China’s civil aviation ambitions gain some lift

China’s export growth remained robust in July, at 23.9 per cent compared to June’s 27 per cent, as manufacturers continue to benefit from rising global demand for goods to support the Artificial Intelligence (AI) boom.Imports grew by 27.5 per cent in July, down from 36 per cent the month before, bringing the month’s trade surplus to US$112.5 billion, down from US$125.62 billion in June.The reading on exports exceeded the forecast of 22.88 per cent growth by economists polled by Chinese financial data provider Wind. Shippers front-loaded cargoes before higher US tariffs took effect on July 24, helping to maintain external trade momentum and keep growth on track at a time when China’s domestic economy is showing signs of weakness. China’s gross domestic product grew by 4.3 per cent in the second quarter of the year, missing the low end of the full-year target range of 4.5-5 per cent.China’s exports have remained resilient this year despite headwinds, including the war in the Middle East and increasing pushback from the European Union and the United States over perceived Chinese industrial overcapacity. July exports to the two trading partners were up by 16 per cent and 17.1 per cent, respectively, according to Chinese customs data released on Friday.Shipments of integrated circuits rose 116.6 per cent by value year on year last month, while those of hi-tech goods and mobile phones were up by 52.7 per cent and 26.6 per cent respectively. Exports of cars grew by 60.4 per cent as electric-vehicle (EV) makers continued a global sales push. Exports of rare earths, a source of geopolitical tensions, fell 30 per cent by volume.Related news: The US announced a 15 per cent tariff on imports of polysilicon, an input in the manufacture of semiconductors and solar panels, and related products. The order, signed by President Donald Trump on Thursday, also established price floors to protect US manufacturers and curb Chinese imports. “We’re setting prices so that the Chinese can’t dump any more, and we’re setting tariffs to say build it here,” Commerce Secretary Howard Lutnick said. The week that was US-China tensions: China tightened export controls on drones, sanctioned seven firms and launched a national security investigation of imported printers after the US added 43 Chinese companies to a blacklist targeting alleged forced labour in Xinjiang. It also launched a cybersecurity review of US technology firm Palo Alto Networks. Beijing said it would ban those caught violating export controls or technology transfer rules from leaving the country. US officials were reported to be preparing to ban imports of new Chinese optical transceivers, as Trump accused China of fuelling a growing backlash in the US against AI data centres. Chinese Premier Li Qiang signed a State Council decree to tighten protections for chip designs. Economic data: Services activity in China expanded at its weakest pace in nearly two years, with a private purchasing managers’ index (PMI) slipping to 50.4 in July from 54.1 the month before; a reading above 50 signifies expansion. RatingDog’s measure of manufacturing PMI rose at its slowest pace in four months, coming in at 50.9 compared to June’s 51.7. China’s debt-to-GDP ratio fell by 1.1 percentage points in the second quarter, the first such drop since 2022. Chinese EV makers reported weak sales for July. Tax authorities began enforcing a 20 per cent personal income tax on gains from offshore insurance policies. South China Sea: Beijing had a “rich and powerful” toolkit against those who “make waves” in the South China Sea, China’s military mouthpiece warned, after Manila filed an application to the United Nations to extend its continental shelf. The People’s Liberation Army and Chinese coastguard held joint naval and air drills near the disputed Scarborough Shoal. In its latest defence white paper, Japan warned of China’s growing ability to sustain maritime operations, and began flight-testing an upgraded long-range anti-ship missile. China confirmed the deaths of two coastguard personnel in a collision with a Philippine vessel during a clash last year. Energy security: China set a target of generating 50 per cent of its electricity from non-fossil-fuel sources and expanding nuclear power generating capacity to 110 gigawatts by 2030 in a newly released five-year plan for energy security. The amount of Wind and solar power China wasted in the first half of 2026 was enough to cover all new electricity demand in the country, a report said. Beijing’s outsize footprint in commodities is helping cushion international energy shocks, investment bank Goldman Sachs said. Yuan treasury bonds: China raised 15 billion yuan (US2.22 billion) through a sovereign bond auction in Hong Kong, as the head of China’s top securities watchdog hailed a “milestone” start to the trading of five-year China government bond futures in the city. China’s foreign exchange regulator pledged to further open up the forex market. The Asian Infrastructure Investment Bank is looking to tap into Hong Kong’s digital finance ecosystem as it targets a record US$11 billion in fundraising this year. Corporate news: HSBC said it would resume share buy-backs, and earmarked US$1 billion to do so, after second-quarter pre-tax profits rose by 60 per cent year on year. Swire Pacific logged a record first half on the back of strong showings by majority-owned Cathay Pacific Airways and subsidiary Swire Properties. Hotpot chain Haidilao said it would diversify its business into hamburger and sushi stores. China’s SAIC Motor renewed its joint venture with General Motors for another 20 years. The week ahead Robotics IPO: Subscriptions for Unitree Robotics’ 6.1 billion yuan initial public offering on Shanghai’s Star Market begin on Monday, with final results set to be published on Friday. The company plans to sell 40.45 million shares, or 10 per cent of its enlarged share capital, priced at 150.8 yuan per share. It has yet to set a date for its trading debut. Following the market close on Friday, index compiler MSCI will add ChangXin Memory Technologies to its MSCI China all Shares Index after the company’s recent listing. Smartphone maker Honor will release its Robot Phone on Wednesday, featuring a camera mounted on a gimbal that retracts into the phone’s body when not in use. Earnings releases: Internet giant Tencent Holdings will release its interim earnings on Wednesday as the company continues its pivot towards AI. Shanghai-listed chip champion Cambricon Technologies and GPU specialist Moore Threads will release their earnings for the first half on Saturday and Monday respectively. Hong Kong tycoon Li Ka-shing’s CK Hutchison Holdings – embroiled in a simmering Panama ports dispute – CK Infrastructure Holdings and Hutchison Telecom will also release their earnings next week. Factory gate prices: China may record a fifth straight monthly increase in its producer price index on Sunday, with economists polled by Chinese financial data provider forecasting a July reading of 3.96 per cent, down slightly from June’s 4.1 per cent growth. Consumer prices may rise by 0.84 per cent, versus a 1.0 per cent rise in June. The China Passenger Car Association may release car sales for July. International service debut: Beijing’s home-grown C919 passenger jet will commence international commercial service on Wednesday, flying between Beijing and Mongolia’s capital, Ulaanbaatar, on a route operated by national carrier Air China. Ahead of this, a high-altitude variant of the jet completed its maiden flight. AI scrutiny: US food delivery giant DoorDash has until Friday to answer questions from US lawmakers about the company’s use of Chinese AI models, after one of the firm’s co-founders said on social media that it had experimented with a model from Chinese start-up Moonshot AI. The summons is part of a joint US congressional investigation of the national security risks posed by the use of Chinese open-weight AI models by American firms. Hong Kong development: A two-month public consultation on Hong Kong’s first five-year plan closes on Friday. The consultation covers six main areas, including the city’s Northern Metropolis development that is set to leverage integration with the Greater Bay Area linking the city to Macau and nine cities in Guangdong province. Officials have pledged to deliver the plan in the third quarter.