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Now here's the show.
I don't see this as primely motivated by the U.S. wanting to take on China.
But I really do think that it's time to ask the question,
is what people a few years ago were calling the new Cold War between the U.S. and China now warming up?
And if so, then we're in a very, very different world from the one that we've all been used to.
Welcome to China Decode. I'm Alice Han.
And I'm James King.
In today's episode of China Decode, we're discussing how China is responding after Trump attacked Iran.
China prepares to lock in its next five-year economic battle plan
and China's electric vehicle safety reckoning after a fatal crash.
That's all coming up, but first, let's do a quick check-in
with how the Chinese markets are starting the week.
On Monday, investors rush to respond to the situation in Iran.
Despite this, the Shanghai A-Share Index rose about 0.5%.
The Hang-Sang A-Share Index, on the other hand, fell almost 3% before recovering slightly.
The largest sell-off since the Liberation Day tariff announcement last April.
In fact, 76 docs in the 88 member Hang-Sang Index closed down on the day.
Oil companies were obvious winners.
China National Offshore Oil Corporation closed up more than 5%,
and Petro-China more than 4%.
All right, let's get right into it.
As the Middle East teeters after the killing of Ali Kameni,
China is no longer just quietly watching.
It's openly condemning Washington and positioning itself for what comes next.
Beijing blasted the US and Israel for what it called the,
quote-unquote,
blatant killing of a sovereign leader.
With foreign minister Wang Yi warning the region could be pushed into a dangerous abyss.
Russia's Vladimir Putin echoed that language,
calling the strike a violation of international law,
just as Tehran installed a temporary leadership council,
and the Iranian Revolutionary Guard Council
launches retaliatory attacks across the region.
Meanwhile, three US service members are dead.
Oil shipments are disrupted,
and the Strait of Hormuz,
a choke point for roughly a third of China's crude imports,
is suddenly at risk.
James, I thought I was going to have a quiet weekend,
but no, I didn't.
This has obviously come up in the last few days.
China actually has been pretty slow and I think kind of restrained
in its language if I compare this to Venezuela as a direct analogy.
And it hasn't really condemned the strikes as strongly as I expected,
although in the last 24 hours we've seen a bit of a change,
especially with the killing of Kameni.
Now China is calling for a ceasefire.
There is obviously the oil strategic question at risk,
you know, about 15% of sea-borne crude,
going to China comes from Iran,
and Chinese are definitely worried about the Strait of Hormuz.
What is China's positioning on this issue?
And why do you think they haven't really been strong
in their language from the get-go
in terms of condemning Israel and the US?
Yeah, great question, Alice.
I think there's a couple of really big issues here.
One is the one that you've just mentioned.
How is China responding?
How do we assess its reaction?
And the other question is probably much bigger,
a much more difficult to answer.
And that is, is the United States now in some kind of a proxy war with China?
I know that sounds really dire.
Maybe this is overly sensational.
But when you consider recent history,
and I mean very recent history,
the US attack on Venezuela in January,
with which China had deep commercial,
diplomatic and security ties,
and now we have the attack on Iran,
a country with which China has a crucial oil import arrangement,
and deep investment,
and a so-called comprehensive strategic partnership.
And then, of course, there's Ukraine.
China and the US are on different sides of that conflict.
China is a staunch ally of Russia,
and the US and Europe are supporting Ukraine.
And in addition, we've seen the government of Panama
recently take back control of two ports
at either end of that Panama Canal
that were operated by a Hong Kong Chinese company.
And that was after President Trump said that he was taking back the canal.
And now, of course, we've got Cuba potentially in the future.
Donald Trump said that the US wanted to have a quote,
friendly takeover of Cuba.
China also has deep ties with Cuba.
So I really do think there is a logical and viable question to ask,
which is this issue of,
is the US now in a kind of proxy war with China?
The US is targeting several of China's key allies in the world.
And my first kind of tentative reflection on this would be
that we probably should see the action by the US on Iran
as an isolated or as an issue that the US took
because of specific conditions in Iran,
rather than its prime motivation being opposing China.
And I think that the same might be true with Venezuela as well.
I don't see this as primarily motivated
by the US wanting to take on China.
I see this as motivated in the first instance
by issues that the US has with these individual countries.
But I really do think that it's time to ask the question,
is what people a few years ago were calling the new Cold War
between the US and China now warming up?
Has it got the potential to warm up?
And if so, then we're in a very, very different world
from the one that we've all been used to.
So I think the first question is the one that you have raised, Alice.
How is China reacting?
To me, the first issue here is whether or not the summit meeting
at the end of the month, which is planned between China's President,
Xi Jinping, and President Trump will go ahead or not.
Clearly, this has been a massive blow to China's sense of where the US is.
And I just wonder whether, given the fact that, as you mentioned,
the Chinese Foreign Minister Wang Yi just said that it was, quote,
unacceptable to openly kill the leader of a sovereign country
and institute regime change.
Okay, so if it's unacceptable, then how is it acceptable
to have a summit between China's leader and the US leader
at the end of this month?
That's my first question.
I really think that that summit meeting is now potentially in jeopardy.
We'll have to watch and see what's happening.
The other thing I think about China's reaction
is that there must be reflection in China,
that this, although it hits China really badly
for several of the reasons that you've given,
of course, oil imports from Iran is one, major one.
The situation in the straits of whole moves is another one.
But there is potentially an upside to China here.
And that is simply that, given that the US has shown
that it is prepared to intervene militarily
without the backing of law, perhaps this is an opportunity for China
to show itself to the world yet again as the more stable superpower.
This is something that we might not see the effects of for quite some time.
But I do think that that is a key question
that we should also bear in mind.
What's your sense of how this is going to play out,
whether this plays to China more or to the US more,
whether this really does inflict kind of even more severe pain
into the US-China relationship?
Well, I love that you talked about proxy wars.
I'm a Cold War historian by training.
So I think a lot in terms of the Cold War analogies,
I completely agree with you, James.
I think Ukraine is more natural analogy with parallels
to the Vietnam War and even the Korean War,
where you do see these two different camps,
the West and the Soviet Union, really being at cross-purposes,
leading to an impasse, which was in the case of both Korea
and Vietnam for a period of time.
It seems like we're in the midst of that
in the Ukraine-Russia conflict as well.
I do agree that Iran is in Sui generis.
Iran is, I think, an example of what we've seen in Trump 2.0,
whereby the hawkish elements of the Trump administration,
Hegseth Rubio, for instance,
are seeing this as a once-in-a-lifetime opportunity
to go all out on these rogue regimes
and to do the kind of regime change or even alteration
that they would have liked to have done a fair while ago.
And so I think this opportunity that's opened up
with a weakened Iran, not just weakened by sanctions,
but also weakened by, I think, its increased tensions
with the Gulf States, for instance,
has given them a window of opportunity,
certainly, BB Netanyahu, the Israeli Prime Minister's
very aggressive stance on really trying to annihilate
the Iranian Republic, as well as its nuclear program,
has again given, I think, more ammunition,
so to speak, metaphorically and literally,
to Washington to achieve this.
I think it was very clear, at least from our
internal assessment, that this was going to happen
at some point in Q1 or Q2.
It was a matter of time, and likely during Ramadan,
remember, it's Ramadan right now,
and certainly, BB wants to do this on his watch,
because Iran is one of the key strategic adversaries
of his time.
I will say that I was reading a couple of articles
from China Middle East experts on this,
and two of them were pretty interesting to me,
which will tie back to your point about
the US-China relationship.
One was written by the Shanghai Institute
of International Studies, which is a known think tank in Shanghai,
and in this article by Danielle Shang, he talks about the fact
that it's really Israel that is in the driving seat,
when it comes to the air strikes and bombings of Iran,
and America is driven by, quote unquote,
overconfidence from Venezuela.
And certainly, this has driven what we've seen
in the last 48 hours or more.
And there's another article by a professor
at the China University of Hong Kong,
in which he likens what's happening in the Middle East
with Israel acting as the fodder,
as the kindle to the conflict in the Middle East,
to what he perceives as a future risk,
which is Japan really emboldening America
to be more involved in East Asia.
And I link this back to the US-China relationship,
because what I've seen is a lot of consternation
amongst Chinese scholars in the last couple weeks,
especially with Takayuchi, the Japanese Prime Minister's
election landslide victory,
that Japan is going to double down on militarizing,
on reducing the lead times to getting nuclear arms and deployment.
And that worries the Chinese,
because they think that a more hawkish Takayuchi
could get Trump and his team more interested
in being combative on China, on the Taiwan issue.
Now, I'm not sure if I necessarily agree with that logic,
but it's interesting to me that the Chinese scholars
are joining the dots.
To bring this back to the US-China relationship,
and whether or not we get a Trump-she-submit in Beijing,
I was originally optimistic that we would get this.
I mean, there was an announcement a couple of weeks ago
that the US president, Donald Trump,
is going to China from March 31 to April 2.
I would take the bet that that may get delayed.
The Chinese, as you know, James,
they don't like instability in the lead-up to negotiations.
So if we see this escalate even further,
I think now, especially with the assassination
of the Supreme Leader,
it's, I think, my own high probability outcome
that we see maybe a delay of that meeting.
But on the flip side, I do think that the Chinese
want to nip the relationship in the bud
and make sure that we don't see an escalation ladder
in trade and technology in other areas,
because they understand that Trump's
modus operandi right now is to be seen to be making peace
and having stability in the US-China relationship.
I look at what's happening in the Middle East.
And when I put it in the Chinese policymakers' aperture,
I think they infer from that look,
we don't want to rock the boat in the relationship
with the US right now,
because it's a volatile situation.
And certainly the Americans under Trump have proven
that they're more willing to risk blood and treasure
in foreign campaigns.
So why don't we continue to pretend to talk,
continue to offer some symbolic concessions
without really offering anything structural?
That I think will be the equilibrium strategy
from China's vantage point for the coming months.
But I certainly feel in reading some of the statements
from Wang Yi and the Ministry of Foreign Affairs
spokesperson that they were taken aback by this.
There's a statement from the press conference
of the Ministry of Foreign Affairs spokesperson
saying that China was not notified beforehand.
So I think that this notified of the attack on Iran.
So I think this has really taken China aback
and it will have material implications
on whether or not we get a summit.
My own feeling is that that gets delayed.
But to walk it back again to the China-Arun relationship,
a lot of people are saying that this is a big deal
for China.
China is obviously a massive importer of Iranian crude.
I would take the opposing view.
I think that it's far more important
the relationship with Russia.
And we actually have seen in the last month or so
that China has been building a contingency plan
by building a stockpile of crude oil
sourced from Russia and Saudi the Gulf states
rather than Iran.
But certainly in the short term, if we see oil spike,
oil futures, that is obviously going
to put price pressures on Chinese corporates.
And certainly we have seen an 11% spike
on Sunday of WTI to $75 a barrel.
My own sense is that it probably goes up further
because there's even more risk premium being attached
to the strain of hormones if that actually gets blocked.
So we're far from the edge of the cliff.
I think there's still a long ways to go
in terms of the escalation.
But my own sense is that China is going
to play a wait and see game to see how far the US and Israel
go in really launching regime change.
Now we can go into the specifics,
but Iran seems different from Venezuela,
seems different from Iraq and Syria
where there is a deeper state at play.
So decapitation of even the supreme leader
doesn't mean regime alteration
or regime change overnight.
It's actually quite, I would say,
anti-fragile in that respect.
So we'll have to see what comes in the next week or so
when we expect an escalation in strikes from Israel
and the US over Iran.
Absolutely, Alice, and I think this really shows up
China's economic state craft
or the limitations of that economic state craft.
I mean, if you look over the last 10, 20 years,
effectively a great deal of China's foreign policy
has been invested in getting close to countries
that arrivals of the United States
and then pouring billions and billions of dollars
into those countries and striking all kinds
of commercial arrangements with them
and now this policy, I would say,
is blowing up in China's face.
If we just have a look of the constituent parts
of China's commercial relationship with Iran,
it really is quite staggering.
Just to give you one big picture number,
there was a 25 year, 400 billion US dollar partnership
pact that was inked in 2021
between China and Iran.
And that facilitates all kinds of things,
imports from Iran, all kinds of other aspects
of the relationship.
China purchases about 80% of Iran's oil,
oil exports, that is.
So that is a huge number.
You've just mentioned it's about 13%
of China's total seaborn oil imports.
In terms of investments under what's called
the Belt and Road Initiative,
that's China's big way of embracing the global South
by pouring billions and billions of US dollars
into global South countries.
China is deeply involved.
It has built much of Iran's railway infrastructure projects
such as the rail between Tehran and Mashad, Tehran
and Haberdan and also a 2.1 billion US dollar project
to upgrade a big oil refinery at Haberdan.
Also, in terms of technology and surveillance,
firms like Huawei and ZTE,
two of the big Chinese telecommunications companies
have built much of the telecommunications backbone in Iran
and it goes on and on and on.
There are solar power projects,
other renewable energy projects
that have been invested in by Chinese companies in Iran.
So if the whole Iranian-China relationship goes south,
and we don't know if that's going to be the case at the moment,
China stands to lose a great deal.
And I think it raises a fundamental question
as to the sustainability of China's economic state craft
in particular in terms of its courting of US rivals
in the global South.
Really interesting, thanks James.
Well, we'll be back with more after a quick break.
Stay with us.
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Welcome back.
This week China is preparing to formally adopt
its 15th five year plan during the 2026 two sessions.
The country's most important annual political gathering,
setting the blueprint for the next half decade
of economic and technological strategy.
Often navigating covert disruptions
and a renewed trade standoff with Washington,
Beijing is now signaling a sharper focus on resilience,
supply chain security and an aggressive push
into artificial intelligence and advanced technologies.
James, let's get right into it.
This five year plan is going to be huge
and I think that's not an understatement.
AI is going to be a cornerstone of it for sure.
Do you think that this five year plan
will really set up China to reduce dependence on the US?
Because certainly when I look to the last five year plan,
there was some talk about choke point industries,
which I think will come up again,
leveraging those industries.
But also the last five year plan was very much focused on,
what was then called the three news.
So electric vehicles, batteries, solar panels,
what do you think will be the key technological
points of focus and strategic areas of interest
on this next five year plan?
Yeah, I mean, I think it's quite fitting in a way
that we're talking about the new five year plan
for China after the US attack on Iran
because that will have convinced the Chinese leadership
yet again that economic self-reliance
and self-reliance in every other way
is absolutely the policy that China should be pursuing.
And so I expect that when Xi Jinping stands up
and gives his speech at the National People's Congress,
later on this week, there will be louder applause
when he mentions the word self-reliance.
You know, let's see if I'm right about that.
So I think that the main focus of this National People's Congress
and the 15th five year plan, which will be adopted at it,
will be achieving breakthroughs in core technologies
to reduce dependence on Western technology,
specifically in areas such as AI, as you've mentioned Alice,
also semiconductors, also quantum computing,
6G telecoms, aerospace, bio-manufacturing,
new materials, robotics, the list goes on and on and on.
But it's crucial to recognize that the whole impetus
behind this now, not maybe the whole,
but the largely the big impetus behind this
is China's race for self-reliance.
And I think when we talk about AI,
it's going to be a truly amazing National People's Congress.
There's going to be so many details that come out
if you're interested that will be really quite amazing.
And I think when people talk about AI,
often they're less than specific.
They sort of talk about it in the abstract,
but I've just been doing a little bit of research
on various AI products in China.
And I just want to mention one of them
to give people a sense of where China is
because China's approached AI
and we'll see this in the 15th five year plan
is what's called AI plus.
That means diffusing AI into so many different uses
and apps within the economy in order
to effectively animate the economy
and to generate revenues for companies that use them.
So I've got an example here.
There's something called the Alibaba Kwak AI Glasses.
And you put them on, they're like a,
they're called a living eye.
And as you've got them on,
if you walk through your surroundings,
they will alert you to the fact that there's a coffee shop
over here with maybe a special offer on Matcha
or the roadies blocked off over there.
So you'd better go the other way around.
Or it'll tell you something about footfall traffic.
And all the time, if you need it,
it'll translate for you in real time.
So there will be a voice in your ear
translating what a sign means.
Let's say if you're looking at it in English,
it'll translate it into Chinese or vice versa.
And if you're looking at items in shops,
these glasses can give you immediate comparisons
with prices of the same product on Tau Baal,
which is one of Alibaba's online marketplaces.
And these glasses, I mean, I'm not on commission, by the way,
I'm not selling these glasses.
Alibaba, I have no commercial relationship with Alibaba,
but they sell for about $356 US dollars.
And they're all animated by Alibaba's key AI program,
which is called Quen or QN.
So I just wanted to be a little bit specific on that.
The big headline number that'll come out
during the National People's Congress
when they mention AI and the 15th five-year plan
is that China intends by 2030 for AI and AI devices
to have a usage rate of over 90% in the Chinese economy,
essentially creating an AI infrastructure for the first time.
And then by 2035, the aim is for the Chinese economy
to be completely transformed by AI.
I think it's going to be really, really interesting, Alice.
What have you been focused on in that regard?
Well, I think that for viewers listening
to understand the importance of five-year plans,
this is really, you think about the government's key set
of KPIs and company goals for the next five years.
And oftentimes, they tend to actually outpace the targets.
But it really helps the central government
and local governments figure out what
are the areas of strategic priority
and poor a ton of resources through subsidies,
through financing, through cheap loans,
via banks and policy banks, to those sectors.
So as we mentioned previously, James,
in the past wind turbine, solar panels, EVs, batteries,
really benefited from that whole of government approach
embedded in five-year plans.
So it can't be understood how important this next five-year plan is.
I will also add to this that the things
we need to be watching for this week when both the government
work report and use of the five-year plan come out
is to what extent is the government putting its money
where its mouth is in terms of supporting consumption
and the services sector.
We've got a lot of talk in the run-up
to the Central Economic Work Conference December
and since then, about the need to boost consumption
and provide more support for the services sector,
I'll be watching and reading closely
to see what's actually in the minutiae of the government
work report to do that.
There's talk about consumer subsidies for the services sector,
maybe potentially even further price reductions
in certain sectors like health care and elderly care,
again, to support services consumption.
So I'll be watching that really closely
and then related to Taiwan and the military dimension.
I'll be watching to see what is going to be the target
in terms of military spending and the priorities for the PLA
because we've just got an announcement in last week
that more officials in the PLA, top level of officials,
have been ousted from the PLA.
So it really feels like a hollowed-out military
right now within the party.
So any indication both in the government work report
and elsewhere about what is going to be the strategic direction
and financing of the military will also be really interesting
for the Taiwan and US-China military dimensions.
So those are the other things that I'm watching.
Certainly, these breakthrough technologies
that we're mentioning, AI Quantum,
which is going to be huge as well,
both in terms of data encryption and decryption,
but also in terms of communication and sensing.
And these are going to be key areas
where a lot of R&D I think is going to be geared towards.
And as we've talked previously, biotech and farmer
where China has a known domestic advantage
in terms of the clinical trials pipeline,
the research pipelines, the drug discovery pipelines as well,
that I think will also be a key focus.
And then last but not least, I would say that any indication
from Xi Jinping about the economic direction
will be interesting.
Certainly, when we saw the draft of the five-year plan
late last year, what was clear was that even although
the government understands it needs to rebalance,
it is doubling down on being a high-tech manufacturing
superpower.
So we'll probably see, I think, more direction
in the five-year plan about what that actually means
and whether or not Germans should be even more worried
than they currently are, because clearly the Chinese
have overtaking them in autos and EVs,
maybe in the cutting edge in EVs as we come down close to that.
Innovation breakthrough as well.
So those are the things that I'll be watching very, very
closely.
But to your point, and this is maybe a discussion
for another time, I've been reflecting a lot
about the AI stack, so to speak, and this element
of self-dependence or self-reliance
that you talked about, James, which really dates back
to Chairman Mao that Xi is resurrecting as a terminology.
And it's the AI stack starting from the application level,
so the thing that is closest to the consumer,
to the model, to the infrastructure slash data center,
to the semiconductors or chips, and then
to the energy and rare earths or commodities aspect.
And to my mind, really, China has a lot of vulnerabilities
in those middle layers.
When I'm thinking about the frontier models,
you're thinking about the chips, you're
thinking about the data centers, where the CAPEX
is only a fraction of the 600 billion
plus that we're seeing in the US coming down the pipeline
for compute CAPEX and data centers.
Really, the only advantage has been China's industrial policy
in rare earths, as well as energy, where the output is
in electricity is twice that in America, even more now.
So I actually think that there will be some focus
in the five-year plan on really trying
to improve China's competitiveness in those middle tears,
where really they still remain behind the Americans.
And so that's going to be, I think, an interesting thing
to watch, because I think you and I
agree that AI plus is going to be, I think, the biggest
take away from this next five-year plan.
All right, let's take one last quick break.
Stay with us.
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Let's go places.
Welcome back.
A fatal crash involving the Xiaomi Su7
is putting China's EV industry under fresh scrutiny
after investigators found electronic doors failed
during a power loss, trapping the driver inside.
Now regulators in China are mandating mechanical backup handles,
a change that could ripple across China's massive EV market
at an extremely critical moment for its global expansion.
James, you alerted me to this story
and it's actually quite shocking.
It's not the first time that we've seen
some of these malfunctions.
I remember a couple of years ago,
there was something similar to that happened
with Tesla vehicles in China,
at least one or two Chinese consumers
were trapped inside and died in a Tesla vehicle.
This is obviously not a first,
but this in this case is involving a Chinese manufacturer of cars.
Does this, do you think, diminish the way Chinese consumers
feel about the safety and security of Chinese EV companies
and potentially how foreign consumers think about Chinese EVs?
I think it might well, you know?
I mean, I looked at the footage and I found it really tragic.
I mean, there's this video online of the fire in the car
in Chengdu city in China.
Some brave bystanders come over
and you can see them trying to break the glass on the windows
to get the driver out.
One man is using his fist against the side windscreen
and then he tries to use his forearm
and all the time another man is trying to open the door handle
but it's obviously really hot
so he can't hold it that long
and then the driver dies inside the car in gulf by flames.
And it really is a tragic scene.
I think that obviously the investigators
have now made a determination on this
and they've said that the doors could not be open from the outside
because the collision caused the low voltage system
within the car to lose power
and that disabled the door handle release function.
You know, obviously, I mean, that is something
that should have been thought about long before they launched a car like this
and to me it will give people pause
whether they're inside China or outside China.
But as you say, there are new safety regulations
but I do think this is a blow to China's incredible EV phenomenon
both inside the country and outside.
I assume that Xiaomi will fix this
and China's move into overseas market will continue
but what's your sense, Alice?
How are you seeing it?
I mean, this is definitely bad PR for Xiaomi itself
but it's coming in a time where I still think
that Chinese EVs have such a competitive advantage
compared to their European and American peers.
We've seen Chinese EV sales grow and average rate of 50%
from 2021 to 2024.
Just last year, this was a big story of last year in the EV world,
BYD from China overtook Tesla and just global sales,
aggregate lee of EVs and that trend is likely to continue
and increase going into 2026.
And now BYD is apparently in 119 countries around the world
that number will grow.
And I just heard recently from people close to this
that BYD is actually launching more of its luxury line of cars
under different names.
So there's one called Dancer that's coming down the pipeline.
It's priced at above 100,000 USD.
That I think will help reduce some of the potentially bad PR
surrounding Chinese cars if you just enter the market
with a different name and really try to China wash.
We've seen that actually happen a lot
with Chinese companies in the tech space
and more noticeably with AI companies like Manus.
But certainly what we're seeing at least from the BYD instance
is that they find ways to try to decine a size
or reduce the association with the core Chinese brand
in order to cater to a foreign market.
That I think will be the trend for a lot of these brands
that are rather launching these more luxury high-end versions.
But certainly when I look at the future,
what is going to be interesting to link this back to AI
is the safety aspect of autonomous vehicles,
which we haven't even gotten into.
And regulators haven't even caught up to
because really the technology hasn't really been scaled out on mass.
Certainly if you go to major cities in America,
like San Francisco, LA, Austin, you're seeing Waymo
and other AVs already on the road.
And if you go to certain cities in China, that is the case too.
But we're not seeing it on mass yet in either countries.
And that I think might open a new can of worms in terms of regulations.
Maybe that is coming in the next couple of years
as well, because I sense that the technology
is moving quite rapidly in China and adoption
could move quite rapidly, potentially even faster in China
for AVs than in the US.
So the next time we talk about this,
there may be some security challenge
that some of these AVs face, which we haven't gotten into.
That worries me quite a bit,
because certainly that takes a whole other level
of control away, potentially, from the driver itself.
And then we haven't even gotten to the data security aspect
if you're thinking about it from the perspective of a foreign consumer.
I've read some articles and heard some stories
about European countries' concerns
about autonomous vehicles collecting data,
even electric vehicles collecting data from European consumers.
And certainly I think that those concerns
will probably only increase,
both as we see EVs penetrate further
into the European Union countries
and when we see autonomous vehicles coming
as the next frontier of vehicles from China.
What's your view on that, James?
Yeah, I mean, I think it's a really good point to your make, Alice.
I think that with a lot of Chinese innovations,
there is this kind of mentality of move fast and break things.
And China's moving so quickly to unveil all of these technologies
and a lot of these technologies are new or new-ish.
So clearly, some things are going to go wrong.
I think people should be really quite aware of that.
All right, James, you know what time it is.
It is prediction time as you peer into the crystal ball
for the next week. What do you see?
OK, well, I've picked a prediction
that does chime, I hope, with what I think will be the big theme
of the National People's Congress later on this week.
And that is technology.
And I'd like to focus a little bit on a technology
we perhaps don't think about that much with China.
And that is space.
China's moves to go boldly into space.
And my prediction is that the space race
with the US this year will shift into high gear.
Part of this will be a focus on the lunar South Pole,
which is already shaping up into an area of competition
between the US and China.
China has a plan to send the Chang'e 7 mission
to the lunar South Pole this year.
It's schedules to go late in the year.
And the mission will target a search for water ice.
It'll include an orbiter, a lander, a rover,
and a so-called flying hopper that is supposed
to explore permanently shadowed craters up there.
And this is all a precursor towards China landing
a person on the South Pole of the Moon by 2030.
Of course, the US has got its own plan.
But I think that this is a fascinating race.
China wants to plant a flag on the Moon
when it puts a person onto the South Pole.
This is a big part of the China lunar missions.
And I think it's going to be fascinating to watch.
Really interesting, James.
I think space is a big theme this year.
We're going to have space X from Elon Musk,
IPOing at some point.
It's going to be the mega IPO of the year.
And I just listened to one of his podcasts.
It's three hour podcasts recently.
And he's talking a lot about space being the next frontier
for data center growth.
And that even though compute may be limited
on the energy frontier in the US and the West,
the sky's the limit, so to speak.
Well, space is the limit when it comes to launching data centers
into space using space X technology.
So it's interesting that this is coming at a time
where you've got a lot of discussion
in Silicon Valley about space.
And again, it takes us back to the Cold War
where really you see the criss-crossing
of technology, geopolitics, space.
It's super interesting.
So my prediction is also somewhat left field.
I want to bring back North Korea.
It seems like we've forgotten a little bit
about Kim Jong Un and Pyongyang.
And he's certainly probably watching the Iran situation
slightly worried about what Trump may do.
But in the case of North Korea,
they have a more advanced nuclear weapons program.
Trump hasn't really made any verbal announcements
or really gone out after a rocket man.
In fact, he seems to want to have a good relationship with him.
I think if we do see China summit coming soon,
even though I expect that to be delayed somewhat,
it could well be that North Korea comes back
to the attention of Trump and his another era
in which he may either want to exert pressure on Kim
or have some kind of revival or renewal
and negotiations about nuclear containment.
Or even although I think Kim watching what's happening
around is probably more emboldened
to expedite his nuclear weapons program.
I think he's taken away from what's happening around
is that if only I had nuclear bombs,
I would not be in the position that Tehran is in right now.
I think North Korea will come back
and haunt the US-China relationship as it is want to do.
All right, that's all for this episode.
Thank you for listening to China Decode.
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