Finance Morning | October 12, 2026 — China Issues Plan on New Quality Productive Forces as KOSPI Slumps 3.65%

📊 Today's Asian Markets

Note: Japanese markets were closed for a public holiday; the Nikkei 225 reflects the previous trading day's close.

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1. 【Top Story】China issues plan on developing new quality productive forces, with 19 key measures

Source: Caixin

The Central Committee of the Communist Party of China and the State Council have issued the "Opinions on Developing New Quality Productive Forces," laying out 19 key measures across five areas: advancing scientific and technological innovation, deepening the integration of technological and industrial innovation, promoting innovation in development models, advancing institutional and mechanism innovation, and improving talent work mechanisms.

CSRC Chairman Wu Qing chaired a symposium with experts on capital markets and financial conditions. Experts suggested strengthening market-stabilization mechanisms, expanding patient capital, encouraging qualified listed companies to increase dividends and buybacks, optimizing listing rules, tightening trading supervision, and studying and reserving more incremental policy tools.

At a State Council Information Office briefing, the Ministry of Human Resources and Social Security said 10.52 million urban jobs were created in the first nine months of the year, meeting 87.7% of the annual target, with an average surveyed urban unemployment rate of 5.2% in the first eight months, and that the employment situation is broadly stable. It will step up efforts to stabilize employment in labor-intensive industries.

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2. China's four main A-share gauges fall; banks and media buck the trend

Source: Sina Finance

On Oct 12, China's four main A-share indices all closed lower. The Shanghai Composite closed at 3,797.24, down 0.43%; the Shenzhen Component at 12,384.87, down 2.03%; the ChiNext Index at 2,963.82, down 2.61%; and the STAR Composite at 1,683.3, down 2.51%.

Film, media and banking sectors led gains, while precious metals, planting and oil & gas sectors declined. The media and entertainment sector stayed strong, with stocks such as Guomai Culture and Guangdian Network hitting the daily limit. Combined turnover on the Shanghai and Shenzhen bourses was 1.54 trillion yuan, down 362.7 billion yuan from the previous session, with more than 4,300 stocks falling.

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3. Harbin Pharmaceutical responds to president's detention, says cause unclear

Source: East Money

Harbin Pharmaceutical Group Co., Ltd. (600664.SH) said in an Oct 12 filing that it had recently received a "Notice of Case Filing" and a "Notice of Detention" from a relevant supervisory commission concerning its director and president, Lu Chuanyou. The filing did not disclose the specific reason for the case or the level of the investigating body, saying only that the company has made proper arrangements for related work and that the chairman, other directors and senior executives are all performing their duties normally, with the board operating normally and production and operations normal.

Asked about the matter, a board-secretary hotline staffer told a reporter calling as an investor that the company does not yet know the specific reason for the case, saying "we have also been following up" and that "the company's operations have not been materially affected," adding that further developments and results will be disclosed promptly in line with information-disclosure rules.

Public records show Lu Chuanyou was born in 1962, now 64 years old, and was appointed president in December 2023, with a term running to Dec 26, 2026. The 2025 annual report showed his pre-tax compensation for the period was 2.9668 million yuan, and that he holds no company shares.

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4. CreditEase placed under investigation; controllers among those held

Source: Sina Finance

After CreditEase Group sent a targeted "apology letter to customers of fixed-income-like products" via its Ruicheng and Yiren Youxuan apps on the evening of Oct 11, the Chaoyang Branch of the Beijing Municipal Public Security Bureau issued a police notice on Oct 12 saying CreditEase has been placed under investigation.

The notice said the branch has opened an investigation into suspected illegal and criminal activity by CreditEase-related companies. The actual controllers, surnamed Tang (male, 53) and Zhao (female, 51), and several other suspects have been placed under criminal coercive measures. To fully clarify the case and recover losses, the police asked investors to register their claims through three methods.

Yicai learned from various CreditEase investor groups that investors are currently registering claims through the three methods listed in the police notice.

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5. Asia-Pacific shares mixed; Hang Seng closes up 0.25%

Source: JRJ

On Oct 12, major Asia-Pacific stock markets all closed, with 4 of 11 main indices gaining and 7 falling, reflecting a weak overall market mood.

Malaysia's FTSE index (+0.59%), Singapore's Straits Times Index (+0.30%) and the Hang Seng Index (+0.25%) led gains; South Korea's KOSPI (-3.65%), the ChiNext Index (-2.61%) and Indonesia's Jakarta Composite (-2.59%) led declines. In mainland China, all indices closed lower, including the Shanghai Composite, the Shenzhen Component and the ChiNext Index.

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6. South Korea's two main indices slump; KOSPI posts biggest one-day drop in about a month

Source: Aju Business Daily

South Korea's stock market faces a test of expectations for a return to 7,700 points. After the combined net-profit forecasts for Samsung Electronics and SK Hynix for this year were cut by more than 15 trillion won within a month, attention has shifted to the sustainability of future earnings growth.

According to financial data firm FnGuide, as of Oct 8, the consensus net profit for Samsung Electronics this year was 302.9573 trillion won, down 17.6076 trillion won (5.49%) from 320.5649 trillion won a month earlier, while SK Hynix's forecast rose 2.2624 trillion won (0.89%) to 256.3226 trillion won. Their combined net-profit forecast fell from 574.6251 trillion won to 559.2799 trillion won, a drop of 15.3452 trillion won (2.67%).

Samsung said on Oct 8 that its preliminary third-quarter operating profit reached 107.4 trillion won, a quarterly record, but its shares weakened after the release. Daishin Securities analyst Lee Kyung-min noted the KOSPI's 12-month forward price-to-earnings ratio has fallen to 5.1 times. The market sees the results of Dutch chip-equipment maker ASML on Oct 14 and Taiwan's TSMC on Oct 15 as key variables for global semiconductor demand and capex trends.

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7. Breakfast briefing: Gold hits one-week high; oil supported by hurricane and US-Iran tensions

Source: Sina Finance

In early Asian trading on Monday (Oct 12, Beijing time), spot gold traded around $4,186.42 an ounce, supported by dip-buying after touching a one-week high of $4,207.57 on Friday, as traders weighed the possibility of further Fed rate hikes. US crude traded around $92.37 a barrel, lifted as Hurricane Isaias approached the northern Gulf of Mexico and oil companies shut in more than 70% of US offshore crude output, while the US-Iran situation remains uncertain.

US stocks closed higher on Friday, with the three main indices up both for the day and the week: the Dow rose 0.83% to 51,654.95, the S&P 500 rose 0.59% to 7,811.51 and the Nasdaq rose 0.64% to 27,366.17. This week, major banks including Wells Fargo, Goldman Sachs, Citi, JPMorgan, BofA and Morgan Stanley report earnings. Analysts expect S&P 500 companies' overall profit for July to September to rise 30.6% year on year.

University of Michigan data showed US consumer sentiment worsened in October, with the short-term expectations gauge falling to a record low. SpaceX agreed to acquire a nationwide portfolio of low-band spectrum assets, a direct challenge to US wireless carriers, sending T-Mobile US, AT&T and Verizon down 8.8% to 13.3%. Apple fell 1.1%.

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8. BofA: The best move for the market right now might be a Fed rate hike

Source: Jin10

In his latest "Flow Show" report, Bank of America strategist Michael Hartnett offers a counterintuitive judgment: the bond market is ending the bubble, and another Fed rate hike might even become a force supporting the market.

His core logic is that the market's toughest problem right now is not short-term rates but persistently rising long-term US Treasury yields. If the Fed delays action, bond investors may keep demanding a higher term premium, pushing long-end yields further up and ultimately forcing financial conditions to tighten on their own. Hartnett argues that if the Fed hikes in October, signaling a willingness to act early against inflation risks, long-end yields could instead stabilize.

Over the past week, the US 10-year Treasury yield briefly rose to 5.36%, and the 30-year yield hit its highest level since 2002. As selling intensified, the market began discussing the possibility of the 10-year yield heading toward 6%.

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9. Goldman Sachs: AI is reshaping China's stock market; foreign investors still notably underweight

Source: CNFOL

A Goldman Sachs report shows that since the "DeepSeek moment" in early 2025, Chinese AI-related listed companies have created nearly $5 trillion in market value through share-price gains and IPOs, with price gains contributing about $2.8 trillion and IPOs about $2 trillion. AI stocks now account for 42% of combined A-share and H-share market value and 57% of turnover, while international investors' allocation to Chinese AI stocks remains clearly low.

On fundamentals, Chinese AI companies' expected 2023-2028 earnings-per-share CAGR is 16%, versus just 4% for non-AI firms. Chinese AI companies are worth about $7.6 trillion, about 10% of global AI market value, 24% of revenue and 14% of capex.

Goldman divides the opportunity into two main lines: export-oriented AI firms, covering more than 360 listed companies worth about $1.7 trillion; and domestic-demand-driven AI leaders, covering more than 880 companies, worth about $3.2 trillion. It also updated a 50-stock "China AI Select" portfolio and noted the significant underweight in foreign allocations.

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10. Trump says Russia-Ukraine in an "energy ceasefire"; Iran warns over Hormuz

Source: Sina Finance

According to a roundup in Sina Finance's "Finance Morning Brief," US President Donald Trump said on Oct 11 that, effective immediately, the Russia-Ukraine conflict had entered an "energy ceasefire." Ukrainian President Zelensky responded the same day that the "energy ceasefire" was news to him too, adding that if Russia agreed to an energy ceasefire, Ukraine would agree.

On Iran, the naval force of Iran's Islamic Revolutionary Guard Corps announced on the 11th that all ships turning off navigation and identification systems in the Strait of Hormuz would be treated as "hostile targets." Iran's Supreme National Security Council secretary Mohsen Rezaei said on the 11th that the US has accepted some of Iran's conditions for reopening the Strait of Hormuz, but the situation regarding other conditions remains unclear.

Domestically, four Chinese authorities including the Ministry of Industry and Information Technology jointly released on Oct 10 a draft notice on strengthening management of automotive product innovation, R&D and testing, which sets requirements for key structural parts such as braking systems, reliability and durability validation, and design features such as hidden door handles and zero-gravity seats.

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