Beijing announces a $7.2 billion infusion of insurance funds for stocks

China Pacific, Taikang Life, and Sunshine Life are among the companies investing 'patient capital' into A shares to assist with market stabilization.

Beijing has released another roster of insurance firms participating in a program aimed at strengthening and stabilizing the stock market through the infusion of long-term capital.

The State Council's National Financial Regulatory Administration (NFRA), a body that supervises the financial industry, has given the green light to the second round of long-term equity investment trial ventures, valued at 52 billion yuan (US$7.2 billion). This news was announced by state media on Sunday.

The roster comprises of China Pacific Insurance, Taikang Life Insurance, Sunshine Life Insurance, and pertinent insurance asset-management firms, as per the reports.

These organizations will be involved in the trial program by means of contract-based funding, a method in which the investment is handled based on preset conditions and goals specified in an agreement. It is anticipated that the insurance companies will use the influence of long-term and patient capital to uphold the steady functioning of the capital market, according to the reports.

A week ago, Trump issued threats to start applying tariffs on products from China starting from the next month. He also revealed a strategy to surpass China in the realm of artificial intelligence.

"Belt and Road": Chinese energy companies set new records in capacity installation, leaning heavily on fossil fuels.

The dependence on polluting energy sources was still significant, comprising 48 per cent of projects in 2024, a slight decrease from 55 per cent in 2022, according to the report.

Chinese energy corporations established a historic level of generation capacity in foreign markets encompassed by Beijing's Belt and Road Initiative, with almost 50% utilizing fossil fuels.

China has successfully finished projects equating to 24 gigawatts (GW) across over 150 countries they have cooperative agreements with, marking a record since the program's initiation in 2013, according to a report released on Monday by UK consulting firm, Wood Mackenzie. This is a significant increase from the 10GW completed in 2023 and the 22GW accomplished in 2022.

Approximately half of the projects, 52% to be exact, utilized renewable energy sources, which saw a two-fold increase in solar power to 8GW and a quintuple increase in hydroelectric power to 5GW. The remaining 48% of the projects relied on coal, natural gas, and oil, with their collective capacity soaring to 12GW, up from 3GW in 2023.

"Chinese corporations are significantly focusing on environmentally friendly technologies abroad," stated Alex Whitworth, the Vice President and leader of Power and Renewables research for Asia-Pacific. As the expenses decrease, "they are spearheading its implementation in several emerging markets that were unable to afford it before," he further explained.

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China's President Xi Jinping has revealed an 8-point plan for the country's Belt and Road Initiative at a conference.

In September 2021, President Xi Jinping promised to halt the construction of additional overseas coal-powered plants. Approximately 20% of the total capacity of the 104 coal plants, either proposed or currently being built across 26 nations with China's participation, was called off one year later.

Even with the worldwide move towards cleaner energy, there remains about 19GW of coal-powered energy projects under development. Also, approximately 9GW of natural gas projects are at various stages of completion, according to Wood Mackenzie.

Robot manufacturer from China identifies Hong Kong and Macau as potential markets for their large cleaning machines. The cleaning robots of Suzhou Intelligence Technology are utilized in big commercial settings like malls and airports.

"Considering the high cost of labor and the need for cleanliness, these two markets are ideal for introducing our robots," he continued.

Acquiring industrial-level cleaning robots is challenging due to their limited adoption, Kong explains. Therefore, these items present an increased opportunity for expansion, he mentioned.

"The intended audience for domestic cleaning robots is quite specific. They can be easily promoted as gifts for new homeowners or the elderly," stated Kong. "However, convincing commercial property management companies to purchase a cleaning robot is a more complex task, as it requires the agreement of numerous individuals within these organizations."

The Exchange Fund of Hong Kong announces its fifth-highest yearly return, even with a loss in the final quarter. The fund reported a 3% drop in 2024, down to HK$219 billion (US$28 billion), primarily because of a HK$20.1 billion loss in the last quarter.

Hong Kong's financial defense mechanism, the Exchange Fund, revealed a loss for the last quarter due to decreasing bond values and a reduction in the worth of non-US dollar assets.

The fund recorded its fifth-highest annual yield for the entire year, demonstrating the success of a varied investment strategy. The return on investment in 2024 dropped by 3 per cent compared to the previous year, amounting to HK$219 billion (US$28 billion), according to the Hong Kong Monetary Authority (HKMA) statement released on Monday.

The Exchange Fund posted record-breaking results for the initial three quarters of 2024, however, a loss of HK$20.1 billion in the final quarter halted the streak of four straight profitable quarters. During the period from October to December, Hong Kong's stock market experienced a decrease of HK$6.7 billion, while the foreign exchange suffered a valuation loss of HK$27.4 billion. These losses were partially balanced by a rise of HK$11.3 billion in bonds and a HK$2.7 billion hike in foreign stocks.

The subpar showing of the stock markets in the final quarter, coupled with declining bond prices, impacted the Exchange Fund's performance, according to Eddie Yue Wai-man, the HKMA's Chief Executive Officer, during a press conference. He further noted that a robust US dollar also negatively influenced the fund's returns.

The total assets of the Exchange Fund saw a rise of HK$65.9 billion, reaching a value of HK$4.082 trillion by the end of the previous year.

BYD sets aside $5 billion for foreign exchange derivatives trading to mitigate risks from fluctuations in the yuan value. As the biggest electric vehicle producer globally, the company aims to safeguard its expanding international activities from the instability of the yuan, given the escalating trade conflicts.

"In an attempt to counterbalance the negative effects of volatile currency exchange rates and to reduce financial costs, the firm has opted to engage in foreign exchange hedging via derivatives trading," stated BYD in a document submitted to the Hong Kong stock market over the weekend. "The derivatives trading will proceed based on business requirements."

The automobile manufacturer based in Shenzhen, that includes Warren Buffett's Berkshire Hathaway among its shareholders, clarified that the 5 billion dollars would solely be allocated for hedging activities.

Currency futures serve as a protective mechanism enabling traders to limit possible damages from currency exchange. In practical terms, if the Chinese yuan gains strength, it could result in foreign exchange losses for the car manufacturer if its overseas revenue loses value.

BYD's decision to engage in forex derivatives trading stems from its swift international expansion, driven by the growing acceptance of its mass-market electric vehicles beyond China's borders. The firm has a presence in almost a hundred nations.

The primary shareholder of Vanke appoints a new chairman to help the struggling developer navigate its way out of debt. The newly appointed chairman's ties with the state have been positively received, however, the future of the company is still reliant on a resurgence in sales, according to an analyst.

Yu Liang stepped down from his position as chairman for reasons related to job modifications, however, he will stay on as a director within the company, according to a report filed with the Hong Kong stock exchange by Vanke on Monday. The newly appointed chairman, Xin Jie, also holds the position of chairman at Shenzhen Metro Group, which is the largest shareholder of the development company.

The Shenzhen State-owned Assets Supervision and Administration Commission (SSASAC), boasting a wealth of over 5 trillion yuan (around US$689 billion), possesses the capability and sufficient resources to back the Shenzhen Metro Group in fostering Vanke's steady growth via all potential avenues, says a representative from SSASAC. This information was reported on Monday by the government-run publication, Nanfang Daily.

The cost of Vanke's bonds due to mature in 2025 saw an increase of 11 per cent, and the price of bonds set to mature in 2029 grew by 9 per cent, as reported by Dealing Matrix, a company specializing in bond data.

In a different report, Vanke predicted a net deficit of 45 billion yuan in 2024, a significant drop from a net gain of 12 billion yuan in 2023. The company attributed this to declining sales and profit margins, allowances for credit and inventory devaluation, and losses in large-scale asset and equity trades.

Hong Kong's Securities and Futures Commission (SFC) has hit Hang Seng Bank with a penalty of US$8.5 million due to malpractice. The SFC unveiled that the bank had been involved in major unethical activities, such as charging exorbitant fees and encouraging customers to carry out numerous transactions.

The financial regulatory authority in Hong Kong has penalized Hang Seng Bank with a fine of HK$66.4 million (US$8.5 million) for not adhering to regulations and excessively billing customers.

Hang Seng Bank reportedly earned a surplus of around HK$22.4 million from these deals.

The behavior of Hang Seng in these instances was grave and widespread," announced Christopher Wilson, the director of enforcement at the SFC. "Specifically, customers who claimed to be making their own investment choices were continually encouraged by Hang Seng's relationship managers to participate in extensive and continuous CIS transactions."

The punitive measures were a result of an inquiry by the Hong Kong Monetary Authority (HKMA), which exposed a variety of issues related to Hang Seng's distribution of CIS products from June 2016 to November 2017, as per the SFC's announcement.

The SFC revealed that they discovered 111 client accounts that carried out 100 or more CIS transactions within the given timeframe. Although the majority of these transactions were classified as the client's "personal decision", around 46 clients were reportedly swayed by the advice or suggestions of their relationship managers when making trades, as per the announcement.

Snake Year: ANZ predicts Hong Kong's economy will profit from cash influx and interest rate reduction

The city's economic growth is projected to range from 2.5 to 3 per cent, according to Raymond Yeung, ANZ's main economist.

The recent actions taken by Beijing are predicted to increase investment in Hong Kong's stock market, which will become a significant factor for the city's economic expansion in the Year of the Snake, says the regional chief economist at ANZ Banking Group.

Raymond Yeung stated that more reductions in interest rates could boost the number of real estate deals, and a surge in tourism would also have a positive impact on the city's financial health.

"During the Year of the Snake, Hong Kong's economic expansion is projected to be around 2.5 to 3 per cent," Yeung stated during a preview of the Lunar New Year, which kicks off on January 29. "The upcoming year will bring more advantages than challenges for the city."

A variety of strategies could enhance Hong Kong's financial markets and its overall economy. At the Asian Financial Forum held earlier this month, Pan Gongsheng, the governor of the People's Bank of China (PBOC), stated that Beijing plans to escalate the "asset allocation operation in Hong Kong" from the nation’s staggering foreign exchange reserves of US$3.2 trillion.

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Forecasts for the Year of the Snake: What does 2025 hold for your Chinese zodiac sign?

Pan also mentioned that authorities would promote "more superior businesses to go public and issue bonds in Hong Kong", while there were ongoing plans to broaden the cross-border Bond Connect program.

Hang Lung, a developer from Hong Kong, is branching out due to issues faced by consumers. CEO Weber Lo emphasizes the need for self-improvement and maintaining the relevance of their services.

"We need to better ourselves and ensure our services are suitable," stated Weber Lo, the CEO of the Hong Kong construction company. "Our goal is always to introduce fresh concepts and experiences to our clientele, and that is crucial."

In order to combat these tendencies, Lo stated that the firm needs to construct facilities that accommodate a variety of requirements. They also need to prudently modify the tenant composition in each commercial area, keeping in mind the optimal match.

As an illustration, he mentioned the newly opened Grand Hyatt, located in the Spring City 66 complex in Kunming, which is the capital city of the southwestern province of Yunnan in China. This luxury hotel, with its 331 rooms, adds a premium lodging option to the complex that also includes a shopping centre and a 66-floor office tower. The total floor space of this complex is approximately 168,000 square metres, or 1.8 million square feet.

"Lo stated, 'We strive to enhance the customer experience and set our standards higher. As customers enter our complex, we aim to provide a comprehensive experience. Customers are not just visiting our mall for dining, they might also work here, or have international colleagues staying in our hotel. Hence, we aim to offer an all-encompassing service.'"

Hong Kong shares increase as DeepSeek triggers US tech downfall based on value consideration

Shares go up as investors are predicted to search for less expensive alternatives following the introduction of DeepSeek's widely adopted affordable AI model, leading to a US$1 trillion tech slump.

Shares in Hong Kong increased in value, going against the trend of losses in local markets. This was due to rumors that international investors may start moving away from pricy American tech firms. The cause of this speculation was due to Chinese start-up DeepSeek triggering a Wall Street sell-off with its affordable artificial intelligence (AI) model, which has gained significant popularity.

On Tuesday, the Hang Seng Index experienced a slight increase of 0.1 per cent, reaching 20,225.11, furthering its 0.7 per cent rise from Monday. Tencent saw a 1.4 per cent growth, taking its value to HK$401.20, while Alibaba Group Holding's value rose by 1.2 per cent to HK$88.30. Meanwhile, Baidu's shares leaped by 3.6 per cent to HK$87.80, and Xiaomi, a smartphone and car manufacturer, saw its shares escalate by 3.2 per cent to HK$38.30.

The Hong Kong stock market ended trading at midday in observance of the Lunar New Year and is scheduled to recommence on January 31. Stock markets in the mainland, with their prime indicator CSI 300 experiencing a 3% increase in January, were not operational on Tuesday but will restart operations on February 5.

One hour and eighteen

Trump: The impressive performance of Chinese AI startup DeepSeek is a 'wake-up call' for the US technology industry.

"Considering the emergence of DeepSeek, market predictions suggest a decreased demand for premium chips in the future," stated Kelvin Lau, a financial analyst at Daiwa Capital Markets, in a report. "China will persist in enhancing their production capacity for semiconductors, which will require increased domestic replacement."

'Exceptionally appealing': The reason behind the craze of Chinese consumers for a lesser-known local grocery store

Pangdonglai has demonstrated that traditional physical retail is still thriving in China, as shoppers wait in line for hours outside its stores in anticipation of the Lunar New Year celebration.

On a freezing afternoon in Xuchang, a modest city in the north of China's Henan Province, a relentless wind sweeps across the street, eliciting shudders from the people wrapped up and stooped over on the sidewalk.

However, the consumers are undeterred by the chilly weather. Numerous individuals are queued up outside the shopping center, ready for an extended delay. A sign in close proximity indicates that the mall will remain closed for another hour and a half.

According to an anonymous staff member in charge of managing the line, individuals begin to gather as early as 6am or 7am, a considerable time before the mall's opening hours, due to company policy.

The atmosphere seems akin to the unveiling of a new smartphone, however, the store causing such a stir is actually a neighborhood grocery store called Pangdonglai.

In recent years, Pangdonglai has unexpectedly surged in popularity in China, turning its shops into sought-after spots prior to the start of the Lunar New Year holiday, commencing on January 28.

DeepSeek's technological advancement is celebrated in China as the solution for triumphing in the AI battle. In a post on Weibo, Zhou Hongyi from Qihoo 360 expressed his belief that China will ultimately emerge victorious in the AI conflict with the US.

In their domestic environment, Chinese technology leaders and assorted analysts quickly praised the groundbreaking impact of DeepSeek.

Feng Ji, the founder and CEO of Game Science, the developers behind Black Myth: Wukong, expressed in a popular Weibo post that DeepSeek's advancements in AI have the potential to alter China's destiny amidst its ongoing technological clash with the US.

DeepSeek made a public announcement on January 20, unveiling their open-source R1 reasoning model. They assert that this model matches the performance of OpenAI's o1. According to the American start-up, this model has the capacity to navigate complex tasks and solve more challenging problems in fields such as science, coding, and mathematics compared to its predecessors.