China This Week: Record Mining Investments, ASEAN Nuclear Ban Support, Maritime Ambitions
This week in China, we explore key shifts in its domestic and foreign policy landscape, along with a closer look at its maritime ambitions.
China Quote 🗩
“This not only ties the Philippines to another country’s war chariot but also endangers the peace and security of the entire region,”
Wu Shicun, founder of the government-sponsored think tank the National Institute for South China Sea Studies
The Yellow Sea – China's Maritime Future
China has been pressuring Asian countries aligned with the United States and South Korea is no exception. The Yellow Sea - a narrow water body that divides China and South Korea has emerged as a significant flashpoint in the Indo-Pacific. Recent Chinese action in the area points to a more aggressive strategy adopted by Beijing that fits into China’s aggressive maritime strategy. The Yellow Sea is a sea route that has been Beijing’s economic lifeline and has historically evolved as a major part of its defensive imperative – including the People’s Liberation Army Navy's Northern Fleet’s headquarters in Qingdao along the coast.
The Yellow Sea’s Strategic Importance
The Yellow Sea is strategically important as it fits into the larger geopolitical rivalry between the Chinese and Americans over Taiwan. It is an important waterbody for China’s mobility if it ever uses its naval power against the island nation. Adding to China’s anxieties is Camp Humphreys in Pyeongtaek, South Korea which is about 10 miles inland from the water body. It has been a strong critique of the joint the US-South Korean military drills that are performed in the area.
As part of its Northern Theatre Command, major Chinese missile launch sites, and a large part of its naval capacities are located near the Yellow Sea – it leaves it vulnerable to possible aggressions from US forces in the Indo-Pacific. As tensions grow with the Trump administration, troop deployment from South Korea and Japan would be easy through the Yellow Sea. This has made it extremely important for China to maintain control of the water body as part of its “Near Seas Defence” strategy.
China’s Increasing Aggression Towards South Korea
With the Yellow Sea holding significant importance for China’s national security and economic needs, it has become increasingly aggressive towards South Korea in recent times. Given its close ties with the United States, China is working towards containing its neighbour. This is evidenced from an increase in frequent incursion of Chinese warships and aircrafts into South Korea’s exclusive economic zones (EEZs) and its Air Defence Identification Zone (ADIZ). This forms a part of China’s “grey zone” tactic which pushes things just short of actual armed conflict.
According to military data, Chinese warships entered South Korea more than 330 times in 2024 alone and these incursions were not limited to the Provisional Measure Zones (PMZ) alone. This has led to a significant strain on the South Korean Coastal Guard and resources to be vigilant. A de-fact ‘red zone’ has been created for South Korea where it has been warned by China to not enter west of the 124th meridian east as a maritime boundary established with North Korea. This has limited South Korea’s operating capacities despite the EEZ indicating that China is making small incremental gains that are geared towards major gains without jostling the status quo.
H-6 bomber and fighter jets have frequently entered South Korean airspace without consent and a steady escalation in this has been noticed since 2017. Often seen as intelligence gathering missions, these flights have been instrumental in asserting South Korean air defence response times and have created a heightened sense of alert. In May 2025, the Fujian aircraft carrier conducted its first-ever fighter jet take-off and landing drill in the PMZ, which for all intents is a disputed land area. This was the first time a Chinese aircraft carrier was operated in the area indicating a growing naval presence and power projection.
China’s Dual-Use Capacities
What China does increasingly well is create things that serve a dual purpose – civilian structures that could be militarised in the long-term. A similar strategy has been adopted with large steel structures it has constructed in the Yellow Sea – the Shenlan 1 (2018) and Shenlan 2 (2024). The structures are supposedly installed for fish farming, but South Korea remains sceptical about its true nature. On attempting to explore the vessel, South Korea was denied access leading to a tense two-hour standoff between the two countries in 2025.
Conclusion
The Yellow Sea is essential in China’s geopolitical calculus. It is not merely a strategic maritime access juncture but a historical arena for its defensive posture. It is vital for China’s naval power projection and a rich resource basin as well. China has devised several tactics that it has deployed in the region to subvert both South Korean and American advances. Its use of grey zone tactics and the employment of dual-use tech – demonstrates Beijing’s willingness to solidify control in the Indo-Pacific and reshape regional power dynamics. China’s assertive expansion into the Yellow Sea is a linchpin in its larger vision of controlling its ‘near seas’ and projecting its influence.
Economic Activity🏦
China Eyes ¥35 Trillion Economic Gains in Five-Year Plan
Xinhua reports that China expects over ¥35 trillion in economic value added during its 14th Five-Year Plan (2021–2025), with an average annual growth rate of 5.5%. The plan underscores digitalisation, green industries, and innovation as core drivers. Policymakers frame this trajectory as a major step in “national rejuvenation” and technological self-sufficiency.
How China is reinventing the future of global manufacturing
World Economic Forum reports that China’s “Made in China 2.0” strategy is transforming its manufacturing sector into a high-tech, green powerhouse. By dominating key global supply chains in electric vehicles, solar panels and advanced batteries, China is positioning itself as the leader in sustainable and smart manufacturing. The strategy blends automation, digitalisation and environmental priorities, allowing China to shift from mass production to value-driven innovation and cement its global industrial influence.
China’s mining investment sets new record
Cecilia Jamasmie writes in MINING.com that China’s overseas mining investment has hit its highest level in over a decade, as Beijing races to secure critical raw materials amid growing geopolitical tensions. In 2024, there were ten deals worth more than $100 million, the most since 2013. Recent big acquisitions include Zijin Mining’s $1.2 billion deal in Kazakhstan and Baiyin Nonferrous Group’s $420 million purchase in Brazil. Driven by surging gold prices and urgency to lock in strategic supplies before further Western restrictions, China is aggressively expanding its global mining footprint.
Trump’s Tax Law a “Huge Gift” to China’s Clean Tech
Yale Climate Connections reports that former President Trump’s new tax law inadvertently benefits China’s clean-tech manufacturers by weakening US green subsidies and boosting relative competitiveness. Analysts argue this policy misstep strengthens China’s lead in battery, solar, and EV industries, potentially undermining Washington’s ambitions to decouple supply chains and foster domestic green jobs.
Xiaomi founder’s bold EV bet paying off where Apple’s failed
Bloomberg reports that Xiaomi founder Lei Jun’s strategy to enter the electric vehicle market has paid off spectacularly, succeeding where Apple’s car project collapsed. Xiaomi’s latest SUV drew over 289,000 orders within an hour, reinforcing Lei’s reputation and expanding Xiaomi’s brand appeal among China’s tech-savvy youth.
China mulls doubling Southbound Bond Connect to one trillion yuan
The Business Times reports that China is considering doubling its Southbound Bond Connect quota to one trillion yuan (S$178 billion), allowing onshore investors greater access to international bonds via Hong Kong. The move underscores Beijing’s efforts to boost two-way financial flows and strengthen the global appeal of the yuan amid a weakening US dollar.
Inside China🐉
Gansu Lead Poisoning Scandal Hospitalizes 233 Children
BBC reports that around 233 children in Gansu province were hospitalized following a severe lead poisoning food scandal on July 8, triggering national outrage and calls for stronger food safety oversight. Investigations are under way into contaminated school meals, highlighting ongoing weaknesses in rural public health systems and regulatory enforcement.
Shanghai Opens First Legoland, Tapping Leisure Market
Outlook Traveller reports that Shanghai inaugurated its first Legoland on July 5, marking a new chapter in China’s cultural and leisure infrastructure. The project aims to boost domestic tourism and diversify urban entertainment offerings. Analysts see it as part of broader efforts to stimulate consumption and develop family-oriented experiences in major cities.
China and the World🌏
China backs Southeast Asia nuclear ban at ASEAN meeting
Al Jazeera reports that China has signalled support for signing the Southeast Asia Nuclear-Weapon-Free Zone treaty during a key ASEAN gathering in Laos. The move is seen as a diplomatic push to strengthen ties in the region and position China as a responsible major power. The meeting also featured heated exchanges involving US Secretary of State Marco Rubio and Russian Foreign Minister Sergey Lavrov, highlighting geopolitical tensions over maritime security and regional stability.
China Urges EU to Ease Market Access Accusations Before Summit
Reuters reports that Beijing has urged the EU to “make fewer accusations” regarding market access and trade practices ahead of the late-July China-EU summit. Officials argue that constant criticism undermines bilateral dialogue and economic cooperation. The move highlights mounting friction as Brussels pushes investigations into Chinese subsidies and strategic sector dominance.
China expands visa-free entry to boost tourism and business
AP News reports that China has announced new visa-free entry and transit policies for citizens from multiple countries to revive inbound tourism and attract more business visitors. Under the updated scheme, travellers from nations including New Zealand, Australia, and several European states can enter without a visa for short stays. Officials say the move is part of efforts to stimulate domestic consumption and showcase China as an open, welcoming destination following years of strict pandemic-era controls.
China Surveys Seabeds Where Naval Rivals May One Day Clash
Chris Buckley writes in The New York Times that China’s research ships have significantly expanded seabed surveys in strategically vital areas such as off Taiwan’s east coast and around Guam. While officially scientific, these missions gather data that could aid submarine operations or mine deployment in a future conflict with the US. The surveys, which have intensified since 2024, underscore China’s ambitions to become a maritime power and deepen concerns across the Asia-Pacific.
Nvidia’s Huang meets Trump before leaving China trip
Reuters reports that Nvidia CEO Jensen Huang met with President Donald Trump before departing from his visit to China, according to Bloomberg. While details of their discussion remain undisclosed, the meeting highlights Nvidia’s delicate position as it navigates tensions between Washington and Beijing over advanced chip exports and AI technology. Huang's China trip focused on partnerships and market expansion amid U.S. export controls.
Trump has authority to take back US farmland from China, expert says
KEPR-TV reports that China expert Gordon Chang has argued President Donald Trump possesses the legal authority to reclaim U.S. farmland currently owned by Chinese entities. Speaking on Fox News, Chang cited national security risks and potential agroterrorism, warning that Chinese ownership poses a strategic threat. Trump allies have increasingly pushed for stronger restrictions or outright seizures to protect domestic agriculture and prevent foreign influence over American food security.
MP Materials Enters Multibillion-Dollar Partnership With Defence Dept
The Wall Street Journal reports that rare earth producer MP Materials has struck a multibillion-dollar agreement with the U.S. Department of Defense, making the Pentagon its largest shareholder. The deal aims to boost domestic supply of critical minerals essential for advanced weapons and clean tech. This move underscores U.S. efforts to reduce reliance on China for rare earth elements amid escalating strategic competition.
Taiwan begins 10-day military drills to counter Chinese threats
Politico reports that Taiwan has launched a 10-day series of large-scale military exercises simulating a full-scale Chinese invasion. The drills include live-fire tests and joint air-sea operations, reflecting growing concerns over Beijing’s intensified military activity near the island. Taipei aims to bolster deterrence and reassure the public amid rising cross-strait tensions, as China continues to assert its sovereignty claims aggressively.
Tech in China🖥️
Mirae Launches China Core TECH ETF in Hong Kong
Fundselectorasia reports that Mirae Asset has launched the Global X China Core TECH ETF in Hong Kong, targeting leading Chinese tech firms in AI, semiconductors, and automation. The move reflects strong investor interest in China’s innovation sectors despite geopolitical headwinds. Analysts see it as a sign of confidence in China’s long-term tech growth.
SenseRobot Showcases at UN AI Summit in Geneva
The laotian Times reports that SenseRobot, a chess-inspired AI robot from China, debuted at the UN-backed AI for Good Summit in Geneva, showcasing China’s rising AI capabilities. The demonstration aimed to emphasise human-robot interaction and precision learning. Observers say it strengthens China’s image as a leader in applied AI technologies on global stages.
Decypher Data Dive📊
Between 2019 and 2024, China’s auto companies experienced a significant surge in both inventory and debt levels, according to LSEG data covering 33 listed automakers headquartered in the country. Over this period, combined inventory more than doubled, reaching 370 billion yuan ($51.55 billion) in 2024. Meanwhile, total debt jumped by 56%, climbing to 959 billion yuan compared to 2019 levels.
The average time carmakers took to pay their suppliers and other short-term creditors widened to 108 days in 2024 from 99 days in 2019.
Image of the Week📸
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Microessay By Priyanka
Data By Bhupesh
Edited By Aurko
Produced by Decypher Team in New Delhi, India