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

(upbeat music) Looking for the perfect rental? Discover top rated stays loved by guests. Rated highest by real guests through authentic reviews. These traveler loved stays are recognized by the details that matter most and validated by real experiences. Choose confidently for rentals you can trust. Verbo, book now of occasion rental loved by guests. (upbeat music) It's Tuesday, the 13th of October. Welcome to the PDB afternoon bulletin. I'm Mike Baker, your eyes and ears on the world stage. All right, let's get briefed. First up, Xi Jinping's super power ambitions are creating serious problems for China's economy, threatening to undermine the very global dominance that he spent years trying to achieve. Later in the show, Britain's top spy warns that Iran and Russia are escalating covert attacks across Europe, targeting military installations and critical infrastructure. But first, today's afternoon spotlight. For more than a decade, China's president, Xi Jinping, has been pouring enormous resources into an effort to turn China into the world's dominant superpower, massive factories, advance technology, artificial intelligence, and a military capable of challenging the US. Now, in some respects, the strategy is working. China has become an industrial powerhouse, capable of producing everything from electric vehicles and batteries to sophisticated weapons systems. But there is a problem. Xi has been borrowing enormous amounts of money to finance those ambitions. And increasingly, the Chinese economy is struggling to keep up. A new investigation by the Wall Street Journal reveals just how expensive she's ambitions have become. And why the strategy that he believes will make China the world's dominant power may be creating serious problems for the country's economic future. Since Xi took power in 2012, the amount of outstanding credit across China's economy has increased by more than $43 trillion to put that in perspective. The total annual economic output of the US is approximately $32 trillion, give or take a couple of bucks. And all that borrowing has helped finance an extraordinary expansion of China's industrial capabilities. Beijing has directed money toward enormous factories, high speed rail networks, advanced semiconductor facilities, electric vehicle manufacturing, and countless other projects intended to make China the undisputed leader in strategic industries. Xi's thinking is that economic power and national security go hand in hand. If China dominates the technologies and industries of the future, it becomes less dependent on the West and better positioned to challenge American influence. But here's where the trouble begins. Building a factory doesn't necessarily mean there's enough demand for what that factory produces. And China's government has encouraged companies and local officials to build enormous amounts of manufacturing capacity, often with borrowed money, whether the market can support it or not. The automobile industry provides a particularly revealing example. According to new figures reported by the Associated Press, Chinese passenger car exports surged 64% in September compared with a year earlier. But sales inside China fell by 27%. Chinese factories are shipping enormous numbers of vehicles overseas, while the domestic market for those same vehicles is shrinking. And that creates a problem, of course. Manufacturers compete aggressively for customers, cutting prices and squeezing profits. And the more China depends on exports to absorb all that production, the more vulnerable it becomes to foreign tariffs and trade restrictions. We're already seeing that play out as governments in Europe and elsewhere move to protect their own industries from a flood of Chinese products. And the problems aren't confined to manufacturing. For years, China's economy relied heavily on a booming real estate industry. Developers built enormous apartment complexes. Households invested their savings and property and local governments collected substantial revenue from selling land. But that boom has now gone bust. Property investment has plunged, housing prices continue falling and millions of apartments remain unsold. That has left Chinese families feeling poorer and less inclined to spend, while local governments have lost a major source of revenue. And those local governments have another problem. Many borrowed enormous sums to finance the infrastructure and industrial projects that Beijing encouraged them to pursue. Now they're struggling to pay those bills. In fact, just last week, China's finance ministry announced another $82 billion in borrowing capacity to support local governments and infrastructure. More than half that money is intended to help local authorities simply maintain ordinary government operations. In other words, Beijing isn't simply borrowing money to build the next generation of factories and infrastructure. It's also borrowing to help parts of the government continue functioning. Meanwhile, they cost a servicing all that debt, well, as you might guess, is rising. According to the Financial Times, nearly one fifth of China's central government general public budget is expected to go toward debt payments this year, up considerably from just over a decade ago. That's money that can't be spent elsewhere without additional borrowing or higher taxes or cuts to other programs. And that brings us to Xi Jinping's larger dilemma. China has made genuine advances in several industries critical to its strategic competition with the US. It's electric vehicle companies or formidable competitors. Its battery manufacturer dominates important global markets. And Beijing continues investing heavily in semiconductors and artificial intelligence, robotics, and military technology. Chinese factories continue expanding while Chinese consumers remain reluctant to spend. Local governments are struggling with debt while Beijing keeps directing money toward more industrial development. And foreign markets are becoming less welcoming to the enormous quantities of products China needs to sell. Xi could try to change course, directing more resources toward households and private businesses rather than state-backed industrial expansion. But doing that would mean reconsidering an economic strategy that's been central to his vision of China's rise. And there is little indication that he's prepared to make such a dramatic change. Now for Washington, this presents an interesting picture. China is becoming a more formidable competitor in advanced technology and military power. But at the same time, Xi's determination to dominate those industries is creating financial vulnerabilities that could limit China's strength over the long term. After more than a decade of extraordinary spending and borrowing, the bill for Xi's ambitions, at some point, will come due. All right, coming up next, Britain's top spy. Sounds the alarm as the Iranian regime reportedly targets military bases outside the Middle East and Russia steps up sabotage attacks across Europe. I'll be right back. Hey, Mike Baker here. Now you've heard me talk about brunt workwear and workboots before, right? Because the quality and the fit and the durability is amazing. But maybe the most amazing thing about brunt is the ability to wear their boots to work before deciding whether you want to keep them. Seriously, wear them on the job site. And if they're not the right fit, you can send them back for a full refund. 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Now, McCallum describes a shift toward, quote, "Iranian ambitions to come at harder targets like military sites," end quote. We've already seen the concerns surrounding one of those sites play out at RAF Fairford, the British Air Base American B-1 bombers used during strikes against Iran. On Monday, British Prime Minister Annie Burnham said Tehran was, quote, "highly likely to have been responsible for the suspected plot against that base." The incident prompted a security alert and concerns about the base contributed to Washington's decision to withdraw the remaining American B-1 bombers. Now, Iran continues to deny any involvement, just as it rejects the accusations of hostile activity in Britain. Well, if the Iranian regime and the IRGC say that they're not engaged in shenanigans, I'm sure we can take them at their word. They've always been "reasonable and transparent" in the past. McCallum wouldn't discuss the details of any ongoing investigation, but he did make clear that Fairford isn't the only case worrying British intelligence. Quote, "The RAF Fairford incident is not unique. There have been other examples, not just in the UK, but around the world," end quote. Over the past year alone, McCallum says Iran-linked operations have led to more than 50 arrests. But wanting to attack a military installation and having the ability to pull it off are two different things. When reporters asked whether Iran could mount a complex attack using explosive drones, McCallum said the criminals and proxies that it relies on in Britain have not demonstrated that level of sophistication. But McCallum cautioned that in countries closer to Iran's borders, the Islamic Revolutionary Guard Corps, the IRGC, has experienced carrying out more aggressive and sophisticated operations using hybrid technology. And then there's Russia, which McCallum calls "aggressor number one." We've discussed here on the PDB how Moscow is stepping up sabotage, cyber attacks, espionage and arson against Ukraine's European allies, staying below the threshold of conventional warfare and using proxies to make responsibility harder to establish. McCallum tied those operations directly to Russia's struggles on the battlefield in Ukraine, quote, "It's no accident that Russian aggressors are trying to unsettle other European homelands at a time when their military progress in Ukraine is minimal," end quote. He pointed to the attempted drone attack against a cargo aircraft at Germany's Leipzig-Halla Airport in August, and a cyber attack against Poland's energy infrastructure. Germany has blamed Russia for the airport incident, Moscow calls that accusation, quote, "entirely fabricated." What nothing to see here? Now in a separate arson case, Poland is blaming Russian intelligence for last month's fire at a Starling station supporting Ukraine's communications. You may recall we previously discussed the Starling station in Poland that was set on fire this past month. When we covered it, Polish officials suspected of Russian connection but hadn't publicly assigned responsibility. "Now," Poland's intelligence minister says, quote, "we have no doubt that Russian intelligence services are behind this act of sabotage," end quote. Polish officials announced yesterday that two Turkish nationals had been arrested in Germany in connection with the suspected attack. They're accused of deliberately setting fire to Starling infrastructure on 23rd of September about 25 miles south of Warsaw. Starling is a particularly valuable target because of its role in Ukraine's military operations. Ukrainian forces rely heavily on the satellite network to communicate and coordinate, including in Russian occupied territory. Since Russia's full scale invasion in February of 2022, the Associated Press has tracked more than 210 incidents across Europe that Western officials consider sabotage or other malign activity linked to Moscow, including, of course, the Polish Starling fire. And that, my friends, is the PDB afternoon Bulletin for Tuesday, the 13th of October. Now, if you have any questions or comments and I hope you do, just reach out to me at PDB at thefirsttv.com and to listen to the show "Add Free" where you can do that, it is very, simple. Just become a premium member of the president's daily brief by visiting PDB premium.com. I'm Mike Baker and I'll be back tomorrow. Until then, stay informed, stay safe, stay cool. Let me take just a minute to talk to you about an incredibly important subject, the absolute key to your health, in fact. I'm talking about sleep. So let me ask you a question. Do you snore? I know, it's a little personal. 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