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At the Great Hall of the People on Thursday, Xi Jinping told the American CEOs traveling with Donald Trump that China's door 'will only open wider.' Hours earlier, Reuters reported that Washington had finally cleared Nvidia's second-most powerful AI chip, the H200, for sale to roughly ten Chinese firms.

The number of chips delivered since the green light: zero.

The cleared list

The U.S. Commerce Department has approved Alibaba, Tencent, ByteDance and JD.com to buy up to 75,000 H200 chips each. Distributors Lenovo and Foxconn are licensed to resell. Trump structured the arrangement so that Washington takes 25 percent of the revenue from every sale.

On paper, this is the breakthrough Jensen Huang flew to Beijing for. Before the export curbs tightened, Nvidia had 95 percent of China's advanced chip market and the country accounted for 13 percent of its revenue. Huang puts China's AI market at $50 billion this year.

Beijing's veto

Commerce Secretary Howard Lutnick put it plainly: 'The Chinese central government has not let them, as of yet, buy the chips, because they're trying to keep their investment focused on their own domestic industry.' Beijing worries that imports would gut the homegrown push that has lifted Huawei, Cambricon and others.

So the licenses sit, the inventory sits, and Huang flies home without a sale on the books. Asked about the Reuters report on CNBC, Treasury Secretary Scott Bessent answered: 'This is news to me.'

What was actually signed

The deliverable from Beijing is a three-year guidance document. Xi's official readout calls it a 'constructive China-U.S. relationship of strategic stability,' led by cooperation and 'measured competition.' Tianchen Xu at the Economist Intelligence Unit reads it as 'managed stability.' Goldman Sachs expects no grand bargain, just a tactical catalyst for the yuan and for Chinese equities that have trailed Japan, Korea and Taiwan all year.

Markets did not wait for the small print. The Hang Seng Tech Index added 0.5 percent on Thursday, the Hang Seng 0.3 percent. The mainland CSI 300 is up nearly 7 percent year to date.

Trump leaves Beijing on Friday after a working lunch. Next on the calendar: APEC in Shenzhen in November, the G20 in Florida in December. The H200 question is unlikely to be settled by then.

Sources: CNBC, Reuters, SCMP, Yonhap News

SoftBank booked a record annual net profit of 5 trillion yen ($31.6 billion) for the year ended March, four times the prior year's number. The driver: a $46 billion yearly gain at the Vision Fund, almost entirely from its OpenAI stake.

Net profit in the January-March quarter: 1.83 trillion yen ($11.6 billion), the sixth straight profitable quarter.

The Details

It is Masayoshi Son's biggest annual print in years. The Vision Fund alone gained 3.1 trillion yen on OpenAI in the final quarter.

Cumulative OpenAI gain to date: $45 billion on a $30 billion investment.

In March, OpenAI closed a funding round co-led by SoftBank that valued the AI lab at $852 billion. SoftBank has committed to push its total OpenAI exposure to $64.6 billion for a 13 percent stake, with another $30 billion scheduled across 2026.

To finance the bet, Son has been selling down everything else. T-Mobile shares sold over the year: $16.25 billion. Nvidia stake: trimmed. The group also booked 218.1 billion yen on smaller exits.

Outside OpenAI, the rest of the portfolio is bleeding. Excluding the Vision Fund, SoftBank posted an investment income loss of 472.1 billion yen on holdings including Coupang, DiDi Global and Klarna. There was a 278.6 billion yen gain on Intel, run by former SoftBank board member Lip-Bu Tan.

The bridge loan: $40 billion arranged in March, $20 billion drawn in April for the OpenAI capital call, $2.5 billion already repaid.

The bet inside the bet

S&P revised SoftBank's outlook from 'stable' to 'negative' in March, citing concentration risk. The rating agency told the group it could 'limit negative financial impacts' by selling more assets. Son's answer has been to sell more and buy more OpenAI.

The risk: peers like Google's Gemini and Anthropic's Claude keep grabbing share, while OpenAI's training and inference bill keeps rising. A flat OpenAI valuation for a single quarter would wipe out the entire 3.1 trillion yen Q4 gain.

The hedge: SoftBank is quietly building a robotics arm. The $5.4 billion ABB Robotics deal closed last year, and the group has created a dedicated subsidiary to hold robotics stakes. The Vision Fund is the AI software play. Robotics is the AI hardware play.

Sources: CNBC, Nikkei, DealStreet Asia, Business Times Singapore

South Korea's Kospi opened at a fresh record on Thursday for the second day running, just shy of the 8,000-point mark. After a 0.38 percent opening pop, the index was up 71.25 points or 0.91 percent at 7,915.26 by 9:15 a.m. local time. The Korean won was at 1,489.9 per dollar, up 0.7 won on the session.

Wall Street set the tone overnight. The Nasdaq closed 1.2 percent higher, the S&P 500 added 0.58 percent, and the Dow gave up 0.14 percent. Yonhap noted that the rally was driven less by a faster-than-expected April jump in US producer prices and more by the optics of the Beijing summit, where Nvidia's Jensen Huang, Tesla's Elon Musk and Apple's Tim Cook joined Trump's delegation.

The tech engine

The day's leaders look familiar. Samsung Electronics climbed 1.76 percent at the open and SK hynix added 0.2 percent. Hyundai Motor rose 1.27 percent, with auto-parts maker Hyundai Mobis up 4.78 percent. LG Energy Solution gained 1.63 percent and Samsung SDI 0.32 percent. Hanwha Aerospace, the defense heavyweight, was up 0.86 percent.

The momentum has been building. On Wednesday the Kospi rebounded 2.63 percent to close at 7,844.01, a fresh peak, on the back of semiconductor and auto buying ahead of the Xi-Trump summit. Trade volume was heavy at 49.7 trillion won (about $33.4 billion), with locals and institutions buying while foreigners sold a net 3.7 trillion won.

Defense talks in Washington

The market story is running alongside a security story. South Korea and the US wrapped two days of Korea-US Integrated Defense Dialogue (KIDD) talks in Washington on Wednesday US time. The joint statement said both sides 'looked forward to further deepening cooperation to achieve shared security goals on the Korean Peninsula and across the Indo-Pacific region.' Kim Hong-cheol, deputy defense minister for policy, led for Seoul, John Noh for Washington.

Two open items shape the next steps. Seoul is pushing to take back wartime operational control within President Lee Jae Myung's term that ends in 2030, with 2028 a working target. US Forces Korea commander Gen. Xavier Brunson told Congress last month the conditions should be met no later than the first quarter of 2029. Acquisition of nuclear-powered submarines, listed in last year's summit fact sheet, was likely discussed but is not in the readout.

Sources: Yonhap News

Sources: Yonhap News

China's Xpeng is in talks with Volkswagen and other automakers about buying a factory in Europe, according to a Financial Times report. Elvis Cheng, Xpeng's managing director for northeastern Europe, said the Hong Kong-listed EV maker is exploring sites in collaboration with Volkswagen. Options on the table include buying an existing plant or building a new one. Volkswagen declined to comment to Reuters on the FT report.

The Details

Volkswagen already holds a stake in Xpeng, the spine of an existing partnership between the two companies. According to the FT, the German group is open to sharing factory capacity in Europe with Chinese partners. CEO Oliver Blume has previously said he wants to bring cars developed in China to the European market, and the plant talks fit that line.

Xpeng's push into Europe runs into stricter rules on foreign investment from China, which apply across the bloc to deals involving sensitive industries. A factory acquisition or greenfield build with a German partner is one of the few structures that can move forward without triggering the tariff regime that the EU imposed on Chinese-made EVs.

Localisation, not export, is the new playbook

The story is bigger than one factory. Chinese EV makers spent the last cycle trying to export their way into Europe and ran straight into the EU's anti-subsidy duties on China-built electric cars. Building locally, ideally inside an existing plant footprint, is the workaround.

For Volkswagen, the calculation is different. Its own European plants are running below capacity, and Northvolt's collapse left a hole in the European EV supply chain. Selling or sharing a plant with a Chinese partner that already sits inside the VW orbit puts spare capacity to work and gives Wolfsburg a hedge inside its own home market. For Xpeng, it converts a minority shareholder into a manufacturing partner on the ground in Europe.

Sources: DealStreet Asia, Financial Times

Sources: DealStreet Asia, Financial Times

China's capital rolled out the red carpet for Donald Trump on May 13. Air Force One touched down at Beijing Capital International Airport shortly before 8 pm, with Vice-President Han Zheng, a military honor guard and hundreds of flag-waving children on the tarmac. It is the first state visit by a US president in nine years.

The headline event begins Thursday morning at the Great Hall of the People. The 36-hour program also includes a state banquet, a visit to the Temple of Heaven and tea inside the Zhongnanhai compound. Trump leaves on Friday after a working lunch with Xi.

The CEO plane

The business delegation includes Tesla's Elon Musk, Apple's Tim Cook and Boeing's Kelly Ortberg. Nvidia CEO Jensen Huang was a last-minute addition to Air Force One, which pushed AI and semiconductors onto the agenda. Secretary of State Marco Rubio and Defense Secretary Pete Hegseth are also on the trip. Senator Steve Daines summed up the expected deliverables as 'Boeing, beef, and beans.'

Iran, the unwelcome guest at the table

Trump wants Beijing's help winding down the Iran war. China is the biggest buyer of Iranian oil and one of the few governments with real sway in Tehran. But Iran is Beijing's most important Middle East partner and a useful counterweight to the US, and Washington's focus on the Gulf has pulled US military assets out of the Indo-Pacific. Analysts expect Xi to nudge Iran toward talks at most, not cut off economic support. Chinese embassy spokesperson Liu Pengyu told reporters Beijing opposes 'illicit unilateral sanctions.'

Taiwan on the table

Trump confirmed he will discuss US arms sales to Taiwan with Xi and has so far held back a roughly $14 billion weapons package for the island. A bipartisan group of senators urged him in a letter to notify Congress that the sales have been approved. Hours before the summit, the Senate Armed Services Committee held a hearing on China's 'unprecedented nuclear expansion,' with chairman Roger Wicker pointing to hundreds of new missile silos and expanded submarine forces.

Sources: The Straits Times, CNBC, CNN, SCMP

Sources: The Straits Times, CNBC, CNN, SCMP

China's official non-performing loan ratio has barely moved from 1.5 percent for years, through a property collapse and the slowest nominal growth since the 1970s outside Covid. Most economists do not believe the number. Absolute Strategy Research in London puts the real bad-loan ratio closer to 10 percent, which on China's loan book works out to roughly $3 trillion of credit that should be classified as past due but is not. Other estimates run to twice that.

The Details

About 10 percent of listed non-financial firms in China have failed to cover their interest payments from operating earnings for three consecutive years, according to Absolute Strategy Research. A Dallas Fed study counted zombie firms at 16 percent of assets at non-financial companies in 2024, up from 5 percent in 2018. An anonymous government estimate cited by the EU Institute for Security Studies puts the true NPL ratio at 15 to 20 percent.

Beijing has chosen forbearance over recognition. Roughly 40 percent of loans are eligible for or already in some form of forbearance program, with banks discouraged from calling repayment or marking losses. A small-business leniency policy introduced during Covid covers 9.4 trillion yuan (S$1.8 trillion) of loans and runs into late next year. Regulators have told the big banks to keep reported NPL ratios under 2 percent. Banks collectively concealed more than 800 billion yuan of bad assets in the five years to 2024, based on Bloomberg calculations from National Audit Office reports. To shore up the system, officials have injected more than $100 billion of fresh capital into the six biggest banks.

Why this prolongs the slowdown, instead of ending it

The forbearance approach has kept China out of an open banking crisis, but the bill shows up in growth. As Victor Shih at UC San Diego put it, 'there's no financial crisis, but there's no free lunch in economics. The price is just growth, inefficiency and low productivity.' Capital that should fund healthy firms keeps recycling into zombies. Beijing cut its 2026 growth target to 4.5 to 5 percent, the least ambitious goal since 1991.

Hong Kong already shows what the next phase can look like. The city's distressed-loan ratio hit 2.01 percent at the end of 2025, the highest since 2004. Lenders including Bank of East Asia, UOB's HK branch, Bank of China and Hang Seng have built up their special-asset teams and are now pushing fire sales and liquidations of commercial real estate, including a HK$5.5 billion loan tied to the 25-floor HK NEO building in Kowloon. The mainland version of that cleanup has not started.

Sources: Business Times SG

Sources: Business Times SG

Ford's 3 billion US dollar BlueOval Battery Park in Marshall, Michigan, is about to come online with 1,700 employees and lithium iron phosphate cells produced under license from CATL. Business Times Singapore reports that crews were still installing equipment in April, days before President Donald Trump's scheduled summit with Xi Jinping in Beijing on May 13 to 15.

The structure is the point. Ford owns the land, the buildings, the equipment and the workforce. CATL holds no equity. It licenses its battery chemistry, sends Chinese engineers to train Ford employees, and collects fees. CATL CEO Robin Zeng has joked that his cells are "dumb as bricks." The setup has echoes of the TikTok arrangement, in which ByteDance licenses its algorithm to a US-based entity rather than owning the operation.

Why Washington is paying attention

Chinese investment into the US has slowed to a trickle since Trump's first term, and BYD and Xiaomi are effectively frozen out of the consumer market by 100 percent tariffs. Trump has said he is open to Chinese car plants in the US. Ford CEO Jim Farley told Fox News, "We should not let them into our country," while expressing openness to expanded Chinese partnerships.

CATL's European pivot, as the comparison

The Korea Herald reports that CATL raised 5 billion US dollars in Hong Kong and plans to direct about 90 percent of the proceeds to its plant in Debrecen, Hungary. That facility starts production this year with around 40 gigawatt-hours of capacity, scaling toward 100, behind a German plant as CATL's second European base. The pattern: licensing in the US, full ownership at scale in Europe.

What is on the table in Beijing

The Straits Times reports that Trump arrives in Beijing on the evening of May 13. Scott Kennedy at CSIS describes the US agenda as "five Bs," Boeing, beef, beans, the Board of Trade and the Board of Investment, while China is focused on "three Ts," Taiwan, tariffs and technology. Trump told reporters on May 11 he plans to discuss arms sales to Taiwan with Xi, alongside energy security and Iran. Both sides are also expected to discuss extending the rare-earth truce reached at Busan in October 2025.

Sources: Business Times Singapore, The Korea Herald, The Straits Times

Sources: Business Times Singapore, The Korea Herald, The Straits Times

DeepSeek said for the first time that its latest model has been optimized to run on Huawei chips for inference, a measurable break from Nvidia hardware. Business Times Singapore reports that the announcement came days before Trump and Xi were due to meet in Beijing. DeepSeek still relied on Nvidia chips to train its current model, according to two semiconductor industry sources cited by BT. Huawei has said it plans to release a training chip this year, while flagging that catching up to Nvidia's current generation will take another year.

The shift is not happening in isolation. Wei Sun, principal AI analyst at Counterpoint Research in Beijing, told BT that US export controls "are not freezing China's AI development. They are forcing China to build an alternative stack." Firms including DeepSeek and Moonshot AI are designing systems around US restrictions rather than waiting for them to lift.

The Details

Model: DeepSeek's latest, optimized for Huawei chips on inference

Training stack: still Nvidia-based, per two semiconductor industry sources cited by BT

Huawei roadmap: training chip this year, parity with Nvidia's current chips still a year out

Manufacturing constraint: SMIC, which produces some Huawei chips, has struggled to scale yield. Chips are more defect-prone and power-hungry than foreign equivalents

Huawei workaround: stringing together large numbers of weaker chips to match more advanced processors

Policy backdrop: Trump granted Nvidia permission to sell the H200 to China after Busan, but Commerce Secretary Howard Lutnick told a Senate Appropriations Committee no H200s have shipped, and Nvidia said in regulatory filings it has yet to generate H200 revenue from China

Source: Business Times Singapore

Embodied AI funding adds a parallel data point

On the same day, Yicai reported that three Chinese embodied AI firms closed new rounds together worth hundreds of millions of US dollars. Lumos Robotics raised several hundred million yuan across Series A1 and A2 led by Mitsubishi Electric, lifting total funding to nearly 1 billion yuan (about 137.2 million US dollars). Vbot raised nearly 500 million yuan in a pre-Series A for a home-use robot dog. Uncharted Dynamics raised several million dollars in a seed round led by K2VC.

Nvidia CEO Jensen Huang has warned for years that strict export controls would split the global AI market into Chinese chips for Chinese systems and American chips for the rest. The DeepSeek-Huawei pairing is the clearest product-level signal yet that the split is moving from rhetoric into shipped code.

Sources: Business Times Singapore, Yicai Global

Sources: Business Times Singapore, Yicai Global

China's smart-driving sector is being pulled into a new arena. Algorithm providers that built their business around hardware sales and development fees are now being measured on whether they can deliver foundation models for the physical world. KrAsia reports that Zhuoyu Technology, an independent DJI spinoff, unveiled a native multimodal foundation model for mobile physical AI at the latest Beijing Auto Show.

Yu Beibei, vice president of Zhuoyu, put it bluntly to 36Kr: "If you don't get on this technology path, you might not be able to break through in the future." The pressure comes not from autonomous-driving peers but from larger AI players moving in from embodied intelligence, where vision, language, action and reasoning are trained together.

From expert models to foundation models

Yu describes the industry as sitting at an inflection point: continue with specialized expert models or switch to a large-model approach where vision, audio, action, rules and reasoning are all treated as modalities during pretraining. Zhuoyu's training mix today is roughly 30 percent vehicle data, 30 percent robot data and 40 percent first-person-view video from the internet. The commercial model shifts too. The first growth curve sells hardware and dev fees. The second extends the stack into Level 4 robotaxis and robovans, with revenue from profit sharing and subscriptions.

The macro frame

Humanoid Daily, citing the new Capgemini Research Institute report, places this inside a larger industrial pivot. The survey of 1,678 senior executives across 15 industries found nearly 80 percent of organizations already engaging with physical AI. The addressable sectors represent an estimated 50 to 80 trillion US dollars of global GDP. Labor shortages were cited by 74 percent as the top driver. Capgemini's view: growth over the next three to five years will be led by intelligence embedded into proven form factors like autonomous mobile robots, not general-purpose humanoids, where average scaling timelines now sit at about seven years.

Sources: KrAsia, Humanoid Daily

Sources: KrAsia, Humanoid Daily

South Korea and the United States signed a memorandum of understanding on Friday, May 8, to advance bilateral shipbuilding cooperation, setting up a new platform called the Korea-US Shipbuilding Partnership Initiative (KUSPI). Park Jung-sung, deputy minister for trade at Seoul's Ministry of Trade, Industry and Resources, and US Under Secretary of Commerce for International Trade William Kimmitt signed the MOU in Washington, overseen by Industry Minister Kim Jung-kwan and Commerce Secretary Howard Lutnick.

The deal sits inside a much larger commitment. South Korea has pledged to invest 150 billion US dollars in the US shipbuilding sector as part of last year's bilateral trade agreement, which committed Seoul to a total of 350 billion in the US with an annual cap of 20 billion.

The Details

Platform: Korea-US Shipbuilding Partnership Initiative (KUSPI)

Anchor: Korea-US Shipbuilding Partnership Center in Washington, expected later this year

Activities: foreign direct investment into the US maritime industrial base, workforce training, shipyard productivity projects, and technical exchanges

US lead: Commerce Department. Korean lead: MOTIR, providing personnel and funding

Sources: Yonhap News, The Korea Herald

Filling a gap China currently owns

The MOU lands against a backdrop where China is pulling further ahead in commercial shipbuilding. Chinese shipyards received 59.53 million deadweight tonnes in new orders in the first quarter of 2026, a 195.2 percent jump year on year, according to the China Association of the National Shipbuilding Industry. That gave China an 84.9 percent share of global new orders, with South Korea second at 12.8 percent and Japan third at 1.4 percent, per SCMP.

The political backdrop softened on the same day. After Seoul and Washington signed the MOU, President Donald Trump said at the White House, "I love South Korea." Yonhap noted the shift in tone, coming after Trump had earlier criticized Seoul for not supporting US naval operations linked to the conflict with Iran.

For Hanwha Ocean, HD Hyundai and Samsung Heavy, the partnership is the first formal structure inviting them to help rebuild a US civilian shipyard base. The next data point: the first concrete investment projects under the trade deal can be announced after a relevant law takes effect in June.

Sources: Yonhap News, The Korea Herald, SCMP

Sources: Yonhap News, The Korea Herald, SCMP