Shares in Hong Kong decline from a four-month peak due to increasing worries about trade conflicts. Market participants believe that Trump's tariff strategies may trigger inflation, potentially compelling the Federal Reserve to maintain elevated interest rates for an extended period.

The Hang Seng Index experienced a decline of 1.1 per cent, closing at 21,294.86, marking the sharpest drop in close to three weeks. Meanwhile, the Hang Seng Tech Index saw a decrease of 2.7 per cent. This downturn followed a period of growth driven by the rise of AI startup, DeepSeek. However, this growth halted after the market shifted into a bullish trend last week, following a 20 per cent increase from a low in January.

In the mainland, there was a 0.5 per cent decrease in the CSI 300 Index and a 0.1 per cent decline in the Shanghai Composite Index.

Automobile manufacturers, Geely Automobile Holdings and Li Auto experienced a minimum of 5% drop after the US President, Donald Trump, mentioned the possibility of his administration considering tariffs on car imports. Leading the descent among significant mainland Chinese tech firms trading in the city were Tencent Holdings and Alibaba Group Holding. Meanwhile, Zijin Mining Group, a gold producer, defied the trend as the value of the precious metal hit a record high, causing investors to shift towards safer assets.

The potential consequences of these tariffs could significantly affect the worldwide economy. Experts suggest that these duties could solidify inflation within the US, and postpone reductions in interest rates by the US Federal Reserve.

OpenAI is on track to complete its initial proprietary chip design this year, reducing its dependency on Nvidia. The chip will be produced by TSMC utilizing the manufacturer's sophisticated 3-nanometer process technology.

Both OpenAI and TSMC chose not to provide any comments

The recent news indicates that OpenAI is progressing steadily towards its bold aim of large-scale production at TSMC by 2026. Usually, a tape-out process comes with a hefty price tag of tens of millions of dollars and requires about half a year to yield a complete chip, unless OpenAI decides to pay a significant premium for fast-tracked production.

There's no assurance that the silicon will operate correctly during the initial tape out. If it fails, the company will have to identify the issue and redo the tape-out phase.

Within OpenAI, the chip designed for training was seen as a tactical instrument to bolster OpenAI’s bargaining power with other chip manufacturers, according to the sources. Following the first chip, OpenAI’s engineers aim to create progressively sophisticated processors with expanded features with each subsequent version.

Jack Ma pays a visit to used goods platform Xianyu while Alibaba's AI continues to turn heads. Alibaba has been leveraging the digital swap meet as a proving ground for its swiftly advancing AI capabilities.

Images and short videos disseminated by Xianyu workers depicted Ma, aged 60, donning a vest bearing the Alibaba insignia and grinning widely. The corporation's youthful employees were observed eagerly trying to get a selfie with the retired business magnate, who continues to be highly respected as the symbolic head of the corporate giant he established in 1999 and as a prominent figure in China's private sector.

China Vanke has obtained a financial rescue of US$383 million from Shenzhen Metro Group to clear its debt. The company is transferring an 18% ownership stake in its property management division, Onewo, as security.

Mainland developer China Vanke, which is in debt, has received a financial assurance from its principal state-supported shareholder to repay its liabilities. This action implies continued government backing after a recent reorganization of management.

Shenzhen Metro Group, owning a 27.2% share, has entered into a three-year contract with Vanke to offer secured loans amounting to as much as 2.8 billion yuan (US$383 million). This was reported in a document submitted to the Hong Kong stock exchange late on Monday.

Vanke is set to offer assets worth approximately 4 billion yuan as security to Shenzhen Metro Group through a transfer of an 18% share in its property management subsidiary, Onewo.

The credit facility, which carries a variable interest rate of 76 basis points less than the one-year prime loan rate, or 2.34% as of Monday, will be utilized to clear and resolve Vanke's existing debts, as stated in the filing. The loans are expected to be paid back every quarter.

The plan "completely embodies the backing of Shenzhen Metro Group for the firm", stated Vanke, further noting that it "would serve as the optimal method to gather resources for the group".

Analysts believe that BYD's complimentary provision of autonomous technology will stimulate electric vehicle purchases and the uptake of intelligent driving. BYD's founder and chairman, Wang Chuanfu, asserts that this step ushers in a revolutionary period where every customer can utilize smart driving.

Jefferies' analyst, Johnson Wan, reported on Tuesday that BYD has made significant progress from scratch in autonomous driving technology. This advancement is expected to speed up the feature's acceptance in the mainstream market and prompt a surge of updates among current users.

Shenzhen's BYD held an unveiling ceremony for its autonomous driving system known as "God's Eye" on Monday. They announced that the system will be incorporated into at least 21 of its electric vehicle models, without any price alterations.

During the occasion, the founder and Chairman of BYD, Wang Chuanfu, stated that this initiative signifies "a novel period where all users can utilize intelligent driving".

Wan expressed that the launch of God's Eye will help BYD preserve its prominent presence in the Chinese automobile industry. As of 2024, the company held a significant 15% of the passenger vehicle market and a dominant 34% of the country's electric vehicle market, as per the data provided by the China Passenger Car Association.

Wealthy investor David Tepper increases his China investments to make up 37% of his company's portfolio. The hedge fund manager fulfills his vow to purchase 'everything' related to China, raising his stakes in Alibaba, JD.com, ETFs.

Wealthy financier David Tepper amplified his stakes in several China-associated shares and ETFs in the previous quarter, even amid doubts concerning tariffs and China’s sluggish economic progression.

The head and originator of Appaloosa Management, who asserted in September that he would purchase "everything" connected to China, amplified his company's stake in businesses such as JD.com, Alibaba Group Holding, and PDD Holdings during the final quarter of 2024.

Tepper's purchasing rampage in China raised Appaloosa's stakes in JD.com by 43%, Alibaba by 18%, Baidu by 7%, KE Holdings by 18%, and PDD by 1%, as per the report filed on Monday. The holdings in two ETFs – KranShares CSI China Internet and iShares China Large-Cap – saw an increase by 21.5% and 14%, respectively.

Approximately 37 per cent of Tepper's portfolio was made up of stocks and ETFs associated with China by the end of December.

Chinese shares experienced a surge beginning in late September, following the announcement by Beijing of numerous initiatives to bolster the economy. This led to Tepper's pledge to invest in "everything" associated with China, even though the American did diminish his stakes in Alibaba and the iShares China Large-Cap ETF during the third quarter.

The surge in the market slowed down during the last quarter due to investor dissatisfaction with Beijing's execution of economic stimulus, but it regained speed the previous month. In more current news, the sudden popularity of the artificial intelligence (AI) startup DeepSeek resulted in a surge in Chinese tech stocks, driving the Hang Seng Index to achieve its most successful weekly outcome in the past four months last week.

Commentary | Trump's recent trade attack is more about control than finance

Trade taxes can be a two-sided weapon, but the government has chosen to leverage economic strain to accomplish wider tactical goals.

The conduct of Trump has sparked curiosity both domestically and globally about the precise nature of tariffs and their impact on international commerce. Essentially, tariffs are import taxes. For instance, if a Chinese shoe manufacturer aims to market its products in the US, that firm could be subject to a tariff imposed by the American authorities. If a US retailer purchases a pair for US$100, a 10 per cent tariff, similar to the one Trump recently instituted on Chinese goods, necessitates that the retailer remit an additional US$10 to the US government.

The price of those $100 shoes has now risen to $110. But who's footing the bill for the additional $10? During his initial term, when Trump increased tariffs on goods imported from China, the brunt of the expense fell on American importers, especially if they were unable to locate other sources. As a result, retail prices stayed fairly steady, at least for the first year.

The head of a Hong Kong restaurant franchise is planning to sell a building in Sha Tin due to escalating retail troubles. Fulum Group's chairman, Yeung Wai, has put up for sale the Big Orange, a property purchased in 2013 for US$64 million, through a tender process.

The proprietor of Big Orange, a nine-floor structure in Tai Wai, has designated real estate consulting firm CBRE to oversee a public auction for the property in April, as of Monday.

The building, which stands out with its unique orange exterior and spans 236,148 square feet, was purchased by Hansun Investments in 2013 for a sum of HK$498 million (equivalent to US$64 million), as per governmental documentation. Yeung Wai, the head of Fulum Group, is officially registered as a director of Hansun.

Reeves Yan, the executive director and chief of capital markets at CBRE Hong Kong, highlighted that Big Orange is linked to multiple key highways. He added that whether traveling to Hong Kong Island or to any significant regions in Kowloon, the location is just a 20-minute drive away, thus making it a highly strategic central location.

Three thirty-nine

Store occupancy rebounds in Hong Kong, yet empty shops remain noticeable throughout the city.

YouTube, the biggest internet video platform globally, celebrates its 20th anniversary on Valentine's Day. Every single minute, over 500 hours of video content are uploaded on this platform.

On April 23, the feature to upload videos was introduced, with Karim sharing the inaugural video called "Me at the Zoo". This brief 19-second footage, which captures Karim at the elephant display of the San Diego Zoo, has attracted 348 million views.

In the following two decades, the platform has grown beyond the expectations set in 2005.

"Currently, it stands as the world's biggest digital video platform in both user engagement and advertising revenue – it's a complete giant."

Hong Kong's NWD increases costs for State Pavilia apartment sale due to 'excited' demand

Debt-laden builder hikes up costs for the third round of apartments in the State Pavilia scheme in North Point, set to hit the market on Saturday.

The developer expressed that the reaction towards the 388-unit State Pavilia project located on King's Road in North Point has been overwhelmingly positive, with over 4,800 potential buyers having shown their interest through monetary commitment for a chance to purchase one of the 168 units available, as per the status on Tuesday evening.

The latest price list, introduced on Tuesday, reveals that the 39 properties are valued from HK$6.35 million (US$815,000) to HK$20.39 million, post-discount, or HK$16,888 to HK$28,088 per square foot. This list includes 15 one-bedroom properties, 23 two-bedroom residences, and one three-bedroom unit, with sizes ranging from 321 square feet to 726 square feet.

Alibaba's Qwen fuels the leading 10 open-source models, demonstrating that China's AI expertise extends past DeepSeek. The highly-rated extensive language models in Hugging Face's recent evaluations confirm that they were all developed using Qwen's open-source offerings.

Twenty past one

Alibaba from China has launched a new AI model, which reportedly surpasses rival technologies, Deepseek and OpenAI's GPT-4o.

CATL, the world's leading EV battery manufacturer, has submitted a proposal to list its shares in Hong Kong, potentially marking the city's most substantial Initial Public Offering (IPO) since 2021. The speculated deal, worth an estimated US$5 billion, would surpass the previous record set by Kuaishou's IPO in January 2021.

The draft indicates that BofA Securities, China International Capital Corporation (CICC), China Securities International, and JPMorgan Chase have been named as co-sponsors. Furthermore, Goldman Sachs, Morgan Stanley, and UBS are also involved in the agreement, though their specific roles have not been detailed.

Shares of CATL, which are priced in yuan, dropped by 2.6 per cent, landing at 251.80 yuan (equivalent to US$34.50) in Shenzhen prior to the company's announcement. This resulted in a market valuation of 1.1 trillion yuan (around US$150.5 billion). So far this year, they have seen a decrease of approximately 5 per cent, following a significant increase of 68 per cent in 2024.

"CATL is aspiring to broaden its global presence as it seeks greater profitability beyond mainland China," stated Davis Zhang, a top executive at Suzhou Hazardtex, a company that provides specialised batteries.

"Chinese electric vehicle companies, with their superior production capabilities and technological edge over international competitors, are frequently invited into foreign markets to adapt and apply their research and manufacturing skills."

Twelve fifty-three

'Surpassing in a curve': the way China's electric vehicle sector surged forward to command the worldwide market