CCTV Reveals New Details of the “Nantianmen Project” — China’s Futuristic Space Combat Force

On May 31, CCTV.com revealed the latest progress of the “Nantianmen Project” (南天门计划) – a future-oriented aviation-themed science fiction program under development since 2017. The project is a Chinese aerospace science fiction universe combining novels, videos, concept art, air-show exhibits, and full-scale mockups of futuristic military systems. It is an imaginative framework that integrates hypersonic flight, air-space vehicles, dual-mode aerospace propulsion, directed-energy weapons, metamaterial stealth, and AI-assisted autonomous swarms and drones into a future military ecosystem. The project is part of China’s long-term plan to construct a global space-based strategic defense system consisting of large strategic aerospace carrier platforms and aerospace fighters.

CCTV-7’s National Defense and Military Channel (国防军事频道) introduced new conceptual designs of the project, which included the 100,000-ton-class aerospace carrier “Luan Niao” (鸾鸟); the unmanned aerospace fighter “Xuan Nü” (玄女); a full-band stealth fighter “Bai Di” (白帝); and a universal vertical takeoff and landing platform “Zi Huo” (紫火).

Screenshot of the “Luan Niao” aerospace carrier. Source: CCTV News

The project aligns with Shanghai’s “15th Five-Year Plan” strategic deployments regarding the digitalization of cultural tourism, commercial aerospace, artificial intelligence, and intelligent robots. The project recently opened an exhibit in the Lingang New Area aerospace industry cluster in Shanghai, creating China’s first immersive cultural tourism science fiction park based on aviation science fiction IP. Lingang New Area is at the forefront in positioning Shanghai as a globally influential science and technology innovation center.

The Nantianmen Project was created by AVIC Global Culture & Technology (Beijing) Co., Ltd., a subsidiary of the SOE conglomerate Aviation Industry Corporation of China (AVIC). AVIC envisioned using real-world technology to construct a science fiction world for the future aerospace era.

The three previously unveiled concept fighter jets differ from modern fighter jets already in existence in terms of aerodynamic layout, drive engine, flight mode, and payload.

The centerpiece of the universe is the “Luan Niao,” an enormous “aerospace carrier” capable of operating in near-space and launching multiple subordinate aircraft. It is often depicted as a strategic command platform. It is 100,000 tons, 242 meters long, has a wingspan of 684 meters, and is capable of carrying 88 “Xuan Nü” fighter jets.

The “Xuan Nü” fighter jet is conceptually designed as an unmanned air superiority fighter. It features meson circulation generators on both sides of the fuselage, and is capable of using particle acceleration cannons, hypersonic missiles, and other weapons. Combined with its forward-swept wing design, it has a visually striking effect and can operate outside the Earth’s atmosphere.

The “Bai Di” full-band stealth fighter jet employs full-band stealth and can switch between manned and unmanned flight modes. It uses a variable-wing structure to adjust its aerodynamic layout in real time according to altitude, speed, and flight attitude.

Finally, the “Zi Huo” is a universal vertical takeoff and landing platform featuring a sharply defined fuselage, a force field duct, and a tiltable power nacelle. A prototype was unveiled at the 7th China Tianjin International Helicopter Exposition in October 2025.

“Zi Huo” multi-purpose vertical takeoff and landing platform. Source: Global Times

CCA Analysis: None of these capabilities have been demonstrated in reality. For the PLA, the Nantianmen Project is therefore best interpreted as a window into China’s aspirational aerospace future rather than a catalog of actual PLA capabilities. Nonetheless, the project provides a venue for Chinese engineers, designers, and science-fiction enthusiasts to conceive of future aerospace warfare without committing to specific procurement programs, and many concepts could influence real research decades later. Chinese state media have explicitly framed the project as a way to popularize aerospace science and inspire young people to pursue careers in aviation and defense technology.

Many of the systems, like the “Luan Niao,” are almost Star Wars-esque in their rendering with a Chinese twist. The appearance of full-scale mockups at major air shows inevitably blurs the line between fiction and future capability. Some Chinese analysts believe this helps generate discussion about China’s long-term aerospace ambitions, even if the systems themselves are fictional.

For analysts of Chinese military modernization, the Nantianmen Project is useful because it offers insight into how components of China’s aerospace-industrial community envision warfare in the 2040–2060 timeframe. Many of the themes align with real-world PLA and Chinese aerospace research priorities, such as the integration of air and space operations and distributed swarm technology.

China Launches Naval and Coast Guard Drills Near Taiwan

In the past week, China has deployed both the China Coast Guard (CCG) and the PLA Navy to signal opposition to expanding Japan–Philippines security cooperation, particularly Tokyo and Manila’s decision to begin maritime boundary delimitation talks in waters that overlap with maritime areas near Taiwan that are claimed by Beijing.

Between June 1 and 7, China’s Ministry of Transport (MoT) announced a “Special Maritime Traffic Law Enforcement Action” and for the first time dispatched MoT vessels alongside CCG vessels to patrol east of Taiwan. The “law enforcement patrols” explicitly linked the operation to the Japan–Philippines maritime boundary initiative, which Beijing described as an “infringement” on China’s maritime rights.

Taiwan subsequently reported increased Chinese maritime activity in waters southeast of Taiwan, including near Orchid Island (Lanyu) and the strategically important Pratas (Dongsha) Islands. Chinese coast guard vessels repeatedly entered waters claimed by Taiwan around Pratas, leading to multiple confrontations with Taiwan’s Coast Guard Administration. One confrontation included a tense exchange between the Taiwanese and Chinese coast guard in which a Taiwan coast guard officer relayed the following message over the radio: “China Coast Guard, these are not your waters. You don’t belong here. Turn around and leave now!”

Screenshot of a China Coast Guard social media post tracking the movements of CCG vessel 2502 east of Taiwan. Source: China Coast Guard Via Weibo.

Around the same time, the PLA Navy maintained a higher operational tempo in the western Pacific. Japan reported that the aircraft carrier Liaoning and its escorts conducted extensive flight operations east of the Philippines, including roughly 170 aircraft and helicopter sorties, demonstrating China’s ability to operate beyond the First Island Chain.

CCA Analysis: The delimitation talks are problematic for Beijing because they implicitly treat waters east of Taiwan as an area that can be legally negotiated between Japan and the Philippines without Chinese participation. China has therefore used Coast Guard patrols east of Taiwan to reinforce its claim that Taiwan-related maritime zones fall under Chinese jurisdiction. The choice of the CCG rather than an overt PLA Navy operation is consistent with China’s broader “gray-zone” approach of asserting sovereignty and jurisdiction while remaining below the threshold of a major military confrontation.

The Chinese response appears calibrated to send three messages. First, to show Japan and the Philippines that Beijing rejects any maritime arrangements that could strengthen legal or operational cooperation in waters it claims. Second, to show Taiwan that China is increasingly using the Coast Guard to normalize its presence around Taiwan-controlled islands and challenge Taipei’s jurisdiction. This is the first time MoT and CCG vessels have conducted coordinated patrols east of Taiwan, and it represents a new form of MoT-CCG integration near Taiwan. Finally, it sends a message to the broader region that carrier operations east of the Philippines and coast guard patrols east of Taiwan demonstrate China’s ability to apply pressure simultaneously in the Taiwan Strait, the South China Sea, and the western Pacific.

From a PLA-watching perspective, the noteworthy trend is the growing integration of CCG “law enforcement’ operations with PLA military signaling, allowing Beijing to apply pressure below the threshold of major military exercises while steadily expanding its operational presence around Taiwan.

We’re glad to have you here for the inaugural issue of the China Energy Brief, a monthly newsletter from the China Climate Hub. Drawing on deep expertise and networks across Beijing and Washington, each issue offers forward-looking, evidence-based insights into the forces shaping China’s green tech and energy action—and what it means for the U.S. and beyond.

This month, we take you onto the floor of the world’s largest-ever Beijing Auto Show, where the future of the electric vehicle industry was on full display. Beyond the gleaming new models, we unpack two trends with far-reaching implications: the accelerating global push of China’s cleantech exports, and how those tailwinds are reshaping Beijing’s leverage in its dealings with the rest of the world.

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China Energy Brief: Issue 1

Written by Kate Logan, Director of the China Climate Hub

The Beijing Auto Show was held from April 24 to May 3, setting an official record as the world’s largest auto show by both scale and vehicle count. What was once a standard car exhibition has morphed into a showcase for the forefront of electric vehicle innovation. I visited this year’s show, which coincided with the lead-up to Trump’s recent summit with Xi in Beijing and took place as the global energy crisis from the Iran conflict entered its third month. Beyond the shiny new car models, two important trends reflect how China and its leading firms are approaching their global strategies.

First, China’s cleantech exports will grow even stronger, which will pivot cleantech companies’ hypercompetitive mindsets into the global domain.

The official tagline of the Beijing Auto Show was translated as “future of intelligence.” But a secondary, unofficial theme permeating countless booths was “made in China, for the world”—underscoring the shift from serving the domestic market to serving overseas consumers. This trend is driven by both domestic and international factors.

Within the Chinese market, demand for EVs and other cleantech is waning, especially as incentives are removed and prices and purchases adjust accordingly. Weakening demand started “pushing” Chinese cleantech exports toward global markets well before the current energy crisis. One analyst shared that they had to revise their earlier projections that EV exports would slow by mid-2025 after observing sustained strong flows, especially in markets with few trade barriers, such as Australia and the Philippines. Export growth has been further amplified in recent months by the “pull effect” from international consumers looking to take advantage of low-cost clean energy amid spiking fuel prices. In April, domestic auto sales fell for the seventh straight month and were down 21.6% year-on-year, while EV and plug-in hybrid exports surged to more than double the same month a year prior.

Amid the Auto Show’s 17 massive exhibition halls spanning two separate conference centers, nearly every major automaker showcased a new, competitively priced luxury electric or hybrid-electric SUV—a trend that surprised me given the international obsession with China’s uber-affordable electric sedans, such as the BYD Seal. The factors elevating SUVs to the forefront reflect shifting market dynamics. Some of these vehicles will be sold domestically in an attempt to recover declining revenues. But with many of these models appearing nearly identical, many brands emphasized their desire to court global consumers, especially in high-end markets, including the Middle East. In Europe, hybrid vehicles are not subject to the same tariffs as EVs, paving the way for these battery-electric hybrids to make greater inroads.

While the show was about cars, batteries were the real stars. Attendees clustered around the pavilions of CATL and BYD’s battery arm, both of which featured cold chambers to showcase their batteries’ consistent performance even in Arctic environments ranging from –30 to –50 degrees Celsius (approximately –22 to –59 degrees Fahrenheit). While BYD emphasized the speed of its flash chargers—“ready in 5, full in 9”—CATL’s centerpiece was battery swapping, with a working model demonstrating the speed and convenience of swapping. CATL has touted its use of large language models (LLMs) to revolutionize battery chemistry research, thus freeing up revenues to spend on other areas of its global strategy.

The technologically sleek, all-electric vehicles of Chinese firms stood in contrast to those of several legacy foreign automakers, such as BMW, Audi, and Mercedes-Benz, which positioned some of their most historic vehicles as the centerpieces of their pavilions—as if to remind consumers that they had invented the internal combustion engine that powered the original automobile revolution.

Second, the tailwinds behind China’s exports have empowered Beijing to wield its leverage in responding to various demands from other countries.

In the weeks before the Trump-Xi Summit, letters emerged from House Democrats and Republicans, respectively—followed by bipartisan House and Senate bills—urging President Trump to prevent Chinese EVs from entering the U.S. market. Legislators feared he might strike a deal with Xi, akin to Canadian Prime Minister Mark Carney’s offer, in which Canada would import a limited number of Chinese EVs in exchange for Chinese investments into Canada.

But few in Beijing were closely following each escalation of this American pushback. Instead, Chinese players are eyeing more compelling opportunities elsewhere. This dynamic is perhaps also underscored by the Chinese companies invited by Xi to the state banquet with Trump during the summit: the overall absence of China’s cleantech darlings, save for perhaps tech brand Xiaomi, reflects Beijing’s hesitation to push deals if Washington remains ambivalent about accepting them.

The lingering effects of China’s October 2025 export controls on rare earth elements and lithium-battery materials still loom large, with companies lacking confidence that bilateral relations are stable enough to guarantee that Beijing will renew its temporary suspension. Moreover, Chinese companies that had been pursuing deals involving international tech transfer in other markets are facing down bureaucratic uncertainty from their own government. As one example, Chinese battery maker Hithium’s proposed partnership with Indian renewable conglomerate Reliance has yet to move forward despite sustained efforts. The important role of China’s Ministry of Commerce (MOFCOM) as a closed-door arbiter introduces significant procedural uncertainty into potential deals; new State Council regulations on overseas investment will further compound this. Beyond bureaucratic factors, competition among leading cleantech firms with similar products is so intense that preserving leverage vis-à-vis rivals may further dampen companies’ willingness to share their technology.

Commercial interests are most attracted to those markets that have issued some sort of political signal that Chinese firms are welcome to invest. As one example, while cynicism abounds toward the EU’s proposed Industrial Accelerator Act—especially since Japanese and Korean firms would be exempt from the various strings attached to future Chinese investments—enthusiasm for the Spanish market remains strong in the wake of Spanish Prime Minister Pedro Sánchez’s trip to Beijing. Following the visit, SAIC Motor announced its decision to locate a new EV factory in Spain rather than Hungary, underscoring how political signals can tilt Chinese investment decisions even at the margins. Reports also indicate that wind manufacturer Ming Yang, fresh off a UK rejection on security grounds, is now eyeing the Spanish market.

These two trends will no doubt accelerate global electrification—but they will also pose tough questions for international markets, especially those struggling to preserve their local industries. As I wandered around the show, I could not help but wonder how long global consumers could resist the high quality and marked affordability of the products I was seeing. Will other markets continue doubling down on trade barriers, or will they reconsider them? And will Beijing be willing to engage with increasingly restrictive investment environments, or will it start abandoning them in lieu of those that welcome Chinese firms?

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1. At Shangri-La, China Saves Its Fire for Japan

What Happened: From May 29 to 31, world leaders and defense officials from about 45 countries gathered in Singapore for the Shangri-La Dialogue, Asia’s premier security summit. The forum has historically given Beijing a platform to articulate its regional security positions, but this year’s dialogue was shaped less by direct U.S.-China confrontation than by broader concerns over strategic mistrust, rising defense spending, military modernization, and lessons from Ukraine.

Why it Matters: For the second year in a row, Chinese Defense Minister Dong Jun skipped the forum, signaling Beijing’s reduced interest in a venue where it is often scrutinized over its regional behavior. While China’s delegation criticized “certain countries” for “hegemonism” and “bloc confrontation,” the overall U.S.-China exchange was tame. U.S. Defense Secretary Pete Hegseth said bilateral ties were “better than they’ve been in many years” and avoided direct mention of Taiwan in his prepared remarks. The sharper exchange came instead between Beijing and Tokyo: China accused Japan of reviving militarism and questioned whether it could “win the trust of the international community,” while Japan criticized China’s military expansion and warned against changing the status quo by force. The contrast suggests that, even as Beijing manages optics with Washington after the recent Trump-Xi summit, it remains willing to pressure U.S. allies — especially Japan — over regional security issues.

By Kristina Lozinskaya, Schwarzman Fellow and Junior Fellow on China-Russia Relations at the Center for China Analysis

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

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The latest on what’s happening in China from Asia Society Policy Institute’s Center for China Analysis.

THIS WEEK:

China targets Japan at Shangri-La, Beijing tightens overseas investment rules, Xi touts youth exchanges, policymakers advance urban renewal, and Xi spotlights future industries.

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Police officers stand on patrol during the 23rd IISS Shangri-La Dialogue at the Shangri-La Hotel on May 29, 2026 in Singapore. (Photo by Ezra Acayan/Getty Images)

1. At Shangri-La, China Saves Its Fire for Japan

What Happened: From May 29 to 31, world leaders and defense officials from about 45 countries gathered in Singapore for the Shangri-La Dialogue, Asia’s premier security summit. The forum has historically given Beijing a platform to articulate its regional security positions, but this year’s dialogue was shaped less by direct U.S.-China confrontation than by broader concerns over strategic mistrust, rising defense spending, military modernization, and lessons from Ukraine.

Why it Matters: For the second year in a row, Chinese Defense Minister Dong Jun skipped the forum, signaling Beijing’s reduced interest in a venue where it is often scrutinized over its regional behavior. While China’s delegation criticized “certain countries” for “hegemonism” and “bloc confrontation,” the overall U.S.-China exchange was tame. U.S. Defense Secretary Pete Hegseth said bilateral ties were “better than they’ve been in many years” and avoided direct mention of Taiwan in his prepared remarks. The sharper exchange came instead between Beijing and Tokyo: China accused Japan of reviving militarism and questioned whether it could “win the trust of the international community,” while Japan criticized China’s military expansion and warned against changing the status quo by force. The contrast suggests that, even as Beijing manages optics with Washington after the recent Trump-Xi summit, it remains willing to pressure U.S. allies — especially Japan — over regional security issues.

By Kristina Lozinskaya, Schwarzman Fellow and Junior Fellow on China-Russia Relations at the Center for China Analysis

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

2. China Expands Oversight of Overseas Investment

What Happened: Beijing issued sweeping new rules on June 1 that expand regulators’ authority over overseas investment involving Chinese investors, technology, data, and national security. The State Council regulation requires approval for overseas transfers of export-controlled goods, technologies, services, and related data, and bars indirect transfers through cross-border personnel deployment, consulting, and training arrangements. Building on the National Development and Reform Commission’s 2017 outbound investment rules, the new framework extends oversight to a broader range of overseas interests acquired directly or indirectly by firms, organizations, and individuals.

Why It Matters: The changes signal a shift from traditional outbound investment controls toward a more integrated national security regime. While earlier frameworks primarily targeted corporate outbound investments, the new rules also extend explicit regulatory reach to individual investors and non-traditional channels, especially with respect to sensitive technologies and data. This arrives as Beijing has already launched a crackdown on offshore trading platforms accused of helping retail investors bypass capital controls, while regulators have also moved against brokerages like Tiger and Futu over illegal cross-border securities operations.

By Shengyu Wang, Research Assistant, Center for China Analysis

Learn More: Watch “Are Export Controls Working? Field Notes from China’s AI Frontlines,” with Scott Kennedy, Trustee Chair in Chinese Business and Economics at the Center for Strategic & International Studies, and Paul Triolo, CCA Honorary Senior Fellow on Technology, moderated by CCA Fellow Lizzi C. Lee.

3. China Sets National Framework for Urban Renewal

What Happened: The 15th Five-Year Plan for Urban Renewal was released on May 28, turning a patchwork of local policy experiments into a national framework for long-term urban redevelopment. The plan reflects Beijing’s effort to move beyond the era of rapid outward city expansion and toward upgrading existing urban stock: improving older housing, pursuing adaptive reuse of old districts and factories, strengthening public services, and balancing development with cultural-heritage protection. It also explicitly warns against “large-scale demolition and construction” and “fake reconstruction,” marking a shift away from earlier redevelopment models that frequently relied on tearing down low-value areas for higher-density commercial projects. The key financing change is that eligible urban-renewal projects can now use local-government special-purpose bonds as project capital.

Why It Matters: Beijing is trying to redirect developers, construction demand, and local-government investment away from the land-financing model that contributed to China’s property crisis. The plan’s financing architecture also shows how difficult that shift will be. It combines special bonds, policy-bank lending, REITs, public-private partnerships, and utility-pricing reforms to make projects viable while avoiding new hidden local debt. If it works, urban renewal could become a more disciplined model for upgrading aging cities and infrastructure without fully reviving land-finance dependence. If returns on new projects disappoint, however, Beijing risks creating another channel for local debt.

By Jeremiah May, Research Assistant, Center for China Analysis

Learn More: Read “China’s Property Rebalancing: The Long Road to a New Development Model,” by CCA Fellow Lizzi C. Lee and David Zhang, Analyst at Trivium.

4. Xi Jinping on Developing China’s Future Industries

What Happened: In the June 1 issue of Qiushi, Xi Jinping published “Looking Ahead to the Future and Developing Industries,” an article based on his January 30 speech during the 24th collective study session of the 20th CPC Central Committee Political Bureau. The article calls for developing future industries through innovation and strategic planning, with a focus on sectors such as quantum technology and biomanufacturing. It also highlights the importance of enterprises, supportive policies, governance, and international cooperation in advancing China’s long-term development goals.

Why It Matters: Xi’s speech and Qiushi article signal China’s strategic priorities for achieving technological self-reliance and economic competitiveness in emerging industries. By emphasizing frontier sectors alongside stronger enterprise participation and policy support, Beijing is positioning future industries as key drivers of innovation, industrial upgrading, and long-term national development.

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

Learn More: Follow China’s DeepSeek Moment, CCA’s webinar series examining key moments in China’s technological rise and their implications for global competition.

5. Xi Highlights Early Success of U.S.-China Youth Exchange Initiative

What Happened: Xi Jinping responded to a letter from students participating in a U.S.-China youth exchange program, highlighting that since he launched the initiative in November 2023 to “invite 50,000 American youth to China for exchanges and study over five years,” they have exceeded this goal and achieved the target two and a half years early. Xi noted that these exchanges have deepened mutual understanding, fostered lasting friendships, and opened a new chapter in people-to-people ties between China and the United States.

Why It Matters: The “50,000 in Five Years” initiative was announced during Xi’s 2023 visit to California for his meeting with then-President Biden, marking his first trip to the United States since the pandemic. Supported largely through programs such as the Young Envoys Scholarship (YES) initiative, the effort was initially met with skepticism regarding both its feasibility and strategic intent. Its completion well ahead of schedule nevertheless demonstrates that when top leaders on both sides actively support engagement—and neither side erects significant political obstacles—certain areas of U.S.–China cooperation can transcend partisan divisions and outperform expectations. Going forward, it will be important to watch whether Beijing and Washington continue to prioritize youth exchanges as a means of sustaining long-term people-to-people ties and cultivating a new generation of bridge-builders across the Pacific.

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

Learn More: Read “Global Perceptions of China: Insights from the Next Generation,” featuring four winning essays from emerging young scholars around the world on how China is viewed from their corners of the globe.

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1. Xi Reportedly Planning North Korea Trip

What Happened: A possible visit by Xi Jinping to North Korea is being actively discussed by regional governments and media outlets. According to a May 20 Reuters report citing South Korea’s Yonhap News Agency, Xi could travel to Pyongyang in late May or early June. Reuters also reported that Chinese security and protocol teams had recently visited Pyongyang, often a sign of preparations for a high-level state visit. The Chinese government has not officially confirmed the trip, however.

Why it Matters: The proposed trip would be highly significant for China–DPRK relations. It would be Xi’s first visit to North Korea since 2019, following Xi’s recent summits in Beijing with Donald Trump and Vladimir Putin. The visit could also signal a shift in China’s approach toward “denuclearization” of the Korean Peninsula. China continues to publicly endorse “denuclearization” in principle, but recent statements suggest a growing emphasis toward “stability,” “dialogue,” and opposition to “deterrence and pressure.” Finally, the trip could help Beijing shore up its influence over Pyongyang. Beijing has arguably lost leverage since Vladimir Putin and Kim Jong Un signed a strategic partnership treaty in June 2024 that includes a mutual defense provision widely interpreted as a de facto mutual defense pact.

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

Learn More: Read the roundtable report from “The China–Russia–North Korea Nexus,” a closed-door discussion convened by the Sungkyun Institute of China Studies (SICS) and the Asia Society Policy Institute’s Center for China Analysis.

2. Beijing Tightens Expectations for Advisors Through Revised Responsibility Guidelines

What Happened: Wang Huning, a Politburo Standing Committee member and chairman of the Chinese People’s Political Consultative Conference (CPPCC), recently chaired a meeting calling on CPPCC members to strengthen research and consultation around key tasks set by the CCP Central Committee. Wang urged members of the Party’s political advisory body to offer policy recommendations that are forward-looking, targeted, and practical. The meeting also approved revised guidelines on “Strengthening the Responsibility and Commitment of CPPCC Members.”

Why It Matters: The specific revisions have not yet been disclosed. But when the guidelines were first introduced in 2020, their core message was that CPPCC members—who serve as part of the Party-state’s advisory and policy consultation apparatus—should “be neither magpies nor crows, but only woodpeckers.” In practice, this means they are expected neither to exaggerate positive news nor amplify pessimistic narratives, but instead to identify concrete problems and propose workable solutions. This principle has become an important guideline for Chinese scholars and policy experts, many of whom are CPPCC members, when engaging with overseas think tanks and foreign interlocutors.

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

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

3. China Expands Social Insurance Access for Migrant Workers

What Happened: On May 22, China’s State Council announced new measures to encourage migrant workers to enroll in social insurance programs where they work, regardless of their hukou—China’s household registration system. The move affects China’s 357 million migrant workers, including gig economy workers on ride-hailing and food delivery platforms. The reforms aim to simplify cross-regional insurance transfers, with officials framing the changes as a way to help narrow the rural-urban gap, accelerate urbanization, and boost consumption.

Why It Matters: The move is part of China’s broader effort to dismantle the hukou system. To boost domestic consumption, Beijing recognizes the need to equalize access to public services, including education and healthcare, that remain tied to residents’ place of household registration. The reform also addresses mounting pressure on China’s social insurance system, which faces rapid population aging, sluggish contribution growth, and uneven participation among migrant and informal workers under the existing pay-as-you-go framework. Extending access to these workers could expand the social insurance system’s contribution base and improve its long-term fiscal sustainability.

By Shengyu Wang, Research Assistant, Center for China Analysis

Learn More: Read “Who Will Till the Land? Conflicting Narratives About Rural China’s Demographic Future,” by Vivianne Zhang Wei, founder of Chinese Farm Chronicles, and CCA Fellow Lizzi C. Lee.

4. Li Qiang Highlights Energy and Food Security in Zhejiang Visit

What Happened: Chinese Premier Li Qiang visited several strategic storage and logistics facilities in Zhejiang province, including the Zhoushan National Petroleum Reserve Base, a bulk agricultural product storage and transportation base, and the Ningbo Daxie commercial petroleum reserve project. During the tour, Li emphasized the need to maintain adequate reserves of “bulk commodities and important materials” amid growing uncertainty in the external environment. He also called for expanding reserve capacity, accelerating storage infrastructure construction, improving technological and digital management systems, and strengthening coordination between strategic and commercial reserves.

Why It Matters: While China’s reserve expansion is not new, the political signaling behind Li’s visit is significant. Senior Chinese leaders do not choose inspection stops randomly, and the focus on petroleum and grain reserves underscores Beijing’s growing emphasis on economic security and resilience in a more unstable geopolitical environment. The call to better coordinate strategic and commercial reserves also suggests China is building a more comprehensive resilience system to withstand supply disruptions and political shocks. More broadly, the visit reflects how Beijing increasingly views energy and food security as core components of national security.

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

Learn More: Read “Why Food Security is a Top Priority for China” by former Research Associate Genevieve Donnellon-May.

5. Deadly Shanxi Mine Explosion Exposes Safety Failures

What Happened: On May 22, a gas explosion occurred at the Liushenyu mine in Qinyuan County, Changzhi, Shanxi. After initial uncertainty over the death toll, authorities now say 82 people are dead, two are missing, and more than 120 have been hospitalized. Xi Jinping and Li Qiang have framed the disaster, now under State Council investigation, as a warning for the country amid broader efforts to improve workplace safety.

Why It Matters: Reporting by Chinese state media has pointed to poor business practices and systematic rule evasion by the mining company, Shanxi Tongzhou Group. These include the company’s failure to maintain an accurate count of workers underground, as well as its outsourcing of labor to contractors under arrangements that weakened accountability and prioritized production over safety. Some reports also point to unregulated mining areas omitted from official maps, including the use of so-called “yin-yang drawings,” in which one set of drawings was submitted for regulatory filings while another guided actual mining operations. Following the incident, public commentary on Chinese social media has emphasized how catastrophic industrial accidents reflect long-term failures in enforcement and organizational cultures that normalize risk. There is also concern that local authorities initially minimized the death toll, reporting only eight deaths.

By Michael Cerny, Affiliated Researcher, Center for China Analysis

Learn More: Read “China’s New Climate Targets Decoded: Cautious Progress or Missed Opportunity?” by CCA Senior Program Officer Taylah Bland.

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Recent Southern Theater Command Exercises Highlight New Joint Training Thinking

A PLA Daily article, published on May 23, highlights ongoing efforts within the PLA to pursue joint, “real combat” training criteria over individual accolades. Of course, “jointness” is not a new push within the PLA, but the specifics of this report reveal new dimensions, and struggles, in honing a truly joint force.

The PLA Daily reporter follows several recent joint training exercises in the Southern Theater Command (STC), in particular involving the PLA Navy (PLAN) and Air Force (PLAAF). During one exercise, a pilot reportedly locks onto enemy aircraft, ready to fire, but the “real-time data-sharing and integrated battlefield awareness” (数据链实时共享战场态势一体感知) detects that friendly forces have not yet completed their attack deployment. The pilot assesses that launching an attack would “prematurely expose their own position, disrupt the entire combat plan, and even lead to the failure of the system-wide operation.” (提前暴露己方位置，打乱整个作战部署，甚至导致体系作战失利). The report says the pilot immediately abandons his attack and disengages to coordinate with friendly forces, concluding that “the system’s power created a formidable synergy, allowing them to quickly gain the upper hand on the complex and ever-changing battlefield” (体系威力形成强大合力，让他们很快在复杂多变的战场上占据主动).

The takeaway, according to the after-action report, is as follows:

“In the past, we always focused on individual air combat performance and the pass rate of individual subjects; but when we actually went to the joint training ground, we realized that no matter how excellent an individual is, it is difficult to form a cohesive force without the system; no matter how outstanding the performance is, it is difficult to achieve effective training without coordination.” (过去, 我们总盯着单机空战成绩, 单课目优秀率; 可真到联合训练场上才明白: 个体再优秀, 脱离体系也难成合力; 成绩再突出, 没有协同也难有练兵实效).

The unit’s leader explained that every officer and soldier should have this sense of the “big picture” in mind when training within joint simulated environments.

The article went on to describe the ongoing challenge for troops and officers in changing their mindset from seeking individual accolades and scores to adopting “joint force” standards. The author repeatedly mentioned instances of pilots and officers sacrificing personal rewards for the betterment of the joint force. Or, as the article says, “pooling their collective wisdom around the principles of ‘unified command, unified discourse, and unified action’” (统一指挥, 统一话语, 统一行动集智攻关), and “breaking away from traditional evaluation models to adopt the system contribution rate as the main standard for measuring training effectiveness” (打破传统考评模式，将体系贡献率作为衡量训练质效的主要标准).

CCA Analysis: This is a useful reminder that the PLA has a long way to go to achieve a true joint force. The examples cited in the article about progressing step by step from joint training with the “same type of aircraft,” to “mixed training with different types of aircraft,” and then to “integrated ship-aircraft training” are illuminating. For the U.S. joint force, many of these scenarios would seem rudimentary (granted, the U.S. military has by no means “perfected” joint operations; it is always a work in progress). It is also illuminating to read what a massive mindset shift is required for the PLA to train under true joint requirements and environments. This is a historically army-based military which, as the article concedes, has relied on individual exercise scores that likely inflate their sense of accomplishment. For all the handwringing these days in Washington that the PLA is 10-feet tall and outpacing the United States in several net assessment metrics, it still struggles with adopting a joint force mindset and accurately assessing training in joint settings. To me, RAND’s 2015 report on “China’s Incomplete Military Transformation” still applies to the PLA in 2026.

“Comradeship Should Not Become a Loophole in Discipline”: PLA Discipline Organs Target Officers’ “Social Circles”

The PLA is in the midst of one of the largest purges of senior officers in recent history. This is no surprise to anyone who has followed recent developments involving Zhang Youxia and Liu Zhenli, for example.

But a recent PLA Daily article identifies a new campaign undertaken by Party Committees and Discipline Inspection departments within the PLA — cracking down on “personal social circles” among PLA officers, especially while off duty.

The article, titled “An Army Unit Strictly Regulates the ‘Social Circles’ of Its Leading Cadres,” follows a “leading cadre” who recently took leave and received several phone calls from former comrades and family members asking for favors. The article reads as both a cautionary tale and a training guide, warning PLA cadres of new regulations imposing restrictions on meeting with and doing favors for family and friends while on vacation.

The scenarios themselves are revealing: one involves a call from a former comrade-in-arms who invites the officer out to drink; another from a family member who requests the officer’s help getting his nephew a civilian position in a local PLA unit; and a third from a manager of a local construction company.

The first scenario paints the following picture: a retired army veteran reaches out, asking to get together. He says, “It’s been a long time since we’ve seen each other. You’re the only one still in the army. Let’s get together and catch up!” The officer responds, “Feelings are feelings, and discipline is discipline. Our camaraderie doesn’t need to be maintained by eating and drinking. Let’s play a game of badminton tomorrow morning, work up a sweat, and chat. Wouldn’t that be great?” The friend agrees and, after badminton, asks the officer, “Does your company need to purchase training equipment recently? I have resources and connections.”

Upon hearing this, the officer waves his hand and says, “Lao Liu, if you’re going to talk about this, then that’s enough for today. You know the regulations in the army. We’re comrades-in-arms, but there’s no room for personal relationships when it comes to rules. Don’t make me make a mistake.”

The second scenario involved a phone call with a relative, during which a military officer was asked to use his connections to help a nephew secure a civilian position in another military unit. The cousin urged him to “put in a good word” and ask recruiters to “‘take care’ of him.” The officer firmly refused, explaining that the recruitment process is now “entirely supervised by the discipline inspection department” and that every stage is “open and transparent.” When the cousin expressed disbelief that he lacked enough “influence” after years in the military, the officer responded that “this isn’t about saving face; it’s about the bottom line of discipline.” He emphasized that cadres are prohibited from using their authority to benefit relatives and concluded that if the nephew truly wanted the position, he should “prove himself based on his abilities.”

The last scenario starts when the officer receives a call from a local construction company manager inviting him to “relax” at a newly opened fishing park, insisting they “absolutely would not talk about work.” The officer recognizes the caller as a manager from a company that had recently lost a bid for a military repair project. Rejecting the overture, the officer bluntly explains that the company failed in its bid not because it lacked “connections in the military,” but because “your quote and proposal were indeed inferior to those of the winning bidder.” Recalling a corruption case in which a PLA official was gradually compromised through seemingly harmless leisure invitations, the officer stressed that PLA engineering projects are now “completely open and transparent,” with the Discipline Inspection Commission supervising “the entire process.” He added that “if the conditions are met, there’s no need to treat anyone to meals or entertainment,” before ending the call.

CCA Analysis: This article is super interesting for several reasons. First, the three scenarios reveal sources of corruption that have long plagued the PLA for decades: family members and business colleagues using “guanxi” networks within the PLA to enrich themselves. Zhang Youxia was reportedly accused of failing to control “close associates, family members and relatives” tied to graft networks, and Li Shangfu and Wei Fenghe were also accused of abusing their authority over procurement within the Central Military Commission (CMC) Equipment Development Department in exchange for financial gain and political favors. There has also been speculation that China’s nuclear silo lids not operating properly as a result of embezzlement.

More noteworthy is the fact that the CMC Discipline Inspection Commission (中央军委纪律检查委员会) has apparently launched new “anti-corruption education classes” throughout the PLA, including having Party Committee Secretaries and Deputy Secretaries to conduct “one-on-one reminder talks” with members of the unit leadership teams on “hunting” scenarios involving family members and business associates. To quote the article, “purify your ‘three circles’ (自觉净化 “三圈”) (i.e. circles of influence, social circles, and personal relationships), and that the use of power must be “based on evidence and interactions must leave a trace.” (用权需有据, 交往应有痕).

The article is almost comical in its admonition for officers not to speak with or attend social gatherings with family friends or close associates during leave. But it’s no laughing matter: this is one of the most common avenues for corruption to take place in the PLA. Good luck enforcing it.

Liaoning Departs for Another Exercise Near Japan

On May 19, the PLA dispatched the Liaoning — China’s first aircraft carrier — for a new round of naval exercises in the western Pacific that included live-fire drills, tactical flight operations, and support missions, according to the Ministry of National Defense website. The PLA Navy described the drills as “routine annual exercises” intended to improve combat readiness and operational capabilities.

A day later, Japan’s joint staff tweeted that its JASDF Southwestern Air Defense Force’s fighters scrambled to interdict suspected PLA intrusions into Japan’s airspace over the East China Sea.

The PLA Navy deployment follows a series of increasingly ambitious Chinese naval operations beyond the first island chain, including previous exercises east of the Miyako Strait and near Guam. Last year, Chinese and Japanese aircraft were involved in a tense encounter near Okinawa during a similar carrier deployment, with Japan accusing Chinese J-15 fighters of locking fire-control radar onto Japanese aircraft.

CCA Analysis: China is still seething over Japanese Prime Minister Sanae Takaichi’s public remarks that a Taiwan Strait crisis could justify Japanese military intervention, comments Beijing condemned as crossing a “red line.” China is sending the PLA to remind Tokyo of Beijing’s indignation. China has noticeably expanded unilateral military activity around Japanese territory, with Japan’s latest defense white paper warning that growing Chinese military operations in nearby waters and airspace pose a threat to Japan’s security. Sino-Japan relations have reached the lowest level in years, and these latest carrier drills are China’s attempt at normalizing sustained naval and air operations in the western Pacific near Japan.

1. Beijing Defines “Constructive Strategic Stability” After Trump-Xi Summit

What Happened: The most important new framing to emerge from the Trump-Xi summit was the idea of “a constructive China-U.S. relationship of strategic stability.” Beijing has elevated this as the summit’s defining outcome, with similar language echoed by the White House. Chinese officials and state media are presenting it as guidance for the next three years and beyond, even elevating it as a major Xi-era innovation in great-power relations. The concept moves beyond Cold War-style strategic stability rooted in rivalry and mutually assured destruction. Instead, Beijing’s official interpretation stresses expanding shared interests, avoiding zero-sum competition, preventing sharp swings in ties, and steering clear of conflict, confrontation, or war.

Why It Matters: Beijing’s motivation behind “constructive strategic stability” reflects both confidence and anxiety. On one hand, China wants this framework to reduce external volatility amid China’s domestic economic weaknesses, elevate Xi as the central architect of leader-level diplomacy, and position China as a historic power shaping a new paradigm with the United States. On the other hand, the push also reflects mounting pressure stemming from China’s economic slowdown, geopolitical headwinds, uncertainty surrounding the Iran crisis and resulting global turmoil, and fears that unmanaged competition with Washington could harden into confrontation, or worse. The appeal of this concept is that it allows China to seek guardrails while positioning itself as an equal to the United States, while preserving room for cooperation in critical areas such as public health and AI safety, even as strategic competitive fundamentals intensify.

By Lizzi C. Lee, Fellow on Chinese Economy, Center for China Analysis (@wstv_lizzi)

Learn More: Explore “The Avoidable War: An Alternative Future for U.S.-China Relations,” an ASPI initiative on alternative futures for U.S.-China relations, and read “U.S.-China 21: The Future of U.S.-China Relations Under Xi Jinping,” Kevin Rudd’s framework for managing strategic divergence and cooperation within a stable long-term relationship.

2. April Data Shows China’s Uneven Recovery

What Happened: April data revealed the fragility of China’s domestic recovery. Retail sales slowed to just 0.2 percent year-on-year, fixed-asset investment fell back into contraction, private investment weakened, and the property slump showed few signs of easing. Exports remained a key cushion, but their strength was increasingly concentrated in tech and high-end manufacturing—sectors that boost output and headline growth but do not generate enough broad-based employment or income support to revive household confidence.

Why It Matters: The Trump-Xi summit may have temporarily eased tensions, as reflected in MOFCOM’s readout on bilateral trade, but China’s deeper challenge lies at home. Households are borrowing less, spending cautiously, and deleveraging amid a weak labor market and prolonged property downturn. Private firms, especially smaller firms in traditional sectors, are being squeezed from both sides: weak domestic demand limits pricing power, while higher energy prices linked to the conflict in Iran are raising input and supply chain costs. China’s tech engine is buoying sentiment, but it is not pulling the wider economy or the labor market along with it.

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

Learn More: Read “China’s Property Rebalancing: The Long Road to a New Development Model,” by CCA Fellow Lizzi C. Lee and David Zhang, Analyst at Trivium.

3. Xi Hosts Putin Five Days after Trump in a Bid for Reassurance

What Happened: Five days after President Xi held a high-stakes summit with President Trump, Beijing welcomed President Putin with comparable grandeur. Commemorating the 30th anniversary of the “China-Russia strategic partnership of coordination,” Xi praised their strategic cooperation as reaching a “historic high,” while Putin hailed the two as a stabilizing force in the world. The leaders signed around 40 agreements focused on the economy, trade, education, science, and technology.

Why It Matters: Putin’s 25th visit to China, coming on the heels of Xi’s historic meeting with Trump, is meant to reassure Moscow of its continued importance to Beijing while projecting a united front amid lingering tensions with the United States after the Trump-Xi summit. In an indirect jab at Washington, the two leaders warned of the unprecedented damage caused by unilateralism and hegemony. They criticized the war in Iran as a violation of international law, called the United States “irresponsible” for allowing the New START nuclear treaty to expire, and condemned Trump’s proposed Golden Dome missile defense system as a threat to global stability. At the same time, the visit revealed limits in the bilateral relationship. The two sides failed to reach a breakthrough on the Power of Siberia 2 pipeline, which would have doubled Russia’s natural gas exports to China, underscoring Beijing’s reluctance to deepen long-term dependence on Russian gas despite mounting concerns over energy security. The Chinese foreign ministry also refuted reports that Xi had told Trump that Putin might regret his 2022 invasion of Ukraine, raising questions about the extent of China’s support for Russia in the war.

By Kristina Lozinskaya, Schwarzman Fellow and Junior Fellow on China-Russia Relations, Center for China Analysis

Learn More: Watch “China’s Role in and Perception of a Post-Ukraine Conflict Scenario,” with CCA Non-Resident Senior Fellow Ambassador Pierre Andrieu and CCA Senior Fellow Lyle Morris.

4. Record EV Exports Sustain China’s Cleantech Momentum

What Happened: Analysis of monthly data from China’s General Administration of Customs indicates that China’s cleantech exports in April 2026 remained close to record highs, despite changes to tax rebate policies that were expected to reduce solar and battery exports. Although solar and battery exports declined, they remained considerably above pre-Strait of Hormuz crisis levels. At the same time, a surge in electric vehicle (EV) exports drove monthly export volumes to a record USD 9.4 billion, more than offsetting the decline in solar and battery exports.

Why It Matters: Against the backdrop of ongoing geopolitical tensions and instability in global energy markets, the April data provides the clearest evidence yet that disruption to the Strait of Hormuz is accelerating demand for Chinese clean technology products. This is especially visible in the EV sector, where electrification offers an alternative to dependence on traditional internal combustion engines. Continued strength in overall cleantech exports also suggests that demand has remained resilient despite policy adjustments aimed at reducing solar and battery export volumes.

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 Calls for Accelerating China’s Independent Discourse and Knowledge System

What Happened: On May 17, Xi Jinping issued instructions on promoting the development of China’s philosophy and social sciences at a symposium. He called for deeper systematic and academic study and interpretation of the Chinese Communist Party’s innovative theories, while accelerating the construction of an independent Chinese knowledge system in philosophy and social sciences. Separately, more than 200 representatives from China’s social science community gathered in Beijing for a two-day symposium to study and implement Xi Jinping Thought on Culture.

Why It Matters: In order to promote its own discourse system and value standards, the CCP has historically sought to create new governing concepts, propositions, and theoretical frameworks, such as the concept of “One Country, Two Systems.” Since Xi came to power, Beijing has accelerated these efforts. In politics, Xi introduced the concept of “whole-process people’s democracy” while in economics, he promoted the idea of “new quality productive forces.” More recently, during his meeting with Trump, Xi proposed a “constructive relationship of strategic stability” between China and the United States, extending the same impulse to shape how China’s role is described in the international arena. Through these formulations, Beijing seeks not only to shape international narratives, but also define the terms on which China is understood.

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

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

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Over the past 14 months, the Trump administration has presided over a significant loosening of export controls on AI chips to China – including the relicensing of H20 and H200 chips, and the establishment of a revenue-sharing agreement between NVIDIA and the U.S. government.

At each step, proponents of relaxation have insisted these chips are “deprecated,” a generation or more behind the cutting edge, and maintained that denying them accomplishes nothing while China builds its own alternatives. It is better, they claim, to keep Chinese developers hooked on NVIDIA’s software ecosystem — such as CUDA and related libraries and optimization tools — than to force Chinese AI developers into using Huawei’s Ascend chips and prompt China to build its own technology stack.

A growing chorus of industry-aligned analysts and consultants has amplified this logic into a broader indictment of the United States’ broader project to control technology exports to China. The “small yard, high fence” doctrine, they argue, has expanded beyond its initial remit — provoking retaliatory Chinese restrictions on rare earths, damaging U.S. chipmakers’ revenue and R&D capacity, and accelerating the very Chinese self-sufficiency it was designed to prevent. The Asia Society’s Paul Triolo, for example, has advocated lifting controls altogether on memory chips, redefining “advanced” upward to exclude everything but the absolute frontier, and effectively returning to the pre-2022 status quo.

This diagnosis gets the problem exactly backward.

China’s “Acceleration” Is Not What It Appears

The most commonly held argument for loosening export controls is that they have backfired — either by accelerating China’s domestic chip industry by forcing investments in self-sufficiency that Beijing might otherwise have deferred; or by forcing Chinese companies to work begrudgingly with Huawei when they otherwise would not have.

This narrative overstates both the pace and the quality of Chinese substitution in the AI industry. China has pursued semiconductor self-sufficiency since 2014, spending hundreds of billions of dollars and squandering billions more in waste, fraud, and abuse. It is important to understand that U.S. export controls did not create the Chinese government’s interest in indigenization — they forced Chinese firms to adopt inferior alternatives during a critical window of the industry’s development, with material impact to China’s hardware and software industry. SMIC’s 5nm-class chip fabrication process is estimated to be 40 to 50 percent more expensive than TSMC’s equivalent, with yields reportedly around one-third of TSMC’s on the same node.

Chinese developers are already beginning to feel the effects of this widening compute moat. Successfully forcing Chinese AI companies to turn to inferior hardware or foreign rental during a period of explosive AI growth is not a failure of export controls; it is direct evidence of the strategic friction the controls were meant to impose. Directly selling H200 — or better — chips to China directly undercuts the intended frictions that previous controls imposed.

Moreover, China’s AI chip fabs face component shortages far beyond lithography equipment. They compete against NVIDIA and AMD for access to the very same TSMC fabrication and packaging lines that produce the chips Washington is trying to deny. As things stand, Chinese chipmakers are not capable of supplying enough high-bandwidth memory or advanced packaging to build large numbers of AI accelerators on pace with the United States. This means that selling completed NVIDIA modules to Chinese AI labs hands them chips they could never have fabricated themselves, assembled from materials they cannot yet produce at scale, on production lines where their own designs are queued behind American orders.

Providing Chinese AI labs with more compute only strengthens their capacity to train and run inference for globally competitive AI services, while also freeing up Huawei’s scarce compute for potential export along a “Digital Silk Road.” Selling scarce chips directly to Chinese developers strengthens their ability to compete against U.S. companies in global markets.

There Has Never Been a More Important Time to Restrict China’s Access to Compute

Critics of U.S. technology restrictions are correct to point out that, despite being made to rely on a smaller quantity of less-performant hardware, Chinese AI labs have succeeded in building globally competitive models with a fraction of the compute available to their American counterparts. DeepSeek’s R1 rivaled frontier American systems at a fraction of the training cost; and Chinese open-source models — led by Qwen and DeepSeek — now account for nearly thirty percent of global open-source AI usage.

But there is a world of difference between building a model and serving it to the planet. The latter is the crux of the diffusion race U.S. and Chinese AI labs today find themselves locked into. Even though H200 exports to China will primarily serve domestic AI workloads, the absolute increase in compute will allow Chinese AI companies to more readily serve their products to global publics — undercutting the Trump administration’s aspiration to export the American AI stack.

Chinese labs continue to face critical compute shortages. Zhipu AI, which released its open-weight GLM 4.7 model in December, was forced to cap new sign-ups for its coding product to 20 percent of prior daily registrations after demand overwhelmed its servers. DeepSeek logs a steady drumbeat of service degradation events — the telltale signs of an inference fleet straining under load.

Proponents of relaxing U.S. export controls have consistently described the Trump administration’s decision to resume licenses for H20 and H200 as harmless because they trail the cutting edge by a generation. This misunderstands what the chips are for. Chinese AI companies do not necessarily need Blackwell-class GPUs to serve inference at global scale; they need a prodigious volume of decent compute to keep their APIs responsive and their prices low as they expand into markets from the Gulf to Southeast Asia to Latin America. Chinese AI executives themselves identify computational power as the one bottleneck constraining their global competitiveness. The correct response to that admission is to tighten the pressure, not ease it.

A Higher Fence Prevents the Yard from Expanding Further

If there is a legitimate criticism of the current U.S. technology control framework, it is not that the yard is too large but that the fence is too short. The $2.5 billion Supermicro indictment exposed an uncomfortable truth long known to U.S. export control enforcement officers: The current U.S. compliance system, which runs on paper declarations, end-use certificates, and the good faith of intermediaries stretching across dozens of jurisdictions, can be defeated through a method as simple as relabeling shipments in a rented warehouse.

The Chip Security Act, which the House Foreign Affairs Committee advanced on a bipartisan basis this week, could address this problem. Location verification for exported chips does not expand the yard, but raises the fence for protected technologies. Such an approach is fundamentally pro-diffusion: if the United States can confirm that chips shipped to Abu Dhabi or Singapore have not, in fact, been rerouted to Shenzhen, the case for loosening license requirements for other global markets is made materially stronger.

America’s technology siege is working as intended. The task now is to maintain it – and reinforce it where the fence has gaps — long enough for American compute, software, and APIs to embed in global markets, before Chinese chipmakers become capable of contesting the global AI market on their own terms.

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China Sentences Two Former Ministers of Defense to Death with Reprieve

On May 7, Xinhua News reported that a PRC military court sentenced the last two disgraced PRC Ministers of Defense, Wei Fenghe (魏凤和) and Li Shangfu (李尚福), to death with a two-year reprieve for corruption. Below is a rough translation of the article:

“On May 7, 2026, the military court lawfully pronounced judgment on the bribery case of Wei Fenghe, former member of the Central Military Commission, former State Councilor and Minister of National Defense. Wei Fenghe was found guilty of bribery and sentenced to death with a two-year reprieve, deprivation of political rights for life, and confiscation of all personal property. After the two-year reprieve period expires, his sentence will be commuted to life imprisonment in accordance with the law, and he will be imprisoned for life without the possibility of commutation or parole. On May 7, 2026, the military court lawfully pronounced judgment on the bribery case of Li Shangfu, former member of the Central Military Commission, former State Councilor and Minister of National Defense. The court found Li Shangfu guilty of bribery and offering of bribes, and sentenced him to death with a two-year reprieve, deprivation of political rights for life, and confiscation of all personal property. After the two-year reprieve period expires, his sentence will be commuted to life imprisonment in accordance with the law, and he will be imprisoned for life without the possibility of commutation or parole.”

CCA Analysis: The swift sentencing of Wei and Li marks a dramatic downfall for the two former CMC members. China rarely sentences CMC members — let alone former ministers of defense — to death. They are the first known cases of Chinese ministers of defense receiving death sentences with reprieve.

In 2023, Air Force General Liu Yazhou (刘亚洲) was given a suspended death sentence for corruption. Liu was formerly the Political Commissar of the PLA National Defence University and Political Commissar of the Chengdu Military Region Air Force. The last corruption-related scandal of a former CMC member was for former CMC Chief of the General Staff Fang Fenghui (房峰辉), who was purged in 2017 and received a life sentence in 2019. Before Fang, the last PLA general sentenced to death was former lieutenant general Gu Junshan (谷俊山), who received a suspended death sentence in August 2015 for corruption-related crimes. Gu served as the deputy director of the PLA General Logistics Department (GLD) from December 2009 to February 2012.

One also recalls the recent cases of former CMC Vice Chairs Guo Boxiong (郭伯雄), who received life imprisonment in 2016 for corruption, and Xu Caihou (徐才厚), who died of cancer in 2015 before trial proceedings concluded on charges of corruption.

The last major upheaval of this proportion occurred in the wake of the Lin Biao (林彪) purge in the 1970s. General Huang Yongsheng (黄永胜) reportedly received a death sentence with reprieve during the “Lin Biao clique” purge by Mao, later commuted; and Lieutenant General Wu Faxian (吴法宪), also reportedly sentenced to death with reprieve after the Lin Biao affair, later commuted.

For Xi to hand out suspended death sentences, Wei and Li likely engaged in other serious crimes beyond corruption, like leaking secrets or harming national security.

China Discloses Fifth-Generation Fighter Export Variant

During a May 1 Labor Day special program aired on China Central Television (CCTV), footage showed a J-35 stealth fighter with the serial number “0001” and Aviation Industry Corporation of China (AVIC) markings emerging from a hangar. The aircraft appeared without PLA Air Force insignia and was presented in an unpainted light grey finish, suggesting it may be an export variant of the J-35, called “J-35AE.”

Chinese military commentator Fu Qianshao said that the configuration — specifically a single-wheel nose landing gear rather than the reinforced dual-wheel system typically associated with carrier operations — indicates a land-based variant rather than a naval carrier-based model. The serial number “0001,” together with AVIC branding on the fuselage, further suggests a distinct production line separate from PLA operational inventory. In fact, months ago, the AVIC had already displayed a scale model of the J-35A at the 2026 Singapore Airshow, signaling export positioning in advance of the CCTV appearance.

So far, Pakistan has been widely assessed as a likely customer. In earlier days, Pakistani officials publicly stated that China had offered to sell 40 J-35 aircraft alongside KJ-500 airborne early warning platforms and HQ-19 air defense systems. On May 7, 2026, a senior Pakistan Air Force official further confirmed that an initial collaborative mechanism for the J-35AE had been signed, though contract details were not disclosed.

CCA Analysis: The emergence of the J-35AE in public signals that China is moving forward with a fifth-generation fighter export market. If confirmed at scale, this would represent a notable shift in the global stealth fighter landscape, where the United States has cornered the operational export market for fifth-generation fighters (The Russian SU-57 is excluded as there is no verified information or public disclosure of buyers so far).

It should be noted that the picture of the J-35AE was embedded within a broader state enterprise showcase, rather than a formal export announcement. Thus, some ambiguity remains over whether the disclosure was primarily informational, promotional, or deliberate signaling. Even so, the parallel confirmation from Pakistani officials of an initial collaborative agreement, combined with design features consistent with export configuration, indicates an institutionalized pathway toward foreign acquisition, with Pakistan as the most likely recipient.

More broadly, the development reflects how China’s defense export model is increasingly evolving beyond platform delivery toward integrated support arrangements. The reported presence of AVIC technical personnel in Pakistan during the May 2025 India-Pakistan crisis suggests a model in which Chinese systems are accompanied by embedded operational and technical support under real conflict conditions. Arms sales to Pakistan, including the recent delivery of the Hangor-class attack submarine, provide China with opportunities to expand influence and test its operational and support capabilities on the battlefield.

At the same time, it remains uncertain whether such an export program can scale in a manner comparable to the U.S. F-35 ecosystem. The U.S. model is anchored in alliance structures, long-term interoperability frameworks, and security guarantees that China currently does not yet replicate. While China may be entering the stealth fighter export space, its ability to turn this into a durable global network remains unproven.

The PLA Showcases Counter-Drone Air Defense Capabilities

China continues to publicly showcase its counter–unmanned aerial system (C-UAS) capabilities. According to CCTV in early May, the PLA Navy recently completed a “finalization test” (定型试验) of a new terminal air defense and anti-missile weapon system in the Bohai Sea. The test involved multiple drone targets simulating ultra-low-altitude sea-skimming profiles and low-observable penetration tactics under complex electromagnetic conditions. The test was designed to stress the system’s interception performance in realistic threat environments. The term “finalization test” indicates that a late-stage verification process in which a system that has largely completed development is moving toward production and deployment.

Chinese state media also publicized directed-energy counter-UAS systems. A recent CCTV program presented simulated engagements involving the “Guangjian-11E” (光箭-11E) and “Guangjian-21A” (光箭-21A) laser systems. The Guangjian-11E was shown in a “soft-kill” (软杀伤) role, disrupting drone sensors and communication links through pulsed laser effects, while the Guangjian-21A was demonstrated in a hard-kill (硬杀伤) role, physically damaging airframes and internal electronic components. The demonstrations included engagements against low-altitude targets and fiber-linked drones.

CCA Analysis: The development reflects a broader shift in which counter-UAS capability is increasingly treated as a core requirement of modern force design rather than auxiliary air defense. Operational experience from Ukraine and the Middle East has demonstrated that small, low-cost drones can generate disproportionate battlefield effects through reconnaissance, targeting support, saturation attacks, and one-way strike missions against high-value platforms. This has prompted the PLA to adapt layered air defense systems utilizing counter-UAS, particularly in maritime and littoral environments.

The PLA’s emphasis on ultra-low-altitude sea-skimming (超低空掠海), concealed penetration (隐蔽突防), and complex electromagnetic environments (复杂电磁环境) reflects concern over drone employment concepts designed to exploit radar coverage gaps. These characteristics are particularly relevant in a Taiwan contingency environment, where U.S. and Taiwan defense discussions increasingly emphasize a drone-enabled “hellscape” concept in the Taiwan Strait, intended to increase operational cost and delay PLA maneuver and landing operations.

From a capability development perspective, the PLA systems being demonstrated suggest an emerging layered counter-UAS structure combining soft-kill and hard-kill directed-energy options, typified by the Guangjian platforms. China’s development of high-power microwave (HPM) systems, including the “Hurricane-3000” (飓风-3000) we previously covered, offer another example of the PLA’s interest in counter-swarm applications. Compared to lasers, HPM systems are generally better suited to area effects, with the potential to disrupt multiple drone systems simultaneously through electromagnetic interference.

However, compared to laser-based systems, publicly observable evidence of operational HPM field employment remains limited. This may indicate that while the capability is being developed and tested, it has not yet reached the same level of operational maturity in the PLA. U.S. development programs such as the Tactical High-power Operational Responder (THOR) and its follow-on Mjölnir similarly suggest that HPM systems face persistent constraints in power generation, thermal management, beam control, and system integration under operational conditions.

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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.