China Daily Briefing

Yi Huiman, who served as chairman of China's securities regulator from 2019 to 2023, has been formally prosecuted for accepting bribes described as 'especially large' in scale, with the case filed in Qingdao — a signal that Beijing's sweeping anti-corruption campaign in the financial sector is reaching the top of the capital markets regulatory chain. SCMP's reporting noted that Yi's prosecution follows a wave of enforcement actions against senior financial officials, consistent with the NDRC and State Council's stated goal of cleaning up market integrity before the next phase of capital market opening. For investors, the enforcement signal is double-edged: near-term, it reinforces governance uncertainty in the CSRC's regulatory pipeline; longer-term, credible enforcement is precisely what institutional allocators need to see to raise China's governance discount.

SCMP's EV desk reported that Chinese carmakers are diversifying battery supply chains beyond CATL while Beijing is pushing for solid-state battery production targets by 2030 — a technology that would deliver twice the energy density of current lithium-ion cells and eliminate the fire risk that has been a regulatory barrier to EV adoption in European markets. Chinese OEMs are simultaneously seeing accelerating market share gains in Europe's EV segment, countering the narrative of pure US-China trade war damage to Chinese export ambitions. LI Auto and NIO's outperformance today (+2.14% and +2.06%) is the equity market's response to this structural read — both names have clean-sheet EV architectures that would benefit from solid-state integration faster than legacy automakers.

Natixis analysts told SCMP that Chinese and Hong Kong equities face a challenging fourth quarter as three headwinds converge: underwhelming stimulus follow-through from Beijing, tighter US financial conditions from the Fed's rate-hike-or-hold debate, and a shifting narrative around the AI infrastructure trade that has been one of the few bright spots in China's tech sector. The Natixis note specifically flagged that Chinese corporate profitability remains below pre-COVID levels despite surface-level recovery metrics, though the AI power boom — where China's manufacturing overcapacity in solar and battery sectors creates an unexpected data center power advantage — offers the most credible bull case for selective exposure. This matches the FXI +0.30% / TCEHY -2.96% split today: the index holds but the old-economy platform names don't.