Although terms had been unofficially agreed upon last August, the public unveiling of the “Mogami Memorandum” still impressed with the enormity of its transactional provisions. Under contract with Mitsubishi Heavy Industries, Japan will build three Mogami-class stealth frigates by 2029, with eight more to be built in Australia by Austal. International bidding for the contract had been intense, with Mitsubishi ultimately winning out in the naval manufacturing sweepstakes.

“Our surface fleet is more important than at any time in decades,” Australian Defense Minister Richard Marles said in a statement following the signing. “These general-purpose frigates will help secure our maritime trade routes and northern approaches as part of a larger and more lethal surface combatant fleet.”

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When considered within the lens of Japan’s historic and institutional hostility towards arms exports, the deal becomes even more impressive. The near-total 1967 weapons export ban functioned for half a century as a pillar of Tokyo’s foreign policy, and despite the relaxation of certain restrictions in 2014, it still wielded enormous influence in Japanese governance. Originally, under heavy U.S pressure during the Cold War, the ban was designed to prevent any future arms agreement with the communist bloc, and later extended to include any nation under sanction by the United Nations. And while the updated terms in 2014, known as the “Three Principles on Transfer of Defense Equipment and Technology, still kept much of the historic restrictions intact, it signaled a new, far more profitable era for domestic defense manufacturers.

Since jumpstarting its fragile defense industry in 2014, companies like Mitsubishi have seen steady growth despite stiff competition from far more storied, global competitors. Shortly after the new guidelines were established, Japan began selling missile interceptor components to the United States, which was soon followed by increased attention from militaries in the market for defense upgrades. In 2015, India requested that Japanese defense companies enter the bid for the Project-India-75 program, originally intended to build six diesel-electric submarines. Later that year, rumors circulated that Australia was interested in purchasing Soryu-class submarines, although the deal never materialized. Four years later, Japan sold its first major weapons package to the Philippines, supplying air-surveillance radars to Rodrigo Duterte’s government.

Powered by companies like Mitsubishi, Kawasaki Heavy Industries, NEC, and Fujitsu, the statistical evidence for growth in Japan’s defense industry was clear even before the Mogami Memorandum. According to the Stockholm International Peace Research Institute (SIPRI), in 2024 alone, sales from these top weapon manufacturers rose by 40%, totalling $13.3 billion. given the symbolic nature of Australia’s decision to trust the Japanese defense industry with naval upgrades, that number is expected to continue to rise in the coming years.

There are already rumors that several regional powers are considering following Australia’s lead. Indonesia has also expressed interest in purchasing Mogami-class warships, including a discussion on the prospect of a joint development program. Perhaps the biggest potential suitor is the Philippines, which was already showing interest in acquiring some of Japan’s TC-90 aircraft. This, alongside recent talks regarding the purchase of the Chu-SAM Medium-Range Surface-to-Air Missile system, and discussions regarding a deal to obtain several Abukuma-class destroyers, signals that a series of lucrative deals between Manila and Tokyo may be the next big line item for Japan’s defense industry.

Additionally, the possibility for further investment and cooperation in Australia looms large, where Prime Minister Anthony Albanese recently announced that defense spending is set to rise to 3% of total GDP, constituting the largest increase in defense spending for the island nation since World War 2. It’s an opportunity that the fledgling Japanese defense industry is keenly aware of, and one that Japan’s new nationalist Prime Minister Sanae Takaichi has wasted no time in encouraging. Barely a day after the naval deal was signed, Takaichi’s cabinet approved a comprehensive authorization of lethal weapons sales, completely axing what was left of the 2014 ban.

Despite this seemingly new frontier for domestic weapons exports, the Japanese government continues to maintain, at least publicly, its historic self-defense first doctrine. “No country today can defend peace and safety by itself and needs partners to support each other,” Prime Minister Takaichi posted to X, shortly after the abolition of the lethal weapons ban, adding, “There is no change to our 80-year history as a pacifist nation and its pledge.”

Despite fervent protest from Tokyo, the Mogami Memorandum demonstrates that a new age of Japanese arms sales has arrived. Coupled with the rumors of impending naval packages for expanding markets in the Philippines, and the Takeuchi Government’s decision to drastically reduce weapon sales regulations, it’s clear that Japan intends to utilize its adolescent defense industry for diplomatic and strategic purposes. In the long term, this may mirror the U.S. arms industry, creating weapons dependencies in developing powers that can be leveraged for influence. However, in the short term, it is almost certainly a response to growing Chinese aggression in the South China Sea and a noteworthy escalation in Japan’s gradual abolition of its postwar commitment to pacifism.

The views and information contained in this article are the author’s own and do not necessarily represent those of The Asia Cable.

However, beneath the positive headlines and press releases, Germany’s policy toward China has shifted considerably closer to France’s. With a converging Franco-German position, it becomes much easier for the EU to pursue policies that de-risk against China, namely by pushing to lessen Europe’s dependence on Chinese technology and advocating for a deeper India-Europe relationship.

France Seeks Pushback

France and Germany, being the most influential powers in the EU, have significant sway over the bloc’s trade, monetary, industrial, and foreign policy, known as the Franco-German engine. However, Paris and Berlin have diverged numerous times, and one of the issues was how to engage with Beijing.

Within the EU, France initiated the discussion to treat China as a geopolitical competitor. In 2019, French President Emmanuel Macron stated that the era of European naiveté toward China is “over.” In 2020, after Macron voiced support for the Hong Kong protests, the Chinese embassy in France vehemently pushed back against his claims, calling it “hypocritical.” More broadly, the heart of France’s Indo-Pacific strategy since 2018 has been to assert strategic autonomy vis-à-vis Washington and Beijing. In line with this approach, France has bolstered security partnerships with key regional powers, including India, Indonesia, and Vietnam.

One of the key reasons France has been more vocal in challenging China is that it is a regional power in the Indo-Pacific whose interests are directly affected by China’s growing geopolitical clout.

Germany Wanted Engagement

By contrast, Germany has taken a more accommodative approach vis-à-vis China. Under former German Chancellor Angela Merkel, Germany prioritized engagement with China. Notably, her lack of criticism during the Hong Kong protests prompted criticism from other German politicians in her own party, the Christian Democratic Union. Unlike France’s security-centric approach in the Indo-Pacific, Germany’s is centered on trade. Germany is China’s largest trading partner in the EU, whereas France and China do not share a very deep economic relationship. Notably, in 2021, China accounted for only 9% of France’s imports and 1.4% of French exports. Even though France also has a trade deficit with China, it is less dependent on China than Germany is.

Given the amount of economic interdependence, Berlin has been very reluctant to pursue a policy of de-risking from China. In fact, in November 2022, a group of German business executives argued that de-risking from China would be bad for their businesses and that the Chinese market is essential to their industry. Likewise, in 2024, Germany opposed an EU measure to impose tariffs on Chinese electric vehicles, while France supported it. At the time, then Chancellor Olaf Scholz said that imposing tariffs would be “protectionist.”

With diverging Franco-German interests, it was difficult for the EU to fully adopt a de-risking strategy toward China.

Shift in Germany’s Stance

However, over the past three years, Germany’s stance toward China has grown more hawkish. Two key reasons for that are concerns over China’s economic competition with the German automobile industry and its support for Russia’s War in Ukraine.

For decades, the German automobile industry has long been a symbol of the country’s overall economic health. In particular, brands such as Volkswagen were highly dependent on the Chinese market, and in some years, their market share was 50%. However, in recent years, the German automotive industry has suffered significantly from competition from Chinese electric vehicles, and its sales to China have fallen by two-thirds since 2022. According to Andrew Small, a research fellow for the European Council on Foreign Relations, “Germany is at the heart of the second China shock.” In fact, one of the reasons for Chancellor Merz’s visit to China in February 2026 was to address the widening trade deficit Germany has with China, calling it unhealthy.

In tandem, Berlin has been increasingly concerned with Beijing’s support for Moscow in the Russia-Ukraine War. In December 2024, former German Foreign Minister Annalena Baerbock accused China of acting against European interests by backing Russia’s war. In addition, one of the issues Chancellor Merz raised during his China visit concerned Beijing’s support for Moscow.

With these two factors, the German position vis-à-vis China has shifted much closer to France’s.

Impact of Franco-German Consensus on China

With a converging view between Paris and Berlin on China as a threat, it becomes easier for the EU to pursue policies to de-risk its exposure to China.

One area of policy alignment is reducing European reliance on Chinese technology. During a digital summit in November 2025, both Macron and Merz supported efforts to reduce the reliance on Chinese (and American) technology. During the summit, Macron argued that Europe does not want to be a client of American or Chinese technology. Merz echoed his sentiment, insisting that Europe cannot leave AI to the Chinese or Americans. Notably, France and Germany announced a public-private partnership between Mistral AI (a French firm) and SAP SE (a German firm) to develop Europe’s sovereign technology sector. They affirmed support for the EU’s digital sovereignty plan.

Another policy area is strengthening relationships with other Indo-Pacific powers, namely India. As noted by Garima Mohan in her report for the German Marshall Fund, much of Europe, aside from France, prioritized its relationship with China over its relationship with India. However, amid Berlin’s desire to reduce its dependency on China, it has turned to India, given its sheer market size and its crucial role in challenging Chinese power in the Indo-Pacific region. With the two largest EU powers favoring a deeper relationship with India, it has played a key role in shaping EU policy outcomes, such as the India-EU free trade agreement.

At a moment when Europe is navigating multiple geopolitical crises, a Franco-German alignment on China allows the EU to advance a credible strategy of de-risking and assert its strategic autonomy.

Editorial contributions by Kathryn Kremp

The views and information contained in this article are the author’s own and do not necessarily represent those of The Asia Cable.

Regarding security on their western borders, Chinese leadership is most concerned with the East Turkestan Islamic Movement (ETIM), a Uyghur jihadist movement that advocates for Xinjiang’s independence. The ETIM has long been active in Pakistan’s Khyber Pakhtunkhwa province, which borders Afghanistan. During its founding, the ETIM received material support from the Taliban and had links with the Pakistani Taliban. As a result, China has urged Afghanistan and Pakistan to take action against ETIM to prevent spillover effects that could affect Xinjiang’s and overall Chinese border security.

Beijing has not formally recognized the Taliban government, although they have taken steps in that direction. For example, Chinese leadership has received the Taliban ambassador and has allowed them to control the Afghan Embassy in Beijing. However, China remains insistent that it is “pragmatically and cautiously accepting the Taliban’s dominance in Afghan affairs.”

At a Shanghai Cooperation Organization conference, the Taliban Foreign Minister gave a public assurance stating that, “the Islamic Emirate of Afghanistan will not allow any of its own members, or any other individual or group, including al-Qaida, to pose a threat to the security of others from the soil of Afghanistan.” However, Beijing and others remain skeptical. These doubts are corroborated by Ayman al-Zawahiri, leader of al-Qaeda, who lived in downtown Kabul until his assassination by an American drone strike.

The relationship between Chinese leadership and the Taliban raises the question of whether it is grounded more in cooperation or coercion. On the surface, both actors appear to have overlapping interests; meanwhile, there is evidence that China has employed pressure tactics to guarantee that Chinese security concerns are prioritized.

The Taliban’s quest for economic legitimacy provides a sign of mutual interest, as since regaining power, they have faced international isolation and financial strain. China offers a path for recognition and investment that the Taliban could be eager to pursue. On the other side, Afghanistan and China also share a broader opposition to Western influence, which provides an extra incentive for engagement.

However, Chinese actions also reveal a degree of coercion. Beijing has consistently demanded guarantees regarding Uyghur militant groups such as the ETIM. As previously stated, China has pressured Pakistan to suppress these groups in the past, and, as such, similar expectations have been placed on the Taliban. For example, Chinese telecom firm Huawei has reportedly assisted the Taliban in developing mass surveillance infrastructure. Additional reports on surveillance and intelligence operations in Afghanistan also show that China is willing to act on its own in order to secure its interests.

China’s engagement with the Taliban reflects a combination of cooperation and coercion. While both sides benefit from economic and political ties, China’s security agenda often shapes the relationship in ways that limit the Taliban’s autonomy.

As Afghanistan is continuously isolated from the West, China’s role will likely increase. This engagement could either help stabilize the region or, if perceived as intrusive, deepen tensions. However, this trend extends beyond Afghanistan as China increasingly positions itself as a security actor in Central Asia and other parts of the Global South.

Editorial contributions by Rachael Rhine Milliard

The views and information contained in this article are the author’s own and do not necessarily represent those of The Asia Cable.

Since its inception, the Expo has faced seemingly insurmountable odds. Spiraling costs and structural concerns, coupled with bad management and poor ticket sales, have contributed to increased media scrutiny, and the government only breaking even on its investment in August, almost 4 months after the Expo opened its doors to visitors in April.

The Expo’s organizers expected the event to bolster Japan’s image as a major economic and political powerhouse, similar to how Expo 70 did for post-war Japan over 50 years ago.

Since the Expo 70, Japan’s economy has stagnated. These years have been dubbed the “Lost Decades,” and the government was hoping Expo 25 would help jump-start the Japanese economy with an infusion of new tourist dollars and investments. As part of our coverage, we asked visitors their thoughts on Expo 25’s success and their views of Japan.

Hot and Difficult, Long Queues with No Seating

In front of the Qatar Pavilion, underneath the Expo’s Grand Ring, we met Pranit from India. When asked about the Expo, Pranit mentioned that Expo 25 provided the world with much-needed optimism for the future of our civilization. Regardless of the optimism Pranit mentioned, however, he noted that the Expo could add more seating arrangements for visitors. Pranit wasn’t alone. Throughout the Expo’s Grand Ring, one of the very few spots in the event that offers visitors a spot to shield themselves from Japan’s sweltering summer heat, we find many visitors, many of whom came with their families, sitting on the ground and taking a rest. The organizers themselves seem to be aware of this mismanagement and have added multiple seating and resting zones for visitors. However, the Expo site’s design did not allow for a greater allocation of seating, so most visitors had to make do with sitting on the grounds in and around the Grand Ring or any of the pavilions that offered shade.

At certain pavilions with huge numbers of visitors, such as the United States Pavilion or the French Pavilion, the queues could last for hours, with one user from Reddit mentioning that the average walk-in wait time lasted for anywhere from 45 to 60 minutes, with restaurant queues lasting somewhere around 30 to 50 minutes. This made the journey around the Expo “hot and difficult,” said Priscilla from Nigeria and Diane from France. The duo had traveled to the Expo in hopes of a good hosting at the Expo, given Japan’s global image of being organized. Upon arrival, they found the Expo did not fully meet their expectations. Priscilla mentioned that everyone is polite, and the organizers have kept the site extremely clean. However, she found some pavilions to be difficult, due to the heat and the long queues. Both Priscilla and Diane had taken note that the Expo is not as multilingual as it is supposed to be. The officials of Expo 25 are English, French, and Japanese, yet they found that most signs were written only in English and Japanese, which made navigation for those visitors who possess limited language capacity difficult. Both Priscilla and Diane agreed that the Expo has improved Japan’s image in regards to tourism.

‘I wondered about the reputation of the event even before it was held.’

Continuing the path along the Grand Ring, we met Miyuki, a visitor from Osaka’s nearby Nara Prefecture. Dressed in the traditional Japanese Yukata dress, Miyuki decided to take a train ride to Osaka to attend the Expo and see it in person. “This is my first time (attending the Expo). I wondered about the reputation of the event even before it was held and whether it would have a good reputation or not, but now that I’ve been here, I’m really enjoying it,” Miyuki stated. Every day, countless Expo visitors attend with the same skepticism as Miyuki. It is because of the constant scrutiny by both the Japanese and international media on the Expo’s failures and mismanagement.

Unfortunately, visitors’ concerns have not been unfounded. Expo 25 has been plagued by mismanagement and conflicts since the day its plans were announced to the public. Originally budgeted at around $426.7 million, the costs skyrocketed to over $806 million by the end of the Expo’s construction. While the event’s organizer has mentioned the pandemic and the yen depreciation as reasons for the costs and delays, the overall outcome of the Expo is not what many had expected. With the reported bug infestation around the Expo site and facility suspensions due to legionella bacteria infections among visitors, the Expo has taken a downward turn. This has created overall public disinterest in the event, resulting in underwhelming ticket sales.

The pre-existing bad publicity of the Expo, however, did not deter Miyuki; rather, she decided to see for herself whether the Expo’s poor reputation was accurate. “I think it would be great if we could preserve the old state of things for the future using the latest technology, and I wonder what it would be like. I think it would be great if a new culture that is created by mixing various cultures could be born in the future,” Miyuki concludes.

As the sunset draws near and crowds gather for the fireworks and water shows at the Expo’s Water Plaza, Expo 25 has shown us a one-of-a-kind study in contrast. While visitors mention that long queues, summer heat, and language gaps have dampened parts of the experience, many visitors on the ground, just like Miyuki, found optimism, politeness, cleanliness, and moments of wonder that hint at the Expo’s original promise as it was established in 1851. The reality sits somewhere in between: an ambitious showcase strained by logistics, but animated by people who show up hoping to glimpse a better future. Somewhere along with these factors, the remainder of the Expo can better reflect the ideals it set out to celebrate. A reflection in the voices of both frustration and faith. That mix, more than any pavilion, rather seems to capture what this Expo has become: an imperfect, contested event, and still, for many, worth the trip.

Editorial contributions by Rachael Rhine Milliard

The views and information contained in this article are the author’s own and do not necessarily represent those of The Asia Cable.

The last time Osaka held a World Expo was in 1970, during Japan’s economic miracle — a historic comeback from the desolation of the country just 25 years prior. Accounts from that Expo are filled with joy and excitement. Expo 70 marked Japan’s position on the global stage as a leader in the Asia-Pacific. In hindsight, it also offered many Japanese a glimpse into what an international stage looked like. Expo 70 was the first time many Japanese people met foreigners and encountered the concept of globalization. Many of the same sentiments are in the air with the return of Expo 25 to Osaka.

With over 152 participating countries, Expo 25 aims to present a new future for the world: one of harmony and technological innovation for the betterment of all. There are 188 pavilions in total. Apart from the 152 country-specific pavilions, there are over 13 pavilions hosted by private Japanese sectors, 8 signature pavilions, and 15 other pavilions hosted by organizations and the Japanese government. Each pavilion helps visitors envision how society can evolve sustainably to meet humanity’s long-term needs through promoting the core theme of “Designing Future Society for Our Lives.”

A Place Where You Within Me Encounters Me Within You

This is a theme of the Dialogue Theater pavilion, one of the Signature Pavilions, aiming to provoke thoughts of interpersonal communication while creating beautiful scenery in the heart of Expo 25. This pavilion showcases mesmerizing Japanese traditional woodcraft in its design, construction, and the pieces on display. Many of the Signature Pavilions, such as the Dialogue Theater, were constructed with the hope that they would prompt visitors to reflect on their personal connections and the impact of technological advancements; these pavilions are sending a message of unity to a world polarized by differences in politics and opinions.

Another Signature Pavilion that is quite eye-catching is the Future of Life Pavilion, where Japan’s technological advancements were presented. In contrast to Expo 70, where more outward-looking innovations were presented, Japan chose to showcase technologies that would support the livelihood of the people themselves. Beside it is the Null2 Pavilion, which utilizes mirror reflections to create an immersive experience of living in harmony between nature and digital technology.

In addition to the Signature Pavilions, Japan hosted several public and private organizations that sought to exhibit their latest innovation and sustainability solutions to the visitors. One of the most notable is the Sumitomo Pavilion, which boasts a tall, uniquely shaped wood structure. Sumitomo Corporation, one of the largest Japanese conglomerates operating in virtually every industry, spread the inspirational message: “Toward a future from the forest.” Inside, visitors are invited to connect with and be part of the forest through interaction with exhibits of lush trees and smaller natural insects.

One of the most striking Signature and Domestic Pavilions, however, would be the Women’s Pavilion in collaboration with Cartier. This pavilion focuses on the challenges and inequality between gender roles that have plagued Japanese women in a male-dominated environment. Decorated with fruit-bearing plants and flowers, the pavilion portrays the idea that “when women thrive, society thrives” while exhibiting achievements and battles over better women’s representation in Japan. This exhibit reinforces one of the strongest messages being conveyed at Expo 25: equality for all human beings, not just for one gender in particular.

Unity in Diversity

Surrounding the main area of Expo 25 is the “Grand Ring,” built on a concept of harmonizing multicultural diversity for greater peace and unity among the nations. It is within the corridors of this ring that you will find stunning international pavilions that present their technological advancements and achievements over the past decades.

Many of the pavilions are striking. Designs range from the minimalistic and shape-bending Qatar Pavilion to the sleek and bright Korea Pavilion. Many nations are displaying their best and most unique designs and cultures at Expo 25.

One of the notable mentions is the India Pavilion, where the theme was to “Balance Culture With Technology.” Inside, information on India’s commitment to being a global production hub is being showcased, with different ministries displaying their latest improvements each week. During the week that The Asia Cable visited, the silk producers and their products were being showcased.

Another notable pavilion is that of Saudi Arabia, just a corner away from the India Pavilion. This year, Saudi Arabia presents its signature desert landscape as the core design for its pavilion, delivering a unique yet meaningful look, with daily musical performances that allow visitors to immerse themselves in Saudi Arabia’s rich cultural heritage.

Each pavilion holds some allure. The United Arab Emirates Pavilion showcases the fabric and sustainability sectors in the UAE. Malaysia’s Pavilion showcases the educational and tourism sectors, with interior changes each week as each government sector comes in and presents its innovations. Every country represented has something unique and beautiful to offer.'

Right in the middle of the Grand Ring sits the Forest of Tranquility. A scenic garden with lush greenery with flowing waters, the Forest of Tranquility, designed by a team of internationally-renowned artists, features over 1,500 trees arranged in themes that highlight health and well-being and the future of community and mobility. Some pavilions can be found here, too, and they have matched their theme to the forest’s. One of the pavilions situated inside the forest is the Better Co-Being Pavilion. A tall, steel structure that resembles multiple trees joined together is a reflection of the theme “Resonance of Lives,” offering visitors an opportunity to experience life in the future, which will incorporate the United Nations’ Sustainable Development Goals practices into everyday living.

Visitor Interaction

Expo 25 uses visitor-centric interaction to encourage visitors to walk around and explore more areas of the Expo, not just their pavilions of interest. One such example is the Expo Stamp Passport. With the Stamp Passport, visitors are encouraged to visit almost every pavilion, as each has a unique stamp that visitors can collect and keep as souvenirs.

Scattered around Expo 25 are rest areas dedicated for visitors to take shelter from Japan’s summer sun. Some of these areas have playgrounds for families with younger kids. Despite the interesting features, family accommodations, and innovative technologies being presented, ticket sales have only recently reached the breakeven point for operating costs. The Expo has faced many challenges since its inception. In our next piece on the event, we examine why, as one senior association official comments, Expo 25 will likely not be profitable.

Editorial contributions by Rachael Rhine Milliard.

The views and information contained in this article are the author’s own and do not necessarily represent those of The Asia Cable.

Artificial intelligence has placed the world on the cusp of radical change, from digital assistants to advanced military strategy and everything in between. Yet the two countries leading these efforts, the United States and China, can barely speak to each other about the technology shaping the future.

A spiral of mistrust has halted formal cooperation and stalled informal exchanges, allowing the global risks of artificial intelligence to go unchecked. How did we arrive at this point, and what are the consequences of maintaining the status quo? These questions must be answered before exploring how limited trust might be built, because without meaningful cooperation, the promise of AI may be eclipsed by dangers that no nation can manage alone.

The Spiral Takes Hold, and the Costs Are Real

The U.S.–China technology rivalry has shaped the bilateral relationship. From telecommunications and cybersecurity to semiconductors, each frontier has carried strategic weight. Artificial intelligence is simply the latest, though the stakes are now far higher. Unlike past technologies, AI has the potential to reshape how every previous tool is used and to alter the foundations of economic and military power.

The United States and China approach AI governance with fundamentally different values. Washington emphasizes innovation, market leadership with rapid adoption, limited state interference, and the protection of free expression. Beijing insists on “correct political direction” with “core socialist values,” risk mitigation, economic development, and promoting Chinese models abroad. These opposing visions are reinforced by mutual narratives of suspicion. U.S. officials worry about data security, disinformation, military applications, and economic competition. Chinese leaders, in turn, fear U.S. dominance in AI and the risks it poses to their national security and growth.

As of mid-2025, the United States has levied computer chip export controls, pressured partners to align with U.S. suppliers, and expanded its Entity List to limit cooperation with Chinese AI firms deemed security threats. These measures achieve near-term strategic goals but come at a cost. The chilling effect is evident: foreign foundries hesitate to work with Chinese chipmakers, Beijing has warned its AI leaders against travel to the United States, and companies on both sides face steep costs for even informal cooperation.

In essence, export restrictions and technology controls begat Chinese crackdowns and self-reliance drives, which in turn fed U.S. anxieties about a tech powerhouse outside democratic norms — a cycle that deepened with every new restriction or security scare. Rather than convergence, two parallel governance systems are taking shape, each developing on its own terms and with little chance of alignment.

The lack of mutual verification, assurance, and cooperation on AI has consequences beyond geopolitics. Crucially, limiting technology sharing between countries could undermine the safety of global AI frameworks due to systemic information gaps. The longer the two powers remain locked in suspicion, the harder it becomes to coordinate even on threats they both face.

Soft Law, Stalled by a Lack of Trust

Formal treaties on AI between Washington and Beijing are almost unimaginable in the current climate, which is why soft law — non-binding principles, voluntary norms, and industry-led best practices — should, in theory, be the easiest space for cooperation. There is already a foundation for international soft law: UN resolutions, G7 AI principles, collaborative bodies such as OECD AI, and multi-stakeholder dialogue indicate that normative common ground exists. Notably, in March 2024, the U.S. introduced a UN resolution on “safe, secure, and trustworthy AI,” which China co-sponsored—an unusual act of diplomatic reciprocity in AI governance. Though nonbinding, it marked genuine international soft-law alignment.

Unfortunately, efforts of soft law to instill responsible AI governance, which depend on transparency and minimal information-sharing to function, are undermined by mutual suspicion. U.S. firms worry that even informal dialogue with Chinese counterparts could invite increased scrutiny or sanctions; Chinese companies fear that openness will expose them to accusations of information leakage or compliance violations. The result is that the most flexible, low-stakes avenue for collaboration is instead another victim of the spiral of mistrust.

At the heart of the problem is not just different rules, but the absence of trust. For soft law to work, companies and regulators must be willing to exchange at least minimal information. The trust deficit prevents not only binding treaties, which are already unlikely, but also the informal guardrails that could keep AI risks manageable. Without a baseline of confidence that cooperation will not be weaponized, even voluntary principles remain frozen on parallel tracks.

Pathways Forward

If formal treaties are unlikely and soft law is ineffective in the age of strategic competition, what remains? The answer may lie in starting small, in areas where cooperation is both less politically sensitive and clearly in the public interest. Experts have already identified overlap between American and Chinese AI governance initiatives, revealing “promising topics” with opportunities for productive dialogue.

Additionally, technical verification of AI development and deployment — modeled loosely on arms control — is emerging as a concrete path for cooperation. Recent research suggests that technical and personnel-based AI security verification mechanisms could effectively verify safety standards. While still early-stage, these proposals exhibit how verification might one day allow states to confidently oversee large-scale AI development without requiring full transparency or sacrificing national security.

From a practical standpoint, disaster response, climate modeling, and public health are natural candidates. Each offers a way to prove that technical collaboration can reduce shared risks without compromising national security. Even limited data exchanges, such as jointly testing best practices for disaster prediction, could begin to chip away at the mistrust.

Confidence-building steps do not need to be grand. Track-two dialogues between academics and technical experts, standardized reporting practices for AI incidents (e.g., the Incident Database), or narrowly scoped partnerships in multilateral settings such as the United Nations could serve as trust incubators. The aim is not immediate harmony but to demonstrate that cooperation is possible at all.

Ultimately, avoiding the worst outcomes of AI will require some baseline of trust between the United States and China. While neither side is ready for sweeping agreements, a few small bridges could keep the vicious cycle of suspicion from hardening into permanence. With small bridges, the door for future alignment can stay open.

Editorial contributions by Rachael Rhine Milliard

The views and information contained in this article are the author’s own and do not necessarily represent those of The Asia Cable.

On July 31, China’s ambassador to Qatar, Cao Xiolin, announced that relations between the two countries had entered a “golden era,” marking 11 years since they established a strategic partnership in 2014. Behind the flourish sits a practical record: Beijing now locks in at least several million tonnes of Qatari liquified natural gas every year on twin 27-year contracts, the Qatari Investment Authority (QIA) now holds a sizable stake in one of China’s largest mutual fund companies, and defense ties tick along through staff talks rather than hardware headlines. In other words, the partnership has matured into exactly what both capitals need it to be: reliable gas for China, steady diversification for Doha, and just enough political distance to keep Washington and Gulf neighbours comfortable. The “golden” label doesn’t oversell the relationship; it simply captures a decade-old arrangement that works because it stays predictable.

LNG on Autopilot

The substance behind the ambassador’s flourish is almost entirely liquid natural gas (LNG). Over the past two years, QatarEnergy has inked two nearly identical 27-year supply contracts, one with Sinopec worth 3 million tonnes per year and another with CNPC worth four million tonnes per year, and sweetened with a 5% upstream stake in the North Field East expansion. Add a separate three-million-tonne tranche routed through Shell’s global portfolio, and China now has a dependable eight-plus-million-tonne pipeline that runs well into the 2050s. The volumes matter on both ends: in 2024, Qatar supplied roughly a quarter of China’s total LNG imports, while China absorbed more than a fifth of Qatar’s export portfolio.

Beyond gas, the flow of capital has been selective rather than spectacular. Doha’s sovereign wealth fund (SWF) won regulatory approval this spring to purchase 10% of ChinaAMC, Beijing’s second-largest mutual-fund house, marking the first Gulf SWF stake in China’s onshore asset-management sector. It is a tidy financial opening, not a strategic beachhead. Taken together, the gas contracts and the boutique equity deals tell a straightforward story: the economic backbone of the partnership is locked into long-dated contracts that guarantee revenue and supply, leaving both countries free to let the rest of the relationship run quietly and steadily.

Words Do the Heavy Lifting

China’s foreign-policy playbook has long treated language as an instrument of statecraft. Terms like the now-ubiquitous “community with a shared future” all began as catch-phrases before migrating into white papers and summit communiqués. The formula is simple: coin a memorable label, repeat it across every level of domestic and foreign policy, then let the repetition signal consensus and momentum even before concrete policy follows. Seen through that lens, branding the China-Qatar partnership a “golden era” is less boosterism than filing the relationship into Beijing’s mental cabinet of settled, low-maintenance affairs, unlike the “golden year” rhetoric Beijing recently rolled out with Iran, where the partnership is far more one-sided and the label rings hollow.

For Doha, the label costs nothing and flatters a country that still sits slightly outside the security core of the Gulf, which is dominated by Saudi Arabia, the United Arab Emirates (UAE), and their respective integrations into the American security apparatus, not necessarily in that order. For Beijing, it advertises reliability without obliging the PLA to station ships or sell missiles. Words, in short, carry the weight that deeper strategic commitments would otherwise bear, and that is precisely why neither capital rushes to move the relationship beyond its comfortable, rhetorical shine.

Quiet Constraints

Beneath the headline optimism sit limits neither side seems eager to test. First is Iran. Qatar shares the North Field/South Pars reservoir with Tehran and has generally kept a lighter touch toward Iran than Riyadh or Abu Dhabi, restoring full diplomatic ties in 2017 even as others kept relations frozen. What’s more, Qatar and Iran only drew closer as the latter served as a lifeline for the small, peninsular country during the Gulf Cooperation Council (GCC) crisis from 2017-2021. But the balance is fragile: after Iranian drones hit the vicinity of Al-Udeid Air Base in June, Doha called the bilateral relationship “scarred.”

China’s stake in Iran runs in the other direction: for Tehran, Beijing is an economic lifeline and a ready buyer of discounted, sanction-shadowed oil; for Beijing, Iran is a useful supplier, not a market it depends on. Their 25-year cooperation plan keeps that channel open, but the follow-through on big-ticket projects has been limited. Pushing China-Qatar ties into high-profile territory such as a Comprehensive Strategic Partnership or conspicuous security cooperation would force Beijing to square its discreet energy play with Tehran against its quieter, gas-focused rapport with Doha. Neither side looks eager to run that experiment.

Qatar’s standing inside the GCC adds a second brake. The 2017-21 blockade by Saudi Arabia, the UAE, Bahrain, and Egypt left a shadow of mistrust that still shapes Gulf diplomacy. Doha’s independent streak runs through Al Jazeera’s editorial line, its support for certain Islamist movements, and its security cooperation with Turkey, all of which Riyadh and Abu Dhabi eye warily. Defence numbers underline the gap: Saudi Arabia and the UAE together account for about three-quarters of GCC military spending and field the bloc’s most modern forces. They drill side-by-side in large exercises such as Native Fury 24, reinforcing their primacy.

In this context, a low-key, gas-first partnership with China suits Doha: it diversifies ties without inviting charges of strategic realignment, and it suits Beijing because it can deepen energy links without triggering alarms among the Gulf’s security heavyweights.

“Golden” Works Anyway

Strip away the ceremony and what remains is a partnership that meets each side’s immediate needs. China locks in decades of low-sulfur gas at stable prices and picks up a hedge against turbulence in Russian or Pacific supply lines. Qatar secures another anchor buyer as it quadruples LNG capacity and signals to Gulf rivals, and to Washington, that it can diversify without defecting. Neither seems to want a showier alliance: Beijing avoids undercutting hard-won ties with Riyadh and Abu Dhabi, Doha sidesteps the trap of looking like anybody’s proxy. Reliability, not grand strategy, is the real prize.

The “golden era” headline works, just not for the reasons the phrase invites. No bases, no arms packages, no splashy MOUs. Instead, a pair of 27-year gas contracts, a tidy fund-management stake, and a relationship calibrated to stay useful without becoming dramatic. In a Gulf still defined by Saudi-Emirati hard power and Iran’s uneasy shadow, that level of predictability is valuable for both parties. For now, this quiet reliability is the real gold in China-Qatar ties.

The views and information contained in this article are the author’s own and do not necessarily represent those of The Asia Cable.

This agenda marks a notable departure from recent precedent. Historically, fourth plenums have focused on internal Party governance and political reform: the 18th Central Committee’s 2014 plenum centered on Rule of Law, while the 19th in 2019 addressed the modernization of China’s governance system. Earlier plenums emphasized Party-building and strengthening leadership capacity. This year’s focus on long-term economic planning instead suggests a shifting urgency within the Party’s priorities, away from institutional refinement and toward economic course correction.

General Secretary Xi Jinping chaired the Politburo meeting that set the agenda, which also included an assessment of the country’s economic trajectory heading into the second half of the year.

Official language described the upcoming plan as a “crucial phase” for consolidating gains and advancing socialist modernization, echoing previous cycles. But the backdrop this time is different. China's leadership now faces a more complex set of conditions than at any point since the aftermath of the global financial crisis in the early 2010s: weak household demand, structural property malaise, and growing pressure on local finances are colliding with the country’s longstanding reliance on investment and export-led growth.

While the Politburo’s statement emphasized China’s “strong resilience” and “great potential,” recent figures tell a more cautious story. Land-sale revenue — long the fiscal lifeblood of local governments — dropped 11.9% year-on-year in the first five months of 2025. That decline has left municipal budgets under strain and narrowed the public spending base that once drove rapid GDP expansion.

As we’ve previously noted at The Asia Cable, “China’s model sits in a feedback loop: a property slump hollows out local coffers, shrinking investment, which in turn suppresses incomes and confidence, making it even harder for households to power the economy on their own.” Household consumption accounted for just 39% of GDP in 2024, according to World Bank estimates, a figure nearly 20 points below the OECD median.

The same challenges have cast doubt on Premier Li Qiang’s promise of “relatively rapid” growth during his June 25 remarks at the Summer Davos Forum in Tianjin. While retail sales have rebounded modestly, service-sector PMI readings have remained in contraction territory for much of 2025. Youth unemployment continues to hover around 15%, and household savings exceed 40% of GDP.

State media has framed the 15th Five-Year Plan as an opportunity to “consolidate the foundation” for long-term growth, but past pledges to rebalance toward consumption have rarely translated into lasting structural shifts. As noted, fiscal decentralization, limited social transfers, and capital bias toward state-owned and industrial sectors have left households sidelined.

Complicating matters further is the rise in trade friction as China’s industrial output continues to outpace domestic demand. With various sectors producing far beyond what the local market can absorb, surplus goods have increasingly been redirected abroad, prompting backlash from key trading partners. The European Union has opened investigations into subsidized Chinese exports, while the United States has signaled tighter controls on high-tech imports. These developments threaten to close off external pressure valves that once helped absorb China’s excess capacity, forcing greater urgency in addressing domestic imbalances.

Internally, the Party faces the growing challenge of aligning its economic priorities with the incentives that underpin cadre promotion and local governance. Infrastructure and industrial expansion remain the clearest path to political capital for provincial officials, while consumer-led growth requires a redistribution of both fiscal power and policy focus. Without meaningful shifts in how local officials are rewarded and how resources are allocated between the state and household sectors, even a well-intentioned Five-Year Plan will struggle to move beyond policy signaling.

October’s plenum may offer clues to how Beijing plans to stabilize growth without falling back on large-scale stimulus or renewed overcapacity. But the Party will need to confront deeper questions around income distribution, local fiscal resilience, and the social safety net before consumption can begin to meet the ambitions placed upon it. Certainly, Beijing’s decision to center this fourth plenum on economic planning makes it clear that growth optimization now stands as the Party’s most pressing domestic priority.

The views and information contained in this article are the author’s own and do not necessarily represent those of The Asia Cable.

By the next morning, aircraft could be heard flying over the border, with the Thai border patrol spotting six Cambodian soldiers, equipped with RPGs, scouting the border. Although both sides claimed that their counterparts were the ones to shoot first, the updates have by far seen substantial development, as by the time Friday, July 25, came around, both sides had been engaging in action for the whole night. By far, there are dozens of casualties and many more injured on Thailand’s side, while Cambodia did not release official details on its casualties or injured civilians.

Lowered Diplomatic Ties

Thailand lowered its diplomatic ties with Cambodia in the late hours of July 23, citing recent incidents of Thai soldiers stepping on Cambodian landmines, to which Cambodia has denied responsibility for such incidents. By 8:20 a.m. the next morning, Thailand spotted Cambodian soldiers starting to shoot across the border, which laid the ground for Thailand’s claim that Cambodia had opened fire and that Thailand had been acting in self-defense.

On the Cambodian side of reports, the Cambodian army has cited that they initially spotted Thai soldiers around the border areas at 6:30 a.m. on July 24. They also have reported witnessing Thai drones flying above Cambodian airspace for over 2 minutes at 7:04 a.m. on the same day. At 8:46 a.m., Cambodia stated that Thailand had fired the first shot at the Ta Muean Thom Temple, and within a minute that followed, the Cambodian forces fired back in retaliation.

As July 24 rolled along, many more injuries followed with airstrikes and shelling now expanding to the civilian areas surrounding the border, including strikes that hit a gas station and a hospital, prompting Thailand to issue a full evacuation order to all areas on its eastern border corridor. Since the first issue of the evacuation order, over 100,000 people have been evacuated to evacuation centers.

Army Deployed

Thailand’s acting Prime Minister Phumtham Wechayachai mentioned that he will have to keep the Thai army’s position at the “maximized” military position and that Thailand will not engage in any negotiations if no ceasefire is achieved. This comes at a time when Thailand is deploying its massive army. Thailand has also been seen deploying its F-16s to attack Cambodian army camps on July 24 as well.

These deployments escalated to the point that they led the Thai acting PM to announce that this clash could soon escalate into a full-blown war. Later on, Thailand’s foreign ministry said that they are open to diplomatic talks to end the border clashes. They will not, however, stop the deployment unless Cambodia agrees to a ceasefire. With multiple countries — from Malaysia, acting as the ASEAN chair offering peace talks, to the United States, United Kingdom, France and China signaling concerns over the gravity of the situation.

As the matter now reaches the United Nations’ Security Council, it will be difficult to see how the resolution will be achieved. Regardless, one could only hope that peace will soon come to the region and that the confrontation does not develop into a full war, for these people evacuated have seen one too many already.

The views and information contained in this article are the author’s own and do not necessarily represent those of The Asia Cable.

Historical Context

Afghanistan is often referred to as “the graveyard of empires” due to its long history of resisting foreign conquest. The Soviet Union’s 1979 invasion and the accompanying Mujahideen’s response serve as a strong example of Afghanistan’s legacy of resistance. In Arabic, “mujahideen” is the plural of “mujahid,” which roughly translates to “someone who fights for Islam.” The Mujahideen are not a singular organization but instead a collection of loosely affiliated Afghan resistance fighters.

Ahmad Shah Massoud emerged as a leader of the Afghan resistance and envisioned an “independent, sovereign, and Islamist Afghanistan.” He later turned his native Panjshir Valley into a stronghold that fought against Soviet aggression. For his efforts, Massoud received the nickname “the Lion of Panjshir.” The turning point in the Soviet invasion of Afghanistan would come in 1986 as the Mujahideen began to receive extensive backing in the form of weapons and technical support via covert programs conducted by the U.S. Central Intelligence Agency and British MI6. After nearly 10 years of invasion, the Mujahideen emerged victorious as the Soviets exited the nation.

Massoud later became Afghanistan’s defense minister and, alongside former President Burhanuddin Rabbani, played a key role in the Northern Alliance, which opposed Taliban rule after they took control of Kabul in 1996. Hence their name, the Northern Alliance is largely made up of non-Pashtuns from the northern and central provinces. On the other hand, Pashtuns from southern Afghanistan primarily fill the ranks of the Taliban. The Northern Alliance later grew to include other non-Pashtun leaders and assisted the American military during the 2001 invasion.

As illustrated, Afghanistan has a long history of resistance. The question then becomes: who opposes the Taliban today, and do they pose a threat to Taliban control?

Key Resistance Groups

The National Resistance Front (NRF) has become the most visible, non-extremist, and armed opposition group to the Taliban. Ahmad Massoud leads the NRF. He is the son of Ahmad Shah Massoud and operates out of Panjshir. His fight is symbolic of his own father’s fight against the Soviets, Taliban, and al-Qaeda. Consisting of many ex-Afghan military, police, and other security officials, the NRF has seen a growth in local support. As such, the group’s operations have expanded and are now present in nearly twenty provinces. By the summer of 2022, the NRF had started to carry out ambushes and limited attacks against Taliban forces in northeastern Afghanistan. Since then, the scope of their attacks has expanded to include eastern Afghanistan and Kabul.

The NRF maintains three main goals: leading efforts among various anti-Taliban groups to align and coordinate their activities, seeking increased engagement from the international community, and expanding the scope and scale of its operations across Afghanistan.

The Afghanistan Freedom Front (AFF) emerged in 2022 and declared a goal of ending “tyrant rule” through an “inevitable conflict.” Furthermore, the AFF has vowed to restore democracy and women’s rights in Afghanistan. Yasin Zia, who previously served as a former Chief of Staff, Deputy Defense Minister, and Governor of Takhar Province, leads the AFF. Zia also served as head of Afghanistan’s counterterrorism unit in 2011 and as the Deputy Director of the National Directorate of Security from 2011 to 2015. Compared to the NRF, the AFF is less centralized and has focused more on urban-based sabotage operations. In October 2024, the AFF claimed to have attacked Kabul Airport with missiles and a small infantry unit. Last month, the AFF reportedly killed and wounded Taliban fighters in Kunduz and Panjshir. The AFF and NRF are known to collaborate by raising money, weapons, and support for their cause abroad.

Former Afghan National Defense and Security Forces (ANDSF) remnants are also resisting the Taliban, although in a much less organized manner. The ANDSF primarily operates with other known groups, such as the NRF and AFF.

Capabilities

Militarily, these resistance groups are quite limited. However, with the start of the NRF’s urban operations, information warfare and guerrilla tactics have become quite valuable for their campaign. Since January 2024, the NRF has had more than 207 successful operations. The NRF has also been able to successfully target military bases and facilities, checkpoints, and high-level officials. Being headquartered in the Panjshir Valley, the NRF’s intelligence capabilities have increased, and, as such, it has been able to infiltrate the Taliban’s intelligence network. More broadly, resistance groups, such as the NRF, have been able to garner some domestic support; however, this has not necessarily translated into external support.

Regional and International Response

Afghanistan’s neighbor, Pakistan, maintains concerns about instability and has engaged with Taliban leadership. More specifically, the Pakistani government remains wary of Afghan refugees entering Pakistan. As such, the “Illegal Foreigners Repatriation Plan” has been introduced. This Plan outlines the proposed return/deportation procedures for non-citizens who reside in Pakistan and do not hold a valid visa in three phases, starting with undocumented Afghan nationals. The United Nations and other humanitarian organizations have strongly criticized this plan.

Tajikistan, like every other government, has refused to recognize the Taliban as the official leaders of Afghanistan. The Taliban have labeled ethnic Tajiks as prone to resistance. In response, President Emomali Rahmon has publicly denounced the Taliban, stating they failed to form an inclusive government or respect ethnic minorities, particularly Tajiks. Tajikistan has also provided refuge to prominent Afghan resistance figures. The country has hosted key NRF figures, such as Ahmad Massoud, granting them protection and enabling them to coordinate resistance efforts from the Tajik capital, Dushanbe. In September 2021, Tajikistan posthumously awarded the nation’s highest honour, the Order of Ismoili Somoni, to Ahmad Shah Massoud and former Afghan president Burhanuddin Rabbani.

Will the Resistance Fade Away?

In the short term, resistance groups such as the NRF will likely remain alive and well. However, due to limited external support, these groups are likely to have only a limited impact on Taliban rule. The most significant risk for resistance is that it further fragments into more radical factions.

In the long term, much depends on whether the Taliban implodes or not. With the organization’s internal network fragile and only continuing to fracture, infighting between the Taliban’s factions is splintering their system.

Another possibility is an economic collapse, which could potentially undermine Taliban authority. Since the takeover by the Taliban in 2021, the Afghan economy has contracted by 27%, unemployment has doubled, and only 40% of the population has access to electricity. Sectors such as finance have “basically collapsed,” and there are no major sources of economic activity, such as exports or public expenditure, which are lacking, leaving small and medium enterprises and farmers as the lifeblood of the faltering economy. Furthermore, 69% of Afghans lack basic resources.

As shown, Afghanistan has a strong legacy of resistance that remains present today. However, these resistance groups are fragmented and under-resourced. Regarding the future, low-level insurgency will undoubtedly continue; however, it will most likely not significantly threaten the Taliban’s rule. The future of this resistance will rest on the support or silence of the Afghan people rather than military strength.

The views and information contained in this article are the author’s own and do not necessarily represent those of The Asia Cable.

Household spending equaled just 39% of GDP in 2024, 20 points below the OECD median and barely higher than in 2010. A World Bank review reaches the same conclusion, warning that “structurally low consumption” is now the core drag on growth. Retail sales are rebounding, but service-sector Purchasing Managers Index (PMI) readings have spent most of 2025 in contraction territory. While it is true that even low-to-mid-single-digit growth still adds billions in absolute yuan, if Beijing hopes to hit 5% growth without another infrastructure splurge, consumption’s share must rise meaningfully and not just in level terms. That has not happened since the mid-2000s investment boom pushed the ratio down in the first place.

Chinese families have long treated apartments as their pension fund, college fund, and rainy-day buffer rolled into one. Roughly 70% of household wealth is tied up in property. For comparison, property accounts for about 28% of U.S. household net worth, 40% in the United Kingdom, and a little over two-thirds across the euro area on average. New-home prices have fallen 30% from their 2021 peak; pockets of oversupply mean millions of units will never be sold or keys handed over. Mortgage boycotts and “black-swan” developer defaults have shredded faith in bricks and mortar as a store of value.

China’s consumers are battening down the hatches. Household savings are more than 40% of GDP, and flows into Alipay’s Yu’e Bao money-market fund keep climbing even after its yields dipped below 1.5%. The same recessionary signals show up in the labor market: youth unemployment is still stuck around 15%, eroding confidence in near-term wage growth. Surveys echo the hard data with over half of respondents now saying they would rather stash away cash than spend, the highest share on record. Together, the elevated saving rate, Yu’e Bao’s popularity, stubborn youth joblessness, and bleak sentiment polls sketch a public that is preparing for leaner times, not a consumption rebound.

Turning savers back into spenders would take a jolt of confidence that their future income and social safety nets are secure. But China’s fiscal plumbing runs in the opposite direction.

Any successful consumption pivot elsewhere rested on large, centrally funded transfers. China’s tax system is almost the mirror image: the central government keeps the revenue while locals shoulder most social service bills. Municipalities plug that mismatch by selling land to developers, a model now broken. Land sales by China's local governments faced a “double-digit year-on-year contraction of 11.9% in the first five months,” leaving city halls scrambling to pay teachers or local government workers, let alone expand unemployment insurance or healthcare coverage.

Beijing could raise its own fiscal deficit or even sell off SOEs to raise revenue, then redistribute the windfall to households. Either path would swell headline debt or slow the SOE investment machine that, fueled by cheap credit and growth targets, keeps building plants faster than domestic demand can absorb their output. What you get is overcapacity. Steel mills, solar panel production, and EV factories capable of producing several times what China can consume. To keep utilization and GDP alive, China must dump the surplus abroad, which creates trade friction. The result is policy drift: modest consumer coupons here, a small-print tax break there, none large enough to reverse the structural tilt toward saving.

Every quarter, the People’s Bank of China trumpets new relending windows to support consumption. Scratch the surface and most money lands in supply-side pockets. Examples include automotive trade-ins for electric-vehicle makers, appliance subsidies that double as industrial policy sweeteners, or Real Estate Investment Trusts (REITs) designed to bail out developers rather than buyers. SOEs and politically connected private champions capture the lion’s share of bank loans, while credit-card balances remain a rounding error in total social financing. Markets obey incentives: if capital is cheaper for a robot-filled export plant than for a start-up coffee chain, investment will stay the growth driver.

Even if policymakers mailed every adult a spending voucher tomorrow, the outcome would disappoint. A yuan spent in high-end manufacturing or digital infrastructure still generates more value added than a yuan spent on hot-pot or staycations. Unless Beijing liberalizes manufacturing, a bigger consumption slice will simply yield slower aggregate growth.

Technocrats know what a real pivot requires: raise the labor share of income, dismantle SOE monopolies, tax reforms and a re-engineering of the financial relationship between the central and provincial governments, grant full hukou rights to migrant workers, privatize chunks of state assets, and tolerate an interim drop in headline growth while overcapacity clears. Each move strikes at a vested interest: local cadres, state-sector bosses, or the Party’s own grip on the commanding heights. Faced with that trade-off, Beijing has repeatedly opted for directed credit and mini-stimuli that keep the investment engine idling but leave consumers in the passenger seat.

Xi Jinping’s “new productive forces” campaign explicitly favors technology-intensive manufacturing. As Xinhua puts it, these forces are “high technology, high efficiency, and high quality” industries — deployed to “break away from the traditional…productivity development path.” Behind the rhetoric lies a clear preference hierarchy. Instead of redistributing toward households, China is doubling down on advanced manufacturing to outcompete the West and fortify national security. The resulting supply overcapacity is already reigniting trade frictions and reinforcing an external surplus that masks domestic demand weakness.

China’s 1.4 billion consumers will, of course, spend more yuan every year simply because their numbers are vast and nominal incomes still rise. But consumption cannot shoulder the growth mantle unless the structural brakes of asset deflation, aging, welfare gaps, investment-biased fiscal rules, and sub-par services productivity are released. That would entail a politically explosive redistribution of wealth and power away from the state sector. Signals from Zhongnanhai suggest little to no appetite for that leap.

The political calculus is straightforward: an investment-driven model, with support from high exports, keeps power, money, and promotions anchored inside the state apparatus. Cadres rise by shepherding large projects, not by nudging up retail foot traffic, and SOEs depend on that pipeline for orders, cheap credit, and relevance. Rebalancing toward households would reroute capital into smaller, harder-to-monitor service firms and dilute the land-finance gravy train that underwrites local budgets. In effect, Beijing would be asking officials, banks, and SOE managers to surrender the very levers that secure their influence and then to accept a spell of slower, messier growth while new engines spin up. Few patrons volunteer for marginalization.

Ideology reinforces the inertia. Since 2020, virtually every major policy document has folded economic goals into a “comprehensive national security” frame that prizes self-reliance in critical technologies over consumer comfort. Advanced manufacturing, electric-vehicle supply chains, and semiconductor fabs are cast as bulwarks against foreign pressure; restaurants and daycare centers are not. Moving resources to consumers would require steering capital away from these favored projects, loosening the Party’s tight hand on allocation, and weathering the disruptive churn that freer markets bring; all after an expensive, politically fraught transition. The leadership may want fuller malls, yet the system it has built still rewards humming factory floors over swarming food courts or flashy new cars.

The views and information contained in this article are the author’s own and do not necessarily represent those of The Asia Cable.

This episode was a public display of China’s broad and arbitrary crackdown on dissent, in this case aimed at one person. But how many others were discouraged by it? Most people who draw the attention of the Chinese state aren’t jailed; they are simply silenced. They vanish from view, stop organizing, stop speaking, or are quietly pushed out of public life.

The true power of the Chinese state lies in its ability to cultivate fear — to force people to censor themselves under the weight of structured uncertainty. That fear is sustained by a daily system of warnings, monitoring, and quiet intimidation, starting with the most routine encounters.

The Chinese Toolkit of Silent Repression

Informal Detentions and Forced Disappearances:

Chinese authorities frequently use informal contact to intimidate people. One of the most common tactics is the so-called “invitation to tea” (“被喝茶”), a euphemism for police summons or interrogation. These meetings are rarely optional or formalized and may even be conducted regularly, serving as check-ins to ensure outspoken individuals are acting “responsibly.”

Adding to the legal ambiguity, under China’s expansive counter-espionage law, police can detain individuals without charges for anything deemed a national security threat. Detention can stem from working at a foreign consultancy, criticizing the economy online, or being connected to the wrong people.

Following the “White Paper” protests against pandemic controls in late 2022, several protesters went missing in what one rights activist described to the BBC as “killing the chicken to scare the monkeys.” The disappearance of these activists into China’s elusive and unaccountable national security apparatus sent a message to any would-be activists and friends of the detained: try this again, and you may be next.

Social Credit, Blacklists, and Big Data:

According to an analysis in the Journal of Contemporary China in 2023, the Chinese state relies on a combination of state apparatuses and the “co-option” of individuals’ social connections for social control. Officially, people can be quietly blacklisted from travel, employment, or financial tools through the Social Credit Blacklist System, all without being charged or even notified. Social ostracization can follow, with impacted individuals’ social networks treating them (or even their children) differently.

China’s efforts to centralize data and monitor behavior also continue to expand. A recent example is the rollout of a “Cyber ID” mobile app, which integrates identification, service access, and personal tracking. The mass adoption of this app, which state media continues to promote, would transition citizen data from multiple platforms to a central Ministry of Public Security (MPS) database. Officials have suggested that individuals who opt out of the system might be excluded from essential services, including public transit and highway access. Even without widespread adoption, the app signals where China’s social control system is heading.

Professional Reach:

Beyond infrastructure and personal data, the state’s influence reaches deep into professional life, shaping careers and academic work through ideological oversight. Since Xi Jinping’s rise to power in 2012, the Chinese Communist Party has intensified efforts to embed itself across private and academic life. Under Xi’s “party-building” initiative, the state has pushed for “complete coverage” of Party cells (including embedded Party secretaries) in the country’s top 500 private firms. This growing presence has given the Party increased influence over internal business operations and ideological alignment. Entrepreneurs are now encouraged to “undergo further education and monitoring” to ensure they remain aligned with Party objectives.

A recent China Journal study highlighted how this pressure extends to China’s academic sector. Researchers found that since Xi took power, self-censorship has intensified, with academics avoiding politically sensitive topics to steer clear of scrutiny. Conversations with institutional Party secretaries have become a routine concern, as Party committees play a direct role in faculty evaluations and promotions. For many professionals, compliance is about career survival.

Family Pressure and Community Surveillance:

For those who step outside approved boundaries, the pressure often extends beyond the individual. Family members and communities can become tools of control, and China’s repression does not stop at its borders. Through a system of transnational pressure and family-based intimidation, authorities often target the relatives of critics living abroad. Chinese citizens who speak out overseas may see their family members back home harassed, surveilled, or punished.

According to an Amnesty International report on Chinese students overseas, such retaliation can include job loss, travel restrictions, or loss of access to public benefits for their families. In many cases, students and activists abroad reported living in fear, self-censoring not because of direct legal risk, but because the cost would be borne by their families. As one student studying in Europe described, “Police call my parents quite often to harass them and don’t allow them to travel abroad easily.”

This strategy of coercion is particularly visible in the treatment of China’s ethnic Uyghur diaspora. A 2021 Uyghur Human Rights Project report found that many Uyghurs living overseas experienced digital threats, harassment, and coercion tied to their advocacy work. Respondents said their relatives in Xinjiang were threatened or detained due to their overseas speech.

Exit Bans:

Inside China, this pressure can take an even more direct form. For some, the state can simply prevent them from leaving the country. Each year, countless individuals arrive at Chinese airports for international flights only to be stopped at the exit gate. They are told authorities have placed a hold on their ability to leave the country. Often, there is no warrant or criminal case associated with this quiet bureaucratic decision.

The reasons for exit bans vary. Some face unresolved civil disputes. Others are relatives of overseas dissidents. Others attract local law enforcement scrutiny for reasons that are never clearly explained. For foreign nationals, this means being trapped in China with no legal conviction but no clear path home. For Chinese citizens, especially those with ties to activists, the idea of leaving the country becomes a distant hope. Digital communications are monitored, and anything from a private message to a casual post can be used to justify denying departure.

A Reality in China, A Warning for the World

These methods of quiet control form the core of China’s domestic repression. Increasingly, they are being studied (and in some cases adopted) by other governments. Experts warn that China is already “pioneering a new brand of digital authoritarianism,” exporting both surveillance tools and the norms that justify them. But the greater danger remains the normalization of repression without overt force: control through fear, ambiguity, and quiet pressure.

China’s model is effective because of its subtlety. The state rarely needs to arrest someone to silence them. It relies instead on legal gray areas, social pressure, and the constant potential for punishment. This kind of repression is more difficult to detect and easier to replicate.

As more governments look for ways to manage dissent and information, China’s approach may quietly gain appeal. The risk is that it becomes a model not by force, but by default. And in that quiet, what vanishes first is both dissent and the space even to imagine it.

Editorial contributions by Rachael Rhine Milliard

The views and information contained in this article are the author’s own and do not necessarily represent those of The Asia Cable.

What actions has she done? Personally calling Samdech Hun Sen, the President of Cambodia’s Senate, a sort of deal-cutting, that is. With the PM’s explicit use of language that sounds treasonous at best for any politician to be talking diplomatically.

During the leaked phone call, the prime minister was heard addressing Hun Sen as “uncle” and repeatedly urging Hun Sen not to “listen to those people from the opposite side like the Commander of the 2nd Army Area.”

With the Thai-Cambodian border disputes ongoing and intensifying by the day, Thai politics is now at a major turn of events. Will the prime minister resign? Will she dissolve the parliament and call for an election? Or will there be another coup d’état? Here are the timelines of how this leaked phone call saga unfolded and what is yet to come for the 31st Prime Minister of Thailand.

Timeline of Events

• June 15

  The private call between PM Paetongtarn and Hun Sen allegedly takes place on June 15th. The conversation lasts around 17 minutes, in which she addresses him as “uncle” and critiques a Thai army commander as “an opponent” who “just wants to look cool.”

• June 17

  A condensed audio snippet of approximately 9 minutes leaks and begins to circulate publicly. Within 24 hours, the Bhumjaithai Party, a major party in the Thai government’s coalition, exits the coalition. The party cites the call's negative impact on Thailand’s sovereignty and on preserving the military’s dignity.

• June 18

  Hun Sen posts the full 17 minutes and 6 seconds call on his Facebook page. He also admits to sharing it with about 80 officials in an effort to prevent misunderstandings.

• June 19

  PM Paetongtarn issues a public apology in a press conference at the Government House in Bangkok. She acknowledges the leak and emphasises it was on her personal phone, not diplomatic channels. She vows full support for the military and says she will avoid private conversations with Hun Sen in the future. In the meantime, the opposition parties call for her resignation or the dissolution of parliament.

As June 19 goes by, impeachment motions began to circulate around Thailand as an open complaint was filed for the impeachment of the prime minister by a former Senator, and the Senate officially opened an inquiry into the prime minister’s ethical misconduct.

Hanging By a Thread

By June 20, most of the government’s coalition parties had held their emergency meeting. Excluding the Bhumjaithai Party with its 69 MPs, the other major coalition parties consist of: the United Nation Party, the Kla Tham Party, the Prachachart Party, the Chart Thai Pattana Party, and the Democrat Party. All of those parties except the United Nation Party have expressed solidarity and their intention to move forward with the current coalition. The United Nation Party concluded their emergency meeting at 7 p.m. local time, but none of the MPs nor the party leader gave any statement to the press, leading to rumors about a probable deal-cutting with the ruling Pheu Thai Party and with the PM herself.

This puts the government at a very thin majority in the parliament, and should the United Nation choose to quit the coalition, the administration will become a minority government, which will indirectly force the dissolution of parliament, as many experts expect.

What Happens Now?

The leaked phone call has shaken the current administration with an intensity it has never seen before since the PM took office in 2023. Although there have been multiple speculations, including a possibility of a coup, right now, there are three possible paths the event could take.

• Keep Calm and Carry On
  The PM can choose to carry on with the current coalition with the thin majority in parliament for the rest of the term. This imposes the great difficulty of having to lead a near-minority government with very little approval from the general public.

• Dissolve parliament
  The PM could dissolve parliament and call for a new, snap election within a 45 to 60-day period.

• Resign
  The PM could choose to resign from office. This means that the parliament will have to vote to select the new PM from the existing PM candidate pools.

With the current state of Thai politics in limbo, awaiting decisions to be made and whether the administration will sway away from this impending storm both internal and external, the developments from Thailand represent a drastic change in Thai politics, the stage of which has already been full of twists, turns, and conflicts of interests.

This leaked audio snippet has sent shockwaves across the region, where in Thailand, the call was perceived to be treasonous, and the general public has called on the prime minister to resign or dissolve the parliament.

Below is a raw translation of the conversation based on a transcript published by The Standard. This translation neither accounts for nor adjusts for English grammar. Through an independent translator, the full length of the call was 17 minutes and 9 seconds.

PM Paetongtarn: Please ask him, how is he doing, how is his health?

Samdech Hun Sen: All is well.

PM Paetongtarn: Today, I want to discuss about our border dispute. I understand that both Mr. Hun Sen and I myself want both of our countries to be at peace. I don’t want uncle (the PM was heard addressing Mr. Hun Sen as ‘uncle’ in English during the call) to listen to those who are in the opposite party from us. This is because when you listen to those people from the opposite side like the Commander of the 2nd Army Area (the commander in charge when the conflict broke out in May 2025), since they are from the opposite side, whatever they said may disturb you or may even made you angry when you listen to them. (It is unclear what the PM meant when addressing the Commander as being from the ‘opposite side’)

In truth, this is none of my intention. Right now, he (the Commander) just wants to look cool so he had said whatever it is that does not reflects what is in the best interest between our two countries. Honestly, what I want is the peace and happiness, as it were before this conflict happened. It would be appreciated if Mr. Hun Sen could show empathy for this niece because right now, the Thai people has been complaining that I should go and be Cambodia’s Prime Minister instead (the PM was heard laughing). Please, whatever it is that you need, name them I will settle them out for you.

Samdech Hun Sen: First of all, I want the borders reopened, just like before.

PM Paetongtarn: Okay, same here.

Samdech Hun Sen: Honestly, about the border closure, Thailand initiated it first. Therefore, if Thailand will withdraw its closure orders, Cambodia will do so too. Open as usual. This is because we are already disappointed with the conflict at Chong Bok. We have tried to accommodate what the Thai side wanted, we’ve said okay, and we have acted so accordingly. But please, we wish for the situation to return to normal. We have withdrawn, we have adjusted our troops, but Thailand still pulls up the border closure to pressure us.

With that being said, if Madame PM could withdraw orders regarding the border closure, Cambodia will then pull back on Thai agricultural product bans. Everything else, we will withdraw too.

PM Paetongtarn: You see, right now, the administration has been subjected to immense amount of attacks and criticisms. This is because when both you and Mr. Hun Manet (Cambodia’s Prime Minister) have mentioned the electricity and waterworks cut-out from Thailand, in truth, those are only words from foreign press’ reports on what could happen next for Thailand, like the possible retaliatory actions we may take, it doesn’t mean that we will actually implement them. Honestly, we could make it okay for both sides. Like we may have to altogether echoes out that we have reached an agreement. My administration have already met and decided that we can open everything back up to normal. It could be between me and Mr. Hun Manet or something along the lines of that, make it seems like we have already had a joint discussion and that both sides wants situations to become normal again, like this.

Translator (asking the PM): So PM Ing (Paetongtarn’s nickname) wants Cambodia’s Prime Minister to post on social media, right?

PM Paetongtarn: Yes, it could be a social media post or anything, I am accepting suggestions from Mr. Hun Sen too, like we need a join agreement. Because right now, I am taking in a lot of criticisms.

Samdech Hun Sen: Honestly, I am the one who is more concerned about the stability, more than mister prime minister himself. But it is these soldiers that have shut down the border crossing first, they initiated first, pressured us first, therefore you must make sure that you are ready to talk with the army about reopening the borders.

PM Paetongtarn: I am ready to do that.

Translator: All acknowledged from the Cambodian side, we will follow suit.

PM Paetongtarn: Of course, we will open [the borders] for you. But as I said, it must be a mutual agreement that we both open our borders. If that’s not the case, if I will say okay, I give in everything, I will be the one who pays the price because right now [the criticisms] have reached stuff that aren’t related to the border crossings.

Samdech Hun Sen: Well, Madame PM does not want to have a joint discussion because it was the soldiers that have began this whole ordeal in the first place. They have tricked us, told us to adjust our troops, once we did adjust our troops at Chong Bok, things must turn to normal. We have had discussions about this. This means that if we adjust this there, everything else must be settled too. Settled with soldiers, everything settled and done. This is like you are smacking me in my face, I would like for Madame PM to please reconsider regarding this matter as well.

Translator (adding): This is because Mr. Hun Sen is a true gentleman; he holds true to his words. When he said that Thailand was the one to initiated first and tricked us first, us on the Cambodian side has taken a lot of hits too. We also have the general public that has hit us hard too. Therefore, if Thailand initiate all of [de-escalation initiatives], within 5 hours, everything will turn to normal. My dear niece, uncle can tell you that without the promise on troops adjustment, if everything return to normal on our end, but the Thai soldiers aren’t reopening the borders, we will move forward with the agricultural ban to pressure those soldiers.

Samdech Hun Sen: As I said to you before, when we adjusted our troops at Chong Bok, we thought we could end this with mutual agreement but then the Thai soldiers closed the borders. With that being said, it wouldn’t look good for us to go and have more discussion with you, it looks extremely inappropriate on our end. The Thai soldiers must de-escalate first and then within 5 hours, we will follow suit and everything will return to normal. I am a gentleman.

PM Paetongtarn: I will talk with the Ministry of Defence again. But honestly, when I was talking to the translator, I want to convey that whatever it is that Mr. Hun Sen wants, please let me know. We can both agree as sometimes the post you made on Facebook are … (the silence here can be assumed that the mentioned Facebook posts are not well-intentioned)

Right now, the administration is at its weakest, ever since I took to the office, it is this matter on Cambodia which I myself chose to not respond to any allegations posed to me yet. This is because I both love and respect Mr. Hun Sen and therefore if there is anything you want, please tell me directly. Just lift up the phone and tell me. Whatever it is that isn’t news will not become news, what you saw leaked was the product of the press, when you haven’t talk with me one-on-one, when we talk as a group, these things can leak. If you talk to me personally one-on-one, there’s no way this could leak anyways.

Now, since I don’t want things like this to happen, I will bring this matter to the Defence Ministry. If they’ll say that the Thai soldiers closed the borders first or something along the lines of that, I will talk with them on whatever it is that will work with you. I will forward my message through our translator to inform you about the final matter. You see, the public doesn’t wished well on us. It seems as if we are having personal fights right now. Leaders of the new generation shouldn’t host any wars, if people of the new generation have wars, it will be bad for both sides, along with Mr. Hun Manet, he is the leader of the new generation too, no?

Samdech Hun Sen: Mr. Prime Minister have said that in his social media posts, he have only been informing the public about what is happening. It does not affect Thailand much. But not, it is fine, if Madame PM can settle the border reopening, we agree, we have nothing against each other anymore. The end.

PM Paetongtarn: Of course, I will go and talk with the Defence Ministry and ask for their confirmation because I will have to talk with our army first. But of course, I will order it right away. I think we can wait until I am 100% sure and then will report back to you. I don’t want it to not be 100% sure and inform you first. Really, we can manage this.

Translator (asking to the PM): Does Madame PM have anything else to ask?

PM Paetongtarn: Nope, nothing else. Do you think we have any other matter at hand? No? Thank you, Mr. Hun Sen.

Samdech Hun Sen: Let me confirm again that Madame PM, we do not negotiate with you about the borders because Thailand initiated first, and then tricked us to adjust our troops, tricked us that if we adjust our troops, everything will return to normal. Then the Thai soldiers closed the borders therefore Thai soldiers must cancel border closure. Once they did, Cambodia will follow suit, as usual. Everything will then turn to normal. Done.

PM Paetongtarn: Okay, of course. I will update you more once I got more updates.

Translator (adding): Mr. Hun Sen is waiting for you, Madame PM, whenever you have settled the matter.

PM Paetongtarn: Got it. Thank you so much. Thank you, Mr. Hun Sen.

Underscoring the uncertainty Mongolia is now projecting to the rest of the world, Oyun-Erdene’s resignation came just hours after the end of Turkmen President Serdar Berdimuhamedow’s official visit to the country, the first such visit by a Turkmen president since the two countries established diplomatic relations in 1992. During a session of parliament convened on June 2 that ran into the early morning hours of June 3, PM Oyun-Erdene, President Ukhnaagiin Khurelsukh, and a senior member of the Democratic Party, Odon Tsogtgerel, all spoke before the parliamentary vote of confidence took place.

In defense of his performance as prime minister, Oyun-Erdene touted the numerous projects his coalition government had kickstarted, many of them stalled for decades before the coalition spearheaded their approval, including a new hydropower plant, energy sector reform and price liberalization, a joint uranium mining project with France, and a cross-border railway project with China. Oyun-Erdene also reminded parliament that, during his tenure as prime minister, “Mongolia’s export revenues and overall economy have doubled, GDP has risen from MNT [(Tugrik)] 37.4 trillion to MNT 80 trillion, GDP per capita has steadily increased from USD 4,128 to USD 6,898 over the past three years, the sovereign credit rating has advanced by one level, the Government’s standing with international financial institutions has strengthened, and investor interest in Mongolia has grown.”

In a speech analyst Amar Adiya characterized as ‘the clearest sign yet of deep fractures within the ruling Mongolian People’s Party,’ President Khurelsukh ‘reminded the members of the parliament that they were elected to represent the people, not a single political figure,’ essentially implying to parliament that they should oust Oyun-Erdene. This came as a shock not only because Khurelsukh and Oyun-Erdene are both MPP members, but also because Oyun-Erdene had been seen as Khurelsukh’s protege at one time. During his speech, President Khurelsukh also emphasized that he will not seek to amend the Mongolian constitution to make possible a currently-illegal second presidential term or steer the country toward adopting a more presidential system, which was important given ‘increased suspicion of [a constitutional] amendment that might reshape the presidency’ among opposition politicians and analysts.

Speaking on behalf of the Democratic Party, which controls the second-most seats in Mongolia’s parliament and was one of three separate parties that made up the now-defunct coalition headed by the MPP, Tsogtgerel indicated that all members of parliament from the Democratic Party would abstain from the confidence vote as a demonstration of the party’s lack of confidence in the prime minister, since the party saw the vote ‘as an unprincipled move that misleads the public’ and fails to ‘[address] citizens’ legitimate demands to disclose [Oyun-Erdene] and his affiliates’ expenditures and lawful sources of income.’ Tsogtgerel went on to explain that the MDP’s May 21 decision to expel the Democratic Party from the coalition government, effectively disbanding it, was a ‘flagrant violation’ of the inter-party agreement on which the coalition was established, though this act was another explicit demand outlined by protesters.

After discussions ended, the vote of confidence was finally held via secret ballot. 82 of Mongolia’s 126 parliament members voted, with the overwhelming majority of abstentions coming from the Democratic Party’s 42 parliament members. 44 members voted in favor of Oyun-Erdene, while 38 voted for his ouster. The prime minister fell considerably short of the 64 votes he needed to survive the confidence vote, effectively bringing an end to Oyun-Erdene’s premiership.

Currently carrying out a caretaker role until a successor is chosen, the nearly four-and-a-half years Oyun-Erdene has spent as prime minister make him the longest-serving prime minister in democratic Mongolia’s more than 30-year history. Although the Mongolian economy has evolved positively under his premiership, the Mongolian people have signalled a desire for more than just economic stewardship from their elected officials; transparency and ethical comportment are apparently just as important as economic development to Mongolian citizens. Going forward, Oyun-Erdene’s replacement must prioritize propriety just as highly as economic progress or risk facing a fate similar to the outgoing prime minister’s.

The views and information contained in this article are the author’s own and do not necessarily represent those of The Asia Cable.

The main route connects cities in China, such as Xi'an and Urumqi, to dry ports near Tehran, including at Aprin. The rail route stretches approximately 10,400 kilometers (6,500 miles), traversing Kazakhstan, Turkmenistan, and Uzbekistan, with the ability to make stops in Kyrgyzstan and Tajikistan, as well. This land route has the potential to dramatically reduce delivery times from 30-40 days by sea to approximately 15 days by rail.

Geopolitical Significance

This rail route is intended to significantly increase trade and economic cooperation between China and Iran. For Iran, the overland route means facilitating the export of Iranian oil to China, offering a vital means to bypass existing U.S. economic sanctions. For China, it is a crucial component of the BRI, which aims to connect Asia to Europe via a transcontinental rail network. For both, its development is a significant geopolitical move as it strengthens the China-Iran nexus and has the potential, in theory, to shift global power dynamics by reducing reliance on Western-controlled maritime trade routes such as the Strait of Malacca, which is a chokepoint and is subject to U.S. naval presence. This provides China and Iran with a more secure and less vulnerable trade pathway.

While the core China-Iran route is operational for freight, there are ongoing projects and proposals to expand and improve the rail network within Iran, upgrade sections for passenger service, and connect to other regions. This includes projects like the Khaf-Herat railway connecting Iran to Afghanistan, and other high-speed rail lines within Iran. China has been investing heavily in Iranian infrastructure as part of the BRI, so much of the necessary investment for expansion will likely come from the $400 billion economic agreement signed between China and Iran in 2021.

The new China-Iran railway hopes to be more than just a trade route. Ultimately, it aims to reshape global trade flows, enhance regional connectivity, and reinforce the economic and geopolitical ties between China and Iran, especially in the face of external pressures. However, there is much more to international trade than just connecting railroad networks.

Operational Constraints

While the new rail line connecting China and Iran offers significant strategic and economic advantages, operating such a long-distance international freight railway presents a multitude of complex operational challenges. Infrastructure compatibility, for instance, poses significant hurdles.

While China and Iran generally use standard gauge 1,435 mm railroad tracks, the Central Asian countries in between (i.e., Kazakhstan, Turkmenistan, and Uzbekistan) use the broader Russian gauge 1,520 mm railroad tracks. This necessitates costly and time-consuming transshipment at border points. Cargo must either be moved from one train to another due to different track widths, or the railroads must use expensive "gauge-changing" bogies, which can be unreliable and slow down operations.

Additionally, different countries often employ varying signaling and communication systems. This requires trains to either carry multiple onboard systems or for frequent locomotive changes at borders, adding to delays and operational complexity. If parts of the route are electrified, differences in voltage and frequency standards require locomotive changes or specialized multi-system locomotives.

Regulatory Obstacles

Crossing multiple international borders also involves complex and often varying customs procedures, documentation requirements, and inspections. This can lead to significant delays and administrative burdens. Harmonizing these procedures across all transit countries is crucial, but difficult to achieve. Since each country has its own legal framework governing rail transport, liability, and tariffs, it is essential to establish unified waybills, common rules for liability for loss or damage, and competitive, consistent tariffs across the entire route to ensure efficiency and attract shippers.

Discussions are ongoing to agree on competitive tariffs and operational standards, but both agreement and subsequent implementation will take time. The same is true of varying national safety standards and security protocols, which require additional checks and compliance measures at borders.

Furthermore, training staff across multiple countries to a consistent standard of operation, maintenance, and safety is challenging for several reasons, including language barriers, different work cultures, and varying skill levels.

Logistical Challenges

Coordinating train schedules across multiple national rail operators is extremely complicated, and delays in one section can cascade and affect the entire line.

Since the route traverses diverse geographical regions, including deserts and mountains, extreme weather conditions can be expected to disrupt operations and require specialized maintenance. Ensuring consistent standards and rapid repair capabilities across such a long and multi-jurisdictional route is vital for reliability, but access to spare parts and skilled personnel can vary.

While the rail line aims to increase capacity, managing fluctuating demand, particularly during peak seasons, and ensuring sufficient rolling stock and locomotive availability poses a continuous challenge.

The quality and capacity of rail infrastructure can also vary significantly across different countries. Bottlenecks at certain sections, aging infrastructure, or single-track segments can limit overall speed and volume. Upgrading these sections requires substantial investment and coordination.

Economic Inefficiency

Sustained investment is required for maintenance, upgrades, and expansion of the rail network across all participating countries. Securing and coordinating this funding will be a significant challenge due to dynamic economic circumstances and varying priorities.

The rail line is intended, in part, to circumvent U.S. sanctions against Iran. However, the existence of such sanctions can still pose indirect challenges, impacting financial transactions and even the willingness of international partners to fully engage.

The rail line also competes with established maritime routes. Despite longer transit times, ocean shipping offers greater capacity and lower per-unit costs for certain types of cargo. The competitiveness of these railway shipping routes, therefore, depends on their ability to consistently deliver on both speed and cost.

While considered more secure than maritime routes in some respects, any land-based international route can still face security risks such as piracy or regional instability, which require further overhead costs for insurance.

Despite these challenges, the strategic impetus and long-term vision behind the China-Iran rail line, as part of the broader Belt and Road Initiative, suggest that efforts will continue to be made to overcome these operational hurdles. That being said, successful solutions will have to involve a combination of technical upgrades, diplomatic agreements, standardized protocols, and significant financial commitments simply to function as designed, let alone to shift the balance of global power dynamics.

Editorial contributions by Rachael Rhine Milliard

The views and information contained in this article are the author’s own and do not necessarily represent those of The Asia Cable.

Born in Jeonju-si in 1949, Han was briefly conscripted into the South Korean military before graduating from Seoul National University with a degree in economics. While in school, he received the prestigious Chief Justice Award and finished at the top of his class. Han continued his education in economics at Harvard University, where he later graduated with his doctorate in 1984.

After returning to South Korea, Han’s career quickly took off. After serving as Director of the Ajou Trade Division, his climb up the political ladder took him to several different positions. These included ambassador to the United States, minister of finance, and head of the Korea International Trade Association. In 2007, he briefly served as Prime Minister under President Roh Moo-hyun.

In 2022, President-elect Yoon Suk-yeol selected Han Duck-soo as his Prime Minister, prompting a return to power that had been decades in the making. At 72, the incoming premier was one of the most experienced politicians to ever hold the post; a key factor in Yoon’s decision. Throughout Yoon’s administration, Han played a key role in shepherding pieces of legislation through the parliamentary system, as is customary for his position.

"The new government must pave the way for an economic rebound amid difficulties both inside and outside of the country and thoroughly prepare for an era in which the economy and national security together emerge as key tasks the government must handle," Yoon told the press after the announcement. "Han is a qualified nominee who can successfully coordinate the Cabinet and address pending national tasks based on his rich experience."

Despite the temporary nature of his position, Han has so far led an active presidency. On December 19, Han vetoed six pieces of legislation, including four agricultural laws and a bill that would have required private companies to hand over personal user data to government officials upon request.

“Our Constitution stipulates that citizens' rights may only be restricted to the minimum extent necessary when there is reasonable cause in legislation. There is a risk of infringing on individuals' rights to privacy and freedom of expression, including the right to protect personal information,” Han told the media.

In late December, leaders in the Democratic Party, South Korea’s main opposition bloc, vowed to open up impeachment proceedings against Han as well. Besides concerns that the then Prime Minister may have been covertly involved in Yoon’s martial declaration, the acting president has refused to move forward with two pieces of legislation aimed at investigating his former boss.

“We will immediately begin impeachment proceedings against acting President and Prime Minister Han Duck-soo," Rep. Park Chan-dae, a prominent figure in the Democratic Party, told reporters. "There is no other way to interpret this than (as a tactic) to buy time and prolong the insurrection,"

On Friday (Dec. 27) morning, the South Korean parliament voted to impeach Han with an astonishingly bipartisan 192-0 vote, with the ruling People Power Party, to which both Han and Yoon belong, boycotting the measure. This vote means Han is suspended from executing the duties of the presidency pending a review of the impeachment by the country’s Constitutional Court, which is already reviewing the recent impeachment of Yoon.

However, this leaves South Korea entirely awash in uncharted waters. While Seoul has seen both presidential impeachments and even criminal convictions before, removing the Prime Minister from his presidential post would further complicate the already murky and untested constitutional line of succession. In any case, South Korean law dictates that a presidential election be held within 60 days of a successful impeachment, making it highly unlikely that Han would’ve lasted long in the role regardless.

Effective Friday, Choi Sang-mok, minister of economy and finance, has assumed the duties of both acting president and acting prime minister.

Takeshi Iwaya, Foreign Minister

After previously serving as defense minister, Mr. Iwaya makes his return to government in a new role at the Foreign Office. Considering his background, the representative from Ōita's third district will soon bring a much more conservative vision to Japanese foreign policy as he begins his term, more akin to the politics espoused by his new boss. 

Born in 1957, Iwaya is the son of a former assembly member, Kei Iwaya. A graduate of Waseda University, the politician’s son studied political science and economics in college. First elected in 1987, Iwaya served in a variety of government and party roles throughout his career, including deputy secretary-general of the Liberal Democratic Party (LDP) and director of the National Defense Division of the LDP. In 2018, Iwaya served briefly as defense minister under then-Prime Minister Shinzō Abe. 

Mr. Iwaya was selected despite his ties to recent party scandals, suggesting that the personal and professional connection between him and Ishiba is strong. In addition, the symbolism behind choosing a former defense official to the nation’s top diplomatic post is telling. As tensions with China and North Korea continue to rise, Iwaya’s selection confirms that Ishiba is willing to pursue a more aggressive foreign policy than his predecessor. 

Gen Nakatani, Defense Minister

A former director general of the Japan Defense Agency, Nakatani’s selection further solidifies Ishiba’s rightward foreign policy shift. He also brings extensive political experience to the cabinet; Nakatani has held various roles in government since 1990. If the new prime minister is seeking legitimacy with his cabinet selections, then there are few choices better than Gen Nakatani.

Graduating from the National Defense Academy in 1980, Nakatani joined the Japanese military and served four years. Elected to the House of Representatives in 1990, he served in the legislature until 2014. This isn’t the first time Nakatani has held a top defense post. He was previously minister of state for defense in 2001. 

Nakatani is one of the most prominent voices calling for a stronger policy on China in Japanese politics. In 2021, he co-signed a letter calling on the West to adopt a significantly stronger approach towards Beijing. "Because the actions of the People’s Republic of China are affecting global politics and our societies like never before, the G7 must stand up for the democratic principles we share and believe in," the letter reads in an excerpt from Politico. "We urgently call our leaders to unite around a plan of action that addresses internal and external PRC behavior which we consider contradictory to international standards."

By selecting a China-Hawk to lead the defense ministry, Prime Minister Ishiba sends a clear message as to the direction his government will be taking relations with Beijing. Along with the selection of Iwaya to lead the foreign office, it demonstrates that Ishiba’s conservative tendencies on international affairs will most likely be fully realized during his time in office. 

Katsunobu Kato, Finance Minister 

Mr. Kato is another figure whose presence in the cabinet brings decades of experience. After previously serving as minister of health and chief cabinet secretary, Kato joins Ishiba’s government in a decidedly different role; finance minister. 

Born in Tokyo, Kato is the son of a car manufacturer CEO and grandson of a former assemblyman. After graduating from university in 1979, he served in a variety of revenue and budgeting roles before joining the House of Representatives. Kato also briefly served as minister of state for measures for declining birthrate under Shinzō Abe. 

Kato ran against Ishiba in the race for party leadership in September, and joining his former rival’s cabinet is assuredly partially a calculated political move to promote unity in the fractured LDP. However, as a supporter of Abenomics, the popular economic ideology of former Prime Minister Abe, Kato’s selection also hints at a renewal of Japan’s previous economic policy characterized by increased government spending.

Seeking a Mandate

Only days after taking office, Ishiba has already called for a snap election on October 27. It’s a gamble that the career bureaucrat has doubtless carefully calculated, considering his party’s traditional success in Japanese politics. Since 1955, except for two brief stints in the opposition, the LDP has continuously held power, exercising a level of influence unprecedented for most modern democratic systems. Given the history, there’s little reason for Ishiba to worry about his coalition’s chances in the upcoming election. However, there’s more at play besides traditional majorities and parliamentary procedure. By calling for an election after nominating a cabinet filled with former defense officials, Ishiba is signaling a willingness to forge his own path. Undoubtedly, the new prime minister is seeking to balance his government’s need for a popular mandate with a desire to forge a new path to present to a weary Japanese public.

Editorial contributions by Rachael Rhine Milliard

Primarily consisting of business experts appointed to an economic recovery advisory panel, Shinawatra’s picks sent a resounding message as to where she intends to steer the country in the coming months. Prominent among these appointments was economist Supavud Saicheua, Chairman of the National Economic and Social Development Council, and Tongthong Chandransu, a member of the previous government. Other members include Surapong Suebwonglee and Phongthep Thepkanjana. Pansak Vinyaratn will lead the panel. An impressive collection of powerful political players, most of Shinawatra’s first major slate of cabinet selections have one thing in common: they served in her aunt’s and father’s governments.”

Shinawatra is the youngest Prime Minister in the country’s history, but she’s also an heiress to its most powerful political dynasty. Her father, Thaksin Shinawatra, served as Prime Minister from 2001-2005. Her aunt Yingluck served from 2011-2014. A graduate of Chulalongkorn University, Ms. Shinawatra helped run her family’s hotel business before joining politics. Elected on August 16th, the House of Representatives supported her candidacy 319-145, after her coalition’s excellent performance in the general election. “I have a solid team, a team that once was a government, once served the people, once pushed policies successfully,” she said in an interview last year, according to the New York Times. “That made me dare to say that I am ready.”

Ms. Shinawatra’s confidence in her government’s abilities is a good sign, particularly when considering the nature of the national challenges that she has inherited. Average household debt is up nearly 10% from last year, with a survey by the University of the Thai Chamber of Commerce showing debt levels at the highest rate since 2009. Low fertility rates and a rapidly aging population have only confounded the issue, discouraging younger generations from settling down and starting their own families. It is an issue that is becoming increasingly common in Asia’s largest economies, especially in South Korea and Japan. In addition, the cost of living has only continued to rise in Thailand, despite an international image of affordability.

The new Prime Minister also inherits a delicate political position. Thai politics are notoriously unstable, and despite recent political reforms, that reputation is still very much justified. It is not at all uncommon for political failures to ultimately result in career-ending consequences. Her predecessor, Srettha Thavisin, was ousted by the Constitutional Court on corruption charges, plunging the country into turmoil that ended in Shinawatra’s elevation to the nation’s highest office. It is a fate that Ms. Shinawatra is accustomed to witnessing; both her father and aunt were also removed during their time in office. Thaksin Shinawatra was found guilty in a real estate development scheme, whereas Yingluck Shinawatra was removed in a military coup in 2014.

Prime Minister Shinawatra’s team is made up of capable bureaucrats with the experience and training necessary to tackle Thailand’s economic hardships. In many ways, this is precisely what Bangkok needs. At this critical juncture, economic recovery might require experts who can act decisively before the situation deteriorates further. However, they are also reflective of a government style that looks strikingly similar to that of her father and aunt. If Thailand is truly ready to move past the political scandals and drama of the last several decades, change starts with those serving in Bangkok. So far, Shinawatra has shown a willingness to continue with the legacy created by her father and aunt, a decision that will ultimately be evaluated by the voters. However, in the interim, it poses serious questions as to her ability to implement the civic and political reforms necessary to return Thailand to the days of functioning democracy.

Editorial contributions by Rachael Rhine Milliard

It is a crisis of demographics as much as it is taxes or retirement planning. South Korea has the world’s lowest fertility rate, with an average of 0.72 births per woman. In Seoul, the birth rate is even lower, only 0.55 births per woman. In addition, housing in the capital city and the surrounding metropolitan area has increasingly become unaffordable. This, combined with declining marriage rates, an unusually long workweek, and a significant gender pay gap, has created a social and cultural environment in which many Koreans feel having children is no longer an option. Put simply, the country is slowly running out of workers to keep the pension program afloat.

“Pension reform has been one of President Yoon's three main priorities since the beginning of his administration, alongside labor and education reforms,” Says Jinwan Park, a Schwarzman Scholar and columnist at the Korea Times. “In October 2023, the Health Ministry submitted recommendations to the National Assembly, which has final say over pension reform. However, these recommendations were criticized for lacking detailed scenarios.”

Founded in 1988, the NPS originally only covered businesses with at least 10 full-time employees. However, as the program became more popular, it eventually became the primary method of retirement for South Korea’s seniors. Compulsory service was extended to farmers, fishermen, and finally the majority of the population by 1999. Based out of the city of Jeonju, the organization administers its program through 112 regional offices dispersed throughout 7 regional districts. Today, it is the third-largest pension fund in the world, managing 948.7 trillion Korean wons in assets. Currently, the program manages the retirement portfolios of 22.35 million Koreans.

Like most international retirement programs, enrollment is primarily handled through the employer. Both the employer and employee have a contribution rate of 9%, and post-retirement benefits are determined based on contributions made throughout an individual’s career. Benefits can be claimed starting at 55, although discussions about raising the retirement age have persisted for years.

The program’s impending bankruptcy was originally revealed back in 2023 by Chun Byung-mok, a budget committee chairman, and the announcement quickly pushed the nation’s looming retirement crisis to the forefront of national politics. “If the current pension structure is maintained, its incomes will outpace payouts for the next 20 years but the trend will reverse from 2041,” Chun told the press in late January. “The need for pension reform has become stronger because of the deteriorating fiscal situation.”

President Yoon’s proposal, which would increase general contributions rates across the board, was introduced during a highly anticipated press conference that also covered alliances and North Korea. "Now is the time to fundamentally reform the national pension system that has the confidence of neither the elderly nor the youth," Yoon said. "A pension system that leaves the elderly poor and young people suspicious must fundamentally be reformed.” However, with an approval rating currently at 29.6 percent, President Yoon’s far-reaching proposal might already be dead in the water. In addition, it is unlikely that the opposition Democratic Party (DP), which controls Parliament, will approve the reform package without significant revisions.

“The government's latest proposal suggests a 13% contribution rate and 42% income replacement rate. This is unlikely to pass without revisions. The Ruling People’s Power Party leadership has already expressed disappointment that the recommendation doesn't incorporate a comprehensive, structural package reforming national, basic, and retirement pensions together,” says Jinwan Park. “Further complicating matters, the parties disagree on the discussion process. The PPP wants to create a special committee with equal representation from both parties, while the DP argues the process should go through the standing committee, where they hold a numerical majority.”

It is unlikely that President Yoon’s proposal will survive Parliament unscathed, however, it is a difficult step in the right direction. South Korea’s rapidly aging population places significant strain not just on its social welfare system, but its geopolitical survival as a regional power. A state that cannot adequately care for its senior citizens cannot be expected to continue being a bulwark against its competitors, particularly the likes of those in Pyongyang and Beijing. Ultimately, passing pension reform is as much about national security as it is about social welfare, and should be treated as such.

Editorial contributions by Rachael Rhine Milliard