China Daily Briefing

Overseas institutional capital flowed into China's hard technology sector at an unprecedented pace through Q2, driving mainland equity valuations of these holdings to a record. STAR Market advanced manufacturing and AI infrastructure hardware stocks led the move. This is a structural reversal of the 2022-2024 capital withdrawal trend—triggered by US-China tech tensions—with global asset managers now treating Chinese hard tech as a separate, undervalued allocation.

China's pharmaceutical sector reached a record $110 billion in cross-border deals for AI-powered drug candidates in the first half of 2026, as domestic biotech firms monetize their AI-drug discovery platforms to global pharma majors. The deals signal that China's AI drug advantage—built on large patient datasets and cost-effective computational resources—is translating into hard commercial value. SCMP reports the deal velocity is accelerating heading into H2.

ChangXin Memory Technologies (CXMT), China's attempt to build a homegrown DRAM rival to Samsung and SK Hynix, is advancing with engineer Zhu Yiming leading its technical push. China's domestic memory chip ambition matters particularly this week as the Korean DRAM giants—Samsung and SK Hynix—are being sold aggressively in their home market. CXMT's progress determines how quickly China can reduce dependence on Korean and US memory suppliers.