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German Chancellor Friedrich Merz touched down in China on Wednesday, beginning his inaugural visit to his country’s largest trade partner and a high-tech rival as Europe’s biggest economy struggles.Berlin and Beijing want to build on their decades-old economic ties at a time when US President Donald Trump has sparked global chaos with his tariffs blitz and other erratic foreign policy moves.But Merz is also expected to stress German and European interests in his talks on Wednesday with President Xi Jinping, including by urging him to put pressure on China’s ally Russia to end the war in Ukraine.China, the world’s number two economy, overtook the United States last year to become Germany’s biggest trade partner, but Berlin also regards the Communist Party-run state as a systemic rival to the West.Merz is the latest in a string of Western leaders courting Beijing in recent months, including Britain’s Keir Starmer, France’s Emmanuel Macron and Canada’s Mark Carney, as they recoil from the mercurial policies of Trump, who is also expected from March 31.Merz said on Friday he was going to Beijing, with a large business delegation in tow, in part because export-dependent Germany needs “economic relations all over the world”.”But we should be under no illusions,” he added, pointing out that China, as a rival to the United States, now “claims the right to define a new multilateral order according to its own rules”.Soon after landing, Merz met with Premier Li Qiang in Beijing’s opulent Great Hall of the People, where representatives from both sides signed agreements and memorandums including on climate change and food security.Merz stressed the importance of deepening relations, but added “we have very specific concerns regarding our cooperation, which we want to improve and make fair”.In an apparent allusion to the United States, Li noted that “unilateralism and protectionism have gained ground, and even become prevalent, in some countries and regions”.”Against such a backdrop, China and Germany, as two major economies in the world with significant influence, should… jointly safeguard multilateralism and free trade,” Li said.China under Xi has grown far more assertive on the world stage, built up its military, stressed its claim to self-ruled Taiwan, and pushed back strongly against criticism of its human rights record.Flexing its muscle at times of tension, Beijing has restricted exports of critical minerals used in products from microchips and wind turbines to electric-car batteries and weapons systems.Last year, Beijing temporarily halted the export of Nexperia chips to Europe following a dispute with the Dutch government.More broadly, European businesses complain that China, with its low domestic demand, is flooding Europe with goods made cheap through state subsidies and an undervalued currency.Germany’s trade deficit with China hit a record 89 billion euros ($105 billion) last year.- ‘Systemic competition’ -As Trump has unsettled allies and rivals alike, China has nonetheless also sought to present itself as a reliable partner and defender of the multilateral order.China’s top diplomat Wang Yi told Merz at the Munich Security Conference this month that Beijing hoped to bring ties “to a new level” and wanted Germany to be a “stabilising anchor for strategic relations” in the European Union.Merz, like his predecessors Angela Merkel and Olaf Scholz, is joined by business leaders including executives of auto giants Volkswagen, BMW and Mercedes.On Thursday, Merz is to visit Beijing’s Forbidden City, then a Mercedes plant where autonomous driving vehicles will be presented.The chancellor then travels to AI hub Hangzhou to visit the robotics group Unitree and German turbine maker Siemens Energy.German businesses have given Merz a to-do list on his trip.”We expect the chancellor to clearly address problems such as overcapacity, distortions of competition, and export controls on critical raw materials,” said Wolfgang Niedermark of the Federation of German Industries.German and European companies in China are not only “competing with highly innovative Chinese firms” but are also players in a “state-driven systemic competition”.Merz should advocate for “structural reforms to strengthen domestic demand and fairer competitive conditions” in China, he said, warning that without change there will be “new trade conflicts with the EU”.

Tech shares bounced on Tuesday following the prior session’s selloff as markets weigh the impact of artificial intelligence on incumbent technology companies while navigating tariff uncertainty.After losing more than one percent Monday, major US indices began tentatively Tuesday before catching their stride later in the morning. The tech-rich Nasdaq led Wall Street indices with a one-percent gain, while the Dow and S&P 500 also finished solidly higher.”Today tech is really catching a break from the AI disruption narrative,” said Angelo Kourkafas of Edward Jones, who also pointed to a big Meta deal secured by semiconductor company AMD.”Both of these developments and news headlines on the tech space are helping recover some of yesterday’s losses,” Kourkafas said.In Europe, both London and Frankfurt closed flat, while Paris rose. Asian stock markets traded mixed.Besides AI, markets have been assimilating the after-effects of the Supreme Court’s move last week to strike down many of US President Donald Trump’s tariffs. Right after the ruling, Trump announced new levies at 10 percent, under a different legal authority. Trump has vowed to raise this level to 15 percent, with exclusions expected to remain for goods covered by sector-specific arrangements and the US-Mexico-Canada trade pact.However, the move has raised questions about other trade deals Washington has agreed since Trump’s tariff blitz in April, with the European Union demanding clarity on the issue before ratifying its agreement with the United States.Trump is scheduled to address Congress in the annual State of the Union speech Tuesday night that will likely include discussion of tariffs and other economic issues.The market’s Jekyll-and-Hyde attitude towards AI shifted on Tuesday after an announcement that tech giant Meta had reached an agreement to purchase millions of chips from processor manufacturer AMD, in which it could become a shareholder.Shares in AMD jumped 8.8 percent, while Meta rose 0.3 percent.Sentiment had been dampened by renewed concerns about the impact of artificial intelligence on the tech sector, with software firms again in the firing line.The latest blow came from a report Sunday by Citrini Research that used possible scenarios set in the future showing parts of the global economy that could be at risk from new tools, such as credit card and food delivery firms.But investors adopted a more sanguine view of the situation Tuesday following a presentation by AI company Anthropic that emphasized the compatibility of its technology with existing programs, analysts said.”The reality is that these new AI tools will not rip and replace existing software ecosystems and data environments,” said a note from Wedbush Securities, noting that the tools were only as useful as the data they could use.”AI is more likely to drive a modernization cycle than bypass the installed base.”Shares in Danish drugmaker Novo Nordisk, which is struggling with competition for its anti-obesity treatments, fell 3.1 percent after it announced it would sharply cut prices for its flagship drugs in the US, announcing a 50-percent cut for Wegovy and 35 percent for Ozempic.- Key figures at around 2115 GMT -New York – Dow: UP 0.8 percent at 49,174.50 (close)New York – S&P 500: UP 0.8 percent at 6,890.07 (close)New York – Nasdaq Composite: UP 1.0 percent at 22,863.68 (close)London – FTSE 100: FLAT at 10,680.59 (close)Paris – CAC 40: UP 0.3 percent at 8,519.21 (close)Frankfurt – DAX: FLAT at 24,986.25 (close)Tokyo – Nikkei 225: UP 0.9 percent at 57,321.09 (close)Hong Kong – Hang Seng Index: DOWN 1.8 percent at 26,590.32 (close)Shanghai – Composite: UP 0.9 percent at 4,117.41 (close)Euro/dollar: DOWN at $1.1783 from $1.1785 on MondayPound/dollar: UP at $1.3508 from $1.3492Euro/pound: DOWN at 87.23 pence from 87.34 penceDollar/yen: UP at 155.74 yen from 154.65 yenBrent North Sea Crude: DOWN 1.0 percent at $70.77 per barrelWest Texas Intermediate: DOWN 1.0 percent at $65.63 per barrelburs-jmb/aha

German Chancellor Friedrich Merz left Tuesday for his inaugural visit to China, long a huge market for German goods but now a high-tech rival as Europe’s biggest economy struggles.Berlin and Beijing want to build on their decades-old economic ties at a time US President Donald Trump has sparked global chaos with his tariffs blitz and other erratic foreign policy moves.But Merz is also expected to stress German and European interests in his talks Wednesday with President Xi Jinping, including by urging him to put pressure on its ally Russia to end the war in Ukraine.Germany considers China, the world’s number two economy, as a key trade and investment partner — but also regards the communist one-party state as a systemic rival to the West.Many commentators have taken note of the fact that Merz first travelled to India, the world’s largest democracy, weeks before he headed to China.Merz said Friday he was going to Beijing, with a large business delegation in tow, in part because export-dependent Germany needs “economic relations all over the world”.”But we should be under no illusions,” he added, pointing out that China as a rival to the United States now “claims the right to define a new multilateral order according to its own rules”.China under Xi has grown far more assertive on the world stage, built up its military, stressed its claim on Taiwan, and pushed back strongly against criticism of its human rights record.Flexing its muscle at times of tension, Beijing has restricted exports of critical minerals used in products from microchips and wind turbines to electric car batteries and weapons systems.Last year, Beijing temporarily halted the export of Nexperia chips to Europe following a dispute with the Dutch government.More broadly, European businesses complain that China, with its low domestic demand, is flooding Europe with goods made cheap through state subsidies and an undervalued currency.Germany’s trade deficit with China hit a record 89 billion euros ($105 billion) last year.”China has risen to the ranks of the major powers,” Merz said just before leaving Berlin Tuesday, stressing that “we want a partnership with China that is balanced, reliable, regulated and fair”.- ‘Systemic competition’ -As Trump has unsettled allies and rivals alike, China has nonetheless also sought to present itself as a reliable partner and defender of the multilateral order.China’s top diplomat Wang Yi told Merz at the Munich Security Conference this month that Beijing hoped to bring ties “to a new level” and wanted Germany to be a “stabilising anchor for strategic relations” in the European Union.As other nations also seek to rebalance their economic relations, the leaders of France, Britain and Canada all recently visited China, where Trump is expected from March 31.Merz, like his predecessors Angela Merkel and Olaf Scholz, will be joined by business leaders including executives of auto giants Volkswagen, BMW and Mercedes.In Beijing, Merz will first meet Prime Minister Li Qiang, then have talks and dinner with Xi.On Thursday, Merz is to visit Beijing’s Forbidden City, then a Mercedes plant where autonomously driving vehicles will be presented. The chancellor then travels to Hangzhou, often called China’s “Silicon Valley,” to visit the robotics group Unitree and German turbine maker Siemens Energy. German businesses have given Merz a to-do list on his trip.”We expect the chancellor to clearly address problems such as overcapacity, distortions of competition, and export controls on critical raw materials,” said Wolfgang Niedermark of the Federation of German Industries.German and European companies in China are not only “competing with highly innovative Chinese firms” but are also players in a “state-driven systemic competition”.Merz should advocate for “structural reforms to strengthen domestic demand and fairer competitive conditions” in China, he said, warning that without change there will be “new trade conflicts with the EU”.

US stocks bounced higher as investors recovered from a fresh bout of angst over AI and new US tariffs.”Most global stock indices recovered despite mixed economic data,” said IG analyst Axel Rudolph. He pointed to better-than-expected US consumer confidence data and private sector job growth, while UK retail sales fell as did European car sales.Wall Street’s main indices shed more than one percent on Monday as the market “went through another disruption trade that was a three-headed monster of tariffs, AI displacement, and private credit concerns”, said market analyst Patrick O’Hare.While dipping further at the open, they soon recovered and pushed higher.The market’s Jekyll-and-Hyde attitude towards AI shifted on Tuesday after an announcement that tech giant Meta had reached an agreement to purchase millions of chips from processor manufacturer AMD, in which it could become a shareholder.Shares in AMD jumped 6.8 percent as trading got under way, while shares in Meta were flat.Nevertheless, “investors are wary as they brace for further volatility sparked by unpredictable US trade policy and the fallout from AI advances,” said Susannah Streeter, chief investment strategist at Wealth Club. Sentiment had been dampened by renewed concerns about the impact of artificial intelligence on the tech sector, with software firms again in the firing line.The latest blow came from a report Sunday by a firm called Citrini Research that used possible scenarios set in the future showing parts of the global economy that could be at risk from new tools, such as credit card and food delivery firms.Adding to the downbeat mood was a post by Anthropic saying its Claude chatbot could help to update the COBOL programming language used on IBM computers. IBM fell more than 13 percent in New York on Monday.”Traders are concerned with the degree to which AI will disrupt rather than enhance corporate profitability and overall levels of employment,” said Joshua Mahony, chief market analyst at Scope Markets. The releases come after Anthropic earlier this month unveiled a model that could replace numerous software tools, including for legal work and data marketing.Markets have largely taken in stride the US Supreme Court’s decision to strike down much of President Donald Trump’s tariff policy and his subsequent move to impose tariffs, initially set at 10 percent, under a different legal authority.Trump has vowed to raise this level to 15 percent, with exclusions expected to remain for goods covered by sector-specific arrangements and the US-Mexico-Canada trade pact.However, the move has raised questions about other trade deals Washington has agreed since Trump’s tariff blitz in April, with the European Union demanding clarity on the issue before ratifying its agreement with the US.Observers said 2026 could see more tariff-based friction but they did not expect it to be as painful for markets as last year’s upheaval.In Europe both London and Frankfurt closed flat, while Paris rose.Asia markets traded mixed.Shares in Danish drugmaker Novo Nordisk, which is struggling with competition for its anti-obesity treatments, fell 3.1 percent after it announced it will sharply cut prices for its flagship drugs in the US, announcing a 50 percent cut for Wegovy and 35 percent for Ozempic.- Key figures at around 1630 GMT -New York – Dow: UP 0.7 percent at 49,121.99 pointsNew York – S&P 500: UP 0.5 percent at 6,870.98New York – Nasdaq Composite: UP 0.8 percent at 22,805.47London – FTSE 100: FLAT at 10,680.59 (close)Paris – CAC 40: UP 0.3 percent at 8,524.02 (close)Frankfurt – DAX: FLAT at 24,986.25 (close)Tokyo – Nikkei 225: UP 0.9 percent at 57,321.09 (close)Hong Kong – Hang Seng Index: DOWN 1.8 percent at 26,590.32 (close)Shanghai – Composite: UP 0.9 percent at 4,117.41 (close)Euro/dollar: DOWN at $1.1789 from $1.1792 on MondayPound/dollar: UP at $1.3534 from $1.3492Euro/pound: DOWN at 87.11 pence from 87.40 penceDollar/yen: UP at 155.71 yen from 154.68 yenBrent North Sea Crude: DOWN 0.1 percent at $71.04 per barrelWest Texas Intermediate: UP 0.3 percent at $66.13 per barrelburs-rl/cw

China imposed export restrictions on dozens of Japanese firms on Tuesday that it said were involved in building up Tokyo’s military, escalating a months-long row.The spat between Asia’s top two economies was sparked by comments by Prime Minister Sanae Takaichi in November that Japan could intervene militarily in any attack on self-ruled Taiwan.The measures announced on Tuesday cover exports of “dual-use” items — which can have civilian and military uses — to 20 Japanese entities, including subsidiaries of Mitsubishi Heavy Industries and Japan’s space agency.The commerce ministry added a further 20 Japanese organisations, including automaker Subaru, to a “watch list” requiring stricter reviews of exported items that could be used for military purposes.”The above measures are aimed at curbing Japan’s ‘remilitarisation’ and nuclear ambitions and are completely legitimate, reasonable and lawful,” a commerce ministry statement said.”Honest and law-abiding Japanese entities have nothing to worry about,” it added.A Japanese trade ministry official told AFP that Tokyo would “take appropriate measures” after analysing the impact of the new curbs. Tokyo had strongly protested the measures and demanded they be overturned, according to deputy chief cabinet secretary Kei Sato who called Beijing’s move “absolutely intolerable and extremely regrettable.” Takaichi’s comments on Taiwan, which China views as its territory and has not ruled out taking by force, have enraged Beijing.The most visible consequence is a sharp drop in Chinese visitors to Japan — 61 percent in January — after Beijing warned its citizens against going there.In December, J-15 jets from China’s Liaoning aircraft carrier twice locked radar on Japanese aircraft in international waters near Okinawa, according to Japan.China has reportedly suspended imports of Japanese seafood. Japan’s last two pandas were also returned to China last month.China announced tightened controls on exports to Japan for items with potential military uses in January.This fuelled worries that Beijing may choke supplies of vital rare-earth minerals, some of which are included in China’s list of “dual-use” goods.- Shares tumble -The latest move singles out Japanese industrial heavyweights including shipbuilding and aerospace firms.Shares in Kawasaki Heavy Industries sank almost five percent in Tokyo, while Mitsubishi Heavy Industries shed close to four percent and IHI tumbled nearly seven percent.Several of the firms listed are indeed active in the defence industry, manufacturing kit including ships, fighter jets and missiles for the Japanese military.Japan has been shedding its strict pacifist stance, moving to obtain “counterstrike” capabilities and to ease rules on exporting lethal defence equipment.Takaichi’s government in December approved a record defence budget worth nine trillion yen ($58 billion) for the coming fiscal year to expand its military capabilities.Beijing’s top diplomat Wang Yi said at the Munich Security Conference this month that forces in Japan were seeking to “revive militarism”.Takaichi told parliament on Friday that China was intensifying attempts to change the status quo “by force or coercion” in the East China Sea and the South China Sea.”Strengthening our defence capabilities is essential to protect the lives and peaceful livelihoods of our citizens as we face the most severe and complex security environment since the end of (World War II),” Takaichi said Monday.Japanese firms dealing with China were already struggling with delays in getting approvals, said Noriyuki Kawamura, professor emeritus of Japan-China relations at Nagoya University of Foreign Studies.”With today’s announcement, we can expect the process will be made even more stringent. I believe this will be a huge blow to companies involved,” Kawamura told AFP.Yee Kuang Heng, a professor in international security at the University of Tokyo, said that Japanese firms are major buyers of critical minerals gallium and germanium from China, with gallium nitride used in radar sensors on Japanese warships.”Short-term impact may be limited with a stockpile to cushion the disruptions but if the controls drag on, some damage is possible,” Heng told AFP.

Panamanian authorities have taken control of two ports on the Panama Canal from CK Hutchison after the Hong Kong-based conglomerate’s concession was annulled amid a row between the United States and China.CK Hutchison objected Tuesday to the takeover, which it called “unlawful” and said raises “serious risks to the operations, health and safety” at terminals.”In January, the country’s supreme court declared as “unconstitutional” the contract which had allowed Hutchison’s subsidiary Panama Ports Company (PPC) to manage the ports of Balboa on the Pacific and Cristobal on the Atlantic since 1997.”The Panama Maritime Authority has taken possession of its ports and guarantees the continuity of operations,” an official said Monday after the Panamanian Supreme Court annulled Hutchison’s contracts to operate the ports.The court ruling was the latest legal move to ripple through the interoceanic waterway, which handles about 40 percent of US container traffic and five percent of world trade.The Central American country has been swept up in broader tensions between Washington and Beijing, with US President Donald Trump claiming, without providing evidence, last year that China effectively runs the canal.Panama has always denied Chinese control over the 80-kilometer (50-mile) waterway, which is used mainly by the United States and China.Hutchison had asked the Panamanian government to enter into negotiations to allow it to continue operating the two terminals — to no avail.Publication of the court ruling in the official gazette Monday effectively ended the legal process.”This does not imply the expropriation of those assets, but rather their use to guarantee the operation of the ports until their real value is determined for the corresponding actions,” said Panamanian President Jose Raul Mulino.Ports director Max Florez said an 18-month transition period now begins, with the ports being operated by two other companies before contracts are awarded under a new international tender.PPC denounced the move as an “illegal takeover without transparency or coordination” and said Panama’s actions were “confiscatory.”In its statement Tuesday, CK Hutchison said: “None of the actions by the Panama State were advised to or co-ordinated with PPC.”It will continue to consult with legal advisors regarding the ruling and “all available recourse including… legal proceedings against the Republic of Panama and its agents and third parties colluding with them”, CK Hutchison added.Hong Kong’s government lodged a “stern protest” on Tuesday, saying in a statement that the “heavy-handed action” had “seriously infringed upon the lawful rights and interests of Hong Kong enterprises.”- ‘No layoffs’ -China’s Hong Kong and Macao Affairs Office had previously warned that Panama would pay a “heavy price, both politically and economically” for stripping Hutchison of its tender.Panama said APM Terminals, a subsidiary of the Danish Maersk group, will operate the port of Balboa, and Terminal Investment Limited, owned by the logistics giant MSC, will operate the port of Cristobal.Labor Minister Jackeline Munoz assured there would be “no layoffs” at the two terminals, which employ around 1,200 people.Following the court’s January ruling, the Panama Maritime Authority had said a division of Maersk Group would temporarily take over operation of the facilities.Last week, Hutchison warned of possible legal action against Maersk and others over the annulment of its contract. The Hong Kong company has said it will challenge Panama’s decision before the International Chamber of Commerce.US Ambassador to Panama Kevin Cabrera defended Panamanian authorities, saying they have the right “to have their judicial system make its own decisions” and that the Supreme Court ruling was “very good” for the people of Panama.The Panama Canal was built by the United States, which operated it for a century before ceding control to Panama in 1999.On his first day back in the White House last year, Trump threatened to seize the canal.He cooled his threats after Panamanian authorities decided that the concession ran counter to Panama’s interests.