Welcome to Foreign Policy’s China Brief.

The highlights this week: China takes a relatively muted approach as the United States begins a blockade of Iranian ports, the People’s Liberation Army Daily sends an official signal on army politics, and China’s domestic car sales fall for six straight months.

Is Beijing Going Soft?

After the U.S. military began a blockade of Iranian ports this week, Chinese President Xi Jinping responded by speaking out against a “return to the law of the jungle,” while Foreign Minister Wang Yi called for persistence in the so-far-unproductive U.S.-Iran talks mediated by Pakistan.

China has actively sought to get the United States to back down and for Iran to reopen the Strait of Hormuz—not least because China sources most of its imported oil from the Persian Gulf.

Yet the Chinese reaction to the ongoing crisis has been muted compared with its response to past U.S. misdeeds. China has so far avoided vitriolic denunciations or visibly trying to exploit U.S. weakness—even the thinning out of its military forces in the Asia-Pacific.

Instead, Beijing has presented itself as a stable power ready to stick to norms, in implicit contrast to U.S. President Donald Trump’s White House. This strategy has paid off in global approval ratings, with China creeping ahead of the United States in recent Gallup polling—though both countries remain broadly unpopular.

Xi’s meeting last week with Cheng Li-wun, the leader of Taiwan’s opposition Kuomintang (KMT)—in which he offered incentives to a future KMT government for bilateral cooperation—was part of this softer approach. As well as deepening ties with the KMT, Xi signaled a lack of desire to turn the Taiwan issue into a crisis anytime soon.

In the past, China behaved very differently when the United States blundered. After the 2008 global financial crisis, for instance, there was a strong conviction among the Chinese political leadership that the United States was being toppled from its role as hegemon—and that others would have to bow to China’s new power.

That produced diplomatic gaffes, such as Foreign Minister Yang Jiechi’s infamous declaration in 2010 at an Association of Southeast Asian Nations meeting that “China is a big country and other countries are small countries and that is just a fact.”

The combination of this arrogance, Xi’s ascendancy, and the temptations of social media led to the so-called wolf warrior diplomacy that dominated Beijing’s approach from roughly 2019 to 2022. China attempted to bully states as far apart as Lithuania and South Korea, which damaged the country’s image.

So, why the relative quiet now? For one, the ambitious mid-career officials who saw nationalism as a way to catch Xi’s attention have been reined in or purged. It’s also a sensible approach in the age of Trump: Don’t interrupt your enemy while he’s making a mistake.

Finally, with the delayed Xi-Trump summit now scheduled for next month, there may be a desire to keep relations with Washington smooth in the hope of striking a trade deal—especially since  Trump desperately needs a win.

I think a large part of the shift is that China’s domestic situation feels less secure than in the 2010s, when economic growth was high and the real estate bubble was expanding. The COVID-19 pandemic and the disastrous policy that accompanied it tempered the national mood, while Xi’s purges have demoralized officials.

Xi himself is dealing with a hollowed-out military and thinning talent pool. And though the Gulf crisis isn’t hitting China as hard as the rest of Asia, thanks to a combination of alternative energy and large oil stockpiles, it’s still painful in other ways.

The irony is that China’s strategic position—its control of key industries and supply chains, its technological dominance in cutting-edge fields, and its attraction to countries looking to balance against the United States—is stronger than in the 2010s.

The seeming return to the 1990s strategy of “hide your strength, bide your time,” a phrase first used by then-leader Jiang Zemin, is likely to be effective. China is still ready to draw on its nationalist playbook, as in its monthslong standoff with Japan. But a slow, diplomatic approach from a superpower is something that the rest of the world wants to see.

What We’re Following

Army politics. The People’s Liberation Army Daily published a long article on political rectification within the military last week, sourced to the official news agency Xinhua and clearly designed to be a supposedly authoritative piece—one that gives the official Chinese Communist Party (CCP) position.

The piece comes after Xi has removed around 80 percent of the PLA’s senior leadership. Notably, much of it focuses on the need for “the military’s flag to face toward the party” and the essential nature of CCP dominance over the military and Xi’s critical role in leadership.

Corruption only comes up toward the end, when specific recently purged generals are named; it falls back on the usual language used to justify the endless hunt for new targets (“Three feet of ice is not broken in a day.”) Remember: The generals being purged now were themselves appointed by Xi to replace those previously purged in 2013 and 2014.

To me, the vehement emphasis on loyalty to the CCP suggests that there was some attempt by purged top general Zhang Youxia to form a faction against Xi, probably after Zhang realized his own fall was inevitable. Zhang’s eventual show trial will be revealing; the charges might be more extreme than the usual litany of bribery and improper sexual relationships.

Chinese air defense systems in Iran. There have been a few reports that China is preparing to send Iran improved air defense systems, but I’m not sure this would make a big difference—though Chinese air defense overperformed expectations in Pakistan’s brief skirmish with India last year.

That was largely because Chinese staff were believed to be operating parts of the system, according to Indian and U.S. defense experts whom I’ve spoken with. I don’t think China is ready to deploy its personnel in Iran in the same way.

Further, the immediate question is whether Trump will see the Chinese assistance as a hostile move—or even throw a fit of pique that causes problems with the meeting with Xi. I don’t think that’s likely right now, as Trump seems fixated on wooing the Chinese leader.

FP’s Most Read This Week

• The Man Who Shaped Washington’s View of the Middle East by Dion Nissenbaum
• Why Trump Mishandled Iran by Ravi Agrawal
• Why Viktor Orban’s Fidesz Party Lost by Thomas Carothers

Tech and Business

Domestic car sales fall. The domestic market for China’s world-dominating auto industry seems largely sated, with six straight months of decline in sales and those in January and February down by one-quarter from the same period last year.

Between subsidies and price wars, buying a car in China—especially an electric vehicle—is dirt cheap, but it seems that now pretty much anyone who could plausibly have a car does. That has left foreign markets, where car exports from China are accelerating rapidly.

If China can persuade Europe to lift remaining penalties on Chinese EVs, which are still booming in European markets despite heavy tariffs, that growth could get even more spectacular.

BYD scandal in Brazil. The Brazilian government reportedly fired its top labor inspector, Luiz Felipe Brandão de Mello, after he added Chinese auto giant BYD to a so-called dirty list of companies guilty of labor abuses. Despite his socialist roots, Brazilian President Luiz Inácio Lula da Silva’s government has clashed with the country’s fiercely independent labor inspectors.

Brazil is trying to cozy up to multinationals for further investment—and to keep warm relations with China, which Lula sees as an important part of balancing against the United States.

The scandal may become an issue in the country’s October elections, in which Lula is running against former President Jair Bolsonaro’s son Flávio. (Bolsonaro, a Trump ally, often took a hard anti-China stance.)