Daily Buzz: 22 May 2025

Top News

AI chip frictions rise

China called US attempts to ban Chinese chips "unilateral bullying and protectionism" that seriously undermine the global semiconductor industry and supply chains. The US Commerce Department said earlier this month that any company using artificial intelligence semiconductors from Chinese companies, including domestic market leader Huawei, would be in violation of US regulations.

At the same time, the US is restricting sales of US-made chips to China. Nvidia Chief Executive Jensen Huang said attempts to control the AI chip market are backfiring on US companies, noting that Nvidia's share of the China market has dropped from 95 percent to 50 percent. "China has 50 percent of the world's AI developers, and it's important when they develop on an architecture that they develop it on Nvidia, or at least American technology," he said.

Meanwhile, Sriram Krishnam, a senior White House policy adviser on AI, brushed aside Huang's concerns and told Bloomberg TV that the Trump administration will maintain efforts to keep advanced AI technology out of China's hands.

Japan exports to US tumble

US tariffs continue to bite major trading partners. Japan reported that its exports to the US in April fell 1.8 percent from a year earlier on a slowdown in automobiles and steel. That widened its bilateral trade surplus 14.3 percent to 780.6 billion yen (US$5.43 billion). Overall Japanese exports rose 2 percent, however, with exports to Asia up 6 percent. Exports to China fell 0.6 percent but imports rose 7 percent.

Japan is currently negotiating a new trade agreement with the US, but analysts have cast doubt on much relief for automobiles, a major export of Japan, which now bear a 25 percent US tariff.

EU parcel-tax criticism

China called on the European Union to uphold fair, non-discriminatory trade rules after Brussels announced a new 2-euro flat tax on incoming, low-value parcels, most of which come from China. Foreign Ministry spokesperson Mao Ning said on Wednesday that Beijing hopes the EU will maintain an open and inclusive business climate for Chinese companies. The tax targets a surge in e-commerce shipments, typically under 150 euros (US$170), from Chinese platforms like Temu and Shein. The US has already revoked the duty-free status of such small parcels.

Talks with new envoy

Ma Zhaoxu, Chinese vice minister of foreign affairs held discussions with David Perdue, the newly arrived US ambassador to China. The talks were described as "candid and in-depth," by China's foreign ministry. "China views and handles China-US relations in accordance with the three principles of mutual respect, peaceful coexistence and win-win cooperation proposed by Chinese President Xi Jinping, and firmly safeguards its sovereignty, security and development interests," Ma was quoted as saying in the statement.

Perdue, a former US senator and now business executive, is considered a hawk on China.

Top Business

Xpeng posts revenue surge

Xpeng, a leading Chinese maker of electric vehicles, announced first-quarter earnings that beat market expectations. Revenue surged 142 percent from a year earlier, narrowing the company's loss to 600 billion yuan from 1.4 billion yuan in the same period of 2024.

Xpeng, which has confronted fierce domestic competition with an array of new vehicle models, said delivered 94,008 vehicles in the first quarter and expects that figure to rise to as high as 108,000 in the second quarter.

Company shares surged 13 percent in New York trading to US$22.25

China, Southeast Asian ties

China and the Association of Southeast Asian Nations finalized the third version of their free trade agreement, adding digital technology, eco-development and supply chain cooperation to the pact. The trade framework underscores China's efforts to increase ties with Southeast Asia, its biggest export market.

Economy

US markets roiled

US Treasury yields spiked, Wall Street stocks fell, the dollar dropped, and gold and bitcoin rose after lukewarm buying at a US government bond auction set off alarm bells and concerns mounted about a Congressional tax-cut and spending bill that would widen government debt.

The 30-year Treasury bond rose above 5 percent to its highest level in two years. The S&P 500 stock index shed 1.6 percent, and the dollar fell 0.6 percent against a basket of other currencies, including the euro and yen. Bitcoin touched a record just shy of US$110,000, and spot gold rose 0.7 percent to a one-week high of US$3,312.77.

The Treasury market is a bellwether of investor confidence in the US. Last week, Moody's downgraded the sovereign debt of the US, citing concerns about a widening budget deficit and sending borrowing costs higher. The US relies on Treasury bond sales to finance its deficit spending.

China electricity use

China's electricity use in April rose 4.7 percent from a year earlier to 772.1 billion kilowatts, according to the National Energy Administration. Electricity use is a key indicator often used to gauge the health and activity of a nation's economy.

Concerns around the world have been raised about whether national grids will be able to meet the huge electricity demands of large data centers using artificial intelligence. Tesla boss Elon Musk told CNBC this week that AI development could run into power-generation problems by the middle of next year.

Corporate

Baidu quarterly earnings

Baidu, a Chinese search engine giant and artificial intelligence company, announced first-quarter revenue rose 3 percent from a year earlier to 32.5 billion yuan (US$4.51 billion). Net profit surged 48 percent to 7.63 billion yuan.

A key driver of growth was a 40 percent increase in non-online marketing revenue, primarily fueled by the company's intelligent cloud business. Online marketing revenue dropped 6 percent. Baidu said monthly active user numbers rose 7 percent to 724 million in March.

Analysts noted that Baidu's ad business is shrinking and the company is having to slash AI-related prices to stay ahead of domestic rivals. Baidu shares traded in New York dropped 4.3 percent to US$85.48.

Humanoid robot hits the market

Shanghai-based AgiBot announced the commercial distribution of its highly anticipated Lingxi X2 humanoid robot, with prices ranging from US$20,000 to US$50,000. Lingxi X2 represents a leap in robotic technology, seamlessly integrating movement, interactive capabilities and operational functions. Its uses range from serving as a security guard to cleaning homes.

Meitu-Alibaba pact

Chinese photo-editing app operator Meitu announced a partnership agreement with e-commerce giant Alibaba that includes the issuance of US$250 million in convertible bonds to an Alibaba subsidiary, the South China Post reported. Meitu said the partnership would cover areas such as e-commerce, artificial intelligence technology and cloud computing. Meitu shares traded in Hong Kong surged 19 per cent on the news.

Google upgrades AI services

Google rolled out general availability for its latest artificial intelligence model Gemini 2.5, highlighting competition with rivals like ChatGPT. The US tech giant also announced deeper integration between Gemini 2.5 and core businesses like Internet browser Chrome. At the same conference, Chinese firm Xreal unveiled its Google Glasses, targeting rivals like Meta and Apple.

OpenAI taps Apple guru

US-based ChatGPT creator OpenAI said Wednesday it will pay US$5 billion in stock for io, a startup co-founded by Jony Ive, to create a new generation of artificial intelligence devices. Ive collaborated with former Apple founder Steve Jobs on development of the iMac, the iPod, the iPhone and Apple Watch.