China

Intelligence for Better Decision Making

China Ends PV Export Rebates, Triggering Global Industry Realignment
Jan. 19, 2026 | Competitiveness

China’s recent fiscal policy change is set to reshape global photovoltaic manufacturing and trade.

**In early 2026, China’s Ministry of Finance and State Taxation Administration announced the complete cancellation of the value-added tax export rebate for photovoltaic products, effective April 1, 2026.**
This move concludes a series of rebate reductions that began in 2013 and covers 249 items across the PV industry chain, from wafers to modules. The rebate had served as a major subsidy for Chinese PV exporters, lowering their export prices and bolstering their competitiveness on world markets.

**Following the announcement, Chinese PV module prices climbed unexpectedly during the traditional off-season as overseas buyers rushed to lock in orders before the rebate expired.**
Export orders and production volumes surged in the first quarter of 2026, delivering short-term revenue gains for manufacturers but raising alarms about an overdrawn demand cycle in the second quarter. Industry analysts caution that this front-loaded rush could trigger sharp price corrections and heightened volatility once the initial backlog clears.

**Estimates suggest that leading PV producers may forgo between 1 and 2 billion yuan in annual rebate income, translating to a profit decline of roughly 46 to 51 yuan per 210R module exported.**
Analysts project that this profitability squeeze could shrink China’s module exports by 5 to 10 percent. Smaller and mid-sized enterprises—lacking the scale and technological advantages of their larger peers—face the greatest pressure to absorb these additional tax costs.

**In response, top Chinese PV firms such as Longi Green Energy, JinkoSolar, Trina Solar and Canadian Solar have accelerated their overseas expansion and localization strategies.**
They are establishing or expanding production facilities in Southeast Asia, the Middle East and the United States to produce modules closer to end markets. This regional footprint helps them circumvent trade barriers, cut logistics and tariff expenses and bolster supply-chain resilience. Parallel investments in overseas sales subsidiaries further reinforce their local market penetration.

**With rebate support waning, technology innovation has become the centerpiece of competitive strategy.**
High-efficiency solutions—particularly bifacial cell (BC) and TOPCon 3.0 modules—stand poised to capture growing market share and command premium export prices. This shift moves the industry away from price-driven competition toward technology differentiation, brand building and higher-margin products, while compelling smaller players to invest in upgrades or exit the market.

**The government’s adjustment aims to curb chronic low-price competition and reduce international trade disputes tied to alleged subsidy abuses by reallocating fiscal resources from export rebates to domestic research and development, industrial upgrades and social applications.**
Over the medium to long term, this policy should help stabilize corporate profit margins, ease subsidy-related trade tensions and accelerate industry consolidation—positioning China’s leading PV firms with established overseas capacity for enhanced global competitiveness.
China Surpasses 10 Trillion Kilowatt-Hours in Annual Electricity Consumption Amid Industrial and Technological Growth
Jan. 19, 2026 | Energy & Natural Resources

China’s annual electricity consumption exceeded 10 trillion kilowatt-hours in 2025, reflecting significant shifts in its economic and energy landscape.

**In 2025, China’s total electricity use reached 10.4 trillion kilowatt-hours, a 5.0 percent increase from the previous year, making it the first country to surpass the 10 trillion kWh annual mark.**
This consumption level is more than twice that of the United States and exceeds the combined total of the European Union, Russia, India and Japan, underscoring China’s role as the world’s largest electricity consumer and the resilience of its economy.

**Over the past decade, China doubled its annual electricity use from about 5.9 trillion kWh in 2016 to over 10 trillion kWh in 2025, with most years seeing growth above 5 percent.**
Sustained peak loads reached up to twenty times higher than in earlier years, supported by policies promoting green energy, technological innovation, a unified national electricity market and expanded international cooperation.

**Steady macroeconomic improvement and persistent high summer temperatures drove residential demand, with monthly consumption topping one trillion kWh for two consecutive months for the first time.**
This surge coincided with rapid industrial expansion and coordinated efforts to strengthen energy assurance across regions.

**Electricity use in high-end manufacturing rose sharply: new energy vehicle production drove demand up by more than 20 percent, and wind power equipment manufacturing increased over 30 percent.**
The digital economy drove a more than 30 percent rise in internet services consumption. The electric vehicle charging and battery-swap sector recorded a 48.8 percent increase in power use, supported by the installation of 19.322 million charging units—a 52.0 percent year-on-year rise—reflecting the shift toward high-tech, value-added industries.

**China coordinated its power supply system to balance generation, grid management and demand response.**
Coal provided baseload power, while hydropower, nuclear and thermal sources supplemented by renewables paired with advanced energy storage smoothed output fluctuations. Grid maintenance, interregional transmission, time-of-use pricing and peak-valley tariffs enhanced system reliability and promoted efficient demand management.

**Growth in energy-intensive industries slowed or declined, with ferrous metal smelting and non-metallic mineral products recording reductions.**
Structural industrial adjustments, energy-saving retrofits and technological advances lowered energy consumption per unit of GDP, aligning consumption patterns with greener growth objectives.

**The surge in electricity consumption across manufacturing, new energy vehicles, artificial intelligence and related high-tech sectors underscores active production dynamics, strong industrial resilience and continued expansion of China’s industrial scale and technological capacity, contributing to sustained economic growth and progress in the country’s energy transition.**

Monitored Intelligence for China - Jan. 19, 2026


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Baoshan rolls out key initiatives to attract global cooperation

China Daily | English | News | Jan. 19, 2026 | UndeterminedInitiative

Shanghai's Baoshan district held a conference unveiling three key plans, five industrial ecosystem initiatives, and a new full-cycle business service model to attract global enterprises and talent as part of its 15th Five-Year Plan (2026–2030). The district introduced a full-chain innovation support system and launched the "investment-first-then-equity" model to enhance the business environment.

For overseas expansion, Baoshan integrated resources to create the "four-in-one project," offering one-stop services such as inspection, certification, cross-border compliance, and carbon footprint accounting. Government services were upgraded through a smart platform and an "inspection-registration integration" reform, reducing application requirements by 60 percent and improving enterprise demand response efficiency. On-site compliance counseling at industrial parks was also emphasized to minimize disruptions.

Baoshan is advancing intelligent manufacturing by establishing a humanoid robot innovation center and fostering smart factories, supporting its 100-billion-yuan industrial cluster in robotics and high-end equipment, which accounts for a significant share of national and local output. The district benefits from strong infrastructure links, including the upcoming Baoshan High-Speed Railway Station and Wusongkou International Cruise Port, as well as rapid growth in the high-end materials and biopharmaceutical sectors.

Educational and medical institutions like the Foreign Language High School Affiliated to Shanghai Normal University and Ruijin Hospital contribute to the district’s livability and business environment. The conference concluded with the signing of several major projects in intelligent manufacturing, low-carbon initiatives, and new materials.

California AG sends cease and desist letter to xAI on deepfake images

Times of News | English | News | Jan. 19, 2026 | Privacy

California Attorney General Rob Bonta sent a cease and desist letter to Elon Musk’s company xAI on January 16, 2026, demanding an immediate halt to the generation and distribution of non-consensual sexual images produced by its generative AI chatbot, Grok. Bonta emphasized the expectation that xAI comply without delay.

The action follows a global backlash against Grok, which has allowed users to create and publish sexualized images of women and minors. This has led to investigations and regulatory responses in multiple countries. Authorities in Japan, Canada, and Britain have opened probes into Grok, while Malaysia and Indonesia have temporarily blocked access to the tool due to concerns over explicit image creation.

In response to the backlash and investigations, xAI announced restrictions on image-editing features for all Grok users in late January 2026. As of the date of the letter, xAI had not commented publicly on the cease and desist notice.

视频丨多地率先试点 跨境电商、保税货物迎“一站式”新体验

Video Multiple Regions Pioneer Pilot Program Cross-Border E-Commerce and Bonded Goods Embrace New One-Stop Experience

China Daily | Local Language | News | Jan. 19, 2026 | UndeterminedTrade Issues and Numbers

On January 15, customs authorities in multiple Chinese cities including Hangzhou, Qingdao, Zhengzhou, Shenzhen, Yinchuan, and Urumqi launched pilot programs integrating cross-border e-commerce and bonded goods into the Convention on International Road Transport (TIR) framework. Through the international trade "single window" dedicated module, enterprises can complete customs formalities more efficiently, improving cross-border logistics.

A notable example involved a TIR transport vehicle departing from Qingdao Airport Comprehensive Bonded Zone with over 9,000 pairs of shoes, shipping directly to Moscow using the new "TIR + bonded" model. This model enables goods to be stored in customs special supervision zones and processed through a streamlined "one-stop" procedure for departure, transportation, and export, easing financial pressure by deferring import duties and taxes.

International road transport costs about 25% as much as air transport and is twice as fast as rail, offering greater flexibility and earlier tax rebate returns when combined with comprehensive bonded zone policies. Enterprises benefit from both efficient tax processes and reliable TIR transport.

Cross-border vehicles have also traveled to countries including Kazakhstan, Uzbekistan, Pakistan, and Russia, achieving streamlined customs processing under the TIR Convention with "one declaration, one-vehicle direct delivery, one-box to destination." The TIR system, recognized by 78 countries, eliminates repeated inspections and transloading, enhancing cost and time efficiency.

As of 2025, China had 272 certified enterprises for international road transport, supervising over 3,800 consignments—a 1.1 times increase year-on-year—with more than 70 international routes opened across Central Asia, West Asia, and Europe. This development significantly improves the customs clearance process for international road cargo.

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