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Chinese State-Owned Enterprises Reportedly Ordered to Replace Anthropic’s Claude Code

A notice circulating on Chinese social media claims that state-owned enterprises in Shandong Province have been instructed to investigate employees’ use of Anthropic’s Claude Code and other foreign AI coding assistants and replace them with domestic alternatives. The notice alleges that Claude Code contains a hidden detection mechanism that identifies users in China’s time zone or those accessing the service through proxy servers and transmits related information back to Anthropic’s servers.

The directive reportedly originated from provincial cyberspace authorities and was distributed throughout Shandong’s state-owned enterprise system. It follows a July 8 advisory issued by China’s Ministry of Industry and Information Technology, which warned that certain versions of Claude Code contained a potential “security backdoor” and recommended uninstalling or upgrading the affected software.

Chinese technology media reported that reverse engineering found Claude Code collected information such as users’ system time zones and proxy settings and attached hidden markers to certain network connections. However, a Chinese network engineer said such behavior does not necessarily indicate the existence of a backdoor, noting that many software products collect similar information for security and anti-abuse purposes. He argued that Beijing demands Chinese software to set up “backdoor” but warns about foreign software for “backdoor” activity, to reinforce public distrust of foreign technology.

Chinese technology media reported that reverse engineering found Claude Code collected information such as users’ system time zones and proxy settings and attached hidden markers to certain network connections. However, a Chinese network engineer said such behavior does not necessarily indicate the existence of a backdoor, noting that many software products collect similar information for security and anti-abuse purposes. He argued that while Beijing requires domestic software to incorporate “backdoors,” it simultaneously portrays similar data collection by foreign software as evidence of espionage or security risks, reinforcing public distrust of foreign technology.

Source: Epoch Times, July 18, 2026
https://www.epochtimes.com/b5/26/7/17/n14811411.htm/amp

Kimi K3 Identifies Itself as Claude, Reviving Debate Over China’s AI Distillation Practices

China’s Moonshot AI recently released its latest large language model, Kimi K3, claiming performance comparable to leading models such as Claude and GPT-5-class systems. Chinese media have promoted Kimi as a domestic alternative to Claude and ChatGPT. However, user testing has reignited questions over whether the model was trained using outputs generated by Anthropic’s Claude.

Screenshots circulating online show a user said, “hey kimi hows it going!” and Kimi K3 responded with: “Hey! Doing well, thanks for asking! Quick heads up though—I’m Claude, not Kimi. Kimi is a different AI assistant (made by Moonshot AI). Easy mix-up, no worries!”

Similar behavior was previously observed in Kimi K2.5, which occasionally identified itself as Claude after extended conversations or when asked directly about its identity. The behavior resembles patterns described by Anthropic, that models distilled or trained on Claude-generated outputs may inherit Claude’s self-identification and response characteristics.

The incident has renewed scrutiny of Chinese AI developers’ use of model distillation—a technique that trains smaller models on the outputs of more advanced systems to reduce development costs and accelerate deployment. OpenAI has previously accused DeepSeek of improperly using ChatGPT-generated data. In addition, Anthropic alleged in a June letter to the U.S. Senate Banking Committee that operators linked to Alibaba’s Qwen AI laboratory used nearly 25,000 fraudulent accounts to generate approximately 28.8 million interactions with Claude in an effort to harvest model outputs. The repeated identity confusion exhibited by Kimi has fueled further speculation that Chinese AI developers may be relying extensively on distilled outputs from leading U.S. models.

Source: NTDTV, July 19, 2026
https://www.ntdtv.com/b5/2026/07/19/a104116746.html

Dutch Report Warns of CCP Interference in Strategic Industries

A report released on July 3 by the Hague Centre for Strategic Studies (HCSS) and the China Knowledge Network (CKN) warns that the Chinese Communist Party (CCP) is employing a broad range of foreign interference tactics to expand its influence over the Netherlands’ strategic industries, particularly the semiconductor, maritime, and aerospace sectors. The report identifies cyber espionage, talent recruitment, economic coercion, information operations, legal pressure, and supply chain leverage as key tools used by Beijing.

The report identifies Dutch semiconductor giant ASML as a primary target because of its global monopoly on commercial extreme ultraviolet (EUV) lithography machines, which are essential for producing advanced semiconductors used in cutting-edge electronics and military systems. According to the report, the CCP has sought to acquire ASML’s technology through talent recruitment, academic collaboration, and reverse engineering, while also using rare earth export controls to exert pressure on the company’s supply chain. Other semiconductor firms, including NXP, are also identified as targets.

In the maritime sector, the report warns that Chinese state-owned enterprises, including COSCO Shipping Ports and China Merchants Port Holdings, have established significant operational roles at the Port of Rotterdam. It cautions that, in a crisis, Beijing could exploit these positions through cyber espionage, data access, or targeted disruption, potentially affecting European energy supplies, industrial production, and NATO logistics. The report concludes that China’s growing influence over Dutch strategic industries could constrain the Netherlands’ policy options, delay military preparedness, and complicate coordination with allies in the event of a Taiwan Strait conflict.

Source: Epoch Times, July 16, 2026
https://www.epochtimes.com/gb/26/7/15/n14810251.htm

Xi Jinping Calls for New Global AI Order to Challenge U.S. Leadership

At the 2026 World Artificial Intelligence Conference (WAIC) in Shanghai, Xi Jinping called for a new global AI governance framework, positioning China as an alternative to the U.S.-led AI order. He described China’s open-source AI models as a global public good and argued that AI development and governance should be driven by international cooperation rather than dominated by any single country.

Xi criticized the “overextension of the national security concept” in AI governance, an apparent reference to U.S. technology restrictions on China. He announced that China will provide 5,000 AI training opportunities for developing countries over the next five years, expand AI cooperation with BRICS, ASEAN, Latin America, and Africa, and make its AI-powered weather forecasting and early warning system available to 30 countries.

Xi also highlighted the launch of the Chinese-initiated World AI Cooperation Organization (WAICO), which reportedly has 29 member states. The initiative reflects Beijing’s broader effort to shape global AI governance, promote Chinese AI standards, and strengthen technological partnerships with the Global South as strategic competition with the United States intensifies.

Source: Deutscher Welle, July 17, 2026
https://www.dw.com/zh/习近平倡议中国建立全球ai新秩序-挑战美国主导地位/a-78007555

China Successfully Recovers Orbital-Class Rocket Booster for the First Time

China announced on July 10 that it had successfully recovered an orbital-class rocket booster for the first time, marking a major milestone in its effort to develop reusable launch vehicle technology. According to state media, the booster from a Long March-10B launch vehicle separated from the upper stage about six minutes after liftoff, executed a controlled vertical descent, and was successfully captured by a recovery net mounted on an offshore platform. Chinese officials described the test as a major technological breakthrough.

Beijing has identified reusable rocket technology as a national priority and has relaxed financing rules to support the country’s commercial space sector. The technology is considered essential for reducing launch costs and enabling the rapid deployment of China’s planned satellite constellations, which are widely viewed as potential competitors to SpaceX’s Starlink network. The Long March-10B is also part of China’s crewed lunar program, which aims to land astronauts on the Moon by 2030.

Despite this milestone, China still trails the United States by a considerable margin in reusable launch capabilities. SpaceX has completed hundreds of successful booster recoveries and routinely reuses boosters at a rapid operational pace, while China has achieved only its first successful recovery and plans just a limited number of reuse demonstrations this year. How quickly China closes this technological gap is likely to influence the next phase of U.S.-China competition in space, as Beijing seeks to challenge U.S. leadership in the sector.

Source: VOA, July 11, 2026
https://www.voachinese.com/a/china-claims-milestone-in-reusable-rockets-but-wide-gap-with-spacex-remains-20260701-/8170387.html

China Advances Development of Asteroid Defense and Early Warning System

Chinese authorities announced that they are advancing plans for a national asteroid defense system as part of the country’s broader space security strategy. Officials described the initiative as consistent with China’s role as a “responsible major space power” and said it is intended to strengthen the country’s capability to detect, assess, and respond to potential asteroid threats.

According to the plan, the system will integrate ground- and space-based monitoring capabilities. On the ground, China intends to establish a geographically distributed network of large-aperture optical telescopes to provide long-range, wide-area, and high-precision observation. In space, authorities plan to deploy a constellation of monitoring satellites equipped with telescopes to overcome the limitations of atmospheric interference and the day-night cycle, with particular emphasis on detecting asteroids approaching from the direction of the Sun, which are more difficult to observe from Earth.

Chinese researchers said they have achieved initial breakthroughs in asteroid impact risk prediction models and algorithms and are developing an operational near-Earth asteroid early warning system. The integrated monitoring network is designed to enable continuous, around-the-clock observation and enhance China’s ability to detect, track, and assess potential asteroid impact risks.

Source: People’s Daily, July 6, 2026
https://paper.people.com.cn/rmrb/pc/content/202607/06/content_30166956.html

China Plays a Leading Role in UN’s Adoption of First Global Regulation for Automated Driving Systems

The United Nations World Forum for Harmonization of Vehicle Regulations approved the world’s first Global Technical Regulation (GTR) for Automated Driving Systems (ADS) during its 199th session in Geneva from June 22–26. Jointly developed by China, the European Union, the United Kingdom, the United States, Canada, and Japan, the regulation establishes a common international safety framework for the deployment of automated driving technologies.

The regulation introduces the principle that an automated driving system should achieve a safety level at least equivalent to that of a competent and attentive human driver. It also establishes minimum safety requirements for key functions, including dynamic driving task (DDT) performance, minimum risk maneuvers (MRM), and human-machine interaction, underscoring a “safety first” regulatory approach.

Chinese authorities emphasized the country’s significant role in developing the regulation. Since 2019, China has served as vice chair of the UN Working Party on Automated/Autonomous and Connected Vehicles and co-chair of the Automated Driving Systems working group. According to the Ministry of Industry and Information Technology, Chinese organizations led the drafting of several core provisions and submitted dozens of technical proposals covering dynamic driving tasks, human-machine interaction, and testing and validation methodologies.

Source: People’s Daily, July 3, 2026
http://finance.people.com.cn/n1/2026/0703/c1004-40752892.html

China’s Robot Rental Market Expands as Commercial Adoption Accelerates

China’s robot rental market is expanding rapidly, emerging as a new business model that connects embodied AI technologies with commercial users. Industry officials say China’s humanoid robotics sector entered a new phase of scaled growth in the first quarter of 2026, driven by advances in production capacity, deliveries, and commercialization.

Robot rental services are gaining traction nationwide. In Hangzhou, Zhejiang Province, a technology experience center offers 46 rentable devices, including humanoid robots, robotic dogs, robotic arms, and chess-playing robots, and has hosted nearly 1,000 rental and performance events since the beginning of 2026. A robotics rental center in Jinan, Shandong Province, reported that each robot is rented for an average of 10 to 15 days per month, generating approximately RMB 50,000 (US$7,000) in monthly rental revenue. Similar rental centers have also opened in Beijing, Guangzhou, and other cities.

According to iiMedia Research, China’s robot rental market is projected to exceed RMB 10 billion (US$1.4 billion) in 2026, representing a tenfold increase from 2025. Industry participants say demand is shifting from seasonal events and promotional activities toward more stable commercial applications. One rental platform reported that entertainment accounts for 27 percent of orders, while commercial marketing, service operations, education and tourism, and light manufacturing together make up the majority. Industry participants also cite standardization, insurance, and workforce development as key challenges to further expansion.

Source: People’s Daily, June 15, 2026
http://finance.people.com.cn/n1/2026/0615/c1004-40740490.html