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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(经济观察)破万亿美元后再蓄新动能 中国—东盟经贸迎新局

(Economic Observation) After Surpassing One Trillion US Dollars, New Momentum Builds as China-ASEAN Trade Usher in a New Era

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

In 2025, China’s total imports and exports with ASEAN exceeded one trillion US dollars, marking a new high in bilateral trade despite a complex and changing external environment. Experts attribute this growth to strong intrinsic drivers in China–ASEAN economic and trade cooperation, which are fostering a new round of development.

China’s largest land port to Vietnam and other ASEAN countries, Youyiguan Port in Guangxi, illustrates the busy trade activity. Researchers highlight that despite interference from major external powers, China exports mostly irreplaceable products to ASEAN, contributing to continued trade growth and improving trade imbalances. Industrial upgrading and Chinese investments in ASEAN’s local production are expected to optimize the structure of exports from ASEAN to China and push the trade balance closer.

The highly complementary economies and geographic proximity of China and ASEAN underpin deepening cooperation. The China–ASEAN Free Trade Area Version 3.0 aims to enhance supply chain interconnection and harmonize standards, with a particular focus on supporting small and medium-sized enterprises (SMEs), which make up 90% of economic cooperation participants. The upgrade includes specific provisions for SMEs, allowing them to benefit significantly from the new trade policies.

After surpassing one trillion dollars, bilateral trade is anticipated to grow further, supported by the eastward shift of the global economic center and Southeast Asia’s economic expansion, infrastructure development, and growing consumer markets, which complement China’s production capacity. Artificial intelligence (AI) is identified as a critical factor for deepening cooperation through digital infrastructure integration, intelligent manufacturing, and modern agriculture, also facilitating joint AI governance and standards.

Experts foresee AI-related trade expanding into new sectors such as computing power, data, robots, and innovative pharmaceuticals, which could generate substantial additional trade volumes. The Regional Comprehensive Economic Partnership (RCEP) has already delivered significant benefits, and combined with the Free Trade Area 3.0 upgrade, will reinforce institutional frameworks supporting this cooperation.

Despite external trade challenges, the solid demand foundation, interdependent supply chains, and continual institutional upgrades serve as stabilizers for China–ASEAN trade relations. In 2026, China and ASEAN will celebrate the fifth anniversary of their comprehensive strategic partnership, entering a new phase of qualitative enhancement in economic and trade cooperation that is expected to foster regional and global growth.

Chinese Embassy in Cambodia urges enhanced protection of nationals after missing or losing contact cases

Global Times | English | News | Jan. 19, 2026 | Geopolitical Conflict and Disputes

The Chinese Embassy in Cambodia has called on Cambodian authorities to enhance protection for Chinese nationals after several cases of Chinese citizens going missing or losing contact in the country. Chinese Ambassador Wang Wenbin emphasized the seriousness of these incidents during meetings with Cambodian Deputy Prime Minister and Minister of Interior Sar Sokha, and Deputy Prime Minister and Minister of Foreign Affairs Prak Sokhonn.

The embassy highlighted that many of the serious cases involving Chinese nationals are linked to online scams. Wang noted that these frequent incidents harm the traditional friendship between China and Cambodia and obstruct the deepening of mutually beneficial cooperation. He urged Cambodian authorities to take effective actions against crimes such as illegal detention, violent assaults, and online fraud targeting Chinese citizens, improve rescue operations, and ensure their safety.

In response, Cambodian officials assured that the government would implement strong measures to combat online scams and other crimes against Chinese nationals to ensure their security within Cambodia.

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.

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