AGP Executive Report

Rare-Earth Supply Chain Clash: Two US-backed rare-earth firms are locked in a legal fight after MP Materials sued USA Rare Earth, as both sit at the center of Washington’s push to loosen China’s grip on strategic minerals. EV Safety & Warranty: Chery will extend lifetime battery-and-motor warranties for Rhino packs, timed with China’s toughest EV battery safety standard taking effect July 1. EU Trade Pressure on Batteries: The European Commission launched an anti-dumping probe into Chinese primary alkaline manganese dioxide batteries after a complaint from Varta. China-EU Trade Talks: China invited the EU’s trade commissioner to co-chair the second China-EU trade and investment consultation meeting this autumn, aiming to stabilize cooperation in AI and green transition. Auto Market Divergence: China’s passenger-car market shows “divergence” as entry-level sales soften while mid-to-high-end models gain, driven by policy, fuel prices, and trade-in thresholds. Renewables IPO Boost: China Resources New Energy surged nearly threefold on its Shenzhen debut after raising 24.5 billion yuan, signaling renewed appetite for mainland listings. AI Industrial Moment: A report on the AI IPO cycle highlights how compute, cloud and capital are increasingly concentrated around a few giants—raising questions for competition and platform power. Infrastructure Momentum: China’s transport buildout continues with new highways and connectivity upgrades supporting regional growth. Cross-Strait Tensions: Taiwan condemned mainland patrols near the island as “cognitive warfare” over jurisdiction claims. Humanoid Robots Debate: Unitree’s IPO approval and UBTech’s hyper-realistic companion robot both underline how China’s robotics boom is colliding with public concerns about social impact.

Outbound Investment Rules: China’s new outbound investment regulation took effect July 1, creating a unified rulebook for over 50,000 overseas enterprises and consolidating oversight into one administrative framework. Auto Exports Momentum: Chery exported 191,062 vehicles in June (+79.7% YoY), with first-half overseas deliveries up 71.5%, as China’s car export push nears 10 million units in 2026. EV Market Pressure: Leapmotor and Zeekr posted record June deliveries, intensifying competition as Tesla faces weak big-ticket demand and a more limited China lineup. EU–China Trade Friction: EU leaders are weighing new trade defense and industrial tools amid concerns over China’s trade surplus and export controls, while EU chip reports warn of a “bleak future” from US tech dependence and China-related supply risks. Tech Supply Chain Politics: Apple is reportedly lobbying the US to buy Chinese-made memory chips from Pentagon-blacklisted suppliers, drawing pushback from lawmakers. Green Shipping Upgrade: China launched its first sea-river zero-carbon electric container route, linking inland electric vessels to a battery-powered ship to cut emissions per container. Renewables IPO Watch: China Resources New Energy shares nearly tripled on debut after Asia’s biggest 2026 IPO so far, signaling renewed appetite for mainland listings. Industrial Skills Link: China transferred national occupational standards to Cambodia to modernize TVET, targeting skills for construction and the NEV sector. Local Industry Stories: A Guilin bamboo cutlery maker showcased scalable eco-friendly production at the Canton Fair, while a Xizang weaver modernized pulu production with machinery without replacing veteran artisans.

China-Backed AI & Chips: China’s semiconductor IPO push gathered pace as the SSE accepted STAR Market filings for silicon photonics and storage-controller chip firms, aiming to expand AI/data-center capacity and build a more self-reliant chip supply chain. Energy Storage Boom: Chinese integrators kept expanding in the global BESS market, with analysts citing China’s dominance in project integration even as US policy could tighten sourcing for tax-credit projects. Outbound Investment Rules: China’s new outbound investment regulation took effect, spelling out clearer rights and obligations and signaling tighter governance over overseas deals. Trade & Tech Friction: The US reportedly moves toward a ban targeting Chinese energy inverters, while China also tightened export controls on 40 Japanese firms tied to Japan’s military expansion. Solar/Agri-Industry Signals: China’s agricultural robotics maker XAG highlighted huge room for drone adoption in China, and a Guangzhou mango e-commerce story showed how mechanization and online logistics are reshaping farm incomes. Diplomacy With Industry Impact: Xi used the CPC’s 105th anniversary to pitch China’s development model for emerging economies, while Saudi and China foreign ministers discussed deeper cooperation across energy, industry and supply chains. Cross-Border Mobility: Kazakhstan’s FlyArystan launched a new Xi’an–Almaty route, adding to the “Air Silk Road” connectivity.

Aviation Shock in Beijing: A small plane crashed into CITIC Tower near Zhongnanhai, killing the pilot and injuring 13, while official details remain scarce and online footage was reportedly scrubbed. China-EU Trade Talks: Beijing and Brussels launched a consultation mechanism in Brussels, aiming to manage disputes via work streams on balance, export controls, IP and WTO reform. Clean Shipping Push: China started a sea-river intermodal zero-carbon route using a pure electric container vessel, cutting fuel use and emissions for Yangtze River Delta exporters. Power & Grid Security: The US is reportedly drafting a ban on Chinese-made solar inverters, citing grid disruption concerns, as China rejects the move as discriminatory. Industrial Momentum: China stocks rose on stronger factory activity and Xi’s push for “high-quality development,” with tech and chip-related shares leading. IPO Watch: China Resources New Energy begins trading July 2 after a blockbuster Shenzhen listing that could raise up to 24.5 billion yuan. Robotics for Homes: Ubtech unveiled its U1 emotional companion humanoid robot series, priced up to about $137,200, with pre-orders reportedly topping 11,000. Cooling Demand Abroad: Europe’s heatwaves are driving big jumps in sales of Chinese air conditioners and portable fans, with firms ramping output and rerouting logistics. Outbound Investment Rules: China’s new overseas investment regulation took effect, tightening compliance expectations for Chinese firms abroad.

Power Grid Buildout: China commissioned a ±800-kilovolt UHV DC line from Shaanxi to Anhui, aiming to move over 36 billion kWh a year with renewables making up more than half. AI for Industry: Zhipu AI open-sourced GLM-5.2, pitching big gains in long-horizon coding, while Meituan debuted LongCat-2.0 trained on domestic chips—both signals of China pushing homegrown compute. Manufacturing Demand Shift: As Europe swelters, Chinese firms are redesigning cooling gear for local lifestyles, including portable split ACs made for renters and older buildings. Trade Friction: China plans a 73.5% preliminary tariff on Canadian pea starch from July 1 after an anti-dumping probe, while China and the EU launched a trade and investment consultation mechanism covering export controls and IP. Geopolitics & Supply Chains: China added 40 Japanese entities to export controls amid “new militarism” concerns, and the U.S. is reportedly drafting a ban on Chinese energy inverters. Industrial Safety & Governance: Hunan tightened fireworks safety rules, and Taiwan authorities expanded Supermicro-related GPU smuggling searches tied to Nvidia chips. Energy Transition Materials: China’s non-ferrous metals boom is lifting profits as AI-linked demand lifts metals like tin for advanced chip packaging.

Biopharma Deal: Innovent Biologics won sole mainland commercialization rights for Eli Lilly’s breast cancer drug Verzenios (abemaciclib), with Lilly keeping manufacturing and supply. Energy Finance: The Arab Energy Fund plans its first onshore RMB Panda bond issuance in China by year-end or early 2027 after getting approval to raise up to RMB 10bn. Industrial Pulse: China’s factory activity returned to expansion in June (manufacturing PMI 50.3), boosted by AI-chip and computer export demand and front-loading orders ahead of expected US tariffs. Anti-“Involution” Policy: New rules in the energy storage sector cap supplier payment terms at 60 days and tighten inspection/acceptance timelines, aiming to curb disorderly low-price competition. FX Watch: The yuan firmed as exporters converted dollar receipts, with further direction tied to the US dollar. Auto Market Pressure: Toyota’s China sales fell 32% in May for a fourth straight month, reflecting weak demand and broader pressure on Japanese brands. EU-China Trade Talks: EU and China launched a new three-month dialogue to address a large trade deficit and reduce the risk of a trade war. Logistics Cost Shock: Global shipping rates jumped to the highest level since the Red Sea blockade as firms pulled in imports ahead of tariff changes. Robotics Reality Check: A rental market for China’s humanoid robots is growing, but operators say the tech still can’t fully replace human labor. China+1 Reality: Oxford Economics says the Philippines has captured virtually none of China manufacturing diversification so far, while Vietnam and India are the main winners. Capital Markets: Momenta kicked off its Hong Kong IPO subscription, targeting about HKD5.9bn.

China–Sudan Finance: Sudan and China signed an agreement to cancel four interest-free loans worth 344.52 million yuan (about $50m), with the Central Bank of Sudan and China Development Bank handling the accounting—small in size, but timed for a country hit hard by conflict. EU–China Trade Talks: The EU and China launched a ministerial platform and set an October push for “tangible results” on trade imbalances, export controls and IP, including a joint monitoring mechanism for trade flows. Japan Export Controls Escalate: China added 20 Japanese entities to its dual-use export control list, citing Japan’s “remilitarization,” tightening restrictions on supplying sensitive goods and tech. Gold Rules Shift: China is considering a new import-export regime for gold and gold products that would streamline administration and reduce PBOC involvement while keeping customs supervision. Aerospace & Logistics: China Southern’s cargo unit CSA Cargo signed with Boeing for seven widebody freighters (5 B777-8F, 2 B777F) to expand cross-border e-commerce logistics. AI & Cybersecurity: Zhipu AI’s GLM-5.2 is reported to match top US systems in cybersecurity bug-finding on benchmarks, adding pressure to US AI policy debates. Energy Storage Deal: Lineage Power signed a supply agreement for 3 GWh of LFP battery cells from Rongjie Energy Tech to support BESS expansion. Robotics Funding: AI2 Robotics and X Square Robots each raised new rounds, pushing valuations beyond 50 billion RMB (about $2.8b). Solar Industry Recognition: JinkoSolar was listed on Fortune China Technology 50, highlighting TOPCon/perovskite tandem efficiency and mass-production progress. Automotive Competition: Jeep plans a new Chinese-built 4x4 flagship and SUVs in Europe, using a next-gen global platform developed for off-road performance.

Aviation Deal: China Eastern and China Southern signed orders for 32 Airbus/Boeing jets worth about USD13 billion, with wide-body A330neo and B777 freighters/8Fs aimed at boosting intercontinental capacity. Robotics After-Sales: JD.com rolled out Europe-wide robot repair centers and “robot ambulance” services in the UK, Germany, France and the Netherlands, targeting faster fixes for humanoid and quadruped robots without shipping back to China. Autonomous Driving Rules: China co-led the UN’s first global technical regulation for autonomous driving systems, a move that could help Robotaxi firms sell into more markets with fewer rule-fragmentation headaches. Renewables in the Cold North: Northeast China’s first solar thermal power station started generating in Jilin, using molten-salt storage to cut curtailment and improve clean-energy utilization. Industrial Automation for Paper: ABB will supply an integrated drive system for Guangxi Jianhui Paper’s PM8 line, positioned as Asia’s largest extensible bag paper production project. Geopolitics & Trade Controls: China expanded dual-use export restrictions on Japanese entities and added more to a watch list, while Japan prepares tighter foreign investment screening. Logistics Corridors: Analysts say China is backing a Caspian Sea route to Europe that avoids Russia and can cut transit time to 15–18 days. Energy Materials: Canada granted C$7m to a Greenland molybdenum project, as Western supply-security concerns rise after China’s 2025 export controls.

Advanced Materials: CNBM’s Zhongfu Shenying Carbon Fiber has started three high-performance carbon fiber lines in Jiangsu, covering general-purpose, high-strength and high-modulus grades to plug gaps in high-end supply. Clean Energy & Storage: CATL expanded cooperation with CECEP on perovskite solar industrialization, sodium-ion storage and zero-carbon infrastructure, aiming to scale emerging low-carbon tech. Fusion Breakthrough: China’s “artificial sun” EAST completed full-performance testing of two key superconducting magnet systems, with core tech developed domestically. Industrial Momentum: China’s major industrial firms posted 18.8% profit growth in Jan-May 2026, helped by AI-related electronics demand. Auto & Consumer Tech: AISTALAND (Huawei+GAC) unveiled its GX7 intelligent five-seat SUV with an integrated one-touch electric cabin rest system; meanwhile, Apple is reportedly lobbying the Trump administration to buy memory chips from sanctioned CXMT as the global RAM shortage bites. Trade & Finance: Standard Bank became the first African institution authorized to clear renminbi payments, expanding RMB clearing across 19 countries. Geopolitics & Logistics: Global shipping faces a worsening officer shortfall, with BIMCO/ICS warning of a growing gap by 2030. Bilateral Investment: Bangladesh’s state media says 12 Chinese firms proposed $9.2b during PM Tarique Rahman’s China visit, including Mongla Port modernization and a Chattogram industrial park.

EV & Auto Demand: China’s NEVs kept accelerating, hitting 56.9% of new car sales in May as buyers chase lower running costs and software-driven cabins. Industrial Profits: China’s major industrial firms posted 18.8% YoY profit growth in Jan-May, but May’s 21.1% rise also signals recovery is slowing. AI Data Centers & Chips: With data centers straining power grids, Chinese chipmakers are pushing silicon carbide (SiC) to boost efficiency for next-gen AI infrastructure. Clean Energy Supply Chains: China’s clean energy exports keep expanding even amid US friction, with solar and battery shipments rising sharply. Logistics & Trade: China’s logistics sector grew 5.2% in Jan-May, while the China-Europe Railway Express logged 20,022 trips in 2025 and $67.7B in cargo. Cybersecurity: A Chinese-speaking APT is using a new TinyRCT backdoor in Southeast Asia, targeting state-owned firms, energy groups and government entities. Regional Tech Cooperation: China and Central Asia signed up for a satellite constellation for disaster monitoring, starting with five satellites. Geopolitics & Trade Corridors: Bangladesh-China ties deepen as Beijing backs connectivity plans like the Teesta and broader corridor concepts. US-China Tech Tensions: Apple is lobbying Washington to buy memory chips from a US-blacklisted Chinese supplier, highlighting the squeeze between AI demand and export controls. Safety & Governance: A small plane crash into Beijing’s tallest skyscraper sparked information suppression concerns.

China-Bangladesh Diplomacy & Industry: Bangladesh and China agreed to launch a Teesta River feasibility study, with technical and financial support, as Dhaka’s ties with Beijing are upgraded to a “China-Bangladesh Community with a Shared Future,” including a foreign-minister strategic dialogue and a “2+2” diplomacy-defence mechanism. Trade & Connectivity: Bangladesh’s commerce minister says deeper Chinese investment—plus an 800-acre Chattogram industrial park and a China-Myanmar corridor link—could cut the trade deficit and move goods to China in about 24 hours. EV Supply Chain: Geely’s Lotus will ship its first EVs to Canada in July under the Carney-Xi deal that allows up to 49,000 Chinese EVs annually at reduced tariffs. Semiconductor Geopolitics: Apple is lobbying the Trump administration to get clearance to buy memory chips from blacklisted Chinese supplier CXMT amid a global memory crunch. Fusion Tech Milestone: China’s “artificial sun” program says two key superconducting fusion magnets have passed full-parameter testing with 100% domestic production. Infrastructure Abroad: A Chinese consortium broke ground on a Montenegro highway section, aiming to strengthen north-south transport and regional connectivity. Aviation Safety Shock: A small plane crash into Beijing’s CITIC Tower killed the pilot and injured 13, triggering scrutiny after delayed public response and missing online footage. Energy Storage Trend: Coverage highlights energy storage—especially sodium-ion—as the key enabler for solar and wind reliability.

China-Bangladesh Water Cooperation: Beijing said Teesta River cooperation should be “free from third party influence,” offering support for feasibility work and areas like flood control, dredging and tech sharing. AI Industrial Shift: China’s AI giants are moving from traffic-style growth to building real capabilities as subsidy-era economics tighten; DeepSeek says it will double staff after a $7.4B funding round. Clean Energy Roadmap: China released a 2030 plan for a clean, low-carbon, secure energy system—pushing non-fossil energy to 25% of consumption and wind/solar to over half of installed capacity. Industrial Performance: Profits of China’s major industrial firms rose 18.8% in Jan-May, with May up 21.1%, led by electronics while automakers lag. US Tech Curbs: The FCC expanded bans on Chinese telecom and video surveillance gear, and Apple is lobbying to buy memory chips from a Pentagon-blacklisted Chinese supplier. Energy Supply Signals: China’s crude oil imports are set to fall further in June, reflecting weaker demand and EV-driven shifts. Geopolitics & Security: US lawmakers warn China is targeting US AI and tech via cyber, investment and academic channels; separately, reports say the US keeps a high-intensity South China Sea posture. Smart Manufacturing & Trade: China-Eurasia Expo spotlights green and smart tech for cross-border trade, while CISCE showcases clean-energy supply chain momentum.

Rural Revitalization via Clusters: China is pushing “Dexuan Cluster” style rural revitalization by merging nearby villages’ land, talent and planning so produce farming, food processing, agritourism and livestream e-commerce can scale together. Drug Safeguards for Youth: China is tightening safeguards as abuse of “non-scheduled addictive substances” like nitrous oxide rises among young people, even as traditional drug cases keep falling. Autonomous Driving Connectivity: MIIT approved two new 5G standards for high-level autonomous driving, covering deployment rules, performance requirements and on-site testing, effective Sept. 1, 2026. Rural Funds Misuse: A national audit says local governments misappropriated nearly 28 billion yuan of agricultural funds, diverting money to debt and other non-farm uses. AI Robotics Funding Surge: Embodied-AI startup Anyverse Dynamics raised over $200 million, reflecting fast-growing robotics and compute-heavy AI investment. Energy Transition Milestone: China’s installed power capacity hit 4.01 billion kW by end-May, with renewables at 61% and non-fossil at 62%. China-Bangladesh Deal: Beijing and Dhaka issued a 15-point declaration to deepen cooperation across trade, infrastructure, defense dialogue and Teesta river restoration. China-Zimbabwe Investment Push: Zimbabwe will host a Zimbabwe–China Investment Symposium in Harare on July 2 to turn partnership momentum into industrial and infrastructure commitments. China-EU Auto Trade Tension: The EU is preparing anti-subsidy tariffs on Chinese plug-in hybrids, while Chinese brands keep gaining in Europe. Beijing Aviation Shock: A small plane crash hit CITIC Tower in Beijing, triggering evacuations; authorities have not confirmed causes or casualties.

China–South Africa Regulatory Ties: South Africa’s trade and market regulators are set to meet China’s SAMR next week, aiming to sign MoUs on compulsory standards and accreditation, building on CADEPA and China’s zero-tariff move for 20 African countries. US Crackdown on China-Linked Tech: Polestar is barred from selling new cars in the US from 2027 under the Connected Vehicles Rule, while Hyperscale Data plans to deploy 143 Chinese humanoid robots in Michigan—amid rising Washington scrutiny of Chinese autonomous tech. Energy Storage Push: Deye will invest at least USD181m in Phase II of its Cixi commercial-and-industrial energy storage base, adding a 9 GWh production line to meet overseas demand. Grid Scale-Up: China’s installed power generation capacity has crossed 4 billion kW, with non-fossil sources now the majority, and electricity consumption expected to rise by about 600bn kWh annually in 2026-2030. Supercomputing Leap: China’s LineShine takes the No.1 spot on the TOP500 list, built with domestic CPUs and designed for both science and AI workloads. Bangladesh Industrial Drive: PM Tarique Rahman met Xi in Beijing, urging trade-gap reduction and export diversification, while also pushing Chinese investment and major project support. Solar Policy Shock: China’s solar export tax rebate removal is pushing the industry from volume-driven price wars toward higher-quality, system-focused manufacturing. Automotive Investment Watch: India is set to approve a roughly USD370m hybrid powertrain investment by Horse Powertrain, backed by Geely and Renault, as rules for bordering-country investors ease. Trade/Legal Pressure: A US antitrust class action targets alleged global shipping container output limits and price-fixing involving major Chinese makers.

EV Aftermarket Policy: China’s Ministry of Commerce rolled out 40-city auto circulation pilots plus 17 measures on modification, RV camping, classic cars, maintenance/insurance, motorsports and car rental—shifting demand from “new-car only” to full vehicle lifecycle services. Charging Buildout: China’s EV charging network hit 22.497m connectors by end-May, with private chargers growing faster than public and average power per connector rising to 48.89kW. Batteries Reality Check: CATL chairman Robin Zeng said solid-state batteries still sit around TRL4 on a 1–9 scale, with mass rollout blocked by cost and performance tradeoffs. Trade Talks: China and the US agreed to set up a trade council to discuss reciprocal tariff cuts and sector cooperation, including aircraft and agriculture. Maritime Compliance Row: China rejected claims that its inspections of Panama-flagged vessels target any country, saying actions fully comply with international conventions. Supply Chain Expo Momentum: European firms are actively engaging at Beijing’s CISCE, while Japan’s business chambers also attend despite political frictions. AI Hiring Push: DeepSeek announced a major hiring spree to expand core AI work, aiming at rapid progress toward AGI. Global Innovation Showcase: Summer Davos in Dalian put “innovating at scale” front and center, highlighting China’s role in scaling AI, robotics and green industries. China–Bangladesh Deals: Bangladesh PM Tarique Rahman invited Chinese firms to expand value chains and backed projects including the China-Bangladesh Friendship Hospital, with multiple MoUs signed. Caribbean Outreach: China’s growing Latin America and Caribbean engagement featured “Blue Silk Road” themes on marine protection and desalination opportunities.

AI Governance & Innovation Diplomacy: Premier Li Qiang warned that AI’s speed brings risks of “losing control,” while pushing innovation-led cooperation at Summer Davos in Dalian. Global Trade & Shipping Stability: China’s FM Wang Yi urged early normalization of Strait of Hormuz shipping to protect global supply chains, linking it to ceasefire consolidation. Tech Geopolitics in Court: Alibaba sued the U.S. Pentagon after being labeled a “Chinese military company,” joining a broader wave of legal fights over tech and defense links. Energy & Power Scale: China’s installed power generation capacity hit 4.01 billion kW by end-May, with non-fossil power now 62% of the total. EV Export Momentum: China’s EV exports rose nearly 50% in May to $9.2B, as overseas demand stays strong. Finance Risk Controls: ICBC and other banks tightened/paused individual precious-metals agency trading on the Shanghai Gold Exchange amid gold volatility. Biodiversity Infrastructure: China is building dedicated wildlife crossings over a major canal to reconnect habitats and reduce animal-structure avoidance. Regional Industry Links: South Korea and China agreed to simplify origin certification under their FTA, aiming to expand services and investment cooperation.