“The Chinese are very realistic that a new president might be very different (from Trump),” said Shen Weizhong, a former Chinese Foreign Ministry official.

“But if we can have two more years of stability, that’s already a good thing for China ... The more time we have, the better prepared we might be towards a final showdown on Taiwan or maybe another trade war,” added Shen, who now works for Beijing-based think tank Global Governance Institution - via Reuters.

Thank you Mr. Shen for highlighting the “strategic stalemate” phase of the PRC approach to its protracted war with the US.

Today’s top items:

1. Li Xi on the Plenum Resolution - As expected, Li Xi, Standing Committee member, CCDI head and deputy head of the Fifth Plenum Resolution drafting group has an article in the Thursday edition of People’s Daily, following articles Tuesday and Wednesday by Wang Huning and Cai Qi, the other two deputy drafting heads. Li’s article, translated here, is titled “Resolutely Following the Anti-Corruption Path with Chinese Characteristics 坚定走好中国特色反腐败之路”. He reminds everyone that the Party has had a lot of corrupt elements:

(2) Uphold no forbidden zones, full coverage, and zero tolerance, and resolutely remove every corrupt element. With the courage of “scraping poison from the bone” and “a warrior cutting off his own wrist”, the Party resolutely investigated and punished corrupt elements including Zhou Yongkang, Bo Xilai, Guo Boxiong, Xu Caihou, Sun Zhengcai, Ma Xingrui, Zhang Youxia, He Weidong, and Ling Jihua. It seriously investigated such problems as collusion between political and business interests; resolutely addressed corruption in fields where power, funds, and resources are concentrated, including finance, state-owned enterprises, energy, pharmaceuticals, and infrastructure construction; insisted on investigating bribe-taking and bribe-giving together; deeply punished new and concealed forms of corruption; and continuously carried out Operation Sky Net, never allowing corrupt elements to remain beyond the reach of justice. From the 18th CPC National Congress through September 2026, discipline-inspection and supervision organs nationwide opened 8.105 million cases and disciplined 7.922 million people, including 963 centrally managed officials. This fully demonstrates our Party’s tenacious will and steadfast resolve to oppose every instance of corruption, punish every corrupt official, and eliminate wrongdoing to the end.

（二）坚持无禁区、全覆盖、零容忍，坚决清除一切腐败分子。以刮骨疗毒、壮士断腕的勇气，坚决查处周永康、薄熙来、郭伯雄、徐才厚、孙政才、马兴瑞、张又侠、何卫东、令计划等腐败分子，严肃查处政商勾连等问题，坚决整治金融、国企、能源、医药和基建工程等权力集中、资金密集、资源富集领域的腐败，坚持受贿行贿一起查，深入惩治新型腐败和隐性腐败，持续开展“天网行动”，决不让腐败分子逍遥法外。党的十八大以来，截至2026年9月，全国纪检监察机关共立案810.5万件，处分792.2万人，其中处分中管干部963人，充分彰显了我们党有腐必反、有贪必肃、除恶务尽的顽强意志和坚韧定力。

2. China Media Group studies spirit of the Plenum - The China Media Group Party Leadership Group met to study the Plenum Resolution. The official readout gives a view into external propaganda priorities:

The meeting called for actively carrying out external promotion of the plenum’s spirit and telling the Communist Party of China’s story well. CMG must fully leverage its advantages in overseas communication, innovate its discourse system and forms of expression, fully present to the international community the great achievements and valuable experience of full and rigorous Party self-governance in the new era, and introduce the strategic tasks and major measures involved in ‘Persevering with Full and Rigorous Party Self-Governance.’ It must carefully plan topics, proactively set the agenda, actively guide discussion, and excel at using comparisons across ancient and modern times and between China and the West to profoundly reveal the characteristics and strengths of China’s path of combating corruption. It must improve its overseas distribution capacity and its ability to conduct on-the-spot “disinfection,” produce a group of external propaganda products grounded in facts, viewpoints and data, and counter attacks and smears by the United States and the West. It must deepen “media diplomacy,” organize a series of media activities in light of the concerns of audiences in target countries, further present the positive image of the Communist Party of China, and effectively strengthen the international community’s understanding and recognition of the Party.

会议要求，要积极主动开展全会精神对外宣介，讲好中国共产党的故事。要充分发挥总台海外传播优势，创新话语体系和表达方式，向国际社会充分展现新时代全面从严治党的伟大成就和宝贵经验，介绍持之以恒推进全面从严治党的战略任务和重大举措。要精心策划选题，主动设置议题，积极引导话题，善于在古今中西的对比中，深刻揭示中国特色反腐败之路的特点和优势。要提高海外投送能力、就地“消毒”能力，推出一批有事实、有观点、有数据的外宣产品，反制美西方攻击抹黑。要深化“媒体外交”，结合对象国受众关切，举办一系列媒体活动，进一步展示中国共产党良好形象，切实增强国际社会的认知认同。

3. Jensen Huang’s Alice Huang problem - Three Republican Congressmen have sent a letter to the Nvidia CEO “requesting that he appear before their committees for a joint, closed-door briefing on Huang’s interactions with Megaspeed executive Alice Huang, a publicly reported People’s Republic of China (PRC) intelligence asset, and NVIDIA’s security protocols against foreign adversary espionage.”

We had a long discussion of Nvidia’s Megaspeed mess and the likely problems the new Congress will pose for Nvidia on this week’s episode of Sharp China.

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Show Notes:

On today's show Andrew and Bill begin by reviewing the readouts from last week's Fifth Plenum, including signs that corruption crackdowns will continue, additional targets may include retired cadres, and an area of convergence with the US on policing "corrupt acts carried out through the internet, virtual currencies ... and the like." From there: The US-China outlook in the wake of Tuesday's midterms, including questions about the future of the Democratic Party's approach to China, turnover at the China Select Committee, unknowns surrounding President Trump's response, heightened scrutiny forthcoming for Nvidia, and Jensen Huang's ongoing Megaspeed mess. At the end: Distillation intrigue, a Putin-Trump-Xi summit in Shenzhen, new outbound investment regulations from the Treasury Department, the Washington Post reports on a new Pentagon espionage initiative, an emailer wonders about cyber warfare, and the Mbappé mess remains unresolved.

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Related Readings:

Cai Qi on the Plenum Resolution; Stock market bounce; US election; Nvidia’s China-related sales - Sinocism

Fifth Plenum outcomes; Stock market rescue; Middle East diplomacy; “Look East” and “learn from the CPC”; Mbappé mess continues -- Sinocism

Central Bank to Conduct Third Swap Facility Operation -- Caixin

The Fight for the Future of Democratic Foreign Policy -- Foreign Affairs

How Nvidia Uses Its Soft Power to Influence Customers and Shape Policy -- The Information

Nvidia orders data centre clients to reduce China exposure -- FT

How One Country Became the Unlikely Crossroads of the Global A.I. Boom -- NYT

Oracle cancels $7bn Tencent AI deal under Trump pressure -- FT

Nvidia Chief Seen as Target of Chinese Spy Plot -- NYT

AI on the Ballot -- Stratechery

Let China copy American AI -- The Economist

Anthropic says new safeguards sharply reduce AI distillation attacks -- Reuters

US, Russia and China discuss meeting between Trump, Putin and Xi -- FT

China urges US to halt proposed expansion of outbound investment curbs -- Reuters

Pentagon looks to build a deep-cover spy program to confront China -- WaPo

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Thanks for listening.

President Trump is a weakened, lame duck president, but he is still very powerful when it comes to foreign affairs and trade and I think it is too early to tell what impact Tuesday’s shellacking of the GOP will have on US-China relations. We talked through some early thoughts on the episode of Sharp China we recorded earlier today that will be in your inboxes in less than twelve hours.

One thing to consider is that the Trump Administration held back on some actions on China because of concerns of the PRC response and the impact on the US economy going into the midterms. Does Trump still care about those impacts?

There are a fair number of Republicans in the House and Senate who are unhappy with what they see as Trump’s softness on China in some areas, and especially on Taiwan and chips, and now that they have less to fear from him they may feel unleashed and more willing to work with the large number of Democrats who share their concerns.

PRC policymakers have a lot to figure out, but they should not be overconfident that the GOP loss is good for US-China relations. It may well end up that it is, but it is too early to tell.

With the US mid-term elections over, we are now entering a new phase of US-China relations, so I have started a dedicated chat channel for us to discuss. Please share your thoughts.

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The :Four Major Challenges” is a new formulation developed on the basis of the Four Tests and Four Dangers.

“四大挑战”是在“四大考验”、“四种危险”基础上作出的新概括 - Wang Huning on the Fifth Plenum

Today’s top items:

1. Stock market investors unimpressed - Investors were mostly disappointed with the latest stock market rescue attempt. The PBOC completed its third securities-industry swap operation Tuesday, providing RMB100 billion in liquidity capacity at a winning fee of just 10 basis points. But the STAR 50 plunged 3.81%, ChiNext lost 2.73%, and major optical-networking and semiconductor stocks suffered another round of double-digit declines.

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Today’s newsletter starts with news of a new stock market rescue effort and possible signs of more serious PRC efforts to mediate in the Iran war before getting into the Plenum.

Those still hoping that Xi sees the intensifying corruption crackdown as an impediment to economic growth will be disappointed. According to the “side notes” from the Fifth Plenum, translated here, Xi made it clear he does not think “full and rigorous Party self-governance” is hurting the economy:

General Secretary Xi Jinping addressed a question some people have raised: “Does full and rigorous Party self-governance hinder economic and social development, or does it safeguard and promote economic and social development?”

习近平总书记谈到了有些人的疑问：“全面从严治党是妨碍了经济社会发展还是保障和促进了经济社会发展？”

“Since the 18th Party Congress, the Party and the country have achieved his…

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I have included a full bilingual translation of the brief communique the end.

As expected, the Plenum approved the “Resolution of the Central Committee of the Communist Party of China on Certain Major Issues concerning Persevering with Full and Rigorous Party Self-Governance 中共中央关于持之以恒推进全面从严治党若干重大问题的决定”.

The communiqué largely confirms the direction suggested by the pre-Plenum commentary campaign and explicitly incorporates Xi Jinping Thought on Party Building into the framework for implementing the decision. It envisions “full and rigorous Party self-governance” as an integrated system that will improve the CPC’s capacity to control its members, supervise officials, and implement decisions.

The communiqué makes it clear that life for cadres will only get tougher as discipline tightens, so expect politics to be even more in command than they are now as the Party heads into the study campaign…

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On today's show Andrew and Bill begin with five questions on the Fifth Plenum as Xi continues his corruption crackdowns and propaganda campaigns emphasize ideological unity and discipline. Topics include: The logistics of this week's meeting, the challenge of implementing policies throughout the country, the real corruption crisis that Xi inherited 14 years ago, costs of the crackdowns, and the inevitable arrival of a unified version of Xi Jinping Thought. From there: A tour of the hysterics surrounding Kylian Mbappé and Real Madrid this week, including the benign comments at issue, questions about why this is happening now, how the Party views Mao, how Chinese citizens view Mao, and why, if this is all part of a strategy, it may be a bad one. At the end: More bad news from the stock market as tech stocks continue to collapse, questions about forthcoming policies, and a bittersweet update on Pop Mart's fortunes in the afterglow of the Labubu craze.

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We still have no news from the Fifth Plenum, just more propaganda pieces about Xi Jinping Thought on Party Building and “full and rigorous Party self-governance”, but excitement is building as the meeting ends Thursday and then we will have lots more to chew through.

Today’s top items:

1. Fifth Plenum watch - Is there any chance the 5th Plenum finally formalizes Xi as the People’s Leader 人民领袖? There are two mentions of him as the People’s Leader in the October 28 Peop…

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We must soberly recognize that many factors weakening the Party’s advanced nature and harming its purity still exist; dangers that betray the original aspiration and mission and shake the Party’s foundations are growing unnoticed; the “four major tests” and “four dangers” facing the Party will exist for a long time; the situation in the fight against corruption remains grave and complex; and the task of eradicating the soil and conditions that breed corruption remains arduous and onerous.

必须清醒认识到，弱化党的先进性、损害党的纯洁性的因素大量存在，违背初心和使命、动摇党的根基的危险潜滋暗长，党面临的“四大考验”“四种危险”将长期存在，反腐败斗争形势仍然严峻复杂，铲除腐败滋生土壤和条件任务仍然艰巨繁重。- 10.27 Xinhua commentary

Today’s top items:

1. Fifth Plenum watch - There is no news out of the Plenum, just steady waves of propaganda about Xi Jinping Thought on Party Building and “full and rigorous Party self-governance”. This sections includes links to translation of several of those pieces from Tuesday if you really want to dive in. They are clearly building to something, though exactly what is not yet clear.

There is a long front page People’s Daily commentary by Ren Ping (任平), a collective byline of the People’s Daily Commentary Department. The commentary - Red-Tipped Shrubs and Red Apples—Drawing Inspiration from the Zhaojin Spirit, the Long March Spirit, and the Yan’an Spirit to Travel the New Long March Well 红梢林与红苹果——感悟照金精神、长征精神、延安精神，走好新的长征路 - mentions Xi’s father Xi Zhongxun four times in the context of the “Zhaojin Spirit”, which refers to the revolutionary ideals and practices associated with the Communist guerrilla base established around Zhaojin (照金), in present-day Tongchuan, Shaanxi Province, in the early 1930s by Communist revolutionaries including Liu Zhidan (刘志丹), Xie Zichang (谢子长), and Xi Zhongxun (习仲勋).

2. Outrage over Mbappé calling Mao a dictator - French football star Kylian Mbappé (姆巴佩), also famous for Internet memes portraying him as a dictator, found himself in a massive struggle session after a clip of him saying a few months ago that his favorite variant of that meme was the one of him as a “Chinese dictator” was surfaced on PRC social media:

Here is the full video, he is clearly joking around:

He did not mention Mao, but the outrage was immediate and overwhelming, even though PRC media, AI models and netizens could not actually say what he had said to make them so upset. Several PRC brands announced they were terminating their endorsement deals with him, CCTV halted broadcasts of matches involving LaLiga and Mbappé, and social media platforms froze his accounts. He quickly apologized:

LaLiga is in a panic given how much money the league makes from the PRC, perhaps nearly €100 million per season, and they too quickly issued an apology:

The LaLiga president also met with the PRC Ambassador to Spain:

It is not clear how long the anger and punishment will last, but as Daryl Morey and the NBA learned a few years ago, the PRC has the ability to inflict significant pain on global sports leagues and athletes through cancelled endorsement deals and reduced broadcast revenues, and will make you grovel hard over a long time to get back to something approaching where you were before someone said something to hurt the feelings of the Chinese people. And that punishment is collective, as reduced revenue for leagues and teams hits all players, not just the one who hurt the feelings of the Chinese people.

My favorite official post is from Guangming Daily (光明日报):

“Insults to China’s late great leader will not be tolerated! Eating China’s food while smashing China’s cooking pot? Mbappé, you’re unworthy!”

不容侮辱中国已故伟大领袖！吃中国饭，砸中国锅？姆巴佩，不配！

So if there is a “late great leader 已故伟大领袖” does that mean there is also a living “great leader 伟大领袖”?

This AI-generated photo sums up the hysteria over Mbappé’s comment:

Perhaps the relevant organs see this public opinion incident as a useful distraction from the ongoing elevation of the current “great leader” and the tanking of the stock market?

3. Stock market keeps tanking - Mainland stocks suffered another broad selloff Tuesday. The Shanghai Composite fell 1.33% to 3,648.30, its lowest close since August 12, 2025. The Shenzhen Component declined 2.50%, while the STAR 50 closed at 1,252.28, its lowest level since March. The “National Team” may be trying to prop up the market, but whatever they have been doing, it is far from enough.

The leadership needs confidence in the stock market to channel savings into funding “new quality productive forces” and the technology self-reliance goals. Perhaps after the Fifth Plenum and the enshrinement of Xi Thought on Party Building the leadership needs to roll out Xi Thought on the Stock Market? I am kidding, sort of, as a big problem for investors is that politics remain in command and are likely to be even more in command between now and the 21st Party Congress next year. So absent a policy shift of the magnitude of the one in late Q3 2024, brief rallies from policy tweaks and occasional “National Team” buying are more likely to be seen as profit-taking opportunities.

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Since the new era began, the Party has forcefully resolved prominent contradictions and problems affecting its long-term governance, the country’s lasting peace and stability, and the people’s happiness and wellbeing. It has eliminated serious hidden dangers within the Party, country, and military, ensuring that the great rejuvenation of the Chinese nation is unstoppable. The most fundamental reason lies in the Two Establishes.

新时代以来，党有力解决了影响党长期执政、国家长治久安、人民幸福安康的突出矛盾和问题，消除了党、国家、军队内部存在的严重隐患，确保了中华民族伟大复兴势不可挡，最根本的就在于“两个确立”。 - “Ren Zhongping”, page 1 People’s Daily October 26

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We revisit history to draw wisdom and strength for forging ahead. Looking back again today, 90 years later, on that period of suffering and glory, we recognize even more profoundly that victory in the Long March was inevitable and that it contained the path to victory by which the Party and the people’s army marched forward with resounding steps.

我们重温历史，是为了汲取奋进的智慧和力量。90年后的今天，再次回望那段苦难辉煌，我们更加深刻认识到，长征胜利是必然的，其中蕴含着党和人民军队铿锵前进的制胜之道。 - Xi Jinping Thursday

Today’s top items:

1. Long March 90th anniversary event - Xi Jinping spoke Thursday morning at the Great Hall of the People to mark the 90th anniversary of the Long March’s victory. Zhao Leji presided; Li Qiang, Wang Huning, Cai Qi, Ding Xuexiang, Li Xi and Han Zheng attended, along with about 3,000 others. I have posted a translation of Xi’s speech here.

The speech is about a third the length of the one for the 80th anniversary commemoration in 2016, which Li Keqiang presided over three days before the Sixth Plenum gave Xi the “core” title.

The 2016 speech explained the Long March through four “great expeditions,” ideals and faith first. Today’s replaces them with four “roads to victory,” and the first and longest is the Party’s correct leadership and the significance of having a core:

— The great road to victory of the Red Army’s Long March was forged by relying on the Party’s correct leadership. At the beginning of the Long March, errors of the “Left” line caused immense losses to the Party and the Red Army. In January 1935, the Political Bureau of the CCP Central Committee held the Zunyi Meeting. In fact, it established Comrade Mao Zedong’s leading position in the CCP Central Committee and the Red Army, began to establish the leading position in the CCP Central Committee of the correct Marxist line represented principally by Comrade Mao Zedong, began to form the first generation of central collective leadership with Comrade Mao Zedong at its core, and opened a new stage in which the Party independently resolved practical problems of the Chinese revolution. At the most critical moment, it saved the Party, the Red Army, and the Chinese revolution. After the Zunyi Meeting, the Party and Red Army gained new life, broke through pass after pass, defeated Zhang Guotao’s separatism, and ultimately won the Long March. History proves eloquently that the Party’s correct leadership and the establishment of Comrade Mao Zedong’s core position were decisive for victory in the Long March.

——红军长征的伟大胜利之路，是依靠党的正确领导走出来的。长征初期，“左”倾路线的错误给党和红军造成极大损失。1935年1月，中央政治局举行遵义会议，事实上确立了毛泽东同志在党中央和红军的领导地位，开始确立以毛泽东同志为主要代表的马克思主义正确路线在党中央的领导地位，开始形成以毛泽东同志为核心的党的第一代中央领导集体，开启了党独立自主解决中国革命实际问题新阶段，在最危急关头挽救了党、挽救了红军、挽救了中国革命。遵义会议后，党和红军获得新的生命，一路闯关夺隘并战胜张国焘的分裂主义，最终取得长征胜利。历史雄辩地证明，党的正确领导和毛泽东同志核心地位的确立，对于红军长征胜利具有决定性意义。

That sentence had no equivalent in the 2016 speech, nor did the line that the Red Army “defeated Zhang Guotao’s separatism” (战胜张国焘的分裂主义), though that language did appear in the 2021 third historical resolution.

Of the five “musts” for the new Long March, the third one, on struggle, is new as a standalone section:

We must dare to struggle and be good at struggling...better coordinate development and security, and be ready at any time to withstand major tests of high winds and rough waves, even raging storms.

我们要敢于斗争、善于斗争...更好统筹发展和安全，随时准备经受风高浪急甚至惊涛骇浪的重大考验。

Here are the “five musts”:

1. To carry forward the great Long March spirit and travel the new Long March well, we must uphold the Party’s ideals, convictions, and purpose. 弘扬伟大长征精神、走好新的长征路，必须坚守党的理想信念宗旨。

2. To carry forward the great Long March spirit and travel the new Long March well, we must unwaveringly promote high-quality development and continually meet the people’s growing needs for a better life. 弘扬伟大长征精神、走好新的长征路，必须坚定不移推动高质量发展、不断满足人民日益增长的美好生活需要。

3. To carry forward the great Long March spirit and travel the new Long March well, we must be courageous in waging great struggles with many new historical features. 弘扬伟大长征精神、走好新的长征路，必须勇于进行具有许多新的历史特点的伟大斗争。

4. To carry forward the great Long March spirit and travel the new Long March well, we must accelerate the transformation of the people’s military into a world-class military. 弘扬伟大长征精神、走好新的长征路，必须加快把人民军队建成世界一流军队。

5. To carry forward the great Long March spirit and travel the new Long March well, we must uphold Party leadership and strengthen Party building. 弘扬伟大长征精神、走好新的长征路，必须坚持党的领导、加强党的建设。

According to the CCTV report on the ceremony, Zhao Leji had this to say:

Presiding over the gathering, Zhao Leji said that General Secretary Xi Jinping’s important speech reviewed the great course of the Party’s leadership of the Red Army in carrying out the Long March, summarized the great significance of the Long March victory, revealed the keys to victory that enabled the Party and the people’s army to advance with firm and resounding steps, expounded the historical value of the Great Long March Spirit, and set out five clear imperatives for carrying forward the Great Long March Spirit and traveling well the new Long March. The speech was highly political, ideological and instructive, and must be earnestly studied and understood and fully implemented. The entire Party, the entire military and the Chinese people of all ethnic groups must unite more closely around the CPC Central Committee with Comrade Xi Jinping at its core; follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; profoundly understand the decisive significance of the Two Establishes; strengthen the Four Consciousnesses, reinforce the Four Confidences and uphold the Two Upholds; carry forward the Great Long March Spirit; travel well the new Long March; and work tirelessly to comprehensively advance the building of a strong country and the great cause of national rejuvenation through Chinese modernization.

赵乐际在主持大会时指出，习近平总书记的重要讲话回顾我们党领导红军进行长征的伟大历程，总结长征胜利的伟大意义，揭示长征胜利蕴含的党和人民军队铿锵前进的制胜之道，阐发伟大长征精神的历史价值，就弘扬伟大长征精神、走好新的长征路提出“五个必须”的明确要求。讲话具有很强的政治性、思想性和指导性，要认真学习领会，抓好贯彻落实。全党全军全国各族人民要更加紧密地团结在以习近平同志为核心的党中央周围，坚持以习近平新时代中国特色社会主义思想为指导，深刻领悟“两个确立”的决定性意义，增强“四个意识”、坚定“四个自信”、做到“两个维护”，弘扬伟大长征精神，走好新的长征路，为以中国式现代化全面推进强国建设、民族复兴伟业而不懈奋斗。

On to the Fifth Plenum that starts Monday…

2. Li Qiang meets Putin - Before flying back to Beijing to make the Long March event, Premier Li met with Putin. The readout, translated here, is thin, but he will meet Xi soon at APEC:

Putin asked Li to convey his sincere greetings to President Xi Jinping and wished the Fifth Plenary Session of the 20th CPC Central Committee every success. Putin said China had been, remained, and would continue to be Russia’s closest and most reliable partner. Russia is willing to deepen practical cooperation with China in all fields and supports China in hosting this year’s APEC Economic Leaders’ Meeting.

普京请李强转达对习近平主席的诚挚问候，预祝中国共产党二十届五中全会成功举行。普京表示，中国过去、现在和将来都是俄方最亲密、最可靠的伙伴。俄方愿同中方深化各领域务实合作，支持中方主办今年亚太经合组织领导人非正式会议。

I have posted a translation of the Joint Communiqué of the 31st Regular Meeting Between the Chinese and Russian Heads of Government here.

3. Wang Yi meets his Djibouti counterpart - After their meeting, the two sides issued the “Joint Press Communiqué of the Foreign Ministers of the People’s Republic of China and the Republic of Djibouti on Safeguarding Peace and Stability in the Horn of Africa and the Security of Shipping Lanes in the Red Sea and Gulf of Aden”, which I have translated here. From the statement:

6. The two sides emphasized the importance of safeguarding freedom of navigation in the Red Sea and the Bab el-Mandeb Strait and stressed that the navigation rights exercised by merchant vessels of all countries in accordance with international law should be respected. They believe that the sovereignty, territorial integrity, and wishes of Red Sea coastal states must be genuinely respected in matters of Red Sea governance and security, and that increases in the region’s overall security risks should be avoided. China supports Red Sea coastal states in constructively safeguarding the unobstructed and secure operation of international shipping lanes and protecting the region’s common interests.

六、双方强调维护红海、曼德海峡航行自由的重要性，强调各国商船根据国际法行使航行权利应得到尊重。双方认为，在红海治理和安全问题上，应切实尊重红海沿岸国家主权、领土完整和意愿，避免推高地区整体安全风险。中方支持红海沿岸国家以建设性方式维护国际航道畅通安全、维护地区共同利益。

But they offered no details about how they might safeguard things.

4. New long march for A-share investors - PRC stock indexes keep going down, with the Shanghai Composite now below 3700, the CSI technically in a bear market, and the key tech indexes down over 40% from their 2026 highs:

Another generation of “chives” is unfortunately learning the expensive lesson that for all but a relative few insiders, investing in A-shares tends to be more wealth destroying than wealth creating. The losses are not helpful for confidence, nor are they helpful for the national priority of channeling more savings into key technology sectors to fund breaking through technology chokepoints and breaking out in future industries.

Some strategists have been reaching for interesting indicators to call the bottom:

So far, the “Dalio bottom (Dalio derrière?)” is not holding.

For what it is worth, here is an AI take on the markets. I have Astra send me a daily memo on the PRC and Hong Kong stock markets, using this prompt:

Act as the lead portfolio strategist for a daily mainland China/Hong Kong equity-market research process. Each run should operate like a small analyst team: conduct separate research lanes, require structured handoffs, reconcile disagreements, run a red-team check on dominant narratives, then write one hedge-fund-quality memo for the CIO in New York.

This is what it had to say about the Thursday action:

Four conclusions dominate today’s assessment.

First, the breadth deterioration has become extreme. Only about one in ten advancing-or-declining mainland stocks rose. The decline extended well beyond AI infrastructure, semiconductors and battery manufacturers. This substantially weakens the proposition that the market is simply correcting excessive valuations in a few crowded growth industries.

Second, international developments are reinforcing domestic vulnerabilities. Renewed doubts about returns on AI investment, another increase in oil prices, and selling across major Asian equity markets supplied an unfavorable external backdrop. But China’s persistent weakness in private investment, household consumption and property means the market also lacks a convincing domestic earnings recovery to offset those shocks.

Third, traditional defensive investments are providing relative, not absolute, protection. ICBC and CCB reached new highs in mainland trading even as most equities fell. But their performance was insufficient to stabilize the broader indices, and Hong Kong-listed Chinese banks also declined. This is not a market in which owning the most liquid large-cap stocks guarantees protection.

Fourth, the ETF evidence is increasingly important but also increasingly ambiguous. Substantial broad-market ETF subscriptions and concentrated trading are consistent with large institutional investors attempting to absorb selling pressure. They do not establish that government institutions are purchasing shares, and they have not produced a sustained improvement in the broader market.

Portfolio judgment: I would increase the defensive bias established in earlier memos. Protect capital, reduce residual leverage and avoid using historical valuation discounts alone to justify adding exposure. There may be attractive opportunities emerging in individual profitable technology companies, but the market has not yet demonstrated that forced selling and deteriorating positioning have ended…

The selloff has reached a stage where protecting capital should take precedence over opportunistic buying. There are almost certainly attractive individual Chinese companies being sold alongside weaker businesses, but Thursday’s breadth, price action and offshore weakness provide insufficient evidence that the liquidation phase is over. The national-team question remains important, but no portfolio should be constructed on the assumption that official buying guarantees a market floor.

CSRC head Wu Qing must be very stressed, and I would not be surprised to see the “national team” step in more forcefully to prop up the markets, but while that may provide some short-term relief it seems unlikely to address the underlying reasons for the declines.

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Thanks to AI, some services I use for my newsletter workflow have been offline today awaiting the PHP patches, so the feed is a bit thinner than usual, but should be back to normal tomorrow.

Today’s top items:

1. Long March anniversary - Thursday is the 90th anniversary of the official completion of the Long March. There will be a commemoration and a speech by Xi. As I have written in several recent newsletters, the propaganda crescendo has been b…

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On today’s show Andrew and Bill begin with a raft of proposed export controls from Beijing on AI-related technologies, solar-related technologies, and machinery, as well as continued angst surrounding Japan’s rare earth access. Then: Reactions to strong Q3 GDP numbers in the PRC, continued stock market struggles, questions about GDP targets, and speculation about the agenda for next week’s Fifth Plenum. At the end: The EU signals a willingness to continue protectionist measures in new sectors, a report on new investment deals between the US and China, a potential Putin-Xi-Trump summit, sanctions on China’s version of Y Combinator, and a Politico report on OpenAI’s suddenly restrained export control lobbying, which spawns a variety of thoughts on the state of US chip policy.

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Today’s top items:

1. Li Qiang at the SCO Heads of Government meeting - Li attended the meeting in Dushanbe, Tajikistan, and now he is off to Russia for the “31st Regular Meeting of Chinese and Russian Prime Ministers”.

According to the readout, translated here, of his meetin…

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In just a few days, the Fifth Plenary Session of the 20th Central Committee of the Party will convene in Beijing, making strategic deployments for the sustained promotion of full and strict Party self-governance. This is of great practical significance and long-term guiding importance for our Party to adhere to Xi Jinping Thought on Party Building and deepen the new great project of Party building in the new era. - Qiushi editorial

Today’s top items:

1. Export controls around AI, biomedicine, photovoltaic tech, drones and dredgers - The export control bureaucracy has been busy.

On Friday MOFCOM and the Ministry of Science and Technology proposed adding some AI, biomedicine and photovoltaic technologies to the catalogue of technologies prohibited or restricted from export. Comments are due November 15, but the registration requirements for covered exports, including transfers already underway, took effect immediately.

The proposed 23 AI technologies cover large models, agents, chip design, computing clusters and a set of cyber and information-processing capabilities. MOFCOM says technology that is already public would be excluded, that new open releases of restricted technology could get automatic licensing, and that API and SaaS delivery generally fall outside large-model export management. There is still a lot of uncertainty around the impact to future releases of PRC AI models, and much could change before the draft is finalized.

There is an explicit carrot for joining the World Artificial Intelligence Cooperation Organization (WAICO). MOFCOM promises additional facilitation and support for technology exports that support cooperation among members.

The draft adds five biomedicine technologies to the catalogue, covering cell and gene therapies, small interfering RNA (siRNA) drugs and specified pathogen technologies. The draft leaves a lot of room for the out-licensing deals that have become a significant business/lifeline for PRC biotech firms.

Hu Haitao of the Chinese Academy of Sciences’ Institute of Microbiology told The Paper that the goal is to stop “root-pulling” transfers (“拔根式”转让) that take the underlying technology out of the PRC.

The draft adds 12 photovoltaic technologies. Specified thin-wafer, fluidized-bed polysilicon and perovskite/tandem production technologies would be prohibited outright while qualifying TOPCon, heterojunction and back-contact manufacturing processes would need a license. Listed equipment that carries the technology is covered as well.

According to MOFCOM, a technology transfer can occur at the point of production-line export, during installation and commissioning, and in subsequent improvements, which means an overseas factory built with PRC equipment may stay inside the scope of the controls long after the machines are installed. Finished solar modules generally are not covered.

China Minmetals chief scientist Yan Dazhou was blunt in an interview with China Securities Journal, describing overseas localization requirements, including demands to share core technology and accept minority ownership, as a threat to the technological lead the PRC has accumulated.

The moves reinforce an important feature of Beijing’s approach to strategic supply chains: control the technology needed to replicate China’s industrial capacity abroad and bind global supply chains more tightly to China.

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The key to properly implementing the major decisions and plans of the CPC Central Committee lies in people, and we must be alert to “two-faced people” who harbor divided loyalties and whose words and deeds do not match. “Two-faced people” take many forms. Most notably, some constantly proclaim their political loyalty and the “Two Upholds” and respond quickly and loudly when implementation of the Central Committee’s major decisions and plans is discussed, but in practice act in outward compliance and covert opposition, go their own way, and even disobey orders and ignore prohibitions - Xi Jinping speech from January, excerpted in the new issue of Qiushi

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When some people discuss China’s trade today, they often see only import and export figures and overlook the real effects behind them. China is both a “super seller” and a “super buyer.” As a “super seller,” the effect we bring to other parties is primarily that of benefiting our neighbors. - Li Qiang today at the Canton Fair

Today’s top items:

1. September trade data - September trade data was another stunner. Exports rose 36.3% year-on-year in dollar terms, the fastest since February and far above the 25.5% consensus. Imports rose 31.0%.

The monthly surplus was $133.53 billion, the second largest on record, including a 20-month-high $34.01 billion surplus…

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Today’s top items:

1. National Health and Wellness Conference - The National Conference on Health and Wellness convened from October 12 to 13 in a major political mobilization for delivering the health commitments in the 15th Five-Year Plan. The previous one was held in 2016. The entire Standing Committee attended and Xi of course gave an “important speech” in which he:

stressed that the 15th Five-Year Plan period is a critical period for achieving the goal of building a Healthy China by 2035. China must unswervingly follow the distinctively Chinese path for health and wellness development, implement the guidelines for health and wellness work in the new era, leverage strengths, consolidate foundations, shore up shortcomings and reinforce weak links, promote the high-quality development of health and wellness undertakings, continuously improve the people’s health, and ensure decisive progress in building a Healthy China.

Among the key points from his speech:

• Health must influence government decisions so planning, policy design, project appraisal and construction should prioritize their effects on health;

• Prevention comes first so there should be more focus on healthier lifestyles, food safety and disease-control capacity, including preventing large-scale epidemics;

• Strengthen care close to home so they need to improve and expand county and community institutions, tiered diagnosis and treatment, chronic-disease management and better integrate Chinese and Western medicine;

• Coordinate healthcare, insurance and pharmaceuticals so there needs to be deeper reform of public hospitals around their public-service purpose; reasonable patient costs and optimization of procurement and insurance payments while preserving fund security;

• Build capacity in medical research, innovation, health industries and personnel.

He also talked about China’s global role:

Xi stressed that health for all is a common aspiration of humanity. China should actively promote the building of a global community of health for all, join hands in responding to major challenges in health and wellness, and continuously improve the health and well-being of people in all countries. Health and wellness cooperation under the Belt and Road Initiative should be deepened, and China’s foreign health assistance should be strengthened and innovated. China should tell its Healthy China story well and further build international consensus.

The PRC has made incredible strides in health care in the last decade. There is still much to be improved, but this is one area where policymakers deserve a lot of credit.

2. Xi meets with leaders from Botswana and Togo - According to the readout of his meeting with the Botswana President, translated here, mining was on Xi’s agenda:

Xi put forward four proposals for advancing China-Botswana and China-Africa mining cooperation. First, uphold the premise of cooperation that Africa’s resources belong to Africa. China is willing to share its experience and help African countries formulate mining development plans suited to their national conditions. Second, uphold the philosophy of cooperation that balances principles and interests and pursues mutual benefit. China will continue to encourage Chinese companies to improve their operational capabilities, transfer green technologies suited to Africa’s realities, and promote South-South cooperation in mining development. Third, uphold high-quality development as the direction of cooperation. China will continue to promote the transformation of China-Africa mining cooperation toward industrial value addition, explore affordable and sustainable innovative financing models, and support Africa’s modernization through high-standard cooperation. Fourth, uphold a fair and open environment for cooperation. Africa’s resources should not become tools of geopolitical struggle. China welcomes genuine efforts by all parties to support Africa’s development and is willing to work with African countries to create more favorable conditions for corporate investment and operations...

习近平就推动中博、中非矿业合作提出4点主张：一是坚持非洲资源属于非洲的合作前提。中国愿分享自身经验，帮助非洲国家制定符合国情的矿业发展规划。二是坚持义利相兼、互利互惠的合作理念。中方将继续鼓励中国企业提升运营能力，转移符合非洲实际的绿色技术，推进矿业发展南南合作。三是坚持高质量发展的合作方向。中方将继续推动中非矿业合作向产业增值转型，探讨可负担、可持续的创新融资模式，以高水平合作助力非洲现代化进程。四是坚持公平开放的合作环境。非洲的资源不应成为地缘政治斗争工具，中方乐见各方真心助力非洲发展，愿同非方一道，为企业投资经营创造更适宜条件。

The two countries issued the “Joint Statement between the People’s Republic of China and the Republic of Botswana on the Establishment of a Comprehensive Strategic Cooperative Partnership”, translated here.

3. Cold water on the EU-China trade outcomes? - A Tuesday post from Yuyuan Tantian, translated here, may have thrown a bit of cold water on the claim that hybrid vehicle exports to the EU will be cut in half. Perhaps they are trying to signal strength to a domestic audience, but it makes it sound like there are some potential misunderstandings:

Tanzhu has learned that the baseline used in the negotiations was the number of hybrid vehicles the EU imported from China in 2025: 302,000.

谭主了解到，双方谈判时的基准，是2025年欧盟自中国进口混动汽车的数量：30.2万辆。

The claim that exports would “fall by more than half” came from the EU and serves the EU’s own narrative.

“减少一半以上”的说法来自欧方，服务的是欧方自己的叙事。

The EU subsequently extrapolated the expected volume of exports over the next four years using the growth rate of China’s hybrid-vehicle exports to Europe in recent years. It then compared that figure with the arrangement reached through the consultations and arrived at the claim that exports would “fall by more than half.”

欧方后来按过去几年中国混动汽车对欧出口的增速，推演出未来四年的预期出口量，再与磋商后的安排比较，得出“减少一半以上”的说法。

This extrapolated export volume was not the basis for the two sides’ actual consultations.

这个推演的出口量并不是双方实际磋商的依据。

Forecast data are inherently uncertain. Export performance in recent years was affected by many short-term market factors.

预测数据本身有不确定性。过去几年的出口情况包含了很多市场短期因素的影响。

It is inappropriate to use performance during a period of temporary fluctuations to make a linear projection for the next four years…

拿阶段性波动时期的表现去线性推演未来四年的情况，并不合适。

Therefore, in assessing these negotiations, it is important to distinguish between the story the EU tells publicly and what the two sides actually agreed.

所以看这次谈判，要把欧方对外讲的故事和双方实际谈妥的内容分开看。

And this from South China Morning Post’s Finbarr Bermingham adds to the confusion:

4. Visa finally gets approval for a bank card clearing institution - Almost two decades after Visa should have been allowed to set up a bank card clearing institution in China, the regulators granted approval to start the process. This long overdue approval is not a “deliverable” from Xi-Trump talks, nor is it a gesture of goodwill to the US given how long the PRC has dragged out this process, and how mature and competitive the payments space now is. But the Visa CEO, currently also the chair of the US-China Business Council, will now have even more incentive to act as a damper on US-China relations.

5. Huang Qifan under investigation - Sometimes the rumors are correct, and we got confirmation today that former Chongqing mayor Huang Qifan, 74, is in trouble. Huang’s political career effectively ended in 2016 after he left his post as mayor of Chongqing, where he served with Bo Xilai and then Sun Zhengcai, both of whom are now in prison. He clearly had some sort of political protection, but whatever that was is no longer operative.

After he was sidelined in 2016 he became politically irrelevant but remained a popular commentator on economic policies. We do not know why Huang’s luck ran out, but Caixin has some suggestions:

Since the 20th Party Congress, eight senior Chongqing officials have fallen: Zheng Hong, Xiong Xue, Lu Kehua, Duan Chenggang, Jiang Duntao, Hu Henghua, Luo Lin and Huang Qifan. In addition, Li Yuefeng and Wu Cunrong also previously served in Chongqing...

中共二十大以来，重庆已有郑洪、熊雪、陆克华、段成刚、江敦涛、胡衡华、罗蔺、黄奇帆等八名高官落马。此外，李钺锋、吴存荣也曾任职于重庆。

In addition, within the space of a month, two senior executives of important financial platforms that Huang built during his tenure have fallen, drawing attention. On September 12, Xie Wenhui, former Party secretary and chairman of Chongqing Yufu Holding Group Co., Ltd., was placed under investigation; he had long worked in the Chongqing Rural Commercial Bank system. On September 30, Wu Jian, former Party secretary and chairman of Southwest Securities Co., Ltd., was placed under investigation; he had served as a Party committee member and deputy general manager of Chongqing Yufu Assets Management Group Co., Ltd. Caixin also understands that Huang’s downfall is said to be related to problems in the mixed-ownership reform of some of the city’s state-owned enterprises during his time as mayor of Chongqing. And during his tenure as mayor, he lived through the downfall of two municipal Party secretaries, Bo Xilai and Sun Zhengcai.

此外，一个月内，黄奇帆任内打造的重要金融平台有两名高管落马，引发关注。9月12日，重庆渝富控股集团有限公司原党委书记、董事长谢文辉被查，他长期在重庆农商行系统工作；9月30日，西南证券股份有限公司原党委书记、董事长吴坚被查，他曾担任重庆渝富资产经营管理集团有限公司党委委员、副总经理。另据财新了解，黄奇帆落马据称与其担任重庆市长期间该市部分国企混改存在的问题有关。而他在重庆市长任上，经历了薄熙来和孙政才两任市委书记的落马。

Chongqing is a cursed posting for politicians. Former Chongqing Party Secretary Chen Min’er is in his second term on the Politburo and now in Tianjin, but any talk of him for a bigger promotion seems to have died out. Yuan Jiajun, with a background in the aerospace sector, is the current Party Secretary there.

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On today’s show Andrew and Bill begin with an extended survey of EU-PRC trade dynamics in the wake of an eventful week. Topics include: a deal on hybrid exports that may have averted a trade war, potential loopholes that may complicate the effectiveness of that reform, the tools proposed by France and Germany that may have forced a compromise, tensions that remain unresolved as the EU Council meets later this week, and a word on currency reforms as the PBOC rejects international methods for assessment. From there: Holiday spending data hits a four-year low amid analysis that suggests debt may be constraining stimulus measures. At the end: reactions to a report on Xi’s rest breaks at the White House, Xi succession questions, a report on the F-35 mishap, and speculating on the future of US-China relations and whether the current administration has passed peak China dove.

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