WWXJD

What Would Xi Jinping Do?

Friends,

As the details of the Signal chat group debacle came to light this week, my first reaction was shame.

Shame that senior U.S. Government officials would knowingly put classified policy deliberations, as well as the operational details of an upcoming military campaign, on an unclassified platform, likely on their personal smartphones. Sure, adding a journalist was a knuckle-headed move, but the real issue was the content certain folks put into that chat… that was a serious breach of security.

On one level, I can understand how this happened.

These senior officials (what we call “Principals”) are really busy people. There are only short windows of time when they can all come together in one secure room and discuss things. They are juggling multiple global issues simultaneously. All too often not everyone can make it to every meeting, therefore they miss portions of the debate and opportunities to offer their input. Signal, like other end-to-end encryption platforms, provides a technological solution to this very real problem. It allows a group of individuals the ability to carry on a distributed conversation even if they are separated in time and space… it is in their pockets and available to them 24/7.

It provides an expedient short-cut to give Principals the one thing that is most valuable to them: time.

But this expedient short-cut has an important trade-off… it lacks the cyber and physical security protections that exist on the systems that the U.S. Government has built to protect information for both intelligence and OPSEC (Operational Security… remember that term, you will see it again) purposes.

While Signal has end-to-end encryption, the smartphone it is operating on has serious security vulnerabilities and it becomes even more vulnerable if Signal is mirrored to a desktop computer (as the CIA Director said he had done).

Now if this Signal chat group is only used for administrative purposes (“Hey, will you make it to the meeting today?” or “Who is your POC?” or “Did you get the read-ahead package I sent on high-side?”), then this is probably OK… but it requires discipline not to slip into discussions of policy content (like the rationales for policy decisions)… or, God forbid, the actual operational details of classified military operations before they take place.

[NOTE – One question I asked myself as this unfolded: Why the hell hasn’t the U.S. Government built its own end-to-end encrypted messaging application to go on Government issued smartphones that can only be downloaded and accessed by approved officials? This is clearly a capability senior officials need, so build them the tools to help them do their jobs quickly AND in a secure way.]

If we look at how the chat started, it appears it was meant for an administrative purpose (I’m using the Wall Street Journal’s article, “An Annotated Analysis of Signal Group Chat With Top Trump Officials” March 26, 2025) to provide an understanding of what was written and when).

On the afternoon of Thursday, March 13, the National Security Advisor, Mike Waltz, tells the group he is establishing the chat for the Principals to coordinate, tells then that his deputy, Alex Wong, held a meeting with their deputies/Chiefs of Staff in the Sit Room (the secure Situation Room in the West Wing of the White House) that morning and then asks them for their best staff POC. The various members of the chat respond with names of POCs.

In my opinion, this is generally all good… the information being conveyed is administrative in nature to let the Principals know what is going on within secure channels.

The one major breach here is announcing what this is about (the “Houthis”) and the time frame in question (“over the next 72 hours”). Had there been a Security Classification Guide (SCG), then would almost certainly describe these two pieces of information as classified. This is where random code words would have been useful, instead of referring to it as the “Houthi” Principals Committee (PC) Small Group, perhaps pick a word like “Buckle” and make no reference to time frames.

The right thing for Mike Waltz to have said at the start was: Hey, Team… the chat is for Operation BUCKLE and we will only share UNCLASSIFIED information here, let’s observe Operational Security (OPEC).

On the morning of Friday, March 14, Mike Waltz provides some more administrative updates: the SOC (a classified Statement of Conclusions, presumably from the meeting that Alex Wong held on March 13) is available in their high-side inboxes and that the Joint Staff is sending (through classified channels) a “more specific sequence of events” to ensure that relevant seniors leaders are briefed and aware of the details.

Again, this is administrative in nature and directs the principals to their classified systems to get the content and details they need.

Up to this point, things are generally on track… but 11 minutes later, things go off the rails.

This is when Vice President Vance turns what had been an administrative chat group into a chat group concerning the policy debates and classified decision-making of a pending military operation.

His interjection and the issues he puts on the table starts an obviously classified discussion which lasts over the next hour and thirty minutes between Tulsi Gabbard’s staff POC at the Office of the Director of National Intelligence (Joe Kent), John Ratcliffe (CIA Director), Pete Hegseth (Secretary of Defense), Mike Waltz (National Security Advisor), Stephen Miller (Deputy Chief of Staff for Policy), and the Vice President.

Some observers have been outraged that the Vice President and others questioned the rationale for the strikes and what message it would send to the Europeans, but in my opinion that type of fulsome discussion MUST take place.

Before any military operation takes place we should expect our leaders to weigh the pros and cons… BUT and this is a Big “BUT”… that discussion MUST take place in a secure room or on secure phone lines/video teleconferencing systems… not on Signal which is on their unclassified smartphones.

Of note, the Secretary of Defense even brings up the topic of OPSEC: “But, we can easily pause. And if we do, I will do all we can to enforce 100% OPSEC. I welcome other thoughts.”

Oh, the irony.

That discussion on Signal alone was a head-slap event, something that justifies removing officials from their positions… but the Secretary of Defense took it up a level the next day as he provided the group the exact details of when the strike would launch later that day and the types of weapon systems that would be used against Houthi leadership.

The Secretary of Defense ends his “Team Update” with “We are currently clean on OPSEC.”

Umm… no, you are not.

The vulnerabilities of smartphones and any applications on them, should be obvious to anyone who has been paying attention to national security for the past quarter century.

There are countless dead Al-Qaeda, Taliban, Sunni jihadist, ISIS, Hezbollah, and Hamas operatives who thought their cell phones and smartphones were secure.

Ask Iranian General Qassem Soleimani or Abu Bakr al-Baghdadi (ISIS founder) or Abu Yusif (the ISIS leader in Syria) whether their phones, or the phones of their associates, are secure… oh wait, you can’t because they are all dead.

And if you think this is just a Middle East problem, then how did the United States learn of Putin’s plans to invade Ukraine, five months before the invasion? Because we gained access into the internal communications of the most senior Kremlin officials who practiced sloppy OPSEC as they devised their plans, debated them internally, and made decisions (here and here and here and here).

That knowledge alone of what happened nearly four years ago should have prevented this gross breach of security by the most senior U.S. Government officials.

If you aren’t allowed to bring a smartphone into a secure room for discussions of classified information and military planning… then it is reasonable to assume you shouldn’t use those same devices to discuss those things outside a secure room. Just saying…

This isn’t rocket science and these are rules and safeguards we have had in place for years.

But as I started writing this week’s issue, I asked myself: What would Xi Jinping do in this situation?

Nearly two years ago, Xi Jinping sacked one of his young, hand-picked loyalists, and while we don’t have all the details, it appears that he committed a serious breach of security.

So, I think we have some idea of how Xi would handle a situation like this if it unfolded in Zhongnanhai and it is worth comparing the similarities of Xi’s former foreign minister, Qin Gang, with Trump’s defense secretary, Pete Hegseth.

The Rapid Rise and Sudden fall of Qin Gang

Qin had been a relatively unremarkable PRC foreign ministry official until he attracted the attention of Xi Jinping for his aggressive, nationalistic, “wolf-warrior” style of diplomacy. He was saying the things that Xi Jinping liked to hear and was doing it even as his more reserved colleagues exercised discretion and told truth to power. As a reward for this loyalty and willingness to parrot the Xi’s worldview, Xi promoted him rapidly up the ranks.

First as a vice foreign minister in 2018, then as the PRC Ambassador to the United States in 2021, and after less than a year in that position, Xi made him the youngest foreign minister for the PRC since the 1950s.

Qin had been promoted rapidly above other, more experienced colleagues and he owed his position entirely to the patronage of Xi Jinping.

But seven months after being appointed as his country’s top diplomat, Qin Gang “was disappeared.”

His name and photo were removed from the Ministry of Foreign Affairs website, and the Ministry’s spokespersons awkwardly tried to pretend that all was normal during press conferences as foreign journalists asked: hey, what happened to your boss?

While we don’t know all the details, what seems to have happened is that Qin Gang appears to have fallen for the oldest trick in the spycraft playbook. While he was the PRC Ambassador to the United States, he fell for a honeytrap.

Rumors continue to swirl that Qin had an affair with Fu Xiaotian who worked for the PRC state media outlet, Phoenix Television, in London and hosted a program called Talk with World Leaders.

Many suspect the two had a child together and that PRC security services believed that Fu had been compromised by British intelligence (I do not know if this is true, but the rumor is that PRC security services believed it was true).

Qin Gang and Fu Xiaotian during happier times for them both.

Fu disappeared shortly before Qin and she posted this somewhat cryptic tweet right before she boarded a private jet and included a picture of her speaking with Qin Gang, as well as picture of her with her newborn.

As much as we can piece together, the affair was discovered by PRC security services, something that Qin Gang had failed to disclose. The evidence was brought to Xi Jinping, who then made the decision to remove his hand-picked loyalist.

No doubt this reflected badly on Xi Jinping, but Xi seemed to consider this kind of security breach serious enough to weather the criticism that would likely arise from internal critics (and from foreign media). I suspect that Xi calculated that leaving Qin Gang in place was far more corrosive to national security than the criticism he would get for admitting he made a mistake by elevating Qin Gang to his position of power (obviously, Xi has never publicly admitted he made that mistake).

The question for the United States is, will President Trump make a similar calculated decision. Can he trust the judgement of his hand-picked loyalists who make rookie mistakes with security that endangers the country? Does turning a blind-eye to these breaches undermine U.S. national security more than the embarrassment of having to remove loyalists?

Looking at the media reports on what has happened this week, it appears that Mike Waltz is in the crosshairs (also here and here), but as we’ve seen above it was the Vice President (the most senior official on the chat) and the Secretary of Defense that turned what had been a knuckleheaded mistake (adding a journalist to a chat group) into a serious security breach (discussing classified information on an unclassified system).

One wonders whether similar breaches have happened and whether they will continue to happen if the same individuals continue to occupy their positions.

Almost all foreign intelligence work preys upon human failures and weaknesses. Folks get sloppy and violate procedures, folks act in ways that make them vulnerable to extortion and blackmail, or folks rely on technological expedients that aren’t designed for the way they are being used. These are the things that intelligence services seek to exploit… it is what we do, and it is what our rivals do.

Protecting one’s secrets demands discipline and a lot of resources.

Based on Xi’s response to Qin Gang, it appears that Xi Jinping takes these things very seriously and holds individuals responsible, no matter how close they are to him personally.

Is the Panama Port Deal Off?

South China Morning Post broke the story on Friday morning that Beijing may nix the deal between Hong Kong’s CK Hutchinson and BlackRock.

Many had speculated that Xi would resist the urge to scuttle the deal because he was playing it cool with President Trump so as to get a “grand bargain.” It seems that is now less likely.

It will be worthwhile watching this closely, especially as the deadline looms for a deal with ByteDance on TikTok as well. If Beijing prevents both a Panamanian port deal AND a deal with ByteDance for TikTok, then I would expect to see an avalanche of sanctions and trade barriers imposed on the PRC. In many ways we should view the Panamanian ports and TikTok as tripwires that the Trump Administration has set for Xi and his cadres.

Horrific Earthquake in Southeast Asia

As many of you likely saw this week, a 7.7 magnitude earthquake hit Myanmar, a country devastated by civil war and mismanagement.

But it was in Bangkok, Thailand, a thousand kilometers from the epicenter, that perhaps the most shocking event took place.

A building under construction collapsed killing 1 person and injuring 50.

The substack China Story noticed something interesting in the minutes and hours after the collapse.

The PRC State-owned Enterprise that was building the structure was busy deleting its posts and photos about its work on the project. Up until March 28, the China Railways Engineering Corporation (CREC) was extremely proud of its joint venture with Thailand’s Ital-Thai to build the 32-story State Auditor Building next to one of Bangkok’s central railway terminals. The project was weeks away from completion.

CREC held this project up as an important contribution to Xi Jinping’s Belt and Road Initiative.

This was the only building to collapse in Bangkok and it appears that the Chinese Communist Party is desperate to erase any association between its construction firms and this tragedy.

One imagines the truly nightmarish scenario had this building been fully completed and occupied on the day of the earthquake… hundreds, if not thousands, of dead.

Expect that Thai civil society will dig into this story… don’t be surprised when corruption, extravagant spending, and shoddy workmanship is uncovered. Thai authorities and the CCP will try very hard to sweep this one under the rug, but this will place some real strain on Bangkok-Beijing relations.

I guess I’m not surprised by this behavior, it is just a little jarring to see it in real time.

A book you should pick up…

My colleague and friend Eddie Fishman just published a book that I recommend picking up, Chokepoints: How America and Other Great Powers Wage Economic Warfare. To get you interested and give you a preview of Eddie’s book, I recommend listening to Marshall Kosloff’s interview with him on the podcast, The Realignment (Episode 542 – Edward Fishman: Chokepoints - How America and Other Great Powers Wage Economic Warfare).

I got to know Eddie when he was at the State Department late in the Obama Administration and I was at the Defense Department. We were both working on how the tools of economic statecraft could be employed to achieve national security goals. I think Eddie has made an important contribution with this book and if you’re a regular reader of this newsletter, you will benefit from what Eddie has to say.

My copy of Chokepoints.

A New-ish Podcast you should listen to…

My colleague and friend at the Hoover Institution, Elizabeth Economy has a great new podcast out called China Considered, that I recommend subscribing to.

A few weeks ago, she interviewed me for her 10^th episode (Rivalry Redefined: US-China Strategy in a Shifting World with Matthew Turpin) and it posted on Thursday. It is #7 below, but I also recommend listening to her earlier episodes… all folks I have enormous respect for:

• Episode 1 – Matt Pottinger and Evan Medeiros (Trump and Obama Administration Officials)

• Episode 2 – Dan Rosen (co-founder of Rhodium Group)

• Episode 3 – Joerg Wuttke (former President of the EU Chamber of Commerce in China)

• Episode 4 – Jimmy Goodrich (Senior Advisor on Technology at the RAND Corporation)

• Episode 5 – Melanie Hart (former State Department official in the Biden Administration)

• Episode 6 – Diana Fu (professor at the University of Toronto who studies activism in China)

• Episode 7 – Adam Segal (directs digital and cyber policy at the Council on Foreign Relations)

• Episode 8 – Leland Miller (CEO of the China Beige Book)

• Episode 9 – Christopher Walker (VP of Studies and Analysis at the National Endowment for Democracy)

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While this Substack is free to anyone who wants to subscribe, I’d welcome your support with a contribution.

Thanks for reading!

Matt

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MUST READ

1. Wealth and Corrupt Activities of the Leadership of the Chinese Communist Party
   U.S. Office of the Director of National Intelligence, March 20, 2025

Corruption is an endemic feature of and challenge for China, enabled by a political system with power highly centralized in the hands of the CCP, a CCP-centric concept of the rule of law, a lack of independent checks on public officials, and limited transparency. President Xi Jinping launched a sweeping campaign to address persistent corruption in China in 2012, and in the ensuing years the campaign has investigated—and found guilty— nearly five million officials at all levels of government. Corruption in China often involves money in the form of different types of bribery or graft, and open-source research has demonstrated that some officials and their families have amassed significant wealth due to their positions and connections. However, Xi’s anti-corruption campaign more deeply reflects a party-directed securitization, or a targeting of political indiscipline and ideological impurity, particularly at the highest levels of government, in an effort to preserve the CCP’s domestic control and legitimacy.

A lack of transparency within China, pervasive government censorship, and the absence of rules regarding disclosures of leaders’ finances challenges public research on issues of corruption or leaders’ personal wealth. The powerful Central and regional Commissions for Discipline Inspection (CDI) are the lead organizations for enforcing anticorruption in China and operate at all levels of government. These organizations publish some data that helps to illuminate the scope of anti-corruption investigations in China and also provide indications of the extent of corruption overall.

COMMENT – I would have liked to see some more detail… perhaps the IC could build and publish OGE Form 278’s for CCP officials (since they refuse to be transparent about their own financial holdings).

Just as I can access the Public Financial Disclosure documents of senior government officials in the United States, it would be great for the public to see the financial holding of the Politburo Standing Committee Members, as well as the rest of the Politburo and the Central Committee… for example, I wonder how many senior CCP officials hold large shares of Huawei, ByteDance, or other firms?

David Barboza of the New York Times won the 2013 Pulitzer Prize for International Reporting for the work he did uncovering the massive wealth of Wen Jiabao, at the time he was the PRC Premier (nearly $3 billion).

Billions in Hidden Riches for Family of Chinese Leader (David Barboza, New York Times, October 25, 2025)

Listen to Episode 2 of the “To Catch a Thief” podcast below (#3).

[Of note, guess which PRC Government Official called David Barboza the night before the New York Times published this article to threaten him and demand it not be published? … Qin Gang]

Now David Barboza is a truly exceptional journalist… but if he, largely on his own, can discover the hidden wealth of the CCP’s highest leaders… then surely, an intelligence community with a budget of $100 billion per year can discover these details.

My recommendation is to just start publishing it for the world to see.

2. Beware passivity propaganda: China and the Left in the times of Trump 2.0

Gerald Roche, Interregnum, March 19, 2025

Gerald Roche critiques pseudo-anti-imperialism and its deployment of passivity propaganda, which seeks to convince us to ignore state violence and abandon solidarity.

Every day of the second Trump presidency brings new, disgusting surprises. Many people are, rightly, feeling disoriented by the constant onslaught of very bad, and quite often incredibly weird, news. However, we need to go past the noise to the signal beneath: the driving forces of racism, misogyny, ableism, transphobia and all the other forms of violence that give structure to the erratic, far Right agenda we see unfolding before us.

One reason we need to do this is so we can be alert to the more subtle and counter-intuitive impacts of the second Trump presidency, particularly with the way that it will co-opt and weaponize sections of the Left against itself. My aim here is to look at one example that we saw during the first Trump presidency, and that I expect will proliferate again: the spread of what I call passivity propaganda (a term inspired by Irene Bruna Seu’s work on passivity generation).

Passivity propaganda is the lowest hanging fruit on the propaganda tree. To succeed, it just needs to convince you to do nothing. Passivity propaganda asks you to not help people you will never meet, in a place on the other side of the world, where you will almost certainly never set foot. It’s a small ask, and it works.

Here’s two typical examples.

Far away, a protest breaks out. Crowds amass in the streets, calling for freedom. Protestors take to social media, calling for support. As your thumb hovers above a post to share it, a passivity propagandist appears, saying: ‘This is fake news!’

Another example: a report is released, by some journalists, or a non-profit organization, or a team of academics. It details abuses and atrocities, targeting a group of people simply because of who they are. The authors call for visibility for the victims, and accountability for the perpetrators. As you prepare to spread the news, a passivity propagandist appears, saying: ‘Don’t be fooled by these lies!’

Passivity propaganda always appears to block an appeal. The sociologist Stanley Cohen explains what an appeal looks like: ‘Look at this! Listen to what we are telling you. If you didn’t already know about it, now you have no excuse for not knowing. If you don’t care about it, you should. Something can be done. You can and should do something.’ A successful appeal might ‘get the message across’, ‘wake people up’, or ‘get through to them’. It might even drive people to take action: to donate money, educate themselves, or protest.

Passivity propagandists want appeals to fail.

Passivity propaganda is produced by all sorts of people across the political spectrum. There is, of course, plenty of passivity propaganda on the Right, encouraging us to sit back and enjoy the status quo as it grinds the vulnerable into dust and hurtles us towards social implosion and ecosystem collapse. However, what I want to talk about here is our own passivity propaganda – a particular type of Left passivity propaganda. I’m talking about the passivity propaganda of pseudo-anti-imperialism.

Unpacking pseudo-anti-imperialism

Pseudo-anti-imperialism adopts a US-centered view of the world. Only the US is an empire, and anti-imperialism means only opposing the USA. Opposing the USA, in turn, involves supporting states that are considered viable challengers to its hegemony, such as Russia, China, and Iran. Within this logic, anything that reflects negatively on these challenger regimes is always and only support for US empire. The role that passivity propaganda plays here is to prevent people on the Left from responding to appeals that might make Russia, China or Iran look bad.

There is a long tradition of writing against pseudo-anti-imperialism from Left perspectives. Scholar and trade-unionist Rohini Hensman has produced the most detailed and sustained analysis of pseudo-anti-imperialism in her book Indefensible: Democracy, Counter-Revolution, and the Rhetoric of Anti-Imperialism. Hensman offers us a very useful definition of pseudo-anti-imperialism: ‘Genuine anti-imperialists oppose all imperialisms, while pseudo-anti-imperialists oppose some while supporting others.’ Her book offers a historical overview of the development of pseudo-anti-imperialism, from debates in the Soviet Union, up to an analysis of the conflict in Syria. She also situates the arguments of pseudo-anti-imperialists within broader debates about imperialism on the Left, and suggests that promoting democracy and internationalism can counter the harmful effects of pseudo-anti-imperialism.

Gilbert Achcar, a socialist and political theorist, has written about what he calls ‘the anti-Imperialism of fools’ in relation to conflicts in North Africa and the Middle East. He traces the roots of Western ‘political confusion about the meaning of anti-imperialism’ across the Cold War and into the present, examining how it has impacted decisions to support or oppose different factions in conflicts in Libya and Syria. He argues that in order to parse these debates fairly, we need to focus on peoples’ right to self-determination, and adopt a consistent stance of opposition to imperialism by all states.

More recently, we have seen an important contribution to these discussions from Kavita Krishnan, women’s activist and former politburo member of the Communist Party of India (Marxist–Leninist) Liberation. Writing in the wake of the Russian invasion of Ukraine, Krishnan has argued that fascists and authoritarians have co-opted the Leftist rhetoric of multipolarity to justify aggression and ongoing colonialism by Russia and China. For these states, ‘multipolarity’ simply means that they should be left alone to carry out their programs of violence. Krishnan calls on us to abandon the rhetoric of multipolarity as ‘the language of tyrants,’ and to reorient our moral compass towards the victims of genocide and other forms of state violence.

In the work of these and other authors, much more space has been given to exploring Russia’s place in the logic of pseudo-anti-imperialism. Here, I want to turn my attention to passivity propaganda produced by pseudo-anti-imperialists that deflects attention from state violence in China. We saw a lot of this in the first Trump presidency, and we’re going to see more of it this time round.

China, pseudo-anti-imperialism, and passivity propaganda

China provides a useful case study of pseudo-anti-imperialist logic because the modern Chinese state is an imperial project, by any meaningful definition of the term. The China of today is 1.4 billion people in a land mass just slightly smaller than Europe, speaking around 300 languages. It is a continent, not a country. China’s borders were largely established during a spate of imperial expansion that took place in response to Russian colonization of Siberia and Central Asia, and was fueled by silver and spuds stolen from South America by the Spanish and Portuguese. Despite losing control of ‘outer’ Mongolia, this empire largely escaped dismemberment by the United Nations due to a loophole that allowed land-based empires to survive decolonization. As a result, over half of China’s landmass is occupied territory of colonized peoples: Tibetans, Uyghurs, Mongolians, and others. Colonial boarding schools, mass incarceration, criminalization of dissent, structural and interpersonal racism, false accusations of terrorism, and a host of assimilatory policies are the tools of contemporary colonialism in China.

All of this is enabled and justified by widespread passivity propaganda from pseudo-anti-imperialists.

I’ve long been aware of low-level, background passivity propaganda in Leftist circles, because I’m a Leftist and a critic of the Chinese state. Having lived in China, and researched minority language politics, I’ve seen Chinese state violence firsthand. Over the years I’ve encountered passivity propagandists telling me that supporting decolonization in Tibet makes me a CIA stooge, or part of a George Soros color revolution.

COMMENT – I came across this off someone’s recommendation and I think these concepts are really important to understand.

3. AUDIO – To Catch a Thief: China’s Rise to Cyber Supremacy
   Nicole Perlroth, Rubrik, March 17, 2025

Former NSA Director Keith Alexander called it “the greatest transfer of wealth in history.” Hillary Clinton, FBI Director James Comey and President Barack Obama also sounded the alarm on the biggest heist in human history.

Episode 1 – The Five Poisons

Episode 2 – Then They Came for Us

Episode 3 – The Most Dangerous Time in American History

Bonus Episode – Live Panel with Top China and Cyber Experts at the NYSE

COMMENT – Take a few hours and listen to all four episodes (I’m hidden in there for a few comments) … IMO this is the single best summary of what the PRC has done to the United States over the past two decades.

4. Interview with AIT Director Raymond Greene: "We Expect Our Allies to Contribute"

Silva Shih, CommonWealth Magazine, March 21, 2025

In his first interview with CommonWealth since President Trump’s second term, AIT Director Raymond Greene discusses U.S.-Taiwan ties amid rising U.S.-China tensions. He shares insights on defense cooperation, economic ties, and Washington’s expectations for Taiwan. Will the U.S. step in if conflict erupts? What role should Taiwan play in the new global order? Greene breaks it down in this interview.

Following the dramatic Trump-Zelensky talks and TSMC’s announcement of a $100 billion investment in the U.S., Taiwanese society has been deeply divided over the implications.

Upon returning from Washington, Raymond Greene, Director of the American Institute in Taiwan, a seasoned diplomat with three postings in Taiwan, immediately started engaging in public discussions to address these concerns.

As the United States’ sixth-largest trade deficit partner, what does the Trump administration expect from Taiwan? In the event of a military conflict across the Taiwan Strait, will the U.S. intervene? How should Taiwan respond to the issue of "reciprocal tariffs"?

In a 40-minute interview, Greene addressed these pressing questions.

"The two areas I would focus on are the economic and defense fronts," he emphasized.

The following is a summary of the interview:

On U.S. Indo-Pacific Strategy and Taiwan’s Role

Q: Is there anything that’s changed compared with Trump’s first term, and what is consistent with the first term, and also [what is] Taiwan's role in it?

Raymond Greene: I always recommend that people who want to understand the Trump administration’s policies look at the 2020 Indo-Pacific strategic framework, which was declassified right before the end of the first administration.

The strategic framework talks a lot about the importance of working with our allies and partners in the Pacific, and the importance of strengthening our deterrent capabilities in the first island chain. Obviously, we're very focused on increasing Taiwan's asymmetric defense capabilities.

If you look at the Trump administration's second term, you see a lot of these same themes coming through. For example, on inauguration day, we invited the foreign ministers from the [other] Quad countries—India, Australia, Japan—to attend the inauguration and have their first meeting with Secretary Rubio.

You saw that some of the first leaders to visit the Oval Office were the prime ministers of Japan and India.

Of course, much has changed over the past four years. Obviously, we had the invasion of Ukraine in 2022. We had large-scale PLA exercises around Taiwan. We've seen continued escalation and erosion of the cross-Strait status quo. So, I would say the main difference is there's a focus to accelerate, even more than four years ago, our efforts to ensure deterrence in the Indo-Pacific.

And, regarding the connection between the conflict in Ukraine and the Indo-Pacific, as Secretary Rubio said the other day, the sooner we can bring the Ukraine conflict to a conclusion, the faster we'll be able to fully focus our resources and attention on the Indo-Pacific, because that's where we really see the primary challenge to global peace and security.

On U.S. Commitment to Taiwan’s Security

Q: So, you mentioned the strategy looks like [it’s] consistent with the first term. But the approach might be different. There are two things that caught our eyes recently. First, I'm not sure if you read in Foreign Policy, there was a commentary called “The Taiwan Fixation.” And the other thing is, Colby just had a testimony in Congress and mentioned, I directly quote, “I believe the cost of the explicit commitment to Taiwan's defense outweighs its benefits.” So, I'm just wondering if the approach has changed, or if is there any signal to show a shift in how the U.S. views Taiwan?

Greene: I saw the article you're referencing, and I would just say I think the problem with that kind of academic line of argument is they seem to present choices between war or abandoning Taiwan. And obviously, there's a third option—which is I think most beneficial for the United States, Taiwan, and China—and that is maintaining the status quo.

Conservative estimates put the impact of a Taiwan crisis at more than 10 percent of global GDP. But that impact would be many times higher for China and Taiwan.

So, our focus is on maintaining that status quo. That's why Secretary Rubio has stated our position on Taiwan remains unchanged. Our commitments have remained consistent for 45 years, to oppose any attempt to use force or coercion to change Taiwan’s status.

In addition to our statements, we will continue to take actions, including to support Taiwan's ability to defend itself, as well as working with our allies to build a strong network of deterrence in the region.

Q: What about Colby’s statement? Does it signal a policy shift?

Greene: I believe they are consistent with our policy over the last 45 years. We've always had a strategic ambiguity element of our policy, and that's been consistent across administrations.

But I think the key thing is to look at the Taiwan Relations Act, the framework of our Taiwan policy. Look at the consistent support we've had for Taiwan’s self-defense and the work we've done to ensure that there are sufficient deterrent capabilities, as required by the Taiwan Relations Act, in order to deter any force or other forms of coercion to change the social or economic or political conditions in Taiwan.

Q: To what extent will the U.S. intervene, if the worst situation is happening in Taiwan?

Greene: Our focus remains on deterring a conflict from erupting. That is our number one objective in the region.

In this, the U.S. and Taiwan are extremely well aligned. Secretary Rubio has challenged us to justify that all of our policies fit the administration's goal of making America safer, stronger, and more prosperous. Everything we are doing in the U.S.-Taiwan relationship is making both the United States and Taiwan safer, stronger, and more prosperous.

On U.S. Expectations for Allies and Taiwan’s Defense

Q: But we're seeing what’s happening in Europe, and most Taiwanese are concerned about that. Does the U.S. have different thoughts on allies or working with allies?

Greene: One of the guiding principles of the Trump administration is that we expect our allies to help contribute to our collective security. That's why we appreciate Japan's efforts to strengthen its military posture. That's why we very much welcome President Lai's announcement that Taiwan will increase its defense spending up to 3% or more of GDP. I think all of these efforts [are] to jointly share the responsibilities for security.

I would say the same in Europe—we are looking for our NATO partners to also pick up more of the responsibilities for providing deterrence and maintaining peace in that part of the world.

But because we see the real challenge of the 21st century coming from China, and its attempts to change the status quo—not just in the Taiwan Strait, but also in the East China Sea, South China Sea, and Himalaya region—that's where we think the United States really needs to focus our efforts and further strengthen our collaboration with allies and partners to maintain the peace and prosperity that have served the region so well for the last eighty years.

On Economic Cooperation and Tariffs

Q: [Turning to] the business side, because we see that Trump continually emphasizes bringing manufacturing back to the US, we've seen semiconductors so far… Is there any industry that you foresee that Taiwan might play a role in [this effort]?

Greene: Thirty years ago, many Taiwan companies went to mainland China to invest and really were critical in turning China into the factory of the world. But many of these same Taiwan companies have realized that the Chinese investment environment has continuously deteriorated, especially in recent years, whether for political reasons or economic factors.

We think this is a historic opportunity to pivot to the United States, just at a time when the United States is entering into a period of reindustrialization and where the administration is very much committed to creating a positive investment environment, with low regulatory burdens and a positive tax regime. America already has the largest consumer market in the world. We have unlimited energy resources. We think this is a perfect period for U.S. and Taiwan industrial collaboration to enter a new era.

Q: So Taiwanese are also concerned about the reciprocal tariffs. What's your take on [tariffs]? How should we see possible tariffs on Taiwan?

Greene: If I could just step back, I think it's important to look at the context of why President Trump is so focused on addressing some of the inequalities or the imbalances in the international economic system. The U.S. was very generous after the end of World War Two by opening our markets to the world, to help countries that were still trying to recover from the war, to grow their own economies.

We created the international trading system with rules that were meant to facilitate this level of global interchange. But unfortunately, some members of the international community—in fact, many countries—took advantage of this situation to give themselves unfair advantages, taking advantage of U.S. market access, but not offering reciprocal market access in return.

The worst offender is obviously China, which not only took advantage of the trade relationship to, in many areas, hollow out U.S. industry, but also used that economic access, the advantages we gave them in the international trading system, to build up their own military, to build up their own hard power to threaten U.S. national interests.

While in this period of globalization, many companies and many people in America benefited, I think there is a growing public perception that some people benefited in a disproportionate way, whereas many sectors of our society were left behind and disadvantaged.

So, President Trump is very much committed to trying to correct this situation and reestablish a level and fair playing field, so that we can make sure our international economic exchanges benefit the majority of Americans.

I think all of our trading partners, including Taiwan, shouldn't focus so much specifically on tariffs or other sorts of tactical issues, but rather think about how we can ensure that our economic interchange benefits the people on both sides in an equal way.

I think one advantage America has, unlike any other country in the world, is we have all kinds of energy, whether it's traditional fossil fuels like LNG, whether it's green energy technologies like geothermal, or fuel cell technology, or nuclear energy.

One other area for cooperation is economic security, because the U.S. and Taiwan are working together to develop so many advanced technologies. We can deepen our partnership to replace, for example, Chinese supply chains in critical sectors where China has tried to establish vulnerabilities for the rest of the world. We can also work together on export controls—because we want to make sure, as the U.S. and Taiwan develop the most advanced microchips, quantum, and AI technologies, that our adversaries aren't able to obtain them through direct or indirect ways to threaten our shared security interests.

On Strengthening Taiwan’s Defense Capabilities

Q: About the issue of defense, I'm wondering if defense is the top issue Taiwan should work with the Trump administration at this moment.

Greene: I think the two areas I would focus on are the economic and defense fronts.

On defense, as I mentioned, we very much welcome President Lai’s commitment to increasing defense budgets beyond 3% of GDP. In addition to the amount of money that is spent, I think it’s really important to ensure that Taiwan is investing in the right capabilities. We've entered an era of asymmetric warfare, and this presents enormous opportunities for Taiwan. If you look at the world today—for example, the Black Sea, where you have the ability to completely neutralize a much larger naval force just using unmanned platforms like drones and missiles—this is revolutionary in a way we haven't seen for many decades.

The U.S. and Taiwan are very aligned on the priority of obtaining these types of asymmetric capabilities for Taiwan, and that's been the focus of our efforts.

We welcome investment from Taiwan’s defense sector, but we also would like to see Taiwan expand its own production capability in Taiwan, particularly for things like munitions and drones. Because that adds to its own defense and resilience.

More and more technologies like drones are dual use and can be used either for the commercial market or military purposes. Taiwan also has exceptional capabilities for things like advanced microchips and AI systems. So, it's not just traditional defense industrial base collaboration; we see enormous opportunities for civil military dual-use collaboration.

The final area we want to work with Taiwan on is supporting President Lai’s focus on Whole of Society defense and resilience, because in this era, it really is not just the military alone that can ensure deterrence. You really need to have all sectors of society—whether it's central government agencies or local governments, whether it's the private sector or civil society organizations—working together to ensure that society can resist coercion or the use of force. This is a very important initiative and focus that we are very much supportive of.

COMMENT – I’m really glad we have Ray Greene in Taipei. He is a true professional.

5. China releases Mintz employees after two-year detention, company says
   CNN, March 24, 2025

China has released all Mintz employees who had been held in detention for two years since a raid on its Beijing office in March 2023, a spokesperson from the US-based due diligence firm Mintz Group told Reuters in an email.

Chinese authorities detained five local staff in the raid, which turned out to be the beginning of a sweeping crackdown on consultancy and due diligence firms, including Bain & Company’s office in Shanghai and Capvision Partners.

Foreign business lobbies said at the time the crackdown damaged investor confidence in the world’s second-largest economy.

“We are grateful to the Chinese authorities that our former colleagues can now be home with their families,” said a Mintz spokesperson.

Reuters reported in May 2023, citing sources, that Mintz had engaged in corporate due diligence work examining the possible use of forced labor in supply chains linked to China’s Xinjiang region.

Mintz has 12 offices around the world and more than 280 investigators, according to its website.

COMMENT – Two years in prison for doing due diligence work that foreign companies need to make informed investments in a deeply corrupt country.

My advice: don’t do business in the PRC.

6. China Has Already Remade the International System
   Michael B. G. Froman, Foreign Affairs, March 25, 2025

In early February, as he flew in Air Force One above the body of water he’d recently renamed the Gulf of America, President Donald Trump declared that he would levy tariffs on all imported steel and aluminum. Two weeks later, he issued a presidential memorandum laying out new guidance for screening investment from Chinese firms in the United States and U.S. firms into China. And throughout the early weeks of his administration, Trump has emphasized the importance of bringing manufacturing back home, telling firms that, to avoid tariffs, they should make their products in the United States.

Tariffs and protectionism, restrictions on investment, measures designed to drive domestic production: Washington’s economic policy suddenly looks an awful lot like Beijing’s policies over the last decade or so—like Chinese policy with American characteristics.

The U.S. strategy of engagement with China was based on the premise that, if the United States incorporated China into the global rules-based system, China would become more like the United States. For decades, Washington lectured Beijing about avoiding protectionism, eliminating barriers to foreign investment, and disciplining the use of subsidies and industrial policy—with only modest success. Still, the expectation was that integration would facilitate convergence.

There has indeed been a fair degree of convergence—just not in the way American policymakers predicted. Instead of China coming to resemble the United States, the United States is behaving more like China. Washington may have forged the open, liberal rules-based order, but China has defined its next phase: protectionism, subsidization, restrictions on foreign investment, and industrial policy. To argue that the United States must reassert its leadership to preserve the rules-based system it established is to miss the point. China’s nationalist state capitalism now dominates the international economic order. Washington is already living in Beijing’s world.

…

The United States and others are imitating China in large part because China succeeded in a way that was unexpected. Its success in electric vehicles and clean technology did not come from liberalizing economic policies but from state interventions in the market in the name of nationalist objectives. Whether or not the United States can compete with China on China’s playing field, it is important to recognize a fundamental truth: the United States is now operating largely in accordance with Beijing’s standards, with a new economic model characterized by protectionism, constraints on foreign investment, subsidies, and industrial policy—essentially nationalist state capitalism. In the war over who gets to define the rules of the road, the battle is over, at least for now. And China won.

COMMENT – I think Mike Froman, the current President of the Council on Foreign Relations and the former U.S. Trade Representative, makes an important (and provocative) argument. The world has indeed changed, and it changed in ways that the best and brightest from both political parties in the United States (as well as the political elite in Europe and Canada) did not expect.

“Globalization” (à la Thomas Friedman and his 2005 book The World Is Flat: A Brief History of the Twenty-first Century) is dead and buried… obviously international trade is still going strong, but the vision of “Globalization,” “Globalism,” and “Multilateralism” that so animated the 1990s and 2000s is not coming back. That conception of international relations, political economy, and social order is an artifact of an ancien régime.

Let’s just take Friedman’s “Dell Theory of Conflict Prevention” (a follow-on theory to Friedman’s “Golden Arches Theory of Conflict Prevention”) which holds that “no two countries that are both part of a major global supply chain, like Dell’s [how quaint], will ever fight a war against each other as long as they are both a part of the same global supply chain.” This adaptation of capitalist peace theory (which itself is an adaptation of democratic peace theory) served as a subconscious justification for running head-long into building the PRC into the global hub on manufacturing.

In hindsight, it all appears delusional.

Rather than serving as the beacon for the entire 21^st Century, Friedman and others were fixated on ideas that were dying as the ink was drying in his book…

Our challenge now is how do we deal with the world as it is, rather than how we wish it were.

7. AUDIO – Rivalry Redefined: US-China Strategy in a Shifting World with Matthew Turpin

Elizabeth Economy and Matt Turpin, China Considered, March 27, 2025

Elizabeth Economy sits down with Matthew Turpin to discuss the US strategy towards China and the current state of affairs between the two countries.

COMMENT – Liz has a great new podcast.

If you haven’t read her work, like her book The World According to China or her piece in Foreign Affairs titled China’s Alternative Order: And What America Should Learn From It (April 23, 2024), you should.

8. BMW Teams Up with Huawei: Neue Klasse in China to Run HarmonyOS
   Horatiu Boeriu, BMW, March 17, 2025

BMW has announced a strategic partnership with Huawei to integrate the tech giant’s HarmonyOS NEXT into its next-generation Neue Klasse electric vehicles produced in China. This marks a significant step in the BMW’s localization strategy. Meanwhile, Neue Klasse models for global markets will continue to run BMW’s iDrive X operating system which is based on the Android Automotive OS.

The partnership underscores BMW’s increasing alignment with China’s tech ecosystem, where nearly 25% of its mobile application users rely on Huawei devices, according to BMW Group Region China President and CEO Sean Green. The collaboration aims to enhance in-car applications and digital connectivity for HarmonyOS users, ensuring seamless integration between Huawei smartphones and BMW vehicles.

BMW’s decision to adopt Huawei’s HarmonyOS NEXT exclusively in China reflects the country’s rapid digital transformation and the growing preference for self-developed ecosystems. HarmonyOS NEXT, distinct from its previous iterations, operates independently of Google’s Android architecture, allowing Huawei to build a localized, fully integrated system.

Beyond software integration, BMW is accelerating its cooperation with Chinese technology partners, particularly in artificial intelligence, intelligent voice interaction, and large language models. With four major R&D centers in China—Beijing, Shanghai, Shenyang, and Nanjing—BMW has established its largest research footprint outside of Germany.

“China has emerged as a global engine of innovation,” Green stated. “Through collaboration with leading local technology partners in joint R&D and co-creation, BMW is leveraging its system integration expertise to advance local partnerships.”

COMMENT – Apparently, BMW is only using Huawei’s operating system in the PRC, but it signals the extent to which German companies have become captured by the PRC Government.

I have no way of knowing this, but my suspicion is that BMW is doing this to spite the United States and U.S. technology companies. Despite years of effort to get the German Government and its companies to act responsibly with regards to the security threats posed by actions like this, BMW has essentially said f-you.

Berlin (and Munich, BMW HQs) should expect very little sympathy from the United States.

9. Dispatch from Hong Kong: The Panama Canal port sale has put Chinese authorities in a bind

Josh Lipsky, Atlantic Council, March 25, 2025

I landed here last week for a series of meetings and events on digital assets, including central bank digital currencies, stablecoins, and how money can move faster around the world. But in nearly every meeting it wasn’t new technology that dominated the discussion—it was old-fashioned physical infrastructure.

Earlier this month, Hong Kong-based CK Hutchison Holdings announced that it would sell a range of global port assets, including the ones operating in the Panama Canal, to the US private equity firm BlackRock. The deal stunned officials in Hong Kong and their counterparts on the mainland, and not just for the deal’s nearly twenty-three-billion-dollar price tag.

Daily front page headlines in the South China Morning Post detailed the latest twists and turns of the unfolding drama. At the center is the company’s founder, Li Ka-shing. The ninety-six-year-old billionaire began his career selling plastic flowers in the 1950s and helped turn Hong Kong into a hub of global finance. In 2000, he was knighted by Queen Elizabeth and, according to press reports at the time, was considered more powerful than China’s then president, Jiang Zemin. Li took that influence and made a series of brilliantly timed investments in the Chinese mainland, understanding where the economic opportunity would be in the years ahead.

So, it’s understandable why Chinese authorities felt blindsided by his decision to sell the port operations to an American company, right after US President Donald Trump claimed in his inaugural address that China was operating the Panama Canal and “we’re taking it back.” But the level of anger is perhaps what is surprising. An op-ed in the pro-Beijing Ta Kung Pao newspaper (which was then republished by Beijing’s Hong Kong and Macau office) called the sale an act of “betrayal of all Chinese people.” More commentaries have followed, which have called it an act of “submission” and “spineless groveling.” The fact that the deal was announced on the eve of the “two sessions,” China’s most important economic and political event of the year, just added insult to injury for Chinese President Xi Jinping and the Chinese Communist Party.

The entire situation puts both Hong Kong authorities and Chinese officials in a difficult spot. If they make any moves to block the sale—and it’s not even clear whether they could—it would confirm some of the worst concerns about the way Western businesses will be treated in Hong Kong following the passage of the National Security Law in 2020. Right now, Hong Kong is working hard to convince the West that it is still one of the world’s most important financial hubs. As a newspaper report the day I left proudly touted, Hong Kong was “still” the number three financial city behind New York and London. That effort becomes more difficult if this sale is a blocked.

On the other hand, Hong Kong has to show that it’s responsive to Beijing’s concerns. That’s likely why Hong Kong’s chief executive, John Lee Ka-chiu, has taken a balanced approach so far, issuing a statement on the need to weigh the legitimate concerns of society and the importance for businesses to follow the legal process. One of his predecessors, Leung Chun-ying, was less diplomatic, saying: “Do merchants have no motherland?”

Now, Hutchison is working to ensure the deal doesn’t get torpedoed. A report in the South China Morning Post last week said Hutchison would offer twenty-five Hong Kong dollars (about three US dollars) per share as a bonus to shareholders if the deal goes through. The news, unsurprisingly, sent the stock soaring.

At stake here is more than just ports. The challenge facing Hutchison is a microcosm of the tension between finance and national security that is about to play out around the world. Consider the facts. After his inauguration in January, Trump made clear that Chinese companies’ ownership of portions of the Panama Canal was unacceptable. At the same time, he launched a trade war that threatened to slow down global commerce—and hurt the profitability of major port operators such as Hutchison. Weeks later, BlackRock negotiated a deal for a range of assets held by Hutchison. Chinese media have been keen to highlight the longstanding friendship between Trump and BlackRock CEO Larry Fink.

So, what is a veteran businessman like Li supposed to do in a situation like this? He can sell his operations at a profit or wait until the situation deteriorates and he has to sell at a potentially lower rate. He (or members of his family now overseeing the day-to-day operations) likely knew the sale would upset the Chinese authorities, but he also couldn’t ask for permission in advance—likely believing that it wouldn’t be given. If Beijing pushed Hutchison to reject the deal, it would only confirm the suspicions Trump has about the national security priority China puts on port operations. It is truly a tangled geoeconomic web.

The predominant sense in our private conversations during the week was that BlackRock and Hutchison will find a way to seal the deal. There’s too much money at stake, too many aligned interests, and the risks of it failing are too high both for Hutchison and, more importantly, for Hong Kong’s future.

But expect China to find ways to tighten its grip on these kinds of deals going forward. Xi has stated that the world’s reliance on advanced technologies from China would give his country leverage in an economic conflict in the years ahead. Just as important as new technology is hard infrastructure—and Xi knows that, as well. Beijing does not want to be caught blindsided again. The outrage about the ports deal communicated from Beijing in both Chinese and Western media is meant in part to stop any other company from considering something similar. In Hong Kong last week, I could tell that message was being received loud and clear.

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Authoritarianism

10. China Sees Opportunity in Trump’s Upheaval

Jude Blanchette, Foreign Affairs, March 27, 2025

In 2018, Chinese leader Xi Jinping argued that the world was undergoing “profound changes unseen in a century,” a concept that has since become central to Beijing’s geopolitical worldview. The phrase evoked parallels to the dramatic global shifts that followed World War I, including the collapse of European empires and the reordering of international politics. Today, Beijing perceives a similar seismic transformation, this time driven by accelerating technological breakthroughs—in artificial intelligence, biotechnology, and quantum computing—coupled with the growing volatility in U.S. and European domestic politics, and a pronounced economic shift toward the Asia-Pacific region, largely driven by China’s own rapid development.

In 2018, Xi’s analysis might have looked premature. Today, his vision seems increasingly accurate. The Trump administration has launched trade wars with its key economic partners. Europe’s largest conflict since World War II continues in Ukraine, with the prospect of a lasting peace fragile and uncertain. The transatlantic alliance is straining under the weight of U.S. President Donald Trump’s explicit disdain for the European Union. Developments in AI and other emerging technologies, meanwhile, threaten to upend economies, societies, and geopolitical power structures in unprecedented and irreversible ways.

The question now is whether Beijing can exploit the global uncertainty to advance its interests with the United States and Europe—or if it will lose ground amid the turmoil. The U.S.-Chinese relationship, in theory, could stabilize through a “grand bargain” between Xi and Trump, which could reduce tensions on both trade and military issues. But entrenched mistrust between the two sides means that such an agreement—if it gets off the ground at all—risks collapsing into heightened great-power rivalry. In Europe, Beijing sees fresh opportunities to repair its relationships, as Trump’s antagonistic approach weakens transatlantic cohesion and tentative peace discussions in Ukraine raise the prospect of greater regional stability. Yet European leaders remain reluctant to pivot decisively toward China. And if peace talks in Ukraine break down, a renewed conflict would force Beijing into an uncomfortable choice between its European economic ambitions and its alignment with Russia under President Vladimir Putin.

Although careful diplomacy might let China pocket some short-term tactical successes, however Beijing plays its cards, the difficulty of winning over the deeply suspicious United States and Europe make it unlikely that Beijing will achieve lasting strategic gains in either relationship. It is in the rest of the world—in Latin America, Africa, and Asia—that China is most likely to reap the diplomatic benefits of U.S. retrenchment.

COMMENT – It is true that Xi Jinping used the phrase “profound changes unseen in a century” back in 2018… but the time it received the most attention and looked the most accurate was two years ago on March 21, 2023, when Xi and Putin met at the Kremlin.

But Jude’s overall thesis is persuasive, the PRC faces some tough dilemmas with both the United States and Europe. Its economic model, which is even more reliant on exports now than in 2018, requires market access to both (the countries of the Global South combined cannot replace the purchasing power of the consumer markets in the United States and Europe… and neither can the Chinese consumer market).

One point that he misses about the rest of the world, is that those economies are moving up the value chain of manufacturing, just as the PRC did over the last 30 years. Rather than being perpetually stuck as commodity exporters and the dumping ground for Chinese manufactured goods, those countries would like to provide manufacturing jobs for their own citizens, their entrepreneurs would like to get rich, and they would like to enjoy the fruits of economic development.

While Beijing mouths the rhetoric of solidarity with the Global South (trotting out tired tropes about European imperialism and China’s Century of Humiliation), CCP leaders have no interest in granting significant market access to those countries and it will seek to sabotage their efforts to replace the PRC as a manufacturer (see Noah Smith’s March 14, 2025 issue of Noahpinion, China is trying to kneecap Indian manufacturing: An attempt to head off its only future rival).

These dynamics will create significant tensions between Beijing and those countries as we have already seen over the past year as Russia, Turkey, Brazil, Indonesia and others have imposed their own tariffs and trade barriers on Chinese imports to protect their own manufacturing industries. (see the next article below)

I don’t mean to sound like an economic determinist, but one feature of these “profound changes unseen in a century” is that trade flows are shifting, and client-customer relationships are changing.

The PRC is not well positioned economically for these changes.

11. Chinese Exporters Hunt for Alternatives to ‘Irreplaceable’ U.S. Buyers

Yoko Kubota, Wall Street Journal, March 27, 2025

One of the most popular events at a Chinese exporters’ exhibition last week was a session teaching merchants how to sell more in Russia.

Hundreds of attendees listened intently as employees of Russian e-commerce companies explained what Russian consumers like to buy online. Night lights, scented candle sets and educational toys are among the popular goods on one platform—and the cheaper, the better, a presenter said. Audience members snapped photos of the presentation and scanned QR codes to join chat groups to exchange more information.

It was a striking scene for a Chinese export industry that for decades focused mainly on the U.S., the world’s largest consumer market. But pressure from Washington, with escalating tariffs, has forced many Chinese factory owners to confront an existential question: If they can’t sell profitably to the U.S., then where?

Presenters at the Global Cross-Border E-commerce Selection Exhibition, a biannual event in China’s manufacturing hub of Shenzhen, offered many answers. But none of them were entirely reassuring for exporters who built their businesses on American consumers. The anxiety was palpable.

“The U.S. market basically is irreplaceable,” said Mike Wang, 37, a sales manager at the booth of Union Tree, a Christmas tree maker based in China’s eastern export hub of Yiwu.

The event, which featured some 800 manufacturers, is designed to connect Chinese factories eager to sell abroad with buyers, traders and representatives from e-commerce platforms. Booths this year featured everything from power tools to kitchenware to binoculars, as well as cosmetics, jewelry and plastic tablecloths.

Some manufacturers said they are hoping other markets, including Southeast Asia and South America, can help offset the U.S. Others are considering moving factories to places such as Cambodia or Vietnam, which they hope will enable them to get around U.S. tariffs on Chinese goods. Still others are trying to figure out ways to sell directly to consumers, cutting out middlemen and costs. With a little more hustle, perhaps profits can be preserved.

The risk is that none of those options might be enough if President Trump keeps pushing tariffs higher in a bid to force American companies to source more at home. So far, his tariffs have added 20% to the cost of Chinese goods. While importers are responsible for paying tariffs, many U.S. retailers are pressuring their Chinese suppliers to lower prices to help offset the added cost. That could kill off some Chinese factories, which often run on wafer-thin profit margins.

The U.S. president is also expected to unveil a slate of so-called reciprocal tariffs on April 2 that could target countries where Chinese factory owners are thinking of establishing operations to avoid duties, making it hard to figure out where to go.

When it comes to selling abroad, no other single market compares to the U.S. Although Chinese exports to Russia have soared since the invasion of Ukraine, rising 47% in 2023 from a year earlier and 4% last year, growth opportunities are limited. Russia’s population of around 146 million is less than half that of the U.S., its per capita income is much lower, and its economy is beset with inflation and other strains.

Already, Russia is starting to push back against a flood of cheap Chinese imports. It has introduced tariffs on some Chinese goods and raised recycling fees on imported cars, effectively raising the price of vehicles from China.

The Southeast Asian market, meanwhile, is fragmented, with many countries and different languages, cultures and regulations for each. Selling more in China isn’t a great option, either: Although the market is huge, it is extremely competitive, and a weak economy has meant that consumption growth is slow.

COMMENT – As Washington prevents Chinese goods from flowing into the U.S. market, those goods will flow elsewhere. Governments in other countries will object to this dumping and will raise barriers to Chinese goods.

The PRC’s beggar-thy-neighbor trade practices will cause relations to worsen and place the PRC in a difficult position: either continue to dump overcapacity on foreign markets OR make difficult domestic economic and political changes that increases the power of the average Chinese citizen and reduces the power of the Chinese Communist Party.

I would recommend they do the latter, but I suspect they will continue to pursue the former approach.

12. Xi Targets Petty Corruption on a Giant Scale to Soothe China’s Masses
    Chun Han Wong, Wall Street Journal, March 21, 2025

13. CK Hutchison Said to Proceed with Port Deal Amid China Ire

Manuel Baigorri, Dong Cao, and Silla Brush, Bloomberg, March 25, 2025

CK Hutchison Holdings Ltd.’s plan to sell two Panama ports to a BlackRock Inc.-led group is moving ahead as scheduled, people familiar with the matter said, in a sign that negotiations have not yet been disrupted by China’s anger over the transaction.

The parties involved are currently working on finalizing due diligence, tax, accounting and other deal terms, and are still aiming to sign an agreement as planned by April 2, the people said, asking not to be identified discussing private matters.

14. ‘Hong Kong’s CK Hutchison will not sign Panama ports deal next week’

Denise Tsang, Jeffie Lam, and Lam Ka-sing, South China Morning Post, March 28, 2025

Beijing to launch antitrust probe into deal by Li Ka-shing’s conglomerate.

Hong Kong tycoon Li Ka-shing’s CK Hutchison Holdings will not go ahead with the expected signing of a deal next week to sell its two strategic ports at the Panama Canal, the Post has learned, as Beijing revealed it will launch an antitrust probe into the sale.

The State Administration for Market Regulation said on Friday it was looking into the deal.

The sale of CK Hutchison’s two ports at each end of the Panama Canal was part of a US$23 billion deal to sell 43 ports spread over 23 countries to a consortium led by United States investment firm BlackRock. CK Hutchison will pocket US$19 billion.

The investigation was announced after Hong Kong-based pro-Beijing media Wen Wei Po and Ta Kung Pao asked whether the deal required approval through an antitrust review.

“We have noticed this transaction, and will review it in accordance with the law to ensure fair competition in the market and safeguard the public interest,” a spokesman from the anti-monopoly department under the market regulator said in a written reply.

The watchdog did not reveal when the investigation would be launched but its response was later reposted on the Hong Kong and Macau Affairs Office website.

15. Convicted fraudsters stranded abroad after Marshall Islands revokes their passports
    Island Business, March 25, 2025

16. Vanuatu Government cancels fraudulently acquired passports of Chinese nationals
    Island Business, March 17, 2025

17. Chinese hackers are getting bigger, better and stealthier

The Economist, March 25, 2025

China’s power is growing rapidly every year. From warships to missiles, the country is churning out hardware at an extraordinary rate. In the unseen, online world, it is making similar leaps. On March 4th America’s Justice Department charged eight Chinese nationals with large-scale hacking of government agencies, news outlets and dissidents in America and around the world, on behalf of i-Soon, a Chinese company, at the direction of the Chinese government. It also indicted two officials who it said “directed the hacks”.

18. China Cosco may be shipping war's first casualty
    Ka Sing Chan, Reuters, March 24, 2025

19. US Sanctions First Chinese ‘Teapot’ Refinery Over Iran Links
    Daniel Flatley and Alex Longley, Bloomberg, March 21, 2025

20. China poses biggest military, cyber threat to US, intel chiefs say

Michael Martina, Patricia Zengerle, and Erin Banco, Reuters, March 26, 2025

China remains the top military and cyber threat to the U.S., according to a report by U.S. intelligence agencies published on Tuesday that said Beijing was making "steady but uneven" progress on capabilities it could use to capture Taiwan.

China has the ability to hit the United States with conventional weapons; compromise U.S. infrastructure through cyber-attacks; and target its assets in space, the Annual Threat Assessment by the intelligence community said, adding that Beijing also seeks to displace the United States as the top AI power by 2030.

21. China’s ‘red circle’ law firms snap up partners from US rivals
    Chan Ho-him, Financial Times, March 23, 2025

22. AstraZeneca to Invest $2.5 Billion in China Amid Probes
    Helena Smolak, Wall Street Journal, March 21, 2025

23. Donald Trump imposes sanctions on Chinese companies over Iranian oil shipments
    Demetri Sevastopulo and Felicia Schwartz, Financial Times, March 21, 2025

24. Europe will have to zip its lip over China’s abuses

The Economist, March 25, 2025

In these vertiginous times, America’s allies are taking a new look at their relations with China. In recent years, politicians in Europe and elsewhere in the West have talked boldly and clearly about the economic, geopolitical and ethical risks posed by China, an autocratic giant with plans to reshape the world. Now, though, their willingness to speak out may become more selective.

25. China’s Government Is Short of Money as Its Leaders Face Trump
    Keith Bradsher, New York Times, March 21, 2025

26. How Foreign Companies Are Funding China’s Dual-Use Shipyards
    Lingling Wei, Wall Street Journal, March 25, 2025

27. Trump Takes Tough Approach to Choking Off China’s Access to U.S. Tech
    Liza Lin, Wall Street Journal, March 26, 2025

28. U.S. Adds Export Restrictions to More Chinese Tech Firms Over Security Concerns
    Ana Swanson, New York Times, March 25, 2025

29. Xi Tests US Allies in Indo-Pacific as Trump Looks Elsewhere

Bloomberg, March 26, 2025

President Xi Jinping is making China’s presence more felt across the Indo-Pacific region by testing US allies on sensitive issues, as Donald Trump’s attention is taken up elsewhere.

From sending warships off Australia’s coast for unprecedented shooting drills to flying a record number of “grey zone” balloons around Taiwan, and putting pressure on Thailand over human rights issues, Beijing is ramping up efforts to project power in the region. China also issued a strongly worded warning on Taiwan to Tokyo — which doesn’t officially recognize Taipei — against “colluding” with separatists.

30. Apple’s Cook meets top Chinese officials in charm offensive but offers no AI update

Wency Chen, South China Morning Post, March 26, 2025

Tim Cook’s first visit to China this year saw the Apple chief executive meet several high-level government officials and take part in promotional events, as the US tech giant awaits approval to add artificial intelligence (AI) functions to iPhones sold on the mainland.

Cook was among 80 multinational company executives who attended the China Development Forum, an annual event hosted by the Chinese government to facilitate dialogue with global investors. Premier Li Qiang delivered the keynote speech at the forum on Sunday. According to the official Xinhua news agency, Cook and executives from Pfizer, Brookfield, Medtronic, Mastercard and Eli Lilly met Vice-Premier He Lifeng on Sunday afternoon.

Cook continued his China tour on Wednesday, visiting Zhejiang University campus in Hangzhou province during the morning, where he announced a donation of 30 million yuan (US$4.13 million) to the school for app development, according to official media Hangzhou Daily.

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Environmental Harms

31. China Is No Climate Savior
    Seaver Wang, Foreign Policy, March 20, 2025

The numbers don’t lie: Beijing will not drive a global energy transition.

Since taking office, U.S. President Donald Trump has pulled the United States out of the Paris Agreement, paused wind farm leasing on U.S. public lands and offshore waters, and defiantly declared that “we will drill, baby, drill” for oil and gas to achieve energy dominance. In response, climate policy advocates have wasted no time in proclaiming China to be the world’s last best hope for climate action.

“Insofar as there is to be a global climate leader it can now only be China,” wrote economist Adam Tooze. A Chinese climate policy analyst speculated in a Straits Times interview whether this moment might mark structural Western decline in the “climate space” and the rise of “alternative voices.” Bloomberg journalists contrasted Trump’s return against China’s record-breaking solar and wind build-outs, arguing that China could be poised to upstage the United States by assuming global climate leadership. Recent newsletters from Carbon Brief overflow with positive headlines about China’s energy transition efforts while reporting grimly on the Trump-led shift on climate policy.

While the United States now makes for an even more convenient climate pariah than usual, framing Washington as the villain and Beijing as the climate savior ignores the facts of China’s energy use and trajectory. More importantly, selectively framing the debate this way also deflects attention from Beijing’s own emissions, particularly in the coal power and industrial sectors.

As the U.S. withdrawal from the Paris climate agreement fundamentally challenges the usefulness of climate summits and pledges, praise for China’s alleged climate progress validates charges that the climate policy circuit exists only for performative promises and symbolic pageantry.

There is a stark dichotomy between applause for Beijing’s climate rhetoric and the reality of China’s emissions trajectory. Since China signed the Paris Agreement in 2015, it has accounted for 90 percent of all global growth in carbon emissions. China now produces more than 30 percent of the world’s carbon dioxide from fossil fuels. China’s greenhouse gas emissions are more than twice the United States’ and more than four times India’s or the European Union’s.

Five years have passed since Chinese President Xi Jinping’s landmark pledge to achieve net-zero carbon emissions by 2060, but there is little evidence to suggest that the country’s energy system and policies are moving in the right direction. China will very likely miss its 2025 carbon-intensity pledge—an 18 percent reduction in carbon emissions per unit of economic output compared to 2020 levels—along with all of its other 2025 pledges related to limiting coal use and expanding clean power. And far from making good on a widely celebrated 2021 promise to phase out international financing of coal projects, China remains, by far, the leading financier of overseas coal power capacity. At home, Chinese planners started construction of 94.5 gigawatts of coal power generation in 2024 alone, roughly equal to the power generated by the entire U.S. nuclear power sector.

China’s emissions trajectory illustrates the limitations of the most venerated global climate pledge of all: limiting warming to 1.5 degrees Celsius (or about 2.7 degrees Fahrenheit) above preindustrial levels by the end of the century. Even if China’s carbon emissions peaked this year and then plummeted linearly to zero by 2060, China alone would consume the entire world’s remaining carbon budget for a 66 percent chance of achieving the 1.5 degree goal.

COMMENT – Perhaps the most frustrating part of observing China policy over the past 15 years has been the naivety of the climate lobby. Their take over of large swaths of U.S. policy-making during Obama’s second term made it much more difficult to deal with the PRC as it was, rather than how some folks wished things were… much of that blame can be placed at the feet of Secretary of State John Kerry, who largely rejected his predecessor’s clear-eyed understanding of the PRC and adopted a set of priorities untethered from reality.

Unfortunately, Kerry continued those efforts (though with much less influence) during the Biden Administration.

32. A River Crisis Prompts Rare Coverage

Lingua Sinica, March 24, 2025

Chinese media outlets have taken the unusual step of more openly covering a toxic thallium contamination in Hunan’s Leishuei River, exposing a crisis kept under wraps for a full week.

According to rare reports today from Chinese media, an environmental crisis is unfolding along a stretch of the Leishuei River in Hunan province that impacts the prefectural city of Chenzhou, home to more than four million people. Abnormal concentrations of thallium — a highly toxic, colorless heavy metal that causes organ damage and cancer through water contamination — have reportedly prompted the city to activate a Level IV emergency response, and residents are stockpiling drinking water.

In neighboring Guangdong province, the Southern Metropolis Daily, a commercial newspaper published under the state-run Nanfang Daily Group, splashed the crisis across its front page today, with the headline: “Thallium Abnormality in Hunan’s Leishuei River.”

According to reports from both the Southern Metropolis Daily and Caixin Media, the crisis began nearly a week ago, on March 16, as automatic monitoring stations along a section of the river between the cities of Chenzhou and Hengyang, population 6.6 million, showed abnormal thallium levels, “causing trans-municipal pollution and threatening downstream water safety”.

Jimu News, an online official outlet from Hubei province, immediately to the north of Hunan, reports that both Chenzhou and Leiyang cities have established emergency command centers to address abnormalities in local water quality in the Leishuei basin. Local officials have insisted that drinking water remains safe in the area impacted by the abnormal readings. However, Shanghai’s The Paper said in a report this afternoon, adding wider context to the breaking story, that abnormal thallium concentrations had been detected in 17 out of 22 drinking water sources along the Xiangjiang River in Hunan province, a separate basin, since 2020 — pointing potentially to wider and more longstanding public health risks.

It was only yesterday that local government in Chenzhou finally acknowledged publicly through its government website what local officials had been responding to for a week: “Water quality in some sections of the Leishuei basin has shown abnormalities.” This public statement came seven days after automatic monitoring stations first detected abnormal thallium levels on March 16, and six days after Yongxing County activated its Level IV environmental emergency response, the Southern Metropolis Daily reported.

The more probing coverage over the past 24 hours tentatively breaks a pattern that has persisted through much of President Xi's tenure, in which central state-run media outlets control coverage of breaking stories, with official narratives amplified across the information sphere. This restricted approach was epitomized during the June 2015 Oriental Star cruise ship tragedy, when hundreds of Chinese media outlets were ordered to use only Xinhua and CCTV reports, effectively silencing independent coverage of the disaster that claimed over 440 lives.

President Xi reinforced these strict media controls during a February 2016 visit to the Communist Party's official People's Daily, where he emphasized that "all news media run by the Party and government... must have the Party as their surname." The burst of coverage that a handful of outlets like the Southern Metropolis Daily have given to Hunan’s water contamination crisis is a welcome change — though it remains to be seen whether such reporting will continue.

33. Beijing faces pushback over ambitious hydropower project plans
    Joe Leahy, Financial Times, March 21, 2025

34. Nvidia’s China sales face threat from Beijing’s environmental curbs
    Cheng Leng, Zijing Wu, and Michael Acton, Financial Times, March 25, 2025

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Foreign Interference and Coercion

35. Key Takeaways of Taiwan President Lai’s 17 Strategies Responding to Threats from China

Judy Lin, CommonWealth Magazine, March 14, 2025

In response to escalating threats from China, Taiwan's President Lai Ching-te has launched a comprehensive set of 17 strategies to fortify national security across five critical domains, including safeguarding sovereignty and combating espionage.

Taiwan’s President Lai Ching-te outlined Taiwan's comprehensive strategy to counter escalating threats from China, emphasizing national sovereignty, unity, and resilience in a high-level national security meeting on March 13.

Lai held a press conference following the meeting to address five major threats posed by China: threats to Taiwan’s sovereignty, military infiltration, obscuring national identity, societal infiltration through cross-strait exchanges, and economic coercion. He announced 17 strategies, including:

Responding to Threats to National Sovereignty

• 1) Promote the Four Pillars of Peace action plan to demonstrate Taiwan’s resolve against annexation by China.

• 2) Collaborate with allies to convey Taiwan's opposition to China's efforts to erase its sovereignty internationally.

Responding to Military Infiltration and Espionage

• 3) Restore the military trial system to handle cases involving active-duty personnel suspected of treason or espionage.

• 4) Establish personnel management acts for military judges and separate organization acts for military courts and prosecutors.

• 5) Revise regulations for retirement benefits and penalties for expressions of loyalty to China by military personnel.

Responding to Threats Against National Identity

• 6) Enhance scrutiny of Taiwanese citizens applying for identification documents in China, especially military personnel, civil servants, and educators.

• 7) Implement stricter requirements for Chinese nationals applying for permanent residency in Taiwan, prohibiting dual identity status.

• 8) Adjust residency systems for individuals from Hong Kong or Macau with additional provisions for long-term residency.

Responding to United Front Infiltration Through Cross-Strait Exchanges

• 9) Raise public awareness about risks associated with travel to China and implement registration systems.

• 10) Establish a disclosure system for exchanges with China involving public officials and welfare organizations.

• 11) Restrict approval for Chinese individuals coming to Taiwan based on their united front history and cross-strait conditions.

• 12) Depoliticize cultural, academic, and educational exchanges while promoting healthy cross-strait interactions.

• 13) Enhance support for Taiwan’s cultural industries to strengthen democratic cultural creation and competitiveness.

• 14) Provide entertainers with guidelines on conduct in China and address actions that endanger Taiwan's dignity.

Responding to Economic Coercion

• 15) Strengthen measures against cognitive warfare and cybersecurity threats via AI, internet applications, and other tools.

• 16) Conduct a comprehensive review of administrative ordinances related to national security enforcement.

• 17) Implement legal frameworks to address gaps in regulations ensuring effective enforcement of national security measures.

These strategies reflect Taiwan’s determination to safeguard its sovereignty, democracy, and economic security against escalating threats from China.

President Lai stressed the importance of solidarity among citizens to resist division and pledged that the government would take all necessary steps to protect Taiwan’s democracy and prosperity.

Overall, this announcement marks a significant escalation in Taiwan's defensive posture against China's multifaceted strategies to undermine its sovereignty and influence its society. It signals Taiwan's determination to uphold its autonomy while navigating complex geopolitical challenges.

36. Taiwan President’s Gambit: Time for a Tougher Stance on China
    Chris Buckley and Amy Chang Chien, New York Times, March 23, 2025

37. Secretive Chinese network tries to lure fired federal workers, research shows

A.J. Vicens, Reuters, March 25, 2025

A network of companies operated by a secretive Chinese tech firm has been trying to recruit recently laid-off U.S. government workers, according to job ads and a researcher who uncovered the campaign.

Max Lesser, a senior analyst on emerging threats with the Washington-based think tank Foundation for Defense of Democracies, said some companies placing recruitment ads were "part of a broader network of fake consulting and headhunting firms targeting former government employees and AI researchers."

38. Chinese Communist Party Covert Operations Against Taiwan
    Peter Mattis and Cheryl Yu, Global Taiwan Institute, March 21, 2025

39. How Beijing lures Taiwan’s diplomatic partners into switching recognition
    VIDEO, Gervasio Hsu, et al., Atlantic Council, March 24, 2025

40. How Elon Musk’s SpaceX Secretly Allows Investment from China

Joshua Kaplan and Justin Elliott, ProPublica, March 26, 2025

As a U.S. military contractor, SpaceX sees allowing Chinese ownership as fraught. But it will allow the investment if it comes through secrecy hubs like the Cayman Islands, court records say. “It is certainly a policy of obfuscation,” an expert said.

Elon Musk’s aerospace giant SpaceX allows investors from China to buy stakes in the company as long as the funds are routed through the Cayman Islands or other offshore secrecy hubs, according to previously unreported court records.

The rare picture of SpaceX’s approach recently emerged in an under-the-radar corporate dispute in Delaware. Both SpaceX’s chief financial officer and Iqbaljit Kahlon, a major investor, were forced to testify in the case.

In December, Kahlon testified that SpaceX prefers to avoid investors from China because it is a defense contractor. There is a major exception though, he said: SpaceX finds it “acceptable” for Chinese investors to buy into the company through offshore vehicles.

“The primary mechanism is that those investors would come through intermediate entities that they would create or others would create,” Kahlon said. “Typically they would set up BVI structures or Cayman structures or Hong Kong structures and various other ones,” he added, using the acronym for the British Virgin Islands. Offshore vehicles are often used to keep investors anonymous.

41. 6 foreigners, 2 Pinoys held for espionage, kidnapping on Subic Island
    Joanna Rose Aglibot, Global Nation, March 20, 2025

42. Translation: “Why is Everyone Talking About China ‘Seizing’ Australia?”
    Cindy Carter, China Digital Times, March 25, 2025

43. Envoy Warns Canada Against Using China as ‘Bargaining Chip’ With US

Laura Dhillon Kane, Bloomberg, March 25, 2025

China’s ambassador warned the Canadian government against using it as a “bargaining chip” in trade negotiations with the US, but said it’s ready to pursue a bilateral free trade agreement if Canada removes barriers to Chinese investment.

Wang Di, who became Beijing’s representative in Ottawa last year, said in an interview that China firmly respects Canada’s sovereignty and territorial integrity. US President Donald Trump has repeatedly said the northern nation should be the 51st state.

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Human Rights and Religious Persecution

44. Xi’an Pastor Chang Yuguang, Wife Still Under Strict Detention Conditions

Tao Niu, Bitter Winter, March 26, 2025

Their son reports about the difficult life in jail of the Xi’an couple sentenced to seven years for printing Christian books.

Last week, the son of Pastor Chang Yuguang (also known as Chang Yuchun) and his wife Li Chenhui of Xi’an, Shaanxi province, circulated a letter among human rights organizations, excerpts of which we reproduce below.

Pastor Chang and his wife were arrested on July 21, 2020, and charged with “illegal business operations” for printing Christian books without authorization. Their printing company was duly registered with the authorities but religious books require a specific authorization.

On August 19, 2021 the Xi’an Gaoling District Court sentenced them to seven years in jail. On November 15, 2021, the sentence was confirmed by the Appeal Court.

Previously, the son of Pastor Chang had reported that he had been tortured by the police and badly beaten by fellow inmates, who asked for “protection money.” They also connived with the guards as they tried to compel Chang to sign a declaration renouncing his faith. The son alludes to this situation in the letter, when he reports that the authorities refused to examine his injuries resulting from the beatings but transferred him to a somewhat less violent jail area.

45. The Thief Who Became a Celebrity
    Emily Feng, The Wire China, March 23, 2025

When Zhou Liqi went viral on the Chinese internet for stealing scooters to protest lack of opportunity, he sparked a debate between the popular movement of “lying flat” and the state’s desire for “positive energy.” The state won.

46. Thailand claims deported Uyghurs are well after Xinjiang visit
    Francesca Regalado, Nikkei Asia, March 21, 2025

47. Thai officials secretly planned to deport Uyghurs while making repeated public denials
    Dake Kang, Huizhong Wu and Jintamas Saksornchai, AP News, March 24, 2025

48. The European Parliament Condemns Thailand’s Deportation of Uyghur Refugees to China

Marco Respinti, Bitter Winter, March 19, 2025

A resolution was adopted in Brussels. Bangkok’s surrender to China starts producing international consequences.

49. Journalist Zhang Zhan Soon Facing Trial

International Federation for Human Rights, March 24, 2025

The Observatory has been informed about the imminent trial, ongoing arbitrary detention and ill-treatment of citizen journalist and human rights defender Zhang Zhan. Initially targeted by Chinese authorities for her coverage of the Covid-19 pandemic in 2020, she is now being further persecuted for supporting a fellow human rights defender. Ms Zhang is a well-known and outspoken journalist on the situation of human rights in China and a former lawyer whose licence was suspended in retaliation for her activism.

At the beginning of March 2025, news emerged that Ms Zhang will soon be tried at the Pudong New Area People’s Court in Shanghai on the charge of "picking quarrels and provoking trouble" (Article 293 of China’s Criminal Law). The date set for the hearing is still unknown at the time of publication of this Urgent Appeal. The same media reports also indicate that the prosecutors are seeking a prison sentence of four to five years.

The Observatory recalls that on 13 May 2024, Zhang Zhan was released from prison after serving a four-year sentence on the same charge. Following her release, she travelled to Gansu province to help pro-democracy activist Zhang Pancheng secure legal representation. Mr Zhang (who is not related to Zhang Zhan) has been in detention without access to legal representation since July 2024, after issuing a statement denouncing the continued surveillance against him. Following this visit, in late August 2024, Shanghai police officers travelled over 1,400 kilometres to Zhang Zhan’s hometown in Shanxi to take her into custody.

On 18 November 2024, Ms Zhang was formally arrested on the charge of "picking quarrels and provoking trouble". At the time of publication of this Urgent Appeal, she is being held at the Pudong Detention Centre in Shanghai.

According to multiple reports, including one published on 25 January 2025 by Rights Defense Network, Ms Zhang has engaged in intermittent hunger strikes to protest her arbitrary detention. In response, detention centre personnel have reportedly subjected her to force-feeding through a gastric tube – a practice that constitutes ill-treatment and in some cases torture, in violation of the Convention against Torture ratified by China in 1988, and that poses a serious threat to her health.

Ms Zhang’s lawyer, based in Shanghai, has been allowed to meet with her but has been under pressure from the authorities not to disclose the case details publicly.

50. ICT reiterates concerns of UN Special Rapporteur on status of Tsongon Tsering

International Campaign for Tibet, March 27, 2025

Yesterday, multiple UN Special Rapporteur offices made public a joint communication to the Chinese government, in the form of an allegation letter, related to the summoning and interrogation of environmental human rights defender Tsongon Tsering (also spelled “Tsogon Tsering”) and his subsequent detention for his work protesting sand mining in Ngaba (Chinese: Aba Tibetan and Qiang Autonomous) Prefecture, Sichuan.

In their letter, dated January 21, 2025, the Special Rapporteur highlights Tsering’s work as an environmental activist leading a volunteer initiative of around 50 members who work to clean up their local environment and their activities to prevent future pollution.

As ICT previously reported in December, the incarceration of Tsongon Tsering related to the protests of illegal sand and gravel mining in Tsaruma village, Kakhong County follows a trend of punishment for those exposing environmental neglect by the CCP in Tibet and specifically, inaction of party officials in protecting critical water sources in Asia – functions that fell victim to larger issues of corruption.

51. Fleeing Hong Kong Wasn’t Enough

Cora Engelbrecht, The Atlantic, March 25, 2025

China’s war on dissidents comes to the United Kingdom.

Finn Lau thought he had escaped China’s reach when he got to London. He’d come from Hong Kong, where Chinese authorities were rapidly consolidating control. An extensive protest movement had sprung up in response, which Lau was helping to lead. But he fled after local officials arrested him at a pro-democracy demonstration in 2020. Months later, while he was walking down a quiet street in London, three masked men jumped him and beat him unconscious. Now 31, Lau still has a faint scar on his boyish face.

British authorities called the incident a hate crime, but Lau was convinced that Beijing had sent the men to silence him. He wasn’t being paranoid: Last year, Chinese authorities declared that Lau would be “pursued for life.” They froze his remaining assets in Hong Kong and offered a bounty for information leading to his arrest. Since then, fake journalists have approached Lau seeking interviews, dozens of social-media accounts have impersonated him, and he’s received death threats. A group on Telegram posted his address in London, forcing him to move multiple times. The intimidation extended to his family members in Hong Kong. Eventually they had to flee too.

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Industrial Policies and Economic Espionage

52. Pacific nation of Kiribati explores deep sea mining deal with China
    Islands Business, March 19, 2025

53. China's restaurants race to the bottom in deflation-hit economy
    Laurie Chen, Reuters, March 21, 2025

54. Switching off plants: Chinese copper smelters grapple with margin collapse
    Lewis Jackson, Reuters, March 20, 2025

55. BYD aims to double overseas sales to 800,000 in 2025, chairman tells analysts

Reuters, March 26, 2025

56. China’s rare earth dominance could crumble in 10 years, CAS study forecasts
    Stephen Chen, South China Morning Post, March 21, 2025

57. Immediate Measures to Increase American Mineral Production
    White House, March 20, 2025

58. China Says It’s Prepared for Shocks as US Tariffs Loom
    Katia Dmitrieva, et al., Bloomberg, March 23, 2025

59. China built hundreds of AI data centers to catch the AI boom. Now many stand unused.

Caiwei Chen, MIT Technology Review, March 26, 2025

60. U.S.-China Drugs Tie-ups Come Under Threat
    Rachel Cheung, The Wire China, March 23, 2025

61. China’s Own Elon Musks Are Racing to Catch Up to SpaceX
    Clarence Leong, Wall Street Journal, March 23, 2025

62. Trump Ally Visits Beijing to Pave Way for Xi Summit
    Brian Spegele, Wall Street Journal, March 23, 2025

63. Chinese officials weigh Japan’s 1980s strategy—restraining exports while charging more—for products such as electric vehicles or batteries
    Lingling Wei, Wall Street Journal, March 21, 2025

64. Trump Has a China Trade War Weapon He Hasn’t Picked Up
    Richard Vanderford, Wall Street Journal, March 21, 2025

65. To encourage growth, Xi Jinping offers subsidies for upgrades of business and household equipment.
    Joseph C. Sternberg, Wall Street Journal, March 20, 2025

66. US military cuts: are ‘budget hawks’ getting upper hand over ‘China hawks’?
    Seong Hyeon Choi, New York Times, March 21, 2025

67. China’s premier tells foreign trade enterprises to be ready to ‘combat storms’
    Silvya Ma, South China Morning Post, March 21, 2025

68. Chinese Stocks in Hong Kong Cap Worst Two-Day Drop Since October
    Bloomberg, March 21, 2025

69. China Imports of US Commodities, Cars Collapse in New Trade War
    Bloomberg, March 20, 2025

70. Open Questions: Economist Michael Pettis on China’s consumption paradox and the pitfalls of a trade war
    Carol Yang, South China Morning Post, March 24, 2025

71. Hong Kong's 'business as usual' tune resonates despite CK Hutchison saga
    Kenji Kawase, Nikkei Asia, March 23, 2025

72. China equity issuance doubles as tech race draws back global investors
    Scott Murdoch, Reuters, March 24, 2025

73. Amid Trump Tariffs, Where Do China-Mexico Ties Stand?
    R. Evan Ellis, The Diplomat, March 22, 2025

74. How China Beat Out the U.S. to Become the Top Player in Rare-Earths Refining
    Jon Emont, Wall Street Journal, March 24, 2025

75. China explores services subsidy to boost weak domestic demand
    Joe Leahy and Cheng Leng, Financial Times, March 24, 2025

76. Italy’s Pirelli pushes Chinese owner to cut stake amid fears of Trump freeze-out
    Silvia Sciorilli Borrelli, Financial Times, March 26, 2025

77. Pirelli's Italian and Chinese shareholders clash over governance

Giulio Piovaccari, Reuters, March 25, 2025

Chinese and Italian shareholders in Pirelli are at odds over the group's governance, two sources said, potentially leading to a failure to approve the tyremaker's financial results for 2024 at a board meeting scheduled for Wednesday.

China's state-owned Sinochem is the largest investor with a 37% stake in Pirelli, a factor which could hurt the group's activities in the U.S. as Washington cracks down on Chinese technology in the automotive industry.

The sources said discussions are ongoing over how to further reduce Sinochem's influence on the company, after the Italian government intervened in 2023 to curb the Chinese group's powers and shield the autonomy of Pirelli management.

This could include convincing Sinochem to cut its stake, while alternative options could entail Rome removing Sinochem's voting rights in Pirelli, one of the sources said.

Pirelli declined to comment on the reports, while representatives of Sinochem were not immediately available.

COMMENT – You mean to say that there are problems arising from a PRC State-owned Enterprise that was allowed by the Italian government to take a huge stake in an iconic Italian brand… I’m shocked.

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Cyber and Information Technology

78. China sale of deep-sea surveillance robots to Middle East buyer signals deepening tech
    Zhang Tong, South China Morning Post, March 21, 2025

79. Malaysia to crack down on Nvidia chip flows under US pressure
    Owen Walker and Alec Russell, Financial Times, March 23, 2025

80. AI expert Guo-Jun Qi leaves US for China
    Ling Xin, South China Morning Post, March 23, 2025

81. China's SiCarrier emerges as challenger to ASML, other chip tool titans
    Cheng Tingfang and Lauly Li, Nikkei Asia, March 24, 2025

82. Jack Ma-Backed Ant Touts AI Breakthrough Using Chinese Chips
    Lulu Yilun Chen, Bloomberg, March 23, 2025

83. China tech giants dig pricey trench for AI war
    Robyn Mak, Reuters, March 20, 2025

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Military and Security Threats

84. Murky Waters: Navigating the Risks of China’s Dual-Use Shipyards

Matthew P. Funaiole, Brian Hart, and Aidan Powers-Riggs, CSIS, March 25, 2025

China has emerged as the undisputed leader of the global shipbuilding industry. Over 300 shipyards dot China’s seaboard, churning out more than half of the world’s commercial vessels each year. These shipyards build the merchant ships that power global trade, but many are also charged with building China’s rapidly expanding navy.

Foreign companies have poured billions of dollars of revenue and transferred key technologies into these dual-use shipyards, accelerating China’s naval modernization. In underwriting the growth of China’s military and economic power, they risk marginalizing U.S. and allied competitiveness in a key industry and undermining peace and security in the Indo-Pacific.

85. China demonstrated ‘satellite dogfighting,’ Space Force general says
    Courtney Albon, Defense News, March 18, 2025

86. China Is Ready to Blockade Taiwan. Here’s How.
    Joyu Wang and Austin Ramzy, Wall Street Journal, March 23, 2025

87. China’s shadow fleet threatens Indo-Pacific communications

Mercedes Page, The Strategist, March 25, 2025

China is using increasingly sophisticated grey-zone tactics against subsea cables in the waters around Taiwan, using a shadow-fleet playbook that could be expanded across the Indo-Pacific.

On 25 February, Taiwan’s coast guard detained the Hong Tai 58 after a subsea cable was cut in the Taiwan Strait. The vessel was registered to Togo but crewed entirely by Chinese nationals. It had Chinese characters on its hull and operated under multiple identities with conflicting markings, documentation and tracking data. In another incident in early January, the Shunxing 39—a Chinese-owned vessel flagged under both Cameroon and Tanzania—was implicated in damaging a section of the Trans-Pacific Express subsea cable, an important telecommunications link between Taiwan and the United States.

While China has targeted Taiwan’s undersea cables for years as part of its grey-zone operations, it has subtly shifted tactics. Previously, vessels involved in suspected acts of sabotage were registered to China. Now, they are increasingly operating under foreign flags, forming a shadow fleet. This strategy resembles Russia’s subsea cable tactics in the Baltic Sea.

88. China's MSS Doxxes and Threatens Taiwanese APT Operators
    Tom Uren, Risky Biz, March 20, 2025

89. The Real Meaning Behind China’s Live-Fire Drills Near Australia and New Zealand

Dougal Robertson, The Diplomat, March 26, 2025

The evolution of PLA Navy far seas training suggests it is getting closer to operationalizing theater-level concepts designed to defeat the U.S. Navy.

The recent circumnavigation of Australia by People’s Liberation Army Navy (PLAN) warships suggests the PLAN is getting closer to operationalizing theater-level concepts such as blocking key archipelagic maritime chokepoints and disrupting U.S. and allied force flow and sustainment in the South Pacific, part of the PLAN desire to defeat the U.S. Navy in a potential future “high end naval war.”

In a sign of increasing confidence in the PLAN’s ability to operate beyond the second island chain, a PLAN Task Group completed a circumnavigation of Australia during February and March. The deployment included a live-fire exercise in the Tasman Sea roughly halfway between Australia and New Zealand. The activity was noteworthy not just for the circumnavigation of Australia (a first for the PLAN) but also for the inclusion of the Type-055 cruiser in a far seas deployment and for the concurrent maritime training activity in the East and South China Seas.

90. China’s navy sends a steady drumbeat of ships around Australia

Joe Keary, The Strategist, March 10, 2025

China’s deployment of a potent surface action group around Australia over the past two weeks is unprecedented but not unique. Over the past few years, China’s navy has deployed a range of vessels in Australia’s vicinity, including state-of-the-art warships, replenishment ships, intelligence-gathering ships, survey ships, satellite support ships and hospital ships.

Together, these deployments paint a picture of a country that is undertaking sweeping efforts to transform its navy into a formidable blue water force, capable of regularly projecting hard and soft power to our region.

China’s navy, now the largest in the world by number of vessels, has a vast range of ships that can undertake a broad scope of tasks and we have seen nearly all varieties of ship in our region in the past five years.

In October, China put on a show of force in the South Pacific by sending two warships to Port Vila in Vanuatu. One was a Type 055 cruiser, marking the first known deployment of this advanced warship class to the South Pacific. The deployment was intended to send a clear signal of China’s ability to project power beyond its traditional areas of influence.

Unlike the current action group circumnavigating Australia, Chinese warships are not typically accompanied by replenishment ships (the exception being a 2019 deployment that appeared in Sydney Harbour after conducting operations in the Gulf of Aden). The addition of replenishment ships to Chinese action groups enables greater force projection into the Pacific.

Chinese Type 815 intelligence ships are regular visitors to our region. Since 2017, China has been sending at least one such ship to Australia’s north to electronically eavesdrop on our biennial Talisman Sabre military exercise with the United States and other partners. At the most recent Senate estimates hearing, Chief of Defence Force Admiral David Johnston noted that an intelligence ship had travelled as far as Sydney after the 2023 Talisman Sabre exercise.

91. Assessing China’s Nuclear Decision-Making
    Jacob Stokes, CNAS, March 20, 2025

92. Large drone spotted near border with PNG as Chinese warships passed nearby
    Islands Business, March 5, 2025

93. China unveils a powerful deep-sea cable cutter that could reset the world order
    Stephen Chen, South China Morning Post, March 22, 2025

94. CMSI Note 14: Bridges Over Troubled Waters: Shuiqiao-Class Landing Barges in PLA Navy Amphibious Operations
    J. Michael Dahm and Thomas Shugart, U.S. Naval War College, March 20, 2025

95. How a Renowned Hong Kong Tycoon Ended Up on Beijing’s Bad Side Over Panama Canal Deal
    Rebecca Feng and James T. Aeddy, Wall Street Journal, March 20, 2025

96. The Warship That Shows Why the U.S. Navy Is Falling Behind China
    Alitair McDonald and ordon Lubold, Wall Street Journal, March 20, 2025

97. ‘Who Will Come to Invest?’ China’s Attacks on Panama Canal Deal Alarm Hong Kong
    Alexandra Stevenson and Joy Dong, New York Times, March 21, 2025

98. Commerce Further Restricts China’s Artificial Intelligence and Advanced Computing Capabilities
    Bureau of Industry and Security, March 25, 2025

99. The U.S. Missile Launcher That Is Enraging China
    Gabriele Steinhauser, Wall Street Journal, March 25, 2025

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One Belt, One Road Strategy

100. Countering the Digital Silk Road: Indonesia
     Vivek Chilukuri and Ruby Scanlon, CNAS, March 20, 2025

101. Exclusive: India's $23 billion plan to rival China factories to lapse after it disappoints
     Sarita Chaganti Singh, Reuters, March 21, 2025

102. Nigeria courts Chinese investment as interest booms in oil, gas and bigger opportunities
     Jevans Nyabiage, South China Morning Post, March 24, 2025

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Opinion

103. Who’s Afraid of the China Select Committee?
     Jacqueline Deal and Michael Lucci, Real Clear World, March 23, 2025

104. China’s Tech Triple Play Threatens U.S. National Security
     Craig Singleton, Real Clear Defense, March 25, 2025

Chinese Communist Party Chairman Xi Jinping has defiantly declared that technological innovation is the “main battlefield” in China’s quest for global preeminence. But, Beijing’s bold bid to transform itself into a global science superpower is not merely an economic imperative—it is a means to strengthen China’s military might and cyber capabilities, with grave implications for the United States.

At the center of Xi’s vision are what he calls China’s “new productive forces”—breakthroughs in advanced batteries, biotech, LiDAR, drones, and other emerging technologies that promise to redefine the next industrial revolution. By dominating these sectors, Beijing aims to ensure Chinese technology is deeply embedded within critical American supply chains—everything from power grids and ports to communications networks —thereby converting China’s commercial success into a powerful geopolitical tool of leverage.

Here at home, Beijing’s strategy is unfolding in three interlocking phases—penetrating, prepositioning, and profiting—which together form an insidious framework that both erodes America’s technological edge and undermines homeland security.

Recently exposed Chinese state-sponsored hacking campaigns—Salt, Volt, and Flax Typhoon—exemplify Beijing’s systematic approach to penetrating U.S. networks and critical infrastructure. The Salt campaign exploited vulnerabilities in telecommunications systems, allowing attackers to intercept voice and text communications and thereby compromise both civilian privacy and government operations. The Volt operation targeted industrial control systems, breaching energy and manufacturing networks to gain remote control over essential infrastructure. Meanwhile, Flax Typhoon focused on defense and government networks, exfiltrating sensitive data and installing persistent backdoors to facilitate future sabotage.

Collectively, these campaigns reveal how Chinese hackers methodically exploit software and hardware weaknesses to harvest critical intelligence and maintain enduring access to sensitive U.S networks, often with next-to-no consequences. Yet infiltration is not an end in itself. Once inside, Beijing systematically prepositions latent capabilities throughout our physical and digital supply chains, setting the stage for future coercion.

105. Economic security and geostrategic competition: tariffs don’t equal coercion

James Corera, The Strategist, March 25, 2025

The Trump administration’s decision to impose tariffs on Australian aluminium and steel has surprised the country. This has caused some to question the logic of the Australia-United States alliance and risks legitimising China’s economic coercion.

Australia must be level-headed and see the alliance as greater than the sum of its parts. It must be clear-eyed about the reasoning behind US decision-making and remain sophisticated in its responses. Australia must also focus on the real threat of economic coercion from China.

Aluminium and steel make up just 0.2 percent of Australian exports to the US, and their actual value of about $1.3 billion is a tiny fraction of Australia’s total global exports of approximately $670 billion in the past financial year. Aluminium and steel producers will just redirect exports to other markets or shift production to their US-based manufacturers. The tariffs are more political than economic: they are less about Australia and more about the US resetting its ledger with the world and delivering on its national interests.

As Australian Ambassador to the US Kevin Rudd said, the US will be ‘hardline and transactional in its approach, even to long-standing friends, partners and allies’.

So, Australia must respond to the causes, not the symptoms. As with any competition, being beaten by a better rival is not unfair. But, having held up the international free trade system since its inception, the US is increasingly concerned about being cheated or taken for a ride. This includes the correct assessment China is not playing by the rules the rest of us have been following.

Australia must avoid drawing a false equivalence between the Trump administration’s tariffs and China’s economic warfare. The US is seeking to rebuild domestic production and level bilateral trade—albeit by wringing concessions, even from friends, partners and allies. But China’s objective is to recast the international system in its favour.

COMMENT – Worth reading in Brussels… clearly the next author hasn’t.

106. Brussels hold’em: European cards against Trumpian coercion

Tobias Gehrke, ECFR, March 20, 2025

Summary

• Faced with an aggressive new Trump administration, Europeans must understand the assets they can use as deterrents

• Across trade, technology, infrastructure, finance and people-to-people relations, the EU and its European partners hold “cards” they can play

• Policymakers should assess the relative merits of doing so, and the costs to Europe that this would entail

• The EU should create an economic deterrence infrastructure and strengthen its existing anti-coercion instrument

At the card table

“The European Union”, posted Donald Trump on his Truth Social account on March 13th, is “one of the most hostile and abusive taxing and tariffing authorities in the world”. For good measure, the US president added that the EU “was formed for the sole purpose of taking advantage of the United States”. The broadside was just the latest reminder that his administration’s trade wars against Canada, China and Mexico are heading Europe’s way, too. Already its 25% levy on steel and aluminium imports has hit the EU. At the time of writing, there appears to be a significant chance of Trump going far beyond these with sweeping multi-sectoral tariffs.

This is part of a wider story. The second Trump administration has challenged Europe’s territorial sovereignty (by threatening to annex Greenland), its digital model (by attacking its technology regulations), and its traditional political party systems (by courting radical European political forces). The president’s approach to America’s supposed allies on the continent evokes less a sober “strategic rebalancing” than the Ming dynasty’s tributary system, with European leaders expected to kowtow to the emperor in Washington. Trump also appears inclined to pressure Ukraine and its European backers into a peace deal favourable to Russia, and to withdraw significant parts of America’s security commitments on the continent.

The president has implicitly revealed why he thinks he can push Europe around like this. In a comment during his hectoring encounter with Volodymyr Zelensky in the White House on February 28th, Trump told his Ukrainian counterpart: “You don’t have the cards.” Cards are Trump’s euphemism for power and leverage. And to the extent that the American president is capable of threatening Europe across a series of fronts, this is a function of the cards he holds and his willingness to play them aggressively. In other words: Trump seeks to exploit Europe’s economic, technological, political and security vulnerabilities for coercive ends.

Europeans need to learn quickly how to play cards. They must assess the hand they have—Europe’s own sources of leverage over Trump and Trump’s America—and how to strengthen that hand. They must develop a clear and realistic plan of what they want to achieve in the transatlantic game of poker that is likely only just beginning. Where do they want to remain aligned with the US? Where do they want to rebalance the relationship? And where do they want to break from America? Then, Europeans will need to play their hand cannily in pursuit of those ends.

The first step in this process is to review that European hand of cards, what it would mean to play them and how Europeans should proceed with such decision making. Providing that review is the purpose of this policy brief.

Why deterrence matters

First, however, it is worth asking whether Europeans really should threaten to retaliate, and then do so if Trump follows through on his many threats.

After all, Canada and Mexico have deployed significant deterrents, alongside concessions and incentives, but nonetheless now face significant new tariff barriers. Trump evidently sees those not just as a form of leverage but as ends in themselves; a means of bringing manufacturing back to the US and a way to finance tax cuts. So seeking to raise their cost to an administration that sees the EU as an ideological foe may be a futile exercise. Europeans might wonder whether it is not better to let the costs of US tariffs rebound onto American businesses and households, and wait for Trump to reap a domestic backlash.

The EU and its European partners should indeed seek negotiated outcomes and hope that markets will eventually constrain the president. But neither of these considerations overrides the reality that Trump most fundamentally cares about cards—or in other words, power. So any European response will need to be rooted primarily in power rather than economics, rules or US domestic politics.

To use an analogy, nuclear weapons are bad for everyone. But if Vladimir Putin threatens to use them against Europe, that does not mean that Europe should simply pledge not to use such weapons in the hope that the Kremlin will recognise the lose-lose logic. Credible deterrence is needed. The same is true of Trump’s threats today.

Can Europe put up such deterrence? The US president does not appear to believe so. Asked at a press briefing what would happen if Europeans retaliated against US tariffs, Trump retorted: “They can’t. They can try. But they can’t. […] We are the pot of gold. We’re the one that everybody wants. […] We just go cold turkey; we don’t buy anymore. And if that happens, we win.” In other words: the US has “escalation dominance” over Europe; holding a superior position across a range of fronts—from military and diplomatic to economic and technological—that could make European retaliation a losing bet.

But the reality is more complex. If the essence of nuclear deterrence is mutual assured destruction (MAD), Europe needs to demonstrate another kind of MAD: mutual asymmetric dependency. Significant aspects of America’s prosperity and geopolitical power have for years and sometimes decades benefited from good relations with Europe. And Europeans command certain of these chokepoints. In other words: they do hold cards.

Indeed, they have played them before. In 2018, when the first Trump administration threatened tariffs on European cars, Jean-Claude Juncker as European Commission president travelled to Washington with a basket of threats and offers, successfully deterring the US president from escalating the dispute. To be sure, Trump is markedly more aggressive and unchecked in his second administration, so what worked seven years ago would likely be inadequate this time. But the EU too has evolved over the intervening years and developed a harder geoeconomic edge and new deterrent tools. For example, its Anti-Coercion Instrument (ACI, sometimes dubbed the “bazooka”) entered into force in December 2023 and provides the union with a structure for calibrating collective responses, such as counter-tariffs, to detrimental third-country policies.

It is a reminder that Europeans have cards, can continue to improve their hand and must now think hard about how to play them.

Assessing Europe’s hand

The following tables set out Europe’s options. They are split into five categories of measures: tariff and trade; services, intellectual property (IP) and digital; critical technology and infrastructure; financial; and people-to-people. Inevitably, there is some overlap between the categories. Equally inevitably, the tools in question are a dense thicket of acronyms; a brief, clarifying guide to which precedes each options table. The tables themselves indicate the rationale for using each measure, the actions and tools involved in doing so, and the prospective cost to Europeans on a scale of 1 to 10 (where 10 is the greatest risk of self-damage). That final point deserves particular reflection. None of the options listed involve no risk at all to European interests; but the degree of risk they present—and where in the EU they would fall heaviest—varies significantly.

Some further caveats are in order. Firstly, the damage scores are merely indicative, and the question of the potential harm done by each of these measures warrants further research. Secondly, this brief exclusively maps Europe’s technological and economic deterrence options. It does not cover “cards” linked to non-commercial aspects of transatlantic defence and security cooperation, like US military access to European territory, air space and waters, or Europe-US intelligence sharing. Thirdly, this brief does not recommend any options above others. Which cards to play will depend on the actions of the US administration, as well as wider European considerations about how to combine and phase responses, how to blend deterrence with concessions and incentives to compromise, and how to manage and mitigate the costs to European interests.

Europe’s cards

Tariff and trade measures

Other than the ACI, the most obvious trade and tariffs tool is the Enforcement Regulation, which enables the commission to impose countermeasures in the absence of a functioning World Trade Organisation (WTO) dispute settlement system. But the EU can also weaponise its agricultural and environmental standards to discriminate against American products; for example through its Farm to Fork Strategy (acts and regulations advancing food sustainability), its Emissions Trading Scheme (EU ETS), its Registration, Evaluation, Authorisation and Restriction of Chemicals regulation (REACH) and its Ecodesign for Sustainable Product Regulation (ESPR, which limits market access to non-European competitors failing to meet sustainability criteria).

Services, intellectual property and digital measures

Two new digital acts enable the EU to clamp down on American software and online platforms: the Digital Services Act (DSA) regulates online marketplaces, social networks and content-sharing platforms, while the Digital Markets Act (DMA) ensures that large digital “gatekeepers” respect the single market. The commission has significant tools to fine and otherwise sanction firms for non-compliance with either. But further levers also apply in this area: the EU’s General Data Protection Regulation (GDPR) imposes stringent protection and privacy rules on data processing and transfers, and the Network and Information Security Directive (NIS2) is a unified legal framework upholding cybersecurity in 18 critical sectors across the EU. National authorities enforce these, with the EU playing a cross-border coordination role. Meanwhile Vertical Block Exemption Regulation (VBER) provides exemptions from the EU’s competition laws.

Financial regulations too can weigh down US services firms. The Markets in Financial Instruments Directive II (MiFID II) and Markets in Financial Instruments Regulation (MiFIR) can convey and withhold passport-like rights for companies offering financial services and trading platforms in the European Economic Area. And the commission determines whether the financial regulatory or supervisory regime of a non-EU country is equivalent to the corresponding EU framework.

Critical technology and infrastructure measures

Alongside some of the levers already discussed (like the ACI and NIS2), the EU can use various foreign-policy, defence and energy regulation tools to restrict American access to its critical infrastructure. The Permanent Structured Cooperation (PESCO) framework for joint military capability-building projects, the European Defence Fund (EDF) coordinating defence research and interoperability, and now the new ReArm Europe financing initiative can curb European procurement from US firms. Other tools enable Europeans to discriminate against those firms on strategic grounds: Article 346 of the Treaty on the Functioning of the European Union (TFEU) exempts military procurement from some single-market rules, the European Union Agency for Cybersecurity’s (ENISA) certification process provides common cyber standards, the EU Dual-Use Regulation restricts sensitive technology exports, and its Foreign Direct Investment (FDI) Regulation allows for the screening of inbound investments.

But other “civilian” mechanisms also apply in this area. The International Procurement Instrument (IPI) enables the commission to impose tit-for-tat market restrictions on firms from countries that restrict their European counterparts, and the recently implemented Foreign Subsidies Regulation (FSR) enables Europeans to target companies in receipt of foreign subsidies. The EU can likewise use its Methane Regulation (monitoring and reducing methane emissions) and the Carbon Border Adjustment Mechanism (CBAM, the carbon tariff on imports to the EU coming into full force in 2026) to tighten the screws on US firms. Where critical technology is concerned, the EU’s AI Act (the world’s first) and its Horizon Europe and Digital Europe research programmes can be turned against US technology giants.

Financial measures

The EU and its member states have various means of loosening their financial relationships with the US. Measures to reduce US debt holdings and dollar-denominated trade could harness the Capital Requirements Directive/Regulation (CRD/CRR) and Solvency II regulations, whose prudential standards encompass banking licences and risk weightings, and the European Central Bank’s (ECB) currency swap lines, which can incentivise euro-denominated transactions and collateral holdings to weaken the dollar.

Financial market protections like the Anti-Money-Laundering (AML) directives targeting hot money and the Markets in Crypto-Assets Regulation (MiCA) governing cryptocurrencies can take aim at the (often Trump-friendly) US crypto scene.

People-to-people measures

In this area, too, the ACI can be useful. So too can the EU sanctions tool enshrined in its Common Foreign and Security Policy.

How to build Europe’s economic deterrence regime

While it is beyond the remit of this policy brief to specify which cards the EU should prepare to play, it does propose that the union create a proper framework for deliberating on and reaching those decisions. Despite the advances of recent years—including the adoption of the ACI, the FDI regulation and the FSR—EU institutions and member-state capitals still treat economic deterrence as a narrow, defensive matter of risk mitigation. Faced with an antagonistic US administration as well as other adversaries like Russia and China, it must now build more pro-active and politically coordinated structures for action.

1. Publish an economic power doctrine

The EU, led by the commission and major member states, must define a fully-fledged economic power doctrine that articulates how, why and for what purpose Europe will use economic power in the age of cards.

The doctrine must make explicit that checking coercive threats, preparing a war-ready economy, building and maintaining positions of asymmetric leverage, and cutting technological and industrial dependencies are vital European security interests. It should assert the case for Europeans to pool and deploy economic power in pursuit of these interests, even if this means challenging international trade rules.

Europe’s core interests are to promote economic growth and protect its citizens—not to uphold international trade rules per se. These ends have long overlapped, but the Trumpian revolution, China’s unrelating mercantilism, and Russia’s destructive ambitions have already decoupled significant parts of the global economy from such strictures. Europeans can only restore international rules and institutions from a position of power.

2. Appoint an economic deterrence tsar

Europe’s negotiations with great powers like the US or China cannot be fragmented. Inspired by Michel Barnier’s centralised mandate to lead the Brexit talks with the British government on behalf of the EU, the union must appoint an economic deterrence tsar reporting directly to the European Commission president and not bound by organisational silos.

This tsar should wield a broad, cross-sectoral mandate encompassing trade, finance, digital, and regulatory domains. They should have clear authority to coordinate rapid responses spanning those domains, and to implement a credible, unified communication strategy both within the EU and externally.

In close coordination with an EU Economic Security Network (EU ESN) as proposed by ECFR’s Agathe Demarais and Abraham Newmann of Georgetown University, the economic deterrence tsar should be tasked with developing a unified map of Europe’s dependencies and leverage points across different policy domains. This knowledge is currently scattered across the commission and across member states.

3. Establish an economic deterrence steering group

Recognising that not all member states may fully embrace this agenda, those who do should form a “coalition of the willing” by establishing an economic deterrence steering group. The group would propose strategic directions for the deterrence tsar and ensure prompt, coordinated action across the bloc.

This group could include heads of government from leading EU economic and technological powers (France, Germany, Italy, the Netherlands, Poland, Spain and Sweden) along with the presidents of the commission and the council. Trusted non-EU allies—especially the United Kingdom—should be integrated in an associate capacity, formalised perhaps through the planned EU-UK security pact, to align on responses to coercion and other pressures.

This model would mirror how France, Germany, Poland, and the UK have taken a central role in planning European security guarantees for Ukraine in recent weeks.

4. ACI 2.0

Europe’s most potent deterrence tool, the ACI, requires two qualified-majority votes and prolonged consultations. It would benefit from a fast-track mechanism that can be triggered by the deterrence tsar, enabling emergency responses within a defined timeframe (for example, a 72-hour decision window).

Simultaneously, the EU should redefine “coercion” within the ACI to encompass a broader spectrum of threats; including digital sabotage, political destabilisation, cyber-attacks on individual companies and assaults on democratic processes.

5. Shoring up the power base

The EU should establish an economic solidarity fund, financed by revenues from tariffs, digital fines, and other geoeconomic penalties, to compensate member states or sectors that are disproportionately affected by foreign aggression or EU retaliatory measures.

In parallel, it should target support measures—such as grants and low-interest loans—to help strategic industries that are vulnerable to foreign weaponisation build alternative sourcing and secure supply chains, following the example of Japan. The European Investment Bank could finance these programmes, with specific funding calls for proposals for de-risking industries.

The long game

Preparing robust defences against US aggression could, counter-intuitively, stabilise the transatlantic bond in the long run. If Europe can credibly show that bullying tactics will backfire or amount to mere Pyrrhic victories, it could over time weaken those factions in Washington that back Trump’s combative and lose-lose use of America’s cards. It could even change some minds. By playing a united hand, Europeans can disprove Trump’s claim that Europe cannot match him in upping the ante.

But that will mean building the infrastructure needed to join up the relevant assets and decisions. Whether it is a game of British bridge, Dutch toepen, French belote, German skat, Italian briscola, Latvian zole, Polish baska, or Spanish el mus, victory at the card table usually comes from combining mutually complementary cards at the right time. Ultimately, Europe’s strength in this new age depends on its ability to consolidate its economic cards into one formidable hand and play that hand smartly, transforming individual assets into a collective trump card against coercion.

COMMENT – Clearly Tobias Gehrke has spent a lot of time thinking about this and appears to have a cogent strategy… but he refuses to examine critically what the United States is asking Europe to do and whether Europe could (or should) meet those demands. He seems intent on ignoring what Washington is asking for (a reliable and equal partner) and instead, Gehrke immediately falls into the tropes of “war,” “aggression,” “bazookas,” and “nuclear deterrence,” which then justify this strategy of waging economic war against the United States.

Let me translate a few of Gehrke’s ideas:

“Publish an economic deterrence doctrine” = create a doctrine for waging economic warfare against the United States

“Restrict American access to its critical infrastructure” = encourage increased PRC control over European critical infrastructure

“Clamp down on American software and online platforms” = expand the discrimination against American companies

“Remove Republican-state goods from EU shelves” = further reinforce the perception that Europeans interfere in the partisan politics of the United States

So, what does the United States want from Europe?

1) That Europe, with a population of about 450 million (about 110 million more than the United States) and wealth on par with the United States, should pay its fair share of the GLOBAL collective security costs [the leak of the Signal messages on Yemen should drive that point home as U.S. leaders bemoan the fact that Europe lacks the ability to protect its OWN sea lines of communication and, yet again, the U.S. Government is spending American taxpayer dollars to protect the interests of allies that refuse to protect themselves].

2) That Europe should abandon its economic discrimination of the United States and the unequal trade advantages that Europe has clung to since the end of the Second World War when the United States permitted those advantages, so that Europe could rebuild itself.

These are NOT unreasonable demands by the United States, nor are these new demands being imposed by the Trump Administration.

It is certainly true that President Trump is pursuing these two goals more forcefully and has been extremely vocal in making threats.

But within this context, Gehrke recommends that Europe wage a far-reaching economic war against the United States, so that it does NOT have to pay more for its own defense AND to retain unfair trade advantages against the United States.

IMO, this is a childish approach to geopolitics.

I know Europeans leaders absolutely hate President Trump and Vice President Vance, and therefore they would hate to concede anything, but isn’t it in Europe’s long-term interests to fulfill its ally’s requests?

After decades of cajoling and begging and backroom conversations by U.S. leaders with their European counterparts, we are now faced with a very open spat. The U.S. and Europe are partners, but one of those partners refuses to fulfill its responsibilities and obligations to a collective relationship. Instead of stubbornly resisting and then retaliating, wouldn’t it be better to make an honest, goodwill attempt to actually address American concerns?

I’ve had countless conversations with my European counterparts and in each one they sheepishly admit that they don’t fulfill their obligations to our collective security alliance. So instead of launching a costly economic war JUST spend more on defense… don’t promise it in 5 years or 10 years, do it today.

Gehrke ends his piece with a few lines about “victory,” comparing it to a card game… but it is worth asking: what “victory” does Europe want to achieve?

My sense is that Europe’s idea of victory is that the U.S. just stops bothering them about defense spending and reciprocal trade.

They want to go back to sleep and return to their fantasyland where multilateral institutions solve geopolitical crises, and the use of military force is “illegal.” They want American taxpayers to maintain global security and American leaders to mouth the bromides of alliances and values, while ignoring European free-riding.

That appears to be Europe’s “vision of victory” and according to Gehrke, Europe should wage an economic war against the United States to achieve those goals.

My response: Good luck with that.

107. No brain, no brawn: Trump 2.0 makes an EU Economic Security Network essential

Agathe Demarais and Abraham Newman, ECFR, March 19, 2025

Summary

• The success of the EU’s response to challenges posed by Russia, China and Trump 2.0 will hinge on the bloc’s ability to establish itself as a global geoeconomics power—leveraging its economic strength to pursue foreign policy goals.

• The EU lacks a robust institutional framework to fully harness its geoeconomic potential and maximise the effectiveness of economic statecraft tools, such as financial sanctions, export controls and investment screening mechanisms.

• Economic statecraft tools are developed at the EU level but implemented at the national level. This disconnect creates loopholes, inconsistencies and confusion that weaken the impact of these measures.

• Creating a network-based EU body to facilitate collaboration among member states on economic statecraft tools would turn Europe’s perennial weakness—fragmentation—into a strength.

• An EU Economic Security Network (EU ESN) would bring together representatives from each member state as well as officials from EU bodies. It would help design EU-wide best practices, support information sharing, and foster the rise of a pan-European economic security culture.

• The EU ESN could serve as a contact point for G7 and other allies to discuss and eventually collaborate on economic security issues that are relevant to the bloc.

COMMENT – Similar to the article above, clearly Agathe Demarais and Abraham Newman have done a lot of thinking on this topic.

But there seems to be an obvious blind spot: Europe’s fractured political system and the separation of economic and hard power between member states, as well as between various European institutions like the European Union and NATO is what weakens the Europeans on the global stage (not the lack of yet another EU body).

The Europeans have created a massive attack surface for their rivals (both internal and external) to manipulate.

The problem for Europe is structural, the creation of an EU Economic Security Network (EU ESN) will do nothing to address the underlying pathologies.

To put it plainly: Europe is leaderless.

Not because it lacks leaders (Europe has a shit-ton of leaders… yes that is a technical term), it is because it has too many leaders, power is divided too broadly. Power is frittered away across countless institutions, bureaucracies and member states… adding one more EU body is the opposite direction Europeans should move if they want to establish themselves as a global power.

If Europe wants to be a global power, then member states must surrender sovereignty. Paris should surrender its Permanent UN Security Council seat to Brussels and member states should shut down their individual Foreign Ministries and Embassies by letting EEAS take over those functions for the entire Union. Member states should do the same with their Defense Ministries and militaries. Create a clear delineation between the internal and the external.

Speaking as an American who is a friend of Europe, we need Europe to do better.

We need Europe to adapt rapidly to an era of great power rivalry.

I trust that if Europeans built a political, economic and military structure that was more centralized, that they would act in ways on the global stage that would reinforce U.S. efforts and interests. Right now, Europe’s fractured structures do the opposite… and that is the underlying frustrations that Americans have with Europe.

108. Is U.S. reset with Russia due to the China factor?

Anil Wadhwa, Gateway House, March 27, 2025

U.S. President Trump is prioritising strategic competition with China and seeking stability with Russia. This approach involves sanctions relief, sidelining Ukraine, and fostering economic ties with Moscow to weaken its reliance on China and reshape global power dynamics. Europe is divided on the outreach to Russia, but the U.S. wants to leverage energy markets and investment opportunities to expand its influence over Moscow.

109. US strategic ambiguity on Taiwan won’t work any longer
     Michael Schiffer, Financial Times, March 26, 2025

110. Trump Team Struggles with New Controls as President Seeks China Deal
     Paul Triolo, The Wire China, March 23, 2025

Now would be a good time to assess whether U.S. export controls are achieving their aims.

COMMENT – Now would be a good time for Paul Triolo to come clean about who his clients are…

In just The Wire China alone, Triolo has written NINE OpEds that seek to undermine U.S. export controls in the last 17 months… that is one every other month [NOTE to The Wire China… maybe you’ve published enough from Paul on this topic… but don’t feel too bad, The China Project has published 23 articles from Triolo on this same topic.]

111. Turning the tide: the US pushes back against Chinese influence in European ports
     Konrad Popławski, Centre for Eastern Studies, March 17, 2025

112. Russia's silence speaks volumes for North Korea
     Cao Xin, Nikkei Asia, March 21, 2025

113. Promoting freedom abroad is essential to making America great again at home

Miles Yu, Washington Times, March 17, 2025

Democracy promotion is not a partisan issue.

The greatness of the United States has never been defined merely by its wealth, military might or industrial capacity.

Authoritarian regimes worldwide do not fear American wealth; they crave it. They do not fear our military power; they study and seek to match it.

What keeps the rulers of America’s adversaries, such as those in communist China, awake at night and deterred during the day is not the size of our economy or the might of our fleet. It is the idea of freedom itself. The quest to make America great again at home must be coupled with a campaign to weaken and deter our adversaries abroad.

114. Defence budget doesn’t match the threat Australia faces

Marc Ablong and Marcus Schultz, The Strategist, March 25, 2025

When Australian Treasurer Jim Chalmers stood at the dispatch box this evening to announce the 2025–26 Budget, he confirmed our worst fears about the government’s commitment to resourcing the Defence budget commensurate with the dangers Australia now faces.

A day earlier, Deputy Prime Minister and Defence Minister Richard Marles had advised that the government’s sole Defence initiative for the 2025–26 budget cycle would be to bring forward a paltry $1 billion from the 2028–29 financial year, shared across 2026–27 and 2027–28. So, the much vaunted ‘generational investment in Australia’s Defence’ has been put off for a few more years, at least.

This marginal reprofiling of funds ($900 million additional in 2026-27 and $237 million additional in 2027-28 – so, in fact a little more than $1 billion) has been applied to submarine and missile capabilities, which continue to take up an expanded amount of defence capital expenditure

Consolidated funding for Defence, the Australian Signals Directorate and the Australian Submarine Agency in 2025–26 is estimated to be $58,988.7 million. It’s a nominal increase of $2,380.5 million (4.2 percent) over expected 2024–25 spending. Adjusting for expected inflation, as expressed by the 1.0 percent GDP deflator, the real increase will be 3.2 percent.

And to our considerable frustration, a detailed reading of the defence budget highlights that the government continues to pay only lip service to the readiness and sustainability of the current force-in-being, with the largest spending increases on capability sustainment tied to the F-35 Lightning force ($190 million) and Collins-class submarines ($235 million). While $133 million is allocated to sustainment of a new Defence Logistics program, there is little to no change overall to sustainment funding, usage and workforce from last year’s budget.

COMMENT – Aside from misspelling the word ‘defense,’ one wonders how the current Australian Labour government perceives its security environment.

I’ve heard that Australian national security officials have stopped referencing China in their public remarks, even as they stress the threats posed by Russia and Iran.

In February, Mike Burgess, the Australian Director-General of Security and head of Australia’s intelligence service, ASIO (Australian Security Intelligence Organisation) gave his annual public threat assessment speech.

In a 42-minute speech… 26-pages according to the transcript… not one mention of China.

Russia, Iran both mentioned.

How does the head of the Australian intelligence service give an annual threat assessment and not mention China once? Particularly, when a PLA Navy task force was circling Australia (and here) and conducting live fire drills that interrupted Civil aviation flight paths in and out of Australia.

This isn’t the first time I’ve noticed this silence from Mike Burgess. Back in March 2024, I wrote about it in this post, China and America are not married... and other language pitfalls (March 3, 2024).

It isn’t as if Australian Intelligence leaders never mention China publicly, here is Andrew Shearer, the Director-General of National Intelligence talking about the role of China in intensifying great-power competition during his public testimony to the Australian Senate in February 2023.

In October 2023, Mike Burgess was on stage at the Hoover Institution at Stanford University alongside his counterparts from the United States, Canada, New Zealand and the United Kingdom to speak publicly at an event titled: “FBI Director Christopher Wray and Heads of Foreign Security Agencies Convene at Stanford to Address Threat to Innovation Posed by China.”

This is what Burgess said then:

“The threat is that we have the Chinese government engaged in the most sustained, scaled, and sophisticated theft of intellectual property and acquisition of expertise that is unprecedented in human history,”

“That is why we are together. And that is why I am—as a strategist security service head—calling that behavior out.”

I guess Burgess is no longer “calling out that behavior.”

Are we to believe that two years later, China is no longer a significant enough threat to Australia to merit mentioning in the Annual Threat Assessment?

It is really disappointing to see these developments in Australia.

115. Funding for R&D isn’t a gift to academia
     Senator Todd Young and Matt Pottinger, Washington Post, March 24, 2025

Investing in scientific research and development is vital to U.S. security.

As President Donald Trump pledges to win the artificial intelligence race, send Americans to Mars and sustain U.S. military dominance, we would do well to remember a key reason the United States achieved its technological edge in the first place: federal investment in ambitious research and development. The U.S. is racing against its adversaries to lead not only in artificial intelligence but also biotech, quantum computing, robotics and other technologies that will be pivotal for U.S. prosperity and security. The pace of innovation and deployment of these next-generation capabilities will only accelerate.

The Chinese Communist Party — our primary strategic adversary — is leveraging China’s engineering talent and manufacturing prowess to advance the regime’s interests, diminish U.S. power, and assert a totalitarian model of censorship and surveillance on users of China’s technology products worldwide. Beijing’s explicit strategy for global technological dominance hinges not only on its well-known theft of American technology but also on significant investment in China’s own R&D efforts.

China’s public spending on R&D has grown 16-fold since 2000, placing it second in the world behind the United States for total spending. This month, China announced an 8.3 percent increase in science and technology spending, among other investments unveiled in an effort to surpass the United States’ lead. In several critical technologies — from drones to advanced manufacturing using robots to quantum communications — China is gaining on or already beating the United States in terms of making discoveries and applying them in the real world.

Just as China’s commitment to research and development has grown, the U.S. government’s has waned. Federal funding for R&D has declined significantly as a share of total spending since its Cold War peak, leaving strategic blind spots in our research ecosystem.

Our private sector and capital markets are the best in the world. But investors tend to gravitate toward easily marketable solutions in sectors such as health care, energy and consumer software apps, while avoiding more challenging or long-term investments in emerging technologies critical to our national security. Beijing’s heavy subsidies for its national champions make it even less enticing for American private companies to try and compete in many strategic sectors — further jeopardizing U.S. national security.

116. America needs a national economic security strategy to counter China’s rise
     Senator Todd Young and General David Berger, The Hill, March 23, 2025

As America confronts an ambitious economic and military peer in China, we desperately require a more coherent playbook for protecting and using our significant economic tools and assets. It is time to complement our national military strategy with a National Economic Security Strategy to keep the peace and sustain our geopolitical competitiveness.

One example of why a wider strategy is urgently needed is the recent fixation on the so-called “Davidson Window” — the time of supposed maximum danger for a potential forcible Chinese seizure of Taiwan.

Remarkably, a brief exchange in a single House Armed Services Committee hearing in 2021 drove Congress to spend additional billions of dollars for military operations and the procurement of military hardware in an attempt to make our forces more prepared to deter any such seizure, or to defeat it in combat if an actual attempt is made.

As a sitting U.S. senator and a former commandant of the Marine Corps, we accept that the most effective means to establish deterrence is lethal hardware that can be produced rapidly at scale to destroy widespread enemy targets to influence the enemy’s will.

However, as many others have noted, the U.S. currently lacks the ability to mass-produce that hardware. Despite that inconvenient truth, too many voices in the defense community continue to seek ever larger appropriations in hopes that at some point we will reach a tipping point, at which time more money will actually result in better outcomes. We have not been there for some time.

Given macroeconomic and budgetary realities, the public cannot be expected to maintain support for hard-power solutions and investments unless policymakers connect it to a larger and more formal strategy of employing every possible tool of national power at our disposal in a way that establishes and sustains deterrence while also ensuring the prosperity and economic security of the American people.

Establishing such a strategy will require the entirety of the executive branch, not just those departments and agencies typically considered to be the sole owners of our national security policy, and it will require consultation with our private sector and our private capital markets as we seek to empower greater private economic activity and dynamism.

Congress took a productive step towards formalizing this process through the CHIPS and Science Act, including by directing a strategy and report on the nation’s competitiveness and federal science, research and innovation enterprises that will follow the publication of the National Security Strategy. We believe this effort would be complemented by a full assessment of the nation’s economic power, including our tax and trade policy, our sanctions strategy, the right calibration of our export control regime, the integrity of our supply chains, the security of our capital markets and transparency in capital flows, and other means at our disposal to insulate ourselves from coercion or exogenous shocks, like a global pandemic or regional military adventurism by China.