Every Friday, Xinanigans analyzes China’s most consequential moves across geopolitics, military, economy, and propaganda, revealing Beijing’s evolving strategy and its impact on US national security.
Bottom Line: Beijing expanded rare earth export controls into a global enforcement regime, reopened a Western European influence channel through Wang Yi’s visit to Italy, institutionalized its “post-West” diplomacy via Zhao Leji’s Global Governance Initiative speech, and escalated rhetorical coercion against Taiwan’s leadership. Together, these moves show how Beijing is turning internal constraints into instruments of leverage: weaponizing interdependence, shaping global narratives, and narrowing US strategic space.
1. China Expands Global Export Controls on Rare Earths and Related Technologies
The Ministry of Commerce released Documents 61 and 62, extending rare earth export controls beyond China’s borders to include goods and technologies produced abroad using Chinese-origin materials or processes. The directives also prohibit unauthorized foreign transfers of technologies related to rare earth refining, magnet production, and recycling. The regulations take effect January 1, 2026.
Why it matters:
This marks a structural evolution in Beijing’s geoeconomic toolkit: export controls as extraterritorial instruments. It mirrors US semiconductor restrictions but weaponizes supply rather than denying technology. Instead of keeping advanced capabilities out of China, it ensures global dependence on Chinese-origin materials stays politically controllable. The timing, amid China’s ongoing economic slowdown, suggests a defensive posture, leveraging monopoly power to compensate for lost growth momentum.
Implications for US National Security:
Supply Chain Vulnerability: Expands China’s leverage over industries critical to US defense, EV, and clean-energy sectors, directly affecting CHIPS Act implementation and clean energy transition timelines.
Regulatory Precedent: Sets a model for future “reverse sanctions,” codifying coercion through administrative law.
Industrial Policy Challenge: Complicates US diversification efforts by deterring third countries from shifting supply chains away from Chinese ecosystems.
Chinese Vulnerabilities and US Counter-Opportunities:
Enforcement Limits: The global reach of the new regulations will be difficult to police; parallel trade and re-export channels offer circumvention points. Southeast Asian processing hubs, particularly in Vietnam and Malaysia, can serve as alternative routing mechanisms, while non-aligned states with weaker compliance infrastructure provide natural bypass opportunities.
Partner Backlash: States reliant on rare earth inputs - Japan, South Korea, and the EU - may accelerate joint resilience frameworks with Washington, providing openings for allied coordination and collective stockpiling initiatives.
2. Wang Yi’s Visit to Italy: Strategic Re-Entry into Europe
Foreign Minister Wang Yi met Italian Foreign Minister Antonio Tajani in Rome to commemorate 55 years of diplomatic relations and launch a “China–Italy Cooperation Mechanism 2.0.” The visit emphasized adherence to the One China principle and expanded cooperation in AI, green energy, and aerospace.
Why it matters:
Nearly two years after Italy’s withdrawal from the Belt and Road Initiative, the visit reflects Beijing’s long-term strategy of repairing influence through softer channels. By reframing engagement around innovation and environmental cooperation to circumvent BRI skepticism, China seeks to regain European access points through non-BRI channels. The focus on aerospace and AI positions Chinese firms for entry into sectors where Italy maintains significant defense industrial capacity within NATO frameworks, creating exploitable tension between Rome’s commercial appetite and alliance commitments.
Implications for US National Security:
Alliance Influence Operations: Rebuilds footholds inside NATO economies that Washington has recently reclaimed, testing alliance cohesion on technology governance.
Technology Diplomacy: Positions Chinese firms as “green” and “AI-capable” partners, challenging Western tech governance coalitions and EU digital sovereignty frameworks.
Narrative Rebalancing: Offers European governments a “middle path” framing, i.e., cooperation without confrontation, that dilutes transatlantic unity on China policy.
Chinese Vulnerabilities and US Counter-Opportunities:
Trust Deficit: European skepticism of Chinese intentions post-BRI remains high; Washington can reinforce this through transparency partnerships, de-risking incentives, and highlighting Italy’s own 2023 BRI withdrawal as a model for other member states.
Regulatory Friction: EU digital sovereignty and environmental standards constrain Chinese entry into sensitive sectors, providing policy levers for US–EU coordination. NATO defense-industrial restrictions further complicate Beijing’s entry into dual-use sectors.
3. Zhao Leji’s Address to the “Group of Friends of Neutrality”
NPC Chairman Zhao Leji delivered a keynote to the Group of Friends of Neutrality in Beijing, reaffirming Xi’s new Global Governance Initiative (GGI), positioned as the fourth major pillar following the Global Development, Security, and Civilization initiatives.
Why it matters:
The speech codifies China’s effort to reframe neutrality as a moral stance, appealing to non-aligned, post-Soviet, and Global South states wary of great-power rivalry. The GGI promotes “reform of global institutions toward fairness,” implicitly challenging US leadership in multilateral governance and shaping UN voting patterns on resolutions related to human rights, technology governance, and international norms.
Implications for US National Security:
Coalition Diversion: China uses the language of neutrality to fragment US alignment efforts, particularly in the UN and the G77 coalition of developing states, complicating vote-counting on critical resolutions.
Normative Competition: The GGI institutionalizes Beijing’s pitch for a post-liberal order anchored in state sovereignty and cultural relativism.
Institutional Entrenchment: Provides new forums for Chinese agenda-setting within global governance systems, reducing Western procedural dominance.
Chinese Vulnerabilities and US Counter-Opportunities:
Credibility Contradictions: Beijing’s neutrality rhetoric costs it credibility with partners who face direct PRC coercion: the Philippines, India, and Vietnam all experience Chinese pressure that contradicts “neutral” posturing. Washington can amplify these contradictions through strategic messaging and by elevating coerced partners’ voices in multilateral settings.
Institutional Overreach: Overlapping GDI, GSI, GCI, and GGI platforms risk bureaucratic fatigue among partners, giving Washington room to contrast China’s volume with Western effectiveness and tangible deliverables.
4. Taiwan Affairs Office Escalates Rhetoric Against Lai Ching-te
Taiwan Affairs Office spokesperson Chen Binhua labeled Taiwan’s President Lai Ching-te a “destroyer of cross-strait peace” and “creator of crisis,” with rhetoric suggesting Lai seeks confrontation “under US protection.”
Why it matters:
The language marks an escalation in Beijing’s narrative warfare. It personalizes deterrence messaging, framing Lai as both illegitimate and reckless. The tone echoes pretext-building patterns observed in pre-2022 Ukraine narratives about “provocations,” though without suggesting operational equivalence. This rhetorical intensification may set informational groundwork for intensified coercive measures ahead of Taiwan’s January 2026 local elections, which will serve as a referendum on Lai’s first year in office.
Implications for US National Security:
Crisis Management Pressure: Raises the likelihood of PLA gray-zone or information operations targeting Taiwan during periods of US electoral distraction, particularly in late 2025.
Alliance Calibration: Tests US–Japan coordination under the deterrence umbrella as rhetoric inches closer to pretext-building, requiring careful trilateral messaging discipline.
Information Framing Risk: Beijing’s portrayal of Lai as a crisis instigator complicates international messaging during escalation scenarios, pre-positioning blame narratives.
Chinese Vulnerabilities and US Counter-Opportunities:
Narrative Saturation: Beijing’s repetitive labeling risks diminishing returns; Taiwan’s public is largely inoculated against mainland rhetoric, with polling showing increased Taiwanese identity regardless of PRC messaging.
Regional Backfire: Personal attacks on Lai could strengthen Taiwan’s diplomatic outreach, particularly with middle powers wary of authoritarian messaging and increasingly concerned about coercive precedents in their own regions.
IW Spotlight
China’s gray zone tactics often hide in plain sight. Each week, I will feature one that deserves a closer look.
Punishing Pessimism: Digital Morale Control as Cognitive Warfare
The Cyberspace Administration of China launched a nationwide campaign to identify and penalize citizens posting “defeatist” or “overly negative” commentary online. Platforms were instructed to remove “emotionally harmful” content and suspend users who “undermine confidence in the Chinese dream.”
Why it matters:
The campaign extends the CCP’s control from information to emotion, treating public morale as a national security variable. By defining pessimism as subversion, Beijing is codifying psychological domain defense, preempting discontent during economic slowdown, and projecting a veneer of unity under stress. Critically, when Beijing enforces morale discipline at home, it creates institutional pressure to export that discipline through diaspora channels and digital platforms abroad, extending cognitive control beyond China’s borders.
Implications for US National Security:
Cognitive Warfare Precedent: Shows how China is weaponizing domestic morale management as part of its internal defense architecture, treating emotional resilience as strategic infrastructure.
Diaspora Signaling: Tightened morale policing often extends to overseas Chinese networks, shaping diaspora discourse and muting dissent abroad through platform moderation and community pressure.
Resilience Comparison: Highlights the CCP’s belief that emotional discipline, not transparency, ensures stability, an ideological contrast with liberal resilience models that US messaging can exploit.
Chinese Vulnerabilities and US Counter-Opportunities:
Control Saturation: Over-policing sentiment risks eroding trust in digital platforms, undermining propaganda credibility, and accelerating the shift to encrypted or offshore communication channels.
Narrative Export Limits: The framing of “emotional security” as a state responsibility is unlikely to resonate outside authoritarian contexts, offering space for US messaging on open-society resilience and the strategic advantages of genuine public morale versus manufactured consensus.
Strategic Outlook
China’s actions this week form a coherent pattern: embedding control mechanisms - legal, diplomatic, ideological, and emotional - into global and domestic structures. The new rare earth export regime turns supply chains into enforcement tools; Wang Yi’s European outreach reopens access to Western markets under softer branding; Zhao Leji’s “neutrality” diplomacy recasts moral authority as sovereignty defense; and the Taiwan Affairs Office’s rhetoric signals continued pressure ahead of January 2026. Together, these moves illustrate a system intent on shaping dependence and suppressing dissent simultaneously.
These moves narrow operating space, but each also exposes enforcement limits and coordination gaps that careful US statecraft can exploit. Beijing’s economic vulnerabilities undercut its confident posture, European skepticism remains exploitable, neutrality rhetoric contradicts coercive behavior, and morale policing reveals brittleness rather than strength. The question is whether Washington can move with sufficient speed and coherence to turn China’s structural pressures into strategic overreach.