Note: The summaries included in this digest were drafted with AI assistance according to detailed editorial instructions: we selected the central and subsidiary points to highlight, determined their structure and emphasis, and then revised and reviewed each summary before publication. AI was not used to select the material or to generate summaries independently of editorial direction.

The celebratory mood that followed the Trump–Xi summit in May seems to have run its course. The prevailing assessment of US–China “strategic stability” remains broadly optimistic, but July’s commentary offers a more sober assessment of China’s strategic environment.

Authors still assume that US primacy is weakening and China’s material power is growing, but they repeatedly ask whether those advantages can be converted into durable influence. As Zhou Li, a former vice-minister of the International Department of the CPC Central Committee, writes in an otherwise confident survey, “having an advantage does not equate to a winning position”.

Zheng Yongnian and Da Wei complicate familiar narratives of American decline. Zheng describes a waning hegemon whose decline is relative, protracted and non-linear, warning, “China must not lull itself into a false sense of security”. Da distinguishes the end of Pax Americana from the unresolved trajectory of American national power, while Wu Xinbo provides the policy prescription: “constructive strategic stability” rests on credible Chinese counter-pressure.

Elsewhere, Wu says that Xi Jinping’s four global initiatives require real resources to implement. His tone is far from critical, but the observation that “global governance cannot rely solely on conceptual initiatives” is nonetheless striking. Jin Canrong similarly acknowledges that China’s historically East Asia-centred statecraft has left it short of experience in managing genuinely global affairs, while cultural insecurity means confidence lags behind material strength.

AI coverage in July included commentary on Xi Jinping’s announcement of the World Artificial Intelligence Cooperation Organisation (WAICO) and the unveiling of a new Chinese AI model that allegedly rivals US competitors, but much of this commentary was boilerplate. Instead we included two pieces that resist triumphalism about China’s recent advances. While Zhu Songchun identifies dependence on US-defined concepts and paradigms as China’s deeper weakness, Huang Ping distinguishes mass-market success from American frontier leadership.

Among the pieces focusing on Chinese society, Yao Yang uses Wang Hong’s Fields Medal to explore weak female representation in senior politics and a revival of patriarchal ideas. Zhou Lian and Xu Jilin, and separately Dong Yue, focus on young people’s retreat from public life. Zhou and Xu attribute this retreat to repeated experiences of powerlessness, while Dong identifies a sub-group of highly educated home-staying “squatting youth” [蹲族], produced by an expansion of educational opportunities, but a lack of good jobs.

June’s “Going Out” section largely made the case for a new wave of outward investment—July’s selection focuses on its conditions and risks. Li Wei warns that China’s commercial footprint could outstrip the state’s capacity to protect overseas assets, while Liang Dong, Wu Ting and Wu Huimin argue that outward investment serves “dual circulation” only when profits and productive capabilities return home.

On the home front, Liu Shijin treats China’s “strong supply, weak demand” as the result of a production-first growth model that has outlived the shortage economy for which it was built. A fuller account of China’s domestic economy will follow in our forthcoming Economy Digest.

On Europe and its relations with Beijing, the tone is pessimistic about the prospects for resolving structural conflict, but broadly confident about China’s relative position. The most arresting argument comes from former Chinese trade diplomat Zhou Xiaoming, who says China’s support for a “strong, united EU” no longer serves Beijing’s interests: Brussels was imagined as an autonomous pole in a multipolar order, but has instead become an institutional centre of confrontation with China.

Ding Chun and Wu Jiwei, and separately Qin Shuo, reach softer conclusions. Ding and Wu describe EU–China industrial relations as “competitive coexistence”. Qin, a prominent business-media commentator, writes that trade conflict is a normal consequence of China becoming the axis of global manufacturing. His conclusion—that China bears responsibility for steering the contest towards a more open and balanced order—is refreshing.

Coverage of Britain’s new prime minister was voluminous but held few surprises: Long Jing expects broad foreign-policy continuity, constrained by existing security alignments and Britain’s diminished room for manoeuvre.

On the Middle East, Liu Zhongmin and Tang Zhichao see the Iran war accelerating the transition towards a “post-American” regional order—both predict deeper fragmentation and disorder alongside greater regional agency.

July also saw many pieces marking the tenth anniversary of the 2016 South China Sea arbitration award. Most were boilerplate, but Wu Shicun’s interview with the South China Morning Post stands out for warning that fixed Chinese facilities on Scarborough Shoal remain an option if Philippine and foreign patrols intensify. Wu’s threat fits a longer pattern, but remains notable. Bao Yinan offers a less confrontational route, proposing consent-based mediation through the new Hong Kong-based International Organisation for Mediation.

Neighbourhood diplomacy is another major theme of the month. Both Zhou Fangyin and Zhao Long describe an increasingly securitised environment in which US alliance policy raises pressure to choose sides. On China’s regional engagement, Zhang Yun reads Japan–Philippines maritime talks as part of Tokyo’s attempt to become a second centre of regional leadership, Mao Keji and Mao Yaxin interpret India’s reopening to Chinese investment as industrial necessity rather than strategic trust and Wang Youming expects Latin America’s rightward turn to complicate China’s position without dislodging it.

July’s strongest writing qualifies confidence in China’s rise—American retrenchment is adaptive rather than terminal, the trade war is survivable but unavoidable and China’s growing power is running ahead of the institutional, diplomatic and intellectual capacities needed to translate it into durable gain.

— Jacob Mardell

1. US–China & Global Order:

   1. Zheng Yongnian on America as a “declining hegemon” whose relative decline coexists with renewed technological and coercive power.

   2. Da Wei on Pax Americana ending without settling whether American national power declines or revives.

   3. Wu Xinbo on:

      1. “constructive strategic stability” resting on credible Chinese counter-pressure.

      2. China’s four global initiatives requiring “real money”, institutions and trained personnel to become operational.

   4. Jin Canrong on China’s global experience and cultural confidence lagging behind its material strength.

   5. Zhou Li on accelerating US hegemonic decline and China’s systemic “ideas + strength + strategy” advantage.

2. Europe:

   1. Zhou Xiaoming on why China’s long-standing support for a “strong, united EU” may no longer serve its interests.

   2. Qin Shuo on trade war as a structural consequence of China becoming the axis of global manufacturing.

   3. Ding Chun & Wu Jiwei on China–EU industrial relations entering “competitive coexistence”, with selective cooperation surviving behind higher barriers.

   4. Sun Chenghao on NATO 3.0 becoming more militarily effective.

   5. Long Jing on Andy Burnham’s foreign policy being untested but constrained by circumstances.

3. Chinese Economy & Going Out:

   1. Liu Shijin on “strong supply, weak demand” as the result of China’s production-first growth model.

   2. Li Wei on China’s commercial expansion outrunning its capacity to protect overseas interests.

   3. Liang Dong, Wu Ting & Wu Huimin on outward investment serving “dual circulation” only when profits return home.

   4. Yang Ping on Chinese capital potentially undermining industrialisation in the Global South.

4. Middle East:

   1. Liu Zhongmin on the interruption, but not reversal, of the Middle East’s movement towards strategic autonomy, reconciliation and development.

   2. Tang Zhichao on the acceleration of a fragmented “post-American” order.

5. South China Sea:

   1. Wu Shicun on fixed facilities at Scarborough Shoal remaining an option.

   2. Bao Yinan on using consent-based mediation to manage practical disputes in the South China Sea.

6. Neighbourhood Diplomacy:

   1. Zhou Fangyin on “de-securitisation” and “de-geopoliticisation” as principles for keeping China’s neighbourhood from splitting into rival camps.

   2. Zhao Long on “doubt and fear of America” keeping states vacillating between strategic autonomy and tighter alliance dependence.

   3. Shi Yuanhua on a 64-state “greater periphery” including the United States and the case for China biding its time on Taiwan.

7. Regional Policy:

   1. Zhang Yun on Japan using the Philippines to become a second centre of power alongside Washington.

   2. Mao Keji & Mao Yaxin on India’s attempt to reduce reliance on China making it more dependent on Chinese goods.

   3. Wang Youming on Latin America’s rightward turn complicating, but not dislodging China’s position.

8. AI & Tech:

   1. Zhu Songchun on China remaining dependent on US concepts.

   2. Huang Ping on China’s “good enough and cheap” AI advantage facing a Huawei-style political blockade.

9. Society:

   1. Yao Yang on Wang Hong’s Fields Medal, patriarchal revival and Chinese women’ s shrinking horizons.

   2. Zhou Lian & Xu Jilin on young people’s retreat from public life and “dog-wisdom-ism” among knowledge elites.

   3. Dong Yue on graduate “squatting youth” [蹲族], produced by the mismatch between higher-education expansion and the lack of suitable employment.

1. US-China & Global Order

Zheng Yongnian (郑永年): The whole world may misunderstand the United States, but China cannot afford to do so. America’s decline is relative, not absolute and the decline of a major power is a long-term process. Multipolarisation is a long process and the US will remain the most important pole. Meanwhile, the nature of American hegemony is changing, from “constructive” to “destructive”. In important fields such as AI, American hegemony has not only failed to decline but is being strengthened and upgraded. The US practises protectionism in areas of goods trade where it lacks comparative advantage, but in fields where it possesses comparative advantage, it continues to advance globalisation, thus increasing the dependence of other countries. The American claim that “China is only a few days behind the United States”, satisfies the vanity of people in China while mobilising resources within the United States.— X.Q. Deng Presidential Chair Professor and Dean, School of Public Policy, CUHK-Shenzhen (大湾区评论, 4 July).

Da Wei (达巍): “Pax Americana” is coming to an end, but no conclusion can yet be reached about America’s rise or decline. America is actively dismantling the hegemonic system that it took the lead in constructing after the Second World War. MAGA is not a retreat from empire back to republic. It is a retreat from a liberal internationalist empire to the late-nineteenth-century imagination of a nationalist empire. America has not simply decided that it “does not want to be a hegemon” any longer. More accurately, America is unwilling to continue bearing the costs. Historically, leaps in American national power generally came from the opening of three kinds of frontier: geographical, institutional and technological frontiers—only this latter frontier remains available to the US. America’s national power may increase again, but “Pax Americana” is unlikely to return. — Director and Professor, Centre for International Security and Strategy (CISS), Tsinghua University (清华大学战略与安全研究中心, 1 July).

Wu Xinbo (吴心伯): Constructive strategic stability depends on credible Chinese counter-pressure, and every strike answered with equal or greater force. Repeated rounds of “fighting and talking” have changed expectations. Washington must now price in retaliation before acting. Planned trade and investment councils, fentanyl cooperation, maritime military consultations and the suspension of Taiwan arms sales indicate what stabilisation is able to deliver. However, Trump sees Taiwan as leverage for obtaining concessions from China, so Beijing should make sure to maintain pressure, repeatedly restate its red lines and respond forcefully to US provocation. Stability also remains exposed to US domestic politics—a Democratic House could use hearings, human rights, arms sales and investment restrictions to constrain Trump. Taiwan’s January 2028 leadership election and the November US presidential contest may bring significant changes. — Dean, Institute of International Studies, and Director, Centre for American Studies, Fudan University (思路打开, 6 July).

Wu Xinbo (吴心伯): America’s waning global leadership creates a historic opening for China, but Beijing’s four global initiatives still need to be translated into concrete outcomes. US leadership originally combined material power with progressive principles, but Cold War militarisation and intervention eroded its public character. Meanwhile, today’s reliance on sanctions signals declining diplomatic persuasion and credibility. Newer arrangements such as the Indo-Pacific strategy lack the appeal of post-war institution-building. Global governance cannot rely solely on conceptual initiatives, and if the UN headquarters one day moves from the Hudson to the Huangpu, China must prepare the necessary resources, physical space and professional talent in advance. — Dean, Institute of International Studies, and Director, Centre for American Studies, Fudan University (人大重阳, 3 July).

Jin Canrong (金灿荣): China may yet overturn Brzezinski’s prediction that America will be the last global superpower, but converting its underestimated strength into a genuinely global role requires experience and institutions that its historically East Asia-centred statecraft never developed. Unlike Western powers that were formed by centuries of colonial expansion, Chinese dynasties governed a vast, diverse society, but remained strategically defensive. China’s instinctive rejection of “G2” reflects resistance to being “praised to death”, but also a lack of preparation for global affairs. A separate legacy of Qing rule results in cultural self-denigration—China has grown to 1.95 metres but still thinks itself 1.2 metres tall. Development will reverse this insecurity, while US containment acts as a “good teacher”, training China for the world stage. China should ultimately practise an enduring “kingly way” [王道] of restraint, rather than the West’s “hegemonic way” [霸道]. — Wu Yuzhang Chair Professor, School of International Studies, and Director, Centre for China’s Foreign Strategy Studies, Renmin University of China (金金乐道编辑部, 9 July).

Zhou Li (周力): The American hegemonic system is accelerating its own decline and multipolarisation is deepening, while China possesses a systemic “ideas + strength + strategy” advantage in the emerging order. The US–Israel–Iran conflict demonstrated that military superiority, sanctions and unilateral pressure cannot secure political outcomes. Pakistan- and Qatar-led mediation and the reopening of Hormuz point towards greater regional agency and an American return to offshore balancing. Meanwhile, Western political dysfunction and central-bank gold repatriation signal declining trust in established institutions and the dollar-centred system, though this is “de-risking” rather than imminent de-dollarisation. China’s governance model offers an alternative to Western institutional crisis, but “having an advantage does not equate to a winning position”. European protectionism and a more extreme America remain major risks. Beijing must secure 15th Five-Year Plan technological breakthroughs, repair supply-chain weaknesses and maintain strategic composure. — Former Vice-Minister, International Department of the CPC Central Committee (习近平外交思想和新时代中国外交, 6 July).

2. Europe

Zhou Xiaoming (周小明): China should reconsider its long-standing support for a “strong, united EU”. European integration once suggested an autonomous pole capable of preventing a US–China bipolar order and a third world war, but Brussels has instead become an institutional vehicle for confrontation with China. Recent consultations pulled both sides back from the brink—China still values the European market and strategic autonomy and Brussels doubts it can withstand Chinese retaliation. However, the two sides cannot resolve the structural conflict rooted in Europe’s declining competitiveness and export controls on the advanced goods China actually wants to buy. The “systemic rival” label now overrides partnership, recasting interdependence as risk, keeping the investment agreement frozen and treating engagement with member states as “divide and rule”. Beijing should “discard illusions” [丢掉幻想], prepare for wider restrictions under the EU’s Industrial Accelerator Act and shift more effort to national and local governments, but retain cooperation with EU institutions where possible. — Senior Fellow, Centre for China and Globalisation (CCG); former Deputy Permanent Representative, Permanent Mission of China to the United Nations Office at Geneva (观察者网, 8 July).

Qin Shuo (秦朔): Trade war is a normal condition of China becoming the central axis of the global manufacturing industrial chain—just as China is the anchor of world goods, America is the anchor of world currency. However, compared with when the United States led globalisation, China will have more opponents because China’s industries inevitably face many more competitors. China should not “protect commerce with swords”, or create a “Chinese circle”. Rather it has a responsibility to guide trade war towards a new order. Chinese companies can do more to accelerate localised production, establish more complete compliance systems, respond better to carbon and ESG challenges, and accelerate market and supply-chain diversification. China also has a major card to play, that is, making its own market bigger.— Co-Director, China Business Civilization Research Centre; former editor-in-chief, Nanfeng Chuang and China Business News (秦朔朋友圈, 12 July).

Ding Chun (丁纯) and Wu Jiwei (吴佶蔚): China–EU industrial relations have entered “competitive coexistence” [竞争性共存]. China’s rise from workshop to same-market rival has moved competition from products and prices into investment conditions, technology standards and rules. However, deep interdependence persists and the most likely trajectory is selective cooperation behind higher barriers. Europe still possesses strong basic research capabilities, but it suffers from structural weaknesses in translating scientific and technological achievements into commercial productivity and risks falling into the “medium-technology trap.” The Sino-European contest in emerging industries like artificial intelligence is essentially a clash between “governance-driven” and “application-driven” paths. This competition will not be limited to a single product or technology contest, but will extend to multiple dimensions, including breakthroughs in underlying technologies, supply chain support and the formulation of industry rules. — Ding: Director, Centre for European Studies, Fudan University; Wu: Postdoctoral Fellow, Institute of Belt and Road & Global Governance, Fudan University (欧洲问题研究, 5 July ).

Sun Chenghao (孙成昊): “NATO 3.0” may become more militarily effective without becoming more politically united. China should not expect transatlantic differences to lead to the disintegration of NATO—instead it should expect NATO’s military industrial expansion to lead to more securitised European scrutiny of Chinese technology and supply chains. NATO is shifting towards the delivery of industrial capacity and sustained combat power and Washington seeks to transfer responsibility transfer, without relinquishing US leadership. Trump wants Europe to gradually transform from a “security consumer” to a “security provider,” allowing the US to allocate more strategic resources to the Indo-Pacific. NATO is beset by three contradictions: between the pursuit for strategic autonomy and dependence on the US; between European priorities; and between NATO members who diverge on shared values. NATO will neither disintegrate rapidly nor revert to its past. — Associate Fellow, Centre for International Security and Strategy, Tsinghua University (中美聚焦, 17 July).

Long Jing (龙静): Britain’s seventh prime minister since the Brexit referendum was open to cooperation with China at the local level, but will face a more complicated position as prime minister. Burnham inherits economic decline, social division and international uncertainty, as well as the risks associated with chronic leadership churn. This means that his priority is likely to be domestic repair rather than diplomatic reinvention. Lacking foreign-policy experience, Burnham will likely preserve Starmer’s interest-driven policy, stabilising ties with Washington, sustaining support for Ukraine, rebuilding practical European ties and widening relations with middle powers. — Deputy Director, Centre for European Studies, Shanghai Institutes for International Studies (SIIS) (中美聚焦, 24 July).

3. Chinese Economy & Going Out

Liu Shijin (刘世锦): Strong supply and weak demand are not the result of short-term fluctuations, but originate in an unbalanced pattern of growth supported by institutional and structural factors. At the beginning of reform and opening, China was a shortage economy and this growth model—characterised by high savings, high investment and high exports—was appropriate and possessed clear advantages. But when investment can no longer be expanded and begins to contract, as is the case in China, it becomes increasingly difficult to sustain. Excessive productive investment now suppresses returns, while strong exports are a reason for rather than a consequence of weak domestic consumption. Meanwhile, companies distribute too little income and household deposits are concentrated among the affluent. Only by reducing the savings rate and increasing terminal demand can capacity utilisation be raised. China should reduce its total savings rates, reform its tax system, encourage private enterprises to increase dividends, funnel RMB20 trillion of listed state capital into social-security funds, use 50 per cent of macroeconomic to address the problem, raise pensions to release consumption and use housing support to address the mismatch facing migrant workers. — Former Vice-Chair, Committee for Economic Affairs of the 13th CPPCC National Committee; former Vice-President, Development Research Centre of the State Council (中国宏观经济论坛, 7 July).

Li Wei (李巍): China risks falling into a seventeenth-century “Dutch trap” [荷兰陷阱] if its expanding commercial footprint outstrips its capacity to protect overseas assets, personnel and international routes. China should therefore focus on building a robust system to safeguard its overseas interests. Great-power competition is shifting from seizing wealth towards creating it through technology, commercial application and industrial ecosystems, putting “super-enterprises” on the front lines of geopolitical competition. Chinese companies need to achieve a genuine breakthrough in profitability, rather than simply in sales volume, to achieve sustainable progress. Although globalisation faces severe challenges, it is not coming to an end. Several questions remain: whether China can maintain its status as the “world’s factory” and further climb up the global value chain; whether the US can reindustrialise; and whether emerging manufacturing bases can replicate the industrialisation experience of the “Four Asian Tigers” — Wu Yuzhang Distinguished Professor and Deputy Dean, School of International Studies, Renmin University of China (财经, 2 July).

Liang Dong (梁栋), Wu Ting (吴婷) and Wu Huimin (吴慧敏): “Going global” is not the end goal. Outward investment matters only insofar as it feeds profits and productive capabilities back into China’s domestic economy, advances “dual circulation” and avoids industrial hollowing-out. China has yet to convert its vast domestic industrial advantages into a commensurate capacity to own and earn income from overseas assets. Notably, it still runs an investment-income deficit. Japan offers lessons—including its retention of domestic “mother factories”—but it’s not a model China can simply reproduce. Geopolitical fragmentation, investment restrictions and localisation requirements are replacing the sequential “flying geese” model with a sovereign-bounded “hive model” [蜂巢模式] of multi-centred local production, firms and suppliers moving abroad together. Ultimately, repatriated profits, personnel circulation and overseas R&D should return technology, standards and management capabilities to China. — CICC analysts; Wu Huimin is Executive Dean, CICC Global Institute, and Executive Head, CICC Research Department (中金研究院, 9 July).

Yang Ping (杨平): China’s current phase of exporting capital and productive capacity may damage the Global South’s national industries, triggering protectionism and resource nationalism. If Chinese expansion destroys Southern countries’ own industrialisation, China’s Global South strategy will have “turned entirely into its opposite”, creating new dependency rather than enabling development. Beijing must not conflate its commercial and strategic relationships with the Global South, and should instead coordinate China’s industrial development with Southern countries’ autonomous industrialisation. The “community with a shared future for mankind” requires a political economy that goes beyond generic claims of “win-win” cooperation. — Founder, President and Editor-in-Chief, Beijing Cultural Review (文化纵横, 16 July).

4. Middle East

Liu Zhongmin (刘中民): Renewed war has divided the Middle East into three loose power formations, but has not reversed the deeper shift towards regional strategic autonomy, reconciliation and development. The US- and Israeli-led Abraham Accords grouping now coexists with a Saudi–Pakistan–Turkey–Egypt “Sunni Diamond”, as well as Iran’s weakened but resilient “resistance front”. The new Sunni grouping is not trying to choose a camp or overturn the existing order, but to “find direction” and avoid marginalisation, while Saudi Arabia continues to uphold the two-state solution. This fragmentation has severely impacted, but not yet reversed the previous trend of easing tensions and pursuit of common development and it is increasingly difficult to shake the growing sense of strategic autonomy within the region. While US allies have been unable to completely break free from their security dependence on the US in the short term, they have significantly accelerated their diversification in security and diplomacy. — Professor, Middle East Studies Institute, Shanghai International Studies University (环球时报, 13 July).

Tang Zhichao (唐志超): The US–Israel–Iran conflict has accelerated the Middle East’s transition towards a “post-American era”. This will likely lead towards a more fragmented and disorderly, but more autonomous regional order. Washington’s Gulf security architecture has become a liability that attracts Iranian retaliation, while US forces have failed to protect partners or control Hormuz, shattering the myth of the invincible US security shield. The strategic development trend in the Gulf region has also been reversed, with countries falling into a new development–security dilemma. Regional fronts such as the “Four-Nation Group” of Saudi Arabia, Turkey, Pakistan and Egypt are coalescing and the fragmentation of the Middle East is further intensifying. The US strategy of using Iran as a breakthrough to contain China and Russia in the Middle East has been thwarted, with strategic cooperation between China and Middle Eastern countries deepening.— Professor and Deputy Director-General, Institute of West Asian and African Studies, CASS (当代世界, Issue 6, 2026).

5. South China Sea

Wu Shicun (吴士存): China will not proactively undertake further South China Sea reclamation, but fixed facilities on Scarborough Shoal remain an option. If Beijing builds, it will be because “external forces have left us with no choice”. Any Philippine vessel deliberately grounded at Sandy Cay will be towed away, although China itself does not intend to occupy the feature. Opening Taiwan-held Taiping Island to US or Japanese forces would cross a mainland red line if this developed into activity targeting the mainland or infringing Chinese sovereign rights. Beijing will likewise reject maritime delimitations reached without China that violate its sovereign rights. Practical cooperation should begin bilaterally with fish-stock surveys, catch quotas, coordinated licensing and pollution control. — Founding President and Chairman of the Academic Committee, National Institute for South China Sea Studies (South China Morning Post, 13 July).

Bao Yinan (包毅楠): The Hong Kong-based International Organisation for Mediation (IOMed) could provide China with a third-party mechanism for addressing selected South China Sea disputes without sacrificing the consent and procedural control that is lacking in compulsory arbitration. Proceedings at the IOMed require the agreement of all parties, allow any party to withdraw unilaterally and make only settlements that are formally concluded by the parties legally binding. China helped establish the organisation, was its first signatory, and five of eleven ASEAN countries have already joined. WTO disputes are excluded from its jurisdiction, but not sovereignty or maritime-delimitation disputes. UNCLOS allows parties to pursue consensual procedures before compulsory settlement, placing mediation within rather than outside the Convention. Scholars believe that a “salami-slicing” [切香肠] approach should be taken, prioritising “non-core disputes” [非核心争端] such as fisheries, marine environmental protection, submarine cables and pipelines and law-enforcement encounters. — Associate Research Fellow, Huayang Centre for Maritime Cooperation and Ocean Governance (亚太安全与海洋研究, Issue 3, 2026).

6. Neighbourhood Diplomacy

Zhou Fangyin (周方银): China should keep great-power rivalry from hardening its neighbourhood into opposing camps and make “de-securitisation” [去安全化] and “de-geopoliticisation” [去地缘政治化] central to regional cooperation during the 15th Five-Year Plan. Strategic competition among major powers is leading to a deterioration of China’s surrounding environment, with the US promoting the “de-Sinicisation” [去中国化] of supply chains and pressuring countries to introduce discriminatory policies against China. The securitisation of economic issues and the weaponisation of interdependence have become increasingly common in China’s neighbourhood since 2018, hampering regional integration. China possesses a significant military advantage compared to most of its neighbours, deterring other countries from provoking armed conflict. This provides space for China to firmly state its position, demonstrate goodwill and strengthen consultation with relevant countries. China should also deepen non-traditional security cooperation with its neighbours. — Professor, School of International Relations, Sun Yat-sen University (国际展望, Issue 2, 2026; via 爱思想, 16 July).

Zhao Long (赵隆): China’s neighbourhood will grow more unstable during the 15th Five-Year Plan as the US turns “island chains” into an “alliance chain” [盟链] and regional states oscillate between reducing dependence on Washington and binding themselves more tightly to the US. By forward-deploying partners and outsourcing costs, Washington is able to lower the threshold for military intervention. Trump’s “extractive partnership” produces both “doubt and fear of America” [疑美恐美]—unreliable commitments encourage greater autonomy and diversified ties, but fear of abandonment also pushes US-dependent states towards early declarations of support, over-compliance and surrendering policy space. European NATO members may back Washington’s Indo-Pacific strategy in order to keep US attention on Europe, even as Greenland threats and tariffs erode transatlantic trust. Beijing should build an Asian security model through shared security, respect for differences, dialogue, crisis management and low-sensitivity public goods, backed by BRI and RCEP cooperation, therefore strengthening neighbours’ resilience against external pressure. — Director, Institute for International Strategic and Security Studies, Shanghai Institutes for International Studies (SIIS) (国际展望, Issue 2, 2026; via 爱思想, 16 July).

Shi Yuanhua (石源华): China’s neighbourhood should remain the primary focus of its diplomacy until at least 2035. This “greater periphery” extends beyond China’s immediate neighbours to 64 states across six subregions and even includes the United States. China and the US form the two poles, while all other states are “middle countries” [中间国家] whose positions vary according to their interests rather than fixed bloc loyalties. This includes Japan, which, although clearly an ally of the US, may take a middle course between China and the US on certain issues. During the transition from “standing up” through “becoming prosperous” to “becoming strong”, China has gradually developed its own Indo-Pacific, or “Two-Ocean”, strategy. China’s north and west are relatively stable, while tensions in the east and south are more acute. The most important thing for China is to continue to grow stronger—it should wait until the time is ripe on the Taiwan issue, which may resolve itself without the need for military action, either through internal unrest in Taiwan or the US descending into chaos. — Distinguished Professor, Institute of International Studies, Fudan University (观察者网, 22 July).

7. Regional Policy

Zhang Yun (张云): Japan and the Philippines’ maritime-delimitation talks are less about drawing a boundary than about Tokyo’s attempting to move from subordination in the US system towards becoming a second centre of regional leadership alongside Washington. Tokyo is building direct links among American allies and “like-minded” states and Manila is an obvious partner because it is both a US treaty ally and a longstanding Japanese economic partner. The 2024 trilateral summit, Japan–Philippines Reciprocal Access Agreement and Japanese participation in Philippine exercises and live-fire anti-ship missile drills show that cooperation is moving from diplomacy towards operational military coordination. Japan’s rise to prominence can also reduce strategic costs for the US and under the Trump 2.0 framework, a new “US-Japan-Philippines-Australia” Quadrilateral Mechanism has promoted the deepening of strategic interaction between Japan and the Philippines. — Professor, Department of International Politics, School of International Relations, Nanjing University (中美聚焦, 6 July).

Mao Keji (毛克疾) and Mao Yaxin (毛雅欣): The Achille’s heel of India’s economic policy toward China is the paradox that it seeks to compete with China by utilising its capital, while simultaneously harbouring security concerns regarding Chinese investment. India has repeatedly oscillated between security anxieties, manufacturing ambitions and practical dependence, but guarding against Chinese investment has not yielded the expected results, with bilateral trade reaching new highs. This leaves India in the “double bind” of neither having reduced its dependence on China nor achieved its desired economic autonomy. Ultimately, India’s easing of approvals for Chinese investment in key industries does not mean it has abandoned its economic security logic. — Mao Keji, Associate Research Fellow, and Mao Yaxin, Research Assistant, International Cooperation Centre, National Development and Reform Commission (世界知识, Issue 13, 2026).

Wang Youming (王友明): Latin America’s rightward turn will complicate China’s position without dislodging it. Governments leaning towards Washington will still buy two “insurance policies”, of American political-security protection and Chinese economic support. The “Trump–Monroe doctrine” [唐罗主义] has become a coercive regional architecture, which combines military force and threats against Venezuela and Cuba with an “Americas Shield”—a critical-minerals alliance targeting the lithium triangle, a China-excluding “Silicon Peace Initiative” and open support for right-wing candidates. The consequences are already visible in Panama’s refusal to renew its Belt and Road memorandum, the revocation of a Chinese port concession and “cold politics, hot economics” under some right-wing governments. However, China remains difficult to replace as a commodity buyer, infrastructure provider and partner in the digitalisation and green development of mineral resources. — Senior Research Fellow, Department for World Peace and Security Studies, China Institute of International Studies (CIIS) (中美聚焦, 8 July).

8. AI & Tech

Zhu Songchun (朱松纯): Through the grand narrative of an “AGI race” and a capital bubble, the United States has successfully siphoned global capital into its domestic AI industry—the bubble will eventually burst, but the infrastructure will remain in the United States. Meanwhile, China ranks among the world leaders in the number of papers published, but its ability to define problems and open up new paradigms remains far too weak—China must abandon the mentality of a “follower” and stop copying the United States’ narrative framework. The true height of technological competition is autonomy in thought and narrative—this is, in essence, a cultural competition, not merely a technological one. We must break our “faith in data” and understand clearly that intelligence is led by values, not driven by data. Here the thousand-year exploration and discussion of the “heart” in Chinese thought points towards an AGI technological path based on Eastern philosophy and wisdom. — Director, Beijing Institute for General Artificial Intelligence; Dean, School of Intelligence Science and Technology, Peking University (知识分子, 19 July).

Huang Ping (黄平): Chinese AI has won the battle of “good enough and cheap”, but not the battle of “the strongest”, and America’s current restraint is a matter of choice, not a matter of capacity. Chinese models meet functional requirements while offering extremely good value for money, but America dominates the high-end market. America’s political toolkit remains largely unopened—Domestically, American companies using Chinese AI could easily be incorporated into a stricter regulatory framework, while America’s influence over its global network of allies is far stronger than it has so far demonstrated. Faced with this largely foreseeable blockade, China must prepare in advance. The limits of China’s power mean the best path is an indirect response, accelerating the depth of the global integration of its open-source ecosystem, focusing on the Global South and promoting local development of its weights. It should resist restricting foreign access to its strongest models. — Associate Professor and Assistant Dean, School of Public Policy; Deputy Director, Institute for International Affairs, Qianhai, CUHK-Shenzhen (大湾区评论, 15 July).

9. Society

Yao Yang (姚洋): Wang Hong’s Fields Medal shows what Chinese women can achieve, but the status of women in China is shrinking. In recent years, the space available for women to develop and flourish in China has shown signs of contraction. The socialist revolution launched a powerful movement for women’s liberation, and the number of women entering the workforce continued to grow with the transition to a market economy. However, the path for women into politics and public society is much narrower and within the senior cadre ranks there are only two female governors and no female provincial Party secretaries. Traditional thinking is returning, while overseas conservative thinking has also entered China, creating a trend of rejecting work to advance women’s rights. — Dean and Professor, Dishui Lake Advanced Finance Institute, Shanghai University of Finance and Economics (姚洋说, 29 July).

Zhou Lian (周濂) and Xu Jilin (许纪霖): Young Chinese are withdrawing from public life because repeated experiences of powerlessness have taught them that participation changes little. From the 1980s until around 2010, intellectuals and young people generally cared about public issues, but ten years ago, Chinese society underwent a significant change involving a turn towards the self and personal growth. Under the conditions of precarious and scarce employment, it is entirely understandable that young people treat “preserving the self” and “securing the present” as their primary objectives. Since reform and opening, those who received the greatest dividends were indeed the generations born in the 1950s, 1960s and 1970s. Among elites of this generation, the pathology is “dog-wisdom-ism” [狗智主义], meaning a cynicism that sees through hypocrisy but engages with it anyway, venting through irony rather than resistance. Meanwhile, China’s education system sets rules for children too early, limiting their creativity. — Zhou: Professor, School of Philosophy, Renmin University of China; Xu: Zijiang Scholar and Professor, Department of History, East China Normal University (许纪霖文化说, 13 July).

Dong Yue (董越): The mismatch between educational opportunity and job scarcity has produced a distinct group of graduate “squatting youth” [蹲族]—middle-class alumni of leading universities who remain outside of regular work, refusing jobs they regard as beneath the value of their education. They are distinct from those “lying flat”—rather than rejecting intense competition, their “squatting” is more strategic: through non-participation in employment, they resist competition they regard as unfair and standards of success they regard as alienating. Responses must move beyond the short-term logic of “forcing employment”. Structural and cultural problems require systematic solutions. Higher education should move from expansion based on scale towards high-quality development better adapted to economic needs and the government should improve social-security systems for freelancers, digital nomads and micro-entrepreneurs, providing low-cost environments for business incubation. — Faculty Member, School of International Education, Guangdong University of Finance (当代青年研究, 12 July).

Zhou Juan on The Social Costs of China’s Education System | (29 July)

Zhou Juan’s striking claim is that Chinese children suffer not from an “excess of self”, but from selves that have never been fully formed. Academic competition divides pupils into over-disciplined “good kids” and withdrawn “bad kids”, but both are deprived of the free play, sustained relationships and unstructured time needed to develop judgement, empathy and emotional resilience. The result, Zhou argues, is a generation whose inner lives become narrow enough to be dominated by grades, adult approval, phones or games. Today’s silent, fragile and mutually alienated pupils will become tomorrow’s university students and will shape the country’s future class structure, Zhou concludes. Read here

Shi Zhan on RMB Appreciation and Building a “Shadow China” Abroad (22 July)

Shi Zhan goes beyond a call for companies to invest overseas, setting out a wider architecture for China’s next phase of globalisation. His argument—including his suggestion that renminbi appreciation could attract foreign buyers of Chinese government bonds, giving Beijing additional fiscal resources with which to cushion the resulting employment pressures—is striking. But what makes the piece especially relevant to European policymakers is the tension between the emerging “Made with China” narrative and Shi’s frank admission that only the “front end” of Chinese manufacturing will move abroad. Read here

Investing in People—or Just More Things? | Economic Digest: June 2026 (14 July)

Last month’s economics digest examines whether “investing in people” signals genuine rebalancing or simply repackages the country’s long-standing preference for investment. Chinese economists connect weak demand with strained local finances, increasing reliance on government and SOE borrowing, depressed household incomes and property-sector damage. They debate remedies ranging from rural pensions and social security to debt restructuring and institutional reform. Read here

Justin Yifu Lin on Pessimism about the Chinese Economy (9 July)

Justin Yifu Lin challenges three increasingly common diagnoses of China’s slowdown: state-sector overreach, demographic ageing and balance-sheet recession. He argues that weak growth stems primarily from the prolonged global slowdown since 2008, while state-backed infrastructure has supported private firms rather than displacing them. Education can keep “effective labour” rising despite ageing, and China’s vast household deposits suggest that weak consumption reflects confidence rather than insufficient resources. Notably, he treats pessimistic economic commentary itself as a cause of weak expectations. Read here

American Decline, Chinese Exposure | Digest: June 2026 (6 July)

June’s Chinese policy debate is confident about America’s relative decline, but less relaxed about the vulnerabilities accompanying China’s own rise. This digest tracks contrasting readings of Trump’s Taiwan policy, the US–Iran agreement, Europe’s growing resistance to Chinese exports and a new phase of firms “going out”. It also looks at North Korea’s nuclear status, Russia’s demographic contraction, weak domestic demand, AI-driven job disruption, social over-competition and dependence on overseas critical-mineral supplies. Read here

Zhang Jian on China, the EU and Russia “De-Risking” from the US (3 July)

Zhang Jian turns the language of “de-risking” back on Washington. China, Russia and Europe, Zhang argues, are simultaneously reducing their exposure to American finance, technology and security power, producing the effect of a collective response to US hegemony even without any formal coordination. Trump’s return has worsened Europe’s strategic position, improved Russia’s and expanded Beijing’s room for manoeuvre. Meanwhile, the digital euro, European defence autonomy and local-currency settlement all help weaken dollar dominance and bloc politics. Zhang likely overstates both Europe’s convergence with China and Russia and the deterioration of its transatlantic ties, but a CICIR vice-president treating Western fragmentation as an opening for China is a notable signal. Read here

N.B. Sinification features a broad spectrum of voices, ranging from conservative hawks and state propagandists to more moderate and liberal thinkers. Readers are encouraged to bear this diversity in mind when engaging with the content.

The Beidaihe Break has officially started, signaled by the CCTV report on Cai Qi visiting “experts vacationing in Beidaihe”:

From the report:

The invitation by the CPC Central Committee and the State Council for outstanding experts to vacation in Beidaihe is an important institutional arrangement in the Party and state’s talent work. The theme of this year’s vacation program is “Make Contributions in the New Era.” Participants include experts in high technology and philosophy and the social sciences, as well as young talent in basic research and other fields.

党中央、国务院邀请优秀专家代表到北戴河休假，是党和国家人才工作的一项重要制度性安排。今年休假活动的主题是“建功新时代”，参加休假活动的有高科技领域、哲学社会科学领域专家和基础研究领域青年人才等。

I have yet to see an unofficial list of all the invitees. If anyone has one, please share it.

In this issue:

1. State Council executive meeting

2. Politb…

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• Fifth Plenum scheduled for October, agenda is “to study major issues concerning the unremitting advancement of full and rigorous Party self-governance”;

• Diagnosis of economic situation section includes “it is necessary to attach great importance to the difficulties and challenges in economic performance 要高度重视经济运行中的困难挑战”, which suggests increasing concern about the state of economy;

• Readout language signals at least some additional, marginal policy support, including “promptly plan and introduce practical and effective incremental policies 及时谋划出台务实管用的增量政策”

Before we get into the full readout and comparisons with recent Politburo meeting readouts on the economy, some housekeeping:

• I published this week’s episode of Sharp China earlier today. You can listen to “Memory-Maker Makes History; New Robot Rules; The Open Weights Debate Rages; End of July News and Notes” here;

• The newsletter will be taking its version of the “Beidaihe Break” after this issue, so there will be no regular issues until mid-August. I may send out some shorter issues if anything interesting is going on;

• I have used AI to assist with this post by having ChatGPT create two tables comparing relevant language in the April 2026 and July 2026 readouts and the July 2024, 2025 and 2026 readouts, and one examining policy changes after those meetings that may have been signaled by language in the readouts. Let me know if you think this use of AI is useful.

I have included a full translation of the readout below. From the opening paragraph:

The Political Bureau of the CPC Central Committee held a meeting on July 30 and decided that the Fifth Plenary Session of the 20th Central Committee of the Communist Party of China would be held in Beijing this October. Its main agenda will be for the Political Bureau of the CPC Central Committee to report its work to the Central Committee and to study major issues concerning the unremitting advancement of full and rigorous Party self-governance. The meeting analyzed and studied the current economic situation and made arrangements for economic work in the second half of the year. Xi Jinping, General Secretary of the CPC Central Committee, presided over the meeting.

新华社北京7月30日电　中共中央政治局7月30日召开会议，决定今年10月在北京召开中国共产党第二十届中央委员会第五次全体会议，主要议程是，中共中央政治局向中央委员会报告工作，研究持之以恒推进全面从严治党若干重大问题。会议分析研究当前经济形势，部署下半年经济工作。中共中央总书记习近平主持会议。

So just as the Politburo meeting last July announced the Fourth Plenum would meet in October, this one announced that the Fifth Plenum will also convene in October.

The readout is worth poring over for economic signals, but ahead of the discussion of the economy are the second and third paragraphs which go into more detail about the “unremitting advancement of full and rigorous Party self-governance”, the main agenda of the October Fifth Plenum. And since that section is about the politics, and politics is always in command, it is important, and especially since this should be the last Plenum before the 21st Party Congress next year [CORRECTION: This is sloppy, there may be a sixth plenum that matters. The one right before the party congress, usually the seventh, is usually not that meaningful. Thanks for the comments on this. Apologies]. Here is the second paragraph:

The meeting pointed out that since the 18th Party Congress, full and rigorous Party self-governance had achieved great accomplishments, opened a new frontier in the self-reform of a century-old Party, driven historic achievements and historic changes in the cause of the Party and the country, and enabled the Party and the people to gain the historical initiative in building a strong Party and a strong country. At the same time, as international, national, and Party conditions undergo profound changes, full and rigorous Party self-governance also faces many new circumstances and new problems. From the strategic height of consolidating the Party’s governing position and fulfilling its mission and tasks, the entire Party must deeply understand the great significance of unremittingly advancing full and rigorous Party self-governance; maintain firm confidence and strategic resolve; uphold and apply the valuable experience of full and rigorous Party self-governance in the new era with higher standards and more concrete measures; rectify and resolve the prominent problems confronting Party building; and consolidate and develop the favorable political environment created through managing and governing the Party.

会议指出，党的十八大以来，全面从严治党取得伟大成就，开辟了百年大党自我革命新境界，推动党和国家事业取得历史性成就、发生历史性变革，党和人民赢得强党强国的历史主动。同时，随着世情国情党情发生深刻变化，全面从严治党也面临许多新情况新问题。全党必须从巩固党的执政地位、实现党的使命任务的战略高度，深刻认识持之以恒推进全面从严治党的重大意义，坚定信心，保持定力，以更高标准、更实举措把新时代全面从严治党宝贵经验坚持好、运用好，把党的建设面临的突出问题整治好、解决好，把管党治党形成的良好政治局面巩固好、发展好。

The pressure on cadres will not lessen, and that political pressure, especially as we are well into the personnel jockeying ahead of the 2027 21st Party Congress, may spill over into policymaking and cadre behavior, in a constraining way.

In the fourth paragraph, the one that sums up economic performance so far this year, there is one interesting change in language:

The meeting held that since the beginning of this year, the CPC Central Committee with Comrade Xi Jinping at its core had united and led the entire Party and the Chinese people of all ethnic groups in forging ahead and striving courageously, coordinating the domestic and international situations and development and security, and responding effectively to various external shocks and internal difficulties. China’s economy had displayed a development trend in which growth drivers were becoming newer and the structure was improving. At the same time, it is necessary to attach great importance to the difficulties and challenges in economic performance, remain confident, confront difficulties head-on, make good use of all opportunities and advantages, and ensure that high-quality development proceeds steadily and reaches far.

会议认为，今年以来，以习近平同志为核心的党中央团结带领全党全国各族人民锐意进取、奋勇拼搏，坚持统筹国内国际两个大局，统筹发展和安全，有效应对各种外部冲击和内部困难，我国经济呈现动能向新、结构向优的发展态势。同时，要高度重视经济运行中的困难挑战，坚定信心，迎难而上，用好各种机遇和优势，推动高质量发展行稳致远。

“At the same time, it was necessary to attach great importance to the difficulties and challenges in economic performance 同时，要高度重视经济运行中的困难挑战” would be seem to be an acknowledgement that the economy is not doing well.

The relevant April 2026 readout section said “China’s economy has gotten off to a strong start, with major indicators exceeding expectations and demonstrating strong resilience and vitality. At the same time, the economy also faces some difficulties and challenges, and the foundation for sustained economic recovery and improvement still needs to be further consolidated.”

This adjusted diagnosis could open the door to new, incremental policies, and in the next paragraph it says just that - “promptly plan and introduce practical and effective incremental policies 及时谋划出台务实管用的增量政策”:

The meeting emphasized that economic work in the second half of the year must be guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; uphold the general principle of pursuing progress while ensuring stability; fully, accurately, and comprehensively apply the new development philosophy; accelerate the creation of a new development pattern; better coordinate the domestic and international situations and development and security; persist in deepening reform and opening; and accelerate the transition between old and new growth drivers. It must properly implement the more proactive fiscal policy and moderately loose monetary policy; give full play to the effectiveness of all existing policies; promptly plan and introduce practical and effective incremental policies; step up countercyclical adjustment; make greater efforts to expand domestic demand and optimize supply; earnestly safeguard and improve people’s wellbeing; strengthen the drivers of development and stimulate social vitality; promote the economy’s continued movement toward newer drivers, better structure, and stronger performance; and strive to secure a good start to the 15th Five-Year Plan.

会议强调，做好下半年经济工作，要坚持以习近平新时代中国特色社会主义思想为指导，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，坚持深化改革开放，加快推动新旧动能转换，实施好更加积极的财政政策和适度宽松的货币政策，充分发挥各项存量政策效能，及时谋划出台务实管用的增量政策，加大逆周期调节力度，加力扩大内需、优化供给，切实保障和改善民生，增强发展动力、激发社会活力，推动经济持续向新向优向好发展，努力实现“十五五”良好开局。

The readout includes language about balanced trade, so perhaps there is a recognition that the trade imbalances are becoming a real problem?

The meeting pointed out the need to expand the scope for mutually beneficial international economic and trade cooperation, vigorously develop trade in services, and promote balanced trade development. It called for improving the system for managing outward investment and the comprehensive overseas service system, and for actively attracting and utilizing foreign investment.

会议指出，要拓展国际经贸互利合作空间，大力发展服务贸易，促进贸易平衡发展。完善对外投资管理制度和海外综合服务体系，积极吸引和利用外资。

Real estate is mentioned in the risks section, as are capital markets:

The meeting emphasized the need to firmly strengthen the security barrier. It called for stabilizing the real-estate market; properly implementing the package of debt-resolution plans; making solid progress in reforming local small and medium-sized financial institutions to resolve risks, reduce their number, and improve their quality; deepening comprehensive reform of investment and financing in the capital market; and increasing the capital market’s resilience and confidence. It also called for thoroughly identifying and rectifying all types of risks and hidden dangers and resolutely preventing major and especially serious accidents. It demanded stronger investigation and remediation of hidden dangers involving unsafe reservoirs, river embankments, areas at risk of mountain torrents and geological disasters, and low-lying urban locations prone to waterlogging; solid work in flood control, emergency response, rescue, and disaster relief; and every effort to protect people’s lives and property.

会议强调，要切实筑牢安全屏障。稳定房地产市场，实施好一揽子化债方案，扎实推进地方中小金融机构改革化险、减量提质。深化资本市场投融资综合改革，提升资本市场韧性和信心。深入排查整治各类风险隐患，坚决遏制重特大事故发生。加强对病险水库、江河堤防、山洪和地质灾害危险区、城市低洼易涝点等隐患排查治理，扎实做好防汛应急抢险救灾各项工作，全力维护人民群众生命财产安全。

Ahead of the tables, here is the translation of the readout, with language I find interesting in bold.

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On today's show Andrew and Bill begin with reactions to CXMT's IPO success this week, including responses from legislators in Washington and the stakes of Apple's continued lobbying fight to relax restrictions on US companies working with PRC memory firms. Then: The FCC announces rules restricting the import of new, foreign-made robots and power inverters in a move to curb security risks and fuel onshoring. From there: Surveying the ongoing debate over the future of open weights models, including disadvantages facing US-led open source AI efforts, MOFCOM's statement on distillation and Silicon Valley's support for Chinese open weights AI, and the risks of building atop PRC AI infrastructure. At the end: Expectations for the July Politburo meeting, news out of Iran that may threaten constructive strategic stability in advance of Xi's visit to D.C., a bad few weeks for Mercedes, and more clashes between the PRC and the Philippines.

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In this issue:

1. RMB and global imbalances

2. PRC sending missiles to Iran?

3. National Plan for Addressing Climate Change During the ‘15th Five-Year Plan

4. China’s commercial space expansion

5. 6-year-old dies after Shanghai gene-editing treatment

The Feed: Business, Economy and Trade - Politics and Law - Foreign and Defense Affairs - Hong Kong - Taiwan - Tech and Media - Society, Arts, Sports, Culture and History - Energy, Environment, Science and Health -Education

Look for this week’s episode of Sharp China in your inboxes in about 11 hours. The title of this episode is “A Memory-Maker Makes History; New Robot Rules; The Open Weights Debate Rages; End of July News and Notes”.

Today’s top items:

1. RMB and global imbalances - Gita Gopinath, Pierre-Olivier Gourinchas and Hélène Rey - two former IMF chief economists and the incoming chief economic advisor at the Bank for International Settlements, respectively - wrote “Don’t blame global imbalances on t…

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1. Xi meets Slovak President

2. “Excess capacity” or “Overcapacity”?

3. CXMT IPO the day after

4. Xinhua’s mid-year review of the Chinese economy

5. Li Qiang commemorates the 50th anniversary of the Tangshan earthquake

6. National Conference on Overseas Chinese Affairs Work

7. AI and chips

8. US to ban new PRC robots

The Feed: Business, Economy and Trade - Politics and Law - Foreign and Defense Affairs - Hong Kong - Taiwan - Tech and Media - Society, Arts, Sports, Culture and History - Energy, Environment, Science and Health

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And then on or around August 1 the top leaders will disappear from public for two weeks or so for the “Beidaihe Break”, even though we do not know if they all go to the seaside resort. Last year at this time there were lots of crazy rumors about Xi and possible coups; this year the rumor mill so far has been very quiet.

Today’s top items:

1. CXMT IPO - Hefei-based DRAM memory maker ChangXin Memory Technologies (CXMT) has the second largest IPO in PRC history Monday. Its shares rose 466% on their first trading day, valuing Hefei state-owned entities’ combined 36.79% stake at more than RMB 1.2 trillion after roughly RMB 30 billion in investment over a decade.

2. Taxing…

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1. CSRC Symposium on Party Building and Regulatory Work - According to a readout today, the China Securities Regulatory Commission “held a symposium on Party building and regulatory work to thoroughly study and implement Xi Jinping Thought on Party Building, conscientiously implement the decisions and arrangements of the Fourth Plenary Session of the 20th Central Committee, the Central Economic Work Conference and other important meetings, and, in accordance with the requirements of the meeting on Party building work in the financial system, review Party building and regulatory work across the system in the first half of the year, analyze the current situation, and push to complete the year's goals and tasks.” I have posted a translation here.

The meeting was not specifically about propping up the stock market, but the first of the seven tasks the readout listed

take comprehensive measures to fully safeguard stable market operations and enhance the resilience of the c…

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1. Wang Huning tours Tibet - Wang Huning, Politburo Standing Committee member and CPPCC Chairman, inspected Tibet from July 19 to 22, Xinhua reports. Beyond Lhasa he went to Ngari Prefecture in the far west, with stops including Sera Monastery, Tholing Monastery in Zanda County, a police station, and Dianjiao Village in Gar County, a “model” border village on the LAC opposite Indian-held Demchok.

From the readout, translated here:

Wang Huning said that governing Tibet begins with stabilizing Tibet: the requirements for governing Tibet according to law must be implemented, the foundations of social governance consolidated, and a united and stable political and social situation cemented. Ethnic unity is the lifeline of the people of all China’s ethnic groups; drawing on the great achievements the Party has led the people to over 105 years since its founding, and on the earth-shaking changes on the snowy plateau in the 75 years since Tibet’s peaceful liberation, propaganda and education work on forging a strong sense of community for the Chinese nation and building the community of the Chinese nation must be carried out in ways that are tangible, felt and effective, and the drive to create a national model area for ethnic unity and progress must be deepened. The implementation of the Law on Promoting Ethnic Unity and Progress must be carried through, the capacity for administering ethnic affairs according to law raised, and all development imbued with the significance of ethnic unity and progress. In line with the requirements to systematically advance the sinicization of religion in China and strengthen law-based governance of religious affairs, Tibetan Buddhism must be continuously guided to adapt to socialist society. Protection and use of Tibet’s historical documents, archaeological artifacts and cultural remains must be strengthened, showing the historical process of exchange, interaction and integration among ethnic groups and the breadth and brilliance of Chinese civilization. The new-era campaign to invigorate border areas and enrich the people there must be advanced, gains in poverty alleviation consolidated and expanded, infrastructure in border areas strengthened, and production and living conditions for border residents improved, so that people of all ethnic groups can lead happier and better lives.

王沪宁表示，治藏首先是稳藏，要落实依法治藏要求，夯实社会治理基础，巩固团结稳定的政治和社会局面。民族团结是我国各族人民的生命线，要结合建党105周年党团结带领人民取得的伟大成就，结合西藏和平解放75周年雪域高原发生的翻天覆地变化，有形有感有效开展铸牢中华民族共同体意识、推进中华民族共同体建设的宣传教育，深化全国民族团结进步模范区创建。要抓好民族团结进步促进法贯彻实施，提高依法治理民族事务能力和水平，推动所有发展赋予民族团结进步的意义。要按照系统推进我国宗教中国化、加强宗教事务治理法治化的要求，不断引导藏传佛教与社会主义社会相适应。要加强对西藏历史文献、考古实物、文化遗存等的保护利用，展现各民族交往交流交融历史进程，展现中华文明的博大灿烂。要推进新时代兴边富民行动，巩固拓展脱贫攻坚成果，加强边境地区基础设施建设，改善边境群众生产生活条件，让各族群众过上更加幸福美好的生活。

He called for propaganda and education on “forging a strong sense of community for the Chinese nation” (铸牢中华民族共同体意识) pegged to two anniversaries — 105 years of the Party and 75 years since Tibet’s “peaceful liberation” — and for implementing the new Law on Promoting Ethnic Unity and Progress, in effect since July 1. Wang gave a similar instruction in Xinjiang June 5-9, making Tibet the second stop in six weeks on what looks like a PBSC implementation tour for the law. Is Inner Mongolia next?

2. Wang Yi and Marco Rubio meet in Manila - The two met on the sidelines of the ASEAN Foreign Ministers' Meeting in Manila. Both readouts made the meeting sound constructive, and the plans for Xi to visit DC in September are on track. From the Xinhua readout, translated here:

The two sides agreed that this meeting was pragmatic, positive, and constructive, and agreed to jointly implement the important consensus reached by the two heads of state, give play to the role of political and diplomatic channels, prepare well for high-level exchanges in the next stage, and push for substantive progress in the constructive China-US relationship of strategic stability.

双方认为，此次会晤务实、积极、富有建设性，同意共同落实两国元首达成的重要共识，发挥政治外交渠道作用，筹备好下阶段高层交往，推动中美建设性战略稳定关系取得实质进展。

From Rubio’s remarks to the media:

Well, we talked a lot about the visit in September, and that was really the gist of it. It was just to create the groundwork for another positive visit. I think President Xi will have a very positive visit when he comes to Washington.

Look, these are the two most powerful countries in the world, particularly economics, but also – I mean, we have to have a relationship. And obviously, there are areas of great differences. Both sides will acknowledge that. We’ll have to work through those. And I think these differences will exist for the foreseeable future, and our job is to sort of manage those so that they never get out of control.

3. PRC-Philippines - Wang Yi met with Philippine Secretary of Foreign Affairs Lazaro. According to the Xinhua readout Wang expressed a “strong protest” about the recent clash at Second Thomas Shoal/Ren’ai Jiao and blamed “certain forces in the military and police departments…carrying out the wishes of external forces”:

Wang Yi, member of the Political Bureau of the CPC Central Committee and Foreign Minister, met at the latter’s request with Philippine Secretary of Foreign Affairs Lazaro on the 22nd in Manila on the sidelines of the East Asia cooperation foreign ministers’ meetings, setting out China’s stern position to the Philippine side and expressing strong protest against the crude action of Philippine personnel ramming a Chinese law-enforcement vessel at Ren’ai Jiao (Second Thomas Shoal).

新华社马尼拉7月22日电（记者李萌 赵晨捷）中共中央政治局委员、外交部长王毅22日在马尼拉出席东亚合作系列外长会期间应约会见菲律宾外长拉扎罗，向菲方阐明中方严正立场，对菲方人员在仁爱礁冲撞中方执法船只的粗暴行径表示强烈抗议。

Wang Yi said that over the past few years, China-Philippines relations have continuously faced difficulties and challenges; this clearly does not accord with the interests of either side, and it does even more harm to the Philippines’ own development. Facing a world of intertwined change and turmoil, we should have been jointly safeguarding the hard-won situation of peace and development in this region, but the Philippines’ actions have run counter to those of other countries in the region, making it a source of disruption to regional peace and stability. Facts have proven that allowing external forces to interfere and intervene, and deliberately hyping up and enlarging maritime differences, will only reduce one to a tool used by others. Those who attempt to provoke trouble by relying on countries from outside the region will in the end only swallow the bitter fruit of their own making. Regrettably, whenever China and the Philippines are about to conduct dialogue, there are people within the Philippines — in particular certain forces in the military and police departments — who deliberately manufacture incidents to sabotage the advancement of dialogue. These people harbor ill intentions; what they think about is not the welfare of the Philippine people but carrying out the wishes of external forces, while also seeking their own private gain. At present, China-Philippines relations stand at a crossroads, and which way they go requires the Philippine side to make the correct and rational choice.

王毅表示，过去几年，中菲关系持续面临困难挑战，这显然不符合双方利益，更有损菲律宾自身发展。面对变乱交织的世界，我们本应共同维护本地区得来不易的和平发展局面，但菲律宾的做法却与其他地区国家背道而驰，成为地区和平稳定的干扰源。事实证明，任由外部势力干涉介入，蓄意炒作扩大海上分歧，只会沦为被人利用的工具。如果试图借助域外国家挑衅滋事，最后只能吞下自己酿成的苦果。遗憾的是，每当中菲双方要开展对话时，菲国内就有人特别是军警部门一些势力，蓄意制造事端，破坏对话的推进。这些人居心不良，他们想的不是菲人民的福祉，而是执行外部势力的旨意，也是在谋取个人的私利。当前，中菲关系站在十字路口，何去何从需要菲方作出正确理智选择。

The clash, and the disgusting monkey video from China Daily, did not help China at the ASEAN meeting.

4. US government to go after Moonshot for Kimi K3? - The head of the White House Office of Science and Technology Policy, the Treasury Secretary and a senior State Department official all tweeted similar things about Kimi and distillation today. Secretary Bessent was most specific about possible policy responses - ”sanctions and Entity List designations will be on the table”.

Kratsios, the head of the OSTP, accused Moonshot of “a sophisticated internal platform to conduct large scale distillation against U.S. models, allowing them to quickly switch between multiple methods of access to avoid detection. Moonshot AI has also acquired GB300-equipped servers and has accessed GB300s in Thailand, likely to train its AI models.”

Moonshot should release the K3 open weights and details about what infrastructure K3 trained on.

The debate about PRC models and distillation is breaking brains throughout Silicon Valley and the AI community, with many arguing the US government is at risk of regulatory capture by Anthropic and OpenAI, and instead should just focus on competing, and anyway the US frontier labs are all built on the distillation of human knowledge so who are they to whinge about being distilled.

If the US officials are making the argument to President Trump that the Chinese labs are ripping America off and risk crashing the stock market by undermining investor confidence in the AI boom that is driving the stock market, the odds of US government actions against some of these labs are high, no matter what David Sacks and other Silicon Valley leaders, including Nvidia’s Jensen Huang, try to argue. But the debate is far from over, and do not be surprised if Sacks and Huang show up in DC soon to make the opposing arguments.

5. H1 fiscal revenue and expenditure data - According to the Ministry of Finance announcement today, translated here:

In the first half of the year, national general public budget revenue was 12.1047 trillion yuan, up 4.7% year-on-year. Of this, national tax revenue was 9.7865 trillion yuan, up 5.3% year-on-year; non-tax revenue was 2.3182 trillion yuan, up 2.3% year-on-year. Broken down by central and local government, central general public budget revenue was 5.224 trillion yuan, up 7.5% year-on-year; local general public budget revenue at the local level was 6.8807 trillion yuan, up 2.7% year-on-year.

上半年，全国一般公共预算收入121047亿元，同比增长4.7%。其中，全国税收收入97865亿元，同比增长5.3%；非税收入23182亿元，同比增长2.3%。分中央和地方看，中央一般公共预算收入52240亿元，同比增长7.5%；地方一般公共预算本级收入68807亿元，同比增长2.7%。

Bloomberg did its own analysis and reports that China Cuts Government Spending 11.9% in June as Fiscal Tightening Deepens:

A broad measure of expenditure tumbled 11.9% in June from a year earlier, according to Bloomberg calculations based on Ministry of Finance data released Wednesday. By contrast, broad fiscal revenue gained 1.8%.

That took the broad deficit in the first half to 4.57 trillion yuan ($675 billion), 13% less than a year earlier.

Perhaps the Politburo meeting next week will reverse that trend?

The tax authorities are getting better at squeezing high-income individuals, per Yicai:

Individual income tax grew rapidly in the first half (13.1%), returning to the position of third-largest tax. Huang Lixin, director of the Tax Science Research Institute of the State Taxation Administration, said earlier that the fast growth in individual income tax revenue this year has three main causes: first, an active capital market has driven high-speed growth in related income categories; second, tax payments in some industries have grown quickly; and third, tax authorities’ continued efforts to guide and regulate tax compliance by high-income individuals have added revenue.

今年上半年个人所得税保持较快增长（13.1%），重新回到第三大税种位置。国家税务总局税收科学研究所所长黄立新此前表示，今年以来个人所得税收入增长较快主要有三个原因：一是资本市场活跃带动相关所得项目高速增长；二是部分行业缴税增长较快；三是税务机关持续加强高收入人员纳税引导规范带来增收。

And the stock market boom has been good for revenue, with stamp duty revenue up 97%. But land and property-related revenue keeps shrinking, per the Economic Observer:

Growth in land- and property-related taxes is still sliding. Land appreciation tax was 214.6 billion yuan, down 15.3% year-on-year; farmland occupation tax was 83 billion yuan, down 3.5%. A declining land appreciation tax usually signals pressure on new home sales, weak developer appetite for land acquisition and new construction starts, and a downturn in the new-home development chain; the decline in farmland occupation tax means developers are unwilling to take on new residential land.

涉及土地和房地产市场的土地增值税和耕地占用税增速还在下滑。其中，土地增值税2146亿元，同比下降15.3%，耕地占用税830亿元，同比下降3.5%。土地增值税下滑通常意味着商品房销售承压、房企拿地和新开工意愿偏弱，新房开发链条景气度下行；耕地占用税的下降则意味着，房企不愿拿新增住宅用地。

Wang Zhenyu judges that for a period to come, land sale revenue (land finance) still has a probability of continuing to decline, and rational expectations should be prepared.

王振宇判断，未来一个时段，土地出让收入（土地财政）还存在继续下行的概率，需要做好理性预期准备。

“Rational expectations should be prepared” sounds like “there is no bottom in sight” for the property market?

Thanks for reading.

1. Wang Huning tours Tibet

Wang Huning Stresses During Tibet Inspection: Fully Implement the Party’s Strategy for Governing Tibet in the New Era, Strive to Advance Tibet’s Modernization During the 15th Five-Year Plan Period - Translation

Politburo Standing Committee member and CPPCC National Committee Chairman Wang Huning conducted an inspection in Tibet from July 19 to 22. He said it is necessary to thoroughly implement the spirit of the Fourth Plenum of the 20th Central Committee, implement General Secretary Xi Jinping’s important expositions on Tibet work and the Party’s strategy for governing Tibet in the new era, keep a firm grip on the four major tasks of stability, development, ecology and strengthening the borders, and strive during the 15th Five-Year Plan period to advance the building of a new modern socialist Tibet.

新华社拉萨7月22日电（记者丁小溪）中共中央政治局常委、全国政协主席王沪宁7月19日至22日在西藏调研。他表示，要深入贯彻落实党的二十届四中全会精神，贯彻落实习近平总书记关于西藏工作的重要论述和新时代党的治藏方略，持续抓好稳定、发展、生态、强边四件大事，在“十五五”时期奋力推进社会主义现代化新西藏建设。

Wang Huning traveled to Lhasa and Ngari prefecture, visiting Lhasa’s Unity Park and Sera Monastery, Sexiong Square in Purang County of Ngari, Tholing Monastery, a moderately prosperous village, a police station and a health center in Zanda County, and Dianjiao Village in Gar County, learning about social stability, ethnic unity, monastery management, the campaign to invigorate border areas and enrich the people there, and the protection of history and culture, and holding discussions with cadres and members of the public of all ethnic groups.

王沪宁来到拉萨市、阿里地区调研，前往拉萨团结公园、色拉寺，阿里地区普兰县色雄广场，札达县托林寺、小康村、派出所、卫生院，噶尔县典角村等，了解社会稳定、民族团结、寺庙管理、兴边富民、历史文化保护等情况，并同各族干部群众座谈交流。

Accelerate the Construction of a Scientific and Complete Theoretical System of the Chinese National Community

Study Times 学习时报, July 22, 2026, page 1 | Byline: Chu Songyan 褚松燕 The author is director of the United Front Work Teaching and Research Department of the Central Party School (National Academy of Governance)

As historical materials and sources continue to be excavated and uncovered, and as exchanges and contacts among the civilizations of human society continue to deepen, research into the origins, present reality, and development of the objective world also continues to deepen; bringing forth the new through the old has already become both inevitable and necessary. Research on the Chinese national community necessarily requires tracing things to their roots and clarifying them at the source while based on Chinese soil, and unfolding in depth on different questions, especially foundational ones. Constructing the theoretical system of the Chinese national community requires that, on the basis of optimizing disciplinary arrangements, we strengthen discipline construction, deepen research on major foundational questions arising from major real-world problems and challenges, and produce a steady stream of original theoretical results, so as to construct with high quality a scientific and complete theoretical system of the Chinese national community and provide good answers to the questions of China, the questions of the world, the questions of the people, and the questions of the times.

随着史料资料的不断挖掘发掘，随着人类社会文明间交往交流的不断深入，对客观世界的由来、现实和发展的研究也在不断深入，推陈出新，已经是必然和必需。中华民族共同体研究必然要求立足中国大地追根溯源、正本清源，针对不同问题特别是基础性问题深入展开。构建中华民族共同体理论体系要在优化学科设置的基础上，加强学科建设，从重大现实问题和挑战中深化重大基础性问题研究，源源不断推出原创性理论成果，高质量构建科学完备的中华民族共同体理论体系，回答好中国之问、世界之问、人民之问、时代之问。

王沪宁在西藏调研

CCTV report on Wang’s visit to Tibet

2. Wang Yi and Marco Rubio meet in Manila

Wang Yi Meets US Secretary of State Rubio - Translation

Wang Yi, member of the Political Bureau of the CPC Central Committee and Foreign Minister, met with US Secretary of State Rubio in Manila on the 22nd.

新华社马尼拉7月22日电（记者赵晨捷 李萌）中共中央政治局委员、外交部长王毅22日在马尼拉会见美国国务卿鲁比奥。

Wang Yi said that this year is a “big year” for China-US relations. The two heads of state successfully held a historic meeting in Beijing, established the positioning of a constructive China-US relationship of strategic stability, and set out the direction for the two sides’ joint efforts. This is important progress made by China and the United States, two major countries, in exploring a path of peaceful coexistence; it accords with the fundamental interests of the two peoples and with the common expectations of the international community. Our responsibility now is to follow the track set by the two heads of state, eliminate interference and overcome obstacles, and ensure that the leaders’ consensus is transformed into whole-of-government, all-domain consensus and action — using China-US strategic stability to promote peace and tranquility in the world, and using constructive China-US interaction to provide important impetus for international cooperation. Wang Yi also set out China’s stern position on a series of recent negative words and deeds by the US side, demanding that the US respect China’s core interests, abide by the one-China principle, earnestly manage contradictions and differences, and address China’s legitimate concerns, so that this year of opportunity for China-US relations becomes reality.

王毅表示，今年是中美关系的“大年”。两国元首在北京成功举行历史性会晤，确定了中美建设性战略稳定关系的定位，提出了双方共同努力的方向。这是中美两个大国在探索和平共处道路上取得的重要进展，符合两国人民根本利益，符合国际社会共同期待。现在我们的责任是，沿着两国元首设定的轨道，排除干扰、克服障碍，确保将领导人的共识转化为全政府、各领域的共识和行动，以中美的战略稳定促进世界的和平安宁，以中美的建设性互动为国际合作提供重要动力。王毅还就近期美方的一系列消极言行阐明中方严正立场，要求美方尊重中国的核心利益，恪守一个中国原则，切实管控矛盾分歧，解决中方正当关切，让中美关系的机遇之年照进现实。

The two sides also exchanged views on international and regional hotspot issues.

双方还就国际地区热点问题交换了意见。

Secretary of State Marco Rubio Remarks to the Press - United States Department of State

SECRETARY RUBIO: Well, we talked a lot about the visit in September, and that was really the gist of it. It was just to create the groundwork for another positive visit. I think President Xi will have a very positive visit when he comes to Washington.

Look, these are the two most powerful countries in the world, particularly economics, but also – I mean, we have to have a relationship. And obviously, there are areas of great differences. Both sides will acknowledge that. We’ll have to work through those. And I think these differences will exist for the foreseeable future, and our job is to sort of manage those so that they never get out of control.

We’re, obviously, always going to defend our national interest. And I expect they’ll do the same, as they define it. But I think there are some areas of potential cooperation. So the work we need to do between now and September is to identify what those areas are so that we can lay the groundwork for a very positive visit to Washington, and – in September. And so we talked a lot about that.

QUESTION: Was there disagreement on election interference?

SECRETARY RUBIO: We didn’t discuss that topic.

QUESTION: Mr. Secretary, are China and Russia giving targeting information to Iran? These last few attacks have been very devastating to U.S. troops.

SECRETARY RUBIO: Look, all I would say is that anytime you’re in a combat zone like that, there’s danger associated with it. I mean, at the end, this actually proves the point that this is what Iran has been investing its money in for the last 20 years.

QUESTION: But are China and Russia giving targeting information to them?

SECRETARY RUBIO: I’m not going to discuss that, other than to say that nothing that’s happened – no – nothing that China has done has in any way changed the trajectory of the – of what you’re seeing in terms of the conflicts we’re having with Iran. And in fact, in some cases, they’ve actually been quite cooperative —...

It’s important to – if you go back to the height of the Cold War, even in the height of the Cold War, even in its most tense moments, the United States and the Soviet Union were – communicated, at least at a military-to-military level and even at a diplomatic level, and in many ways that prevented catastrophe. So I’m not saying we’re at that stage with China, but what I am saying is it would, frankly, be reckless and irresponsible for the U.S. and China not to have a relationship, given the impact and the – our countries have on the global economy and on the world.

QUESTION: Did you discuss with China, with Minister Wang Yi, the working group, or any more details of the Board of Trade, Board of Investment, any of these other ideas?

SECRETARY RUBIO: Yes, we did. We did, and we’re moving towards implementation of that, and I think that’s one of the potential concrete deliverables that we can have before September when that visit happens. And again, those are good ideas, and they come in the aftermath of the visit we took to China earlier this year. And so we did discuss that, yes.

3. PRC-Philippines

Wang Yi Meets Philippine Foreign Secretary Lazaro - Translation

Wang Yi stressed that in developing China-Philippines relations, the key is to grasp the correct direction. China has never been a security threat to the Philippines and has never in history invaded or colonized the Philippines. The existence of territorial and maritime delimitation disputes between China and the Philippines is an objective fact. China has always been committed to managing differences and stabilizing the situation through bilateral dialogue and consultation. But the Philippine side abandoned the bilateral negotiation channel and, at the instigation of forces from outside the region, threw together the makeshift outfit of a temporary “arbitral tribunal” and concocted and hyped an illegal and invalid so-called “award,” which China from the very beginning did not accept and did not participate in, and will certainly never recognize. The Philippine side should immediately cease its provocative actions on maritime issues, abide by the commitments it has made to China to date, and make concrete efforts to stabilize bilateral relations.

王毅强调，发展中菲关系，关键要把握正确方向。中国从来不是菲律宾的安全威胁，历史上从未侵略或殖民过菲律宾。中菲存在领土和海洋划界争议是客观事实。中方始终致力于通过双边对话协商管控分歧、稳定局势。但菲方却背离双边谈判渠道，在域外势力怂恿下，搭了个临时“仲裁庭”的草台班子，炮制炒作非法无效的所谓“裁决”，中方从一开始就不接受、不参与，更不会承认。菲方应立即停止在涉海问题上的挑衅行为，恪守迄今对中方作出的承诺，为稳定双边关系作出切实努力。

Lazaro said that Philippines-China exchanges have a long history, and the two are neighbors that cannot be moved apart. The Philippines has always pursued a one-China policy and honors the commitments made at the establishment of diplomatic relations; there is only one China in the world, and Taiwan is an inalienable part of China’s territory. The Philippine side hopes through dialogue to find an appropriate way to resolve maritime issues and to strive to achieve an improvement in bilateral relations.

拉扎罗表示，菲中交往历史悠久，是搬不走的邻居。菲方始终奉行一个中国政策，履行建交承诺，世界上只有一个中国，台湾是中国领土不可分割的一部分。菲方希望通过对话，寻找涉海问题的妥善解决办法，争取实现两国关系的改善。

PH raises Ayungin attack, China Daily monkey video in talks with Wang Yi - newswatchplus.ph

The Philippines raised its strongest concerns yet over China’s recent actions in the West Philippine Sea during high-level talks Tuesday, July 22, protesting the violent confrontation at Ayungin Shoal, the depiction of Filipinos as monkeys in a Chinese state media video, and Beijing’s continued presence at Bajo de Masinloc.

Foreign Affairs Secretary Ma. Theresa Lazaro conveyed Manila’s positions during a bilateral meeting with Chinese Foreign Minister Wang Yi on the sidelines of the ASEAN Foreign Ministers’ Meetings at the Philippine International Convention Center in Pasay City. The meeting marked the first bilateral engagement at the foreign minister level between the two countries in two years.

According to the Department of Foreign Affairs, Lazaro reiterated the Philippines’ “strong protest” over the violent actions of China Coast Guard personnel against Philippine Navy personnel during a resupply mission to Ayungin Shoal on July 20.

Lazaro reiterated the Philippines’ call for the removal of China’s remaining structures at Bajo de Masinloc.

The DFA said Lazaro also raised the China Daily video that depicted Filipinos as monkeys, telling Wang that disagreements over legal and political issues “do not justify resorting to disturbing imagery.”

She described the portrayal as “deeply offensive, distressing, and unacceptable.”

Another PRC diplomat tries to downplay the monkey video:

Xinhua Commentary: Manila’s distortion campaign changes nothing on South China Sea

Every new provocation by Manila serves the same purpose: to maintain an unlawful presence there while obscuring who triggered the dispute in the first place. That also explains why every maritime incident is quickly followed by a misinformation campaign.

Earlier this month, the Philippines joined hands with some external countries in a statement to revive the so-called “South China Sea arbitration award” a decade after its release, despite its lack of legitimacy and the absence of any regional consensus surrounding it.

By doing so, the Philippines aims to magnify a dispute of its own making into a geopolitical flashpoint.

China, ASEAN push for cooperation, COC progress amid Philippines-provoked frictions - Global Times

According to Xu Liping, director of the Center for Southeast Asian Studies at the Chinese Academy of Social Sciences, at successive ASEAN diplomatic gatherings, a handful of countries keep hyping South China Sea issue with similar tactics in a bid to undermine China-ASEAN relations. Certain non-regional nations also attempt to exploit the South China Sea issue to contain China.

“As ASEAN’s rotating chair for this year, Manila’s relevant moves mismatch its status,” said Xu, “By roping in outside forces to stir up trouble in the South China Sea and stoking bloc confrontation, the Philippines runs counter to ASEAN’s collective interests.”

4. US government to go after Moonshot for Kimi K3?

China’s ‘AI for All’ Push Defies US Containment Playbook - Bloomberg

The dispute also shows how China may be turning on its head a strategy first outlined by Commerce Secretary Howard Lutnick. Starting last year, Lutnick sought to keep Chinese developers “addicted” to the American technology stack while keeping a US edge — by advocating sales of Nvidia Corp. chips that were a step down from its most advanced products.

Chinese developers, however, are now creating a dependency of their own. Their inexpensive models are becoming embedded in the work of American startups, researchers and AI infrastructure providers, potentially leaving US companies vulnerable to any attempt by Washington to sever those links.

Axios Exclusive: Nvidia’s Jensen Huang defends Chinese AI amid Kimi panic

When it comes to policy, Huang believes restricting open models in the name of national security could leave America more vulnerable.

He rejected the “misconception” that downloaded Chinese models create a “backdoor” to Beijing, arguing that companies can customize them and control their access inside secure “sandboxes.”

Huang suggested openness makes AI more secure, not less, because outside researchers can inspect the models, expose weaknesses and build defenses.

“If everything just becomes one single model, one single point of attack, one single source of failure, I think the world is much, much more vulnerable,” he said.

OpenAI President Says Kimi K3 ‘Pretty Good,’ Unsure If Distilled - Bloomberg

“It’s a pretty good model,” Brockman said in an interview on Tuesday, referring to the release days earlier of Moonshot’s more advanced Kimi K3. “There’s no question about it.”

The OpenAI co-founder said it’s “too early” to tell whether Moonshot may have illicitly extracted results from OpenAI’s models to improve its own through a process known as distillation. “This is something we do always monitor for,” he said.

AI Under Heaven—01 - by Alex Colville

New newsletter on China AI by Colville, Australian Strategic Policy Institute (ASPI)


In his speech, Xi did not mention “open-source” per se, but instead a four-character political slogan, “open source and openness” (开源开放).

The slogan itself first appears along with the first official Chinese policy document on AI from 2017, which sketches out China’s international policy for the technology, and seems to be a broad term referring to sharing any research or technology that could contribute to China’s AI development. It is still interpreted this way by state media: Xinhua used it in March to talk about open-sourcing AI chip architecture.

So what Xi promised in his WAIC speech actually has more to do with the idea of open-source, rather than specifically guaranteeing frontier AI models will always be open-source. They may be part of it, but I would argue the term is broad and vague enough to allow for frontier AI models to be taken off the table should the need arise.

5. H1 fiscal revenue and expenditure data

Ministry of Finance - Fiscal Revenue and Expenditure in the First Half of 2026 - Translation

In the first half of the year, national general public budget revenue was 12.1047 trillion yuan, up 4.7% year-on-year. Of this, national tax revenue was 9.7865 trillion yuan, up 5.3% year-on-year; non-tax revenue was 2.3182 trillion yuan, up 2.3% year-on-year. Broken down by central and local government, central general public budget revenue was 5.224 trillion yuan, up 7.5% year-on-year; local general public budget revenue at the local level was 6.8807 trillion yuan, up 2.7% year-on-year.

上半年，全国一般公共预算收入121047亿元，同比增长4.7%。其中，全国税收收入97865亿元，同比增长5.3%；非税收入23182亿元，同比增长2.3%。分中央和地方看，中央一般公共预算收入52240亿元，同比增长7.5%；地方一般公共预算本级收入68807亿元，同比增长2.7%。

China Cuts Government Spending 11.9% in June as Fiscal Tightening Deepens - Bloomberg

China’s public spending plunged last month by the most since October, suggesting the government tightened fiscal policy further despite increasing calls for more support as economic growth slips.

Economists see fiscal policy stepping up in H2, with infrastructure support and incremental measures expected 专家研判下半年财政将加力：基建托底与增量政策可期 Yicai 第一财经 · July 21, 2026 · Chen Yikan 陈益刊

Economists interviewed by Yicai expect a heavier fiscal push in the second half after growth slowed from 5% in the first quarter to 4.3% in the second, with first-half growth at 4.7%. Standard Chartered’s Ding Shuang says spending was front-loaded into Q1 and then tightened: in April and May combined, general public budget revenue rose 6.6% year-on-year against a full-year target of 2.2% while spending fell 2.4% against a 4.4% target, and the broad deficit for those two months was the smallest for the period in three years. Broad fiscal spending fell 0.3% in the first five months. Yuekai Securities’ Luo Zhiheng attributes the dip to timing and the property adjustment rather than weaker policy. CCXI’s Yuan Haixia expects incremental measures in September or October, after the late-July Politburo meeting.

广义财政上半年支出超18万亿，下半年发力空间更大

Yicai - Broad Fiscal Spending Topped 18 Trillion in H1, With More Room to Step Up in H2

Tang Zaifu, deputy director of the Ministry of Finance’s Budget Department, said at the press conference on first-half fiscal figures that, judging from first-half implementation, all fiscal policies are progressing smoothly and have played a positive role in guaranteeing the implementation of major national strategic tasks, safeguarding and improving people’s livelihoods, and promoting the stable operation of local finances. Next, the ministry will continue to implement the more proactive fiscal policy well — for example, pushing established policies to be implemented, reasonably accelerating the pace of fund use, continuing to support the expansion of effective investment, tapping consumption potential, strengthening livelihood guarantees, and promoting stable operation of grassroots finances.

财政部预算司副司长唐在富在上半年财政收支新闻发布会上表示，从上半年执行情况看，各项财政政策进展顺利，在保障国家重大战略任务落实、保障和改善民生、促进地方财政平稳运行等方面发挥了积极作用。下一步财政部将继续实施好更加积极财政政策，比如推动各项既定政策落地实施，合理加快资金使用进度，持续支持扩大有效投资，挖掘消费潜力，强化民生保障，促进基层财政平稳运行。

一文读懂上半年全国财政数据：收入增速与经济增速同步

Yica - Understanding H1 National Fiscal Data in One Article: Revenue Growth Now in Sync with Economic Growth

Taxes are called the “barometer of the economy.” Ministry of Finance data show that tax revenue within national general public budget revenue was about 9.8 trillion yuan in the first half, up 5.3% year-on-year — markedly higher than last year’s full-year growth (0.8%) and the same period last year (-1.2%). Steady tax growth also reflects stable economic performance.

税收被称为“经济晴雨表”。财政部数据显示，今年上半年全国一般公共预算收入中的税收收入约9.8万亿元，同比增长5.3%。这一增速明显高于去年全年（0.8%）和去年同期（-1.2%）。税收稳定增长，也折射出经济运行稳定。

Looking at the main tax categories, domestic VAT — the largest tax — kept growing in the first half (6%), driven mainly by continued growth in industry and services and rising producer prices. The second-largest tax, corporate income tax, also grew (3.9%), which is tied to growth in corporate profits...

从主要税种来看，上半年第一大税种国内增值税保持增长（6%），这主要受工业服务业持续增长、工业生产者出厂价格上行等带动。第二大税种企业所得税也实现增长（3.9%），这也与企业利润增长有关。

Individual income tax grew rapidly in the first half (13.1%), returning to the position of third-largest tax. Huang Lixin, director of the Tax Science Research Institute of the State Taxation Administration, said earlier that the fast growth in individual income tax revenue this year has three main causes: first, an active capital market has driven high-speed growth in related income categories; second, tax payments in some industries have grown quickly; and third, tax authorities’ continued efforts to guide and regulate tax compliance by high-income individuals have added revenue.

今年上半年个人所得税保持较快增长（13.1%），重新回到第三大税种位置。国家税务总局税收科学研究所所长黄立新此前表示，今年以来个人所得税收入增长较快主要有三个原因：一是资本市场活跃带动相关所得项目高速增长；二是部分行业缴税增长较快；三是税务机关持续加强高收入人员纳税引导规范带来增收。

上半年财政支出超14万亿元！重点保障民生、科技领域

Securities Times - H1 Fiscal Spending Topped 14 Trillion Yuan! Priority Support for Livelihood and Science & Technology Areas

In the first half of this year, China’s fiscal operations were generally stable, revenue grew steadily, and spending was generally front-loaded. First-half 2026 fiscal data released by the Ministry of Finance on July 22 show national general public budget revenue of 12.1 trillion yuan, up 4.7% year-on-year, with the cumulative growth rate rising month by month; national general public budget expenditure was 14.33 trillion yuan, up 1.5% year-on-year, maintaining the necessary spending intensity...

今年上半年，我国财政运行总体平稳，收入实现平稳增长，支出总体保持靠前发力。财政部7月22日公布的2026年上半年财政收支数据显示，上半年全国一般公共预算收入为12.1万亿元，同比增长4.7%，累计增幅逐月提高；全国一般公共预算支出为14.33万亿元，同比增长1.5%，保持必要支出力度。

Judging from fiscal policy implementation, all fiscal policies progressed smoothly in the first half, playing a positive role in advancing major national strategic tasks, safeguarding and improving people’s livelihoods, and promoting stable operation of local finances. By the end of June, 9.4 trillion yuan of central transfer payments to localities had been allocated — 90.3% of the initial annual budget, 0.5 percentage points faster than the same period last year.

从财政政策执行情况看，上半年各项财政政策进展顺利，在推动国家重大战略任务落实，保障和改善民生，促进地方财政平稳运行等方面发挥积极作用。截至6月末，中央对地方转移支付已下达9.4万亿元，占年初预算的90.3%，下达进度较上年同期提高0.5个百分点。

Recently, some media reported that in the first quarter of 2026 every province’s fiscal self-sufficiency rate was below 100%, with no province achieving fiscal self-balance — content that triggered market misreadings. Tang Zaifu offered a clarification at the press conference.

近期，有媒体反映2026年一季度所有省份的财政自给率低于100%，无一省份实现财政自平衡，相关内容引发市场误读。对此，唐在富在发布会上作出澄清。

Tang Zaifu noted that the fiscal self-sufficiency rate is the ratio of a region’s general public budget revenue to its general public budget expenditure. Under China’s budget system, the sources of local general public budget spending include not only a locality’s own general public budget revenue but also transfer payments from higher levels, funds transferred in from the government fund budget and the state capital operations budget, and carryover balances from the prior year.

唐在富指出，财政自给率是指一个地区一般公共预算收入与一般公共预算支出的比值。按照我国预算制度，地方一般公共预算支出来源中，除自身一般公共预算收入外，还包括上级转移支付、从政府性基金预算和国有资本经营预算调入资金、使用上年结转结余等。

“Since local general public budget revenue is only one source of spending, a fiscal self-sufficiency rate below 100% is the norm. Even though local fiscal self-sufficiency rates are below 100%, the central government has increased transfer payments to localities, so local finances can achieve balance between revenue and expenditure,” Tang said.

“由于地方一般公共预算收入只是支出的来源之一，财政自给率低于100%是常态。尽管地方财政自给率低于100%，但中央财政加大了对地方的转移支付力度，地方财政可以实现收支平衡。”唐在富说。

中国财政“半年报”：印花税暴增97%，“投资于人”支出持续增长 - 经济观察网 － 专业财经新闻网站

Economic Observer- China’s Fiscal “Half-Year Report”: Stamp Duty Surges 97%, “Investing in People” Spending Keeps Growing

On July 22, the Ministry of Finance held a press conference on fiscal revenue and expenditure in the first half of 2026.

7月22日，财政部召开2026年上半年财政收支情况新闻发布会，介绍2026年上半年财政收支情况。

Ministry data show first-half national general public budget revenue of 12,104.7 billion yuan, up 4.7% year-on-year, and expenditure of 14,332.9 billion yuan, up 1.5%.

财政部数据显示，上半年，全国一般公共预算收入121047亿元，同比增长4.7%；支出143329亿元，同比增长1.5%。

Wang Zhenyu, dean of the Local Public Finance Research Institute at Liaoning University, analyzed that the data show general public budget revenue in recovery-driven growth, with revenue from the main tax categories trending healthy while property-related taxes fell short of expectations. He believes that in the second half, China should continue to implement a proactive fiscal spending policy, ensure the necessary spending intensity, and exercise counter-cyclical adjustment.

辽宁大学地方财政研究院院长王振宇分析，从数据来看，一般公共预算收入在恢复性增长，主体税种收入增长趋于良性，涉及房地产的税收不及预期。他认为，下半年，要继续实施积极的财政支出政策，确保必要的支出强度，发挥逆周期的调节作用。

Within the government fund budget, revenue from the transfer of state-owned land use rights was 977.8 billion yuan, down 31.5% year-on-year in the first half — the biggest first-half decline in nearly a decade...

政府性基金预算中，国有土地使用权出让收入9778亿元，上半年同比下降31.5%，这一降幅创下近十年上半年同期历史新高。

Business, Economy and Trade

CSRC - Chairman Wu Qing Meets John Graham, President and CEO of Canada Pension Plan Investment Board - Translation Wu Qing said that amid a complex and volatile international situation, China’s economy has run generally steadily in the first half of this year, maintained a trend of developing toward the new and the better, and demonstrated resilience and vitality. The CSRC will adhere to seeking progress while maintaining stability, resolutely safeguard the stable and healthy operation of the capital market, steadily expand high-standard institutional opening, and continue to improve the convenience of foreign participation in the capital market. International institutional investors, including CPPIB, are welcome to expand their investment in China and share in the dividends of China’s economic and capital market reform and development. 吴清表示，在复杂多变的国际形势下，今年上半年中国经济运行总体平稳，保持向新向优发展态势，展现出韧性与活力。中国证监会将坚持稳中求进，坚决维护资本市场平稳健康运行，稳步扩大高水平制度型开放，持续提升外资参与资本市场的便利度。欢迎包括加拿大养老基金投资公司在内的国际机构投资者扩大对华投资，共享中国经济和资本市场改革发展红利。

Wednesday markets not impressed with the Tuesday meeting comments:

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1. Stock market rescue progress - The government intervention to prop up stock prices worked Tuesday. The Shanghai Composite closed up 1.8% at 3,864.37, the Shenzhen Component up 4.8% at 14,264.29, while the ChiNext and STAR Market indexes jumped 7.1% and 8.8% to 3,685.97 and 2,060.48.

Members of the Party Group of the China Securities Regulatory Commission (CSRC) held another symposium Tuesday “to solicit opinions and suggestions from various parties on promoting the stable and healthy development of the capital market”. According to the CSRC readout, translated here, “twenty-nine representatives from listed companies, securities and fund institutions, and the ranks of experts and scholars took part”. Quant funds should expect more regulation:

In the discussions, participants said that China’s economy is currently showing a development trend of overall stability and movement toward the new and the better. Since the release of the new “Nine Measures,” the overall ecology of the capital market has undergone profound changes, the effects of the comprehensive reform of investment and financing have continued to be released, the quality and investment value of listed companies have been effectively raised, and there is a solid foundation for keeping the market running steadily. Participants offered opinions and suggestions on such matters as further strengthening the capital market’s foundational institutional framework, implementing a long-cycle assessment mechanism for medium- and long-term funds, continuously improving the standardized operation and governance of listed companies, further regulating quantitative trading behavior, intensifying the punishment of market violations and irregularities, strengthening the guidance of capital-market expectations, and further institutionalizing mechanisms for market stabilization.

座谈中，大家表示，当前我国经济呈现总体平稳、向新向优的发展态势，新“国九条”发布以来，资本市场整体生态发生深刻变化，投融资综合改革效应持续释放，上市公司质量和投资价值有效提升，保持市场稳健运行具备坚实基础。与会代表围绕进一步加强资本市场基础制度建设、落实中长期资金长周期考核机制、不断提升上市公司规范运作和治理水平、进一步规范量化交易行为、加大市场违法违规惩处力度、强化资本市场预期引导、进一步推动稳市机制制度化等方面提出了意见建议。

“Strengthening the guidance of capital-market expectations” likely means more positive talk about market prospects, and “further institutionalizing mechanisms for market stabilization” sounds like a call for more “national team” support, SOE buybacks, and long-term institutional money, in a more institutionalized way.

According to the readout, the “responsible official” from the CSRC said:

At the meeting, the responsible official of the CSRC said that high-quality development of the capital market cannot be achieved without the joint participation and joint efforts of all parties, including listed companies, industry institutions, and experts and scholars. He expressed the hope that listed companies would work to strengthen their compliant-operation capabilities and enhance their core competitiveness so as to better reward investors; that industry institutions would step up counter-cyclical positioning and earnestly raise the level of their investor services; and that experts and scholars would actively offer advice and proposals and speak out rationally, so as to jointly foster a sound market environment. The CSRC will conscientiously study and absorb the opinions and suggestions raised by all parties, proactively respond to market concerns, take a coordinated approach to preventing risks, strengthening regulation, and promoting high-quality development, continue to strengthen the market’s foundational institutional framework, enhance the market’s inherent stability, improve the long-term mechanism for protecting investors’ lawful rights and interests, and better promote the long-term, steady, and healthy development of the capital market.

会上，证监会负责同志表示，资本市场高质量发展，离不开上市公司、行业机构、专家学者等各方面的共同参与、共同努力。希望上市公司着力增强合规经营能力、提升核心竞争力，更好回报投资者；行业机构加大逆周期布局力度，切实提升投资者服务水平；专家学者积极建言献策、理性发声，共同营造良好市场环境。证监会将认真研究吸收各方面提出的意见建议，主动回应市场关切，统筹防风险、强监管、促高质量发展，持续加强市场基础制度建设，增强市场内在稳定性，完善投资者合法权益保护长效机制，更好推动资本市场长期平稳健康发展。

“Industry institutions would step up counter-cyclical positioning and earnestly raise the level of their investor services; and that experts and scholars would actively offer advice and proposals and speak out rationally, so as to jointly foster a sound market environment” sounds like an instruction to not sell into weakness while ensuring commentary and analysis about the market are positive.

The monster CXMT IPO is imminent, and they need it to go off well. Even more importantly, regulators need investors to keep putting money into the market to fund the national technology strategy.

2. PRC to soon restrict open model weights? - So says the Financial Times, which reports that:

Regulators led by the Ministry of Commerce (MofCom) have been consulting leading domestic AI and chipmaking groups on how to prevent China’s advanced technologies and star start-ups from being acquired by the west, according to two people involved in the discussions.

MofCom talked to AI companies including Alibaba, ByteDance and Zhipu on limiting the transfer of key data for the training of their models overseas, as well as allowing their model weights to be downloaded by foreign users, the people said. China would still let overseas customers access the models and services, however...

That follows recent reporting from the Wall Street Journal and Reuters, and should not be a surprise.

On this week’s Sharp China, Andrew and I spent a lot of time talking about the WAIC and the PRC approach to open models. You can listen to the whole podcast here, and here is a relevant clip:

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On today's show Andrew and Bill focus on the arrival of Moonshot's Kimi K3 model and the "DeepSeek 2.0 concerns" among investors and policymakers. Topics include: The incoherent U.S. approach to the open source AI ecosystem, levers the U.S. side could pull to thwart Chinese progress, and why the Trump Administration might be reluctant to take those steps. Then: Xi's keynote address at the World AI Conference, China's coherent messaging to the world, questions about infrastructure in the Global South, and the needle the U.S. could thread with open source policy. At the end: Trump's claims of "an unprecedented election security nightmare" at the hands of the PRC, the Connected Vehicle Security Act heads to mark-up this week, Neville Roy Singham is under investigation, and Rep. John Moolenaar urges the NBA to look closer at Brooklyn Nets owner—and Alibaba Chairman—Joe Tsai.

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Today’s top items:

1. Operation stock market rescue - The National team is back to try to turn around the stock market, after losses approaching ten trillion RMB this month. China Reform Holdings Corp. Ltd. and China Chengtong Holdings Group Ltd. announced Sunday they were buying around 60B RMB of ETFs and domestic stocks, five insurance firms and multiple SOEs announced Monday they were buying stocks, and CSRC head Wu Qing held an “investor symposium” at a brokerage branch in Beijing to meet “with 8 representatives from various categories of investors — large, medium, small, and retail — to hear their opinions and suggestions on promoting the stable and healthy development of the capital market.” According to the readout, translated here:

Wu Qing said that the broad mass of investors are the foundation of the market and the most important participant group in the capital market.…

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1. World Artificial Intelligence Cooperation Organization - Ahead of the Friday opening of the World Artificial Intelligence Conference (WAIC), Xi hosted a welcome banquet and Wang Yi signed an agreement with representatives from 29 countries for the establishment of the World Artificial Intelligence Cooperation Organization. Andrew and I talked a lot about what to expect at the WAIC in this week’s episode of Sharp China, which you can listen to here.

2. “What China wants to explore is another order” for AI - So says the CCTV account Yuyuan Tantian 玉渊谭天 on the eve of the WAIC, in 中国AI的发展逻辑 The Logic of China’s AI Development, translated here. From the article:

Core technology is held by a few, and other participants can only get products and services while finding it very hard to build up technical capability of their own. In the AI era — closed-source models, paid APIs, restricted compute, locked-down ecosystems — the higher the concentration of technology, the more solid the relations of dependency in the global AI industry become.

核心技术掌握在少数人手中，其他参与者只能获得产品、服务，却很难真正积累自己的技术能力。进入人工智能时代后，模型闭源、接口收费、算力受限、生态锁死，当技术集中度越高，全球AI产业的依附关系就会越稳固。

What China wants to explore is another order: pooling the strength of all humanity and all countries to build an open-source, all-factor AI ecosystem.

而中国想探索的，是另一种秩序——集全人类、各国合力，实现开源的、全要素的AI生态构建。

This is because AI is a wholly different sort of technology and is bound to raise a series of security and ethical questions. Only with global participation and shared effort can a safe and effective path of development be found.

这是因为，人工智能是一项截然不同的技术，势必会引发安全、伦理等一系列问题，唯有全球共同参与、共同努力，才能走出一条安全、有效的发展道路。

At the 2026 World Artificial Intelligence Conference, the open logic of “all-factor sharing” in China’s international AI cooperation will be presented as a clearer, more concrete action framework. The conference may also go further toward answering where the global AI order is headed.

在2026世界人工智能大会上，中国人工智能国际合作“全要素共享”的开放逻辑，将呈现出更清晰、更具体的行动框架。大会也或许会进一步回答全球AI秩序会向何处演进。

3. Kimi’s monster new model - Moonshot is the latest PRC firm showing the way to building open-source AI, with the release today of Kimi K3, which from early reviews is a frontier-class model. Kimi obviously timed the release for the eve of the WAIC, and I will assume they coordinated it with the relevant organs. If it is as good as the initial reviews say it is, this could change lots of assumptions.

4. July 15th issue of Qiushi - I have posted a summary of the 2026 Issue 14 of Qiushi, along with selected full translations, here. The most interesting article may be Raising the Household Consumption Rate by Smoothing Economic Circulation by “special commentator” Xu Qiyuan 徐奇渊, research fellow and deputy director of the Institute of World Economics and Politics at CASS. If Xu is correct, don’t expect any changes to the slow grind towards raising consumption:

Therefore, at the present stage the key to raising China’s household consumption rate lies in promoting the optimization of the demand structure and smooth economic circulation, and in accelerating the formation of a new development model that is led by domestic demand, pulled by consumption, and endogenously growing—not in propping up the indicator through short-term stimulus policies such as “helicopter money” (直升机撒钱), still less in reducing it to a rigid assessment target. Changes in the household consumption rate depend on the relative relationship between the growth rate of household consumption expenditure and the growth rate of GDP. If investment, foreign trade, and the like expand rapidly, making GDP grow faster than household consumption expenditure, the household consumption rate will fall; otherwise it will rise. It is impossible to raise the household consumption rate by suppressing investment and foreign trade activity; the emphasis should be on promoting a higher-level virtuous cycle among investment, foreign trade, and consumption. In addition, household consumption is a slow variable; although short-term consumption subsidies can boost the data, they easily overdraw future potential, and once the policy is withdrawn, growth may fall back, making it hard to drive a fundamental transformation of the development model.

因此，现阶段提升我国居民消费率，关键在于推动需求结构优化和经济循环畅通，加快形成内需主导、消费拉动、内生增长的新发展模式，而不在于通过”直升机撒钱”等短期刺激政策拉抬指标，更不能简化为硬性考核任务。居民消费率的变动，取决于居民消费支出增速和国内生产总值增速的相对关系。若投资、外贸等扩张较快，使国内生产总值增速快于居民消费支出，居民消费率就会下降，反之就会上升。不可能为了提高居民消费率而去抑制投资和外贸活动，重在推动投资、外贸与消费形成更高水平的良性循环。另外，居民消费是慢变量，短期消费补贴虽能拉升数据，却易透支后续潜力，一旦政策退坡，就可能出现增速回落，难以驱动发展模式的根本转型。

5. Australian government gets a new China advisor - Congratulations to Richard McGregor, and to Australian Foreign Minister Penny Wong, on McGregor’s appointment as her new senior advisor.

6. Dealing with the “dog days of summer 三伏天” - We are officially in the “dog days of summer 三伏天”, and this year it is ten days longer than usual. Parts of China are in nasty heat wave, as are we here in DC, along with crazy Canadian smoke pollution that is giving me flashbacks to smoggy Beijing summer days.

The National Health Commission held a press conference held a press conference to offer advice about dealing with the heat. I have translated it here. Some of the suggestions may be useful:

Wang Hongbing, a member of the National Expert Pool for Health Science Popularization and a chief physician at Beijing Hospital of Traditional Chinese Medicine, Capital Medical University, wrote on the Healthy China WeChat account that, as part of the normal calendar cycle, this year’s sanfu period is an “extended” 40 days—10 full days longer than last year—and will run from July 15 through August 23.

国家健康科普专家库成员、首都医科大学附属北京中医医院主任医师汪红兵在“健康中国”微信公众号发文介绍，由于是正常的历法循环，今年的三伏天是40天的“加长版”，比去年多出整整10天，将从7月15日持续到8月23日。

He advised that staying healthy during sanfu requires not only preventing heat illness but also emotional self-care, appropriate exercise and a proper diet; people may also practice the TCM therapy of treating winter ailments in summer. Traditional Chinese medicine holds that the Heart opens into the tongue, corresponds to bitterness among the five flavors, has joy as its associated emotion and sweat as its bodily fluid, and corresponds to summer among the four seasons. Nourishing the Heart is therefore especially important in summer, and people should maintain a happy mood and stable emotions. Suitable summer exercise includes swimming, tai chi, Baduanjin and walking. Avoid the hottest hours with the strongest sunlight, from 11 a.m. to 4 p.m., and reduce exercise intensity appropriately.

他提醒，伏天养生，除了防暑降温，也要注意情志调养、适当运动、饮食得当，同时可进行冬病夏治。中医认为，心开窍于舌，通五味之苦，在志为喜，其在液为汗，应四时之夏，因此，夏季养心非常重要，应该保持心情愉悦、情绪平稳。夏季运动适合的项目包括游泳、太极拳、八段锦、散步等，注意避开气温最高、阳光最强烈的时段（11时至16时），且强度要适当降低。

Tashi is definitely leaning in to the “reduce exercise intensity appropriately” advice:

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On today’s show, Andrew and Bill begin by parsing the economic data released by the PRC this week, including slower-than-expected growth, the Party’s response to the status quo, export-powered growth that is widening trade imbalances, and the questions all of this will raise for foreign policymakers. From there: The Party's findings on Ma Xingrui, questions that remain unanswered, and cadre risk aversion for the next 18 months. Then: PRC messaging around openness in AI, an ongoing U.S. debate over open-source AI models, three chip bills that may end up in the NDAA, and the continued adventures in China policy on Capitol Hill. At the end: Reflections on the 10th anniversary of The Hague ruling on the PRC’s territorial claims in the South China Sea, as well as the state of play today.

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1. Xi inspects Shanghai - As expected, Xi has undertaken an inspection tour of Shanghai ahead of his Friday speech at the World Artificial Intelligence Conference. The key themes from today’s readout:

Xi Jinping stressed during an inspection in Shanghai on the 15th that advancing urban renewal with high quality is an important handhold for urban modernization, that the people’s city concept must be comprehensively put into practice, that one must persist in asking the people what they need, seeking the people’s counsel, and letting the people judge results, that all aspects of urban renewal work must be done deeply, finely, and solidly, and that residents’ sense of gain, happiness, and security must be continually strengthened.

The readout also included comments from Xi about the ongoing flooding in parts of the country:

In the course of the inspection Xi Jinping stressed that this is currently the critical period for flood prevention, and that all localities and all relevant parties must firmly establish bottom-line thinking and worst-case thinking, closely follow rainfall, flood, and typhoon conditions, carry out thorough and meticulous investigation of risks and hidden dangers, do solid work on flood prevention and control and on emergency rescue and disaster relief, and earnestly safeguard the safety of the people’s lives and property.

Will the People’s Leader visit any of the affected regions before returning to Beijing?

2. GDP data - The PRC economy slowed more than expected in Q2. Real GDP growth declined from 5.0% year-on-year in Q1 to 4.3%, below the 4.5% consensus and the lower bound of the government’s 4.5–5.0% full-year target. First-half growth was 4.7%. Sequential Q2 growth of 0.9% was in line with expectations.

AI, high-tech manufacturing, exports and selected modern services are expanding rapidly. Property, private investment, conventional infrastructure and household consumption remain weak. The official Q&A noted that “new growth drivers” contributed more than 40% of economic growth, while officials largely avoided explaining why aggregate investment is contracting.

The GDP deflator turned positive for the first time in 12 quarters.

The data is not great but probably not bad enough for significant new policy measures coming out of the upcoming July Politburo meeting that will discuss the economy. But in his meeting with experts and economists earlier this week, Premier Li, whom I assume already knew today’s data, said “counter-cyclical adjustment must be stepped up; existing policies must be used well and to the full while incremental policies are studied and reserved in advance”.

3. Problems in the US-China trade deal - Bloomberg’s Jenny Leonard reports on the open secret in DC, that the PRC side has not lived up to the Trump-Xi deal but the US is keeping quiet about the problems, especially around rare-earths. From the article:

While there’s plenty of internal grumbling and frustration voiced among Trump officials, those familiar with the situation describe a hush culture where the US government is reluctant to publicly admonish China and risk plunging the countries back into a trade war.

Some officials believe Trump is particularly disinclined toward registering any objection that could endanger his plans to host Xi for a lavish state visit in September. There’s also concern that pushing back could prompt the Chinese leader to escalate retaliation in a way that could rock markets ahead of November’s midterm elections or fully turn off access to critical minerals...

Treasury Secretary Scott Bessent and Jamieson Greer, who leads the trade office, have spent a half-dozen meetings with Chinese representatives over the course of a year attempting to iron out sourcing for the crucial inputs for American firms, only to be rebuffed.

4. Pew Research: China viewed more positively than US in many countries - Pew Research is out with a new survey of respondents in 36 countries that says People in Many Countries Now View China More Positively Than the US:

Views of China have improved in recent years while opinions of the U.S. have worsened, to the point where China is now seen more positively than the U.S. in most of 36 countries surveyed…

China being assessed more positively than the U.S. is a relatively recent shift in most countries surveyed. This reversal in favorability is often driven by shifting views of both superpowers: improving views of China coupled with worsening views of the U.S.

5. Foreign Correspondents Club on reporting challenges - The Foreign Correspondents’ Club of China’s (FCCC) 2025 Media Freedoms Report describes worsening conditions for foreign correspondents and increasing numbers of “sensitive” areas for reporting. Meanwhile, officials, propaganda organs and academics talk about the need for “new” Edgar Snows, as articulated in last week’s report Legacy of Edgar Snow: Contemporary Value and Inspiration to the World from the Xinhua Institute:

Only by approaching China with an objective eye, walking its ground, listening to its people, and seeing it for oneself as Snow did, can one move beyond prejudice and stereotypes, understand the historical inevitability and practical rationality of China’s pursuit of the Chinese path, and view China’s development achievements, opportunities and challenges fairly, it said.

The report said the legacy still inspires the world to build bridges of friendship, promote exchanges and mutual learning and address global challenges with joint efforts.

It called for more “new Snows” to uphold an attitude of openness, inclusiveness, exchange and mutual learning, continue writing new chapters of friendship between China and the rest of the world, illuminate the way forward for the peace and development of humanity, and rally the people of all countries around a new vision of building a better world.

As I wrote in an entry from the January 4, 2021 Sinocism after then MoFA spokesperson Hua Chunying said:

The PRC may want only pliant foreign journalists to better “tell China’s story”, but the information environment today is obviously a lot different than it was in the 1930s and 1940s. China is even more important now, across every dimension, so it is quite distressing to see the reversion to a much more constricted information and access. I think that is what Xi Jinping prefers, with the expectation that greater restrictions on foreign access buttress the CCP’s “political security” and allow the Party-State to better pursue its goal of increasing China’s international discourse power, aka “telling China’s story well”. So in some ways we are going back to the future, but now trying to understand a much more complicated country and society with increasingly narrow lenses.

Five years on, the PRC has gotten much more effective at telling its story well, and increasing international discourse power. The Pew poll results are in part a reflection of that.

Thanks for reading.

1. Xi inspects Shanghai

Xi Jinping Inspects Shanghai - Translation

Xinhua, Shanghai, July 15 — General Secretary of the CPC Central Committee, President, and Chairman of the Central Military Commission Xi Jinping stressed during an inspection in Shanghai on the 15th that advancing urban renewal with high quality is an important handhold for urban modernization, that the people’s city concept must be comprehensively put into practice, that one must persist in asking the people what they need, seeking the people’s counsel, and letting the people judge results, that all aspects of urban renewal work must be done deeply, finely, and solidly, and that residents’ sense of gain, happiness, and security must be continually strengthened.

新华社上海7月15日电 中共中央总书记、国家主席、中央军委主席习近平15日在上海考察时强调，高质量推进城市更新是城市现代化建设的重要抓手，要全面践行人民城市理念，坚持问需于民、问计于民、问效于民，做深做细做实城市更新各项工作，不断增强居民群众的获得感、幸福感、安全感。

On the afternoon of the 15th, accompanied by Politburo member and Shanghai Party Secretary Chen Jining and Mayor Gong Zheng, Xi Jinping came to the Shimin Xincun residential district of Bansongyuan Road Subdistrict in Huangpu District for an inspection.

15日下午，习近平在中共中央政治局委员、上海市委书记陈吉宁和市长龚正陪同下，来到位于黄浦区的半淞园路街道市民新村居民区考察调研。

Four buildings in the Shimin Xincun residential district, put up in the 1950s, have had their living conditions markedly improved through reconstruction and renewal, with self-contained kitchens and bathrooms installed and elevators added. Xi Jinping walked into the community comprehensive service point and heard a briefing on Shanghai’s push to upgrade and renovate old housing lacking sanitary facilities, on the historic resolution of the “carrying the chamber pot” problem for residents of the old city districts, and on residential compound renovation, and asked staff on site detailed questions about the situation. Xi Jinping stressed that the Party Center attaches great importance to urban work and has explicitly called for building modern people’s cities that are innovative, livable, beautiful, resilient, civilized, and smart, and that renovating old and dilapidated urban residential compounds is an important link in this. In this work one must firmly establish and put into practice a correct view of performance achievements, think what the masses think and treat as urgent what the masses treat as urgent, formulate and implement effective policies and measures, persevere over the long haul, handle well one by one the matters ordinary people care about, and keep improving the people’s wellbeing. Property management and convenience services in residential compounds must be steadily raised with “embroidery-needle skill,” striving to satisfy the residents...

市民新村居民区4幢上世纪50年代建成的楼房，通过改建更新，设立独立厨卫、加装电梯，居住条件明显改善。习近平走进社区综合服务点，听取上海市推进无卫生设施旧房提升改造、历史性解决老城区居民“拎马桶”问题和小区改造介绍，并向现场工作人员详细询问有关情况。习近平强调，党中央高度重视城市工作，明确提出要建设创新、宜居、美丽、韧性、文明、智慧的现代化人民城市，改造城市老旧小区是重要一环。工作中要牢固树立和践行正确政绩观，想群众之所想，急群众之所急，制定实施有效的政策举措，坚持久久为功，把老百姓关切的事一件一件办好，持续增进民生福祉。要以“绣花功夫”不断提升小区物业管理和便民服务水平，努力让居民群众满意。

Xi Jinping then came to the community Party-mass service station, looked over the supply of fruit and vegetables at a convenience produce stall, and had a cordial exchange in the “citizens’ parlor” with resident representatives, subdistrict cadres, community workers, and others. Xi Jinping pointed out that the community is the basic unit of the urban governance system. The level of community governance must be raised, resources, services, management, and the like must be pushed down to the grassroots front line, and burdens on the grassroots must be continually reduced while empowering them. Party building leadership must be further strengthened, new models must be actively explored for the coordinated operation of residents’ committees, homeowners’ committees, and property service enterprises under the leadership of community Party organizations, complete communities and convenient living circles must be built, and good deeds must be done, practical matters handled, and difficulties resolved for residents with heart and with feeling.

随后，习近平来到社区党群服务站，察看便民菜摊果蔬供应情况，在“市民客厅”同居民代表、街道干部、社区工作者等亲切交流。习近平指出，社区是城市治理体系的基本单元。要提高社区治理水平，推动资源、服务、管理等下沉基层一线，持续为基层减负赋能。要进一步加强党建引领，积极探索社区党组织领导下的居委会、业委会、物业服务企业协调运行新模式，建设完整社区和便民生活圈，用心用情为居民做好事、办实事、解难事。

2. GDP data

National Economy Operated within an Appropriate Range with New Growth Drivers Developing Rapidly in the First Half Year

In the first half year, under the strong leadership of the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping at its core, all regions and departments fully implemented the decisions and arrangements made by the CPC Central Committee and the State Council, adhered to the general principle of pursuing progress while ensuring stability, fully and faithfully applied the new development philosophy on all fronts, moved faster to foster a new pattern of development, made efforts to promote high-quality development and effectively carried out more proactive and vigorous macro policies. As a result, the national economy operated within an appropriate range against pressure. Production and supply grew fast, employment was generally stable, prices increased mildly, foreign trade showed good momentum of growth, new growth drivers witnessed rapid development, and people’s wellbeing was ensured in a strong and effective way. The national economy continued to demonstrate strong resilience.

According to preliminary estimates, the gross domestic product (GDP) in the first half of 2026 reached 69,570.4 billion yuan, up by 4.7 percent year on year at constant prices. By industry, the value added of the primary industry was 3,152.2 billion yuan, up by 3.7 percent year on year; that of the secondary industry was 25,047.3 billion yuan, up by 3.9 percent and that of the tertiary industry was 41,370.9 billion yuan, up by 5.2 percent. By quarter, the GDP for the first quarter increased by 5.0 percent year on year and for the second quarter 4.3 percent. The GDP for the second quarter increased by 0.9 percent quarter on quarter.

Caixin - China’s Growth Misses, but AI and Oil Prices Snap Its 3-Year Deflation Streak

China’s economy grew a weaker-than-expected 4.3% in the second quarter, official data showed Wednesday, but surging AI and energy prices offered a rare bright spot: snapping the country’s three-year deflationary streak.

The real year-on-year growth fell short of the 4.4% median forecast in a Caixin survey, dragged down by sluggish construction activity.

Yet nominal GDP jumped 5.9% year-on-year, outpacing real growth for the first time since the first quarter of 2023. The shift ends 12 consecutive quarters of negative GDP deflator readings — a broad measure of economy-wide prices.

China’s economy grows at one of lowest rates in decades - Financial Times

Retail sales added just 1 per cent in June from a year earlier, while fixed-asset investment was down 5.7 per cent year on year for the first half of the year, compared to 4.1 per cent in the first five months.

Industrial production, one sign of strength, grew 5.3 per cent last month on a year earlier.

Lynn Song, chief greater China economist at ING, said the GDP data showed a “significant deceleration” from the first quarter and pointed to a “sharp weakening in monthly indicators”.

“Though the monthly activity data does not translate directly into the GDP contribution, we have seen fixed-asset investment further crater into negative year-on-year growth [and] retail sales barely in positive territory,” he said.

‘Bad Inflation’ Ends China’s Record Streak of Price Declines - Bloomberg

The so-called GDP deflator, which measures price changes across all domestically produced goods and services, rose 1.6% in the second quarter after three years of contraction. But the turnaround brings little comfort for an economy that slowed in the April-June period to the weakest pace since the last months of 2022.

“The higher price level is cost-push — we can call this ‘bad inflation,’” said Raymond Yeung, chief economist for Greater China at ANZ. Still, he added that positive inflation expectations are better for the economy than remaining stuck in a persistent deflationary trap.

China’s retail sales of goods, services up 2.7% in first half of 2026 | Xinhua

China’s total retail sales of goods and services, a major indicator of the country’s consumption strength, increased by 2.7 percent year on year in the first half of 2026, official data showed Wednesday.

The retail sales of services increased by 5.3 percent in the period from a year ago, and that of goods increased by 1.1 percent, according to data released by the National Bureau of Statistics (NBS).

“As living standards improve, service consumption has increasingly become a key area for unlocking consumption potential,” Mao Shengyong, deputy head of the NBS, told media.

In terms of services consumption, the categories of communication and information services, tourism consulting and leasing services, and cultural, sports and leisure services saw fast growth, the NBS data showed.

Deputy Commissioner of the National Bureau of Statistics Answers Reporters’ Questions on National Economic Performance in the First Half of 2026 - Translation

Caixin - China’s Industrial Capacity Use Falls to Six-Year Low as Coal, Chemicals Weaken

The utilization rate for industrial enterprises above a designated size dropped to 73%, down 0.6 percentage point from the first quarter and 1 percentage point lower than a year earlier, according to data released Wednesday by the National Bureau of Statistics.

The decline highlights the persistent difficulty of balancing supply and demand in the world’s second-largest economy, as China seeks to rein in excessive industrial competition while shifting toward high-tech growth drivers.

The second-quarter reading was the lowest since the first quarter of 2020, when utilization fell to 67.3% during the initial Covid-19 outbreak. It was also close to levels seen during China’s 2016 supply-side structural reforms. For the first half of 2026, cumulative capacity utilization stood at 73.3%, below the 74.4% average for 2025.

China’s property investment falls 18% in H1 2026 - ECNS

China’s real estate development investment fell 18% year on year to 3.81 trillion yuan ($561 billion) in the first half of 2026 the National Bureau of Statistics said Wednesday. Property sales and developer funding also declined.

Investment in residential projects dropped 17.8% to 2.93 trillion yuan ($431.5 billion). The floor space of newly started projects fell 23.4%, while completed floor space decreased 23.7%.

The floor space of newly built properties sold declined 11.6% to 401.4 million square meters. Sales by value fell 13.6% to 3.79 trillion yuan ($558.1 billion), with residential property sales down 13.7%.

Funds available to real estate developers decreased 20.2% to 4.02 trillion yuan ($592 billion). Domestic loans fell 31.7%, while individual mortgage loans dropped 24.9%.

70-city house prices give off multiple positive signals: more cities with new-home gains in June 70城房价释放多重积极信号！6月新房上涨城市数量继续攀升 Securities Times 证券时报 · 2026-07-15

National Bureau of Statistics data released July 15 show 20 of 70 large and medium cities had month-on-month new-home price gains in June, four more than in May and the most since May 2025. First-tier new-home prices rose 0.1% month on month, a fifth straight gain; second-tier prices went flat after a 0.1% fall; third-tier prices fell 0.3%, narrowing by 0.1 point. Nine cities had second-hand price gains, one fewer than May. Zhang Dawei of Centaline told the paper the bottoming-out trend is unchanged; Yan Yuejin of the E-house Shanghai institute said the new-home price adjustment is largely complete.

3. Problems in the US-China trade deal

China Trade Pact Violations Go Unchallenged by Trump Administration - Bloomberg

Within President Donald Trump’s trade team, two sobering conclusions are emerging: China is cheating on its trade deal. And the US isn’t going to do much about it.

Reopening access to critical minerals and rare earths, crucial for US companies manufacturing a wide range of products including cars and fighter jets, was a central objective of the pact Trump struck with Chinese President Xi Jinping last year in South Korea.

But in meetings and messages described by people who requested anonymity to detail internal discussions, staffers at the White House and Office of the US Trade Representative acknowledge Beijing simply isn’t abiding by the Trump administration’s understanding of the deal...

Wonder if just a coincidence that same day Bloomberg has that story about the Trump team frustration with China not living up to the deal, Navarro is allowed to publish this oped - Peter Navarro: America Can Break China’s Choke Hold on Critical Minerals - WSJ

China uses “starve, not strangle” tactics designed to control the critical-minerals valves without closing them entirely. Its bureaucracy slows licenses, rations access, raises costs and reminds every boardroom that the road to strategic manufacturing runs through Beijing.

In response, the U.S. is mobilizing private capital, engineering talent, entrepreneurial risk-taking and strategic government support.

America’s aim isn’t only to reduce dependence on China. It is also to undercut China’s production advantage by developing cleaner, cheaper and more-flexible technologies that can produce critical minerals at or below China’s prices.

China and the new era of critical minerals diplomacy - Financial Times

Yttrium, however, is “the killer chokepoint”, says one supplier to the semiconductor industry. “We are facing an existential risk . . . As of yet, there is no date where we will have any fully de-risked supply chain.”

The limited supply has caused “panic” in the past few months, says Nick Myers, chief executive of US rare earths start-up Phoenix Tailings. Defence, automotive and semiconductor companies are calling “all the time”, with some warning that they may be forced to halt production by Christmas if they do not source the metal, he says...

“China could shut down the entire semiconductor industry if they wanted to turn off the valve,” says Lita Shon-Roy, a sector expert at analysis group TechInsights...

One executive at a large Japanese user of rare earths says China wants to keep companies in a “neither alive nor dead” state, by supplying them with the minimum needed to avoid a supply chain collapse — which would hit Chinese companies that still rely on materials and components from Japan.

White House weighs releasing controversial intel on China and US elections, sources say | Reuters

Trump may disclose the intelligence, which was collected and analyzed during his first term, in a speech that he is due to deliver on ‌Thursday night, when he is expected to outline information about alleged vulnerabilities in the voting infrastructure that could allow for foreign interference in U.S. elections, the sources said.

Reuters could not determine the details of the intelligence, but sources said it is classified and related to whether China had the intention or ability to disrupt U.S. elections in 2020. The sources, who were granted anonymity to discuss classified material, said the intelligence did not show Beijing had manipulated or changed ​votes.

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At present two entirely different logics of development exist in the AI field: some media have summed them up as "oil thinking" and "water-flow thinking" — the former treats data and computing power as exclusive scarce resources, fostering barriers, blockades and zero-sum games; the latter treats AI as a universally beneficial public good, nurturing connectivity, sharing and mutual benefit. The vitality of technology lies in open flow. The development of AI must never move toward a technological monopoly that walls itself in, but should always be anchored to the fundamental goal of serving humanity. - People’s Daily commentary previewing the themes of the upcoming World Artificial Intelligence Conference

Today’s top items:

1. Ma Xingrui handed over to prosecutors - The Party has released a public version of the “Report on the Findings of the Review of the Ma Xingrui Case and the Recommendations for Handling It”. Unsurprisingly, former Politburo member Ma is expelled from the Party, dism…

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1. Xi to speak at the World Artificial Intelligence Conference (WAIC) - Xi will be the keynote speaker at the WAIC in Shanghai Friday. That is an upgrade for the conference as in prior years the most senior speaker has been Premier Li Qiang. Expect to hear lots about the Global AI Governance Initiative and China’s approach to helping the world benefit from AI, if this Xinhua commentary is any indication:

A just cause finds no isolation; those who walk together go far. From holding the World Artificial Intelligence Conference for eight consecutive years and proposing the establishment of a World AI Cooperation Organization, to vigorously developing an open-source and open ecosystem and promoting the global sharing of technological achievements and application experience; from advocating stronger international cooperation with and assistance to developing countries and bridging the intelligence divide, to pushing the UN General Assembly to adopt a resolution on strength…

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1. China-Russia military cooperation - A joint investigation by The Insider, Der Spiegel, and Le Monde provides shocking but unsurprising revelations about China-Russia military cooperation. The reports should destroy any lingering illusions of PRC “neutrality” in the Russia-Ukraine war.

They really do not like Elon Musk’s Starlink:

The Der Spiegel cover:

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Show Notes:

On today's show Andrew and Bill begin with Monday's SLBM test from the PLA Navy, including questions surrounding its timing and location, regional angst, and a reminder that the PLA continues to enhance its nuclear triad capabilities. Then: Two new PLA generals are promoted while rectification continues and five CMC seats remain vacant, and reactions to last week's shocking CITIC plane crash and a major security breach in Beijing. From there: An emailer asks about America's interests in maintaining the Taiwan status quo, Beijing considers limiting access to advanced AI models, the knives are out for Jeffrey Kessler at BIS, and the White House preps for Xi's visit in September. At the end Questions about the release of pastor Ezra Jin, context for the U.S. sentencing of disgraced tycoon Guo Wengui, and the Washington Wizards get a letter from Rep. John Moolenaar.

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Floods and Xi’s instructions; PRC to limit access to top AI models?; PBoC policy support for Hong Kong; Tax burden on private firms -- Sinocism

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China’s SLBM Test Underscores the Importance of a Ballistic Missile Launch Notification Agreement -- CSIS

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Select Committee: Owner of Capitals, Wizards Should Cut Ties with Chinese Military Company Alibaba -- China Select Committee

Erling Haaland + a 195-year-old Chinese herbal tea? Yes, really.-- YouTube

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It is necessary to seize the window period of global talent flows and actively recruit outstanding young talent and teams from overseas. 要抓住全球人才流动窗口期，积极引进海外优秀青年人才和团队。- Xi Jinping at the July 8, 2026 National Science and Technology Award Conference

Today’s top items:

1. National Science and Technology Award Conference - Xi presided Wednesday morning at the Great Hall of the People over the National Science and Technology Award Conference, held jointly with the academicians’ meetings of CAS and CAE and the 11th CAST National Congress, the same format as the June 2024 National Science and Technology Conference. Xi gave a speech and handed out the top awards, Li Qiang presided, all the other PBSC members were there, and Ding Xuexiang read the award decision. About 4,300 people attended.

In his speech, Xi said:

Since the National Science and Technology Conference in June 2024, China’s science and technology cause has achieved a series of new accomplishments. For example, major original achiev…

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