This has been perhaps one of the more noticeable trend shifts I’ve seen here in Shanghai over that past few years. Used to be a clamoring of students descending on China year in and year out. That appears to be over. And yet, there are a multitude more people today weighing in on all things China. Quite the dichotomy.

I’d like for you to watch this short clip and then consider just how widely this one example can be applied across all industries. In addition, what China has done to low value add intermediate goods over the past 30 years is now being replicated with precious parts and value add machinery. The Germans in particular are seeing their production base being eviscerated in real time. Check out this video, "exposing rolex made in china short" https://share.google/RjSNSlNcrINE2odg0

China Morning Missive Making sure that @Lyn Alden sees this. A significant shift and on that’s been a decade in the making. In 2012, the Obama administration - for the very first time - weaponizes SWIFT and unironically does so against Iran. In 2012, Beijing sees this move as an existential threat and tasks the PBoC to build an alternative. Three years late CIPS goes live. For over a decade, there is scant adoption among global banks. That was never the primary objective. The critical aim was building a system that would provide Chinese banks a messaging and settlement network for trade denominated in Renminbi. And not just an alternative system to SWIFT, but a system that operated completely outside the New York correspondent banking network. Zero visibility to transactions and zero asymmetric advantage for Treasury And yet people are out there today scrambling to come up with ideas as to how the Hormuz toll is being paid. If you want evidence, see below.

South China Morning Post

Conflict catalyst: China’s yuan settlements hit record amid Middle East tensions

Single-day transactions via China’s Cross-border Interbank Payment System surge past 1 trillion yuan as Beijing’s moves to expand the yuan-paym...

China Evening Missive No longer optional. It is imperative that CEOs of every single serious multinational travel to China at least annually. Recall last year when the Ford CEO was here. He left with a Xiaomi car and raved online about the quality. All companies irrespective of industry need to have an office in China if for no other reason than opposition research. The future of global competition begins here. In China. Starbucks is the perfect case study of what will happen if you aren’t close enough to this market.

Motor1.com

Honda President After Visiting Chinese Auto Supplier: 'We Have No Chance Against This'

Honda CEO Toshihiro Mibe issued this blunt assessment after a visit to a Shanghai auto supplier factory operated by a major Chinese parts manufactu...

Can’t imagine any of this is going down well among the breathless proponents of the “Aggression towards Iran is really about the US targeting China” theory. There is little direct level logic behind China even lifting a finger to assist in any negotiations. There is, however, tremendous second order benefits that will flow in Beijing’s direction from their actions. Quoting from the linked article. “ The US president also indicated that China may have played a role in facilitating the negotiations. When asked whether Beijing had been involved in bringing Iran to the negotiating table, Trump responded, “I hear yes.” “

Trump Tells AFP he Believes China Got Iran to Negotiate

Trump Tells AFP he Believes China Got Iran to Negotiate

Trump says US achieved “total and complete victory” after agreeing a two-week ceasefire with Iran, noting uranium will be handled and suggestin...

Back in the day the theory went that if China became an economic actor engaged commercially with the West, then the country would ultimately evolve into a liberal democratic society. It was naive but that was the thinking. Not only did that trajectory fail to materialize, it is increasing clear that Europe and the United States are the ones who shifted in terms of state governance and have become more like the Chinese system. Exhibit A ….. VPNs

MSN

Today’s CNBC interview linked below. Source: CNBC

CNBC

China remains insulated as the markets call out Trump's bluffs on Iran: Z-Ben Advisors

Peter Alexander of Z-Ben Advisors says a deterioration in the markets makes a de-escalation of the conflict in Iran a certainty, weakening Trump's ...

You may not like the message, but after last Monday’s social media post by President Trump the entire calculus fundamentally changed.

Oh, and just now we have China going back into retaliation mode. Investigation into US trade practices. I would add that throughout this week have had a number of conversations. The through line is a conviction that Trump bluffed on Monday with his post about “constrictive talks with Iran”. My takeaway from those meetings was an interest for the Chinese to press the advantage. This move here, late on a Friday afternoon before American markets open, is a perfect example.

bloomingbit

China's Ministry of Commerce: "Launching trade probes related to the U.S.…suspected disruption of global supply chains"

The Chinese government is reported to be launching two separate investigations into U.S. trade practices in response to U.S. probes targeting China. A

Well, it would appear as though Japanese investors yeeted out of the JFB 10Y at the end of Asian trading.

Anyone out there remember the massive popularity of the Datsun B210 from the 1980s? Demand was a complete response to the oil shock of the 1970s. Same thing hold here. Only question is how long the American domestic moat can hold before the proverbial damn breaks. https://www.reuters.com/world/asia-pacific/some-us-car-buyers-envy-what-they-cannot-have-affordable-chinese-evs-2026-03-23/

Quick note. If the nexus to any talks is Islamabad then know that there are Chinese fingerprints all over that decision. And given recent reports of Wang Yi, China’s Foreign Minister, reaching out to Tehran that makes the movement now being discussed all the more credible.

Yahoo News

Pakistan positioning itself as intermediary in US-Israel-Iran tensions

Asim Munir, Pakistan’s Chief of Defense Forces, called US President Donald Trump on Sunday to discuss the Iran crisis and offered mediation, acco...

Just watched the latest interview with Sec Bessent. Not his best performance. He truly seemed to be at wits end. But it was his comment about how Treasury can monitor who is buying the now unsanctioned Iranian oil. If transacted in USD and done through the SWIFT network of correspondent banks in New York, then yes. Correct. If, however, done with Renminbi and processed through China’s CIPS network then Treasury has zero visibility. I’d wager it is the later and, critically, those shipments will have final settlement in gold.

After a relatively longer than expected wait, Unitree was approved to IPO late on Friday afternoon. Widely expected and the company is even already profitable. Now comes the rapid deployment of scale. The company produced and sold 5,500 units last year. Growth is now set to compound. As I’ve stated on numerous occasions, China will do to humanoid robotics what it did to the EV marketplace. And it’ll be done in a matter of a few years.

CNBC

Unitree plans Shanghai IPO, testing interest in humanoid robots

Chinese startup Unitree Robotics on Friday filed an initial public offering application to the Shanghai ​Stock Exchange, seeking to ​raise abo...

China Afternoon Missive Taiwan 2027 … A Complete Reversal in Posturing And there it is. A statement which was widely expected by the small number of people familiar with the actual confines of the China/Taiwan issue. Granted, my outlook was for this message to be conveyed at some point later in the year. It would now appear that the Beltway consensus views deescalation of the long simmering tensions in the East China Sea as the priority. For the past several years, there has been a barrage of commentary – an ardent conviction really – that planning was underway for China to take direct, kinetic action against Taiwan by 2027. That message was then taken up and aggressively amplified by virtually every single podcast platform focused on geopolitical events. The message was then wedged into every single traditional and social media conversation. And yet, today, we have the following statement. “The [intelligence community] assesses that Chinese leaders do not currently plan to execute an invasion of Taiwan in 2027, nor do they have a fixed timeline for achieving unification,” according to the 2026 Annual Threat Assessment of the US Intelligence Community, which was released on Wednesday. I will not speculate as to why, now, there has been a complete reversal in the intelligence communities’ China threat assessment although it does seem that the Takaichi government in Tokyo was blindsided by Washington’s shift in its positioning on Taiwan. What does need to be communicated, albeit at the risk of being repetitive, is the far more likely scenario when it comes to Beijing’s intentions over Taiwan. Very much to the point, the strategic aim is to maintain the status quo. Beijing has been seeking for all parties, including the United States, to reaffirm the “One China” policy. Furthermore, it is widely held that Beijing has been seeking to formalize these terms into an expansive Fourth Communique. Included would be the provision that the agreed to framework would hold for a period of 50 years after which the parties would then revisit the issue of reunification. The thinking on Beijing’s part is very straight forward. Over a long enough time period, reunification would naturally occur, peacefully, so long as the current incentive structures are left to evolve unimpeded. Basically, the calculus is structured where there will come a time when the Taipei leadership, and even the populace, will accept that the net assessment for reunification delivers both economic and political gains. There are a host of critical paths underling this thinking and much could go wrong. The projections of China’s economy collapsing under the weight of debt or demographics could play out, as example. A future transfer of power in the CCP could go horribly wrong and lead to social instability. 50 years is a long time. What the proposed solution does achieve is a tabling of the issue even if that ends up being temporarily. There is one final point that I wish to add and that plays to the point just made. With Taiwan almost entirely dependent on imported energy, Beijing is reported to have reached out with an offer to provide energy to the island if the Taipei leadership would consider reunification. Now there is no question that the offer is outright coercion, and the overture will be rebuked by the DPP, the ruling party. But we do now live in a world increasingly driven by second and third order effects and it was under the DPP leadership that the decision was made to decommission all of the island’s nuclear power facilities. This could quite possibly lead to political blowback domestically. And, as we see here, it also provides Beijing with a point of leverage.

Al Jazeera

US intelligence agencies not expecting China to invade Taiwan in 2027

US spy agencies says Chinese leadership still prefers to pursue unification with Taiwan

Ok, if you have an interest in a long form interview on my varied perspectives on China then you’ll enjoy this talk. Granted, not a fan of the title. C’est la vie

Seems like China is having a Napster moment. It never ceases to amaze me how the go to approach out of Washington is to angrily shake fists. Diffusion is unstoppable. Get busy adapting or get busy being run over. Senators tell ByteDance to 'immediately shut down' Seedance AI video app

CNBC

Senators tell ByteDance to 'immediately shut down' Seedance AI video app

Lawmakers say the new version of the Seedance AI video-generation app violates copyright and intellectual property laws.

China Morning Missive Trump Derails the China Agenda President Trump is now seeking to postpone his scheduled trip to China. My immediate response was that Beijing learned of this decision the same way we all did. From the President while speaking publicly with the media. If this is accurate, it would be a colossal foreign policy error. The decision, more than likely, is in response to China’s unwillingness to assist with the Strait of Hormuz. Once again, President Trump took the path of applied pressure. And, once again, it was a gross miscalculation much in the same vein as last year’s trade conflict. Whomever is advising the President on China needs to be removed from that position with immediate effect. “Come to Hormuz and assist with reopening the strait”. That was the ask. Below is the formal response from yesterday afternoon. – Foreign Ministry Spokesperson Lin Jian "The recent tensions in the Strait of Hormuz and its surrounding waters have disrupted international trade routes for goods and energy, and undermined regional and global peace and stability. China reiterates its call for all parties to immediately cease military operations, avoid further escalation of tensions, and prevent regional instability that could have a greater impact on global economic development." Clearly, there was no possible way that either Israel or the United States would halt the ongoing Gulf campaign. China would have been very well aware of this fact and, to deflect from the pressure applied, conditions were placed on assistance as any shrewd geopolitical player would do when facing a similar situation. Now, it could all just be happenstance and the decision to postpone the trip could very well be the result of President Trump needing to remain in Washington to oversee the military operations. Let us, for the sake of argument, assume that this is the case. It doesn’t matter. For the Chinese, the irritation comes from how the decision was both made and communicated. For the Chinese, a last minute request to postpone a State visit is within the realm of acceptable diplomatic behavior. Not ideal, but it happens albeit infrequently. For Beijing, especially after the Paris meetings over the weekend, where initial pressure would have most certainly been applied, there would have been an expectation that the President might delay the trip. It would have been a known unknown. Where the gross miscalculation comes into play is in how that decision was communicated. Very publicly. Whenever you are engaging with the Chinese, be it on foreign policy or commercially, any decision that fundamentally alters the direction of a relationship must, and I stress MUST, first be communicated and agreed to privately before either party makes a public statement. Such is clearly not the case here. I’ve been on the receiving end of making that very mistake. You do not want to find yourself in that position. It impairs a relationship in ways that most will not truly understand or appreciate. When an error in judgement is made such as we have here, you won’t even know that the relationship has been impaired. The Chinese side will smile and overtly express an understanding. In reality, there is a deep sense of betrayal, and your Chinese counterpart will fundamentally reorient how engagement will proceed from that point forward. What should be expected is a lower willingness by Beijing to move on any agenda item. There will continue to be dialogue, but the Trump team will now face a new slate of obstacles. Even previously agreed to terms will resurface. For the Chinese, there is no longer any goodwill. My outlook is now firmer than ever. The Chinese will diplomatically impede all progress on the bilateral relationship and await the outcome of the mid-term elections. Trump says U.S. asked China to delay Xi meeting 'a month or so' due to Iran war

CNBC

Trump says U.S. asked China to delay Xi meeting 'a month or so' due to Iran war

The Iran war wasn't expected to derail the Trump-Xi meeting in China, but analysts said it would influence the talks and any agreements that come o...

Dont' expect any support from China on opening up Hormuz. There was a press conference in Beijing a hour or so back. The question was raised if China will send navel assets to the region. This was the answer given. "The recent tensions in the Strait of Hormuz and its surrounding waters have disrupted international trade routes for goods and energy, and undermined regional and global peace and stability. China reiterates its call for all parties to immediately cease military operations, avoid further escalation of tensions, and prevent regional instability that could have a greater impact on global economic development." What that means is for China to provide any support would first require all sides, including the US and Israel, to halt all military actions. I can't even imagine Washington agreeing to such terms, let alone from Beijing.

Yet another example of just how poorly the decision makers in Washington understand their primary opponent. Seems as though I can’t go a single day when some new edict is produced that will generate the opposite outcome. Hormuz is certainly important to China, but it is nowhere near as critical as it is being made out to be. China has a massive spoke network of energy access points from Alegria to Indonesia and all point in-between. Then there are the multiple pipelines into both Russia and Central Asia. Yes, from a cost analysis it would be far better for Beijing to buy cheap oil from the Iranians. Being cut off from Qatar natgas will also have an impact. It’s the long game that matters. Near term solutions to China’s energy needs are readily available. Keeping the US bogged down in the Gulf is an accelerant worthy of any near term pain.

CNBC

China talks up oil sufficiency as Trump seeks Beijing's help on securing Hormuz energy route

The statistics bureau said that China's energy supply is "relatively strong," while announcing an uptick in domestic production.