China Policy Monitor No. 1667

BEIJING WARNS CITIZENS AGAINST RUSSIAN MILITARY CONSCRIPTION
The Chinese Consulate in Vladivostok has issued a rare warning to PRC nationals about a new Russian decree mandating military service for foreign men. The message "consistently urges" Chinese citizens to "make prudent decisions" to maintain lawful status in Russia. Under the "temporary procedure" signed by Vladimir Putin on November 5th, non-Russian citizens aged 18 to 65 seeking permanent residency or citizenship must sign a one-year military contract unless they provide medical exemptions or proof of prior service. Citing severe Russian manpower shortages on the battlefield in Ukraine, the outspoken former Global Times editor, Hu Xijin, urged Chinese to avoid "inadvertently becoming conscripts." Kyiv has captured at least two Chinese mercenaries and claims Moscow has recruited more than 150 Chinese to fight via social media. (South China Morning Post, February 24, 2026)

CHINA HIKES FIBER OPTIC PRICES FOR RUSSIAN DEFENSE SECTOR
Chinese suppliers have increased fiber optic prices 2.5 to 4 times for 2026 contracts, according to the Russian telecom firms Incab and TransTeleCom. The price for the industry-standard G.652D fiber surged from 16 yuan per km in early 2025 to 40 yuan in January 2026. Demand spiked as Russia consumed 10.5% of global output in 2025 — up from 1% — driven by AI data center expansion and the deployment of fiber-optic-controlled drones. Russia's sole domestic producer shut down last spring after a Ukrainian drone strike. Since then, due to Western sanctions, Moscow has become dependent on Chinese suppliers who now mandate 100% prepayment on all orders – a change that is likely to constrain Russian drone manufacturing. (Militarnyi, February 28, 2026)

CHINA'S BIRTHS HIT RECORD LOW, POPULATION DECLINE ACCELERATES
Driven by record-low births, China's official population fell by 3.39 million in 2025. The 7.93 million births recorded last year is the lowest figure since 1949 and the national fertility rate remains at 1.3 — well below the 2.1 replacement rate. The working-age population (16-59) has contracted to 60.6 percent of the total, down from 70 percent a decade ago, while projections suggest 30 percent of China's citizens will be over 60 by 2034. To mitigate the resulting labor shortage and pension deficit, in 2024 Beijing began raising the retirement age and last year introduced a $500 per child subsidy. So far, these incentives have proven insufficient to offset long-term structural constraints, most importantly the shortage of women of child-bearing age. (Bloomberg, February 4, 2026)

EU BARS CHINA FROM CRITICAL TECHNOLOGY RESEARCH GRANTS
The European Union has prohibited China-based organizations from participating in its €93 billion ($110 billion) Horizon Europe program in "critical areas," including AI, quantum computing, semiconductors, and biotechnology. Citing research security and potential military applications, the new regulations require non-Chinese applicants to certify that partners are not controlled by PRC entities. The move follows long-standing EU grievances regarding the lack of reciprocal access to China's state-funded science programs. "In an era when geopolitics increasingly shapes research ties, the EU's policy shift is not entirely surprising," said Cao Cong of the University of Nottingham in Ningbo. While barred from strategic sectors, China-based researchers may still apply for funding in non-sensitive fields such as climate science, agriculture, and biodiversity. (South China Morning Post, February 19, 2026)

[EDITOR'S NOTE: Horizon Europe is the EU's flagship research and innovation program. Since the 1980s, it has attracted applicants from more than 100 countries. In the previous funding cycle (2014-2020) of about €80 billion, the U.S. and China were the top non-EU recipients.]

AMID "CHINA SHOCK," GERMAN CHANCELLOR MERZ VISITS BEIJING
German Chancellor Friedrich Merz has visited Beijing and Hangzhou with a 30-strong business delegation. The trip comes amid a precipitous decline in German exports, which have fallen 23 percent since 2022, resulting in a $106 billion bilateral trade deficit in 2025. German car shipments, for instance, fell 66 percent between 2022 and 2025. Berlin attributes the trend to Beijing's undervalued yuan and industrial subsidies which have pushed Chinese manufacturers up the value chain and led to overcapacity, which lowers prices. Meanwhile, German investment in China hit a four-year high in 2025 as firms seek access to the Chinese market. Merz's arrival follows visits by French President Emmanuel Macron, British Prime Minister Keir Starmer, and Canadian Prime Minister Mark Carney. (U.S. News & World Report, February 26, 2026)