Here’s an odd thought. What percentage of all these macro geo strategy folks were even born before the fall of the Berlin Wall? Not that they aren’t entitled to their opinion, just, well, the lived experience of the world in the 1980s does provide for an entirely unique lens on current events. Anyway, back to my scotch.

This Prof Jiang bloke is playing the Icarus card. Wings, I suspect, are beginning to melt. Or as the Chinese say 树大招风, the big tree attracts the wind. Let’s see if he’s anywhere to be found in three months time.

China Morning Missive If you are following anything about China, you know that the topic of rare earth minerals has sucked the air out of the room for the past year. Well, let me share with you that rare earths is a complete MacGuffin. Yes, access is vitally important to American industry, especially the defense sector. The focus, obsession really, on rare earths does miss the much larger issue at hand. Rare earths are but one of hundreds, probably thousands, of inputs with which American (and Europe) are dependent on China. There’s been some talk of the potential risk from China’s dominate market position in pharmaceutical APIs. The most often raised example is how 70%, perhaps more, of the active ingredients in antibiotics are sourced from China. The same holds for virtually all other medications used throughout the world with the exception of insulin and there’s a lesson to be learned there. Expect to be reading a lot more in the media about specialty chemicals in the months ahead. China already dominates the market for basic and petrochemicals and is now redoubling efforts to move up the value chain. Yet another critical layer of production inputs. These are just two examples. For me, however, the American response to all of this can best be demonstrated by an event from last week. The Department of Justice indicted four Chinese groups and six individuals for price fixing and – crucially here – restricting the supply of shipping containers. The groups in question are Chinese owned and operated and five of the six individuals are PRC nationals. I’ll leave the merits of the case to the lawyers, but what you sure as hell can’t litigate your way to solving a physical world constraint. This is Dan Wang’s entire thesis wrapped up cleanly. American lawyers versus Chinese engineers. There’s more for me to share on this topic, but let me just leave it here for now. Just know, the issue at hand isn’t as simple as “China is an unfair competitor”. There is truth to that claim, for sure, but it isn’t the core of the issue. American and Europe spent 30 years outsourcing production so corporations could improve financial results with China picking up the slack, quite willingly I might add.

CNBC

U.S. indicts four Chinese container manufacturers alleging pandemic-era price-fixing cartel

China International Marine Containers, Singamas Container Holdings, Shanghai Universal Logistics Equipment, and CXIC Group Containers colluded to c...

Did you know that there are no property taxes in China?

Started raining. Parked our bikes for a classic’s Shanghainese (late) lunch.

There are still those times when I can return to what it was like when I first arrived in Shanghai.

For those affected by the ongoing supply shock in memory chips (DRAM), expect one Chinese company - CXMT - to arrive and begin to drive down prices (and devour market share). A fantastic article here providing some detailed background as the company is set to IPO here in Shanghai. Then will come another group - YMTC - with a core focus on SSDs. If you ask me, Samsung, SK Hynix and Micron are about to face a major threat to their chips business lines.

Gasgoo Auto News

CXMT Unveils the Aggressive Expansion of Domestic Memory Chips

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China Morning Missive Need to get back to doing these more regularly. Just far too much on the docket of late. Need to prioritize more China commentary moving forward. For today, I wanted to share a few comments on reports that the UAE is driving hard with the construction of the West-East pipeline which will fully circumvent the Hormuz chock point. The UAE leadership has been touting the project and in the past day stated that construction is now 50% completed and will go into full production beginning in 2027. What isn’t raised in the media coverage or even from the UAE comments is that the Chinese are the primary contractor for the project as (tangentially) part of the Belt and Road initiative. In contrast, there were also reports in the past several days of the British government revising its plans for the High Speed Phase 2 rail line meant to traverse the entirety of England. First introduced in 2009, the project was meant to be completed by 2026 at a cost of 36 billion pounds. Now, the project is expected to cost over 100 billion pounds and won’t be operational until 2040. All developed nations, with perhaps the exception of Japan, no longer have the capabilities to build infrastructure. This will prove to be a critical issue especially for those countries that are calling for a new re-industrial age.

CNBC

UAE says new pipeline that will bypass Strait of Hormuz is nearly 50% complete

The UAE has redirected some oil exports through an existing pipeline to Fujairah, which has a maximum capacity of 1.8 million barrels per day.

Good morning from Shanghai. Always makes me laugh a bit when seeing a car such as this randomly while out for a morning stroll.

It was bound to happen. After being ignored for the better part of a decade, the business media has finally “discovered” China’s alternative to SWIFT. Not a replacement. An alternative and one that operates completely outside the prying eyes of the New York correspondent bank network. Highly recommend reading this article which, I should add, is actually from the Financial Times. https://www.dimsumdaily.hk/renminbi-use-surges-as-iran-war-boosts-cips-yuan-nears-three%E2%80%91year-high/

Putin arrives into Beijing later today. Expect there to be a great deal of commentary of the Power of Siberia 2 pipeline. The project has been under negotiation for years. Expect those negotiations to be concluded this time around. It is a massive project.

Small little joy of life. A banger of a yakitori place just across from our apartment.

Ok. Here is a modern phenomenon that I just don’t understand. Why the overwhelming and desperate need for validation from faceless strangers on the Internet? It is a cliche I know, but peace can only be achieved from within.

At roughly the very moment Trump was wheels up in Beijing heading home, the news broke that Vladimir Putin is heading to Beijing next week. For the Chinese there is no such thing as an impromptu meeting such as this. It would have been planned in advanced. The Chinese have no alliances or allegiances. Everything is a bilateral relationship and all actions are driven by divide and conquer.

South China Morning Post

Exclusive | Russia’s Putin is heading to China next week, days after Xi-Trump summit

The Russian leader’s one-day visit, tipped for May 20, is unlikely to feature the pomp and elaborate details of the US president’s trip.

Can you even imagine if the American bond market blew up while Trump was in China. Oh the irony.

A word of unsolicited advice on this week’s events in China. In advance of this week’s meeting between Xi Jinping and Donald Trump, my strong suggestion is that you ignore all commentary that will invariably be flooding traditional and social media. It is a fluid situation and no one, including myself, has a clue what to expect. The only point that I would share is how the last minute meeting in Seoul between Sec Bessent and He Lifeng plays into the expectations for the Xi-Trump summit. To the point, if such a meeting is being held this close to the Beijing summit, then means many of the key issues haven’t yet been finalized. Even if the parties can come to some sort of tacit agreement in Seoul, whatever is agreed to would still need to be vetted by Xi and his team. There simply isn’t enough time for whatever issues are being hammered out to be agreed to by the principals. Moreover, based upon the disclosed itinerary it does appear to be nothing more than a series of performative photo-ops.

So much noise out there with ongoing events so allow me to provide a genuine piece of signal. The China-Iran railway is still fully operational and the mere fact that this piece of infrastructure has been untouched tells me everything I need to know in terms of where escalatory dominance resides; Beijing. Trump and Bessent are truly heading headlong into a buzz saw next week. https://www.bloomberg.com/news/articles/2026-05-08/iran-turns-to-china-rail-link-to-try-to-bypass-us-blockade

I’d say this was perfectly timed. No we need to see how it performs and what the feedback is from the community. At first glance it would seem that this new model is undercutting the Americans on pricing. Perhaps aggressively so.

CNBC

China's DeepSeek releases preview of long-awaited V4 model as AI race intensifies

Chinese AI startup DeepSeek has released a preview version of its long awaited V4 large language model.

Again I state emphatically; American software is useless without Chinese hardware. The entire rare earths issue was nothing but the tip of a Titanic-sized iceberg. “The company makes printed circuit boards, which form the intricate electronic backbone of AI servers.” https://www.bloomberg.com/news/articles/2026-04-20/nvidia-supplier-victory-giant-set-for-debut-after-biggest-hk-listing-this-year

Downtown Shanghai and it guts me every time these entire city blocks of old 石库门, traditional lane houses from the late 19th century, are taken down.