Alice Han

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Welcome to China Decode.

I'm Alice Han.

In today's episode of China Decode, we're discussing China's strategy to compete with Nvidia, why the Renminbi remains so undervalued, and later we'll speak with Patrick McGee, author of the fascinating book, Apple and China, the Capture of the World's Greatest Company, about Apple's complex relationship with China.

That's all coming up.

But first, let's do a quick check-in with how the Chinese markets are starting the week.

On Monday, the Shanghai A share index rose 0.5%.

The Hang Seng H share index closed down 1.2%, its largest loss in over two weeks.

PopMart International closed down over 8% on continued fears over North American sales trends.

And Chinese chipmaker SMIC increased 3% as investors look to profit off of the budding domestic chip race.

But more on that in just a moment.

All right, let's get right into it, James.

China's chip race just opened up a new front, MoreThreads, a startup founded by a former Nvidia executive in China, exploded more than 400% on its first trading day in Shanghai, raising over a billion dollars and instantly becoming Beijing's latest chip champion in its push to build a homegrown alternative to Nvidia.

The company isn't profitable yet.

It's under U.S.

sanctions, and it's still nowhere near the cutting edge relative to, say, Taiwan or the States.

But its monster IPO signals something larger.

China is pouring unprecedented capital and political muscle into manufacturing graphic processing units, or GPUs, hoping to close the gap and secure another pillar of technological independence.

James, beyond this name being great, more threads, what strikes me as being fascinating is the fact that you have such a huge gain on its first trading day.

I looked it up relative to, say, NVIDIA or even SMIC, and this is orders of magnitude larger.