China Market Weekly Update

The week's investment landscape showcases AI technology leadership, with China's AI enterprises now accounting for about 50% of global AI application traffic. This dominance signifies AI's critical role as the primary driver of Chinese companies' international expansion strategies. Embodied intelligence and robotics technologies saw significant breakthroughs, evidenced by Zhiyuan Robotics releasing the OmniHand 2025 dexterous hand, and Vita Power launching China's first smart companion robot while securing ¥300 million in angel funding.

The new energy vehicle sector continues its momentum with GAC Group's ¥600 million investment in Huawang Automobile to develop an independent high-end brand. In the semiconductor domain, Yongzhi Semiconductor's funding from Yida Capital accelerates the localization of electronic component packaging and testing equipment, which is crucial for enhancing China's self-reliance in the semiconductor industry chain.

Notably, the Shanghai Future Industry Fund has broken registration location restrictions by investing in 6 sub-funds with a total scale of ¥10 billion. This fund focuses on cutting-edge fields such as brain science, synthetic biology, and hard technology, demonstrating the strategic government support for scientific and technological innovation. Additionally, the joint release of the "Implementation Plan for Personal Consumer Loan Financial Interest Subsidy Policy" by multiple ministries aims to stimulate domestic consumption potential and inject new momentum into economic development.

July's economic data reveals a nuanced picture of China's economy. While overall growth indicators show some moderation, structural improvements continue, particularly in high-value sectors. The high-tech manufacturing growth of 9.3% significantly outpaces the overall industrial value-added growth of 5.7%, indicating successful economic restructuring toward higher-value activities. Similarly, the information transmission and software service sector's 11.9% growth demonstrates the digital economy's strength.

Consumer market data shows evolving consumption patterns, with particular strength in household appliances (28.7% growth) and furniture (20.6% growth). This suggests that despite overall retail sales growing at a more modest 3.7%, certain segments are experiencing robust recovery, likely supported by the trade-in subsidies and other consumption stimulus policies. The manufacturing investment growth of 6.2%, compared to overall fixed asset investment growth of 1.6%, indicates continued industrial upgrading.

The steady urban unemployment rate of 5.2% and stable consumer prices (with core CPI at 0.8%) provide a foundation for further policy measures. The government's comprehensive approach, combining consumption stimulus, industrial policy, and opening measures like the new K-visa, demonstrates awareness of both short-term challenges and long-term strategic objectives in maintaining economic momentum while advancing structural reform goals.

China's AI sector displayed remarkable momentum this week, with multimodal AI models leading the charge. Kunlun Wanwei's release of six multimodal AI models in a single week—spanning video generation, world models, agents, and AI music creation—underscores the rapid advancement and diversification of Chinese AI capabilities. The National Data Bureau's disclosure that China's daily token consumption has surged from 100 billion to over 30 trillion represents a 300-fold increase, reflecting the explosive growth in AI adoption and application development.

The robotics and embodied intelligence fields achieved significant milestones, as evidenced by the record-breaking performances at the World Humanoid Robot Games. These achievements demonstrate that Chinese robotics companies are rapidly closing the gap with international competitors in complex mobility and environmental adaptation capabilities. Pan Jianwei's team setting a new world record for defect-free atomic arrays with 2,024 atoms marks a significant advancement in quantum computing hardware, showcasing China's growing strength in fundamental quantum technologies.

In sustainable energy, China continues to lead globally with renewable energy now accounting for 59.2% of total installed capacity. The first-of-its-kind offshore substation equipped with meteorological radar represents an innovative approach to improving the efficiency and reliability of offshore wind power generation. These developments, alongside progress in electric vehicles, space technology, and next-generation computing, reflect China's comprehensive push toward technological self-reliance and leadership across multiple strategic domains.