Skip to content

US-China Relations - 9. page

U.S. Ambassador to Panama Urged Li Ka-shing to Give Up Port Operating Rights

Major Taiwanese news network Liberty Times Network (LTN) recently reported that, in March, Li Ka-shing’s CK Hutchison Holdings Group announced that it would sell its Panama Canal and 43 other port businesses to an investment team consisting of U.S. firm BlackRock and Mediterranean Shipping Company (MSC). The exclusive negotiation period between the two parties expired at the end of July.

CK Hutchison Holdings immediately issued a statement saying it would continue negotiations with the investment team and consider inviting major strategic investors from China to join. So far, COSCO is the only Chinese company allowed by Beijing to participate in the negotiations. U.S. Ambassador to Panama Kevin Marino Cabrera pointed out that CK Hutchison Holdings is a “communist company” and any operator with ties to China must withdraw from operations at the main ports of the Panama Canal.

COSCO is seeking to acquire a stake of 20 to 30 percent in this deal. One proposal would see COSCO acquire stakes in 41 ports, excluding two Panama Canal ports. U.S. Ambassador Cabrera stressed that Washington supports replacing CK Hutchison Holdings.

In the meantime, the Panamanian government has also taken action. It has filed a lawsuit against the operator of the two key Panama Canal ports, a subsidiary of CK Hutchison Holdings. Panamanian President Jose Raul Mulino emphasized that if the court rules that the renewal contract for the ports’ operating rights is invalid, Panama will reclaim the rights.

Source: LTN, August 9, 2025
https://ec.ltn.com.tw/article/breakingnews/5137917

Briefings | | |   Geo-Strategic Trend US-China Relations

HKET: DeepSeek Delayed New AI Model Due to Technical Issues with Huawei AI Chips

Hong Kong Economic Times (HKET), the leading financial daily in Hong Kong, recently reported that Chinese AI vendor DeepSeek delayed its new AI model release originally planned for this May. DeepSeek failed its model training plan due to the use of Huawei Ascend AI chips.

After DeepSeek released its R1 model this January, which caused a major setback in the U.S. stock market, the company was encouraged by the Chinese authorities to use Huawei’s Ascend AI processors instead of NVidia chips to train its AI models.

However, DeepSeek encountered persistent technical problems while training R2 on Huawei Ascend chips. Huawei sent a dedicated team of engineers to DeepSeek’s office to help develop the R2 model using its AI chip. However, even with the team present, DeepSeek was unable to successfully train on the Ascend chip. DeepSeek has now abandoned Huawei AI chips and switched to Nvidia for AI model training. In the meantime, DeepSeek is still working with Huawei to make the R2 model compatible with Ascend chips for inference tasks only.

DeepSeek’s latest woes show that Chinese AI chips still lag behind their American competitors in key tasks, highlighting the challenges China faces in achieving technological self-sufficiency.

Source: HKET, August 14, 2025
https://inews.hket.com/article/3993355

Briefings | | |   Information/Technology US-China Relations

UDN: Micron’s China Branch is Laying Off Employees

United Daily News (UDN), one of the primary Taiwanese news groups, reported that Micron Technology, a major U.S. memory manufacturer, has recently begun laying off employees in China. This personnel change is seen as part of Micron’s global strategic adjustment and is also a clear signal that Micron continues to shrink its business in the Chinese market.

The scale of the layoffs is currently unknown, but they primarily involve R&D, testing, and FAE/AE support teams, affecting employees in several Chinese cities including Shanghai and Shenzhen. Micron officially commented that this move was due to the continued weakness of mobile NAND products in the market, poor financial performance, and lower growth potential than other NAND opportunities. Therefore, it decided to stop the development of future mobile NAND products worldwide. Micron emphasized that this is limited to its mobile NAND product line, and the company will focus on high-bandwidth memory (HBM) chips for data centers and AI infrastructure, as well as NAND solutions for automotive, industrial and other fields.

In fact, with the background of the U.S.-China technology war, a couple of years ago, the Chinese Cyberspace Administration concluded that Micron’s products “failed cybersecurity review” and required operators of critical information infrastructure to stop purchasing them, which had a negative impact on Micron’s business in China. According to Micron’s financial reports, the proportion of its sales from China has dropped from 14.03 percent in fiscal 2023 to 12.1 percent in fiscal 2024. Micron indicated that some Chinese government-backed domestic competitors also pose a threat of intensified competition and oversupply in the Chinese market.

Source: UDN, August 13, 2025
https://udn.com/news/story/7333/8935871

Briefings | | |   Information/Technology US-China Relations

China Questions NVIDIA H20 Chip Security as Trust Deficit Emerges

China has raised security concerns about NVIDIA’s H20 chips, prompting the company to deny the presence of backdoors, kill switches, or monitoring software. NVIDIA emphasized that “these are never the way to build trusted systems, and never will be.”

The controversy erupted after the U.S. approved H20 chip sales to China in July 2025, only for Chinese authorities to subsequently question the chips’ security risks and summon NVIDIA officials for discussions.

According to AI expert Guo Tao, NVIDIA faces a core dilemma of “proving innocence” amid technical barriers and trust deficits. The closed nature of chip design prevents external oversight, while corporate promises alone cannot satisfy national security review requirements. The H20 chip, already viewed as a customized “defective product” under U.S. export controls, now faces intensified market doubts about its security and reliability.

During this geopolitically sensitive period, government and enterprise users increasingly prefer risk-avoidance strategies, including choosing domestic chip solutions or reducing NVIDIA purchases. To reverse this trend, NVIDIA may need to open technical documentation for third-party audits or secure endorsement from international authorities.

Beijing Academy of Social Sciences researcher Wang Peng noted that while NVIDIA’s statement denies security risks, it lacks technical evidence. The Cyberspace Administration of China has requested detailed explanations and proof, requiring technical audits, code reviews, or third-party verification to build trust.

The security controversy has heightened awareness of the importance of technological self-reliance in China. Medical AI company executive Ding Ming reported his firm is intensifying testing of domestic chips, which can meet company needs in some scenarios, though ecosystem development requires more time.

Industry observer Liang Zhenpeng believes the H20 incident will accelerate domestic GPU adoption in data centers and AI training, encouraging more local enterprises to embrace domestic computing solutions and providing broader market opportunities for Chinese chip companies.

However, experts acknowledge that domestic chips still face performance bottlenecks and ecosystem maturity issues that require collaborative innovation and government support to overcome.

Source: Central News Agency (Taiwan), August 7, 2025
https://www.cna.com.tw/news/acn/202508070190.aspx

Briefings | | |   US-China Relations

U.S.-China AI Race Heats Up: U.S. Leads in Innovation and Power, China Accelerates in Application

The U.S. and China both recently unveiled their major Artificial Intelligence (AI) development plans recently. Experts view the U.S. as focusing on innovation and computing power, while China is focusing on applications.

Several studies have compared the AI capabilities between the U.S. and China:

  • Stanford AI Index 2025: The U.S. developed 40 influential AI models in 2024, while China developed 15.
  • HumanEval (code generation benchmark): The performance gap between the U.S. and China narrowed from 31.6 percent to just 3.7 percent.
  • Insikt Group: Chinese generative models are only 3 to 6 months behind their U.S. counterparts, though structural disadvantages remain.
  • In computing power, the U.S. controls 75 percent of the world’s AI supercomputing resources, while China holds only 15 percent. Even with plans to boost domestic computing capacity by 50 percent by 2025, China faces bottlenecks due to restrictions on high-end chips.
  • Stanford AI Index 2025: The U.S. private-sector AI investment reached $109.1 billion in 2024 – 12 times that of China. Investment in generative AI alone exceeded $25.4 billion, more than the combined total of China, Europe, and the UK.

Looking ahead, experts say that while China benefits from massive user data and strong state support for smart cities and governance applications, it remains limited by U.S. export controls on chips and its reliance on overseas training for top AI talent. China’s core algorithms and foundation models still lack originality. As one expert noted, “China’s AI advances rapidly at the application layer, but basic research is still largely imitative.”

Source: Epoch Times, August 3, 2025
https://www.epochtimes.com/gb/25/8/2/n14565961.htm

Briefings | | |   Information/Technology US-China Relations

Chinese Report Reveals US Intelligence Cyberattacks on Chinese Defense Contractors

China’s National Computer Network Emergency Response Technical Team (CNCERT) has reported a significant escalation in cyberattacks by US intelligence agencies targeting Chinese defense and high-tech sectors. According to the China Cybersecurity Association, these attacks specifically aim to steal sensitive military research data and core production information from universities, research institutes, and defense contractors.

The attacks intensified after the 2022 exposure of NSA cyberattacks on Northwestern Polytechnical University. Since then, US intelligence agencies have conducted increasingly sophisticated operations against China’s defense industrial base.

The first case occurred from July 2022 to July 2023, where attackers exploited a Microsoft Exchange zero-day vulnerability to control a major military contractor’s email servers for nearly a year. The attackers compromised the company’s domain controller, gained access to over 50 critical devices, and established persistent backdoors. Using proxy servers in Germany, Finland, South Korea, and Singapore, they launched more than 40 attacks and stole emails from 11 executives, including sensitive military product designs and system parameters.

The second case ran from July to November 2024, targeting a communications and satellite internet defense company. Attackers used proxy IPs from Romania and the Netherlands to exploit unauthorized access and SQL injection vulnerabilities. They planted memory backdoors, infected over 300 devices, and specifically searched for keywords like “military network” and “core network” to steal classified data.

The report indicates that in 2024 alone, foreign state-sponsored Advanced Persistent Threat (APT) groups launched over 600 cyberattacks against Chinese critical infrastructure, with defense contractors being the primary target. US intelligence-backed groups demonstrate particular sophistication through organized attack teams, extensive support systems, and advanced vulnerability exploitation capabilities, posing serious threats to China’s national cybersecurity.

Source: Sputnik News, August 1, 2025
https://sputniknews.cn/20250801/1066658052.html

Briefings | | |   US-China Relations

CNA: Beijing Assessing Cybersecurity Risks of Using Nvidia H20 Chips

Primary Taiwanese news agency Central News Agency (CNA) recently reported that the Chinese authorities questioned Nvidia regarding potential security breaches affecting its H20 chips. Nvidia said its H20 products do not contain backdoors that could allow for remote access or control.

China’s Cyberspace Administration (CAC), the cybersecurity regulator, has expressed concern about a U.S. proposal requiring advanced chips exported overseas to have tracking and location capabilities. While the U.S. had just allowed Nvidia to resume exports of its H20 chips to China, the CAC summoned Nvidia to clarify the risks, casting uncertainty over Nvidia’s continued shipments to China. The CAC asked Nvidia to explain whether the H20 chip poses any backdoor security risks, citing concerns about the data and privacy of users in China.

A spokesperson for Nvidia said in a statement: “Cybersecurity is of paramount importance to us. Nvidia chips do not contain any backdoors that could allow anyone to remotely access or control them.”

The U.S. banned Nvidia from selling its H20 chips to China in April, only to allow them to be sold in July. Nvidia developed the H20 chip earlier specifically for the Chinese market.

Source: CNA, August 1, 2025
https://www.cna.com.tw/news/aopl/202508010006.aspx

Briefings | | |   Information/Technology US-China Relations

China’s Defense Ministry Responds to Largest-Ever U.S. Air Force Exercise: China is “Confident in Handling all Risks and Challenges”

At a regular press briefing on July 30, China’s Ministry of National Defense was asked to comment on the U.S. Air Force’s recent launch of “Mobility Guardian,” its largest-ever exercise in the Western Pacific. The operation aims to test combat concepts such as Agile Combat Employment and marks a significant intensification of the U.S. “Indo-Pacific strategy.”

Ministry spokesperson Zhang Xiaogang responded by saying, “The Pacific should remain a region of peace – not a theater for those who seek to stir up trouble.” He criticized the U.S. for clinging to Cold War-era thinking, showcasing military strength in the Asia-Pacific, using exercises as a pretext to build alliances, and exerting pressure on other nations – actions he said undermine regional peace and stability.

“No matter how fierce the storm, we remain steady at the helm,” Zhang added. He emphasized that China’s military is fully confident and capable of handling all risks and challenges, and will resolutely defend national sovereignty, security, and development interests. He also claimed China’s role as a steadfast force for regional and global peace.

Source: Huanqiu Times, July 30, 2025
https://mil.huanqiu.com/article/4NhooICt6sW

Briefings | | |   @CS Defense/Military US-China Relations