Welcome back to China Insights Weekly. Here are some of the highlights of this release:
- China's coffee war escalates, premium and cheap chains are diverging
- CATL expands battery exchange logistics with the aim of national deployment
- Humanoid robots enter factories, are moving towards mass deployment
- Fusion startup achieves record plasma run, the commercial plant is accelerating
Main News
Alibaba has officially launched Qwen 3.6-Plus, which is immediately available via API and Alibaba Cloud Model Studio, with a default context window of 1 million tokens. The model achieves top performance in agent programming benchmarks, with scores of 61.6 in Terminal-Bench 2.0, 56.6 in SWE-bench Pro, 78.8 in SWE-bench Verified and 73.8 in SWE-bench Multilingual, outperforming competitors including Claude 4.5 Opus, Kimi K2.5 and GLM5. Alibaba emphasizes the integration of reasoning, memory and execution capabilities, accelerating the evolution towards highly autonomous super-agents.
Alibaba's big language model Qwen 3.6-Plus ranked second globally in the Code Arena programming benchmark and outperformed models from OpenAI, Google and xAI, according to rankings published on April 3 by blind testing platform LMArena. The model is now the top-ranked Chinese representative in Code Arena's ranking, which evaluates AI's capabilities in programming using blind testing to reduce bias. This success puts the Qwen series in direct competition with leading Western models including GPT, Gemini and Grok, and may boost investor confidence in the company's AI strategy and strengthen its position in the competitive cloud computing market. Alibaba said the result shows the model's potential to boost productivity and innovation in the technology industry.
Chinese government bonds become the only global safe haven during the Middle East conflict
Chinese government bonds have emerged as the only safe haven during the war with Iran, with 10-year yields falling slightly to 1.81 % since the end of February, while US Treasury yields rose 0.38 percentage point to 4.34 % and UK gilts rose 0.7 percentage point. This resilience reflects China's low inflation environment - February CPI was 1.3 %, below the target of 2 % - and insulation from energy shocks thanks to a diversified fuel mix, strategic reserves and discounted supplies from Russia. Tight capital controls maintain domestic liquidity within the country and create uncorrelated demand. Since 2012, Chinese bonds have been among the rare sovereign debt instruments with positive real returns relative to US inflation, outperforming markets such as Japan, Germany and the UK, which have posted negative nominal returns. Investors are anticipating a possible easing of monetary policy by the People's Bank of China, in contrast to the expected tightening in the West.
PUMA collaborates with Shincell to develop a new generation of NITRO running foam
PUMA has partnered with Chinese sustainable foam technology leader Shincell to develop a new generation of NITRO™ running foam and has set up a dedicated laboratory in Suzhou, China to test the new materials. Shincell specializes in purely physical foaming processes using atmospheric gases to create lightweight, high-performance materials with micro- and nano-bubbles. PUMA plans to launch the first joint products in the coming seasons. The German sportswear manufacturer first introduced NITRO™ in early 2021 and recently confirmed its performance during the Boston, London and New York City marathons, where more than 250 athletes tested the technology and nearly 100 set personal bests, with 48 improving their times by three minutes or more. The partnership is designed to maintain PUMA's competitive advantage in the running segment and leverage Shincell's innovations in sustainable materials.
German machine tool industry surpassed by China as the largest exporter in 2025
China's machine tool production will reach a record €30 billion in 2025, cementing its global dominance with 37 % of world production, while Germany's output has fallen to €9.4 billion, falling short of the €10 billion mark, only slightly above pandemic levels. China surpassed Germany as the world's largest exporter for the first time, exporting €8.6 billion worth of machinery (up 13 %), while Germany reached €7 billion (down 10 %). The top three countries - China, Germany and Japan - account for 58 % of global machine tool production. China also remains the largest consumption market with a volume of €25.2 billion (32 % of global demand, up 5 %), compared to the US (€11.1 billion, 14 %) and Germany (€5.7 billion). German manufacturers saw total orders fall by 3 % in 2025, with domestic demand falling sharply despite 31 % growth in foreign orders.
China's coffee market splits, Luckin heads higher and Mixue goes deeper
China's coffee market is polarising as low-cost brands move upmarket and premium players attract capital. Centurium Capital, a major shareholder in Luckin Coffee, is buying Blue Bottle Coffee's global retail assets for less than US$400m, below the US$500m Nestlé originally paid for a 68% stake, signalling a shift to the premium segment after Luckin's net profit fell 39.% year-on-year in Q4 2025. Meanwhile, Cotti Coffee has abandoned its RMB9.9 ($1.4) pricing strategy and stopped accepting franchise applications in major cities as of March 1. Tea giant Mixue Bingcheng is testing freshly ground coffee using machines priced at RMB33,000 (US$4,780) in its network of more than 40,000 outlets. The market added more than 40,000 new outlets and reached 215,000 locations in 2025, with the share of chains rising from 46 % to 53 %. Capital is flowing into the premium segment, with Keurig Dr Pepper buying JDE Peet's (including Peet's Coffee China) for US$18.1 billion and Boyu Capital taking control of Starbucks China.
Tomáš Kučera & Yereth Jansen
China-insights.com/gnews.cz - GH
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