Chinese, US presidents talk by phone
Chinese President Xi Jinping and US President Donald Trump agreed to get their stalled trade negotiations back on track during a one-hour call on Thursday, Trump said on his social media site. It was the first contact between the leaders of the world’s two-largest economies since Trump launched his global tariff war in March.
According to Xinhua news agency, Xi told Trump that cooperation and dialogue are the only way for China and the US to patch up differences, likening the bilateral relationship to a ship off course. He also told Trump that the US must rescind “negative measure taken against China” and rebuffed Trump’s recent allegation that China has breached a 90-day trade truce, agreed to in May, that involved a rollback in some mutual tariffs.
Contentious issues keep bubbling up. China is angry about the remaining 30 percent US tariffs on imports from China, US restrictions on semiconductor sales and a ban on exports of jet engines to China, and the revocation of visas for Chinese students in the US. China’s strict controls over exports of rare earth and other vital industrial minerals, which are beginning to cripple Western automakers, are a dominant bone of contention with the US.
Buddies no more
Elon Musk’s Tesla shares plunged in recent months after the world’s richest man became chief spending-slasher for his buddy President Donald Trump. On Thursday, they plunged 14 percent amid a spectacular fallout between the two men.
Musk, who left his government job last week amid his growing criticism that Trump’s signature tax-cut bill would blow out the national deficit, said on Thursday that Trump should be impeached. He also said Trump would have lost last year’s election had it not been for the millions Musk donated to his camp. Trump, in turn, called Musk crazy and threatened to end all US contracts with his multiple companies, which evoked a threat from Musk that he would decommission the SpaceX Dragon spacecraft, the only vehicle available to send US astronauts to the International Space Station. Musk later accused the president of being in the official files related to high-profile sex offender Jeffrey Epstein, who hanged himself in prison after being arrested.
‘Children fighting in a park’
In a White House meeting with German Chancellor Friedrich Merz, President Donald Trump said Russian and Ukraine were like two “children fighting in a park” and it might be better to let them “fight for a while” rather than pursue peace immediately. Merz had urged Trump to increase pressure on Russian President Vladimir Putin to make progress in faltering ceasefire talks.
Japan’s spacecraft failure
Japan’s second attempt in two years to land a commercially built, unmanned spacecraft on the moon apparently ended in failure on Thursday. Controllers said they lost contact with the Resilience, a lander built by Japan-based company Ispace, as it attempted to land on the lunar surface.
US bans some foreign visitors
US President Donald Trump signed a proclamation banning visits by nationals from 12 countries, including Afghanistan, Myanmar, Haiti, Iran, Libya, Sudan and Yemen, saying the move is to protect the US from “foreign terrorists.” Citizens from seven other countries, including Venezuela, Cuba and Turkmenistan, will face partial restrictions.
UN Gaza resolution defeated
The US cast the lone no vote on a UN Security Council resolution calling for a ceasefire in the Gaza war and the free flow of humanitarian aid. As one of five permanent members of the council, the US veto effectively killed the proposal.
Limited aid provided by a controversial US-Israeli project resumed after food distribution sites were closed following days of violence, in which dozens of Palestinians converging on the centers were killed by Israeli gunfire.
The Israeli government said a special military operation in Gaza retrieved the bodies of an elderly Israeli couple killed during the 2003 Hamas attack in southern Israel that started the war. Fifty-six hostages are believed to remain in Gaza, with approximately 20 thought to be alive.
Top Business
China’s biotech surge eclipses US dominance
China’s biotechnology sector is outpacing the US in clinical trials and drug development, according to GlobalData. In 2024, China conducted over 7,100 clinical trials, surpassing about 6,000 in the US. China has promoted rapid development in the sector by streamlining regulations and lowering operational costs. Some 37 percent of licensed molecules used in pharmaceuticals come from Chinese firms.
Google AI chief worries about ‘bad actors’
Demis Hassabis, chief executive of Google AI research arm DeepMind and a Nobel Prize laureate, told CNN he isn’t particularly worried about artificial intelligence being a human-job bulldozer. Rather, what keeps him up at night is worry about the technology falling into the wrong hands. “A bad actor could repurpose the technologies for a harmful end,” he said. “So one big thing is… how do we restrict access to these systems, powerful systems to bad actors…but enable good actors to do many, many amazing things with it?”
“Bad actors” are already using AI to create malicious videos, photos and other content, including sexually explicit material, fake news, celebrity pornography, hoaxes and financial fraud.
Economy & Markets
China services sector expands
Business activity in China’s services sector grew in May from April despite a decline in new export orders blamed on US tariffs. The Caixin/S&P Global services purchasing managers’ index rose to 51.1 in May from 50.7, remaining above the 50-mark threshold that expansion and contraction. The Caixin PMI is considered as a better indicator of activity in smaller and export-oriented firms than the official government index, which tracks larger companies.
In the US, a similar survey by the Institute of Supply Management showed the services sector fell to 49.9 from 51.6 in April, its lowest reading in a year, on uncertainty about President Donald Trump’s constantly shifting trade policies.
China expands market liquidity
China’s central bank announced a one trillion yuan (US$138 billion) reverse repurchase operation to ensure ample liquidity in the banking system. The repos, a form of secured, short-term borrowing, carry a 91-day term. The size of the liquidity injection is viewed as a move by the People’s Bank of China to stabilize credit flows amid an uneven economic recovery.
Red-hot HK consumer stocks tumble
Shares in three red-hot Hong Kong consumer stocks – Laopu Gold, Mixue Group, and Pop Mart – dived on Thursday after months of outsized gains fueled by strong earnings and investor enthusiasm. Laopu Gold plunged 9 percent, Mixue fell 7.7 percent, and Pop Mart slipped 1.2 percent, reversing gains from previous record highs.
Earlier this week, Laopu shares became the most expensive on the HK exchange after soaring 2,300 percent since their listing a year ago. In second place was bubble teamaker Mixue.
China wig-maker falls afoul of regulators
Rebecca Hair Products, China’s leading wig exporter, received a regulatory warning for failing to disclose its annual loss of 118 million yuan (US$16.3 million) on time. It was the company’s first loss since listing in 2003. According to regulatory officials, the company failed to disclose its earnings after the end of the 2024 fiscal year. Rebecca attributed the loss to a 62 percent surge in marketing expenses as it sought to ramp up overseas sales.
Corporate
Citi to cut 3,500 jobs in Shanghai, Dalian
US investment bank Citigroup said in a statement on Thursday that it will cut 3,500 information-technology jobs in China as part of cost-cutting measures to reduce its global workforce by 10 percent. The cuts, which will affect Citi centers in Shanghai and the northeastern city of Dalian, and leave about 2,000 staff, will occur by the end of the year, the bank said. It has also reduced its workforce in the US, Indonesia, Poland and the Philippines.
RedNote valuation soars
The value of Chinese online lifestyle platform RedNote, known as Xiaohongshu in China, surged to US$26 billion from US$20 billion in recent market transactions via a major fund, Bloomberg reported. The rise reflects how RedNote is making inroads in the US market against popular platform TikTok, which is facing a ban in the US on national security grounds. The valuation report is based on a document from a GSR Ventures Management fund that tracks RedNote shares changing hands. RedNote comprises 91 percent of the fund’s assets. Industry insiders are expecting RedNote to seek an initial public offering, possible as soon as this year.