On September 18, 2025, Peking University’s Huang Yiping put it plainly: lifting total factor productivity is the only path to high-quality growth. That part is right. The harder part is delivery. The notion that a state-planned system can “optimally” allocate land, capital, and talent strains belief. Inside the Party School, Zhang Zhanbin proposes a government “land supermarket” to offload unsold plots and urges rural households to swap homestead rights for cash and an urban hukou. They expand supply; they don’t fix misallocation.
Look at the scoreboard, data show China’s catch-up in productivity has slowed sharply. In the 2010s the gap with the U.S. narrowed by roughly five percentage points, after a 30-point surge in the prior two decades. The post-lockdown bump in 2023 faded, 2024 underwhelmed, and nothing today signals a return to rapid convergence. The culprits are familiar: capital poured where returns are thin and incentives blunt reallocation to higher-productivity firms and sectors.
The XV Five-Year Plan will tell us if TFP moves from seminar to strategy. That means rules that let assets and people move to their best use, not new storefronts for old inputs. Without that, “high-quality development” risks announcing yesterday’s news.
Since 2020, EU trade with China has grown 33%, and with the U.S. 73%.
From January to July 2025, Germany’s car exports to China fell to a 13-year low by value, 64% below the 2023 peak. Put differently, that’s a loss of over €1 billion per month in auto exports compared with the peak year
On 23 September, while attending the 80th session of the UN General Assembly, Premier Li Qiang announced that, as a “responsible developing power,” China will not seek new special and differential (S&D) treatment in current or future WTO negotiations.
What Beijing is signaling is that in new talks it will not ask for additional carve-outs, but it is not relinquishing any S&D rights already embedded in existing WTO agreements. This is largely a political gesture intended to ease frictions.
For what is already agreed, nothing changes: China will continue to invoke its current S&D flexibilities and its developing-country status.
Border hiccups on the Poland–Belarus route have exposed how oversold China’s claim is that rail is an “essential” EU–China trade channel.
Volumes are small: 866 thousand tons inbound to the EU in H1 2025 versus 213 thousand tons outbound. At roughly €2.5 per kg, that puts the cargo value at the bottom end for durable consumer goods.
Rail adds some value at the margin. EU wholesalers can trim warehouse costs by keeping part of their stock in transit on block trains, which increase restocking frequency compared with ships. But rail’s share of EU–China trade is tiny next to ocean, and flows are heavily one-way (see chart).
On balance, rail serves more as a policy tool(*) for China than as a backbone of EU trade.
(*) Subsidy cuts are happening, but unevenly and with little transparency, as is typical in China
In a brief note published on September 26, the Ministry of Commerce announced that, starting January 1, 2026, all electric vehicles will be subject to an export license.
China quietly split EV export codes this year into with-VIN and no-VIN; a VIN is essentially a car’s ID. From Jan 1, 2026, Beijing will license with-VIN EV exports to rein in unauthorized parallel sales. The EU doesn’t acknowledge a no-VIN category at import, so such consignments should be treated as parts or components, not complete cars. Yet the mirror doesn’t line up: China says it has already shipped $143 million in no-VIN “cars” to the EU in 2025.
Christmas-season exports typically peak in August. Despite heavy front-loading, Chinese exporters couldn’t avoid a 25% drop in shipments to the U.S. (by value). The overall decline this season is just 3% because sellers pivoted to other markets: exports rose 22% to the EU, 19% to the UK, and 16% to Canada.
Avoiding Mexico as a route into the U.S., Chinese Christmas goods also fell to the U.S. neighbour (-7%) with the export season nearly complete.
September is over, and here’s SOAPBOX’s forecast for China’s trade: exports $321bn (+5.6% y/y); imports $227bn (+2.2% y/y); trade surplus $94bn, up 15% from $82bn a year ago.
With a daily surplus above $3 billion, China is tracking toward an all-time-high $1.2 trillion surplus this year.
Official figures will be released by October 20, alongside Q3 GDP
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