Your Weekly Digest of Market News and Analysis from the Editors
September 10, 2023
Notable market news this past week (10-Sep-23)
Here is the Skeptivest roundup of the latest market headlines for the week
📱 Huawei is making a comeback; China's chip breakthrough
Image source: Huawei
“Necessity is the mother of invention, and the US has created a whole lot of necessity for China.” - Tom Nunlist, Associate Director at Beijing-based consulting firm Trivium
Huawei's new smartphone: Huawei, despite facing years of sanctions, surprisingly introduced a mobile phone that incorporates technology the US had tried to prevent Beijing from accessing. Huawei’s new Mate 60 Pro was capable of 5G speeds seen in devices like the latest iPhones. Its new 7-nanometer processor was supplied by SMIC - the top Chinese chipmaker.
Progress in overcoming US efforts to restrict China's tech aspirations?: The attention garnered by the Mate 60 announcement underscores the potential success of President Xi Jinping's multibillion-dollar endeavors aimed at achieving technological self-sufficiency. The limitations imposed by Washington on China's technology sector may not be as impactful as previously believed.
Big threat to global competitors players like Apple: Apple generates roughly 20% of its sales revenue from China, and it is currently grappling with the impact of the government's intention to extend the prohibition on iPhone usage to encompass state-affiliated enterprises and governmental institutions.
⚖️ Tension at the G20 (minus 2) Summit
Photographer: Saul Loeb/AFP
"Xi’s absence means we will all understand China a little bit less — and have to rely on Beijing’s maps for its version of how it sees the world," - Karishma Vaswani, Bloomberg Opinion columnist
What is the G20?: Yearly meeting in which 19 nations, along with the European Union, collectively accounting for approximately 85% of the global GDP, collaboratively formulate international policy recommendations.
This year's no shows: This year's conspicuous absentees include Chinese President Xi Jinping, who is missing for the first time since assuming office in 2013, and Russian President Vladimir Putin, who is skipping the event for the second consecutive year. Instead, Xi will be dispatching Premier Li Qiang. Xi’s choice to skip such a critical global gathering underscores a world ever-more divided.
Opportunity for Biden: For US President Joe Biden, the non-participation of China's Xi Jinping and Russia's Vladimir Putin presents an opportunity to establish new connections with nations that both leaders have sought to engage with, including Brazil, South Africa, Indonesia, and India.
Significant uncertainties: Whether the leaders will approve a statement denouncing Russia's conflict in Ukraine, as the US desires. The statement from the previous year acknowledged that the war had negative repercussions on the global economy. However, despite the strengthening relationship between the U.S. and India, Prime Minister Narendra Modi, the host of the summit, wishes to maintain a neutral stance and continue purchasing Russia's affordable oil.
☕️ Quick fire happenings to note
Economists cut Singapore 2023 growth and inflation forecasts: According to the MAS, a survey of 22 economists indicates that the median projection for Singapore's economic growth this year is 1.0%, a decrease from the 1.4% forecast in the June survey. The median inflation projection suggests that headline consumer prices are expected to increase by 4.7% this year, which is a slight decrease from the 5.0% forecasted in June.
Europe Stagflation: Heightened oil costs and disappointing economic data from Germany rekindled fears of stagflation throughout the eurozone, leading to further declines in European stocks. The Stoxx 600 index slipped by 0.6%, marking its sixth consecutive session of losses following a sharp decline in German factory orders. Meanwhile, Brent crude prices neared the $90 per barrel threshold as the largest OPEC+ oil producers extended their supply cuts through the end of the year.
Normal relationship with China impossible: Canadian Prime Minister Justin Trudeau stated that the assertive foreign policy pursued by President Xi Jinping of China has rendered the possibility of a normal relationship between the two countries impossible, at least for the time being.
Speculative bets on China property: Speculative bets that the Chinese government will expand its assistance to the struggling real estate sector prompted significant surges in some of the country's ailing property developers - e.g. Sunac China Holdings Ltd. witnessed a substantial 68% increase in trading, while China Evergrande Group recorded an 83% increase in its closing price, marking its most substantial gain since its listing in 2009.
Apple shares tank from China ban: Following reports from Bloomberg that China intends to expand its ban on iPhone usage to include state-owned corporations, Apple's stock price experienced a decline. Prior to this, the Wall Street Journal had also indicated that China was taking steps to prohibit the use of iPhones within government agencies.
WeWork continues to struggle: WeWork plans to renegotiate nearly all of its leases and pull out of “unfit and underperforming locations” in an effort to stay afloat.
OpenAI CEO Sam Altman granted Indo's first "golden visa": Officials have announced that Sam Altman, the CEO of OpenAI, has been awarded Indonesia's inaugural golden visa, as the country seeks to allure affluent international investors in its bid to boost its economy. He was granted a 10-year visa for his potential contributions to the development of artificial intelligence.
Natural disasters: 6.8 magnitude Morocco earthquake kills more than 2,000 and damages historic Marrakech. Torrential rain caused severe flooding across Hong Kong. The intense rain, caused by the remnants of Typhoon Haikui, comes a week after the city was battered by a super typhoon.
