In partnership with
Australia
(John Coyne – ASPI The Strategist) The Australian Army and the Northern Territory government are aligned on defence strategy. The next step is implementation. The 2026 National Defence Strategy (NDS), released on 16 April, established Australia’s strategic direction for an era of intensifying strategic competition. Later that month, the Northern Territory government followed with its own defence strategy at NT Defence Week. On 6 July, the Australian Army released its 2026 contribution to the NDS. The close alignment between the latter two documents is unsurprising because both seek to implement the NDS, albeit from different institutional perspectives. The more interesting question is whether that alignment is sufficient to translate strategy into capability. – The army and Northern Territory are strategically aligned. Now move to action | The Strategist
China
(Sunny Cheung – The Jamestown Foundation) Distillation has become essential to the rise of Chinese artificial intelligence (AI) models. Chinese academic and industry papers published in the period 2024–2026 detail how distillation takes place—including adversarial distillation—and provides insight into the kinds of entities involved in the work of using leading models to build capabilities that rival the world’s best models. The prize is frontier reasoning: the step-by-step “chain of thought” that is the most expensive capability to build and the one on which U.S. laboratories lead most clearly. The Chinese research literature documents a deliberate, premeditated effort to distill that capability. Some published Chinese research also focuses on engineering distillation techniques to evade detection. Much of this work is conducted by researchers affiliated with the People’s Liberation Army, the defense industry, and the Chinese Academy of Sciences. Distilled models are either already being used, or are proposed to be used, for public security applications such as surveillance and monitoring systems, and for military and cyber operations. – Chinese Research Details Distillation for Military Use – Jamestown
China – South China Sea
(Bec Strating – ASPI The Strategist) In the South China Sea, China is expanding its presence in disputed waters and adopting increasingly dangerous tactics against neighbouring states. At the same time, it is challenging the centrality of the United Nations Convention on the Law of the Sea (UNCLOS) as the foundation of global order at sea, a decade after an arbitral tribunal rejected Beijing’s sweeping maritime claims. And it is doing so at a time when international attention has been diverted by crises in Europe, the Middle East and the Western Hemisphere. A recent clash between the China Coast Guard and the Philippine Navy near the Second Thomas Shoal, a reef in the South China Sea, prompted each government to summon the other’s ambassador. The incident was only one manifestation of a broader trend. China’s activities in critical contested areas of the South China Sea have accelerated over the past year. At the annual South China Sea Conference hosted by the Center for Strategic and International Studies in Washington this month, two trends stood out. – China pushes harder in South China Sea – as global attention drifts away | The Strategist
Russia
(Paul Globe – The Jamestown Foundation) Ukrainian drone attacks on Russian refineries have sparked a country-wide gas shortage and cost Moscow significant export earnings. They are far from the only threat to Russia’s oil industry. Other, less dramatic threats are likely to prove more significant. Much of Russia’s pipeline network and tanker capacity, dating from Soviet times, is aging and increasingly prone to leaks, reducing the flow of oil to refineries and export markets on which the Kremlin relies while fueling growing anger among Russians. As older fields are exhausted, Russia is being forced to develop new ones in the Far North, where global warming threatens infrastructure and collapse and requires money Moscow lacks or refuses to spend to prevent new disasters. – Ukrainian Drone Attacks on Refineries Far From Only Threat to Russia’s Oil Industry – Jamestown
Russia – Ukraine
(Tatiana Vorozhko, Inna Kubai – The Jamestown Foundation) The Kremlin has returned only a small share of the Ukrainian children it transferred to Russia since its full-scale invasion of Ukraine. Ukraine has documented more than 20,000 forced transfers of children, only 2,404 of which have been returned. Forcibly separating children from their parents during filtration (фильтрация, fil’tratsiia)— Russia’s compulsory security screening of Ukrainian civilians in occupied territories—is one of six major mechanisms Russia has used to deport Ukrainian children to Russia, illustrating the coercive nature of separations and deportations. Russia uses deported Ukrainian children to address Russia’s demographic decline and replenish its future military ranks. Nearly 47,000 Ukrainian children received Russian citizenship between April 2022 and June 2023. The separation of children from their parents in an already traumatic environment inflicts severe psychological harm, leaving many with long-term emotional and developmental consequences. – Russia’s Filtration System Facilitates Deportation of Ukrainian Children – Jamestown
Serbia
(Blerim Vela – The Jamestown Foundation) Serbian President Aleksandar Vučić’s reported late-June move to leave the presidency while preparing to return as prime minister. This is a continuity maneuver rather than a strategic change of direction. Serbia’s regional posture toward Kosovo, Bosnia and Herzegovina and Montenegro is likely to remain unchanged. Belgrade treats neighbors’ sovereignty as conditional, a logic that resembles the Brezhnev Doctrine’s limited sovereignty model and later Russian President Vladimir Putin-era arguments about protecting Russians abroad. Ambiguity over the sovereignty of Serbia’s neighboring states is a problem because it is treated as negotiable, while revisionist actors gain leverage and regional stability and the region’s complete Euro-Atlantic anchoring becomes harder to achieve. – Vučić Uses Brezhnevian Playbook on Politics of Conditional Sovereignty – Jamestown
US
(Heidi E. Crebo-Rediker – Council on Foreign Relations) China’s weaponization of its dominance over critical minerals, rare earths, and permanent magnets has forced the United States to abandon the fiction that markets alone will deliver secure supply chains. Beijing controls most of the processing, separation, refining, and magnet-making capabilities that stand between a mineral in the ground and its use in an aircraft, missile, car, robot, phone, semiconductor, or magnetic resonance imaging (MRI) machine. Since 2010, when China first weaponized Japan’s access to critical minerals over a maritime dispute, China has demonstrated its willingness to restrict exports of strategic materials and technologies when doing so serves its geopolitical interests. China’s leverage is not limited to export controls. It also derives from its ability to manipulate critical minerals prices. Chinese producers—supported by state subsidized financing, preferential access to cheap energy, industrial policy, and demand from an enormous state-directed domestic market—can, unlike market-based competitors, tolerate low or even negative returns. For the United States and its allies, price declines orchestrated by China can make prospective projects uneconomic, deter private investment, and bankrupt new producers before they reach scale. China can then tighten supply once competing capacity has disappeared. China’s weaponization of its critical minerals has created a national emergency. The United States must de-risk its supply chains far faster than market forces would naturally permit. That requires industrial policy intervention, public-private partnerships, and public financing. The harder question is what form that financing should take. The Trump administration has increasingly answered that question by taking equity and quasi-equity positions in strategically important companies and projects. CFR’s “U.S. Government Deal Tracker” records investments announced since January 2025 involving common and preferred shares, warrants, as well as other instruments through which the government participates in future value. Those investments span several sectors, but critical minerals have become one of the most important testing grounds for Washington’s emerging role as a shareholder. Experimentation is justified. Certain critical minerals capabilities are too important to national security, too exposed to Chinese market power and coercion, and too difficult to finance on conventional terms for the government to remain passive. But the U.S. government is assembling a diverse portfolio before it has established a coherent framework for authorizing, valuing, managing, reporting, and eventually disposing of those assets. The answer is not to reject equity as an economic tool. It is to use it strategically, with transparency, oversight, and guardrails—and as part of a broader architecture designed to build commercially sustainable supply chains that serve national security interests while keeping markets free but not defenseless. – The Shareholder State: Washington’s Improvised Bet on Critical Minerals | Council on Foreign Relations
US – Israel
(The Soufan Center) Israeli Prime Minister Benjamin Netanyahu held a long-sought-after meeting with President Trump in Washington this week, but the discussions produced no new initiatives to end the five-month-long Iran war or de-escalate other regional conflicts. The two governments share the vision of an integrated and Western-aligned Middle East but differ on the extent to which hard power alone can counter the challenges posed by Iran and its “Axis of Resistance” partners. Although U.S. officials feared Netanyahu would press Trump to restart combat against Iran, Tehran precipitated that result by launching a “surprise attack” on a U.S.-manned base in Jordan hours after the Trump-Netanyahu meeting concluded. The Iranian attacks signaled Tehran’s rejection of Oman’s proposals to fully reopen the Strait of Hormuz and to restart U.S.-Iran talks under the June Memorandum of Understanding (MOU). – Iran Re-ignites War as Netanyahu Visits Washington – The Soufan Center
