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THIS WEEK:

Slower trade growth as stimulus plans simmer, possible six-trillion-yuan fiscal strategy, solar industry seeks solutions for overcapacity, China unveils space science development plan, Xi on literary and artistic endeavors.

1. Slower Trade Growth as Stimulus Plans Simmer

What Happened: China Customs reported weaker-than-expected monthly trade figures amid persistent signs of weakness in the Chinese economy.

By the Numbers: Imports grew a lackluster 0.2% year-on-year in September, while exports rose 2.4%, far behind the 8.7% surge recorded in August. August’s exports were boosted by companies moving up shipments in advance of upcoming tariffs, but September’s numbers show a reversion to the trend. After strong gains in 2021 and 2022, exports fell around 6.5% in 2023 before pushing up 4.3% in the first three quarters of 2024.

What China Said: A China Customs spokesperson said that short-term factors had weighed on trade, including a number of typhoons, global shipping congestion, and weaker external demand.

Why It Matters: As businesses and investors await more specifics about Beijing’s plans to stimulate the economy, weaker trade data is an indication of how deep the problems run. Persistent trade frictions continue to fuel economic uncertainty, and signs of deflation have emerged in some industries as manufacturers slash prices amid flagging demand.

By G.A. Donovan, Fellow on Chinese Society and Political Economy, Center for China Analysis

Learn More: CCA Fellows Neil Thomas and Lizzi C. Lee considered the future of U.S.-China political and economic relations in a special ASPI report, What's at Stake for Asia in the 2024 U.S. Election.

3. Solar Industry Seeks Solutions for Overcapacity

What Happened: The China Photovoltaic Industry Association called a meeting on October 14 to address challenges arising from hypercompetition, with executives from 16 major solar companies attending the session, including market leaders Tongwei, JA Solar, Jinko Solar, and LONGi. 

Price Wars: Since late 2023, excess supply has caused prices to plummet across the full solar value chain, with the cost of polysilicon, silicon wafers, solar cells, and modules falling by 40%, 48%, 36%, and 15%, respectively. Exceedingly low prices below the cost of production have resulted in widespread financial losses.

Seeking Solutions: The meeting focused on confronting the vicious cycle of internal competition and below-cost dumping within the solar industry, including through measures to resolve supply-demand imbalances and reduce excess capacity. A statement issued afterwards said that entrepreneurs had reached a consensus on several areas, including market mechanisms to reward strong performers and to facilitate the exit of outdated and inefficient production capacity.

Why It Matters: While China’s overwhelming dominance in solar — accounting for nearly 95% of global production capacity — has caused headaches for the industry, cheap panels could be a boon for decarbonization. Whether market demand can be created to rapidly absorb China’s excess solar panels could have massive implications for the speed and scale of global climate action.

By Kate Logan, Director, China Climate Hub and Climate Diplomacy at the Asia Society Policy Institute, and Fellow, Center for China Analysis

Learn More: The newly launched U.S.-China Climate Cooperation Timeline traces the milestones of climate relations and offers deep insights into the critical efforts shaping global climate action.

4. China Unveils Space Science Development Plan

What Happened: On Tuesday, China released its first national-level mid-to-long-term plan for space science development, setting strategic goals for the nation’s space research and technological advancements.

Dual-Use Priorities: China hopes to lead global space science by 2050. Many of the stated end goals prioritized in the plan are dual-use and serve both civilian and military needs. For example, protecting satellites is essential for securing military and civilian communication and navigation, and research on microgravity and lunar resources supports technologies for long-term space missions, which could be used for bases or strategic operations in space.

Progress and Milestones: Over the past decade, China has rapidly expanded its space capabilities, completing key projects like the Chang’e 5 lunar mission and the Tiangong space station. Its future ambitions include missions to Mars, return missions to the moon, deep space exploration, and crewed lunar bases. The new plan aims to match or surpass U.S. efforts by targeting advanced areas like gravitational waves and dark matter.

Why It Matters: By setting strategic, long-term goals, China’s space ambitions will intensify its competition with the United States for leadership in space technology. This new space race has implications for technological innovation, military capabilities, and economic growth, where dominance in space could translate to advantages in communications, surveillance, and global influence.

By Jie Gao, Research Associate, Center for China Analysis

Learn More: An expert panel moderated by CCA Fellow Lizzi C. Lee discussed how China is focused on solidifying its position in the global tech arena.

5. Xi on Literary and Artistic Endeavors

What Happened: To mark its tenth anniversary, a 2014 speech by Xi Jinping on China’s literature and art was published in Qiushi on October 16.

The Battleground: In the speech, Xi emphasized that literature and art are an important battleground that China must win. He stated that culture plays a crucial role in sensing national changes, setting trends, and leading the way and urged writers and artists to fight for the great rejuvenation of the Chinese nation. 

Chinese Values: Xi also stressed the significance of promoting contemporary Chinese Communist and Socialist values through literature and art under the leadership of the Chinese Communist Party. This is not only a fundamental requirement put forward by the Party, it also determines the future and destiny of China’s creative endeavors. 
 
Why It Matters: Since the Mao era, the Party has viewed literature and art as powerful political tools for educating and uniting the people — and for attacking an enemy when necessary. Xi again emphasized the return to core socialist values and Chinese culture in the arts, emphasizing that literature and the arts should not act as “slaves” of the market nor bear “the stench of money.”

By Lobsang Tsering, Senior Research Associate, Center for China Analysis

Learn More: CCA’s interactive website, Decoding Chinese Politics, was recently updated with three new sections, one of which investigates Xi’s inherent status in the “Party Center.