may: resilience after ‘Liberation Day’
month in focus
strategic absence
A PLA Defence University dean represented the PRC at the high-profile Shangri-La Dialogue, 30 May–1 June. It would no doubt be ‘inconvenient’ for Defence Minister Admiral Dong Jun 董军, who observed precedent by attending in 2024, to run into US Defence Secretary Hegseth. But as regular regional bilateral security consultations and the Beijing Xiangshan Forum, the PRC's own security and defence dialogue, gain traction, Beijing may be less inclined to attend events where it does not hold the upper hand.
Beijing reaffirmed its Global South credentials, hosting a fourth ministerial-level China–CELAC Forum on 13 May and launching a $9 billion yuan-denominated credit line, along with new infrastructure investment. A new Global South minilateral grouping emerged in May, with the inaugural ASEAN–Gulf Cooperation Council–China Summit that kicked off in Kuala Lumpur on 27 May, attended by Premier Li Qiang 李强.
more tweaks to macro levers
Given ever-present domestic and external pressures, Beijing recalibrated its macro strategy in May. Support for the real economy was the message of a ‘four stabilities’ policy package, singling out jobs, firms, markets and expectations. Monetary easing was also in the mix, with PBoC trimming interest rates and supporting tech firms.
Caution about large-scale fiscal stimulus was evident in Beijing’s 'wait-and-see' initial approach. Yet consumption boosts were not neglected, potentially shifting towards services and doubling down on rolling out existing support.
Scitech got yet another strong push. Streamlining funding support across tech innovation lifecycles was outlined in a multi-agency policy, which covers venture capital, bond markets and more.
Moves emerged to enhance Hong Kong as an innovation hub, via a new patient capital investment framework. The SAR is experiencing an IPO boom, signalling a global repricing of PRC assets.
resilient trade
Staying power was on display in April trade data: exports grew 8.1 percent while imports fell by a mere 0.2 percent over 2023. But trade war pressure is showing up in the stats: exports slowed some four percent over March; shipments to the US dropped 21 percent y-o-y, evidence of headline levies biting into actual orders. Exports to Global South partners, like ASEAN, Latin America and Africa surged, indicating growing rerouting of goods and industry relocation.
Showing trade stress, Beijing and Washington struck a 90-day tariff truce in Geneva on 12 May. US duties were slashed from 145 to 30 percent; the PRC’s shrank from 125 to 10 percent. Twenty-four percent remains on hold for both. US small-parcel tariffs dropped from 120 to 54 percent. The deal was a big win, claimed Lu Xiankun 卢先堃 former WTO rep, explaining tensions away as poor liaison.
Beijing pledged to freeze certain non-tariff reprisals imposed from 2 April (Trump’s ‘Liberation Day’). Some early April rare earth export controls, reportedly lifted, remain in doubt. A special campaign was meanwhile launched to crack down on the smuggling of strategic minerals. Tighter controls are urged throughout the supply chain, from mining to processing to exports. This threatens to bring another retaliatory tool into play: starving the market of critical inputs likely to spike price swings and global volatility.
Given US protectionism, the PRC should lean into global trade, boost ties with partners, and further open special zones, argues Zhang Ming 张明 of the CASS Institute of Finance.
May trade moves bear this out
PRC-ASEAN FTA 3.0 talks declared final
adding nine chapters, with novel initial digital and green trade pacts, and closer alignment in standard-setting and conformity assessment
20 deals signed with visiting Brazilian President Lula
in ag, trade, investment, currency swaps, mining, energy, etc.
visa-free entry for Brazil, Argentina, Chile, Peru, and Uruguay, and Saudi Arabia, Oman, Kuwait and Bahrain
MofCOM will replicate nationwide 11 model cases selected from 20 service pilots
this will reform industry, digital trade, regulation and dispute resolution
MofCOM work plan will deepen reform in ETDZs (economic and tech development zones)
better land allocation and support for advanced industries
zones urged to work with state-owned trade credit giant Sinosure to bolster cross-border e-commerce and digital service exports
RE100 recognises GECs
Boosting Beijing’s green cred, RE100 (a global initiative on renewable energy sourcing for industry) unconditionally recognised PRC Green Electricity Certificates (GECs), giving them parity with EU ‘Guarantees of Origin’ and US ‘Renewable Energy Certificates’. Firms are spared calls for additional documentation when making renewable energy claims.
mass spectrometry lights up 'Argentine' beans
Sweeping 'Opinions' on ag sci-tech innovation were issued, aiming to build a ‘demand-driven, enterprise-led’ R&D system by 2035. New mandates clarify state and local roles, protect IP, and expand commercial platforms. Fragmentation, limited local uptake, and smallholder mismatch continue to stall field-level impact, however.
A Rural Collective Economic Organisations Law, effective 1 May, granted long-missing legal identity to the village-level collective economy. It codifies rights and oversight—yet fails to break links between RCEO chairpersons and grassroots cadres. Real reform hinges less on legal form than on local trust, transparency, and participation.
Soymeal prices held relatively steady in April despite falling soybean purchases from the US, and Beijing's tighter vessel checks to curb origin fraud. A shipment declared ‘Argentine’ was seen off when inspectors combined protein analysis, packaging inspection, GPS tracking, and AI-powered traceability to flag it as US-grown. This reflects a structural shift in supply and demand management, argues Yicai.
brains meet computers
MoST (Ministry of Science and Technology) and other agencies outlined measures to boost sci-tech finance. The goal is to address failure to support high-risk, asset-light startups. An 'innovation points pilot,’ an evaluation using such metrics as R&D staffing, tech revenue and awards as additional credit assessments for bank loans, will be expanded nationwide. MoST's role has expanded, shifting from managing university research to coordinating startup financing with financial regulators to align policies with macro scitech goals.
A first clinical trial of a brain-computer interface, allowing control of computer games by thought alone, was carried out by Shanghai-based StairMed, not unlike Musk’s Neuralink. Challenges in precision, safety and ethics remain in view.
environmental code
A draft of the hefty Ecological and Environmental Code has undergone first review by the NPC Standing Committee and is now open for public comment. Merging ten existing laws, the code advances ‘green’ and 'low-carbon' principles. Legal recourse against firms and individuals who pollute or damage the environment is among the hotly debated items. Relax Xi-era restrictions on civil society engagement in environmental protection, some experts suggest.
New rules on central inspections, a major component of anti-pollution enforcement, were issued on 12 May. Notable changes include creating a central Leading Group for such inspections, along with a two-tier inspection system.
A shift from customary ‘provisions’ to ‘regulations’ shows heightened emphasis on inspections, argues Chen Haisong 陈海嵩 Wuhan University Environmental Law Research Institute. Both the 'provisions' and 'regulations' are internal Party regulations; the new regulations have greater legal and political authority, aligning with the decisions of the Central Committee and State Council.
official belt-tightening
Some months into an Eight-Point Regulation education campaign, the Central Organisation Department is nagging Party units on all levels to get on with it. Facing the tariff war and domestic struggles, action is demanded to root out corruption, blending tightening discipline with practical work.
Regulations promoting frugality and opposing waste were, meanwhile, revised, placing localities and agencies on notice, again, to redirect resources from ‘formalities’ and ‘image projects’, while promoting innovation and growth.
New laws are listed in NPCSC’s (the National People's Congress Standing Committee) 2025 work plan, in additional to its three 5-year legislative plans
Ecological and Environmental Code
Financial Law
modified Food Safety Law
A Law on Antarctic Activities and Environmental Protection was restored to the agenda for preparation.
AI science mentor
The newly amended Law on Prevention and Treatment of Infectious Diseases will protect individual rights and reward doctors who provide early warnings.
Guidelines for AI education and usage in K 1–12 schools were issued, integrating AI literacy into student evaluations; student tech dependence is claimed to be minimised. A ‘national university counsellor AI training class’ was announced by the Ministry of Education, which aims to enhance university counsellors’ grasp of the nature of AI.
International collaboration in digital education was highlighted by Ding Xuexiang 丁薛祥 and Huai Jinpeng 怀进鹏 at the 2025 World Digital Education Conference; an AI ‘science education mentor’ was released to assist in the learning and teaching of science subjects.