Beyond the G2, Unruly Middle Powers | Sinification: October 2026
This monthly report is prepared for Sinocism by the excellent Sinification, an invaluable resource for understanding how domestic and international affairs are debated within the Chinese establishment. — Bill
With US–China relations entering what Da Wei calls an “L-shaped stabilisation”, Chinese commentators in October turned their strategic anxiety towards the disruptive potential of US allies and middle powers.
Da Wei is not exactly sanguine — as the L metaphor suggests, he doesn’t see relations as improving, but merely stabilising, and he predicts more “trouble and noise” to come, especially after the midterms. Jin Canrong picks up the G2 framing and contrasts it with the broader international picture, arguing that while Trump has reached the bargaining stage of grief over China’s rise, Europe and Japan remain in denial and anger.
In a long piece with Sun Yixin on “Trumpian neorealism”, Zheng Yongnian admits that Beijing’s preferred multipolarity is “only an ideal state” and that power beyond the US and China is undergoing “feudalisation”, dispersing into a hierarchical, fragmented structure, while Washington uses allies in “offshore balancing” against China.
In contrast to Zheng and Sun’s assertion on “offshore balancing”, a cluster of articles in October explores the potential of US allies — particularly Japan — to ensnare Washington in conflict. Qi Haixia uses the wars in Iran and Ukraine as examples, suggesting the same mechanism applies to Takaichi Sanae’s Japan. Yao Yunhe echoes this concern, observing that US and Japanese policies on Taiwan are diverging, with the emerging risk of Japan drawing Washington into a confrontation with China over Taiwan, a dynamic he calls “reverse entrapment”.
Jia Min also warns against great powers being “held hostage by small countries” and worries that US withdrawal from the Western Pacific might allow Japan’s “new militarist forces” to exploit the resulting gap. Also on Japan, Wu Xinbo (武心波, not to be confused with Fudan’s 吴心伯) proposes a more conciliatory approach, albeit one paired with hard limits. China, he argues, should combine the “hegemonic way” [霸道] of setting red lines on Japanese involvement in the Taiwan Strait with the “kingly way” [王道] of winning hearts, offering Japan a dignified role as a “co-builder of the East Asian order”.
On the flip side, there are also signs of China’s relationship with Russia being seen as a potential hijacker of G2 stability. In an unusual take from a CASS scholar, Pang Dapeng paints Russia as a “structural constraint” on building “constructive strategic stability” between the US and China, warning that China should avoid the risks of being bound too tightly to Russia. He also notes the extractive nature of the Russian state, its fixation on its “living space” and the difficulty of US–China–Russia stability while the war in Ukraine continues.
Zhu Zhengyu and Fan Jingyue also consider how Lula’s Brazil might turn US–China competition to its advantage. One can only imagine that the surprise October re-election of China-friendly, left-wing President Luiz Inácio Lula da Silva was welcomed in Beijing, yet Zhu and Fan strike a more sober tone, arguing that Lula’s victory “cannot simply be regarded as good news for China”.
The other historic election result dominating headlines — pro-China Aleksandar Vučić’s defeat in Serbia — was less likely to have been welcomed in Beijing. Liu Xiaodan notes that the result brings uncertainty to China–Serbia relations, with the previous model of intergovernmental diplomatic endorsement for Chinese projects being difficult to sustain under the new leadership.
Elsewhere, commentators on Europe grapple with the problems posed by EU–China trade tensions (see our paper with the Friedrich Ebert Foundation and our live discussion with Yanmei Xie and Finbarr Bermingham). He Yao reads the outcomes of the first EU–China Trade and Investment Consultations as a buffer arrangement with limited binding force — and an asymmetric one, with China bearing substantive costs and the EU mainly procedural ones.
Huang Ping links the talks to the much wider failure of the old economic order, arguing that China must build interest linkages with local capital, firms, talent and markets, rather than just export. He makes the heterodox claim that China must abandon the “linear thinking” that good products, low prices and “correct arguments” oblige others to accept them.
Taken together, October’s commentary peers beyond Chinese strategists’ habitual focus on US–China relations. More than usual, articles examine the agency of other actors manoeuvring in a fragmented — or, in Zheng’s words, “feudalising”— international landscape. Much of this work, however, still ultimately asks what it means for Washington and Beijing.
Even in a world of “Trumpian neorealism” and a more transactional, amenable US, the sense is of an international environment replete with risks. As Zheng Ge asks in a piece on Iran — worth reading for its subtle questioning of China’s official posture of calling for restraint — if the great powers really do push the world back into the jungle, “who has the capacity, and in whose name, to re-establish the rules?”
— Jacob Mardell
In Brief
Zheng Yongnian and Sun Yixin on the “de facto G2” as the basis of a “Trumpian neorealism”, and China needing to shape a “bounded G2”
Jin Canrong on Trump reaching the bargaining stage of grief over China’s rise, while Europe and Japan remain in denial and anger
Da Wei on China–US relations moving towards an “L-shaped stabilisation”
Hao Min on US “proxy lawfare” against Chinese-invested ports in Panama as a template for the exclusion of Chinese influence from critical infrastructure
Zhou Xiaoming on the centrality of the WTO having peaked, and the EU’s “soft dismantling” of the multilateral trade system
Qi Haixia on the US, in a period of Sino–US power transition, being entrapped by its allies
Yao Yunhe on US and Japanese Taiwan policy diverging, and the risk of Japanese “reverse entrapment”
Wu Xinbo (武心波) on combining the “kingly way” and the “hegemonic way” in China’s Japan policy
Zhan Debin on the US using South Korea’s pursuit of self-reliant defence to integrate it more deeply into America’s regional strategic system
Wu Xinbo (吴心伯) on Taiwan reducing its own value by investing in US chip production
Jia Min on a US withdrawal from the Western Pacific potentially leading Japan to acquire nuclear weapons
Zheng Ge on Iran’s resistance-based model of survival suffocating a generation of young people, and China’s call for restraint sidestepping the question of who will re-establish the rules
Bao Yinan on freedom of passage through key international straits as a realistic entry point for China–US maritime cooperation
Pang Dapeng on Russia as a “structural constraint” on US–China constructive strategic stability
Kang Jie on Russian-style exceptionalism and the US’s “America First” as two sides of the same coin, and exceptionalism as the narrative of the thwarted
Huang Ping on the China–EU trade talks beginning to answer how to manage a new balance of industrial power when existing rules are insufficient
Liu Hongsong and Su Ruolin on Chinese scholars seeing four shifts in the EU’s international role
Qin Hui on capital moving to China for the cost advantage of weak labour rights, and China’s WTO accession setting no “human-rights thresholds”
He Yao on the EU–China consensus list as a low-binding buffer arrangement that is asymmetric overall
Liu Xiaodan on China–Serbia relations shifting towards a pragmatic, low-key mode after Vučić’s defeat
Zhu Zhengyu and Fan Jingyue on why Lula’s re-election “cannot simply be regarded as good news for China”
Zhou Jinyan on Chinese mining companies in the DRC “borrowing strength” from other actors to compensate for weak community-relations capacity
Cheng Yawen on going overseas remaining a compulsory course for Chinese businesses, but domestic hollowing-out and host-country backlash needing to be managed
Li Xunlei on Chinese macro policy pursuing goals without counting their costs elsewhere in the economy
Lu Feng and Yang Jingxiang on imbalances as the irreconcilable issue at Asheville, and China exploring a “three increases” framework
AI:
Sun Chenghao on the familiar China–US binary on AI risk becoming increasingly inaccurate
Liang Jianzhang on China’s fertility rate falling below 0.8 within a few years without more fertility support
Zhao Dingxin on Chinese education training obedience, and AI removing the bottom rungs through which juniors grow into high-end talent
1. US–China
Zheng Yongnian (郑永年) and Sun Yixin (孙奕欣): The “de facto G2” is the basis of a “Trumpian neorealism” that acknowledges relative US decline and holds that China has risen to equal US power. Multipolarity is “only an ideal state”: power beyond the US and China is undergoing “feudalisation” [封建化], dispersing into a hierarchical, fragmented structure. The US is offshore balancing in Eurasia, shifting burdens to allies. China should shape a “bounded G2” [边界型G2]: self-restraint in competition, joint management of systemic risks and legitimation through multilateral bodies. Embedding this in its four global initiatives, Beijing should tell the Global South that China and the US do not monopolise the order. — Dean, School of Public Policy, Chinese University of Hong Kong, Shenzhen; Assistant Research Fellow, Institute of International Relations, Shanghai Academy of Social Sciences (IPP评论, 29 October)
Jin Canrong (金灿荣): Trump has reached the bargaining stage of grief over China’s rise; Europe and Japan remain in denial and anger. As the “head” of the West, the US would pull the rest of the West towards “rationality” by moving into bargaining. China rejects Trump’s G2 framing, but it reflects international perception, and perception is reality. The 21st-century international configuration has taken shape, moving from the post-Cold War “one superpower, many great powers” to “two superpowers, many great powers”. China should bargain rationally with the US; a reasonable arrangement of interests offers a good chance of constructive strategic stability. — Wu Yuzhang Chair Professor, School of International Studies, and Director, Center for China’s Foreign Strategy Studies, Renmin University of China (金金乐道编辑部, 8 October)
Da Wei (达巍): China–US relations may move towards an “L-shaped stabilisation” — the relationship is not improving, but there is a chance to avoid worst-case scenarios such as military conflict, complete decoupling or a new Cold War. It will become more mature — still competitive, but with normal communication and more normal exchanges. The Xi–Trump Washington summit was one more step towards strategic stability, not a game-changing shift. More important than specific outcomes was the warm, high-level reception. The relationship will remain highly competitive, with more trouble and noise to come, especially after the US midterm elections. — Director, Center for International Security and Strategy, Tsinghua University (中美聚焦, 12 October)
Hao Min (郝敏): The US use of “proxy lawfare” against Chinese-invested critical ports in Panama provides it with a replicable template for excluding Chinese influence from other critical infrastructure sectors. Lacking direct jurisdiction, the US pressures host states to strip Chinese firms of their rights through their own constitutional, administrative and regulatory procedures. China should raise the costs to host countries of cooperating with US lawfare, including prudent use of necessary legal, economic and trade measures. Proxy lawfare will spread to energy, telecommunications and data, through more routine and harder-to-attribute procedures such as competition and investment-security review. — Professor, Department of International Law, and Director, Center for Science and Technology Diplomacy and Security, China Foreign Affairs University (当代美国评论, 15 October)
2. Global Order
Zhou Xiaoming (周小明): The centrality of the WTO has peaked. It will not disappear but will not regain its former position. A global trade landscape that is more fragmented, more geopolitically charged and less uniform in its regulation is emerging. Because of unilateral US measures, the WTO has degenerated from a code that binds great powers into a text that binds only small countries. Meanwhile, the EU is carrying out a “soft dismantling” of multilateral norms, for example through the “unilateral” Carbon Border Adjustment Mechanism. China has every reason to defend the multilateral system, but it is handicapped by most-favoured-nation obligations and geopolitics. — Senior Fellow, Center for China and Globalization (CCG); former Deputy Permanent Representative, Permanent Mission of China to the United Nations Office at Geneva (中美聚焦, 20 October)
Qi Haixia (漆海霞): The root cause of the Russia–Ukraine conflict and the Middle East war is that, in a period of Sino–US power transition, the US finds it difficult to constrain its allies effectively and is entrapped by them. Under Biden, as the US rallied allies to contain China, major European countries believed the US placed greater weight on them and went ever further down the politically correct road of liberal radicalisation; NATO kept expanding eastwards, triggering war. Under Trump, Netanyahu drew the US into attacking Iran. Takaichi Sanae’s hardline statements on China can also be interpreted through this mechanism. — Professor, Department of International Relations, Tsinghua University (时政国关分析, 23 October)
3. East Asia
Yao Yunhe (姚云鹤): US and Japanese Taiwan policy, long treated as a coordinated whole, is diverging. Under Trump’s transactional logic, Washington is managing “Taiwan independence” risks and slowing its use of the “Taiwan card”. Japan, shifting rightward, is aggressively pushing Taiwan issues to legitimise its military expansion and using the alliance to amplify its influence. The divergence sends split signals to Taiwan, leaving independence forces with illusions about external intervention, and offsets momentum for cross-Strait easing. Yao warns of “reverse entrapment”: Japan could manufacture and escalate issues to hijack US Taiwan policy. — Executive Deputy Director, Shanghai Institute for Taiwan Studies (上海国际战略问题研究会, 20 October)
Wu Xinbo (武心波): China should combine the “kingly way” [王道] and the “hegemonic way” [霸道] in its Japan policy—the hegemonic layer establishing red lines on Japanese involvement in the Taiwan Strait, the kingly layer moving the bilateral relationship towards shared meaning. The hegemonic way sets boundaries—“what you cannot do”—while the kingly way wins hearts and settles “what we do together”. Japan should be offered a dignified role as a “co-builder of the East Asian order” [东亚秩序共同建设者]. — Professor, Shanghai International Studies University (上海国际战略问题研究会, 8 October)
Zhan Debin (詹德斌): South Korea hopes to use alliance modernisation to achieve self-reliant defence [自主国防], while the United States wants to use South Korea’s pursuit of self-reliant defence to integrate it more deeply into America’s regional strategic system. With the US government requiring allies to assume more defence responsibilities, South Korea believes a favourable moment has arrived, but America’s support does not mean it is willing to loosen its strategic control over South Korea. Self-reliant defence and strategic autonomy are two different concepts: South Korea may obtain more advanced weapons but will not necessarily have greater room for strategic choice. — Professor and Director, Korean Peninsula Research Centre, Shanghai University of International Business and Economics; Visiting Researcher, Institute for Peace and Unification Studies, Seoul National University (环球时报, 21 October)
Wu Xinbo (吴心伯): Taiwan thought that by investing in US chip production it could win more US protection, but it has reduced its own value—with chips secured, Trump will think “who cares” what happens to Taiwan. Trump’s strategic ambiguity is not so ambiguous—he knows perfectly well that US intervention would have no chance of winning and the cost would be too high. China should step up blows against US economic and security interests on Taiwan, cancelling US procurement contracts worth two or five times the value of each arms sale. After the midterms, Republican, rather than Democratic, pressure to resume arms sales may be decisive. — Dean, Institute of International Studies, and Director, Center for American Studies, Fudan University (凤凰大参考, 10 October)
Jia Min (贾敏): A US withdrawal from the Western Pacific, as proposed by Jennifer Kavanagh, could trigger consequences China has not yet perceived. Downgrading the US–Japan alliance could lead Japan to acquire nuclear weapons, an uncrossable red line overturning Asia’s post-war order. If Japan’s “new militarist forces” exploited the resulting gap, the consequences would be hard to predict — much as Britain’s withdrawals from India and the Middle East sowed lasting conflict. Great powers must avoid being held hostage by small countries. — Special Research Fellow, Shanghai Development Research Foundation (观察者网, 2 October)
4. Middle East
Zheng Ge (郑戈): Iran’s resistance-based model of survival can unite people in the short term, but in the long term yields constrained development; beneath it lies a state machine that is suffocating a generation of young people. China’s path is built on precisely the opposite assumption, that development is the ultimate source of security. China’s official posture of calling for restraint is very cost-effective, but sidesteps a question that will become increasingly acute: if the great powers really do push the world back into the jungle, who has the capacity, and in whose name, to re-establish the rules? — Professor, KoGuan School of Law, Shanghai Jiao Tong University (郑戈, 3 October)
Bao Yinan (包毅楠): Having agreed on a relationship of constructive strategic stability, China and the US can treat freedom of passage through key international straits as a realistic entry point to “seek common ground while reserving differences” [求同存异] in maritime affairs. The reality of Hormuz has changed: the core question is no longer who controls a strait, but whether stable, predictable, non-discriminatory use is preserved. The recognised right of passage is not revoked but eroded by conditions set by forces with de facto control. Neither the US nor China competes for control of straits, while Gulf Arab states want powers like China to provide more public security goods. — Associate Research Fellow, Huayang Center for Maritime Cooperation and Ocean Governance (World Affairs, 5 October)
5. Russia
Pang Dapeng (庞大鹏): China–US “constructive strategic stability” cannot be built bilaterally; it depends on Russia as a key variable and “structural constraint” [结构性约束]. Russia’s extractive state, its absolutised fixation on the nation’s “living space” [生存空间] and the defence-industrial complex’s domination of the economy rule out compromise and prolong the Ukraine conflict. China–US–Russia–Europe relations are linked: Trump’s “peace plan” deepens the transatlantic rift, while European security anxiety spills into China–EU relations. As long as the Ukraine crisis continues, any stable triangular equilibrium will be difficult to establish. Towards Russia, China should deepen strategic coordination while avoiding the risks of being bound. — Deputy Director, Institute of Russian, East European and Central Asian Studies, Chinese Academy of Social Sciences (当代中国与世界, 2026, Issue 3)
Kang Jie (康杰): Russian-style exceptionalism and the US’s “America First” and “Christian nationalism” are two sides of the same coin. Within the Christian civilisations, exceptionalism is the narrative of the thwarted, not of the strong: imperial Russia, the USSR and the post-Cold War US were universalist when strong. A sphere-of-influence-based civilisational multipolar system would suit Russia’s need to consolidate its core base against the background of its declining strength, as it is mired in an “Iran–Iraq War-style” quagmire in Ukraine. But it risks a return to the law of the jungle, a new feudalism and fragmentation, and offers no answer to global challenges in the AI era. — Associate Research Fellow, Department for American Studies, China Institute of International Studies (文化纵横, 22 October)
6. Europe
Huang Ping (黄平): The old economic and trade order is failing—the significance of the recent China–EU trade talks is not who gained more, but that both sides have begun answering how to manage a new balance of industrial power when existing rules are insufficient. Technology and production capacity are the core bargaining chips of the new order. To convert its manufacturing strength into influence, China must build interest linkages with local capital, firms, talent and markets, rather than just export. Europe must drop its habit of defining fairness unilaterally, while China must abandon the “linear thinking” that good products, low prices and correct arguments oblige others to accept them. — Associate Professor and Assistant Dean at the School of Public Policy, CUHK-Shenzhen (Greater Bay Area Review, 14 October)
Liu Hongsong (刘宏松) and Su Ruolin (苏若林): Chinese scholars see four shifts in the EU’s international role: a geostrategic turn from full to selective globalisation; acceptance of multipolarity; increasingly instrumentalised normative power; and Global Gateway as a geoeconomic bid. EU–US coordination on China is no longer “US leads, EU follows” but more institutionalised and comprehensive. Strategic autonomy in security matters to the EU because it must demonstrate its usefulness to the US. Meanwhile, because the EU will struggle to increase its international influence through deeper European integration, China’s demand for cooperation with Europe will remain at its current level. — Liu: Professor, School of International and Public Affairs, Shanghai Jiao Tong University; Su: Associate Professor, School of International and Public Affairs, Shanghai Jiao Tong University (Journal of Common Market Studies, via 国政学人, 4 October)
Qin Hui (秦晖): Capital moved to China for the cost advantage of weak labour rights, not just low wages. Unlike EU accession talks with Eastern Europe, China’s WTO accession negotiations set no thresholds on trade unions, welfare, environmental protection or human rights. Without such “human-rights thresholds” [人权门槛], trade is fatal for democracies. Negotiators imagined only governments with great power and high welfare, or little power and low welfare—not one with enormous power and minimal or negative welfare. The far right, rather than the left, advocates learning from China, notably the AfD, which is friendly to China’s model but not to China. — Retired Professor of History, Tsinghua University (失語者, 23 October)
He Yao (何曜): The consensus list from the EU–China trade talks is a low-binding buffer-type arrangement that channels disputes onto a predictable track rather than resolving them. It is asymmetric overall, with China bearing substantive costs and the EU mainly procedural ones. For the EU, this is institutional hedging against a US–China grand bargain, while China risks exclusion from Western-led rule-making. The EU sees Chinese industrial policy as needing WTO constraint, China as a development right. Chinese investment in Hungary, Slovakia and Spain is softening their tariff stances. Tougher EU measures on EVs or under the Foreign Subsidies Regulation could jeopardise the rare-earth supplies through the green channel. — Assistant Research Fellow, Institute of World Economy, Shanghai Academy of Social Sciences (澎湃新闻, 15 October)
Liu Xiaodan (刘晓丹): Vučić’s electoral defeat brings uncertainty to China–Serbia relations, which may shift from being led by high-level politics towards a pragmatic, low-key mode. Parts of the Budapest–Belgrade railway relied on an intergovernmental agreement that bypassed ordinary public procurement rules, and the new government will most likely follow Hungary’s new government in launching contract reviews. The previous model of intergovernmental diplomatic endorsement will be difficult to continue; new projects will need to comply fully with national law and European standards. However, the “Student List” has not yet unified its internal positions, and the risk of vacillation in China policy is rising. — Associate Research Fellow, Institute of Central and Eastern European Economic and Trade Cooperation and School of Business, Ningbo University (凤凰大参考, 27 October)
7. Global South & Going Out
Zhu Zhengyu (朱政宇) and Fan Jingyue (樊景月): Lula’s re-election in Brazil “cannot simply be regarded as good news for China”. Both Brazil’s left and right are pragmatic and committed to diplomatic autonomy, and Lula will not give up using China–US competition to extract greater economic benefits. Brazil also remains wary of Chinese industrial competition and wants Chinese firms to expand local production. As Brazil expands critical-mineral development, Chinese firms bidding for rare-earth projects not yet in production will face state-backed US competitors. Brazil’s diplomatic autonomy will also be harder to maintain as a growing bloc of right-wing South American governments turns to the US. — Institute of National Strategy, Shanghai Jiao Tong University (上海交通大学国家战略研究院, 26 October)
Zhou Jinyan (周瑾艳): Chinese mining companies in the DRC are compensating for weak community-relations capacity by “borrowing strength” from other actors to build legitimacy with host communities. Western media amplify negative cases and ESG raters discount China-style development practices, but Chinese firms also lack experience and communicate poorly. Three paths emerge: internalised embedding, inheriting a Western predecessor’s practices; joint ventures with a Western partner; and collaboration with Chinese NGOs. With development aid declining, Chinese firms should transcend the “instrumental view of development” behind Western compliance and meet resource states’ demands for local industrial chains. Development-oriented embedding should become an intrinsic corporate value. — Associate Professor at the Shanghai Academy of Global Governance and Area Studies, Shanghai International Studies University (文化纵横, 17 October)
Cheng Yawen (程亚文): Facing systemic Western containment, going overseas remains a compulsory course for high-level opening and a physical underpinning of new globalisation, but domestic hollowing-out and host-country backlash must be managed. US offshoring produced the Rust Belt, and US multinationals’ conduct abroad prompted screening, nationalisation and EU antitrust. The Western-centred system China joined in the 1980s capped its rise, so dual circulation’s “international” component should now mean a Global South market tied to China. China must be wary of the Monroe Doctrine model, which drew the Americas into US circulation without developing them. Solving overcapacity may be a factor in going overseas, but finding new growth momentum matters more. — Research Fellow, School of International Relations and Public Affairs, Shanghai International Studies University (观察者网, 24 October)
8. Economy
Li Xunlei (李迅雷): Chinese macro policy errs because it pursues goals without counting their costs elsewhere in the economy. Delaying capital-account opening for fear of outflows is self-defeating because openness would make the renminbi more liquid and trusted, which would itself support its value. Policy commitments to boost consumption and “invest in people” date from 2015 but remain unimplemented because cadre evaluation still rewards GDP. Production-based GDP accounting counts unsold output, so some localities ramp up year-end production. Manufacturing capacity should be reduced, not stabilised, and services expanded, since they create twice the jobs per unit of investment. Beijing should also borrow to swap local debt. — Chief Economist, Zhongtai International (李迅雷金融与投资, 4 October)
Lu Feng (卢锋) and Yang Jingxiang (杨景翔): Imbalances, not the Middle East or debt, were the irreconcilable issue at the G20 meeting of finance ministers and central bank governors in Asheville. China should move beyond defence and explore a “three increases” [三增] framework of higher US saving, Chinese consumption and EU investment. Constrained by internal and external factors, the real exchange rate has not adjusted enough to offset rising competitiveness, so surpluses grow, and “strong supply, weak demand” has renewed dependence on external demand. A persistent surplus must be invested abroad—with developed markets constrained, investing in developing countries is an important practical question. However, repayments on sovereign loans to Belt and Road countries now exceed new lending. — Lu: Professor, National School of Development, Peking University; Yang: National School of Development, Peking University (网易财经智库, 26 October)
9. AI
Sun Chenghao (孙成昊): The familiar binary, in which China is concerned with content security, social stability and data governance, and the United States with model safety, is increasingly inaccurate. China’s recently released AI Safety Governance Framework 3.0 now covers loss of control and WMD-related risks, while the Trump administration increasingly focuses on testable capabilities and direct national-security risks. Each side treats the other’s policies as risks, but export controls should be acknowledged as structural differences and prevented from blocking cooperation on risk governance. — Associate Research Fellow, Center for International Security and Strategy (CISS), Tsinghua University (CISS, 12 October)
10. Society
Liang Jianzhang (梁建章): If China does not increase fertility support, its fertility rate is likely to fall below 0.8 within a few years, following South Korea’s trajectory, which China trails by about eight years. Maintaining 8 million births a year requires a fertility rate above 1.1. To bring about a substantial recovery, the cumulative subsidy per child must reach at least 200,000 yuan. At 10 million births, this totals 2 trillion yuan a year, less than 2025 export tax rebates of 2.13 trillion yuan. It can be said that handing out cash for babies (发钱生娃) is the best “new infrastructure” (新基建) for China at present. — Research Professor of Economics, Guanghua School of Management, Peking University; Co-founder and Executive Chairman, Trip.com Group (绕梁说, 14 October)
Zhao Dingxin (赵鼎新): Chinese education trains obedience rather than intrinsic motivation, and cannot cultivate the “questioning and judgement” capacities that are scarcest in the AI era. No discipline will be eliminated by AI—the real danger is the collapse of employment as AI removes the bottom rungs through which juniors grow into high-end talent. Building “talent redundancy” [人才冗余], hiring juniors even where AI does their work better, so future industry leaders can emerge, should be public policy. China should also adopt a six-year undergraduate degree, with four years of general education split between hard sciences and humanities/social sciences, and applied and engineering courses deferred to the fifth and sixth years. — Dean, Institute for Advanced Studies in Humanities, Zhejiang University; Max Palevsky Professor Emeritus of Sociology, University of Chicago (科学网, 2 October)
China’s AI Jobs Problem: What Economists Fear and Why the Fixes May Fall Short (27 October)
Chinese economists have not reached a consensus on the long-term job creation prospects of AI. However, there is near unanimity that in the near term, AI adoption is likely to severely impact employment, lower incomes and thereby worsen the existing pattern of demand weakness and supply overcapacity. The effects of AI are therefore commonly seen as an extension of China’s long-term macroeconomic trends, rather than a revolutionary break. As Cai Fang puts it: “AI’s impact on the labour market is, in essence, of the same kind as the structural mismatch China already faces. AI is intensifying that mismatch, and its effect is growing stronger.” Read here
Conversations: An Interview with Yao Yang (22 October)
This interview with Yao Yang, one of China’s most prominent economists, is the first in Conversations, a pilot series of in-depth interviews with Chinese scholars, policy analysts and public intellectuals exploring the ideas and debates shaping contemporary China. Yao has featured extensively in the pages of Sinification, in part because he combines considerable establishment standing with a rare willingness to speak candidly about the challenges China faces. Throughout, Yao combines confidence in China’s underlying economic capacity with frank pessimism about the current state of the economy and the risks of failing to change course. Read here
EU-China Debrief with Yanmei Xie and Finbarr Bermingham (19 October)
Many thanks to everyone who joined us for our conversation on the current state of EU-China trade tensions following the recent interim agreement on hybrid vehicles, and of course special thanks to Xie Yanmei and Finbarr Bermingham for sharing their time and their fascinating insights. Read here
BRICS, Bolsonaro and Brazil’s Balancing Act (11 October)
In the last 50 years, the Brazilian foreign policy establishment has held a consensus on non-alignment with major powers and the search for a multipolar world. Countries such as China, India and Russia have been important partners in these efforts, and the creation of the BRICS was a milestone in that cooperation. However, the Bolsonaro family has a different approach. During Jair Bolsonaro’s administration (2019-2022), he tried to establish a strong relationship with Trump and had something of a roller-coaster relationship with China, including several very low points during the coronavirus pandemic, before ending his mandate on a more moderate and pragmatic note. Read here
Global Imbalances, China’s Exchange Rate and the Household Gap | Economic Digest: September 2026 (12 October)
September’s coverage focuses on global imbalances and China’s external surplus—appropriately so, given that the EU Trade Commissioner was just in Beijing pressing China to resolve a trade surplus the EU sees as “unsustainable”. “Global Rebalancing” was also a theme of this year’s Tsinghua PBCSF Chief Economists Forum on 19 September, which supplies many of this edition’s entries. Read here
Chinese Perspectives on the EU–China Trade Conflict(6 October)
Trade tensions between the EU and China escalated in March, when the Commission proposed its Industrial Accelerator Act, and have been simmering since then, but October is decisive. We’ve been working on a paper in cooperation with the Friedrich-Ebert-Stiftung, analysing Chinese perspectives on EU-China trade tensions. The paper, which draws on a large corpus of Chinese-language texts published between October 2022 and September 2026 will be published shortly through FES’s online library, but given that Šefčovič is in Beijing on Thursday, we wanted to provide subscribers with a preview. Read here
Interdependence and Its Limits | Digest: September 2026(6 October)
Much of the commentary in September revolved around the strength and limitations of economic interdependence as a source of political power. Against the backdrop of “strategic stability”—or stalemate—in the US-China trade relationship, Wu Bingxuan and Huang Chaofeng advise Chinese firms to concentrate on trade diversification and developing sanctions-evasion tools against the prospect of expanding US trade controls and restrictions on Chinese firms. Read here
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