China: economy, government, governance

China’s 15th Five-Year Plan Recommendations – Key Takeaways for Foreign Businesses 2026-2030
The 15th Five-Year Plan recommendations outline China’s strategy for high-quality, innovation-driven growth, focusing on industrial upgrading, technological self-reliance, increased domestic demand, and expanded openness, among other policy priorities. For foreign businesses, they signal both new opportunities in advanced industries and heightened competition for the period from 2026 to 2030, as China’s domestic firms move up the value chain.
How China Wins the Future
Beijing’s Strategy to Seize the New Frontiers of Power
Elizabeth Economy
When the Chinese cargo ship Istanbul Bridge docked at the British port of Felixstowe on October 13, 2025, the arrival might have appeared unremarkable. The United Kingdom is China’s third-largest export market, and boats travel between the two countries all year.
What was remarkable about the Bridge was the route it had taken—it was the first major Chinese cargo ship to travel directly to Europe via the Arctic Ocean.* The trip took 20 days, weeks faster than the traditional routes through the Suez Canal or around the Cape of Good Hope. Beijing hailed the journey as a geostrategic breakthrough and a contribution to supply chain stability. Yet the more important message was unstated: the extent of China’s economic and security ambitions in a new realm of global power.
Beijing’s efforts in the Arctic are just the tip of the proverbial iceberg.
As early as the 1950s, Chinese leaders discussed competition in the world’s literal and figurative frontiers: the deep seas, the poles, outer space, and what the former People’s Liberation Army officer Xu Guangyu described as “power spheres and ideology,” concepts that today include cyberspace and the international financial system. These domains form the strategic foundations of global power. Control over them determines access to critical resources, the future of the Internet, the many benefits that derive from printing the world’s reserve currency, and the ability to defend against an array of security threats. As most analysts focus on the symptoms of competition—tariffs, semiconductor supply chain cutoffs, and short-term technological races—Beijing is building capabilities and influence in the underlying systems that will define the decades ahead. … Foreign Affairs January/February 2026
* Arctic Voyage of the Containership Istanbul Bridge
…the Istanbul Bridge operated along the Northeast Passage (NEP) and Northern Sea Route (NSR) from Ningho-Zhoushan China (departing 23 September) to Felixstowe, United Kingdon (arriving 13 October)

30 January – 2 February
Xi the Destroyer
The Latest Military Purge Signals China’s Leader Is Entering a New Era
Jonathan A. Czin and John Culver
(Foreign Affairs)  … As recently as 2022, after a flurry of purges of other senior leaders, Xi not only allowed Zhang to stay in office past the unofficial retirement age but also promoted him to the top position for a military officer. A relationship that long and deep is valuable in any setting, but especially in the vicious, low-trust world of Chinese politics.
Zhang’s dismissal is thus the ultimate illustration of just how little trust Xi has in the PLA. As we argued in Foreign Affairs last August, “Xi wants to ensure he can employ violence with confidence, but Xi’s confidence seems to be the rarest and most precious commodity for an otherwise well-resourced military.” But Zhang’s unceremonious dismissal also illustrates the depths of Xi’s ruthlessness in managing the PLA. It is one thing for a leader to show no mercy to his enemies; it is quite another for him to be so pitiless with his friends.
There is a lot of speculation about what Zhang did—or didn’t do—to provoke Xi’s ire as well as what the purge means for the Chinese leader’s grasp on power and his military objectives vis-à-vis Taiwan and the United States. While those elements of the saga may reveal themselves in time, what is clear now is Xi’s belief that power exists in its exercise. In making a public spectacle of pushing Zhang aside, Xi has laid bare a defining feature of his political style. No one is safe—not even those with deep personal connections to Xi. As PLA Daily, the military’s official periodical, stated the day after Zhang’s ouster, Xi’s campaign has “no off-limit zones.” Even by the standards of Xi’s unsparing rule, this is a seismic shift in Chinese politics.

The Unsettling Implications of Xi’s Military Purge
Why His Impatience With Chinese Commanders Should Worry U.S. Policymakers
By Christopher Johnson, President and CEO of China Strategies Group, a Senior Fellow at the Asia Society’s Center for China Analysis, and a former Senior China Analyst at the Central Intelligence Agency.
(Foreign Affairs) Chinese President Xi Jinping has ordered the total annihilation of his high command. On January 24, the Ministry of Defense announced that China’s top uniformed officer, General Zhang Youxia, and the military’s chief of staff, General Liu Zhenli, were being investigated for “serious violations of party discipline and law”—usually regime code for corruption. One Western press account even says that Zhang leaked nuclear secrets to the United States. The ministry’s terse announcement masked the biggest political earthquake to hit the top brass of the People’s Liberation Army (PLA) since the 1989 Tiananmen Square crackdown. It also marked the zenith of Xi’s latest officer purge, which has touched every corner of the PLA and claimed all but one top officer over the last few years.
Although the move came as a shock, its seeds were sown at a Chinese Communist Party (CCP) plenum last October. That meeting formalized the ousters of Zhang’s fellow vice chair of the Central Military Commission (CMC)—China’s supreme military decision-making body—and another CMC heavyweight then serving as the PLA’s top political minder. Those removals broke the seal on Xi’s targeting of the apex of the PLA. Moreover, they halved the CMC’s strength from its last overhaul, in 2022. The plenum left those seats vacant, forgoing the appointments that would usually come with such a reshuffle. That was puzzling then but makes sense now: it telegraphed that the work was not done and more was to come.
Much of the analysis of the current cycle of purges interprets them as an indicator of Xi’s loose grip on or distrust of his generals. Others claim it is a fight among rival factions behind the high walls of the PLA, with Xi as a passive observer. His evisceration of the entire CMC offers solid prima facie evidence that these frameworks lack explanatory power. But they also deny Xi his greatest asset—a knack for long-term, patient planning punctuated by political blitzkriegs.
…a fundamental reboot of outsiders’ thinking about Chinese party-army relations and internal PLA politics is urgently needed.
When this tremor inside the PLA subsides, Xi must consider picking up the pieces. He could demonstrate his ongoing pique by maintaining the current stasis in the high command until the 21st Party Congress next year or force a more thorough overhaul of the regime’s institutional framework for overseeing what it calls “the Party’s Army.” Xi’s calculus could be shaped by thoughts about telegraphing his succession at the next party congress, sometime thereafter, or even before. In fact, that may offer the sole way Xi may have seen Zhang Youxia as a threat. Whatever form the overhaul takes, it surely will underscore Xi’s unquestioned authority as he contemplates a fourth five-year term next year.
Ian Bremmer: What to know about China’s military purges
Xi Jinping has spent three years gutting his own military leadership. Five of the seven members of the Central Military Commission – China’s supreme military authority – have been purged since 2023, all of whom were handpicked by Xi himself back in 2022. But if anyone seemed safe from the carnage, it was Zhang Youxia. … And yet, on Jan. 24, Beijing announced that Zhang and another CMC member, Liu Zhenli, were under investigation for “suspected serious discipline and law violations.” In practical terms, that means detention and dismissal. Official PLA media accused them of causing “damage to combat capability construction,” a phrase suggesting problems that go well beyond ordinary corruption. Wild rumors have swirled about what really happened. Some online chatter ties Zhang to a foiled coup attempt against Xi; a Wall Street Journal report suggests he leaked nuclear secrets to the United States. Color me skeptical of both.
What’s more likely, and plenty alarming in its own right, is that this reflects Xi’s deepening paranoia and mistrust. Zhang had accumulated significant power simply by surviving the earlier purges, and his combat pedigree, reputation for competence, and princeling status made him a potential rival in Xi’s eyes.

29 January
At World’s Busiest Port, China’s Unbalanced Economy Comes Into View
The shipping traffic and factories never stop in China’s port city of Ningbo, but the local housing market has crashed and nearby restaurants sit empty.
(NYT) To understand how China’s economy is now experiencing both the best and the worst of times, consider the port city of Ningbo, a two-hour drive south of Shanghai.
Ningbo’s vast port handles 150,000 ships a year and is the world’s largest by cargo tonnage. A seemingly endless armada of tankers and bulk carriers arrives to discharge imported oil and grain, while other vessels pick up tens of thousands of containers daily.
Departing ships are packed with manufactured goods headed for global markets. Enormous car carriers, essentially floating parking lots with a dozen floors, transport China’s rapidly increasing car exports.
Teeming with factories that make everything from fabric and apparel to household appliances and electric vehicles, Ningbo offers a full display of China’s industrial prowess. Its port and manufacturing facilities are the engine that helped power China’s record trade surplus last year.
But a very different portrait of China’s economy can be seen several miles up the Yong River, where the Old Bund historic district stands at the site of Ningbo’s 19th-century port. There, housing prices have collapsed, as in many other parts of China. Construction has stalled, and the municipal government has cut spending. Declining home values have eaten into the net worth of the city’s middle class, leading to reduced consumer spending.

28 January
China’s property slump deepens—and threatens more than the housing sector
(Atlantic Council) China’s real estate slump is in its fifth year, with no end in sight. Key indicators—sales, prices, construction starts and completions—continue to slide, while an estimated eighty million unsold or vacant homes clog the market. Many of the country’s largest private developers have defaulted on debts, and one of the largest state-backed firms, China Vanke Co., has been struggling for months to stave off a similar fate. One Chinese economist estimates that as many as 80 percent of developers and construction firms could “exit the market” in the coming years as the industry permanently contracts.
China’s Economic Statecraft Is Working
Why Beijing Can Succeed Even With an Imperfect Strategy
Audrye Wong
(Foreign Affairs) …As countries around the world grow more wary of dealing with the United States, they are turning more and more to its main economic rival, China. That trade is one of several factors contributing to China’s rise in exports in 2025—which resulted in a trade surplus of nearly $1.2 trillion, a 20 percent increase.
Washington’s policies have, in fact, been a double boon for Beijing. Not only have China’s economic offerings become more attractive to partners looking for an alternative to working with the United States but U.S. pressure tactics have also made it more permissible for China to coerce others. Beijing’s increasing use of export controls and its flooding of foreign markets with cheap goods still generate unease in many of the countries with which it wants to do business. Yet its record of economic statecraft does not have to be perfect to succeed.

22 January
Is China’s Economic Policy Too Cautious?
Lee Jong-Wha
Recognizing that the old growth model has run its course, China’s leaders have embraced a measured economic strategy, focused on “high-quality development,” stability, and risk management. But they must not be so cautious that they fail to address the imbalances that may become hard constraints on the economy’s long-term prospects.
(Project Syndicate) By conventional measures, China’s performance exceeded expectations in 2025. Manufacturing output held firm and exports expanded, despite renewed trade tensions with the United States. China also avoided financial instability, even as the property downturn persisted for a fifth year. GDP growth is projected to have reached 5% for the year.
These indicators highlight the Chinese economy’s enduring resilience, which is underpinned by deep-rooted structural strengths. China accounts for roughly 30% of global manufacturing value-added, and its firms dominate supply chains in electric vehicles, batteries, solar panels, and a range of advanced industrial inputs. China’s adaptability also helps: When the US hiked tariffs and tightened export restrictions, Chinese exporters redirected shipments toward Europe, Southeast Asia, and the Global South, often overcoming complex logistical challenges.
But resilience is not the same as momentum, and China remains beset by acute imbalances that are constraining economic growth. While China’s trade surplus – which now exceeds $1 trillion – may look like something to boast about, it underscores the economy’s enduring dependence on external demand to offset weak domestic consumption.
Persistent deflationary pressures reinforce this imbalance. Producer prices have been falling for more than three years, owing to chronic excess capacity – a symptom of the demand shortfall at home. Deflation enhances the competitiveness of Chinese exports but erodes corporate profitability and increases debt burdens.