China

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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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MERICS China Forecast 2026: High expectations for Chinese innovation, low expectations for relations with US and EU

MERICS | English | AcademicThink | Nov. 28, 2025 | Shifting Geopolitical Alliances

In 2026, China is expected to make significant advancements in science and technology, particularly in artificial intelligence, semiconductors, biotechnology, and green technologies, despite ongoing US restrictions on high-tech exports. Nearly 80 percent of the surveyed experts anticipate "major" progress in AI, reflecting strong confidence in China’s innovation capabilities.

Relations between China and the United States are projected to continue deteriorating, especially in technology, military, and trade sectors. Around 75 percent of respondents foresee worsening tech relations, with 68 percent anticipating military tensions and 62 percent expecting trade conflicts. This decline in US-China ties may also strain transatlantic relations, as most experts expressed skepticism about the US and EU aligning their China policies or Europe successfully reducing economic dependencies on China.

Pessimism is prevalent concerning Europe’s ability to counter China’s geopolitical and economic influence, particularly in the Global South and regarding China’s support for Russia. However, some optimism exists for cooperation between China and Europe in climate policy and public health. China is expected to deepen its partnerships in the Global South and diversify its export markets, while strengthening relations with European countries is considered less critical for Beijing.

China’s stance on Taiwan is predicted to remain stable, with no significant escalation expected. Views on China’s role in the Russia-Ukraine conflict are mixed; about half foresee continued support for Moscow, one-third anticipate increased dual-use exports, and opinions vary on China’s involvement in peace efforts and post-war reconstruction.

Socio-economic challenges in China, such as youth unemployment, welfare provision, and declining birth rates, are expected to remain stable or show only modest improvements, with no major disruptions anticipated. Over half of respondents believe global perceptions of China will improve in 2026.

The MERICS China Forecast 2026 survey involved 766 respondents worldwide, primarily Europeans, and captured insights from academia, the private sector, think tanks, and government institutions. Results were presented on November 26, 2025.

Japan’s Taiwan Misstep: A Costly Overreach in a Changing Asia

China-US Focus | English | AcademicThink | Nov. 28, 2025 | Geopolitical Conflict and Disputes

In November 2025, Japanese Prime Minister Sanae Takaichi broke diplomatic norms by declaring that a military crisis over Taiwan would be a “survival-threatening situation” for Japan, potentially triggering direct Japanese military involvement. This statement provoked a swift and multifaceted backlash from China, including travel advisories, economic retaliation through mass cancellation of trips to Japan, intensified Chinese coastguard patrols near disputed islands, and revived historical grievances in Chinese media. The move isolated Japan regionally, with no public support from the United States, delayed joint exercises from South Korea, and unease voiced in Taiwan over Japan’s security stance.

Japan’s announcement highlighted a widening disconnect between its Cold War-era security mindset and the complex realities of a transforming Asia. Japan’s security depends heavily on Chinese cooperation due to North Korean threats and its integrated economic ties with China. Antagonizing Beijing complicates crisis management on the Korean Peninsula and threatens vital trade, financial stability, and resource supply chains. The resurgence of militarist sentiments under the current prime minister alienates regional neighbors still sensitive to Japan’s imperial history.

Amid the decline of American influence in Asia, regional actors including the Philippines are hesitant to align too closely with the US-led security framework, wary of provoking China without guaranteed backing. China’s punitive measures against Japan serve as a warning to other countries about the cost of supporting Taiwan contingencies. The crisis has reinforced China's strategic message that Taiwan is a non-negotiable internal matter and that outside interference will provoke consequences.

The article concludes that Japan must avoid further provocative rhetoric, focus on restoring relations with China, and recognize that Asia’s stability depends on regional cooperation with China playing a central role. Japan’s future security and prosperity hinge on integration and pragmatic engagement with neighbors rather than on outdated or militarized posturing over Taiwan. China, having asserted its red lines, should maintain openness to gradual de-escalation if Japan resumes diplomatic ambiguity, fostering a more stable regional environment.

科学有序推进农业转移人口市民化

Scientifically and Orderly Promoting the Urbanization of Agricultural Migrant Population

Guangming Daily | Local Language | News | Nov. 28, 2025 | UndeterminedDemographics

The Fourth Plenary Session of the 20th Central Committee of the Party emphasized advancing people-centered new-type urbanization by scientifically and orderly promoting the citizenization of the agricultural migrant population. This process involves transferring rural labor to urban areas while ensuring access to basic public services based on permanent residence. Since the reform and opening-up, China has experienced rapid urbanization with hundreds of millions of agricultural migrants contributing to urban development. The current strategy aims to improve employment quality and living standards of these migrants, aligning with the 15th Five-Year Plan's focus on quality and scientific urbanization.

By the end of 2024, nearly 300 million migrant workers were reported in China, indicating a steady increase. Promoting their citizenization helps expand the domestic consumer market, unleashes demand potential, creates investment and employment opportunities, and drives urban infrastructure and public service development. Equal access to urban public services can mobilize the migrants' enthusiasm and creativity and ensure shared modernization progress.

Despite achievements in public service coverage, employment quality, and housing for migrant workers, challenges remain, including disparities between household registration urbanization and actual resident urbanization, limited access to affordable housing, and unresolved issues around children's education. With urbanization transitioning from rapid expansion to quality and efficiency improvement, efforts should focus on employment and skills training targeting new-generation migrant workers; ensuring educational rights for accompanying children through resource optimization and enrollment reforms; implementing comprehensive housing保障 measures including affordable rental housing; and safeguarding social insurance rights by removing registration restrictions and enhancing coverage and inclusiveness of social insurance systems for migrants and flexible workers.

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