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Hi, China Watchers — Amy Mackinnon here, POLITICO's intelligence reporter in Washington, with an assist from Nahal Toosi, our senior foreign affairs correspondent. Phelim is taking a well-earned break this week, so I'm taking the helm and am excited to take you through some of the discussions happening inside the U.S. government over threats posed by China.
China is still seen as a primary threat, but the focus is shifting.
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The U.S. intelligence community said this week that China remains the most formidable challenge to American security, and emphasized one aspect of that threat — Beijing's role in the illicit global trade in fentanyl.
The annual Worldwide Threat Assessment, released Tuesday, singled out Beijing as "the actor most capable of threatening U.S. interests globally" and "the most comprehensive and robust military threat to U.S. national security." Those are assertions largely in keeping with previous such reports.
What did buck recent precedent was the order in which the assessment was presented – with a section on cartels and international criminal gangs topping the document, reflecting a broader shift underway in the Trump administration to use its formidable intelligence capabilities to bring the hammer down on the drug trade. (Synthetic opioids have been responsible for tens of thousands of deaths in the U.S.)
There is, of course, a China throughline to the war on drugs as the country continues to be the primary source for the precursor chemicals used by cartels to manufacture fentanyl. Trump has broken from his predecessor's attempts to cooperate with Beijing on the matter, and has instead levied tariffs on China in a bid to curb the flow of the deadly drug and its precursor agents.
But the intelligence assessment, which was coupled with hearings on Capitol Hill this week with the nation's spy chiefs, made it clear that this is likely to remain an uphill battle.
"China will likely struggle to sufficiently constrain the activities of PRC companies and criminal elements that enable the supply and trafficking of fentanyl precursors and synthetic opioids to the United States, absent greater law enforcement actions," the assessment stated.
Hearings about the report before the Senate and House intelligence committees were largely overtaken by debate over a leaked Signal chat involving Trump administration officials. But lawmakers still managed to squeeze in some questions on whether the administration is going to be able to tackle China's fentanyl production.
Sen. Tom Cotton (R-Ark.), chair of the Senate intelligence panel, asked CIA Director John Ratcliffe whether there was more China could do to crack down on the illicit export of fentanyl, given the country's vast and technologically sophisticated surveillance powers.
"There's nothing to prevent China, the People's Republic of China, from cracking down on fentanyl precursors," Ratcliffe said. "One of the reasons that they don’t is that there are more than 600 PRC-related companies that produce those precursor chemicals and an industry that generates $1.5 trillion."
Ratcliffe described China's efforts to curb the trade as "really limited in nature" and "intermittent."
The CIA spent much of the first two decades of this century focused on the global war on terror. In recent years, the agency has poured more time and resources into confronting the multifaceted challenge posed by China.
How then, will it handle taking on the cartels amid a broader pivot towards Latin America under the Trump administration? I put this question to Sen. Mark Warner (D-Va.) the top Democrat on the Senate intelligence committee.
"I think you can do both, I'm not saying you can't do both," he told me.
The pivot to China, which is in an intense race for technological primacy against Washington, already presents a new dynamic for the intelligence community.
"They're not used to following on the technology side but that's where the competition with China really is," said Warner, who noted that the intelligence community was traditionally geared to spy on foreign governments and militaries.
"The community has gotten a little better, but it's still got a long way to go to make sure that we're getting the information we need. And how do you do that with this much chaos happening at the same time. It's a challenge," he said.
The one boon for U.S. officials trying to check China's global influence, is that Beijing is "more cautious" than other disruptive players such as Russia and Iran, wary of tainting its economic and diplomatic reputation.
In a post on X on Wednesday, China's foreign ministry dismissed the new threat assessment as "an irresponsible, biased and scare-mongering piece that seeks to promote the false 'China threat' narrative and fan up major-country rivalry."
TRANSLATING WASHINGTON
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— COULD CHINA SEE THE SIGNAL CHAT? U.S. lawmakers from both parties are warning that China and Russia — as well as other U.S. adversaries — are almost certain to be monitoring phones senior Trump administration officials used for the now-infamous Signal group chat about military strikes on Yemen. The lawmakers warned that Beijing, Moscow or others could have passed on the information to the targets of the strikes, the Houthis.
"Moscow and Beijing and Tehran, and Pyongyang cannot believe their luck," said Rep. Jim Himes of Connecticut, the ranking Democrat on the House Intelligence Committee, said during Wednesday's hearing on the threat assessment.
"Now we come to learn the people in the most dangerous and sensitive jobs on the planet put extremely specific pre-decisional discussions about a military attack on Signal which could be intercepted by the Russians and the Chinese," he said. "I think that it is by the awesome grace of God, that we are not mourning dead pilots right now.”
Even some Republicans, who rarely chide the Trump team, have been speaking out about the national security risks.
"There's no doubt that Russia and China saw this stuff within hours of the actual attacks on Yemen or the Houthis," Rep. Don Bacon (R-Neb.) told CNN on Monday. Bacon is a former Air Force brigadier general and a member of the House Armed Services Committee.
— CHINESE NETWORK MAY HAVE COURTED US FEDS: A group of companies linked to a Chinese firm placed ads apparently aimed at recruiting laid off U.S. federal workers. The effort was uncovered by Max Lesser, an analyst with the D.C.-based Foundation for Defense of Democracies, who shared his findings with Reuters. According to the news agency's Tuesday report, the four companies’ websites are hosted at the same IP address alongside Smiao Intelligence, an internet services company. But it was not clear if the Chinese government was involved or if any U.S. federal workers were recruited.
TRANSLATING EUROPE
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— CHINA AND EUROPE EYE EACH OTHER: With the U.S. and Europe at odds over trade, Beijing and European capitals are warily wondering if it's time to beef up their commercial ties. The EU's trade commissioner, Maroš Šefčovič, who was in Washington this week, is scheduled to visit China today and tomorrow for meetings with top officials. One of his goals, Euronews reports, is to attract more Chinese investment. On Tuesday, Portugal's foreign minister met with his Chinese counterpart in Beijing. Expect more such courtship if tensions between Brussels and Washington don't subside soon.
— CHINA EDGING OUT EUROPE IN PHARMA: Beijing is out-innovating Europe in the high-stakes world of pharmaceuticals, a top CEO says. Beijing is especially strong in the areas of antibody drug conjugates and cell therapy, said AstraZeneca's Pascal Soriot on the sidelines of the Boao Forum for Asia in Hainan province, Bloomberg reported Wednesday.
"The two large innovators in our industry today are the U.S. and China," Soriot said. "China is, I think over the next five to 10 years, going to emerge as really a driving force for innovation in our sector."
— GERMANS GET A CHINESE INTEL BRIEFING: The top intelligence agency in China said it had briefed German diplomats and businesspeople on a revised law that broadens the definition of spying. It's a rare, possibly unprecedented, such briefing for foreigners. The agency, the Ministry of State Security, said on social media Wednesday that the presentation was designed partly to clarify the revised counter-espionage law, which took effect last July.
HOT FROM THE CHINA WATCHERSPHERE
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— TAIWAN EXPELS 3 MAINLAND CHINESE: Taiwan has ordered three mainland Chinese women to leave the island after they allegedly called for forced cross-strait unification. One woman, who runs a popular social media account on Douyin, China's version of TikTok, has left; the other two have until the end of March. All three are married to Taiwanese men. The expulsions underscore the hardline stance Taiwan's current government has taken toward Beijing, but they drew criticism from opposition lawmakers, who cast the moves as violations of free speech.
— CANADIANS WARN OF CHINESE ELECTION MEDDLING: The Canadian spy service warned on Monday that China and India are likely to try to interfere in Canada's April 28 general elections. Both Beijing and New Delhi have seen their relations with Ottawa deteriorate in recent years, though they've denied allegations of past such interference.
“The PRC (People’s Republic of China) is highly likely to use AI-enabled tools to attempt to interfere with Canada’s democratic process in this current election,” Vanessa Lloyd, deputy director of operations at the Canadian Security Intelligence Service, said in a statement.
— A LENGTHY CHINESE INCURSION: Chinese patrol vessels spent a record 92 hours and 8 minutes in the waters of disputed East China Sea islands starting last Friday, the Japan Coast Guard said Monday. The incursion by the China Coast Guard happened as China's foreign minister was in Japan for a meeting — the first visit by a Chinese foreign minister since 2020.
HEADLINES
The Economist: Europe will have to zip its lips over China's abuses
The Financial Times: China is suffering its own 'China shock'
Foreign Affairs: China has already remade the international system
The Diplomat: Amid Trump tariffs, where do China-Mexico ties stand?
HEADS UP
HEGSETH HEADS TO PHILIPPINES, JAPAN: In a dramatic split screen, Defense Secretary Pete Hegseth is heading to the Philippines and Japan this week, as his messages in that Signal chat have been published in The Atlantic and held up as evidence in Wednesday's congressional hearing.
As calls grow among Democrats for Hegseth to step down, he will be discussing ways to deter China's moves in the South China Sea with his Filipino counterparts.
In Japan, according to the Pentagon, Hegseth will participate in a ceremony commemorating the 80th anniversary of the Battle of Iwo Jima. He'll also meet with Japanese leaders and U.S. military forces.
A big part of both stops will likely be to discuss sales of military equipment, as Japan continues to buy F-35s and high-end missiles and rockets, and Manila is desperate to modernize its arsenal to deter China. Manila is also worried about Chinese warships and its "maritime militia" — a fleet of thousands of fishing boats that Beijing uses to harass countries in the region and widen Chinese territorial claims in the South China Sea.
Thanks to: Heidi Vogt and digital producers Emma Cordover and Malak Saleh.
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