Cover Story: China’s Decade-Long Quest to Ease the Pressure on Pupils From an Exam That Shapes Their Life

Deflationary pressure persists: China’s price levels continued to fall in April, official data showed. The consumer price index (CPI) recorded a year-on-year drop of 0.1% last month, the third consecutive month of decline, while the producer price index (PPI) fell by 2.7%. According to a statistician at the National Bureau of Statistics, the fall in the CPI was mainly due to declining international oil prices, which counteracted the effect of rising prices for services. Meanwhile, global trade turbulence saw the prices of manufacturing inputs fall, putting downward pressure on the PPI.

Congo’s cobalt export ban: Chinese analysts said Congo’s cobalt export ban has triggered a sharp short-term price surge, but lingering policy uncertainty and geopolitical tensions leave the global market direction highly unclear. Following Congo’s four-month suspension of cobalt exports announced in February to curb global oversupply, international cobalt prices surged over 60% to $16.55 per pound. The DRC, which supplies over 70% of global cobalt raw materials, had never implemented such a "circuit breaker" before, sparking a three-phase reaction in China: initial price optimism, raw material shortages at smelters, and now widespread confusion among suppliers.

Developer’s debt restructuring: After nearly two months of delays, Chinese developer Jinke Property Group Co. Ltd. and its subsidiary have secured court approval for their debt restructuring plans, formally entering the execution phase. Once a top private developer in Chongqing, Jinke expanded rapidly across China before being caught in the real estate sector’s debt crisis. With over 100 billion yuan ($13.9 billion) in confirmed debt involving more than 9,000 creditors, the restructuring plan involves debt-to-equity swaps, trust units, and partial debt forgiveness. Despite the scale of the bailout, the company’s founder Huang Hongyun may retain control, as his stake remains undiluted through the process.

Surging unemployment payments: China paid out 46.5 billion yuan ($6.4 billion) of unemployment insurance expenditures in the first quarter, an increase of over 22%, government data showed. A local government official said that while the unemployment situation in China is severe, the increase in payments doesn’t mean there has been such a significant rise in the number of jobless people. Low uptake of such social security programs has been a longstanding issue, which is now being more effectively addressed in part due to social media, the official said. Researchers have suggested that boosting social security payments could help boost consumption and offset the impact of the China-U.S. trade war on lower-income groups.

Debt expansion potential: China’s central bank has argued that the country’s overall government debt level is relatively low and has ample room to expand, meaning the country could spend more on social security. The bank argued that the country’s vast state-owned assets and their improving quality mean the government’s balance sheet has plenty of room to take on more debt. It compared China’s situation with that of the U.S. and Japan, which both have higher government debt-to-GDP ratios.