China Evening Missive What the Wall of Chinese Money can accomplish. It isn’t that the Chinese don’t consume. The issue is that there’s never been any real product that they desire to consume. And that is changing at a rapid pace. 3 minutes!! More critically, by the time Trump exits stage left, China will have done to the global robotics industry what it has accomplished in the EV space.

CarNewsChina.com

Xiaomi YU7 sold over 200,000 units in 3 minutes in China

Xiaomi did it again.

Hey all. I’m trying something new for all of you interested in my various posts of #China content. Work in progress, but sending this clip through as a test run. If you’ve any specific questions, I plan to post a couple of videos a week and would love nothing more than to directly address any/all questions. No topic is off the table.

Something else to add as important signal often resides on the margins. While American continues to play defense on the issue of trade, China plays offense. This is perhaps my favorite anecdote. Ramping up direct flights between the high-tech production hub of Shenzhen and Mexico City. Nike might be struggling to overcome its dependence on China for production, but you can be certain that Chinese firms are working quickly to ensure that the same fate doesn’t befall them. https://www.businesstraveller.com/business-travel/2025/02/10/china-southern-airlines-boosts-mexico-city-service/&ved=2ahUKEwj50O-ZypCOAxWiHUQIHc8LI-wQxfQBKAB6BAgTEAE&usg=AOvVaw2pXo1xFQ6IIs-cbNzHLnP6

The Faustian Bargain is very much alive and well in #China. Nike shifted virtually all of its production to China 30 years ago and made a financial killing. Now the company is boxed in. Ignore all the talk. It was clear back in Trade War 1.0 in 2018 that there was a gross over dependence on China for production. Those that could, moved manufacturing to a more friendly jurisdiction. Those groups, like Nike or Apple, didn’t move out of China because they were greedy or dumb. They didn’t move out of China because they couldn’t. There simply wasn’t another alternative location that could provide production at scale, with quality and at a competitive price. China was, and remains, the only option. For these companies, either profitability takes a major hit, or prices to the consumer will rise markedly. https://www.reuters.com/business/nike-posts-smaller-than-expected-drop-fourth-quarter-revenue-2025-06-26/

China Morning Missive But what did the US agree, in totality, to deliver in return? Here again there are zero details. For China to lift the export controls on rare earths would have required the US to deliver on items that were blocked for export to China. Namely chips and chip related technology. Clearly, lifting such restrictions would be a political negative for Trump at home and with that we see no details. The Chinese do not agree hastily to a meeting and never reach agreements over a short two day time frame. And yet this is what went down in London the other week. Such an outcome will only occur if China were given everything which they demanded.

Bloomberg.com

Lutnick Says US-China Trade Truce Signed, 10 Deals Imminent

The US and China finalized a trade understanding reached last month in Geneva, US Commerce Secretary Howard Lutnick said, adding that the White Hou...

Had a truly solid time with this conversation. For those out there looking for a different #China dialogue have a watch/listen. You can also search “The covered call” on any podcast platform if that’s more you style.

As expected, China is being awfully quiet. Just sitting back and letting it all play out. No need to even comment on the current state of global affairs.

“You’d think by now people would learn.” Such a highly applicable statement for a host of different issues present this very day. Namaste all.

China Morning Missive (from jolly old England) Third times a charm??!! For me, the entire TikTok episode is a reflection of America’s actual ability to “quit” China. And it isn’t looking all the good as Trump kicks the can yet again. Here again, the Beijing leadership sees clearly all of the various pressure points which can be applied. Rare earths was just one example. There are dozens more. Trump to extend TikTok deadline for third time, pushing decision out another 90 days

CNBC

Trump to extend TikTok deadline for third time, pushing decision out another 90 days

President Donald Trump plans to again extend the deadline requiring China's ByteDance to divest TikTok's U.S. business or be effectively banned in ...

China Morning Missive First, before anything else, American policy makers need to stop underestimating the Chinese. This below is just one example of how true ingenuity is applied to overcome obstacles. This sort of activity happens all the time.

China Late Night Missive It’s called brute force innovation. The Americans attempt to contain China through export controls on chips and advanced technology and in return China’s STEM army takes up the challenge. Same goes for DeepSeek and Xiaomi and more names than I can even recall. Thing is, I recall vividly that this was how America operated back in the 90s. Damn. https://www.reuters.com/world/china/us-says-chinas-huawei-cant-make-more-than-200000-ai-chips-2025-2025-06-12/

Meanwhile in Asia, Pete Hegseth is committing to a further “let’s surround China more” strategy. Rather interesting that this map doesn’t highlight S. Korea or Taiwan. This new Trump administration sure has a far more of a warmonger-vibe than the last go around.

No question it is a mad dash here in #China to get end product out of the supplier facility and into a shipping container. The Chinese export engine is truly humming. Interestingly, American buyers are paying a premium to ensure that orders are prioritized. This, on top of the current 55% tariff. Can’t see how prices on the US don’t trend higher throughout the send half of the year.

Another win for China as America remains mired in the Middle East. Play 20th century games win 20th century prizes.

American hubris indeed. In light of the current America/China trade tensions and the on again, off again talks, you’ll find the following clip highly instructive. It is from an appearance made on CNBC in New York and is from all the way back in 2018. Pay close attention to the questions raised and to the answers given. Ask yourself, why didn’t American leadership (political and commercial) take the situation far more seriously? Moreover, should there be any expectation that events will play out any differently today? Copy/paste the comments from this segment, word for word, and what it is you’ll find is that American policy makers and business executives have learned nothing over six years. The Faustian bargain is real, IP theft is a red herring and, ultimately, America’s dependency on China, shown clearly in this clip and during the first Trump administration, has only grown more extreme.

China Morning Missive There is a great deal to address in the supposed “done deal” announced between China and the US. For right now what I want to highlight is the issue of tariffs. The headlines have blared that an agreement was reached for American to place 55% tariffs on Chinese imports with China holding tariffs on American imports at 10%. This is EXACTLY the very same level of tariffs the parties agreed to last month in Geneva. There is nothing new here. For the purpose of optics, what the American side has done is include the tariff rates put in place back in 2018 to the grand total announced yesterday. 25% from 2018 on all Chinese imports, 10% added this year (after being reduced from +100% in April mind you) and an additional 20% punitive tariff for fentanyl. To conclude, when it comes to tariffs the parties are exactly where they were even before the talks commenced in London. https://www.reuters.com/world/china/lutnick-says-us-tariff-levels-china-wont-change-2025-06-11/

Trump got rolled by China and he doesn’t even know it yet. This “deal” is FAR from concluded. Key rule in China ….. it only after you sign a deal that you actually begin to negotiate.

China Morning Missive Agree on a framework? I’m not even sure what that means. From what I can tell, the parties agreed, for the time being, that the US would lift certain restrictions which were placed on China in the past two weeks and, in return, China would begin allowing the export of rare earth minerals. Beyond this, all that looks to have been achieved is for the two sides to continue building a broader list of issues which will be discussed over time. I need to see what sort of messaging comes out of Beijing later this morning. That will provide a counterbalance to the reporting now coming out from the American media outlets. https://www.cnn.com/2025/06/10/business/us-china-trade-talks-london-agreement-intl-hnk

Not sure what this could possibly mean, but Chinese markets reopened for afternoon trading and dived. Nothing news worthy out of London and the ongoing trade talks. At least nothing made public. Could be a volatile day ahead.

Bloomberg.com

Chinese Stocks Drop Suddenly as Investors Await US Trade Talks

Chinese stocks slid suddenly on Tuesday, showing that investors remain on edge as the second day of trade talks with the US gets underway.

China Late Night Missive Iwo Jima?! Haven’t heard that island name in a very long time and yet here we are. China heading deeper into the pacific for the first time. Outside the so called “first island chain”. The physiological batter over the Asian theater is very real and this move is all the more unique. American forces are based from Japan to the north all the way to Australia in the south and various spots along the way. China was supposed to be hemmed in, at least to the east. Genuinely interesting move. https://www.reuters.com/world/china/japan-confirms-chinas-aircraft-carrier-sailed-east-iwo-jima-first-time-2025-06-09/