China This Week: Trump Tariff Bluff, Dementia Surge, Cambodia-China Military Drills
This week, we present a roundup of major developments within China, alongside key insights into its foreign affairs.
China Quote đ©
âI think the government has realised China can no longer rely on exports as the dominant growth driver, given the current deglobalisation trend.â
Zhang Zhiwei, president and chief economist at Pinpoint Asset Management.
Economic ActivityđŠ
China Called Trumpâs Bluff
Jonathan Chait writes in The Atlantic that Trumpâs global tariff strategy has collapsed after China resisted his threats and was still rewarded with a suspension of trade war measures. The episode reveals the ineffectiveness of Trumpâs coercive diplomacy and offers a cautionary tale for other countries, businesses, and institutions confronting his aggressive tactics.
âExport Rushâ Grips China Amid Temporary Tariff Truce
Simone McCarthy writes in CNN that a 90-day tariff rollback between the US and China has triggered a surge in Chinese exports, with factory orders and container bookings soaring. Firms are racing to ship stalled goods and reroute cancelled orders back to China. Despite high tariffs, uncertainty looms over long-term trade decisions, with some companies reluctant to abandon Chinese suppliers.
Foreigners Flock to Chinaâs Shenzhen as Visa-Free Entries Surge 160%
SCMP reports that Shenzhen has seen a 160% rise in visa-free foreign arrivals in 2025, fuelled by expanded entry waivers and its integration with the Greater Bay Area. Travellers from Asia dominate the surge, with new international routes and the cityâs tech economy and affordability driving its popularity among tourists and business visitors alike.
BPâs Chief U.S. Economist Worries China is Winning the Global Energy War
Fortune reports that BPâs U.S. chief economist Michael Cohen warns China is outpacing the U.S. in the energy transition by dominating clean tech supply chains, especially in EVs and battery storage. Despite Americaâs fossil fuel strength, experts argue Chinaâs lead in low-carbon shipping, fast-charging EVs, and port upgrades may define the future of global energy competitiveness.
Clean Energy Growth Cuts Chinaâs CO2 Emissions for the First Time
Lauri Myllyvirta writes in Carbon Brief that for the first time, clean energy growth in China has outpaced power demand, leading to a 1.6% year-on-year drop in COâ emissions in Q1 2025. Wind, solar, and nuclear additions offset fossil fuel use despite rising demand. However, emissions remain just 1% below the peak, with future reductions hinging on China's next five-year plan and economic response to US tariffs.
Inside Chinađ
Chinaâs Dementia Rates Rising Faster Than Global Average
Nature reports that dementia cases in China are increasing rapidly, surpassing global averages, largely driven by Alzheimer's and related conditions. A modelling study suggests this trend will continue unless public-health interventions target smoking, obesity, and high blood sugar. Without action, the burden on China's ageing population and healthcare system is expected to escalate significantly.
China and the Worldđ
China Offers Latin America and the Caribbean Billions in Bid to Rival US Influence
Reuters reports that President Xi Jinping pledged a $9 billion yuan-denominated credit line and increased investment in Latin America and the Caribbean at the China-CELAC Forum. While trade between China and the region hit $515 billion in 2024, leaders like Brazilâs Lula urged economic self-reliance. The move signals Chinaâs deepening engagement in the Global South amid rising US-China competition.
China Issues Warning to UK Over Terms of US Trade Deal
The Guardian reports that Beijing has criticised the new UK-US trade deal for provisions that may exclude Chinese firms from British supply chains. While the agreement offers tariff relief on cars and steel, it demands strict compliance with US security standards. China warned this could harm bilateral ties, calling the terms âpoison pillsâ and accusing the UK of aligning too closely with US containment efforts.
White House Backed Down on China Tariffs After Warning Theyâd Hurt âTrumpâs Peopleâ
The Independent reports that President Trump agreed to ease China tariffs after aides warned the economic impact would harm his core voter base. Following internal pressure, US and Chinese officials held talks in Geneva, leading to a 90-day suspension of tariffs. The shift reflects rising concerns about domestic fallout from Trumpâs aggressive trade policies.
UAE to Build Largest AI Campus Outside US in Trump-Era Deal
Federico Maccioni, Manya Saini, and Yousef Saba write in Reuters that the UAE has signed a landmark deal with the US to construct a massive AI campus in Abu Dhabi, bypassing earlier restrictions tied to China links. The Trump administration will allow up to 500,000 Nvidia chips to be exported annually, under US-managed data centre operations. The deal signals strategic alignment with Washington while recalibrating AI supply chains away from Beijing.
Hong Kong Rushes to Beef Up Security Law, Cementing Chinaâs Grip
Bloomberg reports that Hong Kong has fast-tracked new national security measures, granting sweeping powers to Beijingâs national security office, including legal immunity and âprohibited placeâ designations. The law took effect immediately via negative vetting, raising concerns over the erosion of local autonomy and expanding mainland Chinaâs legal reach into the cityâs institutions.
Hong Kongâs Richest Man is Caught Between China and America
The Economist reports that tycoon Li Ka-shing faces growing scrutiny from both Beijing and Washington over his companyâs port operations at the Panama Canal. As Trump calls for US control and China blocks CK Hutchisonâs $23bn asset sale, Li is increasingly trapped in a geopolitical crossfire, with nationalist backlash and regulatory pressure threatening his global business legacy.
Cambodia Hosts China for Their Latest and Largest Joint Military Exercise
AP News reports that Cambodia and China have launched their largest-ever Golden Dragon joint military exercise, featuring land, sea, and air drills. The 2025 exercise includes drones, robot dogs, and surgical robots, amid concerns over the expanded Chinese-funded Ream Naval Base. While Cambodia denies granting China exclusive access, the drills signal deepening military ties and regional strategic alignment.
US Typhon Missile System in Philippines is a Subtle Headache for China
Defense News reports that Chinaâs new national security white paper indirectly criticises the US deployment of Typhon missile systems in the Philippines, calling it a destabilising move. The document, released amid tariff negotiations, warns of âforeign interferenceâ and rising militarisation, while the Philippines maintains the deployment supports its defence modernisation amid growing South China Sea tensions.
US Shares Sixth-Generation Fighter Details, Intensifying China Air Rivalry
SCMP reports that the US has revealed new specifications for its F-47 fighter and CCA drones under the NGAD programme, highlighting extended range and advanced stealth. As China tests its J-36 and J-50 prototypes, both powers are accelerating development of sixth-generation aircraft, fuelling an arms race for air dominance in the Indo-Pacific.
Chinese Companies Are Secretly Powering North Koreaâs Global IT Workers Scheme
Fortune reports that Chinese firms are covertly enabling North Koreaâs IT worker scheme by offering fake business affiliations and logistical support. These workers, posing as Westerners, infiltrate Fortune 500 companies to fund Pyongyangâs weapons programme. A new investigation links 35 China-based firms to the operation, raising alarm over systemic security risks and calls for broader scrutiny by US authorities.
Tech in Chinađ„ïž
China Tests Bullet-Like Spy Satellite to Build 300-Strong Surveillance Constellation
Interesting Engineering reports that China has completed key tests for its Chutian-001 satellite, designed for very low Earth orbit (VLEO). The system is part of a planned 300-satellite surveillance network offering real-time imaging and target detection. Officials say the constellation could eventually support disaster relief, infrastructure management, and population monitoring across the globe.
Apple Sales in China Plunge 50%, Huawei Back on Top
Asia Financial reports that Appleâs smartphone sales in China dropped nearly 50% year-on-year, while Huawei regained market dominance with over 19% share. The resurgence is driven by patriotic consumer sentiment, successful Mate series launches, and Huaweiâs advances in domestic chipmaking. Meanwhile, Appleâs failure to launch AI features in China has further dampened its appeal.
DeepSeekâs âTech Madmanâ Founder Is Threatening US Dominance in AI Race
Bloomberg reports that Liang Wenfeng, founder of Chinese AI startup DeepSeek, has stunned the global tech world with its R1 model, developed at a fraction of GPT-4âs cost. Despite US sanctions, DeepSeekâs rapid rise reveals how Chinaâs AI sector is thriving through efficiency, sparse modelling, and patriotic investment. US lawmakers allege links to Chinese state influence, but DeepSeek remains opaque, ambitious, and a major force in global AI.
De/Cypher Data Diveđ
Chinaâs BYD has been Singapore's best-selling vehicle brand this year, beating Toyota for the first time. BYD entered the country's consumer automobile market in 2022, more than a year after Tesla, and has had substantially faster sales growth since then.
Image of the Weekđž
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Produced by Decypher Team in New Delhi, India