China Tech Splits Sharply: Xiaomi Surges on Margin Relief as Baidu Craters

The single-factor 'China tech' trade is breaking down. Xiaomi advanced after its second-quarter results showed the feared compression in smartphone economics moderating, validating the argument that its ecosystem and EV optionality are being underwritten by a stabilising core hardware business. At the opposite pole, Baidu cratered and China Unicom Hong Kong slid, reflecting company-specific concerns around monetisation and capital intensity that no longer benefit from an indiscriminate index bid. The more strategically consequential development is the Financial Times report that Nvidia's H200 accelerators are reaching China in small shipments. Even at limited volume, this speaks to the porousness of the export-control perimeter and to genuine, unmet Chinese demand for frontier compute. If shipments scale, it is incrementally positive for Nvidia's addressable market and for Chinese model developers, but it also raises the probability of a tightening policy response in Washington. Investors should size Chinese technology exposure at the single-name level, with a clear view on whether each business is a beneficiary or a hostage of the compute supply chain.