China’s producer price inflation eased more than expected in July to its weakest in three months, while consumer inflation also cooled, reports Reuters. This comes as global energy prices retreated despite the US-Israel war against Iran.

The producer price index rose 3.5% from a year earlier in July, National Bureau of Statistics data showed, easing from 4.1% in June to its lowest in three months. The core consumer price index, which ​excludes volatile costs for food and energy, rose 0.9% on year, food prices fell 1.5%. From the previous month, CPI edged down 0.1%, compared ​with an expected 0.2% gain and following a 0.3% dip in June.

China’s leaders, confronting a two-speed economy of strong factory output and exports but weak domestic demand, have pledged to bolster ​growth by accelerating fiscal spending on already budgeted infrastructure projects through year-end.

Volkswagen Group plans to cut global production capacity by 1 million vehicles across China and Europe and reduce its vehicle lineup by as much as 50%, reports Caixin. The move is part of a broad restructuring aimed at improving efficiency and profitability.

Management presented the plan Thursday at a closed-door supervisory board meeting in Germany. The strategy is intended to refocus Volkswagen on its core business and strengthen its resilience against external shocks and risks.

The overhaul highlights the mounting pressure on the German automaker as it contends with geopolitical tensions, tighter regulations and intensifying competition from Chinese carmakers that are eroding its market share in China and Europe.

Polestar said on Thursday the Trump administration was forcing the electric-vehicle maker to stop selling vehicles in the United States beginning in the ‌2027 model year, reports Reuters. This comes as Washington ramps up its crackdown on Chinese vehicles.

The US Commerce Department did not grant Polestar authorization to sell cars under the Connected Vehicles Rule, which restricts the import and sale of cars with connected-vehicle technology linked to China beginning with the 2027 model year.

Bluetooth, Wi-Fi, cellular connectivity and ​some satellite communications technologies are covered under the rules based on national security concerns linked to the ability of vehicles to collect sensitive ​data on American owners.

Chinese battery maker Hithium Energy Storage Technology is prioritizing localized partnerships and strategic regional manufacturing hubs to drive its overseas expansion, reports Caixin.

Speaking at the Summer Davos forum in Dalian, Hithium chairman Wu Zuyu said Chinese companies should learn from the Japanese, South Korean, German and US firms that successfully traded technology for market access in China over the past decades. “An overseas localized layout is a necessary path,” Wu said, noting that China’s massive production capacity cannot rely solely on domestic demand. 

Xiamen-based Hithium has been an early mover in establishing manufacturing bases abroad. In May 2025, the company opened a $200 million, 10-gigawatt-hour energy storage system plant in Mesquite, Texas, making it the first Chinese energy storage firm to build a factory in the United States. The company is also targeting Europe. In March, local media reported that Hithium plans to invest 400 million euros ($463 million) to build a battery plant in Spain, which is expected to begin operations in 2027.

China’s northeastern city of Changchun, home to the country’s oldest automaker ​FAW Group, has released a draft ‌plan through 2030 to revamp its decades-old auto sector, reports Reuters. The plan aims to attract electric-vehicle makers ​such as BYD and Xiaomi.

FAW group has experienced a decline in production and sales in recent years, and Changchun city plans to leverage its position as the FAW headquarters to attract partners such as Leapmotor to introduce new vehicle models.

The city is targeting high growth automakers including BYD and Xiaomi to set up northern production bases, smart vehicle R&D centres or key component projects to diversify its industrial base.