Uncommon earth controls, Hong Kong market surge, and US coverage turbulence

China’s newly enforced export controls on uncommon earth components have begun to disrupt international provide chains considerably.

Since introducing the controls in April, exporters should now receive licences from China’s Ministry of Commerce earlier than delivery seven focused uncommon earths or everlasting magnets utilized in sectors starting from electrical autos and robotics to renewable vitality and army aviation.

Learn: China deploys uncommon earths as weapon in commerce warfare with Trump

Up to now, the tempo of licence approvals has been gradual. Some shipments to Europe have resumed, together with these for Volkswagen, however business teams just like the Federation of German Industries warn that Europe is near a manufacturing crunch.

Tesla, Ford, and Lockheed Martin have expressed issues over delays, and uncertainty stays as as to if any shipments to the US have been authorised.

Executives on the bottom cite disorganisation, with one European official calling the state of affairs “untenable”.

Elon Musk disclosed that Chinese language regulators requested Tesla to make sure that magnets imported from China wouldn’t be used for army functions.

A provider in Chengdu confirmed that, whereas non-military shipments should still be permitted, functions with even potential army hyperlinks are being rejected outright.

This tightening of controls adopted sweeping tariffs imposed by US President Donald Trump and demonstrates China’s intent to weaponise its dominance in uncommon earth processing.

Although firms like Yantai Zhenghai Magnetic Materials have resumed taking orders, it’s clear that the stream of uncommon earths will stay unpredictable.

This case has intensified Western curiosity in lowering reliance on Chinese language mineral provides. As international demand for inexperienced applied sciences surges, international locations might speed up home mining, put money into recycling, and set up strategic reserves.

Hong Kong shares outperform amid AI optimism and commerce aid

Whereas Beijing grapples with geopolitical rigidity and a home slowdown, Hong Kong’s markets have rallied. The Cling Seng Index has jumped 16.4% yr up to now, marking the most important efficiency hole relative to the mainland’s CSI 300 Index since 2008.

This divergence displays each a sectoral distinction and investor sentiment. A serious driver is capital stream from mainland traders looking for refuge from financial uncertainty, and investing in synthetic intelligence (AI) and tech-heavy sectors listed in Hong Kong.

Chinese language corporations like Tencent and Alibaba, unavailable on mainland exchanges till just lately, are among the many largest beneficiaries.

The AI momentum, sparked by DeepSeek’s technological breakthroughs, mixed with de-escalation within the US-China tariff warfare and the US Federal Reserve’s dovish stance, has attracted speculative and institutional traders alike.

But a lot of this inflow seems brief time period. Hedge funds dominate the latest influx, and long-only traders stay cautious, nonetheless scarred by earlier volatility in China-linked equities.

BNP Paribas analysts observe that Hong Kong’s heavier weighting in global-facing sectors makes it extra aware of worldwide coverage shifts. The Cling Seng can be poised to profit from potential reallocations away from overvalued US equities and anticipated Fed fee cuts within the second half of 2025.

US sentiment weakens regardless of commerce pause

Regardless of a brief easing in commerce tensions with China, US financial sentiment stays fragile.

Moody’s downgraded America’s credit standing owing to ballooning debt ranges, whereas shopper sentiment (as measured by a survey by the College of Michigan) fell to its second-lowest studying on report.

Learn:

One-year inflation expectations have surged to 7.3%, the best stage recorded within the survey since 1981.

Whereas producer costs are falling, companies are absorbing extra of the price burden, particularly in tariff-exposed sectors.

Retailers have warned of rising shopper costs even with the partial rollback of tariffs on Chinese language items.

Trump’s flagship tax invoice, which incorporates an extension of his 2017 tax cuts and deep spending reductions, suffered a blow as fiscal conservatives and reasonable Republicans clashed. This legislative gridlock, mixed with deteriorating sentiment and inflation issues, has led to mounting uncertainty in each bond and fairness markets.

Dr Francois Stofberg is a monetary well-being economist on the Environment friendly Group.

Observe Moneyweb’s in-depth finance and enterprise information on WhatsApp right here.

China’s newly enforced export controls on uncommon earth components have begun to disrupt international provide chains considerably.

Since introducing the controls in April, exporters should now receive licences from China’s Ministry of Commerce earlier than delivery seven focused uncommon earths or everlasting magnets utilized in sectors starting from electrical autos and robotics to renewable vitality and army aviation.

Learn: China deploys uncommon earths as weapon in commerce warfare with Trump

Up to now, the tempo of licence approvals has been gradual. Some shipments to Europe have resumed, together with these for Volkswagen, however business teams just like the Federation of German Industries warn that Europe is near a manufacturing crunch.

Tesla, Ford, and Lockheed Martin have expressed issues over delays, and uncertainty stays as as to if any shipments to the US have been authorised.

Executives on the bottom cite disorganisation, with one European official calling the state of affairs “untenable”.

Elon Musk disclosed that Chinese language regulators requested Tesla to make sure that magnets imported from China wouldn’t be used for army functions.

A provider in Chengdu confirmed that, whereas non-military shipments should still be permitted, functions with even potential army hyperlinks are being rejected outright.

This tightening of controls adopted sweeping tariffs imposed by US President Donald Trump and demonstrates China’s intent to weaponise its dominance in uncommon earth processing.

Although firms like Yantai Zhenghai Magnetic Materials have resumed taking orders, it’s clear that the stream of uncommon earths will stay unpredictable.

This case has intensified Western curiosity in lowering reliance on Chinese language mineral provides. As international demand for inexperienced applied sciences surges, international locations might speed up home mining, put money into recycling, and set up strategic reserves.

Hong Kong shares outperform amid AI optimism and commerce aid

Whereas Beijing grapples with geopolitical rigidity and a home slowdown, Hong Kong’s markets have rallied. The Cling Seng Index has jumped 16.4% yr up to now, marking the most important efficiency hole relative to the mainland’s CSI 300 Index since 2008.

This divergence displays each a sectoral distinction and investor sentiment. A serious driver is capital stream from mainland traders looking for refuge from financial uncertainty, and investing in synthetic intelligence (AI) and tech-heavy sectors listed in Hong Kong.

Chinese language corporations like Tencent and Alibaba, unavailable on mainland exchanges till just lately, are among the many largest beneficiaries.

The AI momentum, sparked by DeepSeek’s technological breakthroughs, mixed with de-escalation within the US-China tariff warfare and the US Federal Reserve’s dovish stance, has attracted speculative and institutional traders alike.

But a lot of this inflow seems brief time period. Hedge funds dominate the latest influx, and long-only traders stay cautious, nonetheless scarred by earlier volatility in China-linked equities.

BNP Paribas analysts observe that Hong Kong’s heavier weighting in global-facing sectors makes it extra aware of worldwide coverage shifts. The Cling Seng can be poised to profit from potential reallocations away from overvalued US equities and anticipated Fed fee cuts within the second half of 2025.

US sentiment weakens regardless of commerce pause

Regardless of a brief easing in commerce tensions with China, US financial sentiment stays fragile.

Moody’s downgraded America’s credit standing owing to ballooning debt ranges, whereas shopper sentiment (as measured by a survey by the College of Michigan) fell to its second-lowest studying on report.

Learn:

One-year inflation expectations have surged to 7.3%, the best stage recorded within the survey since 1981.

Whereas producer costs are falling, companies are absorbing extra of the price burden, particularly in tariff-exposed sectors.

Retailers have warned of rising shopper costs even with the partial rollback of tariffs on Chinese language items.

Trump’s flagship tax invoice, which incorporates an extension of his 2017 tax cuts and deep spending reductions, suffered a blow as fiscal conservatives and reasonable Republicans clashed. This legislative gridlock, mixed with deteriorating sentiment and inflation issues, has led to mounting uncertainty in each bond and fairness markets.

Dr Francois Stofberg is a monetary well-being economist on the Environment friendly Group.

Observe Moneyweb’s in-depth finance and enterprise information on WhatsApp right here.

China’s newly enforced export controls on uncommon earth components have begun to disrupt international provide chains considerably.

Since introducing the controls in April, exporters should now receive licences from China’s Ministry of Commerce earlier than delivery seven focused uncommon earths or everlasting magnets utilized in sectors starting from electrical autos and robotics to renewable vitality and army aviation.

Learn: China deploys uncommon earths as weapon in commerce warfare with Trump

Up to now, the tempo of licence approvals has been gradual. Some shipments to Europe have resumed, together with these for Volkswagen, however business teams just like the Federation of German Industries warn that Europe is near a manufacturing crunch.

Tesla, Ford, and Lockheed Martin have expressed issues over delays, and uncertainty stays as as to if any shipments to the US have been authorised.

Executives on the bottom cite disorganisation, with one European official calling the state of affairs “untenable”.

Elon Musk disclosed that Chinese language regulators requested Tesla to make sure that magnets imported from China wouldn’t be used for army functions.

A provider in Chengdu confirmed that, whereas non-military shipments should still be permitted, functions with even potential army hyperlinks are being rejected outright.

This tightening of controls adopted sweeping tariffs imposed by US President Donald Trump and demonstrates China’s intent to weaponise its dominance in uncommon earth processing.

Although firms like Yantai Zhenghai Magnetic Materials have resumed taking orders, it’s clear that the stream of uncommon earths will stay unpredictable.

This case has intensified Western curiosity in lowering reliance on Chinese language mineral provides. As international demand for inexperienced applied sciences surges, international locations might speed up home mining, put money into recycling, and set up strategic reserves.

Hong Kong shares outperform amid AI optimism and commerce aid

Whereas Beijing grapples with geopolitical rigidity and a home slowdown, Hong Kong’s markets have rallied. The Cling Seng Index has jumped 16.4% yr up to now, marking the most important efficiency hole relative to the mainland’s CSI 300 Index since 2008.

This divergence displays each a sectoral distinction and investor sentiment. A serious driver is capital stream from mainland traders looking for refuge from financial uncertainty, and investing in synthetic intelligence (AI) and tech-heavy sectors listed in Hong Kong.

Chinese language corporations like Tencent and Alibaba, unavailable on mainland exchanges till just lately, are among the many largest beneficiaries.

The AI momentum, sparked by DeepSeek’s technological breakthroughs, mixed with de-escalation within the US-China tariff warfare and the US Federal Reserve’s dovish stance, has attracted speculative and institutional traders alike.

But a lot of this inflow seems brief time period. Hedge funds dominate the latest influx, and long-only traders stay cautious, nonetheless scarred by earlier volatility in China-linked equities.

BNP Paribas analysts observe that Hong Kong’s heavier weighting in global-facing sectors makes it extra aware of worldwide coverage shifts. The Cling Seng can be poised to profit from potential reallocations away from overvalued US equities and anticipated Fed fee cuts within the second half of 2025.

US sentiment weakens regardless of commerce pause

Regardless of a brief easing in commerce tensions with China, US financial sentiment stays fragile.

Moody’s downgraded America’s credit standing owing to ballooning debt ranges, whereas shopper sentiment (as measured by a survey by the College of Michigan) fell to its second-lowest studying on report.

Learn:

One-year inflation expectations have surged to 7.3%, the best stage recorded within the survey since 1981.

Whereas producer costs are falling, companies are absorbing extra of the price burden, particularly in tariff-exposed sectors.

Retailers have warned of rising shopper costs even with the partial rollback of tariffs on Chinese language items.

Trump’s flagship tax invoice, which incorporates an extension of his 2017 tax cuts and deep spending reductions, suffered a blow as fiscal conservatives and reasonable Republicans clashed. This legislative gridlock, mixed with deteriorating sentiment and inflation issues, has led to mounting uncertainty in each bond and fairness markets.

Dr Francois Stofberg is a monetary well-being economist on the Environment friendly Group.

Observe Moneyweb’s in-depth finance and enterprise information on WhatsApp right here.

China’s newly enforced export controls on uncommon earth components have begun to disrupt international provide chains considerably.

Since introducing the controls in April, exporters should now receive licences from China’s Ministry of Commerce earlier than delivery seven focused uncommon earths or everlasting magnets utilized in sectors starting from electrical autos and robotics to renewable vitality and army aviation.

Learn: China deploys uncommon earths as weapon in commerce warfare with Trump

Up to now, the tempo of licence approvals has been gradual. Some shipments to Europe have resumed, together with these for Volkswagen, however business teams just like the Federation of German Industries warn that Europe is near a manufacturing crunch.

Tesla, Ford, and Lockheed Martin have expressed issues over delays, and uncertainty stays as as to if any shipments to the US have been authorised.

Executives on the bottom cite disorganisation, with one European official calling the state of affairs “untenable”.

Elon Musk disclosed that Chinese language regulators requested Tesla to make sure that magnets imported from China wouldn’t be used for army functions.

A provider in Chengdu confirmed that, whereas non-military shipments should still be permitted, functions with even potential army hyperlinks are being rejected outright.

This tightening of controls adopted sweeping tariffs imposed by US President Donald Trump and demonstrates China’s intent to weaponise its dominance in uncommon earth processing.

Although firms like Yantai Zhenghai Magnetic Materials have resumed taking orders, it’s clear that the stream of uncommon earths will stay unpredictable.

This case has intensified Western curiosity in lowering reliance on Chinese language mineral provides. As international demand for inexperienced applied sciences surges, international locations might speed up home mining, put money into recycling, and set up strategic reserves.

Hong Kong shares outperform amid AI optimism and commerce aid

Whereas Beijing grapples with geopolitical rigidity and a home slowdown, Hong Kong’s markets have rallied. The Cling Seng Index has jumped 16.4% yr up to now, marking the most important efficiency hole relative to the mainland’s CSI 300 Index since 2008.

This divergence displays each a sectoral distinction and investor sentiment. A serious driver is capital stream from mainland traders looking for refuge from financial uncertainty, and investing in synthetic intelligence (AI) and tech-heavy sectors listed in Hong Kong.

Chinese language corporations like Tencent and Alibaba, unavailable on mainland exchanges till just lately, are among the many largest beneficiaries.

The AI momentum, sparked by DeepSeek’s technological breakthroughs, mixed with de-escalation within the US-China tariff warfare and the US Federal Reserve’s dovish stance, has attracted speculative and institutional traders alike.

But a lot of this inflow seems brief time period. Hedge funds dominate the latest influx, and long-only traders stay cautious, nonetheless scarred by earlier volatility in China-linked equities.

BNP Paribas analysts observe that Hong Kong’s heavier weighting in global-facing sectors makes it extra aware of worldwide coverage shifts. The Cling Seng can be poised to profit from potential reallocations away from overvalued US equities and anticipated Fed fee cuts within the second half of 2025.

US sentiment weakens regardless of commerce pause

Regardless of a brief easing in commerce tensions with China, US financial sentiment stays fragile.

Moody’s downgraded America’s credit standing owing to ballooning debt ranges, whereas shopper sentiment (as measured by a survey by the College of Michigan) fell to its second-lowest studying on report.

Learn:

One-year inflation expectations have surged to 7.3%, the best stage recorded within the survey since 1981.

Whereas producer costs are falling, companies are absorbing extra of the price burden, particularly in tariff-exposed sectors.

Retailers have warned of rising shopper costs even with the partial rollback of tariffs on Chinese language items.

Trump’s flagship tax invoice, which incorporates an extension of his 2017 tax cuts and deep spending reductions, suffered a blow as fiscal conservatives and reasonable Republicans clashed. This legislative gridlock, mixed with deteriorating sentiment and inflation issues, has led to mounting uncertainty in each bond and fairness markets.

Dr Francois Stofberg is a monetary well-being economist on the Environment friendly Group.

Observe Moneyweb’s in-depth finance and enterprise information on WhatsApp right here.