Sinica · China
TIER 4 Sat, 7 Jun 2025 20:54:16 +0000
Well, that was a head-snapping about-face.
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Well, that was a head-snapping about-face.
No, I'm not talking about the very public break-up of Donald Trump and Elon Musk this week.
As fascinating as that was to watch, it was the hastily arranged call between Xi Jinping and Donald Trump, which took place on Thursday, that really got my attention over the past few days.
Just last weekend, I outlined how the US-China trade de-escalation announced in Geneva on May 12 appeared to be breaking down before our eyes.
And while we'd heard all the rumors that a call might be imminent, I had low expectations that the two leaders could have a genuine meeting of the minds - and get trade talks back on track.
But Thursday 's call seems to have done just that - at least for now - with Donald Trump acknowledging the "complexity" around "rare earth products," as he called them.
While we still don't know the exact content and tenor of the call, according to the official (Chinese) and unofficial (US) readouts, things seem to have gone quite well.
My initial guess, judging from Trump's social media post about the call, was that Xi Jinping was able to explain the process that the Chinese side is undertaking - i.e. starting to review applications for sales of rare earth magnets to US end-users.
As I've said before, the reviews of the applications will take time - so I thought Xi was perhaps able to get some leeway from Trump for more processing time, and that the US would put a hold on recent and future retaliations for perceived Chinese intransigence on the export control issue.
After the call, Trump even said that he welcomes Chinese students to study in the US - so hopefully expectations between the two sides are more aligned at this stage.
My colleague Trey McArver and I talked about the simmering misperceptions on both sides and the significant upside surprise from the call on this week 's Trivium China podcast.
But then, there were even more positive developments on Friday and Saturday.
First, on Friday, Reuters scooped that China has now issued temporary rare earth export licenses to suppliers of the top three US auto manufacturers - valid for six months, to presumably buy some time for formal licenses to be approved.
Then, Donald Trump announced that the next round of US-China trade negotiations will begin on Monday in London - as the two sides look to accelerate progress on the talks.
Promisingly, the US commerce secretary will be part of the talks - presumably indicating that both sides' export controls will be in play for a larger trade bargain, beyond just the tariff issue.
Separately, on Saturday, MofCom said that it is willing to establish a green channel for qualified applicants looking to sell rare earths to EU companies, so those businesses don't become collateral damage of US-China trade tensions.
So while the trade truce remains fragile - and the clock is still ticking on the 90-day window, after which tariffs are supposed to go back to their pre-May 12 levels - both sides now seem to be putting their best foot forward.
Given how quickly things seemed to be spiraling downward earlier this week, I 'll take this as a big win for stabilization between the two countries, for now.
Afterall, in this environment, we have to take any positive developments when we can.
Andrew Polk, Co-founder, Trivium China
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Twenty more cities willreceive central government subsidies for urban renewal projects, the finance ministry (MoF) announced on Wednesday.
The new cities include top-tier cities such as Beijing and Guangzhou, as well as regional megacities like Tianjin, Suzhou, and Jinan.
These cities are now each eligible for central subsidies ranging from RMB 800 million to RMB 1.2 billion.
Manufacturing conditionsdeteriorated in May, according to the latest PMI data from the stats bureau (NBS) and Caixin released on May 31 and June 3, respectively.
The Caixin PMI dropped to 48.3 - the lowest reading since September 2022 - down from 50.1 in April; the NBS PMI rose to 49.5, up from 49.0 the previous month.
In the NBS print, large manufacturers scored an average PMI of 51.5, while medium and small manufacturers scored 47.5 and 49.3, respectively - underscoring that recent economic pain hasn't been evenly spread.
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On May 30, ESWIN Computing - which develops RISC-V-based chips for the automotive, IoT, consumer electronics, and robotics sectors - submitted its IPO prospectus to the Hong Kong Stock Exchange.
If successful, it would become China's first RISC-V chip company to go public.
Its backers include parent company ESWIN Group, display giant BOE, and the Big Fund - a key state-backed fund that invests in the semiconductor supply chain.
On Wednesday, the Financial Times reported that the China launch of Apple 's AI feature, Apple Intelligence, is being held up by the cyberspace administration (CAC).
Apple partnered with Alibaba to develop this feature, in a bid to manage the geopolitical sensitivities of developing and deploying AI in China.
Despite this, sources told the Financial Times that "geopolitical uncertainties between the US and China" has stalled review at the CAC.
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On Tuesday, Xiaomi announced during its investor day that its NEV business ison track to achieve profitability by Q3 or Q4 2025.
NEV startups typically incur significant early-stage losses due to substantial capital expenditures in manufacturing and R&D, while lacking the production scale and sales volumes needed to bring down unit costs.
So far, only BYD, Tesla, Li Auto, and, more recently, Seres have achieved the scale or margins required for consistent profitability.
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On Friday, 15 government bodies - including the environmental (MEE) and market (SAMR) regulators - jointly released a plan to build a national climate standards system. The system will cover three areas:
Greenhouse gas (GHG) measurement, verification, and monitoring
Climate mitigation - including GHG emissions reduction through carbon footprints and market-based mechanisms
Climate adaptation - including standards for climate-proofing infrastructure, farming, and cities
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China and Japan are on the verge ofresolving a major source of trade friction.
In August 2023, China slapped a blanket ban on all Japanese aquatic products, dealing a crushing blow to Japan's seafood exports - nearly half of which went to China.
On May 30, Japanese officials announced that the two countries have agreed on the technical requirements to allow Japan to resume seafood exports to China.
China's customs agency kept things a bit more vague, but also indicated that the latest round of technical exchanges had "made substantial progress."
On Tuesday, Commerce Minister Wang Wentaomet with EU trade commissioner Maroš Šefčovič on the sidelines of a World Trade Organization ministerial meeting in Paris.
Beijing has been pushing hard for a Sino-European reset, but slow progress on a growing number of issues - particularly China's painfully slow export licensing times for rare earth elements (REEs) - has undercut those efforts.
Šefčovič told Wang, "Rare earth and permanent magnets are essential for industrial production…this is extremely disruptive for industry."
The pair "compared figures" on export license timelines and pledged to "come back to this issue once we clarify data from both sides."
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In a notice published on May 30, China 's customs authority (GAC) and agriculture ministry (MARA) formalized a ban on Brazilian poultry imports linked to a bird flu outbreak at a commercial poultry farm, and clarified the scope of the restrictions.
Some context: On May 16, China suspended Brazilian poultry imports for 60 days after Brazil detected its first-ever outbreak of H5N1 highly pathogenic avian influenza (HPAI) in commercial poultry.
The latest customs notice clarifies that the ban extends to processed poultry products originating from Brazil, as well as postal packages and items in personal luggage at airports.
If no further outbreaks are detected by June 19, Brazil can declare itself HPAI-free under global livestock health rules.
As always, it was a busy week in China.
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