CNBC reports, "Top U.S. trade officials spoke with their Chinese counterparts Tuesday as Washington and Beijing work to iron out a trade deal. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke to Chinese Vice Premier Liu He and Commerce Minister Zhong Shan 'to continue negotiations aimed at resolving the outstanding trade disputes' between the world's two largest economies, according to a U.S. official. The official said 'both sides will continue these talks as appropriate.' China's Ministry of Commerce confirmed that the call took place in a statement issued Wednesday morning local time. The call continues a fresh round of engagement between the U.S. and China as they try to avoid widening a damaging trade war."
Bloomberg reports, "The case for Chinese policy makers to ramp up stimulus grew stronger, as tepid domestic demand and falling commodity prices increase the risk of a return to factory deflation. Growth in China's producer price index slowed to zero in June from a year earlier, the weakest reading in almost three years. Prices fell 0.3% from May. The downward trend accentuates fears of a return of deflation for manufacturing, which would erode company profits and increase debt repayment pressures. The prospect of falling prices adds to the case for the People's Bank of China to increase stimulus to the economy, with policy makers keen to keep output stable amid restarted trade talks with the U.S. The government will release gross domestic product and other data for the second quarter on July 15."
The Wall Street Journal reports, "In a top-secret operation earlier this year, Kazakh counterintelligence officers swooped in on a Soviet-era apartment block and detained a senior government adviser on charges of spying for China. Months later, the authorities did something unusual. They allowed information about the case to leak in local media, a rare instance of open push back against Beijing's growing influence in Central Asia's largest and richest country. The arrest of Konstantin Syroyezhkin—a former Soviet KGB agent accused of passing classified documents to Chinese agents, according to people with knowledge of the investigation—comes as Kazakhstan's leaders struggle to balance a hunger for Chinese investment with fears of encroachment by their giant eastern neighbor."