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China’s Export Tax Rebates Increased Significantly in the First Two Months

China Business Network (CBN), headquartered in Shanghai, recently reported that the Chinese Ministry of Finance has disclosed China’s fiscal revenue and expenditure numbers for January and February 2025.

The official data showed that a decline in import trade volume in the first two months of 2025 caused significant declines in government revenue from value-added tax (VAT), consumption tax, and tariffs on imports. In order to support foreign trade, export tax rebates reached 507.4 billion yuan (around US$69.8 billion), a year-over-year increase of 16.9 percent in the first two months.

During the same period, China’s national export volume was 3.88 trillion yuan (around US$533.84 billion), a year-over-year increase of only 3.4 percent, and the industrial export delivery value was only 2.28 trillion yuan (around US$313.7 billion), a year-over-year increase of only 6.2 percent. Export tax rebates saw a significant increase of 16.9 percent. The growth rate of export tax rebates was five times the growth rate of export volumes. China’s export tax rebate rate is as high as 13.1 percent, while the highest tax rate for industrial products value-added tax (VAT) is only 13 percent.

Sources:
(1) CBN, March 24, 2025
https://www.yicai.com/news/102531335.html
(2) Xueqiu, March 27, 2025
https://xueqiu.com/3014396207/329093365

Briefings | | |   Economy/Resources

RTHK: Fitch Lowers China’s Sovereign Credit Rating

Radio Television Hong Kong (RTHK, a top government-owned broadcasting organization based in Hong Kong) recently reported on April 3 that international rating agency Fitch had lowered China’s sovereign credit rating from A+ to A.

Fitch’s China rating changed with a stable rating outlook to reflect expectations of continued weakness in China’s public finances and rapid increase in public debt. Experts anticipate that a global economic slowdown caused by the U.S. administration’s tariff hikes will negatively impact the Chinese economy.

China’s Ministry of Finance responded that the Fitch analysis was biased and “could not fully and objectively reflect China’s actual situation.” The Ministry also indicated that the rating “does not reflect the global and unanimous perception of China’s economic improvement.” Thus, the Ministry expressed “deep regret and disapproval” of the rating. The Chinese government reportedly “had a lot of in-depth communications with the Fitch Ratings team” and “has reserved sufficient policy space” to promptly study and dynamically adjust policies accordingly.

Fitch says the impacts of the latest U.S. reciprocal tariffs have not been factored into the new rating.

Sources:
(1) RTHK, April 3, 2025
https://gbcode.rthk.hk/TuniS/news.rthk.hk/rthk/ch/component/k2/1798856-20250403.htm
(2) Xinhua, April 3, 2025
http://www.news.cn/fortune/20250404/7d54562665984ef7b65b46b65d06c6bf/c.html

Briefings | | |   Economy/Resources US-China Relations

Study Finds Abnormally High Lithium Levels in Pregnant Women and Infants in Beijing

A March 5 report from the South China Morning Post revealed that lithium concentrations in the bodies of pregnant women and infants in Beijing are abnormally high – 20 times higher than in other industrial cities in China.

Professor Hu Ligang, an environmental chemist at the Chinese Academy of Sciences, monitored lithium concentrations in maternal and umbilical cord blood in Beijing and Changsha. The study found that in 2023, the average lithium concentration in the blood of pregnant women in Changsha, Hunan Province, was 0.61 micrograms per liter (mcg/L), but in Beijing, the number was 27.31 mcg/L.

In Changsha, the lithium found in infants’ umbilical cord blood mainly came from grains, vegetables, and drinking water. However, in Beijing, 96% of the lithium intake by mothers could not be traced to known sources such as food, water, or air. This suggests there might exist a stable, unidentified source of lithium exposure in Beijing.

Excessive lithium levels in the human body can lead to lithium poisoning, which affects all major organs, particularly the kidneys, thyroid, and nervous system.

Source: Radio France International, March 17, 2025
https://www.rfi.fr/cn/专栏检索/环境与发展/20250317-研究显示-北京孕妇脐带血锂浓度超高而暴露源不明

Briefings | | |   Economy/Resources Information/Technology Social Stability

CNA: Shanghai’s Population Decreased in 2024

Primary Taiwanese news agency Central News Agency (CNA) has published a report on the Shanghai Civil Economics and Social Development Statistics for 2024, recently released by the authorities in Shanghai. According to the official data, the city’s permanent population at the end of 2024 was 24.8026 million. Among them, permanent residents who were not born in Shanghai numbered 9.8349 million, a year-over-year decline of 237,900.

In the past year, the headcount of westerners in Shanghai significantly decreased. Due to a decreasing overall population, Shanghai’s total retail sales of consumer goods also decreased throughout the year. Over the past four years, the total reduction of the non-native-Shanghainese population living in Shanghai was 640,000. In 2024, this population fell to less than 10 million for the first time in recent history.

Source: CNA, March 26, 2025
https://www.cna.com.tw/news/acn/202503260062.aspx

Briefings | | |   Economy/Resources Social Stability

People’s Daily on China’s International Vocational Education Program

CCP mouthpiece People’s Daily recently reported that Chinese vocational colleges are actively engaging in “internationalization” through a dual approach. The following are key points from that article.

On one hand, Chinese vocational colleges focus on “bringing in” (i.e. attracting and training) international students and conducting various global exchange activities. On the other hand, they pursue high-quality “going out” initiatives such as establishing overseas educational collaborations and creating international education brands including the Luban Workshop, the Chinese Language Workshop, and the Modern Craftsman Academy. “The ‘Chinese + Vocational Skills’ model not only enhances foreign learners’ employability and cross-cultural communication skills but also supports deeper international industrial cooperation and the integration of industry and education.” Training qualified faculty is seen as a key factor.

On one hand, the teachers should have effective Chinese language teaching skills and the ability to promote Chinese culture. Currently, Beijing has established 19 international Chinese language teacher training centers in China to enhance teachers’ professional competence and teaching abilities. These centers primarily train Chinese teachers and volunteers from vocational schools.

On the other hand, vocational skills training for overseas faculty is also a priority. In November 2020, the first national “Chinese + Vocational Skills” International Promotion Base was launched by the Center for Language Education and Cooperation under China’s Ministry of Education and Nanjing Vocational University of Industry Technology. To date, the base has conducted over 20 overseas teacher training programs, training more than 4,000 local (foreign) educators in countries and regions involved in the Belt and Road Initiative.

In addition to training programs, the base also released the bilingual textbook series – New Silk Road “Chinese + Vocational Skills” – in December 2023. Covering six disciplines, including mechatronics, automotive service engineering, and network engineering, the series consists of 19 volumes spanning beginner, intermediate, and advanced levels. The textbooks were developed based on on-site research into the use of Chinese in 15 job categories in the ASEAN countries. Language teachers and technical experts collaborated through mutual training and joint discussions, presenting typical work tasks and scenarios in progressively structured and easily understandable Chinese, supplemented with English explanations.

Source: People’s Daily, March 21, 2025
http://edu.people.com.cn/n1/2025/0321/c1006-40443517.html

Briefings | | |   @CS Economy/Resources Government/Politics

China’s Trade Data Reflects Trump’s Tariff Hikes

The Trump administration raised tariffs on Chinese goods by 20 percent in February. On March 10, Zhong Zhengsheng, chief economist at Ping An Securities, stated that the impact of these tariff hikes has started to show in Chinese trade data. In the first week of March, there was a decline in the year-on-year growth rate of operating capacity in sectors of the Chinese economy such as steel plates, textiles, and automobiles. The decline is linked overseas tariffs and general reduced demand for Chinese exports.

Zhong pointed out that freight indicators also reflect these effects. According to the Chinese Ministry of Transport, as of the week ending March 2, port container throughput (about 50 percent of which is foreign trade, typically involving exports of transporting machinery, textiles, home appliances, and light industrial products) increased by only 2.8 percent year-on-year, a 4.3 percentage-point drop from the previous figure year’s rate of change. International cargo flights (primarily used for high-value products like consumer electronics and cross-border e-commerce) saw a 25.8 percent year-on-year increase, a 1.2 percentage-point drop from the prior year’s figure. Port cargo throughput (about 30 percent of which is related to foreign trade) rose by 2.5 percent year-on-year, a 2.2 percentage-point drop from the previous figure.

Data recently released by China’s General Administration of Customs showed that, in dollar terms, China’s exports grew by 2.3 percent year-on-year in January and February, short of the expected 5 percent growth and was a significant slowdown from the 10.7 percent growth rate recorded in December.

Source: Epoch Times, March 13, 2025
https://www.epochtimes.com/gb/25/3/13/n14457529.htm

Briefings | | |   @CS Economy/Resources US-China Relations

The CCP Downgrades Farmers’ Medical Insurance Coverage

According to an announcement issued by China’s National Healthcare Security Administration, starting from 2025, farmers participating in the New Rural Cooperative Medical Insurance (NRCMI) will only be allowed to seek medical treatment at county-level or lower-tier hospitals, and medical expense reimbursements will also be limited to these healthcare institutions. The Chinese government stated that this policy is “a major initiative to improve the grassroots healthcare system at the lower levels.”

Under this new regulation, farmers will be eligible for reimbursements if they receive treatment at county-level or lower-tier hospitals. However, if they choose to seek treatment at provincial or higher-level hospitals, their medical expenses will no longer be covered.

Some farmers have expressed concerns that county-level hospitals have limited medical expertise and equipment, making it difficult to treat complex diseases. They feel that this is a “downgrade” of the medical insurance service and that it is unfair to them.

Source: Radio Free Asia, March 13, 2025
https://www.rfa.org/mandarin/shehui/2025/03/13/china-farmers-medicalinsurance-coverage-deduce/

Briefings | | |   Economy/Resources

Nikkei Chinese: Honda Halves Engine Manufacturing Capacity in Guangzhou

Nikkei Chinese Edition recently reported that Japanese automaker Honda plans to cut in half its production capacity at its engine factory in Guangzhou, Guangdong Province, China. This will represent a reduction in engine manufacturing equivalent to 30 percent of the volume of all engine-equipped Honda cars that are sold in the Chinese market.

The report stated that Japanese automakers are facing difficulties in the Chinese market. Honda’s production cut will become the largest among Japanese automakers in China. The production capacity of the “Dongfeng Honda Engine” joint venture between Honda and China Dongfeng Motor Group will be reduced from 520,000 units per year to half of that figure. A production line will be suspended by the end of March.

Honda’s sales in China have declined steeply in recent years. Sales volume in 2024 amounted to 850,000 units, a 33 percent decrease from 2023. In response to these challenges, Honda China is “advancing its transformation to solely producing electric vehicles.” In 2024, Honda’s first electric vehicle factory in Wuhan City will start production. Dedicated EV factories have also been opened in Guangzhou, ensuring a production capacity of 240,000 EVs per year.

Honda is also accelerating its software development in China, with a focus on driving assistance and entertainment capabilities based in artificial intelligence, aiming to improve the competitiveness of their electric vehicles.

Source: Nikkei Chinese, March 11, 2025
https://cn.nikkei.com/industry/icar/58240-2025-03-11-09-22-52.html

Briefings | | |   Economy/Resources