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Coming up, German Chancellor is on a trip to China for talks on trade and other issues.
Trump touts economic success in State of the Union address seeking reset ahead of midterm elections.
Hong Kong protests after Panama takes control of two key ports on the Panama Canal.
And gold prices rise again as tariff jitters give rise to safe haven demand.
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First up, Chinese President Xi Jinping has met with German Chancellor Friedrich Merz in Beijing.
Merz began his official visit to China on Wednesday.
The two-day trip comes amid rising transatlantic tensions and a cost in Europe, particularly from Berlin, for greater strategic autonomy.
The German leader is leading a high-level trade delegation including senior executives from nearly 30 German-leading companies in sectors including automotive, chemicals and manufacturing.
So for more.
Joining us now on the line is Dr George Zagopoulos, director of the EU-China program at CIFE, a French-based European research organization.
So thank you very much for joining us today, Dr. George Zagopoulos.
I mean, it's probably no coincidence that Matt is visiting China not long after French President Emmanuel Macron and British Prime Minister Keir Starmer.
He says, quote We want partnership with China balanced reliable, regulated and fair unquote.
So is China able to provide Europe with a balanced, reliable, regulated and fair partnership?
To start with, you are right in suggesting that more and more Western leaders, not only from Europe, but also from other countries, are visiting China.
And this is indicative of the growing importance of China in the international system.
As far as Germany is concerned, certainly Sino-German relations are critical for stability in the international system and also in the context of EU-China relations.
So I would say that, within this framework, the visit of Chancellor Mayer to China is demonstrating the interest of Germany to have a stable relationship with China, which is important in all fronts, from geopolitics into economic affairs.
And the decision of Chancellor Merz to speak about a balanced relationship is reflecting this interest of the German government for the next years to have as much as possible a good relationship with China in order to, together with China, build an international order according to their joint interests.
We know MADS has championed building a stronger Europe, both economically and militarily, to assert itself in an emerging new world order.
In many ways, this vision dovetails with French President Emmanuel Macron's concept regarding strategic autonomy, for example.
So, in your opinion, in what ways might China be able to assess the Europe in terms of turning this vision into reality?
The importance of Chancellor Merz right now is crucial for the European Union because he has three years more as a chancellor, while President of France, Emmanuel Macron, will not be able to seek re-election in 2027.
So, within this context, and also taking into account the importance of Germany for the European Union, it is important to suggest that the visit of Chancellor Merz is of high significance to China.
Certainly, right now, the European Union finds itself in a delicate position, and the main reason is the conflict in Ukraine, which is persisting, and at the same time, the european union attempts as much as possible to become strategically autonomous, as you correctly pointed out, and in that regard the role of germany and france is certainly of high significance.
China is a crucial actor in the international system, and together china and the european union can build a multilateral world.
Of course, differences exist, But the most important thing is that the two sides talk to each other.
And from the moment the European Union and China can build together a multilateral world.
The role of Germany is of high significance, as it is the most important economy in the Eurozone and in the European Union.
Hmm.
So, at a time of global turbulence and uncertainties, do you think China and Germany share a kind of common responsibility to stabilize global supply chains and industrial chains and oppose, for example, trade protectionism and economic coercion?
Yeah, the most important thing is that China and Germany, China and the European Union if I could be more general safeguard a multilateral world order, which is crucial for stability in the international system.
And this can only happen through collaboration.
So, from the moment China and Germany are prepared to work together toward this end, we can be more optimistic.
Certainly, the world is currently encountered with different challenges, as the unilateral policies of President Trump are shaking the international system.
And, within this context, the more countries collaborate in order to preserve some basic norms and some basic aspects of collaboration, the better it is.
And that's why the visit of Chancellor Merz to China is of cardinal significance at the moment.
According to recent official figures in Germany, China was back on top as Germany's most important market and a trading partner in 2025, overtaking the United States.
What do you think has led to this?
Well, I would say that trade between China and Germany has increased over the last decades.
So I'm not necessarily looking at data year per year.
I would look at the general tendency which is demonstrating the importance of the Chinese market for Germany and the importance of the German market for China.
Now, the fact that last year China surpassed the United States is an important indication.
I would say that there are two main reasons which we could mention in explaining that.
The first is the impact of the tariffs that President Donald Trump introduced, which has certainly had an impact on trade between China and Germany.
And the second is the general significance of the Chinese market for Germany, which is a standard indicator reflecting the interest of the German government to do business with China.
So I would say that these two reasons can explain the trend.
Now, some say between China and Germany, there is a complex trading relationship.
What is your take on this?
Well, we are living in a different world where, very often, challenges and problems tend to dominate discussions which are taking place between leaders.
And that's why this frame tends to persist.
Uh certainly, problems and challenges exist, but these talents and problems do not mean that collaboration between different countries cannot exist, and it is through this lens that i view the visit of of chancellor merge to to china.
So the two sides might disagree on different fronts as far as trade is concerned, but the two sides are prepared to intensify dialogue.
So from the moment dialogue intensification starts, then we can be optimistic that a joint way forward might be found.
So, in terms of the economic and trading relationship between China and Germany today, what do you think, what do you make of the most important issue where you think Beijing and Berlin must seek a very quick consensus or solution?
Well, I would say that the Sino-German partnership has been stable and evolving fast over the last decades, and I expect this trend to be strengthened.
Certainly, we passed through a difficult stage during the COVID-19 pandemic, but since 2023-24, I would say that relations between Germany and China have been stabilized and right now, the new German chancellor is prepared to work together with China.
It is his first visit to China, and this itself is indicating why this visit is of cardinal significance.
So, from geopolitics to economics, and from culture to trade and investments, there are different aspects of collaboration which can be on the table of negotiation.
So I wouldn't single out a single issue itself.
I would say that a multi-front and multi-dimensional collaboration is required, despite the problems which exist.
Apart from the Chinese operations of Germany's Mercedes-Benz and Simon's, We understand Matt is also scheduled to visit the Hangzhou-based Unitary Robotics during his trip this time.
How do you assess the possibility and the space for cooperation between China and Germany in the area of AI-powered humanoid robotics industry?
Well, China's technological progress is evident and all countries in the world, including in the West, cannot but see the reality.
So I would see that this is the driving force behind the interest of the German chancellor to make additional visits while staying in China, including in looking for strengthening collaboration in the field of artificial intelligence.
Certainly, Germany and the European Union want to be strategically autonomous in this field, but at the same time, the reality suggests that the collaboration with China remains important, taking into account that progress itself in China is manifesting why the Asian giant has become so powerful in this field.
So I would say that, although the European Union and Germany want to be strategically autonomous, it is not possible not to look at what China has achieved in the field.
Thank you very much for joining us.
Dr. George Zagopoulos, director of EU-China program at CIFE, a European research organization.
Coming up.
Donald Trump touts economic success in State of the Union address seeking reset ahead of midterm elections.
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President, Donald Trump has touted his economic record during the State of the Union address, saying he has ushered in what he calls a golden age.
Trump spent the first hour of his televised speech focused on the economy, boasting that he had curbed inflation, driven the stock market to historic highs, signed sweeping tax cuts and lowered drug prices.
The U.S. leader also touched on immigration and foreign policy during the speech.
Tuesday's annual address to the U.S.
Congress marked the longest of its kind in the history of the United States.
So joining us now on the line is Wang Xingsong, associate professor from the School of Government Beijing Normal University.
Thank you very much for joining us.
So President Trump said he has secured 18 trillion US dollars in investments in the United States since returning to office.
And on his trade tariffs, he repeated his regular claim that they are being paid for by foreign countries.
How do you look at these claims?
Are they consistent with the real picture?
Well, first of all, one needs to be aware of the fact that, when it comes to tariffs, the consensus is very clear, which is that tariffs are paid primarily by US importers, not by foreign governments.
Usually, when a tariff is imposed, American companies importing goods pay the tax at the border, and those costs are then typically passed on to American consumers and other businesses.
So foreign producers may sometimes lower prices slightly to stay competitive, but they do not directly pay the tariff to the American government.
And in fact, studies show American firms and households have paid more than 90% of tariff costs.
And what's especially telling about the tariff issue is that the tariffs were supposed to reduce the American trade deficit, but that actually hasn't happened, because in 2025, The overall US trade deficit still reached about 900 billion US dollars.
And the goods deficit alone hit the record of 1.20 trillion US dollars.
So despite the aggressive tariffs, what's expected has not happened.
They probably have shifted the trade patterns, but they have not changed the fact that the American consumers and businesses continue to rely on imports from overseas markets.
Then how would you assess President Donald Trump's track record in terms of curbing inflation in America?
Is there truth to it when he says that his second term in office inherited one of the worst inflations in US history?
Well, I think there is some truth and some exaggeration in that claim, because inflation in the US did spike dramatically in 2021 and 2022.
In fact, it was the highest in about 40 years.
But that was primarily driven by a combination of factors, such as the pandemic and, in fact, was also driven by the trade war initiated by the first Trump administration, which disrupted the supply chain in the global trade.
In fact, by the time Trump returned to office, inflation had already fallen significantly into the range of about 3 to 4, due to the Federal Reserve's interest rate hikes policy and supply chain normalization.
So, while inflation was still higher than the Federal Reserve's target of 2, it was no longer at a crisis level.
And as for Trump's role in curbing inflation, I think he was probably a little exaggerated, because the American inflation was very heavily influenced by the Federal Reserve policy rather than by the administration alone.
OK, so we know.
The US economy grew by 22 percent in 2025 last year, which was actually lower than any of the four years before that or any of the four years during the previous US presidency.
So do you see this as the main reason why, for example, according to a recent poll conducted by the lawyers and episodes, only 36 percent of Americans approve of President Donald Trump's handling of the economy?
Right.
I think there's definitely a connection between the two.
The American economic growth slowed to 2.2% in 2025.
It may not be a recession, but it is still weaker than earlier years of stronger recovery after the pandemic.
And the slower growth can affect public perception because it often translates into personal feelings like slower wage gains, weaker job creation and so on and so forth.
And one important factor I'd like to bring up is that, out of the 22 in 2025, a lot of that comes from the AI and high-tech investment, not broadly across the entire economy.
And the surge in imports of computers and telecom equipments and so forth.
It related to the AI infrastructure was one of the main drivers of economic activity.
And also polls show that 48 of Americans say the economy has worsened and only 22 feel better off financially.
I think partly because most of the Americans have not really felt the benefits of a lot of the investments in the high-tech industry.
And on a daily basis, they still feel the pain from grocery costs and high insurance costs.
When it comes to immigration, which is arguably President Trump's favorite topic, the president repeated his narrative that undocumented migrants are responsible for a wave of violent crimes in America.
But in the meantime we have also seen some opinion polls indicating that a majority of Americans believe that Trump's immigration crackdown has gone a little bit too far.
If we think about the recent occurrence in Minneapolis, for example.
So in what ways, Professor Wang, do you think this particular issue is dividing America?
It is a very polarizing issue right now in the United States and President Trump has emphasized immigration enforcement and linked undocumented migration to crime and violence.
But research really shows that law enforcement generally, that immigrants, including undocumented immigrants, are not more likely to commit violent crimes than native-born citizens.
At the same time, the immigration enforcement itself has also led to violent clashes and controversy, like you mentioned earlier.
In Minnesota, immigration agents fatally shot two American citizens during enforcement actions, which really sparked outrage and protests across the nation.
This is why immigration really divides America so deeply.
I think the public opinion also reflects that division and approval of Trump's immigration policy has fallen to 38.
But immigration is not just about policy.
It's about American identity, values and American future, all advanced, which is why I think the issue is really polarizing the American politics.
So in your observation Professor, what do you think is really at stake for President Donald Trump when we talk about this year's State of the Union speech?
Well, the State of Union speech is really about uniting America, uniting across the aisle.
But if you watch the entire speech, what President Trump was really doing was dividing the aisle, was dividing further between the Democrats and the Republicans.
And right now the polls show that only 39% of Americans approve his leadership.
So I think definitely President Trump felt this pressure from public opinion polls because the midterm elections are coming up and usually The midterm results serve as a referendum on the president's performance, and weak approval ratings can really lead to major losses in Congress, which can be a bad weather for the upcoming 2028 presidential election.
So that's really what I think is at stake, which is the political momentum.
President Trump needs to convince the Americans that his policies are working.
But as we have discussed, many of the figures and statistics he was given were not widely grounded.
So very briefly, the final question before we let you go.
During the address, we saw dozens of empty seats on the Democratic side in the Capitol Hill area.
Is this because of Democratic lawmakers' dislike of President Trump himself or because of deeper structural issues with US politics, in your opinion?
Well, that's definitely not accidental, because before the speech, many Democrats already said they wanted to protest Trump's policies, particularly on issues of immigration terrorism, economic issues, problems.
Some of the Democrats also organized alternative events called the People's State of the Union.
And even those who attended the speech as seen from the publicized video, they were very silent.
They didn't stand up for most of the occasions, except for the occasions where they saluted to national heroes.
So they did all this as a form of protest.
Again, this further illustrates the polarization in American politics today.
Okay.
Thank you very much for joining us.
Professor Wang Xingsong joining us from Beijing Normal University.
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China's foreign ministry has vowed to safeguard the legitimate interests of Chinese companies after Panamanian authorities seized control of two key ports on the Panama Canal from Hong Kong-based company CK Hankinson.
The government of the Hong Kong Special Administrative Region has also lodged serious protests with Panama, vowing to staunchly support the legitimate rights and interests of Hong Kong corporations overseas.
Panama's action came a few weeks after the country's Supreme Court announced a contract for C.K.
Hutchinson to operate the ports on the Panama Canal.
The ports have been operated by the company since 1997.
So joining us now on the line is Dr Cao Ting, director of the Center for Latin American Studies with Fudan University.
Thank you very much for joining us.
Thank you for the invitation.
So Panama's authorities actually claim that everything that has been done here is not against anyone, but in compliance with the law?
What is your take?
Do you think CKHK, this Hong Kong-based corporation, has been treated fairly?
CKHK has suffered unfair and unjust treatment in Panama on this issue.
As we know, the contract between the Chinese company and Panama was approved by the Panamanian National Assembly in 1997 and confirmed by the authority during its renewal in 2021.
So I think the ruling of the Panamanian Supreme Court carries geopolitical implications and is targeted at Chinese enterprises.
And after the ruling in January, the Hong Kong company expressed to the Panamanian government its willingness to negotiate over the port concessions.
However, under the pressure from the US, the Panamanian government suddenly seized control of the two ports management and operations yesterday, under the pretext of meeting urgent social and public interests.
This clearly violates international investment rules.
So, by the way, what has the operations by the Hong Kong-based C.K.
Hutchinson really brought to those two ports on the Panama Canal over the past few decades?
Well, I think the company has made a great contribution to the economic development of Panama.
We know that in 1997 a high-consumption group was guaranteed the concession for the two ports and over the past nearly 30 years it has invested heavily in upgrading and modernizing the ports and has driven steady growth in their cargo throughput and also has created a large number of local jobs.
Now, the two ports account for nearly 50 of Panama's total cargo throughput, and its operations have also been recognized by the Panamanian governments.
So, in this particular case, Dr Cao Ting, in your opinion or in your observation, what measures can Chinese authorities, including the government of the Hong Kong Special Administrative Region, really take in order to better safeguard legitimate Chinese corporate interests?
Well, I think, first of all, we should continue to express our protest through diplomatic channels and make our position very clear.
And we should also support the Hong Kong company in initiating investment arbitration according to relevant investment agreements and demand that Panama respect the interests of Chinese enterprises and compensate for relevant losses.
If the Panamanian government insists its attitude, we could conduct some investigations into Panamanian goods exported to China, and also we should divert cargo ships that would transit the Panamanian Canal to other shipping routes with lower risk profiles.
I see.
So, I mean, this whole drama surrounding C.K.
Hutchinson and those two ports began after the Trump administration 20 began, you know, putting pressure on Panama to reduce the so-called Chinese influence on the Panama Canal.
So what do you make of the possible U.S. influence behind Panama's decision and action here?
Yeah.
As we know, since Trump began his second term last year, he has adjusted the US global military deployment, allocated more resources to the Western Hemisphere and also has increased its military presence in the Western Hemisphere.
The United States has stepped up military cooperation with Panama and some other Latin American countries, with the intention of strengthening its control over this region and also the Panama Canal.
Meanwhile, the United States remains the largest user of the Panama Canal, leveraging its economic and military advantages.
I think the US has exerted influence on the Panamanian government's stance toward China.
And also, I guess, as a reminder, the U.S. has a track record of invading Panama in 1989.
If we think about the recent U.S. forcible seizure of Venezuelan leader Maduro.
We can also think about 1989 U.S. seizure of the Panama's leader at the time.
So, in a bigger picture sense, Dr Tauting, Do you think this particular case we're talking about here is going to have a negative impact on China's confidence in terms of investing in Latin America, in terms of seeking closer economic and trade ties with the region?
Why or why not?
We should admit that under the US pressure and such actions in Latin America, the risk of shifts in the stance of some Latin American countries toward China has intensified, including some small countries like Panama, in particular, and Mexico, such countries that have a lot of dependence on the US.
They cannot maintain their diplomatic autonomy in the face of US pressure.
And so as a result, China-Latin American cooperation will face more uncertainties in the future.
But we should also admit that some Latin American countries still have a lot of willingness to strengthen the cooperation with China, because most Latin American countries are dissatisfied with US hegemonic practices.
And their aspirations align with China's in areas such as development strategies and global governance.
So I think China and Latin America still has a lot of space and also have a lot of opportunities to strengthen our cooperation, not only in the commercial relations but also in some in the global governance, such as climate change, food security, energy security, etc.
I think China and many Latin American countries still share a lot of consensus in such areas.
Thank you very much for joining us and for your optimism.
We have been speaking with Dr Cao Ting, Director of the Center for Latin American Studies at Fudan University.
Coming up, gold prices rise again as tariff jitters give rise to safe haven demand.
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Gold and silver are surging again as global uncertainties take central stage.
A new US tariff ruling has rattled markets, raising fresh questions about trade stabilization and economic growth.
The US dollar has weakened, inflation in America remains persistent and expectations for early rate cuts from the US
Federal Reserve are zigzagging.
So is the rally of the gold sustainable?
And how should investors position themselves in the current environment?
My colleague Zhao Yang earlier spoke with Professor Qu Qiang from Mingzhu University of China.
Professor Qu Qiang, thank you very much for joining us.
So gold and silver surged to record highs, then crashed hard and then rallied again these days.
So what are the main factors behind this?
I think we have many core driven factors after that.
And I think number one is the continuous purchasing of the gold for the central banks.
In last year, I think the global central bankers actually Net buy-in about 863 tons of the gold.
Well, and also in a previous three years.
Basically, they have more than 1000 tons of them purchasing.
So I think this is much, much higher than you know, like the pre-previous years ago, like in 2010, 2015 or 2020.
So I think this kind of the buying frenzy of the gold actually driven up the attraction of the gold.
Because everybody, when they see the central bankers, are buying it.
There must be some reason behind it.
So I think the people are running after that.
The whole market is running after that.
And also secondly, I think the weakening of the credit of the US dollars actually becomes a very important factor behind that.
The US dollar index is actually performing the worst ever since 2017.
I think the dropping is more than 6%.
And also, America's fiscal deficit is also getting worse and worse.
We're looking at 38 trillion worth of the United States Treasury debt.
This is probably the historical record of all human history and all human.
You know countries ever since we have the history, you know in the first places.
And also we've been looking at the real uh interest rate are falling, even though uh federal reserve actually They're zigzagging towards the policy of the interest rate.
But also if I look at the whole global central bank's policy, you see the interest rate, the LPR, are falling, basically global-wise.
And also we'll be seeing some other treasury precious metals like the silver are also facing imbalance of the supply and demand.
So I think all this kind of the precious metals are fluctuating together.
So the cost is pressure to drive up the prices.
So I think that's the reason why we'll be looking at this going up the gold.
And I think this is a structural bull market that is happening.
And the recent tariff ruling in the United States has also added some fresh uncertainty.
So how exactly does the trade policy uncertainty translate into higher gold and silver prices?
Well, you see, we've been looking at the current ruling of the Supreme Court of America that President Trump actually violated the law.
To levy all this kind of the tariffs against the trading partners, Even though they try to.
Trump actually tried to use the IEPA To collect all this tax and tariff, But actually this is not what they should do According to America's jurisdiction system.
And if Trump cannot collect this kind of the tariff Well, they will accelerate the worsening of American deficit situation, Because Trump actually is counting on the tariff.
Help him to, you know, filling the blanks of the tariffs and also taxes so that they can slow down the trade deficit and also the Treasury deficit in American government.
But now the Supreme Court says, okay, you cannot do that.
You cannot collect so high tariffs against your trade partners.
So the money through the tariffs, the income actually been slowing down.
So Trump will face more challenges to balance all the deficit, to balance all this kind of fiscal situation, And also, I think the tariff will be fluctuating.
Well, you probably heard that Trump are quoting some other rules to charge another 10 tariff to try to take a detour, routing against the Supreme Court's ruling.
So that will make every country feel more uncertain.
Wait a minute.
You are suspending the previous tariff.
Now you're putting on the new one.
So how much is the tariff for recently?
And when is this stopping?
So nobody actually knows what's going to happen.
So the whole trade supply chain and the whole trade network. will be very, very chaotic.
So, in order to counterfeit this kind of uncertainty, a lot of the traders were hoarding certainty like gold, like silver, like some other countries, uh currencies like renminbi or like the swiss franc, in order to, you know, counterfeit the sign of the situation.
And all these kind of the frictions were adding to more of the inflations because people are not sure, so they have to charge higher to counterfeit the future uncertainty.
That will make everything more expensive and people will see inflation coming back and then they will buy gold.
So every factor will give people just one shortcut of thinking well, if I'm not sure about what's going to happen, buy gold.
And you only mentioned central banks are buying gold at nearly record levels.
So is this just a diversification or does it signal a long term shift away from dollar dominance?
Well, I think yes, it is, because nobody ever looking at this kind of a situation before.
38 trillion US dollar worth of the you know debt, come on.
This is more than the number two, number three, number four, the world economies like china, like germany, like india, plus together their gdp plus together, so you're talking about three billion a population, and what they can create of a whole year is just less than the debt owning by american government one country.
So this is basically unbelievable.
So we're not seeing any kind of the trend of American debt borrowing are slowing down.
So, which means in a foreseeable future, the debt is going to snowballing bigger and bigger and the expenses of the interest well, going to be bigger and bigger as well.
So people are feeling not safe when they look at this kind of situation.
Previously.
Lots of the governments try to buy you know America Treasury bond to you know counterfeit all kinds of uncertainty because they see American national bond is kind of the certainty with a credit.
But now they don't see it this way.
So they try to diversify their portfolio against all kinds of uncertainty and instability.
So this de-dollarization trend is not a practice of ideology, but more of a practice of reality.
For example, Poland Central Bank, Kazakhstan Central Bank, Brasilia central bank they're all coming back to buy gold.
You see, poland is actually a very hardcore alliance of america and many other european union countries also alliances of america are trying to buy gold and ship back gold.
So it becomes a very important defense mechanism against the uncertainty.
And also they try to avoid the sanctions, because America are putting a lot of trade sanctions not only on the competitors like China, but also they're putting it on its old friends like European Union.
They try to get immune from this kind of a sanction.
And what tools they can use?
Well, the most simple tool they can use is the gold and also diversification of the non-dollar currencies, like we just mentioned renminbi, Swiss franc.
So I think this diversification is not just a one-time thing, it's a long-term trend.
Professor Qu Qiang from Mingzhu University of China, talking with my colleague Zhao Yang.
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An American business leader in China says geopolitical frictions may be growing, but for global businesses China remains too important a market to ignore.
James Zimmerman, chairman of AMChamp China, made the remarks in an interview with my colleague Tian Wei.
He pointed out that closer engagement between China and the middle powers represents a positive trend and that US companies are looking to benefit from China's shift towards innovation-driven growth.
Let's take a listen.
Jim, as you have noticed, there are quite a number of state visits coming from what they term themselves as the so-called middle powers.
Canadian Prime Minister, British Prime Minister, now to mention Prime Minister from Finland, and also from Ireland, and others as well.
So how do you see ever-increasing interactions between these economies well-developed economies many of them are G7 members and the Chinese economy?
I think it's important that those so-called middle economies, that the middle powers, that they have their own paths with China.
China's a very large economy, and all of these middle powers have something to offer to China.
They shouldn't rely upon the United States to carry the day for them.
So I think it's a good thing.
Part of it, too, is keep in mind that a lot of the business is very much integrated.
In the United States and Canada, business is integrated.
The United States and the UK, business is integrated.
So if there are things that are accomplished by the UK government or the Canadian government or whoever, that oftentimes benefits the multinational business community.
So you know, if they're here to work things out to improve the business environment for UK business or Canadian business overall, that will affect in a positive way AmCham member companies.
Talking about AmCham, the results of your annual business climate survey, Some interesting point I have noticed in the readout.
One is less concern about geopolitics compared at least to the year 2025.
Secondly, is more confidence about profit for businesses.
Tell me more about that.
The business climate survey shows that there has been a rebound in profitability and specifically to consumer goods, services areas and so on.
That's a good sign.
It's a good sign that we do have increased profitability.
But more than that.
What we're seeing through the survey is that China is still in the top five, top three for many country companies.
So China is still a very strong strategic market.
We're also seeing companies are not decoupling.
They're not wholesale leaving China.
And that is a very positive reflection that the market is still important for their companies.
Geopolitical tensions are still a concern.
It's in the top three.
But also the Chinese economy is one that we are monitoring and taking a look at.
And there could be improvements, policy improvements that could improve the economy in certain ways.
But that's something that is very much on the minds of business.
There was a time when media stories, particularly in the US, talking about oh, US businesses are leaving China.
So that is not necessarily what is going on right now, at least according to your climate survey.
I've been here for almost 30 years and there has always been talk about companies leaving, people leaving.
And a lot of that has to do as China's economy matures and there's changes in the way things are manufactured here.
And there's changes in the way things operate here.
There are going to be some companies that make the strategic decision to move elsewhere.
And it may be a cost issue.
That has always been a topic of discussion for at least the past 30 years.
And those are more strategic decisions on behalf of business.
But I don't see, we don't see the wholesale departures that people have anticipated.
I mean we saw some departures or restructurings during COVID, but that was more of, I mean, a strategic decision to better improve the supply chain issues.
Meanwhile, we see many European businesses are actually moving into China due to various reasons.
So the Chinese market was going to be even more competitive, not just the you know the Chinese companies vis-a-vis the international company, but also among, as we all know, the international companies themselves.
So whoever has a stronger footing will have a better say in the market share, it seems.
In order to be relevant, you need to be here.
I mean, this is the second largest economy in the world and potentially will be the first largest in the world at some point.
But to be relevant, to be a relevant player in the market, not just a relevant player in China, but in the global market.
You need to be here.
And that's important.
We have seen in China's 15th five-year plan the new productive forces being mentioned, new quality growth.
How is the US business community looking at these new trends going on in China and taking advantage of it for your businesses, not here, but also all over the world?
From a historical perspective, I think the last four or five year plans have focused on innovation, have focused on having China move up the value chain on innovation.
That is natural and that is important.
It's important for the Chinese people.
We're moving away from labor-intensive industry sectors to being more innovative and driving an innovation-based economy.
That's all good.
The American business community, the AmCham business community, realizes it needs to tap into that.
And it's very important that we be here as China focuses its policies on creating an innovation-focused environment, promoting RD, promoting high-level growth.
But we still see export controls, for example, policies like that by the United States, particularly in the innovation area related to AI, to chips.
Now American business community have been arguing if you do that, the Chinese are going to develop their own and eventually we're going to end up with no market.
And that has been a very strong voice.
But whether that business voice has worked so far, your thoughts?
Export controls really need to be, they must have a rational legal basis.
Are the controls truly about national security, or are you overreacting, overreaching?
And that's always been an issue.
I mean export controls have been around for hundreds of years and if you overreact, what happens is you drive the other side that's subject to controls, to self-sufficiency.
One or two.
Your allies, your competitors are going to step in and fill the market as well.
So export controls only work if it's truly based upon a legal basis, a national security basis, or control because of shortages or whatever the reason is.
But if you overreact, if you overreach, it doesn't help the U.S. economy.
And it basically drives those that are targeted again into self-sufficiency or looking for other suppliers.
That was my colleague Tian Wei speaking with James Zimmerman, chairman of Amcham China.
That's all the time for this edition of World Today.
A quick recap of today's headlines.
German Chancellor is on a visit to China for talks on trade and other issues.
President Donald Trump touts economic success in State of the Union address seeking reset ahead of midterm elections.
Hong Kong protests after Panama takes control of two key ports on the Panama Canal.
To listen to this episode again or to catch up on our previous episodes.
You can download our podcast by searching for World Today.
I'm Dinghan in Beijing.
Thank you so much for listening.
Bye for now.
