GOOD MORNING FROM LONDON
2 JUNE 2026. CHINA POST #623
CHINA AND THE FOREIGN MEDIA
————————————————-
EXTRACTS
#1 CHINA – U.S. – TAIWAN. A NEW ANGLE
#2 CHINA’S YUAN SOARS IN INTERNATIONAL PAYMENTS
#3 CHINA – JAPAN RELATIONS TAKE A DIVE
—————————————————————
- CHINA – U.S. – TAIWAN. A NEW ANGLE
NIKKEI ASIA
“In a big diplomatic moment, President Xi Jinping last week hosted U.S. counterpart Donald Trump in Beijing, honouring him as a state guest at the first Chinese-U.S. summit in the capital in nine years.
But the sides could not hold a joint press conference to demonstrate at home and abroad the results of Xi’s “major power diplomacy.” Even worse, no written agreement was jointly announced.
It was not until Sunday in the U.S. — two days after Trump returned to Washington — that the White House released a fact sheet about the president’s China trip, outlining what it calls “historic deals” that Trump negotiated with Xi.
Such a significant delay is unusual.
In a big surprise to many, the U.S. fact sheet makes no mention of Taiwan, which Xi described as “the most important issue in China-U.S. relations” during his talks with Trump. The U.S. has left no evidence about Taiwan in the form of a document as it strives to control risk.
GRAHAM PERRY COMMENTS;-
Consider the following;- no joint press communique; no written agreement; a two day delay in publication of U.S. fact sheet; no mention of Taiwan in U.S. fact sheet and Trump remains tight-lipped about Taiwan throughout his visit. And yet Xi described Taiwan as “the most important issue in China- US relations” during his talks.
How to explain the glaring gap between the two sides? There is an explanation – not yet featuring in media comment. Consider the following;-
China’s position;- Taiwan is a Province of China. It belongs to the PRC and Xi’s #1 International Goal is the return of Taiwan to China.
The U.S. position – Taiwan is part of China (See the Nixon Shanghai Agreement of February 1972.) But the US reserves the right to intervene on Taiwan’s behalf if China uses force to re-assert control.
The world has moved on since 1949 when the KMT fled to Taiwan and presented themselves to the world as the Republic of China even securing a place on the UN Security Council alongside the world’s major powers. Today the new China is strong, confident and militarily focused on maintaining territorial integrity – whether it be India, Tibet, Xinjiang, Japan or Taiwan.
The U.S. position is undergoing change. The shortest geographical line from the U.S. mainland to Taiwan is approximately 7,619 miles. The shortest geographical line from the China mainland to Taiwan is about 100 miles.
The U.S. Joint Chiefs of Staff, the Pentagon, the West Point Academy, Harvard University all know the truth. They can pretend in public statements but the reality is that they know that a military campaign against China over Taiwan would end in tears and failure notwithstanding large U.S. naval presence in the Far East. But that is not the whole story. There is a new factor – big tensions between Trump and Taiwan’s producers of semiconductors so rarely mentioned in the media.
Trump resents the “hollowing out” of the U.S. It transferred key economic control of the country to – amongst others – Taiwan. The Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest dedicated contract chip manufacturer, commanding over 70% of the global semiconductor foundry market. It serves as the primary manufacturer for tech giants like Apple, Nvidia, and AMD.
Here is the key issue; – the U.S. has always assumed that TSMC and the Taiwan semiconductor industry are committed to the U.S. They were but recent tensions have surfaced. TSMC, in an attempt to woo Trump, has invested almost $100 billion towards the reconstruction of the U.S. domestic semi-conductor industry but TSMC has another option – China. And here the protected status of China’s 800+ Billionaires comes into play. No public comment has yet been made about conversations between China’s leaders and Taiwan’s financial muscle men but they will be taking place. Big Business in Taiwan knows that China today is not pursuing the Socialist Egalitarianism of the Gang of Four but the Economic Prosperity of Xi Jinping. Billionaires in Taiwan watch and observe closely the protected status of Billionaires in China. China is preparing the ground for a reconciliation between the Communist Party of China and the Big Business of Taiwan. Trump knows which way the wind is blowing. He cannot rely on Taiwan Big Business to always follow the U.S. The prospect of China-Taiwan reunification looms more closely,
The U.S. remains China’s #1 opponent. But China has no intention to demolish or destroy the U.S. That is not on China’s agenda. China’s goal is clear – an end to U.S. threats. Conciliation and Co-operation – Yes. Missiles and Bombs – No
——————————
- CHINA’S YUAN SOARS IN INTERNATIONAL PAYMENTS
NIKKEI ASIA
“Use of the yuan to pay for crude oil and other goods and services has soared, with Iran and Russia turning to China’s currency to sustain dollar-free trade.
Yuan-based trade settlements rose by half in March from the previous month on China’s Cross-border Interbank Payment System (CIPS), reaching 1.46 trillion yuan ($214 billion), according to Chinese data provider Wind. That was triple the level of March 2021, continuing a years-long upward trend.
Yuan payments continued to swell in April, with Chinese media reporting that CIPS hit a single-day transaction record early in the month.
After the U.S. and Israel began strikes on Iran in February, Tehran moved to shut the Strait of Hormuz and demand tolls for tankers and other vessels wanting to pass the chokepoint.
Ships from China, Russia, India and other countries that Tehran regards as friendly nations are believed to have been allowed to transit the strait.
The tolls are priced in cryptocurrency and yuan. Having been largely frozen out of the dollar-based international banking system by U.S. sanctions, Iran has little choice but to rely on China’s currency.
GRAHAM PERRY COMMENTS;-
NIKKEI ASIA reports that Iran is not alone in using the yuan. Chinese media report that the Saudi Arabian government saw the share of oil transactions settled in yuan reach 41% in March. Around the same time, two of the country’s major state-owned banks joined CIPS.
Russia is also relying on the yuan as it increases trade with China beyond the reach of Western sanctions. Major Russian banks were excluded from SWIFT, the financial infrastructure behind much of the world’s cross-border transactions, in 2022 after Russia’s full-scale invasion of Ukraine.
Transactions between Russia and China are almost totally done in rubles and yuan, Russian President Vladimir Putin told China’s state-run Xinhua News Agency in a written interview in August 2025.
The increased demand for China’s currency can be seen in exchange rates. The yuan’s exchange rate against the dollar has risen compared to where it stood before the Iran war. By contrast, other Asian currencies, including the yen and won, have weakened on the view that rising oil prices will hurt their national trade balances.
China’s effort to internationalize the yuan and expand non-dollar payment networks extends to the digital yuan, issued by the People’s Bank of China. Since 2024, China has begun cross-border payment pilot programs with such countries as Saudi Arabia and the United Arab Emirates.
These channels let companies send money to their business partners in digital yuan instead of dollars through commercial banks and the central bank for trade and financial settlements.
But the yuan’s footprint in international trade is still small. According to SWIFT, the yuan’s global share as a settlement currency was 3% in March, compared to the dollar’s 51%. The yuan also lagged the euro, British pound and the yen. But China’s five-year plan economic starting in 2026 includes a goal of expanding the use of the yuan in international trade and investment.
Toru Nishihama, chief economist at Daiichi Life Research Institute, said, “the yuan’s share is gradually increasing, and the internationalization of the yuan and the movement away from the dollar will also accelerate.” History is about trends. The rise of the yuan like the rise of China is a significant historical development. Small today but big tomorrow.
———————————-
- U.S. – JAPAN RELATIONS GROWING FRAIL
SOUTH CHINA MORNING POST
“In the weeks leading up to Donald Trump’s second inauguration, conservatives in Japan were delighted and hopeful that his return would usher in robust economic growth, new trade opportunities and a stronger security relationship with Tokyo.
Barely 18 months later, many of those same conservatives admit to being shocked at the state of the bilateral relationship and the mounting global uncertainties the US president’s policies have produced.
For some of his diehard supporters in Japan, the conflict he started in Iran was the final straw. Among them is Ken Kato, who owns a company in Tokyo that sells religious items.
“Everything that is going on right now is worrying because the decisions he is making have a direct impact on people in Japan,” Kato said.
“Petrol prices have risen, but not too much, although that could change. But the price of everything else has gone much higher, especially food. This is very worrying for ordinary people.
An ongoing public opinion poll on Japan’s Yahoo News site suggests such anxieties are widespread. Only 5.9 per cent of Japanese respondents said the Trump administration’s policies had been “very good”, while 83.7 per cent called them “very bad” and 5.8 per cent “quite bad”.
Sumie Kawakami, a social sciences lecturer at Yamanashi Gakuin University, said the proportion of Japanese people who viewed Trump’s policies as negative was likely even higher than the survey indicated.
GRAHAM PERRY COMMENTS;-
China-Japanese relations have always been sensitive – now more so than ever before. To put matters in perspective there are many historians, including Chinese historians – who hold that World War II began, not with Hitler’s annexation of Poland, but with Japan’s incursion into China 1931. And lodged in the Chinese popular memory is the Rape of Nanjing when Japanese soldiers of the Imperial Japanese Army perpetrated the mass rape and murder of approximately 300,000 Chinese civilians, noncombatants, and prisoners in Nanjing, the capital of the Republic of China. Against this background it was remarkable that during my first visit to China in 1965 the hotels of Beijing – there were only four – were full of Japanese businessman. China knew that the future depended on reconciliation – the brutality of World War II notwithstanding.
Today the China-Japan rapprochement is at risk. Tensions have surged because of suggestions from the new Japanese Prime Minister, Sanae Takaichi, that Taiwan has a right to independence. If there is one No-Go area in Chinese affairs it is even the faintest suggestion of independence for Taiwan. You recall China’s reaction to Nancy Pelosi’s 2022 visit to Taiwan.
The Chinese leaders are not headstrong, intemperate or off-the-cuff; they are mature, experienced and analytical. They are not a soft touch. The new Japanese PM takes risks if she adopts a confrontational approach. But there is a context – China’s relations with major foreign powers do blow hot and cold. There is peace and constructive engagement on the one hand and heat and genuine tension on the other hand. It is the rhythm of the conduct of international affairs but there are always underlying trends and today the key international power play is China post-Seoul 2025. Without doubt the October 2025 Trump/Xi meeting in South Korea marked a significant change in the balance of power between the U.S. and China. The U.S. had met its moment.
The warning issued in Anchorage in March 2021 by State Councillor Yang Jiechi to Secretary of State Blinken was also a moment in time. On that occasion Yang warned Blinken that the U.S. should not talk down to China. The two meetings at the two locations were notice to the world that China was now a major power. The balance of power had changed. China is now a major power – witness the large number of nation’s leaders – Trump, Macron, Starmer, Modi and Carney to name just a few – who have been in Beijing in recent weeks. It is against this background that China will warn Japan not to embrace Taiwan. Takaichi will back off – a confrontation with China is not in Japan’s long term interests
——————————–
IN THE NEXT ISSUE THE FOCUS WILL BE ON THE PROCESS THAT LED JACK PERRY TO LEAD THE FIRST TRADE DELEGATION TO CHINA IN 1953.
HOW? WHY? WHO? WHEN?
THIS WAS NOT “A WHIM” OR “A MERE GOOD IDEA” OR “A ONE-OFF VENTURE”.
THIS 1953 VISIT WAS PLANNED, PREPARED AND PREMEDITATED. ON BOTH SIDES – CHINA AND THE UK – THERE WERE MEETINGS, AGENDAS, LIST OF ITEMS TO BE INCLUDED. MORE IMPORTANT WAS A REALISATION ON THE CHINESE SIDE THAT THE MEMBERS OF THE ICEBREAKER MISSION NEEDED TO BE MADE AWARE OF THE LONG-TERM SIGNIFICANCE OF THE MISSION. CHINA WAS HERE TO STAY. IT WOULD CONSOLIDATE, GROW AND DEVELOP. LINKS ESTABLISHED IN 1953 WERE TO LAST TO THE PRESENT DAY AND BEYOND.
THE INITIATIVE WAS TAKEN BY CHINA – BY DR JI CHAODING. IT WAS PICKED UP BY JACK PERRY IN THE UK AND THE BOND BETWEEN THE TWO (JI AND PERRY) IS AT THE HEART OF THE STORY OF BRITISH TRADE RELATIONS WITH THE NEW PEOPLE’S REPUBLIC OF CHINA.
YES IT IS PERSONAL; – JACK WAS MY FATHER. AND I FEEL CONSIDERABLE FAMILY PRIDE. NO QUESTION. BUT THE STORY IS ABOUT MUCH MORE THAN TWO MEN – IT’S ABOUT CHINA AND THE U.K AND THE LONG TERM DEVELOPMENT OF INTERNATIONAL RELATIONS.
NIXON’S VISIT TO CHINA IN 1972 WAS MOMENTOUS WITH FAR REACHING INTERENATIONAL CONSEQUENCES. BUT JACK PERRY’S ICEBREAKER VISIT WAS OF GREATER IMPORTANCE. WHY? BECAUSE IT WAS THE FIRST. CHINA WELCOMED FOREIGN BUSINESSMEN TO CHINA. IT BROKE THE ICE. IT ESTABLISHED A LINK. CHINA HAD COME IN FROM THE COLD AND INCREASINGLY WOULD OCCUPY A LEADING ROLE IN WORLD AFFAIRS.
NIXON’S VISIT COULD NOT HAVE OCCURRED IN 1972 IF THERE HAD BEEN NO ICEBREAKER DELEGATION IN 1953. IT WAS THAT IMPORTANT.
GRAHAM PERRY
2 JUNE 2026
