There is a clear disconnect growing in terms of information and perceptions on the state of China’s economy, and its positioning in terms of the tech and AI revolutions. This week’s news provides many examples of this.

The real estate market—the heart of China’s economy—seems to be going from bad to worse, with total sales and construction numbers continuing to fall, as well as the prices of second-hand apartments that actually do trade in the market. The prospect for 2026 looks no better, in spite of commitments from the Central Economic Planning Committee last week to stabilize the real estate market.

Bank lending is weakening, China’s factory output In November fell well below market expectations. And in what certainly looks to be a sign of desperation, there was an announcement that all childbirth fees are going to be dropped—providing free birth for any couples who decide to have a kid.

On the other hand, reported youth unemployment numbers improved somewhat and there were further signs that the System’s huge focus on AI development and semiconductors is beginning, finally, to pay off. Nvidia was granted the right by the Trumpist administration to sell some of their best chips to China, probably removing a significant obstacle to China’s AI development (in what universe does that make sense?). And there was an announcement of a significant breakthrough in terms of semiconductor speeds by universities in China, allegedly up to 100 times as fast as Nvidia chips.

The word on the street this week, from one person we spoke to, was that China is close to nailing the whole AI thing and is poised to announce a major breakthrough sometime next year, thereby positioning it to take over the world. Maybe, maybe not. Someone else told us that China stocks—which have done pretty well over the past year but are still nowhere in terms of their performance over the last two decades compared to the Dow Jones index—are set to see solid rises over the next two or three years. The Center, he said, had decided, and so therefore it will happen. Place your bets, or not, as you prefer.

The anecdotal atmospheric sense of China, as we have reported so many times, remains gloomy with many people apparently increasingly concerned about job losses and inability to pay off mortgages. There are for sure immense strains on the system here at the grassroots level at least.

Anyway, we might as well bask in the glory as much as be glum in the gloom. So, enjoy the sunshine and have a great weekend!

Labubu mania appears to be ebbing as quickly as it surged, reports Bloomberg, driving a roughly 40% drop for Pop Mart International since its August peak.

A disappointing US Black Friday and cooling resale demand have revived comparisons to the 1990s’ Beanie Babies bust, challenging the notion that Pop Mart could become China’s answer to Walt Disney or Hello Kitty owner Sanrio.

Pop Mart’s North America revenue growth slowed to 424% in the current quarter to December 6—more than halving from the three months to September—according to YipitData, a New York-based firm that gathers and analyzes alternative data. Bearish wagers against its stock have tripled since November to their highest since August 2023, S&P Global data show.

Shanghai Stock Exchange has overtaken Nasdaq and Hong Kong as the world’s top initial public offering venue in the first half, helped by flotations of leading mainland Chinese companies following their delisting in the US, reports the South China Morning Post.

According to Deloitte, a total of 68 IPOs, including jumbo offerings by China Mobile, the world’s largest mobile operator by subscribers, and CNOOC, China’s largest offshore driller, helped fundraising in Shanghai to reach HK$254.3 billion ($32.4 billion), 49% more than a year ago, when it ranked fourth behind Nasdaq, New York Stock Exchange (NYSE) and Hong Kong.

Together with Jinko Solar, which is still listed on the NYSE but faces a similar delisting risk, Shanghai snapped up three of the world’s top 10 IPOs in the first half.

New listings in China this year have raked in more than double the amount raised on Wall Street, after officials camped out at Shanghai’s stock exchange during the city’s strict lockdown to ensure a steady flow of deals, reports the Financial Times.

Total fundraising from initial public offerings in China has hit almost $35 billion this year, compared with just $16 billion on Wall Street, according to data from Dealogic.

The strong showing for China’s IPO market came as authorities in Shanghai reacted swiftly after the city of 26 million entered a two-month lockdown, dispatching a squad of cadres to safeguard what is one of the most precious resources in China’s financial capital.

China’s state planner said on Thursday it had approved 10 fixed-asset investments worth RMB 121 billion ($18.1 billion) in May, a more than six-fold jump from April, as policymakers seek to get economic growth back on track after a COVID-induced slump, reports Reuters.

Data on Wednesday suggested activity in the world’s second-largest economy is beginning to pick up again in some sectors after widespread COVID-19 lockdowns in April and early May, but the outlook remains uncertain, particularly for cities like Beijing which are still trying to bring caseloads down to zero.

Most private economists believe China’s economy contracted in April-June after growing 4.8% in the first three months. The government has vowed to achieve positive growth in the second quarter.