BEIJING DAILY - 27 FEBRUARY 2026
PRC Escalates Pakistan-Afghanistan Mediation Amid Border Crisis; Eases Trade Pressure on Canada While Hardening Panama Stance; Two Sessions Messaging Prioritizes Internal Stability
Pakistan-Afghanistan Border Conflict Escalates with Airstrikes on Kabul
Following intense border clashes that killed over 130 Afghan and 40 Pakistani troops, Pakistan launched airstrikes on Kabul and other Afghan cities on February 27. Pakistan's defense minister declared "open confrontation" with the Taliban government, accusing Afghanistan of becoming "a colony of India" and exporting terrorism. China's MFA expressed deep concern and is actively mediating, requesting both countries ensure safety of Chinese personnel and projects.
China Eases Trade Restrictions on Canada with Tariff Removals
China announced it will drop tariffs on Canadian rapeseed meal and lobsters, continuing a trade thaw that began after Prime Minister Carney's January visit to Beijing. This follows the broader pattern of Beijing selectively easing economic pressure on partners while maintaining coercive measures against others. The move suggests China is prioritizing economic pragmatism with secondary powers amid U.S. tensions.
Next Ukraine Peace Talks Set for Abu Dhabi in Early March
Ukrainian President Zelensky confirmed the next round of trilateral peace negotiations will occur in Abu Dhabi in early March, following Geneva discussions between U.S. and Ukrainian teams. Ukraine's National Security Council secretary noted talks covered security guarantees, economic mechanisms, and reconstruction funding. Russia continues parallel economic track discussions, though Moscow has not publicly confirmed attendance at the Abu Dhabi round.
Chinese AI Companies Dominate Token Usage Rankings, Ending U.S. Lead
China's MiniMax and Moonshot have topped global AI token usage rankings, marking the first time Chinese firms have displaced U.S. companies from the leading positions after a year of American dominance. Separately, Moore Threads announced its flagship AI chip achieved full compatibility with Alibaba's latest Qwen3.5 models. These developments signal accelerating progress in China's AI self-sufficiency efforts despite U.S. export controls.
DRIVING THE DAY
SUMMARY: Beijing deployed urgent diplomatic interventions on 26-27 February as Pakistan launched airstrikes on Kabul following border clashes that killed over 170 personnel, with Foreign Ministry explicitly demanding both governments protect Chinese nationals and Belt and Road projects—language signaling acute concern over CPEC security exposure. The mediation efforts contrast sharply with Beijing's firm warning to Panama on 27 February that China will "resolutely safeguard" Hutchison Whampoa's port interests after Panamanian President MULINO suggested no retaliation would follow the company's Canal exit. Meanwhile, China announced tariff removals on Canadian rapeseed meal and lobsters on 26 February, continuing selective trade normalization with secondary powers while maintaining economic coercion against Japan and hardline positions toward Washington. State media overwhelmingly focused on Two Sessions procedural preparations and domestic economic messaging, with notably muted external confrontation rhetoric—a pattern suggesting tactical restraint ahead of the 3 March NPC opening. Chinese AI firms MiniMax and Moonshot topped global token usage rankings for the first time, ending a year of U.S. dominance, while Moore Threads achieved full Alibaba Qwen3.5 compatibility—developments signaling accelerating indigenous capability despite export controls. END SUMMARY.
PRC Leadership & Diplomacy—Emergency Mediation on Pakistan-Afghanistan Reflects Belt and Road Vulnerability
Beijing issued unusually detailed and urgent statements on 26-27 February regarding escalating Pakistan-Afghanistan border violence, with Foreign Ministry Spokesperson MAO Ning confirming China is "actively mediating" through its own channels and working through embassies in Islamabad and Kabul. Pakistan launched airstrikes on Kabul and other Afghan cities on 27 February after border clashes killed over 130 Afghan and 40 Pakistani troops on 26 February. Pakistani Defense Minister declared "open confrontation" with the Taliban government, accusing Afghanistan of becoming "a colony of India" and exporting terrorism.
MAO's statement went beyond standard diplomatic formulations by explicitly demanding both governments "ensure the safety of Chinese personnel, projects, and institutions"—language reflecting acute concern over exposure of China-Pakistan Economic Corridor infrastructure and Chinese nationals working in both countries. The detailed acknowledgment of embassy-level diplomatic work suggests Beijing views the conflict as immediate threat to Belt and Road investments rather than routine regional instability. People's Daily carried brief coverage without inflammatory commentary, maintaining measured tone consistent with China's self-positioning as responsible mediator rather than partisan actor.
The mediation effort occurs as Beijing simultaneously hardened its position toward Panama on 27 February. Following Panamanian President MULINO's public suggestion that China would not retaliate over Hutchison Whampoa's withdrawal from Panama Canal port operations, MAO stated China's position is "clear" and Beijing "will resolutely safeguard the legitimate rights and interests of enterprises." The formulation employs standard PRC diplomatic language for non-negotiable red lines—"resolutely safeguard" (坚决维护)—signaling Beijing views the port issue as politically-motivated interference with state-owned enterprise interests rather than routine commercial decision. The contrast between accommodating mediation posture in South Asia and confrontational stance toward Panama reflects differentiated approach based on perceived sovereignty challenges versus strategic asset protection.
Economy & Trade—Selective Normalization Continues; Canada Tariff Removals Signal Pragmatic Outreach
China announced on 26 February it will drop tariffs on Canadian rapeseed meal and lobsters, continuing the trade thaw initiated during Prime Minister CARNEY's January Beijing visit. The removals follow Beijing's established pattern of selectively easing economic pressure on secondary powers while maintaining coercive measures against Japan and hardline positions toward the United States. Bloomberg reported the decision as part of broader pragmatic recalibration aimed at diversifying trade relationships amid ongoing U.S. tensions.
The Canadian tariff relief contrasts with sustained export controls on 20 Japanese defense-linked entities imposed 25 February—restrictions previous cables have covered as escalatory economic coercion against Tokyo's tightening security alignment with Washington. Beijing has made no movement toward resolving German trade grievances raised during Chancellor MERZ's 24-26 February visit, despite joint statement commitments to address disputes through dialogue. The differentiated approach suggests Beijing prioritizes maintaining economic ties with partners demonstrating independence from U.S. policy coordination—Canada qualifying based on CARNEY's willingness to engage Beijing directly—while punishing perceived alignment with Washington's Indo-Pacific strategy.
Separately, African lender Ecobank told Bloomberg on 26 February that volatile U.S. tariffs are accelerating African nations' shift from dollar to renminbi settlements. The statement came as China implemented new offshore yuan funding rules on 27 February designed to facilitate cross-border transactions. While the Ecobank comments cannot be independently verified and may reflect institutional bias toward yuan-denominated business, the timing with PRC regulatory changes suggests coordinated messaging aimed at positioning the renminbi as stable alternative to dollar-based trade amid Trump administration tariff volatility.
Technology & Innovation—Chinese AI Firms Achieve Global Usage Leadership; Domestic Chip-Model Integration Advances
Chinese AI companies MiniMax and Moonshot topped global AI token usage rankings in February 2026, marking the first time PRC firms displaced U.S. competitors from leading positions after a year of American dominance, according to South China Morning Post reporting on 27 February. Separately, domestic chipmaker Moore Threads announced its flagship AI processor achieved full compatibility with Alibaba's latest Qwen3.5 models—a milestone in vertical integration of indigenous semiconductor and software capabilities.
The developments signal accelerating progress in China's AI self-sufficiency efforts despite comprehensive U.S. export controls on advanced chips and manufacturing equipment. The token usage metrics—measuring actual deployment scale rather than capability benchmarks—suggest Chinese models are gaining traction in real-world applications, though geographic concentration within China's domestic market likely drives the rankings rather than global competitive superiority. Moore Threads' Qwen3.5 integration is more significant from an industrial policy perspective, demonstrating that second-tier Chinese chip firms can now support frontier domestic AI models without relying on Nvidia H-series or comparable U.S. hardware.
The timing coincides with minimal state media coverage of technology competition themes during the 26-27 February period—People's Daily emphasized domestic robotics investment (700 billion yuan fund announced) and "little giant" enterprise development rather than U.S.-China tech rivalry narratives. The muted propaganda approach suggests confidence in indigenous trajectory rather than defensiveness, though export control efficacy remains difficult to assess given lack of transparency on performance gaps between Chinese chips and restricted U.S. hardware.
Separately, U.S. semiconductor equipment manufacturer Applied Materials agreed to pay $252 million to the Bureau of Industry and Security for illegally exporting manufacturing equipment to China, according to 27 February Commerce Department announcement. The penalty—among the largest in BIS history—involved shipments between 2019-2022, predating current comprehensive controls but demonstrating sustained PRC efforts to acquire restricted dual-use technology through third-country transshipment and end-user misrepresentation.
Cross-Strait & Regional—Taiwan Affairs Office Messaging Remains Routine Cultural Exchange Focus
Taiwan Affairs Office content during 26-27 February reporting period consisted entirely of Spring Festival cultural exchange material with no policy statements or escalatory language. Standard formulations emphasized "two sides of the strait are one family" (两岸一家亲) through coverage of nearly 69,000 people traveling through Fujian ports during the holiday period, cross-strait marriage family gatherings in mainland cities, and shared cultural traditions.
The absence of political or military content during this period is routine for major traditional holidays and consistent with TAO's established pattern of softening messaging during family-oriented festivals. Previous cables have tracked escalatory rhetoric targeting the Lai administration—the current silence does not indicate policy shift but rather reflects tactical pause during Spring Festival period. Ministry of Education measures for Fujian as cross-strait integration demonstration zone were mentioned in TAO materials but provided no implementation details.
Assessment Notes—Two Sessions Preparation Drives Tactical External Restraint
State media coverage during 26-27 February overwhelmingly prioritized Two Sessions procedural messaging and domestic governance themes over external confrontation narratives. People's Daily devoted extensive coverage to Politburo meetings chaired by President XI, NPC Standing Committee preparations, and CPPCC session logistics—standard pre-session messaging emphasizing Party institutional control and governance stability ahead of the 3 March National People's Congress opening.
The notably muted external posture—absent typical Global Times inflammatory commentary on U.S., Japan, or Taiwan issues despite ongoing tensions—suggests deliberate messaging discipline ahead of the annual political showcase. Beijing's differentiated diplomatic approach reflects prioritization hierarchy: urgent crisis management where Belt and Road assets face immediate threat (Pakistan-Afghanistan), firm defense of perceived sovereignty issues (Panama ports), selective economic normalization with cooperative secondary powers (Canada), and tactical restraint on confrontational messaging during major domestic political events. The pattern indicates confidence in long-term strategic position rather than reactive defensiveness, with external engagement calibrated to avoid complicating Two Sessions domestic focus.
PRC POLITBURO STANDING COMMITTEE ACTIVITIES
XI JINPING: Chaired CPC Politburo meeting February 27 to discuss draft 15th Five-Year Plan and government work report; met German Chancellor Friedrich Merz February 26 at Diaoyutai State Guesthouse, proposing three suggestions for China-Germany relations; signed Presidential Order No. 69 February 26 following NPC Standing Committee's 21st session closure
LI QIANG: Held talks with German Chancellor Friedrich Merz February 26; attended China-Germany Economic Advisory Committee symposium February 26; joint China-Germany statement issued emphasizing deepening mutual beneficial cooperation
ZHAO LEJI: Presided over 14th NPC Standing Committee's 21st session closing meeting February 26, delivering remarks emphasizing implementation of Party Central deployment and careful preparation for 14th NPC 4th session; chaired 63rd Chairman's Council meeting February 27; chaired 62nd Chairman's Council meeting February 25-26 hearing reports on draft laws and motions
WANG HUNING: No reporting in current collection window
CAI QI: No reporting in current collection window
DING XUEXIANG: No reporting in current collection window
LI XI: No reporting in current collection window for Li Xi personally; CCDI website reports extensive anti-corruption cases and discipline enforcement activities including sentencing of former tobacco official Zhang Tianfeng to 12 years February 26, and multiple provincial-level officials under investigation
OTHER LEADERS WORTH WATCHING
WANG YI: No reporting in current collection window; MFA spokesperson Mao Ning conducted daily briefings February 25-27 addressing Pakistan-Afghanistan border clashes, Iran-US nuclear talks, Germany relations, and UK sanctions on Chinese entities
MA ZHAOXU: No reporting in current collection window
WANG WENTAO: MOFCOM spokesperson responded to questions on China-Germany economic cooperation February 26, stating bilateral enterprises reached over ten commercial agreements during Merz visit; MOFCOM confirmed listing 20 Japanese entities on export control list February 24
HE LIFENG: Met with German economic delegation February 26 during Chancellor Merz's visit to China
SONG TAO: No reporting in current collection window from TAO portal; TAO content focused on cross-strait cultural exchanges during Spring Festival, Taiwan separatist sanctions policy, and criticism of DPP's trade agreement with US
STATE MEDIA PULSE
Temperature: Routine domestic governance focus with measured externally-facing pragmatism; de-escalatory on regional conflicts, minimal Taiwan/US rhetoric.
Two Sessions preparation and Party institutional normalcy: Heavy emphasis on upcoming NPC/CPPCC sessions, Xi chairing Politburo meetings, and legislative procedures. People's Daily dominates with procedural coverage signaling Party control and governance stability ahead of major political calendar event.
Economic modernization and technological self-reliance: Sustained messaging on innovation, robotics investment (700B yuan fund), space missions, and 'little giant' enterprises. People's Daily economics sections emphasize indigenous capabilities and high-quality development. Domestic audience reassurance on economic trajectory.
China as responsible regional mediator: Foreign Ministry statements position China as facilitator in Pakistan-Afghanistan border clashes and emphasize dialogue over confrontation. Xinhua/Global Times cover regional instability without inflammatory rhetoric—measured tone contrasts with typical wolf-warrior posture.
Germany engagement as European wedge opportunity: Global Times and People's Daily highlight Merz visit with 'fruitful outcomes' framing. Emphasis on economic cooperation and mutual concerns addressed through dialogue. Soft-power play targeting European partners amid US tensions.
Notable absences: Remarkably muted on Taiwan despite typical provocations cycle; no anti-US trade war escalation despite USTR comments; minimal South China Sea or military posturing. Iran-US talks covered neutrally without anti-American framing.
POLITICAL AND MILITARY POSTURING
Temperature: Routine administrative messaging; elevated concern on Pakistan-Afghanistan border conflict; firm Panama stance
Pakistan-Afghanistan border conflict: China expressed deep concern over escalating conflict between Pakistan and Afghanistan following February 26 border clashes and Pakistani airstrikes on Kabul. Called for both sides to maintain calm and restraint, resolve differences through dialogue, and achieve ceasefire quickly. Stated China has been mediating through its own channels and is working through embassies in both countries. Demanded both countries ensure safety of Chinese personnel, projects, and institutions.
Panama Canal port operations: In response to Panamanian President Mulino's comments that China would not retaliate over Hutchison Whampoa's exit from Panama Canal port operations, MFA spokesperson stated: 'China's position on Panama's relevant port issues is clear, and will resolutely safeguard the legitimate rights and interests of enterprises.'
Germany-China relations and Ukraine crisis: During German Chancellor Merz's visit (first foreign leader visit of lunar new year), Xi Jinping emphasized key approach to Ukraine crisis is persisting in seeking solutions through dialogue and negotiation. Joint statement issued affirming both countries should strengthen strategic communication, increase strategic mutual trust, persist in opening and cooperation, firmly support multilateralism and free trade, and resolutely safeguard UN status and Charter principles.
China-Africa military cooperation: MoD spokesperson highlighted that China-Africa military cooperation adheres to principles of equality, mutual benefit, and common development. Cooperation spans military construction, personnel training, joint exercises, peacekeeping, counter-terrorism, and humanitarian relief. Stated China will continue implementing Global Security Initiative and jointly implement China-Africa 'Security Partnership Action' to build new era all-weather China-Africa community with shared future.
Cross-strait Spring Festival activities: TAO content emphasized cultural continuity and 'two sides of the strait are one family' theme through Spring Festival celebrations. Highlighted nearly 69,000 people traveled between both sides through Fujian ports during holiday. Featured stories of Taiwan compatriots celebrating in mainland cities including Suzhou (nearly 100 cross-strait marriage families gathering), Beijing, Jinan, emphasizing shared cultural roots and family reunion traditions.
CHINESE GOVERNMENT ACTIVITY
The State Council Tariff Commission has adjusted tariff-increase measures on certain goods originating from Canada, signaling an active recalibration of China's trade policy tools amid ongoing bilateral tensions. The Politburo, chaired by Xi Jinping, convened to discuss the draft 15th Five-Year Plan and government work report ahead of the upcoming Two Sessions, indicating final preparations for China's medium-term economic and policy blueprint through 2030. The Supreme People's Procuratorate is systematically strengthening case management quality controls and expanding legal oversight mechanisms, including enhanced lawyer access systems and increased use of prosecutorial hearings (149,000 cases January-November 2025), reflecting intensified efforts to standardize judicial procedures and project responsiveness to public concerns.
U.S. GOVERNMENT ACTIVITY
The Commerce Department has tightened semiconductor export controls to China while Applied Materials faces a $252 million penalty for illegally exporting semiconductor manufacturing equipment, representing a significant escalation in enforcement of technology transfer restrictions. A former U.S. Air Force pilot was arrested for providing defense services to the Chinese military, and a fiber laser expert was convicted of economic espionage and theft of trade secrets, highlighting ongoing concerns about China's acquisition of sensitive U.S. military technology and dual-use capabilities through both legal export violations and human intelligence operations.
CATCHING WESTERN MEDIA ATTENTION
Sinocism flags upcoming NPC with continued PLA officer purges, while Pekingnology highlights China's Spring Festival AI competition among domestic players. Most significant: German Chancellor Merz's Beijing visit drew blunt warnings on trade overcapacity while OpenAI disclosed it blocked a Chinese law enforcement-linked influence operation targeting Japan's PM, and China is accelerating yuan internationalization with new offshore funding rules as African nations reportedly shift away from dollar settlements amid U.S. tariff volatility.