China this week: Five key developments
A Weekly Review from Beijing – Essential Highlights (July 19–25, 2025)
1. 50 Years of Diplomacy: China and EU Hold Anniversary Summit in Beijing
On July 24, President Xi Jinping of the People's Republic of China met with European Council President António Costa and European Commission President Ursula von der Leyen, who were in Beijing for the 25th China-EU Summit. This meeting coincided with the 50th anniversary of the establishment of diplomatic relations. Following the discussions, both sides agreed to establish a new mechanism concerning rare-earth element exports and to pursue joint climate actions in the spirit of the Paris Agreement.
2. China Commences Construction of World's Largest Hydropower Project, Assuring No Harm to India
On July 19, construction began on the world's largest hydropower project in the lower reaches of the Yarlung Tsangpo River. This undertaking comprises five cascading hydropower stations and is estimated to cost 1.2 trillion yuan ($167.8 billion), surpassing even the scale of the Three Gorges Dam. China emphasizes that the project will not negatively impact India and Bangladesh, a point also articulated in an article published by Chinese diplomat Wang Lei in the Indian press.
3. China and US Prepare for Third Round of Trade Negotiations
The third round of China-US economic negotiations is scheduled to take place in Sweden from July 27 to July 30. The Chinese delegation will be led by Vice Premier He Lifeng. The primary objective is to extend the current agreement suspending reciprocal tariffs, which is set to expire on August 12. Despite political and economic uncertainties, data from the US-China Business Council indicates that 82% of American companies operating in China remain profitable.
4. Hainan Island Set to Become World's Largest Free Port by December
On July 23, China announced that Hainan Island will implement a fully independent customs regime on December 18, 2025. This marks a significant step in transforming the region into the world's largest free port. Key measures include increasing the proportion of duty-free goods from 21% to 74%, liberalizing visa policies for citizens of 85 countries, and introducing extensive tax concessions. Hainan is also referred to as "China's Hawaii."
5. Record-Breaking Deal at Shanghai Air Mobility Exhibition
The first International Exhibition of Advanced Air Mobility Technologies in Shanghai showcased 19 global premieres and 25 new Chinese innovations. Focusing on the development of the "low-altitude economy," the expo facilitated a record-breaking deal: Thailand's Pan Pacific finalized a $1.75 billion contract with Shanghai-based Volant Aerotech for the supply of air taxis. This represents a new benchmark for the Chinese industry.
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