The authors say they examined 1,070 publications—249 research reports and 821 commentaries—produced by ten major U.S. think tanks between January 2020 and November 2025. The institutions are the American Enterprise Institute (AEI), the Atlantic Council, the Brookings Institution, the Carnegie Endowment for International Peace, the Center for Strategic and International Studies (CSIS), the Council on Foreign Relations (CFR), the Heritage Foundation, the Hudson Institute, the RAND Corporation, and the Wilson Center. Based on their analysis, the authors argue that these institutions have increasingly portrayed a military conflict over Taiwan as imminent, amplified perceptions of a “China threat”, and encouraged Washington and its allies to become more involved in Taiwan’s security. The paper also examines the influence of think-tank funding, political affiliations, and personnel moving between research institutions and government. Interestingly, it identifies a growing number of American voices advocating greater restraint on Taiwan, particularly in the context of Donald Trump’s second presidency.

We believe the paper is worth reading not necessarily because its conclusions are persuasive, but because of what it reveals about how mainland Chinese scholars specialising in Taiwan understand the American policy community. These university-based researchers belong to an academic and policy research ecosystem that helps inform mainland China’s discussions of Taiwan policy. The United States occupies a unique position in cross-Strait affairs, and understanding how Chinese researchers interpret American assessments, intentions, and policy recommendations is valuable in its own right—even when those interpretations are open to question.

This was a long article, and translating it took quite a bit of time. As we worked through the text, however, we noticed two issues. First, in two instances, the Chinese authors’ descriptions of English-language reports do not seem to match what those reports actually say. Yuxuan Jia has flagged both discrepancies in two in-text notes. Second, some of the arguments themselves are not entirely convincing. For example, the paper attributes growing public concern about cross-Strait conflict in Taiwan to U.S. think tanks’ efforts to “foster hostility and fear” without establishing a causal link or adequately considering other explanations. It also tends to characterise military scenario planning as fearmongering and presents U.S. arms sales to Taiwan primarily as a source of heightened tensions. What exactly contributes to stability or increases the risk of confrontation is, of course, a matter of considerable debate.

The authors are

The essay was published on 20 April in Issue 3, 2026 of 台湾研究 Taiwan Studies, a journal run by the Institute of Taiwan Studies at CASS. It is also available on the official WeChat blog of the Institute of Taiwan Studies.

美国主流智库对台海形势的话语塑造及其影响

How Mainstream U.S. Think Tanks Shape Discourse on the Taiwan Strait and Its Impact

Abstract

Mainstream think tanks are important participants in U.S. political life and have a significant influence on U.S. foreign policy decisions. Previous research has focused primarily on U.S. mainstream think tanks’ basic understanding of Taiwan policy but has not yet examined how they shape the situation in the Taiwan Strait.

This paper analyses research reports and commentaries on the Taiwan Strait situation published by ten major U. S. mainstream think tanks over the past five years, summarising the basic characteristics, main features, and impact of their discourse in shaping the Taiwan Strait situation.

The study finds that in the past five years, the number of research reports and commentaries on the Taiwan Strait situation published by U.S. mainstream think tanks has increased significantly and that the narratives advanced by these institutions have become highly similar: extensive portrayal of an imminent “Taiwan Strait war,” fabrication of the “China threat” fallacy, efforts to dominate the international discourse on the Taiwan Strait situation, thereby exerting public opinion pressure on China.

Keywords: U.S. Mainstream Think Tanks; Taiwan Strait Situation; Taiwan Question; Discourse Shaping

Funding: Major Project of the National Social Science Fund of China in Education, 2021, “Research on the History, Current Situation, and Future Strategies of Education in China’s Taiwan Region” (VOA210008).

Introduction

The United States is the most consequential external factor affecting the Taiwan question1, and its think tanks play an important role within this broader influence. The U.S. political system gives think tanks extensive opportunities to participate in national political life and influence government policy, allowing them to function as a “fourth power” alongside the legislative, executive, and judicial branches.2

In recent years, amid intensifying China–U.S. strategic competition and in support of Washington’s strategy of “using Taiwan to contain China,” U.S. think tanks have shifted from academic research towards strategic communication. They have actively reinforced U.S. political messaging3 by publishing large numbers of Taiwan-related reports and commentaries, seeking to influence developments in the Taiwan Strait by shaping public opinion and discourse, fostering misleading perceptions within the international community, and further heightening cross-Strait tensions. Their latest trends, motivations, and effects merit attention.

I. Mainstream U.S. Think Tanks and the Shaping of Taiwan Strait Discourse

As a form of political practice4, discourse refers to the use of language, symbols, and systems to construct and shape how people understand the world.5 It embodies ideas and conveys political concepts through texts, narratives, frameworks, and other forms. Through interaction among different actors, discourse helps construct shared understandings, beliefs, and social realities, thereby shaping perceptions.

Discourse shaping is one of the important functions of think tanks. Through agenda-setting, they influence public opinion and gradually build influence around the world. 6

Existing academic research focuses mainly on mainstream U.S. think tanks’ perceptions of Taiwan-related issues and their role in shaping perceptions of China7, while relatively little attention has been paid to how they shape discourse on the Taiwan Strait. Since the outbreak of the Russia–Ukraine conflict, mainstream U.S. think tanks have actively steered international discussion of the Taiwan Strait, spreading misperceptions of the Taiwan question and the Taiwan Strait situation, helping the United States rally allies to “counter China,” and safeguarding U.S. strategic interests in the Asia-Pacific.

The Taiwan Strait situation refers broadly to the state of political, economic, and military relations across the Strait, as well as social conditions and public opinion in Taiwan. Drawing on the University of Pennsylvania Library’s ranking of leading U.S. think tanks, this article selects ten mainstream institutions with significant political influence and substantial investment in Taiwan-related research. Their relevant research reports and commentaries form the analytical sample.

The Taiwan Strait situation mainly refers to the overall state of political, economic, and military relations across the Strait, together with social conditions and public opinion in Taiwan. Drawing on the University of Pennsylvania Library’s ranking of leading U.S. think tanks, this study selected ten mainstream think tanks with significant political influence and substantial investment in Taiwan-related research, using their relevant research reports and commentaries as the analytical sample. 8

Using “Taiwan” as the keyword, this study searched the publications of these ten institutions for Taiwan-related research published between January 1, 2020 and November 25, 2025. The sample comprises 249 research reports and 821 commentaries, for a total of 1,070 items. Several patterns stand out.

(I) The Russia–Ukraine Conflict Has Intensified Efforts to Shape International Perceptions of the Taiwan Strait

As China–U.S. strategic competition has intensified, the Russia–Ukraine conflict has increasingly been linked to the Taiwan question. Mainstream U.S. think tanks have worked in step with the U.S. government to step up the promotion and amplification of Taiwan-related issues.

First, they extend the Russia–Ukraine conflict to a hypothetical “Taiwan Strait conflict” and draw analogies between the two.

For example, CSIS invokes the Russia–Ukraine conflict in discussing the Taiwan Strait, claiming that “Ukraine now, but Taiwan soon.” The Hudson Institute and the Heritage Foundation tend to advance a narrative that China is about to “invade” Taiwan, claiming that “the economic impact would be much more devastating and profound than that of the Ukraine war”, and call for “joining hands with America’s global allies and partners” against “the CCP threat.” They argue that “Even without direct military intervention from the United States, a Taiwan-China war would devastate the global economy like a weapon of mass destruction.” The Council on Foreign Relations (CFR) similarly argues that an expansion of the Russia–Ukraine conflict “could trigger corresponding actions by mainland China toward Taiwan.”

Yuxuan’s note: The CFR commentary cited in the original article does not appear to contain the claim that the Russia–Ukraine conflict “could trigger corresponding actions by mainland China toward Taiwan.”

Second, after the outbreak of the Russia–Ukraine conflict, the volume of Taiwan-related research published by mainstream U.S. think tanks increased markedly, drawing greater international attention to the Taiwan Strait. RAND and the Hudson Institute were particularly active. In the two years after the conflict began, RAND published 46 Taiwan-related reports, twice the number released in the preceding two years. Many of these drew on the Russia–Ukraine conflict to simulate scenarios of a “Taiwan Strait war.” The Hudson Institute published 51 studies over the same period, also a substantial increase. Taiwan-related discussion at the Heritage Foundation and other major think tanks likewise remained at a high level or increased significantly.

(II) A Detailed Focus on Cross-Strait Military Conflict and Calls for Early U.S. Preparation

Mainstream U.S. think tanks devote considerable attention to the possibility of cross-Strait military conflict. They construct hypothetical “Taiwan Strait war” scenarios in vivid detail, heightening a sense of crisis and encouraging Washington to intervene proactively to “prevent” conflict.

First, they focus heavily on cross-Strait military scenarios and develop them in considerable detail. In January 2023, CSIS published The First Battle of the Next War, simulating a hypothetical “amphibious invasion of Taiwan” by the Chinese mainland. The scenario described “an opening bombardment destroys most of Taiwan’s navy and air force in the first hours of hostilities. Augmented by a powerful rocket force, the Chinese navy encircles Taiwan and interdicts any attempts to get ships and aircraft to the besieged island. Tens of thousands of Chinese soldiers cross the strait in a mix of military amphibious craft and civilian rollon, roll-off ships, while air assault and airborne troops land behind the beachheads.” In June 2024, CSIS published another report detailing possible methods by which the Chinese mainland could blockade the island of Taiwan.

During the same period, the CFR released four Taiwan-related reports. These argue that “The post–Cold War era has drawn to a close, replaced by an era of great power competition and potentially great power conflict, with Taiwan being the most probable flashpoint,” and that “A conflict between the United States and the People’s Republic of China over Taiwan is becoming increasingly imaginable.” On January 7, 2025, CFR released its annual conflict-risk assessment, listing a Taiwan Strait crisis as a “Tier I contingency” for the eighth consecutive year and arguing that “Intensified military and economic pressure by China toward Taiwan precipitate a severe cross-strait crisis involving the United States and other countries in the region.”

RAND, meanwhile, has conducted intensive simulations of various models of a Taiwan Strait conflict, describing in detail scenarios such as Beijing employing multiple grey-zone tactics against Taiwan. Since 2023, it has published four volumes of Alternative Futures Following a Great Power War, each describing specific scenarios of a “Taiwan Strait war” in detail, including one in which “China begins the conflict with an attempted blockade of Taiwan” and even another in which China “detonated a nuclear weapon in the Pacific.”

In November 2024, RAND published another four-volume study centred on a potential “Taiwan Strait war,” further examining how the United States might employ military capabilities against China.

Second, they emphasise that a Taiwan Strait conflict would threaten global security and the international order, portray Taiwan as a U.S. “strategic partner,” and call on U.S. allies to step up their support for Taiwan. CSIS constructs an exaggerated role for Taiwan in U.S. national security and the international community, invoking the potentially negative impact of a conflict on the global economy to urge U.S. allies to help safeguard Taiwan’s security.

One commentary, for example, argues that Japan should “protect Taiwan from intensifying military intimidation and coercion”; another argues that Germany “emphasizes Taiwan’s importance as a trade and investment partner and suggests Berlin will be closely tracking Chinese aggression across the Taiwan Strait and broader Indo-Pacific”; and a third plays up the claim that the Philippines “increasingly recognize that they would have national security interests in any crisis around Taiwan.”

The Brookings Institution has also highlighted the role of the Taiwan authorities during the COVID-19 pandemic and called on the international community not to isolate Taiwan.

(III) Close Attention to the Impact of Taiwan’s Semiconductor Industry on U.S. and Global Technology and the Economy

Mainstream U.S. think tanks generally focus on Taiwan’s technological and economic position in global industrial and supply chains and call on the U.S. government to guarantee “Taiwan’s security” to strengthen the security and resilience of global supply chains.

On the one hand, they seek to elevate Taiwan’s role in U.S. technological and economic development and call on Washington to safeguard “Taiwan’s security.” The Carnegie Endowment for International Peace and the Wilson Center, for example, play up Taiwan’s “economic competitiveness” and its role in China–U.S. competition and the global semiconductor supply chain. They also advocate “better leverag[ing] partnerships with U.S. and other international players” to “bolster Taiwan’s standing in the global marketplace.”

A Hudson Institute commentary claims that “losing access to Taiwan’s semiconductor industry would have a negative impact on the U.S. economy greater than either the global financial crisis of 2008 or the COVID lockdown of 2020” and that “If the U.S. were no longer able to access Taiwan’s semiconductor industry, it would have a devastating impact on the U.S. economy.” The Heritage Foundation argues that Taiwan will remain the preferred centre of semiconductor manufacturing and calls for ensuring that it continues to supply the United States with high-quality, low-cost chips so that U.S. chip technology can retain its global lead. It therefore recommends greater U.S. investment in the Indo-Pacific and stronger deterrence in the region.

On the other hand, these institutions strongly emphasise the possible impact of a “Taiwan Strait war” on the global economy and semiconductor supply chains. Mainstream U.S. think tanks tend to link a hypothetical Taiwan Strait war to global geopolitics and the vulnerability of semiconductor supply chains, arguing that geopolitical shifts could create enormous risks for Taiwan and the rest of the world.

A RAND report states that production of the highest-end semiconductors “exists almost entirely in Taiwan” and argues “China’s desired unification with Taiwan could lead to disruptions in the fabrication of semiconductors in Taiwan, which would have ripple effects across the U.S. and global economies.” It adds that effective short-term responses are generally lacking, while “players in the TTX were surprised at the degree of interdependence” and “were not aware of the time and expense that would be required to reorient an industry built up over decades.”

The Wilson Center argues that “CCP control of Taiwan would erode US global power to a level last seen in the early 1900s.” A CSIS report titled Crossroads of Commerce: How the Taiwan Strait Propels the Global Economy states that more than 20 per cent of global maritime trade passes through the Taiwan Strait and accuses China of using a range of measures to “pressure Taiwan,” potentially causing severe disruption to global trade.

These think tanks seek to tie the prospect of a “Taiwan Strait conflict” to global economic and technological interests, using Taiwan’s importance and rising tensions in the Strait to incite and encourage greater international interference in Taiwan Strait affairs.

(IV) Some Think Tanks Have Begun to Advance More Positive Arguments on the Taiwan Question from the Perspective of Stabilising China–U.S. Relations

Some U.S. think tanks and policy elites have begun to reassess cross-Strait relations from a more pragmatic, positive, and constructive perspective. They argue that maintaining peace in the Taiwan Strait and promoting the peaceful development of cross-Strait relations are important to stabilising relations between China and the United States. Some have even begun, from the standpoint of U.S. interests, to consider the possibility of peaceful reunification across the Strait. This trend has become more evident since Trump began his second term.

First, they emphasise the importance of China–U.S. relations and argue that the relationship is becoming increasingly important to U.S. global strategy. They regard keeping the situation in the Taiwan Strait under control as a fundamental prerequisite for maintaining stable bilateral relations.

For example, an Atlantic Council article published in February 2025 argues that “China and the United States have decided that coexistence is the preferable direction for their relationship…Their rivalry has been channeled through other pathways short of war…And they’ve found, more than occasionally, that their interests actually intersect.”

A CSIS report published in March 2025 argued that during Trump’s first term, China and the United States maintained hardline positions and found it extremely difficult to reach agreements. During Trump’s second term, however, the two sides might be able to reach a deal on Taiwan-related security issues: “Washington could pledge to oppose (or at least “not support”) Taiwan’s de jure independence, and Beijing could commit to not attack the island.”

Second, some think tanks have explored the possibility of accepting “peaceful reunification,” giving rise to a new form of the “Taiwan abandonment” argument.9 Since 2020, a new round of such arguments has emerged within the U.S. strategic community. They hold that Washington should not overstate the costs of “losing Taiwan” and should pursue a more rational and pragmatic Taiwan Strait policy.

Representative figures include RAND Senior Political Scientist Michael Mazarr and Quincy Institute Senior Research Fellow Michael Swaine. They advocate a gradual abandonment of Taiwan, reject an unconditional commitment to “assist in Taiwan’s defence, stress that Taiwan is a non-vital U.S. interest, and argue that Washington should distance itself from “Taiwan independence” forces.10

For example, RAND published Stabilizing U.S.–China Rivalry, a report led by Mazarr, which recommends adjustments to Washington’s long-standing approach of strategic ambiguity and calls for more proactive reassurance, including stating that the United States “does not support Taiwan independence, seek a permanent separation across the Straits, or oppose peaceful unification,” with the aim of encouraging Beijing to favour gradual and peaceful approaches to unification over the use of force. Such language is extremely rare in open U.S. policy debate.

Foreign Affairs, published by the Council on Foreign Relations, has also carried several articles containing elements of the “Taiwan abandonment” argument. One, The Taiwan Fixation: American Strategy Shouldn’t Hinge on an Unwinnable War, argues that exaggerating Taiwan’s strategic significance and importance to the United States could precipitate a catastrophic conflict. It advocates that “the United States insulate its regional interests from Taiwan’s fate” and that “instead of clarifying its commitment to defend Taiwan, Washington should retain an ambiguous stance.”

Another Foreign Affairs article, Toward a Taiwan Truce, argues that the United States would find it difficult to achieve a decisive victory in a potential military conflict in the Taiwan Strait and should therefore adjust its current strategy to avoid a direct military confrontation with the Chinese mainland.

Leon Hadar, a senior fellow at the Foreign Policy Research Institute, also published an article titled Taiwan and the limits of American power: Should America really send its daughters and sons to die in the Taiwan Strait? He argues that Taiwan is a “peripheral interest” for the United States but a “core interest” for mainland China. Citing assessments that “China would likely prevail in a conventional conflict over Taiwan,” Hadar argues that current U.S. policy toward Taiwan risks becoming a “costly overextension of American power” and is inconsistent with genuine U.S. national interests. He therefore recommends that the United States “explore diplomatic solutions that acknowledge Chinese concerns about sovereignty while preserving Taiwan’s democratic autonomy.”

Such arguments, which contain elements of both “opposition to Taiwan independence” and “Taiwan abandonment,” signal an important shift underway within the U.S. strategic community. They indicate that U.S. strategists have begun to reassess Taiwan’s role and place in U.S. global strategy and place great emphasis on avoiding a China–U.S. military conflict.

II. The Context Behind Emerging Trends in U.S. Think-Tank Discourse on Taiwan

(I) Changes in China–U.S. Strategic Competition Have Increased the Incentive to Exploit the Taiwan Question

First, China–U.S. strategic competition has entered a new stage. As Taiwan’s geopolitical value has become more pronounced, U.S. think tanks have increasingly sought to play the “Taiwan card” to pressure China and preserve U.S. strategic advantages. In October 2018, then U.S. Vice President Mike Pence delivered a speech at the Hudson Institute in which he levelled groundless accusations and malicious smears against China. This speech was the first time since the Clinton administration that a senior U.S. leader had openly attacked China in explicitly Cold War terms, marking a new stage in U.S. strategic containment of China.11

After Biden took office in 2020, U.S. strategy toward China shifted from the Trump administration’s first-term focus on the growth of Chinese military power to greater concern over challenges posed by China to U.S. security interests in the Asia-Pacific, with increasing attention directed toward Taiwan. The outbreak of the Russia–Ukraine conflict in 2022 further heightened U.S. anxiety over the Taiwan Strait.12 At the same time, the DPP authorities intensified efforts to “seek independence by relying on external forces” and expanded their ties with the United States, contributing to continued cross-Strait tensions.

Mainstream U.S. think tanks accordingly stepped up their support for Washington’s intervention in and exploitation of Taiwan. Some have even advocated moving U.S. Taiwan policy from “strategic ambiguity” toward “strategic clarity” and brazenly called for preparations for the possibility of direct armed conflict between China and the United States in the Taiwan Strait.13

Second, Taiwan’s semiconductor industry enjoys distinctive advantages amid the current wave of artificial intelligence, making Taiwan’s role in global industrial and supply chains increasingly important in U.S. assessments. Since the beginning of the twenty-first century, a new industrial revolution centred on artificial intelligence has gathered pace, yet the United States remains heavily dependent on semiconductors manufactured in Taiwan. It is widely believed in the United States that any disruption to semiconductor supply chains could deal a major blow to both the U.S. and global economies, while Chinese dominance of the semiconductor market would pose serious economic and security risks. Republicans, in particular, have urged the U.S. government to build semiconductor markets and supply chains that are not dependent on China, protect and accelerate the development of critical industries such as artificial intelligence, and, on that basis, deepen military support for Taiwan.

(II) Trump’s Second Term Has Prompted U.S. Think-Tank Elites to Consider More Actively How to Avoid China–U.S. Conflict

For many years, official U.S. language on Taiwan Strait policy largely stopped at “opposing” or “not supporting Taiwan independence.” Trump’s second term, however, has profoundly disrupted the global landscape and geopolitics and upended a century of U.S. global strategy.14 These changes in the international environment have prompted Washington to rethink the direction of its China policy. To avoid being drawn into an uncontrollable spiral of conflict, China–U.S. relations need to move towards a model of limited and managed competition.

First, the Trump administration has shifted the priorities of U.S. global strategy, placing greater emphasis on stable competition between China and the United States. Since Trump began his second term, U.S. global strategy has undergone significant change. His “America First” foreign policy approaches Taiwan through a more transactional and instrumental lens, recognising the importance of the Taiwan question to China and placing greater weight on stability in China–U.S. major-power relations.

On January 17, 2025, during a phone call with the Chinese leader, Trump stated that “As the most important countries in the world, the United States and China should get along well for years and beyond and work together for world peace.” During another call between the two leaders on June 5, Trump said that he has “great respect for President Xi, and the U.S.-China relationship is very important. The U.S. wants the Chinese economy to do very well...The U.S. will honor the one-China policy.”

The new U.S. National Security Strategy strongly reflects this adjustment in Trump’s policy. It places greater emphasis on U.S. security interests in the Western Hemisphere and, to some extent, seeks to play down great-power competition and the “China threat” narrative.15 At the same time, it attaches greater importance to economic relations with China, assesses Taiwan’s value more through its geographical position and leading role in the semiconductor industry, and makes conflict prevention a priority.

This shift echoes more restrained voices emerging in the United States, which favour steering China–U.S. relations towards a path of manageable competition in which cooperation takes precedence over confrontation, thereby creating greater space to avoid major-power conflict and preserve the international order. More U.S. think tanks are expected to reassess Taiwan’s position and China–U.S. relations against the backdrop of this strategic adjustment and to analyse the future course of cross-Strait relations more rationally.

Second, U.S. society and policymakers are taking a more rational view of China’s proposal for “peaceful reunification and one country, two systems.” As China’s strength continues to grow and the United States’ relative advantage narrows, Taiwan’s instrumental value and marginal utility in U.S. strategic competition are gradually declining. Some think tanks have begun urging Washington to take a more open attitude towards China’s proposal for peaceful reunification and to regard Taiwan as a bargaining chip in China–U.S. negotiations and strategic rebalancing, pushing U.S. policy towards Taiwan from “using Taiwan to contain China” towards “risk management.”

This shift is reflected in RAND’s suggestion that “the United States could balance its commitments to Taiwan with leveraging its influence to ensure that Taiwan’s actions do not escalate tensions with China and destabilise cross-Strait security”, as well as in views expressed by Mazarr and others that the United States should “not oppose peaceful unification”.16

(III) Differences in Think Tanks’ Taiwan Strait Narratives Reflect Partisan Alignment and Funding Sources

Many think tanks, under the authorisation or influence of the U.S. government, provide ammunition for U.S.-led public-opinion and cognitive warfare by creating concepts, advancing propositions, and publishing reports. Although mainstream U.S. think tanks all seek to shape the discourse on the Taiwan Strait, they advance different narratives reflecting their respective partisan backgrounds and funding sources.

First, differences in partisan orientation and funding lead think tanks to portray the Taiwan Strait situation in different ways. Most U.S. think tanks have partisan backgrounds and also receive financial support from the U.S. government and its allies. Since 2019, the U.S. government has directly provided at least US$1.49 billion to major think tanks, of which US$1.4 billion went to RAND, which provides services to the U.S. government. Major think tanks also frequently receive funding from U.S. Department of Defense contractors or foreign agents. Differences in funding sources require these institutions to take funders’ interests into account when producing research and policy recommendations, resulting in varying degrees of assertiveness in their portrayals of the Taiwan Strait situation.

RAND, for example, given its close ties to the U.S. military-industrial complex, regularly publishes studies that amplify the “China threat” narrative and assess China’s military power17, with a particular focus on a “Taiwan Strait war” and Taiwan Strait crises.

In addition, mainstream U.S. think tanks differ markedly in the language they use to frame the situation in the Taiwan Strait, reflecting the support they receive from different political parties. The Brookings Institution receives support from Democrats; the Heritage Foundation and the AEI from Republicans; while centrist institutions such as RAND and CSIS receive bipartisan support or work on a nonpartisan basis.

Republican-supported think tanks are more supportive of Taiwan and more likely to use political language that carries separatist and hegemonic implications, such as “aggression,” “invade,” and “annex,” which employ hostile and disparaging rhetoric about China and frame the Taiwan Strait in ways favourable to Taiwan. Think tanks with Democratic ties, such as Brookings, tend to use more moderate language and publish fewer articles invoking the “theory of Taiwan’s undetermined status,” relying more often on comparatively neutral terms such as “blockade” and “Taiwan Strait conflict.”

Second, the extent of a think tank’s interaction with the DPP authorities affects its position on Taiwan-related issues. The deeper the contact, the more supportive the think tank tends to be of the Taiwan authorities’ position. According to the authors’ statistics, between 2020 and 2025, the DPP authorities met delegations from the ten major U.S. think tanks 23 times: six from the Atlantic Council, five from Brookings, four from the Heritage Foundation, three from CSIS, two from AEI, and one each from the Hudson Institute, RAND, and the Wilson Center.18 Leaders of the Taiwan authorities received most of these delegations, which helped deepen the think tanks’ support for Taiwan in areas including trade, technology, and values.

In addition, the DPP authorities frequently co-host seminars with mainstream U.S. think tanks or are invited to deliver speeches. For example, the Hudson Institute invited Tsai Ing-wen to speak on Taiwan’s external, economic, and security challenges. The Taiwan authorities also cooperate annually with several mainstream U.S. think tanks, including Hudson, on issues such as Taiwan Strait security, Taiwan–U.S. relations, and Taiwan’s participation in international activities. This fuels further discussion of Taiwan Strait issues and amplifies the “theory of Taiwan’s undetermined status.”

III. Motives and Effects of Mainstream U.S. Think Tanks’ Efforts to Shape Taiwan Strait Discourse

(I) Creating Public-Opinion Pressure and Influencing U.S. Taiwan Strait Policymaking

Under the leadership of the U.S. government, think tanks, media organisations, and other social actors actively participate in manipulating public opinion and shaping perceptions. The U.S. government first uses think tanks and other third-party institutions to provide theoretical packaging for its policy positions and formulate policy recommendations, then relies on media hype and support from politicians to disguise these positions as “social consensus,” before ultimately implementing policies in the name of public opinion.

First, think tanks publish large numbers of Taiwan-related reports and commentaries, providing strategic recommendations and policy ideas to the U.S. government, creating platforms for dialogue, and promoting discussion of Taiwan Strait issues, thereby serving as a reference for government decision-making on Taiwan.

Heritage Foundation commentaries, for example, not only explicitly advise the U.S. government to shift toward “strategic clarity,” but also spell out how the United States could intervene in a “Taiwan Strait conflict.” The Heritage Foundation has further argued that the United States needs Taiwan to win the semiconductor race and should deploy munitions in the Taiwan Strait region to deter China. 19

CSIS’s 48-page report Strengthening Resilience in Taiwan devotes roughly 40 pages to detailed policy recommendations on how the United States should respond to a “Taiwan Strait war” and confront China. RAND likewise constructs Taiwan Strait conflict scenarios from multiple angles before advancing concrete policy recommendations for the United States, including expanding military exchanges, increasing arms sales to Taiwan, revising the long-standing policy of “strategic ambiguity,” and strengthening U.S. “commitments to Taiwan.”

The large volume of research and policy recommendations produced by these think tanks provides a substantial body of material for policy debates and legislative initiatives across the U.S. government. Think tanks also seek to shape public opinion on Taiwan Strait issues by organising seminars and report launches, publishing commentaries in mainstream media, and giving interviews, thereby influencing government decision-making. U.S. State Department spokespersons frequently cite data and examples from think-tank reports, helping these views spread rapidly through international media.20

Second, think-tank personnel can enter relevant government departments through the “revolving door,” directly participate in decision-making on Taiwan-related affairs, or testify before Congress in support of or opposition to specific legislation, thereby influencing Taiwan policy.

Rush Doshi, now a Senior Fellow for Asia Studies at the Council on Foreign Relations, had directed the Brookings China Strategy Initiative before entering government. From 2021 to 2024, he served as the National Security Council’s Senior Director for China and Taiwan, helping coordinate U.S. government policy on Taiwan. His book The Long Game: China’s Grand Strategy to Displace American Order discusses U.S. strategy on the Taiwan Strait and directly influenced the Biden administration’s Taiwan policy.

Ely Ratner previously served as a Senior Fellow for China studies at the Council on Foreign Relations and as an Associate Political Scientist at RAND. From 2021 to 2025, he served at the Department of Defense as Assistant Secretary for Indo-Pacific Security Affairs, directly participating in decisions on arms sales to Taiwan and deterrence.

Former Secretary of State Mike Pompeo joined the Hudson Institute as a Distinguished Fellow and took part in policy discussions while there. Former Vice President Mike Pence joined the Heritage Foundation as a Distinguished Visiting Fellow. Kathleen Hicks of CSIS was nominated during the Biden administration to serve as Deputy Secretary of Defense.

Think-tank experts also provide members of the House and Senate with analyses and professional assessments of the Taiwan Strait through non-public channels, including rapid briefings and position papers,21 thereby influencing Taiwan-related legislation.

On 7 February 2023, for example, Brookings scholar Melanie Sisson testified before the House Armed Services Committee that “The modernization of the PLA has changed the regional military balance and significantly…It is therefore essential that Congress ensures DOD is equipped in concept and in capability to deter PLA aggression.” She argued that the United States should join in the defense of Taiwan and “encourage the government of Taiwan to adopt a defense concept.”

Subsequently, on 18 April 2023, the House Armed Services Committee took part in drafting the FY2024 National Defense Authorization Act. The legislation called for the United States to provide Taiwan with security assistance, defence articles, and services; continue supporting the development of Taiwan’s military capabilities to maintain its defensive capacity; and strengthen Taiwan’s reserve forces. It also required the Director of National Intelligence to “seek to enter into a contract with an eligible entity to conduct a comprehensive study on the global economic impact of a military invasion of Taiwan by the People’s Republic of China or certain other aggressive or coercive actions taken by the People’s Republic of China with respect to Taiwan.” The NDAA was signed into law on 22 December 2023. These provisions illustrate the growing role of mainstream U.S. think tanks in shaping Taiwan-related legislation and the extent to which their arguments are taken up and endorsed by government institutions.

(II) Linking the Taiwan Strait to International Security Interests and Encouraging Allies to Share Defence Responsibilities

At present, many countries do not fully share the U.S. view of the importance of peace and stability across the Taiwan Strait, while many of Washington’s major allies lack a basic understanding of Taiwan’s history, the state of cross-Strait relations, and regional geopolitics. Mainstream U.S. think tanks therefore argue that Washington needs to address this perception gap, strengthen its messaging on the Taiwan Strait, and repeatedly explain how peace and stability across the Strait serve the interests of individual countries.22

For example, in June 2024, RAND published Middle-Power Equities in a Cross-Strait Conflict, which examined the interests of four U.S. allies—Australia, Canada, Japan and the United Kingdom—in a cross-Strait conflict. The report found that these countries were relatively unlikely to become actively involved in a “Taiwan Strait war”, yet RAND still recommended that they develop a trade sanctions plan targeting China.

U.S. think tanks use “interest bundling” to depict scenarios in which the Chinese mainland “invades, threatens, or launches war,” playing up the threat posed by China’s military and hyping the risks of a Taiwan Strait conflict to push U.S. allies to align more closely with Washington’s China policy.23

A RAND report published in November 2025 discusses economic measures that the United States, Australia, Japan, the United Kingdom, and other countries could take to deter a hypothetical “blockade or invasion on Taiwan”. It particularly recommends heightening fear and hostility toward the perceived threat from China within Japan and leveraging Japan’s “technical ability to impose a variety of sanctions on China within a relatively short time.”

Yuxuan’s note: The RAND report mentioned here presumably refers to Economic Deterrence in a China Contingency, published in November 2025. The report does state that Japan has the “technical ability to impose a variety of sanctions on China within a relatively short time.” However, I could not find a corresponding passage recommending that fear or hostility toward China be heightened among the Japanese public, as the Chinese text suggests.

Mainstream U.S. think tanks seek to influence public opinion and attitudes in other countries, encouraging U.S. allies and other stakeholders to share responsibility for defence and respond collectively to a conflict.

(III) Supporting the Taiwan Authorities’ Publicity Efforts and Shaping Hostility toward the Mainland among Taiwan’s Public

First, mainstream U.S. think tanks lend support to the DPP authorities’ domestic and international messaging efforts by shaping public discourse on Taiwan and seeking to influence U.S. policymaking on Taiwan. By co-hosting conferences with the Taiwan authorities, they help “give Taiwan a voice.”24

For example, in August 2025, a Brookings delegation including Ryan Hass met Lai Ching-te to discuss strengthening military capabilities and cooperation in the Indo-Pacific. In September 2025, the Heritage Foundation invited Chiu Chui-cheng, head of Taiwan’s Mainland Affairs Council, to the United States to promote the Taiwan authorities’ external policy positions.

Mainstream U.S. think tanks have also actively promoted the narrative that the Chinese mainland will use force to reunify Taiwan in 2027, which helps the DPP authorities formulate their so-called “defence” plans. Amid escalating political confrontation across the Strait, mainstream U.S. think tanks have sought to goad the Taiwan authorities into purchasing U.S. weapons for “self-defence”, further heightening the risk of conflict in the Taiwan Strait.

Second, mainstream U.S. think tanks seek to influence public opinion in Taiwan and shape how Taiwanese people perceive the situation across the Taiwan Strait, thereby strengthening support for the Taiwan authorities’ “defence” policies. Through a large volume of commentaries and op-eds by think-tank researchers in the media, they portray cross-Strait conflict as imminent and stoke public fears of war.

A 2023 poll by Taiwan’s Global Views Monthly found that only 23.5 per cent of respondents believed war across the Strait was possible within the next five years, while 64.6 per cent considered it unlikely. By contrast, a 2025 survey by the magazine found that 53.7 per cent believed war was possible within the next three years, while only 38.2 per cent considered it unlikely. Similarly, a 2022 survey by Taiwan’s CommonWealth Magazine found that more than 60 per cent of respondents were not worried about a cross-Strait war within the next year. By October 2023, however, 46 per cent of respondents expressed concern about a possible war within the next five years.

This shift in public perceptions is closely related to the sustained efforts of mainstream U.S. think tanks to foster hostility and fear toward the Chinese mainland among Taiwan’s public.

Conclusion

Mainstream U.S. think tanks’ efforts to shape discourse on the Taiwan Strait constitute an important part of Washington’s cognitive warfare against China and the U.S. effort to shape international discourse. Over the past five years, mainstream U.S. think tanks have frequently published research reports and commentaries on the Taiwan Strait, manipulating public narratives. Their discourse has been highly consistent, playing up the prospect of an inevitable war across the Strait, shifting primary responsibility for escalating tensions onto the Chinese mainland, promoting the narrative of China seeking to “annex Taiwan”, and attempting to portray China as a “revisionist state seeking hegemony”.

This discourse not only generates public pressure on the U.S. government and influences its Taiwan-related policymaking, but also has a knock-on effect on U.S. allies. It further shapes the Taiwan authorities’ cross-Strait policy choices and influences public perceptions of the situation across the Taiwan Strait.

In response, China should, on the one hand, closely monitor the latest developments in mainstream U.S. think tanks’ efforts to shape discourse on the Taiwan Strait, rebut erroneous views, and expose their attempts to exploit the Taiwan question to undermine China. On the other hand, China should strengthen regular exchanges and cooperation with U.S. think tanks and actively shape perceptions of cross-Strait relations within the U.S. intellectual community.

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Pekingnology

Would Beijing Accept Taiwan on These Terms?

Something unusual has been happening in the cross-Strait debate over the past few weeks…

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a month ago · 33 likes · 9 comments · Yuxuan JIA, Qingqu Yuan, and Zichen Wang

Pekingnology

How Far Can the Debate over “One Country, Two Systems” Go?

Pekingnology has already published the first two essays in an unusual series by Ci-Ze Li (李其澤), an associate professor at National Changhua University of Education in Taiwan. Li has done something still relatively rare in Taiwan’s cross-Strait debate: rather than simply accepting or rejecting Beijing’s call to explore a “One Country, Two Systems” soluti…

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24 days ago · 25 likes · 2 comments · Yuxuan JIA and Qingqu Yuan

Pekingnology

A Taiwan Professor Answers His Mainland Critics

Last week, Pekingnology published a translation of an unusual essay by Ci-Ze Li, an associate professor at National Changhua University of Education in Taiwan. Taking Beijing’s call to explore a “One Country, Two Systems” solution seriously, Li asked what Taiwan should demand in such negotiations. His proposed terms included continued democratic electio…

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a month ago · 24 likes · 1 comment · Zichen Wang, Yuxuan JIA, and Qingqu Yuan

Drawing on the “Solow paradox” and “Engels’ pause,” Huang cautioned that technological advances do not necessarily translate into immediate productivity gains or higher wages for workers. He called for “employment-first AI innovation” and suggested that persistently weak demand could require public policies beyond conventional macroeconomic frameworks.

The remarks were delivered at the Inclusion Conference on the Bund in Shanghai on 9 September 2026. A transcript was published on the NSD’s official WeChat account on 16 September.

We are publishing a translation of Huang’s remarks under the NSD’s authorisation.

—Yuxuan Jia

黄益平：AI对经济意味着什么？

Huang Yiping: What Does AI Mean for the Economy?

Artificial intelligence is profoundly changing our economy and society. I’d like to share a few thoughts on what this means.

At Peking University’s National School of Development, we have long been interested in AI. In 2025, we formally launched our “AI + Disciplinary Innovation” research program. We have seen firsthand how profoundly and extensively AI is affecting the economy and society. Whether in macroeconomics, microeconomics, environmental economics, or financial economics, scholars can clearly see that AI is not only changing what they study but also revolutionising how they study. This is truly an unprecedented transformation.

The implications of AI for economic growth paradigms and social values are enormous, far too broad to explore fully today. So, with the time we have, I’d like to focus on one question: What impact will AI have on the economy?

Can AI Improve Productivity?

There is still considerable debate about AI’s economic impact. The transformation is ongoing, and its eventual outcome remains uncertain.

Economists often refer to the famous “Solow paradox.” When computers became widespread, virtually everyone and every sector began using them. It looked like a sweeping technological revolution. Yet the data on total factor productivity showed little evidence of significant improvement.

Of course, subsequent research by many scholars demonstrated that computers did eventually boost total factor productivity. The gains were not immediately apparent in the macroeconomic data for several reasons, including measurement difficulties, time lags, and structural adjustments.

So, can we use the Solow paradox to understand AI’s economic impact? I think it’s possible, but things could also turn out differently. We will have to keep tracking developments and analysing the evidence. It’s too early to draw firm conclusions.

Personally, I’m relatively optimistic about AI’s potential to improve productivity. But it is important to recognise that the process is complicated. The economy won’t suddenly take off just because AI has entered the picture. The Solow paradox reminds us that turning technological advances into productivity gains is far from straightforward.

Many people are also concerned about today’s massive investment in AI. Will it ultimately deliver productivity gains, or will it create a bubble that is bound to burst? Both outcomes are possible. Eventually, practice is the sole criterion for testing truth.

How Will AI Affect Employment and Income Distribution?

Another question that has generated considerable debate is how AI will affect employment and the labour market. Frankly, the ultimate impact also remains uncertain.

Initially, there seemed to be a fairly clear idea of which types of jobs robots would replace. But as AI technology has advanced, it has become increasingly apparent that the types of jobs vulnerable to replacement are constantly changing. I’m not entirely sure how this will play out, but efficiency gains are likely to displace some workers.

This raises a particularly important question: Even if AI improves productivity, what will it mean for the structure of employment and the distribution of income?

Clearly, AI will disrupt some jobs while creating new opportunities for others, with major implications for income distribution. What deserves particular attention is that the divide may emerge not only among workers but also between returns to capital and returns to labour.

Lessons from “Engels’ Pause”

Not long ago, several colleagues and I travelled to Europe on a research trip. In Brussels, we visited a small restaurant where Karl Marx wrote The Communist Manifesto. That got me thinking: Why did Marx write The Communist Manifesto in 1847–1848?

It was after reading the relevant literature, including Friedrich Engels’ writings, that I realised this was a period of dramatic changes in income distribution following the First Industrial Revolution, which gave rise to what became known as “Engels’ pause.”

What exactly was Engels’ pause? Put simply, it refers to a period following a technological or industrial revolution when real output per capita rises significantly, but workers’ real wages stagnate for an extended period.

Engels’ The Condition of the Working Class in England illustrates how, even as the Industrial Revolution brought prosperity to the economy as a whole, serious problems of income distribution persisted. It was only after Engels’ pause came to an end that workers’ wages began to rise substantially. The process took seventy or eighty years.

Taken together, productivity and income distribution have implications that go beyond distribution of income, social fairness, or living standards. At the macroeconomic level, they could give rise to an entirely new situation — what is often described in China today as “strong supply and weak demand.”

Of course, this imbalance may be temporary or confined to certain parts of the economy.

Will AI Exacerbate the Imbalance Between Supply and Demand?

This raises a question worth exploring further: If AI delivers the expected dramatic gains in total factor productivity while also constraining aggregate demand through its effects on income distribution, could it exacerbate the imbalance between strong supply and weak demand currently facing China’s economy? If so, could it fundamentally change the economic growth paradigm?

Economics begins with a basic assumption: resources are scarce, while human wants are relatively unlimited. One of its central questions, therefore, is how to make the most of limited resources to meet people’s needs while striking a balance between efficiency and fairness. But what happens to this fundamental question if, as I suggested earlier, productivity increases dramatically and material goods become abundant?

The imbalance between strong supply and weak demand may prove to be a transitional phenomenon, or it may signal a more fundamental shift in the economic paradigm. But either way, just as it took nearly eighty years after the First Industrial Revolution to gradually address the problems of income distribution, this new situation is likely to present us with a host of new challenges.

That’s the question I’d like us to think about together.

How Businesses and Public Policy Can Respond

Technological revolutions certainly bring many positive changes, but they can also produce outcomes that are suboptimal for society as a whole, such as the Engels’ pause I mentioned earlier.

Businesses need to act responsibly and ensure that workers have jobs and incomes. This is an important principle.

So far, much of the emphasis has been on the importance of “AI innovation.” But perhaps it’s time to do more to promote and support “employment-first AI innovation.” Innovation should certainly improve efficiency, but new technologies should do more to empower workers rather than replace them altogether.

Of course, putting this into practice won’t be easy. It may require fostering a culture that embraces this approach, rather than simply imposing rigid rules about what can and cannot be done.

At the same time, this places higher demands on public policy. I have faith in human ingenuity. It took nearly eighty years after the First Industrial Revolution to resolve the problems of income distribution. I believe it won’t take as long this time, given the lessons learned from that historical experience.

Public policy may need to take a more proactive approach to addressing macroeconomic challenges, even going beyond conventional policy frameworks.

Traditionally, macroeconomic policy has focused primarily on short-term problems. When demand temporarily falls short, policymakers can stimulate it to restore the balance between supply and demand. But what if insufficient demand becomes a persistent problem in the future? That would present an entirely new challenge for public policy.

I don’t have ready answers to these questions. I hope we can explore them together in greater depth.

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International media widely picked up the findings. The Financial Times, for example, described the OECD analysis as showing that Chinese firms’ gains in global market share were “driven by subsidies.”

The report has also prompted a growing pushback from Chinese economists and trade scholars. Yuankun Li, Assistant Research Fellow at the Institute of World Economics and Politics, Chinese Academy of Social Sciences (CASS), questioned the OECD’s calculations, arguing that its choice of interest-rate benchmark substantially inflates its estimate of below-market borrowing subsidies in China. In June, Pekingnology published a study by Zhu He and Guo Kai of the China Finance 40 Forum, which challenged the OECD’s subsidy-centric explanation of China’s emerging industries. The East is Read also reposted a detailed critique by Cui Fan, a professor at the School of International Trade and Economics at the University of International Business and Economics (UIBE), focusing on the OECD database and its methodology.

Cui returned to the subject at a 28 September online briefing organised by the Geneva-based Friends of Multilateralism Group (FMG), attended by OECD experts, Chinese scholars and FMG members. He questioned the focus on “non-market policies and measures,” asking why the research focuses on China’s industrial subsidies while leaving tariffs, export controls, and other trade and investment restrictions out of the research agenda.

Below is Cui Fan’s intervention at the discussion, published in English on his personal WeChat blog on 29 September 2026 and reposted here. Cui has kindly authorised the repost.

— Yuxuan Jia

关于补贴问题研究议程和方向的发言

An Intervention on the Agenda and Direction of Research on Subsidies

It is a pleasure to join this discussion with experts from FMG and the OECD.

The issue of subsidies has attracted considerable attention in recent years. However, perspectives and concerns vary. Together with some Chinese colleagues, my primary focus is on the WTO compliance and rationality of subsidies.

In 2024, global average temperature exceeded the 1.5 degree Celsius threshold above pre-industrial levels for the first time. The hazards of climate warming are imminent. Scientists in Europe, the United States, China among other countries have made tremendous contributions to climate change research. Nevertheless, in recent years, we have seen some US officials and senators claim that global warming is a hoax, while certain European think tanks are already discussing adjusting the 1.5–2 degrees threshold to 3 degrees. It appears that some people in Europe and the US are growing hesitant on the climate agenda. Yet faced with this common threat to humanity, we need to reflect on whether national governments have done enough to tackle climate change.

The new energy industry is the sector in China most heavily restricted by some of our trading partners. We understand that countries need to balance industrial interests while addressing climate warming challenges. Every major economy wants a share of the new energy market, and small and medium-sized economies also hope to secure a position in the new energy industrial value chain. China has revoked WTO-compliant export tax rebates for photovoltaic products and has reduced, and is phasing out, export tax rebates for lithium batteries. China has made a trade-investment integration policy in its 15th Five-Year Plan to encourage outbound investment by the new energy industry and other industries. In this process, reasonable technology transfer and spillovers will occur naturally. By contrast, too much investment restrictions through legislation will only slow down such capacity relocation and the re-balancing of trade.

China has made substantial efforts to ensure subsidies are WTO-compliant and reasonable. I believe we should refine WTO subsidy rules, for instance, reactivating the non-actionable subsidies clause and negotiating stronger and more clear disciplines related to non-actionable subsidies. Fiscal spending by governments to fight with climate warming should be encouraged, while upholding the non-discrimination principle and reducing trade distortions. China’s previous subsidies for new energy vehicles were consumption subsidies. Tesla and other foreign-invested enterprises operating in China qualified for those subsidies, as did imported new energy vehicles. That stands in stark contrast to subsidies under the US Inflation Reduction Act, which contain local content requirements and provisions excluding Chinese inputs. China is continuously tightening disciplines on subsidies from local governments, with some requirements stricter than those under WTO rules. China’s economy is not perfect. We have a lot of problems to deal with. Therefore, we are clear that we must continue advancing economic reforms and high-level opening-up. Strengthening subsidy disciplines and ensuring subsidies are WTO-compliant and well-designed based on economic rationality helps improve the efficiency of China’s economy, promotes the development of a unified national market, and enhances the competitiveness of scale-intensive industries. China has a clear understanding of that.

Without consensus, the Chair’s Statement of the G20 Finance Ministers’ meeting called on the IMF and OECD to conduct research on data related to non-market policies and measures. I have some doubts about that. Do those non-market policies include tariff measures that seriously violate WTO rules and forced investment commitments under bilateral agreements such as the Turnberry Agreement? What about the numerous poison-pill clauses specifically targeting China and restricting China’s cooperation with third parties? What about bans on exporting high-end chips and lithography machines to China, plus measures coercing other countries to follow suit? And what about the use of technical measures to directly and totally block imports of a wide range of Chinese products such as drones, robots and inverters — are those NOT non-market policies and measures?

In the OECD subsidy database, subsidies that offset market distortions are treated the same as subsidies incorporating distorting local content requirements. That is just like treating medicine and poison as the same. Which direction such research is pointing to? Therefore, my doubts about OECD subsidy statistics are not merely technical; I have reservations about the entire research agenda and its direction.

Humanity faces many shared challenges at present: environmental and climate risks, income inequality, and inadequate global infrastructure. China hopes to cooperate with all the countries and international organizations to address those issues, and China has accumulated some experience in those areas. Notably, long-term government bond yields in some countries have recently climbed above 5%, and the global financial system faces substantial uncertainty in the period ahead. I believe that China can play an active role in responding to potential uncertainties and risks going forward. We need cooperation. On subsidies, better cooperation should consist of jointly identifying legitimate subsidies, prohibiting distorting subsidies inconsistent with WTO rules, and negotiating to improve subsidy rules. We should not mix medicine with poison together and should not pursue a research agenda headed in a wrong direction.

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Yuzhe He

A Critique of the OECD MAGIC Database of Industrial Subsidies and Related Reports: Fan CUI

On June 1, 2026, the Organization for Economic Co-operation and Development (OECD) released a report on its MAGIC (Manufacturing Groups and Industrial Corporations) database of industrial subsidies. One of the key takeaways is that China-based industrial firms appear to receive subsidies on a scale not matched by their competitors in any other economy, …

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4 months ago · 18 likes · 1 comment · Yuzhe HE

Pekingnology

Cui Fan: China Certainly Will Not Apologise for “Overcapacity”

In its 3 August Chaguan column, The Economist took aim at China’s defence against charges of “overcapacity”, arguing that Chinese firms owe much of their competitiveness to a system of state intervention in which “industrial might makes right…

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a month ago · 34 likes · 6 comments · Yuxuan JIA and Qingqu Yuan

Pekingnology

OECD's Subsidy-Centric Narrative of China’s Emerging Industries Is Increasingly Flawed and Outdated: CF40 research

On June 1, 2026, the OECD released a report titled OECD MAGIC Database of Industrial Subsidies. Its central argument is that Chinese firms receive far larger industrial subsidies than those in other economies, concentrated in emerging strategic industries such as solar, semiconductors and wind power…

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4 months ago · 26 likes · 9 comments · Yuxuan JIA and Zichen Wang

——Zichen, 3 pm, Tuesday, Oct. 13.

IELTS examinations administered by the British Council in the Chinese mainland have been disrupted for a fourth consecutive day, with further cancellations confirmed for October 13, according to a report published Tuesday morning by China National Radio (CNR), part of China’s state broadcaster, China Media Group.

CNR reported that on Monday evening, October 12, a British Council customer-service representative confirmed that the International English Language Testing System examinations scheduled for the following day had been cancelled. The representative reportedly said staff themselves had received the cancellation notice only at 8 p.m., before colleagues emailed affected candidates at 9 p.m.

The representative also reportedly acknowledged that the British Council could not confirm when examinations would fully resume. This was three days after the disruption began on October 10, when British Council-administered IELTS examinations were abruptly cancelled across many provinces, sometimes after candidates had already started their tests.

According to The Paper, a Shanghai-based news outlet, candidates at Soochow University were instructed to remove their headphones during the listening section. At Yangzhou University, one candidate had completed listening and answered three reading questions before the examination was terminated.

The disruption appears to have taken even the British Council’s Chinese institutional partner by surprise. On October 12, an employee answering the public hotline of China’s National Education Examinations Authority (NEEA), which cooperates with the British Council in organising IELTS examinations, told National Business Daily, a Chinese newspaper, that the cancellations had been decided unilaterally by the British organisation.

“We only heard about it when the examination was already halfway through,” the employee reportedly said, adding that the NEEA and the British Council were discussing arrangements for resuming examinations but had reached no definite decision.

The disorder has already had consequences for candidates beyond the immediate inconvenience of a cancelled test. The most acute cases involve IELTS One Skill Retake, which allows candidates who have already completed the four-component examination to retake just one section—listening, reading, writing or speaking—to improve their scores. Under IELTS rules, this opportunity is available only once, within 60 days of the original test.

For some candidates, examinations scheduled for October 12 or 13 represented their last opportunity to use that option.

A Beijing candidate interviewed by CNR said she had taken IELTS on August 15 and missed her university’s speaking requirement by just half a point. She subsequently spent two months preparing for a one-skill retake, only to learn that her examination had been cancelled at the end of her eligibility window. She said she would now have to retake all four components, while the deadline for her intended university language programme had already passed.

The cancellations have also come at a particularly sensitive time in the overseas university application cycle. October is a busy period for applications to universities in the United Kingdom, Hong Kong and Singapore, with many candidates planning to take IELTS shortly before submitting their applications. Examination slots are limited, and a cancelled session does not necessarily mean an immediate replacement is available.

According to Yicai, a financial news outlet, a candidate applying for a master’s programme at Hong Kong Polytechnic University faced an October 20 application deadline. After her October 11 examination was cancelled, the earliest replacement she could secure was October 18, requiring her to travel from Tianjin to Beijing. She was fortunate that the expected turnaround for results, on October 19, would still allow her to meet the deadline.

Such travel is hardly unusual. IELTS examinations are not available in every Chinese city or on every day, meaning many candidates must travel to another city and arrange transportation and accommodation in advance. A candidate interviewed by Sichuan-based Chuan Guan News had taken time off work and travelled by high-speed train from Nanchong to Chengdu for an October 11 examination. She received the cancellation notice only after she had arrived in Chengdu and checked into her hotel.

The British Council has promised refunds, and numerous candidates have confirmed receiving their examination fees back, as online snapshots of text messages received by test takers show.

But additional losses, including transportation, accommodation, time off work and the costs of rearranging applications, remain unresolved.

Initially, British Council customer-service representatives told Chinese media that no arrangements existed to compensate candidates for such expenses or give them priority access to replacement examination slots. In its October 13 report, CNR said a representative acknowledged that compensation arrangements were still under discussion, with no decision reached. Candidates were advised to submit their claims by email, although responses could be delayed because of the volume of correspondence.

Chinese lawyers interviewed by Yicai and other outlets argued that an examination provider’s technical failure would not ordinarily constitute force majeure under Chinese law, and that affected candidates could have grounds to claim reasonable, documented losses beyond their examination fees.

The disruption has not affected all IELTS examinations in China. IELTS is jointly owned by the British Council, IDP Education and Cambridge English, with the British Council and Australia’s IDP separately administering examinations. IDP confirmed to Chinese media that its Chinese examination centres were operating normally and announced additional examination slots for October 17–31, with bookings opening on October 12.

As of the morning of October 13, the British Council had offered no detailed explanation of the technical failure, no figures on the scale of the disruption, and no timetable for resuming examinations, according to Chinese media reports. While customer-service representatives have apologised to callers, no formal institutional apology or comprehensive compensation plan has been reported, leaving candidates uncertain about their rescheduled exams, expiring retake eligibility, and financial losses. (Enditem)

The East is Read has previously published an analysis released by the South China Sea Strategic Situation Probing Initiative (SCSPI), arguing that Japan and the Philippines had yet to demonstrate that their proposed delimitation area could be separated from China’s maritime claims.

In the article below, Hu Bo, Director of SCSPI and Research Professor and Director of the Centre for Maritime Strategy Studies at Peking University, argues that the Japan–Philippines maritime delimitation initiative is unlikely to achieve much in practice, whether or not the two countries eventually reach an agreement. He maintains that China nevertheless has legitimate grounds to respond, both to safeguard its maritime rights and to assert its position as an interested party.

The article was published in Issue 10, 2026 of 现代舰船 Modern Ships, a magazine run by China State Shipbuilding Corporation Limited (CSSC)’s in-house think tank.

日菲海域划界谈判及中国的反应

Japan–Philippines Maritime Delimitation Talks and China’s Response

The Japan–Philippines initiative to pursue maritime delimitation talks clearly has an even more sinister motive: to further advance the “de-Sinicisation” of Taiwan through such practices.

On May 28, 2026, Japan and the Philippines upgraded their bilateral relationship to a “Comprehensive Strategic Partnership” in Tokyo. The same Joint Statement also outlined the initiation of formal negotiations to delimit the boundary between their respective exclusive economic zones and continental shelves.

China’s Ministry of Foreign Affairs responded by stating that “the area involved in their planned talks is east of China’s Taiwan island. According to China’s domestic law and international law including UNCLOS, China has exclusive economic zone and continental shelf in this area… Any delimitation concerning waters to the east of Taiwan must have China as a party to the talks. Japan and the Philippines’ attempt to bypass China and initiate the so-called maritime delimitation talks constitutes a severe violation of UNCLOS and other international laws and basic norms governing international relations. It also seriously infringes on China’s maritime rights and interests.”

China’s Ministry of Transport then mobilised maritime administration, navigation support, and rescue resources to launch a special maritime traffic law enforcement operation in waters east of Taiwan Island. The China Coast Guard also announced regular law-enforcement patrols in the relevant waters.

Taiwan’s east coast forms a continuous main coastline facing the Philippine Sea Basin. Japan’s potential maritime claims in the area are based primarily on the Sakishima/Yaeyama island chain, while the Philippines bases its claims on the Batan Islands to its north and its archipelagic baselines. The maritime claims of Japan and the Philippines in this area, including where they overlap, inevitably involve the maritime rights and interests of China’s Taiwan region. In effect, the maritime claims of China, Japan, and the Philippines intersect and overlap east of Taiwan. By abruptly announcing delimitation negotiations without consulting China, Japan and the Philippines have shown a profound disregard for China’s rights, inevitably provoking a strong response from Beijing.

Japan’s Chief Cabinet Secretary Minoru Kihara stated that even if Japan and the Philippines reached an agreement on their maritime boundary, it “would not be legally binding on third parties”. Philippine President Ferdinand Marcos Jr. described the negotiations as “essentially a bilateral discussion between Japan and the Philippines”. Such statements suggest that the talks would cover only overlapping Japanese and Philippine claims, not areas also claimed by China’s Taiwan region.

In theory, based on the current maritime claims of Japan, the Philippines, and China’s Taiwan region, there is only a very small area where Japanese and Philippine claims overlap without involving waters claimed by China. However, the relevant coastlines and baselines, the capacity of islands to generate maritime entitlements, and the potential reach of maritime claims projected from a third party’s coast all affect the limits of what the two countries are entitled to delimit between themselves. In practice, it is difficult to determine whether China’s claims can be clearly separated from the area subject to Japan–Philippines maritime delimitation negotiations.

If Japan and the Philippines continue to exclude Beijing and proceed towards a final delimitation without demonstrating that the waters they intend to delimit can be separated from those claimed by China, they would not only violate international legal obligations of good faith, cooperation, and restraint, but could also infringe upon China’s maritime rights east of Taiwan Island, potentially constituting an internationally wrongful act.

Whatever the outcome of the Japan–Philippines delimitation talks, it must not infringe upon China’s legitimate rights. There are essentially two possible scenarios. In the first, the negotiations struggle to make progress and ultimately come to nothing. This is highly likely, given the extremely expansive maritime claims made by both countries. Although Japan and the Philippines are seeking closer strategic ties to contain China, resolving even the many technical issues involved in maritime delimitation would be unrealistic in the short term. The initiative to launch these talks came rather abruptly in both countries and was, to a considerable extent, an impulsive decision made privately by Sanae Takaichi and Ferdinand Marcos Jr. themselves. Whether the initiative can be sustained as domestic political circumstances change in either country remains uncertain.

In the second scenario, the two countries reach an agreement and establish a maritime boundary. Under international law and established practice, however, such an agreement cannot bind other interested parties and would therefore have no legal effect on China. This has left many international experts questioning what practical purpose the Japan–Philippines maritime delimitation talks could serve beyond provoking Beijing.

The fact that such an agreement would not be legally binding on China does not mean that China has no grounds to respond. First, as an interested party, China cannot simply remain silent. Making diplomatic representations and lodging protests, requesting consultations, refusing to recognise coordinates that prejudge the outcome, publicly stating its position and gathering evidence are all established peaceful means of preserving its rights.

Second, the China Coast Guard and China’s maritime authorities can conduct patrols and inspections, protect fisheries, carry out rescue operations, and maintain orderly navigation and maritime activities in accordance with domestic law. Such measures also serve to preserve China’s rights, establish the facts, and exercise jurisdiction over the relevant waters and activities. There would seem to be little reason to object to them.

Finally, the actions of Japan and the Philippines undoubtedly constitute a major provocation against China. A response from Beijing through diplomatic, military, and legal channels is therefore entirely understandable.

The Japan–Philippines initiative to pursue maritime delimitation talks clearly has an even more sinister motive: to further advance the “de-Sinicisation” of Taiwan through such practices. Given the increasingly negative developments in Japan’s and the Philippines’ recent approaches to the Taiwan question, China’s response is even less surprising.

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Pekingnology

Hu Bo: The Philippines’ Overblown Ambitions for Huangyan Dao/Scarborough Shoal

In the first episode of Deep Blue Dialogue, the South China Sea Strategic Situation Probing Initiative (SCSPI) launches its new online video series with an interview discussing the ongoing tensions between China and the Philippines surrounding Huangyan Dao (Scarborough Shoal…

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10 months ago · 8 likes · 2 comments · Yuxuan JIA and WEI Lai

PBOC’s View on the RMB Exchange Rate

October 2026

The RMB exchange rate, as an important price in the financial market, has been a subject of attention for a lot of people, with increasing discussions recently. Against this backdrop, the People’s Bank of China (PBOC) hereby shares its view on the RMB exchange rate as follows:

● China adopts a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies. Market forces play a decisive role in determining the RMB exchange rate.

● The RMB exchange rate has floated in both directions over the past two decades. It has experienced several cycles of appreciation and depreciation since 2010, with more pronounced two-way floating and greater flexibility.

● China’s trade growth is driven by its growing industrial competitiveness in the global market. China has no need or intent to gain competitive advantages through currency devaluation, nor has it ever resorted to competitive devaluation.

● Exchange rate dynamics are driven by a number of factors including economic growth, monetary policy, financial market, geopolitics and sudden shocks. There is no straightforward relationship between exchange rate and current account.

● There is no well-established methodology for evaluating the equilibrium level of exchange rates internationally. Therefore, citing idiosyncratic assessment findings as “official evidence” for RMB undervaluation is a misinterpretation and misuse of those findings.

● Global economic imbalances are deeply intertwined with shifting global division of labor, inherent flaws in the international monetary system, and persistently high fiscal deficit and high consumption in some countries. Addressing global imbalances requires collective actions from all stakeholders. Attributing one’s decline in industrial competitiveness, weakened fiscal discipline, and complicated structural issues simply to others’ exchange rates is nothing but shifting the responsibility for adjustment onto others and dodging accountability.

● China has long been a contributor to global economic rebalancing. During the 15^th Five-Year Plan period, China will stay the course in transforming its economic growth model, expand domestic demand, improve business environment, deepen the high-standard opening up, and pursue a more open, inclusive and balanced global economy.

Ⅰ.China’s exchange rate regime

The market-oriented reform of the RMB exchange rate regime is an important part of China’s efforts to build a socialist market economy. China has a firm and consistent commitment to advancing the reform. The Third Plenary Session of the 14^th Central Committee of the Communist Party of China (CPC) in 1993 proposed establishing a managed floating exchange rate regime based on market supply and demand. The Third Plenary Session of the 16^th CPC Central Committee in 2003 called for improving the RMB exchange rate formation mechanism. In 2005, China deepened the market-oriented reform of the RMB exchange rate formation mechanism, and then in 2013, the Third Plenary Session of the 18^th CPC Central Committee made important arrangements for further improving it. As China is a major economy, a market-oriented exchange rate mechanism is aligned with China’s strategic interests and development needs, and also provides solid support for enhancing monetary policy autonomy and effectiveness.

China adopts a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies. This regime has the following features:

First, market forces play a decisive role in determining the exchange rate. After years of development, a fully functional multi-tiered foreign exchange (FX) market has gradually taken shape in China, with growing market depth and breadth. Market participants take part in FX trading based on commercial considerations and their own judgment. Market supply and demand plays a decisive role in determining the RMB exchange rate. The PBOC maintains exchange rate flexibility and two-way floating. It neither targets a specific level for the RMB exchange rate, nor seeks to determine its longer-term trajectory. The PBOC has phased out regular intervention in the FX market since 2017.

Second, the focus is laid upon preventing short-term fluctuations in the exchange rate from undermining financial stability, in particular sharp depreciation within a short time. Under certain circumstances where exogenous shocks hit the country, such as the sudden outbreak of the pandemic and the tariff war in April 2025, the PBOC will use macroprudential tools to guide expectations, or even market interventions in extreme cases, to correct herd behavior and irrational market expectations, in particular the self-reinforcing irrational expectations for depreciation, to prevent disruptive short-term overshooting of the exchange rate.

Such measures are consistent with international rules and practices. For example, during the 2008 global financial crisis, some emerging economies experienced sharp fluctuations in their currencies, so they intervened in the market to stop excessive currency depreciation from triggering financial risks. In July 2026, the Japanese yen hit its 40-year low against the US dollar, prompting joint intervention by relevant countries.

Third, the exchange rate policy has become more transparent. Since its subscription to the International Monetary Fund’s (IMF) Special Data Dissemination Standard (SDDS) in 2015, China has released balance of payments and related foreign exchange data in line with higher international standards, with greater granularity and higher frequency. In response to the IMF’s call for greater transparency, China will start reporting foreign exchange operation data to the IMF in 2027.

Ⅱ.RMB exchange rate movements

The RMB has moved in both directions since the exchange rate regime reform in 2005, and has remained strong among peers. In bilateral terms, the RMB has strengthened against the US dollar from 8.27 per dollar in July 2005, when the reform was launched, to around 6.7 per dollar recently, appreciating by 23 percent cumulatively. In multilateral terms, the RMB nominal effective exchange rate (NEER) calculated by the Bank for International Settlements (BIS) has appreciated by over 50 percent since the exchange rate regime reform in 2005, while its real effective exchange rate (REER) up by 35 percent.

The RMB exchange rate has experienced several cycles of appreciation and depreciation since 2010, with more pronounced two-way floating and greater flexibility. The RMB went through three appreciation-depreciation cycles against the US dollar, trading broadly within the range of 6.04 to 7.35 per dollar. In each cycle, the magnitude of change, be it to the upside or downside, both exceeded 10 percent.

The RMB exchange rate has floated in both directions and appreciated in an orderly manner since 2025. The RMB has strengthened by about 9 percent against the US dollar since 2025. In particular, while non-dollar currencies have weakened broadly amid surging US dollar index and Treasury yields since 2026, the RMB has extended its upward trend against the dollar. Looking forward, the RMB exchange rate is shaped by a diverse array of drivers. There are both factors pushing for appreciation and depreciation, and there are still uncertainties surrounding the RMB’s trajectory.

Ⅲ. China has no need or intent to gain trade competitive advantages through currency devaluation

China’s trade growth is driven by its growing industrial competitiveness in the global market. In history, most major surplus countries boasted strong industrial competitiveness. China’s trade growth is built on four decades of reform and opening up, supported by a super-large market, a complete industrial chain and infrastructure ecosystem, abundant, high-caliber and diligent labor resources, as well as sustained R&D and innovation capacity. Apart from China, some other economies have also seen a rapid increase in exports, driven by goods that cater to global demand, rather than by currency devaluation.

Empirical evidence didn’t suggest that RMB appreciation in the past negatively affected China’s trade expansion, nor did RMB depreciation contribute to an increase in exports. The RMB strengthened against the US dollar by 21 percent from 2005 to 2008, by 10 percent from 2010 to 2014, and by 9 percent from 2020 to 2021. Despite a stronger currency, China’s share in global exports still rose by 2.4, 2.8, and 1.7 percentage points in the corresponding period. By contrast, the share fell in 2016 and 2022, each by 0.7 percentage points, though the RMB depreciated by 7 percent and over 8 percent against the US dollar, respectively.

In recent years, China’s trade has become significantly less sensitive to exchange rate movements, which is an important structural change. In terms of trade structure, China’s export structure has been upgrading from labor-intensive low-end products to diverse mid-to-high-end products. In the past five years, China’s exports and imports of high-tech products grew at an average annual rate of 7.9 percent, and the year-on-year growth rate rose to 11.4 percent in 2025, contributing nearly 60 percent to the growth of total trade. Chinese exporters are no longer merely price takers. Instead, they are now deeply integrated into global supply chains, and can share the costs of exchange rate fluctuations with upstream and downstream firms. In terms of trade-related financial services, a growing number of exporters and importers now proactively hedge against exchange rate risks. At present, about 30 percent of trade is settled in RMB, and around 30 percent of export and import firms deploy FX hedging tools, further reducing the sensitivity of trade to exchange rate movements. These numbers are expected to rise further in the future.

China is a responsible country. It had never resorted to competitive currency devaluation or RMB depreciation to boost exports to offset intensive external shocks in the past. During the Asian financial crisis in the 1990s, some countries saw their currencies depreciate significantly, but the Chinese government pledged no depreciation of the RMB, a commitment that proved instrumental in safeguarding regional economic and financial stability. During the global financial crisis in 2008, many currencies slid sharply against the US dollar, but the RMB remained broadly stable. In recent years, while most non-dollar currencies were under considerable depreciation pressure as a result of trade war and in response to aggressive rate hikes by the Federal Reserve, the PBOC has made great efforts to prevent the RMB from excessive depreciation by adopting a host of macroprudential measures.

Given the sheer size of today’s global FX market, it is very difficult to conduct sustained intervention in the market and make a meaningful impact. In 2025, the average daily trading volume in the global FX market was close to $10 trillion, and the average daily trading of the RMB exceeded $800 billion, around 80 percent of which took place in the offshore market. Exchange rate is shaped by each and every transaction in the marketplace. No central bank can be expected to affect the underlying trend of exchange rate, and no country can be expected to boost its trade competitiveness through sustained currency devaluation.

Ⅳ. There is no straightforward relationship between exchange rate and current account

An exchange rate is the price of one currency in terms of another, and it is driven by a number of factors including economic growth, monetary policy, financial market, geopolitics and sudden shocks. Therefore, when assessing exchange rates, one should not only look at trade in goods, but also trade in services; not only current account, but also financial account; and not only economic fundamentals, but also market expectations and other factors.

In terms of trade channel, it did play an important role in history in determining exchange rates. Yet, as financial liberalization and globalization continued to advance after the collapse of the Bretton Woods system in the 1970s, volume of global trade dropped from about 1/35 of global FX transactions in the 1990s to around 1/70 in 2025. The correlation between trade and exchange rate is constantly on the decline.

In terms of financial channel, since the early 2000s, as the size of world’s financial assets has continued to grow, valuation changes and cross-border asset allocation is having an increasing impact on global imbalances and greater spillover effects. History has shown that sharp swings in the exchange rates of emerging markets were, in most cases, triggered by capital flows under the financial account. The exit of quantitative easing (QE) in the US from 2014 to 2016, and the aggressive monetary tightening by central banks in the US, Europe, and other advanced economies after 2022 both led to capital outflows and currency depreciation in emerging markets. In the first half of 2026, South Korea’s current account surplus widened significantly amid artificial intelligence (AI) boom, but the Korean won continued to slide, just another example of capital flow-induced depreciation. Over the same period, the Japanese yen had also been losing ground, despite an increase in Japan’s current account surplus.

In terms of expectations channel, tariff threats faced by China escalated significantly as a result of trade war in 2025, which seriously affected market expectations. The RMB exchange rate came under strain, despite a relatively large current account surplus during the same period. Recently, the back-and-forth between the US and Iran over the navigation issue in the Strait of Hormuz has again heightened market uncertainty. Any news of escalation in tensions could trigger a surge in global oil prices and currency depreciation in some oil-importing economies.

In practice, there is no straightforward relationship between exchange rate and current account. On the one hand, current account surplus does not necessarily imply currency undervaluation and the need for appreciation. In recent years, many current account surplus countries, including Japan, Switzerland and Germany, have seen their currencies depreciate. In China’s case, capital inflows from current account surplus are reallocated globally through outward investments by firms and banks, and the balance of payments has remained broadly balanced. Therefore, current account surplus does not automatically push up the value of local currency. On the other hand, current account deficit does not necessarily pull down the value of local currency. The US has long run a large current account deficit, yet the US dollar has remained strong.

Ⅴ. There is no well-established methodology for evaluating the equilibrium level of exchange rate

A number of models for assessing the equilibrium exchange rate have emerged from academic studies over the years. These models are built on different theoretical foundations, data sources, parameter settings and econometric methods. Plus, exchange rate dynamics are driven by many forces, often in complex ways. Therefore, objectively speaking, pinning down a precise equilibrium level is a formidable task, as assessment results from different models often vary widely. And this may explain why no compelling conclusion has been reached yet so far.

Citing the IMF’s External Balance Assessment (EBA) results as evidence for RMB undervaluation is misinterpretation and misuse of the findings. It reflects a misconception due to insufficient professional understanding of exchange rate. In fact, the EBA is primarily positioned as a tool for analyzing external imbalances rather than a dedicated model for estimating the equilibrium exchange rate. It consists of three modules: the Current Account Model, the REER Model, and the External Sustainability Approach. The Current Account Model, which sits at the heart, seeks to estimate the current account gap through econometric modelling, and building on this, works backwards to estimate the degree of misalignment in the REER. It implicitly assumes a linear causal relationship between current account and the REER. In addition, the IMF has built the REER Model that adopts index-based and level-based estimation models. However, the above three models often produce sharply divergent or even opposite results, suggesting that no single method is sufficiently reliable on its own.

EBA assesses the REER, and the result should not be misinterpreted as a view on the nominal exchange rate. The REER is determined by both the NEER and relative prices at home and abroad. It is therefore more a reflection of macroeconomic and structural forces such as supply and demand. Yet some views, whether deliberately or not, have framed the IMF’s EBA results to point to the RMB nominal exchange rate, even the bilateral exchange rate of the RMB against the US dollar, and used such findings as “official evidence” to make arbitrary remarks on the exchange rate level. In fact, the IMF’s policy recommendations to China focus on structural adjustments such as actively expanding domestic demand—not on pushing RMB appreciation.

It warrants attention that while the EBA methodology is relatively transparent and iterative, it also faces challenges. For example, the latest EBA model, which spans 40 years and covers 52 economies, has increased the sample size considerably. Over the sample period, the global economy and the industrial structure of sample economies have undergone major changes, but the model fails to account for structural shifts and differences across time and across economies in its parameter settings and econometric tests. Another example is that adjusting the variables in the existing model produces markedly different results, indicating that the model’s robustness can be further improved. In addition, large residuals suggest that the model leaves a substantial part unexplained, and point to room for improving the explanatory power. Overall, the results of such econometric models may inform academic discussion, but they cannot serve as a definitive basis for assessing external imbalances or equilibrium exchange rates.

Ⅵ. Reducing global imbalances calls for collective actions from both deficit and surplus countries

Global economic imbalances are driven by a confluence of factors, such as shifts in the industrial division of labor, inherent flaws in the international monetary system, and the savings-investment gap in each economy. They are not caused by surplus countries or deficit countries acting alone. Therefore, reducing global imbalances calls for collective efforts from all.

In history, major industrial countries all ran a current account surplus at some point. In the 1950s and 1960s, the US posted the largest surplus in trade in goods, with its manufacturing value added representing approximately 40 percent of the global total. Since the 1970s and 1980s, adjustments in the global division of labor have driven the shifts in current account surplus landscape, first from Japan and Germany to the Four Asian Tigers, and then to China, ASEAN countries and other economies. As the share of manufacturing in Germany’s and South Korea’s GDP is higher than the global average, they have also run a persistent current account surplus.

The fact that there are different surplus countries, while the key deficit country remains unchanged is deeply embedded in the current international monetary system. In the international monetary system with one dominant sovereign currency, the issuing country of the reserve currency can achieve debt build-up and fiscal expansion, and sustain high consumption and a low savings rate for a prolonged period. This will not only result in a stubborn trade deficit, but also weaken fiscal discipline and manufacturing competitiveness, increasing fiscal and balance of payments risks.

Declining trade competitiveness in some countries, more often than not, reflects their own structural problem. Persistently high energy prices, elevated manufacturing costs, lagging infrastructure, regulatory rigidity, underinvestment in innovation and digitalization, and path-dependent industrial development, among others, are the causes for declining industrial competitiveness in some economies.

Each country should do its own homework by advancing structural reforms. Deficit countries should consolidate fiscal positions, raise domestic savings rates, and strengthen industrial competitiveness, while surplus countries should boost consumption and investment. To blame the RMB exchange rate for the embedded problems in the international monetary system and structural difficulties will not help find a solution. Such an act is nothing but an avoidance of responsibility for adjustment, and it is a de facto political maneuver in the context of protectionism and unilateralism.

Medium and long-term policy commitments are what helps to stabilize expectations. Countries should map out medium and long-term policy plans, with explicit commitments and the resolve to deliver, and avoid policy flip-flops. It is unrealistic to expect that embedded structural issues in the global economy can be resolved in a short span of one or two years, and a U-turn in policy might even be counterproductive. For instance, the global tariff war in 2025 triggered the front-loading of imports, which exacerbated imbalances and undermined global economic growth.

Ⅶ. China is actively transforming its economic growth model, and pursuing a more open, inclusive and balanced global economy

The global economy has undergone several major rebalancing episodes since the beginning of this century. Each time, China was deeply engaged and made important contributions. From 2001 to 2007, China effectively expanded global supply following its accession to the World Trade Organization, which helped curb global inflation. In the wake of 2008 global financial crisis, China vigorously boosted domestic demand, and managed to maintain its contribution to global economic growth at around 30 percent, becoming a major growth driver and helping avert global deflation. During the Covid-19 pandemic, global inflation surged. China’s proactive efforts to keep supply chains stable contributed to global disinflation and economic rebalancing.

During the process, China’s economy also went through profound structural adjustments and dynamic balancing. China’s current account surplus as a percentage of GDP fell sharply from its peak of 9.9 percent in 2007. The contribution of consumption to economic growth rose from 37 percent in 2010 to 52 percent in 2025, providing a strong boost to global economic rebalancing.

China remains committed to the strategic direction and priorities set out in the 15^th Five-Year Plan. It will press ahead with the transformation of economic growth model, expand domestic demand, and pursue high-standard opening up, to contribute to the new round of global economic rebalancing. Guided by the strategy of expanding domestic demand, China will boost consumption, scale up effective investment, combine investment in physical assets with investment in human capital, and strengthen the domestic economic circulation while promoting unimpeded domestic and international economic flows. China will improve its business environment to create a level playing field for all market entities, and harness sci-tech innovation to raise productivity. To make growth more inclusive, China will focus on increasing disposable income for residents and households, and improve income distribution and social security system. China will steadily expand high-standard opening up. Building on its role as a global manufacturing powerhouse, China will expedite its endeavor to become a major global demand hub. The vast consumer market here in China will offer new opportunities for the rest of the world. China will also strengthen international economic and financial cooperation, actively take part in and advance global financial governance reform, and safeguard global economic and financial stability.

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Liu gave an interview to Yicai, the financial news arm of Shanghai Media Group, on the sidelines of the China International Fair for Investment & Trade (CIFIT), held from 8 to 11 September 2026.

The following is a translation of an excerpt from the interview. CCCEU has reviewed and agreed to the publication.

欧盟中国商会会长刘坚东：中企投资欧洲的挑战已发生明显变化｜对话投洽会

Liu Jiandong, Chairman of the China Chamber of Commerce to the EU: The Challenges Facing Chinese Investment in Europe Have Clearly Shifted | A CIFIT Conversation

The Realities and Room in China-EU Economic and Trade Cooperation

Yicai: From your vantage point on the ground in Europe, how would you describe the current operating environment for Chinese enterprises in the EU? How has it changed compared with the past few years?

Liu Jiandong: Europe remains a key destination for Chinese investment.

Compared with other regions, Europe has several distinctive strengths. First, it has a highly mature consumer market of considerable scale. Second, its industrial and supply chains are well developed, as is its infrastructure. These features make Europe highly attractive to Chinese enterprises.

Chinese companies are also entering a new phase in their global operations. In the past, the focus was largely on exporting products; today, they are increasingly operating on a global basis. Europe’s strengths make it an important overseas market for Chinese enterprises and provide favourable conditions for them to integrate more deeply into global industrial and supply chains.

It is precisely this shift that has brought new changes to the business environment Chinese companies face in Europe. In the past, the main question was whether they could gain access to the market. Today, the focus has increasingly shifted to whether they can develop there in a more stable, sustainable, and compliant manner.

Every year, the China Chamber of Commerce to the EU (CCCEU) publishes its flagship annual Report on the Development of Chinese Enterprises in the EU. In the latest survey, 81 per cent of respondents said uncertainty in the EU business environment had increased. Across the seven years in which the CCCEU has published the report, this indicator has deteriorated for six consecutive years.

Overall, a series of EU policies have had a tangible impact on businesses. CCCEU survey found that 40 per cent of Chinese enterprises had experienced some degree of differential treatment because they were Chinese companies. The situation may need to be assessed from a broader range of perspectives, but there is no doubt that this perception among businesses is real.

The most pressing issue, therefore, is how Chinese enterprises in Europe can adapt to major changes in the international environment and respond effectively to the challenges arising from various policies. As many companies noted at CIFIT, compliance remains fundamental: businesses need to ensure that their operations are fully compliant as they pursue further development.

Yicai: As the EU steps up efforts to develop strategic industries, Chinese greenfield investment in Europe, including in sectors such as new-energy vehicles, has also been increasing. How can such investment create more room for mutually beneficial China-EU industrial chain cooperation while serving the development interests of both sides?

Liu Jiandong: From a broader trade and economic perspective, Europe’s biggest concern is not simply losing market share. At a deeper level, there is anxiety about losing control over core technologies and key industrial chains. Going forward, the two sides will need to find a better balance by building two-way cooperation in both technology and markets.

Companies certainly need to protect their core intellectual property, but commercial cooperation also involves technology collaboration and building on each other’s strengths. As the theory of comparative advantage suggests, even if some countries are ahead in particular fields, that does not leave no room for cooperation. Countries can still work closely together by drawing on their respective comparative advantages.

One of the biggest challenges for the EU at present is adjusting to this shift in roles. In the past, China-EU economic and trade relations largely involved Europe bringing capital, technology, and management expertise to China. Today, the comparative advantages of the two sides are shifting in some cutting-edge sectors. European businesses and policymakers will inevitably need time to come to terms with and adapt to this change. For Chinese companies, however, investing in Europe is about deeper cooperation and sustainable development, not about trying to dominate the market.

As the two sides adjust to this shift, some uncertainty, friction, and defensiveness on the European side are inevitable. It is therefore crucial to build mutual trust through tangible, mutually beneficial outcomes and sustained communication. Trust is essential to moving beyond the current tensions, and it can only be built through practical cooperation and long-term dialogue. As long as the two sides can identify where their interests align, China-EU cooperation in new energy and other industries can generate strong momentum and lasting benefits.

How Chinese Enterprises Can Build Deeper Roots in Europe

Yicai: As conditions overseas continue to evolve, how does the Chamber help Chinese enterprises adapt to and integrate more effectively into local markets? Looking ahead, what will be most important for Chinese companies in Europe to demonstrate the mutual benefits they can bring?

Liu Jiandong: I believe there are five key areas.

First, Chinese companies in Europe need to deliver tangible economic benefits through cooperation. The growth of Chinese enterprises must be closely tied to local interests. Chinese companies in Europe currently support 260,000 jobs directly. In areas such as green and low-carbon development, new energy, technological innovation, and advanced manufacturing, the two sides have complementary strengths that can make a tangible contribution to local economic growth, jobs, and livelihoods.

Second, companies need to objectively assess and understand local rules and culture. Once operating in Europe, businesses must have a clear grasp of employment policies, compliance requirements, and market-entry rules, rather than relying on assumptions drawn from past experience. They also need to assess policy developments rationally, without overstating their impact or creating unnecessary alarm. The key is to judge their actual effects objectively.

Third, companies need to keep strengthening their compliance and risk-management capabilities. Regulation in Europe is becoming more stringent, and businesses will struggle to operate effectively if their compliance and risk controls fall short of local standards. Taking chances or trying to exploit loopholes is simply not a viable approach. Long-term, stable development depends on operating lawfully and in full compliance.

Fourth, companies should put the principle of “in Europe, for Europe” into practice and become more deeply integrated into local communities. Localisation means more than hiring local employees; it also means engaging with local communities and culture and moving beyond an “outsider” mindset.

For example, the Bank of China (Europe) regularly arranges study visits and training programmes in China for outstanding local employees. After experiencing China first-hand, many of them return home and voluntarily share a more accurate and well-rounded picture of the country within their own communities. Messages conveyed by local people themselves are often more persuasive, while these experiences also significantly strengthen employees’ sense of belonging and loyalty to the company.

Fifth, companies should make effective use of legal channels to defend their legitimate rights and interests. They need not only to understand the rules, but also to be prepared to make their case when they encounter unfair treatment and to defend their rights in accordance with the law. The Chamber will continue to serve as a bridge and source of support for Chinese enterprises operating overseas.

Yicai: On 11 February 2026, the website for China’s national comprehensive overseas service was launched, bringing together legal, fiscal, financial, and foreign-affairs resources. As an organisation representing Chinese enterprises in Europe, what practical value does the platform bring to companies operating overseas? And how does the Chamber plan to coordinate its resources with the platform?

Liu Jiandong: The Chamber has actively participated in and promoted the development of comprehensive overseas service stations and plays an important role in providing integrated services to enterprises. Many of our existing practices and initiatives are closely aligned with the Ministry of Commerce’s approach to developing the national one. The core objective is to address a longstanding challenge facing companies going global: having to operate largely on their own and navigate unfamiliar markets without sufficient support.

Going forward, the Chamber’s coordination with the national comprehensive overseas service will focus on three main functions.

First, providing comprehensive services across the full business cycle. One of the Chamber’s core tasks is to help companies connect with and integrate local business and investment resources, while also organising specialised training and professional support on newly introduced laws and regulations. In the future, the Chamber will also work with qualified third-party providers in legal, tax, and fiscal affairs to offer companies market assessments, policy guidance, and end-to-end advisory services.

Second, strengthening communication and policy advocacy at multiple levels. Internally, the Chamber systematically collects companies’ concerns and needs. Externally, it works to maintain effective high-level channels for dialogue between government and business.

When the EU introduces major policies, the Chamber conducts detailed assessments of their potential impact on Chinese enterprises. It also conveys, in a timely, structured, and forceful manner, the practical concerns and difficulties faced by Chinese companies in Europe. For example, the Chamber put forward 336 policy recommendations in its Report on the Development of Chinese Enterprises in the EU 2025/2026.

At the same time, the Chamber is deepening exchanges with the Chinese and European business communities, academia, and think tanks, building cooperative and symbiotic relationships with local enterprises, and encouraging more rational voices in public debate through greater mutual understanding.

Third, strengthening collective representation and rights protection. When companies face major policy risks, individual businesses often have limited influence on their own. In response to measures such as the EU’s anti-subsidy investigation into Chinese new-energy vehicles, the Chamber has worked through its Automotive Working Group to hold several rounds of direct talks with senior European Commission officials, giving Chinese companies a direct and authoritative channel through which to make their case.

Financial institutions are also playing an increasingly important supporting role. As Chinese companies go global, their needs are shifting from basic trade settlement towards globalised and asset-intensive operations. Demand has therefore risen sharply for services such as overseas cash pooling, cross-border fund transfers, and foreign-exchange risk management.

Bank of China, for example, has a service network covering 64 countries and regions. Through comprehensive services covering the full business life cycle, financial institutions are providing essential support for the stable and sustainable overseas development of Chinese enterprises.

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Pekingnology

Reading Beijing’s Signal to Brussels

A weekend article by Yuyuantantian, a social-media commentary brand operated by China’s state broadcaster China Central Television (CCTV), is worth reading not as a conventional news report but as a policy-adjacent signal. Its style is unmistakably Chinese social-media commentary: part reporting, part interpretation, part rhetorical flourish, part warni…

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4 months ago · 25 likes · 2 comments · Zichen Wang

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That difference in framing is important. Much of the outside discussion begins with the premise that Tokyo and Manila are conducting an essentially normal bilateral delimitation and then asks why China is objecting—and why Chinese survey vessels and coast-guard ships are appearing there. The article below, by Zheng Zhihua, starts from the opposite end of the problem: if, as Beijing maintains, Taiwan’s eastern coast generates Chinese maritime entitlements that overlap with those claimed by Japan and the Philippines, can the proposed boundary really be treated as an exclusively bilateral one? Its central argument is that, because no negotiating map, controlling base points, coordinates or endpoints have been made public, Japan and the Philippines have yet to demonstrate that the area they intend to delimit is legally separable from the maritime claims China derives from Taiwan.

Zheng Zhihua’s article offers a detailed reconstruction of the logic behind Beijing’s position: China regards its diplomatic protests, surveys and maritime patrols not as the opening move in a new dispute, but as measures intended to prevent an undelimited area from gradually hardening into bilateral coordinates, enforcement zones and eventually security arrangements from which China has been excluded. That is the argument worth understanding as activity east of Taiwan becomes an increasingly visible—and consequential—part of the region’s maritime politics.

The article was originally published by the South China Sea Probing Initiative (SCSPI) on 2 September 2026. The SCSPI is a research network directed by Hu Bo, research professor & director of the Center for Maritime Strategy Studies, Peking University.

SCSPI’s Editor’s Note:

This Article examines the legal and geopolitical implications of the 2026 decision by Japan and the Philippines to negotiate exclusive-economic-zone and continental-shelf boundaries in waters east of Taiwan. It asks whether the contemplated area is legally separable from China’s claims, whether a bilateral line could prejudice third-party rights, what responses remain open to China, and which actor is altering the status quo. Beginning from the principle that the land dominates the sea, the Article argues that coastal projections from Taiwan’s eastern coast, Japan’s Sakishima/Yaeyama Islands, and the Philippines’ Batanes Islands may substantially overlap. The fact that Japanese and Philippine features lie less than 400 nautical miles apart establishes a possible bilateral overlap, but not an exclusively bilateral geography; continental-shelf entitlements may also extend beyond 200 nautical miles under Article 76 of UNCLOS. Because Japan and the Philippines have disclosed neither a negotiating map nor controlling base points, coordinates, or endpoints, they have not demonstrated the separability of the proposed delimitation area.

Although a bilateral treaty cannot bind China without its consent, a fixed endpoint and the incorporation of coordinates into charts, licences, enforcement practices, or security arrangements could prejudice China’s legal and practical position. International jurisprudence therefore supports geographic restraint, open endpoints, and effective non-prejudice safeguards. China may preserve its claims through diplomatic representations, protests, and maritime presence according international and domestic law. Finally, the parallel expansion of Japan–Philippines defense cooperation creates a risk of securitizing the boundary and may blur their one-China positions by implying who is entitled to represent Taiwan-facing coasts.

Zheng Zhihua, the author, is associate professor at the Japan Research Center of Shanghai Jiaotong University, and Head of the East Asia Marine Policy Project. He was appointed as Judge of Ningbo Maritime Court in 2004. He got qualification for admission to the Chinese Bar in 1998. He was a visiting fellow of St. John’s College at Oxford University, Institute of Maritime Law at Southampton University and Law Faculty at Göettingen University.

Why China Opposes the Japan–Philippines Maritime Boundary Process

2026-09-02 | Zheng Zhihua

On May 28, 2026, Japan and the Philippines upgraded their bilateral relationship to a “Comprehensive Strategic Partnership” in Tokyo. The same Joint Statement also outlined the initiation of formal negotiations to delimit the boundary between their respective exclusive economic zones and continental shelves. Concerning defense matters, the statement confirmed that the Reciprocal Access Agreement had entered into force and had already been utilized in exercises including Balikatan 41-26. Moreover, the two countries signed an Acquisition and Cross-Servicing Agreement in January of the same year, launching discussions on an agreement for the protection of classified military information and promoting transfers of defense equipment such as destroyers, TC-90 aircraft, and coastal radar systems. On May 31, the two defense ministers struck a deal to proceed with the transfer of decommissioned Abukuma-class destroyers and a TC-90 aircraft, while continuing consultations on personnel training, maintenance support, equipment management, and information cooperation.

The Japan–Philippines maritime delimitation process has thus unfolded in parallel with the development of the two countries’ defense mechanisms, joint operations, and maritime-capability cooperation. On June 2, the Ministry of Foreign Affairs of China stated that, as the contemplated waters lie east of Taiwan Island where China has an exclusive economic zone and continental shelf, China’s participation in the delimitation is indispensable; and that Japan and the Philippines, by commencing negotiations without China, had violated international law and infringed upon China’s maritime rights and interests. On June 6, the Ministry of Transport of China organized forces of maritime administration, navigation support, and rescue to launch a special law-enforcement operation targeting maritime traffic in waters east of Taiwan Island. The China Coast Guard subsequently announced regular law-enforcement patrols in the relevant waters. On August 14, Philippine President Ferdinand Marcos Jr. expected that the negotiations could be concluded by the end of the year, regarding no major obstacles and characterizing the contemplated agreement as essentially a “bilateral matter” between Japan and the Philippines.1

There arise five interrelated questions: Are Japan and the Philippines entitled to proceed unilaterally with the delimitation of exclusive economic zones and continental shelves in waters east of Taiwan? Is the contemplated Japan–Philippines delimitation separable from China’s claims? Would such a delimitation encroach upon or appropriate China’s exclusive-economic-zone and continental-shelf entitlements east of Taiwan Island? Is China entitled to make diplomatic representations and protests and to conduct maritime law-enforcement patrols in the relevant waters? And which side, ultimately, is attempting to change the status quo there?

I. The Claims of China, Japan, and the Philippines in Waters East of Taiwan Substantially Overlap

In maritime delimitation, “the land dominates the sea” is a fundamental principle: maritime entitlements are derived from the geographical projection of coasts. The relevant Japanese and Philippine land features are located less than 400 nautical miles apart. That fact may indicate that their respective maximum 200-nautical-mile entitlements overlap, but it does not mean that projections from other relevant coasts are excluded from that area.

Publicly available geographical materials show that Taiwan’s eastern coast is a long and continuous main-island coast facing the Philippine Sea Basin. Japan’s claimed entitlements would come principally from the Sakishima/Yaeyama island chain, while the Philippines relies on the Batanes Islands to its north and on its archipelagic baselines. If the Japan–Philippines boundary were extended westward or southwestward and enclosed the tripoint, the resulting cut-off could affect not only the projection of an isolated offshore island, but also the maritime space generated by Taiwan’s continuous eastern coast together with Orchid Island(Lan Yu) and Green Island(Lü Dao).2

Figure 1. Map of the 350-Nautical-Mile Limit East of Taiwan Source: Created by the author

Figure 2. Seafloor Topographic Map of the Waters East of Taiwan Source: Ocean Data Bank，https://www.odb.ntu.edu.tw/bathy/colorimages/(link is external)

Another issue concerns what kind of effect should be given, in a concrete delimitation, to relatively small islands such as Yonaguni, Ishigaki, Iriomote, Batan, Itbayat, and Sabtang against Taiwan’s continuous coast. Without such an assessment, no bilateral line segment drawn using those islands as basepoints can be proven to be equitable solely on the basis of geometric overlap.3 In addition, islands like Orchid Island and Green Island may also modify the local geographical relationship. If the same waters lie within the maximum potential entitlements of three sides, Japan and the Philippines must demonstrate that the contemplated segment does not necessitate a prior determination of the effect to be accorded to Taiwan’s relevant coasts. Likewise, placing the contemplated boundary “beyond 200 nautical miles from Taiwan” does not fully resolve the question.4 For the exclusive economic zone, 200 nautical miles may serve as an initial screening criterion. For the continental shelf, however, entitlements that meet the requirements of Article 76 of UNCLOS may extend beyond 200 nautical miles. It must also be clarified whether the 200 nautical miles are measured from the low-water line of Taiwan’s main island, from the applicable baselines, or from offshore islands. A cartographic arc drawn for convenience cannot replace a complete analysis of title, baselines, and relevant coasts.

Figure 3. Geological Map of the Gagua Ridge and Adjacent Areas Source: Qian, Shengping, et al. “First identification of a Cathaysian continental fragment beneath the Gagua Ridge, Philippine Sea, and its tectonic implications.” Geology 49.11 (2021): 1332-1336.

Figure 4. Map of the Overlapping 200-Nautical-Mile Zones East of Taiwan (Dark Purple Indicates the Overlap of the 200-Nautical-Mile Zones of China, Japan, and the Philippines) Source: Created by the author

II. Japan and the Philippines Have Not Demonstrated That the Contemplated Delimitation Area Is Separable from China’s Claims

In waters potentially subject to projections from more than two coasts, separability marks the outer boundary of bilateral disposition. Japan and the Philippines may only dispose of an area where their respective potential entitlements with legal basis overlap and is separable from third-party rights. That area cannot be determined simply by drawing two complete 200-nautical-mile arcs and treating their intersection as legally homogeneous. The relevant coasts, applicable baselines, the capacity of islands to generate maritime zones, and possible projections from third-party coasts all affect the outer limits of the two countries’ competence to effect a bilateral disposition.

President Marcos characterized the contemplated agreement as “essentially a matter between Japan and the Philippines.” As of the evidentiary cut-off date for this Article, however, materials made public by Japan and the Philippines disclosed none of the following: a map defining the negotiating area, the baselines to be used, controlling base points, proposed endpoints, or a mechanism safeguarding third-party rights.

The information disclosed to date therefore indicates that Japan and the Philippines have not publicly established the complete factual foundation necessary to demonstrate separability. If they continued to exclude Beijing and proceeded to a final delimitation, they would not only breach international-law obligations of good faith, cooperation, and restraint, but could also infringe China’s maritime rights in waters east of Taiwan Island and potentially give rise to an internationally wrongful act.5

III. Prejudgments and Effects on Third-Party Positions and Interests

According to Reuters, Japanese Chief Cabinet Secretary Minoru Kihara stated that any maritime-boundary agreement reached by Japan and the Philippines would not be legally binding on third parties. Meanwhile, Philippine public statements emphasized that the negotiations would proceed in accordance with international law; President Marcos later characterized the contemplated agreement as essentially a bilateral matter between Japan and the Philippines.

Article 34 of the Vienna Convention on the Law of Treaties provides that a treaty does not create either obligations or rights for a third State without its consent. This rule addresses the issue of legal binding force: as a matter of law, a Japan–Philippines agreement cannot extinguish the rights of an absent party. However, it does not mean that the agreement cannot produce practical externalities. Maritime-boundary coordinates may be incorporated into official charts, fishing licences, resource blocks, coast-guard patrol instructions, and security-cooperation documents. Even if a third party is not legally bound by the agreement, it may nevertheless incur diplomatic, enforcement, and litigation costs in resisting those practical effects. International courts and tribunals employ approaches including open endpoints, formulas terminating a line before it reaches potential third-party interests, and non-prejudice safeguards precisely because formal non-opposability must be reinforced by self-restraint in both spatial scope and practical implementation.6 Credible third-party protection must therefore operate on at least four levels: the treaty text must expressly preserve third-party rights; maps must leave potential tripartite areas undelimited; endpoints must remain open to future adjustment; and law-enforcement activity, resource licensing, and security cooperation must not treat an undelimited line as an exclusive boundary.

In international adjudication, where a court would have to determine, as a prerequisite, an absent country’s international responsibility or legal rights, and if that determination constitutes the very subject matter of the case, the Monetary Gold principle precludes the court from proceeding without that country’s consent.7 Although the principle directly governs adjudicative proceedings, it offers a useful analogous screening criterion: a delimitation segment cannot become a purely bilateral matter merely through mutual consent between Japan and the Philippines.

IV. China Is Entitled to Make Diplomatic Representations and Protests and to Conduct Maritime Law-Enforcement Patrols in Relevant Waters

First, the stakeholder could ordinarily preserve its rights by making diplomatic representations and protests, requesting consultations, declining to recognize prejudicial coordinates, publicizing its positions, and collecting evidence. Second, it appears to be unexceptionable insofar as the China Coast Guard and China’s maritime authorities act in accordance with domestic law, conduct patrol and verification operations, carry out fisheries protection and rescue services, and maintain normal navigation and operational order while serving to reserve rights, establish facts, and perform jurisdictional functions relating to the relevant waters and subject matters.

An American think tank contends that Beijing inspected hundreds of merchant vessels that showed no indication of engaging in resource development or causing damage to resources in the seabed or water column. Such inspections infringed the rights of all countries using the area and interfered with commercial navigation. It accordingly accuses Beijing of violating UNCLOS and seeking to exercise broad and unprecedented jurisdiction over the area. Yet no evidence establishes that the patrol and verification activities conducted by Chinese maritime law-enforcement forces amounted to unlawful interception or disrupted normal commercial navigation.

V. Which Side Is Changing the Status Quo?

One view holds that China increased its survey vessels, maritime-administration activities, and the coast guard presence after Japan and the Philippines announced their delimitation negotiations, thereby seeking to change the status quo east of Taiwan through a quasi-routine maritime presence and jurisdictional assertions. However, it must be emphasized that Japan and the Philippines characterized the undelimited waters east of Taiwan as a Japan–Philippines “bilateral matter” and advanced that process in parallel with defense cooperation without disclosing the scope of the contemplated delimitation area, demonstrating separability, or consulting China. They were thus the first to alter the pre-existing legal and procedural status quo, and their conduct was clearly provocative.

The security setting reinforces, but does not replace, that inference. Delimitation is advancing alongside arrangements for classified military information and transfers of maritime-defense assets, including destroyers scheduled for decommissioning. A line whose third-party limits remain unresolved could later organize patrols, surveillance, access expectations, or contingency planning affecting the Taiwan question. Parallel timing does not prove such a plan. It does make the risk foreseeable, and international objection need not await the moment when a disputed line has already hardened into operational practice.

Perhaps, the more pertinent questions are as follows: Why have Japan and the Philippines chosen this moment to advance maritime delimitation and defense cooperation in parallel? Why have they not disclosed a negotiating area and baseline assumptions sufficient to demonstrate separability? And why the haste to set a political objective of completing the negotiations within the year? China’s protests, surveys, and patrols merely preserve its position and constitute reactive measures aimed at preventing Japan and the Philippines from transforming undelimited space into exclusive coordinates, licensing regimes, enforcement zones, or security boundaries.

VI. Unilateral Japan–Philippines Maritime Delimitation Is Highly Likely to Blur Their Respective Positions on the Taiwan Question

By pressing ahead with the negotiations without disclosing their scope or publicly communicating with Beijing, Japan and the Philippines risk further obscuring their respective positions on the Taiwan question. The fundamental reason is that maritime delimitation cannot avoid the antecedent questions of who owns Taiwan’s coasts and who is entitled to represent them. Nor can those questions be evaded merely by describing the process as a “bilateral matter.” Under the principle that “the land dominates the sea,” maritime entitlements derive from specific land-based coasts. Using base points located on Taiwan’s eastern coast, Orchid Island, or Green Island necessarily raises the question of which country they are taken to represent. Excluding those coasts altogether likewise entails a choice with implications for Taiwan policy.

In the 1972 China–Japan Joint Communique, Japan recognized the Government of the People’s Republic of China as the sole legal Government of China and stated that it “fully understands and respects” China’s position on Taiwan. Philippine Executive Order No. 313 of 1987 reaffirmed the relevant terms of the 1975 communique establishing diplomatic relations: the Government of the People’s Republic of China is the sole legal Government of China, there is but one China, and Taiwan is an integral part of Chinese territory. Against this background, if Japan and the Philippines employ baselines promulgated by the Taiwan authorities without communicating with Beijing, their conduct may readily be understood as treating Taiwan as an independent coastal country capable of generating maritime entitlements. If they exclude Taiwan’s coasts entirely, their conduct may be understood as taking the position that those coasts cannot generate maritime entitlements for China. If they accept that those coasts belong to China but bypass Beijing, their conduct would sit uneasily with their recognition of Beijing as the sole legal Government of China. By neither disclosing the contemplated scope nor indicating which conception of the relevant parties and their legal status underpins their approach, Japan and the Philippines leave their Taiwan policies open to multiple interpretations.

In conclusion, the formal opening by Japan and the Philippines of negotiations to delimit exclusive economic zones and continental shelves in waters east of Taiwan has implications beyond the allocation of resources between neighbouring States; it may also affect the spatial order of key waters along the “First Island Chain.” The Joint Statement invokes UNCLOS and relevant international jurisprudence while simultaneously placing maritime delimitation, defense-related information sharing, and equipment transfers within the same partnership framework. This is sufficient to demonstrate a real risk that the contemplated boundary will be used for securitization purposes.

Analyses of the issue should therefore neither accord the Japan–Philippines initiative a “presumption of legality” nor subject China’s response to a “most adverse strategic interpretation.” Objectively speaking, the decision by Japan and the Philippines to open delimitation negotiations at this juncture is unmistakably provocative and strategically inflammatory. That provocation should not be concealed by the rhetoric of “normal negotiations.” In the western Pacific, where maritime boundaries remain unsettled among multiple parties, any attempt to use legal characterization as a cover for political manipulation will undermine the region’s fragile maritime order.

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Q: President Xi Jinping and President Donald Trump are meeting again only a few months after Trump’s visit to Beijing. What has changed in the relationship since then?

Henry Huiyao Wang: Quite a lot has happened in just a few months. The Russia-Ukraine war is still dragging on, tensions in the Middle East remain high, and AI has developed much faster than many people expected.

But I think something has also changed in the China-U.S. relationship itself. During Trump’s first term, the language was often about strategic rivalry. Now we hear about strategic stability.

The differences are still there, of course. But both sides are also becoming more realistic about the fact that neither can fundamentally change the other. I think a new equilibrium is beginning to take shape.

And just having the two presidents meet again so soon after their last summit matters. The image of them sitting down together in Washington and talking about bilateral and global issues sends a signal, in both countries and beyond, that the relationship is not simply heading towards confrontation.

Q: What do you mean by a “new equilibrium”?

Henry Huiyao Wang: Both sides are getting a clearer sense of what they can and cannot do.

The United States cannot fundamentally change China. China is not going to replace the United States in the world. They have different systems, different strengths and different interests, but they are going to have to live with each other.

You can see the same thing economically. After years of tariffs, technology restrictions and retaliation, both sides know they can hurt the other. But they also know the damage does not go in only one direction.

The two economies are simply too intertwined for full decoupling to be realistic. So I think the relationship is moving towards a more pragmatic balance: competition will continue, but both sides have stronger reasons not to keep escalating.

Q: Where could that new equilibrium lead?

Henry Huiyao Wang: During the Cold War, people talked about MAD — mutually assured destruction.

I think China and the United States could now try to move from MAD to what I call MAC — mutually assured construction.

We already know how much damage the two countries can do to each other. The more useful question is what they can build together.

Competition will not disappear. But once both sides accept that neither can eliminate or remake the other, there is more room for cooperation on trade, technology, global governance and international security.

That, to me, is where strategic stability could go.

Q: Trade has been one of the most difficult parts of the relationship. Is a longer-term truce possible?

Henry Huiyao Wang: I think the momentum is quite good.

The two sides have already been discussing tariff reductions on selected goods. If they can begin with around US$30 billion on each side and agree on a list of products, that could be expanded later.

There are plenty of areas where trade does not need to become a security issue: agricultural products, food, pharmaceuticals and many ordinary manufactured goods.

Investment is another area. Trump has talked a lot about bringing manufacturing back to the United States. Chinese companies have an interest in greenfield investment there, and some have already shown they can create American jobs.

After several rounds of tariffs, sanctions, and countermeasures, both sides also seem to have learned that escalation is costly. The repeated extensions of trade truces are a sign of that.

Q: Do you see the relationship moving towards managed interdependence rather than decoupling?

Henry Huiyao Wang: Full decoupling looks much less realistic now. Major American companies still rely heavily on manufacturing and supply chains in China, while Chinese companies also depend on global markets.

The past few years have shown that both sides have economic leverage. The United States can restrict chips and technology. China also has ways to respond.

Once both sides understand that disruption can be mutual, there is less incentive to keep pushing things further.

So I think the more likely direction is pragmatic coexistence: freeze some disputes, reduce some barriers and keep business going where possible.

Q: AI is also expected to come up. What kinds of ideas could enter the discussion?

Henry Huiyao Wang: I see three areas that could be discussed.

The first is the risk of an AI arms race. China has long maintained a no-first-use policy on nuclear weapons. Could a similar idea eventually be explored for AI — for example, no first use of weaponised AI, or some understanding that advanced AI would not be used offensively against the other side?

Of course, AI is not the same as nuclear weapons, and even defining an “AI weapon” would be difficult. But I think the idea is worth discussing.

The second is fragmentation. We are already seeing different international AI initiatives take shape. If they harden into separate American and Chinese camps, we could end up with two AI systems, two sets of standards and very little coordination between them.

There could be room to discuss how those systems interact, and what role the United Nations and other countries could play in broader AI governance.

The third is economic. The United States has put trillions of dollars into AI, but the commercial model is still being tested. China has spent only a fraction of that, while putting much more emphasis on practical applications across industry, healthcare, education, robotics, and other areas. If the U.S. AI boom were to end in a major bust, the impact would not stop at the U.S. economy. China’s huge market and application base could help make AI commercially viable.

Those are different strengths, and in some areas they may be complementary. I would not expect one summit to settle any of this. Even a more regular conversation on AI safety and governance would be useful.

Q: Could closer China-U.S. dialogue make a difference to the wars in Ukraine and the Middle East?

Henry Huiyao Wang: China is already involved, although much of it happens through quiet diplomacy.

China has important economic and diplomatic ties with both Russia and Ukraine. It is also a major trading partner of Iran and the Gulf countries. That gives Beijing channels to different sides.

We have seen Iranian officials in Beijing and Foreign Minister Wang Yi speaking with many foreign ministers during periods of tension. China does not always have to announce that it is mediating.

If there is eventually an agreement involving Russia and Ukraine, or the United States and Iran, a major third party could help make it more durable. China could potentially be a witness, a supporter or, depending on the circumstances, help underpin an agreement.

Trump has made clear that he wants to end wars. China also has a strong interest in regional stability. Their positions may not be identical, but there is still something to talk about.

Q: Taiwan will inevitably be part of the conversation. What would you watch for?

Henry Huiyao Wang: Taiwan comes up whenever the Chinese and American presidents meet because it is the most sensitive issue in the relationship.

I would first watch whether the calmer tone of recent months continues.

During Trump’s visit to Beijing, President Xi made clear that the Taiwan issue has to be handled very carefully because mishandling it could lead to conflict. The United States has said that it does not support Taiwan independence. From China’s perspective, continued adherence to the one-China policy and restraint on actions that could encourage separatism would matter.

There is also a longer-term economic question. I think there could eventually be much deeper economic integration across the Taiwan Strait. You can imagine something like a broader Chinese economic community, just as other regions have developed their own forms of economic integration.

For now, though, the priority is keeping the situation peaceful and avoiding steps that make confrontation more likely.

Q: Do you think Washington’s approach to Taiwan is changing?

Henry Huiyao Wang: I think it has become somewhat more pragmatic. Compared with a few years ago, the rhetoric is calmer. Trump has also made clear that he does not want the United States drawn into another distant war.

But there are always different voices in Washington — in Congress, the Pentagon, the State Department and elsewhere. One president cannot change all of that overnight.

The broader point is that the United States is adjusting to a world in which its share of the global economy is smaller than it once was and China is much stronger than before. That makes coexistence and compromise more necessary.

Q: Trump has also talked about reopening dialogue with North Korea. Could China play a role there?

Henry Huiyao Wang: Renewed dialogue would be positive, and China would inevitably matter because both North and South Korea are China’s neighbours.

The Korean War ended with an armistice in 1953, not a peace treaty. So at some point there is a question of whether the parties can move from an armistice towards a more permanent peace arrangement.

One possibility could be a four-party dialogue involving China, the United States, North Korea and South Korea. China previously hosted the Six-Party Talks. But if the focus is specifically on a peace arrangement for the peninsula, a four-party format could also be explored.

Direct U.S.-North Korea talks could be useful, but any durable settlement on the peninsula would be very difficult without China.

Q: Trump has sometimes used the term “G2”. Could this summit point towards something like that?

Henry Huiyao Wang: China probably would not formally embrace the term “G2”, because it places a great deal of emphasis on the Global South and on a multipolar international order.

But there is an obvious reality: China and the United States are the world’s two largest economies and two of the most consequential powers in many areas, including AI. Whether or not you use the label, what they do together — or fail to do together — has consequences well beyond the bilateral relationship.

If they can work together on peace, global public goods, and economic stability, that would be positive.

That does not mean China and the United States deciding everything for everyone else. It simply recognises that when the two countries are in serious confrontation, the rest of the world feels it too.

Q: By the end of the summit, what would count as meaningful progress?

Henry Huiyao Wang: First, the meeting itself matters. The two presidents are meeting again only a few months after their last summit, and that already gives the relationship some stability.

Then I would look at whether there is practical movement on trade and investment, whether both sides continue to show restraint economically, and whether regular dialogue is becoming more established.

AI may be part of that, especially safety and global governance, but I do not think there has to be a grand agreement immediately.

I would also watch whether China and the United States find more room to work on peace efforts involving Ukraine, the Middle East, and perhaps, over time, the Korean Peninsula.

And there are smaller things that still matter: visas, student exchanges, journalists and other people-to-people contacts.

No single summit is going to settle all of these questions. But if it leaves the relationship more stable, keeps the two sides talking and opens some room for cooperation on difficult international issues, I would regard that as progress.

That would be another step from mutually assured destruction towards mutually assured construction.

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Pekingnology

Henry Huiyao Wang on Xi Jinping’s Upcoming U.S. Visit

Below is a Q&A with Henry Huiyao Wang, founder and president of the Center for China and Globalization (CCG), on Chinese President Xi Jinping’s upcoming visit to the U.S. in the coming week…

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a month ago · 20 likes · 1 comment · Zichen Wang

Pekingnology

Henry Huiyao Wang: AI Has Accelerated to a Dangerous Breaking Point; China-US Cooperation is a Must

By Henry Huiyao Wang, Founder and President, Center for China and Globalization (CCG…

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a month ago · 13 likes

Reshaping consensus

She did, however, use language that appeared to move the KMT closer to Beijing’s interpretation of cross-strait relations.

A crucial moment, political observers say, came when Cheng made public remarks about what is known as the ’92 Consensus, a tacit understanding reached by negotiators for Beijing and Taipei in 1992 that laid the foundation for relations between the two sides over the ensuing decades. Under that understanding, each side accepted there is “one China” while papering over what that meant.

Beijing interpreted it to mean Taiwan was a breakaway piece, awaiting return. The KMT interpreted it to mean that the Republic of China—the government that has run Taiwan since 1949—can still claim the mainland.

In 2019, Xi tied the understanding to unification and called for exploring a “one country, two systems” plan for Taiwan—the same model used to govern Hong Kong—leaving no room for a separate Taiwanese government.

In her China visit, Cheng landed on a formula closer to Xi’s reading, embracing the idea of “one China,” dropping the KMT’s traditional insistence on “respective interpretations” of the deal, and stressing opposition to independence.

The public record says otherwise.

In the official transcript released by the KMT on April 10, Cheng told Xi Jinping:

1992 年兩岸雙方授權機構達成各自以口頭聲明方式表達堅持一個中國原則的共識，同時求同存異

In 1992, the authorized bodies on both sides reached a consensus that each side would, respectively through an oral statement, express its adherence to the one-China principle, while seeking common ground and preserving differences.

Indeed, Cheng’s formulation explicitly preserves both elements: respective oral statements by each side, and “seeking common ground while preserving differences,” precisely what the Journal itself describes as the two sides “accepted there is “One China” while papering over what that meant.”

It is therefore difficult to reconcile the transcript with the Journal’s assertion that Cheng was “dropping” the KMT’s insistence on respective interpretations.

Nor is opposition to Taiwan independence a new element Cheng imported into the KMT’s position to bring it closer to Beijing, as the Journal claims by “stressing opposition to independence.”

After meeting Xi in Singapore in 2015, then-President Ma Ying-jeou of the KMT publicly defined the 1992 Consensus as follows - the words he had said to Xi: “Both sides of the Taiwan Strait adhere to the ‘one China’ principle, but differ in their understanding of its meaning, and may each express their position through oral statements.”

He added that the KMT side’s formulation did not involve “two Chinas,” “one China, one Taiwan,” or “Taiwan independence.”

What makes the Wall Street Journal passage noteworthy is that this is not an isolated reading.

Back in April, Pekingnology examined essentially the same claim after Cheng’s visit. The inaccurate interpretation had originated in a Taiwanese commentary and was subsequently repeated by prominent American Taiwan experts.

Pekingnology

Cheng Li-wun did NOT redefine 1992 Consensus. She stood up for it.

Interpretations of politically sensitive cross-Strait meetings will always differ. That is normal. But there is a basic standard analysis should still meet: it should remain anchored in what was actually said, whether in public video, in contemporaneous transcripts, or in official text that has not been disputed…

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6 months ago · 15 likes · 2 comments · Zichen Wang and Yuxuan JIA

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On the preceding paragraph

In 2019, Xi tied the understanding to unification and called for exploring a “one country, two systems” plan for Taiwan—the same model used to govern Hong Kong—leaving no room for a separate Taiwanese government.

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Pekingnology

Would Beijing Accept Taiwan on These Terms?

Something unusual has been happening in the cross-Strait debate over the past few weeks…

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a month ago · 30 likes · 8 comments · Yuxuan JIA, Qingqu Yuan, and Zichen Wang

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Jiang previously served as Minister-Counsellor at the Chinese Embassy in Berlin.

The following article was published on 8 September 2026 on huanqiu.com, the online platform of the Global Times.

姜锋：德国萨安州选举，一个欧洲政治极化的样本

Jiang Feng: The Saxony-Anhalt Election: A Microcosm of Europe’s Political Polarisation

On 6 September, the results of the state election in Saxony-Anhalt, Germany, were announced. The Alternative for Germany (AfD), classified as far-right by German authorities, made history by becoming the largest party in the state parliament, winning 43.8 per cent of the vote — twice its share in the previous election. The Christian Democratic Union (CDU), which had governed the state continuously for 24 years, won just 17.2 per cent, its worst result ever in Saxony-Anhalt.

On the night the results were announced, the atmosphere at the CDU gathering was unusually calm. There was neither shock nor argument, as if the defeat had long been expected. Several veteran party members who had spent years working in the state government said: “Defeat is not a bad thing. It is time to make changes.”

This state election has not only upended Saxony-Anhalt’s political landscape, but also laid bare the deep tensions between Germany’s traditional party structure and model of governance, on the one hand, and an increasingly polarised society on the other. Its repercussions are already being felt at the federal level, making Saxony-Anhalt a useful case study of the broader trend towards political polarisation and realignment in Europe.

Governing Difficulties after Electoral Victory

The most immediate consequence of the election is a historic setback for the mainstream party order that took shape in post-war Germany. In Saxony-Anhalt, the AfD has leapt from a peripheral party to the largest political force in the state. Its electoral base has expanded beyond the traditional category of “marginal protest voters” to take on the characteristics of a cross-class coalition. The party has not only consolidated its support in rural areas, but also attracted many middle-class voters and even members of the social elite with stable jobs, their own homes, and substantial incomes. It has thus evolved from a “protest party” into one with the potential to govern.

Despite its commanding lead in the vote, however, the AfD faces an institutional obstacle to governing the state: the mainstream parties’ long-standing “firewall” against it. Neither of the two potential routes to forming a government appears likely to break the current political deadlock.

The first would be a coalition of establishment parties, led by the CDU and bringing together the Social Democratic Party (SPD), the Greens, the Left Party (Die Linke) and the Sahra Wagenknecht Alliance (BSW) in a cross-camp government. In terms of parliamentary arithmetic, such a coalition could prevent the AfD from forming a government and preserve the outward stability of the traditional political order. Yet these parties are fundamentally divided over key issues including immigration, the energy transition, economic management, and cultural and education policy. Coalition negotiations would therefore be extremely difficult, and even if a government could be formed, it would most likely prove short-lived.

More importantly, an alliance of establishment parties aimed at keeping the largest party out of government would play directly into the AfD’s narrative that “political elites are suppressing public opinion”. It could deepen perceptions of political unfairness, further strengthening the AfD’s political capital, and creating a dynamic in which “the more it is suppressed, the more people vote for it”. Ulrich Siegmund, the AfD’s candidate for state premier, has said that if efforts to form a government fail because other parties refuse to cooperate, the AfD will push for a fresh election, which he believes could deliver the party an absolute majority of seats. This points to more intense political battles ahead.

The second option would be a coalition between the AfD and the BSW. Together, the two parties would command a simple majority in parliament, making this, on paper, the quickest route to forming a government. The BSW is the only elected party that has not ruled out cooperation with the AfD, and the two parties share some common ground, including on policy towards Russia. There is therefore a degree of political basis for cooperation. Were such a coalition to materialise, Germany would see its first state government jointly formed by a party defined as far-right and one with a far-left background, creating what might be called a “bipolar anti-establishment alliance”. Such an outcome would fundamentally break with the ideological boundaries of post-war German party politics.

It is worth noting that even if the AfD ultimately fails to enter the state government, its roughly 47 per cent share of parliamentary seats would give it a powerful blocking minority. Without its consent, major decisions requiring a two-thirds majority — including constitutional amendments, significant budgetary adjustments, and state-level institutional reforms — would be extremely difficult to pass. Therefore, whoever ultimately forms the government, the AfD will be an unavoidable force in Saxony-Anhalt politics, with a direct influence on the state’s legislative process.

Systemic Failures in Germany’s Governance Model

The Saxony-Anhalt election result reflects a systemic failure of Germany’s post-war mainstream-party model of governance to adapt to rapidly changing socioeconomic conditions. It stems from multiple, mutually reinforcing structural tensions and highlights the existing political system’s difficulty in adapting to “an increasingly polarised society

First, collective anxiety has replaced individual material hardship as a central driver of political mobilisation. The rise of the AfD can no longer be explained simply by poverty or social marginalisation. Its increasingly cross-class electoral base suggests that what is driving voters towards the party is, above all, concern about the broader direction of society. This anxiety about the future of the political community goes beyond individual gains and losses. In political discourse, economic anxiety has become closely intertwined with immigration, while immigration and refugee issues are, in essence, questions of social fairness. This perception turns conflicts over the distribution of social resources into negative assessments of governing parties, providing a broad social basis for far-right political narratives.

Second, regional disparities and East German identity have undermined the strategy of addressing eastern Germany’s structural challenges at the regional level. More than three decades after German reunification, eastern states such as Saxony-Anhalt have experienced periods of economic growth, but their underlying economic structures remain weak, and household incomes and wealth remain significantly below those in western Germany. At the same time, they continue to face population outflow, an ageing population, labour shortages, and other structural challenges.

At a deeper level, historical experiences — including the collapse of the former East German economic system, mass unemployment during the transition, and the westward shift of decision-making power over major issues — have left some residents with a sense of being “second-class citizens” and of being excluded. For years, the German government treated the “syndrome” of reunification as a regional problem to be gradually addressed at the local level. That approach is becoming increasingly unsustainable, as regional development disparities emerge as a core structural factor shaping national politics.

Third, the erosion of institutional trust is perhaps the most decisive factor. AfD supporters tend to distrust establishment institutions, including parliament, government, and the mainstream media. Their concerns about economic security, pensions, and social fairness are significantly greater than the social average. Increasingly, their support for the AfD reflects not an expectation that the existing system can be improved, but a search for an alternative to the current political order. Such a systemic deficit of trust will be extremely difficult for the traditional parties to repair in the short term.

Fourth, a generational shift in political mobilisation has amplified political polarisation. Unlike traditional parties, which rely heavily on offline rallies and mainstream media coverage, the AfD has developed a social-media mobilisation strategy built around “raising an issue — identifying who is responsible — offering a simplified solution — building a shared identity”. It turns complex social tensions into concise political narratives, rapidly channelling public sentiment into political support.

The contrast on the eve of the election was particularly telling. The establishment parties, together with trade unions and churches, organised an offline march attended by more than 10,000 people, but its reach was largely confined to those present and to traditional media coverage. The AfD held a much smaller indoor event, yet livestreaming on TikTok, YouTube, and other platforms, combined with the involvement of online influencers, gave it a reach and mobilising capacity far beyond that of the march. The contrast illustrates how the traditional parties’ methods of political mobilisation are increasingly struggling to keep pace with a political environment transformed by changes in media technology.

A Microcosm of Structural Political Change in Europe

The shockwaves from the Saxony-Anhalt election quickly travelled beyond the state to the federal level. Calls for political accountability followed immediately after the results were announced. The governing CDU and SPD are now under enormous pressure, while Chancellor Friedrich Merz and Vice Chancellor Lars Klingbeil face an unprecedented test. Political polarisation in Germany is no longer simply a regional phenomenon. The post-war model of multiparty government by establishment parties is breaking down and being reshaped.

Viewed in a broader European context, the Saxony-Anhalt election is part of a continent-wide wave of party polarisation, mainstream-party decline, and rising right-wing forces. Far from an isolated phenomenon, it is a microcosm of the structural political changes unfolding across Europe. Weak economic growth, cultural tensions over immigration, and declining trust in institutions are fuelling the rise of right-wing forces in several countries, challenging the liberal internationalist order established in post-war Europe.

As a core member state of the European Union, Germany’s ability to adapt its political system and the direction of its politics will have profound implications for both European integration and the evolution of the international order.

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China’s Germany watchers take stock of Berlin’s uneasy turn

On 7 December 2025, nearly 50 Chinese scholars and policy researchers gathered in Beijing for the 2025年德国形势年终研讨会 “2025 Year-End Seminar on the Situation in Germany…

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10 months ago · 31 likes · 1 comment · YIRUI LI and Yuxuan JIA

In May, Xi offered four dimensions of such a relationship: “a positive stability with cooperation as the mainstay, a sound stability with moderate competition, a constant stability with manageable differences, and an enduring stability with promises of peace.” Since then, Chinese academics have been busy trying to work out what exactly all of that means.

International Review 国际观察, a journal published by Shanghai International Studies University, devoted a section of its latest August issue to reflections by leading Chinese international relations scholars on “a constructive relationship of strategic stability” between China and the United States.

Among the contributors is Zhu Feng, Professor and Dean of the School of International Studies at Nanjing University, whose article examines the core meaning of this new framework and the pathways towards putting it into practice.

What follows is an English translation of Zhu’s article, which Zhu himself has kindly reviewed.

朱锋:中美建设性战略稳定关系的核心要义与建设路径

Zhu Feng: The Core Meaning of and Pathways Towards a Constructive China-U.S. Relationship of Strategic Stability

During his visit to China in May 2026, Donald Trump held in-depth, candid, and strategic discussions with Xi Jinping on the stability and development of bilateral relations. This marked the 14th state visit to China by a U.S. president since President Richard Nixon’s historic visit in 1972.

The two leaders agreed on the need to build “a constructive relationship of strategic stability.” This represents not only a new definition of China–U.S. relations, but also a new test of how the relationship should be understood and advanced. The future stability, manageability, and sustained mutually beneficial development of bilateral relations will depend to a considerable extent on how the two countries make “a constructive relationship of strategic stability” a regular, concrete, and institutionalised feature of their ties.

I. “Strategic Stability” Was a Central Concept for Managing Strategic Competition Between Great Powers During the Cold War

“Strategic stability” emerged as an important concept in international security during the Cold War between the United States and the Soviet Union. In the late 1950s, in response to the intensifying U.S.–Soviet nuclear arms race, the RAND Corporation, a major U.S. think tank, were the first to develop the concept of strategic stability. It argued strongly that the two superpowers needed to ease their nuclear arms race, keep their adversarial relationship under control, and guard against the risk of military conflict escalating into all-out nuclear war.

By the 1970s, a strategic-stability policy framework had largely taken shape amid the U.S.–Soviet Cold War confrontation. Its central premise was that, given the enormous land-, air- and sea-based nuclear strike capabilities developed by the two superpowers by that time, the prospect of “mutually assured destruction” (MAD) could serve to manage conflict, restrain either side from seeking to destroy the other militarily, and prevent both all-out war and the catastrophic escalation of military conflict from conventional warfare to limited nuclear war and ultimately full-scale nuclear war.

In December 1987, the leaders of the United States and the Soviet Union signed the Intermediate-Range Nuclear Forces (INF) Treaty in Washington, D.C., bringing an end to their competition over missile deployments in Europe. The treaty was regarded as an important agreement for advancing strategic stability after U.S.–Soviet relations moved into a period of détente. Limiting the number of offensive nuclear warheads and delivery systems, while continuing to advance nuclear disarmament and nuclear arms control, became important elements in giving concrete form to the concept of strategic stability.

The Soviet Union dissolved in December 1991, bringing the Cold War to an end. In April 2010, U.S. President Barack Obama and Russian President Dmitry Medvedev signed the New Strategic Arms Reduction Treaty (New START). Under the treaty, each side agreed to limits of 1,550 deployed nuclear warheads, 700 deployed intercontinental ballistic missiles, submarine-launched ballistic missiles and heavy bombers, and 800 deployed and non-deployed launchers and heavy bombers. The treaty was to remain in force for ten years. In 2021, the United States and Russia agreed to extend New START for another five years.

The outbreak of the war in Ukraine in February 2022, however, once again caused U.S.–Russian relations to deteriorate. Against the backdrop of continuing Western sanctions on Russia, Moscow subsequently suspended its participation in the New START and revised its principles governing the use of nuclear weapons.

However, the concept of “strategic stability” that developed during the U.S.–Soviet Cold War and continued to shape U.S.–Russian relations in the post-Cold War era does not apply to China–U.S. relations.

First, China has consistently followed the principle of maintaining a “minimum nuclear deterrent” and has refrained from a nuclear arms race. Even today, the scale of China’s nuclear forces and delivery systems remains far smaller than those of the United States and Russia.

Second, China continues to uphold its no-first-use policy. China maintains nuclear weapons solely to preserve an effective nuclear deterrent and to provide a strategic means of nuclear retaliation after suffering a nuclear strike. The narrow conception of strategic stability developed by the United States and the Soviet Union during the Cold War — built on MAD and centred on enormous nuclear destructive capabilities — is not appropriate for China.

Finally, China has consistently been an important participant in and contributor to nuclear arms control and disarmament.

In 2018, Trump announced that the United States would withdraw from the INF Treaty. Following the U.S. withdrawal, Washington began a renewed push to develop offensive intermediate-range and nuclear missiles. At the same time, the U.S. has mobilised numerous military allies and security partners in Europe and Asia in an effort to contain China. It has continued to expand the deployment of advanced U.S. missile systems such as Typhon and Tomahawk in the Asia-Pacific region, while advancing the Australia–United Kingdom–United States security partnership, or AUKUS, under which Australia is to acquire nuclear-powered submarines. The United States’ post-Cold War strategy of military expansion in the Indo-Pacific constitutes a major threat to China’s national security.

In sum, the concept of strategic stability derived from the U.S.–Soviet Cold War experience cannot simply be replicated and applied to China–U.S. relations today.

II. A Constructive Relationship of Strategic Stability Redefines the Framework for China–U.S. Relations

China–U.S. relations today could still, to some extent, slide into a “new Cold War”, and the logic of the “Thucydides Trap”, familiar from both international relations theory and history, continues to pose a serious challenge to the course of bilateral relations. If the United States continues to let the advantages of its position as a unipolar hegemon, an extremely self-interested foreign policy, and an ideologically prejudiced framework shape its strategic thinking and policy towards China, it will inevitably force China to push back in defence of its core interests, including sovereignty, security, and development.

Xi Jinping has repeatedly stressed to U.S. leaders that China has no desire to compete with the United States to be “No.1”. China–U.S. relations should always be guided by mutual respect, equality, mutual benefit, and win-win cooperation. In response to the trade and tariff wars pursued during Trump’s second term, as well as U.S. military strikes against Venezuela and Iran, China has consistently stood for international justice and international rules. It has remained committed to acting as a stabilising force in international affairs, a builder of the international order, and a leader in global development.

Against the current backdrop of turbulence and transformation in the international strategic landscape, stable, manageable and constructive China–U.S. relations are especially important to world peace and development.

The “constructive relationship of strategic stability” is an important “Beijing consensus” reached at the China–U.S. summit. At its core, it is not about simply replicating the U.S.–Soviet Cold War experience. Rather, in the twenty-first century, it is about grounding China–U.S. relations in the reality of their interdependence and in a firm rejection of bloc confrontation, and working steadily to stabilise and improve the relationship.

The primary objective of strategic stability is not simply nuclear arms control, still less the launch of trilateral nuclear arms-control negotiations among China, the United States, and Russia on U.S. terms. Rather, the objective is to ensure that, while China responds effectively to structural U.S. strategic pressure and containment, the two countries preserve their interdependence and mutual openness and keep disputes and potential flashpoints under effective control. Only by maintaining constructive channels of communication, cooperation, and exchange can the two countries achieve genuinely sustainable strategic stability in the twenty-first century.

Since President Nixon visited China in 1972, China–U.S. relations have passed through three historic stages: strategic reconciliation from 1972 to 1978, strategic partnership from 1979 to 1991, and strategic engagement from 1992 to 2017. Despite ups and downs, the relationship has consistently served as a strategic cornerstone of world peace and development and as a major force underpinning mutual respect, equality, mutual benefit, cooperation, and development between the two countries. Although the balance of power between China and the United States has shifted significantly over the past 14 years, and the global geostrategic landscape is undergoing changes unseen in a century, with “the East rising and the West declining”, the balance of global power in the short to medium term remains one of “a strong West and a weak East”.

Since the end of the Cold War, the United States has remained wedded to the strategic ideas of the “superiority of unipolar hegemony” and “American exceptionalism”, while seeking to impose a “new Cold War” on China. In December 2017, the National Security Strategy released during Trump’s first term essentially defined China for the first time as the United States’ greatest strategic competitor. Containing China geopolitically and pursuing “de-Chinaisation” in economic and trade relations became central elements of U.S. strategy towards China.

The Biden administration’s adjustment of its China policy after taking office in 2021 was to cast U.S.-China strategic competition as a worldwide confrontation between a rules-based “democratic camp” composed of the United States and its Western partners, on the one hand, and a power-seeking “authoritarian camp” comprising China, Russia, Iran, North Korea, and other countries, on the other.

China has consistently rejected a “new Cold War” and China–U.S. “decoupling”. Yet from Trump’s first term to the present, the United States has continued to regard the consolidation of its unipolar hegemonic position and the sustained expansion of its strategic competitive advantage as paramount security interests. It has high-handedly suppressed China’s development and worked to assemble and organise various “minilateral” mechanisms within the Asia-Pacific geostrategic environment, making the containment and restriction of China’s rise a central objective of U.S. national security strategy.

The “Thucydides Trap” described in the history and theory of international relations is not an inevitable result of shifts in the relative power of states. Rather, it arises when the dominant state in the international system adopts a narrowly self-interested and self-centred strategy. Enabling China and the United States to escape the “Thucydides Trap” and develop a major-country solution acceptable to both sides — one that can prevent the continued escalation of international conflict and the fragmentation of the world order — is a strong shared expectation of the peoples of both countries and the international community.

III. Putting a Constructive China–U.S. Relationship of Strategic Stability into Practice Requires Concrete Measures, Clear Rules and a Long-Term Approach

Advancing “constructive strategic stability” cannot mean simply replicating the Cold War experience of the United States and the Soviet Union built around MAD. Nor can it mean returning to crisis management alone against a backdrop of deep strategic confrontation between major powers. Ultimately, the path towards constructive strategic stability must be grounded in a commitment to building a community with a shared future for humanity in the twenty-first century. Guided by the principles of mutual respect, peaceful coexistence, and win-win cooperation, the two countries should keep the relationship manageable, make it more stable, and place it on a positive trajectory.

At his meeting with Trump on 14 May 2026, Xi offered a timely and perceptive formulation of four mutually reinforcing and indispensable dimensions of a constructive China-U.S. relationship of strategic stability: a positive stability with cooperation as the mainstay, a sound stability with moderate competition, a constant stability with manageable differences, and an enduring stability with promises of peace.

These four dimensions of stability — and whether the two countries can take joint action and meet each other halfway in advancing and realising them — are critical to achieving sustained mutual benefit, inclusiveness, and mutual success in China–U.S. relations. They are also essential to putting a constructive relationship of strategic stability into practice.

A major test for China–U.S. relations will be whether the two countries can genuinely incorporate these four dimensions of stability into their policy interactions and the process of improving bilateral relations. Guided by head-of-state diplomacy, they should turn this vision into reality and inject the greatest possible certainty and stability into a turbulent world.

The latest round of China–U.S. head-of-state diplomacy has shown considerable strategic foresight and once again charted a new course for bilateral relations. Although China–U.S. relations are undoubtedly fraught and complex, a rising China that continues to place its people’s well-being and economic development at the centre of its national agenda will remain, for a long time to come, a partner the United States will find difficult to turn away from. Under the guidance of head-of-state diplomacy, there remains considerable scope for China and the United States to make their constructive relationship of strategic stability more concrete, more institutionalised, and more enduring, and to advance mutual respect, stable and manageable relations, and mutually beneficial cooperation.

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Henry Huiyao Wang on Xi Jinping’s Upcoming U.S. Visit

Below is a Q&A with Henry Huiyao Wang, founder and president of the Center for China and Globalization (CCG), on Chinese President Xi Jinping’s upcoming visit to the U.S. in the coming week…

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a month ago · 16 likes · 1 comment · Zichen Wang

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Yao Yang on three shifts he saw in the U.S. and in China-U.S. relations

Yao Yang, dean of the Dishuihu Lake Advanced Finance Institute (DAFI), Shanghai University of Finance and Economics, is among the earliest well-known Chinese scholars to embrace short video as a way of reaching general audiences. He has since built a sizeable following on his account “Yao Yang Speaks…

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7 months ago · 20 likes · 1 comment · JINGYUAN JIANG and Yuxuan JIA

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Wu Xinbo Says We Are Witnessing Yet Another Turning Point in China–U.S. Relations

The following interview was published in the second issue of 2026 of 世界知识 World Affairs, released on January 16, 2026. It became available on World Affairs’ official WeChat blog on January 15, 2026. World Affairs is published by World Affairs Press under China’s Ministry of Foreign Affairs…

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9 months ago · 31 likes · 6 comments · Yuxuan JIA and Zichen Wang

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Jia Qingguo: a rare opening for steadier China–U.S. relations in 2026

Tariffs have dominated Trump’s second-term China policy, but the bigger surprise, Jia Qingguo argues, is the administration’s effort to keep other flashpoints off the agenda and its stated willingness to cooperate with China, producing a “fragile stability” in bilateral ties, says…

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8 months ago · 15 likes · JINGYUAN JIANG and Yuxuan JIA

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Economists including Liu Shijin, Cai Fang, and Xu Gao have argued, from different perspectives, for shifting more income and resources towards households, improving income distribution, and giving consumption a greater role in driving domestic demand.

We have also featured Yu Yongding’s contrasting view, including his rejection of a “consumption-driven” growth model and his call for greater reliance on infrastructure investment and more expansionary macroeconomic policy.

Zhang Bin, Deputy Director and Senior Fellow at the Institute of World Economics and Politics, Chinese Academy of Social Sciences (CASS), comes down firmly on Yu’s side of the debate. In the following article, he examines Yu’s recent book 增长是硬道理 Growth Is the Hard Truth and the reasoning behind its central argument.

Zhang argues that the appeal of income redistribution, social welfare, and structural reform can obscure the necessity of the traditional, textbook approach: countercyclical fiscal and monetary policy, particularly public investment.

In his view, China still needs more public investment to tackle insufficient domestic demand, with considerable room for further infrastructure spending in urban renewal, underground utility networks, public-service infrastructure, and the maintenance of existing facilities. Such spending, Zhang says, can directly expand demand and employment while raising incomes and corporate profits, which in turn supports consumption.

The article was published on 28 August 2026 in the China Economic Times, a newspaper run by the Development Research Centre of the State Council, an in-house think tank of China’s cabinet. It is also available on the official WeChat blog of the China Economic Times.

Zhang has kindly reviewed and authorised the translation.

— Yuxuan Jia

打破扩大内需的认知困境

Breaking the Conceptual Trap in Expanding Domestic Demand

Professor Yu Yongding’s book Growth Is the Hard Truth is not about how market-oriented reforms, technological progress, and industrial upgrading can drive medium- and long-term economic growth. Rather, it explains how aggregate demand management can allow an economy to fully realise the existing growth potential.

The importance of demand-management policy should not be underestimated. Weak technological and industrial development can cause an economy to “starve”; poor aggregate demand management can cause it to “suffocate.” In the 1920s and 1930s, the achievements of the Second Industrial Revolution, including electrification and the automobile, spread rapidly, while technological progress and industrial upgrading gathered momentum. Yet it was precisely during this period that serious mistakes in demand management plunged economies into the Great Depression instead of allowing these advances to translate into economic growth. Economic activity collapsed, and ordinary people suffered enormously.

Japan in the early 1990s offers another example. Its technological and industrial capabilities were among the world’s most advanced in many fields, yet the economy remained weak for the following two decades. A major reason Japan hovered on the brink of recession for so long was a succession of mistakes in demand management.

It is deeply regrettable for an economy with rapidly advancing technological and industrial capabilities to be dragged down by insufficient demand. Such an outcome reflects both a failure to properly understand insufficient demand and an inadequate policy response. John Maynard Keynes attributed the Great Depression to “extraordinary imbecility.” Milton Friedman and Ben Bernanke argued that monetary policy was largely to blame for the Great Depression. Proposals for tackling Japan’s insufficient demand had already emerged by the late 1990s, but they met persistent opposition from policymakers at the Bank of Japan and from much of the academic community. It was not until Shinzo Abe returned to office and a new policy framework was introduced in 2013 that Japan rapidly returned to full employment, asset prices rose sharply, and the country finally began to leave its “lost three decades” behind.

Discussions of insufficient demand can easily become a conceptual trap. Well-intentioned and appealing proposals for income redistribution and social welfare are naturally compelling. Market-oriented reforms, embraced for their promised medium- and long-term gains, can be equally inspiring. By contrast, cold and abstract countercyclical policies often invite suspicion: Do they work? Do they address the root problem? Do they merely paper over deeper contradictions? What lasting side effects might they leave behind?

Over the past century, whenever industrialised countries have faced insufficient demand and had to choose a policy response, these competing views have invariably resurfaced, often obscuring the need for countercyclical policy.

China is now grappling with both insufficient demand and the conceptual trap surrounding it. Although Chinese academics broadly agree on the need to expand domestic demand, they remain divided over which tools to use and how aggressively to deploy them. These disagreements have left policymakers with considerable reservations about how to expand domestic demand.

One widely held view of China’s demand problem goes as follows: China suffers from insufficient demand; consumption accounts for too small a share of aggregate demand, while investment accounts for too large a share; therefore, expanding domestic demand should focus primarily on boosting consumption.

How, then, should consumption be increased? Much hope is placed on income-distribution reform and social-welfare policies. This gives rise to the following policy logic: income-distribution reform + social-welfare policies → a more equal distribution of household income → higher consumption → stronger domestic demand.

This is hardly a new idea and has attracted many supporters over the past century. Yet this is not the standard approach to expanding demand found in mainstream macroeconomics textbooks, nor is it commonly seen in countries’ actual policy practice.

Professor Yu Yongding takes a clearly different view. He favours the established approach — the traditional textbook approach. His prescription for expanding domestic demand is to use countercyclical fiscal and monetary policies, particularly government investment in public projects, to boost effective demand.

Assessing these two approaches — one centred on consumption and the other on investment — requires a clear understanding of macroeconomic transmission mechanisms. Professor Yu discusses these mechanisms in detail in the book, so I will not repeat the argument here. Broadly speaking, in his view, investment is the cause and consumption the effect. Rather than targeting consumption directly, it is better to use investment to get consumption going.

A few additional points help illustrate the argument. First, expanding investment and expanding consumption are not mutually exclusive. Historically, consumption and investment have tended to move in the same direction rather than one rising at the expense of the other. The usual chain is: higher corporate profits lead to more investment; greater investment creates jobs and raises incomes; higher employment and incomes then support stronger consumption.

Second, increasing consumption is not the same thing as increasing the consumption share of GDP. In the years immediately before the 2008 global financial crisis, China experienced some of its fastest consumption growth, even as the consumption share of GDP was falling most rapidly. From 2011 onward, China’s consumption share rose steadily until the trend was interrupted by the COVID-19 pandemic. After the pandemic, the share returned to an upward trajectory.

Expanding government investment in public projects inevitably involves an increase in government debt, another highly contested issue. Professor Yu devotes a separate chapter of the book to this question.

One important foundation of China’s economic achievements has been its strong public infrastructure and rapid urbanisation. Public facilities and services allow people, capital, and goods to move and concentrate more efficiently, enabling the market to function more effectively. The Chinese government has borrowed heavily to finance public infrastructure. There have certainly been shortcomings in this process and areas that need improvement, but overall, the money has largely been spent where it was needed.

Today, China has built a solid basic framework of public infrastructure, but the job is far from finished. Cities still require substantial public investment to renovate unsafe and dilapidated housing, upgrade underground utility networks, build public-interest infrastructure that serves people’s everyday needs, and maintain existing infrastructure.

Against the current backdrop of insufficient demand, greater investment in these areas would not only expand domestic demand and create jobs, but also support future consumption and industrial upgrading. While such investment would increase public debt, it is equally important to recognise the gains it can bring in overall income, social wealth, employment, corporate cash flow, and profitability.

In the absence of inflationary pressure, government borrowing that mobilises underused resources and strengthens the economy today also creates a stronger foundation for tomorrow. It is by no means simply a case of borrowing from the future to pay for the present.

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Published by Springer Nature, the volume forms part of the China and Globalization book series. It is available open access and can be read and downloaded free of charge.

Read or download the full book free of charge

About this book

This open-access book presents a curated look into Dr. Henry Huiyao Wang’s latest writings concerning the changing world order, a change widely characterized as one of “world disorder”. A quarter of the way into the 21st century, the world is now witnessing the definitive end of the post-Cold War unipolar moment and the beginning of a new multipolar world order.

Together, these writings explore the key questions facing the global community: How will the world navigate this structural shift defined not by a single hegemon, but by a complex web of competing power centers? How will major powers such as the US and China coexist in an era defined by both competition and cooperation? What role can China play as a new pole of influence emerges? And how can the international system adapt to reflect shifting economic weight, geopolitical realities, and the aspirations of countries across the global south?

Throughout, Dr. Wang offers forward-looking insights for policymakers, scholars, and practitioners. Equally, he highlights the indispensable role of international institutions—especially the revitalization and reform of the United Nations—in shaping a new era of globalization and multilateral systems, as the world moves toward the next global order and a new equilibrium where we must coexist, cooperate and compete at the same time.

Providing a panoramic view of today’s fragmented yet interconnected world and presenting insightful policy ideas from a Chinese perspective, this book calls on readers to reflect on how the next global order can serve all nations—large or small, North or South.

Contents

1 Introduction: A World in Transition

Part I Interaction and Exchange: Re-examining Tenuous Relations in a Transitional World

2 Reluctant Rivals I—China-US Relations under Trump, Practical Deals or More Challenges?

3 Reluctant Rivals II—China-US Relations under Biden, Containment and the Battle for Values

4 Maintaining Equilibrium—Can China and the EU Balance Global Relations?

5 Beyond the State—Innovative Forms of Exchange

6 Chinese Policy and Regional Relations

7 Perspectives on Governance

Part II Geopolitics and Multilateralism: Finding a Salient Solution to Geopolitical Tension

8 China’s Role and Contributions

9 Geopolitical Tensions and Multilateral Solutions

Part III Globalization and Economics: Tweaking the Sputtering Engine of Global Growth

10 Globalization as a Driver of Prosperity

11 China as a Driver of Global Growth

12 Exploring Solutions to Globalization Challenges

13 On the Sharing of Ideas and Power of Dialogue

14 Coming Full Circle—Forewords and Other Writings

15 Reaching the World

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CCG Update is pleased to share the publication of China and the Next Global Order: Coming Multipolar World and Great-Power Coopetition, the latest book by Henry Huiyao Wang, Founder and President of the Center for China and Globalization (CCG).

Published by Springer Nature, the volume forms part of the China and Globalization book series. It is available open access and can be read and downloaded free of charge.

Read or download the full book free of charge

About this book

This open-access book presents a curated look into Dr. Henry Huiyao Wang’s latest writings concerning the changing world order, a change widely characterized as one of “world disorder”. A quarter of the way into the 21st century, the world is now witnessing the definitive end of the post-Cold War unipolar moment and the beginning of a new multipolar world order.

Together, these writings explore the key questions facing the global community: How will the world navigate this structural shift defined not by a single hegemon, but by a complex web of competing power centers? How will major powers such as the US and China coexist in an era defined by both competition and cooperation? What role can China play as a new pole of influence emerges? And how can the international system adapt to reflect shifting economic weight, geopolitical realities, and the aspirations of countries across the global south?

Throughout, Dr. Wang offers forward-looking insights for policymakers, scholars, and practitioners. Equally, he highlights the indispensable role of international institutions—especially the revitalization and reform of the United Nations—in shaping a new era of globalization and multilateral systems, as the world moves toward the next global order and a new equilibrium where we must coexist, cooperate and compete at the same time.

Providing a panoramic view of today’s fragmented yet interconnected world and presenting insightful policy ideas from a Chinese perspective, this book calls on readers to reflect on how the next global order can serve all nations—large or small, North or South.

Contents

1 Introduction: A World in Transition

Part I Interaction and Exchange: Re-examining Tenuous Relations in a Transitional World

2 Reluctant Rivals I—China-US Relations under Trump, Practical Deals or More Challenges?

3 Reluctant Rivals II—China-US Relations under Biden, Containment and the Battle for Values

4 Maintaining Equilibrium—Can China and the EU Balance Global Relations?

5 Beyond the State—Innovative Forms of Exchange

6 Chinese Policy and Regional Relations

7 Perspectives on Governance

Part II Geopolitics and Multilateralism: Finding a Salient Solution to Geopolitical Tension

8 China’s Role and Contributions

9 Geopolitical Tensions and Multilateral Solutions

Part III Globalization and Economics: Tweaking the Sputtering Engine of Global Growth

10 Globalization as a Driver of Prosperity

11 China as a Driver of Global Growth

12 Exploring Solutions to Globalization Challenges

13 On the Sharing of Ideas and Power of Dialogue

14 Coming Full Circle—Forewords and Other Writings

15 Reaching the World

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CCG Update - Center for China and Globalization

Join CCG Book Launch & Seminar: China and the Next Global Order

On September 14 2026, the Center for China and Globalization (CCG) and Springer Nature will jointly launch a new book, China and the Next Global Order: Coming Multipolar World and Great-Power Coopetition. During the launch, senior scholars in political science will be invited to discuss the coming multipolar world and China’s evolving role in global gov…

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2 months ago · 10 likes · CCG Update

Ju is a Changjiang Scholar, awarded by the Ministry of Education in China, and the President of the China International Trade Research Group (CTRG). He previously served as a Dean at Shanghai University of Finance and Economics (2014–2017), a resident scholar at the International Monetary Fund (2007–2009), and a tenured professor in the Department of Economics at the University of Oklahoma (1995–2014).

US-China Great Power Competition and The New World Order offers a reader-friendly yet systematic and professional analysis of nearly all key aspects of contemporary great power competition. It creates a theoretical framework for understanding great power rivalry and provides comprehensive, coherent solutions to the most pressing issues in the competition.

Following the outbreak of the U.S.-China trade war in 2018, the author introduced an undergraduate course titled The U.S.-China Trade Disputes and the Re-Architecture of Globalization at Tsinghua University. The course was awarded the National First-Class Undergraduate Course designation by the Chinese Ministry of Education in 2023.

The book draws from the author’s teaching materials, alongside decades of professional research, teaching, and personal experience. It therefore serves as an invaluable reference for anyone seeking to understand how Chinese society has responded to and navigated great power competition.

In this excerpt, Ju argues that technological catch-up cannot be left to market forces alone. His diagnosis is that without sufficient domestic demand, Chinese firms may lack the commercial incentives and revenues needed to keep moving toward the technological frontier.

His policy prescription is therefore to use government intervention to secure a domestic demand for Chinese homegrown technologies. In the smartphone market, for instance, he suggests requiring companies selling phones in China to ensure that at least 30% of their sales use domestically produced Chinese chips, backed where necessary by taxes and subsidies.

The excerpt follows.

Paving the Way for Technological Catch-Up

Let’s consider the process of upgrading semiconductor technology. This is illustrated in Fig. 10.3. Chip technology has evolved step by step from the 45 nm process to the 32 nm, 28 nm, and 14 nm and today’s 7 nm and 3 nm process. Leading American companies have achieved 3 nm chip technology, while Chinese companies have reached the 14 nm level. The United States is working very hard to block Chinese companies from acquiring technology more advanced than 14 nm.

Why can’t Chinese companies catch up to the advanced chip technology by upgrading step by step from the existing 14 nm process technology available domestically to 7 nm process and even 3 nm process technology? The reason is that upgrading from the 14 nm process to the 7 nm process does not simply require a technology breakthrough by Chinese companies, but also requires sufficient market demand to motivate these profit-making companies to develop more advanced chips. Even in the Chinese domestic market, there has been no demand for Chinese-made chips more advanced than 14 nm process. Why? Because demand for high-end chips in China has been met by imports embodying US technology. In this sense, US high-tech companies monopolize China’s domestic high-end chip market, creating an insurmountable hurdle for Chinese high-tech companies to develop their own high-end chips.

US containment of China’s technological progress is not simply a technological blockade, but rather a deliberate effort to create an environment that shunts Chinese and American companies into separate specializations. To be more specific, the intention is to have American companies specialize in more advanced technology and Chinese companies specialize in less advanced tech-nology so that the United States’ dominant position in the high-tech industry is maintained. Therefore, the United States is, in a sense, monopolizing the Chinese market for chips below 14 nm while vigorously blocking Chinese chipmakers from acquiring the technology to make their own high-end chips.

Let’s take smartphone chips as an example. Smartphones are usually built on top of a silicon chipset (chip) that serves as the “brain” of the device. The manufacturing process of a chip is typically specified in nanometers—generally speaking, the smaller the nm size, the smaller the internal components of the chip and the better it is for power efficiency and compactness.

The main smartphones sold in China are from Apple, Honor, Huawei, OPPO, Redmi, Samsung, VIVO, and Xiaomi. Advanced chip technology and production are controlled by companies in the United States and its allies, while lower-end smartphone components are made by Chinese companies. Apple uses the 3 nm Apple A17 chip, while Honor, OPPO, Redmi, Samsung, VIVO, and Xiaomi use the 7 nm Qualcomm Snapdragon chip, both of which are owned by US companies. Therefore, the smartphone market in China is still dominated by American technology. When Huawei dared to challenge US dominance in high-end chip technology, the US government banned the sales of equipment to Huawei and sought to persuade its allies to do the same.

If there is no demand for Chinese-made high-end chips in the smartphone market, how can China catch up in chip technology?

The key to catching up is to create market demand for Chinese-made chips through government intervention. Core technology, no matter how advanced, cannot be 100% dominated by foreign companies. Instead, Chinese government can take measures to ensure that a certain share of the domestic market (e.g., 30%) must be occupied by domestic technology. That essentially constitutes a technology security policy. With such a policy, if there is a foreign embargo, at least 30% of the market could still be served by domestic tech-nologies. Moreover, if about 30% of the domestic market share is served by domestic technology, it can also ensure that domestic technology can substi-tute world advanced technology to a certain extent, thereby preventing undue vulnerability to external pressures.

How should we design a technological catch-up path or technology security policy? Let’s take the mobile phone chip as an example.

First, identify smartphone chip as a national core technology.

Second, the national core technology opposes foreign monopolies. The downstream market demand for chips is mobile phones. Any company selling phones in the Chinese market, whether domestic or foreign, must ensure that at least 30% of the phones they sell in China are equipped with domestically produced Chinese chips. For example, companies such as Apple, Samsung, Huawei, Xiaomi, OPPO, Vivo, and others must ensure that 30% of the total phones they sell in the Chinese market use domestically produced Chinese chips.

Third, for example, let’s assume “XiaoGuo” is a company selling mobile phones in the Chinese market. If the volume of “XiaoGuo” mobile phones using Chinese domestic chips falls below 30% of its total shipment volume, which leads to a total reliance on foreign chip technology, the “XiaoGuo” company poses a risk to Chinese technological security. The Chinese government should impose taxes on this mobile phone company. The tax rate levied is based on the proportion of Chinese domestic chips used in its total shipment of mobile phones. The smaller the proportion, the higher the tax rate.

Fourth, according to this policy, there will be two types of the same brand of mobile phones sold in the Chinese market. One uses imported chips, referred to as “XiaoGuo A,” and the other uses domestically produced chips, referred to as “XiaoGuo B.” When the technology of domestic chips is lower than that of imported chips, the quality of “XiaoGuo B” will be lower than that of “XiaoGuo A,” and the market price of “XiaoGuo B” may even be lower than its production cost. If this happens, the government can provide subsidies to the company to ensure that “XiaoGuo B” has a certain profit margin.

We refer to such a policy as the “International Technology Anti-Trust Policy.” This policy applies to all products recognized as a core technology. Through such an international technology anti-trust policy, it ensures that the market share of domestic produced technology in China reaches 30%. This not only ensures technological security in the Chinese market but also promotes competition for core technology products, preventing a global monopoly on core technology products (such as high-end chips and operating systems).

The “International Technology Anti-Trust Policy” serves as a strategic approach to pave the way for technological catch-up and can serve as a theoretical consideration to prevent China from falling into the “chaser’s trap.” The key for China to form a virtuous“innovation-market” cycle in the context of great power competition lies in its market share. Only by seizing a certain amount of market share and creating a favourable market environment, Chinese enterprises will choose to catch up, innovate, and surpass according to the comparative advantages designed by the government policies.

On August 29, 2023, Huawei introduced its new flagship phone, the Mate 60. The Huawei Mate 60 is equipped with the self-developed Kirin 9000S chip which functions at a level equivalent to the 7 nm process chip. Huawei’s technology breakthrough came after three years of relentless efforts by the United States to contain China’s high-end chip industry.

It should be pointed out that even a prominent company like Huawei will find difficult to change the competitive environment of the chip market through its efforts alone. The innovation-market cycle for Chinese semiconductor companies cannot be automatically realized by the market and must rely on government policies to nurture and create.

In mid-July 2025, the US government reversed a four-month ban to allow Nvidia to resume exporting its H20 AI chip to China—a device deliberately designed to comply with export rules and priced as a lower-tier offering. This shift aligns with our “innovation-market” cycle theory: the United States aims to preserve its own innovation loop, earn revenue, and keep Chinese firms dependent rather than independent of Western-level chip technology.

By supplying the H20 chip, the United States achieves two objectives: it keeps Chinese firms consuming sub-tier hardware instead of investing in costly full-stack R&D, and it retains commercial presence in a crucial overseas market. In turn, United States revenues can be reinvested into advancing its own R&D and market feedback loop. China’s counter is clear: it must institutionalize long-term industrial policies and sustain large-scale investment to avoid the “chaser’s trap.” Without that coordinated commitment, the H20 move will effectively stall China’s drive toward independent AI-chip leadership.

The outcome of technological competition between China and the United States will determine the long-term growth of both countries and the reform of the world order. China has a comparative advantage in disruptive technological innovations, but it needs to strive hard to avoid falling into the “chaser’s trap” in incremental technological innovations. The country that can achieve a virtuous innovation-market cycle will win the technological competition.

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Its official responsibilities include “studying and formulating principles and policies on Taiwan-related work” and “organizing, guiding, managing and coordinating the Taiwan-related work of departments under the CPC Central Committee and the State Council, as well as provinces, autonomous regions and municipalities”—meaning, in practice, that Taiwan-related work undertaken by other central-level ministries, including the ministry of foreign affairs, falls within the Office’s organizing, guiding, managing and coordinating remit.

The Office holds a regular weekly press conference every Wednesday and subsequently publishes a record on its website, although it is unclear whether that record is a verbatim transcript. Judging from past practice, international media do not appear to have access to these briefings. This makes their contents particularly important, yet relatively inaccessible to the English-speaking world.

Given the Office’s indispensable role in one of the most consequential issues in world affairs, I have therefore decided, on a trial basis, to translate and publish its regular press briefings, with the assistance of AI, as with our other translations. (I may also discontinue this at any time, depending mainly on my mood.)

These translations have not been authorized, reviewed, or approved by the Office or by any other person or party.

Perhaps the most interesting item in today’s briefing is the Taiwan Affairs Office’s decision to flag - albeit withou naming them specifically - three unusually long and detailed articles 《1》 《2》 《3》 by 李其澤（ Ci-Ze Li）, an associate professor at National Changhua University of Education in Taiwan on what a Taiwan version of Beijing’s proposed “one country, two systems” might actually look like. Rather than debating the formula simply in terms of support or opposition, Li treats it as a problem of institutional design and asks what guarantees Taiwan should seek if such an arrangement were ever negotiated. What makes the essays particularly striking is the extent to which they explicitly absorb—and, in important respects, criticize—the experience of “one country, two systems” in Hong Kong. Li argues that any Taiwan formula would have to avoid repeating what many in Taiwan regard as the lessons of Hong Kong, including concerns that the boundaries of autonomy could subsequently be altered through national-security legislation, changes to the electoral system, or legal interpretation. All three essays, including Li’s lengthy responses to criticism from mainland readers, have been published in full within the mainland WeChat ecosystem. That Taiwan Affairs Office has now publicly flagged this discussion is therefore noteworthy in itself.

国务院台办新闻发布会辑录（2026-09-09）

September 9, 2026, 16:07

Source: Taiwan Work Office of the CPC Central Committee/Taiwan Affairs Office of the State Council

At 10 a.m. on September 9, the Taiwan Affairs Office of the State Council held a regular press conference in its press briefing room. Spokesperson Chen Binhua answered questions from reporters on recent issues of concern across the Taiwan Strait.

Chen Binhua: Good morning, friends from the media. Welcome to the regular press conference of the Taiwan Affairs Office of the State Council. Please go ahead with your questions.

Xinhua News Agency: It will soon be three years since the 《中共中央 国务院关于支持福建探索海峡两岸融合发展新路建设两岸融合发展示范区的意见》Opinions of the CPC Central Committee and the State Council on Supporting Fujian in Exploring New Pathways for Integrated Development across the Taiwan Strait and Building a Demonstration Zone for Integrated Cross-Strait Development were issued and implemented. Could you brief us on the important progress made in building the demonstration zone? How will the work be further advanced going forward?

Chen Binhua: In September 2023, the Opinions of the CPC Central Committee and the State Council on Supporting Fujian in Exploring New Pathways for Integrated Development across the Taiwan Strait and Building a Demonstration Zone for Integrated Cross-Strait Development were issued and implemented. Over the past three years, relevant central Party and state departments have formulated and introduced a series of supporting policy documents. Fujian has released five batches of 74 policy measures to promote Fujian-Taiwan integration and organized the implementation of 206 key projects for integrated Fujian-Taiwan development, with total investment exceeding 1.3 trillion yuan.

After three years of effort, the construction of the demonstration zone has made phased progress. It has become more convenient for Taiwan compatriots and enterprises to make Fujian their first home on the mainland; economic exchanges and cooperation between Fujian and Taiwan have remained active; integrated development across Fujian has maintained sound momentum; and people-to-people and social exchanges between Fujian and Taiwan have continued to deepen.

From January to August this year, 2.0874 million passenger trips were made between Fujian and Taiwan, up 20.64 percent year on year. A total of 857,500 Taiwan compatriot entries were recorded through ports in Fujian, up 27.94 percent year on year, while 1.5836 million cross-Strait passenger trips were made through the “Mini Three Links,” up 25.34 percent year on year.

Going forward, the Taiwan Work Office of the CPC Central Committee and the National Development and Reform Commission will work with relevant central Party and state departments and Fujian Province, taking the launch of the 15th Five-Year Plan as a new starting point, to continue advancing the detailed implementation of the Opinions. We will place greater emphasis on promoting integration through connectivity, benefits and affinity; further advance institutional innovation, industrial coordination, people-to-people exchanges and livelihood; and apply the requirements of high-quality development throughout the building of the demonstration zone. We will take greater strides in exploring new pathways for integrated development across the Taiwan Strait, continuously promote the peaceful development of cross-Strait relations, and advance the cause of national reunification.

People’s Daily: An associate professor at National Changhua University of Education in Taiwan recently published three consecutive articles on social media about a Taiwan plan for “one country, two systems,” drawing attention and discussion among readers on both sides of the Strait. Some have called the articles “a rare ice-breaking text.” What is your comment? How do you view the new trend of people on both sides beginning to discuss the issue of reunification in a rational manner?

【Zichen’s note: the three articles are 《1》 《2》 《3》 】

Chen Binhua: “Peaceful reunification and one country, two systems” is the best way to achieve national reunification. It embodies the Chinese wisdom of embracing all rivers and accommodating differences. It fully takes into account Taiwan’s realities and is conducive to Taiwan’s long-term peace and stability after reunification.

The specific form that “one country, two systems” takes in Taiwan will fully take into account Taiwan’s actual circumstances, fully absorb opinions and suggestions from all sectors on both sides of the Strait, and fully accommodate the interests and sentiments of Taiwan compatriots.

National reunification is an unstoppable historical trend. For Taiwan compatriots, it is not an optional question, but a required one. We are pleased to see more and more Taiwan compatriots facing up to the issue of reunification, beginning to understand and discuss the specific content of a Taiwan plan for “one country, two systems,” and offering ideas and suggestions for a “two systems” Taiwan plan in various ways.

Differences and debates between compatriots on the two sides during this process are entirely normal. We believe that more Taiwan compatriots will break through the ideological shackles and information cocoons created by the DPP authorities and increasingly recognize the advantages of “one country, two systems” and the inclusiveness of a “two systems” Taiwan plan.

Riyue Tantian and Kan Taihai, new-media outlets of China Media Group: September 3 was the Victory Day of the Chinese People’s War of Resistance Against Japanese Aggression and the World Anti-Fascist War. People of insight from various sectors in Taiwan spoke out, calling on compatriots on both sides of the Strait to remember their shared history of resistance against Japanese aggression, defend the fruits of victory in the war, and oppose separatist acts of “de-Sinicization.” What is your comment?

Chen Binhua: This year marks the 81st anniversary of victory in the Chinese People’s War of Resistance Against Japanese Aggression and the World Anti-Fascist War.

Taiwan compatriots have a glorious tradition of patriotism. During the arduous years of the War of Resistance Against Japanese Aggression, tens of thousands of Taiwan compatriots crossed the Strait without hesitation and joined the nationwide resistance, contributing to the defeat of Japanese fascism and the recovery of Taiwan.

Victory in the War of Resistance was a great victory forged through the courage, perseverance and bloody struggle of all sons and daughters of the Chinese nation, including Taiwan compatriots. It is also a shared historical memory of compatriots on both sides of the Strait.

To forget history is to betray it. By deliberately downplaying and wantonly distorting the history of the War of Resistance, the DPP authorities are betraying history and desecrating the martyrs, paving the way for their betrayal of the nation and separatist activities.

We believe that more and more Taiwan compatriots will see through the DPP authorities’ false historical narrative and the sinister intentions behind their “de-Sinicization” agenda, uphold the greater interests of the nation and a correct view of history, join mainland compatriots in carrying forward the great spirit of resistance against Japanese aggression, contribute together to the great cause of national reunification, and create a better future for national rejuvenation.

China News Service: It is understood that the sixth “携手圆梦--两岸同胞交流研讨活动” “Joining Hands to Fulfill the Dream — Cross-Strait Compatriots Exchange and Seminar” will be held in Urumqi, Xinjiang, attracting attention from public opinion on both sides of the Strait. Could you tell us more about the event?

Chen Binhua: The “Joining Hands to Fulfill the Dream — Cross-Strait Compatriots Exchange and Seminar” has been held for five consecutive years since 2021 and has become an important brand for Taiwan-related exchanges.

The sixth event will be held in Urumqi, Xinjiang, from September 11 to 12. Officials and representatives from relevant parties, political groups and other sectors on both sides of the Strait will hold in-depth discussions on topics including the peaceful development of cross-Strait relations and jointly pursuing the great rejuvenation of the Chinese nation, with a view to building broad consensus.

China Radio International’s Haixia Feihong, China Media Group: July and August, during the summer vacation, are a peak season for cross-Strait youth exchanges, with a wide range of activities taking place. Could you tell us about some of the highlights and characteristics of this summer’s youth exchanges? What is your assessment?

Chen Binhua: The momentum of cross-Strait youth exchanges continued to grow this summer, with one event after another taking place across the country. Tens of thousands of young people from Taiwan crossed the Strait to the mainland, interacting with their peers and gaining a great deal from the experience.

First, established exchange programs generated strong momentum. The Shanghai leg of the “Together in Heart and Action — Cross-Strait Youth Exchange Season” proved highly popular from its very first edition, bringing together more than 1,000 young people from both sides of the Strait to discuss trends in technology and culture, vividly illustrating the mutual journey toward one another by the younger generations on both sides.

The 14th Strait Youth Festival focused on social, economic and emotional dimensions as well as integrated development across the region. It introduced a third batch of measures for building a “Strait Youth Development-Oriented City,” attracting wave after wave of young people from Taiwan to Fujian for exchanges and development.

The 24th Straits Youth Forum, the 2026 Cross-Strait Youth Summit and the ninth Cross-Strait Youth Development Forum also continued to expand their influence, attracting young people from Taiwan in large numbers.

Second, cultural exchange activities continued to attract participants. The sixth Cross-Strait Youth Culture Month, centered on “New Expressions of Traditional Culture,” created a cultural carnival for young people on both sides of the Strait.

The third Shaanxi-Taiwan Cultural Exchange Week and Cross-Strait Youth Han-Tang Culture Summer Camp, under the theme “Promoting Chinese Culture and Writing a New Chapter of Youth,” promoted deeper exchanges and cooperation in culture and other fields.

Young people from both sides sang folk songs together in Longyan, Fujian, and Meizhou, Guangdong, carrying forward Hakka culture. In Jinan, Shandong, and Lanzhou, Gansu, they connected through music and sang together the song of cross-Strait youth.

Third, sports exchanges were among the liveliest and most popular activities. Cross-Strait inter-school baseball tournaments were held in Beijing and Guizhou, a beach ultimate frisbee invitational in Fujian, the “Tinghao Cup” Cross-Strait Youth Basketball Invitational in Anhui, a youth table-tennis exchange tournament in Hubei, a youth roller-hockey exchange involving Guangdong, Taiwan, Hong Kong and Macao in Guangdong, a summer pickleball exchange in Henan, and a Guangxi-Taiwan youth badminton tournament in Guangxi, among other activities. All attracted large numbers of young participants from Taiwan. Young people from the two sides competed together, achieved good results and made new friends.

Fourth, the activities covered a broad geographical range and facilitated deeper exchanges. From the desert landscapes of Dunhuang in Gansu, where “mountains and springs coexist, and sand and water live side by side,” to the Mazu temples of Meizhou Island in Putian; from the magnificent expanses of Heilongjiang to the scenery of Guilin, famed as the finest under heaven, young people from both sides explored the country with their own footsteps and experienced the history and culture of the Chinese nation with their own hearts.

The mainland of the motherland is also home to the broad masses of Taiwan compatriots. Not only during the summer, but at any time, we warmly welcome young people from Taiwan to come to the mainland, travel around and see it for themselves, participate in cross-Strait exchanges, interact and learn from their mainland peers without distinction between “us” and “them,” share their youthful aspirations and create a better future together.

Beijing Daily: According to reports, Taiwan’s Straits Exchange Foundation recently released its 2027 expenditure budget of more than NT$350 million, an increase of about NT$10 million from 2026. The additional spending will cover personnel expenses, while one of its specific activities will be to use major tourism exhibitions to publicize alleged safety issues associated with travel to the mainland and remind people on the island to carefully assess the risks. What is your comment?

Chen Binhua: Taiwan compatriots made nearly 4.9 million visits to the mainland in 2025 and 2.85 million visits in the first half of this year. The personal safety and lawful rights and interests of Taiwan compatriots while on the mainland are protected in accordance with the law. They come happily and return safely.

The founding mission of the Straits Exchange Foundation was to be 中国的、善意的、服务的 “Chinese, goodwill-oriented and service-oriented.” It defined itself as 是一座桥，不是一堵墙 “a bridge, not a wall.” Yet today it has degenerated into a pawn of the DPP authorities in obstructing and undermining cross-Strait exchanges and cooperation and inciting confrontation and antagonism across the Strait. This is truly lamentable.

I have eight Chinese characters of advice for the Straits Exchange Foundation regarding its recent remarks: 莫忘初衷，多干正事 “Do not forget your original mission; do more serious work.”

Reference News: Recently, the DPP authorities have been making a great fuss about so-called “risks” for Taiwan residents traveling to the mainland, falsely claiming that the State Council Regulations on Exit-Entry Administration involve four kinds of risks, including “inconsistent standards.” What is your comment?

Chen Binhua: The State Council Regulations on Exit-Entry Administration are intended to standardize exit-entry administration, protect the lawful rights and interests of persons entering and leaving the mainland, and safeguard national sovereignty, security and development interests. The relevant provisions will help further protect the lawful rights and interests of all persons entering and leaving the mainland, including Taiwan compatriots.

In order to obstruct cross-Strait exchanges and interactions, the DPP authorities have continually distorted facts and smeared the mainland. Recently, they have once again manipulated online operatives and affiliated groups to fabricate rumors, slander and maliciously defame specific individuals. Such behavior is contemptible.

China Review News Agency, Hong Kong: Taiwan’s transport and tourism authorities recently sent a notice to travel agencies requiring operators organizing exchanges or tours to the mainland to assist all travelers in completing pre-departure registration for travel to the mainland and filling out relevant notices. Although Taiwan’s mainland affairs authority says the registration is “not compulsory,” the move has still raised concerns among people on the island about the privacy of their personal travel arrangements to the mainland. What is your comment?

Chen Binhua: This is yet another despicable tactic by the DPP authorities to threaten and intimidate Taiwan compatriots against coming to the mainland and to interfere with and obstruct cross-Strait exchanges and people-to-people contacts. It has already provoked resentment and dissatisfaction among Taiwan compatriots and the tourism industry.

The desire of compatriots on both sides of the Strait to grow closer and the broader trend of cross-Strait exchanges and cooperation cannot be stopped. Any attempt to turn back the wheel of history and act against the will and wishes of the people will inevitably face a public backlash.

Jiefang Daily’s Shangguan News: Recently, the urban workplace drama 《早春晴朗》Early Spring, Clear Skies, directed by a Taiwan director and starring mainland actors, has become a hit in Taiwan. A number of Taiwan media outlets have produced special reports on the series, while many viewers on the island have been asking online for new episodes. What is your comment?

Chen Binhua: We are pleased to see more film and television productions jointly created by filmmakers from both sides of the Strait, depicting cross-Strait familial bonds and a better life, being broadcast on both sides of the Strait and enabling a two-way coming together of emotions and exchanges among people on both sides.

Henan Daily’s Top News: Could you brief us on recent cross-Strait exchange activities in various fields?

Chen Binhua: Cross-Strait exchange activities in various fields have remained active recently.

From August 25 to 29, the 2026 Straits Hakka “Hakka Youth · Create” short-video competition and ancestral homeland visit for young Taiwan Hakka was held in Longyan, Fujian Province. Forty young Hakka people from Taiwan produced short videos focused on Hakka culture and the landscapes of their ancestral homeland, recording what they saw and experienced through fresh perspectives.

From August 29 to September 2, the Fujian-Taiwan (Mingxi) Traditional Chinese Medicine Cultural Exchange was held in Sanming, Fujian Province. Nearly 70 people participated, including traditional Chinese medicine experts and scholars, industry associations and Chinese medicine enterprises from both sides of the Strait. A number of substantive cooperation outcomes were reached, further deepening multidimensional Fujian-Taiwan cooperation in traditional Chinese medicine.

On September 2, the opening ceremony of the “2026 Cross-Strait Youth Study Camp Exploring the Codes of Chinese Civilization” was held at Qiannan Normal University for Nationalities in Guizhou. Through close interaction, young people from both sides of the Strait gained an immersive experience of Guizhou’s development and Chinese civilization.

On the same day, the first season of the “Neighbors Echo, Both Sides Sing Together” Youth Musicians SEEK Program was launched in Zhangzhou. More than 150 people attended, including well-known musicians and artists from both sides of the Strait and young people from Taiwan. Using collaborative music creation by young people from both sides as its vehicle, the program will organize field trips and music composition, hold dedicated performances and exchange activities, conduct a competition and advancement process, and help cultivate young musical talent.

On September 3, the closing ceremony of the 2026 Taiwan Youth Lingnan Tour was held at Xinghai Conservatory of Music in Guangzhou. Young people from both sides shared their reflections on the Lingnan tour and performed together, demonstrating a spirit of advancing hand in hand and pursuing shared dreams.

From September 3 to 9, the fourth Cross-Strait Youth Film Festival 2026 and Youth Filmmakers Training Camp was held in Xiamen, Fujian Province. Young people from both sides used film as a medium to connect through shared emotions and exchange ideas about creative work.

From September 9 to 12, the sixth Pingtan IM Cross-Strait Youth Film Festival will be held in Pingtan, Fujian Province. The call for submissions covered 410 universities, with more than 3,500 young people from Taiwan participating. Both the number of submissions and the number of participating institutions reached record highs. Under the theme “If the Wind Had Color,” the festival will feature a “Youth Film Night” and a range of other activities, with more than 700 prominent filmmakers, industry representatives, university faculty and students, and others attending in person.

From September 9 to 12, the 14th Anhui-Taiwan Science and Technology Forum and the 18th Cross-Strait Science Popularization Forum will be held in Bengbu, Anhui Province. Nearly 60 experts, scholars and young representatives from both sides of the Strait will conduct extensive exchanges and discussions in areas including electronic information and biotechnology.

From September 9 to 15, the 2026 Cross-Strait (Nanchang) Youth Makers Camp will be held in Nanchang, Jiujiang, Jingdezhen and other places in Jiangxi Province.

From September 14 to 18, the first Cross-Strait (Jiaocheng) Yan Emperor Shennong Cultural Week will be held in Ningde, Fujian Province. Nearly 200 representatives of temples and devotees from Taiwan will travel to Ningde to participate in ceremonial activities, interactive experiences involving farming culture and traditional Chinese medicine, and free medical consultations by traditional Chinese medicine practitioners from both sides of the Strait.

Shenzhen Satellite TV’s Direct News: Taiwan media have reported that, driven by the DPP authorities’ policy of “resisting China and opposing China,” the “green camp” has recently staged one “Communist spy hunt” after another on the island, becoming suspicious of everything and repeatedly making embarrassing mistakes. Some have even become highly sensitive and uneasy about “mainland accents,” simplified Chinese characters and “mainland terminology,” and increasingly reject them. What is your comment?

Chen Binhua: The DPP authorities and “Taiwan independence” forces have become increasingly obsessed and irrational in their approach of “opposing China at every turn” and “resisting China and opposing China.”

From reacting as though facing a major threat when people in Taiwan use “mainland terminology,” to imagining that individual simplified Chinese characters are evidence of espionage infiltration, they are seeing danger everywhere and jumping at shadows.

The actions of the DPP authorities not only further damage mutual trust across the Strait, but also intensify the “green terror” in Taiwan society. They will inevitably face opposition.

Phoenix TV, Hong Kong: The 81st session of the United Nations General Assembly opened on September 8. Lai Ching-te recently claimed that the mainland has misapplied UN General Assembly Resolution 2758, arguing that the resolution only addressed the issue of the People’s Republic of China’s representation at the United Nations and has nothing to do with Taiwan. Taiwan’s foreign affairs authority has also claimed that Resolution 2758 does not exclude Taiwan’s meaningful participation in the UN system and that the United Nations should seek appropriate ways to allow Taiwan to participate. What is your comment?

Chen Binhua: There is but one China in the world, and Taiwan is part of China. This is an indisputable historical and legal fact and the true status quo in the Taiwan Strait.

In 1971, the 26th session of the United Nations General Assembly adopted Resolution 2758 by an overwhelming majority, deciding to restore all the rights of the People’s Republic of China in the United Nations and recognizing the representatives of the Government of the People’s Republic of China as the only legitimate representatives of China to the United Nations. Politically, legally and procedurally, the resolution thoroughly resolved the issue of the representation of all of China, including Taiwan, in the United Nations.

Lai Ching-te and the DPP authorities have repeatedly distorted and attacked UN General Assembly Resolution 2758 in an attempt to challenge the one-China principle universally recognized by the international community. Such attempts will only bring humiliation upon themselves and are bound to fail.

No matter how hard they scheme, they cannot change the legal fact that Taiwan is part of China, shake the solid international framework of adherence to the one-China principle, or stop the historical trend that the motherland will and must ultimately be reunified.

Fujian Radio and Television’s Taihai Shike: Recently, the mainland coast guard announced that a formation led by the vessel Putuoshan was conducting regular law-enforcement patrols in waters east of Taiwan island. Taiwan’s coast guard authority described the operation as “law enforcement in name, expansion of power in reality” and accused the mainland of “attempting to create the illusion that it has jurisdiction.” What is your comment?

Chen Binhua: There is but one China in the world, and Taiwan is part of China.

The mainland coast guard’s law-enforcement and rights-protection operations in waters under its jurisdiction in accordance with the law effectively safeguard normal navigation and operating order, and protect the lawful and legitimate rights and interests as well as the lives and property of Chinese citizens, including Taiwan compatriots. They are legitimate and just actions to safeguard national territorial sovereignty and maritime rights and interests.

The DPP authorities stubbornly adhere to a separatist stance of “Taiwan independence,” distort facts and engage in malicious hype. They are bound to fail.

Global Times and Huanqiu.com: Kyrgyzstan and Egypt recently issued joint statements with China, both emphasizing adherence to the one-China principle and support for China’s reunification. Taiwan’s foreign affairs authority falsely accused the mainland of “manipulating falsehoods internationally,” claiming that Taiwan is a “sovereign and independent country” and that the two sides of the Strait “are not subordinate to each other.” What is your comment?

Chen Binhua: We appreciate the position of the countries concerned in upholding the one-China principle and supporting China’s reunification.

The facts once again demonstrate that the one-China principle is a basic norm governing international relations and a general consensus of the international community. It represents the trend of the times, the cause of justice and the will of the people.

There is but one China in the world, and Taiwan is part of China. Taiwan has never been a country and will never have any possibility of becoming one. There is simply no such thing as the so-called “sovereignty” claimed for Taiwan.

No matter how recklessly the DPP authorities make such statements or hype up their “new two-state theory,” they cannot change the historical and legal fact that Taiwan belongs to China, change the doomed fate of “Taiwan independence,” which has reached the end of the road, or stop the broader trend that the motherland will and must ultimately be reunified.

Hong Kong Economic Herald: The DPP authorities recently claimed that investment by Taiwan businesses in the mainland fell by 59 percent in 2025 from the previous year and by 30 percent in the first half of 2026, arguing that the mainland economy is in difficulty and that Taiwan businesses should be cautious about investing there. What is your comment?

Chen Binhua: According to statistics from relevant departments, cross-Strait trade reached US$221.8 billion from January to July this year, up 26.5 percent year on year. Of this, mainland exports to Taiwan totaled US$62.17 billion, up 31.6 percent year on year, while mainland imports from Taiwan totaled US$159.63 billion, up 24.7 percent.

This fully demonstrates the close economic ties between the two sides of the Strait, the solid foundation of their shared interests, and the stability and resilience of cross-Strait industrial and supply chains.

Since the beginning of this year, we have responded effectively to changes in the external environment, including geopolitical conflicts and economic and trade frictions, while maintaining an overall trajectory of stability and improvement, with new and higher-quality drivers of growth emerging. The economy has demonstrated vigorous vitality and strong resilience, injecting powerful momentum and much-needed certainty into the world economy, while continuously providing new opportunities and opening up new space for strengthening cross-Strait economic cooperation and deepening integrated development.

The mainland has always been the best choice for Taiwan businesspeople and enterprises to invest and develop their businesses, fertile ground for innovation and development, and a powerful source of support in resisting risks. The DPP authorities’ efforts to smear and talk down the mainland have already proved, and will continue to prove, futile.

China Television News, Taiwan: My first question: Taiwan’s mainland affairs authority has said that 洪申翰 Hung Sun-han, head of Taiwan’s labor affairs authority, may enter the mainland to attend an APEC meeting in Nanjing using an APEC invitation letter and will not need to apply for a 台胞证 Mainland Travel Permit for Taiwan Residents. Could you confirm this? Have the relevant arrangements been finalized?

Second, Taiwan’s tourism authority previously issued a notice requiring travel agencies to dynamically register groups traveling to the mainland, with fines of up to NT$50,000 for failure to do so. Following a backlash from travel agencies, it said the measure was merely “advisory” rather than subject to direct penalties. What is your comment?

Third, with the Mid-Autumn Festival approaching, the mainland has recently expanded the approved sources of Wendan pomelos from Taiwan. In addition to Hualien, orchards and packaging plants in Yunlin have now been added. What was the consideration behind adding Yunlin? Will the mainland further open its market to Wendan pomelos and other agricultural products from other counties and cities in Taiwan?

Chen Binhua: On your first question, since 1991, matters concerning Taiwan’s participation in meetings and activities of the Asia-Pacific Economic Cooperation, or APEC, have been handled in accordance with the one-China principle and the provisions and established practices of relevant APEC memoranda of understanding. The same applies this year.

On your second question, the DPP authorities’ despicable tactic provoked resentment and dissatisfaction among Taiwan compatriots and the tourism industry on the island, eventually forcing them to change their position.

As the saying goes: “There was no trouble to begin with; mediocre people created it themselves.”

On your third question, guided by the conviction that “people on both sides of the Taiwan Strait are one family,” we have always made every effort to do practical and good things for Taiwan compatriots and help them resolve difficulties.

On the basis of a comprehensive assessment of the relevant corrective measures and compliance with the mainland’s inspection and quarantine requirements, we support the registration on the mainland of more packaging plants and orchards for Wendan pomelos from Taiwan.

We will further advance the detailed implementation of the 10 policy measures for promoting cross-Strait exchanges and cooperation, continue facilitating the import of agricultural and fishery products from Taiwan into the mainland, and enable farmers and fishers on the island to obtain tangible benefits.

ETtoday, Taiwan: My first question: Beijing lawyer 王夏红 Wang Xiahong and her family are reportedly stranded in Taiwan seeking resettlement. Taiwan’s mainland affairs authority has publicly confirmed the incident and said it is providing accommodation on the principle of “humanitarian considerations first.” Can you confirm the circumstances surrounding Wang Xiahong’s departure and flight from the mainland?

Second, Taiwan residents recently noticed that mainland brand 瑞幸咖啡 Luckin Coffee appeared to be bringing materials into Taipei and recruiting employees, prompting heated discussion on the island. Taiwan’s economic authority subsequently required the agent involved to submit a special application through the “mainland capital investment channel.” How do you view the fact that Luckin Coffee has so far been unable to establish itself smoothly in Taiwan? Taiwan authorities have frequently subjected iQIYI, Xiaohongshu, luosifen, Zhang Xue Motorcycles and Luckin Coffee, among others, to strict scrutiny over their entry into Taiwan. Some believe this will negatively affect private consumption and commercial exchanges across the Strait. What is your comment?

Third, Taiwan’s tourism authority recently required travel agencies organizing groups to the mainland to enter information into a “dynamic registration system for travelers to the mainland,” saying the purpose was to enable Taiwan authorities to keep track of travelers and provide emergency assistance in the event of an incident. Does this mean that there is now “no interaction whatsoever” between the two sides in emergency-assistance mechanisms, leaving the Taiwan side no option but to rely on its own registration system? Does the mainland still communicate with the Taiwan side through existing cross-Strait tourism agreements or notification channels?

Chen Binhua: On your first question, for matters concerning the administration of lawyers, please consult the relevant competent authorities. There are corresponding regulations governing mainland residents traveling to Taiwan, and the relevant authorities will handle the matter in accordance with laws and regulations.

On your second question, we are pleased to see Taiwan compatriots gaining access to high-quality mainland products and support mutual investment and win-win cooperation between enterprises on the two sides of the Strait.

For its own partisan interests, the DPP authorities deliberately obstruct and restrict mainland investment and products from entering the island, worsening Taiwan’s business environment and harming the immediate interests of Taiwan residents. This is political manipulation that enjoys no popular support.

On your third question, the DPP authorities’ despicable tactic is intended to threaten and intimidate Taiwan compatriots against coming to the mainland and to interfere with and obstruct cross-Strait exchanges and people-to-people contacts. It enjoys no popular support and has already provoked strong resentment and dissatisfaction among people and the tourism industry on the island.

This despicable tactic cannot stop the desire of compatriots on both sides to grow closer or the broader trend of cross-Strait exchanges and cooperation. It is an attempt to turn back the wheel of history and move against the tide.

Guided by the conviction that “people on both sides of the Taiwan Strait are one family,” we have always protected the lawful rights and interests of Taiwan compatriots, including tourists, in accordance with the law.

Under the Tourism Law of the People’s Republic of China, Taiwan compatriots traveling on the mainland enjoy the same legal protection as mainland residents. If the lawful rights and interests of Taiwan compatriots are infringed, they may, in accordance with the Measures for Handling Tourism Complaints, file a complaint with a tourism complaint-handling authority at or above the county level in the place where the tourism operator is located, where the tourism contract was signed, or where the tourism dispute occurred. They may also call the 12345 government service hotline or contact the local Taiwan affairs office for assistance.

Chen Binhua: That concludes today’s press conference. Thank you.

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The following article is written by Guan Chenglong, PhD candidate, School of Global and Regional Studies, University of Chinese Academy of Social Sciences; and Yuan Zheng, Deputy Director and Research Fellow, Institute of American Studies, Chinese Academy of Social Sciences (CASS).

The article was published on 20 April in Issue 2, 2026 of 台湾研究 Taiwan Studies, a journal run by the Institute of Taiwan Studies at CASS. It is also available on the official WeChat blog of the Institute of Taiwan Studies.

美国战略界的台海政策辩论：阵营分化与共识离散——兼论特朗普第二任期的台海政策

The Debate on U.S. Taiwan Policy: Camp Divisions and the Disintegration of Consensus

— A Discussion of Taiwan Policy during Trump’s Second Term

Guan Chenglong and Yuan Zheng

Abstract. Since 2020, the U.S. strategic community has conducted several rounds of intense debate over Taiwan policy, marked by sharp divisions among different camps and disintegration of consensus.

Drawing on the positions of the various parties to the debate, this article uses an “ends–means” dimension to divide the field into five camps: the Taiwan-defence camp, the deterrence-rebalancing camp, the traditional status-quo camp, the gradual Taiwan-abandonment camp, and the radical Taiwan-abandonment camp.

It then examines how the evolution of strategic consensus has shaped the way these debates influence decision-making. As the debate continues into Trump’s second term, it is likely to shape the administration’s Taiwan policy in two ways. On one hand, Trump’s Taiwan policy is subordinate to deal-making with China, and it will continue to advance the U.S. strategic community’s minimum consensus — the buildup of Taiwan’s asymmetric defence capabilities and the porcupine strategy. On the other hand, it pursues a strategy of maximum extraction and de-risking aimed at making Taiwan serve the America First agenda across the board, a logic closely linked to the rise of the gradual Taiwan-abandonment camp in recent years.

Keywords: China–U.S. Relations; U.S. Taiwan Policy; Policy Debate; Strategic Consensus; Taiwan Abandonment

Disagreement within the U.S. strategic community over Taiwan policy is long-standing, surfacing periodically in policy debates with a discernible cyclical pattern. These debates are closely intertwined with actual government policy: they may foreshadow policy adjustments, but may also be triggered by shifts in policy itself. Taken together, the successive rounds of debate reflect not only the diversity of views within the U.S. strategic community, but also sharp differences among various camps and factions in how they assess and balance competing interests, with lobbying and personal factors adding further complexity.

Since the Biden administration, debate has become more intense than ever. The long-standing U.S. approach to the Taiwan Strait — grounded in the “one-China policy” and aimed at maintaining the status quo — has faced sustained challenges from multiple directions, while Biden’s efforts to adjust policy in response to these pressures have been less than satisfactory. U.S. Taiwan policy has therefore, on the whole, entered a difficult period of transition. It is thus worth examining these debates from a broader range of perspectives and considering how they shape the government’s decision-making process.

I. Factional Divisions on Taiwan Policy within the U.S. Strategic Community

After the Kuomintang retreated to Taiwan in 1949, Taiwan policy became an increasingly prominent subject of debate within the U.S. strategic community. The outbreak of the Korean War and the signing of the U.S.–Taiwan Mutual Defence Treaty enabled the Taiwan-defence camp to dominate both the government and the strategic community, with Taiwan regarded as an integral part of U.S. Cold War strategy in East Asia.

By the late 1960s, as Sino-Soviet relations deteriorated, the U.S. strategic community began to rethink China policy. Within the U.S.–China–Soviet strategic triangle, the argument for aligning with China to counter the Soviet Union gained ground, and it was on this basis that the Nixon administration initiated the normalisation process. With the establishment of diplomatic relations with China and the signing of the three joint communiqués, the U.S. government gradually consolidated a Taiwan policy framework grounded in the “one-China policy”. In parallel, debate within the strategic community came to be dominated by the status-quo camp, further reinforcing the legitimacy of this policy framework.

For a long time, the positions taken on Taiwan policy within the U.S. strategic community could be sorted roughly into three camps: the Taiwan-defence camp, the Taiwan-abandonment camp, and the status-quo camp.1 Building on the opposition between the abandonment and Taiwan-defence camps, some scholars have subdivided the former into immediate and gradual variants and the latter into a strengthening defence camp and a maintaining status-quo camp.2

Tao Wenzhao, for his part, divides the debate into three camps: a minority calling for a rethinking of Taiwan policy, a mainstream camp favouring the maintenance of the status quo, and a conservative faction that links the “China threat” thesis to U.S. Taiwan policy and continues to emphasise Taiwan’s strategic value to the United States.3 Lin Gang sorts these debates into three camps: a status-quo camp advocating neither unification nor independence across the Taiwan Strait, a Cold War camp that sees Taiwan as an important means of containing the mainland’s peaceful rise, and a Taiwan-abandonment camp that favours ending the U.S. security commitment to Taiwan.4 Zhong Houtao holds that the core question in the debates is how to assess Taiwan’s strategic value to the United States — in essence an argument over whether Taiwan is an asset or a liability.5 Other scholars, drawing on the distinction between Taiwan as a strategic liability and as a strategic asset, divide the debate into three positions: the abandonment thesis, the Taiwan card thesis, and the status quo thesis.6

As the U.S.–China balance of power has shifted more rapidly in recent years, some scholars have argued that Taiwan is becoming a high-risk strategic asset for the United States and that the risks of continuing to play the Taiwan card are mounting.7 Wang Shushen observes that the two major U.S. parties are largely of one mind on using Taiwan to check China, but that Republican “strategic hawks” hold more provocative views of Taiwan and advocate more dangerous policies than the Democratic establishment.8

James B. Steinberg, who served as deputy secretary of state under Obama, groups current views within Washington’s strategic community into three camps. The first calls on the U.S. government to make an explicit commitment to defend Taiwan and to state publicly that it does not recognise Taiwan as part of China. The second emphasises strengthening Taiwan’s defence capabilities, pursuing a porcupine strategy, and creating a so-called “boiling moat.” The third advocates abandoning Taiwan and seeking an accommodation with Beijing.

Taken together, these frameworks are based on sustained observation and analysis of the U.S. debate. They offer valuable insights into the complex range of positions and the principal lines of division, providing clear examples of the diversity of views within the U.S. strategic community. Yet as the debate has evolved, two problems in the existing scholarship warrant further discussion.

First, any such classification should begin with a clearly defined research question and avoid conflating ends with means. Steinberg’s typology clearly blurs this distinction by placing measures — such as support for higher Taiwanese defence spending and the porcupine strategy — alongside strategic positions on whether to defend or abandon Taiwan. In fact, there are now few voices within the U.S. strategic community that oppose the porcupine strategy. A more nuanced distinction among the positions of leading strategic thinkers is therefore needed.

Consider the debate over strategic clarity initiated in 2020 by Richard Haass, president of the Council on Foreign Relations (CFR), and David Sacks, a CFR research fellow. The two viewed strategic clarity as a means of rebalancing deterrence in the Taiwan Strait and preserving the status quo. If classified according to their strategic objectives rather than the means they advocated, both would belong to the status-quo camp.

Second, as the debate has evolved, the conventional dividing lines have become increasingly blurred, and any classification must adapt accordingly. Views and camps in the U.S. strategic community are constantly shifting, and the landscape has changed markedly since Biden took office. The long-dominant status-quo camp has become internally divided, while both the Taiwan-defence and Taiwan-abandonment camps have gained ground rapidly. The relative influence of the three camps has shifted noticeably, and after Biden himself made four successive statements that appeared to move towards greater strategic clarity, the debate became more complicated still.

II. Camp Divisions in the New Round of Taiwan Policy Debate

Since the establishment of China-U.S. diplomatic relations, the “one-China policy” has been the cornerstone of U.S. Taiwan policy. Strategic ambiguity has served as the principal means of implementing that policy. Its core objective is to maintain the status quo, ideally through dual deterrence: deterring the mainland from changing the status quo by force while also deterring pro-independence forces on Taiwan from disrupting it.

Under the Biden administration, the U.S. strategic community engaged in several substantial and highly contentious rounds of debate over Taiwan policy. These debates exposed a structural tension in U.S. policy: it has become increasingly difficult to preserve the status quo by maintaining an ambiguous and broadly defined posture. For decades, this posture gave the U.S. government considerable room for manoeuvre, allowing it to remain deeply involved in cross-Strait affairs while avoiding, to some extent, excessive commitments. Yet the policy rested on a rough balance of power across the Strait.

As the cross-Strait power gap has widened in recent years, and as the strategic gap between the United States and China along the first island chain has narrowed, U.S. policy has come under growing pressure. A consensus has emerged within the strategic community that time is no longer on the U.S. side.

(1) The Taiwan Debate Within U.S. Strategic Community Since 2020

Since 2020, the U.S. strategic community has gone through successive rounds of debate over questions such as: Is a mainland “attack” on Taiwan imminent? Should the United States explicitly commit to defending Taiwan? Does Taiwan implicate vital U.S. strategic interests?

During this period, the “Davidson window,” an argument underpinning the view that a mainland “attack” could be imminent, was repeatedly invoked, while the thesis of Taiwan’s undetermined status was revived on multiple occasions and became an important basis for the government’s increasingly unconstrained use of the Taiwan card. The Biden administration, meanwhile, repeatedly tested the limits of strategic ambiguity9, while using a democracy-versus-autocracy narrative to further “internationalise” the Taiwan question. House Speaker Nancy Pelosi’s 2022 visit to Taiwan brought domestic calls to defend Taiwan to a peak.

As support for defending Taiwan intensified, some within the strategic community began to pay closer attention to the risks of strategic miscalculation and escalating crisis dynamics between the United States and China, and to guard against them. They strongly criticised the Taiwan-defence camp and the case for strategic clarity. Some offered a series of more objective reflections: Is a mainland “attack” really so imminent? Does Taiwan genuinely implicate vital U.S. strategic interests? Has the U.S. public accepted the prospect of war with China?

At the same time, the rapid rise of New Right political forces emphasising strategic retrenchment and domestic priorities, together with Trump’s return to office, provided the Taiwan-abandonment camp with new intellectual support and a more favourable political environment, creating greater space for its growth within the U.S. strategic community.

In 2020, a group of strategic thinkers led by CFR president Richard Haass and research fellow David Sacks called into question the long-standing policy of strategic ambiguity. As the China-U.S. power gap narrowed and the balance of forces across the Taiwan Strait shifted, they argued, the United States should move towards strategic clarity to restore the balance of deterrence. At the same time, they continued to support the “one-China policy”, maintaining that a shift towards strategic clarity would not alter Washington’s long-standing “one-China policy” or its position of not supporting Taiwan independence.

The argument immediately sparked fierce debate between supporters and critics upon publication. Raymond Kuo, director of RAND’s Taiwan Policy Initiative, argued that, given the prevailing balance of forces, the United States should strengthen the credibility of its deterrence against China and that Washington’s long-standing policy of strategic ambiguity had already lost its effectiveness. In Deterrence Gap: Avoiding War in the Taiwan Strait, Jared M. McKinney and Peter Harris likewise contended that the material basis for continued ambiguity had been badly eroded, that U.S. deterrent capability in the Strait would reach its nadir within a decade, and that a shift to strategic clarity was urgently required.

On the other side of the debate, mainstream voices within the status-quo camp joined parts of the Taiwan-abandonment camp in resisting this line. Bonnie Glaser and Michael J. Mazarr, among others, argued in turn that a turn to strategic clarity would fail to remedy declining U.S. deterrence and would instead invite greater danger. Michael Glennon warned that such a turn would contravene both the Taiwan Relations Act and the U.S. Constitution, carrying serious legal and political risk.

In 2021, an article by Oriana Skylar Mastro, a fellow at Stanford’s Freeman Spogli Institute for International Studies, touched off heated argument over the imminence of a mainland “attack”. Mastro claimed that the mainland’s growing military capabilities were being matched by a greater willingness to use force, and that the United States urgently needed to strengthen military deterrence to convince Beijing that it could not achieve its objectives. The argument echoed the contemporaneous “Davidson window” and the congressional testimony of Ely Ratner, then Assistant Secretary of Defence for Indo-Pacific Security Affairs, and quickly triggered widespread discussion.

Rachel E. Odell, Research Fellow at the Quincy Institute, Eric Heginbotham, principal research scientist at MIT’s Center for International Studies, and Bonny Lin, senior fellow at the Center for Strategic and International Studies (CSIS), subsequently published an article arguing that such alarmism was in fact harmful to the interests of both the United States and Taiwan, and that there had been no major shift in the mainland’s policy towards Taiwan. Interestingly, an argument intended to push U.S. policy choices towards a “moment of truth” ultimately created space for both the Taiwan-defence and Taiwan-abandonment camps to sharpen their respective positions, while also drawing forceful rebuttals from the mainstream status-quo camp.

In 2024, Andrew S. Erickson, professor at the U.S. Naval War College, Gabriel Collins, fellow at Rice University’s Baker Institute for Public Policy, and former deputy national security adviser Matthew Pottinger co-authored a piece likening Taiwan to the West Berlin of a U.S.–China new cold war, warning of catastrophic consequences for the United States and the world if the Chinese mainland were to “take” Taiwan. The piece brought the case for defending Taiwan back to the centre of the debate and prompted widespread discussion. In fact, the abandonment thesis and the defence thesis represent two opposing strands of the same broader debate over Taiwan: whenever arguments for defending Taiwan gain momentum, the case for abandonment tends to mount a strong counterreaction.

Indeed, since 2024, the abandonment thesis has shown clear signs of resurgence. Michael D. Swaine, a senior research fellow at the Quincy Institute, offered a sober reassessment of Taiwan’s strategic value to the United States, stressing that Taiwan does not constitute a vital U.S. interest. Jennifer Kavanagh, senior fellow and director of military analysis at Defence Priorities, and Stephen Wertheim, senior fellow at the Carnegie Endowment for International Peace, wrote that “the United States should insulate its regional strategy from developments in Taiwan. That way, Washington can minimise the fallout in case Beijing succeeds in taking the island.” Michael Mazarr and colleagues at RAND went further, proposing that the United States create maximum incentives for Beijing to pursue peaceful unification by gradual means. With the New Right ascendant in U.S. politics and Trump back in office, the resurgence of the abandonment thesis marks only the beginning of a new round of debate, one that is likely to continue evolving.

The foregoing sketches only some of the key developments since 2020 and cannot capture the debate in its entirety. Even so, the evolution of the debate and the shifting balance of the Taiwan-defence, Taiwan-abandonment, and status-quo camps make clear that discussion of Taiwan policy in the U.S. has remained highly intense and frequent in recent years. This reflects both deep U.S. anxiety over China’s rapidly growing military power and the changing strategic landscape in East Asia, and a growing reassessment of — and wariness about — the increasingly radicalised trajectory of strategic competition with China and Taiwan’s potential role as a conflict flashpoint. The rise of the abandonment thesis represents, to some extent, a return to more restrained thinking within the U.S. strategic community. As the debate evolved, the long-standing U.S. consensus on the Taiwan Strait has come under increasing pressure, and the status quo camp’s mainstream position has been shaken.

(2) Camp Division and the Disintegration of Consensus

For a long time, the U.S. debate was dominated by the status-quo camp, with the Taiwan-defence and Taiwan-abandonment camps occupying opposing ends of the spectrum. The clashes between the two, in fact, continually reinforced the status-quo camp’s dominant position, while the consensus it represented — strategic ambiguity and maintenance of the status quo — provided the principal source of legitimacy for the U.S. government’s “one-China policy”. As the structure of the debate has shifted in recent years, that mainstream consensus has begun to loosen.

On one side, the Taiwan-defence camp has gained momentum rapidly, while figures within the status-quo camp, represented by Haass and Sacks, have placed greater emphasis on deterrence and turned to endorse strategic clarity that would explicitly commit the United States to defending Taiwan. This has given rise to a deterrence-rebalancing camp emerging from within the status-quo camp. On the other side, the Taiwan-abandonment camp has steadily gained ground, and the gradualist approach advocated by some within it has attracted considerable support.

The simultaneous growth of both wings has put increasing pressure on the status-quo camp’s dominant position, while developments in the Taiwan Strait have made it increasingly difficult to restore the earlier order favoured by the mainstream status-quo camp.

Working along an end–means dimension, and setting out three objectives — defending Taiwan, maintaining the status quo, and abandoning Taiwan — against three instruments — strategic clarity, strategic ambiguity, and non-intervention — this article attempts to clarify the most recent state of the debate, dividing the field into five camps: the Taiwan-defense camp, the deterrence-rebalancing camp, the traditional status-quo camp, the gradual Taiwan-abandonment camp, and the radical Taiwan-abandonment camp.

More specifically, the Taiwan-defence camp is represented by former national security adviser John Bolton, Matt Pottinger, and former chairman of the House Select Committee on the CCP, Mike Gallagher. It views Taiwan as a forward bastion in U.S. strategic competition with China and in efforts to contain and undermine Beijing, and argues that the United States should actively defend the island. Those who hold this view are generally among the “extreme China hawks” in the U.S. strategic community.

The deterrence-rebalancing camp and the traditional status-quo camp both regard maintenance of the status quo as their principal objective, but differ over how best to achieve it. The deterrence-rebalancing camp argues that the United States should shift towards strategic clarity by making an explicit commitment to defend Taiwan. Its members generally hold that long-standing strategic ambiguity no longer fits the changing strategic situation in the Strait. The traditional status-quo camp, represented by Bonnie Glaser and Ryan Hass, maintains that strategic ambiguity remains effective and is still the best available option. Its members have criticised Biden’s repeated attempts towards greater strategic clarity.

The Taiwan-abandonment camp, meanwhile, has evolved in new directions, giving rise to a group of gradual Taiwan-abandonment advocates who view abandonment as the ultimate objective but argue that, for the time being, the United States should maintain strategic ambiguity and the “one-China policy”, postponing further steps until conditions are more favourable. On some issues, this group aligns with the mainstream traditional status-quo camp, and in several rounds of debate the two have jointly pushed back against the Taiwan-defence and deterrence-rebalancing camps. Jennifer Kavanagh, Michael Mazarr, and Michael Swaine are its principal representatives.

Jennifer Kavanagh has repeatedly defended strategic ambiguity and proposed concrete steps to reinforce the “one-China policy”. She argues that Taiwan does not require direct U.S. military defence and that even losing Taiwan would not fundamentally affect the U.S. strategic position in the Indo-Pacific. She also places hope in Trump’s ability to break the current impasse and dangerous spiral in the Taiwan Strait, arguing that the administration’s best path to avoiding conflict is to pursue a bold new agreement with China.

In a 2025 report, Michael Swaine likewise argued that the United States should maintain strategic ambiguity while carrying out necessary preparations for a noninterventionist policy shift. Once those preparations were complete, he argued, strategic ambiguity should be replaced by a policy of strategic clarity that excludes the possibility of a Sino–American war over Taiwan.

The radical Taiwan-abandonment camp, by contrast, neither believes that strategic ambiguity remains effective nor considers the long-standing “one-China policy” sustainable. In its view, the United States should abandon Taiwan as soon as possible. Doug Bandow, for example, argues that Taiwan is not vital to U.S. security, that Washington’s policy of strategic ambiguity should be brought to an end, and that honest dialogue is required for a peaceful resolution of the Taiwan question. Charles L. Glaser, Professor at George Washington University, a long-standing advocate of abandoning Taiwan, also argues that maintaining the status quo has become an increasingly dangerous choice for the United States, that the time for a grand bargain with China has passed, and that Washington’s only remaining option is to explicitly end its so-called commitment to Taiwan.

The debate has thus fragmented into five camps. All ultimately seek to safeguard U.S. national interests, but they differ markedly over intermediate objectives and policy instruments, while still sharing common ground on certain issues. The gradual and radical Taiwan-abandonment camps share abandonment as their strategic objective; the Taiwan-defence and deterrence-rebalancing camps both support strategic clarity in the form of an explicit commitment to defend Taiwan; and the deterrence-rebalancing and traditional status-quo camps are both committed to maintaining the status quo.

Overall, consensus within the U.S. strategic community has visibly eroded, and the long-standing core positions of maintaining the status quo, upholding the “one-China policy”, and preserving strategic ambiguity no longer command the broad support they once did. As support for these positions has weakened, the so-called minimum consensus has been repeatedly narrowed, until little remains beyond support for strengthening Taiwan’s asymmetric defence capabilities and pursuing a porcupine strategy. The division of camps and disintegration of consensus pose a new challenge to the coherence of U.S. Taiwan policy.

III. How Do Policy Debates Influence U.S. Taiwan Policy? An Explanation Based on “Strategic Consensus”

How debates within the U.S. strategic community over Taiwan policy shape U.S. government policy remains a question that warrants further investigation. As a regular feature of the U.S. political system, policy debate helps shape the broader environment in which government decisions are made. Following the logic of “policy debate➔strategic consensus➔decision-making constraints,” and taking into account the Biden administration’s repeated attempts to clarify strategic ambiguity, this section seeks to explain both the phenomenon itself and the mechanism through which it operates.

(1) A Preliminary Exploration of How “Strategic Consensus” Influences Decision-Making

As a relatively autonomous and intellectually diverse expert community, the U.S. strategic community plays an important role in shaping government policy, particularly in complex and highly specialised areas such as Taiwan policy. Its members can influence policy through several channels. Through the “revolving door,” they may move between expert and government positions, bringing their policy views directly into the decision-making process. They can also shape government policy through journal articles, reports, media commentary, and testimony before Congress.

Policy debates within the U.S. strategic community typically generate a wide range of strategic perspectives and policy proposals. Together, these views continually reshape the community’s dynamic “strategic consensus,” which generally reflects changes in how it perceives external threats and weighs competing interests.

Robert Sutter, a veteran specialist who worked for many years at the Congressional Research Service, has offered a preliminary explanation of U.S. policy debates over the Taiwan Strait: “The domestic debate/domestic interests have sometimes been a ‘driver’ of the direction of U.S. policy towards mainland China/Taiwan. More often, they have been a ‘brake’ slowing the momentum of U.S. policy.” Policy debate both reflects changes in official Taiwan policy and, in turn, can help bring about policy adjustments to varying degrees.

By the same logic, strategic consensus plays a key role in shaping the decision-making environment for U.S. policy towards Taiwan, while debates within the U.S. strategic community influence government decisions by continually reshaping that consensus. When strategic consensus is relatively stable and broad, government decision-making tends to favour continuity and leaves less room for policy change. When that consensus becomes significantly divided or weakened, the government may become more inclined to adjust policy, particularly amid rapid and major changes in the external environment.

More specifically, strategic consensus within the U.S. strategic community on Taiwan policy has two main components. The first is the community’s overall “minimum consensus” — the “greatest common denominator” shared by all camps and factions on Taiwan Strait issues. The second is the “mainstream consensus” upheld by the dominant status-quo camp, grounded in the “one-China policy” and aimed at maintaining the status quo.

(2) The “Mainstream Consensus” on Taiwan Policy within the U.S. Strategic Community

Since the 1970s, successive U.S. administrations have consistently adhered to the so-called “one-China policy” in handling the Taiwan question and have treated preservation of the status quo in the Taiwan Strait as their principal objective. Within this framework, strategic ambiguity has served as the principal means of maintaining that status quo. By deliberately leaving unclear whether the United States would intervene militarily in the event of a mainland “attack” on Taiwan, the policy seeks to achieve dual deterrence: deterring the Chinese mainland from changing the status quo by force while also deterring pro-“Taiwan independence” forces on the island from taking reckless steps that could disrupt it.10

When viewed as a means of maintaining balance, the logic of strategic ambiguity can be traced back to before the adoption of the “one-China policy”. As early as 1950, Livingston T. Merchant, then Deputy Assistant Secretary of State for Far Eastern Affairs, articulated this balancing logic of U.S. Taiwan policy in a memorandum to Dean Rusk, then Assistant Secretary of State for Far Eastern Affairs. He noted that U.S. policy should seek both “to deny Formosa to the Communists and to continue recognition to the Nationalists”, which required diplomatic and economic aid to Taiwan as well as assistance for their operations against the mainland. At the same time, Washington should avoid “actions which will deflect on ourselves the righteous wrath of the Chinese people”. Merchant stressed that “it is out of the question that we should pursue one or the other policy to its logical extremity”.11

Strategic ambiguity thus embodied the United States’ effort to balance competing considerations in the Taiwan Strait and also reflected the complexity of domestic political bargaining. The strategy was both a product of the U.S. government’s efforts to balance domestic and international interests and an equilibrium point in the interaction between the executive branch and Congress. It also reflected a broad preference that had long prevailed within the U.S. strategic community.

Since the 1980s, debate over U.S. Taiwan policy has generally been structured around a dominant status-quo camp in the centre, with the Taiwan-abandonment and Taiwan-defence camps at the margins. The “one-China policy” and strategic ambiguity, as the mainstream consensus upheld by the status-quo camp, have constituted the principal source of legitimacy for U.S. Taiwan policy.

The U.S. “one-China policy” is not a fixed or immutable position, but rather a dynamic framework that has been continuously adjusted over time. The policy took shape during the normalisation of China–U.S. relations in the 1970s. The 1972 Shanghai Communiqué laid the initial foundation for the U.S. “one-China policy”. It stated explicitly: “The United States acknowledges that all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China. The United States Government does not challenge that position.”

The Shanghai Communiqué was the product of an effort by China and the United States to seek common ground while reserving differences under the particular historical circumstances of the time, and it helped set the direction for the further development of bilateral relations. At that stage, the U.S. “one-China policy” rested on the formulation contained in the Shanghai Communiqué. It carried forward Washington’s preference for ambiguity and introduced a degree of ambiguity into the one-China principle itself. In particular, the terms “acknowledges” and “does not challenge” left clear room for interpretation. Richard C. Bush has described the U.S. formulation as “simultaneously artful, subtle, misleading, and somewhat confused.”12

As China–U.S. relations continued to improve, the two sides subsequently signed the Joint Communiqué on the Establishment of Diplomatic Relations and the August 17 Communiqué. Although the two communiqués addressed different issues, the United States preserved a degree of ambiguity in both. The Taiwan Relations Act, enacted amid disagreements between the executive branch and Congress and pressure from “pro-Taiwan forces” in the United States, further widened the scope for ambiguity within the U.S. “one-China policy”. It is also frequently regarded as the legal “cornerstone” of U.S. security commitments to Taiwan.

The Six Assurances given to Taiwan by the Reagan administration in 1982 were also gradually codified through continued efforts by the executive branch and Congress, and during Trump’s first term they were formally incorporated into the U.S. government’s “one-China policy” framework. By this point, the so-called U.S. “one-China policy” had evolved into a framework based on the three communiqués, the Taiwan Relations Act, and the Six Assurances. In the process, it increasingly departed from the one-China principle and from the policy’s original intent. As the scope for ambiguity continued to expand, the framework’s internal contradictions became increasingly pronounced.

Nevertheless, these adjustments broadly reflected changing views within the U.S. strategic community. Since 2014, as the view that the policy of engagement with China had failed gained ground, the strategic community’s consensus on China has shifted. In debates over Taiwan policy, the traditional status-quo camp has likewise placed growing emphasis on deterring China and playing the Taiwan card. This shift in mainstream consensus has been an important force driving the evolution of the U.S. “one-China policy”.

(3) Fragmentation of Consensus and Policy Response: The Biden Administration’s “Clarification” of Strategic Ambiguity

In their 2020 article, Richard Haass and David Sacks argued that the United States should move towards strategic clarity by making an explicit commitment to defend Taiwan. Their position created a split within the status-quo camp, which had long occupied the dominant position in the U.S. strategic community’s debate over Taiwan policy.

At the end of 2021, after U.S. President Joe Biden had already made several statements that appeared to move towards greater strategic clarity, Haass and Sacks published another article in Foreign Affairs. They criticised Biden administration officials for repeatedly “walking back” the president’s remarks and argued that the era of strategic ambiguity had run its course. While continuing to support the “one-China policy”, they maintained that the United States should move promptly towards strategic clarity and that only such a shift could help maintain the status quo.

It is worth noting that in a 2019 article, Haass had still affirmed the value of strategic ambiguity in preserving the status quo, writing: “The status quo is admittedly imperfect, but it is far less imperfect than what would follow unilateral actions and attempts to resolve a situation that doesn’t lend itself to a neat solution.”[^30] Given the prominence of Haass and Sacks within the U.S. strategic community, their change of position attracted widespread attention.

Their proposal also won broad support, including from the Taiwan-defence camp, particularly against the backdrop of growing calls in the United States for a stronger commitment to Taiwan. Retired Admiral James Stavridis argued that persisting with an ineffective policy of strategic ambiguity would lead to a miscalculation across the Taiwan Strait and set off a larger conflict. Veteran diplomats Eric Edelman, a former U.S. ambassador to Finland and Turkey, and Frank Miller argued that Washington’s policy of strategic ambiguity towards the Taiwan Strait is played out and that a shift towards strategic clarity would be consistent with the Taiwan Relations Act. Michael Waltz, then a member of the House of Representatives, and Matthew Kroenig, Vice President of the Atlantic Council’s Scowcroft Center for Strategy and Security, criticised the Biden administration for inconsistent signalling on Taiwan as it moved towards strategic clarity.

As the mainstream consensus within the U.S. strategic community fragmented, the Biden administration also showed clear signs of policy response.

First, Biden made statements of greater strategic clarity on at least five public occasions during his term in office. The first came in August 2021, when he was interviewed by ABC News. Asked whether the U.S. withdrawal from Afghanistan had implications for Taiwan, Biden invoked Article 5 of the North Atlantic Treaty to explain U.S. defence responsibilities towards Japan, South Korea, and Taiwan. The second came in October 2021, when Biden was asked whether “the United States would come to Taiwan's defence if China attacked”. He answered affirmatively.

The third came during Biden’s visit to Japan in May 2022, when he again said at a press conference that the United States would be willing to get involved militarily to defend Taiwan, providing greater support than it had provided Ukraine. The fourth came in September 2022, when Biden told CBS’s 60 Minutes that U.S. forces would defend Taiwan in the event of an “unprecedented attack”. This was also his clearest and most explicit statement on the issue.

The fifth came in June 2024, when Biden told TIME that whether the United States would use force to defend Taiwan would depend on the circumstances, including if China unilaterally tries to change the status quo. Compared with his earlier remarks, this formulation was more qualified, largely because the inauguration of Lai Ching-te, who has maintained a hard-line pro-independence position, posed a serious challenge to the U.S. objective of maintaining the status quo, prompting the U.S. government to adjust its position to some extent.

Second, each of Biden’s statements of strategic clarity was subsequently clarified or “walked back” by administration officials. After Biden’s first such statement in August 2021, a senior administration official said that U.S. “policy with regard to Taiwan has not changed.” National Security Advisor Jake Sullivan later noted that “when it comes to Taiwan, it is a fundamentally different question in a different context.” Following Biden’s public remarks during his May 2022 visit to Japan, a White House official reiterated the long-standing one-China policy and the U.S. commitment to peace and stability across the Taiwan Strait. Kurt M. Campbell, then serving as the National Security Council’s Coordinator for Indo-Pacific Affairs and later Deputy Secretary of State, also opposed a shift towards strategic clarity, arguing that changing the United States’ long-standing Taiwan policy would have “significant downsides”. Nicholas Burns, then U.S. Ambassador to China, likewise stated at a congressional hearing that the United States would be more effective in staying with the one China policy of the last four decades and that the U.S. government remained committed to strategic ambiguity.[^41]

Overall, Biden’s repeated moves towards strategic clarity, followed by official “walk-backs”, ultimately produced an effect resembling strategic ambiguity. In practical terms, this did not mean that the U.S. government had shifted to strategic clarity. Rather, it represented a tactical adjustment within the established framework of strategic ambiguity, accompanied by repeated attempts to test the boundaries of greater clarity.

As a conventional establishment administration, the Biden administration was more responsive to the mainstream consensus within the U.S. strategic community. The growing divisions among different camps and the fragmentation of that consensus also helped shape its Taiwan policy. While the deterrence-rebalancing camp, which supported strategic clarity, gained ground rapidly, most members of the status-quo camp continued to favour strategic ambiguity. Together, the status-quo camp and the emerging gradual Taiwan-abandonment camp pushed back against the deterrence-rebalancing camp, limiting the Biden administration’s room for policy change.

In an expert survey conducted by Foreign Affairs at the end of 2022 on the question “Should the United States Pledge to Defend Taiwan?”, 39 respondents disagreed with such a pledge, while only eight agreed. A number of prominent Democratic scholars, including Ben Rhodes and Ryan Hass, also opposed a shift towards strategic clarity. Bonny Lin argued in congressional testimony that there are likely only marginal gains to be had from clarifying the U.S. defence commitment to Taiwan, while potentially strengthening China’s incentives to strike first against the United States or its coalition partners in a Taiwan contingency.

The Biden administration’s repeated experiments with the “clarification” of strategic ambiguity reflected continuing divisions within the U.S. strategic community. The mainstream consensus that had long underpinned U.S. Taiwan policy had become increasingly fragmented, while debate among the major camps had yet to produce a clear alternative. Against this backdrop of fragmented strategic consensus, the Biden administration’s approach can also be understood as a pragmatic way of balancing competing domestic positions.

Since 2021, both the U.S. government and the strategic community have been deeply affected by the withdrawal from Afghanistan and the Russia–Ukraine conflict, prompting serious concern over the erosion of U.S. global deterrence. The “Ukraine-ization” of the Taiwan question has become a mainstream strand of strategic thinking.13 In the Biden administration’s global strategy, the narrative of “democracy versus autocracy”, efforts to revitalise the global alliance system, and the goal of restoring U.S. leadership have led to an unlimited inflation of Taiwan’s strategic value to the United States. Against the broader backdrop of strategic competition with China, the unrestrained playing of the Taiwan card has also become an important feature of U.S. policy.

In practice, however, U.S. strategic capabilities no longer allow Washington to pursue everything at once. The Biden administration’s Taiwan policy has deepened the United States’ strategic dilemma in the Strait and heightened the risk of tensions there. The view that Taiwan has become a “negative asset” for the United States has gradually gained ground, further fuelling a new round of debate over U.S. Taiwan policy.

IV. Taiwan Policy in Trump’s Second Term amid the New Landscape of Policy Debate

In the Trump 2.0 era, debate within the U.S. strategic community over Taiwan policy has entered a new phase. On the one hand, the Taiwan-defence camp and the deterrence-rebalancing camp within the status-quo camp have lost momentum, while the mainstream consensus favouring a return to strategic ambiguity has regained ground. On the other hand, arguments for abandoning Taiwan have gained significant traction within the U.S. strategic community. The strategic retrenchment and foreign-policy restraint advocated by the New Right have provided important intellectual support for this resurgence of the Taiwan-abandonment argument, while Trump’s return has further created favourable conditions for the growth of the gradual Taiwan-abandonment camp.

First, the Trump administration’s preference for avoiding war, together with the revival of the mainstream consensus within the U.S. strategic community, is pushing U.S. Taiwan policy back towards traditional strategic ambiguity. The Trump administration seeks to preserve regional stability while extracting commercial benefits through transactional bargaining. The new National Security Strategy highlights Taiwan’s importance to the global semiconductor industry and its geographic value along the first island chain, but ultimately places greater emphasis on protecting U.S. economic interests in the region. For Trump, Taiwan’s strategic value is far outweighed by that of the Chinese mainland. As John Bolton recalled in his White House memoir, Trump often compared Taiwan to the tip of a Sharpie pen and China to the Resolute Desk in the Oval Office.14

During his second term, Trump has treated Taiwan as both a bargaining chip in his broader dealings with China and a means of preserving the stability and predictability of those dealings. This reflects a clear tendency to use the Taiwan card in reverse. In public statements, Trump has referred openly to Taiwan on at least four occasions since returning to office, maintaining a posture of strategic ambiguity.

The first came after the China–U.S. economic and trade teams held talks in Geneva in May 2025. At a White House press conference, Trump said: “They've agreed to open China, fully open China, and I think it's going to be fantastic for China, I think it's going to be fantastic for us, and I think it's going to be great for unification and peace.”

The second came in August 2025, when Trump said in an interview with Fox News that Xi Jinping had told him: “I will never do it as long as you’re president.”

The third came on 20 October 2025, when Trump was asked about the possibility of the Chinese mainland “attacking” Taiwan and replied: “I think we’ll be just fine with China. China doesn’t want to do that.”

The most recent came in a January 2026 interview with The New York Times, in which Trump said, “He [Xi Jinping] considers it to be a part of China, and that's up to him what he's going to be doing. In practice, Trump has also appeared to prioritise the broader prospects for China–U.S. negotiations, including by declining to approve a planned U.S. transit by Lai Ching-te and by cancelling a planned meeting between U.S. and Taiwan defence officials.

Viewed through the lens of policy debate and strategic consensus, Washington’s emerging gradual Taiwan-abandonment camp has reached a temporary consensus with the traditional status-quo camp on strategic ambiguity. This convergence has become an important force in reconsolidating the mainstream consensus and has provided necessary support for the Trump administration’s continued adherence to strategic ambiguity. Some strategic analysts have already expressed approval of the restraint in the Trump administration’s Taiwan policy.

It should be emphasised, however, that this return does not reflect a deeper recognition by Trump of the complexity of the Taiwan question or of the need for the United States to return to strategic ambiguity. Rather, strategic ambiguity better serves his preference for stable transactional bargaining with China while allowing the United States to distance itself from regional risks. If China–U.S. economic and trade negotiations run into difficulties in the future, Trump may once again turn to the Taiwan card.

Second, the Trump administration is reinforcing the minimum consensus within the U.S. strategic community that Taiwan’s defence capabilities should be strengthened. Across the contemporary U.S. strategic spectrum, from the Taiwan-defence camp to the radical Taiwan-abandonment camp, there is broad support for Taiwan devoting greater resources to its own defence and developing asymmetric capabilities and a porcupine strategy.

The Taiwan-defence camp sees U.S.–Taiwan defence cooperation as a means of demonstrating and reinforcing the U.S. commitment to Taiwan. The Taiwan-abandonment camp, by contrast, regards stronger Taiwanese self-defence capabilities as a prerequisite for an eventual U.S. withdrawal. Even Charles L. Glaser, a leading advocate of Taiwan abandonment, has argued that the United States should explicitly end its commitment to use force to defend Taiwan, while continuing to help Taiwan defend itself through arms and training and supporting a full shift towards a porcupine strategy.

Strategic consensus affects decision-making in two ways: the mainstream consensus constrains government policy, while the minimum consensus exerts strong pressure for government action. The minimum consensus to strengthen Taiwan’s defence capabilities is therefore likely to remain one of the more certain directions of the Trump administration’s Taiwan policy, including expanded arms sales to Taiwan.

Trump’s own pursuit of greater arms sales for profit further reinforces this tendency. Taken together, these two factors helped drive the U.S. government’s approval in December 2025 of an arms-sales package to Taiwan worth about US$11.1 billion, including HIMARS rocket systems, Javelin, and TOW anti-tank missiles. The package demonstrated a clear U.S. intention to reshape Taiwan’s asymmetric defence system.

Third, the Trump administration is pursuing a strategy of maximum extraction and de-risking towards Taiwan, seeking to make Taiwan serve U.S. interests across the board. Trump’s foreign policy is centred on “Making America Great Again”. In practice, this means promoting U.S. global strategic retrenchment by shedding external commitments while using maximum pressure to force allies and partners to shoulder greater burdens.

This strategy of maximum extraction towards Taiwan is reflected mainly in two areas. First, Trump has pressed Taiwan to dramatically hike its defence spending. Elbridge Colby, U.S. Under Secretary of Defence, stated explicitly at a congressional hearing that Taiwan should raise defence spending to around 10 per cent of GDP. Trump has likewise expressed dissatisfaction with Taiwan’s level of defence spending, arguing that Taiwan has failed to shoulder its responsibilities and has instead relied on U.S. protection. The United States is therefore bound to pressure Taiwan to devote itself fully to developing asymmetric defence capabilities.

Second, Trump has demanded that Taiwan substantially reduce its trade surplus with the United States and has sought, through a variety of means, to “hollow out” Taiwan. These measures include pressing Taiwan to expand purchases of U.S. agricultural products, energy, and defence equipment, while sharply increasing U.S.-bound investment by Taiwan’s advanced manufacturing industries. U.S. Commerce Secretary Howard Lutnick has even proposed a “50-50” split in semiconductor production between the United States and Taiwan, in an effort to turn TSMC into a “USSMC” — a United States Semiconductor Manufacturing Company. In the future, this could develop into demands that Taiwan relocate its entire semiconductor supply chain to the United States.

Taken together, Trump 2.0’s Taiwan policy displays clear characteristics of “de-risking”. Specifically, it seeks to reduce the strategic risks to the United States associated with defending Taiwan; eliminate supply-chain risks arising from the excessive concentration of semiconductor manufacturing in Taiwan; reduce risks stemming from the U.S. trade imbalance with Taiwan; and push Australia, Japan, South Korea, and the Philippines into serving as U.S. “frontline pawns” in a Taiwan Strait conflict, thereby shifting the risks of conflict and the associated responsibilities onto U.S. allies.

Fourth, the Trump administration’s Taiwan policy is closely connected to the current resurgence of Taiwan-abandonment arguments. Since 2024, the gradual Taiwan-abandonment camp — which advocates maintaining strategic ambiguity and preserving the status quo for the time being, while ultimately seeking to abandon Taiwan — has continued to grow. Defense Priorities, an organisation closely associated with the New Right, has become an important intellectual source for this line of thinking. Jennifer Kavanagh, a prominent representative of the gradual Taiwan-abandonment camp at the organisation, has repeatedly argued that Taiwan is of limited value to the United States and is not worth the risk of war with the Chinese mainland.

The argument that the United States should decouple its regional interests from Taiwan is, in essence, an effort to prepare for the eventual abandonment of Taiwan and to secure a “soft landing” for U.S. hegemony in the Western Pacific. Lyle Goldstein, director of the Asia Program at Defense Priorities, likewise argued in TIME that “the U.S. must beware of Taiwan’s reckless leader.”

At the same time, the Western liberal mainstream narrative that the Taiwan authorities have long sought to embrace sits uneasily with the political ideas of the New Right and has also drawn aversion from Trump himself. Christian Whiton, a senior adviser during Trump’s first term, published an article accusing the Taiwan authorities of being “beholden to lefty cultural issues, indifferent to U.S. business, unserious about defence and unwilling to close a trade deficit.”

The Trump administration’s policies of “maximum extraction” and “de-risking” partly overlap with the current gradual Taiwan-abandonment argument. More specifically, the gradual Taiwan-abandonment camp has put forward three approaches that align with Trump’s preferences.

First, “transactional Taiwan abandonment”: treating Taiwan as a bargaining chip in dealings with the Chinese mainland in exchange for tangible benefits.

Second, “instrumentalisation of Taiwan abandonment”, an approach that the Trump administration is already putting into practice. It uses the possibility of “abandoning Taiwan” as a tool of “maximum pressure” to force Taiwan to make greater concessions across multiple areas. In particular, it requires Taiwan to commit first to defence self-reliance in exchange for vague and uncertain U.S. support or commitments.

Third, an end-state approach to Taiwan abandonment: assuming that the United States will eventually lose Taiwan, Washington should accelerate the final round of maximum extraction and hollow it out with every possible means before that happens.

Overall, both New Right forces and the Trump administration increasingly see Taiwan as more of a “liability” than an “asset”, while the long-standing bipartisan consensus in support of Taiwan has begun to erode. Although the Trump administration is unlikely to publicly “abandon Taiwan”, its push for “defence self-reliance” and the loss of TSMC could ultimately strip Taiwan of its strategic value to the United States. This policy of “de-risking” is therefore undoubtedly a prelude to eventual U.S. abandonment of Taiwan.

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Pekingnology

Beijing renews calls for Taipei to open up tourism upon my FT oped

Yesterday/Wednesday, March 5, at the first weekly press conference of the Taiwan Affairs Office after the Lunar New Year, my February 26 op-ed in the Financial Times Let Chinese mainland tourists return to Taiwan came up…

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8 months ago · 21 likes · 1 comment · Zichen Wang

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Cheng Li-wun did NOT redefine 1992 Consensus. She stood up for it.

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6 months ago · 15 likes · 2 comments · Zichen Wang and Yuxuan JIA

We have previously discussed related questions, including whether China has massively overbuilt high-speed rail in our sister newsletter, Pekingnology. In today’s article, Li Xunlei, Chief Economist at Zhongtai Financial International Limited, a leading Chinese investment bank, takes a data-driven look at the broader issue of China’s transport overcapacity.

Li argues that China’s transport infrastructure, including expressways, railways, and urban public transport, has already developed structural overcapacity: in less-developed regions, infrastructure expansion has often exceeded what local populations and economies can support, while the continued expansion of transport networks has been accompanied by lower utilisation, weaker investment returns, and heavier debt burdens. Demographic changes, declining population mobility, and greater population concentration in major cities are only going to widen these mismatches.

The article was originally published on 27 August 2026 on 李迅雷金融与投资 Finance & Investment with Li Xunlei, Li's personal WeChat blog.

Li has kindly reviewed and authorised the translation.

— Yuxuan Jia

被忽视的运能过剩

The Overlooked Transport Overcapacity

As early as 2009, I took an interest in Guizhou Province’s expressway development plan, which projected that the province’s total expressway mileage would reach 6,851 kilometres by 2030. At the time, Japan had the world’s second-largest economy and a total expressway network of 6,300 kilometres, while Guizhou ranked relatively low among Chinese provinces in terms of GDP. If Guizhou’s expressway network was actually going to become longer than Japan’s, would that result in excess expressway capacity in the province? This question led me to write an article titled Expressways: A Road to Prosperity or Desolation?

Seventeen years have now passed. Before 2008, inadequate infrastructure was a major constraint on China’s economic development. Today, China is a global leader in infrastructure. That transformation has helped make China one of the world’s leading manufacturing nations and supported its push to become a manufacturing powerhouse. At the same time, however, structural overcapacity has emerged in some traditional industries, while relatively little academic attention has been paid to the supply-demand balance in road transport infrastructure.

Based on the data collected for this article, my preliminary conclusion is that China’s road transport infrastructure is enormous in scale and technologically advanced, but suffers from structural overcapacity in total network mileage, total passenger capacity, and geographic distribution. For convenience, I will refer to this phenomenon as “transport overcapacity”.

Expressways: Excessive Total Mileage and a Mismatch Between Regional Distribution and Economic Density

By the end of 2025, Guizhou’s total expressway mileage had already reached 9,563 kilometres, far exceeding the target originally set for 2030. Estimates of Japan’s total expressway mileage vary, but according to The Japan Times, it stood at 10,328 kilometres at the end of March 2025. The two were therefore not far apart. Yet in 2025, Japan’s GDP was 13.4 times that of Guizhou.

Nationwide, China’s total expressway mileage reached 199,400 kilometres by the end of 2025, almost twice the 106,000 kilometres in the United States.

Moreover, as the total length of the expressway network continues to expand, traffic intensity has steadily declined. A cross-sectional comparison for 2024 shows that provinces with more expressway mileage did not necessarily have higher freight-use intensity, suggesting that later expansion of the network has increasingly become detached from actual demand.

Guizhou, for example, had about 9,000 kilometres of expressways in 2024, but its freight intensity was only 3.93 billion tonne-kilometres per 10,000 kilometres of expressway, far below Guangdong’s 12.59 billion tonne-kilometres per 10,000 kilometres. Tibet, Hainan, Qinghai, Sichuan, and Yunnan also recorded freight intensity of less than 5 billion tonne-kilometres per 10,000 kilometres.

Mismatch Between Expressway Distribution and Freight Traffic Intensity

My team calculated the compound annual growth rates of expressway mileage and road freight turnover between 2014 and 2024. In the five provincial-level regions where expressway mileage grew fastest — Tibet, Yunnan, Guangxi, Qinghai, and Guizhou — mileage grew by at least 8.48% year on year, while road freight turnover increased by only 1.8% on average.

By contrast, in the five regions where expressway mileage expanded most slowly, road freight turnover grew by an average of 4.8% a year. In Shanghai, for example, expressway mileage increased by only 0.7% annually, while freight turnover rose by as much as 12.1%. In Zhejiang, expressway mileage grew by 3.75% a year, while freight turnover increased by 9.32%.

The conclusion is clear: the places that built the most expressways were often those where freight demand grew the least.

The same issue can be seen in road passenger transport. Since China’s total passenger traffic had already peaked in 2012, the continued expansion of the road network meant that the passenger traffic carried by each kilometre of road would decline. Passenger intensity fell from a peak of 436,000 passenger-kilometres per kilometre of road in 2012 to just 91,000.

Road Traffic Intensity in China

Of course, these figures do not include journeys made by private car. China’s vehicle stock has risen sharply over the past two decades, driven mainly by growth in private car ownership. Yet even with China leading the world in annual automobile sales, vehicle use per kilometre of expressway remains relatively low.

Motor Vehicles per Kilometre of Expressway in Major Countries, 2025

Based on 2025 data, China had 1,847 motor vehicles for every kilometre of expressway, compared with 3,672 in the United States, 2,662 in Japan, 5,333 in South Korea, and 3,416 in France. Clearly, the density of vehicles per kilometre of expressway in China was lower than in all of these countries.

China’s vehicle stock has grown rapidly in recent years, but growth in automobile sales slowed sharply in 2026, while total expressway mileage continued to increase quickly. At the same time, vehicle density is much higher on expressways in the more developed eastern regions. This points to a dual structural imbalance: some areas face capacity shortages, while others have overcapacity. In aggregate, however, expressway capacity remains excessive.

Building roads and bridges and digging tunnels can undoubtedly support economic development and improve people’s lives. The key question is whether the input-output ratio is reasonable.

Because expressway construction has largely been financed through borrowing, the financial position of toll roads is particularly important. According to the National Toll Road Statistical Bulletin 2021, toll-road revenue nationwide totalled RMB 663.1 billion in 2021, while total expenditure reached RMB 1.2909 trillion, leaving a shortfall of RMB 627.9 billion. (The shortfall reached a record RMB 747.8 billion in 2020, compared with RMB 485.0 billion in 2019.)

Of total expenditure, RMB 1.0592 trillion went towards principal and interest payments on debt, RMB 73.9 billion towards maintenance, RMB 30.7 billion towards the expansion and upgrading of roads and auxiliary facilities, RMB 83.9 billion towards operations and management, and RMB 43.3 billion towards taxes and fees. These accounted for 82%, 5.7%, 2.4%, 6.5% and 3.4% of the total, respectively. In other words, a full year of toll revenue was not even enough to cover principal and interest payments on debt.

Since the Ministry of Transport stopped publishing toll-road statistics after 2021, it is difficult to conduct further analysis. However, fragmentary data released in recent years suggest that road-toll revenue has stopped rising. One possible reason is that expressways built towards the end of the last century are gradually approaching the end of their 30-year tolling periods, meaning that a wave of expressways becoming toll-free may have arrived.

Although some expressway sections may be able to extend their tolling periods through expansion and reconstruction projects, doing so inevitably adds to investment costs.

At the same time, expressways built earlier were generally on routes with stronger transport demand and heavier traffic, while those built later tend to carry less traffic. This suggests diminishing returns on investment in toll roads.

One indication is the median return on invested capital (ROIC) of local government financing vehicles, which fell from 3.1% in 2011 to 1.3% in 2020. This may also help explain why private companies now account for an increasingly small share of investment in expressway projects.

Railways: Structural Overcapacity

Between 2015 and 2025, China’s railway network expanded from 121,000 to 165,000 kilometres. Yet freight turnover per 10,000 kilometres of railway fell by about 45% from its 2010 peak and has remained broadly flat ever since, while passenger traffic intensity is still below its 2019 level.

Rail Traffic Intensity: Passenger and Freight Turnover per 1,000 km of Railway

Rail freight volumes have been sustained largely by coal shipments shifted from road to rail, while the average rail freight distance fell steadily from 825 kilometres in 2017 to 693 kilometres in 2024, pointing to a structural decline in demand for long-distance freight transport.

Freight Mix and Average Haul on China’s National Railways, 1990–2024

Growth in rail freight has been highly concentrated in resource-export corridors in Xinjiang, Tibet, and Gansu, while freight volumes in a number of eastern and northeastern provinces have declined. National aggregate figures therefore conceal considerable regional underutilisation. Between 2019 and 2024, rail passenger volumes fell in all three northeastern provinces.

China’s development of high-speed rail over the past two decades has been a remarkable achievement. By the end of 2025, China had 50,400 kilometres of high-speed rail in operation, accounting for more than 70% of the world’s total operating high-speed rail mileage of 58,800 kilometres. China’s target for 2030 is 60,000 kilometres.

China’s new high-speed rail mileage peaked in 2014, then declined for several years before recovering in 2018–2019. After the COVID-19 pandemic ended in 2022, marginal passenger intensity also rebounded sharply — that is, the additional transport demand generated by each additional 10,000 kilometres of railway.

New High-Speed Rail Openings and Marginal Passenger-Traffic Intensity: Five-Year Rolling Calculation

However, publicly available data show that passenger volume per unit of high-speed rail mileage had already peaked in 2018, at 708 million trips per 10,000 kilometres. In 2024, the figure stood at 682 million, still below its pre-pandemic level.

Thus, although the total length of the high-speed rail network increased by 65% between 2018 and 2024, passenger volume per kilometre had still not returned to its 2018 peak. Moreover, in regions experiencing population outflows, the passenger base for high-speed rail services is shrinking.

Annual High-Speed Rail Ridership per 1,000 km of Network

High-speed rail has undoubtedly made travel much more convenient and significantly shortened journey times. But the enormous cost of building high-speed rail and the debt burden it has created cannot be ignored.

By the end of 2025, China State Railway Group had total outstanding debt of RMB 6.17 trillion, of which RMB 5.04 trillion was interest-bearing debt.

Looking ahead, China’s total population is declining, and its migrant population has been falling since 2014. Yet the high-speed rail network continues to expand. It therefore remains highly uncertain whether the railway sector will be able to bring its borrowing levels down on a sustained basis.

Civil Aviation: Feeling the Impact of High-Speed Rail

I once wrote an article titled One Billion in China Have Never Been on a Plane. Many readers took it to mean that I was optimistic about China’s aviation industry. In fact, without such rapid expansion of high-speed rail, air passenger throughput would probably have grown much faster.

The year 2008 marked the beginning of China’s high-speed rail era. The data show that high-speed rail has significantly diverted passengers away from civil aviation. For example, annual passenger traffic per 10,000 kilometres of air routes peaked in 2009 and has been declining ever since.

Moreover, the air-route network has expanded faster than air passenger traffic. By 2024, annual passenger volume per aircraft was still below its 2019 level, while high-speed rail was carrying 4.5 times as many passengers as civil aviation, with the gap continuing to widen.

Passenger Traffic per Aircraft and per 1,000 km of Air Routes

China’s civil aviation industry should therefore fully factor in the impact of high-speed rail, expressways, and emerging forms of transport such as autonomous vehicles when planning airport construction, route development, and aircraft procurement.

Passenger Volume Gap Widens: High-Speed Rail versus Civil Aviation

According to the 2025 Statistical Bulletin on the Production of Civil Transport Airports issued by the Civil Aviation Administration of China, China had 270 certified transport airports by the end of 2025. Of these, 41 handled more than 10 million passengers a year, and together they accounted for 83.7% of total passenger throughput. In other words, more than 85% of the country’s airports shared less than 16% of total traffic. At the bottom of the distribution, some small airports handled almost no passengers, and most were under financial pressure.

Airport passenger traffic is also becoming increasingly polarised. Airports in Beijing, Shanghai, and Guangzhou together accounted for 22.4% of national passenger throughput, up 0.7 percentage points from 2024.

Meanwhile, 191 airports handled fewer than 2 million passengers a year, five more than in 2024, and together accounted for only 5.9% of total passenger traffic, an even smaller share than in the previous year.

For example, Terminal 1 at one airport handled more than 10 million passengers in 2019, but only 8.03 million in 2025, and the figure may be even lower in 2026.

Why did passenger throughput fall rather than rise over those six years? This was probably related to the opening of several high-speed rail lines serving the same city, with still more such lines being added.

Terminal 2 at the same airport, begun in 2020 and opened in 2024, was designed for 23 million passengers a year. Its opening took Terminal 1 — in service only since 2015 — out of passenger use after just nine years, with plans to convert it into office space. That is a great pity.

Therefore, infrastructure investment, including airport construction, needs to be much more forward-looking, taking into account future population trends and the development and geographic distribution of high-speed railways, expressways, and other transport infrastructure.

China is seeing an increasing concentration of population in major cities. Tier-three, tier-four, and tier-five cities are generally experiencing net population outflows, as are the three northeastern provinces, Shandong, Hebei, and much of central and western China. Against this backdrop, declining passenger throughput at most airports is inevitable.

Buses and Metros: Overall Overcapacity and Structural Imbalances

I once came across a Shanghai television report in which public transport staff said that buses in Lujiazui Financial City carried an average of just 1.5 passengers each between 8 a.m. and 2 p.m.

The decline in bus ridership is probably related to the rapid development of metro systems and the growing popularity of private cars, ride-hailing services, and shared bicycles.

Nationwide, annual passenger volume per bus fell to just 33% of its 2010 level by 2025. Passenger volume per kilometre of bus-route network declined even more sharply, to only 16% of its 2010 level, despite continued growth in both the bus fleet and route network.

Bus Ridership per Vehicle and per Kilometre of Route Network (Indexing 2010 Level at 100)

Passenger volume per bus has fallen by between 40% and 75% in all 31 provincial-level regions, showing that the problem is nationwide rather than confined to a handful of cities.

In Hebei, Henan, and some other provinces, passenger volume per bus has fallen by more than 70%. Yet the overall size of the bus fleet does not appear to have been reduced substantially. At the same time, environmental requirements have led to the replacement of fuel-powered buses with electric ones.

As of June 2026, China had 11,813 kilometres of urban rail transit in operation, including 10,224 kilometres of metro lines, equivalent to 45% of the world’s total operating metro mileage of 22,790 kilometres.

China, however, accounts for only about 17.5% of the world’s population, and that share is likely to decline further.

According to the Urban Rail Transit 2025 Statistics and Analysis Report released by the China Association of Metros, 58 Chinese cities had urban rail transit systems in operation by the end of 2025, with 382 lines covering more than 13,000 kilometres after a net increase of over 900 kilometres during the year. Metro lines alone exceeded 10,000 kilometres, the highest total in the world.

Under Ministry of Transport requirements, proposed metro and light-rail lines should have an initial passenger intensity of at least 7,000 and 4,000 passenger trips per route-kilometre per day, respectively, and projected peak-hour flows in the busiest direction of at least 30,000 and 10,000 passengers, respectively.

Actual passenger intensity, however, remains relatively low. Of the 41 cities with metro systems, only 27 had disclosed passenger-intensity data as of 15 August 2026, and just 15 met the 7,000-passenger benchmark. On this basis, more than half of the cities with metro systems are estimated to fall below the threshold. Across all 58 cities with urban rail transit, average passenger intensity was only 5,800 trips per kilometre in 2025, down 5.57% from 2024.

Average Daily Metro Ridership per Kilometre, Last 30 Days (Thousand Passenger Journeys per Kilometre of Metro Network)

Metro construction is expensive. Core lines in China’s first-tier cities generally cost more than RMB 1 billion per kilometre, while those involving difficult geological conditions or high relocation costs can exceed RMB 1.5–2.0 billion per kilometre.

For example, metro construction currently costs about RMB 2 billion per kilometre in Shanghai and close to RMB 1 billion in Guangzhou, compared with a more typical RMB 500–800 million in other cities.

Annual operating and maintenance costs are also high, at around RMB 10–15 million per kilometre. This places a heavy fiscal burden on local governments. In 2024, for example, the Beijing government provided RMB 24.852 billion in subsidies for its metro system, while Qingdao, Ningbo, Chengdu, Shenzhen, and several other cities also received more than RMB 7 billion in government subsidies.

In 2025, 3,125.28 kilometres of high-capacity urban rail systems, mainly metros, were under construction, along with 1,620.28 kilometres of medium-capacity systems, including light rail, suburban rapid rail and maglev lines. China’s urban rail capacity is therefore set to expand substantially in the years ahead, even as its total population declines and migration from tier-three, tier-four, and tier-five cities towards larger tier-one and tier-two cities accelerates.

The Causes of Transport Overcapacity and Possible Responses

After examining overcapacity across roads, railways, aviation, and urban public transport, a natural question arises: why has transport overcapacity become so widespread across China’s provinces and cities? And why do many local governments continue launching major construction projects despite already facing considerable debt pressure?

According to data from the National Bureau of Statistics, total passenger traffic peaked as early as 2012 at 38.1 billion trips (excluding passengers travelling in private cars) and has been declining ever since.

China’s migrant population, meanwhile, peaked at about 253 million in 2014 before beginning to decline. Although the Seventh National Population Census recorded a sharp rise to 376 million in 2020, this reflected a change in statistical coverage rather than a genuine reversal of the trend.

In other words, passenger transport demand reached its ceiling roughly a decade before China’s total population peaked in 2021. Yet transport infrastructure investment has continued, with the actual construction and commissioning of high-speed railways, expressways, metros and other facilities often far exceeding earlier plans.

Total Passenger Traffic Peaked Before the Population Did

Why, then, do local governments remain so enthusiastic about infrastructure investment? There are several possible reasons.

First, there is the long-standing belief that “if you want to get rich, build roads first”. Faster and more convenient transport can undoubtedly support economic development, but greater mobility of people and other local economic resources can affect different regions in very different ways.

In previous research, for example, my team examined population changes in cities along the Beijing–Shanghai High-Speed Railway and found that net population outflows accelerated after the line opened. A similar pattern emerged in Japan after the Shinkansen linked Osaka more closely with Tokyo, with more people moving from Osaka to Tokyo.

Second, road and bridge construction has become an important tool for many localities seeking to boost economic growth. Investment can lift GDP quickly, but transport infrastructure often delivers relatively low returns. As a result, fiscal spending can rise much faster than revenue, adding to debt pressure over time. By our calculations, China’s outstanding government debt has grown at more than three times the rate of real GDP over the past five years.

Third, some local officials still place too much emphasis on highly visible infrastructure projects as a measure of their performance, while paying too little attention to underlying problems such as population outflows and weak local industries. This adds further strain to local government finances.

So how should China respond as transport overcapacity becomes increasingly severe in the years ahead?

In a recent article titled Where Is China’s Population Heading? (2026 Edition), my team projected that China’s population could fall below 1.3 billion in 2039 and below 1.2 billion in 2047. We also forecast that China could become a super-aged society by 2031, with people aged 65 and above accounting for more than 20% of the population, further reducing population mobility.

At the same time, the population are likely to become more concentrated in the major cities of the Yangtze River Delta and Pearl River Delta and, in western China, around Chengdu.

Number of Cities Recording Net Population Inflows and Outflows, 2025

Official data show that between 2017 and 2025, only 11 of mainland China’s 31 provincial-level regions recorded net population inflows after excluding natural population growth. Zhejiang overtook Guangdong to rank first nationwide: its permanent resident population rose from 61.70 million in 2017 to 67.01 million in 2025, an increase of 7.6%, compared with 2.1% in Guangdong over the same period.

The concentration is even more striking within the more developed regions. Between 2017 and 2025, Guangzhou and Shenzhen accounted for more than half of Guangdong’s increase in permanent residents, while Hangzhou and Ningbo accounted for more than 95% of Zhejiang’s. Population growth in Suzhou, Nanjing and Chengdu also far exceeded the overall increases in their respective provinces.

Against this backdrop, we propose measures covering demographic and migration trends as well as market mechanisms.

First, China’s macroeconomic policymakers should take greater account of future population decline, lower population mobility, and changing patterns of regional migration. The National Development and Reform Commission should lead a cross-ministerial coordination mechanism to reassess investment plans for high-speed railways, expressways, airports, and other major transport infrastructure.

As noted above, China’s population is likely to become increasingly concentrated in first-tier cities, new first-tier cities, and provincial capitals. In the future, perhaps two-thirds of Chinese cities will experience net population outflows, while more than 80% may see declines in their permanent resident populations. Transport planning should therefore look further ahead. In economically developed regions where population inflows are expected to continue, expressways, high-speed railways and metro lines should still be built where necessary. In more remote areas likely to experience substantial population outflows, however, investment in railways, expressways, and airports should be strictly constrained.

Fiscal transfers now exceed RMB 10 trillion and account for an increasingly large share of China’s public expenditure. Yet they often flow in the opposite direction from population movements, which appears inconsistent with the principle of equal access to basic public services. As China places greater emphasis on “investment in people”, fiscal transfers should better reflect where people live and move, making public spending more effective.

Moreover, local governments account for as much as 86% of China’s fiscal expenditure, leaving the central government with limited room for macroeconomic management. In infrastructure investment, a greater share of responsibilities and fiscal resources should be shifted to the central level, with local governments taking on a smaller share. This would also increase the central government’s share of overall fiscal expenditure.

Second, at the operational level, the debt pressure created by continued expansion of transport capacity needs to be addressed, including through more flexible pricing for buses, urban rail, and high-speed rail. For example, high-speed rail fares could be adjusted more flexibly across seasons to better reflect fluctuations in demand. Among China’s first-tier cities, Shenzhen, Guangzhou, Beijing and Shanghai recorded relatively high metro passenger intensity in 2025 and could consider fare increases.

Meanwhile, travel subsidies for elderly people, vulnerable groups, people with disabilities or illnesses, and low-income residents could instead be provided through discounted fare schemes targeted specifically at these groups. The eligibility threshold for elderly benefits should be aligned with international practice and set at 65 and above. The broader direction of reform should be to shift public transport from a universal benefit for all passengers towards support focused on specific groups, making subsidies more targeted while reducing the fiscal burden.

Urban bus routes in significant oversupply should be reduced or suspended where appropriate. Some routes could be contracted out to private transport operators to better meet the travel needs of different passenger groups. Reducing an oversized bus fleet would not only ease fiscal pressure but also help relieve congestion on urban roads.

Third, local officials should uphold the principle that “new officials must also deal with legacy problems” and adopt a correct view of governance performance. For completed expressways, high-speed railways, and urban rail networks that have fallen short of the passenger, traffic-intensity, or revenue targets set in their original feasibility studies, the reasons should be carefully examined and accountability imposed where appropriate.

To address local governments’ long-standing reliance on infrastructure investment to drive GDP growth, a stricter performance evaluation framework is needed to curb inefficient investment. For example, current Ministry of Transport requirements for launching urban rail projects consider passenger intensity, local GDP, and fiscal revenue, but not local debt levels. A city’s debt burden should also be taken into account when determining whether it qualifies to build a metro system.

Appendix: Notes on Units of Measurement

Passenger journeys (billion journeys): The number of passenger journeys made in a year, irrespective of distance travelled. Each trip counts as one passenger journey, whether the passenger travels 2 kilometres or 2,000 kilometres. This measure indicates the total number of journeys provided by a transport service.

Passenger turnover (billion passenger-kilometres): Passenger turnover is calculated by multiplying the number of passenger journeys by the distance travelled: passenger journeys × kilometres. For example, one passenger travelling 100 kilometres generates 100 passenger-kilometres. By incorporating both passenger numbers and distance travelled, this measure reflects the total volume of transport work performed.

The distinction: Passenger journeys measure how many trips were made, while passenger turnover measures both how many trips were made and how far passengers travelled. Passenger turnover is therefore the appropriate measure when comparing how intensively different routes are used. For example, if Shanghai Metro Line 2 and the Beijing–Guangzhou high-speed railway each carry 100 million passenger journeys, but their average journey lengths are 10 kilometres and 1,000 kilometres respectively, the passenger turnover of the former is only 1% of that of the latter.

Freight volume (billion tonnes) and freight turnover (billion tonne-kilometres): The same principle applies to freight transport. Freight volume measures the weight of goods carried, while freight turnover is calculated as tonnes carried × kilometres travelled.

Traffic intensity (thousand passenger-kilometres per kilometre for passenger transport; thousand tonne-kilometres per kilometre for freight transport): This measure is calculated as turnover ÷ total route length. It distributes the total transport work performed in a year across each kilometre of the network, indicating how intensively the network is used. It is a standard measure in both road and rail transport. A higher value indicates greater asset utilisation, while a sustained decline suggests that network expansion has not generated a corresponding increase in traffic.

For urban bus and metro systems, traffic intensity is generally calculated using passenger journeys rather than passenger turnover. This is because variations in journey length within an urban network are relatively small, meaning that the distance component can be treated as broadly constant and therefore omitted.

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Its official responsibilities include “studying and formulating principles and policies on Taiwan-related work” and “organizing, guiding, managing and coordinating the Taiwan-related work of departments under the CPC Central Committee and the State Council, as well as provinces, autonomous regions and municipalities”—meaning, in practice, that Taiwan-related work undertaken by other central-level ministries, including the ministry of foreign affairs, falls within the Office’s organizing, guiding, managing and coordinating remit.

The Office holds a regular weekly press conference every Wednesday and subsequently publishes a record on its website, although it is unclear whether that record is a verbatim transcript. Judging from past practice, international media do not appear to have access to these briefings. This makes their contents particularly important, yet relatively inaccessible to the English-speaking world.

Given the Office’s indispensable role in one of the most consequential issues in world affairs, I have therefore decided, on a trial basis, to translate and publish its regular press briefings, with the assistance of AI, as with our other translations. (I may also discontinue this at any time, depending mainly on my mood.)

These translations have not been authorized, reviewed, or approved by the Office or by any other person or party.

国务院台办新闻发布会辑录（2026-09-02）

September 2, 2026, 16:20

Source: Taiwan Work Office of the CPC Central Committee/Taiwan Affairs Office of the State Council

At 10 a.m. on September 2, the Taiwan Affairs Office of the State Council held a regular press conference in its press briefing room. Spokesperson Zhang Han answered questions from reporters on recent issues of concern across the Taiwan Strait.

Zhang Han: Good morning, friends from the media. Welcome to the regular press conference of the Taiwan Affairs Office of the State Council. Please go ahead with your questions.

People’s Daily: The 30th Shandong-Taiwan Economic and Trade Fair was recently held in Shandong, with active participation by Taiwan businesspeople and enterprises. Could you brief us on the event?

Zhang Han: On August 31, the 30th Shandong-Taiwan Economic and Trade Fair, jointly hosted by the Shandong Provincial People’s Government and the Taiwan Affairs Office of the State Council, opened in Weifang, Shandong Province. About 800 people from various sectors on both sides of the Taiwan Strait attended the event, including Zhang Ping, vice chairman of the mainland side of the Cross-Strait CEO Summit; Song Tao, director of the Taiwan Work Office of the CPC Central Committee and the Taiwan Affairs Office of the State Council; Lin Wu, secretary of the CPC Shandong Provincial Committee; Hsiao Hsu-tsen, vice chairman of the Chinese Kuomintang; Mao Chi-kuo, vice chairman of the Taiwan side of the Cross-Strait CEO Summit; Lee Cheng-hung, president of the Association of Taiwan Investment Enterprises on the Mainland; Hsu Shu-po, chairman of the Taiwan General Chamber of Commerce; and Lei Hong-yi, chairman of the Council for Industrial and Commercial Development.

The Shandong-Taiwan Economic and Trade Fair has been held 30 times since 1994 and is one of the longest-running cross-Strait economic and trade exchange events. This year’s fair featured six thematic matchmaking activities in such fields as modern agriculture, green chemicals, the marine economy, intelligent manufacturing, youth entrepreneurship and vocational education. A number of exchange activities were also organized at parallel venues in Zibo, Jining, Dezhou and Heze, yielding a series of cooperation outcomes. Enterprises, associations and universities from the two sides signed seven cooperation agreements or memoranda in areas including industrial park development, joint ventures and science and technology cooperation, and jointly inaugurated one university-enterprise innovation and practice base.

During the event, Shandong also introduced 11 policy measures to support the development of Taiwan businesspeople and enterprises in the province during the 15th Five-Year Plan period. Covering project investment, agricultural cooperation, scientific and technological innovation, financial services and other areas, the measures are designed to support Taiwan businesspeople and enterprises in better integrating into Shandong’s economic and social development, achieving greater and better development of their own, and opening up a new prospect for Shandong-Taiwan economic and trade cooperation.

Riyue Tantian, a new-media outlet of China Media Group: On August 26, a mudslide occurred on the Nepal side of the border, causing casualties and missing persons at the Gyirong Port in Xigaze, Xizang/Tibet. After the disaster, Chinese Kuomintang Chairwoman Cheng Li-wun, people from various sectors in Taiwan, as well as Taiwan compatriots and enterprises on the mainland expressed concern and sympathy and made donations to the affected areas and people. What is your response?

Zhang Han: After the mudslide disaster in Gyirong County, Xigaze City, Xizang/Tibet, General Secretary Xi Jinping attached great importance to the situation and issued important instructions. Premier Li Qiang, entrusted by General Secretary Xi Jinping, traveled to the disaster-stricken area to guide rescue and relief work. We have activated a Level-II national emergency disaster-relief response, and all relevant parties are making every effort to organize rescue operations and safeguard people’s lives and property to the greatest extent possible.

As we understand it, no Taiwan compatriots have so far been reported killed, injured or missing in the disaster. We will continue to closely follow the situation of Taiwan compatriots in the area and provide necessary assistance in a timely manner. People from various sectors in Taiwan, as well as Taiwan compatriots and enterprises on the mainland, have expressed their concern and sympathy in various ways. This demonstrates the compatriot affection between the two sides of the Strait, whose blood is thicker than water and who come to each other’s aid in times of need. We express our heartfelt thanks.

Recently, southern Taiwan has been hit by repeated heavy rainfall, seriously affecting the work and lives of local people. We extend our sympathy to the compatriots affected by the disaster and stand ready to provide assistance. We hope they will resume normal work and life as soon as possible.

Southeast TV of Fujian: Xiamen, Fujian, recently established its first group of “Financial Service Centers for Taiwan Compatriots,” making it more convenient for Taiwan compatriots to handle financial services. The initiative has been welcomed by local Taiwan compatriots. Could you tell us more about it?

Zhang Han: To implement the Opinions of the CPC Central Committee and the State Council on Supporting Fujian in Exploring New Pathways for Integrated Development across the Taiwan Strait and Building a Demonstration Zone for Integrated Cross-Strait Development, Xiamen has established “Financial Service Centers for Taiwan Compatriots” at bank branches. The first 10 outlets are located at places frequently visited by Taiwan compatriots, including airports and ferry terminals, tourist attractions, major commercial districts, government service centers and Taiwan business associations.

Focusing on the practical needs of Taiwan compatriots in tourism, living and working, the centers provide integrated services and standardized procedures to facilitate a wide range of financial services, including opening accounts, currency exchange, mobile payments, fund remittances, home purchases, wealth management and entrepreneurship. The initiative is intended to better meet the financial needs of Taiwan compatriots living and developing in Xiamen and create a dedicated financial service network for Taiwan compatriots that offers proactive engagement, one-stop integrated services, standardized procedures, and tangible and accessible support.

CCTV’s “Cross-Strait” program of China Media Group: Not long ago, the website of the General Administration of Customs published a new list of registered packaging plants and orchards for Wendan pomelos from Taiwan, attracting attention on the island. Will Wendan pomelos from more counties and cities in Taiwan be approved for import into the mainland?

Zhang Han: In April this year, the Taiwan Work Office of the CPC Central Committee was authorized to announce 10 policy measures to promote cross-Strait exchanges and cooperation, including facilitating the import into the mainland of agricultural and fishery products from Taiwan that meet inspection and quarantine standards. During this year’s Straits Forum, we held a matchmaking and signing event for the 10 policy measures to promote cross-Strait exchanges and cooperation, creating a platform to open mainland markets for distinctive agricultural and fishery products from Taiwan. Following the announcement on August 25 of a group of registered packaging plants and orchards for Wendan pomelos from Taiwan, the General Administration of Customs on September 1 announced another group of registered Wendan pomelo orchards and packaging plants in Taiwan, providing greater convenience for more Taiwan businesses to sell Wendan pomelos to the mainland.

We will make every effort to do practical and good things for Taiwan compatriots and help them resolve difficulties. On the common political basis of upholding the “1992 Consensus” and opposing “Taiwan independence,” and provided that the mainland’s relevant inspection and quarantine requirements are met, we will work together with relevant parties on the island to help more agricultural and fishery products and other high-quality products from Taiwan enter households across the mainland.

The Paper, Shanghai: Shen Yu-chung, deputy head of Taiwan’s mainland affairs authority, recently claimed that regulations recently issued by the mainland concerning cyberspace and exit-entry administration contain vague implementation standards and may have further negative effects on cross-Strait exchanges. He said cross-Strait exchanges should be “depoliticized, de-risked, healthy and orderly.” What is your comment?

Zhang Han: The relevant regulations have a sound legal basis and are open and transparent. The formulation of measures for security supervision and inspection in cyberspace will help strengthen the security protection of networks, data and personal information, jointly guard against telecommunications and online fraud and other illegal and criminal activities, and safeguard national security and the public interest. The regulations on exit-entry administration are intended to standardize the mainland’s exit-entry administration, protect the lawful rights and interests of people entering and leaving the mainland, safeguard national sovereignty, security and development interests, and create a better law-based environment for Taiwan compatriots visiting the mainland.

The various claims made by the DPP authorities are deliberate attempts to mislead the public and smear the mainland. Frequent visits and more exchanges are conducive to enhancing mutual understanding and promoting cooperation between compatriots on both sides of the Strait. People-to-people exchanges across the Strait have strong endogenous momentum. The DPP authorities should follow the will and aspirations of the people instead of using various means to interfere with and obstruct cross-Strait exchanges and cooperation and incite confrontation and antagonism across the Strait.

Xinhua News Agency: The Lai Ching-te authorities recently said Taiwan’s defense budget in 2027 would exceed NT$1 trillion for the first time, claiming that “defense resources must all be converted into credible defense capabilities” and that the mainland must not misjudge “Taiwan’s determination to defend itself.” What is your comment?

Zhang Han: The Lai Ching-te authorities stubbornly adhere to a separatist stance of “Taiwan independence.” Disregarding the mainstream public opinion on the island that calls for exchanges, cooperation, development and peace, they persistently incite confrontation and antagonism across the Strait and squander the hard-earned money of the people in an attempt to “resist reunification by force” and “seek independence by force.” Such attempts represent a gross overestimation of their capabilities and will only bring grave disasters upon the people of Taiwan.

Our resolve to safeguard national sovereignty and territorial integrity is unwavering, and our capability to do so is immensely strong. We will never leave any room for separatist activities seeking “Taiwan independence” in any form. We hope Taiwan compatriots will fully recognize the extreme harm and danger posed by “Taiwan independence” separatism, firmly oppose separatist acts seeking “Taiwan independence,” and resolutely safeguard the common home of the Chinese nation as well as their own security and well-being.

China News Service: The second World Humanoid Robot Games were recently held in Beijing, attracting widespread global attention. Public opinion on the island has widely praised the mainland’s robotics technology for making great strides toward greater precision, intelligence and practical application, noting the astonishing pace of technological iteration and calling for stronger industrial cooperation between the two sides in relevant fields. What is your comment?

Zhang Han: From dancing and jumping on the stage of the Spring Festival Gala, to repeatedly setting new records at sporting events, and then entering real-world production and everyday-life scenarios, the development of humanoid robots on the mainland is a microcosm of the deep integration and rapid development of the mainland’s scientific and technological innovation and industrial innovation.

The 15th Five-Year Plan has made forward-looking arrangements for future industries including embodied intelligence and brain-computer interfaces. With its complete industrial system, solid industrial foundation and rich application scenarios, the mainland will create broad development opportunities for Taiwan compatriots and enterprises. We welcome Taiwan compatriots and enterprises to innovate and start businesses on the mainland, participate in high-quality development, and work together to strengthen the economy of the Chinese nation.

Yangcheng Evening News’ “Yu Taihai”: Regarding the General Administration of Customs’ announcement of another group of registered Wendan pomelo orchards and packaging plants in Taiwan, Taiwan’s mainland affairs authority claimed that only those meeting certain political prerequisites and conditions can obtain registration, calling the practice united front propaganda. It also said that cross-Strait agricultural product quarantine involves the exercise of public authority and can only be pragmatically resolved through communication between the competent authorities on the two sides. What is your comment?

Zhang Han: The import of Wendan pomelos from Taiwan into the mainland helps expand sales channels for agricultural products on the island and improve the well-being of Taiwan compatriots. It is a good and practical measure that benefits grassroots businesses on the island. The DPP has neither the will nor the ability to help more people at the grassroots level improve their interests and well-being. Instead, it persists in fabricating rumors and smearing such measures, fully exposing its disregard for people’s livelihoods and its obsession with narrow selfish interests. It will inevitably face opposition from the broad masses of Taiwan compatriots.

Taiwan.cn: Could you brief us on recent cross-Strait exchange activities?

Zhang Han: Exchanges across the Taiwan Strait in various fields have remained active recently.

In economic and trade exchanges, the “Beijing-Tianjin-Hebei Taiwan Businesspeople Visit to Jilin” is being held from September 2 to 5 in Changchun and other places in Jilin Province under the theme “Pooling New Momentum, Jilin and Taiwan Toward the Future.” It features field visits, industry promotion and economic and trade matchmaking, helping Taiwan businesspeople and enterprises seize opportunities arising from the revitalization and development of northeast China. From September 3 to 6, the 17th Dongguan Taiwan Famous Products Fair will be held in Dongguan, Guangdong Province. Its Taiwan specialty pavilion brings together all 22 counties and cities on the island and will display machinery and equipment, distinctive agricultural and fishery products, and other products. From September 6 to 10, the 18th “Chongqing-Taiwan Week” will be held in Chongqing, featuring a series of events including a seminar on cross-Strait information and communications cooperation and development and a seminar for young people from both sides of the Strait pursuing employment and entrepreneurship opportunities in Chongqing.

In cultural exchanges, the first Sichuan Tea Horse Road Photography Journey Experience Camp was held from August 23 to September 2 in Ya’an, Garze and other places in Sichuan Province. Photography enthusiasts from both sides of the Strait used their cameras as a medium and embarked together on a creative photographic journey to trace their roots. From August 29 to 31, the eighth Cross-Strait Humanities Forum was held in Xiamen, Fujian Province, attended by experts and scholars from both sides in philosophy, literature, history and other fields.

In youth exchanges, from August 20 to 27, the 14th Strait Youth Day series included the second Cross-Strait (Fuzhou) Sports Injury Prevention and Rehabilitation Exchange and a Fujian-Taiwan youth badminton exchange series themed “Youth in Motion, Affection Across the Strait,” held in Fuzhou, Fujian Province. On August 26, a cross-Strait street-dance youth cultural exchange event themed “Youth Qujiang · Huacan in Zhejiang · Dancing Youth,” together with the third Cross-Strait Youth Street Dance Competition, opened in Quzhou, Zhejiang Province. From August 26 to September 1, the 2026 Cross-Strait (Xinyu) Youth Exchange themed “Tiangong Kaiwu · A Rendezvous with Intangible Cultural Heritage” was held in Xinyu, Jiangxi Province. On August 28, the 16th Cross-Strait (Binzhou) Youth Student Art of War Friendship Debate Competition opened in Huimin, Shandong Province. From September 3 to 9, the fourth Cross-Strait Youth Film Festival 2026 and Youth Filmmakers Training Camp will be held in Xiamen, Fujian Province.

Nanfang Daily and Nanfang Plus: The giant panda Yuan Yuan, gifted to Taiwan by the mainland, recently celebrated her 22nd birthday. Taipei Zoo held a celebration for Yuan Yuan, attracting attention from netizens on both sides of the Strait, who sent their best wishes. What is your comment?

Zhang Han: Giant pandas are loved by people on both sides of the Strait and are symbols of peace and friendship. In 2008, giant pandas Tuan Tuan and Yuan Yuan moved to Taiwan, where they later gave birth to Yuan Zai and Yuan Bao. Over the years, they have brought joy to Taiwan compatriots. Yuan Yuan recently celebrated her 22nd birthday. We would like to extend our sincere birthday wishes to Yuan Yuan and wish the two panda cubs healthy growth, so that this warm familial affection spanning the Taiwan Strait will continue.

Xiamen Satellite TV of Fujian: Taiwan media have reported heated discussion among netizens on the island about a growing number of young people enjoying independent travel to the mainland. Data show that since the start of this year’s summer travel season, passenger traffic on the Xiamen-Kinmen “Mini Three Links” route has remained at a high level, with passenger volume on August 23 reaching a new high since services resumed. Could you brief us on the operation of the “Mini Three Links” during this year’s summer travel season?

Zhang Han: The “Mini Three Links” passenger routes are among the most important and convenient channels for exchanges between the two sides of the Strait, particularly between Fujian and Taiwan. Since the start of this year’s summer travel season, passenger traffic on the “Mini Three Links” routes has continued to rise and remained at a high level. The Xiamen-Kinmen “Mini Three Links” route operated a cumulative 1,550 services and carried 386,400 passenger trips, representing year-on-year increases of 11.4 percent and 24.1 percent respectively. On August 23, the route handled more than 7,900 passenger trips in a single day, the highest daily figure since services resumed in 2023.

To cope with summer passenger flows, relevant mainland authorities have worked in close coordination to strengthen service capacity and better meet passengers’ travel needs. Beginning August 1, temporary additional summer services were introduced on the Xiamen-Kinmen “Mini Three Links” route, with operating hours appropriately extended. Customs-clearance procedures were also optimized, maritime safety supervision strengthened, and passenger services improved. Intelligent systems have enabled efficient and smooth clearance. Overall, the “Mini Three Links” routes have operated safely and smoothly and maintained good order.

The strong performance of the “Mini Three Links” during the summer travel season vividly demonstrates compatriots on both sides of the Strait growing closer through greater contact. We welcome more Taiwan compatriots to travel to the mainland via the “Mini Three Links” routes to trace their roots and pay respects to ancestors, visit relatives and friends, and engage in exchanges and cooperation.

China Radio International’s “Haixia Feihong,” China Media Group: Recently, some politicians from the “green camp” claimed that a Taiwan civil society group called “Xiao Yizi Hanfu” filmed a video against the backdrop of a Confucius temple during the Dragon Boat Festival in the name of “promoting Confucianism and Hanfu culture,” alleging that the activity may have had a united front dimension. Shen Yu-chung, deputy head of Taiwan’s mainland affairs authority, said that culture should be neutral, and that “if the Chinese Communist Party uses culture as a political tool or a united front tool, the authorities will of course sternly rebut it.” What is your comment?

Zhang Han: Chinese culture is the common spiritual home of compatriots on both sides of the Taiwan Strait. Civil society groups on the island are committed to carrying forward and promoting Chinese culture and actively participate in cross-Strait exchange activities. This precisely demonstrates that people on both sides of the Strait share the same roots and origins, language and culture. We will work together with Taiwan compatriots to continue advancing cross-Strait cultural exchanges and cooperation, jointly promote Chinese culture, and be guardians, inheritors and promoters of Chinese culture.

The essence of the united front is great unity and solidarity. It is about making friends and promoting solidarity, seeking common ground while reserving differences, and pursuing development together. The DPP authorities deliberately distort the original meaning and essence of the united front, smear cross-Strait exchange activities, and intimidate and suppress Taiwan compatriots who participate in such activities. Their intentions are malicious.

China Review News Agency, Hong Kong: Taiwan’s legislative body recently adopted a so-called “drone industry development plan.” Some public opinion on the island is concerned that drones have also become an important part of Taiwan’s military buildup. What is your comment?

Zhang Han: The DPP authorities seek to militarize civilian industries and vainly attempt to use drones as a tool for “seeking independence and resisting reunification.” This is nothing but a futile exercise. The reunification of the motherland is unstoppable. No matter how many drones the DPP authorities develop, their efforts will be futile and useless.

Taiwan’s Central News Agency: Hung Sun-han, head of Taiwan’s labor affairs authority, will travel to Nanjing in late September to attend an APEC meeting. The Taiwan side has said this is in accordance with APEC’s established rules and practices, under which all members participate on an equal footing. What is your view? Does the mainland believe this trip could help increase cross-Strait exchanges and interactions and create new possibilities for cross-Strait relations?

Zhang Han: As the host of this year’s Asia-Pacific Economic Cooperation, or APEC, activities, we handle matters concerning the participation of the Taiwan region in accordance with the one-China principle and the provisions and established practices of relevant APEC memoranda of understanding. This includes the issue you mentioned.

Taiwan’s United Daily News: My first question: The Taiwan side recently said that since December 2025, more than 300 visits involving personnel from 25 Taiwan departments and agencies have been made to the mainland to attend various APEC meetings, all of which proceeded smoothly and without incident. Hung Sun-han, head of Taiwan’s labor affairs authority, will travel to Nanjing in late September to attend an APEC meeting. Will the mainland follow past interaction arrangements to ensure that his participation proceeds smoothly? Second, it has been reported that a young person from Taiwan who works for Amnesty International was recently questioned by customs authorities upon arriving on the mainland. Is this true? Should people from Taiwan with NGO backgrounds be concerned about being questioned when traveling to the mainland?

Zhang Han: On your first question, our position on Taiwan-related issues in APEC is consistent and clear. Matters concerning the participation of the Taiwan region should be handled in accordance with the one-China principle and the provisions and established practices of relevant APEC memoranda of understanding.

On your second question, the organization you mentioned has willingly served as a pawn of international anti-China forces. It has repeatedly stirred up trouble and fabricated rumors to smear the mainland and has met with firm opposition from the international community. It is entirely reasonable and lawful for border inspection authorities to conduct checks on certain individuals who have worked for this organization.

In 2025, Taiwan compatriots made more than 4.89 million visits to the mainland, and in the first half of this year they made 2.85 million visits. As long as they abide by laws and regulations, Taiwan compatriots come to the mainland in high spirits and return home fully satisfied. Ignoring these facts, the DPP authorities are instead making a great fuss over individual persons who previously worked for an anti-China organization. This is a complete distortion of right and wrong, intended to intimidate people on the island and interfere with and obstruct cross-Strait exchanges and interactions. Such despicable conduct will inevitably be condemned and opposed.

China Television News, Taiwan: My first question: Recently, a man using a computer on a Taipei Metro platform had simplified Chinese characters including “Second Theater Command” displayed on his screen. Some people in Taiwan initially suspected that personnel from the mainland had been sent to Taiwan to collect intelligence, but it later turned out to be a misunderstanding. What is the mainland’s response? Second, the mainland’s new exit-entry administration regulations will take effect on September 15. Taiwan’s mainland affairs authority has repeatedly warned recently that people traveling to the mainland face personal-security risks and has said that semiconductor professionals and others face higher risks. What is your comment? Could Taiwan residents be questioned or prevented from leaving the mainland after entry because of their occupation, political position or remarks?

Zhang Han: On your first question, publicly available information online has already shown that this was nothing more than a farcical misunderstanding. Certain people on the island are always seizing on issues to make trouble and using every opportunity to incite confrontation and antagonism across the Strait. Their motives are sinister.

On your second question, we have repeatedly stressed that we protect, in accordance with the law, the lives, property, lawful rights and interests of compatriots on both sides of the Strait, including Taiwan compatriots. The relevant regulations have a sound legal basis and are open and transparent. As long as Taiwan compatriots do not engage in illegal or criminal activities, they have absolutely no reason for concern when visiting the mainland.

The DPP authorities have gone to great lengths to hype up so-called “risks” associated with traveling to the mainland and have even deceived and intimidated people in Taiwan. Their purpose is simply to obstruct people from Taiwan from traveling to the mainland for exchanges and visits. The historical trend of compatriots on both sides of the Strait growing closer cannot be stopped. The information cocoon painstakingly woven by the DPP authorities will inevitably be punctured by facts, and their despicable tricks will not succeed.

ETTV, Taiwan: Taiwan artist Chou Tzu-yu debuted as a member of the South Korean girl group TWICE. There have recently been reports that, after her contract with her South Korean management company expires, the Chinese mainland has been actively trying to recruit her to shift the focus of her career, allegedly offering entertainment resources in exchange for certain political statements. Can you confirm this?

Zhang Han: I am not aware of the specific situation you mentioned. We have always actively supported cross-Strait cultural exchanges. We welcome Taiwan artists to develop their careers on the mainland and support more Taiwan artists in sharing opportunities and realizing their dreams in the course of the development of the mainland’s cultural industries, thereby jointly promoting the prosperity and development of cultural undertakings across the Strait.

Of course, we will never allow or tolerate behavior in which someone makes money on the mainland while at the same time supporting separatist activities seeking “Taiwan independence.” This has always been our clear and consistent position.

Taiwan’s China Times: The Standing Committee of the National People’s Congress recently adopted the revised National Defense Mobilization Law, which will take effect on October 1. The law states that, where required by development interests, the disposition of civilian resources may be expanded from “requisition” to include “expropriation.” Could the Taiwan Affairs Office explain whether the new law’s provisions on “expropriation” apply to the assets and technologies of Taiwan businesspeople on the mainland? Are you concerned that this could increase Taiwan businesspeople’s worries about “political risks” associated with long-term investment on the mainland?

Zhang Han: The revised National Defense Mobilization Law adheres to a holistic approach to national security and clarifies the respective functions and responsibilities of the military and local authorities, the operational mechanisms and key tasks of national defense mobilization under the new system. It will play an important role in regulating and strengthening national defense mobilization and safeguarding national security and development interests.

It should be emphasized that there are clear legal conditions and statutory procedures both for deciding to implement national defense mobilization and for expropriating or requisitioning civilian resources during a period of national defense mobilization. The state protects, in accordance with the law, the lawful rights and interests of organizations and individuals participating in national defense mobilization activities.

Guided by the conviction that “people on both sides of the Taiwan Strait are one family,” we will support the development of Taiwan businesspeople and enterprises on the mainland and help more Taiwan businesspeople and compatriots participate on an equal footing, actively integrate into, jointly contribute to and share in the process of Chinese modernization. Taiwan businesspeople and enterprises investing on the mainland for the long term and operating in accordance with laws and regulations have no reason for concern. They will only find more opportunities, broader space for development and stronger safeguards.

ETtoday, Taiwan: My first question: The Gwangju Biennale in South Korea restored the name “Taiwan Pavilion,” prompting mainland artists to collectively withdraw from the exhibition on the eve of its opening. The organizers said that “politics should not interfere with art.” Some are concerned that similar occasions or exhibitions in the future could become situations in which the two sides of the Strait refuse to participate together. What is your comment? Second, a planned visit to Taiwan by Hong Kong artist Daniel Chan was reportedly called off. Some have also observed that this year there have been voices in Taiwan that first attach political labels to patriotic remarks by artists from Hong Kong and Macao and then launch boycotts against them. How does the mainland believe such “antagonistic sentiment” should be defused?

Zhang Han: On your first question, there is but one China in the world, and Taiwan is an inalienable part of China’s territory. Taiwan’s participation in international activities must be handled in accordance with the one-China principle.

The DPP authorities engage in political manipulation under the guise of cultural exchanges, conferences, exhibitions and other occasions, disrupting the normal order of relevant events. Such behavior is contemptible. No matter what tricks the DPP authorities resort to, they cannot change the inevitable failure of their provocative attempts to seek “Taiwan independence.”

On your second question, the so-called “antagonistic sentiment” has been deliberately incited by the DPP authorities. Disregarding the development needs of industries on the island, the DPP authorities have gone to great lengths to attach political labels to performing artists and attempt, through political manipulation, to obstruct, prohibit and restrict normal cultural exchanges and commercial performances between the two sides of the Strait and between Taiwan, Hong Kong and Macao.

This runs completely counter to mainstream public opinion on the island and seriously harms the interests of Taiwan businesses and people. It is deeply unpopular and will not succeed.

Zhang Han: That concludes today’s press conference. Thank you.

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Zhao Shukai (赵树凯; b. 1959) is a Chinese official of rural policy and governance. From 1982 to 1989, he worked at the Rural Policy Research Office of the Communist Party of China Central Committee’s Secretariat (later reorganised as the State Council’s Rural Development Research Centre and subsequently the Research Centre of Rural Economy under the Ministry of Agriculture and Rural Affairs). Starting in 1990, he served at the Development Research Centre of the State Council, China’s government cabinet, holding roles including Director General of the Rural Department’s Organisation Research Office and Director General of the Information Centre.

This is the fourth instalment in Zhao Shukai’s series, Reflections on the History of China’s Rural Reform. The Chinese original is available on the WeChat blog 九号院时刻 (No. 9 Courtyard Moment).

— Yuxuan Jia

赵树凯：农村改革史是”政策权”变迁史

——农村改革史阅读随笔（4）

Zhao Shukai: The History of Rural Reform Is a History of Shifts in “Policymaking Power”

—Reflections on the History of China’s Rural Reform (IV)

June 2026

For years, accounts of China’s rural reform have focused heavily on economic growth, changes in property rights, and institutional innovation, while paying notably less attention to the mechanisms through which reform itself came about.

In my recent essay, “Reflections on the History of China’s Rural Reform (III),” I argued that “the history of rural reform is, first and foremost, a political history.” That essay sought to move beyond a purely economic interpretation, emphasising that rural reform was above all a product of political change, that shifts in policy arose from shifts in politics, and that the course of rural reform reflected an adjustment in political relations between the state and the grassroots. My purpose was to redirect scholarly attention from the outcomes of reform to its causes, and from institutional change to changes in the structure of power.

Yet “political history” remains a fairly broad concept. What, exactly, were the political changes that drove rural reform? How did political power shape policy change? And what powers were reallocated in the process? These questions merit further exploration. In this essay, “Reflections on the History of China’s Rural Reform (IV),” I therefore introduce the analytical concept of “policymaking power.”

By “policymaking power,” I mean the power to determine the substance of policy, alter its direction, define its boundaries, and choose how it is to be implemented. This differs from administrative power in the ordinary sense. Administrative power is primarily the power to carry out policies that have already been established, whereas policymaking power is the power to determine the policies themselves. Rural reform involved more than changes to the economic system or political change in a general sense. More fundamentally, it was a process in which policymaking power, once highly centralised, was gradually opened up to a limited extent and reallocated. In this sense, the history of rural reform is first and foremost a history of shifts in policymaking power.

The emergence of the household responsibility system, the collapse of the people’s communes, and the rapid transformation of long-established institutions all show that rural reform was primarily political rather than economic. More specifically, it involved a redistribution of policymaking power. Rural reform is therefore first and foremost a history of shifts in policymaking power.

During the people’s commune era, power over rural policy was highly centralsed. Higher authorities made uniform decisions about what was to be produced and planted, how output was to be distributed, how labour was to be organised, and how cadres were to be evaluated. They even determined many aspects of farmers’ everyday lives. Grassroots cadres had managerial authority but no genuine power to make policy. Farmers were even more clearly the objects of policy rather than participants in policymaking.

The most serious problem with this highly centralised structure was that higher authorities held the power to make policy but struggled to obtain accurate information about conditions on the ground, while those at the grassroots understood the actual situation but had no power to adjust policy. As a result, the gap between policymaking and practical needs grew ever wider.

It was precisely this structure of policymaking power that the earliest reforms challenged. Household contracting did not initially alter the system of land ownership; instead, it broke through the existing allocation of policymaking power. Without prior approval, farmers chose to adopt a new way of organising production. Although this was not officially permitted at the time, it helped address practical production problems. The significance of household contracting therefore lay not only in the new system itself, but also in the fact that, for the first time, people at the grassroots exercised some of the policymaking power previously held by higher authorities.

Policy breakthroughs in Sichuan, Anhui, and elsewhere followed the same pattern. The early reforms were not based on a unified plan from the central government. Instead, local cadres and farmers experimented in response to practical pressures, giving local areas limited room to test new policies. Reform thus developed from the bottom up. From this perspective, rural reform was a process of reallocating policymaking power between the central and local governments, and between higher authorities and the grassroots.

Many of the major changes that occurred during the early years of reform and opening up can be understood from the perspective of policymaking power. The central government, for example, began allowing localities to “experiment,” different regions to adopt different approaches, the grassroots to explore new institutional arrangements, and some areas to move ahead before their experience was reviewed and assessed. What truly changed was not any single policy, but the process through which policy was made.

Under the previous model, the centre formulated policy and the localities implemented it. After reform began, the logic gradually shifted: localities explored new policies, and the centre subsequently endorsed them.

This may appear to have been merely a procedural adjustment, but it represented an important change in the structure of power. The household contract responsibility system was able to spread rapidly not simply because it produced good economic results, but, more importantly, because a new mechanism for exercising policymaking power took shape during the reform process. The grassroots gained some room to experiment, localities gained some room to innovate, while the centre endorsed and promoted successful approaches.

This shift had far-reaching significance for political development. Reform had long been understood mainly as a change in policy content — for example, the shift from collective to household farming, or from unified state purchasing and distribution to market exchange. More important, however, was the change in the policymaking process itself. Changes in policy content were the result; changes in the distribution of policymaking power were the cause.

The various reform breakthroughs would not have been possible had policymaking power remained highly concentrated rather than becoming somewhat more widely distributed. The nationwide wave of reform that followed could not have emerged without giving the grassroots limited room for policy innovation. The deepest significance of rural reform therefore lies not in the transformation of agricultural production, but in the transformation of how policy was made.

This shift, however, was not a simple, straightforward process of decentralisation, as the reform era did not establish a fully institutionalised system of devolving power. Local policy breakthroughs generally occurred under ambiguous circumstances. The central government neither explicitly authorised them nor firmly prohibited them. Instead, it observed and tolerated these experiments before reviewing the experience and promoting successful practices. This condition can be described as a “limited opening of policymaking power.” Such limited openness was a defining feature of the way Chinese politics operated during the reform era.

Looking more closely, the success of China’s rural reform may lie not merely in the household contract responsibility system itself, but in the creation of a new mechanism for policymaking — one that allowed the grassroots to identify problems, localities to propose solutions, and the central government to draw lessons from their experience. In other words, the most important institutional innovation of the reform era may have been not the contracting system itself, but a new way of exercising policymaking power. If rural reform is understood as political history, this idea can be taken a step further: it is a “history of policymaking power.”

The most important aspect of political change is neither a change in leadership nor simply an adjustment to organisational structures, but a change in how policymaking power is allocated. Reform was defined not only by changes in policy, but, more fundamentally, by changes in who decided policy, how it was decided, and how it took shape.

In this sense, the history of China’s rural reform is not only a history of agricultural development, economic reform, or political change. It is first and foremost a history of the continual adjustment, reallocation, and reopening of policymaking power. This may be the key to understanding how rural reform came about.

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China’s Rural Reform: A History Not Designed but Discovered

Zhao Shukai (赵树凯; b. 1959) is a Chinese official of rural policy and governance. From 1982 to 1989, he worked at the Rural Policy Research Office of the Communist Party of China Central Committee’s Secretariat (later reorganised as the State Council’s Rural Development Research Centre and subsequently the…

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Zhao Shukai argues that the decisive breakthroughs in China’s rural reform of the 1980s were not designed in advance. Household contracting and other major changes emerged through initiatives from farmers, grassroots cadres and local governments, while the central leadership was often divided over how to respond. What made these breakthroughs possible, …

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