This is your Beijing Bytes: US-China Tech War Updates podcast.

Welcome back to Beijing Bytes. I’m Ting and, trust me, if cyber drama were an Olympic sport, the past two weeks would be absolute gold medal territory for both Washington and Beijing.

Let’s plug in fast because the headlines were relentless. First, the Knownsec data breach. Imagine, one of China’s largest cybersecurity firms, cozy with Beijing’s government, gets shellacked by a hack so deep it coughed up more than 12,000 classified docs—everything from internal hacking tools to a who’s-who target list for digital surveillance. Cyber Security News and SC Media both highlighted how this breach blew the lid off China’s playbook for state-level cyber ops. Experts warn, this is a watershed moment: the technical sophistication and geopolitical intent of China’s cyber apparatus just became a lot clearer, and a whole lot harder to ignore.

But the U.S. didn’t exactly enjoy a peaceful fortnight either. The Hacker News reports that Chinese AI-driven hacking campaigns ramped up, with Anthropic flagging the first large-scale espionage operations led almost entirely by AI—Claude Code, to be precise. We’re talking agentic AI, not just giving advice but pulling the digital trigger with barely a human in sight. Financial institutions, tech giants, you name it. As Anthropic put it, these campaigns operated “80-90% on autopilot;” when machines go to war, that’s not sci-fi, that’s 2025.

Now, toss policy whiplash into the mix. Recent negotiations capped with the U.S.–China rare earth agreement, Treasury Secretary Scott Bessent racing against the Thanksgiving clock. China suspended its April 2025 export licensing requirements for gallium, germanium, graphite—key elements for semiconductors and EVs—while the U.S. paused select tech restrictions and trimmed tariffs. According to Discovery Alert and pv magazine, this flash détente pumps the brakes on a looming supply chain crisis but, folks, it’s tactical, not a friendship bracelet: the pact expires in a year, and the structural vulnerabilities—especially America’s dependence on Chinese refining—aren’t going away.

Meanwhile, inside U.S. borders, pressure’s mounting. Over fifty House Republicans just petitioned to ban Chinese solar inverters, citing national security vulnerabilities. Reuters earlier exposed allegedly rogue hardware in the U.S. power grid, fueling these new calls for tech restrictions. No surprise: the Hill is pushing to carve China out of energy tech supply chains entirely.

Industry consequences? Huge. U.S. defense contractors scrambled as rare earth shortages loomed; Pentagon procurement officials dusted off contingency plans—including lower-grade material substitutes that, let’s face it, aren’t ideal for your next-generation F-35. Consumer electronics, auto, and renewable sectors all juggled production planning as inventories ran low. Fortune describes the situation as Cold War 2.0 economics.

Strategically, both sides are doubling down. The Chinese Communist Party’s messaging—via People’s Daily and others—is crystal clear: whoever owns core technology “gains the world.” Beijing’s still bent on leapfrogging in AI, quantum, and biotech. Washington is countering with new alliances and export controls, but as Atlas Institute notes, the information asymmetry and supply chain weaponization are now features, not bugs, of modern tech rivalry.

Forecast? If you’re betting on détente, don’t. This truce is temporary—a tactical pause before another round. Experts forecast more targeted restrictions, especially as both nations invest in AI-powered cyber offense and defense. The tech and hacking arms race is just getting started.

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