Over the past decade China’s hacking program has grown rapidly, to the point that in 2023 Christopher Wray, then FBI director, noted it was larger than that of every other major nation combined. China’s growing heft and sophistication has yielded success in three main areas.

The first is political espionage, linked primarily to the Ministry of State Security (mss), China’s foreign-intelligence service. Last year it emerged that one group of Chinese hackers, dubbed Salt Typhoon, had breached at least nine American phone companies, giving them access to the calls and messages of important officials. Ciaran Martin, who led Britain’s cyber-defense agency from 2016 to 2020, compares it to the revelations in 2013 by Edward Snowden, a government contractor, that American spy agencies were conducting cyber-espionage on a huge scale. China was “gaining vast access to the nation’s communications via a strategic spying operation of breathtaking audacity,” he says.

A second is in areas of little espionage value: hacking that lays the groundwork for sabotage in moments of crisis or war. These efforts are led by the People’s Liberation Army (PLA), China’s armed forces. In 2023 it became apparent that a PLA-linked hacking group known as Volt Typhoon had, over several years, burrowed into an extraordinary range of American critical infrastructure, from ports to factories to water-treatment plants, across the continental United States and in strategic American territories such as Guam.

All of that builds on a third type of hacking: the industrial-scale theft of intellectual property. In 2013 Mandiant, a cyber-threat intelligence firm, which is now part of Google, made waves when it exposed “apt1”, the label for a group of hackers linked to the PLA. apt1 was not focused on stealing political secrets or turning off power grids but on stealing blueprints, manufacturing processes and business plans from American firms. A year later, America’s government took the then unprecedented step of indicting five PLA hackers for this activity. Keith Alexander, a former head of the National Security Agency (NSA), America’s signals-intelligence service, described this as “the greatest transfer of wealth in history”.

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I wrote a piece on China’s evolution into a bigger, more sophisticated and more threatening cyber power over the past decade, and particularly in the last few years. I also look at the pivotal role played by China’s private sector ecosystem in that shift. https://t.co/EyAyZsgG84

— Shashank Joshi (@shashj) March 26, 2025

Buried in China’s latest government budget were some numbers that add up to an alarming trend. Tax revenue is dropping.

The decline means that China’s national government has less money to address the country’s serious economic challenges, including a housing market crash and the near bankruptcy of hundreds of local governments.

Weak tax revenue also puts China’s leaders in a box as they square off with President Trump, who has imposed 20 percent tariffs on goods from China and threatened more to come. Beijing has less spare cash to help the export industries that are driving economic growth but could be hurt by tariffs.

The drop in tax collections leaves China’s leaders in an unfamiliar position. Until the last several years, China enjoyed robust revenue, which it used to invest in infrastructure, a rapid military buildup and extensive industrial subsidies. Even as economic growth has slowed gradually over the past 12 years, taking a dent out of consumer spending, tax revenue held fairly steady until recently.

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China’s Government Is Short of Money as Its Leaders Face Trump https://t.co/ElmQsX47Dt

— Michael Standaert (@mstandaert) March 21, 2025

The pace of China’s open-source AI push has been relentless. Since the debut in January of DeepSeek R1 — China’s answer to OpenAI’s o1 series — a wave of increasingly capable models has followed. Alibaba claims its latest AI reasoning model QwQ-32B rivals DeepSeek’s R1 and has performed well in official benchmark tests. Every few weeks, another arrives, pushing the boundaries of what open-source AI can do.

Chinese tech groups are taking a very different approach. By open sourcing AI, they not only sidestep US sanctions but also decentralize development and tap into global talent to refine their models. Even restrictions on Nvidia’s high-end chips become less of an obstacle when the rest of the world can train and improve China’s models on alternative hardware.

AI advances through iteration. Every new release builds upon the last, refining weaknesses, expanding capabilities and improving efficiency. By open-sourcing AI models, Chinese tech groups create an ecosystem where global developers continuously improve their models — without shouldering all the development costs.

The scale of this approach could fundamentally reshape AI’s economic structure. If open-source AI becomes just as powerful as proprietary US models, the ability to monetise AI as an exclusive product collapses. Why pay for closed models if a free, equally capable alternative exists?

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Why China is suddenly flooding the market with powerful AI models https://t.co/6NGxSWX6Tl | opinion

— Financial Times (@FT) March 19, 2025

Throughout China’s annual legislative meeting, the national leader Xi Jinping made clear that he wants nothing to hold back his plans for China to march past its rivals by becoming a technological superpower. Not the economic slowdown or heavy local government debt, nor a trade war with the United States.

The meeting in Beijing, called the National People’s Congress, was once a stage for Communist Party leaders to make a show of public consultation. Congress delegates, although handpicked by the party, sometimes chided officials over problems like pollution. There were even rare flashes of discord among senior officials.

Mr. Xi, though, has turned the meeting into a meticulously orchestrated, weeklong salute to himself and his vision. This time, he urged China to forge ahead in advanced technologies including artificial intelligence, biotechnology and new weapons.

“Xi has seen how decades of investment into science by the U.S. government after World War II was a knockout success for the United States, and wants to replicate that,” said Jimmy Goodrich, who studies China’s science policies as a senior adviser at RAND Corporation.

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What Slowdown? Xi Says China Must Win the Global Tech Race
Well sort of…. https://t.co/AJ7299v2qA

— Paul Triolo (@pstAsiatech) March 11, 2025

From the choppy waters of the South China Sea and Taiwan Strait to the frozen ridges of the Himalayas, China is pursuing a relentless campaign of expansion, operating in the hazy zone between war and peace to extend its power across Asia.

Beijing carefully calibrates each move with the aim of staying below the threshold of action that could trigger outright conflict. But, step by incremental step, it has pushed deeper into contested areas, exhausting opponents and eroding their strength with a thousand cuts.   

Whether it is probes by war planes, maneuvers by coast guard ships or the creeping construction of new civilian settlements, China is constantly pushing boundaries in what security strategists call the “gray zone.” It tests the limits of what its opponents consider tolerable behavior, escalating a bit with every new action.

The Wall Street Journal reviewed years of ship-movement data, satellite images, flight-tracking information and other measures of Chinese activity. Taken together, it shows a clear intensification of tactics meant to intimidate rivals and deepen China’s control.

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China Is Waging a ‘Gray Zone’ Campaign to Cement Power. Here’s How It Looks. Years of ship-tracking data, flight paths and satellite images show a clear intensification of Beijing’s tactics across a swath of Asia@NiharikaSM https://t.co/WpfFAILKYRhttps://t.co/WpfFAILKYR

— Jonathan Cheng (@JChengWSJ) March 10, 2025

Taiwan detained a cargo ship and its eight Chinese crew members after an undersea fiber-optic cable was severed, in a stepped-up effort to police such incidents, which are often seen as part of China’s pressure campaign targeting the self-ruled island.

Taiwan’s coast guard said the incident was being handled as a national security matter and that deliberate sabotage hadn’t been ruled out. A string of such episodes has called attention to Taiwan’s vulnerability as it works to ensure that it has secure internet services to keep the island online in the event of an invasion or blockade by China.

Similar incidents elsewhere, including the cutting of data cables beneath the Baltic Sea, have brought global attention to security concerns surrounding the critical infrastructure. 

Taiwan’s coast guard said it spotted the Togo-flagged cargo vessel in the area on Saturday evening. When it dropped anchor around 2:30 a.m. on Tuesday, the coast guard directed the ship to move away.

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Taiwan detained a ship and its Chinese crew after an undersea fiber-optic cable was severed https://t.co/KuiViC3ePV

— The Wall Street Journal (@WSJ) February 25, 2025

The pandemic response wasn’t perfect. But the pandemic itself was real, and punishing. Above all, it revealed our vulnerability — biological, social and political. And in the aftermath of the emergency, Americans have largely looked away, choosing to see the experience less in terms of death and illness than in terms of social hysteria and even public health overreach. For many, the main lesson was that in the world of humans, as in the world of microbes, it’s dog-eat-dog out there.

But the consequences and aftershocks were also more subtle and diffuse: it isn’t easy to live in isolation and in fear, often largely online and surrounded by exceptional illness and mortality, as we watched aspects of the world and our own lives we’d long taken for granted be withdrawn or torn apart. And it isn’t easy to get over all that, however eager we thought we were to “return to normal.” We lived through as many deaths as some of the worst-case scenarios predicted, and without an initial spasm of inspiring solidarity and miraculous biomedical intervention, it could have been worse. But when we came out the other side — 1.5 million fewer of us — we were, as a country, exhausted, resentful, deluded and distrustful. A huge amount of the world in which we now reside was formed in that crucible. I will write more about that next week.

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The Covid Alarmists Were Closer to the Truth Than Anyone Else https://t.co/431zklvB2r

— judy gitlin (@heyjudenyc) February 26, 2025

God whose strength bears us up as on mighty wings: We rejoice in remembering thy athlete and missionary, Eric Liddell, to whom thou didst bestow courage and resolution in contest and in captivity; and we pray that we also may run with endurance the race that is set before us and persevere in patient witness, until we wear that crown of victory won for us by Jesus our Savior; who with thee and the Holy Spirit livest and reignest, one God, for ever and ever. Amen.

21 February 1945. Eric Liddell died (aged 43). As a committed Christian, he refused to run in heats of the 100 metres at the 1924 Paris Olympics because they were held on a Sunday, but he won the 400 metres. His inspirational story featured in the film Chariots of Fire. pic.twitter.com/8ZSlZCQZHy

— Prof. Frank McDonough (@FXMC1957) February 21, 2025

The “relevance to the 2020s” of Kindleberger’s [1973] book is greater and gloomier. We have two competing superpowers, the US and China. Both fancy themselves as hegemons; neither is willing to accept the responsibilities of the role. The US vows vengeance on anybody who threatens the primacy of the dollar even as its own actions put that primacy in doubt. China rails against its lack of status in the current economic system, even as it plays a prime role in destabilising it.

With luck, there will be no crisis on a scale that needs leadership and global co-ordination to resolve — but luck always runs out in the end. It makes sense to bolster the international institutions as much as possible. It makes sense, too, to run sensible domestic policies and not end up dependent on the kindness of strangers, an unhelpful truism, like advice not to let your house catch fire.

“If leadership is thought of as the provision of the public good of responsibility, rather than the exploitation of followers or the private good of prestige, it remains a positive idea,” wrote Kindleberger. The US, for all its failings, provided that kind of leadership. The world awaits, with trepidation, the experience of an economic or financial crisis without it.

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Who will now stabilise the world economy? https://t.co/gAb7tUq1jd | opinion

— Financial Times (@FT) February 19, 2025

A key determinant of becoming a global leader in AI is the ability to build an efficient, sustainable and resilient infrastructure that ensures energy is available, reliable and constant. The state of national power grids in China, the EU, and the US remains a significant barrier. China’s creaking grid represents a major constraint to progress and the government is planning to invest more than US$800bn over the next six years. The investment will support Beijing’s Eastern Data, Western Computing initiative, which aims to tap into China’s energy resources in the west and transfer computing power to economic hubs along the coast.

The European power grid is one of the oldest in the world. Moreover, around 40% of the grid is around ten years off its expected lifespan, while over half of the physical grid needs to be repaired or replaced. It remains uncertain whether the estimated US$584bn in European grid investments needed this decade will materialise. In 2024, the EU’s Modernisation Fund handed out almost US$3bn to modernise member states’ energy systems, amongst other activities.

The ageing and fragmented US grid comprises three main regions (Western, Eastern and Texas), which remain inefficient, especially for interconnections between regions. The US Department of Energy (DoE) estimates that power outages cost the US economy US$150bn annually. Modernising the US grid will cost trillions over the coming decades.

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Building AI infrastructure is only one part of the story, as sovereign AI capabilities may prove more decisive.

Read the latest analysis by Charlie Edwards: https://t.co/5y4Hb1bd1o pic.twitter.com/HWb7vskEoL

— IISS News (@IISS_org) January 31, 2025

 China’s military is building a massive complex in western Beijing that US intelligence believes will serve as a wartime command centre far larger than the Pentagon, according to current and former American officials.

Satellite images obtained by the Financial Times that are being examined by US intelligence show a roughly 1,500-acre construction site 30km south-west of Beijing with deep holes that military experts assess will house large, hardened bunkers to protect Chinese military leaders during any conflict — including potentially a nuclear war.

Several current and former US officials said the intelligence community was closely monitoring the site, which would be the world’s largest military command centre — and at least 10 times the size of the Pentagon.

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SCOOP China builds huge new wartime military command centre in western Beijing – 10 times the size of the Pentagon https://t.co/19nxQg0MqM via @ft

— Demetri (@Dimi) January 30, 2025

The market reaction, when it came, was brutal. On January 27th, as investors realised just how good DeepSeek’s “v3” and “R1” models were, they wiped around a trillion dollars off the market capitalisation of America’s listed tech firms. Nvidia, a chipmaker and the chief shovel-seller of the artificial-intelligence (AI) gold rush, saw its value fall by $600bn. Yet even if the Chinese model-maker’s new releases rattled investors in a handful of firms, they should be a cause for optimism for the world at large. DeepSeek shows how competition and innovation will make ai cheaper and therefore more useful.

DeepSeek’s models are practically as good as those made by Google and OpenAI—and have been produced at a fraction of the cost. Barred by American export controls from using cutting-edge chips, the Chinese firm undertook an efficiency drive, even reprogramming the chips it used to train the model to eke out every drop of power. The cost of building an AI model that can stand toe-to-toe with the best has plummeted. Within days, DeepSeek’s chatbot was the most downloaded app on the iPhone.

The contrast with America’s approach could not be starker. Sam Altman, the boss of OpenAI, has spent years telling investors—and America’s new president—that vast sums of money and computing power are needed to stay at the forefront of AI. Investors have accordingly been betting that a handful of firms stand to reap vast monopoly-like rents. Yet if fast followers such as DeepSeek can eat away at that lead for a fraction of the cost, then those profits are at risk.

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"However, the real winners will be consumers. For AI to transform society, it needs to be cheap, ubiquitous and out of the control of any one country or company. DeepSeek’s success suggests that such a world is imaginable."https://t.co/8aZ4eM5PV5 #USChina #Geoeconomics #地経学

— Ken Doi土居 (@kitakazethomas) January 30, 2025

Almost overnight, DeepSeek has upended many of the assumptions inside Silicon Valley about the economics of building AI, as well as the best technical methods for developing the technology and the extent of the US lead over competitors in China. For much of the past two-plus years since ChatGPT kicked off the global AI frenzy, the industry has bet that the path to better AI depends largely on spending heavily on more advanced chips from companies like Nvidia Corp. and increasingly massive data centers to house them.

US President Donald Trump welcomed the development as “good, because you don’t have to spend as much money.” Industry leader Nvidia, whose shares took a huge hit from DeepSeek’s debut, also lauded it as an “excellent AI advancement” in a statement on Monday.

The market fallout was staggering. Hype over DeepSeek’s feat drove a nearly $1 trillion rout in US and European technology stocks on Monday as investors questioned the spending plans of some of America’s biggest companies. The share plunge in AI chipmaker Nvidia alone erased roughly $589 billion in market value, the biggest wipeout in US stock-market history.

Meanwhile, in DC, lawmakers are left to figure out the best route to beat back China’s progress on a technology some see as crucial to its military and economy, given the Biden administration’s chip export curbs were not enough. David Sacks, President Donald Trump’s crypto and AI czar, said DeepSeek shows the global AI race will be very competitive — while blaming the Biden administration for regulation that “hamstrung” AI development.

Further complicating matters, the renewed uncertainty over large AI investments comes just days after Trump championed a $100 billion joint venture from OpenAI, SoftBank Group Corp. and Oracle Corp. to boost US competitiveness by investing in data centers and other physical infrastructure. Now, there are new questions about the rationale for stratospheric AI budgets.

Read it all.

The censorship part here is eerie. Had a physical reaction while reading that.

Bloomberg: DeepSeek Challenges Everyone’s Assumptions About AI Costs https://t.co/8ewlGlxrkD pic.twitter.com/0R1ns25aoM

— Emily Binder (@emilybinder) January 28, 2025

President Trump’s landmark executive order designating major drug cartels as Foreign Terrorist Organizations (FTOs) marks a watershed moment in America’s approach to national security and strategic competition against China. This reclassification acknowledges an uncomfortable truth: the fentanyl crisis is not merely a law enforcement challenge but a sophisticated form of irregular warfare targeting American society, with cartels serving as proxies in a broader strategic campaign orchestrated by China against U.S. interests.

The devastating impact of this proxy warfare is reflected in stark statistics. According to the CDC’s National Center for Health Statistics, synthetic opioids, primarily fentanyl, were responsible for over 70,000 deaths in 2022. The Drug Enforcement Administration has meticulously documented how Mexican cartels have industrialized fentanyl production using precursor chemicals sourced predominantly from China, creating what amounts to a chemical weapons supply chain targeting American communities. These aren’t merely crime statistics – they represent casualties in an irregular war being waged through proxy forces, with networks stretching from Beijing through Sinaloa and into every major American city.

The Brookings Institution has documented how this crisis disproportionately impacts working-class communities, creating zones of social instability that strain local governments and emergency services – precisely the type of internal disruption that aligns with China’s strategic objectives. The National Institute on Drug Abuse estimates the economic burden of the opioid crisis exceeds $1 trillion, representing a significant drain on American resources and societal resilience. This continued deficit reduces our ability to reinvest in competition with China, while contributing to the ballooning national debt.

Read it all.

https://t.co/T0XizEzRfs

— Small Wars Journal (@smallwars) January 22, 2025

If there is a single technology America needs to bring about the “thrilling new era of national success” that President Donald Trump promised in his inauguration speech, it is generative artificial intelligence. At the very least, ai will add to the next decade’s productivity gains, fuelling economic growth. At the most, it will power humanity through a transformation comparable to the Industrial Revolution.

Mr Trump’s hosting the next day of the launch of “the largest ai infrastructure project in history” shows he grasps the potential. But so does the rest of the world—and most of all, China. Even as Mr Trump was giving his inaugural oration, a Chinese firm released the latest impressive large language model (LLM). Suddenly, America’s lead over China in ai looks smaller than at any time since ChatGPT became famous.

China’s catch-up is startling because it had been so far behind—and because America had set out to slow it down. Joe Biden’s administration feared that advanced ai could secure the Chinese Communist Party (CCP) military supremacy. So America has curtailed exports to China of the best chips for training ai and cut off China’s access to many of the machines needed to make substitutes. Behind its protective wall, Silicon Valley has swaggered. Chinese researchers devour American papers on ai; Americans have rarely returned the compliment.

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The success of China’s large language models could turn the economics of AI on its head. America must prepare for a world in which China is breathing down its neck https://t.co/RGElwLsoIN

— The Economist (@TheEconomist) January 23, 2025

Slowing China’s progress in artificial intelligence (AI) has been a top priority for Washington for the last three years. To achieve that goal, the Biden administration has escalated controls on the sale of advanced chips and chipmaking equipment to China, including a fresh salvo of restrictions earlier this week.

Policymakers may be flummoxed to learn, then, that Chinese companies aren’t just keeping up in the AI race: some believe they could overtake American industry leaders as soon as next year.

The latest breakthroughs came late last month, when two Chinese AI companies released new models that perform as well, if not better than their American peers. Developed by tech giant Alibaba and High Flyer Capital Management, a Chinese quantitative hedge fund, the technologies compete directly with OpenAI’s latest o1 model, which can “reason” through problems — a process some researchers have described as a new paradigm.

These achievements by Chinese firms underscore how formidable a competitor the country remains in the global AI race. Buoyed by a wealth of engineering talent and intense domestic competition — plus ample chip supply for now — Chinese AI firms are unlikely to fall back in that race as easily as some in Washington may hope.

Influential figures in the AI community are taking note. On Monday, Clement Delangue, chief executive of HuggingFace, a popular platform that offers tools and data to AI developers, predicted on LinkedIn that China would “start to lead the AI race in 2025.”

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WSJ When Muhammad Imtiaz received an electricity bill of over $120 last summer, he panicked. The bill, for June and July, was all he earns in a month of ferrying passengers on his motorbike in the scrappy suburbs outside Pakistan’s capital Islamabad.

In his two-room home, where he lives with his wife and four children, he only has a fridge and lights. He runs two fans in the summer months when heat can exceed 110 degrees Fahrenheit.

“Should I give my rent, pay the electricity bill, or buy food for my children?” said Imtiaz, who has racked up $3,000 in debt. His family has one meal a day: watered-down lentils with flatbread. A decade ago, Pakistan, cripplingly short of power, turned to Beijing to build more than a dozen coal, solar and hydroelectric power plants as part of China’s huge infrastructure push in the country.

Now a series of policy mistakes by Islamabad means that Pakistan has enough electricity and more—but, due to the huge debt owed to China, few can afford it. The crisis is overwhelming Pakistan’s fragile economy, throwing millions of households into misery, shredding government finances and shutting down industry.

Read it all.

Pakistan’s Reliance on Chinese-Built Power Plants Is Strangling Its Economy—Pakistan turned to Beijing to solve a crippling energy shortage. Now, crushed under debt and sky-high energy prices, its economy is diving.@SaeedShah https://t.co/fVY63hSYHmhttps://t.co/fVY63hSYHm

— Jonathan Cheng (@JChengWSJ) December 4, 2024

U.S. officials said Tuesday they had not been able to expel Chinese government hackers from telecommunications companies and internet service providers, warning concerned users to turn to encrypted messages and voice calls and giving no timeline for securing carriers.

The downbeat press briefing came more than three months after the first report of Chinese spies deeply penetrating major carriers for espionage, and after the FBI and the Cybersecurity and Infrastructure Security Agency (CISA) met with scores of companies to help them shore up defenses and hunt for hackers in their networks.

“Given where we are in discovering the activity, I think it would be impossible for us to predict a time frame on when we’ll have full of eviction” of hackers from the networks, said Jeff Greene, executive assistant director for cybersecurity at CISA.

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U.S. officials say they still have not expelled Chinese telco hackers https://t.co/udxPjSnK8O

— Dr. David P. Weber, Forensics Professor (@dpweber_fraud) December 3, 2024

O God, who in thy providence didst call Channing Moore Williams to the ministry of this church and gave him the gifts and the perseverance to preach the Gospel in new lands: Inspire us, by his example and prayers, to commit our talents to thy service, confident that thou dost uphold those whom thou dost call; through Jesus Christ our Lord, who liveth and reigneth with thee and the Holy Ghost, one God, for ever and ever. Amen.

Today the Episcopal Church commemorates Channing Moore Williams, Missionary Bishop in China and Japan, 1910 https://t.co/0LZw7gSQOZ pic.twitter.com/psQgwwaPaf

— The Anglican Church in St Petersburg (@anglicanspb) December 2, 2020

[According to Barclays’ economists…] The economic circumstances facing China have parallels with Japan’s experience after its asset bubble burst in the early 1990s. This created the term ‘Japanification’, which is typically defined as a combination of slow growth, low inflation, and a low policy rate, accompanied by deteriorating demographic trends.

To measure this phenomena, a Japanese economist, Takatoshi Ito, introduced a Japanification Index, which measured the sum of the inflation rate, nominal policy rate, and GDP gap. To apply to China’s economy, we have adjusted this index, replacing the GDP gap with working-age population growth, as the estimation methods of GDP gaps differ across nations and working-age population is by far the most fundamental determinant for long-term growth. Our amended index shows that China’s economy has become more ‘Japanised’ than Japan’s recently, albeit marginally.

This not a surprise to us. A demographic drag, the emergence and collapse of asset bubbles, debt overhang, zombie companies, deflationary pressures from excess capacity/high debt, and high youth unemployment, to name a few, are some of the notable similarities between the economies of China and Japan post their bubbles.

Read it all.

"The “Japanification” of China continues to be a big theme, with a lot of eerie parallels right down to stimulus proving wanting. Here’s the latest symptom" https://t.co/tlxjGqqgnd pic.twitter.com/TnKwearGl0

— Scott Lincicome (@scottlincicome) October 17, 2024

O God, who in thy providence didst call Joseph Schereschewsky from his home in Eastern Europe to the ministry of this Church, and didst send him as a missionary to China, upholding him in his infirmity, that he might translate the holy Scriptures into languages of that land: Lead us, we pray thee, to commit our lives and talents to thee, in the confidence that when thou givest thy servants any work to do, thou dost also supply the strength to do it; through Jesus Christ our Lord, who liveth and reigneth with thee and the Holy Spirit, one God, for ever and ever.

With St. James and St. Gamaliel, Bishop Samuel Isaac Joseph Schereschewsky is one of my favorites. Like me a he was convert to Anglicanism from Judaism. Unlike me, he was very gifted with languages.

Blessed feast! pic.twitter.com/X6cUcjshY4

— Fr. Brandon (@barukalas) October 14, 2022

The illicit fentanyl that kills tens of thousands of Americans a year is largely produced from Chinese chemicals cooked up in clandestine Mexican laboratories, according to U.S. authorities. This requires drug traffickers to transport the necessary chemicals halfway around the world. But cartels have found a clever way to smuggle these chemicals from China to Mexico – by first importing them into the United States.

Master carton shipping has become an indispensable way for delivery companies to move vast quantities of merchandise around the world quickly. It’s legal, it’s practical, and in the era of e-commerce, it’s key to our everyday lives, whether we realize it or not.

Still, the practice makes it a snap for traffickers to sneak fentanyl chemicals into the country, hidden in small boxes packed inside other boxes. On top of that, a little-known U.S. trade regulation has made this smuggling easier still.

The de minimis rule exempts low-value parcels from taxes, duties and stringent customs reporting rules. It’s meant to keep U.S. Customs and Border Protection from wasting time and effort when the cost of collecting tariffs on cheap imports exceeds the revenue gained.

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A tweak in a trade rule fueled America’s online shopping habits. It also helped Mexican narcos smuggle vital fentanyl-making chemicals from China Here’s how: https://t.co/ahkIC9QfdB by @draz_DJ @gottesdiener @kristinacooke @SEisenhammer via @specialreports pic.twitter.com/aXnl1Yfpkw

— Reuters Investigates (@specialreports) October 1, 2024

It’s 1 a.m. and Thomas Wu is riding his bike on the empty streets of Shanghai. The 43-year-old insurance executive has had another meltdown.

Wu’s pay has been slashed by 20% in a nationwide push to lower salaries at state-owned finance companies. He frets about layoffs and wonders how he’ll find 600,000 yuan ($84,500) to keep his two children in international school — a hallmark of upper-middle-class life in China. His six-year-old is behind in math.

“What’s the point of driving our kids nuts studying so hard?” Wu said. “The top-tier graduates can’t find a job, those who come back from overseas can’t find a job.” Pay increases, he says, are no longer tied to effort. “My work is meaningless.”

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China created a new class of highly paid white-collar worker. Now their dreams are being crushed. https://t.co/FtWSrjgm8J #TheBigTake

— Kristine Servando (@tinssoldier) September 19, 2024

Ricki Mudd was born in 1993 in China during the one-child policy era. She remembers her early childhood only in fragments, but has been told she had spent some of it hidden in a bag.

At age 5, she was adopted from a Chinese orphanage, one of the more than 150,000 children China sent overseas. Most were girls. In the West, they were one of the most visible consequences of the one-child policy, which ended in 2016. This month, Beijing put an end to foreign adoptions. 

China is grappling with a demographic crisis, with dropping birthrates and a rapidly aging population. The policies to control the population have given way to new ones in the opposite direction. But a legacy of the one-child policy is a dearth of women of childbearing age.

Because of a government decree that led to forced abortions and sterilizations, millions of girls were never born or were hidden from authorities. In the process, China’s gender ratio became increasingly skewed, with 117 boys born for every 100 girls in 2004, compared with 106 in 1980, United Nations data showed. 

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The Missing Girls: How China’s One-Child Policy Tore Families Apart—A now-ended adoption program created the perception Chinese girls weren’t valued. One adoptee, once hidden in a grocery bag, found more to her own story.@QiLiyan https://t.co/hA715EWpXPhttps://t.co/hA715EWpXP

— Jonathan Cheng (@JChengWSJ) September 18, 2024

Seal Team 6, the clandestine US Navy commando unit that killed Osama bin Laden in 2011, has been training for missions to help Taiwan if it is invaded by China, according to people familiar with the preparations.

The elite Navy special forces team, which is tasked with some of the military’s most sensitive and difficult missions, has been planning and training for a Taiwan conflict for more than a year at Dam Neck, its headquarters at Virginia Beach about 250km south-east of Washington.

The secret training underlines the increased US focus on deterring China from attacking Taiwan, while stepping up preparations for such an event.

The preparations have only grown since Phil Davidson, the US Indo-Pacific commander at the time, warned in 2021 that China could attack Taiwan within six years.

Read it all.

This is an amazing scoop by @FT and @Dimi. It is sure to get under Beijing's skin.

US Navy Seal unit that killed bin Laden trains for Chinese invasion of Taiwan https://t.co/6ngSZFvKrA via @ft

— Dennis Wilder偉德寧 (@dennisw5) September 12, 2024

China’s economic miracle is ending, leaving President Xi Jinping with a challenge none of his predecessors faced: how to govern after the boom.

For four decades, China’s 1.4 billion population experienced unparalleled gains in income and wealth. But recently the blows have just kept coming. Real estate collapse, trade war with the US, a crackdown on entrepreneurs, and extended Covid lockdowns have stalled the prosperity engine.

Chinese incomes are still rising, but under Xi gains have been the slowest since the late 1980s. The property crisis is hammering household wealth. And the cautious opening-up of China’s society has gone into reverse too. For many people across the country, it feels like a different world.

Take for example Mr. Hu, a factory worker in Shanghai. For almost a decade after moving from his hometown, Hu was upwardly mobile. He earned enough to buy a car, drove passengers at the weekend to top up the family income, and in 2020 bought a big-city apartment. Hu felt good about the future. Now he feels “desperate.”

Unlike his reform-era predecessors, Xi Jinping can’t count on rapid gains in prosperity to underpin support for Communist Party rule in China https://t.co/xAj5ruyMbw

— Bloomberg Economics (@economics) May 22, 2024

The new tariffs President Biden announced last week aren’t economically significant. Symbolically, they are huge.

The U.S. buys almost no electric vehicles, steel or semiconductors—all targets of the tariffs—from China. But, by adding to, rather than rescinding, tariffs imposed in 2018 by former President Donald Trump, it signals that the decoupling of the Chinese and U.S. economies is becoming irreversible.

More important, the tariffs are the final piece of an economic strategy for competing with China.

This strategy is a three-legged stool. The first consists of subsidies to build a viable technology manufacturing sector, from clean energy to semiconductors. The second is tariffs on Chinese imports that threaten those efforts. The third is restrictions on access to money, technology and know-how that could help China compete. A fourth leg, a unified economic front with allies, remains unrealized.

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Biden's new tariffs round out a three-legged strategy for competing with China. Leg 1: subsidies to build a viable technology manufacturing sector, from clean energy to semiconductors. 2: tariffs on Chinese imports that threaten those efforts. 3: restrictions on access to money,…

— Greg Ip (@greg_ip) May 20, 2024

Chinese President Xi Jinping and Russian leader Vladimir Putin pledged to intensify cooperation against US “containment” of their countries, as they warned of growing nuclear tensions between rival powers.

Putin and Xi accused the US of planning to station missile systems around the world that “pose a direct threat to the security of Russia and China,” in a joint declaration after more than two hours of talks in Beijing on Thursday. They agreed to tighten coordination, including between their militaries, against what they called Washington’s “destructive and hostile course.”

Putin’s in China on the first foreign visit since his inauguration last week for a fifth presidential term, indicating the importance of the relationship with Xi in enabling Moscow to resist unprecedented sanctions from the US and its allies over Russia’s invasion of Ukraine.

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Chinese leader Xi Jinping signaled to Vladimir Putin that ties between the two nations remain strong, as the Russian leader embarks on a new term with the war in Ukraine dragging into its third year https://t.co/xvrekfJjxl pic.twitter.com/xAGy7MdqkI

— Bloomberg TV (@BloombergTV) May 16, 2024

Mark Kelly of Recorded Future, a cyber-security firm, says his company is aware of about 50 hacking groups in China, including private firms working for the mss or People’s Liberation Army. There are undoubtedly many more. Mr Kelly describes China’s cyber-espionage efforts as “orders of magnitude” greater in scale than those mounted by Russia or North Korea.

As the indictment shows, they are surprisingly devolved. Some of them specialise in spying on different parts of the world, says Nigel Inkster, a former deputy head of Britain’s spy agency, mi6. They have considerable leeway to do as they wish, he says: “I’m not even sure that there is any kind of formal political clearance mechanism.” Much of their work is subcontracted to private firms. Last month a huge online dump of documents from one such company, i-Soon, showed its involvement in large-scale cyber-snooping on behalf of a variety of government agencies.

The West’s anxieties, not least about the hackers’ theft of corporate data, are becoming increasingly manifest. In January the head of the fbi, Christopher Wray, said that China’s state-sponsored hackers outnumbered his agency’s cyber-personnel by “at least 50 to one”. He added that China’s hackers are laying the groundwork for a possible Chinese strike, “positioning on American infrastructure in preparation to wreak havoc and cause real-world harm to American citizens and communities.”

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The West’s anxieties about Chinese cyber-espionage are becoming increasingly manifest. But if it hopes that naming, shaming and sanctions will dissuade the spooks, it is likely to be disappointed https://t.co/MnQGij3lds

— The Economist (@TheEconomist) March 27, 2024

“The challenge we are having is a lack of interest by federal prosecutors to charge illicit marijuana cases,” said Ray Donovan, the former chief of operations of the Drug Enforcement Administration. “They don’t realize all the implications. Marijuana causes so much crime at the local level, gun violence in particular. The same groups selling thousands of pounds of marijuana are also laundering millions of dollars of fentanyl money. It’s not just one-dimensional.”

The expansion into the cannabis market is propelling the rise of Chinese organized crime as a global powerhouse, current and former national security officials say. During the past decade, Chinese mafias became the dominant money launderers for Latin American cartels dealing narcotics including fentanyl, which has killed hundreds of thousands of Americans. The huge revenue stream from marijuana fuels that laundering apparatus, which is “the most extensive network of underground banking in the world,” said a former senior DEA official, Donald Im.

“The profits from the marijuana trade allow the Chinese organized criminal networks to expand their underground global banking system for cartels and other criminal organizations,” said Im, who was an architect of the DEA’s fight against Chinese organized crime.

U.S. law enforcement struggles to respond to this multifaceted threat. State and federal agencies suffer from a lack of personnel who know Chinese language and culture well enough to investigate complex cases, infiltrate networks or translate intercepts, current and former officials say. A federal shift of priorities to counterterrorism after 2001 meant resources dedicated to Chinese organized crime dwindled — while the power of the underworld grew.

And the shadow of the Chinese state hovers over it all….

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Officials estimate the value of the illegal marijuana market grown in Oklahoma at somewhere between $18 billion and $44 billion a year.

Investigators have found links to foreign mafias and say that more than 80% of the groups are of Chinese origin. https://t.co/A4WKYfaCet

— ProPublica (@propublica) March 16, 2024