China’s global trade surplus reached $1.2 trillion in 2025, a figure that sits outside the normal range of peacetime trade imbalances and into territory the IMF has characterized as destabilizing for the global economy. Total goods trade crossed $6.36 trillion, with exports rising 6.1% year over year even as PRC exports to the United States fell 20%—a structural redirection, not a contraction. Beijing found other buyers.

The composition of the export surge is strategically significant. Exports of wind turbines rose 49%. Industrial robots rose 49%. EV batteries climbed 26%. Machinery and tools gained 20%. These are not consumer goods traded for household income. They are the capital equipment and energy infrastructure of other countries’ industrial bases. China is not merely selling products; it is inserting itself into the productive capacity of economies that will, in a crisis, need to decide whether their supply chain dependency on China is a reason to stay neutral.

China’s 15th Five-Year Plan, covering 2026 through 2030, frames its core ambition in the language of innovation and development. Read structurally, it is something more specific: a document organized around the elimination of Chinese dependency on the United States, Europe, and Japan in every sector that would be decisive in a sustained great-power confrontation.

The plan identifies by name the areas where China remains reliant on foreign technology and supply chains—aircraft, agriculture, advanced equipment, energy systems, gas turbines, and semiconductors—and treats that reliance as the primary problem to be solved. This is not a normal industrial development agenda. Normal industrial development seeks comparative advantage. This agenda seeks independence from the countries it regards as the most likely sources of economic coercion in a conflict scenario.

The IMF estimated in early 2026 that the renminbi is undervalued by approximately 16%. The Chinese government’s response, encoded in the 2026 Government Work Report, is that the RMB will be kept “generally stable” at an “adaptive, balanced level.” Translated from the diplomatic idiom: Beijing intends to manage the currency at a competitive rate and will move slowly, if at all, on any revaluation that international institutions or trading partners request.

On May 6, 2026, Taiwan’s first indigenously developed submarine, the SS-711 Hai Kun (海鯤), successfully conducted its maiden torpedo launch test — the most consequential weapons milestone in the program’s history to date.

#Taiwan's first indigenous submarine #Haikun (SS-711), the #Narwhal, has successfully conducted the torpedo launch test. A big milestone. It'll soon be defending our waters.
💪💪💪 pic.twitter.com/ffRAfV7shs

— Joseph Wu (@josephwutw) May 7, 2026

State-owned shipbuilder CSBC Corp confirmed in a formal statement that the test verified the combat system’s full operational chain: detection and tracking, fire control, launch sequencing, and torpedo guidance. The Hai Kun — named after a mythological creature of unfathomable scale from the ancient text Zhuangzi — carries a Lockheed Martin combat system and is designed to deploy US-made Mark 48 heavyweight torpedoes. CSBC did not disclose the specific type of torpedo fired during the test.

TiTE x IHT returns to Taichung on October 20–22, 2026, billing itself as Taiwan’s largest hardware industrial exposition and the definitive sourcing event for global buyers operating in precision manufacturing categories. With more than 1,000 booths and upward of 500 exhibiting manufacturers, the scale distinguishes it categorically from the general trade expos held in Taipei’s city center, which draw mixed-industry audiences and lack proximity to production.

The event’s organizers frame location as its primary strategic asset. Taichung and the surrounding central Taiwan corridor account for an estimated 70 percent of the island’s industrial output, concentrating tooling, metalworking, hardware components, and precision machining within a short radius of the venue. This geography underpins what the show markets as the “30-Minute Sourcing Circle” — the ability to assess samples on the floor in the morning and walk a live production line the same afternoon. For procurement teams conducting capacity audits, R&D qualification, or quality control verification, the compression of those two phases into a single day represents a substantive reduction in due-diligence cycles.

Secretary of State Marco Rubio said Tuesday that the United States and China share a common interest in maintaining stability in the Taiwan Strait, signaling a degree of diplomatic alignment ahead of a meeting between President Trump and Chinese leadership expected next week. Taiwan is likely to feature prominently on the agenda.

The framing is notable. Rubio’s language — shared interests, mutual stability — is the vocabulary of managed competition rather than confrontation. It reflects an acknowledgment that even as the two powers contest influence across the Indo-Pacific, neither has an immediate interest in a kinetic crisis in the Strait. For Washington, the statement also serves a reassurance function directed at Taipei: stability language from the Secretary of State is not abandonment, but it does define the ceiling of U.S. escalatory posture in the current diplomatic moment.

The war in the Strait of Hormuz is ending. The accounting for Taiwan has not yet begun.

Every resource consumed in the Gulf over the past weeks came from the same strategic account that underwrites deterrence in the Pacific. The aircraft carrier gap — no US carrier in the Pacific for more than two months — is not a logistical footnote. It is a signal. China read it. Taiwan felt it. The question now is what Beijing concludes about the durability of American commitments when a second crisis materializes in a different theater.

The past 48 hours in the Taiwan Strait are best understood against two converging pressures: the ongoing Balikatan 2026 exercises reshaping the military geometry of the first island chain, and the approaching Trump-Xi summit that has introduced a layer of calculated restraint — and calculated anxiety — into Beijing’s Taiwan posture.

Balikatan and the PLA response. The combined Balikatan 2026 exercises, running April 20 through May 8, mark a structural inflection. Japan is participating for the first time in an active operational role, not merely as an observer. The exercise has prominently featured sea denial systems — the US Navy-Marine Corps NMESIS and Japan’s Type 88 anti-ship missile — deployed to the Batanes Islands in the Luzon Strait. The positioning is deliberate: anti-ship systems in the Batanes directly contest the PLAN’s primary breakout route from the first island chain through the Luzon Strait. Beijing read it accordingly. The Southern Theater Command announced on April 24 that a surface task group led by a Type 055 guided missile destroyer, accompanied by a Type 052D destroyer, a Type 054A frigate, and a replenishment vessel, had conducted exercises east of Luzon. The STC conducted additional South China Sea exercises on April 28, citing Philippine provocations. Unverified satellite imagery circulated on PRC social media appeared to show the carrier Liaoning operating in the South China Sea with a three-destroyer, six-frigate escort group — Liaoning had transited the Taiwan Strait southbound on April 20. Separately, the PLAN’s new Type 076 landing helicopter dock departed Shanghai for sea trials in the South China Sea around April 22, possibly in conjunction with the response posture. The PLA also released footage of YJ-20 hypersonic anti-ship missile test launches, timed to coincide with the Balikatan peak, including previously unseen shots of the launch sequence beyond what was disclosed in December.

Taiwan’s President Lai Ching-te arrived in Eswatini on Saturday — days late, but there. The visit had been blocked in April when the Seychelles, Mauritius, and Madagascar revoked overflight permits for his presidential aircraft without prior notice. Taiwan’s presidential office attributed the withdrawals to what it called intense economic coercion by Beijing. China’s foreign ministry, for its part, expressed “high appreciation” for the actions and framed them as adherence to the one-China principle.

The cables that carry Taiwan’s internet traffic run along the seafloor, mostly invisible, largely undefended, and increasingly targeted. Since 2023, a sustained pattern of sabotage — carried out by Chinese-linked vessels operating under flags of convenience and falsified identities — has emerged as one of Beijing’s sharpest tools of gray-zone pressure. The plausible deniability is deliberate. So is the damage.

A Documented Pattern, Not a Coincidence

In early 2023, Chinese-registered vessels severed two undersea cables linking Taiwan’s Matsu Islands to the main island, cutting internet access for roughly 13,000 residents for nearly two months. It was framed as an accident. The pattern since has made that framing implausible.