Australia and China must work together on green steel, Prime Minister Anthony Albanese says, but political tensions threaten to get in the way.

Mr Albanese urged industry leaders from both nations to work together in developing low-carbon steel production at a roundtable of Australian iron ore producers and Chinese steelmakers in Shanghai on Monday.

Growing trade and business ties is the focus of the prime minister’s six-day tour of China, but tensions over military build-up, human rights and foreign investment remain distractions.

Speaking to a room of leaders from Australian mining giants Rio Tinto, BHP, Fortescue and Hancock, as well as Chinese steelmakers, Mr Albanese said both countries had major stakes in developing green steel.

“We want Australian iron ore to be part of the solution when it comes to lowering emissions and we understand that China wants that too, and that was reiterated today,” Mr Albanese told reporters.

“These discussions were an important step forward between our two nations.”

It’s hard to overstate the Australian economy’s dependence on the Chinese iron ore trade.

China is by far Australia’s largest export destination and iron ore is easily the largest component.

In 2024, Australia shipped $104.8 billion worth of the ferrous metal to China – about a sixth of the total value of exports to all trading partners.

Fortescue executive chairman Andrew Forrest said a bilateral agreement between China and Australia would generate a jobs boom in green iron and steel, which he forecasts would create hundreds of thousands of new jobs.

But he acknowledged military tensions were a “distraction” in the relationship.

“To really build up the strength of the bilateral relationship you need those strong friendships, that very real element of business: trust between each other,” Dr Forrest said.

“And yes, security becomes a distraction, but for us we’re head down, tail up, strengthening that bilateral relationship in the best interests of Australian employment for every Australian.”

Security tensions bubbled to the surface at the weekend after revelations US Pentagon strategist Elbridge Colby had been pressing Australian and Japanese officials over what role they would play in a potential conflict with China over Taiwan.

It highlights the delicate balance awaiting Mr Albanese ahead of bilateral discussions with Chinese Premier Li Qiang and President Xi Jinping in Beijing on Tuesday.

The prime minister insisted he was not being distracted by the hawkish talk from his AUKUS partner, but security concerns undoubtedly cloud Australia’s economic engagement with China.

The Australian government’s plan to tear up a Chinese-owned company’s lease of Darwin Port over shifting geopolitical tensions will be broached as a point of contention in Mr Albanese’s discussions.

He insists economic co-operation can flourish despite ideological differences, but there’s no hiding the fact the two are intrinsically linked.

Chinese foreign direct investment in Australia has plummeted over the past decade amid tighter regulatory scrutiny from the federal government.

But Chinese capital will be crucial to building the capacity to produce green steel at scale.

“We, of course, as a country, depend upon foreign capital, and we welcome investment,” Mr Albanese said.

“We are a country that run an open economy.”

Before flying to Beijing, the prime minister delivered a speech to a high-level business lunch at the Peace Hotel.

Australian red meat, rock lobster and red wine were served at the lunch, three menu items that have found renewed favour in China after Beijing lifted trade sanctions on more than $20 billion worth of Australian imports.

Mr Albanese reiterated the importance of interpersonal relationships between Australian and Chinese business leaders and ongoing dialogue in maintaining positive relations.

“There is no fixed model for a stabilised relationship,” Mr Albanese said.

“Our job is to make sure that we manage our relationship so that we can contribute to regional and global peace and prosperity.”

Bitcoin has crossed the $US120,000 level for the first time, marking a milestone for the world’s largest cryptocurrency as investors bet on long-sought policy wins for the industry this week.

Bitcoin scaled a record high of $US121,207.55 ($A184,489.93) in the Asian session on Monday, before pulling back slightly to last trade 1.6 per cent higher at $US121,015.42 ($A184,197.49).

Starting on Monday, the US House of Representatives will debate a series of bills to provide the digital asset industry with the nation’s regulatory framework it has long demanded.

Those demands have resonated with US President Donald Trump, who has called himself the “crypto president” and urged policymakers to revamp rules in favour of the industry.

“It’s riding a number of tailwinds at the moment,” said IG market analyst Tony Sycamore, citing strong institutional demand, expectations of further gains and support from Trump as reasons for the bullishness.

“It’s been a very, very, strong move over the past six or seven days and it’s hard to see where it stops now; it looks like it can easily have a look at the $US125,000 ($A190,262) level,” he said.

The surge in bitcoin, which is up 29 per cent for the year so far, has sparked a broader rally across other cryptocurrencies over the past few sessions even in the face of Trump’s chaotic tariffs.

Ether, the second-largest token, scaled a more than five-month top of $US3,050.90 ($A4,643.77), while XRP and Solana gained about three per cent each.

The sector’s total market value has swelled to about $US3.78 trillion ($A5.75) trillion, according to data from CoinMarketCap.

Earlier this month, Washington declared the week of July 14 as “crypto week”, where members of Congress are set to vote on the Genius Act, the Clarity Act, and the Anti-CBDC Surveillance State Act.

The most significant bill is the Genius Act, which would create federal rules for stablecoins.

Elsewhere, prices of crypto-listed exchange-traded funds (ETFs) in Hong Kong similarly surged.

Spot bitcoin ETFs launched by China AMC, Harvest and Bosera all scaled record highs, while the three ether ETFs managed by the asset managers were up roughly two per cent each.

Australian exporters could cash in on the US market as their major competitors are slapped with higher tariffs.

Some of America’s most important trading partners have had their confidence shaken after President Donald Trump threatened a slew of increased tariffs over the weekend.

From August 1, goods from Brazil would be subject to a 50 per cent tariff – up from 10 per cent – while items from the European Union would be hit with a 30 per cent levy – up from the pre-announced 20 per cent rate.

But Australia is yet to receive notice of a new tariff rate, meaning most products sent to the US remain at the baseline 10 per cent.

“It will give us, in some sense, an unfair playing advantage,” Monash University economics lecturer Isaac Gross told AAP.

Australia and Brazil are two of the biggest beef exporters to the US, so if the South American nation’s exports have a higher tariff they will become more expensive for American consumers, which could push them towards Australian goods and increase trade.

Similarly, Australia competes with the European Union on wine exports to the US and an increased levy on alcohol from Italy or France could fuel American demand.

However, Australian exports will still be less competitive than homegrown US products, which are not subject to a tariff.

“The 10 per cent tariff will hurt us a little bit, but if the 50 per cent or the 30 per cent tariff on other companies hurts them even more, we may end up ahead,” Dr Gross said.

But all this depends on whether the US president implements his tariffs in line with his announcements.

The EU continues to press for further tariff negotiations and it is unclear whether Australia will be spared a letter from the US president.

Mr Trump has also become increasingly fickle with his tariffs and has walked them back on multiple occasions when other nations have threatened retaliatory action after the markets’ response.

This uncertainty has dragged on international trade with the US and could delay investment in the long term, Dr Gross said.

There has been no change to US tariffs on Australian goods, Treasurer Jim Chalmers said, and the government continues to engage with Mr Trump’s administration.

“Every week brings new developments, new uncertainties, and over the weekend, we saw more of that,” the treasurer told reporters in Canberra on Monday.

“We’ll work our way through the consequences of these sorts of announcements, which come from time to time.”

South Korea’s top trade envoy says it may be possible to strike an “in-principle” trade deal with the United States by an August 1 deadline, but time is short to work out a detailed package seeking exemption from punishing US tariffs.

Trade Minister Yeo Han-koo, who held high-level talks with US officials last week, said South Korea may have to make some strategic decisions over its agriculture market as part of trade negotiations with the United States, the Yonhap News Agency said.

“I believe it’s possible to reach an agreement in principle in the US tariff negotiations, and then take some time to negotiate further,” the Newsis news agency quoted Yeo as telling local media reporters.

“Twenty days are not enough to come up with a perfect treaty that contains every detail.”

“We need to make a strategic judgment in the case of the agriculture and livestock sectors,” Yeo was quoted as saying, adding “sensitive” areas may need continued protection but some aspects may be considered as part of the overall framework.

There was “considerable progress” in the discussion with US officials over co-operation in key industrial sectors as part of the trade talks, Yeo was cited as saying, but Washington needed to cut industry-specific tariffs on autos and steel.

On Sunday US President Donald Trump told reporters “South Korea wants to make a deal right now”, without elaborating what would cement a deal or speculate on a time frame for getting negotiations done.

South Korea is in a race to reach a compromise trade pact in the hope of avoiding a 25 per cent tariff slapped on its exports by Trump that is set to kick in on August 1, after a late start to negotiations with a new president voted in last month.

South Korean officials held meetings in Washington after Trump’s announcement, hoping to negotiate cuts or exemptions from import duties on steel and autos.

South Korea earned a record $US55.6 billion ($A84.6 billion) trade surplus with the US in 2024, up 25 per cent from 2023, led by rising car exports.

The accidental release of government department advice which warned Labor was not going to meet its housing target and urged them to raise taxes, has not rattled the treasurer.

Independent advice from the Treasury department, which was unintentionally sent to the ABC, reportedly contained subheadings which said the federal government’s promise to build 1.2 million homes by 2029 “will not be met” and called for “additional revenue and spending reductions” to achieve a sustainable budget.

Though he acknowledged Treasury’s advice had been sent “in error”, Treasurer Jim Chalmers said such incidents could happen from time to time.

“I’m pretty relaxed about it to be honest,” he told reporters in Canberra on Monday.

“Treasury advises governments of both political persuasions – that advice can’t be always adequately captured in the subheadings.”

A 2025 report from the National Housing Supply and Affordability Council – another independent government advice body – in May warned Labor would fall short of its goal by about 300,000 dwellings.

It followed a report in March commissioned by the Property Council of Australia showing the government needed to build another 462,000 homes to meet its 2029 target.

Asked if the government regretted putting out a housing target, Dr Chalmers said his government needed to be ambitious.

“We’d rather have a big, ambitious, difficult target and work around the clock to meet it … than to continue the approach of our predecessors, which was to build too few homes,” he said.

The government has also attempted to address its bottom line by reining in spending on the National Disability Insurance Scheme and proposing an increased tax on super balances above $3 million.

Dr Chalmers has pledged to strengthen Australia’s economy ahead of a trip to South Africa, where he will meet with his counterparts from other G20 countries as they deal with “extreme global economic uncertainty”.

Economic ties with countries like Indonesia, Japan, the UK and Germany could be strengthened as leaders discuss capital flows, supply chains, critical minerals and issues within their own communities.

But domestically, one of the key focuses of Labor’s second-term economic agenda will be to boost productivity.

The agenda of an economic reform roundtable, to be held in August, has been finalised with Reserve Bank governor Michele Bullock set to kick off day one, Productivity Commission chair Danielle Wood to lead day two and Treasury secretary Jenny Wilkinson to head day three.

Opposition Leader Sussan Ley claimed the government was “ignoring some of the very levers that matter most” in the productivity puzzle.

While Dr Chalmers acknowledged he could not invite every industry, he said there would be many opportunities for people to contribute.

New Zealand’s government has released a plan aimed at doubling its international education market, which includes relaxing rules around international students working part-time.

Education Minister Erica Stanford says with international student enrolments steadily increasing since 2023, the government wants to “supercharge that growth track” to $NZ7.2 billion ($A6.58 billion) by 2034.

“In the short term, Education New Zealand will focus its promotional efforts on markets with the highest potential for growth,” she added.

New Zealand’s international education market is currently worth $NZ3.6 billion to the economy and the government would like to double that over the next decade and wants to see international student enrolments grow from 83,700 in 2024 to 105,000 in 2027 and 119,000 by 2034.

This comes as countries including Australia look to reduce foreign students due to the impact on house prices and the impact on the university experience for domestic students.

To encourage more foreign students to come to New Zealand, the government plans to increase the number of hours that eligible international students can work to 25 hours from 20 hours and extend which foreign students are allowed to work in New Zealand while studying.

The European Union says it will extend its suspension of countermeasures to US tariffs until early August and continue to press for a negotiated settlement as US President Donald Trump’s administration demanded more concessions from trading partners.

Trump said on Saturday he would impose a 30 per cent tariff on most imports from the EU and Mexico from August 1, adding to similar warnings for other countries and leaving them less than three weeks to hammer out framework deals that could lower the threatened tariff rate.

White House Economic Adviser Kevin Hassett said on Sunday that countries’ trade deal offers so far have not satisfied Trump and “the tariffs are real” without improvements.

“The president thinks that deals need to be better,” Hassett told US broadcaster ABC.

“And to basically put a line in the sand, he sent these letters out to folks, and we’ll see how it works out.”

Ursula von der Leyen, head of the EU’s executive Commission which handles trade policy for the 27 member states, said the bloc would maintain its two-track approach: keep talking and prepare retaliatory measures.

“We have always been very clear that we prefer a negotiated solution. This remains the case, and we will use the time that we have now,” von der Leyen told a press conference, adding that the bloc would extend its halt on countermeasures until August.

Von der Leyen’s decision to resist immediate retaliatory measures points to the European Commission’s desire to avoid a spiralling tit-for-tat escalation in the trade war while there remains a chance of negotiating an improved outcome.

German Chancellor Friedrich Merz on Sunday said he was “really committed” to finding a trade solution with the US, telling German public broadcaster ARD that he will work intensively on this with von der Leyen and French President Emmanuel Macron over the next two and a half weeks.

Asked about the effects of a 30 per cent US tariff on Germany, Merz said: “If that were to happen, we would have to postpone large parts of our economic policy efforts because it would interfere with everything and hit the German export industry to the core.”

The latest salvo from Trump and the question of how to respond may test the unity of EU member states, with France appearing to take a tougher line than Germany, the bloc’s industrial powerhouse whose economy leans heavily on exports.

Macron said the Commission needed more than ever to “assert the Union’s determination to defend European interests resolutely,” and that retaliation might need to include so-called anti-coercion instruments.

German Finance Minister Lars Klingbeil said on Sunday the EU should be ready to take firm action if talks failed.

“If a fair negotiated solution does not succeed, then we must take decisive countermeasures to protect jobs and companies in Europe,” Klingbeil, also vice chancellor in the ruling coalition, told Sueddeutsche Zeitung newspaper.

Prime Minister Anthony Albanese will raise Australian concerns over Chinese steel dumping as he urges industry leaders from both nations to work together to develop low-carbon steel production methods.

At a roundtable of Australian iron ore producers and Chinese steelmakers in Shanghai on Monday, Mr Albanese will call on China to address an oversupply of steel in the global market.

Excess Chinese steel production – the result of prolonged economic stimulus and weak domestic demand – has flooded the international market in recent years, squeezing producers in places such as the US and Europe, and precipitating allegations of dumping.

Australia imposed anti-dumping duties on steel imports from China but the World Trade Organization found they were improperly applied.

Mr Albanese knows Australian miners – and government revenue streams – are vulnerable to a downturn in the iron ore price.

“As both countries co-operate to advance decarbonisation, we also need to work together to address global excess steel capacity,” he will tell the roundtable on Monday morning.

“It is in both countries’ interests to ensure a sustainable and market-driven global steel sector.”

It’s hard to overstate the Australian economy’s dependence on the Chinese iron ore trade.

China is by far Australia’s largest export destination and iron ore is by far the largest component.

In 2024, Australia shipped $104.8 billion worth of the ferrous metal to China – about a sixth of the total value of exports to all trading partners.

In addition to Chinese oversupply, the iron ore industry faces another long-term challenge – climate change.

Turning iron into steel is a highly carbon-intensive process, accounting for seven to nine per cent of global emissions.

Efforts to create green steel are under way but scalability remains a challenge.

“Steel decarbonisation presents a range of challenges,” Mr Albanese will say.

“What we need are enabling policy environments, extensive investments in research to develop new technologies and collaboration across academia, industry and government.”

With leaders from iron ore giants Rio Tinto, BHP, Fortescue and Hancock in the room, Mr Albanese will pay tribute to the green steel projects those firms have under way.

Representatives from a host of Chinese steelmakers will also be present, including Qiu Yinfu, the general manager of Shougang, which is working with Rio on developing green technologies such as low-carbon sintering and blast furnace optimisation.

Later on Monday, Mr Albanese will deliver a speech to a high-level business lunch before flying to Beijing for the next leg of his six-day tour.

Australian red meat, rock lobster and red wine will be served at the lunch – three menu items that have found renewed favour in China after Beijing lifted trade sanctions on more than $20 billion worth of Australian imports.

Mr Albanese will again reiterate the importance of interpersonal relationships between Australian and Chinese business leaders and ongoing dialogue in maintaining positive relations.

“There is no fixed model for a stabilised relationship,” he will say.

“Our job is to make sure that we manage our relationship so that we can contribute to regional and global peace and prosperity.”

SpaceX has committed $US2 billion ($A3 billion) to xAI as part of a $US5 billion equity round as Elon Musk’s artificial intelligence startup races to compete with rival OpenAI, the Wall Street Journal reports.

The investment follows xAI’s merger with X and values the combined company at $US113 billion ($A172 billion), with the Grok chatbot now powering Starlink support and eyed for future integration into Tesla’s Optimus robots, the report said.

In response to a post on X about whether Tesla could also invest in xAI, Elon Musk said on Sunday “it would be great, but subject to board and shareholder approval” – without confirming or denying the Journal report on SpaceX’s investment plans in xAI.

SpaceX, xAI and Tesla did not immediately respond to requests for comment. 

Reuters could not immediately confirm the newspaper report.

Despite recent controversies involving Grok’s responses, Musk has called it “the smartest AI in the world” and xAI continues to spend heavily on model training and infrastructure. 

Rugby league might be his preferred sport, but the prime minister’s diplomatic juggling skills were on show as he stood aside a Socceroos legend in Shanghai.

Attempts to lure Chinese tourists to Australia and promote the two nations’ people-to-people links were overshadowed by questions about Australia’s participation in a potential future conflict with the Asian superpower.

US defence official Elbridge Colby, who is leading a review into the AUKUS security pact, has been pushing allies such as Australia to clarify what roles they would play in a possible war.

News of the suggestion made for an awkward proposition for Prime Minister Anthony Albanese on Sunday, the first full day of his six-day tour of China.

As China’s ambassador to Australia Xiao Qian watched on in stony silence, Mr Albanese played a straight bat to questions, reiterating Australia’s commitment to the status quo in Taiwan while maintaining support for the US-Australia alliance.

“It’s important that we have a consistent position, which Australia has had for a long period of time,” he told reporters at the headquarters of online booking giant Trip.com.

“Our aim of investing in our capability, and as well, investing in our relationships, is about advancing peace and security in our region.”

Mr Albanese oversaw the signing of a memorandum of understanding between Trip.com and Tourism Australia, and previewed an ad campaign to air in China starring local film star Yu Shi and Ruby the Roo, an animated kangaroo voiced by Rose Byrne.

China’s burgeoning middle class, armed with deep pockets and an appetite for travel, are key to Australia’s tourism industry, spending $9.2 billion in the 12 months to March.

While China is still Australia’s second-largest visiting tourist market, numbers have yet to recover to pre-COVID-19 pandemic levels.

The dramatic economic transformation China has undergone in recent decades was plain to see from Shanghai’s historic Bund promenade, where Mr Albanese strolled with ex-Socceroo Kevin Muscat, who now manages Chinese Super League outfit Shanghai Port FC.

Shanghai’s rainy season clouds parted early for the pair on Sunday morning, making way for a suffocating tropical heat that beat down on their discussion of the impact of football in fostering the two countries’ interpersonal connections.

Looking across the Huangpu River, a forest of newly-built skyscrapers in the Pudong district – surely constructed with no small quantity of Australian iron ore – gleamed in the sunlight.

“When I first came here twice in the 1990s, the area Pudong was very different indeed,” Mr Albanese said in a meeting with local Chinese Communist Party official Chen Jining.

“There were farms where there is now a great metropolis.

“The development we can see across the river is symbolic of the extraordinary development that China has seen in recent decades, lifting literally hundreds of millions of people out of poverty and creating economic benefit both for the people of China, but also increased economic engagement with countries like Australia.”

Mr Albanese will continue to emphasise the two nations’ business and sporting links during his six-day tour of China.

A keen tennis player, the prime minister will make an announcement about extending an Australian Open wildcard tournament when he visits the southwest city of Chengdu.

Sport built important people-to-people ties, as did business co-operation, Mr Albanese said.

“One in four of Australian jobs is dependent on our exports and overwhelmingly, by far the largest destination for Australian exports is right here in China,” he said.