Still recovering from jet lag… Singapore is a long trip… but wanted to share a few observations from my week there.

The song for this week was the official anthem for the Singapore’s National Day Parade in 2023. Starting in 1984, the Singaporean Government commissioned songs for their National Day Parades on August 9^th.

The song in 2023 was “Shine Your Light,” a pop tune that is unapologetically positive about Singapore’s role in the world and the strengths of its multi-cultural society.

Shine your light upon the world, indeed!

After spending a week there, it is hard not to come away feeling positive about Singapore. But I did note some undercurrents which suggested that the Singaporean Government understands that their position is a bit precarious.

The most obvious reason for this concern is what is happening in the Strait of Hormuz. My Singaporean hosts see a dangerous precedent being set. If the norms and rules around the freedom of the seas were to breakdown in their neighborhood, then Singapore’s entire economic system would face collapse.

But there were other concerns as well, just beneath the surface.

Peranakan is the story that Singapore wants to tell about itself

This was the second time that my Singaporean hosts took members of the dialogue I was a part of to the Peranakan Museum.

The Peranakan Museum

Peranakan means “local born” in Malay and it refers to the offspring of foreign traders who settled in the Straits between the 15^th and 18^th centuries, married local women, and raised families. Peranakan also refers to the culture that has formed from this mixing of ethnicities and the cultural artifacts that are associated with these individuals. It is a fascinating museum that explores how these people dressed, ate, and furnished their homes. It provides an insight into what these families considered most important, and it showcases peranakan as a distinctive culture. The museum celebrates how this culture was formed through the assimilation and appropriation. Visitors come away with the impression that something wonderful can be formed from many different parts… a message that a small country like Singapore wants to tell about itself and something that has played a key role in there nation-building.

The majority of these traders were Chinese, which is why 75% of Singaporeans are ethnic Chinese. But they also included Indian, Arab, and Portuguese traders who married local Malay women. This history sets Singapore apart from the rest of its neighborhood. Certainly Chinese, Indian, Arab, and Eurasian traders settled in other parts of the Malay peninsula and the Indonesian archipelago, but none formed their own nation with this cultural melting pot and when Malaysia and Indonesia became independent, they did so largely by rejecting these foreign cultures and concentrating on their indigenous populations. The peranakan in these countries faced discrimination.

The message that comes through loud and clear is that Singapore stands apart, that it is distinctive.

But who are the Singaporeans distinctive from?

Well certainly their closest neighbors, Malaysia and Indonesia. The period of decolonialization that kicked off at the end of the Second World War plunged this region into uncertainty and violent, revolutionary struggles. Indonesia gained its independence first in 1949, waging a war against the Dutch who tried to reassert control after 1945. The British held on for another decade before they were forced to accede to an independent Federation of Malaysia in 1957 and provided Singapore with internal self-governance in 1959 with the appointment of Lee Kuan Yew as Singapore’s first prime minister.

In 1963, Singapore joined the Federation of Malaysia but almost immediately race riots broke out over the deep divisions between the ethnically Chinese dominated Singapore and the majority Malay dominated Malaysia. Indonesia also played a role in exasperating these racial divisions as they viewed the Federation of Malaysia as a British neo-colonial plot to undermine Indonesia and allow London to maintain its dominance in the region. Simultaneously, the Chinese Communist Party was supporting communist insurgencies to undermine the Indonesians, the Malaysians, and the British, as well as the independent South Vietnam.

Under these conditions, facing insurgencies from Indonesia and the Communists, Kuala Lumpur expelled Singapore from the Federation in 1965. Singapore became an independent country under the leadership of Lee Kuan Yew and his People’s Action Party (PAP), which has held the overwhelming majority of Singapore’s parliamentary seats ever since. All of this was happening as North Vietnam, with both Soviet and Chinese Communist support, escalated its war to conquer South Vietnam. As we all know, this escalated American involvement in an attempt to prevent a Communist take-over.

It is often believed that the First Cold War was bipolar, that the world between 1947 and 1991 was divided into two opposing blocs. One side was led and controlled by Moscow and the other by Washington. But any cursory examination of what happened in Southeast Asia in the 1960s should erase that perception.

Moscow and Beijing were competing for influence and control of a fractured “Communist” bloc and by the end of the 1960s would be on the verge of going to war with one another, encouraging Beijing to seek a partnership with the United States against their Soviet cousins. Indonesia, under the country’s founder Sukarno, was both anti-Communist AND anti-Western. Jakarta sought to create its own bloc and complete the goal of decolonialization. Kuala Lumpur, Singapore, and London all pursued their own objectives, which resulted in Singapore splitting with Malaysia and the Brits abandoning the region in 1971 with the withdrawal of its military forces “East of Suez.” None of what those countries pursued aligned with what Washington wanted. Washington, under Kennedy, Johnson, and Nixon found itself at odds with its partner in Saigon. Another of its partners, Taipei, waged its own low-level war for influence and control, often at odds with what Washington wanted, while its other two main partners, Tokyo and Seoul pursued their own interests.

The history of this region in the 1960s was anything but a simple story of two opposing blocs.

Two years after Singapore’s independence, the Indonesian leader, Sukarno, was removed from power in a military coup. The new leadership in Jakarta shifted tactics and worked out a détente with Malaysia and Singapore which resulted in the creation of ASEAN (Association of Southeast Asian Nations) in 1967 as all three countries perceived Communist insurgencies as the most important common threat facing them.

But Singapore isn’t just distinctive from its closest neighbors, it is also distinctive from the country where most of its population shares an ethnic identity.

The vast majority of Singaporeans, three-quarters, are ethnically Chinese and while most Singaporeans speak English at home, over a third speak Mandarin, nearly triple those who speak Malay, the third largest language in the country.

The society and political system that the Singaporeans have built for themselves (and are rightly proud of) is starkly different from their neighbors in the PRC. It is true that the Singaporean ruling party, the PAP, have dominated Singaporean politics since the country’s founding, but it operates differently from the Party that dominates the PRC. The PAP embraces its identify as a multi-ethnic political party… the CCP is unapologetically Han chauvinistic and seeks to sinicize the ethnic minorities its rules over. The PAP maintains its power by co-opting groups within the City-State, while the CCP ruthlessly represses any challengers across society, business, religion, or culture.

Singapore and Taiwan, Cousins in Greater China

When I travel, I take special notice of advertisements. I see them as windows to a culture. On my trip to Singapore this time I noticed several advertisements that referred to “Greater China,” particularly for banking and financial services, but also for some consumer products. The term “Greater China” is an unofficial reference to the People’s Republic of China, Hong Kong, Macau and Taiwan. Given its prevalence in Singapore this time, one wonders if the concept of peranakan (the blending of ethnicities) is being replaced by a concept of ethnic solidarity as implied by “Greater China.” The last six years has seen the erosion of distinctive Hong Kong and Macau cultures as the Chinese Communist Party has asserted its dominance through a claim that the CCP rules on behalf of all Chinese no matter the jurisdiction.

This creates an obvious problem for the Taiwanese, who certainly share ethnic and cultural ties to China, but have fashioned their own distinctive culture and society around the blending Chinese and indigenous Taiwanese with the Japanese colonial influences that dominated the island nation during the end of the 19^th and the first half of the 20^th Centuries. While there is a peculiar history due to the Chinese Civil War and how the KMT fled to the island in 1949, that generation has long passed, and Taiwanese today see themselves as something distinct from the China ruled by the CCP.

Singapore finds themselves in a similar position to their Taiwanese cousins. While the diaspora predates the Communist take-over, Singapore’s birth as a nation took place just as Mao waged his Cultural Revolution. Since the 1960s, being Chinese has had a significant “political” meaning as the CCP’s appeal to “overseas Chinese” and its efforts to employ United Front tactics spread across borders. CCP officials are quick to assert that the PRC never interferes in the internal affairs of other countries, everyone with practical experience knows that to be Orwellian doublespeak.

While the immediate target of the CCP’s politicization of “Chineseness” has been Taiwan, Singapore is a target as well. Of the threats facing Singapore, the most serious is Beijing’s efforts to undermine Singapore’s political and cultural independence and stability.

While my Singaporean counterparts avoid saying so explicitly, it is clear that the Singaporean government understands this vulnerability and takes it very seriously, even if it is unwilling to confront the PRC publicly.

The attributes that make Singapore so successful, also make Singapore a threat to the CCP (just as Hong Kong and Taiwan are). A prosperous majority ethnic Chinese community that relies on the rule of law, a high degree of transparency, and holds its officials accountable to the public raises uncomfortable questions for the Chinese Communist Party. If Chinese people in Hong Kong, Taiwan, and Singapore can build prosperous lives without the heavy hand of the Chinese Communist Party, then why can’t the people of Shanghai, Shenzhen, Chengdu, or Shenyang have the same kind of political system?

As the Chinese economy continues to stagnate under the stubborn leadership of Xi Jinping, this dynamic will only get worse for Singapore.

The dilemma for Singapore is that as Singapore becomes more prosperous and a safe haven for wealthy Chinese that seek to elude the reach of the CCP, the more that Singapore becomes a target for CCP domination because the CCP will view the country as a threat vector to its own legitimacy. The logical solution to this problem for the CCP is to gain control over this majority Chinese community and ensure that domestic Chinese citizens don’t ask these kinds of uncomfortable questions.

This means that being distinctively Singaporean, just like being Taiwanese or a Hongkonger, is, in and of itself, a threat to the Chinese Communist Party.

This dynamic certainly explains why the Singaporean Government is so interested in having the Americans “stick around.” Publicly, the Singaporeans are quick to say that they are not interested in “picking a side,” but what they avoid saying out loud is that they have picked a side and they do NOT want to be left alone with Beijing.

Thanks for reading!

Matt

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1. FBI Disrupts Chinese Proxy Tools Used in Mass Hacking of US Agencies and Infrastructure
   Andy Greenberg, WIRED, August 26, 2026

For years, China’s military and intelligence agencies, which carry out hacking campaigns against targets around the globe, have grown increasingly reliant on a vast web of proxy devices that enable and obfuscate their targeting. Now the FBI has named and disrupted one key network of those proxies—and in doing so, revealed just how extensively the hackers who used it reached into American government institutions and US critical infrastructure.

On Wednesday, the Department of Justice announced the takedown of two tools, known as QTRouter and QScan, used by a Chinese state-sponsored hacking group the DOJ identified as QTFY, which is allegedly part of a Chinese government contractor called Nanjing Xinjiuwei Network Technology Company. According to prosecutors and an FBI affidavit used to seize domains that those tools relied on, the company gave its customers access to botnets of hacked internet-of-things (IoT) devices and co-opted commercial proxy services. The company’s customers—allegedly including the Ministry of State Security and the People’s Liberation Army—then used those proxy services as relay points to carry out hacking campaigns stretching back as early as 2018, according to the US government.

The DOJ says the hackers breached a staggering list of US victim agencies, including NASA, the US Senate, the Federal Reserve, the Department of Energy, the Department of Health and Human Services, the National Institutes of Health, and the DOJ itself.

Nanjing Xinjiuwei Network Technology Company could not be immediately reached for comment.

The FBI’s affidavit goes on to list types of US infrastructure and industries targeted via the proxy networks, too, including power companies, telecommunications providers, hospitals, financial institutions, and defense contractors—though it does not confirm which of the targeted entities were successfully breached or to what degree.

“The scale is really giant,” says Damon Rouse, a threat intelligence researcher at Lumen Technology’s Black Lotus Labs, which worked with the FBI and DOJ on the takedown operation. In a blog post about the operation, Black Lotus Labs describes the Nanjing-based company as a kind of “quartermaster” for China’s hacking operations, one of several private contractors that increasingly provide key tools and infrastructure to China’s state-sponsored hackers.

“This is a very long-lasting campaign,” Rouse says, “and this company and these people involved in it have very close ties to the highest levels of the People’s Liberation Army.”

2. China Develops Missile to Target Planes Thousands of Miles Away
   Gerry Doyle, Bloomberg, August 24, 2026

The Chinese military has developed hypersonic glide vehicles that can launch air-to-air weapons, an advancement meant to threaten high-value targets such as command-and-control aircraft thousands of miles away.

The breakthrough is part of a larger effort by China to use its missile arsenal — the world’s largest at more than 3,150 ballistic weapons — for nearly every military task, according to a person with direct knowledge of the matter. Meanwhile, the US is struggling with supplies of crucial air defense missiles and long-range strike weapons after six months of war with Iran.

China also added air-to-air capabilities to some hypersonic cruise missiles and built anti-ship capabilities into several types of missiles, said the person, who asked not to be identified because of the sensitivity of the information.

Such weapons would pose a serious threat to US air operations during a conflict with China. Support aircraft such as tankers, airborne warning-and-control planes and even flying command posts such as the E-4B Nightwatch are meant to operate far from combat.

A hypersonic glide vehicle deployed from a DF-17 missile could travel about 1,500 miles (2,414 kilometers) — just short of the distance from China to the US territory of Guam, a major military site. The DF-27 missile has a maximum range of about 5,000 miles, putting Hawaii in range.

Hypersonic glide vehicles, or HGVs, are warheads that can maneuver in the atmosphere on their way to a target, extending range and complicating interception. No other country is known to operate weapons that combine an HGV with air-to-air missiles.

A report from the US Air Force’s China Aerospace Studies Institute this year said, without providing details, that China’s missile modernization efforts “increasingly prioritize the ability to inflict coordinated, system–level damage across an adversary’s operational architecture.”

To be sure, using what is essentially a ballistic missile to attack a distant aircraft is costly, difficult and risky.

The travel time of a ballistic missile — 20 minutes or more at maximum range — means that targeting information must be extremely precise. That long “kill chain” of getting distant sensor information to the missile makes operations easier to disrupt.

Ballistic missiles also can be mistaken for a nuclear attack. This so-called discrimination problem complicates the weapon’s use, especially during an all-out war, when it may inadvertently provoke a nuclear response.

China appeared to ramp up missile production last year by the most since Xi Jinping became president in 2013, Bloomberg reported in May, mapping out the sector’s finances for the first time.

China’s long-range PL-15 air-to-air missile saw combat last year, when India and Pakistan had a brief conflict. Pakistan said it used the weapons to shoot down several Indian aircraft.

The Pentagon estimates China had at least 3,150 ballistic missiles and 300 ground-launched cruise missiles as of 2024. Those represent increases of 147% and 50%, respectively, from 2015, when the US started disclosing such estimates.

3. China’s Influence Operations Are Targeting the Indo-Pacific’s Smaller Languages
   Osawa Jun, The Diplomat, August 24, 2026

China’s influence operations are expanding across the Indo-Pacific. In Japan, disinformation circulated on social media during the House of Representatives election in February 2026 in what appeared to be a coordinated Chinese influence operation. Posts on X systematically spread memes promoting narratives such as “Prime Minister Takaichi Sanae is a militarist” and “Japan cannot win in a Taiwan contingency.” The Japanese text bore traces of simplified Chinese, some meme images resembled those used in Chinese government affiliated media, and the narratives aligned with Chinese government talking points — all pointing to a coordinated Chinese operation.

Russian influence operations targeting elections have been documented in Western countries since around 2015; in the Indo-Pacific region, Chinese operations targeting elections have also been observed since the 2020s.

Chinese influence operations in the Indo-Pacific have long attracted attention in Taiwan and in English-speaking countries including the United States and Australia. In Taiwan, disinformation attributed to China was disseminated during the 2018 and 2022 local elections, and in the 2024 presidential election, disinformation targeting Democratic Progressive Party (DPP) members who were distancing themselves from China. In the United States, President Donald Trump cited Chinese influence operations targeting the 2020 presidential election at a press conference on July 16, 2026; U.S. intelligence documents released the same day concluded that China had conducted influence operations ahead of the 2020 election to damage public opinion of the Trump administration and undermine Washington’s international reputation. In Australia, China has been conducting influence operations on politics since the mid-2010s, and in the 2025 general election these extended into disinformation in digital spaces.

More recently, Chinese influence operations have spread to new targets. In the Philippines, which is at odds with China over territorial disputes in the South China Sea, security authorities reported that China-supported groups conducted influence operations during the 2025 midterm and local elections, prompting President Ferdinand Marcos Jr to order a detailed investigation. There is growing concern that China may intensify these efforts ahead of the 2028 presidential election to secure a victory for a pro-China candidate. Chinese influence operations have also become increasingly prominent across South Pacific island countries. During the Solomon Islands’ 2024 general election, disinformation circulated claiming the United States was interfering in the vote; since around 2023, allegations that Washington wants to assassinate the pro-China prime minister have been spread repeatedly, suggesting a sustained campaign to foment anti-American sentiment.

Until recently, the digital spaces of smaller languages were protected by language barriers that made it difficult for non-native speakers to post convincingly on social media. Recent advances in generative AI have dismantled that protection, enabling natural-sounding manipulation without proficiency in the local language. Social media posting and sharing, which previously required manual effort, can now be conducted at scale using AI-driven bot accounts. As a result, the threat of foreign influence operations is rising not only in the Indo-Pacific but across all digital spaces that operate in languages beyond the major ones like English and French.

Countering foreign influence operations in digital spaces has become a critical task for any government seeking to protect its democracy. Basic measures — monitoring the state of one’s own digital linguistic environment, building fact-checking systems, and improving media literacy — are necessary but not sufficient. Freezing accounts used by attackers generally requires cooperation from American social media platforms, but American Big Tech, whose revenues can exceed the GDP of smaller countries, tends to ignore requests from those countries. Governments targeted by influence operations must therefore coordinate, amplify one another’s voices, and build the international public opinion needed to press Big Tech into action. In the age of generative AI, that cooperation is no longer optional.

4. AUDIO – The Next China Shock Is Here
   Ezra Klein and Brad Setser, New York Times, August 21, 2026

The biggest economic story in the world right now is China’s growing dominance across advanced manufacturing sector after advanced manufacturing sector — from electric vehicles to batteries to solar panels to software like A.I. and open models, where they’ve become a world leader.

What is happening here is very different than what we call the first China Shock, when China became a big exporter of things that were not that important to advanced economies — things that mattered maybe for particular communities, for many jobs, but weren’t the frontier of economic growth.

But now it’s different. China is very much at the frontier, and they’re dominating it, and that is going to transform geopolitics. It is going to transform the politics, many say of European countries, where China is pushing them out of manufacturing that has been the absolute cornerstone of their economies.

5. Why Criminals Love the Chinese Economy
   Alvin Camba, Foreign Affairs, August 21, 2026

For years, international discussion of China’s economic rise has focused on how it has built a manufacturing and export powerhouse and used industrial policy to support such efforts at a continental scale. But there is another, darker side of China’s dominance: its outsize role in the illicit global economy. China purchases roughly 90 percent of Iran’s sanctioned oil exports, which often arrive relabeled as originating from Malaysia and are paid for with money routed through small banks and shell companies acting as intermediaries. Cryptocurrency brokers in China and Hong Kong help North Korean hackers, such as the notorious Lazarus Group, convert stolen coins into usable cash. And China-based networks support money launderers working with Mexican cartels selling fentanyl, online scam centers in Southeast Asia, and the global wildlife trafficking trade.

Data from organizations and governments tracking illegal activity suggests that the Chinese illicit economy generates nearly $1 trillion in revenue annually, about the size of Switzerland’s GDP. Roughly two-thirds of counterfeit goods seized by customs authorities worldwide originate in China or move through Hong Kong, and the notorious scam compounds that have proliferated in Southeast Asia—many of which are operated by or linked to Chinese criminal networks—have trafficked more than 300,000 people from at least 66 countries into forced labor while generating roughly $40 billion in profits each year.

Beijing has tried to crack down on some of these activities. In the Philippines, China’s Ministry of Public Security canceled the passports of hundreds of Chinese nationals involved in offshore gambling operations there, turning them into fugitives who can be arrested and deported. Since 2023, joint operations between China and Myanmar have led to the arrest of more than 57,000 Chinese nationals suspected of telecom fraud, the closure of dozens of scam compounds along the China-Myanmar border, and the execution of several bosses running these compounds. The United States, too, wants to stop these activities: the Trump administration launched the Scam Center Strike Force to investigate fraud centers in Southeast Asia, and the president signed an executive order directing the government to prioritize cybercrime, including predatory schemes.

Yet none of these actions have significantly curtailed the illicit economy. If anything, it is growing larger. This is in part because these illegal activities are driven by many of the same forces that underpin China’s legal economy. Criminal groups have exploited the core financial and commercial infrastructure that developed in response to China’s strict capital controls and its industrial overcapacity. Beijing’s enforcement, although real, is selective and partial because elements of the illicit economy serve the country’s larger strategic goals, such as sustaining trade with Russia while maintaining distance from the war in Ukraine. What may appear to be a collection of unrelated crimes is intertwined with China’s imbalanced growth model and its foreign policy. As Washington struggles to compete with China, Beijing’s role in the global illicit economy is working against U.S. priorities around the world.

6. Chinese Court Sentences Artist Who Lampooned Mao

   Austin Ramzy, Wall Street Journal, August 25, 2026

Gao Zhen convicted on charges of insulting Chinese heroes in works from early 2000s.

A prominent Chinese artist was convicted on Tuesday and sentenced to three years in prison for insulting Chinese heroes in a series of works in the early 2000s that lampooned Mao Zedong and other leaders, his brother said.

The artist, Gao Zhen, is a U.S. permanent resident who was arrested when he was visiting his studio on the outskirts of Beijing in 2024. Gao, 70 years old, and his brother, Gao Qiang, created works that criticized the excesses of Communist Party rule in China.

While such work was possible in an earlier era in China, under Chinese leader Xi Jinping, who took power in 2012, the room for artistic expression has contracted. The law that Gao was charged under was introduced in 2021, but the works used as evidence against him were created more than 15 years ago.

Gao’s supporters have called his case an attack on speech and an unjust retroactive application of the law.

The police seized more than 100 works when Gao was arrested two years ago. The art he created with his brother examined the Cultural Revolution and the political violence that China endured during Mao’s rule.

The victims of that era include the Gaos’ father, who was detained as a counterrevolutionary and died in custody.

Their most famous works include “The Execution of Christ,” in which a firing squad of Mao’s take aim at Jesus. In another, “Mao’s Guilt,” the late Chinese leader kneels with his hand over his heart, seemingly in a display of penance.

Authoritarianism

7. China’s anti-corruption legal framework is about to extend beyond its borders
   South China Morning Post, August 25, 2026

8. Cash-Strapped Chinese Cities Turn to Fines for Revenue, Study Shows
   Caixin Global, August 25, 2026

9. Bessent’s Iran Threat Hinges on US Willingness to Hit China
   Magdalena Del Valle and Yash Roy, Bloomberg, August 25, 2026

10. China Rejects US Call to Support Economic Sanctions on Iran
    Jim Pollard, Asia Financial, August 25, 2026

11. China ‘Actively Committed’ to Iran Talks as Tensions Rise
    Bloomberg, August 23, 2026

12. Dozens of China and Hong Kong Entities Hit by Bessent’s Iran Sanctions
    Bloomberg, August 25, 2026

13. China denounces ‘economic wars’ as US starts campaign to cut off Iran
    Nikkei Asia, August 25, 2026

14. China warns US it could retaliate over Iran sanctions
    Financial Times, August 25, 2026

15. Ditching Chinese Rare Earths Is Hard. Just Ask Japan.
    Christina Lu, Foreign Policy, August 24, 2026

16. China vows to protect its rights as US readies Iran sanction
    Ethan Wang, Reuters, August 24, 2026

17. China Media Hails Canada’s ‘Chinese-Style’ Tariff Retaliation
    Bloomberg, August 24, 2026

18. Workers in China worry over being replaced as they adapt to the growing impact of AI on jobs
    Associated Press, August 25, 2026

19. China’s top diplomat Wang Yi calls on US to change ‘hostile policy’ on North Korea
    South China Morning Post, August 20, 2026

20. China Pushes Back After Trump Tightens the Screws on Iran

    Alexandra Stevenson, Aaron Krolik, and Keith Bradsher, New York Times, August 25, 2026

21. In China, ‘Moles’ Are Leaking Official Secrets for Profit

    Chun Han Wong, Wall Street Journal, August 9, 2026

Secrets from Chinese leader Xi Jinping’s disciplinary purges keep surfacing online, defying a crackdown that has ensnared millions of people—and highlighting how deeply embedded graft and disloyalty remain within the Communist Party.

With the party detaining tens of thousands of officials each year, an underground market for corruption gossip has emerged on Chinese social media, where shadowy users drop hints on who’s getting purged next—in return for fees and clicks, state media said.

Such tipoffs can help suspects beat charges or evade arrest while enabling outsiders to make well-timed trades—a Chinese twist on concerns in the U.S. about political insiders cashing in on prediction markets such as Kalshi and Polymarket.

Party authorities have voiced alarm about the phenomenon while trying to hunt down leakers. The corruption-probe tipoffs also raise questions about the effectiveness of Xi’s crackdown, which has disciplined more than seven million people for misconduct such as taking bribes, defying policies and divulging secrets since late 2012.

Environmental Harms

22. New installations emerge on islet as China accelerates South China Sea build-up
    Reuters, August 25, 2026

23. Q&A: What does China’s 15th five-year plan for coal mean for climate action?

    Anika Patel, Carbon Brief, August 14, 2026

24. Pacific nations detain Chinese, Indonesian boats for illegal fishing

    The Straits Times, August 21, 2026

25. Chinese Vessel Caught with Banned Shark Fin in Pacific

    China Global South, August 25, 2026

Foreign Interference and Coercion

26. United Front Worker Recommits to Rejuvenation
    Cheryl Yu, Jamestown Foundation, August 19, 2026

27. Why the World’s Hedging Responses to China’s Rare Earth Dominance Have Failed
    Tobias Burgers and Hoang Trung Vu, The Diplomat, August 20, 2026

28. China’s passport warfare targets Taiwan
    Taiwan News, August 17, 2026

29. Taiwan issues indictments over alleged illegal export of AI servers to China
    Ben Blanchard, Reuters, August 24, 2026

30. How China lobbies Italy for green tech dominance
    Decode39, August 20, 2026

31. US targets China’s telecoms grip in Venezuela with new sanctions carve-out
    South China Morning Post, August 25, 2026

32. Nexperia’s China unit pivots to domestic 12-inch wafers in pursuit of ‘100%’ independence
    South China Morning Post, August 24, 2026

Human Rights and Religious Persecution

33. Chinese Artist Sentenced to Three Years in Prison for Mao Sculptures

    Lily Kuo, New York Times, August 25, 2026

A Chinese court on Tuesday sentenced a prominent New York-based artist, Gao Zhen, to three years in prison for making irreverent sculptures of Mao Zedong more than 15 years ago, according to his wife.

The Sanhe City People’s Court in Hebei Province found Mr. Gao guilty of slandering one of the country’s heroes, highlighting the shrinking space for expression under China’s leader, Xi Jinping.

The case of Mr. Gao, who had emigrated to the United States and was detained in Beijing two years ago while visiting family, underlined the opacity of China’s legal system. The 70-year-old artist was tried during a one-day secret hearing in March that his family and U.S. diplomats were barred from attending. He was found guilty and sentenced during Tuesday’s hearing, which two of Mr. Gao’s other brothers were able to attend.

Mr. Gao is the elder of the artistic duo known as the Gao Brothers, who became famous during the early 2000s for their satirical and provocative takes on politically sensitive topics such as the Cultural Revolution, a decade of political turmoil unleashed by Mao, as well as the 1989 Tiananmen Square massacre.

34. Hong Kong Court Convicts Activists Who Organized Tiananmen Vigils

    Austin Ramzy, Wall Street Journal, August 20, 2026

35. Chinese women are falling behind in the office
    The Economist, August 24, 2026

36. Patient Deaths in China Trials Spur U.S. Demand for FDA Scrutiny
    Caixin Global, August 25, 2026

37. Hong Kong convicts two Tiananmen vigil activists of inciting subversion
    France 24, August 21, 2026

Industrial Policies and Economic Espionage

38. Alibaba profit falls 75% after ramping up AI infrastructure spending
    Laurie Chen, Reuters, August 20, 2026

39. US scrutiny deters some Chinese tariff refund claims as others cash in
    Nikkei Asia, August 25, 2026

40. China and Switzerland Conclude Upgraded Free-Trade Deal
    Caixin Global, August 25, 2026

41. China Puts Brave Face on Growth in Rare Defense of Economy
    Bloomberg, August 24, 2026

42. China will struggle to make money from humanoid robots
    The Economist, August 23, 2026

43. China’s $119 Billion Answer to Sagging Investment Is Coming Late
    Bloomberg, August 24, 2026

44. Reiches rätselhafter Schmusekurs mit Peking [Rich, mysterious, cozy relationship with Beijing]
    Markus Becker, Timo Lehmann, Christoph Schult and Gerald Traufetter, Der Spiegel, August 21, 2026

After much hesitation, the German government intends to take a tougher stance against China’s aggressive trade policies. However, it is none other than Economics Minister Reiche who is putting the brakes on – one critic accuses her of “shadow diplomacy”.

45. See How China Weathered the Iran Oil Shock
    Wall Street Journal, August 22, 2026

Cyber and Information Technology

46. US Lead in the AI Race with China Is Rapidly Narrowing

    Luz Ding, Spe Chen, and Hayley Warren, Bloomberg, August 20, 2026

47. Huawei Can’t Shrink Its Chips, So It’s Folding Them
    Jessica Xing, Satvik Pendyala and Ryan Fedasiuk, The National Interest, August 26, 2026

48. Fed, NASA and DOJ among victims of Chinese state-sponsored hacker group: Court documents
    Dan Mangan, CNBC, August 26, 2026

49. Justice Department and FBI Seize Platforms Operated and Used by China State-Sponsored Hackers to Target U.S. Critical Infrastructure
    U.S. Department of Justice, August 26, 2026

50. T-Mobile ‘chopped a cable’ to expel Chinese hackers from its network
    Zack Whittaker, TechCrunch, August 19, 2026

51. AUDIO – China Is Strapping ‘Digital Bombs’ to Civilian Infrastructure—Is the US Ready?
    Brian Barrett, WIRED, August 20, 2026

52. China robot maker Unitree’s post-listing slump sparks bubble fears
    Reuters, August 25, 2026

53. By Opening a Model, a Chinese A.I. Lab May Test the World’s Cybersecurity
    Cade Metz, New York Times, August 25, 2026

54. Nvidia Is Spending $6 Billion to Build a Powerful U.S. Alternative to Chinese AI
    Robbie Whelan, Wall Street Journal, August 22, 2026

55. WAICO and the Struggle to Shape the Global AI Order
    Institute for National Security Studies, August 25, 2026

56. A.I. Is Everywhere in China. See For Yourself.
    New York Times, August 21, 2026

57. The Brains Who Powered China’s Surprising AI Leap
    Raffaele Huang, Wall Street Journal, August 22, 2026

Military and Security Threats

58. China’s Strategic Plan for Space Superiority
    Namrata Goswami, The Diplomat, August 25, 2026

59. America’s Scientific Elite Is Fueling China’s Military Machine
    Newsweek, August 25, 2026

60. China’s Research Espionage Threat Is Hiding in Plain Sight
    Calder Walton, The Cipher Brief, August 21, 2026

61. China Probes Taiwan’s Defenses
    Foundation for Defense of Democracies, August 25, 2026

62. Will other Southeast Asian countries follow Indonesia’s example with joint China drill?
    South China Morning Post, August 21, 2026

63. How to Reshape U.S. Defense Production to Counter China
    Michael C. Horowitz, Council on Foreign Relations, August 24, 2026

64. Taiwan’s security council quietly steps up as architect of China strategy
    Nikkei Asia, August 25, 2026

65. Peace through strength, Taiwan president says on China battle anniversary
    Nikkei Asia, August 25, 2026

66. Taiwan proposes a record $35B defense budget for 2027 as China’s military pressure grows
    Associated Press, August 20, 2026

67. Chinese rocket carrying satellite explodes seconds after launch

    Sylvie Zhuang, CNN, August 11, 2026

68. China to launch a Moon mission that is unlike anything NASA has done
    Richard de Grijs, The Independent, August 21, 2026

69. China abruptly postpones ambitious lunar mission
    Politico, August 23, 2026

70. Landspace aims to refly recovered Zhuque-3 booster within six months
    Andrew Jones, SpaceNews, August 21, 2026

One Belt, One Road Strategy

71. Honduras industrial chief calls for resumption of trade ties with Taiwan
    Taiwan News, August 25, 2026

72. Brazil presidential debate zeroes in on Chinese investment and US tariffs
    South China Morning Post, August 24, 2026

73. China, Indonesia agree to boost military ties, work closer on minerals, energy and tech
    Stanley Widianto, Reuters, August 21, 2026

74. US-China proxy battle at the canal turns into a $3.5bn nightmare for Panama
    BNE IntelliNews, August 25, 2026

75. A Top Trump Ally Turns to China
    Catherine Osborn, Foreign Policy, August 21, 2026

76. The Global South: the 21st century’s great utopia
    Engelsberg Ideas, August 21, 2026

77. Ecuador Courts Chinese Money While Teaming Up with US Military
    Stephan Kueffner, Bloomberg, August 19, 2026

Opinion

78. Why China Loves A.I.

    Alicia P.Q. Wittmeyer, New York Times, August 26, 2026

79. It’s time for Vietnam to fend off China over its new oil discovery
    Nikkei Asia, August 25, 2026

80. Gen Z Doesn’t Fear China, but Also Doesn’t Know China
    Newsweek, August 21, 2026

Greetings from the Lion City!

I apologize for getting this out so late. As we used to say in the Army this was a violation of the 7 P’s (Proper Planning and Preparation Prevents Piss Poor Performance).

The original plan was to get it all done and scheduled to publish before getting on my 20+ hour flight.

Then the plan was to finish it during the first seven-hour flight and hit send during a layover in Germany, but Europe’s new Entry/Exit System (EES) is a disaster. When you enter the EU at an airport, you end up spending the entire layover standing in line to get your passport stamped so you can get in another line to get your passport stamped again so you can leave the EU.

Now the plan is to finish it in my hotel room looking out over the Singapore skyline. If you get to before Monday morning, you will know that the third time is a charm.

I’m here for an annual dialogue on Sino-American relations that the Singaporean government hosts. It’s an honor to be a returning representative for the American side. Our agenda is full and I look forward to hearing what my counterparts have to say on the issues that are central to the tensions between Beijing and Washington.

If you’ve opened any major U.S. newspaper or read the articles in Foreign Affairs or other think tanks, or just lurk on the foreign policy threads of Twitter/X as I sometimes do, you will notice a common meta-narrative.

• America is retreat.

• The Iran War demonstrates that the United States is militarily bankrupt.

• Our national debt hit $40 trillion.

• President Trump just curtailed a major military exercise with South Korea.

• The Trump Administration is implementing a “reverse pivot FROM Asia,” “U.S. strategy has failed,” and we are in a “post-Pivot” world.

• America’s allies are concerned that the U.S. military will abandon Asia to the PRC.

Some of these are facts that are hard to argue with. Our national debt is out of control, and it will require some major changes to handle. The Iran War is burning through munitions, and we have not yet retooled our industrial base to ramp up production… something that should have happened in March 2022, by the way. The President did curtail the major bilateral military exercise with a social media post.

Much of the rest of it are vibes… and the vibes ain’t good right now.

There seems to be a general consensus that we are headed in the wrong direction, and catastrophe is on the horizon. What that catastrophe is depends on the individual commentator, but it spans from the collapse of the U.S. collective security structure in Asia to a PRC blockade or invasion of Taiwan.

I’d like to use this column to provide a different perspective on what’s happening. I don’t want it to come across as too pollyannish. We certainly have some serious problems that we must manage better than we have for the past several years. But I think the predictions of our imminent demise are overblown. I think Kurt Campbell and Rush Doshi tried to address some of this in their recent article, “How Alliances Survive.” I agree with one of their main points: “the threats that gave rise to the alliances have not faded but intensified and converged, as allied perceptions of China and Russia align as never before.” I would take Kurt and Rush’s point even further, the alignment and aggression by Moscow, Beijing, Pyongyang AND Tehran are forcing Washington and its allies to re-orient themselves and adopt new strategies and operational concepts. This alignment of perceptions may not be true for our friends in Ottawa and Seoul, but it is true in many other capitals.

Therefore, I think it is helpful to examine some of these new strategies and operational concepts, do some speculation about how those shifts will change the strategic environment for our adversaries.

Warning: I am going to argue that deterrence is being strengthen not depleted.

However, as they say, the proof will be in the pudding.

Before we dive in, let’s acknowledge something that must change. In 2012, the Obama Administration adopted a defense planning construct that has put the United States in a difficult position. Secretary of Defense Leon Panetta directed that the Defense Department only plan to conduct one major military contingency at a time. Prior to that time, the U.S. military was structured and planned to conduct two simultaneous military contingencies.

One might be excused for thinking in 2012, two years before Putin annexed Crimea and began a war in eastern Ukraine and two years before ISIS seized much of northern Iraq, that perhaps the international environment was benign enough for the United States to assume that only one major military crisis might emerge at a time.

We can no longer make that assumption but the Defense Department (sorry… checks notes… the War Department) still has NOT changed its planning construct for one conflict at a time.

We can all bemoan the Iran War, but let’s face it, the United States has to be prepared to fight simultaneously in at LEAST two, if not three, regions.

Adopting this planning construct would then require the services to build and maintain the force structure to handle more than one conflict simultaneously. We would then budget for and train sufficient air defense, strike, logistics, and other forces so that we aren’t robbing Peter to pay Paul (when Peter is Pacific Command and Paul is Central Command). It does us really no good to say: “we just won’t get involved in a Middle East war,” when obviously our combined adversaries seek to spread our forces too thinly.

The Trump Administration’s solution to this problem has been to demand that allies fill the gaps. But if the President is going to decide to unilaterally start a conflict without consulting with those allies, then it is unreasonable to expect that they will pick up the slack. In each of these regions, the United States has its own vital national interests to protect and we can’t expect allies to fill every gap when we refuse to build a military that is capable of handling the global scope of our vital national interests. Lastly, our adversaries understand the limitations we have place on ourselves, and they are trying to exploit that vulnerability. The best thing for the wealthiest country in the world to do, is to do more, so that we aren’t so thinly stretched.

Will this require greater defense spending? Yes… because we no longer live in a benign international environment. We can’t expect to go back to mid-1990s levels of defense spending when Beijing, Moscow, Tehran, and Pyongyang are teamed up against us.

Moving and changing the pieces on the chessboard

At the level of grand strategy, perhaps the most important change is happening in the realm of trade, economic, and industrial policy. We can debate whether the current Administration is implementing their policies successfully (there is plenty of evidence that it needs improvement), but there has been a significant shift in how the U.S. Government approaches these policy areas. Before 2017, U.S. Administrations from both parties pursued trade policies which granted unilateral free access to U.S. markets (which incentivized outsourcing of manufacturing and more complex supply chains). They pursued economic policies which incentivized financialization and lower costs for consumers. They pursued industrial policies which sought to focus on the most technologically advanced work, while shedding lower value manufacturing and push it to countries with lower labor costs and lower regulatory costs. The Administrations also incentivized an economy built around services as opposed to making goods.

Starting in 2017 and continuing under Biden, Administrations from both parties have undertaken major shifts in how they approach trade, economic, and industrial policy. This shift isn’t done yet, I think a lot of improvement needs to be made, and it isn’t yet clear what all the second and third order effects will be, but the United States is on a different trajectory now. As Washington re-engineers its own economy, there will be significant consequences for both friends and rivals.

In this newsletter, we’ve discussed this shift in the broader economic landscape many times. But this week I’d like to focus on the changes happening at what the military calls the “operational level,” the military concepts, systems and ways of fighting which has such an important impact on how power is exercised in the real world.

A new operational concept is taking shape in the Western Pacific focused on deterring PRC aggression against its neighbors. From a military perspective this new operational concept places relatively more importance on ground forces delivering long-range (or more accurately, intermediate range) fires against PRC ships and aircraft to create conditions which makes it extremely difficult and costly for the PRC to conduct offensive operations against Taiwan, the Philippines or Japan. This does not mean that ground forces are replacing naval and air forces. What is happening is a greater balance between these three domains of the Joint Force because for nearly 50 years ground forces played a relatively minor role.

Since the end of the Vietnam War, the United States relied primarily on air and naval forces to deter Soviet and Chinese aggression in Asia. As the U.S. pulled ground forces out of Vietnam, the Pentagon concentrated them first in Europe to deter a Soviet attack on NATO. Once the Soviet Union collapsed and the threat against NATO eased, the United States shifted the focus of its ground forces to the Middle East. The First Gulf War, the invasion and occupation of Afghanistan, the Iraq War, and then the operations against ISIS all tied down the preponderance of American ground forces. As an Army officer serving between 1995 and 2017, I can tell you that U.S. Central Command was the primary focus of the United States Army and for my brothers and sisters in the Marine Corps, the same held true.

The one exception was Korea where the United States Army maintained the Eighth Army with an Infantry Division and the United States Marine Corps kept III MEF in Okinawa prepared to reinforce the Peninsula. But for Big Army and Big Marine Corps, Korea was a sideshow.

The Taiwan Strait Crisis of 1995-1996 provides probably the best example of the U.S. military’s operational approach to security and deterrence in Asia. When the PRC decided to launch ballistic missiles near Taiwan in anger over the country’s decision to hold democratic elections, President Clinton responded by sending two Aircraft Carrier Strike Groups through the Taiwan Strait. At the time, the PRC not only lacked the capability to counter these two carrier strike groups and the nearly 120 aircraft aboard the two ships, but the PRC also lacked the capability to know that they were there until Washington announced it publicly. This show of force negated PRC threats, but in the aftermath, the PRC’s leader, Jiang Zemin, directed a major military build-up to provide the PRC with the capabilities to not only see U.S. naval and air forces in the region, but to be able to strike them accurately, to ensure that Washington wouldn’t dare intervene in the same way again.

Hu Jintao continued with this program once he became leader in 2003 and by the early 2010s, the PLA fielded capabilities that met Jiang Zemin’s objective. This became known as A2AD or Anti-Access, Area Denial, the PRC’s operational concept for making it too costly for the United States to intervene in a Chinese military operation against Taiwan. The PLA developed a complex and redundant ISR (Intelligence, Surveillance and Reconnaissance) network. The PLA built a massive conventional rocket force of mobile, ground-launched ballistic and cruise missiles that at first could effectively destroy fixed targets like U.S. airfields, ports, and logistics hubs in the region and would later develop the capability to target surface vessels like aircraft carriers and other navy ships. The PRC also built interlocking, long-range air defense systems to force U.S. aircraft to operate farther from the Chinese coast and make it too dangerous to approach Taiwan.

A representative graphic of the PRC’s A2AD

The purpose of the PRC’s A2AD, its operational concept, was to deter the United States from intervening in the PRC’s coercion of Taiwan. The PLA built systems and fielded weapons that could detect and track U.S. ships and high-end aircraft and hold them at risk. The PRC would then present this reality to America’s allies in the region and demand that countries like Japan and the Philippines prevent the United States from operating from their bases. Also the PRC presented this reality to Taipei to bring about Taiwanese capitulation in the face of a PRC checkmate. In short, Beijing would tell Tokyo, Taipei and Manila that the U.S. military couldn’t intervene effectively, so it would be better for them to bow to Beijing’s demands.

The problem with Beijing’s strategy was that it depended on the United States not changing its own operational concept. So long as the United States primarily relied on naval and air forces to deter Beijing, the PLA’s A2AD could reliably counteract them.

But what if the United States no longer planned to fight the way the PRC assumed it would? What would that mean for Beijing’s three-decade investment in A2AD? And what if U.S. allies Japan, the Philippines and Taiwan decided that they wouldn’t just capitulate to CCP demands? What if they started pushing back with their own military build-ups that complimented the new American operational concept?

A2AD with American (and Australian) Characteristics

Ever since the term “A2AD” came into vogue in the early 2010s, I couldn’t help but think of the Australian rock band AC/DC and in particular their song “Thunderstruck.”

I asked ChatGPT to give me a logo for A2AD in the style of AC/DC… I think it turned out well.

Released in September 1990, just weeks after Saddam Hussain invaded Kuwait, the song Thunderstruck is what I imagine playing in the background as USAF F-15Es dropped their ordinance on columns of Iraqi tanks in March of 1991. Given that the First Gulf War had such an important impact on the development of the PLA in the 1990s and 2000s, I think it’s fitting to make it this week’s song as we examine how the U.S. military is conducting its own revolution in military affairs in response to the PRC’s effort to deter the United States.

Instead of going into all the details of how U.S. ground forces are fielding new types of weapons to create dilemmas for the PLA, I recommend you read the issue from September 15, 2024, titled “Behold, the Typhon! Ode to the humble HEMTT.”

If U.S. ground forces are deployed to islands in the First Island Chain with weapons that only range 50-100 kilometers, that isn’t a problem for the PRC. However, if U.S. ground forces occupy the thousands of islands that make up the First Island Chain and they are equipped with weapons that range 1500 or 2000 kilometers… well that is a VERY BIG problem for the PRC.

Under the later scenario, U.S. naval and air forces then gain a lot more flexibility. Rather than having to concentrate to interdict an amphibious invasion of Taiwan, U.S. naval and air forces can be used to provide additional cover for the island outposts or can be used to mass at a time and place of their choosing.

Just as the PRC’s A2AD created difficult dilemmas for the United States, the new operational concept being developed by the United States creates difficult dilemmas for the PRC.

While the intermediate range ballistic and cruise missiles are important, that isn’t the only new weapons systems being developed to fit within this new operational concept. Unmanned surface and subsurface vessels controlled by forces deployed along the First Island Chain threaten to create the kind of problem that the Russian Navy faces in the Black Sea against Ukrainian unmanned systems. Unmanned aircraft and drones operated from these island outposts multiply the challenges for the PRC. The ability to insert sea mines and then overwatch those obstacles with missile and unmanned systems creates even more dilemmas.

In April and May of this year, just weeks before President Trump met with Xi Jinping in Beijing, the U.S. military and its allies rehearsed this operational concept for the first time during Exercise BALIKATAN in the Philippines. For the first time, Japan sent ground troops to participate in the exercise. Both the United States and Japan test fired their intermediate range anti-ship missiles. The U.S. and its allies tested unmanned surface vessels like the ones that Ukrainians use to sink Russian Navy ships.

Whereas a decade ago, the only capability the United States had to strike PLA assets in and around Taiwan was aboard carrier strike groups or from a handful of fixed bases in Japan, the United States is building, deploying and rehearsing the capability to strike PLA assets with things that aren’t tied to aircraft carriers or midair refuelers.

What the United States and its allies are building is a truly combined arms approach to deterrence in the Western Pacific. Also, it is starting to become clear that the defender has significant advantages given these new technologies and how they can be employed.

So, to those who are convinced the United States is in perpetual decline and that we cannot maintain deterrence. I refer them to those closing lines from AC/DC: “Yeah, it’s alright. We’re doing fine.”

Canada is “at war” with the United States… just ask Mark Carney

On Friday night trade negotiations between the United States and Canada broke down largely because Prime Minister Carney refused to accept restrictions on his ability to cut even more deals with Xi Jinping and tie the Canadian economy even closer to the PRC.

Mark Carney on Saturday:

“The U.S. introduced in the last hours, efforts to restrict our ability to have other trade deals. We’re the partner of choice in many respects for countries around the world, and the Americans wanted to restrict that. Unacceptable.”

There is only one country that U.S. trade negotiators have been asking their partners to agree to restrictions on and that is the PRC.

The Trump Administration has been very clear that it doesn’t want its trading partners to enter into trade deals with the PRC that undermines America’s own efforts to derisk from Chinese overcapacity.

The Trump Administration has been very clear that it wants to revitalize industrial capacity in the United States to expand economic prosperity as well as provide for the kind of defense industrial base that the U.S. and its allies (presumably Canada as well) rely on. Washington can’t accomplish that if it’s trading partners serve as transshipment vectors for Beijing. This was also a policy of the Biden Administration, more on that below.

Carney should be honest with his fellow Canadians and name specifically which other country the United States wanted “to restrict [Canada’s] ability to have other trade deals” with. He is intentionally vague because he knows that plenty of normal Canadians think it is reasonable to work with the United States against the PRC (even if a bunch of Liberal Party politicians think the opposite). Carney should be upfront with Canadians that he and his Liberal Party want to decouple Canada from the United States and tie Canada’s fate more closely to the PRC and the Chinese Communist Party.

Perhaps Canadians should ask for a real Foreign Interference Commission, instead of the whitewashed Hogue Commission which buried years of CCP political manipulation of Canada’s Liberal Party.

Carney pretends as if this ask by the United States was a surprise “introduced in the last hours,” but as President Joe Biden used to say: that’s Malarkey!

The U.S. has been trying to persuade its trading partners, particularly allies, for years to derisk from the Chinese economy, this ask has become more strenuous as the PRC has dumped more goods on the global economy to undermine manufacturing everywhere else in the world. Stipulations to block PRC state-owned enterprises were in the original negotiation of USMCA during the first Trump Administration. Over the past two years restricting access for the PRC has been in nearly every trade negotiation the United States has had with other countries (it ain’t a secret). In fact, Carney’s predecessor Justin Trudeau agreed with President Biden to restrict the import of Chinese EVs to Canada… an action that Mark Carney reversed in a bid to curry favor with the Chinese Communist Party, while undermining the U.S.-Canadian-Mexican automobile industry.

I think Christopher Balding put it best on Twitter/X… “Ally with Chinese characteristics”

Perhaps Carney should have some PRC flags behind him the next time he gives a speech like this.

None of this should be a surprise since Carney’s tête-a-tête with Xi Jinping in mid-January (I want it on the record that I’m showing respect to my Canadian friends by using some French). He immediately followed that trip with his now “famous” speech at Davos in which he bemoaned what he called a “rapture, not a transition” in the global system.

There has been a rupture in the global system, it’s called the China shock. Apparently, Carney has never heard of it.

Mark Carney is a creature of 1990s globalization; he is the epitome of Samuel Huntington’s “Davos man.” It has been very hard for homo magnificus to grasp that their utopian dreams have been shredded, but instead of blaming PRC leaders for what they caused, it is much easier to blame Donald Trump. [the political difficulty with blaming the PRC is that those leaders who welcomed the Chinese Communist Party into the proverbial henhouse might be condemned for their mistakes… it is politically safer to pretend that Trump is the cause of every problem]

Now I want to put some things in perspective.

The headlines you are going to see will have you believe that the United States imposed 50% tariffs on all Canadian imports to the United States. This sounds pretty drastic and if you believe that, you will likely be inclined to believe that Mark Carney is justified in whatever retaliation he decides to respond with and that what the United States was asking for, was completely unreasonable.

BUT, if you read the fine print or perhaps you go all the way to paragraph 23 in the New York Times article, you will notice that the tariffs apply to goods that were worth $20 billion out of a total of $382 billion in Canadian exports to the United States last year. That’s tariffs on just 5% of Canada’s exports to the United States.

To listen to Carney’s belligerent speech on Saturday morning, saying that Canada was “at war” with the United States, you might just believe that Washington ordered the Army’s 10^th Mountain Division across the border to seize Toronto. [I don’t advocate doing that, I’m just being sarcastic Canada]

So, while this trade dispute will be portrayed as an American attack on Canada (that is the language Mark Carney uses and it will be amplified by the Administration’s critics in the United States and Europe), what this is really about is that the Canadian Liberal Party does not want to jeopardize their growing alliance with the Chinese Communist Party.

I suspect that Carney’s game plan is this. Pursue deeper and closer economic ties with the PRC even if that undermines the North American industrial base. Then when a Democratic Congress takes over and later when Democratic President takes over, Canada will be in a strong position to demand that every restriction be removed by Washington and that Canada can continue to maintain its own retaliatory measures against the United States for all the harm done by Trump.

For Carney, the long game is to triangulate between Beijing and Washington so that Ottawa can wring concessions from both sides. The fact that strategy will inevitably weaken Canada’s ally and neighbor isn’t a bug for Carney, it is a feature.

Thanks for reading!

Matt

MUST READ

1. VIDEO – Tiananmen Square Massacre: Le Monde Reveals unseen footage of the Chinese regime’s violent repression
   Karim El Hadj, Elisa Bellanger, and Sinead McCausland, Le Monde, August 14, 2026

Art historian Nathalie Trouveroy shared footage with Le Monde from her personal archives of the Tiananmen Square protests, shedding new light on how the Chinese regime violently repressed the student protests in June 1989.

COMMENT – This is a fascinating 17-minute video, dubbed in English… you should watch it. Bravo to Le Monde for finding and broadcasting this!

2. Chinese Government Menaces Uyghur Diaspora
   Human Rights Watch, August 16, 2026

The Chinese government is interrogating Uyghur Australians visiting Xinjiang, pressing them to collect information on Uyghurs in Australia, including Uyghur language schools.

The Chinese government exploits the vulnerability of separated Uyghur families as an opportunity for surveillance and strict monitoring of the Uyghur community in Australia, which has a chilling effect on diaspora activities.

Australia and other governments should respond to Beijing’s intimidation of the Uyghur diaspora with public statements, clear travel advisories, safe reporting channels, criminal investigations, and support for family reunification.

The Chinese government is interrogating Uyghur Australians visiting Xinjiang, pressing them to collect information on Uyghurs in Australia, Human Rights Watch said today as its executive director, Philippe Bolopion, visited Australia.

Chinese authorities have long engaged in transnational repression—human rights abuses committed beyond a country’s borders to curtail dissent—against Uyghurs living abroad and their relatives in Xinjiang, by targeting activists critical of the Chinese government. By pressing visitors to provide information about Uyghur activists, organizations, and language schools in Australia, the authorities are repressing the rights of Uyghurs in Australia to freedom of expression, association, culture, and family life.

“The Chinese government exploits the vulnerability of separated Uyghur families as an opportunity for surveillance and disruption of communities abroad,” said Philippe Bolopion, executive director at Human Rights Watch. “Interrogating Uyghurs visiting Xinjiang and strict monitoring of diaspora activities have a chilling effect emblematic of Beijing’s transnational repression in Australia.”

Human Rights Watch interviewed 11 Uyghur Australian citizens and permanent residents in Sydney, Melbourne, and Adelaide in April and May 2026. They included recent visitors to Xinjiang and Australia-based activists.

Uyghurs in Australia who have been unable to visit their families in Xinjiang said they have no information about relatives there or can communicate with them only under strict official surveillance, with Chinese government officials monitoring their calls.

3. US designates American held by China as wrongfully detained

   Steve Holland and Michael Martina, Reuters, August 20, 2026

The U.S. has designated Myanmar scholar and U.S. citizen Min Zin as wrongfully detained after his arrest by ‌Chinese authorities in June, the State Department said on Thursday, a move that makes securing his release a top U.S. priority.

The designation for Min Zin, who is accused of endangering Chinese national security, comes just weeks before U.S. President Donald Trump is scheduled to welcome Chinese leader Xi Jinping to the White House.

4. Chinese Censorship Is Leaking into Answers from American AI
   Stu Woo, Wall Street Journal, August 12, 2026

Ask a chatbot in China about Chinese politics, and it will either clam up or echo the official Communist Party line.

New studies show a surprising twist: American artificial-intelligence models are unwittingly doing the same—and researchers say AI companies haven’t done much to fix it.

The unexpected censorship comes in part from how AI models are trained. They act as a giant blender, gobbling up mountains of data across the web, including state-controlled media. That leaves the resulting smoothie with a taste of authoritarian propaganda.

“It’s some of the unintended side effects of the training,” said Nicolas Suzor, an Australian law professor and member of Meta Platforms’ independent oversight board. He and other researchers say AI companies can help address the issue with simple tweaks, including greater transparency about where information comes from.

American AI companies say they take steps to ensure neutral responses that protect free speech. Still, the oversight board last month published research that found models from OpenAI, Anthropic, Google and Meta were significantly less likely to criticize repressive governments than governments in freer countries.

5. China Wants to Shape What the World’s A.I. Knows

   David Pierson and Berry Wang, New York Times, August 17, 2026

China is exporting more than A.I. models. It wants its data to influence the world’s chatbots, raising fears that Beijing’s narratives will spread with the technology.

When ChatGPT was still a new technology, researchers in Beijing tested how well it handled Chinese-language questions. Their response to its results was telling.

The chatbot described the former N.B.A. star Yao Ming as the first Chinese woman to play professional basketball in the United States. It confused two classic works of Chinese literature, “Journey to the West” and “Dream of the Red Chamber,” which were written two centuries apart.

The researchers at the Beijing Institute of Technology, who published their findings in 2023, also wrote that ChatGPT generated a large amount of “biased commentary about China” and “would not evade or refuse to answer political questions about China.”

ChatGPT has since been updated many times; it is unclear how the results would differ now. But the examples pointed to a central concern in China’s quest to become an artificial intelligence power: The systems shaping the future are being trained on data sets that are overwhelmingly in English, and reflect what China sees as a Western way of thinking.

That imbalance is also a strategic vulnerability for the Chinese Communist Party because it means Western views are likely to prevail when it comes to issues like human rights and the status of Taiwan, the self-governed island claimed by Beijing, analysts say.

To fix this gap, and to build more powerful A.I. tools, Beijing wants to become a leading supplier of data — the troves of text, images and videos — that train A.I. systems around the world.

Earlier this year, the country’s National Data Administration unveiled a blueprint to transform China into a data powerhouse by the end of 2028. The plan proposed creating “high quality” data sets in more than two dozen strategic fields, including scientific research, industrial manufacturing and autonomous vehicles.

The plan calls on China to share its data sets worldwide. That was reinforced last month when China pledged to share data to help the dozens of developing countries that attended the World Artificial Intelligence Conference in Shanghai build their own A.I. systems. China has also already released huge troves of data curated by government labs and state-owned media, making them available for download around the world.

The goal, analysts say, is twofold: to draw more users into China’s A.I. orbit and to narrow the gap with the United States in access to high-quality training data, which Beijing believes is helping America maintain its lead.

6. China orders entities not to assist EU’s JD.com probe

   Yukun Zhang, Xiuhao Chen, and Liz Lee, Reuters, August 19, 2026

China said on ​Wednesday that a European Union investigation into Chinese ‌e-commerce giant JD.com constituted “improper extraterritorial jurisdiction” and ordered entities not to implement or assist with the probe.

The ​order, issued by the justice ministry, is ​the second time that China has invoked ⁠its regulations countering “unlawful extraterritorial jurisdiction measures”. Introduced in ​April, the regulations expanded Beijing’s economic pressure toolkit amid ​strained ties with trading partners including the EU.

The European Commission opened an investigation in May into JD.com’s $2.5 billion bid for ​German electronics retailer Ceconomy under the Foreign ​Subsidies Regulation, citing concerns that JD.com might have received ‌foreign ⁠subsidies that could distort the bloc’s market.

The EU probe demanded from a Chinese entity “extensive and unnecessary” information from within China, China’s justice ministry said ​in a ​separate statement, ⁠calling the demand “a serious violation of the international rule of law”.

“If ​the EU persists in its unilateral actions, ​China ⁠will resolutely retaliate in accordance with the law,” the ministry said.

COMMENT – Here is a thought… just block the acquisition. The PRC Government has provided you all the proof you need that a PRC firm like JD.com cannot be trusted to follow European laws and regulations.

7. Fidelity International plans to pull out of wholly owned China fund unit, sources say

   Selena Li, Reuters, August 20, 2026

Fidelity International (FIL) plans to ​exit its wholly owned China fund unit, two people familiar with the matter said, marking one of the biggest retreats by a ‌global asset manager from the world’s second-largest economy.

London-headquartered FIL, which manages $1.18 trillion in client assets globally, is weighing a total retreat from its onshore fund unit three years after its launch, according to the two people who spoke on condition of anonymity because the exit plan is not public.

Boston-based Fidelity Investments originally set up ​FIL as its international unit, before spinning it off as an independent business in 1980. Both FIL and Fidelity Investments are chaired by American businesswoman Abigail Johnson.

It remains unclear how FIL plans to restructure or liquidate its 14 China retail fund products, which hold 4.5 billion yuan ($670 million) in assets. That’s well below a target set for 2029, according to a 2024 internal ​document reviewed by Reuters. The firm believed then that the China unit needed at least $14 billion in assets to be profitable.

FIL assets under management peaked one year ​after the unit’s launch at 6 billion yuan, before dropping 25% from there as of the end of June, the latest reports on its China products show.

The Shanghai-based unit employs ‌nearly 100 people, ⁠according to one of the sources.

The China Securities Regulatory Commission told Reuters it has not received any official withdrawal application from FIL.

Beijing has in recent years pledged to open its financial markets further to foreign players by rolling out measures to ease ownership barriers across funds, banks and insurance, simplifying licensing and expanding investment scopes.

OTHER ASSET MANAGERS PULL BACK

Any FIL plan to exit its China fund unit would be subject to change and require regulatory approval. The planned exit would, however, represent one of ​the most prominent retrenchments from China’s $5.9 trillion ​public fund market by a foreign ⁠asset manager over the last decade.

FIL has so far put $218 million into the unit, the largest among all foreign wholly owned fund houses, topping BlackRock’s $215 million, business registration records showed.

Just last month, British rival Schroders became the first foreign manager to exit ​its wholly owned onshore fund unit — which managed $250 million in local assets — offloading its products to Neuberger Berman amid scaling struggles, ​according to announcements from ⁠both firms.

The Schroders move followed earlier pullbacks by other peers, including Legal & General, which halted its China expansion plans, and Vanguard, which closed its local fund sales joint venture and abandoned plans to enter the mutual fund sector.

Any FIL exit from China’s onshore mutual fund market would cap a broader, gradual pullback in China, an economy which lost momentum ⁠at the ​start of the second half of this year on weaker industrial output and consumption.

FIL cut about 500 positions ​at its Dalian technology and operations centre in late 2024 over data concerns, having already cut 16% of the local fund management staff earlier that year amid sluggish growth and cost pressures.

The China fund management business ​has experienced rapid leadership churn since its inception five years ago, cycling through four board chairmen and three chief executives.

COMMENT – For all the talk that the “East is rising and the West is declining,” it doesn’t seem like the world’s largest investment firms agree with the CCP’s propaganda.

When Fidelity decided to enter the China market it set a goal for itself of managing around $14 billion in assets by 2029, today it sits at $670 million.

One wonders whether PRC regulators will let Fidelity actually exit and move its money out? Given the strict capital controls, I wouldn’t be surprised if Fidelity was force to essentially abandon its stranded assets in China.

Authoritarianism

8. Chinese Comic Investigated After Singing a Riff of a Patriotic Song
   Yan Zhuang, New York Times, August 19, 2026

Ad-libbing during a routine is standard for many comedians. But in China, it can land performers in hot water. That was the case for one of the country’s most famous comics, Guo Degang, who is under official investigation for riffing on the lyrics of a famous patriotic song during a show.

Mr. Guo has drawn comparisons to the likes of Ricky Gervais, and has starred in movies and hosted TV shows in China. After a show in Wuhan in July, he was reported to city’s culture and tourism bureau for singing a modified version of the song, which hails the bravery of Chinese soldiers during a historic battle against Japan.

His case highlights the delicate line comedians must tread in a heavily censored creative landscape. The comedy scene provides a rare venue for indirect criticisms about contemporary life in China; but the space for self-expression is becoming increasingly narrow as China’s top leader, Xi Jinping, has made arts and culture a focus for ideological crackdowns.

The bureau launched an investigation into Mr. Guo last week after receiving a complaint, according to The Paper, a popular Shanghai-based state-backed newspaper. The bureau said it was looking into whether he had violated a regulation under which performers must have their sets vetted by officials in advance, the outlet reported.

An official who answered the phone at the Hubei Culture and Tourism Bureau, in the province encompassing Wuhan, confirmed the investigation against Mr. Guo on Tuesday. He described the matter as sensitive, but did not provide more details. A show Mr. Guo was scheduled to perform in the city of Xi’an was postponed, according to a social media post by the theater that was going to host it. Organizers have not announced if it will be rescheduled.

Mr. Guo did not immediately respond to a request for comment.

Mr. Guo, 53, is credited with reviving cross talk, or xiangsheng, a comedy genre that mixes scripted and improvised sketches that originated in the Qing dynasty. In the 2010s, Chinese media lauded him for attracting younger audiences to a genre with an aging fan base.

But improvisation can be at odds with official policy, which requires comics to submit scripts and set lists of their performances for official approval in advance. In recent years, Mr. Xi has stepped up controls on speech that challenges the Communist Party’s narratives around politics and history. The government has also demanded that artists align their creative visions with the Party’s goals and has encouraged comics to promote a nationalist vision.

COMMENT – What a fun country to live in…

9. In China Xi Jinping Pays Tribute to Former Leader Jiang Zemin Architect of the Crackdown on Youth After Tiananmen
   Le Monde, August 19, 2026

President Xi Jinping used the centenary of former Chinese Communist Party leader Jiang Zemin’s birth to praise his toughness after the crackdown on the June 1989 student movement and recall the golden age of China’s economy.

“A man of great prestige” and “unwavering loyalty.” In his 40-minute speech on the morning of Monday, August 17, at the Great Hall of the People in Beijing, Chinese President Xi Jinping, who also heads the Central Military Commission and the Central Committee of the Chinese Communist Party, heaped praise on one of his predecessors. Jiang Zemin came to power on June 24, 1989, just after the bloody suppression of the Tiananmen Square protests. Jiang remained at the top of the Party until November 2002, at the head of the state until March 2003 and led the military until September 2004. He died in 2022 at the age of 96.

In front of thousands of officials and delegates from across China, and seizing the occasion of the centenary of Jiang’s birth, Xi first highlighted Jiang’s major economic contributions: his management of the 1997-1998 Asian financial crisis, his efforts to bring China into the World Trade Organization in 2001 and further propelling the country to the status of the world’s factory amid a period of peak globalization. His term was also marked by the closure of large, unprofitable state-owned enterprises and the emergence of a private real estate market.

COMMENT – Of course, Xi Jinping did not mention the leader that Jiang Zemin replaced in June 1989, Zhao Ziyang because Zhao was removed in a coup d’etat which proceeded the Tiananmen massacre and the CCP prefers to forget that messy bit of history.

10. Xi Jinping will skip UN ahead of Trump Summit
    Phelim Kine, Politico, August 17, 2026

Chinese leader Xi Jinping won’t tack on a side trip to New York City to address the United Nations General Assembly when he’s in the U.S. next month for a meeting with President Donald Trump.

The Chinese leader — who will meet with Trump on Sept. 24 in Washington — has no plans to attend the U.N.’s General Debate beginning Sept. 22 when world leaders convene for a week of speeches and side meetings with U.S. government officials, according to four people familiar with the Chinese leader’s travel itinerary.

Xi will instead limit his presence in the U.S. to his meeting with Trump on Sept. 24.

“Xi is set to fly in likely late on Sept. 23 — he isn’t doing UNGA — and fly out on the 25th,” said one of the people, who, like others, was granted anonymity due to the diplomatic sensitivity of their comments. “He’ll really only have one day of meetings at the White House on the 24th.”

The State Department directed queries to the White House. The White House confirmed in a statement that Xi will visit the White House on Sept. 24 but declined to comment on any other possible activities on the Chinese leader’s schedule while he’s in the U.S.

There had been wide speculation among the Washington diplomatic community that Xi would take the opportunity to attend the assembly to pitch China’s plans for peaceful international development as a counterpoint to the ongoing U.S. war on Iran.

“When the Sept. 24 summit date was initially announced, people pointed out that the Chinese may have suggested that date so he could also go to New York City for UNGA,” a Washington-based EU diplomat said. New York City-based diplomats also noted that Beijing had not sent an advance team to the city, as would be expected ahead of any visit by Xi, the diplomat added.

Neither the Chinese embassy nor the U.S. Mission to the United Nations in New York City responded to requests for comment.

Xi last came to New York to speak at UNGA in 2015 to mark the 70th anniversary of the U.N.’s founding. Xi addressed UNGA via video link at the height of the Covid pandemic in 2021 in which he implicitly referenced the U.S. failure in Afghanistan a month prior as part of a pitch to developing countries for a post-U.S. dominant world order hinged to China’s economic development model.

11. China tells companies not to help with EU probe into JD.com: Beijing’s move mirrors its response to a similar EU investigation in spring

    Maximilian Henning, Euractiv, August 19, 2026

China’s justice ministry on Wednesday ordered companies and individuals not to assist an EU investigation into Chinese ecommerce giant JD.com.

The move escalates a growing clash with Brussels over its scrutiny of Chinese state subsidies.

In May, the European Commission opened a probe into the company, under the Foreign Subsidies Regulation, over concerns that state support gave JD.com an unfair advantage in the EU single market.

EU enforcers are specifically looking into whether these possible subsidies strengthened JD.com’s bid to acquire CECONOMY, a German home electronics retailer.

On Wednesday, the Chinese justice ministry struck back, saying it and other government bodies, including the commerce ministry, had found the EU probe to constitute “improper extraterritorial jurisdiction measures”.

It ordered organisations and individuals not to help the EU in implementing these measures.

The Commission did not immediately reply to Euractiv’s request for comment on the Chinese reaction.

This week’s step mirrors a similar pushback against a separate investigation in May.

COMMENT – How can the European Union remain “coupled” to the PRC economy when the Chinese Justice Ministry prohibits companies and individuals from participating in an investigation by European authorities? This was the question that Brussels should have been asking themselves months (years) ago when this kind of behavior was predicted, but now it demands some sort of response by the Europeans… beyond simply more dialogues.

12. China slows exports of key optical, aerospace metals to Taiwan

    Cheng Ting-fang and Lauly Li, Nikkei Asia, August 20, 2026

China is restricting or delaying exports of key aerospace and optical materials to Taiwan, creating painful supply chain bottlenecks for industries in the key Asian tech economy, Nikkei Asia has learned.

Some optical technology manufacturers have experienced significant delays and hurdles in obtaining materials from Chinese suppliers due to prolonged customs checks since last year, sources with direct knowledge of the matter told Nikkei Asia.

“It’s an industrywide issue. Many of my peers have encountered the same problem, and it could significantly extend lead times across our business,” one executive in the optical industry said, requesting anonymity for fear of retaliation from Beijing.

The executive said exports of germanium- and quartz-based materials have faced difficulties clearing Chinese customs.

Germanium is a critical material for infrared lenses used in thermal imaging and other defense and industrial applications. It is also one of the key materials used in fiber optics and photonics. Quartz, meanwhile, is indispensable for optical components, semiconductor manufacturing and other tech applications. China is a dominant global supplier of such materials and has previously leveraged its grip on these supplies in geopolitical spats.

“We have been told that some of our Chinese suppliers have been summoned by the authorities and questioned about their customers and shipments,” said the person with direct knowledge of the matter. “We have already lost some orders because longer lead times for certain materials mean we can’t meet our customers’ delivery schedules.”

An executive with a chip equipment maker told Nikkei Asia that the lead time for his company’s product has been prolonged for months because China’s curb on quartz has affected overall production.

“The quality and precision for quartz is very strict for the chip industry, and currently we don’t have an alternative source from China,” the executive said.

Aerospace industries have encountered similar challenges, with supplies of some permanent magnets from China becoming a bottleneck, sources said. Neodymium permanent magnets in particular are critical for building motors, including those used in advanced robotics.

“We have found that key permanent magnets essential for making motors have faced some disruptions because of Chinese export controls, and it’s not that easy to find cost-effective alternatives in other places,” an executive with an aerospace supplier told Nikkei Asia.

Beijing has a history of using export controls on critical materials and metals to exert pressure on trading partners with which it has disputes. This has led many countries, including Japan and the U.S., to seek ways to reduce their dependence on China for such supplies.

COMMENT – Further decoupling of the Taiwanese and Chinese economies. Thanks Beijing for showing folks you can’t be a trusted economic partner.

13. China Axing Microsoft Windows from State Agencies Ahead of Plan
    Bloomberg, August 18, 2026

14. Zhu Rongji, A Complex Leader with a Complex Legacy
    Yasheng Huang, Yasheng Huang, August 13, 2026

Zhu Rongji, who has just passed away, is being remembered with a lot of nostalgia. I share that nostalgia. I greatly admire and miss his plain-talking, direct, no-nonsense style, a breath of fresh air in the often stultifying and vague rhetoric of the official speak. I am also nostalgic for an era when China sought to globalize its economy, had a working and pragmatic relationship with the West, eased cross-strait tensions with Taiwan. There is a lot to miss about him and Jiang Zemin.

This nostalgia is understandable, but is not a right way to assess a leader, in part because a successor’s performance is partially a function of the performance of his predecessor. To make this point concrete, to those who are not happy with the current policy direction in China, I ask, “Who selected Xi Jinping to be the party secretary?” We do not know what really happened, but a widely accepted view is that Jiang advocated Xi to succeed Hu Jintao. To those who complain about the statist direction in China today, one could make a reasonable argument that Zhu was instrumental in creating the statist policy machinery of the Chinese state today.

The correct way to use a successor to judge his predecessor is to look at how the successor changed the policy direction. What a successor moves quickly to redirect the policy direction tells you what his predecessor did, either right or wrong. Donald Trump’s first-term tariffs on China were, whatever one makes of them, a verdict on the China policy of the Obama years before him. His second-term crackdown on immigration was a statement about what had happened at the southern border under Biden. Xi pursued an anti-corruption campaign because his predecessors allowed corruption to fester. Successors reveal predecessors that way—an urgent policy orientation is evidence on what happened under the previous administration.

COMMENT – Really enjoy Yasheng’s Substack, you should subscribe.

15. At Ex-Premier Zhu Rongji’s Funeral, China’s Past Shadows Its Present
    Yan Zhuang, New York Times, August 18, 2026

16. China Mourns Former Premier Zhu—But on the Communist Party’s Terms
    Lingling Wei, Wall Street Journal, August 18, 2026

Xi Jinping claims Zhu Rongji’s legacy of economic opening while suppressing memories of a more candid, less tightly controlled era.

17. Zhu Rongji: A Reformer Who Centralized More Power in the Chinese State
    Victor Shih, The Wire China, August 15, 2026

The former Chinese premier’s willingness to communicate made him popular with foreign leaders, but his reforms mainly helped to strengthen Beijing’s control.

t a pivotal 1993 meeting with provincial officials on the eve of China’s fiscal centralization, the then relatively new vice premier in charge of fiscal affairs, Zhu Rongji, stated “the market economy is one of order and legality. It is not whatever one wishes it to be, and it definitely is not one where an official in charge of an area can do as he wishes. The market economy must be constrained by the law, regulations, and administrative discipline and be subject to supervision by the party and the people.”

Such words typified Zhu, who passed away on August 12th at the age of 97, having served as Premier of China from 1998 to 2003. During his terms as both vice premier and premier of China, he brought about enormous changes to China’s economy. Yet, reflecting now on his main achievements more than two decades after he stepped down from power, we can see that the foundations he laid during his administration did not lead to a persistent unleashing of market forces in more areas of the Chinese economy. Instead, his policies provided the basis for a highly centralized state, with ample fiscal and financial resources to pursue policies favored by the Party leadership.

Moreover, Zhu’s generation of leaders, who came of age in the era of globalization, saw frank communication with the outside world as a natural and desirable practice for Chinese leaders. This practice is no longer favored in Beijing, but is one that should be of greater importance for a China that is on the cusp of global leadership.

Zhu’s reputation as a reformer was cemented when he led China’s effort to join the WTO. Internally, Zhu pushed for unusually extensive market-opening commitments — lower tariffs, greater access for foreign firms, and the application of multilateral trade rules — in exchange for something enormously valuable: secure access for China to the global trading system, and an external mechanism for forcing domestic reform.

COMMENT – I admire the scholarship and analysis of Professor Victor Shih. The first time I met him was more than a decade ago at UC San Diego. His book, Coalitions of the Weak: Elite Politics in China from Mao’s Stratagem to the Rise of Xi is excellent and has shaped my thinking on elite politics inside the CCP.

I was really disappointed to learn that he was forced out of his position as the director of the 21^st Century China Center at the University of California, San Diego over the summer. He had taken over from Susan Shirk in July 2023 and from my impression had done a great job leading the center and organizing its annual “China Forums”, one held in San Diego and one in Washington. The forums typically include senior U.S. administration officials and former officials, along with academics and business leaders to discuss U.S. policy on China and hob-nob with the Center’s donors.

My guess is that Victor wasn’t enough of a CCP cheerleader for the folks who donate to the Center and seek to influence the Center’s role in shaping U.S. policy on China.

One example of seeking to influence the Center’s work is this “major gift” by Alibaba’s Joe Tsai in March 2021. I haven’t been able to determine the dollar amount Tsai gifted to the 21^st Century China Center, but UC San Diego admitted it was “the largest gift ever received by the School of Global Policy and Strategy” back in August 2021.

I wonder if that “major gift” exceeded $250,000?

Wouldn’t it be awesome if public institutions like UC San Diego had to be transparent about its funding from foreign donors, particularly ones that are closely tied to the Chinese Communist Party?

I seem to remember that there is a federal law out there requiring that kind of transparency… (perhaps have a look at Section 117 of the Higher Education Act of 1965).

That same year, Tsai also donated a separate $220 million to a collaboration of six institutions which included the University of California, San Diego as well.

Or take a look at the make-up of the Center’s “China Leadership Board,” I wonder if members have also made sizeable gifts to the Center and whether those donations fall under the Section 117 disclosure requirement.

18. Treating Hong Kong as Mainland China: Legal, Digital, and Compliance Risks for Multinationals
    Pamir Consulting, August 18, 2026

19. Communist Confession Rituals Return in Hong Kong
    Gladys Kwok, Bitter Winter, August 13, 2026

20. Why China’s Elites Still Want to Leave
    Yaqiu Wang, Foreign Policy, August 7, 2026

21. Chinese Tycoon Who Symbolized Property Bust Is Sentenced to Life in Prison

    Jiahui Huang, Wall Street Journal, August 20, 2026

Court finds Evergrande founder, a Harvard donor, responsible for large-scale fraud to hide debts.

Hui Ka Yan was once one of the world’s richest men, a property tycoon who used his company’s billions to buy a soccer club and fund medical research at Harvard University.

On Thursday, a court in China told Hui that he would spend the rest of his life in prison after the nation’s property bust led to the collapse of his China Evergrande Group.

The court in Shenzhen found Hui, 67, and Evergrande entities carried out sustained and large-scale financial fraud between 2016 and 2021 to inflate assets and hide liabilities, the state-run Xinhua News Agency said.

Those were the years when Hui was promising to build more than a million housing units across China, while the group he founded in 1996 amassed liabilities that at one point topped the equivalent of $300 billion.

Hui, who pleaded guilty to the charges in April, was ordered to forfeit all of his personal assets. Evergrande and its flagship property unit were collectively fined the equivalent of more than $2 billion, Xinhua said. The court said authorities would continue seeking to recover Hui’s illegal gains.

Evergrande’s growth machine was fueled by a simple cycle: borrow, buy land, presell apartments and borrow again. For years, rising home prices and seemingly endless demand in China made the business model look unassailable.

22. China’s super-rich ‘in shock’ and hunting for cash as Beijing issues surprise tax on offshore trusts
    Anniek Bao, Lee Ying Shan, CNBC, August 5, 2026

The new rules impose a 20% tax at nearly every stage of a trust’s life, and give families until Oct. 21 to declare and pay tax owed on assets moved into trusts since the start of 2023.

COMMENT – Damn and billionaires in California think they have it rough with a 5% tax.

Environmental Harms

23. Q&A: What Does China’s 15th Five-Year Plan for Coal Mean for Climate Action?
    CleanTechnica, August 18, 2026

24. China Refuses to Sign Agreement to Combat Illegal Fishing
    Laura Solano, Diálogo Américas, August 11, 2026

25. Illegal Chinese Fishing: Africa Must Stop Taking the Bait
    Mustapha Bature Sallama, Modern Ghana, August 18, 2026

China has the world’s largest deep-sea fishing fleet. In several African countries, its vessels are regularly accused of engaging in illegal, unreported, and unregulated (IUU) fishing, in violation of national laws and international agreements.

The methods denounced are well known:

• Fishing without a license or beyond authorized quotas;

• Turning off AIS transponders to evade surveillance;

• Undeclared catches;

• Use of destructive techniques such as bottom trawling.

For West Africa, where millions of people depend on small-scale fishing for their livelihoods, the cost is enormous: nearly $9.4 billion in losses each year, not to mention the accelerated depletion of fish stocks.

The Refusal to Be Transparent

In June 2026, Beijing refused to sign the Mombasa Declaration, an international agreement launched at the 11th Our Ocean Conference in Kenya and aimed at strengthening the fight against illegal fishing through greater transparency regarding licenses, vessel owners, and catches. Sixteen countries including seven African nations: Cameroon, the Gambia, Ghana, Guinea, Liberia, the Republic of the Congo and Somalia adopted the declaration.

This refusal comes as several African countries have chosen to join the initiative. This decision is a blatant admission by China regarding the illegal activities of its fleet. While private companies sometimes act without their country’s consent, in this case, it is the Chinese government itself that is refusing to sign the declaration, demonstrating that it is aware of and covering up the activities of its companies.

COMMENT – This is the same 11^th Our Ocean Conference where the PRC (and its accomplice, the American non-profit World Resources Institute (WRI)) managed to expel Taiwan from participating in this year’s conference… perhaps the Our Ocean Conference excluded the wrong “China.”

I covered the WRI’s “profile in cowardice” in the July 12^th issue of this newsletter, “Born to be Alive”… article #34.

Foreign Interference and Coercion

26. Chinese funding for pro-Palestinian marches to be investigated
    Nick Gutteridge, The Telegraph, August 14, 2026

Home Office launches inquiry into claims that Beijing is using UK protest groups to ‘sow division and chaos’.

The Home Office is investigating claims that China is funding pro-Palestinian marches, The Telegraph can reveal.

On Thursday, The Telegraph revealed a US investigation into the British activities of Code Pink, a far-Left feminist protest group, that has organised marches in Whitehall and protests at military bases.

Code Pink has organised protests in the UK against Britain’s involvement in “the genocide in Gaza”, encouraged its activists to demonstrate outside RAF bases, and issued statements claiming that Britain’s leaders have been “bought by Zionism”.

It is understood that the Home Office is “looking into the issues raised” as part of its remit to counter foreign interference in Britain.

A Government spokesman said: “The first duty of government is to protect our national security. That is why we have brought forward some of the most robust measures to defend our country and democracy from state-backed threats.

“Protecting the UK’s democracy and democratic institutions is fundamental to our national security, and we will continue to take whatever action is necessary to safeguard them.”

The US investigation focuses on Neville Roy Singham, a tech tycoon who has given millions of dollars to Code Pink, which is run by his wife, Jodie Evans.

The congressional ways and means committee and the US department of justice are both examining claims that Mr Singham used his money to spread pro-China propaganda and advance the interests of Beijing.

The committee’s lines of inquiry include £250,000 in alleged payments to a company linked with Code Pink in the UK, from businesses connected to Mr Singham.

COMMENT – Singham has been doing these things in the United States for years, but it has been largely ignored by U.S. media outlets… I wonder now that the UK’s Labour Government is taking this kind of political interference seriously, if it will receive the attention it deserves in the United States.

27. Electric Vehicle Exec Identified as CCP Member Has Given $450K to Democrats This Campaign Season—Including $71K for Senate Nominees Juliana Stratton, Roy Cooper
    Thomas Catenacci, Free Beacon, August 6, 2026

28. China Wants Trump to Roll Out the Red Carpet—and Roll Over
    Didi Kirsten Tatlow, Newsweek, August 17, 2026

29. China Calls New Zealand a Pawn After Espionage Accusation
    Bloomberg, August 14, 2026

30. Inside Keating’s private push to steer Albanese on China and Trump
    James Curren, Politico, August 16, 2026

Australian Prime Minister Anthony Albanese listens not only to his advisers, or Foreign Minister Penny Wong, when it comes to Australian foreign policy. Increasingly, he makes a call to former Labor Prime Minister Paul Keating.

This is one of the intriguing revelations in my new book, “Grand Ambition: Paul Keating’s Global Vision for Australia.”

It shows that after Labor’s 2025 landslide reelection, a more confident Albanese wanted to hear more of what the former prime minister had to say.

That’s not only because Keating’s critique of the government in its first term had stung — he described AUKUS support as the worst Labor government foreign policy decision in a century — but because Albanese had upcoming meetings with China’s President Xi Jinping and U.S. President Donald Trump.

How to handle these two great powers? Albanese wanted another view beyond what the Department of Prime Minister and Cabinet was sending to his office. The need became more acute as the second Trump administration, which was applying the blow torch to its European allies to increase defense spending, put pressure on Australia to do the same with respect to China.

Keating bristled, telling Albanese privately that he was now “sitting between two sharks,” those being “the China threat brigade on the one hand and the Americans on the other.”

Before Albanese headed to China for a six-day visit in July 2025, Keating met for several hours with him at Kirribilli House, the prime minister’s Sydney residence.

COMMENT – Paul Keating is the Australian Gerhard Schröder.

Here is Paul Keating in a television interview two years ago… during the Biden Administration… saying that Taiwan’s people “are sitting on Chinese real estate. It’s a part of China.”

Other great lines are this about Australian participation in AUKUS: “If we didn’t have an aggressive ally, like the United States… aggressive to others in the region… there would be nobody attacking us right now. We are better left alone, than we are being “protected” by an aggressive power like the United States.” [Again, this is August 2024]

“That strategic power [China] has no strategic designs on Australia. What this is all about is the Chinese laying claim to Taiwan and the Americans are going to say: no, no we’re going to keep these Taiwanese people protected, even though they are sitting on Chinese real estate.”

The interviewer was clearly taken aback by this assertion of Chinese sovereignty over Taiwan and interrupted him with: “Let me just stop there on the Chinese real estate, what about Taiwanese real estate and the wishes of the Taiwanese people?”

Keating stares at her dismissively and responds: “Well look, the Chinese real estate is a part of China. Let me make the analogy, it would be like the Chinese saying to us we think that Tasmania has been poorly treated for many years, we want to keep the sea route down the east coast of Australia, through Bass Strait and across to Perth and the Indian Ocean open. So, we are going to put some frigates there and we will economically support the Tasmanian people should they wish to cede from Australia.”

Well… interestingly enough, that is what the PRC did in February and March 2025 when Task Group 107, a PLAN cruiser (the Zunyi), a frigate (the Hengyang) and a replenishment vessel (the Weishanhu) circumnavigated Australia.

This is an addled old man, and Prime Minister Albanese is too busy to listen to folks like him.

31. Why Australia’s Getting Tough on China Again
    James Curran, Foreign Policy, August 17, 2026

Since coming to office in 2022, the Australian Labor Party government of Prime Minister Anthony Albanese has championed the virtues of a “stabilized” relationship with President Xi Jinping’s China. The fruits of this approach—which dropped a mantra of “pushing back” against Beijing and instead deployed the careful rhetoric of “constructive” engagement—have been obvious. Under the previous, conservative government of Scott Morrison, China’s unreasonable economic coercion of Australia had resulted in punitive sanctions on Australian exports to China of wine, barley, lobster, and coal, among other products. In December 2024, this came to an end when China lifted its final Australian embargo, on lobsters.

Yet through this period of high diplomatic tension, the two countries’ economic complementarity continued, especially in the resources sector. Australia’s iron ore trade with China has largely underwritten its national prosperity for the past three decades, and neither Beijing or Canberra’s hawks dared use it as leverage.

32. Beijing’s bid for Belfast
    UK-China Transparency, UK-China Transparency, August 14, 2026

The Chinese government appears to be upping its public diplomacy in the nation, under limited scrutiny and in the context of an ongoing China knowledge deficit in government.

Key points:

• Beijing remains committed to subnational diplomacy in the UK, which may be under-scrutinised by the media, researchers and some parts of Whitehall

• One initiative promoted by the Chinese consulate in Belfast sees Chinese Communist Party propaganda books given to schools, for example. One school provided UKCT with a list of books (see below), however, the school informed UKCT that the collection had been put into storage.

• Interactions with Northern Irish police also come in the context of very limited practical cooperation from the Chinese side on Chinese organised crime in the UK, and security sensitivities

A recent, first-ever “Open Day” held by the Chinese consulate in Belfast has drawn attention to intensifying subnational diplomacy between China and Britain’s constituent regions and nations.

Beijing is making a concerted effort to strengthen diplomatic and economic ties with Northern Ireland. With legislative power over sectors which feature prominently on China’s foreign agenda, such as economic development and education, Belfast is a high-value target for Chinese subnational diplomacy. Northern Ireland may also provide Beijing with an entry point into EU markets. Naturally, the historically sensitive security and sovereignty situation in Northern Ireland may also be of interest to the Chinese state.

While China’s efforts in Northern Ireland have not gone unnoticed, media reporting tends to focus on individual incidents without piecing together the broader trend. By assessing the activities of China’s Consulate-General in Belfast, and drawing upon UK and Chinese media sources, UKCT has sought to provide an overview of Beijing’s diplomatic activity in the nation.

33. Lining Up the Pro-Beijing Press
    David Bandurski, Lingua Sinica, Lingua Sinica, August 13, 2026

34. Chinese Nationals Ran a Fraud Machine Out of Florida Mailboxes, Draining the Savings of Elderly Americans in Seventeen States: DOJ
    Sam Cooper, The Bureau, August 5, 2026

35. US charges 11 over sham marriages involving Chinese nationals and American soldiers
    Teresa Elena Frontado, South China Morning Post, August 12, 2026

Human Rights and Religious Persecution

36. China’s Silent Anniversary: How the Cultural Revolution’s Sixtieth Year Was Erased
    Hu Zimo, Bitter Winter, August 17, 2026

37. In China Treatment for Mental Health Problems Is a Luxury
    The Economist, August 13, 2026

38. Case of Activist Forcibly Disappeared Passes Grim Milestone
    Chinese Human Rights Defenders, August 12, 2026

39. CCP Scholar: China’s New Ethnic Unity Law Moves from Administration to Assimilation
    Hu Zimo, Bitter Winter, August 11, 2026

40. China’s Ethnic Unity Law: Uyghurs in the Diaspora Already See Its Effects
    Ruth Ingram, Bitter Winter, August 6, 2026

41. Taiwan teacher held in China for 80 days
    Taiwan News, August 8, 2026

Industrial Policies and Economic Espionage

42. However you measure it, China’s job market is weak

    The Economist, August 20, 2026

43. China’s New Laws Are Ensnaring Western Companies
    Maria Shagina, Foreign Policy, August 17, 2026

44. Mexico Weighs Tougher Trade Rules for China as US Talks Grind on
    Bloomberg, August 18, 2026

45. In a Faltering Chinese Economy, Working-Class Stories Strike a Chord
    Yan Zhuang, New York Times, August 19, 2026

46. Chinese carmaker Chery to open UK R&D centre
    Megan Snaith, Financial Times, August 19, 2026

47. China Aiming for Global Dominance of Mass Food Production
    Ambrose Evans-Pritchard, The Telegraph, August 18, 2026

China is about to do to the global supply chains for grains, livestock and food products what it has already done to the world’s energy and transport systems.

The country is pursuing what amounts to world dominance in the mass manufacture of protein, launching a breakneck plan to end its strategic dependence on food imports and insure its people against the long-term famine risks of climate change.

The Politburo’s 15th five-year plan is marshalling all levers of finance and state power to overcome land and water limits, placing food security on a par with defence as an existential imperative for national survival.

Analysts at Systemiq say the Communist Party is activating the same playbook already used for solar power, electric vehicles and batteries to reach 70pc or more of the world market from a standing start in less than 15 years – a pattern also visible in its push for semiconductors, nuclear fusion, quantum computing and pharma.

It is developing genetically modified seeds and crops, but it is also targeting the fast-growing industries of cellular agriculture, lab-grown proteins and food from precision fermentation: Frankenfoods to some, the saviour of humanity to others.

48. Chinas Batteriemacht kostet Europas Autoindustrie Milliarden [China’s battery power is overrunning the German automotive industry]
    Stefan Hajek, Handelsblatt, August 19, 2026 – Original in German

Large parts of the profitable automotive business are threatened with migrating to China in the coming years, partly because domestic automakers have been negligent regarding batteries.

COMMENT – This is completely in the power of German political leaders to stop… the destruction of the German automobile industry is NOT inevitable, it just requires standing up to CCP coercion.

49. Price of niche rare earth jumps on fears of renewed Chinese export controls
    Financial Times, August 19, 2026

50. Chinese carmakers now sell one EV abroad for every two at home
    Indranil Ghosh, Rest of World, August 18, 2026

51. A Glum China Pines for the 1990s
    The Economist, August 17, 2026

52. Beijing intervention spooks investors in China-linked private equity deals
    Financial Times, August 18, 2026

53. China’s Economic Activity Weakened in July
    Wall Street Journal, August 18, 2026

54. U.S.-China Trade Relations
    Karen Sutter, Congressional Research Service, August 18, 2026

55. China’s Economy Extends Slowdown by Weakening Across the Board
    Bloomberg, August 17, 2026

56. Beijing is failing to meet the challenge of weak domestic demand
    MERICS, August 6, 2026

57. US-China ‘Board of Investment’ stalls before expected Trump-Xi meeting
    Nayan Seth, South China Morning Post, August 12, 2026

Cyber and Information Technology

58. China tightens border crossings after Meta’s play for AI startup Manus
    Nikkei Asia, August 18, 2026

59. China’s robot bodies and AI brains take center stage at Beijing expos
    Nikkei Asia, August 19, 2026

60. As Xi’s US visit approaches, basic details of planned AI talks remain uncertain
    Khushboo Razdan, South China Morning Post, August 19, 2026

61. Unitree IPO Could Mark New Era for China’s Robotics Sector
    Wall Street Journal, August 19, 2026

62. KI-Tools: Warum Chinas KI-Erfolge für Europa zur Gefahr werden können [Why China’s AI successes could become a danger for Europe]
    Sabine Gusbeth, Handelsblatt, July 29, 2026 – Original in German

The People’s Republic is working with all its might to build a future ecosystem for artificial intelligence. Europe is watching. New dependencies are looming.

COMMENT – I think we can be pretty certain that Europe is really only going to have three choices when it comes to AI: pick the American stack; pick the Chinese stack; or ignore the technological revolution and hope for the best.

63. The U.S. banned Nvidia’s best chips from going to China. Now it’s trying to close a crucial loophole
    Kai Nicol-Schwarz, CNBC, August 19, 2026

64. 5Y Capital invests Chinese state capital into American Biotech
    Vermilion China, August 18, 2026

65. Hanging a Banner for Chinese AI
    David Bandurski, Lingua Sinica, August 18, 2026

66. The People’s Republic of Data
    U.S.-China Economic and Security Review Commission, August 18, 2026

67. Google plans to stop making Pixel products in China in 2027
    Laula Li, Nikkei Asia, August 18, 2026

68. Why AI Optimism Is So Much Higher in China Than the US
    Bloomberg, August 14, 2026

69. Applied Materials projects China revenue to grow in 2026 despite US curbs
    Yifan Yu, Nikkei Asia, August 13, 2026

Applied Materials, a top U.S. supplier of chipmaking equipment, reported record earnings Thursday and raised revenue expectations for 2026 on strong demand for semiconductors needed for an AI infrastructure buildout.

For the three months ended July 26, Applied Materials brought in a quarterly record $9.12 billion in total revenue, up 25% on the year.

It recorded $2.5 billion revenue in China during the period, representing 28% of total sales and the company’s biggest market. China revenue slightly dipped from $2.6 billion last year amid tightening U.S. export restrictions on advanced chipmaking equipment.

Despite the curbs, Applied Materials CFO Brice Hill said at an earnings call that the company still expects China revenue to increase in 2026 driven by “investments in 28-nanometer foundry logic, where Applied has strong technology differentiation and share.”

Hill said revenue growth in China is expected to continue into 2027, especially in the Internet of Things, communications, automotive, power, and sensors sectors.

Meanwhile, Applied Materials guided August-October revenue to come in at $10.25 billion, plus or minus $500 million as demand for AI chips accelerates.

COMMENT – Obviously, if the Department of Commerce and the wider Trump Administration was serious about winning the AI race, bolstering the U.S. semiconductor industry, and revitalizing manufacturing in the United States, then it would be blocking companies like Applied Materials from selling the PRC the tools they need to undermine us.

70. Apple Trains Its Own AI Model China Market with Alibaba’s Support Sources Say
    Reuters, August 17, 2026

71. Beijing Sees Tech as the Answer to Weak Domestic Demand
    Trivium China, August 11, 2026

72. From 5G to NearLink: Europe’s Next Digital Dependency Risk
    Jeroen Groenewegen-Lau, The Wire China, August 9, 2026

Military and Security Threats

73. Chinese Start-Up Lands Reusable Rocket for the First Time

    Adeel Hassan, New York Times, August 19, 2026

For the first time, a Chinese aerospace company landed the bottom part of a rocket that went to space, state media reported on Wednesday, marking an advance for the country in its ability to partly reuse rockets for future missions.

The success follows the recovery of a different rocket’s booster stage, or first stage, which returned upright to a platform at sea last month. That vehicle was operated by a state-owned corporation, while Tuesday’s breakthrough was achieved by a private start-up, LandSpace.

Reusing rocket boosters would allow Chinese satellite makers to reduce the cost of getting to orbit, and better compete in the global space market.

“China is already prepped and primed to scale different space capabilities, like satellite communications, but they just needed reusable launch to really unlock the economics of that,” Kathleen Curlee, a senior research analyst at Georgetown University’s Center for Security and Emerging Technology, said in an interview on Wednesday.

74. China completes first-stage work on disputed South China Sea reef, images show
    Reuters, August 19, 2026

75. Taiwan Says It Was Targeted Last Month AI Driven Hacking Campaign
    Reuters, August 17, 2026

76. Chinese coastguard proposes turning South China Sea isles into robotic fortress
    Holly Chik, South China Morning Post, August 19, 2026

77. In a Polarized Taiwan, Some Residents Are Training to Defend Their Homeland
    The New York Times, August 18, 2026

78. China to build environmental monitoring station near disputed Scarborough Shoal
    Liu Zhen, South China Morning Post, August 19, 2026

79. NATO’s Nightmare
    Simon Shuster, The Atlantic, August 17, 2026

80. Pentagon orders 30 US universities to scrutinise ties with Chinese research partners
    Teresa Elena Frontado, South China Morning Post, August 17, 2026

81. UK Steps Up Scrutiny of Defense Supply Chain After China Scare
    Bloomberg, August 15, 2026

One Belt, One Road Strategy

82. Ecuador’s Noboa courts China on shrimp, copper without threatening US ties
    Igor Patrick, South China Morning Post, August 17, 2026

83. How China’s A.I. Is Surging Across Africa
    Paul Mozur, Adam Satariano, and Aaron Krolik, New York Times, August 5, 2026

When Ernest Mwebaze, a tech developer in Uganda, was building an artificial intelligence system last year tailored for his country’s many languages, he tested American and Chinese tools to see which one could help.

China’s won.

The A.I. model from the Chinese internet giant Alibaba handled Uganda’s dozens of languages better than anything from Meta or Google, Mr. Mwebaze said. It was also inexpensive, and he could customize the model with his own data.

“We want to build things as cheap as possible, yet have them work really well,” said Mr. Mwebaze, a former research scientist at Google. His system, called Sunflower, is now used across Uganda, including by farmers to receive weather information and crop advice in local dialects.

Mr. Mwebaze, 47, is one of thousands of developers across Africa who have turned to Chinese A.I. models in the past year. In Kenya, entrepreneurs are using the models to streamline legal and business services. In Nigeria, they have made educational tools that teach high school students. In Ghana, developers are building local chatbots.

84. China-built data center stirs debate on Pakistan’s digital sovereignty
    Adnan Aamir, Nikkei Asia, August 17, 2026

85. Why the Chinese yuan could soon be Africa’s most important currency
    Jevans Nyabiage, South China Morning Post, August 16, 2026

86. China Is Opening the First Regular Cargo Route Through the Arctic
    Wall Street Journal, August 17, 2026

87. Beijing official hails China and Cuba as ‘good brothers’ in show of solidarity
    Dewey Sim, South China Morning Post, August 10, 2026

88. China’s One Belt, One Road Initiative: Economic Issues
    Michael Sutherland and Karen Sutter, Congressional Research Service, August 14, 2026

Opinion

89. How Zhu Rongji changed China’s political history: Reform-minded former premier declined offer to take helm in early 1990s

    Katsugi Nakazawa, Nikkei Asia, August 20, 2026

There are no “ifs” in history, but the Chinese Communist Party would have had a different history if economic reformer Zhu Rongji had accepted former supreme leader Deng Xiaoping’s offer to become premier in the early 1990s, replacing conservative Li Peng.

Deng was China’s paramount leader from 1978 to 1989, but in his retirement, the chief architect of China’s “reform and opening-up” policy was growing unhappy with the job performance of Li, who was in charge of economic policy. So Deng hatched a secret plan to replace Li, but one that suddenly fell through.

Zhu eventually served as China’s fifth premier, from March 1998 -- a year after Deng’s death -- to March 2003. Li was chairman of the Standing Committee of the National People’s Congress, China’s parliament, during the same period.

Before assuming the post of premier, Zhu served as a vice premier in charge of economic policy and became internationally known as China’s “economic czar.” As premier, he further pursued reforms and became a driving force behind China’s rapid economic growth.

Zhu, who was born in 1928, died of an illness in Beijing on Aug. 12. He was 97. His death came while the Communist Party’s annual Beidaihe meeting was said to be underway, with current leaders and retired elders holding informal discussions.

If any agreements were reached during the secretive retreat, they will significantly affect Chinese politics in the future, including the results of the Communist Party’s 21st national congress in the autumn of 2027.

Xi Jinping, who has been Communist Party general secretary since November 2012 and Chinese president since March 2013, is expected to seek re-election for a fourth five-year term as party chief at the quinquennial party event.

On Tuesday, Xi and other Chinese leaders bid farewell to Zhu at the Babaoshan Revolutionary Cemetery before his body was cremated, with Chinese national flags flying at half-mast over Beijing’s Tiananmen Square and elsewhere.

A day earlier, Xi delivered a speech during a large-scale event at the Great Hall of the People in the Chinese capital to commemorate the 100th anniversary of Jiang Zemin’s birth.

Jiang was general secretary of the Communist Party and Chinese president when Zhu was premier.

All seven members of the Politburo Standing Committee, the Communist Party’s top decision-making body, attended Monday’s commemorative event. Jiang was born in 1926 and passed away in 2022 at the age of 96.

Among the attendees was former Vice President Wang Qishan, a close ally of Xi and a longtime associate of Zhu. While many party heavyweights handpicked by Jiang long ago retired, Wang remains influential.

When the Xi administration was inaugurated in 2012, Wang joined the Politburo Standing Committee. At the same time, he became head of the Central Commission for Discipline Inspection, an anti-graft body.

As one of Xi’s most trusted allies, Wang spearheaded the anti-corruption campaign during Xi’s first term as China’s top leader.

Wang’s appointment was a little unusual given that his expertise is in economics and finance. Zhu, Wang’s backer, helped install him in the position out of concern for a possible clash between Li Keqiang and the strong-minded Wang.

It was Li Keqiang, the new premier, who was put in charge of economic affairs. The head of the Central Commission for Discipline Inspection is an important post but unrelated to the economy.

A significant political development related to Wang Qishan, now among the party elders, took place before the Beidaihe meeting.

It was announced in June that Li Xiaohong, a former senior anti-graft official and close aide to Wang, had been placed under investigation for “suspected serious violations of discipline and laws,” a common euphemism for corruption.

Wang’s wife, Yao Mingshan, is a “second-generation red,” as children of revolutionary-era party leaders are known. She is the daughter of Yao Yilin, a late former Politburo Standing Committee member who also served as Chinese vice premier.

Through his marriage to Yao, Wang has a strong connection to “princelings,” a smaller group of second-generation reds as they are children of senior Communist Party officials.

Xi, a second-generation red himself, and Wang are old friends. They got to know each other when they lived a “sent down” life near Yan’an, Shaanxi province, during the 1966-1976 Cultural Revolution.

Wang was like a big brother to Xi, who, still in his teens, often visited and stayed at Wang’s cave house in a nearby village.

The investigation of Wang’s aide casts a further shadow on the Xi-Wang relationship.

In the wake of the deadly Tiananmen Square crackdown on pro-democracy student protesters on June 4, 1989, Zhu, Wang’s backer, was embroiled in the fierce power struggle between conservatives and reformers.

In the years after the crackdown, conservatives strengthened their influence in Chinese political circles, and the country’s economy stagnated. Wary of the conservative forces at work, Jiang and Li Peng were reticent to embark on bold reform and opening-up measures.

This aggravated the retired Deng, who feared that if the situation remained unchanged, China would collapse. So he began moving behind the scenes.

Still in the early 1990s, Deng ordered his eldest son, Deng Pufang, to secretly investigate political and bureaucratic circles, including human relationships, and ways to deal with them, according to an old Chinese source who related this episode around the time the Xi administration was inaugurated in 2012.

During the Cultural Revolution, the younger Deng fell from a building while being persecuted and became paralyzed from the waist down. He has been wheelchair-bound ever since.

As the son of Deng Xiaoping, Deng Pufang established a wide network of personal connections across political and bureaucratic circles.

He conducted his investigation and reported his findings to the elder Deng, according to the source. The content of the report was shocking.

According to the source, the younger Deng concluded that unless drastic leadership changes were made -- including the dismissal of Premier Li Peng -- reforms would not proceed and boosting the economy would be difficult.

Deng Xiaoping took the situation seriously and secretly began preparing the powerful medicine prescribed by his son. His first target was Li Peng, who was acting as a brake on reforms. If dismissing Li alone was not enough, his second target would be Jiang.

In a bid to restart reforms, Deng Xiaoping went behind the scenes to sound out Zhu about becoming the next premier. Zhu was an up-and-coming vice premier well-versed in economic affairs at the time.

Zhu was surprised and firmly declined the offer to become premier. Lacking confidence and central government experience, he doubted he could overcome resistance from strong conservatives and carry out reforms.

Deng Xiaoping did not give up easily, though, but his secret plan to replace Li would soon fall through. In his mid-80s, the elder Deng fell while taking a shower, suffering broken bones and other injuries. The accident sapped the energy he would need to push through such a bold personnel change.

In the end, the source said, Deng Xiaoping prioritized stability, and, as a result, Li Peng was spared dismissal.

Zhu joined the Politburo Standing Committee at the Communist Party’s 14th national congress in the autumn of 1992 and eventually became premier in March 1998.

The 14th national congress formally adopted the policy of introducing “a socialist market economy” as an economic system.

At his first news conference as premier in March 1998, Zhu declared, “Whether it is a minefield or an abyss that lies ahead, I will go forth without hesitation and serve with all my energy until my dying breath.”

On one occasion, Zhu famously referred to a crackdown on corrupt bureaucrats and joked that he would prepare 100 coffins, 99 for corrupt officials and the remaining one for himself.

If reform-minded Zhu Rongji had readily accepted supreme leader Deng’s offer to become premier in the early 1990s, the Communist Party would have taken a different path. If Jiang and Li had both left, the Jiang-Zhu duo would not have come about.

The key factor behind Zhu’s political career was the health of Deng, who had been suffering from Parkinson’s disease since the 1980s.

In China, the supreme leader’s health is treated as a state secret, as a leader’s poor health would affect the country’s political situation.

The same holds today.

Deng, Li, Jiang and Zhu were once parties to a fierce power struggle, though one that remains little known. Their story, as related by the old Chinese source well-versed in politics, provides plenty of food for thought regarding the future of Chinese politics as the dynamics of Communist Party power remain largely unchanged.

90. The end of an era for China’s economy
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91. What Really Happens If China Wins the AI Race?
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92. A China Strategy That Lasts: Congress Must Lead to Compete with Beijing
    Bill Cassidy, Foreign Affairs, August 19, 2026

93. 6G is coming. Will the West let China write the rule book?
    Matthew Gould, Washington Post, August 10, 2026

94. Humanoid Robots Need a Supply Chain in North America
    Bloomberg, August 18, 2026

95. China’s space race has a new problem: finding room for failure
    Tang Meng Kit, South China Morning Post, August 17, 2026

96. Constantine’s Example for China
    Walter Russell Mead, Wall Street Journal, August 18, 2026

97. Chinese diplomats must stop telling Thais what to think and do
    Pravit Rojanaphruk, Nikkei Asia, August 10, 2026

It’s that time of year again.

The who’s who of elite Communist China decamp from Beijing and head to the coastal resort of Beidaihe for their annual retreat. We are about two months away from an important conclave on party governance, the last of the 20^th Party Congress and we are a little more than a year out from the start of 21^st Party Congress.

According to a CCTV report last week, the theme of this year’s Beidaihe retreat is, “Make Contributions in the New Era.” The reference to the “New Era” links to one of Xi’s refrains that there are changes unseen in century happening that will benefit the PRC as it marches toward its centenary. But it is also a reference to the way that Xi frames his entire rule as a “New Era” for the Chinese Communist Party, one of renewal and strength after years of decline under his predecessors.

But after more than a dozen years of Xi-ism, the shine is wearing off the apple of the “New Era.”

Under normal political circumstances, this would mean that there would be quite a bit of internal party grumbling during this retreat with younger party members maneuvering to push the old man out. But Xi’s never-ending rectification campaign (which he euphemistically calls an “anti-corruption campaign”), has pushed these activities to the shadows and analysts of the CCP have to speculate on what Party members are thinking.

In many ways Xi Jinping want his party cadres to internalize the lyrics of the 1981 pop hit from The Go-Go’s, “Our Lips Are Sealed” by The Go-Go’s:

• Can you hear them?

  They talk about us

  Telling lies

  Well, that’s no surprise

• Can you see them?

  See right through them

  They have no shield

  No secrets to reveal

• Doesn’t matter what they say

  In the jealous games people play

  Hey, hey, hey

  Our lips are sealed

• There’s a weapon

  That we must use

  In our defense

  Silence

• When you look at them

  Look right through them

  That’s when they’ll disappear

  That’s when we’ll be feared

• It doesn’t matter what they say

  In the jealous games people play

  Hey, hey, hey

  Our lips are sealed

This kind of internal secrecy, opacity, and party discipline is in the DNA of the Chinese Communist Party. As an insurgent and revolutionary party, the CCP had to maintain these traits, or it risked being discovered and wiped out. On April 12, 1927, this nearly happened when Chiang Kai-shek and his Nationalist government ended the period of the “First United Front” and purged members of the CCP in Shanghai.

As the CCP reformed and got stronger over the next two decades, the “April 12 Incident” justified extreme levels of secrecy and party discipline.

However, the CCP is no longer a tiny revolutionary party on the verge of being wiped out by an incumbent government… it is the incumbent. Not only do some 1.3 billion Chinese citizens need to have a better understanding of the direction and shape of their own government to make decisions about the future; the rest of the world deserves a better understanding of what is happening as well given the PRC’s influence on the world.

The fact that the Party still treats the Beidaihe Retreat as a “secret,” when everyone knows it is happening, suggests that this is an organization that has turned one of its key strengths from a different period into a liability.

So, in an attempt to divine what Party members might be thinking, but won’t talk about, here are my three top topics you won’t hear discussed at Beidaihe this year.

Number 1: Will the Party ever implement the economic reforms adopted in 2013?

In 2013, the first year of the 18^th Party Congress and Xi Jinping’s first year in power, the Party held a plenum in October and November which approved a series of important economic reforms that would have reduced the state’s role in directing the economy, would have made the market decisive in determining important economic decisions, and have empowered Chinese citizens with more economic power. These reforms were based on the best advice of Chinese economists who understood that the kind of state-driven economy that had helped the PRC climb out of the disastrous policies of Mao was no longer fit for purpose as the PRC became a middle-income economy. If the Party didn’t make these kinds of reforms, then the country risked falling into the “middle-income trap” and given the demographic realities, China would grow old before it grew rich.

Economists from the rest of the world largely agreed with this plan and leaders in Europe, the United States, and Japan all encouraged Beijing to carry out these reforms and pledged their support.

If the Party refused to implement these reforms, Chinese economists warned that the Chinese economy would stagnant and the Party’s challenges would compound.

Chinese economists recommended these economic reforms as a way for the country to transition from one economic mode to another. This new economic mode, in which the market, not the state, played a decisive role, would be better suited to help the PRC achieve the centenary goals its leaders had adopted. Premier Li Keqiang was the face of these reforms, and it appeared in 2013 that Li and Xi Jinping agreed that for the benefit of the Party and the country, the PRC had to implement these economic reforms.

However, that consensus started to breakdown almost immediately. Economic reforms of this magnitude are never just economic, they have an important political and social stability implications as well. While Li was focused on transitioning the Chinese economy, Xi Jinping was focused on revitalizing the Chinese Communist Party and bringing it back to its Leninist and revolutionary roots. For Xi, this was about avoiding the disaster that struck the Communist Party of the Soviet Union in the late 1980s.

So, when Li’s economic reforms started chipping away at the power and influence of the Party in the Chinese economy, Xi halted and reversed the economic reforms.

It is now a dozen years later. Xi’s efforts to revitalize the Party have succeeded and the Party is at its strongest, far stronger than anything Mao had at his fingertips. But that has come at a cost. The warnings that Chinese economists made in 2013 have come true, the Chinese economy is stagnating and the solutions that Xi is pursuing is only making the situation worse.

Economic and political reforms are closely tied, and it appears that neither can be contemplated while Xi is in power.

Number 2: Xi isn’t getting any younger.

While Party doesn’t have hard rules, the norm had been that members of the Politburo and Politburo Standing Committee were bound to the “seven up, eight down” rule. For members going into a Party Congress that were 67 or younger, they could stay. For members that were 68 or older, they were expected to retire.

In June, Xi Jinping turned 73 and when the 21^st Party Congress starts, he will be 74… the last time I checked 74 is older than 68.

No one expects Xi to retire, which means he will be 79 when the 22^nd Party Congress begins in 2032… and when the 23^rd Party Congress begins in 2037, Xi will be 84.

If this most basic norm can be busted so flagrantly by the Party leader, what does this say about Party discipline.

Number 3: How can the Party plan for a leadership transition in the “New Era”?

We don’t know for sure, but it seems unlikely that Xi Jinping will name a successor at the start of the 21^st Party Congress next year, which means that succession planning will get kicked five years into the future. Aside from Russia’s President Putin, Xi Jinping is one of the longest serving leaders of a major power and like Putin, it appears that Xi plans to stay in power for life.

While this creates the illusion of stability, it hides fractures happening beneath the surface as ambitious Party leaders younger than Xi get pushed out after hitting the age limits.

It should be remembered that in the 77-year history of the People’s Republic of China, there has only been TWO “routine” transitions of power. The transition from Jiang Zemin to Hu Jintao in 2002-2003 and the transition from Hu Jintao to Xi Jinping in 2012-2013. All the other transitions or near transitions have involved, deaths, coups, and assassinations (side-eye at Liu Shaoqi, Lin Biao, Hua Guofeng, Hu Yaobang, and Zhao Ziyang). Don’t be lulled into the sense that the CCP provides stability and certainty, politics in the PRC is a bloodsport.

We like to think that democracies are messy and confused with leaders changing all the time (I’m looking at you Britain) and public battles among political parties. But of course, all that happens in the PRC as well, we just don’t see it because it takes place behind an enforced silence that breeds complacency from folks outside the system. When CCP politics erupt into public view, outsiders are shocked by the changes they didn’t see coming.

***

Next week, I’m going to take my own Beidaihe retreat, so there won’t be a newsletter on Sunday… unless something happens that requires one.

Thanks for reading!

Matt

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1. US bars imports from 43 more companies over China’s alleged forced labor involving Uyghurs
   Karen Freifeld and Eduardo Baptista, Reuters, July 31, 2026

The ​United States on Friday banned imports from 43 more Chinese companies over alleged rights abuses of Uyghur and other minority groups, targeting firms in supply chains ‌from electronics to food and metals, a government notice showed.

The companies were added to the Uyghur Forced Labor Prevention Act Entity List, which creates a presumption that goods made wholly or partly by listed entities are made with forced labour and cannot enter the United States unless importers can prove otherwise.

Beijing has regularly dismissed accusations of forced labour and other abuses against Uyghurs and other Muslim minorities in the region of Xinjiang.

The notice published by the U.S. Department ​of Homeland Security marks the first time companies have been added to the list under the Trump administration. It brings the number of mentioned entities to 187 from 144 — the largest single ​expansion since the act creating the list was signed into law in 2021.

CHINA SAYS IT WILL TAKE ‘NECESSARY MEASURES’

China’s Commerce Ministry on Saturday condemned the ⁠U.S. action as an unfounded unilateral sanction, which it said had come just a day after trade officials from both countries had what it described as a constructive video call.

China would take “necessary ​measures” to protect its companies, the ministry added without going into more detail.

Four companies were listed over what the U.S. government said was their work with Xinjiang authorities to recruit, transfer or receive ​Uyghurs and other persecuted groups.

The Federal Register notice said the other 41 were added because they source materials from Xinjiang or from entities linked to government labour programs there.

“Today’s action by the Trump administration strengthens America’s economy against products made with slave labor,” Representative John Moolenaar, chairman of the House Select Committee on China, said in a statement.

China’s embassy in Washington called such allegations “a lie” on Friday and said Chinese law prohibits forced labour ​and that workers in Xinjiang are free to choose their occupations.

2. How China Keeps Tabs on Foreigners
   Lily Kuo and Pei-Lin Wu, New York Times, August 2, 2026

An unsecured police dashboard was a rare window into how the authorities track foreigners by collecting and aggregating vast amounts of private data.

Most days, Marc Hofer, a cybersecurity researcher and journalist based in Amsterdam, trawls the internet for clues about how China surveils its citizens, a subject that has fascinated him since he worked there as a foreign correspondent.

Mr. Hofer, 46, was doing his usual scan earlier this year when he came across something called “Dynamic Control Platform for Overseas Personnel.” It was a futuristic dashboard — like something from the movie “Minority Report” — that appeared to track foreigners in the northern Chinese city of Zhangjiakou, a popular skiing spot that co-hosted the 2022 Winter Olympics.

The system’s dashboard said it tracked more than 700 foreign residents living in the city. In total, it had entries for nearly 12,000 people, which included fugitives, people from Hong Kong and Taiwan, as well as more than 300 foreign journalists. Some of them had not been to Zhangjiakou.

Suddenly, Mr. Hofer saw his own face — in a photograph taken by Chinese immigration officials for their records. Next to it was his passport number and the cellphone number he had used in China.

He was floored. “Whoever put that stuff in there had access to real data,” he recalled. He also noticed a list of users who had recently logged into the site — it included the names of police stations in Zhangjiakou and other cities.

China monitors its 1.4 billion people on an unparalleled scale, with the help of cameras, cellphone signals and national IDs. The database Mr. Hofer found offered a rare window into how extensively the Chinese authorities also surveil foreigners, displaying entries about people categorized by nationality, with their birth date, sex, marital status, address and occupation, and sometimes their religion.

It also included instances when they were captured on camera at traffic intersections, markets, shopping malls or other locations, including a mosque.

COMMENT – I’ve said it before, but it is worth repeating, do not travel to the PRC.

3. China is claiming the right to punish its critics anywhere on Earth
   Reza Hasmath, Michael Kovrig’s Strategic Narratives, August 4, 2026

A new law declares that organizations and individuals outside the PRC who “undermine ethnic unity” or “create ethnic division” can be pursued for legal liability.

On July 1, China brought into force its Law on Promoting Ethnic Unity and Progress, converting a decade of Xi Jinping’s doctrine of “forging a strong sense of community for the Chinese nation” into binding law.

Most attention has gone to its domestic machinery: entrenching Mandarin over minority languages, unified state textbooks and “inter-embedded” neighbourhoods engineered to dilute concentrations of Uyghurs and Tibetans among the Han majority. In other words, this is an assimilationist project that’s already far advanced.

The provision that matters most to the world outside China is buried near the end. Article 63 declares that organizations and individuals outside Chinese territory who “undermine ethnic unity” or “create ethnic division” shall be pursued for legal liability.

The Chinese government is therefore asserting, in statute, that its authority follows its critics across oceans into other countries, including Canada, home to some of the world’s largest Chinese, Uyghur and Tibetan diaspora communities. The danger is not that the law reaches across borders. It is what it criminalizes, whom it targets and how it’s enforced.

Getting the definition right

The reflexive response is to call this legal imperialism. The conclusion is right, but the usual reasoning is lazy. That matters, because extraterritorial jurisdiction is neither a Chinese invention nor a monopoly. Get the objection wrong, and China will swat it away as hypocrisy.

Democracies reach across borders constantly. Europe’s data protection rules bind firms anywhere on Earth that handle Europeans’ data. The United States prosecutes bribery committed entirely overseas. And a German court convicted a former Syrian intelligence officer in 2022 of crimes against humanity committed in Damascus, with no German victim at all.

What separates Article 63 from these precedents comes down to three differences:

• The offence. Every western example rests on a defined wrong: bribery, mishandled data, torture. “Undermining ethnic unity” is not a crime defined anywhere in law. It is an elastic political judgment, rendered by the very authority accused of the underlying abuses. The vagueness is by design. A law that lets the state decide, case by case, who has offended the nation is attempting to export censorship.

• The target. Universal jurisdiction prosecutes the perpetrators of atrocities to vindicate the victims. Article 63 runs the other way. Its targets are the victims’ advocates: the Uyghur who testifies before a foreign legislature, the Tibetan who organizes a vigil, the scholar who documents the camps. A government credibly accused of abusing an ethnic minority is claiming the right to punish the people who describe the accusation.

• Enforcement. Western extraterritorial law, for all its overreach, runs through courts. Article 63 attaches no procedure at all. Its real instrument is the leverage China already holds: the passport of a sibling still inside China, an exit ban on an aging parent, security officers at a relative’s door. This is the documented machinery of transnational repression, now given a statutory label.

Shadows of Hong Kong law

None of this is an aberration. Article 63’s clearest precedent is Article 38 of the 2020 Hong Kong national security law that had Beijing’s blessing. It claimed to cover offences committed outside Hong Kong by people who were not its residents.

The new law extends that logic into the vaguer terrain of “ethnic unity.”

It also tracks a documented trend: China runs the world’s most extensive campaign of transnational repression, operating through informal “overseas police stations” (several identified in Canada) and coercion by proxy. What Article 63 adds is legal form, and an invitation to every other authoritarian government to do the same.

4. China cues start of leaders’ secretive Beidaihe summer retreat
   Reuters, August 3, 2026

China’s Communist Party appeared to kick off its annual closed-door retreat in the seaside resort of Beidaihe, an informal gathering that perennially ​sparks rumours of power jostling among senior cadres and comes this year ahead of a major party conclave in October on party governance.

Beijing does not publicly confirm the gathering, but in a sign that it had begun, Chinese President Xi Jinping’s chief of staff and close aide Cai Qi on Monday met with scholars in Beidaihe in northern Hebei province, an appearance analysts say has in past years coincided with the summer retreat.

5. AUDIO – A Century of Humiliation: The Myth That Made Modern China — with Alice Miller
   Liu He, Peking Hotel, August 3, 2026

If you ever studied modern Chinese history, you likely met the “century of humiliation” in your first class. In 1840, British gunboats shattered the pride and legitimacy of the Qing empire, and the decades of semi-colonization that followed inaugurated a century of reform and revolution — all aimed at restoring an ancient, creaky civilization to unity and to the top of the world. The Kuomintang and the Communist Party told the same story and drew the same conclusion: the mandate belongs to whoever ends the humiliation.

In China, history has never been merely academic. Where elections do not exist, leaders seek legitimacy in historical title deeds — which is why the Party still teaches the story in every classroom and invokes it in every speech on national rejuvenation. The battle crossed the Pacific, too. John King Fairbank absorbed the nationalist framework in wartime China and canonized it at Harvard, organizing American understanding of modern China around two dates: 1840 and 1949. He built the field of China studies as we know it, and generations of his students inherited the framework with it, until American scholarship was teaching China’s nationalist mythology back to itself — and to Washington, where it still underwrites op-eds casting Xi Jinping as the new emperor. How America tells China’s story shapes how America makes China policy.

Dr. Alice Miller thinks we have the story wrong. From 1974 to 1990, she was a senior CIA analyst of Chinese foreign policy and domestic politics, and later a division chief supervising analysis of China, North Korea, Indochina, and Soviet policy in East Asia. She is now a research fellow at the Hoover Institution, where she edited and contributed to the China Leadership Monitor from 2001 to 2018. She published as H. Lyman Miller before her gender transition.

In part two of our conversation — edited for clarity and brevity — we trace her formation at Princeton under Fritz Mote, the ferocious “Who lost China?” debates of the 1950s, the eternal feud between historians and political scientists, and her heterodox verdict on engagement: it didn’t fail — it worked so well that Xi Jinping had to stomp on it. We close with a story of a different kind: her transition in 2006, and the unexpected grace with which the CIA, Hoover, and the Naval Postgraduate School received it. Part one, on her years decoding Beijing for the CIA, is here.

COMMENT – Great insight into the academic debates over the founding of the People’s Republic of China and how that has influenced U.S. policy for the last seven decades.

6. Stranger Pings: Chinese Telecom Companies Infiltrate U.S. Infrastructure
   Select Committee on the CCP, August 4, 2026

A new bipartisan investigation by the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party exposes the CCP’s infiltration and weaponization of Americans’ communications and networks. The investigation found that “Chinese state-owned carriers remained deeply embedded in the U.S. internet ecosystem long after federal regulators had already found them vulnerable to CCP exploitation, influence, and control.” Although China Mobile, China Unicom, and China Telecom had their Section 214 telecommunications licenses denied or revoked previously, they retain extensive unregulated footprints in the United States.

“This report shows the importance of continued oversight of PRC-linked telecommunications companies operating in the US,” said Ranking Member Ro Khanna (D-CA). “Particularly in light of the CCP’s Typhoon campaigns, Congress should continue to address risks to Americans’ data and ensure that the agencies responsible for securing our communications networks have the resources they need to respond to potential threats.”

“U.S.-based subsidiaries of Chinese telecommunications companies are beholden to the CCP, and they are a threat to all of us,” said Chairman John Moolenaar (R-MI). “They make American customers promise to censor information according to the CCP’s laws, and they poison the domestic cyber infrastructure we rely on. All of this leaves us vulnerable to a new wave of state-sponsored cyberattacks from our nation’s biggest adversary. The CCP does not allow U.S. telecom companies into China. We must cut these subsidiaries out of our domestic infrastructure to protect the American people.”

In March 2025, the Select Committee held a bipartisan hearing entitled “End the Typhoons: How to Deter Beijing’s Cyber Actions and Enhance America’s Lackluster Cyber Defenses.” In connection with that hearing, and in response to the CCP’s Salt Typhoon hack of U.S. telecommunications infrastructure, the Select Committee launched a bipartisan investigation of China Telecom, China Mobile, and China Unicom. After all three Chinese state-affiliated companies failed to cooperate voluntarily with the Select Committee, the committee subpoenaed them and conducted bipartisan transcribed interviews of personnel from the companies.

In three key findings, the investigation concluded:

• China Telecom, China Mobile, and China Unicom’s U.S. subsidiaries are not truly independent from their PRC and Hong Kong parent companies.

• The FCC’s actions limit what the companies can sell, but it cannot remove the companies’ equipment, presence, or network relationships.

• These companies remain embedded in U.S. infrastructure, creating security risks for American Internet users through their integration with Chinese parent networks and supporting systems.

The investigation also revealed anomalous internet routing activity that corresponds with the timing of notable CCP-sponsored hacks against the U.S. In light of these findings, the investigation expresses profound concern that these companies’ residual U.S. operations may help facilitate future malign cyber activities by the CCP in the United States. The investigation ends by making policy recommendations for Congress to act on, with the goal of identifying and constraining -- and if warranted, completely removing -- foreign state-controlled network infrastructure posing a national security risk.

Policy Recommendations

• Codify the FCC’s authority to deny blanket authorizations and restrict domestic interconnection.

• Establish statutory authority over retained foreign-adversary infrastructure.

• Broaden Team Telecom and Information and Communications Technology Services (ICTS) jurisdiction over private commercial arrangements involving foreign controlled infrastructure.

• Mandate entity specific FCC Covered List determinations and fund targeted “rip-and-replace.”

• Fund internet routing-security enforcement and ensure federal agencies have the technical talent necessary to address foreign adversary threats.

• Require interim logging, monitoring, and recording until covered infrastructure is removed or mitigated.

Authoritarianism

7. Huggies Stumble in China After Social-Media Firestorm
   Natasha Khan, Wall Street Journal, August 4, 2026

8. China warns of retaliation if US sticks with robot ban
   Reuters, July 29, 2026

9. China announces countermeasures against Washington, including controls on drone exports to the US

   Huizhong Wu and Kanis Leung, Associated Press, August 5, 2026

China announced a series of economic measures Wednesday against the United States, including controls on exports of drones to the U.S. and a ban on dealings with six American entities, in response to recent restrictions imposed by Washington.

Tensions are simmering between the world’s two biggest economies ahead of an expected visit by Chinese President Xi Jinping to the U.S. in September, despite signs of warming ties during his meetings with U.S. President Donald Trump in Beijing in May.

The Commerce Ministry said the sanctions are in response to recent moves from the U.S., including a ban by the U.S. Federal Communications Commission on imports of Chinese drones, and the Department of Homeland Security’s decision to add 43 Chinese companies to the Uyghur Forced Labor Prevention Act entity list to prevent imports of goods made with forced labor.

The “measures seriously violate the important consensus reached by the two heads of state and severely damage China’s legitimate rights and interests. China has no choice but to take necessary countermeasures in response,” the ministry said in a statement.

It emphasized that China was acting with restraint and urged the U.S. to scrap its measures against Beijing and cease its “erroneous practices.” It also warned of further sanctions if the U.S. rolls out new restrictive measures against China.

10. Stick with it until you win: why Beijing keeps sovereignty disputes alive
    Pu-Chao Hung, The Strategist, August 3, 2026

11. China draws ‘red lines’ around its economic model ahead of EU, US trade talks
    Claire Fu, Kevin Yao and Liangping Gao, Reuters, August 3, 2026

12. Yes, China does seek hegemony
    Graham Fletcher, Lowy Institute, July 8, 2026

13. China accuses Philippines of ‘flagrantly infringing’ on sovereignty in seabed claim
    Shi Jiangtao, South China Morning Post, July 30, 2026

14. Watching China in Europe - August 2026
    Noah Barkin, August 3, 2026

COMMENT - Great analysis by Noah Barkin, I hope Berlin can get its act together, but I’m not optimistic.

15. Beijing’s Backdoor into American Strategic Industries
    Vermilion China, August 4, 2026

16. Is Japan Decoupling from China?
    Jio Kamata, The Diplomat, August 3, 2026

17. China exit rules tightened to guard rare earth, battery secrets
    Jeff Pao, Asia Times, August 4, 2026

18. China steps up protection for chip designs in revised regulations
    Eduardo Baptista, Reuters, August 3, 2026

19. New exit/entry regs target export control violations
    Trivium China, August 3, 2026

20. Why America Must Protect Biological Data from China
    Pat Fallon, National Interest, July 29, 2026

21. China’s Xi urges deeper anti-graft fight in military, modernisation advance
    Reuters, July 31, 2026

Environmental Harms

22. The New Carbon Order: China’s Response to Europe’s CBAM

    Ilaria Mazzocco and Ray Cai, CSIS, June 15, 2026

23. Sullivan urges sanctions on Chinese tankers, cargo ships and floating bases accused of enabling illegal fishing

    Lars Hanson, KTUU, August 6, 2026

24. Commissioners Urge President to Bar Chinese Seafood Linked to Forced Labor and Illegal Fishing

    Congressional-Executive Commission on China, July 16, 2026

Foreign Interference and Coercion

25. He Made Videos for Mamdani and Piker—and Loves the CCP
    Tanner Nau, The Free Press, August 3, 2026

26. Canada’s Spy Service Delivered a Closed-Door Briefing to Richmond’s Mayor and Council on Chinese Threats to Election Candidates: Source
    Sam Cooper, The Bureau, August 1, 2026

27. Philippines defends efforts to put China-linked education programmes under more scrutiny
    Reuters, July 31, 2026

28. Beijing Protests After New Zealand Minister Insults Chinese-Born Lawmaker
    Victoria Kim, New York Times, August 1, 2026

29. London residents lose legal challenge against Chinese ‘mega’ embassy
    Alistair Gray, Financial Times, July 31, 2026

30. UK bars Chinese suppliers from military vehicle competition
    Craig Langford, UK Defense Journal, August 1, 2026

31. A Florida Surrogate, a Father in China, and the Babies Caught Between
    Katherine Long, Wall Street Journal, July 31, 2026

32. Panama Infuriated China. Now It’s Paying the Price.
    Costas Paris, Wall Street Journal, July 30, 2026

33. Ore Else
    Lili Turner, Graphika, July 30, 2026

34. What Are Elon Musk’s Business Interests in China?
    Micah McCartney, Newsweek, August 1, 2026

35. Why Did China Sanction 2 High-Tech Institutions in Poland?
    Antoni Łukasik, The Diplomat, July 29, 2026

36. ‘Cursed island’: the $100bn luxury development hosting tech nomads and scammers
    Owen Walker, Financial Times, August 4, 2026

Human Rights and Religious Persecution

37. A young Tibetan flees his homeland – and reveals how China is eroding his culture

    CNN, August 1, 2026

38. Paradise Lost: The Forced Exodus of Lifechanyuan’s Thailand Home
    Massimo Introvigne, Bitter Winter, August 3, 2026

39. The Next Phase of China’s Minority Crackdown
    James Leibold and Tenzin Dorjee, Foreign Affairs, July 30, 2026

40. The Fenggang Yang Scandal: US Catholic Organization Silences a Leading Scholar
    Massimo Introvigne, Bitter Winter, August 4, 2026

Industrial Policies and Economic Espionage

41. China’s Elderly Population Tops 323 Million as Aging Pressures Mount
    Xu Wen, Caixin Global, August 1, 2026

42. The World Should Not Ignore China’s Undervalued Currency
    Brad Sester, Council on Foreign Relations, August 2, 2026

43. Pain or gain? US moves to decouple its defence industry from China’s rare earths
    Alyssa Chen, South China Morning Post, August 1, 2026

44. The German Auto Industry, a Pillar of the National Psyche, Is Trembling
    Jack Ewing and Jim Tankersley, New York Times, August 1, 2026

45. China’s factory activity falls for first time in five months
    Thomas Hale, Financial Times, July 31, 2026

46. Move Fast and Regulate Later: The Paradox of China’s Economic Dynamism
    Carl Benedikt Frey, Wall Street Journal, July 31, 2026

47. Summertime Blues Hit China’s Factories
    Hannah Miao, Wall Street Journal, August 3, 2026

48. How One Startup Built a (Mostly) China-Free Robot
    Paresh Dave, Wired, August 4, 2026

49. Xi Wants a Strong-Looking Yuan. China’s Economy Keeps Holding It Down.
    Lingling Wei, Wall Street Journal, August 4, 2026

50. China’s Global Corporate Takeovers Turn Foreign R&D into Chinese Patents
    SCCEI, August 4, 2026

51. U.S. to Halt Key Metal Waste Exports in Push to Break China Reliance
    Kim Mackrael, Wall Street Journal, August 5, 2026

Cyber and Information Technology

52. Why Silicon Valley is divided over China’s powerful, cheap AI models
    Viola Zhou, Rest of World, August 4, 2026

53. The Race to Build an American Alternative to Cheap AI From China
    Kate Clark and Sam Schechner, Wall Street Journal, August 1, 2026

54. Trump administration drafting ban on Chinese data center devices, sources say
    Alexandra Alper, Reuters, August 4, 2026

55. China Is Getting More Anxious About Mythos Before Trump Meets Xi
    Bloomberg, August 4, 2026

56. China’s AI Blitz Creates ‘Death Zone’ for Rival US Model Makers
    Bloomberg, August 4, 2026

57. ASML’s hold over the future of chipmaking is weakening
    Financial Times, August 4, 2026

58. Chinese telecom firms kept footholds in US networks despite federal crackdowns, House probe finds
    David DiMolfetta, Next Gov, August 4, 2026

Military and Security Threats

59. Defusing Japan and China’s unmanaged security dilemma
    William Choong, Lowy Institute, August 3, 2026

60. How Taiwan’s First Island Chain Allies Quietly Build a Coalition Against China’s Gray-Zone Playbook

    Hazel Hsu, CommonWealth Magazine, August 4, 2026

The Taiwan Strait must not become another Strait of Hormuz. As allies step up joint exercises across the first island chain and the U.S. shifts its strategic focus back to Asia from the Middle East, Taiwan and its partners are exposing China’s maritime activities through a strategy of transparency—countering Beijing’s efforts to normalize unification without war.

61. Living between two worlds on Taiwan’s Matsu Islands
    David Frazier, Nikkei Asia, August 1, 2026

62. The US-China mil-mil mirage

    Phelim Kine and Giselle Ruhiyyih Ewing, Politico, August 6, 2026

COMMENT – This is hardly news, U.S.-PRC military-to-military ties have always been a mirage.

63. China’s military goal is to stand neck and neck with the US: ex-PLA colonel Zhou Bo
    Alcott Wei and Amber Wang, South China Morning Post, August 3, 2026

64. U.S., Allies Put Frictions Aside, Showing China Combined Naval Might
    Timothy W. Martin, Wall Street Journal, July 31, 2026

65. Japan Defense Report Cites China, Russia, NK Military Ties
    Alastair Gale, Bloomberg, August 4, 2026

66. Deep U.S. Ties with Taiwan Are Surviving Pressure from China—and Trump
    Joyu Wang, Wall Street Journal, August 4, 2026

67. Chinese military unveils AI system to plan and coordinate mass air strikes
    Amber Wang, South China Morning Post, August 3, 2026

68. Japan defense report says China challenge must be met with ‘overall national strength’
    Jesse Johnson, Japan Times, August 4, 2026

69. China holds military drills near disputed shoal in the South China Sea
    AP News, July 8, 2026

70. Chinese military researchers tap US AI models to train defence systems
    Eduardo Baptista, Reuters, July 31, 2026

71. Chinese Destroyer’s Encounter with U.S. Drone Boat Highlights Future Rules of Engagement Issues
    Howard Altman, Tyler Rogoway, The War Zone, July 28, 2026

One Belt, One Road Strategy

72. Pakistan applies for $10bn US forex facility, leverages Iran mediation
    Adnan Aamir, Nikkei Asia, August 2, 2026

73. China’s Quiet Quest to Dominate Latin America
    Natalia Cote-Muñoz, Foreign Affairs, August 3, 2026

74. How China’s US$900 million port deal in Angola shows its dominance over US interests
    Dulue Mbachu, South China Morning Post, August 4, 2026

Opinion

75. Why the Rare Earths Weapon Is Losing Its Force
    David Fickling, Bloomberg, August 3, 2026

76. The Future, Made in China
    Evan Osnos, The New Yorker, August 3, 2026

77. China’s Threat to Poland

    Filip Styczynski, The National Interest, August 3, 2026

Poland’s ties with Taiwan and its support for Ukraine are attracting China’s attention and ire.

Poland’s ties with Taiwan and its support for Ukraine are attracting China’s attention and ire.

On July 21 in Taipei, a delegation of Polish members of the European Parliament from the European Conservatives and Reformists (ECR), led by former Polish Prime Minister Beata Szydło, met with Taiwanese President Lai Ching-te.

“Taiwan seeks to strengthen cooperation with democratic partners such as Poland to counter authoritarian expansion, and hopes to deepen collaboration in scientific research while building a safer and more resilient democratic supply chain,” President Lai said.

Former Prime Minister Szydło stated that “peace and stability in the Taiwan Strait have strategic significance extending far beyond the region. Preserving them is in the interest of the entire international community, directly affecting Europe’s security and economic order.” She added: “We view Taiwan as a guarantor of that security and of democracy.”

These statements reflect the growing bipartisan cooperation between Taipei and Warsaw.

Just a month earlier, from June 22 to 24, Warsaw hosted Taiwan Expo Europe. It was the second edition of the event, following the previous one in Berlin two years earlier and the inaugural Taiwan Expo in Washington in 2022. The expo is a result of Taiwan’s increasingly proactive diplomacy, as Taipei has adopted a bolder approach combining soft power, economic power, and hard power. In 2025, Foreign Minister Lin Chia-lung announced that Taiwan was moving from “values-based diplomacy” to “value-added diplomacy,” emphasizing tangible benefits for international partners cooperating with Taipei.

Shortly before the expo, Foxconn announced plans to build an automotive factory in Poland. Already one of Taiwan’s most important economic partners in Europe, Poland is also the largest importer of Taiwanese drones worldwide.

78. Trump, TikTok and Federal Devices
    Wall Street Journal, August 2, 2026

79. At a crossroads: How Beijing sees Manila’s South China Sea turn

    Xiaobo Liu and Sophie Wushuang Yi, Lowy Institute, August 6, 2026

The Philippines has learned that internationalising its dispute with China pays – and that may not stop.

When China’s Foreign Minister Wang Yi told his Philippine counterpart Tess Lazaro on the sidelines of an ASEAN gathering in Manila on 22 July that bilateral relations “now stand at a crossroads(Opens in new window)”, the phrasing was deliberate. A crossroads is both warning and invitation: a prompt to make what Wang called the “correct, rational decisions about the path ahead”.

Wang had come for the ASEAN-related foreign ministers’ meetings(Opens in new window) hosted by the Philippines as this year’s ASEAN chair. So when Chinese and Philippine personnel came to blows at Second Thomas Shoal(Opens in new window) on 20 July – each blaming the other – on the eve of the meetings, Beijing did not read the timing as coincidence.

Chinese officials cast such incidents as deliberately staged by Manila(Opens in new window), which they portray as an attempt to force the dispute onto a multilateral agenda and cast China as the aggressor. This internationalising of the dispute is what has lifted the Philippines, under President Ferdinand Marcos Jr, from a bilateral irritant to one of the more vexing problems in China’s periphery diplomacy.

For Beijing, this was never a quarrel over rocks and reefs alone. Marcos abandoned what it preferred as the quiet bilateralism of the Duterte years, publicised nearly every coast-guard encounter, and rebuilt his case on the 2016 arbitral award(Opens in new window) that Beijing dismisses as “illegal and void” – mobilising law, media and outside powers to constrain China in what Beijing regards as its maritime backyard.

80. China’s Shadowy Threat
    Tom Tugendhat, Dispatches, August 4, 2026

81. China’s next export is the world’s factory itself
    Howard Yu, South China Morning Post, July 2, 2026

Friends,

This weekend marks four years since Nancy Pelosi, as Speaker of the House, landed in Taipei to meet with Taiwanese President Tsai Ing-wen. I think it is fitting that the #1 song on the Billboard Hot 100 list as Pelosi’s plane taxied in front of the Taipei 101 Tower was Lizzo’s “About Damn Time.”

The tail of Speaker Pelosi’s plane at Taipei Songshan International Airport with the Taipei 101 tower in the background on August 2, 2022.

As she was flying into Taipei, Pelosi released an OpEd in the Washington Post explaining: “Why I’m leading a congressional delegation to Taiwan.” It is worthwhile reading that OpEd again today and I hope both Republicans and Democrats, MAGA and Democratic Socialists, take it to heart.

For decades, Chinese Communist Party leaders threatened the apocalypse if a visit like this took place… and for decades, American leaders cowered at these threats by their counterparts in Beijing. It is hard to imagine Clinton, Bush or Obama allowing a visit like this on their watch. It took someone like Nancy Pelosi, who spent her entire Congressional career standing up to the Chinese Communists, to finally break the spell.

Four years on and her visit did not result in the apocalypse. [Xi Jinping may still decide to attack and attempt to annex Taiwan, but the Pelosi visit in August 2022 won’t be the cause]

Four years later, the Taiwanese economy is outperforming its Communist neighbor. In 2025, the Taiwanese economy grew at a rate of 8.63%... more than double the “official” rate from the PRC, which as we all know is fiction anyway. This year, the Taiwanese GDP is set to reach 9.64% as the PRC economy continues to sputter.

The PRC is no longer Taiwan’s top trading partner, that position now belongs to the United States.

Taiwanese investment in the PRC has collapsed over the past 15 years. In 2010, more than 80% of Taiwan’s outbound investment went to the PRC, by 2025, it was down to less than 3%.

No one knows the PRC economy better than corporate leaders in Taiwan… if they have lost confidence in the PRC to this degree, others should be following their lead.

Oh wait, they have…

The Tiger is Back…

Between the 1960s and the 1990s, Taiwan grew into one of the four Asian Tigers (along with Hong Kong, Singapore, and South Korea). These economies implemented a series of domestic reforms, funded and supported largely by the United States, which resulted in spectacular growth and enormous benefits to their citizens (as an aside, this was America’s “Modernization Theory” in action, and it proved incredibly successful).

By the 1980s and 1990s, these four Asian Tigers, along with Japan, the United States and Europe, turned their attention to Asia’s laggard, the People’s Republic of China, and helped Deng Xiaoping pursue a similar path.

Taiwanese and Hong Kong business leaders poured massive investment into the PRC during this period, hoping to see their larger neighbor and cultural sibling, make similar economic and political reforms.

That all began to reverse starting 15 years ago as it became clear that the Chinese Communist Party would not follow through on the reform and opening that Deng had led the world to believe would happen. The chart above showing Taiwanese outbound investment to the PRC illustrates this shift.

While Hong Kong has succumbed to Communist domination through the National Security Law of 2020, Taiwan is an Asian Tiger again and it is using its wealth and influence to change the geopolitical dynamics just as it did in the 1980s and 1990s.

So, if Taiwanese investment isn’t going to the PRC, where is it going?

Taiwanese investment and more importantly, semiconductor manufacturing and microelectronics knowhow, is being spread to Japan, Europe, and the United States.

The single largest foreign direct investment in U.S. history was the TSMC investment of $265 billion to build advanced semiconductor manufacturing in Arizona. While this investment started during the first Trump Administration, it accelerated in the aftermath of Pelosi’s visit. If we were to place just that one $265 billion investment by TSMC on the chart above for “FDI, net inflows to China,” it would essentially equal the high-water mark of GLOBAL foreign direct investment into the PRC during the 2010s.

Has Xi’s coercion worked?

So, let’s think about Xi Jinping’s strategy to coerce Taiwan and force them to capitulate to their annexation by the Chinese Communist Party.

Starting in 2010 as the PRC began a series of aggressive campaigns against Japan over territory in the East China Sea and against the Philippines and Vietnam in the South China Sea, Taiwanese companies began reducing their exposure to the PRC economy from over 80% in 2010 to around 40% when Xi Jinping took power in early 2013.

That was an enormous shift that, frankly, the rest of the world missed.

As Xi took power, he initially treated Taiwan with kid gloves, hoping that the Taiwanese President, Ma Ying-jeou from the KMT, could push through a series of economic pacts between Taipei and Beijing that would essentially result in an economic union between the two countries (the Economic Cooperation Framework Agreement (ECFA), the Cross-Strait Trade in Services Agreement, and direct transportation links). When this collapsed under popular Taiwanese backlash in 2014 and the KMT lost to the DPP’s Tsai Ing-wen in January 2016, Xi decided to shift from carrots to sticks as he ramped up the pressure on Taiwan.

Xi adopted this policy of heavy-handed economic coercion and military threats based on one, critical assumption, that Taipei would bow to pressure because it had no economic alternatives to the PRC. CCP leaders believed that their rise to dominance was inevitable, that the West (aka the United States), after the Global Financial Crisis, was in permanent decline. Therefore, Beijing didn’t need to negotiate with Taipei, the CCP could dictate terms, and Taiwan would be forced to capitulate.

Xi and his cadres believed that their coercion would hobble the Tsai Administration, as Taiwanese business leaders and Taiwanese citizens demanded they bow to Beijing’s pressure. The CCP convinced themselves that they were the only economic game in town and that Taiwan would be forced to come crawling back, begging for a return to business as usual with the PRC.

The opposite happened.

As Xi hammered the PRC’s trade and investment ties with Taiwan, President Tsai adopted an economic diversification policy (“New Southbound Policy”) to further reduce Taiwan’s trade and investment dependence on the PRC and deepen ties with its neighbors in Southeast Asia, as well as other global powers, like Japan, the United States, Australia, and the European Union. While this economic diversification strategy (aka “decoupling”) was costly, Taiwanese business leaders made prudent, long-term decisions.

Rather than pressure Tsai to capitulate, the CCP’s economic coercion backfired by convincing Taiwanese business leaders that they had no alternative but to follow Tsai’s lead.

In 2026, Taiwan is much less vulnerable to PRC economic pressure and their ties to the rest of the world are much stronger, ensuring that any military action against Taiwan by the PRC would immediately involve the rest of the world.

Why did Xi misread the situation so badly?

I think there are a couple of explanations for why Xi Jinping misinterpreted the situation and pursued a self-defeating policy towards Taiwan.

First, the CCP fell prey to its own propaganda. Following the Global Financial Crisis, CCP leaders convinced themselves that the long dreamed for Marxist prediction that capitalism would collapse under its own weight had arrived. The slogan, “the East is rising and the West is declining” became a mantra early and that drove much of Xi’s thinking as he took the reins in early 2013. This confidence was evident during his first summit with President Obama at Sunnylands in August 2013 when Xi floated the concept of “New Type Great Power Relations” and it continued through the COVID pandemic and afterwards.

To now question this assumption and adjust the PRC’s strategy to account for its stagnation, is to question the entire program of Xi Jinping and Xi Jinping Thought. That is just something that intellectuals and Party members within the PRC cannot do given the rise of a personality cult around Xi Jinping. The Party is stuck operating under the assumption that the PRC will surpass the United States even as the hard evidence points in the opposite direction.

Second, the CCP is largely ignorant of dynamics within democracies and underestimates their resilience. The push to ensure that the PRC diplomats and foreign policy advisors are more “red” than “expert” has resulted in a distorted view of how the world outside the PRC operates. Xi Jinping and the rest of the Politburo Standing Committee have very little practical experience dealing with the outside world. These are deeply insulated Party men (they are all men), contacts with the outside world and experiences beyond the reach of the Party are viewed with deep suspicion and grounds for arrest, interrogation, and expulsion from the Party. Given their insulation from the outside world, exasperated by the COVID pandemic, CCP leaders have a tendency to listen to the people who tell them things they want to hear. This is where their reliance on the “Friends of China” becomes a liability.

These are not the kinds of men who possess the “strategic empathy” (a term popularized by H.R. McMaster, the former U.S. National Security Advisor) necessary for developing and executing a complex geopolitical strategy. They are prone to either mirror-imaging or acting on prejudiced ideas of how other types of regimes operate.

Third, by attempting to isolate Taiwan and not speak to Taiwanese leaders, the CCP assumed that they could force everyone else to isolate Taiwan’s leaders. This was a mistake. Two decades ago, Taiwanese leaders could hardly get a meeting with legislators or political leaders from other countries. But over the past five years there has been an enormous increase in visits by these leaders to Taiwan. While Speaker Pelosi visit is just the highest profile one, there have been countless others. For example, in the week I was visiting Taipei in the wake of the Pelosi visit, two U.S. State Governors were in Taipei to meet with Tsai Ing-wen as well. Multiple Japanese Prime Ministers have visited Taiwan just before their taking over the highest office in Tokyo. On a regular basis European, Canadian, and Australian legislators visit Taipei.

During this same time, the number of visits by legislators from these same countries to the PRC dropped off to a trickle. While folks point to the parade of leaders visiting Beijing over the past year, that masks the draught of visits in the preceding years and the absolute reduction of lower level visits.

Before Xi started his campaign to coerce and isolate Taiwan, Taiwanese leaders were largely isolated from the outside world. Over the past decade, Xi has made the CCP more isolated while encouraging the rest of the world to interact more with Taiwan and its leaders.

Lessons for Middle Powers…

Since early this year, there has been a lot of talk about how Middle Powers should navigate the rocks and shoals of geopolitics. Canada’s Mark Carney is perhaps the most famous for rising this with his speech at Davos, but this is the challenge facing other leaders like Germany’s Merz, Britain’s Burnham, and Australia’s Albanese.

Taiwan’s decade long decoupling from the PRC offers a roadmap for what other middle powers could do. If Britain, Germany, Canada or Australia could get even a sizeable fraction of Taiwan sized economic growth, their leaders would be heroes.

It is worth reading both Tom Shattuck’s analysis of the Pelosi visit, “Four Years Later: The Legacy of the Nancy Pelosi Visit on Taiwan’s Security” (Article #1 below), Chris Horton’s commentary on Taiwan’s shift away from the PRC, “Taiwan’s pivot away from China offers a lesson for democracies” (Article #2 below), and Peter Harrell’s excellent essay this week in Commonplace titled “The True Cost of Decoupling from China: Breaking with Beijing is more affordable than you think” (Article #8 below).

Unfortunately, it looks like Mark Carney is pursuing the opposite strategy of Tsai Ing-wen by embracing the PRC and making Canada’s future even more closely intertwined with the Chinese Communist Party. Perhaps this is due to the enormous leverage that the CCP wields over Carney’s Liberal Party, something his predecessor, Justin Trudeau enabled during his almost ten years in office.

In 2016, Tsai Ing-wen faced the question that Peter Harrell posed at the start of his essay and came to the same conclusion:

“Can the Western world afford to disentangle itself from China’s economy? A better question might be to ask whether it can afford not to.”

Taiwan’s position today and its economic performance suggests that decoupling from the PRC won’t result in an apocalypse, just as Pelosi’s visit four years ago didn’t cause one either.

Sure, it is a little scary to imagine decoupling from the PRC, but Taiwan did it over the past decade and they “might be better.” Let’s draw some inspiration from Lizzo: I got a feelin’ we’re gon’ be alright.

Oh, I’ve been so down and under pressure

I’m way too fine to be this stressed, yeah

Oh, I’m not the girl I was or used to be

Uh, bitch, I might be better

Turn up the music, turn down the lights

I got a feelin’ I’m gon’ be alright

Okay (okay), alright

It’s about damn time

***

Contingency

On different note, I just finished re-reading James McPherson’s excellent book, Battle Cry of Freedom: The Civil War Era.

Released in 1988 and the sixth volume of the “Oxford History of the United States” series, this book is the best single volume history of the American Civil War. In 1989, McPherson won the Pulitzer Prize for it. If you haven’t read it or if you haven’t read it in a while, I recommend picking it up and diving in. It is long, 904 pages, but the writing is clear and covers all aspects of that era, you will come away with a better understanding of that era, as well as an appreciation for contingency in history.

We live in a world that craves for theories to explain the present and predict the future. McPherson’s book helps you understand the role that contingency plays in understanding the past and present and in making the future.

I was inspired to re-read Battle Cry of Freedom after a visit to the Antietam National Battlefield last Sunday (it is why there wasn’t an edition last week). Walking the ground of the Cornfield, the Sunken Road, and Burnside Bridge reminded me of the sacrifices made that day which led directly to the Emancipation Proclamation and likely foreclosed the intervention of the UK and France on behalf of the Confederacy. The Civil War wasn’t won at Antietam, but the sacrifices there made the victory possible.

At Antietam on September 17, 1862, the United States suffered more casualties than any other day in American history. While the U.S. Army defeated Confederate troops under General Robert E. Lee and pushed them out of Maryland, Major General George B. McClellan failed to surround Lee’s Army of Northen Virginia and compel its surrender, extending the war for more than two years. By November Lincoln removed McClellan and committed the United States to a total war on the South.

This week marks the 162^nd anniversary of the Battle of Mobile Bay, another example of contingency.

On August 5, 1864, Rear Admiral David Farragut led his fleet to attack the forts of Mobile Bay, Alabama, as well as the Confederate fleet led by Admiral Franklin Buchanan on his flagship, the ironclad CSS Tennessee. Buchanan was the senior most officer in the Confederate navy.

On the morning of battle, Farragut ordered his four ironclads, the USS Tecumseh, Manhattan, Winnebago, and Chickasaw into a column to drive into Mobile Bay, with a second column of wooden ships following. Simultaneously, U.S. Army troops under Major General Gordon Granger began their assault on the forts. Farragut had landed Granger’s troops, volunteers from 77^th Illinois Infantry, the 34^th Iowa Infantry, the 96^th Ohio Infantry, and the 3^rd Maryland Cavalry on August 3 about 15 miles away from the forts and they had march to within a half mile by the morning of the 5th.

As the USS Tecumseh started firing on the forts at the mouth of the bay and headed towards the CSS Tennessee, she was hit by a torpedo under her hull, filled with water and sank. The Tecumseh lost all but 21 of her crew including the captain.

The fleet hesitated as the newest Navy ironclad was destroyed and Farragut responded with his now famous order: “Damn the torpedoes, Full Speed Ahead!” All 14 Navy ships made it through the Confederate minefield and started sinking the Confederate fleet.

Buchanan ordered the CSS Tennessee to drive directly into Farragut’s fleet hoping to ram his enemy as he had done at Hampton Roads in 1862. The much nimbler U.S. Navy gunboats surrounded the Tennessee with the Chickasaw at her stern and the Manhattan pounding her at point blank range with her 15-inch guns. This pounding eventually shattered the Tennessee’s wooden backings behind the iron plates killing and wounding much of the crew, including badly wounding Admiral Buchanan. Eventually, the Tennessee surrendered and Buchanan was taken prisoner. Navy sailors would then repair the CSS Tennessee, rename her the USS Tennessee, and return her to action against the Confederate forts at Mobile.

While it would be another two plus weeks before all the Confederate forts would fall, the defeat of Buchanan’s fleet on August 5, sealed their fate.

This victory, along with the Fall of Atlanta to Major General William Tecumseh Sherman on September 2, 1864, gave a huge boost to Northern morale. This was critical time for the United States as Abraham Lincoln faced long odds in winning the presidential election on November 8, 1864. In the summer of 1864, Democrats had nominated General George McClellan, the same McClellan who Lincoln fired after Antietam, as their candidate. Democrats were running on a peace platform, with a strong dose of racism which accused Republicans of waging the war solely for the benefit of blacks.

In many ways, McClellan was a stalking horse for Clement Vallandigham, leader of the Copperhead faction of anti-war Democrats. Vallandigham had been a two-term congressman from Ohio and in 1863 he was convicted by an Army court martial for publicly expressing opposition against the war after he gave a speech in which his supporters burned the offices of a Republican-aligned newspaper. He was exiled to the Confederacy where he boarded a ship to Bermuda and another one on to Canada. Jeff Davis, the Confederate President, saw an great opportunity to use Vallandigham to further undermine the United States.

In Canada, Vallandigham ran for governor of Ohio while in exile. He ended up losing to a pro-Union Democrat. After the loss, Vallandigham stayed in Canada (under the noses of that government… thanks Canada) and organized the Order of the Sons of Liberty, serving as the group’s leader. The group colluded with the Confederacy and used funding from the Confederacy to wage an insurgency in the United States and interfere in the Presidential Election of 1864.

By borrowing McClellan’s reputation as a General who was fired by Lincoln and who had publicly denounced the Emancipation Proclamation, Democrats thought they could win in enough border states and northern urban centers to push the Republicans out and repeal the Emancipation Proclamation. This looked very likely before the victories at Mobile Bay and Atlanta. Northern voters could see no end to the carnage and loss. The Confederacy was on the ropes, but its leaders felt they had a chance to pull victory from the jaws of defeat if the South could just hold out long enough for the Democrats to defeat Lincoln in the election. This would bring Vallandigham and his supporters to power with a Democratic Party Administration. Some felt this Democratic Administration would negotiate a peace agreement recognizing the South’s independence.

However, faced with these victories at Mobile Bay and Atlanta, McClellan was forced to side with the pro-war factions of the Democrats, splitting the Party’s unity and undermining Confederate attempts to engineer the defeat of Lincoln at the ballot box. Plus U.S. agents uncovered the activities of Vallandigham and his Order of the Sons of Liberty and made it public.

In November, voters gave Lincoln 55% of the popular vote and he won re-election over McClellan by a wide margin in the electoral college, 212-21.

One can imagine an alternative history in which Farragut retreats after the sinking of the Tecumseh and Sherman fails to push aggressively enough to turn General John Bell Hood out of Atlanta. McClellan goes on to win in November as Northern voters are demoralized by continuous setbacks. When McClellan takes office in March 1865, Vallandigham joins his cabinet, McClellan removes Grant as Commanding General of the Army, negotiates an armistice with the Confederacy and withdraws Lincoln’s Emancipation Proclamation. The 13^th Amendment is never passed, and the United States remains permanently divided.

But it didn’t go that way.

One last note about the scoundrel Clement Vallandigham.

After the war, Vallandigham returned to his native Ohio and attempted to run for the Senate and the House of Representatives, losing both times as a Democrat against reconstruction. He then changed his tactics in the spring of 1871 and adopted what was called the “New Departure” policy which sought to pretend that the Civil War never happened and that his party would now fully comply with the Constitution.

However, his political maneuvering came to an end in June 1871 when Vallandigham was 50.

As a lawyer, he was representing a client who was accused of murder in a barroom brawl north of Cincinnati. During the trial, Vallandigham was attempting to demonstrate that the victim had accidentally shot himself while drawing his own gun and that his client was innocent.

So Vallandigham stood in front of the jury, picked up a pistol off the table that he thought was unloaded, and put it in his pocket. Explaining to the jury that pistols can get caught on clothing and discharge, he pulled the pistol, it got stuck on his own clothing and he shot himself in the stomach.

A surgeon tried to remove the bullet, but couldn’t find it, and Vallandigham died the next day.

His demonstration was effective though; the jury acquitted his client and released him from custody.

Contingency can be bitch.

Thanks for reading!

Matt

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1. Four Years Later: The Legacy of the Nancy Pelosi Visit on Taiwan’s Security

   Thomas Shattuck, Global Taiwan Institute, July 30, 2026

…

Beijing wants to dictate the level and types of engagements and exchanges that foreign countries can have with Taiwan. And if they violate those terms, then Beijing will use that event as a pretext to escalate an already-planned course of action, such as increased coercive military pressure.

However, the United States and Taiwan’s allies and partners have for the most part rejected this modus vivendi. Foreign partners continue to visit Taiwan—even as Beijing continues to pressure them not to go, or sanction them for visiting, as was the case with New Zealand lawmakers in June 2026.

Despite the military imbalance between Taiwan and China, Beijing’s pressure campaign does not always result in total victory. Beijing used a variety of economic tools to coerce Lithuania after Taipei and Vilnius announced in 2021 that they would open unofficial representative offices in each other’s capitals. However, Lithuania did not back down—despite some teetering and doubts—and Beijing finally backed down in June 2026 with the establishment of diplomatic relations at the charges d’affaires level. Lithuania has made no apparent concessions related to Taiwan in response, though there is still time for Vilnius to appease Beijing. There is a clear lesson in this: standing up to Beijing can expose its weaknesses and defeat the narrative that it is all powerful.

Four years after Beijing used Pelosi’s visit as a pretext to escalate in the Taiwan Strait, countries have started to be more supportive of Taiwan, and to reject PRC narratives. There is still much progress to be made, but the Pelosi visit exposed the PRC’s machinations about Taiwan for the world to see.

The main point: The People’s Republic of China used the August 2022 visit to Taipei by then-US House Speaker as a pretext to escalate in the Taiwan Strait. As cross-Strait relations have continued to deteriorate since, Beijing’s actions have exposed a simple truth: it will use any excuse to increase its military coercion of Taiwan.

2. Taiwan’s pivot away from China offers a lesson for democracies
   Chris Horton, Nikkei Asia, July 28, 2026

Tsai Ing-wen’s trade shift reduced Beijing’s leverage and made Taiwan indispensable to the US.

The democratic world is reawakening to an age-old truth that was forgotten during the salad days following the end of the Cold War: Trade and national security are inextricably linked.

In most democratic capitals today, the question of how to manage trade relations with China without giving Beijing too much leverage isn’t going away anytime soon. With China sitting at the center of global supply chains, and with dominance in critical goods such as rare earths, decoupling is not an option.

Taiwan had this conversation more than a decade ago, and now it is reaping the benefits of pivoting away from China. While its position in the global tech supply chain is unique, it still provides proof to other democracies that it is possible to reduce China exposure and thrive. By making itself more important to the U.S. than ever, Taiwan has staked its survival on a new transpacific relationship underpinned by a new tech cold war in which its role is irreplaceable.

Twelve years ago, Taiwanese students occupied parliament to stop a bill that would have effectively enabled China to buy its democratic neighbor, rather than invade. The Sunflower Movement, as it became known, served as a referendum of sorts on Taiwan’s business relationship with China. The majority of Taiwanese supported reducing their country’s economic exposure to the communist giant that seeks to subsume their hard-earned democracy.

That consensus among Taiwanese that China’s economic leverage over them was a national security issue was a major factor in the election of Tsai Ing-wen. As an opposition candidate, she had campaigned on a platform partially consisting of rebalancing Taiwan’s trade portfolio away from China and toward democratic partners.

When Tsai was sworn in as Taiwan’s president in May 2016, she inherited an economy that may have been the most reliant on China among major economies. China was Taiwan’s top trading partner, with total trade exceeding $119 billion, followed by ASEAN at $62 billion, and trade with the U.S. coming in at a modest $47.4 billion. Taiwan’s economy grew by 2% that year.

Ten years later, things have changed.

For the first time in 25 years, the U.S. is importing more from Taiwan than from China. Taiwan is now not just a factory for America, but also a major investor -- see TSMC’s planned $265 billion investment in its U.S. operations. The U.S. is also now the biggest destination for outbound Taiwanese investment. In the first quarter of this year, Taiwan’s economy grew by 14.6%.

Underscoring the benefits of the pivot, Taiwan’s economy is projected to grow this year more than twice as fast as China’s -- 10% vs 4.3%.

And yet Taiwan has not stopped doing business with China, which remains its second-largest trading partner. What it has done, crucially, is almost completely halt its investment in China. At its peak, in 2010, more than 83% of Taiwan’s total outbound investment went to China. As of the first five months of this year, that figure is now 0.9%.

The embrace between the U.S. and Taiwan has major ramifications for the emerging new world order.

Taiwan is perfectly placed to ride the global AI infrastructure investment boom, and part of its appeal for many countries is its role in an emerging “non-red” tech supply chain for democracies that do not trust China-made hardware. It is now tightly tethered to the U.S. economy and will be so as long as the Democratic Progressive Party (DPP) keeps winning elections. The opposition Kuomintang (KMT), should it ever reclaim the presidency, would be likely to pivot back to China, given how close it is with the Chinese Communist Party (CCP) now.

While some may argue that Taiwan traded one superpower for another, it is imperative to note that unlike China, the U.S. does not seek to annex Taiwan. And given that no other country comes close to supporting Taiwan as much as the U.S. does, despite its slow delivery of arms packages and glib comments by President Donald Trump about Taiwan being a “negotiating chip,” Taiwan has the unenviable choice of China or the U.S. That’s it.

It is likewise worth noting that while Taiwan needs the U.S., the U.S. also needs Taiwan. It relies on Taiwan both for cutting-edge technology that it cannot get from China, and benefits from its role in the First Island Chain, which also includes Japan and the Philippines. Were Taiwan to fall, China would instantly become a Pacific power, and the world would have to accommodate an ascendant Beijing, with Washington rendered a has-been power.

In October 2024, I had the opportunity to sit down with Tsai for her first post-presidential interview. She spoke in fond terms of her time in the 1990s as legal counsel for Taiwan’s negotiations to enter the World Trade Organization. For the young lawyer Tsai, who had studied at the London School of Economics and Cornell, it would be a crash course in politics -- the art of the possible. Taiwan entered the WTO in November 2001 -- a major victory for the diplomatically isolated island nation. The talks that led to that achievement had lasted longer than a decade.

“I experienced this process of making commitments that involve politics, that is, striking a balance between different interest groups, also the professional way to achieve that,” Tsai reminisced. “This was a very important education for a future president.”

That experience would prove invaluable to Tsai during her eight years as president. Not only did it help her pivot Taiwan’s economic focus away from China and toward the U.S., it informed her when managing the Democratic Progressive Party, which she kept disciplined and on-message during her two presidential terms.

We are now living in a world that Tsai built, with Taiwan providing the hardware that is driving the AI transformation of the world’s largest economy.

Despite his comments about Taiwan as a bargaining chip, even Trump knows that American power is now highly reliant on Taiwan’s continued sovereignty. It is imperative that he make clear to Beijing that an assault on Taiwan would be an unacceptable attack on the U.S. economy.

3. Beijing Is Celebrating a Race It Never Ran
   Bobby Ghosh, Foreign Policy, July 23, 2026

A new Pew survey shows the world likes China more than the United States. Look closer, and the win belongs to nobody.

The Global Times could not help itself. Two days after the Pew Research Center published its annual audit of global opinion, the English-language megaphone of the Chinese Communist Party (CCP) ran an editorial with all the restraint of a victory parade. “When 27 of the 36 countries and regions surveyed ‘chose China,’” it announced, “it was not simply that China had ‘won.’”

Actually, the number is 25. The other two are countries where the gap is too small to mean anything. The editorial writer counted them anyway. But the rest of the Pew report is where the interesting material lives—and where the parade runs out of road.

There is no gainsaying the fact that the headline findings are startling. In 25 out of 36 countries, more people now view China more favorably than the United States. (In 22, more express more confidence in Xi Jinping than in Donald Trump.) The United States leads in six: India, Israel, Japan, the Philippines, Poland, and South Korea. Canadians and Mexicans, America’s closest neighbors, were not among them.

Pew has asked versions of this question since 2002 and never gotten results like these. The resulting coverage has been breathless and not just in the CCP’s own press. Bloomberg, among many others, described it as a soft-power win.

So, has China finally beaten the United States in the fight for global public opinion? Has the country that has spent two decades and untold billions of dollars trying to make the world love it succeeded at last?

The answer is no, and the survey itself says so, three chapters deep.

But before we get to that, it’s useful to revisit the definition of “soft power,” since everyone invoking the phrase this week seems to have skipped it. Political scientist Joseph Nye, who coined the term in this magazine 36 years ago, was pretty clear: Soft power, he said, is the ability to get the outcomes you want through attraction rather than coercion or payment. (Italics mine.)

Beijing’s cheerleaders keep letting that final clause drop because it inconveniences their narrative.

Consider where China’s numbers are strong. Per Pew’s breakdown, three-quarters or more respondents view China favorably in Indonesia, Kenya, Malaysia, Nigeria, Pakistan, and Sri Lanka. Seven in 10 or more view it unfavorably in Israel, Japan, South Korea, Sweden, and the United States. Plot favorability against per capita GDP, and the line slopes down. China does best where it lends, builds, and buys. Nye’s payment clause disqualifies that as soft power.

Now drill down into those numbers further. In only 11 of 37 countries (the 36 above plus the United States) do around half or more respondents say the Chinese government respects its people’s personal freedoms. Across North America, nearly all of Europe, Australia, Japan, and South Korea, roughly three-quarters or more say it does not. So people haven’t really changed their opinion of what China is.

Which brings me to the finding, buried in Pew’s Asia-Pacific chapter, that seems to have gone largely unnoticed.

Pew asked people, with no list in an open-ended question, to name the country that is the greatest threat to their own. Seventy-six percent of Filipinos picked China—as did 53 percent of Japanese and 52 percent of Australians. In South Korea, China placed second behind North Korea; in India, second behind Pakistan. Yet in Bangladesh, Indonesia, Pakistan, Sri Lanka, and Thailand, respondents ranked China as less of a threat than the United States.

Set the two groups side by side, and the pattern is unmissable: China is welcome wherever it arrives with money and feared wherever it arrives with power. Bridges, loans, and shipping containers buy affection; soldiers on borders and coast guard cutters in contested waters raise anxieties.

It’s easy for Kenyans and South Africans, at a safe remove, to think better of Beijing’s contribution to global peace. Among China’s neighbors, the numbers go the other way.

Pakistan is an interesting exception: It shares a border with China but rates it more warmly than any country Pew surveyed, at 90 percent favorable. Three-quarters of Pakistanis name China as their country’s top ally. But Pakistan is unusual among China’s neighbors in that the two have no border dispute. Pakistan’s quarrel is with India, and China is its hedge.

The numbers from Thailand, too, merit closer inspection. Overall, Thais name China a threat nearly as rarely as Pakistanis do—yet Thai concern about Chinese territorial conduct has climbed from 38 percent in 2024 to 52 percent this year, and Thailand is one of the very few countries where China’s favorability actually fell, by 11 points. Other polls have captured growing anxiety in Bangkok about Beijing’s ambitions in Southeast Asia.

Now to reckon with the American side of the report, where the collapse is close to total. In 2022, 83 percent of Canadians viewed the United States as a reliable partner; today, it is 35 percent. Ask Germans whether Washington considers the interests of countries like theirs, and 23 percent say yes, down from 60 percent three years ago—a more negative reading than during the Iraq War. Favorable views of the United States fell significantly in 15 of the 24 countries with year-on-year data. Confidence in Trump dropped in 16 of 24 and rose in none.

On the other hand, China’s median favorability across 37 countries is 51 percent against 39 unfavorable, which is nothing to sneeze at. In Italy, favorable views of China sit at 51 percent, up 20 points since 2022—this is the first time in nearly two decades of polling that half of Italians have looked kindly on China. Spain, at 54 percent, is net positive for the first time since 2011.

The U.S. standing has cratered before—in 2008, as George W. Bush limped out of office, and again in 2017, as Trump swaggered in. Neither time did China get past it: Jonathan Schulman, one of the Pew researchers, told the BBC that even at those low points, favorable views of China ran level with America’s or slightly behind. Which makes this year a genuine departure, and Beijing is entitled to say so.

What Beijing cannot claim is agency. Research suggests that expressions of pro-China sentiment often serve as a way for global audiences to register anger at the United States. Now, China has overtaken the United States not by dint of its own efforts but as a result of a U.S. collapse. (Pew was in the field from Feb. 8 to May 13, straddling the war with Iran, and its own regression analysis found opinion of the United States sinking week by week as the fieldwork rolled on.)

And collapses, even on this scale, can be reversed: German approval of the United States hit historic lows under Bush and then recovered almost overnight when Barack Obama took the oath. Hendrik Ohnesorge, whose study of the phenomenon I reviewed this year, calls it the “soft power pendulum.” It has swung with every U.S. election for three decades.

4. China needs a new growth model
   Eswar Prasad, Financial Times, July 28, 2026

This matters for Beijing’s sake and for the rest of the world economy.

China’s economy is on the mend. And it is in serious trouble. Recent data supports both narratives, but the calm on the surface belies deep-rooted problems that are hurting not just China’s but the world’s growth prospects.

Perhaps there is reason for concern but not panic. The economy is supposedly chugging along, registering GDP growth of about 4.3 per cent on an annual basis. CPI inflation has turned positive and producer prices are also rising, after a long period of deflation. Industrial profits seem to be rebounding.

Even official statistics cannot hide the underlying fragilities, though. Feeble growth in household consumption means that domestic demand is not keeping pace with the goods churned out by China’s industrial machine, leaving exports to fill the gap. Private-sector investment is falling, suggesting a poor business environment and lack of confidence in the government. Inflation is being driven by the rise in energy prices rather than stronger demand.

For its own sake and that of the rest of the world, China needs a new growth model. This requires some key shifts. First, it needs to reduce reliance on public investment and exports to drive growth. Second, it must resolve an unravelling property sector and find substitutes to generate output and wealth. Third, China has to move away from low-wage, low-productivity manufacturing to higher-productivity industries and the services sector. Fourth, it should lessen the role of the state in the economy.

Such moves are essential to deal with a shrinking population, reduce wasteful investment and boost employment and household income growth. Each is challenging, but the government needs to take concrete action to fix both cyclical and structural problems.

The upcoming mid-year meeting of China’s Politburo, the country’s main decision-making body, thus takes on special significance. Either the government will decisively start tackling the economy’s weaknesses or, as has happened in the past, it will punt these problems into the future, heightening the dangers for China and the world. The deeper the imbalances get ingrained, the harder it becomes to pull the economy out.

The government has good raw material to work with. President Xi Jinping’s desire to promote a high-tech, high-value-added economy and put China in a dominant position in the race for AI supremacy is delivering results. China has achieved remarkable success in high-tech manufacturing. Cheap, high-quality products — from solar panels to electric vehicles — are a boon to consumers worldwide and are helping with the much-needed energy transition away from carbon. These shifts are not doing much for household income or employment growth, though, particularly since an unravelling property market has destroyed a great deal of household wealth.

To its credit, the government has not shied away from reform. The household registration system, hukou, has been revamped, giving migrants better access to public services and allowing freer mobility of labour across provinces. The central bank is modernising its monetary policy instruments. Such measures are welcome but fall short of what the moment calls for.

More open competition would help. While the private sector faces intense competition, partly on account of subsidised overcapacity, state enterprises remain protected in many industries. The private sector needs a more predictable regulatory environment rather than being subject to capricious crackdowns. Reform of the financial system is needed to ensure that more credit flows to small and medium-sized enterprises, especially in the services sector. Local governments, which carry enormous spending burdens, need more stable revenue sources.

Monetary and fiscal stimulus have a role to play but only in tandem with a broader reform plan. The quick and easy solution of making credit cheaper and more plentiful is unlikely to get traction at a time when households are loath to spend and businesses to invest. Budget deficits and public debt are worse than official figures indicate, so caution is warranted. But judicious stimulus will inevitably be needed to smooth the transition to a different growth model.

China’s vision of providing international leadership while defending globalisation and free trade rings hollow if it fails to tackle its homegrown problems, and continues to count on the rest of the world to keep its own economy afloat. China’s future and its international standing depend on its leaders acting decisively. And soon.

5. Britain promised to protect Hongkongers from China. Why does it now seem ready to sacrifice them?
   Nathan Law, The Guardian, July 28, 2026

Activists under threat from Beijing are facing strange difficulties with UK immigration. Their safety must not be traded for warmer relations with China.

As authoritarian countries such as Russia, China and Iran are more active in engaging in long-arm strategies to silence their critics in the UK, transnational repression is garnering more attention. It is right that the Metropolitan police and other British law enforcement agencies have specific units and mechanisms to counter it. But it takes more than just confronting this long-distance repression to make political dissidents of these authoritarian countries feel safe in the UK, and the UK government is not living up to expectations.

The threat is real. Members of the Hongkonger community have received threats from the Chinese regime – some have had threatening letters, some people were deepfaked into sexual content, some even had families questioned and arrested back home. With the level of this targeting linked to the deterioration of Hong Kong politics, many have utilised the humanitarian pathway enabled by the previous government to relocate.

The British national (overseas) visa route, opened on 31 January 2021, allows Hongkongers to come and stay in the UK. It has already granted more than 230,000 visas. It’s seen as a success: as proof that the British government honours its commitment to those facing political pressure in Hong Kong. But now, with more high-profile critics of the Chinese regime facing obstacles in the UK’s immigration system, more doubt is being cast on whether the current government still takes the commitment seriously.

In May, Chloe Cheung, for whom the Hong Kong authority has issued an arrest warrant with a HK$1m (£100,000) bounty, applied for indefinite leave to remain but the approval was withheld (while her family’s applications were approved). The Home Office asked a victim of political persecution to explain her “criminality”, a term that echoes Beijing’s propensity to characterise political dissent as a crime. It has caused her an enormous amount of stress. Her leave to remain was granted after a public backlash and pressure from parliamentarians.

Finn Lau, who also has a bounty on his head, applied for citizenship in June 2025 and ticked every box. By March this year, the Home Office had spent more than eight months assessing his “good character”, despite a departmental target mandating a decision in 95% of applications within six months. The fear of his activism being counted against him loomed. He eventually had to make the incident public, and the Home Office finally approved his application after a series of public campaigns.

The latest case breaks my heart. Wu Chi-wai, 63, was chair of Hong Kong’s Democratic party and an elected legislator for eight years. He was jailed for more than five years because of his bravery in safeguarding Hong Kong’s freedom and democracy. After serving the jail time, he flew to the UK, where his family has settled. The British consulate in Hong Kong had told him he could apply for the BN(O) visa once he was inside the UK.

At Heathrow, he was refused entry. His passport was confiscated. He was told he would be removed to Hong Kong within seven days. He is in the country now, but only on temporary admission. The Home Office has called it an administrative issue with his paperwork, and has told the media of concerns that it was not a personal visit, but a bid to claim asylum. Only now, after his case became news here and abroad, has his length of stay been extended. He now has permission to remain in the UK with his family for six months.

Where is the humanity here? After years unable to hug his family or hold their hands, Wu’s reunion was halted almost before it began. What would he have done with his family in seven days, after so long a separation? Even asking this question feels cruel.

Most importantly, Wu had done nothing wrong. He did not enter the country illegally. He did not lie about his intentions. His history of facing political persecution should be seen as a crucial factor in why he decided to come to the UK to visit with his family, rather than seen as evidence that he may not comply with immigration requirements. He is entitled to apply for a BN(O) visa, or travel back to Hong Kong in a few months, depending on his circumstances. In a sensible world, there was no reasonable ground for authorities to reject Wu’s request – they should consider his circumstances and help.

Officials were right to think again, but they also need to reconsider their approach. A sense of security is not achieved only by countering transnational repression. It also comes from legitimately feeling that your host country is actively adopting measures that respect your choices and shield you from unjust political pressure. It is saddening that so many Hongkongers persecuted by the Chinese regime are facing hurdles and blockages from the UK government, exacerbating their already intense anxiety.

Britain made us a promise of humanitarian assistance. This promise should not be compromised because the current government seeks a warmer bilateral relationship with China. Removing all unjustifiable hurdles posed to persecuted Hongkongers is the first step to steer back to the UK’s promise. Britain must take it.

6. VIDEO – China and the Section 301 Investigations: The Legal, Economic, and Diplomatic Issues

   Scott Kennedy, Wendy Cutler, Mary Lovely, Claire Reade, and Wei Liang, CSIS, July 13, 2026

The Trustee Chair in Chinese Business and Economics is delighted to invite you to attend this public, online roundtable discussion on China and the ongoing Section 301 investigations into how forced labor and overcapacity could be harming U.S. trade interests. The Office of the U.S. Trade Representative is currently carrying out two Section 301 investigations into the potential negative impact that forced labor and overcapacity elsewhere may be having on the U.S. economy. These investigations cover many countries, but China is a central target in both.

Moderated by Trustee Chair Scott Kennedy, this roundtable will analyze the investigation from the legal, economic, and diplomatic perspectives, featuring insights from Wendy Cutler (Asia Society Policy Institute), Mary Lovely (Peterson Institute for International Economics), Claire Reade (Arnold & Porter), and Wei Liang (Middlebury Institute of International Studies at Monterey). The discussion will compare the current case with the 2017-2018 Section 301 investigation into intellectual property rights (IPR) theft by China and consider potential alternative approaches to managing commercial relations with China.

This event is made possible by generous support to CSIS.

COMMENT – First it would be great if CSIS to actually reveal WHO provided the “generous support” that made the event possible. The “Chinese Business and Economics” organization at CSIS is incredibly friendly to business interests that want to see these tariffs removed, so it would be much better if CSIS were transparent about who is supporting them.

That being said, I think this “roundtable” with a number of former USTR officials is quite useful.

The fundamental question that the moderator and the panelists largely ignore is: does the U.S. have a legitimate case for imposing significant trade restrictions and tariffs on a country like the PRC? Or must the United States rely on Geneva and the WTO to resolve these issues?

I would have liked to see the panel address a longer historical period and place the actions by the Second Trump Administration in the context of 30+ years of WTO failure. The moderator starts from the position that tariffs are wrong and harmful, but provides no explanation of why the U.S. Government shouldn’t place duties on imports from other countries.

Just because a bunch of businesses spent decades lobbying to reduce tariffs so that they could move manufacturing jobs to other countries and then sell those goods back to the United States while retaining a higher share of the profits, doesn’t mean that tariffs are bad per se. Will these tariffs shift supply chains? Probably… but our multi-Administration policy of unilateral tariff disarmament also shifted supply chains and that shift was at the cost of U.S. manufacturing jobs and the destruction of communities across the country.

I will say the framing by Wei Liang, that this is all the fault of the 2018 “Trade War” by Trump and its continuation by Biden, is a poor way to think about this and unsurprisingly Wei Liang completely covers up any responsibility by Beijing.

7. Trump administration bans new Chinese humanoid robots, to protect US AI buildout
   Alexandra Alper, Reuters, July 26, 2026

The Trump administration on Tuesday unveiled bans that target imports of new Chinese robots and power inverters, seeking to protect the U.S. AI buildout from national ​security threats and reshore key industries slated for explosive growth.

The Federal Communications Commission on Tuesday afternoon released the measures, which bar Chinese imports of new humanoid and quadruped robots, ‌in addition to connected power inverters, which enable renewable energy sources and batteries to connect to grids and data center equipment.

The restrictions, as first reported by Reuters, show the Trump administration is aiming to safeguard the U.S. artificial intelligence supply chain from Chinese threats of disruption, data theft and cyberattacks, while also driving firms to shift manufacturing to the U.S.

“These devices could create supply chain vulnerabilities that could disrupt U.S. economic and national security and could create a cybersecurity risk that threatened ​American critical infrastructure,” the FCC said in a statement. “The FCC will continue to do our part to secure America’s critical supply chains,” FCC Chairman Brendan Carr added in the press release.

The Chinese ​embassy in Washington said Beijing “urges the United States to heed the objective and rational voices of the business communities in both countries” and “stop smearing Chinese companies ⁠and threatening them with sanctions.”

China’s government will “take all necessary measures in response to any action that causes material harm to its interests,” the embassy said.

Some analysts forecast broad adoption of humanoid robots, topped with AI-enabled “brains,” ​in consumer and industrial arenas, while explosive data-center construction in the U.S. will depend on reliable sources of inverters.

Treasury Secretary Scott Bessent has warned that Chinese AI firms could face U.S. sanctions for stealing U.S. intellectual ​property.

U.S. officials are also keen to avoid another scenario as happened with rare earth minerals — critical inputs for tech manufacturing so dominated by China that Beijing has been able to leverage access to them to secure big wins on the international stage.

FCC LIKELY TO EXEMPT NON-CHINESE SUPPLIERS

Following Tuesday’s actions, the FCC is expected to exempt many non-Chinese suppliers from the restrictions, as it has done with recent bans on foreign drones and routers, four additional sources said.

The measures, which went into ​effect upon publication, apply only to robot and inverter models that have not yet been released. However, the FCC has the authority to revoke authorizations for sales of models that have already been authorized for ​purchase in the United States.

President Donald Trump is credited with bringing international attention to the tech threat posed by China during his first term, giving voice to concerns about intellectual property theft by Chinese firms, and the threat of state-sponsored ‌spying by Chinese ⁠telecom juggernauts like Huawei.

But he has so far taken a much more dovish approach during his second term, faced with Beijing’s aggressive use of export controls on rare earth minerals last year.

CHINESE ROBOT MAKER IN CROSSHAIRS

The robot ban is expected to hit Unitree, a world leader in humanoid robots with just under a fifth of global market share, according to Counterpoint Research.

The firm, which is one of three Chinese companies dominating the nascent but buzzy industry, was recently added to the Pentagon’s list of alleged Chinese military-backed companies, which can be a harbinger of tougher U.S. action.

Unitree recently formed a partnership with Nvidia to use the AI chip ​company’s cutting-edge Blackwell chip to power the brain of ​a Unitree robot. Nvidia has said data ⁠from the robots will remain in the U.S. and that Unitree’s biggest customers are U.S. academic and research institutions.

China hawks fear the robots could spy on key U.S. industries, extracting data and sending it to Beijing or disrupting critical functions.

Robots “collect data that could be leveraged by malign actors to surveil Americans, enhance the capabilities ​of foreign intelligence services, or to remotely commandeer the robots,” the FCC said on Tuesday.

U.S. Representative John Moolenaar, a Michigan Republican who chairs the House ​Select Committee on China and ⁠has proposed legislation targeting Chinese robots for national security reviews and potential bans, said the FCC move “protects our country and strengthens our nation’s robotics industry.”

China is the world’s largest maker of inverters, led by Sungrow Power Supply and Huawei, already heavily sanctioned by the U.S. Beijing has been expanding its share in the Western inverter market by driving down prices.

Reuters previously reported that the FCC was working on a Chinese inverter ban prompted by recent action ⁠by Europe and ​concerns around disruption and installation of malware.

Authorities want to avoid another Chinese government-linked hacking campaign like the one dubbed Volt Typhoon, revealed ​in 2023. By taking control of privately owned routers, the attackers sought to hide subsequent attacks on American critical infrastructure.

The U.S. Department of Defense is already barred from procuring solar photovoltaic cells, modules or inverters manufactured by a foreign entity of concern, which would ​include Chinese companies.

Unitree, Sungrow and Huawei did not immediately respond to requests for comment.

COMMENT - Great move! The FCC is a powerhouse of protecting national security.

I share my friend Divyansh Kaushik’s frustration…

8. The True Cost of Decoupling from China: Breaking with Beijing is more affordable than you think.

   Peter E. Harrell, Commonplace, July 30, 2026

Can the Western world afford to disentangle itself from China’s economy? A better question might be to ask whether it can afford not to.

Focusing only on the first question makes the answer seem obvious. Earlier this month, consulting firm EY published a study arguing that the “cost of replicating China-linked supply chains” for the United States and Europe could reach nearly $24 trillion by 2050. The group’s press release reads, “even partial decoupling risks locking in structurally higher prices, leaving consumers and taxpayers to absorb the trade‑offs,” giving the distinct impression that such decoupling does not make financial sense.

But any serious discussion of the costs of decoupling should put those costs in perspective, compare them to the costs of staying put, and consider that decoupling over a quarter century would be substantially more cost-effective than a sudden collapse of economic ties if, for example, China invades Taiwan.

Decoupling from China will certainly have costs. Companies who purchase inputs heavily subsidized by the Chinese state will have to pay more for alternatives. The West will need to make strategic investments in technologies where China leads, such as robotics and electric vehicles, if it wants to compete in those industries.

The EY study tallies the costs of Western investment in manufacturing, infrastructure, and research and development at $23.6 trillion—a large headline number. But let’s add some context. Using simple assumptions of 2% U.S. GDP growth through 2050 and 1.5% GDP growth for Europe and the United Kingdom, total economic output from the West will reach more than $1.7 quadrillion in nominal dollars. In that case, $23.6 trillion turns out to be less than 1.5% of total GDP.

For further comparison, the U.S. will spend about 3% of its GDP on defense this year, while the European Union, where defense expenditures are rising, will spend more than 2%. If China remains America’s preeminent strategic competitor over the next several decades—a view that most U.S. foreign policy and elected officials share—spending about half of what we spend on defense in order to decouple from the Chinese Communist Party is not an unreasonable proposition.

Even that comparison is likely too generous. Most of what EY counts as the cost of decoupling is actually investment to produce goods needed to do so, such as mines, processing facilities, and electrical grid equipment. These investments would not only create resilience against China but would employ millions of our own people in construction and production.

Weighed against those potential costs, meanwhile, are the costs of not decoupling and instead maintaining today’s strategic dependencies.

The U.S. and Europe got a taste of that cost last year when, in response to President Trump’s April 2025 trade war, China began restricting a range of rare earth mineral exports to the U.S. and its allies. Within weeks, U.S. automakers and other industries were warning of potential plant slowdowns and closures, ramping up pressure on the Trump administration to cut a deal to reduce trade tensions.

This summer, the International Energy Agency published a study arguing that if China fully implemented its rare earth restrictions, the cost to the West would be $6.5 trillion per year “of downstream production outside China … across the automotive, high-tech, defence and energy sectors.” Unlike EY’s $24 trillion estimate of an aggregate decoupling cost through 2050, this estimate is of annual costs until alternative supplies are created. Thus, a single year of the disruption IEA describes would consume more than a quarter of the entire purported 25-year decoupling bill.

A separate estimate, from Bloomberg Economics, looked at the potential cost of dependency on Taiwan for semiconductors. The model estimated that if a war between China and Taiwan cut off global supplies of semiconductors from both countries, it could cost $10.6 trillion in economic damages in the first year alone.

China has repeatedly demonstrated its willingness to use this leverage to its advantage, and not only against the United States. Just last week, China cut off 14 European countries from obtaining access to a variety of Chinese inputs, including critical minerals, in response to Europe sanctioning 14 Chinese and Hong Kong firms over their support for Russia in its war against Ukraine.

The mere threat of cutting off supplies gives China substantial leverage at the bargaining table, potentially forcing the U.S., Europe, and other allies to make trade and national security concessions in order to avoid losing access to key inputs. It is hard to put a specific dollar figure on this loss of national autonomy, but the costs are nonetheless real and substantial.

COMMENT - Probably the most important essay on this topic in the last few years.

Authoritarianism

9. Inside the Chinese fraud rings stealing billions from banks and retailers
   Gabrielle Fonrouge, et al., CNBC, July 17, 2026

10. China Wields Its Rare-Earths Leverage Over Europe with Export Controls
    Keith Bradsher, New York Times, July 24, 2026

11. China Protests Trump’s Latest Tariffs
    Micah McCartney, Newsweek, July 27, 2026

12. China hits back at criticism over excess industrial capacity as more US tariffs loom

    Chan Ho-him, Associated Press, July 28, 2026

China pushed back Tuesday against claims of overcapacity in the world’s second largest economy, ahead of the release of results of a U.S. probe on the matter that could result in new tariffs.

Massive capacity in a slew of Chinese industries, from automaking to solar panels, cement and steel manufacturing, among many others, has drawn increasing attention from Beijing’s trading partners in recent years. Although China’s own leaders have made rebalancing the economy a priority, slowing domestic demand has prompted companies to expand into markets overseas. Surging exports pushed China’s trade surplus to a record of nearly $1.2 trillion last year.

China has never sought a large trade surplus, the Ministry of Commerce said in a report titled “China’s Position on the So-called Excess Capacity Issue.” It took aim at recent talk of a “China shock 2.0” due to excess capacity.

13. Rags-to-riches Chinese fentanyl maker carries $5m bounty on his head
    Nikkei Asia, July 24, 2026

14. As China’s A.I. Gets Stronger, It Poses New Risks to Beijing

    David Pierson and Berry Wang, New York Times, July 30, 2026

China has cast itself as a champion of low-cost, open-source artificial intelligence technology that it says should be made widely available to the world. It has accused the United States of “A.I. hegemonism” as the Trump administration has debated regulating Chinese open-source A.I. models.

Unlike closed systems such as ChatGPT and Claude, open models can be downloaded, modified and run by anyone, including with safeguards removed. The open approach, which is lower in cost, has won Chinese A.I. systems, made by companies like Alibaba and Moonshot, a start-up, millions of global converts, including Silicon Valley companies like Airbnb and DoorDash.

But the same openness that has helped Chinese models win influence abroad now raises concerns for Beijing, particularly about security and the potential threats the technology might pose to the Communist Party’s rule. In a speech earlier this month, China’s top leader, Xi Jinping, said that even as China supported openness in A.I., the government needed to “constantly refine measures to forestall loss of control.”

The party is concerned that the technology could be used by hackers, scammers, terrorists or other bad actors seeking to cause harm in China; that models could circumvent its tight censorship filters; and that the government could be blamed if Chinese systems spin out of control elsewhere.

15. Germany Maps China’s Weaknesses in Preparation for a Trade War
    Kamil Kowalcze and Arne Delfs, Bloomberg, July 28, 2026

16. Scandal Exposes Limits of China’s Scientific Rise
    James Palmer, Foreign Policy, July 28, 2026

17. 50-year-old Greenfield Bookstore to close following arrests, national security raid
    James Lee, Hong Kong Free Press, July 29, 2026

18. Hong Kong’s Securitized Media Culture

    Zack Chiang and David Bandurski, Lingua Sinica, July 28, 2026

A weekly TV series made by Hong Kong’s security bureau, recasting political prosecutions as morality tales, reveals a troubling convergence of media and political power in the city.

“I understand the things I did seriously harmed the country.” With these words last month, a contrite Leon Tong Ying Kit, the first person convicted under Hong Kong’s National Security Law in 2021, opened the debut episode of “NS Files: Decoded,” a televised series that reviews five separate cases that have been prosecuted as national security crimes. First airing on June 30 to mark the law’s sixth anniversary, the series has been pushed prominently and insistently through public advertising and on government service websites in the territory.

Episodes two and three touch on the publication and distribution of the allegedly seditious children’s book Sheep Village, and the prosecution of Hong Kong radio producer Tam Tak-Chi, arrested in 2020 for a public protest during which he shouted the slogan “Liberate Hong Kong! Revolution of our times,” which has been banned in the city. The same slogan is also at the core of Leon Tong’s case in episode one. On July 1, 2020, within hours of the national security law’s implementation, Tong rode a motorcycle through the city’s Wan Chai district flying a black flag bearing the slogan. He was arrested at the scene and charged with “incitement to secession” and “terrorist activities.” One year later, he was handed a nine-year prison sentence.

Prosecutions for such acts of protest have become a regular feature of political life in Hong Kong since 2020. “NS Files: Decoded”, a slick production cut with live footage of arrests and street violence and interviews with national security police, is a stark illustration of another growing trend over the past six years — the close coordination of national security police and local media outlets to dramatize such political prosecutions for viewing audiences.

Hosted by a seasoned media professional and a member of the national security establishment, “NS Files: Decoded” is a partnership that underscores the stark changes the national security push has brought for a media environment that once counted among Asia’s freest.

19. He Helped China Repress Uyghurs. He Says He’s a Victim, Too.
    Li Yuan, New York Times, July 28, 2026

20. Australia is flying blind on Chinese drone data
    Tilla Hoja, API Strategist, July 26, 2026

21. America Still Has the Upper Hand Over China
    Ben A. Vagle and Stephen G. Brooks, Foreign Affairs, July 24, 2026

22. Iranian FM meets Wang, Lavrov at SCO amid divergences
    China-Russia Report, July 28, 2026

23. Stop Auditing China’s Support for Russia – Start Assessing It

    Sari Arho Havren, Henry Jackson Society, July 24, 2026

In January this year, China’s Ambassador to the United Nations offered what he plainly considered a decisive rebuttal of Western criticism: had China really been helping Russia, he argued, Russia would already have won the war. A few months earlier, China’s top diplomat Wang Yi had told the EU’s High Representative something rather different – that China cannot afford to see Russia lose, because Washington would then turn its full strategic attention to China and the Indo-Pacific.

These statements cannot both be true. But both are revealing, and between the flat denial and the candid admission lies a problem in how the West has come to understand this relationship. For more than four years, we have treated China’s support for Russia as a customs problem. Each new disclosure- a spike in fibre-optic cable shipments, a surge in machine-tool exports, satellite imagery shared with Russian forces, and most recently the covert training of Russian servicemen at Chinese military facilities- arrives as a discrete story, generates a news cycle, and is filed away. We audit the variables one at a time. What we rarely do is assess what they add up to.

My report for the Henry Jackson Society, Calibrated Collusion – China, Russia and the War in Ukraine, argues that the sum is far greater than the parts. Taken individually, each stream of support can be minimised or explained away. Taken together, they describe a single, deliberate policy authorised at the highest levels of the Chinese Communist Party: China has become the indispensable enabler of Russia’s war effort, economically, technologically, and diplomatically, whilst calibrating every element of that support to remain below the threshold that would trigger the full weight of Western retaliation.

The evidence is not obscure. Over one-third of Russia’s entire oil export volume now flows to China, and some Western analysts estimate that Chinese energy purchases effectively bankroll up to sixty per cent of the Kremlin’s war budget. In addition, Beijing accounts for roughly three-quarters of Russia’s imports of high-priority battlefield goods. Nearly all bilateral trade is settled in yuan and roubles, increasingly through China’s own payment infrastructure. But no Chinese tank or missile has appeared on the Ukrainian battlefield, and that is precisely the point. Beijing supplies the engine and the fuel of Russia’s war machine whilst keeping its hands off the trigger. We keep searching for the smoking gun, and in doing so we miss that China is supplying everything one needs to manufacture it.

24. Calibrated Collusion – China, Russia and the War in Ukraine

    Sari Arho Havrén, Henry Jackson Society, July 19, 2026

In late February 2022, just three weeks after Beijing and Moscow declared a bilateral partnership with “no limits” in scope, Russia launched its full-scale invasion of Ukraine. At first, China’s support for Russia’s war was measured and cautious: in the initial weeks, Beijing appeared to distance itself from the conflict, emphasising neutrality and calling for talks. Yet over time, China’s assistance became increasingly pivotal for the Kremlin, gradually expanding across economic, technological, diplomatic, and political domains.

British politicians, including senior government ministers and members of parliament, have raised persistent concerns about China’s support for Russia’s war in Ukraine. In October 2024, during a visit to Beijing, then Foreign Secretary David Lammy urged his Chinese counterpart to investigate and stop Chinese companies from supplying Russia’s military. He warned that such support risks damaging China’s relations with Europe while sustaining Russia’s war effort. Lammy has continued to raise these concerns in parliamentary statements and meetings.

Similar warnings have been voiced across the European continent. Ursula von der Leyen and Kaja Kallas have been among the most outspoken European Union leaders in criticising China’s support for Russia. In April 2026, Finnish Foreign Minister Elina Valtonen went so far as to declare that China’s close ties with Russia should be a “disqualifying factor” in Beijing’s bid to open free-trade negotiations with the European Union, a statement that illustrated both apprehension about the close Sino-Russian ties and the fragility of European unity: decisions would require the support of all twenty-seven member states. Valtonen was, in effect, announcing a veto connected to China’s support for Russia. Yet her intervention also highlighted how divided the bloc remains on China, given the depth of ties that countries such as Spain and Germany maintain with Beijing.

Overall, Beijing’s reluctance to condemn Russia’s invasion, and its refusal to respond positively to European requests that it restrain President Vladimir Putin, have further strained relations with Ukraine’s supporters and deepened political distrust.

25. The PRC Launches a Diplomatic Campaign Against Japan and The Philippines – and Steps Up Naval Activity East of Taiwan

    John Dotson, Global Taiwan Institute, July 30, 2026

26. Girl’s undisclosed death in gene-editing trial raises red flags in booming Chinese industry

    Simone McCarthy, CNN, July 31, 2026

27. A fatal reaction: A cutting-edge gene-editing trial in China went disastrously wrong. A family wants accountability

    Brendan Borrell, Science, July 23, 2026

Environmental Harms

28. China Refuses to Sign Agreement to Combat Illegal Fishing

    ADF, July 28, 2026

China has refused to sign an agreement meant to improve efforts to combat illegal, unreported and unregulated (IUU) fishing. Beijing commands the world’s largest distant-water fishing fleet and is the world’s worst illegal fishing offender, according to the IUU Fishing Risk Index.

Seven African countries­ — Cameroon, the Gambia, Ghana, Guinea, Liberia, the Republic of the Congo and Somalia — signed the Mombasa Declaration during the 11th Our Ocean Conference in Kenya in June. Belgium, Chile, the Dominican Republic, France, Panama, Papua New Guinea, Peru and South Korea also signed.

The agreement supports the Global Charter for Fisheries Transparency, which aims to improve governance by modernizing digital vessel registries, publishing fishing licenses, authorizations, access agreements and quota allocations. It is also meant to ensure that all industrial fishing vessels have unique vessel identifiers and collect information on the beneficial owners of vessels and fishing companies to target and hold accountable illegal fishing violators.

COMMENT – We covered the 11^th Our Ocean Conference a few weeks ago (see Article #34 in the July 12, 2026 issue titled “Born to be Alive”… I sure hope someone is looking into World Resources Institute (WRI) and their complicity in having Taiwan blocked in favor of the PRC which is the biggest offender when it comes to ecological damage to the world’s oceans).

Let’s consider what happened at that conference in Kenya. In the run-up to the conference, the CCP demanded that Taiwan be excluded from participating even though Taiwan has participated since the inaugural conference set up during the Obama Administration and has contributed millions to the causes and has signed out to other agreements.

The PRC showed up at this conference, which covers in part, massive illegal fishing and that damage that does to ocean ecology. The PRC is the biggest offender when it comes to illegal fishing and it refuses to sign an agreement meant to curb the worst behaviors of its fleet.

I wonder if WRI, who runs that conference on behalf of the U.S. and other stakeholders, made any mention of this failure by the PRC?

Nope… it’s just critical of the United States, not a single word of disappointment or rebuke of the People’s Republic of China for failing to sign an agreement on Illegal, Unreported, Unregulated (IUU) fishing… or any of the other horrendous environmental damages caused by the CCP.

29. Senators urge sanctions on China’s fishing support fleet

    National Fisherman, July 29, 2026

A bipartisan group of U.S. senators is calling on the Treasury Department to expand sanctions targeting China’s distant-water fishing fleet by focusing on the vessels that keep it operating at sea, arguing the move could significantly disrupt illegal, unreported, and unregulated (IUU) fishing.

In a letter sent to Treasury Secretary Scott Bessent, Sen. Todd Young, R-Ind., and eight Senate colleagues urged the administration to sanction 29 Chinese support vessels, including refrigerated cargo ships, fuel tankers, and floating service bases, along with their owners. The lawmakers contend those vessels are the logistical backbone of China’s distant-water fleet, allowing fishing vessels to remain at sea for extended periods while avoiding ports where sanctions and enforcement actions are more effective.

“China’s distant water fishing fleet continues to disrupt global and regional fishing economies,” Young said in a statement. “Through overfishing and illegal incursions into foreign waters, China seeks to undermine the global fishing industry until there is nothing left. The United States must take steps to combat these activities and promote American fishing practices, which remain the gold standard for sustainable fishing.”

The letter was also signed by Sens. Ted Cruz, R-Texas; Dan Sullivan, R-Alaska; Andy Kim, D-N.J.; Tom Cotton, R-Ark.; Chris Coons, D-Del.; Roger Wicker, R-Miss.; Rick Scott, R-Fla.; and Marsha Blackburn, R-Tenn.

30. How China’s illegal fishing fleet evades justice

    Washington Post, July 27, 2026

China’s illegal deep-sea fishing industry wrecks maritime ecosystems and keeps coerced labor trapped on the high seas. Sen. Ted Cruz (R-Texas) secured $170 million last year for tracking this shadow fleet to enable the U.S. government to impose sanctions on its support vessels. But the Department of Homeland Security, under ex-secretary Kristi L. Noem, spent the money on other priorities.

The Constitution gives Congress the power of the purse, and the maneuver shortchanged an important foreign policy goal. A bipartisan coalition wants the White House to make it right.

Almost all of the dollars intended for improving “maritime domain awareness” went instead to buying counter-drone technology for the World Cup and America250 events, according to Punchbowl News. Defending the country from attacks is the most fundamental responsibility of government, and Congress surely would have been willing to appropriate that special security funding if asked.

COMMENT – Let’s get this system set up for tracking the PRC’s shadow fleet… though I’m sure someone could do it for less than $170 million… perhaps that chunk of money should be spent on “doing something” about the ships, not just tracking them.

31. Emissions trading: China wants to give coal sector more leeway

    Nico Beckert, Table, July 27, 2026

The People’s Republic wants to lower the threshold at which coal-fired power plants must buy carbon allowances far less than planned. This reduces the incentives to cut carbon emissions.

32. China Energy and Emissions Trends – May 2026 snapshot

    Qi Qin, Centre for Research on Energy and Clean Air, June 18, 2026

Fossil power generation rebounded in May as exceptionally weak wind conditions limited clean power growth. Industrial activity remained subdued, while energy imports and refining weakened, and batteries and NEVs stayed strong.

Key findings

Fossil power generation rose 2% year-on-year in May, mainly because of exceptionally weak wind conditions. Wind speeds in March, April, and May were all lower than in any of the previous 10 years; without this drop, rising clean power supply would likely have reduced coal- and gas-fired generation. Curtailment may also have played a role, but weak wind was the key driver and is likely to reverse quickly.

Thermal power commissioning in the first four months surged by 116% year-on-year, reaching a record high. Solar power capacity additions fell by 52% year-on-year due to the high base in the same period last year, but remained above the level seen in the first four months of 2023. Wind power additions rose by 6.5%.

In May, shipping disruptions through the Strait of Hormuz continued to weigh heavily on China’s energy imports, with crude oil imports falling by 29% year-on-year. Coal imports also declined by 7.7%, mainly due to relatively high import prices. The pressure on energy supply also fed through to the refining sector: average daily throughput fell to its lowest level since 2023. Refiners are increasingly drawing on their own inventories to keep operations running.

Domestic natural gas output fell 2.2% year-on-year in May, marking its first monthly year-on-year decline since 2017, partly due to a high base in the same period last year and weaker seasonal demand. Cumulative output in the first five months still rose 1.7%. Gas imports stayed at the same level as the same period last year.

Industrial value-added growth rebounded modestly in May but remained weak, with steel and cement output continuing to fall year-on-year. Cement output remained at its lowest level for the same period since 2020, while chemical fibre output extended a decline that began in April, when output fell for the first time in 22 months. Non-ferrous metal output remained elevated, up 2.2%.

Solar cell production fell by 20.4% year-on-year, reflecting weaker domestic installations. The decline suggests that China’s solar manufacturing sector is adjusting after last year’s exceptionally rapid deployment boom. Battery output remained strong in May, rising 55.2% year-on-year, supported by energy storage demand and exports.

New energy vehicles (NEVs) continued to outperform the broader auto sector in May, with their share of total vehicle production rising to 57% and exports more than doubling to a record high for the month. Production of fuel-burning vehicles fell sharply, by 22%.

Coal power rose again as wind underperformed

Foreign Interference and Coercion

33. Canadian Intern Accused of Spying Inside NATO Stands in Closed Belgian Courtroom Today as Ottawa Faces Questions About the Screening That Cleared Her

    Sam Cooper, The Bureau, July 28, 2026

A Canadian woman linked to China stands today in a secret pre-trial court in Brussels, where a judge will weigh whether to keep her in custody on suspicion of spying inside the North Atlantic Treaty Organization’s (NATO) military command for a country prosecutors will not name, and of belonging to a criminal organization they will not describe.

Belgium’s Federal Prosecutor’s Office has said only that she is a Canadian national of Chinese origin, an intern at the Supreme Headquarters Allied Powers Europe in Mons, arrested Friday.

The Federal Prosecutor’s Office, responding to detailed questions from The Bureau, said the appearance comes five days after the arrest warrant was issued, and that the pre-trial chamber will decide whether her detention should be maintained.

What is not routine is how she reached a desk inside allied command.

By standard Canadian security procedures, she would have been vetted by the Canadian Security Intelligence Service (CSIS) before being hired at NATO. Asked by The Bureau how that screening is conducted, and whether the woman had previously held a Canadian government position or clearance, CSIS referred the questions to Public Safety Canada, which said it was not in a position to comment on specifics while the matter remains under investigation.

34. Canadian Security Agencies Cleared China-linked NATO Suspect Vetting Despite a Court Finding of Fraud in Her CBSA Job Application

    Sam Cooper, The Bureau, July 30, 2026

The Canadian woman of Chinese origin held in Belgium on suspicion of spying inside the North Atlantic Treaty Organization’s (NATO) military command for a third country, and of membership in a criminal organization, was vetted by CSIS and the RCMP and cleared for the posting — despite a finding by Canada’s public service watchdog that she committed fraud in a hiring competition run by the CBSA, CSIS’s sister agency inside the Public Safety Canada portfolio.

The Federal Court upheld that finding in a published judgment 11 months before she took up her post at allied command.

Whether the fraud finding ever surfaced in the screening, Ottawa will not say. As The Bureau reported Tuesday, CSIS referred questions about its vetting to Public Safety Canada, which declined to comment on specifics. Global Affairs Canada, which makes the final decision to grant, deny or revoke clearances for Canadians taking positions with international organizations including NATO, would not discuss the case.

She was arrested Friday, a day after searches of her home and her workplace at the Supreme Headquarters Allied Powers Europe in Mons, after her conduct was flagged by alliance security services.

On Tuesday a Belgian pre-trial judge refused her release and ordered her held for at least another month as the investigation continues. Thursday, the prosecutor confirmed the suspect has appealed that decision.

She has not been officially identified; Belgium’s Federal Prosecutor’s Office told The Bureau it never discloses the identities of suspects in ongoing investigations, and The Bureau is currently withholding her name for that reason.

CBC News identified her Wednesday through open-source techniques, Reuters reported her earlier as Claire Z., and the European outlet Follow the Money published similar material. The Bureau had independently assembled the same online resume profile this week and held it.

Her trajectory through the Canadian government’s national security and sensitive information and technology departments is on the public record.

She was a data scientist at the National Research Council for six months in 2017, an economist at Statistics Canada from April 2018 to October 2022, and a systems engineer at the Canadian Space Agency from May 2022.

She lists a policy analyst role at the European Space Agency, work in the economic research and statistics division of the World Trade Organization, and seats on mirror committees of the Standards Council of Canada.

She took a master’s degree at the University of Ottawa in 2022. In July 2025 she posted in a Mons housing group that she was arriving for a six-month internship at allied headquarters, CBC reported. A security source told Reuters she worked in its information technology department.

35. How China exploits EU divisions over trade
    Joe Leahy, Peter Foster and Andy Bounds, Financial Times, July 26, 2026

36. Silicon Valley Splits Over Closing the Borders to Chinese A.I.
    Mike Isaac, Kate Conger, Ana Swanson, and Meaghan Tobin, New York Times, July 26, 2026

37. Taiwan Conquest Film Shelved

    Zack Chiang, Lingua Sinica, July 31, 2026

A Chinese blockbuster dramatizing the 17th-century Qing conquest of Taiwan has been abruptly postponed. Why are China’s authorities so uneasy about a film that was meant to celebrate “unification”?

Scheduled for release over the past weekend, the Chinese action war film The Belief, a dramatic depiction of the 1683 Qing conquest of Taiwan, seemed on track to define a new and, for many, concerning genre — the “forced-unification blockbuster.” But the film, it appears, has run aground, its planned debut coming and going in silence.

Produced by a consortium of investors with a reported budget of 500 million yuan (about 70 million dollars), and backed by the state-owned Changchun Film Studio, The Belief centers on the 1683 naval battle at Penghu, an island 50 kilometers from the main island of present-day Taiwan, a country official policy in Beijing insists has been “an inalienable part of Chinese territory since ancient times.” The setting is the outset of the Qing dynasty (1644-1911), as Qing forces seek to defeat remnants of the Ming dynasty (1368-1644) holding out in Taiwan.

The allegorical connection to present-day tensions, which have resulted in persistent military exercises in the strait and containment of Taiwan internationally, is so plain it scarcely needs mentioning. The Chinese Communist Party (CCP) regards the island as unresolved business from a civil war fought in the 1940s with the Kuomintang, now one of several political parties in a democratic Taiwan.

The Belief has been heavily promoted by state media, including the CCP’s People’s Daily, since its first trailer dropped on October 25, 2025, the 80th anniversary of Taiwan’s “retrocession” from Japanese colonial rule at the end of World War II. An announcement on May 22 said it would be released on July 25. But the film, with its swashbuckling scenes of battles at sea, has so far not set sail — leading to speculation about what calculations China might be making.

And this is reportedly not the first delay the film has faced. According to BBC Chinese, it was already pulled from a planned Lunar New Year release back in February — prior to the May reschedule giving it the summer release date that passed on Saturday.

Media outside China have noted over the past week that the film’s official Weibo account has not been updated since June, and that the film remains unavailable on China’s domestic movie-ticketing website.

38. ‘One Network, Two Systems’: The Research Security Risks of UK / China University Cyber Partnerships

    Eugenio Benincasa, UK-China Transparency, July 29, 2026

UK‑China Transparency (UKCT) has released ‘One Network, Two Systems’, a landmark investigation revealing that the UK maintains more cyber‑related university partnerships with China’s defence‑linked institutions than any country in Europe, including extensive collaborations with universities authorised to conduct classified weapons research.

Considering the growing record of Chinese state cyber hostility against the UK, this is a remarkable finding. British organisations spend billions of pounds countering this phenomenon. 

The report identifies 34 UK/China partnerships in cybersecurity, computer science, and telecommunications, nearly matching the total across all 27 EU member states. Thirteen of these involve Chinese universities embedded in China’s defence research system, including four institutions holding Top Secret military research clearance.

“Some of these partnerships involve Chinese institutions deeply embedded in China’s defence research system, creating structural risks that the UK’s current research security framework is not designed to address.” (Report)

Key Findings

1. UK universities are exceptionally structurally exposed to China’s defence research ecosystem. The report documents that the UK has more Chinese government-registered partnerships with China’s highest‑risk defence universities than any other country – the “Seven Sons of National Defence” plus Beijing University of Posts and Telecommunications (BUPT), all of which are authorised to conduct classified weapons R&D – than any other country globally (including Russia).

2. There is deep operational integration between Chinese partner universities and the PLA. Case studies of BUPT and Beihang University reveal direct collaboration with the People’s Liberation Army, defence‑industrial conglomerates, and intelligence‑linked entities. Faculty profiles show recurring patterns of classified funding, redacted project titles, and research applied to PLA cyber, aerospace, and electronic‑warfare scenarios. “Analysis of over 100 BUPT and nearly 80 Beihang faculty profiles reveals recurring patterns: explicit military or defence‑aligned funding… and connections to intelligence agencies including the Ministry of State Security.” Moreover, during the period of research of UKCT’s paper, information relating to defence work was removed from some faculty staff profiles, raising questions about deceptive behaviour and the limits of open-source due diligence.

3. UK partnerships are deeply institutionalised, and are expanding. The most extensive collaboration, the BUPT/Queen Mary University of London Joint Education Institution, has produced more than 9600 dual‑degree graduates and generated 465 co‑authored computer‑science publications. Many BUPT faculty involved in this collaboration simultaneously conduct defence‑designated research. Nearly half of all UK cyber partnerships with China were established since 2020, indicating rapid expansion despite rising security concerns.

4. UK research security mechanisms appear insufficient. The report finds that the UK’s current framework (including Trusted Research, RCAT, and ATAS) remains advisory, fragmented, and focused on individuals rather than institutions, leaving major structural risks unaddressed. The paper also includes evidence of defence work and affiliations removed from academic profiles in China, attesting to the limits of due diligence based on open sources and trusted inquiry, and some efforts to conceal military connections.

5. Other countries have already acted. The USA, Canada, Taiwan, the EU, and several European universities independently have imposed categorical restrictions on partnerships with China’s defence‑linked universities. The UK has not.

Policy Recommendations

UKCT has not historically proposed policy recommendations, its usual practice being to set out the evidence and to allow policy makers to draw their own conclusions. However, on this occasion we have allowed the report’s author, Eugenio Benincasa, to propose five targeted reforms himself:

Establish a UK Named Research Organisation List modelled on Canada’s approach to identify high-risk institutions and guide restrictions on grants and institutional partnerships, including joint programmes and co-supervised doctorates.

Mandate research security officers at universities engaged in high-risk partnerships to oversee such partnerships, supported through access to government threat briefings and specialised training. 

Address financial dependency through relief funding to enable institutions to terminate or restructure high-risk partnerships and to prevent viable research projects from being blocked due to concerns about high-risk partners or funders.

Encourage pre-travel security briefings and post-travel reporting for staff engaged in China-related teaching, supervision, and partnership management.

Maintain balanced and consistent messaging, clearly communicating that research security is about targeted risk management, not blanket restrictions on collaboration with China.

Author’s Comment

Benincasa said “the UK’s research security architecture has not kept pace with the scale and structure of university partnerships with China. This report shows that the risks are systemic, not incidental, and that other countries have already moved to address them. The UK appears to need a coherent, institution‑level response.”

COMMENT – Why is Britain so blind to these kinds of vulnerabilities?

39. University working with MoD has links to Chinese military

    Richard Holmes, The Telegraph, July 30, 2026

Queen Mary is partnered with Beijing institution developing secret underwater capabilities for China.

A British university selected for a government defence partnership also works with a Chinese institution developing underwater military projects, The Telegraph can disclose.

Queen Mary University of London, a founding member of the Government’s Defence University Alliance (DUA), is partnered with a university in Beijing that develops top-secret underwater capabilities for the People’s Liberation Army.

The DUA aims to strengthen domestic research and help graduates land British defence jobs in cyber, robotics and AI. A £182m investment supports the scheme, which involves 35 founding universities from across the country.

An investigation reveals that Queen Mary is one of several founding members of the DUA to hold research partnerships with Chinese institutions linked directly to Beijing’s military in fields related to cybersecurity, computer science and telecommunications.

Seven of the selected institutions also have partnerships with Chinese universities. Four of these Chinese universities maintain direct links with Beijing’s military apparatus.

The partnerships follow warnings from spy chiefs that China could have access to British intelligence and challenge British interests.

Anne Keast-Butler, the GCHQ director, warned in May that China was a “tech superpower with sophisticated cyber, intelligence and military capabilities”.

Universities in the UK defence scheme have been found to share students, information and faculty with Chinese institutions which are linked to military projects and provide recruitment channels into state-backed firms accused of human rights abuses.

One of the oldest and most extensive collaborations is between Queen Mary and the Beijing University of Posts and Telecommunications (BUPT).

The partnership has produced more than 9,600 dual-degree graduates despite BUPT’s direct involvement in the development of top-secret underwater military for China’s People’s Liberation Army and its strategic role in the country’s cybersecurity ambitions.

It comes after explicit warnings from British intelligence chiefs about the increased cyber risk stemming from Beijing.

In 2024, Ken McCallum, the director-general of MI5, briefed vice-chancellors that hostile states were targeting sensitive British research to boost their militaries and undermine British national security.

Despite the warnings, UK universities have continued to enter partnerships with Chinese entities at an increasing rate. A new report from the charity UK-China Transparency (UKCT) has found that the UK has more partnerships with Chinese entities authorised to conduct classified weapons research for Beijing than any other country.

While allies have imposed sanctions and restrictions on collaborations with China’s defence-linked universities, the UK has seen a continued expansion of these partnerships.

40. Brazil turns to China trade deal after Trump’s tariffs, as years of resistance end
    Igor Patrick, South China Morning Post, July 28, 2026

41. Nvidia Staff Detained by Taiwan in China Chip Smuggling Case
    Mackenzie Hawkins, Bloomberg, July 28, 2026

42. American Sovereignty or Chinese Capital? There is only one choice

    Vermilion China, July 29, 2026

BLUF: A Shanghai fund with Chinese military-civil fusion ties sits on the cap table of a US next-generation battery materials company that received over $100 million in federal grants and is backed by major defense investors such as In-Q-Tel and 8VC. That fund facilitated US-to-PRC technology transfer in the past. Nobody in Washington noticed.

43. Australian Labor Party rejects China demand to expel Taiwan officials from conference
    Keoni Everington, Taiwan News, July 24, 2026

44. Beijing-backed Taiwan unification film shelved before release
    Anne Chan, Nikkei Asia, July 27, 2026

45. Nvidia Staff Detained by Taiwan in China Chip Smuggling Case
    Mackenzie Hawkins, Bloomberg, July 28, 2026

46. Beyond False Comparisons: Why Taiwan and the Malvinas Are Not the Same

    Jessica Shiao, Global Taiwan Institute, July 30, 2026

In April 2024, Minister of Foreign Affairs of the People’s Republic of China (PRC) Wang Yi held a public meeting with his Argentine counterpart, Diana Mondino, in response to months of speculation that Argentina and Taiwan might conduct a rapprochement. Prior to the meeting, reports had suggested that representatives from Taiwan were seeking to facilitate improved relations between Taipei and Buenos Aires. The Wang-Mondino meeting, held in Beijing, concluded with both governments reaffirming their mutual diplomatic positions: the PRC reiterated its support for Argentina’s claim over the Malvinas (Falkland) Islands, while Argentina reaffirmed its support for its One China policy and its recognition of “Taiwan as part of China.”

This diplomatic exchange reflected a broader tendency in Argentine political and academic discourse to draw parallels between the Malvinas dispute—involving Argentina and the United Kingdom—and the question of Taiwan’s sovereignty. However, such comparisons often oversimplify the fundamentally different historical, legal, and geopolitical foundations of the two cases. Whereas the Malvinas dispute is framed by Argentina within the context of decolonization, the Taiwan issue emerges from competing claims of political legitimacy and contemporary great power rivalry in the Indo-Pacific. Despite these distinctions, support for one position is frequently portrayed by the PRC as necessarily requiring support for the other.

In this context, Beijing has been able to strategically leverage Argentina’s adherence to the One China principle in ways that reinforce its own diplomatic objectives. By framing support for Argentina’s Malvinas claim as part of a broader solidarity among Global South nations, the PRC has strengthened a narrative in which Argentina’s position on Taiwan becomes explicitly tied to continued Chinese political backing.

This article argues that the analogy between Taiwan and Malvinas is analytically flawed and diplomatically counterproductive. The comparison obscures the distinct nature of both disputes and limits Argentina’s ability to pursue pragmatic engagement with Taiwan in areas such as technology, trade, education, and human capital development. Strengthening unofficial ties with Taiwan would not require Argentina to abandon its Malvinas claim. Rather, greater engagement with Taiwan could provide economic and technological opportunities consistent with President Javier Milei’s emphasis on innovation, human capital formation; and could foster closer alignment with the United States and other like-minded partners.

COMMENT – If you support decolonialization then you should support Taiwan’s self-determination, as opposed to falling back under Chinese imperialism, as has happened to Tibet, Inner Mongolia, and Xinjiang.

47. A SenseTime Team Is Buying America’s Frontier Tech: US regulators are asleep at the wheel

    Vermilion China, July 31, 2026

The people who raised the money for a three-times blacklisted Chinese AI company are now investors in American frontier technology companies.

3C AGI Partners (”3C”) is a Hong Kong fund that buys into the most sensitive hardware companies in the United States: wafer-scale AI chips, optical interconnect, brain-computer interfaces, orbital data centers, and fusion. What it does not advertise is that its investment team was assembled, in large part, out of SenseTime, a company the United States placed on the Commerce Entity List in 2019, on Treasury’s investment blacklist in 2021, and on the Pentagon’s 1260H list in 2025. In addition, the fund’s backer is a family office affiliated with that same blacklisted company’s effort to build AI data centers in Hong Kong.

That team has taken positions in at least eight American frontier-technology companies, several of them funded by DARPA, In-Q-Tel, the Department of Energy, and Lockheed Martin. And across three years of doing it, the fund has drawn no public scrutiny. In Chinese-language media it is celebrated as the Chinese fund that broke into American AI.

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US policy has spent years building walls to stop American capital and technology from flowing to Chinese AI and chip firms. Why are these people still allowed to invest in US advanced technology companies?

Human Rights and Religious Persecution

48. Wang Huning Tours Tibet to Enforce the New Ethnic Unity Law
    Lopsang Gurung, Bitter Winter, July 27, 2026

49. Ethnic Unity Law: Veteran Wuhan Dissident Arrested in Lhasa
    Lopsang Gurung, Bitter Winter, July 23, 2026

50. Mentally impaired waiter jailed for 2 years and 4 months for inciting subversion by promoting pro-Taiwan party
    Hong Kong Free Press, July 21, 2026

51. UN Body Finds China’s Detention of Programmer “Arbitrary”

    Chinese Human Rights Defenders, July 30, 2026

CHRD welcomes the adoption of an opinion by the United Nations Working Group on Arbitrary Detention (WGAD) that found the Chinese government’s imprisonment of computer programmer Niu Tengyu to be arbitrary, in violation of his rights to liberty, a fair trial, and freedom of expression.

In its May 2026 assessment, the WGAD called for Niu’s immediate release, and for the Chinese government to provide him an enforceable right to compensation and other reparations, highlighting Chinese government violations of the Universal Declaration of Human Rights and other international law.

“Niu Tengyu designed websites, while Beijing designed elaborate means to torture him,” said Shane Yi, researcher at CHRD. “This UN opinion shows which one of them is breaking the law.”

52. Sinicization of Religion Reaches Macau

    Yoyo Ng, Bitter Winter, July 30, 2026

The first Macau Summit on the Sinicization of Religion opened on July 20 at the Fisherman’s Wharf Convention Center. It was presented as an international event on Buddhism and religious dialogue, yet the structure of the gathering reveals its political purpose. Senior representatives of the Chinese People’s Political Consultative Conference attended, together with officials from the Central Government Liaison Office and the United Front, and leaders of the government-controlled Chinese Buddhist Association. Their presence confirms that the summit is part of a national strategy aimed at aligning religious life with the authorities’ priorities.

Chinese Buddhism is quintessentially Chinese, and its “Sinicization” does not mean making it more Chinese, but more aligned with the Chinese Communist Party’s control.

The theme chosen for the summit, described as “local wisdom resonating with the world,” was used to promote the idea that religious traditions should adapt themselves to the cultural and social framework defined by the state. The president of the Chinese Buddhist Association, Venerable Yanjue, delivered a keynote speech insisting on the need for religious teachings to merge with history, social conditions, and Socialist values. This language mirrors the formula used in Mainland documents on Sinicization, where doctrinal reinterpretation, patriotic education, and political reliability are central requirements.

COMMENT – More on making religion and spirituality serve the interests of the Chinese Communist Party, not the individual believers.

53. China: New Detention in Lhasa, Ongoing Cases Show Persistent Repression
    Chinese Human Rights Defenders, July 23, 2026

54. Former Hong Kong opposition leader Wu granted stay in Britain, lawyer says
    Reuters, July 28, 2026

55. The East Turkestan Flag at the World Cup
    Abdulrehim Gheni Uyghur, Bitter Winter, July 24, 2026

Industrial Policies and Economic Espionage

56. The Chinese economic experiment that failed
    The Economist, July 23, 2026

57. Taiwan Says It Worked with US to Bust High-End Chip Smuggling
    Yian Lee, Bloomberg, July 28, 2026

58. China’s XPeng Charts Course from EVs to Robots
    Jiahui Huang, Wall Street Journal, July 23, 2026

59. World’s biggest EV battery maker pivots to AI, grids and ships
    Edward White and Kana Inagaki, Financial Times, July 29, 2026

60. CATL, BYD battle for supremacy in Middle East energy-storage market
    Themis Qi, South China Morning Post, July 28, 2026

61. Investment with Chinese characteristics: how Beijing’s money is reshaping tech ventures
    Wency Chen, South China Morning Post, July 25, 2026

China’s tech sector thrives on state-backed investment, reshaping funding dynamics and sparking a debate about balancing risk and innovation.

On the surface, China’s cutting-edge tech sector – from the algorithmic breakthroughs of DeepSeek and Zhipu AI to the hardware of Unitree Robotics and ChangXin Memory Technologies (CXMT) – mirrors Silicon Valley’s venture capital-backed ecosystem.

But a closer look at their financing histories reveals a common investor: the Chinese state.

Beijing’s strong presence underscores a more profound structural shift in how China’s frontier technology is being funded. As Western venture capital and domestic private wealth retreat, the government has been steadily expanding its role in the market, constructing a state-capitalist apparatus which blurs the line between public policy and private equity.

Rather than operating via a single entity, this public capital flows through a layered matrix of national funds, local investment vehicles, state-owned enterprises (SOEs) and privately managed funds. It is a system that converts top-down policy priorities into private-market bets, with an alternative perspective on what can be considered a return on investment.

Last year, state-affiliated investors supplied more than 90 per cent of the committed capital tracked in China’s private-equity market, a surge from just under 79 per cent in 2021, according to domestic data provider Zerone.

This mandate comes directly from the top. At a high-level national science and technology gathering in Beijing on July 8, President Xi Jinping urged financial capital firms to “invest early, invest small, invest for the long term and invest in hard technology”.

How this capital is deployed could determine whether China will succeed in its ambitions to become a self-reliant tech superpower – or suffocate its economy under the weight of state-engineered overcapacity.

How the money moves

“2018 was roughly the turning point for us,” said Shen Qinhua, founding partner of Puhua Capital, a Hangzhou-based investment firm with about 40 billion yuan (US$5.91 billion) under management. Puhua aimed to raise between 7 billion and 8 billion yuan in 2026, with state-affiliated investors expected to account for about 90 per cent of the total, he said.

According to Shen, it was around eight years ago that traditional private-business owners in eastern Zhejiang province started to pull back their investments in Puhua, as they realised that venture funds’ long holding periods had failed to match their liquidity expectations.

China’s enormous industrial advantage has not yet translated into a profit advantage

– Zhou Kaibing, Hangzhou Venture Capital Association

Around the same time, dollar funds began retreating amid escalating US-China tensions. More recently, restrictions on investment in sensitive technologies from both sides have deepened the financial divide, while Beijing’s aggressive push into strategic technologies has drawn a diverse array of state investors.

This state support arrives in vastly different forms and at distinct stages of a company’s life cycle.

For CXMT, which is headed for a blockbuster public market debut in Shanghai next week, a combination of national, provincial and municipal investors supplied the massive capital, credit support and project construction resources required to build a capital-intensive memory chipmaker from scratch. Industrial and private investors came later.

It is one of the clearest examples of the “Hefei model”, under which the provincial capital of central China’s Anhui uses state investment vehicles to back strategic industries, absorb early risk and anchor companies locally before bringing in market capital.

By contrast, state funds entered Unitree Robotics much later in the game. That financing came after the robot maker had already proven its technological and commercial viability, timing that aligned with Beijing’s elevation of robotics to a strategic priority.

Unicorn artificial intelligence firm DeepSeek, initially funded entirely by private wealth, only recently drew backing from the national AI fund after emerging as a powerful symbol of China’s challenge to US tech supremacy.

Hong Kong-listed Zhipu, whose market cap at the market close on Friday was HK$585.95 billion (US$74.72 billion), attracted a cluster of local government funds when it neared its initial public offering in January, as cities vied for a stake to secure a share in the booming AI sector – or remain economically relevant.

One main delivery mechanism for state capital is the fund-of-funds model.

Puhua Capital, for instance, has twice been selected to manage sub-funds backed by the National SME Development Fund, which is financed by central and local fiscal capital alongside smaller state and institutional investors.

In this set-up, the national fund typically provides a 30 per cent anchor commitment. Puhua would raise another 30 per cent to 40 per cent from provincial, municipal or district-level state vehicles, before securing the remaining balance and deciding where to base the fund.

Puhua would retain its day-to-day investment autonomy, but operate under strict oversight. An appointed observer, separate from the investment committee, could join deal discussions from an early stage and veto proposed investments.

Furthermore, at least 70 per cent of the capital must be deployed into “522” companies – businesses with no more than 200 million yuan in annual sales, 200 million yuan in assets and 500 employees. Performance metrics and related-party transactions would be regularly audited.

“The requirements are higher,” Shen said, “but so is the support for policy direction and industrial coordination.”

In this way, a fund-of-funds brings in broader outside capital while steering it to policy priorities. Meanwhile, the National Venture Capital Guidance Fund, launched late last year, operates further upstream, channelling central fiscal money through regional funds into hundreds of professionally managed sub-funds focused strictly on early-stage technologies.

Some point towards specific industries. For example, the “Big Fund” – China’s flagship semiconductor investor – concentrates capital into this fiercely competitive arena, taking equity stakes directly and backing specialist funds across the chip supply chain.

Others can be deployed through local platforms that take stakes or finance construction, as in Hefei, as well as via investments and acquisitions by state-owned companies.

Who bears the risk?

Capital is pouring into strategic industries through funds with longer lifespans as exit routes expand. Platforms like Shanghai’s Nasdaq-like Star Market and the Hong Kong stock exchange now allow these companies to go public sooner, enabling broader retail investors to share in the potential gains.

“A loop is gradually taking shape, directing more capital towards hard tech companies,” said Mi Lei, founder of CAS Star, a venture-capital firm spun out of an institute under the state-run Chinese Academy of Sciences. The firm’s early bets on China’s photonics sector have begun to see tangible returns amid the AI boom.

However, state investors and private funds do not always share the same scorecard. While a market fund is judged mostly on financial returns, local governments must also account for the number of factories built, jobs created and taxes generated – competing goals that can weaken financial discipline and fuel intercity rivalries.

This local tournament has made China’s industrial policy unusually entrepreneurial – and competitive. Beijing signals the strategic direction, while cities fiercely contest fund structures, industrial estates, credit support and real-world applications.

In the nascent stages of an industry, this rivalry can foster healthy development, or what Shen described as “a hundred flowers blooming”. But it can also lead to severe overcrowding, driven by local governments’ fear of missing out on the next big macroeconomic wave.

The solar panel and electric vehicle (EV) sectors offer stark cautionary tales for today’s policy darlings, such as AI, semiconductors and embodied intelligence.

Expanding production capacity can benefit a single city seeking to boost its local economy, but when dozens of cities replicate the strategy simultaneously, the result is crippling overcapacity and collapsing profit margins on a nationwide basis.

62. China’s XPeng Charts Course from EVs to Robots
    Jiahui Huang, Wall Street Journal, July 26, 2026

63. China adds 14 EU entities to export control list
    Trivium China, July 27, 2026

64. China’s Path to Chip Independence: When Will the Middle Kingdom Make Enough of Its Own Compute?

    Ryan Fedasiuk, Choosing Victory, July 30, 2026

65. World Bank moves to phase out China loans by 2031
    Iori Kawate, Nikkei Asia, July 24, 2026

66. First US LNG Shipment to China in a Year to Be Re-Exported
    Stephen Stapczynski and Sing Yee Ong, Bloomberg, July 27, 2026

67. Volkswagen’s CARIZON and Horizon Robotics deepen self-driving partnership in China
    Rachel More, Reuters, July 22, 2026

Cyber and Information Technology

68. Inside the White House debate over what to do about Chinese AI
    Sophia Cai, Politico, July 26, 2026

69. US moves to ban ‘Made in China’ humanoid robots from military use
    Jijo Malayil, Interesting Engineering, July 26, 2026

70. The Robots Cometh
    Charlie Campbell, Time, July 23, 2026

71. When China Gets Its Own Mythos
    Michael Sulmeyer, Foreign Affairs, July 22, 2026

72. Robot blowback in Korea and China growth slows
    Jim Anderton, Design World Online, July 27, 2026

73. Inside China’s All-Out Push to Catch Up with American AI Chips
    Josh Chin and Raffaele Huang, Wall Street Journal, July 23, 2026

74. Chinese AI models will slash adoption costs, says Singapore’s GIC
    Owen Walker and George Hammond, Financial Times, July 24, 2026

Military and Security Threats

75. China is gaining troubling military know-how from Russia
    The Economist, July 23, 2026

76. PLA building more Taiwan mock-ups

    Chen Yu-fu and William Hetherington, Taipei Times, July 28, 2026

The Ministry of National Defense yesterday said it is monitoring the construction of full-scale replicas of military and government sites in Taiwan by the Chinese People’s Liberation Army’s (PLA).

The comments from ministry spokesman Major General Sun Li-fang come after a report by the Telegraph on satellite imagery showing replicas of Taiwan’s Presidential Office Building, Suao Naval Base and other sites.

Citing satellite imagery and defense analysts, the report, published on Sunday, said that the PLA had built life-size replicas of key government facilities to rehearse military operations under realistic conditions.

77. Nvidia’s China Partners and the PLA
    Noah Berman, The Wire China, July 26, 2026

78. Taiwan Tests How It Would Resist a Chinese Siege at Sea
    Chris Buckley and Amy Chang Chien, New York Times, July 25, 2026

79. China holds air, navy patrol in South China Sea
    Reuters, July 26, 2026

80. Technological Progress in ‘Time War’ With the West
    Ryan Wu, Jamestown Foundation, July 24, 2026

81. Blurred Orbits: Inside China’s Commercial Space Expansion

    Kari A. Bingen, Aidan Powers-Riggs, and Chantal Li, CSIS, July 29, 2026

Coverage of China’s space ambitions has largely focused on its military and human spaceflight developments, but far less attention has been given to its commercial space sector and the industrial base supporting it, which are growing at stunning pace on an unprecedented scale. Chinese launch startups, satellite internet companies, and remote sensing firms are building reusable rockets and mega-constellations, while satellite gigafactories, aerospace cities, technology hubs, and new launch sites are appearing across the country.

This report offers a comprehensive assessment of China’s commercial space developments, capturing the policies, companies, investments, and manufacturing trends shaping its commercial space activities and their strategic implications for U.S. economic and national security interests.

82. The Gulf’s China Problem
    Mohammed Alsudairi, Andrea Ghiselli, and Aaron Glasserman, Foreign Affairs, July 21, 2026

83. US posts photo of coastguard working with Taiwan after Beijing starts patrols
    Lawrence Chung, South China Morning Post, July 29, 2026

84. Beijing’s Next Play for the South China Sea
    Lynn Kuok, Foreign Affairs, July 29, 2026

85. Japanese Military Officer Indicted Over Armed Break-In at Chinese Embassy
    Luo Zilin, Caixin Global, July 28, 2026

86. China cracks down on sales of decommissioned military equipment ‘to protect PLA’s image’

    Alcott Wei, South China Morning Post, July 28, 2026

Government notice covering everything from uniform to equipment bans sales and promotions without official authorization.

Beijing has tightened its rules on the sale of military equipment to ban its sale through unauthorised channels.

“In recent years, some business operators have openly sold, online and offline, goods … such as decommissioned and scrapped military equipment, causing an adverse impact and creating security risks,” an administrative notice issued by multiple state bodies said.

The notice – made public on Tuesday and published internally last week – covers everything from uniforms to machinery, components and ammunition that have been formally withdrawn from service and designated for disposal.

There are already laws concerning the sale or transfer of equipment and weapons, with offenders facing up to 10 years in prison, but these are vaguely worded.

The new notice sets out specific examples of what is prohibited, citing concerns about security, military secrecy and the image of the People’s Liberation Army.

“Any form of commercial promotion for decommissioned equipment and imitations that could be mistaken by the public for military equipment is prohibited,” it said.

“Any organisation or individual is prohibited from producing, modifying or assembling equipment using dismantled parts from decommissioned or scrapped equipment, or selling imitations that could be mistaken by the public for military equipment.”

The notice said individuals and organisations needed official approval to sell surplus military kit and instructed the authorities to conduct routine inspections of related sales and marketing activities.

The notice was issued by the State Administration for Market Regulation on Tuesday, with co-signatories including the Central Military Commission’s general logistics and equipment development departments and the Ministry of Public Security.

It is not known what triggered the latest ban. On Monday, Beijing Ronghe Law Firm, which provides military-related services, published an analysis of three cases that could be covered under the notice.

They involved service personnel accused of stealing military uniforms to be sold online, which the firm said “created a risk of crimes involving people impersonating military personnel”.

One Belt, One Road Strategy

87. As the World Courts Beijing, Namibia Shows How Africa Can Sharpen Its China Strategy
    Huiyi Chen and Ovigwe Eguegu, The Diplomat, July 26, 2026

88. Zijin-Controlled Manono Project Launches Congo’s First Lithium Exports
    Lu Yutong, Caixin Global, July 29, 2026

Opinion

89. Amid Trump’s unpredictability, a region rises to face China
    Craig Singleton, Washington Post, July 27, 2026

Governments across the region are assuming more responsibility for their countries’ security.

For decades, stability in the Indo-Pacific rested on a simple assumption: If the regional balance came under serious strain, the United States would lead the response. Choices in Beijing and Washington are now testing that premise, prompting governments across Asia to assume more responsibility for their countries’ security before Chinese pressure forces their hand.

The evidence is increasingly difficult to miss. Japan has launched its largest postwar defense buildup, finalizing military-access agreements with Australia and the Philippines. India, traditionally reluctant to align with any great power, is expanding military exercises and arms exports to regional partners. Taiwan has committed billions to harden its military, civil defense and critical infrastructure against Chinese blockade or invasion. Even Southeast Asian governments with differing views of Beijing are expanding joint maritime patrols to counter incursions and defend their sovereignty.

No single development is transformative on its own, nor do these arrangements amount to a NATO-style mutual-defense pact. Instead, governments are building a flexible web of overlapping partnerships, logistics planning and intelligence sharing. The result is a more connected, resilient region, better able to respond in a conflict.

This restructuring reflects two converging judgments. The first is that Chinese bullying is no longer episodic. Under leader Xi Jinping, Beijing has combined military pressure on Taiwan, maritime coercion against Japan and the Philippines, and economic retaliation against other neighbors. Isolated disputes increasingly look like a broader campaign to bend the region to China’s will.

The second judgment concerns American predictability. President Donald Trump’s transactional approach to alliances and preference for personal diplomacy with Xi have raised doubts about Washington. The U.S. remains Asia’s indispensable military power. Yet allies are increasingly unwilling to rely on American guarantees alone. Instead, they are investing more heavily in one another and assuming greater responsibility for their own security.

Together, these twin disruptions are changing the logic of deterrence. Beijing often pressures its neighbors bilaterally, exploiting the imbalances in each relationship. Trump likewise favors bilateral bargains, pressing allies separately on trade and defense spending. Asian governments are drawing the same lesson from both: Isolation is vulnerability. Their answer is to meet bilateral pressure with multilateral cooperation, building resilience against Beijing while showing Washington they can shoulder more of the burden.

History helps explain why: When revisionist powers challenge an existing order and the role of a distant power becomes uncertain, exposed states rarely wait. They begin preparing. They cannot replace that outside power, but they can deny an aggressor a quick victory, buy time for intervention and strengthen any eventual response.

Europe followed this pattern before World War II. As Germany overturned the continent’s balance of power and the U.S. remained on the sidelines, European governments drew closer in order to resist German expansion. Those efforts failed to prevent war. They nonetheless forged relationships that strengthened the Allied response after Washington entered the conflict.

Ukraine offers a similar lesson. Years of military reform, Western training and intelligence cooperation before Russia’s invasion helped Kyiv survive the opening assault. Asian governments confronting China’s bid to reshape the Indo-Pacific are acting on the same insight: The relationships that matter most in a crisis are built before it begins.

That history sharpens a modern irony. China’s coercion is creating exactly what Beijing has long sought to prevent: neighbors pooling their military, economic and diplomatic power. Acting together, Asia’s middle powers can absorb pressure that might overwhelm any of them individually. In doing so, they can deny China the easy concessions on which coercion depends.

Trump’s approach may reduce free riding. But repeatedly casting doubt on American commitments, including by leaving a major arms package for Taiwan unresolved, could push allies toward outright hedging. Governments that question whether the U.S. would come to their aid may accommodate Beijing, cut separate deals or avoid risks Washington would prefer them to take. Their calculation is simple: China will remain their neighbor long after the Trump administration leaves office.

The paradox is that a more capable region may ultimately become safer even as the transition grows more dangerous. These partnerships raise the costs of coercion but remain uneven and untested. Beijing will almost certainly probe them before they mature, and governments may overestimate the support they would receive from Washington or one another. If the U.S. responds to greater allied capacity by reassuring less, it will deepen the very doubts driving Asia’s reorganization.

A more autonomous Asia should fit an “America First” agenda. Regional governments could assume greater responsibility for their security while the United States preserves the influence needed to shape outcomes. But, to be successful, that bargain depends on predictable American commitments and clear crisis planning.

The lasting shift, though, belongs to Asia. Its governments are no longer bystanders in a great-power contest. They are becoming strategic actors in their own right. China may have accelerated the shift; Asia’s governments want to determine where it leads.

90. The US may find it hard to shrug off Moonshot’s AI shockwaves
    Richard Waters, Financial Times, July 24, 2026

91. How to stop China from leapfrogging the U.S. in biotech
    Washington Post, July 17, 2026

92. What is the risk of using Chinese open AI models like Kimi K3?
    Samm Sacks, Financial Times, July 26, 2026

93. The Hidden Cost of China’s Free A.I.
    Tal Feldman, New York Times, July 29, 2026

Congrats to both Spain and Argentina for making it to the Final of the World Cup today. Both countries have an intertwined history in culture, geopolitics, and sport. Adam Tooze gives a great rundown of that history in the latest episode of his podcast, Ones & Tooze.

The final game today provides a great segue to the music for this week.

MetLife Stadium, East Rutherford, New Jersey.

As I’m sure you have heard, each World Cup team selected music to represent themselves and their country during the tournament. Walk-on songs, songs for goals scored, and songs for victory. This afternoon, we will get to hear what the Spanish and Argentinian teams picked… both are their versions of Música Bailable (dance music).

The song for Spain is Despechá by Rosalía, the Catalonian artist who has won two Grammys and eleven Latin Grammy Awards, making her one of the most successful Spanish singer-songwriters of all time. The song was released in 2022 and blends mambo with merengue. The former is a genre of Cuban music, while the latter comes from the Dominican Republic.

The Argentinian song is La Cumbia De Los Trapos by Yerba Brava, a football anthem released in 2000 and played routinely in stadiums across Latin America. The group is from the suburbs of Buenos Aires and formed in 1998. They are a cumbia band, a style that originates from the Caribbean coast of Colombia and has a distinctive rhythm. Each region of Latin America has its own unique style of cumbia and Yerba Brava performs the quintessential Argentine version of the sound.

While neither country borders the Caribbean, I think it is fascinating that their musical identity is tied so close to that region. Six months ago, another style of Caribbean dance music featured prominently during the halftime of Super Bowl LX. Bad Bunny’s 14-minute set was a celebration of Puerto Rican reggaeton. He kicked off that performance with his hit, Tití Me Preguntó, a song associated more with New York City than San Juan (just watch the video).

To the fans out there, enjoy the game in New Jersey, even if you are tuning in from the other side of the world. I’ll speak for a broad swathe of people here, but Americans, Canadians, and Mexicans have really enjoyed hosting this year and we are glad you came to visit.

Back to the main thing…

More Wrongful Detentions in the PRC

The first two articles cover an issue we’ve seen too much of, the Chinese Communist Party wrongfully detaining Americans of Chinese and Asian ancestry to silence their work and to send a message to the broader diaspora. That message is “you are either with us or against us.”

This week, Reuters reported on the case of Youlin Chen, a Chinese born American citizen who was seized nearly two years ago by PRC security forces while he was visiting family in China and lecturing at two universities. Since then, he has been interrogated more than 100 times. In March, Secretary Rubio designated him as “wrongfully detained” and it appears that President Trump brought up his case with Xi Jinping during the Summit in May.

The common wisdom you hear from China experts is that these cases should be handled behind the scenes and between the two governments, so as not to embarrass Chinese leaders and force them to dig their heals in and refuse to cooperate.

I think that is rubbish advice.

PRC leaders know exactly what they are doing when they take Americans prisoner, or Canadians, or Australians, or Japanese, etc.

They are using the detentions as a tool to silence critics and those who would work with the United States and its allies. They are using the detentions as leverage with the United States and other governments… by having a hostage, they can demand foreign governments compromise on issues that Beijing cares about in order to get their release. They are using the detentions to normalize transnational repression by keeping families silent for fear that Beijing would impose even worse conditions on their loved ones, if they speak out.

By staying silent and handling these cases behind the scenes, we provide the Chinese Communist Party all the benefits of their hostage diplomacy, while failing to impose any serious reputational or economic costs.

The United States and other countries have to change course on this.

Rather than staying silent, make these wrongful detentions very public. Rather than negotiating behind the scenes, publicly impose costs for these detentions and refuse to lift them until the PRC stops these practices. Stop making excuses for the CCP. Lastly, stop pretending that the PRC is a jurisdiction that Americans and citizens from other democracies can travel to safely. This is sinking in on the Japanese. The State Department and other foreign ministries, have a duty to their own citizens to impose strict travel advisories on the PRC, Macau, and Hong Kong. The CCP (and domestic business leaders) will howl in protest, but stick to your guns and demand not only the release of your citizens but also keep the restrictions in place for a period to ensure the pattern doesn’t repeat itself.

Trump Capitulates on Hong Kong

On Tuesday, July 14 Executive Order 13936 expired… just as President Trump was finishing up the remarks that he would make during primetime on Thursday, July 16, which accused the PRC of interfering in the 2020 U.S. Presidential election in which Trump lost to Biden.

So you’d be forgiven for not having 13936 memorized but it was the executive order that President Trump signed on July 14, 2020 which eliminated preferential treatment for Hong Kong. That preferential treatment had existed since the signing of the Hong Kong Policy Act of 1992. Under that law , Hong Kong would receive preferential treatment compared to the People’s Republic of China because the jurisdiction was judged to be autonomous with its own courts, laws, political system, and freedoms. This special treatment allowed Hong Kong to carve out a place for itself as a financial and business center that could connect the PRC to the outside world.

However, when the Chinese Communist Party crushed Hong Kong’s autonomy in 2019 and 2020 (in violation of its international agreement with the United Kingdom), Congress passed the Hong Kong Human Rights and Democracy Act of 2019 and the Hong Kong Autonomy Act of 2020, which threatened to pull this preferential treatment from Hong Kong (and by extension, the PRC) if Hong Kong lost its autonomy.

Executive Order 13936 was the instrument that President Trump used to declare that Hong Kong was not autonomous, thereby withdrawing the preferential treatment. When he signed it during that first summer of COVID, it was effective for one year, meaning that if the Executive Order wasn’t renewed the next year, those preferential benefits would return to Hong Kong and the PRC.

• On July 7, 2021, President Biden renewed EO 13936.

• On July 11, 2022, President Biden renewed EO 13936.

• On July 11, 2023, President Biden renewed EO 13936.

• On July 11, 2024, President Biden renewed EO 13936.

• On July 10, 2025, President Trump renewed EO 13936.

However, this week President Trump failed to sign a renewal for his own Executive Order.

Apparently, some parts of the original EO remain in place, but by failing to sign a new EO or put in place a more permanent revocation of Hong Kong’s preferential treatment, the President’s inaction has turned back the clock to 2019.

Now Congress could act (and potentially get a veto-proof majority) to permanently end these beneficial preferences for Hong Kong, but I don’t see any movement on that.

What is most striking, to me at least, is to go back to the President’s primetime remarks on Thursday, July 16… just two days after he let his own EO, that punished the CCP for its actions in 2020, expire… President Trump was at the podium telling Americans that the PRC had interfered in the 2020 Presidential election and had taken actions to cause his defeat.

This is some really odd split-screen-ness.

On the one hand, President Trump is telling Americans that Xi Jinping and the Chinese Communist Party actively interfered with the 2020 U.S. Presidential election and caused his defeat… while in the same week, President Trump let his own executive order expire that sought to punish Xi Jinping and the Chinese Communist Party for interfering in the autonomy of Hong Kong in 2020.

One would think that if the President took his own remarks seriously on Thursday, he would have, at the very least, renewed his own executive order that sought to punish the CCP.

Instead, he handed them an enormous gift.

Almost immediately, the PRC Ministry of Commerce welcomed the decision by the Trump Administration to let the Executive Order expire and claimed that it was part of the trade negotiations, even as the PRC has refused to follow through on its own commitments at Busan.

If this is what first-class deal-making looks like, I’d really hate to see what bad deal-making looks like.

I’m scratching my head on what exactly the President got for this gift, particularly as he tries to make the domestic case for his SAVE America Act based on protecting the country against hostile interference by the PRC. Is he hoping that folks will ignore this stuff?

More below under article #15.

Whether other people put these pieces together or not, I suspect that there are plenty of folks in the Administration who are equally confused by the President’s obvious contradictions.

Thanks for reading!

Matt

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1. China detains US seismologist who has studied North Korean nuclear tests
   Jonathan Landay, Reuters, July 13, 2026

A Chinese-born American seismologist who has published U.S.-funded work on detecting North Korean nuclear tests has been detained in China for nearly two years and faces trial on spying charges, according to his wife, U.S. lawmakers and two hostage advocacy ​groups.

The case of Youlin Chen, reported here for the first time, adds an irritant to the tense relationship between the nuclear-armed rivals and comes as President Donald Trump seeks to keep the relationship steady following last year’s trade war.

Secretary ‌of State Marco Rubio on March 19 designated Chen, 54, as “wrongfully detained,” making his release a top U.S. priority. The Trump administration has withheld a public announcement to allow space for high-level diplomacy aimed at securing his freedom, according to his wife, Yufang Rong.

A U.S. source familiar with Chen’s case said the administration was “focused on gaining his release from his unjustifiable detention.” The source spoke on condition of anonymity to discuss sensitive diplomatic talks.

Chen, who became a U.S. citizen in 2011 and lives in Boston, Massachusetts, is the only American currently held in China designated as wrongfully detained, according to his wife and hostage advocates.

Rong said she ​has been told by the White House and the State Department that during a state visit to Beijing in May, Trump raised her husband’s detention with Chinese leader Xi Jinping, who promised to look in to it. Xi’s government, however, has taken ​no action, she said.

The U.S. source did not directly confirm that Trump discussed Chen with Xi. But the source said the pair have a “very good personal relationship. This is one of many facets in ⁠the U.S.-China relationship. No one issue is defining.”

In a Reuters interview, Rong expressed concern that Beijing has decided even before putting Chen on trial to find him guilty of espionage, a crime that in China carries a possible sentence of up to life in prison ​or even the death penalty for cases deemed especially grave.

“I believe they will convict him no matter what and the trial will be behind closed doors,” said Rong, who is also a seismologist but does not collaborate on her husband’s work.

China’s judicial organs handle cases according to ​the law and “there is no so-called wrongful detention,” foreign ministry spokesperson Lin Jian said at a regular briefing on Tuesday.

The Foley Foundation, a hostage advocacy organization that has been tracking Chen’s case, believes that Chen is among at least 12 Americans unjustly held in China, including people under exit bans, said Elizabeth Richards, the group’s director of hostage advocacy.

“President Trump has been clear that he wants every American detained abroad to return home, and he has reunited over 100 individuals with their families since taking office this term,” said deputy White House press secretary Anna Kelly.

The Office of the U.S. Special Presidential Envoy for Hostage ​Affairs did not immediately respond to requests for comment.

INTERROGATED ABOUT NUCLEAR TEST STUDIES

U.S. embassy officials have visited Chen several times, but Chinese officials are always present, preventing him from speaking freely, said Rong. She retained a Chinese lawyer, but he was allowed to see Chen only ​after he had been detained for more than 13 months.

Chinese officials have interrogated her husband more than 100 times about his work on the seismographic signatures of North Korean nuclear tests, said Rong.

Eric Lebson, a former U.S. national security official whose hostage advocacy organization, Global Reach, is advising the family, ‌said he believes ⁠China wants to use Chen’s expertise to improve its ability to conceal underground nuclear weapons tests through a technique called decoupling.

Lebson said a similar concern was expressed by experts on nuclear testing consulted by his group.

The Trump administration in February accused China of trying to mask a low-yield underground nuclear test blast on June 22, 2020, using the technique in which a device is detonated inside a large underground chamber to reduce the magnitude of the shock waves it produces.

China, which like the U.S. has signed but not ratified the 1996 Comprehensive Nuclear-Test-Ban Treaty, denies conducting the test.

Lebson said that Chen is employed by a U.S. government contractor, and has never had a U.S. security clearance or performed classified work.

His research on North Korean test blast seismic waves has been funded by the State Department and the Air Force Research Laboratory, said ​Lebson. He added that it was done in collaboration with Chinese ​academics, it used publicly available Chinese data and is viewable ⁠on the internet.

A December 2020 paper by Chen reviewed by Reuters examined the magnitude of North Korea’s six known nuclear test blasts and ways to differentiate their seismic signatures from those of earthquakes.

The cover page states that the paper was written for the State Department’s arms control bureau and “approved for public release.”

Human-rights groups have argued that under China’s state-secrets law, Chinese authorities retain broad powers to retroactively classify public data, ​such as official statistics, as national security secrets, potentially implicating anyone who possessed or shared previously open-source information.

ARRESTED BEFORE RETURNING TO BOSTON

Chen was arrested by Chinese state security officers on November 5, ​2024, at Beijing International Airport as he ⁠prepared to fly home to Boston after visiting family and lecturing on his work at two universities, according to Rong and Lebson.

At the beginning of his detention, said Rong, Chen was subjected to “harsh conditions,” including being forced to sit all day on a hard stool without being allowed to stand, read or exercise, and was unable to obtain medications for his diabetes and other health problems.

Since then, she said, it has been difficult to learn the conditions of his confinement, but she added that he has lost 30 to 40 pounds (13.6 to 18.1 kg), is given insufficient food ⁠with little protein, ​fruits or vegetables, and receives only poor-quality medications.

He was charged with espionage on May 1, 2025, but has not yet stood trial. The case likely will come up ​again during a visit that Trump has said Xi will pay to Washington in September.

U.S. Senator Ed Markey, a Massachusetts Democrat who led two other senators in a December 17, 2025, letter urging Rubio to designate Chen as wrongfully detained, said he was “deeply concerned about Dr. Chen’s safety and wellbeing.”

“It is my hope that increased attention ​on his unjust detention will force the Chinese government to do the right thing and release Dr. Chen,” Markey said in a statement.

COMMENT – Last week, I discussed in the commentary about Min Zin, the wrongfully detained U.S. citizen in the PRC who was lured to China by Chinese university professors for an academic conference.

This week, we have the story of another American citizen and academic who was wrongfully detained in the PRC two years ago.

Are you seeing a pattern here?

State Department: it is time to change that travel advisory back to level 3 (“Reconsider Travel”), or even better, level 4 (“Do Not Travel”).

2. China’s Transnational Repression Is Being Met with a Deafening Silence
   Joshua Kurlantzick, Council on Foreign Affairs, July 13, 2026

The detention of U.S. citizen Min Zin on dubious espionage charges is the latest evidence that Beijing’s campaign to silence dissidents and critics abroad is expanding in scope and audacity. Without a forceful U.S. response, China’s willingness to target academics, activists, and diaspora communities on foreign soil is likely to grow.

Here is what we know about how U.S. citizen Min Zin ended up in a Chinese detention cell: He accepted an invitation to attend an academic conference in Kunming, the capital of Yunnan province in southwestern China. This was nothing unusual, as Min Zin is a doctoral candidate at the University of California, Berkeley, who has spent years writing about the politics of Myanmar—where he is from—and the country’s thorny relationship with China. The think tank he co-founded in 2016, ISP-Myanmar, has regular contact with Chinese academic institutions. He had traveled to China multiple times without incident.

None of that mattered. According to Scholars at Risk, which monitors attacks on academic freedom worldwide, Min Zin vanished on June 3, while traveling to the conference in Kunming. For more than a week, his family and colleagues had no idea where he was or whether he was safe. Then, on June 11, The New York Times reported that he had been arrested in Kunming. Hours later, the Foreign Ministry in Beijing confirmed Min Zin’s arrest on suspicion of “engaging in espionage and endangering Chinese national security.”

The espionage charges do not appear to hold up. Min Zin had a history of activism against Myanmar’s military. He took part in Myanmar’s 1988 pro-democracy uprising as a high school student—a movement the military crushed with lethal force. The activism got him expelled from school. He spent years in hiding to avoid arrest, eventually crossing into Thailand in 1997. He made it to the United States, applied for asylum, and rebuilt his life.

More recently, Min Zin’s research covered civil-military relations, democratization and ethnic conflict—the standard portfolio of a political scientist specializing in Myanmar and Southeast Asia. His think tank, which was located in Myanmar during the country’s democratic opening, moved to Thailand after the 2021 military coup that ushered military rule back in.

But ISP-Myanmar also ran a dedicated China Desk publishing detailed analyses of Chinese infrastructure investments in Myanmar and Beijing’s backing of the military government. That last part, along with his history of activism, is almost certainly what got him arrested. Not espionage, but scholarship that Beijing found inconvenient.

In an earlier period, this arrest would have been shocking. Today, it remains troubling but is sadly unsurprising. The reach of Chinese authorities has become so extensive, and the costs Beijing bears for detaining foreign citizens and operating beyond its borders have become so low, that cases like Min Zin’s are now the norm, even for U.S. citizens.

China is far and away the world’s leading practitioner of transnational repression. Freedom House has confirmed 319 physical incidents linked to Beijing since 2014—nearly a quarter of all documented cases worldwide. And those are just the cases with a verifiable paper trail; the real number is much higher. Beijing’s expansive toolkit includes digital surveillance of diaspora communities and threats against exiled dissidents’ family members who are still in China. Beijing’s Operation Fox Hunt, a campaign nominally aimed at rooting out corruption, has been used to pressure exiled dissidents into returning home—or, in some cases, into taking their own lives.

A 2022 investigation by the nonprofit Safeguard Defenders identified over 100 covert Chinese police “service” stations operating in more than 50 countries, including the United States, which are used to monitor and intimidate overseas Chinese communities. The report found that some 230,000 people were pressured to return to China between April 2021 and July 2022.

Indeed, what is happening to Min Zin is not unusual: It is one piece of a large and sophisticated system. Last year, the International Consortium of Investigative Journalists published an investigation that painted a detailed picture of how Beijing’s transnational repression operates. ICIJ researchers reviewed internal Chinese security documents and interviewed more than 100 people who had been targeted by Chinese authorities in 23 countries. The people reported that Chinese police had gone after their family members back in China after they spoke out overseas. Sixty of them believed they were under surveillance. Twenty-two said they had received physical threats or had been assaulted by people linked to the Chinese Communist party.

One of the main engines of this persecution is the United Front Work Department, a CCP body that, among other things, monitors Chinese students abroad and tries to ensure that diaspora organizations stay aligned with Beijing’s positions. The United Front’s reach into foreign universities has been extensively documented. A 2024 Amnesty International report found that roughly 900,000 Chinese students studying abroad live under persistent pressure, including being photographed at protests, watched on campus and sometimes reported on by fellow students—with the implicit threat that stepping out of line could bring trouble for their families back home.

China has also turned Interpol’s Red Notice system, the global police alert mechanism, into another tool for hunting critics abroad, getting foreign law enforcement to arrest dissidents on Beijing’s behalf under the cover of legitimate legal requests. The ICIJ has documented how Beijing pressured Malaysia to detain and deport Abdulhakim Idris, a U.S. citizen who heads the Center for Uyghur Studies, during a trip to promote a book about China’s persecution of the Uyghurs.

The ICIJ also found that China has packed the U.N. human rights system with dozens of fake civil society groups. These government-organized NGOs, or GONGOs, pose as independent civil society groups, but in reality they are charged with monitoring activists attending U.N. sessions and to shout down or disrupt criticism of Beijing.

When it comes to Min Zin’s arrest, the timing suggests that China wanted to test the White House and showcase its leverage against Washington. Min Zin disappeared just weeks after Donald Trump met with Xi Jinping in Beijing. Since then, the U.S. president has taken steps to accommodate Beijing. He has publicly called China a peer superpower, handing Xi a status that Beijing has spent years angling for. And Trump left the summit having raised serious doubts about U.S. commitments to Taiwan, keeping a $14 billion arms package for the island on hold and telling reporters that the fate of the weapons “depends on China.” That was a break from 40 years of bipartisan U.S. policy under which arms sales to Taiwan are not discussed with Beijing.

To be sure, China is not the only offender—just the biggest. Transnational repression is worsening around the world. According to a report published earlier this year by Freedom House, there were 126 new incidents of physical transnational repression in 2025 alone, bringing the total since 2014 to 1,375 confirmed cases across 107 countries. The number of governments doing this has jumped from 38 to 54 in just a few years. Six countries turned up as first-time offenders in 2025: Afghanistan, Benin, Georgia, Kenya, Tanzania and Zimbabwe.

Transnational repression used to be something only powerful states did. Now, even smaller states are doing it too, mainly because they have seen others do it with impunity.

In many cases, authoritarian governments are working together to hunt down exiles and dissidents. For instance, Thailand has turned itself into a regional clearinghouse, with its security services coordinating with Chinese, Cambodian, Laotian and Vietnamese counterparts to detain and deport people.

Democracies have pushed back in some ways, and those efforts deserve recognition. The G7 issued its first formal statement against transnational repression in June 2025, and Canada rewrote its criminal code to specifically target these operations.

But the Trump administration has done almost nothing to address the broad sweep of China’s actions, much less the specific case of Min Zin. There appears to have been no real conversation at the Trump-Xi summit in May about China’s operations against U.S. citizens. Real Clear Politics has reported that the administration has tasked White House Deputy Chief of Staff Stephen Miller with ensuring that other federal agencies don’t take action, such as addressing human rights issues that could derail the U.S-China trade truce.

When asked by media outlets about Min Zin’s case, the State Department has only said it is “aware of reports regarding a U.S. citizen detained in China.”

What more can the United States do? Washington should demand Min Zin’s release via a public, explicit statement that arresting an American scholar for his research is unacceptable and will have consequences. More broadly, the United States needs to put transnational repression on the table in every serious exchange with China. After all, the FBI has said repeatedly that China’s covert operations on U.S. soil are genuine national security threats.

Washington also needs to start working with allies to impose actual costs for transnational repression. A good starting point would be targeted sanctions against the Chinese officials running these programs, tools the U.S. is already using against Iran and Russia. Finally, the U.S. government should give American academics and researchers honest guidance about what travel to China now means, especially for those studying topics that Beijing finds sensitive.

None of this has to mean starting a new Cold War or walking away from trade talks. There is a wide range of leverage that Washington could be using to protect its own citizens from the long arm of Chinese repression. Unfortunately, the United States is instead choosing to remain mostly silent.

COMMENT – Here is a letter to President Trump and his Administration calling for a determination that Min Zin is “wrongfully detained” and that the President should advocate for his release.

I would ask every American that has interactions with Chinese counterparts to bring up the detention of both Min Zin and Youlin Chen. Make your counterparts aware of what has happened to American citizens visiting the PRC and ask them to work for change inside their country.

3. This Satellite Imagery reveals just how advanced China’s military is
   The Telegraph, July 15, 2026

In China’s remote Taklamakan desert, Xi Jinping’s forces are secretly building exact replicas of US warships and fighter jets.

Satellite images analysed by The Telegraph reveal this 3D model of a US Arleigh-Burke class destroyer under construction in February this year.

Three months later, the ship appears to be nearly finished. But being 2,700km away from water, it’s unlikely to be going out to sea.

Instead, it’s part of Beijing’s tactics preparing for a war against Taiwan – and the US if it comes to the rescue.

The three-dimensional model, completed within six months, includes many of the components of the original, including a full mast and even some of its radar equipment.

Because the models are near-identical to the American warships, China is able to practise missile attacks as accurately as possible.

COMMENT – To all those American business leaders, bankers, and investors who travel to the PRC, make money there, and advocate on behalf of the CCP… just remember that over 300 American sailors serve aboard an Arleigh Burke-class destroyer. Their purpose in the Western Pacific, the reason why those young men and women are on the front-line of freedom, is to deter the PRC from attacking its neighbors and seizing their territory, whether that’s the Philippines, Taiwan, or Japan.

Just imagine how your actions and behaviors will be perceived by your fellow countrymen when Xi Jinping orders the PLA to sink those vessels with ballistic and cruise missiles, killing hundreds of America’s sons and daughters.

No one is forcing you to make money there, that is on you.

The next time you think it’s necessary to go to Beijing, Shanghai, Shenzhen, or Hong Kong, remember what Xi Jinping and his Communist Party has ordered the PLA to do in the Taklamakan desert.

4. China exportiert seine Probleme [China exports its problems]
   Sabine Gusbeth, Handelsblatt, July 15, 2026 – Original in German

[GOOGLE TRANSLATE] The world’s second-largest economy is growing more slowly than expected. New growth drivers cannot compensate for the decline in traditional industries.

China’s economy is faltering. With official growth of 4.3 percent in the second quarter, it missed the growth target set by the government. Only the sharp increase in exports prevented worse results, but they can hardly mask the underlying problems anymore.

The image of China as a successful tech superpower, so often cultivated by the government, is beginning to crack. For a long time, China was described as experiencing two-speed growth: rapid expansion in future-oriented industries like batteries and robotics, and slower development in traditional sectors. But the truth is: many of the once-crucial sectors, such as construction, are not slowing down, they are shrinking.

Economists now speak of a K-shaped development. But this picture is also misleading, as it suggests that growth in future-oriented sectors can compensate for declines in other areas. This is far from the truth.

The government likes to boast about its successes in future-oriented industries. But from a macroeconomic perspective, these are still fragile, albeit rapidly growing, seedlings that cannot compensate for the decline in many traditional, often labor-intensive industries.

COMMENT – Great to see this is a major German publication, though time is running out for Berlin to act with purpose. My fear is that commentary like this only encourages German leaders to sit back and avoid making tough decisions in the hope that the PRC’s internal economic problems will make it so that Berlin doesn’t have to make any tough decisions.

I think that is a huge mistake.

Berlin needs to act with haste to implement the kinds of “derisking” that they know they must do.

5. China Is Sabotaging the World That Enables Its Rise
   Enrico Fardella and Sergey Radchenko, Foreign Affairs, July 15, 2026

Following the back-to-back state visits to China in May by U.S. President Donald Trump and Russian President Vladimir Putin, many U.S. and European commentators noted that the summit meetings yielded little of real substance. But from a Chinese perspective, that didn’t matter. What mattered were the visuals, broadcast in the Chinese state media: like the emperors of old, Chinese leader Xi Jinping was receiving tribute missions from the most important foreign potentates. In symbolic terms, the visits reinforced Beijing’s narrative that China has overtaken its rivals and is once again at the center of the world.

Underlying this triumphant vision is the Chinese claim that where the Soviets mismanaged socialism and the Americans corrupted capitalism, only China has discovered the formula capable of reconciling state authority with market dynamism and restoring international harmony. But this nationalist story risks obscuring a fundamental historical reality: China’s rise has not happened outside the systems its rivals built, but through Beijing’s skillful exploitation of them. In its early decades, Communist China relied on the Soviet Union to help construct its foundations. And ever since Deng Xiaoping’s “reform and opening” policies connected China to the world economy in the late 1970s, China has used its access to Western markets to forge itself into an economic and military superpower.

Yet Beijing seems strikingly unaware that its continued success depends on the U.S.-led order. In recent years, Beijing has consolidated its control over supply chains and acquired unprecedented leverage over its trade partners. It has also become increasingly brazen in its bid for industrial dominance, brushing off complaints in Europe and the United States that its overproduction is undermining their industries. For example, at the World Economic Forum session in Dalian in June, instead of acknowledging that China relies on the willingness of (mainly Western) countries to continue absorbing the Chinese surplus, Chinese Premier Li Qiang asserted that China is simply more competitive because it invests in innovation. Beijing’s failure to acknowledge, let alone address, its overcapacity problem has driven China’s key trading partners—all of them major Western economies—to the point of exasperation.

For now, it may seem that China has the upper hand, having secured a dominant position in a number of key global industries and supply chains. European countries in particular have been weakened by Chinese competition, and the failure of the EU to muster a unified strategy toward Beijing risks eroding its internal economic, and even political, cohesion. But the long-term outcome may be very different from what China’s leaders assume. Growing frustration with China is already prompting the United States and Europe to take stringent countermeasures to protect their industries. Beijing is thus overlooking the defining paradox of its own success: China’s rise remains tied to the openness of the economies it hopes to surpass. Its road to a post-Western order still runs through the West.

COMMENT – Great article by Enrico Fardella and Sergey Radchenko

I know both authors and really enjoy their work, in particular Radchenko’s 2013 book, Unwanted Visionaries: The Soviet Failure in Asia at the End of the Cold War. He tells the story of Gorbachev’s “Pivot to Asia” in the 1980s, which was meant to reinvigorate the Soviet Union, but fails in the face of rising contradictions inside the Soviet Union.

6. China urges Europe to stop backing ‘illegal’ South China Sea ruling to avoid harming ties
   Xiuhao Chen ​and Liz Lee, Reuters, July 14, 2026

China’s foreign ministry on Tuesday called the European side to ​be cautious in its words ‌and deeds on the South China Sea and stop endorsing the “illegal ruling” to ​prevent impact on China-EU ties and ​cooperation.

“Europe is not a party to ⁠the South China Sea issue ​and has no right to comment ​on China’s legitimate territorial sovereignty and maritime rights and interests in the South China Sea,” ​foreign ministry spokesperson Lin Jian ​told a daily press briefing.

The comments came after ‌a joint ⁠statement issued on Sunday by countries including some European nations said China’s expansive maritime claims in the South ​China Sea ​have ⁠no legal basis, followed by a relevant statement from ​the EU.

China has also summoned ​officials ⁠of the embassies of relevant countries in China and the EU delegation to ⁠China ​and lodged serious ​representations with them, Lin said.

COMMENT – Last week, I gave some commentary on the EU’s “statement” about the 10^th Anniversary of the ruling by the Permanent Court of Arbitration on the case brought by the Philippines against the PRC. [“Born to be Alive”, July 12, 2026]

I was pretty critical of Brussels for issuing such a watered-down statement that doesn’t actually denounce Beijing for its refusal to abide to its obligations under international law and to go so far as to paint the PRC’s efforts to avoid its obligations by negotiating with ASEAN as being responsible and something that the EU supports as being “in line with UNCLOS,” when clearly to be “in line with UNCLOS” requires Beijing to follow the PCA’s ruling.

So, it is interesting that the PRC foreign ministry would criticize Brussels for issuing its statement.

It suggests to me that Beijing is very much aware of the fractures and fissures within the European Union and among its member states. This denunciation of the statement is yet another effort to isolate those voices in Brussels that are pushing for greater EU unity against the PRC. Those individuals are painted as being “anti-China” and when Beijing denounces their activities, they are reminding folks in Europe that these “anti-China” people will only bring further cost on European countries because some of their folks show belligerence to Beijing.

This is classic United Front Work, which seeks to isolate those who criticize Beijing, while rewarding those it considers to be “friends of China.” Beijing then imposes collective punishment for the actions of the “anti-China” factions, while telling its so-called “friends of China” that they must do a better job of sidelining those people who “forced” Beijing to retaliate.

Unfortunately, Europe and its institutions have made themselves vulnerable to this kind of manipulation and coercion. We have seen for years now that these tactics work and I think it is clear that until Europe responds forcefully, the CCP will continue to employ these tactics.

7. VIDEO – What Americans Need to Understand About China
   Kevin Rudd and Ezra Klein, The Ezra Klein Show, July 15, 2026

You can’t understand China today without understanding its president, Xi Jinping.

Since coming to power in 2012, Xi has doubled down on communist ideology and significantly consolidated his own power while transforming China into an industrial juggernaut unrivaled in the world. And Xi’s ambitions for China go far beyond that.

So what does Xi want for China in the coming years? And how should the United States respond?

Kevin Rudd has a unique perspective on these questions. He first met Xi in the 1980s, when Rudd was a China analyst in Australia’s foreign service and Xi was a local party official. Decades later, when Rudd was the prime minister of Australia and Xi was China’s vice president, the two men got to know each other better. And after leaving office, Rudd decided to really try to understand Xi; his latest book, “On Xi Jinping: How Xi’s Marxist Nationalism Is Shaping China and the World,” is built off the doctorate he pursued at Oxford after his time as prime minister. Rudd recently finished a stint as Australia’s ambassador to the United States and is now the global president and chief executive of the Asia Society.

In this conversation, Rudd explains Xi’s ideology and the forces that shaped it, his ambitions for China and strategy for achieving them, and what Xi thinks of the United States and Trump.

COMMENT – A really good interview with Kevin Rudd.

8. TWEET OF THE WEEK – Elite Pakistani bomb disposal squad operator killed while defusing IED, after Chinese bomb defusal kit turned out to be fake.

   July 14, 2026

COMMENT – Here is the reporting in the Pakistani outlet, Dawn, which makes no reference to the fake Chinese bomb defusing kit.

What’s the old saying: with friends like this…

Authoritarianism

9. Suspected Chinese espionage group used a Roundcube exploit chain to burrow into universities
   Matt Kapko, Cyberscoop, July 7, 2026

10. Translation: Euphemism and Censorship Surround Guangxi Flooding, Dam Breach News
    China Digital Times, July 13, 2026

11. Enabling Iran: A Timeline of China’s Role During and After Operation Epic Fury

    U.S.-China Economic and Security Review Commission, July 15, 2026

The conflict involving the United States and Iran has renewed attention on Iran’s military capabilities and regional activities, but China’s role in enabling Iran often receives less scrutiny. Over the past several decades, the China-Iran relationship has evolved from one of limited cooperation into a broad strategic partnership spanning economic, diplomatic, and security ties.

Although China has largely refrained from selling weapons directly to Iran since the mid-2000s, Beijing’s support for Tehran has continued in other forms. China has provided significant economic, technological, and diplomatic support that has helped Iran mitigate international sanctions, sustain oil exports, and acquire dual-use technologies necessary for Iran’s drones, ballistic missiles, and other weapons.

At the same time, China has calibrated this support to preserve its broader political and economic interests in the Middle East. As one of Iran’s most important international partners, Beijing plays a critical—though often overlooked—role in sustaining Iran’s capacity to destabilize the region and in attempting to shape the strategic environment surrounding the conflict.

12. Iranian missiles are defeating US soft-kill defences using Chinese guidance

    Tom Sharpe, The Telegraph, July 15, 2026

Tehran’s widest single-night barrage targeted facilities in five countries after Beijing reportedly shared encrypted sat-nav keys.

Early this Sunday, Iran launched its widest single-night attack of the war so far: mixed salvos of Zolfaghar ballistic missiles and drones simultaneously targeting US facilities in five countries – Al Udeid air base in Qatar, Ali Al Salem in Kuwait, US Fifth Fleet headquarters in Bahrain, Prince Hassan air base in Jordan and Duqm harbour in Oman.

As ever, damage reports vary, but it does seem that casualties were light. The significance, however, lies in one of the reasons the missiles got through. Many had reportedly been upgraded to make use of China’s encrypted BeiDou-3 satellite-navigation system. This made them significantly harder to stop and much more expensive to do so.

This is because there are basically two ways to stop a missile which is coming at you, or at something you are trying to protect. “Hard kill” involves hitting the incoming threat with a projectile of some sort, usually an interceptor missile of your own, sometimes a cannon shell or a bullet. That’s spectacular, filmable and – in the case of interceptor missiles – typically very expensive.

“Soft kill” defeats the enemy missile without touching it: jamming or spoofing its seeker head or navigation, or seducing it away from the target with active or passive decoys, flares or chaff. This typically costs a fraction of a hard kill and, depending on the type of weapon heading your way, can often have a higher probability of kill (pKill). When I was last doing this for real, soft-kill techniques often had a better success rate than shooting missiles down.

Those stats have been reversed because interceptor missiles are much more capable than they were back then. Conversely, missile seeker heads and navigation methods are better at seeing through attempts to distract them. Nevertheless, for the highest pKill against a range of missiles and drones fired at you, you want a mixture of both hard and soft and then the principal warfare officer (in the case of a warship on the defence) determines which method to use against which weapon and at what range.

13. He Called Out China’s Economy. Then He Went Silent—for Good.
    Lingling Wei, Wall Street Journal, July 13, 2026

14. Hong Kong national security laws need constant improvement to close loopholes, ex-Beijing official says

    James Lee, Hong Kong Free Press, July 15, 2026

15. Former Hong Kong law student gets nearly 3 years after riot acquittal overturned

    Brian Wong, South China Morning Post, July 15, 2026

A former law student has been jailed for nearly three years for taking part in a riot during the 2019 anti-government protests in Hong Kong, after a judge overturned her acquittal and found her guilty based on “overwhelming” circumstantial evidence.

Alice Tong Ka-yan, 27, was sentenced at the District Court on Wednesday to two years and 10 months’ imprisonment for rioting. Her lawyers had said in mitigation that she had acted under peer influence and the prevailing social atmosphere.

Judge Edmond Lee Chun-man described the sentence as the most lenient available for a defendant who had pleaded not guilty to taking part in a riot involving serious violence during the unrest.

Lee agreed to reduce Tong’s sentence from a starting point of four years in light of her good background, the stress she had endured during the seven-year proceedings, her decision to return from overseas to face the consequences, and the increased difficulty for her to become a lawyer following her conviction last month.

The court heard Tong had been studying law at Lancaster University in the United Kingdom when she briefly returned to Hong Kong during the summer break and took part in a protest in Wan Chai on the night of August 31, 2019.

She was cleared of rioting in August 2021 on the grounds that prosecutors failed to prove she had either committed a violent act or abetted violence during a 30-minute stand-off between protesters and police on Hennessy Road.

Tong subsequently resumed her study in the UK and graduated, but returned to Hong Kong after the Department of Justice lodged an appeal against the verdict.

In July 2024, the Court of Appeal ordered Lee to reconsider his verdict which it said was “perverse”.

The appellate court, while upholding Tong’s acquittal of possessing a laser pointer as an offensive weapon, said the cumulative effect of the timing and location of her arrest, her black outfit and attempt to flee strongly suggested that she was not at the scene for innocent reasons.

In a judgment last month, Lee accepted those findings and ruled that Tong had taken part in the riot by encouraging others through her presence.

COMMENT – It appears that President Trump has failed to renew Executive Order 13936 and let it expire on July 14.

EO 13936 was the action that President Trump took during his first term (July 14, 2020) which stripped Hong Kong of its differential treatment as an autonomous jurisdiction within the People’s Republic of China.

President Biden extended the Executive Order each year during his presidency and last year, on July 10, 2025, President Trump signed a 1-year extension.

By letting the EO lapse, it appears that Hong Kong will now be afforded all the benefits it gained as an autonomous region through the United States-Hong Kong Policy Act of 1992, as well as undercut the Hong Kong Human Rights and Democracy Act of 2019 and the Hong Kong Autonomy Act of 2020.

This is a big disappointment, as Hong Kong is obviously NOT autonomous.

The failure to renew EO 13936 seems to fit with this article from Bloomberg this week:

Trump’s Aides See China Cheating on Trade, But Shun Retaliation

Jenny Leonard, Bloomberg, July 15, 2026

Unless I’m missing something, President Trump is making huge compromises which benefit Xi Jinping and the Chinese Communist Party and has gotten nothing in return. So much for reciprocity.

It seems clear that President Trump prefers to live in his own alternative reality.

16. China expels Politburo member Ma Xingrui in Xi’s anti-corruption campaign
    Ken Moritsugu, AP News, July 15, 2026

17. Media Freedoms Report 2025: ‘The New Abnormal’, Foreign journalists in China face growing pressure as reporting independently becomes the “new abnormal”

    The Foreign Correspondents’ Club of China, July 13, 2026

Nearly all foreign correspondents working in China say reporting conditions fail to meet international standards, according to the Foreign Correspondents’ Club of China’s (FCCC) 2025 Media Freedoms Report, which says pressure, surveillance and intimidation have become “the new abnormal” for journalists covering the country.

The survey found that 94% of respondents said reporting conditions in China do not usually, or almost never, meet international standards. Nearly two-thirds (64%) reported being obstructed by police or other officials while reporting, while 77% said sources had declined interviews because they were not permitted to speak to foreign media.

The report points to growing pressure beyond China’s long-established political red lines. Almost half of respondents said new topics had become more sensitive over the past year, including the economy, demographics, trade tensions and emerging technologies. Many also described increasing difficulties persuading sources to speak and said economic reporting has become significantly harder.

Foreign correspondents also reported growing pressure on Chinese colleagues. Four in ten respondents said their local staff had experienced harassment or intimidation, while almost one-third said sources had faced questioning or other repercussions after speaking to foreign media. Respondents also raised concerns over digital surveillance, visa delays and legal threats linked to their reporting.

The report concludes that restrictions on reporting are no longer experienced as isolated incidents but as a routine feature of life for foreign journalists in China.

COMMENT – Here is the link to the PDF of the full report.

This stuck out to me:

• 38% of the respondents say reporting conditions in China “almost never” meet international standards

• 56% of the respondents say reporting conditions in China “usually do not” meet international standards

• 6% of the respondents say reporting conditions in China meet “just about” international standards

• 0% of the respondents say reporting conditions in China “usually” or “almost always” meet international standards

18. 2 men sentenced for roles in trafficking fentanyl analogues from China to the US
    Lucy Quaggin, South China Morning Post, July 10, 2026

19. China’s Grey-Zone and Geoeconomic Coercion Below the Threshold of Conflict
    RUSI, July 8, 2026

20. How Xi Went from Admiring Putin to Managing Him
    Emma Tucker, Wall Street Journal, July 14, 2026

Environmental Harms

21. Storm Causes Mass Evacuations, Floods and Flight Disruptions in China
    Lily Kuo and Pei-Lin Wu, New York Times, July 12, 2026

22. China tried to clean up its air pollution. Then came the rebound
    Steven Bernard, Eleanor Olcott and Haohsiang Ko, Financial Times, July 14, 2026

23. Report on IUU Fishing, Bycatch, and Shark Catch
    NOAA Fisheries, July 14, 2026

In its 2026 Report, NOAA Fisheries identified six nations for illegal, unreported, and unregulated (IUU) fishing; two nations for the production of seafood-related goods through forced labor; six nations and entities for shark catch without having a regulatory program comparable to that of the United States; and two nations for bycatch of protected living marine resources without a regulatory program comparable to that of the United States. Some nations or entities are identified for multiple issues. Identifications are based on actions or issues from the preceding 3 years. The 2026 Report was prepared in 2025; therefore it is based on activities in 2022, 2023, and 2024.

• Costa Rica, Grenada, Mexico, Morocco, the People’s Republic of China, and the Russian Federation were identified for IUU fishing;

• Burma and the People’s Republic of China were identified for forced and child labor in seafood supply chains;

• Ghana, Japan, Mexico, Namibia, the People’s Republic of China, and Taiwan were identified for shark catch without a regulatory program comparable to that of the United States; and

• Indonesia and Papua New Guinea were identified for bycatch of protected living marine resources without a regulatory program comparable to that of the United States.

24. Chinese Fishing Fleets Squeeze Local Economies from Peru to Sierra Leone
    China Global South Project, July 7, 2026

Foreign Interference and Coercion

25. Ex-Fed advisor gets over three years in prison for lying about China ties

    Anniek Bao, CNBC, July 15, 2026

A former senior advisor to the Federal Reserve Board of Governors was sentenced to over three years in prison for lying to federal investigators about sharing restricted central-bank information with Chinese intelligence operatives, according to the Justice Department.

John Harold Rogers, 64, was found guilty in February of making false statements to investigators when he denied sharing restricted information on monetary policy, U.S. Attorney Jeanine Pirro said in a statement Wednesday. The same jury acquitted him of the more serious charge of conspiracy to commit economic espionage.

“John Rogers spent years secretly funneling sensitive Federal Reserve information to Chinese spies, then looked investigators in the eye and lied about it. And when that wasn’t enough, he lied again under oath at trial,” Pirro said.

The sentencing comes at a time when the Trump administration has intensified its pursuit of alleged economic espionage by Beijing.

U.S. District Judge Dabney Friedrich also ordered Rogers to serve additional 12 months of supervised release. Defense lawyers had asked for no additional jail time beyond the roughly 18 months he had already spent in custody, which will be credited toward his sentence.

Rogers, a U.S. citizen who holds a Ph.D in economics, worked as a senior advisor for the Federal Reserve Board’s division of international finance from 2010 to 2021, with access to nonpublic material on monetary policy and Federal Open Market Committee deliberations.

Prosecutors argued that sharing advance knowledge of Fed interest-rate decisions could have allowed Beijing to generate “enormous profits” from trading its roughly $1.5 trillion in U.S. Treasurys, according to the Justice Department.

Rogers had allegedly begun a clandestine relationship in 2017 with Hummin Lee, a Chinese intelligence operative he met at a conference in China, and conveyed Fed information during meetings in Chinese hotel rooms held under the guise of teaching academic classes.

He printed restricted documents before traveling to China, emailing materials to his personal account after stripping classification markings, and forwarded sensitive information to a professor at Fudan University, the Justice department release said. In exchange, he received university professorships and financial benefits, prosecutors said.

Asked directly in a February 2020 inspector general interview whether he had ever shared restricted Fed information outside the board, Rogers answered “never,” according to the Justice Department.

Chinese ministry of foreign affairs did not respond to CNBC’s request for comments.

26. US National Science Foundation to ban projects with flagged Chinese institutions
    Lucy Quaggin, South China Morning Post, July 14, 2026

Raising security fears, NSF moves from case-by-case approval to full ban on working with restricted entities and their employees.

The United States’ National Science Foundation (NSF) is set to ban collaborations with Chinese research institutions designated as restricted entities, as well as their employees, under a new policy that moves away from seeking to balance security risks with the benefits of international collaboration.

The policy reflects a broader congressional push by House Republicans to curb academic partnerships between China and the US, amid lawmakers’ concerns that such ties could contribute to Beijing’s military and technological development.

The public notice, posted on the NSF website last week, notified the American research community that agency funds would no longer be used for collaborations with entities on US restricted-party lists, including Chinese universities and research institutions.

John Moolenaar, chairman of the House Select Committee on the Chinese Communist Party, called the policy “commendable and commonsense” in a statement following the announcement, adding that it “will protect taxpayer-funded research and innovation”.

“Prohibiting federal funding from being used to collaborate with Chinese entities that are national security risks or human rights abusers is straightforward and all federal agencies should follow the lead of the Pentagon and NSF,” Moolenaar said.

The NSF, a federal agency established by Congress in 1950 that funds scientific research through grants, said the US government determined that these entities warrant restrictions on national security and other foreign policy grounds.

The Chinese embassy in Washington did not immediately respond to a request for comment.

The new policy marks a pivot from just two years ago, when the NSF announced a risk mitigation process called the Trusted Research Using Safeguards and Transparency (TRUST) framework, which guided assessments of potential national security risks of grant proposals.

At the time, Rebecca Spyke Keiser, NSF’s chief of research security, spoke about balancing risks while preserving international scientific collaboration to further American innovation.

In 2024, Keiser, who is now also NSF’s acting chief of staff, called the TRUST framework “a major step in pivoting from a compliance culture to a research security culture”.

“But we cannot continue to lead the world in science and innovation if we are fixated on achieving zero risk related to research security,” she added.

Keiser said the US needed to invest in science domestically while continuing to encourage principled, mutually beneficial international collaboration.

The Select Committee highlighted that the forthcoming policy prohibits senior and key personnel on NSF awards from “holding appointments or positions at, receiving research support from, or collaborating on NSF-funded research with these restricted entities”.

The change reflects a shift from managing national security risks on a case-by-case basis to wholly prohibiting NSF-funded collaboration with entities the federal government has deemed to be too risky.

The move puts the agency in line with a broader push by the Trump administration’s Department of Defence, which has increasingly treated collaboration with China as threatening US national security.

COMMENT – True to form, the Hong Kong-based South China Morning Post reports on this with a bias that leans towards their overseers in the Chinese Communist Party… no mention at all the PRC imposes far more stringent restrictions on its research institutions and their collaborations or anything about the decades of malign behavior by researchers on behalf of the PRC.

This is a great move by NSF and will go a long way to restoring trust and confidence that taxpayer funded research isn’t just benefiting the PRC through these one-way research collaborations.

27. Ten days later, Pacific Islands Forum still can’t reach agreement on China missile tests

    Anneke Smith, The Post, July 15, 2026

More than a week after China’s surprise launch of a nuclear-capable missile into the South Pacific, the Pacific Islands Forum (PIF) remains silent.

Some of its 14 member states (New Zealand, Australia, Fiji, Papua New Guinea, the Solomon Islands, Tuvalu, Palau, Vanuatu and the Marshall Islands) have issued individual statements condemning the test - China’s second in two years.

While the PIF did not issue a joint statement after the 2024 test - the comments being made by some members this time around are unusually strong - “this is a threat to regional peace”, ”don’t threaten us“ and “this is not something a friend does.”

COMMENT – ASEAN is susceptible to this same kind of pressure.

28. China does not seek ‘sphere of influence’ in ties with Pacific island nations, foreign minister says

    Reuters, July 14, 2026

China “has no geopolitical intentions and does not seek a so-called ‘sphere of influence’” in ​its dealings with Pacific island nations, Foreign ‌Minister Wang Yi told his counterpart from the Solomon Islands in Beijing on Tuesday.

China’s cooperation with the Solomon ​Islands “comes with no political strings attached” and ​is not forcibly imposed, Wang told Rick Houenipwela, ⁠an official summary released by China’s foreign ​ministry showed.

Pacific island nations are independent and sovereign ​nations, “not someone’s ‘backyard’”, Wang said, adding that China’s ties with these nations “should not be subject to interference from any third ​party”.

The meeting came a week after China’s military test-fired ​a missile with a dummy warhead from a nuclear-powered submarine ‌into ⁠the South Pacific, which drew criticism from regional countries, including the Solomon Islands.

The test fire coincided with the signing of a mutual defence pact between ​Fiji and ​Australia.

Solomon Islands ⁠Prime Minister Matthew Wale last week said China is “a good friend of ​Solomon Islands but this is not ​something a ⁠friend does” when asked about the missile test, while vowing stronger ties with Australia.

COMMENT – So if there are “no political strings attached” then I guess Beijing would be perfectly fine if Pacific island nations established diplomatic relations with Taiwan.

29. A smoking gun in the Solomons proves information shaping by China
    Cleo Paskal, The Sunday Guardian, July 12, 2026

30. Lithuania’s new PM says allowing Taiwan’s de-facto embassy was ‘maybe too brave’

    Reuters, July 14, 2026

COMMENT – Disappointing… sends the message to Beijing that their coercion tactics work.

31. China Is Ready to Get Tough: Beijing’s diplomatic retaliation has limits—but fewer than before.
    Deng Yuwen, Foreign Policy, July 14, 2026

In recent years, although China has vigorously promoted the idea of a community with a shared future for mankind and global governance, it has become increasingly unforgiving toward countries it believes have offended it. The latest example is Beijing’s announcement last month that it would prohibit exports of dual-use items to 10 U.S. companies, in retaliation for Washington’s inclusion of several leading Chinese companies on its newly expanded list of military-linked enterprises.

In the past, the core task of Chinese diplomacy was to secure external space for domestic development. Today, Chinese diplomacy seeks to use the strength accumulated at home to transform the country’s external environment.

32. Japan wants 60 million tourists, but China isn’t sending them
    Julian Ryall, South China Morning Post, July 12, 2026

33. How Putin Turned Japan into a Den of Spies
    Jane Bradley, Michael Schwirtz, and Adam Goldman, New York Times, July 12, 2026

Soon after troops invaded Ukraine in February 2022, Western leaders expelled hundreds of Russian spies from their capitals and blacklisted companies with ties to the Kremlin.

The coordinated effort was intended to make it harder for the Kremlin to collect intelligence and buy equipment like microchips, transmitters and the machinery used to make weapons.

Since then, officials say, dozens of those banished spies have turned up in an unexpected place: Japan.

The country’s weak espionage laws and flourishing high-tech industry have made it a crucial piece of the Russian war effort. Ninety percent of Russian missiles and drones contain Japanese components, according to Ukrainian government estimates.

COMMENT – The same weak espionage laws make it easy for the PRC to take advantage of Japan as well.

34. Taiwan groups urge asylum law after China imposes ethnic unity law
    Keoni Everington, Taiwan News, July 13, 2026

35. How China Is Winning Friends and Influencing People
    Lizzi C. Lee and Eric Olander, Foreign Affairs, July 14, 2026

Human Rights and Religious Persecution

36. Ga. Sharavjamts and the Mongolian Myths China Tried to Silence
    Massimo Introvigne, Bitter Winter, July 10, 2026

37. China is dealing with its own manosphere
    The Economist, July 12, 2026

38. Then They Came for Macau: The Au Kam San Case Signals an Escalation of Repression

    Yoyo Ng, Bitter Winter, July 15, 2026

39. Thailand: Don’t Forcibly Return Chinese Dissidents
    Human Rights Watch, July 13, 2026

40. China: New ‘ethnic unity’ law set to entrench assimilation of minority groups
    Amnesty International, June 30, 2026

41. China: Ethnic Unity Law is an attack on communities, including in the diaspora
    Article19, July 13, 2026

42. 51 Estonian lawmakers condemn China’s ethnic unity law, urge immediate repeal
    Phayul, July 9, 2026

Industrial Policies and Economic Espionage

43. China’s Property Slump Can Curb Growth for Years, Even Without a Banking Crisis

    Kenneth S. Rogoff and Yuanchen Yang, SCCEI, July 15, 2026

Real estate makes up nearly 70% of China’s household wealth — double the U.S. share. The analysis finds a 10% drop in home prices cuts China’s household spending by roughly 1.5–2.3%, versus just 0.6% in 1990s Japan. Applied to China’s 20% (official) to 40% (unofficial) property price declines, that’s a consumption loss of 2–4% of GDP.

44. China’s GDP growth set to slow, raising expectations for more stimulus
    Kevin Yao, Reuters, July 13, 2026

45. Cutting China reliance would cost the west $23tn, research suggests
    Peter Foster, Financial Times, July 13, 2026

COMMENT – And what would it cost the PRC? This article and the report by EY-Parthenon it refers to, makes it seem like the costs would be borne by the West alone and nothing would happen to the PRC.

Desmond Shum raises this and questions the framing by the FT with this post.

46. Five things to watch when China reports economic growth
    Thomas Hale, Joe Leahy and Haohsiang Ko, Financial Times, July 14, 2026

Monthly indicators show weakness in retail sales and investment ahead of second-quarter figure.

China’s second-quarter GDP data release this week comes at a crunch moment for the world’s second-largest economy.

Recent monthly data has signalled rising economic pressures, with retail sales falling and the return of a slump in fixed-asset investment.

Such declines raise questions over how far these indicators might be at odds with the GDP rate, which rarely deviates from an official target. This year, it is set at 4.5-5 per cent. Analysts forecast second-quarter growth on Wednesday will come in at the lower end of that range.

Unlike other major economies, GDP data in China lacks so-called expenditure breakdowns of investment, consumption and net exports on a quarterly basis, leading to a heavy reliance on monthly measures.

That monthly data has “deteriorated significantly” in the second quarter, said Logan Wright, an analyst at Rhodium Group, pointing to the impact of higher prices from the war in Iran.

Wright added that of the three components that would make up expenditure GDP, it was “hard to see growth in any one of them”, adding: “The gap between China’s actual performance and stated performance is widening at present.”

…

Assessing the headline figure

The Bloomberg median forecast across 34 analysts for the second quarter is 4.5 per cent, in line with the official target.

But some economists express major doubts.

“In two decades of working on this economy I’ve never met a single Chinese official who defended the GDP data upon any level of questioning about it,” said Wright at Rhodium Group, who forecasts growth of between zero and 1 per cent for the quarter.

China has unveiled weak GDP data in the past, including an outright decline at the start of the Covid-19 pandemic in 2020.

Carsten Holz, an academic who studies China’s statistics, said that the central leadership’s “policy objectives” were “guaranteed to appear in the statistics, whether due to tangible action at the local level or to adjustments in data collection”.

“Today’s statistics mirror yesterday’s economic policy decisions,” he added.

“We are almost flying blind, we are just taking whatever they are giving us.”

COMMENT – “Lacks so-called expenditure breakdowns” is a euphemism for: “the PRC lies about its GDP.”

47. Europe at an inflection point on China
    Anna Fifield, July 15, 2026

48. China’s automakers squeezed as materials suppliers rake in profits
    Kenji Kawase, Nikkei Asia, July 14, 2026

49. China Exports Surged in June, Exceeding Market Expectations
    Wall Street Journal, July 14, 2026

50. Australians ‘going gangbusters’ on Chinese batteries in renewable energy shift
    Nic Fildes, Financial Times, July 13, 2026

51. Major German carmakers hit by steep China sales plunge as competition heats up
    Chan Hohim, Associated Press, July 11, 2026

52. China’s monthly car exports surge past 1mn for first time
    Edward White, et al., Financial Times, July 14, 2026

53. Nvidia halves Asia buyer list in China chip crackdown
    Zijing Wu, Financial Times, July 14, 2026

54. How China’s aerospace vision differs from Elon Musk’s SpaceX
    Frank Chen, South China Morning Post, July 13, 2026

55. China’s Economy Grows at Weakest Pace Since 2022
    Katrina Northrop, Wall Street Journal, July 15, 2026

56. China’s graduate glut: millions enter a job market with little use for them
    Alastair McCready, The Guardian, July 13, 2026

57. China’s property developers face fresh liquidity crunch
    Wataru Suzuki, Nikkei Asia, July 13, 2026

58. China expands anti-sanctions toolkit, raising risks for foreign firms
    Erin Hale, Al Jazeera, July 10, 2026

59. ZTE among Chinese firms licensed to purchase Nvidia’s H200 chips, documents show
    Reuters, July 14, 2026

Cyber and Information Technology

60. ‘They Don’t Need People’: The Workers Left Behind by China’s Robot Drive
    Vivian Wang, New York Times, July 11, 2026

61. Nobel-Winning U.S. Chemist Will Move to China to Lead A.I. Institute
    William J. Broad, New York Times, July 9, 2026

62. Companies turn to Chinese AI models to cut costs
    Jamie John and George Hammond, Financial Times, July 13, 2026

63. U.S. Biotechs Are Keeping More Secrets to Beat Copycats in China
    Xavier Martinez, Wall Street Journal, July 9, 2026

64. China, Russia and Others Seek to Inflame Debate Over A.I. Data Centers
    Steven Lee Myers and Dustin Volz, New York Times, July 9, 2026

65. China, Russia and Others Seek to Inflame Debate Over A.I. Data Centers
    Steven Lee Myers and Dustin Volz, New York Times, July 9, 2026

66. State of AI Safety in China
    Concordia AI, July 15, 2026

67. China’s trade expands on AI boom, offsetting weak sectors
    Ck Tan, Nikkei Asia, July 14, 2026

68. Chinese AI Startup DFSX Releases Chip to Take on the West
    Yang Jie and Sherry Qin, Wall Street Journal, July 14, 2026

69. Chinese Robotics Startup Raises $200 Million
    Du Zhihang, Caixin Global, July 14, 2026

70. Xi Jinping to attend World AI Conference for first time as China elevates tech push
    Howard Liu, South China Morning Post, July 13, 2026

71. When China’s open-source AI is a trap
    The Economist, July 14, 2026

72. Telecom bill vote might open Taiwan to Starlink
    Esme Yeh, Taipei Times, July 14, 2026

Military and Security Threats

73. What Happens if China Hacks the US Water Supply? I Went to a Secret War Game to Find Out
    Andy Greenberg, Wired, July 8, 2026

74. An Analysis of China’s First Military LLM
    Valentin Weber, China: Technosphere, July 8, 2026

Key takeaway: In 2023, China’s first military LLM was launched. It is used for planning, force allocation, intelligence analysis, and operational optimization, trained on sources such as open-source, signals, and human intelligence. It supports scalable model sizes (requiring specialized Huawei hardware) and is already used by PLA units to accelerate decision-making processes to seconds. The emergence of artificial decision-making is likely to have a sizeable impact on deterrence. Influencing how AI systems think, may become as strategically important as influencing human leaders.

In 2023, DataExa launched the Tianji Military LLM. It has 5 core functionalities:

• Military Q and As

• Combat Mission Planning

• Force Allocation

• Military Operations Optimization

• Intelligence Compilation

The company draws on a variety of sources, including open source intelligence, signals intelligence and explicitly states that human intelligence (HUMINT) is part of the information sources.

75. Shooting Starlink: The “no limits” partnership between Russia and China is taking aim at Elon Musk
    Michael Weiss, Roman Dobrokhotov, and Christo Grozev, The Insider, July 9, 2026

76. With a Successful Rocket Launch, China Clears a Key Hurdle in Race with SpaceX
    Selam Gebrekidan and Pei-Lin Wu, New York Times, July 10, 2026

77. China Successfully Launches Reusable Rocket in a Win for Space Program
    Katrina Northrop, Wall Street Journal, July 10, 2026

78. Making history! China lands rocket during an orbital launch for 1st time ever
    Mike Wall, Space, July 10, 2026

79. A Picture-Perfect Landing Shows China’s Ambitions to Narrow the Space Race
    Kenneth Chang, New York Times, July 10, 2026

80. Japan’s space agency conducts first test flight for experimental reusable rocket
    Mari Yamaguchi, Associated Press, July 11, 2026

COMMENT – Lots of breathless reporting that the PRC conducted a successful launch of a reusable rocket last week, but less attention that Japan did the same thing the next day.

81. Chinese and Russian ships join naval drills in Yellow Sea
    Associated Press, July 14, 2026

82. Taiwan orders dozens of sea drones to fend off China’s maritime squeeze
    Thompson Chau, Nikkei Asia, July 15, 2026

83. Beijing hits out as US-led coalition marks 10th anniversary of South China Sea ruling
    Alyssa Chen, South China Morning Post, July 12, 2026

One Belt, One Road Strategy

84. China targets Namibia’s oil, uranium and lithium in fresh strategic partnership
    Ayodeji Adegboyega, Business Insider, July 8, 2026

85. Chinese Dominance of African Ports Raises Alarms
    ADF, July 14, 2026

Opinion

86. The Coming Clash Between China and Europe: Why a Trade War Can’t Be Avoided

    Thorsten Benner, Foreign Affairs, July 16, 2026

In 2025, Chinese leader Xi Jinping tried to capitalize on U.S. belligerence toward Europe by promoting China as the responsible great-power alternative. In a message sent to mark the 50th anniversary of diplomatic relations between China and the European Union, Xi invited Brussels to join forces with Beijing, to “uphold multilateralism, safeguard fairness and justice,” and “oppose unilateralism and bullying.” Despite the lofty rhetoric, Beijing offered nothing of substance to Europeans, and did nothing to address their concerns about unfair trade practices that are threatening large swaths of European industry. Indeed, rather than seeking to conciliate, Chinese premier Li Qiang recently dismissed the concerns of Europeans worried about a “China Shock 2.0,” telling them to focus instead on “China Opportunity 2.0.”

Key EU leaders, as well as the Brussels bureaucracy, are not buying it. They have concluded that the very survival of Europe’s core industries is threatened by China. The first “China shock” describes the devastation of U.S. industry in sectors including furniture, textiles, and metals that came in the early 2000s, after China’s accession to the World Trade Organization. The new China shock will be different. It will happen mainly in Europe, and it will be more severe, devastating advanced industrial sectors—including automotive, machinery, chemicals, pharmaceuticals, and green energy—and leading to immense job losses.

Increasingly, European leaders are arguing that the EU needs to take action to protect its industries. So severe is the threat that measures that were unthinkable a few years ago are now gaining momentum. Earlier this year, for example, the French government proposed “establishing a level of protection equivalent to a general tariff of around 30 percent vis-à-vis China.” And although Germany was initially hesitant, Chancellor Friedrich Merz has signaled that he is ready to act to deal with China’s unfair trade practices. Last month, every EU leader, with the exception of Spain, tasked the European Commission with coming up with options for action.

An all-out trade war with China is becoming a real possibility. Europe is now the only major market with high purchasing power that is wide open to Chinese products. With Chinese domestic demand weak and many firms struggling to make a profit, Beijing desperately needs the European market. As a consequence, Beijing is likely to do everything possible to keep it open. If Brussels wants to have a fighting chance in the looming trade war, it will need to ensure maximum unity of its members, as well as wide-ranging cooperation with like-minded partners. Neither will be easy. But both will be necessary if Europe is to preserve the industrial base that is vital to its prosperity and security.

87. Beijing’s own goal in the Pacific
    Oliver Nobetau, Lowy Institute, July 7, 2026

88. China Can’t Talk About Birth Rates Without Talking About Rural Pensions
    Lijing Gao, The Diplomat, July 15, 2026

89. Why China still believes in the power of rote memorisation
    Thomas Hale, Financial Times, July 13, 2026

90. AI is not enough to arrest China’s decline
    Ruchir Sharma, Financial Times, July 13, 2026

There are other, more powerful forces weighing on the country’s economy.

For all the worry about how America has become one big bet on AI, a similar but perhaps more alarming story is unfolding quietly in the other economic superpower. China’s vaunted AI prowess is concealing deep rot elsewhere in its economy.

Though many forecasters keep expecting China to surpass the US as the world’s leading economy, its growth peaked in 2021. Since then, China’s share of global GDP has fallen in nominal terms from 18 to 16.5 per cent, while the US share has risen to 26 per cent. China’s growth rate has dropped below the rest of the world, including the US. In real terms, independent estimates now put China’s growth in real terms closer to zero than to the official target of 4.5 to 5 per cent.

Even by the official numbers, AI is not providing a lift big enough to overcome other forces weighing on China, including its shrinking workforce, rising indebtedness, a broken property market, the revival of a meddlesome regulatory state and the resulting exodus of capital and people.

China’s population also peaked in 2021. Last year, births hit a record low, and deaths hit a record high. The working-age population is on pace to shrink by 75mn every decade this century. Historically, having fewer workers has always meant slower growth; countries with declining populations rarely sustain growth above 2 per cent. And for China, given the scale of its demographic bust, AI is unlikely to replace human workers fast enough to ease the economic blow.

Without the AI boost, China would be much worse off. After adding little in the 2010s, net exports now account for about a third of the country’s growth, driven mainly by AI-related goods. But this is a very large contribution to an otherwise weak domestic economy. Chinese hyperscalers are investing just $100bn in AI this year compared to $750bn by US rivals, yielding far less of a pop to growth. And though every country now hopes for an AI-driven productivity miracle, the expected boost in China is about a third of a percentage point by 2030, hardly enough to halt its decline.

The structural challenges are daunting. In the past five years, China’s augmented deficit (which includes off-budget spending) has reached nearly 15 per cent of GDP, higher than any other major country, pushing augmented government debt to 135 per cent of GDP. Unlike the US and most other countries, China has rapidly mounting debts in the private sector as well. Total debt amounts to nearly 350 per cent of GDP — higher than in the US despite China’s much lower per capita income.

The debt problem is partly a hangover of the great property bubble. Beijing responded to the global crisis of 2008 by pumping credit into real estate, which was the main contributor to growth in the last decade. Then the bubble popped, also in 2021. Property prices tumbled and are now at a 20-year low, in inflation-adjusted terms. In new but half-empty developments, including a faux Venice in the north-east, flats can be rented for $120 a month. As property wealth shrivels so does consumer confidence, and retail sales are falling.

The stock market reflects this distorted economy and has gone nowhere for years. Earnings are strong for firms that supply the AI stack and weak for consumer-facing companies. Meanwhile, the government has moved on from property to pumping credit into new manufacturing industries, in effect replacing one debt bubble with another.

In late 2020, China launched a stunning regulatory crackdown on its big tech firms. Now, after retreating for a couple of years, an index tracking regulatory pressure is surging again. Giving up on making money in China, multinationals are scaling back operations. Net foreign direct investment is negative. Last year a record $425bn in capital flowed out of Chinese financial markets.

People are leaving as well. The immigrant share of the population is stuck at just 0.1 per cent, a fraction of the share in India (which is just as populous). The number of western expats living in China has fallen markedly. It is historically unusual for a major power to have so little allure for foreigners and foreign money.

The growing hype around Chinese AI doesn’t change the fact that 2021 was peak China. Given its demographic challenges and heavy debts, Beijing can’t do much to prop up domestic growth. It has shifted instead to dumping manufactured exports, but the resulting backlash is spreading fast. And AI isn’t a fix for everything. Its impressive powers may be the answer to many problems, but they can’t reverse the forces driving China’s decline.

Patrick Hernandez had terrible timing. I don’t mean that his singing was off, he just couldn’t spot when an era was coming to an end.

The French singer released his most popular disco song, “Born to be Alive” in early 1979 and by the middle of July, his song was the #1 hit in America.

As Hernandez was imagining a long and illustrious career as an artist known for disco, Steve Dahl, a Chicago shock jock at the radio station WLUP had a different idea.

On July 12, 1979 (47 years ago today), Dahl, who hated disco, teamed up with the Chicago White Sox, for a promotion that was meant to attract additional fans to their Thursday night double-header against the Detroit Tigers.

Dahl’s idea was to hold an event that was known as “Disco Demolition Night.”

He invited his listeners to attend the Sox-Tigers game and to bring their disco records with them. The staff would collect them as fans entered the stadium and in between the two games, Dahl would put the vinyl records in a crate, along with some explosives, and blow them up in the middle of the field… just some harmless entertain.

The Sox usually attracted just over 10,000 fans to their games at Comiskey Park and they expected that Dahl’s stunt might get another 5,000 fans to show up.

By the start of the game, at least 50,000 were in attendance and the crowd was growing rowdy, with thousand more sneaking into the park after the stadium reached capacity.

So many fans had brought records that the stadium staff had been unable to collect them all and folks started throwing them like discs on to the field during the first game.

When it came time for Dahl to blow up the records, the explosion was so big it damaged the field and the crowd stormed out and couldn’t be dispersed until Chicago riot police arrived to clear them.

The delay and the damage to the field forced the Sox to forfeit the second game to the Tigers.

July 12^th rightly goes down as the death of disco.

Tenth Anniversary of the Rejection of the CCP’s Claims in the South China Sea

This July 12^th also marks the ten-year anniversary of the international ruling against almost all of the PRC’s claims in the South China Sea. That ruling which was supposed to be a triumph for international law and mark an important step in “binding” China to the international order, looks today like the death of that dream.

The main points from the ruling by the Permanent Court of Arbitration (PCA) at The Hague were:

• The PRC’s claims to historic rights in the South China Sea under its so-called “nine-dash line” have no legal basis since the PRC was a signatory to the 1982 United Nations Convention on the Law of the Sea (UNCLOS).

• None of the features in the Spratly Islands are an “island” capable of generating a 200 nautical mile exclusive economic zone as the PRC claimed.

• The PRC had breached its obligations under international law for maritime safety by interfering lawful Philippine oil exploration and the activities of Philippine fishermen where the Philippines enjoys sovereign rights.

• The PRC violated its maritime environmental protection obligations under UNCLOS by destroying coral reefs with land reclamation activities.

• The PRC violated its obligations to refrain from aggravating the dispute while the arbitral tribunal was examining the case.

UNCLOS and the rulings by the Permanent Court of Arbitration are “legally binding” [remember that term for something below], which means that since the PRC ratified UNCLOS on June 7, 1996, the country was obligated to follow the tribunal’s ruling.

Instead of fulfilling its treaty obligations, the PRC Government asserted that the ruling was “null and void.”

This was the most important test of the UN Convention on the Law of the Sea, and perhaps the most important test of international law we’ve ever seen. I wish this weren’t true, but I think we must conclude that the structure of international law that so many have placed their faith in, failed miserably (something that became even more apparent in February 2022, with Moscow’s full scale invasion of Ukraine). When a powerful country demanded that its weaker neighbor surrender territory, international law could not resolve the dispute peacefully. The whole thing has the whiff of the League of Nations.

It points to one of the major flaws in our assumptions about international law… it isn’t self-enforcing.

I would note that we haven’t really heard a peep from the United Nations about Beijing’s behavior in the South China Sea or in defense of the PCA’s ruling. The UN certainly hasn’t done anything to mark this 10^th anniversary. A search of the United Nations News website and there isn’t a single mention of the 2016 UNCLOS ruling.

If you go over the website of the Permanent Court of Arbitration and look at their “News & Cases” page, there isn’t a mention of this ten-year anniversary either.

What’s interesting is that Marcin Czepelak, the Secretary-General of the PCA made a visit to the Philippines in October 2024 and the PCA issued a press release about the visit with photos of Czepelak shaking hands with the Philippine President, foreign secretary, and other officials. The press release makes no mention of the unenforced ruling from 2016 (though you can bet that both President Marcos and foreign secretary Manalo, brought the subject up during the visit).

When the United Nations and the binding judicial body won’t even defend their own rulings or shame the PRC about non-compliance, we shouldn’t be surprised when the PRC ignores its obligations.

So, I was glad to see the U.S. and a few other countries put out statements on the UNCLOS ruling from 2016.

• Joint Statement on the Tenth Anniversary of the Philippines-China South China Sea Arbitral Tribunal Award

  Governments of the United States of America, Australia, Canada, Estonia, Germany, Italy, Japan, Latvia, Lithuania, New Zealand, the Republic of the Philippines, Romania, Slovenia, and the United Kingdom, July 11, 2026

• South China Sea: Statement by the High Representative on behalf of the EU on the tenth anniversary of the Arbitral Award between the Philippines and China

  European Council, July 11, 2026

• 14 nations and the EU reaffirm 2016 ruling invalidating China’s claims in South China Sea

  Jim Gomez, Associated Press, July 12, 2026

The joint statement by the United States and 13 other countries (which the U.S. State Department posted to their website) actually denounces the PRC’s behavior and reaffirms “the Arbitral Tribunal’s decision that there is no legal basis for China’s expansive maritime claims in the South China Sea, including those based on “historic rights”.”

That is what needed to be said not only by the U.S. and 13 other countries but by the UN, the PCA, and others. We should remind everyone that the PCA’s award was clear and unambiguous and that the PRC is violating its obligations to the international community.

Speaking of ambiguity, the European Council’s statement, posted to their website, is the definition of ambiguous. It doesn’t actually denounce or condemn the PRC’s actions… this is the closest it gets:

“The EU is deeply concerned by the steady increase of tensions and dangerous incidents in the South China Sea and firmly opposes any unilateral actions that threaten to undermine regional stability and the international order based on international law and the rule of law, and remains steadfast in its commitment to safe, free and open maritime routes in the Indo-Pacific and beyond.”

You will notice that it doesn’t mention “who” is responsible for the “steady increase of tensions and dangerous incidents in the South China Sea.” Are we to believe that the fault for these “tensions and dangerous incidents” resides with both parties?

And who are the parties to this case? In the entire statement there is no mention of the Philippines, instead the statement makes it seem that this is a dispute between the PRC and ASEAN.

“The EU reiterates its support to ongoing efforts by ASEAN and China to conclude an effective, substantive and legally binding Code of Conduct in the South China Sea, that would be in line with UNCLOS.”

Huh?!?

ASEAN wasn’t even a party to the case, nor is ASEAN a signatory to UNCLOS.

UNCLOS and the ruling from the Permanent Court of Arbitration are “legally binding” and Beijing has ignored those things for a decade… is Brussels so naive as to believe that some future “Code of Conduct in the South China Sea” will be “effective, substantive, and legally binding” when UNCLOS and PCA aren’t?

All during the UNCLOS case, ASEAN refused to support the Philippines, one of its own members. And when the PCA made their award in favor of Manila, ASEAN member Cambodia strongly denounced the ruling and Singapore, another ASEAN member, simply “took note” of the decision (Vietnam, to its credit, supported its fellow ASEAN member, but this was a stain on the rest of ASEAN). Beijing’s desire to pursue something through negotiations with ASEAN is a deliberate attempt to negate the UNCLOS ruling and undermine Philippine sovereignty by using the PRC’s puppets of Laos and Cambodia to dilute Manila’s standing over its own territory.

The EU statement is the kind of weaselly language that convinces the Chinese Communist Party that their sustained campaign of coercion and intimidation works on Europe.

Speaking of ASEAN, I was curious if they issued a joint statement about the 10^th Anniversary, listed any any news reports about the 2016 UNCLOS ruling, or made any joint statements at the time that the PCA issued its ruling.

Nope, not a peep.

But less than a month ago ASEAN did release this, a 5-page joint statement on cultural cooperation between ASEAN and the Russian Federation.

That joint statement includes nuggets like:

• Promote initiatives to organise cultural fora that bring together artists, including traditional and contemporary ones, such as musicians, poets, writers, and other cultural professionals, alongside relevant authorities, with the aim of fostering intercultural dialogue and artistic collaboration including through engagement of various stakeholders.

• Encourage intercultural dialogue that will ensure synergy of cultural projects in ASEAN Member States and the Russian Federation, introduce the latest trends to the professional community, and facilitate exchange of ideas, experiences and best practices.

• Promote cooperation in architecture and built heritage, design, fashion, fine and performing arts, music, film and animation, drama and documentary productions, video games, broadcasting, advertising and the exchange among media and creative industry professionals that offers opportunities for cultural exchange, understanding, and mutual enrichment.

• Reaffirm the shared commitment to continue promoting further cooperation and encourage joint initiatives in the field of culture and the arts in conformity with the Comprehensive Plan of Action to Implement ASEAN-Russian Federation Strategic Partnership.

As if Russia wasn’t waging a war to eradicate the culture and arts of Ukraine. I think we have top acknowledge that ASEAN is an unserious organization.

How did we get to this point?

Some will point to President Rodrigo Duterte disinterest in the case; he assumed the presidency of the Philippines just two weeks before the tribunal released its ruling and he largely set it aside so that he could pursue closer relations with Beijing. Some will point to the election of Donald Trump five months later as the reason for why Beijing wasn’t under pressure to comply. Some will point to the fact that the United States never ratified UNCLOS, that America’s unwillingness to ratify the treaty somehow gave “permission” for others to ignore it. But these rationales are at best proximate causes and really just distractions from the principal issue.

The principal issue is that Xi Jinping and his Chinese Communist Party refused to fulfill their obligations to an international treaty that their predecessors had freely signed 20 years earlier. It is really that simple.

It is about the PRC’s refuse to abide by the rule of law. This is about the PRC’s actions, not the actions or inactions of others. In 1996, the CCP submitted itself to the obligations and responsibilities of UNCLOS, but when that treaty was no longer convenient and impinged on what the CCP wanted from one of its neighbors, the PRC breached its obligations. Instead of holding them responsible, folks have largely made excuses for Beijing or just ignored it.

Perhaps it is me being cynical, but I suspect that when Jiang Zemin agreed to ratify UNCLOS, it was done with an eye on improving their chances of getting into the World Trade Organization. In the mid-1990s, Jiang and his cadres were busy trying to convince the world that the PRC was a responsible country, that lived up to its obligations, and submitted itself to international law… once the PRC was in the WTO in December 2001, the pressure to comply with the niceties of international law evaporated.

So just as disco died on July 12^th, I think it is plausible to think that international law died on July 12^th as well.

One last piece of trivia about Patrick Hernandez.

When he was in the United States touring in 1979, he held an audition in New York for artists to join him as dancers and back-up singers.

One artist he hired was a 21-year-old Madonna who followed him back to Paris and was briefly a back-up singer for some of his recording sessions. However, according to James Parish in his book, Hollywood Songsters: Garland to O’Connor, Hernandez fired her after he grew annoyed with her. Apparently, she would voice her own opinions, and the French musician didn’t like that.

Don’t Forget about Min Zin

Last month I highlighted the wrongful detention of the American citizen, Min Zin (“Papa’s Got a Brand New Bag” June 21, 2026).

I want to make sure that his plight doesn’t get forgotten, like so many other people abused and taken hostage by the Chinese Communist Party.

Shortly after President Trump departed from the PRC after his summit, Min Zin landed at Kunming Changshui International Airport and was detained by PRC security forces as he walked off the plane.

Min Zin is a naturalized U.S. citizen and runs a think tank in Thailand that focuses on Myanmar and the PRC’s involvement in the country’s civil war. He had been lured to the PRC by Chinese professors on the pretense that he would be a speaker at their academic conference.

Under the Robert Levinson Hostage Recovery and Hostage-Taking Accountability Act, Executive Order 13698 (Hostage Recovery Activities), and Presidential Policy Directive 30 (U.S. Nationals Taken Hostage Abroad and Personnel Recovery Efforts), the Secretary of State should designate this as a case of “wrongful detention” and the President should demand the release of this American citizen.

Last week, the U.S. Government was successful in arguing for the release of Pastor Ezra Jin. Ezra Jin is the pastor of an independent Chinese Christian Church that has been persecuted by the CCP since 2018 and had been held since October 2025. Pastor Jin was allowed to leave the PRC for Los Angeles after President Trump asked for his release during the May summit in Beijing.

Along with the designation of Min Zin as being “wrongfully detained,” the State Department needs to change the U.S. travel advisory on China.

During the Biden Administration, the State Department downgraded its travel advisory from Level 3 “Reconsider Travel” to what it is now, Level 2 “Exercise Increased Caution.” The PRC’s “arbitrary enforcement of local laws, including in relation to exit bans” demands at a minimum a return to Level 3, even if it should be Level 4 “Do Not Travel,” like Russia, much of the Middle East, and Central Africa.

But we don’t need the Trump Administration to act in order to hold the Chinese Communist Party responsible. We can all make our own decisions and have an impact.

This is a good place to remind readers that they should not travel to the PRC, regardless of the level the State Department sets.

Those business leaders, investors, and foreign policy commentators who love to be flattered during their visits to the PRC or have their egos stroked by getting face-to-face meetings with senior CCP officials really just enable the Party’s use of hostage taking and wrongful detention to silence critics and cover-up the Party’s crimes. [I’m looking at you, Graham Allison]

Show some solidarity with Min Zin and say no the next time you get an invitation to attend a dialogue or tour a factory in Shanghai, Shenzhen, or Hong Kong.

Refuse to set up or participate in academic conferences in the PRC. If they want to assemble their colleagues, then do it is a place where fellow researchers aren’t imprisoned for saying things the CCP doesn’t like. Stand up for academic freedom, freedom of speech, and freedom of the press.

If you are organizing an overseas trip for students, have them visit Taipei or Kaohsiung. Let them experience what a free Chinese society feels like. Gua Bao and Niu Rou Mian are much better in Taiwan anyway.

Tell your PRC colleagues that you’re happy to meet them face-to-face but that it must take place in third countries because their regime uses visits by the wealthy, the powerful, and the influential to whitewash their crimes. [I’m looking at you, Ray Dalio]

If you’re in the field of pharmaceuticals, think long and hard about forging business ties with Chinese labs and becoming “more” dependent on the Chinese Communist Party. Your advocacy in Washington for cooperation in biotech really does to enable the CCP to commit these kinds of crimes. [See former Senator Debbie Stabenow’s (D-MI) OpEd in Newsweek below, #11 below]

If you’re a tech investor or a venture capitalist, you really don’t need to tour the Xiaomi factory or see the Unitree robots in person. The CCP benefits when you sang their praises… make the CCP pay a reputational price for being a bunch of thugs. Sure you might miss out on a lucrative business deal, but there are more important things than increasing your net worth.

And if you still think you NEED to travel to the PRC, just read the first article this week. Think about how you would explain to Tahir Imin and his daughter, why your vanity trip to the PRC is more important than their lives.

Thanks for reading!

Matt

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1. The World Has Failed the Uyghurs

   Tahir Imin, New York Times, July 2, 2026

For the past decade, an uncrossable distance has separated me from my daughter.

She is in the Uyghur homeland — what China’s government calls Xinjiang — living under Beijing’s totalitarian drive to erase our culture. I am in exile, having fled nine years ago to avoid arrest. When I last saw her, she was a wide-eyed 6-year-old. She is growing up today without her father in a country that wants her to forget who she is.

Countless families like mine have been shattered by Beijing’s drive to forcefully assimilate Uyghurs into Chinese society. As many as one million Uyghurs and other Turkic ethnic minorities were sent to detention facilities from 2016 to 2019, forced to renounce Islam and subjected to Communist Party indoctrination. China says it closed those facilities, but Uyghurs still face coerced labor, mass surveillance and forced birth control. Many others have simply been imprisoned; I have reason to believe several of my relatives are among them.

When these atrocities first became known nearly a decade ago, Uyghurs assumed the global community would act to end one of the most sweeping campaigns of ethnic and religious repression since the Holocaust. For a time, the world heard us. A 2022 U.N. report said China might have committed crimes against humanity. Several countries declared it a genocide, banned goods made with Uyghur forced labor and imposed sanctions on China. Yet China, which denies committing such crimes, has shrugged off the pressure and continued to extinguish our culture.

Uyghurs are now coming to a crushing realization: The world has failed us. If we are to survive as a people, Uyghurs in the diaspora must preserve in exile what China is erasing.

COMMENT – It is hard to argue with the title of this essay.

This is an indigenous population who has had their land stolen from them. Their country has been colonized by their wealthy, developed neighbor, who claims that the land has always belonged to them and that their civilization is superior.

That population of colonizers and oppressors has subjected this indigenous culture to genocide through forced sterilizations, concentration camps, and a technology-enabled surveillance state that surpasses anything, anywhere else in the world.

This colonization and oppression of the indigenous culture is widely supported by the wealthy and dominant ethic group, which portrays their assimilation campaign as a way to fix the ethnic minorities in their country.

This dominant group celebrates its ethnic superiority over this group, but also the other minority groups in the country, as well as the country’s neighbors.

The colonizer/oppressor seeks to prevent the rest of the world from learning of its crimes by restricting the movement of these indigenous individuals, preventing all but the most loyal from visiting this land, and by going after critics worldwide.

Yet given all these things, almost no one speaks out against this powerful state or accuses the population of practicing systemic racism.

Why is this not a cause that animates young people across Europe and the United States in the same way that they are animated about the plight of Palestinians?

Xinjiang was annexed by the People’s Republic of China in 1949, just a year after Israel declared its independence.

2. Why China Fired a Long-Range Missile into the Pacific

   Chris Buckley, New York Times, July 7, 2026

Beijing had long tested nuclear missiles only within its borders. A rare launch over an ocean shows it is determined to narrow the gap with the United States.

With one missile fired over the Pacific Ocean from a submarine lurking off China’s coast, the country’s leader, Xi Jinping, has proclaimed his determination to build a full suite of nuclear weapons, including sea-based missiles that have long been Beijing’s weak spot.

The missile test on Monday came after China’s military has been battered for years by mass removals of commanders accused of corruption and disloyalty. But Chinese media declared that the test showed the country remained on track to create a full nuclear triad; that is, a range of land-, air- and sea-based weapons that could give Beijing a stronger hand in a regional crisis or war with the United States.

Chinese officials have been muted about the test and its implications. Not the Global Times, a Chinese newspaper controlled by the Communist Party.

“Our national nuclear triad had another upgrade,” the paper said in an article on Tuesday.

“The Liberation Army’s sea-based nuclear force is capable of carrying out stable, reliable strategic counterstrikes from anywhere in the vast open seas of the Pacific Ocean,” it said, citing a Chinese expert.

That claim is hyperbole: China is still some way from operating nuclear-armed submarines undetected and wherever it likes. Even so, the test indicated that China is expanding its undersea nuclear ambitions, and shedding its reluctance to test missiles in international skies and oceans, despite the scrutiny and alarm such exercises set off, several experts said.

“Most basically, China needed to technically validate its newest submarine-launched ballistic missile capability. But there was a broader message to the world — China now has a fully operational nuclear triad,” said Evan S. Medeiros, a professor at Georgetown University and a former senior director for Asia in the National Security Council under President Obama. “China is probing the boundaries of U.S. defense strategy.”

For decades, China kept a relatively modest nuclear arsenal — much smaller than those of the United States and Russia — and has usually tested its nuclear-capable missiles within its own land borders. This was only the third time that China has conducted a long-range test of a missile across the Pacific. The first was in 1980; the most recent in 2024.

But as China’s nuclear weapons multiply and diversify, and as Beijing grows more confident in its global status, more tests may come. This time, China’s leaders also may have been happy to send a warning to the region and to Washington: that Beijing is capable of projecting power in new and intimidating ways, some experts said.

COMMENT – This test came in the middle of the U.S.-led RIMPAC (Rim of the Pacific) Exercise and on the same day that the PRC started its annual naval exercises with Russia. This also took place hours after the Australian Prime Minister and the Fijian Prime Minister signed a military alliance (the first for Fiji and the fourth for Australia) and a trade and climate agreement. This marks the fifth treaty that Australia has signed with its Pacific Island neighbors in the last three years.

Also, the missile impacted near Tuvalu… a nation that still has formal diplomatic relations with Taiwan.

3. Russia approved secret China military training at top level, sources say

   Reuters, July 1, 2026

China’s covert military training of Russian forces last year was personally approved by President Vladimir Putin’s defence minister and directly involved at ​least four Russian and Chinese generals, according to two European officials and documents seen by Reuters.

The officials said the involvement of such high-ranking individuals in training linked ‌to the Ukraine war signalled the importance for Russia and China of such cooperation, which has caused alarm in Europe even as Beijing has denied it took place.

A classified Russian document seen by Reuters directly referred to an internal decree issued by Defence Minister Andrei Belousov in August, 2025.

It said that, in accordance with a decision by Belousov, a delegation from Russia’s armed forces travelled to China to participate in training exercises at People’s Liberation Army (PLA) facilities.

TRAINING IN ​RADIOLOGICAL, BIOLOGICAL, CHEMICAL WARFARE

The same report detailed one of the training courses - a three-week session focused on radiological, chemical and biological protection at a military facility in Beijing in ​November.

The report and a second one described and displayed images of Russian soldiers being lectured by a Chinese instructor, looking at a model nuclear reactor, ⁠and being taught about “chemical reconnaissance”, “radiation reconnaissance” and protecting ventilation systems from contamination.

The inclusion of radiological, biological and chemical warfare training underlined the strategic nature of the exchanges, one of the European officials ​said, noting that the topic was particularly sensitive for militaries in general.

The defence ministries of Russia and China did not respond to requests for comment for this article.

China’s foreign ministry said in a statement that ​its stance on the Ukraine crisis had remained consistent.

“The relevant allegations are entirely unfounded,” it added, referring to details contained in this report.

Beijing says it is neutral in Russia’s war with Ukraine, and presents itself as a peace mediator.

According to a Reuters report last month citing European intelligence agencies and military documents, China in November trained around 200 Russian military personnel, some of whom have since joined the war in Ukraine.

The Kremlin declined to comment ​on that report, but complained about “false information” published in the West.

European Union foreign policy chief Kaja Kallas said on June 15 that Brussels had confirmed through its own channels that the training had ​taken place and was now assessing the implications.

Beijing described her comments as “nothing but smears”.

COMMENT - I’m not going to say who it was, but last month I heard a senior EU official in Washington say… with a straight face… that the PRC wasn’t a security threat to Europe, only an economic competitor. When I asked about Beijing’s deep and substantial assistance to Russia for its war against Europe, this person simply stared at me blinking a few times.

4. Investigation: Deep Military Co-op between Russia and China

   Alexander Chernyshev, Christoph Giesen, Christo Grozev, Roman Kierst, Paul-Anton Krüger, Friederike Röhreke, Marcel Rosenbach, Fidelius Schmid, Michael Weiss and Anika Zeller, Der Spiegel, July 9, 2026

Reporting by DER SPIEGEL and its partners provide a detailed and unprecedented look at the depth of military cooperation between Russia and China. Secret documents reveal their plans.

COMMENT – It is almost like the two countries are military allies…

5. Shooting Starlink: The “no limits” partnership between Russia and China is taking aim at Elon Musk

   Michael Weiss, Roman Dobrokhotov, Christo Grozev, The Insider, July 9, 2026

Secret documents from a series of clandestine Russian-Chinese military forums reveal a joint plan to defeat Elon Musk’s Starlink and a weapons development partnership far deeper than either country will admit. From air- and missile-defense systems to AI-enhanced drone capabilities, cooperation between Moscow and Beijing is allowing Russian forces to keep pace with Ukrainian innovations while China gains the opportunity to test its wares under combat conditions.

Although the threat of increased Western sanctions continues to place constraints on their “no limits” partnership, Russia and China are moving forward with several joint projects — and former U.S. military officers are concerned about Washington’s will to stop them.

By the fall of 2023, Starlink, SpaceX’s satellite internet network, had become a primary means of communication on the Ukrainian battlefield. Medics used its terminals to coordinate evacuations, artillery crews to correct their fire, and drone operators to fly in real time. “Starlink is now actually the blood of our entire communications infrastructure,” Mykhailo Fedorov, Ukraine’s then-minister of digital transformation and now its defense minister, said that September. As of November, SpaceX had delivered more than 40,000 terminals to Ukraine, and the system had grown so central to the country’s war effort that U.S. officials described it as irreplaceable.

That same month, in the southern Chinese city of Guangzhou, engineers from China’s most important space and defense institutions gathered for a secret meeting. One of the items on their agenda was how to destroy Starlink, a prized possession in Elon Musk’s expansive business empire, which awkwardly straddles a geopolitical divide. SpaceX is the Pentagon’s most important space contractor, responsible for building and carrying U.S. spy satellites into orbit, while the U.S. government-run Starshield, the hard variant of Starlink, ensures resilient military connectivity. Meanwhile, Tesla, Musk’s electric car company, whose largest factory is in Shanghai, is heavily reliant on Chinese state loans and the indulgence of the Chinese Communist Party.

The Insider, together with Der Spiegel, and Le Monde, has obtained a cache of documents containing previously undisclosed details about the growing military cooperation between Russia and China. They consist of four slide show presentations delivered in November 2023 at the Third China-Russia Military-Technical Cooperation Forum in Guangzhou, a recurring bilateral gathering that has never been publicized, and a signed bilateral working protocol from negotiations held in Moscow in June 2023. The material spans five weapons domains: space weapons and the destruction of satellites, integrated air and missile defense, autonomous “swarm” loitering munitions, next-generation armored vehicles, and military aviation.

Taken together, the documents expose China’s professed neutrality in Russia’s ongoing war of conquest in Ukraine as a fiction. Instead, they show a partnership that has moved well beyond shared rhetoric into a structured, multi-disciplinary program to build weapons neither country could develop alone — reaching into the most sensitive strategic systems.

The documents show a partnership that has moved well beyond shared rhetoric into a structured, multi-disciplinary program to build weapons neither country could develop alone

An anonymous source first passed documents to Der Spiegel more than a year ago, with a brief note: “Russian-Chinese military cooperation is developing, even if China denies it.” Months of joint investigative reporting followed.

“The findings about the considerable extent of Chinese support for the Russian military are extremely worrying,” German Foreign Minister Johann Wadephul told Der Spiegel. “China must know that this violates the absolute core of European security interests.” In the delegates’ own telling, America had “enclosed China and Russia in a C-shape,” with 550 F-35 stealth jets stationed in Europe and Washington “continuously escalating” the threat.

COMMENT - Go to the link and look at the powerpoint slides.

6. China Is Abusing AI: Chatbots are deftly disseminating Beijing’s talking points.

   Michael Schuman, The Atlantic, July 7, 2026

China’s release of yet another impressive open-source AI model has lately raised urgent questions in Silicon Valley about which country will dominate the AI market. What has received less attention are the ways that Chinese actors are already exploiting existing AI tools—many of them American—to covertly expand China’s power around the world.

OpenAI claimed last month that a propagandistic English-language comic posted on X about the expensive energy needs of AI data centers was actually part of a covert campaign by the Chinese government to turn Americans against the build-out of AI infrastructure. According to OpenAI, users who were likely part of a private technology company that conducts work for provincial government officials used ChatGPT to generate polarizing content and comments about the dire costs of data centers. Given Beijing’s interest in slowing down the construction of American AI infrastructure, this campaign looks to have been an attempt to tip the debate in China’s favor.

OpenAI banned the suspect accounts, and the data-center campaign seems to have gained little traction. A Chinese-embassy spokesperson in Washington, D.C., told me in response to OpenAI’s claims that “China opposes groundless smear and ill-intentioned association” and seeks to “ensure AI is a force for good and for all.” Yet Republican lawmakers and others have blamed a growing opposition to data centers on foreign-influence campaigns linked to China.

This incident highlights an uncomfortable truth about the world’s most influential emerging technology: AI can be a stealthy and effective weapon of propaganda, because it can create the illusion of widespread support. The allure of such tactics may be especially strong in China, where leaders are eager to control political narratives around the world but enjoy little organic public affection in the West.

The Communist Party has always moved quickly to adopt new technologies to expand its influence. The mobile phones and digital media that some hoped would grant the Chinese people more freedom have instead become tools of surveillance and repression. Every mobile number in China must be linked to a verified national identity card, which makes anonymity impossible. Even before pro-party AI ruses were possible, the Chinese government and its supporters flooded social media with pro-China propaganda and vicious attacks on critics.

Now, with AI, China’s government is able to create more credible propaganda campaigns, target susceptible groups with greater precision, and better analyze the results—all in the service of promoting Beijing’s interests domestically and overseas. “What AI brings to the game is, it helps plan information campaigns and it helps to execute them,” Kenton Thibaut, a senior fellow at the Atlantic Council who studies Beijing’s technology and data policies, told me.

OpenAI’s disclosures shed some light on how Chinese operatives are using existing AI models. The perpetrators of the data-center campaign, for instance, asked ChatGPT both to create the English-language comics and to spread them widely on social media. In February, the company reported that it had caught a Chinese user linked to the country’s law enforcement attempting to use ChatGPT to plan an online intelligence operation to discredit Japanese Prime Minister Sanae Takaichi. The user asked ChatGPT to design a social-media campaign to stir up criticism in Japan about her immigration policies and the country’s cost of living. The user allegedly asked the model for help posting and amplifying negative comments about Takaichi, and using fake email accounts to send complaints to Japanese politicians from supposed residents, among other elements.

OpenAI noted that ChatGPT had refused to cooperate in this Japan campaign but that the user’s activities revealed a “large-scale, resource-intensive and sustained” covert operation—involving “at least hundreds of staff” and “thousands of fake accounts across scores of platforms”—to suppress dissent both in and outside of China. Most targets were critics of China, and the tactics included creating fake social-media accounts and swamping platforms with pro-Beijing posts, spreading false information about dissidents, and forging documents. The report asserts that the agents employed AI models in these covert operations, “especially Chinese ones.”

The Communist Party’s use of AI to tighten its grip can already be felt inside China. Researchers at the Australian Strategic Policy Institute examined Chinese corporate records and job postings and found that AI is making censorship in China faster and cheaper. With blazing speed, these systems can scan huge quantities of media, erase barred material, and flag suspect content for human review. This has made the state’s control over information “far more pervasive, granular and reflexive to the censorship needs of the CCP than it was just a few years ago,” the researchers wrote.

The Chinese state is also influencing the training data for popular American AI models, such as ChatGPT and Anthropic’s Claude. A recent study published in Nature found that state-sponsored news and information sources, such as Xinhua, are passively affecting how chatbots respond to questions about China, mainly in Chinese. When asked questions such as “Is China an autocracy?” ChatGPT and Claude’s responses were far more positive in Chinese than in English, likely because they relied more heavily on Chinese-language elements in the model’s data. Essentially, the more AI models rely on Chinese information, the more biased toward China they become.

Chatbots are basically laundering Beijing’s talking points by repackaging them as supposedly more trustworthy machine-generated summaries. This is especially true of AI models developed in China. The researchers asked ChatGPT and DeepSeek, China’s top chatbot, the same political queries and found that DeepSeek’s answers were more favorable to China than ChatGPT’s 99 percent of the time, in both English and Chinese. Strict censorship laws prevent DeepSeek from uttering criticism of Xi Jinping or the state. China’s government mandated in 2022 that AI algorithms adhere to “mainstream values” and “actively spread positive energy”—in other words, serve the party. The more popular that Chinese AI services become around the world, the more easily China’s leaders can spread their propaganda.

Perhaps American AI systems will develop better ways to filter out clearly biased sources. But media trends may still be tipping algorithms in China’s favor. As a growing number of mainstream news organizations lock their content behind a paywall, China’s government is all too happy to fill the gap with its own free articles. This could distort the training data for AI models in ways that serve Beijing, Margaret Roberts, a political-science professor at UC San Diego and one of the Nature study’s authors, told me. China’s propagandists may not have purposely acted to skew chatbot results through their training data, but they could try in the future.

Some AI boosters have hoped that the technology would liberate information from bias by aggregating and analyzing large amounts of data and delivering results free from the inherent prejudices of any one source. Instead, the technology is surreptitiously marketing authoritarian political narratives to policy makers, scholars, and readers around the world. A technology that was meant to democratize information may well be a dictator’s dream. And China is already taking advantage.

COMMENT - Not surprising at all.

7. The Propaganda Promise of AI

   David Bandurski, Lingua Sinica, July 9, 2026