China 5: China blocks Manus deal, China-Pakistan Economic Corridor back in focus, India-China defense talks resume
China blocks Meta's Manus acquisition, Pakistan advances CPEC, India-China defense ministers meet, Beijing tightens oversight of gig workers ahead of 2027, and southern China battles extreme rains
1. China Blocks Meta’s Manus Acquisition
What Happened: On April 27, the foreign investment security office of China’s National Development and Reform Commission ordered the unwinding of Meta’s roughly $2 billion acquisition of Manus, a Chinese-founded AI agent startup based in Singapore. The decision followed U.S. sanctions on Hengli Petrochemical’s Dalian refinery over Iranian oil purchases and comes amid broader pressure on Chinese firms in sensitive supply chains.
Why It Matters: Chinese AI application developers face a monetization gap at home — domestic willingness to pay is low, and capital markets are thin. The decision signals to Chinese AI entrepreneurs and investors that nominal offshore corporate structure offer limited protection from political risk. Beijing risks narrowing the very exit pathways that make Chinese AI ventures financeable. AI startups are likely to either move abroad from the outset or rely more heavily on domestic markets and capital to avoid regulatory risk.
By Shengyu Wang, Research Assistant, Center for China Analysis
Learn More: Read “China’s AI Token Drive is Really About Upgrading Inland Economies,” an opinion piece by CCA Fellow Lizzi C. Lee.
2. Pakistan President’s China Visit Puts CPEC Back in Focus
What Happened: On April 25, Pakistani President Asif Ali Zardari began a week-long visit to China, with scheduled stops in Hunan and Hainan to advance economic cooperation and the next phase of the China-Pakistan Economic Corridor (CPEC). In Hunan, discussions centered on seed technology, agricultural research, machinery, mineral processing, and industrial collaboration. In Hainan, China’s southern free-trade port province, Zardari expressed interest in port development, fisheries, and strengthening trade and investment ties. The visit also coincides with Pakistan’s announcement of new transit routes linking Gwadar, a port in Pakistan, to the Iranian border.
Why It Matters: Zardari’s trip highlights the core challenge of CPEC 2.0: shifting from infrastructure buildout to commercial productivity. Pakistan is looking to Hunan for agricultural and industrial inputs and to Hainan as a model for port-led trade and logistics, aimed at making better use of existing CPEC infrastructure, including Gwadar. At the same time, new transit routes to Iran position Gwadar within a broader regional trade network, especially as instability near the Strait of Hormuz increases demand for alternative routes. Yet success will depend on whether these efforts translate into sustained investment, exports, and cargo flows, and not leave CPEC underutilized.
By Jie Gao, Research Associate on Foreign Policy and National Security, Center for China Analysis
Learn More: Read “The Electoral Equation: China’s BRI Investments Amid Political Transitions” by ASPI Director of South Asia Initiatives Farwa Aamer and Blake Berger.
3. China-India Defense Ministers Hold Talks as Tensions Ease
What Happened: China’s Defense Minister Dong Jun met with his Indian counterpart Rajnath Singh on April 28 on the sidelines of the Shanghai Cooperation Organization’s Defense Ministers’ meeting in Bishkek, Kyrgyzstan. The meeting addressed tensions along the Line of Actual Control (LAC) on the disputed Himalayan border, with both ministers calling for “peace and tranquility.”
Why It Matters: This was not the first meeting between Dong and Singh — they met in Qingdao in June last year, and before that in November 2024 — but the tone suggests some improvement in relations between the militaries of the two Indo-Pacific powers. Efforts to stabilize the Sino-Indian relationship have accelerated since the Trump Administration’s “Liberation Day” tariffs, and the two ministers also addressed the situation in the Middle East, where they share common interests. Dong’s position as a PLA Navy admiral, rather than in the ground forces that have faced off along the LAC over the past five years, could aid his efforts to engage more constructively with Indian counterparts. However, without a position on the Central Military Commission, his military and political authority is more constrained than that of his predecessors, such as Li Shangfu and Wei Fenghe.
By Andrew Chubb (@zhubochubo), Foreign Policy and National Security Fellow, Center for China Analysis
Learn More: Read “A New Triangle: The Interplay Between China and EU-India Relations” by CCA Senior Fellow Philippe Le Corre.
4. Beijing Tightens Political Control While Expanding Protections for Gig-Economy Workers
What Happened: Beijing recently issued new guidelines on strengthening the management and services for “new employment groups,” referring largely to gig-economy and flexible workers. The directive outlines two primary objectives: first, to ensure that these workers are guided by Xi Jinping Thought, reinforcing their alignment with the Party and deepening their political, ideological, theoretical, and emotional identification with it; and second, by 2027, to achieve comprehensive coverage of Party organizations within these groups, while gradually standardizing labor practices, improving working conditions, and more effectively safeguarding workers’ legal rights.
Why It Matters: As the lead-up to the 2027 Party Congress intensifies, Beijing is focused on ensuring that the country’s roughly 84 million gig-economy workers do not become a source of social instability. At the same time, authorities are increasingly concerned about what they see as weakening political and ideological identification among younger generations with the Party. As a result, the central leadership is reportedly paying greater attention to causes of declining patriotic consciousness among young people and signs of weakening ideals and convictions among young cadres. Youth accounted for approximately 26% of China’s population in 2025, underscoring the scale and urgency of this challenge.
By Lobsang Tsering, Senior Research Associate on Chinese Politics, Center for China Analysis
Learn More: Read “The 19 Percent Revisited: How Youth Unemployment Has Changed Chinese Society“ by CCA Fellow Barclay Bram.
5. Southern China Battles Extreme Rainfall
What Happened: On April 26, torrential rainfall struck Qinzhou, a city in Guangxi, southern China. Qinzhou authorities said the city’s meteorological station recorded over 270 millimeters of rainfall (about 10 inches) during a 24-hour period. The rain forced the evacuation of more than 200 residents, submerged vehicles, and caused waterlogging, as rescue crews were deployed to help those trapped in their homes. Rainfall of this magnitude typically occurs in mid- to late May, after the arrival of the summer monsoon.
Why It Matters: The rare timing and intensity of this downpour in southern China reinforces that climate impacts in the form of extreme weather are still occurring. With the monsoon season yet to start and the summer months still to come, China must continue to prioritize adaptation and resilience. Beyond policy, continued coordination across departments on emergency management and early warning is crucial to safeguarding communities and infrastructure.
By Taylah Bland (@Taylahbland), Fellow on Climate and the Environment, Center for China Analysis
Learn More: Read “Unpacking China’s New Headline Climate Targets” by CCA Senior Fellow Li Shuo and Fellow Kate Logan.