My weekly update on Iran conflict:
See Dimi's 3-day moving avg on Iranian firing rates + UAE's report on missile & drone attacks from yesterday.

Holding steady w/ higher launches yesterday likely due to reduced air pressure as US military was doing SAR missions in Iran.
US allies in the region are running out of interceptors after a month of attack & Strait of Hormuz remains shut unless you have a deal w/ Iranian & "pay the toll".

Iran's position in the conflict is increasing since more of its strikes can get thru & threaten GCC countries more

Since 2025/5, China established regular rail freight traffic from Xian to Tehran thru Kazakhstan & Turkmenistan.

This reduced travel time from 30-40 days over sea to just 15 days. China supply chain + machineries to Iran in return for oil products. Why this is important? Iran would provide a Russian-free rail option to Europe that is not limited by Caspian Sea. Can go through newly constructed CKU rail & Turkmenistan or thru Afghanistan or thru Kazakhstan+Turkmenistan or thru Pakistan.

Can also go thru Iran into GCC countries & Egypt.

As we are 1 month in, the most noticeable change comes from the Coalition missile expenditure both on offense & defense.

RUSI report of 1st 16 days + Tomahawk report -> huge interceptors & standoff missile depletion on frontline. Effect of this is quite evident from past week.


Yesterday, another few tankers + 1 or 2 E-3 got taken out (only 6 E3 in theater in total), huge loss for USAF.

Israel saw Dimona & ICL struck earlier this wk + Ben Gurion airport -> Iranian missiles & drones are able to get thru w/ much fewer interceptions.

This wk, China & Vietnam signed 4 docs on planning for 2 standard-gauge railway lines: Hanoi-DanDong & Hai Phong–Ha Long–Mong Cai.

This is on top of the Lao Cai–Hanoi–Hai Phong railway line that Vietnam started construction in 2025/12/19.

What does this mean for China/Vietnam? Lao Cai - Hai Phong project connects Northern Vietnam from border w/ China in Yunnan to the biggest city next to Halong Bay.

390 km in total across 6 provinces & 32 stops & supporting 21mt freight/yr.
Complete by 2030.

China lowered project cost to $7.7B w/ preferential loan for 64% of total cost.

What would a mass foreign outflow from GCC countries look like? UAE by itself holds $720B in foreign capital. If $570B flows out from all GCC countries to Singapore, HK & EU.

Impact on Singapore & HK would be huge. Total economic impact for HK & Singapore would be $236B & $295B respectively, which would be 39% growth to GDP, which likely will not just stay in these 2 cities but also spread to greater China area, Thailand, Malaysia & Indonesia.

It would be one of the biggest boost to Southeast Asia economy ever.

As such, I think China will take a different approach w/ UAE going fwd. Whereas China was seeking UAE capital b4, now it just seeks relocation of foreign professionals & capital to East Asia.

https://x.com/tphuang/status/2035760127597215996

A massive outflow of foreign capital from UAE would be total economic annihilation there. It would be 2x as bad as Great Depression & lead to massive contagion, bank runs & currency collapse across GCC countries, b4 spreading to global banking sector.

China's approach toward LNG will fundamentally change after the current energy crisis.

China imported > 84 BCM LNG in 2025 & that cannot continue. LNG supply from Qatar is not secure, nor does China need it.

Expect more pipeline gas, shale gas, green hydrogen & heat pumps to reduce the current reliance on unreliable LNG tankers.

https://x.com/tphuang/status/2033252541064945884

There are 2 major gas pipeline projects under way to China:
Phase 4 of the Central Asia Pipeline network (add 25 bcm/yr from Turkmenistan & Uzbekistan)
Power of Siberia 2 (add 50 bcm/yr when complete)

when complete, China will import 95 bcm from Russia, 70 from Central Asia & 12 bcm from Myanmar via pipeline

Weekly update on Iran conflict:
Iranian strikes were trending up b4 last couple of days when their New Yr & Egyptian president visits slowed down attacks. Expect it to trend up again tonight.

Centcom attacks trending down as USAF is forced to operate farther away & Lincoln CSG moved farther away & Ford is under repairs in Crete.

Things trending in the right direction for Iran & wrong direction for coalition forces.
If you need to know how things are going:
B-52 continues to launch JASSM. F-35 got shot down when it got too close to Iran. USAF is avoiding part of Iraq air space where resistance fighters have taken over & attacked Victoria base & green zone so much that NATO & others have withdrawn from there.

Update on Iran's attack tempo:
Its attack tempo noticeably slowed down earlier this wk as it shifted to longer range & more powerful BM while reducing attacks on GCC countries, especially UAE.

But that look to have changed last 2 days as Saudis & Jordan are getting attention

A simple look at the US tanker fleet action would point to the importance of Saudi Arabia, Jordan & Iraq toward continually supporting Coalition strikes on Iran.

As such, Iran has dialed up attacks on US bases & radar/command sites in this line.

Impact of Sulfur supply interruption will hit Sulfuric Acid production, which is needed for phosphate (fertilizer & LFP battery), chemicals, metal processing (leaching for Cu, Ni, Co, U, Zn, Fe & Ag), refining & more.

Thread on Sulfur industry, China's role & Hormuz risks👇

https://twitter.com/tphuang/status/2028910743404593464

Most common use is fertilizers.
Sulfur is needed to produce Sulfuric Acid.
Sulfuric Acid + Phosphate rock is need to produce phosphoric Acid.
Which is the main feedstock for several types of phosphate fertilizers.
Phosphate demand recently have jumped due to LFP batteries.

In 2025, China continued to import large qty of Rare Earth in order to produce RE alloys & magnets.

RE Oxide in 2025 is up 15% YoY, which has made up for decline of 56% on RE concentrate & 28% in RE compounds. Overall tonnage import remains flat while value increased by 12%, since Oxide are more processed & are higher valued.

China also imports small qty of magnets. Big change in import this yr is caused by no longer getting Rare earth ore from US (for obvious reasons), but more RE Oxide from Myanmar & ore from Laos.

56% of import from Myanmar, 25% from Laos & 19% from US. I'd expect the US import to drop to ~0 in 2026.

A thread on China's auto export for 2025:
7.08m passenger vehicles: 3.26m ICE, 2.21m BEV, 1.06 PHEV & 506k hybrids
1.065m trucks: 681k diesel, 220k gasoline, 85k BEV & 53k PHEV
106k coaches/buses: 64k gasoline, 24k diesel & 17k BEV
Overall, this was 30% growth vs 6.41m in 2024. Overall, the goal of China's auto industry is to surpass Japan. Composition of China's oversea sales need to shift from export to local production.

See below where Japan Inc sold 24.62m overseas in 2018, but 19.8m (80.4%) was produced in oversea factories. Big shift from 1985 when just 15% was produced overseas.

In China, provinces make their own yearly dev plans. I was really impressed in Jan, when I read Inner Mongolia's 2026 plan & here is a look:

It wants to be China's main strategic energy base & produce 1.2B ton of coal, 3.1mt of crude & 31 BCM of NG every yr.

It wants to build 500kV grid along major centers w/ 15 projects. For renewables, it plans to add 40GW to the grid for 170GW in cumulative installation & generate 300 TWh of electricity.

Plans to expand the major renewable bases along desert regions & deliver to other provinces.

Also build 0-carbon industrial parks, lithium industry & modernize coal-to-chemical plants to integrate green energy (like methanol).

Greatly build up the usage of RE magnet in NEVs & wind turbines.

China's wind industry had a banner yr in 2025 w/ 119GW of installation, which was up big time from 37GW in 2022 & 79GW in 2024. Cumulative installation thru 2025 is now up to 640GW.

1130 TWh electricity was generated from wind in 2025. This likely goes up quite a bit in 2026 as most installed capacity was toward end of the yr. See below for wind installations in 2024 (yellow) & 2025 (green).

There was a bump in May due to reforms starting in June, but installation exploded in Dec w/ 36.8GW of installation just in that month.

Bid result would indicate 2026 installation should surpass this total.

Having received electricity generation data from both CEC & NEA for 2025, I used Kimi 2.5 to analyze trend since 2015.

Coal portion has decreased to 51% whereas non-thermal increased to 43% as of 2024. The change has accelerated in past 2 yrs due to solar/wind expansion. Structure of thermal power generation looks like the following. 82.5% of generators are coal, followed by NG, biomass & others (like waste-to-energy plant)

Other thermal generates ~6% of power.
NG capacity has grown the fastest here, but biomass also growing faster than coal.

China's economy will change bigly over the next 20 yrs due to shift in its labor force. Here is Kimi generated labor force projection by 2030 showing work age population drop by 41m over next 5 yrs.

Not only that, 70% of ppl entering work force want to do white collar jobs. So economy needs to create more white collar jobs while dramatically reduce blue collar jobs.

https://x.com/tphuang/status/2020840913992364059

In 2025, China's service sector export had 14.2% growth while import had just 2.5% growth.

Trade deficit shrunk to just 828B RMB. Knowledge Intensive service (like s/w stuff) export grew by 37.8% YoY & surplus here reached 576B RMB. It is 38% of China's overall service export.

Too often, online AI “experts” make generalizations about Chinese AI labs when they each have their own niche. Kimi is not like GLM or Minimax. It is in fact going for large models that excel in deep research & agentic use.

But don’t expect Kimi to excel in multi modal stuff.

https://twitter.com/yifan_zhang_/status/2023085177086316681

Kimi 2.5 popularity has already made it the most popular model on OpenRouter & for OpenClaw users.

Now it is stepping up customer capture & user stickiness w/ Kimi Claw. It has to keep close to SOTA in these critical areas for customer stickiness

https://x.com/kimi_moonshot/status/2023029674549596301?s=46

Long term, ByteDance & Doubao team is always going to have the most cutting edge model from China since it has the most resources & data. Its also not constrained in size of model, so Doubao 2.0 Pro is going to be better than the open src labs, who have to release smaller models. ByteDance/Seed team looked at the MaaS demand & targeted those areas in its model.

Note the corporate demand in processing knowledge content with mixed charts, documents, and other unstructured information.

BD is battling Alibaba & Tencent for business users.

So, we finally have 09V, 110m long, 12-13m beam, likely single/hybrid, w/ X tail & Pumpjet.

Essentially, Chinese seawolf
1st SSN designed after China had reached competence in nuclear supply chain, high end steel, precision mfg & sensors -> finally allowing more the large sub that PLAN always wanted.

USS Jimmy Carter & Virginia class Block 4 are all ~140m long, so they could presumably extend this one that long to accommodate a larger mission bay.

That doesn't need to happen for a while. The lead boat will need to go through sea trials for a while & enter service by around 2030 (if we use the initial 093 timeline). Likely pause for a couple of yrs to fix problems found in testing b4 mass production really ramps up. They will likely build a lot more 093Bs b4 then.

Given that SSN quietness is essentially determined by noise produced by the machines inside the submarine & the passive noise absorbers all around (which itself is determined by interior space). There is no reason to think that China's mechE & material science tech is inferior to what USN had access to back in 1995, I see no reason why this sub would not be at least as quiet as Seawolf class.

ofc, at certain pt, SSNs essentially are as quiet as surrounding waters & then the subs effectiveness can then be determined by factors like its advanced sensors, compute server farm, mission payload and how well it can conceal communication w/ aerial assets. This sub + follow-on 09VI will significant shift global balance of power, but especially in Pacific.

RAN + AUKUS supporters should really think about the implication here.

Seawolf vs Virginia sized sub

https://x.com/RickJoe_PLA/status/2022119092564762910

Every country should strive for energy independence & not depend on hydrocarbon powers.

Reminder that China is world's 4th largest NG producer & has world's largest shale reserves. Production cost of shale is 20% cheaper than pipeline gas.

China doesn't need Russian oil/gas.

https://twitter.com/Tendar/status/2020432259724058940

China also does not depend on Russian pipeline since it gets more gas that way thru Central Asian republics + 12 bcm from Myanmar.

China's increased NG production means it has reached 61% self sufficiency while LNG demand has collapsed. Pipeline import increased due to lower px.

MIIT filings had some interesting new EVs:
1st, we have Tang 9 EV here
Comes in AWD 215+370kW or 300/370 RWD
240 to 250 km/h top speed!
4.9s from 0 to 100
Dimension 5263/1999/1790mm wheelbase 3130, seats 7
BYD going full electric on full sized SUV is big deal
-> battery energy density/cost & charging speed are now good enough to allow for this
BYD used to only do PHEVs for large SUVs. Next is BEV version of the popular Tai-7 Box SUV.
Dimension 5050/1995/1865mm wheelbase 2920
Comes in AWD 215+300 kW or RWD 300 kW

Another medium-large SUV getting BEV version.
Sign of maturing super ePlatform & battery tech.

China's import, export, consumption & production data of Gold from 2025.

932.5t imported in 2025, down 448t YoY, but import bill of 726B RMB was just 0.6% behind 2024.

In fact, Gold was the 4th largest import item in 2025 behind Semi, Oil & Iron Ore.

Gold import masked the size of China's trade surplus in 2025, imagine that. Even w/ China settling some surpluses thru gold, it still ran a $1.2T surplus. This happened while Gold was the largest export item out of America in Oct & Nov, even more than aircraft & oil.

Picture of America sending gold bars to China while getting $ back has never been so accurate.