Asia First - Mon 14 Jul 2025
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AsiaOne
2 hours ago
- AsiaOne
Australia and China call for more dialogue, cooperation at leaders' meeting, World News
BEIJING — China is ready to work with Australia to deepen bilateral ties, President Xi Jinping said during a meeting with Australian Prime Minister Anthony Albanese on Tuesday (July 15) in Beijing. The meeting between the two leaders comes as China tries to capitalise on US President Donald Trump's sweeping trade tariffs by presenting itself as a stable and reliable partner. Chinese officials have expressed interest in expanding a decade-old free trade deal and cooperating in artificial intelligence. China was willing to "promote further development in the China-Australia relationship," Xi said in remarks at the start of the meeting. Australia valued its ties to China, its largest trading partner, and welcomed "progress on co-operation" under the free trade deal, Albanese said in response, adding that Australia's national interest would guide Canberra's approach to the relationship. "Dialogue needs to be at the centre of our relationship," the prime minister said. "I welcome the opportunity to set out Australia's views and interests and our thinking on how we can maintain peace, security, stability and prosperity in our region." Albanese is expected to meet Chinese Premier Li Qiang later on Tuesday. He has previously said resources trade, energy transition and security tensions would be key topics for discussions in Beijing. Australia, which regards the United States its major security ally, has pursued a China policy of "co-operate where we can, disagree where we must" under Albanese. In the run-up to the visit, China signalled repeatedly it was open to deeper co-operation. On Tuesday, the state-owned China Daily newspaper published a glowing opinion piece about the visit and said it showed countries with different political systems could still co-operate. However, any co-operation is likely to be constrained by long-standing Australian concerns around China's military build-up and the jailing of Australian writer Yang Hengjun. Beijing has also separately criticised Canberra's increased screening of foreign investment in critical minerals and Albanese's pledge to return a Chinese-leased port to Australian ownership. Australia's exports to China, its largest trading partner, span agriculture and energy but are dominated by iron ore, and Albanese has travelled with executives from mining giants Rio Tinto, BHP, and Fortescue, who met Chinese steel industry officials on Monday, at the start of the six-day visit. Bran Black, CEO of the Business Council of Australia, said Australia's Bluescope Steel would also be at Tuesday's business roundtable, along with China's electric vehicle giant BYD, Chinese banking executives, Baosteel and state-run food group COFCO. "First and foremost we use fixtures such as this to send a signal that business-to-business engagement should be welcomed and encouraged," Black told Reuters on Tuesday. [[nid:720200]]
Business Times
3 hours ago
- Business Times
China's economy slows as consumers tighten belts, US tariff risks mount
[BEIJING] China's economy slowed less than expected in the second quarter in a show of resilience against US tariffs, though analysts warn that weak demand at home and rising global trade risks will ramp up pressure on Beijing to roll out more stimulus. The world's No. 2 economy has so far avoided a sharp slowdown in part due to policy support and as factories take advantage of a US-China trade truce to front-load shipments, but investors are bracing for a weaker second half as exports lose momentum, prices continue to fall, and consumer confidence remains low. Policymakers face a daunting task in achieving the annual growth target of around 5 per cent - a goal many analysts view as ambitious given entrenched deflation and weak demand at home. Data on Tuesday showed China's gross domestic product (GDP) grew 5.2 per cent in the April-June quarter from a year earlier, slowing from 5.4 per cent in the first quarter, but just ahead of analysts' expectations in a Reuters poll for a rise of 5.1 per cent. 'China achieved growth above the official target of 5 per cent in Q2 partly because of front loading of exports,' said Zhiwei Zhang, chief economist at Pinpoint Asset Management. 'The above target growth in Q1 and Q2 gives the government room to tolerate some slowdown in the second half of the year.' BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up China's blue-chip CSI300 Index reversed course to trade down 0.1 per cent, while Hong Kong's benchmark Hang Seng cut gains after the data came in, trading up 0.7 per cent On a quarterly basis, GDP grew 1.1 per cent in April-June, the National Bureau of Statistics data showed, compared with a forecast 0.9 per cent increase and a 1.2 per cent gain in the previous quarter. Investors are closely watching for signs of fresh stimulus at the upcoming Politburo meeting due in late July, which is likely to shape economic policy for the remainder of the year. Beijing has ramped up infrastructure spending and consumer subsidies, alongside steady monetary easing. In May, the central bank cut interest rates and injected liquidity as part of broader efforts to cushion the economy from US President Donald Trump's trade tariffs. Further monetary easing is expected in the coming months, while some analysts believe the government could ramp up deficit spending if growth slows sharply. Households pressured Separate June activity data also released on Tuesday underlined the pressure on consumers. While industrial output grew 6.8 per cent year-on-year last month - the fastest pace since March, retail sales growth slowed down to 4.8 per cent, from 6.4 per cent in May and hitting the lowest since January-February. Indeed, the headline GDP numbers held little sway for most households including 30-year-old doctor Mallory Jiang, in southern tech hub Shenzhen, who says she and her husband both had pay cuts this year. 'Both our incomes as doctors have decreased, and we still don't dare buy an apartment. We are cutting back on expenses: commuting by public transport, eating at the hospital cafeteria or cooking at home. My life pressure is still actually quite high.' China observers and analysts say stimulus alone may not be enough to tackle entrenched deflationary pressures, with producer prices in June falling at their fastest pace in nearly two years. Zichun Huang, China economist at Capital Economics, said the GDP data 'probably still overstate the strength of growth.' 'And with exports set to slow and the tailwind from fiscal support on course to fade, growth is likely to slow further during the second half of this year.' Data on Monday showed China's exports regained some momentum in June as factories rushed out shipments to capitalise on a fragile tariff truce between Beijing and Washington ahead of a looming August deadline. Mounting headwinds The latest Reuters poll projected GDP growth to slow to 4.5 per cent in the third quarter and 4.0 per cent in the fourth, underscoring mounting economic headwinds as US President Donald Trump's global trade war leaves Beijing with the tough task of getting households to spend more at a time of uncertainty. China's 2025 GDP growth is forecast to cool to 4.6 per cent - falling short of the official goal - from last year's 5.0 per cent and ease even further to 4.2 per cent in 2026, according to the poll. China's property downturn remained a drag on overall growth despite multiple rounds of support measures, with investment in the sector falling sharply in the first six months, while new home prices in June tumbled at the fastest monthly pace in eight months. Fixed-asset investment also grew at a slower-than-expected 2.8 per cent pace in the first six months year-on-year, from 3.7 per cent in January-May. The softer investment outturn reflected the broader economic uncertainty, with China's crude steel output in June falling 9.2 per cent from the year before, as more steelmakers carried out equipment maintenance amid seasonally faltering demand. 'Q3 growth is at risk without stronger fiscal stimulus,' said Dan Wang, China director at Eurasia Group in Singapore. 'Both consumers and businesses have turned more cautious, while exporters are increasingly looking overseas for growth.' REUTERS
Business Times
3 hours ago
- Business Times
Nvidia to resume H20 AI chip sales to China in US reversal
[HONG KONG] Nvidia plans to resume sales of its H20 artificial intelligence (AI) chip to China after securing Washington's assurances that such shipments would get approved, a dramatic reversal from the Trump administration's earlier stance. US government officials told Nvidia they would green-light export licenses for the H20 AI accelerator, the company said in a blog post. That China-specific variant was created to comply with earlier trade curbs, but has since April also been blocked from sale in the country without a US permit. Billionaire co-founder Jensen Huang appeared on Chinese state broadcaster CCTV shortly after Nvidia announced the decision, saying the company had secured approval to begin shipping. The US move comes after weeks of thawing relations between Washington and Beijing, guided by an opaque truce that's designed to see both sides approve exports of crucial technologies. The US wants China to allow more sales of essential rare-earth minerals, and in exchange is lifting a spate of recent export controls that were imposed in the lead-up to last month's trade talks in London. Throughout those talks, US President Donald Trump's team insisted that controls on Nvidia's H20 chips were not up for discussion. It marks a massive win for Huang, who has branded Washington's chip curbs a 'failure' that fuelled the rise of Huawei Technologies. And it's a boon to Chinese companies from DeepSeek to Alibaba Group Holding that need Nvidia chips to train, expand and host the AI services they are building to compete with the likes of OpenAI. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Nasdaq futures surged after Nvidia's announcement, with Hong Kong and Chinese stocks also reacting positively. The Hang Seng Tech Index rose as much as 2.2 per cent, while data centre operators such as Beijing Sinnet Technology jumped as much as 8.4 per cent. A spokesperson for the US Commerce Department, which oversees semiconductor export controls, did not respond to a request for comment. 'Nvidia resuming the sale of H20 to China is obviously positive,' said Vey-Sern Ling, managing director at Union Bancaire Privee. 'Not just for the company but also the AI semiconductor supply chain, as well as China tech platforms that are building AI capabilities. This is also a good development for US-China relations.' Huang met with Trump last week and is in Beijing this week to attend a large supply chain expo. He said Nvidia also plans to debut a new China-focused product, the RTX PRO, which the company described as 'fully compliant', meaning that it falls below the technical thresholds that would necessitate Washington's approval in the first place. He has said the US does not need to worry about the Chinese military using Nvidia chips, since it cannot rely on something the US could restrict at any point. The H20 is a less powerful version of Nvidia's gold-standard AI acceleration semiconductors, designed specifically for China. It's part of the company's response to US restrictions on AI hardware sales to China, which were first imposed in 2022 and ratcheted up several times since, capturing two successive generations of processors Nvidia made for the China market, the H800, followed by the H20. After Trump officials controlled the sale of H20 chips in April, Huang said Nvidia would suffer a cost of billions of US dollars due to unsold inventory. Huang is seeking discussions with Chinese leaders, including the commerce minister this week, with Nvidia's central role in the global AI rollout likely on the agenda. It made history last week as the first company to hit US$4 trillion of market value, a testament to its central role in providing the hardware for a post-ChatGPT AI infrastructure building boom. BLOOMBERG
