What struck me was how he described the experience.

Learning Chinese, he said, is a deeply physical process, laying things down inside your body and your brain. Slow and incremental, but profoundly satisfying when things start to click.

And when characters begin to unlock, when you can suddenly decode a term in a Chinese political science text and realize you understand it more deeply, because you know the characters behind it, that is a remarkable feeling.

My guest was focused on HSK materials. These can work well to help build foundations. But they tend to have limited connection with real life and how people actually speak in China today.

Which brings me to something I want to share with you today.

For the last four years, Andrew Methven has been writing the Phrase of the Week for The China Project and then Sinica. Every week he takes real language from Chinese news and makes it accessible to people who want to understand China more deeply.

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It’s just the best resource I know for learning Mandarin in context: you not only learn new vocab, but get a deeply-informed guide to how it’s used in real life. Great way to keep up on usages, and keep your finger on the pulse of modern China.

And now Andrew has created something new — a course designed to help beginners.

It’s called Interactive Mandarin for Beginners.

It’s a fully interactive 12-week program that teaches you characters, vocabulary, grammar, reading, listening, and speaking — all together, all through real Chinese news stories.

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In recent years, China’s rise has been one of the most important aspects of geopolitics. From various vantage points, observers have framed China as a more benign alternative to Western-style imperialism, or as a disruptive challenger to the post-World War II order, or as a hypocrite disguising its ambitions as benevolence, or as a clear-eyed practitioner of realpolitik, contrasting American moral paternalism. That list is neither nuanced nor exhaustive, of course, but in each case we see an acknowledgment that China is a dominant regional power and, at the very least, an important global player.

And as often as we use the phrase “China’s rise,” we don’t often make clear just what it is rising from. It’s a fool’s errand to find one single moment that represents China’s nadir in terms of global influence, but I’ll play the fool for this exercise and suggest April 17, 1895. On that day, events were underway that would see China reduced to a minor player in world affairs, and a subordinate power even in its own backyard. The Treaty of Shimonoseki would end the first Sino-Japanese War decisively in Japan’s favor, leaving the Qing empire defeated and dismembered.

The war had begun in the summer of 1894. Then, it was Japan, not China, that was the rising global power, seeking hegemony in East Asia and respect abroad. Japan’s quest for resources and strategic positioning collided in the Korean peninsula with Qing China’s claims to regional dominance. Both sides used disingenuous claims that they were supporting Korean autonomy — neither side was in truth interested in Korea serving as anything other than a vassal state or colony — to intervene on behalf of their proxies. Fighting took place first on the Korean peninsula and surrounding waters, and the Japanese advance was steady. Naval defeats all but destroyed the Qing Beiyang Fleet early in the war, and Japanese forces invaded China, advancing down the Liaodong peninsula. Port Arthur fell in November, 1894. Ten weeks later, Japanese marines captured the northern Shandong port of Weihaiwei and destroyed what was left of the Qing fleet in port, “ending Chinese naval power,” as historian Sarah Paine wrote, “for more than a century.”

On a map of the region, China’s predicament at this point is obvious. Port Arthur, on the north, and Weihaiwei, on the south, controlled the entry to the Bohai Sea and, therefore, the approaches to Beijing. The Qing court was left with little choice but to sue for peace.

On March 19, the Qing delegation arrived in Shimonoseki, at the southernmost tip of Japan’s main island of Honshu. Comprising some 100 bureaucrats and diplomats, the Chinese side was led by Li Hongzhang, one of the empire’s preeminent statesmen who had been in the halls of power for decades after his central role in winning the Taiping Civil War for the Qing. He was, both literally and figuratively, a towering figure, standing six feet tall (exceptional for the time), his height accentuated by the flowing traditional robes he wore. Li’s reputation for loyalty, integrity, and honesty matched his dignified demeanor, commanding respect from all around him.

Meanwhile his counterpart, Itō Hirobumi, cut a very different figure. He stood nearly a foot shorter than Li, short even by the standards of the day. His clothes were also a stark contrast, wearing a western-style military that was festooned with medals. “Chronically insecure,” writes historian Paine in her definitive history of the Sino-Japanese War, “he craved praise to his face and decorations on his chest.” Itō was also known to be disrespectful to subordinates and was late to cabinet meetings because he lingered at a geisha house.

But the two men’s personal integrity belied their positions as they began negotiations in the Shuntarō guesthouse. The hotel itself was familiar to Itō as it was his visit in 1888 that had made it the first place to legally serve Fugu, the pufferfish that can be fatal to eat if not prepared correctly. Itō had arrived there, as the hotel now tells it, during a storm that had left the fleet unable to fish. With nothing else on hand, the chef had been forced to serve Fugu, which although illegal had long been a local delicacy. After its chef demonstrated his ability to prepare the delicacy, Shuntarō became the first place in Japan licensed to offer the risky meal. (The original structure was destroyed in the second world war, but the rebuilt hotel still bears the same name and is open for business!). Whether they ate Fugu or not, the delegations began their negotiations in late March. They were conducted, it’s worth noting, entirely in English — Li speaking through an interpreter, while Itō spoke English fluently.

But in any language, Li had little leverage. The Qing forces had been all but annihilated and Japan’s navy was unchallenged in Chinese waters. Nothing stood in the way should Japan decide to take the capital, Beijing. Li’s only hope was to convince western powers to intervene on China’s behalf, a hope built on the proposition that the colonial powers would be loath to see Japan ascendant to the point that it could challenge their own ambitions in the region. As the talks went on, it became clear that Japan would press its advantage.

Ironically, Li’s position was improved in a turn of events that nearly took his life. As Li returned to his accommodations after the fifth day of negotiations, a would-be assassin shot him in the face at close range. Miraculously, the shot did not kill the Qing diplomat, but lodged in his face. As Paine describes it, “Li decided not to have the bullet removed. He preferred to get on with negotiations.

The bullet remained lodged deep under Li’s nose, a souvenir from his first trip abroad and a continuing source of discomfort.”

The Japanese were deeply embarrassed at their inability to keep a foreign diplomat safe on their own territory. Ultranationalists, like the one who had shot Li, had been a recurring problem for Japanese leaders: a Japanese policeman had scarred the future Tsar Nicholas with a sabre while the heir was on a goodwill tour in Japan four years earlier — and the attack on Li tempered the Japanese demands.

More modest they may have been, but the Japanese peace terms were humiliating for Qing China. In just a few clauses, China’s dominance in East Asia was erased and the Qing state flipped from colonizer to colony: Korea’s tributary relationship to China was terminated. The Liaodong peninsula, the Pescadores Islands, and Taiwan were all ceded to Japan, along with a substantial war indemnity. Chinese ports, on the coast and up its rivers, were opened to Japanese ports, and economic interests were conceded.

Barely had the ink on the treaty dried, though, when the European powers who had refused to intervene on the behalf of the Chinese found themselves uncomfortable with the new circumstances. Realizing that Japan was now a mainland Asian power, Russia, France, and Germany through a so-called “Triple Intervention” compelled Japan to give back the Liaodong peninsula in exchange for a greater indemnity.

The intervention was a mixed blessing for the Qing. It did preserve the territorial integrity of the empire (at least on the mainland) but the fact that the European powers were able to protect Chinese interests when the Chinese themselves were not illustrated the empire’s weakness. And the retrocession of the Liaodong peninsula provoked outrage in Japan, especially after the peninsula was leased to Russia. Ten years later, Russia and Japan would be at war with one another over Chinese territory.

Even mitigated by the Triple Intervention, the impact of the Treaty of Shimonoseki was enormous. Now China was clearly a second-rate regional power, far from the global actor it had been and even pretended to be just decades earlier. And the precedent that was established by Japan’s territorial acquisitions — even with the return of Liaodong, Japan acquired Taiwan and the Pescadores, as well as economic interests on the mainland — opened the door for other imperial powers. The insidious “most favored nation” clause in the treaty regime that began in the 19th century meant that every country with imperial ambitions toward China could bring with them the expectation that they too could claim pieces of the Qing empire. A scramble for concessions that would see pieces of China given to France, Britain, the United States, Germany, Russia, and others was underway.

Once commanding tribute and respect from its neighbors, China was now at the mercy of its much smaller neighbor, which was prying apart the Qing empire. Japan’s presence in China would increase steadily through 1945. It’s no exaggeration to point to Shimonoseki as a crucial inflection point in the relationship of Taiwan to the mainland, which today sits as the central tension between China and the United States.

• GDP grew 5.0% y/y in Q1, faster than Q4’s 4.5% growth, and at the upper range of Beijing’s annual growth target of 4.5-5%.

So China’s economy has shrugged off the Iran war and entered 2026 in good shape, right?

• Not so fast.

Despite the punchy headline growth rate, economic momentum was clearly fading as Q1 drew to a close.

• The war’s full impact – on supply chains, export demand, and input costs – is only partially reflected in the Q1 data.

• March’s data – which better reflects the war’s impacts – slowed across the board as the fallout from supply chain disruptions began to bite.

• This means the direction of travel heading into Q2 is noticeably weaker than the quarterly average indicates.

There are two major headwinds I want to discuss.

The first is consumption.

• Retail sales of consumer goods grew just 1.7% y/y in March, down from the already sluggish 2.8% in January-February.

Real household incomes, meanwhile, only grew 4.0% y/y across Q1, extending a multi-year slowdown.

• In the three years before COVID, disposable income grew at an average annual rate of 6.5%.

• By 2023, it had slipped to 6.1%, then to 5.1% in 2024, and then to 5.0% in 2025.

• Q1 2026 data suggests growth will decline again this year.

And the property slump continues to erode household wealth.

• Second-hand home prices fell 0.24% m/m in March, and are now down almost 25% from their 2021 peak.

The combination of slowing income growth and collapsing property values has made consumers deeply reluctant to spend.

• The household savings rate hit 37.8% in Q1, the highest level on record outside the pandemic.

Against this already fragile backdrop, the Iran war has delivered an energy price shock that could not have come at a worse time.

• Consumer transport fuel costs rose 10% m/m in March.

• Meanwhile, as I discussed a couple of weeks ago, producer prices unexpectedly turned positive in March.

The upshot: As higher costs work their way through supply chains, they will further erode real household incomes and squeeze already-limited discretionary spending.

The second major headwind is a sharp slowdown in export growth – the engine that China’s economy has relied on to offset weak domestic demand.

• Exports grew a meek 2.5% y/y in March, while the trade surplus shrank to USD 51.1 billion, the lowest monthly reading in four years.

And things could get a whole lot worse.

• The countries driving China’s export diversification push – across Southeast Asia, South Asia, and Africa – are precisely the ones being hit hardest by the global energy shock.

• These are heavily import-dependent economies, where higher oil prices rapidly feed through to broader inflation, hammering household purchasing power.

• Consumers across these markets are cutting discretionary spending and prioritizing essentials – a dynamic that will further weigh on Chinese exports in the coming months.

So what should we take from all this?

China’s strong Q1 GDP print may give policymakers a bit of breathing room – but not much.

• The Iran war has scrambled what was supposed to be an orderly exit from deflation.

• The emerging economies that China has spent two years cultivating as export alternatives to the US are now grappling with their own energy crises.

This means China’s export engine, the economy’s most reliable growth driver, faces headwinds from both the supply and demand sides.

Beijing needs to engineer a boost in domestic demand – but that won’t happen as long as income growth and the real estate market remain in the doldrums.

• We can rule out a push to reinflate property prices – as Beijing has clearly signaled that’s not in the cards.

• That leaves deep, structural reform of China’s social safety net and income distribution system as the only credible option – something Beijing has been reluctant to pursue at scale.

The big question: Will the mounting, unexpected headwinds to external demand compel Beijing to rethink its cautious fiscal stance?

Next stop: The upcoming April Politburo economic meeting could give us a read on whether that calculus is changing.

• If officials indicate willingness to go beyond incremental measures – and pursue the kind of household-focused structural support that could actually move the needle on consumption – Q2 could surprise to the upside.

• But if they stick to the familiar playbook, things are likely to get worse before they get better.

Get in touch to discuss how we can help you track policy signals and economic developments – and explain what they mean for your business.

Joe Peissel, Senior Macroeconomic Analyst, Trivium China

What you missed

US-China

With three weeks to go, we’re gaining clarity on potential deliverables for US President Donald Trump’s China visit on May 14-15.

• On Wednesday, US Trade Representative Jamieson Greer offered some color on what Washington wants out of the visit: “We’re…looking to get a commitment from the Chinese overall with respect to all agriculture.”

• Plane purchases may also be on the table: According to industry sources, Boeing has been in discussions to sell more than 500 planes to China.

On Wednesday, Reuters reported that Micron Technology has been a driving force behind the proposed MATCH Act, which would tighten US export controls on chipmaking tools used by Chinese memory rivals.

• The bill – already advanced by the House Foreign Affairs Committee – would target fabs run by Chinese memory makers like CXMT and YMTC.

• If enacted, the bill could crimp the expansion of Chinese players, and tilt the market further toward Micron and other foreign companies.

Econ and finance

The Iran war is causing havoc for China’s trade with the Persian Gulf. Per trade data released by the customs bureau (GAC) last week:

• Imports of crude petroleum from the Persian Gulf – which accounted for 42% of China’s total crude imports last year – collapsed 34% y/y in March.

• Imports of liquefied petroleum gas fell 41% y/y.

China’s Financial Law draft has raised industry concerns that it could give regulators unchecked power.

• The law is intended to be China’s first overarching legal framework governing all “financial activities,” codifying baseline obligations for market participants and enforcement principles for regulators.

• The draft authorizes financial regulators to apply quasi-judicial measures – from seizure and freezing orders to exit bans – but doesn’t clarify the procedures governing their use.

• Several experts, including a former central bank (PBoC) official, warned that the lack of constraints on regulators could leave those powers vulnerable to abuse.

Business environment

On Tuesday, the State Council issued guidelines on expanding and upgrading the services sector, setting a goal for total services output to exceed RMB 100 trillion by 2030.

• The guidelines identify priority subsectors for policy support, including R&D design, IP services, logistics and warehousing, software and IT, data and information services, finance, retail, tourism, elderly care, and healthcare.

• The policy also reiterates expanded foreign market access in value-added telecom, biotechnology, and wholly foreign-owned hospitals.

On Tuesday, CCTV exposed how local governments are using excessive subsidies and “policy depressions” to compete for investment projects, highlighting failed EV ventures in Yichun, Jiangxi province, and Nanning, Guangxi province.

• Both cities poured billions into Nezha EV’s parent company, Hozon New Energy.

• The company accumulated RMB 18.3 billion in losses from 2021 to 2023, losing over RMB 80,000 per vehicle sold.

• CCTV framed this as symptomatic of “involutionary” race-to-the-bottom competition, in which local governments circumvent fair competition rules through creative workarounds.

Tech

On April 17, China’s commerce ministry (MofCom) submitted substantial comments to the European Commission, warning of retaliation if the EU moves forward with cybersecurity regulations that exclude Chinese tech products from EU markets.

• The updated Cybersecurity Act would expand Brussels’ ability to restrict EU market access for countries that pose cybersecurity concerns and “high-risk” companies.

• MofCom warned: “If the EU designates China as a ‘country posing cybersecurity concerns’ or lists Chinese entities as ‘high risk suppliers’ [or excludes] Chinese products and services from the EU market, China can launch relevant investigations into the EU or EU businesses, and take reciprocal measures.”

On April 17, the Supreme People’s Court (SPC) released a five-year plan to improve legal proceedings related to intellectual property disputes.

• The document’s number one priority is strengthening protections for innovators to “serve high-level scientific and technological self-reliance.”

• The plan specifically calls to focus on areas such as semiconductor design and computer software.

• Courts were also directed to develop novel doctrines for emerging tech where existing IP frameworks don’t map cleanly, which would include things like AI-generated content ownership, training data rights, and gene sequence patentability.

Net zero

On Thursday, the Party Central Committee and State Council general offices issued sweeping new measures to evaluate provincial progress toward China’s decarbonization targets.

• Provincial governments will be held directly responsible for helping meet China’s official 2030 climate targets.

• Provinces will be graded across 14 KPIs tailored to local conditions, including five “control indicators” covering emissions and energy intensity reduction, fossil fuel consumption caps, and non-fossil energy share.

• Evaluation results will factor into performance assessments and promotion decisions – with officials found guilty of major breaches of duty referred for disciplinary action.

Agriculture and rural affairs

China’s bulk agricultural imports are set to fall steeply over the next decade, according to the annual 10-year agricultural outlook report released by the ag ministry (MARA) and Chinese Academy of Agricultural Sciences (CAAS).

• Significant increases in crop yields and falling stable crop consumption are driving the projected decline.

• Officials expect grain yields to rise 6.3% over the base period by 2035 – consistent with ongoing efforts to raise yields by improving farm infrastructure, soil health, crop varieties, and equipment.

• The report projects China’s grain and oilseed demand will peak at 842 million metric tons in 2032, before beginning a gradual decline.

As always, it was a busy week in China.

• Thank goodness Trivium China is here to make sure you don’t miss any of the developments that matter.

This week, Trivium China Podcast host Andrew Polk and Head of Supply Chain Research Cory Combs break down key dynamics – from:

• The evolving impacts of the Iran war and China’s responses

• China’s latest supply chain and anti-foreign coercion policies

• The US’s ongoing mass-diversification push amid Chinese export controls

• US-China strategy as the leadership meeting approaches

• And more!

With both Andrew and Cory having just returned from ~6 weeks of travel, they take stock in a wide-ranging conversation – with many questions, but also a few proposed answers.

Transcript

Andrew Polk: Hi, everybody, and welcome to the latest Trivium China Podcast, a proud member of the Sinica Podcast Network. I’m your host, Trivium Co-Founder Andrew Polk, and today I am joined, once again, by Trivium’s Head of Supply Chain and Critical Minerals Research, Cory Combs. Cory, how are you doing, man?

Cory Combs: Doing well, thank you. Good to be back.

Andrew: Yeah, good to have you back on. For listeners, we took a couple of unexpected weeks off. I was traveling and then on vacation and sort of unfortunately couldn’t get all the logistics together for keeping the pod going through all my movements. So, apologies for that, but you got a couple weeks off from us, I guess three weeks, and now we are glad to be back doing this again. So, Cory, glad to have you on to sort of restart here in the spring of 2026. Appreciate it, man.

Cory: Cheers.

Andrew: We are going to talk about a sort of range of things today. Kind of the biggest policy moves out of three, four weeks have been a couple of developments in terms of lawfare, by which I mean China’s ability to use its legal and regulatory system to sort of fight back against U.S. legal and regulatory moves and Western regulatory moves generally. So, we’ll talk about these lawfare regs. They specifically are, one is focused on supply chain security and another is really focused on sort of extraterritorial jurisdiction, the ability to sort of pressure companies that are complying with U.S. and other Western sanctions, and to try to kind of have a counterbalance against those.

So, we’ll get into all that. Then while we’re talking about supply chain issues, we will talk about the latest on Iran in terms of how the war in Iran impacts China with the ongoing disruptions out of the Middle East. We, of course, have talked a little bit about the Iranian situation and how it impacts China, but Cory hasn’t had a chance to really give his advice full spiel on that. So, we’ll get into that. And then we will finally touch on the upcoming Trump-Xi meeting. Cory’s got some thoughts on that he’d like to share. And then we’ll also touch on some pieces on China’s latest developments and efforts on industrial upgrading. A lot of this, so as listeners may know, I was traveling throughout the world. I was in Europe and Spain, and then was in Beijing for a week and then Bali for a week, and then took the long way back to D.C. before being on holiday for a week.

And Cory similarly was kind of around the world, was in Hawaii at a track two type thing, and then some time off in Japan, and was able to hang out in Beijing and Shanghai, and then was just in D.C. last week. So, we’ve kind of both been around. I guess we can use that as a good jumping off point in terms of the customary vibe check. After your whirlwind tour of various parts of the U.S. and Asia, how’s your vibe, Cory?

Cory: Good energized. So, the trip went on a little bit longer than anticipated originally, and partly that was to join some additional activities in shanghai, and then D.C. was a pretty sudden trip as well. We can talk about that in detail if interested but was in D.C. to talk, guess what, supply chains in Iran, but also to join a terrific conference there as well. And getting back, I was definitely pretty exhausted coming back, but it’s only been a few days and pretty energized by it. It’s good to be able to touch base on the ground, see the material realities of a lot of policies that have been going on for a few years now, and especially post-15th Five-year plan, back every couple of months, obviously.

But this has been a particularly significant time of change, and you can feel it on the ground, I think. And then being back in D.C., of course, it’s always good to see, in some ways, how quickly things change and other ways how much nothing changes. So, it’s good to touch base pretty regularly. So, it was a lot to catch up on this trip.

Andrew: Yeah, well, good. Well, I’m glad that you have been to all those places and gathered a intel and had a lot of conversations and are able to share it with me and with our listeners now. Excited to get into this. In terms of my vibe, I also am kind of discombobulated a bit having been everywhere. My last week was down in Tennessee at Dollywood with my family. And so, yeah, we were doing the spring break thing, chilling at Dollywood Theme Park. I can’t recommend it enough. Great spot, like nice middle ground between some of the smaller theme parks versus a Disney. It’s like big, price is right. Anyway, everybody go check out Dollywood in Tennessee. That’s a freebie for those Dollywood folks. So that’s my vibe.

Cory: This is not a sponsored podcast.

Andrew: Yeah, exactly. Maybe we should get a sponsorship. But anyway, I’m relaxed coming off of spring break and glad to be back in the podcast seat here. So, we will dive into it. Of course, though, we also have to do the housekeeping quickly as well. So, a quick reminder to everybody out there, we’re not just a podcast here. Trivium China is a strategic advisory firm that helps businesses and investors navigate the China policy landscape, which includes policy towards China out of D.C., London, Brussels, and other Western capitals. So, if you need any help on that front or on the domestic policy front, please reach out to us at hq@triviumchina.com.

We’d love to have a conversation about how we can support your business or your fund. Otherwise, if you’re interested in receiving more Trivium content, check out our website. Again, that’s triviumchina.com, where we have a bunch of different subscription products, both free and paid. You’ll definitely find the China policy intel option you need on our website. And then finally, please do tell your friends and colleagues about Trivium, both about the podcast and about the company, generally helps us to grow our listenership, grow our business, so we can keep bringing this content to you all.

All right. Well, with that, Cory, let’s jump into it. We’re going to start with these two big docs that came out. So, one came out on March 31st. One came out on April 13th. So, we are recording here on April 22nd. So, the docs have been out, you know, one of them has been out for three weeks. One of them has been out for a little like a week and a half, both related to China’s ongoing efforts to develop its legal toolkit to fight back against Western sanctions, Western “ economic coercion,” and to bolster China’s legal avenues for its own economic coercion and its own sanctions and lawfare toolkit.

So, why don’t you just start by walking us through what these two documents were, what’s in them generally, and then we can talk about sort of why they’re important and what the implications are.

Cory: Yeah, absolutely. We’ll start with doc, let’s start with 834. The State Council is behind both of these documents. The first one’s a doc 834, and the full title is Provisions on Security of Industrial and Supply Chains. This is a State Council of order. So, just again, for those who don’t follow policy too closely, this is a technical term, a very big deal in terms of the kind of level of importance of policy document. And the regulations broadly concern, first of all, they’re tied to the national security law.

And so, this is basically making very clear upfront that this is not just a kind of routine industrial policy document. It is a big capital I important industrial policy document. And broadly what it focuses on is making sure that the state has a very active role in ensuring the security of industrial supply chains. And so, basically, what this comes down to is putting much more onus on local governments and central ministries as well to understand, optimize, and secure the supply chains necessary for China’s industrial upgrading.

Broadly, in principle, this covers all of China’s industrial chains. But looking at a couple of specific things, I’m thinking of Article 7, for example, specifically calls for the strengthening of supply chains “in key areas.” What are those key areas, right? And specifically, it calls for promotion to maintain, and I’m quoting this, “stable and continuous operation of the production and circulation of raw materials, technologies, equipment, products, etc., in key areas.” What we interpret that to mean is, basically, there has been, for decades, Beijing has been very, very forward in a way that the U.S. currently wishes it had been in terms of ensuring raw material supplies.

So, you see this historically in the investments in rare earth elements that people will now talk about how that’s been a decades old process. That started very, very early on. You can trace the roots of that supply chain security effort back to the Sino-Soviet split. I mean, this goes really far back. And then industrial development side, that goes more to the ADs, Deng Xiaoping area, etc. But always there’s been this through line of this is financially not that attractive, but it’s strategically important.

We need to make sure we have these things for military and industrial purposes. So, that has been a pretty consistent through line. And we see it more recently in the modern kind of incarnation, where, for example, and I think I’ve talked about this on the pod before, China is the world’s dominant battery maker, obviously, but also the dominant processor of lithium, which is the key input to most batteries.

But China depends on Australia, U.S. treaty ally, and in Chile for imports of raw spodumene and brine, the things you get lithium out of to process. So, what we saw a few years ago was the state started to push SOEs and other companies to start processing what’s called lepidolite, which is a very commercially unattractive mineral that also contains lithium. Why? Not because it was commercially attractive, but because they thought it was necessary to decrease foreign dependence. This is another example of the state playing a role on the raw material side. So, that’s just going to show this through line, but also more recent action.

And more recently, though, we’ve seen significant disruptions. Obviously, the most notable or at least top of mind right now come from Iran. We’ve published about the helium disruption — post bombing of facility in Qatar. And then also we have sulfuric acid has been really critical. We’ll probably talk about that more in a minute. But these are kind of the midstream things that China needs these to make other things. And then you have the technology side. We’ve seen recently there’s been a conversation, which we’ve been anticipating for quite a while now, that Beijing might become more proactive in trying to limit or curb the export of technologies that give China a leading position in certain industries.

And so, it was batteries. And now we’re looking at there’s been talks in Beijing, not yet finalized, nothing’s happened yet, but talks about potentially curbing the export of certain solar equipment and technologies. And so, we start to see this more expansive picture of what Beijing is viewing as its role in ensuring industrial security amid this grand 15-5-year plan upgrading effort. Many, many components. What this plan does, oh, sorry, not this plan, this set of regulations, this Dock 834, is basically putting Beijing and the ministries and even pressuring local governments as well, municipalities on down the chain, to have a central role in securing all of this.

It is very high level. It is very expansive. And no, this does not mean we’re going, and I just want to be very clear, if that sounded too kind of command economy style, what it means is ensuring the security thereof. Not planning every link and node thereof, but ensuring the security thereof. So that’s where we’re at. We’ll see, I imagine, a lot more granular, detailed policies following out of this. But it’s very clear that Beijing views the world as a risky place and the state as having to take action to secure the ability to upgrade.

Andrew: Yeah, great. Thanks for that explanation. Super helpful. We want to get onto the second document as well. But before we do, I’ve got a bunch of questions already for you just in terms of sort of some of the rationale behind that first document, which first of all, I believe, correct me if I’m wrong, there was a sort of government-linked WeChat account, I think, that kind of came out and said that this is partially sort of related to the disruptions from Iran. I believe that’s where that came from.

So, first of all, for listeners who don’t know, the state council level document, a sort of an umbrella framework. It’s a statement of intent. It’s kind of laying out, this is what we’re trying to achieve. It’s not granular, detailed policy formulation that comes later with the specific ministries in charge of different aspects of this. So, this is highly important, as you said, but it’s very much a signaling mechanism — this is where we’re going. Still, that said, this isn’t the kind of thing that comes out in six weeks or a month. It takes time to put something like this together. But it does seem, like I said, the state was specifically linking this to the Iran situation. So how much of this is China kind of continuing its years-long effort to secure supply chains and all those things versus sort of a reaction to some of the more immediate supply disruptions that we see from the war in Iran. Do you have a sense of that?

Cory: Great. I think it really is a case of both. I mean, the other side of this, I mean, what does it mean to secure supply chains? One of the major pieces here is that the State Council asserts Beijing’s right to push back on any foreign efforts to disrupt China’s supply chains, to put out information that could influence markets in an unhelpful way, right? So, there’s a broad counter-influence operation side of this as well. And so, you can argue that a lot of the supply chain, a lot of the specific articles are in this regulation also amount to an anti-sanctions or anti-foreign influence toolkit.

So, there is the ability, for example, to the regs, sort of the ability to authorize investigations and countermeasures against foreign actions that disrupt normal market operations or impose discriminatory restrictions or anything else that causes “substantial harm” to China’s supply chain. So, you can imagine a hundred triggers for that, many of which start with the U.S. did something, something. And certainly the Iran situation has only accelerated. I think Iran is a prototypical example of the kind of thing that calls for Beijing to be very ahead of the current.

While a lot of the U.S. actions, that’s the tech controls, etc., are probably the more original drivers of a lot of this thinking. But it’s very much a both situation. I imagine regs have been discussed for a lot longer than Iran’s been going on, certainly. But certainly Iran was also relevant here.

Andrew: Okay, well, you sort of anticipated my second question on this, which is also internally, we’ve been kind of flagging this for clients because you said there’s this kind of heavy national security element. There’s this very clear and strong anti-coercion, anti-foreign interference sort of element to this. So that’s one thing when it comes to “government actions” from the U.S. But it’s also the concern, I think, among some of our colleagues is that this can also be more clearly weaponized against individual companies, right? So, the classic example is Micron being in the hot seat for lobbying the U.S. government to put one of its Chinese competitors on a sanctions list. And then, lo and behold, when tensions heat up, Micron gets an investigation in China.

That seems like it’s the perfect kind of use case for something like this, right? For an American or other company who’s trying to influence Western policy against its Chinese competitors, could something like this be used in a weaponized way to go after a company like that? What are your thoughts?

Cory: Yes, I certainly think it could be. On the flip side, I don’t know if this is optimistic or pessimistic, but I think Beijing probably already has plenty of tools to go after companies without this regulation. I don’t think this regulation fundamentally opens new doors. But…

Andrew: Fair. Sorry. Well, before you go on, fair. But I mean, I talked about this a little bit on the pod, my last pod, two or three weeks ago, which in my trip to Beijing, it really felt like this was a separate issue. That officials, their attitude has always been, we have an export-oriented market, get over it. But they kind of didn’t say the quiet part out loud. But in March, especially around the China Development Forum, they were saying the quiet part out loud. They’re saying it more in written documents. They’re saying, “This is what we’re doing. Quit complaining. Our companies are more competitive than yours. That’s why we have so many exports. And we are going to continue to rely on exports.”

And so, part of it, I guess, yes, they have these tools, but making it explicit is still some kind of signal to me.

Cory: Oh, it’s certainly a signal. I completely agree there. I mean, there’s specific pieces on, for example, if Beijing announces, if it formally confirms that a particular government is maligning or harming China’s supply chain or industrial security, Beijing reserves the right to straight up force them not to comply. And that can result in not just fines, not just investigations, but entry and exit bans. They can cut off export and import capabilities. There’s a whole range of very specific and very damaging counter motions that Beijing can take. And it’s a very clear threat to companies — do not support efforts that will inhibit China’s supply or industrial trade security. So, absolutely, there’s a signal there for companies. Don’t comply. Don’t help these efforts.

Andrew: Well, and I’ve said this one a million times, but this just takes us one step closer to what, in my mind, is the inevitable circumstance where some Western company or Chinese company, maybe, gets put in the impossible position where they’re being told by multiple governments, most likely China and the U.S., to comply with two completely incompatible sets of regulations, one of which says, “Don’t do business in or with Chinese companies under XYZ circumstances.”

And the other of which says, “You absolutely must do business and not break off business with Chinese companies under XYZ circumstances.” Or something along those lines. Like, in your mind, is this a step closer to that eventuality?

Cory: Absolutely. And document 835, the second of the two that we’ve put on the table…

Andrew: Perfect segue.

Cory: … is…

Andrew: Go for it.

Cory: That’s exactly what it is. I mean, it’s explicit.

Andrew: Yeah. Walk us through it.

Cory: Yeah. The decree here of the, again, State Council, it’s the Regulations on Anti-Improper Extraterritorial Jurisdiction of Foreign Countries. That’s the full title, right? It’s explicit. Any word that there’s...

Andrew: Love it. Sounds better in Chinese.

Cory: It really does. It really does. That improper is actually a useful word there. There’s certain types of extraterrestrial jurisdiction. It’s basically, again, it’s about optionality. I’ll get to that in a second. But basically, the set of regulations under this decree of the State Council is saying that there are actions that other governments take that say they have jurisdiction over some Chinese interest. If Beijing disagrees, you cannot comply or you will be subject to Chinese sanctions. That is explicitly the purpose of this. To make sure that countries can’t comply with extraterritorial jurisdiction that affects China if China disagrees with it. That’s basically the point.

Andrew: Well, any other thoughts on that second doc, that April 13th document? I mean, you just went through the basics, but other thoughts on what else is in there or other implications we should be thinking of?

Cory: Yeah. I mean, oftentimes we think about these kinds of policies in terms of what’s the biggest impact it could have. And, of course, that’s the most important top line question. But underneath, what’s the logic of the policy, I think is the second most important question. And in this case, I think what’s really interesting to me is the degree to which China, I would argue more so than some of the previous documents around like the Anti-Foreign Sanctions Law, this document is very heavy, in my view, on ensuring optionality. Basically, it provides Beijing multiple off ramps and on ramps to deciding when and where a particular action is harmful to China, when it’s going to crack down on companies complying, and to what extent.

And so, for example, there’s a call for, I just want to make sure I get the detail exactly right here, I believe it’s a working committee. I want to make sure it’s indeed a committee — Oh, a national working mechanism. There we go. A national working mechanism to assess whether a foreign extraterritorial jurisdiction claim is or is not improper, to assess and they have to announce whether a particular effort is something they can command companies not to comply with. And then at that point, there’s actually a process by which companies, if they’re told by the Chinese authorities — you cannot comply with this foreign regulation — if they’re told they cannot comply, those companies are allowed to go.

There’s an explicit mechanism that says you can go to Beijing and explain why you absolutely have to comply and why Beijing should make an exception for you. The document itself, the regs themselves, provide Beijing the option to say, “Go ahead, you are approved to continue to comply with this thing that we don’t like,” or “No, you can’t.” There’s an actual review process there. And I think that’s another level of, it’s not just optionality of whether or not Beijing chooses to investigate.

There’s another level there that says, maybe, I’m trying to think of good case studies off the fly, I think there’s a thousand in the tech case, obviously, but you could send a signal such as we’re announcing that this is an improper exterritorial jurisdiction claim. Company says, “We have to go,” and they’re like, “Okay, we’ll let you for now.” And then starts direct diplomacy with that country or direct negotiations with that country.

This is really interesting in a couple of levels of the most important of which is what’s weird about, to me, maybe it’s not weird to the international lawyers who are used to this, but what’s interesting to me from a policy standpoint is, what this policy does is basically, at the end of the day, you’re using companies as your leverage. The way you hit back against the other country whose actions you don’t agree with is by saying you’ll punish their companies. Now it’s creating a carve-out that says, “But sometimes we won’t punish the company if we feel like not punishing the company to give ourselves leeway to negotiate, to go through other fora,” right? If it thinks it’s possible.

That said, again, so I think there’s an optionality there in terms of if that company in particular is too important to some Chinese operation or investment, or whatever it is, Beijing has the choice of raising a ruckus without screwing that particular company, but it can always fall back on using that company as the point of leverage saying, “We will harm this company if you don’t do what we want.” So, it’s an interesting kind of optionality there.

Andrew: Yeah, that is interesting. I will say like companies hate this kind of stuff.

Cory: Oh yeah. Oh, it’s bad for companies. Like there’s no…

Andrew: Well, I mean, it’s certainly bad, but it’s also just the uncertainty and like kind of not knowing where you’re going to land a lot of times. If something’s off limits, you can find ways to sort of either find a workaround or an alternative or whatever. It’s when you’re not sure whether or not the law is going to be applied or how it’s going to be applied that makes it difficult. I think, you know, a lot of our clients, companies who we work with, a lot of them are people who work on these issues, have been doing China stuff for a long time.

And a lot of times they kind of say exactly what you said earlier, which is like, it doesn’t really matter what the regulation says. They’re going to find a way to ding us if they want to. Although I will say it is interesting that they have this mechanism laid out. And my sense is actually that the regulators are trying to be more adherent to at least the letter of the law…

Cory: I agree.

Andrew: … and the letter of the regulation when it comes to this stuff to say to companies like, “Hey, if your home country does something we don’t like, we are going to use your leverage and we’re going to try to fight back against that regulation. But we’re going to try to do so in a way that’s within the parameters of something that is reasonably predictable and has a legal process.” And again, cold comfort to a lot of companies, but that seems at least like a step forward. I don’t know.

Cory: Absolutely. And I think, you know, I don’t want to overstate how much of a trade-off this is, but there are tensions in China’s own strategy. One is, as it’s trying to upgrade its economy and kind of transition to this new era of economic model, it needs to protect its ability to operate the way it wants to operate in terms of exports, in terms of its domestic subsidies and everything else not being borrowed from various markets, you know, it needs in terms of to achieve its objectives. Again, I’m not making a moral argument here, just a practical one.

And so, it needs the ability, or it views itself as needing its ability to push back on these foreign policies. At the same time, it made very explicit that it needs foreign engagement. It needs foreign companies support, not just as total amount of FDI, but the term strategic partners has come up multiple times. China needs strategic partners, foreign companies. And those are the types of companies who can come in, can invest, not only in terms of just pure kind of renminbi value, but in terms of technology, in terms of capital, in terms of operational and organizational knowledge.

Like, how do you actually make something efficient? How do you build out a biotech industry? That’s difficult. And that’s not just a matter of throwing money at it. And so, there’s this interesting, and again, I don’t want to overstate how much the weights are definitely unequal here, but the ability to push back on countries largely revolves around what I would, you know, in a technical sense, call optionality for Beijing, but from a practical standpoint is weaponized uncertainty for companies, while also trying to make sure that China is an attractive enough partner to attract strategic partners, such as it needs. So, there’s an interesting kind of tension there.

Andrew: Yes, actually, speaking of tensions, I want to circle back to the supply chain stuff. I want to move on to some other things on the supply chain kind of outside of China from your conversations around the globe. But before we do that, the one other question I had to ask you about that first document, the March 31st document from the State Council that was specifically on securing supply chains, was you mentioned there is some language in there around potentially restricting certain exports to maintain supply chain security within China.

And I had a question from somebody who was asking about like, why if they have such a export heavy model, would they be talking about restricting certain exports? So, that’s also a potential tension, but I’m interested in what your thoughts on that would be.

Cory: Currently, I see no signal that Beijing would be interested, for any real reason, to restrict a significant value, you know, in terms of total value of exports. We’re not talking about cutting off batteries to the world. I mean, that would be catastrophic for Beijing’s own interests. What we’re talking about really are generally speaking two things. There might be some edge cases I’ll think in a second. But the main two things — one is very simply as a punitive measure. So, one of the measures, there’s a series of measures that State Council claims the right to take against actors who interfere with and whatever the way they deem interference with industrial supply chains.

One is fines one is restrictions on the ability to move people or data or goods and services. So, that’s the trade component. So, that would be very specifically If you screw up, you’re not allowed to sell out of China. That’s a huge hit, right? So that’s a punitive measure. We haven’t seen that happen, but that’s a claimed authority. Now, the other is really in terms of, and this is much bigger than document 834. This is going back years. There is a standardized catalog of technologies that are prohibited or restricted for exports.

And specifically, what that does is, and so for example, what’s on there? The very best cathode technology. The stuff that is barely even commercial, but is the theoretical cutting edge. Two is rare-earth processing technologies, which were restricted from export in 2021. This goes back before the whole export control battle broke out. And a large part of what that is to make sure that certain technologies that are particular pillars of Chinese value creation don’t just get sold off to the highest bidder.

That’s what that is. That’s the export of technologies, typically, and some equipment, which are usually very specific tech. So, those are the main two ways in which we see actual restrictions. Other things would be much more niche. Or I guess the third piece is in case of emergency. And so, with the Iran war, there are certain impacts, let’s say. China has restricted the export of certain petrochemical products to make sure that domestic industry has enough.

And again, back to this whole point of China’s top priority, Beijing’s, the central government’s top priority, is making sure that the rest of China’s industry has whatever it needs. And if it needs petrochemicals, it will make damn sure that domestic industry gets those petrochemicals before the highest bidder outside. That’s not how it works with U.S. oil and gas. That goes to the highest bidder. That’s not what Beijing is allowing. Sulfuric acid, that is really the top processing input alongside hydrofluoric acid. or sulfuric acid and hydrofluoric acid, the two mains.

You do not get to process copper. You don’t get to process really molybdenum, manganese, any of your battery materials, nickel. You don’t process any of that stuff without sulfuric acid. So, what is Beijing doing? Saying that as of May 1st, we’re going to make sure we have all that sulfuric acid that we need because it’s being disrupted by flows through Iran, through the Strait of Hormuz. So that’s another example. In case of emergency, Beijing will temporarily lock things off just to secure domestic industry.

Andrew: Well, let’s lean into that topic a little bit more then. Talk to me about what else you’re seeing, if you want to talk more on the sulfuric acid piece, I’m sure listeners would love to know your thoughts there, but what else? I haven’t gotten your full rundown on what you think the supply chain impacts are on China from where we are currently in the Iran war. And I know that the ceasefire is up and down and on and off. And so, you know, who knows kind of how it’s going to resolve.

But just based on the information we have as of today, 6:00 PM, basically April 22nd, just give us your rundown on how China is thinking about where we are and what the impacts are.

Cory: Yeah, the impacts, I mean, it really depends where you’re looking. Broadly, I mean, China has been able to maintain a certain amount of Iranian supply. A lot of that has been relabeled shipments that were hanging out off the coast of Malaysia and Indonesia. We know this. It’s kind of not even an open secret. It’s just kind of reported now. Then you have some of the specifics — urea, critical to the ag industry. You have various other acids. You have sulfuric acid as well.

And so, one of the major pieces here is sulfuric acid’s role in fertilizer. There aren’t many policy areas that Beijing takes more seriously than economic security and energy security. Food security is one of them. It’s like food security in Taiwan, basically, in terms of things that always reign supreme. And sulfuric acid has an input to the fertilizer industry. That is absolutely critical. I think that’s why we’re seeing such a dramatic response in Beijing. There’s other things. Aluminum is being hit. There’s an appreciable, it’s high single digit, low double digits of total supply.

It’s not earth shattering necessarily. It’s certainly going to be expensive. Beijing has not been shutting down its aluminum exports. Why? Because that’s not food security. It’s not broad industrial security. It’s a price hit. It’s really unfortunate. And also, China has a lot of its own production as well. So, there are mitigants, there are lower stakes. But when it comes to certain things like the petrochemicals for industry, Oceania is going without a lot of Chinese petrochemicals, right? Australia, New Zealand being hit very, very hard. Other countries being hit very, very hard because China’s kind of maintaining those refined products for home to a certain extent.

And the acid piece is similarly. I think it’s a case where you see both where Beijing is probably congratulating itself on, one, managing and mitigating its dependence on overseas oil and gas in general. Like certainly it does still have dependencies, but you look at an industrial economy the size of China’s, and it’s staggering the sense which they’re not even more dependent on oil and gas. And specifically, they made sure they’re more dependent on coal and coal chemicals, right? Because that’s what they have. That’s a natural resource availability.

And so, they built around that for decades. And this is an example where it pays off And I just want to emphasize one thing because sometimes this kind of energy and industrial security argument, energy supply chain, industrial supply chain argument can come down to, well, for countries that have oil and gas, it’s okay. The same way that for a country like China that has coal, it’s fine. That’s not true. The issue with oil and gas markets, they sell to the highest bidder.

So, the U.S., for example, has plenty of shale gas. It has oil, but it’s selling to the global market. And so even though the U.S. does not have a supply shortage because it isn’t dependent on Gulf materials, it certainly imports some, but it’s not dependent in the way many countries are, Americans still feel the energy price inflation because the price goes up because everyone’s trying to get it, right? That’s not how coal works in China, right? Because it’s a domestic resource that a government that is very interventionist has basically state-managed the energy dependence.

So, that coupled with a lot of the other supply chain pieces of a lot of the upstream minerals, everything else that can be disrupted, this is the prototypical case of an exogenous shock that China is not responsible for, that affects China, and it is faring better than most countries and certainly better than any other major industrial economy. That said, certainly it has chinks in the armor, gaps in the walls, however you want to put it, and sulfuric acid is just one of them. Urea is another one, et cetera, et cetera.

Andrew: And so you’ve alluded to this already or your thoughts on this, but how do you think Chinese leaders are thinking about the situation? The word we used, I think, before was justified in kind of their approach in terms of resource security, stockpiling, all that stuff. And if so, might their calculus be changing as this thing drags on? We’ve already seen them become much more proactive in the negotiations hosted by Pakistan between Iran and the U.S. we’re hearing that China is very involved in getting the Iranians to the table.

And Xi Jinping, just a couple of days ago, kind of officially said, “All right, boys, it’s time to open the Strait of Hormuz.”

Cory: The straits should be open.

Andrew: Yeah.

Cory: I love the use of passive voice in a lot of Chinese… it’s great.

Andrew: Yeah, yeah, yeah. I don’t know. Talk to me about all of that. How’s Beijing feeling and how might its calculus be changing as we wear on?

Cory: Yeah, I mean, on the material side, I think it’s, on one side, you have to kind of note how comparatively resilient China is because of all the efforts taken by Beijing. And I would note there’s this distinction, sometimes we talk about stockpiling, the great thing about dominating tip to tail a lot of production lines is that you don’t have to stockpile if you’re producing everything domestically. If you pull the resource out of the ground domestically and process it domestically and use it domestically, you don’t have to stockpile that much.

You do have to stockpile, obviously, the things that you don’t have access to, like the acids. So, there’s that element of it. On the flip side, it still hurts. We cannot kind of use that point to underestimate or to understate the impacts on the economy. Certainly, this is still painful. And Beijing, I think like everyone has an active interest in freeing up supply of food and being able to make better use. I mean, currently you have low utilization of the refineries, you have a massive hit to export value, just because they’re having to keep things domestically for security purposes. This does hurt.

And Beijing, both for material and geopolitical reasons, has an interest in this ending. Now, there’s the whole geopolitical side as well. Can China come in and bolster its credibility as a peacemaker? All that stuff that is really less in my wheelhouse, and others have much more intelligent things to say than I do on that. But I think all those things point in the same direction. Beijing can weather the storm, but it would prefer not to have to.

Andrew: Yeah, I think that’s well said. Okay, well, let’s talk a little bit more about the supply chain response. We’ve talked a lot on this podcast about the Western response to Chinese moves on the rare earths piece. I’m sure folks in Washington and other capitals are looking at the latest supply chain document out in March in the anti-improper lawfare document from mid-April and thinking about how China might weaponize those and how Western countries and companies should be reacting.

Give us some highlights from your conversations over the past few weeks on where you think things are in terms of the Western response in terms of its own supply chain securitization vis-a-vis China.

Cory: Well, there’s a bunch of different things to touch on now. I think one actually that might just be the most interesting starting point, and tell me if this works for you, is looking at the progress that the U.S. and others have versus have not made in just general supply chain diversification. This is relevant in a couple of ways. One is it’s, broadly, it’s the response to China’s own export controls on the U.S., and that obviously affect the rest of the world, largely its collateral damage. It’s also become the centerpiece of Western industrial policy, really.

And it’s largely pulling from the Chinese playbook in terms of how you pull it off, which has some issues when you have a policy that works very well in the Chinese context and then apply it to a non-Chinese context. But it also has different issues when it’s a multilateral effort opposed to a unilateral effort. It also has issues when it’s a multilateral effort between a U.S. that has exhibited certain behaviors that do not support necessarily an amount of trust needed for certain investments. So, I’ll be less coy about that in a minute. I’m trying to be diplomatic, but I’ll be blunt here in a minute.

Andrew: Yeah, I can tell you’re choosing your words very carefully here.

Cory: Yeah. For those unaware, which I think is very few people, but just in case, Iran hit at a time when the U.S. is still frantically trying to shore up its own supply chains. A dozen different supply chains, critical minerals, everything from tungsten to rare earths, magnesium, all kinds of other stuff. Everything’s been hit by Chinese export controls and more. A lot of its efforts to do that revolve around, one, obviously the immediacy of trying to shore up supplies that have been decreased and made more expensive.

Supply has gone down and prices have gone up, I guess Chinese export controls. But the other is to try to lessen Beijing’s leverage. To the extent that you can diversify, China has less leverage. And so, you are less beholden to the impacts of your certain policy decisions or the consequences thereof. So, that’s been ongoing. The thing is the Trump administration has come around to the understanding that you cannot do this alone. This cannot be American investment in American companies using American resources for American security. It does not work that way.

The U.S. does not have the material on the ground. It doesn’t have the processing capabilities. It doesn’t have enough money even. And it doesn’t have the technical talent or technology in many cases to do this stuff alone. It just doesn’t. It could in a decade, maybe, maybe 15 years, but that’s too long to wait for the strategic objectives right now, which are fix the supply issue, decrease China’s leverage. That’s what you want. You can’t wait 15 years, 10 years, whatever it is. So, it’s come around to the idea of we have to work together.

And you see this demonstrated in three main initiatives. And these are not the first time that the U.S. has tried to rally the troops, so to speak, of international partners around supply chains. The Biden administration had the Critical Members Partnership, which was announced with a bang and never heard from again, partly because the impetus just wasn’t there. Now the impetus is clearly built effectively. And we see that we have three core programs or mechanisms. One is Pax Silica, which is an effort to work with a very specific set of allies and partners around basically semiconductor production chains from silicon all the way down to chips, right?

That’s what Pax Silica is supposed to be about. It’s a very niche operation run by a very specific office that is basically, I don’t want to say a one-man show, but it’s understood that this is the brainchild of a particular individual who is just going at it. Then you have these much broader initiatives. You have Project Vault, which effectively, it’s many things, but at the end of the day, it’s basically a US effort to build US-controlled stockpiles, strategic reserves that it can maintain critical supplies and release that need. Basically, trying to stockpile things that have already been disrupted, include gallium germanium, also include a bunch of other metals and other stuff like that.

And I’ll get to the difficulties of that. The third piece is FORGE, which is an acronym for or backronym in this case, but basically it’s a forum trying to get together dozens and dozens of countries to agree to work together on supply chain diversification. Secretary Rubio, Secretary of State, also National Security Advisor, had pulled together a whole bunch of countries. I think 50-some showed up, which is impressive, basically saying, “We,” i.e. non-Chinese countries, “need to band together to counter the threat that is China. China has cut off all of these resources. It has put the world in danger in terms of supply chains, industrial security, etc., And we have to solve the problem together.”

Now, that sounds great from the US perspective, I suppose, but for most other countries, what I imagine, I’m going to say this is my view, what I imagine is heard is the country that is co-equally responsible for the mess we’re in is now saying, “It’s all the other guys fault. Please work with me. You can trust me.” Now that it’s not just an optics and political game. It’s very practical. One of the questions is, did the U.S. understand the implications of its own actions when it took certain strategic decisions that inevitably led to Chinese retaliation? We didn’t know exactly what form the Chinese retaliation would take, but we were pretty confident it would do exactly what it said it would, which is hit back in a material way.

If you take certain actions undermining Chinese interests, they were hit back materially, probably through export controls and other things that you’ve talked about before. Som from a partnership standpoint, you have to ask, is the U.S. calculating that using us, the rest of the world, as collateral damage, is worth it for its strategic objectives to take those actions? Or did it not understand the strategic context and actual trade-offs that were relevant to its own decisions? Because either way, you probably want a very clear answer to how the U.S. is strategizing and taking actions before you tie yourself to it.

And this comes especially a salient point when it comes to stockpiles. Do you trust that any country, ally or otherwise, is going to release reserves when it suits your needs or only when it suits its own, especially when the context is basically, and I think I’ve said a version of this before, the context is basically the top priorities for stockpiling are the things that are already disrupted? Which means, by definition, there’s not excess supply in the system. Everyone’s using as much as they can get because supply is so short.

Andrew: So you’re adding further supply pressure.

Cory: Exactly. And specifically, you’re asking countries to either supply their own industry right now when they need it or send it to a foreign stockpile. that’s a heck of a trade-off, right? And that’s a decision I would have and I have a lot of confidence and trust in. And to have that trust, I think there’s a fair ways to go before there is that trust. So, this is not me trying to naysay or be a doomsayer or whatever it is. I’m saying that there are very practical strategic considerations behind whether or not the actors that the U.S. needs to work with will work with it. On the flip side, and I’ll wrap up here because I’m monologuing, but there actually has been quite a bit of progress on the commercial side in terms of particular companies investing in new projects.

That is good. It is worth singling out for recognition that specifically a lot of companies, I’m thinking of a few, and I’m trying not to endorse a company here, but there are several companies that have recognized the need for working with international partners.

Andrew: We already gave Dollywood a shout-out.

Cory: That’s true.

Andrew: So, feel free to go for it. We’ll see if we can get some sponsors from this podcast.

Cory: Oh, man. But no, this is truly my analytical hat on. I had the privilege to speak, to be on a panel with the CEO of USA Rare Earth, Barbara Humpton, last weekend in D.C. And what struck me about that conversation was seeing the full length of the logic in terms of, yes, building up U.S. supply chains, but I think there’s been a big shift in the industry’s understanding of the necessity of working with other countries. So, you see the acquisition of a UK metals company, you see working with a French government now, not just the U.S. government. This is a company that is getting support from the U.S. government, working with the French government, is going to be working with other governments. That’s something that the U.S. government itself is having trouble coordinating in my view, or at least has not.

Maybe it’s making progress behind closed doors, but we haven’t seen that much of it yet. But companies are navigating that. That’s what Lynas did, what’s part of what made Lynas so successful. And then you have the tungsten side. We have Sangdong coming online in South Korea. That’s a North American company working in South Korea. And so, I think there’s a role where the companies are making more progress in terms of really internationalizing the problem in a way that’s productive.

But again, there’s a key issue here, which is that what makes China’s supply chain security so strong is not just that it digs the stuff out of the ground. It’s also not just that it processes things. That’s the bottleneck of the West. It’s that it has the offtake too. It has guaranteed offtake from all the domestic suppliers. All the stuff that’s coming online by U.S. aligned or Western actors, who is it going to be sold to? So, much of it will go to DOD and the military and other militaries.

Great.

What about the rest, right? The cost implications are huge. These supplies will cost more than any Chinese supply. So, to the extent that China trickles out, whatever it allows to go through, that will be purchased first. So, are you going to be a company, a downstream company, maybe you make a battery or something in the U.S., are you going to sign yourself up for a long-term contract with massive amounts of offtake of something that costs two, three, four times what the Chinese supply cost? The government will do that. The Japanese magnet makers might do that with government support.

Not many other entities are doing that. And also, the downstream industry is just not robust enough in most of these cases to really support the level of investment in the upstream. So that is an ongoing issue that the U.S. really has to figure out and its partners as well. Until the economic case is clearer, you have a bit of a chicken and egg problem. Companies are waiting for more supply to become cheaper. The suppliers need more customers to have that revenue security, revenue guarantee, those long-term contracts.

It can’t all be government support. So, we’re seeing movement on the private side. We still have a bit of a chicken and egg problem there. And government support is theoretically a solution. They’re moving toward it. But there are still these very practical geopolitical differences and trust gaps that I think are holding progress back.

Andrew: Yeah, well, we’ll keep tabs on it. I’ll throw this out as a somewhat organic plug for listeners. Cory is tracking basically any commercial deal that is happening anywhere in the world on the critical minerals front and helping clients wrap their minds around where the supply and demand dynamics are changing, which new projects are viable, which are not. We’re helping a bunch of clients with this. So, if this is, in any way, of interest to you, reach out to us. That email again is hq@triviumchina.com or you can email me at ap@triviumchina.com. We’d love to talk to you about this stuff because it’s hugely important. It’s massively consequential both for China’s economy, for the U.S. economy, for the global economy, and for the companies that are involved. You’re doing some really cool work on that.

So, I just had to make a plug for it generally because of your good work. And also, you know, if we can make money doing it, of course, that doesn’t hurt.

Cory: Well, I’ll say, it’s an interesting context in the podcast, because as you can imagine, I mean, a lot of this stuff, there’s a lot of speculation in the market. And so, part of the conversations I’m having, which are obviously not something we’re broadcasting all the outcomes of right now. But we get questions like, for example, “Where exactly is Indian phosphide coming from? And how do we plug our specific gap?” And then you have these huge questions. What is the role of Southeast Asia?

That’s a huge question, right? So, from the very big picture to the very minutia, we are kind of across all those things. And so, it’s hard to fit all that into a podcast format. If you’re listening to this and like, “I have questions that I’d like to discuss, but I’m not sure it’s at the right level,” We’re probably there. It’s just a little hard to fit into the podcast format. So go ahead and get in touch and we’ll see if we can have a conversation.

Andrew: Yeah. Awesome, man. I love it. Well, speaking of the critical minerals piece of this and rare earths, that obviously is one key element of U.S.-China back and forth, negotiations, tensions, deal-making, etc. We got this Trump-Xi Jinping meeting coming up in about, what? Three and a half weeks. I know you had some thoughts on sort of the stakes of that meeting as they currently stand and just how people should be thinking about that. So why don’t you walk us through your current thinking on all of those dynamics?

Cory: Yeah, there’s a few pieces here. The first is this level of meeting is always important, right? There’s no questioning that. But I do think there’s a unique degree of importance to this particular meeting. There is so much commercially, diplomatically, multilaterally, I think that is just weighting. I think there’s a lot of waiting on the signal. What comes out of this? There’s a lot of questions around, for example, will the first meeting between Xi and Trump come with an agreement to postpone the October 9th controls even further, right?

That’s a good question, and that would be a great outcome. But I really think, more fundamentally, the first question is, I don’t want to be flippant and say it’ll be a success as long as they don’t get in a fistfight, but the real floor for me is, do they agree to meet again? That to me is the real major outcome. Like, hopefully we can do more than that. That is a very low bar, right? But if they agree to meet again, what I think that does is send the signal to both bureaucracies and more to the point to the rest of the world that maybe we’ve reached a floor and maybe we can start to move back to more constructive engagement. Now, why does this matter?

It matters because it changes the nature of the geopolitical risk that everyone’s facing. It changes the expectations of the government’s perception of risk, right? And so, if things go south or they’re not meeting again, what happens to supply chain risk? It goes way up again, and suddenly you’ll probably see a lot more funding for various projects. And on the flip side, if you have a bit more sanguine view coming out of the meeting, basically saying, “Hey, we’re going to meet again, we’re going to make things work, we’re going to figure it out,” the irony is that I wonder if the decreased sense of risk around Chinese supply chains will actually disincentivize a little bit more some of the willingness to pay more for non-Chinese supply.

So, there’s this other dynamic that the governments are very well aware of this. They’re also thinking through, how do we both give general commerce the sign that, hey, we’re good to go, do business, make deals, things can be good, but also not undercut the sense of risk that is driving this diversification effort? And there are, I don’t want to say polar opposite interests, but there are certainly tensions there. So, that’s an interesting piece. More broadly, I mean, that’s just within my little wheelhouse of supply chain stuff.

But more broadly, I’ve just been shocked by, I’ll speak very abstractly here, but how many different things are just waiting on this meeting, waiting to see how both leaders respond. It’s staggering. Now, the last piece I want to note that I think is very promising, I think it’s a good sign on the Chinese side, is I think Beijing, there’s about a dozen reasons I believe this, but I’ll give one reason why I believe this, I believe Beijing has a much clearer sense of U.S. policy where it is and is not intending to harm China. I think previously a lot of U.S. actions were taken as very deliberate, malicious actions where, in many cases, I think genuinely there was a the misunderstanding of the impacts.

I think sometimes, I mean, some of the tech control is very obviously aggressive toward China. BAS is not clear that that was really the White House’s intent. And so when we’re asked what could derail the Trump-Xi meeting, one of the first things that comes to mind is new tariffs, new things that affect Chinese trade heavily. And so, you see in this context, the emergence of the post- IEEPA tariff authority recovery efforts, basically new Section 301s, Section 232s, that basically the White House is trying to reproduce what it had claimed under the IEEPA tariff authority.

And so, there are two scenarios. One is Beijing sees all these new investigations, 232s, 301s and others, and says, “Oh great, the US is attacking your interests again. Let’s hit back.” That’s scenario A. Scenario B is like, they actually understand that this is not a US escalatory effort. This is an effort by the US or by the White House to basically maintain the playing field of what it was and just replicate an authority that it just lost. And I think that became very clear during my trip that that is the interpretation.

And so, Beijing had to send some signal back of its displeasure with the 301 and 232 investigations. But it did so in a way that basically doesn’t materially affect the U.S. I think that was very intentionally done. I think that is a signal from Beijing that they understand the U.S. side was not being escalatory in this particular case. So, China will not be escalatory in this particular case. We’re going to keep things level. That I think is promising in terms of interpretation.

Andrew: So that’s interesting. First, I want to follow up on that. But first, I wanted to press you, when you said a lot of things are waiting on this meeting, did you specifically mean on the U.S. government side, like actions are I know you can’t be too specific, but basically everyone in the government sort of waiting for this meeting to happen before they can proceed on other China focused policy out of the U.S. side? Is that generally what you’re saying?

Cory: Yeah, I think there’s a lot of engagement between commerce and government as well. Commerce is not the department, but the commercial world and industry. And I think it’s not clear what the boundaries are. For example, can you have American companies licensing Chinese technologies in the non-tech spaces? Those conversations are basically on hold, basically, until, you know, practically, among many other things, exchanges, visa issues, all that stuff is basically waiting, yeah.

Andrew: Okay, cool. Well, sorry, I had to deviate there for a second. Do a little excursion, as Trump would say.

Cory: Oh, God. No excursions, Andrew.

Andrew: But I wanted to pick up on the piece you were just talking about, the IEEPA thing, I mean, my sense has always been like, yeah, Beijing understands that if the USTR uses these 301s to get back to the IEEPA level, of course, that’s not an escalation. But if you’re Beijing, you still want to press that advantage. You might not react out of a huff or whatever or feel like, oh, we absolutely have to be retaliatory. But if I was Beijing or I was in Beijing, I would do the exact same thing and say, “Nope, those have gone away. If you raise them again, then it doesn’t matter. That’s still a new provocation and we’re going to hit back.” Why not press that advantage? Even if you’re thinking about it slightly differently, I don’t know, what do you think?

Cory: There is a world in which that could happen and I think that’s a more dangerous world.

Andrew: Yeah. I mean, I would at least try to press. I think they feel like they have an advantage with the IEEPA tariffs being shut down. Although the follow-up as well that I wanted to ask you is I also don’t really think that Beijing cares all that much about tariffs anymore. I kind of feel like...

Cory: Yeah, I think at this point, it’s more of the principle. It’s about the principle.

Andrew: No, no. But what I’m saying is, in a way, that could be even bigger reason to retaliate. Because actually, we don’t give a crap about your tariffs. We realized we can live with them. It’s not a big deal. And so, in fact, even though we’ve moved on and what we really care about is the supply chain security, we’re going to play hardball on this thing that doesn’t really matter anymore. Because now we can either extract concessions or focus political will on this issue that we don’t really care about, right?

Cory: Yeah.

Andrew: I mean, I don’t know.

Cory: There is that. I think the trade-off, and this is where we start to get more speculative, but I think the trade-off is if you think the response would be a cancellation of the Xi-Trump meeting, if you really want that meeting to happen, you don’t do that. No one who says they understand Beijing’s thinking about this does, like we don’t know exactly what Xi and his advisors are thinking about the meeting per se at this level detail. But I would imagine that number one risk of that kind of hardball approach is that Trump out of, probably out of pettiness, just backs out of the meeting.

And if you think that has more potential harms or takes opportunities off the table that you wanted to pursue, is it worth it to play hardball? What concessions could you get that are better than you could get out of negotiating directly with Trump, especially if you think that Trump, at some level, wants to cut a deal with Xi? Could you get more concessions out of that meeting than you could out of the hardball? I think that’s probably one of the questions at hand. Obviously, I’m not in Zhongnanhai, but I would imagine conversations, at some point, that was one of the pieces of that conversation, I imagine.

Andrew: Okay, well then, as long as we’re being speculative, one more speculative question.

Cory: Sure.

Andrew: I mean, I think Beijing wants the meeting to happen for sure. They want some stability, they want the rules of the road. But I could foresee a circumstance where they were willing to push and let the meeting fall apart. I guess the question is, being speculative, who do you think needs the meeting more right now?

Cory: Yeah, I think Trump needs it more in the short term. And this is where my question becomes, what is Beijing’s long term objective, like not long term objective in terms of economy, we know all that, but what does it want to get out of this meeting and the relationship with Trump that will benefit China’s long term interests? Is it, if we’d open, would welcome your speculation on this point, I think Beijing’s actions clearly indicate one, they want the meeting, right? Two, that implies they can get something good out of it. They wouldn’t care otherwise.

So, my question is what exact… I’m sure listeners are bursting with like, well, it’s obviously this. There’s a thousand possible answers. We’re not ignorant of those answers or those possible answers. I’m not sure which it is though. I’m very curious, what do you think?

Andrew: Well, I mean, I’ll channel Sean Stein, our good friend and president of the US China Business Council who regularly says, and I totally agree with him, they want stability. They want stability first, second and third. So, a lot of this is just about kind of having an ongoing dialogue, generally being on the same page that we’re trying to agree on something, working towards some longer term negotiation. I don’t know that there’s like a specific thing at this point, frankly, that they’re trying to extract. I think they’ve got the tariff levels down to something they can deal with.

I’m sure they would love a rollback of tech export controls, semiconductor export controls, but I think that’s like an understatement to say it’s a reach goal. I think it’s not something they’re actually thinking they’ll get, but like they’d love it if it happened to, Of course, we’ve talked, you know, maybe some adjustment on language on Taiwan. Again, I think it’s not something that they’re going to push that hard for or in any way expect, but they’ll take, of course, whatever they can get.

I think it’s as much about the meeting and stability and kind of a general set of principles as anything. And so, in that way, it’s almost back to the Biden-esque Xi Jinping meetings, which was the meeting is the deliverable in a way. But I could also argue because of that, there’s not that much they’re going to get from it. So, if they really get a thumb in their eye, they would be willing to walk away. I don’t know.

Cory: Stability to what end is always the question. I mean, if really like we want to...

Andrew: I think it’s buying time.

Cory: It’s buying time. Yeah.

Andrew: Right. We’ve gone over this many times in this pod. They think time’s on their side. They think they can close a semiconductor gap more quickly than the U.S. can close the rare earth gap.

Cory: I think it’s right.

Andrew: Yeah, I agree. Stop poking us. Let us buy some time. Let us see if we can get the tech piece before you get the supply chain and rare earth piece. And then we’ll be even more. Or we, this is what I think they’re thinking, then China will be even more in the advantage, but we’ll see. Of course, we’re being speculative, but I think we’re trying to channel how we think both sides are thinking about it. Listen, we’re already pretty far on, so let me give you one last chance of any final thoughts on any of this, if there’s anything you want to leave listeners with.

And then we’ll just unfortunately have to hold the industrial upgrading piece. I know you had some thoughts on that, but let’s keep that. Keep the listeners coming back. We’ll do another pod with you again soon and make sure to get those thoughts out there. But anything, any last kind of final thoughts for everybody?

Cory: Yeah, I think, I mean, the other piece of this is, it’s not just a U.S.-China story. I mean, the whole world is watching and waiting to see what happens. I mean, the world broadly, I mean, so many U.S. allies have been directly affected by the impacts of the closure of the Strait of Hormuz. And so, as China has, on one hand, withheld certain petrochemical supplies, that directly damages huge swaths of industry, even among American allies, that it presumably cares about. And the flip side, China’s also trying to help hasten the end of it.

So, there’s that dynamic. And then when it comes to Xi Trump, I mean, stability between U.S.-China is presumably good for the U.S. and China, but it’s really, really important for the rest of the world too. So, those dynamics too. I mean, I wonder how Beijing, and to what extent, I think generally speaking, I observe more consideration for the rest of the world from Beijing than I do from D.C. as a general matter of course. And I think in this case as well. And I have to wonder, not to add to speculation upon speculation, but how they’re viewing the outcome of this kind of period of U.S.-China relations, how does it make China look to the rest of the world?

Certainly, we’ve gone through all the kind of, honestly, some of the stale rhetoric of China looking like the responsible actor and everything. But in more practical terms, what type and what extent of a risk is China to you? You, whichever country. I think that is a question that has to be at the core of Beijing’s strategy beyond looking at the U.S. That’s a question that will reshape whether or not the U.S. is able to build global supply chains that cut out China, whether it’s able to build out the EV ecosystem that cuts out China someday. That basically is a function of the degree to which everyone else agrees with the U.S. assessment of the type and degree of risk that China is. And China has a huge role to play in that. So, I wonder the extent to which it’s thinking about that and how that plays out.

Andrew: Well, there’s a lot there. It’s a meaty one to end it on, but thoughts all well taken. And of course, as always, we’ll be unpacking that question among many of these other questions that we’ve already just spent an hour going through, some more speculative than others. But Cory, this was a great conversation, great podcast to get back in the rhythm. So, thanks so much for joining me today. I appreciate your time.

Cory: Absolute pleasure. Thanks so much.

Andrew: And thanks everybody for listening. We’ll see you next time. Bye, everybody.

Our phrase of the week is: “in the bag” (探囊取物 tàn náng qǔ wù)

Context

The second Beijing Human and Humanoid Robot Half Marathon took place on April 19 in Yizhuang (亦庄), a district in the southeastern suburbs of the capital.

102 teams competed in the race, with over 300 robots from 26 brands running alongside human competitors on the same course.

The winner was a surprise to many, and a new entrant this year: Lightning (闪电). Built by smartphone manufacturer, Honor (荣耀), Lightening completed the race in 50 minutes and 26 seconds, smashing the human world record for that distance, and beating last years’s best time of 2 hours 40 minutes by two thirds.

Second, third, fourth, fifth, and sixth places were also taken by Honor-made robots. Which is a stunning achievement considering the firm’s robotics division was only established less than a year ago.

Although Honor’s dominance on the podium did come as a surprise to many, it was not such a shock to the Honor team. They went into the race with confidence as Lightning had already broken the human record in the pre-race dry run, and that wasn’t even at feel speed:

After the robot from Honor shattered human records while “holding back” during pre-race testing…

The team knew the race was in the bag.

在开赛前一周的全要素路测中，荣耀机器人“收着跑”仅发挥七八成功力，就打破了人类最好半马纪录，团队内部当时就觉得，夺冠已是“探囊取物”。

And with that, we have our Sinica Phrase of the Week.

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What it means

“In the bag” is our translation of a classical Chinese idiom which translates directly as “explore” (探 tàn), “pouch” (囊 náng), “take” (取 qǔ), “object” (物 wù).

Literally it means “reaching into a bag to retrieve something”. It describes a task so easy it requires no effort at all.

The phrase originates from the New History of the Five Dynasties (新五代史), a historical text compiled in the 11th century by the Song Dynasty scholar and statesman Ouyang Xiu (欧阳修), one of the most celebrated writers and officials of his era.

The story behind the idiom dates to the Five Dynasties period (907–960 CE), a turbulent era of shifting kingdoms in China. A scholar named Han Xizai (韩熙载) was fleeing the Central Plains after his father was killed by the emperor. Fearing he would meet the same fate he sought refuge in the southern kingdom of Wu.

Han’s close friend Li Gu (李榖) came to see him off at the border. As he departed, Han boasted to his friend, if the kingdom of Wu appointed him as prime minister he would lead troops back north and pacify the Central Plains.

Li Gu replied to his friend with equal confidence:

“Yes, but if the northern states appointed me as their chancellor…

Conquering the southern kingdoms would be as easy as retrieving an item from a pouch.”

中国用吾为相，取江南如探囊中物尔。

Neither man’s ambitions came to pass.

Han Xizai never rose to power in the Kingdom of Wu. Passed over by the court, he retreated into a life of wine and revelry. Li Gu did go on to become a military commander, leading successful campaigns against the southern kingdoms. But chancellor he never became.

The idiom, however, survived them both. Later generations distilled the exchange into the four-character phrase said by Li Gu: “easy as retrieving an item from a pouch” (探囊取物).

In modern Chinese, it’s used to describe any task that feels easy or like a foregone conclusion. Something accomplished with such ease that the outcome was never really in doubt.

In English it can be translated as “a piece of cake”, or “easy as pie”. But in this context we prefer “in the bag” which carries the same meaning in English, and fits with the imagery of the original idiom story.

Which is exactly how Honor’s robotics team felt after Lightning broke the human half-marathon world record in the practice run. For them, winning the race itself the following day was pretty much “in the bag”.

And they were proved right.

Andrew Methven is the author of RealTime Mandarin, a resource which helps you bridge the gap to real-world fluency in Mandarin, stay informed about China, and communicate with confidence—all through weekly immersion in real news. Subscribe for free here.

Read more about how this story is being discussed in the Chinese media in this week’s RealTime Mandarin.

RealTime Mandarin

#273: The Beijing Humanoid Robot Marathon Delivers a Surprise Winner

Welcome to RealTime Mandarin, a free weekly newsletter that helps you improve your Mandarin in 10 minutes a week…

Listen now

2 days ago · 3 likes · Andrew Methven

There is no evidence supporting the claim of coercion or the reported threat that China would impose economic sanctions or revoke debt relief against these three countries. In fact, none of the African countries involved is in any kind of debt distress to China.

Eric, Géraud, and Cobus discuss why it was likely the exercise of African agency, rather than any pressure from China, that prompted the decision to close off their airspace to Lai’s plane.

📌 Topics Covered in This Episode

• Why Taiwan’s Africa trip was suddenly canceled

• Claims of Chinese “economic coercion” examined

• The reality of African countries’ debt exposure to China

• How US media and policymakers framed the story

• Why African states had little incentive to say yes

• The role of China’s red lines in global diplomacy

• How narratives diverge from facts in global coverage

• What this reveals about Africa’s agency in foreign policy

Join the Discussion:

X: @ChinaGSProject | @eric_olander | @stadenesque | @christiangeraud

Facebook: www.facebook.com/ChinaAfricaProject
YouTube: www.youtube.com/@ChinaGlobalSouth

Now on Bluesky! Follow CGSP at @chinagsproject.bsky.social

Follow CGSP in French and Spanish:

• French: www.projetafriquechine.com | @AfrikChine

• Spanish: www.chinalasamericas.com | @ChinaAmericas

Join us on Patreon!
Become a CGSP Patreon member and get all sorts of cool stuff, including our Week in Review report, an invitation to join monthly Zoom calls with Eric & Cobus, and even an awesome new CGSP Podcast mug! www.patreon.com/chinaglobalsouth

This week on Sinica: Spanish Prime Minister Pedro Sánchez wrapped up his fourth visit to China in as many years last week, and this one may be the most consequential yet. It comes at a moment when Spain has emerged, almost improbably, as the most outspoken voice in Europe challenging the direction of American foreign policy — closing its airspace to U.S. military aircraft involved in the war in Iran, denying Washington the use of the Rota and Morón bases, recognizing Palestine, and getting expelled from the U.S.-led Gaza Coordination Center for its “anti-Israel obsession.” Against that backdrop, Sánchez delivered a remarkable speech at Tsinghua University — a speech I wrote about in detail on the Sinica Substack (PM Pedro Sánchez’s Tsinghua Speech: A Masterclass in Diplomatic Rhetoric) — defending multilateralism, calling the EU-China trade deficit unsustainable, and naming China “a country rebuilding its greatness.”

To help make sense of it, I’m joined by Mario Esteban Rodríguez, full professor at the Autonomous University of Madrid, director of its Center for East Asian Studies, and senior fellow at the Elcano Royal Institute. Mario is the scholar most frequently quoted in Spanish and European media coverage of Spain-China relations, and the author most recently of China’s Vertical Multilateralism and the Global South (Routledge, 2026). We discuss whether Sánchez is running an updated Merkel playbook or something qualitatively new, how much of the pivot is really about Trump, the sectoral politics of EVs and Iberian pork, the Chery plant in Barcelona, Spain’s role as a gateway to Latin America, and whether Madrid is now a trailblazer for a broader European — and transatlantic — reorientation toward Beijing.

06:33 — Sánchez’s China strategy: pragmatism, consistency, and political capital

08:35 — Domestic politics: the PSOE–PP consensus, Vox, and the regional contradiction

12:40 — Merkel’s playbook vs. Sánchez’s: COVID, Ukraine, and the macroeconomic imbalance

15:55 — The Tsinghua speech: Matteo Ricci, multipolarity, and the human rights omission

28:17 — The Trump factor: Iran, Gaza, and the limits of overestimating the American effect

35:48 — Trade, EV tariffs, pork, and Chinese investment in Spain (the Chery plant in Barcelona)

47:04 — Agricultural constituencies and the paradox of Vox voters who benefit from China trade

49:01 — Spain’s influence in Brussels and the conditions for other member states to follow

53:09 — Spain as gateway to Latin America, and the wider European (and Canadian) turn to Beijing

Paying it Forward: The European Think-Tank Network on China (ETNC) — a network providing country-specific insights on EU member states’ approaches to China, including the granular differences and nuances that non-European analysts often miss.

Recommendations

Mario: A trip, rather than a book — New Zealand, which he’s visiting this summer with his family to mark the 25th anniversary of the release of The Fellowship of the Ring. A nod to his love of Tolkien and tabletop role-playing games (conducted, he is careful to note, in his own basement — not his parents’).

Kaiser: CONG — a new large-format magazine published out of Hong Kong (the title is pronounced Kong, though its ambiguous Pinyin-like spelling invites a second reading), now preparing its third issue. Beautifully produced on glossy and textured paper, with broad coverage of the art, culture, and design scene across East and Southeast Asia. Check it out online here: https://www.serakai.studio/cong

Transcript (courtesy of the fantastic CadreScripts) further down the page. Image by Keya Zhou. Listen in the embedded player above!

This week on Sinica: Spanish Prime Minister Pedro Sánchez wrapped up his fourth visit to China in as many years last week, and this one may be the most consequential yet. It comes at a moment when Spain has emerged, almost improbably, as the most outspoken voice in Europe challenging the direction of American foreign policy — closing its airspace to U.S. military aircraft involved in the war in Iran, denying Washington the use of the Rota and Morón bases, recognizing Palestine, and getting expelled from the U.S.-led Gaza Coordination Center for its “anti-Israel obsession.” Against that backdrop, Sánchez delivered a remarkable speech at Tsinghua University — a speech I wrote about in detail on the Sinica Substack (PM Pedro Sánchez’s Tsinghua Speech: A Masterclass in Diplomatic Rhetoric) — defending multilateralism, calling the EU-China trade deficit unsustainable, and naming China “a country rebuilding its greatness.”

To help make sense of it, I’m joined by Mario Esteban Rodríguez, full professor at the Autonomous University of Madrid, director of its Center for East Asian Studies, and senior fellow at the Elcano Royal Institute. Mario is the scholar most frequently quoted in Spanish and European media coverage of Spain-China relations, and the author most recently of China’s Vertical Multilateralism and the Global South (Routledge, 2026). We discuss whether Sánchez is running an updated Merkel playbook or something qualitatively new, how much of the pivot is really about Trump, the sectoral politics of EVs and Iberian pork, the Chery plant in Barcelona, Spain’s role as a gateway to Latin America, and whether Madrid is now a trailblazer for a broader European — and transatlantic — reorientation toward Beijing.

06:33 — Sánchez’s China strategy: pragmatism, consistency, and political capital

08:35 — Domestic politics: the PSOE–PP consensus, Vox, and the regional contradiction

12:40 — Merkel’s playbook vs. Sánchez’s: COVID, Ukraine, and the macroeconomic imbalance

15:55 — The Tsinghua speech: Matteo Ricci, multipolarity, and the human rights omission

28:17 — The Trump factor: Iran, Gaza, and the limits of overestimating the American effect

35:48 — Trade, EV tariffs, pork, and Chinese investment in Spain (the Chery plant in Barcelona)

47:04 — Agricultural constituencies and the paradox of Vox voters who benefit from China trade

49:01 — Spain’s influence in Brussels and the conditions for other member states to follow

53:09 — Spain as gateway to Latin America, and the wider European (and Canadian) turn to Beijing

Paying it Forward: The European Think-Tank Network on China (ETNC) — a network providing country-specific insights on EU member states’ approaches to China, including the granular differences and nuances that non-European analysts often miss.

Recommendations

Mario: A trip, rather than a book — New Zealand, which he’s visiting this summer with his family to mark the 25th anniversary of the release of The Fellowship of the Ring. A nod to his love of Tolkien and tabletop role-playing games (conducted, he is careful to note, in his own basement — not his parents’).

Kaiser: CONG — a new large-format magazine published out of Hong Kong (the title is pronounced Kong, though its ambiguous Pinyin-like spelling invites a second reading), now preparing its third issue. Beautifully produced on glossy and textured paper, with broad coverage of the art, culture, and design scene across East and Southeast Asia. Check it out online here: https://www.serakai.studio/cong

Transcript

Kaiser Kuo: Welcome to the Sinica Podcast, a weekly discussion of current affairs in China. In this program, we look at books, ideas, new research, intellectual currents, and cultural trends that can help us better understand what’s happening in China’s politics, foreign relations, economics, and society. Join me each week for in-depth conversations that shed more light and bring less heat to how we think and talk about China.

I’m Kaiser Kuo, coming to you this week from my home in Beijing.

Sinica is supported this year by the Center for East Asian Studies at the University of Wisconsin-Madison, a national resource center for the study of East Asia. The Sinica Podcast is and will remain free, but listeners, if you value my work and would like to see me continue doing it, please support Sinica by becoming a paying subscriber at sinicapodcast.com. Your subscription helps me continue to bring you these conversations.

As we record this episode, Spanish Prime Minister Pedro Sánchez is wrapping up his fourth visit to China in four years, and this one may be the most consequential yet. It comes at a moment when Spain has emerged, almost improbably, as the most outspoken voice in all of Europe, challenging the direction of American foreign policy. Just weeks before this trip, Spain took the extraordinary step of closing its airspace to U.S. military aircraft involved in the war in Iran and denied Washington the use of the Rota and Moron military bases in southern Spain.

Trump threatened to cut off trade with Madrid. Secretary of State Rubio accused Spanish leaders of bragging about it. And Prime Minister Sánchez fired back with one of the great rejoinders of this young century — The government of Spain will not applaud those who set the world on fire just because they show up with a bucket. This is the backdrop against which Sánchez flew to Beijing.

On Monday at Tsinghua University, he delivered a speech defending multilateralism, calling the EU trade deficit unsustainable, and, to the astonishment of some, describing Spain as a country that recognizes China is rebuilding its greatness and is destined to play a vital role in the future. He called on Beijing to do more to push the adherence to international law and to end conflicts in Lebanon, Iran, Gaza, and Ukraine, especially now that the United States has decided to withdraw from many of these fronts, he said.

He even called on Western countries to relinquish their participation quotas at international institutions in favor of countries of the global south. On Tuesday, Sánchez met with China’s President Xi Jinping at the Great Hall of the People, where Xi greeted his guests with suitably apocalyptic language. “The international order is crumbling into disarray,” Xi said, adding that “both China and Spain are nations of principle and integrity and should cooperate closely to resist any regression toward the law of the jungle.”

Later, Sánchez met with NPC Standing Committee Chairman Zhao Leji and Premier Li Qiang, and a set of 13, I’ve also heard 15 bilateral agreements were signed on education, technology, sports, and cultural exchange. Sánchez also visited Xiaomi, the Beijing-headquartered tech company, and met with its founder, Lei Jun. He test drove one of their very nice EVs and checked out their factory automation.

This visit caps an astonishing year in Spain-China relations. King Felipe VI and Queen Letizia paid a state visit to China last November, the first by a Spanish monarch in, I think, 18 years.

Chinese investment in Spain surged from 149 million euros in 2024 to 643 million in 2025. Bilateral goods trade exceeded 55 billion last year, up nearly 10 percent. And yet the trade deficit keeps widening. China now accounts for a staggering 74 percent of Spain’s total trade gap.

So, what is Sánchez actually up to? Is this a sophisticated bid for strategic autonomy, a bid for a Spanish brand of leverage between Washington and Beijing, or is it, as one analyst put it, an increasingly one-sided and unbalanced pilgrimage? How does Spain’s China gambit sit with Brussels, which is watched uneasily as Sánchez undercut the EU’s position on EV tariffs and cozied up to Beijing while acting, as some would have it, as a self-appointed ambassador for Europe?

And what does this all tell us about the broader debate inside Europe over how to navigate between great powers? To help us make sense of all of this, I am joined by Mario Esteban Rodriguez, who is a full professor at the Autonomous University of Madrid, where he directs the Center for East Asian Studies and is a senior fellow at the Elcano Royal Institute, Spain’s preeminent international affairs think tank.

Mario has served as an expert for the European Commission, the European Parliament, and Spain’s own ministries of foreign affairs and defense. He has been a visiting professor at Beijing’s Foreign Studies University and a visiting researcher at the Chinese Academy of Social Sciences. He’s the author or editor of several important books, including most recently, China’s Vertical Multilateralism and the Global South, published by Routledge just this year, and China and International Norms: Evidence from the Belt and Road Initiative.

He also happens to be the scholar most frequently quoted in Spanish and European media coverage of Spain-China relations, and indeed was quoted in the Chinese media and in La Razón coverage of this very trip. Now, Mario comes on the strong recommendation of a dear friend of mine here in Beijing, a Spanish diplomat who had the pleasure of being present at Prime Minister Sánchez’s Tsinghua speech, and who thought Mario would be exactly the right person to help us understand what Spain is doing and what it means for Europe.

I think just from that bio I just presented, you would agree that my friend Julio was absolutely right. Mario Esteban, welcome to Sinica.

Mario Esteban: Thank you so much, Kaiser, for the invitation. It’s a real pleasure to be in your podcast.

Kaiser: Yeah, it’s wonderful to have you. So let me jump right in and start with a big picture. So, Pedro Sánchez has now visited China four times in four years. No other current European leader comes close to that level of frequency. How would you characterize his overall approach to China? What is driving that?

Mario: Well, I think that Prime Minister Sánchez, he’s being very candid himself in explaining that. I think we can characterize his strategy mainly by two things. One is pragmatism. He is being very, very pragmatic in his approach to China. He avoids this kind of idealistic or wishful thinking narratives about China, the global order. He thinks that China is a highly successful and powerful authoritarian system with a model of state capitalism.

This creates clear challenges, of course, the U.S. is always talking about that, but it also generates significant opportunities, and not only in socioeconomic terms, but also when we talk about addressing the main challenges for the international community, things like climate change, AI governance, non-proliferations, and also he has this kind of pragmatic approach. And also, this is a key issue. This is a very complex relationship, and he’s not shy in engaging in this kind of complexity.

Also, the other important thing is that he’s very consistent in his approach towards China. He has demonstrated sustained political commitment. And this is also quite new for a Spanish PM because previous Spanish governments had a similar approach but didn’t pay or didn’t invest the same level of political capital. He, as you mentioned, he has made like four visits to China. This has been also complemented by a state visit of the King and Queen of Spain in November last year.

So, the point here is that the government thinks that if a country wants to improve significantly its relationship with China, it must invest in high-level political engagement. And it needs to be consistent on that. So he thinks that diplomacy with China requires like time, attention, continuity. So I think, yeah, that’s the two things — pragmatism and consistency.

Kaiser: Just now, Mario, you talked about the former governments, the former Spanish governments under Rajoy, for example, or Zapatero. My understanding from your work at Elcano is that Spain’s China policy has historically enjoyed pretty broad consensus between the two major parties, the PSOE and the PP. It’s been largely bipartisan. Is that consensus still holding as far as you can tell? Or has Sánchez pushed things into new territory?

Mario: Well, your reading is absolutely right. In Spain, frankly speaking, you know, there are many issues that are very heated debate, many issues of the political agenda, even on foreign policy. Sometimes China policy has been a state policy, so it’s been quite consistent. But you are also quite right saying that nowadays, Sánchez’s approach toward China has been criticized domestically by the Popular Party, which is the leading opposition party, but also by Vox. At the moment, probably the third party in Spain, is a far-right party, populist far-right party.

But we need to distinguish a little bit here, because it’s true that Vox, its criticism is ideological criticism because they are like strongly anti-communist, you know, and more principled kind of criticism. And they are completely aligned with the MAGA movement in the U.S. So they will follow line whatever comes from the MAGA movement. But the popular party is more tricky. Because publicly, at the national level, they criticize Sánchez, but most of the local power in Spain, most of the regional power is in the hands of the popular party.

And those regional and local governments are actually competing to attract Chinese investment. They are receiving with open arms, you know, this kind of investment. So, I would bet that If or when the Popular Party leads a central government in Spain, they would follow a similar approach to the one that Sánchez is following. At the practical level, probably the tone or some of the narratives would be different. But in terms of favoring positive and productive engagement with China, in terms of trade and investment, they would follow line here.

Kaiser: Okay, okay. Just for listeners who aren’t familiar with Spanish politics, I’m not. I was just in Barcelona, but I’m very new to it. So, just the party in whic,h currently, Prime Minister Sánchez is a member and is in coalition is PSOE, the Partido Socialista Obrero Español, the Spanish Socialist Workers Party. It’s a center-left party, as you can imagine. Again, it’s governing in a minority coalition with the Sumar Alliance. And the other one, which you call the Popular Party or Partido Popular, the People’s Party, it’s the main opposition currently. It’s a center-right party.

And they’ve historically, as you said, shared this broad consensus on China policy, though they’ve definitely been much more critical of Prime Minister Sánchez’s critique of Washington under Trump, right? They’re a little more sympathetic to the Trans-Atlanticism and things like that. Is that correct?

Read more

• From adroitly facing down U.S. tariffs with its own proportional response to mending fences with spurned American partners, Beijing has navigated Trump’s erratic tenure with aplomb.

But as the Iran war enters its seventh week, Chinese leaders face a genuine geopolitical conundrum — and unfamiliar diplomatic waters.

Shy guy: For all its global influence, China is ever the cautious diplomat when it comes to crises far from its borders.

• After Russia invaded Ukraine, Beijing refused to be pressured into formally supporting either side, despite its close relationship with Moscow.

• Likewise, China was almost a non-entity when it came to brokering a ceasefire between Israel and Gaza.

Beijing’s logic is simple: It doesn’t benefit China to wade into complicated foreign entanglements when it doesn’t absolutely have to.

• There’s also no sense in China putting a target on its back by being seen as the major sponsor of one or more of the involved parties.

But this time could be different:

• While China maintains large energy reserves, every day that the Strait of Hormuz remains blocked eats into that all-important buffer — not to mention hitting Chinese access to a swathe of other critical industrial inputs.

• Meanwhile, energy price shocks are squeezing corporate profits and undermining consumer sentiment at home, as well as foreign demand for Chinese exports on which the country’s economy relies.

Then there’s the growing risks to China’s relations with the U.S.: The longer the conflict drags on, the higher the likelihood that the Trump administration will lash out at China, Iran’s perceived benefactor.

• The U.S. has threatened sanctions against Chinese entities involved with the purchase of Iranian oil, and the possibility of the U.S. Navy interdicting a Chinese ship is a diplomatic crisis waiting to happen.

Beijing’s ties with Tehran are already coming under intense scrutiny:

• Days ago, U.S. intelligence claimed that China was preparing a shipment of air defense systems to Iran, though China has denied this (CNN).

• The claims prompted Trump to write a letter to Xi Jinping warning him against supplying Iran with weapons.

• Leaked Iranian documents suggest that Iran purchased a Chinese spy satellite in 2024, which it subsequently used to target U.S. military bases in the Middle East (FT).

Stating the obvious: A breakdown in China-U.S. ties over Iran would effectively undo months of painstaking effort aimed at putting the relationship on a more even keel and return the two countries to a dangerous state of rivalry.

For now, however, there are signs that The Donald is interested in keeping things civil.

• In a Truth Social post, he said he would “permanently” open the Strait of Hormuz as a favor to China in exchange for Beijing’s supposed pledge not to send weapons to Iran.

• He further said that the U.S. and China were “working together smartly, and very well! Doesn’t that beat fighting???”

However, it’s anybody’s guess as to whether or not Trump will be in such a good mood if the conflict is still unresolved by the time he travels to China on May 14-15.

• The outcome of talks between Trump and Xi during that visit will offer a clearer picture of whether the Iran war is set to become an intractable drag on bilateral relations or just a blip on the radar.

Putting it all together: The Iran war is a global geopolitical crisis with a direct, immediate impact on Beijing’s core interests — across a range of different channels.

• If China sticks to its usual conservative playbook, it could forfeit its ability to influence the outcome and allow the risks to proliferate.

So far, Beijing’s efforts regarding Iran have focused on quiet backchanneling to try to resolve the conflict:

• China was reportedly central to persuading Iran to accept the two-week ceasefire with the U.S. on April 8 and worked closely with Pakistan throughout the negotiation process (though it credited Islamabad with the breakthrough).

• Chinese leaders have been furiously working the phones to regional capitals to discuss the crisis, and Beijing has dispatched a special envoy to the Middle East for on-the-ground engagement.

• Top diplomat Wang Yi also leaned directly on his Iranian counterpart Abbas Araghchi to “restore normal navigation in the Strait [of Hormuz].”

The big problem: Despite its low-key approach, Beijing has already stuck its neck out — raising expectations that it is key to resolving the crisis.

• Both Trump and Iranian officials acknowledged Beijing’s role in brokering the recent ceasefire.

That cuts both ways: If Chinese diplomats succeed in pulling Iran back to the table, Beijing will collect a credibility dividend as a global crisis manager.

• But if it tries and fails — or is seen as not trying hard enough — the blowback could be significant.

The big question: Given all that’s at stake, what will China do if its behind-the-scenes approach doesn’t work?

• If Beijing can’t persuade Tehran to compromise on key demands in future talks with the U.S., it might be forced to adopt more assertive methods.

• What that might look like is anyone’s guess, but it could be anything from more publicly distancing itself from Tehran to threatening to wield its economic and financial leverage over the Iranian economy to force Iranian officials to play ball.

The bigger picture: In the years ahead, China will face greater pressure to come off the sidelines and play a role in resolving global crises commensurate with its immense economic and political influence.

• The Iran conflict could serve as a trial run for a new, more muscular form of Chinese diplomacy, but only if Beijing rises to the occasion.

Joe Mazur, Head of Geopolitical Research, Trivium China

What you missed

Econ and finance

China’s economy grew strongly in Q1 2026 — but momentum is starting to wane.

• GDP grew 5.0% y/y in Q1, up from 4.5% in Q4 2025.

• Nominal GDP growth — which incorporates price effects — came in at 4.9% y/y.

• Industrial value-added (IVA) grew 5.7% y/y — down from 6.3% in January-February — and private sector IVA grew just 4.0%.

China’s export growth dropped sharply in March. Per data released by the customs bureau (GAC) on Tuesday:

• Exports grew just 2.5% y/y in March, a sharp slowdown from the 21.8% growth recorded across January-February.

• Imports surged 27.8%, building on 19.8% growth over the first two months of the year.

• The resulting trade surplus of U.S.D 51.1 billion was the lowest monthly reading (outside of Chinese New Year) in four years.

On Wednesday, the central bank (PBoC) and forex regulator (SAFE) raised the leverage ratio for how much banks can lend abroad against their capital base.

• For foreign-invested banks operating in mainland China, the ratio was raised from 0.5 to 1.5, implying a 200% increase in their offshore lending quota.

• The Export-Import Bank of China — the country’s main policy bank for export credit and overseas project finance — had its leverage ratio nudged up from 3.0 to 3.5.

• This is the latest in a series of steps authorities have taken to encourage outbound lending by domestic firms and banks.

Corporates

Regulators have reportedly consulted leading Chinese makers of solar module and cell manufacturing equipment on limiting exports of advanced technologies to the U.S..

• Tesla reportedly entered talks in March to purchase large quantities of solar module and cell manufacturing equipment from Chinese suppliers to enable the build out of large-scale solar manufacturing in the U.S..

• At the time, we flagged that Tesla’s efforts to decouple from China’s solar supply chain might prompt Beijing to impose export restrictions.

• According to industry insiders, no conclusions were reached at the meeting.

Business environment

On Monday, the State Council released the Regulations on Countering Improper Foreign Extraterritorial Jurisdiction.

• The regulations empower the Ministry of Justice to designate foreign measures as “improper” extraterritorial jurisdiction.

• Authorities can impose a wide range of countermeasures against the foreign country, across immigration, trade, investment, international cooperation, and foreign aid.

• A new Malicious Entity List targets foreign actors involved in formulating and enforcing such measures with penalties including visa bans, asset freezes, and trade restrictions.

Tech

On Tuesday, the ministries of industry (MIIT), transportation (MoT), and public security (PSB) held a joint meeting on autonomous vehicle road testing and pilot programs.

• Regulators said they will establish a three-tiered technology maturity and safety evaluation mechanism at the national, local, and enterprise levels.

• That means unified and tightened rules on which companies can put their driverless cars on the road, and which localities can host pilots.

On Wednesday, the National Data Administration (NDA) released a draft plan to build high-quality sectoral datasets, with a focus on empowering AI applications.

• The goal is to move beyond raw data to “AI-Ready” datasets that can directly train models and agents across thousands of industries.

• Crucially, the plan envisions a “data flywheel” effect — AI models will draw on the data supply to iterate, which will in turn empower new AI applications and data uses.

• Under the plan, the state will explore new data trading and pricing mechanisms based on AI token usage.

Politics

On April 12, the Party’s Taiwan Work Office released 10 measures to increase connectivity between Taiwan and the mainland.

• These came at the conclusion of the five-day visit to the mainland of Cheng Li-wun, chairwoman of Taiwan’s opposition Kuomintang (KMT) Party.

• The measures include more closely integrating Fujian province’s infrastructure with the nearby Taiwanese islands of Kinmen and Matsu, increasing the number of flights between Taiwan and the mainland, and allowing select Taiwanese TV programs to be aired on the mainland.

Foreign affairs

On April 10, top diplomat Wang Yi met with North Korean Supreme Leader Kim Jong-un during a two-day visit to Pyongyang, the first visit by a Chinese foreign minister in six years.

• Wang said the two sides should work together to “safeguard their respective sovereignty, security and development interests.”

• Wang met with his North Korean counterpart Choe Son Hui a day prior, and reportedly hailed Pyongyang’s “socialist construction…amid intensifying conspiracies of isolation and oppression of the U.S..”

On Wednesday, Minister of State Security Chen Yixin published a lengthy editorial in Qiushi, the Party’s top theory journal.

• Chen indicated that the U.S.-Israel-Iran conflict has freaked Beijing out: “Major powers are locked in fierce competition over strategic minerals, strategic straits, and strategic energy resources, with escalating risks of energy crises, chokepoint threats, and financial shocks.”

• According to Chen, China needs to go on the front foot: “[We must] shift national security work from reactive response toward early warning, rapid response, and proactive shaping.”

As always, it was a busy week in China.

• Thank goodness Trivium China is here to make sure you don’t miss any of the developments that matter.

Our phrase of the week is: “mockupation” (假装上班 jiǎ zhuāng shàng bān)

Context

China’s job market has never been more competitive.

Youth unemployment is at around 19%, with a record number of “unfinished kids” (烂尾哇) chasing a shrinking pool of jobs. The gap between finishing university and finding work has become a painful process of “removing the long gown of Kong Yiji” (脱下孔乙己的长衫).

In tech, meanwhile, layoffs of mid-level and senior staff are on the rise, as their roles are “optimised” (优化) and they are “replaced and eliminated” (汰换) by AI.

It’s in this context that a surprising new trend has been emerging in China’s employment landscape. There’s no official English name for it yet. So we came up with one:

The pinnacle of professionalism might just be the ability to stay on duty when you have lost your job.

Their commitment has given birth to a new type of company that is popping up all across the country: Mockupation startups.

上班的最高境界是什么？或许是：现实已无班可上，内心却始终”在岗”。最近全国各地冒出来了一批新的公司：假装上班公司。

And with that, we have our Sinica Phrase of the Week.

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What it means

“Mockupation” is our translation of a newly coined Chinese phrase which combines these two phrases: “to pretend” (假装 jiǎzhuāng), and “to go to work” (上班 shàngbān).

This phrase began surfacing in late 2024, as videos of people documenting their mock occupations spread across Chinese social media.

By early 2025 “mockupation companies” (假装上班公司) were springing up in cities across China.

They provide office space for people to be at their pretend jobs — who have been out of work, or never managed to find a job in the first place.

Mockupation companies look any normal office, but the people in there are not employees, they are paying to be there. A small desk goes for as little as 100 yuan a month, a larger one for 150.

For the people using these mockupation companies, they get structure, routine, and a psychological anchor of people “coming together to support each other” (抱团取暖).

Which, in the current job market in China, is a much needed relief from the otherwise grim outlook.

For some people, it’s got so bad it feels better to pretend like they have a job and avoid the social stigma of being out of work.

Which is why we translate this week’s phrase as “mockupation”.

Andrew Methven is the author of RealTime Mandarin, a resource which helps you bridge the gap to real-world fluency in Mandarin, stay informed about China, and communicate with confidence—all through weekly immersion in real news. Subscribe for free here.

Read more about how this story is being discussed in the Chinese media in this week’s RealTime Mandarin:

RealTime Mandarin

#272: Rise of the “mockupation” in China

Welcome to RealTime Mandarin, a free weekly newsletter that helps you improve your Mandarin in 10 minutes a week…

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9 days ago · 6 likes · Andrew Methven

In 2016, Pakistan's parliament became the first to be fully powered by solar energy, thanks to photovoltaic panels gifted by China (Image: Xinhua / Alamy)

Is a greener China a model for the rest of the world? Alex Wang, a professor at UCLA who spent decades practicing environmental law in China, attempts to answer this in the latest in a series of short explainers by Cambridge University Press covering the impacts of China on the world.

At first glance Chinese Global Environmentalism has an academic bent, but the book works for a broader audience too. Readers new to China will benefit from Wang’s able telling of China’s transformation from environmental demon to would-be climate saviour. While more experienced China watchers will appreciate Wang’s deeper insights, particularly his discussion on whether the country’s ongoing green transition represents a new development paradigm.

Image: Cambridge University Press

That said, at less than a hundred pages, the book cannot do both perfectly, and while I finished it more informed, I found myself no more certain of Wang’s or indeed my own verdict on the central question of what Chinese environmentalism means for the world.

The genesis of China’s global environmentalism

Wang says China presents a “fragmented and imperfect process” of environmental governance, but that it has “nonetheless, over time, moved incrementally toward the achievement of environmental policy goals”. His analysis covers four overlapping components: ideology, diplomacy, economic statecraft and international cooperation. Taken together, he says, these make up “Chinese global environmentalism”.

On ideology, Wang highlights the concept of “ecological civilization” which has become closely associated with China’s leader. Indeed, Xi Jinping Thought states that ecological civilization is no less than a “profound revolution in development philosophy.” It is easy to get lost in the rhetoric. But there is also much disagreement about what the idea means. Wang cites critics who say labels like it represent utopian, technocratic solutions to solving environmental issues — all while unleashing economic growth without restraint. He cites others who see the concept as having ancient Chinese philosophical roots, such as in the Daoist saying “the Way follows nature” (道法自然). And still others who understand it as utilitarian and a summary of a China which “wields ecology to shape nature, society and space”.

Wang does his best to synthesize these disparate views under his “Chinese global environmentalism” notion. This development concept, he writes, comprises a “hodgepodge of values”, where China projects itself as defender of Global South interests with a model that can deliver green outcomes other systems cannot. But he also sees much of the official rhetoric which conveys these ideas as somewhat superficial, describing it as “a gauzy invocation of green values.”

From ideology, we move to diplomacy and here Wang’s strengths as a practicing lawyer and Chinese legal scholar find better bearing. He assesses China’s involvement in global treaties, such as the Montreal Protocol to address ozone depletion and the Paris Agreement on climate change. His analysis focuses on how China’s growth story has endowed it with greater leadership on green diplomacy.

Wang also provides a useful historical overview of Chinese environmental diplomacy. Chinese diplomacy on this issue before 1979 was driven by ideology. It was combative, broadly blaming environmental problems on capitalism and US imperialism. As China embarked on changes in the reform and opening period, China was defensive and asserted its “right to development” as a poor country. As it became more integrated into the world economy, full-throttled-reform China was pragmatic, agreeing to meet international environmental standards to enable exports to signatories of the Montreal Protocol. And now today, in dare I say a post-reform era, China exudes unmistakeable confidence.

The announcement of the Belt and Road Initiative in 2013, the founding of new multilateral institutions such as the Asian Infrastructure Investment Bank and the New Development Bank, and China’s confident co-stewardship at the Paris climate talks, all point to rising international stature. Wang describes now China as a “climate diplomacy juggernaut.” He says it has won praise for this green diplomacy, becoming the first major developing country to announce a net-zero target. This foreshadowed China’s global dominance in clean technology — renewable energy, batteries, electric vehicles and other sectors — which it is now pushing in the realm of economic statecraft and international cooperation. But with great power comes great responsibility, and there is shadow in the silver lining, which is explored in the second half of the book.

A model for the world?

As mentioned, this new, more confident China says its green development presents a “profound revolution” in the understanding of development (发展观的深刻革命). But what has the global reception been? Here the book lays the case for and against the claim, drawing on extensive literature review and interviews. Divergent views are evident, for example, on China’s role in global energy sectors, which dominates China’s overseas investments and lending. Critics decry that this has been overwhelmingly oriented toward fossil-fuel projects. While proponents say China is merely responding to the requests of the Global South.

To its credit and for a variety of reasons mentioned in the book, China ceased overseas coal financing in 2021, and is investing more in renewable energy, electric vehicles and other supporting technologies in developing countries. But how much of that has to do with China being a responsible global stakeholder? And how much is it merely exploiting its advantages as the world’s biggest producer of green technology?

The book presents further evidence for us to consider. There is a detailed review of Chile’s engagement with China to secure investment, trade and green development opportunities while managing geopolitical risk. Wang calls this a “pragmatic response to China’s rise.” This part is helpful in giving a recipient country’s perspective of China’s overseas engagement. He unpacks China’s international cooperation efforts, such as the Belt and Road Initiative Green Development Council and the China Council for International Cooperation on Environment and Development. These, he says, illustrate the country’s hallmarks of cautious diplomacy: an emphasis on public decorum, voluntary rather than binding standards, and low-risk collaboration such as research. Wang also delves into project-specific cases such as the Kenyan Standard Gauge Railway and the Lancang-Mekong Environmental Cooperation, which show the on-the-ground realities of China’s involvement in infrastructure projects. These are often messy, complicated, and require trade-offs.

The book resists affirmatively answering the fundamental question on whether “Chinese global environmentalism” presents a model the world can emulate. Despite China’s now full transition from “airpocalypse” capital to climate tech juggernaut, sentiment remains sceptical in the west, where China is now often seen as a strategic competitor. Environmental issues are increasingly interlinked with industrial and security issues, and criticism of China’s environmental governance has shifted to encompass allegations of unfair trade practices, espionage, human rights abuse and the hollowing out of western industrial capacity.

Near the book’s conclusion, Wang summates: “China’s promotion of Chinese global environmentalism is a strategic effort motivated primarily by economic development and security objectives”. I would have liked greater expansion of this. How does China’s global environmentalism fit in President Xi’s “great rejuvenation” of the Chinese nation? Is it a strategy to displace the US and seek global hegemony? Or does it seek to enforce existing international norms in an increasingly challenging geopolitical environment? But perhaps my wishing for answers to these questions is really asking for a different book than the one Wang intended to write.

Wang’s compact treatise sheds much-needed light on today’s Green China. It is the work of someone who has spent decades understanding and contributing to the development of a rising power, and it is full of pithy and humble observations. Early in the book, Wang quotes political scientist Alexander Wendt who said, “500 British nuclear weapons are less threatening to the United States than 5 North Korea nuclear weapons”. From here, Wang delivers one of his best insights: who states are understood to be, matters in international relations. China has made incredible strides on its green achievements, but understanding China — that remains a work in progress.

Calvin Quek is Executive Director for Nature Finance at the Oxford Sustainable Finance Group, and Director at Transition Asia.

This article was originally published on Dialogue Earth under the Creative Commons BY NC ND licence.

The speech’s structural architecture is where the real rhetorical craft lies. Sánchez builds his argument around three pillars — multilateralism, balanced trade, and the provision of global public goods — and in doing so he pulls off something fairly difficult: he delivers pointed criticisms of Chinese behavior while keeping the overall register warm, collegial, even admiring. Think of it less as a spoonful of sugar helping the medicine go down, and more as a pill wrapped in jamon iberico. The treat is real, the medicine is real, and the patient swallows both.

The multilateralism pillar is the cleverest, because it hands Beijing something it genuinely wants — a full-throated European endorsement of multipolarity and a call for Western powers to relinquish their outsized representation in global institutions in favor of the Global South — while simultaneously making the implicit argument that China, as a major beneficiary of the rules-based order, has obligations to uphold it. The call for stronger multilateral institutions is music to Beijing’s ears; the implication that this includes adherence to international law in Ukraine is the catch. But Sánchez buries the Ukraine needle so deftly between layers of warm affirmation that it barely registers as a rebuke. He doesn’t say China should pressure Russia; he says China should do what it is already doing — demanding that international law be respected — only more. It is criticism structured as encouragement, which is perhaps the most face-saving form criticism can take.

The trade imbalance section is the speech’s most exposed nerve, and Sánchez handles it with impressive care. He arrives at it only after having established himself as a genuine believer in multipolarity and a critic of Western insularity — in other words, after having demonstrated that he is not lecturing from a position of assumed superiority. By the time he mentions that Spain’s trade deficit with China represents 74% of the country’s total deficit, my sense is he has earned enough goodwill in the room to say it plainly. And he frames it not as an accusation but as a structural problem that threatens the very multipolar order he and his hosts both profess to want. The logic is elegant: protectionism and isolationism (read: rightwing populism) in Europe are fed by trade imbalances; trade imbalances are therefore a threat to Chinese interests too. You, Beijing, have a stake in fixing this.

The closing Ricci reprise is beautifully done. It’s a callback that gives the speech a satisfying circularity. But the masterstroke is the invocation of the Artemis mission. Sánchez conjures the image of astronauts seeing the Earth as a borderless blue sphere from a distance no human had previously achieved, and uses it to make a case for cooperation and shared planetary stewardship. What he conspicuously does not say is that Artemis is a NASA program — which is to say, an American program — and that China is explicitly excluded from it because of the damn 2011 Wolf Amendment. Whether by design or by inspired omission, the effect is to lift a symbol of American technological ambition and redeploy it in service of a speech about multilateral cooperation delivered in Beijing. The Americans built the rocket; the Spanish Prime Minister pocketed the metaphor. Bravo.

The whole performance reflects a Spain — and by extension, perhaps a Europe — that is thinking carefully about how to navigate this post-Rupture world in which Washington’s reliability can no longer be assumed, and in which Beijing’s partnership, however complicated, cannot be refused. Sánchez came to Tsinghua to persuade rather than to lecture, and to find ground rather than draw lines. Whether or not the Chinese side found it equally compelling, as a piece of diplomatic rhetoric it deserves to be read with attention and, yes, a measure of admiration. What are you hearing from your Chinese interlocutors and out there on Chinese social media?

Here’s the speech:

Speech by Prime Minister Pedro Sánchez

Tsinghua University, Beijing, 13 April 2026

Respected President and Chancellor of Tsinghua University,

Professors,

Students of Tsinghua University,

Da jia hao.

It is a true honor to be in this temple of knowledge. A global reference in teaching and research. A place where human beings explore the limits of science and our imagination. And where we also find, at those limits, new ways of cooperating and of prospering.

Allow me to begin by speaking precisely about that: about science, and also about imagination. With a story that took place not far from here, more than four centuries ago.

In 1583, an Italian Jesuit named Matteo Ricci arrived in China. In his austere luggage, he carried several books, an astrolabe, and a map of the world.

It was a European map. Correct in its proportions, highly advanced in its level of detail, but biased in its perspective. Because what it did was show the world as the West saw it: with Europe at the center and Asia on its right margin. At the ends of the earth. Upon seeing it, the cartographers of the imperial court asked the Jesuit why China appeared at that far edge of the map. And the European scholar understood for the first time that the Mediterranean Sea was the center of his world, but not of others’. Every world had its own center, and so Matteo Ricci remade his map entirely. This time, using the Pacific Ocean as its axis and capturing within it the entire Eurasian continent.

More than 400 years have passed since then — more than 400 years. And yet there are still, unfortunately, people who continue to see the world as it appeared in that first map, distorted by Ricci. I say distorted because I know the world was not like that. I know that in the year 1583, China was already a great power representing one quarter of the world’s population and global GDP. That it traded with half the planet. And that it led science and technology in many fields.

I know this because at that time, Spain — as the University President has kindly reminded us — was also a great empire. An empire that exchanged raw materials and manufactured goods with the Ming Dynasty through the Manila corridor. And that crossed the oceans with magnetic compasses, muskets, and sternpost rudders — all technologies of Chinese origin.

The Spain of that era knew of China’s greatness. It knew that Beijing was not on the periphery of the world, but was one of its centers.

And present-day Spain knows this too. It knows that China is rebuilding its greatness. That it is already the world’s leading exporter of goods and fourth in services. That its industry and science are transforming the fight against global warming and reducing poverty. And that, as such, China is called to play an essential role in the future of the world.

That is why, for me, dear President, professors, it is a genuine honor to address this center of thought as a Spaniard, and also as a European.

There are those who insist on interpreting reality in zero-sum terms. On narrating the growth of some as a loss for the rest. Or on arguing that deepening certain relationships implies renouncing others.

But I believe this reading is not only wrong. It is also dangerous, because it is paralyzing. Because it makes us prisoners of the past and limits the possibilities the future offers us. Because it falls into the error of assuming that the world we see — the world of old maps — is the only possible world.

In my view, what is happening today is not a transfer of hegemonies. It is a multiplication of poles — not only of power, but also of prosperity. And this is wonderful news for Europe. Because for the first time in contemporary history, progress is germinating simultaneously in many places across the planet. Places, moreover, that do not resemble one another. That do not share the same culture. Nor the same political system, nor the same social conditions. And that do not need to ask anyone’s permission to grow. This is happening here in China, in Asia. But also on the African continent, and in a region very close to Spain: Latin America.

The multipolarity I describe is not a hypothesis. It is not a wish either. It is already a reality. The new reality in which the world lives. And therefore we must accept it. We cannot change it. We can only choose between denying it or embracing it.

And the Government of Spain — all of Spanish society — chooses to embrace it. It does so from realism, also from pragmatism, and without any doubt from responsibility. But I would like to underscore that we do so also from hope. Because we believe that if Spain, Europe, and China were able to prosper together in the past, there are no reasons to think we cannot do so again.

Evidently, it will not be easy. We know that. There are matters that also divide us. Issues on which we do not share the same view. In which we compete. Where we also disagree. Points on which we will not agree — perhaps we will never manage to agree.

But humanity advances when we build upon what unites us. Not when we deepen the trenches that divide us. With that spirit we work from Spain with many other countries — Brazil, India, South Africa, Mexico. And of course also in our relations with China.

Spain’s proposal, therefore, is clear: to build a relationship based on mutual respect. A respect that allows us, among other things, to cooperate in every possible domain. To compete where necessary. And to manage our differences when they are unavoidable.

And Spain defends this same vision everywhere in the world and in every capital. It does so in Madrid, our capital. In Brussels, the capital of Europe. And it does so in the rest of the world in the same way.

But for that vision to work, and for the world to prosper under the new multipolar order, we will need three very important things in the months and years ahead. Three elements I would like to share with all of you.

The first is that efficient multipolarity is not possible without a strengthened multilateralism.

There are those who believe the multilateral system is dead. We are seeing, unfortunately, many cases in the media — crises, wars taking place in the world. They think that indeed, this multilateral world is dead, that it belongs to the past. And I want to say here that I deeply disagree with that analysis. And I do so forcefully.

I believe that the instruments of global governance functioned in the twentieth century and are more necessary today than ever. That rules and cross-border cooperation are the only tools that will allow humanity to overcome the climate emergency and the other challenges of this era.

I believe the multipolar world needs a robust multilateral system — not to impose a single vision, but to turn the crucible of our perspectives into a strength for all of humanity. Not to eliminate our differences, but to deal with them peacefully and with respect.

Because multipolarity without rules leads to rivalry, and from rivalry only wars, trade conflicts, and ruin arise.

That is why Spain calls for a profound renewal of the multilateral architecture. We must make it more efficient, more transparent, more accountable, and also more inclusive and plural.

Because if multilateralism wishes to remain useful, it must change and better reflect the balances of power and the sensibilities of today’s world. We cannot allow the past to suffocate the future of multilateral bodies.

This is why I believe the West must relinquish part of its share of representation in favor of global stability and the trust of countries in the Global South.

This is why I believe we must transform the United Nations as soon as possible — with a much stronger General Assembly, a more representative Security Council, and a more democratic decision-making system in which all regions truly have a voice and a vote, and middle powers can also play a unifying and harmonizing role, which is what is expected of them.

And from Spain we also believe it would be fitting that, for the first time in history, a woman should lead the United Nations Secretariat.

The second element I wish to share with you is that this new multipolar order must function with trade relations that are balanced and reciprocal. We cannot move from the imbalances of the twentieth century to different ones in the twenty-first.

For that development to be stable, sustainable, and healthy, the multipolar order will need a more horizontal and fairer economy — one in which there are no losing regions and winning ones, but truly global supply chains that create employment and wealth at every latitude of the planet and share negative externalities proportionately.

Why do I say this? Because the European Union is doing its part. One can debate whether it does so quickly enough or slowly, with difficulties — certainly, I acknowledge that — but it is doing its part.

In the last decade alone, we have signed trade agreements with 25 countries. We have increased our imports from the so-called Global South by 80%, and we have created more than 25 million jobs annually outside our borders.

We need China to do the same. To open up, so that Europe does not have to close down. To help us correct the current trade deficit we have with it.

A deficit that is not balanced — one that grew again by 18% just last year — and that is unsustainable for our societies in the medium and long term. It is unsustainable because of the isolationist movements it fuels and the grievances and social hardship it causes. To give you a sense of scale: our trade deficit with China already represents 74% of our country’s total deficit.

I therefore believe it is important that we correct this, that we cooperate, and that we jointly build a globalized, balanced economy that generates shared prosperity.

The third element we will need for the multipolar order to function is greater engagement by the major and middle powers in managing and providing what academics call global public goods — for example, the fight against climate change, security, defense, and the struggle against inequality.

In short, emerging powers and established powers alike must provide these global public goods.

Size implies not only power, but also a responsibility that cannot be delegated. Because the great problems of the twenty-first century do not require visas — they cross borders and belong to all of us.

I think, for example, of the fight against climate change, or the challenges posed by global health, the development of responsible artificial intelligence, nuclear arms control, the eradication of poverty, and the safeguarding — as I mentioned — of global health. These are areas in which funding has fallen by 23% in just the past year — 23%.

Without the collaboration of the great powers, and of course China, these objectives are not merely difficult — they are simply unachievable. I know China is fully aware of this and is doing a great deal, and I welcome that. But I believe China can do more. For example, by demanding — as it is already doing — that international law be respected and that the conflicts in Lebanon, Iran, Gaza, the West Bank, and also Ukraine come to an end. Because international law is the foundation of everything. By sharing its technology with the most disadvantaged countries. By canceling debt and contributing to the financing of the system through participation in debt-swap mechanisms.

Naturally, Europe will also have to redouble its efforts, especially now that the United States has decided to withdraw from many of these fronts. Europe’s contribution is and will be essential. I therefore humbly ask that you see it in the same light — that you do not fall into Matteo Ricci’s error and allow yourselves to be deceived by maps.

Because Europe may appear small on a world map, but in reality it is quite the opposite. The figures are these: the European Union is at this moment the world’s largest trading bloc and the second largest economy. It is also the top recipient of foreign direct investment. It is the second most innovative ecosystem. It has a highly qualified workforce. It is the second most productive economy on the planet and the first in levels of life satisfaction, social cohesion, and wellbeing.

I do not say this to boast, nor to conceal our many shortcomings — of which we have plenty. What I wish to say is that Europe is a key actor in the stability, prosperity, and peace of the world, and that without a united Europe — and therefore without a fragmented one — there can be no stable international order and no prosperous future for humanity. Nor can there be one without the participation of this great country, China. That is why we are called to understand one another and to cooperate.

Dear professors and students, let me now conclude.

Four centuries after Matteo Ricci arrived in China and had to correct his map, humanity is still searching for the most accurate angle from which to see the world as it truly is — not as power or prejudice dictates.

A few days ago, four American astronauts traveled farther from the Earth than any human being has ever done. And from there, they obtained perhaps that angle. From there, they saw the Earth for what it truly is: a sphere with no edges and no borders.

A unique, unrepeatable blue sphere, in the most hostile environment to life that could possibly exist. We human beings are the result of that miracle. Perhaps the only such miracle in the universe. And therefore our duty is to understand one another and to cooperate so that this miracle may continue to flourish.

Thank you very much. Xie xie.​​​​​​​​​​​​​​​​

Transcript courtesy of the fantastic CadreScripts. Image by Keya Zhou. Listen in the embedded player above!

Transcript

Kaiser Kuo: Welcome to the Sinica Podcast, where we bring discussion of current affairs in China. In this program, we look at books, ideas, new research, intellectual currents, and cultural trends that can help us better understand what’s happening in China’s politics, foreign relations, economics, and society. Join me each week for in-depth conversations that shed more light and bring less heat to how we think and talk about China.

I’m Kaiser Kuo, coming to you this week from Beijing.

Sinica is supported this year by the Center for East Asian Studies at the University of Wisconsin-Madison, a national resource center for the study of East Asia. The Sinica Podcast is and will remain free, but if you work for an organization that believes in what I’m doing with the show and with the newsletter, please consider lending your support. I’m still looking for new institutional support, and the lines are open. You can reach me at sinicapod@gmail.com. And listeners, please support my work by becoming a paying subscriber at sinicapodcast.com.

Seriously, help me out. I know there are a ton of Substacks out there. I sign up for new ones every week, every day, practically. I pay for many of them. I know they add up, but this is a particularly value-delivering offering here. Please do subscribe and help me to continue to bring you these conversations.

I am just back from Hong Kong, had a fantastic time there, really, really packed, had an event at the Asian Society, a talk at Hong Kong University that went really well, and lots, lots more stuff that happened down there. Saw a lot of old friends, made some new ones. And, of course, huge shout-out to Brian Wong, who organized this Hong Kong Global AI Governance Conference that was just really fantastic. Well, because I just got back and because I have a really packed calendar this week with talks for the British Chamber of Commerce, Schwarzman College, the Yenching Global Symposium, which is being held, I am moderating one panel there and appearing on another.

All of this before heading back to the States just after the weekend for still more talks. I’ve got a talk at the Virginia Military Institute, I’m really looking forward to; at UPenn with Neysun Mahboubi at the University of Chicago. And new episodes will resume once I get some of that behind me. So, this week, I’ve got the next installment from the fantastic conference convened by the Institute for America, China, and the Future of Global Affairs, which is abbreviated ACF, at the Johns Hopkins Paul H. Nitze School of Advanced International Studies, or SAIS, that was on April 3rd. The conference was called “The China Debate We’re Not Having: Politics, Technology, and the Road Ahead.”

Last week’s show featured the introduction by Jessica Chen Weiss, the inaugural head of ACF, and of course, the David M. Lampton Chair in China Studies at Hopkins SAIS. As you all well know, she is simply one of the smartest and most articulate voices in the U.S.-China discourse and has been invaluable in providing great analysis, really modeling how to talk about the complexities of the relationship in a way that is morally guided, is deeply informed, is empathetic and fact-based and, of course, effective for being all those other things.

The organizing premise of the conference was something, as I said last time, that resonated really deeply with me, that much of the prevailing policy conversation rests on underexamined assumptions that we need more rigor, more humility, and more intellectual honesty if we’re going to navigate this moment well. With the generous blessing and active encouragement of the organizers, Jessica, foremost, this week I’m sharing the audio from the second panel, which was called, “What Does the United States Want?”

That’s the question we really need to be asking, and I think it pairs very nicely with last week’s panel, which was, What Does China Want? The question that’s probably asked more often and maybe even too much. Jessica and her team have put together a fantastic panel that features Leslie Vinjamuri, who is president and CEO of the Chicago Council on Global Affairs. Jonas Nahm, Andrew W. Mellon Associate Professor at Johns Hopkins SAIS, a leading voice on China and the environment, who just came out recently from the administration.

Matt Duss, who is Executive Vice President at the Center for International Policy, and a very, very important voice. And Katherine Thompson, Senior Fellow at the Cato Institute. All of this was moderated by the excellent Dean of the Johns Hopkins School of Advanced International Studies, James Steinberg, who also served previously as Deputy National Security Advisor in the Second Clinton Administration and as Deputy Secretary of State under the First Obama Administration. So, enjoy the conversation as much as I did, I hope, and I will be back soon.

James Steinberg: Well, thank you all for being here. I regret other duties kept me away from the morning session, but I hear it was very lively and informative, and I’m delighted to have the opportunity to chair this one. Because we have so much to talk about and because we also want to give time for all of you to participate, I’m going to dispense with the usual introductions. You’ve seen the biographies and so you can read them for yourselves. And I want to go directly into this panel.

Just to frame this a bit, I think one of our goals here is we’re obviously focused on the U.S.-China relationship. But we all are practitioners of strategy, and in thinking about this, it was, I think, important to recognize and to think about U.S. and China in the broader context of U.S. strategy. And so, the question posed for this panel is what does the U.S. want? But what I want to do to begin with is to open the aperture a little bit to sort of think about, what is it the U.S. is looking for more broadly in terms of its grand strategy?

And how does that affect what we are looking for, what we expect in the bilateral relationship? We’ve got a great panel who can bring a variety of different perspectives on this. We’re going to begin with Matt. We’re sort of looking at the broad lens here. I love the idea, Matt, that I started. Starting on my far right, we will start with Matt. So, Matt, over to you.

Matt Duss: Thanks very much. Great to be up here with everyone, and great to see all of you. Thanks for inviting me. So, to get to the question — what the United States wants — the United States does not know what it wants. We were in a moment right now where the, you know, to state the obvious, the old consensus has come apart. I think that memo first landed with Trump’s election in 2016. There was a brief interregnum in 2020, where it seemed that, you know, at least if you asked Joe Biden about it, we got through this weird anomaly, this hiccup of Trumpism, and now we’re

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This week I’m sharing the next installment from the terrific day-long conference convened by the Institute for America, China, and the Future of Global Affairs (ACF) at Johns Hopkins SAIS on April 3rd in Washington — “The China Debate We’re Not Having: Politics, Technology, and the Road Ahead.” Last week’s episode featured Jessica Chen Weiss’s opening remarks and the first panel, “What China Wants.” This week, I’ve got the companion panel — “What Does the United States Want?” — which I think pairs beautifully with that first session, and which takes up a question that’s arguably harder and more uncomfortable to answer.

The panel is moderated by SAIS Dean James Steinberg, who served as Deputy National Security Advisor in the Clinton administration and Deputy Secretary of State under Obama — and who keeps this moving with real sharpness. He’s joined by Matt Duss, Executive Vice President at the Center for International Policy, who starts things off with a bracing observation: the United States does not know what it wants. The old foreign policy consensus has shattered, he argues, and neither the Trump administration nor the Democratic establishment has produced a coherent replacement. He locates the most interesting thinking in the progressive wing of the Democratic Party, where he hopes the 2028 primary will force some of these hard questions into the open.

Katherine Thompson, a Senior Fellow at the Cato Institute who previously served in the Pentagon and on Capitol Hill, brings a military-strategic lens. She makes a sharp case that the new National Defense Strategy, for all its imperfections, at least opens the door to an honest conversation about trade-offs — something Washington has been allergic to. If you’re going to prioritize deterrence in the Indo-Pacific, she argues, you have to actually give things up elsewhere, and the Iran situation is making that tension impossible to ignore.

Jonas Nahm, the Andrew W. Mellon Associate Professor at SAIS who served in the Biden administration, reframes economic competition with China in refreshingly concrete terms. Rather than abstract great-power framing, he identifies three specific buckets — affordability and energy, technological catch-up, and manufacturing competitiveness — where Chinese capacity could actually help solve American problems, if we had the political imagination to let it.

And Leslie Vinjamuri, president and CEO of the Chicago Council on Global Affairs, brings striking new polling data showing a 40-percentage-point swing in American favorability toward China since 2024 — now at 53 percent — driven largely by Democrats but with movement among Republicans too. She situates this in the fading of pandemic-era hostility and the absence of sustained anti-China rhetoric from the current administration, and adds an invaluable perspective on how utterly confused America’s allies are about what Washington actually expects of them.

The conversation ranges across Taiwan and strategic ambiguity, whether allies arming up in the Indo-Pacific helps or hurts, the collapse of U.S. credibility on human rights, the future of dollar dominance, and whether the 2028 election will finally force a reckoning with these questions. It’s a rich, candid discussion — and a reminder that the hardest debates in U.S.-China policy may not be about China at all.

Panelists:

— Matt Duss, Executive Vice President, Center for International Policy

— Katherine Thompson, Senior Fellow, Cato Institute

— Jonas Nahm, Andrew W. Mellon Associate Professor, Johns Hopkins SAIS

— Leslie Vinjamuri, President and CEO, Chicago Council on Global Affairs

Moderator: James Steinberg, Dean, Johns Hopkins School of Advanced International Studies

A pre-med student at the University of Illinois, Adam didn’t begin with a clear plan or a class requirement. Instead, it started with curiosity: books on cross-cultural healthcare, exposure to Chinese classmates, and a growing realization that language could open doors not just academically, but humanly.

In this episode, Jared sits down with Adam to unpack how that curiosity turned into real progress in just a year and a half. From grinding through Anki decks and ChinesePod to forming friendships that pushed his speaking skills forward, Adam shares what actually made the difference and what didn’t.

They dig into the moments that changed everything: discovering how Chinese characters really work, moving from inconsistent self-study to structured learning, and pushing past the mental barrier of “I understand the words, but not the sentence.”

But the real payoff? Adam is already using Chinese in the real world. Whether it’s bonding with friends over hot pot or helping comfort a Chinese-speaking patient during a painful procedure, his story is a reminder that language learning isn’t just about fluency, it’s about connection.

If you’ve ever wondered whether your efforts will actually lead to something meaningful, this episode shows exactly how they can.

Links from the episode:

• ⁠Kid Learning Chinese⁠ | Adam Syed on Instagram

• ⁠Mandarin Companion Graded Readers⁠

Eric spent a week in the U.S. Capitol talking with key stakeholders in government, academia, and think tanks, to hear firsthand why there’s widespread concern about China’s lead in these areas, but no sense of panic.

Cobus and Géraud join Eric to discuss whether it may actually be too late for the United States to catch up to China in certain sectors and why African countries, in particular, are focusing less attention on ties with Washington as they look to other partners for their economic and development needs.

Join the Discussion:

X: @ChinaGSProject | @eric_olander | @stadenesque | @christiangeraud

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YouTube: www.youtube.com/@ChinaGlobalSouth

Now on Bluesky! Follow CGSP at @chinagsproject.bsky.social

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• French: www.projetafriquechine.com | @AfrikChine

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Become a CGSP Patreon member and get all sorts of cool stuff, including our Week in Review report, an invitation to join monthly Zoom calls with Eric & Cobus, and even an awesome new CGSP Podcast mug! www.patreon.com/chinaglobalsouth

Our phrase of the week is: “an abrupt end” (法不责辉 fǎ bù zé huī)

Context

One of China’s most famous livestream hosts, Dong Yuhui (董宇辉), is facing a consumer backlash.

In early April, a CCTV reporter exposed a health supplement sold by Dong called “Youthit” (优思益) — marketed as a premium Australian eye supplement made by a company called Yarra Vibe, priced at 293–434 yuan per bottle.

The reality was very different: made in China, and owned by a Chinese shell company registered at an Australian address that turned out to be a car repair warehouse on the outskirts of Melbourne.

Dong Yuhui’s channel, Time with Hui (与辉同行), was Youthit’s single largest sales platform with an estimated 40% of total sales, worth 10–25 million yuan ($1.4–3.4M USD).

In response to the controversy, Dong’s team was slow to respond, issuing three statements that didn’t address the problem.

And this wasn’t a one-off. Youthit was Dong’s third fake product controversy this year. Each time, Dong has used carefully worded language to distance himself from the offending product, and any liability.

That’s a problem for someone who built his reputation as a “cultural figure” (文化人). His fans trust him, and they pay a premium for what he promotes because of it.

Now that trust is being eroded.

And there’s a new idiomatic phrase to explain why:

Recently, the catchphrase “Dong Yuhui keeps getting away with it” has gone viral.

A play on the old adage “the law does not punish the masses”, the four-character phrase highlights the seemingly untouchable status of Dong Yuhui and his team amidst a string of recent live-streaming controversies.

最近，”法不责辉”成了网络流行语。这四个字借用了老话”法不责众”的壳，指向了主播董宇辉及其团队在多起带货争议中的处境。

And with that, we have our Phrase of the Week.

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What it means

“Dong Yuhui keeps getting away with it” (法不责辉) is our translation of a new play on the classical Chinese idiom, “the law does not punish the multitude” (法不责众).

Breaking the meaning down: “law” (法), “does not” (不), “punish” (责), “masses” (众).

But in this new version, the final character “the multitude” (众) is replaced with Hui (辉) from Dong Yuhui’s name (董宇辉).

The original, “the law does not punish the multitude” (法不责众), traces back to the Qing Dynasty novel, The Little Five Heroes (小五义), by Shi Yukun (石玉昆), a storyteller and writer best known for his contributions to the chivalric fiction genre.

• For hardcode Phrase of the Week fans, Shi Yukun is the originator of our two previous Phrases: "Arrive with excitement, leave in disappointment" (乘兴而来，败兴而归), and "There is no 300 taels of silver buried here" (此地无银三百两).

In one scene of The Little Five Heroes, a warlord forbids everyone in a village from drinking alcohol, warning that anyone in a caught will be beheaded. So someone comes up with a plan: first get fifty people to have a round, then recruit another fifty for a second round. The logic being the warlord can’t possibly execute all 100 of them. So everyone drinks, and walks away as if nothing happened.

In Chapter 38, the crowd reaches their collective conclusion:

“Everyone talked it over — the law does not punish the multitude — and they all left.”

大家一议论，法不责众，全走了。

This scene reflects the realities of imperial governance at that time.

Feudal law was often enacted against the interests of ordinary people. But if the authorities tried to punish large groups en masse, they risked open revolt. So officials often went for a pragmatic middle ground: let the crowd off, and make an example of the ringleader. So the many escape and the few at the top are punished.

It’s also worth noting that the “law” here has nothing to do with the legal system. It’s closer to a popular folk wisdom — an ordinary person’s understanding of how rules and consequences actually work.

In modern Chinese it can describe any situation where a large number of people break the rules or fail to meet a standard, but nobody ends up being seriously dealt with. In other words: when everyone is doing it, it becomes harder to hold any one person to account.

The original describes a crowd too large to punish, but the newly coined phrase describes one man who keeps escaping accountability — Dong Yuhui. Because, apparently, the rules simply do not apply to him.

And in China’s internet culture, that is damaging. Which is why we translate this new idiom, “the law does not punish the Hui” (法不责辉), as “Dong Yuhui keeps getting away with it.”

But for how long?

P.S — Want to read more about how this story is being discussed in the Chinese media?

Tune into this week’s RealTime Mandarin.

And if you want to go deeper into Dong Yuhui’s career, I have great news for you!

We’ve been tracking him since the beginning:

• He first appeared on the scene in June 2022

• Made a name for himself in a high-profile spat with a competitor in August 2022

• Got the top job at East Buy following a fall-out with the CEO in December 2023

• And he left East Buy to build his own platform in July 2024

With this latest development, could Dong Yuhui’s career be coming to an end?

My guess is this is the first hint at that.

Because when the Chinese internet invents critical idiom about influencers, it normally signals the beginning of the end.

As Austin Li found in 2021 with the invention of ‘Austin Li’s uncontrollable success’ (琦虎难下).

What are your thoughts?

• But as of last month, it faces the opposite problem — a shift that couldn’t have come at a worse time.

The Iran war has delivered an energy price shock that has rippled through China’s economy at rapid speed.

• The U.S.-Israel strikes on Iran began on February 28 — by March, PMI survey data was already pointing to the fastest rise in input costs in four years.

And this week, the stats bureau confirmed it: China’s deflationary cycle has come to a sudden end — just not in the way Beijing had hoped.

Throughout March:

• Producer prices (PPI) grew 0.5% y/y — the first year-on-year increase in over three years

• On a month-on-month basis, PPI for the oil and gas extraction subsector surged 15.8%

• China’s purchasing price index — which measures manufacturers’ input costs — rose 0.8% y/y, the first increase since 2023

The energy shock is feeding through to consumers, too.

• Transportation fuel costs rose 10.0% month-on-month throughout March.

• Major Chinese airlines hiked domestic fuel surcharges sixfold.

But here’s the catch: This is the wrong kind of inflation.

• Cost-push inflation — driven by a supply shock rather than strengthening demand — does not solve China’s deflation problem in the way demand-pull inflation would.

• It compresses margins rather than expanding them, and squeezes household disposable income without improving consumer confidence or the propensity to spend.

To Beijing’s credit, policymakers have pulled out all the stops to cushion the blow.

• Throughout Jan-Feb, China pre-emptively boosted crude oil imports nearly 16% y/y, adding to strategic reserves that provide 3-4 months of import cover.

• Beijing has also restricted fuel exports to preserve domestic availability.

• Meanwhile, the macro planner (NDRC) has intervened multiple times in its standard fuel price adjustment cycle, capping retail gasoline and diesel price increases at roughly half the level that would normally apply — a rare measure not seen since 2013.

And yet, the squeeze is still coming through.

• Reporters visiting home appliance stores across Shanghai found staff at consumer electronics company TCL warning that TV prices are set to increase 8%, while staff at home appliance manufacturer Midea said refrigerator prices could rise by “several thousand yuan.”

• Staff at other brands echoed similar expectations.

The risk now is that cost-push inflation hits consumption precisely when Beijing has less room to respond.

• With consumer goods trade-in subsidies already trimmed this year and interest rate cuts on hold until at least H2, the government’s ability to offset the squeeze on household purchasing power is more limited than it was a year ago.

The irony is that Beijing entered 2026 hoping to engineer a gradual reflation through demand-led mechanisms — trade-in subsidies, services consumption, and recovering business confidence.

• What it has received instead is a cost shock disproportionately concentrated in input prices.

The upshot: The deflationary era in China may be over.

• But what’s replacing it won’t feel like good news to most Chinese households — or to the businesses that serve them.

Joe Peissel, Senior Macroeconomic Analyst, Trivium China

What You Missed

Econ and finance

Authorities are broadening the ways households can spend their housing provident fund (HPF) balances.

• The HPF is China’s compulsory, employer/employee-funded social insurance program designed to help citizens save for home purchases, offering below-market-rate mortgage loans.

• Hangzhou now allows HPF withdrawals to cover deed tax and property management fees.

• Meanwhile, Chengdu and Xuzhou have moved beyond housing-related spending, allowing HPF funds to cover major medical expenses.

Business environment

On Thursday, the State Council released the master plan for the China (Inner Mongolia) Pilot Free Trade Zone.

• Inner Mongolia handles roughly 95% of China-Mongolia overland transport and over 65% of China-Russia overland freight.

• The new FTZ will be China’s 23rd, spanning 120 sq km across three zones — Hohhot, Manzhouli, and Erlianhot.

• The plan includes measures to boost trade in commodities, including expanding imports of agricultural and food products, promoting outbound investment in energy and resources, and developing LPG and fluorochemical industries in Erlianhot.

On Wednesday, the state asset regulator (SASAC) established a new department — the Bureau of Overseas Foreign Investment Administration.

• The bureau’s responsibilities include guiding central SOEs’ international operations, optimizing the allocation and structure of overseas assets, and strengthening risk prevention and mitigation in overseas investment.

• Industry executives told Caixin the move signals the rising importance of overseas operations: “The consolidation suggests overseas operations are shifting from a supporting role to an integral part of core business.”

Tech

On Monday, the Ministry of Commerce (MofCom) and five other agencies issued guidance on promoting e-commerce development, with a significant focus on cross-border expansion.

• Per the document, China will establish service platforms to help e-commerce firms navigate foreign regulations.

• The document also emphasizes that firms should build “localized operational capabilities” and engage in “fair and orderly competition.”

• The guidance’s emphasis on compliance reflects officials’ recognition that aggressive expansion tactics by Chinese platforms have created political friction.

On April 3, the industry regulator’s (MIIT) electronics division held consultations with ZTE and Xiaomi as part of drafting the 15th Five-Year Plan for electronics manufacturing.

• Both companies emphasized that the 15th FYP period is a “critical window” for industry transformation, with AI reshaping the sector and driving growth in AI terminals, computing infrastructure, and intelligent connected vehicles.

• This is a heads-up that a formal electronics manufacturing FYP is coming, but is still in the drafting stages.

Politics

On April 3, state media announced that Politburo member Ma Xingrui is “suspected of serious violations of discipline and law and currently under disciplinary review and supervisory investigation.”

• Ma is the third Politburo member to be put under investigation since the October 2022 20th Party Congress, along with Generals Zhang Youxia and He Weidong.

• While it’s not clear what got Ma in trouble, he has deep ties with China’s aerospace sector, which has been caught up in the sweeping anti-corruption campaign wracking the defense-industrial complex.

Foreign affairs

On Wednesday, Iran and the U.S. agreed to cease hostilities for two weeks — and China was apparently key to getting Iran to the table.

• Per the New York Times: “Iran accepted Pakistan’s two-week cease-fire proposal following frantic diplomatic efforts by Pakistan and last-minute intervention by China, a key ally, asking Iran to show flexibility and defuse tensions…according to three Iranian officials.”

• Iran’s ambassador to China, Abdolreza Rahmani Fazli, also reportedly said China still has a big role to play in helping keep the peace.

U.S.-China

On Tuesday, when discussing U.S. President Donald Trump’s upcoming state visit to China, U.S. Trade Representative Jamieson Greer said: “When we think about what to expect for ​the president’s meeting…we’re looking to maintain that stability.

• Greer signaled that the proposed “Board of Trade” will be a big topic at the summit, describing it as: “A mechanism where we can work out with the Chinese what are the non-sensitive goods that we should be trading with each other.”

• However, he threw cold water on a potential “Board of Investment,” saying that trade is the current priority in bilateral economic relations.

As always, it was a busy week in China.

• Thank goodness Trivium China is here to make sure you don’t miss any of the developments that matter.

Transcript (courtesy of the fantastic CadreScripts) further down the page. Image by Keya Zhou. Listen in the embedded player above!

This week’s episode features audio from a day-long conference hosted by the Institute for America, China, and the Future of Global Affairs (ACF) at Johns Hopkins SAIS, held on April 3rd in Washington, DC. The conference, titled “The China Debate We’re Not Having: Politics, Technology, and the Road Ahead,” brought together a wide range of scholars, former officials, and analysts to interrogate some of the foundational assumptions underlying US policy toward China — a conversation I found compelling enough to share directly with Sinica listeners, with the full blessing of the organizers.

You’ll hear two segments in this episode.

Opening Remarks — Jessica Chen Weiss

ACF’s inaugural faculty director Jessica Chen Weiss opens the conference by framing its central provocation: that much of the prevailing US policy discourse assumes an intrinsically zero-sum competition with China, and that this assumption has not been adequately examined. She argues for a more rigorous, evidence-based conversation — one that takes seriously the possibility that American and Chinese interests are competitive but not necessarily adversarial, and that may even leave room for complementarity in some domains. She previews the day’s three thematic sessions — on what China wants, what the United States wants, and the stakes of technological and AI rivalry — and situates the whole enterprise in what she describes as a hinge moment in world history.

Session 1: What China Wants

Moderated by Demetri Sevastopulo of the Financial Times, the first panel takes up the deceptively simple question of what China is actually trying to achieve on the world stage — and whether its ambitions are as expansive as much US policy discourse assumes.

Jessica Chen Weiss argues that China’s core objectives remain relatively modest and sovereignty-focused: security, development, and legitimacy within an order long dominated by the United States. She pushes back on the idea that China is eager to assume the burdens of global leadership, noting that Chinese interlocutors are acutely aware of the domestic overextension that has constrained American power. Sevastopulo coins — with Weiss’s amusement — the term “China-first” to describe Beijing’s orientation.

Dan Taylor, drawing on his decades in the Defense Intelligence Agency, urges the audience to take Chinese leadership statements seriously rather than projecting worst-case intentions onto them. He notes that Beijing still sees itself as a developing nation with enormous domestic work ahead, and that its articulated goals leave considerable room for interpretation before one arrives at the conclusion that China seeks to displace the United States as global hegemon.

Arthur Kroeber adds an economic dimension, tracing how China’s export-driven model has generated massive global surpluses — and why the resulting tensions with trading partners are, in his view, a structural problem rather than evidence of strategic malice. He argues that much of what looks like geopolitical aggression is better understood as the consequence of an economic model operating at enormous scale with insufficient domestic demand to absorb its own output.

Shao Yuqun, speaking from her perch at the Shanghai Institutes for International Studies, offers the most pointed challenge to the panel’s relatively sanguine framing. She argues that the United States’ own behavior — erratic policy, withdrawal from multilateral commitments, and the disruptions of the Trump era — has itself destabilized the order that American strategists claim to be defending. She is measured but direct, and her presence gives the conversation a texture that too many Washington panels lack.

The discussion ranges across China’s Iran diplomacy, the prospects for a US-China summit, the question of whether Beijing is exploiting Trump-era tensions to deepen ties with traditional US allies, and — in a lively closing exchange — who the next generation of Chinese leadership looks like (with Kroeber’s deadpan answer, “Xi Jinping,” getting the biggest laugh of the session).

Guests:

• Jessica Chen Weiss, David M. Lampton Professor of China Studies, Johns Hopkins SAIS; Inaugural Faculty Director, ACF

• Dan Taylor, Adjunct Researcher, Institute for Defense Analyses; Senior Fellow, Johns Hopkins SAIS ACF

• Arthur Kroeber, Founding Partner, Gavekal Dragonomics

• Shao Yuqun, Director, Institute for Taiwan, Hong Kong & Macao Studies, Shanghai Institutes for International Studies

Moderator: Demetri Sevastopulo, US-China Correspondent, Financial Times

Remaining sessions from the conference — on what the United States wants, tech rivalry and competing visions of the future, and a fireside chat between Henry Farrell and Alondra Nelson on the AI race reconsidered — will be released over the coming weeks.

Transcript

Jessica Chen Weiss: All right, well, welcome everybody. My name is Jessica Chen Weiss. I’m the inaugural faculty director of the Institute for America, China, and the Future of Global Affairs, or ACF, here at SAIS. We’re delighted to welcome you here today. It’s a moment of great flux, which means a lot of risk, but also great opportunity. As the song by Buffalo Springfield put it, there’s something happening here, but what it is it ain’t exactly clear.

So, I’m hoping that you emerge from today’s conversation with a clearer picture of what exactly is happening here. And I think at this critical juncture in world history, It’s vital that we look afresh at key assumptions and principles, both about China, about the United States’ own purpose here at home and abroad, as well as about the nature of the technological developments that are reshaping our economies and societies. These, we feel,

are not the debates that we’re having often enough. And so today we tackle these foundational questions head-on to add rigor, and humility, civility, and creativity to advance a more sober, strategic and evidence-based conversation about U.S. public and policy conversation about China.

Much of the prevailing policy conversation assumes an intrinsically zero-sum competition between the United States and China, where any progress that China makes comes at an expense to or a threat to American interests. Yet we feel that this assumption has not been sufficiently unpacked. And today we interrogate the degree to which U.S. and Chinese interests are intrinsically adversarial, competitive but not necessarily zero-sum, or even potentially complementary or cooperative. A more refined assessment on both sides of the Pacific is necessary to illuminate what a new resting state, if you will, for U.S.-China relations could be beyond whatever the summit anticipated for May ends up producing.

So, we begin today with a whole session on what it is that China wants. And here I’m very pleased to feature one of our new ACF insights, which you may have picked up on your way in, or if not, you can scan the QR code from our Senior Fellow Dan Taylor on how to predict China’s intentions, how to parse the Chinese leadership statements and goals in ways that don’t quite add up to the common assertion that China seeks to replace the United States as the global hegemon. But this is only one way to look at China’s intentions.

We also need to understand the competing objectives and constraints that shape how China is navigating this moment. We look next at what China wants, or sorry, what the United States wants, and then how China fits into that. There was a consensus, we feel, that China posed the greatest challenge to U.S. interests and to the global order. But this administration has chosen a different approach, one centered more on economic balance, and a decent peace, they call it, in the Asia-Pacific. We may have, in fact, reached “ peak competition” under the last administration, as a senior Biden official put it in one of the private roundtables we hosted this spring.

So, the old consensus may be dead, but a new consensus has not yet been born. And it is particularly a moment, important that we examine what and re-examine what it is that Americans want from the U.S. relationship with China and in the world, and that we do so by examining the evolving landscape of opinion in both parties. We then turn to the AI tech and cyber domains, because this is where many of the most vital stakes live, where unintended escalation risks sit, where the economy and society is being reorganized around this idea of pursuing AI dominance.

So, what does success in this domain look like? And is it sufficient to “beat China”? And how are competing approaches to AI, to industrial strategy and cyber stability, redrawing the landscape of technological competition and risk? And so that’s where we will end the day with. I’m really pleased to share a conversation between Henry Farrell and Alondra Nelson on beyond the language of an AI race, what should we be aiming for? Who gets to decide? What is the affirmative vision that should underpin U.S. strategy in this domain? So, this is a moment of great transition. I’m delighted that you are all here with us today to examine where it might lead. It is collectively ours to shape. So, let’s get to work.

Let me first welcome the first panel up to the stage.

Demetri Sevastopulo: Good morning, everyone. Can you hear me okay? Yeah, perfect. So, I think you know who the panelists are because you’ve come here to hear them speak. But let me just very, very quickly introduce them. On my right, Jessica Chen Weiss, Faculty Director at SAIS’ Institute for America, China, and the Future of Global Affairs — ambitious title. Then we have Dan Taylor, who’s a former senior China intelligence analyst in the intelligence community, and, among other things, is a senior fellow also here at SAIS. We then have Arthur Kroeber, who’s the founding partner of Gavekal Dragonomics. I apologize for my Irish accent.

And finally, we have Shao Yuqun, Director of the Institute for Taiwan, Hong Kong, and Macau, at the Shanghai Institute for International Studies. So, I’m going to jump right in. We’re going to answer all the questions and solve all the world problems in the next 40 minutes. And if we don’t solve them, then you have 20 minutes to ask questions to make up for where I have failed. Let me start the question for all of you, and Jessica, maybe I’ll start with you given that you’re here.

What role does China want to play in the world? And how do you think its goal or its ambition has shifted in recent years? And then a little bit later, I’m going to talk specifically about Iran. So more broadly, in the last few years, and looking to the future, what is China trying to do on the world stage?

Jessica: Thanks so much, Demetri, and to you for being here, convening this important conversation. I’d say that what China wants in the world is sort of defined by a sort of a set of minimal objectives — sovereignty, security, and development. But what that means in the context of a shifting global order isn’t exactly clear. They certainly want to feel safe and secure and prosperous in a world that the United States has long dominated. And so, there’s been an effort to create much greater legitimacy and, in fact, leadership in the international order. I think that though the role that some, I think, are looking to China in this moment to step up where the United States has perhaps pulled back.

And I don’t think that they’re quite ready to do so. If anything, I think that Chinese leadership and experts that I’ve spoken with have a far greater sense of the domestic constraints that have, in fact, inhibited America’s global leadership. And China’s not eager to kind of repeat those mistakes of being an overextended global superpower while not attending to some of the more pressing challenges at home.

Demetri: So, you see more of a kind of a, I mean, America-first has taken a diversion into Iran, but you see China-first as their, is that a good way to describe China’s policy?

Jessica: Absolutely. You may have coined it just now.

Demetri: Dan, the same question. What do you think?

Dan Taylor: So, China-first, that’s fascinating. I’ll have to remember that. I think it’s important, in my previous career, we would always start trying to define terms and frame what we’re talking about and look for evidence. And if you go back to what the leaders in Beijing said they want their role to be in the world, it gives them a lot of room to define that as they evaluate the situation. And you guys can read the paper apparently that’s out there in the hall. But this general idea that they evaluate starting point their own level of development, their own level of various terms, comprehensive national power, and they’d still see themselves as being behind the so-called developed nations. And there is a lot of work still to be done domestically building their own pathway toward their great rejuvenation of the Chinese nation.

So, that leads to a lot of internal focus on their own needs and the needs of their own population and their own development. And related to that is their evaluation of the international environment, which is… we’re in changes unseen in a century or whatever, even beyond that by now, probably. So, they have to think about what their place is in that environment. And I don’t think they’re in a particular hurry to step forward and take on huge additional burdens in the international system at a time when they are still focused on developing domestically. Yes, increasing their influence in the international system, but not replacing it or establishing one that puts tremendous additional burdens on China.

Demetri: Just very quickly, I mean, as you said, there’s massive change happening right now. And what normally would happen in 10 years, 50 years, sometimes feels like it’s happening in a week or 24 hours in my business. Do you think the Chinese political system is nimble and adept enough to kind of adapt quickly to what’s happening in real time now?

Dan: Well, I think the general approach they’ve taken of observing the situation and finding their opportunities where they want to push themselves forward or not, but not feeling compelled to push themselves forward to take a leadership role everywhere means that they can evaluate this chaotic environment and they can at least believe that they have some time to adapt to it without having to do rapid change to how they approach the world. And we haven’t seen them take huge changes to how they approach the international environment. They’re relatively consistent even while the world is changing around them.

Read more

This week’s episode features audio from a day-long conference hosted by the Institute for America, China, and the Future of Global Affairs (ACF) at Johns Hopkins SAIS, held on April 3rd in Washington, DC. The conference, titled “The China Debate We’re Not Having: Politics, Technology, and the Road Ahead,” brought together a wide range of scholars, former officials, and analysts to interrogate some of the foundational assumptions underlying US policy toward China — a conversation I found compelling enough to share directly with Sinica listeners, with the full blessing of the organizers.

You’ll hear two segments in this episode.

Opening Remarks — Jessica Chen Weiss

ACF’s inaugural faculty director Jessica Chen Weiss opens the conference by framing its central provocation: that much of the prevailing US policy discourse assumes an intrinsically zero-sum competition with China, and that this assumption has not been adequately examined. She argues for a more rigorous, evidence-based conversation — one that takes seriously the possibility that American and Chinese interests are competitive but not necessarily adversarial, and that may even leave room for complementarity in some domains. She previews the day’s three thematic sessions — on what China wants, what the United States wants, and the stakes of technological and AI rivalry — and situates the whole enterprise in what she describes as a hinge moment in world history.

Session 1: What China Wants

Moderated by Demetri Sevastopulo of the Financial Times, the first panel takes up the deceptively simple question of what China is actually trying to achieve on the world stage — and whether its ambitions are as expansive as much US policy discourse assumes.

Jessica Chen Weiss argues that China’s core objectives remain relatively modest and sovereignty-focused: security, development, and legitimacy within an order long dominated by the United States. She pushes back on the idea that China is eager to assume the burdens of global leadership, noting that Chinese interlocutors are acutely aware of the domestic overextension that has constrained American power. Sevastopulo coins — with Weiss’s amusement — the term “China-first” to describe Beijing’s orientation.

Dan Taylor, drawing on his decades in the Defense Intelligence Agency, urges the audience to take Chinese leadership statements seriously rather than projecting worst-case intentions onto them. He notes that Beijing still sees itself as a developing nation with enormous domestic work ahead, and that its articulated goals leave considerable room for interpretation before one arrives at the conclusion that China seeks to displace the United States as global hegemon.

Arthur Kroeber adds an economic dimension, tracing how China’s export-driven model has generated massive global surpluses — and why the resulting tensions with trading partners are, in his view, a structural problem rather than evidence of strategic malice. He argues that much of what looks like geopolitical aggression is better understood as the consequence of an economic model operating at enormous scale with insufficient domestic demand to absorb its own output.

Shao Yuqun, speaking from her perch at the Shanghai Institutes for International Studies, offers the most pointed challenge to the panel’s relatively sanguine framing. She argues that the United States’ own behavior — erratic policy, withdrawal from multilateral commitments, and the disruptions of the Trump era — has itself destabilized the order that American strategists claim to be defending. She is measured but direct, and her presence gives the conversation a texture that too many Washington panels lack.

The discussion ranges across China’s Iran diplomacy, the prospects for a US-China summit, the question of whether Beijing is exploiting Trump-era tensions to deepen ties with traditional US allies, and — in a lively closing exchange — who the next generation of Chinese leadership looks like (with Kroeber’s deadpan answer, “Xi Jinping,” getting the biggest laugh of the session).

Guests:

• Jessica Chen Weiss, David M. Lampton Professor of China Studies, Johns Hopkins SAIS; Inaugural Faculty Director, ACF

• Dan Taylor, Adjunct Researcher, Institute for Defense Analyses; Senior Fellow, Johns Hopkins SAIS ACF

• Arthur Kroeber, Founding Partner, Gavekal Dragonomics

• Shao Yuqun, Director, Institute for Taiwan, Hong Kong & Macao Studies, Shanghai Institutes for International Studies

Moderator: Demetri Sevastopulo, US-China Correspondent, Financial Times

Remaining sessions from the conference — on what the United States wants, tech rivalry and competing visions of the future, and a fireside chat between Henry Farrell and Alondra Nelson on the AI race reconsidered — will be released over the coming weeks.