China Daily Briefing

SCMP Business reported Beijing is calling for more efforts to stabilise stock market after the AI-driven global rout renewed pressure on China equities. State funds and brokerages are receiving guidance to increase equity purchases — the same national-team mechanism deployed in August 2024. The signal matters for the A-H premium: when the national team is visibly active, southbound Stock Connect flows from mainland buyers typically accelerate into HK-listed China names, creating a floor under HSCEI that pure offshore funds can't replicate. CSI 300 holding the 3,800 level is the line to watch.

SCMP Business reported that China's tightened EV safety push — new mandatory battery thermal runaway standards — is paradoxically creating a comeback lane for Tesla and GM. Foreign brands, particularly Tesla (whose Model Y already meets the new standard), gain competitive ground against domestic peers who must spend to retrofit older platforms. This regulatory arbitrage plays into Tesla's shrinking margin narrative differently: in China specifically, the new standard improves Tesla's relative position even as TSLA stock sold off -8%+ on US regulatory fears for AI. XPeng's +6.67% gain suggests the market is pricing quality-tier domestic EV makers as beneficiaries — compliance costs are higher for lower-tier brands.

SCMP Business reported that China's domestically-sanctioned AI chipmakers — companies operating outside of NVIDIA's ecosystem due to US export controls — have reported their first-ever quarterly profits. This is a structural story: the Democrat midterm sweep and AI regulation fears that tanked US tech actually improve the case for China's alternative AI stack, since Democrat-era regulation is likely to maintain or tighten chip export controls. For investors, the question is whether Cambricon, Biren, and similar names can compound their new profitability under sustained demand from Chinese hyperscalers who have no alternative. SCMP framed it cautiously — first profits don't guarantee the trend continues — but the direction of travel is clear.