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NEWS IN CHINA

• China’s Defense Budget Growth Slows to 7% in 2026: China’s defense budget growth is expected to ease to 7 percent in 2026, according to a draft report submitted to the national legislature. This marks the 11th consecutive year of single-digit growth, following three years at 7.2 percent. The draft allocates about 1.9 trillion yuan ($275 billion) for national defense. Experts described the increase as moderate and stable, reflecting economic strength, defense needs, and external security challenges. Song Zhongping, a military affairs analyst, noted that part of the budget will support personnel benefits and daily operations, while training and equipment upgrades also require substantial funding. Wang Yunfei emphasized that advanced weaponry demands higher investment in research, production, and maintenance. China has recently showcased progress in defense modernization, commissioning its third aircraft carrier, Fujian, and unveiling new hypersonic missiles and drones during the 2025 V-Day parade. Analysts argue that stable spending is essential amid regional tensions in the South China Sea, Taiwan Strait, and Japan’s military revival, as well as global conflicts from Ukraine to the Middle East.
  
  
• Xi Urges Jiangsu to Lead in High-Quality Development: President Xi Jinping on Thursday called on major provincial economies to strengthen their ability to respond to new challenges and contribute more to national development. Xi made the remarks while joining deliberations with deputies from Jiangsu Province at the fourth session of the 14th National People’s Congress in Beijing. Xi emphasized that developing new, quality productive forces is key to advancing high-quality economic growth and boosting China’s global competitiveness. He urged Jiangsu, one of the country’s leading economic provinces, to take the lead in this effort. The president highlighted the need to promote the integrated development of education, science and technology, and talent, while striving for breakthroughs in original innovation and key core technologies. Xi noted that economically strong provinces can play a vital role in stabilizing the national economy. He encouraged Jiangsu to enhance resilience, deepen participation in the unified national market and expand high-standard opening up. He also stressed that Chinese modernization should deliver common prosperity, urging efforts to boost employment, raise incomes and improve public services and social security.
  
  
• China to Dispatch Special Envoy to Middle East for De-escalation While Chinese Airlines Resume Limited Routes: China has pledged to increase diplomatic efforts to ease rising tensions in the Middle East following recent military strikes against Iran by the United States and Israel. Foreign Ministry spokesperson Mao Ning said Thursday that Beijing will continue working with all sides, including those directly involved in conflicts, to maintain communication, promote dialogue, and build consensus. Mao announced that Zhai Jun, China’s special envoy on Middle East affairs, will soon visit the region to push for de-escalation. She emphasized that China is gravely concerned about the situation and has already engaged in intensive outreach and over the past few days, Foreign Minister Wang Yi has held phone calls with counterparts from Russia, Iran, Oman, France, Israel, Saudi Arabia, and the UAE to exchange views on the crisis. The tensions have also disrupted regional aviation. Since February 28, flights across the Middle East have been severely affected by the conflict. Following safety assessments, several Chinese airlines have gradually resumed limited services between China and Middle Eastern destinations, including routes linking Beijing, Guangzhou and Haikou with cities such as Riyadh, Dubai, Jeddah and Muscat. 
  
  
• China’s Core AI Industry to Reach 1.2 Trillion Yuan by 2026: China’s core artificial intelligence (AI) industry is expected to reach a scale of 1.2 trillion yuan by 2026, with more than 6,200 enterprises operating in the sector, according to Minister of Industry and Information Technology Li Lecheng. Speaking at the first “Ministerial Corridor” press conference, Li outlined China’s progress in artificial intelligence development. He highlighted three key trends shaping the sector. First, China’s large-scale AI models are expanding globally. Open-source models launched by Chinese companies recorded the highest download volumes worldwide last year, helping lower the cost of AI adoption and broaden access. Second, AI technologies are increasingly transforming industrial production as unmanned operations and human-machine collaboration are becoming more common in factories, improving efficiency in design, manufacturing and quality inspection. Third, smart terminals powered by AI are entering everyday life. Li also noted that Chinese companies launched more than 300 humanoid robots in 2025, accounting for over half of the global total. Looking ahead, Li stated that China will further promote the integrated development of AI and manufacturing in line with the government’s policy priorities for 2026. 
  
  
• CPPCC Member Urges Measures to Address Rental Housing Challenges: During the 2026 Two Sessions, Chen Xia, a member of the Chinese People's Political Consultative Conference National Committee and researcher at the Chinese Academy of Social Sciences, highlighted growing challenges faced by key groups in China’s rental housing market. Chen noted that while China has expanded rental housing supply under a housing system combining renting and purchasing, structural challenges remain for certain groups, including urban service workers, young people, families and the elderly. First, the rapid growth of new employment groups such as food delivery riders, courier workers and ride-hailing drivers has increased demand for affordable dormitory-style accommodation. However, the supply of standardized low-cost “one-bed” housing has lagged behind demand, forcing many workers to live in informal or distant housing. Second, although more single-room apartments have been built for young renters, issues such as poor location, limited facilities and imbalance between housing and workplaces persist. Third, stable rental options for families and elderly tenants remain limited. Chen proposed expanding dormitory housing supply, revitalizing youth-oriented apartments and improving stable rental options for families and elderly residents. 
  
  

SOCIAL MEDIA CHATTER

Call to Raise Farmers’ Pensions to 1,000 Yuan Sparks Debate on Weibo: A post with the hashtag #Hu Xijin on Suggestion to Raise Farmers' Pensions to 1,000 Yuan# is going viral on Weibo after commentator Hu Xijin voiced support for a proposal to substantially increase farmer pensions. The suggestion was put forward by Zhang Xuewu, a deputy to the National People's Congress of China, who recommended gradually raising farmers’ pensions to about 1,000 yuan per month between 2026 and 2030. The proposal suggested funding the increase through state-owned asset revenues and other stable financing channels. Online reactions have been overwhelmingly supportive, with many users highlighting the extremely low level of rural pensions. One prominent comment stated that the proposal represents “a meaningful recognition of farmers’ silent contributions over decades.” Another user commented that current pensions, often around 200 yuan or even less in some regions, are “far from enough to cope with rising living costs.” A few other users highlighted that “raising pensions would not only improve rural livelihoods but also ease the financial pressure on younger family members”. Some users also added that stronger rural pension support could encourage consumption, as families would no longer feel compelled to save excessively for their parents’ retirement.

INDIA WATCH

Guancha Examines India’s Efforts to Attract Global Chip Investment: An article published in Guancha analyzes India’s push to develop its semiconductor industry. The article stated that an Indian trade delegation recently visited Eindhoven, Netherlands, a major semiconductor hub, to explore cooperation with Dutch chip companies and equipment suppliers. According to the report, India has pledged billions of dollars in subsidies to attract chipmakers, offering up to 50 percent of project costs in federal support, with state governments adding another 20-25 percent. Several projects are under development, including Tata Electronics’ $14 billion chip plant in Gujarat. The article noted that Dutch companies are also exploring diversification opportunities amid export controls and shifting market dynamics, while firms such as ASML have signaled interest in expanding engagement with India. However, the analysis suggested that India’s semiconductor ambitions still face structural constraints. Experts cited in the article noted that previous initiatives, including the “Semicon India” program launched in 2021, have delivered limited results, with few large-scale projects materializing. The article added that India’s relatively small semiconductor ecosystem, weak export competitiveness and limited domestic supply chain integration continue to hinder its progress toward becoming a major global chip manufacturing hub.

Prepared By

Neha Maurya

Neha Maurya is a fourth-year undergraduate student at FLAME University, pursuing a major in International Studies with a minor in Public Policy. Her research interests lie in strategic studies, governance, and education policy. She aspires to engage in work that links research insights to policy outcomes.