US-China Trade Truce Extension and Talks
Top 5 China Business & Tech News – July 27, 2025
1. China’s Industrial Profits Continue Declining
China’s industrial sector is under pressure as profits fell another 4.3% year-on-year in June, with a 1.8% drop for the first half of 2025. Producer deflation and fierce price competition—especially in industries like automotive and solar—are squeezing margins, prompting government commitments to stricter regulations and possible capacity reductions.
2. US-China Trade Truce Extension and Talks
The United States and China are expected to extend their current tariff truce by 90 days, ahead of new high-level trade negotiations in Stockholm, according to SCMP. Beijing is arriving emboldened, seeking further tariff relief and leveraging its strength in supply chains such as electric vehicle batteries and rare earths. A US business delegation is also set to visit China for senior-level talks this week. (Read more details at the end of this newsletter)
3. China Launches Push for Global AI Governance
Chinese Premier Li Qiang announced plans to establish a “World AI Cooperation Organization” to coordinate global regulations for artificial intelligence. China aims to promote open-source AI collaboration internationally and is positioning itself as an alternative to US-led approaches, seeking to set the agenda for safe and shared AI development.
4. Baidu’s “Digital Humans” Signal China’s AI Ambitions
Baidu unveiled a new generation of “digital humans”—AI-powered virtual agents capable of hosting live e-commerce broadcasts. More than 10,000 businesses are reportedly using this technology, underlining China’s rapid progress in generative AI and its broad commercial applications. Tech leaders see these AI tools as vehicles for enhancing productivity, despite open questions about employment impacts.
5. Chinese Tech and EV Startups Drive Market Momentum
Huawei has reclaimed the #1 spot in China’s fiercely competitive smartphone market, displacing rivals and triggering subsidy-driven price wars. Chinese startups in strategic tech fields—AI, chips, and electric vehicles—continue to attract robust state and private investment. Key moves include Xpeng Motors securing a $700M investment from Volkswagen and Alibaba’s AI cloud unit prepping for a major Hong Kong IPO. July also saw a strong regulatory focus on data security and support for more eco-friendly technology upgrades.
Here is more details about the US-China trade talks from SCMP:
Beijing and Washington are expected to extend their tariff truce by another three months at trade talks in Stockholm beginning on Monday, according to sources close to the matter on both sides.
China and the United States agreed in May to remove most of the heavy tariffs levied on each other’s goods for 90 days while continuing trade negotiations. That suspension is set to expire on August 12.
During the third round of trade negotiations between the world’s two biggest economies, both will expound their views on major sticking points – such as the US’ concerns over China’s industrial overcapacity – rather than achieve specific breakthroughs, the sources said.
One source said that, during the expected 90-day extension, the two nations will commit to not impose additional tariffs on each other, nor escalate the trade war by other means.
According to three people familiar with Beijing’s position, while the earlier discussions in Geneva and London focused on “de-escalation”, in the latest meeting the Chinese delegation will also press Trump’s trade team on fentanyl-related tariffs.