
China's war of ideas in the South China Sea
James Borton is a non-resident senior fellow at Johns Hopkins Strategic Advanced International Studies Foreign Policy Institute and the author of "Harvesting the Waves: How Blue Parks Shape Policy, Politics, and Peacebuilding in the South China Sea." Sherry Chen is presently pursuing a dual degree between Columbia University and Sciences Po Paris, and she is a research associate at the South China Sea NewsWire.
While naval patrols and island-building dominate headlines about the South China Sea, China is waging another, quieter campaign -- one that unfolds not at sea, but in seminar rooms, policy briefings and academic dialogues. At the forefront of this campaign are state-aligned Chinese think tanks that are steadily shaping the narrative surrounding Beijing's maritime ambitions.
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The Diplomat
2 hours ago
- The Diplomat
Rare Earths Are the Key to Winning the China-US Trade War
To accumulate industrial leverage over the U.S., China played the long game. The U.S. must do the same. Imagine the China-U.S. trade war as two opposing armies exchanging bursts of gunfire, one volley after another. Responding to China's unfair trade practices, the United States imposed tariffs on a broad range of Chinese exports. In turn, China restricted rare earth exports necessary for American automotive and defense manufacturing. The U.S. retaliated by freezing jet engine sales, technology that China can't find anywhere else. Then came a lull. In June, President Donald Trump announced that China would resume exports of rare earths, in return for the U.S. providing China with the student visas it wanted. Subsequently, the U.S. and China announced a formalized agreement to resume Chinese heavy rare earth exports, while the United States will resume jet engine, software, and ethanol exports. But this isn't a truce. It's only a ceasefire in a trade war that is likely to erupt again and again in the coming years. China left its growing infrastructure for export controls in place: rare earth export licenses require sensitive information disclosures and only last for six months. And once the trade war breaks out again, the United States may find that China has more ammunition than it does. To accumulate this much industrial leverage over the U.S., China played the long game. The U.S. should take this pause in the trade war to begin doing the same. As China grew to become an industrial superpower over the last three decades, it encouraged other manufacturing countries, particularly the U.S., to rely on it as the primary supplier for dozens of critical minerals. The dependence is even more stark in rare earths: China's export licensing regime caused U.S. imports of high-performance magnets to fall by 93 percent. This adds up to Chinese leverage in the short, medium, and long term. Right now, it can choose to cut off access to minerals and slow the pace of U.S. reindustrialization. The short-lived rare earth restrictions already forced a Ford plant to halt production, and the company, like many other carmakers, is scrambling to find a supply of magnets. In the coming months and years, this dynamic could force manufacturers to move American industry to China, if that remains the only way of accessing strategic materials. More than just slowing reindustrialization, China's export controls could cause further deindustrialization in the U.S. Over the long term, China's intent is clear: keep the rest of the world hooked on Chinese raw materials. As long as the United States' most essential commercial and military products rely on Chinese strategic materials, the U.S provides Beijing with an informal veto over American foreign and domestic policy. Absent U.S. action, this dynamic won't change. The U.S. can't afford to sit by while China begins to exert the leverage that it has built up over the last few decades. The U.S. response should similarly be framed over short-, medium-, and long-term goals. The United States' immediate need is to retain access to strategic materials from China and keep the manufacturing base alive. This is why Trump's agreement with China was so important: the U.S. can't reindustrialize without using Chinese raw materials in the near term. But now with temporary access, the medium-term goal must be developing alternative supply chains to meet the United States' military and commercial industrial needs. Time is an imperative: the search for a perfect set of critical policies induces a costly paralysis. Policymakers need to acknowledge trade-offs. In some cases, this means trying out a range of programs, some of which will ultimately fail. Now that the Senate has passed Trump's One Big Beautiful Bill, there's a wide-open space for consequential policies. Undoing the theory that developing the electric vehicle supply chain would boost critical mineral resilience, the bill repeals EV subsidies and sunsets provisions of the advanced manufacturing tax credit. But the bill leaves the door open to new investment by allocating billions for critical mineral and industrial base financing. That funding needs to flow to effective programs. The United States' long-term goal should be independence – not from the rest of the world, just from China. On some level, the American people recognize this. Between 1990 and 2020, the American public went from thinking of China as a Japan-type competitor to a Soviet Union-like threat. But over that period, the scale and character of U.S. trade with China remained much closer to that of Japan than the Soviets. A fundamental readjustment of the United States' trade patterns with China isn't just necessary, it's long overdue. To that end, the United States should play both defense and offense in trade. Defensive measures insulate the U.S. from the Chinese supply shocks and unfair trade practices that contribute to the forcible deindustrialization of the American heartland. Offensive strategies would increase the number of technologies that China relies on the U.S. for, gradually rebalancing leverage away from Beijing. The Department of Defense's recent investment in MP Materials, a U.S. rare earth producer, offers a roadmap for the future. The terms of the deal include $400 million equity investment from DOD, more than $1 billion in public-government loans to construct new processing facilities, and establishing a price floor for MP's rare earth output. In the intervening days, Apple and MP announced a $500 million commitment to purchase magnets and develop a recycling plant in Texas. With DOD and other government agencies leading the way in investment, offtake agreements, and permitting, U.S. firms will help adjust the supply and demand constraints necessary for developing a fully integrated domestic supply chain. While the specifics will vary from mineral to mineral, deals like these will be the way forward. But if the U.S. does nothing to shift this balance of power, China will always be able to use the leverage that it built up over the past few decades. China could use access to raw materials to stop us from imposing further restrictions on advanced technologies, or even force the U.S. to loosen advanced technology transfer restrictions. The United States would be able to do little about it. In gray-zone economic warfare, trade leverage becomes its own kind of armament. The United States should arm itself aggressively to pursue strategies that take ammunition away from the Chinese. When that next round of trade war sniping breaks out, the U.S. will want more firepower than it has now.


The Diplomat
2 hours ago
- The Diplomat
The Great Wall Between China and the EU
In times of evolving transatlantic dynamics under the second Trump administration, and in response to shifting global power balances, some within the European Union have shown interest in exploring a more nuanced engagement with China. However, there are structural obstacles to a warming up between Brussels and Beijing, considering China's unfair trade practices in the economic sphere, its troubling human rights record, and its alliance with Russia and support for Moscow's war on Ukraine in the security sphere. China's leadership is not willing to change course. Instead, China is gambling on the EU's weakness and hoping that Brussels will simply give in. While the EU is indeed in a tough spot currently, it cannot agree to a 'grand deal' if China is unwilling to make major concessions on its unfair economic practices and support for the war in Ukraine. Now all eyes are on the upcoming China-EU summit to take place in Beijing on July 24, an important gathering that will mark 50 years of diplomatic relations. But if the summit demonstrates anything, it will be the fact that China is unwilling to play by the rules of the international order and that it is in neither in the EU's nor in the United States' interests to try to make a grand deal with Beijing without a major paradigm shift in China's behavior. The months-long discourse about an China-EU rapprochement and the China-EU summit take place against the backdrop of major divisions between the EU and the United States in recent months. The second Trump administration's initial ambiguity on support for Ukraine and the assertive approach toward the EU in its trade policy created uncertainty in Europe, encouraging the advocates of European 'strategic autonomy.' On the trade front, Trump started with the introduction of 25 percent tariffs on EU auto, steel, and aluminum imports, followed by the warning of a 50 percent tariff on all EU goods in absence of a trade deal. Finally, a July 12 announcement placed a 30 percent tariff on EU imports. These policies have created worries in Europe about the future of the transatlantic economy. Trying to capitalize on the transatlantic rift, Beijing started a charm offensive toward Europe last February with tailor-made messages such as 'your best friend has abandoned you' and 'China and the EU should serve as the world's anchors of stability.' Chinese Foreign Minister Wang Yi and two of his deputies have been touring Europe, accusing the United States of abandoning the international order while touting that China was interested in maintaining that order. An important part of their agenda was to convince the Europeans to revive the previously abandoned Comprehensive Agreement on Investment and to rescind EU sanctions against China. These diplomatic overtures resonated with some decision-makers in the EU, while others, like Commission President Ursula von der Leyen, signaled openness if China was ready to commit to real change on structural issues. As a result, there were several steps taken by both sides toward a potential rapprochement. In March, EU Trade Commissioner Maros Sefcovic met with Chinese leaders in Beijing to discuss ways 'to improve and rebalance China-EU trade and investment relations.' In April, von der Leyen held a phone call with Chinese Premier Li Qiang to discuss how to improve bilateral relations. In May, China and the European Parliament agreed to lift restrictions on mutual exchanges, including China's sanctions on some members of European Parliament. However, what the Europeans have been waiting for has not arrived from Beijing. Citing China's lack of reciprocity and unfair trade practices, the EU skipped the usual High-Level Economic and Trade Dialogue, signaling clear frustration and skepticism. The Chinese government has not put a serious offer on the table, which would require major change on structural economic and security issues. On the economic front, the list of deep structural issues that have prevented the EU from creating some kind of détente with China is long and includes chronic trade deficits, restricted access for European companies to the Chinese market due to non-tariff barriers and opaque regulations, market asymmetries, forced technology transfer, and currency manipulation. A major issue for the EU is Chinese industrial overcapacity, aided by state subsidies, which leads to export dumping in EU markets, depressing prices and undermining European industries. In a notable example, the EU hit Chinese electric vehicles with penalties of running from 17 percent to 45.3 percent over dumping allegations. However, Chinese electric vehicle and battery manufacturers have established production capabilities in EU countries, thereby seeking to establish their goods as 'made in the EU,' threatening European industries. While China has been a major trading partner for the EU for years, the EU's trade deficit with China has increased in the last decade, exceeding 300 billion euros ($350 billion) in 2024. Another structural issue faced by the EU for decades is China's restrictions on market access. The head of the European Chamber of Commerce recently spoke out on one of the problems in this area, saying that 'a lack of fair access to government procurement in China has been a long-standing issue for European companies operating in the country.' The EU has responded to these obstacles with a new tool of its de-risking strategy, the International Procurement Instrument (IPI). In the first-ever use of the IPI, the EU recently restricted the access of Chinese medical device manufacturers to the EU's sizable procurement market for five years. At the summit, the EU and China are expected to tackle another pressing issue: China's restrictions on rare earth exports to the EU. While these critical minerals are crucial for the EU's auto, defense, and renewable energy industries, China has been slow-rolling rare earth licenses for months, in an outgrowth of the China-U.S. trade war. In the security domain, the primary source of tension in China-EU relations is China's role in supporting Russia's war against Ukraine. Von der Leyen sharply criticized China's 'unyielding support for Russia,' warning it is fueling instability in Europe and 'de facto enabling Russia's war economy' – a stance she said the EU 'cannot accept.' Von der Leyen further warned that 'how China continues to interact with Putin's war will be a determining factor for China-EU relations going forward.' Ignoring European criticisms, China's Foreign Minister Wang Yi recently told the EU's foreign policy chief, Kaja Kallas, that it was not in China's interest for Russia to lose the war in Ukraine. Wang said the war currently keeps the focus of the United States on Russia and Eastern Europe, and a Russian loss would shift U.S. attention back on China and the Indo-Pacific. The China-EU summit will coincide with the 50th anniversary of diplomatic relations between the two sides, but the occasion is unlikely to be celebratory given the many divisions that currently strain their relationship. Chinese leadership has made clear in recent months that, while it wants a rapprochement with Europe, it is unwilling to make sacrifices for it by significantly modifying China's conduct on structural issues in the economic, technology, and security domains. It is time the EU's decision-makers and opinion-leaders recognized that China continues to be a strategic competitor and systemic rival that is intent on perpetuating its unfair economic practices and doubling down on its alliance with Russia and support for the Ukraine war. As a result, China-EU rapprochement is an unrealistic pipedream. Even if the transatlantic relationship is going through a rough patch, it is worth remembering that the United States and its European allies were the founders of the liberal international order, built on the values of human rights, democracy, free markets, the rule of law, and non-aggression. Communist Party-ruled China, contrary to what its leaders like to say during their charm offensives, does not embrace these values and seeks to transform the international order in its own authoritarian image. As long as China continues to flout the rules of the international order with its unfair economic practices, widespread human rights violations, and support for unlawful aggression, it is not in the EU's interest to warm up its relations with Beijing. The China-EU summit will hence serve to confirm how differently the two sides see the world, how different are the values they hold dear, and how widely their interests diverge. Held in the proximity of the Great Wall, the discussions between European and Chinese leaders will once again demonstrate that there continues to be a great wall between the EU's values and interests and those of China's.


The Mainichi
4 hours ago
- The Mainichi
China-N. Korea trade rises 30% in 1st half of 2025
BEIJING (Kyodo) -- China's trade with North Korea in the first half of 2025 rose about 30 percent from a year earlier, official data showed Friday, indicating a recovery in bilateral economic ties even though Pyongyang has been boosting its relations with Moscow. In the January-June period of 2025, the total value of China's trade with North Korea amounted to some $1.26 billion. Beijing is Pyongyang's largest trading partner and longtime economic benefactor. Pyongyang's main export items to China include wigs and artificial eyelashes, with cheap North Korean labor processing raw materials delivered from Chinese dealers and sending market-ready products back. Major exports from China to North Korea include plastic goods used to manufacture carpets and wallpaper as well as furniture and bedding. These items are believed to have been used for the development of housing and factories in the country. Shipments of Chinese rice and fertilizers to the neighboring country have also resumed, according to diplomatic sources. Bilateral trade exceeded $6.5 billion in 2013 but began dropping sharply in 2018 after U.N. Security Council resolutions were adopted in 2017 against Pyongyang over its continued nuclear tests and launches of intercontinental ballistic missiles. Meanwhile, North Korea has dispatched workers to factories in northeastern China since late last year in possible violation of a U.N. resolution that bans such a practice. However, it remains unknown whether Beijing has issued work visa for those laborers and how long they are allowed to stay in the country. Dozens of North Korean technicians have visited China since May for training programs in such sectors as transportation, energy and agriculture, according to diplomatic sources. Pyongyang's dispatch of unpaid trainees abroad does not violate the U.N. sanction, they said.