Trump confirms talks with Xi since his inauguration
China girds for 'indirect impact' from Trump's steel tariffs；JD Vance says U.S. will defend American AI and block efforts to weaponize the tech
Welcome to this issue of The China Brief. Today is Feb 11, 2025. Here at The China Brief, we bring you the latest news on China's politics, economy, and society from global media sources, along with exclusive expert analysis. If you find our content helpful, please subscribe to our newsletter.
US-China relations: Trump confirms talks with Xi since his inauguration
South China Morning Post
US President Donald Trump confirmed he has spoken with Chinese President Xi Jinping since his inauguration, emphasizing their strong personal relationship amid ongoing trade tensions. In a Super Bowl interview, Trump noted discussions with Xi and his team but did not specify details or timing. As the trade war escalates, with tariffs imposed by both nations, Trump remains firm on addressing fentanyl imports, linking trade issues to drug trafficking. China has indicated a willingness to revisit the phase-one trade deal, potentially easing tensions and fostering negotiations on tariffs and investments.
https://www.scmp.com/news/china/diplomacy/article/3298151/us-china-relations-trump-confirms-talks-xi-his-inauguration?utm_source=rss_feed
China girds for 'indirect impact' from Trump's steel tariffs
Nikkei Asia
U.S. President Donald Trump's recent tariffs on steel and aluminum are intended to target global markets, not just China. Although Chinese exports of these metals to the U.S. are minimal, analysts warn that these tariffs could worsen existing challenges in China's economy, particularly regarding overcapacity in the steel and aluminum sectors. With domestic demand declining due to a weak housing market, Chinese producers are increasingly reliant on exports, which have surged despite falling prices, leading to concerns about deflation. Trade tensions may escalate as countries like Vietnam and India implement protective measures against Chinese imports. Major Chinese steel companies are already facing significant losses and are attempting to expand exports to mitigate their financial struggles. The overall financial outlook for China's steel industry has deteriorated, with profits down 50% in 2024 compared to the previous year. Both China and Hong Kong have expressed intentions to contest the U.S. tariffs through the World Trade Organization, arguing that these measures violate international trade rules.
https://asia.nikkei.com/Economy/Trade-war/China-girds-for-indirect-impact-from-Trump-s-steel-tariffs
JD Vance says U.S. will defend American AI and block efforts to weaponize the tech
CNBC
Vice President JD Vance on Tuesday said that the U.S. will safeguard American artificial intelligence and chips and block efforts to "weaponize" the critical technologies.
"Some authoritarian regimes have stolen and used AI to strengthen their military intelligence and surveillance capabilities, capture foreign data and create propaganda to undermine other nations' national security," Vance said in an address at France's AI Action Summit in Paris.
"I want to be clear, this administration will block such efforts, full stop," Vance added. "We will safeguard American AI and chip technologies from theft and misuse, work with our allies and partners to strengthen and extend these protections and close pathways to adversaries attaining AI capabilities that threaten all of our people."
Much of the focus from the the AI Action Summit this week has been centered on China's AI model DeepSeek, which claimed to achieve performance on par with OpenAI's o1 reasoning model at a far lower cost. Vance didn't mention DeepSeek by name — however, Trump's second in command took aim at cheap, heavily subsidized technologies.
"We're all familiar with cheap tech in the marketplace that's been heavily subsidized and exported by authoritarian regimes," he said.
In a suggestive swipe toward U.S. allies present in the room, Vance added that it "never pays off" to work with firms operating under such authoritarian regimes.
Collaborating with such parties means "chaining your nation to an authoritarian master that seeks to infiltrate, dig in and seize your information infrastructure," the U.S. VP added.
This is a breaking news story. Please refresh for updates.
https://www.cnbc.com/2025/02/11/jd-vance-us-will-defend-american-ai-block-weaponization-of-tech.html
China tightens screws on what can be shared online about its military
CNN
China has announced new regulations to restrict online information about its military, effective March 1, aiming to safeguard state secrets amid rising geopolitical tensions. The rules prohibit the dissemination of military secrets, troop movements, and weapon developments, significantly impacting military bloggers and commentators who previously shared insights on the People’s Liberation Army (PLA). Issued by multiple government departments, the regulations seek to prevent the spread of false information and maintain control over military narratives. Analysts note that while some restrictions are not new, the regulations could deter individuals from sharing military-related content online.
https://edition.cnn.com/2025/02/11/china/china-regulations-online-military-content-intl-hnk/index.html
How Elon Musk’s crusade against government could benefit Tesla
Associated Press
Elon Musk, the CEO of Tesla, has long criticized the U.S. government's regulatory scrutiny, claiming it hampers his electric vehicle company’s ambitions in developing self-driving cars and robotaxis. However, with Musk's close ties to President Trump, which have intensified after Trump's election, there is potential for significant easing of federal oversight. Key investigations that could be affected include those related to the safety of Tesla's Autopilot system, a Justice Department probe into whether Tesla has misrepresented its self-driving capabilities, and mandates requiring the reporting of crash data. Safety advocates warn that reducing these federal investigations could jeopardize public safety.
The Trump administration's actions, including the dismissal of career officials and the freezing of specific federal programs, have raised concerns about the erosion of government oversight. Experts suggest that investigations into Tesla, which can be halted by new agency leaders, may face quick dismissal under the Trump administration. This shift in power could significantly alter the regulatory landscape for Musk's businesses, including Tesla, SpaceX, and X, allowing them to operate with fewer constraints. The potential for Musk to influence federal regulations is evident as he has been designated to lead efforts to streamline government processes, a position that aligns with his interests.
While Musk could see immediate benefits from regulatory rollbacks, there are long-term implications for safety and accountability. Critics, including families affected by Tesla crashes, fear that reducing federal oversight will lead to increased accidents and a lack of accountability for Tesla. Investigations by the National Highway Traffic Safety Administration (NHTSA) have previously prompted Tesla to recall vehicles and address defects, which could be diminished if oversight is weakened. As Musk seeks to push for federal approval processes for autonomous vehicles, the balance between innovation and safety remains a critical concern for regulators, consumers, and advocates alike.
https://apnews.com/article/musk-trump-tesla-investigations-doge-crashes-f0c49a8fdf900d72eac541e4f699c5ac
DeepSeek hasn’t just disrupted OpenAI. Chinese tech giants are being upended too
CNN
DeepSeek, a Chinese AI startup, has disrupted global markets with its advanced open-source AI model, prompting major Chinese tech companies to integrate its technology into their services. Huawei plans to run DeepSeek on its domestically produced Ascend processors, showcasing China's ability to compete without Nvidia chips amid US export restrictions. DeepSeek's AI Assistant app rapidly gained popularity, surpassing ChatGPT, attracting over 22 million daily users within weeks. Despite its success, analysts warn of ongoing challenges in China's AI chip development due to US sanctions, while concerns over data security have led several countries to restrict DeepSeek's usage.
https://edition.cnn.com/2025/02/10/tech/china-deepseek-ai-disruption-hnk-intl/index.html
Trump once again slaps taxes on foreign steel, aluminum, a move that proved costly in his first term
Associated Press
President Trump has reinstated a 25% tariff on foreign steel and aluminum, mirroring actions from his first term. While U.S. producers benefit from higher prices, downstream businesses face increased costs, squeezing profit margins. The tariffs may boost inflation and strain relations with allies like Canada and Mexico. Previous tariffs resulted in limited overall economic impact but caused significant job losses elsewhere in manufacturing. The U.S. International Trade Commission noted production drops in downstream companies, and experts anticipate similar outcomes this time. Companies like Mitchell Metal Products are preparing to negotiate cost-sharing with customers amidst rising prices.
https://apnews.com/article/trump-tariffs-steel-aluminum-jobs-mexico-canada-89815eeb12ff28b83f5b855ca44f1820
Chinese developer backs its own winding up in sign of relentless pressure
Nikkei Asia
Skyfame Realty, a Guangzhou-based real estate developer, has agreed to wind up its operations after struggling to restructure over $500 million in offshore debt amid the ongoing downturn in China's real estate market. Unlike many developers who oppose such petitions, Skyfame stated it could not secure funding for restructuring and acknowledged its business had deteriorated significantly. This case reflects a broader trend in the industry, where some companies prioritize onshore creditors while others abandon offshore restructuring efforts. The outlook for the Chinese property market remains uncertain, heavily dependent on economic recovery and consumer confidence.
https://asia.nikkei.com/Business/Markets/China-debt-crunch/Chinese-developer-backs-its-own-winding-up-in-sign-of-relentless-pressure
Who Needs Hollywood? Chinese Animated Film Shatters Box Office Records.
NY Times
"Ne Zha 2," an animated film inspired by Chinese mythology, has quickly become the highest-grossing movie in China's history, surpassing $1 billion in ticket sales within two weeks of its release. This marks a significant achievement as it is the first film not produced by a Hollywood studio to reach this milestone. The film, which serves as a sequel to the previously successful "Ne Zha," features a demonic child who challenges the established order of gods and demons. It has resonated with a wide audience, offering a blend of traditional culture and patriotic themes that appeal to various demographics. Since its release on January 29, the film has grossed $1.2 billion and is set to be released in North America soon.
https://www.nytimes.com/2025/02/10/business/china-box-office-ne-zha-2.html
U.S. man acquitted of spying on Chinese political dissidents
Nikkei Asia
Litang Liang, a 65-year-old American citizen, was acquitted by a U.S. jury of charges related to acting as an undeclared agent of China. He was accused of spying on Hong Kong democracy activists and providing information to Chinese officials from 2018 to 2022. After a five-day trial, the jury found Liang not guilty of conspiracy and failing to register as a foreign agent. The case highlighted concerns about China’s efforts to suppress dissent abroad, with activists expressing disappointment over the jury's decision, which they believe undermines accountability for transnational repression.
https://asia.nikkei.com/Politics/International-relations/US-China-tensions/U.S.-man-acquitted-of-spying-on-Chinese-political-dissidents
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