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Xi Jinping and King Tupou VI Formalize Comprehensive Strategic Partnership and Cooperation Agreements in Beijing

Nov. 27, 2025 | Geopolitics & Defense

During a state visit to Beijing, Chinese President Xi Jinping and King Tupou VI of Tonga formalized a comprehensive strategic partnership and signed multiple cooperation agreements.

**On November 25, 2025, Xi Jinping and King Tupou VI met at the Great Hall of the People, where the Tongan royal couple received a 21-gun salute, military honors, and a reviewing-stand ceremony.**
Xi and his wife, Peng Liyuan, hosted a welcoming banquet attended by Foreign Minister Wang Yi. After completing protocol formalities, both leaders witnessed the signing of several cooperation agreements and issued a Joint Statement to mark the summit’s culmination.

**Xi Jinping recalled the friendship between China and Tonga since they established diplomatic ties in 1998, emphasizing mutual respect, equality, and support for each other’s core interests.**
He pledged that China would act as a reliable partner in safeguarding Tonga’s sovereignty and independence and deepen their comprehensive strategic partnership. Drawing on strategic development plans from the Fourth Plenary Session of the 20th Central Committee, Xi proposed implementing four global initiatives and building a China–Pacific Island Countries community with a shared future.

**Both leaders identified priority sectors for collaboration: trade and investment; modernization of agriculture and fisheries; infrastructure development; clean energy projects; healthcare enhancement; tourism promotion; and climate-change response.**
Xi also called for expanded exchanges in education, sports, youth engagement, media collaboration, and subnational governance, inviting Tongan sector representatives to visit China under South–South cooperation frameworks. King Tupou VI expressed gratitude for China’s support of Tonga’s economic and social development, welcomed deeper collaboration in these fields, reaffirmed Tonga’s adherence to the one-China principle and opposition to Taiwan independence, and voiced support for China’s global initiatives on shared development, peace, and climate cooperation.

**The visit coincided with the completion of a PLA Navy hospital ship mission in Tonga, during which the Silk Road Ark provided thousands of medical treatments and surgeries.**
Observers note that this healthcare support complements broader cooperation—including grants, low-interest loans, and debt-relief measures—that analysts say contributes to Tonga’s sustainable development and counters narratives of “debt-trap” diplomacy.

**Bilateral trade reached $69.9 million in 2024, up 21.4 percent year-on-year, and over 400 Tongan students are currently studying in China.**
Experts observe a shift from project-driven infrastructure builds toward capability-driven initiatives aligned with Tonga’s national priorities, with potential collaborations in the blue economy, green transition, renewable energy capacity building, and maritime projects. This evolving partnership meets Pacific Island expectations for cooperation without political conditions and reflects the geopolitical and economic significance of Pacific Island countries in China’s global diplomatic and development strategy.

China’s New Energy Vehicle Sector Surges with Supply Chain Clusters and Export-Led Transformation

Nov. 27, 2025 | Firms

China’s new energy vehicle sector is undergoing a transformative expansion driven by market shifts, technological innovation, and strategic industrial planning.

**In October 2025, new energy vehicles accounted for 51.6 percent of China’s total new car sales, signaling their ascent as the mainstream product in the domestic automotive market.**
This shift is fueling a technological revolution and industrial upgrade that depend on an open, shared, resilient, and sustainable supply chain to support high-quality growth across the sector.

**China retains a leading role in the global automotive supply chain, particularly in batteries, chips, and software.**
From January to October 2025, it installed 578 gigawatt-hours of power battery capacity—up 42.4 percent year-on-year—keeping its global top spot. At the same time, domestic production of advanced chassis systems for NEVs still lags behind international competitors, making this a priority area for bolstering home-grown competitiveness.

**Regional governments and industry players are clustering supply chains to achieve scale economies.**
In Huainan City, a concentrated NEV supply-chain cluster is taking shape, while automakers such as NIO are nearshoring key components to cut procurement costs by 20–30 percent and secure stable supplies amid intensifying competition.

**Exports of China’s NEVs topped two million units in the first ten months of 2025, nearly doubling year-on-year.**
Manufacturers are adopting “dual-factory” models overseas to meet localization requirements and address local labor shortages. Meanwhile, Chinese firms are shifting from simple product exports to integrated system exports, offering combined vehicle platforms and supply-chain solutions that support foreign industrial development. Deep localization of NEV technologies and products abroad has become critical for sustaining export growth. At the same time, multinational automakers operating in China are leveraging domestic parts and software innovations to strengthen an integrated global supply chain.

**Cross-industry integration is accelerating as the automotive supply chain converges with emerging sectors such as robotics and unmanned shipping, expanding growth prospects.**
The sector’s future emphasis lies in intelligence and sustainability, uniting software, hardware, and artificial intelligence throughout the value chain. Industry stakeholders are calling for unified data standards and trusted data ecosystems to optimize supply-chain efficiency and promote continuous innovation.

**Under the 14th Five-Year Plan, Chongqing positioned its intelligent connected NEV industry among national leaders and set a goal to build a world-class cluster within five years.**
The city is reinforcing leading enterprises, strengthening the full automotive industry chain, expanding “vehicle-road-cloud-network-map” applications, cultivating high-end brands, and developing an “artificial intelligence + automobile” ecosystem, alongside rolling out ultra-fast charging infrastructure and supporting growth across the entire lifecycle.

**Building on that foundation, Chongqing’s 15th Five-Year Plan aims to make the city a globally influential hub for intelligent connected NEVs.**
It targets quality upgrades in trillion-yuan industrial clusters, modernizes traditional manufacturing, and boosts capabilities through digital workshops and intelligent factories. The plan emphasizes intelligent, green, and service-oriented manufacturing, and nurtures emerging sectors—such as biomedicine, smart medical devices, intelligent sensing instruments, and the low-altitude economy—to accelerate large-scale application of new technologies and products.

**Chongqing’s broader strategy leverages science and technology innovation to establish an internationally competitive advanced manufacturing center and industrial innovation hub.**
By the end of the 15th Five-Year period, these efforts aim to underpin a modern industrial system with advanced manufacturing at its core.

### IMPACT ANALYSIS
**From this Development, various impacts could cascade through the system, to a lesser or greater extent, depending on the severity and criticality of the shocks.**

Domain	Causal Chain	Possible Outcome
Competitiveness	(NEV market share ↑ → Market-size & demand potential ↑ → Export sophistication (EXPY) delta ↑ → High-value-added export share ↑)	Rapid NEV adoption drives an upgrade in export mix, raising the share of high-value-added EV systems and integrated supply-chain solutions.
Energy & Natural Resources	(Battery production capacity ↑ → Grid-scale battery-storage fleet capacity ↑ → Renewable-generation share of electricity ↑ → CO₂-intensity of GDP change ↓)	Enhanced grid storage from expanded battery capacity boosts renewable electricity share and drives down the CO₂ intensity of GDP.
Competitiveness	(NEV exports ↑ → Trade-openness & preferential access ↑ → Real export market-share change ↑ → FDI net inflow (% GDP) ↑)	Surging NEV exports improve China’s trade openness and export market share, attracting increased FDI into auto and battery sectors.
Transportation & Logistics	(Customs-and-border clearance digitisation ↑ → Average customs-clearance time ↓ → Door-to-door export lead time ↓ → Logistics-performance index (LPI) score ↑)	Customs digitization cuts clearance and delivery times, strengthening export reliability and lifting China’s LPI score.
Firms	(Supply-chain restructuring cadence ↑ → Inventory days on hand ↓ → Capex-to-cashflow ratio ↑ → Private fixed-investment growth ↑)	Accelerated supply-chain restructuring lowers inventories and frees cash, fueling private fixed-investment growth in the NEV ecosystem.
Technology & Innovation	(Enterprise AI adoption index ↑ → AI inference cost index shift ↓ → Total-factor productivity growth from tech ↑ → Patent-to-product conversion rate ↑)	Wider enterprise AI adoption reduces inference costs, accelerating total-factor productivity gains and boosting patent-to-product conversion in NEV technologies.
Transportation & Logistics	(Nearshoring supply chains ↑ → Input-cost inflation (producer-price index) ↓ → Freight cost share of export value ↓ → Logistics carbon-neutral shipment share ↑)	Nearshoring supply chains dampens input-cost inflation and freight expenses while expanding the share of carbon-neutral logistics shipments.
Technology & Innovation	(5G standalone network coverage share ↑ → Cloud API average latency (ms) ↓ → SME digital-tool adoption index ↑ → Digital & knowledge-intensive industry share of GDP ↑)	Expanded 5G standalone coverage cuts cloud latency, spurring SME digital-tool uptake and expanding the digital and knowledge-intensive share of GDP.
Technology & Innovation	(Autonomous-vehicle regulatory readiness index ↑ → Regulatory-approval lead time (days) ↓ → Early-stage VC deal count ↑ → Unicorn creation count ↑)	Faster regulatory approval for autonomous vehicles unlocks more early-stage VC deals and increases the creation of unicorns in mobility innovation.

### BOTTOM LINE

- China’s domestic consumers have shifted decisively toward electrified mobility—new energy vehicles (NEVs) reached 51.6% of new-car sales in October 2025—which is accelerating scale economies in manufacturing and creating a larger, more sophisticated home market that will drive faster product learning cycles and higher-value export offerings.

- The rapid expansion in battery capacity—578 GWh installed from January to October 2025, up 42.4% year-on-year—directly increases grid-scale storage potential, which will smooth renewable output, raise the renewable share of electricity, and measurably reduce CO₂ intensity per unit of GDP if storage deployment and grid integration follow.

- NEV exports surpassed two million units in the first ten months of 2025, nearly doubling year-on-year, and the move to “dual-factory” overseas models plus integrated platform-and-supply-chain bundles will upgrade China’s export mix toward system-level sales and attract more foreign investment into assembly, batteries, and software R&D.

- Nearshoring and regional supply-chain clustering—illustrated by automakers cutting procurement costs by 20–30%—are shortening lead times and lowering input-price volatility, which frees working capital, lowers inventory days, and shifts saved cash into private fixed investment, digitalization, and local capacity expansion.

- The supply-chain concentration in regional clusters (e.g., Huainan, Chongqing) improves efficiency and supplier specialization but also raises single-region systemic exposure, so firms and policymakers need contingency planning (supplier diversification, redundant logistics routes, and inventory strategies) to reduce disruption risk.

- Cross-industry integration with robotics, unmanned shipping, and AI is increasing enterprise adoption of advanced automation and vehicle software, which lowers per-unit AI inference costs, accelerates total-factor productivity gains, and raises the patent-to-product conversion rate if standards and workforce skills are aligned.

- Persistent technological gaps—particularly in advanced chassis systems where domestic production still lags international competitors—are a chokepoint for moving up the value chain, so targeted R&D funding, joint ventures, and supplier upgrading programs focused on chassis and powertrain systems are practical priorities.

- Digital enablers such as expanded 5G standalone coverage and “vehicle-road-cloud-network-map” projects will reduce cloud latency and enable real-time vehicle and supplier coordination, which, if combined with unified data standards and trusted data ecosystems, will increase SME digital-tool adoption and deepen the digital, knowledge-intensive portion of the automotive value chain.

- Customs and border-digitization efforts, when scaled, will reduce average clearance times and door-to-door lead times for NEV shipments, improving reliability for overseas customers and increasing China’s logistics-performance index standing; practical steps include API-linked customs declarations, single-window trade facilitation, and harmonized cross-border data standards.

- The export-led growth and deep localization of technology raise geopolitical and regulatory considerations abroad—host-country local-content rules, industrial incentives, and political scrutiny can constrain market access—so Chinese firms should increase compliance capabilities, local partnerships, and transparent engagement with regulators to mitigate trade-policy risk.

- The surge in battery and NEV production will increase demand for critical minerals (lithium, nickel, cobalt) and for second-life and recycling systems, making upstream supply diversification, strategic reserves, domestic recycling and circular-economy investments, and supplier due-diligence on sustainability urgent and practical measures to manage cost and reputational risk.

- Faster regulatory pathways for intelligent connected vehicles under Five-Year Plan commitments can shorten approval lead times and increase venture funding into autonomous and mobility startups, but regulatory clarity and safety standards must be balanced with testing oversight to avoid setbacks from accidents or public backlash.

- For regional policy makers (e.g., Chongqing), continued emphasis on intelligent, green, and service-oriented manufacturing plus investments in digital workshops, ultra-fast charging networks, and talent pipelines will be essential to convert policy goals into a globally competitive NEV cluster within the targeted multi-year horizon.

- Monitoring metrics that will show whether this structural change is durable include export product sophistication (EXPY) shifts toward system sales, grid storage deployment rates versus battery manufacturing growth, upstream mineral sourcing diversity, chassis-system domestic content shares, customs clearance times, and private fixed-investment flows into NEV ecosystems.

Monitored Intelligence for China - Nov. 28, 2025

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Mainland slams Lai Ching-te for "disgusting" support of Japanese PM's Taiwan remarks

Peoples Daily | English | News | Nov. 28, 2025 | Geopolitical Conflict and Disputes

The Chinese mainland sharply condemned Taiwan leader Lai Ching-te for publicly supporting Japanese Prime Minister Sanae Takaichi’s remarks on Taiwan. Peng Qing'en, spokesperson for the State Council’s Taiwan Affairs Office, labeled Lai’s actions as "disgusting," accusing him of ingratiating Japan and betraying Taiwan and the motherland.

Peng criticized Takaichi’s comments as serious interference in China’s internal affairs, violating international law and norms, undermining the post-war international order, and breaching the one-China principle alongside key China-Japan political agreements. He urged Japan to reflect on and correct its stance immediately.

Lai had defended Takaichi amid island-wide protests against her remarks and posted a photo of himself eating Japanese cuisine on social media to symbolize "solid friendship" between Taiwan and Japan. The mainland warned the Democratic Progressive Party that relying on external forces would bring disgrace and condemned any acts of national betrayal.

Mainland spokesperson underscores significance of Xi's remarks on Taiwan in phone call with Trump

Xinhua | English | News | Nov. 28, 2025 | Geopolitical Conflict and Disputes

A mainland spokesperson emphasized the significant guidance President Xi Jinping's remarks during a recent phone call with U.S. President Donald Trump provide for China's Taiwan-related policies. The spokesperson, Peng Qing'en of the State Council Taiwan Affairs Office, made the statement in response to questions about the leaders' Monday night conversation.

During the call, Xi reiterated China's firm stance on Taiwan, stressing the importance of China and the U.S. working together to uphold the outcomes of World War II. Peng highlighted the 80th anniversary of the Chinese People's War of Resistance Against Japanese Aggression and Taiwan's restoration to China, asserting that the mainland will unite people on both sides of the Taiwan Strait to firmly oppose Taiwan independence, promote peaceful cross-Strait relations, maintain peace and stability, and ensure long-term national well-being.

SMEs ramp up defense against cyberattacks

China Daily | English | News | Nov. 28, 2025 | Cyber Attacks and Data Loss

Small and medium-sized enterprises (SMEs) in China are expanding their digital trade presence to reach global markets through platforms like TikTok, Facebook, Instagram, and Alibaba. This digital expansion now includes businesses from major cities as well as second- and third-tier cities, with over 120,000 cross-border e-commerce businesses recorded in June. However, this increased online activity also exposes SMEs to a rise in cyberattacks, with research showing that 46 percent of small businesses experienced cyber incidents in the past year. Nearly 20 percent of small businesses impacted by cyberattacks close within a year.

SMEs represent a significant part of China's economy, accounting for 90 percent of businesses, 70 percent of employment, and 50 percent of GDP. As of September 2025, there are 63.49 million SMEs in China, making the sector a critical driver of economic stability and growth. Additionally, SMEs contribute heavily to innovation, holding 75.3 percent of valid invention patents developed independently in 2024.

In response to rising cyber threats, Mastercard has introduced a vulnerability scanner to help SMEs identify and address cybersecurity risks on their websites and apps. Mastercard also uses generative AI to analyze transaction data and detect potential fraud, processing around 150 billion transactions annually with fraud risk scoring. The Chinese market's specific characteristics enhance these cybersecurity innovations.

To further protect SMEs, Chinese regulatory authorities, including the Ministry of Industry and Information Technology and the National Financial Regulatory Administration, have launched a second round of cyber insurance pilots. The first round in 2024 produced over 1,500 policies, generating premiums exceeding 150 million yuan ($21.14 million) and coverage worth nearly 11.5 billion yuan. These initiatives aim to strengthen the cybersecurity resilience of SMEs nationwide.

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