Minister of External Affairs S Jaishankar met Chinese President Xi Jinping during his first visit to China after the 2020 standoff along the Line of Actual Control (LAC) began. Jaishankar was in Tianjin to attend the meeting of foreign ministers from Shanghai Cooperation Organisation (SCO) countries on July 14 and 15. China had another high-profile visitor this week in Jensen Huang, the CEO of the tech giant NVIDIA. Earlier this month, it became the first public company in history to achieve a market capitalisation of $4 trillion. Huang spoke in Mandarin at an event in Beijing and signed autographs as part of what’s been described as a “charm offensive”. Finally, as we mentioned last week, China’s latest GDP numbers for April to June were released, revealing a better-than-expected 5.2% growth. Here is a closer look at these developments: 1. Jaishankar meets Xi in China Following Defence Minister Rajnath Singh’s June visit to China, which holds the rotating SCO presidency this year, Jaishankar went to Tianjin in northeastern China last week. While Singh refused to sign a draft statement that did not mention the Pahalgam terror attack, Jaishankar also used the platform to speak about terrorism. He said the SCO was founded in 2001 to combat the “three evils” of “terrorism, separatism and extremism”, and that the grouping needed to take an “uncompromising position on this challenge”. In a post on X, the minister said he “Apprised President Xi of the recent development of our bilateral ties. Value the guidance of our leaders in that regard.” UPSHOT: In a statement during a meeting with his Chinese counterpart Wang Yi, Jaishankar noted that “Since our leaders’ meeting in Kazan in October 2024 (for the BRICS summit), the India-China relationship has been gradually moving in a positive direction. Our responsibility is to maintain that momentum.” That month, India and China completed the process of disengagement of troops in the Depsang Plains and Demchok areas of eastern Ladakh, two friction points along the LAC. “We have made good progress in the past nine months for the normalization of our bilateral relations. It is a result of the resolution of friction along the border and our ability to maintain peace and tranquility there,” he said. This was significant, given the lack of discussion on these locations until recently. Easing of border-related disagreement, at least to an extent, has heightened the pace of cooperation in other areas, such as the resumption of the Kailash Mansarovar Yatra. An opinion article published in Global Times, the Chinese state media website, also had an interesting perspective about the slow pace of normalisation. “New Delhi… begun to highlight its economic and security concerns regarding China. Many Chinese analysts pointed to the US factor behind Indian hesitation, while Indian scholars emphasized that India not be defined solely by its relationship with the US. How New Delhi handle the US divide-and-rule tactics will significantly affect its efforts on how and when to reset ties with China.” The Xi-Jaishankar meeting also led some commentators to speculate that Prime Minister Narendra Modi may visit China in late August for the SCO annual summit. 2. Jensen Huang in Beijing The Taiwan-born CEO of the chip-designing giant has made several trips to China in recent years. This was his third trip in roughly the last six months. Huang did a host of things — he met Chinese Vice Premier He Lifeng, and Xiaomi founder and CEO Lei Jun, whom he called “a brilliant business person” according to a CNBC report. At one point, he “swapped his signature leather jacket for traditional Chinese-style attire and delivered a speech at the opening ceremony of a government-backed business fair, partly in Chinese,” The Wall Street Journal reported. He called China’s supply chain “a miracle,” praising the country’s researchers, developers and entrepreneurs. UPSHOT: The visit came as Nvidia announced on Tuesday that it may soon sell its H20 chips again. They were meant for the Chinese market after its higher-quality chips were restricted by the US government. However, these chips were also prevented from being sold in China later. It was part of the policy to deprive China of key AI technology for strategic and security reasons, as the capability gap between the two countries narrows. “NVIDIA is filing applications to sell the NVIDIA H20 GPU again. The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon,” a statement from the company said. Relatively less advanced, these chips were positioned by the company as preventing the growth of Chinese indigenous companies, while also conveniently benefiting an American company. The New York Times recently reported that Huang recently met US President Donald Trump in the Oval Office and “pressed his case for restarting sales of his specialized chips”. “He argued that American chips should be the global standard and that the United States was making a grave mistake by ceding the giant Chinese market to homegrown rivals,” it added. However, Huang has also been criticised by some US politicians for excessively attempting to deepen ties with China. 3. China’s GDP growth amid tariff war Since the second quarter covered the period when Trump announced his “Liberation Day” tariffs, the release of this data was eagerly awaited to see how the Chinese economy fared. Undoubtedly, maintaining an above-5% growth rate is a positive sign, but the data also showed lower growth in domestic consumption, something long described as a problem area. We wrote two explainers breaking down the data this week. First, we looked at how the numbers stand and the recent factors that helped and hurt the economy. Second, we spoke to an analyst of the Chinese economy about the larger causes behind deflation and a slump in consumption. The bottom line is that while exports and manufacturing remain important drivers, domestic issues need to be addressed as well. Moreover, the data from later in the year could drive decisions on stimulus packages.
