China Daily Briefing

XPeng's position among Friday's top China gainers reflects ongoing momentum from its monthly delivery cadence, which has been accelerating in the H2 2026 ramp. China's EV price war — which compressed margins across the sector in 2024-2025 — is now producing a second-order effect: lower-margin players are exiting or restructuring, leaving the field to XPeng, BYD, and Li Auto. For investors, the EV sector in China has moved from a 'can they survive the price war' question to a 'who emerges dominant' question, and XPEV's renewed technical momentum is a signal that institutional positioning is shifting back toward the sector's growth runway rather than survival risk.

SCMP Business reported that global pharmaceutical giants are increasingly sourcing innovation from Chinese biotech firms as valuation gaps make Chinese R&D pipelines attractively priced compared to US and European equivalents. This theme has a direct Stock Connect read-through: Northbound flows into domestic A-share biotech and pharma names have been positive for consecutive weeks as international funds access the asset class. The trend validates PBOC's incremental easing as a demand catalyst — lower funding costs for domestic biotech firms reduce pre-revenue cash burn risk and make pipelines more viable for partnership discussions. Investors should watch BeiGene, Zymeworks, and HUTCHMED as the most liquid proxies.

China's central bank added 19.9 tonnes of gold to its reserves in July, marking the 21st consecutive month of purchases, according to Korean media citing the PBOC. This is a strategic reserve diversification play — the PBOC is explicitly reducing USD reserve concentration as geopolitical risks to dollar asset holdings mount. The cumulative 21-month buying program is now among the most sustained in modern central bank history and has contributed materially to gold's seven-week high seen globally on Friday. For China equity investors, the PBOC's gold reserve build signals a 'de-dollarisation' structural theme that plays through RMB internationalisation, Belt and Road financing structures, and sovereign wealth asset allocation.