Economy/Resources - 11. page

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

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

Rents on China’s major commercial streets fell for another year in 2025, with declines accelerating compared to the previous year, according to new data released by the China Index Academy.

The report, which tracked 100 major commercial streets across 15 key cities, showed rents dropped 0.81 percent year-on-year in 2025 — a steeper decline than the 0.42 percent fall recorded in 2024, widening the gap by 0.39 percentage points. In the second half of 2025 alone, average rents on these streets stood at RMB 24.05 yuan per square meter per day (approximately USD $3.29), down 0.47 percent from the first half of the year, with the pace of decline also quickening.

The China Index Academy identified three main reasons behind the sustained downturn. First, growth in restaurant and dining revenues has slowed significantly, putting pressure on rents since the food and beverage sector has long been a cornerstone of commercial street activity. Second, large, experience-oriented shopping malls have drawn foot traffic away from traditional street-front retail areas. Third, many commercial streets have deliberately cut rents to retain tenants and maintain occupancy rates — a strategy of trading price for volume.

By comparison, major shopping malls fared somewhat better. Their average daily rent was RMB 26.99 yuan per square meter per day (approximately USD $3.70) in 2025, falling only 0.34 percent year-on-year — less than half the rate of decline seen on commercial streets — suggesting that malls are proving more resilient.

The report noted that a small number of landmark commercial streets in prime urban locations, as well as those with strong cultural or tourism appeal, have held up better, benefiting from relatively stable foot traffic and consumer spending power.

Source: Central News Agency (Taiwan), February 23, 2026
https://www.cna.com.tw/news/acn/202602230260.aspx

Robots took center stage at this year’s China Central Television (CCTV) Spring Festival Gala, performing martial arts, participating in comedy sketches, and dancing alongside human performers. In one standout segment “Martial Bot,” robotic masters sparred with human performers, executing backflips and nunchaku routines that demonstrated impressive balance and force control. While the spectacle thrilled audiences and buoyed investor sentiment in robot-related stocks, industry analysts say the display masked deeper structural problems facing the sector.

According to financial media outlets Caijing and Lanjing Technology, each of the four participating robotics companies — Unitree Robotics, Galaxy General, Magic Atom, and Songyan Power — invested close to 100 million yuan (approximately $13.7 million USD) for the appearance. Despite the massive national exposure, analysts argue the return on investment is nearly impossible to quantify, as humanoid robots remain largely confined to what they describe as the “laboratory” of technology, capital, and commerce.

Tech platform Huxiu noted that the gala amounted to a “high-cost attention competition,” and that the industry’s real challenges are cash flow, scalable validation, and customer trust. Research conducted at the end of last year found that most embodied AI manufacturers are already struggling with insufficient orders, with real market demand unable to absorb projected 2025 production capacity.

According to IDC data cited by the Wu Xiaobo Channel, global humanoid robot shipments stand at just 13,000 to 18,000 units. Unitree founder Wang Xingxing predicted “tens of thousands” of units could roll off production lines in 2026 — a negligible figure relative to China’s 1.4 billion potential consumers.

Analysts draw a sobering comparison to China’s electric vehicle industry, which took roughly 30 years from its 1992 designation as a national priority to achieving a 35% market penetration rate in 2023. Robots, they suggest, face a similarly long road — and are unlikely to leap from their first steps directly into a sprint.

Source: Central News Agency (Taiwan), February 19, 2026
https://www.cna.com.tw/news/acn/202602190157.aspx

The Japan Chamber of Commerce and Industry in China released its 8th member enterprise survey on February 10 in Beijing, covering 1,427 Japanese-invested companies operating in China between July and December 2025 across manufacturing, services, and other sectors. The findings paint a cautious picture of Japanese business sentiment in China.

Only 1% of surveyed companies said China’s economy had “improved,” while nearly half believed it was “deteriorating or will continue to deteriorate” — a proportion largely unchanged since the first survey three years ago. Just 17% of companies planned to increase investment in China, while over 40% said they would reduce or entirely halt investment. Most firms opted to maintain existing operations while cutting costs, and some were evaluating a phased exit from the Chinese market.

Key pressures cited included falling product prices, rising labor costs, weak domestic demand, geopolitical instability, and institutional uncertainties around customs and tax enforcement. Some firms also flagged concerns about policy transparency, regulatory consistency, and personnel safety.

Industry observers noted the broader implications. A Jiangsu-based business association member said that shrinking Japanese investment would affect supply chain stability, particularly in technology cooperation and order reliability. A Zhejiang investment consultant emphasized that Japanese firms collectively maintain a presence worth hundreds of billions of dollars (~$100+ billion USD) in China, and their potential withdrawal could deprive numerous Chinese upstream and downstream firms of critical orders.

A Shenzhen-based executive pointed to deepening sector ties — in automotive, electronics, precision manufacturing, chemicals, and retail — noting that while some factories like Canon’s Zhongshan plant have closed and Sony has scaled back certain operations, these represent business-line adjustments rather than full exits.

A Shandong scholar linked the conservative investment trend to rising geopolitical friction, including Japan’s stance on Taiwan and shifting U.S.-China relations, along with a broader multinational trend of diversifying production to Southeast Asia and India. He concluded that future foreign investment flows into China will hinge on improvements in market access, policy stability, and the overall business environment.

Source: Radio Free Asia, February 20, 2026
https://www.rfa.org/mandarin/shangye/jingji/2026/02/20/china-japan-investment-withdrawal/

China’s cyberspace authority has initiated a month-long crackdown on online content that promotes anti-marriage and anti-childbearing attitudes, as Beijing intensifies efforts to address the country’s declining birth rate. The Cyberspace Administration of China announced the “Clear and Bright: 2026 Creating a Joyful and Harmonious Spring Festival Online Environment” campaign on February 12th, targeting what authorities consider harmful online content.

The campaign focuses on four major areas of concern. First, it aims to eliminate content that deliberately stirs negative emotions, including promoting views against marriage and childbearing, inciting gender conflicts, and amplifying fears about marriage and fertility anxiety. Authorities will also crack down on ostentatious displays of wealth disguised as Spring Festival shopping comparisons and fan club activities that pit celebrities against each other.

Second, the campaign targets low-quality content generated by artificial intelligence, including illogical or hollow material, classic works altered with vulgar or violent content, and fabricated family conflict narratives designed to attract traffic. Third, authorities will combat disinformation, including false rumors about Spring Festival travel, public safety incidents, fabricated government announcements, and conspiracy theories related to holiday events.

Finally, the initiative addresses illegal activities such as online gambling promotions disguised as sports betting analysis, sexually suggestive content posted under dating or social networking pretenses, and fortune-telling services that promote feudal superstitions under the guise of fate-changing services.

The cyberspace authority emphasized that platforms must establish dedicated teams to monitor and remove illegal content during the Spring Festival period. Violating websites, accounts, and multi-channel network agencies will face strict penalties, with typical cases to be publicly disclosed to demonstrate enforcement effectiveness.

Source: Central News Agency (Taiwan), February 13, 2026
https://www.cna.com.tw/news/acn/202602130044.aspx

A smart rail transit line in Shaanxi’s Xixian New Area — once promoted as a flagship urban transport upgrade — was shut down after just 33 months of operation. Despite a 705-million-yuan (US$102 million) investment, ridership remained well below break-even levels and operating losses continued to grow, prompting authorities to terminate service and dismantle the infrastructure. The case reflects a broader national pattern in which newly built rail systems in several cities have been suspended, left idle, or halted due to weak demand.

Zhuhai Tram Line 1 in Guangdong Province illustrates the challenge. Built at a cost of about 1.5 billion yuan, it operated for fewer than four years before closing and is now being dismantled. Average daily ridership reached only a small fraction of projections, requiring significant public subsidies. A similar situation occurred in Tianshui, Gansu Province, where inspectors criticized a tram project as unrealistic and debt-driven after revenues failed to cover operating costs. Several BYD SkyRail projects have likewise stalled amid tighter regulations and financing constraints.

Many of these projects share underlying weaknesses: routes often disconnected from major residential and employment centers, and planning prioritized funding opportunities and development branding over practical transportation needs. When measured against real travel demand, these systems have struggled to justify their costs, resulting in financial strain and early shutdowns.

Source: NetEase, January 30, 2026
https://www.163.com/dy/article/KKI9GL7H0556818Z.html