China Market Intelligence

This week, China’s National Bureau of Statistics (NBS) released economic performance data for November, showing factory output and retail sales growth slowing to their weakest levels in over a year. Stubbornly low demand, a slowdown in production, and deflationary pressure coincided with a record trade surplus, which was achieved largely by frontloading exports and expanding shipments to ASEAN and EU partners amid US tariffs.

To date, references to rare earth elements (REE) general licenses have appeared in the White House readout, while MOFCOM has not made any public commitment. As a result, information on general licenses is fragmented, informal, and unevenly distributed. This article synthesizes trends from recent member benchmarking to piece together how the mechanism functions and who is best positioned to benefit.

The 2026 National Defense Authorization Act (NDAA) is nearing the finish line after the Senate passed the bill on Wednesday following House approval last week. The White House confirmed that President Donald Trump will sign it once it reaches his desk.

China has seen several high-level personnel changes at the central and provincial levels over the past few months, with more expected around the local and national Two Sessions conferences early next year.

The United States and China have pulled back from a full-blown export control crisis after a presidential summit on the sidelines of the Asia-Pacific Economic Cooperation summit last month. According to both sides’ readouts, they agreed to a one-year, reciprocal truce: the United States will suspend its “50% Rule,” which extended export restrictions to over 20,000 Chinese entities, and in exchange, China will suspend the rare earth element (REE) export control measures announced by the Ministry of Commerce (MOFCOM) on October 9.

Last month, the Chinese Communist Party’s 20th Central Committee concluded its fourth plenary session, during which it adopted the Central Committee’s proposal for formulating the 15th five-year plan covering 2026 to 2030. Beijing has acknowledged a growing pressure to maintain social stability and advance reforms amid more volatile geopolitical conditions. As such, the proposal points to an enhanced role for indigenous innovation, industrial upgrading, and domestic consumption as key drivers of secure and sustainable growth.

China’s factories are busy but not necessarily profitable. In the first eight months of 2025, industrial value-added rose 6.2% year-on-year, yet profits edged up just 0.9%. The wide gap between output and profitability reveals structural inefficiencies across China’s industrial sector, including persistent deflationary pressure, chronic oversupply, and stagnant productivity masked by volume growth. This misalignment threatens the sustainability of industrial recovery and undermines Beijing’s broader growth targets.

China’s State Council has finalized the Notice on Implementing Policies for Domestic Product Standards in Government Procurement after several rounds of public consultation. The document introduces China’s first-ever nationwide definition of “domestic product” for government procurement purposes. This notice will take effect on January 1, 2026.

China’s stock markets have rebounded in 2025, defying expectations that global trade tensions and weak domestic economic conditions might drag on performance. The Shanghai Stock Exchange (SSE) Composite Index has risen 19.54% over the six-month period, with the China Securities Index (CSI) 300 gaining 22.41%.

China’s economy has grown faster than expected this year, but growth in tax receipts has fallen behind. In response, Beijing is turning to tax reform as a cornerstone of fiscal stabilization, combining short-term measures to raise revenue from existing sources with longer-term efforts to standardize its tax regime.