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China to Pay $400 Million Compensation for Ecuador Hydropower Project Defects

China’s Belt and Road Initiative (BRI) has suffered a significant setback. China Power Construction has agreed to pay approximately $400 million in compensation to the government of Ecuador to cover losses caused by defects and quality problems at the Coca Codo Sinclair Hydropower Project, a flagship infrastructure project linked to the BRI. The case is reportedly the first instance in which a large-scale BRI project has resulted in compensation due to construction flaws, raising broader concerns about the execution and long-term sustainability of China’s overseas infrastructure ventures.

China Hydropower signed an EPC (engineering, procurement, and construction) contract for the project on October 5, 2009, covering site selection, geological surveys, and engineering design. However, construction was plagued by setbacks, including serious on-site accidents and repeated cost increases cited by the contractor. As a result, the project’s total cost rose from an initial $1.7 billion to $2.7 billion. After delays of nearly ten months, the hydropower plant was eventually completed. Xi Jinping, accompanied by his wife Peng Liyuan, traveled to Ecuador’s capital to attend the inauguration ceremony.

Source: China News, December 14, 2025
https://news.creaders.net/china/2025/12/14/2948527.html

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CNA: China’s Housing Market Expected to Continue Its Decline in 2026

Primary Taiwanese news agency Central News Agency (CNA) recently reported that, China’s real estate market remains sluggish, with the downturn expected to continue in 2026. China’s Index Academy, an official real estate market research institution, predicted in its “China Real Estate Market Outlook for 2026 Report” that the sales of newly built commercial housing will decrease by 6.2 percent year-over-year in 2026.

The Report points out that, under the government policy guidance of controlling new construction and optimizing existing stock, the new construction work is expected to decrease by 8.6 percent and the nationwide total real estate investment will decrease by 11 percent year-over-year in 2026.

Looking back at the Chinese housing market in 2025, the Report shows that the cumulative price of secondhand homes in 100 cities fell by 8.36 percent last year. Also, according to the latest statistics from China’s National Bureau of Statistics, from January to November 2025, national real estate development investment decreased by 15.9 percent year-over-year, with residential investment decreasing by 15 percent year-over-year, and the sales of newly built commercial housing decreased by 7.8 percent year-over-year.

A sluggish Chinese real estate market is dragging down economic growth. The International Monetary Fund (IMF) stated last December that, while China’s economic growth is showing resilience, weak domestic demand and deflationary pressures are making imbalances significant. The key policy priority is to shift towards a consumption-driven economic growth model, reducing over-reliance on exports and government investment.

Source: CNA, January 2, 2026
https://www.cna.com.tw/news/acn/202601020079.aspx

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China Heightens Silver Export Controls in Line with Rare Earth Standards

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that China has tightened its export controls on silver, bringing controls for the precious metal in line with those on rare earth minerals. The new export control policy for silver officially took effect on January 1, upgrading from the previous quota system to a strict “one-order-one-approval” license system.

Only companies with an annual output of more than 40 or 80 tons of silver (depending on which region of China the company is located in) and a demonstrated history of three consecutive years of exports can apply for qualifications to continue exporting under the new policy. Approval scope for exports covers key dimensions such as buyer background and compliance of use, and the control period will last at least until the end of 2027. The new policy marks the formal inclusion of silver in China’s national strategic resource list, upgrading it from a “commodity” to a “strategic material,” with export management now on par with rare earths.

Elon Musk recently posted on social media platform X: “This is not a good thing. Silver is needed in many industrial production processes.” Silver is crucial to the U.S. industrial and defense supply chain. The U.S. added silver to its National Critical Minerals List last November, citing its wide applications in areas such as circuitry, batteries, solar panels, and antibacterial medical devices.

China has long been one of the world’s largest silver producers, at one point contributing nearly 90 percent of global production (including byproducts).

Source: Lianhe Zaobao, January 2, 2026
https://www.zaobao.com.sg/finance/china/story20260102-8044089

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China’s Railway Investment Reaches Record High Despite Mounting Debt Concerns

China’s railway investment reached a record high in 2025 despite ongoing concerns about overexpansion and operational losses in the country’s high-speed rail network. The China State Railway Group announced that national railway fixed asset investment totaled 901.5 billion yuan (approximately $124 billion) in 2025, representing a 6 percent year-on-year increase and surpassing all previous years.

The 2025 figure marks a significant milestone in China’s railway development trajectory. From 2021 to 2024, annual investments ranged from 710.9 billion to 850.6 billion yuan (approximately $98 billion to $117 billion), while the 2016-2020 period saw investments mostly hovering between 801 billion and 802.9 billion yuan (approximately $110 billion to $111 billion), except for 2020’s 781.9 billion yuan (approximately $108 billion).

In 2025, China opened 3,109 kilometers (1,931 miles) of new railway lines, with high-speed rail accounting for 2,862 kilometers (1,778 miles). This expansion brought the nation’s total railway network to 165,000 kilometers (102,526 miles). Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, described the investment as a strategic cornerstone for economic stability and a catalyst for unlocking domestic consumption potential.

However, this expansion comes at a significant financial cost. According to Ming Pao‘s recent report, the China State Railway Group’s total debt reached 6.2 trillion yuan (approximately $855 billion) by the end of 2024, with a debt ratio of 63.52 percent. Only a handful of routes connecting economically developed and densely populated areas—including the Beijing-Shanghai, Beijing-Tianjin, Shanghai-Hangzhou, Shanghai-Nanjing, Nanjing-Hangzhou, and Guangzhou-Shenzhen-Hong Kong lines—are profitable, representing merely 5 percent of the country’s total high-speed rail network. Additionally, at least 26 high-speed railway stations were reportedly idle due to remote locations, inadequate surrounding facilities, and low passenger traffic.

Source: Central News Agency (Taiwan), January 4, 2026
https://www.cna.com.tw/news/acn/202601040175.aspx

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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

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CNA: Porsche Sales in China Plummeted

Primary Taiwanese news agency Central News Agency (CNA) recently reported that, in the first three quarters of this year, Porsche sold only 32,000 vehicles in China, a sharp drop of 26 percent compared to the same period last year, and a nearly two-thirds drop from the peak sales of 95,000 vehicles in 2021.

German luxury car brand Porsche entered the Chinese market in 2001, and its sales have continued to climb ever since. In 2015, China became Porsche’s largest single market globally. During peak sales periods, Chinese consumers even had to pay extra to buy a Porsche. However, since the significant growth of new energy vehicles in China in 2023, Porsche’s sales in the Chinese market have been under pressure, with the decline becoming increasingly larger in the past two years. Its electric vehicles are expensive, but their smart features are not as advanced as those of Chinese electric vehicles.

Very recently, Porsche China confirmed to the media that the company’s self-built charging network will gradually cease operation starting March 1st, 2026, closing a total of about 200 charging stations. In the meantime, Porsche centers in large cities of Zhengzhou and Guiyang lately closed down without warning – showrooms were emptied overnight, prompting car owners who were unwilling to accept their losses to call the police.

Source: CNA, December 26, 2025
https://www.cna.com.tw/news/acn/202512260226.aspx

Briefings | | |   Economy/Resources Geo-Strategic Trend

Beijing Tightens Control Over Online Commentary on the Real Estate Market

Chinese authorities in Beijing are stepping up censorship and regulation of social media content related to the struggling property sector. Multiple government agencies have held meetings with major online platforms — including Douyin, Xiaohongshu (Little Red Book), Beike, 58.com, and Xianyu — urging them to remove posts that “talk down” the real estate market or risk triggering public panic.

Officials said some accounts and posts were spreading pessimistic or misleading information that could undermine market confidence. Platforms were instructed to conduct internal reviews, delete problematic content and accounts, and strengthen long-term content moderation mechanisms. Authorities report that more than 17,000 pieces of content have already been removed.

These measures are part of broader efforts by the government to manage public discourse and maintain stability in the property market, which has remained under pressure amid China’s economic slowdown.

Source: Central News Agency (Taiwan), December 18, 2025
https://www.cna.com.tw/news/acn/202512180084.aspx

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CNA: For the First Time in 30 Years, China’s 2025 Fixed-Asset Investment May Turn Negative

China’s National Bureau of Statistics reported that from January to November 2025, the country’s fixed-asset investment declined 2.6 percent year on year, a sharper drop than the 1.7 percent decrease recorded through October. Based on this trajectory, Japanese media predict that China’s total fixed-asset investment for all of 2025 could register an overall decline, marking the first negative growth since the data series began in 1995.

The report noted that investment has been contracting on a month-by-month basis since February, signaling that China’s traditional, investment-driven growth model is losing momentum. Analysts attribute the downturn to mounting fiscal pressures on local governments, which have curtailed spending, as well as central government efforts to rein in excessive investment in certain sectors.

Economists warn that continued weakness in investment could further dampen domestic demand and slow China’s overall economic growth.

Source: Central News Agency (Taiwan), December 16, 2025
https://www.cna.com.tw/news/acn/202512160236.aspx

Briefings | | |   Economy/Resources