Daily Buzz: 7 May 2025

Top News

US-China trade talks

China's Foreign Ministry said Vice Premier He Lifeng will meet with US officials in Switzerland after US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer announced a meeting with Chinese economic officials to discuss "trade matters." It was the first apparent breakthrough in bilateral trade relations that have been at a standstill since President Donald Trump imposed 145 tariffs on China. Investors have been closely watching for any thaw. Dow Jones futures in the US rose 0.7 percent when the news first broke.

India-Pakistan clashes

The Indian government said it fired artillery at nine sites in Pakistan, including Pakistan-administered Kashmir, in a military operation against what it called "terrorist infrastructure." Pakistan told the BBC that it has shot down at least two Indian jets and a drone, with the nation's prime minister calling Indian strikes an "act of war." Tensions between the two nuclear-power neighbors have risen since last month's attack on Hindu tourists that killed 26 in the flashpoint Kashmir region.

Canada 'not for sale'

Canadian Prime Minister Mark Carney, on a visit to the White House, said he told President Donald Trump that Canada is not for sale and asked him to stop referring to it as the 51st state. Carney, who rode to victory in last month's election on a wave of nationalism triggered by US tariffs and threats to take over Canada, said later that the talks were "constructive." Trump, for his part, said, "We're going to be friends with Canada," which is the second-largest trading partner of the US.

Hiccup in German leadership vote

German conservative Friedrich Merz was sworn in as chancellor on Tuesday, but not without some unexpected drama in what should have been a perfunctory process. In the first vote on his leadership, he fell six votes short of the majority needed, a rebuke unprecedented in modern German history. It took a second ballot to secure him the post. Merz's Christian Democrats have formed a coalition government with the center-left Social Democrats following a February election that revealed deep divisions in the country, with an ultra-right party coming placing second with 21 percent of the vote.

China-EU celebrate 50 years of diplomacy

China and the European Union are celebrating a half-century of diplomatic ties. In an exchange of letters marking the anniversary, Chinese President Xi Jinping called on both sides to remain committed to multilateralism and to oppose unilateral bullying – a reference to US tariffs.

Top Business

China holiday trips, spending rise

Chinese spending and travel during the five-day May Day holiday chalked up gains from a year earlier. Spending rose 8 percent to 180.27 billion yuan (US$25 billion), and domestic trips were up 6.4 percent at 314 million. Xinhua news agency reported that 11 million people –1.1 million of them foreigners – entered and exited the country during the period, a rise of 29 percent.

Slower services sector

The Caixin/S&P Global services purchasing managers' index for March fell to 50.7, its lowest reading since September. Any figure above 50 indicates growth; anything below, decline. China's official survey, released earlier, showed activity in the services sector easing to 50.1, Reuters reported. The Caixin index is considered a better gauge of export-oriented and smaller firms.

China accelerates bond sales

China's local governments issued 3.54 trillion yuan (US$490 billion) of bonds in the first four months of 2025, up 84 percent from a year earlier, as part of Beijing's efforts to underpin economic growth. The Ministry of Finance has also announced new issues of ultra-long special government bonds to support infrastructure spending.

Economy

China markets reopen with gains

China's stock markets posted gains on Tuesday when they reopened after the five-day Labor Day holiday. The Shanghai Composite Index closed up 1.1 percent, while the Shenzhen Component Index surged 1.8 percent, with shares in 4,769 listed firms rising and only 384 declining. Volume was 1.33 trillion yuan (US$464 billion), up almost 15 percent from the last trading day. New policies supporting equities trading are scheduled to be unveiled today.

Gold, oil prices rising

Gold prices rose to a two-week high, with analysts citing a return to safe-haven investment amid global trade tensions and increased buying from China. US Gold futures gained as much at 2.5 percent to US$3,400 an ounce. Oil prices rebounded from recent declines triggered by an announcement of boosted output by OPEC+. Brent futures rose 3 percent to US$62.15 a barrel on signs of increased demand from Europe and China.

Corporate

Nvidia chafes at chip restrictions

Nvidia Chief Executive Jensen Huang told CNBC that it would be a "tremendous loss" if his company were shut out of China's artificial intelligence market, which will likely reach a value of US$50 billion in the next two to three years. The US government has restricted the sale of Nvidia H20 chips to China without a license, leading the company to take a US$5.5 billion quarterly charge.

JD expands offline push

Online seller JD.com accelerated its offline retail strategy with the opening of its first JD Mall in Beijing. The company has opened 20 such malls nationwide, with plans for more locations over the next three years. The malls feature advanced technologies such as 3D displays, virtual reality gear and smart robots to enhance the shopping experience for consumers.

Ford withdraws guidance

Ford Motor Co joined the growing list of US companies either lowering profit outlooks or withdrawing forward guidance amid uncertainty over the effects of sweeping US tariffs on global partners. Ford said it expects a US$1.5 billion hit to operating profit this year from tariffs. "It's still too early to fully understand our competitors' responses to these tariffs," Ford CEO Jim Farley told analysts. Among other companies in the list are General Motors, United Parcel Service, Proctor & Gamble and PepsiCo.