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- 🤝 EU-China: Tough Traffic Talks
🤝 EU-China: Tough Traffic Talks
Estimated reading time: 4 min 33 sec
☕️ Good morning comrades!
Germany’s Chancellor Merz’s inaugural visit to the US is storming up to #4 on Chinese TikTok trends. What the Chinese are most curious about: whether there’ll be cheeseburgers at the state dinner. Angela Merkel, after all, is a big Kung Pao Chicken fan.
🔢 Facts & Figures
500
The number of aircraft China plans to order from Airbus, including both narrow-body and wide-body planes.
61,662
The number of vehicles Tesla sold in China in May. This represents a 15 % decline compared to the same month last year.
686,061
The number of newborns registered in Japan in 2024, marking a historic low under 700,000 for the first time since records began in 1899.
🚀 Benchmarks
| Index | Current | 24h | YTD | 52W High |
|---|---|---|---|---|
| 🇩🇪 DAX | 24,276.48 | +0.77% | +22.0% | 24,325.97 |
| 🇺🇸 NASDAQ | 19,460.49 | +0.32% | +0.8% | 20,204.58 |
| 🇯🇵 NIKKEI | 37,540.55 | -0.55% | -4.04% | 42,426.77 |
| 🇭🇰 Hang Seng | 23,828.69 | +0.74% | +16.2% | 24,874.39 |
| 🇨🇳 Shanghai | 3,378.22 | +0.08% | +0.81% | 3,674.40 |
| 🇰🇷 KOSPI | 2,800.59 | +1.07% | +16.92% | 2,896.43 |
Top Bit: 🤝 EU-China: Talks to End Economic Stalemate
China and the EU have scheduled new talks to address key trade issues, including market access, rare earths, and electric vehicles (EVs), ahead of a summit in July. These discussions come amid rising tensions over tariffs and export controls, with both sides under pressure from U.S. trade policies.
Details
🤝 Planned summit: The talks were initiated after a meeting between China’s Trade Minister Wang Wentao and EU Trade Commissioner Maros Sefcovic to lay the groundwork for high-level discussions in Beijing this July.
🔋 Concerns over critical minerals: The EU has raised concerns about China’s export restrictions on rare earths and magnets, crucial for sectors like automotive, aerospace, and semiconductors.
🚗 EV tariffs: The ongoing dispute over EU tariffs on Chinese electric vehicles and China’s anti-dumping measures against European brands remains a major point of contention.
Why it matters
Global trade dynamics: These talks are crucial as both the EU and China need to realign their economic relations amidst U.S. tariff threats.
Market access: Europe seeks more equitable access to the Chinese market, especially for state procurement and rare earths, vital for industries worldwide.
Economic independence: The EU is focusing on reducing dependency on China for raw materials to safeguard against global trade disruptions.
Background
China is the EU’s second-largest trading partner, with a trade volume of €793 billion in 2023. The EU faces the challenge of deepening its trade relations with China without worsening tensions with the U.S., which has imposed 50% tariffs on European steel and aluminum.
Further Reading: SCMP, The Straits Times
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Head Of The Day
Zhang Yong
With just about $1,100, he opened the first Haidilao branch. Today, it’s the US’s largest hot pot restaurant chain, boasting 1,300 locations in the US and 97 globally. Haidilao is especially renowned for its service, so much so that weddings are now held there (as mentioned in the Fortune Cookie).
Market Bits: 🚢 Trump Approves Mega Steel Deal
Details
💼 Merger of giants – Nippon Steel gets the green light to acquire US Steel, with Trump emphasizing the creation of an "American company" backed by significant investments in US factories.
⚖️ Political dimension – The deal is viewed as a potential "partnership model" for Japan's continued engagement in the US shipbuilding industry, though it remains unclear how much control Nippon Steel will actually retain.
🌍 Environmental concerns – Critics have raised alarms about the continuation of carbon-intensive production methods and the lack of genuine innovations to decarbonize US plants.
Why it matters
Political impact on the US economy and industrial policy; the deal could serve as a model for future collaborations between Japan and the US.
Questions about "golden shares" and government control are still unresolved.
Environmental groups and unions warn about the long-term effects on jobs and climate protection.
Top Reads
🛑 Trump Struggles to Reach Xi: Despite repeated claims of a close relationship with China's President Xi, Trump faced weeks of difficulty in getting him on the phone. Different leadership styles and mutual distrust made communication tough. With rising tensions over tariffs and supply chains, a direct conversation is finally expected. More on this.
🏙️ Tokyo Surpasses New York: Japan's real estate investments hit a record 2.1 trillion yen ($14.6 billion) in Q1 2025. Tokyo now leads globally as international investors take advantage of low interest rates to make large property purchases. This marks a 23% increase compared to last year. More on this.
🚗 Automakers Seek Solutions for China’s Magnet Blockade: Due to China's export controls on rare earths, production lines could soon face halts. Companies are considering relocating parts of production to China to incorporate magnets or turning to alternative suppliers. However, none of these options will fix the bottleneck immediately. More on this.
Optional Reads
Xi Jinping: Emphasizes the importance of relations with South Korea after Lee Jae-myung's election victory. More on this.
Hong Kong: Introduces legislation on stablecoins, strengthening the city's role as a financial hub. More on this.
Nintendo Switch 2: Global launch expected with supply shortages due to high demand. More on this.
Hot-Pot Wedding
🍲 In northwest China, a couple decided against a traditional wedding and simply rented the nearest Haidilao Hot Pot restaurant. 140 guests and the entire event cost less than $3,000. The receipt was two meters long! Wonder if the tax office will allow that as a special deduction? We'll keep you posted!
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See you tomorrow,
Thomas, Michael & the Team of asiabits.
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Editors: Michael Broza, Thomas Derksen, William Hu, Eva Trotno, Cindy Zhang
Content responsibility: Thomas Derksen
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