Dear Reader,

In China, July leaves little time for summer holiday book reading. In 2016, it was the Hague tribunal ruling on the South China Sea. In 2017, it was the threat of a trade war with the US. In 2020, it was the US-China consulate closure row. In 2022, it was Iran joining the Shanghai Cooperation Organisation. Then last year Donald Trump survived an assassination attempt, a moment that changed an election. And now a deadline is looming in Trump’s tariff war with the rest of the world. 

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The Big Picture

Power port 
The Shandong aircraft carrier strike group makes a port call in Hong Kong, eight years after the Liaoning visited the city.

• Why it matters: the Shandong is escorted by two Type 055 missile destroyers, some of the most advanced vessels in the Chinese navy’s fleet
• Also, the two carriers have just finished a joint drill that sent them deeper into the Pacific for more intense and complex exercises
• Meanwhile, US spy probes watch on as two Chinese satellites conduct close-proximity operations, moving closer to an in-orbit refuelling mission 

Dust settled
The US Congress passes Trump’s big policy bill to overhaul government spending.

• Why it matters: the 900 pages of legislation will bar Chinese companies from clean energy tax credits and end duty exemptions for low-value parcels sent to the US
• And, the bill boosts defence spending in the Indo-Pacific, and aims to challenge China's shipbuilding dominance
• Meanwhile, foreign ministers from the US-led Quad meet for a second time under Trump 2.0, agreeing to cooperate on maritime security and critical minerals to counter China
• Also, speculation mounts about a possible Trump trip to China to commemorate the end of World War II  

Duty bound
The Politburo reviews new rules to set the boundaries of its many commissions and groups under the Communist Party’s top decision-making Central Committee. 

• Why it matters: the rules aim to formalise the way policy is made, ending some confusion over the power of these groups and reining in official overreach  
• Meanwhile, Xi says the country must allow for more public and media oversight of the government and the party
• Also, Beijing rejects the 14th Dalai Lama's succession plan

Wins and Fails

Synopsys and Cadence Design Systems prepare to resume exports of their chip design software to China as the US eases tech curbs 

Chen Xiaojiang replaces Ma Xingrui as party chief of Xinjiang

Late former premier Li Keqiang is remembered for dedication and loyalty 

The family of late neuroscientist Jane Wu files a civil discrimination complaint against Northwestern University

Big Numbers

30 billion yuan – the amount a think tank says China should issue in new treasury bonds to tackle local government debt 

40-50% – China’s estimated actual consumption compared with that of developed nations

99% – the share of stablecoins worldwide pegged to the US dollar

30% – the mainland’s estimated share of global chipmaking capacity by the end of the decade

Direct Quote 

“In general, because of how securitisation informs discussion of China in the US, anyone – including myself – who is trying to maintain some academic bridges to China has to be extraordinarily cautious not to run afoul of ‘red lines’ back in the States.” 

Neysun Mahboubi, a US expert on Chinese law, reflects on the damage the overemphasis on national security inflicts on China-US academic exchanges