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KraneShares Asian equities were lower, except for Vietnam, as the US dollar strengthened slightly overnight. Higher for longer and the possibility of no further US interest cuts in 2025 weighed on regional growth stocks, which was also worsened by US technology sector valuation fears. Hong Kong and Mainland China had another "revenge of the nerds" moment, as value stocks outperformed on light volumes and markets faded from morning gains in afternoon trading. Both Hong Kong and Mainland China indexes are working off overbought levels with the reative strength index (RSI) at +70 since late September. Lower expectations going into Q3 financial results is not such a bad thing, though. The significant Hong Kong IPO pipeline was a factor for growth stocks, as investors are selling current holdings to fund future holdings. Tencent gained +0.12% and Baidu gained +2.87%, both benefiting from anticipated AI announcements next week. This bucked the growth swoon as non-ferrous metals, healthcare, pharmaceuticals, autos, and technology hardware stocks were all lower. Banks, telecommunication, and energy stocks held in there. Alibaba fell -2.57% as its restaurant and home delivery unit Ele.me was rebranded as Taobao Flash Purchase, allowing for the fast delivery of food and daily essentials. The renewed effort likely weighed on instant commerce competitors JD.com, which fell -2.99%, and Meituan, which fell -2.35%. Trip.com fell -0.81% fell despite China extending its visa-free travel policy and allowing group trips to Canada. Is the Vancouver real estate spike coming? Mainland investors bought the Hong Kong dip with $1.26 billion worth of net buying via Southbound Stock Connect. MORE FOR YOU Remarkably, there was a similar situation in Mainland China as value stocks, such as banks, insurance companies, and telecommunications firms performed decently, while semiconductors, software, clean technology, and technology hardware were all down. Foxconn fell -1.87%, Luxshare fell -3.87%, and Sungrow fell -6.16%. The Financial Times published an article titled “China offers tech giants cheap power to boost domestic AI chips” based on “people familiar with the matter”, which garnered some attention outside of the region. The article states that, due to the Chinese government’s Nvidia H20 chip ban, Chinese provincial governments are giving data centers discount electricity rates to compensate for less efficient local chips. A few weeks ago, China's government stated they had not banned Nvidia’s H20, but buyers stopped buying them as they were more expensive versus domestic equivalents. The article is out there and maybe it is true, but maybe not. Markets certainly did not buy the story. Tesla’s October China sales fell -9.9% year-over-year (YoY) to 61,497. Starbucks sold 60% of its China business to local private equity firm Boyu Capital, at a $4 billion valuation, according to Bloomberg. Yum China reported Q3 financial results that were in line with analyst expectations, as revenue rose +4% YoY to $3.2 billion, as the company now operates 17,514 stores, which is up +10% YoY and +96% since 2019. Reader Kevin asked me yesterday for a review of what President Trump and President Xi had accomplished in South Korea, based on a mediocre assessment from Western media. Trump has a strong desire to communicate directly to the US public, versus using the media, who he doesn’t particularly like. His 60 Minutes interview is a great example of this, as the hostility between him and the interviewer was palatable. In the interview, he spoke positively about the China trade deal, though you didn’t read about that, did you? Did you read about this post on his Truth Social account yesterday on a potential China energy purchase? “In fact, a very large scale transaction may take place concerning the purchase of Oil and Gas from the Great State of Alaska. Chris Wright, Doug Burgum, and our respective Energy teams will be meeting to see if such an Energy Deal can be worked out." I assume not. The below bullet points come from the White House website (https://www.whitehouse.gov/fact-sheets/2025/11/fact-sheet-president-donald-j-trump-strikes-deal-on-economic-and-trade-relations-with-china). CHINESE ACTIONS: China will suspend the global implementation of the expansive new export controls on rare earths and related measures that it announced on October 9, 2025. China will issue general licenses valid for exports of rare earths, gallium, germanium, antimony, and graphite for the benefit of U.S. end users and their suppliers around the world. The general license means the de facto removal of controls China imposed in April 2025 and October 2022. China will take significant measures to end the flow of fentanyl to the United States. Specifically, China will stop the shipment of certain designated chemicals to North America and strictly control exports of certain other chemicals to all destinations in the world. China will suspend all of the retaliatory tariffs that it has announced since March 4, 2025. This includes tariffs on a vast swath of U.S. agricultural products: chicken, wheat, corn, cotton, sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables, and dairy products. China will suspend or remove all of the retaliatory non-tariff countermeasures taken against the United States since March 4, 2025, including China’s listing of certain American companies on its end user and unreliable entity lists. China will purchase at least 12 million metric tons (MMT) of U.S. soybeans during the last two months of 2025 and also purchase at least 25 MMT of U.S. soybeans in each of 2026, 2027, and 2028. Additionally, China will resume purchases of U.S. sorghum and hardwood logs. China will take appropriate measures to ensure the resumption of trade from Nexperia’s facilities in China, allowing production of critical legacy chips to flow to the rest of the world. China will remove measures it took in retaliation for the U.S.’s announcement of a Section 301 investigation on China’s Targeting the Maritime, Logistics, and Shipbuilding Sectors for Dominance, and remove sanctions imposed on various shipping entities. China will further extend the expiration of its market-based tariff exclusion process for imports from the United States and exclusions will remain valid until December 31, 2026. China will terminate its various investigations targeting U.S. companies in the semiconductor supply chain, including its antitrust, anti-monopoly, and anti-dumping investigations. AMERICAN ACTIONS: The United States will lower the tariffs on Chinese imports imposed to curb fentanyl flows by removing 10 percentage points of the cumulative rate, effective November 10, 2025, and will maintain its suspension of heightened reciprocal tariffs on Chinese imports until November 10, 2026. (The current 10% reciprocal tariff will remain in effect during this suspension period.) The United States will further extend the expiration of certain Section 301 tariff exclusions, currently due to expire on November 29, 2025, until November 10, 2026. The United States will suspend for one year, starting on November 10, 2025, the implementation of the interim final rule titled Expansion of End-User Controls to Cover Affiliates of Certain Listed Entities. The United States will suspend for one year, starting on November 10, 2025, implementation of the responsive actions taken pursuant to the Section 301 investigation on China’s Targeting the Maritime, Logistics, and Shipbuilding Sectors for Dominance. In the meantime, the United States will negotiate with China pursuant to Section 301 while continuing its historic cooperation with the Republic of Korea and Japan on revitalizing American shipbuilding. Live Webinar Join us Wednesday, November 12th at 10 am EST for: China Q3 Update: Tech Leads Bull Market, Trade Deal Updates, & New Goals Set In 15th Five-Year Plan Please click here to register New Content Read our latest article: Labubu & Gen Z Spending: What China’s Designer Toy Craze Tells Us About the New Consumption Wave Please click here to read Last Night’s Performance KraneShares KraneShares KraneShares KraneShares KraneShares KraneShares Last Night’s Exchange Rates, Prices, & Yields CNY per USD 7.12 versus 7.12 yesterday CNY per EUR 8.19 versus 8.20 yesterday Yield on 10-Year Government Bond 1.80% versus 1.79% yesterday Yield on 10-Year China Development Bank Bond 1.87% versus 1.87% yesterday Copper Price -0.75% Steel Price -0.87% Editorial StandardsReprints & Permissions
