China This Week: Xi Hosts Business Leaders, Trump’s Military Cut Proposal, and TikTok’s U.S. Comeback
This week's Beyond the Great Wall provides an overview of key developments within China, along with insights into its foreign affairs.
China Quote 🗩
“Central state-owned enterprises are pivotal hubs in the national innovation system and pillars of China’s technological advancement,” Yuan Ye, vice-chairman of the state assets watchdog
Economic Activity🏦
Xi to Chair Symposium Attended by Jack Ma and Other Chinese Business Leaders
Reuters reports that Chinese President Xi Jinping is set to chair a rare symposium next week aimed at boosting private sector confidence. Notably, Alibaba co-founder Jack Ma is expected to attend alongside Tencent CEO Pony Ma, Xiaomi’s Lei Jun, and a Huawei executive. The meeting comes as China grapples with economic challenges and a deepening Sino-U.S. technology war, with Xi likely to urge businesses to expand domestically and internationally.
China Consumer Inflation Picks Up as Holiday Boosts Spending
Bloomberg reports that China’s consumer inflation rose for the first time since August, driven by a surge in household spending during the Lunar New Year. The Consumer Price Index (CPI) increased by 0.5% in January compared to the previous year, surpassing economists' median forecast of 0.4%. However, factory deflation persisted for the 28th consecutive month, with producer prices falling by 2.3%, indicating ongoing economic challenges despite the seasonal spending boost.
Chinese Stock Bulls Add to Record Buying Spree as Hong Kong Tech Rally Continues
Zhang Shidong and Leopold Chen write in SCMP that mainland Chinese funds have significantly increased their investments in Hong Kong stocks, spending HK$138 billion (US$17.7 billion) through Stock Connect this year. The surge, driven by excitement over DeepSeek’s AI chatbot outperforming ChatGPT, has fueled a tech rally, pushing the Hang Seng Tech Index into a bull market. Investors are also hedging against yuan depreciation by holding Hong Kong dollar-denominated assets.
China cracks down on ‘illegal’ investigations targeting private business
Xinlu Liang writes in SCMP that China’s Supreme People’s Procuratorate issued over 6,500 directives in 2024 to curb "illegal investigative actions" harming private enterprises, retracting 400 improperly filed cases. The crackdown aims to prevent profit-driven law enforcement, arbitrary inspections, and excessive fines that undermine business confidence. Authorities pledged to enhance transparency and legal protections for private businesses amid efforts to stabilise China's post-pandemic economy and counter declining investor sentiment.
Inside China🐉
New coal power plant projects in China hit the highest level in nearly 10 years, report says
The Associated Press reports in ABC News that China began construction on nearly 100 gigawatts of new coal power plant capacity in 2024, the highest in nearly a decade. Despite significant solar and wind expansion, coal remains entrenched in China’s energy mix, raising concerns about its carbon reduction commitments. The report highlights that 93% of global coal plant construction starts were in China last year, potentially undermining the country's clean energy transition and emission reduction targets.
China Opens Recruitment for ‘Planetary Defence Force’ Amid Fears of Asteroid Hitting Earth
Helen Davidson writes in The Guardian that China has launched a recruitment drive for a "planetary defence force" under the State Administration of Science, Technology and Industry for National Defence (SASTIND) as concerns grow over asteroid 2024 YR4, which has a 2.2% chance of hitting Earth in 2032. The positions require expertise in aerospace engineering and astrophysics, as well as loyalty to the Chinese Communist Party. The initiative aligns with China’s expanding space ambitions, including plans for an asteroid-deflection test in 2027. Experts note that while the risk is low, international collaboration remains crucial for planetary defence.
67,000 indicted for telecom fraud
Cao Yin writes in China Daily that over 67,000 individuals were indicted for telecom fraud in China between January and November 2024, marking a 58.5% increase year-on-year. Authorities repatriated more than 40,000 suspects linked to scams operating from northern Myanmar, with 29,000 facing prosecution. Chinese prosecutors have intensified crackdowns, targeting not only scammers but also those providing financial and technical support. Efforts to enhance public protection include safeguarding personal data and addressing financial and food safety violations.
New marriages in China crash to record low, while divorces on the rise
Nectar Gan writes in CNN that the number of new marriages in China plummeted to a record low in 2024, with only 6.1 million couples registering—down 20.5% from the previous year. Meanwhile, divorces slightly increased, despite a mandated 30-day cooling-off period. Efforts to reverse this trend, including financial incentives and marriage-promoting campaigns, have failed to counter high unemployment, rising living costs, and changing societal attitudes, particularly among educated and financially independent women.
China and the World🌏
China’s Dam Project Opens the Floodgates of Concern
Amit Ranjan and Nabeela Siddiqui write in The Hindu that China's plan to construct a massive hydroelectric dam on the Yarlung Zangbo river in Tibet raises serious concerns for India. While the project aligns with China’s goal of reducing reliance on fossil fuels and achieving carbon neutrality by 2060, it poses environmental risks and threatens downstream water flow to India and Bangladesh. The dam could disrupt the Brahmaputra River, which sustains millions in India’s northeastern states, potentially exacerbating bilateral tensions between India and China.
China lauds Trump-Putin phone call, reiterates peaceful end to Ukraine war
Riyaz ul Khaliq writes in Anadolu Agency that China welcomed the recent phone call between US President Donald Trump and Russian President Vladimir Putin, emphasising its support for a peaceful resolution to the Ukraine war. Chinese Foreign Ministry spokesman Guo Jiakun stated that Beijing encourages dialogue between major powers and reiterated its stance that negotiations are the only viable solution. Trump's call with Putin, followed by a conversation with Ukrainian President Volodymyr Zelenskyy, signals a potential diplomatic push, with discussions of a peace summit in Saudi Arabia.
Trump wants U.S., China, and Russia to cut military spending in half
Sareen Habeshian writes in Axios that U.S. President Donald Trump announced plans to meet with Chinese President Xi Jinping and Russian President Vladimir Putin to discuss cutting military spending by half and pursuing denuclearisation. Trump argued that excessive defence budgets divert resources from more productive areas, stating that the U.S., China, and Russia could all benefit from reduced military expenditures. He claimed Putin had already agreed to significant nuclear reductions and insisted such cuts would enhance global security. The proposal raises questions about its feasibility given geopolitical tensions.
Mine clearance halted in central Việt Nam due to US aid suspension
Vietnam News reports that mine clearance efforts in Quảng Bình Province have been suspended following a halt in US government funding. The suspension has impacted over 350 personnel and disrupted multiple projects, including bomb and mine detection, cluster munitions surveys, and mine risk education. In Quảng Trị, nearly 1,000 NGO employees have been affected by a US-imposed 90-day freeze on global funding, delaying critical post-war remediation efforts and UXO clearance.
Countering China’s Diplomatic Coup
The Economist reports that China has successfully strengthened its diplomatic position by rallying more countries, particularly in the Global South, to explicitly endorse its efforts to unify Taiwan with the mainland. While most nations have historically recognised China over Taiwan, many had previously advocated for a peaceful resolution or remained neutral. Over the past 18 months, however, 70 countries have shifted to a stronger pro-China stance, aligning with Beijing's position amid global political shifts, including uncertainties in U.S. foreign policy under the Trump administration.
Trump’s Climate Policy Intensifies Economic Pressure on China
Walter Russell Mead writes in The Wall Street Journal that Donald Trump’s rollback of the green agenda—exiting the Paris Agreement, scrapping EV mandates, and fast-tracking fossil fuel projects—could reshape global economic dynamics. While these moves may seem like domestic policy shifts, they put pressure on China, which has capitalised on Western climate policies to dominate industries like solar panels, wind turbines, and EV batteries. Beijing’s economic planners leveraged state coordination and subsidies to build an advantage, and Trump’s reversal threatens this strategy.
Top diplomats of Britain and China hold talks as part of efforts to rebuild ties
AP News reports that British Foreign Secretary David Lammy and Chinese Foreign Minister Wang Yi held talks in London, marking the first formal dialogue between the two nations in nearly seven years. The discussions covered economic cooperation and contentious issues such as human rights and China’s stance on Russia’s war in Ukraine. UK Prime Minister Keir Starmer briefly joined the meeting, emphasising the need for a consistent yet frank engagement with China as Britain seeks to balance economic ties with national security concerns.
Australia accuses China of ‘unsafe’ jet encounter over South China Sea
BBC reports that Australia has lodged a complaint against China after a Chinese J-16 fighter jet released flares in front of an Australian P-8A surveillance aircraft over the South China Sea. Canberra condemned the incident as an "unsafe and unprofessional interaction," while Beijing countered that the Australian jet had "intentionally intruded" into its airspace. This marks another tense encounter between the two militaries, with Australia reaffirming its right to operate in international airspace while monitoring increased Chinese naval activity near its waters.
Bumpy road for Beijing's security negotiations with Taliban
Intelligence Online reports that China's efforts to secure its interests in Afghanistan through negotiations with the Taliban are facing resistance. With rising attacks on Chinese investments and personnel, Beijing has pressured Kabul, using economic leverage to demand better security measures. However, Afghan Interior Minister Sirajuddin Haqqani has been reluctant to comply fully. The security tensions threaten China's Belt and Road projects in the region, as Beijing navigates complex diplomatic and security challenges with the Taliban regime.
China’s war games near Taiwan could be used to conceal attack, US says
Demetri Sevastopulo writes in The Financial Times that US Admiral Samuel Paparo has warned that China’s military drills near Taiwan are becoming so extensive that they could soon serve as a cover for an actual invasion. Speaking at the Honolulu Defence Forum, Paparo described China, Russia, and North Korea as a “triangle of troublemakers” and highlighted their increasing military coordination. He urged the US to accelerate weapons stockpiling and artificial intelligence-driven surveillance to counter a potential attack. Paparo also criticised delays in US military procurement, calling for urgent reforms to maintain deterrence in the Indo-Pacific.
Tesla Is Losing Ground Against Its Biggest Rival in China
Raffaele Huang and Yoko Kubota write in The Wall Street Journal that BYD is expanding its lead over Tesla in AI-powered driving technology by introducing its self-driving system, "DiPilot," across all models, including budget cars. Meanwhile, Tesla remains unable to release its latest driver-assistance software in China due to regulatory hurdles. BYD’s vast vehicle fleet provides a significant data advantage for AI training, further strengthening its market position.
TikTok returns to Apple and Google app stores in the US
BBC reports that TikTok has been reinstated on U.S. app stores after the Trump administration delayed enforcing its ban until April 5. The Chinese-owned platform was briefly unavailable as a law requiring ByteDance to divest its U.S. operations took effect. Trump, who had previously supported a ban, has since expressed willingness to find a compromise, even suggesting a joint U.S.-China ownership model. The delay has sparked renewed speculation about potential buyers, including Oracle co-founder Larry Ellison and billionaire Elon Musk.
US Private Equity-Backed Data Centres Fuel Growth of TikTok’s Chinese Owner
The Financial Times reports that US private equity firms, including Blackstone, Bain Capital, Warburg Pincus, and General Atlantic, have invested billions in Malaysian data centres housing ByteDance, the parent company of TikTok. These centres have allowed Chinese firms to access high-end Nvidia chips despite a 2023 US ban. However, new Biden-era restrictions set to take effect in May will close this loophole, preventing Chinese companies from using such data centres to develop AI models transferred back to China.
Tencent Wins $85 Million Video Copyright Case in US Court
Reuters reports that Tencent has won a US district court ruling awarding nearly $85 million in damages against Taiwan-based Unblock Tech for copyright infringement. The lawsuit accused Unblock Tech and distributors of illegally copying and distributing more than 1,500 Tencent-produced shows, including Little Days and Three Body Problem. Analysts highlight the ruling as a rare success in combating cross-border video content piracy.
Chinese Spy Balloon Was Packed With American Tech
Didi Kirsten Tatlow writes in Newsweek that a 2023 Chinese spy balloon that crossed over the U.S. contained technology from at least five American firms, raising concerns over the failure of export controls. A classified U.S. military analysis revealed that the balloon was equipped with satellite communication modules, sensors, and surveillance equipment, some of which matched a Chinese patent for high-altitude reconnaissance. The findings highlight vulnerabilities in U.S. supply chains, as components from Texas Instruments, Iridium, and other firms were found in the device, despite restrictions on dual-use exports to China.
Thyssenkrupp Warns US Tariffs Could Spur Cheap Chinese Steel Exports to Europe
Patricia Nilsson writes in The Financial Times that Thyssenkrupp has cautioned that Donald Trump’s 25% steel and aluminium tariffs may exacerbate Europe’s overcapacity issue by restricting exports while pushing more Chinese steel into the market. CFO Jens Schulte warned that Chinese producers facing US barriers may divert excess output to Europe, worsening the pricing crisis for European steelmakers already struggling with high energy costs and weak demand.
Vietnam to take Chinese loans for $8.3bn railway linking nations
Reuters reports in Nikkei Asia that Vietnam will secure loans from China to partially finance an $8.3 billion railway project linking the Vietnamese port city of Haiphong to China. Seeking to modernise its aging railway infrastructure, Hanoi has turned to Beijing for both funding and technology. The 391-kilometer railway underscores China's expanding influence in Southeast Asia’s infrastructure sector and aligns with its broader regional connectivity goals.
‘The Opec of Nickel’: Indonesia’s Control of a Critical Metal
The Financial Times reports that Indonesia has cemented its dominance in the global nickel market after its 2014 ban on raw nickel exports led to a surge in Chinese investment in local processing facilities. The country, home to the world’s largest nickel reserves, now hosts the massive Indonesia Morowali Industrial Park, controlled by China’s Tsingshan Holding Group. This shift has made Indonesia a key player in the energy transition, supplying critical nickel for electric vehicle batteries while tightening control over global supply chains, earning it the moniker "the Opec of nickel."
China’s BYD Holds Mining Rights in Brazil’s Lithium Valley
Reuters reports that Chinese EV giant BYD acquired mining rights in Brazil’s lithium-rich Jequitinhonha Valley in late 2023, signaling its deeper integration into the supply chain. The plots, located near a new BYD factory in Bahia state, position the company strategically alongside U.S.-listed Atlas Lithium. While BYD is still in the research phase, Brazil’s lithium sector has attracted global interest from the U.S., Saudi Arabia, and China, as it remains open to foreign investment without heavy state intervention.
Tech in China🖥️
Alibaba to Partner with Apple on AI Features, Sending Shares to 3-Year High
The Business Times reports that Alibaba has secured a partnership with Apple to integrate AI capabilities into iPhones in China. The deal, confirmed by Alibaba Chairman Joseph Tsai at the World Government Summit in Dubai, helps Apple navigate China's regulatory environment while addressing declining iPhone sales amid fierce competition from Huawei. Alibaba’s Hong Kong-listed shares surged up to 9.2% following the announcement. Apple has not yet commented on the deal.
Beijing Launches Satellite Internet Industrial Park, Key Laboratories
China Daily reports that Beijing has unveiled a satellite internet industrial park and granted licenses to eight key laboratories dedicated to commercial space research. The announcement was made at the Beijing Commercial Space High-quality Development Conference, held in the Beijing Economic-Technological Development Area (E-Town). The park aims to advance satellite internet projects by leveraging Beijing's aerospace expertise, while the laboratories will focus on areas such as aerospace vehicle design and satellite interconnection. E-Town currently hosts over 160 aerospace companies, including 70 high-tech firms and 16 of China's top 100 commercial space enterprises.
Chinese Scientists Develop “Precision Therapy” to Revive Lithium Batteries
Xinhua reports that Chinese scientists at Fudan University have developed a groundbreaking "precision therapy" to restore aging lithium-ion batteries, extending their lifespan significantly. The method, inspired by medical treatments, involves injecting a lithium carrier molecule (CF3SO2Li) into degraded batteries to replenish lost lithium ions. Using AI-driven molecular design, this innovation has enabled batteries to maintain near-factory performance even after 12,000 to 60,000 charge cycles. The team is now working on mass production and commercialisation with battery manufacturers.
Image of the Week📸
This combo photo shows an image of the fossilised bird Baminornis zhenghensis (above) and a skeleton diagram. Chinese scientists have unearthed the oldest short-tailed bird fossil, dating back about 150 million years, in east China's Fujian Province. This suggests that birds might have originated earlier than previously thought. The fossilised bird Baminornis zhenghensis was discovered in Zhenghe County, Fujian Province. Its short tail ends in a compound bone called the pygostyle, a feature uniquely present in modern birds. This indicates that the body structure of modern birds emerged in the Late Jurassic Period, 20 million years earlier than previously known. The study, conducted by researchers from the Institute of Vertebrate Paleontology and Paleoanthropology (IVPP) and the Fujian Institute of Geological Survey, was published in the latest issue of the journal Nature.
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