PRC REPORTS LARGEST EVER TRADE SURPLUS
China recorded a world-record $1.19 trillion trade surplus last year, eclipsing its previous peak, in 2024, of $993 billion. The surge occurred despite U.S. tariffs intended to redress Beijing's industrial subsidies. While exports to the U.S. did weaken, the tariffs triggered diversionary trade flows into Southeast Asia, Africa, and Latin America, which, in turn, have precipitated growing concerns about the "dumping" of low-priced Chinese goods. The data demonstrates that Chinese exporters can thrive without the U.S. market by deepening entrenchment in other global supply chains. The PRC's trade surplus is likely to grow in 2026, further widened by stagnant domestic demand. (BBC, January 14, 2026)
CHINESE, CANADIAN LEADERS INK DEALS, SLASH TARIFFS
In Beijing for the first leader-level visit since 2017, Canadian Prime Minister Mark Carney signed a deal slashing tariffs on Chinese EVs and Canadian canola. Reversing former Prime Minister Justin Trudeau's 100% surtax, Canada will now permit 49,000 Chinese EVs into the country annually at a 6.1% rate. For its part, China will cut canola seed tariffs from 84% to 15% by March 1, unlocking $3 billion in export orders for Canadian agriculture. Beijing will also permit visa-free access for Canadians, and the two sides will restart high-level economic dialogues. Both nations pledged to deepen cooperation in agriculture, oil, gas, and green energy, signaling a strategic reset in bilateral relations. Canada aims to export 50 million metric tons of liquified natural gas (LNG) annually to Asia by 2030. Carney also called for Chinese investment in Canada's offshore wind and power grids. (Al Jazeera, January 16, 2026)
STATE TV AIRS PLA "DECAPITATION" STRIKE DRILL ON TAIWAN
According to China Central Television footage, the PLA recently conducted a "decapitation" strike drill at an undisclosed location simulating the removal of Taiwan's leadership. During the nighttime raid, special operations teams utilized drones for target identification and silent weaponry to neutralize four "terrorists" in under two minutes. The drills, which are seen as a response to the U.S. capture of Venezuelan President Nicolas Maduro, began in 2015 when the PLA used a full-scale replica of Taiwan's Presidential Office Building for combat training. This latest exercise, another effort to intimidate Taiwanese President Lai Ching-te, follows drills in late 2025 in which PLA forces surrounded the island and conducted "mock attacks on key targets." (Nikkei Asia, January 14, 2026)
CHINA DEBUTS "DRONE KILLER" WEAPONS SYSTEM
China has debuted the Hurricane 3000, a truck-mounted high-power microwave (HPM) system designed to neutralize drone swarms at ranges exceeding 3 km. Developed by state-owned Norinco and first displayed at Beijing's September 2025 V-Day parade, the HPM weapon's UAV interception capabilities provide active area denial that purportedly surpasses comparable U.S. systems. It integrates radar and electro-optical sensors to acquire targets before emitting HPM beams that disable their electronics. Capable of independent operation or integration into layered air-defense networks alongside lasers and artillery, the Hurricane 3000 provides a cost-effective alternative to expensive interceptor missiles. In a Taiwan contingency, the PLA would deploy the system to shield invading forces and frontline sites from UAV reconnaissance and saturation strikes. (Asia Times, January 10, 2026)
CHINA'S EAST CHINA SEA GAS EXPLORATION FUELS TENSIONS WITH JAPAN
Japan's Foreign Ministry has lodged a formal diplomatic protest after discovering Chinese mobile rigs conducting exploratory gas drilling near the East China Sea median line separating the exclusive economic zones of the two countries. The Japanese Coast Guard issued navigation warnings for the Chinese vessels, which are operating about 400 km northwest of Okinawa. Despite a 2008 bilateral agreement on joint resource development, China has unilaterally built about 20 drilling facilities on its side of the EEZ boundary. (Chosun Daily, January 9, 2026)