Top China news of 2016

The year 2016 was characterized by political upheaval across the world, but not in China. Many of the most important China stories reported throughout the year — whether in politics, the economy or society — are about trends that have been forming for several years.

We’ve chosen five China news themes that we believe are most representative of the state of the Chinese nation and its relation to the world in 2016. Beneath our top five you can find links to other stories that defined the year, divided into the categories we use in our The China Project daily newsletters.

Foreign acquisitions and the flow of money out of China

Chinese companies went on a global spending spree, snapping up businesses large and small. Noteworthy deals announced include: ChemChina’s $43 billion offer in February for Swiss biotechnology giant Syngenta; Wanda’s acquisitions of Hollywood production companies and theater chains; Tencent’s $8.6 billion takeover of Finnish computer games company Supercell; Haier’s $5.6 billion purchase of GE’s appliance division; and HNA’s $6 billion acquisition of technology and supply chain service provider Ingram Micro.

In a related development, one of the big China stories of 2016 has been capital outflows and the dwindling of China’s foreign exchange reserves, often connected to concern about an economic slowdown. Money poured out unabated through December, contributing by the end of the year to the yuan reaching its lowest levels since 2008, and the government issuing new controls on cross-border capital exchange. By the end of the year, China was no longer the largest holder of U.S. debt: Japan now narrowly holds that title.

The Trump effect

The result of the U.S. presidential race has almost certainly killed the American-led Trans-Pacific Partnership, a trade deal between 12 Pacific Rim nations that excluded China. Many observers saw this as a boost to China’s geopolitical ambitions. After the election, China wasted no time in pushing its own economic agreements with neighbors, and given the dim outlook for environmental regulation under the Trump administration, China is emerging as perhaps the world’s most promising leader of climate and environmental policy. Trump’s precedent-breaking phone call with Taiwanese president Tsai Ing-wen, and his protectionist leanings, have injected new uncertainty into U.S.-China relations. Some observers interpreted China’s seizure of a U.S. underwater drone in the South China Sea in mid-December as a provocation or test from Beijing for Trump.

Shifting regional alliances and heightened South China Seas tensions

A long-awaited international tribunal case, titled Philippines v. China, was ruled in favor of the Philippines on July 12. The decision said that China does not have historic rights over most of the South China Sea; Beijing called the ruling “null and void.” The issue took an unexpected turn when Rodrigo Duterte, the new Philippine president who took office on June 30, reversed his country’s course and cozied up to China, going to extraordinary lengths to court China’s favor and turning his back on the long-held alliance with the U.S. His efforts to sign trade deals and soothe territorial tensions with China were welcomed in Beijing. Following the Philippines’ shift, other countries like Vietnam, Malaysia and Thailand all reconsidered their relations with China, and Malaysia in particular followed through on warming bilateral relations.

U.S.-China military relations became even frostier than usual. The American side has insisted for years that China’s island-reclaiming operations in the South China Sea are not legitimate, but tensions ratcheted up to new heights when a U.S. think tank revealed in December that China had deployed weapons systems to artificial islands in the sea. The Chinese side did not deny the deployment, and instead argued that they were for defensive purposes only against “threatening moves.” Admiral Harry Harris, head of the U.S. Pacific Command, said that the United States is “ready to confront” China if its actions in the South China Sea result in denial of access to a “shared domain.”

Tech advances: From a giant radio telescope to 3D-printed blood vessels

In 2016, there were fewer sniggers about China’s ability to innovate. The country successfully launched a new manned spacecraft in preparation for missions to the Moon and Mars in the coming decades, and built the world’s largest radio telescope. In medicine, China approved the world’s first vaccine for the human papilloma virus (HPV), made striking innovations in human gene editing, and successfully transplanted artificial blood vessels created with a 3D printer into monkeys.

End of the one-child policy

From January 1, 2016, all Chinese couples were allowed to have two children, ending China’s one-child policy more than 35 years after it came into effect. Though birth rates in 2016 increased, it is unclear how much — if any — effect the new policy has had, and many critics believe that the loosening of restrictions does not go far enough and that all reproductive restrictions should end.

More stories in: BUSINESS AND TECHNOLOGY

• The year 2016 saw a property boom, or a bubble, depending on whom you ask.
• China aimed to shutter 1,000 coal mines over the course of the year, and ended up halting production at nearly 300.
• Uber sold its China business to Didi Chuxing.
• Facebook CEO Mark Zuckerberg made nice with Chinese propaganda chief Liu Yunshan, and his company reportedly began developing custom censorship tools for the Chinese government.
• The Chinese yuan became an official reserve currency of the International Monetary Fund (IMF).
• President Xi’s signature political effort, a sweeping anti-corruption campaign now in its third year, began to attract more attention as a drag on the economy.
• China hosted the G20 summit in Hangzhou, highlighting the country’s work to become a world economic and political leader.
• The National People’s Congress approved a new five-year plan, with ambitious targets for growth and the reform of state-owned enterprises.
• Samsung’s late recall of its Galaxy Note 7 in China met with outrage from the public.

More stories in: POLITICS AND CURRENT AFFAIRS

• President Xi Jinping assumed the title of “core” leader on October 27. It is a marker of “almost absolute authority” last held by Deng Xiaoping and Mao Zedong. The first indications that Xi’s status was set to rise to this level came in January.
• The Cyberspace Administration of China (CAC) deleted the popular microblog account of property tycoon Ren Zhiqiang in February after he posted statements questioning the party’s tightening leash on state media. China passed measures in November to solidify control over the internet. At the third World Internet Conference in Wuzhen, which brought leaders in technology and politics from all over the world, the Cyberspace Administration of China pushed its vision of “internet sovereignty.” The concept was promoted again in a strategy report released by CAC in December.
• China barred two pro-independence politicians from taking office in Hong Kong’s legislative council, triggering a wave of anti-Beijing protests in Hong Kong. The move was another sign of Beijing’s increasingly tight control over the Special Administrative Region, which was promised a high degree of autonomy when it returned to Chinese control in 1997. In late 2015, five men who had published and distributed books critical of Chinese government officials disappeared. The booksellers turned up in the custody of Chinese police.
• Economic troubles early in the year led to unusually large and frequent labor strikes.
• State media reported on corruption among 45 officials in Liaoning Province who had bought their delegate positions to the National People’s Congress.
• China passed a new law to regulate over 7,000 foreign NGOs, putting them under the direct authority of the Ministry of Public Security. Organizations in politically sensitive areas, like workers’ rights and religious freedoms, were particularly targeted.
• Protests in Wukan, a small fishing outpost near Hong Kong nicknamed “democracy village” in 2011, turned violent and were quickly subdued by a thousand-strong police force wielding tear gas and rubber bullets.
• According to defense industry analysts, China is set to double its military spending to $233 billion in 2020, up from $123 billion in 2010.
• The death in police custody in May of a 29-year-old Beijing resident and environmentalist named Lei Yang caused an outrage online. In December, news that the five police officers involved in his arrest would not stand trial for his death reignited the controversy.

More stories in: SOCIETY AND CULTURE

• The number of people making and watching live-streaming videos in China reached 325 million in June.
• Laws prohibiting domestic violence came into effect on March 1. The prohibitions, which cover both psychological and physical abuse, mark a big step in a country that has long treated such issues as private matters to be resolved within the household.
• Over a year after President Xi Jinping lashed out against increasing instances of “weird architecture,” China’s State Council issued a directive prohibiting “oversized, xenocentric, and weird” architecture, and called for buildings that are “suitable, economic, green, and pleasing to the eye.”
• Chinese state media reported that flooding in 2016 was the most severe since 1998. Other natural disasters also appear to be on the rise.
• Billed as “the biggest magic kingdom ever,” the $5.5 billion Disneyland in Shanghai opened its gates in June.
• Claiming the year’s prestigious Hugo Award for best science fiction novelette was Chinese author Hao Jinfang’s Folding Beijing, a story about a dystopian Beijing divided into three physical layers for the elite, middle class and underclass.
• Chinese actor Wang Baoqiang announced he was divorcing his wife in August after she had an affair with his agent and secretly transferred some of the couple’s joint assets. The topic quickly became a nationwide debate on issues like divorce, the responsibilities of spouses and the public disclosure of private affairs.
• The gruesome murder-suicide of Yang Gailan, a farmer in rural China, and her four children, all under seven years old, in August sparked a national debate over inequality and the harsh conditions endured by rural families.
• In an Olympic Games dominated by star athletes and gold-medal performances, Fu Yuanhui broke through by having a really, really fun time, capturing China’s attention and adoration for her goofiness and unchecked reactions.