China vows support, warns of external shocks amid trade frictions | East Asia Tonight (Apr 25)

Key Concepts

• US Tariffs Impact on China and Asia
• China's Economic Response: Boosting Domestic Consumption
• US-Iran Nuclear Talks
• India-Pakistan Tensions in Kashmir
• China's Soft Power in Southeast Asia: Students, Retirees, and Businesses
• Apple's Shift from China to India
• Singapore General Election Campaign
• Pope Francis's Funeral Preparations

China's Response to US Tariffs

• Main Topic: China's top policymakers are committed to supporting companies and workers most affected by US tariffs.
• Key Points:
  • Officials plan to stabilize jobs and markets.
  • They will ease monetary policy and expedite debt issuance.
  • The Politburo calls for preparing for a "worst-case scenario" due to increasing external shocks.
  • China aims to boost consumer spending to reinvigorate its economy.
  • China denies ongoing trade talks with the US, despite US claims to the contrary.
  • China warns of insufficient global economic growth at the G20 meeting.
• Examples:
  • China is considering rolling back 25% tariffs on some products, including medical equipment, industrial chemicals (ethane), and aircraft leasing payments.
  • Potential tariff waivers on at least eight US semiconductor categories.
• Arguments:
  • China is strategically trying to stabilize growth and send a low-key message to Washington that it's not closing the door on trade talks.
• Quotes:
  • Chinese leaders: "We need to bolster local domestic growth."
• Technical Terms:
  • Monetary Policy: Actions undertaken by a central bank to manipulate the money supply and credit conditions to stimulate or restrain economic activity.
  • Debt Issuance: The process of creating and selling new debt instruments (e.g., bonds) to raise capital.
• Data:
  • China is considering rolling back 25% tariffs on some products.

Boosting Domestic Consumption in China

• Main Topic: China's efforts to boost domestic consumption amid shaky exports and low foreign investment.
• Key Points:
  • Boosting consumption is a "mantra" of the Chinese leadership.
  • They've tried cutting interest rates, handing out consumption vouchers, and providing tax breaks for big-ticket items.
  • Easing property restrictions to encourage home buying.
• Challenges:
  • Weak consumer confidence due to a soft job market and stagnant real wages.
  • Chinese people are saving more than spending.

Asian Economies Scrambling

• Main Topic: Other Asian economies are also reacting to the trade tensions.
• Key Points:
  • South Korea is in trade talks with the US, hoping for tariff exemptions.
  • Japan is compiling an emergency economic package to limit the impact of duties.
  • China is framing the issue as a global problem, not just a bilateral trade dispute.
• Examples:
  • Japanese Prime Minister Ishida issued an emergency budgetary package to bolster the economy and buffer it from tariffs.

US-Iran Nuclear Talks

• Main Topic: China supports the International Atomic Energy Agency's role in resolving the Iran nuclear program issue.
• Key Points:
  • China, Russia, and Iran jointly met with the UN agency ahead of a third round of nuclear negotiations between the US and Iran.
  • The talks aim to determine how much uranium Iran should be allowed to enrich, what to do with its ballistic missile program, and which sanctions should be eased or lifted.
  • The US is concerned about Iran enriching uranium to levels beyond civilian use.
  • Military action remains a possibility.
• Arguments:
  • The US, Europeans, and Israelis believe Iran's enrichment activities suggest weaponization or leverage in negotiations.
• Quotes:
  • President Trump: "I'm for stopping uh Iran very simply from having a nuclear weapon."
  • Israeli Prime Minister Benjamin Netanyahu spoke about the possibility of targeting Tyran itself.
• Technical Terms:
  • JCPOA (Joint Comprehensive Plan of Action): The Obama-era deal that placed restrictions on Iran's nuclear program in exchange for sanctions relief.

India-Pakistan Tensions

• Main Topic: Rising tensions between India and Pakistan following a terror attack in Kashmir.
• Key Points:
  • Pakistan threatens to withdraw from the Shimla Agreement after India's suspension of the Indus Waters Treaty.
  • Troops exchanged fire along the de facto border (Line of Control).
  • India intends to take tougher measures.
• Arguments:
  • Experts fear that revoking the Shimla Agreement could lead to a full-scale war.
• Technical Terms:
  • Shimla Agreement: An agreement signed after the 1971 war that demarcated a de facto border in Kashmir called the Line of Control.
  • Line of Control: The de facto border between Indian-administered Kashmir and Pakistan-administered Kashmir.

Apple's Shift from China to India

• Main Topic: Apple is reportedly expediting its shift away from China, aiming to source all US iPhones from India.
• Key Points:
  • Apple is increasing production in India, where it now makes 20% of its iPhones.
  • The company may shift the assembly of all US-sold iPhones to India as soon as next year.
  • This is to avoid potential tariffs on Chinese imports.
  • Apple sells more than 60 million iPhones in the US annually.
• Challenges:
  • Apple would need to double its output in India to meet the target.
  • The company would have to give up its world-beating production line in China.
• Data:
  • Apple sells more than 60 million iPhones in the US annually.
  • Tariffs on India are much milder at 26%.

Other Business News

• South Korea and Japan Trade Talks with the US: South Korea and Japan are working on trade deals with the US to avoid tariffs.
• Chinese Tech Firm BYU's AI Chip Cluster: BYU has switched on its self-developed AI chip cluster, powered by 30,000 P800 Kundland chips, for training large language models.
• Hong Kong's Retail Downturn: Hong Kong's retail sales declined for the 12th straight month in February, falling by 13% year-on-year. Innovation is seen as key for retailers to attract customers.

China's Soft Power in Southeast Asia

• Main Topic: China's growing soft power in Southeast Asia, explored through the lens of ethnic communities, students, and retirees.
• Key Points:
  • A 2025 survey indicates the US has dislodged China as the region's top choice if countries were forced to take a side, but China's soft power is steadily rising.
  • Ethnic Chinese communities in Vietnam are adapting to the growing presence of Chinese businesses.
  • Chinese students are increasingly choosing Southeast Asia for education due to cost, stability, and a sense of belonging.
  • Chinese retirees are finding affordable living and good healthcare in cities like Chiang Mai, Thailand.
• Examples:
  • A restaurant owner from Ho Chi Minh City operates a restaurant in Bac Ninh, serving Chinese experts.
  • A Chinese student in Malaysia chose it over the US and UK for its cultural diversity and stability.
  • Chinese retirees in Chiang Mai enjoy affordable living and good healthcare.
• Challenges:
  • Competition from Chinese businesses in Vietnam.
  • Concerns about housing prices and regulation of entertainment venues.
  • Questions about integration of Chinese students and access to resources for local students.
  • Rising property prices and potential strain on healthcare systems due to Chinese retirees.
  • Circumvention of property ownership laws by some Chinese nationals in Thailand.
• Quotes:
  • Singapore student at Peking University: "She was amazed at how open her Chinese classmates are."
• Data:
  • Malaysia has seen a five-fold increase in Chinese students from 2020 to 2024.

Singapore General Election Campaign

• Main Topic: Campaigning actions ramp up ahead of the general election in Singapore.
• Key Points:
  • PAP candidate Alex Yam criticizes opposition parties for demanding GST rollbacks without providing funding alternatives.
  • SPP Chief Steve Chia proposes distributing government budget surpluses as CDC vouchers to tackle inflation.
  • PM Lawrence Wong says Singapore will strengthen trade and investment links with other countries.

Pope Francis's Funeral Preparations

• Main Topic: Final preparations for Pope Francis's funeral.
• Key Points:
  • The coffin of the late Pontiff will be sealed.
  • More than 128,000 people have paid their respects.
  • 50 heads of state and 10 monarchs will attend the funeral.

Synthesis/Conclusion

The news report covers a range of critical issues in East Asia and beyond. China is grappling with the impact of US tariffs and is attempting to stimulate its domestic economy while navigating complex international relations. Tensions remain high between the US and Iran over the nuclear program, and between India and Pakistan over Kashmir. China's influence in Southeast Asia is growing through various channels, presenting both opportunities and challenges for the region. Apple's potential shift of iPhone production from China to India highlights the ongoing adjustments in global supply chains. Finally, the report touches on the upcoming elections in Singapore and the preparations for Pope Francis's funeral, underscoring the diverse range of events shaping the world today.