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Welcome to\u00a0Foreign Policy<\/em>\u2019s China Brief.<\/p>\n The highlights this week: The United States pauses an arms deal<\/strong> with Taiwan<\/strong>, Russian President Vladimir Putin<\/strong> visits Beijing, and a journalist is charged with acting as an unregistered Chinese agent<\/strong>.<\/p>\n<\/p><\/div>\n Welcome to\u00a0Foreign Policy<\/em>\u2019s China Brief.<\/p>\n The highlights this week: The United States pauses an arms deal<\/strong> with Taiwan<\/strong>, Russian President Vladimir Putin<\/strong> visits Beijing, and a journalist is charged with acting as an unregistered Chinese agent<\/strong>.<\/p>\n \t The United States is pausing<\/a> a $14 billion arms deal with Taiwan, acting U.S. Navy Secretary Hung Cao said in a Senate hearing last week. The package is the latest casualty of U.S. President Donald Trump\u2019s attempts to find a new equilibrium with China.<\/p>\n During his summit with Chinese President Xi Jinping earlier this month, Trump called<\/a> the package a \u201cnegotiating chip,\u201d brushing aside the long-standing practice of not discussing such sales with Beijing. China, meanwhile, is reportedly holding up<\/a> a proposed visit by U.S. Undersecretary of Defense Elbridge Colby over the deal.<\/p>\n Delays in U.S. arms sales to Taiwan are common: The current backlog<\/a> is nearly $30 billion, and China protests every package. But the weapons are only part of what matters. Steady bipartisan support reassures Taiwan and signals resolve to China. Trump\u2019s casual treatment of the deal suggests that Taiwan\u2019s future could be easily traded away to serve interests he deems more important.<\/p>\n At the same time, Trump has floated the idea of direct talks<\/a> with Taiwan\u2019s president, a gesture that previous administrations avoided. It is possible that the president was bloviating and did not understand the implications of such an offer, as when he echoed Xi\u2019s<\/a> language on Taiwan.<\/p>\n Other Trump administration officials have been similarly inconsistent, swinging between\u00a0softening<\/a> the U.S. National Security Strategy\u2019s language on China and removing<\/a> a fact sheet\u2019s reference to U.S. opposition to Taiwanese independence. In the course of a year, Trump himself has gone from attempting a trade war to sucking up to Xi.<\/p>\n As I\u2019ve written before<\/a>, structural pressures make it difficult for Trump to fully abandon the possibility of defending Taiwan. But every episode like this weakens Taiwan\u2019s confidence in the United States and increases its temptation to accommodate China.<\/p>\n It also strengthens the belief among hard-liners in Beijing that the United States is a paper tiger that will back away from a real conflict. That is a dangerous assumption, because the United States is not a paper tiger; it is a volatile superpower whose reaction to Chinese aggression could spiral into a major war.<\/p>\n Under a normal U.S. administration, there would be serious debate around arms sales to Taiwan. For instance, is the balance of weaponry<\/a> right, or should Taiwan focus more on asymmetric capabilities such as mass drone warfare? Moreover, do the sales discourage Taiwan from much-needed military reforms<\/a>?<\/p>\n But as long as U.S. policy is driven by Trump\u2019s impulses, those questions are beside the point. Trump\u2019s apparent willingness to sell out Taiwan has spurred a new round of rationalization<\/a> from China hawks in the administration. Cao, who has positioned<\/a> himself as a staunch anti-communist, blamed the delay on needing to restock munitions<\/a> depleted in Iran.<\/p>\n In private, some hawks insist that the capture of former Venezuelan President Nicol\u00e1s Maduro, the Iran war, and even a hypothetical invasion of Cuba<\/a> are part of a grand strategy aimed at eroding Chinese power. But there is no grand plan here, and as U.S. failure<\/a> in Iran becomes harder to deny, that argument will likely give way to a search for a scapegoat.<\/p>\n For its part, China could interpret such an outcome as a sign that the United States would back down in a Taiwan crisis\u2014or as a reminder that overwhelming military advantages do not necessarily guarantee victory against smaller states.<\/p>\n Putin\u2019s visit. <\/strong>Russian President Vladimir Putin\u2019s travels to Beijing last week generated<\/a> more noise than substance. The China-Russia alliance of convenience is well established, but Beijing has shown little interest in doing Moscow meaningful favors, particularly on the economic front. Instead, China has taken advantage<\/a> of Russia\u2019s dependence during the war in Ukraine to secure deals on its terms.<\/p>\n Notably, Putin\u2019s visit did not produce an agreement<\/a> on the long-delayed Power of Siberia 2 pipeline, a project first proposed in 2006 that would send natural gas from Russia\u2019s Altai region to northeastern China. Though Beijing would benefit from the additional supply to heat the frigid region, its green energy successes mean it can wait until Moscow accepts its preferred terms.<\/p>\n Chinese espionage case.<\/strong> An American journalist and son of a prominent Texan Republican, Thomas Pauken II, has been charged<\/a> with acting as an unregistered foreign agent for China. Two aspects of the case are particularly revealing.<\/p>\n First, as in many instances<\/a> of Chinese espionage, the information allegedly passed to Beijing appears to be trivial\u2014nothing that couldn\u2019t have been learned by reading the newspaper. Because China\u2019s espionage system is so sprawling and messy, it expends a lot of time and money collecting<\/a> low-value information.<\/p>\n Second, Pauken told the FBI that the Chinese were \u201cobsessed\u201d with attaining information on his father. That points to an undercovered aspect of Chinese spying: It often targets the family members<\/a> of U.S. politicians, hoping for leverage.<\/p>\n Government spending down.<\/strong> China\u2019s public spending fell sharply<\/a> in April, declining by 7.3 percent compared to the previous year. That is not a great sign for the economy, especially since consumers aren\u2019t spending either<\/a>. China has felt the effects of the Iran war, though less than its more vulnerable neighbors.<\/p>\n However, another factor may be at work: Xi\u2019s intensified anti-corruption campaign and political purges. Bribery is the oil that greases the wheels of Chinese local government\u2014what political scientist Andrew Wedeman has dubbed<\/a> \u201cdevelopmental corruption.\u201d<\/p>\n Combined with officials\u2019 fear of backing the wrong project and attracting political scrutiny, it makes sense that messaging from the top might freeze or reduce spending throughout the system.<\/p>\n AI price war?<\/strong> Chinese artificial intelligence firm DeepSeek has cut prices<\/a> for its flagship model by 75 percent\u2014bringing them to roughly one-tenth of the cost of U.S.-based OpenAI and well below its nearest Chinese competitors. Rival firm Xiaomi responded with a price cut of up to 99 percent<\/a>. China now appears headed for the kind of brutal AI price war it has seen in other boom industries, such as electric vehicles.<\/p>\n Many firms will likely go under, and the ones that survive will become de facto national champions. DeepSeek, incubated in a private firm, is already receiving<\/a> significant state backing. But DeepSeek\u2019s price drop, however unsustainable, may also be an opportunity for China. As the costs and limits of AI become clearer, U.S. companies are having to raise prices<\/a> even higher.<\/p>\n<\/p><\/div>\n
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