Trial Day 31: November 3, 2026

At 9:30 a.m. on Tuesday, November 3, U.S. mid-term Election Day, I arrive at the federal courthouse in downtown Brooklyn. Upon entering courtroom 6D South I am greeted by Jackson, a lawyer I have met before who is, as usual, sitting in the back row.

“It’s going to be a short day,” he says, adding that the defence may rest the week of November 9, with perhaps a day of government rebuttal to follow. He thinks the trial could be wrapping up around Monday, November 16. That is Jackson’s prediction, not the court’s schedule.

Above the bench, the seal of the U.S. District Court for the Eastern District of New York depicts an eagle with an olive branch in one talon and a clutch of arrows in the other. Peace and force, rendered in silver: a fitting emblem for a courtroom where competing accounts of corporate conduct are being tested, one exhibit at a time.

Shortly before 10 a.m., we all stand for Judge Ann M. Donnelly’s arrival.

Two Chinese women in dark suits speaking Mandarin sitting in front of me in the gallery are not, it turns out, the lawyers I thought they might be, but a duo of court interpreters who accompany the morning’s witness to the stand. He is retired Huawei employee Han Shitao [spelling unconfirmed], a short, bespectacled Chinese man wearing a dark gray sports jacket, white shirt and dark trousers. No tie.

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A mailbox open to 150,000 employees

At 10:01 a.m. the jury enters and Assistant U.S. Attorney Matthew Skurnik resumes the government’s cross-examination. Skurnik takes Han back to the summer of 2013 and a Huawei Device memorandum, Government Exhibit 16336, promoting a campaign to incentivise Huawei employees in the collection of competitive intelligence [see Huawei on Trial #3].

Han explains that Huawei had established a regional sales organization when its international business was still relatively small. The company also operated a “device competition community” on its intranet, with a special mailbox for submissions about competitors.

Questioning Han, Skurnik establishes for the jury that the community had no access restrictions. Huawei had roughly 150,000 employees in 2013, Han says, and, in principle, any of them could view the material or send information to the mailbox. Han was not an administrator. He does not know who created the mailbox, though he believes it predated the 2013 campaign.

The original memorandum offered rewards for competitive intelligence, ranked in four tiers. The awards ranged from 200 to 2,000 yuan, with higher-value submissions eligible for greater rewards. Han says the money would come from departmental office expenses. He oversaw a sales team of about 10 people and regarded the scheme as a modest, spur-of-the-moment way to encourage work his salespeople should already have been doing: visiting retail stores and learning about rivals’ products.

Han says he cleared the expense with his supervisor, Liu Jianfeng [spelling unconfirmed], who raised no objection. Neither man, Han insists, intended to encourage unlawful conduct. Even now, he says, he believes encouraging sales staff to gather legitimate commercial intelligence is a good idea.

The words that caused the trouble

The prosecutor’s questions narrow to the language of the July 10 memorandum, drafted by Huawei executive Kevin Gu. Some rewards appeared to depend on the value and confidentiality of the information supplied. Han acknowledges that he skimmed the document rather than reviewing it word for word.

“Had I drafted it myself, I would not have chosen that language,” Han says through one of the court interpreters, calling himself “careless” as the wording was easily misunderstood.

Supervisor Liu also received the memorandum and did not request changes, Han confirms. It circulated to Huawei personnel internationally. Complaints followed almost immediately, including warnings about legal risk. A July 12 email, introduced as a defence exhibit, bluntly criticized the problems the memo’s wording had created.

Han says he was astonished: he had thought he was simply asking colleagues to do their jobs.

Huawei withdrew the memorandum and instructed recipients to disregard and delete it. Han acknowledges the possibility of disciplinary consequences but distinguishes the warnings from what actually happened. He says no one was fired or demoted, no pay was docked and no formal disciplinary penalty was imposed on him. He was, however, sharply criticized. Gu, who wrote the memo, was not fired.

The government produces an email in which Liu writes that he bears “management liability” for the matter. Han disputes the implication of the English translation. In Chinese, the expression conveyed an apology rather than an admission of sole responsibility, Han says.

All three men—Han, Gu and Liu—shared responsibility, Han says, and Liu was trying to protect him.

“Mr. Han, are you familiar with the term ‘fall guy’?” Skurnik asks.

Han says he knows its meaning but rejects it as irrelevant in this situation: the campaign had not been intended to do anything wrong.

Withdrawn, rewritten—and sent again

What happened after the original memo encouraging competitive intelligence gathering was withdrawn soon becomes the central question. Government Exhibit 13689-T concerns a July 15, 2013 email in which Han withdraws the original memorandum and acknowledges the legal risks it posed.

By July 18, he and Gu were working with Huawei’s legal department on another draft. One version, described in court as “version 3.0,” retained much of the original scheme.

The new text explicitly instructed staff to comply with local law and Huawei’s Business Conduct Guidelines, or BCG, and forbade illegal methods of obtaining information. It also warned that employees who violated those rules would be acting for themselves, not the company. But the draft still described four rankings, monthly rewards, annual regional reviews and the special competitive-intelligence mailbox. Higher-ranked information was still to be encrypted when submitted.

Skurnik presses the point: legal compliance language had been added, but the underlying solicitation of competitive intelligence survived. Han agrees that legal staff did not halt the initiative. His understanding was that gathering information from ordinary, lawful sources was consistent with the BCG. He says the particular 3.0 draft shown in court was never used.

What’s more, Skurnik notes, the name of senior executive Richard Yu, who now sits on Huawei’s board, appeared on the memo’s distribution template. Han says that does not mean Yu knew about the campaign. He does not know whether Liu discussed it with Yu and believes Yu was never briefed.

The prosecutor then turns to an August 7 email from Gu and the final revised memorandum, Defence Exhibit 4396.2-TR. It went to Chinese frontline staff about a month after the original had been circulated and withdrawn. The revised text kept the same memorandum number, 2013-42, and still encouraged employees to submit competitive intelligence information. A separate incentive chart was contemplated, but Han says he abandoned it.

“The personal criticism I received was enough. I did not want to continue the rewards programme. I just wanted it to be over,” Han says.

To his knowledge, the incentive chart was never relaunched.

The defence: a culture of compliance

At 11:06 a.m., Judge Donnelly calls a twenty-minute break. When proceedings resume, Skurnik finishes his cross-examination and soon Huawei defence attorney Julia Gatto of the law firm Steptoe takes up the redirect. Her questions return repeatedly to the company’s Business Conduct Guidelines. Were they taken seriously?

Han says employees treated the BCG as a kind of “Constitution”—or “Bible.”

Gatto emphasizes that staff themselves raised concerns about the original wording, that management ordered the memo withdrawn and that the replacement added explicit safeguards. Han says the campaign was meant for his department, and that he had initially seen no need to spell out the BCG. Once complaints arrived, he saw the need to include new language. No one, he says, had applied for an award before the original programme was stopped.

The defence also revisits reprimanding emails, including Government Exhibit 16385. Han regards the criticism from superiors as punishment, even if it was not formal discipline. Several of Gatto’s questions draw objections from the government, and Judge Donnelly cautions her against leading the witness. The exchanges underscore the competing interpretations: prosecutors portray a broad incentive scheme that survived legal warnings; Huawei portrays an ill-worded local initiative caught and corrected by its own compliance system.

The Bible, the Constitution and a final question

On recross, Skurnik returns to Han’s description of the BCG as Huawei’s “Bible” or “Constitution.” If it is that important, he asks, does it apply from the lowest-ranking employee to the most senior executive?

“Correct,” Han says.

The prosecutor directs him to Defence Exhibit 503-BCG, section 4.2, which instructs employees conducting external business not to make misrepresentations and to correct mistakes promptly.

“It instructs employees not to lie, right?” Skurnik asks.

“Correct,” Han says.

Han leaves the stand at 12:04 p.m., accompanied by the interpreters.

White noise fills the courtroom during a sidebar. Judge Donnelly then tells jurors that five government exhibits associated with the testimony of FBI forensic accountant Jennifer Moon [See Huawei on Trial #4] are being demoted from evidence to “demonstratives.” They are GX-20503, 20504, 20505, 20559 and 20564.

Judge Donnelly declines to predict exactly what will happen next.

“The case is moving much faster than expected,” she says, noting some jurors’ facial expressions of disappointment. “I hope you’re not mad!”

“Stay healthy, enjoy the weekend,” Judge Donnelly tells the jury, dismissing them at 12:09 p.m.

The lawyers remain.

Lead prosecutor Alexander Solomon says the government is going to object to Chinese bank records Huawei has just received from China that they claim are relevant to the testimony of FBI agent Moon.

Solomon says the government is asking for complete records rather than the narrow selection Huawei defence lawyer David Bitkower of Jenner & Block wants to introduce. Judge Donnelly questions their relevance and materiality and reminds counsel that she will instruct the jury that “an indictment is not proof of a crime.”

Judge Donnelly also briefly says she will not admit discussion of the circumstances around the admission of Huawei CFO Meng Wanzhou’s 2021 Deferred Prosecution Agreement (DPA).

As the lawyers prepare to leave for the weekend, Solomon teases Huawei lawyer Douglas Axel of Sidley Austin.

“Are you done, Doug?” Solomon asks. “You look like you have the smile of a man who’s done.”

“We’ll see,” Axel says with a shrug and a smile.

“He’s not giving away anything,” a Solomon colleague says.

For now, the answer remains the same as it was at the start of the morning: the end may be near, but nobody is ready to say exactly when.

AUTHOR’S NOTE

The court bars recording devices and does not make transcripts available immediately. Quotes are based on my notes.

RESOURCES

“The world’s largest telecoms firm is on trial and the outcome has global implications,” NPR’s “All Things Considered,” Rob Schmitz interviews Michael Kovrig on the Huawei case, November 8, 2026

“Catch Us If You Can,” Noah Berman, The Wire China, November 1, 2026

“The story behind the Huawei story—it’s not a politically-orchestrated car accident in slow motion,” Strand Consult, December 14, 2018

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This is the fifth in our series of blog entries with in-person coverage from the ongoing trial of Huawei Technologies (华为技术). Entry #1. Entry #2. Entry #3. Entry #4. Entry #5.

Trial Day 27: October 27, 2026

In an effort to evade U.S. trade sanctions, Huawei hid its business selling surveillance equipment to Iran while the Islamic Republic’s regime tried to suppress public unrest in 2009, a former Customs and Border Protection agent testified in Brooklyn on Tuesday, October 27.

Special Agent Louie Dean Fittz is cool under questioning by Department of Justice trial attorney Jasmin Fashami. Fashami is working in this Eastern District of New York (EDNY) courtroom alongside the Assistant U.S. Attorney Alexander Solomon on the federal prosecution of the Chinese multinational conglomerate on 12 counts of racketeering, trade-secret theft, bank fraud, money laundering and U.S. trade sanctions violations.

As week eight of the trial gets underway, Fittz describes his participation in an investigation into Huawei that started in 2016 over the misappropriation of source code from Cisco, the U.S. networking and telecommunications technology giant. In 2017, a grand jury was convened in the District of Columbia and later transferred to the EDNY.

The grand jury subpoenaed documents from Huawei Technologies USA in Plano, Texas, regarding work in what internal records called “Category A Countries,” those against which the United States maintains trade sanctions of varying degrees. One Huawei document spells out internal communications codes used: A1 for Afghanistan, A2 for Iran, A4 for Myanmar, A5 for Sudan, A6 for Cuba, A7 for Syria, A9 for North Korea, and A10 for Libya.

“Was the focus of the grand jury investigation Huawei’s work in sanctioned countries, and in particular Iran?” asks Fashami, petite with long brown hair in ringlets down the back of her black suit.

“Yes,” says Fittz. The gray-haired former Marine wears a dark blue suit with a silver lapel pin. He worked for 30 years with U.S. Customs and Homeland Security and as a criminal investigator and special agent in and around Dallas, Texas.

The grand jury subpoena, served on April 12, 2017, by two Department of Commerce agents to a Huawei in-house counsel, sought the names and titles of Huawei employees who provided goods and services to Iranian customers such as MTN Irancell and MobinNet, Fittz tells the courtroom.

One such Huawei employee was Zhang Yang, also known as Raymond Yang, who worked for Huawei in Tehran and later in Plano.

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Confiscated Devices

Fittz says he interviewed the man surnamed Zhang on February 12, 2017 in a small interrogation room at the Dallas-Fort Worth airport as he tried to enter the United States. They spoke in English without an interpreter. Fittz determined that Zhang worked for Huawei in Iran and confiscated his laptop and cellphone, both of which were copied and returned to him at Huawei’s Plano office.

Many of the documents copied from Zhang’s devices are entered into evidence by Fashami. They include internal emails, business correspondence, project reports, technical specifications, network diagrams, training materials and company policies detailing Huawei’s telecommunications operations in Iran.

The evidence covers Huawei’s relationships with MTN Irancell and MobinNet, including WiMAX broadband projects, network infrastructure, equipment deliveries and technical support.

Of particular interest are sensitive documents around the summer and fall of 2009, when hundreds of thousands of Iranians poured into the streets of Tehran and other cities to protest the disputed reelection of hardline President Mahmoud Ahmadinejad.

Known as the Green Movement, the protestors were supporters of reformist candidate Mir Hossein Mousavi, who accused the government of rigging the June 12 election. Security forces cracked down, killing protestors, arresting thousands and restricting Internet and mobile communications. The unrest continued into December, as demands for electoral accountability broadened.

It was against this backdrop that Huawei’s internal correspondence, copied from Zhang’s devices, discussed telecommunications interception capabilities for Iranian customers, raising questions about whether technology supplied by Huawei could facilitate Iranian government surveillance of civilians during a period of widespread political repression.

One of Zhang’s emails is from human resources, noting that because of the turmoil in Iran, employees of Huawei may experience “inconvenience” and should exercise caution for their safety. It notes that 2009 is “an important year” for Huawei to achieve its international business objectives.

Another email notes that Huawei employees may leave work early, should not participate in the protests or get caught up as bystanders, and should avoid places such as Freedom Square and other protest locations in Tehran.

Another email recovered from Zhang is from a Huawei employee named Cong Zhangyang to a “Mr. Ali” asking him about schematic drawings for a proposed “setad” site for MobinNet.

Surveillance Solutions

Through questioning Fittz it comes out that “setad” is a powerful economic conglomerate established by edict of Iran’s supreme leader to seize local businesses and properties whose assets are then funneled into a “leader’s fund.”

A Zhang email from November 23, 2009 is a weekly report on MobinNet’s WiMAX; while another, from the next day, has an attachment—a database spreadsheet for WiMAX broadband base station sites. Government exhibit 8335-T, from December 12, 2009, describes “voice interception solutions” being provided to MobinNet.

Another Huawei email describes “Lawful Interception Solutions,” being provided through a “Lawful Interception Gateway” to the “Lawful Enforcement Monitor Facility.” This email has a 259-page attachment that is labeled “Huawei Technologies—Proprietary.”

“Please help provide lawful interception solution,” says government exhibit 83416-T.

In another email from Huawei to its employees, Zaeim Electronic Industries Co. is identified as a local Huawei partner and Fashami asks Fittz to read portions of the email aloud to the courtroom.

“The government has designated Zaeim as its representative. So Zaeim’s requests are government requests. The key is to communicate clearly with Zaeim,” the email says. [A 2011 Wall Street Journal report that touches on this partnership was entered into the Congressional Record].

Zaeim, MTN Irancell and MobinNet are all listed on the grand jury subpoena, the government establishes through questioning Fittz.

Another email shows a flow chart illustrating the flow of mobile communications, how they are intercepted and routed to the government, and another confirms that these interceptions can ascertain the name, phone number, email and home address of a mobile phone user.

In a January 6, 2013 Huawei email, the company is communicating with MTN Iracell and describes 735 “integrated collection sites.”

At 11:25 a.m. Fashami indicates that the government is about to shift to a new topic and suggests that the court consider a break. Judge Donnelly agrees and calls a 15 minute recess.

At 11:44 a.m. Judge Donnelly returns and apologizes that the courtroom is cold. She is reluctant to turn off the air conditioning because “the sauna that results is worse.” One young male juror who earlier wore just a white t-shirt has donned a gray jumper.

Returning to question Fittz about the documents he pulled from Zhang’s devices, Fashami introduces an email from May 15, 2009, before the Green Movement protests erupted, that makes clear that a Huawei partner, the Chinese state-linked CMEC International Trading Co., was to be listed as the bidder to supply MobinNet with surveillance equipment, not Huawei. [A 2012 Reuters special report details this relationship].

All Huawei logos should be removed from correspondence, the email says. “When dealing with this, please think of yourself as a CMEC person,” the Huawei email instructs company employees.

The government then introduces a global sales contract labeled “Huawei—Confidential—Unauthorized Dissemination Prohibited.”

It makes clear to Huawei employee recipients that they are prohibited from using the Huawei name when signing contracts from “Category ‘A’” countries: “The reseller must sign these contracts,” the email says, warning that failure to follow protocol could result in a “U.S. blackout for Huawei” and the drying up of the supply chain for U.S.-made component parts.

Further emails from that period sent to Huawei employees include packing lists that note that since Iran is an embargoed country the goods are not to be shipped in the name of Huawei. “Hand it over to CMEC,” one email says.

As the morning drags on in court, through one email and invoice and spreadsheet after another, Special Agent Fittz always addresses Judge Donnelly and Ms. Fashami with a Texan “Yes, Ma’am,” or “No, Ma’am.”

The government fast-forwards to April 2018, to a redacted email from Huawei Device USA in-house counsel Charles de Chateauvieux, who informs employees in the Plano office that Huawei is now under investigation by the FBI and two other U.S. government agencies for Iran sanctions violations.

Evidence suggests that Zhang Yang (a.k.a. Raymond Yang) tried to leave the U.S. for Hong Kong on April 27, 2018, but never made it onto the plane because FBI agents arrested him at Dallas-Fort Worth International Airport.

Fittz, under Fashami’s questioning, walks jurors through a series of travel records, visa applications and a secretly recorded Mandarin-language telephone call between two Huawei Device USA employees: Ms. Dong Bo, in human resources, and Mr. Guo Li, an in-house lawyer.

In the transcript, which Fashami and Fittz take turns reading aloud in the two voices on the call, Guo tells Dong of an “urgent problem” involving a “carrier” who was supposed to leave the United States but had been arrested by the FBI at the airport.

Dong calls it an “escalation.”

“I’m afraid we will have to deal with a raid,” Guo replies, according to the government’s translation of their call. The two discuss transferring employees who worked in sensitive countries, including a man called Gary Zhao. Should he delete his computer’s contents? They worry about the security of their telephone conversation and suggest meeting in person.

The government’s exhibits establish that several Huawei employees working in Plano had previously worked in “Category ‘A’” countries sanctioned by the U.S. Gao Yunzhen had worked in Tehran. Yu Jianbo had served in Huawei’s offices in Tripoli and Khartoum. Zhao Xuhui (a.k.a. Gary Zhao) had worked in Sudan and Syria. Internal records show that Gao, Yu, and Zhang Yang were assigned to Plano for contracts that started in 2017 and were meant to run through 2021.

But their departures came much sooner.

Airline records show that Gao flew from Dallas to Hong Kong on February 28, 2018. Yu left Dallas for Beijing in March. Zhao departed the U.S. on April 28, flying from Dallas through San Francisco to Wuhan, and onward to Huawei’s headquarters city of Shenzhen on May 1.

Zhang, meanwhile, was arrested before he could leave.

The government appears intent on establishing a pattern for the jurors: Huawei employees with experience in sanctioned countries leaving the United States as federal investigators closed in, while company officials talked about the risks of an FBI raid, the transfer of personnel and the security of their communications.

By lunchtime, Judge Donnelly wants to know how much longer the government will need. Five to 10 minutes, Fashami says.

And the defence?

Huawei attorney Bitkower estimates that they can finish today.

“Today lasts ‘til midnight,” Judge Donnelly says.

“Two, two and a half hours,” Bitkower assures her.

The day after I wrote this post, Huawei executive Yang Chaobin was the first defence witness to take the stand. He said he had “never heard” of a corporate strategy to steal intellectual property (see Huawei on Trial #3).

According to reporter Noah Berman who wrote a thorough summary of the government’s case in The Wire China, Yang added: “No matter how robust the compliance policies are, there is no way to prevent every violation.”

Week nine of the U.S. vs. Huawei Technologies continues with the case presented by the defence, which is expected to last three weeks.

Meanwhile, in Beijing, the Fifth Plenum has weighed in, stating clearly that the Chinese Communist Party should have more influence in private tech firms:

“Strengthen Party-building efforts in platform companies, technology-innovation enterprises, and other such firms; establish a mechanism for dynamically adjusting the elevation of Party organizations within internet companies to higher administrative levels of management; and ensure that responsibilities for Party-building are fulfilled.”

AUTHOR’S NOTE

The court bars recording devices and does not make transcripts available immediately. Quotes are based on my notes.

RESOURCES

“Catch Us If You Can,” Noah Berman, The Wire China, November 1, 2026

“The story behind the Huawei story—it’s not a politically-orchestrated car accident in slow motion,” Strand Consult, December 14, 2018

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This is the fifth in our series of blog entries with in-person coverage from the ongoing trial of Huawei Technologies (华为技术). Entry #1. Entry #2. Entry #3. Entry #4.

The Wire China’s cover story this week is an essay I wrote based on my foreword for Safeguard Defenders’ new book, The People’s Republic of the Disappeared. This third edition collects new first-person accounts of both PRC and foreign citizens abducted by the Party-state’s security apparatus under a sinister procedure it calls zhiding jusuo jianshi juzhu 指定居所监视居住 or zhiju 指居 for short. The official English translation is “Residential Surveillance at a Designated Location” (RSDL), a bland bureaucratic mouthful that deliberately masks pre-arrest detention in a secret facility where your tormentors subject you to appalling abuse and your only right is to obey. Please buy the book to read the full account—the money goes toward helping victims and stopping human rights violations. Preview below.

China’s secret police have detained you.

The ordeal begins with a surprise raid by security officers. They accuse you of crimes, restrain you and shove you into a vehicle. You are hooded or blindfolded, handcuffed, abducted to a secret location, locked in a padded cell, and threatened with severe punishment for “harming China”. Meanwhile, your home and office are searched.

If you are a critic of the regime who has lived with the perennial anxiety that it might one day move against you, this can be a moment of strange relief: your worst-case scenario has unfolded. If you thought you understood the rules and could count on official connections or the reasonableness of the authorities, you experience the shock of illusions dispelled and trust betrayed.

You struggle to adjust to solitary confinement and sensory deprivation. The room has only a hard bunk; you have only a few articles of clothing and basic toiletries. There are no mirrors — not even the reassurance of seeing your own face. Most maddeningly, you cannot go out. Your universe is now measured in a few square feet.

The plainclothes Public Security or State Security officers holding you won’t inform anyone of your location or conditions. The law entitles you to retain and consult a lawyer. But in state security cases, it also empowers your jailers to deny access to counsel, which they are sure to do, at least until they have finished questioning you and building their case, which could take a year.

Disconnected from loved ones and friends, from the world, from your own identity, you experience a chill of isolation and a longing for connection. From now on, your only human relationships are with your captors. Human rights lawyer Sui Muqing speaks for many when he recalls that “the pain of missing my family was the worst suffering.”

What cinematic depictions of torture achieve through shock and spectacle, RSDL accomplishes through comprehensiveness and duration. By law it can last up to six months, usually followed by years of detention and prison. The scars it inflicts last much longer.

In writing this book’s foreword I wanted to reflect the suffering and survival of others, rather than relating my own experience as a political hostage from 2018–2021. I analyzed its ten essays and several more from the two previous editions, as well as stories of prisoners from the PRC’s early decades to the present, from Dries van Coillie, Anthony Grey and Bao Ruo-wang, to Wei Jingsheng, to Peter Humphrey. I read the account by Japanese detainee Suzuki Hideji of his six years of arbitrary detention and prison, and the recent memoir of Cheng Lei, the Australian broadcast journalist whose stint as a CGTN news anchor was abruptly terminated by Ministry of State Security officers in 2020. They detained her in retaliation against Australian policies that had enraged their Communist Party masters. Together, these accounts reveal an enduring core curriculum of fear, coercive interrogation, thought remolding and forced submission to the power of the Party-state.

For the rest of the article, non-subscribers can visit The Wire China. Better yet, buy The People’s Republic of the Disappeared (3rd ed.) and learn more about human rights in China from Safeguard Defenders.

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This is the fourth in our series of blog entries with in-person coverage from the ongoing trial of Huawei Technologies (华为技术). Entry #1. Entry #2. Entry #3. Entry #5.

Trial Day 24: October 20, 2026

As I bicycle across downtown Brooklyn this sunny Tuesday morning to attend week seven of Huawei’s federal criminal trial, one question is on my mind: “What was the motion hearing on Monday?”

It’s a treat to attend the trial of the Chinese multinational technology conglomerate on 12 counts of racketeering, trade-secret theft, bank fraud, money laundering and U.S. trade sanctions violations. But I cannot afford to attend daily. Which means I miss stuff. And since the court doesn’t make transcripts readily available, I have to fill in the blanks.

I ask Diego, the first-name-only attorney sitting next to me in the public gallery of courtroom 6DS at the U.S. Courthouse, 225 Cadman Plaza. Diego, whose client has “an interest in the outcome of the trial,” wasn’t here Monday either.

As we talk, the government’s lead prosecutor, Assistant U.S. Attorney Alexander Solomon, walks past in a gray suit and yellow patterned tie.

Diego calls him “a nice guy.”

“Do you know him?” I ask.

“I’ve said a few things to him,” Diego replies.

Another mystery. Today I may be the only writer in the back of the courtroom. Everyone else seems to be wearing the attorney’s uniform of a dark suit, a legal pad and at least two cellphones—devices the media cannot bring into court.

Why the Court Was Closed

A couple of weeks ago, this courtroom was closed for a few days in a rare move in the U.S. justice system. Turns out that three Iranian witnesses knew enough about Huawei’s business in Iran to put themselves and their families in Iran at risk by testifying in Brooklyn, according to a heavily redacted judicial opinion made public October 21.

Prosecutors said their testimony would expose Tehran’s suppression of dissent and could invite retaliation.

Changing their names would not suffice. Their knowledge of Huawei and its Iranian subsidiary, Skycom, was so specific that the substance of their testimony could identify them.

Judge Donnelly accepted that danger as grounds for closing her courtroom during their testimony, explaining her September 18 ruling.

Prosecutors also warned that Beijing might retaliate against the witnesses for helping American authorities. Judge Donnelly recorded that warning without making a separate finding about Chinese retaliation.

This day, court once again wide open to all, Judge Ann M. Donnelly walks in at 10:12 a.m. and invites everyone to sit. She asks “the parties”—the government and Huawei—to raise any issues before the jury enters. I count seven lawyers on each side.

Solomon says the government will call a financial analyst and seeks to introduce two documents.

The first is an internal Huawei PowerPoint presentation about U.S. sanctions against Iran and ways to move dollars out of the country. It describes how Skycom, Huawei’s Iranian affiliate, accepts the local currency, rials, from its customer Irancell, then uses intermediaries in Dubai to remit dollars to Huawei in China.

The second is a memorandum of understanding involving Arya Hamrah Samanah (AHS), an Iranian intermediary; Skycom; CMEC International Trading Co., Ltd., a Chinese trading company; and Panda International Information Technology Co., Ltd., controlled by the state-owned China Electronics Corporation.

Under the arrangement described by prosecutors, Arya Hamrah pays Skycom in rials while corresponding dollar payments travel through Dubai to CMEC and Panda in China.

A 2013 Arya Hamrah email instructs a transfer of $156,471 to Panda because the equivalent has been paid to Skycom in rials.

Huawei defence attorney David Bitkower of Jenner & Block objects, calling the evidence hearsay. He argues that the intermediary’s identity is unestablished and that payments prosecutors seek to connect to the document date from 2009-10—a time, it should be noted, before Washington tightened sanctions against Iran.

Solomon does not dispute the dates on the evidence he intends to submit establishing payments through two Dubai intermediaries—dates that fall before U.S. sanctions. He says the government will show that those earlier payments match later payments in amount and contract number.

The defence counters that these are inferences and the MOU says nothing about sanctions evasion.

Judge Donnelly suggests the objection concerns potentially prejudicial evidence rather than hearsay. At 10:34 a.m., she overrules it.

Solomon warns that he has many exhibits to introduce. The defence says it will not submit certain redacted documents today.

“So, in other words, we will drive off that bridge when we come to it,” Donnelly says. Laughter in the courtroom.

At 10:37 a.m., the jury enters.

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The FBI Forensic Accountant

The first witness is Boram “Jennifer” Moon, an FBI forensic accountant.

Dressed in a black suit, white blouse and short heels, her black hair pulled back to reveal pearl earrings, Moon says she has worked for the bureau for nine and a half years, investigating financial matters. Previously, she spent nine years in the private sector.

Solomon asks whether Moon can analyze records from correspondent banks, which enable international banks to clear dollar payments through the United States. She can.

This is important. Doing business in Iran is not, by itself, necessarily illegal for a Chinese company. But when payments pass through American banks—in this case, in New York—they become subject to U.S. sanctions restrictions.

Solomon asks Moon to define “tracing.”

Essentially, following the money.

She has prepared charts for her testimony, she says—a point that becomes abundantly clear as Solomon introduces chart after chart over the next several hours.

Moon explains the “last in, first out” tracing principle using a kitchen analogy: the last pancake placed on a stack is the first removed. Applied to banking, the most recent deposit is treated as the first money withdrawn.

She groups accounts under the same name into a “big common pool of funds controlled by a single account holder.”

Think of adding food coloring to a bucket of clean water, she tells the jury. Even a few drops change the color of the whole bucket. Here, those drops could represent millions or billions of dollars in “dirty money.”

Moon acknowledges limitations. Companies maintain different accounts for different purposes, and incomplete banking records require assumptions. She knows of no personal Huawei accounts.

Solomon begins reading government exhibit numbers: 6304, 6311, 6325-1, 6612, 6613, 1361-12, 20101, 2003, 2004, 2009, 2012, 2014—and many more.

His recitation of exhibit numbers continues for nearly ten minutes. The jurors’ eyes seem to glaze over. Eventually we learn Solomon has 170 slides to show the jury.

When he finishes, Bitkower jokes:

“Your Honor, I think it’s time for a lunch break.”

Everyone laughs.

“There will be a test at the end of the day,” Judge Donnelly adds.

A late arrival is Matthew Zaklad, head of the research firm China Six. Sitting beside me in what he calls “the pews,” Matt, a friend, wears lemon-yellow corduroy trousers, black sneakers without socks, and a blue blazer with a red paper flower in its lapel.

From a small zippered pouch he produces colored pencils and pens, then sketches courtroom scenes with intense concentration, annotating drawings with snippets of testimony. Occasionally he cuts figures partly free from the page, turning his notebook into a pop-up book for lawyers.

Solomon returns to Moon and the sale of Skycom.

She describes a “circular transaction” using a hypothetical example of a family whose members sell shoes, flowers and cookies to one another for equal amounts. Their sales figures look impressive, but collectively they end up with the same money.

A December 31, 2008, exhibit shows Huawei CFO Meng Wanzhou on Skycom’s board in 2008-09. It also identifies Skycom business in Iran, Burma, Cuba, North Korea, Sudan and Syria—all countries subject to U.S. sanctions.

A reminder that it was Solomon who signed the September 2021 Deferred Prosecution Agreement (DPA) that ended the U.S. effort to extradite Meng from Canada, where she was afforded nearly three years of the Canadian justice system while under house arrest, at the same time Michael Kovrig and Michael Spavor, Canadians both wrongfully detained in retaliation, suffered months of solitary confinement and coercive interrogation followed by two years in pretrial detention centre cells.

Other exhibits Solomon introduces trace transactions among Skycom; Hua Ying Management, a Huawei affiliate in Hong Kong; Canicula Holdings, a Mauritius-registered company allegedly operated by Huawei as a front in Syria; and Huawei Technologies Investment, a wholly owned Huawei subsidiary performing financial functions for the group.

Moon says Huawei controlled Hua Ying and Canicula, and that Meng served as a director. One document identifies a Canicula bank account in Dubai; another records transfers between Hua Ying and Canicula.

A 2009 exhibit shows Huawei Technologies Investment transferring approximately €13.8 million through Canicula to Hua Ying.

December 2010 records show Skycom paying Canicula roughly €7 million, followed by a same-day onward payment.

Solomon asks whether a discrepancy of approximately $312,000 prevents transactions involving €14 million and €13.8 million from being considered circular.

“Insignificant,” Moon says.

Next come documents concerning Skycom’s shutdown in Iran between November 2016 and June 2017.

A May 1, 2017, purchase order from Huawei Technologies Services (Iran) covers digital hosting and marketing services through May 2018.

Solomon establishes that Skycom did not issue the purchase order. The apparent point? Huawei continued operating through another Iranian entity after winding down Skycom.

Moon then guides the jury through a flowchart involving Mobile Communications of Iran (MCI), Skycom, Huawei Technologies Investment, Futurewei—Huawei’s American research subsidiary in San Jose—and Paycom, a payroll company.

She identifies approximately $12 million moving from Skycom to Huawei Technologies Investment through a New York correspondent bank. On May 9, 2014, another $5 million moved from Huawei Technologies Investment to Futurewei through a U.S. bank.

Moon treats these accounts as pooled funds. Some payments bear the designation “A2,” which she identifies as Huawei’s internal code for its Iran office.

Banks appearing in the records include JPMorgan Chase, HSBC and Standard Chartered, whose executives testified earlier in the trial.

Other transfers include $10 million to Futurewei on August 18, 2013, and $2 million 11 days later, with funds passing through New York twice.

Moon also discusses the Clearing House Interbank Payments System (CHIPS) and a February 2017 payment of $3 million to Futurewei through Citibank.

Her analysis treats Skycom and Huawei group accounts as one large pool.

At 11:47 a.m., Donnelly calls a 15-minute recess, reminding the gallery:

“This is a chewing gum free zone. Those are the rules.”

During the break, Solomon and Bitkower exchange smiles and laughter. Solomon says Bitkower gets “one zinger a day,” referring to his lunch-break joke.

Diego remarks that there has been “a great deal of tracing and a great many Excel spreadsheets,” but says the trial is moving faster than prosecutors expected.

“They said they’d be done in about a week.”

I wonder whom he has been talking to.

Nearby, another attorney, Jackson, a sartorial outlier, wears white Reebok tennis shoes, a beige sweater, baggy trousers and short Adidas socks. Sporting wire-rimmed glasses and a five-o’clock shadow, he reads a paperback about the U.S. Open: “something light enough to pick up and put down” between stretches of testimony.

After recess, Donnelly asks Solomon how much longer he needs.

He has covered 22 of his 170 slides.

Donnelly tells Bitkower she cannot imagine they will finish today.

At 12:08 p.m., Solomon resumes.

An exhibit shows $44 million in payments from Skycom to Huawei Technologies, with none moving in the opposite direction.

Other charts summarize transactions through American correspondent banks. One puts Skycom’s 2009-10 dollar-clearing flows at approximately $170 million: $143 million outgoing and $30 million incoming.

Another identifies roughly $100 million across 61 transactions involving correspondent banks and CHIPS.

“A single transfer can pass through several banks,” Moon explains.

She identifies another $46 million cleared through HSBC and Standard Chartered in 2012-14.

Sanctions Evasion?

The government introduces a July 2013 Huawei PowerPoint presentation about U.S. sanctions against Iran, previously provided to HSBC and later obtained by FBI subpoena.

It discusses restrictions on oil exports, central-bank transactions, private banking and access to SWIFT, the international financial messaging network.

Customers listed include MCI and Irancell.

Moon identifies Bank Tejarat as one Iranian bank used by Skycom.

The presentation proposes ways around Iran’s currency restrictions, including letters of credit settled through Dubai under the “Irancell model.”

“There is currently no legal channel to exchange local currency,” one slide states.

Other proposals include selling Persian rugs into China and transferring as much as $20 million monthly to Chinese oil giant Sinopec.

Another slide warns that no fully reliable remittance route to China exists, describing letters of credit as the least risky option.

When Moon appears to interpret the document beyond her qualifications, Bitkower objects. After a sidebar, Donnelly sustains the objection.

Solomon returns to the MOU involving Panda, CMEC, Arya Hamrah and Skycom.

The document describes Iranian rial payments to Skycom, matched by dollars reaching Panda and CMEC in China through intermediaries.

An Arya Hamrah reconciliation statement and accompanying records identify Silsila General Trading LLC, a Dubai intermediary.

Moon connects the arrangement to Huawei’s earlier presentation about moving money through third countries. Her chart traces three USD payments from Silsila through a New York bank to CMEC in China.

Another intermediary identified is a UAE company called Lord Holding.

An Arya Hamrah email directs payment to Panda after an equivalent sum was paid to Skycom in rials.

Solomon asks whether this fits the pattern of local payments to Skycom followed by dollars passing through New York to China. Referring to invoice designation “A2,” Solomon calls it a “secret code.”

Bitkower objects. Donnelly sustains.

Other exhibits include packing lists bearing Huawei and Panda logos and a Huawei regulatory-compliance document obtained by subpoena.

A November 2012 document states that worsening conditions in Iran prompted Huawei to stop seeking new customers and reduce its presence.

At the end of my pew, an Asian man takes notes in Chinese in a black notebook, then lowers his head for a nap. An attorney? Someone from the consulate? I cannot tell.

Records from October 2012 show approximately $84,000 in Skycom payments to Networkers, a staffing company, routed through a New York bank.

In May 2013, Skycom paid Networkers another $54,000 through correspondent banks and CHIPS, involving JPMorgan Chase and HSBC.

At 1:04 p.m., Judge Donnelly announces a break for lunch until 2:30.

Outside the courthouse, a juror checks her phone in the sunshine before walking toward the Brooklyn Heights Promenade, where the neighborhood ends in a sweeping view across the East River to Manhattan’s Financial District, home to the banks she’s just heard so much about from the prosecutor.

AUTHOR’S NOTE

The court bars recording devices and does not make transcripts available immediately. Quotes are based on my notes.

RESOURCES

“The story behind the Huawei story—it’s not a politically-orchestrated car accident in slow motion,” Strand Consult, December 14, 2018

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This is the fourth in our series of blog entries with in-person coverage from the ongoing trial of Huawei Technologies (华为技术). Entry #1. Entry #2. Entry #3. Entry #5.

This is the third in our series of blog entries with in-person coverage from the ongoing trial of Huawei Technologies (华为技术有限公司). Entry #1. Entry #2. Entry #4. Entry #5.

Trial Day 20: October 13, 2026

It’s a beautiful, sunny October day in downtown Brooklyn and I’m late to week six of United States v. Huawei Technologies Co., Ltd., the federal trial in which the PRC tech giant faces 12 criminal counts of racketeering, trade-secret theft, bank fraud, money laundering and U.S. trade sanctions violations.

My bicycle and I got caught on the wrong side of the drawbridge over the Gowanus Canal at 9th Street, where Brooklynites have been waiting since the time of horse-drawn wagons and coal barges. When I reach the U.S. Courthouse at 10:25 a.m., nearly an hour late, there’s still no Eastern District Judge Ann M. Donnelly, and no jury.

The court has forgotten to change the judge’s name on the door. “This is not Judge Donnelly’s usual courtroom,” says Frank, a gray-bearded lawyer beside me. The jurors are late returning from the Indigenous Peoples Day weekend.

On the jury side of courtroom 6DS, about a dozen observers, mostly lawyers and reporters, occupy the gallery. A young man reads a paperback. Behind me, an Asian woman with her arm in a sling reads a Chinese novel. On Huawei’s side sit about 20 observers, mostly suited men, many Asian.

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Disputed Documents

At 10:30 a.m., Judge Donnelly enters and asks whether either party has business before the jury arrives.

Huawei’s lawyers seek rulings on two documents.

The first, GX 22608, is a Standard Chartered Bank memorandum discussed in Huawei on Trial #2. The defence argues that it reveals the bank’s “state of mind,” having characterized Huawei as presenting a “low-to-moderate” reputational risk.

The government calls it “irrelevant” and “prejudicial.” Judge Donnelly is “inclined to admit it.”

The second, DX 374, is an email between Standard Chartered employees concerning a loan sought by a Huawei client, subject line “SCB in Iran.”

The defense argues that it supports Huawei’s contention that Standard Chartered knew Skycom was a Huawei affiliate, contrary to prosecutors’ allegations that Huawei concealed their relationship.

Judge Donnelly discusses redacting the documents for the jury while preserving them for potential “appellate issues we haven’t thought of.”

There, for the first time, is the idea that this trial, already expected to last at least three months, might someday produce an appeal if Huawei is convicted, if Judge Donnelly makes a consequential legal ruling during the proceedings, or if the restrictions she placed on public access to portions of the trial are challenged. (For more on this, see ‘A Sidebar of Our Own’ in Huawei on Trial #2)

Defence attorneys David Bitkower and Katya Jestin of Jenner & Block LLP have nothing further to raise.

The government says Donnelly’s decision will affect how Huawei edits a video for later testimony.

Donnelly smiles.

Judge Donnelly: “Are you harassing me?”

Government: “No, Your Honor.”

The response comes from Assistant U.S. Attorney Alexander Solomon, who signed the September 2021 Deferred Prosecution Agreement (DPA) that ended the U.S. effort to extradite Huawei CFO Meng Wanzhou from Canada.

The Government Calls Heather Campbell

At 10:43 a.m., the jurors enter carrying coffee, tea, legal pads and pens.

“I hope you all had a nice long weekend,” Judge Donnelly says.

The government calls Heather Anne Campbell, a woman in her 50s with sandy-blonde hair, wearing a gray dress and black cardigan.

Campbell lives in Farmersville, Texas. She joined the Marines at 17, trained as a Chinese linguist, and studied Mandarin at the University of Hawaii and the University of Texas. Her answers come with a “Yes, sir” and “Yes, ma’am.”

Her career included work at telecom carrier MCI, researching Chinese companies for AsiaInfo Services, 13 years raising children, an MBA and four years at JPMorgan Chase.

From April 2012 until January 2016, Campbell worked in human resources and corporate training at Huawei Device USA’s Plano, Texas, office.

There she worked closely with in-house counsel Charles de Chateauvieux, whose office was down the hall. They had a cordial relationship.

The government asks about a July 2013 conversation concerning a memorandum from Huawei headquarters distributed to company offices worldwide.

The document described a program rewarding employees for supplying information about competitors, with cash payments determined by the information’s perceived value.

Asked about de Chateauvieux’s demeanor, Campbell recalls his concern and “a serious look.”

Campbell: “Basically, it was asking our employees to steal company information from our competitors.”

Huawei Device USA’s human resources director, Jennifer Ponder, had advised employees to ignore the memorandum, which Campbell had not received.

Government: “Did you want to see the document yourself?”

Campbell: “Yes. I wanted to see it for myself, especially because I had awareness of other things that had happened.”

Among those events was the May 2013 incident at T-Mobile’s Bellevue, Washington, laboratory, where Huawei engineers allegedly photographed its proprietary “Tappy” smartphone-testing robot and removed a mechanical arm to help develop a competing device.

Campbell and de Chateauvieux arranged to exchange the memorandum discreetly in a sixth-floor hallway.

Government: “Why there?”

Campbell: “There weren’t a lot of people there.”

“I walked toward him. He walked toward me, and he handed me an envelope in passing, without saying a word.”

Government: “Had anything like this ever happened during your time at Huawei before?”

Campbell: “Never.”

Government: “What happened next?”

Campbell: “I took the envelope down the stairs, into the parking lot, and into my car.”

Government: “Why?”

Campbell: “I wanted to read it in private because of the sensitive nature of the document.”

Huawei’s Competitor Information Program

The envelope contained two documents.

The first, Exhibit 16336, is a five-page memorandum, three pages in English and two in Chinese, headed “Huawei Device Company Limited — Internal.”

Dated July 10, 2013 and signed by Kevin Gu, it was addressed to account-management personnel.

Campbell says its formatting resembled the official Huawei communications ordinarily reviewed by senior executives, including Ponder, de Chateauvieux, Huawei Device USA President Cui Jiangao and Chief Operating Officer Zhang Yufeng.

The memorandum instructs employees to collect competitors’ information, providing a website and email address for submissions.

Headquarters would reward employees according to the information’s value and confidentiality. Twice, the document encourages participation with “no punishment.”

Regional competitions would be judged every six months. Awards ranged from 200 to 2,000 yuan.

An accompanying chart assigns values to competitors’ product roadmaps, 2,000 yuan; business documents and project pricing, 1,000 yuan each; distribution structures, 500 yuan; and aftermarket strategies, 200 yuan.

Other categories include customer relations, market information, salaries and organizational structures.

At 11:15 a.m., Judge Donnelly calls a sidebar. White noise fills the courtroom.

Questioning resumes with the memorandum’s information-security provisions, encouraging encryption of valuable submissions.

The second document, Exhibit 16335, is a high-priority email dated July 12, 2013 — two days after the memo — from Jennifer Ponder to Huawei Device USA executives.

Ponder acknowledges headquarters’ memorandum encouraging employees to gather competitors’ information. While such practices might be standard elsewhere, she writes:

“Here in the USA we do not condone such behavior.”

Employees engaging in such conduct, she warns, could face discipline, including possible termination.

Government: “Have you ever seen an email like this during your time at Huawei?”

Campbell: “No.”

Asked what she did after reading the documents, Campbell says:

“I sat there and thought. I sat there and thought. I wondered, what does this mean? What am I really reading? Am I understanding this correctly?”

She showed the memorandum to sales executive Charles Pickett, who seemed unconcerned, and then to Doug, the head of engineering, whose surname she cannot recall.

Doug’s reaction:

“Wow, that’s bad.”

Campbell says she considered approaching Congressman Mike Rogers, then serving on the House Intelligence Committee, but Huawei objects and Judge Donnelly sustains.

Campbell ultimately contacted the FBI.

Campbell: “It was clear the memo was asking our employees to commit theft, and that’s wrong.”

Government: “Did you offer the document to the FBI?”

Campbell: “Yes.”

The government concludes its examination.

Huawei Cross-Examines Campbell

After another sidebar, Huawei’s attorney begins cross-examination at 11:33 a.m.

She has dark hair, eyeglasses perched on her head, a patterned white blouse beneath a dark suit and a large diamond ring.

The defence establishes that Campbell was not an original recipient of the memorandum and knew neither who conceived it nor how it was approved or distributed.

Kevin Gu, its signatory, was a device strategy analyst, not a director. According to the defence, only 15 to 20 people initially received the memorandum, all in device sales.

Huawei: “Not research-and-development engineers?”

Campbell: “Correct.”

Lost in Translation?

The defence questions Campbell’s Mandarin proficiency.

Huawei: “Are you fluent in Mandarin?”

Campbell: “I once was.”

Huawei: “And you were able to read and write?”

Campbell: “I once was able to do that.”

When the attorney turns to the Chinese original, the government objects and Judge Donnelly calls another sidebar.

Returning, the attorney says:

“We’re not going to ask you to dust off your Chinese-language skills.”

Instead, she displays the original English version beside another translation.

The defence suggests that the phrase concerning “no punishment” could mean employees would not be penalized for declining to participate.

Campbell concedes that interpretation is possible.

Small Rewards

The attorney converts the incentives into 2013 U.S. dollars: approximately $30 to $330.

Huawei: “These were not executive-level bonuses, were they?”

Campbell: “Correct.”

The defence returns to Ponder’s July 12 email, characterizing it as a formal rejection of headquarters’ memorandum.

There is an awkward moment for Huawei when its attorney says that Ponder’s email “condones” the memo for headquarters when she means “condemns,” prompting a colleague of hers to leap from his seat behind her to whisper in her ear and Judge Donnelly to voice the word “condemns.”

The Huawei attorney, Julia Gatto of Steptoe LLP, apologizes and continues her description of the meaning of Ponder’s message about the HQ memo.

Huawei: “This is not a policy.”

Campbell: “Correct.”

Huawei: “It means we take it back.”

Campbell: “What she’s saying is we don’t condone this behavior.”

The attorney emphasizes that Huawei Device USA management expressly prohibited the conduct.

Office Culture, Corporate Training

Questioning shifts to Huawei Device USA President Cui Jiangao.

Campbell compliments the attorney’s pronunciation of Cui’s surname.

“I’ve been working on that,” Gatto replies.

Campbell confirms that Chinese expatriate employees spoke Mandarin and appeared respectful of Mr. Cui.

Huawei: “Did anybody overrule Jennifer Ponder’s email?”

Campbell: “Not that I’m aware of.”

The defense introduces Exhibit DX 11567, a redacted document shown to Campbell but not the jury.

The attorney argues that Huawei organized training in July and August 2013 to teach employees to respect third-party intellectual property.

Campbell agrees but says the training may have responded to both the memorandum and the T-Mobile incident.

Huawei: “Did you participate in the training?”

Campbell: “Yes.”

Huawei: “Were you proud of the training?”

Campbell: “Yes.”

Campbell says she never considered it a mere “check-the-box exercise.”

The defence suggests Huawei’s training helped advance Campbell’s career, including subsequent work in global sourcing for Japanese telecommunications company NTT.

Compensation and Bonuses

Defence Exhibit 20230 establishes that Campbell earned approximately $5,000 monthly in 2014, plus bonuses, retirement contributions and health benefits.

At 12:21 p.m., Judge Donnelly calls another sidebar. The court reporter brings water to the jury. One juror rubs his knee.

Judge Donnelly: Does anybody need a break? I don’t want to make you suffer.

The defence notes that Campbell received a $400 “headquarters award” in 2014 and two more, of lesser amounts, in 2015 for good performance.

Huawei: “Were you going to get rich from these awards?”

The government objects. Judge Donnelly allows the question but says she is “struggling to see its relevance.”

Huawei: “Were you going to get rich from these awards?”

Campbell: “Not on that particular day.”

Contacting the FBI

The defence questions Campbell’s decision to approach Congressman Rogers and the FBI.

Huawei: “Did you actually take the memo to the FBI?”

Campbell: “Yes.”

The attorney asks whether Campbell felt urgency and whether her husband, who had FBI connections, encouraged her to contact investigators.

Campbell says no.

She confirms that she was already involved in corporate training when she contacted the FBI, including training related to T-Mobile.

The defence returns to de Chateauvieux, attempting to establish his legal qualifications and previous Justice Department employment. The government objects successfully.

Campbell does not know whether he still works at Huawei. (He does.)

The defence establishes that Campbell continued working for Huawei after contacting the FBI.

Huawei: “You stayed on at Huawei?”

Campbell: “Yes, for two more years”.

She also sought promotion in 2014, completing a self-assessment and company evaluation.

Huawei: “You described Huawei as a positive and pleasant place to work?”

Campbell: “Yes.”

Finally, the attorney questions Campbell about her FBI interview, during which she provided the memorandum, Ponder’s email and information about T-Mobile.

Huawei: “You sat down for a formal interview with two FBI agents and shared the memo, the email, and other information about T-Mobile?”

Campbell: “They asked questions, and I answered.”

Huawei: “You shared information about Mr. Cui?”

Campbell: “They asked questions, and I answered.”

The defence suggests Campbell also described Cui’s office and habits: a Buddha statue on his bookshelf and daily 6 p.m. ping-pong games.

The government objects.

At 12:42 p.m., Judge Donnelly calls another sidebar. White noise fills the courtroom. A juror stands to stretch.

Three minutes later, the judge announces lunch recess until 2:15 p.m., reminding everyone not to discuss the case.

The sixth week of Huawei’s trial continues.

AUTHOR’S NOTE

The court bars recording devices and does not make transcripts available immediately. Quotes are based on my notes.

RESOURCES

“The story behind the Huawei story—it’s not a politically-orchestrated car accident in slow motion,” Strand Consult, December 14, 2018

Subscribe now

This is the third in our series of blog entries with in-person coverage from the ongoing trial of Huawei Technologies (华为技术有限公司). Entry #1. Entry #2. Entry #4. Entry #5.

This is the second in our series of blog entries with in-person coverage from the ongoing trial of Huawei Technologies (华为技术有限公司). Entry #1. Entry #3. Entry #4. Entry #5.

Trial Day 15: October 1, 2026

October 1 is National Day in China, a holiday of grand proportions marking the founding of the People’s Republic. Everybody gets a whole week off to celebrate Mao Zedong’s 1949 declaration in Beijing of a new form of government under the Communist Party.

But in Brooklyn, this October 1 was just another day in the U.S. federal trial of the giant Chinese company Huawei Technologies on felony charges including racketeering, intellectual-property theft, fraud and evasion of U.S. trade sanctions.

The U.S. case against Huawei comes eight years after Meng Wanzhou, the company’s CFO and daughter of its founder, was arrested in Canada at the behest of the U.S. Department of Justice, which sought to extradite her to New York for trial. The ongoing case against the company—in which Eastern District Court Judge Ann Donnelly ruled that Meng’s admission of wrongdoing will be admissible as evidence—sits at the nexus of the U.S.-China struggle over technology, national security and economic power.

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Following are my impressions of a morning session of another day in the fourth week of the trial in courtroom 6D South.

I arrive at 9:30 a.m. and sit next to a lawyer on a wooden bench in the public gallery. Also named Jonathan, he is here for the first time, attending in order to hear testimony from a bank witness.

At the Huawei table, roughly a dozen lawyers huddle. Most are men. At the government table, seven lawyers smile and talk. They too are mostly men. Lawyers from both sides meet in the middle to confer over a sheaf of papers. They are relaxed. This is not a murder trial. Nobody is glum. These lawyers are preparing arguments for a battle over the rules of international commerce.

Lawyer Jonathan tells me he has read about the case in Law360, a paywalled legal journal that covered the Iranian witness I observed September 14 in the first instalment of this blog. He is surprised at the scant mainstream press coverage.

At 10:05, still no judge and no jury.

From my recent stint as a juror on a hit-and-run case in a courtroom a few blocks away from this building at 225 Cadman Plaza in downtown Brooklyn, I’m reminded that the court waits for The People—citizens with lives, kids and jobs, people whose plans are foiled by big city traffic, illness, heartbreak and sometimes broken alarm clocks. The People matter. Their judgment will decide this case, too.

We wait.

At 10:07, Judge Donnelly arrives and immediately notes “train trouble.” One juror is 45 minutes away and the court hasn’t heard from another. Though alternates are available, train trouble is not enough to replace a juror.

Judge Donnelly invites Huawei’s lawyers to raise legal issues concerning an upcoming witness. A defense attorney from Steptoe LLP objects to the government’s repeated presentation of evidence showing U.S. telecommunications equipment in Iran. Huawei, he argues, does not want jurors left with the impression that the mere presence of American-made equipment there was necessarily illegal.

“Doesn’t matter if the equipment is from the U.S., Iran, or the moon,” he says, calling the issue “a sideshow.”

“It is not necessary to bring up the export laws,” Judge Donnelly says. “Most regular people don’t know about export laws. It’s not in the indictment.”

A prosecutor counters that the equipment is relevant because the government alleges Huawei violated sanctions through services and transactions connected to Iran. The U.S. equipment’s presence, he says, provides background for those services and helps establish Huawei’s motive to distance itself from Skycom, its local Iran subsidiary, which had offered U.S. goods to MCI, Iran’s leading mobile telecommunications company.

Under U.S. law, the de minimis rule allowed certain foreign-made products containing less than a specified threshold of U.S.-origin technology or components to be exported to Iran without a U.S. license—a threshold central to whether Huawei’s Iran-related transactions violated U.S. export controls.

The prosecutor also says the government expects to show that U.S. equipment went to Iranian state-owned companies.

All this happens before the jury has even set foot in the courtroom. I find myself doubting that the proceedings of Michael Kovrig’s March 2021 trial in Beijing were this transparent and am certain that there was no public audience.

Huawei’s defense lawyer counters that the company also used U.S.-dollar transactions to pay network employees in Iran and objects to prosecutors creating the impression that Huawei necessarily violated sanctions. The government, in turn, says witnesses understood the presence of U.S. equipment in Iran to be “wrong”—evidence, it argues, of “motive” and “state of mind.”

“I will think about it,” Judge Donnelly says.

At 10:20, Huawei asks for a sidebar. The lawyers from both sides gather around the bench and white noise fills the public-address system. The rest of the courtroom cannot hear what they are discussing. Somebody (the judge?) says something and they all laugh.

I ask lawyer Jonathan about a report that the courtroom may close for three days. He has seen the motion, which he calls “very rare.”

“Why would someone move to close the court?”

“To protect witnesses.”

Thirty-eight minutes later, the white noise stops. Judge Donnelly admonishes the courtroom for socializing during the sidebar because it makes the court reporter’s job difficult. Then she calls the first witness.

Alex Manson, a slender, silver-haired man in a dark suit, white shirt and silver tie, strides in and takes the witness box.

At 11:02, we rise for the jury. One juror wears a blue-and-orange New York Rangers ice hockey T-shirt. Another has a red hoodie with a white cross and the word LIFEGUARD across the chest. A third wears a bubblegum pink sweatsuit.

Judge Donnelly thanks them for overcoming the train trouble.

Manson is sworn in. He lives in Singapore and has worked for Standard Chartered Bank since 2012, where he is now CEO of a group building digital fintech ventures. Previously, he held senior roles in wholesale and global transaction banking, overseeing cash management, payments and trade financing.

Huawei was a major Standard Chartered client. Manson served as a senior representative to the company, meeting regularly with Meng Wanzhou—whom he knew as Cathy Meng—and her team.

Standard Chartered provided Huawei with transaction banking, cash management, foreign exchange, trade finance and supply-chain financing across Asia, Africa and the Middle East. Huawei’s international reach, Manson explains, made sophisticated global banking particularly important.

His relationship with Huawei began in 2012. Prosecutors introduce a call report from a meeting that December 11 in London attended by Standard Chartered bankers and Huawei executives including Meng. In it, Manson congratulated Huawei on overtaking Sweden’s Ericsson as the world’s largest telecommunications-equipment provider.

Meng, according to the report, said Huawei needed “a close partner” such as Standard Chartered to serve as “a trusted adviser.”

Standard Chartered became one of Huawei’s main banking partners outside China.

A January 2014 email records another conversation between Manson and Meng after meeting at the annual World Economic Forum in Davos. Meng complained that Chinese banks outside China held meetings but “don’t do anything.”

Manson explains that Huawei’s global business required capabilities many Chinese banks then lacked: geographic reach, technical proficiency and sophisticated international services. HSBC, Standard Chartered and Citi were among the principal banks helping Huawei outside China.

The government prosecutors then turn to risk.

Standard Chartered, Manson explains, could not onboard clients it considered too risky. Credit mattered, but so did reputation. Its Wholesale Banking Reputational Risk Committee met every six weeks to review potentially problematic clients and transactions.

Prosecutors introduce the committee’s December 5, 2012 agenda. One item reads: “ZTE FBI investigation and related issues,” referencing Huawei’s smaller Chinese telecom rival, ZTE (中兴通讯股份有限公司).

A report from the month before, November 2012, notes “considerable adverse media in the United States in the context of U.S.-China relations against the backdrop of a presidential election year.”

Manson says the bank did not automatically believe negative media. It asked clients about allegations and gave them a chance to respond.

Then prosecutors introduce reports concerning ZTE and Huawei supplying U.S. equipment to Iran, including a 2010 Washington Times story alleging ties between Huawei and the Iranian military.

Did that concern Standard Chartered?

“We would not process any transaction in violation of sanctions,” Manson says. “We take these very seriously.”

A young man in jeans and a white T-shirt printed with the traditional Chinese characters used in Taiwan quietly enters the courtroom and sits beside me. He pulls a paperback copy of Gabriel García Márquez’s Love in the Time of Cholera in the original Spanish from a denim tote and begins reading, apparently paying no attention to the trial.

The government continues.

A February 2013 Standard Chartered memo assessed whether Huawei posed enough reputational risk that the bank should reconsider “BAU”—Business as Usual. Much of the memo is redacted. Of four listed risks, three are hidden.

The visible one reads: “Dealing with sanctioned countries.”

The memo followed some “adverse media”: a December 2012 Reuters report about a 2010 Skycom proposal to sell €1.3 million in U.S. equipment to MCI in Iran. Reuters also reported that Meng had served on Skycom’s board.

The February 2013 Standard Chartered memo lists “mitigants”—reasons the bank might consider the risks acceptable. They include phrases such as “Huawei said that” and “Huawei stated that,” indicating that the bank confronted Huawei about the allegations and Huawei responded.

Another email, dated February 27, 2013, states that Huawei did business in Syria, Iran, Sudan and other sanctioned countries.

The government then jumps forward to a November 7, 2017 call report involving Steven Tian, a senior member of Huawei’s overseas finance operation.

Huawei was announcing a two-year withdrawal from its banking relationship with HSBC, citing inefficiency and differences over compliance.

Manson says he found that explanation plausible—but incomplete.

“Call it a banker’s instinct, a form of pattern recognition,” he says.

The story sounded one-sided. Manson wondered whether HSBC had actually decided to terminate Huawei, rather than the other way around.

Tian reassured Standard Chartered that Huawei’s cash business was not related to sanctioned countries and that Huawei had not caused HSBC to violate sanctions.

HSBC and Standard Chartered had similar policies against processing transactions involving sanctioned countries. Asked who ended the HSBC relationship, Manson says Huawei did. Asked whether Standard Chartered relied on Huawei to explain why, he says yes.

But Manson had another thought: “Did HSBC find out something we didn’t know?”

At 12:45, a Huawei lawyer begins her cross-examination. She appears to be in her 40s, with close-cropped blonde hair, a dark suit and chunky eyeglasses.

She places photographs of Manson and other Standard Chartered bankers on a magnetic whiteboard in view of the jury.

Manson describes himself as a “Senior Sponsor” of Huawei, responsible for understanding the company’s overall needs and maintaining relationships with senior executives.

The defense establishes that Manson has an engineering background.

“Would it be fair to say that you admired Huawei’s products?”

“Yes.”

At 1 p.m., Judge Donnelly calls the lunch break.

The young man reading García Márquez and I begin to talk. His name is Aiden. He studied history at Carleton College in Minnesota, is partly ethnic Chinese and grew up in New Jersey. He is in court hoping to catch up with a friend whose father, one of Huawei’s attorneys, is in town from Los Angeles and has been working on the case for years.

“Huawei wants to wrap the case up,” Aiden says. “There’s a lot of pressure on the U.S. firms representing them.”

AUTHOR’S NOTE

The court bars recording devices and does not make transcripts available immediately. Quotes are based on my notes.

RESOURCES

“The story behind the Huawei story—it’s not a politically-orchestrated car accident in slow motion,” Strand Consult, December 14, 2018

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This is the second in our series of blog entries with in-person coverage from the ongoing trial of Huawei Technologies (华为技术有限公司). Entry #1. Entry #3. Entry #4. Entry #5.

In this post, reports from a Brooklyn courtroom as Strategic Narratives brings you the first in a series of blog entries on the ongoing trial of Huawei Technologies in the Eastern District of New York.

This is the first in our series of blog entries with in-person coverage from the ongoing trial of Huawei Technologies (华为技术). Entry #2. Entry #3. Entry #4. Entry #5.

Trial Day Four: September 14, 2026

Eight years after the arrest of Huawei CFO Meng Wanzhou set off one of the most consequential diplomatic crises in recent Canada-China history, the Chinese telecom giant itself is finally on trial in a United States federal court.

At the end of Meng’s nearly three-year extradition process in Vancouver, she did not plead guilty, but agreed in writing that she had knowingly made false statements to the London-based bank HSBC about Huawei’s relationship with its Tehran-based affiliate Skycom and its business in Iran.

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The trial of the company her father founded, Huawei, is taking place in Brooklyn because U.S. government prosecutors allege that its executives, including Meng, deceived HSBC and three other international banks about Huawei’s dealings in Iran, and that those banks processed millions of dollars in transactions through American financial channels based in New York, in violation of U.S. law.

Because U.S. v. Huawei is a federal criminal case involving serious felony charges, it is being tried by a jury, which will decide whether Huawei committed the alleged crimes.

The trial opened September 8. After jury selection, prosecutors told jurors the next day that Huawei had operated in a pattern of “theft, lies and cover-ups” for two decades—stealing technology and trade secrets from U.S. companies; hiding its ties to Skycom to conduct sanctioned business in Iran; misleading the banks; and helping Iranian authorities with surveillance capabilities. Read the full indictment here.

Among the first witnesses were a former Iran-based worker who testified about Huawei-linked surveillance work, and a former Huawei U.S. engineer who testified that a colleague had boasted about stealing patented technology used in Amazon’s cloud platform.

All this is unfolding at 225 Cadman Plaza East in downtown Brooklyn in the glass-and-steel U.S. Courthouse that is home to the Eastern District of New York. Outside, the plaza is quiet. Inside, on the sixth floor, courtroom 6D South is high-ceilinged and bright, with pale wood paneling, a pinkish marble wall behind the judge’s bench and a big silver seal of the United States dominated by an eagle.

On the morning of September 14, the fifth day of the trial, the courtroom was full and buzzing with whispers.

At two long tables sat the opposing sides. At one table sat at least six attorneys for the U.S. government. Behind the government attorneys, at another long table strewn with laptops and coffee cups, sat about a dozen lawyers from Steptoe LLP representing the Chinese telecommunications giant. The public benches at the back of the courtroom were filled with additional lawyers, reporters and observers. A group of Chinese men in suits sat directly next to Huawei’s attorneys.

“They’re from Huawei,” whispered a Chinese reporter for an overseas outlet.

In Huawei’s opening statement on September 9, the company’s lawyers denied the U.S. government allegations and said that prosecutors would paint a false portrait of a company whose success actually came from research, innovation and competition.

The case is much bigger than a corporate criminal trial. Meng’s December 2018 arrest in Vancouver at Washington’s request was followed days later by China’s Ministry of State Security taking Canadians Michael Kovrig and Michael Spavor hostage in Beijing and Dandong, respectively. They spent 1,019 days in wrongful detention before being released simultaneously with Meng’s own departure from Canada and return to China in September 2021.

The Huawei trial therefore connects Canada’s ordeal directly to the larger U.S.-China struggle over technological supremacy: Huawei, once at the centre of the global battle over 5G, is now also an important player in Beijing’s drive to develop advanced chips and artificial intelligence despite U.S. efforts to restrict China’s access to cutting-edge technology.

“The first days were testimony about Huawei’s theft of American technology,” a Chinese reporter who had been attending since day one told me. “Today’s going to be more interesting. They’re going to talk about Iran.”

It’s worth noting that in the 5G market globally, Huawei’s competitors are not American firms but rather the Swedish firm Ericsson and Nokia of Finland. The U.S. does not have a full-scale equivalent to Huawei. The stakes couldn’t be higher. Next year, for the first time, China will host the World Radiocommunications Conference 2027, where 194 nations will gather to debate and possibly rewrite the rules that govern how satellites, smartphones, military networks and WiFi routers use the radio spectrum worldwide for the decade to come.

At 9:45 a.m., a court officer announced Judge Ann Donnelly. Firmly middle-aged, Caucasian and bespectacled, Judge Donnelly has straight, sandy-blond hair that falls to the shoulders of her black judicial robes. Before most people present had finished standing to honour her entry into the courtroom, Judge Donnelly smiled and said kindly, “Everybody can sit down.”

The morning’s witness was an Iranian engineer called ‘Babak Vahdati’ (spelling unconfirmed). A former employee of Skycom, the telecommunications company at the centre of the government’s allegations concerning Huawei’s business in Iran, Vahdati had joined as an electrical engineer in Tehran in 2005. He later worked for Swedish telecoms giant Ericsson and mobile data leader Irancell. He was not a lawyer or sanctions expert, merely an engineer specializing in wireless networks. But what he had seen while working for Skycom had become evidence.

A Huawei defense attorney began by revisiting Vahdati’s earlier testimony. He had told government lawyers that he saw what he believed was American-made telecommunications equipment bearing the logos of Dell, IBM, Hewlett-Packard, and Sun Microsystems at a Huawei facility in Iran.

The U.S., Canada and dozens of other countries restrict exports of sensitive technologies under their own national laws informed by the 1996 Wassenaar Arrangement, which coordinates controls on nine categories of “dual-use” technology—including telecommunications and information security. China is not a Wassenaar member, but maintains its own export-control regime.

The Iranian engineer did not know how the American-made equipment got to Tehran, whether it was new or secondhand, or who imported it. He understood that the ultimate customer was TCI, Iran’s principal fixed-line telecommunications operator.

The defense attorney pressed him on the limits of his knowledge.

“Do you know about the de minimis rule?” she asked.

“Objection, Your Honor,” a government attorney said.

“Sustained,” Judge Donnelly replied.

But the question went to an important issue: Under U.S. law, the de minimis rule allowed certain foreign-made products containing less than a specified threshold of U.S.-origin technology or components to be exported to Iran without a U.S. license—a threshold central to whether Huawei’s Iran-related transactions violated U.S. export controls.

The questioning then turned to Skycom itself.

Vahdati testified that although his employment contract was with Skycom, he understood from the beginning that he was working for Huawei. He was given a Huawei email address.

“Ericsson was Ericsson,” he said. “Nokia was Nokia. Skycom was Huawei.”

“We never asked the question. It was just understood.”

The defense displayed emails from 2010, showing that Skycom employees continued using Huawei email addresses while conducting Skycom business.

After several government objections, Judge Donnelly called the lawyers to the bench. White noise poured through the courtroom’s speakers to prevent the jury from hearing their sidebar.

When testimony resumed, the defense established that Vahdati had not known that Nokia also operated in Iran under a local corporate name.

“Nokia was Nokia,” he repeated.

“No further questions, Your Honor.”

A government prosecutor rose for redirect. Through Vahdati, he sought to draw a distinction between Huawei’s internal and external communications: employees used Skycom addresses when dealing with outsiders, he testified, but Huawei addresses when communicating internally.

“How did Huawei and Ericsson present themselves differently in Iran?” the prosecutor asked.

Vahdati said he had signed a contract directly with Ericsson. With Huawei, there was a third party: Skycom.

The point the government seemed to be trying to make was that Huawei chose to operate in Iran through its affiliate Skycom to mask its alleged illegal import and use of U.S.-made equipment there. Sweden’s Ericsson and Finland’s Nokia, which also had local partners, saw no need to hide behind their local affiliates. Nothing about their trade in Iran was illegal, because it didn’t include high-end, dual-use U.S.-made parts, even if the sale of Scandinavian equipment to Iran was distasteful to Washington and went counter to the spirit of the U.S. economic embargo on Iran, according to John Strand, founder and CEO of Copenhagen-based telecommunications consultancy Strand Consult.

That embargo, in place since 1995, has banned nearly all American goods and services being sold to Iran whether or not they have military uses. The embargo, which also restricts Iran’s access to the U.S. banking system, aims to apply economic pressure to constrain the Iranian regime. U.S. prosecutors accuse Huawei of breaking these rules by using its Iranian affiliate Skycom to obtain American equipment and services and misleading banks about its business in Iran.

When, in 2018, U.S. President Donald Trump reimposed sanctions on Iran—after withdrawing from the JCPOA—Ericsson wound down its business in Iran for fear of upsetting Washington, Strand said, leaving Tehran few options and making business with Huawei more attractive.

Vahdati, the Iranian engineer witness, also described traveling to Shenzhen for training at Huawei headquarters.

By late morning, his testimony was finished. As Vahdati walked into the sixth-floor lobby, a reporter followed and asked him how to spell his name.

“I don’t think I can give that to you,” he said politely.

Then he walked away.

AUTHOR’S NOTE

The court bars recording devices and does not make transcripts available immediately. Quotes are based on my notes.

RESOURCES

“The story behind the Huawei story—it’s not a politically-orchestrated car accident in slow motion,” Strand Consult, December 14, 2018

Subscribe now

This is the first in our series of blog entries with in-person coverage from the ongoing trial of Huawei Technologies (华为技术). Entry #2. Entry #3. Entry #4. Entry #5.

Five years ago this week, I left China after its Communist Party finally agreed to a negotiated end to my wrongful detention there. I’d been a political hostage in its ruthless ploy to coerce Canada into releasing a Chinese telecom executive. For the anniversary of my liberation, this post collects most of what I’ve said publicly about the ordeal and its implications. You’ll have to wait a while longer to read the full account of what happened. The story has many layers, and it’s still not over.

Just as the echoes of what became known as the Meng-Michaels crisis still reverberate through me personally, so too its security, economic and legal aftershocks are still rattling relations among Canada, China and the United States.

The Same Three Players, Five Years On

General Secretary Xi Jinping almost certainly personally approved both my abduction and my release 1,019 days later. With unsettling synchronicity, he has spent much of the week on a state visit to Washington for a summit with the U.S. president whose administration precipitated the crisis, Donald Trump. The meetings seem to be mostly about burnishing their status as strongman leaders as I explained in The Diplomat. Read or listen to more of my analysis on CBC’s “As it Happens”.

In a second synchronicity, the U.S. government’s slow-burning legal case against the telecom company, Huawei Technologies, began hearings this month in the New York Eastern District Court — with Federal Prosecutor Taylor Stout calling the PRC tech titan a “criminal enterprise". Huawei faces charges of racketeering conspiracy, violating U.S. sanctions on Iran and stealing trade secrets. Expect the trial to take many months.

Completing the synchronicity trifecta, once again Washington is pressuring Ottawa, mainly through tariffs, in part to align with its economic statecraft against China, as I argue in a new op-ed. As for the third leader involved in the original bizarre geopolitical triangle, Canada’s then-PM Justin Trudeau, well, you’ll have to ask Katy Perry.

My own ordeal as the CCP’s hostage began in December 2018 when Canada detained Huawei’s Chief Financial Officer Meng Wanzhou on a U.S. warrant to arrest and extradite on charges of violating sanctions on Iran and financial fraud. Canada was following longstanding standard procedure under its bilateral extradition treaty with the United States. There was no political involvement by Ottawa, and indeed Canadians soon wished they had never been involved. I explained the context in an interview (clip above) with Al Jazeera’s Peter Dobbie on Dec. 6.

Four days later, under Xi’s direction, China’s Party-state instrumentalized two innocent Canadian citizens — Michael Spavor and me — as bargaining chips and later imposed de facto economic sanctions to pressure the Prime Minister and Justice Minister to intervene in the Meng case, which they refused to do.

Resolving the standoff in a manner that enabled all three governments to preserve their reputations took heroic advocacy and diplomacy by Vina Nadjibulla, Dominic Barton, Kirsten Hillman, my partner and family, the International Crisis Group, and so many other steadfast officials, friends, colleagues, and experts that naming them all would fill a Substack post. I’m forever grateful to all, and over the years since — when not busy caring for my loved ones, rebuilding my life and getting back to work researching, analyzing, writing, and advocating — I’ve tried to personally thank everyone who contributed.

If you were one of them and I haven’t expressed my gratitude to you directly, please consider yourself profusely thanked, and feel free to reach out. Connecting deeply and meaningfully with so many extraordinary people has been one of the highlights of the past half-decade. Not a day has gone by for me without some moment of reflection on the experience and appreciation for your help. Indeed, for the past five years, I’ve appreciated every sunrise and sunset I’ve been able to see, and much else in my life, even as I grapple with frustration at much that’s going wrong in the world.

Canada returned all of Meng’s personal property to her. China has so far refused to reciprocate for me. Most of the psychological and physiological damage that the MSS and confinement inflicted has healed, but some of it likely never can.

I still consider myself fortunate. Extradition experts have told me that if Meng’s court process in Vancouver had run its full legal course, including all possible avenues of appeal, it could have continued until 2026. Eight years after I was wrongly detained, I could still be confined to a single cell in the Beijing State Security Bureau’s #1 detention centre or a prison, with any resolution contingent on Meng’s fate. U.S. federal prosecutors wanted to question the Huawei CFO in their court. Instead, they’ve had to settle for her signature on a deferred prosecution agreement — which U.S. District Judge Ann ⁠Donnelly has deemed admissible as evidence in the current Huawei trial.

Decisions by Trump, Xi and the political systems they’ve shaped ultimately created that avoidable crisis. The CCP General Secretary has accumulated many titles and epithets. I hope those shaking hands with the “chairman of everything” and embracing his minions remember that he’s also China’s chief hostage-taker. Xi and his officials try to present themselves as responsible stewards of a “more multipolar” international order. But a glance at his relentless purges of his own cadres and generals, and his repeated arbitrary detentions of foreign citizens, makes clear this is a mirage. What Xi is really offering is a methodical authoritarian power that treats humans as mere means to ends and is exploiting global disarray to advance the interests of its own elites. A senior MI6 officer once aptly characterized the Party-state as “a secret service with a state attached to it, not the other way round.” The implication for individual foreign citizens is that its security organs may detain you for political purposes.

Last year, for The Wire China, I described several such cases, and then expanded that catalogue of suffering and assessed the risks for visitors here at Strategic Narratives.

The forced disappearances keep coming

My own case was unique but sadly not the only example of arbitrary detention in China. What the Ministry of State Security did to me, they continue to do to others (mostly China’s own citizens) often under an abhorrent procedure that hides behind a deceptive PRC legal term, “residential surveillance in designated location” (RSDL). Enforced disappearances, hostage-taking, arbitrary detention, solitary confinement, coercive interrogations, torture, isolation, and other human rights abuses continue because Xi Jinping and his loyal cadres evidently consider using individual civilians for leverage to be a morally acceptable tool of statecraft — never mind that it’s illegal to do so in war or peacetime.

On June 3, Min Zin, an American scholar of Myanmar, flew to Kunming at the invitation of a Chinese professor and vanished into one of the Guoanbu’s black jails. He’s reportedly being held under RSDL in a windowless room lit around the clock, coercively interrogated for hours a day, without any formal charges.

Youlin Chen, an American seismologist whose research helped detect North Korea’s nuclear tests, has been held since November 2024 and interrogated more than a hundred times. Washington has designated both men wrongfully detained, and U.S. Senators on Sept. 25 introduced a bipartisan resolution condemning China’s “repeated pattern of arbitrary or wrongful detention” of American academics and urging the return of Zin and Chen.

A Czech businessman, Aleš K., was detained this summer, mere months after Prague arrested a man it identified as a Chinese intelligence officer. To me, that sequence looks painfully familiar.

These three new victims, all of whom travelled to China on apparently legitimate business, are now among scores of foreign citizens the PRC is illegitimately holding, some for so long that the world has nearly forgotten. Others include Huseyin Celil, a Canadian Uyghur activist abducted in Uzbekistan and handed over to state security twenty years ago; Gui Minhai, a Swedish-Chinese publisher seized in Thailand in 2015; and Minnie Chan, the South China Morning Post’s defence correspondent, who hasn’t been seen in public since covering Beijing’s Xiangshan security forum three years ago. Everything points to her being in MSS custody. People well-placed to know believe her disappearance is linked to the investigation of General Zhang Youxia, who this week was expelled from the CCP after months of detention and investigation.

I regained my freedom because enough people with power and influence made it costly for Beijing to keep me while providing a face-saving concession on the one thing it demanded. These wrongful detentions won’t end until someone does the same for them. Each time Trump and his officials speak with Xi, they should show him pictures of these prisoners, humanize them, call for their immediate release, and make clear that continuing to hold them unjustly will bring cost-benefit-calculus-shifting consequences. Every other official who subsequently meets the CCP General Secretary should do the same until each and every one of them is free.

The point they should make to Xi Jinping is simple: Abducting and torturing people makes you look bad. It’s a tactic of the weak. It tarnishes your image, and if you want to be recognized and respected as serious statesman leading a risen and rejuvenated China, then stop behaving like a criminal thug. It’s totally unnecessary for achieving your stated objectives.

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For visitors to China, government travel advisories don’t adequately convey this kind of low-probability/catastrophic impact danger. The US State Department rates China at Level 2—”Exercise Increased Caution”, the level it upgraded the PRC to after a 2024 prisoner swap — despite subsequent wrongful detentions. The UK Foreign Office issues no warning at all. Global Affairs Canada advises only a “high degree of caution” while Beijing’s new visa-free entry makes the trip easier than ever. What does “caution” mean here? It’s a “go or don’t go” question. A line about “arbitrary detention” doesn’t begin to convey the full horror to a prospective traveller. Nor does it explain how an arrest or exit ban for other reasons could turn a prisoner into a pawn once Beijing finds them geopolitically useful. Security over-crank can morph into hostage-making.

Stories and Advocacy Against Arbitrary Detention

To help people understand why this matters, all I have are facts, arguments and true stories. As a timely reminder, I’ve compiled below most of my relevant writing, talks and media interviews on the topic so far, as well as a few important accounts written by others.

The Two Michaels: Innocent Canadian Captives and High Stakes Espionage in the US-China Cyber War. Journalist Mike Blanchfield and international affairs expert Fen Hampson combine groundbreaking original reporting and keen analysis in this book that focuses on the Canadian aspects of this story of cyber espionage, life-and-death diplomacy, and global superpowers in conflict. Sutherland House, November 17, 2021

Inside the Secret Prisoner Swap That Splintered the U.S. and China. Drew Hinshaw, Joe Parkinson and Aruna Viswanatha crafted the best overall feature story on how Meng’s detention kicked off a standoff between global rivals and opened an acrimonious new era. Their focus is on the final months of diplomatic wrangling that led to the September 24, 2021 prisoner swap. The Wall Street Journal, October 27, 2022

Biden Shouts Out Two Michaels in Speech to Canadian Parliament: ‘Our Citizens Are Not Bargaining Chips’. It’s not every day one experiences three standing ovations in Parliament, meets the U.S. president, and hears him say he’s to see you safely back with your family. Global News, March 24, 2023

Michael Kovrig Testimony to European Parliament Special Committee on Human Rights. I advised how EU members can help to halt arbitrary detention, beginning with my personal experience, followed by context on the problem and concluding with policy recommendations. EU Video, June 28, 2023.

Michael Kovrig Urges Unity Against Hostage Diplomacy, as Canada Helps Craft Rules. Speaking alongside U.S. Secretary of State Antony Blinken, Canadian Foreign Minister Melanie Joly, the foreign ministers of Costa Rica and Malawi, legal expert Amal Clooney, and fellow former detainee Jason Rezaian, I invited an audience of United Nations diplomats to imagine what it would be like to be taken hostage by a hostile state intelligence service. The Canadian Press covered the event for a story which appeared in The Globe and Mail and The Toronto Star, September 21, 2023.

Citizens for Leverage: Navigating State Hostage-Taking in a Shifting Geopolitical Landscape. Vina Nadjibulla and Stephanie Foggett produced the definitive research report explaining how a number of states today are unlawfully detaining foreign nationals within their criminal justice systems for use as foreign policy leverage. This cruel practice places individual citizens at the centre of a complicated calculus where their own governments must balance the individual’s freedom against political, security, economic, and other national considerations. The issue is fraught with challenges and complexities, further compounded by the often opaque political and judicial systems of abductor states. Soufan Center, September 14, 2023

China’s Abductions of Foreign Nationals Should Carry Costs and Consequences. In my first published commentary on arbitrary detention, I argued that governments must reinforce the basic international norm that responsible states don’t take each other’s citizens hostage. POLITICO Europe, January 30, 2024

Captive in China: Michael Kovrig’s 1,019 days, Ottawa Morning podcast, CBC News, 22 September 2024

’You’re totally alone’: Canadian Michael Kovrig on his ‘brutally hard’ detention in China, TV interview with Global News, 23 September 2024

Michael Kovrig tells his story, TV interview with The National, CBC News, 23 September 2024

‘From hell to limbo’: Michael Kovrig describes more than a thousand days as China’s prisoner, Peter Zimonjic, CBC News, September 23 2024

‘They’re never going to see me cry’: Interview with Michael Kovrig, broadcast interview, CTV News, September 23, 2024

They’re never going to see me cry’: Michael Kovrig shares experience of more than 1,000 days in Chinese detainment, Stephanie Ha, CTV News, September 23, 2024

En parallèle de l’horreur, l’amour. L’arrivée au monde de sa petite fille aurait dû être un des plus beaux jours de la vie de Michael Kovrig. Mais en mars 2019, quand sa conjointe lui a donné naissance, l’ancien diplomate canadien croupissait en isolement dans un centre de détention chinois. Laura-Julie Perreault, La Presse, September 23, 2024

Michael Kovrig on how he became a political hostage in China. The “Drum Tower” podcast’s David Rennie and I did a deep-dive pair of interviews. David was in Beijing for the duration of the crisis and I particularly appreciated how this was a conversation about each of our experiences living through it. The Economist, September 24, 2024

How Michael Kovrig Survived Three Years in Detention in China. The second of two “Drum Tower” episodes with David Rennie interviewing. The Economist, October 1, 2024

Michael Kovrig, former hostage of the Chinese state. In this print story based on our extensive interview, David Rennie gets the story precisely right. The Economist, October 4, 2024

Inquiry into the Wrongful Detention of Australian Citizens Overseas. I provided a witness Submission and Testimony to the Foreign Affairs, Defence and Trade Reference Committee, Australian Senate, October 28, 2024

China Secretly Executed Four Canadians. A Former Prisoner Explains Why, The Walrus, July 23, 2025

Is It Safe to Visit China? A Former Detainee’s Warning, The Wire China, July 30, 2025

Witness Testimony on the Detention of Jimmy Lai in Hong Kong, House of Commons Standing Committee on Foreign Affairs and International Development, Parliament of Canada, November 6, 2025

Michael Kovrig Urges Canada to Press China for Jimmy Lai’s Release on Health Grounds, The Globe and Mail, November 7, 2025

Mark Carney just ushered in a transformative moment for Canada. It’s also a risky one. Authoritarian regimes test not only policies, but moral boundaries. When they learn that inflicting pain produces concessions, that amnesia is cheap, and that accountability is avoidable, they escalate correspondingly. Op-ed, The Toronto Star, January 24, 2026

Why, After Years of Laying Low, Michael Kovrig Decided to Speak Out About Mark Carney, an interview with ombudsman for The Toronto Star, January 30, 2026

Prioritizing Political Prisoner Advocacy Across China. The PRC is holding several political prisoners who are important to the U.S. government. I and others advocated for their freedom at this panel discussion at the Hudson Institute, March 16, 2026.

Countering State-Perpetrated Arbitrary Detention: A Strategic Framework for Democratic Response. Vina Nadjibulla and I explain that state-perpetrated arbitrary detention has evolved from isolated diplomatic incidents into a systematic tool of coercion that threatens international order. Existing responses have proven to be insufficient deterrence. We present a four-pillar framework that integrates immediate case resolution with long-term deterrence objectives. Journal of Policing, Intelligence and Counter Terrorism, March 30, 2026

To end on a musical note, here’s a cover version of “Gift That Shines” that my pen-pal Tobias Forsner put together with me on backing vocals. For me, it evokes moments in the cell reflecting on what’s been lost and slowly attaining the Buddhist philosophical mindset of coming to terms with the past, being fully in the present moment and letting go of attachments, while recognizing that without liberty, few other things have value. I dedicate it to those still waiting for freedom. You are not forgotten.

I’ve been entertaining yesterday
Past and present they’re all mine
I don’t need a gift from yesterday
I don’t need a gift that shines

In May, Xi Jinping escorted Donald Trump through Beijing’s magisterial ancient buildings, where the Ming and Qing emperors performed rites that mediated between heaven and the earthly order. It’s appropriately called the Temple of Heaven. But when these two men with autocratic impulses and outsized egos strolled through the complex, it became not a Temple of Heaven but a Temple of Thymos – a stage for distributing recognition rather than cosmic concerns. Now, the neoclassical architecture of the White House provides the set for their September 23–25 follow-up encounter. (Sadly the ballroom will not be ready.)

In a new piece in The Diplomat, Strongmen at the Temple of Thymos, I argue that leaders who build regimes around their own yearning for recognition — ’s interpretation of what the ancient Greeks called thymos or thumos — are erecting edifices that appear magnificent but are internally brittle. I call this the Thymos Trap.1

Overlaying both heavily choreographed summits are the two men’s interpersonal dynamics. Trump’s evident desire for Xi’s respect — and a close relationship that leads to political and economic benefits for himself and key constituencies — has stymied efforts by all three branches of the U.S. government to further constrain the Chinese Communist Party’s power and influence.

Xi arrives in the shadow of intractable US-China strategic rivalry sharpened by a trade war that’s been in an uneasy stalemate since October 2025. The current tariff and supply-chain ceasefire expires November 10. Washington is proposing to extend it by six months; the PRC favours an extension through the rest of Trump’s term. They’ll also negotiate the format of a new, ongoing dialogue on AI. And Xi, in Washington for the first time since 2015, will surely press Trump to weaken US support for Taiwan.

Assessing how those and other pivotal elements in the relationship will play out requires a clear understanding not only of the structural geopolitical and geoeconomic factors that bind the two countries, but also the political psychology that drives the two self-styled strongmen and the elites around them.

I invite you to read the Diplomat essay, consider whether you agree, and then come back here for some further strands of corroborating evidence below.

What psychologists, diplomats and biographers see in Xi

Donald Trump’s persona has already been thoroughly marinated in a bottomless stew of comment and analysis, so my emphasis here is on his more guarded, reserved and inscrutable opposite number: Xi Jinping. In aggregate, the additional lenses collected here make a more persuasive case than any one source, because they come from different professional vantage points: academic psychologists, a biographer, a veteran diplomat, and a journalist of ideas. The takeaway is that they all converge on the same portrait of the Communist Party General Secretary as a disciplined, sincere, status-driven leader who for 14 years has been reshaping China’s Party-state in exactly the ways my essay warns about.

The prescient psych profile

In 2021, political psychologist Aubrey Immelman and his co-author Yunyiyi Chen produced an academic paper titled “The Personality Profile and Leadership Style of China’s President Xi Jinping” by applying Theodore Millon’s diagnostic framework to some 350 media reports. A caveat up front: we can’t put a head of state on a psychiatrist’s couch, so like my essay’s reference to the Dark Triad, it was an at-a-distance assessment, not a clinical diagnosis.

Still, its corroboration is uncanny. I and others have observed that personalist rulers risk succumbing to isolation, the suppression of bad news, and a refusal to concede, particularly when perceptions of status are in play. In Millon’s framework, the defining ego-defence of the “Dominant” personality the authors assign to Xi is precisely isolation — the capacity to detach emotionally from the consequences of one’s actions — and the type “rarely concedes on any issue, even in the face of evidence negating the validity of their position.” That’s my warning of a closed information loop that excludes corrective criticism, mapped through psychology.

Their most incisive conclusion helps interpret the evidence I find most persuasive and least comforting: Xi’s relentless purges. Immelman and Chen classify Xi as an “aggressive enforcer,” a fusion of dominance and conscientiousness that produces a leader who believes he has a moral duty to punish and control. As time passes and resentment builds, the enforcer’s crackdowns “provoke opposition and resistance, which in turn incites ever-stronger countermeasures,” hardening into a “bunker mentality.”

That’s the self-reinforcing spiral my Diplomat essay describes through Milan Svolik’s work on how dictators fall to insiders rather than to crowds — emanating through the leader’s temperament from the centre outwards. From this perspective, Xi’s evisceration of the Central Military Commission and People’s Liberation Army’s high command, which has reached Death of Stalin levels over the past two years, looks less like a show of strength than the enforcer’s spiral running its course. Certainly, one deep impression I took away from my years of daily interaction with Chinese cadres, is the power of psychological drivers, particularly fear, in shaping internal Party-state organizational behaviour.

The biography: never make concessions

Michael Sheridan’s spicy recent bio of Xi Jinping, The Red Emperor, deepens the portrait, particularly of Xi’s difficult childhood and youth, which seems to have infused with both a sense of entitlement to rule, and a burning humiliation and hunger to reverse it. Xi’s favourite summit partner Vladimir Putin can surely relate. Sheridan notably relates how, in 2011, Xi told a visiting Vice President Joe Biden that the lesson he had drawn from history was that China must never make concessions. That’s the Thymos Trap as a first principle: a leader who forecloses compromise operating in an international system where compromise is unavoidable has pre-committed to collision. Sheridan’s Xi is not a hothead but a cold, patient student of power — which is exactly why the rigidity matters. His discipline doesn’t disarm the trap; it meticulously builds an inescapable one.

The diplomat in the room

Speaking with Henrietta Levin on the invaluable CSIS podcast “Pekingology” ahead of this week’s Washington summit, Ambassador Daniel Kritenbrink — a former Assistant Secretary of State for Asia who was present for dozens of meetings with Xi — provides a portrait that reads like field notes for the same thesis. Kritenbrink’s Xi is “decisive, confident, calm, unflappable,” but above all a “calculated risk taker” whose toughness he traces to survival inside a brutal system. That’s the personality profilers’ “deliberative, emotionally controlled” leader in a practitioner’s words.

More striking is how Kritenbrink independently reaches for the vocabulary of recognition. Chinese summitry, he says, is organized around “the face and dignity of their leader”; Xi’s foreign policy is “focused on issues of security and status. Kritenbrink then gives a warning that encapsulates the Thymos Trap: what concerns him most is not China’s weakness but Chinese officials “more confident than perhaps I’ve ever seen them,” convinced they’ve got Donald Trump’s number. Kritenbrink’s fear: “an overconfident China is a China that very well may overplay its hand.” That’s the Thymos Trap’s causal engine — inflated recognition breeding miscalculation.

Mind over manner

My fourth witness speaks to the mind more than the manner. In Dans la tête de Xi Jinping (available in English as Inside the Mind of Xi Jinping), the French journalist François Bougon argues that the collapse of the Soviet Union became the organizing trauma of Xi’s worldview. Xi’s governing question, in Bougon’s telling, is almost clinical: how to reform without collapsing? In a January 2013 speech, Xi reportedly asked why the mighty Communist Party of the Soviet Union “dispersed like a flock of sparrows,” and answered that no one had been “man enough” to resist ideological subversion. He famously vowed that would never be the CCP’s fate. Those who expected a Chinese Gorbachev, Bougon writes, got a Chinese Putin instead.

That’s a Thymos Trap biopic screened inside the Party supremo’s own head. The rigidity I’m pointing to from the outside, particularly Xi’s refusal to concede, perpetual hunt for enemies and suffocation of feedback, is not pathology but prophylaxis — preventive action driven by what Bruce Bueno de Mesquita and his co-authors call The Logic of Political Survival.

As Tanner Greer put in his review of Bougon’s book, Xi “knows who his enemies are,” and treats cultural change the way other leaders treat insurrection. A man who believes that any concession risks a USSR-style disintegration is building a concession-proof, criticism-proof political machine that’s probably growing increasingly blind to its own errors. The fear of collapse may one day become the cause of it.

The audience wants the performance

So far, we’ve focused on the recognition-absorbing men on the summit stage. But each strongman needs his crowd, and the crowd has its own twisted social psychology. In a January 2026 article in Psychology Today, leadership scholar Ronald Riggio addresses the question of why publics support such leaders even against their own interests.

The cognitive taproot is threat: when a group feels endangered, it closes ranks, and support flows to whoever seems most able to fight back. It’s the ancient in-group–out-group reflex, sharpened by the human tendency to frame the out-group’s transgressions in moral terms. Add tribal loyalty (“my party, right or wrong,” sustained by rationalization even as a leader turns tyrannical) and, above all, resentment — the sense that one’s rightful status has been unjustly stolen and handed to others — and you have a population primed to want exactly the domineering figure my essay describes.

This demand side of the Thymos Trap locks in the supply side. Fukuyama’s megalothymia isn’t just a hunger inside the leader; it’s a hunger he cultivates in the led, by naming their humiliation and promising reversal and redemption. Xi offers the Chinese nation the recovery of dignity stolen in the “century of humiliation”; Trump offers MAGA supporters the restoration of a respect they feel has been taken from them. The leader’s craving for recognition and the follower’s resentment at recognition denied are the same emotion pitched at two scales. It makes the strongman’s performance of strength devilishly hard to interrupt, because it’s not simply imposed on a recalcitrant populace, it’s demanded by an anxious crowd, whether Trump’s American electorate or Xi’s Red selectorate. That’s a further source of fragility. A leader who rules by mobilizing threat and resentment must continually conjure and magnify foes — foreign or domestic — long after prudence would counsel calm.

Two qualifiers

My thesis is intended to be taken impressionistically, not clinically, and I welcome civilized debate and counterargument, for which I’ll add two qualifiers.

First, before someone caricatures the argument, let’s be clear that in characterizing Xi as “ego-driven” I don’t mean that he’s an impulsive blunderer. He usually appears to be deliberate, patient, controlled, and — in Bougon’s reading — largely sincere in his Communist worldview, rather than cynical. That’s not a hole in the argument — it is my argument. A disciplined true believer who’s convinced that concession invites collapse is more likely, not less, to build the calcified, feedback-starved Party-state system I describe. Xi may be calculating, but the terror he instills in the cadres around him leads them to respond impulsively, and sometimes to overcrank by, perhaps, grabbing hostages in response to the arrest of a Chinese telecom executive.

Immelman and Chen add a further useful corrective: they situate Xi’s narcissism not in the disordered range, but at an adaptive level. And they caution against applying a lurid “enforcing sadist” label. The system may be conditioned to behave even more ruthlessly than he intends — which is an analytical nuance, not an excuse for the “core” leader.

The second qualifier is Kritenbrink’s parting advice, which I also keep in mind: don’t overestimate what the personal chemistry between Trump and Xi can achieve. Whether planning policy or forecasting geopolitical trajectories, it’s still crucial to cooly calculate interests. That refines my point. The theatrical personalization of the relationship on display at summits is the vulnerability, not the remedy. A world in which stability depends on keeping two autocrats’ egos aligned is a world that’s sliding into a Thymos Trap in which too many leaders look destined to lose the mandate of heaven in catastrophic ways.

For the deeper dive — including discussion of ’s thymos, Stephen Kotkin’s “The Weakness of the Strongmen,” Gideon Rachman’s continuum, Ye Xue’s cultural honour vs face, and why Trump sits at the opposite end of all this from Xi — see the full article in The Diplomat.

For more on managing and interpreting leader-level diplomacy with the PRC, see my Foreign Affairs essay, “Trump’s China Trap: Why Xi Keeps Winning the Summitry Game” and series of Strategic Narratives posts explaining how other heads of state and government have responded with various forms of geopolitical hedging. Read Part 1, Part 2, Part 3, and Part 4. More to come after the Trump-Xi Washington summit.

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Toronto this week is the site of Canada’s Investment Summit, where Prime Minister Mark Carney and all 13 Premiers are showcasing more than 160 projects to CEOs and senior executives from 11 countries. Carney has set the goal of attracting $1 trillion in total investment to Canada over the next five years, and the Summit is a major part of that ambition. Notably, representatives of three large finance companies from China will be among those in attendance:

1. Guo Xiangjun, Executive Vice President & Chief Strategy Officer, Deputy Chief Investment Officer, China Investment Corporation (CIC) 中国投资有限

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2. Chen Liang, Chairman, China International Capital Corporation (CICC) 中国国际金融股份

3. Howard Lee, Deputy Chief Executive, Hong Kong Monetary Authority (HKMA) 香港金融管理局

Why is the PRC sending these financiers? Here are some answers.

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What are these state financial institutions in Toronto to do?

The three have different jobs. Together they make up a complete entry team.

CIC (中投 | Zhōng tóu) carries the wallet. It’s a sovereign wealth fund managing more than US$1.3 trillion with the Ministry of Finance as its sole shareholder. Zongyuan Zoe Liu of the Council on Foreign Relations calls vehicles built this way “sovereign leveraged funds.” CIC’s first overseas office, in Toronto, closed during the 2015 commodity rout. It’s coming to Toronto to scout placements: probably quiet minority stakes in infrastructure and energy, or a joint fund with Canadian pension funds or Brookfield.

CICC (中金 | Zhōng jīn) brokers the deals. As a Party-state-controlled investment bank, it provides financial services to a range of clients: a Chinese company investing in Canada, a project needing a Chinese buyer, or an electric-vehicle joint venture needing financing. CICC comes to Canada to scout business and build relationships.

HKMA lays the pipes. It manages Hong Kong’s Exchange Fund of roughly US$570 billion and is a major investor in its own right. But its role as a channel matters more for determining how money moves between China and Canada, where it settles and where the bonds get issued. Hong Kong wants to be that waypoint, and a “Hong Kong” badge looks less sensitive than a “Beijing” one.

Why has China sent these financial players, and not others?

Lower toxicity. These three corporations appear cleaner than others that might seem like more plausible investors. That is to say, they are not facing any sanctions from Western countries, and they have “acquaintances” to vouch for them. Zoe Liu told the U.S.-China Economic and Security Review Commission in 2023 that as foreign animosity toward Chinese state-backed investment has risen, CIC has “increasingly turned to joint ventures with influential institutional investors in host countries to shelter its assets from undue scrutiny by foreign governments or to sidestep administrative blocks on investing.”

Commercial banks such as ICBC and Bank of China, by contrast, have violated all sorts of money laundering laws in Canada. That together with their dual role as Party-state policy instruments staffed with plenty of Communist Party members, makes them political landmines and fodder for political opposition.

The formal government policy banks such as China Development Bank and China EximBank are lenders, not investors. Plus they’re tied in Western opinion to the Belt and Road Initiative’s geopolitical agenda and tarred with allegations of creating “debt traps.” Private and tech capital are perhaps even more radioactive. Tencent went onto the Pentagon’s “Chinese military companies” list in January 2025; Alibaba, Baidu and BYD followed in June 2026.

Has this lineup gone to invest in other countries?

The three have converged on only one region before: the Gulf, in 2024–2025. That record is the closest thing to a dress rehearsal for what’s happening in Toronto this week. In April 2024, in Riyadh, CIC anchored Investcorp’s US$1 billion Golden Horizon platform; that October, the HKMA and Saudi Arabia’s Public Investment Fund signed an MoU to anchor a US$1 billion fund; in May 2025, CICC opened a branch in Dubai’s DIFC. Nearly two years on, the HKMA–PIF fund hasn’t formally launched, and has no disclosed investments. Golden Horizon closed in October 2025 at US$750 million, a quarter short of target. Sign big but land slow: that’s classic China.

That’s the finance bucket. Over the same window, by contrast, the industrial channel delivered. In July 2024, the Saudi Arabia’s Public Investment Fund’s Renewable Energy Localization Company took 40% of two Chinese-partnered Saudi ventures: a US$985 million, 10 GW solar cell and module plant with JinkoSolar, and a US$2.08 billion, 20 GW ingot and wafer plant with TCL Zhonghuan’s Lumetech.

The leg that landed ran on Gulf money buying Chinese industry onto Gulf soil, the reverse of what the trio offers Canada. If the Gulf is the template, the tell for Canadians would be a Chinese-technology plant with Canadian provincial money in it, ahead of any CIC fund close.

What can we learn from other countries’ experiences with PRC capital?

The UK’s “golden era” with China (2011–2016, overlapping with the early part of Mark Carney’s term as Bank of England governor) is the most instructive precedent for what’s underway in Toronto. Britain courted Chinese sovereign capital harder than any G7 peer. CIC bought 8.68% of Thames Water’s parent and 10% of Heathrow’s parent in 2012, three years before the 2015 “golden era.” The financial leg split: Heathrow—still 10% CIC’s—is the surviving half; Thames Water’s shareholders, CIC included, refused further equity in 2024, calling the business “uninvestible,” and wrote their stakes to zero. The utility now awaits a creditor-led rescue that will extinguish existing equity entirely. Politically, the investments bought no durable goodwill: the UK banned Huawei from 5G in 2020 after US sanctions cut Huawei’s chip supply, and relations froze anyway. “Chinese state capital owns your tap water” became a standing target in the press and Parliament.

Italy adds the other half of the lesson. From 2015–2023, there was a flurry of activity. The Silk Road Fund took a quarter of ChemChina’s vehicle for its US$7.7 billion purchase of Pirelli. It was agreed upon in 2015 and completed in 2017. Zoe Liu’s reading is that the deal turned Italian business figures, Pirelli’s own chief executive among them, into lobbyists for a pro-Beijing turn in Rome, which “may have influenced” Giuseppe Conte’s March 2019 signing of a preliminary Belt and Road accord—the only G7 signature. Both outcomes were then reversed. In June 2023, Giorgia Meloni’s government limited Chinese control of Pirelli under golden-power rules, barring Sinochem (37%) from naming the chief executive while the Silk Road Fund’s 9% went untouched until a May 2024 sale. In December 2023, Rome told Beijing it would not renew the Belt and Road memorandum. Italy is the one place where Chinese money is credited with a policy turn, but that turn lasted exactly one government.

Is CIC coming for financial investment, or to invest in commodities through financial means?

Neither. It’s coming for a third thing: buying the income rights of real assets as a financial investor, without touching control of the resources. To start with, pure financial investment (stocks and bonds, Canadian-dollar allocation, diversification) is a sovereign fund’s daily routine. But that doesn’t require attending a Toronto summit, so it doesn’t explain the visit. “Controlling commodities through finance” was the 2009 playbook: buying into mines, locking up resources, etc.

Canadian law has sealed that road; even Zijin’s 15% non-controlling placement in Solaris died in national-security review in 2024. But equity was never the only lever: the playbook also runs on long-term offtake contracts and state trading and storage platforms, which the Investment Canada Act never sees, and joint ventures pitched below control, which it can reach. A clean record is not a shut channel.

CIC is coming for a hybrid of these two approaches. Mark Carney’s selling stakes in pipelines, ports, grids, clean power, and LNG. Those are “alternatives,” which account for 48.5% of CIC’s overseas portfolio of infrastructure, real estate, private equity, private credit, hedge funds and commodities. China’s entry would be minority project stakes, fund positions, or a joint platform with Canadian pension funds: those would include decades of future cash flow with no disposal rights over minerals.

There’s precedent for this approach from another Chinese sovereign fund. In June 2021, the Silk Road Fund—65% owned by China’s State Administration of Foreign Exchange (SAFE)—joined the consortium, paying US$12.4 billion for 49% of Aramco Oil Pipelines, a Saudi Aramco subsidiary whose asset is 25 years of transport tariffs on Aramco’s crude network. That shape is “safe” for both sides. Ottawa gets passive money that triggers no filing. CIC, in turn, gets long-duration, inflation-resistant assets away from its US concentration.

China’s real resource-supply security (procurement of canola, potash, energy) runs through trade—the January Canada-China agreement cut the canola tariffs; potash and energy were never tariffed. CIC comes as a paying landlord collecting rent. The goods China wants to move are on a separate trade track. But a rupture in relations could link the two: if Ottawa restricts Chinese investment, the easy retaliation target would be the trade track. Canola first, as in 2019. Or Australia’s barley, wine, coal and lobster, as happened in 2020. Beijing’s new outbound investment regulation supplies a domestic legal channel for it.

Why Canada? Why now?

Because the door is open, and the American door just slammed. US-Canada trade talks collapsed Aug. 21. Washington imposed 50% tariffs on some US$20 billion of Canadian goods the next day and set 50% tariffs on all Canadian autos, parts, and steel from Jan. 1, 2027. The proclamations exempt energy, potash and critical minerals. The slam is on cars, alcohol and dairy. Ottawa’s July “diversification” is now a necessity. Roughly 75% of Canadian exports went to the United States in 2024, against about 4% to China. The China channel starts at roughly 1/20th of Canada’s standing exposure to the American market, which is why the impulse is politically fragile. January’s Canada-China Economic and Trade Cooperation Roadmap says the Canadian side “welcomes Chinese investments in Canada in areas such as energy, agriculture, consumer products, and other sectors.”

For Beijing, the calculation has four lines. Chinese capital is leaving home at record scale: China’s own balance of payments shows a non-reserve financial account deficit of US$820 billion in 2025. That capital cannot go anywhere too poor. Canada offers G7-grade assets in one of the few markets deep enough to absorb it.

“I suspect this has as much to do with taking advantage of Trump’s foolishness as anything else,” one leading expert on PRC finance told us. “It is especially interesting that the CIC is coming. They have strict (informal) limits on where they can invest, which generally precludes advanced economies like Canada, but by October every year they run into the same problem of having maxed out on most of their limits for high-quality investment, and so scramble to find safe places to invest. Perhaps they are hoping that if relations between the US and Canada get bad enough, they can increase their investments in Canada.”

Zoe Liu names a further driver: China invests globally “not because of its excess capital but to serve domestic needs.” A weak Chinese year doesn’t shrink the money on offer in Toronto. In a new report, “The Banks Behind the China Shock”, Rhodium Group finds 58% of December 2025’s new loans priced at or below the 3% Loan Prime Rate and expects China’s banks to “limp along longer than most global industries can withstand.”

What Canada has for sale—energy, minerals, potash, canola—is what China’s strategy calls for securing long-term. A passive shareholder gets relationships and information; getting priority requires an offtake clause.

Money is a diplomatic tool: once investments materialize, as Canadian projects, provinces and unions feed on Chinese funding, expect growing domestic resistance to any future re-hardening of Canada’s China policy.

Financially, Canada is a small substitute for the United States. Strategically, investment does double duty as a lock on the political thaw with Ottawa plus a wedge to complicate relations with Washington. Liu treats that wedge as deliberate. “Beijing has noticed these fractures and is working methodically to widen them,” she observed in December 2025, eight months before the August rupture, citing Canada’s October 2025 pledge to double its exports to countries other than the United States as an example of an ally de-risking from Washington.

What signal does this send about Chinese investment in Canada?

A fairly clear one. There are three layers:

1. China wants back into Canada, but is entering in a different posture. It has sent “financial investors.” The lineup itself is the message: quiet minority stakes. The playbook from 2009–2012 was control of mines and oil fields. Ottawa closed that lane for the oil sands in 2012 and for critical minerals with a screening policy in 2022. CIC’s own Canadian book of those years, 17.2% of Teck, was already passive.

Putting money in without formal power is the Party-state’s house style: informal CCP direction supplies the control. Abroad, the pattern travels, with formal control only where deal terms grant it.

2. This is state behaviour. CIC and CICC sit on one chain of command: CIC owns Central Huijin, which in turn controls CICC by holding roughly 40% of its shares—with about 24% to be held directly once the Dongxing and Cinda absorption closes. The chain also reaches the Chinese banks that are absent from the summit: through the Ministry of Finance, Huijin and other state companies, the Party-state is the majority shareholder of the Big Six, which in turn hold 44% of China’s commercial-bank assets. The HKMA is on no such chain; it answers to Hong Kong’s Financial Secretary, and the CCP’s hold on it is political.

Did Beijing draw up the attendee list, or did the hosts (the PM with CPP Investments and PSP Investments) select and invite them, and then Beijing cleared their attendance? The distinction is invisible from outside; but if you’re attending the summit, check the seniority of the delegates. Chairmen signal a state assignment; representative-office heads indicate routine business. Either way, investment in Canada is a diplomatic project for cementing the thaw, and who didn’t come (the banks, the tech capital, the policy banks) is the admission: those brands are radioactive in the West.

3. Canada is a test. If PRC capital can become “acceptable” again inside America’s closest ally, the precedent matters for the whole West. The objective may be re-establishing that “Chinese money is normal money” in a G7 country.

How should we assess the impact these investments could have on Canada?

The likely impact of the money is small, but the impact of what it represents is large. By the Gulf precedent, expect one or two joint funds or MoUs. The first will close in the hundreds of millions against a trillion-dollar target. The value is symbolic, showing hesitant Asian and Gulf money that “Canada is open for business.”

Indeed, the domestic political impact is the main battlefield and is both larger and faster than the money. Recipient projects, provinces and unions become constituencies of the China engagement camp as money lands. The partisan fight needs only a headline. Pierre Poilievre and Doug Ford can use Chinese investment as a target (the “spy cars” rhetoric is ready-made). If that happens, the cross-party consensus for toughness formed in 2022 dissolves a little at a time, and China policy morphs from the consensus issue it should be into a partisan one. For example, Spain’s regional governments (Catalonia, Galicia, Aragón) packaged idle plants, employment pressure and port logistics for Chinese manufacturers, ahead of and independent of the European Union’s rules and preferences. If that pattern repeats in Canada, expect softening to appear provincially (ahoy, BC Ferries) before it does federally in incentives and pressure on Ottawa; screening itself stays federal.

In terms of its impact on US relations, the cost may exceed the value of the money. Washington’s stated grievance is Canada serving as a conduit for Chinese goods and cars. Rhodium’s verdict that China’s financial distortions are “at the root of today’s global trade imbalances” gives economic-security hawks a finance case too.

A passive stake is not on that list yet, and the statutory trip-wire is specific: a project 25% owned by one Chinese entity, or with a director it appoints, is a “prohibited foreign entity” whose American customers risk their clean-energy credits. A 10% stake with no board seat trips nothing. Set “how much Washington will fine” against “how much China gave”—that account may well net out negative.

Finally, the security impact is low at this stage but contingent on holding the line at the next phase. Passive equity can’t steal secrets or cut off supply. What matters is the integration it opens: EV joint-venture plants, software and data, supply-chain embedding (Industry Minister Mélanie Joly’s four conditions are the frontline), and the quieter elite capture entities like CICC do best on Bay Street.

China’s own security reviews have shifted from examining control rights to influence, treating a minority stake as reviewable when it carries board seats, veto rights, information access or commercial priority, and looking through a Hong Kong or Cayman Islands registration to the substantive owner. Ottawa can apply that standard too. Liu writes that Beijing’s opacity and its “unhelpful tendency to blur boundaries between state and commercial actors” leave the fears, even where overstated, “plausible enough to call into question China’s overseas investments on national security grounds”; the credibility deficit is “cumulative and largely self-inflicted.” Nothing in a passive deal structure lowers it.

What should we watch going forward?

We should track five indicators:

1. The form of the money. Is it Limited Partner-style and passive, or acquiring governance rights short of control (board seats, veto rights, information access, offtake, technology licensing) that a pure ownership test scores as clean?

2. The sectors where China invests. Some infrastructure and energy projects are tolerable; critical minerals, ports, or grid-core assets are an alarm.

3. Signs of institutional softening. A revised SOE policy statement from Innovation, Science and Economic Development Canada (ISED), which would amount to an investment whitelist in legal form. Reviews closed on undertakings and conditions. Perhaps we’ll see a middle state between softening and holding.

4. The American reaction. Is the US-Mexico track’s “free-riding from non-parties” language reaching Canada, or does Donald Trump execute his 100% tariff threat?

5. The trade channel. PRC economic coercion against Canada through canola, potash, or agricultural approvals is the earliest signal the investment relationship has turned.

Indicator #1 has a prior question: Whose money is in the vehicle? Zoe Liu puts “follow the money” first among her screening fixes. That requires a forensic audit of the ultimate investor during the review, because Party-state capital typically arrives through an offshore vehicle or a joint fund. She writes about American and European screening. The Canadian version is asking who the limited partners are behind a pension fund or Brookfield-branded platform.

If any of the five indicators turns red, increase the whole risk assessment.

For a deeper dive on Chinese and Indo-Pacific investment in Canada, see The China Institute at the University of Alberta’s China-Canada Investment Tracker and the APFC’s Investment Monitor Report: 2025 Year in Review.

Coming up next: Chairman Xi Jinping’s impending visit to Washington. Thanks for reading.

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September’s here, bringing another Trump-Xi encounter onto the agenda. The White House has confirmed China’s chairman will meet again with America’s president this month, with Xi Jinping expected to arrive in Washington Sep. 23 and depart Sep. 25. Between now and then, Xi has multiple foreign trips scheduled to build momentum. Prediction markets are wondering, “will Trump and Xi announce a trade deal, cut tariffs, make progress on artificial intelligence, or discuss semiconductor controls? Will they say something about Taiwan, or at least strike a conciliatory tone?” There are even rumours the CCP general secretary might stop in Ottawa afterward, presumably to deploy his Mona Lisa smile to drive the wedge between Canada and the US even deeper and present China as the more predictable power.

As we ponder such questions, it’s timely to drink the tea steeped from the leavings of their last encounter, in Beijing in May. The following is an edited transcript of my conversation on that topic with Canadian Senator and broadcast journalist Pamela Wallin on her “No Nonsense” podcast. You can watch the video via the link above or listen to it here.

Why everyone is going to Beijing

Pamela Wallin (PW): Today we continue our look at what really happened at the Trump-Xi summit and what it means for Canada, which seems to be trying to do business with both sides — can we have our cake and eat it too? That’s one question I’ll put to Michael Kovrig. We want his take on what the summit was designed to accomplish, if anything. Was it a real reset, or just a way to steady things while other issues get sorted out? A lot of people see this as part of a broader parade of world leaders to Beijing — Trump, Mark Carney, European leaders, the Australians, and now Russia. What’s going on? Why now?

Michael Kovrig (MK): This is exactly what I’ve been researching lately: leader-level diplomacy. Since Trump’s inauguration for his second term last year, we’ve seen an extraordinary parade of leaders going to China — roughly a dozen American allies, NATO members and EU members in the past year alone, out of about 36 total. We haven’t seen numbers like that since the 2016 G20 summit, and we’ll see another G20 in China later this year. That wave — as China itself has called it — has now crested with the U.S. president visiting, followed shortly afterward by Vladimir Putin. Many leaders from developing countries have been going too. China’s protocol officers must be working their feet off; it’s almost a parade every week now, and it’s always full of symbolism.

PW: Who gets to go to which rare or historic Chinese building, how much time is spent there — all of it has to be read into these meetings.

MK: That’s right, and I think you’ve put your finger on the key distinction: symbolism over substance. There’s a strategic reason for that on China’s part, because the substance most countries want would require fundamental policy and behavioural change by Beijing. The visiting leaders want the PRC to stop doing things — to change its economic model and industrial policy, which is inflicting a massive “China shock” on industrialized economies, hollowing out industries, creating large-scale unemployment, and eroding their capacity to build military equipment and maintain an industrial base. China is also engaged in extensive espionage, foreign interference, and efforts to extend its sphere of influence across the Western Pacific and East Asia, and it’s trying to become more influential in global governance by shaping the UN and other international bodies. These countries want to constrain that. What Xi Jinping is trying to do by inviting these leaders to Beijing — or accepting their requests for his officials to visit — is stall and mollify them with minor concessions. A little candy for the children coming trick-or-treating, so they can go home and tell voters they had a successful visit, without Beijing having to make any meaningful changes.

PW: That’s diplomacy by deception: they go through the list of things promised the last time Trump and Xi met, and with other countries too, and then simply don’t deliver. There’s no real change in the Chinese approach. This is still a pretty brutal regime, but it also needs to keep energy and resources flowing, deal with its faltering economy, and find markets.

MK: Exactly. U.S. Trade Representative Jamieson Greer said going into this summit that the United States has given up trying to get China to change its policies or make the Communist Party behave differently. Instead, Washington is focused on protecting itself — maintaining defence and deterrence, and preserving its own economic strength and capacity. You can debate whether the Trump administration’s policies are succeeding at that, but the shift itself is dramatic. For decades, the basic bet was that bringing China into the WTO and the liberal international order would gradually make it more open, democratic, and market-oriented — more like the West. Instead, China has been free-riding on that system and exploiting it in ways that have weakened the order itself, along with the United States and Western alliances. Now countries including Canada are having to erect protectionist trade barriers against Chinese overproduction and invest more heavily in their own industrial policies to compete with the billions of dollars in subsidies China puts behind its favoured industries. That’s a paradigm shift in how the world works.

China’s overcapacity and the EV risk

PW: You testified about this at a recent Commons committee. China produces so much of the world’s goods, needs markets for them, and doesn’t need much from us beyond things like oil and gas. But it also has a strategy for what it does to a market, and that should trouble us as we think about letting in more Chinese EVs. Walk me through your theory of “flooding the zone.”

MK: This isn’t just my personal assessment — it’s backed by extensive research from reputable organizations including Rhodium Group. I worked for that organization’s predecessor after finishing my master’s degree at Columbia University, and they’ve since done exceptionally detailed, meticulous research. Some of their recent reports focus on electric vehicles specifically, but more broadly they analyze China’s political economy and industrial system. Their conclusion: under Xi Jinping, China has redirected massive resources away from consumers and into more than a dozen strategic industries under its Made in China 2025 strategy — AI, EVs, batteries, biotech, pharmaceuticals, and others. That’s badly unbalancing China’s own economy and creating serious domestic problems, which forces it to export the excess capacity to keep the system going. But there’s also a strategic objective: to dominate the commanding heights of 21st-century technology and industry.

The problem for Canada, if you let Chinese EVs into the market, is that you’re forcing Canadian automakers to compete not just with foreign companies — you’re forcing them to compete against a Chinese state that has already shovelled more than C$300 billion in subsidies and other support into its EV sector alone. Canada’s economy is much smaller. Plug the two together directly and Canada gets pulled into the distortion. It’s like a spaceship flying next to a black hole: you get pulled into the gravity well, and China’s industrial system starts reshaping Canada’s own economy and industrial base. The risk is that Chinese EV makers enter in significant numbers, drive other automakers out of business, and eventually dominate the market. They come in cheap, seduce consumers with low prices, and once there’s dependency through dealer networks and parts supply, it becomes very hard to wind back the clock. We should learn from Huawei: it was cheaper than Ericsson, Nokia, or Nortel, so everyone said, “let’s bring in lots of Huawei.” Then it became far more expensive to realize it was a problem for economic dependency and national security — and to rip and replace its equipment.

PW: They also handed out a lot of free equipment to our intelligence and police services — which goes directly to the concern about these cars. They’re massive data-collecting spymobiles running around our streets, and that puts us at even greater risk. We have to keep saying clearly what we’re dealing with: the leadership of a country that has tried to undermine Canada’s democratic processes, kills its own citizens and others, distorts markets, and lies about its trade promises. This is not simply a great partner to be doing business with. And even if you don’t like Donald Trump, we can’t cut off our nose to spite our face here.

MK: Exactly. Canadians need to avoid getting locked into a false binary — either America is great and China is bad, or the reverse. Great powers operate differently from middle and small powers; they can abuse leverage and economic dependency. There are still fundamental differences between the Chinese Communist Party and the U.S. government, even under Trump — that’s a separate topic.

For Canadians, the safer play is diversification. That’s where I agree with the prime minister: we need to diversify our markets and partnerships so we’re not overly reliant on either the United States or China. And the reality is that China can’t substitute for the United States anyway — maybe on oil and some commodities, but not for most of the Canadian economy. China isn’t interested in buying what most Canadian manufacturing and services companies currently sell to the U.S. So we need other markets, particularly across the Indo-Pacific. Spreading trade and investment relationships more broadly reduces the risk of being too dependent on a great power that might abuse that dependence.

Canada between Washington and Beijing

PW: This is the recurring theme. Everyone understands Prime Minister Carney’s push to diversify — more trade with Europe, new markets, presenting Canada as an energy superpower. But we’re not yet able to get enough of that energy out of the ground or to market, so that’s a bit of a false promise right now. What’s harder to understand is how diversification became a willingness to downgrade the American relationship in favour of a “strategic partnership” with China. Those aren’t neutral words — they’re the words China wanted. Not a new trading partner or a renewed relationship, but a strategic partner. And we signed on to that, 100 percent.

MK: The big win for China in talking to Canada isn’t really economic — though of course the Chinese ambassador’s job is to open more avenues for investment and trade. The bigger prize is a narrative shift: getting a Western, G7 country to endorse China’s story of its own rise, that China is the reliable superpower while the United States is chaotic and in decline. Anything Beijing can get Mark Carney to say that supports that narrative, it will take. That’s what Canada needs to be careful about.

Geography may not be destiny, but the U.S. is still critically important for Canada. We have to manage the relationship as best we can and get as much out of it as possible, primarily by showing we’re an invaluable neighbour, ally, and partner through thick and thin. That doesn’t mean putting up with abuse or doing whatever Washington wants — it means demonstrating how indispensable we are to American security: supplying energy, critical minerals, advanced technology, and other support, while strengthening our own defence capacity to show we’re doing our part on North American security and NATO. The more Canada proves its indispensability, the less ground the Trump administration has to criticize it. That won’t make the relationship stop being difficult. But Canada still needs to restrict trade and investment with China to genuinely non-sensitive areas — not just cybersecurity or military technology, but anywhere dependence could become a vector for political influence or economic coercion.

Policing, finance and CCP influence

PW: A lot troubles people about the prime minister’s words and this agreement — including the understanding that there will be no public criticism of China, which means we may never know what was said behind closed doors. Two other issues stand out.

First, Canada signed a security agreement between the two countries’ police forces, and that deal remains secret despite pressure from civil society, academics, and the opposition. If Canadians’ privacy, security, and data may be at risk, we have a right to know what our government agreed to.

Second, there was a subsequent meeting — even attended by the Governor of the Bank of Canada — to discuss deeper financial ties. When you start talking about financial integration, digital IDs, and the like, it gets troubling. People are already uneasy about AI in general, and when they see their own government dealing with a questionable police organization and then moving into financial issues, it raises serious concerns. What’s your take on those two things?

MK: You’ve given me a lot to unpack — let me take it in three related channels.

The first is the RCMP’s renewed memorandum of understanding with China’s Ministry of Public Security. Unlike the other memoranda signed during Prime Minister Carney’s visit, this one hasn’t been disclosed, which immediately raises a red flag.

The Ministry of Public Security engages in abuse and repression inside China, but it has also used programs like Fox Hunt and Skynet to pursue Chinese citizens abroad — including in Canada — whom Beijing accuses of corruption. Some may genuinely have done wrong, but we can’t be sure, because China is so opaque. We can’t be sure they’d be treated in ways that respect their human rights, and we can’t be sure the campaign isn’t being used for political persecution against critics or enemies of the Communist Party — or as a form of transnational repression meant to intimidate members of the Chinese diaspora, including Canadian citizens and residents of Chinese origin — to instill the fear that the Party can reach them anywhere.

So any cooperation between the RCMP and the Ministry of Public Security needs real safeguards against abuse. China has used policing and internal-security relationships globally as vectors for influence — if you can get senior police or domestic-security officials aligned with your interests, that becomes a channel of political influence. I’m not suggesting that could happen quickly or directly in Canada, but it’s certainly something China has tried elsewhere.

PW: There are recent reports suggesting there are hundreds of China-friendly or China-linked organizations in Canada engaged in these activities. This isn’t conspiracy theory — some of it comes from CSIS and our own agencies. So I’m puzzled: knowing all this about how Beijing behaves, why would we enter into this kind of agreement at all, and then keep it secret?

MK: That gets to the second issue: the discussions when Minister Champagne went to China. That visit got far less attention than the prime minister’s but may have been more consequential. It essentially gave political top-cover to Canadian services companies — especially financial firms — with major interests in China: large insurance, banking, finance, manufacturing, and services companies with investments, joint ventures, or significant revenues tied to the country. I’m not saying those companies shouldn’t do business there; China is a large market. But the risk is that the Chinese Communist Party can use those business interests to create reciprocity traps. It doesn’t require bribery or direct elite capture — it simply aligns corporate interests with Beijing’s. Those companies then have reason not to rock the boat, and may lobby Ottawa against measures China opposes. That makes the government less willing to criticize Beijing on Taiwan, human rights, coercion, foreign interference, or transnational repression, because companies fear retaliation. You get a chill and a self-censorship that Canada would never accept from Russia, Iran, or North Korea — even though China enables all three.

PW: We say all sorts of things about other leaders, but when it comes to China, there’s silence.

MK: Exactly. China has made that very clear. Xi Jinping apparently told Prime Minister Carney directly that if Canada has a problem with China, it should raise it with him privately rather than criticize him publicly. Most of us would prefer criticism handled that way — the problem is what happens when you raise it repeatedly and nothing changes? Take China’s support for Putin’s invasion of Ukraine: Putin is visiting his good friend Xi this week, even after leaders and senior officials from France, Spain, Germany, and elsewhere have pressed Xi to curtail China’s support for Russia — especially sales of the dual-use goods fuelling Russia’s war machine. Xi has made abundantly clear he has no intention of changing course.

PW: Right.

MK: Once he says no, what are you supposed to do if you also can’t speak out publicly? What leverage do you have left? You can impose sanctions and costs on China for bad behaviour, but what keeps many European countries and others from doing that is fear of reprisal from Beijing.

PW: And now we’re putting ourselves in that same position.

MK: Exactly. Which brings us back to the Trump-Xi meeting. In the past, countries like Canada and many European states would have been more willing to stand up to bad behaviour by the Chinese Communist Party. Now everyone’s stepping back because they’re unsure where Trump will position the United States. It’s like a peloton in the Tour de France: the U.S. used to lead it, and others were willing to take some heat from China because they knew Washington had their backs — they could tuck in behind and let it take the windburn. That’s gone now. Countries are afraid Trump will leave them exposed to the full brunt of China’s ire. Japan is a classic example.

PW: Yes, exactly.

MK: Last fall, Japan’s Prime Minister Takaichi Sanae said in parliament that a Chinese attack on Taiwan would pose an existential threat to Japan and could invoke its right to self-defence — anyone looking at a map can see why. China responded with fury, piling economic, cultural, and diplomatic coercion onto Japan to punish it and force Takaichi to retract the statement. Has any G7 country or major Japanese ally spoken out? Has any leader in this parade of visits to Beijing called on China to stop bullying Japan? Nobody publicly.

Trump, Xi and the long game

PW: This is a question about the long game, and you know it intimately. China plays the long game — it doesn’t have to worry about midterms or next year’s election, because it doesn’t go through any of that complicated democratic stuff. Its message is: we are the rising power, America is the fading power, and because we play the long game, we can wait you out. Look at all these supplicants coming to our door — we’re on the rise, you’re on the wane. That’s worked on a lot of people. But then China runs up against Donald Trump, who is completely transactional and says things like, okay, I’ll put Taiwan on the table, what do I get for it? That leaves Beijing stunned, because the position is so obvious, so transparent, so short-term. How did that affect the summit? I hate talking in “winners and losers,” but is the balance shifting?

MK: It was a fairly boring summit — and given the risks in play right now, boring is good. Now that we’ve had a little time for the tea leaves to steep, we can see what came out of it. There were two days of immaculate vibes: a major Chinese rhetorical win, a more disciplined Trump in the room than many analysts feared, and then a Fox News interview afterward that gave Beijing exactly the post-summit messaging it wanted on Taiwan. The atmospherics were everything Beijing planned: a 21-gun salute, the Temple of Heaven, state banquets, Xi taking Trump inside Zhongnanhai.

Trump flattered Xi far more than Xi flattered Trump — though that doesn’t really register with Xi. What matters to him is the fact of the U.S. president coming to visit. Even the official U.S. visuals from Zhongnanhai had Xi dominating the frame, with Trump slightly out of focus in the background.

So, the optics favoured China. But — and I’ve made this point on Substack and in Foreign Affairs — when you go to China, you’re on their stage. They manage the choreography and try to write the script, and get you to endorse it. Some have said a leader can’t go to China and refuse the protocol — that’s true, you have to respect it. But you don’t have to recite the script. What’s in your control is what you say before you go, what you do before you go, what you say while you’re there, what language you agree to in a joint statement, and what you say afterward.

PW: And Trump actually did a pretty good job in China?

MK: Based on the readouts and his own comments on Air Force One flying back, Xi pressed him hard on the degree of his support for Taiwan and spent a lot of time trying to convey how important it is to him. Trump now has a track record of deferring to autocrats over democratically-elected leaders on these issues. That said, with Trump and global summitry, there’s some comfort in the fact that it could have been a lot worse. What matters now is what the administration does before the next meeting, scheduled for September 24 — plus possibly two international meetings, so there could be three more within a year, potentially including Xi visiting the United States twice, which would be unprecedented. This isn’t a movie; it’s a miniseries. Both sides wanted stability, and both sides got it.

“Constructive strategic stability”

PW: It did calm things down. But one interesting signal — and you’re better at reading the tea leaves — was Xi offering Trump the “partners, not rivals” frame. That seemed important: China wants this too. It doesn’t need war, it needs a cold peace.

MK: That sounds good on the surface — nobody wants an argument that spirals into World War Three, and we can all agree world peace is a good thing. But the problem is that while there wasn’t much substance in terms of business deals, that’s the wrong scorecard. Counting how many Boeings Trump sold isn’t how to judge a meeting like this.

The real question is positioning — not just optics, but the strategic narrative each side is trying to establish. On that front, Xi unveiled what he called a new positioning for U.S.-China relations: “constructive strategic stability.” That may be the most consequential rhetorical outcome of the visit. Foreign Minister Wang Yi has repeated it in subsequent briefings, and Chinese propaganda has kept reiterating it since.

Xi told Trump they’d agreed on a new framework with four pillars: a positive stability with cooperation as the mainstay, a sound stability with moderate competition, a constant stability with manageable differences, and an enduring stability with promises of peace — a classic Chinese rhetorical device, signalling that this formulation is now meant to be treated as authoritative and repeated. Wang Yi then described it as a political consensus between the two leaders. That’s a classic tactic: put a phrase out there, claim the other side agreed to it, and keep repeating the claim until everyone’s too tired to deny it.

The White House readout didn’t mention the framework, though Trump later seemed to accept part of the language around strategic stability, fairness, and reciprocity. The challenge is that China is trying to create a framework in which everyone pretends the relationship is stable, while Beijing keeps advancing a strategy that harms and weakens Western democracies and accelerates its own rise. It doesn’t change the policies these leaders are supposedly going to China to challenge — instead, it lets Xi define what counts as “strategic stability.”

Then, if the U.S. or its allies do something Beijing dislikes, China can say they’re the ones undermining stability and crossing the line.

PW: I’m looking at this as Trump going full America First — focused on North America and the Americas, pulling back from international organizations or using them transactionally. Even on defence, in the last 24 hours there was another message to Canada: “you’re not carrying your weight, so this defence board isn’t going to carry on.” Trump seems to be doing his own thing, while Xi is walking all these leaders through Beijing to build up the idea that China is the next superpower — the message being, if America doesn’t care about these countries, China will take them. But then the Europeans go, and they’re already angry with China on several issues.

So, what’s Xi’s long game here? Is he building a group of allies, or is this more about strategic positioning on specific goods and services?

MK: I don’t buy the cliché that China thinks in 100- or 1,000-year timelines because of some imperial cycle. Chinese leadership mixes long-term strategy with impulsive, sometimes rash responses to events. But it’s fair to say: the Chinese Communist Party literally has five-year plans; Donald Trump has news cycles.

Xi said “constructive strategic stability” would guide U.S.-China relations for the next three years and beyond — not an accidental timeline. It covers the rest of Trump’s term and sets a marker for whatever comes after. The goal is to extend this period of stability and buy China time and space to develop.

In practice, that means Beijing sitting on Nvidia H20 chip licences while it develops domestic alternatives, deepening ties with Russia and Iran so Western pressure becomes less effective, slow-walking rare earth export licences, and embedding “strategic stability” language into the relationship so that any future U.S. administration that pushes back can be accused of breaking a framework Trump himself endorsed.

This matters for Canada because the constraints China can impose on the United States apply even more strongly to middle and smaller powers. The U.S.-China relationship sets the tone; Canada can try to manage its own China policy, but those dynamics still limit what’s possible. So this is a calculated stalling tactic by both Washington and Beijing as they strengthen themselves for an ongoing strategic rivalry.

It’s not de-escalation — it’s a pause to reload.

Iran and Taiwan

PW: Exactly. Trump came back from the summit, and already this week you’re hearing the “TACO” line again — Trump Always Chickens Out — because he’d been threatening to go after Iran. They said they didn’t discuss it, but of course they did; apparently Xi said Iran shouldn’t have a nuclear weapon, so there were some signals there. Do you think they reached any understanding on Iran at that meeting?

MK: Nothing concrete, and the gap between Trump’s account and Beijing’s readout is the story. According to what Trump told Fox News, Xi personally pledged China wouldn’t supply Iran with military equipment, and said, “If I can be of any help at all, I would like to be of help.” The White House readout says the two agreed Hormuz must remain open, and that Xi expressed interest in buying more American oil. The upside for Canada is that China’s experience in the Persian Gulf makes it more interested in diversifying its energy sources — so if Canada can actually get more oil and gas to Pacific tidewater, I’m sure the Chinese would be buyers.

PW: That’s the question.

MK: It’s positive, as long as Canada doesn’t become too dependent on China as a buyer and hand Beijing leverage. Putin is also in China trying to get Beijing to finally close the Power of Siberia 2 pipeline deal, which would send vast quantities of Russian gas to China after Russia lost much of its European market — making Russia increasingly dependent on China.

But back to Iran: the Chinese readout doesn’t even mention it by name. China’s role is described only as promoting peace talks. No pledge on weapons, no commitment on Hormuz.

PW: And on the weapons issue — if China sends the parts and Iran puts them together, then technically you’re not sending a weapon, you’re just sending every piece needed to build one.

I’m also curious about Taiwan. My read — and I think others share it — is that Trump put Taiwan on the table as a bargaining chip. So what does that mean? Does China take that to mean it has to make changes on trade, or on Iran, or concessions elsewhere? Because, as Xi said, Taiwan is the most important issue for Beijing, and Trump put it on the table.

MK: Xi raised Taiwan, as you’d expect in any such meeting. Four things happened on it, roughly in this order: the first was bad for Taipei, the second was better than feared, the third upended the second, and the fourth is potentially explosive.

First, Xi warned the U.S. in stark terms that Taiwan is the most important issue, and said that if things don’t go Beijing’s way, it will become an extremely dangerous situation — Taiwan independence and peace across the Taiwan Strait are mutually exclusive, like fire and water. That’s expected. But the potential basis for strategic balance is this: Taiwan won’t declare independence, and the PRC won’t try to change the status quo across the Strait by force.

PW: We tried that in Hong Kong — it didn’t work out so well.

MK: That’s right. What that leaves China doing is salami-slicing. I think Beijing’s game is to avoid a blockade or full military assault on Taiwan, because that would be immensely costly. But my assessment is that, strategically — not in the next couple of years, but within five, and certainly within ten — Xi wants to make something happen on Taiwan one way or another. That means building the military capability to do it and using that capability as a tool of pressure and coercion to get Taiwan to capitulate peacefully.

In the bilateral itself, Trump held the line better than expected. He said the only person who knows what the U.S. will do on Taiwan is him, which maintains strategic ambiguity. Secretary of State Rubio publicly said U.S.-Taiwan policy is unchanged, and the U.S. readout didn’t mention Taiwan at all. So that went pretty well — Trump basically sidestepped the biggest trap Xi was trying to lay for him.

PW: Trump was also trying to get Taiwanese chipmakers to set up shop in the United States, and they seem willing to do that to some extent.

MK: First, for economic reasons, those factories aren’t as cost-effective as the ones in Taiwan, so the companies have only limited interest. Second, Taiwan’s chip industry matters to everyone — most Canadians’ devices likely have Taiwanese chips in them, so we’re dependent on that supply too. TSMC, Taiwan’s leading chip producer, is what Taiwanese officials call their “silicon shield.” If access to that supply were cut off, or destroyed, it would be catastrophic for the global economy. We all have an interest in preventing that, quite apart from caring about the people of Taiwan, which we should.

For Trump to then say in his Fox News interview that the $14 billion arms package is a good negotiating chip with China, and that he’s holding it in reserve, is risky. He shouldn’t be negotiating that with the PRC in the first place.

PW: Yeah, they shouldn’t get a veto.

MK: And fourth — this is the part that complicates the rest — Trump said on the plane home that he’d call Taiwan’s President William Lai to consult on the package. No sitting U.S. president has spoken with a Taiwanese counterpart since 1979. I think that was probably an offhand remark, and what he likely meant is that the U.S. government will communicate with Taipei on the issue. What should happen now is clear: there needs to be both private and public U.S. reassurance to Taipei that policy hasn’t changed, and that arms shipments will continue.

What all of this means for Canada

PW: I want to end by bringing this back to where we started: how Canada has positioned itself. We could talk for four hours, but this goes to the “can we have our cake and eat it too” question. There’s the break with the U.S. relationship, the Davos speech, Carney going to Europe and saying Europe will be the base from which the new world order springs, then Canada’s strategic partnership with China — and then, last week, the prime minister’s odd comment that he’s prepared to deepen the relationship with the United States. Is there a theory behind all these mixed messages? Have we gone too far in criticizing the Americans to put that piece of Humpty Dumpty back together? Where does that leave us?

MK: First, we have to differentiate between the American people and the Trump administration.

PW: For sure.

MK: Just as I’d always differentiate between the Chinese Communist Party and the people of China, we should differentiate between the American people and the Trump administration. I’m not equating the two governments — they function very differently.

But in both cases, Canadians need to remember our problems are with governments. I was just in the United States, and almost everyone I spoke to made clear they don’t share Trump’s views about Canada; many were frankly embarrassed by them.

I was also at a Canadian Chamber of Commerce conference in Ottawa, where the view from business was that the Canada-U.S. commercial relationship — one of the largest trade and investment relationships in the world — remains the ballast of the broader relationship.

So: keep calm and diversify. Manage the administration, find other anchors inside the United States, work with people who want a more reasonable relationship. But Canadians also need to understand some things have fundamentally changed. Part of that is Trump’s personality and his transactional, undemocratic approach to governance. But there’s also a wider strategic shift: the United States sees China, and to a lesser extent Russia, as genuine threats to American interests globally — which is why many policies that started under Trump continued under Biden.

Canadians should lean into that reality rather than pretend it isn’t there. Canada doesn’t have to agree with every U.S. policy or statement, but it does need to demonstrate solidity, reliability, and consistency. I think the prime minister is trying to walk a fine line: showing Canada has options and isn’t totally dependent on the United States, while making clear Canada wants a good relationship and a good deal, within limits.

PW: I agree with that. It just seems, from where I sit, unnecessarily provocative on many days. We know what people in Canada think about Trump, and even what a lot of Americans think of him, so there’s an easy political hit in saying something rude about him here. But then we talk about a strategic partnership with China, flirt with ideas like joining the EU — not really, but at least polling it — and promise countries things we can’t yet deliver because we can’t get our own house in order domestically. In the end, whether by design or by default, the relationship with the United States will still be Canada’s most important economic relationship.

MK: You have vastly more experience than I do analyzing Canadian politics, so I’ll defer to you there. But I basically agree. A few things are driving the government’s behaviour, some strategic and some more personal. Mark Carney is the archetypal Davos Man — a global figure with much more kinship with European elites than with the Trump administration, and there’s a high degree of personal antipathy between Trump and many of the Euro-Atlantic elites he sees as more liberal than he is.

There’s also a domestic-politics element: it may help Carney win a majority to point to someone outside the country as the source of Canada’s problems. But what the government actually needs to do is implement the grand plans and announcements it’s made over the past year: hold to a carefully calibrated China policy that seeks limited economic benefits without creating deeper dependence; manage and stabilize the relationship with the United States so Canada can get a well-negotiated CUSMA, or something to replace it, that protects as much of the economic relationship as possible; diversify trade with other countries; and pursue an industrial and domestic economic policy that revives growth and productivity after decades of weakness.

It’s a full suite of things they need to do — and, frankly, the Trump-Xi summit didn’t make any of it easier.

Canada in the geoeconomic squeeze

PW: I have to end with this. We had Carlo Dade on the podcast a couple of weeks ago — he and others at the University of Calgary are working on a bigger-picture rethink of Canada’s relationship with the United States. I asked him about cozying up to Europe, the prime minister’s line that we’re “the most European of the non-European countries,” and he had a funny take. He said joining Europe now, with all its troubled economies, is like going to an Alcoholics Anonymous meeting where they still drink. You spend a lot of time in Europe — is there some truth to that?

MK: The Europeans have their own challenges. What Canada needs to be careful about is getting caught in the same geopolitical and geoeconomic trap as Europe, Australia, Japan, and others. The United States is trying to close its doors to China’s manufacturing surplus because it wants to rebuild its own domestic manufacturing capacity. But if the world’s two biggest manufacturers, China and the United States, both want a bigger share of global manufacturing, where does that share come from? Everybody else. Europe, and every other country that wants to maintain advanced manufacturing, is getting squeezed.

So you need tariffs, quotas, and trade barriers to manage that and protect yourself. But you also need serious domestic policy: deciding which industries to protect, cultivate, and support; creating the conditions for productivity growth; and figuring out what you can safely buy from other countries because it doesn’t matter strategically. Given Mark Carney’s background as an economist, he should be well equipped to do that. But so far, while letting in Chinese electric vehicles may make sense as a short-term tactical calculation, it’s risky in the long run.

PW: It comes at a big cost.

MK: If I might jump in with a last word: a quick shout-out to someone who we might call the third Michael: Michael Chong, another Canadian targeted by the Chinese Communist Party. He’s the Conservative foreign affairs critic and is currently in Taiwan. I want to congratulate him on his courage in going to Taipei despite China’s pressure.

Just before his trip, China’s ambassador was essentially telling Canadians: “we’ve let you out of the doghouse, trade is improving, and now here’s what we don’t want you to do — don’t acknowledge Taiwan, and don’t send Canadian naval ships through the Taiwan Strait.”

Chong’s trip sends a clear signal: Canada wants a stable economic relationship with China, but not at the expense of our sovereignty or our ability to make our own foreign policy decisions.

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This time we have a guest post by Reza Hasmath, Professor in Political Science at the University of Alberta, about a chilling new development in PRC lawfare that a wider audience needs to notice, and to which policymakers and legislators should respond. The article was originally published on The Conversation and appears here under Creative Commons license.

By Reza Hasmath

On July 1, China brought into force its Law on Promoting Ethnic Unity and Progress, converting a decade of Xi Jinping’s doctrine of “forging a strong sense of community for the Chinese nation” into binding law.

Most attention has gone to its domestic machinery: entrenching Mandarin over minority languages, unified state textbooks and “inter-embedded” neighbourhoods engineered to dilute concentrations of Uyghurs and Tibetans among the Han majority. In other words, this is an assimilationist project that’s already far advanced.

The provision that matters most to the world outside China is buried near the end. Article 63 declares that organizations and individuals outside Chinese territory who “undermine ethnic unity” or “create ethnic division” shall be pursued for legal liability.

The Chinese government is therefore asserting, in statute, that its authority follows its critics across oceans into other countries, including Canada, home to some of the world’s largest Chinese, Uyghur and Tibetan diaspora communities. The danger is not that the law reaches across borders. It is what it criminalizes, whom it targets and how it’s enforced.

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Getting the definition right

The reflexive response is to call this legal imperialism. The conclusion is right, but the usual reasoning is lazy. That matters, because extraterritorial jurisdiction is neither a Chinese invention nor a monopoly. Get the objection wrong, and China will swat it away as hypocrisy.

Democracies reach across borders constantly. Europe’s data protection rules bind firms anywhere on Earth that handle Europeans’ data. The United States prosecutes bribery committed entirely overseas. And a German court convicted a former Syrian intelligence officer in 2022 of crimes against humanity committed in Damascus, with no German victim at all.

What separates Article 63 from these precedents comes down to three differences:

1. The offence. Every western example rests on a defined wrong: bribery, mishandled data, torture. “Undermining ethnic unity” is not a crime defined anywhere in law. It is an elastic political judgment, rendered by the very authority accused of the underlying abuses. The vagueness is by design. A law that lets the state decide, case by case, who has offended the nation is attempting to export censorship.

2. The target. Universal jurisdiction prosecutes the perpetrators of atrocities to vindicate the victims. Article 63 runs the other way. Its targets are the victims’ advocates: the Uyghur who testifies before a foreign legislature, the Tibetan who organizes a vigil, the scholar who documents the camps. A government credibly accused of abusing an ethnic minority is claiming the right to punish the people who describe the accusation.

3. Enforcement. Western extraterritorial law, for all its overreach, runs through courts. Article 63 attaches no procedure at all. Its real instrument is the leverage China already holds: the passport of a sibling still inside China, an exit ban on an aging parent, security officers at a relative’s door. This is the documented machinery of transnational repression, now given a statutory label.

Shadows of Hong Kong law

None of this is an aberration. Article 63’s clearest precedent is Article 38 of the 2020 Hong Kong national security law that had Beijing’s blessing. It claimed to cover offences committed outside Hong Kong by people who were not its residents.

The new law extends that logic into the vaguer terrain of “ethnic unity.”

It also tracks a documented trend: China runs the world’s most extensive campaign of transnational repression, operating through informal “overseas police stations” (several identified in Canada) and coercion by proxy. What Article 63 adds is legal form, and an invitation to every other authoritarian government to do the same.

The response should be narrow, firm and co-ordinated. Host governments, Canada among them, should declare plainly that Article 63 has no legal effect in their countries, and treat its enforcement as the crime that it is.

The intimidation inherent in the new law already violates many domestic harassment and foreign interference laws in jurisdictions around the world. Prosecutors, here, should use them against the agents carrying out the coercion, not the exiles who are its victims.

Governments should shut the unlicensed “police stations,” and press Interpol to reject politically motivated notices aimed at diaspora activists.

Governments can also build dedicated channels for those targeted: a clear law enforcement contact, protective guidance for Chinese and minority diaspora communities and training for officers who could mistake transnational repression for an ordinary domestic dispute.

Finally, asylum systems should treat Article 63 as evidence: a statute in which China announces that diaspora advocacy invites retaliation is close to proof of persecution for those seeking to flee.

China has every right to legislate for its own territory and citizens. What it cannot legitimately do, however warmly it speaks of unity, is disregard borders. The task for all nations, Canada included, is to insist, in law and in practice, that borders still exist.

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A closing note from Michael:

For more on Xi Jinping’s Han-supremacist assimilationist policies, read a new essay by James Leibold and Tenzin Dorjee, “The Next Phase of China’s Minority Crackdown: Forced Assimilation Is Now the Law”, in Foreign Affairs. (Archived version here.)

Meanwhile, Canada’s RCMP still won’t release the full cooperation agreement it signed with China’s Ministry of Public Security in January without Beijing’s agreement, despite demands from opposition parties. The RCMP’s argument that such agreements are “a very common practice between national law enforcement agencies” and that it has many MOUs with other policing organizations around the world is nonsense: many of the other MOUs are public, most other police forces don’t engage in the sort of human rights and sovereignty violations that the MPS conducts, and they aren’t controlled by the Chinese Communist Party. I don’t think Canadians should accept that kind of secrecy given the potential for abuse. Canada’s allies should also be asking questions.

By Vina Nadjibulla

Originally published in Policy Magazine

Mark Carney’s recent trip to Saudi Arabia has aroused a fresh debate about Canada’s foreign policy, and whether this prime minister is straying too far from its longstanding international relations norms.

While this concern is understandable as a response to the speed with which developments are unfolding and the transformative change Mr. Carney is implementing, it negates the overwhelming role of context in these events.

The world is evolving faster than at any previous point in history. The answer, however, is not to retreat from engagement. Values are rarely advanced through isolation. Influence requires presence, relationships, credibility and economic leverage.

Canada’s traditional middle-power diplomacy developed within an international order underwritten by American economic and military power. The United States provided much of the security, market access and institutional leadership that allowed countries such as Canada to specialize in mediation, peacekeeping, humanitarian engagement and the promotion of international law.

That order was neither perfect nor universally accepted. But it created space for Canada to exercise influence through diplomacy and soft power without having to generate all the material capabilities that sustained the wider system.

Today, the United States is itself disrupting that order, reassessing its alliances and transforming its commercial relationships. Power is more dispersed. International institutions are weaker. Great-power rivalry is intensifying, and economic interdependence is increasingly used as an instrument of coercion and leverage.

The wider postwar order is unravelling. Pretending otherwise does not make Canada more principled. It makes us less relevant to the world as it actually exists.

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A fair reading of Mark Carney’s diplomacy — per his peripatetic travel schedule, his Davos address, his recent joint-bylined essay with Finnish President Alexander Stubb in The Economist and his public statements — shows that his response is not to abandon internationalism, human rights or the rule of law. It is to ask how Canada can continue advancing them when the power structures that once supported them are disappearing.

In their Economist essay, Carney and Stubb reject both “wishful multilateralism” and cold realpolitik in favour of what they call values-based realism: a foreign policy that remains committed to freedom, human rights, sustainability and solidarity, while recognizing that not every country with which Canada must work will share all of those values.

This is not an abandonment of the moral leadership Canada aspired to and sometimes achieved within the longstanding power arrangements of postwar multilateralism. Nor is it a reduction of Canadian foreign policy to trade promotion.

It is an effort to construct a new foreign policy framework for the world now taking shape, or, to coin a phrase, building the foreign policy while engaging in it. The prime minister is arguing that the emerging order will not be organized around one dominant power or one universal institution.

Canada’s task is to define its interests, identify the strategic capabilities it needs, and assemble the partnerships required to advance them, per his concept of “variable geometry”.

This represents a shift from a foreign policy of alignment to one of strategic autonomy and agency and potentially a more ambitious role for Canada on the world stage, not, as some have argued, a smaller one.

The Saudi visit should be understood within that larger project.

Commercial agreements were indeed central to the visit. But, as Donald Trump’s presidency has proven, foreign policy and economic policy can no longer be separated, to the extent that they ever could.

While retreating from hyper-globalization, the global economy is being reorganized around resilience, security, standards and political alignment. Supply chains have become strategic terrain, and governments are once again using industrial policy, regulation and capital to shape economic outcomes.

Energy systems, critical-mineral supply chains, artificial intelligence, data infrastructure, defence production, food security and access to capital are now sources of national power. Building relationships in these areas is not merely commercial promotion, it is economic statecraft. It is about ensuring that Canadian resources, technologies, firms and capital occupy consequential positions in the industrial ecosystems on which other countries depend.

Canada will gain leverage not simply by selling energy or critical minerals, but by helping shape the infrastructure, processing capacity, technical standards, financing arrangements and trusted supply chains surrounding them.

The objective should be to translate Canadian strengths in energy, critical minerals, artificial intelligence, quantum technology, agriculture and finance into durable relationships and greater strategic indispensability.

Seen through that lens, the presence of pension fund executives on Carney’s delegation or his focus on investment roundtables on trips around the world takes on a different meaning. In the emerging economic order, capital is not merely money seeking a return.

Deployed with strategic purpose and without compromising fiduciary obligations, it can lower risk, make essential projects viable, connect Canadian capabilities with foreign demand and help build the economic architecture of new partnerships.

Saudi Arabia has capital, energy influence, technological ambitions and significant regional weight. Canada will not agree with its government on many issues. But disagreement does not make disengagement a viable strategy. It makes calibrated engagement a necessity.

The nature of Carney’s wider NATO swing reinforced these points. In Türkiye, Canada strengthened its NATO commitments, expanded support for Ukraine, pursued new defence-industrial partnerships and advanced the Canadian-led Defence, Security and Resilience Bank, an initiative intended to mobilize capital for collective security.

These efforts combine diplomacy, institution-building, economic capacity and security policy rather than treating them as separate spheres or diplomatic silos.

Carney’s statement that lecturing countries from afar is often ineffective should not be read as an alibi for silence. Canada must continue to speak plainly about human rights, raise difficult consular cases and establish clear limits around sensitive partnerships.

Values-based realism must contain both parts of the phrase. I have made this argument in the context of Canada’s renewed engagement with China: the more extensive the engagement, the stronger the guardrails must be. The same standard should apply to Saudi Arabia and every other consequential and imperfect partner.

This is also why Carney is right to connect Canada’s strength at home with its credibility abroad. A country that cannot build infrastructure, develop its resources, commercialize its technologies, defend its territory or deliver on its international commitments will not remain influential simply because it invokes a distinguished diplomatic history.

Soft power matters. But soft power is not a substitute for capability. It is often the product of credibility, competence and contribution.

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In his critique of the Saudi Arabia trip, former Foreign Affairs Minister Lloyd Axworthy was correct in saying that Canada needs greater diplomatic capacity, deeper regional expertise, stronger humanitarian instruments and a serious commitment to conflict resolution.

Prime Minister Carney’s approach should incorporate those tools. Canada should invest in its diplomatic network and use its expanding relationships to support mediation, humanitarian access and institutional reform where it can make a meaningful contribution. But this is an argument for strengthening Canada’s emerging foreign policy approach, not for returning to the foreign policy of a quarter-century ago.

Values-based realism is a promising intellectual framework for a world in flux, but it is not yet a complete foreign-policy doctrine.

It must now be expanded, sharpened and tested. Canada needs greater clarity about the interests it must protect, the values it will not compromise, and what should happen when the two collide. It must distinguish more clearly among allies, aligned partners, transactional partners and strategic competitors. It must define the principles and guardrails that will govern engagement with countries that do not share our values so that Canadians don’t feel blindsided by that engagement when it departs from longstanding foreign policy norms and optics.

There are also harder strategic questions to answer.

Which elements of the rules-based order can still be defended through universal institutions? Which will depend on smaller, purpose-built coalitions? Where does Canada have the capabilities and credibility to lead rather than merely participate? How do we ensure that realism does not become a rationale for expediency and principle a substitute for effective action?

The responsibility of Canada’s foreign-policy community should go beyond merely endorsing or condemning Carney’s approach to helping develop and refine it: clarifying its principles, exposing its contradictions, identifying both its limitations and the capabilities needed to make it credible.

That conversation must extend beyond government to Parliament, business, to civil society, to universities and to Canadians more broadly.

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The Tour de France made its first Grand Départ from Barcelona this weekend. It began not with a chaotic dash, but with a ritual of coordinated movement: cyclists in peloton formations as precise and elegant as the Modernista architecture that lined the streets they scythed through. As the winning Team Visma demonstrated in July 4’s team time trial, disciplined drafting or slipstreaming rotates teammates through the wind, shelters leaders when they need it, and slices a path to victory. It’s the metaphor I’ve been waiting for to illustrate and rectify hedging in China-West relations.

This is Part IV in a series of articles on the wave of Western leaders visiting China since Donald Trump’s return to the White House. Read the original essay in Foreign Affairs and Part I, Part II and Part III here on Substack.

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A peloton is game theory on wheels. Every rider wants to shelter inside it to spare energy. Nobody wants to take too much wind, but some riders must. What holds it together is repeated interaction and total visibility on who’s working and who’s free-riding. The group disciplines defectors by refusing to shield them in turn. It’s cooperation without central authority — stable until the moment it isn’t. An effective peloton requires riding like a team, forming a paceline and taking turns in the wind. Otherwise it’s an amorphous mess. The essence is energy allocation.

The wave of diplomatic visits to China has been the same. Look at each trip as a discrete verdict on bilateral relations and you miss the pattern of pack behaviour under collective exposure. Nobody wants to be the first or only one to take a leading position that risks windburn, either from Trump’s gusting crosswinds of tariffs and transactional threats, or from the PRC’s steadier headwinds of diplomatic intimidation, market access restrictions and supply chain chokeholds.

The peloton’s rotation problem is central to the metaphor: under a steady US alliance system, it’s sustainable. Under Trumpian volatility, it becomes more dangerous because the lead rider is no longer reliably pulling — and lately he may even be swerving into you. When the group can’t fully institutionalize reciprocity and enforcement, individual riders are tempted to try their luck with selective bilateral stabilization. They try to appear to be cooperating with their Western partners, while quietly looking for ways to reduce the risk they personally become the next test case for coercion. Look closely and you’ll see them smoothing dialogue with Beijing, finding transactional off-ramps, and avoiding public escalations.

Staying in the peloton saves enormous energy, which means that normally, leaving it is stupid — except at strategic moments. Tactical wheel-sucking behind another cyclist to reduce wind resistance is rational. In alliance politics, it’s also rational — and corrosive. The EU’s currently wheel-sucking at the bloc level: everyone stays in the pack but no one wants to take a long pull for stronger trade defence measures. Friedrich Merz’s February visit looked like Germany taking a short pull — with the team car shouting contradictory instructions and half the domestiques (German companies) riding for Team China.

Naming PRC coercion, interference, espionage, hostage diplomacy, and hostile policies on Tibet, Xinjiang, Hong Kong, Taiwan, Japan, and the Philippines burns a match in cycling parlance. It creates immediate retaliation risk, complicates deliverables, and can even look performative if you don’t have capacity and will to impose meaningful costs. So politicians draft like riders, hedging by tucking into a slipstream of convergent scripts with fuzzy concepts like “strategic stability,” “guardrails,” and “de-risking, not decoupling,” accepting the Chinese Communist Party’s script and choreography, and foregrounding economic deliverables for their voters.

Cycling puts buck-passing in colourful spandex and makes it more obvious, but the dynamics are much like governments letting Washington and the European Commission absorb China’s retaliation while preserving market access to placate farmers. Energizing for each rider; poison for the peloton, because if enough riders do it, the breakaways start determining de facto policy.

The leaders have moved in a wave because they’re marking their rivals — watching how other visits go. Their thinking is, “if another country wins access or tariff relief and I don’t follow, I’ll be the one caught in the gutter when the next gust hits, or left exposed by a deal Trump and Xi cut over my head.” The CCP is content to allow some controlled breakaways, because every visitor who bargains alone converts a shared problem into a separate negotiation and thins the group’s collective leverage. Split the pack in the crosswind (that’s what a wedge strategy is for) and you set the tempo.

But politicians aren’t bound by physics like cyclists. With time and effort, they can change the geopolitical aerodynamics by diversifying supply chains, building domestic capacity, and hardening anti-coercion tools. That’s the long, hard road that gets you back to genuine sovereignty and better leverage. In the meantime, effective diplomacy can buy time, hold the line, and eke out small advantages.

Peloton diplomacy requires disciplined visits

Coordinate your China policies and messages with allies before you travel, hold to common red lines, and collectively impose costs on PRC coercion rather than capitulating to it individually. Call it peloton diplomacy.

When he arrived in Beijing in May, Trump could have put that logic into practice. He could have rejected the Party-state’s stagecraft and slogans, refused ephemeral deals that disadvantage allies and deepen dependence, and used meetings to bolster deterrence and apply leverage rather than seeking illusory adulation. That would have diminished General Secretary Xi Jinping’s confidence that Chinese coercion inculcates accommodation, and strengthened Trump’s own hand by establishing a new pattern in which PRC pressure on one is met with resilient pushback from many.

He didn’t. Still, as they prepare for subsequent meetings, his and other governments could refocus on the limited collective action challenge of turning each meeting with Party-state officials into an opportunity to demonstrate more resolute alignment on positions and interests they already share.

1. Reframe the purpose of going to China. Move away from the self-censorship, ephemeral dealmaking and authoritarian choreography that cedes the advantage to the CCP, and toward a playbook of using such encounters primarily to gather information, test intentions, develop strategic empathy, defend bottom lines, and convey consistent messages on allied priorities.

2. Correct the misperception that drives buck-passing. As Part III showed, Emmanuel Macron’s “matter of life and death” is the template. Until enough Western leaders share the perception that another year of accommodation does more damage than a year of coordinated constrainment, buck-passing will continue to be each leader’s rational choice. Build the perception that Chinese economic statecraft can’t be consummated against any one ally in isolation.

3. Build the contingency element that superficial hedging currently lacks. Hedging without contingency planning is just commercial engagement with extra steps. The institutional architecture Mark Carney sketched at Davos — such as EU-CPTPP links, anti-coercion mechanisms, and critical-minerals coalitions — is exactly the institutionalism of Robert Keohane’s After Hegemony: cooperation maintained without a reliable American hegemon. It’s buildable, and it doesn’t require everyone to agree the threat is existential. It requires strong enough diplomatic agreements and commitments that nobody can be picked off alone.

4. Refuse the script even when accepting the protocol. Macron in Chengdu is the operational proof that this is possible. Take the panda lunch. Sign the letters of intent. And still say, on Chinese soil and at home afterward, what is actually true about the imbalances, the war in Ukraine, and the threat to European industry. The visit costs are sunk. The narrative costs are not. More on this below.

How to flip the CCP’s script

Let’s dig into #4 as an example. My Foreign Affairs essay calls on visiting leaders to “eschew the symbolic, rhetorical, and material accommodation that Beijing seeks.” Diplomats might fairly respond: Okay, but how, exactly? The visiting leader cannot refuse another host government’s protocol. They have to walk the red carpet, attend the banquet, sit at the long table opposite Xi. They cannot dictate the venue, the ceremonies, the seating arrangements, or the simultaneous interpretation of a state visit they themselves requested.

True. But there’s a useful distinction between protocol — what every state visit in the world entails — and optics and narrative, which are what the Party really wants to control, and which visiting leaders typically surrender. The first is unavoidable. The second is what matters. Stoicism teaches us to focus on what’s within our sphere of control, and stop worrying about what’s not.

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Outside the visitor’s control

Protocol: motorcades, honour guards, joint photo opportunities, hosted state banquets, simultaneous interpretation, seating arrangements determined by the host. Refusing any of this would be futile, rude, or both.

Within the visitor’s control

The composition of the delegation. Bringing a business delegation of 30 CEOs to China is itself a public statement. The CCP understands that those business leaders won’t pressure their political representative to engage in tough talk. They’re there to constrain and manage imminent risks and to seek new opportunities. Without the structural discipline of national and allied China strategies, CEOs’ short-term commercial logic dominates, even as decisions to locate research and development and production in China erode their home countries’ economic security. By contrast, it would send a very different signal to send a delegation that includes ministers responsible for human rights, defence, security, or intelligence, as well as technical experts, China specialists, civil society advocates, and labour union leaders.

Pre- and post-visit framing. What delegations say before boarding their planes and after returning is entirely under their control. “The meeting is the deliverable” was a phrase I heard too often from diplomats during my research. It made my head hurt, because that’s exactly the dynamic the CCP is working to create. In a market where demand for face time with Xi Jinping now exceeds supply, the Party is raising the price. It’s a classic Chinese tactic: use access for leverage and oblige you to make concessions just to get in the door. Diplomatic friends, that’s a sucker’s game, and you’ve got to stop playing it.

Repeat after me: The meeting is not the deliverable. Both sides should have an interest in meeting, and if you make concessions before negotiations even start, you’re only weakening your own hand. The Party strives to inculcate subservience, but don’t ever confuse that with mutual respect. Play your diplomatic cards well and insist on a dynamic of sovereign equals. Chinese officials might actually respect you.

Demeanour. Less affective warmth on camera. Fewer ad-lib smiles. Fewer lines that sound like gratitude or admiration. Instead, cultivate firm professionalism. Richard Solomon’s classic RAND paper, Chinese Political Negotiating Behavior, warned readers to expect that their hosts would “manage the ambience so as to maximize the sense of gratitude, dependence, awe, and helplessness.” It concluded: “resist the flattery.” That advice remains timeless. Leave your ego on your plane with your electronics.

The language of the joint communiqué. Beijing routinely tries to insert specific formulations into the public documents emanating from the visits. They include terms such as comprehensive strategic partnership, an equal and orderly multipolar world, the right side of history, reaffirmation of the CCP’s hardline one-China principle on Taiwan (rather than the “one-China policy” of most Western governments), and rejecting decoupling or a Cold War mentality. Negotiating the joint statement text rigorously in advance — and refusing accommodative language even when that means accepting separate parallel statements — is squarely within the visiting government’s power. So is subsequently disavowing any language in the PRC’s statement you don’t accept.

The leader’s own public remarks. What’s said in the recorded parts of meetings, the press conference, the business forum, or the academic address is entirely in the visitor’s control. Carney’s Orwellian “new world order” line at his appearance with Premier Li Qiang was not a protocol requirement. Same with Keir Starmer’s mealy-mouthed “more sophisticated relationship” formulation days after Jimmy Lai’s appalling sentencing. Pedro Sánchez didn’t have to endorse the “Four Global Initiatives” to sell pig stomachs. They were choices that provided free content for PRC propagandists.

Symbolic concessions Beijing extracts as preconditions. Approval of a contentious mega-embassy on the eve of the visit; the dropping of a pending counterintelligence prosecution; the granting of high-profile commercial approvals timed to the trip; state honours offered to Chinese officials whose conduct should disqualify them. These are sometimes presented as protocol but are actually substantive concessions made to secure the meeting itself.

From cycling to diplomacy

Getting the diplomacy right doesn’t substitute for material policy changes and the hard work of building national power any more than adroit peloton tactics substitute for a cyclist’s aerobic capacity or power-to-weight ratio. But for political signalling and shaping the strategic narrative, high-level diplomacy matters. Walk the red carpet but refuse the language of the joint statement. Sit at the banquet but use the press appearance to name detained citizens. Accept the toast but reject the slogan. That’s what disciplined engagement looks like. It’s tougher to pull off than it sounds. It’s also entirely possible.

As Canadian former foreign minister recently wrote:

Sovereignty lives in small moments. When an ambassador oversteps and you push back. When an ally bullies and you say no. When a trading partner interferes and you name it. When a friendly autocracy fuels atrocities and expects your silence, and you refuse to provide it.

It’s not too late for the Trump administration and others to course-correct. What American officials and other statesmen say and do over the coming months can redefine in retrospect what all these visits have been about. It’ll be more effective when coordinated with likeminded capitals.

All these countries risk bullying, humiliation and loss of sovereignty when facing Beijing alone. But there’s a better way, as the Tour de France’s cyclists demonstrated this past weekend in Barcelona. The team that won the first yellow jersey moved as a unit — taking turns in the wind, protecting its leader, and preserving power for the climb. Here’s the upside for self-interested pragmatists: like efficient cycling, if you get the diplomacy right you’ll expend less energy for the same results. It’s not the strongest cyclist that automatically wins the Tour. It’s usually the best rider with an effective team and strategy.

There’s a long road ahead. You’re constrained by finite resources, incomplete information and uncertain terrain. Most interactions oblige restraint. A few challenges require total commitment. Wisdom is knowing the difference. Time to pedal hard and restore the peloton.

“It will not be any European statesman who will unite Europe,” Charles de Gaulle once said. “Europe will be united by the Chinese.”

France’s current president has been working overtime to prove his predecessor right. For months now, Emmanuel Macron has been trying to shift the other 26 members of the European Union to adopt more robust collective responses to China’s existential geoeconomic threat. This month he got closer than ever, only to have Germany and Spain slow progress yet again due to fear of Beijing’s retaliation.

Efforts to balance China got off to a good start last week: France hosted a G7 Summit that launched a Critical Minerals Resilience and Production Alliance and set a target to cut dependence on any single non-G7 supplier of rare earths and permanent magnets below 60% by 2030. China wasn’t named, but everyone in the room knew which supplier they were talking about. The alliance effort will be backed by €64 billion in newly-announced projects. Donald Trump also seemed more willing to work with the EU to support Ukraine.

Then, as the June 18–19 European Council meeting of EU national leaders approached, there appeared to be a shift in the EU consensus: Germany, Poland, the Netherlands and Belgium lined up behind France’s proposal for a new trade-defence instrument — a European answer to Washington’s Section 301 — that would let the bloc impose tariffs quickly when one country’s dominance of imports (again, the unnameable China) starts to threaten economic security.

Machines of shoving space

China has become addicted to exporting the huge manufacturing surplus its unbalanced state capitalist economic policies generate. This has created a Second China Shock with a tsunami of cheap goods that’s rapidly eroding the West’s advanced industries. With Trump’s elevated tariffs deflecting a sizeable share of that trade away from the United States, Europe has become China’s market of last resort, which is putting crucial manufacturers there in jeopardy. Last year every EU member state ran a trade deficit with China for the first time, with the total EU-China deficit hitting €359 billion (yep, about a billion euros a day) — roughly double the pre-pandemic figure. China’s exports to the EU are up another 16% in the first half of this year. The Economist notes that bankruptcies are running at levels last seen in 2015. Germany, the industrial heartland, shed 143,000 manufacturing jobs last year. MERICS has a grim festival of new charts:

SOAPBOX

China brings a brutal trade scorecard to Brussels

In the week of 15 June, EU foreign affairs ministers will discuss the state of play of relations between the EU and China. They will have some appalling data on the table. Beijing has just published a brutal trade scorecard…

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5 months ago · 2 likes · 2 comments · SOAPBOX

Compounding the problem for European leaders is that the Chinese Communist Party has demonstrated willingness to mete out punishment against countries that impose trade and investment barriers or otherwise frustrate its ambitions. It has a track record of weaponizing access to China’s market, squeezing dependent firms to influence government policy, and using control of supply chains for coercion. That’s why at the European Council meeting, the session in which leaders debated the threat was billed as focusing euphemistically on “global macroeconomic imbalances.” One is reminded of the dictum of another French statesman, Talleyrand: speech was given to man to disguise his thoughts.

Common threat vs. divergent tactics
= incoherent response

The second China Shock and second Trump Shock are the geoeconomic backdrop for the wave of Western leaders visiting China since early 2025. Read the Foreign Affairs essay where I began the analysis and Part I and Part II where I explained that these governments are trying to hedge an unreliable Washington by repairing ties with Beijing — in the process signalling accommodation of PRC power and interests.

When we apply the international relations typologies from Part II to the wave, here’s the composite picture: Paul Schroeder catches the dominant mix of bandwagoning (with Beijing) and hiding, plus Mark Carney’s rhetorical transcending. Tom Christensen and Jack Snyder supply the engine — a shared misperception that defence is dominant against Chinese economic statecraft, which results in buck-passing that pretends to be less-embarrassing hedging. Randall Schweller’s “jackal bandwagoning” catches the cases that aren’t hedging at all but rather offensive profit-seeking in a system those leaders perceive as tilting toward China. Glenn Snyder’s entrapment–abandonment dilemma explains why Trump has made bilateral Beijing channels look like prudent insurance even as they add up to collective weakness. And Fabio Figiaconi’s contingency test exposes how little of 2025–2026’s diplomacy qualifies as effective hedging, given the lack of any real institutional fallback.

States facing a rising threat decline to confront it and instead hope somebody else will bear the burden of doing so. For the EU, each member would be better off if the bloc collectively balanced against Beijing. But for any single government, the smart move, given that the others are hanging back, is also to hang back: let the U.S. and the European Commission absorb the retaliation, lost market access, protesting farmers, and lobbying CEOs. Since that logic holds for all 27 simultaneously, nobody moves first, and inaction becomes the stable resting point.

Let’s apply the composite framework to each visit (in the order they travelled):

• New Zealand — Hiding, drifting toward buck-passing.

• Australia — Bandwagoning on economics, balancing on security — a genuine hedge.

• Portugal — Bandwagoning with elements of specializing.

• Slovakia — Jackal bandwagoning.

• Ireland — Buck-passing masked as hiding.

• Finland — Hiding on China while balancing on Russia.

• South Korea — Shifting from balancing toward bandwagoning for profit.

• Canada — Transcending in doctrine, buck-passing in conduct.

• United Kingdom — Hiding from trade-offs, drifting toward bandwagoning.

• Germany — Balancing in rhetoric, bandwagoning in substance.

• Spain — Bandwagoning for profit, fused with buck-passing.

Thus, the wave of visits has been formed by buck-passing equilibria reinforcing each other, with plenty of encouragement from Beijing’s strategists. The aggregate effect has been to dissipate the West’s collective leverage, because leaders can’t agree on what they’re trying to do, much less how to do it together. Don’t any of these guys know how to balance?

Astute readers will notice one leader missing from the above list: Emmanuel Macron, whose fourth state visit to China in December 2025 came closest to balancing and showcased both the limits of engagement and the possibility of disciplined post-visit conduct. Examining in retrospect what he did differently illuminates the dynamics of the current phase of the geoeconomic struggle between the CCP and the West.

Macron strikes a balance

The French president’s trip was conventional in form, with nearly 40 CEOs in tow, ten sectors identified for “crossed investments,” and letters of intent signed. He accepted the Party-state’s full choreography, including a rare courtesy escort by Xi Jinping to Sichuan, a ping-pong photo-op, and Brigitte Macron at the panda centre. As Le Monde’s Harold Thibault drily observed, the Macrons “willingly indulged in two classics of Chinese diplomacy — at the cost of entering a game where Beijing holds the cards.” A French diplomat quoted by Le Point on the eve of the visit grumbled that “we have the feeling of being a simple variable of adjustment in the Sino-American relationship.”

Macron returned with no Airbus order — a 500-aircraft package had been on the table for months but Beijing held it back, with French analysts correctly inferring it would be kept in reserve for leverage in trade negotiations with Trump — and no relief on European brandy or pork. But France’s president did some things differently both on Chinese soil and at home after. The Élysée said the goal “wasn’t to stack contracts, but to do politics — that is, to deliver messages.” A presidential adviser framed the substantive ambition more precisely: to “clarify the rules of the game” directly with the CCP’s General Secretary.

In Beijing, standing beside Xi at the joint press appearance, Macron warned of the risk of “disintegration of the international order.” He told Xi that such global trade imbalances “are not sustainable — they carry the risk of triggering a financial crisis.” Macron also pressed Xi to rein in Vladimir Putin’s illegal invasion of Ukraine. The Chinese leader bluntly refused. Publicly, Xi rejected “any irresponsible and discriminatory accusations” and, in a sharper register, told Macron to “stand on the right side of history.” That’s Party-speak for “we’re now powerful enough we can ignore your lectures.” French readouts say that privately, Xi claimed China lacked the means to push his fellow autocrat toward a ceasefire — dubious, given that NATO considers the PRC the “decisive enabler” of the war.

None of those were concessions. But Macron did extract clarity, and that has utility: it makes the Chinese position legible in a way the usual fog of “constructive role” boilerplate doesn’t.

The clarity matters all the more because the substantive picture had grown sharper just before the visit. Ukrainian intelligence said Chinese Yaogan reconnaissance satellites had overflown western Ukraine during a major Russian barrage in October 2025, with their data passed to Russia for targeting strikes inside Ukraine. We now know that around the time of the French state visit, China was training Russian troops that were then sent to Ukraine. The “neutrality” Xi continues to invoke is a fiction Macron rightly declined to dignify.

Then in Chengdu, standing at a podium at Sichuan University in front of Chinese state media the day before flying home, Macron urged Chinese students not to “yield to divisions” and autarky. He named and rejected the framing Beijing has spent years cultivating: “Many people will explain to you that Europe is old, arrogant, rich, and despises the Global South. But all of that — these are inventions, theories.” And then a line that shouldn’t have been deliverable in that room: “One is only free if one is free to know oneself. Academic freedom must be cherished, the freedom of teaching and research… let us not yield to the sirens of prohibition.” He told Chinese students to read Alexandre Dumas and Victor Hugo, even as their universities grow ever more controlled and censored. This was a Western leader using a CCP-controlled platform to contradict three of its central narratives. It’s rare.

While Macron was in Beijing, the Party-state dispatched a Xinjiang delegation to Paris to spin a “return to normal” in the Uyghur region — the kind of choreography that usually works, but that Macron’s Chengdu speech ran directly against.

Then came the post-visit escalation. In an interview with Les Echos, Macron said the quiet part out loud. He described China as “striking at the heart of the European industrial and innovation model” and said Europe was “caught between” Trump’s tariffs and Chinese overcapacity — “a matter of life and death for European industry. We have become the adjustment market.” He said he told Xi that without movement on the surplus, “we Europeans would be forced, in the very next months, to take strong measures and to de-cooperate, like the United States, for example tariffs on Chinese products.” He then amplified those French-language messages in a Financial Times op-ed: “Protection against unfair competition is the foundation of resilience… We must not be naive: a credible protection strategy requires that we have the means to defend ourselves against those who break the rules.”

Shifting Europe from dithering to defending

Macron has a crucial institutional ally in European Commission President Ursula von der Leyen. Trade is an exclusive EU competence, so the tough calls on China fall to the Commission, which also makes it the buck-catcher of choice for member states. At the EU-China summit in July 2025 — shortened to a day at China’s request — she told Xi to his face that the relationship had hit “a clear inflection point” and that trade “must become more balanced.” To his credit, Macron noted he had coordinated his messages in Bejing and after with Von der Leyen, who Chinese officials have been trying to sideline.

EU timing has reinforced Macron’s framing of the China challenge. The day he arrived in Beijing, the Commission published its new economic security doctrine. The week after he left, Brussels released the positive arm of its “Made in Europe” Industrial Accelerator Act, including local manufacturing quotas for foreign investment designed to prevent “screwdriver factories.” Macron’s post-visit tone slotted into that institutional rhythm rather than against it.

It’s an indicator of how far Europe-China relations have deteriorated that Macron himself has shifted to this stance. Back in 2024, Member of the European Parliament Raphaël Glucksmann penned a prosecutorial open letter on Macron’s previous seven years of engaging China, asking: “what have you obtained from your accommodation strategy? Nothing but symbolic homages flattering your pride.” That still stings. France’s bilateral deficit with China has nearly doubled over the decade of Macron’s presidency, to €47 billion, accounting for nearly half of France’s total trade deficit. “For China, France today appears as a ‘has been’ country,” wrote Emmanuel Lincot in Le Figaro the day Xi met Macron.

While he’s a recent convert to the firmer response that European China analysts and the Commission have been pushing for years, Macron’s post-visit performance nonetheless helpfully shows the prescription is operationally possible. A leader can accept the protocol and still refuse the script — take the panda lunch and the ping-pong photo, still tell Chinese students to cherish academic freedom, then warn that tariffs are coming if nothing changes.

That makes Macron the only European national leader who’s tried to convert hedging into balancing at the collective level. As his predecessor De Gaulle said, “deliberation is the work of many men. Action, of one alone.” But Macron alone lacks the power to balance China, so his viable action is coalition entrepreneurship: to manufacture balance out of 27 reluctant hedgers, with France, the European Commission and likeminded states as agenda-setters. His objectives, in ascending ambition, are to:

1. reframe China as a systemic rebalancing challenge;

2. re-tool the EU with fast-acting, more potent defensive instruments;

3. protect vulnerable French sectors that are typically first to taste PRC retaliation; and

4. ultimately use China as a lever to push forward European strategic autonomy.

Escape from a buck-passing equilibrium requires changing the perception that produces it. If Europe can absorb the costs of accommodation indefinitely, buck-passing is rational; if the threat is urgent and existential, balancing becomes the bitter pill everyone’s got to swallow. The cognitive preconditioning that the Commission, Macron and transatlantic China hands have been working on for years has finally yielded a unanimous diagnosis. As ECFR’s Andrew Small framed it before this month’s Brussels summit, the question for leaders is no longer whether China is a systemic challenge, but whether Europe will act at the scale and speed the threat demands.

With nobody at the European Council table last week still arguing the trade imbalance is benign, perceptions have flipped toward offence-dominance — the necessary condition for balancing. But the collective-action problem that produces buck-passing remains unsolved. And Macron may lack the power to finish the job: he’s running European grand strategy from domestic survival mode, his ideas outrunning his authority, with a plausibly hostile National Rally (Rassemblement national) succession raising uncertainty over whether the strategic autonomy project will survive him.

What to do? The next instalment in this series dives into the details. For now, to illuminate the path, let us return to De Gaulle:

“Always choose the hardest way, on it you will not find opponents.”

With the assistance of Patricia Xavier and Joseph Widacki.

For more on the brewing EU-China storm, read Noah Barkin:

Watching China in Europe

Germany is wavering on China (again)

Days before EU leaders gather in Brussels to discuss more forceful trade measures against China, the German government is wavering on key elements of the European Commission’s plans, including the use of safeguards to protect struggling European industries from unfair Chinese competition. German Chancellor Friedrich Merz appeared to signal his support for a tougher approach with China…

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5 months ago · 26 likes · Noah Barkin

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A guest post by Vina Nadjibulla, Vice-President of Research & Strategy at the Asia Pacific Foundation of Canada. Originally published in Policy Magazine.

The first year of Prime Minister Mark Carney’s leadership has had a transformational impact on both Canada’s foreign policy and its standing in the world. The shift has been especially evident in the Indo-Pacific, where Ottawa is more active, more strategic, and more ambitious than it has ever been.

But to understand what is driving this change, it is necessary to start not in Asia, but with Carney’s reading of the United States.

The central premise of his foreign policy is that Canada is not simply managing another difficult period in the bilateral relationship with Washington. In Carney’s view, most notably stated in Davos on January 20, Canada is confronting a deeper rupture caused by changes in the United States itself.

Under Donald Trump, the U.S. has become more illiberal at home and more predatory abroad. Canada’s deep integration with the U.S. was a source of strength when Washington was the principal anchor of a liberal, rules-based order. That integration looks much more like a strategic vulnerability when the U.S. begins to behave like a predatory hegemon.

From this starting point, Carney has reframed Canadian foreign policy around two overriding objectives: economic survival and sovereignty.

The result is a foreign policy that is more pragmatic, more economically focused, and more explicitly tied to questions of national resilience. Carney has little interest in “megaphone diplomacy” and rarely foregrounds democracy promotion, human rights, or values-based framing in his external engagement. That is a notable departure from his predecessor.

Carney’s approach is not values-free, but it is unmistakably interest-led. It is also ambitious. Carney’s targets to double Canada’s non-U.S. trade and attract $1 trillion in new investment over the next decade are demanding — but also revealing. They underscore how he sees foreign policy: not as a separate diplomatic sphere, but as an instrument of economic resilience and national renewal.

Major projects, critical minerals, defence industrial policy, energy strategy, artificial intelligence, and quantum are no longer adjacent to foreign policy; they are increasingly part of it.

The Indo-Pacific Moves to the Centre

In the first months of Carney’s tenure, some wondered whether the Indo-Pacific would receive the same level of attention, especially because Canada’s Indo-Pacific Strategy had been launched by the previous government and still carried some of that political association.

Those doubts have now been put to rest. Over the past nine months, the Indo-Pacific has become central to Carney’s broader effort to diversify Canada’s partnerships and reduce over-reliance on the U.S. The Prime Minister has travelled repeatedly to the region, with consequential visits to China, India, Japan, Australia, Singapore, and South Korea.

He has also used Canada’s own diplomatic platforms to bring the region closer. He invited leaders from India, Australia, and South Korea as special guests to the 2025 G7 Leaders’ Summit in Kananaskis. He hosted Indonesia’s president in Ottawa and signed the Canada-Indonesia Comprehensive Economic Partnership Agreement, alongside new defence cooperation memoranda.

Through these efforts, Carney has focused on three related objectives: resetting relations with India, recalibrating relations with China, and deepening strategic partnerships with Japan, Australia, South Korea, and key Southeast Asian states.

The clearest achievement has been India. Carney moved quickly to reset one of Canada’s most damaged bilateral relationships. His March 2026 visit to India pushed that effort further, producing new agreements and a commitment to finalize a Comprehensive Economic Partnership Agreement by the end of the year. This reset makes strategic sense. India offers scale, growth, geopolitical weight, and major opportunities in energy, agriculture, digital infrastructure, education, and emerging technologies.

Carney has also elevated ties with Japan and Australia in ways that are strategically sound. These are trusted Indo-Pacific partners with whom Canada can deepen both economic and security cooperation. His March tour produced a new Comprehensive Strategic Partnership with Japan and reinforced the trend toward closer defence, critical minerals, energy, cyber, and technology cooperation with both Tokyo and Canberra.

Canada needs anchor partners in the Indo-Pacific where interests, trust, and political alignment are relatively strong. Japan and Australia fit that description.

More broadly, Carney has benefited from — and built on — a stronger Canadian presence in the region. Canada is now more visible, more plugged into regional networks, and more active across the Indo-Pacific than it has ever been.

The groundwork laid by Canada’s Indo-Pacific Strategy — expanded diplomatic staffing, new trade and financing offices, Team Canada trade missions, the ASEAN strategic partnership, and sustained naval deployments — has given Carney’s government a stronger platform from which to operate.

Carney’s contribution has been to invest political capital in the region and give these efforts a more coherent strategic rationale tied to resilience, diversification, and harder-edged partnership building. The result is that Canada now looks more serious in the Indo-Pacific than ever before.

Canada’s engagement in the region has also benefited from an enhanced international profile. Carney’s Davos speech, and the ideas underpinning it, have resonated deeply from Delhi to Jakarta. Across the region, Canada is increasingly seen as a constructive and pragmatic partner — one that is willing to engage across geopolitical divides while remaining anchored in its own interests.

Initiatives such as linking the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with the Canada–EU Comprehensive Economic and Trade Agreement (CETA) reflect an effort to think beyond traditional regional silos and shape emerging economic architectures.

From Momentum to Delivery

Carney’s first year has produced real momentum. But momentum in foreign policy is fleeting. The real test now is implementation.

The first challenge is execution. Agreements signed during high-level visits must translate into concrete outcomes: market access, investment flows, joint projects, and sustained institutional cooperation. Canada has historically struggled with follow-through in the Indo-Pacific.

The second challenge is China. Carney’s recalibration of relations with Beijing has strategic logic. In an era of overdependence on the United States, Canada needs room to stabilize its relationship with China, especially in selective areas such as agriculture, energy, climate, and other economic sectors where engagement can serve Canadian interests.

But the test of this policy is whether the guardrails Carney has promised are actually put in place, understood across government, and enforced. Canada will need to show that it can deepen engagement while still upholding Canadian law, protecting against foreign interference, guarding against forced labour, screening investment in sensitive sectors, and defending its economic and national security interests.

Selective engagement with China with clear guardrails is conceptually sound. Operationally, it is complex. It requires clear definitions of what is in and out of scope, robust enforcement of investment and security frameworks, and sustained coordination across departments.

India presents the third challenge. The diplomatic reset has created political space, but the relationship remains fragile. Public opinion in Canada is still shaped by concerns related to foreign interference, diaspora tensions, and the Khalistan issue. Canadians may support re-engagement in principle, but many still lack a clear understanding of its strategic rationale.

That gap matters. A successful India strategy cannot rest only on leader-level diplomacy. It requires a deeper investment in knowledge, networks, and institutional capacity across government, business, academia, and civil society. Canada needs more India competence if it is to turn the current opening into a durable partnership.

The fourth challenge is sustaining momentum with key partners.

Relations with Japan and Australia have finally reached a level of strategic alignment that reflects their importance. But these partnerships require sustained attention, resources, and institutional follow-through.

That should include a more serious Indo-Pacific dimension in Canada’s Defence Industrial Strategy. It makes little sense for Canada to talk about stronger defence partnerships in the Indo-Pacific while concentrating industrial cooperation almost exclusively on NATO partners. If Ottawa is serious about strategic diversification, its defence industrial vision must reflect that.

Finally, Ottawa must address an important economic blind spot. Much of Canada’s Indo-Pacific engagement has focused on expanding markets for energy, agriculture, and other goods. These are essential. But they are only part of the story.

The fastest-growing segments of trade in the region are in services, digital infrastructure, and talent mobility. Education, in particular, is a strategic asset. It underpins people-to-people ties, supports innovation ecosystems, and feeds long-term economic relationships. Yet recent policy changes and the lack of alignment between immigration, education, and trade objectives risk undermining this advantage.

A more integrated approach — linking talent strategy to trade, innovation, and regional engagement — will be essential if Canada is to compete effectively in the Indo-Pacific.

The Challenge Ahead

Delivering on Carney’s ambitious, integrated agenda will require not just new policies, but a step change in Canada’s statecraft capacity in the Indo-Pacific. It will require new ways of working across governments and with the private sector, clearer priorities, stronger coordination, and a greater willingness to measure results not by meetings held or agreements announced, but by outcomes delivered.

Canada enters Carney’s second year in office with a stronger position in the Indo-Pacific than it has ever had. The foundations are in place: increased political attention, expanded partnerships, and a clearer strategic rationale.

But those foundations will only matter if Canada can build the institutional muscle to sustain engagement, follow through on commitments, and turn diplomatic openings into strategic results.

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Chinese State Councillor and Foreign Minister Wang Yi’s visit to Canada this week is significant. It is the first bilateral visit to Canada by a Chinese foreign minister since June 2016, and the most visible sign yet that the thaw in Canada-China relations that began with Prime Minister Mark Carney’s January visit to Beijing is moving into a more consequential implementation phase.

Guest post by Vina Nadjibulla

If Carney’s trip to Beijing marked the turning point—with the announcement of a new Canada-China Strategic Partnership and the political decision to reopen channels of engagement—Wang’s visit is about what comes next.

It is where broad language about pragmatic engagement must begin to translate into sectoral choices, difficult trade-offs, and specific guardrails to ensure that engagement with China advances Canadian interests without compromising Canada’s national security, economic security, or democratic values.

That is why the visit matters. It is not simply a sign that relations are improving. It is a test of whether Canada can manage a more active relationship with China without slipping into quiet accommodation or political deference to Beijing’s agenda.

Carney’s January visit framed China as part of Canada’s diversification agenda and suggested that Ottawa now sees the relationship as one element of a broader effort to build a more resilient Canadian economy and a more independent foreign policy.

But that opening also raises harder questions. Which sectors are truly open to deeper engagement with China? What guardrails have been put in place? What does a “clear-eyed” approach to China mean in practice? Who decides where the lines are drawn? And how much of this will be made public?

Trade

The first area to watch is trade implementation. In January, Canada and China reached a provisional understanding on the two most politically charged irritants in the relationship: China’s retaliatory tariffs on Canadian agricultural and seafood exports, and Canada’s tariffs on Chinese electric vehicles.

The arrangement provided some relief on canola, seafood, peas, and related agri-food products, while creating limited space for Chinese EVs to enter the Canadian market under a quota system.

There is no major new announcement on this file expected during Wang’s visit. The more realistic objective is to show that officials on both sides are working through the details and that the trade mechanisms created in January are functioning.

At some point, the agreement will have to be extended or replaced. The canola relief is time-limited and set to expire at the end of the year, while the EV provisions run on a longer timeline. That makes the current arrangement useful but fragile.

The EV side is particularly complicated. Beijing would like to see more movement from Canada, including a clearer path for Chinese EV production in Canada. But Ottawa’s room for manoeuvre is constrained by the upcoming CUSMA review, the integrated nature of the North American auto sector, and continued U.S. opposition to Chinese EVs entering the North American market.

Some observers had hoped the recent Xi-Trump summit might produce a signal that Washington was open to co-operation with China’s EV sector, or at least some easing of its position.

That did not happen. Instead, there remains clear bipartisan and industry opposition in the United States, rooted not only in trade concerns but also in a broader view that Chinese industrial policy, overcapacity, data risks, and supply-chain dominance pose strategic challenges.

That is why batteries and adjacent clean-energy supply chains may be the more important signal to watch during Wang Yi’s visit. Canada may not be ready to go much further on Chinese EVs, but there could be scope for discussion around battery technology, grid storage, renewable energy components, and other parts of the clean-energy ecosystem.

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Pragmatism and Principles

Pragmatism without principles can become accommodation. Principles without pragmatism can become posturing. Canada needs both.

The question is whether these conversations can be structured in ways that serve Canadian industrial interests without weakening Canada’s position in North America or deepening strategic dependence on China.

This does not mean Canada should outsource its China policy to Washington. But it does mean that any further opening to Chinese EVs, batteries, or related investment must be assessed through the lens of Canada’s North American economic interests as well as its bilateral interests with China.

Investment

The second area to watch is investment. Prime Minister Carney has set an ambitious agenda to mobilize massive new investment in Canada and position the country as a more serious energy, critical minerals, and clean technology player. China has capital, technology, and industrial capacity in many of these areas.

Carney’s January visit to Beijing explicitly pointed to opportunities for Chinese investment in clean energy, batteries, solar, wind, energy storage, wood products, agri-food, and other sectors.

Finance Minister François-Philippe Champagne’s March visit to China furthered this agenda by moving the conversation from broad political commitments to more concrete discussions on investment and sectoral co-operation.

It also underscored a central challenge for Ottawa: much of the Chinese capital Canada may seek to attract is state-directed or closely aligned with Beijing’s industrial priorities. That makes a more disciplined investment framework essential.

Prime Minister Carney has already signalled that some sectors — including AI, quantum, defence, and space — are not going to be on the agenda for deeper co-operation with China. That is important but insufficient.

The harder questions are in the grey zones: oil and gas infrastructure, critical minerals processing, battery supply chains, renewable energy, ports, logistics, data-linked technologies, and advanced manufacturing.

Canada needs a much more granular framework for Chinese investment. It should be clear which sectors are open, which require enhanced review, which require Canadian control or trusted-partner structures, and which are excluded because of national or economic security concerns.

Without that clarity, Ottawa risks sending mixed signals — encouraging investment in broad terms while leaving investors, provinces, allies, and the Canadian public uncertain about where the guardrails actually are.

National Security and Rule of Law

The third area is national security and rule of law. One likely outcome of Wang’s visit is progress on reviving bilateral dialogue mechanisms, including the National Security and Rule of Law Dialogue created in 2016 and left dormant after the crisis in relations that began in 2018. Reviving channels of communication is sensible.

Canada and China need forums to discuss difficult issues, including foreign interference, transnational repression, intimidation of diaspora communities, arbitrary detention, human rights, and the treatment of Canadian citizens and residents connected to China, Hong Kong, Tibet, Xinjiang, and Taiwan.

These issues do not disappear because economic ties improve. Nor can they be handled entirely behind closed doors. Diplomacy, of course, requires private conversations. But in a democracy, public trust also requires some degree of transparency and public clarity. Canadians need to know that the government is not trading silence on values and security concerns for short-term commercial gains.

Canada’s task is not to exchange one form of strategic dependence for another. It is to reduce vulnerability, expand options, and build resilience.

That is especially important because this visit will be watched not only in Ottawa and Beijing, but also in Washington, Tokyo, Canberra, Taipei, Manila, and other capitals. Canada’s partners understand why Ottawa wants to stabilize relations with China.

Many of them have their own complex economic relationships with Beijing. But they will also be watching whether Canada’s new pragmatism is disciplined and principled, or whether it becomes a softer form of strategic accommodation.

This regional context matters. China is not just a large market. It is also a Party-state whose policies are reshaping the Indo-Pacific security environment. Its pressure on Taiwan, coercive behaviour in the South China Sea, use of economic leverage, and support for Russia’s war effort in Ukraine are not peripheral to Canada-China relations. They are part of the strategic context in which this relationship now operates.

A credible Canadian China policy must therefore do several things at once. It must pursue areas of co-operation where Canadian interests are clear — agriculture, energy, climate, public health, financial stability, people-to-people ties, and carefully screened investment.

But it must also speak clearly about the sources of risk and the systemic challenges China represents. Pragmatism should not mean pretending that strategic differences are merely irritants to be managed.

The American Angle

The final and perhaps most delicate dimension of Wang’s visit is the United States. Beijing’s outreach to Ottawa is not only about Canada. It is also about signalling to Washington that China can deepen relations with one of America’s closest allies and neighbours at a moment when U.S.-Canada relations are under significant strain.

For Beijing, that is a diplomatic and propaganda win. It allows China to present itself as a stable and pragmatic partner while the United States is seen as unpredictable, protectionist, and transactional.

Canada should not be naïve about that. The fact that China sees opportunity in Canada’s search for greater strategic autonomy does not mean Canada should refuse engagement. It means we must be exceptionally clear about our own interests.

The United States remains Canada’s most important economic and security partner. That will not change because of one visit by Wang Yi, or a trade arrangement with China, or even a new strategic partnership. Canada’s task is not to exchange one form of strategic dependence for another. It is to reduce vulnerability, expand options, and build resilience.

That requires careful triangulation. Ottawa is trying to diversify beyond over-dependence on the U.S. market while preserving preferential access to that market. It is trying to engage China where there are economic gains, while protecting sensitive sectors and reassuring allies. It is trying to build a more independent foreign policy, while recognizing that geography, defence, energy, and trade still bind Canada deeply to North America.

This is not an easy game. Hedging is difficult for any country; it is especially difficult for Canada because our economic exposure to the United States is so high and our domestic capacity to absorb shocks remains limited. But that is precisely why Wang Yi’s visit is consequential. It forces Ottawa to move from rhetoric to choices.

The government has described its China policy as pragmatic. That is the right starting point. But pragmatism without principles can become accommodation. Principles without pragmatism can become posturing. Canada needs a balance of both.

Clarity is Crucial

Wang Yi’s visit should therefore be judged by the clarity it produces. Does it tell Canadians which sectors will move forward and under what conditions? Does it show how the government will protect national security and economic security while pursuing trade and investment?

Does it provide reassurance that foreign interference, transnational repression, human rights, Taiwan, the South China Sea, and Ukraine remain on the agenda? Does it demonstrate that Canada can engage China without becoming complicit in CCP’s narrative?

The Carney visit opened the door for greater Canada-China engagement. Wang Yi’s visit begins the harder work of deciding what Canada is prepared to do on the other side of it.

Vina Nadjibulla is Vice President of Research & Strategy at the Asia Pacific Foundation of Canada. This commentary was originally published in Policy Magazine.

Donald Trump was in Beijing last week for a summit with General Secretary Xi Jinping. A lot has changed since the last American state visit to China in 2017. Then he was still seen as the de facto leader of an admittedly disoriented West. Nine years later, as Trump sat at that long table in the Great Hall of the People, he did so only as the president of the United States. “America First” is eroding Washington’s strategic position toward America alone.

This is Part II of a series of posts expanding on my essay in Foreign Affairs, Trump’s China Trap. I invite you to read it (or the archived version) and Part I. It takes some time for the real results of summits to manifest in the tea leaves. So while everyone else does hot takes, here we’re going to continue exploring the dynamics that shape these visits. We’ll drink the Trump-Xi tea once it’s properly steeped.

The United States’ greatest advantage over China isn’t technology, military power or the dollar. It’s allies. The Global West is half the world economy and the largest concentration of advanced manufacturing, capital markets, universities, and intelligence-sharing in human history. China has no equivalent. And yet Trump has spent the past year systematically dismantling that advantage, and in so doing, weakened his own hand in negotiations with Xi.1 PRC officials have spent a year watching this and exploiting their growing leverage with every other visitor they receive accordingly.

The result has been a succession of Western leaders parading to Beijing in pursuit of various prizes, only to find themselves cast as supporting characters in the Chinese Communist Party’s propaganda theatre. If insanity is doing the same thing over and over again and expecting different results, why do these politicians—now including Trump—keep acting like this?

What can IR theory tell us about this behaviour?

The prevailing narrative is of a long-term geopolitical shift in the relative power of the United States and China, and with that a shift in the international system from unipolarity toward bipolarity or multipolarity (the remaining debate centres on which it will be: G-Zero, G-2 or multiplex). The immediate driver is Trump’s own neopatrimonial self-dealing, bully’s impulsive aggression toward weaker countries, and insecure vacillation in the face of PRC pushback. For lesser powers, that toxic combo has further stoked anxiety about America’s flagging willingness to shoulder the burden of hegemony, and resentment of Washington’s increasingly insistent demands on allies and partners to do more. Trump has his own reasons, which we’ll come back to another time. First, the analytical framework.

Most commentaries amount to saying that these Western visitors to China are hedging under duress. In other words, they’re cultivating competing relationships to keep options open; shoring up a vulnerable flank with Beijing so they can focus on managing pressure from a newly truculent Washington. As Suzanne Nossel recently observed:

States are no longer hedging within a system that is episodically volatile but out of a recognition that there no longer is much of a system at all. The rise of what we might call “hedgemony” is both a response to the reshuffling of the global order and an accelerant of this transformation.

That framing’s broadly correct in aggregate and consistent with my own argument, (and I wish I’d thought of “hedgemony”) but both essays blur distinctions that matter. International relations theory offers a more precise set of lenses for sorting through what these leaders are actually doing—and why most of it isn’t working. Let’s shine five theoretical spotlights, each of which illuminates a different layer of the problem.

1. Historical reality: states facing the same threat choose divergent strategies

The classic neorealist binary—balance against threats, or bandwagon with them—has been pushed back on for decades by historians of actual diplomatic practice. Paul Schroeder’s 1994 International Security essay, “Historical Reality vs. Neo-Realist Theory,” is the canonical statement against neorealism. Surveying centuries of European diplomacy, Schroeder argued that states facing the same threat regularly chose among the following distinct strategies:

1. Balancing: forming counter-coalitions against the threat;

2. Bandwagoning: joining the stronger side for protection and payoffs at the cost of some independence—at essence, Thucydides’ “the strong do what they can and the weak suffer what they must”;

3. Hiding: declaring neutrality, withdrawing into isolation, or seeking quiet protection without alliance commitments;

4. Transcending: trying to escape the conflict altogether through new institutional arrangements involving consensus, norms, and shared procedures; and

5. Specializing: surviving by claiming distinctive functional roles in the international system.

Two of Schroeder’s observations particularly matter here. First, bandwagoning is historically more common than balancing for smaller powers, particularly when the cost of resistance looks high and the rewards of accommodation look immediate. Second, in every era he studied, states facing the same threat chose divergent strategies, and those divergences often mattered more than systemic constraints did.

That second point describes the parade of visits exactly. Beijing isn’t facing a coherent Western response. It’s facing over three dozen different government responses.2 Each is running its own variant of hiding, bandwagoning, and balancing—and PRC officials are calibrating their responses to each.

2. When statesmen think defence works, they pass the buck

Schroeder’s typology is the lens for sorting individual leaders. But the deeper diagnosis of why so many of them are converging on accommodation comes from an earlier essay, Thomas Christensen and Jack Snyder’s “Chain Gangs and Passed Bucks: Predicting Alliance Patterns in Multipolarity.” They argued against Kenneth Waltz’s neorealist theory that multipolarity is inherently unstable. Their move was to add a variable: the perception of the offence–defence balance. Two distinct alliance pathologies follow from it:

Chaining into a gang: When states perceive offence as dominant, when they believe an attack on any ally rapidly degrades everyone’s security, they form tight, unconditional commitments. The pathology is chain-ganging: the alliance pulls members into wars they wouldn’t otherwise have chosen. 1914 is the classic example.

Passing the buck: When states perceive defence as dominant, when they believe they can survive without immediate balancing, they free-ride. They hope someone else will bear the costs of confronting the rising power. The pathology is buck-passing. The interwar 1930s is the searing historical case: Britain and France passed the buck to the USSR; the USSR tried to pass it back; everyone hoped someone else would handle Hitler.

Christensen and Snyder also made a crucial, less remembered point: those perceptions of the offence–defence balance are usually wrong, and the source of the misperception is structural. Pre-1914 leaders thought offence was dominant because 19th-century European wars had been short and decisive; but machine guns, barbed wire, and entrenched defences already favoured defenders. Pre-1939 leaders thought defence was dominant because they remembered the trenches; but mechanized warfare had restored offensive advantage, which they didn’t recognize until France fell in six weeks. The category they ended up in was the one their experience had taught them not to expect.

Let’s apply that to 2026: The formative experience of the current generation of Western policymakers was the post-Cold War era: economic integration, sanctions diplomacy, the inherited Cold War lesson that engagement transformed authoritarian behaviour, the apparent victory of liberal globalization. That experience produced a perception that defence would be successful against PRC mercantilism and coercion; that liberal economies can absorb the costs, strategic patience pays and any individual sector lost is recoverable. This perception is the engine of the buck-passing visible across the wave of visits.

But if Christensen and Snyder are right about the mechanism, then the perception is probably wrong. The Second China Shock, the CCP’s simultaneous coercion of Australia, Lithuania, and Canada, its October 2025 demonstration of rare-earth chokepoint control, the €310 billion EU–China goods trade deficit overtaking the U.S.–China trade deficit: these all suggest that when it comes to economic coercion, offence is more dominant than Western leaders have expected. French President Macron’s “matter of life and death for European industry” formulation is an attempt to correct the misperception. Whether other leaders accept—and act on—the correction is the exam question. Christensen and Snyder would predict they probably won’t, until a triggering event forces them to.

That’s the structural worry the interwar parallel actually carries: not that Xi is Hitler or Trump is Chamberlain, but that the same misperception of the relative power of offence and defence could produce the same window of consolidation by a revisionist power (China) that buck-passing always opens. It’s what keeps me and many likeminded China hands up at night.

Schroeder himself noted his “hiding” category may be related to buck-passing, but insisted hiding is broader, and can involve “a search for some method of handling the threat apart from being drawn into the power-political fray, often by a very active foreign policy.” It’s a meaningful distinction. The four visits of Spain’s Pedro Sánchez we discussed in Part I of this series are active foreign policy, not passive free-riding. Hiding captures agency in seeking accommodation in a way buck-passing doesn’t. The two categories overlap but aren’t identical. Buck-passing illuminates the approach of most visiting leaders more clearly: they acknowledge the threat exists while counting on someone else to bear the cost of confronting it.

3. Bandwagoning isn’t always defensive—sometimes it’s opportunistic

A predictable critique of the typology is that several of these leaders “aren’t really bandwagoning” because they don’t face a security threat from China in any conventional sense. Randall Schweller’s 1994 essay “Bandwagoning for Profit: Bringing the Revisionist State Back In” dismantles that objection. Schweller argues that realist scholar Stephen Walt’s balance-of-threat theory—in which states either balance against a threat or bandwagon by capitulating to it—systematically excludes the most common form of bandwagoning: aligning with a rising power to gain, not because you have to.

In Schweller’s vocabulary, “balancing is driven by the desire to avoid losses; bandwagoning by the opportunity for gain.” He distinguishes “jackal bandwagoning”—toadying to a rising expansionist power to share the spoils—from defensive “piling-on” bandwagoning with a status-quo coalition once an outcome is already determined. The first decreases system stability; the second can enhance it.

This is the move Slovakia’s PM Robert Fico and (less openly) Spain’s Sánchez are making. Fico attending a WWII anniversary parade alongside Vladimir Putin and Kim Jong-un while attracting a Chinese battery factory with €214 million in Slovak state support while giving the EU the finger is jackal bandwagoning: not a defensive response to threat but an offensive bet on the rising side of an order in motion. Spain’s Chery-Ebro plant is bandwagoning and free-riding in a Chinese electric vehicle: Sánchez accepted investment from Chery that undermines the EU’s own economic security defences, on the bet that Brussels will absorb the systemic cost. South Korea’s Lee softening the semiconductor coalition while asking Xi to mediate with Pyongyang has the same flavour: trade short-term security goods for accommodation gains.

Schweller’s point is that this kind of behaviour isn’t an aberration. Bandwagoning, he argues, is more common than balancing because it “rarely involves costs and is typically done in the expectation of gain.” Balancing is costly. Most states would rather not do it. The cases that look puzzling under Walt’s framework—why is country X accommodating when it isn’t under direct threat?—stop being puzzling under Schweller’s: because there are gains on offer and someone else is paying the systemic cost.

4. Every visit is an entrapment/abandonment trade

All these leaders seem to be following the Corleone family maxim: keep your friends close, but menacing great powers closer. They hope proximity will unblock channels for dialogue and enable early warning of intentions. But with the ultra-secretive Leninist Party-state, proximity is never symmetric. Most guests seek influence in vain, reveal far more than they learn, and risk being co-opted into its agenda and narratives.

A fourth lens, Glenn Snyder’s 1984 “The Security Dilemma in Alliance Politics,” names what each of these leaders is actually navigating in real time. Every ally faces two opposed risks: entrapment, being dragged into a partner’s conflicts and positions you’d rather avoid; and abandonment, the partner walking away from commitments when you need them. The risks are inversely related. Pushing back hard against a patron reduces entrapment but increases abandonment. Hugging the patron close reduces abandonment but increases entrapment. U.S. allies are living this.

Trump has rewritten both sides of that trade-off simultaneously. He’s raised abandonment risk by publicly questioning NATO Article 5, treating allies as transactional counterparts, and conceding the Nvidia H200 semiconductor framework after years of allied coordination. And he’s raised entrapment risk in a particular American way: not entrapment into a hot war, but entrapment into volatile tariff escalations, secondary sanctions exposure, and rhetorical flourishes allies are embarrassed to be associated with.

Carney, Starmer, Merz, and Lee are all visibly making entrapment/abandonment trade-offs in their Beijing conduct. Meeting Xi in China is a form of insurance against U.S. abandonment (“we’ll keep this channel warm in case Washington erupts”) and partly an effort to reduce entrapment in Trump’s next escalation (“we’re a separate diplomatic actor with our own China relationship”).

The trouble is that when every junior partner runs the same play simultaneously, as my essay argued, the collective effect is to weaken the alliance system the abandonment fear is responding to. Each individual hedge is rational. The aggregate is the disintegration Macron warned Xi about. Mao thought chaos is a ladder. Xi’s handling of the Trump visit suggests he may worry it’s more of a pit—but don’t expect him to lift a finger to stop others falling into it.

5. Hedging as neutrality with a contingency plan

Finally, the more recent IR literature on hedging—most cleanly articulated in Fabio Figiaconi’s 2025 paper “Choosing not to choose”—helps explain why “hedging under duress” so often produces incoherence. Figiaconi reconceptualizes hedging as a new category of neutrality: adopted voluntarily by secondary states when they perceive a rise in great-power tensions and a possible power transition; grounded in the state’s own strategic calculations rather than law or morality; never declared explicitly; and easily abandoned when conditions change.

The distinguishing feature, in Shakthi De Silva’s phrase that Figiaconi cites, is the contingency element: hedging isn’t just keeping options open, it’s actively developing fallback options in case the system becomes more polarized. As my high school chemistry teacher used to say, if the experiment doesn’t work, “you gotta have a backup plan”.

That contingency element is what most of the Beijing paraders aren’t actually doing. They’re taking the bilateral commercial gains now and trusting that systemic contingencies—EU-level countervailing duties, U.S. security guarantees, the WTO—will be supplied by someone else. That’s not hedging in Figiaconi’s strict sense. It’s buck-passing play-acting as hedging.

Real hedging would mean each leader returning from Beijing with a parallel investment in the institutional fallback mechanisms. Few of them are.

International Relations 201 class dismissed. Want more? Here’s some recent media coverage of my essay and its arguments:

Konrad Yakabuski, “On his second China trip, a weakened Trump comes face to face with the new world order”, The Globe & Mail, 2026-05-13 (archived)

Michael Koziol, “The ‘big danger’ for Australia as Trump meets Xi”, Sydney Morning Herald, 2026-05-14 (archived)

Baptiste Gauthey, “Donald Trump a poussé ses alliés dans les bras de Xi Jinping” : l’analyse de Michael Kovrig,” L’Express, 2026-05-14 (archived)

Next: Trump and Xi at the Temple of Thymos

With the assistance of Patricia Xavier and Joseph Widacki

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An unprecedented wave of Western leaders has visited China since Donald Trump’s return to the White House. Now this 访华潮 (fǎng huá cháo) of politicians is rising to a foamy crest as the U.S. President rolls into Beijing this week. While each dignitary arrives in Xi Jinping’s court hoping to stabilize relations and influence the General Secretary, instead they usually get co-opted into serving the Communist Party’s agenda and participating in its propaganda. Even with American power behind him, Trump will almost surely get trapped in the same accommodating pattern.

Last week, Foreign Affairs published my essay about this problem (gift link).1 Now, in this first of a series of posts on the wave, we’ll explore some of the more compelling research findings that didn’t make it into Foreign Affairs and extract some pointers the Donald and those who follow him should consider.

The crux of the problem: By accepting the terms the CCP sets for meeting Xi, and by performing in his autocrat’s pageant, they’re fulfilling his yearning to be recognized as the superior statesman—what Francis Fukuyama would call his megalothymia. More dangerously, as global deference to Xi’s power becomes normalized, the risk grows that any dependence on China will be weaponized by a regime that sees displays of acquiescence as evidence of weakness on the part of liberal democracies.

To end this cycle, the essay argues, we need a different measure for success for visits to China: not the dollar value of the deals signed or the warmth of the welcome, but the level of constraint imposed on the Party-state’s coercive impulses. What really matters is not what each leader gets, but in aggregate what the Party learns.

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For some perspective, let’s run through all the visits since Trump’s inauguration.2

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Now let’s dive deeper into some recent visits to better understand their dynamics.

Carney’s contradiction: do as Davos Man says, not as he did

The 2026 wave’s most consequential visit, Mark Carney’s time in Beijing reveals the pattern in its most paradoxical form. The archetype of what Samuel Huntington called Davos Man, Carney used explicit normalization language (“renewing the relationship,” “strategic partnership”), framed PRC coercion as a trade irritant to be negotiated away, relied heavily on institutional mechanisms and memoranda, seemed optimistic that reciprocal widening in market access could stabilize relations, and minimized the moral signalling. My impression is he’s not naïve, he’s invested in systems: a crisis manager attempting to re-wire exposure through diversification and technocratic bargaining rather than power signalling.

Carney is also the only Western leader who’s articulated a coherent strategic alternative to the binary of either balancing against or bandwagoning with China. His Economist essay and World Economic Forum speech laying out his “variable geometry” concept — middle powers acting through new coalitions of necessity rather than depending on a reliable America — are the most ambitious recent statements on how transcending the binary might actually work in practice. I wrote about them for Foreign Policy in a February commentary, “The Carney Doctrine Can Be More Than a Davos Speech.”3

But Carney’s conduct in Beijing was the opposite of his Davos rhetoric, a contradiction that’s largely been ignored. As I analyzed in the Toronto Star, his delegation appeared overly conciliatory.4 Rather than resist the Party’s status-defining choreography, Carney leaned into it more than most other Western leaders had. The smiles, the “new world order” line caught on video with Premier Li Qiang, the public adoption of CCP propaganda about multilateralism, the rejection of “megaphone diplomacy” — these were the price of entry to the audience with Xi, and Carney paid willingly.

Canada’s PM lowered import barriers to Chinese EVs in exchange for tariff relief on agri-food exports, fracturing North American alignment on Chinese state-subsidized goods. Beijing established that a U.S. ally spurned by Trump could be pressured to break ranks—and that Canada would tolerate hostage-taking, executions of its citizens, and active threats and interference in the hopes of diplomatic stability and economic relief. That set a dangerous precedent for every subsequent visit.

The flurry of commentary Carney’s ideas spurred often overlooked his performance in Beijng. But with the CCP, optics always have enormous significance. Economically, Canada matters relatively little to most Chinese firms. The real prize for the Party wasn’t access to Canada’s market, but rather the spectacle of America’s neighbour and longtime loyal ally seemingly kowtowing. While Xi, Putin, and now Trump may see the comportment of that delegation and others as the toadying they expect all weaker countries to show, it sets an awkward benchmark for others and contributes propaganda-ready evidence that justified outrage at PRC violations of international laws and norms can be dismissed as irrelevant or politically-motivated. As Carney himself said days later at Davos:

“When we only negotiate bilaterally with a hegemon, we negotiate from weakness. We accept what is offered. We compete with each other to be the most accommodating. This is not sovereignty. It is the performance of sovereignty while accepting subordination.”

Variable geometry is a strategy; situational ethics is a failure of principle. Carney has the strategic vision. The question now is whether his further conduct will match it, or whether his doctrine began consuming itself before it even got started.

Starm Offensive: talk is cheap when it’s private

The first UK PM visit to Beijing in eight years was an effort to revive relations after they had gone from a “golden era” under David Cameron to an ice age after China effectively abrogated the Sino-British joint declaration on Hong Kong and various disputes accumulated. Saying he wanted to avoid blowing hot or cold, Sir Keir Starmer set off for Beijing in late January as a managerial pragmatist under severe political constraint due to his domestic unpopularity. Looking for retail wins on what insiders called another “Starm offensive,” he ran a classic business delegation visit heavy on formal cordiality, commercial dealmaking and sectoral agreements.

Ahead of his trip, I offered several recommendations in The Times of London5 and a Substack post. None were more pressing than to put political prisoner Jimmy Lai—a Hong Kong publisher, democracy advocate and British national—and roughly 200 other political prisoners in Hong Kong front and centre. Publicly. Defenders of the visit answer that he did raise Lai’s case. Privately. What of it?

This is where the “cheap talk” literature in international relations is helpful. From Crawford and Sobel onward, the foundational insight is that signals which generate no audience cost convey no information. A leader who discreetly mentions a thorny issue can claim at home to have “raised the matter” while the other government understands no political price will be paid and no consequences imposed. A Western official once told me of a visiting prime minister who remarked to Hu Jintao that he’d noted Hu’s earlier role as Party Secretary in Tibet—thus enabling him to report that Tibet had been discussed. That’s the cynical floor of private representations.

Starmer and Lai showed the ceiling isn’t much higher. Set Lai’s case against two precedents and the choice becomes harder to explain — until you notice what actually predicts the response. In 2013, when British investigator Peter Humphrey was detained in Shanghai for 23 months on fabricated charges, Prime Minister Cameron and Foreign Secretary Osborne were in the midst of their “golden era” sucking up to China. Osborne went to Beijing weeks later to announce the “next big step,” and the case stayed largely consular. In 2019, when a Hong Kong national working at the British consulate in Shenzhen named Simon Cheng was tortured into confessing that Britain was behind the Hong Kong protests, the golden era was already collapsing under those same protests; Foreign Secretary Dominic Raab used the word “torture,” summoned the ambassador, expressed “outrage,” and granted Cheng asylum. It was a staggering contrast to the response to Humphrey’s detention—and to Lai’s.

Days after the visit, a Hong Kong court sentenced Lai to 20 years on manifestly political charges. London responded with statements of disappointment and an immigration tweak for Hongkongers that was already in the policy pipeline. No ambassadorial recall, no Magnitsky-style sanctions on the responsible Hong Kong officials, no restriction of bilateral contacts, no use of the leverage the visit itself had just created. In Starmer’s personal Substack post the weekend after returning—framed around cost-of-living relief and “a shared sense of history”—Lai’s name doesn’t appear. As Britain drifts back toward an engagement posture, the tools to apply pressure haven’t disappeared. The will to use them has.

First we take Merz… then we take Berlin

German Chancellor Friedrich Merz’s visit produced a mixed outcome. He talked up Xi’s approval of purchases of Airbus jets—which China Eastern Airlines and China Southern Airlines likely already needed—as the most tangible success of his trip. But Beijing has used political calibration of aircraft orders as diplomatic currency since Richard Nixon’s 1972 visit, and is on track to repeat the trick with Boeings for Trump. To his credit, Merz did raise festering problems in the relationship between Germany and China, including overcapacity, the artificially weak yuan, rare-earth coercion, and support for Russia’s war in Ukraine more directly than other visitors, both publicly and privately. However, he also adopted some of the CCP’s preferred language while softening Germany’s own, and a month later, Merz signaled further accommodation by saying he could “imagine” an EU-China free trade agreement that Chinese officials are pushing. Much more in these posts:

Flirty Sánchez: Beijing bikini bares soft underbelly

The Foreign Affairs essay necessarily treats Spanish Prime Minister Pedro Sánchez briefly, but his case is worth examining in more detail. Sánchez is a frequent flier: four visits in four years.

In April 2025, arriving just nine days after Trump’s “Liberation Day”, he became the first European head of government to meet Xi in the new tariff era—and used the visit to call publicly on the EU to rethink its China relationship, in open defiance of a U.S. Treasury Secretary warning that Spain was “cutting its own throat.” The visit continued a pattern from prior trips: diluting EU countervailing duties on Chinese EVs from within (Spain had abstained on the October 2024 vote) and modelling how member states could quietly drift from Brussels.

Sánchez then dispatched his foreign and economy ministers, sent the King and Queen on the first state visit in 18 years, with a wreath laid in Tiananmen Square (the EU still has an arms embargo on China for the 1989 massacres sparked there).

On his April 2026 trip, Sánchez signed a permanent strategic dialogue mechanism that institutionalizes the channel beyond his own tenure.

Each individual trip has looked defensible: agri-food protocols on pork by-products, cherries, pistachios, and dried figs; Chinese battery and EV plant investment; and a hedge against U.S. tariffs and an unpredictable White House.

But the cumulative numbers tell a different story. Spain’s goods trade deficit with China widened from €37.7 billion in 2024 to €42.3 billion in 2025; Spanish corporate investment in China collapsed to €4.54 million in 2025—the lowest level in three decades—while Chinese investment into Spain rose to €643 million, a 160-to-1 asymmetry. Chinese state-supported companies are establishing manufacturing footholds inside Spain explicitly engineered to circumvent EU defenses. The Chery-Ebro EV plant near Barcelona, marketed as a flagship Chinese investment, ships prefabricated vehicle bodies from China for final assembly in Spain to obtain EU origin status, hollowing the bloc’s countervailing duties on Chinese EVs from within. Madrid waves through such investment without technology-transfer requirements.

Most consequential is the language Beijing put in his mouth. The official Chinese readouts of Sánchez’s April 2026 meetings with both Xi Jinping and NPC Chair Zhao Leji say Spain “firmly adheres to the one-China principle” rather than the “one-China policy.” The “principle” accepts Beijing’s claim that Taiwan is inalienably Chinese. The “policy” — used by most Western governments, including Spain’s own Foreign Ministry — acknowledges only that Beijing holds that view. The PRC has been pressing other capitals to make exactly this substitution for years; with Sánchez, it appears to have succeeded. His office subsequently pointed reporters to the Spanish Foreign Ministry’s standing “policy” position, but the readouts remain on the PRC MFA’s website.

Beijing to Canberra and Back

Misrepresenting the one-China policy, leader-level meetings, and the impasse endures

A one-China policy or principle…

Read more

4 years ago · 1 like · 1 comment · Benjamin Herscovitch

Sánchez also endorsed Xi’s “Four Global Initiatives” by name, echoed China’s “new multipolar order” rhetoric (CCP code for supplanting the United States) and opposed a “new Cold War” (a CCP thought-terminating cliché to suppress awareness of the threat it poses and efforts to align against it). To his credit, Sánchez did use a lecture at Tsinghua University to call on China to open its market so that Europe wouldn’t have to close its own:

“To help us correct the current trade deficit we have with it. A deficit that is not balanced, that grew again by 18% last year alone, and that is unsustainable for our societies in the medium and long term. And it is unsustainable because of the isolationist movements it fuels and the grievances and social pain it causes. To give you an idea, our trade deficit with China already represents 74% of our country’s total deficit.”

That was what he needed to say. Still missing was any hint of consequences for China not acting, or any mention of who needs to do what to make change happen.

Spain’s defenders argue that engagement is “structured and conditioned”—that Sánchez’s access can be used to extract concessions on rare earths, services markets, and Russia-Ukraine. Well, after four years and four visits, Beijing has yielded on none of them. As Spanish economist Alicia García-Herrero notes, the relationship has become deeply unbalanced and “Madrid is increasingly losing more than it contributes.” Chinese commentators now describe Madrid’s posture as a model—样板 (yàngbǎn)—for other Europeans to follow. European capitals describe it as an anomaly closer to Orbán’s Hungary.

Cumulatively, Spain has converted itself from a hedging middle power into something approaching a junior partner in Xi Jinping’s preferred world order. Where Carney proffered cordiality and a crack in fortress North America, and Starmer and Merz allowed critical problems to fester, Sánchez delivered legitimacy and a soft underbelly for Europe. Most dangerously, he represents the debased equilibrium toward which the wave of visits will continue drifting if no one summons the courage and will to break the pattern.

All of these developments raise a question: why are Western leaders submitting to China, one by one, when they would be better off presenting a common stance with Beijing? In the next post, we’ll apply international relations theories to explain what compelled these leaders to act as they did.

With assistance from Patricia Xavier and Joseph Widacki. Thanks for reading!

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What kind of world does the Chinese Communist Party want? It’s not trying to overthrow the international system in one dramatic rupture. Instead, amidst the current chaos, it’s moving more subtly: embedding itself in existing layers of order, preserving institutions and rules it can exploit for control and influence, while working to purge the liberal elements that constrain its Leninist and realist geopolitical logic.

That question was at the heart of a panel discussion I recently had at London’s Frontline Club with King’s College London scholar Olivia Cheung and Carnegie Russia Eurasia Center director Alexander Gabuev, moderated by former BBC China correspondent Robin Brant. Organized by the China Correspondents’ Club of London, our conversation focused on General Secretary Xi Jinping’s ambitions and understanding of power, and the opportunities he sees in the disruption of the Trump era and resulting Western disunity. We also touched on China’s economy and its relations with Europe, Iran, Russia, Taiwan, Ukraine, and the Global South. I hope you enjoy this edited transcript of our March 30 discussion.

China wants preeminence, not hegemony

Olivia Cheung: China is aiming for global preeminence, but not global hegemony. From a Western perspective, that distinction might seem purely academic. It might not make a difference, but for countries that do not share Western values or take them with skepticism, it matters. So how does that distinction look in practice? There are many examples. If we look at current events, we can make it more concrete, but in broad terms it means that China is there to defend its bottom line, red line core interests as defined by the Chinese Communist Party, and the successful defence of these is considered absolutely necessary.

These core interests include security, China’s political system and way of governance, sovereignty, and development. It also means the Chinese Communist Party takes very seriously the need to resist unwelcome influence or leverage from other countries, including the ability to impose costs on countries that challenge these core interests. This kind of bottom line or red line thinking remains crucial in CCP mentality.

The other part of China’s perception of global preeminence is the desire to be recognized as a global moral force for good for all humanity. There is some messaging in that, but China is serious about it, so it should not be dismissed as a slogan. Materially, it means China wants the world to embrace it as a force for modernization, economically and technologically, and in a more “spiritual” sense, to stress its identity as an alternative power without colonial baggage, and as a reliable partner to uphold a rules-based international order while also changing the rules to make them more “just and fair”, and in that sense democratizing international relations in a way that would uphold the interests of the Global South, with China at the centre.

China sees global relations not in terms of competition with the United States, but as a pursuit of global preeminence on these terms. To do that, China has a global strategy with two main components: The first is to democratize international relations by cultivating support from the Global South, and the second is to prepare to take Taiwan and achieve this ambition.

These two goals are what my colleague Professor Steve Tsang and I conceptualize as the “double pivots” of China’s global strategy in a forthcoming work we are publishing with Oxford University Press in September.

The CCP wants to reshape the international system to better advance its own interests

Robin Brant: China as a force for good—its ability to persuade those who may need persuading—is that possible? Do you see that happening in the years ahead?

Michael Kovrig: The Party-state and its propaganda organs are investing billions to persuade the world of that. There are people within that system who may not quite frame China as a “force for good,” but who believe their system is highly effective at accomplishing ends.

The Party-state runs on a blend of Leninist ideology, political culture, and organizational behaviour. It’s not a government in the way a Western liberal democracy operates, with a focus on short-term deliverables and responsiveness to voters. The Party-state is different. It’s oriented toward long-term grand goals, with elements of utopianism, even alongside political corruption, internal infighting, and contradictions.

It’s mobilizing toward those goals and wants to embed itself in the international system, which makes it a revisionist power. It seeks to change the system to make it more amenable to an authoritarian, one-party state that, in many ways, behaves as an offensive realist actor. It views the liberal rules-based international order—the post–World War II order led by the United States and its allies—as a hostile environment.

So it wants to reshape that order. It doesn’t necessarily want to cause revolution or act as aggressively as Vladimir Putin’s Russia, but to move more subtly, reshaping and in some ways hollowing out the system into something it can influence and control. It prioritizes state power and the preservation of Chinese Communist Party rule. In many ways, it believes in what it’s doing.

But from the perspective of Western liberal democracies, or those who emphasize the United Nations Charter, Universal Declaration on Human Rights, and Enlightenment principles, this is a hostile geopolitical agenda. It ultimately seeks to weaken the United States and push it down the hierarchy of countries, while dividing and weakening Western nations.

I would disagree with the idea that this is about “democratization of international order”. It reflects a hierarchical view of the world.

It does aim to push back against what it sees as American hegemony, and I agree with Olivia’s characterization that it seeks preeminence rather than hegemony. That distinction can resemble a rising power seeking more influence without taking on all the responsibilities that come with it. Part of what the Trump administration grapples with is the reality that the established hegemon was growing tired of those burdens. China’s seeking greater influence without assuming all the associated costs.

At the same time, China wants to present itself as a leader of the Global South that offers those countries a greater voice in world affairs. For some, that’s appealing. But expectations that this would produce a genuinely more democratic system overlook how the CCP operates. The system would be authoritarian and hierarchical. For smaller or weaker countries, any influence they gain would be limited and exercised within a China-centric hierarchy, with China as the central state shaping the system.

Robin: Alexander, Donald Trump—certainly in his second iteration—and the lack of movement around him, and those around Xi Jinping more broadly, share disruptive tendencies, don’t they? They are similar in that respect. There is quite a lot that these two men, and the political acolytes around them, share, particularly in the disruption and change they want to see?

Alexander Gabuev: If anyone really knew what Trump is trying to achieve, they could write a memorandum, enlighten all of us, and probably make a lot of money. The famous Western “philosopher” Roger Federer said that success in a game is not about hitting more winners than your opponent, but about making fewer mistakes. If I look at what Trump does and what China does, we can agree that China makes plenty of mistakes, particularly in economic policy, suffocating entrepreneurship. There are aspects of Chinese policy that are mistakes not just because of value differences, but because they do not bring China closer to its aims of preeminence.

Trump’s disruption is giving Beijing an opening

Robin: Michael, can I talk to you a bit about Western countries and the NATO alliance, and what Donald Trump has forced NATO to do—finally get its act together, he would say—certainly in terms of their own military spending? But a stronger NATO is not really what Xi Jinping wants to see, is it? And more broadly, the reaction from parts of the West to Trump and what he is doing to some of these international institutions.

Michael: The Chinese Communist Party is making hay while the sun shines. It’s seizing some advantages from what the Trump administration is doing, particularly in the way it’s doing it. What Party-state wants is a weak and divided European Union and a broken, non-functional NATO, because it views any coalition of states, particularly liberal democracies, as a potential check on its room to maneuver and its power to shape the global system.

Since the second Trump administration began, there has been what the Chinese have called a “访华潮” (fǎng huá cháo): a wave of leaders going to visit China—more this year, in just the last 2–3 months, than in any year since the G20 Hangzhou Summit, which was before COVID. Why are so many Western politicians—Keir Starmer, Friedrich Merz, Emmanuel Macron, Pedro Sánchez—rushing to Beijing? What are they trying to achieve with these visits?

In some cases—like Canada, the UK, and Australia—they’ve been trying to get out of the doghouse. They were put there by China, or relations went into a deep freeze due to various disputes, and they’re trying to repair those relationships. But all of them are also looking for narrow economic benefits—cutting tariffs, securing market access, or increasing exports. They’re also trying to establish personal channels with Xi Jinping, because Xi is now so centrally powerful that without access to him and his circle, it’s very difficult to resolve problems.

They’re worried Trump is going to create more chaos, and that when he visits Beijing, he may cut a deal with Xi that leaves them exposed or puts them in a more forward-leaning or hawkish position on China than Trump himself. So they’re behaving like cyclists in a peloton that’s lost its leader, where no one wants to be at the front taking the wind.

In trying to ingratiate themselves, they’re acting on China’s stage and validating CCP narratives about China’s inevitable rise, the failure of decoupling, and the relative weakness of the West. This creates a collective action problem: while each country’s behaviour is individually rational—they want access to Xi, they want to stabilize relations, and they want to hedge against uncertainty from Washington—in aggregate, they’re reinforcing Xi’s sense of self-importance and China’s narrative of centrality.

In trying to protect themselves in the short term from what Trump is doing, they’re contributing to exactly the outcome they seek to avoid. This is producing a particularly disordered dynamic that’s breaking down many of the traditional patterns and rules of diplomacy.

More on Western leaders’ perilous parade to China

Mark Carney just ushered in a transformative moment for Canada. It’s also a risky one, Toronto Star, 24 January 2026

Robin: Olivia, on China’s foreign policy, how much of it is driven by geopolitics and design—perhaps toward some kind of grand bargain when they meet in May, which may bring Taiwan’s future into the fold? Or is it also driven by practical realities, like the fact that there are large numbers of Chinese expatriates living in places like Dubai, and the movement of Chinese investors and workers abroad? Which is more powerful at the moment in shaping that dynamic?

Olivia: Many things drive Chinese foreign policy. A baseline that makes China somewhat different from most great powers is the unusually important role of domestic politics as a driver. This is tied to Xi Jinping’s centralization of power and to China’s nature as a one-party system. Domestic politics is key. At a basic level, whatever the Chinese Communist Party does is about security. If protecting Chinese nationals abroad becomes necessary for China’s security, then it becomes a priority. If not—and most of the time it is not—then Chinese foreign policy shows a strong element of pragmatism and adaptability, which Michael highlighted. There is a capacity to take advantage of opportunistic circumstances, as we see in China’s engagement with Western leaders, while at the same time operating from what I would describe as a neorealist balance-of-power calculation. China pushes harder when it has the capability to do so, with regime security at the centre.

Alongside that, you have Xi Jinping’s focus on cultivating support from the Global South. Whether or not we are convinced by it is less important than the fact that, for many countries, it can make sense to engage with China and feel they may benefit. China can offer things that Western countries often cannot, and engaging with China does not prevent those countries from also engaging with others.

What makes China’s approach difficult to conceptualize is that it is quite nebulous. China has many “friends” and “partners,” and these categories are broadly applied. Unlike Western countries, which tend to draw clearer distinctions, in Chinese terminology almost everyone is a friend. That allows relationships to deepen in flexible ways, making alignment with China easier for many states. Countries are not asked to commit heavily upfront, and when China does seek something, it is often negotiated case by case, allowing partners to seek benefits from multiple sides simultaneously.

There is an inherent attractiveness to this approach. It also connects to the idea of “democratizing” international relations. At a basic level, it is a numbers game. The majority of countries in the world identify as part of the non-West, and China’s objective is for those countries to look at China and see something that aligns more closely with their identity and interests than what Western countries offer. In many cases, countries do see elements of that. So what is emerging is a real competition over identity, values, and the ability to present an appealing model.

Robin: Alexander, can we talk about the relationship between Moscow and Beijing? They say it has no limits, but it surely must have limits. Can you touch on where those vulnerabilities may be, and how significant Vladimir Putin and Russia continue to be for China’s project of preeminence?

Alexander: There are obvious limits, and those limits are Chinese preferences and national interests. The relationship is deep and fairly comprehensive, based on pragmatic national interests on both sides. They went through confrontation in the 1960s and 1970s and do not want to return to that because it was very costly. When the opportunity opened in the 1980s for normalization and resolving territorial disputes, they took it, and since then have followed the principle of not always being with each other, but never against each other.

If you look at the economic dimension, there is significant complementarity. Russia has natural resources but needs capital, technology, and infrastructure. China has those capabilities. There are also similarities between the regimes: two authoritarian states, both permanent members of the UN Security Council, that align on many aspects of global governance. Then you have Vladimir Putin and Xi Jinping, contemporaries with similar narratives, both resentful of U.S. dominance and seeing it as a threat to their regimes and great power ambitions.

At the same time, the relationship is deeply asymmetrical. China is a rising peer competitor to the United States, with a strong manufacturing and technological base, while Russia is on a path of relative decline due to decisions made under Putin. Russia once had access to both the European Union and China, and broader Asian markets like India, Japan, and South Korea. The war in Ukraine has burned many of those bridges and pushed Russia into China’s orbit.

For China, there is still value. Russia provides security along the northern border, reducing the need for Chinese resources there. It offers natural resources, increasingly flowing to China on favourable terms. It contributes niche military technologies, while China’s support to Russia’s war effort has also been significant.

Russia is also a meaningful, if limited, market. Not comparable to the EU, but at roughly 150 million people, it matters for certain sectors. It also serves as a testing ground for Chinese firms operating under Western sanctions, allowing experimentation with workarounds to U.S.-led pressure.

At a broader level, Russia acts as a strategic distraction for the West, consuming resources and attention. But because the relationship is so asymmetrical—China accounts for about 40 percent of Russia’s trade, while Russia accounts for less than 4 percent of China’s—China has far greater flexibility. It can engage selectively, while Russia has fewer alternatives.

That asymmetry is the real limit in what is called a “no limits” partnership.

In Europe, China divides to conquer

Robin: Michael: the European Union. You described leaders visiting Beijing. The Germans probably still have the most important relationship. But where does the EU sit between Donald Trump in his second term and Xi Jinping?

Michael: The EU is not uniform and is increasingly contested terrain. On security, there is no real prospect of separation from the United States, but China wants to keep it as distant from Washington as possible. Trump has, in some ways, helped that.

China is also trying to cultivate individual EU member states. It previously did this through the “16+1” or “17+1” initiative, targeting Central and Eastern Europe. Now it uses bilateral engagement, including with Hungary and Spain, testing who can become China’s closest partner. This is a divide-and-influence strategy aimed at weakening collective EU responses.

The core issue is geoeconomic. China’s exports to the United States have declined with rising trade barriers, and restrictions are likely to tighten. That leaves China with fewer large markets. At the same time, China is doubling down on its economic model: manufacturing expansion, overcapacity, subsidies, and technological self-reliance while increasing others’ dependence. This reflects a conception of power rooted in control over production and supply chains. China is on track to account for a large share of global manufacturing. If U.S. access is constrained, it needs alternative markets, and the EU is critical.

So China wants key states like France and Germany to struggle to coordinate on tariffs or protections. If the EU cannot act collectively, it cannot match U.S. barriers. That allows China to export excess production and sustain its model. Disunity becomes a structural vulnerability that China can exploit.

Robin: Olivia, institutions like BRICS and the Shanghai Cooperation Organization—how successful are they, and how important are they now?

Olivia: Is China building an alternative universe? Yes and no. Institutions like BRICS and the Shanghai Cooperation Organization serve a role, but are often underwhelming in concrete outcomes, for example in cases like Iran. That is because they are not alliance systems pursuing hegemony, but part of China’s pursuit of preeminence. They are not about organizing allies for collective action, but platforms to cultivate goodwill with emerging powers. Most members do not expect China to deliver much directly, but still see value in alignment.

China’s main focus is the United Nations. It emphasizes a UN-centred order but argues the system has been shaped by the West. Its role, from its perspective, is to “correct” that imbalance by increasing non-Western influence. BRICS and similar forums help build coalitions, including in UN bodies like the Human Rights Council. These institutions are not ends in themselves, but tools to reshape how the United Nations functions and how international norms are defined.

Assessing Made in China 2025

Robin: “Made in China 2025”, Olivia. It’s been a huge success, hasn’t it?

Olivia: It’s worked well, but it’s a mixed success. Xi Jinping is quite honest and open about China’s economic and technological weaknesses. In many ways, he has a more sober view than what some optimists in the West might think. A weakness is China being unable to get the West on board with its technological output. That is a serious problem for China.

Xi Jinping takes the view that although China has a lot of tech talent, the quantity is not sufficient, and China lacks top-end tech talent. Technology is constant competition—when you get there, you realize there is more to achieve. A problem for China, and for Made in China 2025, is how to get investment going into goals that require continuous funding.

We are at a time when China’s economy is facing significant difficulties, and we have not touched on demographics, which are another major problem. China is getting old before getting rich. All of this raises questions about financing China’s technological model. To address that, China needs the goodwill of countries willing to invest, and investors need to trust China and trust that their governments have good relations with China.

This means having good relations with the West is key for China’s technological project. China is working on this gradually. We still have some time, and if the geopolitical climate holds, there may be more success on that front.

Robin: There was a time a couple of years ago when China was not seen as investable. Michael, in terms of the advice you give, and this being a big part of the Five-Year Plan, to drive more foreign investment—for exactly the reason Olivia outlined—is China now more investable?

Michael: Short answer: no. But it depends on who you are and your jurisdiction. For most Western investors, China is not a prudent investment, though in certain specialized niches, possibly.

There’s a difference between massive growth across an economy (which China used to have) and concentrated success in something like Made in China 2025. China has enormous capacity to mobilize resources and large numbers of people toward major projects. It’s demonstrated that if you harness that kind of state capacity, if it puts its mind to dominating robotics, biotechnology, and AI, it has a strong capacity to do so, even with flaws. But that does not mean even those sectors are a prudent investment. Most companies involved are not necessarily profitable. There’s intense competition, subsidies, and overproduction—companies grow large but are not making money and are not delivering returns.

The overall economy is unbalanced. Consumption is in the doldrums. Real growth is low. There are many other problems: transparency issues, insider trading activity, and non-market factors affecting performance. From the 15th Five-Year Plan, it’s clear they’re doubling down on technological self-reliance, industrial resilience, and selective openness. They want foreign investment in sectors they can harness and control, but not broadly. There’s weak commitment to consumption-led rebalancing and a more explicit ambition to reshape the international system.

Then there is the geopolitical element. If strategic rivalry with the West increases, it becomes increasingly problematic to hold investments in China. Once you factor in geopolitical and other risks, it becomes a bad bet. China is retooling its economy toward a more controlled model focused on preserving regime power, and hardening itself against a more difficult geopolitical environment, even as it tries to attract investment.

Robin: The Chinese consumer is going to save the day, aren’t they?

Michael: I would not count on that. Their model is not prioritizing the consumer. It’s production-focused—they see the producer as king—and they repress domestic consumption. So where does all that production go?

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Taiwan remains central to Xi Jinping’s ambitions

Audience Question: What is China waiting for to take Taiwan?

Alexander: A landing operation, given the terrain, is very complex. If you want to force the Taiwanese leadership to negotiate reunification, you need to be very credible. China budgets for an error margin. It is not ready.

Part of the delay is also Russia’s experience in Ukraine, where the military appeared effective but in reality had deep weaknesses. If you look at procurement, logistics, and armaments in the People’s Liberation Army, the leadership recognizes there is fraud and inefficiency that still needs to be addressed. So they are not ready yet. My assessment is that this is more a threat than something they intend to do immediately.

Robin: And it’s important to remind ourselves that Taiwan has had two or three generations to prepare for this invasion, in terms of its military capabilities. Michael, what is Xi waiting for?

Michael: I would agree with everything Alex said. This is one of the most contentious forecasting questions in China analysis—”will they or won’t they, and on what timeline?” The U.S. intelligence community has revised earlier estimates, such as 2027, pushing them back. That may reflect political signalling.

There is strong consensus that Xi Jinping wants to incorporate Taiwan. If he’s able to, he wants to do it in his lifetime as part of his vision of national rejuvenation. He would prefer to do it peacefully through coercion—pressure, propaganda, political influence—rather than war. The strategy is to build overwhelming capacity—ships, missiles, landing craft—until Taiwan capitulates and the United States decides it’s not worth intervening. But to make that credible, China needs real capability.

Alexander: The key risk is timing. If Xi sees a window of opportunity—U.S. weakness, disunity among allies—he may act. The uncertainty is whether decisions are made through a structured process or a more centralized one.

Michael: There is still structured discussion within the Central Military Commission, even though it’s highly concentrated. (Joking)

Robin: Isn’t it striking that the Central Military Commission currently has only two members, effectively one in uniform?

Olivia: It is unexpected. On Taiwan, Xi has tied reunification to national rejuvenation by 2049–2050. The CCP is risk-averse, but Taiwan is a high-risk objective. So there is tension between short-term caution and long-term ambition. Taiwan is central to China’s vision. If China cannot achieve it, broader claims about its rise weaken.

At the same time, Xi’s rhetoric may increase urgency but also risks provoking counter-coalitions. Xi is risk-averse but has taken major risks—on the economy, COVID, diplomacy, and shifting toward the Global South. Taiwan fits into that pattern.

Chinese soft power as a tool of CCP influence

Audience Question: Soft power: is there space for it in the new world order?

Alexander: China is trying to exercise soft power on Russia, a society that does not have China as a reference point and has had anxiety about a rising China. But given current conditions—more flights, visa access, educational links—many Russians are visiting China for the first time. They come back impressed, seeing it as a country of the future. In some cases, this soft power works and attracts people.

Robin: Soft power as a tool of statecraft is obviously not a new phenomenon. But how important is it to China’s relationship with the rest of the world? And I don’t just mean things like CGTN or the resources spent on that, which are absolutely vast. But other aspects of Chinese culture—dance, theatre—are these things also a key part of trying to export a different view of itself to the world as it pushes for that preeminence?

Olivia: From a Xi Jinping perspective, the CCP is really central. So if we see that, then we are already ahead in thinking about Chinese soft power—being convinced about the CCP and its ability to generate attraction, which he does believe in.

But the other aspect about Chinese soft power is that it’s not just Chinese fans. It’s dancing robots, TikTok, RedNote—it is about the Chinese technology platform economy. What is interesting is these are also sectors that Xi Jinping regulates, and that the Chinese government finds need a lot of improvement, and finds them to be falling short of state expectations. But if you think about the spread of Chinese influence, they are a lot more effective than telling the rest of the world how amazing the Chinese Communist Party is. That would reach some audiences, but have a limited level of reach. But TikTok, dancing robots, electric vehicles—those can be Chinese soft power. So sustaining Chinese tech capability is actually really crucial to that.

Robin: Yeah, the problem with those is that they’re tools of the state, to an extent. I know there’s a huge amount of private financing involved, but in my view, China’s leadership is not willing to liberate the true leaders of soft power, and so will never let them achieve their full potential. And the potential is huge, isn’t it, Michael, for a country as vast, with such a history.

Michael: Absolutely. China has a highly educated population that produces all kinds of amazing things. It has enormous cultural resources to draw on to be appealing in many respects. The main damper on its appeal to the average person, and to many of its own citizens, is the authoritarian weight of the Party-state on it, the obsessive control, and many of its other nasty elements. The fact that it’s currently imprisoning about 50 journalists and about 4,000 political dissidents, and engaging in other extreme human rights violations—that’s not great PR, and it knows that.

That’s why you can’t really think of Chinese soft power as one discrete thing. The Party-state is quite good at engaging in a whole spectrum of influence tactics that range from state media to disinformation, misinformation, propaganda, and soft power influence through social media, to outright coercion.

A lot of the language it’s been using in meetings with leaders lately is that it wants foreign countries and governments to show a correct perception of China and demonstrate mutual respect. A “correct perception” means things like respecting China’s right to its own development model. However, that development model also involves a $1.24 trillion trade surplus that’s hollowing out Western manufacturing and preventing many Global South countries from climbing the ladder of development, because they can’t compete.

So it’s about strategic narratives that manipulate perceptions, hide and censor, downplay, or condition—through fear—people from saying critical things, and accentuate a positive, glorifying narrative. Often that acts in a very subtle way, particularly in Western societies.

The Party doesn’t need people to believe everything or think China is wonderful. It just needs them to be sufficiently confused, to stop countries from doing necessary things to protect themselves against hostile aspects of its influence—elite capture, foreign interference, transnational repression, and other malign activities—and from taking measures against aspects of its economic policy that are making countries dependent on China. So this soft power narrative is about lulling you into a false sense of security from thinking “it’s not that bad.”

There are great aspects of China, but you still need to protect yourself from the harmful aspects.

Can China be a peacemaker for Ukraine?

Audience Question: Is there a role for China as a mediator or facilitator of peace settlements in Ukraine, particularly if Trump walks away?

Robin: I think this is fascinating, given China’s de facto support for the aggressor. Olivia, what do you think about China as a global peacemaker?

Olivia: The Chinese government takes the view that it has scope to play a mediator role, but also stands for non-intervention, and that conflicts ultimately require the warring parties to sort things out. If the willingness is there, China would like to push things along a little bit.

But there isn’t an interest in providing security guarantees. China doesn’t want to be dragged into conflicts created by others, and it doesn’t provide security guarantees. Those are hard limits on how China would act in mediation. The interest is there, provided conditions are right, but China would not do too much to create those conditions.

Robin: Can you be a credible potential peacemaker if you’re supporting one side?

Alexander: The Chinese understand that the positions of the two sides are still miles apart, and both Russia and Ukraine have the capacity and will to continue fighting. That is the most likely trajectory this year, since neither is in a position to capitulate.

The outcome China would consider acceptable would also involve getting something out of it. A simmering conflict that drives Russia toward China on China’s terms and diverts U.S. attention and resources is acceptable. Why stop that?

China is not directly involved enough to incur major downsides. So if you want China’s help, there needs to be a price. That’s what China asks European interlocutors: what’s in it for us? Are you ready to do something in return? The answer is usually no, because these are core European interests. So China follows a path of imitative diplomacy: initiatives, “friends of peace” groupings, envoys traveling between capitals. They are very good at that. But they are not in a position to deliver peace, at least for now.

Olivia: China has been saying it can improve relations with Europe because Europe now recognizes China’s “principled neutrality” in the Ukraine war. That has been a Chinese narrative over the past year. From China’s perspective, its position has been successful. It does not want to pay a cost through serious mediation. This reflects the distinction between global hegemony and global preeminence: China is looking for leadership in a low-cost way.

That also means limits. For countries, that can be reassuring because China is unlikely to intervene militarily. But it raises a more difficult question: how do you harness China’s weight to deliver global public goods like peace when it is reluctant to do so?

At a time when U.S. leadership is retreating, Europe is squeezed in the middle. China is not fully stepping up, and the U.S. is creating uncertainty. So how do you create a workable framework for coexistence with China? That still needs to be thought through more clearly.

Audience Question: The Global South not being one bloc, could you elaborate on how countries navigate between China and the United States?

Alexander: China brings a lot to the table, especially in manufacturing and trade policy. The U.S., under Trump, also has an assertive trade policy, though not always welcome to those affected. Countries are trying to create space and engage both sides. China is more forward-leaning in offering opportunities, while the U.S. appears more defensive. Europe is trying to play a stabilizing role, but internal divisions and other pressures limit its effectiveness.

Robin: Olivia, what about India? Where does it sit?

Olivia: The Global South is a loose political concept in China’s framing. It refers to countries with shared grievances. China is flexible in defining partnerships, so India, and even Singapore, can be included if they identify that way.

Robin: China’s relationship with India is not easy—they compete.

Olivia: It’s not easy, but engagement is flexible. Countries can participate in some initiatives and not others. That makes China’s relationships both hard to define and easy to enter.

China’s role in the U.S.-Israel conflict with Iran

Robin: Olivia, why isn’t China doing anything about Iran? It’s an opportunity to be a peacemaker. Why not flag all the ships with a Chinese flag and come through the Strait of Hormuz?

Olivia: China is doing a lot. Beijing is talking to countries and engaging in diplomacy. From a business perspective, the concept is preeminence, which means seeking leadership without paying a heavy cost. This is a textbook example.

It is not surprising if you look at China’s approach to Ukraine, Iran, and after the October 7 attack. You see a consistent pattern. The question is whether China can persist with this low-cost approach. It has a tangible negative impact on the Chinese economy. Can China maintain a low-cost approach without paying a cost? The answer is no.

This is a real test for China. The question becomes what other countries China claims to be close to will pressure it to act collectively. Pressure on Chinese leadership exists, but what exactly the world wants China to do is unclear. Neither the West nor the Global South has articulated a clear answer. More work can be done here. I would be interested to hear what Michael has to say.

Robin: Michael, a war that distracts your main opponent may be good, but a war that could lead to regime change and more democracy in Iran might not be good for China. Is that right?

Michael: Whether the U.S.-Israel war with Iran is a net positive or negative for China is debated. The relationship is asymmetric: Iran is much more dependent on China. China can live without Iran, but it gets real benefits from the relationship. The question is whether those benefits would continue under a different regime in Tehran.

Right now, China is taking a position of calibrated ambiguity, criticizing U.S. intervention without confronting it. This follows the classic line: never interrupt your opponent while they are harming themselves.

On the negative side, China risks losing a strategic partner that provided discounted energy and kept the U.S. focused on the Middle East. The 25-year strategic partnership underperformed and never reached the $400 billion headline. Iran is less important for China economically than the Gulf states and Saudi Arabia, but it still matters.

U.S. military success also has a psychological impact. Chinese analysts have been struck by U.S. capabilities, which may influence thinking on Taiwan. China’s energy insecurity has also been exposed. It has strategic reserves, but they are not infinite. There is also the postponement of the Xi-Trump summit, which could affect broader relations.

On the positive side for Beijing, the U.S. is expending strategic munitions and advanced weaponry, potentially creating opportunities for China to make moves, including in the South China Sea. It also diverts U.S. resources. The situation supports China’s global narrative presenting itself as responsible while portraying the U.S. as destabilizing. Economically, higher energy costs create short-term inflation pressures for China. In the long term, however, higher fossil fuel prices could benefit China as a major supplier of green technology such as wind, solar, and batteries.

Robin: Strategically, if the Iran situation weakens Donald Trump, that could benefit China.

Alexander: I agree with much of the analysis, but I would not conclude that the U.S. has demonstrated total superiority. This is not the first Gulf War. Intelligence capabilities, especially from Israel, have been strong. If Iran can still disrupt shipping, and if resolution requires a large-scale operation with significant risks, it is not clearly a major success. If the war ends with U.S. withdrawal and a declared victory by Trump, that is not unfavourable for China.

China is active behind the scenes. Russia is more forward in providing assistance, which suits China because Russia absorbs more pressure. China is well hedged: its investments in renewables, coal, and diversification have been effective, and it has access to Russian hydrocarbons. This could be the moment China advances major projects and expands existing ones.

Audience Question: What lessons is the PLA learning from Iran? What does it take from Trump’s command of a powerful military, and from a capable force struggling in a conflict less complex than Taiwan?

Alexander: The U.S. has struggled to absorb lessons from Ukraine. Ukraine’s military has improved significantly with U.S. support, particularly in drone warfare. Weaknesses in airbase defence highlight vulnerabilities. China is likely studying how well its own defences would perform and what lessons apply to drone warfare. It also benefits from observing Russia, which is a major innovator in drone use in this conflict.

Robin: China leads in drone technology. The PLA has undergone significant professionalization and anti-corruption reforms under Xi Jinping. How much is it learning, and how different is it from 20 or 30 years ago?

Olivia: China is learning that Trump is unreliable. This affects any idea of negotiating over Taiwan, because there is uncertainty about how he would interpret or uphold agreements. That makes him both a risk and a potential opportunity, but not necessarily one China is eager to exploit.

The argument that 2027 is a likely timeline for action against Taiwan is not convincing. U.S. unpredictability creates risk China may prefer to avoid. Observing U.S. actions in Iran reinforces the perception that escalation carries high uncertainty. If China considers increasing coercion toward Taiwan or taking more aggressive action, it will factor in the risks demonstrated in Iran. This suggests caution rather than urgency.

On military and technological lessons, including drones and PLA capabilities, lessons exist, but they are not immediately translated into action. Xi Jinping operates on a long timeline focused on predictability, gradual adaptation, and course correction.

China has adjusted through outreach to Europe, export controls on rare earths, and calibrated signalling of capability. But there is no indication of a major move to exploit perceived opportunities created by U.S. behaviour under Trump. The Iran situation does not appear to be pushing China toward higher-risk action.

Cheap Chinese technology comes with strategic dependence

Audience Question: Is Europe’s absorption of Chinese green energy infrastructure, batteries, and EVs an opportunity? Could it be a win-win for Europe, enabling a quicker shift toward renewables?

Alexander: The right exercise for the Commission and nation states is to assess which industries are viable. Which still have the scale and profitability to remain competitive and should be protected? Which cannot be rebuilt or are already lost Large parts of green tech are gone and not where Europe should compete. The automotive sector is worth protecting. A one-size-fits-all approach does not work. Policymakers should evaluate industries individually, protect what matters, and lower costs by allowing China to dominate where Europe cannot compete.

Robin: Michael, the UK recently excluded Chinese wind turbine manufacturers on national security grounds. Meanwhile, the U.S. automotive sector finds CATL’s battery technology difficult to avoid and is being pushed toward partnerships because of its dominance. There are two sides to this.

Michael: In some areas, Chinese green tech offers a low-cost advantage where no local competitor exists. This benefits consumers and accelerates the green transition. But there are cybersecurity and national security concerns, as seen with wind turbines, electric vehicles, and telecommunications infrastructure.

Dependence on a strategic adversary for critical components creates vulnerability. It can be weaponized for coercion or conflict, and creates long-term strategic dependence. Even if products are not made in the EU, sourcing entirely from China introduces risk. China’s use of rare earths illustrates this.

This requires strategic industrial policy: deciding what to produce domestically while diversifying supply from trusted partners. There is also the problem of deindustrialization. Service-based economies may work nicely for highly-educated finance professionals, but for working-class people they limit upward mobility and deepen regional inequality.

A diversified economy matters. Losing manufacturing erodes process knowledge, production capacity, and the defence industrial base. It can also make production prohibitively expensive. Diversified commercial supply chains may be feasible, but limited domestic military production creates national security risks if competitors can scale much faster.

A CCP-led order would be state-centric

Audience Question: We’ve heard the view that China wants to see the post-World War II rules-based order hollowed out. But over the last two or three years, the West has done much of that itself. Given China’s pursuit of global preeminence, soft leadership, and soft power, how will it exploit that collapse to establish a new world order?

Robin: Michael, briefly, a New World Order?

Michael: That raises the question of what a Chinese-led or Chinese-dominated world order would look like. There’s not enough thinking about what kind of world China wants, or more precisely what kind of world the Chinese Communist Party wants.

It would be more realist, transactional, and power-based, leveraging China’s size to deal bilaterally with smaller countries. It would preserve parts of the rules-based order. China is not looking to eliminate bodies like the International Civil Aviation Organization or other standard-setting institutions. Rather, it wants discourse power, the ability to set standards through future technologies, make those technologies dominant, and exercise influence in bodies like WIPO or the FAO. That’s why it has placed senior officials in overlooked UN organizations over the last two decades.

China wants to preserve regulations where they provide regularity and predictability, but purge the liberal elements of the system: institutions of liberal economics, which it uses through the WTO and pays lip service to but does not follow, and anything related to human rights, good governance, democracy promotion, or values it sees as hostile to its own governance model.

This is a struggle between a Leninist vision and a Kantian vision of world order. Liberal democracies have not always practiced what they preached, but there has always been a liberal aspiration in that vision. A Chinese world order would be purged of that aspiration. It would be state-centric, with less room for independent media, civil society, the primacy of the individual, and civil and political rights.

Can the CCP deliver for China’s poorest?

Robin: Much of this depends on China’s domestic economic success. Xi Jinping has to sustain growth, or none of this works outside China’s borders. How challenging is the domestic economic problem?

Olivia: This brings us back to China’s 1.4 billion people, and whether they can become a real source of economic power. As Michael said earlier, China has not succeeded in harnessing its consumer market, and this remains a major problem in the 15th Five-Year Plan.

The plan mentions the need to boost consumption, but Xi Jinping is committing to a 7 percent annual increase in scientific research and development from 2026 to 2030, while there is nothing nearly as ambitious on consumption or the social safety net for lower-income populations.

At the same time, China is seeing an expansion of the gig economy and informal labour markets. Aging migrant workers who came from villages and worked in cities in the 1980s and 1990s are now too old for factory production lines, while the real estate sector has collapsed. Many have been absorbed into the gig economy, and they make up a large share of China’s workforce. What happens to them?

This points to a broader challenge: whether the Chinese Communist Party can live up to its promise of common prosperity. That may be necessary if China is to deliver the national rejuvenation Xi Jinping has promised.

It also raises the question of what the Chinese government will actually do to raise living standards for lower-income populations. Local government finances are severely squeezed, creating more unfunded mandates even as local governments bear much of the burden for social welfare provision. That is not sustainable.

So the difficult question is whether relentless investment in technology is the best path for China. From Xi Jinping’s perspective, it is strategic and tied to security. But from the perspective of China’s working class, the priorities may look very different.

Robin: I’m glad you touched on that, because for me China, its political leaders, and China’s people have always been very different things, and it is wise to keep them separate. Thank you.

My thanks to the Frontline Club and China Correspondents’ Club of London for organizing. Visit the Frontline Club for more thoughtful discussions with leading journalists, scholars, and practitioners on the major issues shaping world affairs.

Check out Olivia Cheung’s excellent books with Steve Tsang, The Political Thought of XI Jinping (video summary) and China’s Global Strategy under Xi Jinping.

Alexander Gabuev’s insightful writing for Carnegie is here. He also has a Substack.