Like many others, I have been waiting for this day for a long time.

I have personally visited Hainan Island three times. Two of those trips were to attend friends’ seaside weddings — which, in a way, already says something about Hainan’s character. Through my regular interactions with people working and living there, I have also learned that the central government has dispatched a large number of officials from other provinces to support Hainan’s development. Over the years, I have consistently felt how strong Beijing’s determination is to make Hainan work.

For this newsletter, I reviewed official explanations of the launch of island-wide special customs operations and spoke with several Chinese experts, organizing their perspectives into this briefing.

I want to give special credit to my colleague Wu Maohui, a Xinhua reporter based long-term on Hainan Island. He has deep expertise on the Hainan FTP and provided me with a great deal of valuable background and insight.

Before diving in, two clarifications:

1. The views expressed by the experts quoted here represent their personal opinions. I have organized them by theme mainly to offer overseas readers a structured reference for understanding the Hainan FTP.

2. Information related to the Hainan FTP is vast. This piece does not aim to be exhaustive. Instead, it highlights issues that overseas readers may care most about. If you would like to explore further, or have feedback, feel free to write to me.

Where Is Hainan?

Hainan Province lies at the southernmost tip of China. It is separated from Guangdong Province to the north by the Qiongzhou Strait, faces Vietnam across the Beibu Gulf to the west, and borders the Philippines, Brunei, Indonesia, and Malaysia across the South China Sea to the east and south.

By the end of 2024, Hainan’s permanent population reached 10.48 million, an increase of 51,000 from the previous year, according to the official website of the Hainan FTP.

What’s Special About Hainan FTP?

Two-tiered special customs system. Under the island-wide customs operations, the Hainan FTP will implement a supervision model featuring “freer access at the first line, regulated access at the second line, and free flows within the island.”

The “first line” refers to Hainan’s connection with overseas markets. Meanwhile, the “second line” denotes the customs boundary between the island and China’s mainland.

In practice, “freer access at the first line” refers to freer trade between Hainan and areas outside China’s customs border, and “regulated access at the second line” means maintaining standard customs controls for China’s mainland.

What Does This Mean for Business?

Zero tariffs. With the launch of island-wide customs operations, the scope of zero-tariff treatment in Hainan will expand significantly. The number of tariff lines eligible for zero tariffs will increase from about 1,900 to around 6,600, raising the overall zero-tariff ratio from 21% to 74%.

Strong tax incentives. Companies can benefit from multiple policies across different stages of production and operation. Take a biopharmaceutical company as an example: during the construction and research phase, imported raw materials and equipment can qualify for zero tariffs, reducing import costs by 5 to 10 percent. In manufacturing, products made with zero-tariff imported inputs and meeting a value-added ratio of 30 percent or more can be shipped to the Chinese mainland free of import duties.

Once profitable, the company can also benefit from a preferential corporate income tax rate of 15 percent, while its executives and technical staff may qualify for a 15 percent personal income tax rate.

For foreign enterprises, this arrangement offers a stable interface through which they can simultaneously engage global markets and China’s vast domestic demand. For domestic firms, it provides a gateway to global resources, technologies and capital flows.

Why It Matters

Following the launch of island-wide customs operations, zero-tariff treatment now covers the entire industrial chain — from raw materials and components to final products. This is expected to help extend, reinforce, and optimize industrial chains, and support the cultivation of globally competitive industrial clusters in Hainan.

The 30% value-added threshold not only lowers operating costs for firms, but is also expected to attract more high-end manufacturing and high value-added processing industries to Hainan.

Key Industries

According to the Master Plan for the Construction of Hainan Free Trade Port and the Recommendations of the CPC Hainan Provincial Committee on Formulating the 15th Five-Year Plan for National Economic and Social Development, the post–customs-operations phase will focus on building a Hainan-specific modern industrial system.

The Hainan FTP will prioritize four leading sectors:

• Tourism

• Modern services

• High-tech industries

• Efficient tropical agriculture

At the same time, it aims to further develop consumer markets such as high-end shopping, healthcare, and international education.

Timeline: How We Got Here

(Analyzed by 赵晋平 Zhao Jinping, Vice Chairman of the China Association of Trade in Services, based on official documents)

Stage 1 (2018–2020): “Laying the foundation.”
In April 2018, The Chinese leadership announced the decision to build the entire island of Hainan into a pilot free trade zone. At the time, however, China already had more than a dozen FTZs nationwide. Hainan’s pilot FTZ did not yet differ fundamentally from others, nor did it fully reflect the ambition of “higher-standard opening-up.” This stage was primarily about accumulating experience.

Stage 2 (2020–2025): “Building institutions.”
In June 2020, China released the Master Plan for the Construction of Hainan Free Trade Port, emphasizing that by the time of customs operations, a basic institutional framework for the FTP should be “initially formed.” This phase focused on institutional construction on top of earlier groundwork.

Stage 3 (2025–2035): “Full coverage.”
Starting Dec. 18, 2025, island-wide special customs operations are implemented. “Full coverage” means replicating and institutionalizing the systems initially formed before customs operations across the entire province, turning them into long-term arrangements.

Stage 4 (After 2035): “Strengthening distinctive features.”

Financial Preparation

To facilitate high-level convenience for cross-border capital flows, China’s central bank and the State Administration of Foreign Exchange launched multi-functional free trade accounts in May 2024 to create an integrated local and foreign currency account system.

The People’s Bank of China (PBOC) said it has built a financial policy and institutional system specifically designed to support the high-standard construction of the FTP, providing strong momentum for the port’s development.

Other Points You May Find Interesting

How big is the Hainan FTP?
At 33,900 square kilometers, it is 31 times the size of Hong Kong and 47 times that of Singapore, making it the world’s largest free trade port by area, according to National Business Daily, a nationwide Chinese financial and economic daily newspaper.

Going Deeper: Geography and Strategy

In 2018, China unveiled the guidelines to support Hainan to deepen reform and opening up, making clear that the Hainan FTP is intended to serve as a key gateway for China’s opening-up toward the Pacific and Indian oceans

This positioning as a “key gateway of opening-up” is critical. Why does it matter so much?

迟福林 Chi Fulin, head of the China Institute for Reform and Development:

In my view, this point is particularly important. To begin with, the nature of globalization itself is changing. Regional economic integration has increasingly become the dominant feature of globalization, and this trend is now irreversible. Under these circumstances, the development of the Hainan FTP cannot be approached by “looking at Hainan from within Hainan.” Instead, it requires “looking at Hainan from beyond Hainan” — leveraging national strategy to drive Hainan’s development, and in turn using Hainan’s development to reinforce China’s broader strategic objectives.

Hainan’s orientation toward the South China Sea gives it a distinctive resource and geographic advantage. An estimated 60 to 70 percent of China’s imports and exports pass through the South China Sea, either entering the country or heading toward the Indian and Pacific Oceans. This geographic position is therefore of exceptional importance. Against the backdrop of deepening regional economic integration, Hainan’s regional role becomes particularly prominent.

Hainan’s locational advantages — especially its geographic, geopolitical, and resource advantages — are highly pronounced. Historically, Hainan has maintained close ties with regions centered on ASEAN. In building itself into an “important gateway of opening-up,” the most critical counterpart for Hainan is ASEAN. Hainan must become a hub for strategic cooperation between China and ASEAN. Without this hub role, the notion of an “important gateway of opening-up” would remain abstract and fail to materialize in practice. This positioning is therefore crucial — and at present, this trajectory is becoming increasingly evident.

What Does This Mean for Overseas Capital?

Hainan to issue 10-year offshore RMB aerospace bonds in HK -- China Daily (Sept. 12, 2025)

The government of Hainan province has announced plans to issue offshore renminbi bonds worth 5 billion yuan ($702 million) in the Hong Kong Special Administrative Region (HKSAR) this September, aiming to deepen cooperation between the island province and the HKSAR, advance the development of the Hainan Free Trade Port, and contribute to the internationalization of the yuan.

This year marks the fourth consecutive year that Hainan has issued offshore RMB bonds in Hong Kong. A global investor conference was held on Thursday at the Hong Kong Monetary Authority (HKMA) to provide more details about the issuance.

In addition to three-year green bonds and five-year blue bonds, this year will feature the inaugural issuance of a 10-year aerospace bond, with a portion of the proceeds allocated to infrastructure development at Hainan’s Wenchang Spacecraft Launch Site.

Hainan has now issued offshore RMB local government bonds in Hong Kong for four consecutive years. This carries two layers of significance, according to 曹远征 Cao Yuanzheng, former Chief Economist of the Bank of China and advisor to the Hainan FTP:

First, it serves as a signal of leading openness. It is relatively uncommon for local governments to issue renminbi-denominated bonds in Hong Kong, and even less common for the proceeds to be repatriated for use on the mainland. This, in practice, reflects the financial facilitation of the Hainan FTP.

Second, the issuance also carries strong symbolic meaning. Take the so-called “航天主题债” (”aerospace-themed bond”) as an example: Wenchang International Aerospace City in Hainan and related aerospace industries are experiencing rapid growth, and China is emerging as an important global leader in this field. These developments provide important support for Hainan’s successful bond issuance.

Looking ahead, as the Hainan FTP moves into the phase of special customs operations, Hainan will find it easier — and have greater confidence — to access international markets. As facilitation improves, more international capital is likely to flow into Hainan, helping to turn the province into a high ground for reform and opening-up.

Challenges Ahead (A Reality Check)

No ready-made model. Customs operations mark a new beginning rather than an endpoint for Hainan. There is no existing template to copy for Hainan FTP. China has explicitly called for building a “free trade port with Chinese characteristics,” meaning the model must be created through experimentation and continuous adjustment.
— 王新奎 Wang Xinkui, Chairman of the Shanghai WTO Affairs Consultation Center

Implementation discretion matters. The effectiveness of top-level design depends not only on how detailed it is, but also on the degree of flexibility local governments have in implementation. This requires both initiative at the local level and sufficient tolerance for trial and error from the center. Without such space, innovation becomes risky and policy implementation tends to fall into inertia.
— 刘尚希 Liu Shangxi, former President of the China Academy of Fiscal Sciences

Service trade remains a bottleneck. Although Hainan has a negative list for service trade, it still contains around 70 restrictive measures. Compared with CPTPP or even RCEP standards, gaps remain. During the 15th Five-Year Plan period, breakthroughs in this area will be crucial.
— 赵晋平 Zhao Jinping, Vice Chairman of the China Association of Trade in Services

More information:

1. Special customs operations promise broad gains for businesses, residents in Hainan FTP (Xinhua)

2. How individuals calculate income tax incentives in Hainan (National Business Daily)

3. Former Chongqing mayor Huang Qifan on the latest developments in Hainan FTP (New Economist)

The two publications are:

• Tutorial on the Recommendations of the Central Committee of the Communist Party of China for Formulating the 15th Five-Year Plan for National Economic and Social Development (《〈中共中央关于制定国民经济和社会发展第十五个五年规划的建议〉辅导读本》)

• Q&A Guidebook on the Recommendations of the Central Committee of the Communist Party of China for Formulating the 15th Five-Year Plan for National Economic and Social Development (《党的二十届四中全会〈建议〉学习辅导百问》)

Readers familiar with China—especially many of you—may know that after major political events or the release of key guiding documents, China has in recent years published two supplementary reading books: one “tutorial” volume and one “Q&A” guidebook. For instance, after the Third Plenary Session last year adopted the reform master plan, two similar books were released. I wrote multiple newsletters at that time summarizing key themes from those books.

Why these two books matter

1. They collect essays written by China’s top policymakers.

Such compilation is rare. These essays offer a more direct window into policymakers’ strategic thinking in key areas. In line with past practice, these articles are also being published—one by one—in People’s Daily.

So far, signed articles by Li Qiang, Wang Huning, Cai Qi, Ding Xuexiang, who are members of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee, and Wang Yi, Liu Guozhong, Li Shulei, who are members of the Political Bureau of the CPC Central Committee, have already appeared in People’s Daily.

If the publication sequence continues to follow the order of the Tutorial volume, articles by 9 more senior officials will be released in the coming weeks. Reading the tutorial books now allows an early look at all the essays at once. The two books also include articles by other officials, along with extensive explanatory content.

2. Compared with the Recommendations document, the tutorial books offer more specifics and directional signals.

For example, regarding the “domestic circulation” part of China’s economic strategy, the Recommendations state:

“Strengthen the domestic circulation” 做强国内大循环 and “enhance the endogenous driving force and reliability of the domestic circulation” 增强国内大循环内生动力和可靠性.

[Note: Domestic circulation is part of the new development paradigm of “dual circulation”, which was unveiled by the CPC Central Committee in 2020 to meet the challenge of mounting global uncertainties. Dual circulation takes the domestic market as the mainstay, with the domestic and international markets reinforcing each other.

Domestic circulation relies on a unified domestic market to optimize production, distribution, circulation, consumption and other aspects, with a view to stimulating domestic demand potential and enhancing economic resilience.]

But in his signed article in the Tutorial, Premier Li Qiang makes the priority explicit:

“十五五”时期要把发展立足点更多放在做强国内大循环上

During the 15th Five-Year Plan period (2026-2030), we will place greater emphasis on strengthening the domestic circulation as the foundation of development.

Li explains the logic:

大国经济具有内需为主导、内部可循环的独特优势 ...... 以国内大循环的内在稳定性和长期成长性对冲国际循环的不确定性

A major economy has the unique advantage of demand-led growth and an internally sustainable circulation ...... The stability and long-term growth of the domestic circulation can hedge the uncertainties arising from the international circulation.

This does not mean the international circulation — trade and external engagement — becomes unimportant. Rather, it reflects policymakers’ strategic assessment of today’s geopolitical environment.

This is not Li’s first time expressing such a view. Li made similar remarks in May at a State Council meeting to promote domestic circulation. What is new here is that the Tutorial places this strategic shift explicitly within the time horizon of the next five-year plan.

Another example:

The Recommendations call for:

深化文明交流互鉴。

Deepening exchanges and mutual learning among civilizations.

They do not specify how. But in the Tutorial, in his signed article, Li Shulei, who is also the head of the Publicity Department of the CPC Central Committee, writes:

支持社交媒体平台国际化发展

Support the international development of social media platforms

Clearly, this refers to Chinese social media platforms. Traditionally, platforms like Douyin (China’s version of TikTok), Xiaohongshu (RedNote), and Weibo (China’s version of “X”) served mainly domestic users. But the “TikTok Refugee” wave earlier this year brought many overseas users to RedNote. How China responds—open or restrict—has been debated.

Li’s wording signals a possible direction: supporting platforms like RedNote in developing more functions to serve international users, making “civilizations exchanges” concrete rather than abstract.

What I’m doing with the books

I have finished all articles in both books — nearly 700 pages in total. My plan is to produce two to three newsletter issues, each centered on a theme. If interest turns out low, I will keep it to one.

Today’s theme is “China’s assessment of the external environment,” covering topics such as major-country competition, military development, and the relationship between security and development.

Below are selected excerpts, with my interpretation. Please note that while most of the essays in these two books are signed articles written by senior officials, the 108 questions and answers in the Q&A Guidebook are not attributed to individual authors. They can be viewed as the collective intelligence of the compilation team — essentially the group with the deepest involvement in, and the most comprehensive understanding of, the formulation of China’s five-year plans.

Table of contents of Tutorial on the Recommendations of the Central Committee of the Communist Party of China for Formulating the 15th Five-Year Plan for National Economic and Social Development

Table of contents of Q&A Guidebook on the Recommendations of the Central Committee of the Communist Party of China for Formulating the 15th Five-Year Plan for National Economic and Social Development

少数西方国家对多极化进程的快速发展明显不适，仍妄图维持单级霸权，但遭到国际社会的广泛抵制。

Some Western countries are uncomfortable with the rapid advance of multipolarity and still attempt to maintain unipolar hegemony, but such actions face widespread resistance from the international community.

......

经济全球化虽遭遇逆流但仍是不可阻挡的历史潮流。

Economic globalization is encountering headwinds, yet it remains an unstoppable trend.

......

战略安全威胁增多，拥核国家互信减弱，有可能陷入新一轮军备竞赛。

Strategic security risks are increasing, mutual trust among nuclear-armed countries is weakening, and a new round of arms race is possible.

......

周边涉我安全环境复杂因素增多。

More complex factors are involved in China’s surrounding security environment.

......

(Source: Tutorial on the Recommendations…, pp. 175–177; Article: Profound and Complex Changes in China’s Development Environment During the “15th Five-Year Plan” Period, By Tian Peiyan, deputy head of the Policy Research Office of the CPC Central Committee.)

The first sentence does not name any country, but the phrase “unipolar hegemony” could be interpreted as indirectly referring to the United States.

The second sentence shows that China’s policymakers continue to believe that economic globalization will persist in the long run. This suggests that China intends to remain integrated into the global economy as much as possible — while ensuring security.

The third sentence feels particularly timely, as it appears in the book before President Trump ordered the U.S. military to immediately restart the process for testing nuclear weapons on Oct. 30 after a halt of 33 years.

The fourth sentence immediately reminded me of the Central Conference on Work Related to Neighboring Countries, which China convened again in April this year after a 12-year gap — a meeting I analyzed at the time. One of the conclusions from that conference was that “China’s relations with its neighboring countries are currently at their best in modern times.” When read together with this sentence, it raises the possibility that the “complex factors” mentioned here may be referring to actors outside China’s immediate neighborhood.

进入机遇和挑战并存、不确定难预料因素增多的时期，唯有保持昂扬的斗志、顽强的意志，锻造敢斗善斗的过硬本领，才能在风高浪急甚至惊涛骇浪重大考研中赢得主动，立于不败之地。

As China enters a period where opportunities and challenges coexist and where uncertainties and unpredictable factors are on the rise, only by maintaining high morale and strong willpower, and by forging the capability to face difficulties head-on and prevail in struggles, can we seize the initiative amid turbulent waves and remain invincible.

面对外部围堵遏制打压，要保持不畏强暴、反抗强权的风骨，核心利益不让步，原则问题不妥协，威胁讹诈不退缩。

In the face of external containment, suppression and coercion, we must stand firm — never yielding to power politics or intimidation. On matters involving core interests, we will not concede; on matters of principle, we will not compromise; and under threats or blackmail, we will not back down.

(Source: Tutorial on the Recommendations…, p. 182; Article: Profound and Complex Changes in China’s Development Environment During the “15th Five-Year Plan” Period, By Tian Peiyan, deputy head of the Policy Research Office of the CPC Central Committee.)

These two sentences make it clear that if China faces threats or challenges in trade or other areas, its strategy will remain unchanged: it will not back down, but will continue to “fight” until the end.

别国越是搞“小院高墙”、“脱钩断链”，我们越要坚持高水平对外开放不动摇。“十五五”时期，进一步扩大高水平对外开放，需要稳步扩大制度型开放，维护多边贸易体制，拓展国际循环。

The more others build ‘small yards with high fences’ or push for decoupling, the more firmly we will promote high-level opening up. During the 15th Five-Year Plan period, we will steadily expand institutional opening up, uphold the multilateral trading system, and broaden the international circulation.

(Source: Q&A Guidebook on the Recommendations…, p. 15, Article: Deepening Reform of the Economic System and Promoting High-quality Development, By Wang Huning, member of the Standing Committee of the Political Bureau of the CPC Central Committee and chairman of the CPPCC National Committee)

This sentence shows that China continues to value openness as a strategic choice, and that the “international circulation” component of the “dual circulation” strategy remains important. In fact, the idea of “the more others close up, the more we should open up” has frequently appeared in China’s academic discussions over the past two years. For example, prominent scholar Zheng Yongnian has repeatedly called for further opening-up — including unilateral opening: “Even if some Western countries do not open to us, we have to open to them. “

In practice, China is acting on the idea of further opening up its economy. According to a post on the Ministry of Commerce’s WeChat blog, Chinese Commerce Minister Wang Wentao on Tuesday signed the framework agreement to upgrade economic partnership with representatives from five Pacific Island countries — the Federated States of Micronesia, the Republic of Kiribati, the Republic of Nauru, the Republic of Vanuatu and the Republic of Fiji.

On the same day, Wang also signed an arrangement on the early outcomes on shared development of an economic partnership between the governments of China and Congo, an important step in implementing the zero-tariff policy announced by Chinese top leader. It is also a concrete action to advance the spirit of the Third and Fourth Plenary Sessions of the 20th Communist Party of China (CPC) Central Committee and to expand China’s self-initiated opening-up, according to a statement from the website of Ministry of Commerce.

必须着眼国际军事竞争战略制高点前瞻先机。不仅要赶上潮流、赶上时代，还要力争走在时代前列。

We must focus on the strategic high ground of international military competition. We should not only keep pace with the times, but strive to lead.

......

要坚持自主可控，扭住高水平科技自立自强，大力推进自主创新、原始创新，解决好关键技术“卡脖子”问题。

We must uphold self-reliance and maintain control in key areas, pursue high-level scientific and technological self-sufficiency, vigorously advance independent innovation and original innovation, and resolve bottlenecks in critical technologies.

......

实施国防发展重大工程，加紧国防科技创新和先进技术转化，研制建造更多制强制胜的“杀手锏”武器装备。

We will advance major defense development projects, accelerate innovation and application of defense technologies, and develop more “trump card” equipment capable of gaining decisive advantage.

(Source: Q&A Guidebook on the Recommendations…, pp. 87–89, Article: Promoting the Modernization of National Defense and the Armed Forces, By Zhang Youxia, member of the Political Bureau of the Communist Party of China Central Committee and vice chairman of the Central Military Commission)

There are quite a few articles in the tutorial books related to China’s military development, but since I am not a military expert, I won’t comment on them in detail here. What stands out is China’s recognition that foreign technology restrictions make self-reliance in defense science and technology a necessity.

回顾新中国成立以来的历史，在“站起来”阶段，我们党更加注重安全；在“富起来”阶段，我们党更加注重发展；在“强起来”的新阶段，要统筹好发展和安全。要进一步树立发展是硬道理、安全也是硬道理的理念，在发展中固安全，在安全中谋发展，有效防范化解各类风险。

Looking back at the history since the founding of the People’s Republic of China, the Party placed greater emphasis on security during the stage of “standing up,” and greater emphasis on development during the stage of “becoming prosperous.” In the new stage of “becoming strong,” development and security must be better coordinated. We must further establish the notion that development is the absolute principle and security is also the absolute principle — strengthening security through development and pursuing development in a secure environment, while effectively preventing and defusing various risks.

.....

要完善涉外国际安全机制，构建海外安全保障体系，加强发制裁、反干预、反“长臂管辖”斗争，深化国际执法安全合作。

We must improve mechanisms for safeguarding international security in foreign-related affairs, build a comprehensive system for protecting China’s overseas security interests, strengthen efforts to counter sanctions, interference and long-arm jurisdiction, and deepen international law-enforcement and security cooperation.

(Source: Q&A Guidebook on the Recommendations…, pp. 107–108, Article: Building a Higher Level of Peace and Security in China, By Chen Wenqing, member of the Political Bureau of the CPC Central Committee and head of the Commission for Political and Legal Affairs of the CPC Central Committee)

The “standing up” stage probably refers to the period from the founding of the People’s Republic of China to the beginning of reform and opening-up. The “becoming prosperous” stage probably refers to the period after reform and opening-up began. The “becoming strong” stage likely refers to the period from 2012 to the present.

The reform master plan released last year included a dedicated section on “strengthening the rule of law in foreign-related affairs.” The second sentence above aligns closely with that direction.

国际力量对比深刻调整，世界多极化在曲折中发展，我国国际影响力、感召力、塑造力不断提升，在国际事务中已经并将继续发挥重要作用。

With major changes in the balance of international forces, multipolarity is advancing amid twists and turns. China’s international influence, appeal and capacity to shape the world continue to grow. China has played, and will continue to play, an important role in global affairs.

(Source: Q&A Guidebook on the Recommendations…, p. 7, Q&A No. 3: How to Understand the International and Domestic Situation During the 15th Five-Year Plan period)

This sentence can be seen as a summary assessment by policymakers of China’s international influence.

Liu Yanhua, an associate research fellow at the National Institute for South China Sea Studies, highlighted several of these maps in an article published Tuesday on the institute’s WeChat blog. Today’s piece is a translation of the main points of Liu’s article by Jiang Jiang, Xia Tian and Wang Xiaopeng.

In this piece, Liu noted that

中国拥有南海诸岛主权建立于长期的历史实践中，具有发现、命名、开发利用、行政管辖的完整证据链条。但是，早期西方国家“获得”主权的方式却带有浓厚的殖民色彩，往往是来到一块“未知”土地、插旗鸣炮就“获得”主权，这种主权获得是建立在漠视原住民权利的基础之上，也让英国、法国、日本尽管在南海诸岛见到驻岛生产的中国渔民，仍将其视为“无主地”。

China’s sovereignty over the Nanhai Zhudao was established through a long course of historical practice, supported by a complete chain of evidence covering discovery, naming, development and utilization, and administrative jurisdiction. By contrast, the ways in which early Western powers “acquired” sovereignty were deeply colored by colonialism. Typically, they would arrive at a so-called “unknown” land, plant a flag, fire ceremonial shots, and claim sovereignty — a process that disregarded the rights of indigenous peoples. As a result, even when British, French or Japanese explorers encountered Chinese fishermen living and working on the islands, they still regarded the Nanhai Zhudao as terra nullius, or land belonging to no one.

Liu then gave an example: In 1947, when France sought arbitration with China over sovereignty of the Xisha Islands, Qiu Zuming, then First Secretary and Acting Chargé d’Affaires of the Chinese Embassy in Turkey, noted in reference to China’s traditional mode of territorial administration:

“按照国际公法，无主荒地之占领，依照占领时之国际法规，我国将该岛划归粤省管辖时，远在国际法成为专书之前，只有渔人前往，自无设官之必要。”

“According to international law, the occupation of terra nullius should be judged in light of the legal norms in effect at the time of occupation. When China placed the islands under the jurisdiction of Guangdong Province, it was long before international law had been systematized. At that time, only fishermen went there, and therefore there was no need to establish official administration.”

Such differences in legal concepts and practices concerning territorial sovereignty, in effect, provided Western countries with a pretext for encroaching upon China’s sovereignty over the Nanhai Zhudao, said Liu. Recognizing the harm caused by these differences, the Chinese government later adopted approaches in line with international norms to reaffirm its sovereignty.

For example, Li Zhun’s patrol of the Xisha Islands was acknowledged by the Western world — though in their eyes, his patrol was seen as an “occupation” rather than an assertion of sovereignty over China’s own territory.

In 1909, Li Zhun, commander of the Guangdong Fleet of the Qing Dynasty, conducted the first official inspection of the Xisha Islands on behalf of the Chinese government, proclaiming the islands as Chinese territory.

In the article, Liu introduced maps that included those published by China in 1935 concerning the South China Sea. These maps represented the efforts of the then Republic of China (ROC) government to assert China’s sovereignty over the region. Liu noted that such efforts have been deliberately downplayed — for instance, the Wikipedia entry on the “Spratly Islands Dispute” claims that China only began asserting sovereignty over the Nansha and Xisha Islands after drawing the nine-dash line map in 1947.

The maps in 1935 were worked out as numerous errors and inconsistencies were found in maps published in China at the time, particularly regarding national boundaries, according to the first issue of the Journal of the Commission for the Examination of Land and Water Maps. To address this, the then Ministry of the Interior convened an inter-ministerial meeting in 1930 to discuss and formulate rules for the examination of land and water maps, and in 1933, the Commission for the Examination of Land and Water Maps (“水陆地图审查委员会”) was officially established. Each participating ministry assumed specific responsibilities — the Ministry of the Interior was in charge of reviewing administrative divisions and related matters, the Ministry of Foreign Affairs was responsible for boundaries and treaty-related territories, while the Ministry of Education oversaw academic terminology, historical evolution, meteorology, and the intended uses of the maps.

From its establishment on June 7, 1933, to the end of December 1934, this commission held a total of 26 meetings. At its 25th meeting on December 21, 1934, the commission approved a list of 172 Chinese and English names for islands in the South China Sea. These names were published in the first issue of the Journal of the Commission for the Examination of Land and Water Maps in January 1935, followed by the publication of the Map of the Islands in the South China Sea of China in the second issue in April that year.

The compilation of these maps was deeply rooted in China’s long-standing historical practice of exercising sovereignty over the Nanhai Zhudao. From a cartographic perspective, it continued the tradition of depicting the South China Sea islands —historically referred to as “Changsha” and “Shitang” since the Ming and Qing dynasties — on territorial maps such as the Complete Map of the Everlasting Unified Great Qing Empire. The depiction of the Nanhai Zhudao thus evolved from collective references to more detailed representations of individual islands, reefs, and shoals. Subsequent Chinese maps followed this model, marking both the extent of the Nanhai Zhudao and the names of their features.

Created in the 15th year of the Jiaqing reign (1810) during the Qing Dynasty, the map is printed in two colors on paper, composed of 24 joined sheets, with the artist unspecified. (This map was shown in the exhibition)

Liu said that the effort to explain China to the international community in ways accepted by Western audiences took shape in various aspects of modern Chinese history. A group of Chinese scholars well-versed in both Chinese and Western learning undertook this important task.

To “meet the long-felt needs of English readers,” The Chinese Year Book 1935–1936 was published by the Commercial Press in Shanghai in 1935. Unlike The China Year Book, edited by British scholar H.G.W. Woodhead since 1921, this was the first English-language Chinese Year Book written entirely by Chinese editors and scholars.

According to Liu, the yearbook contained 45 chapters covering subjects such as history, geography, climate, population, the military, industry, culture, religion, and government institutions. Its contributors included leading Chinese scholars of the time, such as Gu Jiegang, Zhu Kezhen, Wang Shijie, and Weng Wenhao. Publication of The Chinese Year Book continued in different locations after China started a whole-of-nation resistance against Japanese aggression in July 1937.

Beginning with the 1938–1939 edition, the English-language Chinese Year Book took on the mission of presenting China’s war efforts to the world. In the foreword to that edition, Xu Shuxi, then Director of the Commission for International Affairs, wrote that this was a “war issue,” with three-fourths of its content devoted to the war and related matters. “Just as the 1937 edition bore testimony to the achievements of reconstruction under the National Government before Japan’s destruction of it,” Xu wrote, “we hope this volume will serve as a record for posterity — of how the Chinese people, against great odds, heroically defended their nation and the civilization they share with the rest of the world, including the aggressors themselves.”

The Map of China compiled for the English-language Chinese Year Book vividly demonstrated the Chinese people’s determination to safeguard their territorial sovereignty. In the 1936–1937 edition, the Map of China was published as a separate supplement, said Liu. It featured a brick-red hardcover with the title MAP OF CHINA and the note “Drawn Specially for the Chinese Year Book by Sheng-tsu Wang.”

Wang Shengzu, one of China’s earliest geographers to study in the United States, obtained a master’s degree in geography from the University of Chicago in 1929. Upon returning to China, he taught at Tsinghua University and other institutions. His research combined a national perspective with an international outlook, and his strong command of English likely made him the ideal author for the English version of the Map of China. In the same edition, Wang also wrote the section on “Northeast China,” which systematically described Japan’s military invasion, economic plunder, and colonial rule in the region.

In the MAP OF CHINA, the lower-right corner featured a boxed inset labeled “South China Sea.” The area was shaded in the same color as the Chinese mainland, with the islands marked and named in accordance with the official designations published by China in 1935 — serving as an English-language presentation of China’s sovereignty claims over the Nanhai Zhudao. The 1938–1939 edition also carried an updated English version of the Map of China, copies of which are still preserved in libraries in the United States, Canada, and elsewhere.

In November 1937, to strengthen international communication and win foreign support, the National Government established the International Information Division under its Central Headquarters, led by Dong Xianguang, a prominent journalist educated in the United States. The division had a Compilation Section responsible for foreign-language publications. From February 1938, it was placed under the Central Publicity Department, with an overseas office established in New York — then a key hub for international publicity — and branches in London and other cities.

According to incomplete statistics, during the war years the division published over 290 foreign-language periodicals exposing Japanese atrocities and publicizing China’s war efforts and major political figures. It also distributed more than 11,000 publicity photographs abroad, including to Japan. This indicates that the 1938–1939 edition of The Chinese Year Book was likely promoted through this external publicity network, giving it broad international circulation and readership. Alongside China’s resistance narrative, the publication also conveyed China’s claims of sovereignty over the South China Sea islands.

After 14 years of arduous struggle, China achieved victory in 1945, recovering all territories seized by Japan, including the South China Sea islands.

In February 1948, the Chinese government (ROC) officially published the Administrative Map of the ROC. The map included an inset titled Location Map of the South China Sea Islands. (This map was shown in the exhibition)

In 1947, when the Ministry of the Interior and other departments convened to discuss the scope of the South China Sea islands, they reaffirmed the boundaries announced in 1935: “The southernmost extent of China’s South China Sea territory reaches Zengmu Shoal. Before the war, this demarcation had been consistently used by government agencies, schools, and publishers, and had been formally filed with the Ministry of the Interior. The original record remains unchanged.”

At the end of the article, Liu concluded that China’s sovereignty claims over the Nanhai Zhudao thus continued to gain international recognition after the war, supported by its renewed administrative and developmental activities over the islands.

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Hello and welcome to the "Big Argument" column, a distinctive commentary column in our newsletter that diverges from traditional Western narratives and perspectives. As some of you know, this column is periodically featured in this newsletter. It focuses on hot-button issues that have yet to fully reflect the Chinese stance and perspective. One notable piece of the column, which also stands as one of the most engaging articles in the history of this newsletter, was a piece published last May on PLA's military drills around the Taiwan island.

You might find that some views in the article differ from the typical Western perspectives, but I believe understanding different viewpoints might be one of the reasons some of you subscribe to this newsletter.

If you have any thoughts or comments about the article, feel free to share them below!

What does power look like for Washington in 2025? A percentage sign. Threats of 30 percent to 50 percent tariffs hung over capitals from Brussels to Manila like a sword, and “agreements” followed in a rush — each one trading a tariff cliff for a still‑punishing baseline: a 15 percent wall on all EU goods, 15 percent on Japan, 20 percent on Vietnam, and 19 percent on Indonesia and the Philippines. U.S. goods, meanwhile, often slipped in duty‑free, while multibillion‑dollar purchase orders and investment pledges were funneled toward America. Tribute by any other name would smell as steep.

When tariffs replaced gunboats

For much of the 19th and early 20th centuries, Washington pried open markets with literal gunboat diplomacy—from Commodore Perry’s Black Ships off Edo Bay to U.S. cruisers enforcing debt payments in the Caribbean. Trade concessions were negotiated under a broadside’s shadow. In 2025, the warships stayed in port, but the logic survived: a tariff notice now does the job a cannon once did.

Europe’s experience set the pattern. Brussels arrived insisting on zero‑for‑zero. It left with a flat 15 percent tariff on most of its exports — roughly six times last year’s average U.S. rate — plus a promise to channel about 600 billion U.S. dollars of investment into the United States and to buy roughly 750 billion U.S. dollars of American energy and defense products. Steel and aluminum remained hit with 50 percent. The White House reserved the right to crank duties back up if deliveries lagged. “The best we could get,” Ursula von der Leyen conceded. In Paris, it was simply “a dark day.”

Tokyo’s script scarcely diverged. Japan avoided a harsher levy only by accepting a 15 percent ceiling and assembling a 550 billion U.S. dollar package deployed largely at U.S. discretion, with Trump boasting of a 90 percent profit share. Detroit promptly cried foul: American carmakers still face 50 percent tariffs on steel and aluminum and 25 percent on many parts, leaving them, they say, “definitely at a disadvantage.”

Further south and east, leverage hardened into outright asymmetry. Indonesia agreed to zero tariffs on almost all U.S. goods, dropped key resource and regulatory barriers, accepted U.S. auto and FDA standards and signed up for billions in U.S. aircraft, farm and energy purchases — even as Washington locked a 19 percent duty on Indonesian exports.

The Philippines took the same 19 percent rate — down a token point from the threat—while granting zero tariffs for American imports and deepening military cooperation. Vietnam accepted 20 percent across the board and 40 percent on goods Washington deems “transshipped,” while opening its own market duty‑free to U.S. products.

Tariff fire even reached the produce aisle. Tomatoes — 90 percent of which the United States imports from Mexico — lost their long‑standing duty‑free status and now face a 17 percent levy. Salad, salsa, ketchup and pasta sauce will cost more. Domestic growers cannot fill the gap.

New economic colonialism

The tariff pacts Washington struck embody what can be called new economic colonialism, built on tariff‑tributaryism: a system that swaps imperial gunboats for tariff clocks and cannonades for compliance clauses. It runs on three moves.

First, threaten annihilation to make “consent” inevitable. Partners negotiated under a countdown to ruinous duties. Signing staved off disaster. It did not signal parity. The signature sealed coercion, not compromise.

Second, convert mercy into one‑way flows. The reprieve carried a price tag in capital, commodities, and standards. Europe’s energy payments flow west. Japan’s half‑trillion fund props up U.S. priorities. Indonesia’s minerals and regulations are rewritten to American codes. Vietnam’s market swings open while its goods still pay the toll. Technical‑sounding rules — auto safety, FDA approvals — hand Washington the gatekeeping keys and lock other economies into U.S.-led value chains.

Third, keep the trigger within reach. Even after the ink dried, U.S. officials said the White House could restore higher tariffs—potentially back to the originally threatened levels—if a partner “fell short.” Mercy is provisional, leverage perpetual. Where a gunboat once loitered offshore, a tariff letter now sits in a drawer marked “if needed.”

This isn’t classic neocolonialism in treaty form, nor mere protectionism. It is a hybrid — tributary logic fused to modern instruments — hence new economic colonialism centered on tariff‑tributaryism. Coercion without conquest. Dependency without direct rule. A sphere of influence drawn not with borders, but with baselines, quotas, and purchase commitments.

Unequal treaties won't make America great again

Europe calculates that a 15 percent tariff is roughly quadruple the pre‑Trump average. Japanese exporters have already slashed prices 19.4 percent year‑on‑year to keep their foothold, eroding profits and threatening the wage gains that finally nudged Japan out of deflation. Vietnamese manufacturers now juggle impossible deadlines and razor‑thin margins to meet U.S. rules while paying double penalties for alleged “transshipment.” None of this spells “win‑win.”

Americans are hardly insulated. Analysts warn U.S. firms are absorbing much of the tariff cost and will pass it on. Bloomberg’s models show the new levies already stunting global growth as investment stalls and supply chains contort. Even niche duties — like that tomato tax — flow straight to grocery bills. And at home, U.S. automakers complain the patchwork left them paying more for steel, aluminum and parts than their foreign rivals, undermining the very “Made in America” push tariffs were supposed to defend.

Politically, “submission,” “imbalanced,” “dark day” aren’t the words of partners celebrating reciprocity. They are the vocabulary of coerced compromise. History’s verdict on such arrangements is clear. Unequal treaties breed resentment, not durable peace. They paper over conflict until the bill comes due.

If Washington’s goal is a rules‑based order and making America great again, tariff tribute is the wrong foundation. Real prosperity grows from predictability and perceived fairness, not new economic colonialism.

The lesson from a century ago still applies: victories secured by pressure unravel. Only genuinely mutual agreements endure.

According to the EU, the meeting is scheduled for July 24 in Beijing. The President of the European Council, António Costa, and the President of the European Commission, Ursula von der Leyen, will meet Chinese President Xi Jinping. However, China has yet to make an official announcement, as its diplomatic protocol typically discloses leaders' foreign engagements only a few days in advance.

This year's summit holds special importance as it coincides with the 50th anniversary of diplomatic relations between China and the EU. Earlier this month, Wang Yi, a member of the Political Bureau of the Communist Party of China (CPC) Central Committee and China’s Foreign Minister, visited the EU headquarters in Brussels, as well as Germany and France, underscoring the importance both sides attach to this relationship.

Wang told European Commission President Ursula von der Leyen that the upcoming China-EU leaders' meeting is a significant event taking place at a critical juncture. China looks forward to working with the EU to summarize the valuable experience and important insights from the past 50 years of China-EU relations, and map out the future direction of dialogue and cooperation for the next 50 years.

This week also saw a key event between China and the EU. On July 14, Chinese Vice Premier Ding Xuexiang held the sixth China-EU High-Level Environment and Climate Dialogue jointly with Teresa Ribera, Executive Vice President of the European Commission. Cooperation in environmental protection and climate protection is one of the few fields in which China and the EU have few disputes.

Also, earlier this month, the 13th World Peace Forum (WPF) held at Tsinghua University also discussed China-EU relations. When addressing the opening ceremony of the forum, former President of the European Council Herman Van Rompuy called for more dialogues between countries, governments and peoples, expressing optimism regarding an upcoming China-EU summit.

His opinions on China-EU relations were echoed by Shi Mingde, former Chinese ambassador to Germany. When speaking at a panel discussion focusing on China-EU ties, Shi reiterated that China-EU relations should not be affected by a third country, saying that the upcoming China-EU summit will be a valuable opportunity where both sides can reflect on the achievements the two sides have made over the past 50 years, and take a closer look at the problems at hand.

Former President of the European Council Herman Van Rompuy addressing the World Peace Forum

At the invitation of Beijing Scroll, two Chinese experts have contributed insightful articles on China-EU relations, with a focus on the upcoming summit, and we have translated them verbatim into English. Their analysis delves into the current dilemmas and concerns within the EU, which are shaping—and at times distorting—European perceptions of its relationship with China.

Prof. Ding Chun is director of the Center for European Studies, Fudan University, and vice president of the Chinese Association for European Studies. He believes that the upcoming China-EU summit will test whether both sides can rebuild trust and stable cooperation amid rising tensions and protectionism. Despite differences, the article urges China and the EU to focus on dialogue and practical collaboration, as their partnership remains crucial for global stability.

Back at the crossroads -- Looking at next 50 years of China-EU relations through lens of upcoming summit: view from Prof. Ding Chun

The upcoming China-EU summit once again draws international attention to this half-century-old bilateral relationship that has weathered many storms.

At a time of geopolitical fragmentation, global economic slowdown, tariff hikes and rising protectionism, the meeting is not only of commemorative significance but a real test: can China and the European Union (EU) rebuild a stable, mature, and sustainable cooperation framework in an environment of growing differences?

Currently, expectations for the summit's outcomes are more cautious. Observers anticipate that during the summit, both sides will reaffirm their support for dialogue mechanisms, express a willingness to deepen cooperation in new areas such as green and digital development, and emphasize the need to manage differences properly.

Compared to previous idealism, such expectation reflects the status quo of bilateral relations as well as their corresponding stance and policy atmosphere.

Over the past 50 years, China-EU relations have expanded from initial economic exchanges to a comprehensive relationship spanning politics, security, culture, and global governance. The China-EU Comprehensive Strategic Partnership, established in 2003, was a testament to a high degree of mutual trust and a shared aspiration between the two sides.

In recent years, tensions and misunderstandings between China and the EU have continued intensifying. Within the EU's three-dimensional policy approach to China -- partner for cooperation, economic competitor, and a systemic rival -- the "rival" tone has become increasingly prominent, eroding the fundamental trust that underpins bilateral cooperation.

China has consistently advocated for the partnership. However, the status quo of China-EU relations and the EU's stance on China stand in stark contrast to it, with a clear deficit in strategic coordination and political trust.

Moreover, the EU's concerns and criticisms on issues regarding China's institutional model, the so-called "overcapacity," and human rights have recently become more intense. Internal political considerations partly drove these concerns, but many of them have been overstated and detached from facts.

For example, when simply attributing China's advantages in electric vehicles (EVs) and green energy to subsidies, they have overlooked China's long-term investments in innovation chains, infrastructure, and industrial organization. At the same time, accusations of so-called "forced labor" in Xinjiang were often forged in disregard of China's efforts in opening access to third-party inspections and data clarifications.

China never shies away from differences but advocates resolving them through dialogue based on facts.

The fundamental issue lies in the difference in perception: does the EU see China as a threat to its value system, or as an important partner in dealing with global challenges?

The EU side is choosing a tougher economic policy towards China, taking politicized actions such as launching anti-subsidy investigations into Chinese EVs and restricting high-tech cooperation with China. The escalating accusations have seriously impacted the stability of global industrial chains.

China, by contrast, has continuously called for resolving disputes within the WTO framework and advocated open markets and mutually beneficial cooperation.

Facts have proven that protectionism will not bring recovery; only dialogue and cooperation can build resilience.

China and the EU are naturally complementary on global issues such as climate change, AI governance, and public health. They should work together to become a model of win-win cooperation instead of restraining each other as rivals. Applying a zero-sum mindset will not only miss opportunities for cooperation but also exacerbate the fragmentation of the global multilateral system.

This year marks the 50th anniversary of the establishment of China-EU diplomatic ties. Building on this milestone, both sides should reassess the strategic importance of their relations -- not just summarizing the past but also envisaging the future.

China and the EU urgently need to reopen channels, rebuild trust, and reshape mechanisms regarding high-level dialogue, people-to-people exchanges, and sub-national cooperation. Existing platforms such as the China-EU green partnership and the China-EU High-level Digital Dialogue need further institutionalization and strategic enhancement, promoting the establishment of a "sustainable strategic partnership" and ensuring the partnership is truly "comprehensive" in practice.

For Europe, it is also necessary to guard against the politicization of economic and trade disputes and to prevent ideology from spilling over into areas like technology and industry, which should remain neutral.

If the EU wants to maintain its image as a defender of global rules, it must formulate policies based on rules rather than geopolitical games. Decoupling from or excluding China will not enhance its so-called "strategic autonomy," but will only limit its room for maneuver.

Looking forward to the next 50 years, China-EU relations should focus on managing differences instead of eliminating them; on shaping stability instead of creating confrontation.

The two sides should seek common ground while accommodating differences. A rational and healthy China-EU relationship not only concerns the well-being of 1.9 billion people but also carries crucial significance for world peace and the stability of the multilateral order.

The China-EU summit has yet to be held, but its preparatory process has already sent a positive signal: dialogue is still going on, and cooperation remains necessary.

The direction of China-EU relations in the future depends not on who is stronger, but on whether mutual trust and understanding are chosen. The future needs to begin with rational dialogue, time and again.

Prof. Zhao Yongsheng is a researcher and head of the French economy research center at the Academy of China Open Economy Studies, University of International Business and Economics. He is currently a visiting scholar at Sorbonne University in Paris. In Zhao's article, he argues that the real source of China-EU tensions on economic and trade issues lies in Europe's "three anxieties:" being sidelined by the U.S. in global affairs, unease over trade imbalances, and a deep-seated fear of declining industrial capacity. While these concerns fuel restrictive measures, the EU still relies on China's vast market, advanced technologies, and industrial strength to realize its re-industrialization goals, making continued cooperation both necessary and resilient.

Three anxieties on EU's side are hampering China-EU economic cooperation: views from Prof. Zhao Yongsheng

This year marks the 50th anniversary of the official establishment of diplomatic relations between China and the European Union (EU). Over the past half-century, China-EU relations have achieved considerable development. In particular, economic and trade cooperation has become the cornerstone for the stable and healthy development of bilateral relations.

However, in recent years, the EU has imposed so-called punitive tariffs or taken restrictive measures against China in areas such as electric vehicles and the purchase of medical devices, proposed to "de-risk" from China, and called for strengthening trade barriers to protect the European economy from the impact of Chinese goods.

How come these "noises" are in the "harmonious sounds" of economic and trade cooperation between China and Europe?

Despite the noises, likely, the main tune of China-EU economic and trade cooperation will not be negatively affected. The foundation of such cooperation remains solid and the fundamentals remain good. China and the EU are important trade partners to each other, with a bilateral trade volume stable at around 2.7 billion U.S. dollars daily, and China has maintained its position as the second-largest trading partner of the EU for many consecutive years.

In short, in spite of the ups and downs in China-EU economic and trade relations over the past few decades, in the context of relations among major economies, their major characteristics have always been stability and resilience.

So how come the clamor? I believe that it stems from the three major anxieties of the EU and its member states, namely "being-at-the-table anxiety," "economic and trade anxiety," and "re-industrialization anxiety."

The anxiety of "being-at-the-table" originates from European countries' relations with the U.S. It is well known that while the U.S. is theoretically the closest ally of the EU, it arbitrarily refuses to let the EU "sit at the table" in negotiations of key issues, such as the Russia-Ukraine conflict. As a result, the EU and its members developed an anxiety of being left out. Therefore, when dealing with countries other than the U.S., especially major powers like China, the anxiety kicks in.

The EU has always raised the Russia-Ukraine conflict and Iran's nuclear weapons as key issues to China. But as is known to all, neither of these issues was caused by or exacerbated by China. Instead, China did its best to solve and defuse the situation. By throwing these two issues at China, policymakers of the EU exhibit a loss of composure, indicating the worsening of their anxiety.

The second anxiety has to do with the economy and trade. The EU, along with China and the U.S. are referred to as the world's three major economies. Yet when dealing with the three groups of economic and trade relations: that between Europe and the U.S., between China and Europe, and between China and the U.S., the EU and its member states are more likely to fall into "economic and trade anxiety" than the other two.

The underlying logic is simple. The United States, a global leader in many fields, holds a more powerful and proactive position in economic and trade relations with other countries and regions, and naturally is less likely to develop anxiety in comparison with the other two. As for China, which is slightly behind the United States in overall strength but is catching up with the U.S. in some fields, it has developed a large economy that champions and adheres to the principles of free trade, economic openness and globalization. It also has little reason to be anxious.

Of the aforementioned three groups of economic and trade relations, the complementarity and mutual penetration of the economic and trade relations between China and the U.S. are quite high, and reaching a consensus is not all hard. In the meantime, although there seem to be many obstacles in China-EU economic and trade relations for the time being, it is also highly complementary. From a practical perspective, it is not difficult for the two sides to reach an agreement.

The economic and trade relations between Europe and the U.S., on the other hand, are the most difficult of the three to handle. Although the EU refer to the U.S. as a "cousin" in certain official documents, since they do not differ as much as China and the U.S. in terms of development stage and industrial advantages, and both are developed economies with similar development paths and industrial layouts, the economic and trade complementarity between the U.S. and the EU is far lower than that between China and the U.S. and between China and the EU.

This is also why, while the United Kingdom and the U.S. reached a basic agreement early on and China and the U.S. have agreed on a framework, economic and trade negotiations between the EU and the U.S. remain fraught with difficulties. In fact, progress on this front has been the slowest among the three major relationships.

The third anxiety lies in the EU's prospects of re-industrialization. The two aforementioned anxieties, though both important, are on a superficial level. The "re-industrialization anxiety," on the other hand, touches on the more profound parts of the EU's mindset.

Let us take France as an example. France once surpassed the United States in manufacturing and was once the world's top manufacturing country. However, with the gradual implementation of the "de-industrialization" policy and the acceleration of the trend, France's manufacturing industry has long since fallen behind. Its industrial chain and value chain, in the meantime, became fragmented and highly dependent on large economies such as China and the U.S.

When looking at the relations between China and the EU, it can be deduced that China can certainly lend a hand to their "re-industrialization." To be fair, China is perhaps the only country that is both willing and able to do so, and can be a reliable strategic partner to France and the EU in this regard. Below are three reasons that support this claim.

First, in terms of economic aggregate, China's nominal GDP in 2023 was 17.67 trillion U.S. dollars, second only to that of the United States. If calculated by purchasing power parity (PPP), China has surpassed the United States. In terms of economic growth rate, China has become the largest contributor to the world's GDP in absolute terms.

Secondly, Chinese enterprises are brimming with innovation and have become the world's innovation centers in some fields. The number of unicorn companies in China is second only to that of the U.S. In the fields of artificial intelligence (AI) and the chip industry, China is also developing rapidly to be the world's largest chip producer. In the meantime, China's electricity generation is greater than the combined total of the U.S., the EU and India.

Thirdly, for the readers' reference, here are eight industrial sectors in which China leads the world.

1. 5G technology. China's Huawei holds 8,400 5G technology patents, accounting for 15 percent of the world's total. Many European enterprises even regard Huawei as their strategic partner.

2. Artificial intelligence. By 2024, there were 4,500 AI professional enterprises in China. In 2024 alone, 114 AI startups were born in China, among which 58 received an average of tens of millions of US dollars in investment.

3. High-speed railway. By 2024, China had 162,000 kilometers of railway, of which 48,000 kilometers are high-speed, ranking first in the world.

4. New energy vehicles. In 2024, the production and sales volume of new energy vehicles in China were 12.89 million and 12.87 million, respectively, with growth rates of 34.4 percent and 35.5 percent. German car manufacturers have regarded Chinese car manufacturers as strategic partners.

5. Satellite Navigation. In 2023, China's satellite navigation services reached 536 billion yuan, and 137 countries have signed cooperation agreements with China's BeiDou Navigation System.

6. Mobile Payment. By 2024, a total of 1.029 billion people in China were using mobile payments, an increase of 195.2 percent compared to 2017. China's online sales and mobile payment penetration rates both rank first in the world.

7. Lithium batteries. China owns 78.6 percent of the world's battery production capacity and is home to six of the world's top 10 battery manufacturers.

8. Household Robots. Since 2023, the production of household robots in China has increased sharply. In 2024, Chinese hotels will already have 30,000 robots, and a new robot training center will be opened in Shanghai in the same year.

In conclusion, the foundation for China-EU economic and trade cooperation remains steady, and its fundamentals remain promising, and continue to show stability and resilience. The reason behind the noises that disturb this cooperation is the three anxieties on the EU's part, namely "being-at-the-table anxiety" "economic and trade anxiety" and "re-industrialization anxiety."

To achieve its goal of re-industrialization, the EU and its members need the help of Chinese technologies, capital and strategies. After all, there aren't many countries that can and want to help the EU reach this goal.

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Participants engaged in in-depth discussions and exchanges on topics such as "Post WWII International Order and Sovereignty over Nanhai Zhudao", "History of the South China Sea from Political and Legal Perspectives", and "Re-evaluation of the South China Sea Arbitration Award."

Diplomats from the embassies of Malaysia, Vietnam, the Philippines, Brunei, Thailand, Cambodia, Singapore, Japan, South Korea, the United Kingdom, the United States, New Zealand, Mexico, the European Union, and other countries and international organizations in China also attended the event.

Today's newsletter includes highlights of the keynote speeches delivered by two scholars during the workshop. They are Wu Shicun, Chairman of the Huayang Center and Chairman of the Academic Committee of the National Institute for South China Sea Studies (NISCSS), and Li Guoqiang, Deputy Director of the Chinese Academy of History and Member of the Academic Divisions of the Chinese Academy of Social Sciences.

In addition, it includes highlights of two articles analyzing the South China Sea issue by Lei Xiaolu, a professor in China Institute of Boundary and Ocean Studies (CIBOS), Wuhan University, and Ding Duo, an associate research fellow at the NISCSS, respectively.

Wu Shicun, Chairman of the Huayang Center and Chairman of the Academic Committee of NISCSS

Wu Shicun emphasized that China's sovereignty over the South China Sea islands is supported by solid historical and legal grounds. The Chinese people have exercised administration and jurisdiction over the South China Sea since ancient times. After World War II, China lawfully recovered the islands in 1946 in accordance with the Cairo Declaration and Potsdam Proclamation, and publicly announced the recovery to the world.

He pointed out that the root causes of the current disputes lie in the illegal occupation of certain islands and reefs by the Philippines, Vietnam, and others starting in the 1970s, compounded by overlapping claims under modern maritime law. Wu Shicun identified three major challenges currently facing the South China Sea situation:

1. U.S. intervention has intensified tensions. Under the pretext of "Freedom of Navigation", the U.S. has strengthened its military presence and supported unlawful claims by other countries.

2. Escalating violations by claimant states, particularly the Philippines, has provoked incidents at Ren'ai Jiao (Second Thomas Shoal) and introduced intermediate-range missile systems, posing a threat to regional security.

3. Stalled progress in the Code of Conduct (COC) consultations, as extra-regional forces exploit the illegal arbitration ruling to obstruct the negotiation process and undermine efforts by China and ASEAN to manage crises.

Wu Shicun also refuted the “2016 South China Sea Arbitration Award,” and pointed out that it was entirely illegal and invalid due to serious flaws in jurisdiction, tribunal composition, legal reasoning, factual findings, and evidence handling. He argued that the “award” has become a "troublemaker undermining stability in the South China Sea."

Wu Shicun called on regional countries to jointly uphold the post-WWII international order, resist external interference, accelerate the COC negotiation process, and build a community of shared future in the South China Sea through practical maritime cooperation.

Li Guoqiang, Deputy Director of the Chinese Academy of History and Member of the Academic Divisions of the Chinese Academy of Social Sciences

Li Guoqiang pointed out that the victory in World War II 80 years ago brought an end to Fascist Japan's illegal occupation of the South China Sea islands. This outcome, affirmed through a series of significant international treaties, confirmed China's sovereignty over the South China Sea islands. The Chinese government successfully reclaimed these islands with broad support from the international community.

He emphasized that history is the root of reality, and reality is the continuation of history. Only by understanding where the South China Sea issue originated, can we comprehend why the situation today is what it is - and not something else - and gain clarity about where the South China Sea is heading, and where it is not.

Li Guoqiang concluded by saying that a sea of peace, friendship, cooperation, and goodwill was the original state of the South China Sea, and that it should likewise reflect the aspirations of our era.

Lei Xiaolu, professor in China Institute of Boundary and Ocean Studies (CIBOS)

The Zhongsha Islands and Nansha Islands have historically and geographically been regarded as integral wholes. Not only do neighboring countries view them as unified entities, but countries outside the region also recognize them as such, consistently describing them as integral wholes in official documents and archives. The Philippines' request for separate determinations on the legal status and maritime entitlements of Huangyan Island and eight features in the Nansha Islands essentially denies China's territorial sovereignty over the Nansha Islands and misrepresents the nature and scope of the China-Philippines sovereignty dispute over the Nansha Islands.

The “arbitral tribunal” adopted a fragmentation approach in characterizing the disputes raised in the Philippines' submissions, failing to conduct objective analysis based on facts. For instance, it surreptitiously replaced the concept of "islands" (群岛) as an integral whole with "a group of features" (“一组岛礁). In Paragraph 160 of “the Award on Jurisdiction and Admissibility,” the “tribunal” deliberately changed "China's Nansha Islands is" in China's note verbale to "China's Nansha Islands are," distorting China's claims regarding territorial sovereignty and maritime entitlements over the Nansha Islands as an integral whole into claims based on individual features.

Through this sleight of hand fragmentation, the “arbitration award” transformed the territorial sovereignty dispute over the Nansha Islands into questions of whether features like Ren'ai Jiao fall within the Philippines' exclusive economic zone and continental shelf, effectively determining the ownership of certain features in the Nansha Islands in disguise. This is far from what the Philippines claimed as "not requesting the tribunal to determine territorial sovereignty issues."

Ding Duo, associate research fellow at the NISCSS

In dealing with the South China Sea issue, the Philippines needs to return to reality, and Manila must also undertake necessary psychological adjustments.

First, it must abandon the illusion of "judicial omnipotence." That “award,” which exceeded jurisdiction and perverted justice, no matter how elegantly packaged, cannot change its invalid nature. It is both unreasonable and unrealistic to fantasize about resolving South China Sea disputes involving complex history, sovereignty, and geopolitics through a single award or by initiating similar litigation again, or to impose results devoid of any fairness upon China. Both historical experience and current reality prove this path leads nowhere.

Second, it must recognize the nature and harm of external interference. Actively courting major powers from outside the region to intervene in regional disputes is tantamount to inviting the wolf into the house. External forces act based on their own interests, and their intervention will only exacerbate tensions, pushing regional countries to the forefront of major power confrontation, ultimately sacrificing the region's peace, stability, and development prospects. Fantasizing about relying on external forces to suppress another party to resolve issues will only backfire.

Third, it should actively seek paths for cooperation. While disputes concerning the South China Sea are difficult to resolve in the short term, the immediate priority is to promote maritime cooperation in less sensitive areas. Countries directly concerned can engage in practical cooperation in areas such as joint conservation and management of fishery resources, marine ecological environment protection, maritime search and rescue, and marine scientific research. Such cooperation does not touch upon complex core disputes, yet can effectively provide public goods and create a favorable atmosphere for resolving more difficult issues in the future.

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In both countries, Minister Wang repeatedly emphasized the importance of “implementing the consensus reached by the leaders of the two countries,” a phrase that underscores the diplomatic weight behind these economic visits.

Earlier this year, Chinese President Xi Jinping held separate meetings with leaders from Sri Lanka and Bangladesh:

• In January, Xi met with Sri Lankan President Anura Kumara Dissanayake in Beijing, where he reaffirmed China’s support for Sri Lanka’s economic development and the deepening of cooperation in key areas such as high-quality Belt and Road projects, modern agriculture, the digital and marine economies.

• In March, Xi met with Bangladeshi interim government's Chief Adviser Muhammad Yunus. Xi expressed readiness to expand cooperation in digital infrastructure, green development, marine economy, and water management—while also strengthening people-to-people ties.

Key Meetings in Sri Lanka (May 29–30)

According to the Commerce Ministry, Wang’s schedule in Colombo included:

• May 29: Co-chaired the 8th Meeting of the China–Sri Lanka Joint Commission on Economic and Trade Cooperation alongside Sri Lankan Minister of Trade Nalin Fernando.

• May 29: Met with President Dissanayake to exchange views on deepening bilateral trade ties.

• May 30: Attended the China–Sri Lanka Trade and Investment Forum, joined by over 200 representatives from Chinese and Sri Lankan companies and business associations.

• May 30: Held talks with Sri Lankan Prime Minister Dinesh Gunawardena on implementing bilateral consensus and enhancing practical economic cooperation.

Key Engagements in Bangladesh (May 31–June 1)

In Dhaka, Minister Wang’s visit was equally packed:

• May 31: Met with Commerce Adviser Sk Bashir Uddin, for in-depth discussions on deepening China–Bangladesh economic ties.

• June 1: Attended the China–Bangladesh Trade and Investment Conference, which brought together more than 400 representatives from the business communities of both countries.

• June 1: Co-chaired the 15th Meeting of the China–Bangladesh Joint Commission on Economic and Trade Cooperation with Finance Adviser Salehuddin Ahmed, covering a wide range of topics including trade facilitation, industrial and supply chain collaboration, and support for multilateralism.

• June 1: Held talks with Bangladeshi interim government's Chief Adviser Muhammad Yunus to explore further practical cooperation.

During the meetings, officials from both Sri Lanka and Bangladesh expressed strong hopes for increased Chinese investment in their countries. Wang, for his part, reiterated China’s readiness to unlock the full potential of bilateral trade, deepen industrial and supply chain integration. To me, it's a positive response to concerns about trade imbalances—an issue that remains sensitive for both countries.

Expert Views: South Asia as a Strategic Market

“Even excluding India, the South Asian region is home to a massive market of around 500 million people,” Lin Minwang, deputy director of the Center for South Asian Studies at Fudan University, told me in an interview. “Many of these countries are also actively seeking stronger supply chain resilience, which makes trade and investment cooperation with China a win-win proposition.”

On the issue of trade deficits, Liu Zongyi, director of the Center for South Asia Studies at the Shanghai Institutes for International Studies, noted that these are primarily structural issues. “China has granted significant tariff exemptions to these countries, with most of their exports entering the Chinese market tariff-free,” he explained.

Liu added that in recent years, China has been relocating certain industries to Belt and Road countries, including those in the Global South. “This helps these countries move beyond being passive participants in global supply chains. It’s also part of China’s strategy to strengthen its external economic circulation and reinforce economic resilience.”

Wang Wentao’s remarks at both bilateral forums echoed these goals. In Bangladesh, he spoke about helping “boost export capacity and promote integrated trade and investment development.” In Sri Lanka, he highlighted the importance of “deeper supply chain integration” and supporting “local industrial development.”

Such initiatives not only aim to address trade imbalances, but also help reinforce a multilateral trade framework that brings greater stability and predictability to the global economy.

China’s media have also reported favorably on the response from local business chambers—another signal that these visits are being viewed as more than symbolic gestures.

China, Sri Lanka sign new cooperation agreements, deepen economic ties -- Global Times

Business representatives echoed the positive tone of official engagements. Huang Fen, vice president of Tongfa Group, a Chinese enterprise engaged in the development, processing and trading of canned food, sugar and other products, went to Colombo to seek opportunities recently. She expressed appreciation for the favorable policies released by the Sri Lanka government to attract foreign enterprises.

......

Sri Lanka is one of the most important participating countries of the BRI and enjoys a traditional friendship with China. “We deeply felt the traditional friendship between China and Sri Lanka during the trip, and thereby are encouraged for future investment and trade cooperation with our partners in Sri Lanka,” Huang added.

A Chinese WeChat blog specializing in South Asian affairs, South Asia Research Bulletin (南亚研究通讯), also reported on the trip under the headline: “Commerce Minister Wang Wentao Leads Delegation to Sri Lanka, Aiming for Deep Integration of Industrial and Supply Chains!”

Ahead of Wang’s visit to Bangladesh, Xinhua News Agency reported that the first consignment of Bangladeshi fresh mangoes was exported to China on May 28.

"In the near future, an increasing number of high-quality Bangladeshi agricultural products will be stocked on the shelves of Chinese supermarkets," said Chinese Ambassador to Bangladesh Yao Wen.

I attended a commemorative conference on the 120th anniversary of U.S. journalist Edgar Snow's birth on Friday at Peking University in Beijing. Co-organized by Peking University and the Xinhua Institute, the event was attended by Snow's relatives and close friends, as well as seasoned journalists and specialists on Edgar Snow studies and international communication.

Edgar Snow holds a unique place in modern Chinese history as the first Western journalist to introduce China’s Red Army to the world. In 1936, at a time when China was embroiled in internal conflict and faced external aggression, Snow made his way to the remote headquarters of the Communist Party of China (CPC) in northwest China's Shaanxi Province, where he conducted extensive interviews with top Party leaders, including late Chinese leader Mao Zedong.

According to Xinhua News Agency, Snow's firsthand reporting culminated in "Red Star Over China," which was published a year later and provided not only the West but also China with a rare and authentic account of the Red Army, its leadership and its steadfast commitment to improving the lives of the Chinese people.

Snow also has a special connection to my family: the young bugler featured on the iconic cover of Snow's Red Star Over China was my uncle’s father, Xie Liquan. That photo was taken in September 1936 in Yuwangbao Town, Tongxin County, Ningxia, when Xie was just 19 years old.

In June that year, Snow had entered northwest China to interview the Red Army. He had been searching for a symbolic image that would show the Red Army as China’s vanguard against Japanese aggression. He was struck by the upright posture and sharp appearance of Xie —a young officer with a pistol at his side—and asked him to pose for what would become one of the most enduring images of the era.

A few years later, in 1940, Xie made his way to southern China, eventually becoming one of the commanders of the Pearl River Column, a key anti-Japanese guerrilla force in Guangdong Province. Under his leadership, the unit even supported operations by the World War II Allies in the Pacific theater.

That concludes the story of Xie. Now back to Friday’s event. Participants of the conference on Friday explored how China can build a more effective international communication system, with discussions focusing on themes such as "Presenting the real China to the World" and "Talent development & the legacy of Edgar Snow's spirit."

"Presenting the real China to the World" seminar held during the conference

Speaking at the conference's opening ceremony, Fu Hua, president of Xinhua News Agency, said that Snow was a sincere friend of the Chinese people, an envoy for China-U.S. relations, and a revered journalist.

"Through his cross-border, cross-cultural journalistic practice, Snow provided the world on both sides of the Pacific with an accurate, multi-dimensional and panoramic view of China," Fu said.

There’s no doubt that, nearly 90 years after Snow first came to China, the country still harbors a deep eagerness to be understood by the world. Attending the event, I found myself reflecting not only on the significance of Snow’s legacy, but also on the broader questions that surround it.

In Chinese discussions about Snow—his work, his visits, and his legacy—one phrase appears time and again: “the real China.” Back in the 1930s, very few outsiders had seen the Chinese Communist forces operating in northern Shaanxi. Snow’s Red Star Over China was groundbreaking precisely because it introduced a rarely glimpsed side of China to the world.

Now, nearly nine decades later, that desire hasn’t disappeared. If anything, it has evolved. You can still sense a strong eagerness—yes, that’s the word I’d use—among ordinary Chinese people to share their stories with the world. I’ve seen it firsthand, again and again. And today, just like back then, people continue to emphasize the need to show “the real China.” This persistent emphasis reveals something deeper: that an “unreal China,” or perhaps a misunderstood one, has never fully gone away. Even after all the profound transformations the country has undergone, this shadow still lingers. It’s no wonder, then, that so many Chinese people and a few international friends feel compelled to seize every opportunity to tell China’s story abroad. Some foreign media outlets have even picked up on this impulse itself, occasionally poking fun at how “hard” the Chinese government tries to promote its image.

Why has China not seen another figure quite like Edgar Snow? And what would it take for someone like him to emerge again? Of course, many people have followed in Snow’s footsteps. Some have written books, just as Snow did. Others livestream daily life in China to global audiences. In their own ways, each tries to show facets of China that are rarely visible abroad.

And yet, one wonders: why does China still commemorate Edgar Snow, after all these years?

These were some of the questions on my mind when I sat down with Professor Sun Hua, director of Peking University’s China Center for Edgar Snow Studies (CCESS) during the conference. Here is our conversation.

Prof. Sun Hua, director of Peking University’s China Center for Edgar Snow Studies (CCESS)

JJ: In your view, what was the main reason for the world’s distorted or limited understanding of China during Snow’s time? And today, what misconceptions or misunderstandings about China dominate the international narrative?

Sun: Back in Snow’s era, one of the biggest reasons for the world’s ignorance about China was the strict media censorship imposed by the Kuomintang (KMT) government. The KMT didn’t want the outside world to know anything about the CPC or the Red Army. They went to great lengths to obscure the reality of the Communist movement.

In Red Star Over China, Snow mentioned that he arrived in northern Shaanxi with a list of 80 questions. He asked things like: What are the Red Army’s goals? What kind of ideology do they follow? Are their wives shared communally? Do they really carry crude bombs around their waists? Are they monstrous in appearance?

But what he found on the ground was strikingly different. In Yan’an, he saw Red Army members drinking coffee, playing the piano, and even playing tennis. He encountered many highly educated individuals who had returned from overseas and joined the Communist movement. He found them unusual—in a good way.

Snow was particularly struck by the Red Army’s "Three Main Rules of Discipline and Eight Points for Attention." That’s why John King Fairbank later said Snow had a kind of historical foresight—he saw that this group was capable of founding a new China. For example, the first of the Eight Points required soldiers not to stay inside villagers' homes while passing through but to borrow removable wooden doors to sleep on in the courtyards. Afterward, they would return and reinstall the doors before moving on. (“上门板”)

Another rule required that the army's toilets be placed far away from villagers' homes—simple, considerate acts. Over time, these values laid the groundwork for the Party’s political philosophy. Snow’s great contribution was that he pierced through the fog and revealed how this little-known army had truly won the support of the people.

Fast forward to today, and the dominant narrative in many parts of the world is that China’s rise is a threat. At the core of this, I think, is China’s lack of a robust, self-defined discourse system. The dominant global discourse is still shaped by Western media and institutions. Our macroeconomics, microeconomics—even journalism and law—are taught from foreign textbooks, based on Western frameworks.

But those frameworks often fail to explain what’s unique about China. That’s why we need to build a Chinese discourse system—one that can interpret and explain “Chinese modernization” on our own terms, so others can better understand what we’re trying to do.

JJ: Some overseas China watchers argue that the very act of building China's own discourse system challenges the existing Western one—or even threatens it. How do you respond to that concern?

Sun: There’s a traditional Chinese saying: “Harmony without uniformity” (和而不同). Every country has its own values, ethics, and ideologies. We respect that. But just as we don’t seek to replace others’ values with our own, we don’t wish for others to impose theirs on us.

As Fu Hua, president of Xinhua News Agency, said in his speech earlier today, we should “join hands to reach the radiant ‘far shore’ of mutual appreciation—where each country cherishes its own beauty and also values the beauty of others.” That’s the spirit we believe in.

JJ: Over the past 80-plus years since Snow, many international figures have helped introduce China to the world—people like Peter Hessler or even newer faces like IShowSpeed. One American that China holds in particularly high esteem is Henry Kissinger. Chinese media often wonder who might become “the next Kissinger” for China. It seems China has long hoped to find someone who can play a similar role—but no one has quite matched Snow or Kissinger’s historical impact. How do you view these “foreign friends” of China since Snow? Why do you think there hasn't been another figure on the same level?

Sun: I’ve read Peter Hessler’s books, and I think we should adopt a more inclusive attitude toward foreign friends. Some people say Snow was the first to report on the Long March, but actually, it was a British missionary named Rudolf Alfred Bosshardt (薄复礼) who encountered the Red Army during their march through China’s southwest borderlands.

Initially, the Red Army viewed missionaries as hostile, accusing them of spreading misleading ideas. But they soon saw how the missionaries helped treat villagers and decided to release them—except for Bosshardt, who stayed with the Red Army to help. They had an important French map that no one could read—except Bosshardt.

After the Red Army left the region, Bosshardt returned to Britain and wrote a book titled The Restraining Hand: Captivity for Christ in China. It contained many criticisms of the Party. But when the book’s Chinese edition was published years later, a Chinese general who had once detained him wrote a note in the preface. It said something like, “We welcome foreign critiques of China—especially those that are critical. They are the ones we must study most carefully.” I think that’s a profound and generous perspective.

So when people read Hessler’s River Town or other books and feel uncomfortable or offended—I would say, let these diverse voices exist. It’s precisely through that diversity that a fuller, more truthful image of China can emerge.

We shouldn’t expect every foreign friend to get everything 100% right, or to only say positive things about us. Even people at Peking University criticize the university—it often comes from a place of deep affection.

That’s why Lu Xun once said that Snow loved China more than some Chinese themselves. So I believe we need to be more open-minded, more tolerant of critical voices. If the criticism is valid, we should learn from it; if not, we can reflect and move on.

Also, I’d say Snow and Kissinger are fundamentally different figures. Snow stood with the Chinese people. He sympathized with their struggles. Kissinger, on the other hand, always approached China from the standpoint of U.S. national interest. His belief was that maintaining good relations with China would benefit America.

Snow, however, operated from a deeply personal place. He broke through ideological, cultural, and religious barriers to truly understand China. That’s what we mean by “harmony without uniformity.” Only through mutual appreciation can we move toward a more harmonious world.

JJ: Suppose an ordinary American who’s never heard of Edgar Snow asks you: Why is China still commemorating him, even on the 120th anniversary of his birth? What would you say?

Sun: This year marks the 80th anniversary of the victory in the Chinese People’s War of Resistance Against Japanese Aggression and the World Anti-Fascist War. Snow’s Red Star Over China played a key role in introducing played a crucial role in introducing the CPC's idea of forming a united front against Japanese aggression. Thanks to Snow’s reporting, U.S. delegations—including military observers—traveled to northern Shaanxi to support China’s anti-fascist cause. Mao Zedong once said, during an interview with a German journalist, that “when the whole world had forgotten about us, only Snow came.” That’s why we will never forget the immense contribution he made.

The Chinese people are quite nostalgic. We do not forget old friends. We do not forget those who stood by us during difficult times. And this moment—this anniversary—is an opportunity. Figures like Snow, who live in the shared memory of both Chinese and American people, can help bridge the distance between our nations.

Shi Yifei, Wei Mengjia, and Liu Jiani also contributed to today’s newsletter.

But then I came across a story that might be even more compelling — one about the Chinese manufacturer behind the iconic “MAGA” hat. I first heard about it on an episode of the Chinese podcast Sheng Dong Ji Xi (声东击西) on the Xiaoyuzhou platform. The episode, recorded about a month ago, was a bonus drop added on short notice — a sign, perhaps, of how unexpectedly fascinating the story was.

Roughly a month later, a Chinese independent media outlet called Direct Connect (正面连接), which uses the tagline “Facing Complexity,” ran a detailed report on the same subject via its WeChat blog. Both the podcast and the report are, in my view, worth your attention.

Today, I’d like to introduce you to the report by Direct Connect. Its protagonist is known simply as Brother Wang (王大哥), a hat maker based in Ligezhuang Town in Jiaozhou, east China's Shandong Province — a place often referred to as “China’s hat capital.”

Brother Wang isn’t interested in politics — he only cares about making a living. But despite his indifference, he still found himself swept into the global trade war.

Beyond the series of dramas he’s faced over the past year, what struck me most was his attention to detail in designing the MAGA hat. He was probably the first to come up with a mesh-back version for customers in hotter parts of the U.S., and he kept innovating with colors — from gray and black-gold to holiday-themed versions in rose white and red-and-green for Christmas. He even designed a hat for Kamala Harris supporters (though, as he later observed, they didn’t seem too fond of wearing hats).

And when he spotted Elon Musk sporting a new gothic-style black MAGA hat, he skipped the usual prototyping phase and rushed straight into production.

To me, this reflects something essential about many of China’s small business owners: a scrappy spirit marked by sharp instincts, customer-oriented thinking, a willingness to break from convention, and a constant drive to experiment. It's this very mindset that helped turn China into the world’s factory for countless niche products over the past two decades.

Trump, Harris, even Musk — everyone has their own hat. Left, right, center — slogans from all sides end up stitched across caps. But in Mr. Wang’s hat shop in Ligezhuang Town, politics doesn’t matter. Each hat sells for 14.99 U.S. dollars, no matter the message.

The Guy Behind the MAGA Hat

Jiaozhou is a county-level city under Qingdao, and in it there’s a town called Ligezhuang, known as China’s Hat-Making Capital. The town produces 500 million hats a year, shipped to countries across Europe, America, Asia, and Africa. About one-third of the world’s baseball caps come from Jiaozhou.

In 2016, Brother Wang dropped by a friend’s factory and saw piles of red hats printed with “Make America Great Again.” He asked about them and was told that American clients had recently been placing a ton of orders for this design.

“Make America Great Again,” or MAGA for short, was Trump’s campaign slogan.

Wang was 23 that year. A local of Ligezhuang, he had the classic Jiaozhou accent—he said “make” like “mei-ke” and called a product model a “kuar.”

Around a third of the town’s residents work in the hat business. Wang grew up around hats and developed a keen eye for them. He had no idea what the words on the hat meant, but he figured there was money to be made. His friend had leftover stock he couldn’t move, so Wang thought, why not sell a few himself? He started buying up end-of-line goods from his friend—200 hats per box, each costing about eight or nine yuan. He bought two or three boxes at a time and flipped them.

He chose Amazon as his sales channel. The platform didn’t require ads to get started. Just list your product and you’re good to go. Pricing was also pretty freeform. Wang saw that most hats on Amazon were priced with a ".99" ending, and a lot of sellers had chosen 14.99 U.S. dollars. So he followed the trend and priced his hats at 14.99 U.S. dollars each.

Shipping was straightforward. Once an order came in, he clicked “Ship” in the Amazon backend. The system would assign a warehouse somewhere in the U.S., with codes like MIA1 for Miami or VUGA for Pittsburgh. Wang didn’t know American geography and had no idea what the codes meant. All he did was send off the boxes and wait for the hats to get distributed to every corner of the US.

Once the shipment date was set, a UPS courier would show up in Ligezhuang to pick up the packages. Each box held 200 hats, and air freight cost around 1,600 yuan (about 220 U.S. dollars). UPS, the world’s largest logistics company, would carry Wang’s hats across the Pacific. About ten days later, they’d arrive at warehouses on the far side of the ocean.

Once the hats were shipped, Wang let them go.

From 2016 to 2020, Trump won one election and lost the next, but Wang’s hats didn’t change. He was selling maybe two or three a day, tops. He didn’t care. He already owned a handicrafts factory, and the hats were just a side gig. Honestly, he didn’t even know who Trump was.

Trump’s official store proudly claimed: “All our products are 100% made in the USA.” Meanwhile, Jiaozhou-made hats quietly slipped into the mix, blending in among the 55 U.S. dollars caps worn by Trump supporters across America.

MAGA Hats—Made in China.

Trump Gets Shot, Wang Hits the Jackpot

In December 2020, after Trump lost re-election, the MAGA hat was expected to fade out: donated, boxed up, forgotten. But Trump refused to concede. Months later, his hardcore supporters stormed the Capitol wearing those same red hats. When the chaos cleared, MAGA hats were scattered all over the steps.

Fast forward to mid-2024. Wang checked his Amazon dashboard and saw a spike. Sales had jumped from a few orders a day to 30. Curious, he checked the news. The US election was heating up again. Trump was back, and his loyal fans were once again gearing up with MAGA caps. Business was booming. Wang’s leftover stock couldn’t keep up. Soon, even his friend’s factory was out of hats.

Time to shift gears.

Wang had been running a factory for over a decade: up at 7, making samples, managing the books, packing orders, delivering shipments, grinding until 11 p.m. every day, often unable to sleep. This time, he didn’t want to deal with production himself. He’d outsource it.

He opened Amazon and saw the screen filled with identical red caps. The design, according to some, came straight from Trump: Republican red, plain Times New Roman font.

Wang then searched Trump caps using Chinese characters on Amazon, and picked a random photo, sent it to a local factory he knew, and started making his own MAGA hats.

In the trade, these are called “six-panel hats”, with six big fabric pieces stitched together. Not exactly beginner-level. You need a layout, fabric cutting, eyelets, stitching, embroidery, shaping, seam sealing, buttons, and final packaging. It passes through four workshops and nearly 20 production steps.

Ligezhuang isn’t just home to big factories. Plenty of families run small workshops from home. Larger manufacturers often outsource specific steps to villagers. But Wang chose a bigger operation that handled everything in-house, producing up to 40,000 hats a month.

His only job was finalizing the layout. The designer mocked up the image on a computer and printed a sample. The first version had the word “MAKE” too small. The designer enlarged the font, printed again. Back and forth a few more times. Two hours later, it was locked in. Production kicked off.

While the election battle raged across the Pacific, Wang was glued to Amazon, watching his sales climb. The more hats he sold, the better his mood. “Who doesn’t get happy when the money rolls in?” With Trump surging in the polls, business was on fire. Wang started scaling up. He went from ordering 200 hats at a time to 600, then 2,000. Every time he shipped a batch to the US, he had to restock. At any given moment, he needed at least 2,000 hats in hand.

On July 14, 2024, MAGA hat sales exploded, with nearly 2,000 sold in just one day. Wang checked the news and saw what was all over the headlines: Trump had been shot during a rally. He immediately ramped up his orders, buying 5,000 hats at a time. With demand outpacing supply, speed became everything. Wang started placing orders at multiple factories—some run by friends, some by relatives, some he just found on the fly.

But no matter how he planned, reality moved faster. He’d place an order, sales would spike again, and he’d rush to add more. Sometimes the hats hadn’t even shipped before he decided it still wasn’t enough and placed another round of chaotic, overlapping orders.

The buyers were unpredictable too. Orders poured in, but so did cancellations. Sometimes the hats hadn’t even made it to the U.S. before the buyer pulled out. At one point, up to a third of all orders were being returned.

Everything was a blur. The numbers didn’t make sense anymore, and there was no time to sort them out. So Wang stopped trying. All he knew was: he was making money. In the days after the shooting, he estimated he’d pulled in 200,000 to 300,000 yuan. At that point, all he hoped for was a Trump win.

Wang Miscalculated

The first MAGA hat made its debut on July 23, 2015. In Texas, Trump wore a white cap with blue letters. It caught everyone’s attention. That was the original version. Soon after, it evolved into the now-iconic red cap with white text.

Later, even more variations popped up thousands of miles away in Ligezhuang, Jiaozhou. When Wang first joined the game, there were only two main styles: the classic all-red hat and a version with a red brim and a tuft of fake golden Trump hair. Wang figured the hair version was too gimmicky to go mainstream. But the plain red hat was already flooded in the market—other sellers had a head start with better rankings and steady sales. There was no way to beat them head-on. So, Wang decided to get creative.

He remembered learning back in school just how big the U.S. was, with all kinds of climates. “It’s gotta be too hot for hats in some places,” he thought. “What if I gave them something with mesh?” So he made a batch of mesh-backed MAGA hats. The first 600 sold out in two days and hit No. 1 on Amazon’s New Releases.

Wang rushed to restock, but the window had already closed. Other sellers jumped on the trend, and by the time his new inventory arrived, mesh hats were everywhere. His product dropped back in rankings, crowded out by copycats. So he pivoted again, this time experimenting with colors: gray, black-and-gold, even holiday-themed versions in rose white and red-and-green for Christmas.

On July 21, 2024, President Biden dropped out of the race. Vice President Kamala Harris announced her run for president.

Wang was scrolling through TikTok when he saw the news: Harris was now Trump’s opponent. He figured, "Yep, there’s a market for this too." He opened Amazon. Sure enough, Harris hats had already hit the shelves.

The Harris hat took a page from pop star Chappell Roan’s merch: camouflage base, bright orange embroidery that read “HARRIS WALZ.” It launched at 40 U.S. dollars, going toe-to-toe with the MAGA hat.

Wang downloaded a picture, brought it to a factory, and had them make the same camo-and-orange combo, plus his signature mesh panel. Once the embroidery was done, he approved the design and rolled it into production.

Wang wasn’t picking sides. He didn’t love Trump, didn’t mind Harris. As far as he was concerned, it was a fair fight. Both hats sold for 14.99 U.S. dollars.

But to his surprise, Harris supporters weren’t much into buying hats. In the end, he sold just three or four. In hat terms, the Vice President flopped fast.

Then came October 27, 2024. Elon Musk showed up at a Trump rally in New York wearing a black MAGA hat. He called it his “Dark Goth MAGA” look.

To Wang, that meant another shot at a hit product. There wasn’t a physical hat to go off, just a blurry screenshot. He brought it to the factory anyway. No one there could read the Gothic-style text, but they gave it a shot on the computer. They ended up turning “Again” into “Agein.” To save time, they skipped the sample and jumped straight into mass production. By the time Wang realized the typo, the first batch had already shipped.

Out of 600 hats, only 40 or 50 sold. Someone left a review on Amazon: “Can’t even spell it right.”

Wang Doesn’t Care About Trump Anymore

At the start of this year, sales were already dipping. Wang said Amazon didn’t need advertising, but the platform would only give one product from each store a traffic boost. That meant all his product variations only had one or two with decent exposure—if the red hat got clicks, the black one sat untouched. In the end, even with all the colors combined, he was only selling 40 to 50 hats a month.

Then one day in early March, Wang logged into Amazon and saw all his product links had gone dead—“taken down, just like that.” He clicked on account status and saw the notice: Intellectual Property Infringement. Turns out, Trump had trademarked the slogan, and Wang’s hats were now illegal to sell.

What he didn’t know was that “MAKE AMERICA GREAT AGAIN” wasn’t even Trump’s original line, it was first used by Ronald Reagan in the 1980 presidential election.

But Trump, the businessman-president, has trademarked just about everything associated with his name. EMPIRE BY TRUMP and SUCCESS BY TRUMP are colognes. THE SPA AT TRUMP is a chain of wellness centers. Even the UNITED STATES POKER CHAMPIONSHIP is trademarked under his name.

These days, Trump holds around 600 trademarks across 87 countries, including so-called “foreign adversaries” like Cuba, Iran, and Venezuela. In China, he successfully registered “Donald Trump,” “唐纳德·川普,” and “川普.” He even sued a Chinese man who had squatted on the “TRUMP” trademark, but lost four times.

When his listings got pulled, Wang still had 6,000 hats sitting in an Amazon warehouse in the U.S.. He couldn’t sell them, couldn’t dump them. In the end, he paid 6,000 U.S. dollars to have them destroyed on the spot. It wasn’t the hats he mourned, it was the money.

He’s done with hats. But around town, everyone’s still talking about them. A friend told him there’s a new hot seller: hats embroidered with “Trump 2028.” On Amazon, he even spotted “Obama 2028” ones.

More than 10,000 kilometers away, in America, hats have become a political battlefield. In the ten years since Trump’s first run, MAGA hats have turned into a kind of political statement. Everyone, from far-left to far-right, has learned to slap a slogan on a cap and wear it loud and proud.

For every “Trump is right about everything” hat, there’s a “Trump is an idiot” one. When Trump said Canada should be a U.S. state, Ontario’s Premier hit back with a cap reading “Canada Is Not For Sale.” Even his rival, former President Joe Biden, was spotted briefly wearing a “TRUMP 2024” cap at a 9/11 memorial in Pennsylvania last year, saying it was a gesture of unity.

The hat craze has even made it into high schools. In California, a student named Maddie Muelle was banned from wearing a MAGA cap to school, and ended up suing the school district. To her, it was “just patriotism.”

Love Trump? Buy a hat. Hate him? Still buy a hat.

But Brother Wang neither loves nor hates. He doesn’t know what “2028” even means, or why Obama is trending again. This time, he’s sitting it out. After discussing it with his partner, he decided not to chase the trend. He’s done with high-risk, short-term bets.

Back when he was selling hats, he had a group chat to coordinate with staff and check numbers. After the takedown, he disbanded it. The spreadsheets, the design files—they all vanished with a click.

No more hats. But Wang still has his craft goods factory. A while back, a friend in the same business passed on a small U.S. order he didn’t want. That became Wang’s new gig: necklaces, earrings, and bracelets.

The customer sends over the designs: 30-plus styles, 100+ pieces each. To Wang, they’re flashy and over-the-top. Thick gold chains. He figures they’re for Black customers. The orders aren’t stable, but they bring in decent income at around 100,000 yuan a month.

Hats may be gone from Wang’s life, but Trump found a way to affect him again.

In February 2025, Trump started gradually raising tariffs on Chinese goods. Wang’s American clients emailed him to pause production. The factory went quiet, workers went on base pay, and Wang went home to rest. Other local factories followed suit, Qingdao’s cap industry took a hit.

Wang thought about breaking into the European market, but that would mean advertising, fighting for clients. And he’s never done ads. His crafts business has steady customers, and he picked Amazon for the hats because it didn’t need any promotion. Trying a new platform sounded exhausting. He didn’t know where to begin, so he gave up.

He decided to take a break. After running a factory for over a decade, with time off only during Lunar New Year, he decided to enjoy the downtime. Since the shutdown, his days have been filled with mahjong, drinks, and fishing.

On May 12, 2025, China and the U.S. issued a joint statement: the massive tariffs were being lifted. Four days later, his U.S. customer sent an email. Wang got to work that same day. He called the workers back, put down his fishing rod, and returned to his factory in Ligezhuang.

He doesn’t check Trump news anymore. He says he feels nothing for the man now. In his words: “That guy’s fickle, never keeps his word. It’s annoying. I even supported him, and he turned around and reported me.”

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Today's newsletter includes:

• The full text of the joint statement

• Commentary from China's Ministry of Commerce

• Commentary from Yuyuan Tantian, a social media account affiliated with China Media Group

• Analysis from Hu Xijin, former editor-in-chief of the Global Times

These statements represent either the official Chinese stance or the views of Chinese media figures.

Overall, I'm happy to see that China and the U.S. have reached some important common ground. Judging from the statements, both sides have shown a relatively positive attitude, and I hope this will at least set a constructive tone for the next phase of negotiations.

[Note: To learn views on China-U.S. trade deal from Ren Yi, a prominent Chinese internet commentator better known by his online alias "Rabbit Chairman" or 兔主席 "Tù Zhǔxí" in Chinese, check here. ]

Full text: Joint Statement on China-U.S. Economic and Trade Meeting in Geneva

GENEVA, May 12 (Xinhua) -- China and the United States on Monday released a joint statement on China-U.S. Economic and Trade Meeting in Geneva.

The following is the English translation of the full text of the joint statement:

Joint Statement on China-U.S. Economic and Trade Meeting in Geneva

The Government of the People's Republic of China ("China") and the Government of the United States of America (the "United States"),

Recognizing the importance of their bilateral economic and trade relationship to both countries and the global economy;

Recognizing the importance of a sustainable, long-term, and mutually beneficial economic and trade relationship;

Reflecting on their recent discussions and believing that continued discussions have the potential to address the concerns of each side in their economic and trade relationship; and

Moving forward in the spirit of mutual opening, continued communication, cooperation, and mutual respect;

The Parties commit to take the following actions by May 14, 2025:

The United States will (i) modify the application of the additional ad valorem rate of duty on articles of China (including articles of the Hong Kong Special Administrative Region and the Macau Special Administrative Region) set forth in Executive Order 14257 of April 2, 2025, by suspending 24 percentage points of that rate for an initial period of 90 days, while retaining the remaining ad valorem rate of 10 percent on those articles pursuant to the terms of said Order; and (ii) removing the modified additional ad valorem rates of duty on those articles imposed by Executive Order 14259 of April 8, 2025 and Executive Order 14266 of April 9, 2025.

China will (i) modify accordingly the application of the additional ad valorem rate of duty on articles of the United States set forth in Announcement of the Customs Tariff Commission of the State Council No. 4 of 2025, by suspending 24 percentage points of that rate for an initial period of 90 days, while retaining the remaining additional ad valorem rate of 10 percent on those articles, and removing the modified additional ad valorem rates of duty on those articles imposed by Announcement of the Customs Tariff Commission of the State Council No. 5 of 2025 and Announcement of the Customs Tariff Commission of the State Council No. 6 of 2025; and (ii) adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States since April 2, 2025.

After taking the aforementioned actions, the Parties will establish a mechanism to continue discussions about economic and trade relations. The representative from the Chinese side for these discussions will be He Lifeng, Vice Premier of the State Council, and the representatives from the U.S. side will be Scott Bessent, Secretary of the Treasury, and Jamieson Greer, United States Trade Representative. These discussions may be conducted alternately in China and the United States, or a third country upon agreement of the Parties. As required, the two sides may conduct working-level consultations on relevant economic and trade issues.

Spokesperson for China's Ministry of Commerce

Since April 2025, the U.S. government has imposed "reciprocal tariffs" on China, building upon its previous unilateral tariff hikes. In response, China has taken firm and legitimate countermeasures. Subsequently, the U.S. escalated its tariff measures, increasing the rate of these "reciprocal tariffs" on China from an initial 34 percent to 84 percent and then to 125 percent. These high tariffs have severely harmed bilateral trade relations and disrupted the international economic and trade order.

The joint statement on China-U.S. Economic and Trade Meeting in Geneva is an important step toward resolving differences between the two countries through equal dialogue and consultation. It laid the foundations and created the conditions for further bridging differences and deepening cooperation.

The two sides reached several positive agreements in the joint statement. Both China and the U.S. recognized the importance of their bilateral economic and trade relationship to both countries and the global economy, as well as the importance of a sustainable, long-term, and mutually beneficial economic and trade relationship. Moving forward in the spirit of mutual opening, continued communication, cooperation, and mutual respect, they agreed to continue advancing relevant efforts and commit to taking the following actions:

The United States has committed to removing a total of 91 percent of the tariffs imposed on Chinese goods under Executive Order 14259 of April 8, 2025, and Executive Order 14266 of April 9, 2025. Additionally, it will modify the application of the 34 percent additional ad valorem rate of duty on articles of China (including articles of the Hong Kong Special Administrative Region and the Macau Special Administrative Region) set forth in Executive Order 14257 of April 2, 2025, by suspending 24 percentage points of that rate for an initial period of 90 days, while retaining the remaining ad valorem rate of 10 percent on those articles pursuant to the terms of said Order.

Accordingly, China will remove a total of 91 percent of the modified additional ad valorem rates of duty imposed on U.S. goods. Regarding the additional ad valorem rate of 34 percent on U.S. goods in response to U.S. reciprocal tariffs, China will suspend 24 percentage points of that rate for an initial period of 90 days, while retaining the remaining 10 percent on those articles. China will also adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States.

Both parties have mutually agreed to establish a mechanism for China-U.S. economic and trade consultation, aimed at maintaining close communication regarding each side's concerns in the economic and trade domains, and to continue further discussions as necessary.

The representative from the Chinese side for these discussions will be He Lifeng, Vice Premier of the State Council, and the representatives from the U.S. side will be Scott Bessent, Secretary of the Treasury, and Jamieson Greer, United States Trade Representative. These discussions may be conducted alternately in China and the United States, or a third country upon agreement of the Parties. As required, the two sides may conduct working-level consultations on relevant economic and trade issues.

The meeting has yielded substantial progress, significantly reducing bilateral tariffs. The United States has eliminated 91 percent of the additional tariffs it had imposed, and China has reciprocated by canceling 91 percent of its own additional tariffs. Additionally, the U.S. has suspended the implementation of 24 percent of the "reciprocal tariffs," while China has also suspended 24 percent of its additional tariffs. This action meets the expectations of manufacturers and consumers in both countries, and is in line with the interests of both nations and the broader global community. It is hoped that the U.S. side will continue to work with China, move in the same direction, and fully rectify its erroneous practice of imposing unilateral tariffs. China also hopes that the two countries will be able to continuously enhance mutually beneficial cooperation and maintain the healthy, stable, sustainable development of bilateral economic and trade relations to inject greater certainty and stability into the world economy.

Yuyuan Tantian ("玉渊谭天”), a social media account affiliated with China Media Group

简而言之，当前美方取消了共计91%的对华加征关税，暂停实施24%的“对等关税”，保留剩余10%的关税。中方也相应取消和暂停了相同水平的关税。

这说明中方此前的坚决反制和斗争态度起到了非常好的效果，反制措施确实对美方也造成重大影响，美国政府才会在会谈之后将关税降低至基准关税水平。

In short, the U.S. side has currently canceled a total of 91 percent of the additional tariffs imposed on China, suspended 24 percent of the "reciprocal tariffs," and retained the remaining 10%. Correspondingly, China has also canceled and suspended tariffs at the same level.

This demonstrates that China's firm countermeasures and resolute stance have achieved very positive results. Indeed, the countermeasures have had a significant impact on the U.S. side, prompting the U.S. government to reduce tariffs to baseline levels after the negotiations.

[Update: After I posted this piece on X, Yuyuan Tantian’s account commented on my post with an article explaining that the meeting's 'substantive progress' can be understood through the “Three T's”:

1/ The Talk: How Candour and Substance Unlocked Satisfactory Progress

2/ The Telephone Lines: Opening Channels for Future Dialogue

3/ The Truce: Detailing the Ninety-Day Tariff Pause]

Hu Xijin, former editor-in-chief of the Global Times

太棒了！中美日内瓦谈判取得了超出大多数人预期的成果。

Awesome news! The China-U.S. Economic and Trade Meeting in Geneva has yielded results that exceeded most people's expectations.

首先，美中同时大幅降关税，美国4月2日之后对中国加征的关税全部取消，4月2日宣布的对中国34%关税中的24%暂停实施90天。中方也取消了对所有上述美方关税的报复性关税。等于是，双方在未来90天里都只保持4月2日和之后加征关税的10%。而且双方各自保留的关税完全是按照平等原则设置的，不存在美方加了关税，中国不得报复的任何含义。

First of all, both the U.S. and China have made significant reductions in tariffs. The U.S. has fully removed all tariffs imposed on China after April 2, and has also suspended 24 percentage points of the 34 percent tariff on China for 90 days, which was announced on April 2. In return, China has lifted retaliatory tariffs on all U.S. tariffs mentioned above. This means that for the next 90 days, both sides will only maintain the 10 percent tariffs imposed after April 2. Moreover, the tariffs that each side has retained are set on an equal basis, with no implication that the U.S. could impose tariffs without China having the right to retaliate.

这是中国坚持平等和相互尊重原则的巨大胜利。到目前为止，没有一个其他国家实现了美中之间的上述平等谈判原则。美英上周达成协议，但是美国保留了对英国10%的基础关税，英国则反过来没有采取平等报复措施。日本、加拿大和欧盟都尚未取得美国对它们的平等承诺。

This is a huge victory for China in sticking to the principles of equality and mutual respect. Up to now, no other country has achieved the kind of equal negotiation principle that China and the U.S. have reached. Last week, the U.S. and the U.K. reached an agreement, but the U.S. retained a 10 percent basic tariff on the U.K., and the U.K. did not retaliate equally. Japan, Canada, and the European Union have not yet secured a similar equal commitment from the U.S.

中国与美国达成平等协议，这不仅是中国的胜利，也是国际贸易规则和应有秩序的胜利。中美协议是一个示范，势必对其他国家维护自身权利形成鼓舞。

The agreement between China and the U.S. is not only a victory for China but also a win for international trade rules and order. This agreement sets an example that will surely inspire other countries to stand up for their own rights.

老胡要给中国谈判团队点一个大大的赞！我为中国政府和中国人民在过去一个多月所表现出的众志成城而骄傲，我为这个国家面对强权所展现出的勇气和耐力感到骄傲

I’ve got to give a huge shoutout to China’s negotiation team! I am so proud of the Chinese government and people for their unity and determination over the past month. I’m also proud of how this country has shown courage and resilience in the face of strong opposition.

Hello and welcome to the "Big Argument" column, a distinctive commentary column in our newsletter that diverges from traditional Western narratives and perspectives. It focuses on hot-button issues that have yet to fully reflect the Chinese stance and perspective. Some notable pieces of the column, which are also among the most engaging articles in the history of this newsletter include Three key takeaways from latest Taiwan Strait military drills and Stabilizing U.S.-China relations: Trump can do it, if drawing lessons from past.

You might find that some views in the article differ from the typical Western perspectives, but I believe understanding different viewpoints might be one of the reasons some of you subscribe to this newsletter.

Today's article is authored by Zhai Xiang, an international relations research fellow at Xinhua Institute, a high-end think tank based in Beijing. Zhai is also an alumnus of both Cornell and Stanford Universities and serves as a member of China's National Cultural Relics Society.

Zhai previously contributed to China-US Focus with his insightful piece "Sharp Eyes Needed to See Truth," which debunked the myth about Stanford's founder allegedly burying Chinese workers while examining how misinformation exacerbates Sino-American tensions.

In today's piece. Zhai's article draws parallels between contemporary U.S. trade coercion and ancient China's Warring States period (475-221 BC), using the "The Discourse on the Six States" (六国论) to warn against appeasement and advocate for collective actions to maintain a just global order.

"Multilateralism is the cornerstone of the post-WWII international order, and solidarity and cooperation are the greatest common denominators of the international community. Yet some countries have developed a seriously distorted perception of the world," said Chinese Foreign Minister Wang Yi lately, affirming China's position at the BRICS Foreign Ministers' Meeting in Rio de Janeiro.

Wang also pointed out that the United States, having long reaped enormous benefits from free trade, is now using tariffs as leverage to extort exorbitant demands from other nations. If the international community chooses to stay silent or to compromise and back down, it will only embolden the bullies to push even harder.

This brings to mind "The Discourse on the Six States (六国论)," a political essay written close to 1,000 years ago by Su Xun, a renowned scholar of the Northern Song Dynasty (960-1127). This essay has been passed down through generations and is still studied in Chinese high school textbooks.

In light of recent U.S. actions, such as imposing sweeping tariffs on countries worldwide, offering a 90-day tariff deferral with China excluded, and trying to restrict trade relations between other nations and China, many Chinese netizens have revisited this ancient text for its enduring relevance.

During the Warring States Period (475-221 BC) two millennia ago, the royal court had lost its authority. Seven most powerful states vied for dominance. Among them, the western state of Qin was the strongest, yet still not powerful enough to unify China on its own as long as the others remained united. Qin ultimately prevailed and unified China not by brute force alone, but by dismantling alliances, sowing discord, and coercing territorial concessions -- a classic strategy of divide and conquer.

As observers at the time succinctly warned:

"To cede land to Qin is like fueling a fire with firewood: as long as the firewood remains, the flames will continue to rage (以地事秦，犹抱薪救火，薪不尽，火不灭)."

In this discourse for his imperial court, Su argued that those who did not bribe Qin were destroyed because others did. "They lost external support and could not survive on their own."

Therefore, his conclusion was "the fundamental problem lay in appeasing Qin."

He also noted that the land lost through appeasement outweighed that lost through war, by a hundredfold. What Qin truly desired, and what the six states feared most, was never war itself. The rulers, inheriting lands hard-won by their ancestors, gave them away in exchange for fleeting peace. "Five cities today, ten cities tomorrow, and the rulers slept soundly for just one night. But by the next morning, Qin's armies would be back at their gates for more."

China, with over 5,000 years of continuous civilization, holds a vast reservoir of historical records, rich in experiences, lessons and wisdom. For most of that long history, China had no contact with the United States, a nation founded in 1776. Of course, China has not just survived, but thrived, by drawing strength from its past.

The fate of the six states serves as a timeless warning: appeasement and retreat in the face of coercion do not bring security, but rather invite further disrespect and aggression. Silence is not safety; retreat is not protection. From "The Discourse on the Six States," we learn not why submission makes sense, but why it fails.

Only through upholding principles and embracing collective actions can nations stand up to coercion on the global stage, safeguard their own interests, and defend international justice. This, too, is the wisdom that history offers China and all who seek fairness, dignity, and peace in today's world.

The U.S. administration must come to terms with the simple truth: maximum pressure tactics will not work on China. A truly responsible major power should lead by example, and this means returning to rationality, respecting the legitimate concerns and dignity of other nations, and working to build a more just, inclusive and stable international order. That is the only path to lasting peace and shared prosperity.

According to a report from the WeChat blog of "国是直通车” (China News Express), a media brand of China News Service (CNS), provinces and cities—including Guangdong, Jiangsu, Zhejiang, Shandong, Fujian, Sichuan, Hunan, Beijing, Shanghai, and Tianjin—have been holding meetings and conducting research to assess the impact on foreign trade enterprises, while rolling out supportive policies.

The coverage highlights three key aspects of these local preparations: the main points from government discussions, regional strategies to counter U.S. tariff pressures, and concrete policy responses.

In another article, the WeChat blog of "政知见” (Political Insight) under Beijing youth Daily noted that since the U.S. imposed so-called "reciprocal tariffs," Zhejiang’s provincial party secretary and governor have addressed foreign trade stabilization measures three times within a single week. Zhejiang, a major hub for China’s exports, underscores the urgency of these efforts.

Meanwhile, the WeChat blog 国民经略 "National Economic Strategy" published a detailed analysis of Chinese cities most reliant on foreign trade, offering deeper insights into regional vulnerabilities and adaptations.

Together, these reports provide a comprehensive look at the current state of China’s foreign trade landscape, its regional disparities, and the broader strategic response to Trump’s tariff policies. In today’s newsletter, I break down the key points from the pieces mentioned above from "国是直通车” (China News Express) and 国民经略 "National Economic Strategy" —great for anyone who wants a deeper look.

But if two paragraphs could sum it all up, it might be the ones from a recent New York Times guest essay piece: “Trump Has Botched His Tariff War With China” written by Robert Wu, the founder and chief executive of BigOne Lab, a Chinese data-driven research company based in Shanghai. He also writes for his Baiguan and China Translated newsletters:

But China has been diversifying its export markets to reduce its dependence on the United States: The value of direct Chinese exports to the United States last year was roughly the same as a decade ago; its exports to the European Union, meanwhile, soared in that period. China also has reduced its overall reliance on trade: Exports as a percentage of China’s gross domestic product declined from 36 percent in 2006 to 19.7 percent in 2023, according to World Bank data.

……

China’s leaders are simply not as vulnerable to domestic pressure as Mr. Trump. This has deep historical, cultural and social roots. Recurring periods of hardship in Chinese history have embedded in the nation’s psyche a capacity for endurance and fortitude. The phrase for this is “chi ku,” or to “eat bitterness.” Younger Chinese today are accustomed to more comfortable consumer lives than previous generations, but chi ku still runs strong.

The following part is from "国是直通车” (China News Express)

1. What are the key points of the intensive discussions and research?

After the U.S. government announced the imposition of "reciprocal tariffs" on Chinese goods, the principal leaders of Zhejiang, Jiangsu, Tianjin, Hunan, and other regions held discussions and research with some enterprises.

Institutions and organizations such as the Beijing Development and Reform Commission and the Shenzhen Service Trade Association, as well as grassroots governments such as Pujiang County in Jinhua City and Guzhen Town in Zhongshan City, also held symposiums to listen to the suggestions of foreign trade enterprises face-to-face.

These discussions and research were held frequently.

From April 8 to 9, April 10, April 12, and April 14, Wang Hao, the secretary of the Zhejiang Provincial Party Committee, and Liu Jie, the governor of Zhejiang Province, deployed issues related to stabilizing foreign trade four times within a week through symposiums, research, and work meetings.

During the discussions, research, and work meetings in various regions, there were two key points:

The first is "confidence".

During a discussion with Hunan provincial governor Mao Weiming, some enterprises mentioned that the U.S.'s multiple rounds of tariff increases would inevitably have a negative impact on the export of some products in the short term, bringing instability and uncertainty to economic operations.

Mao Weiming responded that in the face of pressure, we must always maintain confidence and courage to become stronger under pressure.

Wang Hao, the secretary of the Zhejiang provincial Party committee, stated that the more complex and changing the situation is, the more we need to strengthen our confidence.

The second is "acceleration".

Wang Hao called for accelerating the creation of an open business environment that offers optimal services, lowest costs, and highest efficiency.

A Zhejiang provincial executive meeting held on April 12 proposed expediting the implementation and stockpiling of policy tools, enhancing the overseas service support system, and assisting enterprises in exploring diversified markets.

A fact-finding mission in Shanghai’s Huangpu District revealed that early implementation of targeted support policies and timely disbursement of financial assistance could help mitigate the challenges faced by affected foreign-funded and foreign trade enterprises.

A Shenzhen municipal Party standing committee meeting on April 10 stressed the need to act with the utmost urgency, prioritize market expansion, and take proactive, strong, and effective measures to support enterprises in vigorously exploring both domestic and international markets.

2. What are the local-level strategies for coping with current challenges?

The core focus of local foreign trade policies can be summarized as: expanding diversified markets and promoting integrated development of domestic and foreign trade. Specifically, these efforts are centered around expanding overseas markets and tapping domestic market potential.

In terms of overseas market expansion, two important pathways have emerged:

(1) Emerging markets Shanghai’s Jinshan District is supporting enterprises in expanding their reach into emerging markets, particularly ASEAN, the Middle East, and Latin America. Starting this year, Dongguan will organize enterprises to participate in over 200 key overseas exhibitions annually, including at least 100 in emerging markets. Around 2,000 companies will also be mobilized to join nearly 20 domestic “Guangdong Trade Nationwide” exhibitions.

(2) Cross-border e-commerce platforms Cross-border e-commerce has become a new growth engine for foreign trade. During his inspection, Jiangsu governor Xu Kunlin emphasized the importance of developing cross-border e-commerce as a breakthrough area. He proposed enhancing services such as startup incubation, brand marketing, website development, and cross-border livestreaming, to foster a stronger cohort of cross-border e-commerce enterprises and indigenous brands and to cultivate specialized industrial clusters.

Shandong also aims to build 20 specialized cross-border e-commerce industrial belts, nurture 100 internationally competitive brands, and incubate 1,000 emerging cross-border e-commerce enterprises in 2024.

In terms of domestic market development, the focus lies in strengthening distribution channels. Local governments and relevant organizations have played a coordinating role as a bridge. The Sichuan provincial department of commerce has mobilized state-owned, private, and foreign-invested enterprises in the province, as well as business associations, to launch targeted support programs, build omni-channel sales networks, establish dedicated sales zones, and publish direct contact numbers to assist foreign trade enterprises in expanding domestic sales. Efforts are also underway to support household appliance and digital product companies in participating in consumption-boosting campaigns such as “old-for-new” product exchanges. The Jiangsu Commercial Association initiated a proposal to “actively expand domestic sales channels for foreign trade products and promote the new development paradigm of dual circulation.” It pledged assistance in areas such as product sourcing, shelf placement, financial settlement, and marketing for affected enterprises, while encouraging trade associations to mobilize commercial circulation firms to coordinate responses.

3. What concrete measures have been introduced?

(1) Building platforms

During the 137th China Import and Export Fair (Canton Fair), Guangzhou will host a matchmaking event connecting foreign trade products with domestic buyers, inviting over 200 participating exhibitors and integrated domestic-foreign trade companies to meet with more than 200 domestic purchasers. According to the Sichuan Provincial Department of Commerce, the province is actively building platforms for enterprises facing export difficulties by mobilizing local supermarkets and e-commerce platforms to help enterprises shift to domestic sales. It also plans to establish a demand database, enterprise directory, and product catalogue, and to organize targeted matchmaking events to help businesses explore the domestic market. The Zhejiang Council for the Promotion of International Trade has launched a signature service program, “International Trade and Investment Delegation Zhejiang Tour,” which now emphasizes a two-way strategy of “bringing in” as well as “going global,” creating a platform for international economic and trade exchanges right on the doorstep.

(2) Policy formulation Targeted policies can help enterprises cut costs and improve efficiency. For example, Guangzhou will roll out policies to support the shift of quality foreign trade products to domestic sales, offering assistance in areas such as alignment of domestic and foreign standards, product inspection and certification, intellectual property protection, credit insurance, and brand development. Jinshan District in Shanghai is planning to work with customs and other departments to offer policy support and facilitate business operations. Dongguan will pilot measures such as “customs-enterprise coordination,” “appointment-based customs clearance,” and “cross-district returns,” aiming to reduce inspection time for key goods. Fujian Province is targeting the elimination of market barriers. Its draft action plan on promoting integrated domestic and foreign trade proposes breaking down local protectionism and market segmentation, conducting market access efficiency evaluations across all provincial, municipal, and county levels by the end of 2025, and dismantling over 100 hidden barriers.

(3) Financial and operational support Jiangsu and Hunan have both pledged to adopt a “one industry, one policy” and “one enterprise, one solution” approach to address specific challenges. Many localities have introduced concrete measures. For example, in Yangjiang City, Guangdong Province, foreign trade enterprises participating in exhibitions in Belt and Road partner countries, RCEP member states, and the Middle East can receive up to 50% reimbursement on booth rental, decoration, and airfare expenses. The same level of support will also be available for enterprises shifting to domestic sales. Nansha District in Guangzhou encourages platform enterprises to pursue digital transformation and will provide up to 20 million yuan in support for those that significantly boost transaction volume. Dongguan will offer up to 5 million yuan in support for enterprises that purchase short-term export credit insurance, helping mitigate risks as they expand internationally.

(4) Providing services Foreign trade enterprises often face numerous specific and detailed challenges in expanding into domestic and overseas markets. Many localities have launched service initiatives in response. For example, after the Sichuan Chain Store and Franchise Association published contact information to support enterprises transitioning to domestic sales, it received a flood of inquiries on the same day. Many foreign trade enterprises lacked knowledge of supply chain procedures and entry requirements, and faced challenges such as adjusting product codes and specifications. The association, together with local retailers, quickly drafted implementation plans and began organizing themed training sessions, inviting economic experts and retail executives to deliver targeted guidance. Meanwhile, the Xiamen Municipal Bureau of Commerce launched the “Xiamen Foreign Trade Enterprises Hotline,” providing comprehensive services including policy consultation, appeal handling, and professional guidance for local enterprises.

The following part is from 国民经略 "National Economic Strategy"

Foreign trade dependence, typically measured by the ratio of total imports and exports to GDP, serves as an indicator of a region's degree of openness to the international economy.

A higher level of foreign trade dependence indicates a greater degree of integration with global markets and a stronger link to international economic dynamics. However, it also implies greater exposure to fluctuations in the global political, economic, and geopolitical environment.

From a national perspective, the top 20 cities with the highest foreign trade dependence are: Chongzuo, Zhoushan, Danzhou, Jinhua, Shenzhen, Dongguan, Fangchenggang, Xiamen, Suzhou, Shanghai, Ningbo, Tongling, Beijing, Zhuhai, Zhongshan, Huizhou, Daqing, Weihai, Qingdao, and Rizhao.

Among them, eight cities—Chongzuo, Zhoushan, Danzhou, Jinhua, Shenzhen, Dongguan, Fangchenggang, and Xiamen—have a foreign trade dependence ratio exceeding 100%.

Notably, Chongzuo and Jinhua are the only two cities where both export dependence and overall trade dependence surpass 100%, reflecting their exceptional level of export-oriented economic activity.

These cities are predominantly located in the eastern coastal region of China and are primarily driven by manufacturing industries. They stand out as major hubs of both foreign trade and industrial production.

This trend is hardly surprising. In the era of globalization, proximity to the sea and access to ports mean closer links to international markets. This is a key factor behind the collective rise of coastal city economies.

What is unexpected, however, is that the city with the highest foreign trade dependence is not Shanghai, Shenzhen, or Suzhou, but the lesser-known Chongzuo City in Guangxi Zhuang Autonomous Region.

Although Chongzuo's total GDP is only at the 100-billion-yuan level, its total foreign trade volume has surpassed that of the provincial capital Nanning, ranking first in Guangxi. Moreover, its foreign trade dependence ratio has topped the national list for consecutive years.

Chongzuo's leading position is primarily due to its proximity to Vietnam, with four counties and cities sharing a border with Vietnam, making it one of China’s most concentrated border port regions. The well-known Youyiguan (Friendship Pass) is located in Chongzuo, which also serves as the starting point of the China–Vietnam railway project currently under development.

Also surprising is that among the top-ranking cities are not only the traditional coastal powerhouses, but also several third- and fourth-tier cities, as well as some inland and northeastern cities.

For example, Daqing in Heilongjiang and Tongling in Anhui—one located in the northeast and the other inland—share a common feature: imports far outweigh exports, and their foreign trade is predominantly driven by resource-related commodities. In Daqing's case, it is mainly crude oil, while Tongling focuses on copper ore.

Beijing presents a similar case. Although its total foreign trade volume ranks among the top three nationwide, more than 80% of its trade is import-based, primarily consisting of bulk commodity imports by centrally administered state-owned enterprises. Crude oil alone accounts for over 40% of the capital's imports.

Therefore, while all these cities can be characterized as “outward-oriented,” the nature of their dependence varies: some are export-driven, others import-heavy; some are more linked to Northeast Asia, while others are tied to broader global markets—resulting in different degrees and types of exposure to external shocks.

While the foreign trade performance of small- and medium-sized cities often reflects their own local dynamics, trillion-yuan GDP cities carry broader systemic importance for the national economy.

From a scale perspective, China’s top 10 cities in terms of total foreign trade volume are: Shenzhen, Shanghai, Beijing, Suzhou, Ningbo, Dongguan, Guangzhou, Xiamen, Qingdao, and Jinhua.

Among them, Shenzhen and Shanghai have both seen their total foreign trade exceed 4 trillion yuan, jointly accounting for around one-fifth of the national total. The combined trade volume of the top 10 cities accounts for 49.4%, nearly half of the country’s foreign trade.

Expanding the scope to the top 20 cities, their combined foreign trade volume reached 28.2 trillion yuan, with exports totaling 15.3 trillion yuan, representing 64% and 60% of the national figures, respectively—underscoring their strategic weight in the overall trade landscape.

By analogy to the concept of “economically powerful provinces should shoulder greater responsibilities,” these cities may be seen as the ballast stones of China’s foreign trade.

In terms of foreign trade dependence, cities in the top 20 generally have relatively high levels. Jinhua, Shenzhen, Dongguan, and Xiamen each surpass 100%, while Suzhou also reaches a high level of 98%.

Looking specifically at export dependence, Jinhua stands out as the only major city with a ratio exceeding 100%. Meanwhile, Shenzhen, Dongguan, Suzhou, Xiamen, and Ningbo all have export dependence ratios above 50%.

Jinhua’s leading position is largely attributable to its jurisdiction over Yiwu, the world’s largest wholesale market for small commodities and a national center for e-commerce development. Often dubbed the “world’s supermarket,” Yiwu plays a central role in global trade in light manufactured goods.

In contrast, Nanjing and Chongqing have foreign trade dependence ratios below 30%, which are relatively low among major cities. Even Guangzhou, traditionally viewed as a foreign trade powerhouse, has a foreign trade dependence of only 36.2%.

Notably, the list of China’s top 20 cities in foreign trade now includes inland cities such as Chengdu, Chongqing, and Zhengzhou, with Chengdu surpassing the 800-billion-yuan mark for the first time—just one step away from breaking into the top 10.

This remarkable performance is primarily the result of two driving forces: the relocation of industries from eastern to central and western China, and the massive investments in infrastructure. These have enabled the central and western regions to leverage logistics channels such as the China-Europe Railway Express, air cargo routes, and the New International Land-Sea Trade Corridor to emerge as rising stars in the foreign trade sector.

Thanks to the China-Europe Railway Express, electronic products from Chengdu and Chongqing can now be delivered directly to Europe via Central Asia by rail—eliminating the need to travel thousands of kilometers to coastal ports such as Shanghai or Guangzhou.

This trend highlights a critical shift: even inland provincial capitals have now become deeply integrated into global supply chains. No one is immune from the forces of globalization.

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A week ago, Zichen Wang published an excerpt from Zhou's book on Pekingnology. I've cross-checked his selections and confirmed that apart from the section on China-U.S. relations, the excerpts shared today largely differ from his.

Zhou started his military service in 1979. He served in different posts in Guangzhou Air Force Regional Command. From 1993 he worked successively as staff officer, Deputy Director General of West Asia and Africa Bureau and then Deputy Director General of General Planning Bureau of the Foreign Affairs Office of the Ministry of National Defense of China, Chinese Defense Attaché to the Republic of Namibia and Director of the Centre for Security Cooperation in the Office for International Military Cooperation, Ministry of National Defense.

Zhou is now a senior fellow of the Center for International Security and Strategy (CISS) at Tsinghua University.

Zhou is an under-graduate of Air Force Engineering College and a postgraduate of St Edmund College of Cambridge University (Mphill in International Relations). He was a visiting fellow to the Land Warfare Studies Centre of the Australian Army in 1999. He has attended various courses at Harvard University, Westminster University, PLA National Defense University, PLA University of Science and Technology for the National Defense, and PLA Army Command College (Shijiazhuang).

You can now order the book SHOULD THE WORLD FEAR CHINA? on Amazon or purchase it from local bookstores (now available in UK).

Table of Contents

Introduction

1. Managing China-US Relations

2. Living in Amity with Neighbours

3. Safeguarding China's Interests

4. Shouldering China's International Responsibilities

5. The Future of the International Order

Acknowledgements

Index

Below is an extract from SHOULD THE WORLD FEAR CHINA?, © Zhou Bo, 2025. It is published in cooperation with Hurst Publishers, London. The subheadings are my summaries -- Jiang Jiang.

INTRODUCTION

China-U.S. Relations

It is not unusual to hear the Chinese talking about the U.S. trying to contain China. My answer is, even if the US wants to contain China, it can’t. The United States is tired of policing the world. Therefore, it is refocusing on the new center of gravity, which is obviously the Indo-Pacific, where the U.S. sees endless opportunities but also a fierce strategic competitor—China. But America’s global retrenchment will be a gradual process, in part because the U.S. allies will hold it back. Europe’s strategic autonomy won’t take shape in the next ten years, if at all. Israel’s confidence in being able to stabilize the Middle East in its own favor has crumbled thanks to the war in Gaza.

......

Are China and the U.S. destined for war? This should be one of the overriding questions for the twenty-first century. There are two scenarios that might trigger a conflict between the PLA and the U.S. military—the South China Sea and the Taiwan Strait. Contrary to what most people think, I believe the South China Sea is far more dangerous than the Taiwan Strait. In “War in the Taiwan Strait? It’s the South China Sea, stupid”, I pointed out that a war in the Taiwan Strait between China and the U.S. is very unlikely to be triggered by an accident like we saw in the South China Sea. The Taiwan issue is so flammable, every word from Beijing and Washington would be scrutinized. However, there is no easy way to deconflict in the South China Sea. American military aircraft regularly conduct close surveillance and reconnaissance in China’s exclusive economic zones. U.S. naval vessels sail through waters off the islands and rocks in the South China Sea over which China claims sovereignty. But an ever stronger PLA can only become more determined in checking what it believes to be American provocations. Since neither wishes to back down, I assume—and I hope I am wrong—that it is only a matter of time before another deadly collision like the one in 2001 between a Chinese jet fighter and an American spy plane reoccurs.

Although the South China Sea is more dangerous, it is hard to say that a collision at sea or in the air, even deadly, will surely trigger a conflict. The only issue that could drag China and the U.S. into a full-blown conflict is over Taiwan. How likely is that? U.S. Secretary of Defense Lloyd Austin said at the Shangri-La Dialogue in 2023 and again in 2024 that a conflict with China was neither imminent nor inevitable. Such an assessment is a welcoming denial of the irresponsible remarks made by some American generals and admirals when they predicted when and how mainland China might attack Taiwan.

The conflict in Ukraine also gives people food for thought. If NATO, an alliance of 32 states, hesitates to take on Russia, then what gives the U.S. absolute confidence to fight China far away from its shores with a few half-hearted allies on China’s doorstep? China’s economy is ten times larger than Russia’s while its defense budget is three times bigger. The 2 million-strong PLA is the largest military in the world and the PLA Navy outnumbers the U.S. Navy in ships. The only obvious advantage Russia has over China is its store of nuclear warheads, the biggest in the world. Should China decide to increase its nuclear arsenal, it is only a matter of political decision.

How can war be avoided in the Taiwan Strait? My answer is simple: let China believe peaceful reunification with the island is still possible. So far there is no indication that Beijing has lost confidence or patience. China has never announced a timetable for reunification. It is still talking about peaceful development of cross-strait relations. But provocations from either Taipei or Washington will be checked with more robust responses from the PLA. They will lead to a new, irreversible status quo that favors the mainland. For example, after former U.S. House Speaker Nancy Pelosi’s Taiwan visit, the PLA conducted four days of live-fire exercises around the island. Now the median line in the Taiwan Strait that was tacitly observed by both sides no longer exists. Chinese fighter jets regularly fly to the other side of the line in different sorties.

For peace to prevail in the Taiwan Strait, as I have written in Foreign Affairs, the United States should reassure China that it has no intention of straying from its professed commitment to the “One China” policy. U.S. leaders have refused to enter into direct conflict with Russia over Ukraine despite the extent of Russian transgression. Equally, they should consider war with China a red line that cannot be crossed.

China-India relations

With the center of global power shifting from West to East, the Asian Century that Chinese leader Deng Xiaoping described to Indian Prime Minister Rajiv Gandhi in 1988 appears to be dawning. Can the dragon and the elephant coexist? The Chinese and Indian militaries had a deadly brawl in the border areas in 2020 resulting in the death of four Chinese soldiers and twenty Indian soldiers—the first case with casualties in over 40 years.

Despite regular meetings between front-line senior military officers; efforts to deconflict in the most dangerous areas along the Line of Actual Control; and even record-breaking bilateral trade, the relationship is still chilly. India places the border issue almost as a precondition for improving bilateral ties. This doesn’t look like a wise policy. India doesn’t only have territorial disputes with China. If Pakistan says to India that their relationship won’t improve unless they agree to resolve the Kashmir issue, what will India do?

China–India relations are about more than the border issue now. India frets about China’s increased economic and military presence in the Indian Ocean while China is wary of India drawing closer to the US. With China–US competition intensifying, Washington naturally needs New Delhi, just as it needed Beijing during the Cold War to counterbalance Moscow. People often read in the media that China and India are jostling for leadership of the Global South. This is incorrect. China’s economy is five times larger than India’s. Even if India could sustain an average annual growth of about 5 percent, its gross domestic product will still only be where China’s is today in around 2050. So it is impossible for India to become the Global South leader if China remains a member of the Global South.

In my op-ed for the South China Morning Post, I expressed my hope that China and India will become Global South anchors, not power competitors.

The price to pay for being a global power

Once at an international seminar, I heard what I thought was the most intriguing question: what is the most ideal world for the Chinese people, in which most of the Chinese are happy, but foreigners can also survive? I don’t think there is such a world. Although the twenty-first century might indeed be an Asian century, unlike Pax Britannia in the nineteenth century and Pax Americana in the twentieth, the twenty-first century won’t be Pax Sinica. Instead, this Asian century will be characterized by the collective rise of nations, including China, India and Indonesia, etc, and regional organizations like ASEAN and BRICS.

However, this question does raise an issue of how China might live with others. Thanks to China’s seemingly inexorable rise, nowadays everything that doesn’t seem to have anything to do with China eventually ends up having something to do with China. This is particularly the case with the war in Ukraine—a faraway conflict that China is not involved in. China was nevertheless asked which side it would take; whether it would become a mediator between Russia and the West; and whether it might seize the opportunity to launch an attack on Taiwan. Is this unfair to China? As I wrote in the Financial Times, this is the price to pay for being a global power.

......

A global power has two things that are not found in a small country—huge overseas interests and greater international responsibilities. In “The future of the PLA,” in Foreign Policy, I argue that in spite of China’s territorial disputes with some countries, a major power like China should look beyond its borders into the horizon to protect China’s overseas interests and shoulder more international obligations.

The need to protect China’s overseas interests is easy to understand, but what exactly are China’s international responsibilities? China’s success in restoring diplomatic ties between Iran and Saudi Arabia is a turning point in Chinese diplomacy. It indicates not only China’s willingness but also capabilities in shouldering its international obligations. The signing of the Beijing Declaration by 14 Palestinian factions is another good example of how China can play a role as an honest broker in a most volatile region. In my interview with Time magazine, I said that when China started to reform and open up, it was trying to “cross the river by feeling the stones on the riverbed,” as Deng Xiaoping said, but now China is entering the ocean. You can’t feel the seabed. These are uncharted waters, but there is no turning back.

NATO

If a group of small nations comes into alliance to resist major powers, the rationale is understandable. But if, say, the US, the strongest nation on earth, would ally itself with other countries, apparently it is not for self-defense. NATO is not only a military organization, it is also a political one. It is a stick of the West to defend and spread its values. It needs “threats” to survive and thrive. The fact that Finland and Sweden joined NATO might prove its popularity, but as I wrote at the invitation of The Economist, the more popular NATO becomes, the more insecure Europe will be. Europe’s security is essentially how NATO and Russia might coexist. French President Macron once said NATO is braindead. I said to Die Zeit and Bloomberg that it is a zombie that is still walking.

Of the five nuclear states that have signed the Treaty on the Nonproliferation of Nuclear Weapons (NPT), China is the only country that has declared not to be the first to use nuclear weapons and not to use or threaten to use nuclear weapons against non-nuclear states or nuclear-weapon-free zones. In Foreign Policy, I argue that all nuclear powers could afford to adopt a formal no-first-use policy—taking the moral high ground without reducing their capabilities for retaliation. In Europe, NATO can start with a unilateral no-first-use pledge against Russia as a gesture of goodwill. Even if such an offer isn’t immediately reciprocated by Russia, it might begin to thaw tensions. As a second step, NATO could pledge to halt any further expansion of its alliance in exchange for Moscow adopting a no-first-use policy. In Asia, China and the United States could reach a similar agreement, thus de-escalating potential conflicts involving.

Loved? Feared?

My most influential op-ed is on how “China can use its leverage with Russia to prevent a nuclear war,” published in the Financial Times in October 2022. At the end of my article, I said in the most straightforward manner that if Putin now opens a nuclear Pandora’s box that was kept closed even during the Cold War, it would be a moment of infinite stupidity. I further argued that China can help the world by simply telling Putin: don’t use nuclear weapons, Mr President. I am happy that not using nuclear weapons in Europe is now a crystal-clear Chinese policy towards the war in Ukraine. If China’s rise is already a given, then can a global China help to make the world safer, if not better? This is the ultimate question. As I have expressed in this book, my best hope for my country in the twenty-first century, is that it will maintain some pleasant features of the Tang Dynasty. Tang China was prosperous, multiethnic, cosmopolitan and inclusive. It was home to “foreign” religions ranging from Buddhism, Nestorianism, Zoroastrianism and Islam to Manichaeism. It shows that a great power that is next to none can be confident but humble, and loved rather than feared.

First published in the United Kingdom in 2025 by C. Hurst & Co. (Publishers) Ltd., New Wing, Somerset House, Strand, London, WC2R 1LA

Copyright © Zhou Bo, 2025

All rights reserved.

Distributed in the United States, Canada, and Latin America by Oxford University Press, 198 Madison Avenue, New York, NY 10016, United States of America.

The above is an excerpt from the book SHOULD THE WORLD FEAR CHINA?, © Zhou Bo, 2025, authorized by Zhou Bo and Hurst Publishers, London (www.hurstpublishers.com). The subheadings are my summaries -- Jiang Jiang.

Accompanying the tweet was a video featuring excerpts from Chairman Mao Zedong's speech on "the War to Resist U.S. Aggression and Aid Korea (1950-1953)."

The following is the content of Mao Zedong's speech featured in the video released by Mao Ning.

"时间要打多久，我想我们不要做决定。过去是由杜鲁门，以后是艾森豪威尔，或者美国的将来的什么总统，由他们去决定。他们要打多久就打多久。一直打到完全胜利。"

"We are not the ones who can decide. It used to depend on President Truman and it will depend on President Eisenhower or whoever to become the next U.S. president. It's up to them. No matter how long this war is going to last, we'll never yield. We'll fight until we completely triumph."

Clearly, Mao Ning's tweet responds to the U.S. government's latest policy on tariffs. On Wednesday, U.S. President Donald Trump said that he was pausing his new tariffs for 90 days except on China, which he announced he will raise to 125 percent.

Trump announces 90-day pause on tariffs except on China -- China Daily

Trump posted: "Based on the lack of respect that China has shown to the World's Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately."

The U.S. has significantly escalated tariffs on Chinese goods in recent years. From an average of 19-20 percent in 2018 and 2019, the rate increased by 20 percent earlier this year, followed by an additional 34 percent in April, bringing the current cumulative total to approximately 74 percent. With the latest 50 percent hike, the total burden could reach 124 percent.

Prior to Trump's announcement, China had already implemented swift and firm countermeasures in response to the U.S. tariff hike on Chinese imports, aiming to protect its legitimate rights and interests, according to Xinhua News Agency.

The Chinese government on Wednesday announced that it will raise additional tariffs on products imported from the United States to 84 percent, add six U.S. firms to its unreliable entity list, and place 12 U.S. entities on its export control list.

In response to Trump's latest tariff policy, there is widespread attention both domestically and internationally on how China will react. As seen from Mao Ning's Thursday tweet, China will not back down.

Whether China's economy can sustain itself under these circumstances is also a focal point of concern for many. On Tuesday, a WeChat blog operated by the state-run China Media Group posted a piece quoting Chinese President Xi Jinping's words, saying "中国经济是大海，而不是一个小池塘 the Chinese economy is not a pond, but an ocean. "

The post highlighted that Xi has likened the Chinese economy to "the ocean," emphasizing its resilience and solid foundation with a powerful statement. The risks and challenges will not alter the fundamentally positive long-term prospects of China's economy. "经历了无数次狂风骤雨，大海依旧在那儿! After countless storms, the ocean is still there!"

This blog post undoubtedly also displays China's stance towards the U.S. tariff increases and conveys to both the Chinese society and the international community the confidence in handling the tariff challenge.

One the same day, Chinese Premier Li Qiang said in a phone conversation with European Commission President Ursula von der Leyen that China is ready to work with the European side to promote the sound and steady development of China-EU relations.

I have to admit, “X” still has some gems—like this hilarious meme about China and Europe dealing with U.S. tariff wars:

Meanwhile, a witty observation is recirculating on the Chinese internet, playing on a clever wordplay in Chinese:

今后世界上可能会出现两大阵营：一个以北京为核心，强调自由贸易、技术革新，人称北约。一个以华盛顿为核心，对外无限抬高贸易壁垒、封闭市场，对内由主导国家人为安排产业链分工，人称华约。

The Chinese character “北” (běi) appears in both “北京” (Beijing) and “北约” (NATO), just as “华” (huá) is shared by “华盛顿” (Washington) and “华约” (Warsaw Pact). Given the contrasting policy directions of the Chinese and U.S. governments in recent years, netizens have humorously speculated that the world might soon see two new different blocs:

• A “NATO” (北京版 / Beijing Edition): Centered around Beijing, championing free trade and technological innovation.

• A “Warsaw Pact” (华盛顿版 / Washington Edition): Led by Washington, defined by sky-high trade barriers, market isolation, and state-directed supply chain reshuffling.

The jab inverts Cold War-era alliances to mock perceived U.S. protectionism while framing China as the new standard-bearer of economic globalization.

For more details on China's position regarding China-U.S. economic and trade relations, you can download the white paper here released by China's State Council Information Office on Wednesday.

For readers still following the Taiwan issue, I recently published an excerpt from Chinese mainland’s first English-language academic journal dedicated to Taiwan-related research for an international audience on my Substack. I’ve also shared selected past content—if you’re interested, click the link below to read and download the full publication.

Ginger River Review

Reunification between two sides of Taiwan Straits: a human geography perspective

Today’s piece is an excerpt from the paper “Reunification Between the Two Sides of the Taiwan Straits: A Human Geography Perspective (II),” published in China Taiwan Studies (Volume 2, Issue 3, 2024). The selected passages explores how cross-strait reunification can drive economic progress…

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a year ago · 5 likes · 1 comment · Jiang Jiang and Yifei SHI

Ginger River Review

Exclusive: Unpacking the complexities of the 1992 Consensus

I am happy to announce that 中国社会科学院台湾研究所 the Taiwan Research Institute of the Chinese Academy of Social Sciences (CASS) has granted Ginger River Review (GRR) the exclusive rights to launch online their full-text English quarterly journal on Taiwan-related studies -- "China Taiwan Studies…

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2 years ago · 35 likes · 4 comments · Jiang Jiang and Liu Xinyi

The last time this meeting was held was in 2013. According to the official readout at the time, the 2013 meeting established the strategic goals, basic principles, and overall plan for neighboring diplomacy work over the next 5 to 10 years, clarifying the working approach and implementation plan to address major issues in neighboring diplomacy.

This time, the official readout contains less information than the one in 2013, but that doesn’t necessarily mean the content of this meeting was less substantial than the previous one. Sometimes, the central authorities may release more meeting-related content through party media like Qiushi in the months following the meeting.

Drawing from the readout of the conference, here are my three main takeaways.

1. Importance of China's neighborhood

会议指出，我国幅员辽阔、边界线长，周边是实现发展繁荣的重要基础、维护国家安全的重点、运筹外交全局的首要、推动构建人类命运共同体的关键。

The conference highlighted that China's vast territory and long borders make its neighborhood a vital foundation for national development and prosperity, a key front for safeguarding national security, a priority area in the country's overall diplomacy, and a crucial link in building a community with a shared future for humanity.

This sentence from the official readout is, in my view, one of the most important statements, as it provides a comprehensive summary of the positioning of neighboring countries and neighboring diplomacy in China's development strategy.

Those familiar with China's foreign policy may recall an earlier official formulation: "大国是关键、周边是首要、发展中国家是基础、多边是重要舞台 Major countries are the key, neighboring countries are the priority, developing countries are the foundation, and multilateral platforms are the important stage."

Comparing it with the current read-out, we can see that the authorities have now offered a more comprehensive framing of the importance of neighboring countries while retaining their status as a priority area in the country's overall diplomacy.

2. Best times

会议指出，当前我国同周边关系处于近代以来最好的时期，同时也进入周边格局和世界变局深度联动的重要阶段。

China's relations with its neighboring countries are currently at their best in modern times, and are also entering a critical phase where regional dynamics and global transformations are deeply intertwined, the conference noted.

I asked DeepSeek, and it told me that China has 14 land neighbors: the Democratic People's Republic of Korea (DPRK), Russia, Mongolia, Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan, Pakistan, India, Nepal, Bhutan, Myanmar, Laos, and Vietnam. Additionally, China has 6 maritime neighbors: South Korea, Japan, the Philippines, Malaysia, Brunei, and Indonesia.

Given the regional dynamics and recent improvements in China’s relations with countries like India and Japan—coupled with the ongoing U.S.-led global trade war, which could further catalyze these shifts—I believe the assessment from the readout is by no means an exaggeration. This likely also stems from China’s longstanding emphasis on fostering stable ties with neighboring nations, a cornerstone of its foreign policy.

3. Asian values

以和平、合作、开放、包容的亚洲价值观为基本遵循，以高质量共建“一带一路”为主要平台，以安危与共、求同存异、对话协商的亚洲安全模式为战略支撑，携手周边国家共创美好未来。

To build a better future with its neighbors, China will uphold the Asian values of peace, cooperation, openness and inclusiveness, use high-quality Belt and Road cooperation as the main platform, and pursue the Asian security model that features sharing weal and woe, seeking common ground while shelving differences, and prioritizing dialogue and consultation, according to the conference.

In October 2023, China released the Outlook on China’s Foreign Policy on Its Neighborhood In the New Era, its first comprehensive policy document dedicated to outlining its approach to neighboring countries.

The document emphasizes that "the neighborhood is where China survives and thrives and the foundation of its development and prosperity," stating: "There are two opposite propositions and trends concerning the future of Asia. One advocates open regionalism, true multilateralism, a development-first approach, mutually beneficial cooperation, openness and inclusiveness, integrated development, and pursuit of common development in harmony. The other represents a relapse into the Cold War mentality and exclusive clubs, and attempts to draw lines based on values, politicize economic issues, divide the region into different security blocs, and stoke division and confrontation."

Looking back now, this document remains highly significant—underscoring China’s clear vision for Asia’s future development.

Below is Xinhua's report about the conference in case you want to learn more details.

Xinhua Headlines: Xi calls for building community with shared future with neighboring countries

BEIJING, April 9 (Xinhua) -- Chinese President Xi Jinping has called for building a community with a shared future with neighboring countries and striving to open new ground for China's neighborhood work.

Xi, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission, made the remarks at a central conference on work related to neighboring countries, which was held in Beijing from Tuesday to Wednesday.

Members of the Standing Committee of the Political Bureau of the CPC Central Committee Li Qiang, Zhao Leji, Wang Huning, Cai Qi, Ding Xuexiang and Li Xi, and Vice President Han Zheng also attended the conference.

In his speech, Xi systematically summarized the achievements and experience of China's neighborhood work in the new era, scientifically analyzed the current situation, and outlined the goals, tasks, ideas and measures for the next phase of neighborhood work.

While presiding over the meeting, Premier Li Qiang stressed the need to thoroughly implement the spirit of Xi's important speech and to earnestly carry out the various tasks in work related to neighboring countries.

The conference highlighted that China's vast territory and long borders make its neighborhood a vital foundation for national development and prosperity, a key front for safeguarding national security, a priority area in the country's overall diplomacy, and a crucial link in building a community with a shared future for humanity.

The conference called for viewing neighboring regions through a global perspective and strengthening the sense of responsibility and mission in advancing China's neighborhood work.

It was noted at the conference that after the 18th CPC National Congress, China put forward the principles of amity, sincerity, mutual benefit and inclusiveness in its neighborhood diplomacy, advocating for the building of a community with a shared future with neighboring countries.

Guided by head-of-state diplomacy, China has worked with neighboring countries to deepen all-around cooperation, strengthen exchanges in various fields, and maintain peace and stability, thereby securing historic achievements and transformation in neighborhood work, according to the meeting.

China's relations with its neighboring countries are currently at their best in modern times, and are also entering a critical phase where regional dynamics and global transformations are deeply intertwined, the conference noted, calling for taking into account both the domestic and international situations and coordinating the two major priorities of development and security.

To build a better future with its neighbors, China will remain committed to fostering an amicable, secure and prosperous neighborhood. It will uphold the Asian values of peace, cooperation, openness and inclusiveness, use high-quality Belt and Road cooperation as the main platform, and pursue the Asian security model that features sharing weal and woe, seeking common ground while shelving differences, and prioritizing dialogue and consultation, according to the conference.

It was emphasized at the meeting that to build a community with a shared future with neighboring countries, China will work with its neighbors to consolidate strategic mutual trust, support regional countries in pursuing development paths suited to their respective conditions, and properly manage differences.

China will also deepen development integration with its neighbors, build a high-level connectivity network, strengthen cooperation in industrial and supply chains, advance security and law enforcement cooperation, and expand people-to-people exchanges, according to the conference. Enditem

Lately, it seems that the ocean has been at the center of many conversations. Just yesterday, we published a piece on undersea cables, and today’s newsletter turns to a panel discussion on the South China Sea, held during the recently concluded Boao Forum for Asia (BAF) Annual Conference.

Located on the east coast of Hainan Province facing the South China Sea, Boao offers an ideal setting for discussions on the South China Sea issue. Over the years, it has become a tradition to discuss the issue at the Boao Forum for Asia (BAF) Annual Conference, one of China's major high-level international forums, sometimes known as the "Asian Davos."

This year, the Haikou-based National Institute for South China Sea Studies held a subforum on the sidelines of the BFA Annual Conference 2025, titled "Illuminating the Blue: Building the South China Sea into a sea of Peace, Friendship and Cooperation." Nearly 200 experts, scholars, diplomats, former politicians and government officials from more than 10 countries and regions attended the subforum on March 27 and 28, one day open-door and another day closed-door.

Some thoughts about the current situation in the South China Sea after we attended the subforum: We need to keep outside interference out and focus on working together through dialogue, especially in today’s unpredictable world. China and ASEAN countries should push forward and wrap up the South China Sea Code of Conduct as soon as possible, aiming to get it done by 2026.

It is the time of profound global transformation brought by the U.S. Trump Administration, the ongoing Russia-Ukraine conflict and Asia's continued rise in economic and geopolitical terms. These dynamics have made the South China Sea issue more critical and far-reaching. The semi-official subforum provided a platform for South China Sea countries to exchange views, concerns and evaluations of the issue, and some delegates did put forward critical points, which were summarized below.

The origin and evolution of the South China Sea issue

Chinese vice foreign minister Chen Xiaodong (陈晓东) delivered a keynote speech at the event. He said based on the long-standing historical practice of the Chinese people and government, the consistent position of successive Chinese governments, as well as China's domestic laws and international laws, China's rights and claims in the South China Sea have always been clear and unequivocal. Specifically:

1. China has sovereignty over the South China Sea Islands, including the Dongsha Islands, Xisha Islands, Zhongsha Islands, and Nansha Islands.

2. The South China Sea Islands are entitled to internal waters, territorial seas, and contiguous zones.

3. The South China Sea Islands are entitled to exclusive economic zones (EEZs) and continental shelves.

4. China has historical rights in the South China Sea.

China's sovereignty over the South China Sea islands was not disputed before the 20th century. However, in the 1930s and 1940s, France and Japan illegally seized some islands and reefs by force. As part of the post-World War II international order, China recovered sovereignty over the Xisha and Nansha Islands that had been occupied, and there is generally no objection to this in countries around the world.

Since the 1970s, the discovery of abundant oil and gas resources in the waters around the Nansha Islands has drawn widespread attention from neighboring countries. Some coastal states have illegally occupied certain islands and reefs of China's Nansha Islands and put forward their own claims regarding EEZs and continental shelves in the South China Sea.

"Thus, the essence of the South China Sea issue lies in the territorial claims and illegal occupation of some of China's islands and reefs by certain neighboring countries, leading to disputes over maritime delimitation. This distinction should be crystal clear," Chen added.

"If a outsider power were in China’s position, it would certainly not exercise the same level of restraint. One can easily imagine what the situation in the South China Sea would be like under such circumstances," said Chen.

Do not underestimate ...

Professor ZHENG Yongnian (郑永年), dean of the Chinese University of Hong Kong's School of Public Policy in Shenzhen, Guangdong province, is known for his outspokenness in Chinese and global affairs. Zheng on the subforum voiced his concerns about the current international order brought by the U.S. Trump administration and the intertwinement of the South China Sea issue with the broader geopolitical environment. He said that we should not underestimate three things.

Zheng Yongnian

Firstly, we should not underestimate the destructive power of the Trump administration on world order. We have already seen that in just over two months since Donald Trump took office, he has been redrawing the world map, coveting Panama, Canada and Greenland, and planning to abandoning Ukraine and America's European allies.

The second thing is the impact of Trump's policies on U.S. allies highly dependent on the United States. Trump is not only dismantling the U.S. and its allies but also destroying the entire order that these deeply dependent countries relied on. Europeans are now worried, and South Korea, a stubborn U.S. ally in East Asia, is now in the U.S. Government's blacklist.

The third thing that should not be underestimated is China's ability to shape the international order. Some people think that since China is now a strong country, they believe it can participate in dividing the world.

That is not the case. For thousands of years, China has never turned any country into a colony like Europeans did around the world. Asian countries can rest assured — China will not engage in the global power struggle for territorial division.

When it comes to South China Sea issue, as the U.S. is withdrawing from global affairs, Asian countries should seek common ground while respecting differences and should not rely on external forces to solve our problems. Asian countries should uphold the spirit of pragmatism and work together to maintain Asia's overall stability and development. Within this framework can we resolve the South China Sea issue.

Nguyen Vu Tung

Nguyen Vu Tung, a senior adviser and former president of the Diplomatic Academy of Vietnam, echoed Zheng's views, saying that the U.S. Foreign policy in recent weeks seemingly tends to alter the existing international order, which is likely to have an impact on the future development of the South China Sea issue.

"Placing the issue within the broader global and regional context, we are witnessing a new and heightened level of uncertainty, which will have significant implications for future developments," said Tung.

A key lesson from the conflict between Russia and Ukraine is that small and medium-sized countries face increasing complexity in maintaining strategic autonomy while navigating these global power shifts.

Cooperation, consultation needed for South China Sea region

China vows to building the South China Sea as sea of peace friendship and cooperation, which was echoed by speakers on the sub-forum. Dino Patti Djalal, former Indonesian vice foreign minister and ambassador to the United States, put forward four "C"s to manage the South China Sea: consultation, confidence, cooperation and conclusion.

Dino Patti Djalal

"The first is obviously consultation. Because before 1990, none of the claimants were talking to one another," said Djalal, who added that in major conflicts in the current world, in Gaza Strip and Ukraine, to name a few, there is no consultation like South China Sea countries are doing.

Confidence and trust building between China and countries like Malaysia and Vietnam is growing, especially at higher levels. However, trust among the public regarding the South China Sea remains a challenge, thus building confidence is important in the region, Djalal said, who also called for finishing Code of Conduct for South China Sea (COC) as a major effort for cooperation.

Vann Monyneath, under-secretary of state for the Ministry of Environment of Cambodia, suggested that cooperation in South China Sea could start from environmental initiatives, while a higher level of integration could enhance the effectiveness of these efforts.

Regional complexities involve multiple differences, and a focus on integrated, science-based approaches to energy and environmental conditions. Government collaboration on environmental issues and partnerships can play a crucial role in addressing these challenges effectively.

Vann Monyneath

While China is not a member of ASEAN, some people tend to frame ASEAN and China as being in opposition. However, this perception is not entirely accurate, as ASEAN and China share very close political, economic, and social ties. In many ways, we may not even realize how interconnected we are with China socially and culturally, Prof. Ruhanas Harun from National Defence University of Malaysia, told at the closed-door section of the subforum on.

Harun shared her observation on the flight to Hainan, which was full of Malaysians. "When I asked why they were traveling there, they mentioned that their ancestors came from this region. This reflects the deep historical and familial ties between our people. These close relationships are further strengthened by the strong political ties between Malaysia and China."

Ruhanas Harun

Regarding the South China Sea issue, Harun disagreed with some opinions saying that the issue devides the region. The COC discussions should be viewed in the broader regional context, not just from Malaysia’s perspective.

"South China Sea stability should be treated and shared as a public good, and maintaining it requires regional and international cooperation. While discussions on this matter are normal, ensuring stability is key to fostering collaboration," said Sidharto Reza Suryodipuro, Director-General and Senior Official for Asean Cooperation, Indonesian Foreign Ministry.

Suryodipuro said that Indonesia, given its strategic position as a gateway to and from the South China Sea, strongly supports ASEAN's efforts to maintain regional security and cooperation. It is essential to emphasize the importance of ASEAN's active role in promoting stability.

Sidharto Reza Suryodipuro

He also lauded that the subforum has made important contributions to promoting regional stability and inclusive order. This subforum is also a valuable platform for promoting maritime peace and cooperation in the South China Sea and promoting expert cooperation.

Beware of interference by external forces

One of the challenges and uncertainties that the South China Sea region faces is the interference of from outside, for example, the United States. According to a report issued by the Beijing-based think tank South China Sea Strategic Situation Probing Initiative (SCSPI) on March 25, the U.S. military in 2024 continued to strengthen its military deterrence against China, maintaining high-intensity operations as well as battlefield preparation in the South China Sea and its surrounding areas.

Chen Xiaodong said at the event that certain external countries (without naming the United States) have intensified their military involvement in the region, frequently stirring up tensions in an attempt to contain China.

"On the other hand, some claimant states in the South China Sea, in pursuit of illegal gains and unilateral claims, have willingly served as pawns for external forces, repeatedly provoking maritime confrontations. Such actions pose challenges and risks to the peace and stability of the region," said Chen.

The key to regional security must remain firmly in our own hands. For the South China Sea to achieve stability and for disputes to be properly resolved, external interference must be excluded.

Liu Zhenmin (刘振民), China's special envoy for climate change and former UN under secretary-general and former Chinese vice foreign minister, said at the event that countries in this region should learn the painful lessons from Russia-Ukraine conflict, that is, the Cold War between NATO and Russia did not end, and NATO's eastward expansion ultimately led to the outbreak of the ongoing conflict.

Liu Zhenmin

We must resolutely prevent a similar situation from happening in Asia. First and foremost, we should prevent the emergence of a "NATO-like alliance" in Southeast Asia while strengthening the framework for collective security in the region, according to Liu.

"If a country in the region relies on a major power for protection, the risk will always be there. This is a crucial issue that every ASEAN country must carefully consider. Historically, the Vietnam War lasted for many years, with both the United States and France occupying Vietnam. This serves as a painful lesson of external powers interfering in Southeast Asia," said Liu.

The Philippines in recent years had disputes with China over China's Huangyan Dao and Ren'ai Jiao, where Manila grounded a military vessel over 25 years ago.

Lucio Pitlo, research fellow of the Philippines' Asia Pacific Pathways to Progress Foundation, admitted at the closed-door section of the subforum that the regional situation is becoming increasingly tense. There were several violent incidents in the South China Sea last year, and large-scale conflicts are unlikely. If crisis management is not done well, non-claimant countries may intervene. He added that the Philippines cannot dismiss China's concerns as insignificant.

Lucio Pitlo

Expecting finalizing Code of Conduct by 2026

Many attendees of the subforum called for concluding the COC for South China Sea by 2026.

In November 2002, government representatives from China and ASEAN countries signed the Declaration on the Conduct (DOC) of Parties in the South China Sea in Phnom Penh, Cambodia. The DOC clearly states, "The Parties concerned reaffirm that the adoption of a COC would further promote peace and stability in the region and agree to work, on the basis of consensus, towards the eventual attainment of this objective."

Chen Xiaodong said China is willing to work with all parties to fully and effectively implement the DOC, while eliminating interference, converging on unity, and strive to reach a COC in 2026 to build a more complete rule-based order in the South China Sea.

In earlier March 2025, Chinese Foreign Minister Wang Yi said that the "third reading" of the text has been completed, and China is confident about the prospects of concluding the COC.

Sidharto Reza Suryodipuro said Indonesia and ASEAN emphasize peaceful resolution of dispute and achieving mass activity in diplomacy and international law. This is an approach that involves fully implementing the DOC and intensify negotiations with China. He also disclosed that there are extensive negotiations, discussions and work for COC within ASEAN.

Dino Patti Djalal emphasized not to underestimate the importance of the COC. Once the negotiations are completed, even though minor conflicts and misjudgments may still occur, much of the pressure can be alleviated. It will also demonstrate that, despite global turbulence, China and ASEAN are capable of effectively managing disputes in the South China Sea.

The COC has been delayed, said Djalal at the event, who added that ASEAN and China must accelerate the process in a bid to meet the 2026 deadline. Given the challenge, it may be worth considering an interim arrangement or understanding between claimant states before the finalizing of the COC.

"While some progress has been made, to be frank, it has been too slow. I hope China will accelerate the COC negotiations and directly address complex and sensitive issues," said Lu Zhenmin.

"The COC, in my own view, is not the end. When we sign the COC, it is the beginning of a new level. Because implementing COC is more important than making it, and it will be a long process," said Tung.

Hello and welcome to the "Big Argument" column, a distinctive commentary column in our newsletter that diverges from traditional Western narratives and perspectives. It focuses on hot-button issues that have yet to fully reflect the Chinese stance and perspective. One notable piece of the column, which also stands as one of the most engaging articles in the history of this newsletter, was a piece published last May on PLA's military drills around the Taiwan island.

You might find that some views in the article differ from the typical Western perspectives, but I believe understanding different viewpoints might be one of the reasons some of you subscribe to this newsletter.

Recently, several overseas media outlets published stories about an electric cutting device developed by Chinese researchers. These reports, such as a piece titled "Revealed: China’s new weapon that can cut any undersea cable" by The Telegraph, describe a Chinese device developed for civilian purposes as a "threat" to undersea cables. But, is this really the case?

Industry experts have revealed that such technology is commonly used in marine resource exploration and development, seabed salvage and underwater emergency rescue operations. For instance, in the process of marine resource exploration and development, surface ships are often used to supply power and communication needed to operate underwater ROVs (remotely operated vehicles). When there is an emergency evacuation due to dangerous sea conditions, the connection cable linking an ROV and surface ships needs to be cut urgently to ensure rapid evacuation.

It is quite strange that certain overseas media outlets choose to make this a major issue just because China has made a degree of progress in this field, and even though the development of the Chinese technology is still in the prototype phase.

Notably, efforts by Chinese scientists to develop related products can help improve the safety of Chinese personnel engaged in marine-related work. Also, marine study efforts in China can benefit from such technology, allowing the country to make greater contributions to global understanding of the oceans -- thereby serving the interests of all.

In recent years, there has been a noticeable trend among some countries and media to presume bad intentions in China's pursuit of legitimate technological advancements. This biased judgment and reporting reflecting it, may be partly influenced by past incidents where some countries engaged in the destruction or sabotage of other nations' public infrastructure.

China's growth is often viewed through a similar lens of suspicion. But smearing or suspecting China due to the past misdeeds of others is clearly unfair, and so is labeling a device developed to enhance the safety of marine exploration as a "weapon" that can be used for cutting undersea tables for reasons other than emergencies or relevant exploration and salvage work.

Take undersea telecommunication cables for instance. They are vital to global connectivity and the development of the digital economy. They carry approximately 99 percent of international data traffic. As global public infrastructure, their efficient, stable and secure operation is crucial for global network connectivity and vital for the well-being of people in all countries.

Chinese companies have emerged as key players in global submarine cable equipment manufacturing, construction and maintenance, after years of development efforts. They have laid a cumulative length of over 70,000 km of submarine cables, covering the Pacific Ocean, the Indian Ocean and the Atlantic Ocean. China's role in the building and maintenance of undersea cables significantly enhances global access to fast, convenient and affordable internet.

File photo shows workers laying submarine cable on the construction boat in Zhoushan, east China's Zhejiang Province.

For proper knowledge of what China has done and is doing in terms of undersea cables, it is recommended that China watchers carefully read a relevant report, which was released by the China Academy of Information and Communications Technology.

"China is an active builder, reliable operator and security maintainer of international submarine cables. The Chinese government and Chinese enterprises attach great importance to the data security of communication submarine cables. They always adhere to the principles of openness, cooperation, security and mutual trust, and provide high-quality services for various users," noted the Report on China's Participation in the Construction and Protection of International Communication Submarine Cables.

It is very possible that certain fears about China may stem from the fact that the country's sci-tech advancements make it increasingly difficult for some countries to maintain their technological monopoly in certain fields and pursue exclusive interests.

Just as a recent Xinhua commentary piece pointed out, some countries have been smearing China in the submarine cable sector, citing risks such as "surveillance" without any concrete proof to back up their claims. Such allegations are no more than repeated chapters in a containment playbook intended to suppress not only China's undersea cable industry but also curb the country's overall development, the commentary piece added.

China's quality, cost-effective products benefit the whole world. To serve the interests of its own and others, China will continue to work with the international community to protect undersea cables. “Connection” is a keyword in China’s vision of building a community with a shared future for mankind.

Today, we will discuss some of the latest developments in China-EU relations in the current context, especially the stagnant EU economy, the new Trump administration's threats to the 27-state bloc, and the potential for closer engagement between China and the EU.

Over the past three months, one of the biggest highlights in international news has undoubtedly been Donald Trump again becoming the President of the United States. Since he assumed office on Jan. 20, the world has experienced a series of major impacts. On day one of his second term, Trump signed a series of executive orders, including withdrawing the United States from the Paris Agreement on climate change. On Feb. 1, the United States imposed a 10-percent tariff on goods from China and 25 percent on imports from Canada and Mexico, while the last two were held after Canada and Mexico agreed to reinforce their borders with the United States.

From the very day Trump won the presidential election, the EU has been deeply concerned about the pressure exerted by the U.S. Trump's threats to raise NATO defense spending from 2% to 5% of GDP, his intention to take over Gaza and to cut support for Ukraine in its conflict with Russia—a top political priority for the EU—and his overt interest in Greenland, which poses a direct challenge to the territorial integrity of Denmark, an EU member state, have all fueled growing unease within the EU.

However, trade is the most imminent issue, as Trump repeatedly complained about the "unbalanced" U.S.-EU trade, threatening to start a trade war with the EU. He even called the EU a "mini China." (A diplomat from an EU member state in China told us half-jokingly that he took it as a compliment, LOL)

In the latest development, the United States on Feb. 10 substantially raised tariffs on all steel and aluminum imports to a flat 25% with a pretext to aid the struggling industries, triggering a flurry of angry reactions as the EU, Canada and Mexico quickly vowed to retaliate firmly.

Alongside trade challenges, the EU has faced sluggish economic growth in recent years and the economic outlook is not optimistic either. The GDP growth rates of the EU, along with its key member states Germany and France, rank among the lowest in developed countries and major emerging markets. Germany's economy is contracting, while the overall EU economy has increased by just one percent.

What's worse is that the EU is lagging behind both the United States and China in some future technologies. China in recent days surprised the world with DeepSeek and more and more made-in-China electric vehicles run all over the world, the EU's innovation is falling behind due to its excessive adherence to rules and regulations, according to the widely-discussed EU's competitiveness report prepared in September by Mario Draghi, former president of the European Central Bank.

In this context, some European politicians are turning their attention to China—a country that has been distanced in recent years due to the European Parliament's "freezing" of the China-EU Comprehensive Agreement on Investment (CAI) in May 2021 and the European Commission's push for a "de-risking" strategy toward Beijing. The EU's failure to ratify the CAI has deprived both China and the EU of many business opportunities.

At the EU Ambassadors Conference 2025 on Feb. 4, European Commission president Ursula von der Leyen said there was space to find agreements with Beijing and even expand trade and investment ties, in an era of hyper-competitive and hyper-transactional geopolitics.

Von der Leyen, who put forward the "de-risking" strategy two years ago and is often viewed as a hardliner toward China, told ambassadors in Brussels that this will be an intense year in our relationship with China, as we mark half a century of diplomatic relations.

European Commission President Ursula von der Leyen at the EU Ambassadors Conference 2025 on Feb. 4, 2025.

Maros Sefcovic, the EU's trade chief, also said recently in the European Parliament that there was room to expand the EU's trade and investment ties with China.

China responded to von der Leyen's words positively. Lin Jian, spokesperson of the Foreign Ministry, said on Feb. 5 at a regular press briefing that the world faces risks of polarization, fragmentation, and disorder, making the China-Europe relationship even more strategically significant and globally impactful.

Lin added that China views the EU as a comprehensive strategic partner and an important, independent pole in a multipolar world, aiming to promote the positive and forward-looking development of China-EU relations, to provide the world with more stability and certainty.

How do Chinese experts evaluate the current development of China-EU relations in Trum's second term? We have interviewed two professors with specialties in Germany and France, in politics and economic and trade issues, respectively. They are Prof. Xiong Wei (熊炜), Professor of Diplomatic Studies and Director of the Research Center for Comparative Foreign Policy Analysis at China Foreign Affairs University, and Prof. Zhao Yongsheng (赵永升), Director of the French Centre for Economic Research at the University of International Business and Economics. Zhao is currently a visiting scholar at Sorbonne University in Paris.

In summary, Prof. Xiong believed that Trump's second term would not only challenge the multilateral world order but also seriously affect trans-Atlantic relations like his first term. Despite the increased reliance on the United States, the EU employs soft balancing through multilateralism and cooperation with China, alongside adapting to U.S. policies. It brings opportunities for China-EU cooperation, including the unfreezing of the CAI.

Professor Zhao noted that facing strained relations with the U.S. and sluggish economic growth in a vulnerable multilateral system, engagement with China would become a solution for the EU to deal with challenges. Reviving the frozen CAI could support the EU's industrial transformation. While opportunities for China-EU cooperation are substantial, the relationship remains complex, requiring the EU to carefully balance its engagement with both the United States and China.

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Xiong Wei, Professor of Diplomatic Studies and Director of the Research Center for Comparative Foreign Policy Analysis, China Foreign Affairs University

Prof. Xiong:

The impact of Trump 2.0 on multilateralism and the international order is self-evident. This impact likely exceeds many people's expectations. It is not merely about using trade tariffs as a coercive tool in foreign policy, but more importantly, it challenges the so-called rules-based order that Europeans often emphasize. Trump has not only withdrawn from international institutions but also challenged the international order, including the sovereignty and territory.

Specifically in terms of the relationship between Europe and the United States, the impacts are as follows: The United States is certain to impose tariffs on the EU, leading to severe negative repercussions on US-EU trade.

Washington will also insist that its European allies shoulder a larger share of the costs for security cooperation—specifically within NATO. This remains a central demand for Trump, and he is resolute in pursuing it. Meanwhile, across the Atlantic, divisions over energy and climate policies are set to deepen further.

Despite these impacts on its relations with the United States, the EU has become more reliant on its trans-Atlantic partner. NATO continues to serve as the cornerstone of European security. Eastern European nations, in particular, prioritize NATO and U.S. support due to insufficient budgets and a lack of operational capabilities facing the prolonged Russia-Ukraine conflict.

The EU's dependence on the United States in high-tech sectors is significant, especially in critical areas such as AI, 5G, and cybersecurity. The development of the EU's digital single market largely depends on the technological support of American companies. In addition, countries like Germany have seen an increase in their reliance on the U.S. for energy supplies, particularly in liquefied natural gas (LNG) imports.

In this context, the EU has two approaches to engaging with the United States: first, soft balancing, which means that the EU counters U.S. unilateralism by strengthening multilateralism, the UN framework, and enhancing cooperation with other countries such as the Global South, including China. This strategy has gained prominence since the 21st century, particularly after the Iraq War, and aims to constrain U.S. hegemony through multilateral rules.

Secondly, adaption strategy. In the post-Cold War unipolar era, the EU has to adapt to the changes of the United States by adjusting its policies to align with its natural trans-Atlantic ally, especially in security issues. The two strategies coexist, but balancing the two is a challenge facing the EU.

In other words, unless extreme scenarios occur, there is enough space for the EU to implement its soft balancing strategy, including diversified free trade arrangements with other players. Therefore, the thawing of the CAI is possible.

It is worth mentioning that the EU did not follow the United States in fully blocking China in high-tech sectors, as seen during the Biden administration. Instead, China-EU cooperation in science and technology continued to advance. For example, the 16th EU-China Joint Steering Committee Meeting on Science and Technology Cooperation was held in November 2024, marking the first in-person gathering of its kind since 2018.

What we should also focus on in von der Leyen's remarks is her use of the phrase "constructive engagement," a term that the EU has not employed in its discussions about China for quite some time. At least it indicates that the EU's original unrealistic strategy of completely de-risking from China should have been deemed unfeasible.

Now it is undoubtedly a good time for China-EU cooperation. However, we should not overestimate it, because China-EU relations have become more complex and can no longer return to what they were before.

Prof. Zhao Yongsheng, Director of the French Centre for Economic Research at the University of International Business and Economics, currently a visiting scholar at Sorbonne University in Paris.

Prof. Zhao:

I refer to Trump’s second term in office as the era of "New Trumpism." This version of Trumpism no longer follows the postwar order that has shaped global affairs for nearly 80 years, an order that includes respect for territorial integrity, national sovereignty, and trade rules like those of the WTO. In the past, the United States generally played by the rules. But now, things have changed -- the entire rulebook is being rewritten.

The EU and the United States share common values and possess similar political systems, which means there are no deep-rooted conflicts between them. However, tensions do exist and have intensified since Trump took office. I believe the EU was not fully prepared for this shift, as it is now facing significant pressure on multiple fronts.

The EU's economic growth has been sluggish, hampered by a lack of innovation. Traditional industries continue to dominate much of "old Europe." Over the past decade, digital technology has become one of the most notable areas of growth. However, while the U.S. and China boast multiple tech giants, Europe has none. This has resulted in the EU falling behind in innovation, further widening the gap between the U.S. and China.

The EU has made significant strides in green development and climate initiatives. But this progress has come at a cost, with many polluting industries outsourced to developing countries. Adding to these challenges, the Russia-Ukraine conflict has hit the EU the hardest. As a result, the European economy has remained lukewarm at best.

Under the current situation, the potential for China-EU cooperation is enormous and highly significant. In emerging sectors like digital technology, deeper collaboration could give the EU access to cutting-edge advancements on par with those of China and the U.S., but at a lower cost and with greater efficiency than what they currently have.

The United States now champions non-free trade, violating WTO rules and undermining the multilateral system. This makes China-EU cooperation all the more crucial. As long as China and the EU are determined to maintain their partnership, they can help uphold the multilateral system to some extent. Cooperation between China and the EU is essential because in the long run, trade will inevitably lean toward multilateralism and free trade.

The EU is also in urgent need of investment, and China is well-positioned to provide it. Therefore, restarting the China-EU Comprehensive Investment Agreement (CAI) as soon as possible is necessary.

CAI is the result of seven years of arduous negotiations but was later "frozen" due to certain reasons. If the CAI could be "unfrozen" and reinstated as soon as possible, it would fundamentally enhance the quality and quantity of China-EU economic and trade relations. This would not only lead to a significant increase and improvement in FDI and bilateral trade but also catalyze the development of digital and green technologies, and the whole economies of China and the EU. This is particularly true in large-scale AI models and big data centers, and others. In this way, China can play a significant role in helping the EU with its industrial transformation, especially since this is one of the EU's top economic priorities at the moment.

The potential for economic and trade relations is undoubtedly vast. For instance, trade between China and France currently stands at around 80 billion euros annually, which is relatively modest. However, I believe the overall trade potential between China and the EU is enormous.

Von der Leyen's statement indeed reflects a pragmatic approach. For the EU, the ultimate objective is to enhance collaboration with China while maintaining a balanced and strategic management of its relationships with both the United States and China.

The past cannot dictate the future, but can, at least, illuminate it. Provided that Donald Trump draws genuine lessons and adopts a more prudent and pragmatic China policy, this vital bilateral relationship could be stabilized in the coming years.

After winning the November’s election, Trump once proposed China and the U.S. could work together to solve all the problems of the world. Despite quite a challenging goal, it conveyed, after all, an unusual upbeat vibe.

From an optimistic standpoint, Trump’s pragmatic, business-oriented mindset may offer some silver linings. But to set solid guardrails, if not repairing the fences, between the world’s two largest economies, the following tips need to be jotted down on his post-it notes.

1. Avoid trade war 2.0

Almost seven years after his administration initiated the trade war, Trump who advocated “America First” should do math for his nation. The tariff hikes in his first presidency and the fragmented global supply chain that they caused have cost U.S. consumers dearly, especially during the COVID-19 pandemic years.

Having just grappled painfully with rising prices, Americans still fear an inflationary comeback. New tariffs could cut consumer purchasing power by up to 143 billion U.S. dollars, as shown by the latest Consumer Technology Association data.

Starting a new trade war is certain to deepen the hardships that many Americans are already facing. Keep it in mind, a majority of American voters cast their ballots for Trump partly due to the unbearable inflation.

Higher tariffs also failed to revitalize American manufacturing as expected. A U.S. International Trade Commission report found that the production increase in U.S. industries protected by the tariffs was met with a larger production decrease in downstream industries affected by higher input prices.

Graphics: The vast majority of the imposed tariffs were passed along to U.S. producers and consumers owing to inflation. Source: Haver Analytics, Goldman Sachs Global Investment Research

In recent months, American consumers are reported to have scooped up foreign goods including iPads, building supplies, shelf-stable foods and electric cars. And U.S. ports are seeing a surge in cargo volumes. These reflect their genuine sentiment of apprehension towards a trade war.

In the event of a Trade War 2.0, the worst-case scenario, China will be bracing for the repercussions with greater leeway than in 2018. The cushions largely stem from China's immense domestic consumption potential, expanding Belt and Road Initiative markets, and the growth of its emerging industries. If the U.S. abandoned its protectionism, these new growth drivers could also be new opportunities for American business.

2. Do not politicize business

A "business is business" approach, which does not succumb to those ideologically driven agendas, can help, in a large part, to prevent U.S.-China relations from further worsening.

Proud of his business acumen, Trump may have resented how Washington’s China policies, especially during President Joe Biden's tenure, are eroding American economic competitiveness.

Biden’s pledge to set the so-called guardrails between the U.S. and China went ironically with a series of sanctions, blacklisting, investment restrictions, hindrance to people-to-people exchanges and persistent effort to ban TikTok, America's most popular life video sharing platform. These policies were based on shaky grounds, misused national security concerns, and truly ran counter to the commercial interests of the United States.

A New York Fed report in 2024 shows that U.S. semiconductor export controls led to a 130 billion U.S. dollars drop in market cap, plus reduced profits and jobs for affected U.S. suppliers. Responding to Biden’s last-ditch effort to further upgrade the chip export control on China, the U.S. Semiconductor Industry Association criticized that the policy had been “developed without industry input and could significantly undercut U.S. leadership and competitiveness in semiconductor technology and advanced AI systems.”

Semiconductor sanctions led to a nearly 60% drop in the U.S.-made chip exports to China and a nearly 40% drop in exports of U.S.-made chip-making equipment. Source: Apricitas Economics with census data seasonally adjusted using X13ARIMA

Now, both the U.S. and China have much work to do to ensure sustained economic growth within their own countries, making stable bilateral relations more essential than ever. It is never China’s goal to surpass or replace the U.S. Likewise, the goal to make America great again should not come at the expense of diminishing China.

Actually, tariffs have not helped to revive U.S. manufacturing. The GDP share of the country’s manufacturing sector has persistently stayed below 11 percent in recent years. What Trump should do is to rebuild American infrastructure and industries through increased investment.

Graphics: Chinese investment into the United States has plummeted since 2018. Source: China Global Investment Tracker

Many Chinese manufacturers are either investing in the U.S. or showing a strong interest in doing so. Yet they have faced a growing array of restrictive regulations. Lifting these restrictions can create more blue-collar jobs for American voters in the Rust Belt. That’s the effective way to open a “two-way street” between the two countries.

3. Work with China

As two influential global powers, China and the United States bear special international responsibilities and obligations. If they cooperate, the two countries will indeed facilitate the solution of many outstanding problems in the world, or at least they can contribute to preventing some issues of global concern from worsening.

Since the Russia-Ukraine conflict broke out, the Biden administration has provided Ukraine with 175 billion U.S. dollars in military aid, drawing large resources away from the U.S. domestic priorities.

Graphics: How much does the federal government spend on defense compared to other priorities? Source: Peter G. Peterson Foundation

Trump’s willingness to prepare a diplomatic push to end the Russia-Ukraine crisis is a commendable, practical try. Meanwhile, China has always held an objective and just position on the prolonged crisis and called for resolving the dispute through dialogue and negotiation.

Last September, China, Brazil, South Africa, Egypt, Indonesia, Türkiye and other countries, as partners of the Global South, set up the "Friends of Peace" group on the Ukraine crisis in the United Nations, in a bid to unite more forces to promote a ceasefire. The multilateral efforts, which fosters a conducive international environment, is compatible with Trump's peace-making plan.

Trump, who positions himself as a champion of peace, once claimed that there would be no war today had he remained president. In this sense, he kind of shares a consensus with China: Development requires a peaceful world.

Therefore, the likelihood of resolving the conflict between Russia and Ukraine might increase if the United States collaborates with China. And Trump need not worry that China will steal the limelight from him, as Beijing seeks no self-interest in promoting peace.

On the economic and trade issues, China and the United States also have broad prospects for cooperation. Economic and trade ties remain the "ballast stone" of bilateral relations. Beijing's message is clear: opening-up is a hallmark of Chinese modernization.

The enduring nature of U.S.-China economic and trade relations is mutual benefit while the common interests of the two countries far outweigh their differences in the economic and trade field. Even when there are economic and trade frictions, the "ballast stone" role of trade and economic cooperation should be strengthened rather than being weakened or abandoned.

For the sake of global economic and financial stability, China and the United States should strengthen cooperation and coordination on issues like the macroeconomic and financial situations of the two countries, monetary and financial policies, financial stability and regulation, capital markets, anti-money laundering and combating the financing of terrorism.

In 2023, China and the United States agreed to establish two working groups -- an economic working group and a financial working group, which enable the two sides to carry out timely exchanges and necessary coordination when the macro policies of both countries are in a crucial period of adjustment. Such mechanism should continue after the new U.S. president takes office, in whatever forms and platforms.

The fentanyl issue is another field the two countries can collaborate on. While the U.S. bears the primary responsibility for its drug abuse problem, China is willing to help and has in fact taken solid steps in addressing the U.S. concerns, demonstrating significant sincerity in working with the U.S. side. On this issue, a blame game or even reckless moves of confrontation are pointless and should be avoided.

4. Not everything is a bargaining chip

Trump is very proud of his “art of the deal.” But not all issues can be used as bargaining chips. For example, the Taiwan question is at the very core of China's core interests, the bedrock of the political foundation of U.S.-China relations, and the first red line that must not be crossed in bilateral relations.

During Trump’s first presidency, as reported by the Taiwan-based China Times, U.S. arms sales to Taiwan reached a staggering number of over 21 billion U.S. dollars. Those arm sales that continued during Biden’s tenure must be halted.

Also, Trump should refrain from meddling in China’s internal affairs regarding Xinjiang, Xizang and Hong Kong, or interfering in the dispute between China and the Philippines in the South China Sea in any forms.

Indeed, managing the relationship between two major powers is not like haggling with a street vendor who tries to gain advantages through bravado and gimmickry. It requires clarity, predictability and long-term perspective. A China policy marked by inconsistency or a “maximum pressure” strategy can only lead to devastating misjudgments.

It has been repeatedly proven that a thriving China is far more beneficial to the U.S. than a weakened one. The U.S. president, as head of state, should have the political courage, foresight and statecraft to see beyond the myopic view of some anti-China congressmen that the two major countries can't both become great within the same historical space.

Moreover, the stability of U.S.-China relations is vital for the entire world. A recent survey of 51,000 people in 46 countries shows that most international opinions support a stable and improving relationship. Over 70 percent of respondents want U.S.-China relations to ease or remain stable.

With just two days remaining before Trump officially takes office as the 47th President of the United States, some quite positive signs have emerged between the U.S. and China.

At the invitation of the U.S. side, Xi's special representative, Vice President Han Zheng will attend Trump’s inauguration ceremony on Jan. 20 in Washington, D.C., a Chinese Foreign Ministry spokesperson announced Friday. This marks a rare occasion in which such a high-ranking Chinese official will be attending the U.S. presidential inauguration.

On the same day, Xi held a telephone conversation with Trump at the latter's request. According to media reports, the two leaders reaffirmed the importance of China-U.S. relations and bilateral cooperation, and expressed a desire to start the new chapter in their relationship on a positive note. These positive developments have given hope to many that China-U.S. relations have the potential to bounce back from low points.

However, to turn such hope into reality, Mr. Trump and his new administration still need to display political courage and determination and take concrete actions in the right direction after assuming office to revive U.S.-China relations.

The views expressed in this article are solely those of the authors and do not necessarily reflect the positions of the author’s affiliated institution or any other organization.

About the guest writers

Zhou Zhou is a journalist with Xinhua News Agency based in Beijing. He served as a Xinhua correspondent for science and technology in Washington from 2017 to 2020.

Liu Jie is a journalist with Xinhua News Agency based in Beijing. She served as a Xinhua correspondent for U.S. economy and China-U.S. relations in Washington from 2014 to 2016.

Recently, we visited Hainan Province, a popular tourist destination in south China. Hainan is renowned not only for its stunning tropical seascapes — which are unique in China — but also for its rich history and culture. This includes Southeast Asian-inspired architecture and the enduring fishing traditions of the Hainan people.

For centuries, fishermen from Hainan have set sail across the South China Sea. While modern times offer many other ways to make a living, some people continue to uphold the fishing tradition, while others preserve and promote it in different ways.

On Hainan’s east coast, facing the South China Sea, lies Tanmen Township in Qionghai City — one of the province’s most famous fishing ports. At the port's entrance, we discovered a privately owned gem: the Geng Lu Bu Museum.

Geng Lu Bu (更路簿), or Manuals of Seaways, is our topic today. It was a navigation guide used by Hainan fishermen for the routes between the coast of Hainan Island and the islands in the South China Sea. Geng in Chinese is a length unit that one Geng is equal to 10 nautical miles, Lu means routes and Bu means books or manuals.

Written in Hainan dialects and passed down from generation to generation, Geng Lu Bu are no longer navigation manuals but historical documents. Some fishing families still retain handwritten copies of Geng Lu Bu, yellowed with age, even though modern practices have long supplanted traditional fishing methods.

Some original Geng Lu Bu manuals are exhibited in the museum, some can date back to over 100 years ago. Wang Zhenzhong, founder of the museum and owner of a handicraft factory, was born in a fishing family in 1977. Both his grandfather and father are skilled fishing boat captains, and he has also sailed to Nansha Qundao (Nansha Islands). He collected his family's fishing tools at the museum, including fish spears, navigation maps, compasses, and also original Geng Lu Bu manuals passed down from his ancestors.

Wang Zhenzhong and his Geng Lu Bu Museum

He showed us a book, with wrinkled and broken pages, on which his ancestors wrote "自大谭去船岩尾用乾巽十五更收." "大谭," Da Tan, is a deep pool outside of the Tanmen port, "船岩尾," Chuan Yan Wei, is an island in the South China Sea, "乾巽," Qian Xun, is a direction marked on China's ancient compass, and "十五更," means 15 Gengs (about 150 nautical miles). The sentence means that from Da Tan to Chuan Yan Wei goes in the direction of Qian Xun for 150 nautical miles.

The manual covers not only sea routes but also weather conditions, wind directions, and ocean currents for different times of the year. For example, it warns against setting sail on the 3rd day of the 3rd lunar month, the 8th day of the 4th lunar month, and the 19th day of the 6th lunar month. Wang recalled that in the late 1980s, his father set out to sea on one of these dates — and the ocean was truly vast and treacherous.

"He barely made it back to shore," Wang said.

In 2008, Geng Lu Bu was recognized as part of China’s national intangible cultural heritage. Later, in 2018, Wang Zhenzhong's father, Wang Shubao, was honored as an official inheritor of this heritage by China’s Ministry of Culture and Tourism.

For thousands of years, Wang's ancestors and other Hainan fishermen endured the heat of the scorching sun and braved the stormy seas, mapping submerged and treacherous ocean currents to find the routes across the vast, unmarked surface of the roiling South China Sea. They found, stationed and developed many islands and reefs and named them, in the Hainan dialect.

The manuals were excluded for fishing boat captains and were edited and rewritten every generation. With Geng Lu Bu, a compass and an incense burner, fishermen could set sail through the South China Sea.

An ancient Chinese compass and a photocopy of Geng Lu Be manuals

At the bow of the fishing boat, fishermen would light a stick of incense inside a wind-protected burner. The incense took about two hours to burn out, allowing them to track time.

Hainan fishermen have lived and worked in the South China Sea islands since ancient times, so the names of many islands and reefs were first named in the Hainan dialect.

Wang Zhenzhong vividly recalled his first voyage to the South China Sea with his father when he was around 18 years old. "The view was incredible! Sitting on the boat, I could see the crystal-clear coral sea beneath me," Wang said. Despite the breathtaking scenery, he suffered from seasickness and vomited for most of the journey.

Wang learned the art of fishing in coral reefs from his father and other seasoned fishermen. Wearing a mask and breathing tube, they would dive 20 to 30 meters below the surface. Experienced fishermen could hold their breath for up to five minutes. Using fish spears or even their bare hands, they would catch sea cucumbers, lobsters, abalone, and fish hiding within the reefs.

However, valuable fish like groupers cannot be speared, as any injury would reduce their market value. Instead, fishermen use a natural anesthetic derived from the stems and leaves of a plant to temporarily stun the fish. The stunned fish then float to the surface, where they are carefully collected.

"Fishermen have always fished this way, passing down the tradition from generation to generation. Even today, the South China Sea is like our vegetable garden. We farm the sea and go fishing," Wang explained.

Wang Zhenzhong is introducing his family's original Geng Lu Bu manual.

"Every man in Tanmen is expected to be a fisherman!" said Fu Minglin, born in 1980, a fisherman-turned-B&B owner. "Going out to sea is incredibly cool! In Tanmen, unless you're very timid or in poor health, everyone heads out to sea."

Fu has more experience in sailing and fishing than Wang. The Meiji Jiao and Zhubi Jiao, two major reefs of China's Nansha Qundao (Nansha Islands) in the South China Sea, were familiar destinations for him. He also sailed to Huangyan Dao (Huangyan Island) and Zengmu Ansha (James Shoal), China’s southernmost territory.

Fu’s uncle, a skilled captain, could navigate the sea using only Geng Lu Bu manuals and a compass. Fu learned a great deal of sailing experience from his uncle, including how to use the color of clouds to locate islands and reefs. The shallow and deep waters reflect light onto the clouds differently, creating subtle color variations that reveal what lies below.

Fu explained that ancient fishermen had a unique method of measuring their sailing speed: they would throw a jar into the water, and the captain, holding onto the rope, could gauge the speed by feeling the force exerted on it.

Thanks to knowledge passed down through generations, fishermen from Hainan, Guangdong, and Fujian were able to sail across the South China Sea to Malaysia, Singapore, and other Southeast Asian destinations.

During the Age of Sail, a typical fishing journey lasted several months, depending on the monsoons. Fu told us that according to Geng Lu Bu, every year in the twelfth month of the lunar calendar, fishermen rode the northeast wind to the south, and returned in the fourth month of the lunar calendar in the following year when the southwest wind blew.

Fu Minglin and his seaside restaurant.

During the voyage, fishermen stayed on the boat, or lived on islands with fresh water for a long time, leaving behind traces of development and habitation on the islands, which have been preserved to this day.

They often traded some of their catch directly at sea or brought it to Southeast Asia, where many chose to settle permanently. As a result, many fishing ports, including Tanmen, became renowned hometowns for overseas Chinese.

"The South China Sea is our ancestral sea, where our grand-grandparents went, so we go there too," said Fu.

Yan Genqi, a professor from Hainan University who is an expert of Geng Lu Bu, said that the paper-based manuals were formed no later than the Ming Dynasty (1368-1644), while the orally transmitted sailing directions had already begun to take shape among Hainan fishermen as early as Song Dynasty (960-1276). Since 1974, researchers have discovered 52 copies of Geng Lu Bu in Hainan.

"The systematic and regular use of monsoons for continuous navigation and fishing activities in Xisha Qundao (Islands), Zhongsha Qundao and Nansha Qundao over hundreds of years is unparalleled by any other country or nation," said Professor Yan.

"It (Geng Lu Bu) serves as compelling evidence that the Chinese were the first to discover, name, develop, and administer the islands of the South China Sea," Yan added.

(Chen Kaizi and Zhong Qun also contributed much to this article.)

The 4th SCSPI-RSIS South China Sea Roundtable Held in Beijing

On November 18, 2024, Kumar Ramakrishna, Director of the S. Rajaratnam School of International Studies (RSIS) at Nanyang Technological University in Singapore, along with his team, visited the “南海战略态势感知计划” South China Sea Strategic Probing Initiative (SCSPI) to conduct the 4th SCSPI-RSIS South China Sea Roundtable. Nine Chinese experts from SCSPI and 6 RSIS experts exchanged views and discussed on current situations in the South China Sea and related issues.

The experts from both sides reviewed recent events in the South China Sea, assessed the current and future situations in the region, discussed issues including international strategic situations, regional security, as well as changes in the South China Sea situation after the US elections, and exchanged opinions on topics such as managing differences, enhancing practical cooperation and promoting negotiations on the “Code of Conduct in the South China Sea (COC)”.

The representatives from both sides highly praised the dialogue mechanism of the SCSPI-RSIS South China Sea Roundtable and reached a consensus on further deepening exchanges and cooperation.

About SCSPI

With a view to maintaining and promoting the peace, stability and prosperity of the South China Sea, South China Sea Strategic Situation Probing Initiative (SCSPI) was launched in April of 2019. The Initiative aims to integrate intellectual resources and open source information worldwide and keep track of important actions and major policy changes of key stakeholders and other parties involved. It will provide professional data services and analysis reports to parties concerned, helping them keep competition under control, and with a view to seek partnerships.