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2026-09-07 | subscribe | homepage

Welcome back to China Insights Weekly. Here are some of the key highlights for this week’s edition:

• Tencent’s Hy4 tops a blind expert test, edging GLM-5.3 and Kimi K3

• Audi opens a 300-person Shanghai centre, developing four new electric models

• CXMT reaches 10% of global DRAM revenue, up from 4% a year earlier

• Beijing–Hong Kong rail link nears completion, spanning 2,370 kilometres

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🚀 Headlines

Tencent’s open-source Hy4 tops rivals as AI token prices hit a record low (link, link)

Tencent has open-sourced Hy4 preview, a Mixture-of-Experts model with 770 billion total parameters and 49 billion active, supporting a 1-million-token context window. The model targets software engineering, finance, gaming, and scientific research. In a blind evaluation of 163 experts across 203 engineering tasks, Hy4 scored 2.99 out of 4.00, edging GLM-5.3 (2.92) and Kimi K3 (2.94). The model also played a role in its own development, automating training optimisation and raising end-to-end throughput by 31.8%. API pricing is set at USD 0.834 per million input tokens, USD 2.501 per million output tokens.

AI token prices have plunged to a record low of USD 0.97, down from a May peak of USD 2.05, according to Silicon Data's index. The slide reflects intensifying competition from Chinese open-weight models such as Moonshot's Kimi K3, which are undercutting US incumbents on price. OpenAI cut prices on its GPT-5.6 series in late July, while rivals have adopted dynamic pricing. With the performance gap between open and closed models narrowing to months, profitability is under pressure—especially for OpenAI and Anthropic, both preparing for IPOs. Fixed compute costs remain unchanged, squeezing margins and raising doubts about whether the AI sector's massive investments will deliver expected returns.

Audi opens Shanghai innovation center to develop four AUDI-brand models (link)

Audi and SAIC have established the AUDI Innovation & Technology Center (AITC) in Shanghai, a joint venture with full vehicle development capabilities. The center will employ around 300 people to develop four new models on the ADP 2.0 platform, with the first scheduled to debut in 2028. SAIC holds a 49% stake in AITC, with Audi and Volkswagen Group China holding 41% and 10%, respectively. Matthias Pfister, formerly of SAIC Volkswagen, was appointed general manager. AITC will focus on smart EV technologies, AI-powered cockpits and next-generation driver-assistance systems. The center is part of Audi's dual-brand strategy, complementing FAW Audi's focus on the four-ring brand.

USD 3 billion Chinese startup tackles Elon Musk’s robotic-hands problem (link)

Linkerbot, a Beijing-based robotic hand maker valued at USD 3 billion after a Series B+ round in April, is racing to mass-produce affordable dexterous hands. Its six models range from 6,666 yuan (USD 980) to 99,999 yuan (USD 14,700), with the 49,999-yuan L20 the bestseller. Competitors' hands sell for USD 50,000–USD 125,000. The company makes nearly all components in-house, aiming to drive costs below USD 100 per pair within three years. China's robotic hand shipments are projected to reach 430,000 units annually by 2030, up from 70,000 this year. Linkerbot's proprietary skill database contains over 500 movements, including chopping vegetables and threading a needle. With a new production line, it targets 100,000 hands annually.

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ChangXin Memory reaches 10% of the global DRAM market in Q2 (link)

ChangXin Memory Technologies (CXMT) captured a 10% share of the global DRAM market by revenue in the second quarter, up from 4% a year earlier. The Hefei, Anhui Province-based chipmaker's share grew 150% year-on-year and 25% quarter-on-quarter, making it the fastest-growing DRAM supplier globally. Samsung led with 38%, followed by SK Hynix at 25% and Micron at 24%. The top three's combined share fell to 87% from 94% a year earlier. CXMT's revenue hit RMB 150.3 billion (USD 22.4 billion) in the first half, up 874% year-on-year, and net profit rose to RMB 77.6 billion. The company's monthly DRAM wafer capacity is expected to reach 300,000–350,000 by year-end, up from below 1% market share in 2023.

AI dramas come to mainstream TV in China (link)

AI-generated dramas have leapt from China's video apps to mainstream satellite television. The first fully AI-generated costume drama, "Tale of Peach Blossom Pond," aired on Anhui Satellite TV in July. It has since been followed by shows on Hunan Satellite TV and Hong Kong's TVB. Mango TV noted that production costs are "much lower" than for traditional dramas, while the first batch of merchandise sold out, expanding IP derivative value. TVB signed a deal with ByteDance's Volcano Engine in June to use Doubao's video generation model for content production. Hong Kong's first AI animated film project involves high school students as creators. While some worry about job displacement, one screenwriter noted AI now helps turn inspiration into work and analyze viewership in days.