It has been a week of important developments on all things China. On Wednesday (June 4), US President Donald Trump called Chinese President Xi Jinping “VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH” in a social media post. Barely two days later, the leaders spoke to each other on a phone call.The direct communication matters amid the low in US-China ties, but more pressingly, in re-energising talks for a trade deal following the tariff escalation and climbdown. US Treasury Secretary Scott Bessent said last week that discussions were “stalled”, as we mentioned in our tracker, and a call could happen soon.It’s also significant given the recent Chinese export controls on rare earth minerals, which are crucial to global industries ranging from automobiles to defence. While the restrictions were announced in April, the effects are finally being felt, as companies’ stocks are petering out.Wednesday also marked the 36th anniversary of the Tiananmen Square massacre, when China’s People’s Liberation Army (PLA) cracked down on student protestors in Beijing. It is seen as a watershed moment in the story of modern China.Here is a closer look at these developments:1. Trump-Xi call, with concerns of trade talks derailingTo recap, the countries’ official representatives met in Geneva in early May, agreeing to reduce the tariffs they imposed on each other and to future trade talks.As has been the case of late with the US and China, the fragile truce soon came under threat. Trump’s Wednesday post said, “I like President Xi of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH.” Both sides also accused each other of violating the Geneva talks.A Trump-Xi call, and even a possible meeting, has been speculated since they last spoke in January. This was, however, in the relatively simpler, pre-tariff era.Story continues below this adTrump wrote on Truth Social that the “very good phone call” only included trade discussions, lasting for an hour and a half. Their trade representatives will meet soon. Xi also extended an invitation for Trump to visit China, which Trump reciprocated.On the Chinese side, the Foreign Affairs Ministry’s readout said the US had initiated the talks in Geneva. “The U.S. side should acknowledge the progress already made, and remove the negative measures taken against China,” it said. Trump spoke about the importance of their ties and said he “wants the Chinese economy to do very well,” the document stated.UPSHOT: The US-China relationship has evolved at a fast-moving pace in Trump’s second term. China has been unwilling to back down amid the US imposing tariffs, restricting immigration and blaming China for the trade deficit in their economic ties.In official statements, China has emphasised “win-win cooperation” and avoiding zero-sum games. But neither China nor the US can be seen backing down unilaterally, with strongman leaders at the helm. At the same time, the interdependence of the world’s two largest economies means neither can maintain the status quo of trade roadblocks. While a phone call undoubtedly hints at intent for resolution, its details are unknown.Story continues below this adNotably, Trump last visited China in 2017, and Xi also met Trump in Florida that year. Trump’s critics accused him of not challenging Xi’s policies while in China. It also didn’t do much for the subsequent tariff war that Trump launched some two months later.2. Rare earths shortage begins to biteTrump mentioned rare earth minerals in his post after the call with Xi, saying, “There should no longer be any questions respecting the complexity of Rare Earth products.” What that means for their availability, however, is unclear.Rare earths are 17 elements on the periodic table, including promethium (Pm), samarium (Sm), ytterbium (Yb), and yttrium (Y). All have similar chemical properties and appear silver-coloured. They are not “rare” in terms of their abundance, but are difficult to process once extracted. China has maintained a monopoly on their processing since the 1990s. It also deemed them “protected and strategic mineral” resources, and has kept its global supply dynamic based on its requirements.Rare earths’ unique magnetic and optical properties lend them to a multiplicity of uses, including making phosphors, or substances that emit luminescence, for digital displays and screens. Increasingly, REEs are being used to build powerful magnets, with uses in automobile manufacturing — power steering, electric windows, power seats, and audio speakers.Story continues below this adUPSHOT: China’s decision to restrict exports was seen in the context of its trade war with the US, but its effects are now being felt globally.Explained | China restricts exports of rare earths: What will be the impact?Reuters recently reported that some European auto parts plants have suspended output, and Mercedes-Benz is considering ways to protect against shortages. And, according to the Financial Times, EU businesses are lobbying the Chinese government to fast-track approval of rare earth export licences for “reliable” European companies.Suzuki Motors suspending the production of its Swift cars in India is also being linked to the rare earths magnets.3. China criticises Tiananmen commemorationIn an official statement on Wednesday, US Secretary of State Marco Rubio commemorated the Tiananmen Square protests of 1989. The statement spoke of “the bravery of the Chinese people who were killed as they tried to exercise their fundamental freedoms,” adding that freedom, democracy, and self-rule are “not just American principles.”Story continues below this adChinese foreign ministry spokesperson Lin Jian said Rubio’s “erroneous statements… maliciously distort historical facts… and seriously interfere in China’s internal affairs.” Domestically, the Chinese government heavily censors commemorations of the day.UPSHOT: China is a one-party authoritarian state, with one leader who has increasingly centralised power in recent years. At the same time, it is also true that factions of hardliners and comparatively liberal leaders have existed in the Communist Party since its inception in the early 20th century, and shaped its history.The Tiananmen protests led to hardliners successfully steering the party in a more conservative direction. One major driving factor for the agitations was the 1978 economic reforms unleashed by reformist leader Deng Xiaoping, which led to a greater appetite for broader reforms of the state. Another grievance was corruption, as several contracts in the newly liberalised economy were being awarded to party leaders or the people they favoured.The crackdown on the protests resulted in a more repressive state, with little tolerance for criticism or dissent. The South China Morning Post reported that Hong Kong police officers arrested two people and took away 10 others on Wednesday, as some residents brought flowers and candles to a spot for commemoration.Story continues below this ad4. China invites public comments on next five-year planThe state media website People’s Daily reported that the government has launched an online public consultation for its next five-year plan for national economic and social development. The 15th Five-Year Plan (2026-30) will be the next in the series of key strategic documents.State media agency Xinhua reported that the first Five-Year Plan (1953-57) emphasised heavy industry and industrialisation, the seventh Five-Year Plan (1986-1990) aimed to resolve basic subsistence needs, and the 14th Five-Year Plan (2021-25), launched after “China achieved the goal of building a moderately prosperous society in all respects, focused on high-quality development.”UPSHOT: The framework borrows from the Soviet model of a planned economy, similar to how India did through the Planning Commission from 1950 to 2014. The Chinese plans previously included GDP targets, but have, of late, dispensed with them.Five-year plans indicate the government’s future strategy and its own assessment of the economy. For instance, the 14th plan was formulated during the Covid-19 pandemic, and therefore stressed supply chain resilience, getting the middle class to increase its consumption, and boosting domestic demand.