China Policy Monitor No. 1641

PANAMA AUDITOR FILES SUIT TO SCRAP CK HUTCHISON PORT CONTRACTS
Panama's Comptroller General, Anel Flores, has filed lawsuits with the country's Supreme Court to annul and declare unconstitutional a port contract near the Panama Canal held by the Panama Ports Company, a local firm controlled by Hong Kong-based CK Hutchison. The legal action targets the 2021 renewal of a 25-year concession to operate the Balboa and Cristobal ports. The court has yet to decide whether it will hear the case. The suits follow a months-long audit led by Flores, who argues the deal fails to serve Panama's interests. Although the full audit remains unpublished, Flores said it uncovered "many irregularities." The challenge could disrupt a pending acquisition by Italian billionaire Gianluigi Aponte's MSC and U.S. investment firm BlackRock, which plan to buy CK Hutchison’s global port assets. "They are talking about billion-dollar deals here, which do not include Panama," Flores said. (Reuters, July 30, 2025)

CHINA EARMARKS $12.5 BILLION FOR 2025 CHILD SUBSIDIES
To address its declining birth rate, China has introduced a national childcare subsidy of 3600 yuan per child annually until the age of three. The Ministry of Finance allocated 90 billion yuan ($12.54 billion) for this year's rollout, though experts warn the amount falls well short of what is needed to encourage childbirth. Starting in late August, families can apply to the Department of Population and Family at the National Health Commission, which offers partial payments for children under age three. Provinces already offer various subsidies, including housing support — ranging from 1000 yuan to 100,000 yuan — which will now also receive central government support, said the Finance Ministry. (Straits Times, July 30, 2025)

[EDITOR'S NOTE: Rising childcare and education costs, job insecurity, and a slowing economy have led many young Chinese to delay or avoid having children, even as the country rapidly ages. Over the next decade, around 300 million people in China are expected to retire, nearly equal to the entire U.S. population. In response to the falling birth rate, which hit a record low in 2023, authorities introduced a range of "fertility-friendly" policies in 2024, including extended maternity leave and improved maternity insurance.]

U.S. CONFRONTS CHINA ON COVERT RUSSIAN DRONE ENGINE SALES
At the UN, the U.S. urged China to "stop fueling Russia's aggression" in Ukraine. Acting U.S. Ambassador to the UN Dorothy Shea told the 15-member Security Council that Beijing's claims of strict export controls on dual-use goods "fall apart in the face of daily recovery of Chinese-produced components in the drones, weapons, and vehicles that Russia uses against Ukraine. If China is sincere in calling for peace, it should stop fueling Russia's aggression." To avoid detection in the wake of Western sanctions, Chinese-made engines labeled as "industrial refrigeration units" are being covertly shipped via front companies to a state-owned drone manufacturer in Russia. (The Kyiv Independent, July 26, 2025)

SEXUAL IMAGES OF CHINESE WOMEN SHARED VIA TELEGRAM
Sexually exploitative and voyeuristic images of Chinese women — many secretly filmed in public toilets with pinhole cameras — have been widely circulated in encrypted Telegram chat groups, sparking national outrage. A Chinese-language Telegram group called "MaskPark tree hole forum" shared them with more than 100,000 anonymous users in China and abroad. Some users uploaded or sold photos and footage of current or former partners and female relatives. Chatroom members also sold disguised surveillance devices, such as incense holders, to record women covertly. Other pornographic groups on the Russia-based app, which is banned in China and accessible only via VPN, have hundreds of thousands of members. (The Southern Daily, July 27, 2025)

SHAOLIN TEMPLE ABBOT DEFROCKED FOR "EXTREMELY DEPLORABLE" BEHAVIOR
Shi Yongxin, abbot of the 1500-year-old Shaolin Temple and former National People's Congress delegate, is under investigation for embezzlement, improper relationships, and fathering children, according to religious authorities in Beijing. The Buddhist Association of China has revoked his ordination certificate, citing "extremely deplorable" behavior that has "seriously damaged the reputation of the Buddhist community and tarnished the image of monks." Shaolin Temple stated that Shi, 59, is being investigated for misappropriating project funds and temple assets, and for "seriously violating Buddhist precepts" by maintaining long-term relationships with multiple women and fathering at least one child. Shi, who served as an NPC delegate until 2018, was deputy head of the Buddhist Association of China. (U.S. News, July 28, 2025)

[EDITOR'S NOTE: Born Liu Yingcheng, Shi became a monk in 1981, took charge of the Shaolin Temple in 1987, and was named abbot in 1999. Under his leadership, the temple branched out into book publishing, traditional medicine, kung fu performances, film production, asset management, and real estate. In 2015, a letter surfaced online accusing Shi of misconduct, but at the time the temple denied the allegations.]