PRC: U.S. should be grateful, as EU says Beijing is 'laughing' at trade wars

Plus, Dalai Lama says his successor will be born in 'free world'

Welcome back to What’s Happening in China, your weekly China brief.

I hope you’ve had a great week.

The “two sessions” concluded on Tuesday, March 11, with no big surprises. At the top of the agenda, the government signaled its intent to boost domestic consumption and increase investment in science, technology, and innovation—seen as key drivers of national development. As expected, there was no announcement of a stimulus “bazooka,” with Beijing opting for caution and keeping some leeway in case trade tensions with the U.S. escalate further. Asia Society provided a succinct summary of the meetings’ key takeaways.

As trade disputes continue, a senior Chinese foreign ministry official expressed frustration on Wednesday, Reuters reported. At a briefing in Beijing, the official remarked, “The U.S. should’ve said a big thank you to us,” referring to the PRC’s cooperation in curbing the flow of fentanyl precursors. The comment seemed to echo Trump and JD Vance’s recent rebuke of Zelenskyy in the Oval Office over U.S. aid to Ukraine. Beijing is seeking clarity on what the U.S. actually wants and sees Trump’s decision to slap tariffs on PRC imports—justified by a lack of action on fentanyl—as “not the way to solve problems.”

Meanwhile, The Wall Street Journal reported that talks are underway for a Trump-Xi summit in the U.S. in June. However, according to the Financial Times, “the two sides had not engaged in serious talks about a possible summit between the two presidents.”

Let’s jump into it.

— PC

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Through the Lens

Bicycles parked in a historic hutong in central Beijing.

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In Focus

I. Huawei's EU scandal

Authorities raided more than 20 addresses and sealed two offices in the European Parliament on Thursday, as part of a spiraling bribery probe into Chinese technology giant Huawei's lobbying activities in Europe.

Authorities "have an ongoing investigation on preliminary charges of active corruption, forgery of documents, money laundering at the European Parliament,” a spokesperson for the Belgian Prosecutor’s office said. The "alleged bribery" would have benefited China's Huawei, the office later added.

Police raided 21 addresses in Brussels, Flanders, Wallonia and in Portugal, and several people have been arrested, prosecutors said.

Read: Huawei bribery scandal rocks European Parliament (Politico)

Related: Huawei lobbyists banned from accessing European Parliament after bribery arrests (AP)

II. Mi casa no es su casa

Taiwanese President William Lai Ching-te said Thursday tougher measures are needed to counter stepped-up Chinese infiltration, spying and other efforts to weaken the island’s defenses and speed Beijing’s goal of taking control of the self-governing island republic, a close U.S. partner.

Lai cited a range of recent incidents involving China that fall into a “gray area” including psychological warfare short of open armed conflict.

Beijing’s efforts to “subvert, obtain secrets, lure members of the armed forces and influence public opinion to lose confidence in our national defense require that we step up our legal safeguards to prevent and detect such incidents,” Lai said at a news conference.

Lai said proposed measures to counter China’s moves included bringing back military trials for crimes such as spying and making it more difficult for residents from China and the Chinese territories of Hong Kong, and Macau to obtain Taiwanese identification, a task made more difficult by widespread intermarriage between Taiwanese and Chinese.

Taiwan will also further limit contact with the island by individuals affiliated with the ruling Chinese Communist Party’s United Front department aimed at using cultural products and personnel exchanges to push Beijing’s line on unification.

Read: Taiwan's leader says tougher measures needed to counter stepped-up Chinese infiltration and spying (AP)

Related:

• Mainland China calls for legal improvements to fight Taiwan independence, foreign forces (SCMP)

• Exposing China’s Legal Preparations for a Taiwan Invasion (War on the Rocks)

III. How handy is Manus?

Rohit Krishnan: What interested me most was that all our previous conversations about China focused on models — how good their models are, how much money they have, how many GPUs they possess, etc. Now we’re talking about a product. The closest thing to a product from DeepSeek was their API, which is really good with an exceptional model, but the interface was just the same old chat interface. We’ve been discussing agents extensively for a long period. In the West, we still live under the umbrella of fear regarding AI agents, which is why most models aren’t given proper internet search capabilities. It’s amazing to see that the first really strong competitor has come out of China — arguably better, perhaps slightly worse, but definitely comparable to Operator. They made it work with a combination of Western and Chinese models, using Claude and fine-tunes of Qwen underneath. That changes the product landscape as far as I can see.

Read: Manus: A DeepSeek Moment? (

ChinaTalk

)

Related: Everyone in AI is talking about Manus. We put it to the test. (MIT Technology Review)

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