China slices salami in the Pacific
Busy navy, high-yield farming, Alibaba boost, Xi-Putin phone call, and more
This is The China Week, a succinct roundup of what you need to know to stay informed about the world’s other superpower. Each newsletter summarizes the most important stories of the previous seven days, with analysis or comment where suitable. The newsletter is free for the next few weeks—subscribe here if this was forwarded to you.
I’ll also link to noteworthy China stories and podcasts that are not newsy, including articles I worked on or edited. This week’s pieces are:
An article on ChinaFile by Grace Marion: In Taiwan, a Growing Cohort of ‘Preppers’ Readies Itself for an Uncertain Future;
The first episode of my new podcast series, Rhyming Chaos: How to commit a self-coup, in the U.S. and in China, with Geremie Barmé.
—Jeremy Goldkorn
Top story
China flexes Pacific muscles
China is projecting power and influence right across the Pacific Ocean:
A Chinese navy helicopter buzzed a Philippine airplane over the disputed Scarborough Shoal (黄岩岛 or Huangyandao) on February 18.
The chopper flew within 10 feet (3 meters) of the Philippine Bureau of Fisheries and Aquatic Resources patrol plane, according to an Associated Press journalist who was on the plane together with other invited foreign media.
Three Chinese navy vessels conducted live fire drills in the Tasman Sea between Australia and New Zealand, causing commercial flights to be diverted in the skies above on February 21 and 22.
The Guardian reported that the exercise, “conducted at short notice, was viewed within the Australian military as a ‘significant disruption’ but not one that posed an elevated risk to airspace users, while New Zealand’s Defense Minister Judith Collins said that the Chinese warships were armed with “‘extremely capable’ weapons that could reach Australia.”
The Financial Times headlined a story on the drills “Chinese warships sail within 150 nautical miles of Sydney,” while the New York Times noted that “the three vessels were not breaking international law, but they were unusually far south on an undeclared mission.”
A submarine data cable linking the main island of Taiwan and Penghu was severed today, by a Chinese-crewed ship registered to the west African nation of Togo.
According to Taiwan's Coast Guard Administration, the “incident may be ‘gray zone’ activity by China.”
The vessel has been impounded at a Taiwanese port and its crew detained.
China signed a deal with the Cook Islands on February 18 for a strategic partnership that involves deep-sea mining, education scholarships, and other projects.
The agreement has led to a diplomatic row with New Zealand. (The Cook Islands is a self-governing state in free association with New Zealand, a constitutional arrangement established in 1965, which gives Cook Islanders rights of residence in New Zealand.)
Agricultural policy
Farm productivity boost to reduce China’s grain imports?
Since 1982, the Chinese government’s first policy document of the year has usually focused on agriculture, and come to be known as Document No. 1. This year’s edition was released on February 23 (in Chinese, unofficial English translation), and begins with a directive to “deeply advance efforts to improve the large-scale unit yield of grain and oil crops.”
The research firm Trivium points out that the document “significantly scales back the language around food security—mentioning it only once in a laundry list of priorities in the introduction,” which is a “a big change from recent iterations.”
Trivium also notes that earlier policies have already raised yields, resulting in a record-breaking 2024 harvest, relieving anxiety about food security. This probably means China will import and stockpile less grain.
Investing, trends, economics
Alibaba boosts markets
Alibaba posted its fastest quarterly revenue growth since 2023, which the Chinese ecommerce giant attributed to its artificial-intelligence strategy. Coming after Xi Jinping’s meeting with tech titans last week, the news prompted a surge in Chinese tech stocks.
The rally was somewhat dampened by hostile talk from the Trump administration, including a proposal from the U.S. Trade Representative to charge up to $1.5 million for Chinese-built vessels entering U.S. ports, and talk of toughening semiconductor restrictions on China.
Other news worth following:
China’s holdings of US Treasuries fell to the lowest level since 2009, according to the Financial Times: “The value of U.S. sovereign debt held by Chinese investors fell by $57bn to $759bn in 2024, “ although that figure does not include Treasuries that may be held in accounts in other countries.
“Chinese companies only announced $191 million of new investments into Canada, Mexico and the U.S. last quarter…below levels seen during the worst of the pandemic,” according to Bloomberg.
Hospital bankruptcies are soaring in China, reports the New York Times. Financial strains include pandemic spending hangovers, a slowing economy, government efforts to reduce healthcare costs, and the fact that China’s aging population means that “health care costs are increasing faster than the money flowing into the country’s insurance funds.”
Geopolitics
Putin phones Xi, Beijing talks to Damascus
Moscow chat
On February 24, the third anniversary of Russia's full-scale invasion of Ukraine, Xi Jinping spoke with President Vladimir Putin by phone at the latter’s request, according to the Chinese Foreign Ministry readout.
The call comes after Donald Trump’s dramatic alignment with Putin. During the call with Xi, Putin seems to have sought to mollify concerns that the U.S. may drive China and Russia apart: Putin said that “developing relations with China is a strategic choice made by Russia with a long-term perspective, not a stopgap measure, and is not affected by a temporary event or external factors,” per the Chinese readout.
The Russian readout (in Russian, English) however, merely says that “Putin informed his counterpart about the recent Russian-American contacts. The President of China expressed his support for the dialogue initiated between Russia and the United States.”
Damascus chat
Jesse Marks writes: In a significant diplomatic development, Syria's newly appointed President Ahmed al-Sharaa held a meeting with China's Ambassador to Damascus, Shi Hongwei 史宏微, marking the first official engagement between the two nations since the ousting of Bashar al-Assad in December 2024.
Flying cars
Move over Cybertruck
Electric car company Xpeng says it has completed winter trials for its AeroHT model, which looks a little like a six-wheel Cybertruck, and carries an eVTOL (electric vertical take-off and landing) aircraft.
You can see video footage of the car and aircraft on Youtube.