China Decode: What Trump’s War With Iran Means for China and Global Oil

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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.

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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.

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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.

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