China’s Power Tactics are Blurring the Lines Between War and Peace

Summary

WSJ What’s News: "China’s Power Tactics are Blurring the Lines Between War and Peace"
Release Date: March 13, 2025
Host: Kate Bullivant | Special Contributor: Niharika Mandanna

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1. U.S. Government Shutdown Impasse

Overview:
Democrats have signaled their intention to block a Republican proposal aimed at averting a government shutdown scheduled for the upcoming weekend. This standoff sets the stage for a potential government closure as both parties grapple with funding the federal government.

Key Developments:

• Senate Dynamics: Senate Minority Leader Chuck Schumer announced that Democrats would not support the Republican plan to fund the federal government, increasing the likelihood of a government shutdown. [01:08]

• Republican Strategy: The Republican-controlled House has approved a resolution without allowing the Senate sufficient time to amend the bill, effectively forcing the Senate to either pass or reject it by the Friday midnight deadline. [01:08]

• Democratic Proposal: Schumer proposed a shorter-term funding solution, advocating for a one-month government funding measure to bridge the gap. [01:56]

• Republican Response: House Speaker Mike Johnson stated, "Democrats could cast a vote to keep the government open or take the blame for shutting it down," emphasizing the partisan divide. [02:10]

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2. U.S.-Canada Trade Tensions Escalate

Overview:
Trade relations between the United States and Canada have intensified amid reciprocal tariffs and ongoing negotiations, reflecting the strained dynamics between the two longstanding allies.

Key Developments:

• Reciprocal Tariffs: Canada has implemented a 25% tariff on over $20 billion worth of U.S. imports, including steel, aluminum, and computers, as a response to President Trump's tariffs. [02:10]

• Leadership Transition: With Mark Carney set to be sworn in as Canada’s Prime Minister on Friday, he has reiterated Canada's commitment to respond to U.S. tariffs with targeted duties, aiming to protect domestic industries. [02:10]

• Upcoming Meetings: President Trump's trade team is scheduled to meet with Canadian Finance Minister Dominic LeBlanc and Ontario Premier Doug Ford in Washington to address and potentially mitigate the escalating trade war. [02:10]

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3. Urban Population Growth Driven by Immigration

Overview:
Recent Census Bureau data reveals a resurgence in population growth within major U.S. metropolitan areas, primarily fueled by immigration, contrasting with declining birth rates and internal migration trends.

Key Developments:

• Population Trends: Cities like New York, Chicago, and Los Angeles are experiencing rapid growth, contrary to earlier pandemic-induced declines. [02:10]

• Immigration as a Driver: Economics reporter Konrad Putzia highlighted that declining birth rates and reduced internal migration have shifted the primary growth driver to immigration. “Immigration as a driver of growth,” he noted. [03:28]

• Future Implications: Putzia raised concerns about the Trump administration's immigration restrictions potentially reversing population growth in these urban centers if the inflow of immigrants is curtailed. “If you stop the flow of immigrants to big American cities, their population are likely to shrink again,” he warned. [03:28]

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4. Legal Proceedings in Mahmoud Halil’s Case

Overview:
A federal judge has determined that Mahmoud Halil, a Columbia University student arrested for participating in pro-Palestinian demonstrations, will remain in Louisiana for the time being, amid conflicting legal arguments regarding his detention location.

Key Developments:

• Legal Arguments: Halil’s lawyers advocate for his return to New York to ensure better access for legal counsel and to allow visitation from his wife, who is eight months pregnant. Conversely, government attorneys prefer his case to be adjudicated in New Jersey or Louisiana, where he was initially processed and recently transferred. [04:04]

• Judge’s Ruling: The judge sided with maintaining Halil’s detention in Louisiana, pending further legal proceedings. [04:04]

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5. Market Movements and Economic Indicators

Overview:
The financial markets responded to various corporate and economic updates, including leadership changes in major companies, federal spending statistics, and forthcoming inflation metrics.

Key Developments:

• Intel’s Leadership Change: Shares of Intel surged in after-hours trading following the appointment of Lit Boo Tan as the new CEO. Tan brings over two decades of experience in chip and software development. [04:04]

• Federal Spending Surge: Treasury Department data revealed a widening gap between federal revenue and spending, reaching $1.15 trillion in the first five months of the fiscal year. Significant increases were noted in interest on public debt, tax credits, and military expenditures. [04:04]

• Inflation Updates: The Labor Department is set to release February's Producer Price Index (PPI) at 8:30 AM Eastern. This follows a consumer price index (CPI) report showing a 2.8% annual increase in consumer prices, which was below expectations. However, analysts remain concerned that ongoing tariffs could further drive up prices. [04:04]

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6. China’s Gray Zone Tactics in Asia

Overview:
China continues to employ "gray zone" strategies across various regions in Asia, meticulously blurring the lines between peaceful expansion and aggressive territorial assertion without triggering outright conflict.

Key Developments:

• Defining the Gray Zone: Niharika Mandanna elaborates on China’s use of persistent, incremental actions that individually appear minor but collectively shift the geopolitical landscape in China’s favor. “China escalates a little bit with every move... [these actions] change bit by bit in China's Favor,” she explains. [00:54, 07:48]

• South China Sea Aggressions: Over the past decade, China has transformed reefs into islands, established military bases, and expanded coast guard fleets in the South China Sea. The integration of maritime militia has further intensified these activities, normalizing aggressive maritime presence. “The presence of the Chinese coast guard and maritime militia is getting so much stronger near the Philippines,” Mandanna observes. [08:00]

• Taiwan Strait Tensions: Similar patterns of militarization and frequent incursions by Chinese military aircraft into the Taiwan Strait have become routine, eroding the previously observed median line that served as a de facto boundary. [08:00]

• Bhutan Border Settlements: On land, China is establishing civilian settlements in disputed mountainous regions bordering Bhutan. By constructing villages and administrative offices, China is solidifying its territorial claims incrementally, complicating reversal efforts and heightening tensions with India. “China's effectively taken this land that it believes to be its own by building these civilian settlements little by little by little,” Mandanna states. [09:39]

• Regional Responses: Countries affected by China's gray zone tactics face a dilemma—responding assertively risks escalation, while inaction may embolden further aggression. For instance, the Philippines has adopted a strategy of transparency by publicly documenting and releasing evidence of Chinese maritime activities, thereby garnering international support. “The Philippines came up with an interesting strategy of transparency,” Mandanna notes. [10:44] Conversely, efforts to counteract these tactics around Taiwan and in the Himalayan border areas remain insufficient, with neither Taiwan nor the U.S. having an effective strategy to halt China's maneuvers. [12:01]

Notable Insights:

• Cumulative Impact: Mandanna emphasizes that China's gray zone tactics are characterized by their cumulative effect, where the aggregation of smaller actions leads to significant territorial and geopolitical shifts without direct confrontation. [07:48]

• Strategic Persistence: The relentless nature of these actions ensures that China steadily fortifies its presence, making it increasingly challenging for other nations to respond without escalating tensions. [07:48]

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Conclusion

The episode delves deeply into the multifaceted strategies employed by China to assert its dominance in Asia through non-conventional means, known as gray zone tactics. These strategies, spanning maritime and terrestrial domains, are meticulously designed to shift the regional balance of power subtly yet effectively. Concurrently, domestic U.S. political tensions, trade disputes with Canada, and demographic shifts in urban centers paint a complex picture of global and internal challenges shaping today's news landscape.

Quotes for Reference:

• Niharika Mandanna on Chinese Gray Zone Campaign: “China escalates a little bit with every move and no single move is so intolerable as to provoke conflict. But if you add them up over a period of time, the picture kind of changes bit by bit in China's Favor.” [00:54]
• Konrad Putzia on Urban Growth: “If you stop the flow of immigrants to big American cities, their population are likely to shrink again.” [03:28]
• Mike Johnson on Government Shutdown: “Democrats could cast a vote to keep the government open or take the blame for shutting it down.” [02:10]

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This summary provides a comprehensive overview of the key discussions and insights from the WSJ What’s News episode titled "China’s Power Tactics are Blurring the Lines Between War and Peace," ensuring clarity and depth for those who have not listened to the original podcast.

Transcript

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[Kate Bullivant]

Democrats signal they will block a Republican plan to avert a government shutdown this weekend. Plus, U.S. and Canadian officials meet today in a bid to tamp down the trade war between the two allies. And we look at China's efforts to cement power across Asia by exhausting its opponents with a thousand cuts.

[Niharika Mandanna]

So China escalates a little bit with every move and no single move is so intolerable as to provoke conflict. But if you add them up over a period of time, the picture kind of changes bit by bit in China's Favor.

[Kate Bullivant]

It's Thursday, March 13th. I'm Kate Bullivant for the Wall Street Journal, filling in for Luke Vargas. And here is the AM edition of what's news, the top headlines and business stories moving your world today. Senate Minority Leader Chuck Schumer has said Democrats won't back a Republican plan to fund federal agenc September, setting up a potential government shutdown this week. The Republican controlled House left town after it approved the resolution on Tuesday, effectively giving the Senate no time to revise the bill but to simply pass it or reject it by Friday's midnight deadline. Speaking in the Senate, Schumer floated a shorter term plan that would fund the government for a month.

[Niharika Mandanna]

Funding the government should be a bipartisan effort, but Republicans chose a partisan path, drafting their continuing resolution without any input, any input from congressional Democrats.

[Kate Bullivant]

On Fox News, Republican House Speaker Mike Johnson said Democrats could cast a vote to keep the government open or take the blame for shutting it down. President Trump's trade team will meet with Canadian Finance Minister Dominic LeBlanc and Ontario Premier Doug Ford in Washington today amid the escalating trade war war between the longtime allies. Canada's reciprocal 25% tariffs on more than $20 billion in U.S. imported goods such as steel, aluminum and computers came into effect at midnight. Incoming Canadian Prime Minister Mark Carney said he plans to continue Canada's strategy of responding to Trump's tariffs with targeted duties of its own. He'll be sworn in on Friday after losing a large number of their population during the pandemic cities like New York, Chicago and Los Angeles are growing again and at a faster pace than previously thought. New Census Bureau estimates released today show that in the year ended in June, most growth occurred in metro areas where 86% of the US population lives. Economics reporter Konrad Putzia says cities are being boosted by immigration.

[Konrad Putzia]

In particular, people aren't having kids as much anymore as they used to. A lot of these big, expensive cities are still losing people to the rest of the country, even though it's now a slower pace than during the pandemic. So what you're left with is really immigration as a driver of growth. And it's not just New York and San Francisco and la, even places like Atlanta. And all that means that population growth in these big cities is on pretty shaky ground because the Trump administration is pretty open about wanting to restrict immigration. And if you stop the flow of immigrants to big American cities, their population are likely to shrink again.

[Kate Bullivant]

A federal judge has said that Mahmoud Halil, the Columbia University student arrested after his participation in pro Palestinian demonstrations, would remain in Louisiana for now. Yesterday's order comes as Halil's lawyers push for him to be returned to New York as soon as possible to have better access to their client and to allow Halil's wife, who is eight months pregnant, to visit him. Lawyers for the government argue that the case shouldn't be decided by a judge in New York, but rather in New Jersey, where he was first booked and processed, or in Louisiana, where he was transferred this past weekend. In market news today, shares in intel have rallied in off hours trading after the semiconductor company named Lit Boo Tan as its new chief executive. Tan is a career venture capitalist and former intel board member with more than 20 years of chip and software experience. Intel shares have lost more than half their value over the past year as the one time industry leading semiconductor manufacturer has underperformed both the market and its competitors. Though deal speculation has helped push shares up so far this year, new data from the Treasury Department shows that the gap between federal revenue and government spending widened to $1.15 trillion in the first five months of the fiscal year marks a record for the October through February period. The biggest increases in spending came from interest paid on public debt, which rose by 10% in the current fiscal year. Higher tax credits and military and security spending also jumped. And later today, markets will get another inflation update when the Labour Department releases February's producer price index. Yesterday, data showed consumer prices were up 2.8% last month from a year earlier, a lower than expected reading. Although There is concern from analysts and on Wall street that tariffs could continue to push prices higher. PPI is due out at 8:30am Eastern. Coming up, China's relentless campaign to extend its power across Asia is blurring the lines between war and peace. We take a look at this gray zone after the break.

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[Kate Bullivant]

In the middle ground between war and peace lies the grey zone. It's a domain of boundary pushing that tests the limits of what your opponents consider tolerable. And it's a strategy that Journal chief correspondent Niharika Mandana reports China has been embracing across a swath of Asia as it looks to cement its power. Naharika Let me just say first off, for our Journal subscribers, I think it's worth checking out the link to your story. We've left a link to that in our show notes the graphics showing Chinese military activity in the waters around Taiwan or the buildup of Chinese settlements in the Himalayas. It's really quite eye catching stuff.

[Niharika Mandanna]

Yeah. So what caught my attention was that China is using the gray zone campaign across a number of different places and geographies and problem areas, if you will, you know, in the South China Sea, around Taiwan, along its Himalayan border, and really intensifying these gray zone activities in all of these places. So the crux of a gray zone campaign is that it's nonstop, Right. So China escalates a little bit with every move. And no single move is so intolerable as to provoke conflict. But if you add them up over a period of time, the picture kind of changes bit by bit in China's favorite. So if you look at the South China sea, first, over 10 years, first China turned reefs into islands, islands into military bases. Then it used those bases to kind of send out coast guard fleets on patrol. Those fleets grew in size. They were then joined by the maritime militia. You saw sort of an intensification of those tactics of using ramming and water cannons to push others out. And then what we were able to see with ship tracking data over the last three years is that the presence of the Chinese coast guard and maritime militia is getting so much stronger near the Philippines, which means they're just covering a bigger area inside the Philippines exclusive economic zone. And more and more of this activity has become normal over time. As China pushes the boundaries, you'll see a similar pattern around Taiwan. Five years ago, it was rare to have Chinese military planes cross the median line, which is kind of a notional line that divides the Taiwan Straits. Now that's the new normal.

[Kate Bullivant]

And one location we haven't discussed on the podcast before is China's border with Bhutan, where this strategy also seems to be playing out. Tell us about the significance here.

[Niharika Mandanna]

So that's really interesting because, of course, on land, it's not ships or it's not aircraft, right? But what China's doing is building civilian settlements in areas that are considered to be disputed. So these areas are remote and mountainous, and historically, no one's really lived in these areas. But now you have little villages or settlements where China's built rows and rows of homes and administrative offices and kind of moved families into these areas. And once you've built this stuff, it's hard to reverse. So what it means is that China's effectively taken this land that it believes to be its own by building these civilian settlements little by little by little. The geopolitical significance is that some of these settlements are close to territory that's sensitive to India's interests. So India is another neighbor of China's and is also a neighbor of Bhutan's. And China's just managed to establish a stronger footprint, a stronger presence in those areas.

[Kate Bullivant]

So how are affected countries responding to that aggression?

[Niharika Mandanna]

So it's hard for countries to figure out how to respond, because most countries don't want to be seen to be escalating. You don't want to make things worse, but you don't want to do nothing either. In the case of the Philippines, the Philippines came up with an interesting strategy of transparency, of calling out Chinese gray zone activities rather than brushing them under the carpet. So they would release detailed accounts of these types of activities at sea. If there was a skirmish or a major incident in the waters, release video footage to show the world what kinds of tactics Chinese coast guard and militia were using against Philippine ships. And what that's done is for the Philippines. It has cemented international support for the Philippines, but China has doubled down in response to that strategies. In the case of Taiwan, we've seen this intensification, and neither Taiwan nor the US have a really good strategy to halt or stop this kind of quay zone aggression. So the military exercises that China mounts around Taiwan have continued, the near daily presence is and there hasn't been a really good strategy from the other sides to get it to stop.

[Kate Bullivant]

That was Journal chief correspondent Niharika Mandanna. Niharika, thanks so much for your time.

[Niharika Mandanna]

Thanks very much, Kate.

[Kate Bullivant]

And speaking of the rivalry between the world's greatest powers, we've been working on a special series about how Beijing is using its trillion dollar belt and road infrastructure program to undercut American dominance on the world stage. All three episodes of Building Influence are available now on the what's NEWS fe. We've left a link to them in our show notes. And that's it for WHAT'S NEWS for this Thursday morning. Today's show was produced by Daniel Bark with supervising producer Sandra Kilhoff. And I'm Kate Bullivant for the Wall Street Journal filling in for Luke Vargas. We'll be back tonight with a new show. Until then, thanks for listening.