European Union leaders supported creating a tool to potentially shut out Chinese goods as a growing flood of low-cost imports pushed the bilateral trade deficit to a record.

Officials could start work on developing a trade “kill switch”, European Commission President Ursula von der Leyen signalled to EU leaders at a Brussels meeting on Thursday, the South China Morning Post reported, citing unidentified people briefed on the talks. Leaders requested a proposal by year-end, Bloomberg News said. The tool would only be used in extreme cases where the EU economy was viewed as being under attack.

Von der Leyen highlighted chemicals and industrial machinery as priorities for new trade defences after the September EU-China trade deficit grew by 25.3 per cent from a year earlier to US$34.8 billion. European leaders may feel emboldened about confronting China after winning a cap on hybrid-vehicle imports last week. China’s reliance on exports to support an otherwise limp economy may also be viewed as providing leverage, particularly given the increased importance of European markets amid US protectionism.

European nations, including traditionally pro-free-trade Germany, are taking an increasingly tough line as local companies struggle with surging low-cost competition from China. About the half of the exhibitors at this week’s Paris Motor Show, for instance, were Chinese brands, according to Allianz Trade.

Still, EU unity could quickly falter if a full trade war breaks out given China’s stranglehold on global supplies of vital rare earth minerals and the importance of its huge domestic market to some European exporters. Upcoming elections, notably including next year’s French presidential vote, could also have a destabilising effect.

Economic data: China’s September exports surged by 36.3 per cent as the global artificial intelligence (AI) buildout spurred demand for computer chips and other hi-tech products. Imports grew by 31 per cent. September producer prices rose by 5 per cent from a year earlier, the fastest increase since mid-2022. Consumer prices only went up by 0.9 per cent. The International Monetary Fund trimmed its China growth forecasts by 0.1 percentage points versus July. It now sees expansion cooling to 4.5 per cent this year and to 4 per cent next year.

China will reduce tax rebates on electric vehicle exports from April. The country fell three places in a global ranking of trade sustainability. The securities regulator signalled potential support for the domestic stock market, which has fallen by almost 20 per cent from a peak.

Tech news: Apple will introduce a beta version of Apple Intelligence in mainland China this month after winning approval to integrate two AI models developed by SCMP owner Alibaba into its iPhones. Memory maker CXMT is readying to launch server products with a new-generation chip architecture, leapfrogging Korean rivals Samsung and SK Hynix. The chipmaker received a visit from the new Communist Party secretary of Anhui province, Li Lecheng, who pledged support for the company and the chip sector.

Chipmaking equipment giant ASML expects to get 20 per cent of sales from China this year. AI company DeepSeek apologised and offered refunds following a five-hour outage.

US-China ties: Payment giant Visa gained permission to start operations in China following a nine-year wait. The move was a “direct outcome” of President Xi Jinping’s trip to Washington last month, according to the Chinese government. The United States and China are seeking to iron out a bilateral AI framework ahead of a presidential meeting next month at the Apec leaders’ summit in Shenzhen. Japanese officials want US President Donald Trump to visit Tokyo en route to Apec to underscore bilateral ties amid the country’s year-long row with China. US Defence Secretary Pete Hegseth called a US$1.5 trillion defence budget request “absolutely critical” amid China’s military modernisation.

Law and order: President Xi pledged to “uproot sick trees” in the anti-corruption fight, according to the transcript of a speech published by the Communist Party’s flagship magazine ahead of a major conclave later this month. Huang Qifan, the former mayor of Chongqing and a long-term political survivor, was placed under investigation for corruption. Ex-Wuhan mayor Zhou Xiangwang was sentenced to 14 years in jail for bribery. Three leading members of a Myanmar cross-border crime syndicate were sentenced to death. US regulators fined Bank of America more than US$1.21 billion for violations of anti-money-laundering laws including transactions tied to Chinese networks.

Hong Kong stocks: The city’s securities regulator cracked down on alleged IPO rigging, upending the local finance industry. Shares in smartphone maker Transsion fell on their Hong Kong trading debut after a HK$3.36 billion IPO. The retail portion of the offering was only 3.5 times oversubscribed, extending weak demand in the city. Plans to introduce next-day trade settlements on Hong Kong’s stock exchange may be delayed beyond the end of next year, the SCMP reported.

Cross-strait ties: Taiwanese leader William Lai Ching-te welcomed talks between Beijing and Washington during his annual Double Tenth Day address. Beijing sanctioned ministers from Belize and Paraguay after the countries signed deals with Taiwan. The island’s defence ministry may raise the retirement age for military pilots to 58. Two local executives were arrested for allegedly using mainland Chinese-made components in drones supplied to the military.

GDP update: China may report a second quarter of below-target GDP growth when it publishes data on Monday. Year-on-year expansion was probably 4.4 per cent in the three months ended September, according to economists’ estimates compiled by financial data provider Wind. Second-quarter growth was 4.3 per cent, trailing the government’s full-year target range of 4.5-5 per cent. Retail sales growth probably accelerated to 0.7 per cent in September from 0.4 per cent in August. Monthly industrial output probably rose by 5.5 per cent. Real-estate investment probably fell by 19.3 per cent in the first nine months, fuelling a 7.5 per cent decline in overall spending on fixed assets.

Trade discussions: Apec finance ministers will gather in Hong Kong on Tuesday and Wednesday for their annual meeting. Chinese Finance Minister Lan Foan will deliver a keynote speech. Taiwanese Finance Minister Chuang Tsui-yun will attend the event. US Treasury Secretary Scott Bessent may be absent, according to the SCMP. EU trade ministers will hold an informal meeting in Dublin on Thursday and Friday.

Stimulus measures to support the economy or stocks. Wu Qing, the head of the securities regulator, delivers a keynote address on Monday. Central bank governor Pan Gongsheng will also speak.

China-Japan relations: Japan starts 11 days of military drills with the US on Monday, including the deployment of anti-ship missiles, air defences and communications networks on islands near Taiwan. The Japanese contingent in Keen Sword 27 is significantly enlarged from the last drills in 2024, with about 45,000 personnel, 40 ships and 260 aircraft taking part. The US is sending around 12,000 troops. Separately, a business delegation from the Kansai Economic Federation may visit China from Sunday to Friday.

AI companion rules: The window for public comment on draft rules covering internet usage by minors closes on Saturday. Proposals from China’s top online regulator include a ban on companies offering “virtual intimacy services” to minors. Fines would be as high as 10 times the income generated from the services.

Beijing Marathon: Some 32,000 runners hit the streets of China’s capital on Sunday for the nation’s oldest city marathon. The Beijing Marathon starts in Tiananmen Square, follows a scenic northern route and ends in the Beijing Olympic Park between the Bird’s Nest stadium and the Water Cube.