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Pony.ai and its first automatic driving system production line, as seen in Shanghai, in 2020.
A Chinese autonomous vehicle firm is going public in the US
On Oct. 17, a Chinese autonomous vehicle company called Pony AI filed to go public in the United States through an initial public offering. The company is the latest Chinese firm to seek entry into the US public markets after Beijing eased its restrictions on its domestic private sector seeking foreign investment and listing on US exchanges. The Chinese electric vehicle startup Zeekr began trading on the New York Stock Exchange in May.
Pony AI, which makes robotaxis, has ties to both China and Silicon Valley, but it’s also backed by the Japanese automaker Toyota and Saudi Arabia’s NEOM Investment Fund. China’s securities regulator approved Pony AI to list on either the Nasdaq or the NYSE in April.
The US and China are currently feuding over artificial intelligence, each vying to become the global leader in the technology and gain a strategic edge — but that battle, which largely focuses on chips and tech infrastructure, is unlikely to affect this deal. The US Securities and Exchange Commission has previously pushed for tougher rules about Chinese companies going public on US stock exchanges, but that’s largely affected those going public through shell companies — a popular workaround to Chinese restrictions — rather than through traditional IPOs.Military vehicles carrying DF-41 intercontinental ballistic missiles travel past Tiananmen Square during the military parade marking the 70th founding anniversary of the People's Republic of China, on its National Day in Beijing, China, on Oct. 1, 2019.
Beijing flexes nuclear muscle, sends signal to US
Why now? Conducting a rare and provocative test might seem out of step with the softer touch Beijing has taken in foreign affairs this year. It comes in the middle of the United Nations General Assembly, just ahead of a planned phone call between Presidents Joe Biden and Xi Jinping, and just after the People’s Bank of China announced a raft of measures to fight persistent economic malaise.
Eurasia Group expert Jeremy Chan says a few causes could be behind the timing of the launch, most of which seem directed at the US. Though Beijing has been attempting to stabilize relations with Washington, increasing closeness between American allies like Japan, the Philippines, and South Korea makes China feel hemmed in. Frustration is also growing in Beijing over tightening US-led export controls on China’s access to advanced technology, as well as expanded sanctions against Chinese firms for their alleged support for Russia’s defense industrial base. Beijing is likely also angered by the US backtracking on earlier commitments made to China to withdraw a Typhon missile system that has been deployed to the Philippines since April. Shooting a city-killer missile just north of the archipelago’s largest island may serve as a useful reminder.
“Beijing might be saying ‘We’re not happy about the US backing away from its commitment to remove the Typhon system, and we’re going to express our displeasure by flying our long-range missile directly over the location of your mid-range missiles,’” Chan explains.
We’re watching whether the US and the Philippines get the message and whether the incident comes up as Biden prepares for the last few set pieces over which he will preside in the US-China relationship.
Russian President Vladimir Putin takes part in a wreath-laying ceremony at the Tomb of the Unknown Soldier by the Kremlin Wall on the Defender of the Fatherland Day in Moscow, Russia, Feb. 23, 2023.
Hard Numbers: Putin eyes more troops, Liberals lose in Montreal riding, Beijing frees American, Deadly clashes in New Guinea, Gazan children vaccinated, Nigerian prison escape
180,000: Uncle Vladimir wants … more troops. The Russian president on Monday ordered that his country’s army be enlarged to 1.5 million active troops, an increase of 180,000 soldiers. If successful, the growth would make Russia’s military the second largest worldwide, with China in the No. 1 spot.
28: Canada’s Liberal Party lost another big byelection on Monday in Montreal’s LaSalle-Émard-Verdun riding. Between this loss to Bloc-Québécois and a June loss to Conservatives in Toronto-St. Paul’s, PM Justin Trudeau’s party has seen a summer bookended by major losses in so-called Liberal strongholds. Preliminary results from Monday’s vote show it was so close that the BQ beat the Liberals by less than a percentage point, 28% to 27.2%. But don’t expect Trudeau to step down: He said before the polls opened that he would stay on as party leader whatever the result.
18: On Sunday, Beijing releasedDavid Lin, an American pastor who had been wrongfully detained in China for 18 years, partially fulfilling the White House’s repeated requests to hand over detainees. Washington is also seeking the release of Kai Li and Mark Swidan, who have been detained in China since 2016 and 2012, respectively. Their detentions are scheduled for a congressional hearing on Wednesday.
50: Up to 50 people have died in ongoing fighting among illegal mine operators in Papua New Guinea’s Porgera Valley, the UN announced Monday. Security forces have reportedly started deploying in the valley, which was also the site of a landslide that killed up to 2,000 people in May, but violence, especially inter-tribal violence, is a growing problem that New Guinea has few resources to address.
90: UN health authorities in Gaza announced on Monday that they have vaccinated 90% of the 640,000 children with their first dose against polio, a major humanitarian accomplishment amid the ongoing fighting. UNRWA says it’s now focused on getting the vaccine to the remaining children and setting up for the second dose in about two months.
274: At least 274 inmates in a Nigerian prison in Borno state have escaped after major floods caused walls in the facility to collapse. Around 4 million Nigerians have been affected by the floods, and at least 1,000 people across West and Central Africa have died.A Philippine flag flutters from BRP Sierra Madre, a dilapidated Philippine Navy ship that has been aground since 1999 and became a Philippine military detachment on the disputed Second Thomas Shoal, part of the Spratly Islands, in the South China Sea March 29, 2014.
China and Philippines sign South China Sea deal
Manila announced Sunday it had reached a “provisional agreement” with Beijing aimed at establishing an arrangement in the South China Sea that both sides can live with — without renouncing territorial claims. The text of the deal has not yet been released.
The agreement builds off last week’s announcement of the establishment of presidential hotlines and signals a desire for de-escalation by both countries – following a serious clash on June 17. But the key word in this agreement is “provisional” as both Beijing and Manila are already showing irreconcilable differences in their positions.
China had previously told Manila it could not bring construction materials to the wreck of the Sierra Madre, a decrepit hulk deliberately beached on the South Thomas Shoal by Manila to give it de facto control. Without repairs, the ship will likely break apart soon. But Beijing claims Manila agreed to give China advanced notice and allowed inspections of shipments sent to the marines it keeps stationed there carrying food and supplies. A senior Filipino official told the Associated Press that the final deal did not require the Philippines to pre-notify the Chinese of shipments.
What to watch? A deal to cool temperatures in the South China Sea would be welcome news for all parties, including the US. “The next big test,” says Eurasia Group senior China analyst Jeremy Chan, “will be how both Manila and Beijing behave on future resupply missions, and whether either side can cede any ground.”
Canada's Minister of Foreign Affairs Melanie Joly speaks during a reception honouring the visit of the Chairperson of the African Union Commission Moussa Faki Mahamat in Gatineau, Quebec, Canada October 26, 2022.
Canadian foreign minister heads to China amid tough tariff talk
Canadian Foreign Affairs Minister Mélanie Joly made a surprise visit to Beijing on Thursday as Canada and the United States are both considering new barriers to trade with China.
Canada-China relations have gone from bad to terrible since 2018, when Canada held Huawei executive Meng Wanzhou for extradition to the United States and the Chinese government responded by detaining Michael Kovrig and Michael Spavor. Wanzhou and the two Michaels were released in 2021, but a Canadian public inquiry into foreign interference continued to put a strain on relations. Then came the suspected Chinese spy balloon surveillance in US and Canadian airspace in 2023.
Still, Chinese Foreign Minister Wang Yi said China was open to improving relations earlier this year.
But this week, Deputy Prime Minister Chrystia Freeland said she would be talking to Canadian business and labor groups about erecting new trade barriers with China. Washington sent a similar message as Joe Biden told allies on Wednesday that he is considering taking fresh action to block Chinese chip manufacturing. Meanwhile, in Milwaukee this week, Donald Trump’s running mate, JD Vance, said China is the “biggest threat” facing the United States.
The Chinese likely want to talk to Joly about avoiding new trade barriers with Canada, since China’s economy is struggling and any new limits on exports could further slow growth. Joly will no doubt listen politely, but Canada is unlikely to jeopardize its crucial trade relationship with the United States by making any side deals with Beijing.
People walk in front of BYD Auto company and Autotorino store in Milan, Italy, March 20, 2024.
It’s about to be “Trade War Summer” in Europe!
The EU is expected to slap tariffs on Chinese-made electric vehicles this week, citing a months-long investigation into Beijing’s subsidies for EV manufacturers.
The move comes amid wider EU-China trade tensions over green technologies like EVs, solar panels, and batteries, where China has become a major low-cost producer whose exports often undercut those of Western competitors.
The EU says China is unfairly subsidizing producers and “dumping” goods in Europe that it can’t sell at home because of weak consumer demand.
China says it’s being unfairly punished for being too good at producing precisely the products the West claims it wants to meet its climate goals.
Experts doubt the tariffs will be big enough to dent sales. Chinese EVs are relatively cheap in the EU, starting at around $32,000.
But China could retaliate against EU industries. Chinese media say local firms want Beijing to consider EU subsidies for European brandy, dairy products, and pork.
If the Europeans try to unplug Chinese EVs, expect Beijing to clap back fast with tariffs of its own on those industries, upping the ante in a trade dispute between the world’s largest exporter (China) and the world’s largest advanced consumer market (the EU).
Two types of cicadas that resurface every 13 and 17 years, respectively, are making their rare appearance this spring.
HARD NUMBERS: Cicadas plan historic reunion, China uncorks stimulus binge, Collusion claim rocks shale, Argentina gets more IMF money, Melinda Gates walks out the door
221: Can you hear it? If you’re in the US Midwest you sure can. After 221 years, two local broods of cicadas – red-eyed, beetle-like insects that grow underground for years before emerging for a single summer of cacophonous buzzing and mating – will emerge at the same time. Brood XIII, based in Illinois, comes up every 17 years, while Brood XIX does so every 13 years. For context, the last time they were out at the same time, Illinois wasn’t even a state yet.
140 billion: As its GDP growth picks up again, the Chinese government is looking for some further stimulus, and what better way to invigorate the economic senses than $140 billion in long-dated sovereign bonds? Beijing will start selling the paper this week, putting the funds towards “modernization.” China is looking to wean itself off of an economic model that relies heavily on property investment.
10: At least 10 new class action lawsuits allege that US shale oil producers colluded to keep crude prices up, driving up gasoline prices too. The shale oil industry, which uses advanced technologies to pull petroleum hard-to-develop shale rock formations, has boomed in the past decade, catapulting the US into the global top spot in oil production.
800 million: The IMF is set to disburse another $800 million in support for Argentina after determining that new President Javier Milei’s radical austerity reforms have helped to stabilize the economy. The eccentric Milei, a self-described “anarcho-capitalist,” has slashed spending since he was elected on promises to fix a moribund economy mired in triple-digit inflation. For a deeper look at how and why Milei is succeeding, see this Quick Take by Ian Bremmer.
12.5 billion: Philanthropist Melinda Gates, formerly married to Microsoft founder Bill, is stepping down from the Bill and Melinda Gates Foundation, one of the largest donor organizations in the world. As part of her agreement, she will keep $12.5 billion to direct towards her own work supporting women, minority groups, and families. To date, the foundation has given out more than $75 billion in grants to development and healthcare projects. Melinda and Bill divorced in 2021.
A broken ethernet cable is seen in front of a US flag and TikTok logo.
The clock is ticking for … TikTok
President Joe Biden on Wednesday signed a law that could see TikTok banned nationwide unless its Chinese parent company, ByteDance, sells the popular app within a year. The law was motivated by national security concerns.
TikTok promptly vowed to challenge the “unconstitutional” law in court, saying it would “silence” millions of Americans – setting the stage for a battle over whether the law violates First Amendment rights.
Expect delays. Eurasia Group’s US Director Clayton Allen is skeptical that such legal challenges will be successful, but they will still likely delay “any action well into 2025, putting the onus – potentially – on a second Trump administration.”
Though Donald Trump moved to ban TiikTok while he was in office, the former president is now attacking Biden over the law and calling for “young people” to remember the move on Election Day.
Notably, Biden’s campaign says it plans to continue using TikTok to reach younger voters.
What will China do? China expects delays in the process but is likely to prohibit a sale if it comes to it, according to Eurasia Group, our parent company. Beijing is unlikely to respond with a tit-for-tat approach targeting American companies and will instead focus on building a fortress economy that’s insulated from US containment efforts.