Here's what happened in China's markets last trade day (11/14):

The China Securities Regulatory Commission (CSRC), China’s version of the SEC, is requesting Alibaba’s Cainiao Smart Logistics Network Limited to submit supplementary filing information ahead of its proposed Hong Kong IPO. The supplementary filing has to do with shareholder structure, share incentives, control structure, standardized operation, independence, and spin-off arrangement. Cainiao submitted its Hong Kong IPO application last September 26, which the CSRC received on October 10. This doesn’t mean that the CSRC is preventing the IPO from pushing through. Given that this will be the first Alibaba spin-off since the company exited a nearly 3-year restructuring, regulators are likely just being extra careful not to overlook any potential issues.

Chinese Minister of Commerce Wang Went and US Secretary of Commerce Gina Raimondo are expected to have a face-to-face meeting, the third time in the last 6 months, to discuss bilateral trade relations. Raimondo acknowledged the need to cool tensions between the world’s two largest economies. This news comes shortly after speculation that China might lift a five-year-long ban on US aircraft purchases that saw Boeing’s market share in China erode to the benefit of its European competitor, Airbus. It also comes after news that China has significantly increased orders of soybeans from the US, possibly extending an olive branch to the US that it is willing to negotiate and restore better trade relations. However, expectations must be kept low given the tensions that persist on the technology front.

China’s leading consumer technology company, Huawei, is operating at full capacity for the production of its high-end Mate 60 5G smartphone, which it launched several months ago and was received very well by the domestic market. The demand is so strong that customers will have to wait up to 3 months to get their orders. Huawei launched a pre-order service for its Mate 60 series of smartphones in order to better anticipate the demand locally. The company’s 5G product ranked third among smartphone vendors during the first week of the recently-concluded Singles’ Day nationwide shopping event. One of the bottlenecks in Huawei’s booming smartphone business is the reliable supply of chips from domestic semiconductor champion SMIC, which surprised the market with its 7-nanometer-grade Kirin 9000s chip found in the Mate 60 lineup.

China’s central bank will make available more than RMB 1 trillion ($137 billion) in low-interest financing for the country’s urban village renovation and subsidized housing projects. The funds are expected to be made available in phases through major state-owned banks and prioritized for families looking to buy their own homes. No details yet as to how low of an interest rate will be given to qualified borrowers but this new measure should provide a boost to demand, as this is a more direct way of boosting home demand than simply increasing liquidity in the system. However, don’t expect troubled developers to benefit from these measures. Low-interest home loans will likely be extended to customers of large, state-owned property companies and private enterprises that avoid binging on debt.

In the 3rd quarter of 2023, China’s imports of critical semiconductor production equipment grew 93% to RMB 63.4 billion ($8.7 billion). Top of the list of in-demand items were core lithography process machines, which saw imports soar 4-fold, with the value of such equipment imported from the Netherlands - the world’s leading producer of lithography machines - up more than 6-fold. Netherlands-based ASML, the world’s leading lithography equipment manufacturer, made nearly half of its sales last quarter from China alone, more than tripling the region’s share of sales compared to a year ago. That allowed the Netherlands to double its share of China’s chip manufacturing equipment market, while the US saw its share drop by half from 17% to 9% over the past two years.