China Daily Briefing

Zhipu AI revealed that 'Ox Alpha'—its viral model that dominated social media—is actually GLM-5.3-Flash, running entirely on a 100,000-chip cluster of domestically produced Chinese silicon. This is the most credible proof-of-concept yet that China can decouple its frontier AI compute stack from Nvidia. BIDU's 3.77% gain reflects the AI sector halo from this announcement. If GLM-5.3-Flash benchmarks hold at competitive levels, the thesis that US export controls can contain China's AI development is materially weakened.

CNOOC, China's largest offshore oil producer, reported a record first-half net profit surge of 23.4% as elevated crude prices—driven by the Iran war premium—boosted earnings on higher production volumes. In an otherwise risk-off session, CNOOC is the defensive anchor for China investors: state-owned, high-yield, directly benefiting from geopolitical crude repricing. The Iran war commodity premium is not priced as temporary by CNOOC management—a signal that H2 crude assumption is still above $80/bbl in their modelling.

Net assets under management in China's domestic mutual funds shrank by ¥560 billion ($83.3B), or 1.4%, in one month as semiconductor share selling triggered a broad retail rotation to private fund structures. The move from mutual funds to private funds signals HNI capital repositioning into structured strategies—not market exits—which matters for reading the depth of the selloff. PBOC stimulus timing will determine whether this is a temporary reallocation or the start of a sustained retail-driven de-risking cycle.