China's Tech, Economy Week. Part 2
The hits keep coming..
A bonanza of technical achievements and economic course-changes this week, hence the two-parter.
Technology
Wuhan’s JFS Labs lit a laser integrated into a silicon chip, filling one of the few blanks in China’s optoelectronics technology. Silicon photonics use optical signals instead of electric signals for transmission. It aims to address the restraints imposed by current technology, as the transmission of electric signals between chips is approaching its physical limit. (See 2023 article, below).
China to launch ultra-secure quantum global communications service by 2027, with the completion of its quantum satellite constellation and its integration with ground-based networks, according to leading physicist, Pan Jianwei.
Three people with severe autoimmune conditions are in remission after treatment with bioengineered, CRISPR-modified immune cells. This is the first step towards mass production of such therapies. The first person to receive the treatment, in May 2023, was a 42-year-old woman with autoimmune myopathy, which targets skeletal muscle tissue, resulting in weakness and fatigue. Mr Gong, and another man with aggressive sclerosis started treatment in June and August 2023.
Gallium is irreplaceable for high-end radar, EW, communication, telecom & lasers. Ga is a byproduct of bauxite production, and China produces 40 megatonnes p.a., which requires 600Twh, or 15% of America's 2023 electricity production–while America struggles to generate enough electricity for AI. Australia is shutting its Kwinana Alumina plant and Alcoa to close its Intalco Smelter, which supplied 30% of America's needs. China has a huge energy cost advantage vs EU/JP/SK, so other countries keep closing Alumina smelters. EU lacks the electricity to keep steel plants open, and no Al production means no Ga production. TP Huang.
Washington’s $65 billion chip stimulus is failing. Samsung and Intel announced company-wide staff reductions up to 30% and may get no CHIPS Act money. US export controls slashed Intel’s China sales, once 25% of its revenue. Its European plant is on hold and it failed to install production equipment, the most expensive part of the buildout. Panic in the CHIPS Program Office.
2022: 165,000 tech layoffs
2023: 264,000.
2024: 132,000 YTD.
Economy & Trade
Long term capital intensity policy orientation has shifted to keeping the broader economy aligned with the evolving society and workforce. Both demand-side consumption habits and supply-side skill sets and production factors evolve over time. A workforce dominated by blue-collar workers aligns well with capital-intensive sectors like construction and infrastructure. Whereas a white-collar dominated workforce aligns better with sectors like tech, advertising, manufacturing, healthcare, etc. Glenn Luk.
Beijing wants institutional investors and sovereign wealth funds to play a greater role stabilizing the stock market with more long-term capital. PBOC launched two monetary policy tools, the Securities Fund Insurance Swap Facility and The Share Buyback Increase Re-loan. This shifts the calculus of the equities market.
The middle of a war that threatens to go nuclear and a genocide is a strange time to detour into economics. But economics have a bearing on wars. The two-and-one-half World Wars of the last century each trailed periods of capitalist/imperialist expansion that were followed by crises. As was the case in the 1930s, the 2008 Great Recession caused a deeper and wider crisis of capitalism than has been admitted in the West. Rob Urie.
Giant US deficits and debt rollovers wreak havoc among BRI borrowers.
US manufacturing employment has dropped 30% since 1979, as population rose 50%. From machine tools to industrial robots to consumer electronics, American manufacturing capability has been hollowed out. Boeing and Intel are struggling. The U.S. has five large oceangoing ships under construction or on order, compared to South Korea’s 734 and China’s 1,794.
“China is a very interesting trading partner,” says Javier Milei, as Argentina seeks closer economic ties. “They do not make demands, the only thing they ask is that they not be bothered.” Both exports and imports between the two countries declined sharply after Milei’s election, as China found alternative markets in neighboring Brazil. And Argentina desperately needs investment.
Liu Run, Chinese business author, back from visiting pioneering Chinese factories in Mexico, saw them making products from furniture to home appliances, and filed this report.
Beijing allows foreign cards for transit. Arrivals surpassed pre-Covid: More Russians, fewer American. Beijing received 379,300
China started collecting 30% dumping duties on EU brandy, days after Brussels voted to impose tariffs on Chinese EVs, and signaled that it could unleash tariffs on EU cars, while continuing investigations into EU pork and dairy products.
BMW 5s, Audi A6 and Benz E class discounted prices 27% and still lose market share. What happens when their profit margin in China approaches nothing? That could lead to plant closures in China and in Europe, too.
Airbus will soon produce more A320NEO aircraft in China than China’s COMAC produces C919 aircraft. Xian AC just built its third line for producing A320 wingboxes! It hit its 700th delivery last year and now produces 9 per month. As Chinese suppliers improve, it makes more sense for Airbus to use them in the Tianjin production.
China produces 300% more carbon fiber than the US. Titanium sponge production jumped from 70,000 tons in 2018 to 200,000 tons in 2023. China doesn’t play around once it decides to scale something.
Clothes from thin air. The process begins with giant fans capturing an invisible raw material: carbon dioxide, which gleaming reactors transform into a clear, viscous ethylene glycol, which is fed into machines that spin it into fine, glistening fibers that will be woven into fabrics. Each 300 gm T-shirt will use 100 gm of CO2. Sheng Hong’s factory has developed cutting-edge techniques like direct esterification-polycondensation and melt composite spinning that yield diverse fibers like elastic, ultra-fine, and UV-resistant marvels.
