Key Highlights from Yesterday's Trading Session (9/14) :

European Commission President Ursula von der Leyen has announced a probe into Beijing’s subsidies for Chinese EV manufacturers ahead of elections next year. She accuses China of excessive subsidies that could allow its EV manufacturers to flood Europe with cheap electric vehicles at the expense of domestic industry and jobs. If she has her way, Chinese EV imports to Europe will face a tariff similar to the 27.5% tariff imposed by the U.S. on imported Chinese EVs. However, the few Chinese EVs currently selling in Europe go for significant premiums to their China showroom prices. Tesla also exports many of its cars made in Shanghai to Europe. The move could also be aimed at encouraging Chinese EV manufacturers to set up shop in Europe.

Geely Auto has agreed to help Indonesia produce a homegrown electric vehicle model in the next couple of years. Geely Auto, one of China’s most established automotive brands and owner of Volvo, Zeekr, and Polestar, will set up a research base in Indonesia and will be supplied with locally sourced nickel - a key material in EV batteries. Indonesia is the world’s largest producer and a key exporter of nickel ore and has signified its desire to bring higher-value segments of the EV industry to its shores.

China last month experienced its largest foreign equity investment outflow in 8 years. Net portfolio outflows by foreign investors hit $14.9 billion in August, accounting for the bulk of the $15.5 billion they pulled out of emerging markets. Chinese bonds also experienced a net outflow of $5.1 billion as Beijing worked to lower interest rates to support its real estate market.

The People’s Bank of China has cut the reserve requirement ratio (RRR) for the nation’s commercial banks by 25 basis points. The move will free up RMB 500 billion ($68 billion) in deposits to lend out that were previously locked up as reserves with the central bank. It’s the second such RRR cut this year and comes after reports that credit creation (i.e. new loans) bounced back in August and inflation went back to a positive reading following July’s bout of deflation.

Yum China, the operator of KFC and Pizza Hut restaurants in China, has laid out its expansion plans for the year. The company will aim for a net store addition of 1,600 for 2023 and target 20,000 total stores by 2026. They will spend between $700m and $900m in capital expenditure for the entire year and return $3 billion to shareholders in the form of dividends and buybacks in the next 3 years.