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We explore the dynamics of hegemonic diplomacy, examining power rivalries, strategic alliances, policy shifts, and cultural exchanges that shape global influence and international relations.

US&ndash;China De-Dollarisation Tensions: An Analytical Overview Executive Summary
"De-dollarisation" describes efforts, mainly by China, to reduce reliance on the US dollar in reserves, trade settlement, and cross-border payments while building parallel financial infrastructure. For China this is chiefly defensive&mdash;hedging sanctions exposure&mdash;rather than a bid to replace the dollar outright. For the US, dollar dominance underpins cheap borrowing, sanctions leverage, and financial centrality, making erosion a strategic concern. Change is real but gradual: the dollar's reserve share fell from ~71% (2000) to ~56% (2025), while the renminbi (RMB) remains a minor reserve/payments currency, though likely undercounted due to growth in China's own clearing system, CIPS.
What "De-Dollarisation" Means Here: It covers: (1) reserve diversification into gold, euros, and other currencies; (2) trade settlement in RMB via bilateral swap lines and China's Cross-Border Interbank Payment System (CIPS); (3) reduced dependence on SWIFT/dollar-clearing infrastructure that gives Washington sanctions leverage; and (4) RMB internationalisation ambitions, including digital currency and non-dollar commodity pricing. It does not currently mean dollar displacement&mdash;rather slow, partial diversification at the margins.
Why It Is a Point of Bilateral Tension
Sanctions leverage: Dollar centrality lets Washington restrict adversaries' financial access, demonstrated against Russia after 2022. Beijing sees this as a vulnerability given Taiwan tensions and trade friction, spurring investment in sanctions-resilient payment channels.
Treasury holdings: China's US Treasury holdings fell from a 2013 peak above $1.3 trillion to roughly $650&ndash;760 billion in 2025&ndash;26, alongside sustained PBoC gold buying&mdash;diversification that analysts attribute to yield/currency management as much as strategic intent.
Technology-financial linkage: US semiconductor export controls and Chinese countermeasures (rare-earth restrictions) have bled into financial-policy debate, with both sides treating payment-system independence as part of broader strategic competition.
Divergent incentives: Washington benefits from dollar dominance and resists structural change; Beijing wants reduced sanctions exposure and monetary autonomy but is constrained by capital controls and an underdeveloped bond market, limiting RMB internationalisation absent liberalisation it is reluctant to pursue.
Bilateral Implications
Diplomatic: Features in strategic-competition framing, including US scrutiny of BRICS currency initiatives, though no formal BRICS currency exists. Trade/finance: Bilateral trade increasingly offers RMB invoicing and swap-line options, but the dollar still dominates Sino-US and most Chinese trade documentation. Sanctions/technology: CIPS direct participants grew from 139 to ~193 banks since 2024 (CFR analysis), shifting RMB messaging away from SWIFT and prompting US concern about eroding sanctions enforceability. Security spillovers: Financial-infrastructure competition intersects with Taiwan-contingency planning; discussion of a sanctions toolkit in a crisis itself incentivises Chinese hedging. Global Impacts International monetary system: IMF COFER data show the dollar's allocated reserve share at ~56.3% in 2025Q2, down from ~71% in 2000, with much recent decline attributable to exchange-rate valuation effects rather than active selling (IMF; CEPR/NBER, Goldberg and Hannaoui 2026). Trade settlement: RMB was ~3% of SWIFT-tracked global payments in mid-2025 versus ~48% for the dollar and ~24% for the euro; CFR and IMF researchers argue this understates RMB's true role since growing volumes clear directly via CIPS, outside SWIFT visibility. Capital flows/emerging markets: China has RMB swap lines with roughly 40 countries, and CIPS links participants across ~180 countries, giving emerging and Belt-and-Road partners incremental non-dollar options&mdash;evident in Russia-China trade (~90% ruble/RMB settled). Commodities/energy: Dollar invoicing remains dominant globally, though China has expanded yuan-denominated oil contracts and some Gulf/Russia energy deals partly bypass the dollar&mdash;still a small overall share. Financial stability: Fragmentation between CIPS and SWIFT/CHIPS raises longer-run concerns about transparency and illicit-finance monitoring if major economies operate on less-interoperable clearing systems, a concern flagged in BIS and IMF financial-stability work.
 Scenario Analysis (3&ndash;5 Year Horizon)
Scenario 1 &ndash; Gradual, Contained Diversification (most consistent with current trends). The dollar's reserve share continues a slow decline; RMB internationalisation advances modestly via CIPS and swap lines, but the dollar retains overwhelming dominance in reserves and invoicing. Consequence: manageable adjustment, limited disruption to US borrowing costs, a growing "shadow" RMB network mainly serving sanctions-sensitive counterparties (Russia, Iran, parts of the Global South).
Scenario 2 &ndash; Accelerated Fragmentation (higher-tension pathway). A Taiwan crisis, expanded sanctions, or tariff escalation prompts China and aligned partners to sharply accelerate RMB settlement, gold accumulation, and CIPS-first routing, while the US tightens financial and technology controls further. Consequence: faster bifurcation of payment infrastructure, higher hedging costs for emerging markets caught between systems, rising demand for gold and alternative reserves, and gradual&mdash;not sudden&mdash;erosion of dollar centrality over 5&ndash;10 years. This is a projection, not a confirmed trajectory.
Conclusion: Key Takeaways De-dollarisation is real but gradual; the dollar still dominates reserves (~56%), invoicing, and safe assets by a wide margin. China's motives are chiefly defensive (sanctions-proofing), constrained by capital controls and shallow bond markets. SWIFT metrics likely understate RMB's actual role given growing CIPS-direct settlement, complicating measurement. Financial-infrastructure tension is increasingly intertwined with technology controls and Taiwan-related security competition. The likeliest near-term path is incremental diversification, though a geopolitical shock could accelerate fragmentation.
 Sources IMF COFER: <a href="https://data.imf.org/en/datasets/IMF.STA:COFER" target="_blank" rel="noopener">https://data.imf.org/en/datasets/IMF.STA:COFER</a> IMF Blog (Oct. 2025):<a href="https://www.imf.org/en/blogs/articles/2025/10/01/dollars-share-of-reserves-held-steady-in-second-quarter-when-adjusted-for-fx-moves" target="_blank" rel="noopener"> https://www.imf.org/en/blogs/articles/2025/10/01/dollars-share-of-reserves-held-steady-in-second-quarter-when-adjusted-for-fx-moves</a> CEPR/VoxEU, Goldberg &amp; Hannaoui (2026):<a href="https://cepr.org/voxeu/columns/dollars-status-through-lens-foreign-exchange-reserves" target="_blank" rel="noopener"> https://cepr.org/voxeu/columns/dollars-status-through-lens-foreign-exchange-reserves</a> US Treasury TIC, Major Foreign Holders: <a href="https://ticdata.treasury.gov/resource-center/data-chart-center/tic/Documents/slt_table5.html" target="_blank" rel="noopener">https://ticdata.treasury.gov/resource-center/data-chart-center/tic/Documents/slt_table5.html</a> CRS, Foreign Holdings of Federal Debt (2026):<a href="https://www.congress.gov/crs-product/RS22331" target="_blank" rel="noopener"> https://www.congress.gov/crs-product/RS22331</a> CFR, "How Cross-Border Chinese RMB Flows May Weaken U.S. Sanctions": <a href="https://www.cfr.org/articles/how-cross-border-chinese-rmb-flows-may-weaken-u-s-sanctions" target="_blank" rel="noopener">https://www.cfr.org/articles/how-cross-border-chinese-rmb-flows-may-weaken-u-s-sanctions</a> CFR, "Finding China in the U.S. TIC Data":<a href="https://www.cfr.org/articles/finding-china-and-the-u-s-tic-data" target="_blank" rel="noopener"> https://www.cfr.org/articles/finding-china-and-the-u-s-tic-data</a> CSIS, "Sanctions, SWIFT, and China's CIPS":<a href="https://www.csis.org/analysis/sanctions-swift-and-chinas-cross-border-interbank-payments-system" target="_blank" rel="noopener"> https://www.csis.org/analysis/sanctions-swift-and-chinas-cross-border-interbank-payments-system</a> Atlantic Council, Euro/RMB payments share: <a href="https://www.atlanticcouncil.org/blogs/econographics/the-euros-share-of-international-transactions-is-likely-smaller-than-it-looks/" target="_blank" rel="noopener">https://www.atlanticcouncil.org/blogs/econographics/the-euros-share-of-international-transactions-is-likely-smaller-than-it-looks/</a> CIPS overview (PBoC data via Wikipedia):<a href="https://en.wikipedia.org/wiki/Cross-Border_Interbank_Payment_System" target="_blank" rel="noopener"> https://en.wikipedia.org/wiki/Cross-Border_Interbank_Payment_System</a> IMF WP, RMB Usage in Cross-Border Payments: <a href="https://www.imf.org/-/media/Files/Publications/WP/2023/English/wpiea2023077-print-pdf.ashx" target="_blank" rel="noopener">https://www.imf.org/-/media/Files/Publications/WP/2023/English/wpiea2023077-print-pdf.ashx</a>

GeoPulse

China's Rare Earth and Semiconductor Leverage: A Strategic Rundown
Over the past three years, Beijing has increasingly used its dominance over rare earth minerals and key links in the semiconductor supply chain as instruments of trade and technology policy, prompting reciprocal U.S. export controls and a scramble by Washington and its allies to diversify supply. The result is a fast-evolving standoff with real, measurable effects on prices, availability, and industrial planning worldwide.
Background: Where China's Leverage Comes From
China accounts for roughly 90% of global rare earth refining capacity and mines over 60% of raw rare earths, while manufacturing around 90% of high-performance rare-earth magnets used in motors, wind turbines, and weapons systems [Payne Institute]. It also supplies about 98% of primary gallium and 91% of primary germanium, materials used in semiconductors, fiber optics, and military-grade electronics [UNU/MERIT]. On the chip side, China is not a leading producer of the most advanced logic chips, but it holds a strong position in mature-node manufacturing, rare-earth-dependent components (magnets, sputtering targets), and materials such as gallium arsenide substrates that feed into global semiconductor supply chains.
Policy Tools: Licensing, Quotas, and Blacklists
China's primary lever has been export licensing rather than outright bans, though both have been used:
July 2023: China required licenses for exporting gallium- and germanium-related items, the first major use of this specific tool against chip-adjacent materials.
August 2023: Antimony export limits followed; Chinese antimony exports subsequently fell by roughly 97%, and global antimony trioxide prices approximately doubled.
December 2024: China moved from licensing to an outright ban on exporting gallium, germanium, antimony, and superhard materials specifically to the United States, explicitly linked to expanded U.S. controls on chipmaking equipment and high-bandwidth memory.
April 2025: Beijing introduced licensing requirements for seven medium and heavy rare earths &mdash; including terbium, dysprosium, samarium, gadolinium, and yttrium &mdash; used in high-temperature magnets for defense and clean-energy applications.
October 9, 2025: China issued its most sweeping measures to date, modeled on the U.S. "foreign direct product rule." Announcements 61 and 62 require licenses for exporting rare-earth-related technology (mining, processing, magnet manufacturing) and, for the first time, assert extraterritorial jurisdiction &mdash; requiring licenses even for shipments between two non-Chinese countries if they contain Chinese-origin rare earth content above a 0.1% value threshold. Related measures also touched semiconductors, lithium batteries, and graphite anode materials. China has described these steps as protecting materials with "dual military and civilian uses", while U.S. and allied officials have characterized them as retaliation for American semiconductor restrictions and, more broadly, industrial policy meant to preserve Chinese leverage over downstream manufacturing.
On the U.S. side, the primary tools have been the Bureau of Industry and Security's (BIS) Entity List, the Foreign Direct Product Rule (FDPR), and end-use controls. Since October 2022, the U.S. has restricted exports of advanced chips, chipmaking equipment, and related software to China, expanding the FDPR in 2024 to cover semiconductor manufacturing equipment and adding roughly 140 Chinese entities to the Entity List that year alone [Congressional Research Service; Edge AI and Vision Alliance]. A short-lived "AI Diffusion Rule" imposing worldwide licensing tiers was issued in January 2025 and later rescinded by the Trump administration in favor of chip-specific restrictions.
Recent Impacts on the U.S. and Global Markets The practical effects have been uneven but tangible:
Price and supply disruption: Chinese customs data cited in industry reporting show exports of yttrium, dysprosium, and terbium running roughly 50% below pre-restriction baselines as of mid-2026, with no fixed timetable for normalization [Tech Times]. The U.S. Geological Survey estimated in October 2024 that a full gallium-germanium export ban could cost the U.S. economy $3.4 billion in GDP.
Compliance burden: The "one batch, one license" system introduced in April 2025 created significant paperwork backlogs, forcing manufacturers in autos, defense, and life sciences to document end-use and facility details for each shipment.
Diplomatic De-escalation: Following an October 2025 Trump&ndash;Xi summit in Busan and a subsequent meeting in Beijing, China suspended the October 2025 expansion for one year via MOFCOM Announcements No. 70 and No. 72, and began issuing general licenses to approved exporters in December 2025. However, the underlying April 2025 licensing regime for seven heavy rare earths remains in force, and defense/aerospace end-uses remain excluded from relief.
Chip market volatility: U.S. policy toward China has itself fluctuated &mdash; Nvidia's H20 chip was effectively blocked from Chinese sales in April 2025, then approved for licensed export in July 2025 after commercial and diplomatic negotiation, illustrating how export control enforcement has become a variable in bilateral trade talks rather than a fixed policy.
Responses: Diversification, Stockpiling, and Reshoring Washington and allied governments have pursued several parallel strategies:
Direct government investment: In July 2025, the Department of Defense agreed to invest $400 million in MP Materials &mdash; the operator of the only active U.S. rare earth mine, at Mountain Pass, California &mdash; making the Pentagon the company's largest shareholder with roughly a 15% stake, alongside a $150 million loan and a 10-year, 7,000-metric-ton annual magnet purchase commitment.
Allied supply chains: MP Materials and the Pentagon subsequently agreed to a joint venture with Saudi Arabia's Maaden to build rare-earth refining capacity outside China, with MP/DoD holding a 49% stake.
Stockpiling and equity stakes elsewhere: U.S. officials, including Interior Secretary Doug Burgum, have signaled interest in expanding critical mineral stockpiles and taking direct equity positions in other mining companies, modeled on the MP Materials deal.
Export control tightening and easing in tandem: The U.S. has continued adding Chinese entities to the BIS Entity List (65 additions reported in 2025) while periodically relaxing specific chip restrictions as part of broader trade negotiations, reflecting competing priorities between national security agencies and commercial/diplomatic interests.
 Conclusion
China's use of rare earth and semiconductor-adjacent export controls has shifted from case-by-case licensing to a broader, at times extraterritorial, regulatory architecture, while the United States has responded with its own export restrictions, entity blacklisting, and &mdash; more recently &mdash; direct public investment in domestic mining and processing. Both governments have shown willingness to escalate and then partially de-escalate these measures around high-level diplomatic meetings, suggesting the tools are being used as much for negotiating leverage as for fixed strategic denial. Given the multi-year timelines required to build alternative mining, refining, and magnet-manufacturing capacity, analysts generally expect China's structural dominance in rare earth processing to persist into the late 2020s even as diversification efforts proceed.
Sources
Andersen Institute, <a href="&quot;China's%20Export%20Control%20Architecture&quot;%20&mdash;%20anderseninstitute.org" target="_blank" rel="noopener">"China's Export Control Architecture" &mdash; anderseninstitute.org</a> AP via 2news.com,<a href="&quot;China%20bans%20exports%20to%20US%20of%20gallium,%20germanium,%20antimony&quot;%20&mdash;%202news.com" target="_blank" rel="noopener"> "China bans exports to US of gallium, germanium, antimony" &mdash; 2news.com</a> East Asia Forum, <a href="&quot;China%20leverages%20paperwork%20to%20ration%20rare%20earths&quot;%20&mdash;%20eastasiaforum.org" target="_blank" rel="noopener">"China leverages paperwork to ration rare earths" &mdash; eastasiaforum.org</a> Tech Times, <a href="&quot;China%20Rare%20Earth%20Export%20Controls:%20April%20Curbs%20Still%20Bite&quot;%20&mdash;%20techtimes.com" target="_blank" rel="noopener">"China Rare Earth Export Controls: April Curbs Still Bite" &mdash; techtimes.com</a> White &amp; Case, <a href="&quot;China%20imposes%20extraterritorial%20jurisdiction...%20export%20controls%20on%20rare%20earth&quot;%20&mdash;%20whitecase.com" target="_blank" rel="noopener">"China imposes extraterritorial jurisdiction... export controls on rare earth" &mdash; whitecase.com</a>

The Trump Administration's Navy Overhaul: Foreign-Built Ships and a Return to Steam Catapults
What Changed On August 13, 2026, President Trump signed a National Security Presidential Memorandum, titled "Rebuilding the United States Navy and America's Shipbuilding Industrial Base," ordering a sweeping overhaul of Navy shipbuilding that includes opening the door to foreign-built warships, establishing a fifth public naval shipyard and replacing key technologies planned for the Navy's newest aircraft carrier. The order calls on the Pentagon to use foreign shipyards for three specific vessel classes: frigates for anti-submarine, surface warfare and convoy escort duties, plus two auxiliary classes &mdash; roll-on/roll-off cargo vessels and tankers. The memo directs the Secretary of War, within 60 days, to deliver a plan to replace the Electromagnetic Aircraft Launch System (EMALS) and Advanced Weapons Elevators with steam and hydraulic systems for construction of CVN-81, the future USS Doris Miller.
The Stated Rationale The White House argues the Navy "has experienced a series of shipbuilding setbacks stemming from overly complex designs and iterative design change procedures, which have resulted in cost growth, delays, and cancellations," and that a lack of shipyard capacity and competition has produced large backlogs across six major programs. On catapults, the rationale is partly personal: Trump called EMALS "very complicated" during a 2017 visit to USS Gerald R. Ford, saying "you have to be Albert Einstein to figure it out." But it also rests on a real record of documented problems: a 2018 Bloomberg report citing Pentagon testers found EMALS suffered a critical failure roughly every 455 launches during early at-sea trials, nine times the Navy's target rate, and the Pentagon's Office of the Director of Test and Evaluation stated in its FY2025 report that EMALS and the arresting gear "continue to adversely affect sortie generation and flight operations," with heavy reliance on off-ship contractor support remaining a challenge.
A Contested Technical Case The picture is more mixed than the memo suggests. EMALS gives Ford a 30 percent higher sortie generation rate than the preceding Nimitz class and allows for fewer crew, thanks to less plumbing and fewer pressure vessels. During a 326-day deployment ending in May 2026 &mdash; the longest by a US carrier since Vietnam &mdash; Ford's air wing recorded more than 12,200 EMALS launches, and the ship had completed 36,863 total EMALS launches by March 2026. Retired Rear Adm. Mark Montgomery called reverting to steam "illogical, inefficient and a waste of money," noting EMALS reduces wear on aircraft, weighs less, and uses significantly less energy, water and manpower than steam. Because the Ford class was engineered from the outset around extensive electrification, replacing EMALS on a ship already under construction is considerably more complex than swapping one catapult type for another, and the redesign is expected to cost taxpayers hundreds of millions of dollars.
Industrial Base, Alliances and Legal Uncertainty Domestic industry has pushed back on the foreign-build provision: the Shipbuilders Council of America warned that "every hull built abroad is demand, jobs, and industrial capability diverted from American shipyards this administration pledged to rebuild." Congress is split &mdash; the Senate Armed Services Committee's draft FY2027 defense bill would strip the presidential waiver authority the memo relies on, while allowing Pentagon purchases of foreign-built auxiliary ships, and a separate House provision would bar foreign construction of warships and logistics vessels outright, so the policy's staying power is genuinely unsettled. Any waiver still requires congressional notification, with a 30-day wait before a contract can be signed. On the alliance side, the approach borrows the "Finland Model" used for medium icebreakers, and Australia's Austal has already drawn a takeover bid from South Korea's Hanwha Group as it expands in the US defense market &mdash; pointing toward deeper industrial ties with allies, though officials acknowledge integrating a foreign hull with US combat systems "from the keel up" is technically difficult.
Global Naval Balance The reversal cuts against the direction of America's chief competitor: China already builds roughly half of the world's commercial ships, and its newest carrier, Fujian, also uses electromagnetic launch technology &mdash; meaning Washington is stepping back from a technology Beijing and Paris (France's navy also selected EMALS) are advancing. Whether this becomes durable policy depends on Hegseth's 60-day catapult redesign plan, a 120-day siting study for the fifth shipyard, and how the FY2027 NDAA resolves the waiver fight in Congress.
&nbsp; Sources USNI News &ndash; "New White House Memo Calls for Foreign-Built Warships, Return to Steam Catapults on Ford Carriers" &ndash; <a href="https://news.usni.org/2026/08/13/new-white-house-memo-calls-for-foreign-built-warships-return-to-steam-catapults-on-ford-carriers" target="_blank" rel="noopener">https://news.usni.org/2026/08/13/new-white-house-memo-calls-for-foreign-built-warships-return-to-steam-catapults-on-ford-carriers</a> Reuters (via U.S. News) &ndash; "Trump Allows Navy to Build Ships Abroad, Orders Return to Steam Catapults on Carriers" &ndash; <a href="https://www.usnews.com/news/top-news/articles/2026-08-13/trump-orders-navy-to-tear-out-jet-launch-system-return-to-steam-catapults" target="_blank" rel="noopener">https://www.usnews.com/news/top-news/articles/2026-08-13/trump-orders-navy-to-tear-out-jet-launch-system-return-to-steam-catapults</a> gCaptain &ndash; "Trump Opens Door to Foreign-Built Warships in Major Navy Shipbuilding Overhaul" &ndash; <a href="https://gcaptain.com/trump-opens-door-to-foreign-built-warships-in-major-navy-shipbuilding-overhaul/" target="_blank" rel="noopener">https://gcaptain.com/trump-opens-door-to-foreign-built-warships-in-major-navy-shipbuilding-overhaul/</a> The War Zone (TWZ) &ndash; "Bringing Back Steam Catapults On Carriers Is A Huge Risk" &ndash; <a href="https://www.twz.com/sea/bringing-back-steam-catapults-on-carriers-is-a-huge-risk" target="_blank" rel="noopener">https://www.twz.com/sea/bringing-back-steam-catapults-on-carriers-is-a-huge-risk</a> Related YouTube Videos "Trump Orders Navy to Go Back to Steam Catapults" &ndash;<a href="https://www.youtube.com/watch?v=Zzf5GRX-t5g" target="_blank" rel="noopener"> https://www.youtube.com/watch?v=Zzf5GRX-t5g</a> Perun &ndash; "The New U.S. Navy Shipbuilding Plan &ndash; Nuclear Battleships, FF(X) &amp; America's Naval Buildup" &ndash; <a href="https://www.youtube.com/watch?v=GXlQb8xBcvM" target="_blank" rel="noopener">https://www.youtube.com/watch?v=GXlQb8xBcvM</a> "The Shipbuilding Crisis Threatening U.S. Naval Power" (GAO congressional testimony) &ndash; <a href="https://www.youtube.com/watch?v=0WQioW5nWro" target="_blank" rel="noopener">https://www.youtube.com/watch?v=0WQioW5nWro</a>

Xi Jinping Warns of "High Winds and Rough Waters" as China's Growth Falters in Second Half
A Warning Tied to Mounting Economic Strain Speaking on August 17 at an event marking the 100th anniversary of former President Jiang Zemin's birth, Chinese leader Xi Jinping warned that the country faces "high winds and rough waters and even dangerous storms" ahead. The remarks, Xi's first public appearance in roughly two weeks following the leadership's traditional summer retreat, came as Beijing prepares for an expected September meeting between Xi and US President Donald Trump, with trade, technology and Taiwan among the strains on the relationship. The speech also unfolded against a backdrop of Middle East conflict disrupting global trade and unresolved maritime tensions with the Philippines and Japan. Notably, the address came the same day official data confirmed a sluggish start to the second half of 2026, with industrial output, consumption and investment all falling short of forecasts.
A Weak Start to the Second Half China's economy grew 4.3% in the second quarter, below the government's 4.5&ndash;5% annual target range and its weakest pace in more than three years. Data released August 17 showed July industrial output rising 4.5% year-on-year, down from 5.3% in June and short of the 4.8% forecast. The official manufacturing purchasing managers' index unexpectedly slipped into contraction. The National Bureau of Statistics said the economy had remained "stable" overall but acknowledged the external environment was "complicated and volatile," with domestic demand still weak and some companies facing "operational difficulties." Statistics bureau spokesperson Fu Linghui pointed to geopolitical pressure abroad and unusually severe summer weather, including three typhoons that disrupted eastern and southern manufacturing hubs, as factors weighing on the month's results.
Consumption and Investment Falter, Unemployment Ticks Up Retail sales, a key gauge of consumption, rose just 0.6% year-on-year in July, down from 1% in June and well short of the 1.5% forecast, despite summer tourism spending. Car sales fell for a tenth straight month, dropping 17%, though excluding autos retail sales rose 2.5%. Citi analysts noted that daily spending under government trade-in subsidies for autos and appliances dropped to roughly 6.3 billion yuan from 9 billion yuan in June. Fixed-asset investment contracted 6.7% in the first seven months of the year, a steeper decline than the 5.7% drop recorded through June and worse than the 6% contraction analysts had expected. The urban unemployment rate rose to 5.2% in July from 5% in June, adding to pressure on policymakers to strengthen support in the second half.
Property Slump Shows No Sign of Ending China's prolonged real estate downturn deepened further. New home prices across 70 major cities fell 3.2% year-on-year in July, marking the 37th consecutive month of decline, though the pace eased slightly from June's 3.3% drop. Real estate development investment plunged 19.2% in the first seven months of the year, while new housing starts fell 24% and completions dropped 23.2%. Sales by floor area declined 11.8%, and by value fell 13.1%. Of the 70 cities tracked, only 17 recorded month-on-month price gains in July, with Shanghai remaining a notable outlier posting continued growth. A Politburo meeting on July 30 pledged faster fiscal spending and new support measures but stopped short of a major stimulus package, and did not signal stronger intervention for housing specifically.
Exports Offer a Cushion, But Carry Risks Exports remained the economy's clearest bright spot, rising 23.9% year-on-year in July, though slowing from June's 27% surge. Growth was driven by strong global demand for AI-related technology, with semiconductor export values nearly doubling and overall high-tech exports up 40.7%. China posted another monthly trade surplus above $100 billion, putting the full-year total on track to exceed $1 trillion for a second consecutive year. However, economists caution this reliance leaves the economy exposed: a new 12.5% US tariff took effect in late July, and traditional manufacturing sectors such as ceramics saw exports slump 28.3%, underscoring what analysts describe as an increasingly "two-speed" economy split between booming tech exporters and a broader domestic sector still searching for firmer footing.
&nbsp; Sources Bloomberg &mdash; Xi Ties Predecessor's Legacy to His Own Agenda as Risks Grow <a href="https://www.bloomberg.com/news/articles/2026-08-17/xi-touts-party-led-growth-at-predecessor-s-birth-centenary" target="_blank" rel="noopener">https://www.bloomberg.com/news/articles/2026-08-17/xi-touts-party-led-growth-at-predecessor-s-birth-centenary</a> CNBC &mdash; China's economy slows further in July as retail sales barely grow, investment slump steepens <a href="https://www.cnbc.com/2026/08/17/china-economy-sales-investment-july-.html" target="_blank" rel="noopener">https://www.cnbc.com/2026/08/17/china-economy-sales-investment-july-.html</a> CNBC &mdash; China's exports growth beats estimates in July, as AI-driven shipments surge <a href="https://www.cnbc.com/2026/08/07/china-july-trade-exports-imports-surplus-imbalance-tariffs-.html" target="_blank" rel="noopener">https://www.cnbc.com/2026/08/07/china-july-trade-exports-imports-surplus-imbalance-tariffs-.html</a> Bloomberg &mdash; China New Home Prices Fall at Faster Pace, Damping Rebound Hopes <a href="https://www.bloomberg.com/news/articles/2026-08-17/china-new-home-prices-fall-at-faster-pace-damping-rebound-hopes" target="_blank" rel="noopener">https://www.bloomberg.com/news/articles/2026-08-17/china-new-home-prices-fall-at-faster-pace-damping-rebound-hopes</a> Related YouTube Videos Bloomberg Television &mdash; China's GDP Growth Weakens to Below Target Range | The China Show | 7/15/2026 &mdash; <a href="https://www.youtube.com/watch?v=-5Z19XVaWbg" target="_blank" rel="noopener">https://www.youtube.com/watch?v=-5Z19XVaWbg</a> Firstpost &mdash; Why China's Slowdown May Continue in 2026 | Vantage with Palki Sharma | N18G &mdash; <a href="https://www.youtube.com/watch?v=D5CEh01n3tw" target="_blank" rel="noopener">https://www.youtube.com/watch?v=D5CEh01n3tw</a> Firstpost &mdash; China's Economy Is Stalling Faster Than Expected | Vantage with Palki Sharma | N18G &mdash; <a href="https://www.youtube.com/watch?v=wg5CyHUExNs" target="_blank" rel="noopener">https://www.youtube.com/watch?v=wg5CyHUExNs</a> Digging into China &mdash; The Twin Crises Facing Xi Jinping: Economic Stagnation and Diplomatic Isolation &mdash; <a href="https://www.youtube.com/watch?v=xBN2lOkFacY" target="_blank" rel="noopener">https://www.youtube.com/watch?v=xBN2lOkFacY</a>

The BRICS Gulf moment: How BRICS could transform Iran&ndash;UAE relations
What the "BRICS Gulf moment" actually means BRICS pulled off something unusual in January 2024: it put Iran and the UAE at the same table. Both joined as full members alongside Egypt, Ethiopia and a de facto participating Saudi Arabia, turning a bloc once built around Brazil, Russia, India, China and South Africa into something closer to a Global South coalition spanning roughly a third of world GDP. That's the "BRICS Gulf moment" people keep referring to this year. Two Gulf-facing rivals, bound by the same summits and working groups, whether they like each other or not. The 18th BRICS Summit in New Delhi this September has turned that awkward proximity into a live test case, since the bloc now needs Iran and the UAE to agree on enough language to issue a joint declaration at all.
From missile strikes to a business-forum handshake The backdrop is genuinely ugly. War broke out this year involving Iran, the US and Israel, and the UAE ended up on the receiving end of more Iranian projectiles than any other Gulf state. Abu Dhabi shut its Tehran embassy in March after Iranian strikes on Emirati territory, and it suspended trade and financial transactions with Iran outright in August. Yet just weeks later, at the BRICS Business Forum in New Delhi, Iranian and Emirati business representatives sat on the same panel pushing for a joint matchmaking platform for women-led firms, with the UAE pitching itself as a gateway for cross-border deals. Governments are at odds; parts of the private sector clearly aren't ready to give up on each other.
Money without a middleman Iranian President Masoud Pezeshkian used his Business Forum speech to push BRICS toward settling trade in national currencies rather than dollars, and floated a $10 billion BRICS reinsurance vehicle plus a bigger financing role for the New Development Bank. Iran's central bank has said it intends to join the NDB, though the bank itself hasn't confirmed a formal application. The UAE already sits inside that plumbing: it's been an NDB member since 2021 and one of the more active participants in mBridge, the central-bank digital-currency platform that lets China, Saudi Arabia, Hong Kong and Thailand settle payments without routing through Western correspondent banks. If Iran ever gets meaningful access to those same rails, Emirati and Iranian firms would have a technical path to trade that doesn't touch the dollar system at all. That's a mechanism, not a peace deal, but mechanisms tend to outlast politicians.
Diplomacy in the room, whether they like it or not The diplomatic track has been rockier. Iran's foreign minister used a May meeting in New Delhi to accuse the UAE of acting as a direct partner in attacks on Iran, and a similar clash flared at a National Security Advisers session weeks later. Even so, some regional analysts argue the summit itself functions as a rare informal channel, a room where Iranian and Emirati officials cross paths without a Western mediator hovering nearby. There's a precedent worth watching: the Shanghai Cooperation Organisation, which counts many of the same members, managed to agree on compromise wording about the Iran conflict earlier this month despite sharp internal splits. BRICS negotiators in New Delhi are reportedly eyeing that as a template for their own statement.
Why "transformation" remains a stretch None of this erases the constraints. US secondary sanctions still choke Iran's banking sector no matter what BRICS builds on paper. The security mistrust behind the embassy closure and the missile exchanges doesn't dissolve because both sides hold the same membership card. And BRICS runs on consensus, so one unresolved Iran&ndash;UAE dispute can stall the entire bloc's joint declaration, which nearly happened in May. What BRICS realistically offers is a shared table, some emerging financial plumbing and an informal side channel, not a reconciliation. Whether that's enough to nudge Tehran and Abu Dhabi back toward the cautious de-escalation they had before this year's war is the open question New Delhi didn't answer.
Sources
Iran and UAE clash at BRICS foreign ministers meeting &ndash; Iran International:
<a href="https://www.iranintl.com/en/202605147412" target="_blank" rel="noopener">https://www.iranintl.com/en/202605147412</a> BRICS summit begins in India; Iran-UAE dynamic key to joint statement &ndash; Nikkei Asia:
<a href="https://asia.nikkei.com/politics/international-relations/brics-summit-begins-in-india-iran-uae-dynamic-key-to-joint-statement" target="_blank" rel="noopener">https://asia.nikkei.com/politics/international-relations/brics-summit-begins-in-india-iran-uae-dynamic-key-to-joint-statement</a>
Related YouTube videos
"BRICS Falling Apart"? The Truth Behind the Iran-UAE Meeting:
<a href="https://www.youtube.com/watch?v=0ynOyEZCc3o" target="_blank" rel="noopener">https://www.youtube.com/watch?v=0ynOyEZCc3o</a> BRICS Summit 2026: Who's coming, what's on the agenda and why it matters:
<a href="https://www.youtube.com/watch?v=D3fr6YU3SKA" target="_blank" rel="noopener">https://www.youtube.com/watch?v=D3fr6YU3SKA</a> "Even Israel Couldn't Save You": Clashes At BRICS Summit; Iran Minister Blasts UAE Diplomat:
<a href="https://www.youtube.com/watch?v=7UWupIyWeA8" target="_blank" rel="noopener">https://www.youtube.com/watch?v=7UWupIyWeA8</a>

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