China’s 31 Provinces Embrace Austerity in 2026 Budget Plans
All 31 of China’s provinces have released their 2026 budget drafts, each echoing the central government’s directive for Party and government agencies to “live frugally” by cutting administrative and non-essential expenditures. The push reflects an intensifying fiscal squeeze that has been building for years, with some analysts arguing that curbing wasteful local government investment would yield even greater savings than trimming routine spending.
The “living frugally” policy generally refers to reductions in the so-called “three public expenses” — overseas official travel, official hospitality, and government vehicle costs — along with other non-urgent outlays. According to a report by Yicai on February 27, the approach has become a long-term policy directive, particularly as the gap between fiscal revenues and expenditures has widened in recent years.
Several provinces reported concrete results. Tianjin cut 5.87 billion yuan (approximately $806 million USD) in non-essential spending in 2025. Jiangxi saw its three public expenses fall 21 percent, large-scale provincial renovation spending drop 41.9 percent, and conference fees decline 36.4 percent. Shaanxi pledged to further slash budgets for festivals, trade shows, and forums, while Hebei committed to continued reductions across meetings, training, and outsourced service fees.
An anonymous local fiscal official noted that reining in ineffective and hastily launched investment projects — those started without adequate planning or assessment — would save considerably more public funds than cutting general administrative expenses.
The frugality drive traces back to March 2019, when President Xi Jinping explicitly linked government belt-tightening to improving ordinary citizens’ lives. The policy gained further urgency during the COVID-19 pandemic as local finances deteriorated. It was formally institutionalized in May 2025, when the Party and State Council issued a revised regulation on strict economy and opposing waste, moving the directive from a slogan into enforceable policy.
Source: Central News Agency (Taiwan), February 27, 2026
https://www.cna.com.tw/news/acn/202602270112.aspx
China Targets Japan’s Military Buildup With Export Controls
China’s Ministry of Commerce recently announced it is adding 20 entities involved in enhancing Japan’s military capabilities to its export control list, while placing another 20 Japanese entities on a watch list for failing to verify the end users and end uses of dual-use goods. Beijing framed the move as a matter of national security, non-proliferation obligations, and a direct response to what it describes as Japan’s accelerating “re-militarization.”
China argues that under the Cairo Declaration, the Potsdam Proclamation, and Japan’s Instrument of Surrender, Japan is legally prohibited from rearming. Yet major Japanese defense contractors — Mitsubishi Heavy Industries, IHI Corporation, and Kawasaki Heavy Industries — have continued producing warships, fighter jets, and missiles. China specifically cites Mitsubishi’s involvement in developing hypersonic glide weapons and shipbuilding contracts that it claims threaten stability in the East and South China Seas.
The article points to Japan’s rapid defense spending growth as evidence of a deepening military-industrial complex. Defense budgets have risen for 14 consecutive fiscal years from 2012 to 2026, more than doubling since 2022. Stock prices of major defense firms have surged dramatically since November 2022 — Mitsubishi Heavy Industries by over 650 percent, IHI by over 480 percent, and Kawasaki Heavy Industries by over 280 percent — even as Japan’s broader manufacturing sector grew at less than 1 percent annually over the same period.
Under Prime Minister Sanae Takaichi, the article claims, remilitarization has accelerated further, with plans for large-scale bond issuance and a special defense income tax to fund military expenditures, alongside the establishment of a national intelligence agency this year.
The piece also raises alarm over Japan’s nuclear ambitions, noting that Japan had stockpiled 44.4 tons of separated plutonium as of end-2024 — far exceeding civilian energy needs — and possesses the full technical infrastructure to produce weapons-grade material. China warns that if Japan crosses the nuclear threshold, the global non-proliferation framework would face a severe blow. The article concludes that China’s export controls are a lawful and necessary step to prevent militarism’s resurgence and to uphold the postwar international order.
Source: People’s Daily, February 28, 2026
http://paper.people.com.cn/rmrb/pc/content/202602/28/content_30142715.html
China’s Soft Power Play: Subsidized Tours Aim to Win Over Taiwan’s Youth
A report by Le Monde, filed from Beijing, details how China is using subsidized travel and youth exchange programs as a soft power tool to reshape how young Taiwanese perceive the mainland — with mixed results.
The article follows two Taiwanese university students, referred to by pseudonyms Mei and Lian, who traveled to China in January through an association offering heavily discounted trips specifically designed for Taiwanese youth. The pair paid only for their round-trip airfare plus a registration fee equivalent to roughly 100 euros (approximately $110 USD, or NT$3,700), with the remainder covered by subsidies from the Chinese government and provincial authorities — the same provincial bodies that house so-called “united front” departments tasked with cultivating support for Beijing’s agenda.
Over about ten days, the two visited Hangzhou — home to AI firms DeepSeek and Unitree, as well as Alibaba’s headquarters — before traveling to the Changbai Mountain region for snow scenery and then Harbin for its winter festival. Mei noted that China seemed more advanced than Taiwan in some respects, pointing to hotel robots that could navigate elevators and hallways to deliver food orders.
During the trip, the organizing association arranged meetings with Chinese peers of similar age. These individuals avoided aggressive political messaging and largely steered clear of direct discussions about unification — instead encouraging Mei and Lian to post photos of places they found beautiful or impressive on social media. With only around 1,000 followers each, the two were seen as authentic, unsponsored voices rather than obvious influencers.
The article concludes that the initiative was only partially successful. Both women came away impressed by China’s modernity, infrastructure, and scenery, but Mei’s sense of Taiwanese identity remained intact. “We want to keep our democracy,” she said. Her mother, for her part, refused to speak to her for two months after learning of the trip.
Source: Central News Agency (Taiwan), February 26, 2026
https://www.cna.com.tw/news/acn/202602260307.aspx
UDN: Panama President Ordered Takeover of Two Ports Operated by CK Hutchison Holdings
United Daily News (UDN), one of the primary Taiwanese news groups, recently reported that Panamanian President Jose Raul Mulino has ordered a temporary takeover of two ports operated in Panama by a subsidiary of CK Hutchison Holdings. Last month, the Panamanian Constitutional Court ruled CK Hutchison’s port concession contracts invalid.
Mulino said in a statement that the management and operation of the two ports located in the strategic Panama Canal have now been transferred to the National Maritime Authority in order to “ensure the ports operate continuously, safely and efficiently.” He stated that the takeover applies to movable equipment within the port and “does not mean a loss of ownership.” He indicated that once the cause of the takeover ceases to exist, the government will return the assets, including the cranes, to their rightful owners. Panama will pay appropriate compensation unless the equipment is sold to a new buyer.
CK Hutchison’s subsidiary in Panama stated that the takeover was illegal. CK Hutchison Holdings is a conglomerate founded by Hong Kong tycoon Li Ka-shing. In January, Panama’s Supreme Court revoked CK Hutchison’s port operating concession. The ruling was praised by Washington but drew criticism from Beijing.
Source: UDN, February 24, 2026
https://udn.com/news/story/6809/9341089
First time in 30 years, US Imports from Taiwan Surpassed Those from China
Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that, the latest import and export data released by the U.S. Department of Commerce showed that U.S. imports from Taiwan in December increased by approximately 144 percent year-over-year, reaching US$24.7 billion; while imports from mainland China decreased by nearly 44 percent year-over-year, falling to US$21.1 billion. This marks the first time in over three decades that U.S. imports from Taiwan have exceeded imports from mainland China.
Looking at the full-year data, the U.S. trade deficit with China decreased by nearly 32 percent to US$202.1 billion last year, the lowest level since 2005. Specifically, U.S. imports from China fell by nearly 30 percent to US$308.4 billion, the lowest since 2010; while exports to China decreased by nearly 26 percent to US$106.3 billion.
In the meantime, the U.S. trade deficit with Taiwan reached US$146.8 billion last year, an increase of 98 percent. Of this, U.S. imports from Taiwan increased by 73 percent to US$201.4 billion, while exports to Taiwan increased by 28 percent to US$54.6 billion.
After nearly 10 months of negotiations, Taiwan and the United States signed a reciprocal trade agreement on February 12. The significant growth in the supply of AI chips and servers is the reason for the surge in Taiwan’s exports to the United States.
Source: Lianhe Zaobao, February 20, 2026
https://www.zaobao.com.sg/news/china/story20260220-8602991
CNA: Chinese Tech Firm Released Satellite Images Showing US Military Deployments Ahead of US-Israeli Attack on Iran
Primary Taiwanese news agency Central News Agency (CNA) recently reported that, ahead of the joint US-Israel attack on Iran, a Chinese commercial satellite company Mizar Vision released a series of satellite images for multiple days showing U.S. military deployments, including images of 11 U.S. F-22 stealth fighters deployed in Israel.
The F-22 stealth fighter is the first U.S. military fighter jet with supersonic cruise capability. Due to its classified technology, the United States prohibits the sale of this fighter jet to other countries. The deployment of the F-22 stealth fighter jet represents a decisive round in the Middle East situation.
Defence Security Asia published an article pointing out that the exposure of 11 US F-22 stealth fighters by a Chinese commercial satellite company is an important turning point in the transparency of military deployments in the Middle East, showing that the competition in military intelligence, surveillance and reconnaissance (ISR) is intensifying. By publicly revealing U.S. military deployments, China is demonstrating its surveillance capabilities to the outside world, making Washington’s operations more complex in terms of secrecy.
Source: CNA, February 28, 2026
https://www.cna.com.tw/news/aopl/202602280205.aspx
EU Tightens Checks on Chinese Baby Formula Ingredient After Contamination Confirmed
The European Union announced on Wednesday (February 25) that it is imposing stricter inspections on a baby formula ingredient imported from China, after confirming that cereulide toxin is the source of contamination in infant formula products.
Cereulide, which can cause nausea and diarrhea, was first detected in December last year in formula containing arachidonic acid oil. Following the discovery, European giants including Nestlé, Danone, and Lactalis launched recalls of infant formula products across more than 60 countries. Ireland’s Food Safety Authority has since stated that the recalls were triggered by the possible presence of cereulide in the affected products.
Arachidonic acid oil, the ingredient in which the toxin was detected, is strictly regulated in Europe and is used in some infant formulas as a source of Omega-6 fatty acids.
Since December, three infant deaths in France have been suspected to be linked to the recalled formula. French authorities are investigating, though they have emphasized that no causal relationship between the deaths and the formula has been established. Nestlé has said it will cooperate with the investigation and that there is currently “no evidence” linking its products to the deaths.
In its Wednesday statement, the European Commission said it was “necessary to strengthen controls on arachidonic acid oil imported from China” under special conditions. Shipments entering the EU from China will now require an official certificate confirming the absence of cereulide, and for the next two months, 50 percent of physical shipments will be subject to random sampling checks.
The Commission explained that investigations have shown Chinese-sourced arachidonic acid oil used in formula production “constitutes the source of contamination,” posing a potential serious risk to human health. While no company was named by the EU, Chinese firm Cabio Biotech — a major global producer of arachidonic acid oil supplying brands such as Nestlé and Danone — is reportedly under investigation for allegedly supplying the contaminated ingredient.
Source: Deutsche Welle, February 25, 2026
https://p.dw.com/p/59Onh
Zimbabwe Bans Raw Lithium Exports to Force Local Processing
Zimbabwe, Africa’s largest lithium producer with reserves among the world’s highest, has announced an immediate and indefinite ban on all exports of raw ore and lithium concentrate. The ban, declared by the country’s Ministry of Mines on Wednesday, February 26, takes effect ten months ahead of the previously scheduled January 2027 deadline. Zimbabwe had already banned raw ore exports in 2022, and the new measure now extends that restriction to lithium concentrate as well.
The policy reflects a broader ambition to refine lithium domestically, increase the mineral’s added value, generate greater government revenue, and create local jobs. This approach is gaining traction across Africa, with numerous countries at February’s Mining Indaba conference in Cape Town expressing a desire to capture more economic benefit from their mineral wealth, which is critical to the global energy transition.
Several Chinese-backed companies are already responding. Prospect Lithium Zimbabwe, majority-owned by China’s Zhejiang Huayou Cobalt, is investing $400 million to build a lithium refinery expected to begin production within weeks, making it Africa’s first facility producing lithium sulfate. Zimbabwe’s state-backed Mutapa Energy Minerals plans to begin construction of a similar plant by mid-June, backed by $270 million in Chinese funding, with an annual capacity to process 600,000 tonnes of raw ore. Meanwhile, Sinomine Resources Group, owner of Zimbabwe’s largest lithium mine, Bikita Minerals, is conducting feasibility studies for a $500 million lithium sulfate plant it hopes to build in phases starting December.
Despite the optimism, critics argue the government is moving too slowly and lacks adequate oversight of Chinese-controlled mines, making it difficult to accurately track export volumes. Some economists urge Zimbabwe to build a complete value chain from mine to finished product and to follow the examples of Norway, Botswana, and Kuwait in implementing strategic, forward-looking resource policies.
Source: Radio France International, February 26, 2026
https://rfi.my/CTiE