MILTARY MUST "FORGE A POLITICAL SOUL LOYAL TO THE PARTY"
"To ensure the health of the party and the long-term development of its cause," the Central Military Commission (CMC) chaired by Xi Jinping has issued new "measures on strengthening the education, management and supervision of senior military cadres." The "explicit rules," which cover 26 articles across seven areas, focus on "the consciousness and thoroughness of ideological rectification," with an eye toward "forging of the senior officer teams' revolutionary spirit," the official PLA Daily said. "Regardless of their rank, senior cadres are all within the organization. They must take the lead in receiving education, truly learning from it, deeply solidifying their ideals and beliefs, party spirit and moral character," the report added. At a "special meeting" on applying Xi Jinping Thought to Strengthen the Military, disciplinary chief Zhang Shengmin urged the PLA to "relentlessly" equip their minds to "strengthen the foundation of ideals and beliefs and forge a political soul loyal to the party." (South China Morning Post, May 28, 2026; PLA Daily, May 28, 2026)
IN SEARCH OF TAX REVENUE, CHINA TARGETS OFFSHORE TRUSTS
Facing growing budget deficits, Chinese provinces and municipalities such as Jiangsu province and Shenzhen, Guangdong are looking to tax the channels used by the wealthy to invest overseas. The latest target is offshore trusts, whose owners must now report detailed financial information, including investment gains from dividends and share sales. It remains unclear whether penalties will be applied and how far back tax inspectors will look. One locality is imposing a 20% levy on investment gains plus late penalties; another is demanding trust owners disclose two years of back income. "Those who [use trusts] for tax purposes need to think twice and we are seeing many who have these already review their structures," said Clifford Ng of Hong Kong firm Zhong Lun Law. "Many hold significant stakes in listed companies worth billions of dollars." (Bloomberg, May 27, 2026)
[EDITOR'S NOTE: Saddled with a sluggish economy and widening budget deficits, Chinese officials are using various methods to obtain tax revenue. Outbound capital controls have been tightened, and the two leading cross-border online brokerages have been removed from app stores in China. Last year, revenue from personal income tax jumped 11.5% from 2024, to a record 1.62 trillion yuan.]
THE MSS TARGETS TRUMP WORLD
Thomas Pauken II, an American who lived in China for years and worked for state media, is accused of acting on behalf the Ministry of State Security (MSS). The U.S. government has charged Pauken — the son of Tom Pauken, who chaired the Texas GOP and ran for governor in 2014 — with acting as an unregistered foreign agent for China. The younger Pauken, who used the alias Tom McGregor because his father did not want to be linked to his activities, is accused of working with an MSS handler. He allegedly brought cellphones and an encrypted laptop from China, which he gave to someone vying for a job in the Trump administration – referred to as "Person 1" in the court affidavit. U.S. authorities intercepted Pauken at the airport coming from China in January 2025, but let him go. Then, in February 2026, he participated in a sting operation against "Person 1" at a Washington, DC hotel. After Pauken offered "Person 1" a SIM card and $10,000 for agreeing to work with his handler, he was arrested. Both the name and fate of the would-be Trump administration official remain unclear. (Politico, May 26, 2026)
PLA USES ELECTRONIC WARFARE ON DUTCH WARSHIP IN SOUTH CHINA SEA
The PLA Navy used "electronic interference" to force a Dutch air defense frigate, the HNLMS De Ruyter (F804), away from the Paracel Islands. China deployed its navy and air force to issue warnings and electronic jamming after the ship entered Chinese territorial waters in a fashion "extremely liable to trigger misunderstanding and miscalculation," warned a PLA spokesperson. Beijing controls the Paracel Islands via a network of twenty outposts and forward-deployed electronic warfare capabilities on its artificial island bases. The Royal Netherlands Navy De Zeven Provinciën-class frigate is deployed to the Indo-Pacific for the five-month Pacific Archer mission to promote freedom of navigation. The ship recently completed drills with the Philippine Navy in Manila, and is scheduled to attend the Rim of the Pacific (RIMPAC) drills this summer in Hawaii. (USNI News, May 27, 2026)
CHINA PULLS VISA OF TIMES REPORTER
China has not renewed the visa of New York Times reporter Vivian Wang, prompting the Trump administration to revoke the visa of a U.S.-based PRC state media journalist. Chinese officials said they acted against Wang, a China correspondent since 2020, in response to a video appearance by Taiwan's president at a Times DealBook summit in New York. Part of the team that won the Pulitzer Prize for pandemic coverage, Wang was in Hong Kong for two years before moving to Beijing in 2022. The decision "to expel Vivian Wang is wrong," said Joseph Kahn, executive editor of the Times, and "follows a campaign of harassment and threats directed at her over professional, accurate and evenhanded reporting."
The number of American correspondents allowed in China "has now fallen to an alarmingly low level, at a time when the need for people everywhere to understand China is greater than ever," he added. The Times has only one correspondent in China, down from roughly a dozen; the Washington Post has none. China has sharply reduced the number of long-term visas issued to American journalists. (New York Times, May 29, 2026)