Latest / The President's Daily Brief / PDB Afternoon Bulletin | October 13th, 2026: Xi Jinping's Plan to Make China a Superpower Is Backfiring & Russia's European Sabotage

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PDB Afternoon Bulletin | October 13th, 2026: Xi Jinping's Plan to Make China a Superpower Is Backfiring & Russia's European Sabotage · The President's Daily Brief

0:12
It's Tuesday,
0:12
the 13th of October.
0:14
Welcome to the PDB afternoon bulletin.
0:16
I'm Mike Baker,
0:17
your eyes and ears on the world stage.
0:20
Alright,
0:21
let's get briefed.
0:22
First up,
0:23
Xi Jinping's superpower ambitions are creating
0:26
serious problems for China's economy,
0:29
threatening to undermine the very global dominance
0:32
that he's spent years trying to achieve.
0:35
Later in the show,
0:36
Britain's top spy warns that Iran and
0:38
Russia are escalating covert attacks across Europe,
0:41
targeting military installations and critical infrastructure.
0:45
But first,
0:46
today's afternoon spotlight.
0:48
For more than a decade,
0:49
China's president Xi Jinping
0:51
has been pouring enormous resources
0:54
into an effort to turn China into the world's dominant superpower.
0:58
Massive factories,
0:59
advanced technology,
1:00
artificial intelligence,
1:01
and a military capable of challenging the US.
1:05
Now,
1:05
in some respects,
1:06
the strategy is working.
1:08
China has become an industrial powerhouse,
1:10
capable of producing everything from electric vehicles and batteries
1:13
to sophisticated weapons systems.
1:16
But there is a problem.
1:17
Xi has been borrowing enormous amounts of money to finance those ambitions,
1:22
and increasingly,
1:23
the Chinese economy is struggling to keep up.
1:26
A new investigation by the Wall Street Journal reveals
1:29
just how expensive Xi's ambitions have become,
1:32
and why the strategy that he believes will make China the world's dominant power
1:37
may be creating serious problems for the country's economic future.
1:41
Since Xi took power in 2012,
1:43
the amount of outstanding credit across China's economy
1:47
has increased by more than $43 trillion.
1:50
To put that in perspective,
1:52
the total annual economic output of the US is approximately $32 trillion
1:58
give or take a couple of bucks.
2:00
And all that borrowing has helped finance
2:02
an extraordinary expansion of China's industrial capabilities.
2:06
Beijing has directed money toward enormous factories,
2:08
high-speed rail networks,
2:10
advanced semiconductor facilities,
2:12
electric vehicle manufacturing,
2:13
and countless other projects
2:15
intended to make China the undisputed leader in strategic industries.
2:19
Xi's thinking is that economic power and national security go hand in hand.
2:24
If China dominates the technologies and industries of the future,
2:28
it becomes less dependent on the West
2:30
and better positioned to challenge American influence.
2:33
But here's where the trouble begins.
2:35
Building a factory doesn't necessarily mean there's
2:38
enough demand for what that factory produces,
2:41
and China's government has encouraged companies and local
2:43
officials to build enormous amounts of manufacturing capacity,
2:47
often with borrowed money,
2:48
whether the market can support it or not.
2:51
The automobile industry provides a particularly revealing example.
2:56
According to new figures reported by the Associated Press,
2:59
Chinese passenger car exports surged 64% in
3:02
September compared with a year earlier,
3:05
but sales inside China fell by 27%.
3:09
Chinese factories are shipping enormous numbers of vehicles overseas,
3:12
while the domestic market for those same vehicles is shrinking.
3:16
And that creates a problem,
3:17
of course.
3:18
Manufacturers compete aggressively for customers,
3:21
cutting prices and squeezing profits.
3:23
And the more China depends on exports to absorb all that production,
3:27
the more vulnerable it becomes to foreign tariffs and trade restrictions.
3:31
We're already seeing that play out
3:33
as governments in Europe and elsewhere move to protect
3:35
their own industries from a flood of Chinese products.
3:39
And the problems aren't confined to manufacturing.
3:42
For years,
3:42
China's economy relied heavily on a booming real estate industry.
3:47
Developers built enormous apartment complexes,
3:49
households invested their savings and property,
3:52
and
3:52
local governments collected substantial revenue from selling land.
3:56
But that boom has now gone bust.
3:59
Property investment has plunged,
4:00
housing prices continue falling,
4:02
and millions of apartments remain unsold.
4:05
That has left Chinese families feeling poorer
4:07
and less inclined to spend,
4:09
while local governments
4:10
have lost a major source of revenue.
4:13
And those local governments have another problem.
4:15
Many borrowed enormous sums to finance the infrastructure and
4:19
industrial projects that Beijing encouraged them to pursue.
4:23
Now they're
4:24
struggling to pay those bills.
4:26
In fact,
4:26
just last week,
4:27
China's Finance Ministry announced another $82 billion in borrowing capacity
4:33
to support local governments and infrastructure.
4:36
More than half that money is intended to help local authorities
4:39
simply maintain ordinary government operations.
4:42
In other words,
4:43
Beijing isn't simply borrowing money to build
4:46
the next generation of factories and infrastructure.
4:48
It's also borrowing to help parts of the government continue functioning.
4:53
Meanwhile,
4:53
the cost of servicing all that debt,
4:55
well,
4:55
as you might guess,
4:56
is rising.
4:58
According to the Financial Times,
4:59
nearly 10% of China's central government general public budget.
5:03
is expected to go toward debt payments this year,
5:06
up considerably from just over a decade ago.
5:09
That's money that can't be spent elsewhere without additional
5:12
borrowing or higher taxes or cuts to other programs.
5:15
And that brings us to Xi Jinping's larger dilemma.
5:19
China has made genuine advances in several industries
5:22
critical to its strategic competition with the US.
5:24
Its electric vehicle companies are formidable competitors.
5:28
Its battery manufacturers dominate important global markets,
5:31
and Beijing continues investing heavily
5:33
in semiconductors and artificial intelligence,
5:36
robotics,
5:37
and military technology.
5:39
Chinese factories continue expanding while Chinese consumers
5:42
remain reluctant to spend.
5:44
Local governments are struggling with debt while Beijing keeps directing money
5:48
toward more industrial development,
5:50
and foreign markets are becoming less welcoming.
5:53
To the enormous quantities of products China needs to sell,
5:57
Xi could try to change course,
5:59
directing more resources toward households and private businesses
6:02
rather than state-backed industrial expansion.
6:05
But doing that
6:06
would mean reconsidering an economic strategy that's been
6:09
central to his vision of China's rise,
6:12
and there is little indication that he's prepared to make such a dramatic change.
6:17
Now for Washington,
6:18
this presents an interesting picture.
6:20
China is becoming a more formidable competitor
6:22
in advanced technology and military power,
6:25
but at the same time,
6:27
Xi's determination to dominate those
6:28
industries is creating financial vulnerabilities
6:31
that could limit China's strength over the long term.
6:35
After more than a decade of extraordinary spending and borrowing,
6:38
the bill for Xi's ambitions at some point
6:42
will come due.
6:44
Alright,
6:44
coming up next,
6:45
Britain's top spy sounds the alarm as the Iranian regime
6:48
reportedly targets military bases outside the Middle East and Russia
6:52
steps up sabotage attacks across Europe.
6:54
I'll be right back.
6:56
Hey,
6:56
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9:28
The head of Britain's spy agency is warning that Iran and
9:31
Russia are becoming more aggressive in their operations against the West.
9:35
State-backed threats have become so severe that his
9:37
agency is now committing more resources to confronting them
9:41
than it did during the Cold War.
9:44
MI5 Director General Ken McCallum said in his annual threat assessment
9:48
today that state-backed threats have quadrupled over the past decade.
9:52
British authorities have long accused the Iranian regime of
9:55
plotting attacks and attempted assassinations against Iranian dissidents,
9:59
along with Israeli and Jewish targets inside.
10:01
The UK.
10:02
Now,
10:03
McCallum describes a shift toward Iranian ambitions to
10:06
come at harder targets like military sites,
10:09
end quote.
10:10
We've already seen the concerns surrounding one of
10:12
those sites play out at RAF Fairford,
10:14
the British airbase American B-1 bombers used during strikes against Iran.
10:19
On Monday,
10:20
British Prime Minister Annie Burnham said Tehran was quote,
10:23
highly likely to have been responsible for the suspected plot
10:27
against that base.
10:29
The incident prompted a security alert and
10:31
concerns about the base contributed to Washington's decision
10:34
to withdraw the remaining American B-1 bombers.
10:38
Now,
10:38
Iran continues to deny any involvement,
10:42
just as it rejects the accusations of hostile activity in Britain.
10:45
Well,
10:46
if the Iranian regime and the IRGC say that they're not engaged in shenanigans,
10:51
uh,
10:51
I'm sure we can take them at their word.
10:53
They've always been
10:54
reasonable and transparent in the past.
10:56
McCallum wouldn't discuss the details of any ongoing investigation.
11:00
But he did make clear that Fairford
11:02
isn't the only case worrying British intelligence.
11:04
Quote,
11:05
the RAF Fairford incident is not unique.
11:08
There have been other examples,
11:09
not just in the UK but around the world,
11:12
end quote.
11:13
Over the past year alone,
11:14
McCallum says Iran-linked operations have led to more than 50 arrests,
11:18
but wanting to attack a military installation
11:20
and having the ability to pull it off are two different things.
11:24
When reporters asked whether Iran could mount
11:26
a complex attack using explosive drones,
11:29
McCallum said the criminals and proxies that it relies on
11:31
in Britain have not demonstrated that level of sophistication.
11:36
But McCallum cautioned that in countries closer to Iran's borders,
11:39
the
11:39
Islamic Revolutionary Guard Corps,
11:41
the IRGC has experience carrying out more aggressive and
11:45
sophisticated operations using hybrid technology.
11:49
And then there's Russia,
11:50
which McCallum calls quote aggressor number one.
11:54
We've discussed here on the PDB how Moscow is stepping up sabotage,
11:57
cyberattacks,
11:58
espionage,
11:58
and arson
11:59
against Ukraine's European allies,
12:02
staying below the threshold of conventional warfare.
12:05
And using proxies to make responsibility harder to establish.
12:09
McCallum tied those operations directly to Russia's
12:11
struggles on the battlefield in Ukraine.
12:13
Quote,
12:14
It's no accident
12:15
that Russian aggressors are trying to unsettle other European homelands
12:18
at a time when their military progress in Ukraine is minimal,
12:22
end quote.
12:23
He pointed to the attempted drone attack against a
12:25
cargo aircraft at Germany's Leipzig Halle Airport in August,
12:29
and a cyberattack against Poland's energy infrastructure.
12:33
Germany has blamed Russia for the airport incident.
12:36
Moscow calls that accusation quote,
12:38
entirely fabricated.
12:40
What?
12:40
Nothing to see here.
12:42
Now in a separate arson case,
12:44
Poland is blaming Russian intelligence for last month's fire
12:47
at a Starlink station supporting Ukraine's communications.
12:50
You may recall we previously discussed the Starlink station in
12:54
Poland that was set on fire this past month.
12:56
When we covered it,
12:57
Polish officials suspected a Russian connection,
13:00
but hadn't publicly assigned responsibility.
13:03
Now,
13:03
Poland's intelligence minister says,
13:05
quote,
13:05
We have no doubt that Russian intelligence
13:08
services are behind this act of sabotage,
13:10
end quote.
13:12
Polish officials announced yesterday that two Turkish nationals
13:15
had been arrested in Germany in connection with the suspected attack.
13:18
They're accused of deliberately setting fire to
13:21
Starlink infrastructure on 23rd of September,
13:23
about 25 miles south of Warsaw.
13:27
Starlink is a particularly valuable target because
13:30
of its role in Ukraine's military operations.
13:33
Ukrainian forces
13:34
rely heavily on the satellite network to communicate and coordinate,
13:38
including in Russian occupied territory.
13:41
Since Russia's full scale invasion in February of 2022,
13:45
the Associated Press has tracked more than 210 incidents across Europe
13:49
that Western officials consider sabotage or
13:52
other malign activity linked to Moscow,
13:55
including,
13:55
of course,
13:56
the Polish Starlink fire.
13:59
And that my friends,
14:00
is the PDB afternoon bulletin for Tuesday,
14:03
the 13th of October.
14:04
Now,
14:04
if you have any questions or comments,
14:05
and I hope you do,
14:06
just reach out to me at PDB@hefirsttv.com
14:10
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I'm Mike Baker and I'll be back tomorrow.
14:22
Until then,
14:23
stay informed,
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stay safe,
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stay cool.
14:40
Hey,
14:41
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