Iran war; PBoC's 2026 tasks; US-China; Japan; Front-loading 2026 spending

Today’s top items:

1. Iran war - Wang Yi had a call with UK Foreign Secretary Yvette Cooper to discuss the “situation in the Middle East”. From the Xinhua readout:

Wang Yi elaborated on China’s position, stating that the current conflict in the Middle East is still escalating and the war is still expanding. This not only impacts regional peace and stability but also directly affects international energy, finance, trade, and shipping, undermining the common interests of all countries. There are no winners in a protracted war, and a ceasefire to end the fighting is the common desire of the people. China urges all parties to immediately cease military actions, resolve differences through equal dialogue, and jointly safeguard regional peace and stability. As permanent members of the UN Security Council, China and the UK bear the responsibility of maintaining international peace and security. Both sides should strengthen communication, persist in acting in ways conducive to peace, jointly co…