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China now produces nearly 400,000 metric tons of rare earths a year. This is a massive 69% of the global output, per the US Geological Survey. The US is seeking to restore flows of critical minerals in today's trade talks. Source: Global Markets Investor

dragged down by a sharp decline in shipments to the U.S., with analysts saying effects of a Beijing-Washington trade truce will be visible in June data. 🟥 Chinese exports to the U.S. plunged 34.5% from a year ago, marking the sharpest drop since February 2020, according to Wind Information, when the Covid-19 pandemic disrupted trade. Imports from the U.S. dropped over 18%, and China’s trade surplus with America shrank by 41.55% year on year to $18 billion. Overall exports rose 4.8% last month in U.S. dollar terms from a year earlier, customs data showed Monday, shy of Reuters’ poll estimates of a 5% jump. 🟥 Imports plunged 3.4% in May from a year earlier, a drastic drop compared to economists’ expectations of a 0.9% fall. Imports had been declining this year, largely owed to sluggish domestic demand. That was largely offset by its shipment to the Southeast Asian bloc, which jumped nearly 15% from a year, and those to European Union countries and Africa, which rose 12% and over 33%, respectively. Source: CNBC

Beijing’s stimulus measures appear insufficient to boost domestic consumption, with price wars in the auto sector adding to downward pressure. 🟥 The consumer price index fell 0.1% from a year earlier, according to data from the National Bureau of Statistics released Monday, compared with Reuters’ median estimate of a 0.2% decline. 🟥 CPI slipped into negative territory in February, falling 0.7% from a year ago, and has continued to post year-on-year declines of 0.1% in March, April, and now May. Core inflation, excluding food and energy prices, however, rose 0.6% in May — highest since January this year, according to Wind Information. Separately, deflation in the country’s factory-gate or producer prices deepened, falling 3.3% from a year earlier in May, marking the steepest decline since July 2023 and a sharper drop compared with analysts’ estimates of a 3.2% fall, according to LSEG data. Source: CNBC

At a time when the White House has been suggesting the two leaders could talk this week amid a rise in trade tensions: “I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!,” the U.S. president wrote on Truth Social. That post on the social media platform came after a senior White House official told CNBC on Monday that Trump and Xi were likely to speak this week. Chinese Foreign Minister Wang Yi told the new U.S. Ambassador David Perdue during a meeting Tuesday that the recent string of “negative measures” by the Trump administration were based on “groundless reasons,” and undermined China’s legitimate rights and interests, according to the official English readout. Source: CNBC

Source: Barchart, LESG

In the past 5 years, their U.S. Treasury holdings have plunged from ~$1.1T to ~$760B. Meanwhile, their gold reserves have soared from ~1,850 tons to over 2,200 Source: Andrew Wells, Bloomberg

Link >>>https://lnkd.in/epE_ri2X Source: FT

Between 2020 and 2023, China supplied 70% of U.S. rare earth imports, establishing itself as the primary source. Following closely are Malaysia, Japan, and Estonia in the top four suppliers. Despite their name, rare earths are not scarce in the Earth's crust; the challenge lies in extracting them in concentrated amounts economically and sustainably. China plays a pivotal role in this scenario, producing approximately 90% of the world's refined rare earths. Its extensive capacity for separation and purification gives it a substantial influence over global supply chains. For instance, yttrium, crucial in radar systems, lasers, and television screens, saw 93% of its U.S. imports originating from China between 2020 and 2023. Other vital rare earths like Samarium, Gadolinium, Terbium, Dysprosium, Lutetium, and Scandium face similar supply concentration challenges. These elements are integral to military applications, electric motors, and cutting-edge electronics, with companies such as Lockheed Martin, Tesla, and Apple relying on them for their core products. Source: Elements