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The highlights this week: China shows off its relationship with North Korea and Russia at a military parade, South Korea navigates a diplomatic dilemma, and the forecast for China’s electric vehicle market cools down.

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Beijing Shows Off Partners at Parade

China’s celebration of the 80th anniversary of its victory over Japan in World War II last week paraded both new weapons and old geopolitical allies.

North Korean leader Kim Jong Un was given a prominent place at the event alongside Russian President Vladimir Putin and Chinese President Xi Jinping. In a hot-mic moment, as Putin and Xi discussed the scientific prospects for extended lifespans, another voice (likely Kim) could be heard laughing in the background.

North Korea is China’s only remaining formal treaty ally, but last week’s events demonstrated a level of closeness not previously shown to Kim or to other North Korean leaders since the days of Kim’s grandfather, Kim Il Sung.

The display prompted U.S. President Donald Trump to post on Truth Social that the three leaders were conspiring against the United States. But Xi may have been doing Putin a favor: China doesn’t particularly need North Korea right now, but Russia does. North Korea is supplying both arms and men to Russia’s war effort in Ukraine, while China’s support remains restricted to rhetoric and non-lethal aid.

Beijing has grown increasingly close to Pyongyang in recent years. A decade ago, North Korea was broadly unpopular in China, but today 76 percent of the Chinese public say that they see North Korea as a friend. Even if people are just saying what they think the government wants to hear, it’s telling.

After all, China may not need North Korea now, but a fellow nuclear state could be an essential strategic partner in any future flash point with the United States, as Trump seemed to intuit.

Kim’s prominence also puts the lack of other significant attendees in perspective. The turnout for the parade was surprisingly scant—a collection of leaders mostly from Southeast Asia, Central Asia, and Iran stayed in China for the event after the Shanghai Cooperation Organisation (SCO) summit in Tianjin; the leaders of India, Egypt, and Turkey all departed.

Though Xi did the rounds of obligatory handshakes with his guests, the parade was not the harbinger of a new world order, but a display of the long-standing China-Russia relationship.

And even the SCO’s significance is often overstated; for the leaders who attend, it’s a hedging of bets and a signaling to the United States that they have options.

China succeeds in building diplomatic relationships partly because it doesn’t ask that much of its partners. In contrast, the United States (Trump’s administrations excluded) has historically wanted its partners to sign up to a financial and political rules-based order and demanded, however irregularly and imperfectly, adherence to human rights norms.

Under Trump, human rights are off the table, but erratic demands for compliance ranging from the protection of far-right politicians to serving the economic interests of Trump and his political allies come frequently.

China, on the other hand, asks that its partners stay silent about its human rights abuses, give it political control over the Chinese diaspora, and avoid cooperating militarily with the United States in Asia.

The relative mildness of Beijing’s asks makes them easy to accept—especially for autocrats—and means that they don’t always stand in the way of maintaining strong ties with the United States or taking a tougher stance with Beijing on regional issues.

For instance, Vietnamese President Luong Cuong attended last week’s parade, but Vietnam is still engaging in an island-building contest with China in the South China Sea. Some of the attendees, such as the leader of Myanmar’s beleaguered ruling junta, badly need China on their side. Others are just being good neighbors—in the hope that Beijing will return the favor.

What We’re Following

South Korea’s dilemma. One country that is currently a target of Chinese ire is South Korea, which has moved closer to Washington in recent years—only to be backstabbed by tariffs in Trump’s second term. In an effort to win back favor with Trump, South Korea pledged to invest $350 billion in the United States, which made last week’s events come as a shock.

Last Thursday, U.S. immigration officials arrested nearly 500 South Korean workers after a raid on a Hyundai facility in Georgia. This is front-page news in South Korea and has sparked fury among the public and demands for recompense even from traditionally pro-U.S. conservative politicians.

As a result, South Korea and Japan are weighing their options for mutual security against a chaotic United States and an uncomfortably close China. At the Seoul Defense Dialogue, which kicked off this week, Japanese Defense Minister Gen Nakatani delivered a speech calling to boost bilateral diplomacy and cooperation.

It was the first visit by a Japanese defense minister to South Korea in a decade. Japan-South Korea reconciliation, which was a priority for former U.S. President Joe Biden, faces considerable opposition in both countries. That it seems to be proceeding anyway speaks to the seriousness of the moment.

China’s new weapons. Beyond geopolitical relationships, what was actually on show at the military parade in Beijing? As usual, missiles were widely displayed, with the implicit message that they could be used against the United States in a regional contest. Russia’s war in Ukraine has also focused the Chinese military’s attention on drones, with an emphasis on artificial intelligence (AI)-guided systems and anti-drone defense systems.

Perhaps the most dramatic unveiling was the LY-1, China’s entry into the expanding race for directed energy weapons. This category of weapons was an infamous boondoggle for decades, but recent advances make them plausible battlefield contenders in the near future.

Details on the LY-1 are scant, as is common with new Chinese technology, but it appears to be designed for both naval mounting and potential land use.

FP’s Most Read This Week

Tech and Business

Chip tug-of-war. There is little end in sight to the four-way contest among the United States, China, U.S. chipmakers, and Chinese AI companies. Washington doesn’t want Chinese firms getting advanced chips—even the modified, export control-compliant versions—unless the White House gets a cut.

Ironically, Beijing doesn’t want Chinese firms getting these chips either, because dependence on U.S. supplies is preventing the development of a Chinese domestic chip ecosystem. China has been pressuring firms not to buy U.S. chips, but the firms aren’t playing ball, according to a Reuters report.

This is partially because even the upcoming generation of Chinese-made chips is double the price for the same computing power as the modified U.S. chips. Intermediaries and third parties are already common players in China’s chip acquisition process; now firms will have to try to dodge scrutiny from two separate governments.

EV market saturation? There are some signs that China’s red-hot electric vehicle (EV) market is finally cooling down. This has been a government goal for a while, following years of price wars that produced happy consumers and considerable innovation but created a potential economic quagmire.

Chinese manufacturers, sometimes selling cars at a loss but making up for profits in overall volume, have been skipping payments to suppliers, leaving a dangerous trail of debts. While growth continues, it’s slowing down to 2024 levels for now. EV giant BYD has cut its own forecasts.

At this point, Chinese firms have already won the global EV race by a length and can afford to take a more cautious approach.