Viewpoint | DeepSeek's growth sparks concerns of an AI-fueled cold war

The US needs to stop its clearly ineffective technological restrictions on China, and should instead collaborate to establish explicit guidelines for the implementation of AI.

5:00 AM

Could China's affordable DeepSeek signal the downfall of Nvidia's reign in the chip market?

UBS shows favoritism towards US stocks and bonds, with Trump's business-friendly strategies benefiting all

Fund manager Goldberger shows preference for the 'Magnificent Seven' technology stocks and is optimistic about Treasuries and credits in light of potential rate reductions.

UBS Asset Management has a positive outlook on US equity and bond markets for this year, believing that President Donald Trump's policies favoring business and deregulation will boost corporate profits and bolster the world's largest economy.

"During Trump's tenure, I anticipate increased uproar and unpredictability with a broader scope of results," stated Nicole Goldberger, the company's global portfolio management leader, in a discussion in Hong Kong recently. "However, it's crucial to keep the overall perspective in mind. These strong favorable conditions back our optimistic position."

The fund manager, based in New York, is in charge of UBS's US Growth and Income Strategy, a balanced fund worth $320 million. Its major equity holdings in December consisted of Apple, Nvidia, Microsoft, Amazon.com, and Alphabet. The fund also contained bonds from Uniti Group, Fortress Transport, and Xerox, among others.

UBS continued to favor the IT and communication services industries, propelled by robust profits from the "Magnificent Seven" shares, which include Meta Platforms and auto manufacturer Tesla. These tech powerhouses saw a 51% increase over the previous year, compared to a 22% rise in the S&P 500 Index.

"Reflecting on the past two years, she stated that the 'Magnificent Seven' have largely driven the majority of the returns."

Hangzhou is rising as a fresh technology center, housing 'Little Dragons' such as DeepSeek and Unitree. Six start-ups from Hangzhou are enhancing the global reputation of Alibaba's birthplace and redefining the landscape of Chinese innovation.

Hangzhou, the main city in China's southeastern region of Zhejiang, is swiftly becoming known as a top tech center in the nation, thanks to the emergence of local startups referred to as the "Six Little Dragons".

"Being named as one of the 'Six Little Dragons' is a privilege," stated Zheng Dongxin, product manager at Deep Robotics, in a Thursday interview.

In December of the previous year, Singapore Power Group started using Deep Robotics' four-legged robot for inspecting power tunnels. This marked the first time a Chinese quadruped robot has been used for industrial purposes overseas. In addition, the company has been intensifying their work on humanoid robots, with an anticipated product release in the second and third quarters of this year, according to what Zheng informed the Post.

He attributed the triumph of his firm to the "culture of creativity" in Hangzhou, nurtured by advantageous governmental strategies like tax benefits, the growth of industrial zones, and financial support.

Warming trends in Australia: More high-end properties are being purchased by Chinese buyers

During the fiscal year that concluded in June, Chinese individuals were the leading overseas investors in Australian residential real estate.

"During the holiday season, we experienced a 20% rise in queries from potential buyers from mainland China," he stated. "Over the previous five days, we've managed to lock in 12 down payments for properties located in Sydney's suburbs, specifically for larger houses."

Li's firm maintains an international branch in Shanghai. He mentioned that buyers from mainland China are now considering properties valued over A$1 million (US$627,000), which exceeds their initial budget.

One of the customers he serves is an affluent family from mainland China who purchased a five-bedroom house in Chatswood, a neighborhood approximately 15 minutes from the central business district of Sydney, priced at A$5 million.

Li stated that although they initially planned on spending A$3.5 million on a duplex house, they later decided to purchase a pricier property.

Hong Kong shares go up as investors search for indications of new stimulus from China

Share values increase as the excitement for China's tech industry surpasses the dangers posed by the latest US duties on steel and aluminium imports

The surge in share values is due to the increased interest in China's tech industry, which is seen as more significant than the potential threats from the new US import taxes on steel and aluminium.

The Hang Seng Index saw a rise of 1.8 per cent, closing at 21,521.98, this follows a 4.5 per cent rise from the previous week. The Hang Seng Tech Index also saw an increase, jumping 2.7 per cent. The index has seen a total increase of 19 per cent since the beginning of the year, largely due to positive speculation on Chinese tech firms. Meanwhile, the Shanghai Composite Index on the mainland experienced a 0.6 per cent gain.

The food delivery service, Meituan, saw a 5.6 per cent increase in value to HK$162.70, while the short-video platform, Kuaishou Technology, rose by 2.9 per cent to HK$47.65. Additionally, tech car manufacturing company, Xiaomi, experienced a 3 per cent growth to HK$43.75.

In negative news, the power tool manufacturer, Techtronic Industries, saw a decline of 1.9 per cent, bringing its value down to HK$100.30. Similarly, automobile retailer Zhongsheng Group experienced a 1.5 per cent decrease, reducing its stock to HK$13.62. The sportswear label, Li Ning, also faced a downturn of 1.2 per cent, dropping its price to HK$16.

Trump declared on Sunday his intention to impose a 25 per cent tariff on all steel and aluminium imports from every nation into the US. He also mentioned that he would be introducing corresponding tariffs on nations that impose taxes on US imports. These measures could be implemented as early as Tuesday or Wednesday.

Laopu Gold's jewelry is experiencing booming sales, even with the sluggish consumer expenditure in China. Admirers of Laopu Gold appreciate its 'set price' system and detailed artistry.

The company, listed in Hong Kong and with only 36 outlets across Greater China, reported sales of pure gold and gem-set jewelry amounting to 3.5 billion yuan (US$482.7 million) in the first six months of 2024. This represents a 148 percent increase compared to the previous year, as per their interim report. Additionally, their net profit soared almost 200 percent to 588 million yuan in the same timeframe.

Shares of Laopu Gold have increased over 550% since the company first started trading in June, hitting a peak of HK$457 (US$58.7) this Tuesday.

"Wealthy customers are not only less impacted by overall economic situations, but crucially, unlike the typical consumer who purchases gold as an adornment or for use, they also take into account the investment potential of gold items," he stated.

This implies an increase in earnings for Laopu. As stated in their half-year report, the firm's gross profit margin hit 41.3 per cent in the initial six months of 2024, a significant increase compared to Chow Tai Fook's approximate 20 per cent.

Investors demonstrate substantial enthusiasm in utilizing mainland China bonds as repo collateral in Hong Kong. A repo refers to a brief borrowing deal involving the sale of securities with the intention of buying them back later at a marginally increased cost. A repo comprises a temporary borrowing operation where securities are sold and later repurchased at a slightly elevated price.

The recent agreement, which began this Monday, is among the series of policy steps announced last month by mainland and Hong Kong central banks to enhance financial ties across borders. The repo-agreement step had been viewed as a final stage reform to simplify capital flow restrictions, assist overseas investors in boosting their returns and handling liquidity.

A repo, or repurchase agreement, is a brief lending deal where assets are sold with a promise of buying them back later at a slightly increased cost. The transaction provides the seller with funding at a lower interest rate, while the buyer benefits from a favorable return on the collateral, which is usually comprised of short-term, secure and easily convertible assets.

On Monday, financial companies such as Citic Securities International Capital Management, GF Global Capital, and Eastfort Asset Management were some of the earliest investors to finalize offshore yuan repo transactions through their onshore Chinese bonds under the Bond Connect scheme heading northbound, as per Standard Chartered, one of the scheme's 11 market creators in Hong Kong.

The initiative is designed to assist customers in securing yuan liquidity, providing a boost to foreign investors' onshore bond holdings, enhancing capital productivity, increasing the appeal of yuan assets for global investors, and reinforcing Hong Kong's dominant role as a hub for offshore yuan transactions, according to John Thang, the head of markets and strategic client management and solutions for Hong Kong, Greater China, and North Asia at the bank.

Thang mentioned that the bank has gotten numerous inquiries from clients, with a few showing a desire to participate.

Renewable Energy: China to Let Market Determine Solar and Wind Energy Prices

The shift from established rates will 'lay a strong groundwork for the establishment of a consolidated national power market system', according to an analyst.

The cost of electricity generated from renewable sources in mainland China will now be determined by market dynamics instead of being regulated by the government. This move is part of China's efforts to modernize its electricity industry and promote the growth of green energy.

The National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) collaboratively released a statement on Sunday, discussing the intensification of "market-based reform" for renewable electricity pricing.

The cost of grid-connected power produced from sustainable resources like wind and solar, which was once set, will now be dictated by market forces in the nation's electricity market, according to the announcements.

"The authorities highlighted that the fixed rates for grid electricity do not accurately represent the supply and demand dynamics in the market due to the widespread growth of renewable energy. They also pointed out these rates fail to contribute to the regulation of the power system."

The NDRC has instructed local authorities to present their respective strategies for the transition before the year concludes.

According to the NEA, by 2024, China's capacity for renewable energy, primarily wind and solar, had reached 1,410 gigawatts (GW). This represented over 40% of the nation's total power capacity, overtaking coal.

The growing significance of renewable energy in China's power infrastructure makes the establishment of rules governing its pricing system crucial, according to Pierre Lau, the leader of Asian utilities and clean energy research at Citigroup, as stated in a Monday report.

Alibaba provides affordable access to additional DeepSeek AI models, dismisses investment gossip

Alibaba is granting customers access to six fresh DeepSeek models, simultaneously dismissing rumors of it backing the rapidly emerging start-up.

Alibaba's division for cloud computing and artificial intelligence is introducing six new DeepSeek models via its extensive language model service platform, Bailian. This information was disclosed in a WeChat message posted by Alibaba Cloud on Sunday.

Alibaba, the proprietor of the South China Morning Post, saw a 5.5 per cent increase in its stock value in Hong Kong this past Monday.

The tighter merging of Alibaba's cloud service and DeepSeek models is happening as Chinese companies and consumers are quickly embracing the open-source products of the start-up.

Alibaba is providing customers with six additional DeepSeek AI models at affordable rates, dismissing any conjecture of an investment in the rapidly growing startup.

Alibaba's division for cloud computing and artificial intelligence has announced the availability of six new DeepSeek models. This is being done through their extensive language model service platform, Bailian, as revealed in a post on WeChat by Alibaba Cloud on Sunday.

On Monday, Alibaba's stock, the company that owns the South China Morning Post, experienced a 5.5 per cent increase in Hong Kong.

The further merging of Alibaba's cloud service and DeepSeek models is happening at a time when Chinese companies and customers are quickly embracing the start-up's open-source offerings.

Alibaba is providing customers with six new DeepSeek models at affordable rates, dismissing rumors of any investment in the rapidly growing startup.

Alibaba's division for cloud computing and artificial intelligence has introduced six new DeepSeek models via its expansive language model service platform, Bailian. This information was disclosed in a WeChat message from Alibaba Cloud on Sunday.

On Monday, Alibaba, the proprietor of the South China Morning Post, saw a 5.5 per cent increase in its stock value in Hong Kong.

The increased merging of Alibaba's cloud service with DeepSeek models is happening as Chinese companies and consumers are quickly embracing the start-up's open-source offerings.

Alibaba provides additional DeepSeek AI models at affordable rates, dismisses investment gossip. Alibaba is granting customers the opportunity to use six new DeepSeek models, simultaneously dismissing rumors of possible investment in the rapidly growing start-up.

Alibaba's unit for cloud computing and artificial intelligence is introducing six new DeepSeek models via its extensive language model service platform called Bailian, as revealed in a WeChat message by Alibaba Cloud on Sunday.

On Monday, the stock value of Alibaba, the proprietor of the South China Morning Post, experienced a 5.5 per cent increase in Hong Kong.

The tighter merger between Alibaba's cloud service and DeepSeek models is happening as Chinese companies and customers are quickly embracing the start-up's open-source offerings.