CX Weekly Briefing: Xi, Trump Speak Amid Trade Tumult

Summary:

This week’s headlines from China highlight key developments in domestic policy, business, and international relations, reflecting both ongoing challenges and efforts towards reform and global engagement.[para. 1]

Internationally, Chinese President Xi Jinping and U.S. President Donald Trump spoke by phone for the first time since Trump’s inauguration, focusing on the importance of steering the U.S.-China relationship on a stable course through enhanced dialogue and cooperation. Xi emphasized the need to remove disturbances in bilateral ties and cited positive momentum from the recent Geneva trade talks. He reiterated China’s commitment to the agreements reached, urging the U.S. to lift negative measures against China. Xi also called for deeper collaboration in areas like diplomacy, trade, military, and law enforcement, while stressing China’s firm stance on the Taiwan issue and cautioning against pro-independence moves. Trump expressed respect for Xi, highlighted the mutual benefits of a robust Chinese economy, and reaffirmed the importance of U.S.-China relations according to Chinese state media.[para. 2]

Domestically, China’s top anti-corruption body has undergone legal reform, enhancing its investigative authority. The revised Supervision Law, effective June 1, introduces new measures including compulsory appearances and custodial care, and extends detention periods from six to 14 months. While the law provides procedural rights, such as guaranteed food, medical care, and family notifications (barring investigational risks), it signals a more stringent approach to President Xi’s anti-graft campaign.[para. 3]

In the tech sector, a subsidiary of China’s leading cybersecurity firm Qi An Xin was suspended from military procurement over bid-rigging allegations, with related companies facing similar restrictions. This comes amid a broader industry crackdown, with at least one other major cybersecurity player, Venustech, banned from certain procurement processes for dishonest conduct. Qi An Xin reported a revenue decline and losses in the recent quarter.[para. 4]

The business landscape saw government intervention in the ongoing vehicle price war. The Ministry of Industry and Information Technology and the China Association of Automobile Manufacturers condemned price slashing initiated by automakers like BYD, Geely, and SAIC, arguing it damages profit margins, hampers industry development, and harms consumers. This competition has driven down stock prices in Chinese and Hong Kong markets.[para. 5]

The entertainment industry experienced a robust recovery, particularly during the Dragon Boat Festival. Chinese box office sales rose 20% year-on-year to 460 million yuan, with Tom Cruise’s new “Mission: Impossible” film accounting for over 41% of total sales. Over 11.7 million cinema-goers attended during the three-day period, signaling improved consumer demand and confidence.[para. 6]

In technology, AI chipmaker Cambricon Technologies aims to raise up to 4.98 billion yuan through a new share placement, targeting chip projects and AI software development. The plan comes amid a sharply improved market, as Cambricon's stock soared 244% over the past year.[para. 7]

Economically, China’s real estate market is witnessing concentration in big cities, where fewer residential land deals are driving up prices and transaction values. In the first five months of 2025, deal count dropped 28.5% year-on-year, but total transaction value rose 12.1% to 588.7 billion yuan, with first- and second-tier cities dominating by value.[para. 8]

On the financial front, China Chengxin International Credit Rating introduced the first global rating scale for yuan-denominated debt, reflecting the growing internationalization of China’s currency and the impact of U.S. protectionism on global finance.[para. 9]

Finally, China’s trust industry reported record assets under management at 29.56 trillion yuan by the end of 2024, a 23.58% increase. However, profits declined sharply by 45.5% to 23.1 billion yuan, due in part to a regulatory-driven shift towards wealth management services and enhanced risk controls following sector reforms.[para. 10]