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Monthly Archives: July 2025 - 2. page

China’s Steel Industry Struggles with Overcapacity as Japanese Competitor Outearns Top Chinese Firms

China’s steel industry faces mounting challenges from overproduction and destructive internal competition that is disrupting market order and eroding industry profits. A stark illustration of this crisis emerged when financial analysis revealed that the combined annual net profits of China’s top four most profitable listed steel companies failed to match the earnings of a single Japanese competitor.

According to calculations by Yicai Global based on 2024 financial reports, Japan’s Nippon Steel Corporation generated net profits of 350.2 billion yen (approximately $2.37 billion USD) last year. In contrast, China’s five most profitable listed steel companies—Baosteel ($1.03 billion USD), CITIC Special Steel ($715 million USD), Nanjing Iron & Steel ($315 million USD), Hualing Steel ($284 million USD), and Jiuli Hi-Tech Metals ($208 million USD)—earned significantly less individually.

Despite China’s dominance in production volume, with China Baowu Group leading globally at over 130 million tons of crude steel output, profitability remains elusive. The World Steel Statistics 2025 shows multiple Chinese steel companies among the world’s top 10 producers, yet their profit margins lag far behind those in the Japanese steel industry.

Industry experts attribute this disparity to structural advantages held by Japanese steel companies. Ge Xin, deputy director of Lange Steel Research Center, explains that Japanese firms secured overseas mineral resources through equity participation decades ago, reducing raw material costs. Additionally, they focus on high-end steel products, achieving superior profit margins.

Following Japan’s real estate bubble collapse in the 1990s, Japanese steel companies pivoted from construction materials to specialized products, including high-strength automotive steel and precision materials for electronics. Meanwhile, Chinese companies remain trapped in homogeneous competition, with even previously profitable sectors like cold-rolled products experiencing continuous price declines.

China Steel Association President Yao Lin recently acknowledged the industry’s failure to control capacity expansion and promote consolidation, citing persistent low-price competition strategies that continue undermining market stability and industry profitability.

Source: Central News Agency (Taiwan), July 20, 2025
https://www.cna.com.tw/news/acn/202507200072.aspx

Briefings | | |   Economy/Resources

UDN: China’s Imports of 3 Major Energy Resources from the U.S. Zeroed in June

United Daily News (UDN), one of Taiwan’s leading media outlets, recently reported that, according to China Customs statistics, China’s imports of the three major energy sources from the United States – coal, crude oil, and liquefied natural gas (LNG) – were nearly zero in June.

Since the launch of the U.S.-China trade war by President Trump, Chinese buyers have gradually reduced their purchases of American energy and diversified their supply sources. As the world’s largest crude oil importer, China did not buy any U.S. crude oil in June – the first time this has happened in nearly three years. For comparison, in June of last year, China imported almost $800 million worth of American crude oil.

U.S. LNG exports to China remained at zero for the fourth consecutive month in June. Coal exports from the U.S. to China also dropped for the second straight month, amounting to only a few hundred dollars – a stark contrast to the $90 million worth of U.S. coal imported by China in June last year. Currently, China relies heavily on Saudi Arabia and Russia for its crude oil supplies.

In addition to energy, China’s imports of U.S. agricultural products – including corn – have also declined in recent months. According to the U.S. Department of Agriculture, China has made no forward purchases of U.S. soybeans or corn for the 2025–26 season. At the same time, China is ramping up domestic natural gas production in a bid to enhance its energy security.

Source: UDN, July 25, 2025
https://udn.com/news/story/7331/8895383

Briefings | | |   Economy/Resources US-China Relations

BBC Chinese: China’s Foreign Investment Down 13.6 Percent Since Beginning of 2025

BBC Chinese Edition recently reported based on data from China’s National Bureau of Statistics that in the first half of the year, the growth rate of fixed asset investment declined 2.8 percent year-over-year. This is also a decline from the 3.7 percent year-to-date figure for May. From the beginning of this year, China’s foreign direct investment (FDI) is also down 13.6 percent, year-over-year, continuing to shrink.

Uncertainty surrounding tariffs and geopolitical developments continued to weigh on fixed asset investment as businesses delayed new investments until there was greater clarity. With further tariff-related uncertainty likely to again emerge in August, the Chinese market may see this weak investment demand continue in the coming months.

According to the Bureau of Statistics, government-led fixed asset investment continued to outperform private investment, growing five percent year-to-date, while private investment declined by 0.6 percent year-to-date, turning negative for the first time this year and hitting the lowest level since 2023.

Source: BBC Chinese, July 15, 2025
https://www.bbc.com/zhongwen/articles/ce8zp58vq69o/simp

Briefings | | |   Economy/Resources

Lianhe Zaobao: Amazon Closes Its Shanghai AI Research Institute

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that U.S. e-commerce giant Amazon has closed its artificial intelligence (AI) research institute in Shanghai, becoming the latest in a wave of U.S. companies to lay off employees in China.

An Amazon spokesperson said that after an in-depth assessment of the company’s organization, development priorities and future strategic direction, Amazon decided to streamline some teams at Amazon Cloud Technology. He did not confirm the reports that the Shanghai AI Research Institute has been disbanded. However, scientists at the Amazon Web Services (AWS) Shanghai AI Research Institute posted on WeChat that they received the notice of the close-down of the institute due to the “strategic adjustment between China and the United States.”

Amazon Web Services (AWS) established the Shanghai AI Research Institute in September 2018. At its peak, it had more than 1,000 Chinese employees. As US-China relations continue to be tense, many U.S. companies have reduced their R&D teams in China in recent years. In August last year, IBM completely closed its R&D department in China, and thousands of employees were laid off. In June this year, Citigroup announced the streamlining of its global technology solution centers in Shanghai and Dalian (Liaoning Province), laying off about 3,500 technical personnel.

Source: Lianhe Zaobao, July 23, 2025
https://www.zaobao.com.sg/news/china/story20250723-7201947

Briefings | | |   Information/Technology US-China Relations

Leadership Shake-up in China’s People’s Armed Police: Commander Wang Chunning Disappears, Acting Chief Steps In

Wang Chunning (王春宁), commander of China’s People’s Armed Police (PAP), has been absent from public view since late last year and is rumored to be under investigation.

On July 21, the 15th National Commendation Conference for Heroes and Role Models of Courageous Acts was held in Beijing. According to reports from Legal Daily and Procuratorial Daily the following day, Cao Junzhang (曹均章), serving as the acting commander of the PAP, attended the event in an official capacity.

Born in 1965 and holding the rank of lieutenant general, Cao has had a long military career in the former Chengdu Military Region. His previous roles include Director of the Operations Department, Commander of a division within the Army’s 13th Group Army, Deputy Commander of that army, and later Deputy Commander of the 76th Group Army.

Political analysts believe the current shift in leadership signals that the PAP remains firmly under the influence of Zhang Youxia, Vice Chairman of the Central Military Commission. Cao’s background links him to Zhang, as the 13th Group Army had long been under Zhang’s command. Another deputy commander of the PAP, Fu Wenhua (付文化), also hails from the 16th Group Army in the Shenyang Military Region –  Zhang’s power base.

The PAP plays a critical role in China’s internal security structure and is frequently deployed to suppress public dissent.

Source: Epoch Times, July 24, 2025
https://www.epochtimes.com/gb/25/7/24/n14559438.htm

Briefings | | |   @CS Defense/Military Government/Politics

Israel Warns of Suspected Chinese Role in Rebuilding Iran’s Ballistic Missile Program

Israel’s Ambassador to the United States, Yechiel Leiter, told Voice of America (VOA) on July 24 that following last month’s 12-day Iran-Israel war, there are “troubling signs” that China may be helping Iran rebuild its ballistic missile program. Western media had previously reported that in the first quarter of this year, Iran planned to transport precursor chemicals for missile propellants from China for use in ballistic missile production. Leiter’s remarks were in response to VOA’s inquiry about Israel’s view on the matter.

When asked what troubling signs of Chinese assistance to Iran he was referring to, Leiter mentioned some back-and-forth shipments, the chemicals, and the capability to rebuild or restructure the ballistic missile program.

Leiter said Israel had “damaged” Iran’s ballistic missile project by destroying components of the program. He stated that Israel needs to make sure China or other bad actors don’t help Iran to rebuild it.

Source: VOA, July 26, 2025
https://www.voachinese.com/a/exclusive-israeli-envoy-to-us-warns-china-may-be-helping-iran-restore-its-missile-program-20250725/8050129.html

Briefings | | |   Geo-Strategic Trend

Xinhua: Cuban PM Vows Defiance Against U.S. Sanctions, Pledges to Defend National Dignity

According to Xinhua News Agency, Cuban Prime Minister Manuel Marrero reaffirmed Cuba’s unwavering resistance to U.S. sanctions during the July 26 commemoration of “National Rebellion Day.” He vowed that Cuba would overcome its current hardships and defend its national dignity at all costs.

In his address, Marrero condemned the U.S. government’s long-standing hostile policies toward Cuba, accusing it of imposing a severe blockade tantamount to a “wartime siege.” He argued that the blockade seeks to economically strangle the nation and stir despair and discontent among the Cuban people. Despite facing unprecedented challenges, Marrero said the Cuban people remain resilient and optimistic, just as they were during the revolutionary era. “Cuba will not surrender, will not yield, and will never kneel to anyone,” he declared.

Source: Xinhua, July 27, 2025
http://www.xinhuanet.com/20250727/3892c9dad76a4c37a0734ebbb432d91a/c.html

Briefings | | |   Geo-Strategic Trend