A growing web of U.S. restrictions on trade and investment in China — combined with China's own tightening rules — is fueling a market for China-related data.

Why it matters: U.S. businesses and lawmakers need accurate data about Chinese companies and the country's economy to make decisions, ensure compliance and formulate policies, but Beijing is increasingly limiting access to that information.

What's happening: Open-source intelligence companies are seeing a business opportunity amid rising demand for China-related business and economic data.

• "Private-sector actors are increasingly relying upon a range of commercially available data to comply with sanctions and other legal obligations, such as anti-money laundering, anti-corruption and forced labor," Alex Zerden, founder of Capitol Peak Strategies and a former U.S. Treasury official, told Axios.

Driving the news: Last week, the U.S. Commerce Department added 42 more Chinese companies to an export control list for their support of Russia's military, a move that China's Foreign Ministry called "economic coercion and unilateral bullying," Reuters reports.

• In October 2022, the administration blocked U.S. exports of advanced computing chips and components to China.
• In order to comply with trade restrictions, U.S. companies need access to corporate ownership structure and procurement information for the Chinese companies they work with.

What they're saying: "There's no question that better insight into China is front and center in policymakers' minds," said Martijn Rasser, who manages U.S. operations at Datenna, a Dutch open-source intelligence company that opened a U.S. subsidiary this year amid rising government demand.

• Datenna focuses on U.S. government clients and provides "information that helps people better understand who they are doing business with, what their role is in China's economy, and how those companies and people within those companies interact with each other," Rasser said.
• "We're in the middle of a strategic competition with China. You have to understand what your competitor is doing. The better insight you have, the better the odds are that you pursue policies that will ensure that you can effectively compete for the long term."

The intrigue: This year, Chinese authorities restricted overseas access to many kinds of data, including business databases like Qichacha, financial database Wind Information, and journal article database CNKI, as well as an ever-expanding set of economic information including youth unemployment statistics.

• There have long been doubts about the accuracy of Chinese government-provided statistics about economic growth, and those concerns have only intensified this year as the Chinese economy has sputtered and the Chinese government has put pressure on economists to avoid making negative comments about the economy.
• Authorities have also cracked down on foreign auditors and due diligence firms operating in China, and the country's recently expanded anti-espionage law now applies a national security lens to many kinds of data sharing.
• The data restrictions have come in part as a comprehensive data regulation regime the Chinese government has constructed over the past few years. They are also a direct response to the publication of reports by U.S. think tanks on topics the Chinese Communist Party views as sensitive, such as the use of civilian technology for military purposes.

Between the lines: "At the heart of it is a national security concern in [the CCP's] eyes," Liza Tobin, senior director of research and analysis for economy at the Special Competitive Studies Project and former China director at the National Security Council under the Trump and Biden administrations, told Axios.

• "If it's data about the Chinese government, if it's about things going on in China that could put China in a negative light, they don't want that out there," she said.
• National security is reaching "into all domains of life in Chin."

What to watch: President Biden's executive order on outbound investment screening, though limited in scope, will place unprecedented requirements on U.S. companies to perform greater due diligence on their partners in China and to submit data back to the U.S. government about certain investments there.

Commentary in Chinese state media and heavily censored social media platforms has blamed U.S. involvement in the Middle East as the underlying cause of the violence gripping Israel and Gaza after Hamas' deadly attack over the weekend.

• Why it matters: Beijing is presenting itself as a better peacemaker in the Middle East on the heels of its successful role in brokering a deal between Saudi Arabia and Iran earlier this year.

The big picture: Chinese critics identified U.S.-brokered normalization of relations between Israel and several Arab nations, and ongoing U.S. support for the Israeli government, as the source of unbearable pressure for Palestinians.

What they're saying: "The U.S. has been making plans for solving Palestine-Israel conflict without involving Palestine; and then it forces such plan on Palestine," Liu Zhongmin, a professor at the Middle East Studies Institute of Shanghai International Studies University, told the state-backed Global Times.

• "A wave of reconciliation in the Middle East won't last long with the Palestine-Israel conflict remaining unsolved."
• The Global Times article also presented China as a better partner for conflict resolution, describing its recent role in brokering the normalization of diplomatic relations between Saudi Arabia and Iran as an "exemplary role in solving Palestine-Israel conflicts."

Anti-U.S. and anti-Israel sentiment was widespread on Chinese social media platform Weibo, which is heavily censored.

• "America, Britain, Israel. The Earth's three major troublemakers. Without these three nations, the world would be much more peaceful," one prominent blogger wrote.

Background: In the 1960s and '70s, the Chinese government openly supported the Palestinian cause as a fellow liberation movement and did not have diplomatic relations with Israel. In later decades, it changed that stance and now maintains warm ties with both Israel and Palestine, which China recognizes as a state.

• While Islamophobia is common in China, so is antisemitism, and some Chinese nationalists view Israel as complicit in U.S. imperialism in the Middle East.

What Beijing is saying: The initial statement from China's Foreign Ministry on Oct. 8 was vague, calling on "relevant parties" to "exercise restraint" and adding that "the fundamental way out of the conflict lies in implementing the two-state solution and establishing an independent State of Palestine."

• But in a rare move, China strengthened its statement somewhat after criticism from an Israeli official and after Senate Majority Leader Chuck Schumer, who was visiting Beijing with a congressional delegation, met with Chinese President Xi Jinping on Sunday and urged him to issue a stronger condemnation of the attacks.
• The updated statement still didn't denounce Hamas but did condemn "all violence and attacks on civilians" and added that "the most urgent task now is to reach a ceasefire and restore peace," per The Hill.
• Biden called the Hamas attack "sheer evil" and said the "United States has Israel's back."

Between the lines: Beijing doesn't want to pick sides, but in this conflict, not taking a strong position is risky as well.

• "Anything other than full-throated condemnation of Hamas won't be enough for Israel, but China taking a strong stance risks irritating its Arab and Iranian partners," Foreign Policy deputy editor James Palmer wrote.

The bottom line: Blaming the U.S. avoids this conundrum.

1. A bipartisan delegation of U.S. senators met with Xi in Beijing as part of an effort to stabilize the fragile relations between the U.S. and China. Go deeper.

2. Australian Chinese journalist Cheng Lei has been released and returned to Australia after more than three years in detention in China, where she faced national security charges, the Sydney Morning Herald reports.

3. A person who crashed a car into the Chinese Consulate in San Francisco on Monday was shot by police and later died in the hospital. Go deeper.

• The consulate condemned the incident in a statement and said it "reserves the right to pursue responsibilities related to the incident." The White House also condemned the incident.
• San Francisco is due to host the Asia-Pacific Economic Cooperation summit next month, where Biden will possibly meet with Xi.

4. A U.S. Navy sailor arrested on national security charges pleaded guilty to conspiring with a Chinese intelligence officer and receiving a bribe. Go deeper.

The world's second-biggest economy continues to grind its gears, as its crucial property industry flails, Axios' Matt Phillips writes.

Why it matters: At its peak, China's residential property sector was thought to contribute an estimated 25%–30% of the country's GDP. Its ongoing struggles present a challenge to economic growth in China that will ripple out to other nations — as China has been the largest single source of growth for the world economy in recent decades.

The latest: Country Garden, the largest Chinese property developer thought to have close ties to the central government, failed to make a payment on an international bond on Tuesday and released a statement saying that it would likely default on bonds denominated in U.S. dollars and other currencies.

• Meanwhile, in its closely watched World Economic Outlook report issued on Tuesday, the International Monetary Fund cut its expectation for Chinese growth — and noted that China's troubled property sector poses a risk to both the domestic economy and the commodity exporters that rely on Chinese demand.
• Separately, a Bloomberg news report — citing anonymous sources — suggested that the government was planning more fiscal stimulus aimed at lifting growth, a signal that Beijing is becoming increasingly concerned about the economy's trajectory.

Between the lines: Such reports on the worsening outlook for the Chinese economy seemed to weigh on key global commodities prices on Tuesday.

• Prices for Brent crude oil, the global benchmark — which had soared in recent days on political risks posed by the war between Hamas and Israel — relented.
• Copper prices, viewed as a key barometer of growth in China, also slipped.

Roll on, roll off: China accelerates construction of "ro-ro" vessels, with potential military implications (CSIS)

• "Driven by surging electric vehicle sales, China has quickly established itself as a global powerhouse in the automotive industry. Meeting demand has pushed Chinese automakers to order record numbers of 'roll on-roll off' (ro-ro) ships — which are specifically designed to ferry vehicles to distant markets."
• "While ro-ros are generally innocuous, Chinese military planners have taken note of their dual-use capabilities and are making use of the ships to enhance the capabilities of the People's Liberation Army."

Scared off: China is becoming a no-go zone for executives (Wall Street Journal)

• "Beijing's tough treatment of foreign companies this year, and its use of exit bans targeting bankers and executives, has intensified concerns about business travel to mainland China."
• "Some companies are canceling or postponing trips. Others are maintaining travel plans but adding new safeguards, including telling staff they can enter the country in groups but not alone."

Taiwan celebrated its 112th National Day yesterday with parades, jet flyovers and lots of Taiwanese flags.

• The Republic of China, Taiwan traces its history to the Xinhai Revolution in October 1911, when China's last imperial dynasty fell and was replaced by the Republic of China — a government that later fled to the island of Taiwan in 1949.