China Threatens Retaliation Over U.S. Accusations of “Industrial-Scale” AI Distillation
Ahead of the upcoming Trump-Xi summit, where artificial intelligence is expected to be a key topic, China’s state-run People’s Daily published a commentary today pushing back against recent U.S. accusations that Chinese AI firms are engaged in “industrial-scale” distillation of American AI models.
The article, written under the byline “Zhong Sheng (钟声)” — a pseudonym for “China’s Voice,” frequently used by the paper for authoritative statements reflecting the Chinese government’s position — claims that a joint warning issued by the U.S. National Security Agency, the Cybersecurity and Infrastructure Security Agency, and the FBI has no legal basis. It argues that distillation is a standard practice used by AI companies worldwide, including American firms, and characterizes the U.S. crackdown as disguised protectionism rather than a genuine security concern. The commentary accuses Washington of applying a double standard — treating the same technique as routine when used by U.S. firms but as an “attack” when used by Chinese firms — and warns that Beijing will retaliate if its companies’ legitimate interests are harmed.
The U.S. agencies had alleged that Chinese firms including DeepSeek, Moonshot AI, Alibaba, MiniMax, and StepFun used variants of American AI models to train their own products, likely with the Chinese government’s knowledge, and described the activity as aggressive and malicious.
Distillation refers to using outputs from large, costly AI models to train smaller ones more cheaply. The dispute comes as the two countries prepare for a second Trump-Xi summit in Washington on the 24th, with AI expected to be a major topic; Reuters has reported the two sides plan a separate dialogue on AI safety risks in mid-September.
Source: Central News Agency (Taiwan), September 16, 2026
https://www.cna.com.tw/news/acn/202609160111.aspx
China’s Steel Industry Calls for Self-Discipline Amid Oversupply and Sinking Profits
Forty-five Chinese steel conglomerates — including China Baowu, Ansteel, HBIS, and Shougang — have jointly issued an initiative through the China Iron and Steel Association (CISA) urging the industry to rein in production and reduce inventories, citing a market plagued by “strong supply, weak demand, low prices, and thin profits.”
According to a report by The Paper, CISA’s initiative outlines three measures: strictly enforcing output controls, maintaining voluntary production restraint to cut stockpiles, and fully utilizing industry price-monitoring personnel. The report notes that all three measures target the same underlying problem — the need for supply-side restraint.
Citing data from Chinese financial data provider Wind, the report states that 26 A-share-listed steel companies posted combined revenue of roughly RMB 555.7 billion (approximately US$78.3 billion) in the first half of the year, yet their combined net profit attributable to parent companies came to less than RMB 7 billion (about US$990 million). Of these, 11 companies posted losses, and seven earned less than RMB 300 million (about US$42 million) each.
CISA’s own figures show that major surveyed steel enterprises recorded total profit of RMB 58.4 billion (about US$8.2 billion) in the first half, down 5.5 percent year-on-year. Profit from core steelmaking operations alone fell 40 percent to just RMB 16.7 billion (about US$2.4 billion), with a sales profit margin of only 0.77 percent.
The initiative states that China’s steel industry has shifted from a growth phase into one of contraction and optimization. It says that since 2026, domestic steel demand has continued weakening while inventories remain elevated, driving prices down and putting significant pressure on producers’ operations.
Source: Central News Agency (Taiwan), September 15, 2026
https://www.cna.com.tw/news/acn/202609150360.aspx
Chinese Documentary Filmmaker Du Bin Sentenced to 18 Months Over Criticism of National Leaders
Chinese documentary filmmaker and writer Du Bin was detained by Beijing police in October 2025 on suspicion of “picking quarrels and provoking trouble” and sentenced to 18 months in prison on August 28. His family has not received the judgment or an official court notification. During his mother’s final illness, the family requested that he be allowed to return home to see her, but the court denied the request. His mother died on August 24, four days before he was sentenced.
Du, a former Beijing-based photographer for The New York Times, has long documented the experiences of petitioners, former labor-camp detainees, and other social groups through photography, documentaries, and books. According to China Human Rights Defenders, about 40 of his reposts or comments on political issues on X were cited as evidence in his conviction. Earlier reports said the alleged offense had at one point been described as “attacking national leaders.” However, “attacking national leaders” is not a formal offense under China’s Criminal Law, and Du was ultimately convicted of “picking quarrels and provoking trouble.”
Du has previously been detained on similar charges. In 2013, he was detained after producing a documentary about alleged torture of Falun Gong practitioners at the Masanjia Women’s Forced Labor Camp and was released after 37 days. He later published several books in Hong Kong and Taiwan about the Masanjia Forced Labor Camp and the Tiananmen Square Massacre. In December 2020, he was again detained on suspicion of “picking quarrels and provoking trouble” and released after 37 days. During that case, police investigated his books, publishing activities, finances, and possible foreign funding. Du denied wrongdoing and said his publications and financial activities were lawful.
Source: Epoch Times, September 8, 2026
https://www.rfa.org/mandarin/zhengzhi/renquan/2026/09/08/china-journalist-du-bin-provoking-trouble-documentary-producer/
China’s Foreign Ministry: Spreading Narratives Portraying AI as a Threat Serves No Party’s Interests
Chinese Foreign Ministry spokesperson Guo Jiakun said on September 14 that spreading narratives portraying AI as a threat does not serve the interests of any party.
A reporter asked: Not long ago, Dario Amodei, Sam Altman, Elon Musk, and others called on artificial intelligence companies to slow down the development of frontier technologies. Amodei said that China’s continued lead in artificial intelligence would pose a risk to U.S. national security. What is the Foreign Ministry’s comment on this?
“AI development concerns the common well-being of all humanity. All parties should work together to promote AI that is open, inclusive, beneficial to all, and used for good. Spreading various narratives about threats, engaging in confrontation and vicious competition, will only disrupt the global AI governance process and serve no party’s interests,” Guo said.
{Editor’s Note: This statement could suggest that China does not intend to slow its development of frontier AI technologies even if the United States chooses to do so.}
Source: Xinhua, September 14, 2026
https://www.news.cn/world/20260914/a3d886e5ebeb4307af30bf71df511550/c.html
China’s State Security Minister Warns of Six AI Security Risks; Political and Ideological Security Ranked No. 1
Chen Yixin, head of China’s Ministry of State Security, published an article under his name warning that the rapid development and deployment of AI presents significant risks to China’s national security. Chen said AI is reshaping the global economy, power structure, innovation, and social governance, and argued that China must seize the opportunities while establishing safeguards against emerging threats.
Chen identified six major areas of concern:
- Systematic threat to China’s political and ideological security. As of June 2026, China had more than 500 million AI-product users, with daily token usage exceeding 140 trillion. Chen warned that hostile forces and others with ulterior motives could misuse generative AI technologies—including deepfake audio and video, AI-generated text and images, and automated online accounts—to cheaply and rapidly produce political rumors, spread harmful information, and incite social division, using “public opinion warfare” and “cognitive warfare” to directly threaten China’s political, institutional, and ideological security.
- AI-enabled cyberattacks that could automate vulnerability discovery and malicious software development.
- Increased risks of espionage, data theft, and personal-information leakage.
- Technology controls and closed ecosystems that could widen disparities in global AI development.
- Disruptions to social governance caused by algorithmic bias, data poisoning, and unclear accountability.
- Fundamental transformation of military warfare as AI becomes increasingly involved in intelligence analysis, decision-making, target identification, and battlefield operations.
Chen proposed seven measures to strengthen AI governance:
- Maintain Party leadership.
- Improve cross-government coordination.
- Strengthen risk monitoring and early-warning systems.
- Increase research into core AI technologies and computing chips.
- Improve legal safeguards.
- Expand public education on AI security risks.
- Deepen international cooperation.
Source: People’s Forum, September 14, 2026
https://www.rmlt.com.cn/2026/0914/755773.shtml
Beijing Imposes Total Ban on Drones
Beijing has escalated its already strict drone regulations to an unprecedented level, announcing a comprehensive ban on flying, storing, and transporting drones anywhere within the city’s administrative boundaries. The new rule takes effect November 15.
Under the regulation, the entire municipality is designated a no-drone zone. No individual or organization may fly, possess, store, or transport drones or their core components within Beijing. Anyone who has previously stored drone equipment in the city must relocate it outside Beijing before the deadline. Residents who own drones can either carry them out of the city themselves or use buyback and disposal services the city is offering. Those who fail to comply face confiscation and fines.
Beijing had already banned drone flights without special permits and, since May 2026, banned drone sales within its jurisdiction, requiring real-name registration for existing owners. The new rule goes further by eliminating even private possession.
Drones have become widely popular in China in recent years, used both by tourists for recreation and by professionals for work. Andrew Yang, a former U.S. defense official now at Nanyang Technological University in Singapore, said the total ban reflects how politically sensitive the issue is for Beijing and how central it is to the Communist Party’s pursuit of absolute security.
The move follows a rare incident on June 26, when a light tourist aircraft struck one of Beijing’s tallest skyscrapers, killing the pilot and injuring 13 people, raising concerns about security gaps. Analysts also note the ban comes a year before the Communist Party’s 21st National Congress, with Zhongnanhai—the seat of China’s top party and government leadership—located in central Beijing, heightening pressure to guarantee absolute safety for leaders.
Source: Radio France International, September 14, 2026
https://rfi.my/D2xO
CCP Advisor: China’s Population Decline Is Such a Serious Issue That It Cannot Wait
Jin Canrong (金灿荣) is a Chinese international relations scholar who serves as an advisor to senior Chinese Communist Party officials. He recently published an article warning Chinese officials that the country’s population decline and aging problems are becoming increasingly severe:
China’s population decline is a “slow-changing” issue whose full impact may not become apparent for several years, but it has already become increasingly urgent. China’s competition with the West is not just with the 300 million people in the United States, but with roughly 1 billion people across the West. Population is an extremely important strategic resource. Governments at all levels should strengthen their sense of urgency, increase policy support, and improve implementation to slow the population decline.
The seriousness of population loss can be seen in the three northeastern provinces and Inner Mongolia, where some cities with populations of around 1 million reportedly have only several hundred births a year, while once-busy commercial districts have become deserted. China’s population is also aging, with statistics showing that the median age reached 41.98 in 2025, which could have significant effects on the country’s economic and social development.
China’s large population base has contributed to its talent and engineering advantages. While many skilled workers are developed through education and training, a large population provides a broader base from which talent can emerge. Without a sufficiently large number of newborns, maintaining a large pool of highly capable talent could become more difficult.
Social awareness of China’s population challenges has grown in recent years, but current government measures remain relatively moderate and should be strengthened. Addressing the underlying causes of population decline would require substantial financial and other resources, but the cost will be even bigger if we delay our actions.
Source: Guancha, September 7, 2026
https://user.guancha.cn/main/content?id=1731571
Report Alleges Internal Censorship at China’s CGTN
A new report by the Europe-based rights group Safeguard Defenders, released September 10, 2026, details internal censorship and propaganda practices at China Global Television Network (CGTN), based on interviews with eight former employees conducted in 2022–2023. All spoke anonymously; some still have family in China.
The 29-page report, “China’s Party-State Global TV in Focus,” covers forced televised confessions, internal newsroom operations, “telling China’s story well” campaigns, and content-control mechanisms. One former scriptwriter recalled that footage of Hong Kong consulate employee Simon Cheng’s 2019 “confession” arrived just before airtime, with orders from above to broadcast it regardless of staff objections. Cheng later said he was tortured and coerced into recording multiple confessions while detained by Chinese police. The report says CGTN and its predecessor aired at least nine such confessions between 2013 and 2019, including British businessman Peter Humphrey and Hong Kong bookseller Gui Minhai.
A Chinese law lecturer told Radio Free Asia that televised confessions amount to compelled self-incrimination, violating basic principles of criminal justice, especially when made without legal counsel or freely given consent.
Former staff also described heavy scripting of coverage, with one estimating three-quarters of programming centered on Xi Jinping, and describing extensive advance-prepared news meetings and scripted teleprompter delivery, with punishment for deviation. Coverage of Xinjiang was cited by one former employee as the reason for leaving CGTN, amid increased reporting after 2018 framing mass detention facilities as “vocational training centers.”
CGTN states on its website that it adheres to principles of objectivity and balance. A Safeguard Defenders researcher said the report shows CGTN remains under direct Chinese Communist Party control despite denials, using its programming to advance Party propaganda and political aims.
Source: Radio Free Asia, September 10, 2026
https://www.rfa.org/mandarin/zhengzhi/renquan/2026/09/10/china-safeguard-defenders-televised-confessions-censorship-cgtn/