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

Oil markets are rattled, Trump is escalating, and China is speaking out. In this episode of China Decode, Alice Han and James Kynge break down how China is responding after Trump’s strikes on Iran — and what soaring oil prices mean for Beijing’s energy security and global strategy. Is this about principle, protecting its oil lifeline, or quietly capitalizing on U. S. distraction? Then they turn to China’s next Five-Year Plan and its aggressive push into AI and advanced manufacturing. Is Beijing accelerating economic decoupling for good? And finally, a fatal crash involving a Chinese EV sparks a nationwide safety rethink. Does this dent China’s global EV ambitions — or make them stronger? Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

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• 1:29Alice Han?

  Before we start today's episode, a quick note about another show in the Prof G Media world: Raging Moderates with Scott Galloway and Jessica Tarlov is now five days a week, with new episodes coming every weekday evening. It's a show that is very helpful for making sense of US politics right now. If you're not already subscribed, you definitely want to check it out. Find Raging Moderates on YouTube, as well as Apple Podcasts, Spotify, and everywhere else. Now here's the show.

• 1:58James Kynge?

  I don't see this as primly motivated by the US 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 US 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.

• 2:25Alice Han?

  Welcome to China Decode. I'm Alice Han.

• 2:27James Kynge?

  And I'm James Kynge.

• 2:29Alice Han?

  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 rushed to respond to the situation in Iran. Despite this, the Shanghai A-share index rose about 0.5%. The Hang Seng 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.

• 3:09Alice Han?

  In fact, 76 stocks in the 88-member Hang Seng index closed down in the day. Oil companies were obvious winners, China National Offshore Oil Corporation closed up more than 5%, and PetroChina more than 4%. All right, let's get right into it. As the Middle East teeters after the killing of ally Khamenei, 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 blatant killing of a sovereign leader", with Foreign Minister Wang Yi warning the region could be pushed into a dangerous abyss.

• 3:50Alice Han?

  Russia's Vladimir Putin echoed that language, calling the strike "a violation of international law", just as Tehran installs 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 it 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.

• 4:34Alice Han?

  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 Khamenei. Now China is calling for a ceasefire. There is obviously the oil strategic question at risk, you know, about 15% of seaborne 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?

• 5:06James Kynge?

  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 and 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

• 5:48James Kynge?

  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.

• 6:28James Kynge?

  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, you know, 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, you know, my first kind of tentative reflection on this would be that...

• 7:12James Kynge?

  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 primally 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

• 7:54James Kynge?

  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

• 8:37James Kynge?

  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

• 9:22James Kynge?

  That you've given. Of course, oil imports from Iran is one major one. The situation in the Straits of Hormuz 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 a key question that we should also bear in mind. What's your sense of of how this is going to play out, whether this plays to China more or to the US more?

• 10:05James Kynge?

  Whether this really does inflict kind of even more severe pain into the US-China relationship?

• 10:12Alice Han?

  All right. 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 and 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 insuie generous. Iran is, I think, an example of what we've seen in Trump 2.0.

• 10:54Alice Han?

  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, you know, do the kind of regime changer 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 Bibi Netanyahu, the Israeli Prime Minister's very aggressive stance on really trying to annihilate the Iranian Republic as well as its nuclear program.

• 11:36Alice Han?

  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 own 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 Bibi 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

• 12:19Alice Han?

  of International Studies, which is a known think tank in Shanghai. And in this article by Jinliang Shang, he talks about the fact that it's really Israel that is in the driving seat when it comes to the airstrikes 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

• 12:58Alice Han?

  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 of weeks, especially with Takeuchi, 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 Takeuchi could get Trump and his team more interested in being combative on China, on the Taiwan issue. Now, I'm not sure if I

• 13:43Alice Han?

  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-Shi summit 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 thirty one to April two. I would take the bet that that may get delayed. I, 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.

• 14:25Alice Han?

  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.

• 15:08Alice Han?

  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.

• 15:53Alice Han?

  My own feeling is that that gets delayed. But to walk it back again to the China-Iran relationship, a lot of people are saying that this is a big deal for China. China is obviously a massive importer of Iranian crude.

• 16:08Alice Han?

  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 premia being attached to the Strait of Hormuz if that actually gets blocked.

• 16:49Alice Han?

  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 a 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.

• 17:34James Kynge?

  Absolutely, Alison. I think this really shows up China's economic statecraft, or the limitations of that economic statecraft. 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 are rivals 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 at the constituent parts of China's commercial relationship with Iran, it really is quite staggering.

• 18:17James Kynge?

  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 seaborne oil imports.

• 18:58James Kynge?

  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 Habedan, and also a 2.1 billion US dollar project to upgrade a big oil refinery at Abadan. Also, in terms of technology and surveillance, firms like Huawei and ZTE, two of the big

• 19:38James Kynge?

  Chinese telecommunications companies, have built much of the telecommunications backbone in Iran, and, you know, 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 statecraft, in particular in terms of its courting of US rivals in the global south.

• 20:21Alice Han?

  Really interesting, thanks, James. Well, we'll be back with more after a quick break. Stay with us.

• 20:35Scott Galloway?

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• 22:58Scott Galloway?

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• 24:05Alice Han?

  Welcome back. This week, China is preparing to formally adopt its 15th five-year plan during the 2026 II Sessions, the country's most important annual political gathering, setting the blueprint for the next half-decade of economic and technological strategy. After navigating COVID 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.

• 24:46Alice Han?

  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 chokepoint 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 in this next five-year plan?

• 25:18James Kynge?

  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 loud applause when he mentions the word self-reliance. You

• 25:56James Kynge?

  know, let's see if I'm right about that. So I think that the 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, biomanufacturing, new materials, robotics, the list goes on and on and on. But it's crucial to recognize that the whole impetus

• 26:38James Kynge?

  behind this now, not maybe the whole, but 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 just wanna. I've just been doing a little bit of research on on various AI products in China. And I just want to mention one of them to give people a sense of of where China is.

• 27:19James Kynge?

  Because China's approach to AI, and we'll see this in the fifteenth 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 Quark 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.

• 28:01James Kynge?

  Or the road is 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 Taobao, 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.

• 28:43James Kynge?

  Alibaba, I have no commercial relationship with Alibaba. But they sell for about three hundred and fifty six US dollars. And they're all animated by Alibaba's key AI program, which is called Qwen or Qwen. 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 fifteenth five year plan is that China intends by twenty thirty for AI and AI devices to have a usage rate of over ninety percent in the Chinese economy, essentially, you know, creating an AI infrastructure

• 29:27James Kynge?

  for the first time. And then by twenty thirty five, 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?

• 29:41Alice Han?

  Well, I think that for viewers listening to understand the importance of five year plans, this is really, if you think about it, 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 pour 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 turbines, solar panels,

• 30:23Alice Han?

  EVs, batteries really benefited from that kind of whole of government approach embedded in five year plans. So it can't be understated 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 news 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 gotten a lot of talk in the run up to the Central Economic Work Conference in 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

• 31:04Alice Han?

  actually in the minutiae of the government work report to do that. There's talk about subsidies, consumer subsidies for the services sector, maybe potentially even further, you know, price reductions in certain sectors like healthcare 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.

• 31:47Alice Han?

  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. These are going to be key areas where a lot of R and D, I think, is going to be geared towards. And as we've talked previously, biotech and pharma, where China has a known domestic advantage in terms of the clinical trials pipeline,

• 32:30Alice Han?

  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, you know, 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 are overtaking them in autos and EVs, maybe in the cutting-edge in AVs

• 33:14Alice Han?

  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 she 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.

• 33:56Alice Han?

  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, and 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 tiers, where really, they still remain behind the Americans.

• 34:39Alice Han?

  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 takeaway from this next five-year plan. All right, let's take one last quick break. Stay with us.

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• 37:05Alice Han?

  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.

• 37:50Alice Han?

  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?

• 38:08James Kynge?

  I think it might well, you know, I mean, I, I, I, 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, is using his fist against the, the, 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 engulfed by flames and, and,

• 38:48James Kynge?

  you know, it really is, it really is a tragic scene. I think that, you know, obviously the investigators have now made a determination on this and they've said that the doors could not be opened 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, obvious, 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

• 39:30James Kynge?

  I do, 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, and, you know, and China's move into overseas market will continue. But what's your sense, Alice? How are you seeing it?

• 39:51Alice Han?

  I mean, this is definitely bad PR for Xiaomi itself, but it's coming at 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 at an 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 aggregately 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

• 40:34Alice Han?

  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 de-sinocize or reduce the association with the core Chinese brand in order to cater to a foreign market.

• 41:16Alice Han?

  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, you know, 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 it because really the technology hasn't really been scaled out en masse. Certainly, if you go to, you know, 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 en masse yet in either countries. And that I think might open a new can of worms in terms of regulations.

• 42:01Alice Han?

  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 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, you know, a whole nother level of of control away potentially from 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, you know, stories about European countries' concerns

• 42:45Alice Han?

  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?

• 43:09James Kynge?

  Yeah, I mean, I think it's a really good point that you make, Alice. I think that with a lot of Chinese innovations, there is this kind of mentality of move fast and break things, you know, and, you know, China's moving so quickly to unveil all of these technologies. And a lot of these technologies are new or new ish, you know, so clearly some things are going to go wrong. I think people should be really quite aware of that.

• 43:35Alice Han?

  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?

• 43:43James Kynge?

  Okay, 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.

• 44:23James Kynge?

  China has a plan to send the Chang'e seven mission to the lunar south pole this year. It's scheduled 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, you know, this is a fascinating race.

• 45:02James Kynge?

  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.

• 45:15Alice Han?

  Really interesting, James. I think space is a big theme this year. We're going to have SpaceX from Elon Musk IPO-ing at some point. It's going to be the mega IPO of the year. And he's, I mean, I just listened to one of his podcasts, his three-hour podcasts recently, and he's talking a lot about, you know, space being the next frontier for data center growth. And that, you know, even though compute may be limited on the energy frontier in the US and the West, you know, the sky's the limit, so to speak, or space is the limit when it comes to launching data centers into space using SpaceX 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 crisscrossing of

• 46:00Alice Han?

  of technology, geopolitics, space. It's 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 in Pyongyang. And he certainly is probably watching the Iran situation, slightly worried about what Trump may do. But, you know, in the case of North Korea, they have a more advanced nuclear weapons programme. Trump hasn't really made any verbal announcements or really gone out after Rocketman. In fact, he seems to want to have a good relationship with him. I think if we do see a China summit coming soon, even though I expect that to be delayed

• 46:43Alice Han?

  somewhat, it could well be that North Korea comes back to the attention of Trump and is another area in which he may either want to exert pressure on Kim or have some kind of, you know, revival or renewal of negotiations about nuclear containment. Or even although I think Kim, watching what's happening in Iran, is probably more emboldened to expedite his nuclear weapons programme. I think his takeaway from what's happening in Iran is that if only I had nuclear bombs, I would not be in the position that Iran is in right now. I think North Korea will come back and halt the US-China relationship as it wants to do. All right, that's all for this episode.

• 47:27Alice Han?

  Thank you for listening to China Decode. This is a production of Prof G Media. Our producers are David Toledo, Eric Janikas and Ness Smith-Sabodoff. Thank you to Catherine Dillon, Drew Burrows, Billy Bennett, Dan Shalan, William Flynn, Jessie Millwood and Gil Espinoza, production help every week. Make sure to follow us wherever you get your podcasts so you don't miss an episode and talk to you again next week.

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