Jumping straight in this week.

— PC

Read more

Xi Jinping had a busy week in Beijing meeting a series of world leaders.

The list included Spanish Prime Minister Pedro Sánchez, Crown Prince of Abu Dhabi Sheikh Khaled bin Mohammed, Vietnam’s leader To Lam, and Russian Foreign Minister Sergei Lavrov.

As tensions in the Strait of Hormuz—disrupted by the U.S. war on Iran—continue to unsettle global markets, Xi told Sánchez on Tuesday that “the international order is crumbling into disarray,” as Beijing seeks to project an image of stability and position China as a reliable partner.

Let’s jump into it.

— PC

Through the Lens

In Focus

I. “The Iran war is not about China”

In Washington, great power competition has become the dominant frame for US foreign policy analysis, and there is a tendency to use it to interpret every major geopolitical event. So it is understandable that some have tried to frame the war in Iran as having a China angle. In this case, however, that framing is misleading. This war is not about China, and attempts to make it so obscure more than they clarify.

China is not a decisive actor in this conflict. It did not shape the conditions that led to escalation, it is not a military participant, and it lacks either the leverage or the willingness to impose outcomes on the primary belligerents. The drivers of this war lie in US decision-making, Israeli strategic calculations, and Iranian responses. Efforts to retrofit China into this equation say more about lazy thinking in Washington than about realities on the ground.

Read: The Iran war is not about China ( for the Atlantic Council)

Related:

• Xi puts forward four-point proposal on promoting Middle East peace, stability (Xinhua)

• Iran used Chinese spy satellite to target U.S. bases (The Japan Times)

• China calls reports it supplied weapons to Iran ‘baseless smears’ (HKFP)

• Medical scans and chips: the hidden fallout of the Iran war for China (CNN)

• Analysis: China has so far weathered the historic oil crisis. But as Xi prepares to meet Trump, costs are starting to grow (CNN)

• Why China Isn’t Pushing Iran to Accept U.S. Demands to End War (The New York Times)

• What has Beijing learnt from the near-closure of the Strait of Hormuz? ()

II. China’s (export) controls

As China’s mammoth trade surplus stokes global tensions, Beijing has enacted sweeping new regulations to investigate and punish foreign companies that stop using Chinese suppliers in response to political pressure at home.

Foreign business groups expressed strong concern about the vaguely worded rules, which took effect when Premier Li Qiang signed them on April 7. Analysts warned that the regulations could make it harder for foreign companies to divest from joint ventures in China or shift orders to overseas suppliers.

The new regulations are part of Beijing’s broader effort to counter what it sees as rising protectionism in the West, driven by a surge in Chinese exports and growing concerns about trade imbalances. China’s exports exceeded imports by almost $1.2 trillion last year, and the country notched another large surplus in the first quarter.

[…]

The 18-point regulations, described in state media as an effort to “prevent security risks in industrial and supply chains,” supplement the already formidable authority afforded to Chinese regulators to investigate multinational corporations for moving supply chains out of China.

Under the new rules, regulators can question employees and examine corporate records during investigations. The regulations also allow authorities to bar companies and individuals from leaving China if they are suspected of moving supply chains elsewhere under foreign pressure.

Read: New Rules Hinder Foreign Firms From Moving Supply Chains From China (The New York Times)

Related:

• China shock 2.0: the flood of high-tech goods that will change the world (Financial Times)

• EU firms rethinking China operations over rare earths curbs: Lobby (CNA)

• Report: Exporting Control: China’s New Strategic Toolkit (European Union Chamber of Commerce in China)

• China’s New Supply Chain Rules Up the Ante for Foreign Firms ( for WPR)

• Expanding Tools Control Foreign-Related Economic Activity (Jamestown)

III. Slow down, you’re aging too fast

So what would it actually take to restore something like demographic hope? The material substrate has to come first: housing affordability, labor market security, genuine workplace flexibility, a more equitable distribution of domestic labor between men and women. What does not work, and the evidence here is pretty clear, is top-down campaigns asking young people to embrace motherhood as a patriotic duty. Young people are not naive. They can see the gap between what the state is asking of them and what the state is actually delivering in return. That gap is what fuels the disillusionment, and slogans do not close it.

Read: Aging Before Affluence w/ Emma Zang ( and )

Related:

• China’s First DINK Generation Is Growing Old (Sixth Tone)

• Pushed Out as Demand Falls, China’s Obstetricians Start Over (Sixth Tone)

Read more

Unification is a “historical inevitability,” Chinese leader Xi Jinping told Cheng Li-wun, the controversial chair of Taiwan’s Kuomintang (KMT) party, on Friday in Beijing.

The meeting was described by various media as the first of its kind in a decade, but Brian Hioe of New Bloom noted that “of the last six KMT chairs who were not temporary acting chairs, four had traveled to China and met with Xi Jinping.”

Cheng, who also traveled to Shanghai and Nanjing, opposes Taiwan independence and advocates closer ties with China.

Speculation about an imminent invasion of Taiwan remains constant, and while Xi’s tone is threatening—“Taiwan independence is the chief culprit in ​undermining peace in the Taiwan Strait - we will absolutely not tolerate or condone it.”—Beijing is patient.

As Taipei-based journalist points out, “As the world speculates if and when Xi might choose to invade Taiwan, it overlooks the fact that he effectively has a proxy inside the legislature doing his bidding.”

Let’s jump into it.

— PC

Through the Lens

In Focus

I. Xi meets KMT leader

“The world today is far from peaceful, making peace more precious,” China’s President Xi Jinping emphasized in opening remarks at a meeting with Cheng Li-wun, the chair of Taiwan’s Kuomintang (KMT) party.

“The leaders of the two parties are meeting today to safeguard the peace of our shared home,” Xi added, speaking as head of the Chinese Communist Party, “and to promote the peaceful development of cross-strait relations.”

Cheng echoed Xi’s remarks, saying the two parties should pursue institutional solutions to prevent war and “thereby make the Taiwan Strait a model for world peace and conflict resolution.”

Both Xi and Cheng reiterated their opposition to Taiwan independence, though neither explicitly mentioned unification.

Read: Xi sells ‘peace’ message to Taiwan opposition during visit (DW)

Related:

• NSB chief takes indirect swipe at KMT chief’s trip to China (Focus Taiwan)

• Xi meets KMT leader Cheng Li-wun in Beijing ()

• Taiwan’s Budget Crisis Gives China an Opening (Foreign Policy)

• Positioning the KMT in the U.S.–China–Taiwan Triangle: Cheng Li-wun’s Early Tenure (Asia Society)

II. China and the Iran war

China did not play a decisive role in bringing about a two-week ceasefire in the Iran conflict, according to a social media account affiliated with China Central Television.

There has been an attempt to steer the narrative toward the idea that Iran “only listens to China,” shifting responsibility for ceasefire talks on to Beijing, according to a Saturday post on Yuyuantantian, a social-media account affiliated with CCTV.

China has balanced its approach to take into account the concerns of the different sides rather than focus on any specific party, according to the post. Beijing exercised its veto power on a United Nations Security Council resolution that would have encouraged countries to coordinate defensive efforts on reopening the Strait of Hormuz, it said.

China has remained “impartial” throughout the conflict, the post said, adding that lasting peace cannot be defined by “who listens to whom” or sustained through bloc politics, but requires mutual respect and trust to ease tensions and prevent further conflict.

Read: China’s Role in Iran Ceasefire Is Overstated, CCTV Account Says (Bloomberg)

Related:

• US intelligence indicates China is preparing weapons shipment to Iran amid fragile ceasefire, sources say Politics (CNN)

• Behind China’s ‘active efforts’ for an Iran ceasefire: Business trumps politics (CNBC)

• Trump Administration Talked to China During Cease-Fire Negotiations, White House Says (WSJ)

• Iran crisis puts China’s UN diplomacy to the test (Lowy Institute)

• The Real Victor: The Arab Media Debate on China and the Iran War ()

III. Is China worried about AI?

Over the past two years, worries about AI displacing workers and leading to structural unemployment have shot up in China. Those fears extend from ordinary people to the wider AI policy community to (as best as we can tell) high-level CCP officials. The fears are reflected in policy documents, state media, and the way Chinese people relate to the technology itself. And on top of these existing layers of concern is a new one: the CCP is also increasingly worried about Chinese people worrying about losing their jobs to AI.

Read: China is getting worried about AI & jobs ()

Related:

• Why AI isn’t replacing jobs in China (yet) ( for CNBC)

• Ten Lives in China’s Age of AI (Sixth Tone)

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Politics & Society

Xi: senior officers must ‘stay pure’ to meet Chinese military’s centenary goal (SCMP)

Following the sweeping anti-corruption drive within the Chinese military, President Xi Jinping on Wednesday urged its senior officers to deepen ideological rectification and political refining for a “brand new look” to celebrate the People’s Liberation Army (PLA) centenary next year.

Xi told the officers to maintain resolute political loyalty to the party and said that any thought or action driven by self-interest or corruption was “fundamentally against the Communist Party’s nature and purpose”, state media reported.

“Senior military officers must take the lead in restoring and promoting the fine traditions of our party and military … It is essential to understand discipline, be clear about rules and norms, and maintain a sense of reverence,” he said.

[…]

Xi added that the PLA must “always stay pure” to meet its centenary goal, set for August 2027. Beijing has kept the details of its expectations vague. However, in his 2022 work report to the 20th party congress, Xi linked the goal to the PLA’s ability to “win local war”.

Beijing’s Foreign Influence Tactics, Hidden in Plain Sight ( for The Diplomat)

The OpenAI report documents several tactics used to target specific individuals. In one case, operators created a fake obituary — including AI-generated photos of a gravestone — for a living dissident and mass-posted them online. When seeking to get dissident accounts removed from social media platforms, operators filed abusive reports accompanied by AI-generated fake screenshots as fabricated “evidence” of policy violations, intended to trigger automated enforcement systems. In separate incidents, operators also forged documents purporting to be from a U.S. county court and submitted them to a social media platform in an attempt to force a takedown; an effort that reportedly failed but was deemed to show potential. In another example, Chinese agents reportedly disguised themselves as U.S. immigration officials and tried to intimidate a U.S.-based dissident by warning that their public statements had broken the law.

Xi Jinping on Your Local News Website ()

Every one of these pages lives on a local news domain. The domain, with its local brand and staff has been accumulated trust and authority in local communities and search engine rankings. I assume, when a Xinhua article about “China’s governance success“ appears on norfolkdaily, it inherits the trustworthiness that Norfolk daily has built over a century of local journalism? Yet, now the Chinese state media is purchasing these credibilities.

Challenging China’s two faces ( for )

With Washington’s decision to attack Iran, it has become easier for the People’s Republic of China (PRC) to present itself as a force for peace and stability on the world stage. Wang Yi, Minister of Foreign Affairs of the PRC, has positioned his country as an opponent of chaos and a champion of de-escalation. ‘Might’, he has said, ‘does not make right’.

Such talk is not just opportunism. Rather, these messages are part of a longstanding attempt to present the PRC as a moral actor and the architect of an alternative model to the United States (US)-led liberal international order.

Efforts to woo Europeans with promises of peace and economic stability began almost immediately after Donald Trump, President of the US, returned to the White House. Meanwhile, talk of sovereignty and multilateralism has long been used by Beijing to win over countries in Africa and Asia. Such concepts also underpin the Global Security Initiative of Xi Jinping, General Secretary of the Chinese Communist Party (CCP), while also promising an order that: ‘peacefully resolv[es] differences and disputes between countries through dialogue and consultation’.

Yet, this is just one face of Chinese foreign policy. The other is more threatening. Indeed, it has been argued that the PRC has multiple, competing personalities.

This other face includes Beijing’s support for its partners’ expansionist and destabilising activities. The fuelling of Russia’s full-scale invasion of Ukraine is well known, while the PRC’s decision to provide satellite and missile technology to the Iranian regime is beginning to receive greater attention.

At the same time, Beijing goes about coercing and harassing its neighbours, especially Japan and the Philippines, to name its nearest. Yet, as concerning as this regional bullying is, the ultimate litmus test for the PRC’s peaceful global narrative lies just across the Taiwan Strait. Far from pursuing dialogue and consultation, Beijing continues to threaten and practise for its own war of conquest against Taiwan.

China reforms its secret RSDL jails, but will anything change? (Safeguard Defenders)

While there are reasons to believe the new regulation may cut down the use of RSDL, there are also many indicators that it won’t. When in 2016 the SPP issues a tighter set of rules how the Procuratorate (not police) may use RSDL, it did indeed reduce its use. In short, regulations can indeed have an impact.

On the other hand, the former regulation on how RSDL is to be used has seemingly had no impact. For example, SD is unaware of a single case where victims have been visited by Procuratorates as part of the overview and supervision process, which was a key part of the then new regulation. In general, laws should be treated at best as a ‘guideline’, which makes assessing future impact more difficult.

The key point to remember is that in China the police are very powerful and can usually act with impunity, so even with these new regulations, it is unlikely that they will significantly change their behaviour. In the case of this new regulation, it does not come with few actual penalties for the entities that violate them, undermining the likelihood of change.

China executes Frenchman convicted in 2010 for drug trafficking (HKFP)

A Frenchman sentenced to death in China in 2010 for drug trafficking has been executed, France’s foreign ministry announced on Saturday, expressing its “consternation.”

Chan Thao Phoumy, a 62-year-old Frenchman born in Laos, was executed, “despite the efforts of the French authorities, including efforts to obtain a pardon on humanitarian grounds for our compatriot”, said a ministry statement.

The Internet Café Never Really Died in China. Now It’s Booming. (Sixth Tone)

In an economy where people are increasingly watching their wallets, internet cafés have become popular again in China — offering a chance to catch up with old friends and rekindle the feeling of student days, without the upfront cost of buying their own equipment.

Inside Shenzhen’s High-Tech Version of the Food Bank (Sixth Tone)

In China, food banks are a relatively new concept. And Shenzhen, China’s “Silicon Valley,” is approaching such redistribution from an alternative angle. Lacking a network of centuries-old church-affiliated charities and widespread grassroots NGOs, this tech hub has moved food banks to the cloud. Initiated by the local government and supported by enterprises, it operates as a centralized platform that uses data and smart cabinets to connect market surplus with community needs, transforming ad-hoc charity into a precise, scalable, and dignified public utility for its 20 million residents.

Across the city’s Futian District, 22 such machines have been installed, mostly at community service centers or on street corners near subway exits to ensure easy access. Over the past three years, the program has received close to half a million donated items from dozens of corporate partners. Suppliers include tech-driven, Alibaba-founded grocer Hema Fresh and more traditional names like the Great China Sheraton Hotel.

Volunteers screen the — often near-expiration — donations to ensure food safety, after which dedicated staff use cold-chain transport to deliver the goods across the district throughout the day. The cabinets themselves are also cooled.

During the day, access is restricted to residents that the local subdistrict governments have identified as vulnerable, including low-income households, people with disabilities, and sanitation workers. After 8 p.m., the platform opens reservations to Shenzhen’s entire population, a clever mechanism to ensure nothing goes to waste. Residents can reserve items online to avoid making a fruitless trip.

China’s Holiday Travel Gets a Visa-Free Boost (Caixin)

China recorded nearly 6.8 million cross-border trips during the Qingming Festival holiday, driven by a surge in visa-free visitors and shifting outbound travel preferences that crowned South Korea as the top destination.

The daily average of cross-border trips reached 2.26 million during the holiday period from Saturday to Monday, a 9.1% increase from the same period last year, according to the National Immigration Administration. Foreigners made 843,000 inbound and outbound trips, jumping 20.9% year-on-year, with visa-free entries surging 30.7% to 319,000. Outbound travel dynamics also shifted, as Southeast Asia retained its dominance while traditional favorite Japan fell out of the top three destinations.

The evolving travel patterns underscore how Beijing’s push to expand visa-free entry is reviving its inbound tourism sector, even as regional geopolitical tensions and safety concerns reshape the outbound itineraries of Chinese tourists.

How Lu Xun, a Famous Chinese Writer, Became a Cute Communist Mascot (The New York Times)

China’s best-known modern writer, Lu Xun, made his name a century ago as a coruscating critic of traditional Confucian culture, foreign bullying and the grandiose pieties of Chinese despots old and new.

Today, in his hometown, Shaoxing, a prosperous city in eastern China laced with canals, the writer has transformed from a fiery anti-establishment rebel into a cuddly Communist Party mascot. His prickly character and sharp views have been smoothed as flat as the refrigerator magnets sold across town as souvenir tributes to him.

[…]

Mao’s preferred version of Lu Xun as an iconoclastic enemy of stale orthodoxies, however, has been cast aside in recent years to make way for a tamer, cheerier version — one that’s more in tune with the drive by China’s current leader, Xi Jinping, to promote national pride by celebrating the “glorious achievements” of the country’s past. As such, the author has become something of a case study in the Communist Party’s efforts to repackage China’s complex history to serve its official narrative.

Hong Kong & Macao

HK independent media outlet says reporters ‘harassed’ and ‘stalked’ (HKFP)

A Hong Kong independent media outlet has said its journalists have been targeted by harassing text messages and “stalked” by unknown individuals, the latest in a series of intimidations against the city’s press since 2024.

InMedia said in a blog post on Friday that its reporters had received harassing text messages “in recent months” and were suspected of being followed after work by unidentified individuals “in recent days.”

Veteran Hong Kong democracy activist Koo Sze-yiu dies aged 80 (HKFP)

Veteran Hong Kong activist Koo Sze-yiu has died at the age of 80, local media have reported.

“Bull” Tsang Kin-shing, formerly a fellow member of the now-disbanded pro-democracy League of Social Democrats, told local paper Ming Pao that Koo died of an illness on Wednesday afternoon.

[…]

Koo, born in 1946, was a Maoist in his youth and worked as a shipbuilder in Macau. With other anti-colonialists, he took part in the 12-3 Incident – a series of demonstrations against Portuguese colonial rule – and stormed what is now the Macau Government Headquarters.

In 1989, he protested against the Tiananmen crackdown in Beijing, after which he committed himself to Hong Kong’s democracy movement.

Taiwan

Taiwan sees only warships and warplanes as China talks peace with opposition KMT (The Straits Times)

Taiwanese officials are tracking what they view as a worrying rise in Chinese naval activity and military pressure against the island, even as Beijing presses a message of peace and cooperation in meetings with Taiwan’s opposition leader.

China’s tactics are all the more unnerving for the Taipei government given the opposition continues to stymie a defence spending rise that Washington has pushed for. The build-up also comes at a time with the US focused on the conflict in the Middle East and US President Donald Trump readying for a May meeting with China’s Xi Jinping.

“China is continuously and persistently expanding its military capabilities, and the military threat it poses to us is becoming increasingly severe,” Taiwan Defence Minister Wellington Koo told lawmakers on April 9 amid anger among the ruling party over the decision by members of the opposition Kuomintang (KMT) to skip talks on stalled defence-spending.

China targets Taiwan’s chip prowess to evade global ‘containment’, Taipei government says (Reuters)

In a report to ⁠lawmakers, Taiwan’s National Security Bureau said that China is attempting to “lure” Taiwan’s high-tech industries, including AI and ​semiconductors, to establish or retain operations in China.

“It also continues to use indirect channels to poach Taiwanese talent, ​steal technology, and procure controlled goods, with the aim of obtaining key core technologies and products such as Taiwan’s advanced-process chips, thereby breaking through international technological containment.”

China’s Taiwan Affairs Office did not immediately respond to a request for comment. China says ​Taiwan is one of its provinces and will eventually come under Beijing’s control.

Taiwan is home to TSMC, ​the world’s largest contract chipmaker and major supplier to companies including Nvidia and Apple.

How China uses commercial ships to pressure Taiwan without firing a shot (ABC News)

“If you can put hundreds or even thousands of hulls in the water in a coordinated way, you can create friction, congestion and confusion without ever declaring a blockade,” Mr Shugart said.

He said it reflected a broader strategy in which Beijing leveraged “shadow” fleets to apply pressure on Taiwan.

When many people think about a potential conflict over Taiwan, missiles, fighter jets and warships come to mind.

But a growing body of research suggests Beijing’s preparations are looking far more ordinary: fishing boats, car ferries and commercial barges.

Danish envoys’ privileges revoked over naming controversy (Taipei Times)

Taiwan has revoked some privileges for Danish diplomatic staff over a Danish permit that lists “Taiwan” as “China,” Eric Huang (黃鈞耀), head of the Ministry of Foreign Affairs’ Department of European Affairs, told a news conference in Taipei yesterday.

Reporters asked Huang whether the Danish government had responded to the ministry’s request that it correct the nationality on Danish residence permits of Taiwanese, which has been listed as “China” since 2024.

Taiwan’s representative office in Denmark continues to communicate with the Danish government, and the ministry has revoked some privileges previously granted to Danish representatives in Taiwan and would continue to review further measures, Huang said.

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World

Asia & Pacific

Antelope Reef: China’s new military outpost in the South China Sea (The Telegraph)

Snaking around each other in the middle of the South China Sea, 22 Chinese sand dredgers have been hard at work.

Since December, these dredgers have been a constant presence in the waters around an area known as Antelope Reef, expanding it from a sandbar with a few buildings into a full-scale development that is growing by the day. Experts say that if construction continues at its current pace, the island could become China’s largest in the South China Sea.

The reef, a tiny feature in the Paracel Island archipelago approximately 170 miles from southern China, is one of dozens of contested sites claimed by Beijing in the South China Sea. Vietnam and Taiwan also claim it.

Philippines unveils new coast guard base in South China Sea (AP)

The Philippines unveiled a major coast guard base Thursday on an island in the South China Sea to serve as a “steadfast sentinel of our sovereignty” in a disputed region closely guarded by China’s forces.

Chinese officials did not immediately react to the Philippines’ opening of its coast guard district command on Thitu Island, which has been occupied by Filipino forces and civilians for decades but is also claimed by Beijing.

Chinese coast guard and other government-linked ships frequently patrol outlying waters off the island, which is also claimed by Vietnam and Taiwan. Chinese and Filipino forces have had tense but mostly minor confrontations in outlying waters in the past.

In new incidents on Thursday afternoon, the Philippine coast guard accused Chinese forces of firing flares toward its patrol aircraft in what it said was “a clear and deliberate act of bullying” that endangered Filipino personnel over the disputed Subi Reef and Mischief Reef, which are occupied by China.

China preferred over US in S-E Asia: ISEAS survey (The Straits Times)

Concerns about US President Donald Trump’s foreign policies have surpassed aggression in the South China Sea as ASEAN’s biggest geopolitical fear, the results of a key survey have shown.

Respondents in the annual survey, conducted by the ASEAN Studies Centre at ISEAS – Yusof Ishak Institute, picked China instead of the United States as the region’s preferred superpower, if they had to choose between the two.

The State of South-east Asia 2026 report launched on April 7 also explicitly named Mr Trump as a source of geopolitical concerns for ASEAN.

Vietnam confirms top leader’s China visit in mid-April (HKFP)

Vietnam confirmed on Thursday that top leader To Lam will visit China next week at the invitation of counterpart Xi Jinping, his first foreign trip since becoming president.

The Communist Party boss was elected president — the number two position in Vietnamese politics — by the National Assembly on Tuesday, unifying leadership of the party and state as Xi did in China.

Lam and his spouse “will lead a high-level delegation on a State visit to China from April 14-17, 2026,” Vietnam’s foreign ministry said in a statement.

North Korean leader Kim backs China’s push for ‘multipolar world’ in talks with foreign minister (AP)

North Korean leader Kim Jong Un voiced support for China’s push to build a “multipolar world” and called for deeper ties between the traditional allies during a meeting with Chinese Foreign Minister Wang Yi, state media said Saturday.

During the meeting Friday, Kim said his government will fully support Chinese efforts to achieve territorial integrity based on its “one-China principle,” a reference to Beijing’s official position that Taiwan is an inalienable part of China’s territory, according to North Korea’s official Korean Central News Agency.

Kim also outlined North Korea’s position on unspecified regional and international issues of “mutual concern” and said sustained development of ties between the two countries has become more crucial in the current geopolitical environment, KCNA said.

Wang, on a two-day trip to North Korea, said the countries’ relations were entering a “new phase” following a summit last year between Kim and Chinese President Xi Jinping.

Nepal International Film Festival faces backlash over Chinese propaganda segment “Xizang Panorama” (Phayul)

The Nepal International Film Festival (NIFF), held from April 3 to 5 in Kathmandu, has come under intense scrutiny for featuring a controversial segment titled “Xizang Panorama.” The festival, organised in collaboration with the Pan-Himalayan Cultural Research Center, is widely recognised for promoting global storytelling and fostering cross-cultural exchange. However, this year’s programming sparked strong backlash from Tibetan activists.

The controversy centers on the use of the term “Xizang,” widely regarded as a colonial term imposed by the Chinese government for Tibet.

‘Neighbours matter more than ever’: China, Australia vow more contact amid global tension (SCMP)

China and Australia should intensify exchanges on energy security amid complex global geopolitics, Canberra said on Tuesday as spillover from the US-Israel war against Iran continued to endanger the world economy.

In a phone conversation on Tuesday, Australian Prime Minister Anthony Albanese and Chinese Premier Li Qiang discussed the importance of energy security “in light of the current global challenges” and agreed to increase government-to-government communication to support regional energy security.

In a social media post, Albanese said: “Now more than ever, our relationships with our neighbours matter. We will continue to engage in dialogue to maintain our stable and constructive relationship.”

Americas

Trump Quietly Scraps His Own Playbook on China (WSJ)

When Pentagon officials last fall briefed President Trump on a draft of a bureaucratic defense strategy document, it framed China the same way it had for a decade: as the top security threat facing the U.S.

Trump balked and ordered his Pentagon deputy to rewrite it, according to three officials familiar with the exchange. When the administration’s revised National Defense Strategy published in January, it offered instead a conciliatory tone toward Beijing.

“President Trump seeks a stable peace, fair trade, and respectful relations with China,” an unclassified version of the document declares.

While every administration crafts its own defense strategy, Trump’s second is making the unusual move of discarding a policy that was formulated by his first. That bipartisan approach sanctioned by Trump 1.0 characterized China as the most consequential U.S. adversary.

The Trump 2.0 framework is instead a seismic shift in U.S. policy, trade practices and rhetoric toward Beijing driven by a new mantra: Don’t rock the boat.

[…]

The conflicted approach has also led to some confusion. In February, the Pentagon added Chinese technology heavyweights including Alibaba to a blacklist of Chinese military contractors, and immediately retracted it. It hasn’t yet been rereleased. A Defense Department spokesman said the department took the list down because it may require updates, and would publish a new list after making changes.

In a speech this year in Detroit, Trump called China “great” and said he welcomed its factories in the U.S. as a means to create jobs while circumventing his tariffs on foreign autos.

“Let China come in,” the president said.

Why America Inc. should be wary of Trump’s latest trade push (Semafor)

A Board of Trade would give Washington a tool to exert even more leverage over corporate America. Chad Bown, a trade expert at the Peterson Institute for International Economics, raises the question of how businesses would get onto the White House’s preferred list. Indeed, it’s not difficult to envisage a lobbying scramble that would favor large, politically connected companies, raising broader concerns about the longer-term impact of managed trade on US economic dynamism: Jami Miscik, Peter Orszag, and Theodore Bunzel of Lazard warn that what they call “discretionary state capitalism” will lead to “favoritism, inefficiency, higher costs, and lower growth.”

Chinese business hired lobbying firm with ties to Don Jr, then scored a win in Washington (Reuters)

A lobbying firm led by one of Donald Trump Jr.’s hunting buddies helped a Chinese company make its case to a U.S. national security watchdog, public filings show.

The case involved a U.S. startup that was seeking to have the Chinese firm removed as one of its investors. The watchdog rejected the U.S. firm’s request for a national security review of the Chinese firm’s investment, according to a document seen by Reuters, handing a rare win to a Chinese company in ​Washington. The decision has not previously been reported.

The lobbying firm, Checkmate, helped a lawyer for China’s Grand Pharmaceutical Group clinch a meeting with the head of the Committee on Foreign Investment in the U.S. (CFIUS) in early January, according to two people familiar with the matter. During the meeting, ‌the lawyer argued that the case was a commercial disagreement with no national security implications, one of the people said.

At the end of January, the watchdog rejected the filing by Minnesota-based startup FastWave for reasons unrelated to national security, effectively siding with the Chinese firm, according to a document seen by Reuters.

FCC to vote on proposal to ban Chinese labs from testing US electronics (Reuters)

The Federal Communications Commission said on Wednesday it will vote this month on ​a proposal to bar all Chinese labs from testing electronic devices such ‌as smartphones, cameras and computers for use in the U.S., widening a previous action targeting Beijing.

The FCC last year banned testing of U.S. electronics by labs owned or controlled by the Chinese government, ​which led to 23 labs being barred. But the substantial majority of ​China-based test labs are still testing U.S. electronics, the agency said.

The FCC ⁠says about 75% of all electronics are tested in labs in China. The ​FCC will vote on the proposal on April 30, before considering public comments and finalizing ​the prohibition.

US considers new crackdown on Chinese telecom companies (Reuters)

The U.S. Federal Communications Commission said it may bar three major Chinese telecom companies from ‌operating their data centers in the U.S. and could ban telecom carriers from connecting with those Chinese carriers.

The FCC said it has tentatively concluded it should prohibit American and other telecommunications carriers operating in the U.S. from interconnecting with companies on the so-called “Covered List” that it says pose ​national security concerns, including China Mobile, China Telecom and China Unicom.

The FCC said it was also ​considering prohibiting Chinese telecoms that own data centers or so-called Points of Presence that ⁠sit at internet exchange points from interconnecting with other companies. The agency also said it was considering extending ​the ban on providing U.S. telecom services to some affiliates of companies on the national security list.

Beijing’s Long Game Is Engulfing Canada—and Mark Carney Is in the Frame ()

Canada identifies China as a strategic challenge. Yet strategic minerals remain under foreign state control. Public funds support foreign state-linked enterprises. Domestic industries are bypassed in key procurements. National security considerations appear disconnected from economic policy.

In my experience, organized systems — whether criminal or state-based — do not need to overpower institutions. They exploit gaps. Inconsistencies. Misalignments between stated priorities and actual decisions.

Right now, Canada is presenting those gaps.

BYD added to Brazil’s labor ‘dirty list’ after construction site scandal (Nikkei Asia)

Brazil’s labor ministry has added Chinese automaker BYD to a “dirty list” of companies that have “subjected workers to conditions analogous to slavery,” as a scandal over a factory project haunts the brand in the crucial South American market.

The list, updated Monday in Brazil, names the electric vehicle leader’s local arm, BYD Auto do Brasil. It says that 163 workers were involved, the same number who were “rescued” by labor enforcement officials from a factory construction site in the northeastern state of Bahia in December 2024.

[…]

Inclusion on the list could impact BYD’s reputation in a key target market of over 200 million people, where it has gained traction. In December, BYD said it sold more than 100,000 vehicles in Brazil in 2025, up from more than 76,000 the previous year.

Hong Kong firm files arbitration against Maersk over Panama Canal port operation (AP)

A subsidiary of a Hong Kong-based conglomerate started arbitration proceedings against Danish logistics and port group Maersk, accusing the company of aligning with Panama in a scheme to take over its port operations on the Central American country’s critical canal.

The Panama Ports Company, a unit of Hong Kong’s CK Hutchison Holdings, said in a statement dated Tuesday that Maersk A/S had undermined a contract over the Hong Kong company’s operations of ports at either end of the Panama Canal in order to pave the way for a new operator affiliated with Maersk to take over the Balboa terminal.

The company said the arbitration will be held in London, but didn’t explain what remedy it was seeking.

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Europe

China sidelined: EU shelves rare strategy debate as Middle East crisis takes priority (SCMP)

A long-awaited EU debate on China has been shelved in favour of the Middle East crisis, highlighting how Europe is struggling to treat Beijing as a strategic priority despite mounting economic pressure.

The European Commission’s security college was set to meet this coming Monday to debate the challenges posed by Beijing, as part of what officials were referring to internally as “China week”.

It would have been the first strategic discussion among the bloc’s 27 commissioners under President Ursula von der Leyen’s second term, which began in 2024, and the first-ever China debate under the nascent “security college” format.

The college debate was to be combined with a call between the commission’s top trade official, Sabine Weyand, and Ling Ji, the Chinese commerce vice-minister who deals with Europe, on Monday, as well as a debate on China between trade diplomats next Thursday. Those meetings were expected to go ahead, sources said.

The cumulative purpose was to thrash out a strategic “all-of-government” response to what officials see as a generational, multifaceted challenge posed by China.

But the topic of the debate has been changed to Iran, the commission confirmed, as Europe looks to contain an energy shock emanating from the crisis in the Gulf.

Spanish prime minister to make fourth trip to China in as many years (Reuters)

Spanish Prime Minister Pedro Sanchez will make ​his fourth trip to China in ‌as many years this month, as had been widely expected, as Madrid seeks to build on ​its commercial ties with the world’s ​second-largest economy.

Sanchez will visit China from April 11 ⁠to 15, and will hold talks with President ​Xi Jinping, Premier Li Qiang and China’s ​top legislator Zhao Leji, a spokesperson at the Chinese foreign ministry confirmed on Wednesday.

The Spanish prime minister last visited China in April ​2025, and before that, in September 2024 ​and March 2023.

Sánchez to Push China to Hand Over Tech Secrets on Beijing Trip (Bloomberg)

Prime Minister Pedro Sánchez is aiming to persuade Chinese companies to share more tech know-how with their Spanish partners on a trip to Beijing next week, according to people familiar with the preparations.

Spain and China plan to sign an investment agreement during the three-day visit that begins Saturday, the people said, asking not to be identified discussing private negotiations. The deal, known as a High Quality Investment Agreement, aims to ensure that Chinese investments in Spain involve technology transfers to domestic companies, contracts for local suppliers and create jobs in the regions where they operate.

The deal seeks to address persistent warnings about the risks of allowing Chinese companies to operate in Europe. In many cases, Chinese firms have brought in Chinese workers to build and operate factories and restricted access to proprietary technology, limiting the benefits to the local economy.

China’s best friend in Europe ()

[…] China’s exports to Hungary have doubled over the past decade, while Hungary’s exports to China have stagnated. Bringing clarity to this dynamic is important at a time when other EU countries, notably Spain, are following the Orbán model and welcoming Chinese investment with open arms, and without the necessary checks and balances. A day after Hungary holds its election, Spanish Prime Minister Pedro Sanchez will depart for his fourth visit to China in a little over three years. One “all-weather comprehensive strategic partnership for the new era” is more than enough for Europe.

More Europeans see US as threat than China (Politico)

Only 12 percent of those polled in March in Poland, Spain, Belgium, France, Germany and Italy saw America as a close ally while 36 percent saw it as a threat. By contrast, China was seen as a threat by 29 percent of those polled across the six countries.

At the national level, the threat from Washington outranked Beijing in four countries, with only respondents in France and Poland perceiving the threat from China to be higher.

China and Europe launch rare joint space mission (Financial Times)

Europe and China are launching a joint space mission to study how Earth’s magnetic field shields the planet from harmful solar radiation, a rare example of collaboration as space competition intensifies.

The ambitious project aims to understand how solar turbulence generates “space weather” and to predict geomagnetic storms that can disrupt terrestrial communications, knock out power grids and damage electronic equipment.

A Vega-C rocket is set to launch the 2.3 tonne satellite, called Smile, on Thursday. It will blast off from the European spaceport in French Guiana into a highly elliptical orbit that will take it as far as 121,000km above the North Pole.

Besides its scientific purpose, Smile stands out as an example of public bodies in China and the west working together on a big technology project.

Chinese airlines add thousands of Europe flights, shrugging off Iran war (Nikkei Asia)

Chinese airlines are adding thousands more flights to Europe over the next six months, as the Iran war deals them another advantage in the region where other carriers are facing longer routes and higher jet fuel prices.

After the U.S. and Israel launched airstrikes on Iran on Feb. 28 that led to retaliatory attacks within the Middle East, airlines plying Europe-Asia routes are finding narrower passages through which they can fly, as Russian and Ukrainian airspaces are also effectively closed.

This means longer flights and higher fuel usage against a backdrop of surging oil prices. For Chinese airlines that are still able to fly over Russia, though, this means more business.

Middle East & North Africa (MENA)

Chinese AI satellite intelligence helping Iran target US forces with ‘incredible precision’, analysts say (ABC News)

Chinese satellite images enhanced by artificial intelligence could help Iran target US and allied forces to within a third of a square metre, military analysts say.

The ABC has revealed the US Defense Intelligence Agency (DIA) has assessed that an AI tool used by a Chinese company MizarVision poses a threat to US forces.

The technology identifies and tags military bases and other operations across vast areas.

PRC Supply Chain Ecosystem Behind Iran’s Drone Campaign ()

In March 2026, Iran’s drone campaign consumed thousands of expendable unmanned aerial vehicles (UAVs). The critical technologies, manufacturing equipment, and components underpinning these platforms trace to the civilian manufacturing ecosystem of the People’s Republic of China (PRC), channeled through private capital acquisition, reverse engineering, and the systematic exploitation of dual-use trade ambiguities.

Global Institutions & Multilateral Relations

China offers diplomatic immunity in bid to host oceans treaty (Financial Times)

China offered more than $70mn in funding for ocean protection. It also promised at the meetings in New York to be “flexible” on the question of visas, and to offer immunity to diplomats and campaigners who would attend the meetings to implement the treaty in the port city of Xiamen, those present said.

More than 80 countries that have ratified the treaty are expected to vote next January on the rival bids by Chile, Belgium and China to host the global forum for oceans governance discussions covering the UN — similar to the annual UN climate “conference of the parties” or COP.

The first oceans COP will aim to start establishing marine-protected zones and monitoring mechanisms, and will be supported by a scientific and technical body and secretariat.

The legally binding oceans agreement that came into force in January this year gives governments a forum to designate, fund and govern protected zones, and to resolve who profits from lucrative genetic resources found at sea.

Business, Economy & Finance

China’s Xi urges demand‑driven growth in services sector (Reuters)

China’s President Xi Jinping has called for a demand-driven approach coupled with reform and technological empowerment ​to develop the service sector, the official Xinhua news ‌agency reported on Wednesday.

China will expand and upgrade the services sector, cultivate more “China service” brands and push production-oriented services toward specialisation and higher positions ​in the value chain, Xinhua quoted Xi as saying in a ​directive to a two-day national service industry conference in ⁠Beijing that began on Tuesday.

China will “emphasise demand-driven development, push forward ​reform breakthroughs, harness science and technology to drive growth, and expand ​openness and cooperation,” Xi said.

China should expand the supply of upgraded services and improve its consumption structure in line with demographic shifts to meet increasingly ​diverse consumer demand, Premier Li Qiang said at the meeting, ​according to Xinhua. He added that China should accelerate the growth of ‌technology ⁠services by moving R&D and design toward greater specialisation and higher value‑added segments.

‘Fortress China’ shows cracks as Iran war strains supply chains (Financial Times)

China’s supply chains are beginning to show signs of acute strain as the US war in Iran tests the limits of President Xi Jinping’s years-long effort to prepare his nation for external shocks.

Analysts credited Xi’s administration in the immediate aftermath of the outbreak of the war as China, the world’s factory floor, appeared better prepared than many other major economies to weather a storm.

But six weeks into a conflict that has throttled global energy markets, sharp price increases and supply disruptions have emerged across key products that form the backbone of Chinese industry. In March China recorded its first year-on-year increase in factory gate prices since 2022.

Beijing is now hoping that the ceasefire announced this week by US President Donald Trump and Iran can hold beyond the initial two weeks, allowing oil and gas to flow through the Strait of Hormuz and global trade to resume.

Cameron Johnson, a senior partner at Shanghai supply chain consultancy Tidalwave Solutions, warned that the supply disruptions could be “worse” than during the Covid-19 pandemic.

He said that prices in China had doubled for some polyethylenes, disrupting the market for materials needed to make everything from plastic bags and bottles to clothing and toys. Prices for some carbon fibres, which rely on some feedstocks from the Middle East and are widely used across the auto and consumer goods industries, had risen 20 per cent, he added.

“It’s all the raw inputs — particularly anything that might be imported or where there’s already tight supply,” Johnson said. “It’s scarcity, it’s supply tightness, it’s a lack of visibility when things will be turned back on.”

China to Ban Sulfuric Acid Exports as War Hits Supply (Bloomberg)

China has indicated it will halt exports of sulfuric acid from May, hitting metals and fertilizer industries already strained by raw material bottlenecks resulting from the Iran war.

Some sulfuric acid producers in the country recently received notifications about the change, and one large buyer has been told about it by their Chinese supplier, according to people familiar with the matter, who asked not to be identified discussing confidential information. The ban will cover sulfuric acid that’s a by-product of copper and zinc smelting in China.

China enforces new security rules to defend supply chains from global threats (SCMP)

China has implemented a new regulation on supply chain security that hands officials the power to punish any entities deemed to threaten the country’s access to vital resources and the free flow of goods, as Beijing confronts an increasingly turbulent global outlook.

The 18-point regulation – which was passed and became effective on March 31, but the full text of which was only published on Tuesday – elevates safeguarding China’s industrial and supply chains to a national security issue.

The new rules lay out the responsibilities of national and local authorities to ensure “stable, continuous” production and flows of raw materials, technologies, equipment and products in key sectors through information sharing, risk monitoring and emergency management.

They also call for officials to create a list of sectors that are vital to China’s economic and national security, as well as strengthen strategic reserves of goods and capacity. They also stress the need for better systems to be put in place to allow the emergency deployment of reserves during a crisis.

Notably, articles 14 and 15 stipulate that the State Council, China’s cabinet, and its related departments can launch investigations into external actions – such as discriminatory bans or restrictions, including suspending normal business transactions – that endanger the country’s industrial and supply chains.

China Halves Fuel Price Hike for Second Time to Cushion Oil Shock (Caixin)

China moved for a second time to cushion consumers from the global oil shock triggered by the U.S.-Iran war, halving the size of a scheduled domestic fuel-price increase even as crude markets remained volatile.

The National Development and Reform Commission said on Tuesday that gasoline and diesel prices would rise from midnight by 420 yuan and 400 yuan a metric ton, respectively, well below the increases of 800 yuan and 770 yuan that would have been triggered under China’s normal pricing formula.

China Considers Financial Aid for Airlines Hit by Oil Shock (Bloomberg)

China is considering financial relief and other measures for its struggling state-run airlines as the Iran war sends fuel costs soaring, according to people familiar with the matter, in what could be the industry’s biggest lifeline since the Covid pandemic.

Government subsidies, preferential tax treatment and state-backed low-interest loans are options being explored by authorities, said the people, who asked not to be identified due to the sensitivity of the matter. Mergers are also being considered, they said.

China Started Preparing for an Energy Crisis Long Before the Iran War (The New York Times)

The energy shock caused by the war in the Middle East caught China, the world’s top buyer of oil, by surprise. But Beijing has been preparing for a crisis like this for years.

China has stockpiled increasingly large amounts of oil. It has pursued renewable sources of energy like solar, wind and hydropower so aggressively that its demand for refined oil, diesel and gasoline is falling. And it has harnessed technology to reduce its reliance on the foreign-sourced raw materials that go into the massive output of its factories.

China’s ruling Communist Party has long viewed its industries as the foundation of its national security strategy. It has sharpened — and expanded — that approach since President Trump’s first term. China has doubled down on policies to build up local industries, in turn strengthening its global dominance over resources and supply chains.

China’s Energy Security Doesn’t Run Through Hormuz but Through the Electrification of Everything ( for the Carnegie Endowment for International Peace)

Across Asia, China is better positioned to withstand energy shocks from the fallout of the Iran war. Its abundant coal capacity can ensure stability in the near term. Yet at the same time, the country’s energy transition away from coal will make it even less vulnerable during the next shock.

China strengthens oversight of state-owned assets overseas amid global tensions (SCMP)

China’s state assets watchdog has established a new department to oversee foreign investments, as firms continue to expand their global footprint amid an increasingly turbulent geopolitical outlook.

The new bureau, launched by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) on Wednesday, will guide state-owned enterprises in their international operations, according to its website.

It will also be responsible for helping firms optimise and restructure their overseas assets, as well as strengthening risk prevention for their investments and handling emergencies and crises abroad.

A growing number of Chinese firms have looked to overseas markets for new growth opportunities in recent years, as they continue to face sluggish demand and intensifying competition at home.

China is a net exporter of capital, with outbound direct investments rising 7.1 per cent to US$174.38 billion last year, data from the Ministry of Commerce showed.

China producer prices turns positive as inflation gets boost from Iran oil shock (CNBC)

China’s factory-gate prices rose for the first time in more than three years while consumer inflation moderated in March, amid a surge in oil prices as the Iran war upended global energy markets.

The producer price index grew 0.5% from a year earlier, the first growth since September 2022, ending the longest deflationary streak in decades. For the first quarter, the PPI fell 0.6% year on year.

Consumer prices climbed 1% in March from a year earlier, missing economists’ forecast of 1.2% growth in a Reuters poll and slowing from a 1.3% rise in February, according to data released by the National Bureau of Statistics on Friday.

China’s Factory Prices Return to Growth but Demand Lags (Caixin)

China’s factory-gate prices returned to growth in March for the first time in more than three years, driven by higher global commodity costs, but weak domestic demand may limit the broader impact.

The producer price index rose 0.5% year-on-year, ending a 41-month decline, official data showed Friday.

The rebound was led mainly by external factors. Higher oil and metals prices following the U.S.-Iran conflict pushed up input costs, particularly in energy-related sectors.

China sees Qingming holiday spend rise, but per trip outlay dips 0.19% (Reuters)

Total domestic travel spending reached 61.367 billion ​yuan ($8.95 billion) for the ‌three-day Qingming festival, up 6.6% compared with the same period ​last year, China’s culture ​and tourism ministry said on ⁠Tuesday.

The ministry said a ​total of 135 million ​domestic trips were made nationwide during the festival from April 4-6, ​marking a 6.8% increase ​year-on-year. Domestic tourism spending per trip, ‌however, ⁠dipped 0.19%, according to Reuters calculation.

The world’s second largest economy has been pushing for ​growth ​of ⁠domestic demand and consumption, making it a ​policy priority in its ​development ⁠roadmap amid mounting global trade pressures and economic headwinds.

Global banks scale back China rate-cut calls, see policy rate on hold this year (Reuters)

Major global investment banks now expect China to keep official interest rates steady this year, scaling back earlier rate-cut calls, as the impact from the Middle East conflict appears ​limited, even as Beijing maintains a loose policy stance.

The receding rate cut expectations ‌also come as China holds up better than its regional peers amid the Iran war, while the broader economy has shown early signs of a rebound.

“Against the backdrop of China’s relative resilience amid Hormuz disruptions, better-than-expected activity ​data in January-February, and the producer price index (PPI) likely turning positive in March, we see ​no clear catalyst for a policy rate cut in 2026,” Xinquan Chen, ⁠China economist at Goldman Sachs, said in a note.

Chinese Banks Seen Lending Less as Demand Weakens (Caixin)

Chinese banks likely lent less in March than a year earlier, as a weak property market weighed on credit demand, a Caixin survey showed.

The average forecast from 11 institutions puts new yuan loans at about 3.21 trillion yuan ($470 billion), down from 3.64 trillion yuan in March 2025. All respondents expected a year-on-year decline.

Weak housing demand continues to weigh on household borrowing, with the property sector still bottoming out and long-term household loans slow to recover.

China’s Housing Crisis Forces Banks to Confront Underwater Mortgages (Bloomberg)

Several state-owned banks have approached cash-strapped borrowers and offered them payment holidays on their mortgages for as long as two years, according to people familiar with the matter, who asked not to be identified discussing their firms’ policies. Some lenders are working with individual customers to find buyers for their homes, instead of calling defaults and foreclosing on the properties, the people said.

Local courts across the country have slowed the pace of accepting cases involving defaulted mortgages to limit the volume of forced property sales, according to the people. Some courts have even suspended or limited the number of litigation cases that banks can file for residential mortgage defaults.

The moves underscore how China’s local institutions are working to limit the damage of a yearslong property crisis that shows no signs of coming to an end. They also raise the question of whether official non-performing mortgage ratios — which have persistently stayed around 1% for big banks despite rising defaults — only hint at the true scale of the problem.

The Policy–Reality Gap in the PRC’s Property ‘New Model’ ()

Strict information controls around issues of building quality and delivery timelines prevent accurate assessment of local market conditions—including by the government. As a result, accurate policy prescription is difficult to achieve and prospective homebuyers are disincentivized from purchasing, thus prolonging the property downturn.

China’s Housing Rents Rise for Only Third Time in Two Years in March (Yicai)

Housing rents in key Chinese cities climbed last month, mostly driven by the country’s first-tier cities, making it only the third month after July 2024 and February 2025 to log an increase over the past two years.

The rent for residential properties in 50 key cities climbed 0.1 percent in March from the prior month, which was also the largest increase in 24 months, according to the latest data from the China Index Academy.

China Vanke Seeks to Delay Another Bond Payment to Avoid Default (Bloomberg)

Developer China Vanke Co. told some bondholders that it is seeking to extend a yuan bond due this month with an offer to repay 40% of the principal upfront, according to people familiar with the matter, as it again races to avoid default.

Vanke is considering offering the same terms as earlier proposals to extend three other bonds by a year, the people added, highlighting how a company at the epicenter of China’s property crisis is still facing liquidity challenges.

The company would need the support of holders of more than 90% of the notes for the plan to take effect, according to the prospectus. The bond, which has 2 billion yuan ($293 million) outstanding, is set to mature on April 23. Vanke’s proposal isn’t final and could change, the people said, asking not to be identified as the matter is private.

Beijing Tightens Rural Finance Rules to Curb Hidden Local Debt (Caixin)

China’s top financial regulator has barred banks from creating new hidden local-government debt under the guise of agricultural projects, as part of a revamped rural funding strategy.

The National Financial Regulatory Administration on Wednesday issued guidelines on financial support for comprehensive rural revitalization, marking a policy shift after the end of the country’s five-year transition period for poverty alleviation in 2025.

China Escalates Crackdown on Illicit Financial Brokers (Caixin)

Chinese authorities have launched a sweeping new crackdown on illicit financial practices, taking aim at predatory online lenders and loan brokers as part of a broader campaign to root out a sprawling underworld of consumer fraud.

The Ministry of Public Security and the National Financial Regulatory Administration held a joint video conference on April 2, deploying a new phase of targeted strikes against financial “black and gray” market crimes. The campaign aims to clean up illegal financial intermediaries, maintain market order, and protect consumers, in a bid to secure the high-quality development of the financial sector.

China’s Labor Market Faces Severe Structural Mismatch, Report Finds (Caixin)

China’s labor market is facing a severe structural mismatch, with cutthroat competition for white-collar and administrative roles contrasting sharply with a dearth of applicants for blue-collar and service-sector jobs, according to a new quantitative report.

The 2025 Human Resources Market Trend Analysis Report, published jointly by the Chinese Academy of Social Sciences’ Institute of Population and Labor Economics and recruitment platform Zhaopin, analyzed full-sample data from January to October 2025. By measuring the “competition index” — the ratio of resumes submitted to available job openings — researchers quantified the intensity of the nation’s employment race.

China’s car exports accelerate despite disruption from Mideast crisis (Reuters)

Car exports, an increasingly important source of growth for China’s hyper-competitive auto sector, picked up ​pace in March despite shipment disruptions from the crisis in ‌the Middle East, one of the industry’s key overseas markets.

Exports grew 73.7% from a year earlier to nearly 700,000 vehicles last month, faster than the 54.1% in the first two months, ​data from the China Passenger Car Association showed on Thursday.

“Car ​exports have entered a stage of super high growth, beating our expectations,” ⁠said Cui Dongshu, the association’s secretary-general.

Domestic sales dropped 15.2% from a year ​earlier to 1.67 million vehicles last month, a sixth straight month of decline, ​as rising fuel prices dampened demand for conventionally fuelled models while electric vehicle sales continued to feel the impact of reduced incentives amid a sputtering economic recovery.

World’s biggest battery maker takes ambitions to the high seas (Financial Times)

CATL, the world’s biggest battery maker, has vowed to “spare no effort” to electrify parts of the global shipping fleet as it tries to replicate its success with electric vehicles on the high seas.

The Chinese group, which controls 37 per cent of the market for EV batteries and 22 per cent for energy storage systems in power grids and data centres, has deployed batteries on about 900 ships, mostly smaller craft operating close to the Chinese coastline, at ports or in rivers.

Electrifying parts of the maritime sector is central to Beijing’s broader goals of decarbonisation and reducing reliance on foreign resources. The International Maritime Organization aims to halve global shipping emissions, which account for 3 per cent of total carbon emissions, by 2050.

China Reminds Battery Makers to Avoid Excess Capacity Growth (Bloomberg)

China summoned the country’s leading battery makers for a second time in a little over three months, reinforcing a call to restrict capacity expansion and avoid the price wars that have damaged other renewable-energy industries in the past.

Several government agencies, including the Ministry of Industry and Information Technology, called on 16 manufacturers of electric-vehicle and stationary batteries to step up efforts to improve product quality and safeguard intellectual property, as well as controlling growth.

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Tech & Media

China AI Firm Discloses $92 Million of Banned Nvidia Chip Servers to Beijing (Bloomberg)

Shares of Sharetronic Data Technology Co. plummeted by the daily limit of 20% after the US charged a Super Micro Computer Inc. co-founder with illegally smuggling Nvidia Corp. AI chips to China.

Records suggest that Sharetronic procured hundreds of Super Micro systems containing high-end Nvidia chips, which have been banned from sale to and within China absent permission from Washington since 2022.

Sharetronic said it complies with regulations for hardware purchases and doesn’t have “any business cooperation or relationship” with Super Micro, but invoices show sales of Super Micro systems containing Nvidia’s H100 or H200 processors.

China lures home its top AI talent from Silicon Valley (Financial Times)

For the Chinese engineers who make up a significant portion of Silicon Valley’s AI labs and tech industry, it is clear the US no longer welcomes them.

Hsu, who gave lectures last month at China’s elite Tsinghua University, says: “You can also see an increasing amount of China’s brightest kids choosing to stay home, instead of pursuing [a] PhD in the US,” adding “it absolutely has something to do with the US immigration policies, in addition to just significantly more opportunities in China these days”.

The FT/Statista list of Asia-Pacific’s high-growth companies is published every April. Find out about the list and preregister for potential inclusion.

Lu Zhang, founding partner at Fusion Fund based in Silicon Valley, says it is too early to suggest the Valley is losing out to its Chinese competitors. The US, and specifically the Bay Area, still possesses the strongest ecosystem for technological incubation and development.

“The circulation of capital is the most efficient. Entrepreneurs get to validate their ideas quickly, and work with an extensive network of top-tier peers and mentors. You can’t find this anywhere else in the world,” says Zhang.

The recent poaching of Alibaba’s AI engineers by Meta is a testament to how the magnetic pull works both ways. For every researcher who returns to China, another may be lured to the Valley.

A hacker has allegedly breached one of China’s supercomputers and is attempting to sell a trove of stolen data (CNN)

A hacker has allegedly stolen a massive trove of sensitive data – including highly classified defense documents and missile schematics – from a state-run Chinese supercomputer in what could potentially constitute the largest known heist of data from China.

The dataset, which allegedly contains more than 10 petabytes of sensitive information, is believed by experts to have been obtained from the National Supercomputing Center (NSCC) in Tianjin – a centralized hub that provides infrastructure services for more than 6,000 clients across China, including advanced science and defense agencies.

OpenAI, Anthropic, Google Unite to Combat Model Copying in China (Bloomberg)

Rivals OpenAI, Anthropic PBC, and Alphabet Inc.’s Google have begun working together to try to clamp down on Chinese competitors extracting results from cutting-edge US artificial intelligence models to gain an edge in the global AI race.

The firms are sharing information through the Frontier Model Forum, an industry nonprofit that the three tech companies founded with Microsoft Corp. in 2023, to detect so-called adversarial distillation attempts that violate their terms of service, according to people familiar with the matter.

China Issues Draft Regulations on AI Copyright Infringement (Sixth Tone)

China has released draft regulations on AI copyright infringement, amid growing reports from actors, social media influencers, and ordinary citizens that their likenesses have been stolen for use in AI short dramas.

Released April 3 by the Cyberspace Administration of China, the draft “Administrative Measures for Digital Virtual Human Information Services” is open for public commentary until May 6.

China orders Apple to take down Jack Dorsey’s Bitchat (coingeek.com)

Apple has removed Bitchat, the decentralized messaging app created by co-founder and former Twitter CEO Jack Dorsey, from its China App Store “because it includes content that is illegal in China.”

On April 6, Dorsey posted on X a message from Apple notifying him of the decision to remove the Bitchat app from its China store, “per the demand from the CAC (Cyberspace Administration of China).” The takedown covers both the standard App Store listing and the TestFlight channel, which allows users to beta test versions of apps before they are released on the store.

China’s High-Tech Drive in 10 Charts (Center for Strategic and International Studies)

China’s ranking in the Global Innovation Index (GII), the gold standard for cross-national innovation metrics, has risen substantially over the last two decades. China now ranks tenth overall among 139 tracked countries and third in the Asia-Pacific, behind only Singapore and South Korea and just ahead of Japan. Over the last decade China has distanced itself from developing countries such as India and Brazil. The shift in China’s position is the result of both government actions and corporate behavior. The central government and localities have invested heavily to strengthen the various components of the country’s innovation ecosystem, implemented industrial policy targeted at specific sectors, and used China’s size to attract high-tech foreign investment and diffuse their products to large markets at home and abroad. But government policy does not deserve all the credit. Government initiatives occasionally do not pan out, and oftentimes Chinese businesses have been successful in spite of government policies and then only endorsed by authorities after the fact.

Science, Health & Environment

NASA’s lunar success sharpens focus on China’s 2030 crewed landing goal (Reuters)

As NASA’s record-breaking Artemis mission bolsters the U.S. path back to the moon, China’s bid to land astronauts there by 2030 is taking on greater geopolitical significance and putting pressure on Beijing to meet or beat ​its timetable.

Four U.S. astronauts on the Artemis II mission this week flew past the moon’s shadowed far side, travelling deeper into space than any humans before them and ‌setting the stage for Artemis IV to land on the moon in 2028.

The planned U.S. return after more than half a century is being closely watched in China, which is developing the full architecture for its first crewed landing on the moon, from the Long March-10 rocket to the Mengzhou spacecraft and Lanyue lunar lander.

Beijing has made significant advances in recent years by becoming the first country to return robot-taken samples from both the near and far ​sides of the moon, and its crewed spaceflight programme has become proficient in operating space stations and handling emergencies in orbit.

“There is no bigger prize for China on the table ​today than landing people on the moon, this is the essential next step for China on the road to preeminence in space,” said Clayton Swope, ⁠deputy director of the Aerospace Security Project at the U.S.-based Center for Strategic and International Studies (CSIS).

Washington and Beijing are also competing in institution-building efforts in preparation for a future when humans have ​a permanent presence on the moon, with the U.S.-led Artemis Accords on lunar exploration matched up against the Chinese and Russian-led International Lunar Research Station (ILRS).

“The question now is no longer simply who gets there first, but ​who can stay longer and do more,” Kang Guohua, an aerospace professor at the military-linked Nanjing University of Aeronautics and Astronautics, told China’s state-backed Global Times last week.

China Battles First Outbreak of Deadly African Foot-and-Mouth Disease (Caixin)

China is scrambling to contain its first domestic outbreak of a highly lethal African strain of foot-and-mouth disease, fast-tracking emergency vaccines as the agricultural sector faces a widening threat to its livestock industry.

The South African Type 1, or SAT1, strain has been officially confirmed in the western regions of Xinjiang and Gansu. Existing national vaccines, which primarily target the traditional O and A serotypes, fail to provide cross-immunity against the new strain. Cattle, sheep and pigs are all susceptible, with the mortality rate for young cattle reaching up to 50%.

Beijing Mandates Bold New Push for AI Drug Discovery, Surgical Robots (Caixin)

Beijing authorities released a sweeping set of policies on April 7 aimed at transforming the city into a global powerhouse for biomedical innovation, specifically targeting advancements in artificial intelligence-driven drug discovery, high-tech surgical robots, and global clinical trials.

Spearheaded by the municipal medical security bureau and eight other government departments, the Several Measures to Support the High-Quality Development of Innovative Medicine (2026 Edition) introduces 32 specific tasks spanning the entire pharmaceutical chain — from initial research and clinical trials to regulatory approval, commercial distribution, and frontline hospital application.

Arts & Culture

New Music 新唱片发行: Xu Cheng徐程/Shiren筮人/Seippelabel Vol. 15 (Live China Music)

Long-standing Shanghai experimental musician Xu Cheng - whose works traverses countless mediums and moods - brings together fourteen improvised guitar solos from the past dozen years on Poems without Words - released with London-based label Dusty Ballz. Born out of Xu Cheng’s attempt to restore a broken instrument he had picked up in a vintage store - the release explores the role between improvisation and forgetting - with the artist engaging with the instrument’s materiality, its former lives, and how we’ve been conditioned to play and wield it. Recorded on the outskirts of Shanghai in a park, it’s a fascinating artifact of an artist giving himself over to an instrument - discovering its secrets once again.

China’s Qingming Holiday Box Office Falls 19% (Caixin)

China’s Qingming holiday box office fell sharply from a year earlier despite more new releases, more screenings and cheaper tickets, underscoring the lack of a breakout hit to draw moviegoers back to theaters after the Lunar New Year.

China’s cinemas generated 305 million yuan ($44.3 million) in ticket sales during the three-day Qingming holiday from April 4 to April 6, down 19% from a year earlier, according to data from the official China Movie Database. Moviegoing attendance fell 13.8% to 8 million, according to domestic box office tracker Maoyan, even as the number of screenings rose by 40,000 and average ticket prices dropped by 2 yuan.

The weak showing highlighted a familiar problem for China’s film market: supply alone is no longer enough. Thirteen new films opened over the holiday, four more than a year earlier, and holdovers such as the sci-fi title “Project Hail Mary” remained in circulation. But without a must-see title or a movie that could dominate public discussion, audiences still drifted away.

Sports

Double glory for China at ITTF World Cup (Xinhua)

Chinese table tennis stars Sun Yingsha and Wang Chuqin capped a dramatic week at the ITTF World Cup with landmark victories at Galaxy Arena in Macao, China on Sunday.

Sun became the first women’s player to win three consecutive World Cup singles titles, while Wang battled through a seven-game thriller to claim his first men’s singles World Cup crown.

Sheng, Xiao add two golds for China at ISSF World Cup in Granada (Xinhua)

Chinese shooters delivered a strong performance on the third day of the ISSF World Cup in Granada, Spain, as Sheng Lihao and Xiao Jiaruixuan won the men’s 10-meter air rifle and women’s 25-meter pistol titles respectively on Thursday.

Three Chinese referees selected for 2026 FIFA World Cup (Xinhua)

The Chinese Football Association confirmed Thursday that referees Ma Ning, Fu Ming and Zhou Fei have been appointed as referees for the 2026 FIFA World Cup.

Ma will serve as a referee, Zhou as an assistant referee, and Fu as a video assistant referee.

Chinese sports authorities crack down on cyberbullying of diving prodigy Quan (Reuters)

Chinese swimming authorities said on Wednesday they have launched an investigation into cyberbullying of diving ​star Quan Hongchan, a three-time Olympic gold medallist, ‌and reported the matter to police.

Quan, who won her first gold at Tokyo 2020 at the age of 14 and two more ​at the next games in Paris 2024, has ​given several interviews in which she talked about ⁠toxic online commentary over her weight and the immense ​pressure she has felt to diet even though she was ​already eating very little.

Now 19, Quan told Chinese magazine Renwu this year that she seriously considered retiring after the Paris Olympics before ​deciding she wanted to keep going.

31-year-old man fined, detained for 10 days for making insulting remarks about Olympic diving champion Quan Hongchan: Guangdong police (Global Times)

Guangdong police on Friday issued an official statement on the online abuse against Olympic diving champion Quan Hongchan, noting that the individual responsible for making insulting comments has been punished with 10 days of administrative detention and a fine, CCTV News reported on Friday.

In the statement published on Friday, the Guangdong police said that recently, based on a police report, the Yuexiu district public security bureau in Guangzhou has found that Xu (male, 31, a diving enthusiast) had repeatedly posted insulting remarks targeting an athlete from the Guangdong Provincial Ersha Sports Training Center in a WeChat group he created, using different aliases, causing an adverse impact.

If you find it valuable, please like, restack, or share What’s Happening in China with others.

See you next week!

— PC

Jumping straight in this week.

— PC

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Early this week, the White House announced new dates for the Trump-Xi summit in Beijing. Originally scheduled for March 31-April 2, the trip is now set for May 14-15, one day shorter than the original plan.

The U.S. President last week announced he had asked to postpone the visit so he could stay in Washington because of the war with Iran. “President Xi understood that it’s very important for the president to be here throughout these combat operations right now,” Karoline Leavitt, the White House spokesperson, said.

Ahead of the summit, on Friday Beijing announced new trade probes into U.S. practices, likely a reaction to Washington’s efforts to revive its tariff agenda after the Supreme Court last month ruled Trump’s signature economic policy illegal.

Meanwhile, in what will probably draw a strong reaction from China, four U.S. senators are headed to Taiwan where, according to the Financial Times, they “will urge lawmak…

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Originally scheduled to take place from March 31 to April 2, Trump this week asked to postpone his visit to Beijing because of the war with Iran. Politico reported today that “The Trump administration is telling foreign officials and others that it will not reschedule a summit between the president and Chinese leader Xi Jinping until the Iran war ends.”

As we covered in last week’s newsletter, Chinese authorities were frustrated by the way summit preparations were unfolding, so it’s unlikely they were too upset by the delay.

Even with the summit on hold, both sides have been working to keep dialogue moving. U.S. Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent met Chinese Vice Premier He Lifeng last weekend in Paris for trade talks ahead of the now-postponed summit, discussing the possible creation of a U.S.-China “Board of Trade” and “Board of Investment” to help manage bilateral trade and investment.

As Ryan Hass, an American foreign policy analyst and Brookings scholar, notes, “Washington and Beijing now find themselves navigating relatively calm waters,” although, as he warns, “The two governments have deferred, not resolved, the underlying tensions that originally drove the relationship toward confrontation.”

Let’s jump into it.

— PC

Through the Lens

In Focus

I. Trump-Xi summit

Trump had been due in the Chinese capital at the end of this month for talks with President Xi Jinping, but has delayed his trip by several weeks to deal with the fallout from the war.

His decision last month to join Israel in strikes on Iran has plunged the Middle East into violence, pushed energy prices to years-long highs and seeded fears of global supply shortages due to Iran’s effective closure of the Strait of Hormuz.

With Trump struggling to define how the intervention will end and traditional allies reluctant to back him, the US leader may come to China needing a diplomatic win.

“A show of US force that was meant to intimidate Beijing has instead served to puncture the illusion of US omnipotence,” said Ali Wyne, a senior adviser focusing on US-China ties at the International Crisis Group think tank.

“Unable to reopen the Strait of Hormuz alone, Washington now needs its principal strategic competitor to help it manage a crisis of its own making,” Wyne said.

Read: Trump’s Mideast muddle could play into Xi’s hands at planned summit (France 24)

II. China’s energy supply

Iran has continued to ship to China, the primary buyer of its oil, despite the war. China’s imports of Iranian crude have slipped only marginally, according to Kpler estimates, from 1.57m barrels per day in February to 1.47m barrels per day in March.

Chinese vessels operated by state-owned firms are meanwhile working to navigate the broader region. The Kai Jing supertanker diverted to pick up Saudi crude at a Red Sea port earlier this month, Chinese media outlet Caixin reported, and is set to dock in China in early April.

And even if Beijing is forced to confront an overseas supply crunch, it has quietly amassed an extraordinary hoard to mitigate the ramifications of a major shock.

Beijing does not disclose the size of its oil reserves, and estimates vary significantly. But it is widely agreed to be sitting on a massive stockpile: about 1.4bn barrels, according to Columbia University’s Center on Global Energy Policy.

Read: China has been preparing for a global energy crisis for years. It is paying off now (The Guardian)

Related:

• China talks up oil sufficiency as Trump seeks Beijing’s help on Hormuz (CNBC)

• China oil majors resume seeking Russian oil after a 4-month halt, sources say (Reuters)

• China’s fuel export ban to further tighten Asia supply (Reuters)

• China–Middle East Air Cargo Recovers as Routes Shift North From Gulf Hubs (Caixin)

• Chinese Airlines Hike Surcharges on Rising Jet Fuel Prices (Caixin)

III. The robots are coming

As in much of the world, AI has become part of everyday life in China. But what most excites Chinese politicians and industrialists are the strides being made in the field of robotics, which, when combined with advances in AI, could revolutionise the world of work. The technology behind China’s current robotics boom is deep learning, the mathematical engine behind large language models such as ChatGPT, which learn by discerning patterns from huge datasets. Many researchers believe that machines can learn to navigate the physical world the way ChatGPT learned to navigate language: not by following rules, but by absorbing enough data for something like human dexterity to emerge. The aim, for many technologists, is the development of humanoid robots capable of performing factory labour – work that employs hundreds of millions of people worldwide.

The resources being pumped into achieving this goal are staggering. In 2025, China announced a £100bn fund for strategic technologies including quantum computing, clean energy and robotics. Major cities have invested their own resources into robotics projects, too. There are now roughly 140 Chinese firms hoping to build humanoids. Some of the frontrunners made their debut in February, at the lunar new year festival gala, a state-choreographed spectacle loosely comparable to the Super Bowl in terms of bombast and national significance. Hundreds of millions watched as robots performed comedy sketches and martial arts routines. The speed of progress has been startling. Last year, the robots were doing a synchronised cheerleading routine. This year, they did cartwheels and parkour. The intended message was clear: the robots are coming, and China will be the nation building them.

Read: Inside China’s robotics revolution ( for The Guardian)

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With just over 2 weeks to go before Trump lands in Beijing for a three-day U.S.-China summit, Chinese authorities are reportedly frustrated by the way preparations are unfolding. Bloomberg reports that “Chinese officials are dissatisfied with what they consider last-minute planning ahead of Trump’s arrival on March 31” and that the “White House’s lack of communication about Trump’s expectations for the visit has also been an issue for Beijing.”

U.S. Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent will meet Chinese Vice Premier He Lifeng this weekend in Paris for economic and trade talks ahead of the summit.

While the two sides have been trying to maintain a stable relationship ahead of the high-level meeting, tensions remain. On Friday, China’s Commerce Ministry condemned a U.S. probe into excess industrial capacity, with spokesperson Guo Jiakun saying that “We oppose any form of unilateral tarif…

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Driving the news this week were the opening of the Two Sessions, the concurrent gatherings of the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC), and the U.S.-Israeli attack on Iran and Beijing’s reaction.

At the opening session of this year’s NPC, Premier Li Qiang announced a GDP growth target of 4.5% to 5% for 2026, the lowest in decades. “While recognizing our achievements, we are also clear-eyed about the difficulties and challenges we face,” he said, a reference not only to domestic headwinds but also to a volatile international environment.

While Beijing condemned the use of force and voiced support for Tehran in “safeguarding its legitimate rights and interests,” saying it opposes outside interference in Iran’s ​internal affairs, CNN reported that the U.S. “has intelligence suggesting that China may be preparing to provide Iran with financial assistance, spare p…

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Jumping straight in this week.

— PC

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At last weekend’s Munich Security Conference, when asked whether the U.S. should send troops to defend Taiwan in the event of a PRC invasion, U.S. congresswoman Alexandria Ocasio-Cortez clumsily hesitated before reiterating Washington’s longstanding policy [of strategic ambiguity], saying the goal is “to make sure that we never get to that point.” Her answer aligned with U.S. policy, even if the delivery was awkward. For that, she was later mocked by Donald Trump and U.S. Vice-President JD Vance.

A few minutes after insulting Representative Ocasio-Cortez, the president of the United States, who is scheduled to visit China next month, made the shocking statement that he was discussing potential arms sales to Taiwan with Xi Jinping. The remark raised concerns in Taipei and Washington about whether such consultations would conflict with the Six Assurances, the second of which states that the U.S. “has not agreed to consult…

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Beijing reacted sharply in November when Japanese Prime Minister Sanae Takaichi, asked by an opposition lawmaker about “survival-threatening situations,” said a hypothetical Chinese attack on Taiwan could constitute “an existential threat” to Japan and potentially draw Tokyo into a conflict alongside the United States.

Foreign Ministry spokesperson Lin Jian responded that Japan “must correct its wrongdoing at once and retract the unjustified remarks,” warning that “those who play with fire will perish by it.”

On Sunday, Takaichi, the first woman to serve as Japan’s prime minister, emerged from a snap election with a historic supermajority. Her conservative Liberal Democratic Party won 316 of 465 seats in the lower house of the National Diet, enough to override the opposition-controlled upper house.

This is the first time since the Second World War that any party in Japan has won a two-thirds majority on its own, giving the prime minister a mandate for a more assertive foreign policy, including toward China.

Beijing will now have to decide whether to continue its confrontational rhetoric toward Tokyo or adopt a more diplomatic approach. For now, however, when asked about Japan’s LDP landslide victory, Lin Jian reiterated on Monday China’s demand that Japan retract “the erroneous remarks of Sanae Takaichi on Taiwan,” while on Friday at the Munich Security Conference, Chinese Foreign Minister Wang Yi said that “sensible people should be cautious about Japan.”

Before we jump in, as this is our last issue before the new year, I’d like to wish you a healthy and prosperous Year of the Horse.

春节快乐！

— PC

Through the Lens

In Focus

I. Takaichi’s historic election

Prime Minister Sanae Takaichi’s historic election victory is handing Chinese leader Xi Jinping a dilemma: Engage with Japan’s most popular post-war leader or continue a deep freeze with the US’s top ally in Asia.

Takaichi emerged Sunday from a snap election with a historic majority that gives her a mandate for a more assertive foreign policy, just as China ramps up pressure. Since November, when she implied in parliament that a Chinese invasion of Taiwan could prompt Japan to deploy its military, Beijing has imposed export controls and tourism curbs to pressure her to retract those remarks.

Chinese leaders must now must decide whether to maintain economic pressure on Tokyo, or find an off-ramp to the dispute. Takaichi has stated she wants stable relations with Beijing, but it remains politically impossible for her to retract her comments without appearing to compromise Japan’s security.

Several Japanese officials, who asked not to be identified speaking about a sensitive topic, said their hope is China will have little choice but to eventually re-engage because Takaichi’s strong domestic mandate means her administration will likely be around for the next few years.

At a press conference on Monday, Takaichi said Japan was continuing to communicate with China at “various levels” and would respond “calmly and appropriately from the standpoint of Japan’s national interests.”

Read: China’s Xi Faces Dilemma Over Japan After Takaichi’s Historic Election Win (Bloomberg)

Related:

• China says its policy towards Japan will not be changed by one election (The Straits Times)

• Why a resurgent Japan is good for Asia (Chatham House)

• With eye on China, Koizumi stresses importance of rules-based order (The Japan Times)

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The Financial Times reported this week that Beijing threatened to cancel Trump’s planned visit to China in April if a new U.S. arms sales package to Taiwan goes ahead. In their first call since November, Xi Jinping warned Trump on Wednesday that China “will never allow Taiwan to be separated,” adding that Washington “must handle the issue of arms sales to Taiwan with prudence.”

This rhymes with last week’s news that Beijing refused to confirm Starmer’s trip to China until London approved the construction of a new Chinese mega-embassy.

Despite the warning, according to Reuters, Taiwan President Lai Ching-te said on Thursday that “Taiwan–U.S. relations are rock-solid” and that cooperation would continue unchanged.

Still, to avoid further escalation with Beijing, it is now possible that the U.S. arms sale is delayed until after Trump’s April visit.

Let’s jump into it.

— PC

Through the Lens

In Focus

I. Xi-Trump call

China is considering buying more U.S.-farmed soybeans, President Donald Trump said after what he called “very positive” talks with President Xi Jinping on Wednesday, even as Beijing warned Washington about arms sales to Taiwan.

In a goodwill gesture two months before Trump’s expected visit to Beijing, Trump said Xi would consider hiking soybean purchases from the United States to 20 million metric tons in the current season, up from 12 million tons previously. Soybean futures rallied.

Hours after Xi’s virtual meeting with Russian President Vladimir Putin, Xi and Trump discussed Taiwan and a wide range of trade and security issues that remain a source of tension between the world’s two biggest economies. Both leaders publicly affirmed their personal stakes in strong relations after the call, their first since November.

Trump said on Truth Social that the call was “all very positive,” that his relationship with Xi is “extremely good,” and that “we both realize how important it is to keep it that way.” An official Chinese government account said that Xi had said, “I attach great importance to Sino-U.S. relations.”

Read: Trump, Xi discuss Taiwan and soybeans in call aimed at easing China, US relations (Reuters)

Related:

• Be ‘prudent’ about supplying arms to Taiwan, Xi tells Trump in call (The Guardian)

• China’s Xi holds calls with Trump, and Putin, on same day (DW)

II. Critical minerals: reducing reliance on China

Vance said the US-China trade war of the past year has exposed how dependent most countries are on critical minerals, the sale of which Beijing largely dominates. Therefore, collective action is needed to make the West self-reliant, he stressed.

“We want members to form a trading bloc among allies and partners, one that guarantees American access to American industrial might while also expanding production across the entire zone,” Vance said at the opening of a meeting that Secretary of State Marco Rubio hosted with officials from 55 European, Asian and African nations.

“We want to eliminate that problem of people flooding into our markets with cheap critical minerals to undercut our domestic manufacturers,” Vance told a gathering ⁠without mentioning China.

Read: US wants to establish critical minerals trade bloc (DW)

Related:

• U.S. plans critical mineral price floors with Mexico, EU and Japan (CNBC)

• EU, US and Japan to cooperate on critical raw materials supply chains (Euronews)

• EU’s climate goals at risk without China’s critical raw materials, EU auditors warn (Euronews)

• China criticises US plan for critical minerals trade bloc (Reuters)

• Critical minerals and coalitions of the willing ()

• Leapfrogging China’s Critical Minerals Dominance (Council on Foreign Relations)

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Following the controversial approval of a Chinese mega-embassy in London, Keir Starmer flew to the PRC this week for a four-day visit, the first by a British prime minister since Theresa May in 2018. In Beijing, Starmer met Xi Jinping, calling China “a vital player on the global stage” and saying he hoped to build a “more sophisticated relationship.” Xi said, “The current international situation is complex and intertwined. As permanent members of the UN Security Council and major global economies, China and the UK need to strengthen dialogue and cooperation.”

The thaw in relations already delivered a few immediate results. Sanctions were lifted on six serving British MPs and peers; visa rules will be relaxed, allowing UK citizens to visit the PRC visa-free for stays under 30 days; and China agreed to cut tariffs on British whisky from 10% to 5%. Both sides also agreed on a new border security pact to disrupt the supply …

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China’s population declined for the fourth year in a row in 2025, according to new data from the National Bureau of Statistics, falling by 3.39 million to 1.40489 billion.

While Beijing has rolled out a growing list of measures to counter the demographic slide—including, most recently, imposing a 13% VAT on condoms and other contraceptives for the first time in three decades—economic and social pressures, combined with shifting attitudes toward marriage and family, make the trend impossible extremely hard to reverse.

Births dropped to 7.92 million last year, down from 9.54 million in 2024, representing a 17% decline and a birth rate of just 5.63 per 1,000 people, the lowest since the founding of the People’s Republic in 1949.

The implications extend well beyond family policy. A shrinking and aging population will weigh on economic growth, strain public finances, and complicate the trade-offs between short-term stimulus and long-term sustainability, at a time when the country is already grappling with mounting structural constraints, including local government debt, a deepening property crisis, and external pressures in tech and trade—pressures that shaped Beijing’s messaging at Davos this week.

I wouldn’t be surprised if China’s population drops below 1.4 billion in 2026. That is, if it hasn’t already, given how notoriously unreliable official statistics can be.

Let’s jump into it.

— PC

Through the Lens

In Focus

I. The adult in the room(?)

China’s Vice Premier He Lifeng positioned his country as a champion of the rules-based international order Tuesday, in a speech at the World Economic Forum that indirectly attacked the Trump administration.

“The unilateral acts and trade deals of certain countries clearly violate the fundamental principles and rules of the [World Trade Organization], and severely impact the global economic and trade order,” said He, adding that the world shouldn’t slide back into “the law of the jungle, where the strong bully the weak.”

The remarks come amid unprecedented tensions between the European Union and the U.S. over Washington’s threats to annex Greenland by force. The escalation has already led President Donald Trump to threaten a group of European countries with new duties after they sent troops to the North Atlantic island.

Read: China pitches itself as reliable partner amid Trump threats (Politico)

Related:

• Davos 2026: Special Address by He Lifeng, Vice-Premier of the People’s Republic of China (World Economic Forum)

• NATO’s Rutte says Arctic talks with Trump to focus on keeping out Russia, China (Reuters)

• Bullied by Trump, US allies turn to China ()

Read more

Before we dive in, please consider liking, commenting, restacking, or sharing this newsletter with others. Your help in reaching more readers means a lot.

Let’s jump into it.

— PC

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I hope you’ve had a good start to the new year.

And a quiet start this was not. Hours before being captured by U.S. forces in Caracas, former Venezuelan leader Nicolás Maduro hosted a Chinese delegation that included China’s Special Representative for Latin American Affairs Qiu Xiaoqi, suggesting the operation may have caught Beijing off guard. On Monday, the PRC’s Foreign Ministry spokesperson Lin Jian said China was “deeply shocked by and strongly condemns the U.S.’s blatant use of force against a sovereign state and the forcible seizure of its president.”

The U.S. intervention immediately raised questions about the sustainability of Beijing’s involvement in Latin America and whether it could embolden the PRC to accelerate plans related to Taiwan.

ChinaFile put these and other questions to a group of experts in “How Will China Respond to Maduro’s Capture?”

As this is the first issue of 2026, I’m making it available to al…

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This is probably our last issue of 2025, so I’d like to wish you a wonderful holiday season if you celebrate!

Let’s jump into it.

— PC

Through the Lens

In Focus

I. U.S.-China AI chip race

In a high-security Shenzhen laboratory, Chinese scientists have built what Washington has spent years trying to prevent: a prototype of a machine capable of producing the cutting-edge semiconductor chips that power artificial intelligence, smartphones and weapons central to Western military dominance, Reuters has learned.

Completed in early 2025 and now undergoing testing, the prototype fills nearly an entire factory floor. It was built by a team of former engineers from Dutch semiconductor giant ASML who reverse-engineered the company’s extreme ultraviolet lithography machines or EUVs, according to two people with knowledge of the project.

EUV machines sit at the heart of a technological Cold War. They use beams of extreme ultraviolet light to etch circuits thousands of times thinner than a human hair onto silicon wafers, currently a capability monopolized by the West. The smaller the circuits, the more powerful the chips.

China’s machine is operational and successfully generating extreme ultraviolet light, but has not yet produced working chips, the people said.

In April, ASML CEO Christophe Fouquet said that China would need “many, many years” to develop such technology. But the existence of this prototype, reported by Reuters for the first time, suggests China may be years closer to achieving semiconductor independence than analysts anticipated.

Read: How China built its ‘Manhattan Project’ to rival the West in AI chips (Reuters)

Related:

• China boosts AI chip output by upgrading older ASML machines (Financial Times)

• China’s AI Chip Deficit: Why Huawei Can’t Catch Nvidia and U.S. Export Controls Should Remain (Council on Foreign Relations)

• Can the West recover from China’s hi-tech knockout blow? (Chatham House)

II. TikTok saga: final episode?

TikTok has signed the deal backed by President Donald Trump to spin off its US assets to create a new entity with a group of mostly American investors, CEO Shou Chew told employees in a memo Thursday.

Although the transaction is not yet complete, the move brings TikTok one step closer to securing its long-term future in the United States. It comes after a law passed last year required that the US version of the app be spun off from its parent company, ByteDance, or be banned in the United States. Trump repeatedly delayed enforcement of the law as he pursued a deal to transfer control of the popular app to American ownership.

“We have signed agreements with investors regarding a new TikTok U.S. joint venture, enabling over 170 million Americans to continue discovering a world of endless possibilities as part of a vital global community,” Chew said in his memo, which was obtained by CNN. A person familiar with the company confirmed the memo’s accuracy.

Read: TikTok has signed the deal to spin off its US entity with American investor group (CNN)

III. “Best China Books of 2025”

As armchair travelers at China Books Review (though both editors did visit China this year), we can observe a few trends in the shifting landscape of what’s being published about, and in, China and the Sinophone world. First: more books are coming out than ever; we counted 655 English-language books on or from greater China this year, up from 567 last year (though we may just be getting better at finding them). Second: fewer of those books are reported works and memoirs from on the ground, and more are academic or policy titles (with a steady sprinkle of translated fiction, up on last year). Third: there’s been a shift in what China books sell the best. The top spots in our bestseller list used to be occupied by conspiracy theories and Cold War Redux warnings; now there are more tech profiles and mixed portrayals of China proving sticky in the top five.

Does this show a change of analysis or perspective? Ultimately, any trendlines are buried in the diversity of the field. The range of genres and topics, and sheer weight of the shelf, can be overwhelming — which is where we come in. We canvassed a roster of writers and scholars on China to tell us their favorite books from this year, as well as adding some of our own and taking nominations for our book prize into account. All to come up with the below lists of 10 nonfiction titles and 10 works of literature (in no particular) that we think you should read, with recommendations written by experts in the field.

Read: Best China Books of 2025 (China Books Review)

Related: Dissecting the Douban Best Books of 2025 lists ()

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Trump announced on Monday that the U.S. would authorize Nvidia to sell its H200 chip to “approved customers” in China. According to Bloomberg, Washington concluded the move carries limited risk since “the company’s Chinese archrival, Huawei Technologies Co., already offers AI systems with comparable performance.”

Inevitably, Beijing will continue efforts to reduce its reliance on foreign technology and advance its domestic AI chip industry, with reports suggesting that it is preparing “a package of incentives worth as much as $70 billion.”

Still, concerns remain that giving Chinese AI developers access to the H200, although less advanced than Nvidia’s Blackwell chips, could help accelerate the country’s technological ambitions.

from ChinaTalk compiled some of the reactions circulating in Chinese media.

Let’s jump into it.

— PC

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Before we dive in, please consider liking, commenting, restacking, or sharing this newsletter with others. Your help in reaching more readers means a lot.

Let’s jump into it.

— PC

Through the Lens

In Focus

I. U.S. National Security Strategy and countering China’s rise

US President Donald Trump’s new national security strategy frames America’s allies not just as partners, but as instruments to preserve US primacy and counter China’s rise, analysts say.

The strategy urges wealthy allies to increase defence spending, align more closely with Washington on measures such as export controls, and take greater responsibility for their regions, a shift that recasts long-standing alliances as tools in great-power competition.

The 33-page document declares that the era of the US “propping up the entire world order like Atlas” is over.

“The United States must work with our treaty allies and partners – who together add another US$35 trillion in economic power to our own US$30 trillion national economy (together constituting more than half the world economy) – to counteract predatory economic practices,” it states.

Its goal is explicit: “to help safeguard our prime position in the world economy and ensure that allied economies do not become subordinate to any competing power.”

It adds, “We will also work to align the actions of our allies and partners with our joint interest in preventing domination by any single competitor nation.”

The strategy identifies China as a near-peer competitor and emphasises US efforts to counter its economic, technological and military influence.

Read: Trump recasts US allies as tools to counter China in security playbook: analysts (SCMP)

Related:

• 2025-National-Security-Strategy (PDF) (The White House)

• Unpacking a Trump Twist of the National Security Strategy (Council on Foreign Relations)

• Experts react: What Trump’s National Security Strategy means for US foreign policy (Atlantic Council)

• New US National Security Strategy—Three Things It Says About China (Newsweek)

• Deterring Taiwan conflict a ‘priority’: US national security report (SCMP)

• Trump’s new national security blueprint aims to combat China’s rise in Latin America (SCMP)

Read more

Jumping straight in this week.

— PC

Through the Lens

In Focus

I. Trump-Xi call

President Trump and China’s top leader Xi Jinping held a phone call Monday, the latest in a flurry of diplomatic and trade parries between the two countries over tariffs and technology export restrictions.

In a post about the call on Truth Social, President Trump said: “We discussed many topics including Ukraine/Russia, Fentanyl, Soybeans and other Farm Products, etc. We have done a good, and very important, deal for our Great Farmers — and it will only get better. Our relationship with China is extremely strong!”

A statement from China’s state news agency said both countries should “keep up the momentum, keep moving forward in the right direction on the basis of equality, respect and mutual benefit, lengthen the list of cooperation and shorten the list of problems, so as to make more positive progress, create new space for China-U.S. cooperation and bring more benefits to the people of both countries and the world.”

Read: Trump and China’s Xi Jinping discuss trade, Taiwan, Ukraine in call (NPR)

Related:

• Xi says China, U.S. should keep up momentum in ties, move forward in right direction (Xinhua)

• Donald J. Trump (@realDonaldTrump) (Truth Social)

II. China-Japan tensions

U.S. President Donald Trump and Japanese Prime Minister Sanae Takaichi have discussed Takaichi’s recent comments on Taiwan, people familiar with the matter said.

Sources close to the prime minister said Thursday that she and Trump had agreed to “cooperate to calm” China’s anger over Takaichi’s remark this month that an invasion of Taiwan could escalate into a situation that requires Japan to mobilize its defense forces.

Neither Takaichi’s government nor the Trump administration have said publicly that the Taiwan comments were discussed in the call.

Trump spoke with Takaichi on Tuesday, a day after he held a call with Chinese President Xi Jinping.

A senior Japanese official said Takaichi and Trump had discussed trade issues, including soybean exports to China, a priority for Trump. The president conveyed that positive ties between U.S. and China benefit Japan, the official said.

[…]

In a news conference Thursday, Japanese Chief Cabinet Secretary Minoru Kihara denied the Wall Street Journal’s reporting that Trump had “advised her [Takaichi] not to provoke Beijing on the question of Taiwan’s sovereignty.”

After learning of the report, Takaichi told aides that she did not think Trump had said anything along those lines.

Takaichi herself is trying to calm the turbulence stirred up by her remarks. When asked Wednesday in a debate with party leaders about a potential Taiwan crisis, the prime minister said, “The government would make a decision after considering all of the information together.”

Read: Trump and Takaichi discussed Taiwan remarks, how to calm China: sources (Nikkei Asia)

Related:

• Japan PM highlights Trump bond after first talks since China clash (Reuters)

• Spat With China Becomes an Asset for Japan’s New Leader (The New York Times)

• China turns to familiar playbook in dispute with Japan over Taiwan (AP)

• Chinese Airlines Slash Hundreds of December Flights to Japan After Travel Warning (Caixin)

• China slams Japan’s plans to deploy missiles near Taiwan (HKFP)

• Japan will pay ‘painful price’ if steps out of line over Taiwan, China military says (Reuters)

• Japanese Mission UN on X (X)

• If China can bully Japan, it can bully anyone (The Japan Times)

III. Hong Kong’s deadliest fire in decades

Hong Kong’s deadliest fire in decades has raised questions about corruption and negligence in the renovations of the apartment complex where at least 128 people died.

An intense fire broke out at Wang Fuk Court complex in Hong Kong’s northern suburbs Wednesday afternoon, with flames covering seven of the eight towers. The complex was home to some 4,800 residents, some of whom had raised safety concerns about the renovations more than year before the fire.

Police on Wednesday arrested three men from a construction company on suspicion of manslaughter and gross negligence. They are now out on bail. Authorities then arrested seven men and one woman, including scaffolding subcontractors, directors of an engineering consultancy company and project managers supervising the renovation, in a corruption probe.

Read: Hong Kong authorities investigate corruption, negligence in deadliest fire in decades (AP)

Related:

• Three days of mourning begins after Hong Kong apartment fire (BBC)

• HK blaze: China launches campaign against fire hazards in high-rise buildings (HKFP)

• Hong Kong community groups deliver aid to survivors of Wang Fuk Court fire (The Guardian)

• Portraits of courage: domestic helpers who stayed with their wards during Hong Kong fire (SCMP)

• Of 243 animals trapped in Tai Po fire, 92 recovered, NGO says (HKFP)

Read more