Holiday News Roundup: PMI for May was 49.5%; Multiple Parties Voice Opinions on "Cut-throat Competition" in the Automobile Sector

Important market-impacting news over the weekend includes: the US Trade Representative's Office extending certain exemptions from Section 301 tariffs on China; a Foreign Ministry spokesperson responding to US Defense Secretary Hegseth's negative remarks about China at the Shangri-La Dialogue; a People's Daily commentary stating that NEVs must not rely on price wars as a stimulant; and Trump announcing plans to raise tariffs on imported steel to 50%.

Macro and Market News

The Journal "Qiushi" Publishes an Important Article by General Secretary Xi Jinping Titled "Accelerating the Construction of a Strong Education Nation"

The 11th issue of the journal "Qiushi," published on June 1, will feature an important article by Xi Jinping, General Secretary of the CPC Central Committee, President of China, and Chairman of the Central Military Commission, titled "Accelerating the Construction of a Strong Education Nation."

The article emphasizes that education is the foundation of building a strong nation and achieving national rejuvenation. Since the 18th National Congress of the CPC, we have adhered to prioritizing education as a national and Party strategy, fully implementing the Party's educational policies, making major decisions to deeply implement the strategy of invigorating the country through science and education, accelerating education modernization, and setting the goal of building a strong education nation by 2035. These efforts have driven historic achievements and transformative changes in the education sector in the new era.

The US Trade Representative's Office Extends Certain Exemptions from Section 301 Tariffs on China

The US Trade Representative's Office announced an extension of the exemption period for certain actions, policies, and practices of China related to technology transfer, intellectual property, and innovation under the Section 301 investigation. The exemption period, originally set to expire on May 31, 2025, has now been extended to August 31, 2025.

Foreign Ministry Spokesperson Responds to US Defense Secretary Hegseth's Negative Remarks About China at the Shangri-La Dialogue

Q: According to reports, on May 31, US Defense Secretary Hegseth delivered a speech at the Shangri-La Dialogue, exaggerating the "China threat" and making negative remarks on issues such as Taiwan and the South China Sea. What is China's response? A: Hegseth has ignored the calls of regional countries for peace and development, promoted Cold War mentality and bloc confrontation, smeared and attacked China, and exaggerated the "China threat theory" with provocative and inflammatory rhetoric. China is strongly dissatisfied and firmly opposed to this and has lodged stern representations with the US.

China's Manufacturing PMI in May Stood at 49.5%, Up 0.5 Percentage Points MoM

On May 31, the China Federation of Logistics and Purchasing and the Service Industry Survey Center of the National Bureau of Statistics released China's PMI for May. The manufacturing PMI showed a rebound compared to the previous month, indicating an improvement in manufacturing activity and a stabilization in economic performance. China's manufacturing PMI for May stood at 49.5%, up 0.5 percentage points MoM. Looking at the sub-indices, the production index stood at 50.7%, up 0.9 percentage points MoM, rising above the critical point, indicating an acceleration in manufacturing production activities. On the demand side, the new orders index in May was 49.8%, up 0.6 percentage points MoM.

PBOC: Conducted 700 billion yuan of outright reverse repo operations in May through fixed-quantity, interest-rate tenders with multiple-price awards

PBOC data shows that in May, 700 billion yuan of outright reverse repo operations were conducted through fixed-quantity, interest-rate tenders with multiple-price awards.

PBOC: Real estate loan growth rebounds at the end of Q1 2025

The PBOC released the Statistical Report on the Loan Orientation of Financial Institutions for Q1 2025. At the end of Q1 2025, the outstanding balance of RMB real estate loans was 53.54 trillion yuan, up 0.04% YoY, with the growth rate 0.2 percentage points higher than that at the end of the previous year. In Q1, it increased by 619.7 billion yuan. At the end of Q1 2025, the outstanding balance of real estate development loans was 13.87 trillion yuan, up 0.8% YoY, with an increase of 353.5 billion yuan in Q1. The outstanding balance of individual housing loans was 37.9 trillion yuan, down 0.8% YoY, with the growth rate 0.5 percentage points higher than that at the end of the previous year, and an increase of 214.4 billion yuan in Q1.

US Treasury Secretary says trade talks with China are "a bit stalled"; MFA responds

On May 30, Foreign Ministry spokesperson Lin Jian hosted a regular press conference. A reporter from AFP asked: US Treasury Secretary Bessent said in an interview with Fox News that trade talks with China are "a bit stalled" and suggested that the involvement of leaders from both China and the US might be necessary. How does China view this? Can the MFA provide an update on the progress of the trade talks? Does China still have confidence in reaching a trade agreement with the US? In response, Lin Jian said, "China has repeatedly clarified its position on tariff issues. For specific questions, it is recommended to inquire with the competent Chinese authorities."

Industry News

Multiple measures implemented across regions to strictly prevent illegal outflow of strategic minerals

Various regions across the country have implemented multiple measures and strengthened controls to strictly prevent the illegal outflow of strategic minerals. Among them, the National Office for Coordination of Export Control Work issued the Overall Deployment for Strengthening the Full-Chain Management and Control of Strategic Mineral Exports, which was printed and implemented after approval through the established procedures. Guizhou will strictly follow the division of responsibilities outlined in the Overall Deployment to carry out relevant work. Relevant competent authorities in Hunan Province stated that they will earnestly fulfill their local regulatory responsibilities, conduct systematic investigations of strategic mineral export enterprises in Hunan and establish ledgers, guide enterprises to strengthen the construction of compliance systems, enhance their compliance awareness and capabilities, and ensure the effective implementation of control measures. Guangxi will continue to strengthen supervision and management of the exploration and mining of national strategic minerals, increase efforts to investigate and punish illegal mining activities such as mining without licenses, mining beyond boundaries, and mining under the guise of exploration, and resolutely prevent the illegal outflow of strategically important minerals due to illegal mining. Among them, Wuzhou City in Guangxi and Yunfu City in Guangdong have established a cross-regional cooperation mechanism to combat and rectify illegal activities related to mineral resources. Additionally, relevant departments in Jiangxi and Yunnan have also stated that they will fully implement various tasks in accordance with their respective responsibilities.

National Development and Reform Commission (NDRC): Further Reduce Credit Reporting Service Fees

The NDRC issued the Notice on Further Reducing Credit Reporting Service Fees. It proposes that the benchmark service fee for commercial banks and other institutions to query corporate credit reports is 9 yuan per report, and the benchmark service fee for querying personal credit reports is 1 yuan per report. The actual service fees are calculated and determined based on the volume of data and the number of queries provided by user institutions to the credit reporting system. The excess-tiered calculation method applies to the volume of data queries, and the specific calculation formulas and billing methods continue to follow the relevant provisions of the Notice of the National Development and Reform Commission on Further Reducing the Service Fees of the Credit Reference Center of the People's Bank of China (NDRC Price Regulation [2019] No. 1318). Eleven types of financial institutions, including rural commercial banks, rural cooperative banks, rural credit cooperatives, village banks, micro-loan companies, consumer finance companies, finance leasing companies, financing guarantee companies, private banks, independent legal person direct sales banks, and domestic trade insurance underwriting institutions, are eligible for preferential service fees when querying corporate and personal credit reports. The service fee for the aforementioned institutions enjoying preferential policies to query corporate credit reports is 4.5 yuan per report, and the service fee for querying personal credit reports is 0.5 yuan per report.

For the aforementioned types of institutions, if the same user queries the same corporate credit report multiple times within 30 days, they will be charged for querying one corporate credit report; if they query the same personal credit report multiple times within one day, they will be charged for querying one personal credit report.

People's Daily Commentary: New Energy Vehicles Must Not Resort to Price Wars as a Stimulant

In response to the new round of "price wars" initiated by automakers recently, the China Association of Automobile Manufacturers (CAAM) issued the Initiative on Maintaining Fair Competition Order and Promoting the Healthy Development of the Industry, explicitly expressing opposition. The Ministry of Industry and Information Technology (MIIT) also expressed support for the initiative, emphasizing that "there are no winners in a 'price war,' and there is certainly no future." The clear signal and resolute attitude have effectively put the brakes on the disorderly "price wars," which can be considered timely.

MIIT: Intensify Efforts to Rectify "Cut-throat Competition" in the Automotive Industry

In response to the Initiative on Maintaining Fair Competition Order and Promoting the Healthy Development of the Industry issued by the China Association of Automobile Manufacturers (CAAM) on May 31, relevant officials from the Ministry of Industry and Information Technology (MIIT) stated that they will intensify efforts to rectify "cut-throat competition" in the automotive industry and resolutely maintain a fair and orderly market environment.

CAAM Opposes "Cut-Throat Competition" and Issues Important Initiative

The China Association of Automobile Manufacturers (CAAM) has issued the "Initiative on Maintaining Fair Competition Order and Promoting Healthy Development of the Industry." In recent years, China's new energy vehicle (NEV) industry has witnessed rapid development, with NEVs accounting for over 40% of new car sales. Currently, the overall operation of the industry is showing a steady and positive trend, with market vitality continuing to be released. However, we have also observed that the industry's profitability has declined over a period of time. "Cut-throat competition," primarily manifested as disorderly "price wars," is a significant factor contributing to the decline in industry benefits. Continuous investment is needed in product after-sales service guarantees and enterprise innovation and development, while "price wars" seriously affect the normal operations of enterprises, impact the security of the industry chain and supply chain, and drive the industry into a vicious cycle.

Some State-Owned Banks to Stop "High-Interest, High-Rebate" Car Purchase Installment Model from June 1

It has been learned from informed sources that a branch of a major state-owned bank received a notice from its head office to stop the "high-interest, high-rebate" car purchase installment model from June 1. At that time, the bank will no longer accept applications for car purchase installments with high interest and high rebates. "High-interest, high-rebate" generally refers to businesses where the bank's commission payment standard exceeds 3%. The source also revealed that it is expected that most financial institutions across the country will gradually stop this model in about two months, with specific situations pending unified regulatory guidance.

OPEC+ Agrees to Increase Oil Supply in July, Third Consecutive Monthly Increase

OPEC+ has agreed to increase daily oil production by 411,000 barrels, marking the third consecutive monthly increase. According to delegates, major countries led by Saudi Arabia agreed at a video conference last Saturday to increase production by the aforementioned amount in July. This increase is comparable to the increases in May and June.

Ping An Approved to Establish Private Equity Fund in Shenzhen Qianhai, with Initial Fund Size of 30 Billion Yuan

A reporter from Cailian Press has learned that recently, Ping An Asset Management Co., Ltd. has officially received approval from the National Financial Regulatory Administration to establish Hengyi Chiying (Shenzhen) Private Equity Fund Management Co., Ltd. The company, with a registered capital of 300 million yuan, will be located in Shenzhen Qianhai. It is understood that Hengyi Chiying will serve as the fund manager to issue a contractual private securities investment fund exclusively to Ping An Life Insurance, with an initial fund size of 30 billion yuan. The fund will focus on investing in high-quality publicly listed firms that align with policy guidance and the needs of insurance capital allocation.

Corporate News

Wenjie Zhang Appointed as President of Citigroup China and CEO of Citibank China

It has been exclusively learned from multiple sources that Wenjie Zhang, the former CEO of Bank of America China, has been appointed as the President of Citigroup China and the new CEO of Citibank China. The appointment will officially take effect upon regulatory approval.

*ST Pengbo: Receives Decision to Terminate Stock Listing, Enters Delisting Consolidation Period on June 10

*ST Pengbo (600804.SH) announced that the company received a self-regulatory decision letter issued by the Shanghai Stock Exchange on May 30, 2025, deciding to terminate the listing of the company's stocks. The type of securities subject to delisting is Renminbi ordinary shares, with the stock abbreviation being *ST Pengbo and the stock code being 600804. The starting date for the company's stocks to enter the delisting consolidation period is June 10, 2025, with the expected last trading date being June 30, 2025. The trading period during the delisting consolidation is 15 trading days. During the delisting consolidation period, the company's stocks will continue to be traded on the risk warning board. After the termination of the stock listing, the company's stocks will be transferred to the National Equities Exchange and Quotations for share transfer.

*ST Longyu: Receives Decision to Terminate Stock Listing, Enters Delisting Consolidation Period on June 10

*ST Longyu (603003.SH) announced that the company received a self-regulatory decision letter issued by the Shanghai Stock Exchange on May 30, 2025, deciding to terminate the listing of the company's stocks. The type of securities subject to delisting is Renminbi ordinary shares, with the stock abbreviation being *ST Longyu and the stock code being 603003. The starting date for the company's stocks to enter the delisting consolidation period is June 10, 2025, with the trading period during the delisting consolidation being 15 trading days and the expected last trading date being June 30, 2025. During the delisting consolidation period, the stocks will continue to be traded on the risk warning board. After the termination of the stock listing, the company's stocks will be transferred to the National Equities Exchange and Quotations for share transfer.

Biologic Tech: Plans to Raise No More Than 3.764 Billion Yuan, All for Innovative Drug R&D

Biologic Tech (688506.SH) announced that the company plans to issue A-shares to specific objects and raise no more than 3.764 billion yuan. After deducting the issuance expenses, the actual funds raised will all be used for innovative drug R&D projects.

ST Dongshi: Investigated by the CSRC for Suspected Violations of Information Disclosure Regulations

ST Dongshi (603377.SH) announced that the company received a "Notice of Investigation" issued by the China Securities Regulatory Commission (CSRC) on May 30, 2025. Due to the company's suspected violations of information disclosure regulations, the CSRC decided to initiate an investigation against the company in accordance with relevant laws and regulations. During the investigation, the company will actively cooperate and fulfill its information disclosure obligations in a timely manner. Currently, the company's business operations are proceeding normally.

Nations Technologies: Plans to Issue H-shares and List on the Hong Kong Stock Exchange

Nations Technologies (300077.SZ) announced that the company plans to apply for a main board listing on the Hong Kong Stock Exchange by issuing foreign shares listed overseas (H-shares). As of now, the company is discussing the work related to this offering and listing with relevant intermediaries. The offering and listing work still needs to be submitted to the company's shareholders' meeting for review and approval, and requires filing, approval, or authorization from relevant government agencies and regulatory bodies, including the China Securities Regulatory Commission (CSRC), the Hong Kong Stock Exchange, and the Hong Kong Securities and Futures Commission.

*ST Tianyu: One of the actual controllers, Yan Chunyu, and others are suspected of misappropriating funds and the case has been filed for investigation

*ST Tianyu (300205.SZ) announced that the company had received a "Notice of Case Filing" from the Wuhan Public Security Bureau. One of the company's actual controllers, Yan Chunyu, and others are suspected of misappropriating funds. The Wuhan Public Security Bureau believes that the case meets the criteria for filing a criminal case and, in accordance with relevant regulations, has decided to file the case for investigation. Yan Chunyu does not serve as a director, supervisor, or senior management member of the company, and currently, this will not have a significant impact on the company's normal production and operation. The company will actively cooperate with the public security organs in the investigation and continue to monitor the progress, fulfilling its information disclosure obligations in a timely manner.

*ST Jinglan: Filed by the CSRC for suspected violations of information disclosure regulations

*ST Jinglan (000711.SZ) announced that the company had received a "Notice of Case Filing" from the CSRC on May 30, 2025. Due to suspected violations of information disclosure regulations, the CSRC has decided to file a case against the company. The company stated that this filing will not have a significant impact on its daily production, operation, and business activities. It will actively cooperate with the CSRC in all aspects of the work and continue to monitor the progress of the matter, fulfilling its information disclosure obligations in a timely manner.

China Communications Construction: Plans to repurchase A-shares worth 500 million to 1 billion yuan

China Communications Construction (601800.SH) announced that the company plans to repurchase A-shares worth no less than 500 million yuan and no more than 1 billion yuan, with a repurchase price not exceeding 13.58 yuan per share. The repurchase period is within 12 months from the date the repurchase plan is approved by the shareholders' meeting. The repurchased shares will be used to reduce the registered capital. The company's directors, supervisors, senior management, controlling shareholders, actual controllers, and the proponents of the repurchase do not have plans to reduce their holdings of the company's shares in the next six months. This repurchase plan still needs to be submitted to the company's shareholders' meeting for review and approval.

Aerospace Chenguang: Suspended from participating in procurement activities for military materials, engineering, and services due to violations

Aerospace Chenguang (600501.SH) announced that the company's qualification to participate in procurement activities for military materials, engineering, and services has been suspended by the Procurement Service Center of the Logistics Support Department of the Central Military Commission, with the suspension effective from May 29, 2025. This suspension is due to the company's violations, which have triggered prohibitive handling measures. During the suspension period, other enterprises controlled or managed by the company's legal representative, Wu Qing, and the natural person controlling shareholder, Chen Weiwei, will also be suspended from participating in the aforementioned military procurement activities. The company is internally investigating the reasons behind the formation of the decision on handling violations and preparing to file an appeal. It is expected that this matter will have a certain impact on the company's material engineering services business within the logistics support equipment industry. This matter does not constitute an administrative penalty. Currently, the company's overall operations are normal, and relevant contracts signed before the suspension date will not be affected.

Overseas Headlines

Trump Says He Will Raise Tariffs on Imported Steel to 50%

US President Trump stated on May 30 local time that he would raise tariffs on imported steel from 25% to 50%. On February 10, Trump signed an executive order announcing a 25% tariff on all steel and aluminum imported into the US. On March 12 local time, the measure to impose a 25% tariff on all steel and aluminum imported into the US officially took effect.

US Stock Market Indices Closed Mixed Last Friday, with Tesla Falling Over 3%

The three major US stock indices closed mixed last Friday. The Dow Jones Industrial Average rose 0.12%, with a cumulative increase of 3.94% last month; the Nasdaq Composite fell 0.32%, with a cumulative increase of 9.56% last month; the S&P 500 index fell 0.01%, with a cumulative increase of 6.15% last month. The S&P 500 and Nasdaq 100 indices recorded their largest monthly gains since November 2023. Most popular tech stocks fell, with Tesla and Intel dropping over 3%, and Nvidia, AMD, and Super Micro Computer falling over 2%.

Trump Says US Automakers "Must Produce Entire Vehicles Domestically"

US President Trump stated on May 30 that US automakers, including Tesla, must produce entire vehicles and all parts domestically in the US, rather than abroad. Trump expressed his frustration with automakers previously producing parts in Canada, Mexico, and Europe, but stated that in the coming year, these automakers "must produce entire vehicles in the US."

Ukrainian Army Commander Mykhailo Drapat Has Submitted His Resignation

Mykhailo Drapat, Commander of the Ukrainian Armed Forces' Ground Forces, has submitted his resignation report. On the same day, Ukrainian Army Commander Mykhailo Drapat officially announced through social media that, based on his personal responsibility for the tragedy at Training Ground No. 239, he had decided to resign from his current position.

Russian Investigative Committee Classifies Two Bridge Sabotage Incidents as Terrorist Attacks

The Russian Investigative Committee classified the bridge sabotage incidents in Bryansk Oblast and Kursk Oblast as terrorist attacks on June 1 local time.

US to Raise Tariffs on Imported Steel and Aluminum; EU: Ready to Take Countermeasures

The European Commission expressed regret in a statement over the US announcement to raise tariffs on imported steel and aluminum, and stated that the EU is ready to take countermeasures. The statement said that the US government's decision has further added uncertainty to the global economy, and that raising tariffs has also undermined ongoing efforts to resolve issues through negotiations. The statement emphasized that the European Commission is currently conducting final consultations on expanding countermeasures. If a mutually acceptable solution cannot be reached, the existing and additional EU measures will automatically take effect on July 14, or earlier if necessary.

US Core PCE Price Index up 2.5% YoY in April, hitting a new low since March 2021

The US Core PCE Price Index rose 2.5% YoY in April, hitting a new low since March 2021. The market expectation was 2.5%, compared with the previous figure of 2.6%. The US Core PCE Price Index rose 0.1% MoM in April, with an estimated increase of 0.1%, compared with the previous figure of 0%.