1. China’s Economy Grew 5% in Q1 2026 — But Not Because Consumers Are Spending

2. CATL Is Growing So Fast That It Needs to Mine Its Own Resources

3. Alibaba Is Done Giving Qwen Away for Free After Hitting 50% of Open-Source Model Downloads

4. ByteDance Is Building an AI Hospital

5. Victory Giant IPO: The #1 PCB Maker for AI

#1 China’s Economy Grew 5% in Q1 2026 — But Not Because Consumers Are Spending

China posted 5% GDP growth in Q1 2026. While this headline growth remains encouraging, we need to establish that this number is being propped up by factories, exports, and government spending. The stuff that actually signals a healthy economy are struggling — people spending money, businesses investing confidently, a stable property market.

Can’t Sell in China? Sell Elsewhere

Producer prices (what factories charge) finally rose after three years of declines. But this isn’t recovery. It’s more likely the effects of the Iran War pushing up production costs.

Consumer prices barely budged. CPI rose just 1%. That gap between factory prices going up and consumer prices staying flat suggests demand is weak. Factories are paying more for raw materials, but they can’t pass those costs on because consumers aren’t spending.

When prices can’t rise despite all this stimulus, it’s a sign of excess capacity. Too much supply, not enough demand. So China is pushing that excess outward. This works until your trading partners start pushing back with tariffs and restrictions. And that’s already happening over the years.

Private Businesses Are Not Investing

It’s not just consumers not spending, the bosses aren’t investing in their businesses either. Private investment fell 2.2%, while state-owned enterprise investment rose 7.1%.

The government is spending aggressively, but private businesses aren’t confident enough to put money to work. When the only one writing cheques is the government, that’s not a truly healthy economy. That’s stimulus trying to make the economic engine going again.

The Property Problem Still Hasn’t Gone Away

Property development fell 11.2% year-on-year. And in China, property isn’t just about homes. It’s tied to household wealth, local government revenue, and consumer confidence.

If your biggest asset keeps losing value, are you going to go out and splurge? Probably not. That’s exactly what’s happening to Chinese consumers right now.

Beijing rolled out a 100 billion yuan package that includes interest subsidies, loan guarantees and cheaper borrowing, all designed to get people and businesses spending again.

The Government hopes that by making it cheaper to borrow, people will borrow and spend. In theory, this could unlock over a trillion yuan in credit.

The results have been mixed at best. Some businesses took up the cheaper loans, but household borrowing is still weak. You can make loans as cheap as you want but if people are worried about their jobs, their home values, and their future income, they’re not going to rush out and borrow money.

So What Does This Mean for Investors?

China’s economy isn’t collapsing. But it’s growing because of exports and government stimulus, not organic demand.

For investors, China consumer stocks may remain weak in the near term until the Chinese feel more confident about their jobs and properties.

Beijing is still running stimulus, so we have yet to see the full effects of their policies. And if the government isn’t satisfied with the traction, expect even more aggressive moves down the road.

#2 CATL Is Growing So Fast That It Needs to Mine Its Own Resources

Read more

1. China’s Pork Prices Fell 31% – Shows Deflationary Effect

2. Hangzhou’s “Six Little Dragons” — Manycore Files for IPO

3. CATL Buys 45% of Zhongheng Electric — Doubling Into Energy Storage System

4. Sigenergy IPO — Temasek-Backed Energy Storage Company With 150x Revenue Growth

5. Using Compressed Air to Store Energy and Produce Electricity — The Next Big Wave?

#1 China’s Pork Prices Fell 31% – Shows Deflationary Effect

Pork is one of the most important meats in Chinese cuisine and consumption. It’s a staple — deeply embedded in everyday meals across the country. That makes it a suitable barometer to gauge how the consumption scene is looking in China.

And it isn’t good.

Muyuan Foods, the world’s largest hog producer, has faced renewed earnings pressure as hog prices declined sharply in early 2026 — despite relatively stable sales volumes.

In March 2026, the company sold about 6.75 million finished hogs, down just 2.65% year on year. But the average selling price fell 30.7% to RMB 9.91 per kilogram. As a result, hog sales revenue dropped 32.7% to roughly RMB 8.6 billion.

See the problem? Volume didn’t decline much — but prices have collapsed.

The decline in hog prices has been driven mainly by cyclical oversupply and weaker pork demand.

China’s hog industry typically experiences boom-bust cycles: high prices encourage herd expansion, which later leads to excess supply and falling prices. After strong profitability in prior periods, producers expanded breeding capacity, increasing market supply in 2025–2026.

At the same time, softer consumer spending and substitution toward cheaper proteins like poultry reduced pork demand, putting further pressure on prices.

Muyuan itself maintained a large breeding base of about 3.13 million reproductive sows — indicating continued production capacity even as market prices softened. All of this creates a deflationary effect on China’s economy.

But the war in Iran may change this

Feed costs — particularly corn and soybean meal — are key determinants of hog production costs. Disruptions to global grain supply, trade restrictions, or currency volatility could increase feed prices, raising the industry’s cost curve and potentially supporting hog prices if smaller producers cut supply.

Energy prices also matter. Fuel and electricity affect farming, logistics, and cold-chain costs. And we’re already seeing this play out — prices of goods are rising as energy costs surge.

China’s producer price index rose 0.5% in March 2026 compared with the previous year, snapping 41 consecutive months of decline. Consumer prices rose 1% year on year, down from the previous month’s 1.3% but still coming in above 2025’s full-year reading of zero.

But don’t celebrate this inflation.

There are three types of inflation, and what we’re seeing here is cost-push inflation — driven by rising production costs, not a booming economy.

Cost-push inflation is the most painful kind to live through. It usually results in stagflation — where you’re hit from both sides: the cost of living skyrockets, but the economy is shrinking. China’s economic growth is slowing at the same time, and its GDP growth target has been the lowest in decades (excluding pandemic years) at 4.5% to 5%.

So this inflation is not the kind you welcome.

The silver lining? China is less impacted than other countries. It has a large base of renewable energy, sufficient reserves, and coal remains a significant source today. So the cost-push inflationary impact wouldn’t be as severe.

But nevertheless, consumption in China remains weak — as evident in hog prices. Pork is 30% cheaper, and yet it didn’t spur demand. Not even during the Lunar New Year period — the most important festive season where feasts are a tradition.

#2 Hangzhou's "Six Little Dragons" — Manycore Files for IPO

Read more

1. China EV Stocks Rally On High Oil Prices; BYD Up 9% While Geely Soars 57%

2. China Major Bank Stocks Gained More Than 8% During Iran War

3. J&T Delivers: Revenue Up 18.5%, Profits Nearly Doubled

4. Unitree IPO Reveals 335% Revenue Growth and Already Profitable

#1 China EV Stocks Rally On High Oil Prices; BYD Up 9% While Geely Soars 57%

Everyone talks about oil majors winning when crude surges. Fewer people think about the other winners—the ones selling the alternative.

China EV stocks have quietly gained more than 5% over the past month, measured by the Global X China EV & Battery ETF (2845). The logic is simple: when petrol gets expensive enough, people start doing the maths on switching.

And the thresholds are well-documented. Every $10 increase in crude translates to roughly $0.25–$0.30 per gallon at the pump. Once US gas hits $4.00 per gallon, surveys by groups like BloombergNEF and AAA consistently show a majority of drivers reconsidering their next car purchase. In Europe, the equivalent trigger is around €2.00 per litre. Cross those lines, and EV search interest and sales historically spike double digits.

BYD stock rose 9%, but the FY25 results weren’t exactly inspiring. Revenue grew just 3.5%, while profits declined 19%. That’s its first annual contraction in four years—and significantly worse than market expectations. Revenue growth of 3.5% was also the slowest pace in six years.

At the core of BYD’s challenges lies intensifying domestic competition. Historically, the company’s dominance was built on its affordable Dynasty and Ocean series, which captured mass-market consumers in China’s rapidly expanding EV segment.

But that advantage has eroded. Rivals like Geely have narrowed the technological gap while competing aggressively on price and features. The result is a more fragmented landscape—described by BYD chairman Wang Chuanfu himself as a “brutal knockout stage.” BYD has fallen from China’s top automaker in 2025 to fourth place in early 2026, alongside its steepest sales drop since the pandemic.

Policy shifts haven’t helped either. The expiration of purchase tax exemptions for new energy vehicles, combined with revised subsidies favouring higher-priced models, has disproportionately hit BYD—over 60% of its domestic sales fall below 150,000 yuan. This misalignment between policy incentives and product mix has constrained demand, while ongoing price wars have compressed margins. Gross profit margins in the core automotive segment declined to 20.5%.

But the market is forward-looking. Investors are pricing in an acceleration of EV sales driven by high oil prices—and that explains why BYD’s stock rallied despite the discouraging numbers.

Geely’s 57% gain was the more impressive story. In previous weeks, we mentioned that Geely managed to dethrone BYD in Q1 2026 to become China’s best-selling carmaker. Its exports soared 129% in the same quarter. Geely is successfully diversifying its revenue streams away from China’s hyper-competitive domestic market.

That said, BYD’s exports grew too—albeit at a slower 56%.

While we covered Geely as an underrated auto stock nine months ago, we still believe investors shouldn’t write off BYD. It might just be a game of musical chairs, with a few China auto players taking the crown from time to time.

As for high oil prices spurring demand for EVs—this tailwind should persist for a while, as long as crude stays elevated.

#2 China Major Bank Stocks Gained More Than 8% During Iran War

Read more

1. Iran War is China’s Short-Term Pain But Long-Term Gain

2. SEMICON China Unveils 100% In-House Litho and 5nm Etching Equipment; China Coins “CiYuan” to Own the AI Token Term

3. PDD Revenue Grew 12% But Profits Fell 11%; Spending RMB 100 Billion to Build New Pinduoduo

4. Pop Mart Revenue Popped 185% But Stock Plunged 27% This Week

5. Auntea Jenny’s 36% Revenue Growth — Is Bubble Tea a Bubble Waiting to Burst?

#1 Iran War is China’s Short-Term Pain But Long-Term Gain

The Iran war has triggered profound disruptions in global trade and energy markets—and China is one of the most exposed players.

As one of the world’s largest trading nations, China depends heavily on maritime routes. Over two-thirds of its oil imports flow through the Strait of Hormuz. A blockade there has serious consequences.

The blockade has forced major Chinese firms like COSCO Shipping to reroute cargo through costly sea-to-land networks via ports in Oman, the UAE, and Saudi Arabia.

Recent developments have added more confusion than clarity. Iran has said it will allow “non-hostile” vessels from friendly nations—including China, Russia, India, Pakistan, Malaysia, Thailand, Egypt, and Turkey—to pass after vetting. Iran is also erecting a toll for ships passing through Hormuz.

COSCO Shipping has since resumed shipment bookings for Gulf countries. But on 27 March 2026, two COSCO vessels—CSCL Indian Ocean and CSCL Arctic Ocean—attempted to pass through the strait and were turned back.

So the situation remains in flux. Are Chinese ships allowed through or not? It’s unclear. This could reflect inconsistencies within the Iranian authorities, possibly different factions insisting on different policies. For now, there’s no reliable answer.

The saving grace is that China is better insulated than many of its peers. Years of strategic planning have built significant resilience: vast oil reserves estimated at up to six months of supply, diversified import channels including pipelines from Russia, and a growing reliance on renewable energy. Electrification—particularly in transport—reduces sensitivity to oil shocks, while coal provides a fallback buffer.

The disruption is real, but it’s manageable.

Beyond the short-term costs, this conflict may actually accelerate structural advantages for China.

Disruptions to oil markets strengthen the case for renewable energy—where Chinese firms already dominate global supply chains. At the same time, geopolitical fragmentation could weaken the US dollar’s dominance in oil trade. Moves toward yuan-denominated oil transactions signal a potential shift toward a “petroyuan” system, incrementally enhancing China’s financial influence.

In the medium to long term, the picture may tilt further in Beijing’s favor. A prolonged conflict could divert US attention and resources away from Asia. Post-war reconstruction in the Middle East presents opportunities for Chinese infrastructure and engineering firms under the Belt and Road framework. And China’s control over critical minerals—essential to modern warfare and energy systems—provides leverage in global negotiations.

Takeaway

The Iran war imposes immediate economic costs on China through trade disruption and energy volatility. But it simultaneously reinforces Beijing’s long-term strategic positioning in energy transition, currency influence, and global industrial leadership.

#2 SEMICON China Unveils 100% In-House Litho and 5nm Etching Equipment; China Coins “CiYuan” to Own the AI Token Term

Read more

1. Alibaba Down 7% This Week After Revenue Grew Just 2% and Profits Plunged 66%

2. Tencent Down 8% Despite Good Results As Investors Worry About Increasing and Uncertain AI Bets

3. Futu and Tiger Brokers: Revenue Grew Over 40%, Global Expansion Gaining Steam

4. Jacobio’s Cancer Drug Shows Early Promise, Profitability Guided for 2026

5. Labubu Gets a Movie, Bloks Turns Profitable — Chinese Toys Are Getting Traction

#1 Alibaba Down 7% This Week After Revenue Grew Just 2% and Profits Plunged 66%

Alibaba continued to show tepid revenue growth, even after its restructuring and pivot to AI. Its final quarter of 2025 delivered just 2% revenue growth.

The key culprit? E-commerce—both domestic and international—is growing at a snail’s pace. Mid-single digit percentage growth at best. Domestically, this has been the story for many quarters now, so it isn’t surprising.

The surprising part is the international commerce retail segment. Think Trendyol and Lazada—these used to be the growth engines, clocking high double-digit percentage growth. Now? Just 10%. That’s a significant slowdown.

Quick commerce jumped 56%, but let’s not get too excited. That’s largely driven by a price war with Meituan and JD.com to fight for market share. We know how this goes—growth will collapse once the subsidies dry up. Take that number with a pinch of salt.

At least the Cloud Intelligence Group is showing signs of life. It grew 36% year-on-year in the final quarter, with AI-related products delivering triple-digit growth for ten consecutive quarters. Alibaba has doubled down on a full-stack AI strategy—proprietary chips (T-Head processors), foundation models (Qwen), and enterprise cloud services. The introduction of higher pricing for AI-driven cloud services, alongside the creation of a “Token Hub” unit, signals a shift toward extracting value from usage-based AI demand.

The AI play is working. But it needs to become a much bigger piece of the pie relative to e-commerce before it can move the needle for the overall company.

One step Alibaba has taken: raising cloud computing prices by up to 34%. This comes after a prolonged price war with other Chinese cloud providers. Baidu is raising prices too. As AI adoption accelerates globally, both companies are responding to rising infrastructure costs—expensive chips, energy inputs, and supply chain constraints—while aligning with similar pricing moves by US hyperscalers like AWS and Google Cloud.

And then there’s the other downer—profits. Net income for the final quarter plunged 66% year-on-year.

It isn’t hard to figure out why. The heavy subsidies handed out through Taobao Flash and Ele.me pushed sales and marketing expenses up by almost RMB 30 billion—a 69% jump from the previous year.

That is a very expensive way to buy market share.

With slowing international e-commerce growth, AI revenue that’s still not significant enough, and a subsidy bill that’s crushing profits—it’s no surprise investors aren’t impressed. Alibaba’s stock tanked 7% this week.

The path forward hinges on whether Alibaba can translate strong AI demand into durable margins while stabilising its core commerce business. If it pulls off the transition—from a maturing e-commerce giant to a leading AI platform—there’s meaningful upside.

Alibaba’s scale and ambition give it the highest ceiling among Chinese tech—but also the greatest pressure to prove that its massive investments can actually translate into sustainable profitability.

#2 Tencent Down 8% Despite Good Results As Investors Worry About Increasing and Uncertain AI Bets

Read more

1. China A Shares - The “Safe Haven” No One Expected

2. Geely Overtook BYD as China’s Top-Selling Carmaker — But There’s a Catch

3. CATL’s Profits Jump 57% in 4Q25, Widens Global Leadership Gap Against BYD

4. Midea Record Spending of 60B Yuan To Advance Industrial Robots and AI Homes

5. Eli Lilly Pledges US$3B to Expand Manufacturing in China for Next-Gen Weight-Loss Pill

#1 China A Shares - The “Safer Haven” No One Expected

China has been one of the “safer” places for investors in a world that’s falling apart.

And no, we’re not talking about China tech stocks — those have seen some heavy drawdowns, unless they happened to catch an AI narrative lift. We are talking about Mainland A-shares, which have quietly edged out gains year-to-date while most global indices are deep in the red.

Look at the top gainers below — it’s mostly energy companies. Not surprising when the world is grappling with higher oil prices driven by geopolitical tensions around the Strait of Hormuz.

A Little Inflation Might Be Exactly What China Needs

This inflationary impact may not be a bad thing for China.

For the past couple of years, the country has been battling deflationary fears. Prices were flat or falling. Factory margins were getting squeezed. The mood was grim.

So a bit of inflation might actually be what China needed. It could be just enough to eliminate those deflation concerns going forward.

But there’s a fine line.

China is the world’s largest energy consumer. If production costs run too high and Chinese workers can’t increase their salaries and purchasing power to match, consumption will continue to slump. So no deflation and some inflation is good — but runaway inflation isn’t. It’s a Goldilocks problem.

Energy Resilience

What most people don’t realise is what China has been doing quietly in the background — building energy resilience.

Over the past decade, the country has invested heavily in renewables, EVs, and domestic energy production. It’s reduced dependence on imported fossil fuels, which means it’s far less exposed to global oil shocks than before. On top of that, China sits on strategic petroleum reserves estimated at over one billion barrels. That’s months of import coverage if the Strait of Hormuz gets fully disrupted.

Add in diversified energy partnerships — including deeper ties with Russia — and China has significantly more room to absorb geopolitical energy disruptions than most people give it credit for.

And here’s one more angle that doesn’t get talked about enough: being friends with Iran has its perks. Iran has continued to ship oil to China, and Chinese vessels have been allowed to cross the Strait of Hormuz while others face restrictions. In times like these, that relationship pays dividends — literally.

China as a Defensive Play?

Now, does this mean China is risk-free? Far from it.

But in a world where the US is dealing with indebtedness and tariff fallout, Europe is stagnating, and geopolitical tensions are everywhere, China’s relative stability is starting to look attractive.

#2 Geely Overtook BYD as China's Top-Selling Carmaker — But There's a Catch

Read more

1. Iran War: How Does It Impact China?

2. China’s Two Sessions 2026: Old Wine in New Bottle

3. JD.com Sinks To Losses Due To Aggressive Spending On New Initiatives

4. Haidilao Looks Overseas for Growth — Super Hi Expects 8% Revenue Growth and 56% Profit Growth

5. Luckin and Blue Bottle Coffee Come Under One Roof for Under US$400m

#1 Iran War: How Does It Impact China?

The Iran war happened and China, being Iran’s biggest trade partner, has not stepped in to intervene—other than condemning the attack. They’re doing what they always do—staying on the sidelines, keeping things transactional, and not getting directly involved in other countries’ conflicts.

China’s entire foreign policy playbook is about influence without entanglement. They want stability, not war—especially in regions that supply their critical resources. Beijing has no formal military alliance with Iran and no interest in creating one.

Reports suggest Chinese firms have supplied Iran with dual-use tech, drone components, and air-defence systems like the HQ-16 and HQ-17AE. There have even been claims of loitering munitions and discussions around the CM-302 anti-ship cruise missile, which could theoretically threaten U.S. naval vessels near the Persian Gulf.

But Beijing has stopped doing large-scale weapons deals with Tehran since the mid-2000s. Why? Because China also wants to stay friendly with Gulf Arab states and Israel. So most of this support happens quietly—through commercial shipments and tech transfers that can be written off as “civilian components.”

Thus, it is unlikely that China will send in troops to help Iran. Other Gulf nations have exhibited restraint too despite being attacked. So we do not think the conflict will escalate into a world war.

The Real Risk: Oil Prices

The real consequences won’t play out on the battlefield. They’ll show up in energy prices, inflation, and global supply chains. Thanks to the conflict, crude oil prices have risen more than 10% in the past week.

China’s relationship with Iran is built on crude oil. In 2025 alone, China reportedly imported over a million barrels per day of Iranian crude—roughly 12% of its total oil imports. A lot of these shipments get routed through intermediaries or relabelled to dodge sanctions. Everyone knows it’s happening. No one’s really stopping it.

Around 40–50% of China’s imported crude passes through the Strait of Hormuz. Higher energy costs mean higher production costs for Chinese factories, compressing margins and reducing the attractiveness of their exports.

But—and this is the interesting part—geopolitical instability also tends to hurt Western economies and disrupt competitors’ supply chains. That could actually strengthen China’s relative manufacturing position. Plus, China’s been aggressively building out renewable energy and EV production for the past decade, which gradually reduces its long-term dependence on imported oil. But of course, the replacement isn’t going to happen overnight.

There were also rumours that China has asked refiners to halt signing new contracts to export fuel and to try to cancel shipments already committed, as tight oil supply due to the non-shipment of Iranian oil takes effect.

What This Means for Investors

Here’s the practical takeaway:

If you’re heavily exposed to energy-sensitive sectors, this is something to watch closely. Oil price spikes can ripple through transportation, manufacturing, and even REITs with high utility costs.

If you’re holding commodities or energy stocks, short-term volatility could work in your favor—but don’t get greedy. Geopolitical premiums fade fast once tensions cool.

The conflict between the U.S. and Iran is serious. But for most investors, the playbook doesn’t change: stay diversified, don’t panic, and keep your eyes on the long game.

#2 China’s Two Sessions 2026: Old Wine in New Bottle

Read more

1. HKEX Smashes Records in 2025—Shareholders Get 35% Dividend Raise

2. HK Property Stocks Are Flying—Sun Hung Kai Leads With 51% YTD Gain

3. Only China Can Rival US AI and Tech Leadership—Huawei, ByteDance, and China LLMs Show the Gap Is Closing

4. Meet Sugon—China’s AI Infrastructure Builder Reports 14% Revenue Growth

5. Baidu’s AI Revenue Is Surging, But At What Cost? Investors Aren’t Convinced

#1 HKEX Smashes Records in 2025—Shareholders Get 35% Dividend Raise

Hong Kong Exchanges and Clearing Limited (HKEX) just delivered a record-breaking 2025. And not just by a small margin—we’re talking a 36% jump in net profit to HK$17.75 billion, its second straight year of record earnings.

The Numbers Are Hard to Ignore

Let’s start with the obvious—trading activity went through the roof.

Cash market average daily turnover surged 90% year-on-year to HK$249.8 billion. To put that in perspective, 15 of the 20 highest trading days in HKEX’s entire history happened in 2025. That’s not a recovery—that’s a boom.

The top line tells the same story. Trading fees jumped 80% to HK$6.17 billion. Clearing fees rose 58% to HK$5.71 billion.

Earnings per share came in at HK$14.05, and the exchange maintained its 90% payout ratio—total dividends of HK$12.52 per share, up from HK$9.26 in 2024. That’s a 35% pay raise for investors.

But despite the higher dividends, the yield sits at just 2.21%. That’s because the stock has run up so much—great for existing holders, not so great if you’re looking to enter now.

IPO Market: Back on Top

Hong Kong took back its throne and ranked #1 globally for IPO fundraising in 2025.

A total of HK$286.9 billion was raised from 119 listings. That’s a 226% jump year-on-year. Two of the world’s five largest IPOs happened in Hong Kong. And new economy sectors—think biotech and specialist tech—accounted for 66% of funds raised, with 21 listings under Chapter 18.

Issuers came from Kazakhstan, Singapore, Thailand, and the UAE. That’s a far cry from the “Hong Kong is dead” narrative that was floating around just a couple of years ago.

Expanding Beyond Equities

CEO Bonnie Chan has signalled that the next phase of growth will go beyond equities—into fixed income, commodities, and multi-asset platforms.

HKEX has historically been very equity-heavy, and diversifying the revenue base makes sense as global investors seek more ways to access Asia.

To that end, HKEX opened an office in Riyadh, partnered with the Abu Dhabi Securities Exchange, and launched a commodities pricing unit in Dubai. They’ve also added the Stock Exchange of Thailand to their recognised stock exchange network, strengthening ties across Southeast Asia and the Middle East.

In other words, they’re not just waiting for China listings anymore. They’re actively building pipelines across emerging markets.

T+1 Settlement Is Coming

HKEX is consulting the market on moving from T+2 to T+1 settlement.

The US and Canada already made the switch in 2024. Mainland China has been on T+1 for ages. Hong Kong following suit would improve capital efficiency, reduce counterparty risk, and keep it competitive with the big boys.

It’s one of those behind-the-scenes changes that doesn’t grab headlines but makes a real difference to how efficiently the market operates.

The Big Picture

HKEX enters 2026 with strong turnover trends, a healthy IPO pipeline, and clear strategic direction. The record earnings give it the financial firepower to invest in growth initiatives.

But let’s not get carried away. A lot of 2025’s performance was driven by the China tech rebound, and that can reverse quickly if sentiment sours again. The real test is whether HKEX’s diversification efforts—into fixed income, commodities, Middle East partnerships—can deliver meaningful revenue beyond just equity trading.

For now, the momentum is undeniably there. Whether it lasts depends on execution.

#2 HK Property Stocks Are Flying—Sun Hung Kai Leads With 51% YTD Gain

It’s not just the stock market that’s doing well in Hong Kong—the property market is showing signs of life too.

According to the Rating and Valuation Department, second-hand home prices rose 0.53% month-on-month in January, marking ten straight months of stability. The lived-in home price index climbed to 301.4—its highest since mid-2024—rebounding nearly 6% from the March trough. On a full-year basis, prices rose 3.66% in 2025, ending a painful three-year correction.

Rents have been even stronger. The rental index hit a fresh peak of 201.1 in January, rising for 14 consecutive months. Tight supply, resilient expatriate demand, and improving sentiment have pushed yields higher. Analysts expect residential transaction volumes to jump over 20% in 2026, potentially returning toward the 80,000-deal annual levels we saw during 2018–2021.

What’s Driving the Recovery?

Three forces are at play.

First, anticipated US rate cuts are easing mortgage burdens and improving affordability. Second, mainland Chinese capital has returned selectively—especially into mass and mid-tier segments. Third, rising rents are improving holding economics, narrowing the gap between financing costs and rental yields.

So the macro setup looks decent. But beneath the cyclical rebound, there are structural headwinds that aren’t going away.

Grade-A office vacancies in Central and West Kowloon remain elevated thanks to new supply and corporate downsizing. Demographic shifts and “northbound consumption” toward Shenzhen are pressuring retail rents. And the government’s land-premium model is squeezing developers’ margins—particularly under large-scale initiatives like the Northern Metropolis.

In short, prices are stabilising, but profitability is being structurally reset.

HK Property Developer Stocks Rally

And rally they have. Year-to-date, Sun Hung Kai Properties (SHKP) leads the pack by a wide margin, surging 51%. CK Asset and MTR are neck and neck at around 23%, while Henderson is up 22% and Hysan trails at 16%.

Read more

1. Hang Seng Index Adds CATL, CMOC, and Laopu Gold—Expanding to 90 Stocks

2. Xi’s 2026 Economic Blueprint: Buy In China, Avoid Involution, and Build One-Person Companies

3. Meituan Warns of 20+ Billion Yuan Loss in 2025—This Is What Involution Looks Like

4. Hua Hong 4Q25: Record Revenue, Returned to Profitability—But Just Barely

5. China’s Cosmetics Market Hit 1.1 Trillion Yuan—And Chinese Brands Are Running the Show

#1 Hang Seng Index Adds CATL, CMOC, and Laopu Gold—Expanding to 90 Stocks

The Hang Seng Index is getting a makeover. Effective March 9, Hang Seng Indexes Company is adding three new names—Contemporary Amperex Technology (CATL) (SEHK:3750), China Molybdenum (CMOC) (SEHK:3993), and Laopu Gold (SEHK:6181)—while dropping Zhongsheng Group (SEHK:881). The index grows from 88 to 90 constituents, continuing its slow march toward a target of 100 members.

The Additions Tell a Story

CATL needs no introduction. The world’s largest EV battery maker raised US$4.6 billion in a Hong Kong secondary listing last May and has since surged roughly 60%. Its inclusion isn’t just about market cap—it’s a signal that advanced manufacturing and new-energy supply chains are now core to what the Hang Seng represents.

CMOC is a major global producer of copper and cobalt—the raw materials powering the EV revolution. Think of it as upstream exposure to electrification. If CATL makes the batteries, CMOC digs up what goes inside them.

Then there’s Laopu Gold—a premium jewellery brand that’s become something of a darling among domestic consumers. Its inclusion speaks to a different trend: the resilience of high-end local branding in China, even as the broader economy faces headwinds.

Three very different companies. But a common thread—they’re all aligned with where China wants to go.

The Exit Makes Sense Too

Zhongsheng Group’s removal is the other half of the story. As a traditional auto dealership, it’s caught in the crossfire of a market in structural shift. EV makers increasingly sell direct to consumers, cutting out the middleman. Margins are under pressure, and growth has stalled.

Size and liquidity used to be enough to stay in an index. Apparently, not anymore. Sector alignment is increasingly decisive.

Meanwhile, the HSCEI Got Its Own Reshuffle

The Hang Seng China Enterprises Index also saw changes. KE Holdings—a property services platform—and Horizon Robotics, an AI chip designer, were added. China Resources Beer and China Mengniu Dairy were removed.

The pattern holds. Tech and new economy in. Old economy out.

Why This Matters for Investors

Index reshuffles aren’t just administrative housekeeping. Passive funds tracking the Hang Seng family of indices have to rebalance—and that means real money flows. When a stock gets added, buying follows. When it gets removed, selling does.

But beyond the mechanical rebalancing, these changes are worth watching as a barometer. The Hang Seng has been around since 1969 and covers roughly two-thirds of Hong Kong’s total market cap. How it evolves reflects how the market—and China’s economy—is evolving with it.

#2 Xi's 2026 Economic Blueprint: Buy In China, Avoid Involution, and Build One-Person Companies

Read more

1. ByteDance’s Seedance 2.0: AI Video Just Got Scary Good

2. Alibaba Moves Into Physical AI With RynnBrain, Launches CNY Red Envelope War Against Tencent, ByteDance and Baidu

3. SMIC 4Q25: Revenue Up 13%, Profits Jump 23%. Stock Gains 54% In Past Year

4. Lenovo Hits Record Revenue and AI Now a Third of the Business

5. NetEase 4Q25: Growth Slows, Profits Dip – But the Dividends and Share Buybacks Continue

#1 ByteDance's Seedance 2.0: AI Video Just Got Scary Good

ByteDance dropped Seedance 2.0 over the weekend and the internet lost its mind.

If you’ve played around with AI video generators before—Sora, Runway, Kling—you’ll know the output usually looks impressive for about three seconds before something breaks. Fingers melt, faces flicker, physics go out the window.

Seedance 2.0 is different. The demos circulating online show figure skating routines with synchronized movements, sci-fi action sequences with coherent camera work, and characters that actually look consistent from frame to frame. It generates up to 15-second clips at 1080p, complete with dialogue, sound effects, and background music—all in sync.

@wo766866022可怕的运动逻辑Seedance2.0，震惊#ai #seedanceai

Tiktok failed to load.

Enable 3rd party cookies or use another browser

But the real leap isn’t just quality. It’s control.

Unlike earlier models where you type a prompt and pray, Seedance 2.0 lets users feed in up to nine reference images, three video clips, and three audio files alongside the text prompt. That means you can specify characters, camera angles, visual styles, and soundtracks—then edit specific parts of the output without regenerating the whole thing. Swap a character, extend a scene, merge clips. It’s less of a toy and more of a production tool.

@mk616_Seedance2.0 #seedance

Tiktok failed to load.

Enable 3rd party cookies or use another browser

Why This Matters

ByteDance isn’t building this in a vacuum. Seedance 2.0 is integrated into Dreamina, Doubao, and Jianying (CapCut’s Chinese counterpart). Think about what that means: the company that dominates short-form video distribution globally now has a tool that can generate professional-grade content at near-zero cost.

@musice927AI드라마의 시대가 왔어요.이 표정 연기력 리듬감,,,울뻔 했네요#seedance2 #ootd #tiktok #FYP

Tiktok failed to load.

Enable 3rd party cookies or use another browser

For advertisers, influencers, and content creators, this could be a game-changer. Why spend tens of thousands on a video shoot when you can generate something comparable in minutes?

The competitive field is heating up fast—OpenAI has Sora 2, Google has Veo 3, and Kuaishou has Kling 3.0. But ByteDance’s edge isn’t just the model. It’s the distribution. When you control TikTok and Douyin, you don’t just make the tools—you own the platform where the content gets consumed.

With Seedance 2.0, ByteDance now owns the entire short video value chain—from generation to distribution. No other company in the world can say that. That’s not just a competitive moat. That’s a monopoly on the future of short-form content.

#2 Alibaba Moves Into Physical AI With RynnBrain, Launches CNY Red Envelope War Against Tencent, ByteDance and Baidu

Read more

1. China Software and AI Stocks Pulled Down By US SaaSmageddon

2. Meituan Acquires Dingdong Instead of Building—Smart or Silly Strategy?

3. Baidu Announces First-Ever Dividend—Finally Acting Like a Proper Value Stock

4. Chinese EVs Are So Good That Ford Is Partnering With Geely

#1 China Software and AI Stocks Pulled Down By US SaaSmageddon

No matter how much the US and China want to decouple from each other, they are still very much connected. Not just in supply chains—but in capital markets too.

Over the past week, we saw the US software armageddon play out, where stocks plunged on fears that AI is going to replace software companies. That fear has now spread to China—software stocks like Kingsoft and Kingdee saw their shares plunge more than 10% this week.

The selloff didn’t stop there. It bled into broader Chinese tech, with the Hang Seng Tech Index down 5%.

Here’s the ironic part: AI-related stocks fell too—the very thing that’s supposed to be “replacing” these software companies. Foundry stocks like SMIC and Hua Hong were down 9% or more. AI LLM plays like Kuaishou and Zhipu AI weren’t spared either, down around 10%. And Cambricon—supposedly the Nvidia of China—dropped 17%.

Besides this US contagion fear, there were other domestic concerns too, which we covered previously with Tencent:

• New Tax Concerns: Investors are worried that Beijing might raise taxes on digital services like gaming and e-commerce, similar to previous hikes in the telecom sector.

• Regulatory Uncertainty: Even without official policy changes, “regulatory noise” and a lack of clarity are making investors nervous—and that’s enough to drive stock prices down.

In contrast, consumer stocks are doing just fine. Pop Mart, Haidilao, Mengniu, and the like were up more than 5% while tech stocks tanked.

For now, this drawdown marks a decisive shift in market psychology—from enthusiasm to caution, from growth to defensiveness. Whether it becomes a launching pad for recovery or the start of a deeper pullback will depend on how quickly the uncertainty clears up.

#2 Meituan Acquires Dingdong Instead of Building—Smart or Silly Strategy?

Read more

1. Powering China’s AI Data Centers Can Be Cheaper and Greener With This New Rule

2. Alibaba’s “Tongyun Ge” – A Google Replica Strategy to Become a Vertically Integrated AI Company

3. TCL Profits Up More Than 45%, JV With Sony For Bravia TVs, Stock Up 15% This Month

4. Chinese Eat Pizzas Too – Domino’s Opened Its 1,405th Store In China, Same as Its Ticker Number

5. China Gold Scam Collapsed – Gold Stocks May Tumble After Price Plunged 10%

# 1 Powering China's AI Data Centers Can Be Cheaper and Greener With This New Rule

It sounds like a small experiment at first: a 500-megawatt wind farm in Henan province decides to bypass the national grid entirely and sell power directly to an industrial park.

But it’s actually a preview of how China is rewiring its entire energy system—from the ground up.

The Grid Bottleneck: Too Much Power, Not Enough Wire

China’s renewable energy build-out has been nothing short of insane. By Q3 2025, wind and solar capacity exceeded 1,700 GW—a tenfold increase in a decade. The plan? Double it again to 3,600 GW by 2035.

The problem is that transmission lines haven’t kept up.

The result is curtailment—forced wastage of perfectly good electricity. Nationally, it runs 5–6%. In resource-rich western provinces? As high as 40%. That’s a lot of clean energy going nowhere.

Enter the “green power direct connection” model. Instead of feeding power into the congested national grid, renewable generators sell directly to industrial users via private lines.

It’s elegant. It bypasses the bottleneck. And it monetizes stranded supply that would otherwise be wasted.

Real Savings, Real Fast

For energy-intensive manufacturers, this isn’t theory—it’s survival.

Baowu Steel’s Henan subsidiary cut electricity costs by 8–10%, saving nearly 4 million yuan on 60 million kWh in under a year. In today’s deflationary industrial environment, those margins matter.

But there’s another angle: carbon traceability.

The national grid is still coal-heavy, so you can’t easily prove your electricity is green. Direct connections can. And with the EU’s Carbon Border Adjustment Mechanism now fully in force, electricity provenance isn’t just a nice-to-have—it’s a trade weapon.

That’s why CATL runs fully renewable-powered battery plants. That’s why Envision is building green ammonia facilities. These aren’t climate signaling exercises. They’re export survival strategies.

The Catch: Load-Factor Risk

Under new NDRC rules, direct-connection tariffs are tied to load factor—basically, how consistently you consume power. If demand drops, your unit costs rise.

Provincial benchmarks range from 45% to 66%. Fall below, and project economics can unravel fast.

For green hydrogen, this is a big deal. Production costs could double under unfavorable conditions. What was once a state-backed infrastructure play now becomes a market-disciplined one—with developers and end-users bearing the risk, not the grid.

The State Grid Isn’t Fighting Back—It’s Pivoting

Interestingly, the State Grid isn’t resisting disintermediation. It’s repositioning itself as an energy services platform—offering carbon consulting, green certificate verification, and compliance tooling.

In 2025, it helped Gree Electric secure over 11,000 green certificates. That’s the new play: the grid as an information and verification backbone, not just a transmission utility.

AI’s Power Problem—and China’s Structural Advantage

Globally, AI is smashing into energy constraints. In the U.S. and Europe, data center growth is triggering grid instability, soaring power prices, and local opposition. Everyone wants to run AI workloads. Nobody wants to build the power plants.

China’s approach is different. Decades of infrastructure over-investment—once criticized—are now becoming an advantage.

The government wants AI integrated into 90% of the economy by 2030. That ambition assumes computation will be treated as critical infrastructure. And critical infrastructure needs cheap, stable, scalable power.

Direct green power connections, private industrial grids, and a digitized national grid form the physical layer of that vision.

Will it work? Too early to say. But China is at least building the foundation—while others are still arguing about permits.

#2 Alibaba's "Tongyun Ge" – A Google Replica Strategy to Become a Vertically Integrated AI Company

Alibaba used to follow Amazon’s footsteps. Amazon does ecommerce, Alibaba’s first business was ecommerce. Amazon moved into cloud, Alibaba did too. When Bezos bought the Washington Post, Jack Ma went out and bought SCMP.

But recently, Alibaba started emulating Google instead.

The “Tongyun Ge” Playbook

Alibaba now conceptualizes its AI strategy as “Tongyun Ge”—the integration of large models (Tongyi or Qwen), cloud computing (Alibaba Cloud), and chips (Pingtouge Semiconductor, also known as T-Head) into a single system.

In other words: vertical integration.

This is exactly what Google has done—Gemini for models, Google Cloud for the platform, and TPUs for chips.

This isn’t marketing fluff. It’s an architectural choice.

Read more

1. Hurun Names China Top 50 Artificial Intelligence Companies

2. Alibaba Wants to Join the Party, Spinning Off T-Head Chip Unit via IPO

3. Fosun Spins Off Vaccine Developer Adgenvax

4. #4 Global Investors Rush to China Biotech, ETF Returned 64% in the Past Year

5. Xiaomi Launches HK$2.5 Billion Share Buyback After Stock Dropped 40% From the High

#1 Hurun Names China Top 50 Artificial Intelligence Companies

The Hurun Research Institute just dropped their 2025 China AI Top 50 list—and if you thought last year’s rankings were hot, this year’s is on fire.

The numbers tell the story: the threshold to even make the Top 50 jumped to 9.5 billion RMB (up 3.5 billion from last year). Want to crack the Top 10? That’ll cost you 73 billion RMB—triple what it was before. The average enterprise value on the list now sits at 54 billion RMB, 2.4 times higher than the previous year. Five companies have crossed the 100 billion RMB mark.

The Top 5

1. Cambricon (630 billion RMB): Taking the crown. This AI chip maker saw revenue grow 43-fold in the first half of 2025. Yes, you read that right. Forty-three times. That’s what happens when US export controls force China to build its own computing infrastructure.

2. Moore Threads (310 billion RMB): A GPU unicorn that set an IPO speed record on the STAR Market—88 days from filing to clearance.

3. MetaX (250 billion RMB): Another GPU heavyweight, part of what’s being called the “Shanghai GPU Quartet.”

4. iFlytek (130 billion RMB): The veteran in voice and natural language processing, now evolving with its Spark Big Model.

5. Horizon Robotics (120 billion RMB): The autonomous driving leader, which doubled its hardware shipments in 2025.

Notice something? FourAlibaba Wants to Join the Party, Spinning Off T-Head Chip Unit via IPOz of the top five are chip companies. That’s the headline.

Here’s the ranking:

Hardware Is Eating AI

The biggest shift in this year’s report is the dominance of hardware. Fourteen AI chip companies made the list—up by nine from last year—and they’re occupying the top spots.

This isn’t random. US export controls on high-end chips have forced China’s hand. The country is scrambling to build domestic alternatives, and the valuations reflect it. Rupert Hoogewerf, Chairman of Hurun Report, calls it a pivot from being an “AI Application Giant” to an “AI Innovation Powerhouse.”

The report breaks down the AI industry using a body analogy:

• The Heart (Compute): Cambricon, Moore Threads, MetaX. This is where the money is.

• The Brain (Data & Decision): XtalPi, 4Paradigm.

• The Hands (Generative AI): Moonshot AI (Kimi), MiniMax.

• The Eyes (Vision) & Ears (Voice): SenseTime, iFlytek.

• The Legs (Mobility): Pony.ai, WeRide.

Right now, “The Heart” is getting all the attention—and all the capital.

Who Got Left Out—And Why

Hurun applied strict criteria, which excluded some big names:

• DeepSeek: Despite 145 million monthly active users by September 2025, it was left off because its focus remains on basic research and open-source contributions—not commercialization.

• Tech Giants (ByteDance, Huawei, Tencent): They have massive AI capabilities (Doubao, Pangu, Hunyuan models), but AI doesn’t yet make up >50% of their revenue. They’re conglomerates, not pure-play AI companies.

• Infrastructure Players (Inspur, Runze): AI servers and data centers aren’t their primary business—traditional operations still dominate.

The Takeaway

The 2025 Hurun China AI Top 50 paints a picture of an industry under pressure to mature—fast. The focus has shifted decisively upstream toward computing power to secure the supply chain. While commercial revenue still lags valuations, the strategic importance of these companies suggests the market is betting on the long game.

China is building its AI stack from the ground up. And right now, the chips are where the action is.

#2 Alibaba Wants to Join the Party, Spinning Off T-Head Chip Unit via IPO

Read more

1. China Releases 900 Billion Yuan in Targeted Funding, Cuts Property Downpayment, and Rules Out Currency Depreciation

2. GigaDevice Up 68% From IPO Price in Days While Zhipu AI Fully Trains Model on Huawei Chips

3. LandSpace: China’s SpaceX Goes Public

4. Huya Stock Rose With Popularity of Goose Goose Duck Mobile Game

5. 361 Degrees Grew 10% in 4Q25 and Stock Has Outperformed Peers

#1 China Releases 900 Billion Yuan in Targeted Funding, Cuts Property Downpayment, and Rules Out Currency Depreciation

The PBOC just announced up to 900 billion yuan in fresh funding for private firms, tech, agriculture, and small businesses:

• 500 billion yuan for agriculture and small firms

• 400 billion yuan expanding the tech/industrial upgrade program (now 1.2 trillion yuan total)

• Interest rate cut from 1.5% to 1.25%

This isn’t broad stimulus—it’s targeted credit allocation. The focus is on medium-sized private enterprises, especially R&D-heavy ones, that struggle to secure funding. Large private firms already have access to capital. Micro firms get policy support. But the middle? Often squeezed out. This 1 trillion yuan facility aims to close that gap and support innovation-driven growth.

Commercial Property Downpayment Cut to 30%

Minimum down payment for commercial property mortgages dropped to 30%, from around 50%. This covers shops, offices, and hotels—not residential. The aim is to clear inventory and ease pressure on the commercial real estate sector without reigniting speculation.

No RMB Depreciation to Boost Growth

Despite the yuan strengthening past the 7-per-dollar level, the PBOC made it clear: China won’t devalue its currency to juice growth. They’re sticking with market-driven exchange rates while acknowledging potential volatility from global rate uncertainty and geopolitical risks.

Why no depreciation? China’s trade exposure to currency swings has structurally declined. More cross-border trade is now settled in yuan or hedged through derivatives, reducing reliance on a weak currency for competitiveness.

The Takeaway

These aren’t massive stimulus moves—they’re targeted policy adjustments. China is playing the long game, rolling out measures segment by segment as economic indicators warrant.

We’re not saying China’s out of the consumption slump or that the property market has bounced back. But things are getting better, albeit slowly.

#2 GigaDevice Up 68% From IPO Price in Days While Zhipu AI Fully Trains Model on Huawei Chips

Read more

1. China Electricity Equipment Supplier Gains More Than 10% In First Week of 2026

2. First 2 of China’s AI Tigers List in Hong Kong—Zhipu AI Up 13%, MiniMax Doubles on First Day

3. China Biotech Stocks Surge More Than 10% in 2026 On Pipeline Potential

4. CATL Goes Beyond EVs—Maritime Expansion, Battery Swaps, and Sodium-Ion Breakthrough

5. Hesai Chosen By Nvidia as Lidar Partner

#1 China Electricity Equipment Supplier Gains More Than 10% In First Week of 2026

China is the world’s largest consumer of electricity, guzzling over 10 trillion kilowatt-hours in 2025—more than the EU, Russia, India, and Japan combined. That’s what happens when you’re the world’s factory floor plus having a huge population. And with AI development ramping up, power-hungry servers are only going to push demand higher. Beijing needs to ensure there’s always ample supply.

Upgrading the Electrical Grid

China’s grid has shown some vulnerability. In August 2024, Xinjiang experienced “low-frequency power oscillations” that almost triggered a blackout. Beijing’s response: mandate a high-tech overhaul of the transmission system.

That’s created opportunities for advanced equipment manufacturers. China XD Electric (SSE:601179) just rolled out the world’s most powerful smart DC transformer—750 million volt-amperes (MVA). It’s designed for the “West-to-East” power transmission program, which aims to move 420 gigawatts (GW) from resource-rich western provinces to the demand-heavy east by 2030.

Other transformer and cable makers are benefiting too. TBEA (SSE:600089) and Far East Smarter Energy (SSE:600869) have both surged more than 10%.

China’s also going hard on nuclear to stabilize the grid. Despite having 1,195 coal plants, the focus is shifting to clean baseload power. Construction started in late 2025 on major projects like the Bailong nuclear plant in Guangxi.

This benefits state-owned contractors like China Nuclear Engineering & Construction (SSE:601611), which is positioned to capture nuclear infrastructure spending. The stock rallied 33% in just the first week of 2026.

China’s clean tech supply chains are saturated domestically—they produce over 80% of the world’s wind turbines, solar panels, and batteries. So firms are pivoting overseas. In 2025, Chinese companies committed $80 billion to foreign clean tech investments, overtaking coal for the first time.

Seventy-five percent of that is targeting the Global South—Asia, the Middle East, Africa, and Latin America. China’s largest wind turbine maker, Goldwind (SEHK:2208), has surged 42% since the start of 2026.

In solar, there’s a split—power producers are struggling while component manufacturers like GoodWe Technologies (SSE:688390) are profitable.

The Takeaway

The suppliers to power generation and grid buildout are thriving. It’s a classic infrastructure upgrade cycle that China does well. And for investors outside China, stock performance is reflecting this policy focus.

#2 First 2 of China's AI Tigers List in Hong Kong—Zhipu AI Up 13%, MiniMax Doubles on First Day

Read more

1. Xi’s New Year Message: Better Quality But Accept Slower Growth

2. China’s Chip IPO Boom: Biren Up 76%, Oversubscribed 2,300x—And More Are Coming

3. China’s LLM Darlings MiniMax and Zhipu Are IPOing—Despite Billion-Dollar Losses

4. China Wants 100% Domestic Automotive Chips by 2027—Can It Actually Happen?

5. FAW Bets $520M on Leapmotor Becoming a Top 3 EV Maker in China

#1 Xi's New Year Message: Better Quality But Accept Slower Growth

As China enters 2026, its economy stands at a delicate inflection point: stabilized but not re-accelerated, resilient yet structurally constrained. President Xi Jinping’s year-end remarks set the tone—Beijing expects the economy to have grown around 5% in 2025, meeting its official target and lifting nominal GDP to roughly 140 trillion yuan (US$20 trillion).

That outcome, achieved amid weak household confidence, a prolonged property downturn, deflationary pressures, and heightened geopolitical friction, reflects the leadership’s view that macro stability has been preserved. Even if momentum remains uneven.

The key message entering 2026? Not aggressive stimulus, but policy recalibration.

Xi has repeatedly emphasized “qualitative improvement and reasonable quantitative growth”—signaling clear tolerance for slower headline expansion in exchange for structural adjustment. This marks a departure from earlier cycles where rapid credit growth and infrastructure spending were used to overwhelm slowdowns. Instead, policymakers appear determined to avoid “reckless projects,” rein in excess capacity, and gradually reorient the economy toward more sustainable drivers.

But Beijing isn’t withdrawing support. It’s shifting the composition of stimulus.

Consumption Takes Center Stage

Consumption has emerged as the central policy priority, reflecting official recognition that China’s growth model remains overly investment-heavy. Household consumption accounts for only about 40% of GDP—far below the roughly 70% seen in the United States. Senior policymakers have pledged to raise this share meaningfully over the next five years, with some advisers targeting 45% as a medium-term goal.

Concrete measures are already being rolled out. The consumer goods trade-in program, first introduced in 2024, has been expanded significantly. A total of 300 billion yuan was allocated in 2025—double the previous year—and at least 62.5 billion yuan from special treasury bonds has been earmarked to fund the scheme in 2026.

Crucially, the program is broadening beyond traditional appliances and vehicles to include digital and smart products like smartphones, tablets, and wearables, which will qualify for subsidies of up to 15%. This expansion reflects a more nuanced understanding of modern consumption patterns and aims to stimulate discretionary spending without reigniting speculative excess.

Investment Gets Selective

Investment policy, meanwhile, is becoming more targeted. China’s state planner has released early plans for 2026 involving roughly 295 billion yuan in central budget funding for major construction projects. Unlike past infrastructure binges, these initiatives are designed to support productivity-enhancing areas rather than pure scale expansion.

At the same time, the equipment upgrade program is being extended into sectors like elderly care facilities, residential lifts, and fire-rescue systems—reinforcing the shift toward social infrastructure and services rather than heavy industry alone.

The Strategic Industrial Push

Overlaying the macro picture is a clear intensification of China’s strategic industrial policy. Beijing is increasingly willing to leverage its dominance in critical inputs and to mandate localization across key sectors.

Export controls on tungsten, antimony, and rare earth-related products underscore China’s readiness to weaponize its position in global supply chains in response to U.S. technology restrictions. At the same time, domestic rules requiring chipmakers to source at least 50% of new equipment from local suppliers reflect a “whole nation” approach to semiconductor self-sufficiency.

These measures are already reshaping industrial behavior, accelerating the rise of domestic equipment champions like Naura and AMEC, and compressing the role of foreign suppliers in the Chinese market.

What This Means for Investors

China’s entry into 2026 can best be described as a phase of managed transition. Growth is being stabilized around politically acceptable levels, but the emphasis is shifting decisively toward consumption, technological autonomy, and economic security.

Rather than chasing short-term acceleration, Beijing appears willing to accept slower, uneven growth as the cost of restructuring its economy and insulating it from external shocks.

For investors and businesses, this implies fewer broad-based stimulus rallies, but more durable opportunities aligned with policy priorities—particularly in advanced manufacturing, high-tech equipment, digital consumption, and strategic resources.

China’s economic playbook is becoming more selective, more strategic, and increasingly more inwardly resilient as it steps into 2026.

The question isn’t whether China will grow fast—it’s whether you’re positioned in the sectors Beijing has decided will grow.

#2 China's Chip IPO Boom: Biren Up 76%, Oversubscribed 2,300x—And More Are Coming

Read more

1. Yuan Strengthens Past 7 Per USD This Week – And It Might Go Further

2. What a Year for UBTech – Robots Deployed, Stock +100%, Now Vertically Integrating

3. Sanhua Projects 25-50% Profit Growth in 2025 – Thermal Management Giant Eyes Robotics Next

4. China Cracked Ultra-luxury Cars? Huawei’s Maextro S800 Just Outsold Porsche and BMW

5. China’s Brokers Keep Merging – CICC Acquiring Two Rivals to Build the Goldman Sachs of China

#1 Yuan Strengthens Past 7 Per USD This Week – And It Might Go Further

The Chinese yuan just punched through 7.0 per U.S. dollar at one point. That’s a big deal—psychologically and practically. And everyone’s scrambling to figure out what it means.

This isn’t just about the dollar weakening. The yuan is genuinely getting stronger, and there are real reasons behind it.

The Weak Dollar Helped, But It’s Not the Whole Story

Yes, the U.S. dollar has been sliding. Throughout 2025, the Fed started cutting rates as the economy cooled. That narrowed the interest rate gap that had propped up the dollar for so long.

Add to that the ongoing noise about “de-dollarization” and concerns over U.S. fiscal mess, and you’ve got a recipe for a weaker greenback. The Dollar Index (DXY) dropped from 110 at the start of the year to around 96–97.

That gave the yuan room to breathe. But here’s the thing—plenty of currencies benefited from a weaker dollar. The yuan’s rally stands out because China did more than just ride the wave.

China’s Playing Its Cards Right

The real driver? Domestic policy. Chinese authorities made deliberate moves to support the currency, and it worked.

Export support: They ramped up export tax rebates to keep the trade surplus strong. More exports = more foreign currency flowing in = natural support for the yuan.

Capital flow management: The People’s Bank of China (PBOC) used its “counter-cyclical factor” to guide the daily currency fixing. Translation: they signaled they wanted stability and gradual appreciation. That reversed years of capital outflows and turned the capital account positive.

Asset appeal: Chinese stocks rallied—driven by tech and industrial policy. Suddenly, global investors who’d been avoiding China started paying attention again. That brought more money into yuan-denominated assets.

The Yuan Was Undervalued—And Now It’s Catching Up

Goldman Sachs and others have been saying it for a while: the yuan has been too cheap.

Why? Two big reasons.

First, China’s productivity growth has outpaced the U.S. for decades. That should mean a stronger currency over time.

Second, China’s inflation has been lower than the U.S., especially post-pandemic. That boosts the yuan’s real purchasing power.

A stronger yuan isn’t just about optics. It makes imports cheaper—raw materials, energy, luxury goods. That supports domestic consumption. It also eases trade tensions with countries that might otherwise slap on tariffs.

What’s Next? Eyes on 6.8

Breaking 7.0 probably isn’t the end of this rally—it’s the start of a new chapter.

China’s exports are shifting. It’s not just churning out cheap goods anymore. It’s exporting EVs, advanced machinery, and high-tech products. These exports are less sensitive to currency moves and more dependent on technological edge.

The next target? 6.8 per dollar. That’s the level people are watching for 2026.

Sure, risks remain. But with a massive trade surplus and deeper financial market integration, the fundamentals point toward continued strength.

The Bigger Picture

For global investors, this matters. The yuan is transitioning from a volatile emerging market currency to something more stable—a genuine pillar of the global financial system.

So no, the yuan’s surge isn’t just about the dollar being weak. China’s making moves, the fundamentals are solid, and the currency is finally catching up to where it should be.

#2 What a Year for UBTech – Robots Deployed, Stock +100%, Now Vertically Integrating

Read more

1. HKEX Finally Adopts Standard Lot Sizes and China AI IPO Fever

2. BYD Down 4% This Week After BAIC and Changan Got L3 Approval

3. Luckin Wants To Buy US-Based Blue Bottle Cafe and Roaster

4. SenseTime Down 14% After Share Sale But AI Tide Still Ensures Stock Up 33% YTD

5. Forest Cabin: China’s Premium Skincare Champion Goes Public

#1 HKEX Finally Adopts Standard Lot Sizes and China AI IPO Fever

HKEX is rolling out reforms to improve accessibility and liquidity. Chinese chipmakers and AI firms are lining up for blockbuster IPOs.

These two developments aren’t just happening at the same time—they’re feeding off each other. And together, they’re reshaping China’s financial system and industrial strategy.

HKEX’s Reforms: Finally Fixing the Lot Size Mess

The exchange is standardizing board lot sizes, lowering minimum trading thresholds, and tweaking public float rules. Sounds boring, but these changes matter.

Here’s the problem with Hong Kong’s current setup: different stocks have different lot sizes. Some require 100 shares per lot, others 500, some even 1,000 or more. It’s a mess. Investors have to remember the lot size for each stock they want to buy—and if you’re trading multiple names, good luck keeping track.

Worse, some lot sizes require so much capital that smaller retail investors are simply priced out. A $100 stock with a 500-share lot? That’s $50,000 just to get in.

The reforms tackle these issues head-on. Standardizing lot sizes makes the market easier to navigate and more accessible. Lower thresholds let everyday investors participate without needing big capital upfront. And the updated float rules—while maintaining flexibility for issuers—add transparency and investor protection.

The China AI IPO Wave: Hot Money Chasing Hotter Stocks

Chinese AI stocks are on fire. This week, MetaX delivered a one-day 7x IPO return. Moore Threads rallied hard after its debut too.

But here’s the catch: both are listed on Shanghai’s STAR Market—which foreign individual investors can’t access. That’s a problem if you’re an international investor who wants in on China’s chip boom.

This is exactly where HKEX plays a critical role. More Chinese companies are now listing in both mainland and Hong Kong markets, catering to domestic investors on one hand and international capital on the other.

China’s push for tech self-sufficiency is emboldening investors to buy into these AI startups. But let’s be real—expectations have run way ahead of reality. Many of these stocks still have a lot to prove in terms of demand and profits.

The IPO euphoria feels familiar. It’s the same playbook we’ve seen before: policy tailwinds, geopolitical tensions, and FOMO-driven capital all converging on a hot sector. The fundamentals will catch up eventually—or they won’t. Either way, someone’s getting left holding the bag.

The Virtuous Cycle: Better Markets, Stronger Companies

HKEX’s reforms and the chip IPO boom are reinforcing each other.

Better market structure means more liquidity and participation. That supports healthier IPO pricing and aftermarket performance. Successful chip and AI listings—like the strong debuts we’ve seen on the STAR Market—then attract even more capital and trading activity back to Hong Kong as companies pursue dual listings.

It’s a virtuous cycle. Deeper capital markets support strategic industries. The growth of those industries revitalizes market activity.

Hong Kong becomes a more efficient financial gateway. China’s tech champions get the capital and visibility they need to scale globally. And all of this aligns with Beijing’s long-term economic transformation goals.

#2 BYD Down 4% This Week After BAIC and Changan Got L3 Approval

Read more

1. China Sovereign Wealth Fund, CIC, Reported 41% Jump In Investment Income

2. HKEX Launches Tech 100 Index to Bet On China’s Rise in Technology to Rival Nasdaq 100

3. Alibaba’s Qwen is World’s Largest Open Source Model—and Even Western Big Tech Like Meta Has Adopted It

4. Pfizer Pays US$2.1B to Fosun Pharma Subsidiary For Exclusive Global Distribution Rights to an Experimental Oral Obesity Drug

5. Seyond IPO: Another Lidar Autonomous Driving Enabler Enters the Stock Market

#1 China Sovereign Wealth Fund, CIC, Reported 41% Jump In Investment Income

China Investment Corporation (CIC)—the country’s largest sovereign wealth fund—just dropped its 2024 numbers. And they’re solid.

Investment income jumped 41% year-on-year to $130.2 billion. Operating income rose 29.6% to $150.9 billion. Not bad for a year packed with geopolitical noise and market volatility.

Long-Term Returns Hold Up

More importantly, the long-term picture looks steady. CIC’s 10-year annualized net return came in at 6.92%—beating its benchmark by 61 basis points. Since inception in 2007, the fund’s annualized return sits at 6.39%.

Nothing flashy, but consistent. And for a sovereign wealth fund managing nearly $1.4 trillion, consistency matters more than heroics.

How CIC Allocates Its Portfolio

As of December 31, 2024, here’s how CIC’s portfolio breaks down:

• Alternative Assets (48.49%): Nearly half the portfolio. This includes hedge funds, private equity, private credit, real estate, and infrastructure. It’s the diversification engine.

• Public Equity (34.65%): About a third in global listed stocks, split between in-house and external managers.

• Fixed Income (15.53%): Mostly sovereign bonds from advanced economies (64% of the fixed income bucket). Think stability and liquidity.

• Cash and Others (1.33%): Short-term cash and US Treasury Bills.

Within the equity portfolio, CIC leans into tech. Information Technology makes up 25.85%—the largest sector weight. Financials follow at 16.41%, then Consumer Discretionary at 11.85%.

Other notable allocations: Healthcare (9.88%), Industrials (9.72%), Telecom (9.26%). Smaller positions in Consumer Staples, Energy, and Materials round out the mix.

The Domestic Arm: Central Huijin

Back home, CIC operates through Central Huijin Investment Ltd., which manages stakes in China’s heavyweight financial institutions. As of year-end 2024, Central Huijin held nearly CNY 6.87 trillion in assets across 19 major firms.

Key holdings include:

Banks:

• Bank of China: 64.13%

• China Construction Bank: 57.14%

• Agricultural Bank of China: 40.14%

• ICBC: 34.79%

Insurance & Securities:

• China Export & Credit Insurance: 73.63%

• China Reinsurance Group: 71.56%

• CICC: 40.31%

• China Securities: 30.76%

Financial Conglomerates:

• China Jianyin Investment: 100%

• China Everbright Group: 63.16%

• China Galaxy Financial: 69.07%

This isn’t surprising. Central Huijin’s job is to stabilize and support China’s financial system. These are the pillars of the domestic economy, and the stakes confirm their strategic importance.

Final Thoughts

CIC’s 2024 results reflect the strong rebound in Chinese equity markets. China stocks have shed the “uninvestable” image that plagued them in previous years—at least for now.

The investments also signal the government’s resolve to support the market, particularly state-owned blue chips. Some investors are taking this as a vote of confidence, viewing these holdings as more stable bets backed by policy support.

Whether that confidence holds up long-term is another question. But for 2024, the message is clear: Beijing is backing its marquee names, and CIC’s results show what that looks like in practice.

#2 HKEX Launches Tech 100 Index to Bet On China’s Rise in Technology to Rival Nasdaq 100

Hong Kong just launched its own tech index—and it’s going big.

The HKEX Tech 100 Index went live on Tuesday, tracking 100 of the largest and most innovative companies listed in Hong Kong. Think AI, biotech, electric vehicles, robotics, and IT. This is Hong Kong’s clearest signal yet that it’s moving away from its old identity as a property and finance hub, and betting hard on the “New Economy.”

According to HKEX CEO Bonnie Chan, the index captures “the leading innovative sectors... that have transformed the DNA of Hong Kong’s markets.”

What’s Inside the Index?

To make the cut, companies need to pass some strict filters:

• Average daily trading volume of at least HKD 20 million

• R&D spending above 3% of revenue

• Annual revenue growth over 5%

• Must be tradable via Stock Connect (the cross-border link between Hong Kong, Shanghai, and Shenzhen)

And to prevent any single stock from dominating, there’s a 12% weighting cap.

HKEX 100 Index Constituents

The result? A lineup dominated by China’s tech heavyweights:

• Xiaomi Corp: ~12.21%

• Alibaba Group Holding: ~11.87%

• Tencent Holdings: ~11.56%

• Meituan: ~9.16%

• BYD Company: ~6.09%

These five alone make up nearly half the index. So yes, it’s concentrated at the top—but that’s where the scale is.

Beyond the giants, the index includes a mix of biotech leaders like BeiGene (3.13%), Innovent Biologics (2.16%), and WuXi Biologics (2.02%)—companies that benefited from Hong Kong’s 2018 listing reform (Chapter 18A), which allowed pre-revenue biotech firms to go public.

There’s also exposure to cutting-edge hardware and new energy through the newer Chapter 18C regime (launched in 2023). This brought in names like Horizon Robotics (1.30%), a smart driving tech company, and Black Sesame International. Even CATL (3.75%)—the battery giant—is in the mix.

Add in SMIC (5.12%) for semiconductors, XPeng (1.79%) and Li Auto (1.37%) for EVs, and you’ve got a broad sweep of what “New China” tech looks like.

Full list of HKEX Tech 100 constituents (in alphabetical order):

Read more

1. Alibaba’s Qwen App Just Hit 149% Growth—Fastest in the World

2. Moore Threads Surged 500% on Day One. But Can China’s “Nvidia” Actually Deliver?

3. ByteDance’s AI Phone Sold Out. Now It’s Reselling at 43% Premium.

4. China Just Became the World’s #2 Drug Maker. Now It Needs Billions to Stay There.

5. WUS and JD Industrials IPO: One Makes AI Hardware, One Digitizes Factories

#1 Alibaba’s Qwen App Just Hit 149% Growth—Fastest in the World

Alibaba just launched Qwen, an AI app that’s now the fastest-growing in the world. And it’s not just hype—the numbers back it up.

In just two weeks of public beta, Qwen clocked 149% month-over-month growth in November. That’s the highest among all AI products globally, according to Aicpb.com. The app hit 18.34 million monthly active users and shot up to become the world’s 24th most-used AI app.

Within days of launch, it cracked the top three trending free apps on Apple’s App Store in mainland China and Hong Kong. In Macau, it took the number one spot.

What’s Driving the Growth?

Qwen markets itself as “the best personal AI assistant.” It’s got all the usual multimodal features—deep research, image generation, slide creation. But the real edge? The underlying Qwen models.

Li Bangzhu from Aicpb.com pointed out something obvious but often overlooked: strong foundational models drive consumer adoption. Qwen’s open-source models already have over 700 million global downloads. That technical credibility translated directly into user growth.

The Bigger Picture: A Crowded, Slowing Market

Here’s the thing—the AI app market is packed, and most players are stalling.

ByteDance’s Doubao still leads in China with 168 million MAUs, but growth has flatlined at around 5%. DeepSeek’s user numbers are actually declining.

Globally, ChatGPT dominates with 775 million MAUs, but its growth has slowed to under 1%. In this saturated environment, Qwen’s triple-digit growth is a genuine disruption. The only other app showing momentum? Google’s Gemini, up 16% after its model updates.

Beyond Apps: Cloud, Hardware, and B2B

But Alibaba isn’t just chasing consumer downloads. They’re playing a bigger game.

Through Alibaba Cloud, they’re going hard on B2B partnerships, especially in Southeast Asia. In Malaysia, they’ve partnered with Ryt Bank for digital banking infrastructure and PRO-NET to accelerate EV adoption. They’re embedding themselves into the structural fabric of foreign economies—positioning as the cloud backbone for Malaysia’s “AI Nation 2030” initiative.

Add to that their Mate XT foldable phone, and you’ve got a full-stack play: consumer apps, competitive hardware, enterprise cloud infrastructure.

Final Thoughts

Qwen’s surge isn’t a one-off. It’s the tip of Alibaba’s broader AI strategy—one that’s challenging both domestic rivals like ByteDance and global giants like OpenAI and Google.

The synergy between their foundational models, consumer products, and cloud services suggests this isn’t just a flash in the pan. Alibaba’s positioning itself to be a major force in the global AI landscape.

The question now: Can they sustain this momentum, or will they hit the same growth ceiling everyone else is facing?

#2 Moore Threads Surged 500% on Day One. But Can China’s “Nvidia” Actually Deliver?

Read more