Mainland investors set to beat HK stock buying record...Baidu latest to join open-source movement...China home sales slump persists

Mainland investors set to beat HK stock buying record

Investors on the mainland showed a strong appetite for Hong Kong stocks in the first half of 2025 via the southbound channel of the Stock Connect programme, putting purchases on track to reach a record that was set last year, reports the South China Morning Post. Mainland buying of Hong Kong stocks reached HK$731.2 billion ($93 billion) in the first half of the year, according to data from the Hong Kong bourse and Bloomberg on Monday. Last year, southbound net purchases reached HK$808 billion, a record since the programme started in 2014.

The buying spree has been underpinned by a re-rating of China’s technology sector and attractive valuations. Hong Kong’s equity market is dominated by large mainland tech firms that are not listed onshore and as a result, stocks in the city have benefited from a re-evaluation of China’s tech sector spurred by an artificial intelligence breakthrough earlier this year. In addition, Hong Kong stocks are cheaper than their mainland counterparts, trading at 11.2 times earnings—the second cheapest among the world’s major equity markets.

“Mainland inflows have been accelerating because of the valuation advantage, the listing scarcity and arbitrage demand,” said Wu Xinkun, an analyst at Guotai Junan Securities in Shanghai. “Hong Kong’s market now more reflects mainland [investors’] behaviours and risk preferences.”

Baidu latest to join open-source movement

Chinese tech giant Baidu on Monday marked its entry into the highly competitive field of Chinese open-source artificial intelligence (AI) systems, by making its flagship Ernie 4.5 models available for download on AI site Hugging Face, reports the South China Morning Post. Baidu open-sourced 10 variants from its Ernie 4.5 multimodal model family, from the 0.3 billion parameter lightweight models to the heavyweight 424 billion parameter ones, according to a statement.

Beijing-based Baidu, one of the earliest tech firms in China to develop large language models (LLMs) following the release of ChatGPT in November 2022, has made a U-turn by making its models open-source. A year ago, founder and CEO Robin Li Yanhong was publicly saying its Ernie series, like OpenAI’s ChatGPT models, would be more powerful than open-source ones.

However, the release of open-source models by Chinese start-up DeepSeek, which took the AI world by storm at the start of this year, triggered an accelerated shift to open-source by China’s Big Tech firms. For example, the Qwen models developed by Alibaba Group Holding are the world’s most popular open-source models among developers.

China home sales slump persists

China’s home sales extended their slump in June, putting further strain on the economy and underscoring the impetus for fresh support measures, reports Bloomberg. The value of new-home sales from the 100 largest property companies stood at RMB 339 billion ($47.3 billion), the latest preliminary data from China Real Estate Information Corp. on Monday showed. That represents a 23% fall from a year ago, according to Bloomberg calculations. June’s sales follows an 8.6% decline in May. On a monthly basis, however, the latest sales were up 14.7% from May, CRIC said.

China’s housing downturn has dragged on for four years, as the effects of a stimulus blitz last September wear off. Premier Li Qiang this month pledged more action to revive the market, which analysts say is necessary to boost consumption and offset the threat to exports from US tariffs.

“More support will be needed, but we don’t expect a big shift in approach” to housing, Duncan Wrigley, chief China economist with Pantheon Macroeconomics, wrote in a report last week. “China is resigned to a slow recovery.”

China lifts Japanese seafood import ban

China has lifted a 2023 ban on imports of seafood from most parts of Japan, removing an irritant in relations with its neighbor by starting to implement a deal reached last September, reports Bloomberg. Beijing will allow the import of seafood products from most of Japan to resume, according to a statement from the General Administration of Customs on Sunday. Products from 10 prefectures including Fukushima will remain barred, according to the statement, as they have been since the meltdown of the Fukushima nuclear power plant in 2011.

That ban was extended to the rest of Japan in August 2023 after Tokyo announced it would start releasing wastewater from the wrecked power plant. Although the release had been approved by the International Atomic Energy Agency, China argued the release would contaminate the seas with radioactivity and render seafood caught off Japan unsafe for human consumption.

The IAEA has continued to test water around the plant, with the most recent report released reiterating that “the discharges as planned would have a negligible radiological impact to people and the environment.”

Zijin strikes $1.2bn gold mine deal in Kazakhstan

Zijin Mining Group, China’s largest gold producer, has struck a $1.2 billion deal to acquire a massive gold mine in Kazakhstan in a major push to expand its overseas footprint while consolidating resources closer to home, reports Caixin. The deal for the Raygorodok gold mine, known as RG Gold, is Zijin’s first entry into Kazakhstan and its eighth major gold acquisition since 2020. It is part of the company’s broader strategy—outlined in 2023—to center its growth on China and its neighboring countries amid increasingly complex global market conditions.

Zijin plans to integrate the Kazakh mine into a larger “Central Asia Gold Triangle,” linking it with existing assets in Kyrgyzstan and Tajikistan. The plan is to foster regional synergies in production, exploration and logistics—including coordination with its projects in Xinjiang, western China.

Under the agreement, announced Sunday, a Singapore-based subsidiary of Zijin will acquire 100% of RG Gold from Cantech S.à r.l., a company controlled by Kazakh private-equity firm Verny Capital and U.S.-based Resource Capital Funds.

Halfway house

Chinese mainland investors’ purchases of Hong Kong stocks via the southbound channel of the Stock Connect programme reached HK$731.2 billion ($93 billion) in the first half of 2025, and are on track to break the record of HK$808 billion set last year. Mainland investors now contribute 50% to Hong Kong’s daily stock turnover, up from 30% at the beginning of 2024.

This trend is part of the gradual process of change for Hong Kong, becoming more and more integrated into the mainland system, and also for the HKEX to play a greater gateway role for Chinese companies looking to enter international markets.

The flip side of this, is that the proportion of international money moving through Hong Kong is decreasing, in many cases shifting to Singapore instead, and is an indication of how international investors view both the direction of travel for Hong Kong and also the changes being brought about by the increasingly turbulent global geopolitical environment.