Asia Stocks Climb Ahead of US CPI & Trump-Xi Trade Talks | The Asia Trade, 10/24/25

Here's a comprehensive summary of the provided YouTube video transcript, maintaining the original language and technical precision:

Key Concepts

• U.S.-China Trade Relations: Confirmation of a meeting between Presidents Trump and Xi, potential de-escalation of trade war, tariffs, export controls, rare-earth minerals, technology self-sufficiency.
• Global Economy & Markets: Asian stocks, oil prices, U.S. inflation data (CPI), treasuries, gold, Korean Won, Bank of Korea interest rates, EU response to trade controls, corporate earnings, private credit market, U.S. government shutdown.
• Technology & Supply Chains: Tech self-reliance (China), AI, aviation, internet, semiconductors, lithography, metrology, photoresist, EV batteries, consumer electronics, chips production, Oracle data centers, Anthropic partnership with Google.
• Rare Earth Minerals: China's dominance, U.S.-Australia deal, Australian Strategic Materials (ASM), supply chain integration, technology restrictions.
• Intel's Comeback Plan: Upbeat forecast, PC market, AI PCs, server market, foundry segment, manufacturing in the U.S.
• China's Economic Policy: Communist Party Plenum, tech self-sufficiency, consumption boost, dual circulation, fiscal policy, monetary policy, property market stabilization.
• Geopolitical Risks: Ukraine war, Taiwan, potential military activity, disruption of shipping lanes.
• Illegal Activities: Insider trading in the NBA, illegal sports betting, mafia involvement in poker games.

U.S.-China Trade Relations and the Trump-Xi Meeting

Confirmation of Meeting and De-escalation Hopes: The White House has confirmed that President Trump will meet with Chinese President Xi Jinping next Thursday on the sidelines of the APEC Summit. This meeting is highly anticipated as leaders look to de-escalate a simmering trade war. It will be their first in-person meeting since 2019.

Key Agenda Items and Expectations: Minmin Low, China Correspondent, highlighted a long list of potential discussion points, including geopolitical flare-ups like the Ukraine war and Taiwan, tariffs, rare-earth minerals, the threat of further U.S. software export controls, and fentanyl. President Trump has indicated it will be a long meeting and expressed optimism for a positive outcome. However, many market participants are not as optimistic, expecting an extension of the trade truce (which expires November 10th) or an agreement to continue dialogue, rather than a sweeping breakthrough deal.

Rare Earths as Leverage: China's announcement of new controls on rare-earth minerals, vital for industries like electronics and military systems, adds to global uncertainty. This move is seen as a reaction to U.S. actions. The EU is considering using its anti-coercion tool to counter such export controls, which could escalate trade tensions into a multi-pronged trade war for China. China's dominance in the rare-earth supply chain has significant implications for everything from EV batteries to consumer electronics and chip production.

U.S. Export Controls and China's Response: The U.S. has implemented export controls restricting China's access to semiconductors and equipment, particularly for artificial intelligence. This has accelerated a push by both nations for greater self-sufficiency. China is also increasing its reliance on or through other key trading partners, such as biting the bulk of its soybean imports from South America instead of the U.S.

Quotes:

• President Trump: "I think when we finish our meetings in South Korea, China and I will have a really fair and really great trade deal together. I want to be good to China. I love my relationship with President Xi."
• Chinese Official (paraphrased): "Trade wars have no winners and are not in the interest of either party. Both sides should resolve relevant issues based on equality and mutual benefit."

China's Communist Party Plenum and Economic Priorities

Dominant Themes: Tech Self-Sufficiency and Consumption: The recent China Plenum highlighted two major priorities: technological self-sufficiency and boosting consumption. China aims to be a powerhouse in AI, aviation, and the internet, continuing to lean heavily on "new quality productive forces." This push for advanced manufacturing, currently contributing 25% to GDP, is expected to be a point of contention with the U.S., which accuses China of over-reliance on this sector for growth.

Consumption as a Key Focus: Consumption was mentioned four times in the communiqué, a significant increase from previous years, indicating it's a focus for the next five years. The government aims to increase its share of consumption, which was 40% of GDP last year. However, the tone regarding public spending on basic welfare is cautious, with the government stating it will act "within its means."

Dual Circulation Model: The concept of "dual circulation" was discussed, suggesting a pivot and recalibration within this model. While the past five years leaned on external circulation (exports), the next five years will likely see an expansion of the domestic market.

Challenges in Boosting Consumption: The property market's doldrums present a significant challenge to lifting consumption. While cyclical support is needed, structural expansion of domestic markets is also emphasized. The communiqué suggests a focus on growing the pie rather than redistributing it.

Fiscal and Monetary Policy Outlook: Fiscal policy is expected to bear the brunt of supporting consumption, with potential expansionary stances in 2026. Monetary policy is seen as having less room but is expected to lean towards easing, with gradual rate cuts and reserve requirement ratio (RRR) cuts still on the cards.

Absentee Rate and Anti-Corruption Probe: A notable takeaway was the high absentee rate (37 individuals) from the plenum, the highest since the years of the revolution, indicating the ongoing widespread nature of the anti-corruption probe.

Quote:

• Asia Economist at Fidelity International (paraphrased): "In the next five years, I would envision them... expanding the domestic market. This is perhaps a pivot and recalibrating within the grand scheme of the dual circulation model."

Intel's Comeback Plan and Semiconductor Industry Dynamics

Upbeat Forecast and PC Market Optimism: Intel shares jumped following an upbeat forecast, signaling progress on its comeback plan. The company's guide for 2025 projects 290 million PCs, a high mark compared to recent years, with optimism around AI PCs. Intel has historically dominated the PC market.

Server Market and AI Integration: While the server market remains relatively small for Intel compared to competitors like NVIDIA, there's potential for collaborative aspects, with NVIDIA investing in Intel. The earnings call highlighted that even traditional CPUs are being refreshed due to AI data center build-ups.

Foundry Segment and Investment: Intel has faced pressure due to cash burn in its foundry segment. The hope is that alliances will lead to manufacturing in the U.S. for leading-edge chips. While the foundry segment didn't perform strongly this quarter, stabilizing gross margins and alliances offer a positive outlook.

Challenges and Customer Demand: The core struggle for Intel remains its ability to produce products that customers want. However, the strong PC market outlook and the demand for older PCs, not solely AI PCs, drove the recent beat. The rollout of AI functionality is prompting PC upgrades.

Quote:

• Global Head of Tech Research at Bloomberg Intelligence (paraphrased): "The positive data points were more about the PC market... They seem to be very optimistic about AI PCs."

Global Semiconductor Supply Chain and Geopolitical Tensions

China's Tech Self-Sufficiency Push: China's drive for technological independence predates current export controls, with significant investment in its semiconductor ecosystem dating back to the 2010s. While U.S. export controls have inflicted damage, they have also pushed China to rely more heavily on its domestic ecosystem.

Lithography Choke Point: A major challenge for China's self-sufficiency is the "lithography choke point," the most technically complex aspect of semiconductor manufacturing. Despite this, China is making progress in lithography and other areas like metrology.

Multilateral Ecosystem and Japanese Dominance: The Western semiconductor supply chain is a multilateral ecosystem, with Japan playing a unique role, particularly in photoresist. Recent developments, like the Australia-U.S. critical minerals deal, suggest a move towards more multilateral policy coordination towards China.

Quote:

• Bloomberg Analyst Michael Dunn (paraphrased): "If China really wants to protect its technological innovations and insulate itself from U.S. export control moving forward, it needs to make an entire ecosystem change."

Oil Prices and U.S. Inflation Data

Oil Price Spike: Oil prices spiked ahead of delayed U.S. inflation data, driven by U.S. sanctions on Russian energy producers. This has upended the market and raised prospects for supply disruptions. Energy stocks are leading gains.

U.S. CPI Data and Market Reaction: Traders are cautious ahead of the U.S. CPI data, which is set to be released later today. A knee-jerk reaction is possible, but investors may look past it given other positive factors. The quality of the data could be affected by the ongoing U.S. government shutdown.

Inflation Trajectory: The expectation is for a tariff-related spike in inflation, but market participants have been anticipating this. The view is that core PCE inflation will peak around a low of 3% by year-end and then converge towards the 2% target.

Quote:

• Annabelle (host, paraphrased): "We might see a knee-jerk reaction [to U.S. CPI data]. Investors may look past it, given that you have lots of different positive factors."

Bank of Korea and Korean Won

Interest Rates Unchanged: The Bank of Korea left its key interest rates unchanged at 2.5%, tempering hopes for easing expectations for the rest of the year.

Korean Won Decline: The Korean Won dropped to its lowest level in six months, alongside a slide in equities.

EU Response to Trade Controls

Anti-Coercion Tool: Emmanuel Macron has reportedly told EU counterparts that the EU should use its strongest trade tool, the anti-coercion tool, to deal with rare-earth export controls. This tool was created to counter coercion from other countries and allows for trade measures, financial measures, and limiting access to EU funding or public procurement.

Escalation of Trade Tensions: If the EU takes these measures, it would represent a significant escalation of trade tensions with China, potentially leading to a multi-pronged trade war with both the U.S. and the EU.

Quote:

• EU Trade Chief (paraphrased): "They cannot accept the current situation but they don't want to escalate. They are hoping to find a diplomatic solution."

Corporate Earnings and Private Credit Market

Intel's Earnings Beat: Intel's upbeat forecast and strong earnings are seen as a positive sign for the tech sector, echoing the consistent theme of strong U.S. earnings expectations.

Private Credit Market Concerns: Despite warnings from figures like Jamie Dimon about "cockroaches" in private credit, KKR co-founder expressed less concern about systemic risk. He emphasized that firms without proper "drivers licenses" in private credit might face problems, but this is not systemic. The recent bankruptcies of two major banks did not involve private credit.

Quote:

• KKR Co-Founder (paraphrased): "I don't find it systemic. We don't take deposits. That's really what it is. Private credit."

Other Notable Developments

• Binance Co-Founder Pardon: President Trump pardoned Binance co-founder at the request of "a lot of good people," signaling a friendly stance towards the crypto industry.
• Oracle Data Center Debt Offering: Banks are preparing a record $38 billion debt offering to fund Oracle data centers in Texas and Wisconsin.
• Anthropic Partnership with Google: Google will supply up to one million specialized AI chips to Anthropic in a deal valued at tens of billions of dollars, bolstering Anthropic's computing capacity and Google's role as an investor.
• NBA Insider Trading Allegations: Arrests were made in connection with alleged illegal sports betting schemes, including insider trading in the NBA. Prosecutors allege intricate schemes involving rewired card-shuffling machines and real-time data relay to players, with NBA coaches and players allegedly involved. The schemes also reportedly involved five New York mafia families.
• EU Decision on Frozen Russian Assets: The EU has postponed a decision on using frozen Russian central bank assets, with talks stalled over liability concerns.
• Ukraine's Stance on Territorial Swaps: Ukrainian President stated he will not recognize any territorial swaps during potential peace negotiations with Russia.
• Japan CPI Data: Japan's core CPI for September rose 2.9%, in line with estimates, while headline CPI also rose 2.9%, softer than consensus. This data is being digested alongside policy discussions and potential repricing in JGBs.
• Australian Strategic Materials (ASM): ASM is positioned as an alternative to China's rare-earth supply chain. The company is developing alternative raw material sources and its own technologies, anticipating increased demand due to Chinese restrictions. They have secured significant government support for facilities in South Korea and are in discussions for a U.S. facility.
• PBOC Advisor on China's Economy: An advisor to the People's Bank of China (PBOC) stressed the need for Beijing to stabilize the property market and improve economic indicators, noting that uncertainty around the Trump trade war is hurting China's business outlook. They recommended more fiscal support and recapitalization of households and financial institutions.

Synthesis/Conclusion

The transcript highlights a complex and interconnected global economic landscape shaped by geopolitical tensions, technological advancements, and evolving economic policies. The upcoming Trump-Xi meeting offers a potential de-escalation in the U.S.-China trade war, with rare-earth minerals and technology self-sufficiency being key discussion points. China's plenum signals a continued focus on tech advancement and a growing emphasis on domestic consumption, though challenges remain in implementation. Intel's comeback bid, driven by the PC market and AI integration, provides a positive note for the tech sector, while broader semiconductor supply chain dynamics are increasingly influenced by geopolitical considerations. Market participants are closely watching U.S. inflation data and central bank policy decisions, with a cautious optimism prevailing amidst ongoing uncertainties. The transcript also touches upon significant developments in illegal activities, corporate finance, and the critical minerals sector, underscoring the multifaceted nature of global economic news.