China & Hong Kong Equities

China's customs data, reported by the South China Morning Post on 14 October, showed September exports up 36.3% on the year to $447.18 billion against a 25.7% forecast, and imports up 31% to $313.65 billion. The monthly surplus reached $133.53 billion, the year's high. Customs officials credited chips and electronic components amid global AI and power-grid demand; exports to the U.S. rose 39.56% and to ASEAN 52.26%.

Why it matters here: The beat feeds straight into revenue for the mainland manufacturers and electronics exporters that make up much of the A-share and large-cap indexes, and it raises the odds of a firm third-quarter GDP print on Monday, supporting the broad offshore benchmarks.

Counterpoint: Part of the surge reflects shipments pulled forward ahead of the October holiday, and a record surplus invites trade retaliation, with France and Germany already calling for an EU trade kill-switch, so the export tailwind may fade or provoke a policy response.

China's National Bureau of Statistics reported on 14 October that producer prices rose 5% on the year in September, up from 3.8% in August, and 1.2% on the month. Consumer prices rose 0.9% from 0.8% and core CPI held at 1%. Industrial input prices rose 6.9% and production-material prices 6.5%, while consumer-goods prices fell 0.1%, CGTN reported.

Why it matters here: After years of factory-gate deflation, positive producer-price growth lifts nominal revenue and profit for the upstream materials, energy and industrial firms that weigh heavily in mainland A-shares and the large-cap index.

Counterpoint: The rise is driven by imported energy and input costs rather than stronger demand: with consumer-goods prices falling 0.1%, downstream manufacturers and consumer companies are absorbing a margin squeeze rather than enjoying pricing power.

President Trump signed an executive order late on 16 October waiving two core provisions of the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026: duties of up to 500% on Russian goods and tariffs of up to 100% on top buyers of Russian crude and gas, including China and India, CNBC reported. Existing Russia sanctions remain. Secretary of State Rubio said on 17 October the 60-day pause lets the administration assess the impact on the global economy.

Why it matters here: China is among the largest buyers of Russian oil, so the waiver removes a threatened tariff of up to 100% on Chinese exports to the U.S., protecting large-cap exporters and the U.S.-China trade truce while keeping discounted Russian energy flowing to Chinese industry.

Counterpoint: Rubio framed the waiver as a 60-day review, so the threat could return in December, and the existing U.S.-China truce already shielded most trade, which limits how much the waiver changes for Chinese earnings.

A selloff in AI-linked shares that began on Wall Street on 14 October spread worldwide: AP reported South Korea's Kospi fell 7.6% and Japan's Nikkei 225 4.9% on 15 October. U.S. chip shares fell again on 16 October, with the Philadelphia semiconductor index down 3.83% for an eighth straight decline and CoreWeave down 11.9%. The Hang Seng Index closed at 24,186 on 16 October.

Why it matters here: Hong Kong-listed technology and China internet shares are traded by global investors as high-beta AI exposure, so de-risking in AI names reaches them through foreign-investor flows even without a domestic catalyst.

Counterpoint: Chinese competition, including CXMT's memory advances, is part of what unsettled U.S. and Korean chip investors, and Hong Kong rose on Friday, so Chinese technology could prove a relative beneficiary of the rotation rather than a casualty.