China and the World: Population Contraction Looms, Record US Arms Sale to Taiwan, MIT Professor Killed
This week we track key shifts in China’s domestic and foreign policy landscape as well as critical international developments.
China Quote 🗩
"A just cause should be pursued for the common good."
-Xi Jinping quoting a classic Confucian text
Economic Activity🏦
China tightens censorship as property slump deepens
DW reports that Beijing has ordered private data providers to stop publishing home sales figures as China’s prolonged property downturn worsens, with sales collapsing, prices falling sharply across smaller cities, and more than $18 trillion in household wealth wiped out. Once a quarter of GDP, real estate is now dragging growth, hurting banks, construction, and commodity demand, while the government avoids a broad bailout in favour of limited, targeted measures and allows prices to deflate gradually.
Chinese stocks jump as technology IPOs spark rally
Bloomberg reports that Chinese shares surged as renewed enthusiasm for technology stocks, driven by blockbuster initial public offerings, lifted market sentiment. Major indices rose sharply after GPU maker MetaX Integrated Circuits soared nearly 700% on debut, with strong turnover in state linked exchange traded funds also supporting prices, though analysts caution that the rally’s durability depends on signs of a broader economic recovery.
China stalls Panama ports sale with new ownership demands
The Wall Street Journal reports that a $22.8 billion BlackRock led deal to buy dozens of ports from Hong Kong based CK Hutchison, including two at the Panama Canal, has hit an impasse after Beijing demanded that state owned shipping giant Cosco receive a controlling stake as a condition for approval. The move complicates efforts backed by President Donald Trump to curb China’s influence over the canal and threatens to block the transaction agreed earlier this year with Mediterranean Shipping Co.
Inside China🐉
PLA seeks public tip-offs on air force procurement corruption
South China Morning Post reports that China’s military has issued a rare public call for information on irregular procurement practices within the PLA Air Force, marking the first such appeal focused on a specific service branch. The notice, posted on the PLA’s procurement platform, invites suppliers, experts and internal personnel to submit named reports as Beijing intensifies its anti-corruption drive in military equipment purchasing, an effort that has already ensnared senior officers across other branches.
China heads for historic population contraction
Axios reports that new U.S. Census Bureau projections show China’s population is set to fall from about 1.4 billion to roughly 662 million by 2100, marking the steepest national population decline in recorded history as aging and low fertility accelerate. While Asia and Europe enter long term contraction, Africa is projected to more than double its population and become the world’s demographic centre of gravity, reshaping global labour markets, economic power, and geopolitics over the next century.
China’s IVF push struggles to lift falling birth rate
Bloomberg reports that China’s effort to raise births by expanding insurance coverage for in vitro fertilisation is being undermined by limited reimbursement, high costs and a shortage of clinics, especially outside major cities. Despite nationwide approval of assisted reproductive technologies, many couples still face unaffordable treatment and uneven access, leaving IVF unable to significantly offset China’s accelerating population decline.
China’s mass reforestation reshapes national water patterns
Popular Mechanics reports that China’s planting of an estimated 78 billion trees since the early 1980s has significantly altered the country’s hydrology, increasing evaporation and transpiration and redistributing rainfall across regions. A new study finds that while more moisture is being directed towards the Tibetan Plateau, water availability has declined across eastern and north western China, areas that hold most of the population and farmland, raising concerns about long term water stress and the need to factor hydrological impacts into future reforestation policy.
Rural protests flare in China over land seizures and unpaid compensation
The Guardian reports that protests have broken out across parts of rural China as villagers and migrant workers accuse local authorities and developers of land grabs, inadequate compensation and broken resettlement promises. The unrest highlights mounting pressure in the countryside as slowing growth, weak local government finances and stalled property projects intensify disputes over land, one of the main sources of income for indebted local administrations.
International Relations🌏
US forces intercept China to Iran arms shipment at sea
The Wall Street Journal reports that US special operations forces boarded a vessel in the Indian Ocean last month and seized military related cargo being shipped from China to Iran, before allowing the ship to continue its journey. The rare maritime interdiction, carried out several hundred miles off Sri Lanka, underscores the Trump administration’s more aggressive use of at sea operations to disrupt Iranian military resupply networks.
US approves largest ever arms package for Taiwan
Financial Times reports that the US has approved an $11.1bn arms sale to Taiwan, including Himars rocket launchers, artillery, drones and Javelin missiles, marking the largest package of its kind as Taipei steps up preparations against pressure from China. The decision risks straining a recent thaw in US China ties following Donald Trump’s trade truce with Beijing, while reinforcing Washington’s push for Taiwan to boost defence spending and readiness amid intensified Chinese military activity around the island.
Trump appeals to Xi over jailed Hong Kong tycoon Jimmy Lai
BBC News reports that US President Donald Trump has urged Chinese leader Xi Jinping to consider releasing Jimmy Lai, the Hong Kong pro democracy media tycoon convicted under the city’s national security law and facing a potential life sentence. The UK government has also called for the immediate release of the 78 year old British citizen, condemning the verdict as politically motivated, while Beijing has rejected international criticism and defended the trial as lawful.
US halts deportations over risk to Uyghurs sent to China
NPR reports that US authorities have paused certain deportations after warnings that individuals, particularly Uyghurs and other Muslim minorities, could face detention, surveillance or abuse if returned to China’s Xinjiang region. The move follows pressure from human rights groups and lawmakers, who argue that deportations risk violating US and international protections given Beijing’s record of mass detention and repression in the region.
China files lawsuit after Missouri pursues COVID damages judgment
Associated Press reports that China has sued Missouri after the US state sought federal help to collect a roughly $25 billion court judgment over allegations that Beijing hoarded protective equipment early in the COVID-19 pandemic. Filed in a Wuhan court, China’s complaint demands an apology, more than $50 billion in compensation and rejects US jurisdiction, while legal experts question whether Missouri can enforce the ruling given longstanding protections for foreign governments.
Report flags China’s growing nuclear research and energy ambitions
Associated Press reports that a US congressional report warns China is rapidly expanding nuclear energy and research capabilities, blurring civilian and military lines and raising concerns about strategic competition with the United States. The assessment highlights Beijing’s investment in advanced reactors, nuclear fuel technologies and research infrastructure, arguing that tighter oversight and clearer safeguards are needed to prevent proliferation risks while China accelerates its nuclear programme.
Vietnam close to finishing fortified outposts in South China Sea
Defense News reports that Vietnam is nearing completion of a network of upgraded and militarised outposts on disputed features in the South China Sea, including extended runways, hardened shelters and improved logistics facilities. The build-up strengthens Hanoi’s ability to sustain forces and assert its claims amid intensifying regional competition, even as it seeks to avoid provoking direct confrontation with China.
Hindu man lynched, set on fire in Bangladesh amid anti-India protests
NDTV reports that a young Hindu man, Dipu Chandra Das, was mob-lynched and his body set alight in Mymensingh during violent protests sparked by the death of student leader Sharif Osman Hadi. The interim government condemned the killing and vowed legal action. The unrest has spread across cities, with attacks on media outlets and heightened security deployments.
Tech in China🖥️
China boosts AI chip output by retrofitting older equipment
Financial Times reports that Chinese firms are upgrading older ASML lithography machines to produce more advanced AI chips, a move that exposes weaknesses in US-led export controls designed to restrict Beijing’s access to cutting-edge semiconductor tools. Analysts say the workaround could help China expand domestic chip capacity even as Washington tightens technology restrictions.
CATL deploys humanoid robots on factory floors at scale
South China Morning Post reports that Chinese battery giant CATL has begun large scale deployment of humanoid robots in its manufacturing facilities, marking one of the most advanced uses of such machines in industrial production. The move reflects Beijing’s push to integrate robotics and artificial intelligence into manufacturing to offset labour shortages, boost productivity and reinforce China’s lead in advanced manufacturing technologies.
Global Risk🗺️
Journalists trapped as Bangladesh protests turn violent
NDTV reports that journalists were trapped inside media offices in Bangladesh after protesters set fire to buildings belonging to major newspapers including Prothom Alo and The Daily Star. The attacks, which occurred amid escalating political unrest, have raised fresh concerns over press freedom and the safety of journalists as violence spreads during nationwide protests.
MIT professor killed in shooting at his home
NBC News reports that an MIT professor was shot and killed at his home, prompting a homicide investigation by local authorities. Police are examining possible links to other recent violent incidents in the region as campuses heighten security, while officials have not yet released details on a suspect or motive.
Manhunt under way after Brown University shooting, possible MIT link
CBS News reports that authorities are searching for a suspect after a shooting at Brown University, with investigators examining whether the incident may be connected to a separate shooting involving the Massachusetts Institute of Technology. Police say the investigation is ongoing, campuses have increased security measures, and officials are urging the public to remain cautious as details about the suspect and any potential link continue to emerge.
US Senate clears $900bn defence bill for Trump
The New York Times reports that the US Senate has passed a $900bn defence policy bill in a 77–20 vote, authorising higher Pentagon spending than requested, a 3.8% pay rise for troops and major reforms to military procurement. The legislation advances much of President Donald Trump’s security agenda while tightening congressional oversight of overseas military operations, blocking large troop withdrawals from Europe, extending military aid to Ukraine and other allies, and rolling back diversity and climate related programmes at the Pentagon.
Trump Media backs fusion start-up in power sector push
The New York Times reports that Trump Media has struck a deal with fusion energy company TAE Technologies, marking an unusual expansion by the social media firm into advanced power generation. The investment ties a Trump linked business to long term bets on clean energy technology, even as fusion remains commercially unproven and capital intensive.
Türkiye steps up push into Somalia’s oil sector
Al-Monitor reports that Türkiye plans to begin exploratory oil and gas drilling in Somali offshore and onshore blocks in 2026, marking its most assertive move yet to secure a long term strategic foothold in the Horn of Africa. Backed by defence and energy agreements granting Türkiye exclusive exploration rights, the effort could bolster Somalia’s fragile economy but also heighten regional competition involving Gulf states, Egypt and Ethiopia, as Ankara expands its military, commercial and political influence amid persistent insecurity.
Merz puts economic competitiveness ahead of environmental rules
The Munich Eye reports that German Chancellor Friedrich Merz has called for prioritising economic growth and industrial competitiveness over stringent environmental regulations, arguing that excessive rules are weakening Germany’s industrial base. Speaking at a CSU conference, Merz also warned of ongoing security threats from Russia, reaffirmed support for Ukraine, urged stronger European defence capabilities amid a weakening US security guarantee, and signalled reforms on infrastructure, taxes, energy prices, pensions and defence to adapt Germany to a shifting geopolitical and economic landscape.
Australia’s under-16 social media ban offers rare research test case
Nature reports that Australia’s new nationwide ban on most social media use for children under 16 is being treated by researchers as a natural experiment to study impacts on mental health, social behaviour and political engagement. Scientists are tracking teenagers, parents and teachers before and after the policy takes effect, while warning that disentangling the effects of the ban from other online safety measures may be difficult and that restrictions could also disrupt positive forms of online connection and civic learning.
UK learns battlefield lessons from Ukraine but industrial gains remain limited
Defence Express reports that while Britain has trained around 60,000 Ukrainian troops under Operation Interflex, the process has delivered deeper benefits to UK forces, shaping doctrine, strategy and the 2025 Strategic Defence Review through lessons drawn from Ukraine’s battlefield experience. However, despite billions pledged for military aid, only a small share of the UK defence workforce is directly engaged in production for Ukraine, raising questions about whether Britain’s wider industrial base is fully capturing the economic and employment gains of long term defence support.
Decypher Data Dive📊
Shares of Chinese battery and power-equipment makers have surged this year, driven by rising demand from energy-intensive data centres and the global build-out of artificial intelligence. The Financial Times, reports that CATL’s shares are up about 45 per cent this year, while Sungrow Power Supply has gained roughly 130 per cent. The CSI New Energy index has risen around 38 per cent in 2025.
The chart below, rebased to early 2024 using publicly available price data, highlights the divergence between leading power-equipment stocks and the broader market.
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Data By Bhupesh
Edited By Aurko
Produced by Decypher Team in New Delhi, India
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