Sinocism

Listen now | Show Notes: On today's show Andrew and Bill begin with the news that Beijing moved to further ease hukou restrictions, including why this is a welcome change for millions of Chinese citizens, as well as a look at questions and challenges as the reforms are implemented. Then: A report that Chinese AI talent has been restricted from leaving China, while Beijing continues its efforts to control capital outflow and offshore investments. From there: Indications that the US has indeed paused its second tranche of arms sales to Taiwan, and more details on a US-China board of investment. Then: PRC-Japan updates, including reports of Takaichi recriminations from Xi in his meeting with Trump, heavy rare earth shipments restricted for the past four months, the cards Japan has yet to play, and Mao's strategic stalemate as a stage of protracted war, not an endgame. At the end: An American journalist for Xinhua and other state outlets is arrested and accused of acting as an unregistered agent of the CCP.

Thomas Pauken II, who also used the name Tom McGregor in his work for Xinhua, CCTV and other CPC propaganda outlets, was arrested in February on a visit to DC for acting as an unregistered foreign agent. The affidavit is quite a read, and if the allegations are true he will be lucky if he is only charged for not registering as a foreign agent, since he is alleged to have been knowingly working with an agent of the Ministry of State Security.

The State Council took steps to further reform the hukou system with the issuance of “Implementing Opinions on Rolling Out the Provision of Basic Public Services by Place of Permanent Residence” (推行常住地提供基本公共服务的实施意见), which “progressively eliminates the linkage between basic public services and household [hukou] registration” and tells provincial governments that “incremental resources are to give priority to ensuring that permanent residents who have not obtained local household registration enjoy basic public services on an equitable basis.” This is not surprising, as it is the policy implementation of the language in the 15th Five-Year Plan outline on extending basic public services to permanent residents regardless of where their hukou is registered

In response to a question at a Thursday press conference about the European Commission drafting a new trade instrument to address overcapacity, Ministry of Commerce spokesperson He Yadong says the EU may have its own overcapacity problem

Listen now | Show Notes: On today's show Andrew and Bill parse the messaging from both sides of last week's US-China summit in Beijing. Topics include: What the PRC means by "a constructive relationship of strategic stability," why the US side adopted the framing as well, a relative absence of tangible deliverables, and why "a calculated stalling tactic from both sides designed to manage risk" may be a more accurate rendering of the status quo. From there: Trump's various comments on Taiwan spark concern and questions, plus notes on Rubio, Ratner, an indictment of Chinese shipping magnates, and an Iran ceasefire Xi calls "imperative." At the end: Vladimir Putin's visit to Beijing, questions for the EU, and more bad news for Nvidia in China.

Russian President Putin is already on his way back home after meeting with Xi on Wednesday. It appears he did not get the deal he has most coveted, the Power of Siberia 2 pipeline. The two sides did sign twenty cooperation documents and issue the “Joint Statement of the People’s Republic of China and the Russian Federation on Advocating Global Multipolarity and a New Type of International Relations” (translation) and the “Joint Statement of the PRC and the Russian Federation on Further Strengthening Comprehensive Strategic Coordination and Deepening Good-Neighborly and Friendly Cooperation” (translation).

The US Department of Justice today announced indictments of seven Chinese executives and four of the world’s largest shipping container manufacturing companies. From the DoJ announcement: Seven Chinese executives and four of the world’s largest shipping container manufacturing companies were indicted for conspiring to restrict the output of — and fix the prices of — nearly all of the world’s standard unrefrigerated shipping containers for over four years, spanning as early as November 2019 to at least January 2024, in violation of Section 1 of the Sherman Antitrust Act. The multi-year conspiracy roughly doubled the prices of standard shipping containers between 2019 and 2021, increasing the container manufacturers’ profits approximately one hundredfold during the COVID-19 pandemic and global supply chain crisis. One executive, Vick Nam Hing Ma, was arrested and his extradition to the United States is pending. Six executive co-defendants remain at large.

The entry of the China-US strategic contest into a new phase of strategic stalemate is the second logical premise for our consideration of the correct way for China and the United States to get along.

The first day of President Trump’s visit to Beijing had impressive optics and lots of warm, positive energy, at least in the public reporting. Specific, agreed upon deliverables are few, but we may learn more after Trump’s visit concludes after lunch Friday. President Trump did say that Boeing would get orders for 200 planes, significantly below expectations, with no further details or confirmation from the Chinese side. At the dinner banquet, he invited Xi and Peng Liyuan for a state visit in September. So far the most important news from the Thursday meeting, from what we can see publicly, is that the US and China have agreed to “build a constructive China-US relationship of strategic stability as the new positioning for China-U.S. relations…[that] will provide strategic guidance for China-U.S. relations over the next three years and beyond”, at least according to Xi’s opening statement at the meeting with Trump

US President has arrived in Beijing.

This episode of Sharp China is outside the paywall.

The PRC confirmed that President Trump will meet with Xi this week. He will arrive May 13 and depart after lunch Friday. According to the PRC, “Chinese President Xi Jinping and U.S. President Donald Trump will have an in-depth exchange of views on major issues concerning China-U.S. relations and world peace and development.” Vice Premier He Lifeng will lead a delegation to South Korea on May 12-13 to hold economic and trade consultations with Treasury Secretary Bessent. Such a meeting on the eve of the Trump-Xi summit is a sign that they are still working on deliverables for the visit. Expectations should be low for this visit, but you never know what Trump may decide to announce. I am of the view that the “China has the upper hand” takes about the upcoming Trump visit to Beijing are overblown, or at least that it not at all how the US side views the situation, but we shall know soon enough when we learn what significant, credible outcomes there are, if any.

Low expectations but big business entourage for Trump’s China trip - Semafor confirmed the rumors that many CEOs will join Trump on his trip to Beijing next week. A bipartisan group of US Senators had meetings with Li Qiang, Zhao Leji and Wang Yi this week, as the Chinese side is working hard for a positive meeting. The most contentious area will be Taiwan, and likely US arms sales, especially when they come in large packages instead of piecemeal.

All signs point to Trump traveling Beijing next week to meet Xi. Late last week Wang Yi and Marco Rubio had a call, as did He Lifeng and Scott Bessent and Jamieson Greer. The PRC readout of the Wang-Rubio call had this interesting language about Taiwan: Wang Yi underscored that the Taiwan question bears on China’s core interests and is the biggest risk in China-U.S. relations. The U.S. side should honor its commitments and make the right choice, to open up new space for China-U.S. cooperation and make due efforts for world peace. 王毅强调，台湾问题事关中国的核心利益，是中美关系的最大风险点。美方应信守承诺，作出正确抉择，为中美合作打开新的空间，为世界和平作出应尽努力。 Does “to open up new space 打开新的空间” suggest some sort of a hoped for quid pro quo? Iran will be on the agenda, especially as the MOFCOM Issued a Blocking Order Against U.S. Iran-Related Oil Sanctions Imposed on Five Chinese Enterprises, and Rubio threatened secondary sanctions for non-compliance.

Global Order | US-China | Europe | Russia | East Asia | Trade and Resource Security | Economics | Artificial Intelligence

Listen now | Show Notes: On today’s show Andrew and Bill begin with the news that the Meta-Manus deal will likely be unwound in its entirety in the wake of a ruling from the NDRC on Monday. Topics include: The legal grounding cited by Beijing, reports that Manus failed to seek regulatory approval prior to its relocation and acquisition, Mark Zuckerberg as the photo negative of Tim Cook, Beijing’s signal to the AI ecosystem, and why fears of chilled innovation may be slightly overstated. Then: Takeaways from April’s Politburo assessing the economy after Q1, including a nod to the Iran war, no signs of stimulus, and why cracking down on involution is easier said than done. At the end: The MSS argues that foreign forces are driving the “lying flat” campaign, while the U.S. quietly applies pressure on a variety of fronts in advance of May’s meeting between President Trump and Xi Jinping.

Caixin has a long story titled “Prominent Female Lawyer Goes Missing: The Intersection Point of Chongqing’s Anti-Corruption Storm”. It is only available in the original Chinese - 知名女律师失联 重庆反腐风暴的交织点. Caixin reports that Peng Jing 彭静, the 58-year-old founding partner and director of Chongqing Jingsheng Law Firm, was taken away by the Central Commission for Discipline Inspection on April 19, 2026. Her detention has sent shockwaves through Chongqing’s political, business, and legal circles, where she was widely regarded as the city’s “most politically prominent” lawyer—a non-party member who served three consecutive terms on the National Committee of the Chinese People’s Political Consultative Conference.

The Wall Street Journal reports that Meta is planning to comply with the order to undo the Manus acquisition. Maybe they are happy to get a mulligan for hasty, overpriced acquisition of a company with little proprietary technology, or maybe they realize there is no point in fighting the order, as they would if the US government made it, given the lack of recourse available and the leverage the PRC government has over Meta. Reuters reports that: Meta conducted only a few weeks of due diligence to complete the acquisition in December, while neither Meta nor Manus sought Chinese regulatory approval for the deal or its relocation to Singapore, said five sources with knowledge of the matter. That is remarkable, and makes the PRC move more justifiable, and, if the government wants to make an example of the case, perhaps the pretext to go after not only Manus and its executives but also the VCs, lawyers and accountants involved in the deal, all of whom should have known the rules around regulatory approval. Meta clearly overpaid, so maybe this will turn out to be a positive for the company, even as it sends a chilling message to PRC entrepreneurs and investors.

Meta generates well over $10B USD a year in revenue selling ads to PRC firms for marketing globally ex-China, and while those firms buy those ads because they work and drive sales, and the PRC government wants to help its exporters, any material reduction in that revenue would be noticed by Meta management and its investors. Meta is also heavily reliant on PRC suppliers for its smart glasses, and could easily have production cut off, though not without cost to some PRC firms. Manus executives likely have family in the PRC who can be pressured, and at least two are reportedly exit-banned. PRC investors in the fund could easily be “encouraged” by the state to disgorge their gains. So it could get messy, especially if this unnamed source speaking to the Financial Times is correct: A person familiar with the matter said Beijing had told the two companies that the deal must be unwound completely, including returning funds, re-registering the company’s ownership and halting Meta’s use of the Manus algorithm. The person said that if the parties failed to fully undo the acquisition, Beijing could impose penalties on Meta, limit its China-related business and possibly pursue criminal charges for individuals involved.

On Thursday the government publicly released the “Comprehensive Evaluation and Assessment Measures for Carbon Peaking and Carbon Neutrality 碳达峰碳中和综合评价考核办法”, approved by the Politburo Standing Committee on February 26, 2026 and issued by the General Offices of the CCP Central Committee and the State Council on April 12. The Measures institutionalize an annual cadre-evaluation regime that grades every provincial Party committee and government on their climate performance, beginning with the 2026 reporting year. I have posted a full translation here. The Measures instruct the NDRC to draft the 15th Five-Year Plan Carbon Peaking Action Plan to meet 2030 targets: cutting emissions intensity by more than 65% from 2005, raising non-fossil energy to 25% of consumption, peaking both coal and oil use, and progressively covering new electricity demand with clean generation. Provinces must draft matching provincial action plans, and from the 16th Five-Year Plan onward equivalent plans will govern the transition toward carbon neutrality. This document is important as it provides political incentives, accountability and enforcement powers for the pledges of peaking emissions before 2030 and reaching carbon neutrality before 2060.