China

The US lead over China in artificial intelligence has narrowed to just 3%, according to new benchmarking data from Bloomberg Intelligence. That edge stood at 9% in May and 15% earlier this year, meaning the gap is closing very quickly. Much of China's progress comes from open weight models that are cheaper to produce and freely accessible, unlike the closed weight models from US companies such as Anthropic and OpenAI. The administration's hope has been that cutting off China's access to Nvidia's best chips would preserve the US advantage, but the silicon is already cut off and Chinese labs are still advancing rapidly. Meanwhile, Nvidia-backed US startup Reflection is pitching its open weight model as a domestic alternative for companies that want to build custom AI without relying on Chinese-based models.

Archer Daniels Midland Company's Ag Services business stands to gain from continued Chinese purchases of U.S. soybeans, which would support grain merchandising, origination and transportation volumes. ADM's second-quarter 2026 Ag Services operating profit surged 159% year over year, helped by strong commercial execution and the return of its Barcarena, Brazil, export terminal to full operations. Management said China is well underway in fulfilling its commitment to purchase 25 million tons of U.S. soybeans in 2026 and has been buying roughly 1 million tons per week, a contributor to the company's 2026 outlook. ADM expects Ag Services results in the third quarter to be slightly lower than the second quarter, with fourth-quarter performance depending partly on the pace of U.S. exports and whether additional corn and sorghum programs develop alongside soybean shipments. The Zacks Consensus Estimate for ADM's 2026 and 2027 earnings per share indicates year-over-year growth of 59.2% and 3.9%, respectively, and the stock carries a Zacks Rank #1 (Strong Buy).

Hirundo, an AI safety lab specializing in machine unlearning, released Westernized versions of Alibaba's Qwen open-weight models with Chinese Communist Party political alignment removed directly from the model weights. On Hirundo's evaluation, the original Qwen3.6-35B-A3B produced CCP-aligned censorship, propaganda-aligned framing or political bias in 89.8% of responses across a 500-prompt benchmark, while the Westernized model did so in 2.8%, with reasoning, coding and instruction-following performance essentially unchanged. The reduction held on two external benchmarks, with refusals on DECCP falling from 65.26% to 3.16% and non-compliance on ChinaBench falling from 96.67% to 6.67%, and the same method cut CCP-aligned responses in the much smaller Qwen3.5-4B from 89.2% to 1.2%. On GPQA, IFBench, LiveCodeBench and MMLU-Pro, the Westernized model's scores stayed within 0.72 points of the original model's on average, and its safety and harmfulness benchmark scores also held. Both models are available now on Hugging Face as Qwen3.6-35B-A3B-Westernized and Qwen3.5-4B-Westernized, and Hirundo intends to release its CCPC-500 benchmark publicly.

Krishna Srinivasan, director of the Asia and Pacific Department at the International Monetary Fund, said in an interview with Xinhua Finance that China's shift toward a consumption-driven growth model supported by innovation could reinforce its medium-term growth trend and benefit the global economy. Srinivasan said China gives top priority to research and development, advanced manufacturing and innovation, with R&D spending second only to the United States and the most patent filings in the world. The 15th Five-Year Plan for National Economic and Social Development, covering 2026 to 2030, focuses on innovation, technological self-reliance and new quality productive forces. IMF research indicates that artificial intelligence technology could boost growth in emerging market economies by 0.2 to 0.8 percent, although the benefits remain uncertain and may be distributed unevenly. He stressed the need for policies to disseminate artificial intelligence technology, develop skills, adapt labor markets, protect social welfare and ensure AI governance, noting that this transition requires stronger social safety nets, structural reform of finance and fiscal policy, and adjustments to incentives that have long aimed at generating growth. On regional impact, data show that Asia accounts for about two-thirds of global economic growth, with China contributing about 30 percent, and the IMF expects that every 1 percentage point increase in China's growth will be associated with about a 0.3 percentage point increase in growth for other Asian countries over the medium term, especially those with strong trade links to China such as Vietnam and South Korea. The IMF also estimates that reducing non-tariff trade barriers in a legally binding form consistent with World Trade Organization principles would raise Asia's real gross domestic product by 1.8 percent over the medium to long term, with ASEAN economies benefiting especially. Srinivasan also spoke about the IMF's International Finance Research Center in Shanghai, the fund's only research center outside Washington, D.C., saying it focuses on studying emerging market and middle-income economies, not just China. Since it opened last December, the center has established a research steering committee and expanded its team of economists, research analysts and visiting scholars. The China-IMF Capacity Development Center based at the same site helps translate research into practice through capacity building and peer learning.

Chinese mutual funds are shutting down at the fastest pace in eight years, after a weak Chinese stock market, a lack of new capital inflows, and continuous investor redemptions. Data compiled by Bloomberg shows that 256 publicly offered funds have been liquidated this year, and another 46 have warned investors that they may soon close, making it possible that more than 300 funds will shut down by the end of this year. If that happens, it would be the highest number since 2018, when fund closures hit a record high after a major industry reform forced many funds to cease operations. China's securities regulations require fund managers to report remedial plans, such as fund liquidation, to regulators if a fund's net assets stay below 50 million yuan, or 7.5 million dollars, for 60 consecutive trading days. Most of the funds that closed this year fell into that category. Meanwhile, the China Securities Index Active Equity Fund Index has posted an average annual return of negative 0.8% over the past five years, even though it has risen 3.6% this year. The CSI 300 has already fallen 6% in 2026, while the Star 50 index, which is dominated by chip stocks, has trimmed its gain to 14%. Chen Junde, a fund manager at Guangdong Fund Investment, said funds that are too small, have too few investors, or consistently underperform their benchmarks face high operating costs and struggle to justify continuing operations.

Niu Technologies delivered 537,457 units in the third quarter of 2026, a 15.4% increase from 465,873 units in the prior-year period. The quarter lifted year-to-date sales volume to 1.23M units, up from 1.02M units in the first nine months of 2025 across its lineup of e-motorcycles, e-mopeds, e-bicycles, e-bikes, and kick-scooters. Domestic sales in China expanded 9% year-over-year to 490.41K units in the third quarter compared to 451.46K units in 3Q 2025, bringing year-to-date domestic volume to 1.14M units, with the N, M, and F series remaining top sellers across the region. International markets were the standout growth driver, with unit sales surging over 226% year-over-year to 47.05K units from 14.42K units in 3Q 2025, bringing year-to-date international volume to 93.22K units. The company also said its NIU AIOS platform received the Red Dot Award for its AI features and user experience, and it plans to continue embedding these connected technologies across future product lines.

China's Ministry of Commerce reported that customer traffic and revenue at 78 key shopping streets and commercial districts monitored by the ministry rose 3.4% and 5.3% year on year during the first three days of China's seven-day National Day holiday, which runs from October 1 to 7. The report said the Chinese government's consumer goods trade-in program generated 1.96 billion yuan in sales during the first three days of the holiday, equivalent to about 9.81 billion baht, benefiting 3.48 million consumers. Xinhua News Agency reported that the program brought about the trade-in of 46,000 vehicles, generating 7.45 billion yuan in new car sales, or about 37.2 billion baht; 1.51 million home appliances worth 6.5 billion yuan, or about 32.5 billion baht; and 1.71 million digital and smart devices worth 4.9 billion yuan, or about 24.5 billion baht. Meanwhile, Chinese authorities expect cross-regional passenger trips during the seven days to reach 2.13 billion, or an average of 300 million per day, with railway passenger trips on October 1 alone hitting 25.2 million, a record high for a single day. The Ministry of Culture and Tourism has also carried out a one-month national tourism promotion program since late September, with local governments holding more than 20,000 events and distributing vouchers and consumer subsidies worth about 310 million yuan, or roughly 1.55 billion baht, to boost tourism consumption.

China is pressing ahead with the consolidation of its regional banks. In 2025 alone, more than 670 financial and banking entities were closed, a record high, and nearly all of them were in rural areas. As a result, the number of banking entities fell to 3,139 at the end of 2025, a decline of 23% over four years. A report by Fitch, citing data from China's National Financial Regulatory Administration, or NFRA, said China's small banks, most of them rural and city-level lenders, remain the weakest part of the system, weighed down by asset-quality problems, weak capital and regulatory shortcomings. Rural and regional city banks together account for more than a quarter of the assets in China's banking system. Jason Bedford, a senior researcher at the East Asian Institute of the National University of Singapore, believes the consolidation simplifies regulation and limits the liquidity risks of small financial institutions, adding that he has never seen consolidation on this scale. In July, authorities in the city of Wuhan took control of Z-Bank, which held 124 billion yuan in assets at the end of 2024, before merging it with Hankou Bank. It was the first bank takeover since the seizure of Baoshang Bank in Inner Mongolia in 2019. Moody's expects the mergers and acquisitions to continue.

MagPro, also known as Nanjing Xipu Technology Co., Ltd., a joint venture between CIGU Technology Corp. Ltd. and EPG Data Technology (Shanghai) Co., Ltd., announced the launch of the AeroLev 1850, a 1.85-megawatt magnetic-bearing air-cooled chiller platform that supports operation at temperatures up to 45°C and is designed for AI data centers in markets with hot, humid climates and limited water resources, such as Thailand. At its core is an air-cooled magnetic-bearing compressor with an isentropic efficiency of up to 87%, while a patented condenser increases refrigerant subcooling by more than 3°C. These technologies improve overall energy efficiency by up to 40%, reduce failure rates by up to 8% compared with conventional oil-lubricated compressors, and cut maintenance costs by up to 10% compared with traditional chillers. General Manager William Wu said that as AI drives rising demand for computing power, operators need cooling infrastructure that can scale without increasing dependence on water resources. Alik Wan, founder and chairman of EPG Data Technology (Shanghai) Co., Ltd., said MagPro is a significant step in the company's global cooling technology strategy.

The number of Japanese companies operating in China has fallen to just 10,118 as of June 2026, the lowest since record-keeping began in 2010 and down 22% from the previous survey in June 2024, according to data from Teikoku Databank, a Japanese credit research firm. Compared with the peak in 2012, the number of Japanese companies in China has now dropped by roughly 30%. Over the past two years, as many as 4,137 Japanese companies withdrew from China entirely, a record high, while only 1,221 Japanese companies entered the Chinese market through setting up subsidiaries, factories or representative offices during the same period, the lowest on record excluding the COVID-19 pandemic period. Jeremy Chan, an analyst at Eurasia Group, said many Japanese companies had already planned to scale down their operations in China, but the rapid deterioration in China-Japan relations has led many to consider exiting the Chinese market with greater urgency. Tensions flared after Japanese Prime Minister Sanae Takaichi told parliament in November 2025 that Japan could become militarily involved if China used force to invade Taiwan, and Beijing responded by restricting exports of certain critical minerals to Japanese companies and urging Chinese citizens to avoid travel to Japan. Jesper Koll, an expert at Monex Group, noted that companies listed on the TOPIX index have seen the share of their profits coming from China fall to below 15% this year, from about 23% in 2020. Conversely, the share of profits coming from the U.S. market rose to about 35% from 25% over the same period.

NIO Inc. reported third quarter 2026 deliveries of 109,178 vehicles, landing inside its September 1 guidance range of 108,000 to 111,000 vehicles, alongside guided revenue of RMB 33,285 million to RMB 34,051 million. September deliveries came in at 37,408 vehicles, bringing 2026 year-to-date deliveries to 300,301 and cumulative deliveries to about 1.30 billion as of September 30, 2026. Deliveries grew year over year across NIO, ONVO and FIREFLY, but the third quarter growth rate slowed to 25.4% from faster rates earlier in 2026, pointing to moderating operational momentum. The company's narrative projects CN¥174.7 billion in revenue and CN¥4.0 billion in earnings by 2029, with a fair value estimate of $6.38, while more optimistic analysts had assumed roughly 37.7% annual revenue growth and about CN¥11.7 billion in earnings. The moderated pace puts near-term pressure on the key catalyst of margin improvement and progress toward breakeven, and sharpens the risk that intense Chinese EV competition could keep pricing and profitability under strain.

Vor Biopharma reported a post hoc analysis from a China-based Phase 3 trial showing that telitacicept produced deep, durable clinical responses and was generally well tolerated over 48 weeks in adults with generalized myasthenia gravis. The analysis highlighted that most patients who reached minimal symptom expression maintained it and spent much of their remaining follow-up in this state. The new data reinforce the depth and durability of response but do not materially change the key near-term catalyst, the UPSTREAM global Phase 3 topline readout in 2027, or the central risk that global data might not match prior China experience. The results sit beside Vor's completion of enrollment in the global UPSTREAM Phase 3 gMG trial in early September 2026. Vor Biopharma's narrative projects $111.0 million revenue and $19.1 million earnings by 2029, implying an earnings decrease of $608.7 million from $627.8 million today, and forecasts a $39.00 fair value, a 109% upside to its current price.

Trip.com Group reported quarterly results with earnings per share above analyst estimates, supported by its mix of accommodation, transportation ticketing, and package-tour services across global markets. The beat, according to Simply Wall St, supports the view that Trip.com's technology-driven platforms and expanding international travel offerings are strengthening the resilience and breadth of its business model, though it does not materially change the key near-term catalyst of sustaining international growth. The most relevant recent development alongside the earnings beat is a July 2026 administrative penalty from China's SAMR, which Trip.com has said will prompt governance rectifications, bringing regulatory risk into sharper focus around higher compliance costs and potential limits on high-margin services. Trip.com Group's narrative projects CN¥85.8 billion in revenue and CN¥15.6 billion in earnings by 2029, yielding a $58.45 fair value, a 53% upside to its current price, while bullish analysts assume revenues near CN¥91.8 billion and earnings around CN¥18.8 billion by 2029.

Chuangyao Technology held its 2026 semi-annual earnings briefing on September 29 via the Shanghai Stock Exchange's SSE Roadshow Center, responding to investor questions on SparkLink 2.0 tape-out and M&A progress. In the first half of 2026, the company achieved operating revenue of 167 million yuan, down 9.02% year-on-year; net profit attributable to the parent was 11.7539 million yuan, plunging 63.16% year-on-year; non-GAAP net profit swung from 26.7156 million yuan in the same period last year to a loss of 2.7683 million yuan, a decline of 110.36%, which the company said was mainly due to a year-on-year increase in government subsidies during the period. Gross margin fell to 28.00% in the first half, down 3.28 percentage points year-on-year, and net margin was only 7.05%, down 10.36 percentage points from the same period last year; net cash flow from operating activities was 45.7005 million yuan, surging 181.95% year-on-year, but the company admitted this was mainly due to an increase in deposit interest actually received. In the second quarter, the company achieved operating revenue of 96.1239 million yuan, up 36.23% quarter-on-quarter, but net profit attributable to the parent was only 1.368 million yuan, down 93.2% year-on-year and down 86.83% quarter-on-quarter. The company confirmed that SparkLink 2.0 has been initiated and is under continuous R&D investment, with the protocol standard adding a network layer and featuring ranging and positioning as well as integrated sensing and communication functions, but regarding when tape-out and shipment will occur and when mass production will begin, it only said to refer to company announcements; EtherCAT slave controller chips have achieved sales to customers in industrial, medical, semiconductor and other fields, and have entered the domestic mainstream embodied robot industry chain, but related revenue still accounts for a relatively low proportion. On M&A progress, the company responded that its investment and M&A layout is advancing steadily, and it will actively yet prudently promote external expansion under strict risk control. As of September 30, the company's stock price closed at 31.99 yuan per share, down more than 50% from the issue price of 66.6 yuan per share, and remains below the issue price.

China did not signal any plan to lower tariffs on US soybeans following last month's US-China summit. Soybeans were not included in the list of goods worth 30 billion dollars targeted for tariff reductions that the two governments published after the meeting, and the American Soybean Association, a producers' group, made no secret of its disappointment. China is the largest export destination for US soybeans, but intensifying trade war has cost US producers market share to Brazilian supplies, and with the additional 10 percent tariff still in place, Chinese private buyers may keep hesitating to purchase. China indicated it intends to lower tariffs on US corn and wheat, but demand is seen as limited, and Nippon's chief grain analyst Hideki Hattori analyzes that China likely wants to hold soybeans in reserve as a bargaining chip in future negotiations with the United States. In the United States, now in harvest season, diesel prices have surged amid turmoil in the Middle East, and according to AAA, the average price as of the 2nd was about 6.37 dollars per gallon, up roughly 70 percent from a year earlier, prompting American Farm Bureau Federation President Zippy Duvall to ask President Trump for support including a cut in the diesel tax.

Porsche is betting that a return to gas-powered vehicles will drive its turnaround, but the pivot may not be enough to fill a costly near-term gap. CEO Michael Leiters, in place since January, plans to bring back a combustion-engine Macan to sell alongside the electric version, though not until 2028, after the outgoing gas Macan's production was slated to end in July. Electric Macan sales dropped 40% in the first half of 2026 and Taycan EV deliveries fell 25%, while the 911 was the only model line to grow, up 19%. HSBC estimates the timing gap will cost Porsche around 25,000 units and roughly €500 million ($563 million) in profit in 2027, and forecasts operating profit will fall 8% that year. China deliveries sank 32% in the first half to around 14,500 units, extending a four-year decline, and first-half revenue fell 5% to 17.23 billion euros ($19.4 billion) even as operating profit rose 34% to 1.35 billion euros ($1.5 billion). On Sept. 18, Volkswagen said it would take a non-cash impairment of around 6 billion euros ($6.8 billion) on goodwill tied to Porsche, and investors will hear more on Oct. 7 at Porsche's capital markets day.

China's Ministry of Commerce announced on the 3rd that it has launched an anti-dumping investigation into para-nitrotoluene, a chemical used as a raw material for pharmaceuticals and pesticides, targeting imports from the European Union. It claims that import prices from the EU fell by about 60 percent between 2022 and 2025, potentially harming China's domestic industry. The move is seen as a countermeasure against the EU, which has been tightening regulations on China, and trade friction with Europe is widening.

Morgan Stanley cut its Nike price target to 27 from 31, with analyst Alex Straton saying the company's first quarter is likely this year's high watermark rather than the low. Straton, who went underweight on the stock late last year, said Nike's guidance embeds a high single digit sales decline and that reaching full-year targets requires both top-line and earnings trends to degrade from here. She attributed the pressure to excess inventory in North America and a similar dynamic in China, the two biggest sportswear markets in the world, compounded by a challenging macro backdrop. Straton flagged three problem areas for the company: Sportswear, which makes up almost two-thirds of the portfolio and roughly 30 billion dollars in revenue, the Jordan brand, and a material change in the China outlook. She said she has not seen the bottom in negative revisions and that Nike may face a shrink-to-grow story, with further de-rating possible if the company settles into a lower-growth, lower-margin multiple. Nike holds an investor day in November, where Straton said the company needs to clarify the right revenue size for Sportswear, Jordan and China before investors can gauge when growth and historical margins might return.

Nike shares fell 5.5% in the morning session after the athletic apparel brand reported a 4% sales decline and issued weaker-than-expected full-year profit guidance. The company guided fiscal 2027 revenues to decline by high single digits and estimated adjusted diluted earnings per share between $1.15 and $1.35, missing analyst expectations of $1.68 per share amid product challenges and an ailing China business. For calendar Q3 2026, which is fiscal Q1 2027, sales fell 4.3% year on year to $11.21 billion, short of revenue expectations, while GAAP profit of $0.48 per share came in 9.9% above analysts' consensus estimates and gross margin expanded 60 basis points to 42.8% on lower logistics costs. Chief Financial Officer Dave Denton warned on the call that China's revenue will worsen for the balance of the year as Nike cleans up promotional distribution, and Chief Executive Officer Elliott Hill said deliberately reducing Dunk production by nearly half created a roughly $200 million headwind in Sportswear. Denton also noted that the bulk of savings from the Pace operating model transformation, which targets approximately $2.5 billion in cumulative savings through fiscal 2031, will not ramp until fiscal 2029 and 2030.

Nike Inc. is cutting jobs and embarking on a sweeping overhaul of the business as results deteriorate and test Wall Street's patience with Chief Executive Officer Elliott Hill. Sportswear, roughly 50% of Nike's business, is still down, Jordan is down, and China plunged 26% in the latest quarter, according to Bloomberg Intelligence senior US e-commerce and retail analyst Poonam Goyal. Goyal credited Hill with fixing North America and the performance business, which grew high single digits in the latest fiscal quarter, but said the turnaround will take more than 12 months and that investors will hear more at the analyst meeting in November. Nike already has a 2.5 billion dollar cost-savings plan in place that carries 1 billion dollars in restructuring costs, she said, adding that the remaining problem is product-led. Jordan, which Goyal said is 13% of Nike's sales and a 7 billion dollar business, suffered from flooding the marketplace with retro product, eroding the exclusivity, selection and scarcity that make the brand work.

Nike shares have fallen to multi-year lows near $32 after the company's fiscal first-quarter results showed an earnings beat driven by margins but an $11.2 billion revenue haul that was over 4% lower than a year earlier. Analysts have continued cutting estimates and price targets, with the consensus EPS estimate for full-year FY 2027, which ends in May, dropping from $1.67 to $1.61, representing annual growth of just 1.9%. On the earnings call, CEO Elliott Hill said the company is prioritizing marketplace health over near-term volume, noting that performance categories are gaining traction while Sportswear, Jordan Brand and Greater China remain under pressure. CFO David Denton introduced a clearer financial framework including full-year guidance and a multiyear cost program, while warning that restructuring pressure will extend into fiscal 2028. The article was originally published on Zacks Investment Research.

iQIYI announced that cumulative revenue-sharing for its AIGC film series The Ferry Man has surpassed RMB 8 million, or US$1.2 million, as of September 23, as the third instalment, The Ferry Man: The Dream of the Princess, debuts on October 1 on iQIYI and iQIYI International. Produced by iQIYI and GHY Culture & Media, the series' first two titles, The Ferry Man: Butterfly Dream and The Ferry Man: The Dream of the Celestial Maiden, were released simultaneously on August 22 and recovered their full production costs within the first week, surpassing RMB 8 million in cumulative box office within the first month. Producer Zhichao LI said the first two films moved from project initiation to launch in less than four months, with AI improving efficiency during preparation and production while script development and post-production stayed largely consistent with traditional workflows. The series builds lasting digital asset value through AIGC, with the three lead actors licensing their likenesses and providing their own voiceovers, and standardized reusable digital character, scene and prop assets that let the third film maintain visual consistency while cutting production costs. The release follows iQIYI's earlier long-form AIGC effort, Mystic Tales - The Spider Lady's Vendetta, which the company describes as China's first AIGC internet feature film released under an Internet Drama and Film Distribution License.

Volkswagen's chief sustainability officer Dirk Voeste said Europe's automakers must adapt to Chinese competition rather than try to preserve the old industrial model with tariffs or slogans. Volkswagen's deliveries in China fell 36.6% in the second quarter, and a company spokesperson told Fortune the Chinese automotive market has declined by 20% year-over-year, with Volkswagen's share down 26%, though the company remains the leader in combustion-engine vehicles with a market share over 22%. Volkswagen expects the overall Chinese market for new vehicles to decline to below 21 million vehicles this year and said Volkswagen Group China cannot escape the trend and is adjusting its plans accordingly. Voeste, who joined Volkswagen in 2023 after 22 years at BASF, described the company's Regenerate+ sustainability framework, built with more than 100 employees rather than an outside consultancy, and said the circular economy around remanufacturing, refurbishment, used parts and material reuse is really a new profit pool. He said his daughter's challenge to clean up the mess his generation left became a private mission statement, and argued that companies and economies that endure will be those that change before outside pressure forces them to.

Goldman Sachs has identified Contemporary Amperex Technology Co and Jiangsu Zenergy Battery Technologies Group as its top picks in China's battery sector. CATL, the world's largest battery manufacturer, ranks first on leading scale, battery technology and cost competitiveness, with Goldman Sachs setting a 12-month price target of HK$947 for its H-shares and RMB565 for its A-shares under a sum-of-the-parts valuation. The bank points to CATL's shift from cells to integrated energy solutions as a key value driver, supporting share consolidation, higher project value capture, recurring service revenue and stronger margins. Zenergy takes second place as an underappreciated high-growth EV battery platform founded in 2019, benefiting from auto-component expertise inherited from Fuyao Glass and described by Goldman Sachs as the fastest EBITDA growth in its coverage universe. The bank maintains a Buy rating on Zenergy with a price target of HK$9, noting it trades at a significant discount to peers. Risks cited for both names include slower-than-expected EV and energy storage demand, rising raw material costs and intensifying competition.