☕️ Good morning, friends,

A traveler in Chengdu—the home of the pandas—had to prove at the reception of an airport lounge that she held cash reserves of roughly $2.8 million.

We’re glad we don’t have that problem: we’re a startup flying only budget airlines. It’s much more exciting. You’d find us in Hong Kong now, with our luggage still stuck in Bangkok.

P.S. We’re not just a little jealous of our luggage, but also of this (now rehoused) homeless man in Shanghai. Bet you’ve never seen such a laid-back, cool homeless guy!

🤝 P.S. In four weeks we’ll host our first hands-on AI workshop. Seats are limited.

BENCHMARKS

NUMBERS

300 million USD

That's the amount of capital Japan bank SMBC is investing in the new VC fund for fintech and AI startups.

58.5%

This is how much Singapore Airlines' net profit drops in Q1. Lower interest income and losses from associates weigh on results.

1.7 million USD

That is the value of the confiscated counterfeit Pop Mart toys in Shanghai, including over 5,000 Labubu figures.

TOP BIT

⚙️ China Pushes Europe Out of Export Business

China’s industrial strategy is paying off—Beijing is replacing European imports with domestic products, from EVs to wind turbines. While the West leans on tariffs, China scores with subsidies, industrial policy, and a weak yuan. The result: Europe’s exports to China are collapsing, the trade deficit is growing, and Germany in particular is stumbling. At the same time, the EU is also losing ground to the US.

The Details

📉 Export Decline: China’s demand for European industrial goods has been falling for years, hitting autos, machinery, and chemicals hardest.

⚡ Strong Domestic Production: China now leads in batteries, solar panels, EVs, rail technology, industrial robotics, and specialty chemicals.

💶 Currency Weapon: The yuan’s drop against the dollar further cheapens Chinese goods; analysts say Beijing is propping it up via state banks.

🇺🇸 Unfavorable US Deal: The EU accepted a blanket 15% tariff on exports to the US—and even thanked Trump when it was announced. It was touted as the “biggest deal ever,” despite restricting trade.

Why It Matters

• Second China Shock Hits Europe Hard: Unlike the first shock affecting textiles and toys, this wave targets Europe’s industrial core—especially painful for Germany.
  

• Beijing’s Strategy Wins: Instead of raising tariffs, China focuses on targeted support, aggressive expansion, and technological self-reliance.
  

• EU Lacks a Response: While Beijing plans long-term and Washington forces deals its way, the EU is left without clear answers—key industries like wind power and magnet production fall behind.

Background

China is increasingly substituting European products in its domestic market with home-grown alternatives, while its exports in many industrial sectors continue to rise. At the recent EU-China summit, differences over overcapacity, subsidies, and market access were laid bare. Although the EU stressed the need for fair trade, it failed to secure concessions on critical issues.

Simultaneously, transatlantic relations have come under strain after the EU agreed to a controversial US tariff package.

📊 All Data & Details: CFR, SCMP, SCMP II

WEBINAR

🧠 The China AI Playbook

Everyone is talking about AI. We’ll show you how it really works.

In just 90 minutes, discover the latest trends and how we used AI to make our processes profitable.

You’ll get:

✅ The latest AI trends from Asia
✅ A real use case from our own work
✅ A 340-page AI report
✅ The asiabits automotive dossier

Bonus: 45 minutes of live Q&A – ask us anything (except for our Netflix passwords).

📅 Only 28 tickets! The first ten attendees get 10% off.

👉🏻 Secure your spot now.

HEAD OF THE DAY

🇮🇩 Prajogo Pangestu

💼 From timber trader to Indonesia’s diversified tycoon: Prajogo Pangestu began in the timber business in the late 1970s, pivoted into petrochemicals with Chandra Asri Group and into renewables with Star Energy, all under the Barito Pacific umbrella. Just this week, his fortune jumped by $20 billion on an energy rally—pushing his net worth to a career-high $36.7 billion, according to Bloomberg—keeping him firmly atop Indonesia’s rich list at age 81.

👉 Lesson learned: Leverage your core expertise to diversify into adjacent growth industries and hold strategic assets—so when sector-specific rallies hit, you’re positioned to capture outsized gains.

MARKET BIT

🏚️ China Evergrande Faces Delisting Threat After 18-Month Trading Suspension

Details

💸 Delisting Deadline Missed: Shares have been suspended since January 29, 2024; after 18 months without trading, the Hong Kong Exchange can delist them. A formal notice is pending but considered a mere formality.

📉 Value Nearly Vaporized: Before suspension, the stock traded at HK$0.163—an implied market cap of just HK$2.2 billion (about $280 million). In 2017, Evergrande was worth HK$354.9 billion (around $45 billion)—a collapse of roughly 99 %.

⚖️ Liquidators Hunt Assets: Since the winding-up order, Alvarez & Marsal has managed global assets and is probing founder Hui Ka-yan’s personal wealth. No viable rescue plan for creditors has emerged.

🏘️ Sector Under Strain: New-home prices in 70 Chinese cities fell in June at the fastest pace in eight months. Goldman Sachs forecasts a further 10 % drop by 2027 if Beijing continues to intervene cautiously.

Why It Matters

• Case Study in Debt Crisis: Evergrande’s downfall underscores the fragility of China’s property giants and how challenging an orderly resolution can be.
  

• Investor Warning: A delisting strands remaining shareholders with no exit, denting Hong Kong’s reputation as the go-to bourse for mainland firms.
  

• Extended Macro Risk: Ongoing price declines depress consumption and construction investment, tightening Beijing’s room for economic stimulus.

👉🏻 Full Story: SCMP, Nikkei

TOP READS

🧲 China Uses Rare Earths as a Power Lever: Beijing controls 70 percent of rare earth mining and 90 percent of processing. This gives the country a strong advantage in trade conflicts. The U.S. is investing 400 million dollars in MP Materials to build a domestic supply chain, but it remains dependent on China’s favorable production conditions. Full story.

💼 EQT aims to buy Fujitec: European investment giant EQT offers $2.6 billion for Japanese elevator maker Fujitec. Hong Kong’s Oasis Management currently owns 30 percent and pushes for changes. Offer is slightly below market value. Full story.

💊 Japan Pushes Biomedicine: Nikon and AGC are investing a total 675 million USD by fiscal 2027 in high-tech medicines such as stem cell and CAR-T therapies. With global demand for regenerative treatments on the rise, Japan aims to significantly strengthen its position in the international race against the U.S. and Europe. Full story.

OPTIONAL READS

Italy: Singapore’s sovereign wealth fund Temasek acquires a 5% stake in Ermenegildo Zegna and invests USD 126.4 million to support the company’s organic growth. More on this.

Japan: Eneos and Toppan begin a 2027 pilot to convert waste paper into bioethanol and aim for commercialization by 2030. More on this.

Thailand: Energy provider builds new LNG terminal at Map Ta Phut port for around 2 billion USD to compensate for declining domestic gas reserves. More on this.

FORTUNE COOKIE

🤯 We Karln’t Believe It! Someone placed a Labubu doll on Karl Marx’s grave at Highgate Cemetery. The internet is in a frenzy, and Marx might be spinning in his grave so fast you could power the entire UK with it.

Dialectical punchline: That pricey blind-box mascot perfectly embodies the commodity-fetishism logic Uncle Karl warned us about.

Send us your fortune cookie and win the highly coveted asiabits T-shirt!

Spotted something funny, interesting, or noteworthy in or about Asia? Send it to [email protected] and we’ll feature it right here!

FEEDBACK

See you tomorrow in your inbox, 

Thomas, Michael & the Team of asiabits