China Daily Briefing

China's multilayer ceramic capacitor (MLCC) manufacturers are scaling capacity at a rapid clip, driven by explosive demand from AI server hardware builds globally. MLCCs are a critical passive component in every data center rack, and Chinese suppliers — including Murata competitors in Guangdong and Jiangsu — are capturing share in the mid-tier market even as Japanese and Korean makers (Murata, Samsung Electro-Mechanics) dominate the premium segment. This is a supply-chain read that matters: if Chinese MLCC capacity ramps faster than AI server demand, component pricing deflates — negative for suppliers but positive for hyperscaler margins.

Swire Pacific's record first-half profit of HK$6.96 billion — driven by Cathay Pacific's aviation recovery, Swire Properties' commercial portfolio, and Swire Coca-Cola's mainland China distribution — signals that carefully diversified Greater China conglomerates can deliver record earnings even while China's property sector remains in structural deleveraging. Swire Coca-Cola's contribution is particularly relevant as a proxy for mainland consumer demand: if beverage volumes are growing, real discretionary consumption is holding up better than headline retail sales data implies.

Hong Kong's government raised the Silver Bonds coupon to 4.25% for the latest batch — the highest rate in this product cycle — reflecting the HKMA's cost of borrowing under the USD/HKD peg in a sustained high-rate environment. For retail fixed-income investors in HK, Silver Bonds at 4.25% compete directly with bank deposits and offer a government-credit quality equivalent. The rate reset is a direct consequence of HKMA rate policy locked to the Fed: as long as Fed holds at 3.5%-3.75%, HK retail fixed income pays up.