Welcome back to China Insights Weekly. Here are some of the key takeaways from this edition:
AstraZeneca expands its presence in China with a $1.7 billion drug development agreement for kidney diseases.
Chinese automakers gain 12% market share in Europe, surpassing Japanese competitors in May.
CXMT disrupts the DRAM market landscape and controls 11% of global wafer production capacity.
Cross-border travel reaches record levels thanks to rapid growth in visa-free arrivals.
Top News
Chinese AI models account for 46% of US company usage on the OpenRouter platform (link)
US companies are increasingly using Chinese AI models due to pressure to reduce costs. Since February, their share of tokens used by US companies through the OpenRouter platform has remained above 30% each week, reaching as high as 46%. In the previous twelve months, it averaged only 11%.
Chinese models are 60-90% cheaper than leading US systems, while offering performance comparable to the most advanced models on the market. According to publicly available data, approximately 80% of US startups using open-source AI have switched to platforms like DeepSeek, Qwen, Kimi, and GLM.
In June, the startup Lindy migrated all of its operations from Anthropic's models to DeepSeek, saving millions of dollars. The difference in price and performance is making Chinese open-source models a practical default choice for an increasing number of US companies.
AstraZeneca enters into an agreement with its long-term Chinese partner CSPC for the development of kidney disease drugs worth $1.7 billion (link)
AstraZeneca paid CSPC Pharmaceutical an upfront payment of $30 million for the joint development of two siRNA-based drug candidates intended to treat kidney diseases. The development will utilize CSPC's platform for delivering active ingredients outside the liver.
The agreement includes up to $540 million in milestone payments linked to development and an additional $1.2 billion tied to drug sales. AstraZeneca may obtain global rights, while CSPC will retain rights for the Chinese market for one of the products.
The collaboration combines molecular design using artificial intelligence with automated screening. It also expands the rapidly growing wave of licensing agreements in China's biotechnology sector.
The agreement follows AstraZeneca and CSPC's collaboration earlier this year on the development of obesity treatment. Under that agreement, AstraZeneca made an upfront payment of $1.2 billion, with the total value of the contract potentially reaching up to $18.5 billion. The two companies have also previously entered into two other agreements focused on chronic diseases.
The Farxiga drug generated revenue of $2.2 billion in the first quarter of 2026, highlighting the significance of the market for drugs treating kidney disease.
China Successfully Lands Reusable Rocket in "SpaceX-Style" (link)
On July 10, China successfully launched and subsequently recovered the first stage of an orbital carrier rocket for the first time. The Chinese Aerospace Science and Technology Corporation landed the Long March 10B rocket's first stage on a network located on a vessel.
The two-stage rocket, 63 meters long, carried a satellite into orbit. Its first stage, powered by a mixture of kerosene and oxygen, returned and made a vertical landing six minutes after separation.
In reusable mode, the rocket can deliver a payload of 16 tons to low Earth orbit. Another flight of the recovered first stage is planned for later this year.
This milestone represents another step in China's broader support for the commercial space sector. Several domestic rocket companies are striving to match the launch frequency of SpaceX's Falcon 9.
Chinese Automakers Overtake Japanese Brands in Europe, BYD Leads Among Chinese NEV Exporters with 34.2% Share (link)
Chinese automakers surpassed their Japanese counterparts in the number of new car registrations in Europe for the first time in May, capturing a 12% market share.
The five largest Chinese automotive groups – BYD, SAIC, Geely, Chery, and Leapmotor – sold 138,410 vehicles, representing a year-on-year increase of 65%. The six largest Japanese manufacturers sold 130,424 cars, down 3.1% year-on-year.
The growth in Chinese brands was almost entirely driven by battery electric vehicles and plug-in hybrids. The total number of car registrations in Europe increased by 3.6% to 1.15 million vehicles. Battery electric vehicles accounted for a 20% share, and plug-in hybrids accounted for 9.7%.
Chinese companies are also expanding production directly in Europe to mitigate the impact of European Union tariffs. BYD is building manufacturing facilities in Hungary, and Leapmotor is partnering with Stellantis on production in Spain.
In June, BYD led among Chinese exporters of vehicles with new energy sources, referred to as NEVs. It exported 170,897 vehicles, an increase of 98.8% year-on-year, and accounted for a 34.2% share. Tesla China came in second with 36,171 vehicles.
For the period from January to June, Chery ranked second with exports of 290,301 NEV vehicles. Geely was third with 275,417 vehicles and a year-on-year increase of 601.4%. Tesla China came in fourth with 228,994 vehicles.
When including cars with internal combustion engines, Chery led in June for exports of passenger vehicles with 187,768 vehicles. BYD and Geely followed.
For the entire first half of the year, Chery exported 931,557 passenger cars, an increase of 70.9% year-on-year, securing a 21.9% share.
The rise of CXMT disrupts the global DRAM memory monopoly held by three companies (link)
ChangXin Memory Technologies, known as CXMT, headquartered in Hefei, has become the fourth largest DRAM memory manufacturer in the world. The Chinese state-backed memory chip maker now controls 11% of global wafer production capacity. By 2028, its share is expected to increase to 15%.
After ten years of accumulating losses totaling 37 billion RMB, the company announced a net profit of 33 billion RMB, or approximately $4.8 billion, for the first quarter of 2026. Apple is also testing CXMT chips for devices intended for the Chinese market.
CXMT plans to raise 29.5 billion RMB through an initial public offering. The total valuation of the company could reach three trillion RMB upon listing.
Although the company does not have access to extreme ultraviolet lithography (EUV) equipment and still lags behind in high-speed memory technology, its profits and IPO proceeds could finance several years of HBM memory development.
The rise of the company also confirms the viability of the state-directed venture capital model employed in Hefei, which provided crucial funding for the company in its early stages.
A Chinese team has won the European Inventor Award for an innovative intelligent battery recycling technology (link)
A Chinese team from Guangdong Brunp Recycling, a subsidiary of battery manufacturer CATL, won the 2026 European Inventor Award in the category for countries outside the European Patent Office. The team also received the Public Choice Award.
The award was given for an intelligent battery recycling technology. The process can recover 99.6% of nickel, cobalt, and manganese, and 96.5% of lithium from used batteries.
Compared to conventional methods, it reduces acid and alkali consumption by 73%, shortens the processing steps by more than 18%, and reduces the carbon footprint of cathode materials by 61% compared to conventional production.
Between 2018 and 2023, over 2,000 GWh of lithium-ion battery capacity was added worldwide. This amount is equivalent to approximately 40 million electric vehicles.
The Chinese team aims to promote its targeted recycling technology into international low-carbon standards and expand the global supply of recycled materials.
The number of cross-border trips to and from China reached a record high of 369 million in the first half of 2026 (link)
China recorded 369 million cross-border trips in the first half of 2026. The number increased year-on-year by 10.8% and reached a historical high.
Foreigners made 45.9 million trips, an increase of 20.6% year-on-year. The number of visa-free entries increased by 30.6% to over 17.8 million, accounting for 77.7% of all arrivals of foreign visitors.
Residents of mainland China made 176 million border crossings. Travelers from Hong Kong, Macau, and Taiwan made an additional 147 million trips.
China now unilaterally allows visa-free entry to citizens of more than 50 countries. Citizens of 55 countries can also use a 240-hour visa-free transit through 65 border crossings and ports.
Chinese companies Skyworth and Youdoo have launched a gaming console with artificial intelligence and motion capture (link)
The Skyworth group and Youdoo console manufacturer, supported by this Chinese consumer electronics company, have launched the Youdoo Box. Its price ranges from 1999 to 3399 CNY, approximately $295 to $500 USD.
In April, Skyworth invested nine million CNY in Youdoo and acquired an 18% stake in the company.
The device uses image-based artificial intelligence to track human body movements. This enables gaming and fitness assessment without controllers or wearable electronics.
Sales of Chinese devices using AI for motion capture are projected to reach 500,000 units by 2027 and grow to 3.5 million units by 2030. China's share of the global market is expected to increase from 6% to 20% over five years.
The CEO of Youdoo, who previously held a senior position at Tencent Games, aims to build the first Chinese gaming console capable of competing globally with foreign manufacturers.
Nobel laureate in materials science, Omar Yaghi, is moving from the United States to Tsinghua University in China (link)
Omar M. Yaghi, the 2025 Nobel Prize winner in Chemistry, has left the University of California, Berkeley, and joined Tsinghua University in Beijing.
He will lead a new research center that combines artificial intelligence with chemistry and materials science. Its goal is to accelerate the development of materials that help address water scarcity and achieve carbon neutrality.
Yaghi shared the Nobel Prize in 2025 for his work on metal-organic frameworks. He also received the Wolf Prize in Chemistry and the Albert Einstein World Award for Science.
Shanghai Grand Opera House to open in October (link)
The Shanghai Grand Opera House will open on October 17th. Its first season will last four months, until February 2027, and will feature 47 performances, 82 shows, and over 100 educational activities.
The building will include the Harmony Hall with a capacity of 2000 seats, the Soar Theatre with 1200 seats, the Open Stage with 1,000 seats, and a space called Grand Atelier.
The fan-shaped exterior of the building, covering an area of 10,000 square meters, is designed to become a new cultural landmark on the banks of the Huangpu River and a platform for showcasing original Chinese works.
Tomáš Kučera & Yereth Jansen
China-insights.com/gnews.cz – GH