Today’s post offers a round-up of noteworthy analyses and commentaries from August that narrowly missed inclusion in the main newsletter.
With Modi’s attendance at the SCO summit in Tianjin and the messaging around the Beijing Victory Day military parade dominating China-related news, much of our August selection centres on Sino-Indian relations and conceptions of a new international order.
Assessments of Modi’s visit diverge. While Xie Chao highlights opportunities to consolidate warming India-China ties and Yao Yuanmei sees encouraging signs of improvement, Jin Canrong cautions strongly against optimistic interpretations.
On the international order, while scholars advocate reform and a greater role for both China and the Global South, they also emphasise the need for continuity and stability, particularly in maintaining open trade with advanced economies. Authors such as Cheng Yawen highlight the emergence of new institutions like BRICS and the AIIB, signalling efforts to reduce reliance on the Western-led system. However, Wu Xiaoqiu underscores China’s continued reliance on overseas markets — notably the US, EU, and Japan — for sustaining manufacturing dominance, while Jian Junbo stresses the importance of the EU-China relationship for preserving open markets.
Meanwhile, Yao Yang and Yan Yilong present sharply diverging analyses of China’s future economic pathway and Liu Jia warns of the development of “sovereign-consciousness” in advanced AI models—emphasising the need for a plurality of models to prevent the dominance of a single world-view.
— James Farquharson
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SINO-INDIAN RELATIONS
China can use its trade policy to consolidate India’s shift towards “pragmatic engagement”. Modi’s attendance at the 2025 SCO summit in Tianjin represents a turn from “aligning with the US to contain China” [联美制华] to “pragmatic engagement with China” [务实联华]. Despite talk of promoting “Made in India” and decoupling, India’s reliance on Chinese supply chains remains deep and Washington’s shifting priorities have shaken Delhi’s strategic calculus. China can use the current strategic window to further deepen India’s reliance on Chinese supply chains in favour of US ones, thereby reducing the risk of a future swing back to the US. – Xie Chao (谢超), Associate Research Fellow, Centre for South Asian Studies, Fudan University (观察者网, 31 August)
Modi’s decision to stop in Japan before attending the Shanghai Cooperation Organisation summit highlights India’s Strategic Balancing Act under US tariff pressure. Modi’s itinerary is notable: meetings with Japan on defence, technology, and trade before flying to China, yet avoiding the “3 September Parade”, hinting at tacit India–Japan alignment on wartime history. While Modi’s trip could warm ties after years of border tensions and trade disruption, one should be cautious about expecting a quick transformation from “rival” [对手] to “partner” [伙伴]. – Yao Yuanmei (姚远梅), Director, Centre for South Asian Studies, East China Normal University (观察者网, 29 August)
Modi’s decision not to attend the 3 September parade reveals that any improvement in Sino-Indian ties remains superficial. The recent shift in tone stems largely from Washington raising tariffs on India to 50% and Trump’s “public humiliation of India” [给印度“戴高帽”] over the conflict with Pakistan. However, China has always relied on its own strength to face the US and has no need to “cooperate with India” [配合印度] to do so. Moreover, Modi’s “Made in India” initiative shows that India’s self-confidence remains high while strategic wariness towards Beijing persists. – Jin Canrong (金灿荣), Professor, School of International Studies, Renmin University of China (金金乐道编辑部, 20 August and 28 August)
THE GLOBAL ORDER
As the post-WWII international liberal order disintegrates, China is best-placed to establish an international order meeting the needs of small and middle powers. The priority should be to establish a stable “realist” international order based on the principles of national sovereignty under the UN Charter, a Security Council-centred security architecture and nuclear non-proliferation. Three tasks follow: preserve an open trading regime as opposed to a US-led “WTO-1”, shape a cooperative multipolarity that does not degenerate into a free-for-all and manage nuclear risks by advancing the principle of “mutual no-first-use”. – Da Wei (达巍), Director, Centre for International Security and Strategy, Tsinghua University (《世界知识》, 27 August)
China must take control of the “script” [剧本] shaping both Sino-US relations and the future international order, ensuring it reflects China’s interests and values. Under Trump 2.0, the United States is shifting from maintaining the post-war order towards partial abandonment, prioritising self-interest and reduced global responsibilities. This transition presents strategic opportunities for China to expand its influence, assume greater responsibilities, strengthen coordination with Washington where interests converge and shape the future international order according to Beijing’s strategic vision. In the long term, China must resist certain “temptations of power” [抵制某些“权力的诱惑”], uphold the PRC’s distinctive diplomatic path and advance a multipolar world. – Diao Daming (刁大明), Director, Department of Diplomacy, Renmin University of China (《世界知识》, 29 August)
As the post-war global order undergoes profound transformation amid shifting power dynamics and escalating global crises, China should balance “breaking” [破] outdated mechanisms with “building” [立] inclusive structures. While the UN remains central, reforms are essential to strengthen its governance and coordination. China seeks constructive innovation, not disruptive overhaul — advancing multipolarity through BRICS, the BRI and other global initiatives. Unlike hegemonic models, China aims for an equal, cooperative order where nations share development and security. Only through consensus-driven multilateralism can we prevent systemic collapse and guide humanity towards a more stable and just future. – Zhao Long (赵隆), Deputy Director, Institute for International Strategic and Security Studies, Shanghai Institutes for International Studies (《世界知识》, 27 August)
Donald Trump’s transactional “peace-making” [和平斡旋] is a means of US expansion by deal-making—heightening the risk of a catastrophic global conflict. Examples of Trump’s tactic include the proposed US-controlled Armenia–Azerbaijan transit corridor (TRIPP) and Ukraine being urged to trade natural resources for US support—both of which have benefited US interests at the expense of Russia’s. However, the idea that a “deal” may be reached in the case of Ukraine is an illusion. All sides in the conflict expect to win, meaning there is little incentive for anyone to compromise; the risk of unintentional escalation into a “Third World War” should therefore not be underestimated. – Zheng Yongnian (郑永年), Founding Director, Institute for International Affairs, Chinese University of Hong Kong (Shenzhen) (大湾区评论, 29 August)
A “G-Minus-1” [G减1] world without the United States marks a transition from “unconscious interconnection to proactive construction”, with the Global South driving new financial and institutional frameworks. After the 2008 financial crisis, emerging economies moved from passive participation to building their own mechanisms. The emergence of the G20, Asian Infrastructure and Investment Bank (AIIB) and BRICS all exemplify this shift, with BRICS in particular debating new monetary and financial systems as de-dollarisation accelerates. These efforts are evidence that the Global South is not just a follower but a creator of rules, offering stability in an era of US retreat. – Cheng Yawen (程亚文), Dean, School of International Relations and Public Affairs, Shanghai International Studies University (环球时报), 26 August)
China can only sustain its manufacturing dominance to 2100 by shaping a “WTO 2.0” system re-affirming free trade. China has two priorities: first, deepen market institutions and foster growth in innovation and incomes; second, secure external demand, as 40% of China’s output relies on overseas markets—notably the US, EU, and Japan. Finance underpins modernisation through law, the “contract spirit” [契约精神] and transparency. Excessive tariffs should therefore be rejected and new global trade rules established. – Wu Xiaoqiu (吴晓求), Dean, National Institute of Financial Research, Renmin University of China (人大重阳, 28 August)
US-CHINA RELATIONS
The key to managing US–China relations will increasingly lie with the Chinese side, not Trump. Three phases may be discerned: an initial, misjudged tariff push; a May–August “fight and talk” [边打边谈] spell widening from trade to diplomacy; and a likely post-September “talk and act” [边谈边行] stage targeting a leaders’ summit to forge a broader, stabilising framework. The Western narrative on China has been shifting towards observations on China’s resilience and tech gains (e.g. DeepSeek), while nervousness on Wall Street about the economic drag of US protectionism could spur capital outflows. This hands China the initiative in future negotiations. – Wu Xinbo (吴心伯), Director, Centre for American Studies, Fudan University (观察者网, 29 August)
Trump’s tariff-centred ‘deals’ are recasting trade into an “American-style tributary trade system” [美式朝贡贸易体系] that will probably persist for at least as long as he is in office. The approach fixates on deficits, functions on engineered uncertainty and pushes countries into ranked tiers. Domestically, it fuels crony capitalism, widens inequality and hardens polarisation—but is unlikely to taper off given its support among the Republican base. Looking ahead, tariff use is likely to widen in scope throughout Trump’s term, keeping global tensions elevated. – Zhao Hai (赵海), Director, Department of International Politics, National Institute for Global Strategy (中国财富管理50人论坛, 29 August)
Though the leverage of “soybean diplomacy” [大豆外交] over US politics has weakened in Trump’s second term, it remains a useful negotiating chip. Agricultural subsidies, efforts to reshape electoral rules and a pronounced rural “red shift” have now consolidated GOP hold over soybean states that briefly wavered in the 2018 midterms. Retaliation via soy alone would therefore be a weak strategy for China to adopt, but targeted purchases in concert with other measures remain a low-cost tool to aid trade rebalancing and stabilise ties. – Meng Weizhan (孟维瞻), Associate Professor, Fudan University; Zhang Yao (张耀), Special Associate Research Fellow, Nanjing Normal University (欧亚系统科学研究会 , 26 August)
EUROPE AND RUSSIA
As China and the EU mark 50 years of diplomatic relations, China should re-affirm a European strategy independent of its approach to the US. Although the EU-US alliance is unlikely to disappear, China’s Europe policy should not simply be subordinate to its US strategy. China’s goal should instead be to avoid provoking the EU into aligning with the US to “jointly contain China” [联合遏华]. Despite the EU’s “de-risking” policy, Europe still represents a peace-oriented force with whom China can cooperate in multilateral governance, advancing free trade and conflict management. – Jian Junbo (简军波), Director, Centre for China-Europe Relations, Fudan University (澎湃新闻, 13 August)
Europe’s mounting anxiety about Washington and Moscow going “over its head” [越顶] stems from self-imposed institutional constraints that it struggles to shake off. Brussels has carried much of the burden in supplying Ukraine throughout the war—and yet is marginalised in the decision-making process on ending the war. This is due to three deeper flaws in their security architecture: energy dependence on external countries, path-dependent reliance on the US within NATO and rules on unanimous decision-making that are ill-suited to fast-developing crises. Until Europe addresses these structural issues, “strategic autonomy” will remain nothing but an aspiration. – Jiang Feng (姜锋), Researcher, Shanghai International Studies University (环球时报, 16 August)
There are continuities in Russia’s positioning between Europe and Asia following the 19th century Crimean War and today’s Russia–Ukraine conflict. Each war pitted Russia against virtually all of Europe and exposed misjudgements about alliances, military capabilities and the possibilities of escalation. The current war is catalysing similar effects inside Russia to those that the Crimean War triggered: economic, social and military reforms and a diplomatic re-orientation away from Europe by “turning Eastwards” [“转向东方”]. However, while Russia’s 19th Century eastwards turn was expansionist, the current turn is about economic development and relationship-building. – Zhao Huasheng (赵华胜), Professor, Fudan University Institute of International Studies (《国际关系研究》, 30 August)
THE ECONOMY
To tackle “involution” and weak demand, a “National Housing Reserve” [中储房] should be established to buy up one million foreclosed or unsold flats—stabilising trust in the critical property sector and boosting consumption. Current low consumption levels are due to a preference for saving that stems from low confidence in the economy’s future—rather than being due to lack of spending power. Therefore, consumer subsidies such as the “swap old for new” [以旧换新] policy hit the wrong target. Instead, policy should focus on boosting the real estate sector and local government spending (collectively accounting for 50% of domestic demand), thereby incentivising consumers to release their savings. – Yao Yang (姚洋), Dean, Dishui Lake Advanced Finance Institute, Shanghai University of Finance and Economics (财经杂志, 6 August)
China’s recent slowdown results from a “K-shaped” growth trajectory as it enters a “new phase” [新周期] of development. The upcoming 15th Five Year Plan will involve a focus on domestic consumption, “spiritual and physical health”, improving birth rates and integrating advanced manufacturing with bespoke online services—a combination that will “turn involution into external expansion” [变内卷为外卷] and herald a new era of Chinese products, services and brands “going out to sea” [出海]. – Yan Yilong (鄢一龙), Professor, School of Public Policy and Management, Tsinghua University (观察者网, 31 August)
TECH / AI
On why it is crucial that different counties develop indigenous artificial intelligence models to prevent the domination of a single world-view when AGI is reached. AI models embed value “sovereignty-consciousness” [主权意识] in their algorithms and training processes; countries must develop indigenous models to safeguard pluralism [多元化] and avoid homogeneity [同质化] in world-views, aiming for “harmony in difference” [和而不同]. – Liu Jia (刘嘉), Chair Professor of Fundamental Science, Laboratory of Brain and Intelligence, Tsinghua University (正和岛, 27 August)
SINIFICATION’S AUGUST POSTS IN REVIEW
Taiwan: Wei Leijie’s Case for a "Once-in-a-Century" Deal with Trump
“For mainland China, which is more worth its while: ‘buying Taiwan’ or ‘taking up arms for it’ [“买台湾”与“打台湾”哪个更为合算]? The answer is clearly the former ... [That being said,] it is better to endure the inevitable short-term pain of reunification than to subject national rejuvenation to the endless torment of delay and the uncertainty of an indefinite future."
— Wei Leijie (魏磊杰), Professor, School of Law, Xiamen University
PKU Prof. Zhang Weiying on China‘s "Resentment Complex"
"We [Chinese] only discuss interests and ignore values [只讲利害不讲是非]. Sometimes even interests are set aside in favour of simple likes and dislikes [好恶]. Bad news for the West is always good news for China. Whatever the West supports, we oppose; and whatever the West opposes, we support. If a Western country clashes with a non-Western country, most Chinese people hope that the former loses and the latter wins—not because we like the latter, but because we hate the former."
"We [also] “become arrogant before we’ve made it” [未富先骄] and lose all measure as soon as we are slightly strong [稍强即狂]. Our resentment complex leaves Chinese people with an irrepressible yearning to rise above others as soon as they have the opportunity. As such, their sense of inferiority easily shifts to arrogance. The moment our country has become the slightest bit stronger, we start to exhibit a nouveau riche attitude [暴发户心态], no longer self-effacing but rather swaggering all over the place. To “hide our strength and bide our time” [韬光养晦]—how difficult that is in practice!"
— Zhang Weiying (张维迎), Boya Chair Professor of Economics, National School of Development, Peking University
The Industrial Policy Debate of 2016: Justin Yifu Lin vs. Zhang Weiying (Part 1)
Revisiting the landmark “Industrial Policy Debate” of 2016, the developmental economist Justin Yifu Lin makes the case that no economy—whether developing or developed—can do without industrial policy. Whether they do it consciously or not, most governments already engage with industrial policy; the key challenge is to devise a framework for rationally determining which industries to support. The best way to do this is through an assessment of a nation’s “latent comparative advantage”, the composition of which changes as an economy develops.
— Justin Yifu Lin (林毅夫), Honorary Dean, National School of Development, Peking University
The Industrial Policy Debate of 2016: Zhang Weiying on Entrepreneurs and Innovation (Part 2)
In the second part of the “Industrial Policy Debate”, Zhang Weiying argues that officials inherently lack the competencies to make entrepreneurial decisions. Entrepreneurs naturally excel at identifying comparative advantage and can correct mistakes by moving on to other projects, but government subsidies will blunt entrepreneurial instincts. By contrast, officials possess weaker business judgement, are vulnerable to vested interests and tend to conceal investment mistakes by pouring more money into failed projects.
— Zhang Weiying (张维迎), Boya Chair Professor of Economics, National School of Development, Peking University
Liu Zongyi: India’s Disruptive Role Threatens the SCO’s Future
"The India–Pakistan military conflict has exposed shortcomings in the SCO’s institutional flexibility and crisis response capabilities, while also presenting an opportunity for transformation. If the SCO could pursue structural reform to strengthen internal coordination and reduce India’s obstructive influence [弱化印度掣肘], it has the potential to evolve into a core platform for security and economic governance across Eurasia. Conversely, if internal divisions continue to paralyse it, its geopolitical influence risks being further eroded by Western-led alliance systems."
— Liu Zongyi (刘宗义), Director and Senior Researcher, Centre for South Asian Studies, Shanghai Institutes for International Studies (SIIS)
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