Wang Yi in Munich: PRC seeks stability, calls for inclusive Ukraine peace talks, warns U.S.
Plus, marriages plunge to a record low
Welcome back to What’s Happening in China, your weekly China brief.
I hope you had a happy Lantern Festival.
According to recent data from the Ministry of Civil Affairs, 6.1 million couples registered their marriages in the PRC in 2024—a 20.5% drop from 2023 and the lowest since public records began in 1986. Meanwhile, 2.6 million couples filed for divorce, an increase of 1.1%, as it becomes more socially acceptable and economic independence empowers more to separate.
Why is this relevant?
For several years now, the PRC’s population hasn’t just been aging—it’s also shrinking. In January, the government reported a third consecutive year of decline, with the population reaching 1.408 billion at the end of 2024—a drop of 1.39 million from the previous year.
With birth rates closely tied to marriage, the latest numbers pose a challenge to Beijing. Despite government efforts to reverse the trend—such as public campaigns to promote frugal weddings, cash incentives, or Xi Jinping’s push for “family values and traditions”—high living costs, career pressures, and shifting attitudes toward marriage continue to discourage couples from tying the knot—that and what some describe as a growing tendency among young Chinese to turn inward.
Amid an economic slowdown and a shrinking workforce, these trends challenge Beijing’s efforts to sustain economic growth, boost productivity, and support an already strained social welfare system.
As one of the leading countries in industrial robot adoption—behind only South Korea and Singapore in robots per 10,000 employees—and the world’s largest market for industrial robots, it will be interesting to see how much AI and automation can help the PRC tackle the demographic and economic headwinds.
Let’s jump into it.
— PC
Keywords: population decline • marriage registrations 2024 • property crisis • Vanke • Trump 2.0 • trade war • U.S. aid freeze • Wang Yi • Munich Security Conference • TikTok • Salt Typhoon • Ukraine peace summit • Paris AI summit • Tesla Megafactory Shanghai • BYD ‘God’s Eye’ • Apple Alibaba partnership • DeepSeek • coal power plant • Ne Zha • China box office
Through the Lens
In Focus
I. Too big to fail
After four years of standing by as property developers like China Evergrande Group spiraled into default, Communist Party officials decided in late January that China Vanke Co. — one of the country’s last surviving real-estate giants — was, for now at least, too big to fail. Faced with a collapse in Vanke’s bond prices and the company’s warning of a record $6.2 billion loss, officials from the developer’s hometown in Shenzhen stepped in to take operational control. Authorities are working on a proposal to help Vanke plug a funding gap of about $6.8 billion this year.
The unprecedented intervention has triggered a sigh of relief in markets, but it also underscores a somber reality: The property crisis that hobbled China’s economy and created a nearly $160 billion pile of distressed debt — the world’s largest — is getting worse.
Signs of trouble are now popping up everywhere. A brief revival in home sales has fizzled despite multiple rounds of stimulus from President Xi Jinping’s government. Chinese bankers have mostly stopped lending to real-estate projects outside major cities such as Shanghai, according to people familiar with the matter. And international creditors are losing patience: More debt restructuring deals are unraveling and at least a dozen developers face petitions to liquidate, including once-storied names like Country Garden Holdings Co.
The pain is also spreading to Hong Kong as Chinese homebuyers and tourists pull back. New World Development Co., a real-estate giant controlled by one of the financial hub’s richest families, is racing to sell assets and mortgage some of its marquee properties as losses mount.
It all points to more risks for a Chinese economy already grappling with tepid consumer spending and Donald Trump's tariffs. Without forceful action from Beijing to revive homebuyer confidence and stabilize the $15 trillion property sector, the deepening crisis threatens to weaken Xi's negotiating hand on trade talks with Trump and further deter foreign investment in China.
Read: China's Real Estate Crisis: Property Sector Debt Is Getting Worse (Bloomberg)
II. That’s classified.
China has unveiled sweeping new regulations to tighten the release of information about its military online, a move that could obscure key sources for monitoring the world’s largest armed forces.
The rules, announced over the weekend and taking effect on March 1, come as China is rapidly building up and modernizing its People’s Liberation Army (PLA) to match the military might of the United States.
It also marks the latest step in leader Xi Jinping’s far-reaching campaign to bolster national security and guard state secrets in the face of heightened geopolitical tensions – efforts that have made it all the more difficult for foreign observers to understand what is happening in China.
The all-encompassing rules could have a big impact on Chinese military bloggers and commentators, who are often quick to share images or information about new weapons systems, personnel appointments and troop movements.
Such publicly available information posted by Chinese military enthusiasts has also been an important source for PLA watchers to track the development and movement of the Chinese military.
The regulations are aimed at addressing issues including “the spread of false military information” and “the leakage of military secrets” on the internet, according to a Q&A released by the government.
Read: China tightens screws on what can be shared online about its military (CNN)
Related: China, Taiwan, and the PLA’s 2027 milestones (Lowy Institute)
III. “China’s Strategy in Trade War”
Chinese officials are building a list of U.S. technology companies that can be targeted with antitrust probes and other tools, hoping to influence the tech executives who are heavily represented in President Trump’s orbit.
People familiar with Beijing’s strategy said the goal was to collect as many cards as possible to play in expected negotiations with the Trump administration over U.S.-China issues, including the tariffs that Trump has imposed on Chinese goods.
Beijing has already said it is investigating Nvidia and Google over alleged antitrust issues. Other American companies in its sights include Apple, Silicon Valley tech company Broadcom and semiconductor-design software vendor Synopsys, said people familiar with the matter. Synopsys has a $35 billion acquisition awaiting approval by Beijing.
China needs all the leverage it can get to hit back at the U.S., and antitrust is one of the most useful, said Tom Nunlist, a Shanghai-based tech policy specialist at consulting firm Trivium China.
“China is on a chip-gathering exercise,” said Nunlist, likening the countries to poker players. “They want to come to the table to negotiate and need something to play with.”
The strategy carries risks. American companies recently have been less willing than in Trump’s first term to go to bat for China, and the threats could backfire by discouraging companies from investing in the country when that is what Beijing wants.
Read: China’s Strategy in Trade War: Threaten U.S. Tech Companies (WSJ)
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