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Hu Shisheng proposes “three lists” to protect cooperation from disputes. Liu Zongyi explains why payments, industrial ties, and border stability offer openings—and why BRICS’ political direction remains contested.

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Saturday, September 12, 2026

The Takeaway

A simulated AI-powered attack on WeChat has exposed the vulnerability of a platform embedded in China’s payments, communications and government services—adding urgency to U.S.–China safety talks ahead of the expected September 24 Trump–Xi summit. Yet allegations of model theft and Huawei’s criminal trial show how difficult cooperation remains. Xi’s first India visit in seven years offers a parallel test of selective rapprochement, while Manila’s public confrontation with Beijing underscores persistent maritime tensions.

Headlines tell you what happened. Chinese-language sources help you understand how Beijing sees it.

Today’s briefing shows why that distinction matters—from AI security debates to Chinese analysts’ interpretations of Xi’s India visit.

Go deeper with the China OSINT Course and sharpen how you read China beyond the headlines.

At Terton Intelligence, we recently launched a new news tracking product: tertonintel.com/watch. The news feed updates every hour, and it’s free to all.

1. Mock WeChat attack exposes China’s AI security dilemma

The Big Picture: A small California security team demonstrated an AI-built tool that could potentially compromise millions of WeChat accounts within hours, according to the New York Times’ account of the simulated attack. The demonstration raises the stakes for protecting digital infrastructure as increasingly capable hacking tools become accessible to actors without government backing.

The Details:

• The demonstration: Palo Alto security company Calif said it built WeWorm in a little over a week. The tool could hijack an account and propagate through calls to the user’s contacts without recipients answering. This was a demonstration of potential compromise, not a reported breach of millions of accounts.

• The exposure: WeChat serves 1.4 billion monthly users. Its integration into messaging, payments, business and government services means a widespread disruption could affect essential daily transactions.

• The disclosure: Calif said it notified Tencent, WeChat’s owner, and the White House. The company says it develops such tools to strengthen defenses rather than sell them.

• Beijing’s response: Foreign Ministry spokesperson Mao Ning said she was unfamiliar with WeWorm when asked on Wednesday. Separately, China has issued guidelines governing AI agents and is developing more than a dozen cybersecurity standards, the Times reports.

• The cooperation problem: Chinese firms must first report discovered vulnerabilities to the Ministry of Industry and Information Technology, complicating expectations of reciprocal disclosure to foreign companies.

• The proposed safeguards: Chinese scholars have suggested voluntary lists of prohibited AI-enabled cyber activities and protected categories of critical infrastructure. Experts cited by the Times see crisis communication as a more plausible near-term outcome than restrictions on AI development itself.

Between the Lines: The same capabilities that help defenders discover weaknesses can help attackers exploit them. Better defensive models may therefore look threatening to the other side, encouraging an arms race even when both governments describe their investments as protective.

Why It Matters: WeWorm makes the safety debate concrete: a vulnerability in one widely used service could have national consequences. Incident notification, responsible disclosure and emergency communication are practical tests of whether Washington and Beijing can cooperate despite their rivalry.

2. Manila turns Beijing’s handwritten objection into a public confrontation

The Big Picture: Philippine Defense Secretary Gilberto Teodoro used an unsolicited note at the September 8 Seoul Defense Dialogue to challenge China’s rejection of the 2016 South China Sea arbitration award, bringing the dispute directly onto an international security stage.

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The Takeaway

Xi Jinping spent the week cutting into his own military inner circle while the PLA kept adding hardware and presence. The NPC formally removed Zhang Youxia and Liu Zhenli from the state Central Military Commission, stripped allied officers from the legislature, and left the once seven-member state CMC with two names: Xi and discipline chief Zhang Shengmin. That personnel shock landed in the same seven days Beijing rejected U.S. Iran sanctions, ran a third straight monthly record of official vessels east of Taiwan, and flight-tested the GJ-21 as Type 076 entered final trials. Taipei and Manila answered with F-16Vs, a multi-year drone law, Anduril munitions, and the last BrahMos battery. Summit language about “controllable” differences is running behind a command structure that is thinner—and a First Island Chain that is harder.

1. Xi purges his own military circle; state CMC shrinks to two

The Big Picture

China’s legislature removed two Xi-linked senior officers from their remaining state posts and stripped several other generals of lawmaker status, converting a January discipline probe into irreversible political demolition ahead of the October plenum—and doing it to men long treated as loyalists.

The Details

• The Catalyst: On 28 August the NPC Standing Committee dismissed Zhang Youxia as vice chairman of the state Central Military Commission and Liu Zhenli as a CMC member, after both were placed under investigation in January for “serious violations of discipline and law.” Xinhua carried the decision. A January PLA Daily commentary had already accused the pair of betraying Party trust and undermining absolute Party control of the military.

• The Loyalists: Zhang was the PLA’s highest-ranking uniformed officer, a Politburo member, a family friend of Xi, and a Sino-Vietnamese War veteran. Zhong Shaojun—former CMC General Office director and later political commissar of the National Defense University, with a career that overlapped Xi’s—was removed as an NPC deputy. Neither profile fits a routine anti-graft footnote.

• The Wider Cut: Ju Qiansheng, former commander of the now-defunct Strategic Support Force, lost his legislative seat; intermittent public appearances had already raised questions about his status. On 26 August the CPPCC removed Zhao Zongqi, former Western Theater Command commander during Doklam (2017) and Galwan (2020), from the advisory body. Twelve NPC deputies lost seats in the same sweep.

• The Legal Mechanism: NPC membership had conferred immunity from arrest or prosecution. Stripping the seats clears the path to criminal process. Friday’s action hit the state CMC. China runs parallel Party and state commissions; Zhang and Liu have not been publicly stripped of Party CMC titles, though the two bodies function as one institution.

• Command Residue: The formerly seven-member state CMC now has two active names: Xi Jinping and Vice Chairman Zhang Shengmin, the discipline specialist. Operational command experience at the apex is thinner than at any point in the Xi era.

• Between the Lines: Chinese politicians almost never recover from this class of investigation. Formal charges and a fuller narrative are the live bet for the October plenum. The campaign is no longer only about “other people’s” networks.

Why It Matters

A hollowed apex command does not freeze gray-zone operations or weapons testing—this week proved that—but it does raise questions about decision speed, joint-staff competence, and whether October produces a rebuilt CMC or a longer vacuum. For Taiwan and India contingencies, the relevant fact is not loyalty theater. It is that the officers who ran joint staff, strategic support, and the India-facing theater are out, and replacements are not yet visible.

2. Iran sanctions collide with summit choreography

The Big Picture

Washington’s “Operation Economic Outcast” and follow-on Hong Kong designations tested the May 2026 trade-truce framework just as Wang Yi told the U.S. ambassador to “remove interference and overcome obstacles” ahead of a planned 24 September Xi-Trump meeting.

The Details

• The Catalyst: Treasury targeted dozens of entities trading with Iran, including mainland and Hong Kong firms. A later hit on Hong Kong’s Kameng Trading Ltd alleged it fronted for a sanctioned Iranian exchange house. China remains Iran’s largest oil buyer.

• Beijing’s Line: Lin Jian called the measures illicit; Wang Yi urged implementation of the May consensus and manageable differences.

• The Scope: Designations still sit below the largest Chinese banks—the threshold that would change retaliation calculus. Track 1.5 contacts, including Liu Haixing, argued for “normal stability.”

• Between the Lines: Firm-level hits can be absorbed. Core-bank designations would reopen rare-earth and supply-chain risk. A business delegation on Xi’s trip and a truce extension remain possible if atmospherics hold.

Why It Matters

Containing this dispute is the first test of whether September produces economic guardrails or another managed crisis.

3. Gray-zone presence east of Taiwan becomes the new baseline

The Big Picture

Taiwan logged 118 sightings of mainland coast-guard, survey, and other official vessels in the first 24 days of August—above July’s 117 and June’s 111—concentrated in the Philippine Sea.

The Details

• The Catalyst: The surge followed Japan–Philippines maritime-boundary talks in late May; Beijing treated those talks as touching claimed waters.

• The Scope: A small number of hulls ran most of the operations, including hailing nearly 200 commercial ships. Pre-June monthly highs rarely exceeded 50.

• Between the Lines: Taiwan and outside monitors read quarantine rehearsal: normalize jurisdiction along the First Island Chain and raise the cost of Pacific reinforcement.

The Bottom Line

Three consecutive record months is posture, not an exercise spike.

4. Taiwan stacks airpower and unmanned mass

The Big Picture

The first two of 66 F-16V Block 70s left the U.S. line for Chihhang, while the legislature locked in a NT$240 billion six-year unmanned-systems framework and an NT$26.9 billion Anduril Altius contract.

The Details

• F-16V: Serials 6727 and 6728 staged through Hawaii and Guam. Existing AIM-120C-8, AIM-9X, and AGM-88 HARM are employable on arrival; JSOW slips to 2027–2028. Full 66-jet run now stretches through 2027–2028.

• Unmanned law: Opposition majorities passed their own bill over the Cabinet special budget. Principle funding: NT$40 billion a year for six years, with room to rise. Priority: indigenous coastal attack and reconnaissance drones plus small one-way USVs.

• Anduril: 1,554 Altius-700M loitering munitions and 478 Altius-600ISR drones; first deliveries targeted Q4 2026, full order by mid-2033. The 700M’s about 160 km reach covers the Strait and near-China coastal waters.

• Between the Lines: Domestic production is the blockade hedge. U.S. munitions fill range and warhead gaps. Both tracks proceed while Washington still treats Taiwan arms as a summit variable.

Why It Matters

Hardware is arriving as east-coast patrols hit records. That is a political fact for September: self-reliance plus U.S. industrial integration, not a freeze.

5. PLA naval aviation and the Type 076 close a loop

The Big Picture

Apparent GJ-21 naval stealth-drone flight tests coincided with final sea trials of the Type 076 amphibious ship Sichuan.

The Details

• GJ-21: Naval variant of the GJ-11 flying-wing UCAV; videos geolocated to Huludao, Liaoning.

• Sichuan: About 40,000-tonne hull with electromagnetic catapult and arresting gear for unmanned fixed-wing aircraft, helicopters, and landing craft.

• Between the Lines: The pairing puts low-observable strike/ISR on a flexible amphibious deck. Capability work continued through the same week the apex command was gutted.

Why It Matters

Weapons programs are outrunning personnel reconstruction. That gap is the operational risk, not a pause.

6. Philippines completes the first BrahMos coastal triad

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Newsletter follows.

Taiwan is spending more to defend itself, Beijing is probing for openings in Seoul, and Washington is trying to negotiate with its adversaries without weakening confidence among its partners. Together, this week’s developments reveal a regional struggle over the credibility of American power.

This week brought significant developments across the region, including Taiwan’s record defense budget, Wang Yi’s visit to Seoul, and President Trump’s decision to scale back U.S.-South Korea military exercises.

China is applying sustained military and political pressure while seeking weaknesses in the relationships underpinning the current Asian security order. The United States remains the region’s most powerful military actor, but its policy is becoming more transactional and less predictable. Allies and partners are therefore trying to determine which American commitments are durable, which are conditional, and which might be altered to secure a trade agreement, diplomatic summit, or breakthrough with an adversary.

Taiwan’s response is to invest more heavily in its own defense. Beijing’s response is to encourage South Korea to place a greater distance between itself and Washington. North Korea is testing whether a reduction in allied exercises reflects a deeper weakening of deterrence.

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Taiwan is turning anxiety into defense spending

Taiwan’s cabinet has approved a record defense budget for 2027, increasing planned spending by 18.2 percent to between NT$1.12 trillion and NT$1.123 trillion, or approximately US$35.1 billion to US$35.3 billion. It is the first Taiwanese defense proposal to cross the NT$1 trillion threshold.

The increase is a direct response to the military environment around the island. PLA aircraft, naval vessels, and coast guard ships now operate near Taiwan with growing frequency. Since 2022, Beijing has also conducted repeated large-scale exercises that rehearse elements of a blockade, encirclement, and joint military campaign.

Each exercise gives the PLA another opportunity to gather intelligence, practice coordination, and make elevated military pressure appear routine. It also forces Taiwan to spend money and operational energy responding to Chinese activity that remains below the threshold of open war.

President Lai Ching-te has pledged to keep defense spending above 3 percent of GDP and raise it to 5 percent by 2030. Under the government’s NATO-comparable calculation, which includes the Coast Guard, military pensions, and special defense funds, the 2027 proposal would equal 3.01 percent of projected GDP. It would also account for nearly 29 percent of Taiwan’s central government budget.

The largest single increase is in military investment, which would rise by NT$97.5 billion to NT$259.1 billion. That money is intended to support weapons, ammunition, military operations, drones, missiles, and other capabilities designed to make Taiwan more difficult to blockade or invade. A substantial share will also cover scheduled payments for American arms packages that have already been approved.

The scale of the proposal reflects more than fear of the PLA. It also reflects Taiwan’s reading of American politics.

Washington has repeatedly pressed Taipei to spend more on defense and assume greater responsibility for its own security. That expectation is reasonable. Taiwan needs larger ammunition reserves, more mobile missile systems, cheaper drones, stronger coastal defenses, better-protected communications, and forces that can continue operating even after airfields, ports, command centers, and civilian infrastructure have been attacked.

For years, Taiwan’s defense planning was criticized for favoring expensive conventional platforms over resilient systems suited to an asymmetric campaign. The new budget suggests that Taipei is beginning to take those warnings more seriously.

Under President Trump, however, American support is often expressed in explicitly transactional terms. Taiwan’s security is discussed alongside its defense spending, semiconductor production, trade balance, and purchases of American weapons. That rhetoric creates the impression that U.S. support must be continually earned through financial or economic concessions.

Taipei is therefore buying two forms of insurance. The military investment is intended to impose higher costs on a Chinese attack. In contrast, the political investment is meant to show Congress and the White House that Taiwan is not waiting passively for the United States to rescue it.

The difficulty is that a record budget does not automatically create a more capable military. Taiwan’s opposition-controlled legislature must still approve the proposal. The previous budget took nearly a year to pass. It was subjected to deep cuts, raising doubts about whether the full buildup of ammunition, missiles, drones, and asymmetric systems will proceed on schedule.

Procurement delays are another concern. Weapons may arrive late, new systems may not be properly integrated, and maintenance or training may receive less attention than high-profile purchases. Taiwan can announce a large budget, but deterrence will ultimately depend on whether that money produces dispersed stockpiles, survivable command networks, functioning equipment, trained units, and sufficient endurance for a prolonged conflict.

Even with those limitations, the political direction is clear. Taiwan is converting strategic anxiety into procurement dollars as Chinese pressure rises and American policy becomes harder to predict.

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Washington’s unpredictability is giving Beijing room in Seoul

While Taiwan is responding to uncertainty by spending more, China is using the same uncertainty to improve its position in South Korea.

Chinese Foreign Minister Wang Yi made his first standalone visit to Seoul in five years. In meetings with President Lee Jae-myung, Foreign Minister Cho Hyun, and National Security Adviser Wi Sung-lac, Wang conveyed greetings from Xi Jinping and encouraged South Korea to pursue a friendly, non-bloc policy toward China.

Beijing wants Seoul to avoid becoming firmly embedded in a U.S.-led coalition intended to constrain Chinese influence. It is particularly concerned about American efforts to coordinate regional policy on Taiwan, advanced technology, semiconductor controls, missile defense, and military cooperation among the United States, South Korea, and Japan.

President Lee emphasized the full recovery of China-South Korea relations and called for closer coordination on Korean Peninsula issues. He also raised the possibility of multiparty talks that could eventually replace the Korean War armistice with a more permanent peace regime.

China’s appeal has obvious limitations. South Korea depends on its alliance with the United States to deter a nuclear-armed North Korea, while Beijing has repeatedly shown that it is unwilling to impose serious costs on Pyongyang. Seoul may want better relations with China, but it has little reason to view Beijing as a substitute security partner.

President Trump nevertheless gave Wang an opening by abruptly ordering the Pentagon to “substantially reduce” the annual Ulchi Freedom Shield exercises.

The drills were shortened from 11 days to five. Many live-fire components were canceled or transferred into simulations, and the counteroffensive phase was removed. Trump reportedly cited the cost of the exercises, his relationship with Kim Jong Un, and South Korea’s refusal to participate in U.S. actions against Iran.

There may be a legitimate diplomatic argument for adjusting the exercises. Military drills should support strategy rather than continue unchanged by habit. If a temporary reduction can open a realistic channel to Pyongyang, testing that possibility may be worthwhile.

The problem lies in how the decision was made. South Korean officials publicly indicated that they had received no warning of Trump’s directive.

An alliance depends on consultation as much as it depends on troops, weapons, and treaties. When Washington changes a major element of combined readiness without first coordinating with Seoul, it suggests that South Korean security arrangements can be altered to serve a separate American negotiation.

That perception was useful to Beijing. Wang could present China as an advocate of consultation, communication, and regional stability at the same moment that Washington appeared to be revising alliance policy unilaterally.

China does not need South Korea to abandon the United States. Such a goal would be unrealistic. Beijing benefits if Seoul becomes more hesitant about supporting U.S. policies on Taiwan, export controls, regional missile defense, or trilateral security cooperation with Japan.

A small amount of doubt can produce meaningful political distance. That is the opening Beijing is trying to widen.

North Korea tested the diplomatic theory immediately

The response from Pyongyang came shortly after Wang completed his meetings and left South Korea.

North Korea launched more than 10 short-range ballistic missiles from the Pyongyang area toward the East Sea. The missiles traveled approximately 300 kilometers.

Kim Yo Jong had already dismissed the reduced exercises as insufficient, indicating that Pyongyang did not regard Washington’s decision as a meaningful change in U.S. hostility. China offered no public criticism of the launches.

The timing does not establish coordination between Beijing and Pyongyang, but it does expose the risk in expecting unilateral restraint to produce an immediate reciprocal response.

Washington reduced the duration and scope of its exercises, yet North Korea answered with another missile demonstration. China, meanwhile, was able to call for dialogue without imposing any visible cost on Pyongyang for escalating the situation.

The reduction in exercise may still create space for future talks between Trump and Kim Jong Un. Diplomacy with North Korea has repeatedly stalled, and a change in approach may be necessary. The concern is that Washington reduced a visible element of allied readiness before securing any North Korean commitment in return and apparently without consulting Seoul.

Other regional governments will watch this closely. Japan, Taiwan, and the Philippines will not view Ulchi Freedom Shield as an isolated Korean Peninsula issue. They will ask whether American military posture is being managed through a coherent regional strategy or adjusted according to short-term political considerations.

China will make the same assessment. If Beijing concludes that alliance commitments can be weakened through cost complaints, personal diplomacy, or disputes unrelated to regional defense, it will have an incentive to apply pressure at those points.

The P-8 transit highlighted both American presence and absence

A U.S. Navy P-8A Poseidon maritime patrol aircraft flew through the Taiwan Strait on August 21, using international airspace in a mission the Seventh Fleet said demonstrated Washington’s commitment to a free and open Indo-Pacific. Chinese forces tracked the aircraft throughout the transit and later described the situation as under control. American ships and aircraft conduct such passages periodically to challenge Beijing’s attempt to treat the strait as a space in which China can restrict foreign military activity. The timing was also significant because Xi Jinping is expected to visit Washington for talks with President Trump. Reuters reported the transit on August 22. China has imposed serious restrictions on rare-earth minerals on U.S. businesses while competing intensely for access to advanced semiconductor chips.

The flight was a visible demonstration of continued American access, but it also drew attention to what was missing from the region. The USS George Washington, the Navy’s forward-deployed carrier based in Japan, had been redirected to the Middle East to relieve the long-deployed USS Abraham Lincoln. Its departure left the Western Pacific without a U.S. aircraft carrier, at least temporarily, while the Theodore Roosevelt remained in San Diego following the Rim of the Pacific exercise. The George Washington entered the U.S. Central Command area on August 19 with the cruiser USS Robert Smalls and destroyer USS Shoup. USNI News confirmed its arrival in the Middle East.

A carrier is not the only measure of American combat power, and its temporary absence does not mean the United States has abandoned the Western Pacific. The Seventh Fleet retains submarines, destroyers, aircraft, bases, and access to allied facilities throughout the region. Even so, the contrast carries political weight. Washington flew a surveillance aircraft through the Taiwan Strait to affirm its presence at the same moment that demands in the Middle East had pulled its most visible symbol of naval power away from Asia.

I view the P-8 plans transit — which have become rare in the second Trump presidency — as a signal to Beijing that it shouldn’t assume that Trump has shifted his position on China. Meanwhile, these missions are conducted to collect data near the Taiwan Strait; they may be a response to certain military developments linked to the Taiwan Strait and the South China Sea. China’s latest aircraft carrier, the Fujian, was seen south of Yulin Naval base on August 14 and 21. We have also heard about China’s intense construction activity at Antelope Reef, west of Sanya, which was in the news.

This helps explain why Taiwan’s defense budget cannot be viewed solely as a response to the PLA. Taipei is also watching how American forces are divided between theaters. The P-8 transit showed that the United States remains willing to operate in contested areas, but the carrier gap demonstrated the limits of sustaining a powerful presence in Asia while simultaneously supporting an extended conflict in the Middle East. For Taiwan and other regional partners, the question is not whether the United States can still appear in the region. It is whether Washington can maintain sufficient forces there when several crises demand attention at once.

Beijing’s strategy is to work at the edges of confidence

These developments show how the regional contest is unfolding below the threshold of a confrontation.

Around Taiwan, Beijing is using aircraft, warships, coast guard vessels, and military exercises to exhaust the island, normalize PLA activity, and test whether foreign support will weaken over time. In South Korea, Chinese diplomacy is taking advantage of alliance friction to encourage greater distance from Washington. On the Korean Peninsula, Pyongyang is testing whether reduced exercises indicate a more durable decline in U.S. resolve. In bilateral diplomacy, China is forcing Washington to balance the protection of detained citizens against its desire for a stable summit with Xi.

None of these efforts requires a decisive Chinese victory. Beijing benefits from smaller changes that accumulate: a Taiwanese procurement program delayed by domestic politics, a South Korean government that consults Washington less confidently, a military exercise reduced without allied agreement, or an American administration that treats security commitments as negotiable instruments.

This is why transactional diplomacy can impose strategic costs even when it produces short-term savings or concessions.

Taiwan should spend more on its defense, and South Korea should contribute meaningfully to the alliance. Military exercises can be adjusted when circumstances change. Washington should also negotiate with Beijing and Pyongyang when diplomacy offers a plausible way to reduce risk.

Those decisions become dangerous when allies do not understand the strategy behind them or discover that the terms have changed without consultation.

Regional confidence is shaped by the accumulated effect of such choices. Wang Yi’s visit became more consequential because it coincided with an American decision that unsettled Seoul. North Korea’s missile launches showed that reducing exercises did not automatically produce restraint. Min Zin’s designation placed the safety of an American citizen directly inside the diplomacy of an expected Trump-Xi summit. Taiwan’s defense budget, meanwhile, revealed how a partner prepares when it believes American support remains vital but may no longer be unconditional.

Taken together, the developments show that governments are judging U.S. credibility through behavior rather than speeches. They are watching whether Washington consults its allies before changing military policy, follows through on weapons deliveries, protects its citizens, and responds consistently to coercion while negotiating with Beijing and Pyongyang.

Deterrence depends partly on weapons, troops, budgets, and industrial capacity. It also depends on expectations. China, Taiwan, North Korea, South Korea, and Japan are constantly estimating what the United States is likely to do during a crisis.

When Washington becomes less predictable, partners hedge and adversaries test. Beijing then gains an opportunity to present itself as the steadier actor, even though Chinese military and political pressure helped create the region’s insecurity.

The central question is no longer simply whether the United States has enough power to compete with China. It is whether American power is being used consistently enough for allies, partners, and adversaries to make reliable decisions around it.

That contest over confidence may prove as consequential as the region’s visible buildup of ships, missiles, drones, and military budgets.

Additional reading

• China’s Next Aircraft Carrier Is Taking Shape — The War Zone, August 22

• Taiwan Cabinet Approves Record $35.1 Billion for Defense in 2027 — Bloomberg

• Taiwan proposes record US$35b defence budget for 2027 as PLA’s pressure grows — South China Morning Post

• EXCLUSIVE: US designates American held by China as wrongfully detained — Reuters

• US designates academic Min Zin as ‘wrongfully detained’ in China — South China Morning Post

• US, South Korea to cut length, scope of military drills after Trump order — Reuters

• North Korea fires 10 missiles day after Trump curtails South Korea joint drills — The Guardian

• Commentary: Arunachal Pradesh border dispute looms over thaw in China-India ties — CNA

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Two things happened in the same week that look unconnected but aren’t. Taiwan wrapped up the live fire phase of its largest war games since 1984, and the Pentagon’s chief Indo-Pacific strategist stood in Manila and told Southeast Asia that America is “not leaving,” but also isn’t interested in being anyone’s protector for free. Read together, they sketch the shape of Washington’s actual Asia policy in 2026: less about new guarantees, more about who is willing to prove they can fight.

Han Kuang exercises underway from August 5 to August 14, 2026 are much more comprehensive and based on principles of preparing for real conflict.

Taipei residents have been told that banking, taxi and internet services will go down in different parts of Taiwan on different dates to prepare the civilians for a future conflict.

If you want to use the power of OSINT skills, please consider signing up for the China OSINT course by Terton Intelligence: https://www.tertonintel.com/course

Han Kuang 42: Taiwan tests whether it can fight without a script

Taiwan’s Han Kuang 42 live fire exercise ran August 5 to 14, mobilizing more than 20,000 reservists in the island’s longest running annual drill cycle. What made this year different wasn’t scale. It was structure. For the first time in the drill’s 42 year history, commanders were not given the full exercise script in advance, forcing units to improvise when the simulated PLA “aggressor” deviated from expected patterns. That’s a direct response to war gaming assumptions that China would try to decapitate Taiwan’s command structure in the opening hours of a conflict.

The drills leaned hard into US style methods. “Backbriefing,” where subordinate officers restate a commander’s intent back to confirm they understood the mission, not just the words, was formally incorporated for the first time. President Lai Ching te was moved overnight from the Presidential Office to the Hengshan Military Command Center as part of the “Wanjun Plan,” rehearsing continuity of government under a decapitation scenario . Newly delivered M1A2T Abrams tanks and the just established Littoral Combat Command, which unifies anti ship missiles, coastal artillery, mobile radar, and drones under one structure, both participated for the first time

Civilian integration was the other big theme: commercial flatbed trucks moved tanks between regions overnight, a local printer supported a reserve command’s logistics, and mobile internet speeds were deliberately throttled in parts of the country to simulate wartime telecom disruption . Taiwan also ran anti airdrop drills in Taipei and Miaoli and an NBC decontamination exercise in Hualien simulating a chemical attack by “Chinese spies,” language that tells you where Taiwan’s threat model has moved: not just missiles, but infiltration .

The politics underneath the drills matter as much as the drills themselves. President Lai wanted a US$40 billion special defense budget. The opposition controlled legislature cut that to US$24.8 billion. A separate US$14 billion arms sales package remains stuck pending Trump’s approval, and Trump himself called Taiwan arms sales a “very good negotiating chip” with Beijing after his May summit with Xi Jinping, adding he didn’t want to “travel 9,500 miles to fight a war” over the island. Analysts like NTU’s Lev Nachman frame the deepened US Taiwan military to military coordination visible in Han Kuang as a “silver lining” precisely because the political signals from Washington have been so inconsistent.

The doctrinal shift nobody outside Taiwan is discussing

The most consequential change in Han Kuang 42 isn’t a weapon system. It’s a scenario change. For 42 years, Han Kuang built around 「灘岸決勝」(beach decisive battle): stop the PLA at the shoreline. This year’s exercise formally replaces that with 「多域拒止」(multi domain denial): air, sea, land, cyber, and civilian assets combined to deny the PLA a clean path to any objective, not just the beach. Deputy Chief of Staff Lt. Gen. Hou Chia lun put it directly: “In the past it was always beach decisive battle. Now we have moved to multi domain denial”.

Tied to that is the first ever designation of 「反封鎖」(anti blockade) as the exercise’s core scenario, displacing the traditional anti landing (反登陸) focus. Taiwan’s defense establishment now assesses that Beijing is more likely to try to strangle the island (mines, missile exclusion zones, routine air and sea harassment cutting off energy and food resupply) than to attempt a costly amphibious landing outright. Chief of the General Staff Admiral Mei Chia shu framed this to troops during “spiritual combat readiness week”: “What truly deters enemies is no longer symbolic weapons, but sustainable combat strength and resilience”.

Weapon systems fielded or debuted

Hsiung Feng II/III (雄風二型/三型) anti ship missiles. Forward deployed to Penghu for the first time on August 9, positioning shore based “carrier killer” firepower at the geographic center of the Strait, able to strike PLAN vessels approaching from either east or west. Development and production run through the National Chung Shan Institute of Science and Technology (CSIST), Taiwan’s state defense R&D house. Hsiung Feng II is a high subsonic sea skimming cruise missile. Hsiung Feng III is supersonic, built to compress an adversary’s reaction window to seconds at terminal approach .

Thunderbolt 2000 (雷霆2000) multiple launch rocket system. Another indigenous CSIST design, deployed to simulate suppressing an amphibious flotilla approaching the coast before troops reach the beach .

Land based Sky Sword II / TC 2 (陸射劍二). CSIST’s mobile short/medium range air defense missile, with a 15 km engagement envelope, drilled around Taoyuan International Airport and its beaches, designed for rapid “shoot and scoot” survivability and layered with Sky Bow III, Patriot, and Stinger to plug low altitude gaps .

HIMARS (海馬士). The Army’s 58th Artillery Command ran cross region reinforcement drills, moving HIMARS launchers into tactical firing position in poor weather to demonstrate high mobility, precision long range strike reinforcement between operational zones .

M1A2T Abrams tanks. Taiwan’s full order of 108 units arrived by April 2026. This exercise marked their live fire combat debut, assigned to the 584th Armored Brigade defending Taoyuan International Airport alongside Clouded Leopard 8x8 IFVs, with engineers building obstacles against airborne and special operations landings .

Mine warfare layer. Min Jiang class rapid minelaying ships (each carrying 32 to 64 indigenous Wan Hsiang naval mines) paired with the Army’s incoming Volcano mine laying systems (timed detonation, magnetic sensor land mines), giving Taiwan a rapid sea and land mining capability to delay a crossing force .

M3 Amphibious Bridge and Ferry System. Used on the Tamsui River to position oil barrels, obstruction nets, and pre placed C4 charges across the Danjiang and Guandu bridges, sealing river approaches to Taipei within four hours. Anti drone equipment was also installed to force enemy UAVs to crash into the river .

Combat patch systems of record. The official HK42 patch itself foregrounds three systems: HIMARS, the ALTIUS 600M loitering attack drone, and the Patriot PAC 3, Taipei’s own signal of which capabilities it considers central to this year’s doctrine .

New command architecture

The Littoral Combat Command (濱海作戰指揮部), stood up July 1, 2026, got its first full evaluation this cycle. It unifies anti ship missile brigades, coastal defense artillery, mobile radar, maritime surveillance, and unmanned systems under one headquarters, collapsing what used to be separate detection and strike chains into a single command loop. Its Penghu deployment of Hsiung Feng launchers is the clearest proof of concept so far.

Techniques and tradecraft

• Backbrief (反向簡報). The US Army derived confirmation brief method, formally introduced this year: subordinates repeat mission intent back to commanders before execution, shifting decision authority downward under decentralized command .

• “No script” continuous status exercises (無劇本／不預先腳本化). Commanders receive no advance plan. Unannounced crises (comms disruption, shifting resources, evolving enemy tactics) are injected in real time to force adaptive decision making rather than rehearsed responses.

• Dispersed wartime production. The Armaments Bureau’s 202nd Arsenal rehearsed relocating out of Taipei, with civilian factories drilled on converting to munitions assembly under a mock emergency order .

• Mobile network throttling. The first ever artificial reduction of mobile internet speeds nationwide, testing whether civilians and backup command channels can function once primary communications degrade.

• Simulated infiltration/sabotage, not just artillery. The Hualien NBC decontamination drill modeled a chemical attack by enemy special agents (匪特/敵特工) rather than an artillery delivered strike, and required decontaminating personnel and vehicles within 30 minutes, reflecting a threat model centered on infiltration ahead of any overt strike.

• Wanjun Plan continuity of government. President Lai was moved overnight from the Presidential Office to the Hengshan Military Command Center, rehearsing a decapitation strike contingency for national leadership.

• Civilian military integration. Commercial flatbed trucks moved tanks across regions overnight, and a private printer supported a reserve command’s paperwork logistics: small but deliberate proofs that Taiwan’s whole of society defense concept extends into ordinary businesses.

One Chinese language OSINT source worth flagging for methodology: the PLA did not stage a matching large scale counter exercise on Han Kuang’s opening day, instead maintaining routine harassment levels (14 aircraft, 9 warships, and 7 civilian vessels detected around the Strait on August 5, with 6 aircraft crossing the median line). That’s read by Taiwanese analysts as a deliberate “companion presence,” neither escalating nor ceding the news cycle to Taipei’s drills.

Colby in Manila: the burden sharing pitch, out loud

Four days after Han Kuang’s live fire phase began, Under Secretary of War for Policy Elbridge Colby landed in Manila, his first Southeast Asia trip in the role, 18 months in . It’s the opening stop of a four country tour that also covers Jakarta, Bangkok, and Phnom Penh . His message, delivered at a Stratbase Institute forum, was built around one line that’s likely to become the tour’s epitaph: “We are looking for partners, not protectorates” .

Colby’s framing rests on “deterrence by denial along the First Island Chain,” the same geographic logic that underpins Taiwan’s own defense posture . He explicitly pushed back on reports that the US military is stretched thin after what he called “Operation Epic Fury,” insisting American maritime and aerospace capabilities remain “ready and capable” . He called the Philippines a “model ally,” met President Marcos at Malacañang, and pointed to concrete deliverables: a rotational deployment of four US Fast Response Cutters partnering with the Philippine Coast Guard, and an eight point US Philippine partnership plan for 2027 signed the week before his visit .

The backdrop is a genuinely tense moment for Manila. On July 20, a China Coast Guard member struck a Philippine Navy sailor in the head during a confrontation near Second Thomas Shoal, the kind of incident that keeps testing where the US Philippines mutual defense treaty’s tripwires actually sit . Colby’s answer wasn’t a new guarantee. It was a doctrine he called “strong, clear, but quiet”: heavy investment in forward posture and hard capability, paired with a diplomatic line to Beijing that avoids “peacocking.”

The connective tissue

Put side by side, Taipei and Manila are both being asked, implicitly or explicitly, to demonstrate they can absorb more of their own defense burden before Washington backs harder guarantees with hardware. Taiwan is doing this unscripted, with reservists and Abrams tanks and a legislature that won’t fully fund the ask. The Philippines is doing it with Coast Guard cutters and a “model ally” label that comes with real expectations attached. Colby’s language, “partners, not protectorates,” could just as easily be Washington’s unstated message to Taipei on the stalled US$14 billion arms package. The difference is that Taiwan doesn’t have a mutual defense treaty to fall back on if the burden sharing math doesn’t add up.

What to watch

• Whether the US$14 billion Taiwan arms package moves before or after Xi’s September state visit to Washington.

• How Colby’s stops in Jakarta, Bangkok, and Phnom Penh refine the “partners not protectorates” pitch for countries without a treaty ally’s leverage.

• Whether China responds to Han Kuang 42’s conclusion with a compensatory show of force near Taiwan or the Second Thomas Shoal.

• Whether Taiwan’s legislature revisits the special defense budget once Han Kuang’s after action reviews are public.

Reads:

Taking Taiwan’s democracy hostage — The Economist

In China, ‘Moles’ Are Leaking Official Secrets for Profit — WSJ

Taiwan’s 2027 defence spending to rise 16%, official media reports — Reuters

War Is Helping Chinese EVs Upend the Global Car Market — WSJ

Unmanned Equipment Deployed in Combat Training — PLA Media (please open consciously on a safe browser)

I hope you had a chance to read my post about Terton Intelligence that went out yesterday.

Terton Intelligence is expanding and adding new services; check it out here: www.tertonintel.com

The newsletter follows below.

THE SHARP TAKEAWAY

Taiwan is using Han Kuang 42, its biggest live-fire exercise to date, to rehearse the kind of conflict planners increasingly expect: decentralized, drawn out, and fought through disrupted communications. The drills begin as Washington weighs another record arms package for Taipei, reportedly worth $14 billion.

That is only one front. Chinese military researchers are adapting the output of leading American AI models for surveillance, cyber operations, and battlefield systems. At the same time, Chinese commercial models have narrowed the performance gap with their U.S. rivals. Washington’s answer is expanding from chip controls to restrictions on models, robots, and data-center hardware.

Meanwhile, Beijing is making military activity more visible across the region. Confirmed drills near Scarborough Shoal and a steady stream of live-fire notices on CCTV suggest that publicity is becoming part of the pressure campaign.

The bottom line: These are not separate stories. Taiwan deterrence, AI diffusion, supply-chain controls, and gray-zone coercion are increasingly part of the same contest.

TAIWAN STRAIT

1. Han Kuang 42 moves from demonstration to stress test

The big picture: Taiwan’s annual war game begins a 10-day, nine-night live-fire phase today and runs through August 14. It is the longest Han Kuang exercise yet.

What is new: The military is pushing authority downward. Units will use a U.S.-style “reverse briefing” process, commanders will work with less advance scripting, and the exercise will integrate Taiwan’s newly commissioned M1A2T tanks and Littoral Combat Command.

The rules of engagement have also been updated for China’s gray-zone tactics. Two full reserve brigades, about 5,000 troops in total, will mobilize for the first time. In Taipei and northern Taiwan, planners will deliberately slow internet service to test operations under degraded communications. Another drill will rehearse blocking an enemy force from crossing the new Danjiang, or Tamkang, Bridge toward the capital.

Why it matters: Han Kuang is looking less like a choreographed show and more like a test of whether Taiwan can keep fighting when information is partial, networks are unreliable, and junior commanders must act without waiting for perfect instructions. That is a meaningful shift in doctrine and a tougher standard for asymmetric deterrence.

Read more

I am sure you have heard about Terton Intelligence and the China OSINT course. Terton Intelligence has become synonymous with the China OSINT course; actually, the company is much more than just the course. Let me explain.

Most of you found me because of the China OSINT course. Fair enough, it’s what I’ve talked about the most in public. But if I’m honest, the course was never really the point. It’s the wedge. The company underneath it is Terton Intelligence, and the actual product, the one I’ve been building this whole time quietly, is called Argus.

Check out Terton Intelligence here: www.tertonintel.com

How this actually started

I launched Terton in May with no funding and as a non-technical founder. And if I’m being fully transparent, little background in commercial software. But I have been building bots and scrapers for my work for years, which I have used in my journalism and consulting. I have finally decided to step out of the shadows and venture into the world of large-scale commercial software offering and start-ups.

Before this, I spent years as a journalist covering East Asia and China (I was the first non-American, non-Asian correspondent Newsweek ever assigned to the region and based in Taipei), so my actual skill set going into this was reporting and source verification, not database design or writing code. I taught myself the technical side as I went, mostly by breaking things and fixing them again, just to get something working.

I bring this up because it tells you how the company actually runs day to day. I’d rather sit with a problem and figure it out myself than wait around for the “right” hire to show up or chase a funding round before doing anything real.

The world of media changed around me and I felt the need to go in a direction that respects my experience and knowledge. Sometimes you break things and test your assumptions to reinvent yourself.

The China OSINT course ended up being the first proof that this approach works at all. It made money in the very first month the company existed, and it wasn’t a handful of hobbyists signing up either. Several were working analysts already in cybersecurity and threat intel. That told me something. It meant the exact audience Argus needed already existed, and they showed up before I’d even opened the platform to anyone.

Today, there are professionals from around the world pursuing this course, and many more who have heard about it and are mulling over signing up.

So what is Argus, actually

This is the part most people who took the course haven’t seen yet.

Argus is a strategic and dual-use intelligence platform, which will serve as a B2B platform helping clients across the world. In plain terms, it tracks where military capability and commercial industry overlap across East Asia (China first), and it organizes that information so someone can actually use it instead of digging through fifty browser tabs and half-translated PDFs. The PLA Orbat showcases the powerful analytics that Argus will carry as a mature threat intelligence, due diligence and interconnected intelligence platform for a whole of industry and government clients.

The centerpiece right now is the PLA Order of Battle. It’s a geolocated database covering thousands of facilities, bases, garrisons, and units, mapped across all five theater commands and structured the way the real joint command hierarchy works, not some simplified list someone threw together for a slide deck. Past ORBAT, we’re pushing into drone systems intelligence and mapping dual-use hardware and semiconductor supply chains too, because that’s genuinely where a lot of the risk conversation in this region is headed, even if not everyone’s caught up to that yet.

Argus is building a waste database of Chinese companies with ties with PRC government and its military. Argus will deploy powerful AI-layer to find interconnections otherwise hidden behind Chinese databases.

I believe in disrupting the industry which is heavily focused on analysts sitting in global hubs like New York, London, Hong Kong and Singapore. The time has come to disrupt threat intelligence, commercial due-diligence and government-sponsored analysis world.

Why bring this up now?

Because new things are shipping under Argus soon, and they build directly off what the course already teaches. If you’ve worked through the modules, you already have the instincts to understand what Argus is showing you. That’s not really an accident; it was sort of the plan from the start, even if I never said it out loud until now.

If you are a VC fund or interested in investing in Terton Intelligence and what I am building, please reach out for a pitch deck. Terton Intelligence is searching for a co-founder if there is a right fit.

If any of this is interesting to you and you want a look at what’s coming next, just reply to this email. I’m letting a small group in early, and honestly, I’d rather it be people who already get the tradecraft than folks encountering this cold for the first time.

Talk soon.

Before we begin: This briefing is now part of Terton Intel, my new intelligence and analysis venture. If you find this useful, you can explore more at tertonintel.com.

The Takeaway

Three sharp developments this week show Beijing pressing on multiple fronts while its own elite fractures. First, Moonshot AI released Kimi K3, the world’s largest open-weight AI model, which benchmarks near top U.S. systems at a fraction of the cost, compressing the U.S.-China performance gap to roughly six months. Second, Papua New Guinea ordered Taipei’s representative office to close, prompting Taiwan’s foreign minister to announce a formal review of economic ties, including natural-gas purchases. Third, China expelled Politburo member Ma Xingrui in one of the most serious corruption cases of Xi’s third term, signaling that even the highest technocrats are not immune. Together, they highlight China’s simultaneous advances in tech competition and diplomatic isolation, even as internal discipline tightens.

1. Moonshot AI’s Kimi K3 narrows U.S. lead with open-weight breakthrough

Kimi K3 compared to other models (Source: Moonshot AI)

The Big Picture: Beijing-based Moonshot AI unveiled Kimi K3 on July 16-17, calling it the largest open-weight model to date (2.8 trillion parameters, 1M-token context). Independent tests place it in the frontier tier alongside Anthropic’s Claude Fable 5 and ahead of several OpenAI models on key tasks, accelerating the erosion of America’s technological edge.

The Details:

• The Release: K3 is fully open-weight, with full model weights scheduled for July 27. It features advanced long-context handling (Kimi Delta Attention for up to 6.3x faster decoding) and was timed to coincide with President Xi Jinping’s address at the World AI Conference in Shanghai.

• Performance Data: Artificial Analysis ranks K3 fourth overall but ahead of Anthropic’s Opus 4.8 and several GPT-5 variants on its Intelligence Index. On terminal-style agentic coding (Terminal Bench 2.1), K3 scores 88.3, slightly ahead of Claude Opus 4.8 and within half a point of GPT-5.6 Sol. It also leads on some coding and front-end benchmarks.

• Cost Advantage: API pricing is about $3/$15 per million input/output tokens, below comparable U.S. frontier models on a per-task basis, making Chinese open systems increasingly attractive to global developers.

• Market Signal: Nasdaq fell roughly 1% on July 17 as investors trimmed AI-chip names (Nvidia, Intel) on fears of faster Chinese catch-up.

Between the Lines: Stanford’s Graham Webster notes the U.S.-China performance gap has compressed to about six months. Experts warn a fully matching open Chinese model is now a near-term prospect, complicating U.S. export-control strategy and the economics of closed, capital-intensive American systems. On the same day, Xi called for AI as “a symphony of international cooperation” rather than domination by any single country.

Why It Matters: Open-weight Chinese models are turning U.S. chip restrictions into a partial own-goal. By delivering near-frontier performance at dramatically lower cost and with full openness, China is both undercutting American commercial advantages and creating a global developer ecosystem less dependent on U.S. closed models. Downstream risks include faster diffusion of advanced capabilities for dual-use applications and greater difficulty for Washington in maintaining a decisive technological lead.

2. PNG closes Taiwan office; Taipei escalates with gas-import review

The Big Picture: Papua New Guinea’s July 16 order to shut Taipei’s representative office in Port Moresby triggered a concrete Taiwanese counter-move on July 18: Foreign Minister Lin Chia-lung announced a formal reassessment of economic ties, specifically including natural-gas purchases.

The Details:

• The Catalyst: PNG Foreign Minister Justin Tkatchenko declared the office must “immediately cease operations”, citing the One-China principle and the 50th anniversary of PNG-PRC relations; Taiwan said the decision came without prior consultation.

• Beijing’s Response: Chinese Foreign Ministry spokesperson Lin Jian publicly “highly appreciated” the move.

• Taipei’s Escalation: After initially protesting and insisting the office would continue operating, Lin said on July 18 that Taiwan is reviewing economic relations with PNG, specifically including LNG imports, where Taiwan is a significant buyer.

• U.S. Position: The State Department expressed deep concern, calling the closure “another example of Beijing’s intimidation” of Taiwan and its partners.

Why It Matters: This is a textbook application of Beijing’s isolation strategy using bilateral leverage and anniversary timing. Taiwan’s decision to put gas purchases on the table marks its first serious attempt to impose commercial costs in response. If followed through, it could raise the price for other Pacific states considering similar steps. The episode shows diplomatic setbacks can now trigger measurable economic friction.

3. Ma Xingrui’s downfall: Politburo purge exposes limits of Xi’s technocratic elite

The Big Picture: On July 14, China expelled Ma Xingrui from the Communist Party, making him the third sitting Politburo member purged since 2025. The case, announced via Xinhua and carried on the front page of People’s Daily on July 15, signals that even Xi’s most trusted technocrats are not immune from the anti-corruption drive.

The Details:

Official Charges: The Central Commission for Discipline Inspection (CCDI) accused Ma of:

• “丧失理想信念和政治立场，背弃党的宗旨和初心使命” (losing ideals and political stance, abandoning the party’s purpose and original mission)

• “搞权色、钱色交易” (engaging in power-for-sex and money-for-sex transactions)

• “大搞家族腐败” (large-scale family corruption)

• “违规收受礼品、礼金，帮助亲属低价购房” (illegally accepting gifts and money, helping relatives buy houses at discounted prices)

The official announcement concluded: “马兴瑞完全背离党性原则，严重违背党中央对高级干部提出的政治要求，其行为严重违反党的纪律，构成职务违法并涉嫌受贿犯罪，且在党的十八大后不收敛、不收手，性质极其严重，影响极其恶劣” (Ma completely abandoned party principles, seriously violated political requirements for senior cadres, and his behavior was extremely serious in nature with enormous social impact).

How It Was Treated: The July 15 People’s Daily placement signals this was treated as a major disciplinary case, but notably the language avoided terms like “forming factions” or “undermining party unity” that appear in military purges such as Zhang Youxia and He Weidong. Instead, the emphasis was on corruption, family misconduct, and abuse of power, suggesting a structural corruption case rather than a political conspiracy.

Timeline: Ma was placed under investigation in April 2026, abruptly stepped down as Xinjiang party secretary in July 2025, and disappeared from public view by late 2025. He skipped the Two Sessions in March 2026, deepening speculation about his fall.

Why It Matters: Ma’s case shows three things. First, Xi’s anti-corruption drive is now penetrating the highest levels of the Politburo, not just the military or lower ranks. Second, the focus on family corruption and sex-for-power transactions mirrors language used in earlier high-profile cases, suggesting a playbook for dismantling even senior figures. Third, the absence of overtly political language (no mention of factions or disloyalty) suggests Ma was treated as a corruption case rather than a purge, which may limit the political fallout but still signals that Xi’s inner circle is not untouchable.

For Xi, this is both a strength and a vulnerability. It demonstrates he can still discipline the elite, but it also exposes how deeply corruption has penetrated his own handpicked technocrats. The message to other officials is clear: even rocket scientists turned Politburo members are not safe.

Bottom Line

China is advancing on both the technology frontier (open-weight models closing the gap rapidly) and the diplomatic front (shrinking Taiwan’s Pacific footprint), even as its own elite faces unprecedented internal discipline. The Kimi K3 release is the more strategically consequential long-term development; the PNG episode is the sharper near-term test of whether Taiwan can impose costs; and the Ma Xingrui case reveals the fragility of Xi’s technocratic elite.

Watch for: actual changes in Taiwan-PNG energy contracts; independent verification of Kimi K3’s sustained performance after the full weights drop on July 27; any further Pacific capitals under parallel pressure; and whether additional Politburo members face investigation before the 2027 Party Congress.

I have just launched Terton Intelligence, a specialist open-source intelligence platform and advisory practice focused on China, cross-strait security, military developments, cyber risk, and geopolitical change across the Asia-Pacific.

The mission is straightforward: help private businesses, due-diligence professionals, analysts, journalists, researchers, investors, and decision-makers make sense of complex operating environments through structured, verifiable, decision-focused intelligence.

Explore Terton Intelligence:

https://tertonintel.com/

From information to insight

Open-source information is more abundant than ever. Yet useful intelligence remains difficult to produce.

Relevant information is fragmented across languages, platforms, official releases, imagery, social media, local reporting, corporate records, and specialist databases. The problem is rarely a lack of material. It is verifying what matters, connecting the relevant pieces, and assessing what they mean in context.

Terton Intelligence is being built to meet that challenge. It brings together disciplined collection, verification, translation, geolocation, entity resolution, and all-source analysis to make military and geopolitical developments more visible, structured, and useful under real-world time pressure.

Argus: the platform

At the center of Terton Intelligence is Argus, a developing connected analysis environment for China, Taiwan, and Asia-Pacific security.

Argus is designed to bring military, political, economic, diplomatic, cyber, and infrastructure reporting into a single analytical environment. Rather than presenting isolated reports, datasets, or alerts, it connects people, organizations, facilities, military units, weapons systems, events, and sources. This helps users move from individual facts to a coherent operational picture.

The platform’s current and developing capabilities include:

• Order of Battle (ORBAT): Structured, geolocated information on military organizations, facilities, garrisons, units, leadership, and command relationships

• Drone systems: Tracking and analysis of unmanned systems developed, deployed, and exported across Asia

• Weapons systems: Verified profiles and structured data on platforms shaping the regional military balance

• Connected intelligence: Relationship mapping across organizations, personnel, facilities, events, platforms, and other relevant entities

• Briefing workflows: Tools designed to turn linked findings into clear, structured analytical outputs

The ORBAT environment currently maps 6,676 facilities of record, with units and locations positioned within a searchable command structure. The aim is not to create a static directory, but a working framework for assessing force posture, hierarchy, activity, and change over time.

Built around tradecraft

Terton Intelligence is founder-led and built around the realities of intelligence work: incomplete information, conflicting reporting, language barriers, limited time, and decisions that cannot wait for perfect certainty.

The emphasis is on practical tradecraft, not generic data aggregation. That means distinguishing evidence from assessment, assessing source reliability, being transparent about confidence, applying regional and linguistic context, and building repeatable workflows that can withstand scrutiny.

Our work follows a disciplined intelligence cycle:

• Direction: Defining requirements against the decisions that need to be made

• Collection: Gathering open-source and technical material from relevant channels

• Processing: Translating, normalizing, geolocating, and resolving entities into usable data

• Analysis: Producing assessments with confidence levels, context, and operational relevance

• Dissemination: Delivering briefs, maps, graphs, and structured outputs designed for action

Services

Alongside the Argus platform, Terton Intelligence provides selective, requirements-driven intelligence support for clients who need more than generic monitoring or recycled reporting.

Services include:

• Custom intelligence reports and decision-focused assessments

• China and Asia-Pacific research surge support

• Open-source exposure reviews for organizations and senior leaders

• Strategic briefings and analytical support

• Tailored intelligence and OSINT training

Each engagement is designed around the client’s actual requirements, with an emphasis on original research, manual tradecraft, verification, and analytical clarity.

China OSINT Course

Terton Intelligence is also the new home of my China OSINT Course.

The course is designed for journalists, analysts, policy professionals, researchers, and due-diligence practitioners who need reliable methods for working with Chinese-language sources. It focuses on collection, verification, Chinese media and platform research, geolocation, entity research, and repeatable investigative workflows.

The programme is structured in two tiers:

Tier 1: Core

• Approximately 5 hours of recorded modules and guided walkthroughs

• Checklists and reusable search templates

• Chinese media and social-platform OSINT methods

• Location-verification toolkit

• Practical workflows for immediate application

Tier 2: Advanced

• Approximately 7 hours of training

• Everything in Tier 1

• Satellite-imagery component

• Course certification

• Personal reference from the instructor

I teach the course personally, and it is built to provide practical workflows, not generic search advice or theory without application.

Explore the course: https://tertonintel.com/course

Request a demo

Argus is not yet publicly live, but I am now accepting requests for demonstrations.

If you work in policy, journalism, research, security, risk, investment, or due diligence, and would like to see the current ORBAT, drone, and weapons-systems capabilities, please get in touch through

https://tertonintel.com/

This is the start of a larger build. New datasets, research tools, and analytical features will be added over time, but the standard will remain consistent: rigorous verification, transparent reasoning, and intelligence designed to support consequential decisions.

Please express your interest if you would like to demo Argus, I will get back to you in the due course.

We’re continuing to build and refine the China OSINT course—and it’s quickly evolving beyond its original format. What started as a focused training resource is becoming a more dynamic, continuously updated toolkit for researchers working with Chinese-language sources.

In the coming weeks, I’ll be rolling out new features, expanded modules, and practical workflows designed to make investigations faster, more reliable, and accessible even without Mandarin fluency. The goal is simple: create a living resource that grows alongside the changing Chinese information environment.

If you sign up now for Tier 2, you’ll also get early access to some of the upcoming verification tools and new features as they are released.

If you haven’t explored the course yet, you can learn more here: https://www.asiacommunique.com/p/announcing-china-osint-course-for.

The newsletter follows below.

The number that should worry people is this: roughly 90 percent of Russian missiles and drones examined by Ukrainian investigators contain Japanese-made electronics. That detail pulls together a much bigger story. The region is no longer being shaped only by summits, speeches, or military drills. It is being shaped by supply chains, intelligence networks, detention cases, arms sales, and chip investment, with pressure building across Taiwan, Japan, China, and the wider Indo-Pacific.

South China Sea pushback

On the 10th anniversary of the 2016 arbitration ruling, 14 countries including the U.S., Japan, Australia, Canada, Britain, Germany, and Italy issued a joint statement rejecting China’s maritime claims and reaffirming the ruling’s finality under international law. The statement also highlighted dangerous China Coast Guard maneuvers near Philippine features, which made it more than a ceremonial anniversary statement.

Beijing dismissed the move and accused the countries involved of stirring up trouble. That matters because it shows the central contest is still over whether China can normalize its claims through constant presence, while the U.S. and its partners are trying to draw a legal and diplomatic line that keeps those claims from hardening into the regional baseline.

Tech blacklists keep tightening

The U.S. and China are still locked in a mutual blacklist cycle that is spreading from industrial policy into national security. In June, the Pentagon added about 188 Chinese military-linked companies focused on advanced technology, while China retaliated by placing 10 U.S. firms in robotics, rare earths, and defense on export-control lists and blocking 46 U.S. defense-related firms from government procurement.

China has now expanded its rare earth restrictions again, adding holmium, erbium, thulium, europium, and ytterbium to the export-control list, along with related processing equipment and technology for mining, smelting, separation, magnet production, recycling, and production-line upgrades. The latest move also tightens scrutiny on defense end users and advanced semiconductor-related exports, making the policy less about raw materials alone and more about control over the industrial chain that depends on them.

This is no longer just trade friction. It is a slow conversion of strategic industries into sanctions terrain. That raises costs, disrupts supply chains, and pushes more countries into the uncomfortable position of having to hedge between the two sides.

Taiwan’s drill is the real signal

The biggest Taiwan story right now is not a new Chinese move. It is Taiwan’s own defense posture. Taiwan is in the middle of its longest-ever Han Kuang exercise, a 10-day, 9-night drill running from July 9 to 18, with the full combat phase taking place from July 13 to 18. The exercise covers anti-landing operations, coastal combat, defense in depth, and long-duration warfare scenarios.

This year’s drill is especially notable because Taiwan is using it to test both hardware and command structure. The exercise includes U.S.-supplied HIMARS, Tien Chien II air-defense missiles, TOW 2B anti-armor missiles, drones, and M1A2T Abrams tanks, while more than 22,000 reservists are involved. President Lai personally watched the tank live-fire drill, where four M1A2T tanks reportedly hit every target, underscoring that Taiwan is trying to show not just equipment but confidence in how it uses it.

A new detail from Focus Taiwan adds another layer. On Monday, Taiwan’s military launched a separate joint defense exercise featuring Marine Corps mobilization operations to reinforce the Taipei metropolitan area, with scenarios that include hostile vessels entering Taiwan’s territorial waters and the integration of the three services. That matters because it shows Taiwan is not just rehearsing battlefield tactics in the abstract. It is also practicing how to defend the capital and how to link maritime warning, joint command, and urban response in a real crisis.

The M1 tanks matter for more than symbolism. Taiwan bought 108 M1A2T tanks from the U.S. in a $1.45 billion deal, and the first 38 have already been delivered, with the rest still coming in stages. In practical terms, the tanks strengthen Taiwan’s ability to defend key areas, while the live-fire debut signals that Taipei wants to integrate these systems into wartime planning, alongside drones and other newer systems.

PLA activity around Taiwan has stayed more controlled than dramatic. In June 2026, Taiwan tracked 208 PLA aircraft sorties around the island, down sharply from 499 in June 2025. Median-line crossings fell to 36, and no bomber flights were recorded, even as the PLAN maintained a steady daily presence of five to 10 vessels. Beijing is keeping up the pressure, but it is not trying to steal the spotlight from Taiwan’s drill with a major spike.

Japan becomes a security node

Japan now sits inside the same strategic picture, but in a different way. It is both a target for foreign intelligence activity and a country trying to rebuild its own intelligence system. A New York Times investigation says Russian military intelligence used Japan as a procurement hub for electronics and dual-use components for missiles and drones, despite sanctions. Some GRU operatives reportedly moved there after the mass expulsion of Russian diplomats from Western countries in 2022.

Tokyo is trying to close that gap. Japan is standing up a new national intelligence agency to coordinate roughly 33,000 personnel across government, following earlier legislation that created a National Intelligence Council and a National Intelligence Bureau structure. Japanese officials have already acknowledged the need to do more against foreign intelligence activity. That makes the Russia story more than a sanctions scandal. It is one of the clearest reasons Japan is now rebuilding its intelligence capacity.

China detains a U.S. seismologist

There is another intelligence angle here that is easy to overlook but important. Reuters reported that China has detained an American seismologist who studied North Korean nuclear tests, and she has reportedly been held for nearly two years. Chinese officials also reportedly questioned her husband more than 100 times about his work on nuclear test signatures.

That case shows how quickly technical and scientific work can become politically sensitive. It also fits the broader pattern in this briefing. States are treating access to expertise, technical data, and scientific research as a security issue, not just an academic one.

What to watch

- Whether Beijing responds to the South China Sea anniversary statement with new Coast Guard activity near the Philippines or Taiwan.

- Whether the Taiwan arms package moves or stays stuck in U.S.-China bargaining.

- What Taiwan’s Han Kuang exercise shows about reserve mobilization, drones, and decentralized command.

- Whether Japan will tighten export enforcement after the Russia procurement reporting.

- Whether the detained U.S. seismologist case becomes part of a broader North Korea or U.S.-China security dispute.

A student in Shanghai pays a stranger on Xianyu the equivalent of fifteen dollars a month for a “shared” ChatGPT Plus login, a connection routed through a Hong Kong proxy that invariably drops every few days. Despite the instability, the student renews the subscription the following month. This transaction—small, informal, and repeated across hundreds of thousands of users—represents the true state of artificial intelligence adoption within the People’s Republic of China. The prevailing narrative often focuses on whether frontier models like ChatGPT or Claude are officially blocked by the Great Firewall. The reality, widely acknowledged by those operating within the domestic digital ecosystem, is that the block is merely a friction point, not an impenetrable barrier.

Public discourse across Chinese social media platforms and developer forums points to a surprisingly active, highly commercialized workaround economy. Accessing Western large language models (LLMs) is not a binary state; it is a shifting mix of network routes, account setups, financial laundering mechanisms, and trust in whichever digital middleman is selling the most viable workaround in any given month. This shadow infrastructure profoundly changes how global technology firms and geopolitical analysts should conceptualize AI adoption inside China. Frontier models are not absent from the workflows of Chinese students, developers, and researchers. They are constrained, filtered, and frequently expensive, but they are deeply integrated into the daily digital fabric of the nation.

Case Study: Deconstructing a Shanghai Practitioner’s Subscription Stack

To understand how these concepts manifest in a single user’s daily life, we can analyze the subscription dashboard of an active AI practitioner based in Shanghai, China. This image captures the ultimate realization of the cross-border “access stack.”

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This week’s Asia Communique digs into China’s July 6 SLBM launch, the identification dispute it sparked, and the flight path that ties it to Japan, the Philippines, and the wider Pacific.

At 12:01 p.m. on Monday, July 6, a Chinese nuclear-powered submarine carried out something Beijing had never publicly acknowledged before: a submarine-launched ballistic missile test into the Pacific. But navigation warning information suggests China may originally have considered two different test profiles for that day: one from the Bohai Sea flying over Japan toward the Pacific, and another from the South China Sea, likely crossing over the Philippines, with the second option appearing to be the one that actually occurred. Xinhua said the missile carried a dummy warhead, landed precisely in designated waters, and was part of the PLA’s annual training plan, while insisting it was not aimed at any specific country or target and that relevant countries had been notified in advance.

The launch also coincided with the opening of Joint Sea 2026 in Qingdao, the annual China-Russia naval exercise held every year since 2012. However, there is no confirmation that Russia was involved in the missile test itself, and Beijing has portrayed the launch as its own military activity. This edition traces what we actually know about the missile, the still-live dispute over whether it was a JL-2 or JL-3, what Chinese state media and allied commentators are saying, what the maps circulating online suggest about the launch and target corridor, how this compares to Beijing’s 2024 DF-31AG shot into the Pacific, and why Japan keeps surfacing as one of the most revealing angles in the story.

The Missile: A Live Dispute, Not a Consensus

The first question anyone watching this story asked was simple: which missile was it? The honest answer is that experts do not agree, and the disagreement matters more than most coverage has let on.

Chinese state-linked commentary moved quickly toward the JL-3. In a Global Times write-up, military commentators Zhang Junshe and Song Zhongping, both frequently quoted PLA-adjacent voices, assessed the missile as “highly likely” to be the JL-3, reading the cues from Xinhua’s official wording and the missile’s debut at Beijing’s September 2025 military parade ten months earlier. Song went further, calling the JL-3 probability “extremely high,” and explained the test’s purpose in specific terms: the missile had already completed high-trajectory and low-trajectory tests, and needed a near-full-range trajectory shot to validate its ballistic performance and combat reliability under realistic conditions. Zhang added the broader strategic framing, describing the JL-3 as China’s self-developed third-generation SLBM and now the backbone of its sea-based deterrent, with a range he put above 10,000 kilometers. Jeffrey Lewis, director of the East Asia Nonproliferation Program at Middlebury, independently told reporters it was “highly probable” the missile tested was the JL-3.

Taiwan’s own intelligence assessment points the other way. Taiwan’s National Security Council identified the missile as a JL-2, launched from a Type 094 Jin-class submarine, based on an estimated flight distance of roughly 6,300 kilometers, well short of the JL-3’s claimed 10,000-plus kilometer range and closer to the JL-2’s established profile. That distance discrepancy is the crux of the dispute: if the missile only flew 6,300 km, calling it a JL-3 test of “near-full-range” performance, as Song Zhongping did, becomes harder to square with the numbers.

Now, Lewis thinks the missile might be JL-2 after all, but we have no way of confirming:

What is not in dispute is Lewis’s broader read on the moment, independent of missile type. In a post on X, he wrote plainly that “nuclear weapons states have missiles and they test them,” a reminder that testing itself is not inherently newsworthy behavior for a nuclear power. But he paired that with a sharper point elsewhere: China’s historic restraint on long-range missile testing, driven by political sensitivity rather than technical limitation, appears to be eroding, and more tests of this kind should be expected.

Also worth reading are the comments by Tong Zhao, a leading authority on China's nuclear program.

The Maps and the Reactions

Map source:

What made this test different from a quiet Bohai Bay shot was where the missile reportedly went. Unofficial flight-path maps and Taiwan’s own tracking showed the missile crossing the exclusive economic zones of Palau, Guam, the Northern Mariana Islands, and the Federated States of Micronesia before landing roughly 1,000 kilometers northeast of the Solomon Islands, closest to the EEZs of Tuvalu and Kiribati. CSIS’s Missile Threat project flagged this as China’s first SLBM test ever conducted into international waters, a milestone distinct from the missile type itself.

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Note: The newsletter edition was corrected and republished to remove additional links in the earlier edition.

1. Xi marks CCP’s 105th anniversary with global, not just domestic, messaging.

(Above image was generated using AI)

The Big Picture: Xi Jinping’s speech Wednesday at the Great Hall of the People struck a more outward-looking tone than his past anniversary addresses, casting the CCP as “the world’s largest ruling party with significant global influence” rather than focusing narrowly on domestic “national rejuvenation”. He simultaneously reaffirmed Beijing’s hardline stance on Taiwan, calling “reunification” the party’s “unwavering historical responsibility”.

The Details:

• The Catalyst: The roughly 40-minute address, delivered July 1 to mark the party’s 1921 founding, opened with Xi invoking “回顾我们党走过的光辉历程” (”looking back on the party’s glorious journey”) and calling on the whole party and people to advance “朝着全面建成社会主义现代化强国、实现中华民族伟大复兴的宏伟目标奋勇前进” (”toward the grand goal of fully building a modern socialist power and achieving the great rejuvenation of the Chinese nation”).

• The Scope: Xi argued the CCP’s durability comes from qualities “其他政党和政治力量无可比拟” (”incomparable to any other political party or force”), listing traits such as “矢志追求真理” (unwavering pursuit of truth), “深深植根人民” (deeply rooted in the people), and “敢于善于斗争” (daring and skilled at struggle).

• The Themes: He warned that “世界进入新的动荡变革期，人类又一次站在何去何从的十字路口” (”the world has entered a new period of turbulence and change, and humanity again stands at a crossroads”), and stressed “强国必须强军” (”a strong nation must have a strong military”), calling for accelerating efforts to build “世界一流劲旅” (a “world-class force”).

• Between the Lines: On internal discipline, Xi used sharper language than in prior years, demanding the party “坚决清除一切损害党的先进性和纯洁性的因素、清除一切侵蚀党的健康肌体的病毒” (”resolutely eliminate all factors that damage the party’s advanced nature and purity, and purge all viruses that erode the party’s healthy body”). Taiwan’s government dismissed the Taiwan portion of the speech as “repeating old talking points”.

The Bottom Line: Xi is projecting confidence on two fronts at once: positioning the CCP as a global governance model while doubling down on Taiwan rhetoric and internal “self-revolution” language, signaling Beijing sees no need to soften its core positions even as it courts broader international legitimacy.

2. Beijing begins rebuilding its gutted military high command

The Big Picture: After more than a year of unprecedented purges left China’s Central Military Commission reduced to just Xi and loyalist Zhang Shengmin, reporting indicates Beijing has now started recomposing the commission, signaling Xi may be ready to move past the purge phase and rebuild the PLA’s top leadership structure.

The Details:

• The Catalyst: The CMC’s collapse accelerated after Gen. Zhang Youxia, then the top vice-chairman and second only to Xi in the military hierarchy, was placed under investigation in January alongside Gen. Liu Zhenli, following the earlier expulsions of Gen. He Weidong and Navy Adm. Miao Hua.

• The Scope: At its low point, the six-member CMC operated with only Xi as chairman and Zhang Shengmin, the military’s former anti-corruption chief, as vice-chairman, a situation analysts described as “the total annihilation of the high command”.

• The Rebuild: Zhang Shengmin was formally elevated to vice-chairman in October 2025 following the Fourth Plenary Session, marking the first concrete step toward reconstituting the body after the wave of dismissals.

• Between the Lines: Analysts had questioned whether Xi would wait until the 2027 Party Congress to fill the remaining vacant CMC seats. Signs that recomposition is underway now suggest he may not be waiting for the full congressional cycle to restore operational command capacity.

The Bottom Line: A CMC running on two members for over a year raised real questions about PLA operational readiness and chain-of-command clarity during a period of heightened Taiwan tension. Moves to fill out the command structure suggest Xi has finished consolidating loyalty and is shifting toward restoring functional military leadership, worth watching closely for who gets promoted next and what it signals about Taiwan contingency planning.

3. China’s “ethnic unity” law goes live, with a long arm aimed at Taiwan

The Big Picture: Beijing’s new Ethnic Unity and Progress Promotion Law took effect July 1, formally extending Beijing’s assimilationist framework beyond its 56 recognized ethnic groups to explicitly claim Taiwanese and Hong Kong residents as part of a single “Chinese nation,” while also asserting jurisdiction over anyone abroad who challenges that. Taiwan responded with “strong condemnation,” warning the law effectively criminalizes dissent by foreigners.

The Details:

• The Catalyst: Passed by China’s National People’s Congress on March 12 and formally activated July 1, the 65-article law mandates Mandarin as the primary language in education and public life and requires schools to instill loyalty to the Communist Party.

• The Scope: Article 63 extends liability to organizations and individuals outside mainland China, explicitly including Taiwan and Hong Kong compatriots and overseas Chinese, who are deemed to “undermine ethnic unity” or “incite ethnic division”.

• The Response: Taiwan’s Mainland Affairs Council and Foreign Ministry say the law could compel citizens toward pro-unification positions or expose them to prosecution simply for critical commentary, calling it a form of long-arm jurisdiction.

• Between the Lines: Beijing has openly defended its right to target people overseas under the law, removing any ambiguity about its extraterritorial intent just as concerns from the UN and rights groups mount.

The Bottom Line: This is a legal weaponization of identity politics. Beijing is now trying to codify Taiwanese “Chinese-ness” into domestic law, giving itself a formal pretext to pursue critics globally, not just at home.

4. Wang Yi tells Rubio to handle Taiwan with “utmost caution”

The Big Picture: In a Tuesday phone call, China’s top diplomat Wang Yi issued a pointed warning to Secretary of State Marco Rubio, saying “a slight move on the Taiwan issue could affect the whole situation.” That’s a sign Beijing is watching for any perceived shift in U.S. posture even amid a fragile trade truce.

The Details:

• The Catalyst: The call, disclosed by China’s Foreign Ministry on Wednesday, came as both sides continue trying to manage risks in the broader relationship.

• The Scope: Wang’s language framed Taiwan as the single most destabilizing variable in the bilateral relationship, above trade or tech disputes.

• Between the Lines: The timing, one day after China’s ethnic unity law took effect and around Xi’s anniversary speech, suggests Beijing is bundling legal, rhetorical, and diplomatic pressure on Taiwan into a coordinated push rather than isolated moves.

The Bottom Line: Beijing is signaling that any perceived U.S. tilt toward Taipei, whether arms sales, official contacts, or rhetoric, carries outsized risk to the broader U.S.-China relationship right now.

5. Reuters exposes top-level Russia-China military training pact

The Big Picture: New Reuters reporting shows China’s covert military training of Russian forces last year was personally approved by Russian Defense Minister Andrei Belousov and directly involved at least four Russian and Chinese generals, a level of high-level sign-off that goes far beyond the rank-and-file training previously disclosed. The finding deepens alarm in Europe that Beijing’s support for Moscow’s war effort is institutionalized at the top of both militaries, not incidental.

The Details:

• The Catalyst: A classified Russian document seen by Reuters references an internal decree issued by Belousov in August 2025, under which a Russian armed forces delegation traveled to China to train at PLA facilities.

• The Scope: Documents name senior officers on both sides, including Russian Colonel General Rustam Muradov, who led the delegation, and Chinese Major General Li Jinsun, head of the PLA’s Military Academy of Radiological, Chemical and Biological Defence. One course, held in Beijing in November, focused on radiological, chemical, and biological protection.

• The Signatories: The training framework was underpinned by a July 2 agreement signed by Russian Major General Rustam Khusainov and Chinese Senior Colonel Sun Dayun, according to the officials.

• Between the Lines: This builds on an earlier Reuters report that China secretly trained about 200 Russian personnel in drone warfare and electronic warfare, some of whom later fought in Crimea and Zaporizhzhia. Beijing has repeatedly denied direct involvement, calling the claims “entirely unfounded,” while the Kremlin has separately dismissed related reporting as misinformation.

The Bottom Line: The generals-level oversight described in the documents suggests Moscow-Beijing defense cooperation has moved from informal exchanges to an approved, institutional framework, exactly the kind of integration Western officials have long warned would blur the line between “no-limits partnership” rhetoric and direct battlefield support.

6. FCC’s expanded Chinese tech ban kicks in

The Big Picture: The FCC’s expanded ban on importing legacy Huawei, ZTE, Hikvision, Dahua, and Hytera equipment takes effect in early July, closing a loophole that let older, pre-2022 models keep entering the U.S. market.

The Details:

• The Catalyst: The FCC voted June 26 to widen its original 2022 restriction, which had only barred new models from the five blacklisted Chinese firms.

• The Scope: The rule targets equipment used in public safety, government facilities, and critical-infrastructure surveillance, citing electronic-espionage risk.

• The Penalties/Limits: Previously purchased equipment already in use is grandfathered in, and the rule doesn’t retroactively cover older drone or router models.

• Between the Lines: This closes a workaround companies had used to keep buying legacy versions of banned gear, reflecting Washington’s broader push to scrub Chinese hardware from sensitive networks link by link.

The Bottom Line: The U.S. is tightening, not just maintaining, its tech-decoupling perimeter. The security-driven restrictions on Chinese hardware are expanding even as trade talks stay in a cooling-off period.

7. Chinese Coast Guard patrols east of Taiwan stay a live irritant

The Big Picture: Beijing’s decision to send Coast Guard vessels into waters east of Taiwan, a maneuver Taipei calls provocative, underscores that gray-zone pressure hasn’t paused even as diplomatic channels stay open.

The Details:

• The Catalyst: Chinese state media described the patrol as a special maritime traffic law-enforcement operation, launched in apparent response to a joint Japan-Philippines announcement.

• The Scope: Four Chinese vessels entered waters Taiwan considers restricted before being tracked and expelled by Taiwan’s Coast Guard.

• Between the Lines: Taiwan’s Defense Minister Wellington Koo confirmed the military is coordinating closely with the Coast Guard, treating even non-military patrols as a security-relevant signal requiring intelligence sharing.

The Bottom Line: Beijing continues to use ambiguous, sub-military maritime assets to probe and normalize presence around Taiwan. That pattern is becoming a baseline stressor rather than an isolated incident.

Thank you for reading!

The Module 3 of the China OSINT course is now live, and we’re already halfway through the journey. If you’ve been thinking about joining, there’s still time to jump in and catch up. The course is designed for professionals to sharpen their skills and there is a rolling availability to enroll.

The Tinderbox in the Kennel

For years, the China-Japan relationship felt like a familiar, if uncomfortable, routine. Bitter arguments over history, tense stand-offs around disputed islands, but steady trade and dense business ties kept the rivalry contained. In Tokyo and Beijing, officials learned to treat flare-ups as passing storms in a long season of managed friction.

That balance began to slip in late 2025, when one sentence in the Japanese Diet landed in Beijing like a thunderclap.

The moment in the Diet

On a November afternoon, Prime Minister Sanae Takaichi answered a question about a hypothetical Chinese attack on Taiwan. A conflict across the Strait, she said, could constitute a “survival-threatening situation” for Japan. That legal phrase opens the door to Japan’s Self-Defense Forces taking part in collective self-defense, including operations alongside U.S. forces.

In Tokyo, it sounded like a hard-line but logical extension of existing security laws, a response to a growing fear that any war over Taiwan would wash up on Japanese shores. In Beijing, it sounded like something far more serious: a direct challenge to the political foundation of the 1972 normalization, and a signal that Japan might fight for Taiwan.

Beijing decides this time is different

Chinese officials demanded that Takaichi retract her remarks, insisting she had crossed a “red line” by tying Japan’s security so explicitly to Taiwan. When no apology came, they began to treat the comment not as a gaffe but as proof that Japan was stepping into a more assertive, militarized role in the region.

Inside Beijing’s system, a narrative took shape. This was “neo-militarism,” backed by the United States, dressed up as legal technicality but aimed squarely at China’s core interest in Taiwan.

A new label for an old neighbor

Diplomacy has its own way of telling stories, through the words states choose to describe each other. In March 2026, Japan circulated a draft of its Diplomatic Bluebook, the annual foreign-policy guide that governments and analysts read closely for nuance.

China, it said, was now “an important neighboring country,” replacing a phrase used for nearly a decade that called the relationship “one of Japan’s most important bilateral relations.” Tokyo kept language about a “mutually beneficial relationship based on common strategic interests,” but the semantic downgrade captured how ties had soured after the Taiwan remarks.

In Beijing’s telling, this was no accident of phrasing. It was another sign that Japan now saw China less as a special partner to protect and more as a difficult neighbor to manage.

Election night in Tokyo

While diplomats argued over adjectives, Japanese voters delivered their own verdict. In February 2026, Takaichi’s Liberal Democratic Party won a sweeping victory, securing a two-thirds supermajority in the lower house. It was, in effect, a domestic mandate for her tougher line on China and defense, including a plan to double military spending to 2 percent of GDP.

In Beijing, that outcome hardened the view that Takaichi’s stance was no mere posturing. A leader associated with historical conservatism and security hawkishness now had the numbers in parliament to reshape Japan’s posture for years.

Missiles on the map

A few weeks later, maps in Chinese planning offices began to look different. In March 2026, Japan deployed its first upgraded Type-12 land-to-ship missiles, dramatically extending their range to roughly 1,000 kilometers, enough to reach parts of mainland China and cover key routes around Taiwan.

Plans to station them on Yonaguni, Japan’s westernmost island, only about 110 kilometers from Taiwan, leapt out from the charts.

From Tokyo’s perspective, these were defensive tools meant to deter any Chinese move in nearby waters and reinforce the U.S.-Japan alliance along the first island chain. From Beijing’s standpoint, they looked like a new, pointed spear aimed at China’s naval access and Taiwan approaches.

A destroyer cuts through history

Then came the transit that read like a symbol. On April 17, a Japanese destroyer passed through the Taiwan Strait, a waterway China increasingly treats as something closer to its own to regulate.

The date was not random on Chinese calendars. It marks the anniversary of the treaty in which Qing-era China ceded Taiwan to Japan, a moment still remembered in Beijing as a deep national humiliation.

Whether Tokyo chose that day deliberately or not, the interpretation in Beijing mattered more than the intent. Chinese ministries and the Eastern Theater Command issued sharp denunciations, followed by combat-readiness patrols in the East China Sea and warships maneuvering near Okinawa. Every move Japan made to signal support for freedom of navigation fed into China’s worst-case picture of an assertive military neighbor joining any future fight over Taiwan.

Shrines, memories, and narratives

Shortly after the destroyer transit, Takaichi sent ritual offerings to Yasukuni Shrine, while other officials paid visits. These acts might once have been read mainly as gestures to domestic conservative supporters.

In China and South Korea, however, Yasukuni remains a potent symbol because it honors Japan’s war dead, including convicted Class-A war criminals.

This time, Beijing folded the shrine offerings into its broader narrative of “neo-militarism,” treating them not just as an insult to historical memory, but as another piece of evidence that Japan was tilting away from post-war restraint while rearming and revising its security doctrine.

Changing the rules of the arms game

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Welcome to today's briefing. The strategic landscape in Asia is shifting rapidly toward unscripted war-readiness, deep internal political restructuring, and high-stakes technological maneuvering. This week, we analyze an abrupt sweeping purge inside China's top legislative body, a major corporate supply chain push by Apple, and a massive geopolitical chess move in the AI arena.

1. REGIONAL SECURITY & GOVERNANCE

Beijing purges top military commanders, financial chief, and Politburo member

The headline: In a massive, unannounced escalation of China’s ongoing anti-corruption campaign, the National People’s Congress (NPC) Standing Committee has abruptly stripped six high-ranking military generals, a top financial regulator, and a sitting Politburo member of their lawmaker posts.

The details: The state-run Xinhua news agency confirmed the mass dismissals in an official notice but offered no explanation for the sweeping removals.

• The Military Hit: The purged brass is led by General Xu Xueqiang, head of the Central Military Commission’s (CMC) Equipment Development Department—the powerful body tasked with overseeing the development, acquisition, and testing of hardware for the People’s Liberation Army (PLA)—who also concurrently served as the commander-in-chief of China’s manned space program.

• The Regional & Operational Scope: Beyond procurement, the purge took down General Li Fengbiao (political commissar of the PLA Western Theater Command), General Guo Puxiao (political commissar of the PLA Air Force), Lieutenant General Wang Kangping (Eastern Theater Command), Lieutenant General Zhang Minghua (Cyberspace Force), and Lieutenant General Yin Hongxing (Army).

• The Civilian Outliers: Mirroring the military purge, the state simultaneously ousted Li Yunze, the head of the National Financial Regulatory Administration (NFRA), and Ma Xingrui, the high-profile former Xinjiang Communist Party chief who holds a seat on the ruling Politburo.

Why it matters: A purge of this velocity across multiple theater commands and elite civilian regulatory bodies indicates that Xi Jinping’s anti-graft campaign is entering an aggressive new consolidation phase. Targeting the heads of hardware procurement, cyber operations, and financial regulation simultaneously suggests Beijing is actively rooting out systemic vulnerabilities, prioritizing absolute ideological loyalty and clean supply chains over administrative continuity as regional tensions simmer.

2. TECH NATIONAL SECURITY

Apple lobbies Washington to source memory chips from blacklisted Chinese supplier

The headline: In a high-stakes clash between global consumer technology supply chains and Western national security hawks, Apple has quietly approached the U.S. Commerce Department and other administration officials to allow it to buy memory chips from a blacklisted Chinese semiconductor giant.

The details: According to a fresh Financial Times investigation, financial pressures from skyrocketing memory and storage component costs—which have already forced Apple to hike retail prices on MacBooks and iPads—are driving the tech giant’s quiet lobbying campaign.

• The Target Vendor: Apple is targeting DRAM memory chips from Changxin Memory Technologies (CXMT) to relieve severe procurement bottlenecks.

• The Friction: While Apple is not legally barred from buying from them, the Pentagon placed CXMT on its Section 1260H Chinese Military Company blacklist over its alleged structural ties to the People’s Liberation Army (PLA).

Why it matters: The development underscores the extreme difficulty of decoupling high-tech consumer electronics from Chinese manufacturing. If Apple succeeds in securing a green light or a tailored loophole, it directly undermines Washington’s broader Indo-Pacific technology containment policy, signaling to regional allies that economic profit margins can still override strict defense blacklists.

3. OPEN-SOURCE GEOPOLITICS

China’s Z.ai Triggers Wall Street Surge with Unrestricted Frontier Open-Source LLM

Driving the news: Beijing-based AI pioneer Z.ai—internationally rebranded from Zhipu AI—has fully open-sourced its new flagship large language model, GLM-5.2, under a highly permissive, unrestricted MIT license. The sudden release of the 753-billion-parameter open-weight model directly targets the global developer market just as the U.S. government escalates restrictions on foreign access to advanced proprietary software.

• The Geopolitical Countermove: The open-source download was deliberately made public immediately after the U.S. administration issued export curbs blocking foreign nationals from accessing top proprietary models like Anthropic’s Claude Fable 5. Because GLM-5.2 is an open-weight model, developers worldwide can now download, host, and alter the model’s weights locally on their own infrastructure, rendering it entirely immune to U.S. regional blocks or regional cloud shutdowns.

• The Performance Specs: Independent benchmark data from Artificial Analysis shows that GLM-5.2 leads all open models globally, outscoring DeepSeek V4 Pro and Google’s Gemini 3.1 Pro on multi-step agentic workflows and long-horizon tasks. Driven by a major new architectural optimization called IndexShare and a massive 1 million-token context window, the model ranks second globally on the web-development Code Arena—trailing only Anthropic’s top closed-source flagship.

The Financial Fallout: Market response to the release has been explosive. Traded under its parent name Knowledge Atlas Technology on the Hong Kong Stock Exchange (HKEX: 2513), the company’s shares skyrocketed, driving its total market capitalization past the historic HK$1 trillion ($130B) milestone. The massive tech rally was further supercharged by a JPMorgan research note, which raised its target price by nearly 47% and projected a staggering 534% revenue surge for the company this year on growing international commercialization hopes.

Why it matters: GLM-5.2 marks a critical inflection point where open-source software becomes a weapon against geopolitical technology containment. By offering near-frontier capabilities entirely free of charge and geopolitical bottlenecks, Beijing is actively shifting bargaining power away from Silicon Valley. Furthermore, Z.ai’s engineering documents confirm the entire model was trained and optimized natively on Huawei Ascend chips, signaling that China’s top tier of “AI Tigers” can successfully scale frontier models while completely cut off from Nvidia’s high-end hardware.

4. ASYMMETRIC PROCUREMENT

210,000-Drone Shield Frozen: Taiwan’s Parliament Defers Fleet Legislation

The headline: Taiwan’s ambitious plans to build a 210,000-strong asymmetric drone shield have hit a major roadblock. A legislative alliance between the opposition Kuomintang (KMT) and the Taiwan People’s Party (TPP) voted this week to stall the executive Cabinet’s Special Act for the Procurement of Indigenous Defense Unmanned Systems in the Legislative Yuan.

The details: The blocked bill is the central pillar of Taipei’s strategy to rapidly indigenize its defense footprint. The legislation seeks a NT$210 billion ($6.6B) special budget spanning August 2026 through 2031 to bankroll long-term procurement orders with domestic aerospace firms.

• The Fleet Blueprint: The blocked funding is tied to high-volume manufacturing long-orders, which includes roughly 208,200 coastal attack “suicide” loitering munitions, 1,446 long-range coastal reconnaissance drones, and 1,320 autonomous unmanned surface vessels (USVs).

• The Counter-Tactics: In response to the legislative freeze, the ruling DPP’s Convener, Chen Kuan-ting, announced a snap congressional inspection scheduled for Monday, June 29. The Foreign Affairs and National Defense Committee will descend directly upon the Army’s newly minted Unmanned Systems Training Command (established April 10) to pressure opposition lawmakers by forcing public evaluation of the military’s frontline drone-warfare readiness and operational deficits.

Why it matters: Apart from this long-range NT$210 billion tier, Taiwan’s Ministry of National Defense is separately pushing ahead with a shorter-range commercial budget to buy 48,750 military-commercial grade drones domestically through 2027. The military insists on strict “non-red supply chains,” completely banning Chinese-made components. However, by freezing the massive, multi-year parent fund, opposition lawmakers are blocking local tech manufacturers from getting the financial guarantees they need to scale production lines. This leaves Taiwan’s coastal drone defense initiative trapped in a state of high uncertainty just as gray-zone encirclement operations intensify.

Reads

Why “China First” Will Fail — Foreign Affairs

The Long Arm of the Chinese Academy of Sciences — The Wire China

Welcome to today’s briefing. This week, the strategic focus in Asia centers squarely on asymmetric warfare and the race to adapt. From Taiwan's deep legislative paralysis over its domestic drone fleet to a rare U.S. Air Force critique of Beijing's stealth doctrine, technology and tactics are moving faster than the budgets meant to fund them.

1. AIR COMBAT INTELLIGENCE

US Air Force analysis claims China learned the “wrong lessons” from stealth

The headline: A newly released U.S. Air Force analysis argues that Beijing’s massive investments in countering Western low-observability aircraft suffer from a fundamental strategic flaw: they fixate entirely on technology while ignoring Western operational doctrine.

The details: According to a report by Maj. Derek Ecklebe at the Air Force’s China Aerospace Studies Institute, Chinese strategists treat stealth as an isolated, hardware-defined technical problem rather than part of an integrated, multi-domain system.

• The “Stealth Busting” Trap: China has poured massive resources into unproven low-frequency, passive, and terahertz sensors under the belief that better radar hardware can completely neutralize the U.S. advantage.

• The Platform Mirror-Image: The analysis notes that China’s new J-35 stealth fighter replicates features of the American F-35 but prioritizes basic hardware metrics over software adaptability and pilot modernization. Furthermore, domestic constraints like poor engine reliability (such as the WS-10) are limiting Chinese stealth sortie rates, a problem planners likely project onto U.S. platforms.

Strategic fallout: This misconception could skew deterrence calculations. If Beijing believes its new technological sensors have effectively “solved” Western stealth, Chinese leaders may become dangerously emboldened, underestimating the combined tactics, electronic warfare, and integrated command structures of U.S. airpower.

2. UNMANNED SYSTEMS & PROCUREMENT

Anduril eyes Nissan facility as Japan’s Terra Drone buys into Ukraine

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Beijing is significantly accelerating its cross-domain power projection, testing geopolitical limits with a series of coordinated maritime and aerial maneuvers. As China’s premier indigenous supercarrier sails through the Taiwan Strait and state media broadcasts advanced stealth fighter-drone pairings, pressure is mounting across the First Island Chain—particularly over a newly contested structure at Scarborough Shoal.

Meanwhile, in Washington, a landmark Supreme Court ruling has cut off a primary avenue for corporate liability for human rights violations by tech companies, redefining the legal landscape for tech operations.

1. SCOTUS slams door on overseas corporate liability.

The Big Picture: The U.S. Supreme Court has dealt a final blow to a 15-year-old legal battle, ruling in favor of tech giant Cisco Systems and shielding American corporations from being sued in U.S. courts over foreign human rights abuses.

The Details: The Case: Filed in 2011 by members of the Falun Gong spiritual movement, the lawsuit alleged that Cisco custom-engineered China’s “Golden Shield” surveillance system. Plaintiffs argued Cisco knew the technology would be used to track, detain, and torture believers.

• The Ruling: Reversing a lower appeals court, the Supreme Court determined that U.S. courts are the wrong forum for actions orchestrated by foreign governments on foreign soil, even if a significant portion of corporate planning happened in the U.S.

• The Legal Mechanism: The ruling heavily restricts future applications of the 18th-century Alien Tort Statute (ATS) and the 1991 Torture Victim Protection Act (TVPA) against American companies operating globally.

The Dissent: Justice Sonia Sotomayor strongly disagreed with the majority, writing that the decision effectively “closes the courthouse doors” to corporate accountability, noting that arguments strongly suggested Cisco was aware its systems would facilitate torture.

Cisco’s Take: The company maintained that it simply sells standard networking infrastructure and cannot be held responsible for how sovereign nations choose to utilize it.

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2. Island-building fears reignite as China places new structures at Scarborough Shoal

The Big Picture: High-stakes maritime brinkmanship between Manila and Beijing has taken a sharp turn. Philippine defense officials are sounding alarms that Beijing may be laying the groundwork to turn the heavily contested Scarborough Shoal into a permanent military outpost, threatening to rupture long-delayed South China Sea Code of Conduct talks.

The Details:

• The Catalyst: The Philippine government lodged a formal diplomatic protest after detecting several large, unannounced floating structures inside the lagoon of Scarborough Shoal. Manila suspects these platforms, deployed by Chinese research vessels, are pretexts for permanent surveillance or communications installations.

• Beijing’s Pretext: The deployment follows China’s unilateral move to declare a 3,500-hectare “national nature reserve” over the reef—a designation Manila slams as a legal cover for full physical occupation.

• The Swarm: The Armed Forces of the Philippines reported tracking a staggering 82 Chinese coast guard and naval vessels within the Philippine Exclusive Economic Zone (EEZ) over the last month alone, with nearly half concentrated solely around Scarborough Shoal.

The Allied Counter: The U.S. responded by announcing a $13 million delivery of “Triton” autonomous underwater and surface vehicles to the Philippines. These long-endurance, solar-powered maritime drones are designed to dive under the surface to avoid detection while providing Manila with constant, unblinking reconnaissance on Chinese island-building activities.

The Bottom Line: Scarborough Shoal represents the final “strategic gap” for China in the central South China Sea, sitting just 200 kilometers from the main Philippine island of Luzon. If Beijing successfully converts the atoll into a militarized base alongside its existing outposts on Subi and Mischief reefs, it will secure a chokehold over regional shipping lanes and effectively freeze the Philippines out of its own EEZ.

3. China’s dual-carrier push: Fujian transits Taiwan Strait as Liaoning logs blue-water drills

The Big Picture: Beijing is flashing its naval muscle across the region. Just as China’s first carrier, the Liaoning, wrapped up an aggressive 40-day deep-sea mission, its newest and most advanced aircraft carrier—the Fujian—sent a sharp geopolitical signal by sailing directly through the sensitive Taiwan Strait.

The Details:

• The Fujian Transit: Taiwan’s Ministry of National Defense reported that the Fujian transited the strait on Tuesday, marking its first mission through the waterway since April. Taipei deployed joint intelligence, surveillance, and reconnaissance assets to shadow the ship, releasing an overhead photo showing a clear but aircraft-free flight deck.

• The Liaoning Drills: Concurrently, the Liaoning returned to port in Qingdao after its 40-day combat deployment spanning the South China Sea and Western Pacific. This mission successfully tested integration with Type 075 amphibious assault groups and land-based tanker aircraft to significantly extend the PLA’s operational envelope.

• Why the Fujian Matters: Unlike its predecessors, the Fujian features a flat flight deck equipped with cutting-edge electromagnetic catapults. This allows it to launch significantly heavier, more heavily-armed jet fighters at a much faster rate, moving China closer to true U.S.-style power projection.

Between the Lines: The timing is surgical. The Fujian’s transit occurred just one day after Taiwan kicked off a critical five-day military exercise designed to simulate responses to a full-scale Chinese invasion. Furthermore, it follows a new grey-zone pressure tactic from Beijing: deploying Chinese coast guard vessels along Taiwan’s east coast to artificially project jurisdiction.

The Bottom Line: Beijing is no longer just experimenting with isolated carrier operations. By simultaneously demonstrating advanced far-sea combat integration with the Liaoning and flexing its premier, indigenously-designed supercarrier through the Taiwan Strait, the PLA is signaling that its “system-of-systems” maritime dominance strategy is approaching full operational maturity.

4. Beijing flexes full-stealth aerial combo: J-20S teams up with Attack-11 drone

The Big Picture: China’s state broadcaster (CCTV) broadcasted a deep-dive showcase on the PLA Air Force’s latest paradigm shift in aerial warfare, highlighting how the newly unveiled J-20S—the world’s first two-seat fifth-generation stealth fighter—is actively integrating with the Attack-11 (Gongji-11) stealth combat drone.

The Details:

• The “Loyal Wingman” Concept: State media highlighted the combat reality of teaming the J-20S with the Attack-11, a flying-wing stealth UAV designed for deep penetration strike missions.

• The Division of Labor: In this configuration, the front-seat pilot of the J-20S focuses on flying and traditional aerial combat, while the rear-seat officer serves as an airborne command-and-control operator, actively managing a swarm of Attack-11 drones ahead of the formation.

• System Strength: CCTV explicitly pitched this pairing as a showcase of the PLA’s “all-stealth aerial combat system architecture.” The drones act as forward sensory extensions—jamming enemy radars, scouting high-threat environments, or drawing missile fire—keeping the crewed mother ship safe from retaliation.

Why It Matters: While the U.S. Air Force continues to develop its own Collaborative Combat Aircraft (CCA) program to pair drones with next-gen fighters, Beijing is signaling it has leaped ahead in real-world deployment by fielding a dedicated two-seat stealth airframe (the J-20S) specifically built to manage the heavy cognitive load of drone-swarming operations. It complements China’s maritime dual-carrier flex by showing an equally advanced, cross-domain power projection capacity in the skies.

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To truly understand how Beijing views the sudden pause in the Middle East, one must look at the source. This comprehensive briefing synthesizes the strategic assessments of four senior leaders from the China Institutes of Contemporary International Relations (CICIR)—a top-tier intelligence and strategy think tank directly tied to China's Ministry of State Security (MSS).

Liao Baizhi (Director, Institute of Middle East Studies): A seasoned Arabist analyzing Middle Eastern regional shifts and security architecture.

Qin Tian (Deputy Director, Institute of Middle East Studies): Expert on the "Axis of Resistance" geopolitics and regional security dynamics.

Chen Wenxin (Director, Institute of American Studies): Expert on US foreign policy, domestic political factions, and grand strategy.

Li Yanan (Deputy Director, Institute of Middle East Studies): Focuses on regional structural conflicts, state-to-state diplomatic maneuvers, and non-state actors.

Chen Qinghong (Deputy Director, Institute of World Politics): Focuses on international order evolution and non-traditional security.

Part I: Beijing’s Anatomy of the Deal — A Major Yield by Washington?

On June 18, 2026, the US and Iran officially signed a 14-point Memorandum of Understanding (MoU) at the Bürgenstock Resort in Switzerland, temporarily halting 110 days of high-intensity warfare. For an administration that began the conflict declaring that nothing short of "unconditional surrender" would be accepted from Tehran, the final framework looks remarkably lopsided.

The link to WeChat post is below the paywall.

According to Director Liao Baizhi and Deputy Director Qin Tian, the terms of the MoU represent a massive asymmetry in concessions that heavily favors Tehran:

1. "Cash for Peace" and the Sanctions Reversal

Initially, Washington wagered that military strikes would collapse a fragile Iranian economy, forcing regime capitulation on the nuclear issue. Instead, the US is now offering a massive financial carrot to entice a pause:

A promised $300 billion "Iran Reconstruction Fund" and economic development plans driven by the US and regional partners.

The immediate unfreezing of up to $100 billion in Iranian overseas assets, with the Central Bank of Iran retaining total autonomy over the funds.

Immediate oil waivers: Washington has granted immediate sanctions waivers on Iranian crude oil, banking transactions, insurance, and shipping. This marks a total reversal of the long-standing US strategy to completely suffocate Iranian oil exports.

No "Sunset Clauses": If a final agreement is reached, Washington has promised to permanently dismantle both primary and "long-arm" jurisdiction sanctions. Crucially, this deal lacks the sunset clauses of the 2015 JCPOA—once lifted, they are gone for good.

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June 22, 2026

— Aadil Brar

In this afternoon’s edition: Seoul pitches a “pragmatic” nuclear roadmap to Trump, Taiwan starts assembling its U.S. SkyGuardians, the U.S. deploys its powerful Typhon missile system to Japan, and Beijing rolls out surgical export controls targeting the U.S. drone base.

1. Seoul’s “phased pragmatism” meets Trump

The News: South Korean President Lee Jae-myung presented U.S. President Donald Trump with a step-by-step roadmap for North Korean denuclearization during a G7 dinner in France.

• The strategy: Prioritize a near-term freeze on Pyongyang’s nuclear activities over an immediate, all-or-nothing disarmament demand.

• The concessions: Short-term benchmarks include halting additional fissile material production, blocking overseas weapons transfers, and stopping ICBM development, leaving full denuclearization as a long-term target.

• Trump’s take: He reportedly expressed openness, noting it “could be one way” forward and agreeing to consider it.

Why it matters: The proposal acknowledges that traditional sanctions have failed, especially since North Korea-Russia military cooperation over the Ukraine war has bypassed Western financial pressure.

• By the numbers: North Korea continues to produce enough fissile material to build 10 to 20 nuclear weapons annually, with its ICBM technology nearing final re-entry capability.

The Backlash: Pyongyang is not playing along. Kim Yo-jong issued a sharp statement via the KCNA denouncing the G7’s denuclearization calls as a direct violation of North Korea’s constitution, which legally enshrines its nuclear status. She declared the regime’s nuclear status “irreversibly finalized” and warned that tampering with it means “inviting disaster”.

2. Taiwan begins assembling U.S. “SkyGuardians”

The News: Taiwan has received its first two MQ-9B “SkyGuardian” high-altitude surveillance drones from the U.S., with assembly and ground testing currently underway on the island.

• The background: Part of a 2020 U.S. Foreign Military Sales agreement worth NT$21.7 billion (approx. US$685 million) for four MQ-9B SeaGuardian UAVs. The first two have been delivered; the remaining two are scheduled for delivery in 2027.

• The role: Unlike the U.S. military’s strike-first deployment, Taipei intends to use the drones for high-risk tactical reconnaissance and round-the-clock surveillance against Chinese gray-zone maritime activity.

Why it matters: The MQ-9B is designed for information dominance.

• Allied Integration: The drone can link directly to secure satellite communications networks shared among U.S. allies.

• Deterrence: If a cross-strait conflict erupts, Taiwan, the U.S., and Japan can instantly share real-time targeting telemetry to strike Chinese vessels trying to enforce a blockade east of Taiwan.

3. U.S. deploys powerful “Typhon” missile system to Japan

The News: The U.S. military is deploying its land-based Typhon midrange missile system to Kagoshima Prefecture in southwestern Japan for joint drills, breaking long-standing postwar taboos.

• The drills: The system will participate in Valiant Shield exercises at Kanoya Air Base from Monday through July 1, followed by Orient Shield drills in September.

• The transition: After the drills conclude, the system is slated to move to a U.S. military base in Japan in mid-October, which officials emphasize is a non-permanent deployment.

• The arsenal: Typhon can fire Tomahawk cruise missiles with a range of up to 1,600 kilometers—effectively placing parts of mainland China within striking distance—as well as SM-6 air defense missiles.

Why it matters: This is only the second time the Typhon system has been deployed to Japan, signaling a gradual shift in Tokyo’s “exclusively defense-oriented policy” to allow strategic offensive weapons for joint deterrence rehearsals.

• Beijing’s pushback: China has lashed out, calling the deployment “yet another example of Japan’s accelerated remilitarization” and warning that it harms regional strategic security and heightens confrontation risks.

4. Beijing warns of pop-up espionage and technical “jigsaws”

The News: China’s Ministry of State Security (MSS) has escalated its public counterintelligence campaign, warning that foreign spy services are exploiting pop-up advertisements to harvest user profiles and location data.

• The mechanism: Foreign agencies collude with commercial ad firms, routing data through neighboring regional nodes to bypass Chinese firewalls. When a user accidentally clicks an ad, their personal profiles, location, and behavior are sent back, allowing spy agencies to construct high-precision profiles for targeted recruitment.

• The case: The MSS publicized the case of a defense researcher, surnamed Zhang, who was recruited abroad under an academic consultancy facade by foreign operatives Bu and Mai. Zhang became suspicious after returning to China when they pried into military hardware research, leading him to self-report. He was spared prosecution, illustrating Beijing’s effort to incentivize public reporting.

The Big Picture: The MSS is warning citizens about cumulative, “jigsaw-style” intelligence gathering. Beyond digital profiling, foreign spies are reportedly using online platforms to recruit local actors for “paid photography” at air shows and electronics exhibitions to reconstruct stealth coating parameters and circuit designs.

5. Beijing hits back at U.S. drone and rare earth base

The News: China’s Ministry of Commerce (MOFCOM) has added 10 U.S. entities to its export control list, prohibiting the transfer of Chinese-origin dual-use items to them.

• The trigger: Retaliation for the U.S. Department of Defense’s expansion of its Section 1260H Chinese Military Companies list, which recently blacklisted tech giants Alibaba and Baidu. Beijing noted this violates the Xi-Trump consensus reached in May 2026.

• Government Ban: Concurrently, the Ministry of Finance announced a sweeping procurement ban prohibiting Chinese government agencies from purchasing products from 46 U.S. firms (including divisions of Lockheed Martin, Raytheon, and Boeing).

Why it matters: Beijing is surgically targeting the critical middle tier of the U.S. defense-industrial and rare earth supply chains:

• Rare Earth Squeezing: Target companies like MP Materials and USA Rare Earth are blocked from importing Chinese chemical extraction agents and refining tech, threatening domestic U.S. critical mineral supply chains.

• Drone Supply Disruptions: Drone manufacturers and component suppliers—including Teal Drones, Red Cat Holdings, IMSAR (radar), Aveox (brushless motors), and Jaia Robotics—face immediate cut-offs of lightweight composites, precision magnets, and marine sensor components.

• Tactical Mobility: Fleet vehicle provider Oshkosh Defense and satellite payload maker Ball Aerospace are hit with blocks on dual-use metallurgical inputs and optical processing sensors.

PDR (Pacific Defense Review)

• Seoul: President Lee Jae-myung secured a commitment from Pope Leo to actively consider a visit to South Korea, the DMZ, and potentially North Korea to foster peaceful engagement.

• Taipei: The Air Force’s fiscal 2026 defense budget proposal includes plans to develop an uncrewed aerial system capable of round-the-clock surveillance to track PLA gray-zone activity.

• Beijing: The Ministry of Finance’s sweeping procurement ban against 46 U.S. defense and tech firms will exclude U.S.-funded enterprises operating inside China.

• Washington: Department of Defense restrictions under the expanded Section 1260H list—which sparked Beijing’s retaliatory export controls—are scheduled to take effect on June 30, 2026.

Reads:

China Could Win Taiwan Without Fighting — Foreign Affairs

The Amari Bangkok, a hub for security diplomacy — Intelligence Online

Xi’s Enforcers Are Hunting Down Officials Who Consult Mystics and Borrow Too Much — WSJ

New Activity at Possible Chinese Intelligence Facilities in Cuba — CSIS

If you missed my earlier announcement, I’ve launched a new course: China OSINT Essentials.

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