At a provide chain expo in Beijing on June 24, 2026, PwC International Chair Mohamed Kande offers a tour of the corporate’s sales space to Ren Hongbin, Chairman of the China Council for the Promotion of Worldwide Commerce (CCPIT).
CNBC | Evelyn Cheng
Hello, that is Evelyn, writing to you from Beijing. Welcome to the newest version of The China Connection — a snapshot of what I am seeing and listening to from native companies.
As extra Chinese language tech firms set their sights on world customers, competitors with the U.S. enters a brand new section.
The large story
From information facilities to synthetic intelligence purposes, Chinese language firms are increasing quickly exterior their house market, simply as American companies race to do the identical.
“US tech traders have to preserve a really shut eye on the rising competitors from China tech as a result of as we have seen, many Chinese language firms first prioritize market share over revenue margins,” market strategist Peter Boockvar wrote on June 24.
Launching low-cost AI fashions with capabilities that rival American-made ones was solely step one.
Subsequent is industrial integration. It is a signal that worth and performance will more and more matter as financial competitors expands globally — clearly illustrated by occasions over the previous week.
The usage of AI in manufacturing goes to create extra jobs and alternatives “not solely right here in China, but additionally exterior of China, the place plenty of firms will leverage Chinese language expertise,” Mohamed Kande, world chairman of PwC, stated Wednesday throughout a panel on the state-organized China Worldwide Provide Chain Expo in Beijing.
Regardless of China’s decades-old position as a worldwide manufacturing hub, the provision chain expo itself solely launched in 2023 after Chinese language President Xi Jinping‘s name to reinforce industrial safety.
That very same morning, Chinese language Premier Li Qiang referenced the expo on the World Financial Discussion board’s “Summer season Davos” occasion in Dalian to emphasise how innovation can offset world financial headwinds.
He touted 10 billion downloads globally of China’s open-source AI fashions.
“China will combine extra proactively into the worldwide innovation and industrial chains,” he stated, based on an official English translation.
Chinese language firms use AI for cross-industry collaboration excess of companies elsewhere, particularly U.S. companies, PwC stated in a report revealed as the provision chain expo kicked off. Kande and PwC declined to remark additional.
The U.S. playbook
The U.S. is not sitting nonetheless.
The State Division final week signed on new Europeans contributors for its “Pax Silica” initiative to safe world tech provide chains, whereas urging international locations to rally behind U.S. tech relatively than creating competing methods.
Following a two-day Pax Silica summit that wrapped up on Friday in Washington, D.C., the U.S. launched an superior manufacturing program with Stanford College.
And sharing the stage with PwC’s Kande in Beijing was Boeing China President Landon Loomis, who additionally serves as a U.S. consultant to the APEC Enterprise Advisory Council.
Loomis highlighted APEC’s upcoming “digital week” in Chengdu subsequent month as an “vital alternative” for member economies to debate AI governance and “technological operability.”
Though the occasion will happen in China, U.S. tech firms are anticipated to attend and maintain workshops selling American AI capabilities, a U.S. official beforehand informed CNBC.
In the meantime, American firms in China navigate a center street.
Honeywell China used the expo to announce a partnership integrating its manufacturing administration system and AI capabilities with ByteDance’s company software program Lark. With the system, Honeywell purchasers can enhance returns by three to 5 instances, Honeywell China President William Yu claimed throughout a panel on the expo.
Nvidia’s Jensen Huang despatched a video message after collaborating in individual final yr, whereas the expo organizers stated Apple’s Chief Working Officer Sabih Khan attended for the primary time this yr. The iPhone maker didn’t reply to a CNBC request for remark.
The subsequent battleground
Efforts by U.S. firms to retain a foothold in China come as Chinese language firms push additional abroad, significantly in cloud computing infrastructure.
Earlier this month, Alibaba introduced its third European information middle in France, becoming a member of amenities within the U.Okay. and Germany.
The transfer “underscores Alibaba’s world cloud ambitions,” stated Aras Poon, an analyst at S&P International Rankings.
“The French website will doubtless carry information nearer to native clients, lowering latency, bettering reliability, and positioning Alibaba to serve extra complicated, time-sensitive workloads,” Poon stated.
Alibaba and ByteDance are additionally investing closely in information facilities in Asia, the place Amazon, Google, Microsoft and Oracle are pursuing comparable buildouts. By 2030, Asia Pacific may account for roughly 34% of worldwide information middle demand, in contrast with North America’s projected 46% share, McKinsey stated in a report final week.
The worldwide AI race is clearly not nearly who builds the neatest mannequin, however about ecosystems.
Must know
Morgan Stanley doubles China humanoid robotic cargo forecast as commercialization accelerates
The funding financial institution now expects 50,000 Chinese language humanoids to ship this yr, up from predictions earlier this yr of 28,000 and 14,000. Shenzhen-based Lingyi iTech, which listed in Hong Kong on Friday, informed CNBC’s Emily Tan that it is manufacturing humanoids for each Chinese language and American firms.
Tencent checks AI assistant in China’s hottest app because it appears to be like to meet up with rivals
Xiaowei, “a local AI assistant,” is being examined “on a small scale” in Weixin, the Chinese language model of WeChat, Tencent stated in an announcement translated by CNBC.
Second employee dies at BYD’s Hungary manufacturing unit already beneath scrutiny for labor practices
The fatality — which follows a demise on the website in February — comes after BYD government vice chairman Stella Li earlier this month denied allegations of labor abuse on the website. The automaker didn’t reply to requests for touch upon the newest fatality.
U.S. fights with Brazil for China’s big soybean market
China has purchased all 12 million metric tons of American soybeans that it agreed to buy within the advertising and marketing yr ending August 2026, and virtually all of that has been shipped, Jim Sutter, CEO of the U.S. Soybean Export Council informed CNBC. As for the following 25 million metric tons, he stated purchases have begun.
Arising
June 30: China’s official manufacturing PMI for June
July 1: one hundred and fifth anniversary of the founding of the Communist Occasion of China (CPC)
July 1: China’s new guidelines on outbound funding take impact
July 1: RatingDog China manufacturing PMI for June
July 3: RatingDog China providers PMI for June
July 2 -5: International Digital Financial system Convention in Beijing
