China 5: Top generals purged, Jensen Huang in China, Starmer meets with Xi, Beijing ramps up tax official hirings, China boosts extreme weather forecasting capabilities
THIS WEEK: Purges at the top, Jensen Huang visits China, Starmer in Beijing, government tax hiring spree, and China steps up extreme weather forecasting.
1. Xi Purges More Top Generals
What Happened: Zhang Youxia, Politburo member and First Vice Chairman of the Central Military Commission (CMC), and Liu Zhenli, chief of staff of the CMC Joint Staff Department, are under investigation for disciplinary and legal violations. A PLA Daily editorial accused them of undermining Xi’s “Chairman Responsibility System” and exacerbating political and corruption problems. The purge — among the most serious in recent PLA history — has effectively reduced the CMC from seven members to just two: Xi Jinping and Vice Chairman Zhang Shengmin.
Why It Matters: Zhang’s downfall is especially significant given his rare combination of revolutionary pedigree, combat experience, and Hu-era institutional authority, underscoring that no figure is untouchable under Xi. While the probes are unlikely to shift Beijing’s macroeconomic or foreign policy trajectory, they carry sharper military implications: near-term disruption may weaken PLA readiness toward Taiwan, but over time, a more disciplined and loyal officer corps could strengthen coercive capacity and deterrence. Xi is likely to use the run-up to the 21st Party Congress in 2027 to elevate a new generation of trusted, operationally capable commanders.
By Lobsang Tsering, Senior Research Associate on Chinese Society, Center for China Analysis
Learn More: “How Will the Next Generation of Chinese Leaders Reconcile Effective Governance and Party Loyalty?” by CCA Senior Fellow on Chinese Politics Guoguang Wu in China 2026: What to Watch.
2. Jensen Huang’s China Trip Underscores U.S. Big Tech’s Conundrum
What Happened: Nvidia CEO Jensen Huang recently visited China, with stops in Shanghai, Beijing, and Shenzhen. Publicly, the trip featured Lunar New Year events with staff, supplier meetings, and a visit to Nvidia’s new Zhangjiang district office in Shanghai. Behind the scenes, Chinese media report that the real focus was advancing compliance for H200 chip sales. While H200 has conditional U.S. approval, key questions remain over who can buy it, how it can be used, and which regulatory hurdles apply. Huang reportedly held closed-door meetings to clarify policy changes, gauge demand for the H200 chip, and assess prospects for Nvidia’s next generation of AI processors.
Why It Matters: Nvidia is operating in an increasingly narrow space in China, squeezed between U.S. export controls, Chinese security requirements, and fast-rising domestic rivals. By 2025, Chinese compute providers had captured 34.6% of the market, as Nvidia continued to lose share. Huang himself has warned that China’s AI edge lies less in cutting-edge chips than in cheaper compute driven by energy subsidies and industrial clustering, shifting competition from performance to cost. That puts Nvidia at a disadvantage. Once the ecosystem leader shaping Chinese developers around Nvidia’s own software platform and programming model, it now looks more like a constrained bidder, competing against local alternatives with downgraded products and lingering regulatory uncertainty. Growing supply-chain security concerns only accelerate the push toward homegrown solutions.
By Lizzi C. Lee, Fellow on Chinese Economy, Center for China Analysis (@wstv_lizzi)
Learn More: Watch the webinar “China’s Tech Front: Chip Startups Rivaling NVIDIA, Robotics Buzz, and Next-Gen AI Trends” moderated by Lizzi.
3. China-UK Signal Reset During Starmer’s Beijing Visit
What Happened: British Prime Minister Keir Starmer met with Chinese President Xi Jinping and Premier Li Qiang in Beijing, where the two sides agreed to reset relations and pull back from the yearslong tensions that previously defined bilateral ties. Starmer’s visit, the first by a UK prime minister in eight years, included meetings with senior Chinese leaders and a China–UK Entrepreneurs Committee session, alongside a UK delegation of more than 60 executives from major business and cultural institutions.
Why It Matters: The two sides emphasized expanding cooperation in trade, investment, finance, climate, and diplomacy at a time when both countries face an increasingly volatile United States. Notably, Beijing granted 30-day visa-free travel for British tourists, highlighting China’s emphasis on bolstering people-to-people ties, and agreed to halve tariffs on Scotch whisky. Starmer also addressed Taiwan and Hong Kong in restrained and non-confrontational terms, reaffirming long-standing UK positions without elaboration, suggesting deliberate efforts to prevent sensitive political issues from overshadowing economic cooperation.
By Jie Gao, Research Associate on Foreign Policy and National Security, Center for China Analysis
Learn More: Listen to Tough Choices: Europe and its Middle Power Partners on The State of Asia.
4. Beijing to Hire Largest Number of Tax Officials in Over a Decade
What Happened: China will recruit its largest cohort of tax officials this year — over 25,000 — as Beijing prepares to tighten tax enforcement amid slowing economic growth and a growing budget deficit. This is the fourth consecutive year of heightened recruitment, partially intended to replace a cohort of recently retired tax bureaucrats hired in the 1980s. Beijing has stepped up tax enforcement, pressuring local authorities to collect revenue, and targeting high-income earners who fail to declare overseas income and often hold offshore investments. In addition to replacing retirees, China’s expanded tax workforce is meant to better scrutinize individuals earning income in the fast-growing digital economy, especially in e-commerce and livestreaming.
Why It Matters: China’s local governments face a deepening budget deficit, and China’s tax revenue dropped by 3.4% in 2024, a decline of US$2.5 trillion. China faces a multitude of economic challenges, including slowing economic growth, a worsening housing market, anemic consumer spending, weakening investment, and deflationary pressures that have eroded profits and wages. To counter economic pressures, Beijing is increasingly turning towards tax revenue to shore up other previously dependable sources of fiscal income.
By Jamie Lui, Assistant Director for Research and Strategy, Center for China Analysis
Learn More: Read “China’s Next Move: Economic Priorities and Policy Shifts for 2026” by Lizzi Lee, Fellow on Chinese Economy, and Jing Qian, Co-Founder and Managing Director, Center for China Analysis.
5. China Scales Extreme Weather Forecasting Capabilities
What Happened: Speaking at a national conference on meteorological work on January 26, Chen Zhenlin, head of the China Meteorological Administration, reinforced China’s commitment to boosting extreme weather forecasting in 2026. Chen noted China’s continued experience with extreme weather events like floods and said China “will pilot a new imminent warning system, apply artificial intelligence to refine typhoon and heavy rainfall forecasts, and develop new prediction products for extreme weather.”
Why It Matters: Over the last year, China significantly improved its management of extreme weather events in part due to its scale up of forecasting abilities and its coordinated departmental approach to prevention and response. With extreme weather events and their associated social and economic costs expected to continue in 2026, China is taking the right approach in leveraging its scientific and technological capabilities to safeguard communities, industries, and infrastructure.
By Taylah Bland, Fellow on Climate and the Environment, Center for China Analysis (@Taylahbland)
Learn More: Read “China’s Extreme Weather AI Tools Can Help Countries Adapt” by CCA Fellow Taylah Bland.