[Morning Post] He Lifeng: China and the US Reach Important Consensus, Substantial Progress Made in Talks

Macro News

1. On the morning of May 10 local time, President Xi Jinping successfully concluded his state visit to Russia and attended the celebrations marking the 80th anniversary of the victory in the Great Patriotic War of the Soviet Union before returning to Beijing.

2. On May 9, Premier Li Qiang of the State Council presided over an executive meeting of the State Council, during which a report was heard on the work to promote the high-quality and efficient development of pilot free trade zones (FTZs). The meeting emphasized the need to support pilot FTZs in aligning with high-standard international economic and trade rules, further intensifying institutional innovation, and taking the lead in pilot initiatives in areas such as the development of service trade and the facilitation of cross-border data flows, while conducting differentiated explorations. It was also highlighted that reform task authorizations should be expanded in a manner suited to local conditions, and that the regional layout should be optimized and adjusted according to the actual needs of industrial development, steadily promoting the upgrading of mature pilot FTZs.

3. The high-level economic and trade talks between China and the United States were held in Geneva, Switzerland, from May 10 to 11. He Lifeng, the Chinese head of the economic and trade delegation and Vice Premier of the State Council, stated at a press conference held by the Chinese delegation on the evening of May 11 local time that the high-level economic and trade talks between China and the United States were frank, in-depth, and constructive, with important consensus reached and substantive progress made. Both sides agreed to establish a China-U.S. economic and trade consultation mechanism. China and the United States will finalize the relevant details as soon as possible and release a joint statement on the outcomes of the talks on May 12.

4. On May 10, Wang Yi had a phone conversation with Pakistan's Deputy Prime Minister and Foreign Minister Bilawal Bhutto Zardari. Wang Yi expressed that China expects and supports both Pakistan and India to achieve a ceasefire as soon as possible. Once a ceasefire is achieved, it must be jointly adhered to in order to avoid the resurgence of conflicts. This is in the interests of both Pakistan and India, conducive to regional peace and stability, and also a widespread expectation of the international community. China is willing to continue to play a positive role in this regard. On the same day, Wang Yi also had a phone conversation with India's National Security Advisor Ajit Doval, during which he stated that China supports and expects India and Pakistan to achieve a comprehensive and lasting ceasefire through consultations. This is in the fundamental interests of both India and Pakistan and is also the common aspiration of the international community.

5. An article titled "Equal Dialogue is the Right Path to Resolving Issues Between Major Powers" by Zhong Sheng in the People's Daily pointed out that if the United States wants to resolve issues through negotiations, it must face up to the serious negative impacts that unilateral tariff measures have brought upon itself and the world, respect international economic and trade rules, fairness, justice, and the rational voices of all sectors, demonstrate sincerity in negotiations, and correct its erroneous practices, rather than saying one thing and doing another, or being inconsistent and unpredictable.

6. According to data from the National Bureau of Statistics (NBS), in April 2025, the national consumer price index (CPI) decreased by 0.1% YoY. In April 2025, the national ex-factory prices of industrial producers decreased by 2.7% YoY and 0.4% MoM; the purchase prices of industrial producers decreased by 2.7% YoY and 0.6% MoM.

Industry News

1. The 17th Shenzhen International Battery Technology Exchange/Exhibition (CIBF2025) will be held in Shenzhen from May 15 to 17. The list of exhibitors includes several well-known companies such as CATL, BYD, and 3M China. The concurrent Battery Frontier Technology Symposium will feature multiple presentations related to solid-state batteries. Gotion High-tech will host a Global Technology Conference, where its chief scientist previously revealed that a new high-safety solid-state battery will be launched. Brokerages pointed out that sectors such as low-altitude aircraft and humanoid robots will significantly stimulate the accelerated development of solid-state batteries.

2. Data from the Passenger Car Association shows that retail sales of passenger NEVs in April reached 905,000 units, up 33.9% YoY but down 8.7% MoM. Cumulative retail sales from January to April this year totaled 3.324 million units, an increase of 35.7%. The association stated that China's car exports to the US are minimal, especially since independent brands are not sold in the US at all, so domestically produced independent brand cars will not be affected by US tariff increases.

3. Multiple reports suggest that Apple's iPhone release strategy will change starting in 2026: the basic model will be launched in H1, while the Pro, ultra-thin, and foldable models will be updated in H2. A reporter recently learned from a supply chain company that Apple has provided suppliers with shipment target guidance for the first foldable iPhone, a "large foldable iPhone," to be launched in H2 2026. This supply chain company is a supplier of multiple parts for Apple phones.

4. Since the beginning of this year, more than 20 commercial banks have lowered their listed interest rates for time deposits, making "high-interest deposits" with rates above 3% increasingly rare in the market. Bank deposit rates have now fully entered the "1% era." Amid the banks' intensive interest rate cuts, medium and long-term deposit rates at several banks have shown a significant "inversion."

5. On May 11, humanoid robot startup Songyan Power unveiled a new generation of bionic robots, featuring a new female character named Xiao Nuo. According to reports, it boasts multi-modal embodied interaction, ultra-high degrees of freedom (32DOF), near-realistic facial expressions, open character customization, and underlying interfaces, supporting personalized makeup. A reporter from the Science and Technology Innovation Board Daily learned on-site that Songyan Power's N2 robot has already secured over 1,000 pre-orders.

6. The country's first commercial hydrogen-powered locomotive began trial operations on the 10th in Liuzhi Special District, Liupanshui City, Guizhou, filling the gap in hydrogen-powered rail freight transportation in south-west China.

7. The China Academy of Chinese Medical Sciences released an evaluation standard for traditional Chinese medicine (TCM) large models. This standard is the first to establish a quantitative assessment system for large models in the TCM field.According to this standard, the evaluation of large models in traditional Chinese medicine focuses on two aspects: technology and application capabilities. The standard primarily covers three capability domains—scenario richness, capability support, and application maturity—with 13 capability subdomains and over 30 capability items.

8. A research report by China Securities pointed out that, based on the 2024 annual reports and the Q1 2025 reports, the profitability of the PV industry has significantly pulled back. However, the current report suggests that the bottom of the PV industry's financial statements has been reached. The substantial impairment of fixed assets in Q4 and the impact of the Southeast Asian anti-dumping and countervailing duties in Q1 have already been reflected in the financial statements, and it is expected that the probability of further deterioration in profitability is relatively small. The report believes that the industry should subsequently focus on upstream destocking and the progress of capacity exiting the market.

Corporate News

1. During his speech at the 6th Shanghai Youth 50 Forum for Innovation and Entrepreneurship, Wang Xingxing revealed that the development of humanoid robot companies, including Unitree, is currently in good shape. "Many companies have seen a surge in orders," Wang said. He mentioned that Unitree Technology is currently in urgent need of personnel across all positions, including administrative, procurement, sales, technical, R&D, and marketing roles, and welcomes young talents to join.

2. Wanxiang Qianchao, which has had two consecutive trading days of limit-up, announced that the transaction plan for a major asset restructuring is undergoing further negotiations.

3. Chengfei Integration, which has had three consecutive trading days of limit-up, announced that there have been no significant changes in the company's operating conditions or internal and external operating environments recently.

4. Hongqiang Corporation, which has had eight limit-up trading days in 14 days, announced that there are no material matters that should have been disclosed but have not been.

5. *ST Youshu announced that the delisting risk warnings and other risk warnings for the company's stock trading have been revoked.

6. Qujiang Cultural Tourism announced that 4.7% of the company's shares held by its controlling shareholder are scheduled to be auctioned.

7. Li Auto announced that the cumulative delivery volume of the Li L7 has exceeded 300,000 units.

8. Mabwell Therapeutics announced that its Chairman and General Manager, Liu Datao, is under investigation for suspected short-swing trading.

9. China First Heavy Industries announced that its Chairman, Lu Wenjun, is under investigation, with the company's performance declining over the past three years under his leadership.

Global Markets

1. On the 10th, Pakistani Deputy Prime Minister and Foreign Minister Bilawal Bhutto Zardari stated on social media that Pakistan and India have agreed to an immediate ceasefire. On the same day, Indian Foreign Secretary Vinay Mohan Kwatra announced that India had reached a ceasefire agreement with Pakistan. However, shortly after both sides announced the ceasefire, explosions were once again heard in the Indian-administered Kashmir region.

2. Ukrainian Foreign Minister Dmytro Kuleba stated on the 10th that German Chancellor Friedrich Merz, French President Emmanuel Macron, Polish Prime Minister Donald Tusk, and UK Prime Minister Keir Starmer had a phone conversation with US President Donald Trump after concluding their meeting with Ukrainian President Volodymyr Zelenskyy in Kyiv.Sebihga stated that Ukraine and all its allies are ready to achieve a complete and unconditional ceasefire on land, in the air, and at sea for at least 30 days starting from the 12th.

3. The three major U.S. stock indices closed mixed last Friday. The Dow Jones Industrial Average fell 0.29%, with a weekly decline of 0.16%; the S&P 500 index dropped 0.07%, with a weekly decline of 0.47%; the Nasdaq index closed flat, with a weekly decline of 0.27%. Among large-cap tech stocks, there were mixed performances. Tesla surged over 4%, and Intel rose 2%. Lyft jumped over 28%, marking its best single-day performance since February 2024. Insulet Corp. (PODD) rose nearly 21%, its best single-day performance since November 2022. Most popular Chinese ADRs declined, with the Nasdaq Golden Dragon China Index closing down 0.45%.

Investment Opportunities Reference

1. World UAV Congress to be held; institutions say future industry market size may exceed 300 billion yuan

It is reported that the 9th World UAV Congress 2025, themed "Entering a New Era of the Low-Altitude Economy," will be grandly held in Shenzhen in late May.

Zhongtai Securities analysis points out that UAVs have demonstrated outstanding cost-saving and efficiency-enhancing performance in industrial applications, with an average annual growth rate exceeding 50%. In comparison, the market size of China's industrial UAV industry has grown from 4.3 billion yuan in 2016 to 38.18 billion yuan in 2021, with a compound annual growth rate (CAGR) of 54.7%. It is expected to reach a market size of 301.85 billion yuan by 2026. From the supply side, in industrial application scenarios, UAV enterprises continue to improve various models, such as equipping the airframe with customized payloads to enable capabilities like infrared detection, radar scanning, pesticide spraying, loudspeaking, and monitoring, thereby expanding the industrial application landscape of UAVs. From the demand side, in industrial scenarios, UAVs can partially replace manual labor in executing tasks, bringing cost-saving and efficiency-enhancing advantages. UAVs can perform tasks in complex terrain environments, with inspection efficiency reaching 3-5 times that of manual inspection.

2. Baidu Apollo and CAR Inc. will jointly launch the world's first self-driving car rental service

According to media reports, on May 8, 2025, CAR Inc. and Apollo reached a strategic cooperation agreement, announcing that the two sides will carry out in-depth cooperation in the intelligent mobility sector to jointly create the world's first self-driving car rental service. They will explore innovative applications of self-driving technology in the car rental industry, deeply integrate scenario demands, and build a new "intelligent mobility" service ecosystem centered around users.

From a market perspective, the multi-dimensional collaborative cooperation between the two sides will accelerate the deployment of self-driving technology in various scenarios such as urban cultural tourism, unlocking consumer potential and tapping into a billion-level intelligent mobility blue ocean market.Great Wall Securities' research report states that the intelligent driving market has broad prospects, and it is recommended to pay attention to links such as modules and LiDAR. According to IDC forecasts, the global scale of connected vehicles will reach 78.3 million units in 2025, with a 5-year compound annual growth rate (CAGR) of 11.5%. In addition, the global scale of autonomous vehicles is expected to reach 89.3 million units in 2026, with a 5-year CAGR of 14.8%. As leading producers at home and abroad continue to invest in the intelligent driving industry, it will enter a period of rapid development.

3. New Breakthrough: Overseas Companies Develop New Technologies, Potentially Tripling the Lifespan of Such Products

Industry media reported that South Korean battery manufacturer SK On is accelerating the R&D of polymer, oxide, and sulphide solid-state power batteries. The company has discovered a new protective layer in its research, which is expected to significantly enhance the cycle life of lithium metal batteries. Batteries currently used in EVs typically begin to experience performance degradation after undergoing 1,000 to 100,000 charge-discharge cycles. However, SK On's R&D team claims to have tripled this lifespan indicator.

Solid-state batteries represent a revolutionary battery technology, with their core innovation being the use of solid electrolytes to replace the liquid electrolytes found in traditional lithium-ion batteries, offering significant advantages in terms of safety and energy density. Shenwan Hongyuan Securities stated that the industrialisation of solid-state batteries is expected to accelerate. In February this year, at the 2nd China All-Solid-State Battery Innovation and Development Summit Forum, numerous experts, scholars, research institutions, and enterprise representatives gathered to focus on material science, new processes and equipment, and cutting-edge industrial developments, discussing innovative breakthroughs and challenges in all-solid-state batteries. Many experts believe that solid-state batteries are expected to enter mass production and be installed in vehicles by 2027.

4. High R&D Costs + Capital Barriers: The Industry Holds Significant Strategic Importance

According to media reports, recently, the Indonesia TransNusa Airlines flight 8B101 (Manado, Indonesia - Shanghai Pudong), operated by the domestically produced regional aircraft C909, made its first landing at Pudong Airport, passing through the "water arch," a symbol of the highest honor in civil aviation. The international route between Shanghai and Manado, Indonesia, was officially opened, marking the longest commercial operation of the C909 aircraft to date, with a flight range exceeding 3,300 kilometers.

China's civil aviation market has broad demand. According to Boeing's 2024 CMO Forecast, from 2023 to 2043, China is expected to add 8,830 new civil aviation aircraft deliveries, accounting for 20.08% of the world's total deliveries. Founder Securities pointed out that the development of the large aircraft industry holds significant strategic importance, with a wide radiation scope and strong linkage benefits. The civil aircraft manufacturing industry is of profound strategic significance to the country, directly linked to national economic growth, employment opportunities, and technological progress. This industry not only significantly boosts economic growth but also drives substantial employment and plays a huge role in promoting technological development, particularly in the fields of new materials, new energy, and advanced electronic technologies.