Pang Dong Lai, a popular Chinese retailer, is preparing to close one of its older stores when its leases expire. Online, the story has been framed in a much simpler way: greedy landlords raised the rent, and the company refused to bow down or negotiate. It just walked away.

     A similar story has circulated about Tencent leaving the Kexing Science Park in Shenzhen. In that version, landlords get greedy, companies stand firm, and everyone watching gets the satisfaction of seeing someone finally say, “Enough.”

       But once you set the emotion aside, the situation looks more complicated.

1. This Is Not Just a Story About Higher Rent

       The older Pang Dong Lai store sits in a building divided among dozens of individual owners. The company had to negotiate separate leases with separate landlords instead of dealing with one property owner or management company.

       That setup creates obvious problems. An owner with a storefront near the main entrance may prefer a short lease and demand more at renewal. An owner on an upper floor or in a less desirable corner may accept very different terms. Even if the retailer wants one unified agreement, not every owner has a reason to go along.

       The most widely shared claim is that annual rent jumped from 8 million yuan to 18 million or even 24 million yuan. According to the original discussion, a rent dispute of that scale did happen at another Pang Dong Lai location years earlier. It may not have been the direct cause of this store’s closure.

       Combining numbers, events, and locations makes for a stronger viral story. It also makes the facts harder to sort out.

2. The Old Store Has Problems Rent Alone Cannot Fix

        This store has been operating for more than 20 years. It covers about 23,000 square meters, and it faces a more basic problem: it is no longer built for the traffic it attracts.

       The facilities are old. The layout is tight. There is no underground parking. Customers and cars now overwhelm a space designed for a different era.

       A successful store can still be held back by its building. If getting there means sitting in traffic and the inside layout cannot be meaningfully improved, strong sales do not solve everything.

       Major renovation would also be difficult. With dozens of owners involved, even basic changes require negotiation after negotiation. Adding parking, redesigning traffic flow, or rebuilding the property would be far harder than simply updating the décor.

       So closing the old store may not be a dramatic act of defiance. It may be a business decision: instead of endlessly patching a building that cannot be fully modernized, put resources into a space designed for the future.

3. The Bigger Shift Is From Renting Space to Building It

       Pang Dong Lai is building a new project called Dream City. It is planned to cover about 580,000 square meters, with an investment of 6.5 billion yuan. The company says it will use its own funds and plans to open in 2029.

       Tencent is making a similar move. Kexing Science Park had long struggled with congestion and pressure on its surrounding infrastructure. Tencent’s new Penguin Island campus began construction in 2021, with an investment of more than 30 billion yuan. By the end of June this year, about 28,000 employees had moved in. When the second phase is complete in 2028, the campus is expected to hold 80,000 to 100,000 people.

       Both companies are making the same basic choice: moving from rented space to space they can own and plan themselves.

       That is expensive. But it gives a company more control over parking, transportation, office layout, future expansion, and supporting services. It also reduces the time and uncertainty involved in negotiating with many landlords every time a lease comes up.

4. A Company’s Value Does Not Stop at Its Front Door

       Large stores and corporate campuses bring customers, employees, restaurants, housing demand, and other services. As a result, they can also increase nearby property values.

       That is one reason companies care so much about land and self-built campuses. They are not only trying to lower rent. They want to retain more of the long-term value created by their brand, foot traffic, and business activity.

       Warehouse clubs such as Sam’s Club offer a familiar example. Some locations are built in areas that are not yet fully developed. Once the store and its parking infrastructure bring in regular traffic, nearby land and housing can become more valuable.

       In the best case, this is not a zero-sum game. Developers, retailers, local businesses, and customers can all benefit from a new commercial center.

5. Why the “Walk Away” Version Spreads So Easily

       Because it gives people an emotional release.

        Many people have jobs, families, bills, and responsibilities that make it hard to simply walk away from an unfair situation. They may feel frustrated, but they cannot always afford to quit, move, or start over.

        That is why a story about a company saying, “I’m done,” is so appealing. The landlord becomes the obstacle. The business owner becomes the person who finally pushes back. It is simple, satisfying, and made for social media.

       The problem is that the more satisfying the story becomes, the more likely it is to leave out the difficult parts: Why did the old building stop working? Why is ownership so fragmented? Why were those leases signed in the first place? What risks did each side accept when they did?

6. Turning Landlords Into Villains Does Not Solve the Real Problem

       If some owners ask for higher rent and the tenant refuses, that is a normal commercial conflict. The company can leave. The owners can risk vacancies. Whether either side made the right choice will be decided by the market.

       The more useful questions are different. Why can a building that once worked become so hard to upgrade? Why does fragmented ownership make modernization nearly impossible? Why does a company that creates enormous traffic still have to spend so much energy on short-term lease negotiations?

      The Pang Dong Lai story matters for more than rent or corporate bravado. It shows what happens when an old space can no longer support a growing business. Sometimes leaving is not about winning an argument. It is simply the next practical step.

      On August 2, Lenny's Podcast — basically required listening for product people in Silicon Valley — dropped an episode with a spicy title: "This CPO regrets that the product manager role exists."

      The guest, Verrilli, is no outsider. He's the Chief Product Officer at Whatnot, previously CPO at Twitch, and before that, director of product growth at Twitter. A guy who climbed the product ladder all the way to the top, turned around, and said: this job should never have existed.

      And his company makes it hard to dismiss as venting. Whatnot is a livestream shopping platform — hosts run live auctions; it started with trading cards and collectibles, now it sells everything. In 2025 it did $8 billion in sales at an $11.5 billion valuation — with just 20 product managers out of 1,200 employees. Silicon Valley's rule of thumb is one PM for every five engineers. Over the past two years, 31,832 people applied for a PM job at Whatnot. They hired one.

      This isn't a dying company cutting costs. It's one of the fastest-moving companies around saying: I don't need many product managers — and I'm still outpacing you.

1. Why he hates the role

      Verrilli gives three reasons, each sharper than the last.

      First, the role rewards the wrong skills. What's valued most isn't understanding technology or customers — it's politics: driving alignment, building relationships, telling good stories upward. People do politics and call it product management. He calls it an anti-pattern.

      Second, it's not the people — it's the system. He points to Twitter's endless "alignment meetings" and offers the most quotable line of the whole interview: your system breeds systems. Build an organization that rewards performative alignment, and it will grow you a generation of PMs whose profession is alignment. These people aren't bad; the org simply pays them to that standard.

      Third, PMs turn engineers and designers into children. They're perfectly capable of making good calls — they just never have to, because a PM is always there to babysit. Junior PMs have gone from "CEO of the product" to "button babysitters."

      I've lived this myself. At Cheetah Mobile — a Chinese app company whose founder, Fu Sheng, branded himself "China's number one product manager" — product management was the only path to promotion. And how do you get promoted? By grabbing authority: "No, you don't understand product. I'll tell you how it's done." Over time, the whole system becomes a political system.

2. He's not against alignment — he's against alignment as a career

      One thing needs to be clear, or you'll misread him: he's not advocating chaos. At Whatnot, you get autonomy over execution; nobody gets autonomy over strategy. His own words: "Without alignment, autonomy is wasted."

      What he opposes is a class of people who coordinate for a living. What he wants is a small number of senior, hands-on PMs who dare to make the call — because in a big, inertial organization, going with the flow is the easy path, and being the decision-maker is exactly what you hire a PM to do.

3. The job was born political — in 1931

      On May 13, 1931, a P&G advertising manager named Neil McElroy wrote an 800-word memo. He was pushing a soap called Camay, and his biggest rival wasn't on the market — it was inside his own company. Ivory, P&G's flagship, held all the resources, and Camay got blocked by its own colleagues at every step.

      The memo looked like a staffing request — "I'm drowning, give me two more people" — but what it really proposed was this: every brand needs one person who owns it end to end, watching sales, running product, ads, and promotions, and getting out into the market to meet real customers. His boss read it and reorganized all of P&G around brands. Every P&G CEO since has come up through brand management. McElroy himself became president in 1948, and later Eisenhower's Secretary of Defense.

      See the point? This role was built from day one to fight internal wars — to coordinate resources inside a company. The politics and alignment Verrilli rails against aren't a corruption of the job. They're its birthmark.

4. The internet grew the role a second leg

      So why does everyone today think of PMs as "the person who defines the product"?

      P&G's brand managers defined products too: analyze competitors, claim a lane — say, "smoothness" — then get packaging from design, the formula from the lab, and airtime from advertising. That's how the shampoo brand Rejoice was born. But what they delivered was a brand, not a feature. Today's internet PMs ship apps and features, lead their own engineers and designers, and decide "who calls the shots" on their small team. The classic case in China is Tencent — its early nickname among users was "the damn penguin," because it was so good at copying. And "copying well" is exactly what tests a PM: tear a rival's product apart, understand it completely, then redefine it with your team.

       So the job has always walked on two legs: one is coordination and politics, the other is understanding and judgment. In P&G's era, the first leg was stronger. Internet companies emphasized the second. But the first leg never went away — the bigger the company, the faster it grows back.

5. AI is taking exactly that first leg

      For a while, the trendy way to use AI was role-play: "You're the designer, you're the tester" — and let several agents discuss like a human team. People who tested it found the results were bad, because it ports humanity's bureaucracy onto AI. Humans need meetings and handoff docs because we can only hold so much information at once. AI just calls all that "context" — it can absorb a million tokens (roughly hundreds of thousands of words) in one go. No relay required.

      So frontier labs like Anthropic changed course: one unified agent that takes the task, breaks it down itself, delegates to sub-agents, and delivers the summary.

      Notice — "break down, coordinate, summarize" is exactly the PM's daily grind. The most toxic half of the role is precisely the half AI is best at absorbing. The other half? AI can't take it.

6. What's left for humans

      Engineers: from writing code to drawing boundaries. With vibe coding — describing what you want in plain English and letting AI write it — building real systems actually demands more: you don't have to write memory management by hand, but you must understand it, and you must draw boundaries. Tools like Claude Code and Codex default to "band-aids": the smallest possible fix, because they don't know where their boundaries are. There's a sci-fi story about a computer that could answer anything; asked "what should humanity do?", it thought for ages and answered "42." We don't want that answer — so humans draw the boundaries.

      Designers: from hands to eyes. AI can crank out a hundred drafts in minutes. Who picks? Still the designer — who then combines and refines. The skills that matter now: understanding what the client actually wants; taste — it used to be about the hand (can you draw it), now it's about the eye (can you pick it); plus the communication skills to explain the choice.

      Product managers: keep the judgment, add the labeling. Understanding business, customers, and data, then making the call — that leg stays. The new job is data labeling: AI can't tell which market feedback is a good signal and which is noise. PMs turn real-world data into signals AI can learn from, feed them back in, and iterate fast alongside AI.

7. What really gets rewritten: "the product" itself

      Push one step further: what gets disrupted may not be any job, but "the product" itself. We're used to products having boundaries: separate Android and iOS versions, compatibility headaches, app store rules. But what we actually want is the service and the result, not the product-shaped shell — and the productivity wasted maintaining those boundaries often exceeds what goes into the result.

      When we built Clean Master, a phone-cleaning app, fewer than 10 people actually worked on "cleaning." The product team had two to three hundred. What did the rest do? Maintained boundaries — and monetized, by showing users ads. It's like buying a bottle of Rejoice: you want softer hair, but an army of people is debating whether the bottle should be green. In the AI era, product boundaries may dissolve — or get redrawn entirely.

8. Wrapping up

      So in the age of AI, what actually gets replaced?

      My answer: the defaults. The default of one PM for every five or six engineers. The default that meetings are the job. The default that products must have today's boundaries. A role invented in 1931 has grown parts that are actively harmful to organizations — and those parts are exactly what AI absorbs best.

      The question worth asking isn't "will my job disappear?" It's: strip away the job title — what service and value do I actually deliver? Or more bluntly: how much of my day produces results, and how much just maintains boundaries? I'd love to hear your answer.

       The news was met with cheers across the Chinese internet. Then a new meme appeared and poured cold water on the celebration: “Li Shufu blasts the 5-million export figure.” Online summaries boiled his supposed comments down to three sharp accusations: either manufacturers are colluding with domestic used-car dealers to push excess inventory overseas through foreign ports; or they’re gaming the 13% export tax rebate with fake shipments; or they’re shipping batteries disguised as complete cars, then stripping them out for overseas energy projects.

       Three cuts, each aimed at the heart of the record. Let’s walk through what actually sits behind those 5 million cars.

1. First, did Li Shufu even say it?

       The circulating version claims Li made these remarks during a keynote at a Chongqing forum in June. Public records show he talked mainly about Geely’s restructuring and succession planning — not these three points. Whether he said something similar in a closed-door session without cameras is impossible to verify. It’s equally possible that media mixed earlier comments from Li with last year’s “auto-industry Evergrande” warning from Great Wall’s Wei Jianjun.

       So the attribution remains uncertain. What is certain is the number itself: 5.096 million cars really did leave China. And the official role those cars played is spelled out clearly in a mid-year review by the China Automobile Dealers Association — “exports supporting domestic demand.”

       In plain language: the home market could no longer carry the weight, so exports had to hold it up from below.

2. Why couldn’t the domestic market hold?

       In 2024 and 2025 China ran large-scale trade-in subsidy programs. Real money was spent to pull forward car-replacement demand that many families would otherwise have delayed.

       But cars are durable goods. A household doesn’t replace its vehicle every year, and the pool of households that can afford to is finite. Once that demand was pulled forward and exhausted, the domestic market cooled sharply. New-energy vehicle sales fell 20–30% year-on-year. As the clear industry leader, BYD felt the drop first and hardest — when you sell 200,000–400,000 cars a month, even a modest percentage decline hits the absolute numbers hard.

       So the cars had to go somewhere else.

       Of the 5.09 million exported in the first half, roughly 54% were still gasoline vehicles, many of them from joint-venture or foreign brands. SAIC’s MG badge is the clearest example — large volumes of China-built MGs are shipped back to Europe. That is also why the EU slapped SAIC with the highest countervailing duty. The remaining 46% were new-energy vehicles, but fluctuating oil prices, clogged ports, and incomplete local after-sales networks all make it hard to claim pure overseas demand is the full story.

       The real pressure remains at home: trade-in subsidies burned through replacement demand while the production lines kept running.

3. What the three cuts actually hit

• Cut one: zero-kilometer used cars and the tax rebate

       A “zero-kilometer used car” is a brand-new vehicle that a manufacturer pushes onto dealers, 4S shops, or affiliated financiers purely to inflate sales figures. The car is registered, then sits in a lot without ever being driven. Some even collect national, provincial, and local subsidies along the way.

       These cars do get exported, but usually not to tightly regulated markets like Europe. They tend to head for Southeast Asia, the Middle East, South America, or Russia. That helps explain why some overseas buyers complain that Chinese cars lack proper after-sales support — a portion may have come through channels with no real overseas service network.

       Until recently these zero-kilometer cars could still claim the 13% export VAT rebate. Authorities have now tightened the rules: a vehicle must be registered for 180 days before a normal export application, or the original manufacturer must issue a formal after-sales confirmation. The goal is not only to close a loophole but to clear space for legitimate manufacturers to sell new cars through proper channels.

       Rebate fraud has also occurred. A common tactic is to declare a car actually worth 150,000 yuan at 250,000 or even 350,000 yuan, because the rebate is calculated on the declared value. The current priority, however, is simply to slow the zero-kilometer pipeline so regular exports can move first.

• Cut two: payment terms under pressure

       Suppliers who delivered parts to BYD used to receive an internal instrument called “Di-Chain” rather than cash. Payment could be delayed two, three, or even four months. Anyone who needed money sooner had to discount the instrument, losing part of its face value as financing cost.

       After the government required large firms to settle with suppliers within 60 days, BYD switched to commercial acceptance bills. “Acceptance” does not mean immediate cash; the bills still carry their own maturity periods. By the end of 2025 BYD’s commercial acceptance bills had surged 727%. Many people assume a bill is backed by a bank. In reality a commercial acceptance bill is ultimately backed only by the issuing company’s own credit. The payment delay never disappeared — it just changed its name.

       As the biggest seller, every industry-wide pressure is magnified on BYD.

• Cut three: the economic logic of shipping batteries inside car shells

       China tracks a figure called the “installation rate” — the share of power batteries that actually end up in vehicles. In 2021 it was still 70%. By 2025 it had fallen to 44%. In May 2026 it stood at just 38%. More than 60% of the batteries produced never go into cars.

       At the same time the export tax rebate on complete vehicles remains 13%, while the rebate on batteries has already dropped to 6% and will fall to zero on 1 January next year. On a car priced around 150,000 yuan the battery can account for two-thirds of the cost. The arithmetic creates an obvious incentive: install the battery in a car shell, claim the higher vehicle rebate, ship it overseas, then remove the battery for other uses.

       No solid public evidence has yet confirmed that any company is doing this at scale. The economic motive, however, is clear. BYD already operates plants in Hungary, Brazil, and Thailand and therefore has the physical capability. The point is only that the logic exists, not that it has been proven.

4. The world is becoming a reservoir for Chinese overcapacity

       On the surface BYD looks formidable. Three days before this writing it took delivery of its seventh car carrier, the Zhengzhou. These ships are named after cities where BYD has factories and sail the world with giant red BYD logos. The Hungarian plant is already running; Brazil and Thailand are expanding. This is the glossy face of a globalizing champion.

       Underneath sit weak domestic replacement demand, the cleanup of zero-kilometer cars, tighter payment rules, and a 727% jump in commercial acceptance bills. Every industry ailment is amplified on the market leader.

       What the government is doing now is putting those problems on the table one by one. BYD looks less like a company about to collapse and more like a strong patient wheeled into the operating room. The surgery will hurt and there will be blood, but the underlying constitution is robust enough that recovery remains likely.

       The simplest conclusion is this: domestic demand has stalled while production lines keep turning out cars and batteries. The surplus has to go somewhere, so the rest of the world is being asked to serve as China’s reservoir. Cars are pushed outward; batteries travel inside car shells. Policy is simultaneously closing the gray channels and clearing space for the legitimate manufacturers. All of it amounts to drilling extra floodgates in an overflowing capacity pool.

       Whether those gates will eventually drain the pool, only time will tell.

       Most people think the way capital takes over a foreign company is simple: just buy enough shares. After the 1997 Asian Financial Crisis, Samsung was a clear example — yet even then, American capital never fully took control. Thirty years later, the playbook has been upgraded. It is no longer just about buying stocks.

       Let’s look at the full path through Samsung and SK Hynix. These two Korean companies control the most critical part of the AI industry — HBM (think of it as the “heart” of AI chips). Without it, even the most expensive AI chips cannot run. Together they hold nearly 80% of the global market. In theory, an asset this important should stay firmly in Korean hands. Capital, however, is taking a quieter and far more thorough route.

Step 1: Wash the shares out of local hands first

       In 2024, when HBM was in severe shortage and Samsung and Hynix were making record profits, their stock prices suddenly plunged 40%. Wall Street quietly bought during that period. Almost no one noticed.

Then in 2025, global media suddenly began shouting in unison: “AI memory is the golden decade,” “Missing Hynix is like missing Nvidia in its early days.” Ordinary Korean office workers, retirees, and newly married couples poured in. Many borrowed heavily from banks and brokers — in simple terms, they had 1 million of their own money but borrowed enough to buy as if they had 2 million or more.

       When prices fell, those who borrowed could not hold on. In just half a year, Korea’s major banks had already lent out 85% of their entire annual lending capacity. Retail investors could no longer borrow to cover losses. They were forced to sell their shares at rock-bottom prices to repay the debt. 300,000 accounts were wiped out. 1.2 million people were left with debts.

       The real goal of this step was never simply to crash the stock price. It was to force the shares that had been scattered among ordinary Koreans back onto the market through panic and forced liquidation. American capital slowly picked them up at the bottom.

       Note that the 1997 crisis already proved that simply holding shares is not enough to truly control a company. That is why U.S. holdings were deliberately spread across hundreds of funds, each owning less than 5%. Real voting power still sat with the Korean founding families, who held more than 20% in concentrated blocks. On the surface, the companies remained Korean-controlled.

       But capital had completed the first step: it had stripped the chips out of local hands.

Step 2: Move the “pricing power” to its own home ground

       Owning the shares is still not enough. The more important question is: who gets to decide how much the company is actually worth?

       In July 2026, SK Hynix listed in the United States. By then its share price had already fallen 43%, and the Korean won had depreciated 30% against the dollar. Americans could buy the stock at roughly a 60% discount.

       Previously the stock could only be traded in Korea, so its price was set by Korean money. Korean retail investors buying $65 billion in a whole year was already their limit. The U.S. stock market, by contrast, turns over $200 billion in a single day. Once global capital starts trading the same stock in the United States, the price is decided where the trading volume is deepest.

       A simple analogy: Imagine you used to sell fruit in your own neighborhood wet market. You and the local residents set the price. Now the same fruit is sold in the city’s largest supermarket. The price is set by the supermarket and the entire city’s buyers. Even if you are still the farmer, you have to follow the supermarket’s lead.

       That is the transfer of pricing power. From now on, when Hynix wants to raise new capital, issue new shares, or borrow money, it must watch the reaction of the U.S. market. Capital does not need to buy the entire company. It only needs the place where the price is discovered to be its own home ground.

Step 3: Physically move the factories and production capacity

       Once the shares and the pricing power are in hand, the final step is to move the actual production lines onto its own soil.

       The United States put a clear choice on the table using subsidies and tariffs: Want to keep selling chips to the world? Either build factories in the U.S., take the subsidies and tax breaks, or face a 100% tariff. A 100% tariff means your chips instantly become twice as expensive and no one will buy them. Samsung went to Texas. Hynix went to Indiana.

       Once the factories are on the ground, the subsidies become new leverage. Intel has already shown how this works: it received billions in government subsidies to build plants. When construction was only halfway done, the government suddenly said, “Give us a portion of the company’s shares so we become a shareholder.” Refuse? The subsidies would be cancelled and the half-finished factories would become ruins. In the end, Intel signed.

       When the real factories, equipment, and workers are all on American soil, even the strongest technology becomes increasingly constrained by American rules. At that point, the company’s nominal nationality no longer matters much.

The real method capital uses

       Capital does not take foreign core assets through a single forced acquisition overnight. It works through three progressive layers:

1. Use market swings and leverage to wash the shares out of local retail investors’ hands;
2. Through a U.S. listing and a deeper market, move pricing power to its own home ground;
3. Use subsidies and tariffs to physically relocate factories and production capacity onto its own soil.

       Koreans still hold the surface-level voting rights. Americans already hold the real control over price and future production capacity. This is capital operating at a higher dimension — it does not rush to change the company name. It simply peels away control, layer by layer.

       The next company or country that holds critical technology and keeps capital awake at night — will it walk the same path? Worth watching closely.

       This set of numbers is like a mirror, clearly reflecting how China’s high-end manufacturing is responding to the worldwide AI boom. Let’s break it down in a simple, straightforward way.

1. Export Side: AI Demand Accelerates High-End Product Exports

       Exports simply mean Chinese-made goods being sold overseas. In June, the standout story is that high-end manufacturing and high-tech products took center stage.

• Electromechanical products (machinery, electrical equipment, electronics, and industrial components) grew 34% year-on-year and 8% month-on-month, accounting for nearly half of total exports.
• Integrated circuits (chips — the “brain” inside every electronic device) saw export value surge 122%, effectively doubling.
• High-tech products rose 52%.
• Automobile exports jumped nearly 73%, with new energy vehicles (NEVs) performing especially well.
• Rare earth exports also more than doubled in value.

       The main driver is the explosive global demand for AI infrastructure. Countries are racing to build data centers and train large AI models, which require massive amounts of servers, advanced chips, and sophisticated electronic components. As the world’s largest electronics manufacturing base, China naturally became a key supplier.

       On the auto side, strong NEV exports show that more countries are accepting and even preferring Chinese new energy vehicles for their quality and value.

       Where are these exports heading? The United States remains the largest single market at $43.4 billion (up ~14%). However, the fastest growth came from exports to Taiwan region (+44%) and South Korea (+43%) — increases closely tied to the AI chip and semiconductor supply chain.

2. Import Side: Domestic Tech Buildout Drives Component Demand

       Imports rose 36% year-on-year. Electromechanical products grew 47% and high-tech products grew 57%, with both still rising month-on-month.

       This directly reflects China’s rapid expansion of AI computing power and smart hardware assembly lines. The country needs to import large volumes of core components and production equipment to support its own high-end manufacturing upgrade. In short, China is both “selling out” high-end goods and “buying in” critical parts — building a complete industrial chain from both ends.

       Energy and bulk commodities showed a different pattern. Crude oil import volume fell year-on-year, while natural gas imports rose but at higher prices. Grain and soybean imports continued to increase, partly to replenish national reserves and company inventories.

3. What These Numbers Really Tell Us

       The clearest signal from the data is that global technological restructuring — especially the AI wave — is delivering real benefits to China’s high-end manufacturing sector. China’s stable and resilient supply chains stand out even more clearly against rising global geopolitical uncertainty. The country is accelerating its shift toward AI hardware, chips, new energy vehicles, and other high-tech, high-value areas — what policymakers call “new quality productive forces.”

       At the same time, as a major energy importer, China faces external disruptions and needs to plan ahead: diversify supply routes (both sea and land pipelines) and maintain bottom-line options such as coal-to-oil and coal-to-gas technologies for extreme scenarios to safeguard energy security.

       Additionally, volatile international energy prices could create imported inflation pressure, directly affecting domestic companies’ production costs, profits, and hiring. It’s worth watching how the central bank and other policymakers respond in the coming months.

       Trade data is never just cold numbers — it’s the economy’s “weather report.” June’s figures highlight both the upgrading potential of Chinese manufacturing and the need to balance global opportunities with solid security foundations.

1. How Manus Reached a $2 Billion Valuation So Fast

       Manus started as Beijing Butterfly Effect Technology. Its founder, Xiao Hong (born in 1993 and a Huazhong University of Science and Technology graduate), had already built earlier tools like Monica and Yiban Assistant. In March 2025 the product launched publicly as the “world’s first general AI Agent” — basically an AI that can automatically handle complete workflows, such as writing code or managing repetitive tasks with minimal human input.

       Money came in quickly. ZhenFund joined the earliest seed round. In November 2024 Sequoia China led the A round with Tencent following. In April 2025 Silicon Valley’s Benchmark led the B round with $75 million, pushing the valuation to $500 million. That fast climb set the stage for what happened next.

2. Meta Wanted It — Then Regulators Blocked the Deal

       In December 2025 Bloomberg and CNBC reported that Meta planned to spend over $2 billion to acquire Manus and fold it into its super-intelligence lab. Mark Zuckerberg reportedly got personally involved and the deal was reportedly wrapped up in just ten days. It was called one of Meta’s biggest AI moves at the time.

       Chinese regulators saw it differently. In January 2026 the Ministry of Commerce began reviewing the deal. By late April the National Development and Reform Commission’s foreign investment security review office blocked it outright. The clear reason: Manus was founded by a Chinese team, serves many Chinese users, and holds local data and usage scenarios. Regulators did not want that technology and data moving directly to a foreign company. In May Meta agreed to cancel the transaction, started refunding money, cut off data sharing, and removed Manus employees from its internal systems.

3. Old Investors Now Want to Buy It Back at the Same Price

       By mid-June reports surfaced that early Chinese investors were planning to repurchase the company from Meta at the original $2 billion price. In early July the Financial Times and Bloomberg reported that Tencent is now leading the effort, bringing in ZhenFund, Sequoia China and other original backers to form a new consortium. They would buy Meta’s shares at the unchanged $2 billion valuation and prepare the company for a Hong Kong listing after reorganization.

       The valuation stayed frozen the entire time — from Meta’s attempted purchase through the rumored domestic buyback. That single unchanged number is the most telling clue in the whole story.

4. The Real Driver: Keeping the Investment “Alive” on Fund Books

       Venture capital funds don’t treat every investment the same way regular people might expect. They know most startups fail, but for the fund itself, a company going out of business and the investment being completely written off on paper are two different things. As long as the company isn’t formally liquidated, the investment can still sit on the books at a high value.

       Here’s how it works in plain language: A fund’s managers (called GPs) raise money from outside investors (called LPs — think pension funds, university endowments, or wealthy individuals). When a startup exits at a high price, the managers receive a performance bonus (called “carry”). They can also use the big exit story to raise their next fund from new LPs. Later, when the fund reaches its exit phase, it needs to return money to the original LPs — and a high-value exit makes those numbers look much better.

       When regulators killed the Meta deal, the funds suddenly faced a problem: bonuses already paid out, fundraising stories already told, and money already returned to LPs would all look bad if the investment dropped to zero. The cleanest solution was to keep the valuation exactly where it was by having the original Chinese investors buy the company back among themselves. That way the $2 billion number stays on the books and everyone’s accounting stays tidy — at least for now.

5. Why Is Tencent Leading the Buyback? It’s Probably Not Mainly for Internal Use

       Tencent has plenty of cash on hand (it recently sold a large chunk of Kuaishou shares for roughly $1.6 billion and continues investing in AI, including a stake in Kling). But buying an external AI team isn’t always straightforward inside a big company.

       Tencent had just finished an internal competition between its WorkBuddy and QClaw AI tools — QClaw lost and WorkBuddy became the main internal product. Adding another external team like Manus could easily create conflicts over resources, direction, and credit. A previous example shows the pattern: Tencent invested in the Windsurf team (project name Antigravity) with plans to integrate it, but it clashed with the internal CodeBuddy team and has remained separately operated ever since. Big companies often prefer to keep external teams at arm’s length rather than force integration that disrupts existing groups.

6. Does Manus Still Have Strong Technology?

       Before tools like Claude Code, Codex, and xAI’s Grok Build appeared, Manus had a genuine edge — it could automatically connect AI agents to real-world workflows. That originality helped it stand out early.

       Its biggest limitation, however, is the lack of its own foundational AI model. Companies that control their own models (such as Zhipu’s Zcode, MiniMax’s code model, or Tencent’s CodeBuddy) have more leverage and can build their own agents on top. Startups without their own model often find their valuation already high while later investors become reluctant to pay more, and much of the long-term value ends up captured by the model owners instead. Similar agent-focused companies — Perplexity, Cursor, Windsurf, and Character.AI — have each followed different paths, with varying degrees of success.

7. Who Might Actually Be Taking the Risk?

       Right now this looks less like a traditional business acquisition and more like a coordinated effort to keep a nearly written-off investment looking valuable on paper at the original $2 billion level. Tencent, Meta, and the regulators are all playing roles in that larger story.

        If the company eventually lists on the Hong Kong stock exchange, everyday retail investors would be the ones deciding whether the technology can actually support that valuation going forward. As long as the project stays “not dead,” the high number can remain on fund balance sheets. Once public shareholders are involved, the judgment shifts to whether the product can keep leading in a fast-moving field.

        Capital narratives sometimes move faster than the underlying technology. Paying attention to the incentives behind the numbers helps us read these headlines with clearer eyes.

        These past couple of days, two big things happened in the worlds of crypto and blockchain. One involves Circle, the company behind the stablecoin USDC. The other involves SWIFT, the backbone of global cross-border payments. Both announcements came out around the same time, and it doesn’t feel like pure coincidence. It looks more like two worlds that used to run on parallel tracks — traditional finance and blockchain technology — are finally starting to move toward each other.

       Let’s break it down one by one, in plain language.

1. Circle’s Federal Trust Bank Charter: From “Wild West” to Regulated Custody

       First up is Circle. It issues USDC, one of the biggest stablecoins out there. A stablecoin is simply a type of cryptocurrency designed to stay steady in value — usually pegged 1:1 to the U.S. dollar. So when you buy 1 USDC, Circle is supposed to hold $1 in cash (or equivalent U.S. Treasuries) in reserve.

       Until now, Circle wasn’t a bank itself, so it had to keep those reserves at third-party traditional banks. That’s changing. Circle just received approval from the U.S. Office of the Comptroller of the Currency (OCC) to set up its own national trust bank.

       Important note: this isn’t a regular bank license. You can’t go there to deposit money, withdraw cash, or take out loans. Its main job is asset custody — safely looking after the reserves with full federal-level compliance.

Why does this matter?

• Crypto companies used to be seen as operating outside the traditional financial system — kind of the “wild path.” Now a top U.S. federal banking regulator has given Circle official recognition. That’s a meaningful step toward blockchain technology joining the mainstream financial world.
• The rules are clearer and the oversight is higher, which actually gives Circle more room to grow.
• Big Wall Street players (think JPMorgan) have wanted to use stablecoins for cross-border payments but held back because of compliance worries. With this federal charter, they’ll likely feel more comfortable partnering with Circle. That should speed up real-world use of blockchain in everyday business and finance.

2. SWIFT’s Blockchain Shared Ledger: Traditional Banks Fighting Back — the Compliant Way

       Now let’s look at SWIFT. It’s the global messaging network that almost every bank uses for international wire transfers and payments. If you’ve ever sent money overseas, chances are SWIFT was involved behind the scenes.

       SWIFT just announced it will launch a blockchain shared ledger and run a pilot program with 17 major banks to test tokenized deposits for cross-border use.

       What does “tokenized deposits” mean? Think of it this way: the money sitting in your bank account is technically a liability the bank owes you. Tokenization turns that deposit into a digital token that can move freely on a blockchain — while still staying under bank regulation.

       Right now, different banks have their own separate blockchains (HSBC has one, Citibank has another, etc.) and they don’t easily talk to each other. SWIFT’s shared ledger acts like a translator. It doesn’t replace existing payment rails — it connects the different tokenized systems so they can work together.

What changes if this works?

• Much faster cross-border payments. Right now, if you send money to a supplier overseas on a Friday evening, it often sits until Monday or Tuesday because banks are closed on weekends. With tokenized deposits on a shared blockchain ledger, companies could send payments 24/7, 365 days a year — with near-instant settlement.
• Traditional banks striking back. Companies like Circle have been eating into the cross-border payments market (hundreds of billions of dollars) by offering always-on service. Banks noticed. By offering their own regulated tokenized deposits, they’re telling customers: “You don’t need to switch to risky private crypto. Keep your money in a real bank, turn it into a token when you need speed, and you still get full regulatory protection.” It’s traditional finance’s compliant counter-move against stablecoins.
• Blockchain’s image is shifting. Many people still associate blockchain only with speculation and trading. SWIFT’s move is sending a different message to regulators and users worldwide: blockchain can be integrated into modern finance without breaking existing rules or risk controls.

3. Two Big Announcements on the Same Day — What Does It Really Mean?

       These two stories landing almost simultaneously feels deliberate. New players in crypto are moving closer to tradition, while big traditional institutions are speeding up their adoption of new technology.

Here are a few thoughts:

1. In the future, we might see two different kinds of compliant digital money co-existing. Stablecoins like USDC are flexible and more decentralized — great for everyday people and smaller transactions. SWIFT’s system connects a huge global banking network and is better suited for massive cross-border trade and institutional settlements worth hundreds of millions. It’s a bit like choosing between a nimble mobile payment app and a full-service bank app — both useful, just for different situations.
2. Not long ago, many mainstream financial institutions and regulators viewed blockchain mainly as a tool for speculation or money laundering. Now the OCC has granted Circle a serious federal charter, and SWIFT is actively bringing banks onto blockchain pilots. This suggests blockchain is no longer operating outside the financial system as some kind of “lawless zone.” It’s gradually becoming part of the core financial infrastructure.
3. Modern finance’s need for faster, more efficient cross-border payments has clearly gotten SWIFT’s attention. Its actions are, in a way, also giving Web3 a helpful push forward.

       Overall, what we’re seeing is traditional finance embracing on-chain technology while the on-chain world is rapidly becoming more compliant and regulated.

       Thirty years ago, the internet changed how information moves. These developments may end up changing how value moves. In the past, managing money relied heavily on people and rules. Going forward, it will rely more on technology, networks, and code. Money used to be mostly static numbers. In the future, it could become always-on, borderless, programmable technology.

       Have you ever wondered what happens when two companies team up to build electric cars, the cars keep selling, yet one partner reports a massive loss while the other keeps making money hand over fist? That’s exactly the situation with Seres (the company behind the AITO / Wenjie brand) and Huawei right now. Seres just dropped its half-year earnings warning: an expected loss of 1.5–1.8 billion RMB. Last year at the same time it made 2.94 billion RMB profit. Meanwhile, Huawei’s smart vehicle solutions business is still growing fast and collecting revenue from multiple streams with almost no inventory risk.

       Let’s break this down like we’re chatting over coffee — what really caused the loss, how Huawei structured the deal so it almost always wins, and what it means when a carmaker hands over too much of its “soul.”

1. Seres’ Loss Breakdown: It’s Not Simply “Sales Collapsed”

       First, clear up the biggest misconception. Seres’ cars are still selling. First-half volume was actually up a bit. The pain comes from three places: raw material costs, asset write-downs, and the removal of a big government subsidy cushion.

        In Q1 Seres still showed a 754 million RMB profit — but 600 million of that came from government subsidies. These subsidies go straight into the profit line with no matching cost. Strip them out and Q1 operating profit was only around 100 million RMB, already down 74% year-on-year and barely above break-even.

       For the full first half the company now expects a 1.5–1.8 billion RMB loss (or 2.2–2.5 billion RMB after removing all non-recurring subsidy income). The official reasons given are rising raw material prices and asset impairment.

Raw materials matter, but not equally. Lithium carbonate (the key battery material) really did push costs up — roughly several thousand RMB per car. Storage chips and industrial metals (copper, aluminum) added far less — maybe a few hundred to a thousand RMB per vehicle. A normal car doesn’t carry nearly as much memory as an AI server, so the chip story is mostly a distraction.

       The bigger chunk is asset impairment. Companies don’t expense the full cost of machines and molds in year one; they depreciate them over several years. When technology moves fast or old tooling won’t generate future profits, management can choose to write the remaining book value down immediately and book the loss now. Many listed companies prefer to dump all the bad news into one already-ugly quarter rather than spread it out. That’s likely where a large part of Seres’ extra loss came from.

2. The Two Hidden “Cash-Flow Reservoirs” That Got Drained at the Same Time

       Even before raw materials and write-downs, Seres (and many other carmakers) lost two important sources of breathing room.

       One was supplier payment terms. In the past, car companies could stretch payments to suppliers for three to six months — essentially using other people’s money as free working capital. New rules now require payment within 60 days. For a company that buys a lot of parts, that sudden loss of float hurts cash flow badly.

       The second was “zero-kilometer used cars.” These are brand-new vehicles that have already been registered but haven’t reached end customers yet. Dealers used to hold them in inventory or quietly export some through parallel channels. That channel has now been tightened. Previously these cars made up roughly 12% of volume; now the inventory and cash pressure lands squarely on the carmaker.

       Seres also has a harder time exporting than peers like BYD or Geely. Because so many core components come from Huawei, which faces U.S. sanctions, many overseas markets are reluctant to accept the vehicles. Other “界” brands have alternative export routes through their parent groups; Seres has fewer options.

       Faced with all this pressure, Seres chose to recognize as much loss as possible in this single reporting period. If sales pick up in the traditional “Golden September–Silver October” season, it can book profits later. That’s one legitimate accounting approach — but it makes the headline number look brutal.

3. Huawei’s Three “Pockets”: A Business Model Designed to Collect, Not to Risk

       Huawei, on the other side of the street, structured the relationship so it has three reliable ways to take in money while bearing almost none of the inventory or market risk.

• Pocket 1 – Selling core components.

• Pocket 2 – Taking a cut of every car sold.

• Pocket 3 – Occasional big-ticket deals.

       Huawei’s smart vehicle solutions revenue reached 45.018 billion RMB in 2025, up 72.1%. That figure doesn’t even include most of the store commissions or the brand/equity transactions. Crucially, Huawei never has to hold finished car inventory or worry about unsold stock.

4. Handing Over the “Soul” – What Does It Really Cost?

       Seres spent years learning from Huawei and reached heights it probably couldn’t have reached alone. But the core intelligence (driving algorithms, cockpit software, key chips) now sits with the partner. Once that gap in capability and talent density opens, it becomes very hard to close. Internal teams struggle to get the same resources or priority when the “partner” is seen as the expert.

       It’s a bit like the Microsoft–OpenAI relationship: Microsoft has enormous resources, yet it still finds itself largely iterating around someone else’s leading model because “we can just use OpenAI’s.” The same dynamic can appear when a carmaker treats its tech partner as the permanent “soul” of the product.

       Seres is not a pure victim. Before the Huawei partnership it was a small van maker (formerly Sokon) that had already received government support but was struggling to move upmarket. The collaboration genuinely lifted it into the premium EV conversation. Now it must live with the consequences of that strategic choice.

       SAIC’s former chairman once famously said he didn’t want Huawei to become the “soul” while SAIC became just the “body.” Five years later SAIC also partnered with Huawei on the Shangjie brand. The point wasn’t that Chen Hong was wrong — it was that giving away too much core control carries long-term costs.

5. Apple’s Asset-Light Model vs Huawei’s — Two Very Different Flavors

       People often compare Huawei to Apple because both are relatively asset-light. The differences are telling.

       Apple designs its own products, owns the brand, pays suppliers up front, holds inventory, and maintains a clear, non-competing product roadmap. Huawei goes further: it sells complete solutions to multiple competing car brands, takes a percentage of revenue regardless of the carmaker’s profit, carries almost no finished-vehicle inventory, and lets the various “界” brands sort out their own positioning.

       When the market is hot, everyone grows together. When price wars and inventory pressure hit, almost all the pain lands on the carmakers. It’s closer to a hub-and-spoke model where the center collects steadily while the spokes absorb the shocks.

6. A Final Thought

       The Seres–Huawei story isn’t a simple morality tale. Huawei brought real technology and market access that helped Seres grow fast. At the same time, the partnership was structured so one side bears heavy fixed costs, inventory risk, and market cyclicality while the other side enjoys multiple protected revenue streams.

       For any company considering a deep “borrow the ship to sail” partnership, the lesson is clear: keep enough independent capability and bargaining power that you can still steer when the weather turns. Cooperation is powerful — but handing over the entire soul rarely ends well for the one doing the handing.