1. Beijing Deploys Legal Tools to Counter U.S. Sanctions

What Happened: On May 2, China’s Ministry of Commerce issued a prohibition order under its 2021 Blocking Rules, ordering domestic companies not to recognize or enforce U.S. sanctions on five Chinese petrochemical firms linked to Iranian oil transactions. The directive shields private Chinese refiners from U.S. sanctions tied to the Iranian oil trade and prohibits domestic compliance. This marks a stark departure from Beijing’s longstanding approach of publicly criticizing U.S. sanctions while often allowing major firms to comply to preserve access to the U.S. financial system.

Why It Matters: Beijing is now using the legal tools it built between 2020 and 2022, including its formalized export control regime, to counter U.S. “long-arm jurisdiction.” This escalation puts pressure on Chinese banks and corporations, leaving them caught between domestic mandates and international financial compliance. Ultimately, both Washington and Beijing are aggressively testing each other’s boundaries, capacities, and economic leverage just one week before the high-stakes Trump-Xi summit in Beijing.

By Shengyu Wang, Research Assistant, Center for China Analysis

Learn More: Read “Guided Autonomy: America Watching in Xi’s China“ by CCA Senior Fellow Guoguang Wu.

2. Wang–Rubio Call Spotlights Taiwan Ahead of Beijing Summit

What Happened: On April 30, China’s Minister of Foreign Affairs, Wang Yi, held a phone call with U.S. Secretary of State Marco Rubio to discuss U.S.-China relations and prepare for the upcoming Trump-Xi summit. The two officials discussed Iran, the war in Ukraine, and U.S. sanctions and technology controls on China, among other hot-button issues. Taiwan, in particular, was discussed at length. Wang Yi reiterated that Taiwan is a non-negotiable “core interest,” warning against U.S. support for Taipei, while Rubio emphasized deterrence and support for Taiwan, framing it in terms of democracy and regional stability.

Why It Matters: Their positions on Taiwan remain fundamentally incompatible, setting up a delicate discussion between Trump and Xi in Beijing. Trump could ease tensions by shifting U.S. rhetoric—for example, by publicly stating that the United States “opposes Taiwan independence” as Beijing desires. Such a move could reduce friction over the thorniest issue in U.S.-China relations by signaling clearer limits on U.S. support for Taiwan independence. However, any rhetorical shift has risks: it would likely face pushback in Congress, draw concern in Taiwan, and could prompt Congress to insert new legislative language pushing back on Trump’s formulation.

By Lyle Morris, Senior Fellow on Foreign Policy and National Security, Center for China Analysis (@LyleJMorris)

Learn More: Read “Xi Travels Less but the World Is Coming to Beijing“ by CCA Fellow Neil Thomas and CCA Intern Yuxuan Wei.

3. Taiwan’s President Lai Visits Eswatini Despite Airspace Disruptions

What Happened: On May 5, Taiwan’s President Lai Ching-te returned to Taipei after completing a state visit to Eswatini, its only African diplomatic ally. China reportedly pressured three Indian Ocean states—Seychelles, Mauritius, and Madagascar—to revoke overflight permission for Lai’s aircraft, delaying the trip by about ten days from its original April 22 start date for King Mswati III’s 40th accession anniversary. Lai ultimately flew aboard the private jet of the King, with the return trip taking a sweeping southern detour through the Indian Ocean. Three Taiwanese Air Force F-16s escorted the aircraft as it re-entered Taiwanese airspace.

Why It Matters: Taiwan’s successful visit demonstrates its resilience in maintaining formal partnerships under pressure, including through the use of “arrive then announce” diplomacy to circumvent interference from China. Meanwhile, China’s pressure on Eswatini reflects its broader strategy to raise the political and reputational costs of maintaining ties with Taiwan. The episode also suggests this competition is extending into more operational domains—such as overflight permissions and transit access—creating a more restrictive environment in which Taiwan’s external engagement increasingly relies on ad hoc arrangements.

By Feifei Hung, Affiliated Researcher, Center for China Analysis

Learn More: Read “Positioning the KMT in the U.S.–China–Taiwan Triangle: Cheng Li-wun’s Early Tenure“ by CCA Senior Fellow Lyle Morris and CCA Intern Sheng-Wen Cheng.

4. Australia and China Advance Jet Fuel Cooperation

What Happened: From April 28 to 30, Australian Foreign Minister Penny Wong traveled to China to meet her counterpart, Wang Yi, China’s Minister of Foreign Affairs. The pair convened the eighth China-Australia Foreign and Strategic Dialogue to foster mutual trust and cooperation. Both sides reaffirmed the importance of their bilateral relationship and commitment to deeper collaboration. Wong also announced that China agreed to cooperate with Australian businesses on jet fuel shipments.

Why It Matters: Amid ongoing instability and energy market volatility from tensions over the Strait of Hormuz, China-Australia cooperation is vital in bolstering energy security for both nations and regional partners. Since March, China has reduced its fuel exports to protect its domestic supply. However, China’s openness to working with Australia lends credibility to reports that it may loosen its restrictions on fuel exports this month.

By Taylah Bland, Fellow on Climate and the Environment, Center for China Analysis (@Taylahbland)

Learn More: Read “The Evolving Politics of Climate Change in China“ by CCA Senior Fellow Guoguang Wu and CCA Fellow Neil Thomas.

5. Xi Urges Youth to Serve National Priorities

What Happened: Ahead of China’s Youth Day, Xi Jinping sent a letter to representatives of Chinese youth, urging them to follow the Party’s guidance and dedicate themselves to frontline sectors like technological innovation, rural revitalization, social services, and border defense. The letter calls on young people to align their personal ambitions with the broader goals of national development. This message comes as 2026 marks the first year of the 15th Five-Year Plan, presenting new opportunities for youth to drive national progress.

Why It Matters: During his first term, Xi introduced China’s first central-level youth development blueprint—the Medium- and Long-Term Youth Development Plan (2016–2025)—which promoted youth advancement across ten key areas, including ideology, education, health, employment, and entrepreneurship. In the ideological sphere, Beijing launched initiatives such as the “Young Marxists Training Project,” aimed at cultivating no fewer than 200,000 young Marxists annually. While the CCP likely does not lack young political loyalists, the more pressing question is whether it faces a shortage of talent capable of driving national strategic priorities. How Beijing plans to cultivate such talent over the next decade will be an important issue to watch.

By Lobsang Tsering, Senior Research Associate on Chinese Politics, Center for China Analysis

Learn More: Read “The 19 Percent Revisited: How Youth Unemployment Has Changed Chinese Society“ by CCA Fellow Barclay Bram.

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Washington’s AI strategy reflects genuine strategic concerns: that the United States is locked in a decisive race with China for artificial general intelligence (AGI), that whoever crosses the finish line first wins a permanent strategic advantage, and that maximum acceleration, paired with maximum denial of chips and technology to Beijing, is the only rational play. While the competition with China is real and the risks are genuine, key elements of this narrative deserve closer examination. And building a strategy on an incomplete understanding risks producing outcomes far worse than the threat it purports to address.

I write this not to minimize real security concerns, nor to suggest naïveté about Chinese strategic ambitions. After 35 years helping U.S. MNCs build technology businesses in China and leading AI, semiconductor and cybersecurity efforts across both ecosystems, I have seen how quickly assumptions about technological dominance can unravel. The argument here is simply this: we need to reexamine the race we think we’re running, the game we think we’re playing, and the strategy we’ve chosen. Because right now, the evidence suggests our current strategy may be incomplete or overconcentrated on a single dimension of competition.

Questioning the Decisive Strategic Advantage Thesis

The dominant narrative in Washington’s AI policy circles goes something like this: whoever achieves AGI first will gain a decisive strategic advantage (DSA), a durable, possibly permanent lead that reshapes the global balance of power. This belief drives hundreds of billions in capex commitments, aggressive export controls, and a general willingness to treat AI development as a wartime mobilization.

The DSA thesis depends on several assumptions, each of which deserves scrutiny. First, that there is a clear finish line. There is not. AI development is a continuous, multi-dimensional process with no single threshold that confers omnipotence. AGI, however defined, would not be a static superweapon but a rapidly evolving ecosystem that competitors can and will replicate. History reminds us: America’s nuclear monopoly lasted just four years.

Second, the thesis assumes that model capability gaps can be maintained through compute denial. Recent market data point in a different direction. The U.S.-China frontier model gap, once estimated at 12-14 months, has narrowed to roughly two to three months, during a period when the U.S. has steadily ramped up export controls on even mid-tier data center GPUs. On the April Monthy 2026 OpenRouter leaderboard, four of the top six most-used models globally were Chinese. MiniMax, Kimi, DeepSeek, Xiaomi and Zhipu models are all surging in popularity, driven by their cost advantages and the thirst for highly capable open-source models by AI agents. In video generation, Kuaishou’s Kling 3.0 and ByteDance’s Seedance 2.0 significantly outperform OpenAI’s Sora and Google’s Veo on independent benchmarks and real-world use cases as discussed in my recent CCA essay.

Third, the DSA narrative assumes a winner-take-all dynamic. In practice, AI models are rapidly commoditizing. Cursor usage data from 2025 shows the top model changing nearly every month, with no single lab holding sustained dominance. The recent batch of China models launched around Lunar New Year all are within a few percent of leading U.S. frontier models (at the time of release) but available at approximately 1/10^th the API price. There are now even small models from Qwen which perform at about the level of frontier models from a year ago that can run natively on an iPhone. When the commodity is cheap and abundant, strategic advantage shifts from who builds the best model to who deploys AI most effectively across their economy.

And this is precisely where the current strategy is most in tension with its own goals. While Washington and Silicon Valley pours massive resources into chasing the elusive AGI finish line, Chinese companies are deploying “good enough” AI at massive scale. ByteDance’s Doubao chatbot exceeded 100 million daily active users. Alibaba’s Qwen models have surpassed 700 million downloads globally, spawning 180,000+ derivative models. Chinese open-source models are becoming the de facto platform for sovereign AI efforts across the Global South’s 150 Belt and Road Initiative partner countries. Leading open-source models are usually much smaller than closed-source frontier models, so they can be downloaded and installed on smaller on-premise systems, and the smaller models will run smoothly on personal laptops and even modern phones. This is a significant diffusion advantage by offering greater data sovereignty and privacy, while also enabling lower deployment costs domestically and globally.

Today, most Chinese models are designed to run on Nvidia chips, but the Chinese are already developing alternatives to Nvidia’s GPUs, and a number of the new Chinese models (e.g., Deepseek and Zhipu) are already being optimized for them with some already trained on them. As Chinese domestic chips mature, the long term plan is to offer full stack solutions to the international market. Denying US chips to Chinese ecosystem now will only accelerate the drive for domestic alternatives, speeding local innovation and reducing reliance on US technology.

Beyond the Arms Race Framework

The U.S. approach treats the AI competition as an arms race: zero-sum, secretive, defined by denial and containment. But what’s actually unfolding looks far more like a platform race and an innovation race, where value expands, multiple winners coexist, and the key metric is diffusion, how broadly and effectively AI is adopted across industries--not who achieves the highest benchmark score this week.

Consider the four types of AI competition. In a simple race (first to a benchmark), there’s a clear finish line and a single winner, but in practice, benchmark leads flip monthly and confer no durable advantage. In an arms race, secrecy and denial dominate, but the AI technology stack is too diffuse and fast-moving to contain. In an innovation race, the game is multi-turn with many winners—think robotics, agentic AI, and clean energy integration. In a platform race, it’s an infinite game where ecosystem adoption determines outcomes—think open-source AI, cloud APIs, global developer communities.

The United States is investing heavily in an arms race and simple race dynamics. China, increasingly, is competing in the innovation and platform quadrants (which offer more long-term value). The results speak for themselves: China leads in 66 of 74 critical technologies tracked by the Australian Strategic Policy Institute, dominates open-source AI model offerings, accounts for 54% of global industrial robot installations, produces about half of the world’s AI researchers, and builds more new electricity capacity annually than the rest of the world combined. These are the foundations of AI deployment at scale, and chip denial alone can’t offset them.

There are claims that most Chinese AI advances are due to stealing technology or distilling models from the United States. Given that now more than 40% of the world’s AI papers are published by researchers in China, and about half of the world’s AI researchers are born and educated in China, it’s hard to justify this claim. For some background on the practice of distilling models, it’s commonly recognized that most/all labs practice this internally and on each other (even domestically) to optimize model accuracy and efficiency. Since the frontier U.S. models are closed-source, Chinese labs are more easily tracked if and when they do it. Whereas most Chinese models are open-source, so the models can be run on the users’ local machines or hosted by each country’s domestic cloud services, thus Chinese labs cannot track their models’ detailed usage. Recently Cursor got into PR issues when it claimed to have trained its own advanced AI coding model (Composor 2), when it turned out that they just fine-tuned the Chinese Kimi K2.5 model. Additionally, Chinese labs usually publish their new technical findings as detailed papers with each major release of models, thus the need for U.S. labs to distill for learning breakthroughs from new Chinese models are reduced.

Rethinking the Strategic Framework

Washington’s strategic framework implicitly models the U.S.–China AI dynamic as a Prisoner’s Dilemma, a game where defection (competing aggressively, withholding cooperation) is the dominant strategy. But this framing has two fatal flaws.

First, the Prisoner’s Dilemma assumes a one-shot game with no communication. We live in a multi-turn world where actions are observable, reputations accumulate, and in such a case, the mathematically optimal strategy is tit-for-tat, starting with cooperation. We can see China’s actions and words. They can see ours. We are not in separate interrogation rooms.

Second, and more fundamentally, we are playing the wrong game entirely. The better model is the Stag Hunt. In this classic game, two hunters enter a forest and must decide: cooperate to catch a stag that feeds both for a month, or hunt hares separately that provide a week’s sustenance each. The stag requires both hunters working together. If one goes for the stag while the other chases hares, the stag hunter goes home empty-handed.

The United States is currently going after the stag, the projected artificial superintelligence (ASI) that promises permanent dominance. China, meanwhile, hunts the hares: practical AI diffusion across manufacturing, healthcare, education, and sovereign AI platforms for the developing world. The Stag Hunt has two Nash equilibria: both cooperate (stag) or both hunt alone (hares). But the worst outcome is precisely where the United States finds itself now: pursuing the stag alone while the other player collects reliable, real-world gains from hares. The more accurate and nuanced game theory representation of the world today is likely closer to a multi-turn Stag Hunt for the commercial market portion and a multi-turn Prisoner’s Dilemma for the national security portion. In both cases, increasing communication and finding common ground would create a better outcome for both sides. A more effective approach is to adopt a multi-turn Stag Hunt strategy where we first prioritize the hare equilibrium (diffusion focus) to address immediate risks and garner AI’s economic benefits, then later jointly pursue the long-term stag equilibrium in collaboration with China when we have a better sense of how to manage the shared safety risks of a truly transformative AI (ASI). Given the clear interdependence of both sides across multiple dimensions, this would deliver the optimal outcome, without the excessive capex costs or potential societal and safety risks of our current path.

The consequences of this mismatch are not theoretical. U.S. tech firms have committed over $800 billion annually in AI capex for 2025–2027, while job openings in the United States have declined sharply since 2022 even as the S&P 500 soared, a divergence that recent Stanford research attributes to AI automation of early-career positions in software development and customer service. World Bank data shows the U.S. workforce faces over 60% AI exposure, the highest globally, compared to about 40% in China. We are building the most powerful automation technology in history while having no plan for the workers it will displace.

The loudest proponents of the DSA narrative are AI labs and their investors who have strong commercial interests in lighter regulation and increased government funding. The refrain from Silicon Valley labs that “we can’t be regulated because if we slow down, China won’t” is not based on facts. China’s AI industry is one of the most heavily regulated in the world and their infrastructure buildout is just a fraction of the size of the United States. Putting in some sensible guardrails and regulations for AI development and deployment around safety, privacy, and security would not slow down the United States, but rather help ensure a less chaotic diffusion into broader society. In fact, China is slowing down their own AI labs but restricting their ability to buy Nvidia GPUs. Even after U.S. export control restrictions allowed for H200 GPUs to be sold to China, the Chinese government has required approvals for their companies to buy them. Recent remarks from Howard Lutnick suggest that to date, zero H200 GPUs have been sold to China.

The Military Dimension: From Benchmarks to Operational Readiness

Proponents (government and industry) of the current strategy often invoke national security: “If China gets AGI first, they’ll weaponize it against us or would prevent us from winning.” This is a legitimate security concern worthy of serious attention. However, the military advantage argument warrants closer examination. What the military needs is not the latest frontier model. It needs models that are fit to task, certified, tested, and integrated into operational systems. Here, strategic advantage depends not just on the invention of frontier models but on the institutional capacity to operationalize them, integrating them into doctrine, training personnel, and adapting operational concepts to leverage their capabilities.

The U.S. military’s vendor and model certification process can take over 12 months for national security level accreditation (DoD IL6). Recent reports suggest that the recent Iran military operations were planned using the 20-month-old Claude 3.5 Sonnet model, not because newer models didn’t exist but because the certification pipeline couldn’t keep pace, in addition to the need to remove standard safety guardrails from the base consumer model. Meanwhile, Chinese government agencies have far fewer testing and evaluation (T&E) delays, and their AI models already go through review by the government before public release. The gap between invention and deployment matters more than the gap between benchmarks.

In military settings, the tangible advantage may lie less in who trains the most capable model than in who can certify, integrate, and deploy usable systems fastest. On that metric, the current U.S. system is a structural disadvantage. But even if we achieve ASI first and can somehow expedite the certification process, unless we are willing to deploy it untested in a pre-emptive all-out strike against China, the temporal advantage could evaporate in a matter of weeks or months. It’s unclear that this result would justify the trillions in spend. And even if such an attack succeeds in taking down China’s infrastructure, the inevitable response will be swift and devastating for both sides. It’s the exact reason why we have not seen the use of nuclear weapons in real conflict for over 80 years.

In recent weeks, the new Anthropic Mythos model has attracted a lot of attention for its cybersecurity prowess, and some point to this as an example that the United States is “winning” and the current strategy is correct. Unlike large amounts of fissile materials, securing software and know-how is almost impossible. There are already reports that the Mythos model is now accessible to unauthorized personnel, not to mention the recent unintended leak of the full source code of Anthropics’ Claude Code solution. Recent new benchmarks are also showing that the OpenAI GPT 5.5 model is actually as performant in cybersecurity capabilities as Mythos and that model is publicly available to all users, thus showing that any perceived cyber advantages are highly temporary. We need to accept that any software-based advantage is temporary and adjust our strategy to the reality that DSA may just be a mirage. In fact, the bigger and more certain threat is the misuse of these advanced models by bad actors. Hackers and terrorists would not hesitate to make use of these models for nefarious purposes, whereas state actors still fear reprisals and the risk of escalation. This is a shared risk for both the United States and China, and a place where we can find common ground for cooperation.

What We’re Not Seeing: A Competitive Ecosystem, Not a Monolith

Washington tends to view Chinese AI as a state-directed monolith. The reality is a fiercely competitive commercial ecosystem where Chinese labs compete with each other (just to survive) far more than they coordinate to conspire against the United States. ByteDance’s Doubao is a closed-source consumer product fighting for domestic market share. Z.AI generates over 60% of its revenue from enterprise on-premise deployments. MiniMax earns roughly 70% of revenue from international API sales. Moonshot AI’s Kimi competes directly with all of them in consumer chatbots and AI agent inference. As an example, neither the Chinese nor U.S. government had any significant idea about DeepSeek’s innovations prior to its rise to prominence in January 2025.

The open-source strategy that has made Chinese models globally ubiquitous is an emergent outcome of commercial competition, not a directed national strategy. Alibaba open-sourced Qwen to drive cloud adoption; DeepSeek open-sourced to attract research talent; MiniMax did so to build developer ecosystems. Even within these companies, there are significant internal tensions. Alibaba is actively debating open-source diffusion versus revenue protection, and Tencent faces similar strategic discussions on agent-focused models. Framing this diverse, commercially motivated ecosystem as a unified strategic threat leads to policy responses that are simultaneously too broad (restricting all Chinese AI) and too narrow (focused on chips while ignoring the deployment gap). That said, while these firms operate with substantial commercial independence, they remain embedded in a system where the Chinese state retains the ability to shape or direct their alignment when it perceives critical national interests to be at stake. The recent push by the Chinese government for some of its leading labs to optimize models for local chip offerings before release is an example of this.

Additionally, it’s worth mentioning that U.S. export control policies also exist around advanced tools and equipment targeting chip and semiconductor manufacturing players (e.g., Huawei and SMIC) with it’s core aim to constrain compute supply to Chinese AI labs. These players have a clear association with the state, and such restrictions have shown near-term effect in limiting their capabilities, but has also clearly accelerated the development of domestic alternatives, albeit still one to two generations behind the most advanced Western offerings. As the two ecosystems bifurcate, there will be increasingly less dependency on the United States and less leverage for future negotiations.

A Different Path Forward

None of this means we should be complacent about security. Genuine threats exist: AI-enabled CBRNE (Cyber, Bio, Radioactive, Nuclear, Explosive) risks, autonomous weapons proliferation, and the misuse of AI by bad actors. But these threats are best addressed through targeted, narrowly scoped controls and shared intelligence, not through a blanket technology-denial strategy that was designed for a world that no longer exists.

The “small yard, high fence” doctrine, originally conceived as a targeted national security tool, has expanded into a comprehensive technology approach that now touches chips, lithography, EDA software, HBM, chemicals, and advanced AI models, as discussed in a recent CCA article. This expansion has paradoxically accelerated China’s drive toward full supply chain independence, fueled innovations born of constraint (like DeepSeek’s efficiency breakthroughs), and alienated allied semiconductor industry firms who see shrinking addressable markets. That said, export controls serve legitimate national security purposes, and policymakers may be operating with intelligence assessments and threat evaluations not available in the public domain.

Adjusting course does not require abandoning competition. It requires reframing it. Three shifts would immediately improve America’s strategic position:

First, make efforts to narrow export controls to genuine military and CBRNE threats, not all advanced technology. The current regime tries to prevent China from developing any frontier capability, which is both unenforceable and counterproductive. In fact, given Chinese labs’ propensity for open-sourcing their models, most advances they produce will naturally flow into U.S. models rapidly, turning them into subsidiary development arms for U.S. players. It must still be noted that in the unlikely event of direct conflict, having some export controls may still buy time for domestic adaptation, alliance coordination, and military hardening even if such controls cannot achieve the wished-for permanent dominance.

Second, shift from a Cold War arms-race mental model to a Space Race innovation model. The Space Race generated GPS, Teflon, the internet’s precursor, bringing massive spillover benefits for the whole economy. An AI innovation race focused on healthcare, climate, education, and productivity could do the same, with far more participants winning. It would also encourage the U.S. labs to release comparable level open-source models to China so our tech stack can compete on a level playing field for global diffusion. Additionally enacting some reasonable safety and socially responsible regulations on U.S. labs (as China has already done) will lessen the growing societal fear over AI that’s been brewing domestically which is certain to hinder the nation’s ability to deploy this technology effectively into the economy and reduce our global competitiveness.

Third, open bilateral and multilateral channels on AI safety. The Stag Hunt only works when hunters can communicate before entering the forest. Both China’s “Global AI Governance Action Plan” and America’s “AI Action Plan” were released in July 2025, and neither mentions the other country. We cannot manage the multifaceted risks of the most powerful technology in human history while refusing to talk to the other nation building it. There’s clear common ground on AI safety; both countries want to avoid catastrophic risks from runaway AI; and both have a shared interest in preventing AI-enabled bad actor proliferation.

Conclusion: There Is No Finish Line, but Many Medals to Win

A race is not a race if the competitors are headed to different destinations. The United States is sprinting toward AGI and ASI as if crossing that threshold confers permanent dominance. China is building industrial AI infrastructure that will shape how much of the world deploys this technology for decades. Both paths have value, and neither inherently zero-sum, if proper coordination occurs.

The biggest risks we face from AI are misuse by bad actors, mass displacement of workers, concentration of economic power, and escalation of military conflict. These are shared risks that require shared solutions. Every dollar spent on denial should be matched by greater investment in national preparedness for AI diffusion and adaptation. Every diplomatic channel closed over chips is a safety conversation not happening. A deeper discussion on the underlying technology issues and a detailed framework for addressing both economic and geopolitical issues around the AI race can be found in this Stanford paper, Beyond Rivalry.

It is time to lift the veil of assumptions that have constrained our thinking. The playing field is not the one we were told exists. But the real one offers enormous opportunities if we have the clarity to see it and the courage to adjust course. There is no finish line in AI, but along the way, there will be many medals awarded. We should make sure America is competing for the ones that actually matter.

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1. China Blocks Meta’s Manus Acquisition

What Happened: On April 27, the foreign investment security office of China’s National Development and Reform Commission ordered the unwinding of Meta’s roughly $2 billion acquisition of Manus, a Chinese-founded AI agent startup based in Singapore. The decision followed U.S. sanctions on Hengli Petrochemical’s Dalian refinery over Iranian oil purchases and comes amid broader pressure on Chinese firms in sensitive supply chains.

Why It Matters: Chinese AI application developers face a monetization gap at home — domestic willingness to pay is low, and capital markets are thin. The decision signals to Chinese AI entrepreneurs and investors that nominal offshore corporate structure offer limited protection from political risk. Beijing risks narrowing the very exit pathways that make Chinese AI ventures financeable. AI startups are likely to either move abroad from the outset or rely more heavily on domestic markets and capital to avoid regulatory risk.

By Shengyu Wang, Research Assistant, Center for China Analysis

Learn More: Read “China’s AI Token Drive is Really About Upgrading Inland Economies,” an opinion piece by CCA Fellow Lizzi C. Lee.

2. Pakistan President’s China Visit Puts CPEC Back in Focus

What Happened: On April 25, Pakistani President Asif Ali Zardari began a week-long visit to China, with scheduled stops in Hunan and Hainan to advance economic cooperation and the next phase of the China-Pakistan Economic Corridor (CPEC). In Hunan, discussions centered on seed technology, agricultural research, machinery, mineral processing, and industrial collaboration. In Hainan, China’s southern free-trade port province, Zardari expressed interest in port development, fisheries, and strengthening trade and investment ties. The visit also coincides with Pakistan’s announcement of new transit routes linking Gwadar, a port in Pakistan, to the Iranian border.

Why It Matters: Zardari’s trip highlights the core challenge of CPEC 2.0: shifting from infrastructure buildout to commercial productivity. Pakistan is looking to Hunan for agricultural and industrial inputs and to Hainan as a model for port-led trade and logistics, aimed at making better use of existing CPEC infrastructure, including Gwadar. At the same time, new transit routes to Iran position Gwadar within a broader regional trade network, especially as instability near the Strait of Hormuz increases demand for alternative routes. Yet success will depend on whether these efforts translate into sustained investment, exports, and cargo flows, and not leave CPEC underutilized.

By Jie Gao, Research Associate on Foreign Policy and National Security, Center for China Analysis

Learn More: Read “The Electoral Equation: China’s BRI Investments Amid Political Transitions” by ASPI Director of South Asia Initiatives Farwa Aamer and Blake Berger.

3. China-India Defense Ministers Hold Talks as Tensions Ease

What Happened: China’s Defense Minister Dong Jun met with his Indian counterpart Rajnath Singh on April 28 on the sidelines of the Shanghai Cooperation Organization’s Defense Ministers’ meeting in Bishkek, Kyrgyzstan. The meeting addressed tensions along the Line of Actual Control (LAC) on the disputed Himalayan border, with both ministers calling for “peace and tranquility.”

Why It Matters: This was not the first meeting between Dong and Singh — they met in Qingdao in June last year, and before that in November 2024 — but the tone suggests some improvement in relations between the militaries of the two Indo-Pacific powers. Efforts to stabilize the Sino-Indian relationship have accelerated since the Trump Administration’s “Liberation Day” tariffs, and the two ministers also addressed the situation in the Middle East, where they share common interests. Dong’s position as a PLA Navy admiral, rather than in the ground forces that have faced off along the LAC over the past five years, could aid his efforts to engage more constructively with Indian counterparts. However, without a position on the Central Military Commission, his military and political authority is more constrained than that of his predecessors, such as Li Shangfu and Wei Fenghe.

By Andrew Chubb (@zhubochubo), Foreign Policy and National Security Fellow, Center for China Analysis

Learn More: Read “A New Triangle: The Interplay Between China and EU-India Relations” by CCA Senior Fellow Philippe Le Corre.

4. Beijing Tightens Political Control While Expanding Protections for Gig-Economy Workers

What Happened: Beijing recently issued new guidelines on strengthening the management and services for “new employment groups,” referring largely to gig-economy and flexible workers. The directive outlines two primary objectives: first, to ensure that these workers are guided by Xi Jinping Thought, reinforcing their alignment with the Party and deepening their political, ideological, theoretical, and emotional identification with it; and second, by 2027, to achieve comprehensive coverage of Party organizations within these groups, while gradually standardizing labor practices, improving working conditions, and more effectively safeguarding workers’ legal rights.

Why It Matters: As the lead-up to the 2027 Party Congress intensifies, Beijing is focused on ensuring that the country’s roughly 84 million gig-economy workers do not become a source of social instability. At the same time, authorities are increasingly concerned about what they see as weakening political and ideological identification among younger generations with the Party. As a result, the central leadership is reportedly paying greater attention to causes of declining patriotic consciousness among young people and signs of weakening ideals and convictions among young cadres. Youth accounted for approximately 26% of China’s population in 2025, underscoring the scale and urgency of this challenge.

By Lobsang Tsering, Senior Research Associate on Chinese Politics, Center for China Analysis

Learn More: Read “The 19 Percent Revisited: How Youth Unemployment Has Changed Chinese Society“ by CCA Fellow Barclay Bram.

5. Southern China Battles Extreme Rainfall

What Happened: On April 26, torrential rainfall struck Qinzhou, a city in Guangxi, southern China. Qinzhou authorities said the city’s meteorological station recorded over 270 millimeters of rainfall (about 10 inches) during a 24-hour period. The rain forced the evacuation of more than 200 residents, submerged vehicles, and caused waterlogging, as rescue crews were deployed to help those trapped in their homes. Rainfall of this magnitude typically occurs in mid- to late May, after the arrival of the summer monsoon.

Why It Matters: The rare timing and intensity of this downpour in southern China reinforces that climate impacts in the form of extreme weather are still occurring. With the monsoon season yet to start and the summer months still to come, China must continue to prioritize adaptation and resilience. Beyond policy, continued coordination across departments on emergency management and early warning is crucial to safeguarding communities and infrastructure.

By Taylah Bland (@Taylahbland), Fellow on Climate and the Environment, Center for China Analysis

Learn More: Read “Unpacking China’s New Headline Climate Targets” by CCA Senior Fellow Li Shuo and Fellow Kate Logan.

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Y-20B’s First Overseas Mission Highlights Advances in China’s Military Airlift Capacity

On April 20, 2026, the PLA Air Force deployed the Y-20B heavy transport aircraft for the first time to South Korea to carry out the 13th repatriation mission for the remains of Chinese People’s Volunteer Army soldiers from the Korean War. Chinese state media noted that this marked the Y-20B’s first deployment for such a mission and first publicly confirmed overseas flight. Upon re-entering Chinese airspace, the aircraft was escorted by four J-20 fighters. The Y-20B’s primary upgrade over the baseline Y-20 is the replacement of Russian D-30KP-2 engines with domestically produced WS-20 turbofan engines that improve range, payload capacity, and fuel efficiency. While the mission itself was ceremonial, China chose to publicly announce the overseas operation to highlight the Y-20B’s operational debut.

The Y-20B sits within a broader, layered Chinese military airlift architecture. At the top tier, the Y-20A, Y-20B, and YY-20 tankers represent the PLA’s long-range strategic airlift and aerial refueling capabilities. The medium tier features the Y-30 – a four-turboprop medium tactical transport aircraft. In December 2025, the Y-30 completed its maiden flight at Xi’an. The Y-30 is designed for point-to-point distribution to forward and austere locations, with short-takeoff-and-landing capability on unpaved runways suited to environments such as South China Sea outposts and Himalayan border positions. At the lower tier, the Y-8 and Y-9 form the backbone of China’s special mission aviation. The Y-8 has been adapted for electronic reconnaissance, maritime patrol, and airborne early warning variants since the 1980s. The Y-9 has emerged as the next-generation successor in the special mission role. At the September 2025 military parade, the PLA displayed for the first time a coordinated formation of three Y-9 special-mission types: the Y-9Q maritime patrol and ASW aircraft, the Y-9DZ electronic reconnaissance aircraft, and the Y-9LG standoff jamming aircraft.

CCA Analysis: The Y-20B demonstrates the PLA’s evolution in reducing external dependence on propulsion systems for its large military transport aircraft. Early Y-20s relied on Russian D-30KP-2 engines. The adoption of the WS-20 engine marks the first case of China achieving indigenous development over both the airframe and engine of a heavy transport platform, utilizing 3D printing technology for part of the manufacturing process. The PLA has launched aerial refueling variants of the Y-20, such as the YY-20, as well as the KJ-3000 airborne early warning and control aircraft. The KJ-3000, which completed its maiden flight in late 2024, is based on the Y-20B airframe and is believed to have the capability of detecting stealth aircraft.

The U.S. Department of Defense’s 2025 Report noted that China is progressing on indigenous engine development, while cautioning that advancement will likely be gradual as China works to resolve longstanding technological barriers in advanced propulsion.

PLA Rocket Force Unit Experiments with Anonymous Online Message Board Feedback

A People’s Liberation Army Rocket Force (PLARF) unit created an anonymous online message board on its internal “Strong Army Website” (强军网) to allow officers and enlisted personnel to directly raise complaints, concerns, and suggestions to leadership. The initiative, reported by the PLA Daily, came after the unit’s Party Committee found during a soldiers’ reception day that many grassroots concerns were either not being addressed or were being distorted as they moved up the chain of command.

The unit Party Committee decided to establish a platform modeled on local government “online governance” systems. Despite concerns that the board could become a venue for negativity or harm internal relations, leadership insisted that Party organs must prioritize “grassroots first, soldiers first” and treat solving soldiers’ practical problems as a key measure of performance.

Once launched, soldiers raised issues ranging from malfunctioning duty-room equipment and broken family-compound fitness machines to outdated library resources in remote posts. One notable case involved a staff officer who assigned multiple reports on a Friday night with a Sunday deadline, prompting a soldier to complain that “one word from headquarters, and the grassroots are running themselves ragged” (机关一句话，基层跑断腿). The officer publicly apologized and promised immediate correction, while senior leaders identified the deeper issue as a weak service mentality toward grassroots units.

CCA Analysis: This is an interesting trial for improving internal governance, morale, and combat readiness within the PLA. Rather than relying on formal reporting channels, the unit is experimenting with direct feedback mechanisms through social media to ensure leadership hears frontline concerns unfiltered. In that sense, the platform is a problem-solving mechanism and a channel for strengthening trust between leadership and troops.

This reflects a broader political priority within the PLA of streamlining direct feedback from “grassroots units” to solve practical problems for soldiers. The unit Party Committee explicitly frames this as rejecting “vanity projects” and evaluating cadres based on whether they address real troop concerns, reinforcing Xi Jinping’s longstanding emphasis on combat effectiveness and addressing the welfare of soldiers.

The article also suggests that morale and operational performance are closely connected. Leadership argues that when soldiers feel heard and supported, their sense of belonging and ownership increases, which translates into stronger commitment during training and missions. The article closes by linking the success of the feedback system to strong performance during a recent live-fire assault exercise, implying that improved welfare and trust directly support readiness.

Sensitive Waterways, Sharp Signals: China and Japan’s Escalating Naval Standoff

On April 17, Japanese Maritime Self-Defense Force destroyer JS Ikazuchi transited the Taiwan Strait from 4:02 a.m. to 5:50 p.m. for approximately 14 hours. The transit fell on the 131st anniversary of the signing of the Treaty of Shimonoseki, the 1895 unequal treaty under which the Qing dynasty ceded Taiwan to Japan following its defeat in the First Sino-Japanese War. The war is a recurring symbol of national humiliation in Chinese historical memory.

China’s Ministry of National Defense condemned the transit as a “deliberate provocation” (蓄意挑衅) and lodged a formal protest with Tokyo, accusing Japan of sending the wrong signal to Taiwan independence forces. In a commentary, PLA Daily accused Tokyo of “harming the feelings of the Chinese people” by timing the transit to coincide with the anniversary.

On April 19, the Eastern Theater Command announced that PLA Navy 133rd task group, centered on Type 052 destroyer Baotou (包头), had transited the Yokoate Channel into the Western Pacific for open-water training exercises. The Eastern Theater Command characterized the deployment as “routine annual training” conducted in accordance with international law and “not directed at any specific country.”

On April 20, Taiwan’s Ministry of National Defense detected the aircraft carrier Liaoning (辽宁) transiting the Taiwan Strait southward. The PLA Navy simultaneously announced that the Sichuan (四川), China’s first Type 076 amphibious assault ship, had departed Shanghai for the South China Sea for sea trials and training. These movements coincided with the opening of US-Philippines “Balikatan 2026,” in which Japan participated for the first time in a combat capacity. On April 22, PLA Navy 133rd task group completed its Western Pacific exercises and returned via the Yonaguni-Iriomote Strait, which runs close to Taiwan’s eastern coast.

CCA Analysis: This was the first time that the PLA proactively announced a Yokoate Channel transit. In the past, Japan was the first to disclose such operations. Beijing’s decision to get ahead of the news cycle can be interpreted as an expression of displeasure over Japan’s Taiwan Strait transit and a willingness to publicize naval movements as a signal of deterrence. This episode is just the latest iteration of an ongoing cycle of reciprocal operational deterrence signaling by both sides.

The JS Ikazuchi‘s transit was Japan’s fourth through the Taiwan Strait since September 2024. Its 14-hour duration and timing with the Treaty of Shimonoseki anniversary gave Beijing grounds to frame the passage as politically provocative rather than a routine freedom of navigation action. China’s response was swift, dispatching the PLA Navy’s 133rd Task Group through the Yokoate Channel into the Western Pacific just 48 hours later. The deployment of the Liaoning through the Taiwan Strait and the Sichuan’s training in the South China Sea coincided with the opening of “Balikatan 2026” joint exercise between the United States, Philippines and Japan.

The Balikatan 2026 added another layer to an already charged week. Japan joined for the first time in a combat role, deploying roughly 1,400 troops and conducting live-fire sinking drills using Type 88 anti-ship missiles off northern Luzon. It was the first time Japanese forces have used the system outside their territory at a location facing the Taiwan Strait. It was also the first time the JMSDF projected forces into the South China Sea for joint exercises.

The geographic scope of China-Japan maritime interaction has expanded considerably since late 2025. Friction that was previously concentrated around the Senkaku/Diaoyu Islands and the Miyako Strait has extended into the Western Pacific and the eastern side of the First Island Chain. CSIS ChinaPower data shows the PLA conducted a record 163 operations in the South China Sea in 2025, while the aircraft carriers Liaoning and Shandong combined for 58 days of operations beyond the First Island Chain, up from 32 days in 2024.

China’s Navy Anniversary Film Points to Nuclear Carrier, Sends Message on Taiwan

On April 22, the PLA Navy released a seven-minute promotional film titled Toward the Ocean (向大洋) to mark the 77th founding anniversary of the People’s Liberation Army Navy. The film follows four characters whose names are Mandarin homophones of China’s three active carriers: Liao Ning (辽宁/Liaoning), Shan Dong (山东/Shandong), and Fu Jian (福建/Fujian), alongside a new recruit named He Jian (何剑). The name He Jian is a near-homophone of “nuclear vessel” (核舰, hé jiàn) in Mandarin. In the film, He Jian is aged 19, which follows sequentially from the hull numbers of China’s three existing carriers (16, 17, 18), leading analysts to interpret the character as an allusion to a forthcoming nuclear-powered fourth carrier. His noticeably taller backpack was further interpreted as a hint at greater displacement, beyond the Fujian’s 80,000 tons, toward the 100,000-ton class of U.S. supercarriers.

The film closes with a scene at Unification Road Primary School (统一路小学) in Weihai city, where one of the characters picks up his son, nicknamed “Xiao Wan” (小湾) — a common affectionate abbreviation for Taiwan. The boy says he does not want to go home yet, and his father replies that his mother is waiting. The exchange was widely read as an allegory for Taiwan’s eventual “reunification” with the mainland. Some commentators also noted that the phrase “don't be shameless” (别耍赖皮) contains the character “Lai,” a homophone for Lai (赖) as in President Lai Ching-te (賴清德). The framing of Taiwan’s current leader as the obstinate child refusing to come home was a clear symbol of Beijing’s frustration over Lai’s “pro-independence” policies.

CCA Analysis: The video’s rich symbolism offers a window into PLA Navy political and capability priorities. The He Jian character appears to be a deliberate reference to the Type 004 carrier currently under construction at Dalian Shipyard. Janes’s satellite imagery analysis from December 17, 2025 confirmed that construction of the carrier is underway. The U.S. Department of Defense’s 2025 Report assessed that China plans to field nine carriers by 2035, of which six may be Type 004-class vessels.

The closing sequence is a clear reference to Taiwan. The film was released 12 days after KMT chair Cheng Li-wun (鄭麗文) met Xi Jinping in Beijing. The choice of Weihai’s Unification Road School as the closing location also carries historical resonance. The city has deep historical ties with Wokou (倭寇) pirates — the Japanese and Chinese coastal raiders who harassed China’s coastline from the 13th to 17th centuries. It is also associated with the Battle of Weihaiwei (威海卫之战) in 1895, where China’s Beiyang Fleet (北洋水师) was destroyed in the First Sino-Japanese War. In 1950, newly appointed PLAN Navy commander Xiao Jingguang (肖劲光) visited nearby Liugong Island (刘公岛) by fishing boat, lamenting that the PLAN’s weakness in a remark since inscribed on a monument there. Closing a naval power narrative at this location links the current era into a century of maritime humiliation and recovery, with Taiwan remaining the only piece of “lost territory” yet to be “reunified” with the mainland.

1. China’s Humanoid Robots Break Men’s World Record in Beijing Half-Marathon

What Happened: On April 19, Honor’s humanoid robot “Lightning” won the Beijing E-Town Half Marathon in 50 minutes and 26 seconds, surpassing the men’s world record and outpacing all 12,000 human competitors. The event drew over 300 robots from more than 100 teams.

Why It Matters: The race is as much industrial policy as it is spectacle. Humanoid robot development is a stated priority in China’s 15th Five-Year Plan, and investment in embodied AI reached 73.5 billion yuan in 2025. Chinese firms AGIBOT, Unitree, and UBTech lead global vendors by humanoid shipment volume. But doubts remain: only 40% of robots ran autonomously, and ultimately, humanoid robots may struggle to translate into real-world applications, such as in elder-care settings. Beijing’s playbook of high-visibility demonstrations to accelerate commercialization has worked before with EVs and AI, but whether humanoids follow the same trajectory remains an open question.

By Shengyu Wang, Research Assistant, Center for China Analysis

Learn More: Watch "DeepSeek Moment, One Year Later: The State of U.S.-China AI Competition," moderated by CCA Fellow Lizzi C. Lee with CCA Honorary Senior Fellows Alvin Wang Graylin and Paul Triolo.

2. Central Inspection Teams Target China’s Security and Stability Sectors

What Happened: China’s central discipline inspection teams launched a new round of inspections across 36 central institutions in the security and social stability sectors, including the Central Political and Legal Affairs Commission, the Ministry of Public Security, and the National Public Complaints and Proposals Administration. According to the announcement, the inspections aim to reinforce loyalty to Xi Jinping while ensuring that the central leadership’s major decisions are fully implemented. During this period, dedicated hotlines and mailboxes have been established to receive complaints, particularly those involving disciplinary violations by senior officials.

Why It Matters: The previous round of inspections in regions such as Xinjiang helped drive high-level purges, including Politburo member Ma Xingrui. Reports indicate that more than 60% of major corruption cases stem from public tip-offs submitted during inspection periods. As a result, the coming months could see further investigations or purges targeting senior officials in the political-legal affairs, social stability, and public welfare systems. Amid intensified political scrutiny, the 36 institutions under inspection are likely to exercise greater caution when handling major issues.

By Lobsang Tsering, Senior Research Associate on Chinese Politics, Center for China Analysis

Learn More: Read “What Will Xi Jinping’s Priorities Be in 2026?” by CCA Fellow Neil Thomas and Lobsang in China 2026: What to Watch.

3. China Warns Travelers Off Seattle Airport

What Happened: China warned its citizens to avoid Seattle-Tacoma International Airport after reports that roughly 20 Chinese scholars were denied entry to the United States despite holding valid visas. Chinese officials accused U.S. border authorities of “malicious interrogation,” framing the episode as a consular and treatment issue rather than an isolated immigration case.

Why It Matters: The incident reflects a broader shift in how both governments are managing cross-border academic exchange. The United States has increased scrutiny of Chinese researchers on national security grounds, while China has become more willing to respond publicly through travel advisories and diplomatic signaling. These actions are raising the uncertainty and cost of routine mobility. Over time, unpredictable entry conditions may discourage early-career scholars and weaken one of the few remaining channels of stable U.S.–China engagement. The dynamic also risks becoming self-reinforcing: heightened screening invites reciprocal warnings, which in turn strengthen the case for further restrictions, narrowing the space for scientific collaboration, especially in sensitive or strategic fields.

By Emma Zang (@DrEmmaZang), Fellow on Chinese Society, Center for China Analysis

Learn More: Watch “What is the Cost to Global Science? U.S.-China Relations and the Future of Innovation” featuring Yasheng Huang, CCA Honorary Senior Fellow, Susan Shirk, Director Emeritus of the 21st Century China Center, and others.

4. PLA Warships Transit Near Southwest Japan Following Taiwan Strait Passage

What Happened: China and Japan conducted closely timed naval activities, with each side transiting through sensitive waterways. On April 22, two PLA Navy vessels returned from the western Pacific via the Yonaguni–Iriomote Waterway following what Beijing described as a routine exercise, days after the same formation transited through the Yokoate Waterway in the first publicly recorded PLA transit of that channel. Both passages are strategically significant as they run along Japan’s southwest island chain near military facilities and potential intervention corridors tied to Taiwan and the East China Sea.

Why It Matters: This episode reflects a pattern of reciprocal deterrence signaling through operational activity between China and Japan. The PLA transit followed Japan’s April 17 Taiwan Strait passage — which Beijing criticized — and served as a deterrent signal directed at Tokyo over Taiwan-related activity. Days earlier, Japan fully participated for the first time in the annual U.S.–Philippines Balikatan exercise, highlighting its expanding role in regional contingency planning. This dynamic is likely to lead to a more entrenched rivalry in which Beijing frames Japan’s naval moves through the lens of remilitarization and historical revisionism, complicating near-term diplomatic engagement.

By Jie Gao, Research Associate on Foreign Policy and National Security, Center for China Analysis

Learn More: “A Stress Test for Resilience: Risks & Opportunities for the U.S.-Japan Alliance,” by Emma Chanlett-Avery, Director of Political-Security Affairs and Deputy Director at Asia Society Policy Institute.

5. China’s Clean Tech Exports Surge amid Middle East Energy Crisis

What Happened: China’s exports of solar panels and batteries jumped sharply in March, both month-on-month and year-on-year, offering early evidence that global demand for Chinese clean-tech products is being buoyed by volatility stemming from the conflict in Iran and the broader Middle East crisis. According to data released by China’s General Administration of Customs on April 18, exports of lithium-ion batteries, electric vehicles, and solar cells grew by 34%, 53%, and 80%, respectively, on an annual basis.

Why it matters: This surge builds on a wave of overseas sales already driven by China’s cost competitiveness, rising global energy demand, and accelerating fuel switching. The war in Iran is likely to intensify that trend. With its domestic economy relatively insulated from oil and gas price shocks and its clean-tech industries primed for export, China is emerging as one of the long-term energy winners of this crisis.

By Li Shuo, Director of China Climate Hub, and Senior Fellow, Center for China Analysis

Learn More: Read “The Evolving Politics of Climate Change in China” by CCA Fellow Neil Thomas and Senior Fellow Guoguang Wu.

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1. China Expresses Alarm Over U.S. Blockade of Strait of Hormuz

What Happened: Chinese officials labeled President Donald Trump’s decision to blockade the Strait of Hormuz as “dangerous,” “irresponsible,” and against global interests. The remarks from China’s Ministry of Foreign Affairs came after the United States began enforcing a blockade on Iranian ports along the Strait on Monday. President Trump ordered the blockade after peace talks with Tehran collapsed this weekend. Beijing warned the move risks further escalation and disruption of global energy flows, which China heavily relies upon.

Why It Matters: China’s diplomatic posture toward U.S.–Iran developments — especially around the Strait of Hormuz — has been consistent but more sharply articulated in recent days. China is positioning itself as a forceful voice for de-escalation, implicitly blaming U.S. actions for jeopardizing fragile diplomatic progress. Given China’s recent behind-the-scenes brokering of a ceasefire through Islamabad, Beijing is taking a more active diplomatic approach in Iran and the Middle East in general. Ultimately, however, China is keenly aware that true peace flows through the corridors of Washington, Tehran, and Jerusalem.

By Lyle Morris, Senior Fellow on Foreign Policy and National Security (@LyleJMorris)

Learn More: Read “PLA Watch,” a monthly newsletter centered on delivering insights into China’s military affairs on the Center for China Analysis’s Substack.

2. KMT Chair Meets Xi in Beijing

What Happened: On April 10, KMT Chair Cheng Li-wun met with Xi Jinping in Beijing. At a post-meeting press conference, Cheng relayed Xi's closed-door remarks, stating that mainland China respects the social system and way of life chosen by Taiwan compatriots. Xi also stressed the importance of in-person meetings and indicated that cross-Strait exchanges should not be limited to KMT–CCP interactions. Cheng emphasized that if the KMT returns to power in 2028, the party would pursue an institutionalized cross-Strait peace framework. The following day, the PRC's Taiwan Affairs Office released ten policy measures spanning direct flights, tourism, agricultural and fisheries trade, cultural exchanges, and KMT–CCP communication mechanisms.

Why It Matters: The meeting was a win for both Cheng and Xi, but its impact is uncertain. For the KMT, the visit allows Cheng to demonstrate tangible achievements ahead of upcoming elections in Taiwan, bolstering her legitimacy within the KMT base and reinforcing her position that engagement can bring about cross-Strait stability. For Beijing, the meeting and subsequent policies are policy incentives designed to cater to Taiwan’s opposition party. The meeting also signals to Washington that cross-Strait relations can be managed peacefully, albeit in a way that bypasses Taiwan's ruling government. However, it remains unclear how Taiwanese voters will respond to the visit, especially at the ballot box.

By Sheng-Wen Cheng, Research Intern, Center for China Analysis

Learn More: Read “Positioning the KMT in the U.S.–China–Taiwan Triangle: Cheng Li-wun’s Early Tenure” by CCA Senior Fellow Lyle Morris and Sheng-Wen Cheng.

3. China Unveils Counter-Sanctions Framework Targeting Foreign Firms

What Happened: China enacted the “Anti-Foreign Unjustified Extraterritorial Jurisdiction Regulations,” a formal legal framework designed to counter measures it deems as unlawfully extraterritorial, including foreign sanctions. Its centerpiece is the “Malicious Entity List,” similar to the U.S. Treasury’s Specially Designated Nationals list. The regulation targets foreign entities and individuals who promote or enforce “unjustified” sanctions against China, subjecting them to penalties, including trade bans, data transfer blocks, and entry restrictions.

Why It Matters: This is the latest case of Beijing seeking to build its strategic leverage by mirroring the established sanctions toolkits of the United States and the EU, shifting from passive defense to an active, institutionalized posture. For global firms, complying with Western sanctions could now trigger direct, legally binding retaliation from China. Crucially, the regulation includes a “penetration rule,” mirroring the U.S. Office of Foreign Assets Control 50% rule, meaning penalties automatically extend to any subsidiaries actually controlled by a blacklisted entity.

By Lizzi C. Lee, Fellow on Chinese Economy (@wstv_lizzi), and Shengyu Wang, Research Assistant, Center for China Analysis

Learn More: Read “China’s Rare Earth Export Controls” on the Center for China Analysis’s Substack, by CCA Honorary Senior Fellow Paul Triolo and Senior Partner at Tidalwave Solutions Cameron Johnson.

4. Beijing Tightens Control Over Industry Associations While Steering International Engagement

What Happened: Beijing recently issued new guidance aimed at deepening reforms of China’s industry associations and chambers of commerce. The most significant provisions require organizations to adhere to Xi Jinping Thought, strengthen internal Party-building, and adopt governance structures consistent with the socialist market economy. The directive also mandates the establishment of formal reporting mechanisms for major issues, requiring associations to report to and seek “instructions” from Party authorities. Oversight will be tightened in key areas, including asset and financial management, foreign exchanges and international cooperation, and ideological work.

Why It Matters: China currently has more than 100,000 registered industry associations and chambers of commerce, with a combined membership of roughly 7.7 million companies. The new guidance signals a dual objective in the realm of international engagement, encouraging organizations to establish or participate in international economic and trade dialogue mechanisms, while formalizing adherence to Party leadership and Xi Jinping Thought in international exchanges. Taken together, these changes suggest that most industry associations will face tighter constraints in global engagement. Those that remain active on the international stage are likely to be organizations that have received explicit institutional authorization and support from Beijing.

By Lobsang Tsering, Senior Research Associate on Chinese Politics, Center for China Analysis

Learn More: Read “The Art of Dealing with China“ by CCA Fellow Lizzi C. Lee, CCA Co-Founder and Managing Director Jing Qian, and CCA Senior Fellow Craig Allen.

5. Australia–China Deepen Clean Energy Ties but Energy Security Risks Linger

What Happened: On April 7, Australian Prime Minister Anthony Albanese spoke by phone with Chinese Premier Li Qiang. The two leaders discussed further cooperation in clean energy and electric vehicles while underscoring the importance of continued bilateral cooperation in light of ongoing geopolitical instability. Albanese said the two discussed regional energy security, but the Xinhua readout made no mention of energy security or fuel. Albanese is set to attend the 2026 APEC Economic Leaders’ Meeting later this year, where he is expected to meet with Premier Li.

Why It Matters: Amid ongoing tensions due to the U.S.–Israel–Iran conflict and associated strains on energy security and supply chains, China has imposed fuel export bans to protect its domestic industry. China is a major supplier of Australian jet fuel, so any tightening of Chinese export controls could have downstream effects on Australia’s aviation sector and broader energy supply. The call also highlights the need to balance deeper cooperation in future-facing sectors like clean energy, while addressing immediate vulnerabilities exacerbated by an uncertain geopolitical environment.

By Taylah Bland, Fellow on Climate and the Environment, Center for China Analysis (@Taylahbland)

Learn More: Read “The Evolving Politics of Climate Change in China” by CCA Fellow Neil Thomas and Senior Fellow Guoguang Wu.

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Written by:

Lyle Morris, Senior Fellow

Jie Gao, Research Associate

Sheng-wen Cheng, Intern

Xi Jinping Launches First-Ever Military-Wide Senior Officer Training Program

On April 8, Xi Jinping attended the opening ceremony of the first-ever military-wide training program for senior PLA officers held at the National Defense University. Xi delivered a speech emphasizing the need for “ideological rectification” (思想整风) and “political consolidation” (政治整训) within the PLA. The only remaining CMC Vice Chairman, Zhang Shengmin (张升民) hosted the ceremony, with top PLA leadership, including Defense Minister Dong Jun (董军) and Central Theater Command Commander Han Shengyan (韩胜延) in attendance.

Eastern Theater Command Commander Yang Zhibin (杨志斌), who was promoted to full general with Han Shengyan in December 2025, was not present. On the same day, an article authored by Yang was published in the Central Party School’s newspaper, referencing the need to draw lessons from the cases of disgraced senior military officials involved in “serious discipline and law violations” (汲取军队落马高级干部严重违纪违法问题深刻教训).

Xi’s remarks centered on three topics. First, officers must ground their political loyalty in the theoretical study of Marxism and Xi Jinping Thought. Second, Xi stressed that the Party represents the fundamental interests of the people and holds “no special interests of its own,” emphasizing that “all acts of self-interest and corruption are fundamentally incompatible with the Party’s nature and purpose.” He also called on senior officers to restore the military’s “revolutionary roots,” and said that CCP regulations apply “equally to all,” with no “special status” (没有特殊) and “no exceptions” (没有例外) in their implementation. Third, Xi invoked the historical observation that the Party and military have grown stronger through sustained struggle against “erroneous ideological and behavioral tendencies” (各种错误思想作风), expressing confidence that the PLA would achieve “unprecedented unity” (空前团结统一) heading into 2027.

CCA Analysis: This is indeed notable, as it represents the first-of-a-kind military-wide training program overseen by Xi. It marks a significant escalation of Xi’s effort to consolidate CMC authority over the officer corps. The term zhengfeng (ideological rectification, 整风) harkens back to Mao’s Yan’an Rectification Movement during the 1940s, which Xi revitalized during the 2024 CMC Political Work Conference in Yan’an. Xi is positioning the program within a longer tradition of Party self-renewal through top-down political discipline and ideological consolidation.

Xi’s repeated emphasis on “struggle” against “ideological and behavioral tendencies” can be read multiple ways. There are rumors that the recent purges in the PLA are related to Xi’s dissatisfaction with PLA training and modernization. To the extent that those rumors are true, this new training course could be Xi’s way of strengthening oversight and discipline over PLA training. Second, it suggests that Xi is dissatisfied with feedback on training metrics and standards within the PLA. In that sense, it could be read as a signal that the PLA must step up its game or else come under additional scrutiny.

The program is clearly designed to respond to pervasive corruption within the PLA. Xi’s emphasis that regulations apply “equally to all” is an admission that some senior leaders in the PLA enjoyed special treatment. It is a direct response and a warning to the deep-seated patronage networks and rent-seeking culture of the PLA that business as usual is no longer tolerated. By connecting the campaign to the 2027 centenary milestone, Xi has elevated military compliance from a disciplinary matter to a historical obligation. The key question is whether this campaign will strengthen command cohesion and discipline through frank feedback or prompt senior officers to become even more risk-averse to avoid scrutiny.

The PLA Responds to Japanese Deployment of Long-Range Missiles

On March 31, Japan deployed the Type 25 surface-to-ship missile (SSM) at the Ground Self-Defense Force’s Kengun base in Kumamoto, prompting a stern response from China. The currently deployed Block 1 variant has a range of about 900 kilometers, while the Block 2 variant, expected to be completed by 2027, is projected to reach beyond 2,000 kilometers. Japanese Defense Minister Koizumi Shinjiro characterized the deployments as a necessary step to bolster Japan’s deterrent capabilities.

Days after the deployment, the PLA sent a group of PLA Navy (PLAN) ships to the Sea of Japan via the Tsushima Strait. The group included a Type 055 destroyer, two Type 052D destroyers, a Type 815A advanced electronic reconnaissance ship (AGI), and a Type 903A replenishment ship. This PLAN task force was likely a direct response to Japan’s posture enhancements.

This follows a broader trend of China and the PLA calling out “Japanese militarism.” One PLA Daily article accused Japan’s defense industry of accelerating military expansion. It singled out Mitsubishi Heavy Industries and Kawasaki Heavy Industries as having participated in wartime atrocities before “reinventing themselves” as defense contractors operating under “civilian cover.” It added that Japan has allocated 17.5 billion yen in 2025 for civilian-to-military technology conversion — roughly 18 times the 2022 figure, and that it established a U.S. DARPA-style Defense Innovation Science and Technology Institute in 2024 to channel civilian R&D into military applications. The article further warned that Japan’s plutonium stockpile was sufficient to produce approximately 5,500 nuclear warheads, stating that Japan already possesses nearly all the material and technical prerequisites for nuclear weapons production and could become “a de facto nuclear-armed state in an extremely short period” (能在极短时间内成为事实上的拥核国家).

One week later, PRC Foreign Ministry spokesperson Mao Ning (毛宁) condemned Japan’s planned revision of its Three Principles on Transfer of Defense Equipment and Technology as a “serious violation” of the Cairo Declaration, the Potsdam Proclamation, and the Japanese Instrument of Surrender. PRC Defense Ministry spokesperson Zhang Xiaogang (张晓刚) separately characterized Japan’s missile deployments as a “complete betrayal” of its pacifist constitution and warned that China maintained sufficient capability to make aggressors “pay an unbearable price.”

CCA Analysis: This recent incident is part of a broader campaign by China to smear Japan, and stems from the Japanese prime minister Takaichi’s Taiwan-related remarks in late 2025. The deployment of the Type 25 missiles had been planned for many years, and is part of Japan’s regional anti-access and denial deterrent modernization program. Japan sees this program as reducing dependence on U.S. military support and redistributing firepower platforms along the first island chain. From China’s perspective, such systems are an unwarranted escalation of offensive capabilities targeting China.

Furthermore, the PLA Daily’s criticism of Japanese dual-use technology transfer is in tension with China’s own Military-Civil Fusion strategy. For example, China’s 15th Five-Year Plan, revealed last month during the Two Sessions, explicitly calls for a “green channel” that promotes the transfer of civilian technology to military domains (健全前沿科技成果”民参军”绿色通道). It is reasonable to assume that Beijing sees the value of such pathways, after watching the United States leverage its own civil-military fusion programs. By invoking Japan’s WWII atrocities, Beijing’s playbook is to cast Japan’s current military developments as a continuation of the legacy of Japanese “militarism,” depicting Japan, not China, as the source of regional instability.

China’s Heavy Cargo Drone Completes Maiden Flight in China, Raising Questions About Military Applications

On March 31, one of China’s largest cargo drones, the Changying-8 (长鹰-8, CY-8), completed its maiden flight in Zhengzhou, Henan province. The aircraft has a take-off weight of 7 tons, a payload capacity of 3.5 tons, and a range exceeding 3,000 kilometers (approximately 200 to 300 meters for take-off and landing). Developed by a subsidiary of China North Industries Group Corporation Limited, it is capable of short take-off and landing operations on austere runways in high-altitude and island environments. Designed for dual military and civilian use, it reportedly allows a single operator to control up to eight CY-8s simultaneously. Mass production is expected before year-end.

At the Ministry of Defense’s April 9 press conference, a reporter mentioned that Taiwanese public opinion described the CY-8 as a potential new “aircraft carrier killer” (反航母利器) and that there was concern in Taiwan that China’s unmanned combat system developments would enhance the PLA’s capacity to deter and strike against “Taiwan independence forces.” Without commenting on the drone’s specific military applications, Zhang stated that the PLA would resolutely oppose any form of separatism and external interference, and that capabilities relevant to “anti-secession and anti-intervention” (反分裂反干涉) missions would continue.

CCA Analysis: The CY-8 gives the PLA enhanced logistics capabilities in operationally constrained environments. Its 15-minute cargo loading cycle gives the PLA additional cargo capacity in geographic areas that have limited infrastructure. Although China has not officially specified its military applications, coverage by Chinese state media and PLA official social media accounts suggests military interest in the platform. As noted by both Chinese military commentators and the CY-8’s developers, operational roles are likely to include resupply and border patrol missions for a Taiwan or South China Sea contingency.

The characterization of the CY-8 as an “aircraft carrier killer” is traceable to Lai Yue-qian (賴岳謙), a Taiwanese political analyst whose remarks were picked up by Chinese media outlets, including during the Ministry of Defense press conference. As cross-Strait tensions have increased, China has used announcements of new weapons programs as a public relations campaign to warn Taiwanese “independence forces.” For example, our previous edition’s coverage of the two newly commissioned Type 055 destroyers included PLA references to Taiwan.

One of Lai’s arguments is that the CY-8 can operate as a military cargo drone designed to carry significant military hardware, and that its 3.5-tonne payload capacity could theoretically accommodate a single YJ-12 anti-ship missile, posing a threat to U.S. carrier strike groups. However, while technically feasible, significant limitations remain. A one-drone, one-missile model would be operationally inefficient since the CY-8 is a non-stealthy platform that would likely become an easy target for U.S. operations. Such an approach would also fail to exploit the aircraft’s large 18-cubic-meter cargo bay.

A more likely scenario is the CY-8 being deployed as part of a broader containerized drone swarm system. This concept mirrors the U.S. military’s Rapid Dragon system, which ejects pallets from the aircraft’s rear ramp via parachute. Once deployed, the system releases dozens or even hundreds of drones or loitering munitions to saturate carrier air defenses, creating a far more credible threat than a single missile.

China has demonstrated relevant capabilities in this domain. China Electronics Technology Group Corporation (中国电子科技集团公司) released footage of a containerized swarm system capable of launching 48 drones of varying types from a single vehicle. The system is so efficient that a single operator could control nearly 100 aircraft across missions.

Whether analogous systems could be adapted for airborne delivery remains an open question. But the technical trajectory is clear. If the PLA seeks to combine heavy anti-ship missiles with drone swarm delivery at scale, the CY-8’s 3.5-ton payload limit is a constraint. The Jiutian (九天) drone, which completed its maiden flight in December 2025, offers a more effective payload capacity (6 tons) for multi-missile or high-density swarm missions.

1. Chinese AI Firms Expose U.S. Military Movements in Iran

What Happened: Several Chinese companies with ties to the PLA have launched AI tools designed to monitor U.S. military movements in and around Iran. One of the Chinese companies, Hangzhou-based MizarVision, reportedly used satellite imagery, flight transponder data, and ship tracking information processed through AI to track U.S. carrier group movements and shifts in military posture ahead of Iranian operations. In response, the U.S. government requested on April 5 that private U.S. companies restrict access to satellite imagery from sensitive areas and delay commercial image releases to minimize intelligence risks.

Why It Matters: The case highlights both the opportunities and risks posed by publicly available commercial satellite imagery and AI analytics. Private companies can now leverage this data to generate near-real-time military intelligence, sharing it with private and public clients. While the U.S. government regulates sensitive imagery exports, foreign firms can still exploit private sector data — presenting policymakers with the difficult challenge of balancing the benefits of open satellite imagery against the national security risks of foreign companies sharing that data with foreign governments.

By Sheng-Wen Cheng, Research Intern, Center for China Analysis, and Lyle Morris, Senior Fellow on Foreign Policy and National Security (@LyleJMorris).

Learn More: Read “PLA Watch,” a monthly newsletter centered on delivering insights into China’s military affairs on the Center for China Analysis’s Substack.

2. Chinese AI Models Now Drive Nearly Half the World’s AI Traffic

What Happened: According to OpenRouter, a platform that aggregates access across major AI models, total usage for the week of March 30 to April 5 reached 27 trillion tokens. Chinese models accounted for 12.96 trillion, exceeding U.S. models (3.03 trillion) for the fifth consecutive week. The six most-used models on the platform were all Chinese, led by Alibaba’s Qwen3.6 Plus and Xiaomi’s MiMo-V2-Pro.

Why It Matters: The data highlights where China is currently strongest: open-weight AI. Chinese models are competitive on cost, speed, and practical performance, driving broad adoption among developers worldwide, including many U.S. startups, for production and agent-based use. At the same time, this is not the full picture. Closed-source frontier models from U.S. firms continue to lead in raw capability and enterprise spending. Critics also note that OpenRouter skews toward price-sensitive developers and certain use cases, and that some Chinese models game the system by engaging in "bench-maxing," though these caveats do not negate the broader trend in adoption.

By Shengyu Wang, Research Assistant, and Lizzi C. Lee, Fellow on Chinese Economy, Center for China Analysis (@wstv_lizzi)

Learn More: Read “Cinematic Sovereignty: How China’s New Generation of AI Video Models Could Reshape U.S. Soft Power Projection” by CCA Senior Fellow Alvin W. Graylin on the Center for China Analysis's Substack.

3. Beijing Congratulates Min Aung Hlaing on His Election as Myanmar’s President

What Happened: The Chinese Foreign Ministry spokesperson Mao Ning congratulated Min Aung Hlaing on his election as Myanmar's new president, after winning over half of the votes in a carefully controlled election. Min Aung Hlaing had previously served as the Commander-in-Chief of the Myanmar Defence Services from 2011 to 2026, and seized power from a democratically elected government led by Aung San Suu Kyi in the 2021 coup d'état.

Why It Matters: Myanmar has long been strategically important to China, given its overland access to the Indian Ocean via the China-Myanmar Economic Corridor (CMEC) and the deep-sea port of Kyaukphyu, currently under construction. Beijing will likely use the election as an opening to deepen supply chain integration while demanding security guarantees and maintaining economic ties with rebel groups. For one, the rebel-controlled Kachin State, which lies to the north of the country and borders China and India, features a significant concentration of heavy rare earth elements, which play a pivotal role in renewable technologies and defense. The mining of these elements surged in the aftermath of the coup and has amplified the geopolitical salience of Myanmar for China's foreign policy — especially in light of possible rapprochement between the newly “elected” government and Western states in search of diversification in their rare earth supplies.

By Brian Wong, Non-Resident Honorary Fellow, Center for China Analysis

Learn More: Read “Military Elections Will Not Resolve Myanmar’s Deeper Problems” by Dr. Hunter Marston.

4. Cuba Deepens Reliance on China’s Clean Technology

What Happened: Last month, Cuba experienced two nationwide blackouts within a single week, underscoring the persistent instability of its electricity grid. In light of the longstanding U.S. embargo, tightened under the Trump administration, Havana seeks to secure energy supplies, and Beijing has emerged as a key provider of clean energy technology. Reports indicate that China supplied Cuba with one gigawatt of photovoltaic panels in 2025, alongside a sharp rise in battery imports to US$56 million, up from US$7.3 million in 2024.

Why It Matters: Amid ongoing U.S. energy constraints, Cuba’s uptake of Chinese energy technologies offers a potential pathway to scale up its energy supply, underscoring China’s growing geopolitical relevance as a competitive supplier of alternative energy solutions. More broadly, it highlights Beijing’s expanding role as countries elsewhere seek to close urgent energy gaps in the wake of the war in Iran.

By Taylah Bland, Fellow on Climate and the Environment, Center for China Analysis (@Taylahbland)

Learn More: Read CCA’s report, “The Evolving Politics of Climate Change in China,” by CCA Senior Fellow on Chinese Politics, Guoguang Wu, and CCA Fellow on Chinese Politics, Neil Thomas.

5. Beijing Links Rights Protection to Stability

What Happened: During a recent inspection in Liaoning, Chen Wenqing, China's top security official, urged local governments to step up efforts to identify and resolve social disputes, protect citizens’ legal rights, and maintain stability. He stressed integrating “rights protection” with “stability maintenance,” targeting flashpoints such as family, neighborhood, and land-related conflicts, and called for stronger early intervention mechanisms to prevent extreme incidents. By 2025, China had established 2,848 county-level social governance centers, which have handled over 10.7 million disputes.

Why It Matters: Before 2012, China saw roughly 100,000 mass incidents annually, underscoring persistent tensions between rights protection and stability maintenance. While Beijing now releases fewer figures, some Chinese analysts believe improved grassroots governance has reduced such incidents. More importantly, Xi Jinping in 2014 reframed the relationship, arguing that “rights protection is the foundation of stability, and stability is its guarantee,” seeking to reconcile what were once treated as competing priorities. As uncertainty mounts, Beijing’s ability to maintain this delicate balance remains an open question — particularly as some Western reports, such as those by Freedom House, indicate a surge in domestic incidents throughout 2025.

By Lobsang Tsering, Senior Research Associate on Chinese Politics, Center for China Analysis

Learn More: Read “The 19 Percent Revisited: How Youth Unemployment Has Changed Chinese Society” by Barclay Bram, CCA Fellow on Chinese Society.

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1. Taiwan’s KMT Chair Cheng Li-wun to Beijing

What Happened: On March 30, Beijing announced that Xi Jinping had extended an invitation to Kuomintang (KMT) Chair Cheng Li-wun to visit the mainland. Cheng accepted and will lead a KMT delegation to Jiangsu, Shanghai, and Beijing from April 7–12, which is the first visit by a sitting KMT chair to the mainland since 2016. However, whether a direct meeting between Cheng and Xi will take place has not been confirmed.

Why It Matters: The timing is significant on multiple fronts. Domestically, a meeting with Xi could reinforce Cheng’s leadership within the KMT and validate her strong pro-China stance. Cheng currently is facing internal pressure, notably from Taichung Mayor Lu Shiow-yen, whose recent visit to Washington and initial support for a defense budget exceeding the KMT caucus position — later moderated — are seen as a challenge to Cheng’s approach ahead of the 2028 presidential cycle. Internationally, Cheng’s visit gives Beijing the opportunity to show Washington that cross-strait dialogue can be managed bilaterally by Taiwan and the mainland, strengthening Xi’s hand in the run-up to the Trump-Xi summit in mid-May.

By Sheng-Wen Cheng, Research Intern, Center for China Analysis, and Lyle Morris, Senior Fellow on Foreign Policy and National Security (@LyleJMorris).

Learn More: Read “PLA Watch,” a monthly newsletter centered on delivering insights into China’s military affairs on the Center for China Analysis’s Substack.

2. Three Chinese Ships Transit the Strait of Hormuz

What Happened: On March 31, Mao Ning, spokesperson for China’s Ministry of Foreign Affairs, confirmed that three Chinese ships had recently transited through the Strait of Hormuz. Mao underscored that “the Strait of Hormuz and waters nearby are an important route for international goods and energy trade” while restating that “China calls for an immediate end to hostilities to restore peace and stability in the Gulf.” In response to the ongoing instability, China is reportedly considering extending its fuel export ban into April.

Why It Matters: The Strait of Hormuz remains a volatile bottleneck for global energy flows. While China has a diversified energy mix, network of importers, and stockpile of oil and gas, that doesn’t insulate it from potential disruptions. Roughly 45-50% of China’s crude oil imports transit the Strait of Hormuz, which represents around 6.6% of China’s overall energy consumption. China maintains its stance that the conflict should be de-escalated through diplomacy and appears to have a dual priority: safeguarding domestic energy security while preserving critical trade routes.

By Taylah Bland, Fellow on Climate and the Environment, Center for China Analysis (@Taylahbland)

Learn More: Listen to “Jeffrey Feltman on the Israel-Hezbollah Conflict” with non-resident Distinguished Fellow Jeffrey Feltman and Asia Society Policy Institute’s former Managing Director Rorry Daniels on Asia Inside Out, a podcast by ASPI.

3. Boao Forum at 25 Reaffirms China’s Regional Message of Openness and Stability

What Happened: The Boao Forum for Asia held its 2026 annual conference in Hainan from March 24–27, marking its 25th anniversary under the theme, “Shaping a Shared Future: New Dynamics, New Opportunities, New Cooperation.” Coming at the start of China’s 15th Five-Year Plan, the forum offered an early read on Beijing’s economic direction: green growth, digital upgrading, and sustained regional integration amid complex protectionist headwinds. The broader message was that Asia must remain a driver of growth and cooperation under conditions of rising uncertainty. Hainan’s Free Trade Port featured prominently as the practical expression of that agenda, positioned as a gateway for high-standard opening and stronger regional links.

Why It Matters: Boao was a timely exercise in reassurance. Under a confluence of tariff, supply-chain, and geopolitical pressure, Beijing used the forum to reaffirm that China still sees its future, at least in Asia, in openness, integration, and growth, with Hainan serving as a working model of high-standard opening. In that sense, Hainan will function as proof of concept: a demonstration of how China intends to deepen trade, services, and connectivity across the region, especially with its southern neighbors. The prominence of sustainability and “new productive forces” further suggested that Beijing wants the next phase of regional integration to center on resilience, green growth and clean energy, and economic upgrading. That reading was reinforced by regional voices at the forum, including Singapore Prime Minister Lawrence Wong’s emphasis on China’s role in Asia’s stability and prosperity.

By Kevin Zongzhe Li, former Affiliated Researcher, Center for China Analysis

Learn More: Read “Another Continent, Another Planet: The Curious Case of the Missing China Conversation at Davos” by CCA Fellow Neil Thomas.

4. China Launches World’s First International Data Governance Body

What Happened: China launched the World Data Organization (WDO) in Beijing on March 30, positioning it as the first global NGO focused on data governance. With more than 200 members across more than 40 countries, the WDO aims to harmonize cross-border data rules, cut compliance costs, and help Global South countries build data capacity.

Why It Matters: Beyond signaling China’s ambitions in global data governance, the WDO is a bid to ease investor concerns over “over-securitization.” As data becomes the backbone of AI development, Beijing is seeking a greater role in shaping global standards, and the WDO is an important step in that direction. However, despite recent institutional milestones like the establishment of the National Data Administration, China’s domestic data ecosystem remains fragmented. Recurring, large-scale data leaks expose severe gaps in privacy protection and cybersecurity, revealing a reality in which the overarching legal and regulatory framework has yet to catch up with Beijing’s data ambitions.

By Shengyu Wang, Research Assistant, and Lizzi C. Lee, Fellow on Chinese Economy, Center for China Analysis (@wstv_lizzi)

Learn More: Read “Assetizing, Trading, Franchising: China’s Strategy for Building a National Data Economy,” by CCA Affiliated Researcher Ran Guo.

5. Beijing Tightens Grip on Local Party Committees Ahead of Key Political Milestones

What Happened: Xi Jinping recently chaired the CCP Politburo’s March meeting, which reviewed the Regulations on the Work of Local Party Committees. The meeting emphasized that local Party committees must safeguard the authority of Xi and the central leadership and strictly implement their decisions. First introduced on a trial basis in 1996 and formalized in 2016, the regulations are now under renewed review — signaling a fresh push to reinforce central control over local governance in support of Xi’s national development agenda, most recently set forth in the 15th Five-Year Plan.

Why It Matters: The CCP now counts over 100 million members, with 5.25 million grassroots organizations and 3,199 local Party committees, making it the second-largest political party in history after India’s Bharatiya Janata Party. Xi has long warned of weak central oversight and remains wary of local autonomy and policy drift. Despite decades of institutional tightening, enforcement has been uneven. As the 21st Party Congress in 2027 approaches, strengthening local governance is likely to be a central priority at the upcoming Fifth Plenum. More robust oversight will be critical not only for implementing the 109 major projects outlined in the 15th Five-Year Plan, but also for enabling foreign firms to expand beyond China’s top-tier cities — both of which are key to shaping Xi’s economic legacy as he nears the end of his unprecedented third term.

By Lobsang Tsering, Senior Research Associate on Chinese Politics, Center for China Analysis

Learn More: Read Xi Gets His Way at Last, by CCA Senior Fellow Christopher K. Johnson.

Next, we examine the recently-concluded China-Vietnam Border Defense Friendship Exchange, including the 40th joint patrol in the Beibu Gulf. Finally, we highlight an uptick in PLA commentary on U.S. wartime use of artificial intelligence (AI) and how the PLA is framing AI in the military.

Written by:

Lyle Morris, Senior Fellow

Jie Gao, Research Associate

Sheng-wen Cheng, Intern

More Defense Industry Purges Tied to the PLA

In mid-March, China’s defense-industrial and military research organizations saw a series of high-profile personnel changes. Three academicians with defense backgrounds—Wu Manqing (吴曼青), Zhao Xiangeng (赵宪庚), and Wei Yiyin (魏毅寅)—were removed from the official roster of the Chinese Academy of Engineering (中国工程院), with their names and profiles no longer publicly listed. The academicians—an elite honorific awarded to elected fellows of China’s top scientific institutions—were associated with radar and electronic information systems, nuclear engineering, and missile guidance and aerospace technology, respectively.

Two days after the event, the profile of Yang Wei (杨伟), the chief designer of the J-20 fighter, also disappeared from the Chinese Academy of Sciences website, and he had reportedly not appeared in public for over a year. Yang previously led development work on both the J-10 and J-20 and held a senior executive role at Aviation Industry Corporation of China (AVIC, 中国航空工业集团有限公司).

At the same time, the corruption case against Tan Ruisong (谭瑞松), former AVIC Chairman, concluded on March 25. Tan was sentenced to death with a two-year reprieve, along with full confiscation of personal assets. Charges against Tan include bribery, embezzlement, insider trading involving more than US$89 million, and the disclosure of confidential information over a long period. Official statements reported that he used restructuring, project contracting, and personnel or resource arrangements in the defense sector for private gain.

CCA Analysis: The current wave of scrutiny reflects a continued expansion of investigations into Chinese academics involved in the research and engineering of PLA weapons systems. Earlier rounds have already swept through the Rocket Force and major defense-industrial firms, with multiple senior figures removed and at least nine academicians stripped of their titles in recent years.

The Tan Ruisong case further illustrates the deep integration of China’s defense sector with capital markets and resource allocation. These enterprises could become financial hubs for senior officials, who can leverage their political authority to engage in rent-seeking during R&D, procurement, and export. However, extending state discipline to elite scientists and chief designers introduces a risky trade-off between political control and technical autonomy. This tension embodies economist Barry Naughton’s “impossible trinity,” which suggests the state cannot simultaneously achieve firm autonomy, strict oversight, and policy-driven goals. Therefore, the future of PLA modernization depends on the nature of this scrutiny. More targeted interventions may improve institutional coordination without stalling progress. Conversely, broad or sustained crackdowns risk destabilizing the concentrated expertise and long-term leadership required for defense innovation, weakening the very program execution and system integration China seeks to perfect.

Type 055 Destroyers Debut in the Eastern Theater Command

Recently, two newly commissioned PLA Navy Type 055 destroyers assigned to the Eastern Theater Command (ETC) Navy—the Dongguan (东莞) and Anqing (安庆)—began their first public round of post-commissioning training in the East China Sea.

Their disclosed training included air defense, anti-surface strike, anti-submarine warfare, and multi-domain coordination. Reporting also emphasized operations under complex electromagnetic conditions, including target detection, data-link sharing, and fire control coordination. Anti-submarine drills involved towed sonar, unmanned shipborne helicopters, and sonobuoys to hone undersea warfare capabilities. Later releases showed live-fire activity involving countermeasure deployment and formation maneuvering, though the locations of the drills, the munitions used, and detailed performance results were not disclosed.

Beyond the operational details, official coverage framed the exercises within a broader political narrative. References to deterring “Taiwan independence” and safeguarding maritime security were presented alongside the training, linking capability development to cross-strait signaling.

Since 2020, including the two newly commissioned vessels, a total of 10 Type 055 destroyers have entered service. As a key surface combatant in the PLA Navy, the platform continues to undergo incremental upgrades and weapons testing. A recent example was the finalization test of a hypersonic anti-ship missile, which we covered earlier this January.

CCA Analysis: The speed with which Dongguan and Anqing have been integrated into the theater commands is noteworthy. Their assignment to the Eastern Theater Command is particularly notable given its focus on the Taiwan Strait and East China Sea contingencies. Deploying advanced surface combatants to the ETC strengthens air defense, anti-submarine warfare, and command capabilities in scenarios most directly tied to cross-strait operations.

Official coverage also emphasized the Type 055’s role as a high-end operational node capable of operating in contested electromagnetic environments, sharing targeting data across platforms, and integrating unmanned systems into anti-submarine operations. Together, these elements point to a “system-of-systems” combat approach featured prominently in PLA discussions of modern warfare.

Meanwhile, the political framing is equally notable. By pairing the ships’ commission and training with messaging directed at Taipei, official narratives connect naval modernization more directly to Taiwan-related deterrence, reinforcing that capability development is not only a signal of military modernization but of sustained day-to-day cross-strait deterrence.

China–Vietnam Joint Patrol and South China Sea Contrast

From March 16 to 20, China and Vietnam conducted their 10th Border Defense Friendship Exchange, including the 40th joint patrol in the Beibu Gulf (北部湾). The naval component took place on March 19 and 20, with both sides sending two vessels to patrol along the China–Vietnam maritime boundary.

The exercise included alternating command responsibilities and the sharing of maritime domain awareness (MDA) during the patrol. Training focused on joint escort missions, anti-piracy, search and rescue, formation maneuvering, and command and control coordination. Public reporting also highlighted live-fire drills with light weapons, marking a modest expansion in the scope of training from previous years.

The maritime engagement took place in tandem with higher-level political coordination, including the first China–Vietnam “3+3” strategic dialogue covering foreign affairs, defense, and public security. Wang Yi, the Chinese minister of foreign affairs, mentioned that both sides should “enhance cooperation through multilateral platforms and properly manage maritime issues.”

During the same period, friction between China and the Philippines continued in the South China Sea. Chinese authorities reported “warning off” Philippine aircraft near disputed features by the China coast guard (CCG). The Philippines, on the other hand, continued to publicize footage and statements tied to resupply operations and maritime encounters, claiming that the CCG conducted unsafe maneuvers towards Philippe vessels.

CCA Analysis: The Beibu Gulf patrol reflects a continuing pattern of relatively low-profile military cooperation between two countries with disputed maritime territory. By concentrating on escort, anti-piracy, and search and rescue, both sides can sustain military interaction without directly engaging the more politically sensitive parts of their maritime disputes. All of these efforts are enabled by a cooperative institutional framework of joint fisheries patrols in the Beibu Gulf.

This is juxtaposed with China’s interactions with the Philippines in the South China Sea, in which tension and clashes are the norm. These operations are closely intertwined with a public narrative battle over moral authority. The Philippines has continued to use transparency measures to shape external perceptions, while China frames Philippine actions as unilateral provocations that exacerbate the disputes.

China’s approach to Vietnam and the Philippines offers a useful test case for cooperation and coercion: institutionalized cooperation in areas where operating rules are relatively clear, and persistent gray zone pressure in more contested waters. This dual-track approach has become a more recognizable feature of Beijing’s regional behavior.

China Criticizes U.S. Battlefield AI Use While Advancing Its Own Intelligentized Warfare Framework

On March 11, China’s Ministry of National Defense cautioned against the use of artificial intelligence (AI) in battlefield decisions involving lethal force, warning that excessive reliance could weaken accountability and ethics in war. The statement stressed that AI applications should remain under human control and called for greater international coordination on governance frameworks. The remarks were made in response to a question about reported tensions between the Pentagon and U.S. domestic technology companies over expanding military access to AI systems, as well as reports that such tools had been used in operations related to Venezuela and Iran. In contrast, recent PLA commentary continues to frame AI as central to “intelligentized” (智能化) warfare, highlighting its role in multi-domain sensing, data processing, manned-unmanned coordination, and system-level integration across platforms.

CCA Analysis: There has been a marked increase in attention to AI-enabled or “intelligentized” warfare within the PLA. The PLA is highly attuned to how data, algorithms, and computing power can reshape decision-making, compress command timelines, and enhance overall combat effectiveness. U.S. military operations in Iran have likely heightened this awareness. Across multiple articles, AI is framed not merely as a supporting tool, but as a core enabler of military operations, particularly in real-time battlefield situational awareness. In several cases, this is explicitly linked to faster OODA (Observe–Orient–Decide–Act, 观察—判断—决策—行动) loops, with the aim of enabling commanders to process information and act more quickly than an adversary.

At the same time, these discussions consistently emphasize the need to maintain human control over AI-enabled systems. Some writings explicitly warn against the risks of overreliance on automated decision-making, including what has been described as a “Tacitus Trap,” where repeated system errors or lack of transparency could erode trust in AI-assisted decisions and undermine command authority. References to human supervision, responsibility boundaries, and alignment between human intent and machine behavior appear alongside calls for greater autonomy and deeper operational integration.

Beijing’s criticism of U.S. battlefield AI use is ultimately hypocritical, however, as it belies the PLA’s own efforts to advance AI-enabled warfare capabilities, which the PLA will almost certainly employ in future scenarios. The fact of the matter is both the U.S. and China are grappling with how AI should be incorporated into military operations, particularly in defining the boundary between machine autonomy and human judgment in future warfare.

China’s evolving export control system is reshaping industry decisions and production in real time. Licensing regulations, extraterritorial concerns, end-use ambiguity, and disclosure requirements that can shift with little notice are creating significant uncertainty for companies trying to plan production, manage inventory, and meet customer demand. This uncertainty is increasing risks to global supply chains and accelerating the push to diversify away from China, even at higher cost.

In this commentary, Cameron Johnson, Senior Partner at Tidalwave Solutions, shares his inside-out perspective on China’s export control system. With decades of experience managing supply chains across industries in China, Cameron presents first-hand observations on the challenges firms currently face under China’s rare earth export controls. CCA Honorary Senior Fellow Paul Triolo weighs in with reflections on how U.S. policymakers might approach China’s rare earth export control regime, emphasizing the need for clearer policy alignment in Washington, sustained dialogue with Beijing on licensing transparency, and pragmatic tradeoffs that could help reduce uncertainty and stabilize strategically critical supply chains.

Navigating China’s Rare Earth Export Controls: Challenges for Industry and Paths Toward Greater Clarity

Cameron Johnson, Senior Partner, Tidalwave Solutions

In recent conversations with supply chain operators and multinational firms, I have heard a consistent concern: China’s current rare earth export control regime is creating operational uncertainty that is increasingly difficult for companies to manage.

Risks of Trade Secret Disclosure

Some companies that have applied for licenses have been asked to provide sensitive information, such as product specifications, photographs of production lines, customer identities, chemical compositions, and processing methods. Disclosing such information poses the risk of reverse engineering or information leakage. Companies with unique products or advanced materials face the possibility that their “recipe” — how the product is made — could be replicated once disclosed, along with their customers being identified.

Declaring precise chemical ratios or processing methods could reveal intellectual property that took years of R&D to develop. These processes can be recreated, circumventing the costs, risks, and time required for development. As a result, firms are extremely cautious and hesitant to provide information beyond end-use verification, even when they want to comply, because a single disclosure can erode years of competitive advantage and R&D.

In many industries, a customer’s identity is considered confidential and a strategic asset, often protected by contracts prohibiting disclosure. Firms may be forced to breach contractual obligations, therefore choosing between protecting critical business relationships and complying with export control regulations. It could also trigger situations in which they have to inform customers, resulting in lost business.

For example, companies across industries, such as automotive and aerospace, have contracts that prohibit disclosing technical details, supply chain structures, or customer identities to third parties, including governments, without prior authorization. Jet engine producers face strict confidentiality requirements because their supply chains include specialized coatings, alloys, and precision parts. Automotive companies also have strict requirements because component sourcing reveals costs, future model plans, and designs.

Uncertainty about Licensing and Regulatory Requirements

Beijing has now made case-by-case and individual export control review a core process, even for companies with long-standing compliant exports and established end use. For example, shipments that are almost identical could face different analyses, documentation requirements, and timelines. For companies operating on strict production schedules, planning becomes exceedingly difficult.

Security assessments also add additional layers of scrutiny, complicating the process, especially for dual-use classified components and advanced materials. An application is reviewed first by MOFCOM and then sent to other ministries for additional review, each of which might request additional information. These reviews are not transparent to applicants, who often do not know why their applications were escalated or whom to contact to resolve them. This lack of transparency adds uncertainty and can sometimes significantly extend approval times. It also contributes to perceptions of regulatory inconsistency or discrimination against certain applicants.

Uncertainty grips companies as license review timelines can shift, leaving them to wonder whether a license will be approved in weeks or months. The 45-working-day review period for license approval helped ease this challenge, but uncertainty persists. Regulations offer no guidance on detailed status updates, reasons for delay, the maximum review period, or other aspects of the process. Companies are left to navigate this uncertainty, making it difficult to plan production, manage inventory, or confirm delivery schedules. This unpredictability and the resulting operational challenges are disrupting global production flows, customer relationships, and industry foresight, forcing some businesses to turn away customers or prompting customers to find new suppliers, leading to the end of long-term relationships.

Some regulations do not clearly define the extent of their extraterritorial reach, and some applicants have been affected by political dynamics, with rare earth restrictions at times arbitrarily imposed on companies as part of China’s response to tensions with the United States. This leaves companies facing broader political undercurrents beyond their control, which can influence decisions in ways that are nearly impossible to predict. This level of uncertainty, faced by businesses around the world, makes routine business decisions much harder and is pushing companies to question their long-term reliance on Chinese-origin rare earths and products.

Conclusion

I believe predictable, transparent regulations give businesses a clear understanding of how they are implemented and what can trigger changes to licensing. Companies can adapt to any condition and plan production with greater confidence when they understand potential delays, restrictions, and the purpose of controls. This understanding allows businesses to organize themselves to meet customer needs while complying with regulations. Knowing the “rules of the road” is key to every business and stabilizes expectations in a fast-moving environment.

How U.S. Policymakers Might Approach China’s Rare Earth Export Control Regime

Paul Triolo, Honorary Senior Fellow on Technology, Center for China Analysis

From a policy standpoint, it is important to recognize that rare earth and magnet supply chains have moved well beyond the realm of normal commercial or industrial policy questions. They now sit squarely within a broader geopolitical and national security context. China’s policies in this space are closely intertwined with how Beijing views the actions of the United States, Europe, Japan, and other partners as they move to diversify supply chains, strengthen export controls, and reduce strategic dependencies. Because of this dynamic, it is difficult to approach the issue solely through the lens of what China might do to provide clarity or stability. Outcomes will increasingly be shaped by reciprocal policy choices on all sides.

For U.S. policymakers, the first priority should be achieving greater alignment within Washington on objectives and expectations. There is still a degree of adjustment underway as policymakers and industry stakeholders continue to assess the implications of China’s evolving export control framework around rare earth elements and permanent magnets. Different parts of the U.S. government approach the issue based on different institutional mandates. The United States Trade Representative and the Treasury Department, for example, both have important roles to play, but their priorities are not always fully aligned in terms of what the United States might seek from Beijing and what forms of flexibility might realistically be offered in return. Achieving greater internal clarity will be important before the United States formulates a durable external approach.

At the same time, policymakers should recognize that the April 4, 2025, and October 9, 2025 rules have already altered how markets and industry view the reliability of these supply chains. Whether these measures are actively enforced or simply remain a credible policy lever, they have shifted expectations across the sector. Many large U.S. manufacturers that rely on these materials are still mapping their exposure. In some cases, companies are only now realizing the extent of their dependence on Chinese rare earth processing and magnet manufacturing, and how limited near-term alternatives remain.

History offers a useful reminder of how slowly these markets adjust. During the 2010–2011 rare earth disruption, the export restrictions themselves lasted only a relatively short period. Yet even after supply resumed, it took nearly two years for markets to stabilize and for pricing and trade relationships to normalize. The current situation is considerably more complex. Supply chains are larger, more integrated, and far more strategically contested. Even under favorable circumstances, adjustment is likely to take years rather than months.

These realities point toward a dual-track policy approach. The United States should continue to invest in diversifying supply chains, expanding alternative processing capacity, and strengthening resilience across critical materials ecosystems with allies and partners. At the same time, maintaining channels of communication with Beijing on export control practices, licensing transparency, and technical implementation will remain important. Reducing uncertainty where possible can help stabilize global markets while the longer-term work of supply chain diversification proceeds.

In addition, the administration will want to consider whether there are tradeoffs that can be made that will reduce supply chain uncertainties and build even a small level of trust with Beijing, to avoid a sustained, high risk of “snapback” if the United States takes actions Beijing perceives as violating the spirit of the Busan agreement. For example, as I have laid out in my recent article, relaxing export controls in areas that have proven to be counterproductive, such as on memory and related semiconductor tooling, in exchange for guarantees from Beijing on broader and more expeditious licensing and transparency around the licensing process (e.g., sectoral white lists) should be considered as part of the bilateral trade negotiations. Such a deliverable would help to stabilize markets in the near term and allow time for companies to adjust and derisk supply chains.

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1. Trump-Xi Summit Rescheduled for May

What Happened: The White House announced on Wednesday that the delayed summit between President Trump and President Xi Jinping in Beijing would be rescheduled for May 14–15. The meeting, originally slated for mid-April, was postponed so Trump could remain in Washington to manage the ongoing war in Iran. White House press secretary Karoline Leavitt also announced plans for Trump and first lady Melania Trump to host Xi and Madame Peng Liyuan for a reciprocal trip in Washington, DC later this year, underscoring both sides’ desire to restore leader level exchanges.

Why It Matters: The long-anticipated summit will be the first time a U.S. president has visited China since Trump’s own 2017 trip, and the first in-person meeting between Trump and Xi since the APEC Leaders’ Summit in Busan last October. Trade will be a key watchpoint on the agenda, especially after the February Supreme Court ruling invalidated Trump’s IEEPA-based tariffs, reducing Washington’s trade leverage heading into the talks. The war in Iran also looms large over the meeting: China buys over 80% of Iran’s oil exports, giving Beijing an outsized economic stake in the conflict. The meeting, originally scheduled for three days, has been reduced to two, and the shortened format may limit how much ground the two sides can cover.

By Jamie Lui, Assistant Director of Research and Strategy, Center for China Analysis

Learn More: Read “U.S. Leaders Need to See What’s Happening in China” an opinion essay in the New York Times by CCA Co-Founder and Managing Director Jing Qian and CCA Fellow Neil Thomas.

2. Li Qiang Casts China as Global “Fitness Center” at China Development Forum

What Happened: Premier Li Qiang, in his keynote at the China Development Forum this week, outlined China’s shift toward “new quality productive forces” and technological upgrading. He described the domestic market as a “fitness center” for global firms, framing it as an environment that demands sustained effort and adaptation. The metaphor points to an evolving official narrative, with China placing less emphasis on its role as a low-cost manufacturing base for foreign capital and more on its position as a competitive, innovation-driven market where firms are expected to navigate structural changes and intensifying local competition.

Why It Matters: The choice of metaphor is notable. Foreign business leaders, including Jörg Wuttke, former president of the European Union Chamber of Commerce in China, have used the “fitness center” analogy to characterize the pace and intensity of innovation in China. By echoing this language, Beijing appears to reinforce a perspective already articulated by foreign investors and executives, while signaling its expectations to multinational firms about the new, dual reality of operating in China: conditions are more demanding, but continued participation can support long-term competitiveness.

By Shengyu Wang, Research Assistant, and Lizzi C. Lee, Fellow on Chinese Economy, Center for China Analysis (@wstv_lizzi)

Learn More: Watch “Can China Become an Innovation Superpower?” by CCA Honorary Senior Fellow Yasheng Huang and Lizzi.

3. China Leans on Tehran Ties to Protect Energy Flows in Hormuz

What Happened: On March 24, Chinese Foreign Minister Wang Yi urged Iranian Foreign Minister Abbas Araghchi to seize a “window for peace” during their second high-level call since the start of the Iranian crisis. The call came as the United States explored indirect ceasefire talks with Iran, but no breakthrough had emerged. As fighting continues, the Strait of Hormuz remains a volatile bottleneck for global energy flows, prompting President Trump to repeat calls for a multilateral naval escort, an effort Washington hopes key partners — potentially including China — will support.

Why It Matters: Rather than joining a U.S.-led multilateral naval escort, Beijing appears to prefer protecting its economic stakes in the region through direct engagement with Tehran. By prioritizing diplomacy, China leverages its unique relationship with Tehran to negotiate safe passage for its vessels, an advantage that would be compromised by joining a Western-led military operation. Beijing also seeks to preserve its global image as a neutral power, and Chinese strategists worry that adding more naval presence would trigger a “vicious cycle” of retaliation. The success of China’s diplomacy is already evident as major Chinese shipping firms like Cosco have resumed Gulf bookings, and some Chinese-owned ships have resumed transiting Hormuz under Iran’s proposed safe corridor for “non-hostile” vessels. China is banking on its mediator role to secure vital energy flows while avoiding the strategic risks and high costs associated with direct military entanglement.

By Jie Gao, Research Associate on Foreign Policy and National Security, Center for China Analysis

Learn More: Listen to “Jeffrey Feltman on the Israel-Hezbollah Conflict” with non-resident Distinguished Fellow Jeffrey Feltman and ASPI’s Managing Director Rorry Daniels on Asia Inside Out, a podcast by the Asia Society Policy Institute.

4. China Signs Declaration to Triple Nuclear Energy

What Happened: At the second Nuclear Energy Summit 2026 in Paris on March 10, China signed the Declaration to Triple Nuclear Energy. The Declaration, which first launched at the World Nuclear Symposium ahead of COP28, calls for a collective effort to triple global nuclear energy capacity by 2050 in order to help countries keep on track to meet their Paris Agreement climate goals. China’s endorsement of the Declaration reflects recent 15th Five-Year Plan goals to develop 110GW of nuclear capacity by 2030. At the end of 2025, China’s nuclear capacity totaled 62GW which fell short of its 70GW target. China had also missed its earlier 58GW target for 2020. These shortfalls are largely attributed to the suspension of construction after the Fukushima nuclear disaster.

Why It Matters: Amid a backdrop of geopolitical instability and volatile global energy markets, China’s approach to increasing its nuclear capacity reinforces its “all of the above” strategy to diversify its energy sources. Its efforts to scale up solar, wind, hydro, and nuclear energy have reflected a desire to reduce reliance on external markets and build resilience domestically.

By Taylah Bland, Fellow on Climate and the Environment, Center for China Analysis (@Taylahbland)

Learn More: Read “The Evolving Politics of Climate Change in China” by CCA Fellow Neil Thomas and Senior Fellow Guoguang Wu.

5. Xi Reaffirms Commitment to Xiong’an as Political Stakes Rise

What Happened: On March 23, Xi Jinping, during his fourth inspection tour of the Xiong’an New Area since its establishment, reaffirmed that Beijing’s decision to develop Xiong’an was “entirely correct.” He called for sustained “strategic resolve” and “long-term patience” in transforming the area into a model of high-quality development. Following his remarks, Premier Li Qiang and Vice Premier Ding Xuexiang urged officials to fully implement Xi’s instructions, with a focus on improving public services and accelerating the growth of emerging and future industries. Xinhua News Agency reiterated that the project is a national “millennium plan.”

Why It Matters: As one of the signature “millennium projects” of the Xi era, Xiong’an was launched in 2017 with the slogan: “The 1980s looked to Shenzhen, the 1990s to Pudong, and the 21st century to Xiong’an.” Total investment has now exceeded 1 trillion yuan. Yet persistent criticism over slow progress in supporting infrastructure and public services has led some observers to label the area an “unfinished” city, raising questions about the project’s effectiveness. Beyond Xi Jinping himself, Xiong’an’s trajectory is increasingly tied to the political fortunes of senior officials overseeing regional development — particularly Li Qiang, Ding Xuexiang, He Lifeng, Yin Li, and Chen Min’er.

By Lobsang Tsering, Senior Research Associate on Chinese Politics, Center for China Analysis

Learn More: Read “Xi’s Personal Priorities: What Matters Most to China’s Leader?” by CCA Fellow Neil Thomas and Lobsang.

1. Trump’s China Trip Delay Not Expected to Change Beijing’s Basic Approach PLA Air Activity Near Taiwan Paused During Two Sessions

What Happened: Donald Trump announced he will delay his planned visit to China by about a month as he deals with the war in Iran. Recent reporting suggests Chinese officials remain in contact with Washington about the summit and are treating the postponement as manageable rather than alarming. A short delay gives both sides more time to prepare for a meeting that appears to have been short on planning and concrete deliverables, even as pre-summit talks continue on trade, agriculture, rare earths, and investment issues.

Why It Matters: The delay is unlikely to produce a major shift in China’s position. Whatever happens in Iran, Xi Jinping still appears to want a relatively stable relationship with Washington and to avoid a sharper spiral of tariffs, sanctions, or export controls. A prolonged war could raise energy and economic risks for China, but it is unlikely to overturn Beijing’s preference for steadier ties. The most likely path for U.S.-China relations remains high-level diplomatic stabilization with continued economic and security competition unfolding below. The postponement rather than cancellation of Trump’s trip suggests neither side wants to abandon top-level engagement, but certain shocks to the relationship, such as the kind seen during the 2023 balloon incident, can still disrupt diplomacy quickly.

By Neil Thomas, Fellow on Chinese Politics, Center for China Analysis (@neilthomas123)

Learn More: Read “Can the United States and China Find a New Equilibrium on Trade and Technology?” in China 2026: What to Watch, by Brendan Kelly and Michael Hirson

2. PLA Air Activity Near Taiwan Paused During Two Sessions

What Happened: Between February 27 and March 5, and again from March 7 to 10, 2026, PLA air activity around Taiwan’s Air Defense Identification Zone (ADIZ) paused completely — the longest lull since Taiwan began publicly releasing daily military data in 2020. The pause represents a rare break in otherwise routinized military drills near Taiwan. Air activity resumed on March 11, returning to an established pattern of regular incursions.

Why it Matters: The most likely explanation for the pause is that PLA air incursions into Taiwan’s ADIZ typically drop significantly around the time of China’s annual “Two Sessions” meetings, which occurred from March 4–11 — though a pause in air activity for 11 days is unprecedented since at least 2020. An alternate explanation is that recent PLA purges have degraded operational readiness. However, the PLA has demonstrated a capacity for complex joint operations near Taiwan despite recent personnel changes, including major exercises following the December 2025 purge of General Zhang Youxia. PLA Navy operations also did not decline during the same window, with 76 vessel transits recorded near Taiwan. Thus, these latter explanations seem less plausible. Now that air activity has resumed, expect sustained incursions near Taiwan for the foreseeable future.

By Lyle Morris, Senior Fellow on Foreign Policy and National Security (@LyleJMorris), and Sheng-Wen Cheng, Research Intern, Center for China Analysis

Learn More: Read “PLA Watch: Special Issue by Dr. Phillip C. Saunders” on the Center for China Analysis’ Substack

3. China’s Retail and Investment Data Show Conflicting Trends

What Happened: China’s National Bureau of Statistics (NBS) released its January–February 2026 data covering retail sales, fixed asset investment, and monetary conditions. Retail sales rose 2.8% year-on-year, with services at 5.6%, supported by the extended Spring Festival holiday and early trade-in subsidies. Fixed asset investment (FAI) rebounded to +1.8%, led by infrastructure (+11.4%) and equipment spending (+11.5%) as the 15th Five-Year Plan cycle begins. Private investment stayed in contraction at -2.6%, and real estate remained weak with new starts down 23%. The broad money supply (M2) grew 9.0%, signaling ample liquidity.

Why It Matters: The data came in well above a deeply pessimistic market consensus. Caixin’s survey had forecast FAI at -3.7% versus the actual +1.8%. But the composition raises concerns. Growth is driven by infrastructure and policy-supported equipment upgrades, while private investment, real estate, and underlying consumption remain soft. Inflation signals are still weak. February CPI rose 1.3%, driven by holiday effects, but the January–February average was only +0.8%, far below the 2.0% target. February producer prices at -0.9% confirms ongoing factory-gate deflation. Data from the People’s Bank of China shows ample liquidity in the banking system, yet credit demand remains subdued. Reaching the 2.0% inflation target will likely require stronger push on demand-side policy.

By Shengyu Wang, Research Assistant, and Lizzi C. Lee, Fellow on Chinese Economy, Center for China Analysis (@wstv_lizzi)

Learn More: Read “2026: The Year of Rebalancing” by Lizzi and Jing Qian, CCA Co-Founder and Managing Director.

4. Xi to Double-down on Centralized Governance Over the Next Five Years

What Happened: The full text of the 15th Five-Year Plan, spanning sixty-two chapters, has been officially released. A critical focal point for political direction is Chapter 61, which details three strategic pillars designed to reinforce the “centralized and unified leadership of the CCP” through 2030: 1) Comprehensive Party oversight: integrating Party leadership into every stage of plan implementation while maintaining a commitment to “democratic, scientific, and law-based” decision-making. 2) Professional competency: enhancing the capacity of officials to govern in accordance with rules and regulations. 3) Strict supervision: intensifying oversight of “top leaders” and the rising generation of young cadres to ensure ideological and operational alignment.

Why It Matters: While Xi Jinping has made “centralized and unified leadership” a hallmark of his tenure, this plan suggests he is not abandoning the traditional Chinese sixteen-character principle that has guided CCP decision-making since the 1990s: “collective leadership, democratic centralism, individual consultations, and collective decision-making.” By blending absolute central authority with these established consultative mechanisms, Xi aims to continue to navigate the delicate balance between security and development. Barring significant internal upheaval or systemic “black swan” events, the CCP appears structurally positioned to meet its core political and developmental targets over the next five years.

By Lobsang Tsering, Senior Research Associate on Chinese Politics, Center for China Analysis

Learn More: Read “What Happened at China’s Two Sessions in 2026“ with key takeaways from CCA experts.

5. China Passes New Environmental Code

What Happened: At the Two Sessions on March 12, China’s legislature adopted the Ecological and Environmental Code, the second such code after the 2020 Civil Code. This legislation consolidates elements of China’s existing environmental framework, bringing together laws and regulations across air, land, and water with a specific chapter dedicated to green and low-carbon development. It also reinforces China’s continued role in global environmental governance.

Why It Matters: Amid continued climate impacts and geopolitical instability, China’s environmental code reinforces the country’s commitment to strengthening its domestic and international environmental governance. The emphasis on green and low-carbon development aligns with China’s leadership in clean technologies and the broader economic benefits the industry yields.

By Taylah Bland, Fellow on Climate and the Environment, Center for China Analysis (@Taylahbland)

Learn More: Read “The Evolving Politics of Climate Change in China” by CCA Fellow Neil Thomas and Senior Fellow Guoguang Wu.

March 18, 2026 — This episode of China’s DeepSeek Moment webinar series from the Asia Society Policy Institute’s Center for China Analysis (CCA) examines China’s accelerating push to digitize its healthcare system. China is increasingly leveraging technological tools to address long-standing structural challenges, including uneven access between urban and rural areas, overstretched hospitals, healthcare workforce shortages, mounting pressure from the aging population, and rise in chronic disease. Yet healthcare is a high-stakes domain where rapid tech adoption, including artificial intelligence (AI), raises questions about safety, governance, data integrity, and public trust. Lizzi C. Lee, CCA fellow on Chinese Economy, is joined by Winnie Yip, professor of the Practice of Global Public Health Policy and Economics at the Harvard T.H. Chan School of Public Health; and Ruby Wang, CCA honorary fellow on Global Public Health, to assess where health tech is delivering real value, where risks are accumulating, and what China’s “AI + healthcare” strategy may mean for China’s health-system reform and global health innovation. (46 min., 5 sec.)

By Vivianne Zhang Wei, Founder of Chinese Farm Chronicles and MSc candidate in Contemporary Chinese Studies at the University of Oxford, and Lizzi C. Lee, Fellow on Chinese Economy

The Narrative

Two seemingly conflicting narratives dominate discussions of rural China’s demographic future.

1. One holds that rural areas are bound to empty out under the force of urbanization. Stories of hollowed-out villages, ghost villages, and left-behind elderly populations create the impression that the land is being permanently and inevitably abandoned.

2. The other suggests that the trend is reversing, as young people flock back to revitalize their rural hometowns. This more recent narrative highlights how an emerging generation of modern, tech-savvy new farmers are now returning and injecting “new vitality” into rural areas. Largely a state-led one, this narrative conveys a sense that technological development and policy support has created an abundance of attractive livelihood opportunities in the countryside.

The Reality Check

Both narratives are rooted in real trends, but each capture only part of the full picture.

1. China has undergone a historic rate and scale of urbanization over the past four decades, but interpreting its population movement as a simple one-way exodus from the countryside obscures the far more complex dynamics at work.

• Large-scale rural-to-urban labor migration in China first took off in the 1980s, as market reforms released peasants from the collective farming system, while simultaneously generating enormous demand for low-cost labor in coastal factories. Ever since, sustained export-led industrialization, along with rapid infrastructure and real estate development, has continued to draw successive waves of villagers into urban wage employment. As of 2025, there were nearly 300 million rural migrant workers in China, together accounting for roughly 41% of the national workforce.

• In mainstream migration theory, migration is often understood as a permanent change in residence. However, villagers in China who migrate to the city for work are far from guaranteed to become fully settled urban residents. Officially designated as nongmingong (农民工) — literally “peasant workers” — rural migrant workers in China, by definition, remain tied to their rural places of origin even as they live and work in the city.

• The migration trajectory most commonly described to me by middle-aged and older migrants is to return home at least once a year for the Spring Festival, intermittently in times of crises and need — such as illness, unemployment, family emergencies, or busy farming seasons — and ultimately for good, once one ages out of the urban job market. Younger generations of migrants today, who on average have higher levels of education and greater aspirations for an urban lifestyle, are generally less attached to their rural homes, but many of them continue to face significant barriers to settling in the city.

• In the literature on China’s rural-urban inequalities, such barriers are primarily attributed to the household registration (hukou) system. China’s 67% urbanization rate reflects the urban population based on place of actual residence, but under the hukou system, the rural migrant workers who make up a third of it still remain legally registered as rural residents. This means they get to live and work in the city, but with limited access to certain welfare provisions reserved for local hukou-holders — such as urban pension schemes and, most importantly for many families, public education for their children.

• Although hukou-based restrictions have eased considerably over time — with many cities both expanding welfare access for non-local residents and lowering thresholds for local hukou conversion — these reforms have been concentrated primarily in small and medium-sized cities, rather than in the major metropolitan centers to which migrants most aspire. At the same time, rural migrant workers continue to experience precarity and uncertainty in the city despite these policy adjustments. This suggests that their vulnerability stems not only from formal hukou-based exclusion, but also from deeper structural inequalities.

• Returned migrant workers I recently spoke to in rural Sichuan consistently emphasized that finding work in cities has become markedly more difficult over the past two to three years. This has in part to do with the general economic slowdown, but another key factor has been the prolonged downturn in China’s real estate sector, which has led to drastic reductions in demand for construction labor. If this trend continues, some of them tell me, more and more migrants may have little choice but to return home.

• This insight is crucial for understanding not only the migration trajectories of China’s rural population but also the logic shaping their responses to state interventions — such as the limited uptake of urban hukou conversion opportunities, or recent years’ surging resistance to rural land expropriation. Evidently, rural migrant workers are not just passively shuffled back and forth by policy incentives, but strategic actors who may consciously choose to sustain a “floating” state to hedge against economic uncertainty. So long as large segments of China’s migrant workforce remain reliant on such risk-management strategies, the country’s headline urbanization rate cannot be taken as evidence of fully realized urban integration.

2. While new livelihood opportunities are indeed emerging in rural areas as potential alternatives to precarious migrant work, these remain unevenly distributed.

• Since the launch of the Rural Revitalization Strategy in 2017, Beijing has elevated rural development and agricultural modernization to core national priorities. A key pillar of this vision is ‘talent revitalization’: attracting human capital back to the countryside and incentivizing them to contribute to the development of their hometowns and villages. This has put return-migration at the center of rural development discourse.

• But like the rural population more broadly, “return-migrants” in China are not one homogenous group. Their positions in society, hence conditions of return, differ vastly depending on, for example, class, region, sector, gender, and education-level. To understand how exactly migration patterns are changing, we need to look more closely at who exactly is going where.

• A keyword for understanding these nuances is fanxiang (返乡), which is usually translated into “returning to the countryside” in English. The State Council’s No. 1 Central Document in 2008 was the first policy document to describe returning migrant workers as fanxiang nongmin 返乡农民, “returning-to-the-countryside-peasants”. Since then, the term has become ubiquitous in official rural development discourse.

• This shift in language is significant in ways that the English translation is unable to capture. Firstly, fanxiang is sentimental: xiang (乡) in Chinese means both “home” and “countryside,” imbuing it with a sense of rural hometown nostalgia. It is also moral: fan (返) implies a much stronger sense of purpose and mission than the neutral verb for “to return,” hui (回).

• Along with its use in the contexts of fanxiang chuangye (返乡创业), “returning to the countryside to start a business” and fanxiang qingnian (返乡青年), “returning-to-the-countryside-youth”, fanxiang has come to connote a very specific notion of not just returning to one’s rural home, but returning with skills, capital and entrepreneurial, patriotic ambitions.

• In my experience, individuals who describe their own return-trajectories as fanxiang are typically college-educated or white-collar migrants who first settled in the city, and then made an active, voluntary decision to return. While such individuals do constitute a genuine and growing trend, they represent a much smaller share of the broader return-migration flow than official discourse may make it seem.

  • Here, regional differences are important to recognize. Many of the highly publicized fanxiang stories are concentrated in more developed eastern provinces. With stronger market infrastructure, and typically greater fiscal resources and local governance capacity, these regions tend to score better across multiple dimensions of rural revitalization. Meanwhile, in China’s major migrant-sending central and western regions, like parts of Sichuan where I have conducted most of my research, return continues to be largely driven by constraints such as injuries, health conditions, and caregiving obligations rather than opportunity.

  • In this context, people rarely speak of their return-trajectories as fanxiang. Instead, my interlocutors would either simply describe it as a neutral “having coming back” (回来了) or, if they considered their return only temporary, “not having gone out this year” (今年没有出去).

• These may seem like minor semantic differences, but the language people use to describe their mobility tells us a great deal about how they understand their own positions in society and life.

• Only if you were able to fully leave the countryside and fully enter the city in the first place, does it make sense to speak of fanxiang. Such absolute terms will not resonate with the vast majority of migrant workers, who are still pursuing deeply precarious livelihoods as they float between the countryside and city — continuously in a state of either going out, but likely returning soon, or being back, but probably going out again.

• This kind of stratification within the rural migrant population is crucial to keep in mind when interpreting official narratives and statistics. For example, official sources last year suggested more than 12 million people nationwide had fanxiang chuangye, “returned to their rural hometowns to start businesses.” The specific inclusion criteria are not disclosed, but this figure likely encompasses a broad range of individuals, including those whose conditions for return differ sharply from the idealized return-migration journey brought to mind by the term fanxiang.

Why This Matters

Perceptions of who is leaving and who is returning to the countryside matter as they directly shape our ideas of what rural development policies should look like, and whose needs they are meant to serve.

• Since the launch of the Rural Revitalization Strategy in 2017, Beijing has elevated rural development and agricultural modernization to the level of core national priorities. Behind this agenda lie two closely connected yet distinct drivers.

  • One is to improve the lives and long-term prospects of rural residents. Addressing persistent urban–rural inequalities and delivering its promise of ‘common prosperity’ is not merely a social goal for the CCP, but increasingly also a matter of political legitimacy.

  • However, a second and at least equally powerful driver is the strategic imperative to safeguard national food security. China faces a significant, long-term challenge in feeding nearly one-fifth of the world’s population with only one tenth of its arable land. Amid intensifying geopolitical tensions, Beijing has strengthened its resolve to hold the Chinese rice bowl firmly in its own hands.

• Hence, as successive No. 1 Central Documents have emphasized, the defining challenge of China’s agrarian future is the question of “Who will till the land?” (谁来种地?). Hayward (2017) observes that this debate has been broadly divided between those who advocate a path of agro-industrialization — the consolidation of agricultural land and production by large-scale agribusinesses — and those cautioning against it. Each side grounds its arguments in different interpretations of rural demographic change.

• The two dominant narratives discussed in the previous section can easily be mobilized to legitimize the agro-industrialization path: if traditional peasants are abandoning their land anyway, and modern agricultural professionals are taking their place, the transition toward large-scale, industrial agriculture appears natural and inevitable. This interpretation long resonated with Anglo-American observers, as it mirrors the European trajectory of agricultural modernization.

• However, it has become increasingly clear that present-day China’s conditions are fundamentally different from those of nineteenth century Europe. Those who caution against embracing the Western development path point toward Chinese peasants’ continued reliance on their land under the country’s unique hukou and land ownership systems. While they have indeed become widely absent from it, scholars emphasize how the entry of urban capital into agriculture has also contributed to driving them out of farming and into urban wage labor in the first place.

• A common misconception is that the Chinese state firmly and uniformly backs the former path. However, as Hayward (2017) observes, debate about China’s agrarian future is rife even at the highest levels of policymaking: “Of all the scholars and local officials I interviewed in preparation for this article, none agreed that large-scale agribusiness was considered by the central government to be the driving force of agricultural modernization.”

• Indeed, the growing emphasis on “the comprehensive revitalization of rural areas” in policy documents shows that the Party’s rural development approach — though still fundamentally technocratic — increasingly articulates a more pluralistic vision of “agricultural modernization” than simply the wholesale replacement of peasants by big capital.

  • For example, in the fifth section of the recently released No. 1 Central Document of 2026 titled “Strengthen institutional and mechanism innovation,” it stresses the need to “promote the organic integration of smallholder farmers and modern agricultural development.”

  • Accordingly, the government continues to express support for alternative forms of agricultural organization, such as family farms, farmers’ cooperatives, new rural collective economies (新型农村集体经济), and what it calls “appropriately scaled agricultural operations” (农业适度规模经营). These paths, too, are promoted as a part of the official agricultural modernization vision — including through fanxiang stories which foreground returnees who pursue them.

Between the Lines

The tensions between different conflicting narratives of demographic change in rural China reflects broader tensions in the debate over China’s rural and agricultural development trajectory. Under the current Rural Revitalization paradigm, this tension seems to arise mainly from the need to balance the strategy’s two core objectives: boosting productivity to safeguard national food security, and boosting farmers’ incomes to achieve common prosperity. While many dimensions of the strategy indeed do kill both of these birds with one stone, a closer examination from on the ground reveals that the targets do not always align.

• For example, none of returned migrant workers I spoke to in rural Sichuan mentioned “rural revitalization” unprompted, and when asked, they largely spoke of such policies as irrelevant to ordinary peasants like themselves. As one villager put it to me: “Rural Revitalization is just a few people getting rich.”

• This suggests that Rural Revitalization policies are still perceived to favor scales and forms of production out of reach for much of the rural population. The risk, then, is that only the few returnees and local elites who have the skills, capital, and conditions to take these entrepreneurial risks disproportionately benefit. This would leave the rest in a seemingly more precarious position than ever — faced with a declining urban labor market on the one hand, and increasingly stratified countryside on the other.

The Bottom Line

China’s countryside is neither disappearing nor being evenly revitalized by waves of modern farmers. Simplified narratives that either mischaracterize the rural population’s cyclical labor mobility as a permanent exodus, or exaggerate their livelihood prospects at home, risk creating inflated expectations about what certain visions for agricultural modernization can realistically deliver for the many ordinary farmers who still depend on their land. However, contrary to common misconception, the government is not blind to these tensions. Reaffirming Beijing’s commitment to continue promoting both national food security and farmers’ prosperity, this year’s No. 1 Central Document shows acute awareness of the challenge ahead: to find a balance that ensures the Chinese rice bowl is at once held firmly, and in hands of the many.

Dr. Phillip C. Saunders is Director of the INSS Center for the Study of Chinese Military Affairs at National Defense University. The views expressed are his own and do not necessarily represent those of National Defense University, the Department of War, or the U.S. government.

PLA Autonomy and the Chinese Military Purges

This essay assesses Xi Jinping’s January 2026 purge of Central Military Commission (CMC) Vice-Chair Zhang Youxia and Chief of the Joint Staff Department General Liu Zhenli. The analysis focuses on the extent to which Xi Jinping grants the People’s Liberation Army (PLA) autonomy in the military sphere.

Many analyses of party-army relations in China assume a tacit bargain by which the party grants the PLA a degree of autonomy on military issues in exchange for the military’s political loyalty, sometimes called the “conditional compliance” model.1 Since assuming his role as Chairman of the CMC, Xi has emphasized the power of the CMC’s “Chairman Responsibility System” (CRS) to assert the right to make all military decisions, but in practice, he continued to respect many PLA institutional equities. The current purges of senior PLA leaders, however, suggest that Xi has intervened decisively in the military sphere and that the past assumption of a tacit bargain that grants the PLA a significant degree of autonomy may no longer be valid.

This analysis provides context for understanding Xi’s unprecedented purge of senior PLA officers and concludes by assessing four models that Xi might use to tighten future control over the PLA. It assesses the impact of each on party control and operational effectiveness. None seems likely to solve what may be an unsolvable problem. The most likely approach could involve a mix of younger generals who might be more honest and more politically compliant, and further efforts to strengthen the political work system and monitoring capabilities.

My central argument is that despite Xi Jinping asserting his authority to make military decisions through the CRS, in practice, Xi has continued to respect many PLA institutional equities. The most recent round of purges challenges the validity of this assumption going forward.

The Current Purge in Context

The current purges differ from Xi’s efforts to clean house in the PLA in 2013-15. In addition to targeting rampant corruption, those purges sought to remove generals loyal to Xi’s political rivals, assert control over the PLA, and reduce resistance to ambitious military reform plans.2

Yet there were limits on how far Xi could go.

Joel Wuthnow’s piece in the China Leadership Monitor (finished prior to Zhang Youxia’s purge) compares the first PLA purges with the current round (2023-2026).3 One of Wuthnow’s notable findings is that the earlier round of purges largely left the PLA’s most senior leaders, and especially operational commanders, in place, despite their complicity in widespread corruption. Fang Fenghui, then head of the General Staff Department (the rough equivalent of the CJCS), was the most senior operator purged in the first round.

By contrast, the current round is targeting senior leaders and operational commanders, albeit in a strategic, phased manner that isolated Zhang before moving against him.

Dr. Wuthnow’s earlier work on PLA senior promotions found considerable respect for PLA institutional equities: every part of the force received its proportional share of promotions, and promotions proceeded by age cohort, with generals who waited their turn eventually getting a chance to compete for the top jobs.4

Earlier NDU work, including a Wuthnow & Saunders journal article on party-army relations, found that current institutional arrangements essentially rely on the PLA to police itself through uniformed political commissars and discipline inspectors.5 The 2016 reforms strengthened emphasis on political work and party organs inside the PLA and made institutional changes to strengthen monitoring mechanisms (including the discipline inspection system), but maintained this basic institutional arrangement.6

Given that he couldn’t do everything himself (the CRS runs up against the First Saunders Theorem—“the scarcest resource in government is high-level attention”), Xi was forced to find allies within the PLA that he could trust to carry out his wishes. However, respect for PLA equities meant that Xi had to select from a limited pool of officers with the requisite age and experience, even though most (and maybe all) of them were complicit in widespread corruption (including paying for senior positions). General Zhang Youxia appeared to be the most important of these allies, but obviously, the relationship soured.

This can be understood within a “conditional compliance” model of party-army relations dating back to Deng Xiaoping, which describes a bargaining relationship which gave the PLA considerable autonomy over military affairs in exchange for its political loyalty to the party.

The current purges, which are far more intrusive and comprehensive than the 2013-15 round, end this past respect for PLA institutional equities and may break this tacit bargain with the PLA.

Senior PLA leaders and the operational elite have been targeted so comprehensively that lower-ranking generals have no one left to protect them. (The extent of the purges is illustrated in an interactive infographic in a New York Times article, “China’s Disappearing Generals.”)7

Zhang Shengmin is the last general standing, despite evidence that he was also under investigation for corruption in September 2023.8 One has to conclude that at some point, he flipped on his peers and helped Xi assemble the dirt on other senior generals, though this may not be enough to secure his long-term future.

Although we don’t know the inner workings of party-army relations with much fidelity, I suspect that after the PLA Rocket Force and weapons development system scandals, Xi concluded that the current model of running the PLA through trusted generals and letting the PLA monitor itself wasn’t working. It’s not clear the extent to which this judgement rests on concerns about corruption, political loyalty, responsiveness to his orders, or a failure to meet the demands of producing a modernized, capable military.

Once Xi decided a comprehensive purge of the top brass was necessary to fix these problems (in whatever order of weighting), he executed it strategically to isolate Zhang Youxia and Liu Zhenli before they finally got the axe. He likely tried to convince Zhang that he was part of the solution rather than the ultimate target of the purges.

Four Models for Party-Army Relations

What happens next? Here are four options Xi might consider for managing party-army relations in the future:

1) Keep the same basic structure, but with younger generals who are more capable, less corrupt, and have limited independent power bases. Given that most operational commanders are posted in only one geographic area until they reach deputy corps leader grade, their political networks within (and beyond) the PLA are likely shallower than those of more senior military leaders, possibly making them more compliant. Xi Jinping’s desired mix of “red vs. expert” in new PLA leadership is unclear, but he would still be selecting new PLA leaders from a somewhat dirty pool of candidates.

2) Restructure the political work and supervision/monitoring apparatus to inculcate more loyalty and make officers too scared to be corrupt. The problem is that Xi did this in the 2016 reforms, and it didn’t work.9 We would look for more intrusive monitoring of communications and activities of generals, tighter scrutiny of anything involving contracts and money, and periodic rotation of assignments so that the political commissars and discipline inspection commission officers don’t have established ties with those they are supposed to be monitoring. All of this was tried before and proved insufficient, likely because the supposed monitors were eventually corrupted (probably including Zhong Shaojun, Xi’s longtime civilian aide and eyes and ears inside the CMC General Office, and Admiral Miao Hua, who had primary responsibility for maintaining political dossiers and recommending senior officers for promotion in his capacity as Director of the CMC Political Work Department until he was purged in November 2024).10 Xi would need to either get personally involved in making senior officer promotion decisions or find a trusted officer who would implement his preferences.

3) “Permanent Revolution” with periodic transfers and purges of senior brass so that they are never in place long enough, or confident enough, to disobey or engage in corruption. Xi Jinping has been talking about “self-revolution” within the party since at least 2024. The problem is that senior officers would not be in place long enough to learn their jobs, build relations with new peers and subordinates, and operate effectively in a conflict. Moreover, they would always be wondering when the axe might fall, disrupting their focus on their military responsibilities. This solution prioritizes political control at the expense of operational effectiveness (which is something Xi also wants). It might also prove counter-productive by stimulating scared generals to seek to remove Xi.

4) Get outside monitors to watch the PLA and potentially compete with its internal security mission. Many authoritarian systems rely on multiple and competing mechanisms to manage domestic security and monitor their militaries, but this solution has been off the table in China due to PLA autonomy. The CMC Discipline Inspection Commission was intended to monitor PLA party committees but proved ineffective in preventing wide-scale corruption.11 Xi could set up the Ministry of State Security (MSS), the Ministry of Public Security (MPS), or both as monitors of PLA loyalty, with intrusive access into PLA communications and operations. (Secrecy and control over military information have historically been a key source of PLA bureaucratic power.)12 Xi could rely more on the local National Security Commission system and provincial military committees to monitor the PLA at the provincial/major city level. A variant would use independent media and legislative monitoring to watch the PLA, but this is highly unlikely given Xi’s emphasis on party control. Xi could also give the People’s Armed Police (PAP), MSS, and/or MPS more responsibility for domestic security.

None of these solutions is necessarily off the table, but none seem likely to solve what may be an unsolvable problem.

A Prediction

If pressed to predict, the most likely approach would involve a mix of younger generals who might be more honest and more compliant and modest efforts to strengthen the political work system and monitoring capabilities. Xi will probably also have to personally devote more time to watching the PLA.

Recent PLA Daily editorials appear intended to explain the purges and to convey the new reality to remaining PLA leaders, couching the purges as necessary to achieve shared modernization goals.13 The purges will also provide new professional opportunities for younger generals with the requisite political loyalty and operational skills (in whatever ratio Xi sees as best).14 Xi’s remarks to PLA and PAP delegates at the National People’s Congress suggest that political loyalty will be an essential criterion.15

That raises the question of how Xi, or a trusted subordinate (who?) will make those evaluations and select new PLA leadership. It is also unclear whether any of the senior officers currently under investigation will come out the other side with a clean bill of health and possible promotion to the many senior positions that are currently vacant.

This wholesale purge of the PLA senior ranks will be very disruptive and have a negative impact on PLA readiness and ability to perform the coordinated tasks needed for large-scale military operations such as an invasion of Taiwan.16 The impact on smaller-scale operations and military training will likely be much more limited.17 Over the medium term, PLA capabilities may improve as younger, better-educated officers who have reached professional maturity inside the theater command system and who have more experience with joint operations move into senior positions.18

A longer-term question is how party-army relations will evolve after Xi is gone. Xi is currently at the height of his power, as demonstrated by his ability to remove so much of the senior PLA leadership. A future successor would almost certainly have less power within the party, less knowledge of military issues, and a weaker network of PLA contacts, making it hard to assert and maintain control over the military. This might prompt a recalibration of the conditional compliance bargain, which cedes more autonomy back to the PLA.

13

“Firmly believe in the inevitable victory against corruption and the inevitable achievement of a strong military” [坚定反腐必胜、强军必成的信念信心], PLA Daily, January 31, 2026. For a partial translation, see Manoj Kewalramani, Tracking People’s Daily Substack, “PLA Daily Commentary on Purge of Zhang Youxia & Liu Zhenli: ‘Special Tempering’ Underway; ‘Diseased Trees’ Being Uprooted; & New-Era Officers to Take Charge,” January 31, 2026,

Tracking People's Daily

PLA Daily Commentary on Purge of Zhang Youxia & Liu Zhenli: 'Special Tempering' Underway; 'Diseased Trees' Being Uprooted; & New-Era Officers to Take Charge

***Corrected the earlier oversight in classification of the PLA Daily piece from editorial to commentary…

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3 months ago · 13 likes · 2 comments · Manoj Kewalramani

Last week, Beijing wrapped up its annual Two Sessions — the parallel meetings of China’s legislature, the National People’s Congress (NPC), and its top political advisory body, the Chinese People’s Political Consultative Conference (CPPCC). Highlights of this year’s gathering included Premier Li Qiang’s Government Work Report, several closely watched appearances by President Xi Jinping, the removal of several officials from civilian posts and the People’s Liberation Army (PLA) ahead of the meeting, and the release of China’s 15th Five-Year Plan (FYP), a blueprint for the country’s development from 2026 to 2030. Below, experts from the Center for China Analysis (CCA) assess the key takeaways across several issue areas. Last week, CCA also co-hosted a webinar on the Two Sessions with the South China Morning Post featuring Lizzi C. Lee, Lyle Morris, and Neil Thomas.

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The Three Cs: Continuity, Consistency, and Conservatism

Neil Thomas

This year’s Two Sessions can be summed up in three Cs: continuity in politics, consistency in policy, and conservatism in approach.

The political story was continuity. The meetings again showed how completely the system revolves around Xi Jinping. His three main appearances during the sessions — with the Jiangsu provincial delegation, with CPPCC members from the medical and social welfare sectors, and with PLA delegates — all pointed in the same direction. China is beginning the 15th FYP period under Xi’s leadership and on Xi’s terms. The removals of civilian and military leaders in the run-up to the meetings reinforced the message. So did Xi’s remarks to PLA delegates, where he returned to the familiar themes of loyalty and anti-corruption. Political discipline remains at the core of how he governs.

The policy signal was just as consistent. In his March 5 remarks to the Jiangsu delegation, Xi emphasized new quality productive forces, technological upgrading, and industrial self-reliance. Those longstanding priorities aligned with the Government Work Report and the newly approved FYP, both of which place innovation, industrial modernization, artificial intelligence, and resilience at the heart of China’s development strategy. The direction of travel was familiar. What the Two Sessions showed was a firmer official embrace of a shift Xi has been advancing for years: away from the old growth model of property, debt, and experimentation and toward a more security-minded, state-steered, technology-heavy model.

The broader governing style on display was conservative. Xi’s March 6 speech on the Healthy China initiative continued attention to welfare and social policy, but within a framework shaped by stability, state capacity, and population quality rather than bold redistribution or structural liberalization. That same caution could be seen in the lower growth target, the lack of major stimulus, and the FYP’s incremental language on rebalancing toward consumption. Taken together, this year’s Two Sessions projected control, discipline, and strategic focus, but little appetite for bold policy change.

Xi Gets His Way at Last

Christopher K. Johnson

At first glance, the politics of this year’s Two Sessions seemed almost dull. As with last fall’s Fourth Plenum, the numerous empty chairs in the cavernous hall where delegates meet were a stark reminder that Xi Jinping’s withering anti-corruption drive remains white hot. But there were no political earthquakes like January’s purge of military supremo Zhang Youxia, and nothing as dramatic as Xi’s abolishment of presidential term limits at the 2018 meeting occurred either.

And yet, after nearly a decade and a half in power, Xi’s signal political accomplishment at this year’s meeting was to finally force the system to loudly endorse his grand project of transforming China’s economic development model. That he did so through a FYP, the regime’s most formal and authoritative vehicle for conveying its long-term economic strategy, lent additional gravity to the achievement. Of course, the broad outlines of Xi’s economic program — jargon-laden theories such as the new development concept, dual circulation, and new quality productive forces — have been around for years. But the Two Sessions’ key documents marked the government’s most thorough embrace yet of Xi’s economic vision.

That it took so long for Xi to get his way in formally embedding all those ideas in one FYP seems incongruous with what is accurately described as his unmatched power. But the vast size and scope of the bureaucracy, along with local officials’ stubborn adherence to the notion that “the mountains are high and the emperor is far away,” make it less so. Even so, Xi has made far more progress in flattening those mountains and keeping provincial barons within arm’s reach than any of his predecessors except Mao Zedong.

The new 15th FYP represents the ultimate triumph of Xi’s quest for resilience, self-sufficiency, and security over growth, openness, and reform. A useful analogy for the course of this campaign might be the seven stages of grief. Throughout Xi’s tenure, the elite and the bureaucracy have worked their way through all of them — shock and disbelief, denial, anger, bargaining, depression, and testing — and may now finally be arriving at acceptance.

The Purges Behind the Pageantry

Guoguang Wu

This year’s Two Sessions focused on the making of the 15th FYP, and personnel issues were not formally on the agenda. The NPC Standing Committee, which meets roughly every two months, has authority over government personnel appointments that now extends up to and including the rank of vice premier. As a result, it now often appears unnecessary to discuss or decide State Council personnel changes at the NPC’s annual full session.

The NPC and the CPPCC, however, still have their own personnel issues to manage, especially regarding the qualification of NPC deputies and CPPCC members. Before the Two Sessions formally opened, the NPC Standing Committee revoked the qualifications of 19 NPC deputies on February 26. In a similar move, the CPPCC Standing Committee revoked the memberships of 15 CPPCC members on March 2.

Among those affected were 13 senior generals of the PLA; two of them — Li Wei and Li Qiaoming — are incumbent members of the CCP’s Central Committee, though they have retained those memberships for now. This may suggest that the military purge is moving so quickly that established procedures have not yet fully caught up. Also removed were the top leader of China’s state agency overseeing military industries and eight leaders from major state-owned enterprises, most of them in the defense sector. Together these developments suggest that the purge within the PLA and military-industrial system may be taking place on a much larger scale than outside observers had assumed.

A leading nanoscientist, Wang Chunru, was also among those stripped of CPPCC membership. In addition, Politburo member Ma Xingrui was omitted from the presidium of the NPC session and accordingly was absent from public view during the Two Sessions. That absence strongly suggests that after months of circulating rumors, he too has been purged, even if no formal announcement has yet been made.

Rooting Out Corruption in the PLA

Lyle Morris

The main outcomes and messaging on Chinese foreign and security policy during this year’s Two Sessions were largely consistent with previous meetings, though this year they came with a stern warning about corruption in the PLA.

On defense, China announced a 7% increase in its defense budget, continuing a long-standing pattern of steady, single-digit growth. The increase suggests Beijing remains committed to sustained military modernization despite economic headwinds. At the same time, it marks a modest slowdown from the 7.2% annual increases announced in 2023, 2024, and 2025.

The most noteworthy message from Xi regarding the PLA concerned corruption and political loyalty. And here the message was both direct and dire.

On March 7, Xi chaired a plenary meeting of senior PLA delegates, where he said: “There must be no one in the military who harbors disloyalty to the Party, and there must be no hiding place for corrupt elements.”

A similar message was echoed by Defense Minister Dong Jun and Central Military Commission (CMC) Vice Chairman Zhang Shengmin during subsequent meetings.

For observers, the emphasis was unmistakable: Xi is adopting a zero-tolerance approach to corruption within the military, and any PLA officer who fails to heed the warning will be held to account. Given Xi’s move to remove his top general, Zhang Youxia, months earlier, Xi’s message at this year’s meeting suggested that his anti-corruption campaign has reached new and unprecedented heights.

Finally, on Taiwan, Premier Li Qiang said Beijing would “resolutely crack down on separatist activities” — a shift from last year’s pledge to “oppose” such activities. The wording fits a broader pattern in recent years of senior Chinese officials signaling a firmer line on “independence forces” under Taiwanese President Lai Ching-te.

Devil in the Details of the Government Work Report

Lizzi C. Lee

The most striking thing about this year’s Government Work Report is how many analysts seem surprised by how unsurprising it is. Commentary still laments the headline GDP target and fiscal numbers as disappointing. That is true, but it also misses the point. Beijing has been steadily lowering the temperature of growth expectations and signaling that it will not resort to another massive stimulus cycle anytime soon.

And the work report confirms that. The new growth target range of 4.5 to 5%, down from the 5% target of the past three years, comes alongside a fiscal deficit ratio that remains around 4% of GDP. The quotas for RMB 4.4 trillion in local government special-purpose bonds and RMB 1.3 trillion in ultra-long special treasury bonds are unchanged. There is no major new stimulus push, as the emphasis has shifted toward structural adjustment, including managing local government debt and improving fiscal sustainability. And if growth undershoots later in the year, Beijing can still step in with additional fiscal support.

The more interesting signals sit in the fine print. Fiscal priorities clearly tilt toward science and technology, with central government spending in that category rising 10% year-on-year to RMB 426.4 billion. As expected, the report highlights the AI+ strategy, a broad effort to deploy AI across sectors to lift productivity. But it also repeatedly stresses breakthroughs in basic research and foundational technologies, with ambitions spanning chips, quantum computing, robotics, and nuclear fusion. This suggests growing confidence in Beijing that China can move toward genuine “zero-to-one” innovation, rather than merely scaling and diffusing existing technologies from “one to 100.”

Another notable shift is the more forceful language on prices. China’s GDP deflator has been negative since early 2023, and producer prices have been falling for more than three years. The pledge to “steer general price levels back into positive territory” signals clear recognition of fragile demand and squeezed profit margins driven by domestic oversupply and price-war dynamics.

Finally, the most critical watchpoint lies beyond the report itself. Beijing has been promoting a “correct view of political performance,” urging officials not to obsess over GDP growth alone. But replacing hard growth targets with softer goals such as business confidence or social welfare is easier said than done. The real challenge will be aligning incentives across China’s vast bureaucratic system.

Five-Year Plan Charts an Ambitious Tech Course but a Gradual Rebalancing Path

Michael Hirson

A critical question surrounding China’s 15th FYP, both for China’s population and for the rest of the world, is the extent to which it charts a course toward “economic rebalancing.” The FYP elevates the rhetorical importance of that goal, which calls for boosting the contribution of household consumption to China’s economy while reducing reliance on investment and exports to drive demand. However, the details suggest that progress will be gradual.

The fact that the Plan does not set a quantitative target for raising consumption as a share of GDP makes this an aspirational goal rather than one for which China’s leadership will hold itself — and the rest of the government — to account.

The FYP also outlines a menu of reforms that would structurally support rebalancing. These include accelerating urbanization, strengthening the social safety net, liberalizing the service sector, and redesigning China’s fiscal system to give local governments more resources to spend on such initiatives. However, the language — “explore,” “improve,” “promote” — suggests an incremental pace, especially on fiscal reform.

The FYP’s three highest priorities relate not to demand but to the supply side of the economy: industrial modernization, technological breakthroughs, and artificial intelligence. Beijing believes progress in these areas is vital to China’s economic future as well as its geopolitical resilience. Many of the action words, such as achieving “decisive breakthroughs” in core technologies, convey a sense of urgency that is still missing from consumption policy.

The incremental approach to rebalancing implied by the FYP means that China’s current pattern of growth is likely to persist for some time, with consequences both at home and abroad. That pattern includes a very large Chinese trade surplus in goods, which is driving growing friction with trade partners, and relatively weak consumption, which is contributing to deflationary pressures and subdued confidence domestically.

Climate Goals Quietly Recalibrated

Li Shuo

Compared with priorities such as technological self-sufficiency, economic upgrading, and military strength, climate and sustainable development were never expected to dominate the FYP. The clearest signal of Beijing’s climate ambition lies in its carbon-intensity target — the reduction of emissions per unit of GDP. The plan calls for a 17% cut in carbon intensity by 2030, a level that would leave China short of its 2020 pledge under the Paris Agreement to reduce carbon intensity by more than 65% from 2005 levels by the end of the decade, as set out in its first round of Nationally Determined Contributions.

That 65% target was intended to span two planning cycles: the 14th Five-Year Plan (2021-2025) and the 15th (2026-2030). Pandemic-era economic disruptions, slower-than-expected growth, and continued reliance on heavy industry complicated progress in the first half, leaving a daunting gap for the second. The new target suggests a quiet recalibration, effectively acknowledging how difficult the original 2030 goal has become.

Beyond these headline figures, two dynamics deserve closer scrutiny. First, China’s emissions may be structurally plateauing. The Centre for Research on Energy and Clean Air estimates energy-related carbon dioxide emissions likely declined slightly in 2025, extending a flat or falling trend that began in early 2024. This reflects deeper forces — economic slowdown, weaker demand for steel and cement, and rapid renewable integration — rather than temporary shocks. While officials remain cautious about declaring an early peak, domestic debate is shifting from when emissions will peak to how quickly they should decline. Faster deployment of wind, solar, and especially batteries could further reduce coal dependence over the next five years.

Second, China’s clean-technology development — rather than traditional administrative climate controls — is increasingly becoming the primary driver of emissions reductions. The country now accounts for roughly 80% of global solar photovoltaic manufacturing and more than 70% of global production of wind turbines and electric vehicle batteries. As deployment of these technologies accelerates at home, they will play an ever more prominent role in bending China’s emissions curve downward, bringing Beijing’s economic ambitions into closer alignment with its climate objectives.

1. Xi Signals Focus on Long-Term National Strength by Addressing Foundational Challenges

What Happened: As in previous years, Xi Jinping met with several political, economic, social, and security delegations during the just-concluded Two Sessions. His main focus was the upcoming implementation of the 15th Five-Year Plan. Xi emphasized that China will face an “increasingly complex environment” over the next five years. He noted that China remains “a socialist and developing country with significant urban–rural disparities.” On development, Xi urged officials to “study new conditions and address emerging problems” in order to tackle “deeper structural challenges.” On security, he stressed the importance of prioritizing “foundational, long-term” capacity building — strengthening “the basic underpinnings” of military force development and combat effectiveness.

Why It Matters: Between the lines, Xi’s remarks suggest that beyond concerns about political loyalty within the Party and short-term economic pressures, he remains deeply focused on China’s unresolved structural and foundational challenges in both development and security. Given his assessment that China still faces major regional disparities and remains fundamentally a developing country, Beijing’s top priority over the next five years will likely be to continue strengthening overall national power — rather than chanting slogans, such as “The East is Rising, the West is Declining” or risking a costly move such as a military attack on Taiwan.

By Lobsang Tsering, Senior Research Associate on Chinese Politics, Center for China Analysis

Learn More: Watch a webinar co-hosted by Center for China Analysis and the South China Morning Post on the key takeaways from the Two Sessions featuring CCA Fellows Neil Thomas, Lizzi C. Lee, and Lyle Morris, moderated by Neil Denslow.

2. China Announces Moderate Defense Budget Increase

What happened: During the 2026 National People’s Congress, China announced a moderate increase to its defense budget of RMB 1.91 trillion (US$277 billion). The increase amounts to a 7% increase year-on-year, but marks the slowest rise since 2021. The increase continues China’s steady military spending growth but also marks a modest slowdown from the 7.2% rate of annual increase recorded in 2023, 2024, and 2025. Chinese authorities said the funding would support PLA modernization, improve combat readiness, and accelerate the development of advanced weapons and defense technologies.

Why It matters: While the slowdown is marginal, it suggests that downstream fiscal pressures within the Chinese economy may be having an impact on defense priorities. The decline is likely due to a variety of factors, including tightening fiscal policy and a muscular anti-corruption campaign that has gutted the ranks of senior PLA officers. Given that the campaign singled out mismanagement of funds within the equipment and procurement systems of the PLA, it is not surprising that the overall defense growth rate has slowed down this year. However, this does not necessarily signal a shift in Beijing’s long-term military ambitions. Beijing may simply be prioritizing tighter oversight and more efficient use of defense funds in the short term until the corruption campaign has run its course. Thus, the slowdown is likely short-lived, and with spending expected to return to previous growth rates in the years ahead.

By Sheng-wen Cheng, Research Intern, Center for China Analysis, Lyle Morris, Senior Fellow on Foreign Policy and National Security, Center for China Analysis

Learn More: Read “What to Watch at China’s Two Sessions in 2026” by CCA Fellow on Chinese Politics, Neil Thomas, and CCA Senior Research Associate on Chinese Politics, Lobsang Tsering.

3. China Signals a New Phase of “Resilience-First” Tech Investment

What Happened: Xi Jinping’s remarks during the Two Sessions suggest that Beijing is putting more weight on economic resilience, technological self-reliance, and China’s ability to withstand external pressure. In his comments to the delegation from Jiangsu province, Xi said that major economic provinces must “maintain a solid development foundation” and improve their capacity to absorb outside shocks in order to help stabilize the national economy. He also stressed that building a modern industrial system and reinforcing the real economy will remain top priorities as China prepares its next Five-Year Plan.

Why It Matters: A key backdrop is fiscal policy. Since 2013, central government spending on science and technology has nearly doubled. It rose significantly in the mid-to-late 2010s, flattened during the COVID-19 outbreak, and has now entered a new phase of acceleration. Since 2024, planned central budget spending on science and technology has increased by 10% each year, a notable trend given tighter overall fiscal conditions. The signal is clear: the leadership is treating science and technology spending as a strategic priority tied to resilience, industrial strength, and security. The 2026 budget makes this even clearer by giving stronger support to basic research, with central government basic research spending set to increase by 16.3%.

By Shengyu Wang, Research Assistant, Center for China Analysis

Learn More: Read “2026: The Year of Rebalancing” by Lizzi C. Lee, CCA Fellow on Chinese Economy, and Jing Qian, CCA Co-Founder and Managing Director.

4. China Elevates Biomedicine to Emerging Pillar Industry in 2026 GWR

What Happened: In the 2026 Government Work Report (GWR), Premier Li Qiang identified biomedicine as an “emerging pillar industry” (新兴支柱产业), elevating its standing within China’s technology value chain. The GWR also identified expanding foreign-owned hospital access and inbound biotechnology investment as two priorities for opening China’s services sector in 2026.

Why It Matters: The upgrade from “emerging industry” to “emerging pillar industry” — placing biomedicine alongside established priorities like integrated circuits, aerospace, and the low-altitude economy — signals Beijing’s sustained push to develop global competitiveness in medical research and manufacturing, following a landmark year for Chinese biomedical innovation. The designation had been previewed by President Xi Jinping at the 2025 Central Economic Work Conference, remarks only made public in recent weeks. The GWR’s explicit focus on foreign biotechnology and hospital investment also aligns with record levels of Chinese–Western dealmaking and pilot programs that debuted in the sector last year, suggesting continued policy support and a gradual widening of market access for foreign firms.

By: Patrick Beyrer, Research Associate, Center for China Analysis

Learn More: CCA Co-Founder and Managing Director Jing Qian and Fellow on Chinese Economy Lizzi C. Lee argue that sustaining China’s biotechnology boom will require overseas cooperation in their recent Nature article, “China’s Biotech Boom: Why the Nation Must Collaborate to Stay Ahead.”

5. 15th Five-Year Plan Tests Climate Ambition

What Happened: On March 5, China’s National People’s Congress unveiled the draft of the 15th Five-Year Plan (2026–2030) (15th FYP), which serves as the overarching blueprint for economic and social development through the end of the decade. On climate, the 15th FYP sets a target to reduce carbon intensity by 17% by 2030 and to double non-fossil energy within the next decade and continue clean energy buildout. It also elevates the importance of climate adaptation, calling for stronger risk assessments and greater capacity to respond to extreme weather.

Why It Matters: The plan calls for a 17% reduction in carbon intensity by 2030, leaving China short of its Paris Agreement pledge to cut carbon intensity by more than 65% from 2005 levels by the end of the decade. Pandemic-era disruptions, slower economic growth, and continued reliance on heavy industry have complicated progress toward this goal. Projections indicate that China would need to reduce carbon intensity by 23% over the next five years to close the gap. However, it appears Beijing is transitioning away from relying on targets in favor of utilizing its clean technology industries to reduce emissions.

By Taylah Bland, Fellow on Climate and the Environment, Center for China Analysis (@Taylahbland)

For More: Read “The Evolving Politics of Climate Change in China” a new report by CCA Fellow Neil Thomas and Senior Fellow Guoguang Wu.

The Stakes: A Chance to Lead on Climate

In 2026, China’s clean technology companies will double down on overseas markets, driven by intensifying domestic price wars and the imperative to ensure future profitability. Exports will expand, as will overseas investments in new manufacturing capacity — especially as international trade restrictions intensify and localization becomes more attractive. As firms engage abroad, they will face regulatory and political challenges from host countries, which must balance their own domestic industrial policies, energy security, and cost-competitive decarbonization. Geopolitical alignment will further complicate decision-making. As the Donald Trump administration aggressively promotes fossil fuel exports and discourages economic dependence on China, governments will face intensifying pressures from both Beijing and Washington.

China now dominates the “new three” technologies of solar, electric vehicles (EVs), and batteries, as well as wind, making its role critical to the global energy transition. Ample and affordable access to these technologies could represent a triple win: accelerating the fight against climate change, improving energy access, and ensuring energy security. In August 2025, China’s National Energy Administration claimed that China’s solar and wind exports reduced global carbon emissions by about 4.1 billion tonnes during the 14th Five-Year Plan, while independent analysts found that China’s 2024 clean energy exports alone cut global emissions outside China by 1%.

It remains to be seen whether Beijing and its cleantech sectors can secure political endorsement from host countries, maintain cost advantages, and scale rapidly. These questions carry major implications not only for China’s geostrategic positioning and the commercial success of its clean technology firms, but also for the speed and scope of global emissions reductions and the world’s energy transition. Moreover, obstacles and opportunities may diverge across solar, EVs, wind, and batteries, which will test China’s ability to further adapt its global cleantech strategy across sectors.

Core Dilemma: Balancing Global Expansion and Strategic Control

China’s cleantech companies — largely private enterprises — face an important challenge: They must expand internationally to sustain growth, yet Beijing risks undermining strategic advantages in their doing so. Domestic overcapacity, intense price wars, and squeezed margins are forcing firms to seek markets abroad, especially higher-profit ones, yet this global push exposes them to growing political, regulatory, and security pressures.

A flood of low-cost Chinese exports has already triggered trade barriers across most developed markets, with some emerging economies, such as Brazil, Turkey, and Mexico, starting to follow suit. Chinese companies are increasingly investing in overseas manufacturing bases, in part to bypass these trade restrictions. Some countries have also adopted policies designed to attract investment on their own terms. Host governments — especially in Western-aligned developed countries—will increasingly demand more in return, including technology transfer, local job creation, adherence to environmental and labor standards, and greater assurances around data security.

Beijing faces a consequential trade-off: China’s unfettered expansion without meaningful benefit sharing and alleviation of local concerns risks intensifying backlash that harms Chinese firms’ commercial prospects, erodes China’s green soft power, and slows global climate progress. Yielding too much by indiscriminately sharing technology or critical inputs, however, could dampen China’s long-term dominance in solar, batteries, and EVs — industries that have become critical to China’s economic health. Balancing these pressures — commercial growth, strategic control, and geopolitical positioning — will affect not only the future of China’s clean energy industries, but also global supply chains, geopolitical alignments, and the pace of climate progress.

Outlook for 2026

In 2026, China’s clean energy companies are likely to adopt a dual-track strategy: ramping up exports to countries where trade barriers are low — mostly developing economies — while investing in local manufacturing and upstream supply chains where incentives encourage it or restrictions require it. As policy frameworks evolve, firms may pursue innovative structures, such as regional hubs, joint ventures, and licensing deals.

In the Global South, Chinese companies will channel greater exports to lower-income economies that maintain positive ties with China or to areas where Beijing promotes them for geostrategic reasons, such as the Middle East. Where trade restrictions arise, firms will increasingly pivot toward local manufacturing investments — especially in emerging markets where host governments offer incentives, such as through adjustments to Indonesia’s domestic content requirements and Brazil’s tax waivers for companies that establish production bases. Local public sentiment toward firms’ value creation and environmental performance, as well as formal government policy will shape how Chinese companies adapt their practices to secure market access.

As tariffs and trade barriers in the United States, the European Union (EU), and other aligned markets grow stiffer, the Global South will become even more important to China’s geostrategic and commercial interests. Nevertheless, higher profit margins in the United States and the EU especially will motivate Beijing to keep pushing for market access in these regions without compromising China’s technological dominance.

In the United States, regulatory difficulties and the Trump administration’s antipathy toward clean energy may make Chinese companies hesitant to invest without consistent political endorsement from Washington. By contrast, Europe may remain a more predictable destination as policy support for clean energy persists, though challenges will still dominate, especially if the EU’s desire for industrial sovereignty clashes with China’s willingness to provide clear and consistent access to material and technological inputs. However, there may be a constructive path forward if the EU imposes consistent and achievable requirements with respect to technology transfer, job creation, and ownership stakes for investments, and China agrees to meet them.

Meanwhile, Beijing will amplify climate leadership rhetoric touting the benefits of China’s dominance in clean energy industries as a global public good, especially as China’s existing domestic emissions targets face headwinds and its updated Paris Agreement targets underwhelm. This rhetorical push will be more symbolic than substantive by capturing what China is already doing. Senior leadership may be unlikely to promote a more collaborative vision of global green tech leadership unless the political and economic benefits for China are clear.

Finally, the Trump administration’s coercive measures to prevent other countries from deepening economic dependence on China, especially in strategic sectors, may force nations to thread the needle between Washington’s fossil fuel push and engagement with China. Some countries may leverage Chinese cleantech partnerships to “de-risk” from needing to ramp up their U.S. fossil fuel imports — a situation that could shape the direction of global energy politics.

Conditions and Contingencies

This forecast assumes that China can sustain its multipronged strategy — prioritizing the Global South, selectively targeting higher-end markets, and leveraging rhetoric to project climate leadership — provided several enabling conditions hold:

• Global deployment accelerates. Clean energy adoption expands globally, supported by investments in clean power projects by China and other actors. However, unless China provides additional investment incentives in developing countries or facilitates meaningful debt relief, deployment could remain limited to high- and middle-income economies or to a localized, distributed scale.

• Chinese firms maintain cost competitiveness. China’s domestic industry consolidation does not erode price advantages, and Global South energy choices remain primarily driven by cost competitiveness rather than geopolitical considerations. Their demand for clean energy continues to grow.

• Beijing remains committed to overseas expansion. China’s leadership continues to support international expansion of China’s cleantech companies and leveraging them for diplomatic gains.

• U.S. policy remains unpredictable and coercive. U.S. policy stays focused on securing long-term deals for the export of American fossil fuels, coupled with fierce pushback against clean energy in multilateral and bilateral spaces.

• No major technological breakthroughs. Other countries do not achieve major technological advances that threaten China’s market dominance in solar, batteries, and EVs.

What to Watch

Several indicators in 2026 will signal whether the forecast is on track:

• High-level political statements from Beijing emphasizing how Chinese clean energy benefits other countries’ development, or issuing guidance for cooperative engagements, would signal Beijing’s drive to secure host country endorsement.

• A de-escalation of China’s export controls on key material inputs would also signal a more pragmatic posture from Beijing.

• Greater emphasis by Chinese cleantech entrepreneurs on climate and development benefits — specifically in the context of international investments and market access—would suggest adaptation to foreign sensitivities.

• China may also attempt to set norms in multilateral platforms where it has influence, such as leveraging BRICS and the Shanghai Cooperation Organization to advance standards for clean energy projects.

Tracking these signals will clarify whether China prioritizes pragmatic growth and green soft power or doubles down on strategic control.

Alternative Scenarios

• Baseline (most likely): China expands its cleantech presence across the Global South, especially in markets with minimal barriers, while negotiating with developed economies to secure terms for investments that it deems favorable. Beijing emphasizes protecting its technological advantages over benefit sharing, resulting in persistence of the status quo.

• Alternative 1: An alternative scenario would see China recognizing the soft power benefits of the global expansion of its cleantech companies. Officials would outline clear pathways for companies to create value locally across developed and developing economies alike — such as through technology transfer, worker trainings, and joint ventures — as part of an active, collaborative vision for how Chinese investments will enhance other countries’ economic and social development.

• Alternative 2 (least likely): A third scenario, though unlikely, is technically feasible. In this case, barriers to global cleantech trade become so pervasive and counter to countries’ economic interests that mass pushback shifts policy toward a more cooperative approach — one that prioritizes free trade in green goods and greater international cooperation. Countries would recognize the public benefits of China’s low-cost clean energy and open their markets to these imports to accelerate their deployment and reduce emissions. China would correspondingly limit its coercive practices toward material and technological inputs where it dominates the market, and would take substantive steps to address unfair subsidies and domestic overcapacity.

Strategic Implications

Domestically, Chinese cleantech companies will face increased pressure from the central government to abide by its vision for protecting China’s interests as those companies engage abroad, including where and how they should share their technology with international players. Intense competition within China will also lead to further domestic consolidation of the sector. Companies that align with the government’s vision while catering to the demands of overseas markets — for example, by devising innovative ownership structures to accord with host country requirements — will come out in the lead.

The outcomes for U.S.-China relations may depend on whether U.S. policymakers recognize that, with strategic safeguards and risk mitigation, Chinese participation in clean energy supply chains can enhance American interests, as well as whether the Trump administration backs off from its hostility toward clean energy. Chinese firms’ urgency to access the U.S. market and willingness to transfer technology will also play a role. Chinese investments gaining a clearer pathway for U.S. market access could benefit the U.S. domestic clean energy transition, which may otherwise continue to suffer under the Trump administration’s aggressive anti–clean energy policies and lack of access to China’s technologies. It would also enhance the bilateral relationship by providing a win-win and greater incentive for sustaining constructive economic ties. Should the two countries fail to reach a compromise, however, China may double down even more intensively on its Global South orientation, thus accelerating the bifurcation of the global green economy.

In other economies and especially the Global South, the degree of China’s cooperation and host countries’ assertion of their agency will shape the extent to which China can continue promoting its vision of global multipolarity. It will also pose major implications for the speed and scale of the global energy transition and climate progress. Should deployment of China’s cleantech enable regions to decouple from dependence on imported hydrocarbons, for instance, it will further curb U.S. influence and the Trump administration’s economic leverage.

Policy Shaping and Conclusion

China’s clean energy expansion is entering a decisive phase in which commercial necessity and strategic calculation increasingly collide. Whether China’s clean energy dominance can supercharge its green soft power will hinge largely on Beijing’s willingness and ability to cater to host country interests. To enhance China’s credibility as a genuine climate leader, the central government will need to balance political, security, and economic considerations while shaping a more constructive pathway for its clean technology companies to contribute to other countries’ development.

Several other sets of actors may influence Beijing’s calculus as well. China’s clean energy companies could prompt the government to adopt a more open stance toward local value creation, including through technology transfer and joint ventures. Host country governments — especially in the Global South, where China seeks to deepen its influence — could establish clear investment criteria to ensure that Chinese participation supports local economic and social priorities. Likewise, multilateral actors and civil society can advance frameworks and campaigns that encourage Chinese investments to uphold high social and environmental standards.

As domestic competition compels firms to expand abroad, Beijing’s ability to balance openness with strategic control will shape the broader trajectory of global decarbonization. How China manages these tensions — between profit and partnership, dominance and credibility — will determine whether its clean energy leadership reinforces or undermines its green soft power.

By Li Shuo

The Stakes: Prospects for Global Decarbonization

As the world’s largest carbon emitter and a clean technology industrial powerhouse, China’s climate ambition in 2026 will critically influence both global emissions and the viability of the Paris Agreement’s targets to limit global warming to well below 2°C. The year 2026 marks an inflection point shaping Beijing’s choices. On one hand, China’s emissions plateauing several years ahead of its 2030 target, coupled with unprecedented clean energy development, creates fertile ground for China’s greater climate ambition. On the other hand, persistent economic headwinds and an altered geopolitical landscape could restrain China at the very moment it is preparing its 15th Five-Year Plan.

Against the backdrop of a rapid U.S. retreat under the Donald Trump administration — marked by withdrawing from the Paris Agreement, dismantling clean energy incentives, undermining the legal foundation for regulating carbon emissions, and defunding key federal agencies — the central question is whether China will assume greater climate leadership or maintain a more cautious stance shaped by domestic and international constraints.

China’s climate calculus has always been inherently complex, shaped by a mix of competing interests, historical narratives, and geopolitical considerations. China has rapidly emerged as a global leader in renewable-energy technology and deployment: The country now produces more than 80% of the world’s solar panels, 75% of electric vehicle batteries, and 60% of wind turbines, installing more solar capacity than the rest of the world combined. Environmental protection and climate action are now clear political priorities for Beijing, tied to broader goals of ecological civilization and sustainable development.

Yet even as China’s industrial capacity surges, its climate diplomacy remains cautious, hesitant to lead from the forefront at global climate forums. Constrained by economic headwinds and geopolitical tensions, the country continues to rely heavily on coal, expanding its fleet of coal-fired power plants and putting its carbon-intensity pledges in jeopardy. How Beijing balances these competing pressures in 2026 will shape not only China’s development path but also the prospects for global decarbonization.

Core Dilemma: Balancing Caution with Growing Power

China’s reluctance to assume overt climate leadership reflects a convergence of domestic economic concerns, long-standing diplomatic traditions, and deep skepticism about the reliability of Western partners. Domestically, economic uncertainties continue to fuel anxiety among heavy industries and the regions that depend on them, tempering Beijing’s appetite for aggressive climate policies that could threaten economic and political stability. Internationally, Beijing approaches climate leadership with considerable caution. Shaped by a strong sense of fairness, an emphasis on collective action, and a tradition of reserved climate diplomacy, Chinese officials have long argued that climate change is a problem created primarily by Western historical emissions, and therefore it requires leadership first and foremost from industrialized countries.

This outlook is reinforced by wavering commitments from key Western capitals — most dramatically Washington and, to a lesser extent, Brussels — that undermine Beijing’s willingness to act boldly. China also resents the cyclical nature of Western climate politics, especially the periodic “lectures” it receives when conditions favor climate ambition in the West. By contrast, Beijing argues that its steady, incremental approach, without claiming moral high ground, offers a more credible and sustainable path. The return of Donald Trump and his destructive climate policies, widely seen in Beijing as causing lasting damage to the future U.S. and global climate discourse, has only deepened Chinese elites’ doubts about the long-term viability of the collective climate action if the world’s most powerful country remains unwilling or unable to commit.

This paradox — China’s industrial dominance in clean technology versus its political caution — will be a defining and persistent feature of China’s trajectory. Rapid advances in China’s cleantech production have outstripped political decision-making, leaving Beijing struggling to reconcile its status as a cleantech superpower with its reluctance to assume rhetorical leadership.

Outlook for 2026

In 2026, China is likely to pursue a “talk less, do more” strategy on climate. China will deepen its role as the world’s leading industrial power of clean technologies, but it will be cautious in taking up the diplomatic mantle of climate leadership in the international arena. Rather than engage in symbolic contests for climate leadership, Beijing is expected to double down on industrial and commercial achievements — such as large-scale deployment of renewables, electric vehicles, and energy storage — that translate into steady and gradual emissions reductions and increased economic competitiveness.

Domestically, the Chinese government will maintain steady climate policies embedded in its forth-coming Five-Year Plan, emphasizing incremental progress while avoiding overly ambitious targets that could threaten economic growth or social stability. Supported by rapid renewable-energy deployment, China’s emissions are expected to peak in the mid-2020s — about five years earlier than initially committed. This will spark new debates in 2026 about the pace and ambition of China’s post-peak emissions reductions.

Internationally, Chinese companies will continue their aggressive expansion of clean energy exports, targeting emerging markets in Africa, Southeast Asia, Latin America, and the Middle East — regions with significant infrastructure needs and climate vulnerabilities. This outreach aligns with China’s broader diplomatic ambition, using clean energy projects as tools of soft power and economic integration.

Conditions and Contingencies

Realizing this forecast will depend on a convergence of enabling conditions across domestic policy, technological capacity, and geopolitical dynamics.

• Politically, China’s leadership will prioritize economic stability, energy security, and industrial competitiveness over symbolic climate gestures and rapid emissions reduction. The government’s cautious stance reflects its need to manage complex domestic challenges that aggressive climate measures might destabilize.

• Economically, China’s clean energy sector must continue innovating and profitably penetrating global markets.

• Geopolitically, tensions with the United States and its allies will remain, but be contained enough for China to pursue pragmatic climate action.

• Finally, a slowdown in Western climate ambition — manifested through continued and dramatic backslides in Washington, and subtler but still consequential distractions in Brussels — will make China’s incremental but steady approach more credible by comparison.

What to Watch

If the baseline scenario unfolds, 2026 will see Chinese leaders using climate policy tactically to project responsibility and reliability, contrasting their steadiness with perceived Western unpredictability.

• The government will embed moderate but achievable climate targets into its 15th Five-Year Plan, steering clear of headline-grabbing pledges. State support for domestic cleantech industries will intensify, with a strong focus on ensuring the long-term health of this strategic and hypercompetitive sector.

• Internationally, China will engage constructively in multilateral forums such as the United Nations’ climate COP process, and will foster bilateral cooperation, especially with Europe, while avoiding taking on unfair burdens or being seen as capitulating from these engagements.

• Domestically at the commercial level, competitive pressure on Chinese cleantech firms will persist, driving innovation, entrepreneurship, and cost reductions that benefit global decarbonization. However, the sector’s cutthroat competition will see inevitable bankruptcies and consolidation. This will also prompt government efforts to prevent destructive rivalry.

Overall, Beijing’s industrial interventions will remain pragmatic but dynamic: deepening corporate strengths, nurturing innovation, and expanding the global presence of “China, Inc.” quietly but effectively.

Alternative Scenarios

• Baseline (most likely): China continues a pragmatic “results over rhetoric” strategy. Industrial leadership deepens, emissions peak in the mid-2020s, and global cleantech exports accelerate — but Beijing avoids symbolic contests over climate leadership.

• Alternative 1: In a bold move, China sees the strategic value of climate action in contrasting itself with the United States, and decides to build on President Xi Jinping’s surprising 2020 carbon neutrality announcement by making further high-profile commitments — potentially in the direction of confirming the early emissions peak, doubling down on renewable energy support to climate-vulnerable countries, or specifying strong sectorial emissions targets. By doing so, Beijing will want to align with other high-ambition countries to reshape global climate governance in the context of prolonged U.S. absence, accelerating a shift in global climate power.

• Alternative 2 (least likely): Persistent, severe domestic economic crises or geopolitical upheaval force China to further delay its coal phasedown and reduce its climate commitments, thereby undermining global efforts and creating a leadership vacuum.

Strategic Implications

China’s climate posture in 2026 will have wide-reaching implications for global decarbonization. The most likely scenario will see China remain a cautious political actor on the world stage. Yet beneath its measured diplomatic approach lies a steadily growing economic power — one that even China’s traditionally slow-moving leadership increasingly recognizes. While this dynamic is unlikely to catalyze bold climate diplomacy in 2026 or meaningfully reshape U.S.-China relations given Washington’s disinterest, its effects will accumulate over time, propelled by the firm economic foundations that Chinese policymakers have carefully built over the past two decades.

Crucially, China’s pathway to climate leadership will not mirror Western models. Instead, it will blend commercial pragmatism with reserved diplomacy, reflecting its own political system, strategic priorities, and economic strengths. This divergence presents international counterparts with two interrelated challenges: how to engage productively with China’s model of climate leadership, and how to adapt their own strategies in a more multipolar climate landscape.

Policy Shaping and Conclusion

Addressing these challenges requires first recognizing that alternative leadership models exist — and that, in some respects, China’s steady, pragmatic approach may prove more effective over the long run than Western approaches. A key question is which model offers a stronger foundation for sustained global climate action: the predictable, if slow, “baseload” support provided by China, or the more volatile, boom-and-bust, and increasingly rhetorical political cycles that characterize U.S. climate engagement.

The second challenge is to tailor an engagement strategy that works with China’s unique mix of strengths and constraints. Entry points do exist, even in today’s difficult geopolitical environment — for example, facilitating multilateral trade and investment frameworks that establish transparent and fair rules for expanding Chinese clean-energy technologies into the Global South. This could deliver dual benefits, spurring economic growth in developing countries while accelerating global emissions reductions. Likewise, dialogue platforms between China and Western countries centered on technology transfer and investment cooperation may prove far more productive than politicized, high-profile summits.

At the same time, Western policymakers must confront an urgent and uncomfortable “China question” — the matter of whether, when, and how they might need to work with and even rely on China when it comes to deploying low-carbon technologies critical for reducing emissions. The stakes are high. With China’s dominance in the cleantech sector, recent reversals of industrial support in the United States, and rising protectionism in other key economies, the absence of a well-articulated and intellectually coherent answer to this question — or, alternatively, an answer that consists merely of a simplistic and politically charged “no,” without convincing alternatives — could become one of the biggest obstacles to cutting emissions in the West.

In the end, China’s climate trajectory in 2026 will likely be defined by a careful balance between industrial leadership and political caution. Recognizing this duality is essential for crafting realistic diplomatic and policy strategies that aim for constructive engagement. The coming year will be a test of whether China can reconcile its internal contradictions and emerge as a stronger driver of climate action in a world urgently searching for stable, credible leadership.