BEIJING DAILY - 25 FEBRUARY 2026
PRC Deploys Economic Coercion Against Japan Defense Sector; U.S.-ROK Alliance Friction Exposes China Policy Divergence; Germany Visit Signals EU Engagement Opportunity
Beijing Escalates Japan Economic Coercion with Defense-Linked Export Restrictions
China imposed export restrictions on 40 Japanese entities with defense industry ties, marking a significant escalation in its monthslong economic feud with Tokyo. This follows Japan's shift toward remilitarization and closer security alignment with the U.S. The move represents Beijing's willingness to use economic tools against a major trading partner over security concerns, potentially signaling broader willingness to deploy such measures.
U.S.-ROK Alliance Strains Surface Over China-Related Military Operations
The U.S. and South Korea engaged in rare public discord after American and Chinese fighter jets reportedly faced off near the Korean Peninsula. Seoul complained about U.S. drills conducted near China without prior coordination, exposing underlying tensions in the alliance over China policy. This friction reflects fundamental differences between Washington and Seoul on managing regional security dynamics with Beijing.
China Warns of Retaliation If U.S. Trade Probe Triggers New Tariffs
Beijing formally warned it will take "all necessary measures" if the U.S. uses its ongoing investigation into the 2020 trade deal to impose fresh tariffs. This comes as Trump signaled the probe would continue despite Supreme Court setbacks on previous tariff actions. The statement indicates China is preparing countermeasures and unwilling to make preemptive concessions ahead of expected Xi-Trump meetings.
German Chancellor Merz Softens China Rhetoric in Pre-Visit Signals
German Chancellor Merz omitted the term "systemic rival" when outlining his China policy principles before his first official visit to Beijing, departing from his predecessor's framing. Xi Jinping will meet Merz during the visit, with both sides emphasizing mutual economic benefits. This suggests potential recalibration of EU-China relations amid broader Western policy uncertainty.
DRIVING THE DAY
SUMMARY: Beijing escalated its economic pressure campaign against Tokyo with export restrictions targeting 40 Japanese defense-linked entities -- marking the sharpest tool deployed in the monthslong bilateral feud and demonstrating willingness to weaponize trade against major partners over security concerns. Separately, rare U.S.-South Korea public discord over American air operations near China exposed fundamental alliance tensions on managing Beijing, with Seoul objecting to U.S. drills that prompted Chinese fighter responses. Chancellor MERZ's omission of "systemic rival" rhetoric ahead of his Beijing visit suggests potential recalibration of EU-China relations amid broader Western policy uncertainty. Commerce Ministry warned of retaliation if ongoing U.S. trade investigation triggers new tariffs, signaling Beijing's unwillingness to make preemptive concessions ahead of expected Xi-Trump meetings. END SUMMARY.
