China Petroleum & Chemical Corporation (HKG: 0386, "Sinopec") has initiated the drilling of Project Deep Earth 1-Yuejin 3-3XC Well ("the Well") on May 1 in the Tarim Basin, Xinjiang Uyghur Autonomous Region. With a design depth of 9,472 meters, it will be the deepest oil and gas well in Asia and a breakthrough of milestone significance in China's ultra-deep oil and gas exploration, which now has world-leading technological and equipment capabilities.

Located in the Shaya County of Aksu Prefecture by the edge of the Taklamakan Desert, the Well has completed stratigraphic sealing of the upper 1,500 meters in only four to five days. The drilling operation, carried out by Sinopec Oilfield Service Corporation, is estimated to reach the carboniferous strata in 21 days, which will set a new record in the region.

The extensively difficult and challenging drilling operation is also setting a new Asian record for horizontal displacement in ultra-deep drilling. Wells with a depth of over 9,000 meters are defined as ultra-deep wells, which is the most challenging field of oil and gas engineering technology development. The depth of the Well is 624 meters higher than Everest. In addition to the common bottlenecks of complex geological structure and high temperature, pressure, and hydrogen sulfide content, the well has also been designed for a 3,400-meter horizontal drilling distance, which brings up new issues such as difficult casing and the formation of cuttings bed in horizontal depth.

Sinopec Northwest China Petroleum Bureau has innovatively adopted ultra-deep and large displacement technology that accesses the rich oil and gas resources without damaging the wetland natural reserve. Equipped with "a pair of eyes", the high-temperature and high-efficiency directional technique transmits signals from the vertical depth of 7,200 meters enabled by the high-precision drilling measurement and control system.

Sinopec aims to launch pilot ultra-deep exploration projects and push the limits of depth through innovation-driven development of deep marine facies geological theory and exploration technologies. Through its self-developed rotary geo-steerable drilling system and the high-temperature and high-pressure logging equipment, Sinopec has achieved leapfrog development of fast drilling in high precision. As of now, the Shunbei oil and gas field of the Shendi-1 Project has 49 oil and gas wells that are deeper than 8,000 meters, and multiple wells have set new Asian records.

China's the world's second-largest economy and the world's largest banking industry -in terms of assets. The size of its banking system owes to its status as the world's largest exporter. The need to enable money transfers to China is another factor. Her state-owned banks are among the largest in the world. Here're the top five banks in terms of strength, services offered, and awards received:

Industrial & Commercial Bank of China (ICBC): On The Asian Banker's strength list, which ranks banks based on the basis of their balance sheets, ICBC is ranked seventh among Asian Pacific banks. ICBC is a specialist commercial bank that was declared the world's largest bank by assets in 2017 and 2018; it ranked high on Forbes' list as the largest global public company in 2019. They were ranked top in The Banker's Top 1000 World Banks from 2012 to 2019. In other countries, the bank has almost 400 subsidiaries.

With a market capitalization of more than $21 billion, ICBC was the world's largest IPO at the time. It was the first firm whose shares were traded on both the Hong Kong and Shanghai stock exchanges. Their most recent net income was around CNY 300 billion, and their assets are valued at China over CNY 27 trillion. ICBC offers a variety of services to both people and businesses, with a particular emphasis on business loans to manufacturers, power companies, retailers, and other industries. ICBC was voted Finance Asia's Best Bank in China in 2019 and has received several other accolades.

Bank of China (BOC): BOC is the second oldest bank in mainland China and ranks tenth among Asian Pacific banks on The Asian Banker strength list. It was established in 1912 to take the position of the Imperial Bank of China. It is one of the four major state-owned banks in China. Its most recent recorded net income was above CNY 190 billion, and their assets exceeded CNY 21 trillion. At the end of 2017, it was the world's fourth-largest bank in terms of assets. BOC is a significant loan provider in the country, offering a wide range of services to both people and companies. In addition, the BOC is permitted to issue banknotes in two Chinese Special Administrative Regions. With operations in 57 countries, it is the most global of China's banks. They were the first large bank in the United States to accept renminbi (Chinese money) assets. BOC has earned several awards, including Best RMB Clearing Bank by The Asian Banker and Best FIG Issuer by Global Capital China.

Agricultural Bank of China (ABC bank): ABC Bank is the world's third-largest lender, with around 25,000 outlets globally. It was founded in 1951. Their most recent net income was above CNY 202 billion, and their assets exceeded CNY 22 trillion. ABC bank began as a specialty bank lending to small businesses in rural China, but it now offers a wide range of consumer and corporate services. They serve 300 million consumers and 3 million commercial clients. They also have a Treasury Operations division that deals with money market or repurchase transactions, debt instrument investments, and derivative holdings. ABC has won several awards, including corporate social responsibility, company culture development, and assistance to small and medium-sized enterprises.

China Construction Bank (CCB): CCB is ranked sixth in the Asian Banker strength rating among Asian Pacific banks. CCB had substantial growth in the early 2000s and was the world's second-largest bank by market capitalization in 2015. Their most recent net income was above CNY 255 billion, and their assets exceeded CNY 23 trillion. More than 15,000 branches and subsidiaries in Luxembourg, South Africa, South Korea, the United States, and Australia offer various consumer and commercial services. They've won several awards, including Asia Money's Best Domestic Bank in China, Global Finance's Best Corporate Lending, and Global Finance's Best Mortgage Loans Bank.

Bank of Communications: Bank of Communications Co., Ltd., established in 1908, is one of China's oldest banks and one of the country's first note-issuing institutions. In June 2005, BoCom was listed on the Hong Kong Stock Exchange and listed on the Shanghai Stock Exchange in 2007.

For the 12th year in a row, BoCom was recognized a "Fortune Global 500" corporation in 2020, ranking 162 in terms of operational revenue and 11th in terms of Tier 1 Capita. Today, the Bank of Communications is one of China's top five leading commercial banks, with over 2,800 branches in 80 major cities.

Hainan Baling Chemical New Material Co., Ltd., a subsidiary of China Petroleum & Chemical Corporation, has launched production of its styrene-butadiene copolymer (SBC) project in Hainan, China, which will reach an annual production capacity of 170,000 tons. Sinopec now has the largest world's largest production capacity of SBC plants. Baling New Material and Sinopec Hainan Refining & Chemical Co., Ltd. invested 1.924 billion yuan in the Hainan Baling project (USD 279.74 million). The project's SBC plant produces 170,000 tons of SBS and SEBS products annually, including 120,000 tons of SBS products and 50,000 SEBS products. The plant has 13 units including refining, polymerization, coalescence, recycling, auxiliaries preparation, and post-treatment, as well as supporting production and public facilities.

TPE (thermoplastic elastomer) is a class of copolymers that can be plasticized at high temperatures and has rubber elasticity at room temperature, and SBC is a type of TPE, the products of which include SBS, SEBS, SIS, and SEPS, which are widely used in shoes, asphalt modification, resin modification, adhesives, food packaging, medical equipment, sports equipment, automotives, and consumer electronics.

The Project uses Sinopec's self-developed SBS and SEBS full solution sets, including a clean manufacturing method that can create SBCs of varying grades and performances to fulfill customers' product customization needs. In the meanwhile, it's using Hainan Refining & Chemical's styrene and butadiene, Baling New Material's new technologies, and the Hainan Free Trade Port to minimize raw material and transportation costs and expand the industrial chain to optimize revenue. The Initiative will export SBC goods to developing European, Southeast Asian, and South Asian markets.

Sinopec has advanced synthetic rubber R&D in China for more than five decades. In the 1970s, Yanshan Petrochemical Research Institute developed butyllithium preparation and SBS polymerization technologies. Sinopec is one of only three firms in the world—and the only one in China—capable of industrial production of novel SEPS products using environmentally friendly technology. Baling New Material's SEPS facility, with a 20,000-ton annual production capacity, began production in August 2017.

With exclusive SBC technologies and proprietary intellectual property rights, Sinopec is now taking a technologically leading position in the world for the development of SBC technologies and products.

China is the world’s second-largest economy after the United States, making the market a potential opportunity for traders looking to diversify their trades—especially now as the S&P 500® Index struggles to break out of bear market territory. While the U.S. market is bearish, China has been enjoying a healthy rally, with Hong Kong’s Hang Seng Index* soaring 50% in the three month period ending January 31. Here are some potential tips for traders looking to capture yield from China’s post-COVID recovery.

China’s Policies Supporting Market Growth Could Help Maintain Bullish Momentum

After three years of lockdowns meant to curb COVID cases, China officially dropped all COVID-related restrictions and reopened the economy. The reopening triggered an immediate rally across Chinese stocks last year that continued almost unabated until the end of January, when it began to level off.

But China’s economy has yet to recover its full pandemic era losses, which has some analysts optimistic that the rally still has plenty of room to grow.

The nation’s retail and travel sectors are anticipated to see the strongest growth this year as Chinese consumers look to spend a significant amount of savings accumulated over three years of repeated lockdowns.

Keep a Close Watch on U.S.-China Relations

While China’s economy has a strong positive outlook, momentum could be stymied if the simmering tensions between China and the U.S. boil into trade sanctions. The recent spy balloon debacle may have been the most public display of escalating tensions but the two nations have been battling over multiple geopolitical issues lately, which has traders cautious.

That includes concerns that China may choose to provide material support to Russia in the Ukraine invasion—though Beijing has said it’s committed to peace talks. Another source of tension is the issue of Taiwan’s independence and the U.S. military presence there.

In February, U.S. officials said they were planning to quadruple the number of U.S. troops stationed in Taiwan where they would help train the Taiwanese military. The expanded military presence is an effort to fend off a possible Chinese attack on the island nation, which China views as a breakaway province that should be brought under Beijing’s control.

While the countries continue to butt heads, neither has moved toward sanctions just yet but if they do, the impact on the stock market could be substantial, so traders may want to be ready to switch to a bearish strategy if that happens.

Seek Exposure to Chinese Stocks and Potentially Magnify Results by Trading Leveraged ETFs

Many traders opt for ETFs, rather than directly trading stocks on the Hong Kong Stock Exchange because it’s a way to gain exposure to Chinese securities that traders otherwise might not be able to trade outright due to foreign investment restrictions.

The Direxion's Daily FTSE China Bull (YINN) and Bear (YANG) 3X Shares, seek daily returns that are 300% or -300%, respectively, of the return of the FTSE China 50 Index*, giving traders a chance to not only gain exposure to the market but potentially magnify the performance of each trade they make.

The FTSE China 50 Index is made up of the 50 largest Chinese companies with the most liquidity currently trading on the Hong Kong Stock Exchange.