Daily Buzz: 12 February 2026

China Successfully Tests Rocket for Lunar Mission

China conducted a major flight test of a new heavy-lift rocket and spacecraft designed for future crewed lunar missions, marking a major step forward in its moon exploration program. A prototype of the Mengzhou spacecraft, mounted atop a Long March 10 rocket, lifted off from the Wenchang Space Launch Center in Hainan Province on Wednesday. The mission carried out China's first spacecraft escape test under maximum aerodynamic pressure, known as Max-Q. The return capsule separated from the booster and was pulled away by its escape system before descending by parachute into the South China Sea. The China Manned Space Agency said the mission marked several firsts, including the rocket's maiden flight test and the first sea recovery of both a crewed spacecraft-return capsule and a reusable first-stage booster.

Lunar New Year Holiday: Spend, Spend, Spend!

China's Spring Festival, which celebrates the Lunar New Year, is traditionally a season for big consumer spending on gifts, food and travel, Chinese authorities want to make sure this year's nine-day holiday that begins on February 16 will be a bonanza for consumerism. The spending incentives include a lottery for consumers making purchases, dining out or traveling, with prize money totaling 1 billion yuan (US$145 million). China is also ramping up its consumer goods trade-in subsidy program during the holiday, with subsidies of 62.5 billion yuan allocated. In addition, local governments across the country are offering 360 million yuan in spending vouchers, ticket discounts and promotional campaigns. Major tech companies, including Alibaba and Baidu, have already unveiled multimillion yuan holiday cash giveaways to woo consumers to their AI apps.

US Commits to Iran Talks Despite Israeli Doubts

US President Donald Trump told Israeli Prime Minister Benjamin Netanyahu in a meeting at the White House on Wednesday that the US will continue nuclear talks with Iran despite Israeli skepticism about dealmaking efforts with its arch enemy. The talks center on Iran's nuclear program, but Israel is pushing for limits on Iranian ballistic missiles and an end to Tehran's support for regional militant groups like Hezbollah to be part of any final deal. Iranian President Masoud Pezeshkian said on Wednesday that his country is willing to open up its nuclear sites for "any verification" to prove it is not seeking to build nuclear weapons, the Financial Times reported.

Indonesia Stands Ready with 8,000-Strong Gaza Deployment

Indonesia, the world's largest Muslim country by population, said it is preparing to deploy up to 8,000 soldiers for peacekeeping and reconstruction in the Gaza strip, the first country to signal willingness to participate in Phase 2 of the US-brokered ceasefire in the war-ravaged Palestinian territory. Indonesian General Maruli Simanjuntak said soldiers are receiving training focused on medical aid and engineering roles. Indonesia is a member of US President Donald Trump's so-called "Board of Peace," which was created last month. Its mission, in part, is to stabilize and demilitarize the territory after a long war with Israel.

Top Business

SMIC, Largest Mainland Chipmaker, Posts Quarterly Profit

Shanghai-based Semiconductor Manufacturing International, the mainland's largest chipmaker, said fourth-quarter profit attributable to owners of the company rose 61 percent from a year earlier to US$173 million on a 13 percent increase in revenue to US$2.5 billion. According to an earnings statement filed with the Hong Kong stock exchange, the company's gross margin fell to 19.2 percent from 22.6 percent, and capacity utilization was 96 percent. For all of 2025, the company said profit surged 39 percent to US$685 million on a 16 percent rise in revenue to US$9.3 billion. Capital spending totaled US$8.1 billion. SMIC said it expects flat revenue growth in the current quarter, sending its shares lower in Hong Kong and Shanghai trading.

In an earnings call with investors, Co-Chief Executive Zhao Haijun said orders from smartphone vendors and makers of lower-end electronics products are getting squeezed by strong demand for AI-related semiconductors. Chips for smartphones accounted for about a quarter of revenue in the fourth quarter, and consumer electronics comprised about 40 percent. The company warned of a 30 percent surge in depreciation costs this year due to a massive capacity expansion to meet chip demand. Zhao also cautioned that breakneck spending to build AI data centers could result in idled capacity. "Companies would love to build 10 years' worth of data center capacity within one or two years," he said. "What exactly these data centers will do hasn't been fully thought through." AI infrastructure investment is projected to exceed US$3 trillion globally over the next five years.

ByteDance Restricts Seedance Input Amid Privacy Backlash

ByteDance has officially suspended user ability to input real-person images and videos into its next-generation AI video model, Seedance 2.0. The move comes just days after the model's debut, which was widely hailed as a major breakthrough in creative content. During internal testing, users discovered that Seedance 2.0 could not only replicate a person's likeness with startling accuracy but could also autonomously reconstruct a subject's voice from a single still photo, without any prior audio samples or explicit authorization. In response to deepfake concerns and potential biometric misuse, ByteDance's decided to temporarily suspend the feature.

Still, Seedance 2.0's technical capabilities continue to awe the market. The model's features --including cinematic multi-shot generation, flawless character consistency and native audio-visual synchronization – have been widely lauded. Feng Ji, chief executive of Game Science, creator of "Black Myth: Wukong," said the model represents a "generational leap" that could fundamentally restructure film and game production.

Separately, ByteDance said a media report that it is developing an artificial intelligence chip and is in talks with Samsung Electronics is inaccurate, without elaborating. Reuters, citing unidentified sources, said ByteDance is seeking to secure a reliable support of AI processors, with plans to produce 100,000 chip units designed for AI inference tasks this year. Samsung declined comment. ByteDance rivals such as Alibaba and Baidu are already developing their own chips.

Exodus of Co-Founders From XAI

Elon Musk's xAI is suffering an exodus of top officials, Reuters reported. The latest to leave are co-founders Tony Wu and Jimmy Ba, three years after they helped the startup of the platform. Their departures leave xAI with half its original 12 co-founders. The Financial Times cited internal tensions at the company. Musk said on Wednesday that xAI has laid off some employees as part of a broader reorganization, which "unfortunately required parting ways with some people." SpaceX is in the process of merging with xAI to create a US$1.25 trillion company poised to go public.

Economy & Markets

China Consumer Prices Rise Slower Than Forecast

China's consumer prices in January rose a smaller-than-expected 0.2 percent from a year earlier, according to data released on Tuesday by the National Bureau of Statistics. That followed a year-on-year gain of 0.8 percent in December. The figures are skewed by the fact that the long Chinese Lunar New Year holiday, when prices typically rise, occurred in January last year but falls in February this year. The January producer price index declined 1.4 percent – a slight improvement from December but a continuation of three years of deflation at the factory gate. "With imbalances between supply and demand set to persist, we doubt China's deflationary pressures will fade any time soon," Zichun Huang, China economist at Capital Economics, told Reuters. In the latest month, food prices dropped 0.7 percent on lower pork and egg costs, but fresh vegetables and fruits rose. Core inflation, which excludes food and fuel prices rose 0.8 percent in January.

Shanghai Targets Offshore Finance Expansion

Shanghai's financial industry last year contributed nearly 16 percent to the city's economy. City officials said the value of the industry last year rose 9.7 percent from a year earlier to 898 billion yuan (US$130 billion). Municipal authorities told a press briefing that priorities for the sector under the 15th Five-Year Plan (2026–30) include creating a more international market and further opening offshore financial services to underpin global use of the yuan. Officials also pledged to improve cross-border programs to connect mainland and offshore equity, bond and swap markets, and to encourage foreign companies to set up headquarters in the city. Shanghai will also enhance its participation in international reinsurance and shipping insurance.

China a Net Winner in Latest MSCI Index Shuffle

Chinese stocks had their biggest net additions – largely tech companies -- to MSCI indexes in three years, Bloomberg News reported. The US-based provider of indices on global equities, fixed income, real estate and other markets, added 37 Chinese companies and removed 16 from its Global Standard Indexes, Among the new entries are SenseTime, Anji Microelectronics Technology, self-driving technology provider Pony.ai and quantum information products maker QuantumCTek. Removals include Fosun International, China Vanke and Great Wall Motor. The net 21 MSCI gain gives investors who follow such benchmarks wider investment opportunities in Chinese stocks and may influence institutional investment. "This increase in weight could be the beginning of a trend for some time," Jun Bei Liu, co-founder and lead portfolio manager at Ten Cap Investment, was quoted as saying.

US Jobs Growth Beats Forecasts

The US in January added 130,000 nonfarm jobs to its economy last month, sending the nation's unemployment rate down to 4.3 percent from 4.4 percent in December. Both figures were better than market forecasts. The good news was tempered by Bureau of Labor Statistics revisions showing the economy in 2025 added 181,000 jobs instead of the previously reported 584,000.

Employment figures, along with inflation, are key factors in Federal Reserve interest rate decisions.

Corporate

Dutch Court Leaves Wingtech-Nexperia Dispute Unresolved

A Dutch court ordered further investigation into claims of mismanagement at chipmaker Nexperia, dealing a blow to Chinese parent Wingtech by allowing a Dutch-appointed administration to stay in place, Reuters reported. The decision leaves the long-running dispute between Nexperia and Wingtech over corporate governance unresolved. Dutch authorities took control of Nexperia last year in an action spurred by a new US ban on subsidiaries of blacklisted companies like Wingtech. The Chinese chip-packaging arm is seeking to replace European-made wafers with domestic Chinese alternatives.

EU Approves Google's $32 Billion Wiz Deal

The EU approved Google's US$32 billion acquisition of cybersecurity startup Wiz, clearing the Alphabet unit's largest-ever takeover and strengthening its push into cloud security. The EU Commission said Tuesday the deal would not significantly harm competition in the bloc. Regulators concluded that customers would retain credible alternatives in cloud infrastructure services, noting that Google trails Amazon and Microsoft in market share. Google announced the all-cash deal in March 2025, aiming to bolster its cloud security capabilities amid rising demand driven by artificial intelligence. Wiz's cybersecurity services operate in the US, the UK and Israel.

Pony.ai, Toyota Begin Robotaxi Mass Production

China's self-driving company Pony.ai, Toyota China and partner GAC announced the start of mass-production of Toyota's BZ4X robotaxi, marking the transition of robotaxis from pilot programs to large-scale manufacturing and commercial operations. The three partners plan to deploy a fleet of 1,000 robotaxis this year for use in major Chinese cities like Beijing, Shanghai, Guangzhou and Shenzhen. Globally, Pony.ai plans to expand its robotaxi fleet to over 3,000 vehicles by the end of 2026.

CATL Issues Green Tech Bonds

Contemporary Amperex Technology (CATL), the world's biggest maker of car batteries, issued a tranche of five-year "green tech innovation" bonds to raise 5 billion yuan (US$725.5 million). The bonds carry a coupon rate of 1.7 percent. Proceeds will be used for project construction and debt repayment.