Ultra-Long Special Treasury Bonds for Equipment Upgrades and Consumer Goods Trade-in Programs

China plans to significantly increase the issuance of ultra-long special treasury bonds in 2025 to fund large-scale equipment upgrades and consumer goods trade-in programs, officials announced at a government press conference on January 3.

The National Development and Reform Commission (NDRC) reported that all proceeds from 2024’s CNY 1 trillion ($137 billion) special treasury bonds have been allocated, with 70% supporting national strategies and enhancing security capabilities in critical sectors. The remaining funds went toward upgrading industrial equipment and supporting trade-in programs for consumer goods.

Yuan Da, NDRC’s deputy secretary-general, revealed plans to expand funding to new areas, including electronic information systems, production safety, and agricultural infrastructure. Consumers will receive subsidies to trade in mobile phones, tablets, smartwatches, and fitness trackers.

Additional financial support will target new energy city buses, battery upgrades, agricultural machinery, and home-related consumer goods. Yuan emphasized that the government will also prioritize projects related to ecological protection in the Yangtze River Economic Belt, urbanization services for rural migrants, and the development of intercity rail networks in metropolitan areas.

Water resource projects, including large-scale irrigation and water diversion systems, will also receive increased funding. These efforts are part of China’s broader strategy to support sustainable development and bolster economic resilience in 2025.

China and U.S. Intensify Trade Restrictions with Dual Export Control Measures

On January 2, China’s Ministry of Commerce (MOFCOM) imposed new export control measures targeting 28 U.S. entities, including defense industry leaders General Dynamics, Boeing Defense, Space & Security, and Lockheed Martin. These restrictions prohibit the export of dual-use items—goods, technologies, and services with both civilian and military applications—to the listed companies. Exporters seeking exemptions must secure special approval from MOFCOM.

The “unreliable entities list” aims to address foreign companies and individuals that disrupt market rules, breach contracts, or undermine China’s national security and economic interests. MOFCOM emphasized that these restrictions are intended to safeguard China’s legitimate rights without affecting law-abiding foreign businesses operating in the country. The ministry underscored that the measures specifically target entities involved in arms sales to Taiwan while reaffirming China’s openness to foreign investment and its commitment to maintaining a stable and fair business environment.

In a related move, on January 3, the U.S. Department of Commerce expanded its own export control list by adding 11 Chinese entities, including renowned research institutions such as the Changchun Institute of Optics, Fine Mechanics, and Physics under the Chinese Academy of Sciences, Peng Cheng Laboratory, and the Shanghai Institute of Optics and Fine Mechanics.

The U.S. Commerce Department claimed that these entities sought access to U.S.-origin items, with seven identified as playing a key role in developing hypersonic technology. The department cited concerns that these organizations support China’s military-civil fusion strategy, posing potential national security risks.

These dual export control measures highlight the escalating trade and technology tensions between the world’s two largest economies, signaling heightened scrutiny over sectors deemed critical to national security.

China Implements Gradual Retirement Age Reform Starting January 2025

China’s new policy to gradually raise the statutory retirement age took effect on Wednesday, following an interim guideline jointly issued by the Ministry of Human Resources and Social Security, the Organization Department of the CPC Central Committee, and the Ministry of Finance.

Starting January 1, 2025, male workers aged 60 and female workers aged 50 or 55, depending on their occupational category, can opt to extend their retirement age. Over the next 15 years, the retirement age will rise to 63 for men and 55 or 58 for women.

Employees who prefer early retirement must notify their employers in writing at least three months in advance. Conversely, workers choosing to delay retirement past the statutory age must formalize an agreement with their employers at least one month prior. Postponement is capped at a maximum of three years.

The guideline mandates that employers uphold the same rights and benefits for employees who delay retirement, ensuring continued social insurance coverage and labor protections. Workers who initially opt to postpone their retirement may reverse their decision, provided they reach a mutual agreement with their employers.

The reform aims to address demographic challenges, optimize the labor force, and bolster the long-term sustainability of China’s social security system.

Alibaba Strengthens Strategic Focus with Share Buyback and Sun Art Divestment

On January 2, Alibaba Group Holding announced the repurchase of 3.7736 million ordinary shares on the New York Stock Exchange, with buyback prices ranging from $10.53 to $10.62 per share, amounting to a total of $39.99 million. In 2024, Alibaba allocated $16 billion (approximately CNY 116.8 billion) to its share repurchase program. The company still has $20.7 billion remaining under its buyback plan, which is valid until March 2027.

In addition, Alibaba disclosed that its subsidiaries and New Retail unit have reached an agreement with DCP Capital to sell their entire stake in Sun Art Retail for up to CNY 11.96 billion (approximately USD 1.68 billion), representing 78.7% of Sun Art’s issued shares.

Jiang Han, Senior Researcher at Pangoal Institution, commented that Alibaba is actively optimizing its investment portfolio to align more closely with its long-term growth strategy. He noted that while the divestment may lead to short-term financial losses, it will free up significant capital for reinvestment in high-growth, strategic sectors, ultimately enhancing the company’s long-term competitiveness.

C919 Completes Maiden First Commercial Flight Out of Mainland China on New Year’s Day

China’s domestically developed passenger jet, the C919, successfully completed its inaugural international commercial flight from Shanghai to Hong Kong on New Year’s Day, marking a significant milestone for China’s aviation industry.

China Eastern Airlines, the first global customer and operator of the C919, has received 10 of the jets, making it the world’s largest C919 fleet operator. The airline has placed orders for 105 of the narrow-body jets from the manufacturer, Commercial Aircraft Corp of China (COMAC).

The New Year’s Day flight made Hong Kong the ninth city to host C919 operations after Shanghai, Beijing, Chongqing, Chengdu, Xi’an, Guangzhou, Taiyuan, and Wuhan.

Passengers on the flight were treated to a curated dining experience showcasing regional specialties. Business class passengers enjoyed Hong Kong-style dim sum with rice porridge, Shanghai-style preserved tofu, and scallion oil noodles, while economy class travelers savored Shanghainese oyster sauce chicken noodles alongside White Rabbit candy and other popular side dishes.