[Morning News] China responds to rare earth export issues; five departments jointly launch 2025 NEV promotion in rural areas

Macro News

1. Foreign Ministry spokesperson Lin Jian hosted a regular press conference yesterday. A reporter asked that the US has recently been claiming that China has violated the consensus reached at the China-US Geneva Economic and Trade Talks and has taken a series of negative actions. Lin Jian pointed out that without any factual basis, the US has smeared and accused China, imposed export controls on chips to China, suspended the sale of chip design and software to China, and announced the revocation of visas for Chinese students, among other extreme repressive measures. These actions have seriously undermined the Geneva consensus and harmed China's legitimate rights and interests. China firmly opposes this and has lodged solemn representations. Lin Jian also stated that pressure and coercion are not the right way to engage with China. He urged the US to respect the facts, stop spreading false information, correct its erroneous practices, and take concrete actions to uphold the consensus reached by both sides.

2. At yesterday's regular press conference of the Foreign Ministry, another reporter asked whether China plans to ease export restrictions or accelerate the approval of export license applications, as executives and representatives from the automotive industries in Europe, the US, and India have claimed that China's export controls on rare earths pose a shortage risk that could soon lead to a halt in automobile manufacturing. Lin Jian suggested inquiring with the competent Chinese authorities.

3. At 6 a.m. local time on June 4, the Central Election Management Committee of South Korea held a plenary session and passed a motion on the results of the presidential election vote, officially marking the beginning of Lee Jae-myung's presidential term. Around 5:03 a.m. local time on June 4, the vote-counting process for South Korea's 21st presidential election concluded. According to the results, Lee Jae-myung, the candidate from the Democratic Party of Korea, received 49.42% of the votes, while Kim Moon-soo, the candidate from the People Power Party, received 41.15%, and Lee Jun-seok, the candidate from the Reform and Innovation Party, received 8.34%.

4. The Organisation for Economic Co-operation and Development (OECD) released an economic outlook report on June 3 local time, projecting that the global economy will grow at a rate of 2.9% in both 2025 and 2026, down 0.2 and 0.1 percentage points, respectively, from the forecast made in March this year.

5. According to information from the People's Bank of China, in May 2025, the China Development Bank, the Export-Import Bank of China, and the Agricultural Development Bank of China net repaid 270 billion yuan in pledged supplementary loans. As of the end of May, the balance of pledged supplementary loans stood at 1,793.9 billion yuan.

Industry News

1. The Ministry of Commerce and four other departments have organized the 2025 New Energy Vehicle (NEV) Rural Promotion Campaign. They encourage market entities in various fields, including NEV production, sales, finance, charging/battery swapping, and after-sales services, to participate together. By combining policy tools such as trade-in programs and measures to address shortcomings in charging/battery swapping infrastructure in counties, they will customize integrated sales promotion plans that combine "car purchase discounts, energy use support, and service guarantees," and improve the after-sales service network covering the entire lifecycle of car purchase, use, and maintenance.

2. Lei Jun, founder of Xiaomi, disclosed at the Xiaomi Investor Conference that the selling price of the newly launched Xiaomi YU7 could not possibly be the rumored 235,900 yuan, and the official pricing would only be determined 1-2 days before the launch. Lei Jun stated that Xiaomi began investing in R&D in the robotics field five years ago, and currently, relevant capabilities are being trialed at its automobile factory. Xiaomi's automotive chips are also under development and are expected to be launched soon. Lei Jun indicated that losses in Xiaomi's automotive business are gradually narrowing, and it is expected to achieve profitability in the third to fourth quarters of this year.

3. A reporter from Cailian Press learned that a local securities regulator had issued a notice to entities involved in the capital market (including publicly listed firms and institutions) to investigate leads, cases, and suggestions related to "short essays" in the stock market. The aim is to better promote the rectification of the phenomenon of "black mouth" (online commentators spreading false information) harming enterprises in the capital market and jointly create a clean and upright public opinion environment in the capital market.

4. According to data from the State Post Bureau, during the Dragon Boat Festival holiday, the national postal and express delivery industry handled over 1.5 billion express parcels. Postal and express delivery enterprises enhanced the delivery efficiency of specialty fresh produce by increasing the use of intelligent equipment. The national postal and express delivery industry handled 1.511 billion express parcels, up 19.4% YoY.

6. Affected by the volatile increase in international oil prices, domestic gasoline and diesel prices were raised at 24:00 on June 3. The specifics of this oil price adjustment are as follows: Starting from 24:00 on June 3, domestic gasoline and diesel prices were raised by 65 yuan and 60 yuan per mt, respectively. On a national average, the prices of 92-octane gasoline, 95-octane gasoline, and 0-diesel were all raised by 0.05 yuan per liter. Based on this calculation, filling up a 50L tank of 92-octane gasoline will cost an additional 2.5 yuan.

Corporate News

1. Guangkang Biochemical announced that shareholders plan to collectively reduce their holdings by no more than 6% of the company's shares.

2. *ST Zhongrun announced the revocation of delisting risk warnings and other risk warnings, with the stock abbreviation changing to "Zhongrun Resources."

3. Guoke Military Industry announced that shareholders plan to reduce their holdings by no more than 2.97% of the company's shares.

4. Lepu Medical announced that its "Youth Needle" has received NMPA registration approval.

5. Rongfa Nuclear Power announced that its wholly-owned subsidiary has won a bid for a project worth 189 million yuan.

6. Shutaishen announced that the conditional marketing authorization application for STSP-0601 for injection has been accepted by the National Medical Products Administration.

7. United Optoelectronics announced its intention to acquire 100% of the shares of Changyi Optoelectronics, and its stock will resume trading today.

8. LONGi Green Energy stated in the record of investor relations activities that orders for its HPBC2.0 products have increased, with overseas orders accounting for over 50%.

9. NavInfo announced the signing of a strategic cooperation framework agreement with Alibaba Cloud, planning to carry out cooperation in large model applications, assisted driving, and the Internet of Vehicles.

10. China CITIC Bank announced that it had received approval to establish CITIC Financial Asset Investment Co., Ltd., with a proposed registered capital of RMB 10 billion yuan.

11. Vohringer announced that Jin Yawei would become the actual controller, and the stock resumed trading.

12. Luoping Zinc & Electricity announced that its controlling shareholder had agreed to transfer 22.4% of the company's shares, and the stock resumed trading.

13. Cuiwei Co., Ltd. announced significant declines in revenue from its retail and acquiring businesses.

14. Seres announced that cumulative sales of the AITO M9 increased by 19.46% YoY from January to May.

15. Precision Forging Technology announced plans to invest RMB 50 million to acquire a stake in Wuhan Gelanruo Intelligent Robot Co., Ltd.

16. Xiamen Tungsten stated on an interactive platform that the company had supplied various tungsten products and components to domestic and overseas fusion customers, including ITER.

Global Markets

1. The three major US stock indices closed higher collectively, with the Dow Jones up 0.51%, the Nasdaq up 0.81%, and the S&P 500 up 0.58%. The Nasdaq Golden Dragon China Index closed up 0.56%, with most popular Chinese ADRs rising.

2. WTI crude oil futures closed up 1.42% at $63.41 per barrel. Brent crude oil futures closed up 1.55% at $65.63 per barrel.

3. COMEX gold futures closed down 0.6% at $3,376.9 per ounce. COMEX silver futures closed down 0.05% at $34.675 per ounce.

4. The US White House issued a statement saying that President Trump had signed an order to increase tariffs on imports of steel, aluminum, and their derivatives from 25% to 50%, effective from 00:01 AM EST on the 4th. The statement indicated that tariffs on steel and aluminum imports from the UK would remain at 25%.

Investment Opportunities Reference

1. 300-kilometer fully connected, new breakthrough in China's quantum direct communication field

According to media reports, a Chinese research team has innovatively proposed a theoretical architecture for long-distance, large-scale, scalable, fully connected quantum direct communication and successfully implemented a 300-kilometer-level quantum direct communication network among four nodes. The relevant research findings were published in Science Bulletin. Experimental results showed that the fidelity of shared quantum states among nodes remained above 85% after communication, verifying the reliability of the scheme in long-distance communication. The number of photon pairs reaching the receiving node after 300 kilometers of transmission still reached 300-400 Hz, meaning that after encoding, the theoretical communication rate could reach several bits per second.

Shanghai Securities believes that quantum computing has become a core area of technological competition among major powers. Overseas tech giants such as IBM and Google have continued to make breakthroughs in superconducting routes, while Microsoft has taken a topological approach. China occupies an important position in exploring multiple paths in quantum computing, and the development potential of China's quantum computing industry is enormous. According to data from ICVTA&K and PhotonBox Research Institute, the global quantum industry was valued at $5 billion in 2024 and is expected to exceed $800 billion by 2035, with a CAGR of 59%. The upstream market size is projected to reach $252.7 billion in 2035.

2. Institutions claim that the current global inventory cycle for analog chips has largely hit bottom.

Media reports indicate that recently, the research group led by Assistant Professor Huan of the Shenzhen-Hong Kong Microelectronics Institute at the Southern University of Science and Technology has achieved multiple significant breakthroughs in analog and mixed-signal integrated circuit design, with applications spanning multiple critical fields such as the Internet of Things (IoT), wearable systems, and next-generation biomedical technologies.

Analog chips are used to process analog signals and possess functions such as power conversion, distribution, detection, as well as signal amplification and conversion in the field of electronic device management. As a crucial component of the semiconductor industry, the growth of the analog chip market is primarily driven by long-term demand from sectors like consumer electronics, automotive electronics, and industrial control, as well as by emerging fields such as artificial intelligence (AI), high-performance computing, and new energy vehicles (NEVs). CITIC Securities' research report states that after nearly six quarters of adjustment, combined with the first-quarter financial data from seven major European and American analog chip companies and their public statements, CITIC Securities judges that the current global inventory cycle for analog chips has largely hit bottom.

3. This technology is rapidly transitioning from the laboratory to commercial applications.

Recently, reporters learned from Beijing Tiantan Hospital, Capital Medical University, that the hospital's Clinical and Translational Ward for Brain-Computer Interface (BCI) was officially inaugurated. "This is the first ward in China to apply BCI technology in clinical settings. The establishment of a physical ward marks the official entry of the BCI clinical translation system into a phase of 'standardization, platformization, normalization, and replicability'," introduced Cao Yong, the ward director and executive deputy director of the Neurosurgery Center at Beijing Tiantan Hospital.

2025 is regarded as a pivotal year for China's BCI technology to officially enter clinical practice. Previously, Beijing, Shanghai, and other cities have introduced relevant industrial plans, aiming to complete clinical trials for more than five invasive products by 2030. Shanghai Securities points out that BCI is hailed as "the most disruptive technology of the 21st century," and the industry is developing rapidly: from 2023 to 2024, the global BCI field has witnessed key breakthroughs, including Neuralink obtaining FDA approval to conduct human clinical trials, China's "Beinao No. 1" completing its first wireless implantation surgery, and Meta unveiling a non-invasive wristband BCI interaction prototype. These milestones signify that BCI technology is rapidly transitioning from the laboratory to commercial applications. The Chinese market is experiencing rapid growth, with significant room for further expansion. Multiple regions have introduced action plans for the development of brain-computer interface (BCI) technology. China has launched major national science and technology projects such as the "Brain Science and Brain-Inspired Intelligence Research" initiative. The valuation of leading enterprises is expected to receive additional premiums.

4. Hong Kong's Stablecoin Ordinance Officially Enacted into Law

According to media reports, the Government of the Hong Kong Special Administrative Region published the Stablecoin Ordinance in the Gazette on May 30, signifying its official enactment into law. Previously, the Legislative Council of Hong Kong had formally passed the bill on May 21, establishing a licensing regime for issuers of "fiat-backed stablecoins" (stablecoins pegged to legal tender) in Hong Kong. This legislation aims to promote financial innovation while maintaining financial stability, marking a significant step forward for Hong Kong in the digital assets sector.

The refinement of the regulatory framework under the Stablecoin Ordinance provides more compliant and efficient settlement tools for global cross-border payments, facilitating the large-scale application of digital currencies in cross-border scenarios. Huaxi Securities believes that as the global regulatory framework gradually improves, stablecoins and Real-World Assets (RWA) will deeply integrate, becoming key infrastructure in the financial market. The compliance and programmability of stablecoins will drive the automation and globalization of RWA in areas such as green finance and supply chain finance, supporting the realization of a new digital financial landscape where traditional assets can achieve "on-chain liquidity and global allocation."