Beijing eased hukou restrictions. Chinese AI talent has been restricted from leaving China. US has paused its second tranche of arms sales to Taiwan. There are reports of Takaichi recriminations from Xi in his meeting with Trump. Heavy rare earth shipments have been restricted for the past four months in Japan. Mao's strategic stalemate is a stage of protracted war, not an endgame. An American journalist for Xinhua and other state outlets is arrested and accused of acting as an unregistered agent of the state.

Taiwan's output is growing at a blistering 14% annually thanks to soaring sales of chips and servers for data centres. In the past year operating profits at South Korea’s makers of memory chips have risen by over 500%. Even sluggish Japan is benefiting. In 2025 all three countries enjoyed record exports and current-account surpluses.

Trump's visit to Beijing this month was a year in the making, a celebration of an unlikely U.S. pivot that began when both nations slashed tit-for-tat tariffs last May. Trump made the seeming detente possible last year with a series of targeted concessions designed to mollify Xi Jinping's concerns. Xi is giving Trump 2.0 the benefit of the doubt but the circling China hawks mean he's unlikely to be lulled into a false sense of security.

In China's 15th Five-Year-Plan, traditional industries are high in the priorities. China wants to keep making low-tech goods alongside its push into advanced technology. Textiles are the most important industry in China, accounting for over 35% of the global market share. It's the end of the virtuous cycle of industrialization and development.

The last time Xi Jinping left China was in late October. Since then, a dozen heads of state have visited China. The foreign ministry's protocol department has handled it flawlessly, setting up grand receptions for its visitors and flying their national flags beside China’s on important boulevards.

The U.S. has paused a $14 billion arms sale to Taiwan in order to preserve munitions stockpiles for the ongoing war against Iran. On May 20, Donald Trump said he would talk to Taiwanese President Lai Ching-te before deciding whether to authorize the package. Yuan Hongbing is an Australian-based Chinese-Australian legal scholar, former Peking University law professor, and longtime CCP analyst. Yuan believes Lai would tell Trump that Taiwan's independence is a four-century-old aspiration.

JPMorgan Chase says global investors' appetite for Chinese equities, companies and assets continues to rise due to rapid technological advancements and low valuations. 57% of investors are considering investing in China, up from 51% in the same period last year. The poll was conducted during the Global China Summit in Shanghai last week.

Zhu Feng, dean of Nanjing University’s School of International Studies, warns that the era when the three joint communiques set the terms of US-China relations may have come to an end. Zhu thinks it might be unrealistic to expect Beijing and Washington to reach a comprehensive political understanding on Taiwan.