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French intelligence: China used embassies to undermine sales of France's flagship Rafale fighter jet
A French intelligence service says China has used its embassies to promote claims that Chinese-made Pakistani warplanes outperformed French Rafale jets during India-Pakistan clashes in May.
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French intelligence: China used embassies to undermine sales of France’s flagship Rafale fighter jet
French intelligence: China used embassies to undermine sales of France’s flagship Rafale fighter jet
A French-made Rafale fighter jet takes off on the inaugural day of the Aero India 2021 at Yelahanka air base in Bengaluru, India, Wednesday, Feb. 3, 2021. (AP Photo/Aijaz Rahi, File)
PARIS (AP) — China deployed its embassies to spread doubts about the performance of French-made Rafale jets after they saw combat in India and Pakistan’s clashes in May, French military and intelligence officials have concluded, implicating Beijing in an effort to hammer the reputation and sales of France’s flagship fighter.
Findings from a French intelligence service seen by The Associated Press say defense attaches in China’s foreign embassies led a charge to undermine Rafale sales, seeking to persuade countries that have already ordered the French-made fighter — notably Indonesia — not to buy more and to encourage other potential buyers to choose Chinese-made planes. The findings were shared with AP by a French military official on condition that the official and the intelligence service not be named.
Four days of India-Pakistan clashes in May were the most serious confrontation in years between the two nuclear-armed neighbors, and included air combat that involved dozens of aircraft from both sides. Military officials and researchers have since been digging for details of how Pakistan’s Chinese-made military hardware — particularly warplanes and air-combat missiles — fared against weaponry that India used in airstrikes on Pakistani targets, notably French-made Rafale fighters.
Sales of Rafales and other armaments are big business for France’s defense industry and help efforts by the government in Paris to strengthen ties with other nations, including in Asia where China is becoming the dominant regional power.
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France is fighting what it calls a disinformation campaign against the Rafale
Pakistan claimed its air force downed five Indian planes during the fighting, including three Rafales. French officials say that prompted questions about their performance from countries that have bought the fighter from French manufacturer Dassault Aviation.
India acknowledged aircraft losses but didn’t say how many. French air force chief Gen. Jérôme Bellanger said that he’s seen evidence pointing to just 3 Indian losses — a Rafale, a Russian-made Sukhoi and a Mirage 2000, which is an earlier generation French-made jet. It was the first known combat loss of a Rafale, which France has sold to eight countries.
“Of course, all those, the nations that bought Rafales, asked themselves questions,” Bellanger said.
French officials have been battling to protect the plane from reputational damage, pushing back against what they allege was a concerted campaign of Rafale-bashing and disinformation online from Pakistan and its ally China.
They say the campaign included viral posts on social media, manipulated imagery showing supposed Rafale debris, AI-generated content and video-game depictions to simulate supposed combat. More than 1,000 social media accounts newly created as the India-Pakistan clashes erupted also spread a narrative of Chinese technological superiority, according to French researchers who specialize in online disinformation.
French military officials say they haven’t been able to link the online Rafale-bashing directly to the Chinese government.
Intelligence assessment says Chinese officials lobbied potential clients to ditch French planes
But the French intelligence service said Chinese embassy defense attaches echoed the same narrative in meetings they held with security and defense officials from other countries, arguing that Indian Air Force Rafales performed poorly and promoting Chinese-made weaponry.
The defense attaches focused their lobbying on countries that have ordered Rafales and other potential customer-nations that are considering purchases, the intelligence service said. It said French officials learned of the meetings from nations that were approached.
Asked by AP to comment on the alleged effort to dent the Rafale’s appeal, the Ministry of National Defense in Beijing said: “The relevant claims are pure groundless rumors and slander. China has consistently maintained a prudent and responsible approach to military exports, playing a constructive role in regional and global peace and stability.”
In recent years, China has stepped up disinformation campaigns on global social media platforms like X, Instagram or Facebook, using networks of state-sponsored influencers, sites that pose as news organizations, and fake social media accounts to spread narratives from Beijing.
France’s Defense Ministry said the Rafale was targeted by “a vast campaign of disinformation” that “sought to promote the superiority of alternative equipment, notably of Chinese design.”
France considers the jet a ‘strategic French offering’
“The Rafale was not randomly targeted. It is a highly capable fighter jet, exported abroad and deployed in a high-visibility theater,” the Defense Ministry wrote on its website.
“The Rafale was also targeted because it represents a strategic French offering. By attacking the aircraft, certain actors sought to undermine the credibility of France and its defense industrial and technological base. The disinformation campaign therefore did not merely target an aircraft, but more broadly a national image of strategic autonomy, industrial reliability, and solid partnerships.”
Dassault Aviation has sold 533 Rafales, including 323 for export to Egypt, India, Qatar, Greece, Croatia, the United Arab Emirates, Serbia and Indonesia. Indonesia has ordered 42 planes and is considering buying more.
China may be hoping to weaken the security relationships that France is building with Asian nations by spreading worries about the equipment it supplies, said Justin Bronk, an airpower specialist at the Royal United Services Institute, a defense and security think tank in London.
“From a point of view of limiting Western countries’ influence in the Indo-Pacific, it would make sense for China to be using the performance of Pakistani weapon systems — or at least purported performance — in downing at least one Rafale as a tool to undermine its attractiveness as an export,” he said.
“They certainly saw an opportunity to damage French sales prospects in the region.”
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Exclusive: China's central bank asks financial institutions about dollar weakness, sources say
July 7, 202511:18 AM EDTUpdated 3 hours ago
Person walks past the headquarters of the People's Bank of China, in Beijing
A person walks past the headquarters of the People's Bank of China, in Beijing, China May 7, 2025. REUTERS/Tingshu Wang/ File Photo Purchase Licensing Rights
July 7 (Reuters) - China's central bank has asked some financial institutions about their views on recent U.S. dollar weakness, people with knowledge of the matter said.
In the survey conducted last week, the People's Bank of China (PBOC) asked questions related to the U.S. dollar's movements and the causes of its recent weakness and outlook for the Chinese yuan exchange rate, the sources said.
The PBOC did not immediately respond to Reuters' request for comment.
While the PBOC did not explicitly state the purpose of its recent survey, one of the sources said he interpreted it as a sign authorities are concerned about a sharp appreciation of the yuan against the weakening dollar.
Another source directly involved in the survey said it seemed to be an assessment of the dollar's outlook as trade negotiations with the U.S. progress.
The survey comes days before U.S. President Donald Trump's 90-day pause on tariffs on imports from dozens of countries expires on Wednesday, and a month before a reprieve on triple-digit tariffs on China expires.
U.S. trade and economic policies this year have weighed heavily on the dollar. The dollar index , which reflects the U.S. currency's performance against a basket of six others, has had its worst first half of the year since 1973, declining some 11%. It has fallen by 6.6% since April 2 alone.
China's yuan has been relatively stable, however, and is up just 1.3% since Trump's April 2 "Liberation Day" tariffs.
Reporting by Reuters staff; Editing by Sam Holmes
Our Standards: The Thomson Reuters Trust Principles.
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Italian police arrest Chinese national wanted by FBI for alleged industrial espionage
July 7, 20259:40 AM EDTUpdated 7 hours ago
MILAN, July 7 (Reuters) - Italian police have arrested a 33-year-old Chinese man who is wanted by the U.S. authorities over alleged industrial espionage which targeted projects including efforts to develop a COVID vaccine, legal and judicial sources said on Monday.
The man, identified as Xu Zewei from Shanghai, was picked up last week after he arrived at Milan's Malpensa airport on a U.S. arrest warrant as part of an FBI investigation.
The U.S. authorities allege that he was part of a team of hackers who tried to access a COVID vaccine being developed by the University of Texas in 2020.
He faces an extradition hearing in Milan on Tuesday. Enrico Giarda, the Italian lawyer representing the suspect, declined to comment on the case.
The charges listed on the U.S. arrest warrant are wire fraud and aggravated identity theft, conspiracy to commit wire fraud, and unauthorised access to protected computers.
Reporting by Alfredo Faieta and Emilio Parodi in Milan; Writing by Keith Weir; Editing by Alison Williams
Our Standards: The Thomson Reuters Trust Principles.
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Italy arrests alleged Chinese hacker after US issues warrant
Xu Zewei suspected of links to Beijing-backed group accused by Washington of stealing Covid-19 vaccine secrets
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Italy arrests alleged Chinese hacker after US issues warrant
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Xu Zewei suspected of links to Beijing-backed group accused by Washington of stealing Covid-19 vaccine secrets
Healthcare worker gives a jab to a patient
At the height of the Covid-19 pandemic, the FBI and the US Cybersecurity and Infrastructure Security Agency repeatedly accused Beijing of attempting to steal vital coronavirus research © Scott Heins/Getty Images
Italian authorities have arrested a Chinese citizen suspected of being linked to a state-sponsored hacking group that sought to steal Covid-19 vaccine secrets from the US at the height of the pandemic in 2020.
Xu Zewei was arrested at Milan’s Malpensa airport on July 3 after an international warrant was issued by the US, Italian police confirmed.
The 33-year-old Chinese national was suspected of being linked to a Chinese government-backed hacking group known as Hafnium that was accused of penetrating Microsoft email software in 2021 in a mass espionage campaign, a person familiar with the matter said.
A nine-count US indictment accusing Xu of participating in a hack targeting US research into Covid vaccines was forthcoming, the person said.
Xu, currently being held at an Italian jail not far from the airport, was expected to be charged with carrying out computer intrusions between February 2020 and June 2021, the person added.
Italy’s ministry of justice confirmed Rome had received a US formal extradition request for Xu.
The US Department of Justice declined to comment. An Italian defence lawyer for Xu, whose extradition proceedings were expected to begin in a Milan court on Tuesday, did not respond to multiple requests for comment.
The arrest of the Chinese national, who claimed to be an IT specialist, could prove diplomatically awkward for Prime Minister Giorgia Meloni’s government, which is squeezed between Washington and Beijing.
Donald Trump and Giorgia Meloni
US President Donald Trump and Italy’s Prime Minister Giorgia Meloni at the White House in April. The arrest of the Chinese national could prove diplomatically awkward for Meloni, which is squeezed between Washington and Beijing © Win McNamee/Getty Images
Meloni has worked to forge a solid personal relationship with President Donald Trump, and continues to see the US as Italy’s most important ally, despite Washington’s tensions with the EU.
But she has also sought to maintain friendly diplomatic relations with Beijing, despite her decision to withdraw from Chinese President Xi Jinping’s flagship Belt and Road Initiative. Italy’s deputy prime minister, Matteo Salvini, was due to arrive in Beijing for an official visit later this week.
At the height of the Covid pandemic, the FBI and the US Cybersecurity and Infrastructure Security Agency repeatedly accused Beijing of attempting to steal vital coronavirus research by hacking into the computer systems of US groups studying the virus.
In the summer of 2020, the DoJ indicted two other Chinese nationals for allegedly attempting to access US research as part of a decade-long scheme to steal US trade secrets.
Beijing has consistently denied the US claims, saying at the time that China was at the forefront of the global race for Covid vaccines and had no need of help from the west.
Italy has a patchy record of handling extradition requests.
In early January, an Italian court ‘revoked” the arrest of an Iranian engineer sought by US authorities for allegedly illegally exporting sensitive high-tech technology to Iran, just days after Tehran freed a young Italian journalist.
Ahead of the carefully choreographed prisoner exchange, Meloni flew to Trump’s Mar-a-Lago resort to meet the president, who had not yet been sworn in.
In 2023, Artem Uss, a prominent Russian businessman wanted in the US for money-laundering and sanctions evasion escaped house arrest in Italy a day after an Italian court approved his extradition. He later reappeared in Russia.
Meloni’s government subsequently blamed the court for the escape, suggesting Uss had been treated too leniently by being granted house arrest.
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Japan tells its companies in Taiwan ‘you’re on your own’ if China invades
FDI has slumped as businesses are warned to take on burden of protecting their staff if Beijing attacks
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Japan tells its companies in Taiwan ‘you’re on your own’ if China invades
FDI has slumped as businesses are warned to take on burden of protecting their staff if Beijing attacks
Two people sit on a park bench in Taipei, Taiwan in front of a Patriot air defence system on July 14 2025
Since 2022, big Japanese companies in Taiwan have conducted private evacuation simulations in the event of a Chinese invasion © Annabelle Chih/Getty Images
Japanese government officials are telling companies they would be “on their own” if they needed to evacuate staff from Taiwan in case of a Chinese attack, according to people familiar with the matter, a message that has hit one of Taiwan’s largest sources of foreign direct investment.
Tokyo’s warning highlights the practical and political difficulties for governments and companies in the region of preparing for a potential cross-Strait war. Beijing claims Taiwan as part of its territory, and has threatened to take it by force if Taipei refuses indefinitely to submit to its control.
The US military has been discussing operational plans for such a scenario with its allies, but obtaining political commitments has proven more challenging. The Financial Times reported last week that the Pentagon had pressed Japan and Australia to clarify what role they would play in a US-China war over Taiwan, frustrating Tokyo and Canberra.
Two Japanese officials told the FT that, under the country’s pacifist constitution, its military could only be deployed abroad with approval from a host government.
Given that Japan does not recognise Taiwan diplomatically — as with all but 12 countries in the world — there “is no government in Taiwan from our viewpoint”, one of the officials said. They added that China was unlikely to grant the Japanese military approval to conduct evacuations.
Although the Japanese government has never confirmed this line as its official position, companies have been receiving the warnings for about three years, diplomats and corporate executives said.
Japanese diplomats told company risk officers that “you are on your own if you put significant assets in Taiwan”, said one person present at one of the conversations.
The warnings have had a chilling effect on Japanese business in the country.
“It has discouraged investment. There is lots of new US investment in Taiwan, but barely any Japanese,” said a US official familiar with the issue.
Foreign direct investment by Japanese companies — traditionally Taiwan’s third-largest source of FDI, after the EU and US — slumped 27 per cent last year to $452mn, and is down from a peak of $1.7bn in 2022.
Almost 3,000 Japanese companies have operations in Taiwan, according to Teikoku Databank, a research group, of which one-third is involved in manufacturing, especially semiconductor materials and equipment. Retailers, wholesalers and restaurant groups are also big investors.
Many multinationals reassessed the risks to their assets in both Taiwan and China after then-US House Speaker Nancy Pelosi’s visit to Taipei in 2022 prompted Beijing to launch large-scale military exercises around Taiwan. But acute concerns over the risk of war had mostly died down since then, executives and consultants said.
In contrast to the drop in Japanese investment, FDI from several other countries hit record levels in 2024, driven by funding for data centres and offshore wind farms. Investment from US companies reached $938mn in 2024, almost double the 2022 amount, while that from the UK almost tripled over the same period to $1.54bn.
People familiar with the US-Japan military alliance called Tokyo’s messaging to companies unhelpful, with one person saying that in a crisis, operational needs were likely to outpace “Japanese bureaucrats tying themselves in pretzels”.
In 2021, Japan’s military participated in evacuations from Afghanistan without local government approval after the Taliban toppled the Nato-backed administration in Kabul. Some military experts cited that operation as a potential precedent for Taiwan.
But a Japanese executive said that, in the absence of security guarantees from either Tokyo or Washington, the “risk assessment pretty much leads us to little interest in Taiwan” as an investment destination.
Since 2022, several big Japanese companies have conducted annual simulations of evacuating employees in Taiwan in the event of a Chinese invasion, according to two people familiar with the matter.
Japanese government officials have attended these exercises, but not in an official capacity, the people said. The implicit understanding was that such efforts would be a private sector operation, according to one of the people.
One of the people involved in the private sector plans said any evacuations were envisioned as occurring before a Chinese invasion, but such operations would need handling carefully to avoid attracting Beijing’s attention and jeopardising mainland China staff.
“The key issue is timing and who can be supported,” the person said. “We need to take pre-emptive and proactive actions to bring back our people . . . This scenario doesn’t have any Self-Defence Forces or military support.”
Japan’s defence ministry said it was difficult to answer a hypothetical question regarding a Taiwan emergency. The country’s response would be “implemented on an individual and specific basis in accordance with the constitution, international law, and domestic laws and regulations, including the legislation for peace and security”.
Japan’s foreign ministry said protecting citizens overseas was one of the government’s most important responsibilities.
“In the event of a situation where the evacuation of Japanese nationals is necessary anywhere in the world, including Taiwan, we will make every effort to support the evacuation . . . by utilising the fastest and safest means while exploring all possibilities,” it said.