“Replacing a housing bubble with a factory bubble”

The Chinese Communists have set themselves up for failure

Friends,

The first piece this week is from The Daily, a podcast from the New York Times that dives into various topics. This episode from last Monday, the day the U.S. and the PRC announced their pause on tariffs, features Keith Bradsher, the Beijing Bureau Chief for the New York Times.

It is worth listening to as Bradsher describes a set of dynamics that the CCP has created for itself, dynamics that replaced an incredibly harmful housing bubble with an equally harmful factory bubble.

DALL-E generated image of a “factory bubble.”

For all the reporting and commentary, we’ve seen over the last week about how President Trump caved, or how the Chinese are in a really strong position because they have prepared for this trade war, I think Bradsher offers a helpful corrective.

[NOTE: Of course, both things can be true… the Trump Administration may not be well prepared for the negative effects its policies might have on the U.S. economy AND the PRC may be in an incredibly weak position, despite its outward efforts to portray strength and a mastery of technology innovation.]

China’s so-called “economic miracle” over the past three decades has created predictable vulnerabilities and weaknesses that the Chinese Communist Party has seen coming (its own economists have been warning about them for two decades) but has refused to address in any meaningful way.

Problem #1 – The CCP steals and hoards the wealth of Chinese citizens for its own purposes

The Chinese Communists have a grand project they are pursuing, what Xi calls the “Great Rejuvenation of the Chinese Nation.” This is an ultra-nationalist goal, which combines Han racial supremacy with techno utopianism and a huge helping of victimization.

Say whatever you will about the societal benefits of pursuing such a far-reaching national goal, there is one benefit that tops the list for the Chinese Communists: this goal justifies the continued leadership monopoly by the Chinese Communist Party. This goal has replaced 19^th and 20^th Century Marxist ideology as the rationale for why the Party’s elites “deserve” to be in charge. Chinese citizens aren’t allowed to question this goal, and they certainly aren’t allowed to replace the self-selected aristocracy of the Chinese Communist Party with individuals that might pursue a different goal (like leaders that wouldn’t steal the wealth of Chinese citizens).

This is a country that is captured by its elites. Those elites have created an economic system that takes wealth away from the lǎo bǎi xìng (the Chinese term for commoners) and puts that wealth at the disposal of the ruling elite (which in many ways, through princelings like Xi Jinping, is becoming a hereditary aristocracy).

When those ruling elites bet wrong or make poor investments, they aren’t held accountable and they can take more money from Chinese citizens to go on making poor investments.

By refusing to create a social safety net, by taxing consumption (not income or wealth), by controlling all aspects of society, and by building a legal system that puts citizens at the mercy of the State, the Chinese Communist Party has created a system that forces Chinese citizens to surrender their savings to the Party-State, so that the Party can fund itself.

The Party is a sophisticated parasite living off the wealth and productivity of the Chinese people.

Problem #2 – Chinese citizens aren’t confident about their futures

Chinese citizens are proud, and they are certainly attracted to an ultra-nationalist narrative that tells them they are superior to everyone else and have been unfairly victimized by foreigners. This creates latent support for the CCP. The Party bolsters itself with these narratives and employs enormous power to ensure that alternative narratives don’t take root.

But Chinese citizens aren’t dumb. They can see that the façade built by the Party is crumbling. The strides made between the 1980s and the 2010s are behind them. They know that the Party will save itself first and sacrifice them and their families. They can see that the Party has become an unaccountable aristocracy, more concerned with their own image than the welfare of their subjects. Therefore, Chinese citizens mouth the Party’s slogans, while they become increasingly pessimistic about their futures.

This wasn’t always so.

The twin crises of the pandemic lockdowns and the housing market collapse destroyed the confidence of the common man and woman. It destroyed the myth of Chinese technocratic competency. Chinese citizens see themselves as trapped within a rigged game run by increasingly inept technocrats who are terrified of being purged.

The Party is trapped in a cycle of diminishing returns. Building more apartments, more roads, more high-speed rail, and more factories is the only thing that the Party knows how to do, but “more” infrastructure and “more” factory production won’t solve the underlying problems, in fact it makes it worse.

This is why capital flight is such critical problem for the Party: if Chinese citizens could invest their savings in assets that would generate returns and be safe from being pilfered by the Party, then they would, en masse (see articles #5 (China detains small investors who spoke out about a major financial scam) and #39 (Bags of Cash from Drug Cartels Flood Teller Windows at U.S. Banks) for perspectives on this).

Problem #3 – The CCP has bet its future on an economic approach that requires the rest of the world to surrender

About halfway through the podcast episode, Bradsher makes a great point: the Party has replaced a housing bubble with a factory bubble and this is unsustainable.

In an effort to mitigate the huge losses from the collapse of the Chinese housing market, the Party doubled down on building an economy that serves as the global hub for nearly all manufacturing. This is an effort to dominate both low-end and high-end manufacturing and it depends on the rest of the world following rules that the PRC refuses to follow. It means the rest of the world has to open its markets to Chinese exports and not erect barriers that protect their own industries. It means that the rest of the world has to accept dependencies on China, that China refuses to accept for itself.

In essence, it is an economic and geostrategic approach that is autistic.

It is an approach that assumes others won’t respond and protect their own interests when the PRC acts selfishly.

In many ways, Donald Trump and his policies are the logical reaction to nearly a quarter century of harmful economic behavior by the Chinese Communist Party.

Problem #4 – Resolving these problems requires political reform, not economic reform

None of the problems I described above are new to the Chinese Communist Party. They have studied these issues, they have developed plans for how to mitigate and resolve the contradictions hammering the Chinese economy and society. They have even begun massive economic reform initiatives, like the economic reforms started after the Third Plenum of the 18^th Party Congress in November 2013.

Unfortunately, for the Party, the problems China faces aren’t economic, they are political.

The political system established by Deng Xiaoping in the wake of the disaster that was Mao Zedong, was created to rescue China from horrendous self-inflicted wounds. That political system, which invested a small group of conservative Party elites with power to control the country and make economic decisions, made sense for the problems facing China in the 1980s and 1990s. This small group of Party elites needed to harness the limited wealth of the country and direct those resources at things that would build up the country’s infrastructure and capacity.

China no longer faces those same challenges, so a political system in which a small cabal makes all the decisions is ill-suited to the country’s current problems. It doesn’t matter how many leading small groups Xi creates or the technocrats he promotes, the problems they face are structural.

What is needed now is a decentralization of decision-making and control, yet Xi is devoted to making himself the Chairman of Everything and views every problem as a nail to be hammered by the tool of Party-building.

CCP leaders likely know they have this problem (let’s call it the “Problem of Xi”), but they face two interrelated obstacles: 1) a dozen year long anti-corruption/rectification campaign to purge those who aren’t loyal to Xi; and 2) the fear that modest political reforms could unleash a revolution.

Challenging or even questioning Xi in anyway will end up with discipline inspection thugs at your door, the confiscation of family wealth, and perhaps a lengthy prison sentence or the death penalty. So best to keep quiet and trust in Xi.

But even if a critical mass of Party elites could come together and hold Xi accountable, they know what might happen. Once a monopoly ruling party starts to loosen its grip on power and accept even modest political reforms, it is hard to hold back the flood waters. Its grip on other elements of power then starts to weaken and individuals across the Party-State apparatus act in their own interests, not in the interests of the now diminished ruling party.

The CCP knows all about these dynamics. They have studied in detail what happened to the Communist Party of the Soviet Union (CPSU) when its leader, Mikhail Gorbachev, tried to implement political reforms called Perestroika. Xi Jinping’s own inaugural address to the Central Committee upon taking power in January 2013 was devoted to warning about the dangers of “political reform” and the necessity to maintain a guiding ideology of unwavering faith in the Party Leader.

The Party’s only hope is to ‘fake it till you make it’… a topic I covered in March in a post with that title (Fake it till you make it: The CCP's 2025 Government Work Report, March 9, 2025).

Throw the bums out!

In a “normal” country where citizens hold their leaders responsible, once a ruling party becomes ineffectual, the logical response is: “throw the bums out!”

This isn’t weakens or chaos, it is a sign of a robust society that can self-correct.

This is why countries have routine elections and separate powers among different groups and individuals, it is the safety valve to handle age-old human problems. Checks and balances, constitutionalism, and limited government are solutions to the problems that automatically arise when one group of humans governs another group of humans.

However, the Chinese Communist Party explicitly rejects these solutions because accepting them would force the Party to be accountable to its own citizens. And given the failures of the Party over the decades, they know that they would be shown the door (or worse).

To convince Chinese citizens that they should NOT push for these solutions, the Party portrays them as alien to China (it is why the democratic movements in Hong Kong and the democracy in Taiwan is so terrifying to the Party as it demonstrates that Chinese people can be prosperous without the Party’s monopoly hold on power). The Party portray checks and balances, constitutionalism, and limited government as Western/foreign plots to weaken and divide China (see Document Number 9, April 2013). This fits into the ultra-nationalist, Han-supremacist, and victimization narrative that we covered earlier under the Party’s goal of the “Great Rejuvenation of the Chinese Nation.”

Under this logic, for China to achieve its rightful place at the top of the global order, the re-establishment of the proper hierarchy of an imagined “tributary system,” it must reject foreign political ideas and pursue a uniquely “Chinese” path, which can only be defined by the leadership of the Chinese Communist Party.

Sino-American trade negotiations

So, what does all this mean for the practical concerns facing investors, business leaders, and diplomats around the world who turn to this Substack each week for some insight and commentary? (at least that’s why I hope you keep coming back!)

Well, I think it means that despite the rhetoric, we are unlikely to see an actual resolution of the Sino-American disputes. The interests pursued by both sides are contradictory and hardwired in.

Contrary interests

PRC Interest: Ever-rising exports – Chinese leaders intend to mitigate their domestic problems by ever rising exports across nearly every market sector. Essentially, the Party wants to export its problems to the world so that it can avoid making difficult domestic political reforms. It is pursuing this export-dependent strategy for a couple of reasons. First, the Party is stuck in an economic model which privileges building infrastructure and gaining market share above wealth generation for individuals. Second, the Party believes that dominance of manufacturing and technology will give it power to reshape the global order in ways that benefit the Party. Third, the only way to pay for the massive investments in building all these new factories is to sell those goods in other markets. And fourth, the Party is unwilling to treat the Chinese people as citizens who can hold their leaders accountable and wants to continue to treat them as subjects whom they control.

U.S. Interest: Accept fewer imports, particularly from China – U.S. is saying that it refuses to be the main market for ever rising Chinese exports. The country’s leaders (both Republican and Democratic) want to produce more goods in the United States with American labor for American consumers. This isn’t just a Trump or MAGA goal, it was the goal pursued by the Biden Administration (see Treasury Secretary Janet Yellen’s constant criticisms Chinese overcapacity, the Buy American provisions in the Bipartisan Infrastructure Act, the CHIPS Act, and the Inflation Reduction Act, etc.)

To achieve the outcome Beijing wants, the United States (and just about every other country in the world) must be willing to substitute Chinese manufactured imports for those goods that are produced in other countries AND those goods that are produced domestically.

This is an unachievable goal… and if Beijing continues to pursue it, they will only encourage other countries to resist more, making their own domestic problems worse.

This will be hard for many to internalize, but President Trump is NOT the one destroying the global trading system. The Chinese Communist Party has already done that.

The Party refuses to accept and deal with the costs of its own political and economic problems. Instead, the Party seeks to export these costs to the rest of the world as a way to protect their position as an elite aristocracy.

***

On a tangential note, for those who are concerned that we are on the verge of AI taking over the world, I recommend subscribing to Gary Marcus’ Substack called Marcus on AI. His piece from this week on LLMs and what should be a straightforward task, should make folks revived that humans won’t be obsolete any time soon.

• ChatGPT Blows Mapmaking 101: A Comedy of Errors

  Gary Marcus, Marcus on AI, May 12, 2025

As usual, if you find this newsletter helpful, please consider supporting with a paid subscription.

Thanks for reading!

Matt

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MUST READ

1. AUDIO – A Vulnerable China Comes to the Table

   Keith Bradsher and Natalie Kitroeff, The Daily, May 12, 2025

Over the weekend, top negotiators from the U.S. and China met for the first time since President Trump rapidly escalated a trade war between the world’s two economic superpowers.

Keith Bradsher, the Beijing bureau chief for The New York Times, discusses the pressures facing China, as it came to the negotiating table and why it so badly needs a deal.

Over the weekend, the US and China met for the first time since President Trump rapidly escalated a trade war between the world’s two economic superpowers. The negotiations could have huge implications for a global economy rocked by Trump’s tariffs. Today, my colleague, Beijing Bureau Chief Keith Bradsher, on the pressures facing China as it came to the negotiating table and why it so badly needs a deal.

It’s Monday, May 12.

Keith, it’s nice to have you back on the show.

Keith Bradsher – Thank you, Natalie. Good to be back.

Natalie Kitroeff – So, we on the show have talked quite a bit about the impact of tariffs on the US economy. We’ve talked less about the impact of tariffs on China’s economy. And as we enter what seems like potentially a new phase in this trade war where the two sides are talking to one another, it seems important to understand something you’ve been reporting on, Keith, which is that the tariffs present a real nightmare scenario for China. Tell me about that.

Keith Bradsher – President Trump by early April had raised tariffs on goods from China to 145 percent. That stopped all but the most essential imports coming in. Why was this terrible timing for this to happen to China right now? It was because China is already struggling with several severe economic problems. The biggest of them is the housing market crisis.

Apartment prices have plummeted 30 percent, 40 percent, in some cases, some cities, 50 percent drops in apartment prices since the high of the bubble in 2021. So this has been a huge blow to the household finances of people in China. In turn, they’ve stopped spending money on consumer goods, and the tax revenues of the Chinese government are also way down. So they’ve got a huge budget problem.

So when you’ve got a property crisis and an emerging budget near crisis, that’s a very bad time to have a trade war.

Natalie Kitroeff – It’s interesting. I think that analysis, that reality is going to come potentially as a real surprise to a lot of our listeners, because the last time we had you on the show, we were talking about what a powerhouse China was, what an exporting superpower this country had become. And what you’re saying is that domestically, the economy doesn’t actually look quite that strong.

Keith Bradsher – That’s exactly right. This is an economy built for exports, built for manufacturing dominance, built for maximizing production. But it’s not a good economy at consuming. It’s not a good economy at having a population that is able, willing, eager, even like many Americans, to spend money and have a better life.

So what ends up happening when you have this enormous excess of production, it has to be exported or the whole system gets in bigger trouble. Basically, China over the last four years has made an enormous bet that it can dominate world markets in practically everything for manufactured goods. That only works as a strategy if you can export.

So that is why, even though the Chinese economy now leads the world in installations of new factory robots, leads the world in the quality of the infrastructure, it leads the world in many categories of economic strength, but it has an enormous dependence on exports.

Natalie Kitroeff – Right, 145 percent tariffs slapped on your goods by the world’s largest consumer economy will make a bet on exports look a little risky, especially if your people aren’t buying things. So let’s get into that, Keith. Why is that? Why is China not a good economy for consumption, as you put it.

Keith Bradsher – For starters, China has a tax system that is based heavily on taxing consumption, not so much on taxing income. The burden instead hits you when you try to buy anything. So they have a national value added tax. It’s like a kind of sales tax that is twice as high as the typical sales tax in the United States and covers practically everything, whether you want to buy a car, whether you want to buy a washing machine, or even there’s a heavy tax on paying your rent.

Natalie Kitroeff – Wow.

Keith Bradsher – So these high consumer taxes are discouraging people from spending money. But this is not just about taxes. Even more important is that China has a very modest, threadbare social safety net. The pensions, the equivalent of Social Security in the United States, are tiny. The unemployment insurance is very modest, and a lot of people don’t qualify. And they actually cut back further the number of people who qualified the moment the COVID pandemic ended to make sure that they went back to work immediately.

Natalie Kitroeff – It’s a little confusing, Keith. This is the Communist Party of China, right? I mean, no welfare programs, no social safety net? How do you square that?

Keith Bradsher – Not much of a social safety net. There was actually even a discussion 25 years ago in the Communist Party of China on whether to drop the word Communist, and they decided to keep it. They decided it had a lot of historical resonance for them. But this is really a very strongly capitalist system now.

For example, when I mention to people in China that there is rent control in some American cities, they are stunned. The idea that any government agency would tell somebody who owns an apartment how much they can charge to rent that apartment out is startling to them. And they say, that’s socialism, somewhat jokingly, to me.

Natalie Kitroeff – The Chinese calling the Americans socialist is just wild to imagine.

Keith Bradsher – And yet it’s really the sentiment. That’s exactly right. Xi Jinping has denounced what he calls welfarism, which he says might erode the work ethic of the Chinese people. What he said in a speech four years ago was, quote, “Even in the future, when we have reached a higher level of development and are equipped with more substantial financial resources, we still must not aim too high or go overboard with social security and steer clear of the idleness-breeding trap of welfarism.”

Natalie Kitroeff – Whoa.

Keith Bradsher – And because there is very little in the way of social safety net, people in China save a lot. In fact, they save more than anyone else in the world. The savings rate is around 40 percent, saving $2 out of every $5 of their paychecks.

Natalie Kitroeff – That’s a lot.

Keith Bradsher – That is a tremendous amount. And the United States is 4 percent or less.

Natalie Kitroeff – So the Chinese are just saving a ton, in part because there’s just very little social safety net, and they’re not spending that much, in part because of these really high sales taxes. What are they doing with all the money they put away?

Keith Bradsher – Well, people in China really don’t have as many options as savers in most of the rest of the world. The stock market is very risky and full of dodgy companies. The Chinese government puts very stringent limits on their ability to invest outside of China. And so the alternative has been real estate. The result was that people in China put far, far more of their savings into real estate than in most countries.

Natalie Kitroeff – OK, here’s where housing comes in. You mentioned there was this huge housing crisis. Where does that story start?

Keith Bradsher – If you went all the way back to the 1980s, people in China were living in very small apartments, typically. There was a tremendous shortage of housing. Starting in 1987, China began experimenting on transferring land to private developers and having them begin to build apartment buildings and sell them to the public. And then in 1998, the government transferred millions of apartments from state owned enterprises and local governments to the people who were living in them for almost nothing. That created a very large market.

And so then by the early 2000s, you had a completely new housing market like nobody had seen before. The local governments were selling enormous amounts of land each year to developers, and the revenues from that were immense. And that was what paid for the terrific roads, bridges, highways, high-speed rail, ports. And the developers were putting up 30-story apartment buildings as far as the eye could see.

Hundreds of millions of people benefited greatly. The number of square feet per person in apartments in Chinese cities quadrupled. All of a sudden, you didn’t have to have three generations crammed into a small apartment.

But after meeting a lot of those housing needs, this turned into a speculative mania that got out of control.

Natalie Kitroeff – How so?

Keith Bradsher – I’ll give you an example. I know a sales manager at a small furniture factory who, even though she earns a modest salary, has ended up buying five apartments. How do you end up with five apartments? I asked her when I first met her. On a small salary?

And the answer was she bought one. It went up. She sold it and bought two. They went up. She sold one of them. Bought two. Little by little, she ended up with five apartments, all of them with mortgages. So I said to her, what is going to happen if apartment prices go down?

Natalie Kitroeff – And what did she say?

Keith Bradsher – She said, I don’t have to worry about that. The price will always go up.

Natalie Kitroeff – Wow. That’s a bet.

Keith Bradsher – Well, it was a bet that worked. From the late 1980s, the price always went up. The final skyward jump in real estate prices began in 2016. The banks in China were told by the government essentially, give a mortgage to practically anybody with a pulse. We’re doubling down on construction. We want everybody buying apartments, and the housing market just went nuts.

Natalie Kitroeff – It sounds like people poured their money into the real estate market, because it was really the only option they had to get a return. And the government is making it a lot easier to get a loan. And that creates this bubble, this classic real estate bubble. So when does that bubble burst?

Keith Bradsher – It began to burst in 2020 and 2021, when stricter rules started to be put on these real estate developers who were taking big deposits from many families and using that money not to build the building that they promised for the deposits, but to finish the previous building they’d promised somebody else.

It was becoming, in some ways, even a Ponzi scheme. The government finally got concerned about this. It began imposing tighter and tighter borrowing and spending rules on the developers. And by the second half of 2021, real estate prices were falling quickly, and many of the real estate developers were starting to collapse.

The real estate collapse has been devastating for families across China. In fact, people don’t even really want to talk about it, it’s so painful for them. Chinese families had twice as large a share of their household net worth in real estate as in the United States, so they were really heavily, heavily invested. They didn’t have much else. It was all in apartments. And then the apartment prices have gone down faster in China than they did in the United States during the 2008 to 2009 real estate crash. So the total losses on apartment value in China are now twice as big as they were in the United States in 2008-2009.

Natalie Kitroeff – Wow.

Keith Bradsher – And this is coming out of the savings of a country that’s not as prosperous as the United States. So to lose twice as much of your savings is just devastating.

Natalie Kitroeff – It’s amazing to think, Keith, that this had an even more damaging effect than the US housing crisis did in America. I mean, we think of that as one of the worst moments economically in this country in recent history. What’s the government’s response in China?

Keith Bradsher – The government’s response has been to shift the priority of government lending away from real estate and towards building lots of factories. The government’s goal is to create a lot more jobs, which they want to offset the loss of jobs in the construction sector. And their hope is that if people have well-paid jobs in the factories, they will begin to have the confidence to spend again.

Natalie Kitroeff – And does it work? I mean, do the factory jobs make up for all the losses in the housing sector.

Keith Bradsher – The very, very heavy lending by the state-controlled banking system to build more factories and other industrial sites has helped some. A minority of all workers in China are factory and other industrial workers, and they have benefited. But for the rest of the country, they’re not benefiting.

Demand is weak. If you go to hotels, the hotels are mostly empty. The restaurants are closing. So workers across the rest of the economy aren’t doing very well out of all of this. And so the Chinese government’s strategy has been to double down on building even more factories for exports. And many of these factories have not yet been finished.

In many ways, it looks as though they have replaced a housing bubble with a factory bubble.

Natalie Kitroeff – Wow.

Keith Bradsher – China is now trying to save itself, trying to save its economy by ramping up exports to the rest of the world. And that has real consequences for any other country with a manufacturing sector, whether it’s Brazil or Mexico or Germany or Japan or South Korea or the United States.

COMMENT – Much of the analysis and reporting on the trade negotiations between Beijing and Washington has focused on the American side of the debate and has portrayed the Chinese as cool, with all kinds of leverage to wait out President Trump and his team.

This reporting by Keith Bradsher, the New York Times’ Beijing Bureau Chief, provides a very different perspective.

Explaining just how damaging the US effort to restrict Chinese imports could have been (and still could be) and how vulnerable the PRC is to this kind of pressure given some absolutely terrible economic decisions over the past two decades.

In particular, I think Bradsher’s remark about replacing a housing bubble with a factory bubble is spot on.

If Europe was willing to pay the kind of hardball with Beijing that Washington is willing to do, the Chinese Communists might actually be forced to make some structural changes.

2. Germany’s new chancellor to pursue ‘strategic de-risking’ from China

   Finbarr Bermingham, South China Morning Post, May 15, 2025

With ‘international order changing profoundly’, Friedrich Merz says China’s relations with Russia are an area of ‘great concern’.

Germany’s new chancellor, Friedrich Merz, said on Wednesday that his country’s ties with China are being “shaped by systemic rivalry and power politics”, in a first major speech to the Bundestag that suggested a tougher approach that would press Beijing to be more accountable on geopolitical issues.

Merz, a conservative who took up the role as chancellor last week, flagged China’s relations with Russia as an area of “great concern” and said he would pursue “strategic de-risking” with the world’s second-largest economy.

“We observe that in China’s foreign policy actions the elements of systemic rivalry are on the rise,” Merz said.

“We will push determinedly for China to make its contribution toward ending the war in Ukraine,” Merz said.

“We will embed our China policy in a regional approach. A stable, free and secure Indo-Pacific is for Germany and for the EU of great strategic importance.”

China, Merz said, would “remain an important partner of Germany and the European Union” on global challenges, but he would still “push assertively for the respect of agreed rules in the areas of industrial and trade policy”.

“As part of a strategic de-risking, we will continue to reduce one-sided dependencies,” he added, referring to the EU goal of cutting its overreliance on China for crucial commodities and products.

“The international order is changing profoundly. It is being shaped by systemic rivalry and power politics. We have learned that we need to diversify our supply chains and reduce one-sided dependencies,” Merz said.

Merz’s remarks came a week after European officials warned that Chinese President Xi Jinping’s recent trip to Moscow cast a shadow over Beijing’s courting of Europe.

With the coalition German government that Olaf Scholz had led hampered by infighting, Berlin’s influence on the EU’s China policy waned in recent years.

It strongly opposed, for example, the bloc’s biting tariffs on Chinese-made electric vehicles last year, but was unable to exert enough influence to stop them being signed into law.

COMMENT – Imagine where we would be today had Olaf Scholz pursued this kind of policy aggressively back in 2022 when Beijing threw its full support behind Moscow?

The world’s liberal democracies might have actually gotten their acts together, taken collective security seriously, and demonstrated that they could act in unison.

Instead, we got foot dragging from Berlin, which made both Moscow and Beijing confident that they could drive wedges between their adversaries and ultimately prevail in overturning the international order.

And more importantly, Scholz convinced many Americans that Germany (and Europe writ large) was an irresponsible ally who demanded that U.S. taxpayers go further into debt to defend Europe, even as Europe refused to fulfill its defense obligations to the alliance and pursued economic cooperation with America’s rivals.

Let’s hope it is not too late to turn this around.

Let’s hope Merz is better at follow through than his ineffectual predecessor.

Let’s also hope that Berlin doesn’t revert to status quo ante (ref Moscow and Beijing) if the U.S. is successful in negotiating an end to the conflict in Ukraine.

3. Trade with Communists Should Be Uncertain
   Oren Cass, Understanding America, May 13, 2025

Businesses are not supposed to have confidence that they can profit in China.

The importance of granting China “Permanent Normal Trade Relations” (PNTR) in 2000 lay in the “permanent,” not the “normal.” The United States had already opened its market to China on a provisional basis, but that favorable treatment required annual renewal by Congress. The uncertainty created by that temporary status, by Congress’s reluctance to go further, and by what all that implied about China’s stability and reliability, discouraged investment in the Chinese market and mass offshoring of production. Only after President Clinton affixed his signature to the United States–China Relations Act of 2000 did the floodgates open.

The arrival of certainty for investors brought with it equal measure of uncertainty for workers and their communities, as jobs vanished by the millions. This, lectured the economists, was “creative destruction” and a necessary process in the march of progress. Workers could adapt and move into new, more productive jobs. If some deindustrialized regions depopulated as well, it was the latest manifestation of the great American tradition. The Joads had moved too. We are now in the midst of a reckoning with those failures of judgment.

And yet, with the shoe now lodged firmly on the other foot, we are hearing less about the wonders of disruption and dynamism. Livelihoods destroyed by sudden shifts in the economics of trade with China apparently build less character in business owners, for whom just rebuilding from scratch in some new line of work is apparently much harder than for the typical machinist with a family to feed. On one hand, such parallels might seem churlish. How could investors anticipate the chaos unleashed by the Trump administration’s efforts at reordering the global economic system? On the other hand, the parallels might almost be too kind. Workers had no way to know what was coming with globalization; indeed the experts had promised them the opposite. Businesses could, and should, have anticipated an expiration date on the China gravy train. (Do gravy trains expire?)

COMMENT – Amen!

It is time to end PNTR.

4. ‘No Marriage, No Children’ Is China’s Ticking Timebomb
   Lucille Liu, Bloomberg, May 8, 2025

China’s falling marriage rate is exacerbating a demographic crisis in the world's second-largest economy, as Beijing's pro-natalist policies fall flat.

For almost two decades, Abby Gao has been planning weddings in China. She smiles fondly as she recalls once booking 58 luxury cars, including Rolls-Royces and Lamborghinis, for a single motorcade. Or the time she filled a wedding venue with 35,000 roses. She remembers the countless bottles of premium Moutai liquor, retailing for the equivalent of hundreds of dollars each, that she would carefully place at the center of banquet tables.

Today, the 39-year-old has diversified into children’s birthdays, forced by plummeting demand for weddings.

“It’s dropped off a cliff,” said Gao, whose Beijing-based business only had about 100 wedding clients last year, down from a peak of almost 2,000 in 2012. “Young people now put their own happiness first, and that doesn’t always mean marriage.”

Marriages in China have been falling for most of the past decade and last year plunged almost 21% to a record low — compounding a demographic crisis that’s threatening the world’s second-biggest economy.

Traditionally, few children are born out of wedlock in China due to social stigma and a historical requirement to provide a marriage certificate to register newborns so they are eligible for public services. While some provinces are beginning to relax such rules, the fertility rate continues to fall and China’s population has declined for three consecutive years — challenging future growth and leaving a smaller workforce to support a rapidly aging population.

Policymakers are worried. President Xi Jinping has called for stronger guidance to shape young people’s views on marriage, parenthood and family, while state-run media has suggested universities should offer “love education” to help students overcome “vague understandings of emotional relationships.”

The government has sought to incentivize marriage through subsidies, reduced paperwork and encouraging more reasonable dowries. Since ditching the one-child policy in 2016, Beijing has also rolled out a raft of pro-natalist initiatives to encourage couples to have more kids, including cash handouts and extended maternity and paternity leave.

Despite government endeavors, an increasing number of young Chinese espouse what they call the “no marriage, no children” philosophy. That’s driven in part by an economic slowdown, with people put off by the cost of weddings and the accompanying expectations of home ownership or gifting large sums of money to the bride’s family. Social factors are also at play as some younger Chinese reject the nation’s paternalistic culture and conservative views on a traditional, domestic role for women.

“China’s falling marriage rate appears entrenched,” said Bloomberg Intelligence analyst Ada Li. “Younger people of marriageable age are increasingly opting out, citing high costs, high youth unemployment, a sluggish economy and growing skepticism toward traditional ties.”

COMMENT – Marriage rates have plunged by over 20% to a record low, that is a sign that Chinese citizens are not confident about the future.

5. China detains small investors who spoke out about a major financial scam
   Radio Free Asia, May 13, 2025

Authorities accused investors in Shandong province who spoke to the media of “being used by overseas anti-China forces.”

Dozens of ordinary Chinese investors who lost their money after the collapse of a state-backed financial services group in eastern China’s Shandong province have been detained by authorities for drawing attention to the issue through foreign media and for “being used by overseas anti-China forces,” two sources told Radio Free Asia.

Last month, several investors among the nearly 100,000 impacted by a purported 20 billion yuan (or US$2.74 billion) financial scam linked to Shandong province-based Jianghaihui Group spoke with international media outlets, including RFA, hoping to create global awareness about the scandal and prompt corrective action.

Sources on Wednesday told RFA that Chinese authorities had detained many of these investors, accusing them of “being used by overseas anti-China forces,” after they gave the interviews to journalists and shared news articles about the scandal in social media groups or privately.

One of the sources said that more than a dozen depositors in several cities in Shandong province, including Weifang and Zaozhuang, have been placed under administrative detention by local police in recent days.

“All the people who had contacted you (RFA) from here were detained,” said the first source named Wang, who is one of the female investors affected.

“They (the police) said we (victims) were being used by international anti-China forces and that we were all committing crimes,” she added.

Wang, like the other sources RFA interviewed, provided only their surname for security reasons.

6. TRANSLATION – New White Paper: “China’s National Security in the New Era”

   Andrew Erickson, May 12, 2025

China’s State Council Information Office (SCIO) just posted a white paper titled “China’s National Security in the New Era.” The English notification and abstract are below; followed by a very rough English-language translation and the full text in the original Chinese.

7. China Tariffs: Where Are We Now?

   Noah Berman, The Wire China, May 15, 2025

President Donald Trump has taken China tariffs on a roller coaster ride since returning to office. Here’s where they’ve landed.

Donald Trump had a message for the world as American trade negotiators met their Chinese counterparts in Switzerland last weekend. “Many things discussed, much agreed to,” Trump wrote on social media on Saturday. “A total reset negotiated in a friendly, but constructive, manner.”

The president, it turned out, was hardly exaggerating. By Monday, the United States and China had agreed to drop their respective tariffs on each other by more than 100 percentage points. The baseline U.S. levy on Chinese goods is now around 30 percent; China’s on American imports is around 10 percent.

The temporary reductions — they are technically a 90-day pause — end an effective embargo on bilateral goods trade that the previous tariff level had imposed.

However, the U.S. consumer still faces the highest overall average tariff rate since before World War II, according to the Yale Budget Lab; no country faces higher rates than China.

“We are not back to where we started on January 1st,” says Mary Lovely, Anthony M. Solomon senior fellow at the Peterson Institute for International Economics. “Are [high tariffs] the new normal? There is a good chance they are.”

And while the tariff rate cut on Chinese goods this week is huge, the levy will still be prohibitive for some industries, Lovely notes. Some products remain subject to duties that stack on top of the baseline 30 percent rate, a result of separately imposed tariffs intended to protect specific American industries.

U.S.-based importers of Chinese aluminum, for example, will still be paying at least 50 percent of the good’s value in the form of tariffs. Products that previously entered the United States under the so-called de minimis exemption, which allowed goods worth under $800 to enter duty-free, also face a rate greater than 50 percent — or a $100 fee. Meanwhile, Trump has largely spared electronic goods like laptops from the whipsaw.

To be sure, the U.S. and China had imposed significant tariffs on each other before Trump took the trade war into high gear last month. Average U.S. tariffs on China and average Chinese tariffs on the U.S. each totaled 21 percent before Trump resumed office, according to Chad Bown, an economist at PIIE.

8. China Gave Pakistan Satellite Support, Indian Defense Group Says

   Sudhi Ranjan Sen and Dan Strumpf, Bloomberg, May 18, 2025

China provided Pakistan with air defense and satellite support during its clash with India this month, according to a research group under India’s Ministry of Defence, suggesting that Beijing was more directly involved in the conflict than was previously disclosed.

China helped Pakistan reorganize its radar and air defense systems to more effectively detect India’s deployments of troops and weaponry, Ashok Kumar, director general at the New Delhi-based Centre For Joint Warfare Studies, said in an interview.

COMMENT – Not surprising to anyone.

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Authoritarianism

9. All the President’s Generals
   Eliot Chen, The Wire China, May 10, 2025

10. This Is the Trade Conflict Xi Jinping Has Been Waiting For
    David Pierson, New York Times, May 10, 2025

11. China and Russia are deploying powerful new weapons: ideas

    The Economist, May 15, 2025

12. 3 independent publishers barred from participating in Hong Kong Book Fair
    Irene Chan, Hong Kong Free Press, May 12, 2025

13. China Tightens Control Over AI Data Centers

    Qianer Liu, The Information, May 15, 2025

14. Father of wanted Hong Kong activist Anna Kwok denied bail on nat. sec grounds
    Kelly Ho, Hong Kong Free Press, May 8, 2025

15. Hong Kong police take in relatives of wanted activist Joe Tay for questioning
    Hong Kong Free Press, May 8, 2025

16. Hong Kong pro-China informer: 'Why I've reported dozens of people to police'
    Bridget Wing and Georgina Lam, BBC, May 9, 2025

17. Chinese Journalists Grapple with State Intervention, Commercialization, Budget Cuts, and Burnout
    Arthur Kaufman, China Digital Times, May 13, 2025

18. Hong Kong man jailed for 1 year over ‘seditious’ online posts targeting police, judges, gov’t
    Kelly Ho, Hong Kong Free Press, May 8, 2025

19. China’s Russia Strategy After the Xi–Putin Meeting: Depersonalize, Institutionalize, Insulate

    China-Russia Report, May 11, 2025

Beijing is reframing the China–Russia relationship around political systems, "traditional friendship" and historical memory. It’s a hedge against a post-war reckoning in Moscow.

20. Censored Statistics, Deleted Data Muddy the Waters
    Arthur Kaufman, China Digital Times, May 13, 2025

21. Rogue communication devices found in Chinese solar power inverters

    Sarah Mcfarlane, Reuters, May 14, 2025

U.S. energy officials are reassessing the risk posed by Chinese-made devices that play a critical role in renewable energy infrastructure after unexplained communication equipment was found inside some of them, two people familiar with the matter said.

Power inverters, which are predominantly produced in China, are used throughout the world to connect solar panels and wind turbines to electricity grids. They are also found in batteries, heat pumps and electric vehicle chargers.

22. Taiwan TV drama to give public a visceral vision of war with China
    Kathrin Hille, Wall Street Journal, May 9, 2025

23. Taiwan's Lai urges 'non-red' supply chain to counter 'unfair' China trade
    Thompson Chau, Cheng Ting-fang And Lauly Li, Nikkei Asia, May 13, 2025

24. Hong Kong’s CK Hutchison assures ports deal not to proceed under ‘unlawful or non-compliant circumstances’
    Kelly Ho, Hong Kong Free Press, May 13, 2025

25. China touts Labor Day tourism surge, but netizens say otherwise
    Radio Free Asia, May 8, 2025

Chinese netizens question official data of a boom in consumption activity during China’s five-day May Day holiday.

China reported a surge in the number of tourists and strong consumer activity during the five-day Labor Day holiday, but netizens have taken to Chinese social media to question the accuracy of the data, citing multiple economic pressures and a decline in exports.

China’s Ministry of Transport data showed total cross-regional passenger traffic averaged 293 million trips per day, up 8 percent from a year ago, while sales of major retail and catering businesses were up 6.3 percent during the holiday, the state-run Global Times reported.

“The twin boom in travel and consumption not only ignited the holiday economy but also revealed the depth and vast potential of China’s economic development,” a Global Times editorial on May 5 said.

Contrary to Chinese state media reports, sources in the region said the overall consumer sentiment and market environment during this year’s May Day holiday was far worse than before.

Once-bustling shopping venues were devoid of their usual volume of eager shoppers, while cost-conscious travelers were opting for cheaper alternatives to get around, they added.

For example, the Baidu search index showed the search popularity of “green train” increased significantly during the May Day holiday, as many passengers sought the cheap but time-consuming mode of travel, instead of the more expensive but significantly faster high-speed rail option.

The reality of the middle and low-income groups “having holidays but no budget” is very different from Chinese state media reports of “boom in consumption,” say netizens.

Wuhan resident Zhang said shoppers were few when he visited the popular Wangfujing shopping complex on Zhongshan Avenue.

“(It) was empty and there were not many people ... The atmosphere is definitely not as good as before. Prices have gone up; even the price of medicine has gone up,” Zhang said.

COMMENT – Wait a second, are these folks suggesting that the Chinese Communist Party might lie about how well their economy is doing?!?

I wonder if it is possible that the Chinese Communists would also lie about other issues… like say how well they are doing at reducing their carbon emissions (even as they build more and more coal-fired power plants).

See the next article from the always naïve team at Carbon Brief.

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Environmental Harms

26. Clean energy just put China’s CO2 emissions into reverse for first time

    Lauri Myllyvirta, Carbon Brief, May 15, 2925

For the first time, the growth in China’s clean power generation has caused the nation’s carbon dioxide (CO2) emissions to fall despite rapid power demand growth.

The new analysis for Carbon Brief shows that China’s emissions were down 1.6% year-on-year in the first quarter of 2025 and by 1% in the latest 12 months.

Electricity supply from new wind, solar and nuclear capacity was enough to cut coal-power output even as demand surged, whereas previous falls were due to weak growth.

The analysis, based on official figures and commercial data, shows that China’s CO2 emissions have now been stable, or falling, for more than a year.

COMMENT – So the analysis that shows that the PRC is achieving its emissions reduction targets comes from data that the Chinese Communist Party “allows” to be released.

I’m going to go out on a limb and make a speculation: the PRC has NOT reduced its CO2 emissions; it has simply released manipulated data that shows that it has.

There are no independent media outlets who can investigate this in China, and no independent NGOs who can get ground truth in China, so there is no reason we should take Beijing at its word… particularly as it wages a massive propaganda campaign to portray itself to progressives in the West that China is a “responsible” player on climate issues.

27. The Looming Power of China’s Energy Megabases
    Jeremy Wallace, The Wire China, May 11, 2025

28. EV Battery Giant CATL Plans to Raise Around $4 Billion in Hong Kong Listing
    P.R. Venkat, et al., Financial Times, May 12, 2025

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Foreign Interference and Coercion

29. 3 Germans go on trial accused of spying for China by exporting military tech

    South China Morning Post, May 14, 2025

Three Germans went on trial on Tuesday, accused of spying for China by supplying it with information on hi-tech equipment with military use.

The defendants are a married couple identified only as Herwig F. and Ina F., aged 73 and 69, and another man, 60-year-old Thomas R., on trial in the western city of Düsseldorf.

The three were arrested in April of last year. The couple were provisionally released in October, while Thomas R. remains in custody.

30. China accused of foreign interference in Solomon Islands after minister quits international group

    Stephen Dziedzic and Chrisnrita Aumanu-Leong, ABC News, May 11, 2025

China's Embassy in Solomon Islands has become embroiled in a foreign interference controversy after allegedly forcing a newly appointed minister in the Pacific island nation to quit an international group pushing back against Beijing's growing global influence.

Rural Development Minister Daniel Waneoroa announced on Sunday he had left the Inter-Parliamentary Alliance on China (IPAC) — which draws in politicians from more than three dozen countries — saying he made the decision "in the interest of fostering stability and aligning with a collective national vision" under Solomon Islands Prime Minister Jeremiah Manele.

That drew a furious response from IPAC, which accused China of "bullying behaviour", saying Beijing had issued a "direct and shocking challenge" to the sovereignty of Solomon Islands.

Mr Waneoroa was only appointed Rural Development Minister 10 days ago.

Mr Manele offered him the position to coax him away from a broad coalition of MPs — including both government defectors and opposition MPs — which had coalesced to challenge the prime minister's hold on power.

In the end Mr Manele warded off the challenge by cobbling together a new majority in parliament, forcing his political opponents to abandon a motion of no confidence they were planning to issue in parliament last week.

But the flurry of horse trading also created a diplomatic headache for Mr Manele, because of Mr Waneoroa's position as one of two Solomon Islands "co-chairs" for IPAC.

The ABC has been told China was angered by Mr Waneoroa's position with IPAC, which maintains strong links with Taiwan and which has tried to build international pressure on Beijing over human rights abuses, including in Hong Kong and Xinjiang.

The group has previously accused China of resorting to threats and blackmail to stop MPs from several developing countries joining an international IPAC conference hosted in Taiwan in June last year.

31. Danish minister heads to China, days after Taiwan ex-leader's contested Denmark trip

    Reuters, May 15, 2025

Denmark's Foreign Minister Lars Lokke Rasmussen will travel to China on Saturday for high-level meetings, just days after a visit by former Taiwan President Tsai Ing-wen to Copenhagen drew strong condemnation from Beijing.

Rasmussen is due to meet China's foreign minister Wang Yi and trade minister Wang Wentao on a three-day visit marking the 75th anniversary of diplomatic relations between the two countries, a Danish foreign ministry statement said on Thursday.

COMMENT – Yet another reason why Americans are concerned about Denmark’s tenuous control over Greenland.

32. Two Taiwan allies attend Beijing forum as China steps up diplomatic pressure
    Liz Lee, Reuters, May 13, 2025

33. Hong Kong proposes new mechanism to allow Beijing to exercise jurisdiction over nat. sec cases
    Hong Kong Free Press, May 13, 2025

34. Hong Kong enacts update to local security law: Up to 7 years jail for disclosing nat. security probe
    Hong Kong Free Press, May 13, 2025

35. US Treasury examining Benchmark Capital’s ties to Chinese startup Manus AI
    Reed Albergotti, Semafor, May 9, 2025

The US Treasury Department is reviewing a Benchmark Capital-led $75 million investment in Chinese startup Manus AI, according to two people familiar with the matter, the latest example of an intensifying tech race between the two countries.

The Silicon Valley firm recently received an inquiry from the department into whether the financial backing is covered by new restrictions on investments in artificial intelligence and other key technologies that are destined for “countries of concern,” the people said.

The law, centered on the Outbound Investment Security Program, was part of a 2023 executive order signed by then-President Joe Biden, but did not go into effect until earlier this year. It requires any US entity or person to notify the Treasury Department of investments in key areas, such as AI, that could “accelerate and increase the success of the development of sensitive technologies” against US interests.

36. Former New Zealand Supreme Court judge set to join Hong Kong’s top court following exodus of foreign justices
    Hong Kong Free Press, May 9, 2025

William Young will serve as a judge at Hong Kong’s Court of Final Appeal (CFA) after he receives the Legislative Council’s endorsement, the government said.

COMMENT – Why on earth would a judge with his background legitimize what the Chinese Communist Party has done to Hong Kong?

37. Pro-Beijing Diaspora Group That Lobbied to Oust O’Toole Now Calls for Poilievre’s Resignation Amid PRC Interference Probes

    Sam Cooper, The Bureau, May 13, 2025

Call for Poilievre to step down follows pattern of strategic diaspora messaging amid national security scrutiny over foreign interference networks.

38. Ottawa Raises Alarm with Beijing Over Hong Kong Detention of CPC Candidate Joe Tay’s Family

    Sam Cooper, The Bureau, May 12, 2025

Global Affairs Canada stated it “deplores the decision by Hong Kong authorities to punish people for actions that amount to nothing more than freedom of expression.”

39. Bags of Cash from Drug Cartels Flood Teller Windows at U.S. Banks

    Dylan Tokar, Justin Baer, and Vipal Monga, Wall Street Journal, May 14, 2025

Chinese money-launderers allegedly made six-figure deposits at Chase, Bank of America and Citibank branches across Los Angeles County.

On a hazy Southern California morning, undercover police officers watched Jiayong Yu step out of a Range Rover in a strip-mall parking lot and walk into a Chase bank with a black-leather backpack full of cash.

At the teller window, Yu pulled out stacks of bills and waited while a woman fed them into a cash-counting machine. After Yu left, an officer asked the teller if he had deposited more than $10,000, the threshold requiring banks to flag transactions to federal regulators.

More like $100,000, the teller said. By then, Yu was already on his way to Chase and Bank of America branches in Claremont, Calif., about 35 miles away.

Federal authorities allege that Yu worked for an underground banking network that bought dollars at a discount from Mexico’s Sinaloa drug cartel and sold them at a premium, largely to Chinese nationals in the U.S.

The network allegedly handled some $50 million in proceeds from drug trafficking over four years, depositing a portion of the tainted cash at ATMs and teller windows at major banks including Citibank in cities around Los Angeles County, according to federal prosecutors.

Similar money-laundering operations operate in plain sight around the U.S., hiding the staggering returns which are the sole reason cross-border cartels smuggle the fentanyl, methamphetamine, cocaine and other illegal drugs consumed by millions of Americans, according to current and former law-enforcement officials and court records.

More than 80,000 people in the U.S. died from drug overdoses last year, a drop from 2023, according to estimates released Wednesday by the Centers for Disease Control and Prevention.

Chinese money-laundering operatives in some cases open dozens of bank accounts at multiple banks, using counterfeit passports to disguise their identity or recruiting local business owners and students. They charge traffickers 1% to 2% on the dollar, undercutting competitors.

COMMENT – Some pretty terrible stuff.

40. Vain and preposterous attempts: India rejects China's bid to rename places in Arunachal Pradesh

    Telegraph India, May 14, 2025

India on Wednesday outrightly rejected as "vain and preposterous" China renaming some places in Arunachal Pradesh and said such attempts will not alter the "undeniable" reality that the state "was, is, and will" always remain an integral part of India.

New Delhi's reaction came in response to Beijing announcing Chinese names for some places in Arunachal Pradesh, which the neighbouring country claims as the southern part of Tibet.

COMMENT – “Vain and preposterous” two adjectives that seem pretty apt when describing the Chinese Communist Party and its current crop of leadership.

41. China Breaks Silence on Hamas Massacre, Opens Door to Strategic Partnership with Israel

    Tuvia Gering, Discourse Power, May 14, 2025

The [Chinese] ambassador [to Israel] finally issued China’s unambiguous, on-the-record condemnation of the October 7, 2023, Hamas massacre. 581 days later. The ambassador even wore the yellow ribbon for the 58 hostages still held in Gaza - also a first, as far as I remember.

The Ambassador said China is open to upgrading the Innovative Comprehensive Partnership with Israel to the strategic level.

COMMENT – I suspect Israelis won’t soon forget Beijing’s treachery over the past two years.

Here is Wang Yi last July hosting the leaders of the Palestinian Authority and Hamas as they sign an agreement of cooperation against Israel. Or the meeting that senior Chinese diplomats had with Ismail Haniyeh, Hamas’ political leader, in Qatar a few months before he died in an explosion in Tehran while attending the inauguration of the new President of Iran.

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Human Rights and Religious Persecution

42. Holy See: Agreement with China Should Promote Rights
    Human Rights Watch, May 9, 2025

43. Panchen Lama Forcibly Disappeared for 30 Years

    Human Rights Watch, May 15, 2025

China’s government should free the 11th Panchen Lama Gendun Choki Nyima and his parents, whom Chinese authorities forcibly disappeared on May 17, 1995, and who have not been seen for 30 years, Human Rights Watch said today.

The Panchen Lama and the Dalai Lama, Tibet’s religious leader, have historically played key roles in recognizing the other’s successor. As the current 14th Dalai Lama will celebrate his 90th birthday on July 6, the question of his succession—and the future of Tibetan Buddhism and the Tibetan people—is becoming increasingly urgent.

“The Chinese government kidnapped a 6-year-old and his family and have disappeared them for 30 years to control the selection of the next Dalai Lama and thus Tibetan Buddhism itself,” said Yalkun Uluyol, China researcher at Human Rights Watch. “Concerned parties should press the Chinese government to end this cruelty and secure the freedom of Gendun Choki Nyima and his family.”

The Chinese government forcibly disappeared the then 6-year-old on May 17, 1995, three days after the Dalai Lama recognized him as the 11th Panchen Lama. Even pictures of Gendun Choki Nyima, along with those of the Dalai Lama, are prohibited in Tibet.

Following the Panchen Lama’s disappearance, the authorities forced another group of monks to identify a different child, Gyaltsen Norbu, whose parents were reportedly members of the Chinese Communist Party, as the official reincarnation.

Authorities also detained Jadrel Rinpoche, the abbot of Tashi Lhunpo Monastery who oversaw the search for the Panchen Lama’s reincarnation, and arrested more than 30 monks from the monastery. Jadrel Rinpoche’s whereabouts and well-being are also unknown, according to the Dalai Lama.

Twenty years after his disappearance, in 2015, the Chinese authorities claimed that Gendun Choki Nyima was “living normally” and “does not want to be disturbed by anyone.”

Over the next decade, the Chinese government tightened its grip over Tibet, which includes the Tibet Autonomous Region and the neighboring Tibetan autonomous areas within Qinghai, Sichuan, Gansu, and Yunnan provinces.

Since 2008, when a massive crackdown on popular protests swept the Tibetan plateau, Chinese security forces have maintained a heavy presence in Tibet and tightly restricted access and travel to Tibetan areas. Any questioning of government policies, however mild, can result in arbitrary detention or long-term imprisonment, prosecution, enforced disappearance, and even instances of torture. Authorities maintain highly intrusive mass surveillance systems in Tibet, require Tibetans to use Mandarin Chinese as the medium of instruction in schools, and pressure many to relocate en masse from their long-established villages to new government-built settlements. Authorities also make it extremely difficult for Tibetans to travel abroad or to obtain passports and punish people severely for contacting relatives or others outside the country.

Since 2007, Chinese authorities have imposed regulations limiting the recognition of reincarnate lamas, who include many of the religious leaders in Tibetan Buddhism. These provisions specify that reincarnations may not be recognized without state approval and must be born within China’s borders. High-ranking incarnations must be selected using the “Golden Urn,” an 18th century Chinese lottery system that had scarcely been used by Tibetans until 2007, when the Chinese Communist Party mandated it as the only legal way to select top-ranking lamas.

Since 2009, there have been 160 instances of self-immolation, resulting in the death of 127 Tibetans.

In 2012, the government placed nearly all Tibetan monasteries under the direct control of Chinese government officials who are permanently stationed in Tibet. Since 2018, Chinese authorities have required all monastics to meet the “Four Standards,” including “political reliability” and “being dependable at critical moments.” These standards are believed to involve support for the Chinese government’s choice of the next Dalai Lama and any other reincarnate lama.

Five United Nations human rights mandates, including the Working Group on Enforced or Involuntary Disappearances and the Special Rapporteur on freedom of religion or belief, in a joint statement on the 25th anniversary of the Panchen Lama’s abduction, condemned “the continued enforced disappearance of Gedhun Cheokyi Nyima, and the regulation of reincarnation of Tibetan living Buddhas against the religious traditions and practices of the Tibetan Buddhist minority.”

Enforced disappearance is defined under international law as the arrest or detention of a person by state officials or their agents followed by a refusal to acknowledge the deprivation of liberty, or to reveal the person’s fate or whereabouts.

Various governments and independent bodies, including most recently the European Parliament, have called on the Chinese government to provide information on the whereabouts of the Panchen Lama.

The Chinese government should allow UN monitors, independent human rights organizations, and media outlets unfettered access to Tibetan areas, Human Rights Watch said.

Concerned governments, especially those with significant Buddhist populations, such as Japan, South Korea, Mongolia, Taiwan, and India, should mark the 30th anniversary of the Panchen Lama’s enforced disappearance by speaking out publicly and by asserting the rights of Tibetans to exercise their religious freedom.

“The 30th anniversary of the Panchen Lama’s disappearance provides governments an important opportunity to urge the Chinese government to end its decades of repression of the Tibetan people,” Uluyol said.

COMMENT – Fucking thugs.

44. Wang Huning on Religion: Enforce “Rule of Law on Religious Work”
    Hu Zimo, Bitter Winter, May 7, 2025

45. Xinjiang is a glimpse of a very dark future​

    Tom Tugendhat, Tom’s Newsletter, May 15, 2025

John Beck’s account of Uyghur life in China is a terrifying account of the testing-ground for cutting-edge technological evil.

46. Bethel Church in Zhangjiajie: Pastor Zhao Huaiguo Under Continuous Harassment
    Mo Yuan, Bitter Winter, May 13, 2025

47. Radio Free Asia’s Uyghur service in danger following Trump’s decisions: “Without RFA, China will truly become a black hole for information”
    Anne Bocandé, Reporters without Borders, May 13, 2025

48. ‘Democratic exercise’: Lingnan University Students’ Union vows to press forward despite school pressure
    Hong Kong Free Press, May 13, 2025

49. Jailed Hong Kong activist Owen Chow, lawyer lose appeals over prison letter convictions
    Hans Tse, Hong Kong Free Press, April 30, 2025

50. Danish anthropologist denied entry to Kazakhstan for criticizing China's repression of Uyghurs
    Global Voices, May 12, 2025

51. Danish politicians call for government inquiry into transnational repression following China Targets investigation
    Scilla Alecci, International Consortium of Investigative Journalists, May 13, 2025

52. European Parliament condemns China’s assimilation policy in Tibet, including religious succession interference
    Tibetan Review, May 9, 2025

53. Lost but not Forgotten: Wuhan’s Democracy Wall Movement

    John Kamm, Dui Hua, May 2025

I was nearing the end of my one-year term as president of the American Chamber of Commerce in Hong Kong in 1990 when an article appeared in The New York Times about an obscure Democracy Wall activist by the name of Zhu Jianbin. The author of the piece, which appeared on December 5, 1990, was Nicholas Kristof, the paper’s Beijing bureau chief, who had traveled to Zhu’s hometown of Wuhan to seek information on Zhu. Kristof and his wife, Sheryl WuDunn, were to win the 1990 Pulitzer Prize for International Reporting for their coverage of the 1989 Tiananmen Square protests.

Zhu Jianbin had organized workers at the Wuhan Steel Works and edited an underground journal on worker grievances and worker rights, a samizdat known as The Bell Tolls. Zhu, a keen analyst of social and political trends, had authored an important article that argued that China was an anomalous society caught between feudalism, capitalism, and socialism. Only workers could resolve the contradictions arising from the realities of life in contemporary China.

In the Times article, Kristof had written: “[Zhu’s] very existence has been virtually obliterated, for most democracy advocates here and abroad have never heard of him, and even in this city where he worked and dreamed of democracy, people shake their heads and say they have never heard his name.”

New York-based human rights activist Sharon Lee followed up the Kristof article by recounting what she had learned about Zhu from a mutual friend in Wuhan. The friend was a teacher who had heard that Zhu was in prison. He set about trying to get more information and eventually went to the security department of the factory to ask them what had happened to Zhu.

Not such a good idea. The teacher was suspected of being a member of a counterrevolutionary group under the control of a foreign power. He was placed under round the clock surveillance and turned down for a scholarship to study in the United States.

The writings of Kristof and Lee led, in part, to my focus on obscure political and religious prisoners, the “disappeared.” I resolved to find out what had happened to Zhu Jianbin by directly approaching the Chinese government.

What little was known about Zhu came from media and NGO accounts from the early 1980s. Born in 1957, he was one of more than 100,000 workers employed at Wuhan Steel Works, China’s first giant steel factory. He edited a journal about democracy, “The Bell Tolls,” and in the summer of 1980, attempted to form the All-China Association of the Democratic Press. He signed a petition calling for the release of Liu Qing, an editor of the April Fifth Forum, who was to go on to serve as chairman of Human Rights in China, soon after his arrival in the United States in 1992.

Police detained Zhu in April 1981, then tried and sentenced him to prison for counterrevolutionary crimes. He wound up serving 11 years in prison.

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Industrial Policies and Economic Espionage

54. WTO chief warns US bilateral tariff deals could put trade principle at risk

    Leo Lewis, Financial Times, May 15, 2025

Comments from Ngozi Okonjo-Iweala highlight concern that pacts may undermine ‘most favoured nation’ equality concept.

The director-general of the World Trade Organization has warned that bilateral tariff deals between the US and other countries could damage a core principle of trade equality.

In an interview with the Financial Times at the end of a visit to Tokyo this week, WTO chief Ngozi Okonjo-Iweala said global trade was in a “crisis” despite the recent de-escalation of a tariff war between the US and China.

Japanese officials have privately expressed concern that a hastily negotiated US-UK trade agreement sealed this month could encourage countries to consider expediency driven bilateral deals that challenge the “most favoured nation” equality principle underpinning the WTO system.

Asked if a pattern of such deals would damage that principle, Okonjo-Iweala said that there was such a risk.

“That is why we’ve said to WTO members who are making these negotiations bilaterally that they should aim to be as WTO-consistent as possible,” she said, adding that despite recent tensions, 74 per cent of the world’s goods trade was still conducted on MFN terms.

Under the MFN concept, countries must offer the same tariff rates to all countries unless they are reduced via a bilateral trade deal that covers “substantially all trade” — which the UK-US pact does not.

Okonjo-Iweala said that although tensions between the US and China appeared to have eased since Beijing and Washington agreed a tariff truce at the weekend, the preceding spectacle of the world’s two largest economies imposing tit-for-tat tariffs in excess of 100 per cent would reverberate across the global economy.

“When you see this decoupling, and if countries start to align with one side or another, that’s fragmentation. And we have shown that that could lead to a 7 per cent drop in real global GDP in the longer term, which is worse than the hit on global GDP during the 2008-09 financial crisis,” she said.

The WTO should accept that large disruptive forces had hit world trade and should look at the reasons, including interrogating why the US had acted as it had and what aspects of the trading system needed to change, Okonjo-Iweala said.

“We must not waste this crisis,” she said.

“One of the silver linings in this whole crisis is that [WTO] members have come repeatedly to say how much they now value the system, . . . and had actually taken it for granted,” Okonjo-Iweala said. “You know sometimes like the air you breathe. You go to the store, you find the things you want, but now they’ve come to value the system.”

COMMENT – I’m glad that the Director-General seems to acknowledge that there might be legitimate reasons why the US has acted this way and that “aspects of the trading system need to change”, but the WTO is a completely compromised institution.

This isn’t a criticism of Ngozi Okonjo-Iweala personally.

She heads a consensus-based organization that was built on the assumption that great-power rivalry had been relegated to the past.

I don’t see any way to make the kinds of changes she seems to be referring to INSIDE the system the WTO supervises. These reforms cannot take place if the principle of “most favored nation” remains.

Asking members that their bilateral negotiations must be “WTO-consistent” (i.e. maintain the principle of MFN equality) is completely ridiculous.

The only way we will see the kind of rules-based trading system that Ngozi Okonjo-Iweala desires, is if it is significantly circumscribed to include countries which have independent judiciaries and the rule of law. Welcoming authoritarian, anti-liberal countries like the PRC into the WTO was a terrible miscalculation.

Unfortunately, that miscalculation has destroyed the credibility of the WTO.

This video helps explain some of the underlying issues and why we shouldn’t think that this “Trade War” began with Trump.

55. VIDEO – The REAL Reason the US Is Betting on Tariffs

    Phil Andrews, Maxinomics, January 8, 2025

For decades, the US maintained some of the world’s lowest tariffs and relied on the WTO to settle disputes. But with forced tech transfers, IP theft, and the WTO effectively sidelined, tariffs are reemerging as America’s main tool—and that could reshape everything we buy.

COMMENT – Worth watching.

56. Shein to set up huge Vietnam warehouse in US tariff hedge, sources say

    Francesco Guarascio, Reuters, May 15, 2025

Fast-fashion online retailer Shein is leasing a huge warehouse in Vietnam, two people familiar with the deal told Reuters, its first in the country, in a move that could reduce its exposure to unpredictable U.S.-China trade tensions.

Shein, which was founded in China and sells products including $5 bike shorts and $18 sundresses, has agreed to lease nearly 15 hectares of industrial land for a warehouse near Ho Chi Minh City, Vietnam's commercial and trading hub, the two sources said, declining to be identified because the information was not public.

COMMENT – Vietnam has a choice to make.

57. Nvidia modifies H20 chip for China to overcome US export controls, sources say
    Brenda Goh, Reuters, May 9, 2025

Nvidia plans to release a downgraded version of its H20 artificial intelligence chip for China in the next two months, following U.S. export restrictions on the original model, three sources familiar with the matter told Reuters.

The U.S. chipmaker has notified major Chinese customers, including leading cloud computing providers, that it aims to release the modified H20 chip in July, two of the sources said.

COMMENT – Nvidia will do anything to make a buck.

58. Taiwan guards against Chinese product dumping

    Michael Nakhiengchanh, Taiwan News, May 13, 2025

Taiwan is tightening oversight of e-commerce platforms to guard against the dumping of Chinese goods after US tariffs sparked fears of origin washing.

Origin washing refers to the illegal shipment of dumped goods through other countries. The Ministry of Digital Affairs said on Tuesday that while no dumping has been detected so far, platforms are stepping up oversight and remain on alert for suspicious activity, per CNA.

The ministry’s Administration for Digital Industries met with platforms including Shopee, momo, PChome, Yahoo Shopping, Rakuten Taiwan, and others on April 25 to address potential unfair trade practices, per a press release. Discussions centered on low-price imports, false origin labeling, and supply chain transparency, per UDN.

59. Inside China's decision to come to the table on Trump tariffs
    Laurie Chen, Reuters, May 9, 2025

60. Ahead of key China talks, Trump says 80% tariff 'seems right'
    Doina Chiacu, Reuters, May 9, 2025

61. China to US container bookings soar nearly 300% after trade war truce

    South China Morning Post, May 15, 2025

62. Stopping the flow: The effects of US-China cooperation on fentanyl markets and overdose deaths
    Marcus Noland, Julieta Contreras, and Lucas Rengifo-Keller, PIIE, May 9, 2025

Drug overdose is the leading cause of death among Americans aged 15–44, exceeding heart disease, cancer, suicide, vehicular accidents, and COVID-19 in 2023. Most drug deaths are associated with fentanyl. This paper uses data on illicit drug prices to estimate reduced-form price equations of fentanyl, oxycodone, and alprazolam based on supply and demand, including hedonic characteristics. The results are used to estimate the relationship between fentanyl prices and overdoses. They suggest that the Chinese embargo on fentanyl shipments to the United States beginning in May 2019 raised street prices for a limited period, reducing fentanyl overdose deaths in the United States by roughly one-quarter over a three- to five-month period after the announcement.

COMMENT – Bottom line is that when the Chinese Communist Party makes even modest efforts to restrict fentanyl precursor exports that leads to a reduction in deaths in the United States.

Just to remind everyone, nearly 80,000 Americans died of fentanyl overdoses last year and the CCP still claims this is an American problem and China has no responsibility to do anything about it.

This is the same country that screams that America is acting unfair by withholding advanced technology from China.

63. Europe’s last maker of key antibiotics ingredients shuts biggest domestic factory
    Andy Bounds, Financial Times, May 6, 2025

Xellia Pharmaceuticals to close Copenhagen plant and shift some production to China.

Europe’s last manufacturer of ingredients for some vital antibiotics is closing its biggest domestic factory and shifting some production to China, dealing a blow to Brussels’ efforts to reduce drug dependence on Asia.

Lossmaking Xellia Pharmaceuticals said it could only survive against Chinese competition by moving some of its production to its plant there.

Half of Xellia’s active pharmaceutical ingredients (APIs) feature on the recent EU list of critical medicines and the World Health Organization’s list of essential medicines.

The Danish company told staff on Tuesday that it would shut its Copenhagen plant, resulting in a loss of 500 jobs. For now, it will retain a more cost-efficient European operation in Budapest.

Its chief executive Michael Kocher said that unless government-funded health systems were prepared to pay more for generic medicines, more companies based in the EU would move factories.

“We are discussing so much about reshoring. I think it’s just as important to make sure that what we have in Europe stays in Europe,” he told the Financial Times in an interview.

The medicine ingredients Xellia makes includes vancomycin hydrochloride, which is needed to produce antibiotics that can treat severe infections such as sepsis, which are resistant to other drugs.

About 80 per cent of APIs used in the EU already come from China. With strained health systems unwilling to increase medicine prices, Kocher suggested that subsidies were the only way to ensure the EU retained some control over such important ingredients.

“Otherwise, not just 80 per cent of the APIs will come from China. It will be close to 100 per cent very soon,” he said.

Western demand for vancomycin hydrochloride could still be met from Budapest if market conditions improved, Kocher stressed.

The European Commission in March unveiled proposals that could be included in a Critical Medicines Act to try to address dependencies exposed by the Covid-19 pandemic, when countries ran short of medicines, protective clothing and equipment such as ventilators.

These proposals aim to increase EU production of more than 200 medicines, from antibiotics such as penicillin and erythromycin, to painkillers such as lidocaine and morphine.

The measures discussed include allowing countries to join up to make bulk purchases, and favouring EU-made products in procurement processes. But Kocher said the policies were too timid and taking too long to implement.

“Costs are increasing, you try to transfer these costs to your customer and then your customers decide the costs are too high and increase the share coming from China,” he said. “We are seeking . . . a commitment to support ongoing operations.”

COMMENT – A piece of advice to my European friends: do not let this happen! Blindly committing yourselves to “free trade” mantras and trust in the WTO to resolve these problems is an idiotic policy. The United States did it for pharmaceuticals and it will cost us dearly.

64. Surprise U.S.-China Trade Deal Gives Global Economy Reprieve
    Brian Schwartz, et al., Financial Times, May 12, 2025

65. How Will the Trump Presidency Change EU-China Relations?
    Una Aleksandra Bērziņa-Čerenkova, et al., China File, May 12, 2025

66. Trump Slashes ‘De Minimis’ Tariffs on Small Shipments from China
    Gareth Vipers and Jiahui Huang, Wall Street Journal, May 13, 2025

67. China Removes Ban on Boeing Deliveries After US Trade Truce
    Bloomberg, May 12, 2025

68. US tariff pause on Beijing puts pressure on 'China-plus-one' countries
    Laurie Chen, Reuters, May 13, 2025

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Cyber and Information Technology

69. Trump Administration Considers Large Chip Sale to Emirati A.I. Firm G42
    New York Times, May 12, 2025

70. AI will be the mainstay of Alibaba’s business in next 3-5 years, chairman Joe Tsai says
    Ann Cao, South China Morning Post, May 12, 2025

71. US to Boost Saudi AI Chip Access Even as China Issues Linger
    Mackenzie Hawkins, Annmarie Hordern, and Matthew Martin, Bloomberg, May 13, 2025

72. Apple’s China detox is painful and overdue
    Robyn Mak, Reuters, May 13, 2025

73. Why Apple can’t just quit China
    Viola Zhou, Rest of World, May 13, 2025

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Military and Security Threats

74. The Risk of War in the Taiwan Strait Is High—and Getting Higher

    Bonny Lin, John Culver, and Brian Hart, Foreign Affairs, May 15, 2025

Beijing’s Worry About the Future Could Spur a Deadly Miscalculation Soon.

Tensions in the Taiwan Strait are growing. Even before Taiwan elected William Lai as its president, in January 2024, China voiced strong opposition to him, calling him a “separatist” and an “instigator of war.” In recent months, Beijing has ramped up its broadsides: in mid-March, the spokesperson for China’s Taiwan Affairs Office labeled Lai a “destroyer of cross-Straits peace” and accused him of pushing Taiwan toward “the perilous brink of war.” Two weeks later, as Beijing launched a large-scale military exercise around Taiwan, the People’s Liberation Army (PLA) circulated cartoon images that portrayed Lai as an insect. One image depicted a pair of chopsticks picking the “parasite” Lai out of a burning Taiwan.

This effort to dehumanize Lai reflects Beijing’s deep anxiety about the trajectory of cross-strait relations, particularly what China views as Lai’s desire to push Taiwan toward independence. Compared with his predecessor, Tsai Ing-wen, Lai has taken a stronger and more defiant stance in the face of growing Chinese threats to the island, as evident in his rhetoric and new policy measures. This March, Lai characterized Beijing as a “hostile foreign force” and announced a plan to implement 17 wide-ranging strategies to defend the island from Chinese infiltration.

China’s vilification of Lai echoes Beijing’s denunciations, roughly two decades ago, of Chen Shui-bian, then president of Taiwan. Beijing labeled Chen a “die-hard separatist” and “a troublemaker” who “is riding near the edge of the cliff, and there is no sign that he is going to rein in his horse.” Beijing escalated external pressure against Chen and worked with opposition parties within Taiwan to frustrate his political agenda. China did come dangerously close to using military force against the island in 2008 and might have gone through with it if Chen had been more successful in winning Taiwan’s public support for his referendum.

Beijing’s attitude now should very much concern Washington. China does not view Lai’s rule as merely a continuation of that of Tsai. Instead, Beijing sees Lai as a disruptor like Chen and is treating him much in the same way. Since Lai became president, Beijing has demonstrated growing willingness to use military might to intimidate and punish the island. And it is far more prepared to use force against Taiwan today than it was 20 years ago.

Apparent divisions within U.S. President Donald Trump’s administration about how to approach Taiwan compound these risks. If Beijing doubts U.S. commitments to the island, that could encourage China to engage in more coercive actions against Taiwan. All these factors dramatically increase the chances that Beijing will miscalculate—and that it could very well use force against the island around 2027, as China approaches critical military modernization milestones and Taiwan gears up for its next presidential election.

COMMENT – One way to interpret the growing likelihood of conflict in the Taiwan Strait is to portray it as “Beijing’s deep anxiety about the trajectory of cross-strait relations.” This interpretation tends to absolve Chinese Communists of responsibility… they are under threat and feel anxious, which encourages the reader to believe that Beijing has some justification for its actions and that those actions are in some way justified.

The authors use comparisons to Chen Shui-bian (Taiwan’s DPP President from 2000 to 2008) to amplify this perception that it isn’t Beijing’s fault, Taiwan is backing innocent China into a corner… “forcing” Xi to use military force to prevent the loss of Taiwan.

Another way to look at this situation is that Xi Jinping feels powerful enough to threaten its neighbor, Taiwan, with invasion, something his predecessors did not feel powerful enough to do, and would like to create a pretext to justify this act of aggression.

The pretext is this false argument that the PRC is justified at using force against Taiwan, if Taiwanese leaders defy demands by Beijing.

Let’s stop blaming the victims of aggression and coercion… President Lai and the Taiwanese people are NOT required to bend a knee to Chinese Communist imperialism.

Xi Jinping and his cadres wish to annex Taiwan, those desires are independent of what President Lai, or any other elected Taiwanese leader, says.

75. China's "DeepSeek Moment" for Military Tech Arrived in the Skies Over Kashmir

    Eric Olander, Sinica, May 12, 2025

There was a palpable sense of euphoria in China this weekend as Chinese-made J-10C and JF-17 fighter jets saw combat for the first time over the disputed Kashmir region — and performed impressively.

The J-10C’s successful use of electronic jamming and reports of downing several Indian Air Force Rafale jets (the exact number remains disputed) were widely celebrated in Chinese media. Many likened the moment to another "DeepSeek Moment" — a reference to China’s growing confidence in its domestically developed technologies.

But beneath the excitement was also a deep sense of relief. These jets had never been tested in actual combat, and despite public bravado, few could say with certainty how they'd perform under pressure.

Like DeepSeek, which was developed using a foundation of U.S. technology, the J-10C and JF-17 incorporate a significant amount of stolen or reverse-engineered intellectual property from the U.S. and Europe. Melding this "acquired IP" with Chinese domestic innovation has posed serious challenges, particularly in achieving true interoperability across systems.

Now, it appears China has succeeded — and the world should take note.

COMMENT – This strikes me as the same kind of manufactured hype that surrounded DeepSeek (and often amplified by the exact same people).

76. Chinese nationalism surges across social media as viral video mocks downed Indian jets
    Yuanyue Dang, South China Morning Post, May 12, 2025

77. China escalates tactics targeting Japan's control over Senkaku islands
    Shinnosuke Nagatomi and Junnosuke Kobara, Nikkei Asia, May 10, 2025

78. Xi Jinping has Vladimir Putin over a barrel
    The Economist, May 12, 2025

79. Taiwan’s New Strategy: Make China Fear the Pain of an Invasion
    Joyu Wang, Wall Street Journal, May 10, 2025

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One Belt, One Road Strategy

80. Latin America wary of US trade backlash as it builds relations with China
    Michael Stott, et al., Financial Times, May 10, 2025

81. ’China here, China there': Cambodian city reshaped by Chinese money
    Yuji Nitta, Nikkei Asia, May 11, 2025

82. China Is Building Megaports in South America to Feed Its Need for Crops
    Samantha Pearson, Wall Street Journal, May 12, 2025

83. Xi Woos Latin America with Promises of Cooperation on Technology
    Chris Buckley, New York Times, May 13, 2025

84. China, Colombia sign Belt and Road cooperation pact

    Reuters, May 14, 2025

China and Colombia have signed a joint cooperation plan on the Belt and Road Initiative, state media said on Wednesday after their leaders met in Beijing.

Burgeoning commerce in recent years has helped grow Beijing's influence in Latin America and the Caribbean, a region of strategic significance for the United States.

Colombia's foreign minister Laura Sarabia said on Wednesday that the decision to join China's flagship overseas development project was the South American country's "boldest step in decades."

85. China Courts Lula and Latin America After Trump’s Tariff Shock
    Chris Buckley, New York Times, May 12, 2025

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Opinion

86. Trump’s High-Flying Persian Gulf Strategy
    Walter Russell Mead, Wall Street Journal, May 12, 2025

His goal is to align the region’s markets and investment with America, not China.

87. Stop Giving Beijing Advantage Through TikTok
    Michael Sobolik, Hudson Institute, May 9, 2025

The United States and the People’s Republic of China (PRC) are locked in a trade war. President Donald Trump’s April 2, 2025, tariff announcement has spiraled into a campaign to recalibrate China’s role in the global economy. US tariffs on PRC exports have reached 145 percent, and Beijing has responded with a 125 percent levy on US goods. Senior administration officials have admitted in private conversations that this paradigm is unsustainable, a sentiment Trump has confirmed publicly: “145 percent is very high, and it won’t be that high,” the president said. Stock and bond market volatility has been worse than many expected, and China has demonstrated a willingness to escalate. Now the Trump administration appears to be searching for off-ramps.

Unfortunately, Washington does not have the luxury of backing down. The global economy is a key domain in America’s broader cold war with the Chinese Communist Party (CCP). Chinese President Xi Jinping recognized this reality long before Trump’s tariffs. In a 2013 address that effectively served as his inauguration, Xi spoke of “the basic contradiction of capitalist society,” declared that “socialism will inevitably triumph,” and predicted the “ultimate demise of capitalism.” That same year, Beijing’s National Defense University released a documentary criticizing the United States. Its title was telling: Silent Contest. The film’s opening lines were equally unambiguous: “The process of China’s realization of the great undertaking of national rejuvenation must ultimately follow from testing and struggle against the system of American hegemony.”

Still, US officials have been slow to recognize the systemic nature of the CCP’s challenge to America. Treasury Secretary Scott Bessent recently remarked that “China needs to change” its unstable economic model. This sentiment is to be expected, as Republican and Democratic administrations have critiqued Beijing’s economic practices for decades. Yet few have done anything of substance to hold the PRC accountable.

Trump’s focus on competing with China is a step in the right direction. But the administration’s current program is undermining America’s broader interests. Viewing this trade war as a strictly economic concern that can be resolved with a trade deal will set the US up for further exploitation and ultimate defeat. Beijing has routinely demanded upfront concessions from America in exchange for future promises from China. This would be a victory for Xi, who has a history of breaking promises to US presidents.

President Trump faces an inescapable irony: if he wants to de-escalate a trade war on terms favorable to America, he needs to escalate the broader cold war with China. His administration should first identify US advantages over Beijing. Then, rather than ceding these advantages through trade negotiations, he should exploit them to weaken the CCP. Concurrently, Trump will need to signal his resolve to Xi and demonstrate America’s will to tolerate short-term pain for long-term benefit.

Fortunately for the White House, such leverage already exists. For an effective first step in this escalation, Trump need look no further than TikTok.

COMMENT – The President’s naivety about TikTok is pretty disturbing and it makes him look both indecisive and foolish.

When the current legal extension expires, I suspect President Trump will simply extend it again, even as TikTok serves as one of the most potent outlets at undermining his efforts on trade.

88. The U.S. Army Is Finally Pivoting Toward Future Threats
    Ryan D. McCarthy, New York Times, May 13, 2025

89. There Are Two Chinas, and America Must Understand Both
    Li Yuan, New York Times, May 13, 2025

The technological success that has captured the attention of many in the United States is one aspect of the Chinese economy. There’s another, gloomy one.

Two Chinas inhabit the American imagination: One is a technology and manufacturing superpower poised to lead the world. The other is an economy that’s on the verge of collapse.

Each reflects a real aspect of China.

One China — let’s call it hopeful China — is defined by companies like the A.I. start-up DeepSeek, the electric vehicle giant BYD and the tech powerhouse Huawei. All are innovation leaders.

Jensen Huang, the chief executive of the Silicon Valley chip giant Nvidia, said China was “not behind” the United States in artificial intelligence development. Quite a few pundits have declared that China would dominate the 21st century.

The other China — gloomy China — tells a different story: sluggish consumer spending, rising unemployment, a chronic housing crisis and a business community bracing for the impact of the trade war.

President Trump, as he tries to negotiate a resolution of a trade war, must reckon with both versions of America’s arch geopolitical rival.

The stakes have never been higher to understand China. It’s not enough to fear its successes, or take solace in its economic hardships. To know America’s biggest rival requires seeing how the two Chinas are able to coexist.

“Americans have too many imagined notions about China,” said Dong Jielin, a former Silicon Valley executive who recently moved back to San Francisco after spending 14 years in China teaching and researching the country’s science and technology policies. “Some of them hope to solve American problems using Chinese methods, but that clearly won’t work. They don’t realize that China’s solutions come with a lot of pain.”

Just like the United States, China is a giant country full of disparities: coastal vs. inland, north vs. south, urban vs. rural, rich vs. poor, state-owned vs. private sector, Gen X vs. Gen Z. The ruling Communist Party itself is full of contradictions. It avows socialism, but recoils from giving its citizens a strong social safety net.

Chinese people, too, grapple with these contradictions.

Despite the trade war, the Chinese tech entrepreneurs and investors I talked to over the past few weeks were more upbeat than any time in the past three years. Their hope started with DeepSeek’s breakthrough in January. Two venture capitalists told me that they planned to come out of a period of hibernation they started after Beijing’s crackdown on the tech sector in 2021. Both said they were looking to invest in Chinese A.I. applications and robotics.

But they are much less optimistic about the economy — the gloomy China.

The 10 executives, investors and economists I interviewed said they believed that China’s advances in tech would not be enough to pull the country out of its economic slump. Advanced manufacturing makes up about only 6 percent of China’s output, much smaller than real estate, which contributes about 17 percent of gross domestic product even after a sharp slowdown.

When I asked them whether China could beat the United States in the trade war, nobody said yes. But they all agreed that China’s pain threshold was much higher.

90. Trump’s China Truce on Tariffs Comes with Cost to U.S. Credibility
    Zongyuan Zoe Liu, Council on Foreign Relations, May 12, 2025

91. China’s silent siege of the UN: how its NGO army hijacked and outsmarted a West obsessed with Russia

    Konstantinos Bogdanos, Brussels Signal, May 13, 2025

Picture Chinese President Xi Jinping at Moscow’s Victory Day parade: the guest of honour, smirking beside Putin.

That happened last Friday. And it was no mere ceremony: it was a gauntlet thrown down at the West’s feet.

By obsessing over isolating Russia, we elevate China to the role of global chessmaster, a superpower set to challenge Europe and America in markets, tech, and battlefields. And where we really hand China the chessboard is at the UN.

Beijing’s strategy is surgical. From the UN’s Human Rights Council to the Economic and Social Council, China is orchestrating a takeover, not just with its diplomats, but through NGOs posing as independent voices.

These are not earnest activists, but CCP puppets. Often they are tied to state-backed think tanks, ones with opaque funding and an admirable ability to secure UN consultative status faster than you can say “Uyghur genocide”.

These groups swamp UN processes with reports praising China’s “progress” in Tibet or “stability” in Xinjiang. It is narrative warfare, won by sheer volume. Meanwhile, authentic NGOs–those bold enough to expose Beijing’s abuses–drown in red tape.

Europe, with its commitment to free expression, should be showing some sensitivity. Instead, our diplomats sip espressos with them in Geneva and enjoy cocktails together in New York.

It gets nastier. These NGOs do not just speak. They intimidate. Tibetan activists, Uyghur advocates, Hong Kong democrats, and Falun Gong members are heckled, smeared, photographed, even physically barred at UN events.

This is not advocacy. It is state-sponsored bullying, draped in the UN’s sanctimonious neutrality. And while we sever ties with Russia, China’s NGOs are silencing dissent in plain view, eroding the very civic freedoms Europe claims to uphold.

The UN is meant to be a neutral arena, but its open-door policy swings open the gates for Beijing’s trojan horse. Its system cannot–or will not–distinguish genuine NGOs from CCP fronts, so the boundary between government and grassroots fades, and the West’s ideal of transparent advocacy gets crushed. By focusing elsewhere, such as on Moscow, we ignore the dragon coiling around us.

Beijing rewrites the global playbook. Its NGOs push a distorted vision of human rights, washing up the face of mass surveillance and repression. They frame criticism of Xinjiang’s camps or the suffocation of Hong Kong’s democracy as assaults on sovereignty, echoing Xi’s “community of shared future for mankind”–a glossy-magazine term for authoritarianism. With Chinese nationals now leading UN agencies, this narrative takes roots into the very system, incidentally increasingly muting Europe’s voice.

This strikes Europe where it hurts. Our continent, already wrestling with energy woes, migration, and Russia’s shadow, now faces a stealthier foe: a China that is not just flooding our markets, but infiltrating the institutions we forged.

The UN rose from Europe’s war-torn ashes, grounded in liberal ideals. Now, it is being reshaped to legitimise Beijing’s values, undermining the EU’s ability to champion democracy or hold despots accountable. We let China erode our global clout, leaving Europe a bystander in a world it helped define.

Why the paralysis? The UN’s consensus-driven machinery is no match for China’s exhaustingly meticulous campaign. Too many European states, tied to Chinese trade or infrastructure deals–here, think Greece’s ports or Hungary’s railways–are unwilling to provoke Beijing.

Even when the CCP links of NGOs are exposed, the burden of proof falls on whistleblowers, not the culprits. It is a rigged game, and Europe is flat out of aces.

This is soft power with claws, and it barely makes headlines. While we debate the fate of Ukraine or Nord Stream, Beijing conquers the UN through bureaucracy. This is institutional hijacking and it works precisely because we can’t be bothered to deal with it.

Europe must wake up. We need rigorous scrutiny of NGO funding, stricter UN accreditation rules, and a coalition of democracies to counter China’s advance.

Xi’s Moscow appearance should act as a wake-up call. By sidelining Russia, we do not just isolate one rival. We clear the path for China to become the West’s true nemesis–a superpower contesting us on every front, from ideas to arms. The UN is its testing ground, and its NGO legion paves the way.

If Europe does not act, we will wake to a world where Beijing, not Brussels or Washington, sets the terms.

And that is a world we will regret.

92. Trump blinked again on tariffs, but China isn’t in the clear

    Wang Xiangwei, CNA, May 15, 2025

A trade war yields no winners. This notion has become widely accepted, since United States President Donald Trump sparked an escalating trade conflict with China last month, effectively bringing trade between the two largest economies to a near standstill.

The irony was palpable this week when both the US and China claimed victories after announcing a temporary tariff truce on Monday (May 12). This agreement drastically reduces tariffs on each other's goods for 90 days to ease tensions.

Mr Trump, in his characteristically grandiose manner, declared a victory, touting "a total reset" with China and hinting, without specifics, that China had agreed to fully open its markets to American businesses. The White House release hailed it a “historic trade win”.

Chinese state media and social media influencers hailed the agreement as "a great victory" for China.

However, beneath the spin and hyperbole lies the reality that this so-called "reset" will be far from straightforward.

LIMITED VICTORIES

Finalising a comprehensive deal could take months of challenging negotiations, considering trade and tariff discussions are likely part of broader negotiations involving issues such as fentanyl, semiconductors, rare earth elements, TikTok, Panama Canal ports, and possibly Taiwan.

And this assumes there are no further reversals due to Mr Trump's unpredictable nature or if talks go badly.

Signs suggest that Mr Trump's victory claim is hollow and disingenuous. After swiftly raising tariffs to 145 per cent, he expected Beijing to capitulate first.

But he grossly underestimated Beijing's political strategy, as well as its readiness and resolve to endure short-term economic hardship. In a strategic twist, Beijing effectively adopted Mr Trump's own tactic of maximum pressure, coupled with strong rhetoric about "fighting to the end”.

This hard-nosed approach has paid off, ultimately forcing Mr Trump to yield. And make no mistake, Mr Trump blinked first – even if the US appears to impose a larger tariff on Chinese imports than the other way around for now.

Yet, China's "great victory" carries more political and geopolitical implications than economic benefits.

From a Chinese perspective, being the first and only country to stand up to Mr Trump's bullying tactics and win positions China as an undisputed equal to the US in the great power game – a status Chinese President Xi Jinping once described as "viewing the world as equals". This victory could bolster China's standing and improve its credentials as a leader of the Global South.

Economically, however, China faces mounting costs from the trade war, especially as its economy struggles with deflation and weak consumer confidence. That explains why Beijing is willing to sit down to talk with Washington. After all, a prolonged trade war could complicate or even derail China’s efforts to boost its economy.

More importantly, Beijing still follows the strategy formulated after Mr Trump’s first trade war against China in 2018: fighting but not breaking off.

TARIFFS REMAIN SUBSTANTIAL

Even after rollback, American tariffs on Chinese products remain substantial, particularly given that exporters' margins are typically between 10 per cent and 20 per cent.

The revised “Liberation Day” tariffs now stand at 30 per cent, down from 145 per cent. This comprises the 10 per cent baseline on all trading partners and 20 per cent fentanyl-related levy. Sector-specific tariffs like those on steel and cars remain.

If this rate persists, it could lead to a 36 per cent decline in China's exports to the US and a 5 per cent decrease in China's total exports, shaving 1 percentage point off this year's GDP growth, according to Larry Hu, chief China economist at Macquarie Group in a research note this week.

But don’t forget there were pre-existing tariffs before Mr Trump started his second term. Taken together, the overall US tariff rate on Chinese goods is closer to 50 per cent.

Similarly, China's reciprocal tariff has fallen to 10 per cent from 125 per cent. However, after factoring in the pre-existing tariffs, China's overall tariff rate on US products stands around 30 per cent.

WHAT HAPPENS NEXT?

For trade talks to advance, Mr Trump and Mr Xi will need to be actively involved in defining the parameters of a final deal. Mr Trump has suggested he may soon speak with Mr Xi by phone, which could lend credence to the best-case scenario of both sides working towards a comprehensive trade agreement.

Questions arise about how China is prepared to open up to American businesses, as Mr Trump claimed, and how the US is prepared to reciprocate.

From China's perspective, there are several steps it can take to reduce trade imbalances, a major source of tension between the two countries.

First, Beijing is ready to significantly increase purchases of American agricultural products and energy to reduce the trade deficit. Second, it can take measures to limit exports to the US, a trend already emerging as exporters diversify into other markets. Third, Beijing can continue to increase its holdings of US Treasury securities – China is the second-largest holder, with US$784 billion, after Japan. Fourth, Beijing can encourage more Chinese companies to invest in the US.

However, many questions remain. What concessions can the US offer China in return?

Can the US relax controls over high-tech products, including semiconductors? Even if Chinese companies wish to invest in the US, will they be welcomed at a time when even Chinese-produced garlic is deemed a national security threat?

Finding answers to these questions will not be easy.

93. When the country tried to choke off supply of the metals before, the world found ways to adapt.
    Marian L. Tupy, Wall Street Journal, May 12, 2025

94. The Trump Doctrine of the Deal

    Editorial Board, Wall Street Journal, May 16, 2025

Mr. Trump is offering a form of foreign-policy realism rooted in good commercial relations and a focus on negotiating peace and stability. He doesn’t much care what kind of government countries run as long as they want good relations with the U.S. He’s looking for deals, even with enemies. He thinks mutual interest in prosperity can overcome even strong ideological differences—and he has no interest in promoting American values, including liberty or democracy.

His Middle Eastern policy is taking this doctrine on a test drive. He took the advice of Saudi Crown Prince Mohammed bin Salman to repeal sanctions on Syria’s new Islamist government. He even met the former jihadist now running Damascus, Ahmed al-Sharaa, whom he called “attractive, tough.” In Trump world, those are the highest compliments.

This is a gamble but it could pay off. The U.S. has an interest in keeping Iran and Russia from dominating Syria. If the U.S. can help Mr. Sharaa balance Turkey’s influence, and Mr. Sharaa can help prevent conflict between Turkey and Israel, a new era of stability in that bloody corner of the Middle East might be possible.

A bigger question is Mr. Trump’s growing enthusiasm for a nuclear deal with Iran. True to his doctrine, he is appealing to the mullahs in Tehran with the promise of commercial riches if they give up their nuclear ambitions.

This appeal has been tried before, however, and came a cropper because Iran’s regime is ideological. It wants a regional Shiite revolution that dominates the Sunni Arab states and pushes Israel into the sea. If the Ayatollahs reject Mr. Trump’s offer because they are bent on retaining the ability to become a nuclear power, then what will Mr. Trump do?

He says he wants peace above all else, and the test will be whether his deals with adversarial states are short-term expedients or longer-term strategic victories. His deal with Iran, however it goes, will tell us something about his plans for China as well.

Mr. Trump’s aversion to ideology—to promoting U.S. values—led to the biggest mistake of his trip, which was a needless attack on his predecessors. He praised the sparkling new cities of the Arab countries and claimed they are solely the handiwork of those nations.

“The gleaming marvels of Riyadh and Abu Dhabi were not created by the so-called nation-builders, neocons or liberal nonprofits like those who spent trillions and trillions of dollars failing to develop Kabul, Baghdad, so many other cities,” he said. He went on to slam the “nation-builders” and “interventionalists,” by which he clearly meant George W. Bush and the last two Democratic Presidents.

The Iraq and Afghan wars weren’t successful in hindsight, but Mr. Trump ignores that they began as realist efforts in the wake of a jihadist attack on America. He also forgets that the emirs of the Gulf have long been protected by America’s foreign military deployments that let them nation-build. Mr. Trump’s slam against his predecessors resembles Barack Obama’s infamous Middle East “apology tour.”

In his pursuit of stability and American restraint, Mr. Trump’s policy may be imitating Richard Nixon’s detente in the Cold War. Nixon also downplayed ideological differences in pursuing arms control deals and a stable balance of power. But that policy failed in the end because the Soviet Union’s leaders weren’t interested in stability. They were interested in maintaining, and spreading, their Communist revolution.

Ronald Reagan won the Cold War with a combination of realism and American idealism. He built American hard power and was willing to engage the Soviets, but he also wasn’t afraid to tell the truth about their crushing of freedom in Russia, Eastern Europe and beyond.

In his desire to repudiate his domestic opponents, Mr. Trump would do well to avoid disdaining American values. They are still admired by the people who flock to our shores.

COMMENT – I think it is pretty clear to see that President Trump is anti-ideological. Which makes him unable to understand that others are guided by ideology.

95. China's AI assistants are getting more handy -- and more invasive
    Vivian Toh, Nikkei Asia, May 13, 2025

96. Globalization Is Collapsing. Brace Yourselves.

    Tara Zahra, New York Times, April 5, 2025

Before World War I, globalization was at a high point. Advances in technology, including the steamship and the telegraph, allowed people, goods and news to cross borders with extraordinary speed. Migration boomed. The economist John Maynard Keynes, conjuring an Edwardian version of Amazon, recalled how “the inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep.” After drinking his tea (from India), sweetened by sugar (from Jamaica), that Londoner might later enjoy toast (made from wheat grown in Kansas), butter (from New Zealand), beef (from Argentina) and oranges (from Palestine).

Many people believed that this kind of internationalism was irreversible and that the interdependence of the global economy would guarantee peace and prosperity, even if it was also unsettling. It was an age, Keynes said, in which, to the Londoner, “the projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions and exclusion, which were to play the serpent to this paradise, were little more than the amusements of his daily newspaper.”