China opens the month strong in the trade, chip and financial markets.
Shares of Chinese companies linked to cross-border transactions rose after the Ministry of Commerce said that the yuan was being used to pay fees for passage through the Strait of Hormuz. This news sent traders straight to names associated with cross-border money transfers.
In Shenzhen, CNPC Capital, the financial services arm of China National Petroleum Corporation, jumped as much as the daily limit of 10%. Lakala Payment rose by 7.9%. Shenzhen Forms Syntron Information rose 9.4% before later giving up part of the gains.
Cross-border payments rise as the use of yuan fees for market bets increases
It was China to push The yuan has been more widely used in trade for years, and this update has given the market something specific to trade on. This is why CNPC Capital, Lakala Payment, and Shenzhen Forms Syntron Information all rose in the same session.
The second major part of the story came from SMIC, China’s largest chipmaker, which reported a 16% increase in 2025 revenue from last year to a record $9.3 billion.
Analysts from LSEG estimate that revenues could reach $11 billion in 2026.
Moore Threads, which wants to compete with Nvidia, said 2025 revenue should range between 1.45 billion yuan and 1.52 billion yuan, or about $209.8 million, which would mean growth of 231% to 247% from the previous year.
New US restrictions on Nvidia chips for China have also prompted Beijing to encourage local companies to buy local alternatives. Huawei was one of the companies that intervened in this field. But the gap remains. Chinese chips still lag behind American products in terms of performance.
Chip sales jump as the central bank withdraws money from the system
Even with record revenues, China’s chipmakers still lag behind their rivals in the United States, South Korea, Europe, and Taiwan when it comes to advanced technology.
US export restrictions have continued to push Beijing to support domestic technology more. Analysts and the companies themselves are now looking for another step this year, as Chinese tech giants continue to spend on AI infrastructure at home.
SMIC and Hua Hong are still unable to produce the world’s most advanced chips on a large scale like Taiwan Semiconductor Manufacturing Company (TSMC).
The main reason is that they cannot obtain the more advanced tools that ASML manufactures in the Netherlands due to export restrictions. China is trying to build local alternatives, but this task is difficult because the technology is very complex.
Meanwhile, China’s central bank (the People’s Bank of China) withdrew cash from the financial system for the first time in a year, draining 890 billion yuan, or about US$129 billion, through short-term open market operations.
The central bank also absorbed another 250 billion yuan through longer-term instruments, including outright reverse repurchase agreements and medium-term lending facilities.
Now growth has rebounded at the beginning of the year, and the war in Iran has pushed oil prices higher. This has made the People’s Bank of China more cautious as China inches closer to emerging from a record deflationary period.
More details about the withdrawal are due to come in mid-April, when the bank releases balance sheet data. One major measure is claims on other depository companies, which track lending to commercial banks.
This number had risen for nine consecutive months until February. It also includes structural policy instruments that support lending to targeted sectors, which typically change less frequently from month to month.
To offset some of the drain, the People’s Bank of China resumed purchases of government bonds in October, but those purchases were no larger than 100 billion yuan per month.
After counting all liquidity tools, the central bank depleted a net of more than 810 billion yuan in March, based on an official statement published on Thursday.
