Weekend Buzz

Top News

China, US move forward on easing trade barriers

China and the US agreed to ease some trade barriers in a quid pro quo whereby China will expedite exports of rare earth minerals and industrial magnets, and the US will ease restrictions on a range of technology exports to China, the Ministry of Commerce in Beijing said. The accord follows high-level talks held in London on June 9 that produced a framework for breaking a stalemate in trade negotiations. Tensions between the world's two largest economies broke out in March when US President Donald Trump slapped tariffs of up to 145 percent on imports from China, and China retaliated with 125 percent tariffs on US imports. Both sides called a 90-day truce in mid-May and rolled back tariffs temporarily to allow for talks. Exports of rare earths and chips relate to non-tariff trade barriers.

US terminates trade talks with Canada, citing digital tax

US President Donald Trump abruptly ended trade talks with Canada and said he will soon announce a new tariff rate for the northern neighbor. The break relates to a dispute over Canada's new 3 percent digital services tax, enacted last year, that will cost US companies such as Amazon, Apple and Google millions when it comes into effect this week. Trump called the tax "egregious."

Top Business

Lithium paradox: prices drop, demand soars

The world's top lithium producers are grappling with plunging lithium prices that have plunged dropped over 90 percent in two years despite surging global demand for the key metal used in electric vehicle batteries and other electronic goods. Demand last year alone surged 24 percent and is likely to grow 12 percent a year for the next decade, according to consultancy firm Fastmarkets.

At a major conference this week, Dale Henderson, chief executive of Australia-based Pilbara Minerals, called the situation frustrating, attributing it to oversupply.

Xiaomi shares surge

Shares in electric vehicle maker Xiaomi surged 3.6 percent to a record in Hong Kong trading on Friday, a day after the company announced that the price for its new luxury YU7 SUV, its second vehicle, will start at 253,000 yuan (US$35,322), undercutting the Tesla Model Y by about 10,000 yuan. Xiaomi reported a flood of pre-sale orders after the announcement.

China's private sector strong and growing

China's private sector comprised 97 percent of all mainland businesses at the end of May, the State Administration for Market Regulation announced. In May alone, private enterprises expanded 5.2 percent from a year earlier. The 185 million privately owned companies now operating in China contribute about 60 percent of the country's gross domestic product.

Ship ahoy for Louis Vuitton

French upmarket-goods brand Louis Vuitton opens a store today in Shanghai's downtown Jing'an District shaped like a luxury cruise ship, aiming to reverse slowing China sales reported earlier this year by parent LVMH. Shanghai has long been a magnet for foreign luxury brands because of its cosmopolitan environment.

Economy and Markets

Chinese bourses propose loosening trading cap on 'risk-alert' stocks

Shanghai and Shenzhen Stock Exchanges are seeking public comment on a proposal to increase the daily price fluctuation limit for "ST," or risk-alert, stocks on their main boards to 10 percent from 5 percent. The change would align them with other main board stocks. Risk disclosure requirements and purchase caps 500,000 shares would remain unchanged.

Galaxy retains lead in ETF holdings

Galaxy Securities maintained its lead in exchange-traded fund holdings on the Shanghai market in May. The firm held a 25 percent share, up slightly from April, thanks largely to inflows from Central Huijin and affiliated institutions into index-tracking products like the CSI 300 and STAR 50 ETFs. Shenwan Hongyuan ranked second with an 18 percent share, with Citic Securities third.

Americans spend less as prices rise

US consumer spending in May fell 0.8 percent from a year earlier on decreased outlays for vehicles, food and gasoline. Spending on financial services, insurance and transportation also dropped, but housing, utilities and healthcare rose.

The Personal Consumption Expenditures price index, an inflation gauge closely watched by the Federal Reserve that strips out certain volatile goods, rose 0.1 percent in May, matching the rise in April. In the 12 months through May, the index was up 2.3 percent. The US dollar weakened further on the data.

Industrial profits slip

China's industrial profits in the first five months of the year slipped 1.1 percent from a year earlier after a drop of 9.1 percent in May. The decline reflects continued pressure from weak demand, falling prices, and market volatility, according to Yu Weining, a National Bureau of Statistics statistician. Profits at state-owned firms dropped 7.4 percent in the first five months, while earnings at private-sector companies recorded a 0.3 percent increase. Foreign-firm profits rose 3.4 percent. Figures from the January-April period, where profits in equipment manufacturing sector rose 7.2 percent year, suggest policy support for core segments is shielding China's industrial base from headwinds.

Deep Dive

Chinese biotech firms look abroad for partners with deep pockets

Deals between global giants and domestic firms with breakthrough drug discoveries are growing. Is China at risk of becoming just a pharma outsourcing engine?

(Click the headline to read the full article.)

Corporate

Innovent receives regulatory approval for anti-obesity drug

Innovent Biologics' mazdutide injection for weight loss was approved by China's National Medical Products Administration on Friday. The green light makes mazdutide the world's first dual GCG/GLP-1 medication, Suzhou-based Innovent said in a press release. Innovent paid an undisclosed sum to secure the Chinese rights to mazdutide from Eli Lilly in 2019. The approval moves Innovent into a market previously dominated by imported drugs from Novo Nordisk and Lilly.

Honor files for IPO on mainland

China smartphone maker Honor filed documents for an initial public offering in the mainland. The Shenzhen company was spun off from Huawei Technologies in 2020 and rose to become the fourth-largest smartphone maker last year. IPO activity is increasing in China as regulators unveil measures to support stock markets and companies seeking to sell shares. Market analyst Deloitte estimates that 50 IPOs in the first half generated 37.1 billion yuan for listing companies.

RemeGen sells drug licensing rights to Vor Bio

Chinese drugmaker RemeGen sold US-based Vor Bio an exclusive license to develop and market Telitacicept, a treatment for autoimmune diseases, outside of China. Under the agreement, Yantai-based RemeGen will receive an upfront payment of US$45 million and stands to benefit from warrants and royalties totaling up to US$4.1 billion. RemeGen said the deal will accelerate Telitacicept's entry into international markets, enhance its global brand value and boost its cash flow.

Shui On Land, Tian An form development venture

Shanghai-based Shui On Land, the flagship property arm of Hong Kong's Shui On Group, and Tian An China Investments formed a joint venture to invest nearly 2.9 billion yuan (US$404 million) to acquire a 50 percent stake in development of a prime site in an urban renewal area adjacent to the Xintiandi commercial and entertainment locality in Shanghai. The project includes residential complexes and villas. Shui On will hold a 30 percent stake in the venture, with Hong Kong-based Tian An holding the remainder.

Toyota's global sales rise for a third month

Toyota said global sales in May edged up 0.3 percent to 840.681 vehicles, the third straight monthly gain, on high demand for hybrids. A 16 percent increase in sales to North American came despite the 25 percent US tariffs on imported vehicles. Also yesterday, Toyota broke ground on a new Lexus-brand electric vehicle manufacturing plant in Shanghai, with production scheduled to begin in 2027.

Jangho wins contract for work on world's tallest building

Shanghai-listed curtain wall contractor Jangho Group said it won a US$280 million contract for work on Saudi Arabia's Jeddah Tower, which will be the world's tallest building when completed at a height of one kilometer. The three-year deal covers design, raw material supply, construction, installation, testing and maintenance.

CNOOC signs major contract in Kazakhstan

China National Offshore Oil Corp, the nation's largest offshore oil and gas producer, signed an exploration and production contract with Kazakhstan's KazMunayGas in its first upstream oil and gas development project in the Central Asia nation. The first stage of exploration in the Zhylyoi subsoil area is expected to last nine years. Preliminary assessments by KazMunayGas indicate the block could hold over 185 million tons of oil reserves.

CMOC takes over Ecuador gold mine

China's CMOC Group, one of the world's biggest producers of molybdenum, tungsten, niobium and cobalt, has taken over Canadian-owned Lumina Gold, securing full ownership of the Cangrejos Gold-Copper project in Ecuador. The C$581 million (US$419 million) project is Ecuador's largest gold deposit. CMOC Chairman Liu Jianfeng said, "South America is rich in gold, copper and other resources, with relatively stable geopolitics, making it one of the key destinations for Chinese enterprises."