Welcome back to China Insights Weekly. Here are some of the main highlights of this issue:
German helmet production moves to China, as the last major European manufacturer relocates its production
Belt and Road Initiative green projects reached a record, with first-half activity totaling $126.3 billion
Wind and solar energy is set to exceed half of installed capacity, supported by new reliability requirements
China granted a license to the first live-action film created using AIGC, pushing AI-generated video into feature-length streaming content
Main News
Geely buys a 34% stake in Ford's Spanish plant (link) and Chinese automakers capture 34% of Europe's plug-in hybrid deliveries (link)
Geely Auto will take a 34% stake in Ford's plant in Valencia, forming a joint venture in which Ford will own 66% and Geely 34%. The transaction is valued at 221 million euros, approximately $252 million. The first model to be produced will be the Geely EX5 electric SUV, which is expected to roll off the production line in 2028, followed by a jointly developed crossover offered with several powertrain options.
A total of five models are planned to be manufactured at the plant. The factory has an annual production capacity of 500,000 vehicles, but in 2025 it was operating at only 26% of that capacity. Ford's sales in Europe have fallen from one million cars a decade ago to 426,000 vehicles last year.
The deal will allow tariffs imposed by the European Union to be bypassed, will provide Geely with a capital-light entry into the European market, and will make use of the existing skilled workforce. Through the deal, Geely will gain its first manufacturing plant in Europe, while Ford will be able to make better use of its idle production capacity.
Chinese automakers captured a record 34% of European plug-in hybrid vehicle deliveries in June. Brands including BYD and Chery also accounted for 11% of all newly sold cars and 15% of pure battery electric vehicle deliveries in the European market.
The growth comes as Chinese manufacturers leverage competitive pricing and advanced battery technology to appeal to price-sensitive customers. Chinese automakers have now outsold their Japanese rivals for the second consecutive month, selling 171,630 vehicles compared to 158,540 for Japanese brands. This trend is likely to accelerate as Chinese companies establish local manufacturing in Europe.
Geely Auto and Ford executives announce the formation of a joint manufacturing venture in Spain.
China's chip exports nearly double as AI demand drives foreign trade (link)
In the first half of 2026, China exported 179.44 billion integrated circuits with a total value of $177.28 billion. The value of exports thus grew by more than 96% year-on-year.
Exports of computers, servers, memory devices, and other data processing equipment rose by 41.3% to $138.08 billion.
Global AI infrastructure buildout is directly boosting demand for output from Chinese factories — not just processors themselves, but also related servers, memory, networking equipment, and other components.
AI infrastructure has become a large industrial market with significant growth potential, and China participates at nearly every level of this supply chain.
Last German bicycle helmet maker moves production to China (link)
KED, the last German manufacturer of cycling helmets, is relocating all of its production to China. The company cites a 40% increase in the minimum wage to €13.90 per hour, sharply rising raw material prices, and strong competition from discount retailers offering helmets made in China.
This move follows similar decisions by Uvex and Alpina, meaning no major domestic manufacturer will remain in Germany in this segment.
KED's CEO acknowledged that the pricing and marketing advantage of the "Made in Germany" label is fading. Retailers and consumers, he said, increasingly recognize that high-quality helmets can also be produced in China, whose factories already supply many global brands.
Green energy boosts China's Belt and Road investments to a record $126 billion in just one half-year (link)
Green energy financing under China's Belt and Road Initiative reached a record $20.1 billion in the first half of 2026, already surpassing the full-year result for 2025 within just six months.
The total value of Belt and Road deals and projects rose to $126.3 billion, the highest figure recorded for any half-year period.
Growth is being driven by higher energy prices and demand for energy infrastructure and data centers needed for AI development.
Construction projects accounted for $11.8 billion and direct investment for a further $8.3 billion. The private sector's share rose from 13% in 2022 to 48%. Investment in Africa nearly tripled year-on-year to $33.5 billion.
Belt and Road activity is increasingly oriented toward trade and direct investment, with Chinese clean-tech companies responding to global demand for affordable green energy that can be deployed at scale.
China's lending market gets a new pricing benchmark as first DR-linked loans are issued in Hainan (link)
China has introduced a new reference benchmark for setting loan interest rates. ICBC, China Merchants Bank, and Shanghai Pudong Development Bank have issued the first corporate loans in Hainan linked to the Depository Institutions Repurchase Rate, known by the abbreviation DR.
The overnight, seven-day, and fourteen-day DR rates reflect interbank funding costs, representing a more market-oriented alternative to the Loan Prime Rate.
The pilot project was enabled by Hainan's free trade zone policies. It supports interest rate liberalization and could bring China's loan pricing closer to global benchmark rates such as SOFR, while also potentially improving conditions for cross-border financing.
DJI unveils its first electric fixed-wing cargo convertible aircraft, the EV50, designed for high altitudes (link)
DJI has unveiled the EV50, its first electric vertical takeoff and landing fixed-wing cargo drone, designed for long-distance regional transport.
During an expedition to Mount Everest, it operated at an altitude of 8,861 meters — 12 meters above the summit of the world's highest mountain — setting, according to the manufacturer, an altitude record for VTOL drones.
Over 12 days it completed 32 flights, including 12 atmospheric monitoring missions, and was able to climb up to 3,730 meters above base camp in a single flight.
The aircraft can carry a payload of 50 kilograms, has a range of up to 150 kilometers, and reaches a speed of 160 kilometers per hour. Its cargo hold has a volume of 270 liters.
The drone is also equipped with a dual thermal management system, anti-icing protection, four independent batteries, and an emergency parachute.
The EV50 expands China's efforts to develop long-distance cargo transport and could find applications in supplying remote areas, emergency response, and scientific research.
China to increase wind and solar power generation by more than 50% over five years (link)
China has set a binding target to increase wind and solar power generation by 53% by 2030. Consumption of renewable energy is to rise from the equivalent of 1.18 billion tonnes of coal to 1.8 billion tonnes.
Wind and solar power plants backed by energy storage systems must account for 8% of installed capacity during peak demand periods and cover 20% of electricity consumption during sharp demand surges.
The plan also calls for more than 300 gigawatts of renewable-based regulation capacity and 570 gigawatts of hydropower, of which 160 gigawatts is to come from pumped-storage hydropower.
China also aims to produce two million tonnes of green hydrogen.
The binding target shifts the focus from the sheer volume of installed equipment to the reliable integration of renewable sources into the electricity grid.
iQIYI launches China's first licensed AIGC online story film (link)
Chinese streaming platform iQIYI has released "Qitan: Paper Blade Across the Wasteland," China's first online live-action film created using generative AI to receive a license for internet series or film distribution.
The sixty-minute film was produced in collaboration with DaMeng Innovation. AI was used in developing the basic concept, generating visual materials, producing 4K output, and in post-production.
A team of more than 20 creators used AI to produce over 200 characters and visual elements.
The film is the first installment of a planned trilogy based on Chinese supernatural folklore, and serves as a test of whether AIGC-created content can move beyond short videos into feature-length narrative productions.
Its release also represents an important regulatory milestone for AI-generated content in China's streaming industry.
Wang Hong and Deng Yu become the first Chinese nationals to win the Fields Medal in mathematics (link)
China now has its first two Fields Medal winners who are Chinese nationals.
Peking University alumni Wang Hong and Deng Yu were honored for their work on the three-dimensional Kakeya conjecture and the sixth Hilbert problem.
Wang Hong is a professor at New York University's Courant Institute and at the French institute IHES. Deng Yu teaches at the University of Chicago.
China has become the fifth country in the world and the first in Asia to receive two Fields Medals at a single award ceremony.
In the past, only two mathematicians of Chinese descent had received the award, but neither held Chinese citizenship at the time it was awarded.
The result points to China's expanding research base. Twelve Peking University graduates were invited as speakers at this year's International Congress of Mathematicians, and leading mathematicians based abroad are increasingly making the move to Chinese universities.
China prepares to hit an asteroid with a projectile traveling at twenty-six times the speed of sound (link)
China is planning an asteroid deflection mission targeting near-Earth asteroid 2015 XF261, which has a diameter of approximately 98 feet, or just under 30 meters.
The projectile is to strike the asteroid at a speed greater than 5.6 miles per second, approximately twenty-six times the speed of sound — nearly 50% faster than NASA's DART mission.
The impactor and an observation probe are to be launched together. The observation probe will then use a gravitational slingshot around Venus to observe the collision and the subsequent change in the asteroid's trajectory.
The mission's objectives are to precisely strike the selected object, alter its orbit, measure the result of the impact, and confirm that the asteroid poses no danger to Earth.
The encounter could take place during a close flyby in 2029 or 2030, when the asteroid will approach Earth to within approximately 4.3 million miles, or about 6.9 million kilometers.
Unlike the DART mission's target — an approximately 525-foot-wide asteroid composed of loosely bound rubble — China's target is smaller and could be significantly more compact.
The mission will therefore offer a different type of test of planetary defense technologies.
Tomáš Kučera & Yereth Jansen
China-insights.com/gnews.cz – GH