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Monthly Archives: April 2026 - 2. page

China’s “Race to the Bottom”: How Local Government Subsidies Fueled the Rise and Fall of Neta Auto

A cautionary tale of misaligned incentives and industrial overreach has emerged from China, as state television’s Focal Point program named electric vehicle maker Neta Auto — and its parent company Hozon New Energy — as a prime example of the destructive consequences of local government investment competition.

Eager to generate economic results, local governments across China have long competed fiercely to attract major enterprises through lavish incentives. Yichun, a city in Jiangxi province with no prior automotive industry base, invested 500 million yuan (approximately $68.8 million USD) to lure Neta Auto into building a factory there. Incentives included equity stakes, government-built facilities, ten years of rent-free terms, and a 20,000 yuan (approximately $2,750 USD) subsidy for every vehicle sold locally. Similar arrangements were made in Tongxiang, Zhejiang, and Nanning, Guangxi, where land and factory costs were also borne by government-affiliated enterprises.

What once looked like a regional development triumph has unraveled dramatically. Neta Auto’s Yichun “smart factory” now stands empty. Between 2021 and 2023, Hozon New Energy accumulated net losses of 18.3 billion yuan (approximately $2.52 billion USD) — losing over 80,000 yuan (approximately $11,000 USD) on every vehicle sold. By 2024, all three production lines had halted, and in the second half of 2025, the company entered bankruptcy restructuring proceedings.

Chinese officials have since acknowledged the systemic problem. A deputy director at the National Development and Reform Commission warned that subsidy competitions distort market mechanisms, encourage irresponsible corporate investment, and fuel industrial overcapacity and price wars — dynamics visible across multiple collapsed EV brands including HiPhi, Byton, and Bordrin, all of which received local state capital. Regulators have signaled these practices must be reined in to protect China’s unified national market.

Source: Central News Agency (Taiwan), April 23, 2026
https://www.cna.com.tw/news/acn/202604230248.aspx

Briefings | | |   Economy/Resources

Middle East Car Dealers Turn to Chinese Brands as Hormuz Strait Disruptions Stall Japanese Auto Supply

Disruptions to shipping through the Strait of Hormuz, caused by ongoing Middle East conflicts, have significantly impacted the supply of Japanese cars to the region, opening a rare window of opportunity for Chinese automakers to expand their foothold in the market.

According to China’s Daily Economic News, major Japanese automakers including Toyota, Mazda, Nissan, and Subaru have cut production and suspended exports to the Middle East due to the navigational difficulties in the Strait of Hormuz. Some regional car dealers have been left waiting over two months with no vehicles to sell.

Faced with an acute shortage, Middle Eastern dealers have begun urgently shifting their purchasing orders toward Chinese-made vehicles. Many took the opportunity to attend the Beijing Auto Show, which opened on the 24th, to negotiate directly with Chinese manufacturers. Industry observers say this signals a loosening of Japanese automakers’ long-dominant grip on the Middle East market.

One such dealer, Abdullah, who operates in Riyadh, Saudi Arabia, and sells both Toyota and Chinese brand Changan vehicles, said the sudden drop in Toyota supply left him with almost nothing to offer customers. He has since converted most of his showroom space to display Changan models. Abdullah noted that Chinese brand vehicles are typically 20 percent to 40 percent cheaper than comparable Japanese or Korean models, and come well-equipped with features — making them increasingly attractive to younger Saudi consumers.

The shift reflects a broader structural opportunity for Chinese automakers in a region where Japanese brands have long held dominance. If supply chain disruptions persist, China’s auto industry could secure a lasting and meaningful presence in the Middle East market.

Source: Central News Agency (Taiwan), April 26, 2026
https://www.cna.com.tw/news/acn/202604260163.aspx

Briefings | | |   Geo-Strategic Trend

Documents on China’s Crackdown on Cross-Border Internet Access and VPN Use

Recently, based on reports from some internet users, the Chinese government launched a new and strict crackdown in early April 2026 targeting cross-border internet access and censorship circumvention (such as Virtual Private Network (VPN) use). Unlike previous scattered blocking efforts, this campaign appears highly coordinated across multiple government departments and involves more aggressive technical restrictions.

Leaked or reported documents (shared by China Digital Times) suggest the following:

  1. Cyberspace Administration of China (CAC)
    The CAC scheduled a meeting on April 16 to study and implement President Xi Jinping’s “cyber power” strategy, inviting relevant officials to attend.
  2. Ministry of Industry and Information Technology (MIIT)
    A meeting was held on April 7 with major telecom companies (China Telecom, China Mobile, China Unicom) to strengthen regulation of cross-border data lines and prevent unauthorized internet connections.
  3. Shaanxi Telecom and CDN provider notice
    A directive ordered a complete ban on all overseas internet traffic, including Hong Kong, Macau, Taiwan, and other countries. It also strictly prohibited any VPN or proxy-related services. Key requirements and consequences:
    • All IPs must block access to non-mainland destinations
    • Immediate self-inspections for VPNs, proxies, or abnormal traffic
    • Violations will result in instant service termination and IP bans
    • No refunds or compensation will be provided
    • Users are responsible for backing up their data
    • Restoration of services is uncertain and depends on telecom authorities

Source: China Digital Times, April 8, 2026
https://chinadigitaltimes.net/chinese/726411.html

Briefings | | |   Government/Politics Information/Technology

People’s Daily: China’s “Lightning” Robot Shatters Records at 2026 Beijing Humanoid Half Marathon

People’s Daily recently published an article highlighting the achievements of China’s robotics industry in the humanoid half marathon, emphasizing two key technological advances over the past year.

At the 2026 Beijing E-Town Humanoid Robot Half Marathon, a Chinese robot named “Lightning,” developed by the “Qitian Dasheng” (Monkey King) team, completed the race in 50 minutes and 26 seconds—surpassing the human men’s half-marathon world record and finishing in less than one-third of last year’s winning robot time.

Just one year ago, Chinese robots struggled on the course and were mocked by some foreign media as far from mature. Today, they are capable of stable, high-speed performance, largely due to the effective integration of existing technologies.

Key advancements include:

  • BeiDou Navigation System:
    Whereas most robots previously relied on remote control, nearly 40 percent now feature autonomous navigation. BeiDou enables them to follow routes and avoid obstacles without human intervention.
  • Liquid Cooling Technology:
    High-speed running can cause joint overheating and mechanical failure. Engineers have adapted mature smartphone liquid-cooling technology to develop a “capillary-level” cooling system, ensuring reliable performance during prolonged, high-intensity operation.

Source: People’s Daily, April 23, 2026
https://www.peopleapp.com/column/30051972714-500007457951

Briefings | | |   Information/Technology

China Demonstrates Deep-Sea Cable-Cutting Capability, Raising Security Concerns

Chinese state media Xinhua News Agency reported that the research vessel “Haiyang Dizhi No. 2” (Marine Geology No. 2) recently completed a deep-sea mission, including a test of a new electro-hydraulic device capable of cutting cables at a depth of 3,500 meters. Officials described this as the first publicly acknowledged capability to cut cables at such extreme depths—deeper than most existing undersea communication infrastructure.

The technology was developed by the China Ship Scientific Research Center, a state-backed institute under U.S. sanctions. Reports suggest the device could cut even heavily protected undersea communication and power cables, potentially disrupting global connectivity during geopolitical crises.

Analysts note that China has been developing such capabilities for over a decade, supported by multiple patents and new systems designed for deep-sea cable cutting and retrieval. Additional designs reportedly extend operational depths to 4,000 meters, including specialized cutting vessels.

These developments have raised concerns that such capabilities could be used as part of a new form of warfare aimed at disrupting global communications. Analysts also point to Beijing’s usage of “gray-zone” tactics. In November 2024, the Chinese vessel “Yipeng 3” reportedly dragged its anchor for more than 100 miles (over 160 kilometers) in the Baltic Sea, severing two key undersea cables linking Finland to Germany and Sweden to Lithuania—an incident that drew global attention.

Source: Epoch Times, April 22, 2026
https://www.epochtimes.com/gb/26/4/21/n14746529.htm

Briefings | | |   @CS Defense/Military

China’s Ministry of State Security Warns of Espionage Threats to Rare Earths, Semiconductors, and Data

China’s Ministry of State Security (MSS) has published an article via its official WeChat account warning of increasing foreign espionage targeting the country’s industrial and supply chains, describing such activities as growing more covert, professional, and systematic, posing serious threats to China’s economic, technological, and data security.

The MSS highlighted a case involving the rare earth sector, which Beijing considers a strategic resource critical to advanced manufacturing and national defense. According to the article, a foreign non-ferrous metals company bribed a deputy general manager, surnamed Cheng, at a domestic rare earth firm through a Chinese intermediary employee surnamed Ye. Lured by financial gain, Cheng illegally provided seven classified state secrets to foreign parties, including details on China’s rare earth stockpiling categories, quantities, and pricing. The individuals involved were severely punished under the law. The case comes as Beijing has increasingly used rare earth export controls as a strategic tool against the United States, the European Union, and Japan since 2025.

The article also cited the case of a former semiconductor engineer surnamed Zhang, who after leaving his company violated confidentiality obligations by illegally providing core production processes and trade secrets to a foreign organization. The MSS warned this could waste years of research and development investment and weaken China’s position in the global semiconductor supply chain.

On data security, the article described a case in which a company used technical means to covertly embed itself within an e-commerce platform’s systems, stealing over one million business data records daily and illegally profiting tens of millions of yuan (approximately USD 1.4–2.8 million or more, depending on the exact figure). The MSS called this “organized, industrialized data theft” rather than simple commercial infringement.

The article concluded by urging the entire society, especially industry professionals, to remain vigilant and strengthen their awareness of confidentiality and the rule of law.

Source: Central News Agency (Taiwan), April 23, 2026
https://www.cna.com.tw/news/acn/202604230062.aspx

Briefings | | |   Geo-Strategic Trend

Ordinary Chinese Citizens Now Caught in Facial Recognition Dragnet

France’s Le Monde reported this week that ordinary Chinese citizens with no criminal or political history are receiving fines through automated facial recognition cameras, marking a notable expansion of the country’s vast surveillance apparatus into everyday life.

For years, many Chinese assumed large-scale monitoring was reserved for political dissidents, NGO workers, or activists. That assumption is now being challenged. Shanghai resident Li Yan (a pseudonym) describes himself as an entirely unremarkable citizen — no political involvement, no suspicious associations. Yet in late March, he received a police text message fining him 50 yuan (approximately $6.90 USD) for briefly riding his bicycle on a sidewalk. No officer stopped him. His bicycle had no license plate. The message cited “electronic technology” as the method of identification. After confirming with police that his face had been automatically matched through a public security camera, Li came to a quiet but unsettling realization: the anonymous space that once allowed people to get away with life’s small imperfections may be disappearing.

Le Monde notes that surveillance cameras now blanket China’s streets, though official numbers are never disclosed. Most citizens had grown accustomed to them, assuming the systems targeted others. But applying facial recognition to petty violations has drawn fresh attention. Notably, apps like WeChat and Alipay already enable near-total movement tracking, and online speech is routinely filtered. When a prominent law professor raised concerns about Beijing’s 2025 unified digital identity system, her social media account was suspended and her posts deleted.

Facial recognition in China already extends far beyond law enforcement — airports like Shanghai Hongqiao allow boarding without tickets, and gyms identify members from several meters away. Shanghai’s police began piloting facial recognition fines for unlicensed vehicles as early as 2017, but the system has since expanded dramatically. In the Xuhui district alone, 120 dedicated cameras now target cycling and scooter violations.

“This is just the beginning,” Li said. “If someone as insignificant as me can be automatically identified on any street, imagine where this is heading.”

Source: Radio France International, April 22, 2026
https://rfi.my/CdPy

Briefings | | |   Information/Technology

China’s Economic Leverage in Africa Behind Taiwan’s Blocked Presidential Trip

Taiwan’s President Lai Ching-te was forced to postpone his planned visit to the Kingdom of Eswatini, Taiwan’s only remaining African ally, after Madagascar, Mauritius, and Seychelles revoked overflight permits for his aircraft. Taiwan’s Presidential Office confirmed the delay was the result of Chinese interference, calling Beijing’s repeated claims of goodwill toward Taiwan fundamentally dishonest.

The incident drew international attention, with U.S. Republican Congressman Pat Harrigan stating on social media that China used debt leverage to pressure the three nations into blocking Taiwan’s president from their airspace — achieving a form of economic warfare without firing a single shot, given that Beijing holds more than half the debt of African continent nations.

China’s economic footprint in Africa has grown substantially in recent years. In 2025, China-Africa bilateral trade reached approximately 2.49 trillion yuan (around US$343 billion), up 18.4 percent year-on-year. Chinese exports to Africa rose 26.5 percent to roughly 1.61 trillion yuan (US$222 billion), while imports from Africa grew 6 percent to about 880 billion yuan (US$121 billion).

Among the three countries that blocked Taiwan’s flight, China-Seychelles trade reached $112 million in 2025, with Chinese imports from Seychelles surging 817.3 percent to $1.896 million. China-Madagascar trade stood at $1.673 billion, while trade with Mauritius reached $703 million in the first eight months of 2025 alone.

The episode unfolded as Chinese President Xi Jinping hosted Mozambique’s president in Beijing and reiterated plans to implement zero tariffs for 53 African nations starting May 1 — pointedly excluding Eswatini, Taiwan’s sole African diplomatically. Earlier, Chinese Vice President Han Zheng had visited Seychelles in March, with the Seychellois president affirming his country’s unwavering commitment to the one-China policy.

Source: Central News Agency (Taiwan), April 22, 2026
https://www.cna.com.tw/news/acn/202604220150.aspx

Briefings | | |   Geo-Strategic Trend