China's messaging on Iran-Israel, Taiwan restricts Chinese firms, and Labubu dolls

Indian Express

20-06-2025

Last Friday (June 13), Israel launched strikes on Iran under 'Operation Rising Lion', claiming that Iran is in the process of building nuclear weapons. It attacked key nuclear facilities and military generals, while Iran denied reports of weapon-building and vowed retaliation. More than 600 Iranians and 24 Israelis have died in the attacks so far.
What has added to the uncertainty is the United States' stance. US President Donald Trump recently spoke of his country's involvement, saying, 'Based on the fact that there's a substantial chance of negotiations that may or may not take place with Iran in the near future, I will make my decision whether or not to go within the next two weeks.'
China, meanwhile, has called for de-escalation while condemning Israel's actions, saying it supported 'Iran in safeguarding its national sovereignty, defending its legitimate rights and interests, and ensuring the safety of its people.' This is in line with its reactions to events unfolding in the Middle East since Hamas launched attacks on Israel on October 7, 2023.
In last week's tracker, we wrote about discussions on a China-US trade deal, but this week, the geopolitical rivalry between the countries touched on AI and semiconductors. Taiwan, the island on which China lays territorial claims, restricted dealings with Chinese tech companies.
Finally, a Chinese-origin company's toy has taken social media by storm in recent days, with Chinese state media websites publishing several stories on it.
At a press briefing on Thursday (June 19), a Foreign Affairs Ministry spokesperson said, 'The conflict continues to escalate, not only wreaking havoc on the people in both countries, but also gravely hurting peace and stability in the region and beyond. China is deeply concerned.'
He said China called on the parties to the conflict, 'especially Israel', to act in the larger interest of the region, stop the conflict immediately, and de-escalate the situation.
UPSHOT: China has important economic and strategic interests in the region. It buys 90% of Iranian oil exports, and is Israel's second-largest trade partner. In 2023, it helped broker a detente between two regional rivals — the Sunni-majority Saudi Arabia and the Shia-majority Iran.
The next year, it helped 14 Palestinian groups, including Hamas, sign a declaration in Beijing on 'pledging to end division and strengthen unity' among them. These developments led to an expectation of China emerging as a major actor in the region, something usually done by the likes of the United States.
Post-October 7, China has acted in a limited capacity. It reportedly engaged in discussions with the Houthis of Yemen after they attacked Western ships passing through the Red Sea.
On the whole, however, it has exercised restraint. Several reasons have been cited for this, including its varied economic interests in the region, which would benefit from peace, and a general lack of interest in engaging in military interventions. Regional actors may also see China as a relatively new entrant in the Middle East's geopolitics.
That said, it has backed certain causes. Shortly after the Hamas attacks, a spokesperson described China 'as a friend to both Israel and Palestine,' while stressing support for a 'two-state solution and establishment of an independent State of Palestine.' Its historical support for the Palestinian cause and the US support for Israel have driven this stance.
Taiwan has added China's Huawei Technologies Co. and the chipmaker Semiconductor Manufacturing International Corp. (SMIC) to its entity list, barring the island's firms from doing business with them without a licence. The list also includes other proscribed organisations like the Taliban and al-Qaeda, and companies from Iran and Pakistan, Reuters reported.
SMIC is China's largest chipmaker and has 'ramped up investment to expand production capacity and strengthen China's domestic semiconductor capability in the face of sweeping U.S. export controls,' the report added.
UPSHOT: Even as Artificial Intelligence is being touted as the next big disruptor, scepticism has been raised around its actual abilities. What is clear, however, is that it will remain a flashpoint in US-China relations.
Taiwan, which is another flashpoint given China's territorial claims and the US's historical support for the island, is the world's largest manufacturer of advanced chips. The recent move was its first public action on semiconductors since President Lai Ching-te said in April he would address concerns from Washington about export controls, Bloomberg reported.
Whether it stems directly from discussions with the US is unclear. China has criticised the decision as 'maliciously blocking and suppressing China.'
In the past, the US has restricted Huawei over security concerns. Since then, the company has launched new smartphones and AI chips elsewhere, with success. One such phone, released in August 2023, is the Mate 60 Pro. The SMIC is believed to have manufactured an advanced chip that powers the phone.
Concerned over its capabilities despite US restrictions, the Commerce Department sent dozens of letters to US suppliers of SMIC, suspending permission to sell to its most advanced plant, Reuters had reported last year.
In the last few weeks, social media has been abuzz with popular celebrities, including singer Rihanna, K-pop star Lisa and Indian actor Ananya Panday, posting photos of somewhat strange-looking, small figurines.
Beijing-based toy brand Pop Mart launched these 'Labubu' dolls in collaboration with Hong Kong artist Kasing Lung. He created 'The Monsters' series for the brand, featuring elf-like dolls with a vinyl head and furry bodies, often with a mischievous smile.
He said he was inspired by Dutch fairy tale characters, having moved to the Netherlands at a young age. In 2015, he illustrated a series on them and the dolls were launched soon after. The collaboration with Pop Mart in 2019 sparked the craze domestically, which spread to Southeast Asian countries, and then the rest of the world. They are also sold as bag accessories.
UPSHOT: Chinese state media websites often indicate the Communist Party government's perspectives on issues. China Daily published at least four stories on its website just this week about the dolls. One described people queuing at stores in Australia and the UAE.
Another People's Daily article said, 'It is rare for a comic or toy IP to break the culture wall and be embraced by both Asian cultures as well as mainstream Western pop stars and sports stars, according to Jessie Xu, an analyst at Deutsche Bank, which significantly raised its target price for Pop Mart shares on the strength of Labubu's performance.'
The Financial Times reported that Pop Mart's market capitalisation stands at around $40 trillion today, more than that of Hasbro (with games like Monopoly and Play-Doh) and Mattel (Barbie and Hot Wheels) combined. Its shares have 'soared almost sixfold in the past year on the back of Labubu fever.'
An important part of the dolls' appeal is how they are sold in blind boxes – in packages where the buyer doesn't know about the exact item they've purchased until it has been opened. However, at least one state media report raised concerns about promoting overconsumption through such sales methods. Soon after, CNBC reported that Pop Mart's Hong Kong-listed shares fell more than 5%.
Overall, state media framed the Labubu sales as a positive sign, touting it as a reflection of 'China's pro-consumption policies' and that 'Greater openness is also fueling the cultural exchange crucial to IP growth'.
Rishika Singh is a Senior sub-editor at the Explained Desk of The Indian Express. She enjoys writing on issues related to international relations, and in particular, likes to follow analyses of news from China. Additionally, she writes on developments related to politics and culture in India.
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