China caught off guard by Maduro's capture
Beijing condemned U.S. actions in Venezuela as questions grow over China's influence in Latin America and implications for Taiwan
Welcome back to What’s Happening in China, your weekly China brief.
I hope you’ve had a good start to the new year.
And a quiet start this was not. Hours before being captured by U.S. forces in Caracas, former Venezuelan leader Nicolás Maduro hosted a Chinese delegation that included China’s Special Representative for Latin American Affairs Qiu Xiaoqi, suggesting the operation may have caught Beijing off guard. On Monday, the PRC’s Foreign Ministry spokesperson Lin Jian said China was “deeply shocked by and strongly condemns the U.S.’s blatant use of force against a sovereign state and the forcible seizure of its president.”
The U.S. intervention immediately raised questions about the sustainability of Beijing’s involvement in Latin America and whether it could embolden the PRC to accelerate plans related to Taiwan.
ChinaFile put these and other questions to a group of experts in “How Will China Respond to Maduro’s Capture?”
As this is the first issue of 2026, I’m making it available to all subscribers, free and paid. If you haven’t yet, I hope you’ll consider becoming a paid subscriber.
Let’s jump into it.
— PC
Through the Lens
In Focus
I. Trump’s “might makes right” and China’s realpolitik
Many international analysts argue that illiberal states already disregard international law, so U.S. norm-breaking has little effect on their behavior. A close reading of Chinese expert analyses and Beijing’s existing security mindset suggests otherwise.
Chinese analysts are updating their assessments of both U.S. military capabilities and, more importantly, Trump’s willingness to deploy them. The emerging conclusion is sobering: The United States may often appear a paper tiger, but its fangs can still bite. Beijing is not alarmed about any increased risk of direct U.S. attack against China. Rather, Chinese strategists believe Washington dared to execute such a bold operation in Caracas because of its overwhelming military superiority over a weaker adversary. The lesson Beijing draws is not reassuring: In an international system where major powers more openly practice the principle that “might makes right,” China must further prioritize the accumulation and readiness of hard power. As Chinese realpolitik beliefs grow more rigid, the hard power competition between China and the United States is likely to deepen rather than stabilize.
Read: The U.S. Venezuela Operation Will Harden China’s Security Calculation (Carnegie Endowment for International Peace)
Related:
What assets does China have in Venezuela, and what could happen with Maduro gone? (SCMP)
In China, a Debate About Political Power Ignites After Maduro’s Capture (The New York Times)
Trump’s Strikes on Venezuela Will Not Embolden China to Invade Taiwan (Council on Foreign Relations)
China touts its governance model as Trump tests global norms (The Straits Times)
II. China to Japan: No dual-use items for you!
Export restrictions put into place by China on Tuesday on goods bound for Japan could put established trade flows at risk, as the list of dual-use products potentially covered by the ban is wide ranging and diverse.
The move is the latest in a series of escalatory measures following remarks by Prime Minister Sanae Takaichi last year on Taiwan. In response to the comments, in which Takaichi suggested that a military response might be warranted if the island is attacked, China has encouraged its citizens to avoid travel to Japan, and it has halted imports of Japanese seafood.
Its ban on the export to Japan of dual-use items — products that have military and civilian use — is potentially far more damaging than earlier retaliatory measures.
China’s dual-use export control list, which was recently updated, features more than 800 items in 10 categories and includes not only key products, components and technologies with obvious military uses and applications — chemicals, minerals, electronics, sensors, navigation systems, software and aerospace technologies — but also a host of routine products that are more closely associated with commercial endeavors and consumer use, including high-speed cameras.
Read: China’s dual-use export ban on Japan a decisive escalation (The Japan Times)
Related:
Here’s How Japan Can Hit Back at China’s New Export Controls (Bloomberg)
China announces anti-dumping probe into Japanese chip-related chemical (NHK)
III. Did Manus comply?
China said Thursday it will investigate Meta’s $2 billion acquisition of artificial intelligence startup Manus to assess its compliance with export control laws.
Meta acquired Singapore-based Manus last month as the U.S. tech giant looks to integrate advanced automation into its consumer and enterprise products.
Terms of the acquisition were not disclosed, but the Wall Street Journal reported that the deal closed at an amount over $2 billion, according to sources familiar with the acquisition.
China’s Ministry of Commerce said it will conduct an assessment and investigation into how the acquisition complies with laws and regulations concerning export controls, technology import and export, and overseas investment, according to a statement translated by Google.
Read: Meta faces China probe over acquisition of AI agent startup Manus (CNBC)
Related: Is China’s technology export control really the only thing Manus should be worried about? (Geopolitechs)
Politics & Society
China’s ideology chief calls on propaganda officials to focus on the economy (SCMP)
Cai Qi, a member of the Politburo Standing Committee, told a national meeting of publicity department heads in Beijing on Monday that “a good start should be set” for the next five-year plan, state news agency Xinhua reported.
[…]
“We need to do our job well in media and communication, with a particular focus on the economy,” said Cai, who is responsible for ideology, culture and internet regulation.
“[We need to] respond to public sentiment and guide public opinion, as well as strengthen mainstream ideology that is self-confident, self-reliant and united,” he added.
Cai also called for tighter management of cyberspace and more efforts to communicate with the world and “tell China’s stories in a truthful, three-dimensional, comprehensive way”.
He said more emphasis was needed on upholding the Communist Party’s overall leadership and advancing the fight against corruption.
Chinese villagers shiver in winter as gas subsidies phased out (The Straits Times)
Villagers near China’s capital are facing a bitter winter, with many unable to afford gas heating after the phaseout of local subsidies intended to relieve the cost of Beijing’s campaign for cleaner air.
About two hours’ drive from Beijing, families in Hebei province are bundling up under quilts rather than switching on gas heaters, fearing they will not be able to pay the bills, Xinhua reported this week.
A villager surnamed Guo in Xingtai, in Hebei, told news outlet Yicai that using gas heaters could push his bill for this winter to at least 8,000 yuan (S$1,470), roughly one third of a farmer’s annual income in the region.
Beijing Orders Courts to Stop Redacting Judicial Identities in Online Rulings (Caixin)
China’s highest court has ordered local jurisdictions to stop redacting the names of judges and case numbers from online legal archives, intervening after a wave of secrecy made it increasingly difficult to track rulings in the world’s second-largest economy.
Documents listing judges, assistants, and clerks simply as “XXX” — or “Chen XXX” and “Li XXX” — alongside redacted case numbers have proliferated recently, sparking a domestic backlash over the opacity of a system that was once touted as a model of judicial transparency.
On the evening of Jan. 7, an official from the Supreme People’s Court’s trial management office told domestic media that hiding the identities of judicial officers violates open-justice requirements. The court has ordered immediate corrections, styling the erasures as “improper.”
Chinese again choose to seek asylum in record numbers 2025 (Safeguard Defenders)
Tentative data for the year 2025 from the UN’s High Commissioner for Refugees (UNHCR) shows the mass exodus of asylum seekers from China continues unabated and is set to either rival last year’s record-breaking number or possibly exceed it. The tentative data, to be adjusted and finalized later in 2026, estimates some 178,725 asylum seekers from China. This is a far cry from the numbers seen during Hu Jintao’s reign, when it would stay between 7,000 and 21,000 annually.
Why China’s Exploitative Labor System Constitutes a Strategic Advantage (China Labor Watch)
China’s decisive competitive advantage in global manufacturing does not lie in technology or subsidies, but in systematically weakened labor protections.
What is often described as “high efficiency” is, in reality, an institutional arrangement that allows more labor to be extracted at lower cost.
The strength of “Made in China” is not driven by more advanced machinery, but by a system in which workers are forced to bear greater costs while enjoying fewer rights.
China detains six underground church members in latest crackdown, church tells members (The Straits Times)
Six members of an influential underground Protestant church in China were detained by police this week, according to a church statement to members seen by Reuters and non-governmental organisations, in the latest crackdown on Chinese Christians.
The raid follows waves of large-scale detentions of unregistered Christians in recent months, as Beijing steps up scrutiny of churches that operate outside the control of the ruling Communist Party.
Beijing has long required religious groups to be registered. Under President Xi Jinping, the government has tightened control over all religions and in recent years increased crackdowns and regulations targeting unregistered organisations, making it even harder for them to raise funds, preach online and hold in-person meetings.
‘Not about condoms’: Chinese shrug off new contraceptive tax (HKFP)
The government has sought to boost China’s flagging birth rate, concerned about the rapidly ageing and shrinking population, as well as record low marriage rates.
But young people in Beijing told AFP that taxing contraceptives will not address the root issues they say are stopping people from having children.
“The immense pressure on young people in China today — from employment to daily life — has absolutely nothing to do with condoms,” a resident in her thirties, who wanted to be known only as Jessica, told AFP.
Jessica said there was a notable class divide in Chinese society and many people felt their future was too uncertain to start a family.
China’s Youth Mental Health Crisis Hits High School Girls Hardest (Caixin)
Researchers found that while academic pressure is a factor, it is often internal rather than external. The study suggests that self-imposed expectations and peer comparisons weigh heavier on students than pressure from parents or teachers.
However, interpersonal relationships and family dynamics proved to be even more critical determinants, particularly for girls.
Among the high-risk female demographic, more than 55% reported severe psychological stress stemming from difficulties in social interaction. Furthermore, the study identified a strong correlation between family dysfunction and mental health risks. In the extreme risk group, 90% of students came from families with identified functional issues across various dimensions.
Digital habits also played a significant role. The report highlighted a high prevalence of internet addiction among vulnerable groups, with nearly 90% of students in the extreme risk category exhibiting signs of dependency on online activities.
The Making and Unmaking of China’s Backpacker Hostels (Sixth Tone)
As China’s early independent travelers age and costs climb, the youth hostel model that once offered cheap beds and shared life is thinning out, leaving scattered holdouts and fading memories.
CDT 2025 Year-End Roundup: Sensitive Words (China Digital Times)
New nicknames for Xi Jinping: i in ing / she dripping / shejumping / skipping / 羽哥 Yǔ gē, Brother Yu / 长生不老 chángshēng bùlǎo, grow old without aging / 150岁 150 suì, 150 years old / 习近逼 Xí Jìnbī, Xi Jinbi / 新加坡 Xīnjiāpō, Singapore / etc.
Hong Kong & Macao
Hong Kong Cracks Down on Construction Corruption Following Deadly Fire (Caixin)
Hong Kong authorities have stepped in to take control of a residential complex devastated by a deadly fire and launched a broad crackdown on syndicate-linked corruption in the building-maintenance sector.
The moves come as the city grapples with the aftermath of a blaze at Tai Po’s Hong Fuk Court late last year that killed 161 people. On Tuesday, the Lands Tribunal ordered the dissolution of the estate’s owners’ corporation management committee, appointing Hop On Management Co. Ltd., a subsidiary of Chinachem Group, to take over the complex’s affairs.
HK man remanded into custody pending case over ‘seditious’ Facebook posts (HKFP)
Chong Wai-man, 61, is accused of knowingly publishing seditious content on Facebook between March 2024 and November 2025. According to local media reports, citing unnamed sources, Chong is an active member of Falun Gong.
Taiwan
Trump says Venezuela does not give China a Taiwan precedent, but ‘it’s up to’ Xi (The Japan Times)
U.S. President Donald Trump said “it’s up to” Chinese President Xi Jinping what China does on Taiwan, but that he would be “very unhappy” with a change in the status quo, according to an interview the New York Times published on Thursday.
“(Xi) considers it to be a part of China, and that’s up to him what he’s going to be doing,” Trump told the newspaper on Wednesday.
“But I’ve expressed to him that I would be very unhappy if he did that, and I don’t think he’ll do that. I hope he doesn’t do that.”
China would suffer 100,000 fatalities in Taiwan invasion: Report (Focus Taiwan)
China could sustain up to 100,000 military fatalities if it invaded Taiwan through amphibious landings, resulting in its ultimate retreat, but it would likely gain control over Taiwan’s offshore Kinmen and Matsu islands, according to a report published Monday by an American think tank.
The report, titled “If China Attacks Taiwan,” published by the German Marshall Fund, which is partially funded by the United States government, sought to predict the consequences China would suffer if it pursued military action against Taiwan, in the event of a “major war” and a “minor conflict.”
If China Attacks Taiwan (German Marshall Fund of the United States)
The centrality of Xi’s risk calculus to understanding future PRC decision-making about potential actions against Taiwan demands deeper investigation than has taken place so far. This report seeks to fill this research gap by examining how use of force against Taiwan would impact the PRC in four key areas: its economy, its military capabilities, its social stability, and international costs. Each issue set is evaluated in a separate paper, although all four are interrelated, a factor that the report’s conclusion addresses. Logan Wright and Charlie Vest assess potential
implications for the PRC economy. Joel Wuthnow analyzes the possible impact on the Chinese military. Sheena Chestnut Greitens and Jake Rinaldi consider the potential risks for social stability. Zack Cooper examines the likely international responses and costs.
Taiwan becomes ‘super-aged society’ in 2025, data shows (The Straits Times)
Taiwan has become a “super-aged society” for the first time, with 20 per cent of its shrinking population aged 65 or older in 2025, government data showed on Jan 9.
The island of more than 23 million people faces a looming demographic challenge, with its population falling overall as well as ageing.
There were 4,673,155 people aged 65 or older in Taiwan in 2025, or 20.06 per cent of the population, according to the interior ministry.
Taiwan exports to US overtake those to China on AI tech demand (Nikkei Asia)
Taiwan’s exports to the U.S. exceeded its exports to China, including Hong Kong, for the first time in 26 years in 2025, new data shows, partly on demand for high-tech products propelled by the artificial intelligence boom, creating worries that the Trump administration may apply more tariff pressure as the Taiwanese trade surplus with America widens.
Taiwan’s exports to the U.S. rose 78% on the year to $198.2 billion, surpassing its $170.4 billion in exports to China and making the U.S. the island’s top export destination for the first time since 1999. The data, released here Friday by the Ministry of Finance, covers goods trade only.
World
Asia & Pacific
Can China and South Korea reset complex ties after Xi-Lee summit? (Al Jazeera)
For all of the apparent bonhomie on display in Beijing, South Korea must maintain a tricky balance, analysts said.
The US continues to deepen its military presence in the Asia Pacific, strengthening ties with countries including South Korea, Japan and the Philippines, while conducting joint exercises near the South China Sea, where Chinese territorial claims have been contested for decades.
South Korea hosts the largest US military base in Asia with roughly 28,500 soldiers stationed there.
Richey from HUFS said: “Lee will ultimately privilege the relationship with the US more than China because he has no choice – neither as a matter of international relations nor domestically, where China is very unpopular.”
Chinese President Xi Jinping urges Seoul to be ‘patient’ over North Korean nuclear talks (SCMP)
Chinese President Xi Jinping has called for “patience” over North Korea’s nuclear programme, the South’s President Lee Jae Myung said on Wednesday.
Speaking during a visit to Shanghai, Lee said he had asked Xi to act as a “mediator for peace” on the Korean peninsula, including on the nuclear issue.
He said all channels between the North and South had been blocked and there was “zero trust” between the two sides.
“President Xi noted the efforts until now and said patience is needed,” Lee said.
Thailand-Cambodia ceasefire ‘gradually’ being implemented, says China (Reuters)
The agreement between Thailand and Cambodia on a ceasefire is being “gradually” implemented, the Chinese foreign ministry said on Monday.
China hopes both sides will ensure a “comprehensive” and “lasting” ceasefire, said ministry spokesperson Lin Jian said at a regular news conference.
Thailand has returned 18 soldiers to Cambodia, Lin also said.
Thailand and Cambodia agreed a second ceasefire at the end of December, ending weeks of border clashes that amounted to the worst fighting in years between the Southeast Asian neighbours.
Alleged cybercrime kingpin arrested and extradited from Cambodia to China (CNN)
A prominent tycoon wanted by United States federal prosecutors for allegedly running one of Asia’s largest transnational criminal networks has been arrested and extradited to China, Cambodian authorities and Chinese state media said.
Chen Zhi, 38, a national of China and Cambodia, was extradited on Tuesday after a months-long investigation by the two countries, Cambodia’s Interior Ministry said in a statement a day later. Chen’s Cambodian citizenship had been revoked, the ministry added.
The Rise and Fall of Chen Zhi (Cambodia: Rain and Dust)
I worked with several highly professional journalists and researchers, We have pieced together the basic path of Chen Zhi’s rise to power and and his eventual acquisition of wealth and influence.
Before this, although he was the head of the largest online scam syndicate in Cambodia and even Southeast Asia, Chen Zhi and the Prince Group were shrouded in mystery, Now we have a general understanding of their history and structure.
China calls for joint counter-terrorism efforts with Pakistan (Reuters)
China is willing to intensify cooperation with Pakistan in fighting terrorism and telecom crime, Wang Xiaohong, China’s public security minister, said in a meeting with Pakistan’s interior and counter-narcotics minister in Beijing on Wednesday.
Efforts should be made to “effectively address various risks and challenges, and jointly safeguard the national security and social stability of both countries,” Wang said, according to a statement released by his ministry.
Militants in Pakistan have repeatedly attacked Chinese nationals working on Beijing-funded multi-billion-dollar infrastructure projects in the South Asian country. The attacks have become a major source of tension in recent years.
The two sides agreed to establish a quarterly joint security working group and hold annual meetings between interior ministers, Pakistan’s interior ministry said in a separate statement on Thursday.
Beijing’s view of China–India relations (Lowy Institute)
[…] Beijing exercises significant leverage over the Indian economy as a leading trade partner. While China recently lifted restrictions on exports of rare earths, fertilisers, and tunnel boring equipment to India, it continues to employ coercive economic power elsewhere, such as limiting Chinese workers’ travel to India in strategically important sectors . These actions show Beijing can undermine New Delhi’s ambitions to be a global manufacturing hub.
India now faces a superpower that is both its leading economic partner and its most significant security threat. Navigating this challenge will require a far more comprehensive, whole-of-government approach than employed so far.
China’s malign influence in Myanmar’s sham elections (Nikkei Asia)
China’s dominance in Myanmar is a profoundly malign influence for the region and the world. Its exploitation of rare earth mining has resulted in toxic pollution of rivers not only in Myanmar but in neighboring Thailand. The role of Chinese organized crime syndicates in running scam centers, drug trafficking and human trafficking is a threat to regional and global security. Its patronage of the sham elections and provision of arms, jets and fuel makes it an accomplice to the military’s atrocities. And its ambition to control the Bay of Bengal make its role in Myanmar a geopolitical threat.
Americas
China: What Ousting of Venezuela’s Maduro Means for Taiwan, Oil Imports (Bloomberg)
China became a key lender to Venezuela in 2007, during the regime of late President Hugo Chavez, when it first provided funds for infrastructure and oil projects. China’s support filled a vacuum left by the decades-long estrangement between the US and Venezuela. Areas of collaboration included highways, bridges, power plants and food processing factories, although many were never finished or are no longer in use.
Available public data suggests that China lent upwards of $60 billion in oil-backed loans through state-run banks until 2015, reaching a level of financial support unmatched elsewhere in Latin America. Independent estimates suggest roughly 80% of this amount has been paid back, with the outstanding debt totaling around $12 billion, according to think tank Beyond The Horizon.
Following Maduro’s ouster, China’s top financial regulator asked lenders to report their exposure to Venezuela, Bloomberg reported. The directive underscores growing concerns about potential shocks to China’s banking sector as geopolitical risks intensify.
China hacked email systems of US congressional committee staff (Financial Times)
China has hacked the emails used by congressional staff on powerful committees in the US House of Representatives, as part of a massive cyber espionage campaign known as Salt Typhoon.
Chinese intelligence accessed email systems used by some staffers on the House China committee in addition to aides on the foreign affairs committee, intelligence committee and armed services committee, according to people familiar with the attack. The intrusions were detected in December.
The attacks are the latest element of an ongoing cyber campaign against US communication networks by the Ministry of State Security, China’s intelligence service. One person familiar with the attack said it was unclear if the MSS had accessed lawmakers’ emails.
China buys more US soybeans, total purchases approach 10 million tons (Reuters)
China’s state stockpiler Sinograin bought 10 U.S. soybean cargoes this week, three traders told Reuters on Tuesday, as the world’s top buyer continues purchasing from the United States following a late October trade truce.
The cargoes, totalling around 600,000 metric tons, are for shipment between March and May, the traders said, which is the peak shipping season for rival supplier Brazil.
China’s total purchases from the latest U.S. crop were now estimated at 8.5 million to nearly 10 million tons, according to traders and analysts, representing up to 80% of the 12 million metric tons that U.S. Treasury Secretary Scott Bessent said China pledged to buy by the end of February.
China played big role in reducing opioid deaths, research suggests (The Washington Post)
The research, published Thursday in the journal Science, adds to debates among government officials, public health researchers and addiction experts over the complex reasons for the precipitous drop in deaths.
They have also pointed to billions spent on addiction treatment, the overdose reversal drug naloxone and law enforcement actions that disrupted traffickers domestically and abroad. Researchers in the Science paper stressed that those factors have been crucial in saving lives but emphasized the importance of efforts to prevent fentanyl from even being manufactured.
In suggesting a major disruption in the fentanyl trade “possibly tied to Chinese government actions,” researchers also analyzed death trends in Canada, the purity of seized fentanyl and online posts about shortages of the drugs.
“This demonstrates how influential China can be and how much they can help us — or hurt us,” said Keith Humphreys, a co-author of the paper and former White House drug policy adviser under President Barack Obama.
Canada’s Carney to meet Xi in China, as Trump tariffs hurt US ties (SCMP)
Canadian Prime Minister Mark Carney will make an official visit to China next week as his government tries to rebuild relations with the Asian superpower and reduce Canada’s economic reliance on the US.
Carney is set to meet with Chinese President Xi Jinping during the visit and will have discussions on trade, energy, agriculture and international security, his office said Wednesday.
It will be the first trip to China by a Canadian prime minister in nearly a decade, after a diplomatic row was sparked by Canada’s 2018 arrest of Huawei Technologies executive Meng Wanzhou on a US extradition warrant.
Shortly after, China detained two Canadians, Michael Kovrig and Michael Spavor, and held them until a deal to release Meng was reached with US prosecutors in 2021.
Small majority of Canadians want more trade with China: Ipsos poll (Global News)
As Prime Minister Mark Carney prepares to travel to China and seeks to restore trade and diplomatic ties, a small majority of Canadians say they support more trade with Beijing, a new poll suggests.
The Ipsos poll conducted exclusively for Global News, released Saturday, found that 54 per cent expressed support for closer trade ties and economic agreements with China.
Michael Kovrig: Canada should be cautious in China meetings (CTV News)
A former Canadian diplomat previously detained in China for nearly three years says Prime Minister Mark Carney’s upcoming visit to China is an important diplomatic move but warns that Canadian negotiators need to be cautious about Beijing’s ultimate motives.
“China is a very complicated challenge for Canada, even more so now, given all the challenges we have in dealing with the United States,” Michael Kovrig told CTV News Channel on Thursday.
“It takes really deft diplomacy to chart a course between those two giants.”
Europe
China seeks to enhance ties with Ireland to boost relations with EU (Reuters)
China is keen on expanding economic and trade cooperation with Ireland while aiming for mutually beneficial results, Chinese President Xi Jinping told the Irish prime minister on Monday, positioning stronger bilateral ties as a way to also boost relations with the European Union.
Xi emphasised mutual respect and achieving win-win outcomes as “valuable experiences” for long-term and stable development of China-Ireland ties in his opening remarks at a meeting with Prime Minister Micheal Martin at the Great Hall of the People, a media pool report showed.
China has shown growing interest in engaging with European Union countries individually as ties with Brussels remain frosty. Beijing has also treated bilateral meetings as a means for conveying its views on relations with the EU.
Watching China in Europe — January 2026 (Noah Barkin for the German Marshall Fund of the United States)
Beijing ended 2025 by announcing big tariffs on EU dairy imports and safeguard measures on imported beef. It is crying foul about the Carbon Border Adjustment Mechanism (CBAM) and seems likely to challenge the EU measure at the WTO. Senior Chinese officials have been telling visitors in recent months that they have little interest in dealing with the Commission anymore and will focus their energy on EU member states. “It is very worrying how dismissive they are of EU institutions,” said a French diplomat who met with Chinese officials in Beijing late last year. In a world where Beijing and Washington are seeking to intimidate, coerce, and divide the EU, it will be more essential than ever for European capitals to stick together. “No autocrat likes to see a united Europe, whether it’s a Chinese, American, or Russian autocrat,” the European executive said.
China Threatens EU After Carbon Border Tax Takes Effect (Caixin)
Beijing has vowed to take “all necessary measures” after the European Union’s carbon border tax fully took effect, a move that analysts said could significantly raise costs for Chinese exports such as steel and threaten their competitiveness in Europe.
The Carbon Border Adjustment Mechanism (CBAM), which fully entered into force on Thursday following a two-year transitional phase, requires importers of steel, aluminum, cement, fertilizers, electricity and hydrogen to purchase certificates to cover the carbon emissions embedded in their products. The mechanism is designed to force importers to pay the difference between the carbon price in the country of production and that in the EU, aiming to prevent “carbon leakage,” such as when companies based in the EU could move carbon-intensive production abroad to take advantage of lax standards.
Dutch court to hear arguments on Nexperia investigation on January 14 (Reuters)
A Dutch court will hold a hearing on January 14 to hear arguments over whether it should formally investigate alleged mismanagement at computer chip maker Nexperia, a court spokesperson said on Monday.
The hearing marks the first public airing of a dispute that has disrupted supply of basic chips to the automotive industry.
Bosses courted to join PM’s China trip as embassy verdict looms (Sky News)
Sky News understands that officials have begun contacting corporate executives to gauge their appetite to join the prime minister on a trip slated to take place towards the end of the month.
The date of the visit has yet to be specified, but is expected after the World Economic Forum in Davos concludes on 23 January.
A number of business leaders who spoke to Sky News have expressed doubt that the trip will take place at all unless the embassy is approved.
Sub-Saharan Africa
China’s top diplomat tours Africa with focus on strategic trade routes (Reuters)
China’s top diplomat began his annual New Year tour of Africa on Wednesday, focusing on strategic trade access across eastern and southern Africa as Beijing seeks to secure key shipping routes and resource supply lines.
Foreign Minister Wang Yi will travel to Ethiopia, Africa’s fastest‑growing large economy; Somalia, a Horn of Africa state offering access to key global shipping lanes; Tanzania, a logistics hub linking minerals‑rich central Africa to the Indian Ocean; and Lesotho, a small southern African economy squeezed by U.S. trade measures. His trip this year runs until January 12.
Beijing aims to highlight countries it views as model partners of President Xi Jinping’s flagship “Belt and Road” infrastructure programme and to expand export markets, particularly in young, increasingly affluent economies such as Ethiopia, where the IMF forecasts growth of 7.2% this year.
China, the world’s largest bilateral lender, faces growing competition from the European Union to finance African infrastructure, as countries hit by pandemic‑era debt strains now seek investment over loans.
“The real litmus test for 2026 isn’t just the arrival of Chinese investment, but the ‘Africanisation’ of that investment. As Wang Yi visits hubs like Ethiopia and Tanzania, the conversation must move beyond just building roads to building factories,” said Judith Mwai, policy analyst at Development Reimagined, an Africa-focussed consultancy.
China’s top diplomat postpones visit to Somalia, arrives in Tanzania (The Straits Times)
China’s top diplomat postponed what would have been a historic visit to Somalia, part of a tour of Africa aimed at bolstering strategic trade, the East African nation’s foreign affairs ministry said on Friday.
Wang Yi’s planned visit would have been the first by a Chinese foreign minister since the 1980s.
Global Institutions & Multilateral Relations
China, Russia and Iran send ships to South Africa ahead of naval drills (Financial Times)
Chinese, Russian and Iranian vessels have sailed into a South African port ahead of week-long naval exercises that follow a surge in tensions over US military operations in Venezuela and the Atlantic.
The South African National Defence Force in a statement said the planned exercises starting on Friday — dubbed Will for Peace 2026 — would involve “Brics Plus” nations. Beijing’s defence ministry said China and Russia would participate alongside South Africa.
Iran’s largest naval vessel, the Makran, a converted merchant ship previously called the Persian Gulf, was also this week observed sailing into False Bay, close to the naval port of Simon’s Town in South Africa’s Western Cape province.
Business, Economy & Finance
China inflation hits near three-year high in December as full-year CPI misses target (CNBC)
China’s consumer inflation accelerated in December to the fastest pace in nearly three years as spending picked up ahead of the New Year holiday, while factory-gate deflation remained entrenched, signaling that underlying demand stayed weak.
Consumer prices rose 0.8% from a year earlier, their highest level since February 2023, according to data from the National Bureau of Statistics on Friday. The improvement followed a 0.7% climb in November and matched the economists’ expectations in a Reuters poll.
China’s Housing Slump Deepens as New-Home Sales Fall to Pre-2010 Levels (Caixin)
China’s property market slump deepened in 2025, with new-home sales shrinking to levels not seen before 2010 and falling by roughly half from their 2021 peak, according to an influential industry analyst.
Total sales area for new commercial properties in 2025 was approximately 890 million square meters, a year-on-year drop of about 9%, while sales value fell approximately 13% to 8.4 trillion yuan ($1.2 trillion), said Ding Zuyu, co-president of real estate consultancy China Real Estate Information Corp. (CRIC), at an annual conference on Wednesday.
China’s Residential Land Sales Revenue Slumps 65% From Peak as State Backers Retreat (Caixin)
China’s revenue from residential land sales fell about 65% in 2025 from its 2020 peak, as a prolonged property downturn forced even state-backed investment vehicles to scale back.
Data from the China Index Academy show that while the rate of decline narrowed slightly from the previous year, the contraction remains severe. The total planned gross floor area for all types of land sold across 300 cities fell 10.4% year-on-year to 2.46 billion square meters. Residential land transactions specifically dropped 13.6% to 620 million square meters.
The extended slump highlights the deepening fiscal strain on regional authorities, who have traditionally relied on selling land to fund infrastructure and service debt, as the local government financing vehicles (LGFVs) that once supported the market face their own liquidity pressures.
According to the Ministry of Finance, revenue from state-owned land use rights transfers fell 10.7% year-on-year to roughly 2.91 trillion yuan ($416 billion) in the first 11 months of 2025. This shortfall weighed on local government fund budget revenue, which dropped 5.5% to approximately 3.63 trillion yuan over the same period.
China built houses fast for decades. Why is ‘good housing’ now the new priority? (CNA)
Analysts said the push for “good housing” is unlikely to end China’s property downturn on its own, but may help stabilise expectations and restore trust in top-tier cities over time.
Tian said China’s housing market is entering a phase more typical of mature Asian economies, where most urban households already own homes and demand is increasingly driven by upgrades rather than first-time purchases.
A 2019 survey by the People’s Bank of China found that 96 per cent of urban households in China owned their homes, far higher than in many advanced economies.
“In such an environment, simply building more units or loosening credit is unlikely to generate sustainable demand,” Tian said.
China Vanke Preps Restructuring Plan in Move Toward Default (Bloomberg)
China Vanke Co. is preparing a debt restructuring plan at the request of authorities, people familiar with the matter said, pushing one of the country’s largest real estate developers closer to default.
Vanke, one of the few major Chinese property companies to avoid a debt failure so far, was recently asked by authorities to accelerate its overhaul and submit the plan as soon as possible, according to the people, who asked not to be identified discussing private matters. Normally a restructuring would lead to suspension of debt payments and result in a default.
China Vanke wins nod from banks to defer interest payments, sources say (Reuters)
China Vanke has struck a deal with domestic banks to defer loan interest payments to September, two sources with knowledge of the matter said, as the state-backed developer scrambles to avoid a default in the crisis-hit property sector.
The lenders, including Bank of China, have agreed to allow cash-strapped Vanke to make annual interest payments instead of quarterly, and defer all such dues in the coming months to September, said the sources.
The new payment arrangement comes after the developer missed a quarterly loan interest payment due last month, the sources said. It was coordinated by the State-owned Assets Supervision and Administration Commission of Shenzhen Municipal People’s Government (Shenzhen SASAC), one of the sources added.
Analysis: China’s Deposit Maturity Wave Puts Household Money to the Test (Caixin)
Estimates suggest that between 30 trillion yuan ($4.3 trillion) and 60 trillion yuan in two-year and longer-term fixed deposits will come due this year, many of which were placed after 2020, when market volatility and the pandemic drove households toward precautionary savings. With deposit rates now at low levels, the scale and timing of these maturities have become a key focus for markets.
Banks have cut deposit rates in multiple rounds since 2022, widening the gap between rates on maturing deposits and current offers. That repricing is expected to accelerate “deposit migration,” as households reassess where to park their savings.
Analysts caution against assuming a rush into equities. Weak consumption appetite and lingering strains in the property market suggest that redeployed funds are more likely to favor relatively conservative options, such as insurance products and bank wealth management products, rather than riskier assets, they say.
China Offers Subsidized Loans to Small Businesses in New Stimulus Push (Caixin)
China unveiled a new package of fiscal and financial measures aimed at jumpstarting domestic demand, including — for the first time — nationwide interest subsidies on loans to small, midsize and micro enterprises.
The policy suite, announced after a State Council meeting chaired by Premier Li Qiang on Friday, underscores Beijing’s push to stimulate sluggish spending and business activity. The measures are designed to lower financing costs for private businesses and strengthen household consumption.
To encourage private investment, the government will roll out loan interest subsidies for smaller firms, set up a dedicated guarantee program for private investment, and establish a risk-sharing mechanism for bonds issued by private companies, according to an official readout.
China to Cut Export Tax Rebates to Ease Global Trade Tensions (Bloomberg)
China will cancel or reduce tax rebates on hundreds of products as Beijing seeks to reassure trade partners concerned about surging Chinese exports.
Starting April 1, the Chinese government will remove value-added tax rebates for 249 products, including solar cells, ceramic roof tiles and lithium hexafluorophosphate, the Ministry of Finance said in a statement Friday. The rebate rates on 22 battery-related goods, such as lithium-ion batteries, will be lowered to 6% from 9%, with complete removal planned from Jan. 1 2027, it added.
China’s economy is heading for a rough 2026 (ThinkChina)
China’s macroeconomic outlook appears challenging heading into early 2026. Cyclical factors, such as expiring policy support and a high base, will weigh heavily on economic growth, while structural factors, including the housing recession, remain in play.
The base case for 2026 is that growth will look quite weak in the early months, forcing Beijing to launch more pro-growth measures in the spring, which should help lift growth in the second quarter (Q2) and beyond.
Chinese car exports set to jump as domestic sales cool (Financial Times)
China’s auto exports will expand by as much as 25 per cent to a record of more than 7mn this year, according to analyst and industry association estimates, as carmakers try to offset collapsing domestic sales of petrol cars and slowing electric vehicle growth.
Chinese and foreign carmakers including Volkswagen and Hyundai are repurposing their factories towards more lucrative export markets, in a strategic shift that puts pressure on manufacturers outside China.
Internal combustion engine (ICE) exports from China are expected to rise 4 per cent to 3.4mn this year, while electric vehicle shipments will surge more than 50 per cent to 3.7mn, according to China auto analysts at UBS. The analysts forecast Chinese exports will increase to 9.4mn by 2030, double the amount shipped in 2024.
Shanghai steps up oversight of delayed payment practices hurting suppliers (SCMP)
Shanghai, mainland China’s commercial and financial hub, has pledged to step up policing its manufacturing sectors to curb prolonged payment cycles that affect thousands of supply-chain vendors.
Gu Jun, deputy secretary general of the municipal government and director of the city’s development and reform commission, told a press conference on Thursday that a task force had been set up to ensure money owed to vendors would be paid promptly.
“Supervision will be strengthened to avoid delayed payments,” he said. “We will guide state-owned businesses to properly handle their debt repayments as they fine-tune their supply-chain management.”
China Securities Regulator Sets Out Coordinated Financial Fraud Crackdown (Caixin)
China’s top securities regulator has set out a coordinated crackdown on financial fraud, convening a high-level meeting with law enforcement, judicial and financial agencies as Beijing seeks to shore up investor confidence.
The meeting, chaired on Monday by China Securities Regulatory Commission (CSRC) Chairman Wu Qing, included officials from the Supreme People’s Court, the Ministry of Public Security, the People’s Bank of China and the Ministry of Finance. Authorities pledged closer coordination across administrative, criminal and civil channels to punish market misconduct.
China Vows to Guarantee Forex Supply, Guard Against External Shocks (Caixin)
China’s foreign exchange regulator has pledged to ensure the currency needs of businesses and individuals are met while bolstering the country’s defenses against external financial shocks, setting out its strategic priorities for 2026.
The State Administration of Foreign Exchange, or SAFE, laid out its 2026 work agenda during its annual work conference held on Jan. 5 to 6 in Beijing. The meeting marks the start of policy implementation under China’s 15th Five-Year Plan.
China Touts Hainan, Its Duty-Free Island, Amid $1 Trillion Trade Surplus (The New York Times)
“There is no sign that Hainan is a forerunner for a broader and more systematic opening up of the national economy,” said Richard McGregor, a senior fellow for East Asia at the Lowy Institute, an Australian research center. “At a time of record trade surpluses,” he added, Hainan’s new role as a free trade entrepôt “has a strong whiff of bait and switch about it in political and P.R. terms.”
Most foreign goods can now flow freely into Hainan, whose 10 million people account for less than 1 percent of China’s total population. But those imports are not allowed to leave the island for other parts of the country unless stringent conditions are met.
The combination of policies is meant to prevent the tariff-free imports to Hainan from seeping into other parts of the country, where high tariffs remain in force.
That China has no plans to abandon its protectionist trade policies was made clear a few days after the Hainan Free Trade Port began working on Dec. 18: The commerce ministry in Beijing imposed tariffs of up to 42.7 percent on dairy imports to China from Europe.
China to Grow High-Speed Rail Network to 60,000 Km by 2030 (Yicai)
China’s high-speed railroad network, which is the largest in the world, will expand by about 10,000 kilometers over the next five years to 60,000 km.
The overall railroad network will reach around 180,000 km by 2030, including 60,000 km of high-speed rails, China State Railway Group said in its annual work conference yesterday. The double-track rate will top 64 percent, while the electrification rate will reach 78 percent, it added.
Furniture retailer Ikea to close 7 stores in China amid property market slump (SCMP)
Ikea will close seven stores in mainland China, as the multinational furniture retailer grapples with the country’s weak property market and sluggish consumer spending, which have dampened demand for its goods.
Following a comprehensive review, Ikea China said the seven stores would cease operations from February 2. These are located in Shanghai’s suburban Baoshan district, Guangzhou, Tianjin, Nantong and Xuzhou in eastern Jiangsu province, Ningbo in eastern Zhejiang province and Harbin in northeast Heilongjiang province.
“The closing of these stores is linked to economic headwinds, as well as a highly developed online sales market in China – a trend that has squeezed the survival space of physical retail outlets,” said Fan Xinyu, assistant professor of economics at Cheung Kong Graduate School of Business in Beijing.
Sinopec to Take Over Aviation Fuel Monopoly CNAF in State-Led Merger (Caixin)
China is merging its largest oil refiner with its dominant aviation fuel supplier, a major consolidation move in the world’s second-largest jet fuel market.
China Petrochemical Corp, better known as Sinopec Group, will absorb China National Aviation Fuel Group Ltd. (CNAF) in a restructuring approved by the State Council, according to a Thursday announcement by the State-owned Assets Supervision and Administration Commission (SASAC). The statement offered no further details.
MiniMax doubles in Hong Kong debut, marking yet another Chinese AI listing (CNBC)
Shares of China-based AI startup MiniMax Group doubled on its first day of trading in Hong Kong on Friday, becoming the second major Chinese developer of large language models to go public.
The company raised 4.8 billion Hong Kong dollars ($620 million) in its IPO, outperforming its local rival Zhipu AI, which had listed in Hong Kong just one day earlier and rose a modest 13% on its debut.
MiniMax shares closed at HK$345, up 109% from its offer price of HK$165.
Both MiniMax and Zhipu are part of China’s so-called “AI tigers”— startups building large language models to rival American AI giants like OpenAI, which they’ve now beaten to going public.
Tech & Media
China Tells Tech Companies to Halt Nvidia H200 Chip Orders (The Information)
This week Chinese officials told companies to suspend purchase orders while the government decides on whether—and under what conditions—it will allow access to the high-performance Nvidia chips, the people said. Beijing doesn’t want local tech companies rushing to stockpile chips before completing its deliberations, one of the people added.
Nvidia, which has been blocked from selling AI chips to China as a result of rising tensions between Washington and Beijing, lobbied hard for the U.S. to relax restrictions.
Nvidia CEO Jensen Huang told reporters at the Consumer Electronics Show this week that demand from China for the H200 is quite high, which he said was a sign that the Chinese government would approve imports of the chips.
Nvidia requires full upfront payment for H200 chips in China, sources say (Reuters)
Nvidia is requiring full upfront payment from Chinese customers seeking its H200 artificial intelligence chips, hedging it against ongoing uncertainty over Beijing’s approval of the shipments, said two people briefed on the matter.
The U.S. chipmaker has imposed unusually stringent terms requiring full payment for orders with no options to cancel, ask for refunds or change configurations after placement, the people said.
In special circumstances, clients may provide commercial insurance or asset collateral as an alternative to cash payment, one of the people added.
Nvidia’s standard terms for Chinese clients have previously included advance payment requirements, but they were sometimes allowed to place a deposit rather than make a full payment upfront, the person said. But for the H200, the company has been particularly strict in enforcing conditions given the lack of clarity on whether Chinese regulators would greenlight the shipments, the person added.
China’s robot sports craze could eventually put humanoids in homes (CNN)
China’s robot industry has accelerated since 2015, when the government listed robotics as one of the 10 sectors in a blueprint for upgrading Chinese industries and shedding its reputation as the world’s cheap-labor factory.
Today, the country has over 150 humanoid robot companies, and this number is steadily increasing, according to officials.
China Tightens Oversight of Personal Data Gathering on Internet (Bloomberg)
China has issued draft regulations for the governance of personal information collection from the internet and its use by applicants, as part of its efforts to safeguard users’ rights and promote transparency.
The Cyberspace Administration of China said in a statement Saturday that apps must clearly disclose collection rules, obtain informed consent, and limit data usage to essential purposes. The proposals are open for public consultation until Feb. 9.
Science, Health & Environment
China Moves to Tighten Air-Quality Standards as Beijing Reports Best-Ever Skies (Caixin)
China is raising the bar on air pollution, proposing tighter national standards just as the capital city reported its cleanest year since monitoring began.
The Beijing municipal government on Sunday announced that the average annual concentration of PM2.5 fell to 27 micrograms per cubic meter in 2025. It marked the first time the figure has dropped below 30. Under current standards, the capital has maintained compliance for five consecutive years since achieving the target in 2021.
[…]
Beijing isn’t the only city seeing clearer skies. Data from the Ministry of Ecology and Environment shows that by the end of 2024, 252 cities nationwide — about 74% of the total — had met annual PM2.5 targets.
However, the goalposts are shifting. The ministry last month released a draft of the 2025 National Air Quality Standards, marking the first major revision since 2012. The proposal seeks to tighten concentration limits for PM2.5 and PM10 to align closer with international health guidelines, placing new pressure on local governments to curb emissions.
Arts & Culture
Beijing sound diaries + Chinese rock godfather Cui Jian raps (Concrete Avalanche)
In this issue: a fascinating (and sometimes contradictory) experimental electronic release, an ex-punk delivers absorbing sound diaries from Beijing, hyperpop hero DJ Gurl and ‘Chinese 1970s soul’ singer Dizkar drop anniversary singles, Cui Jian returns to rap, Brian Eno x Re-TROS, plus avant-garde Kazakh folk, progressive electronic sounds, and more.
New Music 新唱片发行: Uncanny Other 不可述的条纹/Wasted Laika 丢莱卡/The Chocolate Factory 巧克力工廠 (Live China Music)
Shanghai indie rockers Uncanny Other - who embed their angsty sound with barbed post punk grit, brooding cold wave demeanor, and sardonic 80s synth pop - throw you into the deep end on their debut Piercing the Bull 刺穿公牛. A moody affair - led by the affected somber vocals of - it basks in its nocturnal dourness - a worldview afflicted by desperate measures and lost souls. It can feel too restrained at times, it’s chaotic energy simmering just beneath the surface, but it’s an impressive debut nevertheless, one that shows a lot of promise for the young band.
Sports
China’s Zheng Qinwen withdraws from Australian Open (Xinhua)
China’s Olympic champion Zheng Qinwen has announced her withdrawal from the Australian Open on Thursday, saying she has yet to reach her preferred competitive condition.
Zheng posted a statement on social media, saying the decision was made after careful evaluation by her team and following medical advice.
Although Zheng said her recovery is progressing well and her off-season has gone smoothly, she added that competing in a Grand Slam requires players to be in “extreme competitive condition”.
Former short track speed skating Olympic champion Wu Dajing announces retirement (Xinhua)
Wu Dajing, Chinese Olympic champion in short track speed skating, announced his retirement on Tuesday, opting for a low-key farewell without a ceremony.
The 31-year-old won Olympic gold in the men’s 500 meters at the 2018 PyeongChang Winter Olympics, China’s sole gold medal at the Games, and helped China claim gold in the mixed 2,000m relay at the Beijing 2022 Winter Olympics.
Fan Zhendong captures table tennis German Cup title (Xinhua)
Chinese table tennis star Fan Zhendong claimed his first overseas club title after leading 1. FC Saarbrucken Tischtennis to a 3-1 victory over TTC RhonSprudel Fulda-Maberzell in the German Cup final in Neu-Ulm on Sunday.
Fan earned Saarbrucken the lead with a 3-0 win over Dimitrij Ovtcharov. After captain Patrick Franziska lost to Ruwen Filus 3-2, Saarbrucken regained its lead with Darko Jorgic sweeping Meng Fanbo 3-0, and Fan sealed the title with a 3-0 win over Filus.
Zhao and Yin claim China’s first skeleton World Cup gold of the season (Xinhua)
China’s Zhao Dan and Yin Zheng claimed the gold medal in the skeleton mixed team event at the St. Moritz leg of the 2025-2026 IBSF Skeleton World Cup on Friday, securing China’s first skeleton World Cup title of the season.
Yin also took bronze in the men’s skeleton race at the same venue.
Zhou Guanyu joins Cadillac as reserve driver for 2026 (F1)
Cadillac have announced that Zhou Guanyu has joined the team as their reserve driver ahead of their debut season in Formula 1.
Zhou – who raced for the Alfa Romeo/Kick Sauber outfit between 2022 and 2024 – is the latest name to be confirmed as part of the American squad’s line-up, with Valtteri Bottas and Sergio Perez acting as the team’s race drivers while former IndyCar racer Colton Herta will fulfil the role of test driver.
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