1. State Council Executive Meeting - Premier Li presided Thursday over this week’s meeting. They are usually held on Friday I believe, so I wonder why they moved it up a day. The agenda of the meeting was “to study work related to advancing the building of a unified national market, review and adopt the “15th Five-Year Plan” for Building a Modernized Emergency-Management System, and discuss the People’s Bank of China Law of the People’s Republic of China (Revised Draft)”. According to the readout:

The meeting noted that building a unified national market is required for constructing a new development pattern and promoting high-quality development. In recent years, the building of a unified national market has yielded positive results and made important progress, but sustained effort over the long term is still needed. Related institutional construction must be pushed forward in depth, with further improvement of systems for property-rights protection, market access, f…

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On today's show Andrew and Bill parse the messaging from both sides of last week's US-China summit in Beijing. Topics include: What the PRC means by "a constructive relationship of strategic stability," why the US side adopted the framing as well, a relative absence of tangible deliverables, and why "a calculated stalling tactic from both sides designed to manage risk" may be a more accurate rendering of the status quo. From there: Trump's various comments on Taiwan spark concern and questions, plus notes on Rubio, Ratner, an indictment of Chinese shipping magnates, and an Iran ceasefire Xi calls "imperative." At the end: Vladimir Putin's visit to Beijing, questions for the EU, and more bad news for Nvidia in China.

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Unilateral coercion, hegemonism, bloc confrontation, and undercurrents of neo-colonialism are surging. International law and the basic norms of international relations are repeatedly being trampled upon. Many global governance institutions face growing difficulty in coordinating action among states and mediating international disputes, and are struggling to function effectively. World peace and development face new risks and challenges, and there is a danger of the international community fragmenting and regressing back to the law of the jungle. - Joint Statement of the People's Republic of China and the Russian Federation on Advocating Global Multipolarity and a New Type of International Relations

Today’s top items:

1. No new gas pipeline for Putin? - Russian President Putin is already on his way back home after meeting with Xi on Wednesday. It appears he did not get the deal he has most coveted, the Power of Siberia 2 pipeline. The two sides did sign twenty cooperation documents and i…

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1. Putin arrives in Beijing - Vladimir Putin arrived in Beijing late Tuesday with a large entourage of government ministers and executives. Wang Yi greeted him at the airport. There are no new details on what to expect from this trip beyond what I mentioned yesterday.

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The entry of the China-US strategic contest into a new phase of strategic stalemate is the second logical premise for our consideration of the correct way for China and the United States to get along. From the historical experience of great-power rivalries, the relations between major powers in a stalemate phase often face severe tests of high winds and rough seas, even of stormy waves; if handled poorly, the relationship faces the major risk of capsizing. How China and the United States coexist in the stalemate phase concerns not only the two countries but the entire world. - China Institutes of Contemporary International Relations

Today’s top items:

1. Outcomes from Trump’s visit to China - On Saturday the Ministry of Commerce released a statement on initial outcomes from the summit, and on Sunday the White House issued a fact sheet. They are not in complete alignment, but there will be a Board of Trade, to facilitate “managed trade”, and a Board of Investment. I had Claude create this comparison graphic:

The White House fact sheet also stated that:

• President Trump and President Xi agreed that the United States and China should build a constructive relationship of strategic stability on the basis of fairness and reciprocity. President Trump will welcome President Xi for a visit to Washington this fall. The two countries will support each other as the respective hosts of the G20 and APEC Summits later this year.

• Both leaders agreed Iran cannot have a nuclear weapon, called to reopen the Strait of Hormuz, and agreed that no country or organization can be allowed to charge tolls.

• President Trump and President Xi confirmed their shared goal to denuclearize North Korea.

The PRC side did not mention the second and third points.

Agreeing “that the United States and China should build a constructive relationship of strategic stability on the basis of fairness and reciprocity” is a big win for Xi Jinping and the PRC, as this framework is an evolution of Xi’s longstanding attempts to get the US to agree to a new type of major/great-power relationship with the United States. The US side added “on the basis of fairness and reciprocity”, and right now the White House does not see a lot of fairness and reciprocity in the relationship, so this new phase of strategic stalemate may be stabilizing but it is also tenuous.

2. Constructive relationship of strategic stability - I wrote Thursday that so far this looked to be the most important outcome from the meeting, and that conclusion stands. Wang Yi briefed the media Friday on the meetings and discussed the concept in a bit more detail. This has been a concept long in the works, and as I wrote above it is an evolution of the idea of a new type of major/great-power relationship with the United States.

On the day Trump arrived in Beijing, the Institute of American Studies research group of the MSS think tank China Institutes of Contemporary International Relations (CICIR), issued a report titled “The Great Changes in the World and the Way for China and the US to Coexist”, which I have translated in full here. The abstract says the two countries have “entered a new phase of strategic stalemate 战略相持的新阶段”:

The two countries urgently need to explore a correct way of getting along that fits the new realities of the relationship. To this end, the Institute of American Studies of the China Institutes of Contemporary International Relations established a research group to consider, against the backdrop of great changes in the world and the new phase of China-US relations, how to build a constructive China-US relationship of strategic stability framework, and to push the two major powers toward mutual respect, peaceful coexistence, and win-win cooperation.

两国迫切需要探索一条适应中美关系新现实的正确相处之道。为此，中国现代国际关系研究院美国研究所成立课题组，立足世界大变局和中美关系新阶段，思考如何构建中美建设性战略稳定框架，推动中美两个大国迈向相互尊重、和平共处、合作共赢。

Previous US administrations had resisted entering into these kinds of new frameworks defined by the PRC side, so even with the US conditions of “on the basis of fairness and reciprocity” this is a very significant move by the Trump team. I believe they understand that the Chinese will use this hard won period of tenuous stability to do everything they can to derisk and reduce reliance on the US, as the PRC effectively articulated in the new 15th Five Year Plan, but it is not clear the US side has the political will or capacity to do the same, especially as the PRC will be using every lever at their disposal to push back on further attempts in the US to derisk and reduce reliance on the PRC.

As Li Haokai wrote in a Substack post “Stripping Away the Optimistic Rhetoric of the Xi-Trump Summit Reveals China’s Realist Playbook” on the outcomes:

My overarching assessment is that we must strictly distinguish the superficial optics of this summit from the true, underlying nature of the relationship. Within China, very few serious strategists are viewing these developments as positively as they appear. Instead of a genuine relationship “recovery” or a strategic reset, some of the leading Chinese scholars interpret the current dynamic through the lens of hard-nosed realpolitik. Tracking the assessments of prominent figures like Wu Xinbo, Yan Xuetong, and Jin Canrong reveals that we might be witnessing a calculated stalling tactic (缓兵之计) from both sides designed to manage risk as both nations lock into a protracted strategic stalemate (战略相持).

3. Trump’s problematic Taiwan comments - There was concern going into the summit that President Trump might agree to change US policy from “not supporting” Taiwan independence to “opposing” Taiwan independence, and that he would further delay or cancel a planned large arms slle to Taiwan. He was remarkably disciplined in his comments on Taiwan, until his Friday interview for Brett Baier of Fox News. From the transcript:

Donald Trump: they have somebody there now that wants to go independent. Well, it’s a very risky thing. When you go independent, you know, they are going independent because they want to get into a war, and they want to, they figure they have a United States behind them, I’d like to see it stay the way it is.

And I’ll tell you something, I’ll make a little news, I’d like to see everybody making chips over in Taiwan come into America, because to be honest with you, I think it’s the greatest thing you can do, because it’s a heated situation…

Bret Baier: Should the people of Taiwan feel more or less secure after your meetings with President Xi?

Donald Trump: Neutral. Neutral. This thing going on for years...

Bret Baier: Has the policy changed at all?...

Donald Trump: No, nothing has changed. I will say this: I’m not looking to have somebody go independent, and you know, we are supposed to travel 9,500 miles to fight a war. I’m not looking for that. I want them to cool down. I want China to cool down.

Bret Baier: But you are waiting on approving billions of dollars of weapons for Taiwan. Is that moving forward?

Donald Trump: That’s, well, I have not approved it yet. We are going to see what happens. I may do it. I may not do it.

Bret Baier: Yes, what’s your hinge point?

Donald Trump: Well, I’m not going to say that. But I may do it, I may not do it. But we are not looking to have wars, and we are, if you kept it the way it is, I think China is going to be OK with that. But we are not looking to have somebody say let’s go independent, because the United States is backing us. You know?

Bret Baier: So, President Xi probably liked that you have not approved the weapons to Taiwan.

Donald Trump: I would say like is maybe too strong a word, because he thinks I could do it with just the signing of my signature, unlike Biden, who couldn’t sign his signature. No, I’m holding that in abeyance, and it depends on China. Depends, it’s a, it’s a very good negotiating chip for us, frankly. It’s a lot of weapons, it’s $12 billion.

So officially the US policy has not changed, but his comments have caused a lot of consternation. So now we have to wait to see if the arms package is approved, either in its full size or broken up into smaller chunks, or just cancelled. And if it is killed, will Trump get something for it from Xi? The DPP should probably increase its DC lobbying budget…

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So far the most important news from the Thursday meeting, from what we can see publicly, is that the US and China have agreed to “build a constructive China-US relationship of strategic stability as the new positioning for China-U.S. relations…[that] will provide strategic guidance for China-U.S. relations over the next three years and beyond”, at least according to Xi’s opening statement at the meeting with Trump:

Xi stressed that China is committed to the stable, healthy, and sustainable development of China-U.S. relations. President Trump and I agreed to build a constructive China-US relationship of strategic stability as the new positioning for China-U.S. relations. This will provide strategic guidance for China-U.S. relations over the next three years and beyond, and will, I believe, be welcomed by the two peoples and the international community. “Constructive strategic stability” should be positive stability with cooperation as the mainstay, a sound stability with moderate competition, a constant stability with manageable differences, and an enduring stability with promises of peace. A “constructive China-US relationship of strategic stability” is not a slogan but should be reflected in actions that move in the same direction.

习近平强调，中方致力于中美关系稳定、健康、可持续发展。我同特朗普总统赞同将构建”中美建设性战略稳定关系”作为中美关系新定位，将为未来3年乃至更长时间的中美关系提供战略指引，相信会受到两国人民和国际社会的欢迎。”建设性战略稳定”应该是合作为主的积极稳定，应该是竞争有度的良性稳定，应该是分歧可控的常态稳定，应该是和平可期的持久稳定。”中美建设性战略稳定关系”不是一句口号，而应该是相向而行的行动。

Xi defined the four pillars of this new positioning, translation of the four areas via Xinhua:

1. positive stability with cooperation as the mainstay 合作为主的积极稳定指引

2. sound stability with moderate competition 竞争有度的良性稳定

3. constant stability with manageable differences 分歧可控的常态稳定

4. enduring stability with promises of peace 和平可期的持久稳定。

The PRC leadership wants a period of strategic detente and this concept could realize that on terms favorable to them for the rest of Trump’s second term. Any future U.S. moves to address PRC industrial overcapacity, tighten technology controls, etc. could then be cast by Beijing as violations of the new “constructive China-US relationship of strategic stability” to which the two leaders personally agreed.

The formulation (tifa 提法) accepts that the US-China relationship is competitive — as Xi did in 2023 with the Biden administration — but it now insists that competition be kept “moderate” (有度) and that differences be “manageable” (可控). This may allow China to get to define what counts as acceptable competition. It also makes Xi and his team look like they have successfully stood their ground against the Trump Administration and are now negotiating from a position of equal strength.

This is a useful point from Li Yaqi’s Substack:

A relationship you have stabilized is a relationship you can compete inside for a long time without it breaking. Stability is not the opposite of rivalry here. It is the container that makes a long rivalry survivable. “Fighting step by step” is, structurally, what managed long-term competition looks like from the inside…

It is disciplined struggle from the position of strength…

The phrase matters because it captures the cadre requirement behind this new diplomatic language. China’s diplomats are not only expected to take a proactive and assertive stance on matters of principle. They are also expected to struggle with skill: to use experience, judgment, timing, and tactical discipline to advance strategic objectives. In that sense, new tifa should not be mistaken for a post-competitive mood. It is closer to an operating doctrine for competition that has become more mature, more sensitive, and more bureaucratically tooled.

Did the US side agree to this new formulation for US-China relations? It is not mentioned in the much shorter White House readout from the same meeting, posted to X:

President Trump had a good meeting with President Xi of China. The two sides discussed ways to enhance economic cooperation between our two countries, including expanding market access for American businesses into China and increasing Chinese investment into our industries. Leaders from many of the United States’ largest companies joined a portion of the meeting. The Presidents also highlighted the need to build on progress in ending the flow of fentanyl precursors into the United States, as well as increasing Chinese purchases of American agricultural products. The two sides agreed that the Strait of Hormuz must remain open to support the free flow of energy. President Xi also made clear China’s opposition to the militarization of the Strait and any effort to charge a toll for its use, and he expressed interest in purchasing more American oil to reduce China’s dependence on the Strait in the future. Both countries agreed that Iran can never have a nuclear weapon.

Xi also raised Taiwan, in stark language but nothing particularly new:

Xi stressed that the Taiwan question is the most important issue in China-U.S. relations. Handled well, the overall stability of the bilateral relationship can be maintained. Handled poorly, the two countries will collide or even come into conflict, pushing the entire China-U.S. relationship into a very dangerous situation. “Taiwan independence” and peace across the Taiwan Strait are mutually exclusive, like fire and water. Maintaining peace and stability across the Taiwan Strait is the greatest common ground between China and the United States, and the U.S. side must handle the Taiwan question with the utmost prudence.

习近平强调，台湾问题是中美关系中最重要的问题。处理好了，两国关系就能保持总体稳定。处理不好，两国就会碰撞甚至冲突，将整个中美关系推向十分危险的境地。”台独”与台海和平水火不容，维护台海和平稳定是中美双方最大公约数，美方务必慎之又慎处理台湾问题。

Treasury Secretary Bessent told CNBC in an interview that President Trump would have more to say about Taiwan:

KERNEN: So many times I’ve, and this will be the final question. I know you got to run, Mr. Secretary. But you have so many different hats. I’m going to ask you, it’s kind of a Treasury, kind of a secretary of war question, I guess. Will Taiwan come up? Do you know whether President Xi is going to ask President Trump to change the long-standing strategic ambiguity? Or will there be any requests from President Xi to limit arms sales to Taiwan at this point? Do you know? Can you comment on that at all?

BESSENT: Sure, sure, Joe. It wouldn’t be a U.S.-China summit without the Taiwan issue coming up. And I’m confident that President Trump, the, understands the issues around that and the, is very resolute the, in his answers. And I’m sure we’ll be hearing more from him in the coming days on that.

Perhaps we will hear more on Taiwan from Trump in a few hours when he talks with Sean Hannity of Fox News.

Today’s People’s Daily page one is one for history:

Today’s top items:

1. Key US-China meetings - This section includes a full translation of the readout of the Xi-Trump meeting

2. Rubio and Bessent on the talks - Secretary of State Rubio told NBC News that Taiwan “did not feature prominently” in the talks with Xi, while Secretary Bessent told CNBC that they are “going to talk about forming a board of trade for the bilateral trade between the U.S. and China. And we’re going to talk about a board of investment that will be responsible for investment in non-sensitive areas.” Bessent also said in the interview that the US and China will “set up a protocol in terms of how do we go forward with best practices for AI to make sure nonstate actors don’t get a hold of these models”. From Bessent’s comments, it kind of sounds like lots of things are not yet locked down.

3. Anthropic on competition on AI between the US and China - Anthropic has been consistent that it wants the US and its allies to lead in AI, not the Communist Party of China. Today they released a new paper on the topic titled 2028: Two scenarios for global AI leadership:

In this post, we present two scenarios for what the world might look like in 2028, when we expect transformative AI systems to have arrived.

In the first scenario, America has successfully defended its compute advantage. Policymakers have acted to tighten export controls further, disrupt China’s distillation attacks, and further accelerate democracies’ adoption of AI. In this world, democracies set the rules and norms around AI. It’s also in this scenario that we’re most likely to successfully engage with China on safety, which we’re supportive of to the extent this is possible.

In the second scenario, America has chosen not to act. Policymakers have not tightened loopholes on the CCP’s access to compute, and AI firms in China have quickly taken advantage—catching up to the frontier and even overtaking America. In this world, AI norms and rules are shaped by authoritarian regimes, and the best models enable automated repression at scale. It will be no solace that this authoritarian triumph has happened on the back of American compute.

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The late addition of Huang, with a pickup at the refueling stop in Alaska, has sparked speculation that some sort of deal for sales of more Nvidia chips to China may be on the table. Like most of the speculation about this trip, we should find out soon.

The addition of Michael Kratsios, director of the White House Office of Science and Technology Policy, to the trip is interesting for any AI discussions. He issued the memo last month about “Adversarial Distillation of American AI Models”.

Earlier today we engaged in our own speculation about the visit when we recorded this week’s episode of Sharp China - 10 Questions and Modest Expectations With Trump in China to Meet Xi Jinping:

On today’s show Andrew and Bill talk through 360 degrees of Presi…

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Show Notes:

On today's show Andrew and Bill talk through 360 degrees of President Trump's trip to Beijing this week. Topics include: Jensen Huang hitching a ride in Alaska, general expectations for deliverables after limited leaks and hurried advance planning, Trump's reception in Beijing, and the limits of "upper hand" analysis. From there: A coterie of billionaire CEOs make the trip with Trump, a US Chamber of Commerce/Rhodium report warning about the PRC's industrial strategy, and Trump makes overtures about "opening" China. At the end: Questions on Taiwan arm sales and AI cooperation, the expected talks on Ezra Jin and Jimmy Lai, a trillion dollar investment report that went viral eight months later, Xi's calculus before a 21st Party Congress, the Iran question looming over the week's meetings, and big, fat hug speculation.

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Related Readings:

Trump China visit; China’s Next Generation Industrial Policy; Standardizing and developing AI agents; No more deflation?; Ding Xuexiang visits Huawei -- Sinocism

Jensen Huang hitching a ride -- Emily Goodin on X

A weakened Trump arrives at Xi’s court -- FT

Trump on Opening China -- Truth Social

Trump is taking more than a dozen U.S. executives to China. Jensen Huang isn’t one of them -- CNBC

China expanding its industrial dominance, warns US business group -- FT

China’s Next-Generation Industrial Policy -- Rhodium

Donald Trump demands Xi Jinping ‘open’ China to US business -- FT

Xi Is Poised to Press Trump on Arms Sales to Taiwan -- NYT

U.S. and China Pursue Guardrails to Stop AI Rivalry From Spiraling Into Crisis -- WSJ

Families of two Americans jailed in China urge Trump to seek their release -- Reuters

Jimmy Lai is not forgotten as Trump goes to China -- WaPo

US-China Relations Cannot Return to the Past, But Can Have a Better Future—On the Occasion of the China-US Heads of State Meeting—— - Guo Jiping -- People’s Daily (Sinocism Translation)

Is Trump About to Invite In the Biggest Predator in the World? -- NYT

Team Chyyyyyna -- Lara Trump on X

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Today’s top items:

1. Trump China visit - The PRC confirmed that President Trump will meet with Xi this week. He will arrive May 13 and depart after lunch Friday. According to the PRC, “Chinese President Xi Jinping and U.S. President Donald Trump will have an in-depth exchange of views on major issues concerning China-U.S. relations and world peace and development.”

Vice Premier He Lifeng will lead a delegation to South Korea on May 12-13 to hold economic and trade consultations with Treasury Secretary Bessent. Such a meeting on the eve of the Trump-Xi summit is a sign that they are still working on deliverables for the visit. Expectations should be low for this visit, but you never know what Trump may decide to announce. I am of the view that the “China has the upper hand” takes about the upcoming Trump visit to Beijing are overblown, or at least that is not at all how the US side views the situation, but we shall know soon enough when we learn what significant, credible outcomes there are, if any.

The US continues to announce Iran-related sanctions affecting PRC firms, with the Friday entity listing of three satellite firms and today’s announcement by the Department of the Treasury’s Office of Foreign Assets Control (OFAC) that it is “designating 12 individuals and entities for their roles enabling the Islamic Revolutionary Guard Corps’ (IRGC) sale and shipment of Iranian oil to the People’s Republic of China.”

A small group of CEOs will join Trump in China:

I believe this is the list of CEOs invited; it is not clear all will attend. Nvidia’s CEO surprisingly did not make the cut, so that probably means there will be no deal to sell more Nvidia chips to China.

Bessent will be in Japan Tuesday and meet with Prime Minister Takaichi, but I think the Japanese are disappointed Trump is flying all the way to Asia without stopping in Tokyo given all the pressure the PRC is exerting on the country.

2. China’s Next Generation Industrial Policy - A new report, prepared for the U.S. Chamber of Commerce by the Rhodium Group, analyzes the evolution of Chinese industrial policy a decade after the “Made in China 2025” initiative. The authors argue that Beijing is entering a more systemic and pervasive phase of state intervention, shifting toward an “industrial policy of everything” that spans raw materials, mature industries, and frontier technologies like AI and quantum computing. Despite domestic fiscal constraints, the Chinese government is recentralizing resources and utilizing state-directed financing to maintain its manufacturing edge. This strategy has resulted in a “China Shock 2.0,” characterized by a massive manufacturing trade surplus and deepening global dependencies on Chinese inputs. The sources highlight that China’s growing trade dominance is often masked by price deflation, making its actual market share gains in volume even more significant than value-based data suggests. Ultimately, the report warns that the window for international policy responses is closing as China further entrenches its position in global value chains.

The report provides extensive detail on how China is actively working to bind global supply chains to its domestic manufacturing base and prevent other countries from diversifying their reliance away from China. By making alternative supply chains nearly impossible to develop, China can incentivize foreign firms to relocate production inside China, further concentrating global dependence and increasing its geopolitical leverage.

You can read the report here.

3. State Council Executive Meeting - Li Qiang chaired a State Council Executive Meeting on Saturday “to study and implement the spirit of General Secretary Xi Jinping’s important remarks on the current economic situation and economic work, as well as his important remarks at the symposium on strengthening basic research.” Strengthening domestic circulation, expanding and upgrading the service sector, planning and construction of the “six networks” - the water network, the new power grid, the computing power network, the new-generation communications network, urban underground pipe networks, and the logistics network, and “continued advancement of risk resolution in real estate, local government debt, small and medium-sized financial institutions, and other areas”, were among the agenda items. I have posted a full translation of the readout here.

4. Standardizing and developing AI agents - On Friday the Cyberspace Administration of China, National Development and Reform Commission, and Ministry of Industry and Information Technology jointly released the “Implementation Opinions on the Standardized Application and Innovative Development of Intelligent Agents”. I have posted a translation of the document here, and a translation of the accompanying Q&A with a “relevant official from the CAC” here. That official explains why they issued the “Opinions”:

In recent years, AI agent products represented by mobile phone assistants, terminal-side intelligent stewards, and cloud-based agents have emerged at an accelerating pace, taking on the form of large-scale deployment and greatly facilitating people’s work and lives. At the same time, characteristics of AI agents such as high autonomy and elevated permissions have also brought security risks including privacy leakage, unauthorized actions, and behavioral loss-of-control. It is necessary to coordinate development and security, and to promote the standardized application and innovative development of AI agents.

答：近年来，以手机助手、终端智能管家、云端智能体等为代表的智能体产品加速涌现，呈现规模化应用态势，极大便利人们工作生活。同时，智能体高自主性、高权限等特性也带来了隐私泄露、越权操作、行为失控等安全风险，需要统筹发展与安全，促进智能体规范应用和创新发展。

The Party Central Committee and the State Council attach great importance to the development of artificial intelligence. At the 20th collective study session of the Politburo of the CCP Central Committee, General Secretary Xi Jinping stressed the need to grasp the trends and laws governing AI development; to accelerate the formulation and improvement of relevant laws and regulations, policies and institutions, application standards, and ethical norms; and to build systems for technical monitoring, risk early warning, and emergency response, so as to ensure that artificial intelligence is safe, reliable, and controllable. In August 2025, the State Council issued the “Opinions on Deepening the Implementation of the ‘AI+’ Initiative,” which—focusing on areas including science and technology, industrial development, consumption upgrading, people’s livelihoods and welfare, and governance capacity—set a phased target of being the first to achieve broad and deep integration of AI with key sectors by 2027, with adoption rates for new-generation intelligent terminals, AI agents, and similar applications exceeding 70 percent.

党中央、国务院高度重视人工智能发展。习近平总书记在中共中央政治局第二十次集体学习时强调，要把握人工智能发展趋势和规律，加紧制定完善相关法律法规、政策制度、应用规范、伦理准则，构建技术监测、风险预警、应急响应体系，确保人工智能安全、可靠、可控。2025年8月，国务院印发《关于深入实施”人工智能+”行动的意见》，以科学技术、产业发展、消费提质、民生福祉、治理能力等领域为重点，提出到2027年，率先实现人工智能与重点领域广泛深度融合，新一代智能终端、智能体等应用普及率超70%的阶段性目标。

The formulation and issuance of the Implementation Opinions is a concrete measure for carrying out the “Opinions on Deepening the Implementation of the ‘AI+’ Initiative.” Oriented toward driving technological innovation, enhancing governance capacity, building an industrial ecosystem, and improving people’s livelihoods and welfare, it seeks to create a sound policy environment, leverage the demonstration effect of model use cases, and coordinate the high-quality development, high-level security, and high-efficiency governance of AI agents.

制定出台《实施意见》是贯彻落实《关于深入实施”人工智能+”行动的意见》的具体举措，以推动科技创新、提升治理能力、构建产业生态、提升民生福祉为导向，营造良好政策环境，发挥典型场景示范效应，统筹推动智能体高质量发展、高水平安全、高效能治理。

5. No more deflation? - April CPI (1.2%) and PPI (2.8%) both increased in April from a year earlier, and more than forecast. The Iran war and rising energy prices are helping end deflation, though perhaps not in the way the authorities prefer. The anti-involution campaign may also be starting to have an impact.

6. Ding Xuexiang basic research inspection tour - Last week Ding Xuexiang made an inspection tour about basic research in Fujian, Shanghai, and Beijing. This follows the April 30th symposium on strengthening basic research. According to the readout of Ding’s trip, he

pointed out that General Secretary Xi Jinping attended the symposium on strengthening basic research and delivered an important speech, issuing a call to further consolidate the foundations of building a strong country in science and technology on the new journey of the new era. We must thoroughly study and implement the spirit of General Secretary Xi Jinping’s important speech, give play to the advantages of the new whole-nation system, and comprehensively raise the level of basic research and the capacity for original innovation with the perseverance and resolve of “sharpening one sword over ten years.”

Ding visited the Chinese Academy of Sciences, the Huairou National Laboratory, Shanghai Jiao Tong University, the University of the Chinese Academy of Sciences, CATL and Huawei’s Lianqiu Lake R&D Center. The CCTV report on Ding’s visits shows him meeting Ren Zhengfei at Huawei’s Chip Fundamental Technology Research Laboratory.

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1. Suspended death sentences for two former Defense Ministers - Wei Fenghe and Li Shangfu were both sentenced to death with a two-year suspended sentence, which means they will likely spend the rest of their lives in jail. Wei was found guilty of accepting bribes and Li was found guilty of accepting bribes and offering bribes. There is no mention of to whom Li offered bribes. These are very severe sentences for such former senior officials, and probably do not bode well for Zhang Youxia and Liu Zhenli.

Here is the brief statement from Xinhua:

On May 7, 2026, a military court issued its verdict in accordance with the law on the bribery case of Wei Fenghe, former member of the Central Military Commission and former State Councilor and Minister of National Defense. Wei Fenghe was found guilty of accepting bribes and sentenced to death with a two-year reprieve, deprived of political rights for life, and ordered to forfeit all personal property. Upon expiration of the two-…

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Today’s top items:

1. Iran FM in China - Wang Yi met with his Iranian counterpart Araghchi in Beijing. According to the PRC readout, Wang was clear that the PRC wants the Strait of Hormuz opened:

Wang Yi reiterated China’s principled position on the situation in Iran, stressing that since the outbreak of hostilities, China has been actively promoting peace talks. President Xi Jinping has solemnly put forward a four-point proposal on safeguarding and promoting peace and stability in the Middle East, which has received a positive response from the international community. The current regional situation is at a critical juncture between war and peace. China believes that a comprehensive cessation of hostilities brooks no delay, that resuming hostilities is even less advisable, and that persisting with negotiations is especially important. China supports Iran in safeguarding its national sovereignty and security…

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The concept of Sino-US-European “trilateral relations” featured prominently in April foreign-policy discourse, with the emphasis, predictably, placed on China’s strategic preference for a Europe more independent from US influence. The presentation of this varies, however. Among scholars at Tsinghua’s CISS, Da Wei writes in Foreign Affairs of the need for Europe to reject transatlantic right-wing nationalism and rediscover a liberal-minded “independent soul”, while Sun Chenghao proposes an engagement strategy for forestalling closer EU “embeddedness” in transatlantic tech networks.

By contrast, other scholars speculate about how a right-wing populist swing in Europe could paradoxically lead to greater self-reliance for the continent and thereby benefit Sino-European relations. Di Dongsheng, Dean of Area Studies at Renmin University, presents European right-wing populists as “pragmatic” forces pushing Europe to rethink liberal orthodoxies and therefore not necessarily as obstacles to improved China–Europe ties. Fudan University’s Yan Shaohua, continuing his previously explored theme of the potential benefits to China from the rise of the European far-right, notes that recent US pressure on Europe has forced certain far-right figures to distance themselves from Trump.

This more optimistic view of the far-right is likely shaped by the precedent of Viktor Orbán’s Hungary carrying out an “Eastern Opening” policy that courted Chinese investment. Fidesz’s defeat by Tisza in the general election this month is read by researchers Dai Yichen and Li Kai as pointing to closer alignment with Brussels and tighter regulatory scrutiny of Chinese investment, especially in sectors such as batteries, but not as a radical break given Hungary’s continuing economic dependence on China. Brussels, as usual, is cast throughout by analysts as China’s main frustration, from Taiwan to green energy policy.

Another, tacit, assumption may be that a softening on Russia, with which the European far-right is associated, could alleviate that well-known obstacle in the Sino-European relationship. At a Shanghai forum with the Moscow-based think tank Valdai Discussion Club, Cui Hongjian—former director of the Institute of European Studies at the China Institute of International Studies—expressed the hope that Russian elites could rebuild economic ties with Europe after the Ukraine War and establish a continent-spanning “New Eurasia” trade and security community linking Europe and China.

April also saw a share of “America-watching”, with the historian Niu Ke and the analyst Zhang Tengjun providing contrasting, though not necessarily contradictory, interpretations of the evolving intellectual currents in US foreign policy.

We shall separately cover two-month assessments of the Iran war and its impacts in the coming week, but its broad shadow is clearly visible in the economics section: from Guan Tao and Lian Ping on the nuanced effects of energy-price inflation and export pressure, to former People’s Bank of China Governor Zhou Xiaochuan and Sheng Songcheng, an adviser to the Shanghai municipal government, on the new openings for RMB internationalisation.

Against the backdrop of both risks to global supply chains and Beijing’s recent order that the Manus-Meta deal be cancelled, economic and resource security is also a clear theme. Hong Nong and Jin Canrong ponder the implications of the Hormuz crisis for other trade corridors, while Zheng Shanjie of the National Development and Reform Commission, Long , Long Guoqiang of the Development Research Centre of the State Council, and Zhao Minghao of Fudan University discuss the meaning—and limits—of “high-quality opening up”.

— James Farquharson

1. Global Order:

   1. Yang Jiemian & Zhang Chong on the “multipolar stalemate” that creates the conditions for trilateral China–Europe–US cooperation.

   2. Chen Xi, Wang Dong, Xiao Geng & Zhu Xufeng on establishing a UN outpost in Shenzhen as a link between East Asia and the Global South.

   3. Yang Guangbin & Wan Zeyu on China’s search for its own theory of “win-ology” to rival the West.

   4. Liu Ye on why China doesn’t need to “win” in Africa.

   5. Jia Qingguo on how risk narratives shape political authority.

2. US-China:

   1. Niu Ke on the growing appeal of “restraint” as a strategic concept in US foreign-policy thinking.

   2. Zhang Tengjun on the generational influence of younger China hawks in Congress and their institutional constraints.

   3. Gu Wenjun viewing the US MATCH Act as leverage prior to the Trump-Xi meeting rather than a stable sanctions regime.

   4. Li Wei on why US-China economic conflict now has fewer stabilisers.

3. Europe:

   1. Da Wei on Beijing’s preferred conception of European strategic autonomy.

   2. Sun Chenghao on the need to prevent a drift in Europe’s role from a US-China buffer to a conduit for US pressure.

   3. Di Dongsheng on the conditions for a future improvement in Sino-European relations.

   4. Yan Shaohua analysing the positioning of Europe’s New Right between Trumpism and national sovereignty.

   5. Wang Wanying & Ma Xiaolin on China-EU relations shifting from values-based confrontation to rules-based rivalry.

   6. Zhang Rui & Tong Tong on how clean energy infrastructure became a tool of geopolitical pressure for Brussels.

   7. Dai Yichen on how a Tisza-led Hungary may narrow Orbán-era political space for China without ending pragmatic economic cooperation.

   8. Li Kai on Chinese firms needing to prepare for stricter economic regulation in Hungary after the election.

4. Russia:

   1. Cui Hongjian on Europe as the missing link in a China-Russia “New Eurasia”.

   2. Shang Yue on the contested nature of Russia’s post-2022 “turn to the East”.

   3. Zhao Long calling for a recalibration of Sino–Russian energy and trade coordination after the Hormuz crisis.

5. East Asia:

   1. Zheng Jian on establishing cross-Strait peace backed by mainland deterrence.

   2. Qiu Changgen on dialogue as the Taiwan Strait’s pressure valve.

   3. Ding Chun & Shang Lixue on the EU’s gradual hollowing-out of the “One China” policy.

   4. Da Zhigang on NATO’s Asia-Pacific turn and the risk of Japanese remilitarisation.

   5. Wu Shicun on China’s “protracted war” against the South China Sea Arbitration ruling.

6. Chinese Economy:

   1. Guan Tao on energy shocks and China’s fragile reflation.

   2. Lian Ping on when high oil prices shift from useful inflationary pressure to macro risk.

   3. Yu Yongding on why China should not give up on infrastructure stimulus.

   4. Luo Zhiheng on the shift in fiscal policy emphasis following the 28 April Politburo meeting.

   5. Sheng Songcheng on Chinese corporate globalisation creating real offshore yuan-asset demand.

   6. Zhou Xiaochuan on why the RMB need not copy the dollar’s path of running a current account deficit.

7. Economic and Resource Security:

   1. Hong Nong on why Hormuz turmoil raises the Arctic’s strategic value.

   2. Jin Canrong on how the Hormuz crisis boosts China’s confidence in managing the Strait of Malacca.

   3. Zheng Shanjie on securing China’s internal development and external investments against risk.

   4. Long Guoqiang on firms needing to carry out disciplined expansion overseas without leaking China’s industrial and tech advantages.

8. Artificial Intelligence:

   1. Zhao Minghao on why Chinese AI firms now face economic-security scrutiny.

   2. Cai Fang on AI displacement and the case for universal basic income.

   3. Cao Heping on turning personal data into shareholding-based income for the era of AI job displacement.

I. Global Order

Yang Jiemian (杨洁勉) and Zhang Chong (张翀): The post-Cold War order has moved from US “single-superpower dominance” [单超独霸] to a “multipolar stalemate” [多极相持] defined by “one superpower defending supremacy, multiple strong powers seeking strength” [一超护超、多强求强] as the US role shifts from provider of global public goods to interest-first unilateralist. Europe’s pursuit of strategic autonomy is a useful but limited opening for China: it may weaken US hegemony and preserve space for China–Europe cooperation, yet internal division and continuing dependence on US security and technology keep the triangle closer to 1:2 than 1:1:1. Despite such obstacles to constructive three-way engagement, the shift to multipolarity creates a real need for trilateral public-goods provision in specific areas: China’s role in development finance makes old Paris Club debt governance insufficient, while AI development in the US and China also increases the importance of “risk-sharing”. — Chair, Academic Advisory Committee, Shanghai Institutes for International Studies; Doctoral Student, School of International Relations and Public Affairs, Shanghai International Studies University (国际关系研究, 2026 Issue 2)

Yang Guangbin (杨光斌) and Wan Zeyu (万泽雨): While Western ideological power has long rested on a systematised “win-ology” [赢学] that presents the West’s rise as the “end of history”, China’s comparatively underdeveloped “win-ology” should be addressed, as any country without its own “win-ology” is “finished” [就会完蛋]. An example of modern Western “win-ology” is liberal democracy and market economics, which recast historically contingent Western dominance as universal knowledge: the Nobel Prize in Economics serves as the archetypal “Western win-ology prize”. This underlines the need to overcome Western-centred social science and clarify the value of China’s “new form of human civilisation” [人类文明新形态]. — Dean, School of International Studies, Renmin University of China; Doctoral Student, School of International Studies, Renmin University of China (观察者网, 11 April)

Liu Ye (刘烨): African states are strategic actors using Chinese, Western and multilateral resources to expand development autonomy, with China historically willing to let its support become a “strategic card” [战略牌] in smaller states’ bargaining with the West. The Lobito Corridor [Zambia-DRC-Angola, running west to Angola’s Atlantic port of Lobito] shows why Chinese and Western interests are not wholly opposed: although promoted by the US and Europe partly to reduce reliance on China, it rests on Chinese-rebuilt railway and port infrastructure, and its launch accelerated TAZARA’s revival [Zambia–Tanzania railway, running east to Dar es Salaam on the Indian Ocean] by reminding China and African partners of the railway’s latent strategic value. Angola, Zambia and the DRC treat Lobito as another logistics and financing channel, not an anti-China project, while Chinese firms still retain deep interests across the corridor. — Postdoctoral Researcher, Institute for Advanced Studies in Humanities and Social Sciences, Tsinghua University (文化纵横, 2026 Issue 2)

Chen Xi (陈溪), Wang Dong (王栋), Xiao Geng (肖耿) and Zhu Xufeng (朱旭峰): Establishing a comprehensive UN hub in Shenzhen or Hangzhou would directly connect China’s innovation clusters with the Global South’s developmental requirements, particularly in frontier sectors such as AI and the low-altitude economy. This addresses a structural gap regarding the UN’s physical presence in East Asia, while alternative candidates such as Singapore or Tokyo are hindered by high operational costs and limited proximity to developing markets. Shenzhen, in particular, could leverage Hong Kong’s financial infrastructure and the “One Country, Two Systems” framework to facilitate global access and cross-border data flows, rendering the UN a more resilient, multi-centric network. — Chen Xi: Professor, Zhejiang International Studies University. Wang Dong: Professor, School of International Studies, Peking University. Xiao Geng: Associate Dean, School of Public Policy, CUHK-Shenzhen. Zhu Xufeng: Dean, School of Public Policy and Management, Tsinghua University. (中美聚焦, 16 April)

Jia Qingguo (贾庆国): Prediction has always underpinned political authority because convincing narratives of risk identification reduce the world’s inherent uncertainty and guide the allocation of power, legitimacy and resources. From priests and shamans to strategists and scientists, risk recognition has become more empirical and data-driven, yet never purely objective: cognitive limits, partial elite knowledge, mass anxiety and political struggle all distort judgement, while simplified narratives such as the “Thucydides Trap” can harden into accepted “truths”. Effective risk governance therefore requires recognising uncertainty and the limits of knowledge, limiting bias and manipulation, and using history and data to identify risks before they become threats. — Professor, School of International Studies, Peking University (中华读书报, 1 April—introduction to “From Cold Politics to Hot Politics, Global Risk Politics in an Age of Anxiety and Anger” by Pang Xun (庞珣), Professor, School of International Studies, Peking University)

2. US-China

Niu Ke (牛可): A narrative shift towards “restraint” [节制] is emerging as a powerful, cross-partisan consensus within US foreign policy discourse, challenging the Washington establishment’s ideological reliance on global hegemony. Driving this shift are new organisations such as the Quincy Institute, which successfully spreads anti-interventionist ideology by leveraging new media to engage politically disaffected demographics and appeal to the isolationist streak in US society, notably grassroots MAGA voters. Despite current glaring contradictions between assertive overseas military operations and isolationist rhetoric, the fusing of systemic “retrenchment” with “America First” principles will likely define the future trajectory of US foreign policy. — Associate Professor, Department of History, Peking University (北京大学中外人文交流研究基地, 1 April)

Zhang Tengjun (张腾军): A predominantly Republican new generation of US legislators, possessing a security mindset shaped by the 9/11 and 2008 financial crises, has adopted a China stance deeply critical of the engagement policy adopted by the older generation. Viewing China as a “systemic rival” following perceived historical policy failures, the rise of this cohort has triggered a surge in China-related legislative proposals—from 14 in the 115th Congress to 169 in the 118th—usually resulting in increased legislative scrutiny, review and restrictions. However, these younger radicals remain constrained by executive authority and veteran legislators, whilst younger Democrat “hawks” take a softer line than their Republican counterparts, favouring a “constructive rebalancing” over a full bilateral rupture. — Deputy Director, Institute of American Studies, China Institute of International Studies (当代美国评论, 9 April)

Gu Wenjun (顾文军): The US MATCH Act marks another escalation in semiconductor containment, but its widening trajectory—from targeted strikes against Huawei and SMIC, to “small yard, high fence”, and now towards an attempted “large yard, high fence”—signals that Washington’s “moves are running out” [招数见底] and their marginal effect is declining, while the bill may function less as an executable sanctions regime than as bargaining leverage before Trump’s China visit. The April revision of the bill, which shifted some blanket bans into a licensing regime, exposes an unstable decoupling coalition: hawks and firms such as Micron seek to prevent China from dominating memory-chip manufacturing as it did solar, while firms like Nvidia and semiconductor-equipment suppliers fear lost market share, damaged earnings and share-price pressure. Strict enforcement would also excessively punish Dutch and Japanese suppliers deeply reliant on China, which accounted for 36.5% of global equipment sales in 2025, making delay, dilution and loopholes likely. — Chief Analyst, ICWise (芯谋研究, 26 April)

Li Wei (李巍): US and Chinese economic interests are now in direct opposition, as Washington prioritises manufacturing revival while Beijing seeks industrial upgrading, eroding the old complementarities of globalisation and making intensified struggle unavoidable. Trump’s new security doctrine is economic nationalism centred on reindustrialisation, supply-chain autonomy and technological supremacy, especially in AI. Yet neither side is likely to defeat the other decisively, making cyclical rivalry and selective cooperation the more probable outcome, as both continually test each other’s bottom lines [“战略底线”] and gradually forge a new balance of power and status. — Professor, Department of International Relations, Renmin University of China (观察者网, 16 April)

3. Europe

Da Wei (达巍): Beijing wants Europe to act as a genuine “independent pole” in the China–Europe–US triangle, but sees European “strategic autonomy” as largely rhetorical: Europe responds weakly to US pressure over Greenland and remains soft on Israel, while continuing to signal against China through naval deployments around Taiwan and the South China Sea. This frustration persists despite China and Europe sharing “more common ground” on global governance and issues like Iran than either does with the United States, even as China and the United States paradoxically converge in nationalist, economically interventionist and executive-centred governing instincts. To become a true geopolitical pole, Europe must rediscover its liberally inclined “independent soul” rather than succumb to trans-Atlantic nationalism, whose fragmenting logic would weaken European integration and reduce its global relevance. — Director, Centre for International Security and Strategy, Tsinghua University (Foreign Affairs, 17 April)

Sun Chenghao (孙成昊): Europe faces “dual embeddedness” [双重嵌入] in the asymmetric China–US–Europe triangle: dependence on the US in security, institutions and norms gives it influence but exposes it to American pressure, while deep economic and technological ties with China complicate simple bloc alignment with the US. The trilateral relationship’s trajectory hinges on whether European strategic autonomy can withstand US efforts to turn the transatlantic alliance into a “technology-security community” [科技安全共同体], binding Europe to American standards in technology, data, investment screening and export controls; if those efforts by the US succeed, Europe becomes less a buffer than an amplifier [放大器] for the global diffusion of US pressure. For China, stabilising China–US relations is therefore the “ballast stone” [压舱石] of the trilateral relationship as it eases Europe’s strategic anxiety and reduces pressure for bloc alignment, while deeper green, digital and industrial cooperation can help address European de-risking concerns. — Associate Research Fellow, Centre for International Security and Strategy, Tsinghua University (国际展望, 2026 Issue 2)

Di Dongsheng (翟东升): Europe, long seen as a stronghold of “white-left” [白左] progressivism, is being pushed by globalisation-induced “crowding and disorder” [拥挤混乱], migration tensions and weak economic performance into political self-examination, with “pragmatic” and “patriotic” right-populism—exemplified by Meloni—potentially better placed than exhausted progressive orthodoxies to revive growth. This shift need not obstruct better China–Europe relations: these forces are less anti-system extremists than conservative pragmatists, while Europe’s likely turn towards greater conservatism in trade, internet governance and social policy could coexist with a search for autonomy from the US. A real European “move towards China” would require relative defence autonomy from the US, an independent public-opinion and digital ecosystem, as well as Chinese steps to ease industrial-competition anxieties, including possible RMB appreciation or credit mechanisms supporting purchases of Chinese green-energy products. — Dean, School of Global and Area Studies, Renmin University of China (世界知识, 2026 Issue 7)

Yan Shaohua (严少华): Europe’s New Right is splitting into three camps as it struggles to reconcile earlier enthusiasm for Trump and links with the American right with the geopolitical and economic threat now posed to Europe by Trumpism. A “European sovereignty resistance camp”, represented by Jordan Bardella, condemns US pressure over Greenland as coercion; a “pragmatic compromise camp”, represented by Giorgia Meloni, tries to balance Washington and Brussels while facing tariffs and defence-spending demands; and an “extreme clientelist camp” around the AfD’s harder intellectual circles accepts subordination to US power if it helps expel immigrants and preserve racial “homogeneity”. The New Right now faces the choice between diluting its nationalist core and becoming Washington’s proxy, or upholding sovereignty-based nationalism that protects European civilisation and interests. — Deputy Director, Centre for China–Europe Relations, Fudan University (世界知识, 2026 Issue 8)

Wang Wanying (王婉赢) and Ma Xiaolin (马晓霖): The European Parliament IMCO delegation’s late-March to early-April China visit, the first after years of parliamentary estrangement following the 2021 Xinjiang sanctions dispute, signals renewed functional contact under low trust as China–EU interaction shifts from value-based confrontation to institutional competition over market rules and governance frameworks. Its agenda on digital trade, platform liability, customs logistics and consumer protection moves relations towards technical rule dialogue, especially as EU customs reforms raise obligations on Chinese platform firms and the electric-vehicle dispute is managed through minimum price undertakings. China should not passively absorb external rules, but use institutional opening, Chinese regulatory proposals and stronger domestic system-building to turn rule-making pressure into institutional competitiveness. — Assistant Researcher, China-CEEC Economic and Trade Cooperation Research Institute, Ningbo University; Director, Institute of Pan-Mediterranean Studies, Zhejiang International Studies University (财新, 7 April)

Zhang Rui (张锐) and Tong Tong (童桐): Based on an analysis of EU policy documents from 2020–2024, the EU’s “geopoliticisation” of clean energy intensified as its strategic narratives moved the energy transition from technical governance into international power competition, casting “systemic rivals” and “non-market actors” as competitors in critical raw materials and clean-energy supply chains. By legitimising industrial intervention, protectionist trade tools and exclusionary “raw-material clubs”, this shift could restrict Chinese firms’ market access, fragment global supply chains and raise transition costs; China should contest politicised clean-energy narratives, strengthen public-opinion rebuttals [舆论回击], and promote a cooperative world story [世界故事] to defend open markets and its new-energy industries. — Researcher, Global Energy Interconnection Economic and Technological Research Institute; Lecturer, State Key Laboratory of Media Convergence and Communication, Communication University of China (国际关系研究, 2026 Issue 2)

Dai Yichen (戴轶尘): The Tisza Party’s victory will recalibrate rather than reverse Hungary’s China policy: Budapest will shift towards EU-mainstream positions on investment screening and compliance, but pragmatic economic cooperation with Beijing will largely endure. Tisza lacks any geopolitical intent to wield an “Eastern Opening” [东向战略] strategy as leverage against Brussels, removing the logic that underpinned Orbán’s tilt. Yet with China supplying 57% of Hungarian FDI in 2025, and the Budapest–Belgrade Railway and Chinese battery plants now generating tangible returns, the new government must balance embedding bilateral ties into an “EU common policy framework” against safeguarding domestic economic interests. — Executive Deputy Director, Department of European Studies, Institute of International Relations, Shanghai Academy of Social Sciences (澎湃新闻, 14 April)

Li Kai (李恺): Chinese enterprises in Hungary must prepare for a Tisza government inclined to discipline foreign investment through EU rules rather than offer the policy dividends of Orbán’s “Eastern Opening” [向东开放]. This will require deeper feasibility studies of local and EU regulations, front-loaded compliance work in environmental protection, labour and auditing, and readiness to handle investigations under the EU’s Foreign Subsidies Regulation, alongside budgeting for materially higher operating costs. The shift presents both a challenge and an opportunity: navigating these constraints will sharpen Chinese firms’ ability to adapt and compete within the EU framework, laying foundations for broader European expansion. — Associate Researcher, Institute of World Development, Development Research Center of the State Council (国务院发展研究中心世发所, 25 April)

4. Russia

Cui Hongjian (崔洪建): China and Russia should stabilise a “New Eurasia” marked by “risks at both ends and stability in the middle” [两端有风险、中间基本稳定], extending their strategic partnership from bilateral trust into a wider regional framework. Europe is currently the crucial missing link in this vision: a development-centred order would connect European capital, technology and talent with Russian resources and energy, and Chinese market scale and technology, turning Eurasia into an open, autonomous and interconnected space. While some Russian scholars see post-Ukraine Russia–Europe relations through a pessimistic, cyclical view of history, the impossibility of restoring the old relationship need not preclude a more constructive one, especially as insecure maritime and land routes make Eurasian connectivity more strategically urgent. — Professor, Academy of Regional and Global Governance, Beijing Foreign Studies University (观察者网, 29 April; speech at the China–Russia Conference, Valdai Discussion Club, Shanghai, April 26-27)

Shang Yue (尚月): Russia’s effort to reshape its identity would require accepting that “Europe is no longer the sole reference point” and remoulding its “state–civilisation” [国家—文明] framework from the top down—entailing not only sustained investment and interest reorganisation, but a deeper spiritual transformation. Repeated Russian efforts to Westernise or integrate with the West since Peter I have largely failed, and some Russian elites now argue that the post-2022 “turn to the East” [向东看] cannot remain confined to trade and diplomacy: Moscow is pursuing four integrations across Siberia, the Far East and the Arctic, spanning regional development, mineral-processing chains, the “Trans-Arctic Transport Corridor” [跨北极运输走廊], and domestic-external logistics links. Yet this turn remains contested rather than settled: Russian advocates of Russia’s “Siberianisation” face counterarguments that the country’s most developed and populous regions remain in Europe and cannot be detached from European structures. — Deputy Director, Institute of Eurasian Studies, China Institutes of Contemporary International Relations (世界知识, 2026 Issue 6)

Zhao Long (赵隆): Beyond the geo-economic shocks of the US–Israeli strikes on Iran, the narrative competition surrounding China and Russia has intensified, with some Western media stressing a “Russia wins, China loses” [俄赢中输] framing that is essentially divisive in orientation. Against this backdrop, Sino–Russian strategic coordination requires a targeted “recalibration” [再校准]: enhanced risk-hedging in energy and connectivity, optimised settlement mechanisms, and reduced dependence on high-risk maritime routes through accelerated overland projects, anchored by an SCO/BRICS-led “bottom-line consensus” [底线共识] on corridor and supply-chain security. — Director, Institute for International Strategic and Security Studies, Shanghai Institutes for International Studies (上海国际战略问题研究会, 26 March)

5. East Asia

Zheng Jian (郑剑): Peace has become an urgent task in cross-Strait relations, and the KMT and CCP bear an unavoidable responsibility to safeguard the course of peaceful development [和平发展] after Xi Jinping’s April meeting in Beijing with KMT leader Cheng Li-wen — at a time when Taiwan independence [台独] forces and external actors continue to damage its foundations. This peace must rest on the 1992 Consensus, renewed party-to-party exchanges, deeper integration and increased benefits for Taiwan compatriots. The mainland’s military capability and industrial depth are now sufficient to prevail in any scenario involving rapid escalation, prolonged resistance or foreign intervention. — Director, Centre for Strategy and Security Studies, Taiwan Research Institute, Xiamen University (CRNTT, 13 and 23 April)

Qiu Changgen (仇长根): Cross-Strait dialogue is an essential tool for managing Taiwan Strait risks, and the mainland’s renewed bridge-building gives Taiwan an opportunity to lower tensions in a way that benefits both sides and acts as a stabiliser for peace. Xi Jinping’s meeting with Cheng Li-wen strengthens KMT-CCP interaction, creates a new channel for communication and cooperation, helps restart exchanges across fields, reduces misunderstanding, and helps return relations to the track of peaceful development [和平发展]. Although the Taiwan Strait remains severe and complex, the situation is broadly controllable [总体可控]. — Director, Institute of Cross-Strait Exchanges and Regional Development, East China Normal University (CRNTT, 11 April)

Ding Chun (丁纯) and Shang Lixue (尚丽雪): EU–Taiwan relations have shifted since 2020 from limited economic and cultural contact into a broader economic, political and soft-security relationship, with the European Parliament as the most activist driver, and recorded interactions rising fivefold between 2019 and 2024. The foundation is economic: Taiwan’s chips, electronic components and key parts have recast it from a “fragile democracy” into a strategic supply-chain partner and Taiwan Strait maritime-security concern. The political consequence is the hollowing-out of the EU’s “One China policy”, through quasi-official contacts and de-emphasising “One China” language in communications about Taiwan. Europe also links Taiwan to Ukraine through the “Ukraine today, Taiwan tomorrow” logic, binding US credibility in Asia to its security role in Europe and giving European actors greater reason to emphasise Taiwan. In response, China should maintain “strategic composure” [战略定力], defending red lines while managing disputes to preserve China–EU stability. — Professor, Institute of World Economy, School of Economics, Fudan University; Doctoral Student, “Global Europe” Programme, Shanghai Academy of Global Governance and Area Studies, Shanghai International Studies University. (台海研究, 2026 Issue 1)

Da Zhigang (笪志刚): NATO’s large-scale ambassadorial visit to Japan and South Korea in mid-April signals that its penetration of the Asia-Pacific is becoming increasingly substantive, forcibly transplanting bloc confrontation [阵营对抗] into an already complex region and risking weaker cooperation, lower mutual trust, arms racing and erosion of peaceful development across the Asia-Pacific. Japan and South Korea serve as military-industrial, technological, intelligence and strategic “springboards” [天然跳板] for NATO’s regional expansion, but the sharper danger lies in Japan: NATO cooperation gives external endorsement and strategic cover to Japanese remilitarisation [再军事化], reinforcing Tokyo’s offensive security shift and becoming a major variable destabilising Northeast Asia. — Researcher, Northeast Asia Research Institute, Heilongjiang Academy of Social Sciences (环球时报，17 April)

Wu Shicun (吴士存): China must continue repudiating the “toxic legacy” [遗毒] of the 2016 South China Sea arbitration ruling, which sought to deny China’s territorial sovereignty and maritime rights, risks spilling into wider maritime disputes, and enables claimant states to conduct cognitive and public-opinion warfare [认知战、舆论战] against China by presenting the ruling as “international law”. Its deeper danger lies in giving legal cover to Philippine unilateralism, external intervention and challenges to China’s rights, while distorting UNCLOS beyond questions it can legitimately adjudicate. China should therefore “strike whenever it emerges” [冒头就打], wage a “protracted war” [持久战] through sustained legal and discursive rebuttal, and target the tribunal’s composition, jurisdiction, admissibility and interpretations to reshape international opinion. — Chairman, Huayang Center for Maritime Cooperation and Ocean Governance; Chairman, Academic Committee, National Institute for South China Sea Studies (环球时报, 28 April)

6. Chinese Economy

Guan Tao (管涛): Although China has shown resilience to the initial energy shock, if extreme volatility drags into the third quarter, the hit to Asian and European economies—which absorbed 71.3% of Chinese exports in 2025—would significantly weaken China’s external demand. Imported inflation from higher commodity prices may be partly welcome amid China’s fragile reflation [再通胀], but it remains uncertain whether producer-price inflation (PPI) can pass smoothly into consumer price inflation (CPI) and avoid squeezing downstream producers’ profit margins. If import costs rise while export prices decrease and domestic demand weakens, China’s trade conditions will deteriorate, overcapacity pressures will intensify, and external demand’s support for growth will be seriously weakened. — Global Chief Economist, BOC Securities (中国宏观经济论坛, 21 April)

Lian Ping (连平): A sustained oil shock from the Iran war would hit China mainly through cost pressure and demand compression: higher transport, logistics and energy costs would raise imported inflation, squeeze household discretionary consumption, and weaken investment as midstream and downstream firms face both rising input costs and soft final demand. The losses would be limited if the crisis is short, and some gains could emerge: higher oil prices may ease deflationary expectations, lift profits for upstream energy producers, improve the economics of renewables and electrification, and accelerate energy-security upgrades. But if the crisis lasts six months or more, with oil at USD 140–180 per barrel, the gains would be outweighed by broader inflation, export-competitiveness and balance-of-payments pressures, in which case China should therefore cap domestic fuel-price pass-through by releasing reserves. In the long-term, China should expand domestic oil and shale exploration, increase long-term contracts with non-Middle Eastern suppliers, deepen RMB settlement in energy trade, and gradually lift the non-fossil energy share from 21.7% towards 30%. — Lian Ping, Chief Economist, Guangkai Chief Industry Research Institute (大公報, 9 April)

Yu Yongding (余永定): Total factor productivity (TFP) and consumption growth should not be fetishised as independent variables for macroeconomic adjustment: much of China’s earlier TFP growth reflected one-off reform dividends, while consumption is the result of growth rather than its driver. The shift from “investment-driven” to “consumption-driven” growth is therefore a strategic trap, even though raising consumption remains necessary amid weak demand. Social security, tax reform and redistribution matter, but are too slow as short-term macroeconomic levers; sustained consumption depends on higher permanent incomes and improved expectations. The optimal response is renewed central government support for infrastructure investment, producing a crowding-in effect that drives private investment → growth → higher incomes → improved expectations → stronger consumption. Wasteful local-government infrastructure spending should be corrected, not used as a reason to abandon infrastructure altogether — or to “give up eating for fear of choking” [因噎废食]. — Academician and Research Fellow, Institute of World Economics and Politics, Chinese Academy of Social Sciences (上海发展研究基金会, 2 April)

Luo Zhiheng (罗志恒): The 28 April Politburo meeting on current economic conditions and economic work sent a stabilisation signal focused on sustaining Q1 momentum and guarding against downside risks: real and nominal GDP growth reached 5.0% and 4.9%, yet strength partly reflected policy front-loading and concentrated project starts, leaving the key test whether consumption can shift from policy stimulus to income- and expectations-led demand. “Optimising the fiscal expenditure structure” [持续优化财政支出结构] signals a rebalancing from broad enterprise- and project-led fixed-asset stimulus towards consumption, households and “investment in people”. Meanwhile, fixed-asset investment is to be channelled into higher-quality infrastructure, with “six-network” [六网] construction—water, power, computing, communications, underground-pipeline and logistics networks—stimulating near-term demand while easing medium-term constraints on digital industry, advanced manufacturing, urban resilience and supply-chain circulation. — Chief Economist and President, Research Institute, Yuekai Securities (粤开志恒宏观, 28 April)

Sheng Songcheng (盛松成): China’s accelerating corporate “going global” wave [出海], with overseas operations contributing a rising share of listed firms’ revenue and profits, is generating organic demand for renminbi loans, bonds, safe assets, trade credit and treasury management tools, creating an opportunity for the RMB to deepen its role as an international financing currency rather than merely a settlement unit. Policy has also shifted from emphasising RMB recycling back into China to market-led discretion, allowing firms to retain earnings offshore or reinvest abroad and echoing aspects of a reserve-currency logic. While the US Federal Reserve is constrained between inflation and labour weakness, China retains comparative freedom of movement for lower interest rates and the RMB has the advantage of lower financing costs, exchange rate stability and access to the Chinese market. Priorities should include expanding offshore RMB safe assets, strengthening Shanghai–Hong Kong coordination, and preserving a market-based but stable exchange rate. — Adjunct Professor of Economics and Finance, China Europe International Business School; former Director-General of the Statistics Department, People’s Bank of China (财新, 21 April)

Zhou Xiaochuan (周小川): While no single currency will replace the dollar in the short term, the RMB can expand internationally through the capital and financial account, overseas lending, policy-bank credit, FDI, corporate financing and central-bank swap lines; it does not need to replicate the classic reserve currency model of supplying global liquidity through a current account deficit. The present moment is a “golden window” [黄金窗口期] for advancing RMB internationalisation, as US tariff activism, sanctions overreach and geopolitical disruption have weakened confidence in the dollar. Given global reserve demand is far smaller than the stock of US Treasuries, China need not replicate America’s debt-heavy system, but should deepen and liberalise RMB safe-asset markets [安全资产] through more liquid, accessible bond markets, pursue calibrated capital-account opening, stronger cross-border financial infrastructure and Shanghai-centred institutional reform. — Former Governor, People’s Bank of China (中国宏观经济论坛 CMF, 10 April)

7. Economic and Resource Security

Hong Nong (洪农): Middle Eastern disruption is underscoring the Arctic’s strategic significance as an alternative energy and shipping corridor, also raising the geopolitical value of Alaska LNG as Asian importers seek supplies that bypass Hormuz. The renewed importance of high-latitude routes and resources extends beyond hydrocarbons, benefiting Arctic and near-Arctic actors such as Norway, Greenland and Canada, while positioning the region as a potential global resource-security “buffer zone” [缓冲区]. Within this shift, Russia will remain especially important to energy-importing Asian economies, even as Europe continues to unwind its energy ties with Moscow. — Executive Director & Senior Research Fellow, Institute for China-America Studies (N.B., a PRC-funded think tank based in Washington DC) (环球时报, 1 April)

Jin Canrong (金灿荣): America’s difficulties in confronting Iran around the Strait of Hormuz make direct conflict with China less, not more, likely, since Washington should become more cautious after exposing the limits of its military power. The Malacca problem, or “Malacca predicament” [马六甲之困], is an old vulnerability for China, but one already addressed through strategic oil reserves, domestic production, overland pipelines and new-energy substitution, thereby reducing its dependence on vulnerable maritime chokepoints. Should the US ever block Chinese tankers in such distant waters, China could exploit its near-seas advantage by pressuring US allies such as Japan and South Korea, whose dependence on overseas supplies is greater, while also holding US bases and Indian Ocean deployments at risk. — Professor, School of International Studies, Renmin University of China (金金乐道, 27 April)

Zheng Shanjie (郑栅洁): China must develop a “new security architecture to safeguard the new development pattern” [以新安全格局保障新发展格局], as the Fifteenth Five-Year Plan faces a harsher external environment: trade barriers, “decoupling and chain-breaking” [脱钩断链], and competition over energy and critical minerals expose the fragility of global supply chains, while AI, big data, quantum information and biotechnology are reshaping production systems and the global division of labour. Chinese overseas investment must be paired with risk controls, “avoiding dangerous places, chaotic regions and hazardous sectors” [危地不往、乱地不去、危业不投]. — Party Secretary and Chairman, National Development and Reform Commission (人民日报, 20 April)

Long Guoqiang (隆国强): “High-quality opening up” and orderly “going global” [“走出去”] are strategies for protecting China’s export strengths amidst slowing global growth and rising market barriers by letting the world “share China’s market opportunities” [“分享中国市场机遇”] and securing overseas critical minerals, energy supplies and transport corridors. China should increase imports, widen service-sector access, and guide firms expanding overseas to support host-country industrialisation. Yet expansion must be disciplined: “dangerous places, risky zones and hazardous industries” should be avoided [“危地不往、险地不去、危业不投”], and while mature technologies can aid developing countries, “one must guard against advanced industrial technology strengths leaking overseas” [“要防范优势产业先进技术外泄”]. — Deputy Director, Development Research Centre of the State Council (中央社会主义学院学报, 2026 Issue 2)

8. Artificial Intelligence

Zhao Minghao (赵明昊): China is building a more detailed governance system for economic and technological security, addressing “chokepoint” risks in core technologies while strengthening AI security across algorithms, data, infrastructure and applications. The Manus case shows that, amid US all-in AI competition and a China-targeted “technology alliance”, commercial interests in sensitive AI sectors must be subordinated to national-security review where personnel flows, technology transfers, data movement and foreign-capital links create strategic risk. — Deputy Director, Centre for American Studies, Fudan University (澎湃, 29 April)

Cai Fang (蔡昉): AI is reshaping market relations by displacing labour more quickly and visibly than new employment can emerge, making universal basic income a more credible policy response than universal shareholding in AI assets because it is simpler and more universal. Existing labour law and social-security frameworks in China are increasingly inadequate as algorithmic management sharpens capital’s capacity to monitor, discipline and replace labour, especially in platform and gig work. The strategic task is therefore to share AI-driven productivity gains through public finance, basic services and “investment in people”, preventing technological progress from reinforcing ageing, weak demand and employment insecurity. — Chief Expert, National High-End Think Tank(s), Chinese Academy of Social Sciences (知识分子, 14 April)

Cao Heping (曹和平): A system of personal digital asset accounts [数字资产账户] should allow individuals whose labour is displaced by AI to receive income from the data and digital assets they generate through daily life and large-model use. Large models are not ordinary sales monopolies, but public-good-like “production-process monopolies”: firms should be compensated for initial innovation and production inputs, with support capped at around 2.7 times input and returns regulated near 15%, while downstream gains are shared socially. The key is to recognise users as digital producers, convert confirmed personal data into balance-sheeted “high-energy assets” [高能资产], and bring these assets into monetary circulation through state-managed digital currency issuance. — Professor, School of Economics, Peking University (观察者网, 7 April)

A Chinese-Style Kill Line? (26 April)

This rare social-governance essay by Yang Haiyan uses China’s viral debate over America’s “kill line” to warn that China may face its own form of institutionalised downward mobility. Unlike the US case, China has long relied on hukou controls, rural land rights and poverty-relief systems to prevent large-scale urban destitution, but urbanisation, slower growth and labour-market precarity are weakening those buffers. The piece identifies three groups at risk: hidden poor among second-generation urban residents, landless farmers and new-generation migrant workers. Rather than proposing wholly new remedies, it presents existing governance experiments—Fengqiao-style mediation, sealing minor offence records and credit rehabilitation—as efforts to keep temporary hardship from becoming permanent exclusion, though these reforms risk clashing with public demands for harsh punishment and consistent rule enforcement.

Liquidating an “Empire”: China’s Strategy to Capitalise on US Hegemonic Strain (21 April)

This provocative essay by Wu Xinbo argues that US hegemony has become structurally overextended, forcing Washington to “sell off” non-essential imperial assets to preserve its military, technology and dollar core. Rather than merely observing US decline, China should “harvest” these assets cheaply and precisely, using debt purchases, investment and industrial cooperation as bargaining chips for access to resources, technology, IP and rule-making influence. The piece’s logic is opportunistic but cautious: China should avoid systemic conflict, target moments of US weakness such as credit crises or electoral pressure, dilute political risk through third-party capital and “technology for resources” deals, and guard against asset, patent and rule traps while retaining leverage in rare earths, finance and military pressure.

Strait of Hormuz Blockade: How China Should Respond (15 April)

This legally minded essay by Ye Yan warns against celebrating Iran’s proposed Hormuz transit fees as a breakthrough for RMB settlement. Rather than a strategic gain, paying “protection money” through CIPS would expose China to US secondary sanctions and legitimise a dangerous precedent: turning international straits into politically screened toll gates. The piece argues that Washington benefits from a low-cost “offshore attrition” strategy that burdens Asian manufacturing states while leaving the US relatively insulated. China’s answer should be legal resistance, not tactical accommodation: defend free transit passage, ring-fence CIPS, activate overland energy buffers and reserves, and build an “Asian Consumer Order Alliance” with other energy-importing states.

The “Greater-than-Expected” Impact of the Iran War on China’s Economy (13 April)

This technocratic memo by Peng Shaozong treats the US–Iran war chiefly as an imported inflation and supply-chain security shock for China. Rather than seeing the crisis as a strategic opening, it warns that disruption to Hormuz, Iranian energy and chemical exports, LNG, fertilisers, petrochemicals, shipping and insurance could transmit rapidly into Chinese manufacturing, agriculture and high-end industry. Its core prescription is defensive: China should use the certainty of domestic supply and price stability to offset external geopolitical uncertainty, through tiered oil-reserve releases, import diversification, anti-speculation controls, targeted subsidies, hedging tools, African and overland alternatives, and longer-term reserve-building and energy substitution.

Trump’s Tiger-Riding Predicament | Digest: March 2026 (6 April)

This digest surveys Chinese commentary dominated by the Iran war, often framed as Trump’s “tiger-riding predicament”: easier to begin than to end. It highlights debates over whether the conflict is a quagmire, a strategic opening for China, or a danger through oil shocks and global disruption. Coverage also spans China’s economic model, rural pensions, export resistance, consumption, Taiwan, US-China relations and AI’s social effects. Across these themes, a central question emerges: can China exploit a more turbulent world without misreading American weakness, worsening external backlash, or neglecting the domestic reforms needed to sustain growth?

When Non-Interference Is No Longer Enough: A Qualified Case for Chinese “Interventionism 2.0” (5 April)

This interview with Zheng Yongnian uses the Iran-Hormuz crisis to argue that China’s longstanding non-interference doctrine is no longer adequate for a world of expanding Chinese overseas interests and geopolitical “weaponisation”. Zheng defends non-alignment as essential to preventing bloc confrontation and world wars, but says traditional non-interference no longer fits China’s expanding overseas interests. His proposed “Interventionism 2.0” remains carefully bounded: not US-style regime change or colour revolution, but a more active posture when host states violate Chinese interests, third countries threaten them, or external forces affect China domestically. The piece is cautious and still multilateralist, yet notable because it gives a doctrinal label to a more assertive Chinese role in protecting firms, citizens and strategic interests abroad.

On today’s show Andrew and Bill begin with the news that the Meta-Manus deal will likely be unwound in its entirety in the wake of a ruling from the NDRC on Monday. Topics include: The legal grounding cited by Beijing, reports that Manus failed to seek regulatory approval prior to its relocation and acquisition, Mark Zuckerberg as the photo negative of Tim Cook, Beijing’s signal to the AI ecosystem, and why fears of chilled innovation may be slightly overstated. Then: Takeaways from April’s Politburo assessing the economy after Q1, including a nod to the Iran war, no signs of stimulus, and why cracking down on involution is easier said than done. At the end: The MSS argues that foreign forces are driving the “lying flat” campaign, while the U.S. quietly applies pressure on a variety of fronts in advance of May’s meeting between President Trump and Xi Jinping.

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Today’s top items:

1. Politburo study session on Disaster Prevention, Mitigation, and Relief - At the 20th Politburo’s 25th collective study session Tuesday, Xi Jinping told the leadership to do more on disaster prevention, mitigation, and relief, linking that work to his “high-quality development and high-level security” line. Yang Siquan of the Emergency Management Ministry’s Natural Hazards Institute gave the lecture.

Xi noted China’s size, complex geography, and varied climate make disasters a constant problem. He credited the Party since the 18th Party Congress with handling a string of major disasters and laid out seven things to adhere to: Party leadership, putting people and life first, respecting nature, prevention firs…

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1. April Politburo meeting - The Politburo held its April meeting Tuesday to “analyze the current economic situation and economic work”. There are no signs in the readout of more “stimulus”; the policy approach remains steady as she goes with some tweaks. The diagnosis of the current situation, per the readout:

China’s economy has gotten off to a strong start, with key indicators performing better than expected, demonstrating great resilience and vitality. At the same time, certain difficulties and challenges remain, and the foundation for the economy’s sustained stable and positive trajectory still needs to be further consolidated. Confidence must be strengthened, and economic work must be carried out with greater force and more concrete measures.

我国经济起步有力，主要指标好于预期，彰显强大韧性和活力。同时，也面临一些困难和挑战，经济持续稳中向好的基础还需进一步巩固。要增强信心，以更大力度和更实举措抓好经济工作。

Other highlights from the readout:

The meeting noted that it is necessary to uphold “making progress while maintaining stability” as the overall keynote of economic work; to fully, accurately, and comprehensively implement the new development philosophy; to accelerate the building of the new development pattern; to better coordinate the domestic and international overall situations; to coordinate development and security; to unswervingly deepen reform and opening-up; to advance scientific and technological self-reliance and self-strengthening and autonomous control of industrial supply chains; to implement a more proactive fiscal policy and a moderately accommodative monetary policy with precision and effectiveness; to continuously expand domestic demand and optimize supply; to grow the increment and activate the stock; to focus on stabilizing employment, stabilizing enterprises, stabilizing markets, and stabilizing expectations; to strengthen the intrinsic drivers of economic development; to further strengthen the domestic circulation; to optimize the domestic-international dual circulation; and to strive for a strong start to the 15th Five-Year Plan.

会议指出，要坚持稳中求进工作总基调，完整准确全面贯彻新发展理念，加快构建新发展格局，更好统筹国内国际两个大局，统筹发展和安全，坚定不移深化改革开放，推动科技自立自强、产业链自主可控，精准有效实施更加积极的财政政策和适度宽松的货币政策，持续扩大内需、优化供给，做优增量、盘活存量，着力稳就业、稳企业、稳市场、稳预期，增强经济发展内生动力，进一步做强国内大循环，做优国内国际双循环，努力实现”十五五”良好开局。

The meeting emphasized that the building of a modernized industrial system must be accelerated, maintaining a reasonable share for manufacturing. The building of a unified national market must be advanced in depth, with “involution-style” competition resolutely rectified. The “AI+” initiative must be fully implemented, developing new forms of the intelligent economy and improving AI governance. Reform of state-owned assets and state-owned enterprises must be further deepened. External shocks and challenges must be addressed in a systemic manner, the level of energy and resource security must be raised, and various uncertainties must be countered with the certainty of high-quality development.

会议强调，要加快建设现代化产业体系，保持制造业合理比重。纵深推进全国统一大市场建设，深入整治”内卷式”竞争。全面实施”人工智能+”行动，发展智能经济新形态，完善人工智能治理。进一步深化国资国企改革。系统应对外部冲击挑战，提高能源资源安全保障水平，以高质量发展的确定性应对各种不确定性。

The mention of the AI+ initiative with the call to “全面实施’人工智能+’行动 fully implement the AI+ initiative” is paired with developing “new forms of the intelligent economy” and improving “AI governance”. And 算力网 computing power networks is in the “six networks” infrastructure project list along with water networks, new-type power grids, next-generation communications networks, urban underground utility networks and logistics networks.

That call to “深入整治’内卷式’竞争 deepen the rectification of involution-style competition” did not appear in last year’s April readout, so should be seen as a sign of intensifying crackdowns on that problem.

“External shocks and challenges must be addressed in a systemic manner, the level of energy and resource security must be raised, and various uncertainties must be countered with the certainty of high-quality development” is clearly a reference to the disruptions from the Iran war.

The risks section mentions “resolving the problem of overdue payments to enterprises” along with the usual areas of real estate and local debt, so it must be a very significant problem now:

The meeting noted that risks in key areas must be effectively prevented and defused. Efforts must be made to stabilize the real estate market and advance urban renewal in a solid manner. Local government debt risks must be resolved in an orderly fashion, with focus on resolving the problem of overdue payments to enterprises. Reform of small and medium financial institutions must be pushed forward, and confidence in capital markets must be stabilized and enhanced.

会议指出，要有效防范化解重点领域风险。努力稳定房地产市场，扎实推进城市更新。有序化解地方政府债务风险，着力解决拖欠企业账款问题。推动中小金融机构改革，稳定和增强资本市场信心。

“Confidence in capital markets must be stabilized and enhanced” could be seen as bullish for stocks, but confidence is earned not mandated.

I have posted a full translation of the readout in the body of this section.

We should know the topic of the April Politburo study session Wednesday. Last year’s was “uphold self-reliance and self-strengthening, maintain an application-oriented approach, and promote the healthy and orderly development of artificial intelligence 坚持自立自强 突出应用导向 推动人工智能健康有序发展”, and I wrote about it in “April Politburo Study Session on AI is bad news for Nvidia”.

This section is why I said that meeting was more bad news for Nvidia in China:

Xi Jinping emphasized that to seize the initiative and gain the advantage in the AI field, breakthroughs must be achieved in fundamental theories, methods, tools, and more. We must continuously strengthen basic research, concentrate resources to overcome challenges in core technologies such as high-end chips and foundational software, and build an independent, controllable, and collaboratively functioning AI foundational hardware and software system [集中力量攻克高端芯片、基础软件等核心技术,构建自主可控、协同运行的人工智能基础软硬件系统]. We should use AI to lead a paradigm shift in scientific research and accelerate technological innovations and breakthroughs across various fields.

2. Manus mess - The Wall Street Journal reports that Meta is planning to comply with the order to undo the Manus acquisition. Maybe they are happy to get a mulligan for the hasty, overpriced acquisition of a company with little proprietary technology, or maybe they realize there is no point in fighting the order, as they would if the US government made it, given the lack of recourse available and the leverage the PRC government has over Meta. Reuters reports that:

Meta conducted only a few weeks of due diligence to complete the acquisition in December, while neither Meta nor Manus sought Chinese regulatory approval for the deal or its relocation to Singapore, said five sources with knowledge of the matter.

That is remarkable, and makes the PRC move more justifiable, and, if the government wants to make an example of the case, perhaps provides the pretext to go after not only Manus and its executives but also the VCs, lawyers and accountants involved in the deal, all of whom should have known the rules around regulatory approval.

Meta clearly overpaid, so maybe this will turn out to be a positive for the company, even as it sends a chilling message to PRC entrepreneurs and investors.

3. Hostile foreign forces encouraging lying flat - It turns out that the “lying flat” phenomenon is a plot by hostile foreign forces to weaken Chinese youth and China. That is according to the MSS, which on Tuesday posted to its WeChat account “Foreign Organizations are Heavily Funding “Lying Flat Influencers” and Systematically Conducting “Lying Flat Brainwashing” 国安部披露：某境外组织大力资助”躺平网红”，系统性开展”躺平洗脑”. I have posted a full translation here. It is nicely timed for May 4 Youth Day, and as usual, when all else fails, blame the foreigners...

Here is an excerpt from the MSS post:

Numerous cases show that anti-China hostile forces are holding the “lying flat” banner aloft and “working hard” to corrode the thinking of Chinese youth. State security agencies have found in their work that one foreign organization has funded various anti-China media outlets and think tanks to manufacture narratives such as “striving = being exploited” and “class solidification = effort is useless”; another foreign organization has heavily funded “lying flat influencers” to mass-produce short videos pushing themes like “lying flat is justice” and “anti-involution = anti-exploitation,” systematically carrying out “lying flat brainwashing.”

诸多案例显示，反华敌对势力高举”躺平”旗帜，正”努力”地侵蚀中国青年的思想。国家安全机关工作发现，某境外组织资助各类反华媒体、智库，炮制”奋斗=被剥削”“阶层固化=努力无用”等叙事；某境外组织大力资助”躺平网红”，批量生产”躺平即正义”“反内卷=反剥削”短视频，系统性开展”躺平洗脑”。

What makes this all the more ironic is that while inciting us to “lie flat,” they themselves are working off their feet. In recent years, the countries in question have rolled out a series of economic bills, revitalization projects, and talent programs, even poaching global talent at high salaries. Clearly, they have never accepted “lying flat” themselves; they only want our youth to lie flat, so that they can hand over our development dividends, our strategic opportunities, and the future of our nation on a platter...

更讽刺的是，在煽动我们”躺平”时，他们自己正忙得脚不沾地。近年来，有关国家推出系列经济法案、振兴工程、人才计划等，甚至高薪挖角全球人才。可以看出他们从来不认同”躺平”，他们只希望我们的青年”躺平”，将我们的发展红利、战略机遇、民族未来拱手相让。

Good luck to policymakers if they believe foreigners are really the cause of “lying flat”, but perhaps this post is a harbinger of a coming patriotic campaign against the phenomenon?

Here is an MSS officer reading the post, with a stirring soundtrack:

4. US actions ahead of Xi-Trump meeting - According to Reuters, the US ordered multiple chip equipment companies to halt some shipments to China’s No. 2 chipmaker Hua Hong. It is not clear how effective that order will be if the letters sent to the chip equipment companies did not specify that their foreign subsidiaries are also subject to this order, but regardless, PRC officials may see it as a violation of the Busan “understanding”. The move seems risky so close to the summit, especially if it is empty if it does not include the foreign subsidiaries, but perhaps the Trump team is now more concerned about PRC progress in developing their own, good enough AI chips?

The US Treasury Department warned “financial institutions to the sanctions risks associated with independent “teapot” oil refineries in China, primarily in Shandong Province, given their continued role in importing and refining Iranian crude oil”. Whatever “stability” there is in the US-China relationship right now is very tenuous.

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Today’s top items:

1. State Council Executive meeting - Li Qiang chaired a State Council Executive meeting Friday. According to the readout the meeting “studied work related to sci-tech innovation, heard a briefing on promoting the high-quality development of the marine economy, and reviewed and adopted the Regulations on Procedures for Formulating Administrative Regulations (Revised Draft)”.

On sci-tech innovation the readout said:

The meeting noted that in recent years China’s sci-tech strength has continued to grow, tackling of key and core technologies has accelerated, achievements in sci-tech innovation have continually emerge…

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1. Evaluation and Assessment Measures for Carbon Peaking and Carbon Neutrality - On Thursday the government publicly released the “Comprehensive Evaluation and Assessment Measures for Carbon Peaking and Carbon Neutrality 碳达峰碳中和综合评价考核办法”, approved by the Politburo Standing Committee on February 26, 2026 and issued by the General Offices of the CCP Central Committee and the State Council on April 12. The Measures institutionalize an annual cadre-evaluation regime that grades every provincial Party committee and government on their climate performance, beginning with the 2026 reporting year. I have posted a full translation here.

The Measures instruct the NDRC to draft the 15th Five-Year Plan Carbon Peaking Action Plan to meet 2030 targets: cutting emissions intensity by more than 65% from 2005, raising non-fossil energy to 25% of consumption, peaking both coal and oil use, and progressively covering new electricity demand with clean generation.

This document is important as it provides political accountability and incentives and enforcement powers for the pledges of peaking emissions before 2030 and reaching carbon neutrality before 2060. Local officials have long been measured primarily on GDP growth, and “dual-high” (energy- and emissions-intensive) projects have repeatedly been waved through despite central-level guidance against them. Climate performance is now a formal input into cadre evaluation, promotion, and discipline, with the Central Organization Department coordinating the process.

In a Xinhua Q&A published April 23, 2026, a senior NDRC official explains the Measures. The official frames them as a keystone of China’s dual carbon-control system that formally embeds emissions control into the Party’s internal regulatory apparatus so that provincial leaders are unambiguously responsible for delivering the “dual carbon” targets.

The official confirms that the 15th Five-Year Plan period (2026–2030) is the “decisive window” for peaking, and that the assessment system is built around binding 2030 outcomes: peaking coal and oil consumption, cutting carbon intensity more than 65% below 2005 levels, and raising non-fossil energy to 25% of total consumption. To reach them, the Measures deploy a “5+9” indicator architecture—five decisive control indicators (total emissions, intensity, coal, oil, non-fossil share) plus nine supporting indicators covering energy efficiency, industry, buildings, transport, public institutions, and the carbon market. I have posted a full translation of the Q&A here.

2. Crackdown on scam centers in Cambodia - Wang Yi has been in Cambodia for the China-Cambodia foreign ministers’ and defense ministers’ “2+2” strategic dialogue. The scam centers have been a focus of discussion based on the readouts. In his briefing to the media after the meetings, Wang listed six points of agreement, including:

Fourth, the two sides agreed to strengthen law-enforcement cooperation, with the emphasis on resolutely and thoroughly cracking down on online gambling and telecom fraud, protecting the lives and property of the people, and creating a favorable external environment for China-Cambodia cooperation.

They also agreed on strengthening political- security cooperation:

Third, the two sides agreed to strengthen political-security cooperation, with the emphasis on safeguarding the security of their respective governing authorities and political systems, jointly resisting external infiltration, and guarding against “color revolutions.”

I have posted translations of all six in the full section below.

According to the readout of his meeting with Hun Sen, Hun Sen said:

Online gambling and telecom fraud endanger the lives and property of people in all countries as well as Cambodia’s national image; the Cambodian side is determined to combat these crimes to the end and is willing to continue close cooperation with China.

It is probably a coincidence, but the US today announced that “two Chinese nationals have been charged for allegedly managing a cryptocurrency investment fraud compound in Burma, then later in Cambodia, where they trafficked thousands of people”. The sooner this scam scourge can be eradicated the better, and China does appear to have finally decided enough is enough. How it persisted for so long on the PRC’s border, while victimizing so many PRC citizens, may remain a mystery.

3. Finland to block any EU-China trade deal? - Finland’s Foreign Minister Elina Valtonen told Finbarr Bermingham of the South China Morning Post that “Beijing’s close ties with Moscow will block progress towards any EU-China trade deal.”

4. US government takes on “Adversarial Distillation of American AI Models” - Several weeks after Google, OpenAI and Anthropic issued statements about PRC AI developers using “distillation attacks” to piggyback on those three firms’ hundreds of billions of dollars of investments to improve their own models, the White House has now weighed in with a memo titled Adversarial Distillation of American AI Models:

the United States government has information indicating that foreign entities, principally based in China, are engaged in deliberate, industrial-scale campaigns to distill U.S. frontier AI systems. Leveraging tens of thousands of proxy accounts to evade detection and using jailbreaking techniques to expose proprietary information, these coordinated campaigns systematically extract capabilities from American AI models, exploiting American expertise and innovation.

Models developed from surreptitious, unauthorized distillation campaigns like this do not replicate the full performance of the original. They do, however, enable foreign actors to release products that appear to perform comparably on select benchmarks at a fraction of the cost. These distillation campaigns also allow those actors to deliberately strip security protocols from the resulting models and undo mechanisms that ensure those AI models are ideologically neutral and truth-seeking.

The memo goes on to say that the Trump Administration will “explore a range of measures to hold foreign actors accountable for industrial-scale distillation campaigns.”

What might “a range of measures to hold foreign actors accountable” include? Attempts to hijack their distillation efforts and try to poison their models? Entity listing or other sanctions on the accused? Blocking access by the accused to advanced US chips anywhere in the world, including in overseas data centers?

5. US as a “predatory hegemon” - The April 23 People’s Daily carries a scathing commentary by “Zhong Sheng” titled Sliding Toward “Predatory Hegemony,” the United States Is “Walking Into the Future Backwards” (Zhong Sheng)滑向”掠夺性霸权”，美国正”以倒退的方式步入未来”（钟声). I have posted a full translation here. It cites the work of Harvard’s Stephen Walt about the concept of “predatory hegemony”:

U.S. conduct has laid “predatory hegemony” bare for all to see. From wantonly withdrawing from international organizations and shirking international responsibilities, to invoking international rules when convenient and discarding them when not; from attempting to extort the world economically through tariff wars and trade wars, to now using or threatening military force against sovereign states without scruple, seizing resources and demanding territory — all of this clearly confirms that the United States is accelerating its degeneration toward “might makes right.”..

美国的所作所为已将”掠夺性霸权”暴露无遗。从肆意”退群”、抛弃国际责任，到对国际规则”合则用、不合则弃”；从试图通过关税战、贸易战对全球搞经济勒索，到如今动辄对主权国家使用或威胁使用武力，全无顾忌地抢资源、索领土……所有这些都清晰印证，美国正在向”以强权凌驾一切”加速退化。

For the United States to slide toward “predatory hegemony” is, in effect, to choose to “walk into the future backwards.” From “builder” of international rules to “saboteur”; from “promoter” of global cooperation to “extractor”; from “trustee” of allies and partners to “extortionist” — this chain of regressions is, at its core, a self-imposed exile driven by hegemonic anxiety. Walt offers a biting yet clear-eyed verdict: in the short term, “predatory hegemony” may extract some “gains,” but in the long run, the United States will become poorer, less secure, and progressively less influential.

美国滑向”掠夺性霸权”，无异于选择”以倒退的方式步入未来”。从国际规则的”建设者”退化为”拆台者”，从全球合作的”推动者”退化为”榨取者”，从盟友伙伴的”信任者”退化为”勒索者”——这一连串的倒退，本质上是美国在霸权焦虑驱动下的自我放逐。沃尔特给出一个辛辣而清醒的判断：短期内，”掠夺性霸权”或许能榨取一些”收益”，但从长远看，美国会变得更贫穷、更不安全，逐渐丧失影响力。

6. PLA Navy’s 77th birthday - April 23 is the 77th anniversary of the founding of the PLA Navy. A Xinhua commentary wrote that “in a turbulent world marked by intensifying geopolitical conflicts, the Chinese navy has consistently promoted peace, cooperation and friendship…The Chinese navy will continue to actively shoulder its international responsibilities, safeguard the security of international waterways, and provide more public goods for maritime security.”

So they will be sending ships to help open the Strait of Hormuz?

The PLAN released a video titled “Into the Deep 向大洋“ to celebrate the anniversary. You can watch here on YouTube, with English subtitles:

The appearance of a young cadet named “He Jian”, after the appearance of three others whose names sound like the names of the three current aircraft carriers, has led to speculation that he symbolizes the next carrier, which will be nuclear-powered.

Earlier today I published this week’s episode of Sharp China - Xi Wants the Strait of Hormuz Reopened; Cakes and An E-Commerce Crackdown; The Next Stage of Decoupling; The MATCH Act in Congress. From the show notes:

On today's show Andrew and Bill return to discuss the PRC's posture amidst the ongoing war in Iran. Topics include: Xi's call to re-open the Strait of Hormuz, an interdicted Iranian ship that may have been carrying missile precursors from China, Trump's posture toward China three weeks before his summit in Beijing, March export numbers, and deals between the US and Indonesia and the US and the Philippines. Then: The SAMR fines several e-commerce giants over food safety concerns in the "ghost delivery" sector, plus thoughts on the ongoing struggle to combat involution. From there: New regulations in Beijing to crack down on foreign companies attempting to diversify supply chains, the USTR's Jamieson Greer comments on US partners and a new rare earth strategy, and notes on tensions between the PRC and Japan. At the end: The MATCH Act in Congress and the continued scrutiny over semiconductor manufacturing equipment, an updated timeline for DeepSeek's new model, and a Mandelson mess continues to unspool in the U.K.

You can listen to it here.

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On today's show Andrew and Bill return to discuss the PRC's posture amidst the ongoing war in Iran. Topics include: Xi's call to re-open the Strait of Hormuz, an interdicted Iranian ship that may have been carrying missile precursors from China, Trump's posture toward China three weeks before his summit in Beijing, March export numbers, and deals between the US and Indonesia and the US and the Philippines. Then: The SAMR fines several e-commerce giants over food safety concerns in the "ghost delivery" sector, plus thoughts on the ongoing struggle to combat involution. From there: New regulations in Beijing to crack down on foreign companies attempting to diversify supply chains, the USTR's Jamieson Greer comments on US partners and a new rare earth strategy, and notes on tensions between the PRC and Japan. At the end: The MATCH Act in Congress and the continued scrutiny over semiconductor manufacturing equipment, an updated timeline for DeepSeek's new model, and a Mandelso…

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1. Energy Conservation and Carbon Reduction Work at a Higher Level and Higher Quality - On Wednesday, Earth Day, the General Offices of the CCP Central Committee and State Council released a new energy conservation and carbon reduction guideline. I have posted a full translation of “Opinions of the General Office of the CPC Central Committee and the General Office of the State Council on Doing Energy Conservation and Carbon Reduction Work at a Higher Level and Higher Quality 中共中央办公厅 国务院办公厅关于更高水平更高质量做好节能降碳工作的意见” here.

This document should “provide strong guarantees for achieving carbon peaking and carbon neutrality and accelerating the comprehensive green transformation of economic and social development.”

A responsible official of the National Development and Reform Commission (NDRC) laid out the five key tasks in an interview with Xinhua, translated in full here:

First, coordinated advancement of energy conservation and carbon reduction alongside the green transition.…

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1. More foreign visitors meet Xi - On Tuesday Xi met with President Daniel Chapo of Mozambique and Saleumxay Kommasith, special envoy of General Secretary of the Lao People’s Revolutionary Party (LPRP) Central Committee and President of Laos Thongloun Sisoulith.

According to the PRC readout of his meeting with Chapo, Xi said:

The conflicts in the Middle East are spilling over into African countries. China is ready to work with Africa to navigate these challenging times, and jointly promote peace and seek common development. 中东战事影响外溢波及非洲国家，中方愿同非方携手应对，共促和平、共谋发展

They also agreed to “elevate the bilateral relationship to the level of China-Mozambique community with a shared future in the new era”.

2. Iran war - In a long interview with CNBC Tuesday morning, President Trump addressed the US seizure of the M/V Touska, a cargo ship on its way from China to Iran, when he said “We caught a ship yesterday that had some things on it, which wasn’t very nice. A gift from China perhap…

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