China Weekly News Update: Key Political, Economic, Tech, Climate and Geopolitical Events

China’s past week brought a steady flow of political shifts, economic signals, technological advances, climate-related updates, and regional geopolitical movements. Each development added new layers to the country’s domestic direction and its engagement with the world. This weekly report brings all major events together in a clear, structured format, giving you a full picture of what unfolded across government activity, markets, industry, environmental conditions, and foreign relations.

Xi greets Thai King Vajiralongkorn on state visit

• China’s president Xi Jinping received Thailand’s King Maha Vajiralongkorn in Beijing during a state visit that included high-level talks and a state banquet. The meetings emphasized deepening bilateral cooperation in areas such as infrastructure, agriculture, aerospace and AI; state media framed the visit as a landmark step in bilateral relations and issued coverage of joint pledges.

Party publications and legal discourse

• The Party Literature Press published the first volume of Selected Writings on the Rule of Law by Xi Jinping, a new title distributed across official channels and discussed in Party-affiliated publications during the week. The release reinforces domestic legal and ideological messaging tied to the leadership’s policy directions.

October trade data showed continued strains in exports

• Customs and national statistics released recent data showing China’s exports contracted again in October, marking one of the weakest performances in months as global demand falters and tariff-driven front-loading effects fade. Observers pointed to shrinking factory output and retail indicators as signs of the uneven recovery in domestic consumption and external demand.

Official GDP framing and medium-term targets

• Chinese officials reiterated long-term growth projections and five-year planning ambitions this month, with public statements pointing to targets that would see GDP increase over the coming five years and policy emphasis on stabilizing growth through industrial upgrading and trade facilitation.

Rare-earths negotiations continued with international buyers

• Diplomatic and commercial negotiations over rare-earth supply and potential deals remained active, with market and policy sources indicating talks aiming to wrap up arrangements in the U.S. Thanksgiving timeframe. These discussions follow heightened global attention on critical minerals used in high-tech and defense supply chains.

Huawei unveils open-source tooling to increase AI compute utilization

• Huawei announced a new, open-sourced AI infrastructure framework (reported as Flex:ai / related tooling) designed to partition chips and raise average utilization across GPUs and NPUs by enabling finer-grained resource isolation. The company said the software could substantially improve efficiency for domestic AI deployments and reduce reliance on foreign hardware/software ecosystems. Coverage appeared across Chinese state and industry outlets.

Baidu and other Chinese firms pushed chip roadmaps

• Baidu’s Kunlunxin unit revealed new AI chip designs and system builds intended for large-scale inference and future training workloads, presenting M-series chips and Tianchi “supernode” configurations to boost national AI compute capacity ahead of export-restriction-driven supply gaps. Reporting placed these launches in the broader context of China’s drive toward domestic semiconductor capabilities.

Guidance restricting foreign AI chips in state-funded data centres remained consequential

• Policy guidance circulating earlier this month—affecting state-funded data-centre projects and requiring domestic AI chips in new or incompletely built state projects—continued to shape procurement and deployment decisions for cloud and institutional AI infrastructure. The measure has operational implications for foreign suppliers and accelerates adoption of indigenous chip vendors and software stacks.

Typhoon/late-season storm tracking and regional effects

• The Pacific typhoon season generated storms tracked across East and Southeast Asia in mid-November. Relief and meteorological agencies monitored systems (including Fung-Wong) that moved through the Philippines region and influenced rainfall patterns in parts of southern China and neighbouring countries; humanitarian and weather-response organisations issued situation reports and preparedness notices.

Ongoing flood risk and seasonal weather advisories

• While the main monsoon peak is past, regional weather offices continued to issue flood and heavy-rain watches for southern and central provinces in response to episodic extreme rainfall earlier in the year and lingering seasonal variability. Historical monitoring and national-level alerts remain part of local disaster-preparedness activities.

Japan–China diplomatic friction over Taiwan remarks

• A public statement by Japan’s prime minister—asserting that Japan could respond under self-defence to certain coercive measures against Taiwan—triggered a sharp diplomatic backlash from Beijing. Chinese authorities announced countermeasures, including travel advisories and stepped-up coast guard presence near disputed islands; both capitals undertook diplomatic exchanges aimed at managing the bilateral fallout ahead of multilateral forums.

Taiwan-related military and arms developments

• The broader week included monitoring of U.S. arms approvals for Taiwan and continued intelligence assessments related to cross-strait military postures. Open-source trackers and regional security organisations published updates summarizing arms sale approvals and recorded PLA activities near Taiwan’s air and sea approaches.

People’s Bank of China (PBOC) reaffirming accommodative monetary stance

• China’s central bank announced that it will maintain “appropriately loose” monetary policy, with ample liquidity and efforts to lower financing costs for banks and social financing channels. The announcement came amid concerns that industrial output, retail consumption and fixed-asset investment are trending weaker.

• In its third-quarter monetary policy implementation report, the PBOC stated that it would monitor global monetary policy shifts and maintain the parity among interest rates, deposit rates and lending rates to ensure effective transmission.

• The backdrop is one of sluggish domestic demand, export pressures and a property sector drag; the PBOC’s statement underscores the continuing priority on stabilisation rather than aggressive tightening.

China’s banking and credit cycle showing signs of transition

• In a recent analysis, Chinese regulators and credit-market watchers flagged that the credit down-cycle in China is coming to an inflection point, but local government debt overhang and intense domestic competition remain a strain on bank balance sheets.

• The study noted that while capital adequacy ratios in commercial banks remained generally robust (for example, an 18 % total capital adequacy figure), the cost of interbank funding and risk of non-performing exposures from real estate and local government financing vehicles (LGFVs) are creating caution in the sector.

• This implies that while China’s banking sector is technically sound, the transition to sustainable credit growth will depend heavily on how the property, local government and private investment channels evolve from here.

China as a recipient of international finance loans

• A detailed investigation found that China, along with Saudi Arabia and the UAE, has been among the top recipients of international “climate finance” loans originally intended for developing countries. According to the analysis, China received roughly US $3 billion in such funding during a recent two-year period.

• The data revealed that only about one-fifth of the US $160 billion in climate finance disbursed in that period reached the world’s 44 least-developed countries (LDCs); the remainder went to middle-income countries, including China.

• The findings raise questions in global climate-finance discussions about allocation fairness, loan versus grant terms, and whether recipient status should shift as countries’ income and emissions profiles evolve.

China’s green-bond market overtaking Western peers

• Another development in China’s financial sphere: China’s green-bond issuance has surged to new highs, surpassing many Western markets. In 2025, China reportedly issued about US $70.3 billion worth of bonds aligned with international green-bond standards, representing some 17 % of global issuance.

• By comparison, the U.S. green-bond market accounted for only about 3% of global issuance in the same timeframe. China’s central bank and other regulators are actively supporting green-finance instruments as part of the broader push towards “dual-carbon” goals and scaling of renewable and low-carbon industrial capacity.

• While many of these instruments remain domestic or quasi-domestic in nature, the trend signals Beijing’s intent to leverage capital markets for climate and industrial transitions.

Renminbi (RMB) internationalisation accelerates

• China is significantly stepping up the international use of its currency, the renminbi (RMB), in global finance and trade settlement. Over the past five years, external RMB loans, deposits and bond investments by Chinese banks have quadrupled to over RMB 3.4 trillion (approx. US $480 billion).
  As of September 2025, the RMB’s share of global trade-finance settlement had reached around 7.6 making it the second most used currency in that domain after the U.S. dollar.

• The strategic aim is to reduce dependency on the U.S. dollar, expand China’s financial influence, and provide greater resilience against sanctions or external financial restrictions. The infrastructure build-out around payment systems, offshore RMB bond markets, and cross-border settlement platforms is supportive of that goal.

Escalation of diplomatic and trade tensions with Japan over Taiwan-related remarks

• A sharp escalation occurred this week between China and Japan over remarks made by Japan’s prime minister concerning possible intervention in Taiwan. China lodged formal protests at the UN level and accused Japan of undermining China’s “core interests.”

• Beijing also subjected Japanese firms and trade links to heightened scrutiny, including changing customs arrangements and travel advisories from Chinese authorities to Japan. Simultaneously, notices of live-fire drills in the Yellow Sea and patrols of disputed waters near the Senkaku/Diaoyu Islands heightened security-flashpoint risks.

• This incident underscores how diplomacy, trade measures and military posturing are increasingly interwoven in China’s relationship with its neighbours.

China’s week closed with a mix of internal policy activity, evolving economic signals, and outward-facing geopolitical moves. Technology firms continued to expand domestic capabilities, financial regulators focused on stability, and the regional climate brought its own set of alerts. Alongside these internal shifts, China’s diplomacy and security posture shaped several international conversations. Together, these developments offer a comprehensive view of how the country is positioning itself at home and abroad during a dynamic period.

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