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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1. Xi wants Strait of Hormuz opened - In a call Monday with the Saudi Crown Prince, Xi, according to the PRC readout said:

China calls for an immediate and comprehensive ceasefire, supports all efforts conducive to restoring peace, and stands for resolving disputes through political and diplomatic means. The Strait of Hormuz should maintain normal passage, as this serves the common interests of regional countries and the international community. China supports regional countries in building a common home of good-neighborliness, development, security and cooperation, holding their future in their own hands, and promoting lasting peace and security in the region.

According to that same readout, MBS told Xi:

China is a responsible major country that consistently upholds a just position and supports Middle Eastern countries in pursuing good-neighborliness, dialogue and cooperation. Saudi Arabia is ready to strengthen communication and coordination with China to maintain the…

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Today’s top items:

1. Iran War - Wang Yi met with Italian Deputy Prime Minister and Foreign Minister Antonio Tajani in Beijing. According to the Xinhua readout Wang said:

The war waged by the United States and Israel against Iran should never have happened; the prolonged conflict has already had a serious impact on international energy security and the security of navigation through the Strait of Hormuz. The most pressing task is to push the United States and Iran back to negotiations in pursuit of a political resolution. China has always maintained an objective and impartial position, has been actively committed to promoting peace and ending the fighting, supports Pakistan’s active mediation efforts, and is willing to maintain communication …

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1. Xi meets Vietnam’s To Lam - Xi spent a lot of time with Vietnam’s General Secretary. To lam also met with Li Qiang and Zhao Leji. Cai Qi, Wang Yi, Yin Li, and Wang Xiaohong attended the Xi-To Lam meetings. So much for the rumors some are pushing that Wang Xiaohong is in trouble…

Xi said “defending the socialist system and the ruling status of the Communist Party is the greatest shared strategic interest of the Chinese and Vietnamese parties” and explicitly told To Lam that both sides must “reform without changing direction and transform without changing color”. Xi also called on both sides to jointly oppose unilateralism and protectionism and maintain stable supply chains — a clear reference to the trade war with the US and its efforts to enlist Vietnam.

Xi also said:

Both sides should work together and jointly travel the path of modernization. They should accelerate the alignment of development strategies and prioritize advancing infrastructure connectivity. They sh…

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1. Xi’s four point proposal on safeguarding and promoting peace and stability in the Middle East - Xi met with the Crown Prince of Abu Dhabi of the United Arab Emirates. According to the readout he offered the following four point proposal:

Xi Jinping set out four propositions for safeguarding and promoting peace and stability in the Middle East.

First, uphold the principle of peaceful coexistence. The countries of the Middle East and the Gulf are as closely linked as lips and teeth — they are neighbors who cannot be moved. Support should be given to Middle Eastern and Gulf states in improving their relations, with efforts made to advance the building of a common, comprehensive, cooperative, and sustainable security architecture for the region, laying a solid foundation for peaceful coexistence.

Second, uphold the principle of national sovereignty. Sovereignty is the bedrock on which all countries — especially developing countries — stand, and it must not be violated. The sovereignty, security, and territorial integrity of Middle Eastern and Gulf states must be genuinely respected, and the safety of their personnel, facilities, and institutions must be genuinely protected.

Third, uphold the principle of international rule of law. The authority of international law must be upheld — it cannot be invoked when convenient and discarded when not. The world must not be allowed to revert to the law of the jungle. The international system with the United Nations at its core, the international order based on international law, and the fundamental norms of international relations based on the purposes and principles of the UN Charter must be firmly defended.

Fourth, uphold the principle of balancing development and security. Security is the precondition for development, and development is the guarantee of security. All parties should work to create a favorable environment for the development of Middle Eastern and Gulf states and inject positive energy into the region. China is willing to share the opportunities of Chinese modernization with Middle Eastern and Gulf countries, and to cultivate deeper soil for regional development and security.

习近平就维护和促进中东和平稳定提出4点主张：一是坚持和平共处原则。中东海湾国家唇齿相依，是搬不走的邻居。要支持中东海湾国家改善关系，推动构建共同、综合、合作、可持续的中东和海湾地区安全架构，筑牢和平共处的根基。二是坚持国家主权原则。主权是各国特别是广大发展中国家安身立命的依托，不容侵犯。中东海湾国家主权、安全和领土完整应当得到切实尊重，各国人员、设施、机构安全应当得到切实维护。三是坚持国际法治原则。维护国际法治权威，不能”合则用、不合则弃”，不能让世界倒回丛林法则。要坚定维护以联合国为核心的国际体系、以国际法为基础的国际秩序、以联合国宪章宗旨和原则为基础的国际关系基本准则。四是坚持统筹发展和安全。安全是发展的前提，发展是安全的保障。各方都应该为中东海湾国家发展营造良好环境、注入正能量。中方愿同中东海湾国家分享中国式现代化机遇，厚植地区发展和安全土壤。

Perhaps there is more substance and diplomatic effort behind it?

2. Spanish PM meets Xi - Spain’s Prime Minister Sanchez met Xi Tuesday. He also met separately with Premier Li and Zhao Leji. Sanchez may now be China’s best friend in the EU. According to the readout of their meeting, Xi said:

despite a turbulent and complex international situation, China-Spain relations have developed steadily, producing a relationship characterized by strategic resolve. An important lesson has been making correct decisions grounded in shared interests. Practice has shown that deepening cooperation serves the interests of both peoples, aligns with the broader trends of the era, and has strengthened each side’s capacity and confidence to pursue an independent path. The two sides should always place the development of China-Spain relations as a priority in their respective foreign policies and support each other in defending national sovereignty and territorial integrity…

today’s world is rife with disorder, marked by a contest between justice and power [当今世界乱象丛生，面临公理和强权的较量]. How a country treats international law and the international order reflects its worldview, its conception of order, its values, and its sense of responsibility. China and Spain are both principled and morally grounded nations. They should strengthen communication, consolidate mutual trust, and cooperate closely to oppose a world reverting to the law of the jungle, jointly uphold genuine multilateralism, safeguard the international system with the United Nations at its core and an international order based on international law, and advance equal and orderly multipolarity in the world, inclusive and universally beneficial economic globalization, and the building of a community with a shared future for humanity.

Sanchez comments, according to the readout, hit all the right notes for the PRC side:

Spain firmly adheres to the One China principle, attaches great importance to China’s status as a major power, and is firmly committed to building a strategic and stable Spain-China partnership. Spain hopes to strengthen cooperation in trade, investment, new energy, and other fields and promote people-to-people exchanges. Facing a complex and grave international situation and frequent conflicts and disputes, only by upholding multilateralism and advancing a multipolar world can lasting peace be brought to humanity. Spain actively supports the four global initiatives proposed by President Xi Jinping and is willing to maintain close communication and coordination with China to jointly address challenges in international geopolitics, trade protectionism, and climate change, and to uphold international law and multilateralism. Spain opposes a “new Cold War” and “decoupling and supply chain disruption,” and supports deeper communication, understanding, and cooperation between Europe and China. Healthy development of EU-China relations serves the shared interests of both sides and is also conducive to world peace and stability.

3. Vietnam’s leader in China - Vietnam’s General Secretary and President To Lam is in Beijing. He met with Wang Huning Tuesday and gave a speech at Tsinghua. He will meet with Xi Wednesday.

4. US-China - The Foreign Ministry spokesperson on Tuesday promised “resolute countermeasures” if the Trump Administration added new tariffs on China for “military product exports”. It is not clear if the recent US media reports about the PRC considering sending or having already sent weapons systems to Iran are correct, but if they are then Trump has put himself in a bind. Either he follows through with the tariff threat and likely blows up the Busan understanding and the upcoming summit, or he looks like a paper tiger. Meanwhile, Reuters reports Treasury Secretary “Bessent said on Tuesday ​that China had been an ‌unreliable global partner during the Middle East war by hoarding oil ​supplies and limiting exports of ​certain goods, much as they ⁠hoarded medical supplies during the ​pandemic”, and sanctions may be coming for banks, including PRC ones:

5. EU Chamber of Commerce report on export controls - The EU Chamber of Commerce in China is out with a new report titled Exporting Control: China’s New Strategic Toolkit. It is a sobering read on the ways the PRC has built out a sophisticated and increasingly effective export control regime, and it was written before yesterday’s announcement of the Regulations of the People’s Republic of China on Countering Foreign Improper Extraterritorial Jurisdiction中华人民共和国反外国不当域外管辖条例.

One of the key goals of “dual circulation” it is worth remembering is to more tightly bind foreign companies to PRC supply chains, and the rules announced yesterday make it even harder for foreign firms to move their supply chains out of China. No one should be surprised…

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The term is loaded politically, as the China Media Project explained in 2021:

The term “people’s leader” (人民领袖) is a rare title of praise in China’s political discourse, reminiscent of the personality cult that prevailed during the Mao Zedong era. The term was used for a wider range of leaders through the 1940s, including “people’s leader Mao Zedong” (人民领袖毛泽东), “Soviet people’s leader Stalin” (苏联人民领袖斯大林) and “Vietnamese people’s leader Ho Chi Minh” (越南人民领袖胡志明). But after 1949 the phrase came to be used increasingly for Mao alone. In the reform era after 1978, “people’s leader” was used only as a historical reference to Mao Zedong.

I am not sure what this recent increase in usage means, but it is worth tracking, especially as political maneuvering is intensifying into the 2027 21st Party Congress. There is little doubt Xi will get a fourth term as General Secretary next year if he wants it, so if there is a renewed propaganda campaign around this term, what might be the reason?

Method

The figures come from PropagandaScope, which indexes body-text and headline counts across the provincial Party dailies and the central papers. I pulled monthly counts from January 2021 through early April 2026. People’s Daily coverage in the database begins in December 2024 — the paper has scrubbed earlier content from its online archive — but that window is enough to capture the central-tier signal. Provincial counts are the broader, more stable series and the one most useful for detecting a coordinated campaign.

What the data show:

1. The 2023 peak and the cooling. The term peaked at 91 provincial mentions in March 2023, the month of the Two Sessions and the opening of Xi’s third term. It had also run hot in October 2022 (50) around the 20th Party Congress, and in January 2023 (52). After March 2023 it was visibly dialed down. From mid-2023 through most of 2025 the monthly provincial total sat in the single digits to low teens, with brief spikes in September 2023, February–March 2024, and September 2025. None of those approached the 2022–23 campaign level.

2. A clean restart in January 2026. The three-month sequence 37 → 61 → 89 is not a noisy blip. People’s Daily participates for the first time in the observable record, going from roughly one mention per month to 4, 3, and 5. March 2026 nearly matches the March 2023 peak. The curve in the central and provincial series moves in the same direction at the same time, which may indicate a top-down signal.

3. Broad and shallow, not concentrated. Roughly 23 different provincial papers used the term in March 2026, each 2–5 times.

4. Frontier and minority-region papers leading. Xinjiang Daily, Tibet Daily, and Guizhou Daily sit at the top of the provincial league table for March, with the wealthier coastal dailies (Nanfang, Zhejiang, Hainan) trailing. This is consistent with a pattern I keep seeing in the PropagandaScope data: ethnic-minority and frontier provincial papers amplify top-leader language more aggressively and on a shorter fuse than the coastal papers.

5. It is still a body-text phenomenon. Across the 62 months from January 2021 through February 2026, 人民领袖 has appeared in a provincial Party headline exactly twice. Even in the 2022–23 saturation, the term mostly stayed out of titles. Headline placement is a separate, harder editorial threshold — it represents a decision to prioritize the keyword, not just acknowledge it.

人民领袖 is one of a small set of honorifics the system has used to sanctify Xi personally. The cooling after March 2023 was real: the central propaganda apparatus appears to have decided the saturation of the previous two years had served its purpose, or had risked overshooting. Bringing the term back now may indicate someone has decided the conditions for a new campaign are in place.

Data: PropagandaScope, 27 provincial Party papers plus People’s Daily. Body-text and headline counts pulled April 14, 2026. March 2026 provincial total (~89) is a near-complete count through early April and may tick up as late postings are indexed.

Today’s top items:

1. Iran war - China is obviously not happy with the US blockade of ships leaving Iranian ports and transiting the Strait of Hormuz. It is not clear what they can do to stop the US, and, a prolonged blockade of these ships, a fair number of which are destined for China, would add even more stress on the PRC economy.

The Crown Prince of Abu Dhabi, United Arab Emirates (UAE) is in Beijing for a visit, but the readout of his meeting with Premier Li gives no indication of what they really discussed about the war. Wang Yi met with his UAE counterpart who accompanied the Crown Prince, according to that Xinhua readout, Wang said:

China fully understands the reasonable security concerns of the Gulf Arab states and supports the UAE in safeguarding its national so…

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On today's show Andrew and Bill begin with the tentative ceasefire in Iran and reports that the PRC applied pressure to the Iranians to defuse the tensions. Topics include: The lack of clarity on what the PRC actually did and why, China's vote at the UN this week, why the PRC would like the war to end sooner rather than later, and relationships with other Gulf countries that may or may not change because of the war. From there: Ma Xingrui's disappearance from public view is met with official confirmation of an investigation, Anthropic's Mythos model clarifies the stakes of the AI race, DeepSeek news, a token crunch in China, and scenes from Victor Wembanyama's visit to the Shaolin Temple last summer.

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1. Iran war - There appears to be a ceasefire in the war, though already there have been violations. According to President Trump. China played a role in convincing Iran to agree to the cease fire, though so far official channels in China have given no details of what exactly China may have done to push Iran towards the agreement. Trump also posted that that “A Country supplying Military Weapons to Iran will be immediately tariffed, on any and all goods sold to the United States of America, 50%, effective immediately”, which will be awkward for US-China relations, and his visit to China next month, if he really follows through.

2. All-PLA Senior Cadre Training Course - Now we know why there was that very long piece on the PLA in the PLA daily and People’s Daily, translated here. A senior military cadre training course opened today at National Defense University and Xi Jinping delivered an important speech calling for ideological rectification and political rectificat…

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1. China and Russia veto UN resolution on opening Strait of Hormuz - China and Russia vetoed a watered-down United Nations Security Council resolution put forward by Bahrain to encourage countries to work together to reopen the Strait of Hormuz. PRC ambassador to the UN explained why they vetoed the resolution, citing in part President Trump’s post early today:

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The war in Iran predictably dominates commentary in March.

We covered initial reactions to the US-Israeli strikes in our briefing earlier last month, where we noted that assessments of China’s risk-opportunity balance hinged largely on Trump’s ability to turn action into success. We also featured a censored piece from the Intellisia Institute that pushed this logic further, arguing that a prolonged Middle East war could become a major strategic opportunity for China.

More than a month on, early scepticism about US regime-change prospects in Iran has hardened into a feeling somewhere between consternation and schadenfreude, with most analysts now framing the situation as a quagmire. The dominant motif is Trump’s “tiger-riding predicament” [骑虎难下]—meaning that it is easier to climb on a tiger than to dismount and easier to start a war than to end one.

Which makes it refreshing to read CFAU professor Shi Zhan and former Brookings “returnee scholar” Li Cheng urging caution on US failure narratives and dismissing comparisons to the post-9/11 strategic distraction from China. On the more familiar hawkish side we have Wang Jiangyu, who calls this “the last war America can launch with any semblance of dignity”.

Meanwhile, Di Dongsheng argues that high energy prices are a net gain for China—a case he was apparently unable or unwilling to make on his WeChat blog on the same theme a few days earlier, which promised but conspicuously withheld the argument. The economic counter-case comes from Morgan Stanley Chief China Economist Xing Ziqiang, who warns that markets are underpricing the oil shock. His surprisingly stark warning is that $130 oil over a single quarter could drag China’s GDP growth to 3% or below.

Coverage of the Chinese economy is also weightier than usual, driven by the Two Sessions and the new Five-Year Plan. Direct FYP coverage was expectedly boilerplate, but the rural pension question (the FYP’s token increase was arguably the biggest social policy disappointment of the Two Sessions) prompted a more pointed debate. Against the many calls among Chinese economists for significant pension increases, Lü Dewen mounts an eight-point rebuttal, concluding that cash is not what the elderly actually need—and that pension transfers risk producing a “crowding-out effect” [挤出效应] on children’s sense of filial obligation.

Elsewhere, Zhou Tianyong puts a damning number on China’s reform deficit, forecasting an average growth of just 2.4% through 2035 unless institutional change occurs. Jia Qingguo and Wang Yiming both flag what Beijing is reluctant to concede—that the export model is generating resistance it cannot indefinitely absorb. Meanwhile, consumption-driven growth is challenged on three fronts: Zhu Tian argues that low consumption was a key driver of four decades of growth rather than a pathology; Yu Yongding rejects the existence of a coherent “consumption-driven growth” [消费驱动] category; and Lu Di and colleagues dismantle the “flawed arguments” for a consumption pivot. Among others, Wang Xiaolu takes a more consumption-friendly stance, arguing that government expenditure is devoted to investment and bureaucracy at the expense of a “livelihood-oriented fiscal policy”.

Beyond Iran and the economy, several pieces extend these discussions into broader questions of strategy. Wu Xinbo portrays a Beijing that increasingly regards tariffs as a secondary issue and appears prepared to retaliate against US interests in third countries. Zheng Yongnian, in turn, calls for an “Interventionism 2.0”, arguing that the PRC’s traditional non-interference doctrine no longer matches the scale of its global interests. And on Taiwan, Wei Leijie captures the bluntness with which some mainland voices now reject the case for continued delay in “cross-Strait reunification”.

— Jacob Mardell

1. Iran War:

   1. Shi Zhan on why it is too hasty to predict US defeat in Iran without first analysing Washington’s war aims.

   2. Li Cheng on why an Iran quagmire is unlikely to soften Washington’s China policy, and on China’s “many paradoxes and policy choices” over Iran.

   3. Wang Jiangyu on allies having now established a precedent of not following America, making this the last war America can launch with any semblance of dignity.

   4. Di Dongsheng on China profiting from war, as high oil prices improve the relative competitiveness of Chinese manufacturing while stretching Washington and its allies.

   5. Xing Ziqiang on markets severely underpricing the risk of a prolonged oil shock, with oil at US$130 for a quarter potentially dragging China’s growth to around 3% or lower.

   6. Li Fuquan on why the US-Israeli strikes make Iran’s abandonment of its nuclear programme a near-impossibility.

   7. Wu Hailong on why the US-Israeli strike is part of Washington’s broader strategic competition with China and Russia, requiring a coordinated Sino-Russian response.

2. Global Order & US–China Relations:

   1. Zheng Yongnian on China urgently needing an “Interventionism 2.0”—a revised doctrine permitting proactive intervention when overseas interests are threatened.

   2. Jia Qingguo on how China should adjust its model for overseas investment to reduce frictions in the host country.

   3. Zhang Yongle on the viral “kill line” discussion marking a shift in China’s cognitive positioning from “looking up” to “partially looking down” at the US.

   4. Zhao Dingqi on the current far-right wave marking a new “Polanyian moment” in which the United States is already operating a form of “anticipatory fascism”.

   5. Xia Liping on Trump’s revival of the G2 concept as an opening for greater Sino-American coordination on a more equal basis.

   6. Wu Xinbo on Beijing’s growing concern over US interference in its overseas economic interests and the broader agenda it wants to press beyond tariffs.

3. Taiwan:

   1. Chen Xiancai and Su Weibin on the mainland having established “overwhelming advantages” in sovereignty, governance and legitimacy, while identity remains the “deepest and most difficult obstacle”.

   2. Wei Leijie on the urgency of achieving “Taiwan’s recovery” at the earliest opportunity, and on why common arguments for strategic patience are fallacies.

4. Chinese Economy:

   1. Wang Xiaolu i) on government expenditure being devoted to investment and bureaucracy at the expense of a “livelihood-oriented fiscal policy”; and ii) on official income-distribution statistics understating the true extent of state economic control.

   2. Wang Yiming on China’s 30% share of global manufacturing meaning further export expansion risks provoking trade restrictions.

   3. Zhou Tianyong on China’s economy growing at only 2.48% in 2026–2030 without institutional reform—well below the 5% needed to meet the 2035 modernisation target.

   4. Tang Dajie on why significant increases to rural pensions are a necessity from the perspective of both economic stimulus and societal fairness.

   5. Lü Dewen on why increasing rural pensions is ill-suited to short-term stimulus, whereas the real problem for the very elderly is care rather than cash.

   6. Lu Di, Yu Shiwen and Gao Ling on why the case for consumption-driven growth rests on three flawed arguments.

   7. Yu Yongding on “consumption-driven growth” as a macroeconomic red herring, and why China should not treat the 3% deficit ceiling as binding.

   8. Zhu Tian on why China’s low consumption rate was a driver of high-speed growth rather than a structural problem.

5. Artificial Intelligence:

   1. Liang Jianzhang and Wang Ciqiao on AI as a fertility depressant operating through three channels, including competition for reproduction from low-cost entertainment.

   2. Zhuo Xian on AI producing three simultaneous decouplings that collectively undermine the three pillars on which social insurance was built.

   3. Yao Yang on AI as a massive bubble whose collapse may be triggered by a Chinese photonic or optoelectronic chip breakthrough.

1. Iran War

Shi Zhan (施展): It is premature to predict that the US will lose the war without first analysing its objectives. If Washington’s aim is regime change, it is unlikely to succeed without ground forces; if its aim is only to destroy Iran’s nuclear capability and ability to project influence externally, that objective can probably still be achieved. The claim that a Gulf shock would collapse US AI financing, let alone US financial hegemony, is overstated: petrodollars account for less than 10% of AI financing, and the real transmission mechanism runs through higher oil prices, stickier inflation, tighter financing conditions, and rising electricity costs. Those pressures could still hurt the US economy, but they remain a long way from the disintegration of America’s financial hegemony. — Professor; Director, Research Centre on World Politics, China Foreign Affairs University (施展世界, 4 March)

Li Cheng (李成): The idea that the US being bogged down in Iran may cause it to soften its stance on China does not hold up—this is not the post-9/11 moment, when Bush recognised that the PRC was not the primary adversary. The Iran war itself is not in Beijing’s interests, but China also cannot accept Iran falling under US control or becoming pro-American. China faces “many paradoxes and policy choices” [很多悖论与政策选择] over Iran, and the impact of the war on US–China relations depends above all on the degree and direction of the conflict’s development. — Founding Director, Centre on Contemporary China and the World, University of Hong Kong (CCCW, 26 March)

Wang Jiangyu (王江雨): The refusal of US allies to follow Washington’s lead in the Strait of Hormuz sets a precedent that will make it much harder for America to rally allies in future wars—this may be the last war Washington can launch with any semblance of dignity. Trump is “riding a tiger and unable to get off” [骑虎难下]: he underestimated Iran’s resilience, but Iranian surrender is impossible without a large-scale ground invasion that he does not dare launch. The most likely outcomes are either a US declaration of victory followed by withdrawal, or a drawn-out low-intensity war. China’s tolerance for the damage the war inflicts on the world economy is the strongest, and China’s strategic environment may grow increasingly favourable as distrust of America deepens—including from Russia. — Professor, School of Law; Director, Centre for Chinese and Comparative Law, City University of Hong Kong (IPP Review, 18 March)

Di Dongsheng (翟东升): With the two Cold War superpowers now bogged down in quagmire conflicts, China is following the script the United States played in the early stages of World War One to profit from the war. Among the world’s major net energy importers, China ranks ahead of the United States in energy autonomy, meaning that higher oil prices improve the competitive position of Chinese manufacturing relative to more oil-dependent rivals. High oil prices also transfer wealth from energy-importing core economies towards peripheral ones, boosting purchasing power in Africa and the Middle East precisely where Chinese goods are most competitive, while stretching the fiscal and strategic resources of Washington and its allies. Chinese exports of new energy vehicles, storage, photovoltaics and wind power equipment will accelerate, while the defence industry and dual-use technology sectors stand to profit quietly. — Professor and Vice Dean, School of International Relations, Renmin University of China (Weibo, 30 March)

Xing Ziqiang (邢自强): If oil were to average around US$130 for a quarter—the threshold at which global demand would fall non-linearly—it would lead to both a direct oil shock and a collapse in external demand for China, meaning that real GDP growth could fall to around 3% or lower without policy intervention. Global markets are severely underpricing this risk: even after counting backup pipelines, additional Russian exports and full releases of strategic reserves, only around 7 million of a 20-million-barrel daily shortfall could be covered. Rather than carrying out fiscal tightening going into the shock—which would compound China’s demand problem without fixing the supply-side cause—the correct response is from the 2021 commodity spike playbook: ease credit conditions through reserve requirement cuts and re-lending to keep squeezed firms afloat, while expanding fiscal spending in the second quarter if conditions warrant. — Chief Economist, Morgan Stanley China (爱思想, 27 March)

Li Fuquan (李福泉): The US-Israeli strikes have made clear to Tehran that remaining non-nuclear did not buy security but instead invited catastrophic destruction, making any genuine abandonment of Iran’s nuclear programme increasingly unlikely. The strikes have sent a signal that any state judged to possess nuclear intent and capability—even without actual weapons—may face a military strike by a powerful state, destroying the cornerstone of the international non-proliferation system. Three scenarios could follow: prolonged stalemate; a negotiated compromise—requiring conditions that are almost impossible to satisfy; or the most dangerous possibility—Iran shifting toward a “more covert, dispersed and miniaturised” nuclear programme until it crosses the threshold and shatters the regional balance. — Professor, School of Area and Country Studies, Northwest University (世界知识, 25 March)

Wu Hailong (吴海龙): The US-Israeli strike is part of America’s broader strategic competition with China and Russia. Unwilling to confront either directly, Washington is instead moving against weaker aligned states one by one. This demands a coordinated Sino-Russian response: deeper bilateral strategic coordination, full use of the UN and SCO mechanisms, stronger Global South solidarity, and the building of hard power sufficient to deter American aggression. — Former President, China Public Diplomacy Association (北京对话, March)

2. Global Order & US-China Relations

Zheng Yongnian (郑永年): China urgently needs an “Interventionism 2.0” [干预主义2.0版]—a revised doctrine permitting proactive intervention when overseas interests are threatened by a host state or third party, or when external factors impinge directly on domestic interests. Non-alignment remains principally correct and has so far prevented a Sino-American bloc confrontation from tipping into world war, but China’s traditional non-interference principle must be updated to protect the country’s growing global footprint. — Professor and Dean, School of Public Policy, The Chinese University of Hong Kong, Shenzhen (大湾区评论, 9 March)

Jia Qingguo (贾庆国): As rising Chinese competitiveness drives resistance to Chinese investment abroad, Beijing should respond by shifting its default outbound investment model from wholly-owned to joint-venture structures. Amid geopolitical deterioration and nationalist tendencies, Chinese firms have grown larger and more competitive so that the wholly-owned outbound investment model has begun threatening local enterprises in ways it previously did not. Alongside the shift to joint ventures, China should improve its transparency and relax restrictions on people-to-people exchange, while also improving its institutional management of overseas relations by expanding internal intelligence-sharing among research institutions and diplomatic departments. — Professor, School of International Relations, Peking University; Standing Member, 14th National Committee of the CPPCC (iGCU, 9 March)

Zhang Yongle (章永乐): The viral Chinese internet discussion of the American “kill line”—the threshold below which a minor illness or unpaid bill sends a middle-class family into cascading collapse—marks a shift in Chinese netizens’ cognitive positioning from “looking up” [仰视] to “looking at the same level” [平视] and even “partially looking down” [局部俯视] at the US. Defenders of the American social model are now required to explain why the world’s wealthiest nation leaves its middle class fragile and lacking in a safety net, reversing the long-standing frame in which China had to justify its institutions against an assumed American standard. — Associate Professor, School of Law, Peking University (爱思想, 20 March)

Zhao Dingqi (赵丁琪): The current far-right wave marks a new “Polanyian moment”—a counter-movement against the structural crisis of neoliberal capitalism—but unlike the interwar period, there is no race between communism and fascism: far-right forces are developing with a strength far exceeding that of the left. The United States is already operating what David Hill calls “pre-emptive fascism” [先发制人的法西斯主义]: formal democratic institutions are maintained not out of commitment but because working-class weakness makes it unnecessary to discard them. The cause of the left’s weakness is its abandonment of class politics for identity politics, which in fact became an accomplice and abettor of capital—providing cultural legitimacy to neoliberalism while leaving working-class material interests unaddressed. — Researcher, Chinese Academy of Social Sciences (文化纵横, 16 March)

Xia Liping (夏立平): Trump’s revival of the “G2” concept should not be read as a call for Sino-American co-governance, but as an opening for greater Sino-American coordination on a more equal basis. Unlike earlier formulations, it reflects America’s grudging recognition of China’s strength and a move from denial and anger towards bargaining. China should seize the opportunity to institutionalise leader-level and cross-sector dialogue, secure tangible gains in 2026, and build flexible “China-US+” frameworks with other actors. Properly deployed, the G2 framework can help constrain US containment, increase China’s international weight, and check Japanese militarist revival. — Professor, Tongji University (CRNTT, 16 March)

Wu Xinbo (吴心伯): Beijing is increasingly concerned about US pressure on its overseas economic interests and could retaliate against US interests in third countries where China holds the upper hand. China also feels more confident in confronting the tariff challenge and will not treat it as a major concern at the upcoming Trump–Xi summit in May. Beijing will instead treat tariffs as secondary to technology controls, entity-list removals, investment restrictions, Taiwan—including restraint on future US arms sales—and the restoration of a working mechanism for people-to-people exchanges. — Professor and Executive Director, Centre for American Studies, Fudan University (Brookings, 27 March)

3. Taiwan

Chen Xiancai (陈先才) and Su Weibin (苏炜彬): Taiwan “reunification” is a question of modern state construction in which the mainland already possesses “overwhelming advantages” in sovereignty, governance capacity and legitimacy. The real obstacle is identity: after seventy-five years of separate development, divergent systems, memories and ways of life have been internalised by many Taiwanese as a durable “psychological barrier” [心理屏障]. The answer is a shift away from “blood-transfusion” [输血式] style preferential policies towards a “blood-generating” [造血式] model of “asymmetric integration” [非对称融合]—binding Taiwan into mainland sectors that are hardest to replace, so that decoupling becomes “economically irrational and practically unfeasible”. — Director (Chen); Doctoral Researcher (Su), Taiwan Research Centre, Xiamen University (CRNTT, 11 March)

Wei Leijie (魏磊杰): The case for “recovering Taiwan” [收台] sooner rather than later is a matter of strategic urgency, and the two most common arguments for waiting—that Taiwan will converge democratically with the mainland, or that time will resolve the issue naturally—are both fallacies that function in practice as indefinite delay. The status quo is not stable but rather drifting irreversibly towards de facto independence, while Taiwan’s population, after four centuries without major warfare, lacks the psychological preparation or geographic conditions for prolonged resistance. Beijing should set a concrete recovery timetable to generate a sense of inevitability among Taiwan’s population and foreclose the option of indefinite delay. — Professor, Xiamen University Law School (CRNTT, 6 March)

4. Chinese Economy

Wang Xiaolu (王小鲁): Despite the money supply reaching 2.3 times nominal GDP, consumer demand remains stuck at 37–39% of GDP—because China’s problem is not simply low aggregate demand but a structural imbalance, with government expenditure devoted to investment and bureaucracy at the expense of a “livelihood-oriented fiscal policy” [民生财政]. Public education, healthcare, and social security account for only 13.9% of GDP against an OECD average of 23.5%, while administrative expenditure runs at 9.7%—nearly double the OECD average. Roosevelt’s New Deal succeeded not through Keynesian expansion but through improving people’s livelihoods; China must extend unemployment insurance—currently reaching only 240 million of 470 million urban workers— while simultaneously reducing onerous enterprise contributions. — Deputy Director and Senior Research Fellow, National Economic Research Institute, China Reform Foundation (爱思想, 6 March)

Wang Xiaolu (王小鲁): China’s official income distribution statistics systematically undercount government resource control by excluding land revenues, unrepaid debt, and the effects of monetary expansion—meaning the government now controls over 40% of the economy, exceeding its pre-reform-and-opening-up share. Fiscal and monetary loosening was never withdrawn after the 2008 stimulus, and local governments borrowed massively through shadow financing vehicles, continuously expanding state resource control in ways not reflected in official figures. Households bear the cost: despite controlling a larger share of the economy than comparable governments, China directs only 33% of expenditure to social security, healthcare and education—half the OECD average—meaning expanded government spending has not translated into public welfare but into investment and administration. — Deputy Director and Senior Research Fellow, National Economic Research Institute, China Reform Foundation (爱思想, 8 March)

Wang Yiming (王一鸣): With China’s share of global manufacturing already at 30%, further export expansion will invite trade restrictions from a growing number of countries, making a fundamental shift in the development model unavoidable. At the same time, China is passing through the 60–80% of US GDP “critical threshold” of US-China rivalry even as it faces compounding domestic headwinds: weak productivity growth, an 8.5 trillion yuan hole left by real estate that the “new three” [新三样]—lithium batteries, EVs and solar panels—cannot fill, and the possible early arrival of the post-urbanisation era. — Vice-Chairman, China Centre for International Economic Exchanges; former Vice President, Development Research Centre of the State Council (新华文摘, Issue 4 2026)

Zhou Tianyong (周天勇): Without institutional reform, China’s economy will grow at only 2.48% in 2026–2030 and 2.42% in 2031–2035—well below the 5% needed to meet the 2035 modernisation target. Unlike traditional industries, technologically advanced new-quality productive forces actually reduce inputs of capital and labour—and may therefore hamper economic growth in the absence of redistribution. Misallocation of labour, capital and land—stuck in low-productivity agriculture and non-competitive enterprises—costs the economy approximately 30 trillion yuan annually. Thorough-going reform across the hukou system and rural land marketisation, capital reallocation from SOEs to competitive firms, and sharply raised welfare transfers is therefore needed to maintain the economic growth rate. — Director, National Economic Engineering Laboratory, Dongbei University of Finance and Economics; former Deputy Director, Institute of International Strategic Studies, Central Party School (爱思想, 8 March)

Tang Dajie (唐大杰): The current basic rural pension rate (143 yuan a month, increased to 163 yuan during the Two Sessions) is less than a quarter of the rural Minimum Living Security Standard (equivalent to 574 yuan a month): to consolidate rural poverty alleviation, the aim should be to reach this standard within three to five years. Given the high consumption propensity of rural residents, this adjustment would generate a high pay-off in consumption potential and drive GDP growth. From the perspective of fairness, this could be paid for by halving the annual pension increase rate for civil servants and state-owned enterprise employees and directing it to rural residents. Just as the social security protections of the New Deal helped the US emerge from the Depression, China needs a more ambitious approach. — Guest Researcher, Research Centre for Finance, Tax and Law, Wuhan University (Caixin, 7 March).

Lü Dewen (吕德文): The discussion of rural pensions contains several misconceptions, including ignoring the risk that pension increases may produce a “crowding-out effect” [挤出效应], weakening children’s sense of obligation to care for their parents. Pensions have the quality of “welfare inelasticity” [福利刚性]—once raised, they cannot be lowered—making them unsuitable as short-term demand stimulus. The historical contributions argument is morally understandable but operationally incoherent and what the very elderly actually need is not cash but care—fully dependent elderly need 5,000–6,000 yuan or more, so relying on pension increases alone to resolve elderly care is like “trying to catch fish in a tree” [缘木求鱼]. — Distinguished Research Fellow, Department of Sociology, Wuhan University (爱思想, 18 March)

Lu Di (卢荻), Yu Shiwen (于诗文) and Gao Ling (高岭): The case for shifting to consumption-driven growth [消费驱动] rests on three flawed arguments. Cross-national comparisons merely describe a structural feature of late industrialisation; the demand-constraint claim is empirically falsified by post-2014 data; and the sustainability argument underestimates China’s remaining industrialisation needs and institutional capacity for long-term investment. The debate is at its core a contest between the developmental autonomy of late-developing nations and Western-centric paradigms. The “overcapacity” narrative [产能过剩论] is hence a discursive instrument for constraining China’s capital accumulation. — Professor (Lu Di); Doctoral Candidate (Yu Shiwen); Associate Professor (Gao Ling), Lingnan College, Sun Yat-sen University (东方学刊, 2 March)

Yu Yongding (余永定): “Consumption-driven growth” does not exist in any strict sense: growth rests on savings-funded investment, while consumption can only fill a shortfall in effective demand. Overcapacity is a sector-level problem for market competition, not a macroeconomic policy target, and the 3% deficit ceiling is a European political construct with no relevance to Chinese conditions. With bond yields signalling ample fiscal space, the central government should raise the deficit ratio, issue long-term bonds and absorb infrastructure financing responsibilities from over-indebted local governments. — Academician and Research Fellow, Institute of World Economics and Politics, Chinese Academy of Social Sciences (Tencent Finance, 2 March)

Zhu Tian (朱天): China’s low consumption rate was never a structural problem—it was a key driver of four decades of high-speed growth; the current demand shortfall stems from an acute cyclical downturn triggered by the real estate crisis, not a fundamental structural imbalance requiring long-term reform. Since utilisation rates for infrastructure and productive capacity are already low, government investment cannot find high-return “effective investment” projects; large-scale fiscal stimulus directed at consumption—specifically 4 trillion yuan in consumer vouchers and government purchase of under-construction housing for conversion to welfare—is more direct, efficient and does not generate ineffective excess capacity. Concerns about debt are misplaced: as long as the debt interest rate remains below the sum of the growth rate and asset returns, stimulus is self-correcting. — Vice President and Co-Dean, China Europe International Business School (爱思想, 8 March)

5. Artificial Intelligence

Liang Jianzhang (梁建章) and Wang Ciqiao (王次桥): AI is a fertility depressant operating through three channels: it provides instant, low-cost entertainment whose “dopamine return rate” is more competitive than child-rearing’s delayed rewards; it intensifies the skills arms race, eliminating entry-level positions and forcing continuous upskilling precisely during peak childbearing years; and it drives up the educational arms race for children. A further three structural mismatches prevent market correction—the childbearing window overlaps with peak career pressure; families bear the full cost of raising children while society captures most returns; and 96% of education spending is local while talent flows elsewhere. China’s childcare subsidy at 0.07% of GDP is a fraction of Japan’s 0.99%, and without a major fiscal response, China risks losing the population-scale advantage in data and application scenarios that underpins its AI competitiveness. — Research Professor of Applied Economics, Guanghua School of Management, Peking University (Liang); PhD Candidate in Economics, Chinese University of Hong Kong (Wang) (统梁说, 8 March)

Zhuo Xian (卓贤): AI is producing three simultaneous decouplings—investment from employment, technological progress from human capital, and wages from productivity—that collectively undermine the three pillars on which social insurance was built. As AI-intensive sectors no longer bid for labour, the mechanism that historically transmitted high-sector wage gains across the whole economy has broken down and the “learning-by-doing” ladder through which junior associates become senior experts is being severed. Policy responses include a differential robot tax, exempting “labour-augmenting” technologies, shifting social security financing toward general taxation to capture AI-generated wealth, and treating sovereign AI computing infrastructure as a future financing vehicle analogous to Norway’s oil fund. — Director and Research Fellow, Department of Social and Cultural Development Research, Development Research Centre of the State Council (New Economist, 24 March)

Yao Yang (姚洋): AI is a massive bubble deliberately hyped up by Silicon Valley tech companies—the trigger for its collapse may come from a Chinese photonic or optoelectronic chip breakthrough within two to five years; the government’s most urgent task is not AI but boosting domestic demand. Discussing medium-to-long-term growth targets is meaningless and the “two elephants in the room” obstructing consumption are the real estate market’s sustained negative growth and collapsing local government expenditure. If the problem continues, China will become 90s Japan—everyone repaying debts, economic growth severely dragged down. The solution is the 1990s debt governance model—government capital injection to get triangular debt [三角债] (chains of unsettled arrears) circulating—not structural adjustment, and not infrastructure investment, which has itself already gone into negative growth. — Dean, Dishui Lake Advanced Institute of Finance, Shanghai University of Finance and Economics (经济观察报, 26 March)

China’s Financial Strategy: Power, Sovereignty and the Limits of Caution (31 March)

This post presents a sharp debate over the meaning of financial power in China’s rise. Xia Bin argues that China remains a “weak financial power” and should pursue full domestic marketisation alongside only limited cross-border financial globalisation, using caution and control to shield the real economy from external shocks. Alicia García-Herrero, by contrast, contends that this approach understates finance’s autonomous strategic value and leaves China trapped in dependence on the dollar system. The piece is valuable not only for Xia’s systematic argument, but for the contrast it draws between financial caution and financial ambition.

Protracted War in the Middle East: Strategic Opportunity for China (22 March)

This swiftly censored memo by the Intellisia Institute sets out a strikingly hard-edged argument: that a prolonged war in the Middle East could become a major strategic opportunity for China. Rather than merely draining American military, financial, and diplomatic resources, the conflict is presented as one that could redirect capital, energy routes, and supply chains in Beijing’s favour. The piece argues that turmoil at sea strengthens China’s continental advantages, accelerates renminbi-based hedging, and deepens China’s role as the hub of global industry. Its logic is markedly more opportunistic than the neutrality favoured in much recent Chinese commentary.

Iran as the “Bridgehead” for Securing China’s Western Frontier (17 March)

Revisiting a 2013 essay by Zhang Wenmu, this post presents Iran as the outermost shield of China’s western security, embedded in the Zagros–Hindu Kush–Himalaya barrier that has historically blunted pressure from the west before it could reach China. Zhang argues that the states of the Iranian Plateau, more than India, have long absorbed and worn down external powers, from ancient empires to modern Western intervention. The article therefore casts Iran’s security as strategically bound to China’s own. Read against the backdrop of the current Iran crisis, it reveals a harsher, more anxious geopolitical logic than that found in much recent Chinese commentary.

Active Neutrality in the Middle East – Chinese Commentary on the US-Iran war (8 March)

Chinese commentary largely favours neutrality and mediation in the US–Iran war, with only limited calls for greater Chinese assertiveness. Analysts condemn the strikes as illegal yet often pair this with grudging respect for American power and arguments that China must learn from it. Some see the conflict as a strategic opportunity, predicting US entanglement in the Middle East, while others warn its logic could be replicated in East Asia. Most argue the consequences for China depend on the war’s outcome, doubt regime change without ground troops, and prioritise insulating US-China ties.

Chinese Debates on a Fragmenting Global Order | Digest: February 2026 (3 March)

This digest surveys Chinese commentary on a world increasingly defined by US retrenchment, regional fragmentation and intensifying great power rivalry. It highlights debates over how China should respond: whether through sharper economic red lines, new forms of managed trade, or more ambitious leadership in shaping a post-American order. Coverage spans Iran, Japan, Taiwan, Europe, Latin America, the Chinese economy and AI’s social effects. Across these themes, a central question emerges: how should China navigate a more dangerous, unstable and potentially more permissive international environment without overreaching or repeating America’s mistakes?

Today’s top items:

1. Wang Yi working the phones about Iran war - Wang Yi has been very busy working the phones about the Iran crisis over the last 24 hours, holding calls with the German, Saudi Arabia and Bahrain Foreign Ministers and the EU’s High Representative for Foreign Affairs and Security Policy. Wang has also spoken with the Iranian FM in recent days, but I do not believe he has spoken with his Israeli and American counterparts. Perhaps this is the moment China can play a constructive role in opening the Strait of Hormuz, but so far they are blocking a Bahraini UN resolution to reopen the Strait so I am skeptical.

The PRC Foreign Ministry spokesperson told the April 2 pres conference that:

The root cause of the obstruction to navigation in the Strait of Hormuz is the illegal military actions by the United States and Israel ag…

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