China

1. EU readies for trade fight
2. UK readies for trade fight
3. Japan firms exit en masse
4. How a trade weapon failed
5. US targets solar progress
6. An open source challenger
7. A superpower AI agent race
8. Global espionage allegations
9. Brazil faces tricky choice
10. Growing surrogate demand

We watch the China watchers, and dig into the growing trend of betrothed couples opting for highly produced wedding films.

For at least a quarter of a century, US military strategists have calculated that if China moved aggressively against Washington’s allies in Asia — by imposing a naval blockade on Taiwan, or threatening Japan’s vital sea lanes — the US Navy could, as a last resort, weaponize oil against Beijing.

Most of China’s seaborne oil imports flow through the Strait of Malacca, a narrow waterway that links the Indian Ocean and the South China Sea. Block that passage, the thinking went, and China’s economy would be crippled.

The war in Iran has shattered those assumptions. Not only has China’s economy survived the oil supply disruption largely unscathed, but its enormous oil stockpiles, overland pipelines, new technologies to convert coal to chemicals, and embrace of green technologies have given Beijing strategic leverage. By contrast, the island economies around China, including Japan, Taiwan, and the Philippines — all overwhelmingly reliant on imported energy — are struggling.

The Trump administration, meanwhile, is facing the increasingly fraught economic and political fallout of rising inflation as a result of the energy shock.

As long ago as 2003, former Chinese leader Hu Jintao raised concerns about what he called the “Malacca Dilemma,” revealing a deep insecurity that has been a key driver of Beijing’s industrial, military, and diplomatic strategy ever since. Indeed, the trillion-dollar Belt & Road Initiative is in large part a defensive maneuver, born of a desire to reduce China’s susceptibility to maritime threats from the US by looking inland to the vast Eurasia continent.

Today, Beijing has transformed what was once a chronic vulnerability into a source of strength and begun to redraw the geopolitical map of its region.

EU readies for trade showdown

The EU’s biggest economies geared up for a clash with China, fueled by growing frustration with a bilateral trade imbalance that politicians contend is hollowing out the bloc’s industries. In a joint letter ahead of a summit of national leaders, France and Germany called for Brussels to enact proposals that allow for countries deemed harmful to be immediately cut off from accessing the bloc’s businesses and consumers; Paris and Berlin did not explicitly reference Beijing, but their complaints of “systemic market-distorting practices” made clear whom they had in mind. The urgency of their push comes as major European companies undergo huge job losses — Volkswagen plans to cut 100,000 workers — which experts have said could drive political upheaval.

UK to impose tariffs on China EVs

The UK is reportedly preparing to impose tariffs on Chinese EVs amid growing pressure from the EU. The US has effectively cut off Chinese EVs, while the EU levies duties of up to 45%. The UK has been an outlier, but Brussels, concerned that Britain could become a backdoor for Chinese automakers to enter Europe, warned London that it could be cut off from the “Made in Europe” program unless it imposed levies, The Times of London said. The UK is facing a “difficult trade-off,” a UK consultant said: Tariffs could raise prices for British drivers who have embraced Chinese cars — Chery’s Jaecoo 7 was the UK’s bestselling vehicle in September — but access to Europe is “crucial” to smaller manufacturers.

Japan firms head for the exits

Japanese companies are exiting China in record numbers — their presence is down 30% from its 2012 peak — amid slowing Chinese growth, US tariffs, and geopolitical tensions. Tokyo has been pressing companies to reshore production from China or move elsewhere. But there are limits to how far Japan wants to decouple: Tokyo wants China to remain dependent on Japan for key industrial inputs as a form of geopolitical leverage. The countries’ relations plummeted after Japanese Prime Minister Sanae Takaichi’s remarks on Taiwan, but there are signs she now wants to stabilize relations; on Monday, she called China an “important neighbor.” That follows remarks from China’s top diplomat, who said bilateral ties were “waiting to be normalized again.”

‘Trade superweapon’ collapses

The apparent implosion of a Chinese digital trade network, which the US warned was a superweapon with forensic insights into global supply chains, raised questions about what role Washington played in its demise — or whether the threat was overhyped. Reuters reported LOGINK collapsed amid stalled international deals, unpaid bills, and abandoned offices. Scott Friedman, a senior executive at Altana, a US AI startup that acts as a counterweight to China’s digital platforms, told Semafor he believed that LOGINK’s downfall represented the “natural depreciation of technology that’s no longer relevant” as Beijing rolled out powerful AI tools. But he cautioned that China still aspired to gain control over global trade intelligence and customs regulation: “We certainly need to pay more attention now.”

US bullish on tandem solar tech

US solar panel manufacturers are bullish on a breakthrough technology they believe could threaten China’s dominance of the industry. Manufacturers are racing to develop tandem solar technology that involves adding layers of materials to panels, generating 25% more energy than current devices, The New York Times reported. Chinese companies working on tandem solar are “maybe even behind us,” a US industry group head said. American companies are readying their products for the market, with the CEO of one startup that was awarded a $7.7 million government grant predicting the technology will “dominate the market” within six years. Experts say winning the race could help the US reclaim a share of the 80% of the global market that China controls.

US answer to open-source AI

A new AI model from a New York startup could heat up the open-source race between the US and China. Reflection AI on Monday released Beam, an open-source model that it says is on par with a Z.ai model from June, though behind Alibaba’s most advanced offering, as well as the leading closed models from OpenAI and Anthropic. Several large Western companies have recently embraced Chinese models to reduce costs for certain repetitive tasks. Beijing has also promoted open source as a diplomatic tool. Reflection’s CEO told Semafor that Beam could be an option for businesses and governments that don’t or can’t use Chinese models, but still want to “own” and control how they use AI.

Differing approaches to AI agents

US and Chinese tech companies are taking differing approaches in their attempt to bring AI agents to the masses. OpenAI’s dots agent and Meta’s Muse assistant put a spotlight on Chinese counterparts, including Tencent’s Xiaowei, which is built into super-app WeChat and can, for example, order a coffee from businesses that are already on the app. That contrasts with the US strategy, which builds the assistant first and then sends it out to use other companies’ websites. But Xiaowei’s head start may not translate into revenue, the Hello China Tech newsletter wrote: Tencent earns no new fees from purchases, and early tests show it making mistakes. It adds to questions of whether China’s consumer AI products can actually make money.

FBI arrests alleged China spy

The arrest of a California real estate agent on charges of spying for China is the latest in a string of cases spotlighting Beijing’s global operations. US authorities accused Wanying Zhang, also known as “Heather,” of snooping on the son of Taiwan’s president and his family in Seattle. After her detention at Los Angeles International Airport, FBI Director Kash Patel posted: “Foreign adversaries take note: America is no longer a safe place to run your espionage operations.” Taipei condemned Beijing’s “transnational repression.” Separately, a former California mayor will be sentenced Tuesday for acting as a Chinese agent, after her former fiancé was sentenced to four years in jail for pushing Chinese propaganda at a Chinese-language website they ran together.

Brazil’s right can’t quit China

A potential right-wing government in Brazil faces hard limits on how much it can actually shift away from China, its number one trading partner. Flávio Bolsonaro, the presidential frontrunner following his first-round election victory on Sunday, has pledged to align Brasília with Washington, particularly on security. But he’s also promised to maintain an “economically pragmatic” relationship with China, reflecting how deeply Chinese firms — which absorb about 30.7% of Brazilian exports, nearly three times the US share — are intertwined with Brazil’s economy. Another strong US ally, Ecuador’s Daniel Noboa, just visited China. As Americas Quarterly’s editor noted: “Leaders have been hesitant to choose between Washington and Beijing, no matter their ideological orientation.”

Women choose surrogacy abroad

More Chinese women are choosing to have children through surrogacy, which remains illegal in China, spawning a lucrative industry abroad. California fertility clinics, where surrogacy can cost $300,000 per child, boast a large Chinese client base, though more women are hunting for cheaper options in countries like Georgia and Kazakhstan, where it can cost as little as $60,000. Originally concentrated among those who couldn’t have children for medical reasons, surrogacy is increasingly common among those who can afford not to: “If I remain unmarried, I will have to bear all the costs of pregnancy and post-partum recovery,” one entrepreneur told the Financial Times. “And that really isn’t very different from the cost of having a child through surrogacy.”

Every week, we dig through China-focused newsletters and podcasts, and bring you key takeaways from the Sinologist community.

• The Kardashians’ recent visit to China put the American reality TV family — and its most China-famous member — back in the spotlight. Though Kim Kardashian was one of the first major Western celebrities to open a RedNote account, family matriarch Kris is the best known in China, having become a popular internet meme due to her belief in being able to “manifest” success by visualizing it, driving the family’s success. “In doing so, she is the one who’s seen as the ‘symbol of wealth’ and … became the perfect image for Chinese netizens to make their own wishes visible, like a digital good luck charm.” — Eye on Digital China
• A new-media publication operating under Chinese state media offered key clues on Beijing’s goals for the next US-China summit. Along with an AI risk hotline, the Chinese side identified misuse of “the most dangerous AI capabilities … by terrorist organizations” as one area of possible cooperation with the US, Yuyuantantian reported. What’s puzzling is “why the Chinese government continues to rely on a Chinese-language outlet … to send policy signals that are clearly relevant to foreign audiences.” — Pekingnology
• China saluted the passing of one of the country’s best-known singers, who performed at the opening ceremonies of the 2008 Beijing Olympics. Liu Huan, who died Sept. 25, became famous for singing the theme songs of popular TV shows, and gained younger fans by serving as a judge on a reality song competition show. But he was “universally acclaimed,” according to an obituary in one state-owned magazine — an English translation of a phrase with its origins in the writings of a Confucius disciple; its characters mean “finely minced meat.” While it “originally described delicious food that everyone loves to eat. Today, it’s used to praise poems, writing and songs that are widely loved and acclaimed.” — Sinica

• Taiwan publishes September inflation data on Wednesday, and trade figures on Thursday.
• EU Trade Commissioner Maroš Šefčovič travels to Beijing on Thursday for two days of trade discussions, amid an ongoing dispute between the two economies.
• Taiwan’s President Lai Ching-te delivers a National Day speech on Saturday, amid celebrations across the island.

More Chinese couples are choosing to write and star in their own wedding microdramas, inspired by a sector that generated $15 billion in revenues last year. Firms have sprung up to meet this demand, charging thousands of dollars more than a typical wedding photography package for short films produced by professional film crews. The most popular format is “three lives, three worlds,” which finds couples reunited across three different historical time periods, replete with costume changes. “In real life, you don’t get to fully write your own script,” the cofounder of a wedding microfilm company, which shoots roughly 100 couples per week, told Bloomberg. “But for those few hours on set, they decide the plot, and they decide the ending.”