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Probably know where Donald Trump's been this week.
China.
China.
China.
But amid the marching band, the handshakes and the photo ops, what actually came out of this trip?
And what's the US-China relationship really like?
I'm Hannah Gelbart.
Come join us on What In The World, an award-winning daily podcast from the BBC World Service.
You can listen wherever you get your BBC podcasts.
Two days of talks, not many obvious breakthroughs.
But has the mood improved?
The two countries should be partners rather than rivals, helping each other succeed and prosper together.
We're going to have a fantastic future together.
It's World Business Report from the BBC World Service.
I'm Will Bain, and after the talks, the quiet, it seems, of continued uncertainty for the global economy.
Also on the programme today, after a wild week in British politics.
We'll look at what that's done to business confidence and we'll look at how the transatlantic car-making alliance at Stellantis looks set to build more cars in China.
Well, the U.S.
President Donald Trump is on his way back to Washington after his summit in Beijing, and it's clear both sides want their trading relationship to improve.
We want to open it up.
It's massive.
And we want to get all of those companies and many more there and make a lot of money and a lot of jobs for America.
So it's very simple.
So that was President Trump.
This was President Xi's take of the talks.
The two countries should be partners rather than rivals, helping each other succeed and prosper together.
We're going to have a fantastic future together.
Such respect for China, the job you've done.
You're a great leader.
I say it to everybody.
You're a great leader.
And yet the meeting felt well a little light on both detail and for an American president who so prides himself upon deals short of some of those, perhaps as well.
Our North America business correspondent, Samira Hussain, gave her assessment from New York.
Well look, President Trump went in saying that he wants to see China open up to more American business.
And he went with a plane load of big American CEOs to try and do that.
But if you look at sort of specifics.
They were a little short on that.
And the expectation is that perhaps we're going to see some more details coming out a little later on.
But there wasn't sort of this big win that President Trump, I think, was hoping for.
And what about the view in China?
Our China media analyst Kerry Allen talked us through the media's response to the trip.
One of the messages that's been coming out of state media quite consistently over the last two days is that China wants stability with its relations with the US.
It's seen relations as being up and down over the last few years, especially since Trump returned to the White House.
And more than anything, China wants a better working environment for Chinese firms to operate in the US, to remove, for example, US Section 301 investigations into Chinese firms, remove sanctions on Chinese companies and people, just for the US to cooperate with China rather than seeing it as a competitor.
Well, it's been the story of the week, hasn't it, from a global business perspective.
So we thought tonight we'd reflect on it, with Chris Lowe, Chief Economist of FHN Financial, joining us as always from New York on a Friday.
Chris, great to have you back on the programme.
Good to be here.
And here in the studio with me tonight, Henry Wong.
If you're a regular listener to our Business Matters program, you may well remember that Henry normally joining us from Beijing.
But you've broken away from a party in London tonight, Henry, to come and join us.
And you're looking very dapper, I should say, as well in the studio.
Thanks for coming in.
Thank you.
How was the party, first of all?
That's good.
Yeah, it's very impressive.
Good do.
And you're here for business as well as part of your work as the president and the center for China and globalization.
Yes, I'm here for quite a few also recordings, some programs.
Yeah.
Well, tell us your takeaway then.
We've been talking about it most nights this week as the trip's gone on and you and I were just chatting before we came on air then.
You're actually a little bit more positive perhaps than some of the clips that we heard there about what's been achieved this week.
Why?
Yeah, I'm quite positive actually on this time because, first of all, it's the nine years since the last Trump's visit, state visit.
And also they have actually.
You remember the first term of Trump?
They defined the China-US relation as a strategic rivalry in its national strategic report.
But this time both President Xi and President Trump have defined they are getting a new position.
Now is that US and China relation getting into a strategic stability, a constructive strategic stability?
So that's really positive, I think, as to good start.
What does that tell you?
Does that tell you that America's perspective has changed or that China perhaps felt that it was perhaps being too deferential last time around?
I think you know, after almost 10 years of US, particularly first term of Trump, they tried everything on China.
We had a strategic rivalry, adverse relations.
You have also trade, war tariff, war sanctions and high fence, small yard from Biden administration.
Now they realize, okay, we cannot really decouple.
We have to work together.
That's why I'm very impressed with President Trump bought 17 biggest companies of the U.S. to come.
And that they are all very bullish, actually.
They are saying a lot of things positive, from Elon Musk to Tim Cook to Jason Huang.
All those people are really very positive, highly bullish.
So I think it's a good start because, given that President Trump announced to a great horde of people that President Xi is going to visit the United States on September 24th And for Mr Wang, he actually confirmed today there will be a visit
I think, you know, we're just in a full round of talks, summits.
We finished the first round and then there's going to be a September round.
We have a November round in China, in Shenzhen and December round in Miami. for G20.
So I think we have to save a lot of good stuff, gradually improve.
But I think already we had quite a good improvement and I'm sure we're going to hear more news coming out.
Chris, what was your overall takeaway from the week?
Yeah, look, I think Henry nails it when he talks about the business executives who are on this trip.
That's what this trip was about.
This was framed in the U.S. press as a summit on geopolitical issues, but it really wasn't.
It was a trade trip.
And it wasn't just top US CEOs.
It was top Chinese CEOs who were in these meetings as well.
And I think both sides are beginning to realize there's a lot to gain from mutual trade.
I was interested that Henry kind of mentioned about this inability to actually decouple from each other from an american perspective.
Chris, does it feel like that?
Does it feel like that realization is coming around?
Because there's certainly been attempts, and that is far from being just the trump administration.
Has it henry mentioned about the biden administration too?
This is the us policy for a long time to properly decouple.
Is that shifting now, then?
In a business sense, I think it's shifting, primarily as an economist traveling around the country and talking to people who are in US manufacturing agriculture, construction.
All of them talk about the necessity of trade with China.
Farmers, it's because they sell goods there.
Manufacturers, construction workers.
It's because they need Chinese products in order to manufacture their products, in order to build their buildings.
That interdependence runs deep.
And, I think, complete decoupling.
Not only is it impractical from an economic standpoint, it's effectively impossible.
Where's that element of need for Chinese companies these days, Henry?
No, I think there's a lot of a need for that, because I see quite a lot of Chinese CEOs was that a great hold of people have this welcome banquet there?
Talking to the counterpart.
For example, the founder of Xiaomi was taking a selfie with Elon Musk together there.
No, I think Chinese companies have a huge interest to invest in the United States because they are not really –.
Because the political environment was so negative and they are not to report.
Huawei was bashed.
TikTok was just getting a right position there.
But there's a lot of interest of Chinese company wants to invest overseas.
They're just not relying on a trade, but they can do more to create jobs and have more local tax revenues and things like that.
So I think, by having these political barriers, you know clarified, they should be expecting more investment from both sides.
Have you touched on the area where perhaps there is still going to be ongoing tension?
My good colleague Michelle Fleury, our North America business correspondent, has been writing about this in her newsletter this week.
She's called the race in AI between the two countries as the new Cold War.
Yeah, yeah, absolutely.
I was in Beijing before I come here in London.
I took an interview from Fox.
They have a big crew this time to interview Trump there.
You know, basically, they were asking the same question.
I think the AI, which is...
One of the most uncertain things happening to the mankind.
We don't know where that leads to, but absolutely China and the US has to work together to really nail down that, you know threat.
And Tom Friedman wrote an op-ed also saying that's the common threat. for both China and the U.S.
So we have to work together.
So many uncertainties.
We cannot just fight by ourselves or fight among ourselves.
So we need to really work together.
So many things.
And also on top of that, there's war in In Iran, in Ukraine, where I think China, US has to work together.
Yeah, we haven't touched on some of the geopolitics being covered well covered on the news programs on the World Service.
Chris, on AI specifically, are American companies ready to do that, to collaborate?
I mean, they're not seemingly that willing to collaborate with each other right now, full stop.
Are they on issues around safety?
We've seen that schism between...
OpenAI and Anthropic, for example, Yeah, and no, I think the answer here has got to be at the government level in terms of supervision, regulation, et cetera.
It's a brand new industry.
Global finance works because globally –
We have consistent regulations between countries and consistent supervision.
And it's got to be something similar to that where you know, as it were, the adults in the room make the rules, enforce the rules and work together.
What are the next steps, then, you think, to building on that, Chris first and then Henry?
Well, you know, we already have here in the US regulators who oversee tech and are getting involved with AI.
In Europe, of course, you have the same, but we have very different rules.
They've got to come together.
China too, has regulators who are involved in the Internet and, you know, will evolve to working with the AI companies, but they also need to come together.
This has to be an international effort because we have to have consistent standard policies.
Yes, absolutely.
I think, you know, this is being the biggest threat we are facing now.
And China and the US are two largest AI countries. in the world.
And we need to find a way to make that not only benefiting both countries, but for the whole world as well.
You know, China has this open AI system.
China is trying to, you know, doing more.
But I think you know, we need a global AI governance and also global AI dialogue and also global AI company summits, because we don't have those mechanisms, whereas we are prevented by geopolitical biological, ideological divine.
So I think we have to see how we can make AI, you know, benefit the mankind, and particularly China and the US, being the two largest AI countries, should take a good example of that and work together.
Clearly top of the agenda, isn't it?
I think in that September meeting when President Xi goes to the United States.
You're listening to World Business Report on the BBC World Service probably know where Donald Trump's been this week.
China.
China.
China.
But amid the marching band, the handshakes and the photo ops, what actually came out of this trip?
And what's the US-China relationship really like?
I'm Hannah Gelbart.
Come join us on What In The World, an award-winning daily podcast from the BBC World Service.
You can listen wherever you get your BBC podcasts.
Henry and Chris staying with us on WBR right throughout the programme today.
Chris used the phrase consistency.
I can tell you where there hasn't been much of that Chris this week.
UK politics and the UK economy as a result.
The Prime Minister...
Here, as I'm sure many of you listening are already aware, Keir Starmer, his day is looking increasingly numbered after first a poor set of regional election results triggering a race by people within his own political party to oust him.
As we speak on Friday, it all seems slightly calmer, but that's after both the now former health minister, Wes Streeting, who quit earlier this week from the government, as well as the mayor of Greater Manchester, one of the UK's biggest regions, Andy Burnham, among others seemingly are readying their challenges to lead the UK.
What policy might look like for UK businesses and investors then looks pretty uncertain.
Something we chatted to Yale Self in about.
Yale, the chief economist for the accounting giant KPMG.
It was amazing, wasn't it?
Well, I mean, it was expected to some degree and it could have been much worse.
How do you think it could have gone worse?
In the sense that we could have had markets reacting much more sharply than what they did.
And I think that's partially because a lot of it was expected.
We were expecting the results more or less. of the local elections.
I don't think there was a major surprise.
And we were also expecting some disquiet within the Labour Party.
The difference maybe is that everyone got distracted by the war in Iran.
So to your mind then, what was the kind of surprise?
Why was it?
And when you say markets, what we're really talking about here isn't?
It is bonds, government bonds, the cost of borrowing for the UK government and basically investors thinking that the UK government looks a riskier bet than it did previously.
Why do you think that is?
I think there's a few things we need to unpick.
One is that it is just a little bit unfortunate that all of it was in the mix with other things that were happening around the world.
So I think if you look at yields for other countries, they all also went up a little bit.
It wasn't just a UK thing, but there's probably also a UK premium, if you like, and that is because
We are going to have more political uncertainty in the short term.
It is quite likely that we're not going to have a lot of new policies, a lot of things done and clarity for businesses for a while, until we have clarity on what the leadership is in terms of the prime minister and the chancellor in particular.
And therefore a lot of businesses may think well, we're going to hold on our business decisions until we get more clarity on who's leading.
And you guys are in such a great position at KPNG because you're looking at what's going on in the market, but you're also talking to literally thousands of businesses around the UK.
So what is their take on that?
I think businesses are generally disappointed because they are going through harder times.
You know they're squeezed where they have higher energy costs, they have higher taxes that they have to pay as well.
You know, the minimum they expect from a government, especially from a government with a very large majority, is to have a good plan and remove some of that uncertainty and have some much more clarity and direction.
And therefore there is that sense that they're being failed by the leadership that is not providing them with that.
Yeah, given everything you've talked about with Iran and everything else and the pressures that's putting on the global economy, how worrying then, perhaps from your personal perspective, Yale and those businesses that you speak to's perspective that this evidently isn't going to be over quickly.
So from an economist perspective, I look at it from the timeline of we have a budget, hopefully in the autumn.
By then you want to have the leadership well installed with all the plans ready.
And it is looking very tight, yeah.
I mean, the summer is the summer, but you know, by September you really want people coming back from holidays, even if they're still holidaying in the UK this year, ready to go.
And so are there any silver linings that you can see then?
What I find, at least from an economist perspective, is actually there's quite a few positive things.
For example, we're not expecting inflation to go up as much as when we compare things to 2022.
And if the war in Iran resolves itself this summer or by the end of the summer, you know, this shock may not be so large.
And it's really important that businesses focus on the longer term structural changes, on the geopolitical changes that are happening much longer term, for example, China and the relationship with China technology.
All this is in some ways more important than the short term shocks that we have at the moment and the political instabilities that we have in the UK, because ultimately, I think whichever chancellor will have will have to follow a relatively orthodox fiscal rules, etc.
So I don't think there will be a big change there.
That's Yael Selfin, the chief economist in the UK for KPMG there.
Chris, how have you watched on on this from the other side of the Atlantic?
Yeah, look, spot on.
Watching yields around the world, especially last night.
You know, Chinese – sorry, Japanese long-term yields at all-time highs.
U.S. yields are pushing up.
So it's not just the U.K.
But what changed in the last week – is a growing sense among investors that inflation is not in fact going to be a short-term phenomenon, that oil prices will be high for a long time.
And that's causing everyone to sort of change their view on how things are going.
As for the UK, You know, I think from the outside looking in, there's real respect for the way the UK handles its political system.
And, you know, it seems like whoever is in charge fiscally, the UK is more responsible certainly, than the US.
And more responsible than most.
Yes, I think that the war really needs certainty and we don't like uncertainty.
That's why I think President Trump goes to China looking for certainty as well.
But for the UK I'm quite surprised to see That in six, seven years we had five or six prime ministers switch around in such a short time.
And that's not really good for the stability.
And I think this time even China and the US stress stability not only for the US and China, but for the world.
I would think that we need stability.
Probably is the most precious thing we're having for this world and also for UK.
You talk to businesses all the time, Henry.
Does that actually have a kind of tangible effect about decisions they make?
Stability.
Absolutely.
We need that.
I mean because if you have a political uncertainty then they're going to affect your business, affect your decisions.
People make their business decisions within a year and two years and five years plan.
But then if we don't know who will be the next governor, how can you make two or five years plan for?
Well, certainly that stability has been a big backdrop, hasn't it, to the success of the Chinese car industry, the likes of MG Xpeng BYD, the biggest names in motors, Chinese firms looking to rapidly expand.
Your new MGS6 EV.
Find your more.
The new BYD Seal U DMI delivers up to 699 miles of range.
And on Friday it was confirmed that the European and American car giant Stellantis will be making more models in China that will be exported as Peugeots and Jeeps, underscores how Western automakers are increasingly relying on Chinese manufacturing technology and supply chains to compete globally in electric vehicles.
Joining Chris and Henry for the last few minutes of the programme, Mark Andrews is with us.
Mark the author of Driving the Dragon The Rise of the Chinese Car Industry, and has been test driving cars made in China for almost two decades.
Mark, great to have you on World Business Report.
Thanks for being with us.
Thank you.
This move then, first of all by Stellantis.
Is it perhaps the first of many, do you think?
Well, it isn't really the first move.
In fact, Stellantis have been producing cars in China for export since 2021.
So that's really gone under the radar.
But I think what is significant about this announcement, It's what China calls new energy vehicles, which is an umbrella term for all electric and PHEV.
So all the new models.
So there's meant to be two Peugeot models and two Jeep models forthcoming from this agreement.
And they will all be what are known as new energy vehicles.
And so I think that's possibly the most significant thing from this deal.
Presumably that's where the politics starts coming into it, Mark, right?
That countries are often very happy for factories to be built in their countries to build these things.
As our producer Neil, was making a point about Japanese car makers, perhaps two decades ago, less so those models going somewhere else and being made and then exported back to them again.
Yes.
It's almost like a pendulum going in that on the one hand you've got the Chinese producers who are actually looking to site factories in Europe.
And then, on the other hand, you've got Stellantis going the other way saying OK, we're going to actually produce electric cars in China to export to the world.
It goes both ways, perhaps.
And perhaps that's actually showing that there is more integration of China now into the international car market, whereas previously China was almost isolated in that cars were produced in China for China.
And yes, Chinese manufacturers did do some exporting, but that wasn't done by the international companies, so much.
Henry here in the studio with me.
Give us a view from Beijing then about that.
I guess that from a Chinese government perspective, that push into autos that Mark's talking about.
Yeah, I think that Beijing just finished the largest auto show in history about two weeks ago.
And that was quite impressive.
One million people toured that.
There was 2,000 companies demonstrated there.
I think China has already become the state of the art and also the incubation center for the global latest technology and state of the art technology on the green EV cars.
So, if all the automakers, if they want to embrace the change, if they want to really tackle the global market, you have to conquer the Chinese market first.
You have to be there.
You have to really innovate in China.
Take advantage of the supply chain and the technology and talent there.
And also cut down the new design model.
It used to be four or five years, and now it's one or two years or even shorter.
So if they don't want to get out of the car business...
China is the must they have to do.
So I think it's a wise decision to set up shops there.
So it's no longer in China for China.
It's in China for the world now.
And also probably in the future, in world for world, and a lot of Chinese companies can Invest in Europe, US and other global sales countries.
So I think this kind of intertwine is really a good thing for the auto industry for the world.
And yet Chris, we started the program talking about where there might be some overlap around AI regulation between the two governments bipartisanship not something you're very familiar with in the United States these days and yet there's a bill heading through the Senate right now, right between Alyssa Sotkin and Senator Moreno, a Republican in Ohio, trying to block not just the sale of these vehicles but also them buying.
Companies like BYD buying land to be able to even manufacture in the US too.
Well, that's right.
And look, I think it harkens back when I first traveled to China in the 1990s.
I was constantly asked, how do we teach innovation the way they do in the U.S.?
?
If you look at these cars that BYD is making now, the question could equally be flipped around.
How do we in the U.S. teach innovation the way Chinese engineers are clearly executing in China now?
These cars are fantastic.
And I think that that's right now the protectionist spirit in the US is because we cannot compete with those.
Mark, is there any chance for any of them, Europeans, North Americans, others to catch up?
Or is it is it China's race now?
Difficult to say.
I mean there's a lot of entrenched ideas in a lot of the Western auto industry because they haven't fully embraced the switch from ICEs to EVs.
And so without that, it's going to be difficult.
And yes, I mean, obviously, we have to look to China to try and compete and also compete.
Probably not the best of words, but copy really from China in one way or another.
Learn from this time.
Mark, really appreciate your time.
Thanks so much.
Mark Andrews, the author of Driving the Dragon there.
Big thanks to Chris.
Chris, thanks a lot.
Have a great weekend.
Thank you.
Chris Lowe of FHM Financial in New York.
And Henry, we need to get you in a car, Chinese or otherwise.
Back to that party again.
That bow tie is wasted here in the studio.
Thanks so much for coming in.
Thank you.
Henry Wang, who's been with us as well from the Center for China and Globalization.
Thanks so much for listening to World Business Report.
Probably know where Donald Trump's been this week.
China.
China.
China.
But amid the marching band, the handshakes and the photo ops, what actually came out of this trip?
And what's the US-China relationship really like?
I'm Hannah Gelbart.
Come join us on What In The World, an award winning daily podcast from the BBC World Service.
You can listen wherever you get your BBC podcasts.
Thank you.
