China's updated export control seem to be directed @ US EAR's De Minis Rule (for 0.1% 13 RE elements) + FDP (Chinese tech in mining, smelting, separation, processing, mfg & recycling).

Annex 1 can be modified to include more elements like Ga, Ge & La. Why is it done this way? China's emphasis here on advanced semi mfg, R&D + AI chip is a direct retaliation for something from 3 yrs ago. it also added its own BIS 50% rule for entity list firms.

Would signal that it's no longer concerned about further US restrictions on SMEs & AI chips. Huge implication

Alibaba had a huge update on its AI deployment today including Cloud infrastructure, AI stack & its full suite of AI models & products.

Qwen has a full suite of AI models & is #1 globally in open src models w/ 300+ open src'd, 170k+ derivative models & 600m downloads.
Thread 👇 Alibaba made the bold proclamation that AI Cloud is the next computer + large models is the OS for that computer.
Then provided its full stack of "LLM OS" including VLM, coder, Wan series, voice, OCR & tools.

Cloud h/w include GPU & CPU clusters, advanced web & data storage.

Ppl that started the chip war are still eager to justify it by continue the line of China having "scarce compute".

That's despite Chinese AI labs (including Meituan, China's Grubhub) now dominating open src rankings & rapidly catching up to OpenAI & Google.

Thread on how out of touch they are.

EDWC project alone, which are basically public clouds, show most of the nodes will already be @ 50-100 EFLOPS by end of this yr & on way to 500 EFLOPS+ by 2027.

Including HW's own cloud which just built a 100 EFLOPS DC w/ CM384 SuperNodes + 3 other DCs.

Long thread on HW AI chip presentation:
HW is not hiding anymore -> complete confidence of supply chain going fwd

It has complete view of China's semi industry progression over next 3 yrs. Supply chain either in-house or HW has close working relationship
How good are the chips? Each Ascend-950PR/DT is a 950 die + either HIBL 1.0 for inference oriented 950PR
or HIZQ 2.0 for more training capable 950DT.

Ascend-950 die is 1 PLFOPS FP8 or 500 TFLOPS FP16
25% higher per die than Ascend-910B (910C 2 910B dies)

Interconnect bandwidth + memory vastly better.

China not only dominates mfg of final product & basic materials, but also increasingly the equipment. Today, I will focus on machine tools.

China is world's biggest machine tool producer ($27B) & exporter (>$7B) in 2024.

A thread on how China Inc has grown in machine tools👇 In trying to understand how China's machine tool industry grew, I follow this man's discussion w/ customers of Beijing JingDiao in Malaysia.

How did China's mkt share grow from <20% in 2014 to 1/3 in 2019 to 45% in 2024?

How did China Inc change global supply chain so fast?

Long thread on what we saw today out of Beijing.
We can start off where they showed off the revamped nuclear triad.

DF61 & 31BJ from ground + DF-5C new silo ICBM
JL-3 from 094 submarines & JL-1 from H-6N

i don't care much abt nukes, so this is more for the DC policy makers. The hypersonic missiles are impressive as usual. They now have 5 different type of hypersonic YJs for different scenarios & launch platforms.

Defending missiles w/ different flight profile & angles is just so much harder than 1 direction & profile. So, pretty grim for CVNs.

Alibaba's Q1 report show its AI focus in cloud expansion is really working out.
It has added 8 DCs so far in 2025 in Beijing, Shanghai, Hangzhou, Thailand, Korea, Malaysia, Dubai & Mexico.

Note the huge oversea expansion. Its AI offering is really picking up customers. Thread/ In May, Alibaba announced partnership w/ SAP to integrate AI capabilities & Qwen models for China & then ASEAN, Middle East & Africa mkt.

Followed in July w/ Standard Chartered joining to use AliCloud product for customer service, sales, risk mgmt & automation.

Shenzhen competitiveness can be seen in how its companies have taken over mkts created by American companies often synonyms w/ those fields.

See below: Insta360 vs GoPro in consumer panoramic camera from 2021 to 2024. Insta360 now has 82% global mkt share, while GoPro is 7%

https://twitter.com/tphuang/status/1959548363466051978

DJI got in the camera industry a while back bc it could not reach a deal w/ GoPro to supply camera module on its drones.

Now, DJI's Osmo line has the leading share in Video Camera mkt ahead of GoPro, Panasonic & Sony

China's 9/3 military parade will showcase PLAGF progressing into information network centric warfare age.
All new vehicles displayed show fruits of utilizing its vast EREV supply chain for longer range, better energy efficiency, autonomous tech & network/data-linking.
Thread 👇


Current gen of ZTZ-96/99 & ZBD-97 are similar to their American & Russian counterpart that are designed for winning armored warfare thru more powerful engine + drivetrain, armored protection & penetrating rounds.
Increased drone usage in warfare makes this increasingly nonviable

Rare Earth is about material science.
Far more complicated than just digging minerals out of ground.

Back in 2021, Kunming University developed new RE material that can operate stably @ 1400-1600 C which transformed performance of high end Ceramic material used in AeroEngine. RE can be used as advanced thermal barrier coating material w/ max op temp of 1400-1600C & increased thermal insulation cooling gradient by 100 to 500C.

Superior to Zirconia-based material which melts away at 1200C.
Thermal barrier material acts as insulator -> reduces substrate temperature.

Huge factor in China's mfg boom is taking over the global CNC mkt. You can go on YouTube & search "China CNC" & find many results of how China has taken over the know how of using CNC machines to make parts needed for pretty much everything.
US customers send CAD drawings over to China to get them mfg for low cost & sent back.
See below for how big China's CNC mkt is. This is more impressive in 5-axis CNC milling machines where China's mkt size will 2x from 2020 to 2025. 5-axis machines are more expensive & needed for more precise cutting needs.
Its essential for advanced industries like aerospace that China is gaining more mkt share.

While many focus on RE, China's development in high-end fiber is what has powered its new energy industries & AI robots.
Big 3 fibers are Carbon, Aramid & UHMWPE.
UHMWPE is lightest & has excellent wear & chemical corrosion resistance + very strong
Ideal for defense protection, marine engineering, biomedicine, aerospace, auto & now humanoid robot. A simple look at China's UHMWPE fiber industry show its production has increased from ~10k ton in 2016 to 39.8k ton in 2023.
@ same time, theoretical demand has risen from 24k to 72.4k ton.
Mkt size increased from 2.23B to 6.65B RMB
Huge demand growth as it became better known

Imagine 1 country dominating the full Semi supply chain including Silicon, wafer, all chemicals, all equipments, fabs, design studio & advanced pkg.
China has that in Rare Earth & ppl are finding out now it is used in everything.
Thread on just how much China controls RE supply chain. The initial Chinese dominance in RE supply chain was mostly in upstream mining as lower Chinese environmental standards encouraged other countries to close down their production.
Recent yrs, mining production rose in US, Australia & Myanmar, but much of that is exported to China.

MSM continues to be clueless abt what makes China's mfg tick. While industrial robots, precision mfg, 3D printing & AI are important, the supply chain buildup - especially in basic & advanced materials that really solidified its position in mfg.
I will 1st talk abt Carbon Fiber & its importance in "new productive forces", electrification & AI application. Kitech Advanced Materials supply High-end CFRP products for NEVs, low altitude economy & robots.
In fact, it supplies BYD's high end models like YangWang & Denza Z
Lighter + higher strength material for EVs, drones & robots -> faster, more efficient & longer endurance.

Recently, Jilin Fiber (China's largest Carbon Fiber producer) raised prices across the board due to exploding demand in low altitude economy, drones & exports.
It also reported rising demand from humanoid robot & other sectors, so this is a look at what's driving CF demand. I list several projects below including carbon fiber composite material for civilian aerospace. Significant increase in unmanned transport aircraft.
Also major 1 million auto part CF projects.
Wind turbines continue to get larger -> need lighter & stronger CF material to match

In Air warfare, PLAAF has developed kill chain where aircraft A can guide missile fired off by aircraft B until B gets closer to target & turn on radar for weapon grade tracking.
Recent exercise show PAF has also achieved this capability.
Thread on PAF learning from PLAAF

https://twitter.com/tphuang/status/1921743765640749529

Since late 2000s, PLA has introduced a wide array of special mission platforms including AWACS, EW aircraft, ELINT aircraft, PSYOP aircraft, comm jamming aircraft & specialized EW fighter in J-15/16D + built up multiple constellations
w/ goal of winning modern air warfare.

From recent PAF briefing of its IAF encounter, it identified 72+ IAF aircraft (India reported 80 in total) w/ 14 Rafales & showcased very competent operational control, situation awareness & battlefield mgmt.
I will talk abt why PAF description of event is very troubling for IAF Some good Weibo analysis:
PAF AWACS operated 300km behind border & fighters stayed inside airspace also ->
IAF fighters likely too far away to be detected by airborne radar upon takeoff.
PAF said it identified IAF aircraft thru ELINT ->
IAF pilots undisciplined in emission mgmt.

China has become the leading producer for many foreign delicacies like Caviar, Black truffles, matcha, foie gras, eel & Wagyu beef.
Due to its vast geography & varying climates + China's industrial+tech, many products found ideal growing environment in different parts of China. Now China produces 60% of world's caviar w/ 90% of its Kaluga caviar being exported.
Using "live egg extraction technique" + ultrasounds of sturgeon, it can extract eggs 3m after anesthesia & extract each fish 8 times.
Lowering px of Chinese caviar to just $150/30g.

Time will reveal more of what happened last night, but it appears that J-10C/PL-15 combo shot down multiple IAF fighters.
Old assumption in miltech:
US > French > Russian > Chinese
Despite civilian tech showing this is completely untrue
-> J-10C downing Rafale surprised ppl
Access to PL-15 seeker won't help India.
You need fabs that can produce miniaturized MMIC that go into these AESA seekers.
This separates PL-15 from other BVRAAM in service.
It allows PL-15 to lock on to fighter jet w/ lower RCS from further out & resist CM more effectively.

1 thing catching my eyes today is the 500kV line from China to Laos which will allow power to be transmitted bw 2 countries.
+ China is building wind/solar projects in Laos & plenty of hydro.
85% of hydro power expect to be exported.
To Thailand, Vietnam & even to Singapore.
Laos -> Thailand -> Malaysia -> Singapore
so Singapore can get clean energy to fulfill its net-zero obligations
Once China builds out 500kV line, it can supply to Laos, & Vietnam, which can then supply rest of ASEAN.
Projects use Chinese expertise in grid, renewables & transport

China spent 7 yrs planning/war-gaming a decoupling scenario + likely studied all consequences
Wall Street Ghoul here thinks China wants to remain the low value assembly plant
vs reality of what probably will actually happen
Chinese plants move offshore & continue to make profits
Will China suffer blue collar displacement?
Sure, but remember that China has a huge blue collar shortage issue coming up.
Labor intensive industries have been automating
Young ppl want white collar jobs, so more service sector jobs & higher valued design jobs need to be created.