Welcome to Foreign Policy’s China Brief.
The highlights this week: A bribery scandal in New York prompts scrutiny of Chinese influence operations, Beijing prepares for a military parade, and Nvidia pauses production of the H20 chip.
Bribery Scandal Highlights Chinese Influence
Last week, Winnie Greco—then a Chinese American advisor to New York Mayor Eric Adams and the city’s former director of Asian affairs—made headlines for handing a reporter an envelope of cash in a bag of potato chips in a seeming bribery attempt.
There has since been intense scrutiny on Chinese influence efforts in New York, home to the highest number of ethnic Chinese outside of Asia. On Monday, the New York Times published an extensive investigation into how Beijing seeks to shape politics in the city, ranging from control of decades-old “hometown associations” to sabotaging the careers of pro-Taiwanese politicians.
The recent incidents recounted in that investigation are hardly the first time that Chinese influence has shown up in New York local politics. But why does Beijing put so much effort into winning municipal elections with ultimately little role in setting foreign or trade policy?
Some of it is habit. Chinese official life involves interference, monitoring, and control of civil society—including live theater, house churches, village elections (now abandoned), and everything in between.
China sees its diaspora, especially those born in the mainland, as falling under its authority, which stems in part from ethnonationalism, but also a long-standing fear that dissidents abroad could spur rebellion at home. Controlling Chinese-language media overseas is a particular priority; the esoteric religious movement Falun Gong, one of Beijing’s main bugbears, has a strong presence in U.S. media.
However, there is an element of the tail wagging the dog. Ambitious people in overseas Chinese associations want to curry favor with the Chinese Communist Party. As China has grown more ideologically rigid under President Xi Jinping, more members of the diaspora have snitched on their local rivals to cause trouble for them back in the mainland.
Then there is the long struggle with Taiwan over recognition—one that China largely won long ago but which remains an obsession. Even though only a handful of countries formally recognize Taiwan, any hint of informal recognition spurs panicked and furious reactions from the Chinese government.
Diplomatic staff who fail to act on a perceived slight may find themselves stabbed in the back by rivals or deputies alike. Thus they end up taking action: whether that means fighting over a cake at a party in Fiji, ripping pages out of a conference booklet in Portugal, or working to defeat a pro-Taiwan state senator in New York.
There are more conventional political goals at play, too. Ethnic Chinese groups might not have much weight on the U.S. national stage, but they can seek to represent the Chinese community to local politicians. Greco, for instance, previously steered Adams away from attending events specifically for the Taiwanese community.
And whether for political influence or espionage, people recruited at a lower level can rise to higher office. When a Chinese agent targeted U.S. Rep. Eric Swalwell, for example, he was a rising but still local politician in California. Swalwell broke off all ties with the agent after the FBI alerted him, and he was cleared of any wrongdoing.
There is always a danger of legitimate concerns about Chinese influence operations blurring over into racism. But Chinese Americans deserve to decide their own politics, without Beijing’s interference.
What We’re Following
Red envelopes. The Greco affair and subsequent reporting on the distribution of cash to reporters from Chinese-language news organizations during Adams rallies highlighted a common phenomenon in China: the bribing of reporters.
Greco’s lawyer told the City, “In the Chinese culture, money is often given to others in a gesture of friendship and gratitude.” This is a misrepresentation. People give money to children at Spring Festival or to couples at weddings, but when they give it to people they barely know—often in the same red envelopes—it’s a bribe.
In China, such bribes are a routine part of how organizations deal with reporters, where it functions as institutionalized pay-for-play. It’s both a reward for covering an event and sets the expectation that the coverage will be positive.
If you attend a press event in China, red envelopes with cash—typically several hundred yuan, or anything from $50 to $100—will be placed on or under your seat. Chinese reporters know this is a form of bribery, but it’s approved by superiors. That creates a dilemma for Chinese-language reporters in the United States, where the practice still happens but formal policy is to avoid taking the red envelopes.
To be clear, though, one would never usually receive a red envelope in a bag of potato chips.
Military parade. Beijing is preparing to host a military parade next week, in celebration of the 80th anniversary of China’s victory over Japan in World War II. It will be the biggest such event since 2019. The parade offers a chance to show off China’s ever-expanding military arsenal, this time including several weapons capable of striking the United States.
Next week’s event is also important because it comes after months of military purges, which have stirred up rumors in diaspora circles about the Chinese military’s supposed unhappiness with Xi. As usual, these strike me as unsourced wish-casting, though it’s noticeable that some of the rumors have made it back to the mainland.
For Xi, being saluted by ranks of soldiers thus sends an important message of control.
FP’s Most Read This Week
- Trump Has No Idea How to Do Diplomacy by Stephen M. Walt
- Why the Donbas Matters to Putin So Much by John Haltiwanger
- Why Steve Witkoff Is Trump’s Master of Disaster by Christian Caryl
Tech and Business
H20 suspicions. Earlier this month, Nvidia agreed to give the U.S. government an unprecedented 15 percent of its artificial intelligence chip sales to China in exchange for export licenses. This prompted U.S. President Donald Trump to promise to seek similar arrangements from other firms, including Intel, which agreed to a deal last week.
As mentioned in previous China Briefs, there is a long-running debate over Nvidia’s H20 chip, which was being used to get around U.S. export restrictions. Now, the Chinese government has become even more suspicious of the H20, prompting harsher warnings for Chinese firms not to use the chips, even though they want them.
Nvidia has since paused production of the H20 and may be working on another chip for the Chinese market, but that is unlikely to win approval from Beijing if the chip is seen as an arm of U.S. government ambitions. The end result may be what many experts warned: China’s attempts to build advanced domestic chip infrastructure getting a huge boost.
Evergrande delisted. The once-colossal Chinese real estate firm Evergrande has been delisted from the Hong Kong stock market, a reminder of the slow-rumbling property crisis that continues to undermine the Chinese economy.
Evergrande was once anticipated to catalyze China’s “Lehman Brothers moment,” where the collapse of a key institution causes a widespread and immediate disaster, but one of the advantages of Beijing’s level of market and media control is that potential panics can be defused.
The problem is that without decisive moments of failure, simmering crises can poison the investment atmosphere for years to come. Most Chinese families’ financial security is built around their real estate holdings; with those stagnating, there is little appetite for any other risk.