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🇨🇳🇺🇸 Trump: "China is not easy"
Reading time: 4 min 11 sec
☕️ Good morning comrades!
Price wars in China have now hit a key industry. Just a few hours ago, the shock headline of the day flashed across the tickers: Starbucks is cutting its prices! Local rivals like Luckin Coffee (see Market Bit) are stealing customers from the American roaster.
Official statement: This isn’t due to competitive pressure but “to attract more afternoon customers.” Let’s raise a cup of our Yunnan coffee to the term afternoon customers!
🔢 Facts & Figures
140 Mio. £
TikTok’s investment in UK infrastructure, including a new London office and workforce expansion.
US$ 712 million
Net loss at VinFast in the first quarter of 2025. The largest Vietnamese EV manufacturer is striving (so far unsuccessfully) to catch up with international competitors.
US$ 3.29 trillion
China’s foreign exchange reserves at the end of May 2025, $36 billion more than in April.
🚀 Benchmarks
| Index | Current | 24 h | YTD | 52 W High |
|---|---|---|---|---|
| 🇩🇪 DAX | 24 174.32 | –0.54 % | +21.3 % | 24 325.97 |
| 🇺🇸 NASDAQ | 19 591.24 | +0.31 % | +1.0 % | 20 204.58 |
| 🇯🇵 NIKKEI | 38 470.35 | +0.86 % | –3.8 % | 42 426.77 |
| 🇭🇰 Hang Seng | 24 186.01 | +0.03 % | +20.6 % | 24 874.39 |
| 🇨🇳 Shanghai | 3 403.87 | +0.43 % | +1.6 % | 3 674.40 |
| 🇰🇷 KOSPI | 2 883.43 | +1.55 % | +19.0 % | 2 896.43 |
Top Bit: 💼U.S.-Trade Talks Enter Round 2
On Monday in London, new trade talks between the United States and China began—the first session lasted over six hours. Both sides plan to reconvene on Tuesday. The agenda includes tariffs, export bans, and especially critical raw materials like rare earths.
Details
🏛️ Meeting in London: Talks are being held at the historic Lancaster House—Day 2 kicks off at 10 a.m.
🎙️ Trump speaks positively: “China isn’t easy, but we’re making progress.”
🇺🇸 US delegation: Led by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Trade Representative Jamieson Greer.
🇨🇳 China delegation: Headed by Vice Premier He Lifeng, accompanied by Trade Minister Wang Wentao and WTO veteran Li Chenggang.
🔋 Swap deal in sight: The US has signaled willingness to lift export bans (e.g., on chip software and chemicals) if China, in turn, eases export restrictions on rare earths.
Why it matters
Global supply chains affected: Rare earths are essential for energy, defense, and high-tech—China controls 70 % of world production.
Key diplomatic step: These talks mark a diplomatic thaw after months of escalating tensions.
Industry hopes for relief: Tech and defense companies worldwide are watching closely for signs of easing.
Background
Many of the current US export restrictions were imposed only a few weeks ago. China responded with countermeasures. These talks could either pave the way for a new agreement or trigger further escalation.
Further Reading: Al Jazeera, CNBC, Bloomberg
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Head Of The Day
Lu Zhengyao
☕ China’s coffee champion: After graduating from the Beijing University of Science and Technology and earning an EMBA at Peking University, Lu Zhengyao founded a car-rental company in 2007, which went public in Hong Kong in 2014. In 2018 he acquired Luckin Coffee, led the company to a record-speed Nasdaq IPO in 2019 (raising $6.95 billion), and stepped down in 2020 following an accounting scandal. Today, with Kudi Coffee and milk-tea brand TeaCat, he’s once again driving expansion in the beverage sector. At his age, he’s certainly not an afternoon customer…
Market Bit: 🚀 China’s Coffee Giants Launch US Expansion
Details
☕ Lower Manhattan & Brooklyn: Luckin Coffee opens its first US outlet in Lower Manhattan, while Cotti Coffee focuses on locations in Brooklyn and Manhattan.
💸 Price offensive: Introductory offers start at $0.99 for new customers; long-term prices remain cheaper than at Starbucks (approx. $2–3 vs. $4–5).
🌈 Exotic flavors: Bubble-tea-inspired creations and alcohol-latte varieties draw in younger customers.
📲 App-based model: Orders and deliveries run through the companies’ own apps and WeChat—digitizing the classic café visit.
🌍 International ambitions: After Singapore, Hong Kong, and Malaysia, New York becomes the most important Western test market.
Why it matters
Pressure on Starbucks: Lower prices and mobile-first logistics could erode its market share.
F&B export strategy: Success in New York paves the way for further US outlets and other Chinese food-and-beverage startups.
Gen Z relevance: Young consumers value creative flavors and digital convenience.
Further reading: CNBC, Economic Times
Top Reads
🚗 China’s EV and smart-mobility stars storm the Hong Kong Stock Exchange: Chery aims to raise at least $1.5 billion, Seres (Huawei) needs capital for its overseas operations and charging networks. After CATL’s $5.2 billion mega-IPO, analysts expect further momentum for Hong Kong’s position as a global listing hub. More on this.
🤖 Nvidia CEO Jensen Huang tours Europe: London keynote, VivaTech appearance in Paris, and talks with Germany’s Chancellor Friedrich Merz on the EU’s “InvestAI” initiative (a $22 billion fund for 4–5 AI data centers). Europe’s future “AI gigafactories” are set to be equipped primarily with Nvidia GPUs – despite a global chip shortage, investments totalling $220 billion are planned. More on this.
🏭 Hungary Becomes China’s Workshop in Europe: Low wages, billions in subsidies, and a China-friendly stance are attracting battery giants and auto suppliers like CATL and BYD – in 2024, already over $11 billion flowed from China, with Hungary serving as a cost-effective springboard into the EU market. More on this.
Optional Reads
Japan: China’s aircraft carrier group “Liaoning” enters Japan’s exclusive economic zone for the first time. More
Shein: Expanding production in India to protect supply chains from US–China tariff risks. More
North Korea: Chinese national confesses to illegal arms exports. More
Japan Wants the Wolf Back: No animal divides the German soul like the wolf. Now the debate has reached Asia as well.
A century after its extermination, the Japan Wolf Association plans to reintroduce wolves into the wild.
Goal: Natural control of booming deer, wild boar, and monkey populations—saving farmers billions in annual losses.
German wolves send their best regards—on their menu are only sheep, not monkeys.
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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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