The Hong Kong stocks closed mixed. The HSI fell 0.1%, and the HSTECH rose 0.6%.
Li Auto rose 10%; Bilibili, SMIC up 2%; XPeng, Meituan, BYD up 1%; Xiaomi fell 2%; Alibaba, NIO down 1%.
Beijing on Wednesday pledged to curb “irrational competition” in the EV sector during a State Council meeting chaired by Premier Li Qiang. Authorities said they would step up price monitoring, regulate the market and push companies to innovate and improve quality to stabilise the industry and safeguard economic growth.
The latest pledge to rein in irrational EV competition follows a meeting on July 1 of the Central Financial and Economic Affairs Commission, which listed “regulating disorderly price competition” as one of six key tasks for building a unified national market. The meeting also discussed encouraging improving quality and phasing out outdated production capacity in an orderly manner.
The commission is considered the nation’s highest body for coordination and discussion on issues related to the economy.
“The rise of the ‘anti-involution’ campaign has sparked investors’ hope for decisive reflation, reminiscent of the 2015-18 supply-side reform,” Morgan Stanley economists including Robin Xing said in a report this week. “While we see this as a step in the right direction, we remain cautious about its effectiveness, given broader overcapacity across industries, more limited fiscal space for demand-side stimulus, and a weaker macro backdrop.”
‘Anti-involution’ refers to efforts to root out China’s industrial malaise, marked by cutthroat price wars and overcapacity that have hurt profitability across industries.
Comments