☕️ Good morning friends,

Actually, China is really easy to understand. If you read the 5-year plans carefully, you often already know where things are heading.

So we're curious what will be decided this week. As always, we'll deliver the most important info to you first.

Also in today's issue:

• PayPay IPO: Japan's largest US listing targets up to $1.1 billion

• Grab's driver loans: 277% annual interest – 5.5 times that of credit card companies

• AI kilns: Taiheiyo Cement automates its cement plants from 2026

Enjoy reading! 📰

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Iran shock hits Asian markets

• The Hang Seng posted its biggest single-day loss since Trump’s “Liberation Day” in April 2025.

• Airlines were hammered: SIA -6%, ANA and JAL each -4%, Cathay Pacific -3.6%.

• Brent crude briefly surged +14% to $82.37 before settling around $76.

• Energy stocks soared: RH PetroGas +17.6%, Rex International +15.2%.

• Gold climbed to $5,346/oz.

• Defense stocks benefited: ST Engineering +2.8%.

TOP BIT

China's Two Sessions: 4.5% instead of 5% – and zero surprises

Tomorrow, the most important political event of the year begins in Beijing: The "Two Sessions" (Lianghui).

Analysts expect a historic premiere: For the first time in three years, Beijing is likely to lower its GDP target – from "around 5%" to a range of 4.5-5%.

The new realism

21 of 31 Chinese provinces have already lowered their growth targets. The signal from the regions is clear: The era of double-digit growth rates is definitively over.

• Flexibility: Range target provides room for reforms instead of pure growth chasing

• Demographics: Aging population makes high targets unrealistic

• Geopolitics: Iran conflict and US trade war increase uncertainty

15th Five-Year Plan: tech instead of consumption

The Two Sessions mark the start of China's new blueprint (2026-2030). Central is the promotion of "New Quality Productive Forces":

• Technological sovereignty: Massive investments in AI, quantum computing, semiconductors, and 6G are intended to make China independent of Western export controls.

• Industrial upgrading: Instead of cheap mass goods, the focus is on producing high-end equipment and new materials.

• Problem zone consumption: It remains to be seen whether Beijing will provide real fiscal resources for households or continue to primarily subsidize the supply side (industry).

Trump factor

US President Donald Trump is expected in Beijing at the end of March. Experts therefore expect moderate diplomatic rhetoric to avoid jeopardizing the negotiating basis for tariffs.

📊 All details & data: CNA, Wall Street Journal, Straits Times

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MARKET BIT

PayPay’s $1.1B U.S. IPO: Japan’s largest listing ever on American soil

PayPay, Japan’s dominant payment app with more than 72 million users, filed for its U.S. IPO on Monday.

Target: up to $1.1 billion on the Nasdaq. That would make it the largest U.S. listing of a Japanese company in history. At the top end of the price range, the valuation would reach $13.4 billion. SoftBank founder Son had originally aimed for $20 billion.

The details

PayPay is offering 31.1 million shares (ADRs) on Nasdaq, while SoftBank’s Vision Fund II is selling an additional 23.9 million. Price range: $17 to $20 per share.

According to PayPay’s SEC filing (April to December 2025): the company posted $656 million in profit on $1.77 billion in revenue. In the same period a year earlier, profit stood at $184 million — meaning it has more than tripled.

Anchor investors include Visa, the Qatar Investment Authority, and the Abu Dhabi Investment Authority. Together, the three will take 10% to 20% of the offering.

• Visa and PayPay signed a strategic partnership in February and plan to launch a joint U.S. venture for digital wallets supporting NFC and QR-code payments.

Why Japan’s payment market is so attractive

Since its founding in 2018 as a joint venture with India’s Paytm, PayPay has reshaped Japan’s payment landscape — paying via QR code at checkout instead of cash or credit card.

• QR-code payments now account for 9.6% of all cashless transactions in Japan, up from just 0.2% in 2018.

• With 72 million users in a country of 123 million people, penetration is close to 60%. Credit cards still account for 83%.

For SoftBank, the deal is part of a broader portfolio reshuffle: between June and December alone, the group sold $13 billion worth of T-Mobile shares to finance its AI push. Now PayPay is next.

The anchor-investor strategy has worked before: during the 2023 Nasdaq listing of chip designer Arm, SoftBank brought in Apple, Samsung, and Nvidia as investors — who were also customers. With PayPay, Visa plays that role.

👉 Sources: Bloomberg, Nikkei

NUMBER OF THE WEEK

That’s how much cash was turned in to Tokyo police in 2025.

💴 Honesty record: Never before has so much cash been handed in to the lost-and-found office in a single year. The largest single amount totaled $180,000.

🏙️ Self-checkout effect: More than 70% of cases came from public facilities, often uncollected change at supermarket self-checkouts. ¥3.23 billion ($21.5 million) was returned to owners, ¥590 million ($3.9 million) went to finders, and ¥680 million ($4.5 million) went to the city.

Tokyo also reported a record number of lost items turned in: 4.5 million items, led by IDs and wireless earphones.

HIGHLIGHTS 

🇰🇷 Korea and Singapore forge tech alliance: President Lee and PM Wong have launched an upgrade of their FTA — the first since it took effect in 2006. The package includes five new agreements covering AI, small modular reactors, and quantum computing. Korea will establish a $300M AI fund in Singapore by 2030. Singapore’s investments in Korea have more than doubled since 2020.

🇨🇳 Tencent expands cloud presence in Germany: Tencent will open a third availability zone in Frankfurt in Q2, further expanding its European cloud infrastructure. The move is driven by rising demand for Tencent’s AI services in Europe, particularly its HunyuanVideo 3D modeling engines. Tencent is positioning itself as a serious alternative to AWS and Azure in the European market.

🇵🇭 Grab squeezes riders with 230% interest: Grab’s in-app loans for motorcycle riders in the Philippines carry effective annual rates of up to 277% — 5.5x what credit card companies are allowed to charge. Daily automatic deductions from the e-wallet make repayment convenient but keep riders permanently tied to the platform. Grab’s loan portfolio grew 118% in Q4 2025 to $1.2B. Analysts warn: those with less, pay more.

🇯🇵 Japan’s cement industry turns to AI kilns: Taiheiyo Cement will automate its rotary kilns with AI starting in fiscal year 2026. The technology learns operating patterns from temperature and pressure data — know-how that experienced workers typically build over years. According to Japan’s economy ministry, over 60% of manufacturers lack sufficient staff to train the next generation. Asahi Kasei and Kobe Steel are also increasingly deploying AI in plant operations.

MORE ASIABITS

• Free guide: AI Automation for Beginners

• Humanoid Robotics Report: The $6 Billion Bet

• Interactive tool: China Dependency Index™

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