SNOW SLOWS TRAVEL About 9 billion international passenger trips on all modes of transportation are anticipated to be made during the classic 40-day phase that runs before, during, and after the Lunar New Season breaks in mainland China. Teach and air travel are expected to “hit report peaks” during thisContinue Reading
What this second says about the world’s two biggest markets is what makes the DeepSeek-driven property judgment most intriguing.
To supply with the clear, neither Donald Trump’s 2017-2021 trade conflict nor Joe Biden’s more precise limits these last four years halted Chinese leader Xi Jinping’s technology ambitions. Although there are a few speed bumps occasionally, Xi’s” Made in China 2025″ feast is undoubtedly its biggest public relations triumph.
The most positive headlines Xi’s market has had in a while came from the shockwaves that Foreign artificial intelligence company DeepSeek sent through international markets.
Its claim of a cost-effective AI type using less-advanced cards has America’s Nvidia and French huge ASML , reeling. Additionally, it removed the burden of Silicon Valley executives who were warming up to US President Trump. Immediately, US tech supremacy is in question as often before.
DeepSeek’s appearance also managed to confine Trump’s great AI instant below the fold. On January 21, Trump stood with OpenAI’s Sam Altman,  , SoftBank’s Masayoshi Son and Oracle’s Larry Ellison to consider an AI triumph for America. The US$ 5 billion Stargate AI infrastructure project seems to be outdated and a probable huge boondoggle at this point.
However, it’s the financial lessons that stand out the most. In China, Xi’s victory may give the country an even stronger incentive to make more strides toward fostering confidence in the country’s economy. This is a stark warning for Trump that tariffs won’t revive US digital technology in ways that equalize the China danger; only daring policy choices you accomplish that.
New data revealed that China’s stock activity surprisingly decreased in January, ending three months of expansion at the same time DeepSeek was sputtering global markets.
China’s standard purchasing managers ‘ score slid to 49.1. The non-manufacturing PMI test, which includes companies and design, slowed to 50.2 from 52.2 in December. Industrial profits, meanwhile, are now down for three consecutive years, dropping 3.3 % in 2024 alone.
According to Zichuan Huang, an economist for China at Capital Economics,” the disheartening PMI data highlights the challenge that policymakers face in sustaining a sustained treatment in growth.” China is struggling as Trump considers taxes and intensifying challenges, Huang said, despite hints that were made in late 2024 that trigger attempts were taking off.
Many pre-existing conditions at home are bringing in new risks from abroad. China’s home crisis resulted in the longest negative run since the 1997-98 Asian problems. Poor family demand and , near-record , children poverty are slamming confidence.
” To even have a chance to boost prices and confidence”, says Hui Shan, chief China scholar at Goldman Sachs, Beijing has install” a big stimulus from the state” to generate a real “turning stage”.
Zhiwei Zhang, president of Pinpoint Asset Management, notes that “part of the decline may be expected to weaker outside requirement, as the new import orders score dropped to its lowest level since March last time.”
If Trump fulfills his threats to impose 60 % tariffs on all domestic goods, things could start to get worse. Trump’s implementation of trade restrictions has been much slower than anticipated by international investors.
According to analysts at Singapore-based UOB Global Economics &, Markets Research,” a lot of what Trump pledged to do was carried out on day one with the absence of concrete tariff measures are a significant relief.” ” There is, after all, another four years of Trump to go”.
These dangers only make Xi’s team’s task more pressing to stabilize China’s financial system. Immediate priorities include repairing a weak property sector fueling deflation, building more vibrant capital markets, reducing youth unemployment, addressing runaway local government debt, curbing the dominance of state-owned enterprises and increasing transparency.
Team Xi also must create a vibrant network of social , safety , nets , to encourage consumption over saving. Last week, Xi’s government intensified efforts to support China’s volatile stock markets. That included encouraging mainland households to buy more shares and encouraging pensions and mutual funds to make more domestic stock investments.
According to Wu Qing, the head of the China Securities Regulatory Commission,” This means that at least several hundred billion yuan of long-term funds will be added to A-shares every year.”
Such steps are only necessary, though, because Team Xi has been too slow to address the economy’s pre-existing conditions. In financial circles, is it a hot button whether Beijing should use a yuan-sheen deflation strategy to boost growth?  ,
The pros are obvious. Exports, which were a major factor in China’s 5 % growth in 2024, would be further boosted by a weaker exchange rate. In December alone, overseas shipments jumped 10.7 % year on year.
However, the disadvantages prevent Team Xi from choosing the less effective yuan route. For one thing, it might make it more difficult for highly indebted property developers to pay off offshore bonds. That would increase , default , risks  , in Asia’s biggest economy. Seeing# ChinaEvergrande or# ChinaVanke , trending again is the last thing Xi’s Communist Party needs in 2025.
Another is that deleveraging efforts could be wasted due to the monetary easing required to lower the yuan. Beijing has made significant strides over the past few years in reducing China’s financial woes and raising the standard of its gross domestic product. As a result, Xi and Premier Li Qiang have been reluctant to let the People’s Bank of China ease more assertively, even as deflation deepens.
The yuan’s use in trade and finance might be Xi’s biggest reform accomplishment over the past dozen years. In 2016, China won a place for the yuan in the International Monetary Fund’s” special drawing rights” basket, joining the dollar, yen, euro and pound. Since then, the currency’s use in trade and finance has soared. Excessive easing now might damage trust in the yuan, slowing its progression to reserve-currency status.
It also might trigger a broader , Asian currency war , that’s in no one’s best interest. Tokyo might be all-in on a much weaker yen, entice South Korea into the fray.
Memories of 2015 are clearly entering into Beijing’s equation. A destabilizing capital flight that still lingers among party bigwigs was caused by China’s decision to devalue the yuan by nearly 3 % ten years ago. Over the next year, Xi’s team had to draw down Beijing’s foreign exchange reserves by , US$ 1 trillion , to restore calm.
However, Trump World should also take a wake-up call about its top economic policy initiatives this week. A massive trade war, like that one in Exhibit A, might have worked better in 1985, when a select few industrialized nations had more economic power.
This same stuck-in-1985 , problem , helps explain why Japan’s efforts since 2012 to increase competitiveness and rekindle innovation came up short. The enterprise, led by former Prime Minister Shinzo Abe, is largely about bringing back the trickle-down economics of the 1980s Ronald Reagan era.
Abe backed up his wager that monetary easing and currency depreciation would cause a rise in corporate profits and initiate a virtuous cycle. The intention was for boom stocks to spur CEOs on to fatten their paychecks, thereby boosting consumer spending and accelerating economic growth.
The plan for Japan was correct about the stock boom. The Nikkei 225 Stock Average reached its highest point last year thanks to aggressive Bank of Japan easing, a plunging yen, and some efforts to improve corporate governance.
Yet wages didn’t surge as hoped, ending the year on average or below the roughly 2.5 % inflation rate. Reaganomics is even less effective at raising living standards today than it was 40 years ago, according to all so-called Abenomics.
This is the way Trump 1.0 went, too. A$ 1.7 trillion tax cut, which primarily targeted the top 1 %, was the centerpiece of Trumponomics. More importantly, the maneuver made it more advantageous to reduce income inequality and put the national debt on track to reach the current$ 36 trillion level.
Now, Trump 2.0 is angling to make the$ 1 , trillion-plus tax cuts from his first term permanent while adding new ones to the books that will inevitably exacerbate Washington’s already serious debt woes.
The US net foreign investment position, or the difference between foreign assets owned by Americans and those owned abroad, is now nearly twice the size of the US gross domestic product. It’s negative$ 24 , trillion compared with negative$ 18 , trillion , when Biden entered office in 2021.
A big dilemma now faces Trump: widen Washington’s investment imbalances or reduce its addiction to imports and capital inflows. For now, Trump’s new economic team is more interested in protecting the status quo than disruption.
Washington’s budget would be reliant on the savings of both Japanese and Chinese households as well as the world’s developing countries as more tax cuts are proposed. Trump’s tariffs and trade restrictions would increase US inflation and reduce domestic consumption.
Many economists believe that Trump should concentrate more on boosting domestic economic stoke. Biden, for all his policy missteps, paved the way for the US to compete with China more organically.
Biden’s 2022 CHIPS and Science Act, for example, deployed$ 300 , billion  , to strengthen domestic research and development. Biden took other steps to incentivize innovation, raise America’s semiconductor capabilities, improve infrastructure and increase productivity.
It was only a start, though. Despite his deregulation comments, Trump has not yet come up with a strategy to replace Biden’s tech upgrade policies.
As Trump prioritizes old-school tariffs, lower Federal Reserve interest rates and a weaker dollar, Xi’s China is engaged in a multi-trillion-dollar effort to lead the future of electric vehicles, semiconductors, renewable energy, robotics, biotechnology, aviation, high-speed rail and, of course, AI.
This last priority is now paying, and this has never before been a positive outcome for China. And serving as a wake-up call for both Xi’s party and Trump 2.0 that it’s time to raise their games.
Follow William Pesek on X at @WilliamPesek
Tensions between local nations and an increased NATO appearance have been the result of numerous instances of suspected Russian-linked damage of underwater wires in the Baltic Sea.
The Scandinavian coast protect boarded a ship in the Baltic Sea on January 26 on suspicion of outlet drag and alleged damage of vital undersea cables that run through the area.
Additionally, Latvia conducted a ship search of the incident to discover fiber-optic wires ‘ injuries. The Russian vessel is now under inspection. The ship’s user has denied any involvement in damage.
The countries along the Baltic Sea coastline have started stationing military ships at sea every day and have started to worry about suspected destroy of their underwater facilities in recent months due to ships deliberately drag their anchors along the seabed.
Anchor drag can quickly damage important underwater system. Russia has denied involvement in these situations. However, there are also reliable information that Russia has been conducting undersea system mapping.
NATO increased its local naval presence in response to rising concerns about network protection by launching the Baltic Sentry vision on January 14 and adding maritime patrol vessels to its list of local marine bases.
As vessels pass through the Baltic Sea, there have been numerous studies in recent months of harm being done to subterranean cables. Attacks on underwater cords are comparable to conventional operations in espionage and knowledge.
This activity is conducted at a level that is comparable to warfare, intended to send specific signals to hostile powers. The intention could be to convey that the ability to effectively cut off and isolate people from the outside world is present.
These cords are extremely important. They are used to move online traffic, gas, and power between nations. Additionally, recent events have resulted in a decrease in the amount of light that can be transported, despite the fact that this has not already resulted in widespread power outages.
Another issue is that destruction to digital wires could thwart the flow of financial market data. Due to its sensitive nature, this is especially prone.
Protecting the connectors is a difficult endeavor. Due to the idea of high seas freedom of navigation, there is little that can be actually done to stop another warships from crossing the seas and oceans. And Russia has a right of passage for its ships, for instance, from St Petersburg to the North Sea.
Without really seizing the vehicle or preventing its advancement in any way, investigations into apparent threats may be conducted. This can be accomplished by combining GPS tracking data with other data, such as witness testimony, and using GPS tracking data.
Targeting these cables may help a country fight its adversaries in a more subtle way and without the threat of armed conflict, despite the possibility of natural causes.
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Unintentional engagement is most likely to blame for the large volume of traffic on these oceanic cables. However, Russian military ships ‘ increased activity in mapping the Baltic Sea ground has raised questions.
To better understand where these cables are located, the most possible justification for the enhanced Russian ocean mapping activity. However, it might be a concept that this crucial infrastructure is difficult to defend and vulnerable to attack and damage.
Some merchant vessels are registered in international provinces, and equity can be hard to monitor. This gives a degree of believable denial over who may have directed or managed the businesses that might have damaged wires.
It makes taking action harder, but it also leads to charges that these boats are posing as part of Russia’s” shadow fleet.”
However, this more naval presence in the Baltic might serve as a barrier and give the wires greater safety. Sweden has then boarded a vehicle. Another drawback is that the country where the vehicle is registered is in no way required to cooperate with any research.
Various factors are even involved. The Baltic states and Finland have thoughts of the social control , imposed upon them by the Russian government , due to, and, in some cases, after, the Second World War, and this will add to the stress.
Russia’s war of Ukraine has heightened local concerns about what might transpire future. Moscow may be attempting to put more pressure on the European countries to stop them from continuing to support Ukraine by mounting tension along the coast.
However, increasing worry about Russia’s position of authority in the Baltic Sea may have the same result by escalating the tide of suspicion. It might also indicate that the Baltic and Nordic countries are more eager to spend more money on security and make plans for potential military action.
Matthew Powell is a training fellow in corporate and heat energy research, University of Portsmouth
This content was republished from The Conversation under a Creative Commons license. Read the original content.
Electric cars made up more than 50 % of all vehicles sold in China last year, making it China’s largest EV market by much.
The EV and NEV market expansion is having a good effect on the air quality in major Chinese cities. Significant improvements have been made to the Air Quality Index ( AQI ) in Shanghai, Guangzhou, and other major Chinese cities.
Chinese EV producers are quickly expanding abroad. 80 % of all Vehicles produced in China were sold globally next year. Some EVs from illustrious manufacturers like Ford, Nissan, and Kia are produced in China or depend on Chinese manufacturers for essential components like batteries. China accounts for 75 % of the country’s power battery manufacturing capability.
In the past ten years, the Taiwanese government has provided more than US$ 200 billion to support its EV sector. The purchase was a part of China’s plan to achieve carbon neutrality by 2060.
The government also uses incentives to boost the development of chargers, wind turbine, solar panels and other natural software. More renewable energy sources are developed than combined by the rest of the world.
The Taiwanese and international auto industries are being transformed by the EV sales explosion. Sales of most legacy ( internal combustion engines ) car makers are cratering, in some cases by over 10 % a year.
Manufacturing facilities and showrooms for a number of Chinese manufacturers of internal combustion engines ( ICE ) vehicles are closing. Yet renowned brands are struggling. Porche is closing 35 of its 138 showrooms in China.
China’s EV sector was created wholly using Chinese manufacturing technology. The sector is diagonally integrated, and freelancing is minimized. Horizontal inclusion leads to considerable advantages in excellent power, speed, and price. Foreign EVs are, on average, half the price of EVs produced in international markets.
China’s top-selling model Ford has taken vertical connectivity to a new stage. From the transportation of vehicles across the world to the mine of raw materials, the auto giant has control. The business owns sodium mines, manufactures battery packs, and runs an EV insurance provider that covers every aspect of the supply chain for electric vehicles.
Earlier this month the firm launched the BYD Shenzhen, its fifth auto ship. The vehicle has a power of 9, 200 electrical cars.
The electricity of freedom, the biggest disruption in the background of the car industry, is shaking up the global auto market. While Foreign EVs are rapidly expanding worldwide, opening factories abroad, or transferring existing businesses from tradition makers, almost all other car manufacturers are experiencing difficulties.  ,
BYD, which recently acquired a Ford shop in Brazil, is building new crops in Hungary and Turkey. Chery Auto, a joint venture between China and EV Motors, started producing Vehicles in Barcelona. Prior to that, Great Wall Motors purchased General Motors vegetation in India and Thailand.
Japanese manufacturers are also in surrender. Due to the rapid shift toward electric vehicles and increased competition from nearby automakers, a number of Chinese automakers have stepped down or shut down operations in China. Nissan halted production at its Foreign flower, and Mitsubishi withdrew from the Chinese market. In addition to reducing its production power, Honda is facing declining sales in China.
According to unverified press accounts, Chinese EV designers also have their eye on Germany, the center of German car manufacturing. In 2027, Volkswagen intends to stop producing goods at its Dresden and Osnabruck plants. Chinese automakers BYD, Leapmotor, and Chery Auto are said to be looking into possible acquisitions for the European species.
Foreign car manufacturers would have better access to EU production facilities to avoid International tariffs on imported electric vehicles from China and increase their presence there. The EU Commission announced tariffs of up to 37 % on Chinese cars last October in addition to the already 10 %.
Given German concerns about the culture, it is ironic to raise the cost of Chinese electric vehicles in the EU, but it is also a repeat of the earlier car conflicts with Japan. In the 1980s, some European countries and the US resorted to” Voluntary Export Restraints” to offer Western carmakers time to catch up with Japan’s” Just-In-Time” manufacturing systems.
In October next month, Brussels raised the stakes with Beijing. It made new regulations that may involve the transfer of technology between Chinese EV manufacturers based in EU countries. A significant role reversal occurs when international companies investing in production systems are required to reveal their systems with their Chinese partners in the 1980s.
With what appears to be an unsurmountable result, transferring or sharing technology would not be a problem for Chinese EV manufacturers.
Vehicle industry experts believe that Chinese EV manufacturers are 10 to 15 times ahead of the rest of the world, according to John Bozella, leader of the Alliance for Automotive Innovation, and Sam Evans of the Electric Viking website. It may create Vehicles in the Union with five-year-old technology.
The February elections in Germany may have a lot of impact. It would be difficult to stop Foreign output in Germany. European automakers have been operating plants in China for a long time. Ford, much the top-selling company in China, earns 50 % of its revenue in China. German’s premium models Mercedes Benz and BMW have also benefited from the Chinese business.
Foreign companies addressed one of the last issues with EV batteries: the battery life and collection. CATL, the world’s largest battery maker, announced the production of an EV device that will last 15 years or one million yards.
CATL warrants that the device may have 85 % potential loyalty after the warranty expires and offers a 10-year or 600, 000-mile insurance. The batteries can be used again to store power in a home.  ,
The need for petroleum products has decreased as a result of the explosion of the EV business. China’s refined oil consumption peaked in 2023, according to China National Petroleum Corporation ( CNPC ), and it is now anticipated to decline. The number of gas stations is declining, as is the need for fuel.
Shell, the world’s largest oil company, intends to shut down 1.000 of its petrol stations in China. The business installed 70, 000 people charging facilities in the nation by 2025 and built an EV charging station with 258 batteries in Shenzhen.
More than 20 000 charging facilities will be constructed in 420 Chinese cities in collaboration with Automotive manufacturer Xpeng. The latest (600-watt ) systems can charge car batteries in under 8 minutes.
Chinese EV makers export mostly mid-sized sedans but produce a wide range of EV vehicles, from micro cars with a price tag of under$ 10, 000 to high-performance” supercars” priced at over$ 200, 000 as well as electric bikes.
In Shanghai, the number of electric light riders reached over 10 million in 2022, which means that one in every 2.5 persons owns an e-bike.
To be sure, EVs are no cure for all of the nation’s economic issues. However, the world is quickly approaching the post-carbon power age, combined with the exponential rise in clean power generation.
China is the core of this natural change. China produces half of the world’s clean energy, in addition to leading the charge in thrilling mobility and producing green technologies like solar panels.
Western media has a habit of blatantly mentioning China as a source of global pollution while omitting the fact that Western businesses have been outsourcing their “dirty” production there for decades ( or that China’s population is twice that of the US and Europe combined ).
The EU Commission tussled with China over clean technology, including Vehicles, for almost a year before coming to the conclusion that China has “overcapacity” in green technology and that grants give it an “unfair benefits.”
The Commission could have just examined China’s federal environmental policies, which gave green technology equal priority over agriculture, as the EU did.  ,
Despite its problems for the environment, the EU continues to support its agricultural industry. Agriculture is the main source of waste in Europe, according to the European Environment Agency, primarily due to its acid emissions, which are generally brought on by the use of livestock manure and fertilizer.  ,
Between 2023 and 2027, the Union subsidized its agricultural sector with 264 billion dollars. The Union exports about 230 billion dollars in agricultural goods annually, more than its exports of 180 billion dollars. About 6 % of European agricultural “overproduction”, for about$ 16 billion annually, is exported to China.
Both parties can benefit from China upgrading European automobile manufacturing. China may expand its international footprints, and Europe may speed up its green revolution. Likewise, Europe gets access to manufacturing systems that will identify 21st-century flexibility. After years of outsourcing, car manufacturing is the last remnant of Europe’s mass production of consumer products.
Coin-hunters may face criminal charges, imperil their security
PUBLISHED: 22 Jan 2025 at 13 :29
Authorities have warned people of the location-sharing Jagat game they may face intruding charges and set personal safety at risk in hunting for Jagat coins for money rewards.
The warning was issued by Pol Lt Gen Trairong Phiwpan, director of the Cyber Crime Investigation Bureau.
He said on Wednesday that Jagat people trying to find the actual cash for money rewards may find themselves trespass on other people’s home. That crime carried a maximum jail term of five years and/or fine of up to 100,000 baht.
Consumers could also be at risk because they shared their private information and spot, which might be accessed by thieves, the computer police captain said.
His advice followed complaints that some software users who hunted for actual Jagat coins using augmented reality technology had really trespassed on private property and left soil piles in public places while sorely digging for the coins, which they could use to claim money rewards of 500 to 200,000 baht.
Pol Lt Col Wasuthep Jai-in, deputy chief of the Patrol and Special Operations Division ( PSD ), advised people to stop using the app to hunt for the coins. He said rewards from the app allegedly came from criminal mule accounts and recipients might face a money-laundering investigation.
He said the app originated in Indonesia and was operated by 17 foreigners based there and in Singapore and Vietnam. The coin hunt was launched in Thailand on Jan 15 with the physical coins reportedly hidden in Bangkok, Chiang Mai, Chiang Rai, Pattaya and Phuket.
Police were searching for the people who initially placed the physical coins, he said.
PSD commander Pol Maj Gen Worawit Yanachinda has ordered increased patrols to prevent offences by Jagat coin hunters and possible crimes against them.
He said app users must pay for specific clues to a physical coin. One such clue had caused a lot of people to descend on the Silom area of Bangkok, causing great disruption to local people, the PSD chief said.
He also warned that young coin hunters who go to recommended locations at night might be attacked by criminals.
The coin hunting campaign in Thailand was initially set to last 30 days, but it might not last that long, because high-level police were aware of it and could take action, Pol Maj Gen Worawit said.
Donald Trump is an unexpected United States president in that he may be the second to reach greater anxiety in friends than in enemies.
Take the replies to his pre-inauguration remarks about buying Greenland, for example, which placed US alliance Denmark at the center of the international foreign legislation radar screen and caused the Swedish government – which retains control of the territory’s foreign and security policies — to proclaim Greenland is n’t for sale.
Canada is also in Trump’s sights with trade tariff threats and claims it should be the 51st US state. Its government has vociferously opposed Trump’s comments, begun back-channel lobbying in Washington and prepared for trade retaliation.
Both cases highlight the coming challenges for management of the global US alliance network in an era of increased great power rivalry– not least for NATO, of which Denmark and Canada are member states.
Members of that network saw off the Soviet Union’s formidable Cold War challenge and are now crucial to addressing China ’s complex challenge to contemporary international order. They might be excused for asking themselves the question: with allies like this, who needs adversaries?
Trump’s longstanding critique is that allies have taken advantage of the US by under-spending on defense and “free-riding ” on the security provided by Washington ’s global network.
In an intuitive sense, it is hard to deny this. To varying degrees, all states in the international system– including US allies, partners and even adversaries – are free-riding on the benefits of the global international order the US constructed after the Cold War.
But is Trump, therefore, justified in seeking a greater return on past US investment?
Since alliance commitments involve a complex mix of interests, perception, domestic politics and bargaining, Trump would n’t be the deal-maker he says he is if he did n’t seek a redistribution of the alliance burden.
The general problem with his recent foreign policy rhetoric, however, is that a grain of truth is not a stable basis for a sweeping change in US foreign policy.
Specifically, Trump’s “free-riding ” claims are an oversimplification of a complex reality. And there are potentially substantial political and strategic costs associated with the US using coercive diplomacy against what Trump calls “delinquent ” alliance partners.
The inconvenient truth for Trump is that “free-riding ” by allies is hard to differentiate from standard alliance “burden sharing, ” where the US is in a quid pro quo relationship: it subsidizes its allies ’ security in exchange for benefits they provide the US.
And whatever concept we use to characterise US alliance policy, it was developed in a deliberate and methodical manner over decades.
US subsidization of its allies ’ security is a longstanding choice underpinned by a strategic logic: it gives Washington power projection against adversaries and leverage in relations with its allies.
To the degree there may have been free-riding aspects in the foreign policies of US allies, this pales next to their overall contribution to US foreign policy.
Allies were an essential part in the US victory in its Cold War competition with the Soviet-led communist bloc and are integral in the current era of strategic competition with China.
Overblown claims of free-riding overlook the fact that when US interests differ from its allies, it has either vetoed their actions or acted decisively itself, with the expectation reluctant allies will eventually follow.
During the Cold War, the US maintained a de facto veto over which allies could acquire nuclear weapons ( the UK and France ) and which ones could not ( Germany, Taiwan, South Korea ).
In 1972, the US established a close relationship with China to contain the Soviet Union– despite protestations from Taiwan, and the security concerns of Japan and South Korea.
In the 1980s, Washington proceeded with the deployment of US missiles on the soil of some very reluctant NATO states and their even more reluctant populations. The same pattern has occurred in the post-Cold War era, with key allies backing the US in its interventions in Afghanistan and Iraq.
Trump’s recent comments on Greenland and Canada suggest he will take an even more assertive approach toward allies than during his first term. But the line between a reasonable US policy response and a coercive one is hard to draw.
It is not just that US policymakers have the challenging task of determining that line. In pursuing such a policy, the US also risks eroding the hard-earned credit it earned from decades of investment in its alliance network.
There’s also the obvious point that it takes two to tango in an alliance relationship. US allies are not mere pawns in Trump’s strategic chessboard. Allies have agency.
They will have been strategizing how to deal with Trump since before the presidential campaign in 2024. Their options range from withholding cooperation to various forms of defection from an alliance relationship.
Are the benefits associated with a disruption of established alliances worth the cost? It is hard to see how they might be. In which case, it is an experiment the Trump administration might be well advised to avoid.
Nicholas Khoo is associate professor of international politics and principal research fellow, Institute for Indo-Pacific Affairs ( Christchurch ), University of Otago
This article is republished from The Conversation under a Creative Commons license. Read the original article.
I’m a propaganda, and if I believe that is going to make people believe what I need them to think, I’ll twist the truth. I’ll just make my own version of it.
This is not a soundbite from a specially exuberant time in the hit television show Mad People. The CEO of Silicon Valley’s hottest company for military technology, Palmer Luckey, uttered these words.
Luckey’s business, Anduril Industries, specializes in unnatural intelligence-enabled systems, including automatic weapons techniques. Anduril is a darling of the defense startup scene and its newly emerging venture capital (VC ) ecosystem, where big promises, big bets, and a bias toward propaganda are a staple required for success, with a valuation of US$ 14 billion.
The integration of artificial intelligence ( AI ) into defense programs, let alone weapon systems, remains controversial. The UK Artificial Intelligence in Weapon Systems Committee has urged caution in regards to the sourcing of AI-enabled arms, but as is frequently the case with Silicon Valley products, the creation, purchasing, and implementation of AI protection programs have quickly accelerated in recent years.
Founded only in 2017, Anduril has already been awarded multiple multi-million dollar contracts by the US Department of Defense ( DoD ), as well as the UK Ministry of Defense ( MoD ). This may not seem like a amazing growth in light of the ongoing Russia-Ukraine conflict, the conflict in Gaza, and rising global stress.
In my latest research on defense AI, I identified that one of the key owners of the accelerated purchasing of military company products, such as automatic drones and another AI-enabled systems, is the influx of huge sums of venture capital money and influence.
These venture capital firms must adopt the speed and scale ethos of the technology sector and the appetite for risk and revolution in these venture capital firms. This makes these firms not only financial players but also political ones.
This trend toward creating defense in the vein of Silicon Valley, driven by venture capital interests, is likely to become more pronounced and pervasive, according to my research, which was published in Finance and Society. With this in mind, it’s worth looking more closely at the dynamics in play when venture capital sets its eyes on matters of life and death.
The military AI industry and global defense spending are both booming. The global market for military AI was estimated to be worth$ 13.3 billion in 2024, with a projected growth of$ 35 billion over the next seven years, according to current estimates.
These numbers vary, depending on the market data services consulted, but they have been revised upward on a regular basis in the last 12 months. In the last 24 months, global defense budgets have also increased in response to ongoing conflicts and a general escalation in militarization.
Global defense spending reached a record level of just over$ 2 trillion in 2023. In 2023, the US accounted for nearly 40 % of global defense spending with an$ 877 billion budget. The NATO alliance will be spending US$ 1.47 trillion in 2024. For large tech and finance companies with plans to establish themselves in the defenSe market, these are significant, attractive numbers.
Meanwhile, defense organizations are starting to spend more money on cutting-edge technologies, including, inevitably, AI. According to a report from the Brookings Institute in 2024, defense contracts for AI-related technologies increased by nearly 1, 200 % in the 12-month period from August 2022 to August 2023.
For most new AI products, civilian or otherwise, some form of venture capital funding is often involved, especially if the AI venture in question might prove to be too risky to be funded through bank loans or other financial instruments. Venture capital is prepared to place bets on innovations that other investors would not be able or unwilling to accept.
In the past two decades, this type of funding has primarily focused on Silicon Valley products for the civilian market, where the dynamics have allowed for extraordinary gains to be made for investors.
However, those with large amounts of capital to invest see a new opportunity for huge gains in defense as the defense market is expanding and the opportunities for extraordinary venture capital returns in the commercial spheres diminish.
It is unsurprising, then, that in the past five years, venture capital investment in defense technologies has surged. US venture capital funding for military technology startups has doubled between 2019 and 2022, and since 2021, the defense technology sector has received an injection of$ 130 billion in VC funding.
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Private VC investments are projected to reach a record$ 1 billion, driven primarily by US venture firms, and are also at an all-time high for the European defense sector. There is a palpable buzz in the air about the possibilities for VC-backed endeavors and the possibility to reshape the defense landscape.
Venture capital has always been connected to the military sector in some way. In fact, venture capital defense investing is experiencing a boom since its infancy.
The origins of venture capital are  , typically traced back , to the American Research and Development Corporations ( ARDC ) founded in 1946, just after the Second World War, in which the US was buoyed by a victory achieved, at least in part, by cutting-edge technologies.
One of the first businesses to consistently raise money from institutional investors to finance start-up businesses with a lot of potential but too risky for bank loans was ARDC.
With this approach, ARDC was the first venture capital outfit to create investment portfolios that often relied on one or two extraordinary successes in order to offset the majority of companies that only made very modest returns or, indeed, losses. In this way, ARDC was the first “unicorn” company to exist.
Unicorns are young companies that receive a valuation of US$ 1 billion or more (up until recently an exceedingly rare occasion for a startup and something every investor covets in their portfolio ). This is at the heart of investing in venture capital: it is risk-based with potential very high returns.
In the early days, especially just after the Second World War, many investments went toward supporting startups that would deal with , military innovation and technologies. This resulted in the development of various analytical tools, high-voltage generators, radiation detection technology, as well as early mini-computer manufacturers, such as the Digital Equipment Corporation.
The digital landscape, as we know it today, has its roots in the military. In the 1950s, advancements in communications theory were intended for military missile technology, and the grandfathers of AI were almost entirely involved in military projects that spanned the course of the internet.
Many Silicon Valley firms remained entangled with the military sector over the decades and, as the anthropologist Roberto Gonzales has written, almost” all of today’s tech giants carry some DNA from the defense industry, and have a long history of cooperating with the Pentagon”. This relationship is then incorporated into the DNA of venture capital.
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But, it is worth stressing that traditionally it was the needs of the military organizations and the governments that largely dictated the pace, structure and process for technological innovations.
A progressively vocal and influential technology startup industry and their funding partners have now launched a raft of” Patriotic capital” initiatives, including American Dynamism, the Special Competitive Studies Project, Rebooting the Arsenal of Democracy, and America’s Frontier Fund.
These enterprises were conceived by a handful of prominent companies and individuals in the new defense tech domain to shape defense and military priorities and make good returns while doing so.
In addition to unicorn companies like Anduril Industries, Shield AI, Skydio, Scale AI, and Palantir ( Palantir is technically no longer a startup since it went public in 2020, but it is still one of a cohort of new military technologies ), unicorn companies are proliferating in the defense sector thanks to large amounts of venture capital funding.
This is a recent development. The venture capital sector concentrated its efforts on a thriving civilian technology landscape over the two decades from the mid-’90s to 2014, where the sky was the limit for returns from technology startups like Google, Microsoft, Facebook, and PayPal.
The defense market, in contrast, was considered mature and consolidated, with strict acquisition rules and regulations and too little opportunity for outsized returns on investments. It would typically take several years for a government contract to be completed.
Defense was also dominated by a handful of key industry players – the so-called primes which include Lockheed Martin, RTX Corporation, Northrop Grumman, Boeing, General Dynamics and BAE Systems.
These primes split up the lion’s share of the defense market among themselves, and there appeared to be little room for tech startups to expand without significant investment.
For example, companies like SpaceX and Palantir sued the US Air Force and US Army in 2014, respectively, for the opportunity to bid for certain contracts. Since then, it has become more common to break open defense for military startups.
In addition to these structural hurdles for VC investment in the defense sector, there was a greater nominal moral cost associated with the idea of profiteering from war. There was a perceived reluctance to be viewed as investing in” a defense portfolio” or, to put it another way, in instruments of death because venture capital investors are frequently endowments, foundations, insurance companies, universities, and pension funds. European venture capital investors were particularly cautious.
However, the remarkable speed with which this trepidation appears to have subsided in less than a decade is remarkable, suggesting either that the investors supporting venture capital firms come from diverse backgrounds that might have less hesitation when it comes to gaining from the business of war or that it was always just a matter of math rather than morals.
Everyone wants to invest in a unicorn today because its valuation potential is so high.
But in order to get a foot in the door with an unproven product or concept, some startups can be motivated to make big, bold claims about the revolutionary, change-making nature of their products. The ethos of overpromising is frequently maintained even after a company has secured funding in order to maintain success toward hypergrowth.
In the worst-case scenario, overpromising is done at such scale that it amounts to criminal fraud, as it was the case with the notorious blood testing startup Theranos, which went from being one of the most exciting healthcare startups, valued at$ 10 billion at its peak in 2015, to a complete bust in four short years.
In the Theranos case, the charismatic founder of the business had overpromised the capabilities of the technology, claiming that it would make it possible to perform a number of tests using only one tiny drop of blood. This ground-breaking technology” could revolutionise medicine and save lives the world over“.
Although the technology was a promise made in the future, it was a lie that the company claimed to already have a functioning testing device. Theranos folded in 2018 and the charismatic founder, Elizabeth Holmes, went to prison.
There are many other, less dramatic stories that play out in a similar, although not fraudulent way: companies that promise to revolutionize the way we do mundane things with ground-breaking technology, which turn out to be unsustainable, unworkable, or simply fizzle out.
However, the outcome is that investors lose money and that, more importantly, that those who have come to rely on the promise of technology suffer.
In the defense context, the promises of new military technology revolve around selling powerful deterrence, of protecting democracy, of being able to have comprehensive, accurate, real-time knowledge, of a fully transparent globe, and, first and foremost of a clean, swift and decisive victory with smooth and effortless connectivity.
This can foster an unrealistic vision of omniscience and omnipresence at worst, and at worst, it fosters a desire for an unthinkable revolution in warfare that is too appealing to resist, which ultimately draws an even wider audience into its wake.
These narratives are often underwritten by a general hype that a future with AI is inevitable. This creates a compelling narrative that mythologizes and valorizes a technology that may never deliver what is promised. It is a potent mix that often resists more sober voices that urge caution.
Although the claims made by defense unicorns frequently seem plausible, they are typically untrue because they relate to the future. And often that future reflects a vision shaped by fiction and science-fiction, which is always some degrees removed from the social and political challenges of reality.
Programs that strive to achieve global transparency and reach quickly are influenced by this temptation to overpromise and the mythologize of potential technology. The Joint-All-Domain Command and Control ( JADC2 ) program is one such effort initiated by the Pentagon. For “predictive analysis” and “high-speed battle,” it aims to unite all domains, including land, air, sea, space, and cyber, into a single network.
To make the program palatable to Congress, JADC2 is often likened to the ride-sharing platform Uber, promising seamless interaction between systems and platforms for speedy interventions.
This brings attention back to AI as a fundamental requirement for all military equipment and platforms. Without expanding military AI, this vision will be impossible. The opportunity for military startups is located here.
Two prominent military tech companies are contractors for JADC2 – Anduril and Palantir. Both businesses keep their ambitions to disrupt the defense sector, unseat the current leaders, and carve out a monopoly share of the market in order to increase profits.
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Palantir has set its eyes on “becoming the central operating system for all US defense programs”, Anduril has declared that it will be going” after everything that’s on the]Defense Department’s ] list” in order to dominate in the sector. This is the battle for growth for both businesses.
As Anduril’s Luckey says: “you have to fight and win across multiple areas“. ( He refers to that in terms of corporate strategy, not actual battlegrounds. ) Similarly, CEO and co-founder of Palantir, Alex Karp, acknowledged that, in order to break defense as a market wide open, he is proud to “have dragged and kicked and cajoled and humiliated” various lawmakers, policymakers and government to help further this goal. Move quickly and damage things.
Making a unicorn requires a concerted effort and an aggressive posture on the part of those who stand to gain the most financially in this domain. It is best to work together with like-minded individuals. In the current defense venture capital landscape, there is a close entanglement of founders and funders.
For instance, Peter Thiel is the co-founder of Palantir. He also oversees the Founders Fund VC company, which has investments in Space X, Anduril, and Scale AI, among others. The VC company Andreessen Horowitz also funds SpaceX, Anduril, Shield AI and Skydio.
These VC companies ‘ managers have close ties to one another. Similarly, there is interlacing between companies. For instance, former Palantir employees who founded Anduril, who applied their knowledge gained from Palentir to the company. Palmer Luckey, formerly of Oculus Rift, was installed as its charismatic and outspoken CEO.
The America’s Frontier Fund is being led by Eric Schmidt and Peter Thiel, who were formerly the CEO of Google and the head of the US National Security Commission on Artificial Intelligence.
There is a tightly knit and very well-connected network of financiers and startups that all work to double down on the key driving message: the defense sector is in need of disruption and we are the ones to shake things up.
Representatives of five newly established military organizations were present at a recent panel giving evidence to the US Armed Services Committee. Every single one of the five was either funded by the VC firm Andreessen Horowitz or otherwise affiliated with the firm.
At the US Armed Services Committee hearing, Palantir’s Chief Technology Officer, Shyam Sankar, testified in favor of “letting chaos reign” and “more crazy” in the military acquisition and procurement process so that the necessary incentives can be forwarded for innovation through inter-departmental competition.
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Regulatory limitations, he thinks,” constrains you to oversight” and he “would gladly accept more failure if it meant that we had more catastrophic success”. Although it is unclear what kind of success this might lead to or what might happen if it fails, Palantir’s CTO makes it abundantly clear that he speaks with venture capital logic in mind.
And, according to a recent US Defense Innovation Board report, it seems the government is ready to embrace more risk and provide top cover for such “mavericks”.
Besides cultivating startups with high potential, there are a number of ways to bend the defense sector to the needs of Silicon Valley contractors and their VC backers. Here, too, storytelling has a lot of power.
Venture capital managers and their startups often pen high-profile op-eds in which the poor state of ( US) defense is lamented, in which the need for accelerated innovation is emphasized, and in which the possibility that the US might “very likely” become embroiled in” a three-front war with China, Russia and Iran” is conjured up. In essence, the urgency is conveyed, which encourages the promotion of businesses that are aware of the coming crisis.
A second pillar in the structural overhaul of defense is to employ an intricate network of former government employees who serve either as lobbyists or as advisers with close links to the government.
For instance, in August 2024, former Republican Congressman Mike Gallagher assumed the role of Palantir’s head of defense operations, and H. R. McMaster, former National Security Advisor, is senior advisor to Shield Capital.
There are many more such “revolving door” moments in which credible experts lend their authority to the new startups. Like most Silicon Valley creations, the military tech startup scene has a certain reputation, and the money is also appealing.
Anduril, having learned from Palantir, hired a slew of lobbyists in the first week, spending more money on “lawyers and lobbyists than engineers” as Luckey noted in a recent interview with The Economist.
With this, Anduril adopts a relatively traditional method of shaping the defense industry, which is also employed by top defense contractors, who are “investing heavily on teams of lawyers and lobbyists to shape program requirements in line with the company’s existing technology,” as Anduril acknowledges in a 2022 blog post.
Anduril, and its backers, are now doing the very same, tailored to their own suite of technologies. The attorneys are frequently employed as a means of using the law as a tool to compel reform as well as to oversee mergers, acquisitions, and partnerships.
The primary goal of the SpaceX and Palantir lawsuits against the US Army and Air Force, which I mentioned earlier, was not necessarily to win ( Space X’s lawsuit was not successful, Palantir’s was ) but to pry open space for acquisitions overhaul and both lawsuits achieved just that.
A strategy of promoting a sense of urgency, working with lobbyists, and creating the structural potential for a defense overhaul is now well underway. To be clear, I am not arguing that the defense sector would not benefit from modernization or restructuring.
I don’t want to say that all new military products are unsustainable or irrelevant. I am also not seeking to pit the primes against the new venture capital dynamics and their focus on growth.
But what I believe is worth looking into are the dynamics at play with these new businesses and their implicit priorities and interests, since they will influence how practices and priorities are decided. And where disruption is at work, some level of breakage is to be expected. In terms of life and death, this has a different tone.
The disruption in the defense sector is already well underway, and efforts to remake it in the style of Silicon Valley have had a number of positive effects in recent years. The JADC2 program mentioned earlier is one.
Others are evident in programs like the US Department of Defense’s Replicator Initiative, which incorporates the aims, timelines and products that Silicon Valley military startups have to offer.
Defense officials are repeating the venture capital industry’s talking points, and various acquisition programs have changed to accommodate the required speed and scale. These companies have the ear of policymakers and the demands for a quasi-spiritual” Defense Reformation” are finding a growing audience.
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What are the possible effects, then?
When Uber disrupted the private transport industry, it left in its wake a raft of eroded labor laws, worker’s rights and healthcare provisions for drivers. When AirBnB’s industry boomed, rental costs increased in well-known tourist destinations. When you try to create a monopoly, there are always social and political consequences. These effects are frequently predictable, but occasionally not.
Disrupting the defense acquisitions process comes, at the very minimum, at the expense of greater oversight of the acquisitions process. The technology industry is not known for being aware of the limits of regulations. Quite the contrary. Some of the most well-known investors in the new military startup scene are most vehemently opposed to any form of regulation.
VC heavyweight Marc Andreessen, for example, famously penned a Techno-Optimist manifesto in which he names risk management, trust and safety measures and the precautionary principles as” the enemy”.
Less regulation results in less oversight and accountability for spending, as well as for how and where specific technologies are used, and what effects are caused by them. This much is evident.
However, the rapid deployment and deployment of military technologies for battle may have many other, highly plausible, unforeseen effects. One is the refocusing on risk and experimentation.
The most recent crop of military startup technologies, such as AI-enabled drones and AI decision support systems, are being tested and improved both live and during ongoing conflicts, such as the Russia-Ukraine war, as well as in Gaza. This is a form of prototyping which is becoming increasingly prominent and which needs an active battlefield for effective testing, iteration and optimizing of the technologies.
This also means that it is possible to use outdated technologies that will only be tested and improved as you go along. It normalizes, if not promotes, the launch and sale of flawed and possibly inadequate AI products, which will inevitably cause harm to innocent civilians caught in the crosshairs of conflict.
We can already see this as a result of technology companies ‘ efforts to sell their large language models to military organizations. Scale AI, for example, has teamed up with Meta to sell an LLM product, Defense Llama, for defense purposes. The organization claims that the system needs “absolutely to involve people.”
But given the well-known fact that LLMs are prone to what are known as hallucinations, the chances that such technologies will work exactly as advertised are slim for a context so complex and dynamic as warfare. People who are in the middle of this experimentation, fine-tuning, and live testing may suffer as a result.
It is a key concern that the technology might not be suitable for the unexpected, for the less calculable or less foreseeable elements in warfare. That includes potential new terrorist threats or actions by those nations that are frequently viewed as irrational, like North Korea, for instance.
Anduril CEO, Luckey, admitted as much in the interview I opened with. He acknowledged that potential enemies who reject the game’s theoretical foundation on which much of the AI logic for defense rests:” Each of whom is responsible for the logic on which his weapons are built falls apart.”
” It’s very hard to engage in game theory with people who pursue the non-game theory optimal strategy…It’s like playing monopoly with the person who is going to drop out and give all their money to somebody else”.
A significant impediment to something that is so rife with chance as warfare. There are also second and third-order effects that emanate from this shift toward venture capital logic.
By presenting an imminent threat, the global risk and security landscape may change, by placing greater emphasis on weapons technologies, funding for alternative approaches to conflict might be restrained, and by dedicating more money to technologies that are still being tested and may not have permanence, significant amounts of money that would be better spent elsewhere might be wasted.
But this is a land of make-believe and unicorns, where such considerations are as speculative as the much-hyped promises of AI weapons as the defenders of democracy.
The “move fast and break things” motto in Silicon Valley implies that issues that arise during the development of the technology can always be addressed and resolved later. In the world of defense and war, the harm produced by this kind of risk-taking cannot so easily be undone.
Elke Schwarz is a lecturer at Queen Mary University of London’s Political Theory program.
This article is republished from The Conversation under a Creative Commons license. Read the article’s introduction.
When Donald Trump re-enters the White House, he’ll get accompanied by a group of China hawks who will use tariffs and trade restrictions to prevent Beijing from challenging the country’s technological superiority.
China has been subject to such industry force since Trump took office in 2017 and it has continued through the Biden administration. This isn’t completely new.
However, some commentators are suggesting that the magnitude of what Trump is now proposing, including taxes of up to 60 % on goods from China, had “keep Beijing on the defense and completely transform the rivalry in America’s favor,” according to one analyst.
For a watch is premised on the belief that China’s obsolete, state-subsidized, manufacturing-for-export type is mature for disturbance by US taxes.
However, as someone who has written and edited two books on China and creativity and studied China’s systems since the early 2000s, I believe this description of its economy is at least two years out of date.
China’s industrial sectors have grown fast since 2016 as a result of the removal of American tariffs. However, since the” business war” launched by Trump in 2017, Chinese systems has really emerged as a world leader.
Thirty years ago, China’s best technology company had yet to create a competitive personal computer internally, and the country scarcely had internet access. The nation was the nation’s manufacturer fifteen years ago, where iPhones and other technology products were assembled without the ability to produce any high-tech components on their own. They were stuck at the bottom of the value chain.
No Chinese planners could have predicted the future directions that China’s technology would take it even with the best glass game in the middle of the 2000s.
Fast-forward to now: China is today ahead of rival economies across large industrial areas. The think tank Information Technology and Innovation Foundation found in a 2024 statement that China is leading or internationally competitive in five out of nine high-tech businesses – automation, nuclear energy, electric vehicles, artificial intelligence and quantum computing – and quickly catching up in four others: chemicals, system tools, biopharmaceuticals and semiconductors.
A Bloomberg research also identified China as leading or internationally competitive in 12 out of 13 technology-intensive business. And China was identified as the leader of 37 of the 44 crucial systems tracked by the Australian Strategic Policy Institute.
Why has the Chinese technology sector grown so fast? Some in Washington think that the decades of meticulous state planning have given rise to the world’s high-tech sectors.
But this, I believe, greatly overestimates Beijing’s vision and power. Although the Chinese government has certainly pursued the lofty objective of catching up with the West since the 1980s, having goals is not the same as having the ability to carry them out.
Many in the West level to the Chinese government subsidies that support local tech companies. While grants have contributed to some technical achievement, the Chinese government has also provided many problems.
Take electronics, for example: Despite massive Chinese state assets since the 1990s, China still lags in producing cutting-edge cards and is reliant on goods.
In my view, China’s technological dynamism didn’t come from the magic of central planning, but through five key elements I call DREAM.
D stands for the exchange between the state and the market.
While China’s government wields significant power, the country’s private sector is neither submissive nor powerless. In 2022, businesses that are not owned by the government ( mostly private ones ) but also offshore ones in which Beijing does not hold a controlling stake accounted for 95 % of enterprise R&, D spending and 88 % of urban employment.
Beijing has stepped up its sanctions against tech giants, including a ban on Alibaba’s Ant Group from listing on the New York Stock Exchange in 2020 and a Covid-19 lockdown that hurt the private sector, but the government is not bound by strict ideology, as many in the West believe it to be. It has recently begun to support the private sector, and it has even begun to draft laws to protect them.
Indeed, it’s more accurate to describe state-market relations in China as dynamic, adaptive interaction– more dialogue than dictatorship.
R refers to domestic R& and D ( R&, D).
Over the past 20 years, China has heavily invested in domestic research capacity, once dependent on imported technology. Chinese scientists and engineers continue to be deeply involved in global networks despite the fact that political tensions have accelerated the development of self-reliance.
Further, China has a higher number of highly skilled workers thanks to a supposedly anti-espionage initiative launched under Trump’s first administration.
The” China initiative” that the US Justice Department introduced in 2018 promoted the idea that Chinese and Chinese American scientists might be spying for Beijing, leading to a flood of top scientists returning to China.
They continued to conduct cutting-edge research and train a fresh batch of Chinese scientists there.
E is for China’s industrial ecosystem, which it can exploit.
China’s vast manufacturing base enables rapid creation and scaling of new technologies. China was the only nation to cover every major industrial sector and contributed 35 % of the global gross manufacturing output in 2023.
Silicon Valley’s innovative ecosystem, which can rely on extensive venture capital and a booming stock market, may not exist in China. However, it has over the years developed comprehensive supply chains, and it excels at repurposing them to quickly introduce new products to the market.
Take the example of robotics. Only when labor costs increased sharply, did China take the robotics industry seriously. In 2010, China’s manufacturing labor costs were about US$ 2 per hour, similar to those of the Philippines or Vietnam, by 2022, that figure rose to about$ 8 per hour – more than double the average for Southeast Asian countries.
China installs more industrial robots each year than the rest of the world combined, and its robot quality has increased exponentially.
A stands for accumulative changes.
Chinese companies excel at incremental improvements, which add up to an accumulative transforming effect rather than new discoveries. Instead of a few brilliant ideas from any leader’s creative mind, the vast manufacturing networks offer opportunities to improve already-existing products based on market feedback.
Analysts in the US have long predicted that China’s rampant intellectual property violations would end its innovation drive, believing that it would stifle people’s desire to innovate if they believed they would be robbed of their ideas.
Instead, as Taiwanese tech expert and writer Kai-Fu Lee has explained, Chinese enterprises can be dynamic and innovative in an environment with less IP protection. They frequently grow their market share quickly and establish business ecosystems to stop rivals from catching up.
M means the middle market.
Chinese firms tend to target middle-income consumers, both domestically and globally. By prioritizing affordability and functionality over cutting-edge innovation, they avoid head-to-head competition with Western giants such as Apple.
Xiaomi and Oppo, two Chinese smartphone manufacturers, cost a third to a third as much as an iPhone but have comparable features. Tesla and other Chinese electric vehicles have comparable prices, but they still have some excellent features.
Chinese firms tolerate lower profit margins, as they can rely on the expanded sales in the middle market, both domestically and, increasingly, overseas.
The incoming Trump administration’s issue is that, while tariffs may change how China’s manufacturing and exports are perceived globally, they won’t eliminate any of the DREAM components. They might actually have the opposite effect: boosting China’s capacity for self-reliance and bolstering its standing in the world’s middle-class.
The issue is primarily due to the fact that American policymakers frequently view technological competition with China as a zero-sum game. However, technological competition is not comparable to a race with separate lanes and a finish line. Rather, tech transformation is a complex process in which countries and companies compete, collaborate and build on each other’s work.
Ultimately, America’s technological prowess won’t be measured by the extent to which it manages to stop China, but by how successfully American companies can address humanity’s greatest challenges. There will be little progress made in the direction of tariffs and trade wars.
Vassar College’s professor of economic geography is Yu Zhou.
This article was republished from The Conversation under a Creative Commons license. Read the original article.
The important part place would play in a Taiwan Strait conflict is highlighted by China’s strong moves to counter Starlink’s martial applications with cutting-edge satellite disruption methods.
This month, the South China Morning Post (SCMP ) reported that Chinese scientists have developed a method to target SpaceX’s Starlink satellite constellation. According to SCMP, the technique is used to simulate a space mission that could use 99 Chinese satellites to view nearly 1,400 Starlink satellites in less than 12 hours.
The study, led by Nanjing University of Aeronautics and Astronautics director Wu Yunhua, features Starlink’s martial applications as seen in the Ukraine conflict.
According to the Chinese team’s computer model, China could effectively monitor and control the functional status of Starlink satellites, which are equipped with lasers, microwaves, and other types of reconnaissance and tracking equipment. The SCMP report cites a fresh linear AI engine that was used to mimic the whale hunting strategy.
Wu’s team claims to have created an unheard technology that makes it possible for computers at the surface command center to create a detailed and trustworthy action strategy in less than two hours.
Additionally, it states that the Harbin Institute of Technology, which is also a member of the job, has received significant funding from the Foreign government and military.
China is officially developing anti-satellite systems to counteract the Starlink network’s perceived military threat, which has shown geopolitical utility in Ukraine by enabling real-time battle coordination.
Foreign researchers advocate” soft and hard remove methods” to destroy Starlink’s distributed star, which provides resilient connection through over 2, 300 satellites.
Targeting individual Starlink satellites is deemed inefficient, instead, China has explored disruptive technologies, including the Relativistic Klystron Amplifier ( RKA ), a high-power microwave weapon capable of disabling sensitive satellite electronics. But, deploying for techniques faces challenges, including dish heat and power demands.
China is also developing advanced directed-energy arms like solid-state laser mounted on spacecraft and is exploring the potential of X-ray beams, which are concepts from the US Strategic Defense Initiative ( SDI) to destroy some satellites simultaneously. This strategy aims to remedy the standard anti-satellite arms’ cost-exchange imbalance.
The logic for these programs stems from Starlink’s confirmed defense advantages, such as boosting US drones ‘ and cunning fighters’ data speeds by 100-fold, and its important role in Ukraine’s field successes, including the sinking of the Russian cruiser Moskva.
China’s rely on such technology reflects a broader strategy to mitigate Starlink’s features and maintain space superiority, especially in scenarios like a Taiwan issue.
Noting Starlink’s effectiveness in the Ukraine war, Juliana Suess mentions in a January 2023 article for the Royal United Service Institute ( RUSI) that Taiwan, inspired by Ukraine, is developing its Low-Earth orbit ( LEO ) satellite communications system.
According to Suess, the project was announced by the Taiwanese Space Agency in December 2022 and aims to give Taiwan a sovereign capability for independent communications in the event of a Chinese invasion.
She points out that the system is designed to protect Taiwan’s undersea cables, which currently serve as the backbone of its external communications, from potential attacks.
In a July 2024 report for the Stanford Cyber Policy Center, Charles Mok and Kenny Huang highlight the vulnerability of Taiwan’s undersea cables, which the island relies on for its internet connectivity.
Mok and Huang point out that Taiwan has 15 submarine cables that connect it to international digital networks and carry over 99 percent of the world’s data. The risk of unintentional or deliberate cable damage is increased, however, because its location in an earthquake-prone region and its proximity to geopolitical tensions.
They note recent incidents of severed cables near Taiwan, which are believed to be involving Chinese ships, have raised concerns about potential digital blockades. They point out that fixing undersea cables takes time, and that having a few global repair fleets adds to this.
In line with the vulnerabilities of Taiwan’s undersea cable infrastructure, The War Zone reported this month that Taiwanese authorities have accused a Chinese-owned vessel, the Shunxin-39, of severing an undersea communications cable near Keelung Harbor.
According to The War Zone, this incident is the most recent in a line of similar events affecting Taiwan’s underwater infrastructure. The Shunxin-39, which is registered in Cameroon but controlled by a Hong Kong company led by a Chinese national, was discovered to be operating under multiple identities, raising questions of deliberate sabotage.
According to the report, Taiwan’s coast guard attempted to intercept the vessel for investigation, but rough weather prevented boarding. The ship then mentions that it continued its journey to South Korea, where Taiwanese authorities requested assistance with the investigation.
According to The War Zone, the damaged cable from the Trans-Pacific Express network is essential for connecting East Asia to the US West Coast. The report says that although communication was rerouted with minimal disruption, the incident highlights the vulnerability of Taiwan’s undersea infrastructure.
Although satellites are immune from these flaws, Mok and Huang contend that undersea cables cannot be replaced due to their high cost and limited data storage.
Furthermore, Marc Julienne mentions in a November 2024 report for the French Institute of International Relations ( IFRI ) that while ambitious, Taiwan’s LEO satellite program faces several key challenges.
First, Julienne makes a note of the fact that the use of foreign partners for satellite launches highlights the lack of local launch capabilities, a significant impediment to achieving full space power status. Although autonomous launch vehicles are in the works, he claims that development is still slow, with test flights only scheduled for 2028.
Second, he claims that efforts to create a domestically controlled LEO broadband satellite constellation are hampered by the limited experience in space-based communications among Taiwan’s traditional space actors and the lack of satellite communication expertise within its industrial base.
Julienne says these challenges are compounded by Taiwan’s geographic and geopolitical vulnerabilities, such as reliance on submarine cables for internet connectivity, which are prone to natural disasters and potential sabotage by adversaries.
He makes the point that Taiwan’s efforts to improve” communication resilience” through satellite constellations are important but require significant financial and human capital investments. However, he says Taiwan’s burgeoning space sector struggles to attract and retain talent, with many engineers favoring higher-paying opportunities in semiconductors or working overseas.
Finally, Julienne says navigating the geopolitical sensitivities of space development, particularly in maintaining civilian oversight and avoiding provocative military applications, adds complexity to Taiwan’s ambitions.
With the exception of a canceled state visit to Denmark, Donald Trump faced a lot of ridicule when he first made an offer to purchase Greenland in 2019. Fast forward six times and Trump’s renewed “bid” for the nation’s largest beach is back on the table.
And that too with renewed strength. In an interview on January 7, the approaching US leader refused to rule out the use of force to take ownership of Greenland and he dispatched his brother, Don Jr,” and several associates” there on January 8, 2025, to emphasize his sincerity. Money may not be a hindrance to any offer that Trump envisages, especially with Elon Musk taking over the plan.
Trump is not the first US politician to attempt to get Greenland. The island’s first acquisition test dates again to 1868, the first time it has been documented.
The next significant efforts since Trump was made by the 1946 administration’s president, Harry S. Truman. Trump’s renewed interest in Greenland hence continues a long line of geographical expansion efforts by the United States.
Trump’s most recent bet is less absurd today than it may have appeared again in 2019 even without this historical background. On the one hand, Greenland is extremely rich in so-called” important materials”. According to a 2024 record in the Scholar, the area has known reserves of 43 out of 50 of these nutrients. According to the US Department of Energy, these minerals are necessary for “technologies that create, transmit, store and preserve power” and have” a higher risk of supply chain disruption”.
Given that China, a major distributor of a number of crucial nutrients to international markets, has been putting more restrictions on its imports as part of an ongoing business dispute with the US, this is undoubtedly a valid concern. Washington would have more control over the supply chain and lessen any utilize that China might have to exert. Having access to Greenland’s solutions.
Greenland’s corporate location also makes it valuable to the US. Pituffik Space Base, a well-established US center, is crucial to US weapon protection and early warning and is important for space surveillance. The base’s future growth may also improve US ability to track Russian naval activities in the Arctic Ocean and the northern Atlantic.
US autonomy over Greenland, if Trump’s deal comes to pass, do likewise properly buckle any goes by rivals, especially China, to get a grip on the island. If Greenland is still a member of NATO, which has provided the island with an quarterly grant of about US$ 500 million, this may be less of a issue.
Greenland’s freedom – assistance for which has been gradually growing – may open the door to more, and less controlled, foreign purchase. In this situation, China is perceived as especially eager to step in if the chance arises.
Add to that the growing security assistance between Russia and China and the fact that Russia has typically become more physically violent, and Trump’s case appears to be even more reliable. He is not the only one to raise the alarm: Canada, Denmark, and Norway have all recently reacted to the growing Russian and Chinese presence in the Arctic.
The issue with Trump’s proposal is not that it is based on a flawed assessment of the underlying issue it attempts to address. In a time when geopolitical rivalry is waning, Russia’s and China’s influence in the Arctic region is generally a security issue. In this context, Greenland unquestionably poses a particular and significant security risk to the United States.
The problem is Trump’s” America first” tunnel vision of looking for a solution. insisting that he wants Greenland and that he will receive it, even if that means imposing high tariffs on Danish exports ( think Novo Nordisk’s weight-loss drugs ) or imposing force.
Predictably, Greenland and Denmark rejected the new “offer”. And key allies, including France and Germany, rushed to their ally’s defense – figuratively for now.
Rather than strengthening US security, Trump is arguably effectively weakening it by, yet again, undermining the western alliance. The irony of doing so in the north Atlantic does not only seem to be lost on Trump, This kind of territorial expansionism, which is representative of Trump’s isolationist tendencies, also seems to be a more fundamental issue at play here.
” Incorporating” Greenland into the US would likely shield Washington from the collapse of crucial mineral supply chains and keep Russia and China at bay. Beyond the kind of bluster and bombast that are typically associated with Trump, and signaling that he will do it whatever the cost, is an indication that his approach to foreign policy will quickly wear off with any gloves.
Trump and his team may believe that the US can get away with this by strengthening security cooperation with Denmark and the rest of its NATO and European allies in the Arctic and beyond. Given that what is at stake here are relations with the United States ‘ hitherto closest allies, this is an enormous, and unwarranted, gamble.
No great power in history has ever been able to go it alone forever, and even taking control of Greenland by hook or by crook is unlikely to reverse this.
Stefan Wolff is a University of Birmingham professor of international security.
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