October 12, 2026
Overview
Economics
Japanese Companies Pull Out of China
By Contributor Lily Rabb
Currently, Japanese companies are pulling out of China at a record pace. This is a result of the year long diplomatic dispute between the two revolving around Taiwan.
Mazda, a Japanese automobile company logo (via. Reuters)
Overview: The number of Japanese companies operating in China fell to its lowest level on record. According to the Japanese database, Teikoku, the number of Japanese companies is down 30% from its peak in 2012 . In the past two years alone, 4,137 companies withdrew from China. Sectors such as automobiles, and export manufacturers are likely to scale back. This large exodus is largely due to underlying Chinese-Japanese diplomatic tensions.
China - Japan Feud: The two top Asian economies have been at a year long diplomatic feud, which has now impacted Japanese businesses' ability to thrive in China. The feud started in November of last year, when Prime Minister Takaichi stated that Japan could get militarily involved in a potential Chinese invasion of Taiwan. She also stated that if US warships intervened to break a Chinese blockade, Japan would be required to defend its ally. China’s consul general in Osaka retaliated on X, saying ‘the dirty neck that sticks itself in must be cut off’ in a post later deleted. This feud has led to more retaliations from both sides. For example, Beijing has responded to Japan by reducing exports of critical minerals to Japanese companies and price competition with government backed Chinese companies. There have also been cases of Japanese citizens being detained by Beijing, which adds concern to companies who send personnel to China - making them feel unwelcome and unsafe.
What happens next: Japanese companies believe that unless Beijing improves the business environment, and contributes to a stabilization of relations, Japanese companies will not expand the same as they did in previous years. Japan can easily reconstruct supply chains by relocating to other Asian countries such as Vietnam, they do not need to rely on China as a cheap production base anymore. However, businesses in China such as the private medical sector, which already have limited competition, are less likely to leave.
What does this mean for China: Regarding China’s economy, which is already facing a decline due to a strong real estate slump, the pulling of businesses will likely be a heavy blow. Companies like Fast Retailing Co. which operates Uniqlo could have an impact on job security and consumer spending, overall contributing to a slowing of the economy and possible repercussions for Chinese consumers.
What does this mean for Japan: Japan is actively working to diversify supply chains to lower reliance on China. They are entering a stage of reconstructing vs. expanding, Japan is also facing a fragile economy, it is hurt by US tariffs and declining investments in property. Thus its push for self reliance or other markets aside from China will have impacts for consumers as well. "We fed the dragon and it breathed fire," stated Satoru Nagao, fellow at the Hudson US Institute think tank.
Society & Culture
Djokovic and Zheng Win in Beijing as the China Open Showcases a Growing Tennis Market
By Contributor Lila Bates
Qinwen Zheng (郑钦文) celebrating after winning Semifinals Match Oct. 10 (via Reuters)
Held at Beijing’s National Tennis Centre, the 2026 China Open drew many of the sport’s biggest names, including Alexander Zverev, Daniil Medvedev, Alex de Minaur, Coco Gauff and Iga Swiatek. The men’s singles ended in an anticlimax when de Minaur withdrew from the final mid-match with a leg injury, handing the title to Novak Djokovic. Djokovic claimed his 102nd career title and his seventh in Beijing, extending his own record at the event. The women’s draw gave the home crowd a story of its own. Paris Olympic champion Qinwen Zheng upset sixth seed Elina Svitolina in the quarterfinals, then beat 13th seed Elise Mertens 7-5, 6-2 in the semifinals to become the first Chinese finalist in Beijing. On October 11, she faced Russia’s Mirra Andreeva for the title, becoming the first Chinese woman to win the China Open.
Beyond the results, the tournament matters for China for several reasons:
A Growing Tennis Culture: Tennis has gained traction in China over the last few decades, and stars like the now-retired Li Na have fueled much of that momentum. As the first Asian woman to win a Grand Slam, Li brought energy and excitement to the sport, drew new fans to events like the China Open, and became a role model for many young Chinese athletes. Estimates suggest that more than 25 million people in China now play tennis, and the number continues to grow. Zheng’s run extends that legacy, giving a new generation of fans a homegrown star to follow.
A Showcase During Golden Week: The tournament overlapped with Golden Week, China’s October National Day holiday, when millions of people travel and spend on leisure. It is one of the busiest and most tourist-heavy weeks of the year. The government created the holiday to boost domestic travel and spending, and thousands flocked to the National Tennis Centre to watch the China Open during it.
A Global Stage: Staging a top-tier ATP 500 and women’s event brings elite players, international media and sponsors to the capital each year. HSBC recently announced it would be a “proud sponsor” of the China Open, backing the tournament’s ambition to become one of the world’s leading tennis events.
Not only did Qinwen Zheng claim the first Chinese victory at the China Open, the tournament delivered what matters most to its hosts. It drew the world’s best players to Beijing, gave a growing base of Chinese fans a close look at elite tennis, and showed global audiences and sponsors a country that is investing in the sport. As participation rises and the tournament’s reach expands, the China Open is likely to become not just a stop on the tennis calendar but a stage for China’s next generation of players.
Taiwan
FBI, PRC, LAX: California Realtor Arrested in LA For Allegedly Spying on Taiwanese President's Son
By Contributor Ari Gershen
Compensated image of Heather Zhang (police photograph) and Taiwanese President Lai Ching-te (via CBS and New York Times)
Arrest: On Sunday, October 4th, the FBI arrested Wanying Heather Zhang (張婉瑩), a 34-year-old realtor working in Irvine, California, at Los Angeles International Airport on suspicion of acting as an unregistered foreign agent for China. The FBI alleges that Zhang and an accomplice spied on Taiwanese President Lai Ching-te’s (賴清德) son, Lai Ting-yu (賴廷與), near his home in Seattle, Washington. In a post on X, Bill Essayli, First Assistant U.S. Attorney for the Central District of California, said, “Zhang traveled to Seattle in 2025 and, at the direction of PRC officials, surveilled a close relative of a Taiwanese government official, sending photos, videos, and license plate information to those officials.”
Flight Risk: According to CBS News, on Wednesday, October 7th, Prosecutors successfully argued to a federal judge that Zhang is too great a flight risk, worrying she may try to flee the country if released from custody. Zhang will remain in federal custody while prosecutors proceed with the case.
Counterintelligence: PRC-related counterintelligence arrests have been ramping up. According to CBS 12, the past two years have seen 60 arrests related to PRC counterintelligence, an 88% increase from previous years. Also coming out of Southern California was the arrest of Arcadia Mayor Eileen Wang (王愛琳) after being federally charged with acting as an illegal agent of the People’s Republic of China, where, according to her plea agreement, “from late 2020 through 2022, Wang and Yaoning “Mike” Sun…worked at the direction and control of PRC government officials and coordinated with U.S.-based individuals to promote the PRC’s interests by, among other things, promoting pro-PRC propaganda in the United States.” The rising trend of PRC-related counterintelligence cases has strained both U.S.-China relations and Cross-strait relations, as in the most recent case involving President Lai’s son.
Tech
US-CHina RISC-V Collaboration Deepens Despite Chip Rivalry
By Contributor Jamie Liu
RISC-V（Via. South China Morning Post )
RISC-V Cooperation: Despite the ongoing rivalry between the US and Chinese semiconductor industries, American chip technology company MIPS continues to work closely with Chinese companies to promote the development of the open-standard chip architecture RISC-V. According to the South China Morning Post, MIPS Chief Technology Officer Yankin Tanurhan stated in Shanghai in September that the company has been working closely with Chinese industry partners to advance the standardization of RISC-V technology. This collaboration takes place through the international organization RISC-V International, bringing together companies and academic institutions from the United States, Europe, and China. Their cooperation covers areas such as artificial intelligence, microcontrollers, and data center servers.
Technology Competition: RISC-V is an open-standard instruction set architecture that allows companies to design and customize chips based on their specific needs. Compared with proprietary architectures that require licensing, RISC-V provides developers with greater flexibility and has become an important option for Chinese companies seeking to reduce their dependence on foreign proprietary technologies. Meanwhile, MIPS was acquired by American semiconductor manufacturer GlobalFoundries in 2025. In August 2026, MIPS also announced that it had become a Premier Member of RISC-V International, allowing the company to play a greater role in developing international technology standards.
US-China Cooperation: Cross-border cooperation on RISC-V demonstrates that the US-China technology relationship involves not only competition but also shared technological and commercial interests. Although the two countries continue to disagree over semiconductors, supply chains, and technology security, open technology standards still provide opportunities for cooperation. This collaboration does not necessarily mean that technological competition is decreasing. Instead, it highlights the continued interdependence of the global technology industry despite strategic rivalry. Whether RISC-V can maintain this level of international cooperation will depend partly on future technology policies and geopolitical developments.
Military
China's New Base in Laos
By Contributor Brendan Waldron
A satellite image shows construction of an airport in Ban Keun, Laos (FP)
The News: China recently announced a new joint-base in Laos at the Ban Keun Airport, with the China-Laos Friendship Aviation Academy beginning operations September 29. The partnership represents the deepening ties between the two nations, which began in the 2000s and further cemented when Laos joined China’s Belt and Road Initiative (BRI) in 2016.
China’s Growing Presence: It’s no secret that in the last decade China has rapidly expanded its influence in Southeast Asia. Both targeting Filipino fishing vessels and creating artificial islands, they have become increasingly militarily active in the South-East Asian region. While reports indicate that the current airfield is relatively short and poses little threat, it could be expanded to wider usage in the near future. Expanding military installations internationally is a major step for China. By doing so, they open themselves up to further expansion and increased diplomatic ties, which is crucial in a polarized South Pacific region where nations are challenged daily with the question of which world view they will align with.
Future Implications: China is in a geographically challenged location when it comes to trade and international relations. 75-80% of Chinese oil imports pass through the Strait of Malacca, while 60% of trade with Europe passes through the Suez Canal - China is roughly 2,000 and 4,000 miles away from each, respectively. As the past ten months have shown with the war in Iran, narrow choke points can be easily shut down, and prove to be critical in the event of a conflict. China certainly understands these geopolitical dynamics, which is why expanding their military presence internationally is so important - military capabilities around the Indian Ocean and Middle East allow them to better control their fate in the event of a conflict.
Comments