Taiwanese business leaders didn't accompany Cheng Li-wen's visit to China due to the ongoing economic downturn in China. The share of Taiwanese investment going to China has plunged from 83.8 percent in 2010 to just 2.7 percent in the first quarter of 2025. Traditional industries such as cement, steel, petrochemicals, food, and chemicals are now facing intense competition from Chinese local brands.
Most Americans have an unfavorable view of China, but positive views are increasing. Confidence in Chinese President Xi Jinping to do the right thing regarding world affairs has gone up 4 points since last year and doubled since 2023. Fewer Americans call China an enemy now than in 2025.
In March, China's exports grew by 2.5%, a five-month low, and far below the 21.8% surge seen over the January-February period. China's March trade surplus came in at $51.13 billion, far below expectations of $108 billion. The full-year economic growth is expected to slow to 4.6% from 5.0%.
This past week, Cheng Li-wun, the chairperson of Taiwan's main opposition party, the Kuomintang, made a rare visit to the People's Republic of China (PRC). It culminated in the much-anticipated summit between Cheng and Chinese President Xi Jinping in his capacity as the Chinese Communist Party’s (CCP) General Secretary. For Beijing, Cheng's visit is a key part of its latest experimentation with what could be called party-to-party diplomacy.
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IMF has lowered its global economic growth forecast, including for China. China is now expected to expand by 4.4% this year, down 0.2 percentage points from January's estimate. China's economy is struggling with a slowing domestic economy and the fallout from the Iran war.
On April 7, the U.S. and Iran agreed to a temporary ceasefire after nearly seven weeks of fighting in the Middle East. Some commentators have expressed concern that China might view this as an opportune time to pursue unification with Taiwan. Since 2022, Xi has purged over 100 high-ranking officials and removed officers in every service and regional command of the People’s Liberation Army (PLA). Only 21 percent of key PLA leadership positions are filled. Xi ordered the PLA to be prepared for a Taiwan invasion by 2027.
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China is gaining from America's trillion-dollar artificial intelligence spending spree despite Washington's efforts to curb Chinese technology ties. Roughly US$2 trillion worth of data-centre projects are planned or under way in the US, with as much as three-quarters of the cost tied to equipment such as semiconductors and servers. Taiwan and South Korea export advanced chips, including memory chips, that are crucial for AI applications. China is an unlikely beneficiary of the US data centre construction boom.