Here's what happened in China's markets last trade day (10/30):
1. Hong Kong to Launch Saudi Arabia-Focused ETF, Offering Access to World's Third Largest Company
The proposed ETF will become an indirect way to invest in Saudi Aramco, the world’s largest and most valuable oil company with a market capitalization of $2.1 trillion. That makes it the world’s 3rd largest company next to Apple and $Microsoft(MSFT.US$. A launch of the ETF will certainly attract significant flows of investment into Hong Kong as global investors look to gain access to the Saudi Arabian oil behemoth.
2. Xiaomi Takes Control of Ecosystem Security with New Operating System Launch
Xiaomi launches HyperOS to protect against potential US technology restrictions. New OS works across smartphones, IoT products, and EVs, reducing reliance on Google Android. With production of high-end microchips in China catching the attention of the US Commerce Department, companies that use these chips may be caught up in broadening sanctions meant to curtail China’s advancement in chip manufacturing and design.
3. Huawei is expecting to totally remove the use of the Android OS in its devices
The company developed HarmonyOS, its own mobile device operating system in 2019 after the US barred Huawei from accessing American technology, including software. This meant that Huawei’s smartphones and other devices would be unable to access updates from Google’s Android OS. And it dislodged Huawei from the top ranks of the world’s mobile phone manufacturers to the benefit of companies like Apple, Samsung, and even Xiaomi to a lesser extent. Huawei’s upcoming operating system called HarmonyOS Next will be fully independent of Android with strong support from over 2.2 million third-party developers. If both Xiaomi and Huawei, now rising from the ashes after its Mate 60 Pro launch, remove Android, it will mean potentially a loss of about 20% to 30% of the global smartphone market for Google. Even more if other Chinese manufacturers switch to either of the two homegrown OS.
4. China's Leadership Charts Course for Future Financial Markets in Key Conference
Financial Work Conference seeks to address current and long-term challenges for Chinese economy. Market looks for clues on how Beijing will support real estate and stocks following recent declines, particularly the stock market given its recent steep declines.
5. China and the US agreed to increase the frequency of Chinese airlines servicing US routes.
Chinese carriers will be able to increase their round-trip flights from 24 flights per week to 35 effective November 9th. Including US carriers, the number of flights servicing US-China routes will be 48, but can rise to 70 if US carriers are able to reciprocate the increase in flights of Chinese carriers. Demand for outbound travel in China is strong but has been limited to neighboring regions due to a combination of low number of available flights and concerns among Chinese tourists about worsening US-China relations. However, recent diplomatic engagements between the two countries and a potential Biden-Xi meeting during the APEC Summit in San Francisco next month may reinvigorate travel between the two countries.
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