Last Week in China: Major Updates on Economy, Military, Trade & Technology

Last week in China was packed with developments that directly impact global politics, markets, technology, and regional stability. From investigations involving senior military leaders to fresh pressure in the property sector and new restrictions tied to advanced AI chips, China’s latest updates show how rapidly the country’s internal decisions are shaping wider international outcomes. This weekly China news recap covers the most important non-entertainment stories from last week, with each update explained clearly so readers can understand what happened and why it’s important.

China investigates senior military leaders amid continuing anti-corruption campaign

• China’s Ministry of National Defense confirmed that senior military officials are under investigation, including General Zhang Youxia (a vice chairman of the Central Military Commission) and General Liu Zhenli (chief of the Joint Staff Department). The development is part of China’s ongoing military anti-corruption drive, which has already led to investigations and removals across the People’s Liberation Army in recent years.

• The announcement drew wide attention because both figures are considered highly influential in China’s military command structure. It also reinforces how strongly Beijing is focusing on internal discipline, procurement integrity, and command loyalty as the PLA continues modernization and preparedness efforts.

China’s rural banks struggle to sell seized properties as property stress continues

• Chinese rural banks have been increasingly auctioning foreclosed homes and property assets, but demand remains weak even after large price cuts. Reports indicated many seized properties have been offered at discounts of 20% to 30% (and sometimes more), yet auctions still fail due to low buyer interest.

• This situation is closely linked to the broader property downturn in China. As households remain cautious and confidence in real estate remains fragile, it becomes harder for banks to recover value from collateral. Rural and small banks face higher risk because they typically have a stronger dependence on local property markets and have fewer capital buffers than large national state-owned banks. The continued inability to sell seized assets increases non-performing loan pressure and raises concerns around localized financial instability.

China opens more futures and options products to foreign investors

• China’s securities regulator expanded access for overseas investors by adding 14 additional futures and options varieties that foreigners can trade. Newly opened products include commodity-linked contracts such as nickel and lithium carbonate, among others.

• The move signals Beijing’s continued push to strengthen China’s financial market connectivity with international capital markets, despite global uncertainty and geopolitical frictions. Allowing broader foreign participation also supports China’s goal of improving liquidity and global relevance in commodity pricing, particularly for materials critical to industrial supply chains and clean-energy sectors.

China blocks Nvidia H200 chip shipments at customs, increasing AI-tech restrictions

• Chinese customs authorities indicated that Nvidia’s H200 AI chips were not permitted to enter China, while domestic companies were warned against purchasing these chips unless absolutely necessary. The situation reportedly disrupted supply expectations and contributed to further uncertainty for companies relying on advanced AI hardware.

• The H200 is a high-end chip used for training and running large AI models, supporting advanced cloud computing and high-performance workloads. Restrictions on such chips increase the pressure on Chinese tech firms to rely on alternative supply channels, older chips, or domestic substitutes. It also highlights the intensifying technology conflict impacting global semiconductor trade, particularly in advanced AI computing.

TikTok's restructuring deal faces continuing scrutiny in the US

• ByteDance finalized a deal to create a new joint venture structure designed to satisfy US legal and political requirements and avoid a potential ban on TikTok in the United States. Under the arrangement, the venture would be majority American-owned, aiming to reduce national security concerns raised by US lawmakers and regulators.

• Despite the deal, US political pressure remains strong, with lawmakers demanding deeper oversight and stricter conditions. The ongoing scrutiny shows how Chinese-linked consumer technology companies continue to face regulatory resistance in Western countries, particularly around data handling, platform control, and perceived influence risks.

China keeps a low profile at Davos while trying to attract Western investment

• At the World Economic Forum in Davos, China adopted a noticeably quieter approach compared to past years. Chinese officials and business representatives focused on rebuilding confidence among global investors and avoiding confrontational messaging at a time when many international companies remain cautious about the China market. Reports highlighted that China’s outreach emphasized stability, long-term opportunity, and reopening to foreign participation, while downplaying political friction.

China likely to set 2026 GDP growth target around 4.5%–5% (policy pressure rising)

• Reports indicated China is expected to set a 2026 economic growth target between 4.5% and 5%, reflecting a more realistic stance as the country deals with weak property sentiment, soft consumer demand, and uneven private-sector confidence. This expected target suggests that Beijing may prioritize “steady growth” policies, targeted stimulus, and industrial upgrading rather than aggressive short-term expansion.

China recorded a massive trade surplus in 2025, driven by exports

• China reported a record trade surplus (reported as roughly “trillion-dollar level”), with exports staying strong even while global trade uncertainty increases. The data shows Chinese manufacturers continue to dominate in several categories, including industrial products and fast-growing segments like electric vehicles and clean-energy supply chains. At the same time, the scale of the surplus will likely increase political trade pressure from major economies.

South China Sea shipping incident raises tensions in a disputed zone

• A Singapore-flagged cargo ship carrying Filipino crew members capsized in the disputed South China Sea near Scarborough Shoal, with deaths confirmed and others reported missing. Chinese Coast Guard personnel took part in rescue operations, and images were released through official channels. The incident again put a spotlight on how risky and politically sensitive the region remains, especially around major fishing lanes and contested maritime patrol routes.

Philippines pushes for the South China Sea code to be based on international law (China regional pressure point)

• The Philippines stated it would insist that negotiations around a South China Sea code of conduct must be based on international law, signaling Manila’s intent to maintain a legal-first approach while managing ongoing tensions in the region. This remains important for China because South China Sea issues directly affect Beijing’s regional strategy, naval posture, and diplomatic relations with ASEAN states.

China warns against tariff escalation and signals firm response to pressure tactics

• During a regular Foreign Ministry press briefing, China reiterated that “tariff wars have no winners” and stated it would firmly protect its lawful rights and interests. The comments came in the context of rising tariff threats and pressure on countries doing business with sanctioned states such as Iran. China’s message last week was clearly positioned as a warning: Beijing will not accept trade coercion and is prepared to respond through policy and diplomacy.

Xi Jinping congratulates Vietnam’s To Lam and highlights “shared future” messaging

• China’s President Xi Jinping congratulated Vietnam’s leader, To Lam, on his re-election as the Communist Party’s general secretary and praised Vietnam’s progress in reforms and international standing. Xi described China–Vietnam ties as a “community with a shared future,” a phrase frequently used in China’s regional diplomacy. This indicates Beijing’s continued effort to strengthen relationships with neighboring states, especially those central to supply chains, trade routes, and regional security.

Overall, last week’s China headlines reflected a country moving on two tracks at once: tightening internal control while also trying to maintain international trust in trade, finance, and diplomacy. Key stories around military discipline, property-linked banking stress, and technology restrictions show that China’s domestic challenges are deeply connected to global supply chains and geopolitical stability. As the world watches China’s next policy steps, these weekly developments are becoming essential signals for investors, businesses, and international observers.

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