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China warns AI executives over US travel
Chinese national flags flutter near Tian'anmen Square ahead of China's annual sessions of its top legislature and political advisory body, known as the "Two Sessions," on March 3, 2025, in Beijing.
Viewpoint: China’s annual NPC meeting to address lackluster economy and Trump threat
A sluggish economy and new headwinds created by Donald Trump’s return to the White House will be prominent themes when the nearly 3,000 delegates of China’s National People’s Congress, or NPC, convene in Beijing starting Wednesday. The legislative session will run for about seven days (time not fixed) in parallel with that of the National Committee of the Chinese People’s Political Consultative Conference, or CPPCC. The so-called Two Sessions represent China’s biggest annual political gathering and provide insight into the leadership’s priorities for the year ahead.
We asked Eurasia Group expert Lauren Gloudeman what to watch out for.
What are the NPC and CPPCC?
The NPC is China’s highest governmental organ and national legislature. It usually convenes just once a year to advance legislation and approve national policy plans; the smaller Standing Committee of the National People’s Congress meets more often to continue the body’s legislative work. The CPPCC unites about 2,000 representatives of different social and political groups, giving them the opportunity to make their views known to the country’s leadership. Its role is more symbolic than anything else.
How does the NPC fit into China’s broader governance framework?
On the one hand, you have organs of government such as the NPC and the State Council, which implements legislation passed by the NPC and supervises the bureaucracy. On the other hand, you have the Chinese Communist Party, with its decision-making bodies such as Politburo and the Central Committee. The relationship between the government and the party has changed over time. Xi Jinping – general secretary of the party and president of the Chinese state – has made it a priority to assert the party’s authority over the government. Li Qiang, the party’s No. 2 official is premier of the State Council; Zhao Leji, the party’s No. 3 official, heads the NPC.
Are the Two Sessions’ proceedings open to the public?
The first couple of days will be open-door sessions of public speeches, reports, and press conferences. Li will present his so-called government work report. Like the US president’s state-of-the-union speech, the work report reviews the achievements of the past year and identifies key tasks ahead for the government. It usually sets economic targets. In addition, Xi will give remarks and the Ministry of Finance will give a budget report. Then there will be several days of closed-door sessions, during which not much information will emerge. At the end, different ministries will follow up with press conferences about their plans to advance policies discussed at the NPC.
What do you expect will be the main topics of discussion?
One major topic will be what to do about weak consumer spending, which has been a challenge for years now – especially since the COVID-19 lockdowns, when some people couldn’t leave their homes for months. Nonetheless, we’re not expecting a sea change in the policy approach to stimulating spending. More likely is an expansion of existing trade-in programs that offer subsidies for consumers to trade in their old EVs, household appliances, and other consumer goods for new ones.
What else would you highlight?
On a related note, officials will discuss measures to promote private enterprises. One of the reasons consumer spending is weak is that so many businesses struggled during the pandemic and continue to struggle, which has affected hiring. Authorities aggravated these problems in the private sector with an aggressive regulatory campaign against major companies they thought were insufficiently aligned with the party’s national development strategy. Now they are trying to repair the damage. Xi met last week with the leaders of 20 or 30 companies to reassure them that the government cares about stabilizing the private sector, and the NPC is expected to discuss a so-called private economy law. This measure could, for example, codify into law that private companies have equal rights and status with state-owned companies and offer guarantees of payment for private companies doing business with local governments.
How do you expect tensions with the Trump administration – which has slapped new tariffs on China and threatened more – to play into the NPC discussions?
The NPC is not an event that reacts to or is calibrated around recent events. That said, since Trump took office, we’ve been seeing the party’s high-level talking points acknowledging “external uncertainty” – which is code for Trump-related risks. Its response has been to make it clear to the country that it is committed to increasing support for the domestic economy to boost confidence. I expect these themes to be prominent at the Two Sessions.
Edited by Jonathan House, senior editor at Eurasia Group.
Prime Minister of the Cook Islands Mark Brown, seen here at the White House in Washington, in 2023.
China cooks up trouble in the South Pacific
The Cook Islands’ recent entry into a strategic partnership with China has spawned protests in front of Parliament, angered long-time ally New Zealand, and this week, nearly toppled the islands’ government.
On Wednesday, Cooks Prime Minister Mark Brown survived a 13-9 no-confidence vote. Opposition legislators were angry that Brown did the deal with Beijing in secret, jeopardizing the country’s long-standing relationship with Wellington, which New Zealand Foreign Minister Winston Peterssaid will now have to be “reset.” Brown’s partnership with China also follows an unsuccessful pitch last December to create a Cooks passport and citizenship, which also did not sit well with both Kiwis and islanders.
What is the Cooks’ connection with NZ? The Cooks became partially independent in 1965, but its 15,000 residents receive NZ citizenship and passports and use the NZ dollar. New Zealand has also committed over US$57 million in aid since 2022 and supports both foreign affairs and defense.
What did China offer? Beijing pledged a five-year “action plan,” including $4 million for education, the economy, infrastructure, fisheries, disaster management, and, most controversially, seabed mining for nodules rich in nickel and cobalt.
China’s larger agenda The Cooks are just the latest South Pacific nation to sign a deal with Beijing. Kiribati has signed a series of development agreements in recent years, even hosting Chinese police stations, as have the Solomon Islands. China has also persuaded both countries, as well as nearby Nauru, to switch diplomatic recognition from Taiwan to the mainland.Biden tightens China’s access to chips one last time
Throughout Joe Biden’s presidency, the Commerce Department has gradually tightened its chokehold on China’s access to semiconductors needed to access, train, and build artificial intelligence. On Dec. 2, Commerce Secretary Gina Raimondo announced what she told reporters amounted to the “strongest controls ever” meant to restrict China’s access to AI for military applications. Today, China responded with its own new restrictions, sending a strong signal to the incoming US president.
The new US controls announced Monday, the third order in as many years, apply to 24 types of semiconductor manufacturing equipment, three types of software tools, and high-bandwidth memory, or HBM, an interface often used in producing AI chips. The department also added 140 Chinese companies to its Entity List, which requires regulatory approval should a US company wish to sell to a member of the list. “By adding key semiconductor fabrication facilities, equipment manufacturers, and investment companies to the Entity List, we are directly impeding the PRC’s military modernization, WMD programs, and ability to repress human rights,” said Matthew Axelrod, assistant secretary for export enforcement at the Commerce Department.
In response, on Dec. 3, China banned shipments of certain materials using gallium, germanium, and antimony to the US, as well as super-hard materials such as diamonds. These items can be used both for military and semiconductor applications. “China firmly opposes the US overstretching the concept of national security, abuse of export control measures, and illegal unilateral sanctions and long-arm jurisdiction against Chinese companies,” said Lin Jian, a Chinese Foreign Ministry spokesperson.
Jacob Feldgoise, an analyst at Georgetown University’s Center for Security and Emerging Technology, said the new US order plugged holes in the previous year’s rules. It requires a license for many more exported tools, focuses on high-bandwidth memory “because HBM is used by nearly all of the most capable AI chips” and strengthens the US’s grasp beyond its borders. “Notably, this set of controls is newly extraterritorial: It will impose licensing requirements on certain foreign-produced tools so long as they contain US technology,” Feldgoise said.
Xiaomeng Lu, director of Eurasia Group's geo-technology practice, noted that the US excluded the Chinese semiconductor company ChangXin Memory Technologies from the Entity List to appease the Japanese government. CXMT has been buying materials from Japanese suppliers to make its memory chips. “With the Trump administration on its way, they are expected to take a more unilateral approach and will be less likely to make concessions per requests of allies,” she said.
Jeremy Mark, a nonresident senior fellow at the Atlantic Council's GeoEconomics Center, said it’s difficult to judge how significant these new rules are because of the looming change of guard in the White House. Had they come ahead of the transition to a Kamala Harris administration, “they would continue making life complicated for Chinese semiconductor companies and US companies that rely on the China market for a significant portion of their sales.” However, Mark said that Donald Trump could strengthen or weaken export controls when he takes office, so it’s “impossible to say” what the legacy of this final move will be.
For Biden, it marks the end of an era of success: While his restrictions on China could have been tighter or less porous, he leaves office with China still searching for AI breakthroughs. The US, at least under Biden’s watch, is still on top.
But China’s next-day retaliation shows that it is ready to play hardball ahead of the incoming Trump administration. Beijing understands that diplomacy alone might not do the trick, and that to succeed in getting America to the bargaining table it needs to safeguard its own crucial resources. “This is a step up in China’s reaction to US technology sanctions,” Lu said. “China is very frustrated with the lack of communication channels with the incoming administration. They are trying to send a shot across the bow to get attention from the Trump team.”
Pony.ai and its first automatic driving system production line, as seen in Shanghai, in 2020.
A Chinese autonomous vehicle firm is going public in the US
On Oct. 17, a Chinese autonomous vehicle company called Pony AI filed to go public in the United States through an initial public offering. The company is the latest Chinese firm to seek entry into the US public markets after Beijing eased its restrictions on its domestic private sector seeking foreign investment and listing on US exchanges. The Chinese electric vehicle startup Zeekr began trading on the New York Stock Exchange in May.
Pony AI, which makes robotaxis, has ties to both China and Silicon Valley, but it’s also backed by the Japanese automaker Toyota and Saudi Arabia’s NEOM Investment Fund. China’s securities regulator approved Pony AI to list on either the Nasdaq or the NYSE in April.
The US and China are currently feuding over artificial intelligence, each vying to become the global leader in the technology and gain a strategic edge — but that battle, which largely focuses on chips and tech infrastructure, is unlikely to affect this deal. The US Securities and Exchange Commission has previously pushed for tougher rules about Chinese companies going public on US stock exchanges, but that’s largely affected those going public through shell companies — a popular workaround to Chinese restrictions — rather than through traditional IPOs.Military vehicles carrying DF-41 intercontinental ballistic missiles travel past Tiananmen Square during the military parade marking the 70th founding anniversary of the People's Republic of China, on its National Day in Beijing, China, on Oct. 1, 2019.
Beijing flexes nuclear muscle, sends signal to US
Why now? Conducting a rare and provocative test might seem out of step with the softer touch Beijing has taken in foreign affairs this year. It comes in the middle of the United Nations General Assembly, just ahead of a planned phone call between Presidents Joe Biden and Xi Jinping, and just after the People’s Bank of China announced a raft of measures to fight persistent economic malaise.
Eurasia Group expert Jeremy Chan says a few causes could be behind the timing of the launch, most of which seem directed at the US. Though Beijing has been attempting to stabilize relations with Washington, increasing closeness between American allies like Japan, the Philippines, and South Korea makes China feel hemmed in. Frustration is also growing in Beijing over tightening US-led export controls on China’s access to advanced technology, as well as expanded sanctions against Chinese firms for their alleged support for Russia’s defense industrial base. Beijing is likely also angered by the US backtracking on earlier commitments made to China to withdraw a Typhon missile system that has been deployed to the Philippines since April. Shooting a city-killer missile just north of the archipelago’s largest island may serve as a useful reminder.
“Beijing might be saying ‘We’re not happy about the US backing away from its commitment to remove the Typhon system, and we’re going to express our displeasure by flying our long-range missile directly over the location of your mid-range missiles,’” Chan explains.
We’re watching whether the US and the Philippines get the message and whether the incident comes up as Biden prepares for the last few set pieces over which he will preside in the US-China relationship.
Russian President Vladimir Putin takes part in a wreath-laying ceremony at the Tomb of the Unknown Soldier by the Kremlin Wall on the Defender of the Fatherland Day in Moscow, Russia, Feb. 23, 2023.
Hard Numbers: Putin eyes more troops, Liberals lose in Montreal riding, Beijing frees American, Deadly clashes in New Guinea, Gazan children vaccinated, Nigerian prison escape
180,000: Uncle Vladimir wants … more troops. The Russian president on Monday ordered that his country’s army be enlarged to 1.5 million active troops, an increase of 180,000 soldiers. If successful, the growth would make Russia’s military the second largest worldwide, with China in the No. 1 spot.
28: Canada’s Liberal Party lost another big byelection on Monday in Montreal’s LaSalle-Émard-Verdun riding. Between this loss to Bloc-Québécois and a June loss to Conservatives in Toronto-St. Paul’s, PM Justin Trudeau’s party has seen a summer bookended by major losses in so-called Liberal strongholds. Preliminary results from Monday’s vote show it was so close that the BQ beat the Liberals by less than a percentage point, 28% to 27.2%. But don’t expect Trudeau to step down: He said before the polls opened that he would stay on as party leader whatever the result.
18: On Sunday, Beijing releasedDavid Lin, an American pastor who had been wrongfully detained in China for 18 years, partially fulfilling the White House’s repeated requests to hand over detainees. Washington is also seeking the release of Kai Li and Mark Swidan, who have been detained in China since 2016 and 2012, respectively. Their detentions are scheduled for a congressional hearing on Wednesday.
50: Up to 50 people have died in ongoing fighting among illegal mine operators in Papua New Guinea’s Porgera Valley, the UN announced Monday. Security forces have reportedly started deploying in the valley, which was also the site of a landslide that killed up to 2,000 people in May, but violence, especially inter-tribal violence, is a growing problem that New Guinea has few resources to address.
90: UN health authorities in Gaza announced on Monday that they have vaccinated 90% of the 640,000 children with their first dose against polio, a major humanitarian accomplishment amid the ongoing fighting. UNRWA says it’s now focused on getting the vaccine to the remaining children and setting up for the second dose in about two months.
274: At least 274 inmates in a Nigerian prison in Borno state have escaped after major floods caused walls in the facility to collapse. Around 4 million Nigerians have been affected by the floods, and at least 1,000 people across West and Central Africa have died.A Philippine flag flutters from BRP Sierra Madre, a dilapidated Philippine Navy ship that has been aground since 1999 and became a Philippine military detachment on the disputed Second Thomas Shoal, part of the Spratly Islands, in the South China Sea March 29, 2014.
China and Philippines sign South China Sea deal
Manila announced Sunday it had reached a “provisional agreement” with Beijing aimed at establishing an arrangement in the South China Sea that both sides can live with — without renouncing territorial claims. The text of the deal has not yet been released.
The agreement builds off last week’s announcement of the establishment of presidential hotlines and signals a desire for de-escalation by both countries – following a serious clash on June 17. But the key word in this agreement is “provisional” as both Beijing and Manila are already showing irreconcilable differences in their positions.
China had previously told Manila it could not bring construction materials to the wreck of the Sierra Madre, a decrepit hulk deliberately beached on the South Thomas Shoal by Manila to give it de facto control. Without repairs, the ship will likely break apart soon. But Beijing claims Manila agreed to give China advanced notice and allowed inspections of shipments sent to the marines it keeps stationed there carrying food and supplies. A senior Filipino official told the Associated Press that the final deal did not require the Philippines to pre-notify the Chinese of shipments.
What to watch? A deal to cool temperatures in the South China Sea would be welcome news for all parties, including the US. “The next big test,” says Eurasia Group senior China analyst Jeremy Chan, “will be how both Manila and Beijing behave on future resupply missions, and whether either side can cede any ground.”