US-China AI competition + Deng Xiaoping's 120th birthday + South China Sea

MERICS China Essentials is back from the summer break. In this issue, we bring you up to speed about key China-related developments of the past weeks.

In our top story we look at the US debate about AI competition with China. Tech leaders Sam Altman (OpenAI) and Marc Zuckerberg (Meta) outlined opposing visions for how the US can secure its AI leadership. In the background is a new draft bill, the ENFORCE Act, that would take AI export controls to a new level, controlling not just hardware exports, but also access to the models themselves. MERICS Lead Analyst Rebecca Arcesati says: “It’s not inconceivable that the geopolitical situation will force some paradigm shift in the governance and use of open-source software for innovation.”?Read more

China commemorated the 120th birthday of former leader Deng Xiaoping on August 22, and President Xi Jinping gave a speech using Deng’s legacy to bolster his own rule. “Insofar as Deng dismantled Maoism, Xi is reassembling those Maoist building blocks in a way that cements his own role and legacy as the center of power in the party and China as a whole,” says Alexander Brown , Analyst at MERICS.?Read more

Chinese and Philippine coast guard vessels were involved in collisions on August 19 and 25 as Manila tried to deliver supplies to a coast guard ship in the disputed Sabina Shoal. MERICS Analyst Claus Soong says: "China will continue to push the boundaries to establish its dominance in the South China Sea by using non-military forces such as the Coast Guard, fishing vessels, and maritime militia. Beijing's non-military expansion is geared towards maintaining its presence in disputed waters and coercing other claimants into acceptance – while as much as possible avoiding a US military response.”?Read more

In response to Europe’s tariffs on Chinese-made electric vehicles (EVs), China has launched an anti-subsidy investigation into EU dairy imports. This will frustrate European producers. But as MERICS Lead Analyst Jacob Gunter points out: “The bulk of EU-China trade remains unaffected for now. This shows that China’s response to the EU’s EV tariffs has actually been quite restrained. Beijing obviously feels the need to respond to them – but not so much as to risk escalation with the one major global market that is still overwhelmingly open to Chinese products.”?Read more

You can read our MERICS China Essentials online here.