China Commissions Fujian Carrier To Expand Naval Reach
P&C | Saturday, 08 Nov. 2025
China | Planet & Commerce
China Seeks To Project Global Power With New Fujian Aircraft Carrier
China has officially commissioned its third and most advanced aircraft carrier, the Fujian, marking a defining moment in Beijing’s bid to transform its navy into a global blue-water force capable of operating far beyond its coastal waters. The commissioning ceremony, held on Hainan Island on Wednesday, was attended by President Xi Jinping, who has made military modernization a cornerstone of his leadership. The Fujian (Type 003) represents a technological and strategic leap for China’s People’s Liberation Army Navy (PLAN) — it is the first aircraft carrier entirely designed and built domestically, a symbol of China’s ambition to rival the United States Navy’s dominance in the Indo-Pacific and beyond.
A Milestone In Xi Jinping’s Military Overhaul
According to China’s state-run Xinhua News Agency, the Fujian’s commissioning marks a milestone in Xi’s broader vision of building a “world-class military by mid-century.” That goal includes transforming China’s navy into a blue-water strategic force capable of operating across oceans rather than merely defending its coastline. This development brings China closer to closing the carrier gap with the United States, which operates 11 nuclear-powered aircraft carriers backed by a global network of bases. While the Fujian is conventionally powered, it employs cutting-edge technologies previously seen only on the U.S. Navy’s Ford-class carriers, such as electromagnetic catapult launch systems.
“Carriers are key to Chinese leadership’s vision of China as a great power with a blue-water navy,” said Greg Poling, director of the Asia Maritime Transparency Initiative at the Center for Strategic and International Studies (CSIS). “The Fujian enables China to project air power far from its coastal waters — something that until recently was the exclusive domain of the U.S. Navy.”
Expanding The Strategic Perimeter: From The First To The Second Island Chain
China’s growing naval power is central to its maritime strategy across the First and Second Island Chains — key zones of influence that stretch across the western Pacific. The First Island Chain includes the South China Sea, East China Sea, and Yellow Sea, encompassing Taiwan and the Philippines. The Second Island Chain extends eastward toward Guam, a critical U.S. military hub. Beijing’s goal is not only to dominate the near seas but also to contest U.S. presence farther into the Pacific.
“A carrier doesn’t really help you in the First Island Chain,” Poling noted, “but it’s key to that contest, if you want one, with the Americans in the wider Indo-Pacific.”
With the Fujian, analysts believe China is now capable of launching carrier groups deep into the Pacific Ocean, enhancing its surveillance, strike, and deterrence capabilities in regions once beyond its operational reach. This could complicate U.S. response times in a potential Taiwan crisis or in other flashpoints such as the South China Sea.
China’s Technological Leap: Fujian’s Advanced Capabilities
Unlike China’s first two aircraft carriers — the Liaoning (a refurbished Soviet vessel) and the Shandong (built in China but based on the same design) — the Fujian is a fully indigenous platform that incorporates next-generation carrier technology.
Key Features of the Fujian:
- Electromagnetic Aircraft Launch System (EMALS): The Fujian is the first non-U.S. carrier to feature EMALS, a system that replaces traditional steam catapults. It allows for smoother launches, reduces stress on aircraft, and can launch heavier and more advanced planes like the KJ-600 airborne early warning aircraft and J-35 stealth fighters.
- Expanded Flight Deck and Hangar Capacity:
The Fujian can carry more aircraft and launch sorties at a faster rate than the older Liaoning and Shandong, enabling sustained power projection far from China’s shores.
- Full-Deck Operation Capability:
During sea trials, the Fujian successfully launched and recovered the J-35, J-15T heavy fighter, and KJ-600 aircraft, marking its readiness for operational deployment.
- Integrated Command Systems:
The new carrier has advanced radar and battle management systems designed for joint operations with destroyers, submarines, and aerial assets, giving it networked warfare capabilities comparable to Western fleets.
“The Fujian is a big leapfrog for China in terms of its aircraft carrier capabilities compared to the first two,” said Brian Hart, deputy director of the CSIS China Power Project.
China’s Blue-Water Ambitions: From Coastal Defense To Global Presence
For Beijing, the Fujian represents more than a symbol of pride; it is a strategic tool to protect China’s overseas interests, which now span energy routes, trade corridors, and infrastructure projects under the Belt and Road Initiative.
“China’s carriers cannot just operate near home; they must operate in distant oceans and far seas,” said Song Zhongping, a Hong Kong-based military affairs expert. “China is a great power, and our overseas interests span the globe; we need to be globally present.”
The commissioning ceremony in Hainan — home to China’s Southern Theater Command — reinforces the carrier’s intended role in safeguarding maritime routes through the South China Sea and extending Beijing’s influence into the Indian Ocean and Western Pacific.
Japan, U.S., And Regional Reactions: Growing Anxiety
China’s unveiling of the Fujian has drawn sharp reactions from its regional neighbors, particularly Japan, which expressed concern about Beijing’s rapid military expansion. Japanese Chief Cabinet Secretary Minoru Kihara said the move shows that China is strengthening its military power “extensively and rapidly without transparency.”
“We believe that China’s military intends to advance its operational capability at distant sea and air by strengthening sea power,” he said, emphasizing that Japan would “calmly but decisively respond.”
The United States has also closely monitored China’s carrier expansion. In its most recent Pentagon report to Congress, Washington described China as “the only competitor to the United States with both the intent and the capacity to reshape the international order.”
Strategic Implications: Taiwan And The Indo-Pacific Balance
The Fujian’s commissioning comes amid rising tensions over Taiwan, which China claims as its own territory. Military analysts warn that if China can position one or more carrier groups near the Second Island Chain, it could delay or disrupt U.S. military assistance to Taiwan during a conflict.
“An aircraft carrier allows China to extend its strategic perimeter,” said Brian Hart. “It expands domain awareness — the ability to monitor air, sea, and subsurface activity across vast areas — and gives China new ways to deter or delay foreign intervention.”
In a Taiwan scenario, the Fujian’s deployment could enable China to project air cover beyond the range of its land-based fighters, changing the tactical equation in the western Pacific.
Limitations: Conventional Power And Logistical Challenges
Despite its advancements, the Fujian still faces notable constraints compared to its American counterparts:
- Conventional Power: Unlike U.S. nuclear-powered carriers, the Fujian’s range is limited by fuel capacity, requiring regular resupply and support ships.
- Limited Overseas Bases: China lacks a global base network like the U.S., though it has built its first overseas base in Djibouti and is rumored to be developing others in Pakistan, Cambodia, and Equatorial Guinea.
- Operational Experience: China has not fought a major war since 1979, and its carrier crews are still building real-world combat readiness.
Singapore-based analyst Tang Meng Kit cautioned that “China’s capabilities may be overstated” and that “operational readiness lags behind its showcased arsenal.”
“The parade and ceremonies amplify perceptions of strength, but actual wartime efficiency is untested,” Tang said.
A Symbol Of Power And Perception
Beyond its military role, the Fujian serves as a symbol of national pride and political legitimacy for Xi Jinping’s leadership. During China’s World War II Victory Day parade in September, the Fujian’s aircraft — including the J-35 stealth fighter, J-15T, and KJ-600 — were featured alongside hypersonic glide vehicles, drones, and electronic warfare systems, showcasing China’s technological sophistication. Analysts say that the carrier’s commissioning signals China’s broader strategic intent:
- To deter major powers,
- To pressure regional actors,
- To expand global influence, and
- To reinforce domestic legitimacy through military strength.
“The Fujian’s launch is part of a larger mosaic,” Tang noted. “It’s not just about Taiwan; it’s about cementing China’s status as a global power capable of shaping the international order.”
China’s Carrier Future: The Road Ahead
Evidence suggests that China is already building its next-generation carrier, possibly nuclear-powered, which would vastly extend its operational range. Chinese shipyards — known for their rapid construction pace — are reportedly capable of producing multiple large vessels simultaneously, including destroyers and nuclear-powered submarines. As Beijing accelerates naval expansion, experts say the global balance of power in the Indo-Pacific could shift dramatically over the next decade. The Fujian is not just a new ship — it is a statement of China’s determination to redefine its role on the world stage.
Nvidia CEO Reports Surging Demand For Blackwell Chips
P&C | Saturday, 08 Nov. 2025
China | Planet & Commerce
Nvidia CEO Jensen Huang Sees Record Demand For Blackwell Chips As AI Boom Expands
Nvidia CEO Jensen Huang announced on Saturday that the company is witnessing “very strong demand” for its latest-generation Blackwell chips, which have become the centerpiece of the global AI hardware boom. Speaking during an event hosted by long-term partner Taiwan Semiconductor Manufacturing Company (TSMC), Huang said the appetite for Blackwell-series processors has significantly increased, with Nvidia ramping up wafer orders from TSMC to meet unprecedented global demand. “Nvidia builds the GPU, but we also build the CPU, the networking, the switches — there are a lot of chips associated with Blackwell,” Huang told reporters at the TSMC headquarters in Hsinchu.
“TSMC is doing a very good job supporting us on wafers. Nvidia’s success would not be possible without TSMC.”
The remarks came during Huang’s fourth public trip to Taiwan this year, underscoring the deep partnership between Nvidia — the world’s most valuable semiconductor company — and TSMC, the world’s leading contract chip manufacturer.
Blackwell Chips Power The Next Phase Of AI Growth
The Blackwell architecture, unveiled earlier this year, represents Nvidia’s most advanced generation of artificial intelligence and high-performance computing (HPC) processors. Designed to succeed the Hopper H100 and H200 GPUs, the Blackwell chips power large-scale AI training, inference, and data center workloads, forming the backbone of generative AI models used by companies like OpenAI, Google DeepMind, Meta, and Microsoft. Demand for the new chips has skyrocketed, driven by global investments in AI supercomputers, cloud infrastructure, and machine learning research. Nvidia’s hardware is widely recognized as the “engine of the AI revolution,” enabling breakthroughs in large language models (LLMs), autonomous vehicles, and digital twin simulations.
“There’s enormous enthusiasm around Blackwell,” Huang said. “Every generation of Nvidia architecture brings exponential efficiency and capability, and this one is no exception.”
TSMC Partnership: A Pillar Of Nvidia’s Supply Chain
TSMC CEO C.C. Wei confirmed that Huang had “asked for wafers,” though he declined to disclose specific quantities, citing confidentiality agreements. Nvidia relies heavily on TSMC’s 3-nanometer and 5-nanometer fabrication processes, which are used to produce its high-end GPUs and CPUs.
“Nvidia’s success is a success for the entire ecosystem,” Wei said during the event. “We are proud to support the most advanced AI processors in the world.”
The partnership between Nvidia and TSMC has become one of the most strategically important alliances in the global semiconductor industry. Nvidia designs the chips, while TSMC fabricates them with cutting-edge lithography technologies sourced from ASML, Tokyo Electron, and Applied Materials. TSMC’s dominance in advanced manufacturing — coupled with Nvidia’s GPU design leadership — has made the duo the cornerstone of the global AI supply chain.
Nvidia: The World’s First $5 Trillion Tech Giant
In October, Nvidia became the first company in history to reach a $5 trillion market capitalization, cementing its status as the world’s most valuable semiconductor company and one of the top three corporations globally by valuation. During the event, TSMC’s Wei humorously referred to Huang as the “five-trillion-dollar man,” reflecting Nvidia’s meteoric rise fueled by explosive demand for AI hardware. Huang acknowledged the milestone as a testament to the synergy between chip designers, fabricators, and ecosystem partners, rather than a solo achievement.
“No single company builds the AI industry alone,” Huang said. “Our growth is built on the strength of a global supply chain — from wafer manufacturers to memory producers and cloud service providers.”
Memory Shortages Loom Amid AI Super Cycle
When asked about potential component shortages, Huang noted that Nvidia’s rapid expansion has created supply bottlenecks across multiple sectors, including memory and networking components.
“There will be shortages of different things as business grows this fast,” he said. “But we have three very, very good memory partners — SK Hynix, Samsung, and Micron — all of whom have scaled up tremendous capacity to support us.”
Huang revealed that Nvidia has already received the most advanced memory samples from all three manufacturers, including next-generation High Bandwidth Memory (HBM4) modules that will power Blackwell GPUs in upcoming data centers. The AI chip super cycle, according to analysts, is driving an unprecedented surge in DRAM and NAND demand — particularly for HBM3E and HBM4 memory — components critical for training AI models that process trillions of parameters.
Memory Partners Prepare For AI Boom
Nvidia’s memory partners have each reported record-breaking demand forecasts:
- SK Hynix recently announced that its entire HBM production for 2026 has sold out, with plans to boost capital expenditure to expand fabrication lines. The company expects an extended AI-driven super cycle, calling it the “strongest semiconductor upturn in decades.”
- Samsung Electronics confirmed it is in close discussion with Nvidia to supply its upcoming HBM4 chips, optimized for AI and hyperscale computing workloads.
- Micron Technology, meanwhile, is expanding production of GDDR7 and LPDDR5X memory, both used in Nvidia’s consumer and enterprise GPUs.
“The AI memory race has just begun,” said market analyst Daniel Yoo of Kiwoom Securities. “Nvidia’s Blackwell platform will anchor demand for HBM4 and future AI-optimized memory for years to come.”
Blackwell: Beyond GPUs — A Full AI Computing Platform
Huang emphasized that the Blackwell ecosystem extends far beyond GPUs. Nvidia has also developed a comprehensive suite of computing components, including CPUs, networking switches, and interconnects designed for massive data throughput and reduced latency.
“The future of AI computing isn’t just about graphics processors,” Huang explained. “It’s about tightly integrating every part of the system — CPUs, networking, storage, and software — to create one coherent AI platform.”
The Blackwell GPU series features Nvidia’s most advanced NVLink and NVSwitch interconnect architecture, allowing up to 576 GPUs to operate seamlessly within a single supercomputer cluster. These clusters form the backbone of AI data centers built by companies like Amazon Web Services (AWS), Microsoft Azure, Google Cloud, and Oracle.
AI Export Controls: No Blackwell Chips For China
Huang also confirmed that Nvidia is not in active discussions to sell Blackwell chips to China, following restrictions imposed by the Trump administration.
“There are no active discussions about selling Blackwell chips to China,” he said.
The U.S. government has tightened export controls on advanced AI chips, citing national security concerns that such hardware could enhance China’s military AI capabilities. Nvidia has previously created modified chips, such as the A800 and H800, to comply with U.S. regulations while continuing limited sales in China. However, Huang made it clear that Blackwell GPUs — Nvidia’s flagship for global AI — are currently off-limits under existing export laws.
“We follow U.S. regulations strictly,” Huang said. “Our focus remains on supporting partners where we are authorized to operate.”
Global AI Supply Chain In Overdrive
The growing synergy between chipmakers, foundries, and memory suppliers has pushed the global semiconductor sector into what analysts are calling a “multi-year AI expansion phase.” According to data from TrendForce, Nvidia alone is projected to consume over 40% of the world’s advanced HBM output by late 2026. TSMC’s wafer utilization rates have also risen sharply, driven by back-to-back orders from Nvidia, AMD, and Apple. Market forecasts suggest the Blackwell generation could sustain Nvidia’s revenue growth well into 2027, supported by demand from AI data centers, enterprise servers, and autonomous computing systems.
Huang: ‘AI Is The New Industrial Revolution’
Concluding his remarks, Huang reflected on the global transformation driven by artificial intelligence, comparing it to the industrial revolutions of the past century.
“We’re at the beginning of a new industrial revolution — the AI revolution,” Huang said. “Every company will become an intelligence company, and every data center will become an AI factory.”
He added that Nvidia’s role is not merely to provide chips but to build a full-stack computing platform that enables industries to accelerate innovation.
“Our mission is to make AI accessible to every enterprise and researcher on the planet,” he said. “Blackwell is the next great leap toward that future.”
US Tariffs Slam Chinese Exports, Triggering Downturn
P&C | Saturday, 08 Nov. 2025
China| Planet & Commerce
China’s Exports Suffer Worst Decline Since February As Tariffs Hit US Demand
China’s export engine sputtered in October 2025, posting its sharpest contraction since February, as Donald Trump’s steep tariffs on Chinese goods dealt a heavy blow to trade with the United States — long Beijing’s largest export market. The 1.1% year-on-year drop in total exports, reversing an 8.3% surge in September, came as Chinese shipments to the US collapsed by more than 25%, underscoring the limits of Beijing’s push to diversify away from its dependency on American consumers. Economists warn the slump signals the fading of front-loaded exports sent earlier this year to beat Trump’s escalating tariff regime, which has lifted the average duty on Chinese imports to around 45% — well above the profit margin threshold for most exporters.
“It appears the rush to ship goods to the U.S. ahead of tariff hikes subsided in October,” said Zhang Zhiwei, chief economist at Baoyin Capital Management. “With export momentum now waning, China may need to rely more heavily on domestic demand.”
China’s Trade Data Highlights Deepening Dependence On US Market
The latest customs data released on Friday revealed that despite Beijing’s extensive efforts to expand trade with Southeast Asia and the European Union, no other market has compensated for the scale of American demand. China’s exports to the European Union grew by just 0.9%, while shipments to Southeast Asia rose 11%, slower than expected. By comparison, exports to the United States plunged 25.17%, highlighting the enduring asymmetry in China’s global trade portfolio. Economists estimate that the tariff impact has shaved about two percentage points off China’s annual export growth, equivalent to roughly 0.3% of GDP — a meaningful hit to an economy already battling sluggish consumption and a prolonged property downturn.
“The global slowdown and the end of front-loading to beat tariffs are combining to create a double shock,” said Alicia Garcia-Herrero, chief economist for Asia-Pacific at Natixis. “Even exports through Vietnam to the U.S., which had surged as firms tried to bypass tariffs, are now decelerating.”
Yuan Weakens As Markets Digest Trade Shock
Following the data’s release, the Chinese yuan weakened modestly against the U.S. dollar, registering its first weekly decline in a month, as traders priced in concerns about slowing external demand and the potential for fresh stimulus.
“The export data underline China’s vulnerability to shifts in U.S. trade policy,” said Iris Pang, Greater China economist at ING. “Even a partial truce does not change the long-term trajectory of decoupling between the two economies.”
Tentative Truce Offers Only Brief Relief
Markets had been cautiously optimistic after a tentative tariff truce between U.S. President Donald Trump and Chinese President Xi Jinping last week, which paused new punitive measures for a year and slightly trimmed existing tariffs. However, the average tariff rate on Chinese goods entering the U.S. remains around 45%, still significantly above the 35% “profit erosion” threshold that many Chinese manufacturers cannot sustain.
“The truce stabilizes sentiment for now, but it doesn’t solve the structural issue,” said Woei Chen Ho, economist at UOB Singapore. “Both countries will continue trying to reduce their interdependence, and we’re going to see the U.S. share of China’s trade drop steadily.”
Despite the tariff tensions, China’s trade surplus with the U.S. rose slightly in October to $24.76 billion, up from $22.82 billion in September, reflecting the resilience of certain high-value sectors like electronics, solar components, and EV batteries.
Beijing Turns To Europe And Southeast Asia
In response to the trade war’s revival, Beijing has intensified efforts to strengthen trade and investment ties with the European Union and ASEAN nations. On Thursday, Chinese officials flagged new prospects for a China-EU trade or investment framework, describing the bloc as “a vital partner amid global fragmentation.” Last month, China recorded a $21.9 billion trade surplus with the EU’s 27 members, boosted by machinery and electric vehicle exports, but analysts say the bloc cannot absorb more than a fraction of the demand lost from the U.S.
“Even if China diversifies, no market can replace the U.S. in the short term,” noted Julian Evans-Pritchard, senior economist at Capital Economics. “The EU and ASEAN can help cushion the blow, but not reverse it.”
Imports Slow Sharply As Domestic Demand Weakens
The October report also revealed tepid domestic demand, with imports rising just 1.0% year-on-year, the slowest pace in five months, down from 7.4% in September and below economists’ forecast of 3.2%. The weakness underscores the challenges facing Beijing’s attempts to rebalance the economy toward consumption-led growth, even as officials push to increase household spending as a share of GDP during the upcoming 2026–2030 policy cycle. China’s imports of soybeans, crude oil, and iron ore rose, supported by favorable commodity prices and record purchases from South America, but copper imports — a barometer of construction activity — declined sharply, reflecting ongoing distress in the property sector.
“High copper prices and a prolonged housing slump are discouraging restocking,” analysts at Nomura wrote in a note. “This suggests construction demand will remain weak through early 2026.”
Policy Response: Fiscal Stimulus On The Horizon
With export growth faltering and domestic demand stagnant, analysts expect Beijing to shift focus toward fiscal expansion and targeted stimulus measures aimed at stabilizing employment and industrial output.
“With intensifying headwinds from weak retail sales and exports, we believe Beijing’s policy focus will again shift toward short-term stability,” Nomura’s note added. “Fiscal expansion will likely be the key focus of Beijing’s policy agenda.”
Officials from the People’s Bank of China (PBOC) have hinted at further liquidity injections, while the Finance Ministry is preparing additional infrastructure spending packages to support local economies and state-owned enterprises facing cash constraints. However, analysts caution that China’s mounting local government debt — now estimated to exceed $13 trillion — limits the scope for aggressive fiscal expansion without risking longer-term financial instability.
Global Supply Chain Recalibration Underway
The latest trade figures highlight the broader realignment of global supply chains as companies continue to diversify manufacturing away from mainland China to Vietnam, India, and Mexico, partly to mitigate tariff exposure and geopolitical risk. While Chinese manufacturers have maintained strong outbound shipments through partner nations, such indirect exports are also likely to slow as front-loaded U.S. orders fade.
“The export boom through Vietnam was a temporary workaround,” said Garcia-Herrero of Natixis. “As front-loading ends, both Vietnam and China will see weaker export growth heading into 2026.”
Beijing’s Balancing Act: Stability Over Growth
For policymakers in Beijing, the data reinforce the delicate balance between short-term economic stabilization and long-term structural reform. The Central Committee’s recent five-year plan emphasized boosting consumption’s share of GDP, reducing reliance on property-driven growth, and nurturing strategic sectors like semiconductors, green tech, and electric vehicles. Yet economists say consumer confidence remains fragile, and the manufacturing sector’s slowdown risks spilling over into broader employment and wage pressures. “October’s data paint a picture of an economy still struggling to find new drivers,” said Larry Hu, chief China economist at Macquarie Group.
“Without strong fiscal stimulus, the slowdown could extend well into 2026.”
Outlook: Trade Pain To Persist Into 2026
Looking ahead, economists predict that China’s export downturn will likely persist into the first half of 2026, as U.S. tariffs continue to bite and global demand remains subdued.
“We expect export growth to remain negative in the coming months,” said Zhiwei of Baoyin Capital. “China will need to rely increasingly on domestic consumption and regional partnerships to sustain growth.”
While the Trump-Xi truce has reduced immediate trade friction, it has not reversed the structural decoupling trend that now defines U.S.-China relations. Analysts say the 45% tariff environment will continue to constrain profit margins and accelerate China’s shift toward self-sufficiency and regional trade blocs.
US Lawmaker Urges New Global Trade Rules for China’s Rise
P&C | Thursday, 25 Sep. 2025
China| Planet & Commerce
A Rare Bipartisan Visit to China
In a significant diplomatic overture, a U.S. congressional delegation visiting China this week openly acknowledged the need to renegotiate global economic rules to account for the growing influence of China and other emerging powers such as India and Brazil.
Speaking in Shanghai at the conclusion of a five-day trip, Rep. Adam Smith (Democrat, Washington State) underscored the importance of updating the international economic order, originally designed in the aftermath of World War II, to reflect today’s realities.
His remarks aligned with Chinese President Xi Jinping’s call for a fairer global governance system, one that better represents developing countries and the Global South.
“We Understand That Things Have Changed”
Smith, who chairs the House Armed Services Committee, told Shanghai Mayor Gong Zheng that while the U.S.-led post-war order has served many nations well — including China — it is no longer adequate.
“We understand that things have changed,” Smith said, stressing that the rise of China, India, Brazil, and other emerging economies requires new economic frameworks that are more inclusive and equitable.
Smith’s candor was notable: a senior U.S. lawmaker recognizing China not just as a competitor but as a partner in shaping global rules.
The Delegation: A Symbol of Bipartisanship
The visit marked the first by U.S. House members since 2019, reflecting efforts to restore communication channels between Washington and Beijing amid a turbulent relationship.
The delegation included:
- Rep. Adam Smith (D-WA)
- Rep. Ro Khanna (D-CA)
- Rep. Chrissy Houlahan (D-PA)
- Rep. Michael Baumgartner (R-WA)
Their itinerary included three days in Beijing followed by meetings in Shanghai with government officials, the American Chamber of Commerce, and business leaders.
Smith emphasized that the main goal was communication and trust-building — a message that contrasted with the often adversarial tone of U.S.-China relations.
Business on the Ground: McDonald’s and Starbucks as Symbols
In informal comments, Smith pointed to the proliferation of McDonald’s outlets in China as evidence of deep commercial ties despite tariff battles and trade disputes.
“A lot of business is going on between the two economies despite the ongoing trade and tariff war,” he told reporters.
The lawmakers were even spotted at a Starbucks in Shanghai, underscoring how American consumer brands remain firmly entrenched in the Chinese market.
Still, Smith acknowledged that tariffs and trade barriers are creating serious difficulties for companies on both sides of the Pacific.
Shanghai’s Exposure to the Trade War
Smith pressed Mayor Gong Zheng on how the U.S.-China tariff war has impacted Shanghai’s economy.
Gong was frank:
- As one of the world’s busiest shipping hubs, Shanghai is highly exposed to international trade flows.
- The tariff war has had a direct impact on shipping volumes, manufacturing, and supply chains.
- While China remains committed to negotiations, Gong reiterated Beijing’s stance:
“There are no winners in trade wars, but China will fight back if there is a war while remaining open to dialogue.”
He also noted that four rounds of trade-related meetings — in Geneva, Stockholm, London, and Madrid — have already taken place since May, signaling cautious progress in negotiations.
Smith’s Proposal: A New Debate on Global Economic Rules
Smith went beyond tariff disputes, calling for a serious debate on rewriting global economic rules:
“China and the U.S. are the two most important players in how we resolve that. How do we get to an international rules-based order that is more agreeable to everyone?”
His remarks highlight an emerging consensus among U.S. lawmakers that the post-war Bretton Woods system — including the IMF, World Bank, and WTO — must evolve to reflect the 21st century balance of power.
China’s Perspective: More Representation for the Global South
Beijing has long argued that the current order disproportionately benefits wealthy nations, especially the U.S. and Europe.
- A Chinese Foreign Ministry document released this week stressed:
“The collective rise of emerging markets and developing countries necessitates boosting the representation of the Global South.”
- China insists it does not want to overthrow the current order but to reform it so that it better serves all nations, particularly developing ones.
Xi Jinping’s government has consistently promoted alternative forums such as BRICS and the Shanghai Cooperation Organisation (SCO) while still participating in traditional institutions.
Parallel Narratives: Trump’s Tariffs vs. Xi’s Governance Reform
The timing of Smith’s comments also carries a deeper geopolitical undertone:
- President Donald Trump has intensified tariffs on Chinese goods and framed Beijing as a strategic rival undermining U.S. workers and industries.
- In contrast, Xi Jinping is seeking to position China as a champion of global reform, portraying his government as a voice for equity and inclusivity in the international order.
Smith’s remarks, therefore, serve as a bridge: acknowledging the U.S. frustrations with China while conceding that global institutions must adapt to new realities.
Implications for U.S.-China Business
Despite tensions, the trip highlighted the enduring interdependence of the U.S. and Chinese economies.
- American firms like McDonald’s, Starbucks, and Apple continue to expand in China.
- Chinese manufacturers remain deeply linked to U.S. supply chains.
- The tariff war has caused disruptions but has not severed economic ties.
Business leaders in Shanghai expressed hope that policy adjustments could reduce uncertainty, especially for companies investing long-term in both markets.
Military-to-Military Communication: Another Key Takeaway
Beyond trade, the delegation also stressed the need for U.S.-China military dialogue.
As Smith noted:
“Two of the largest nuclear powers in the world need to be talking to each other, particularly considering the fact that we do have some disagreements.”
This reflects Washington’s concerns over Taiwan, the South China Sea, and cyber operations, all of which risk military miscalculation without open communication.
The Broader Context: India, Brazil, and Emerging Powers
Smith emphasized that the conversation is not only about the U.S. and China.
- India is expected to become the world’s third-largest economy within the decade.
- Brazil has reasserted itself as a leader of the Global South under President Lula da Silva.
- Other middle powers are demanding greater influence in decision-making at the WTO, IMF, and World Bank.
The collective rise of emerging markets means that the U.S. and China will increasingly be joined by others in reshaping global economic governance.
Challenges Ahead: Can the Rules Be Rewritten?
Revising global rules will not be easy:
- Diverging Interests: The U.S. wants fairer market access, China wants protection for its developing sectors, and smaller nations want more representation.
- Tariff Battles: Ongoing disputes over steel, semiconductors, and technology remain unresolved.
- Institutional Paralysis: The WTO’s dispute system remains crippled, and Bretton Woods institutions are slow to reform.
Yet the fact that both Washington lawmakers and Beijing leaders are talking about renegotiation suggests momentum toward eventual compromise.
Conclusion: A Shift Toward Dialogue
The congressional delegation’s trip may not have yielded breakthroughs, but it marked a shift in tone.
- Adam Smith’s acknowledgment that global rules must be updated for China’s rise signals an openness to structural reform.
- Xi Jinping’s calls for a more equitable order are being echoed, at least partially, in Washington’s debates.
- Business leaders on both sides are pushing for solutions to end the costly tariff war.
The road ahead will be fraught with challenges, but the first House delegation to China since 2019 has underscored one simple fact: the U.S. and China may be rivals, but their economic destinies remain deeply intertwined.
China Targets Online Pessimism Amid Economic Slowdown
P&C | Thursday, 25 Sep. 2025
China| Planet & Commerce
From Politics to Pessimism
For years, China’s powerful internet censors have focused on removing political dissent, blocking sensitive historical references, and silencing criticism of the Communist Party leadership. But in a striking new development, Beijing is now turning its focus toward something less overtly political but just as telling — pessimism.
The Cyberspace Administration of China (CAC) announced this week a two-month nationwide campaign against what it calls “negativity” on social media, livestreaming sites, and short-video platforms. The regulator says the goal is to combat “nihilistic” narratives, despair-driven lifestyles, and “defeatist” worldviews spreading online amid China’s prolonged economic slowdown.
Why Negativity Became a Target
China’s economic climate has changed dramatically in recent years:
- A prolonged property crisis has undermined consumer confidence.
- Youth unemployment has surged, with official data showing a two-year high of 18.9% for 16–24-year-olds (excluding students).
- Retail sales and factory output both dropped to their lowest levels in months, signaling stagnation in consumption and manufacturing.
This grim reality has spawned cultural trends like “lying flat” (tang ping) — a lifestyle where young people reject high-pressure work culture in favor of simplicity and minimalism — and, more recently, “rat people,” who embrace an isolated existence of staying in bed and ordering delivery.
Such terms have become online memes, but for Beijing, they represent a dangerous collective mood that could weaken consumer spending and long-term economic growth.
What Content Is Being Censored?
According to the CAC’s statement, the campaign will target posts and accounts that:
- “Maliciously misinterpret social phenomena” by exaggerating negative news.
- Promote nihilistic or defeatist worldviews, such as the belief that “effort is useless.”
- Amplify feelings of despair or encourage excessive self-deprecation.
- Incite group confrontation, online hostility, or fear.
- Spread economic rumors or unverified claims about unemployment and housing markets.
- Sell products by “exploiting anxieties” about careers, education, or relationships.
The crackdown also extends to celebrity gossip and “trivial matters” that dominate trending lists, which regulators say distract from “constructive discourse.”
Platforms Under Pressure
Several major Chinese platforms have already faced penalties this month for failing to control online content:
- Weibo, the country’s Twitter-like platform.
- Kuaishou, a TikTok competitor.
- Xiaohongshu (RED), a popular lifestyle and shopping app.
These companies were accused of allowing harmful information and celebrity hype to dominate conversations. Under the new campaign, they will face stricter oversight and accountability for user content.
Bloggers and the “Lying Flat” Community Silenced
The crackdown has already hit influencers who documented “lying flat” lifestyles. Multiple accounts and videos promoting minimalist living, quiet quitting, or despair-laden humor have been removed.
While some creators see their content as harmless self-expression, Beijing views it as socially corrosive in an era when authorities are desperate to restore optimism and encourage young people to work harder, spend more, and marry earlier.
The Official Justification
State-run media quickly praised the campaign as a necessary corrective.
“The harm of such maliciously divisive content is significant. It can trigger collective misunderstandings and social panic, marginalize reason and facts, and even spark offline conflicts, causing long-term damage to public order and social trust,” one commentary wrote.
Officials argue that negativity breeds instability and can discourage citizens from pursuing opportunities. By managing public sentiment online, Beijing hopes to rebuild consumer confidence and keep social cohesion intact during tough economic times.
Expert Views: Suppressing Symptoms, Not Causes
Observers, however, warn that the policy may only mask the problem rather than solve it.
- Ja Ian Chong, professor of political science at the National University of Singapore, noted:
“There appears to be a significant lack of motivation, even pessimism, among Chinese people regarding individual prospects. While the crackdown may change the tone online, general sentiment is less likely to change without better life and career opportunities.”
He emphasized that youth disillusionment is rooted in real issues: high joblessness, poor upward mobility, and declining housing affordability.
Without addressing these, censorship may merely push young people to create new slang terms and coded language to express frustration — a recurring pattern in China’s internet culture.
The Rise of “Rat People” and Creative Resistance
Already, Chinese netizens have coined new phrases like “rat people” to describe those burrowing into small personal spaces and avoiding public life. This reflects both creativity and resistance.
- When “lying flat” was suppressed, “let it rot” (bailan) emerged as a substitute.
- Now, with “rat people” trending, analysts expect Beijing to continue chasing evolving online slang.
The cycle highlights how censorship struggles to erase cultural moods that stem from real-world frustrations.
The Economic Backdrop: Why Pessimism Hurts the Party
China has set an annual GDP growth target of 5%, but:
- Factory output recently hit a 12-month low.
- Retail sales dropped to a 9-month low.
- Youth unemployment has reached crisis levels.
For the Communist Party leadership, public pessimism is not just an image problem — it threatens the social contract that underpins its legitimacy: continued economic growth in exchange for political control.
By silencing despair online, Beijing hopes to prevent consumer retrenchment that worsens the slowdown. But the move also signals the government’s sensitivity to online narratives shaping offline behavior.
A Broader Pattern of Information Control
This campaign against pessimism is part of a broader tightening of digital spaces in China.
- Political dissent is already heavily censored.
- Historical events like Tiananmen Square remain taboo.
- Now, even cultural memes, jokes, and lifestyle trends face scrutiny if they contradict official optimism.
The regulator has also called on the public to report cases of negative content, reinforcing a surveillance culture where citizens monitor one another.
International Perception: Control vs. Confidence
Globally, the move is seen as another sign of Beijing’s willingness to engineer public sentiment.
For critics, it underscores the Party’s insecurity amid slowing growth and external pressures like U.S. tariffs and geopolitical tensions. For supporters, it shows determination to guide society through difficult times.
The real test will be whether suppression of negativity can translate into renewed confidence and higher consumption — or whether it simply deepens cynicism.
Conclusion: Fighting Mood with Censorship
China’s campaign to silence pessimism marks a new frontier in internet control. It reflects a government acutely aware of the dangers of despair — not just for individuals but for the stability of the economy and the state.
But experts caution that optimism cannot be manufactured by deleting memes. Unless Beijing can create better jobs, affordable housing, and genuine upward mobility, young Chinese will likely keep finding new ways to express their frustrations online — no matter how often censors intervene.
For now, the battle over mood joins the long-running battle over politics in the digital space, highlighting the Party’s conviction that in China’s future, even feelings must be managed.
Xi Jinping Skips UN as Li Qiang Represents China Globally
P&C | Thursday, 25 Sep. 2025
China| Planet & Commerce
Xi’s Surprising Absence at the UN
In what many analysts view as a symbolic shift in China’s diplomacy, President Xi Jinping did not personally address the United Nations General Assembly’s 80th anniversary session in New York this week. Instead, Premier Li Qiang — China’s No. 2 leader — represented Beijing, holding a series of high-profile meetings with world leaders.
The absence was notable. China has historically used the UN stage to emphasize its commitment to multilateralism and to counterbalance what it calls U.S. “bullying” in global affairs. Xi spoke at the UN in 2015 and again via video in 2020 during the COVID-19 pandemic. But this year, amid strained U.S.-China relations and with his health and leadership style evolving, Xi chose to remain in Beijing.
From Global Traveler to Strategic Homebody
Xi’s decision marks a striking contrast to his first seven years in power, when he was a relentless world traveler:
- In 2015, Xi rode in a horse-drawn carriage with Queen Elizabeth II at Buckingham Palace.
- In 2017, he dined with Donald Trump at Mar-a-Lago.
- He launched ambitious initiatives like the Belt and Road Initiative (BRI) and the Asian Infrastructure Investment Bank (AIIB).
Back then, Xi’s goal was clear: elevate China’s global stature and present himself as an indispensable world statesman.
But after the COVID-19 pandemic, Xi’s travel slowed sharply. He skipped the 2023 G20 Summit in India and this year’s BRICS Summit in Brazil, sending Li Qiang in his place. Analysts believe Xi is deliberately curbing his overseas appearances while consolidating power at home.
Why Xi Skipped the UN This Year
Several factors explain Xi’s decision:
- U.S.-China Tensions: Trade talks with Washington remain unresolved. Both sides want a Trump-Xi meeting, but the UN was seen as “too early” with little progress to announce. Instead, the two leaders are expected to meet at the APEC Summit in South Korea in October.
- Health and Age: At 72, Xi is showing signs of conserving energy. Analysts suggest his reduced travel schedule is part of a strategy to preserve health while maintaining ultimate control.
- Delegation to Loyalists: Having filled the Communist Party leadership with loyal allies in 2022, Xi can now safely delegate high-profile tasks to figures like Li Qiang without losing authority.
- Symbolism of Beijing as the Center: As China’s influence grows, foreign leaders increasingly come to Beijing rather than expecting Xi to travel abroad. This dynamic reinforces Xi’s image as the center of global diplomacy.
Li Qiang Steps Into the Spotlight
Li Qiang’s appearance at the UN marked a coming-of-age moment for China’s premier.
- Once viewed as a technocrat with limited global profile, Li now plays the role of interlocutor between Xi and the world.
- At the UN, he met European Commission President Ursula von der Leyen, Canadian Prime Minister Mark Carney, and Austrian Chancellor Christian Stocker.
- He announced that China would no longer seek developing-country privileges in global trade negotiations — a significant policy shift framed as a goodwill gesture.
Analysts note that Li is not acting independently but rather as Xi’s envoy.
“He’s acting on Xi’s behalf, and will be able to relay messages between Xi and the world,” said Neil Thomas of the Asia Society Policy Institute.
Xi Keeps Climate Policy for Himself
Even while delegating major speeches, Xi retains control of high-profile issues.
- At the UNGA, Xi delivered a video address to unveil China’s 2035 climate goals, including pledges to cut emissions by 7–10% and expand renewable capacity.
- By keeping climate policy under his direct authority, Xi signaled that while Li may handle trade diplomacy, strategic global issues remain under his control.
Loyalty Over Competence: The Rise of Li Qiang
Li Qiang’s rise illustrates Xi’s preference for loyalty over controversy.
- As Shanghai’s top official, Li oversaw a two-month COVID-19 lockdown in 2022 that triggered widespread protests.
- Instead of punishment, he was promoted to premier in 2023 — demonstrating Xi’s reliance on trusted loyalists.
Alfred Wu, a political scientist in Singapore, explained:
“It shows how loyalty takes precedence in the Xi era. He’s delegating, but it’s not decentralization. He’s asking people to act on his behalf.”
Xi’s “Oracular Leadership Style”
Analysts argue Xi is shifting toward what Neil Thomas calls a “more oracular leadership style.”
- Xi remains the final authority on all major decisions.
- Loyal subordinates like Li Qiang execute policy, attend summits, and handle negotiations.
- This model allows Xi to conserve his energy while reinforcing his dominance in Beijing.
The approach mirrors China’s imperial tradition, where emperors received emissaries at court rather than traveling abroad.
The Global Implications
Xi’s reduced travel schedule could reshape how the world engages China:
- Li Qiang as Gatekeeper: Foreign governments and businesses must increasingly deal with Li, who carries Xi’s mandate but may have limited room for flexibility.
- China as the Center: By staying home, Xi signals that Beijing is the diplomatic hub, compelling leaders to visit him rather than expecting reciprocal trips.
- Uncertainty in U.S.-China Relations: With Trump pressing tariffs and China cautious, the APEC Summit in South Korea will be a crucial test of whether Xi resumes face-to-face diplomacy.
- Perception of Weakness vs. Strategy: Some observers may see Xi’s absence as a sign of waning stamina, while others interpret it as a strategic move to elevate his stature.
Delegation Without Decentralization
It is crucial to note that Xi’s delegation does not signal power-sharing.
- The 2022 Communist Party reshuffle eliminated dissenting voices.
- Xi remains at the apex of decision-making, with ultimate power tightly centralized.
- Li Qiang and other officials function as extensions of Xi’s will.
This ensures that while Li gains visibility, he does not gain independent authority.
Conclusion: Xi Withdraws but Retains Control
Xi Jinping’s absence from the UN General Assembly reflects a new phase of Chinese leadership.
- Once a globe-trotting statesman, Xi is now adopting a more homebound, oracular style.
- Premier Li Qiang is emerging as the face of Chinese diplomacy, but only as Xi’s envoy.
- The shift highlights Beijing’s confidence that foreign leaders will come to China — and that ultimate power rests firmly with Xi.
As China navigates trade disputes, climate policy, and global governance debates, the world may increasingly find itself negotiating not directly with Xi, but with the loyal lieutenants he has entrusted to carry his message.