Xi heads to North Korea, tech transfer clampdown, inflation pickup

Chinese President Xi Jinping will make a state visit to North Korea next week, his first overseas trip this year and his first to the hermit nation since 2019.The trip will take place on Monday and Tuesday, Xinhua said without elaboration. Xi’s last official overseas excursion was to South Korea in October, when he met US President Donald Trump and attended a regional summit.Xi’s visit underscores a rebound in relations with China’s only formal ally following relative isolation during the pandemic and tensions over North Korea’s nuclear programme and its growing military cooperation with Russia. The journey is also a rare example of 72-year-old Xi travelling overseas, as he has increasingly remained in China and instead welcomed a flood of national leaders flying in to visit him.The trip puts Xi on track to meet North Korean leader Kim Jong-un, US President Trump and Russian President Vladimir Putin within about a month, underscoring China’s claim to be the only major power able to deal with all sides amid increasing global tensions. Putin and Kim were also both guests of honour at a military parade in Beijing in September.North Korea this week showed off a new facility for making weapons-grade uranium for atomic bombs. Kim said that nuclear forces will grow “at an exponential rate”, according to state media.Xi backed a political settlement over North Korea’s nuclear programme during his 2019 visit. Trump also met Kim three times in his first term as part of efforts to encourage disarmament.The week that was Tech rivalry: China tightened regulations on overseas technology transfers under new rules about cross-border investments. US President Donald Trump signed an executive order on Artificial Intelligence (AI) oversight after watering down requirements amid concerns about competition with China. The US also closed a loophole that inadvertently enabled exports of restricted AI chips to overseas units of Chinese companies. Chinese AI start-up DeepSeek secured about 50 billion yuan (US$7.4 billion) at a valuation of US$60 billion as it worked on its first external funding round. Central state-owned enterprises were ordered to double basic research spending by 2030. Trade tensions: The US proposed tariffs of up to 12.5 per cent on imports from 60 trading partners, including China and the EU, following a probe focused on forced labour. EU trade chief Maros Sefcovic called for “meaningful discussion” following a meeting with China’s top trade envoy, Li Chenggang, in Paris. China earlier warned the EU against implementing new trade restrictions after the bloc agreed on a tough new approach. US Treasury Secretary Scott Bessent said China is “very interested” in additional Boeing aircraft orders. China imposed new limits on beef imports from Brazil after ending restrictions tied to foot-and-mouth disease. Asia defence: US Defence Secretary Pete Hegseth toned down remarks about China in a speech at the Shangri-La Dialogue, following those he made last year at the same event. The head of China’s delegation, General Meng Xiangqing, avoided sharp criticism of the US. Japanese Defence Minister Shinjiro Koizumi denied that his country was reviving militarism. Donald Trump asked Chinese President Xi Jinping to help end the Ukraine war during their May summit, the South China Morning Post reported. Beijing announced sea patrols off Taiwan after Japan and the Philippines agreed to discuss maritime boundaries. The foreign ministry said “a few clowns” risked jeopardising bilateral ties after Philippine defence chief Gilberto Teodoro Jnr described China as a “severe threat”. It also condemned a visit to Taiwan by Czech Republic Senate president Milos Vystrcil and imposed travel bans on four New Zealand lawmakers who visited the island in May. Finance sector: Hong Kong banks’ mainland branches tightened rules for opening offshore accounts following a crackdown on capital controls. Ding Xiangqun was named party chief at the National Financial Regulatory Administration, which oversees China’s largest banks and insurers. Tiger Brokers reported a 17.5 per cent increase in first-quarter profits. The company was among three brokerages hit by Chinese fines tied to illegal offshore trading. Gold surpassed US Treasuries as the world’s biggest reserve asset. Soochow Securities will acquire Donghai Securities for 11.52 billion yuan in a deal combining two Jiangsu province brokerages. Corporate updates: US food giant General Mills agreed to sell its Häagen-Dazs ice cream shops in mainland China to a group led by Ningji Lemon Tea, extending a trend of overseas companies quitting the market. Singapore-based Food Republic will close its last Beijing food court on June 15. Food-delivery provider Meituan reported a third consecutive quarterly loss. US basketball star Stephen Curry signed an endorsement deal with Chinese sportswear maker Li Ning. The week ahead Economic signals: China inflation figures on Wednesday may show a 3.5 per cent increase in May factory-gate prices, the biggest jump in almost three years, according to economists polled by Chinese financial data provider Wind. Consumer prices may be up 1.4 per cent amid higher oil costs. Trade data, due on Tuesday, may show that export growth slowed to 12.1 per cent in May from 14.1 per cent in April. Imports likely cooled to 19.7 per cent from 25.3 per cent. Separately, China’s gaokao university entrance exams start on Sunday. Candidate numbers are down for a second year amid an increasingly tough job market for graduates. KMT visit: Cheng Li-wun, the leader of Taiwan’s main opposition Kuomintang (KMT), arrives in Washington on Tuesday as part of a two-week visit to the US. She will stay in the capital through Friday and have meetings with members of Congress from both parties and closed-door discussions with major think tanks. SpaceX IPO: Elon Musk’s SpaceX may start trading on the Nasdaq in the US on Friday after a record US$75 billion initial public offering. The sale may drain funds that have fuelled a global AI stock boom. Two other AI heavyweights, OpenAI and Anthropic, are also readying mega IPOs in the US, suggesting that Hong Kong will lose its title as the world’s largest IPO market this year. Separately, China Vanke creditors will vote by Tuesday on whether to extend four onshore bonds by a year, according to a Reuters report, citing unidentified people. The property developer won approval to extend three bonds in January. Business events: China will host import fairs in Belarus on Sunday and in Germany on Thursday, the first overseas events in a campaign to boost inbound trade. The 10th China-South Asia Expo opens in Kunming, Yunnan province, on Thursday. The six-day event focuses on areas including services, green energy, manufacturing, biomedicine and healthcare. The 30th Kunming Fair takes place at the same time. Hong Kong Financial Secretary Paul Chan Mo-po is among speakers at Bloomberg Invest in the city on Wednesday. Hong Kong travel: Delta resumes Hong Kong flights on Saturday after a nearly eight-year hiatus, with a daily nonstop service to Los Angeles. The last of 15 airlines will also complete a move to Hong Kong International Airport’s new Terminal 2 on Wednesday. The facility opened late last month as part of a HK$141.5 billion (US$18 billion) expansion launched in 2016. Arts and culture: The 28th Shanghai International Film Festival kicks off on Friday, with legendary Hong Kong actor Tony Leung Chiu-wai chairing the main competition jury. The festival wraps up on June 21. Separately, Because of You Ka Kui premieres in Hong Kong on Thursday. The documentary marks the 33rd anniversary of the death of Wong Ka-kui, the frontman of iconic Hong Kong rock band Beyond.