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THIS WEEK:

PLA Navy conducts drills in the South China Sea, the first U.S.-China AI risk reduction talks are held, and Xi continues prioritizing political education. 

1. Washington Sets Sights on Chinese Biotech, Medical Sectors

What Happened: After introducing a new version of the BIOSECURE Act last Friday — which would effectively ban future federal technology procurement and contracting with top Chinese pharmaceutical firms — U.S. lawmakers suggested bringing the bill to a full congressional vote later this month.

The Stakes: The passage of the BIOSECURE Act would force U.S. and Western pharmaceutical companies to find alternative manufacturers and supply chain partners, as the targeted companies make up some of the world’s largest contract development and manufacturing organizations. In a recent survey of pharma executives, more than half of respondents stated that it would be difficult to replace partners like WuXi AppTec, while over 20 companies have started drafting contingency plans.

Medical Sector Tariffs, Too: The Biden administration announced on Tuesday a set of new tariffs on strategic sectors ranging from electric vehicles and semiconductors to, to the surprise of some observers, medical supplies. As part of the duty adjustments, Chinese-made syringes, needles, rubber gloves, and certain types of PPE will soon be subject to 25% and higher tariffs. Beijing has not responded to the BIOSECURE Act publicly, since it is not yet law, but it did respond to the tariffs.
 
Why It Matters: Biotechnology is quickly picking up steam as a new arena of U.S.-China competition across high- and low-tech products alike. Unlike other emerging technologies, corporations and scientists have been relatively unprepared for Washington’s new scrutiny of the sector, which holds implications for trade, innovation, and public health across the world.

By Patrick Beyrer, Research Associate, Global Public Health, Center for China Analysis

Learn More: See Patrick’s newly released paper, Taking Stock of U.S.-China Biotechnology Competition, for more on the shifting dynamics and trends for U.S.-China biotechnology competition.

2. PLA Navy Conducts Drills in the South China Sea

What Happened: The People’s Liberation Army (PLA) Navy conducted a series of drills in the South China Sea over the weekend in apparent response to the recently concluded annual U.S.-Philippine military exercise.

Drills in Detail: The PLA Southern Theater Command kicked off several days of anti-missile and anti-submarine drills in the South China Sea. The drills included the participation of the Zunyi, a Type 055 guided-missile destroyer and one of China’s most powerful warships. The exercises featured “sea warfare, air defense and anti-missile warfare, and anti-submarine warfare.”

Rational and Legitimate: PLA analysts pointed out that the drills were designed to “improve China's ability to safeguard its national sovereignty and maritime rights and interests,” calling them “rational, legitimate, and in line with international law.” Analysts also highlighted that the exercises were “completely different in nature from the U.S.-Philippe Balikatan exercises,” which are “highly targeted, offensive, and provocative.”

Why It Matters: The South China Sea has become a key flashpoint between China, regional claimants, and the United States. As the United States bolsters its alliance with the Philippines, China will likely sustain a high operational tempo in disputed waters to showcase its resolve and assert administrative control.

By Lyle Morris, Senior Fellow for Foreign Policy and National Security, Center for China Analysis

Learn More: CCA Research Associate Jie Gao analyzes China’s military diplomacy in the region in Re-Engaging With the World: China's Military Diplomacy in 2023.

3. First U.S.-China AI Risk Reduction Talks Are Held

What Happened: U.S. and Chinese officials met in Geneva on Tuesday for the first meeting of a bilateral dialogue on artificial intelligence following a mechanism agreed on by President Biden and President Xi in San Francisco in November 2023.

Shared Concerns: The two sides discussed shared concerns about AI’s “technical risks,” “the risk of miscalculation and unintended conflict,” and potential common ground on AI’s international governance. Ahead of the meeting, U.S. officials said they would use it to raise concerns about Chinese military use of AI; Beijing said it aimed to voice its “solemn position on the U.S. restrictions and suppression of China in the field of AI.”

Worry and Frustration: The dialogue reflects continued follow-through by both sides to implement consensus on stabilizing the relationship. In reality, however, little is likely to come from the dialogue. Washington is deeply worried that AI could give Beijing and other rivals (e.g., Russia) a military edge, while China is frustrated with U.S. export controls and restrictions on its access to key AI-related technologies such as semiconductors.

Why It Matters: AI is just one field that demonstrates how difficult it will be for U.S.-China diplomacy to overcome the structural factors driving the two countries toward competition and confrontation.

By Nathan Levine, Research Fellow, Center for China Analysis

Learn More: Read Implications of China’s AI Strategy: State Engineering, Domestic Challenges, and Global Competition by CCA Fellow on Chinese Economy Lizzi C. Lee.

4. Xi Continues Prioritizing Political Education

What Happened: On May 12, Executive Vice Premier Ding Xuexiang conveyed important instructions from Xi Jinping at a promotional meeting for the “Construction of Ideological and Political Courses in Schools in the New Era.”

Guiding Principles: According to the instructions, educators of political courses must always uphold the guiding principles of Marxism, supported by the achievements of socialism with Chinese characteristics and traditional Chinese culture, revolutionary culture, and advanced socialist culture.

Ideology Emphasized: Xi has consistently placed special emphasis on political education. On March 19, 2019, he presided over a symposium for teachers of ideological and political theory courses at schools. The total number of full-time and part-time teachers specializing in ideological and political theory courses in registered higher education institutions across China surpassed 100,000 in 2020, an increase of nearly 60% since 2015, with an average annual growth rate of 14.4%.

Why It Matters: This highlights Xi’s attention to the significance of ideological work in maintaining the legitimacy and stability of the regime and underscores the ongoing focus on ideological education as a crucial aspect of China’s governance and social cohesion strategy.

By Gavin Xu, Intern, Center for China Analysis

Learn More: ChinaFile conducted an interview with Wall Street Journal reporter Chun Han Wong, who discussed the mandatory political study sessions that party members must attend.

5. China’s Climate Envoy Continues His U.S. Visit

What’s Happening: After meeting with his U.S. counterpart John Podesta on May 8–9, China’s new special envoy for climate change, Liu Zhenmin, traveled to New York for meetings with the United Nations, the Asia Society, and the National Committee on U.S.-China Relations before heading to California for further engagements.

The Readout: In the Liu-Podesta readout, both recalled the November 2023 Xi-Biden summit in San Francisco and focused on the areas identified in the Sunnylands Statement. To realize their respective climate goals, both countries intend to intensify technical and policy exchanges. The United States and China expressed a desire to cooperate on multilateral issues to promote a successful COP29 in November 2024.

If You’re Going to San Francisco: Liu has traveled to California for further meetings with U.S. interlocutors. This comes just before the U.S.-China High-Level Event on Subnational Climate Action on May 29–30, in Berkeley, California.

Why It Matters: A cooperative U.S.-China bilateral climate relationship is crucial for achieving the outcomes laid out in the Paris Agreement. The meeting highlights the continued political will from both sides to maintain dialogue and implement the Sunnylands Statement. Important issues like nationally determined contributions and climate finance still require further conversations.

By Taylah Bland, Fellow on Climate and the Environment, Center for China Analysis

Learn More: Explore a new addition to Decoding Chinese Politics that maps out the key people, agencies, and networks instrumental to China’s climate policy decision-making.