China Market Intelligence

China’s State Council issued the Regulations on Industrial Chain and Supply Chain Security on April 7, creating a mechanism to monitor and investigate supply chain risks. Investigations could lead to countermeasures against countries, companies, and other entities. While the rules don’t necessarily create new retaliatory tools, they connect China’s existing tools under one framework, embedding retaliation into China’s governance system.

Shanghai, Jiangsu, and Guangdong remain the most mentioned locations for government engagement, unchanged from the past two years and underscoring the sustained economic vitality of the Yangtze River Delta and the Greater Bay Area. Shanghai leads in overall mentions, but Jiangsu surpassed the megacity when accounting for preference strength.

China’s 15th five-year plan (FYP) suggests that industrial policy is no longer just one policy area among many but rather an organizing logic for the whole economy. Beijing is increasingly aligning domestic substitution, enterprise innovation, anti-involution, and infrastructure development around the goal of building a more self-reliant industrial system.

US goods trade with China fell nearly 30% last year to $414.7 billion, the lowest level since 2009. The sharp decline was driven primarily by a collapse in shipments following the imposition of triple-digit tariffs last April, compounded by US and Chinese supply chain de-risking policies and China’s ongoing efforts to expand export markets in the Global South.

When President Donald Trump and President Xi Jinping agreed to a trade truce in Busan late last year, a key ask was for China to improve the flow of rare earth elements (REEs) and derivative product exports to US companies. The topic will almost certainly come up again as the leaders prepare for Trump’s now-delayed state visit to Beijing. Any friction or progress on the REE issue, including movement on China’s now-suspended extraterritorial export controls due to be reimposed this November, will be an important indicator of bilateral tension or stability.

On March 5, Premier Li Qiang presented the 2026 Government Work Report at the opening of the annual Two Sessions in Beijing, setting a comprehensive slate of economic and development tasks for the year. The report was released alongside a draft outline of the 15th five-year plan (FYP), which will guide economic policy through 2030.

During this year’s Spring Festival, Alibaba launched a three-billion-yuan subsidy campaign to accelerate adoption of its AI chatbot, Qwen. Users could instruct Qwen to order a bubble tea for 0.01 yuan directly within the chat interface. The company has also integrated its major services, including e-commerce, travel, navigation, and grocery shopping, into Qwen, allowing users to complete everyday tasks through a single conversational entry point.

China entered 2026 with clear goals for its digital economy: accelerate capability while tightening oversight. Three recent regulatory updates illustrate this shift. First, the revised Cybersecurity Law (CSL), which took effect on January 1, consolidates cybersecurity and AI under one governance framework, expanding the law’s scope and strengthening penalties.

President Donald Trump is attempting to reshape the global economic order by moving away from traditional free trade agreements toward bilateral Agreements on Reciprocal Trade (ARTs). These agreements, initiated after the imposition of sweeping “Liberation Day” tariffs last year, ostensibly aim to open new markets for US exports, reduce foreign tariffs and non-tariff trade barriers, and spur alignment with US economic and national security measures.

The Department of Defense’s 1260H list — often referred to as the Chinese Military Companies (CMC) list — is back in the spotlight after an updated version was abruptly removed from the Federal Register just hours after being published late last week. While it’s unclear when a list will be republished and who will be on it, companies should be aware of the list’s growing importance.