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The Chinese Armada

China’s navy, its coast guard, and even some of its fishing vessels then moved in on the ship and began to harass her—even spraying her with water cannons. Eventually, one Chinese vessel rammed the Teresa Magbanua, tearing a three-foot hole in her hull, before she finally turned around and made her way back to port in early September.

It was an unusual duel—but by now, not unique. In June, during the Teresa Magbanua’s standoff, Chinese coast-guard ships rammed and boarded other Philippine navy vessels at a different reef in the Spratly Islands, confiscating and damaging their equipment. One Filipino sailor lost a finger when a Chinese boat collided with his dinghy.

These weren’t the only clashes in the South China Sea, either. Chinese ships have also confronted vessels from Vietnam, Malaysia, Indonesia, and the United States. While Beijing claims most of the sea as its territorial waters, international courts have ruled against those claims as overly broad. But that hasn’t stopped it from continuing to seize reefs and, in some cases, build military bases on them. Why is China doing this?

Isaac B. Kardon is a senior fellow for China studies at the Carnegie Endowment for International Peace, and the author of China’s Law of the Sea: The New Rules of Maritime Order. Kardon says you can’t understand what China is doing in terms of one strategic goal: It wants to be the dominant military power in the South China Sea; it wants to protect its most important maritime trade routes, and—not least—it wants to prepare for a potential invasion of Taiwan. But becoming the top power also means dislodging the U.S. from its position as the region’s leading security player. And there, China is taking a risky gamble …

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• “China is the world’s largest importer of oil. It’s also a huge importer of the critical minerals that are necessary inputs for all its high-tech industries. The Chinese don’t want those imports to be vulnerable; they don’t want that commerce disrupted. They want to have control over all major sea lines connecting them to vital resources and markets.”
• “Beijing’s main goals are internal: It uses the U.S. as a bogeyman—to justify a lot of actions that might not be all that attractive to the Chinese people, especially to the business community. Chinese businesses have been feeling a lot of pain lately—and it’s a first-order consequence of China’s deteriorating relations with the United States and the West.”
• “Ultimately, the most important objective for the Chinese Communist Party is staying in power. They have really internalized what they see as the cautionary tale of the fall of the Soviet Union—and their lesson is that they need to make good on their sovereignty claims and not be cowed by superior American or Western might.”

That’s why we look at it the way a detective would: Everything The Signal does starts with good questions, and every answer leads us to more of them.

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The Wolves of K Street

Newsom said the bill would have stifled innovation in the state that’s home to most of America’s large tech companies; its sponsors said it would have ensured safety in a rapidly expanding but little-regulated industry. And tech companies fiercely lobbied both sides—Google, Meta, and OpenAI, heavily against the bill; the Amazon-backed firm Anthropic and Elon Musk, for it.

From lawmakers’ perspective, the question is how to regulate AI companies. But from the AI companies’, it becomes: How to influence lawmakers?

And there’s been a marked rise in AI companies lobbying American politicians. The Financial Times reports that OpenAI, which owns ChatGPT, has expanded its international lobbying team from three in early 2023 to 35 this summer, with the aim of reaching 50 by the end of 2024. But OpenAI is running behind its competitors when it comes to lobbying the U.S. government—while it spent $340,000 in the first quarter of this year, Google spent $3.1 million and Meta, $7.6 million.

It’s part of a larger trend, too. The non-governmental organization OpenSecrets, which tracks money in politics, reports that AI lobbying has “skyrocketed” this year. Back in 2015, there was only one organization in America lobbying on AI issues. By 2022, the number was 158. Last year it reached 460. And only in the first quarter of this year, OpenSecrets identified more than 90 organizations that lobbied on AI issues for the first time.

More money than ever is spent lobbying American politicians—on AI as well as other issues. And as Brody Mullins and Luke Mullins show in The Wolves of K Street, that money is spent on increasingly involuted lobbying campaigns. If in the past, lobbyists bought political leverage in the proverbial smoke-filled rooms, today, they orchestrate “shadow lobbying” campaigns that engineer seemingly spontaneous public outcries, which in turn pressure politicians to kill or promote bills that would harm or favor the client’s corporate interests.

As the AI industry grows, and public concerns over it grow in tandem, the industry’s lobbying efforts are expanding with them—in both size and complexity. Which is apt to make Newsom’s veto just one victory in one early battle over AI regulation.

—Gustav Jönsson

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