Furthermore, a stronger Yuan and Hong Kong's tax-free shopping environment have further boosted demand, with jewelry prices reportedly more than 5% cheaper than in mainland China.Wealthy Chinese consumers are increasingly favoring gold as a store of value over traditional luxury purchases

📈 Growth

When an economy does well, investors want in. China’s economy beat expectations this autumn.

🚢 Trade

Exporters convert their dollars into local currency, and Chinese exports are booming.

🏦 Central banks:

Interest rates and policy steer where money flows.

A report published on Monday by the Washington-based Rhodium Group found that China’s industry was moving into more profitable, higher-end segments formerly dominated by foreign companies, raising the prospect of further tensions with the EU and US.

The chemicals industry is at the forefront of disputes over China’s trade surplus, which is on track this year to exceed 2025’s record of $1.2tn.COMMENT: An old but still relevant slide, attached

* Faster innovation cycles.

* Better software and in-car technology.

* Competitive pricing.

* Deep integration with the digital lifestyle.* A much faster response to changing consumer preferences.

“We buy, and we like it,” he said in Singapore. The appeal lies in the currency’s steady performance and the prospect that those gains can continue, he added.

The offshore yuan has climbed almost 5% against the dollar this year to its strongest level since 2022, supported by resilient exports that generate foreign-currency inflows and Beijing’s push to expand the renminbi’s global use. The gains have come despite subdued inflation and a weak economy pushing Chinese interest rates lower, widening the gap with US 10-year yields to a record.

Callegari noted that while Chinese offshore bond yields of 2%-2.5% may look unattractive to some global investors next to other rates markets, steady yuan appreciation can boost total returns above dollar bonds while offering diversification and a better risk-adjusted profile

VW plans to lay off 100,000 employees and close 4 car factories in Germany. Meanwhile, Audi, which belongs to the same group, is building a $4 billion car factory in the United States because the tariffs the United States has imposed on Europe have also eaten into Europe's car exports in that direction. In other words, the new jobs are being created in the United States, not in Europe. Exactly as the Trump administration wanted.

The EU has protected its own automotive industry by imposing punitive tariffs on Chinese electric vehicles and has now managed to restrict that China cannot sell more than 350,000 hybrids per year to Europe.

The automotive industry is Europe's largest industrial sector and directly or indirectly employs up to 17 million people.

I don't believe anything can save it anymore. Once efficiency is lost, global markets are inevitably lost as well. Domestic markets can of course be protected with tariffs, but as a result, the EU is left with high price levels and an industry that is completely uncompetitive globally.

It's telling that Audi wants to stop importing its own cars from China. The Chinese version of the Audi is otherwise the same car (and thus locally manufactured by Audi), but it says AUDI in big letters and is missing the 4 rings. The AUDI E5 Sportback Flagship quattro model's price when imported to Europe is about 60,000 euros, which is significantly cheaper than the car's price in Germany at about 90,000 euros.

And to make the whole picture absurd: Volkswagen has 38 car factories in China. But if any German giant manufactures a fully electric car in China and imports it to the EU, it faces even higher punitive tariffs than BYD, which is an entirely Chinese brand. In other words, the European Union punishes its own car factories for manufacturing in China.

Property investment in China has now contracted every month since 2022, its longest declining streak on record. For perspective, during the 2008 Financial Crisis, this figure never fell below +1% YoY growth.

In October 2024, the European Union introduced additional tariffs of up to 35.3% on Chinese-made battery-electric vehicles, on top of the standard 10% import duty, but hybrids were not covered. Chinese automakers quickly accelerated their expansion into this segment, which is attractive to European consumers who remain hesitant about going fully electric. As a result, their share of European hybrid sales has surged to ~32% while hybrid technology has historically been one of the Japanese auto industry's greatest competitive advantages.

China is no longer competing with Western automakers solely on price; it is now challenging them directly in their own strategic segments. With highly integrated supply chains, significant expertise in battery manufacturing, and the ability to develop new models at remarkable speed, Chinese brands enjoy substantial competitive advantages. Meanwhile, European manufacturers must finance their technological transition while facing increasing pressure on volumes and margins.

Brussels is now trying to restrict Chinese hybrid imports but tariffs cannot restore an industry's competitiveness. BYD is already developing manufacturing operations in Hungary, Chery is preparing production in Spain, and Leapmotor is leveraging Stellantis European factories. If Europe taxes cars manufactured in China, Chinese automakers can increasingly manufacture those same vehicles directly in Europe.

Pessimism has gripped Chinese stocks, with no end in sight for a deepening selloff as investors confront the realities of an economy that’s weak enough to erode corporate profits but not to trigger forceful new stimulus.

• Pessimism has gripped Chinese stocks, with the world’s second-largest equities market losing $3.5 trillion in value from a peak in May.
• A protracted consumption slump and the race-to-the-bottom mentality among businesses are taking a heavier toll on earnings across industries.
• The consensus 2026 earnings forecasts for the MSCI China Index members have declined by over 4% since the end of March, with companies missing consensus forecasts by an average of 9%.

Revenue: Revenue for China’s leading wind turbine firms stayed roughly flat between 2021 and 2023, then gradually rose in 2024 before jumping by about one-third in 2025.

These manufacturers are able to build a gigafactory — the industry term for the plants making cells used in EVs, AI data storage centres and power grid backup systems — in China for about a third of the cost and three times faster than building the same type of facility in Europe.

Despite those advantages, Chinese battery groups have now concluded that the pendulum of global sentiment has swung — perhaps permanently — towards protectionism and localisation, according to multiple industry executives, analysts and foreign government officials. This conclusion is forcing them to accelerate the creation of a complete battery supply chain outside China.

The company also plans to conduct an IPO.

Energy exports from the Persian Gulf may have recovered in recent months, but Iranian crude, favored by some Chinese private producers, has completely dried up due to the US blockade. Exports of naphtha, a chemical feedstock, from the region remain constrained, while Beijing has prioritized gasoline and diesel output, forcing refiners to draw on petrochemical stockpiles accumulated before the war.

“Right now, inventory levels are basically near the bottom,” said Parsley Ong, head of Asia energy and chemicals research at JPMorgan. The tightness in Chinese markets has already affected consumers with “inflation happening across most products,” she said. https://lnkd.in/gvhidUS4

1. Massive R&D Investment: China spends over 2.5% of GDP on research, rivaling the US in absolute terms and growing faster year-on-year.  

2. STEM Talent Pipeline: With 4.7 million STEM graduates annually, China produces nearly eight times more than the US.  

3. State-led Strategy: Policies such as Made in China 2025 and military-civil fusion ensure that scientific breakthroughs feed directly into industrial and defense capabilities.

This transformation will change the world by shifting innovation hubs eastward, accelerating technological diffusion to developing nations, and challenging the West’s long-standing dominance in knowledge production. The laboratories of China are no longer peripheral — they are becoming the epicenters of global science.

• Q3 GDP: +4.5% vs. a year ago, up from 4.3% in Q2. Reuters poll expected 4.4%

• Jan–Sep: +4.6%, just inside Beijing's 4.5–5% target

• September exports: +29.6% (yuan terms)

• September factory output: +5.5%• September retail sales: +1.1%

• Real estate investment, Jan–Sep: −20.6%. Private investment: −10.4%

• Urban unemployment: 5.2%, down from 5.3%

✅ THE FACTS

• Growth did pick up for the first time this year: 5.0% in Q1, 4.3% in Q2, 4.5% in Q3

• Exports beat imports by about ¥6.46 trillion in Jan–Sep, roughly $965 billion

• Households' real income rose 4.4%, slower than the economy

A broader IMF measure that counts both official local debt and those shadow vehicles puts China’s real government debt load at 127% of GDP, up from 98% just five years ago.

Here’s where the money went:

factories and apartments nobody needed enough of. That mismatch triggered price wars, squeezed profits and wages, and now feeds directly into deflation and weak demand at home.

And it doesn’t stay home.

Chinese companies carrying all that debt keep producing more cars, solar panels, and electronics than China itself can absorb. The surplus gets exported, undercutting prices everywhere else and fueling the trade fights now playing out with country after country.

Economists call this the real signature of the Xi era: investment-driven growth long after the investments stopped paying off. The capital controls and state-run banks mean China probably avoids a sudden collapse. What it doesn’t avoid is a slow bleed, years of suppressed returns and weaker growth, while everyone downstream absorbs the overflow.

Silicon Data's prices for the same market: the token price has fallen from over $2 per million in late May to $0.98, halved in 4 months, while rents for the hardware that makes the tokens went the other way, H100s up 3%, B200s up 10%, the new B300s up 39%.

Open-weight Chinese models priced at a fraction of US ones take the volume and drag the market price of a token toward their cost, while the GPUs everyone rents to serve them get dearer because supply is tight.

Caveats: OpenRouter is a developer router, not the whole market; direct ChatGPT and Claude traffic sits outside it, and volume is not revenue.

Oil is pushing up producer prices, but downstream firms are absorbing the cost. PPI rose 1.2% MoM as oil extraction prices jumped 14.5% and refined petroleum prices rose 7.4%. Mining prices climbed 25.4% YoY against 3.4% for processing industries, which means little of the cost is being passed on, and downstream margins stay under pressure.

Consumer prices show the same gap. Gasoline rose 16.6% YoY and added about 0.47 percentage points to CPI inflation, more than half the headline increase. Computer and mobile phone prices accelerated to 21.8% and 14.9%. Service prices fell 0.2% MoM after the summer travel season, and food prices rose just 0.4%, below seasonal norms. Price pressure is coming from costs, with little from domestic demand.

Exports are strong, but integrated circuits, automatic data-processing equipment and automobiles made up nearly half of January-September export growth. Integrated circuit export volumes rose just 3.8% while export values surged 108.1%, so higher prices drove much of the gain.

Oil raised import costs too. Crude oil import volumes fell 15.3% YoY in January-September while average prices rose around 18%, leaving import values up just 0.3%.

Issuers can raise yuan and use it directly to buy Chinese goods and fund operations in China instead of first raising USD

- 61% fewer tokens

- PersonaMem accuracy: 48% → 76%

- Zero external API dependencies. Runs on plain SQLite.

SpaceX is an anomaly in the matrix. Maybe RAM will be different, but RAM was a low-margin commodity only ~3 years ago. LP5 and LP6 are designed to a common standard that China seems to be solving fast. Newer HBM architectures and things like an SRAM layer below logic and 3D stacking RAM on top of logic while finding a way to keep the logic cooled, will be harder to solve.

As a result, the English-speaking world interpreted this to mean that China might catch up or even lead in server DRAM ahead of schedule, while Samsung won't push out similar tech until around 2028.

Consequently, memory-related stocks like Micron and SanDisk all dropped collectively that day. Some people think the drop is unreasonable, because an announcement doesn't mean actual mass production—even if yields are high and costs are low, and with AI demand being so massive right now, more supply still can't fill the gap.

After all, this is just regular DDR5, not the more profitable HBM. But Musk just threw cold water on it outright, saying that once China figures out the manufacturing process for a certain product, their scaling-up capacity is often faster than everywhere else in the world combined.

China saves 40% of its $19 trillion GDP, translating into roughly US$7.6 trillion a year in fresh savings that must be invested somewhere each year.

2. At the same time, the EU's pharmaceutical, optical, and specialized electronics industries are recording record growth. The effect? Employment and real value added in EU industry over the decade have increased.

3. Cheap inputs from China lower costs for European factories (EBC study: +0.6 p.p. to annual production growth).

4. It's China that's over 80% dependent on the EU in 41 strategic supply chains (from ASML lithography and Zeiss optics to medicine).

China isn't destroying European industry but is forcing 'creative destruction' and a shift to the highest-margin segments.

China is now the world’s 5th-largest gold holder, following the US, Germany, Italy, and France

2022: 712,000

2024: 683,000

2026: 420,000 (f)