☕️ Good morning comrades!

Trump’s tariff theater has found a new victim: chicken feet. Since March, prices have jumped a full 30 percent, leaving Beijing’s gourmets distraught. A local restaurateur raves that American chicken feet are “beautiful”—far more delightfully spongy than the domestic variety.
Meanwhile, Germany’s carmakers are starting to sweat—not over poultry, but over rare-earth metals. We covered that looming headache in our Top Story two days ago.

🔢 Facts & Figures

80%

Voter turnout in South Korea’s presidential election—the highest since 1997.

49.42%

Share of the vote with which liberal candidate Lee Jae-myung won the snap election.

25% 

Tariff on South Korean exports to the U.S.—with an extra 25 % slapped on cars and steel. Lee will have to tackle the issue with Trump from day one.

🚀 Benchmarks

Top Bit: ⚔️ BYD Ignites China’s EV Price Explosion

What happened?

At the end of May, BYD slashed prices on several battery-electric and plug-in-hybrid models by as much as 34 %, firing the next salvo in China’s already brutal car-price war. Beijing’s Ministry of Industry and Information Technology (MIIT) issued an unusually sharp rebuke, warning the discount frenzy hurts margins, product quality—and ultimately China’s industrial image.

Details

🏷️ Discount domino: After BYD’s move, rivals Geely, SAIC Motor and Leapmotor followed suit; the budget Seagull now lists at 55,800 RMB (≈ USD 7,750).

📉 Market bleed-out: BYD’s share price slid 15 % in a week (another −5 % on Monday). EV makers across Hong Kong and mainland indices suffered similar hits.

🛑 Regulatory heat: Industry groups warned of “malicious competition,” while the Party daily People’s Daily condemned a “rat race” that could upend supply chains and tarnish China’s manufacturing brand.

Why it matters

• Margins & deflation: Chinese auto prices have fallen 19 % in two years (Nomura). Fresh cuts squeeze profits further and stoke deflationary pressure amid weak domestic demand.

• Sector stability: Even state-owned automakers are now fighting for survival; analysts fear an “Evergrande moment” if smaller brands collapse.

• Global fallout: Ultra-cheap exports heighten trade tensions—extra EU duties loom, and the U.S. already levies a 100 % tariff on China-built EVs.

Background

Since 2023, Tesla and Chinese brands have waged a relentless price war. New-energy-vehicle (NEV) sales keep growing double-digit but mostly cannibalize gasoline cars rather than expand the overall market. BYD sold 382,476 vehicles in May (≈ 204 k pure EVs)—a 2025 record yet its slowest YoY growth (15 %) in four years. To hit its 5.5 million annual target, BYD must average > 534 k cars per month—a goal Morgan Stanley deems unlikely without even deeper price cuts.

Further Reading: CNBC, Bloomberg

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Head Of The Day

Sun Jie

The marathon runner at the helm of Trip.com. In executive roles at China’s largest travel platform since 2005, she now oversees 300 million customers and a USD 24 billion market cap. With that load on her shoulders, marathon running really is the perfect way to clear her head.

Market Bits: 🚗 Xiaomi Steers its EV Division Into Profitability

Details

🔄 Turnaround ahead: CEO Lei Jun sees the EV + AI “Innovation” segment reaching break-even in Q3/Q4. In Q1 the loss was trimmed to RMB 500 m on RMB 4.3 bn gross profit.

🚙 Model blitz: Xiaomi’s second EV, the YU7, hits showrooms in July; Q1 EV revenue jumped to RMB 18.1 bn.

⚔️ Price-war backdrop: Ongoing discount battles—kicked off by BYD—keep squeezing margins; regulators are warning the industry to keep discipline.

Why it matters

• A fast break-even by a tech newcomer piles pressure on pure-play EV rivals like Nio and Xpeng.

• Xiaomi can fold its vast smartphone ecosystem into the car, unlocking cross-selling upside.

• Early profitability signals to investors that scaling is still possible in China’s cut-throat EV market—potentially speeding up sector consolidation.

Further reading: Reuters, SCMP

Top Reads

🌐 Perception tipping point – For the first time, China’s global image scores higher than that of the United States. Across 41 countries, China’s net favorability reached +8.8 by late May, while the U.S. slipped to –1.5. Roughly 4,900 adults (excluding U.S. and Chinese citizens) were polled from January to April. Read more.

☀️ Ex-VW CEO Herbert Diess applauds Asia’s sprint in solar and storage: about 70 % of the world’s projected 600 GW PV additions for 2024 will be installed there, while Europe manages only 80 GW. He warns Germany that even subsidized gas plants will cost more than solar-plus-battery parks. Read more.

💊 U.S. eyes pharma tariffs – Washington is weighing duties on Chinese drug ingredients, even though China supplies roughly 80 % of the active compounds for generics like amoxicillin. Analysts argue that tariffs would do little to bring production home but could tighten supplies and raise costs. Read more.

Optional Reads

Trump nominates Korean-American John Noh as the Pentagon’s top Asia official. More.

Alibaba Cloud speeds up its global cloud-and-AI rollout for Chinese firms. More.

FBI charges a Chinese researcher with smuggling a toxic grain fungus into the United States. More.

🥠 Fortune Cookie of The Day

In the US you hire dancing strippers—in China, dancing robots. Ever since they appeared on the Spring Festival Gala, Unitree Robotics’ machines have become a sensation. Now everyone wants one. For just about $110 to $1,090 you can have them busting moves at trade fairs and department-store openings. Luckily, they run on electricity instead of chicken feet—making the fun even cheaper.

See you tomorrow,

Thomas, Michael & the Team of asiabits.

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