China Expert Gordon Chang: 'End-of-Regime Conduct' Signals Problems in Beijing

China's Trade War Concessions

• 💡 China is making significant concessions in the trade war by not collecting tariffs on key goods like semiconductors and aviation products.
• 📌 This move, though unannounced, indicates an important concession and highlights the current Chinese political system's intrigue and inflexibility.

Chinese Economic Contraction

• 📉 Evidence suggests China's economy is contracting, not growing at the reported 5.4% pace, with deflationary pressures evident in price data.
• 📊 Underlying indicators, such as a 3.5% decrease in tax receipts, further support the contractionary outlook.
• ⚠️ The imposition of a potential 145% tariff on Chinese goods entering the US would lead to factory closures and reduced shifts.

Geopolitical Antagonism

• ⚠️ Despite economic weakness, China is antagonizing the Philippines, Taiwan, South Korea, and Australia, actions described as 'end of regime conduct'.
• 🎯 This behavior is perplexing, especially as Chinese leader Xi Jinping cannot appear to be yielding to the US or looking dependent on trade.

Huawei's AI Chip Development

• 🚀 Huawei is preparing to test its new AI processing chip, the Send 910D, aiming to surpass Nvidia's H100.
• 🔬 While progress is being made, China still lags behind the US, partly due to the ineffective enforcement of sanctions.
• ⚡ The US needs to implement more comprehensive and rigorously enforced sanctions to widen the gap with China.