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US-China Relations

China’s Gains and Costs from the Ukraine War and U.S.-Iran Conflict

Since the Ukraine crisis began in 2022, along with intensifying U.S.-Iran tensions and disruptions to Red Sea shipping, global geopolitical and economic structures have undergone major realignment. Beijing has maintained a “non-direct involvement” strategy, avoiding direct participation while benefiting from the disruptions. In the short term, China has gained advantages in energy, market share, renminbi internationalization, and strategic relief. However, China is likely to face significant long-term costs from Western sanctions, declining trust in Chinese companies, and worsening security conditions in East Asia.

China’s main benefits include:

  • Energy: China has become Russia’s largest energy customer after Europe reduced its imports of Russian energy. Discounted Russian oil and gas have provided China with lower-cost energy while creating opportunities for Chinese companies.
  • Market Share in Russia: Chinese firms have expanded rapidly in Russia as Western companies withdrew. China-Russia trade increased from about $100 billion before the war to more than $240 billion, while Chinese automakers now hold more than 60 percent of Russia’s auto market and Chinese smartphones account for more than 70 percent.
  • Renminbi Settlement: The war has accelerated yuan-based trade settlement. More than 90 percent of China-Russia trade is now reportedly settled directly in yuan and rubles, compared with less than 2 percent before the war.
  • Strategic Relief: Conflicts in Ukraine and the Middle East have consumed substantial Western military resources, potentially easing immediate U.S. and NATO pressure on China in the Indo-Pacific.

China also faces significant costs:

  • Western Secondary Sanctions: U.S. and Western sanctions are increasingly targeting third-country companies supplying Russia and Iran with dual-use technologies and other materials. Hundreds of Chinese and Hong Kong entities have been placed on U.S. sanctions or export-control lists, while the threat of secondary sanctions has prompted major Chinese banks to tighten or suspend some Russia- and Iran-related transactions.
  • Loss of Western Trust and Accelerating “De-risking” from China: Beijing’s support for Russia has accelerated European efforts to de-risk from China, potentially threatening access to China’s much larger Western markets. Chinese investments and infrastructure projects in the Middle East also face greater risks from conflict, including disruptions to construction, logistics, energy projects, and exports.
  • Worsening Northeast Asian Security Environment: The deteriorating security environment is a long-term concern. The growing military partnership between Russia and North Korea has strengthened Pyongyang’s position and could reduce Beijing’s influence over North Korea. Meanwhile, closer U.S.-Japan-South Korea security cooperation and deeper bloc-based confrontation could leave China facing a more militarized and polarized neighborhood.

Source:  Epoch Times, August 20, 2026
https://www.epochtimes.com/gb/26/8/20/n14833109.htm

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China Seeks to Overturn Missouri’s $24.5 Billion COVID-19 Judgment

Hubei Province and the Chinese Academy of Sciences have hired the U.S.-based global law firm White & Case to challenge a $24.5 billion default judgment awarded to Missouri over China’s handling of the COVID-19 pandemic. On August 31, the two Chinese entities asked a federal court in Missouri to set aside the judgment and dismiss the lawsuit. White & Case has assigned Washington-based senior litigation partner Christopher Curran, who has represented foreign governments in U.S. courts, to the case.

Missouri filed the lawsuit in April 2020, accusing China, the Chinese Communist Party, Hubei and Wuhan authorities, the Wuhan Institute of Virology, and other Chinese entities of concealing information about COVID-19 and hoarding personal protective equipment (PPE), contributing to shortages and higher prices in the United States. A federal court initially dismissed the case under the Foreign Sovereign Immunities Act, but the Eighth Circuit Court of Appeals revived Missouri’s PPE-hoarding claim in 2024.

After the Chinese defendants failed to appear in court, U.S. District Judge Stephen N. Limbaugh Jr. issued a default judgment in March 2025. The court initially awarded about $8.16 billion in compensatory damages, with the total subsequently increasing to approximately $24.5 billion under applicable federal law. Missouri Attorney General Andrew Bailey said the state would seek to enforce the judgment by targeting Chinese-owned assets, potentially including farmland in Missouri.

Missouri has argued that China’s challenge comes too late and vowed to continue pursuing the judgment.

Source: Epoch Times, September 1, 2026
https://www.epochtimes.com/gb/26/8/31/n14840304.htm

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Beijing Claims China’s Cooperation with Iran Is Legitimate and Should Not Be Disrupted

On August 24, the United States launched Operation Economic Outcast, a new campaign aimed at economically isolating Iran and targeting its financial and commercial networks. The Trump administration also warned countries and entities continuing to support Iran that they could face U.S. sanctions.

Xinhua News Agency reported China’s response, emphasizing that its cooperation with Iran has always been conducted within the framework of international law.

At a regular press briefing on August 25, Chinese Foreign Ministry spokesperson Lin Jian said China has repeatedly expressed its firm opposition to unilateral sanctions that lack a basis in international law and have not been authorized by the UN Security Council.

Lin said economic warfare and “maximum pressure” would not help resolve disputes but would instead further intensify tensions and conflicts, create spillover risks, disrupt the global economic and financial order, and harm the legitimate rights and interests of other countries. He said the immediate priority should be to de-escalate the situation and return to dialogue and negotiations as soon as possible.

Lin said China’s cooperation with Iran has always been conducted within the framework of international law and should not be interfered with or disrupted. He added that China is closely monitoring relevant developments and will take all necessary measures to firmly safeguard its rights and interests.

Source: Xinhua, August 25, 2026
https://www.news.cn/world/20260825/4f45e922e10649b29e9a0c89bbaf83d6/c.html

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U.S. F-1 Visas Issued to Chinese Students Fall Sharply, CIS Report Says

The U.S. State Department issued 40,034 F-1 student visas to Chinese nationals from May through August 2025, down 46 percent from the average for the same period from 2017 to 2024, excluding 2020, and 34 percent from 2024, according to data released by the Center for Immigration Studies (CIS) on August 3. The May–August period accounts for most annual F-1 visa issuances as students prepare for the upcoming academic year.

The CIS report cited concerns that some Chinese students have been involved in espionage and theft of commercial secrets, while acknowledging that most Chinese students do not necessarily have such intentions. It cited a U.S.-China Economic and Security Review Commission report saying Xi Jinping has described overseas Chinese students and scholars as important to China’s efforts to become a global technological and military power.

The report argued that some Chinese students may face pressure from the Chinese government to assist its interests. It suggested considering restrictions on Chinese students entering the United States or studying STEM and other strategically sensitive fields. If such measures are not feasible, the report argued that reducing the number of Chinese students in U.S. higher education could still lower potential espionage and technology-theft risks and thereby strengthen U.S. national security.

Source: NTDTV, August 6, 2026
https://www.ntdtv.com/gb/mkt_ipad/2026/08/06/a104121777.html

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China’s Young Envoys Program Draws Scrutiny Over Potential CCP Influence in U.S. Schools

A new investigation by Defending Education alleges that China’s Young Envoys Scholarship (YES) program provides Beijing with opportunities to influence American students and shape perceptions of China. Launched in 2024 after Xi Jinping invited 50,000 U.S. students to study in China over five years, the program is operated by the China Education Association for International Exchange (CEAIE). Defending Education says it has identified more than 83 universities and 27 K-12 schools across 30 states participating in YES.

The report focuses on CEAIE’s ties to the Chinese Communist Party (CCP). CEAIE’s Chinese-language website identifies Marxism-Leninism, Mao Zedong Thought, and Xi Jinping Thought as its guiding ideologies and states that it adheres to CCP leadership. The organization’s leadership also includes former Chinese education officials and university Party secretaries. U.S. lawmakers have identified CEAIE as part of China’s United Front system and warned that CCP-affiliated organizations can use student exchanges as influence operations.

The investigation cites several examples of YES exchanges. In 2024, Muscatine High School students traveled to China on a trip fully funded by the Chinese government after Xi personally invited the school. Other participants included students from the University of Chicago, Columbia University, Indiana University, Carleton College, and Lincoln High School in Washington. Some exchanges involved Chinese organizations that U.S. officials or researchers have associated with CCP influence activities.

Defending Education argues that these programs go beyond ordinary cultural exchange because the trips are often government-funded, carefully organized, and subsequently promoted through Chinese state media, potentially giving Beijing an opportunity to shape young Americans’ views of China and the CCP.

Source: Defending Education, August 13, 2026
https://defendinged.org/investigations/little-red-classrooms-young-envoys-scholarship-program/

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Chinese Intelligence-Linked Official Buys Building 200 Meters From White House, Raising Security Alarm

A report by The Daily Caller on August 13 raised concerns over Chinese espionage activities in the United States after Philip Qiu, whom the report describes as a former senior Chinese intelligence official, purchased a nine-story historic building less than 200 meters from the White House. Qiu and his family foundation reportedly paid $8.4 million for the Securities Building on July 21. Former CIA operations officer Bryan D. Wright warned that the property could potentially be used as an intelligence base to monitor communications and digital activity around sensitive government facilities.

According to The Daily Caller, Qiu’s background includes military training and work within China’s public security and United Front systems. University records reportedly described him as having received special-forces training, while Chinese government records show that he later worked in organizations affiliated with the United Front system, including the Shanghai branch of the All-China Federation of Returned Overseas Chinese and the Shanghai Overseas Chinese Affairs Development Foundation. In 2023 and 2024, he reportedly helped organize visits for Hong Kong students to Shanghai’s special police forces.

Qiu also founded the Chinese American Museum in Washington, D.C., located about 700 meters from the White House. Although the museum says it has never received funding from, or been controlled or influenced by, any foreign government, The Daily Caller found that Chinese government entities had co-organized at least eight events with the museum, four of which received support from religious organizations controlled by the CCP’s United Front system.

Wright, China expert Gordon Chang, and national-security advocate Michael Lucci urged the U.S. government to investigate the property and consider measures to prevent individuals with alleged ties to Chinese intelligence and security agencies from acquiring strategically sensitive real estate near key government facilities.

Source: Liberty Times (Taiwan), August 15, 2026
https://news.ltn.com.tw/news/world/breakingnews/5540464

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China’s Continued Criticism of Japan Also Targets the United States

China has continued to pressure Japan diplomatically, militarily, and economically since Japanese Prime Minister Sanae Takaichi’s remarks last year about a potential “Taiwan contingency,” with no signs of easing, according to Nikkei Asia. Analysts say Beijing’s campaign is aimed not only at Tokyo but also indirectly at Washington, seeking to weaken the U.S.-led security order in Asia. Chinese President Xi Jinping has repeatedly criticized Japan’s alleged return to militarism during meetings with foreign leaders, while Foreign Minister Wang Yi has also devoted significant attention to Japan in diplomatic engagements.

Japanese officials and China experts identify three main objectives behind Beijing’s pressure campaign. First, Xi’s strong reaction to Takaichi’s Taiwan remarks has hardened China’s policy toward Japan. Second, Beijing seeks to use Japan as a warning to other countries against challenging China’s position on Taiwan. Third, China views the U.S.-Japan alliance as a major obstacle to its efforts to expand its influence over the regional and international order.

Japan’s position as a key U.S. security partner and major power along the First Island Chain makes it particularly important to Beijing. By portraying Japan as returning to militarism, China hopes to undermine support for Japan’s defense buildup and its alliance with the United States. Beijing may also believe that President Trump’s relatively transactional approach to alliances provides greater room to pressure Tokyo.

However, the strategy carries risks. Major countries in North America, Europe, and Asia have largely rejected Beijing’s characterization of Japan as becoming militaristic. Continued Chinese pressure could instead heighten concerns about Beijing’s behavior and strengthen support for closer security cooperation with Japan.

Source: United Daily News (Taiwan), August 11, 2026
https://udn.com/news/story/6809/9683085

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Chinese Communist Party Cultivates Ties With U.S. Democratic Socialists

A Fox News commentary by Douglas MacKinnon on August 6 alleged that some members of the Democratic Socialists of America (DSA) have accepted Chinese government-sponsored trips to China, received VIP-level treatment, and publicly expressed support for the People’s Republic of China and “Chinese socialism.” The report cited research indicating that the Chinese Communist Party (CCP) has increasingly engaged with Western left-wing political groups through organized visits and high-level hospitality.

These exchanges appear to go beyond cultural diplomacy, with Chinese officials using carefully managed itineraries and political messaging to promote a favorable image of the CCP while downplaying criticism of its one-party rule, political repression, and human rights record. One DSA leader who recently visited China reportedly said Chinese officials treated the delegation “like royalty” and described the officials as displaying a “calm and comfortable confidence.”

The report also highlights an alleged double standard within parts of the DSA. While the organization advocates restricting or abolishing institutions such as police, prisons, ICE, and the military as instruments of state oppression, some members have expressed support for a Chinese political system built around extensive police, intelligence, surveillance, and censorship powers.

Source: Aboluo, August 10, 2026
https://www.aboluowang.com/2026/0810/2419098.html

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