Chinese AI Enters OpenAI 🧠 Merck’s $2.13B Cancer Bet 💊 Electric Truck Sales +80% 🚛

2026-10-05 | subscribe | homepage

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

• Tariff cuts on $60B, planned for goods traded between China and the US

• AR-and-AI glasses grow 449%, with China leading the display-equipped segment

• Fusion reactor assembly passes halfway, with completion targeted for 2027

• Rail trips hit 25.2 million, setting a new National Day record

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🚀 Headlines

US and China to lower tariffs on USD 60 billion of goods (link)

Following a summit between President Trump and President Xi, the United States and China have agreed to a reciprocal tariff reduction covering USD 60 billion in bilateral trade. The U.S. and China are planning to reduce tariffs on USD 30 billion worth of goods from each country. The detailed lists include mostly imports of toys, sports equipment, and Christmas decorations in the 77 item categories that the US imports from China, while American agricultural products featured prominently in China's list of 1,619 import items. U.S. goods trade deficit with China was more than USD 202 billion last year.

Merck Bets USD 2.13 billion on Shanghai biotech’s innovative cancer drug (link)

Merck has signed an exclusive global licence agreement with SciBrunch Therapeutics, a Shanghai-based biotech founded in late 2024, for SPR2015, an investigational oral KRAS G12D (ON) inhibitor targeting pancreatic, colorectal and lung cancers. SciBrunch will receive a $400 million upfront payment and is eligible for milestone payments across multiple indications, bringing the transaction's total potential value to $2.13 billion. Merck gains worldwide rights to develop, manufacture, and commercialise the preclinical molecular glue inhibitor, which has shown nanomolar antiproliferative activity in KRAS G12D-mutant cell lines and antitumor efficacy across multiple xenograft models.

In a landmark for Chinese AI Kimi K3 breaks into OpenAI's enterprise billing (link)

Moonshot AI's Kimi K3 has entered OpenAI's enterprise billing system through Baseten, according to Sina Finance, marking a first for a Chinese open-weight model. Under a partnership announced on September 29 between OpenAI and San Francisco-based inference provider Baseten, backed by Nvidia and Alphabet's CapitalG, eligible enterprise customers can apply existing OpenAI procurement commitments to Baseten-served models via the Responses API. Native access inside OpenAI's Codex coding tool requires an eligibility request. Pricing is USD 3.00 per million input tokens and USD 15.00 per million output. The deal simplifies procurement, rather than eliminating customers' security reviews or compliance obligations, embedding a Chinese model inside the procurement pipelines of Western multinationals. Amazon Bedrock also integrated Kimi K3 on September 18.

China accounts for over 90% of global electric heavy-truck sales (link)

China's diesel consumption will fall more than 10% this year, a shift that helped Beijing absorb this year's oil shock. Electric trucks are reshaping China's oil demand. Sales of battery-powered heavy rigs jumped nearly 80% in the first half of 2026 and are on pace to capture close to a third of all trucks sold this year, up from 8% two years ago. China accounted for more than nine of every ten electric heavy trucks sold globally in the first half, and exports of electric tractor trucks already doubled 2025's full-year total. Running costs are decisive: a 200-kilometre haul costs about USD 21 in China off-peak, against USD 101 for a US diesel rig. The Oxford Institute for Energy Studies notes that trucks electrify faster than passenger cars because rigs are used more intensively and turn over quicker.

China leads AR & AI glasses as global segment jumps 449% (link)

China has emerged as the clear frontrunner in the fast-growing AR & AI glasses category, capturing 45% of global segment shipments in the first half of 2026, ahead of North America at 41%, as overall AI glasses shipments surged 263% year-on-year. Chinese OEMs including Rokid, Even Realities, Alibaba and INMO are driving commercialisation, backed by a mature domestic supply chain spanning micro-displays, waveguides and manufacturing partners. The AR & AI segment itself jumped 449%, with China positioned to extend its lead as the technology scales. Overall, global AI glasses shipments surged 263% year-on-year in the first half of 2026, with display-less devices accounting for 96% of the total.