[Morning Post] Insider: China may ease rare earth export restrictions targeting the industry chain of Chinese and European semiconductor companies

Macro News

1. On the 28th, He Lifeng, Member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, met with Dan Simkowitz, Co-President of Morgan Stanley in the US, at the Great Hall of the People. He Lifeng stated that China is committed to promoting high-quality development through high-level opening up, and welcomes more US financial institutions, including Morgan Stanley, and long-term capital to continuously deepen mutually beneficial cooperation with China and actively participate in the construction and development of China's capital market. Simkowitz expressed that Morgan Stanley will continue to expand its presence in the Chinese market and provide high-quality services to facilitate investment cooperation between US and Chinese enterprises.

2. From the 27th to the 28th, Zhang Guoqing, Member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, conducted a survey in Shanghai on promoting the healthy development of the platform economy and market supervision. He emphasized the need to thoroughly implement the important instructions and directives of General Secretary Xi Jinping, implement the decisions and arrangements of the CPC Central Committee and the State Council, focus on promoting high-quality development, comprehensively strengthen governance capabilities in the field of market supervision, promote the construction of a sound ecosystem for the platform economy, and maintain a fair and orderly market environment.

3. On May 28th, Foreign Ministry spokesperson Mao Ning presided over a regular press conference. Mao Ning stated that China has decided to expand the scope of visa-free countries. From June 9, 2025, to June 8, 2026, a visa-free policy will be implemented on a trial basis for holders of ordinary passports from Saudi Arabia, Oman, Kuwait, and Bahrain. Individuals from these four countries holding ordinary passports who come to China for business, tourism, visiting relatives and friends, exchanges, visits, or transit for no more than 30 days may enter the country without a visa.

4. According to the National Disease Control and Prevention Administration, the upward trend of the COVID-19 epidemic nationwide has slowed down, and the epidemic has reached its peak or is showing a downward trend in most provinces. The dominant circulating strain is the sixth-generation sub-lineage NB.1.8.1 of the XDV variant, with no significant changes observed in its pathogenicity or clinical severity of the disease.

Industry News

1. It has been learned from multiple informed sources that at a recent symposium on upstream and downstream enterprises in the China-EU semiconductor industry held by the Ministry of Commerce, the policy on rare earth export controls was explained, and communication with China-EU chip enterprises on rare earth export controls was strengthened to maintain the stability of the global industry chain. Another informed source indicated that this move implies that China may relax rare earth export controls targeting the industry chain of China-EU semiconductor enterprises.

2. The Office of the National Healthcare Security Administration conducted an investigation into cases of "ghost pharmacists" (pharmacists whose names are listed but who are not actually present) at designated retail pharmacies. Through screening and analysis, it was found that the names of some pharmacists (corresponding to the same ID numbers) appeared in the drug expense details of multiple designated retail pharmacies, suggesting possible violations such as pharmacist information being falsified or pharmacists engaging in "ghost pharmacist" practices. Designated retail pharmacies found to have engaged in violations such as falsified pharmacist information, "ghost pharmacists," or failure to provide pharmaceutical services as required will be subject to measures such as interviews, rectification within a specified time limit, suspension of the medical insurance service agreement, or termination of the medical insurance service agreement, depending on the severity of the violations.

3. The website of the Shenzhen Municipal Housing and Construction Bureau released the "Administrative Measures for the Allocation and Sale of Affordable Housing in Shenzhen (Draft for Soliciting Opinions)" and the "Administrative Measures for the Planning and Construction of Affordable Housing in Shenzhen (Revised Draft for Soliciting Opinions)". The drafts mention that allocation-and-sale-type affordable housing will be subject to strict closed-loop management, and it is prohibited to convert such housing into commercial housing in any way.

4. It has been learned from informed sources that DJI's robotic vacuum cleaner products have entered mass production and are expected to be launched in June. It is understood that DJI has been engaged in the R&D of robotic vacuum cleaners for more than four years, and the upcoming product is a robotic vacuum and mop combo.

5. The General Office of the People's Government of Fujian Province issued the "Implementation Plan for Special Actions to Boost Consumption in Fujian Province", which proposes supporting automobile consumption. It supports various regions in carrying out automobile consumption promotion activities and providing additional support through preferential car purchase policies.

6. The State Administration for Market Regulation recently issued the "Action Plan for Key Technological Innovations in Metrology and Testing". The Plan proposes that by 2030, more than 50 key metrological core technologies will be achieved, more than 20 new-generation international first-class metrological standards will be established, the self-controllable rate of core devices for newly established metrological standards will reach over 60%, and the leading rate in international metrological comparisons will reach 20%.

7. It was learned from the media briefing on promoting the trade-in of e-bikes in Guangdong that as of May 26, the sales volume of e-bikes traded in in Guangdong Province reached 174,000 units, ranking among the top in the country, with the trade-in volume being approximately three times that of the previous year. The cumulative subsidy funds used amounted to 87.08 million yuan, boosting new e-bike consumption by over 400 million yuan.

Corporate News

1. Jiaying Pharmaceutical announced that it is under investigation by the China Securities Regulatory Commission for suspected violations of laws and regulations in information disclosure.

2. China Energy Engineering Group announced that it has won the bid for the 6×660 MW coal-fired power project in the Bingzhun Industrial Park of the China-Kyrgyzstan-Uzbekistan Railway, with a bid amount of approximately 14.586 billion yuan.

3. *ST Jilin Pharmaceutical announced that its shares will be delisted on May 29.

4. *ST Longjin announced that its shares will enter the delisting consolidation period starting from June 6.

5. ST Huaxi announced that it has signed a major contract for daily operations worth approximately 2.084 billion yuan.

6. Fuda Co., Ltd. announced that it plans to invest in the construction of a project for ultra-precision gears for electric drive systems in NEVs and a project for robotic transmission joint components.

7. Longgao Co., Ltd. announced that the restructuring of its controlling shareholder is undergoing the approval process for the assessment report.

8. Jiangsu New Energy announced that its future performance is related to multiple factors such as the natural resources at the project sites, and significant changes may bring about performance fluctuation risks.

9. China Flag Chemical announced that the company currently has the project approval procedures for chlorantraniliprole, but it has not yet officially commenced production.

10. ST United announced its intention to acquire 100% equity in Jiangxi Runtian Industry, a packaged drinking water company, and its stock will resume trading.

11. Shangwei Cable announced that the company's actual controller has been changed to Zhang Hua.

12. At the earnings briefing, executives of Huguang stated that the first prototype line for the humanoid robot project has been successfully implemented.

13. IntSig Information announced its intention to plan for the issuance of H shares and list them on the Hong Kong Stock Exchange.

14. China National Gold Group announced that its controlling shareholder intends to increase its stake in the company by 168 million to 335 million yuan.

15. Lier Chemical stated on its interactive platform that the 5,000 mt/year chlorantraniliprole production facility is under accelerated construction.

Global Markets

1. The three major U.S. stock indices closed lower collectively, with the Dow Jones falling 0.58%, the Nasdaq declining 0.51%, and the S&P 500 index dropping 0.56%. Most popular Chinese ADRs closed lower, with the Nasdaq Golden Dragon China Index falling 0.71%.

2. WTI crude oil futures prices closed up 1.56% at $61.84 per barrel. Brent crude oil futures closed up 1.26% at $64.9 per barrel.

3. COMEX gold futures closed down 0.48% at $3,312.4 per ounce, and COMEX silver futures closed down 0.65% at $33.095 per ounce.

4. Nvidia reported revenues of $44.1 billion in the first fiscal quarter, up 69% YoY, and a net profit of $18.78 billion in the first fiscal quarter, up 26% YoY.

Investment Opportunities Reference

1. Xiaomi YU7's pre-booking inquiries exceed those of SU7 during the same period, with the number of users leaving their information being about three times higher.

According to media reports, Lu Weibing, Partner and President of Xiaomi Group, stated at the earnings call that Xiaomi YU7 has been well-received by users since its pre-release, becoming more popular and well-known than when Xiaomi SU7 was first unveiled. Lu Weibing revealed that after the technical release of YU7, the number of pre-booking inquiries exceeded those of SU7 during the same period. As of May 25, the number of users leaving their information for the "YU7 Technical Launch Event" was about three times that of the "SU7 Technical Launch Event" during the same period. YU7 has a broader audience than SU7, and we are very confident in YU7. YU7 is expected to be officially launched in July this year.

Previously, Xiaomi Auto announced that it had raised its delivery target for 2025 to 350,000 units (up from 300,000 units). Driven by factors such as strong product competitiveness and the launch of new models, Xiaomi Auto's sales are expected to continue to accelerate. Guotai Haitong Securities stated that Xiaomi Group's YU7 was launched on May 22, and its sales after the new model's launch are worth looking forward to, with the industry chain expected to continue benefiting.

2. WeRide Enters Saudi Arabian Market, with Three Major Products Deployed

Recently, WeRide, a global leader in autonomous driving technology, announced its market expansion strategy in Saudi Arabia, marking a further expansion of the company's global commercial footprint. As the first step in entering the Saudi market, WeRide has tested and deployed autonomous driving products such as Robotaxi, Robobus, and Robosweeper in key Saudi cities including Riyadh and AlUla, laying the foundation for subsequent large-scale commercial operations across Saudi Arabia.

With the rapid development of artificial intelligence (AI) technology, autonomous driving is undergoing unprecedented changes. From intelligent perception to precise decision-making, and from efficient control to data-driven operations, AI has injected strong momentum into autonomous driving. Haitong Securities pointed out that previously, the main barriers to the development of large-scale autonomous driving models included computing power, data loops, etc., with leading autonomous driving enterprises mostly being top-tier technology companies. Following the release of Deepseek's faster inference model, latecomers (including vehicle manufacturers and solution providers) are expected to gain new opportunities, and the autonomous driving algorithm sector is expected to witness a flourishing landscape. Therefore, 2025 is expected to be a year of rapid penetration of high-level intelligent driving, with numerous opportunities emerging across the industry chain.

3. Three Departments, Including MIIT, Coordinate to Promote the Development of Advanced Computing Industry

According to media reports, the Ministry of Industry and Information Technology (MIIT), the National Development and Reform Commission (NDRC), and the National Data Administration jointly issued the "Implementation Plan for the Digital Transformation of the Electronic Information Manufacturing Industry" to strengthen the construction of new-type information infrastructure. The plan coordinates the promotion of the development of the advanced computing industry, accelerates the integration of networks, data, computing power, and algorithms, drives innovative development in high-performance computing, intelligent computing, and cloud-edge-end collaborative computing, improves the network layout of edge computing centers, and builds a new-type information infrastructure that is highly reliable, high-performance, and widely connected. It promotes the deep empowerment of new-type information infrastructure in electronic information manufacturing applications, accelerating the large-scale application of advanced computing, 5G-A, gigabit optical networks, industrial internet, and AI in the electronic information manufacturing industry.

Advanced computing encompasses three major areas: computing power, algorithms, and data, covering various computing methods such as cloud, edge, and end computing. As the core productivity in the digital economy era, computing power plays a crucial role in driving technological and industrial progress, accelerating the deep integration of digital technologies with the real economy, and its strategic and supportive roles are becoming increasingly prominent. Shanxi Securities believes that the demand for AI computing power from two major downstream sectors, the internet and intelligent computing centers, will continue to experience high growth, with rapid progress in localization procurement.

4. Musk's Brain-Computer Interface Company Completes New Round of Financing

It is reported that Musk's brain-computer interface company, Neuralink, has raised $600 million in a round of financing, bringing the company's valuation to $9 billion.

In recent years, the global brain-computer interface (BCI) technology has witnessed rapid development, with its application areas gradually expanding from the medical field to non-medical fields such as education and gaming. Meanwhile, the rapid evolution of emerging technologies like artificial intelligence (AI) is driving more breakthroughs in the application of BCI technology. According to PrecedenceResearch, the global BCI market size was approximately $2.62 billion in 2024 and is expected to reach $12.4 billion by 2034, with a compound annual growth rate (CAGR) of 17.4% from 2025 to 2034.