China Digest (24-28 March 2025)

India-China Relations

India and China Hold Diplomatic Talks to Review Border Situation and Resume Kailash Mansarovar Yatra

On March 25, 2025, India and China conducted the 33rd meeting of the Working Mechanism for Consultation & Coordination on India-China Border Affairs (WMCC) in Beijing. The Indian delegation was led by Joint Secretary Gourangalal Das, while Director General Hong Liang headed the Chinese side. The discussions, described as positive and constructive, focused on maintaining peace along the Line of Actual Control (LAC) and implementing decisions from the 23rd Special Representatives' meeting held in December 2024. Both nations agreed to enhance diplomatic and military mechanisms for effective border management and explored resuming cross-border cooperation, including the Kailash Mansarovar Yatra. Plans are underway for the next Special Representatives' meeting in India later this year. Click here to read... [2]

EAM Jaishankar Highlights Efforts to Rebuild India-China Ties

External Affairs Minister S. Jaishankar stated that India and China are working to repair their strained relationship following the 2020 Galwan clashes, as prolonged tensions serve neither country’s interests. Speaking at an interactive session hosted by the leading think-tank Asia Society, he acknowledged that while differences between the two nations may persist in the foreseeable future, they should not escalate into disputes. He noted progress since the October 2024 disengagement pact for Depsang and Demchok and emphasized the need to move bilateral ties toward a "predictable path." Click here to read... [3]

Geopolitical and Diplomatic Developments

China Reveals Advanced Deep-Sea Cable Cutter with Global Strategic Implications

China has unveiled a compact deep-sea cable-cutting device capable of severing undersea communication and power lines at depths up to 4,000 meters. Developed by the China Ship Scientific Research Centre (CSSRC) and the State Key Laboratory of Deep-sea Manned Vehicles, this tool is designed for integration with China's advanced crewed and uncrewed submersibles, such as the Fendouzhe(奋斗者) and Haidou(海斗)series. While intended for civilian applications like salvage and seabed mining, the device's ability to cut armoured cables - responsible for 95% of global data transmission - raises concerns about its potential use in disrupting critical undersea networks. Click here to read... [4]

China Seeks to Expand Comprehensive Cooperation with ADB, Says Premier Li Qiang

Chinese Premier Li Qiang met with Asian Development Bank (ADB) President Masato Kanda in Beijing, expressing China’s commitment to deepening cooperation with the ADB. Li emphasized the need for stronger regional economic integration, trade facilitation, and macro policy coordination to counter global economic uncertainties. He highlighted China’s readiness to collaborate with the ADB on financial and knowledge-based initiatives, including green development, healthcare, and digital economy. Kanda reaffirmed the ADB’s commitment to strengthening ties with China, recognizing its role in regional and global economic growth. Click here to read... [5]

Military and Security Updates

China Expels Japanese Fishing Boats Amid Escalating Island Dispute

China’s coastguard expelled four Japanese fishing vessels from waters near the disputed Diaoyu (Senkaku) Islands, prompting Tokyo to accuse Beijing of escalating tensions in the East China Sea. The Chinese coastguard stated that it took “necessary control measures” between March 21-24 to drive the boats away, reaffirming China’s claim over the islands. In response, Japan summoned China’s ambassador and condemned the actions as a “unilateral attempt to change the status quo by force.” With Chinese coastguard ships maintaining a record-long presence near the islands and armed patrols increasing, the dispute continues to strain China-Japan relations, drawing concerns from Washington. Click here to read... [6]

Economic and Trade Trends

Shanghai Eases Regulations to Boost Foreign Investment and Economic Growth

Shanghai has announced plans to reduce bureaucratic hurdles to attract foreign investment and stimulate economic growth. The initiative includes streamlining business registration processes and accelerating license approvals for new companies. Additionally, Shanghai aims to enhance support for foreign research and development centres, expand the opening-up of the service sector, and improve mechanisms for cross-border data flow. Click here to read... [7]

China Advances State-Owned Enterprise Reform with Focus on Innovation and Efficiency

China's state-owned enterprise (SOE) reform and upgrading initiative has surpassed a 70% completion rate, with significant progress in technological innovation, industrial modernization, and governance restructuring. Key enterprises are enhancing research collaboration, modernizing logistics and offshore energy operations, and improving corporate governance through market-driven mechanisms. The government aims to fully implement reforms by 2025, ensuring SOEs align with national strategies and global competitiveness. Authorities emphasize a results-oriented approach, prioritizing innovation, efficiency, and strategic alignment with economic and technological advancements. Click here to read... [8]

Technology and Innovation

DeepSeek Upgrades AI Model with Enhanced Coding and Math Capabilities

Chinese AI company DeepSeek has released an upgraded version of its open-source language model, DeepSeek-V3-0324, improving its performance in coding and mathematical problem-solving. The new model has 685 billion parameters and achieved significant benchmark improvements, including a higher score in the American Invitational Mathematics Examination (AIME). It has gained attention on platforms like Hugging Face, where it is trending. Developers and researchers have praised its efficiency, with some suggesting it rivals models from OpenAI and Anthropic. Speculation is growing about the upcoming release of DeepSeek's next reasoning model, R2. Click here to read... [9]

China Dominate Global Robotics Funding, Study Finds

A new study by GlobalData reveals that US and Chinese robotics start-ups have attracted 75% of global venture capital funding over the past six years, solidifying their dominance in automation and AI-driven robotics. Between 2018 and 2024, the US secured $49.9 billion in robotics investments, while China attracted $24.4 billion, driven by state-backed initiatives and private sector funding. The report highlights how both nations are shaping the future of industrial automation, with China focusing on manufacturing upgrades and the US leveraging robotics to enhance productivity and offset labour costs. Experts predict continued US-China leadership in the sector as investment surges into humanoid robotics and AI-powered automation. Click here to read... [10]

Internal Politics and Policy Shifts

2025 Report on the Work of the Government

The Report, delivered at the third session of the 14th National People's Congress of the People's Republic of China, highlights that China’s government aims to boost new consumption trends, focusing on digital, green, and smart sectors. Young consumers prioritize quality, affordability, and user experience, driving demand for outdoor sports, AI-integrated shopping, and first-time purchases. The rise of these trends highlights the shift towards innovative and experience-driven consumption. New technologies, new ideas and new demands are driving the emergence of new consumption formats, and the cross-border integration of consumption scenarios has brought about new incremental consumption demands. Click here to read... [11]

Key Readings & Reports

Report: Chinese Communist Party Covert Operations Against Taiwan by Global Taiwan Institute

The report suggests that the Chinese Communist Party (CCP) conducts extensive covert operations against Taiwan as part of a broader political warfare strategy aimed at annexation. These operations encompass intelligence gathering, cyber intrusions, and influence efforts through United Front Work. Espionage cases have increased, with Taiwan seeing a rise in financial incentives for recruitment and targeted influence on its military and political landscape. The report highlights Taiwan as the most cyber-attacked nation in the Asia-Pacific, with PRC-backed hackers targeting government networks, infrastructure, and intellectual property. Additionally, the CCP promotes unification through cultural exchanges, economic leverage, and political influence, with over 150 identified organizations linked to its United Front system. Taiwan’s response is hindered by the scale of these threats, necessitating stronger foreign agent registration, stricter espionage penalties, enhanced cybersecurity, and increased oversight of PRC-linked interactions. As Beijing prioritizes "national unification," the report underscores the existential threat these covert operations pose to Taiwan’s democratic institutions and sovereignty. Click here to read... [12]