CX Weekly Briefing: China Denies Trump’s Tariff Talks Claim

Summary:

Over the past week, several significant developments in China made headlines, reflecting the country's complex economic, diplomatic, and social landscape.

Firstly, contrary to statements made by U.S. President Donald Trump about ongoing trade talks, China’s foreign ministry officially declared that there are currently no trade consultations or negotiations taking place between China and the U.S. regarding tariffs. The ministry labeled previous U.S. claims as misinformation, underscoring a cooling of dialogue amidst persistent tensions over tariffs and trade policy[para. 2].

Domestically, China’s top leadership, in a Politburo meeting chaired by Xi Jinping, affirmed a commitment to intensifying support for the economy in response to growing external shocks. Policy directions include adopting a more proactive stance: lowering interest rates, activating more assertive fiscal measures, promoting technological innovation, and supporting local consumption. The leadership also highlighted the need to address internal risks, such as local government debt and instability within the property market, to reinforce the foundations of China’s economic recovery[para. 3].

Human trafficking remains a pressing issue, as highlighted by a new report from China’s top prosecutor. Between January and March 2024, authorities charged 1,546 individuals in connection with matchmaking-related trafficking and fraud offenses. Some agencies promised foreign women who would bear children and not attempt to escape. Notably, eight Chinese nationals were arrested in Madagascar in March regarding a bride-trafficking ring. Chinese women are also victims, evidenced by a major 2022 case in Jiangsu province involving a woman found shackled, which drew widespread attention to the persistent problem of trafficking[para. 4].

In diplomatic news, China’s foreign ministry extended condolences over the reported death of Pope Francis and stressed recent improvements in Sino-Vatican relations, despite the lack of formal diplomatic ties. Relations have warmed, particularly following a recent agreement regarding the appointment of Catholic bishops in mainland China[para. 5].

Financial markets experienced turbulence as gold prices sharply retreated from record highs. The Shanghai Gold Exchange responded by tightening trading rules for the fourth time in 2024. On April 23, the “Au99.99” gold contract price in Shanghai fell nearly 5% to below 800 yuan ($110) per gram. In London, spot gold prices dropped by almost $200 within two days. This volatility followed a significant rally, linked to concerns about U.S. monetary policy shifts and ongoing trade tensions[para. 6]. Simultaneously, the Shanghai Gold Exchange announced plans to establish overseas gold vaults to attract international investors and boost liquidity as part of a broader effort to internationalize Shanghai's financial industry[para. 7].

China advanced its financial sector reform with an 18-point action plan launched by the central bank and regulators to overcome obstacles in cross-border financial services, such as settlement efficiency and currency hedging. This move strengthens Shanghai’s role as a testbed for financial liberalization and aligns with national efforts to promote the yuan globally and mitigate geopolitical risks[para. 8].

On the aviation front, Boeing’s CEO confirmed that Chinese airlines have returned 737 Max planes due to U.S.-China trade tensions, with further potential for order reallocations. The aviation sector in China remains reliant on American aircraft and components, indicating vulnerability to bilateral disputes[para. 9].

Notably, Baidu announced the rollout of its Apollo Go robotaxi service in Dubai, marking its first operation outside China. A pilot of 50 autonomous taxis is scheduled for this year, with plans to reach 1,000 vehicles by 2028[para. 10].

In the technology sector, battery maker CATL is under pressure as potential U.S. tariffs threaten its lucrative energy storage exports. The company, which reported strong Q1 earnings (14 billion yuan profit, up 33%), faces uncertainty, as U.S. shipments account for nearly 10% of its 2024 profit. CATL claims this risk is manageable and has contingency strategies in place[para. 11].

Lastly, Dong Mingzhu stepped down as president of Gree Electric—but remains chairperson—after 24 years in the role, with Zhang Wei, a long-term company veteran, poised to take over amid slower growth compared to its main rivals[para. 12].