Asia Pacific News
LAST UPDATE: June 28, 2025
China’s Central Bank Says Economy Is on Positive Track But Challenges Persist
The People’s Bank of China reports improving economic indicators, including stronger consumer sales in May. However, it warns that domestic demand remains weak and deflationary pressures continue. The central bank plans to maintain a moderately expansionary monetary policy and adapt decisions flexibly based on domestic and global conditions.
Insight
Despite encouraging signs, the central bank remains cautious. Policymakers are balancing the need to support growth with concerns over deflation and weak internal consumption, suggesting targeted stimulus rather than aggressive easing.
China’s Iran oil imports surge in June on rising shipments, teapot demand
In June, China’s imports of Iranian crude oil reached a record average of ~1.46 M bpd (1–20 June), peaking above 1.8 M bpd. Independent “teapot” refineries drove demand due to discounted prices and low stocks. A loosening in U.S. sanctions enforcement under Trump may facilitate continued high imports, although discount levels have shrunk.
Insight
The surge underscores China’s geopolitical strategy of leveraging discounted Iranian oil to support domestic refineries. It highlights China’s resilience to sanctions and its ability to capitalize on flexible policy enforcement by the U.S.
China’s rare earths are flowing again, but not freely
Reuters
China has gradually resumed export licenses for rare earth magnets, lifting rates from ~25% to ~60%. While automakers like Volkswagen and Stellantis have avoided major disruptions, overall exports remain ~75% below pre-curb levels. Delays persist, especially to U.S. and third-country firms. A bilateral agreement aims to streamline shipments.
Insight
Gradual easing offers relief, but structural opacity and persistent diplomatic undercurrents mean that supply chain volatility may continue. Companies need to monitor both licensing timelines and potential strategic linkages to broader geopolitical tensions.
India’s Modi to attend next week’s BRICS summit in Brazil
Prime Minister Narendra Modi will attend the BRICS Summit in Brazil from July 5–8, 2025. The meeting marks continued BRICS expansion with the recent addition of countries like UAE, Egypt, and Indonesia.
Insight
Modi’s presence reinforces India’s commitment to strengthening South–South cooperation. As BRICS grows, India may use this platform to advance its economic and strategic priorities, including alternative development finance and geopolitical alignment beyond Western-led institutions.
India taking steps to mitigate disruptions due to rare earths curbs
India’s government report states that China’s export curbs prompted New Delhi to launch a 7-year plan to boost domestic rare earth processing and magnet production. Despite being the world’s 5th-largest reserve holder, India imports ~53,748 tonnes of rare earth magnets. Incentives will support local supply chains.
Insight
The policy marks a strategic pivot toward resource self-reliance in high-tech and clean-energy sectors. India’s long-term vision may reduce global dependency on China and position itself as a regional processing hub—though execution and technology capacity remain key challenges.
US says deal with Beijing will expedite rare earth exports from China
The U.S. and China have finalized a framework to accelerate the export of rare earth minerals and magnets from China to the U.S., resolving earlier delays caused by China’s export curbs tied to U.S. tariffs. Temporary licenses for U.S. automakers were granted, and in return, Beijing agreed to ease student visa rules.
Insight
This agreement marks a significant step toward stabilizing critical supply chains in key industries like automotive, aerospace, and defense. Still, export controls on dual-use materials highlight underlying strategic distrust and potential future bottlenecks.
