Lost in translation? | The weekly recap

Following their Beijing summit, the US and China once again have diverging accounts of what they agreed to.

With one crucial exception: stability.

• For all that was conflicting or unclear, both referred to “strategic stability.”

The key question: Will differing ideas of everything else they agreed to undermine the two sides’ agreed common interest?

• This time – in contrast to the messy Busan situation last year – we think not.

Let’s take stock of the accounts on the critical minerals front.

Washington's read: “China will address U.S. concerns regarding supply chain shortages related to rare earths and other critical minerals.”

• The readout went further stating that “China will also address U.S. concerns regarding prohibitions or restrictions on the sale of rare earth production and processing equipment and technologies.”

That all sounds lovely, except:

• China hasn’t publicly confirmed any of this.
• The US and China very likely have different views on what it means to “address” these concerns.

Beijing's read: The two sides will “continue to implement the results of prior consultations and reached a positive consensus on relevant tariff arrangements."

• Beijing is also clearly keen to extend the truce over October export controls – and may view that as enough to “address” US concerns.
• It’s unlikely the White House will feel similarly.

This kind of divergence in bilateral readouts is genuinely concerning – and has risked undermining progress before.

• Following the Busan summit last October, the White House unilaterally declared that China had agreed to the “de facto removal” of export controls on rare earths and other critical minerals.
• A few months later, however, Washington was framing the issue very differently, effectively conceding that China’s export control regime would remain in place.
• Companies that had expected a meaningful rollback instead found themselves facing a much narrower loosening than the original White House framing implied.

Most businesses and governments have drawn the right lesson from Busan: Washington's statements on bilateral agreements often reflect domestic political needs, not full bilateral alignment.

The result is, somewhat ironically, decreased commercial and diplomatic risk:

• Corporates aren’t taking the White House at face value, meaning when White House statements prove to have overstated agreements, fewer corporate plans get derailed. 
• This also means that, for better or worse, China retains effective market-shaping power. Beijing's official position, whenever it comes, will be the one that actually moves supply chain decisions. 

But that doesn’t mean that continued rhetorical divergence won’t cause problems.

The White House's specific mention of indium is a case in point: Indium is a critical input to produce wafers and components that underpin fibre optic communications, lasers, and high-speed chips. 

• It wasn't part of last year’s Busan truce, which saw China limit export controls on a range of critical minerals.
• This makes its appearance in the White House's list of named priorities something of an outlier. 

Beijing, meanwhile, has said nothing about it. The gap between what Washington is claiming and what Beijing is prepared to deliver on indium is wide – and it won't be bridged by allowing each side to spin the summit differently for its home audience.

Still, there is a bigger-picture upside here: Each side is, for now, allowing the other to frame outcomes for its own domestic audience.

• The White House claims specific, politically salient concessions. Beijing claims success pushing a broader stabilization doctrine.
• Mutual tolerance for domestic signalling, despite the divergence, has created  essential breathing room for baseline stability to recover.

Bottom line: Both sides have a strong enough interest in stability that neither is really angling to disrupt the equilibrium.

• And for now, that is good enough. 

The situation could deteriorate rapidly, though, if Washington pushes more forcefully on unresolved issues like the (still enforced) indium and April 2025 rare earth controls. 

• Whether it does so, and how Beijing responds, will tell us far more about the durability of this relationship than any post-summit readout.

Cory Combs, Head of Supply Chain and Critical Minerals Research, Trivium China

What you missed

US-China

In a May 15 interview, Trump said that “nothing’s changed” re: Washington’s Taiwan policy – but then added: “I’m not looking to have somebody go independent.”

• The comments push the limits of the official US position of “not supporting” Taiwanese independence – and inch pretty close to Beijing’s preferred language of “opposing” it.
• Our latest Quick take – available exclusively to our subscribers – breaks Trump’s comments down in more detail.

On Wednesday, FT reported that China added Nvidia’s RTX 5090D V2 graphics card – a China-specific version of Nvidia’s top gaming GPU – to its customs ban list on May 15.

• Chinese AI developers have been using the 5090D V2 as a workaround since they can’t access Nvidia’s more powerful AI chips
• With this move, Beijing appears to be telling Washington it doesn’t need American chips.
• However, there’s a chance that Beijing is blocking these particular imports because China only wants to allow in strictly necessary, higher-end Nvidia products.

Foreign affairs

Xi Jinping and Russian President Vladimir Putin unveiled a hefty joint statement to further cement Sino-Russian partnership during the latter’s visit to Beijing.

• The document restated Chinese and Russian commitments to building a multipolar world, and criticized “certain countries” for hegemonism and unilateralism.
• On Ukraine, the two sides called for addressing the “root causes” of the conflict and supported continued negotiations.
• However, there was no visible progress on the long-stalled PS-2 gas pipeline, suggesting there are still more details to hammer out.

Econ and finance

Cost-push inflation from the Iran war may be having an unintended upside for China’s industrial base.

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• Sany Heavy Industry, XCMG, and Liugong – three of China’s largest excavator manufacturers – have announced coordinated price increases of 3-5%, taking effect in stages from mid-May through June.
• The catalyst: Rising input costs across steel, oil, rubber, copper, and aluminum.
• If the increases hold, it could mark a turning point – not necessarily a return to healthy margins, but proof that the industry can break free from the cycle of price destruction that made coordinated increases impossible for years.

In April, deposits held by non-bank financial institutions (NBFIs) – such as insurers, wealth management products, funds, and securities brokerages – increased by RMB 2.47 trillion, the second biggest monthly increase after February 2025, when they rose RMB 2.83 trillion.

• Meanwhile, household deposits declined RMB 1.9 trillion in April, the largest drop on record.

•  With fixed-term deposits no longer offering attractive rates, bond yields near record lows, and property prices still falling, households have few places to park their savings.

Business environment

The State Council released the finalized implementation regulations for China’s Mineral Resources Law.

• Most notably, the regulations call for the development of a new three-tiered strategic mineral reserve system combining: physical mineral stockpiles, reserve capacity at existing mines that can quickly ramp up output, and untapped sites held in reserve for future development.
• The regulations also allow provincial-level authorities or above – with State Council approval – to directly grant mining rights for strategic mineral projects in cases of urgent national resource security need.

The Central Commission for Comprehensively Deepening Reform (CCCDR) – China’s top policymaking body – has not met since August 29, 2024, nearly two years ago.

• That contrasts with the 10 years previous, when the body usually met 6-10 times a year.

• It could be that the CCCDR is still operating but not publicizing its work – we do have evidence of at least one secret CCCDR meeting in recent years.
• However, one line from the June 2025 Politburo meeting suggests that the CCCDR may now be seen as a redundant bureaucratic layer: “Central decision-making and coordination bodies must ensure that their overall planning does not substitute for others’ functions, while being present and effective without overstepping their bounds.”

Tech

In mid-May, Vice Premier Ding Xuexiang visited data centers across Beijing, Hebei, and Inner Mongolia to inspect progress on China’s National Unified Computing Power Network (NUCPN), a state-led push to build data centers across the country.

• Ding made clear that he wants a self-sufficient compute stack: “[We] should persist in self-reliance…accelerate breakthroughs on critical technical bottlenecks…and push domestic software and hardware from merely ‘usable’ to truly ‘easy to use’ as quickly as possible.”
• Ding’s visit also revealed new details about Inner Mongolia’s compute buildout plans, with the region planning to invest a total of RMB 731.1 billion in computing infrastructure.
• Inner Mongolia currently has 277 EFLOPS of AI compute, roughly 17% of the national total and equal to the size of xAI’s entire Colossus 1 campus in Memphis.

On Thursday, Bloomberg reported that the founders of Manus are in discussions to raise roughly USD 1 billion from external investors to buy back the company from Meta.

• Founders Xiao Hong, Ji Yichao, and Zhang Tao are considering combining external funding with their own money to repurchase Manus, then restructuring it as a Chinese joint venture ahead of a potential Hong Kong IPO.
• But that’s easier said than done: Manus staff and technology have already been integrated into Meta, and investors have been paid out.

Politics

On Monday, the Party General Office released updated rules for recruiting new Party members.

• The top criterion for evaluating applicants during the political review process is now adherence to the “Two Establishes” and the “Four Consciousnesses” – which require Party members to remain loyal to Xi, the Party Central Committee, and their decisions.
• The rules also require Party groups to focus more on recruiting Party members from the “frontlines of production” and from “emerging fields” – ensuring those working in frontier technologies are inside the Party tent.
• The Party’s intention to recruit more innovators will butt up hard against the overwhelming emphasis on political loyalty – and not asking questions.

As always, it was a busy week in China.

• Thank goodness Trivium China is here to make sure you don’t miss any of the developments that matter.