China Macro

Xi Jinping Mentions Historic “Yanghuo” (Foreign-Made Matches) During Tour of Manufacturing Company

“We have insisted on developing our real economy. In the past, we relied on importing products like yanghuo (foreign-made matches), yangzao (foreign-made soap), and yangtie (foreign-made tinware). Now, we’ve become the world’s leading manufacturing power with the most comprehensive range of industrial sectors. This path has proven correct,” said President Xi Jinping on May 19, during a visit to Luoyang Bearing Group Co., Ltd. in Henan Province, while speaking with employees.

Luoyang Bearing is one of China’s first industrial enterprises established in 1954 under the planned economy of the new China.

China’s Cyberspace Administration to Tackle “Information Cocoons”

The Cyberspace Administration of China has directed platforms like Douyin and Xiaohongshu to optimize their algorithms and adjust content recommendation mechanisms in response to public concerns about vulgar content, deepening “information cocoons,” and intensifying opinion polarization. Multiple platforms have already implemented corresponding measures, though their effectiveness remains to be seen.

China-ASEAN Free Trade Area 3.0 Agreement Finalized

On May 20, a special online meeting of China-ASEAN economic and trade ministers was held, during which the two sides jointly announced the completion of negotiations for version 3.0 of the China-ASEAN Free Trade Area (CAFTA).

Launched in 2002, CAFTA 1.0 included agreements on goods, services, and investment. In 2015, the two sides upgraded to version 2.0, which was fully implemented in 2019.

According to China’s Ministry of Commerce, version 3.0 adds nine new chapters including digital economy, green economy, supply chain connectivity, technical standards and regulations, customs procedures and trade facilitation, sanitary and phytosanitary measures, competition and consumer protection, SMEs, and economic and technical cooperation.

China has been ASEAN’s largest trading partner for 16 consecutive years, while ASEAN has remained China’s largest partner for five years. In 2024, bilateral trade reached nearly 7 trillion yuan, accounting for 15.9% of China’s total foreign trade. In Q1 of 2025, ASEAN remained China’s top partner with imports and exports totaling 1.71 trillion yuan, a 7.1% year-on-year increase, raising its trade share to 16.6%.

Economy

Chinese Banks Cut Deposit Rates; Demand Deposit Rate Near Zero

On May 21, following deposit rate cuts by six major state-owned banks along with China Merchants Bank and Everbright Bank, seven more banks including Ping An Bank, CITIC Bank, Industrial Bank, SPD Bank, China Minsheng Bank, GF Bank, and Huaxia Bank also announced reductions.

After adjustment, several banks standardized their rates: demand deposit rate at 0.05%; fixed deposit rates at 0.7% (3 months), 0.95% (6 months), 1.15% (1 year), 1.2% (2 years); and 1.3% and 1.35% for 3-year and 5-year terms respectively.

Technology

China to Inject 1 Million Tons of CO₂ Underground

On May 22, China National Offshore Oil Corporation (CNOOC) announced that China’s first offshore carbon capture, utilization, and storage (CCUS) project was officially launched at the Enping 15-1 platform in the Pearl River Mouth Basin.

The project captures CO₂ produced during oil extraction, converts it to a supercritical state (between gas and liquid), and injects it 1,200–1,600 meters underground at a rate of 8 tons per hour, both enhancing oil recovery and permanently sequestering carbon.

In the next 10 years, the project aims to store over 1 million tons of CO₂—equivalent to planting more than 12 million trees.

Neural Interface Surgery Helps Paraplegic Walk Again

Zhejiang University’s Second Affiliated Hospital announced that it had enabled a paraplegic patient to walk again using China’s first closed-loop spinal neural interface.

The 61-year-old man became paralyzed after a fall in October 2024. Four months post-injury, he couldn’t walk or control his bowels.
In March 2025, the hospital implanted a spinal electrode and a wireless, rechargeable controller (the size of a matchbox). All components were domestically developed.

By the third day post-surgery, he could move his legs; by day 15, he could stand; by one month, he was walking. By two months, he regained autonomy in daily activities, including bowel control.

Chinese Auto Parts Firms Flock to Thailand; Tripled in 7 Years

Due to tariffs from the U.S. and Europe, Chinese auto parts makers are rapidly relocating to Thailand. Over 20 Chinese brands including BYD and Great Wall Motors have entered the Thai market, many launching localized EV production.

Data from MarkLines and the Thai government shows that by March 2025, 165 Chinese-funded auto parts firms had set up operations in Thailand—a 3.4x increase from the end of 2017.

China’s “YouTube” Earns 7 Billion Yuan in Q1

Bilibili, dubbed China’s YouTube, reported Q1 revenues of 7 billion yuan, up 24% year-on-year. Value-added services (e.g., memberships) brought in 2.8 billion yuan (+11%), advertising 2 billion (+20%), and gaming 1.73 billion (+76%).

While advertising growth has slowed compared to last quarter, Bilibili’s cash flow hit 1.3 billion, leaving ample room for profit growth.

China’s Homegrown C919 Jet Now Connects 16 Cities

China Eastern Airlines announced that from May 18 and 25, the C919 large passenger jet will fly new routes: Shanghai–Shenzhen and Shanghai–Xiamen.

This marks C919’s expansion to China’s four major cities and a total of 16 cities including Hong Kong.

Two years after its first commercial flight, C919 continues to mature technically. With cost advantages and domestic demand, it is expected to pressure Boeing and Airbus.

Man Detained 10 Days for Groping Comedian Onstage

In Shenyang, a female stand-up comedian was groped near the thigh by a male audience member during her performance. Video captured by the audience led to police intervention.

The man was given 10 days of administrative detention for “public sexual assault.”

“Russian Specialty Stores” Close Down, “Ukrainian Stores” Open Up

Once-popular “Russian Specialty Stores” are rapidly closing across China since the Russia-Ukraine war.

In 2023, up to 73 stores opened in one month in Beijing. However, by late 2024, many closed due to mislabeled goods, suspected smuggling, and misleading advertising.

Few goods were genuinely Russian-made, and prices were often double the market rate.

Russia’s embassy stated only six “official” Russia trade centers exist in China.

Some former Russian stores are now repurposed as “Xinjiang” or “Ukrainian” specialty shops.

Celebrity Chef vs. MCN Agency Battle

Following the Li Ziqi dispute, another influencer, Sui Po—a disciple of a national banquet chef—has broken with his MCN agency.
After their contract ended, Sui Po took his team and started his own account, gaining 1 million followers.

The MCN accused him of breach of contract and disloyalty, but most netizens side with Sui, citing overwork, low pay (500 yuan per ad deal), and the agency’s condescending attitude.

Loader Crashes into Crowd: 6 Dead, 4 Injured in Yunnan

On May 18, a loader drove into a farmers’ market in a Yunnan village, killing six and injuring four.

Eyewitnesses said the market was located on a downhill slope. The vehicle was not moving fast, and the cause remains unclear.