Good evening. Our cover story this week takes readers into the fascinating history of Chinese money laundering and underground banks. The issue has become a policy priority for the U.S. because of its role in fentanyl trafficking, but often overlooked is how much Chinese money laundering overlaps with Beijing’s capital controls, legitimate trade policies and even state-owned banks. Elsewhere, we have infographics on China’s attempts to obscure civil-military fusion; an interview with Danny Alexander about his experience working at the Asian Infrastructure Investment Bank; a reported piece on another U.S. university ending its partnership in China; and an op-ed on how China is preparing for America’s next president. If you’re not already a paid subscriber to The Wire, please sign up here.
Want this emailed directly to your inbox? Sign up to receive our free newsletter.

Cleaning Up
Chinese money laundering syndicates are the partners-of-choice for Latin American cartels who flood the U.S. with fentanyl. But despite Sino-American cooperation on the issue, experts warn that the U.S. is just barely grasping what is at stake. Fentanyl, it turns out, is merely the deadliest chapter in a millennium-old story of informal Chinese networks driving black markets — and they’re getting stronger. Sean Williams reports.

The Big Picture: China’s Military-Civil Defusion
China’s civilian industry is still tightly integrated with the military, but open discussion of the link is less frequent. This week’s infographics look at how Chinese companies are obscuring their ties to the National Military-Civilian Fusion Industry Investment Fund.

A Q&A with Danny Alexander

Sir Danny Alexander is the vice president for policy and strategy at the Asian Infrastructure Bank, the multilateral development bank set up by China in 2016. He joined the bank after spending five years as a senior member of the British government, after his Liberal Democrat party joined a coalition under former Conservative Prime Minister David Cameron. Under Cameron, the UK pursued the so-called ‘Golden Era’ policy designed to deepen ties with China, which included the decision to join the AIIB as a founding member despite opposition from the Obama administration. In this interview with Andrew Peaple, Alexander — who is set to leave AIIB in October and join HSBC — discusses how the bank developed and the extent of Chinese influence over its operations.
Danny Alexander
Illustration by Lauren Crow

The Academic Fault Line
As another major U.S. university ends its partnership in China, the future of higher education exchanges between the two countries looks bleak. Aaron Mc Nicholas reports.

How China Is Preparing for America’s Next President
China is feeling under siege, argues Yu Jie of Chatham House in this week’s op-ed, and it is girding itself for long-term enmity with the world’s largest economy.
Subscribe today for unlimited access, starting at only $19 a month.