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China’s Export Data Inflated by Government-Backed Fraud Scheme

A comprehensive investigation by Chinese financial media outlet Yicai has exposed widespread fraud in China’s export statistics, revealing that local governments have not only permitted but actively orchestrated schemes to artificially inflate trade figures. This comes as Beijing announced that its trade surplus for the first eleven months exceeded $1 trillion, reaching a historic high.

The report details a systematic fraud involving “bought export data,” where shell companies purchase export statistics from customs brokers to claim government subsidies. Unlike traditional tax fraud schemes, these operations rely on local government rewards for export performance. Companies establish numerous shell entities with foreign trade qualifications, purchase export data that never actually occurred in their registered locations, and receive financial incentives based on these fabricated figures.

In one case from an inland province, defendants allegedly established shell companies across multiple locations and purchased export data from other provinces, defrauding the government of over 100 million yuan ($13.8 million) in export incentives. A similar case in southwestern China involved more than 100 shell companies and fraudulent claims exceeding 200 million yuan ($27.6 million).

Evidence suggests local governments not only knew about these practices but actively participated. Family members of defendants stated the schemes were designed to “cooperate with the government in achieving performance targets.” Some officials provided explicit or implicit support, with one former commerce bureau chief receiving millions in kickbacks through profit-sharing arrangements.

Legal expert Shi Zhengwen from China University of Political Science and Law criticized the export incentive policies, arguing they distort market competition and violate international trade rules. He noted that such data manipulation contradicts Beijing’s stated goals of high-quality development and creating a world-class business environment, suggesting local governments prioritize short-term targets over genuine economic progress.

Source: Central News Agency (Taiwan), December 29, 2025 https://www.cna.com.tw/news/acn/202512290314.aspx

Briefings | | |   Economy/Resources

China Requires Social Media Screening for Civil Service Recruitment

Multiple regions across China are now examining candidates’ online behavior and social media activity as part of civil service recruitment, according to recent reports from the China Organization and Personnel News, a publication under China’s Ministry of Human Resources and Social Security.

In Shandong province, authorities have implemented comprehensive background checks that scrutinize applicants’ political ideology, career motivations, and value orientations. Investigators visit workplaces, communities, residential compounds, and candidates’ homes to assess their conduct both during and outside working hours. For those who frequently changed jobs, investigators extend inquiries to previous employers to evaluate work performance and public perception. Collaborating with internet and public security departments, authorities review online statements of key personnel to understand their true character both in person and online, firmly screening out those deemed politically unqualified.

Hubei province conducts similar assessments covering candidates’ work circles, social circles, and personal development. Investigators physically visit educational institutions, workplaces, and residences while monitoring daily online behavior. They randomly examine posts in alumni groups and other public platforms, reviewing social media accounts for content shared, followed accounts, likes, and comments to gauge political stance, values, and personal interests.

In Xinjiang’s Altay region, civil service recruitment now includes screening for risky online behaviors such as posting inappropriate content, spreading false information, engaging in online gambling, or illegal lending on social media platforms.

A professor from the Central Party School noted that while political, value-based, and moral requirements have always been central to civil service examinations, the scrutiny of candidates’ online and offline conduct has become increasingly detailed. Following these announcements, training institutions in Hubei have advised candidates to self-examine their online behavior and maintain appropriate conduct both online and offline.

Source: Central News Agency (Taiwan), December 27, 2025
https://www.cna.com.tw/news/acn/202512270058.aspx

Briefings | | |   Government/Politics

Shanghai’s Restrained Christmas Atmosphere Reflects Stricter Religious Control

Christmas Eve in Shanghai revealed a city navigating between commercial celebration and religious caution. While festive decorations adorned streets as marketing elements, religious observances faced increased scrutiny. As one of China’s most cosmopolitan cities and a popular destination for foreign tourists following expanded visa-free policies, Shanghai demonstrated relatively more openness toward Christmas compared to inland cities, yet the celebrations remained notably restrained.

At Xujiahui Cathedral, the main Catholic church in Shanghai’s diocese, authorities deployed additional police officers around churches to manage crowds during Christmas masses. Inside the cathedral, families attended services together, including young children, despite official regulations prohibiting minors under eighteen from participating in religious activities. This reflected citizens’ flexible approach to navigating religious restrictions.

Bishop Shen Bin of Shanghai, who also chairs China’s state-approved Catholic Bishops’ Conference, issued a Christmas pastoral letter emphasizing “strict religious governance” and “simplicity over extravagance.” The letter referenced a national religious initiative focusing on seven prohibitions regulating clergy behavior regarding clothing, food, housing, transportation, and social activities. This campaign, launched in October following criminal investigations into Shaolin Temple’s abbot, aims to implement comprehensive strict governance of religion and advance the “Sinicization” of religious practices.

Enforcement extended beyond churches. One resident reported being detained by police on Christmas Eve for dressing as Santa Claus and distributing apples to passersby, with officers deeming it “bizarre attire.” At the police station, numerous others in Santa costumes awaited processing.

The contrast between Shanghai and less developed regions was stark. Schools in Yunnan and Shanxi provinces issued notices discouraging Christmas celebrations, urging students and families to cultivate “correct worldviews” and “patriotic sentiments” rather than observing Western holidays. The geographic divide highlighted how religious and cultural policies intensify beyond China’s major metropolitan centers.

Sourced: Central News Agency (Taiwan), December 25, 2025
https://www.cna.com.tw/news/acn/202512250110.aspx

Briefings | | |   Social Stability

China Proposes Legislation to Regulate AI-Generated Content and Protect National Security

China’s Cyberspace Administration has drafted provisional regulations to govern anthropomorphic AI interaction services, prohibiting the generation and dissemination of content that endangers national security, damages national honor and interests, or spreads rumors that disrupt economic and social order.

According to the official website of China’s Cyberspace Administration, the draft “Interim Measures for the Management of Anthropomorphic Artificial Intelligence Interaction Services” was released for public consultation on December 27th. The proposed regulations aim to promote the healthy development and standardized application of anthropomorphic AI interaction services while safeguarding national security, social public interests, and the legitimate rights of citizens, legal entities, and other organizations. The measures advocate for innovative development of these services while implementing prudent and classified supervision to prevent abuse and loss of control.

The draft outlines eight prohibited activities for providers and users of anthropomorphic interaction services. These include generating or spreading content that harms national security, damages national honor and interests, undermines ethnic unity, conducts illegal religious activities, or spreads rumors disrupting economic and social order. Additionally, the regulations prohibit content promoting obscenity, gambling, violence, or criminal instruction, as well as content that insults or defames others and infringes upon their legitimate rights.

The measures also forbid services that provide false promises significantly affecting user behavior or damage social relationships. Further restrictions address activities that harm users’ physical health through encouraging or glorifying suicide and self-harm, or damage psychological health through verbal violence and emotional manipulation. The regulations prohibit inducing unreasonable user decisions through algorithmic manipulation, information misleading, or emotional traps, as well as soliciting classified sensitive information and other violations of laws and regulations.

Source: Central News Agency (Taiwan), December 28, 2025
https://www.cna.com.tw/news/acn/202512280074.aspx

Briefings | | |   Government/Politics Information/Technology

Chinese Buyers Leads Foreign Land Acquisitions in Japan’s Security-Sensitive Areas

The Japanese government has released data revealing that approximately 3 percent of land and buildings acquired in nationally significant security zones during the 2024 fiscal year were purchased by foreign individuals or entities, with mainland Chinese buyers accounting for nearly half of these foreign acquisitions. According to NHK reporting, this information comes as Japan implements stricter controls over strategically important properties near military and critical infrastructure sites.

Japanese law now regulates land purchases in areas deemed crucial for national security. The government has designated zones surrounding Self-Defense Force facilities, nuclear power plants, and other vital installations as either “areas of concern” or “areas of special concern” under this legal framework. The recent data covers all land and building transactions within these protected zones throughout the 2024 fiscal year.

Of the 113,827 newly acquired properties identified within these security-sensitive areas, 3,498 transactions involved foreign buyers, representing 3.1 percent of the total. Mainland Chinese individuals and corporations led with 1,674 acquisitions, followed by Taiwan with 414 purchases and South Korea with 378 transactions.

Under current legislation, the government possesses authority to issue orders or advisories if land use within these zones interferes with the functioning of important facilities. Authorities can demand cessation of specific land activities deemed problematic. However, the government confirmed that no cases warranting such intervention were identified during this statistical survey period, suggesting all foreign acquisitions complied with existing regulations and posed no immediate concerns to national security operations.

Source: NHK, December 16, 2025
https://www3.nhk.or.jp/nhkworld/zh/news/20251216_ML04/

Briefings | | |   Defense/Military Geo-Strategic Trend

Members of Chinese Zion Church Arrested Amid Escalating Religious Crackdown

Eighteen pastors and members of China’s Zion Church have been formally arrested, marking the latest casualties in the government’s suppression of urban house churches. Religious observers report that 2025 has brought noticeably tighter religious policies, with increased arrests, interrogations of church personnel, and new regulations making faith propagation more difficult.

Since a large-scale cross-provincial crackdown on Zion Church began on October 9, eighteen of the twenty-three detained pastors and congregants have been formally arrested by prosecutors in Beihai, Guangxi, while five were released on bail. Similar cases have emerged beyond Beijing’s Zion Church, with incidents reported in Linfen, Shanxi; Changsha, Hunan; and Xi’an, Shaanxi. In May, Pastor Gao Quanfu from Xi’an’s Light of Zion Church was detained for “using superstitious activities to undermine law implementation,” and in June, several members of Linfen’s Golden Lampstand Church received prison sentences for fraud.

While Christianity is among China’s five legally recognized religions, only registered Three-Self churches under official supervision are sanctioned. Numerous house churches face mounting pressure since President Xi Jinping took power, as they are considered illegal gatherings. Even credentialed Three-Self church pastors now face restrictions when preaching at other congregations, and government officials have reportedly been transferred after faith-related inquiries, despite religious freedom technically being permitted for non-Party members.

Buddhism, traditionally less persecuted, saw a major case this year when Shi Yongxin, former abbot of Shaolin Temple, was arrested in November following investigations into criminal activities and violations of Buddhist precepts, despite decade-old allegations of misconduct previously going unaddressed. Yiguandao followers, practicing a faith outside the five recognized religions, face heightened exit-entry risks, with ten Taiwanese adherents detained in mainland China over the past year.

New regulations implemented throughout 2025 have systematized religious control, requiring foreigners and Hong Kong, Macau, and Taiwan residents to obtain special approval for religious activities, and restricting online preaching to licensed organizations only. Despite these measures, some house churches continue operating through small encrypted groups and trusted networks, carefully avoiding official detection.

Source: Central News Agency (Taiwan), November 20, 2025
https://www.cna.com.tw/news/acn/202511200360.aspx

Briefings | | |   Social Stability

Chinese Tourists Shift from Japan to South Korea Amid Diplomatic Tensions

Beijing’s response to Japanese Prime Minister Sanae Takaichi’s recent remarks about Taiwan have escalated tensions between China and Japan, with Chinese authorities advising citizens against traveling to Japan. The impact on tourism has been swift and significant, with travel platform data revealing a dramatic reshuffling of popular outbound destinations.

Following the government’s advisory, major Chinese travel companies report that tourists have begun canceling and modifying their Japan travel plans over the past two days. Travel agencies are actively coordinating with hotels to arrange penalty-free cancellations. A representative from a major travel enterprise indicated that all promotional content related to Japan tourism has been removed from their platforms, and they anticipate declining prices for flights and hotels to Japan in the coming period.

Japan has traditionally been the top choice for Chinese outbound travelers. However, industry insiders now estimate that Japan will drop out of the top ten popular destinations during the upcoming New Year and Lunar New Year holiday periods. One consumer interviewed explained that after preparing for a year-end Japan trip—including visa applications, flight bookings, and hotel selections—they canceled everything and switched to Southeast Asian destinations including Singapore, Malaysia, and Thailand.

Data from Chinese travel platform Qunar shows that South Korea has surged to become the most popular outbound destination based on international flight bookings between November 15-16, with Seoul being the most searched city. Flight bookings to Thailand, Malaysia, Singapore, Vietnam, and Indonesia have also increased substantially.

According to Japan National Tourism Organization statistics, Chinese visitors to Japan totaled 6.98 million in 2024, representing a 187.9 percent increase, and accounted for approximately 20-25 percent of all visitors. Japanese industry observers believe the sharp decline in Chinese tourists will significantly impact Japan’s tourism, retail, and consumer sectors.

Source: Central News Agency (Taiwan), November 18, 2025
https://www.cna.com.tw/news/acn/202511180197.aspx

Briefings | | |   Geo-Strategic Trend

China Studies Drone Swarms to Counter Starlink in Potential Taiwan Conflict

Chinese military researchers are investigating how to effectively disrupt Starlink satellite communications in Taiwan during a potential conflict, requiring at least 1,000 to 2,000 drone-mounted jamming devices to suppress the system, according to a report by Hong Kong’s South China Morning Post.

The urgency stems from Ukraine’s battlefield success with Starlink following Russia’s February 2022 invasion. After Elon Musk’s SpaceX provided thousands of Starlink terminals to Kyiv within days, Russian forces initially managed to jam the signals. However, SpaceX quietly updated its software and satellite configurations, rendering Russian jamming ineffective and shifting battlefield advantage to Ukraine. This success shocked military establishments worldwide, particularly China’s.

Chinese military authorities subsequently began assessing how to conduct effective electronic warfare if Taiwan obtained Starlink access during a conflict. Research teams from Zhejiang University and Beijing Institute of Technology, which maintains close ties with China’s military, published the most comprehensive public analysis to date in early November in the journal Systems Engineering and Electronics.

The study concluded that traditional ground-based jamming methods are insufficient against Starlink’s large low-orbit satellite constellation and advanced communication technologies, including frequency hopping and adaptive systems. Computer simulations indicate China would need a “distributed jamming” strategy deploying hundreds or thousands of small, synchronized airborne jammers carried by drones, balloons, or aircraft to create an electromagnetic barrier.

Under optimal conditions, each jamming device could suppress Starlink connectivity across approximately 38.5 square kilometers. Given Taiwan’s roughly 36,000 square kilometers, fully suppressing coverage would require at least 935 synchronized devices on drones or balloons. Lower-powered equipment would necessitate approximately 2,000 units.

Researchers acknowledged these figures don’t account for terrain interference, equipment attrition, or Starlink’s continuously improving anti-jamming capabilities, meaning actual requirements could be considerably higher. They emphasized that since many of Starlink’s core technologies remain classified, their simulation data represents only preliminary assessments.

Source: Central News Agency (Taiwan), November 23, 2025
https://www.cna.com.tw/news/acn/202511230163.aspx

Briefings | | |   US-China Relations