By this logic, the world should be willing to accept unprecedented levels of risks to humanity because tackling those problems might help China. So no climate change action, no regulation of AI, no cooperation on public health. Explain how this all ends well.

A fascinating essay by one of Beijing's top America's hands. It is hard to imagine that he published this without CPC approval. The Emerging U.S.-China Détente foreignaffairs.com/united-st… via @ForeignAffairs

The China Shock 2.0 Setser: "I think that was the right decision [semiconductor controls], but it unambiguously was viewed by China as a directly hostile act. And I think if someone had done that to us, we would have viewed it as a directly hostile act." Well, yeah.... nytimes.com/2026/08/21/opini…

I would have thought that by now Sec Rubio would have scheduled a one-on-one meeting with Chinese foreign policy czar Wang Yi somewhere in the world. Why not? Trump envoy Daines to return to Beijing as US and China lock in Xi summit agenda sc.mp/1ckvw?utm_source=twitt… via @scmpnews

Just finished reading this. Short and sharp. A truly smart piece of research.

This is the kind of excellent China reporting that we rely on @ChuBailiang to produce. I never knew Cai Qi had visited Taiwan. As Xi Looks to Extend His Rule, He Leans on a Longtime Ally nytimes.com/2026/07/05/world…

Noah Smith gets much right in his argument as to how China managed the huge property-bubble deflation in a "painless" way, and why it's a little silly to say that Beijing managed to deflate a massive housing bubble at no cost. The key point, as he notes, is that whenever China's faces an economic shock, Beijing "uses its direct control over the banking system to push banks to lend more." What's more, contrary to some of the more dizzy comments to which his essay is a response, China is not the first country to have figured out how to manage adverse economic shocks by setting of compensating investment bubbles. Many investment-driven economies have done the same, most notoriously the US in the mid 1920s, Latin America in the early and mid 1970s (in response to the oil shocks), and Japan in the mid 1980s. What this means in practice is that the system is not allowed to adjust. Each economic shock is countered by setting off a new investment bubble. For example the post-2009 collapse in China's current account surplus (from 10%of GDP to 3% of GDP) was balanced by inflating an infrastructure bubble. At the time this was hailed as a brilliant move by Chinese and (especially) foreign economists, although today many Chinese economists will tell you (mostly in private, but occasionally even in public) that this was a mistake, and was the beginning of China's debt problem. The reason is that if China had been severely underinvested in infrastructure, balancing the contraction in trade with an expansion in infrastructure investment would have been both clever and sustainable, but by 2009 China already had almost as much infrastructure as it could productively absorb, and so the surge in infrastructure investment was decided on not because China needed more infrastructure but because a slowdown would have been more disruptive than China could absorb. Consider what happened next. As China tried to bring infrastructure investment levels down in the mid-2010s, it could only do so "without pain" by setting off what turned out to be the last stage of the property bubble. It did this in 2015-16 by eliminating many property purchase restrictions, lowering minimum payments, reducing mortgage rates, and forcing banks to expand mortgage lending (often in spite of growing concerns among banks). These policies, not surprisingly, set off a new wave of surging home prices and expanding property development, but this couldn't last long, and when the property sector, gorged on almost unimaginable levels of debt, began its sharp contraction in 2021-22, Beijing once again responded by setting off an investment bubble in another sector. This time, as Smith notes, it set if off in the manufacturing sector, with the decline in property investment matched almost dollar for dollar with an increase in manufacturing investment. Once again, if China had been severely underinvested in manufacturing, this would have been a great move, but because at the time it was already over-reliant on a very large manufacturing sector (even larger than the property sector at its height) and suffering from excess manufacturing capacity, the result within 2-3 years was massive increases in excess capacity, severe involution, and an uncontrollable surge in the trade surplus. "So what?" some of the less historically-literate might wonder. If every time an investment bubble contracts, and the authorities can negate the economic impact by setting off an investment bubble in another sector, shouldn't they keep doing it forever? Yes, if they can but, for what should be obvious reasons, they cannot, and the longer they postpone the adjustment, the more costly it is likely to be. The problem, of course, is that each bubble has to be bigger than the last to keep economic activity from slowing. We can see this most obviously in the acceleration in the growth of the country's debt burden, already the second highest in the world (after Japan's) and the fastest-growing in history. To the extent that debt funds productive investment, of course, rising debt should not translate into a rising debt-to-GDP ratio, but in an economy in which nearly all debt funds investment, and very little funds consumption or transfers, many years of a rapidly-rising debt-to-GDP ratio is pretty strong evidence that the investment is increasingly unproductive. Among other things this means that a bubble-replacement strategy can look very clever in the short term, but it can only run on as long as growth in the debt burden can accelerate.

Here is the transcript. Felt a bit one of the classic odd lots podcasts -- Minnich was definitely the "perfect guest" on Chinese tech transfer policies ft.com/content/6f535527-2d49…

Really important framing of China's so-called "forced technology transfer." These were voluntary agreements that foreign companies entered with open eyes. China didn't have the benefit of being a US ally like Japan, South Korea, and Taiwan. So they had to use the leverage they had--in this case market access--to get the tech they needed. Awesome discussion with @john_d_minnich on The Economics Show with @SoumayaKeynes: ft.com/content/6f535527-2d49…

In a totalitarian system, “loyalty is a one-way street,” Pei told me. A totalitarian leader demands unconditional fealty from everyone around him, but considers himself to owe nothing in return. “In the eyes of a totalitarian ruler,” Pei said, “everyone is dispensable.” Xi Jinping’s expanding purge of Chinese officials reveals a deepening insecurity and tightening authoritarian control. Read more in this week’s WSJ China newsletter: wsj.com/world/china/chinas-x… via @WSJ

.@abrownepek: “Japan-bashing has become the core of a strident Chinese nationalism, with disastrous consequences…Beijing’s nonstop demonization…and regular harassment of Japan, its people, and its institutions have created the monster it most fears.” semafor.com/article/06/02/20…

"The Limits of AI for Authoritarian Control" by Eddie Yang in @AJPS_Editor (2025) #SummerReading onlinelibrary.wiley.com/doi/…

Awesome thread on how China actually became an EV powerhouse

In 1972, NCUSCR's Jan Berris was there when the Chinese table tennis team arrived in America. Last month, she was on stage in Beijing for the 55th anniversary of Ping Pong Diplomacy. 55 years of building bridges through people-to-people exchange. @usatabletennis Watch more coverage of the event here: bit.ly/3REwLX2 #NCUSCR60 #PingPongDiplomacy

A notable appointment

In a sign of Xi Jinping's insecurities, China has expelled an outstanding New York Times correspondent, Vivian Wang, who for years has done tremendous work covering that country. The Times, which has covered China since the 1850s and once had about a dozen correspondents in China, now has just one -- because of visa restrictions. China is a major international power, but it displays a remarkable lack of self-confidence when it bars correspondents like this. It will still be covered but from places like Taiwan in ways that can't do it justice. China has some extraordinary accomplishments in science, in education, in health, in infrastructure; a baby born in Beijing today has a longer life expectancy than a baby born in Washington DC. Yet China fears international coverage in a way that I think reflects a political immaturity and hurts itself. 搬起石头砸自己的脚. nytimes.com/2026/05/29/us/po…

A lot of AI/tech execs have been vocal about the importance of competing with China recently. Seeing who speaks out about this new green card policy will tell us a lot about who *actually* cares about US competitiveness, and who just uses China as a pretext to oppose regulation

While many of President Trump’s advisors probably regard “constructive strategic stability” as a rhetorical-cum-policy trap, the White House’s response has likely been muted because the framework aligns with Trump’s belief in the possibility of cooperative U.S.-China relations.

Whether unification will become easier with the passage of time remains to be seen, but I agree that a war is neither imminent nor inevitable. The key is to help Beijing believe that peaceful reunification remains a viable option.

What if the Summit reflected Trump, chastened by the magnet/critical minerals cutoff, trying to come to terms with the reality of Chinese power?