significantly as China’s real estate industry sinks further into crisis, Chinese consumer spending continues to weaken, and alternative emerging markets such as India continue to perform well. Some experts expressed that MSCI’s stock removals highlight how money is moving out of Chinese equities as investors reduce their exposure. Such investor behavior is largely due to recent weakness in Chinese market fundamentals, ongoing financial instability, regulatory uncertainty, and concern over national-level risks.

Source: HK01, February 14, 2024

NetEase: Mexico Surpassed China as Largest Supplier to U.S.

Data released by the U.S. Department of Commerce showed that in 2023 Mexico surpassed China for the first time in over 20 years to become the largest source of goods imported by the U.S.

Well-known Chinese news site NetEase (NASDAQ: NTES) ran a report about the Department of Commerce Data. Below are some excerpts from their article:

As part of the U.S.’ so-called “weaning off dependence on China” strategy, the U.S. Biden administration is urging companies to find suppliers in allied countries or move manufacturing operations back to the United States.

The value of U.S. imports from Mexico increased by nearly five percent from 2022 to 2023, reaching more than US$475 billion. At the same time, the value of U.S. imports from China fell by about 20 percent, to US$427 billion.

This is the first time in more than 20 years that Mexico has surpassed China and become the largest source of imported goods to the United States. The last time the value of U.S. imports from Mexico exceeded that from China was in 2002.

The biggest decline in U.S. imports from China was in commodities such as computers, electronic products, chemicals, and pharmaceuticals, which are all ‘politically sensitive’ for the United States.

The impact of COVID-19 on global supply chains has also forced American companies to look for nearshore suppliers. … However, the actual situation is more complicated than that. Some Chinese manufacturers have already established factories in Mexico too.

Source: NetEase, February 8, 2024

CNA: BloombergNEF Puts Canada Ahead of China in Lithium Battery Production Capabilities

Primary Taiwanese news agency Central News Agency (CNA) recently reported that Bloomberg New Energy Finance (BloombergNEF) has released a ranking report on global supply chains for lithium-ion batteries. Canada surpassed China for the first time as number one in the rankings, topping the list of 30 countries. According to BloombergNEF, the “Global Lithium-Ion Battery Supply Chain Ranking [is] an annual assessment that rates 30 countries on their potential to build a secure, reliable, and sustainable lithium-ion battery supply chain.”

The below excerpts are translated from the CNA article:

“China ranked first for the three years prior before falling to second place in the 2024 edition of the BNEF ranking. Canada moved to the top of the list from second place, and the United States now ranks third among battery producers.”

“Canada currently accounts for only a fraction of China’s lithium-ion battery production. BloombergNEF’s analysis focuses on future battery supply chain developments.”

“The Canadian government continues to invest new funds to expand support programs for electric vehicle battery manufacturing.”

“Multinational companies investing in the electric vehicle industry such as Ford, Stellantis, Volkswagen, South Korea’s LG Energy Solution, and Umicore have already started developments in Canada.”

“BloombergNEF examined 46 indicators across five categories to measure each country’s potential to build a safe, reliable and sustainable lithium-ion battery supply chain. These categories include raw materials, battery manufacturing, downstream demand, environmental and social governance, as well as industry, infrastructure and innovation.”

CNA, February 8, 2024

BloombergNEF, February 5, 2024

January Sales of TOP100 Chinese Real Estate Companies Decreased 33% Year-Over-Year

The China Index Academy recently published its January report “Sales Performance Ranking of Chinese Real Estate Enterprises.” Shanghai-based Chinese financial news site East Money wrote about the data from the report, commenting that in January this year the total sales of the TOP100 Chinese real estate companies suffered a year-over-year decrease of 33.3 percent. The decline was 1.6 percent worse than the same period last year.

The China Index Academy report mentioned that January of 2023 saw the relaxation of China’s strict Zero-COVID policy, leading to a surge in demand and relatively high sales during that period. Thus, the baseline for January 2024’s year-over-year change in sales was relatively high. Meanwhile, the real-estate market is currently quite sluggish, the sector as a whole in recession, and Chinese real-estate giant Evergrande is facing liquidation.

According to statistics from the Academy’s report, the transaction area of new homes in 100 key cities fell by about 33 percent month-over-month. Overall market sentiment remains weak. In terms of second-hand housing, transaction volume in key cities increased slightly month-over-month, and the market remains active. The area of new homes approved for sale in 50 key cities fell by about 50 percent month-over-month and more than 15 percent year-over-year. The overall scale of supply is at a low level.

Source: East Money, February 1, 2024

UDN: The United States Releases the List of Notorious Markets for 2023

United Daily News (UDN), one of the primary Taiwanese news groups, recently reported on the global “2023 Notorious Markets List” recently announced by The Office of the U.S. Trade Representative (USTR). The list including 39 online markets and 33 physical markets where piracy is rampant. Among them, China’s online markets Taobao, WeChat, Pinduoduo (U.S. branch name Temu), and seven physical markets (including Shopee) were named again.

These Notorious Markets are considered to be involved in or to be abetting a large volume of trademark counterfeiting or copyright piracy. This year’s list focuses on the potential health and safety risks posed by counterfeit goods, which use poor quality materials and are manufactured without supervision or safety controls, resulting in products that are substandard, ineffective or dangerous. U.S. Trade Representative Katherine Tai said that counterfeit and pirated goods harms workers, consumers and small businesses, and ultimately harm the U.S. economy. She added that crackdown on trade in these goods is important for economic growth.

This year, seven Chinese physical markets were named on the list, including Huaqiang Electronic World, Luohu Commercial City, Beijing Silk Street Market, and Wuai Market. Although Shopee, headquartered in Singapore, has invested heavily in the past year to enhance anti-counterfeiting capabilities, there still remain a large number of counterfeit goods on the platform, and problems such as slow response times remain.

Source: UDN, January 30, 2024

Lianhe Zaobao: Profits of Chinese Industrial Companies Fell Last Year

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that, according to the official data released by the Chinese National Bureau of Statistics, China’s industrial enterprises above a designated size achieved a total profit of RMB 7.6858 trillion yuan (around US$1.08 trillion) last year, a year-over-year decrease of 2.3 percent. This decrease reflects how lower prices and weak domestic and foreign demand have continued to weigh down profit growth for industrial companies. Among these industrial enterprises, there was a significant drop of 6.7 percent year-over-year in total profits for foreign-owned enterprises and Hong Kong, Macao and Taiwan-owned enterprises. The profits of state-controlled enterprises fell by 3.4 percent year-over-year. The profits of joint-stock enterprises fell by 1.2 percent year-over-year. The total profits of private enterprises had a growth of 2.0 percent year-over-year. However, many companies are nearing the end of an inventory destocking cycle.

Source: Lianhe Zaobao, January 27, 2024