january: watching for consumption
month in focus
Warm welcome all…
The Spring Festival Gala, with an alleged global reach of 16.8 billion viewers and typically syrup is now tech, tech, tech. Dancing robots, drone displays and e-vertical landing and take-off aircraft were centre stage. The eVTOL show came from Chongqing—city of insanely steep hills and spiral roads—now a hotspot for developing the low-altitude economy.
And DeepSeek dropped on Trump’s Inauguration Day…
Happy reading
Philippa
so let’s first ask DeepSeek about its impact
It replies
PRC commentators hail DeepSeek’s breakthroughs as testament to China’s tech resilience and ingenuity, framing its cost-efficient, open-source AI models as a strategic victory that undermines US semiconductor sanctions, democratises access to advanced AI globally, and positions the PRC as a leader in reshaping the future of AI innovation and geopolitical influence.
Maybe a little bias creeping in?
DeepSeek has, nonetheless, set a massive cat among the pigeons. The dust has yet to settle—Nvidia, the US chip maker, slumped nearly US$600bn (then rapidly regained over half). A striking fact is that AI, designed to eliminate uncertainty, has become a prime source of it.
then move to the economy…
Killing two birds: consumers happy; products iterate. 2025 launched with updates to the trade-in and equipment upgrade program, extended to include subsidies for trading in smartwatches, phones and tablets as well as more home appliances (rice cookers, microwaves...). Banks boasted strong starts to the year; consumption stimulus has, in turn, helped boost demand for consumer loans.
PBoC, earlier pledging to cut rates and required reserves at ‘appropriate times’, will now do so ‘when opportunities arise’. This raises the odds of monetary easing in 2025, turning out less than markets expect, contends Wen Bin 温彬 Minsheng Bank chief economist.
Given the PBoC’s temporary pause on bond purchases, announced on 10 January, and similarly set to restart ‘when opportune’, this shift may help ease any collapse of bond yields. Pausing stresses Dong Ximiao 董希淼 Merchants Union Consumer Finance may not turn out to tighten liquidity.
Following Shanghai’s December lead in easing rules on state funds to calm nerves about risk or loss, State Council issued similar central Guiding Opinions. The guidelines promote long-term assessment and broad evaluation.
Joint minutes of a symposium on listed firms’ bankruptcy restructuring emerged from the SPC (Supreme People's Court) and CSRC (China Securities Regulatory Commission). The minutes rank as major instructions guiding the process. Stronger than the 2012 minutes, they require scrutiny of the market value of restructures. Quality standards were boosted for restructure plans, with tougher disclosure required. So much for the economy…
trade remains tough
2024 annual PRC trade data dropped: the flow has held up, reports the General Administration of Customs, growing by five percent. Mechanical and electrical exports rose 8.7 percent, exceeding 60 percent of total and confirming a promised move to higher-end manufacturing. As Beijing perseveres to diversify trade, that with BRI partners came in, for the first time, at over half of the total.
Facing tariff and other threats from Trump 2.0, PRC experts mull next moves. The best strategy, advises trade pundit Tu Xinquan 屠新泉, is to make the PRC market more attractive for FDI while boosting internal demand. January policy shifts display this leaning, as in
NDRC trial guidelines to foster a ‘unified national market’—syncing rules between localities and addressing their protectionism
MofCOM opinion urging pilot zones for services sectors to set standards for key areas
Trade retaliation kept tensions alive in January
EU rollout of its Foreign Subsidies Regulation on PRC firms constitutes ‘trade and investment barriers’, claimed MofCOM
moving to counter US high-tech sanctions, Beijing threatens to add lithium battery materials and extraction tech, of which it is a global leader, to an export control list
Under new ODI reporting rules, offshore PRC firms, not least miners of strategic minerals, must report more on their operations, providing Beijing with information on supply chain
EVs to hit 50 percent of sales
Targets for NEV (new energy vehicle)to account for over 50 percent of new car sales may be reached early by as much as a decade, forecasts the industry. Commercial vehicles should see rapid growth in 2025, notes Zhang Yongwei 张永伟 EV100 secretary-general, partly due to trends towards hybrids and smart driving tech.
Ever more new energy firms, their profits shredded by stiff domestic competition, seek survival offshore. Given strong growth forecasts, energy storage heavyweights like CATL and EVE Energy are spreading into Europe, North America, the Middle East and Africa. PRC wind power, estimated at some 60 percent of global supply, similarly seeks to boost exports of some 5.5 GW into 24 countries in 2024.
more GM
Five gene-edited crop varieties and 12 genetically modified (GM) soybean, corn and cotton varieties were approved in the last days of 2024. One, a gene-edited anti-herbicide wheat, is the first 'edited' staple grain to pass review. Once hyper-cautious with biotech, regulators shied away from allowing GM or GE wheat or rice. Whether the PRC will now commercialise edited staples remains uncertain; it indeed seeks higher-quality seed to secure the ‘rice bowl’.
Pushing ahead with GMO approval, MARA (Ministry of Agriculture and Rural Affairs) tabled a batch of new crop varieties, including
high-quality rice
machine-harvestable corn for dense planting
high-oil and -yield soybeans
premium insect-resistant cotton
PRC-grown soybeans currently yield 13–15 percent oil; US beans average some 19 percent.
Another year of campaigns to improve domestic yields failed to curb imports. In 2024, grain imports hit 158 million tonnes. Soybeans, some 66 percent of the total, hit a new high of 105 million tonnes.
2025 national scitech conference
Education, technology and talent reform are imperative to innovation, Ding Xuexiang 丁薛祥 Central Science and Technology Commission chair, told the national scitech work conference. Leveraging global cooperation, the conclave highlighted large-scale international projects such as Deep-Time Digital Earth and Ocean Negative Carbon Emissions.
Faced with a TikTok ban, millions of US enthusiasts signed on to RedNote’s PRC servers this month. Spurring surprising interaction between PRC and US users. RedNote’s holding company was obliged to quickly recruit English majors and segregate servers by geography to comply with Beijing's censorship rules.
Beijing: early mover on carbon footprints
Key carbon accounting plans were launched in January. MEE and NDRC issued guidelines for drafting PCF (product carbon footprint) standards on 6 January, mapped to PRC ‘national conditions’ while adhering to global best practice. A national emissions factor database came online days later, providing accurate and transparent data. Firms working on carbon accounting, previously reliant on default values from literature or outdated global data, will benefit, argues Ma Cuimei 马翠梅 National Centre for Climate Change Strategy.
MEE held its national environment work conference in Beijing 14–15 January, urging pragmatism. It outlined key tasks for environmental work in 2025, not least the mainstays ‘Beautiful China’, pollution prevention and green, low-carbon development. Green reform needs grounding in ‘practical realities’, the readout rumbled, attuned to the ‘real needs’ of people and businesses.
cross-border online pharma
Launching 9 January, a PRC–ASEAN cross-jurisdiction drug procurement platform, a first, links procurement to settlement. Running beside the ‘Guangxi Healthcare Cloud Platform+N’ initiative, it provides domestic and offshore patients with online pharma services. NHC also stepped up building child- and fertility-friendly hospitals. Warnings over low-quality procured medicines came from CCPCC delegates; NHSA’s response awaits further action.
‘Outline for making the PRC an educational great power (2024–35)’ was issued by the State Council on 19 January, promising serious progress by 2027, and a fully-featured education powerhouse by 2035.
first diplomatic visit in 2025
FM Wang Yi 王毅 visited Namibia, Republic of Congo, Chad and Nigeria from 5–11 January, faithful to a three-decade tradition of making African nations the first event on Beijing’s diplomatic calendar.
Promising Japan-China warming: the two resumed the ruling parties' dialogue on 14 January, ending a hiatus of over 6 years.
Xi Jinping 习近平 held a phone call with Donald Trump on 17 January, their first since Trump’s reelection and their first direct contact since he left office in 2021. Eschewing the inauguration on the 20th, Xi delegated vice president Han Zheng 韩正 as his proxy. Han met with J.D. Vance for talks on ‘fentanyl, balancing trade and regional stability.’ The body language was not promising. At the time of inauguration, Vance and incoming Secretary of State Marco Rubio had meetings with leaders of Quad and AUKUS partners, deemed highly ’anti-China’ by Beijing.
Xi and Putin held a video call hours after the swearing-in on 21 January. The US President was not mentioned in the publicly televised clip, but the timing spoke to an anti-Trump front.
loyalty
The CCDI held its Fourth Plenum over 6–8 January 2025. It once again urged stricter political supervision, above all, monitoring cadres’ loyalty to General Secretary Xi. Intelligence regarding ‘political opinions’ was sought, enabling Party Committees, aided by the CCDI, to snuff out internal risk. Of utmost concern were economic and financial sector threats.
The person covering the supreme people’s court should confirm the terminology he/she is using with general practice