NEWS / the week of Dec 28 to Jan 2, 2026
Current news about China and the Chinese people
NOTE: The news reports below are not in chronological order. There is often a time lag in their reaching the US and in gaining our attention. These reports reflect the opinions of a variety of news sources.
International Relationships
Major news from China over the past week (late December 2025 to January 2, 2026) has centered on a series of aggressive military drills near Taiwan, significant New Year policy shifts, and a notable demographic milestone.
Geopolitics and Military
Large-Scale Drills Around Taiwan: At the end of December, China conducted massive live-fire military exercises named "Justice Mission 2025." The drills involved dozens of rockets and a simulated blockade of major Taiwanese ports. While Beijing announced the completion of the drills on December 31, Taiwan remains on high alert as of January 2, 2026.Chinese Vessels Pull Back, Taiwan Remains on High Alert
China launches live-fire drills simulating blockade
President Xi’s New Year Address: In his annual message, President Xi Jinping reiterated that the "reunification" of Taiwan is "unstoppable." He also highlighted the 14th Five-Year Plan's successes, claiming the country's GDP is expected to reach 140 trillion yuan.
Ministry of Foreign Affairs: Xi Jinping's 2026 New Year Message:
Xi Jinping Gives his New Year outlook.
Economy and Technology
Digital Yuan Evolution: Starting in January 2026, China’s digital yuan (e-CNY) has begun accruing interest at demand deposit rates. This is a major departure from global norms for central bank digital currencies, effectively positioning the e-CNY as a savings instrument rather than just digital cash.
Interest payments to start for China’s digital yuan
Massive Infrastructure Investment: The National Development and Reform Commission (NDRC) released early 2026 investment plans totaling approximately $42.21 billion for "Two Major" projects, aimed at stabilizing growth as the country transitions to the 15th Five-Year Plan.
China issues early 2026 investment plan worth $42 billion
Society and Trade
Demographic Shift & Contraceptive Tax: January 1, 2026, marked the 10th anniversary of the end of the one-child policy. To combat falling birth rates, China implemented a controversial 13% value-added tax on contraceptives while simultaneously exempting childcare and marriage services.One-child policy 10 years later: China wants more babies
Trade Tensions with Australia: On December 31, China hit the Australian beef industry with a 55% tariff on imports exceeding certain quotas, a move seen as a protective measure for China's domestic industry.