China: weekly briefing
21 Oct – 28 Oct 2026
Top stories
- China's AI stock rout wipes about $480 billion as STAR 50 falls 40% (Reuters (via Euronext Markets), 26 Oct) — Reuters reported that China's STAR 50 index of AI and chip leaders fell about 40% in under four months, erasing roughly $480 billion. Global Times argued the slump is not a sign that a bubble is bursting.
- US Treasury proposes wider curbs on investment in Chinese tech and biotech (The Hill, 24 Oct) — The US Treasury has proposed a rule to restrict investments in high-technology sectors in China and other adversaries. Beijing has urged Washington to drop the proposal, according to The Hill.
- EU plans high-level talks with China over yuan revaluation (South China Morning Post, 28 Oct) — According to sources cited by the South China Morning Post, senior EU officials will visit Beijing in coming months to press for a yuan revaluation. A visit by the ECB, Eurogroup and Commission is also being planned around the turn of the year.
- Kim Jong Un crosses new bridge into China on first visit in over a year (CNN, 25 Oct) — CNN reported that North Korean leader Kim Jong Un crossed a newly opened bridge into China on Saturday, his first reported visit there in over a year. Analysts say the trip points to deepening ties between the two neighbours.
- Magnitude 7.0 Tibet earthquake kills at least 16 and injures 32 (South China Morning Post, 22 Oct) — Xinhua, citing local authorities, said at least 16 people were killed and 32 injured in the quake. More than 300 houses collapsed, and officials were still assessing damage as relief work continued.
Trends
This week's stories show financial and trade pressure on China's economy and its relations with the West. Beijing's AI-linked equity slump and a steep slide in domestic car sales point to weak domestic demand, which is pushing manufacturers to export. That export push is drawing responses from Europe, where officials are weighing tougher import curbs and seeking yuan revaluation talks. Washington's proposed curbs on investment in Chinese tech and biotech continue last week's tech decoupling, now extended to capital flows. The Kim Jong Un visit and the Tibet earthquake stand apart from this economic narrative. Compared with last week, trade and tech friction has intensified, while the Philippines dispute has faded from view.
What it means (opinion)
Opinion: The common thread is strain. A sharp equity sell-off, collapsing car demand and falling industrial profits suggest China's export-led model is carrying more weight than its domestic economy can bear. That makes foreign markets more important to Beijing, and also gives Western governments more leverage to press for trade and currency concessions. Next week, watch whether Washington moves forward with the outbound investment rule and how Beijing responds. Also watch for any Chinese measures to support share prices or domestic car purchases, and whether the EU's currency and import proposals gain formal backing. Each of these could signal whether trade friction is settling or escalating.
AI-assisted summary of public reporting; the analysis is opinion. Sources are linked above.