Seizing The Commanding Heights; Decoding Shangri-La Dialogue; Europe Moots Trade Policy; The PRC Expels a New York Times Journalist

**Andrew Sharp** (0:04)
Hello, and welcome back to another episode of Sharp China. I'm Andrew Sharp, and on the other line, Bill Bishop. Bill, how are you doing?

**Bill Bishop** (0:14)
Hello, everyone. I'm doing great. I hope everyone's doing well.

**Andrew Sharp** (0:17)
It's a beautiful day in Washington DC. It's June all of a sudden. Summer is here. It doesn't really feel like summer just yet, but we've got a lot to cover today, and we can begin, Bill, with an eye toward the future. I'll read from Monday's edition of Cinecism. The June 1st issue of Chusha has as its main theme, the development of future industries, and the lead article from Xi is part of his speech at the June 30th, 2026 Politburo study session on this topic. The six future industries chosen as the main directions of attack, that's in quotation marks, are quantum science and technology, biomanufacturing, hydrogen energy and nuclear fusion energy, brain-computer interfaces, embodied intelligence, and sixth-generation mobile communications.
So I found it pretty surprising that Xi did not list artificial intelligence among the six technologies, but...

**Bill Bishop** (1:19)
I think that's sort of already well underway in some ways, I think.

**Andrew Sharp** (1:22)
Okay. So this is an eye toward what's next.

**Bill Bishop** (1:26)
And this is consistent with what they talked about in the 15th Five Year Plan. You know, Xi explains why these are important and his quote, and it's a loaded term, which we could talk about, cultivating and developing future industries carries major significance for us in seizing the commanding heights of science, technology and industry. Seizing the commanding heights is not a benign term.

**Andrew Sharp** (1:47)
Okay. What does that mean?

**Bill Bishop** (1:48)
It's a very much sort of a Marxist term. It's very much, you know, we're going to dominate, we're going to be the leader. And so they are staking out, as they've said repeatedly, that they don't want to just develop these, they want to be the global leader in the next generations, the next generations of key technologies.

**Andrew Sharp** (2:05)
Yeah.

**Bill Bishop** (2:05)
And, you know, they're putting massive amount of organizational, financial, technical talent resources behind this. And so, you know, we should take it seriously.
I translated several of the articles that are in this issue of Chosha and also...

**Andrew Sharp** (2:20)
There was a People's Daily compliment as well.

**Bill Bishop** (2:23)
People's Daily article by the Minister of Industry and Information Technology, MIT Minister Li Lecheng. So, I mean, it's an important... Again, it's nothing new, it's not surprising. It is very consistent with what they've been talking about and what's in the 15th Five Year Plan, but it's absolutely worth paying attention to.

**Andrew Sharp** (2:41)
And their view to the future where the technology super power will ultimately control the world. And historically speaking, that has been true. I mean, US has been technologically dominant for the last 100 years and has been the global hedgemon. So, I think if nothing else, this just sort of underscores China's ultimate ambitions over the next 50 to 100 years here.

**Bill Bishop** (3:05)
Right. And it is a challenge for, certainly for the US and when you look at the changes underway in the way the US government funds basic research, I think this is a moment where the Chinese see a lot of more opportunity as the US seems to be taking more of a slash and burn approach.

**Andrew Sharp** (3:33)
To public. Yeah. I mean, there's been a lot of anxiety around that over the last year and a half, understandably so. I also would caution a lot of our development now happens in the private sector. And innovation wise, the US has still been leading in the private sector, including over the last 10 or 15 years.

**Bill Bishop** (3:51)
And on quantum, I think that is absolutely true. When you look at some of the stuff Google is doing, for example, and there are multiple now public companies that trade at really healthy valuations that are in quantum.
You look at things like fusion energy, that takes a lot of investment. And the Chinese are pouring a lot of money.

**Andrew Sharp** (4:10)
That's a great example, yup.

**Bill Bishop** (4:11)
Their approach is they're trying all the different theoretical paths toward to fusion energy with massive state support.

**Andrew Sharp** (4:19)
Yeah, and the returns on that are not great. And so that's an area where...

**Bill Bishop** (4:25)
But when they hit, they're astronomical.

**Andrew Sharp** (4:27)
But I mean, from a profit standpoint, I don't know that there's an appetite for funding that in the United States.

**Bill Bishop** (4:33)
For the private capital, right. But then again, I mean, you look at the private company, SpaceX is far ahead of their entire, you know, not quite on the moon yet, but private capital, they've done a pretty good job of innovating, right? Quantum, Google, I mean, they've all done a, you know, again, the Chinese side on Quantum, the Chinese clearly have made a lot of breakthroughs in Quantum, a lot of them are classified.