Belgian digital music pageant Tomorrowland got here to Shanghai for the primary time in July 2025.
Hero Esports
Hello, that is Evelyn, writing to you from Beijing. Welcome to the most recent version of The China Connection — a snapshot of what I am seeing and listening to from native companies.
The rise of synthetic intelligence might be creating an surprising winner in China: the expertise financial system.
The large story
Cash may be piling into AI, however for BAI Capital’s Annabelle Yu Lengthy, the Chinese language shopper continues to be king.
An “unintended consequence” of AI is the transformation of how people work together with one another — and the companies round them, she mentioned. Meaning now could be the “greatest time” to get in on the buyer tendencies of the longer term, which would require way more deal with offline experiences.
Beijing-based BAI Capital, whose roots lie in German media conglomerate Bertelsmann, raised $800 million in Could for its newest U.S. greenback fund — a relative rarity in China’s enterprise capital world, which has not too long ago leaned extra on native buyers for Chinese language yuan-denominated funds.
Lengthy mentioned she appears for 3 issues when making investments: that the businesses are regulation-neutral, consumer-facing and market-oriented.
“Not all know-how needs to be nerdy, needs to be aerospace, quantum computing, so-called laborious core,” she mentioned. “If I used to be in a position to make investments into the subsequent TikTok, ByteDance … I would be more than pleased to do it, along with the Nintendos, the Sonys and Panasonics arising from China. I see it occurring now.”
World buyers have lengthy eyed the potential of China’s a whole lot of tens of millions of shoppers. However spending has remained sluggish for the reason that pandemic, whereas cash has flowed as an alternative into AI, chips and {hardware}. Retail gross sales turned unfavorable in Could earlier than eking out 1% progress in June.
In an effort to spice up spending, China launched a nationwide trade-in subsidy program in 2024, encouraging shoppers to commerce in previous items for brand new ones. Native authorities, in the meantime, are attempting different methods to get residents and international vacationers to spend.
The standard Wangfujing buying district in downtown Beijing is attempting to revamp itself with extra in-person experiences, akin to a forthcoming themed space that includes digital actuality and characters from iQiyi‘s on-line dramas.
Sharon Tan, CEO of consultancy Beijing Lyvion Worldwide, which is engaged on the Wangfujing venture, mentioned she can be seeking to get Vogue father or mother Condé Nast on board. Younger folks’s calls for in the end form shopper venues, Tan advised reporters this month. Condé Nast didn’t instantly reply to a CNBC request for remark.
In new measures printed July 13, Chinese language policymakers made clear that their focus over the subsequent 5 years is to help experience-focused consumption, akin to within the performing arts and sports activities.
‘Real offline social connections’
Belgium’s Tomorrowland digital music pageant got here to China final 12 months, with its first occasion in Shanghai. It was held in partnership with Dino Ying’s Hero Esports and INS Land, which is backed by BAI.
“As synthetic intelligence turns into more and more widespread, on-line content material will develop into extra homogeneous, and there might be increasingly AI slop,” Ying mentioned. “We subsequently consider shoppers will more and more search a return to real offline social connections. Folks could have a rising want for face-to-face interplay.”
The emphasis on offline is putting, coming from somebody closely concerned in China’s first premium online game Black Fantasy: Wukong, which grew to become an in a single day success two years in the past.
However Hero Esports is transferring rapidly. Preliminary conversations about Tomorrowland’s China enlargement solely began in early 2025, Ying mentioned. By November that 12 months, the primary pageant was reside, and it is as a consequence of return in October this 12 months. Ying’s INS Land complicated additionally operates a nightclub and different leisure venues all year long.
If tickets to the venue now value 200-300 yuan ($30-$44), they are going to value 10 instances extra sooner or later, BAI’s Lengthy mentioned. “As a result of offline expertise, actually to scent the sweat [and] dance in actual music with actual folks — [that] will develop into the last word luxurious.”
Must know
U.S. commerce official says ‘only a few’ Nvidia H200 AI chips have been shipped to China
“The underside line is only a few shipments in opposition to licenses for H200s and equivalents have taken place. It is a very small amount of chips,” Beneath Secretary of Commerce for Business and Safety Jeffery Kessler mentioned at a congressional listening to.
‘Itemizing is a should’: Chinese language humanoid startups are dashing to launch IPOs
LimX founder Will Zhang in contrast the state of affairs to Chinese language electrical automobile startups. “As soon as the know-how is mature, if [the company] does not checklist, then like WM Motor, it might disappear,” he mentioned in Mandarin, translated by CNBC.
BrainCo bets the way forward for mind tech is wearable
The corporate’s bionic fingers, accredited by the U.S. Meals and Drug Administration, learn an amputee’s neural and muscular electrical indicators and translate meant actions into finger motions.
Arising
July 16 – 29: 2026 APEC Digital Weeks in Chengdu
July 27: China’s reminiscence chip firm CXMT is reportedly to checklist
