CNBC’s The China Connection Newsletter: Wall Street dips again.

Hello, I’m Evelyn. I am writing to you from Beijing. Welcome to the latest edition of The China Connection. This is a snapshot of what I’ve seen and heard from local businesses.

China has long wanted global investors’ money to boost the dominance of its domestic stock market. Giving foreigners access did not happen overnight. Why are Wall Street firms still trying?

Global investment firms are eyeing not only mainland Chinese tech stocks but also millions of wealthy potential clients.

Mainland China, with more than $125,000 in bank assets, has a combined wealth of $27 trillion, according to financial analysis firm Crisil Coalition Greenwich. And the number of billionaires has soared from 1 million a decade ago to nearly 4 million.

Immediately after receiving approval from the Chinese government to establish a wholly owned securities company, cityCEO Jane Fraser will open the U.S. bank’s annual China conference in Shanghai this week. The company became the latest U.S. financial company to benefit from China’s promise to approve applications from all foreign financial institutions to do business in China after the September summit between President Trump and President Xi.

Also, Citi’s China conference will be headlined by former Vogue editor-in-chief Anna Wintour. Condé Nast did not respond to a request for comment.

“The environment is much more open than it was 10 years ago, but it remains highly regulated,” said Nuno Cordeiro, head of wealth management, and Fabio Jeng, senior product manager, wealth management at Crisil Coalition Greenwich.

They pointed out that compared to past years, the downturn in the real estate market has also increased the demand for diversification and advisory services.

“The question today is no longer whether foreign companies can participate, but whether they can generate sufficient scale and profits within their constraints,” they said in an email. “As a result, most successful strategies combine a strong local presence with partnerships that provide access to national distribution.”

franklin templetonChinaAMC, which manages $1.8 trillion in assets, and ChinaAMC, which manages more than 3.1 trillion yuan ($462.5 billion), on October 28 signed a strategic partnership to share market insights and jointly develop products.

They are already working on developing co-branded ETFs across their Hong Kong, US and European fund structures.

This transaction goes both ways.

“Just as many foreign investors are interested in investing in China, Chinese investors are also looking for global investment vehicles,” Sherry Dai, managing director of global capital at China AMC, told me.

The Hong Kong-listed ETF, launched on Sept. 29 with Franklin Templeton, holds about 40% of U.S. stocks and 60% of Hong Kong-listed stocks.

Such products could meet the Chinese government’s criteria to allow mainland-based investors to participate within six to 12 months, Dai said. Her company also launches products for Brazilian investors to allocate to Chinese tech companies.

Since early 2025, DeepSeek’s AI breakthrough and other Chinese technological advances have attracted the attention of foreign investors. U.S.-based Round Hill Investments includes Chinese stocks in its thematic ETFs focused on humanoids, memory chips and other technologies, but exposure to mainland-listed stocks can also come through derivatives.

Performance didn’t help. Chinese stocks have fallen sharply this year, significantly underperforming U.S. stocks.

Foreign financial companies are also struggling in terms of business in China. In the second half of 2025, black rock decided to close down the three-year-old China Innovation Fund, which had net assets of only $31.7 million. Vanguard sold its stake in a mainland Chinese mutual fund operator to majority owner Ant Group in 2023.

Peter Alexander, founder and managing director of Z-Ben Advisors in Shanghai, said part of the challenge lies in “micromanagement” from headquarters outside China.

“Global Group’s failure in China was solely due to its inability to make the necessary adjustments to how to best operate for the Chinese market,” he said.

Capital controls, state-led institutions, and communication with investors at different levels make mainland China’s stock market very different from the U.S.

Nation-linked funds, known as “national teams,” often step up stock purchases to stem market declines.

Last week, amid reports of a moratorium on new IPOs in China, a senior financial regulator warned in a speech that excessive concentration of capital in high-tech sectors could increase leverage and crowd out traditional industries.

Headlines like this could support short-term gains in the stock market. But for long-term investors, they may not be able to buy right away, and a jump in prices increases the risk of “buying at the ceiling,” said Liquan Ren, a quantitative manager at U.S.-based fund management firm WisdomTree.

High volatility means investors can only own a certain amount of Chinese stocks knowing the risks, he said. Markets “become a means of transaction, and that’s not necessarily a good thing for China.”

“Ultimately the market needs to understand that. There needs to be punishment from the market.”

China expands overseas mining interests and strengthens control over important minerals

China’s overseas mineral procurement in the first three quarters of this year was the highest in a year since at least 2018, according to Rhodium Group. This would further increase the existing rare earth influence that Beijing has used in trade disputes with the United States. China is also demanding lower tariffs before it buys more U.S. agricultural products.

Changes the Democratic midterm elections will have on US-China relations

Analysts said the Democratic Party’s seizure of power from Republicans in Congress increases the risk of escalating tensions between the United States and China over Taiwan, as well as intensifying high-tech competition. According to Robert Kagan, a senior fellow at the Brookings Institution, Russia and China may feel the need to test the United States if they sense that President Trump is “withdrawing.”

Moonshot asked Europe for access to NVIDIA Blackwell amid U.S. restrictions on China, sources told CNBC.

A deal is being discussed this year for Moonshot to lease capacity from NeoCloud, which hosts Nvidia’s graphics processing units (GPUs), at facilities in Europe, four people familiar with the matter said. Meanwhile, in Asia, reports of prison sentences in South Korea reflect the intensifying competition for AI chip talent.

November 10: Trade data

November 10th to 13th: City China Conference in Shanghai and Shenzhen

November 13: Extended Singles Day Shopping Festival ends

November 16: Retail sales, industrial production, fixed asset investment