Strategic Stability, Structural Strain | Sinification: May 2026
US-China | Global Order | East Asia | Europe | Middle East & Pakistan | Chinese Economy | Research and Education | Tech & AI
This monthly report is prepared for Sinocism by the excellent Sinification, an invaluable resource for understanding how domestic and international affairs are debated within the Chinese establishment. — Bill
The burst of “positive energy” among analysts following May’s Xi-Trump summit cooled somewhat towards the end of the month. On the significance of Trump’s Taiwan remarks, more caution is expressed given both the wider institutional context in Washington and the growing military and strategic role of US regional allies, especially Japan. AI formed the second major focus, after both sides agreed to launch an intergovernmental dialogue on AI governance. Huang Ping treats this as a narrow strategic window for China to engage different US interest groups and secure a place in global AI governance and high-value industrial ecosystems—or risk being shut out for the long run.
On changes in the global order, a journal article by CICIR vice-president Zhang Jian represents the more triumphalist strand, treating the closely timed US and Russian delegation visits to Beijing as signs that China is becoming a key “connecting point” in the emerging multipolar world. Da Wei offers a more restrained formulation, merging the ideas of “G2” and multipolarity into that of a “dual-core multipolar order”. As he frames it, this both acknowledges the position of China and the US as the key players and allows middle powers the space to hedge selectively between them, avoiding the hardening of Cold War-style blocs.
Signals that the EU is considering tougher trade defences have expectedly drawn fire from Chinese analysts. The arguments are well represented by a piece from Ding Chun and Wu Jiwei, which criticises the proposed Industrial Accelerator Act’s local-content conditions while presenting Chinese-led localised production as a potential benefit to Europe, and by a CF40 report on Europe’s trade deficit with China. Outside the immediate context of EU trade, analysts are more willing to acknowledge problems with China’s trade surplus: Huang Qifan, for example, pointedly describes the current goods surplus as well beyond the sustainable range. The proposed remedies, however, remain fairly general.
The clearest fault line in the economics debate is between proponents of infrastructure-led stimulus and advocates of consumption-based stimulus. Yu Yongding, who views the post-2008 financial crisis fixed-asset stimulus as a broadly positive model, approves of signs that the Fifteenth Five-Year Plan period is set to allocate substantial funds for infrastructure outlay. On the other side, Li Xunlei argues that counter-cyclical stimulus of this kind would only deepen imbalances, while Liu Shijin suggests that money for infrastructure would be far better spent on increasing rural pensions, as he has previously advocated. Huang Yiping adds a further cautionary note: China’s past stimulus, he observes, has tended to generate a short-term inflationary boost but a longer-term deflationary effect, a pattern that AI adoption may further exacerbate.
Following a renewed official emphasis on basic research and a series of high-profile academic fraud cases at elite universities, the question of “talent” is also under scrutiny. From an official standpoint, Sun Xueyu outlines a strategy for ensuring China’s “talent security”. Wang Mingyuan, by contrast, analyses what these fraud cases reveal about deeper flaws in China’s research institutions and academic culture, while Yao Yang argues that China’s current education system is poorly designed for producing creative talent. Zheng Yongnian extends this critique to the economy: criticising the tendency of regulation and SOEs to squeeze the oxygen out of private innovation, he presents the success of motorcycle entrepreneur Zhang Xue, recently celebrated on the Chinese internet, as a model for promoting private business and recognising talent outside the mainstream education system.
— James Farquharson
In Brief
Jia Qingguo on the limits of China-US stabilisation.
Zhao Minghao on a US shift to flexible realism.
Huang Ping on China’s narrowing window for diplomacy with the US on AI.
Jia Min on America’s tech renaissance.
Di Dongsheng & Ji Xianbai on America’s techno-industrial complex.
Da Wei & Zhou Wuhua on “dual-core multipolarity” and competitive coexistence.
Zhang Jian on how a more fluid multipolar order gives China greater diplomatic room for manoeuvre.
Wang Wen & Ding Zhuang on gaining the initiative in cognitive warfare and conceptual autonomy.
Chen Jianhong on the tributary system as China’s alternative to Western maritime and continental orders.
Li Cheng on strategic patience over Taiwan and the risks of accidental escalation.
Jin Canrong i) on focusing on the United States before Japan becomes a decisive obstacle to cross-Strait “reunification”; ii) on China’s Malacca dilemma and the need to avoid a “weakling mentality”.
Xu Yongzhi & Duan Zhiyou on Japan’s remilitarisation and its disruptive role in East Asia.
Wang Junsheng on East Asia as the central arena of Sino-US rivalry.
Senior mainland scholars on post-summit Taiwan opportunities and Trump-driven uncertainty.
Senior mainland scholars on cautious optimism over cross-Strait relations amid “multi-sided pressure and overlapping risks”.
Ding Chun & Wu Jiwei on EU industrial policy and a shift to conditional openness.
Wang Jiankun & Guo Kai on Europe’s trade deficit with China.
Hu Bo on Hormuz, maritime leverage and relative rather than absolute security.
Liu Zongyi on CPEC reform, security governance and Pakistan’s development renewal.
Huang Yunsong & Wang Jing on CPEC 2.0, civil-military consensus and Chinese support for Pakistan’s governance.
Huang Qifan on China’s trade surplus and structural adjustment.
Liu Yuanchun on China’s current-account imbalances and the need for demand restructuring.
Yu Yongding on why the Fifteenth Five-Year Plan is right to prioritise infrastructure stimulus.
Li Xunlei on the limits of counter-cyclical stimulus.
Liu Shijin on weak end-user demand as China’s growth bottleneck and why infrastructure money would be better spent on pensions.
Zheng Yongnian on the need for greater social vitality to achieve entrepreneurial breakthroughs.
Liu Xiaoxia & Yang Yuanyuan on the spreading phenomenon of reverse mixed-ownership reform—the injection of state capital into private enterprise.
Wang Qing on national market integration and breaking invisible local protection barriers.
Wang Mingyuan on what academic corruption reveals about the pitfalls of over-metricised scholarship in China.
Yao Yang on why China’s education system struggles to produce “geniuses”.
Sun Xueyu on ensuring China’s “talent security”.
Wen Hongyu & Hao Haiguang on the hollowing out of social life at China’s universities.
Huang Yiping on AI and the risk of a deflationary substitution spiral.
Dai Mingjie on China’s consumer-internet path dependence in AI.
Zhang Zhan on converting emerging technologies into strategic and new-quality combat capability.
1. US-China
Jia Qingguo (贾庆国): Recent analysis claiming that Trump’s visit formed a “G2” pattern of US–China co-governance [中美共治], comparable to Nixon’s visit to China, is overstated — this summit advanced the relationship’s stabilisation but did not fundamentally alter its future trajectory. The outlook remains far from optimistic: structural contradictions remain acute, cooperation will be difficult and the US domestic political atmosphere remains adverse. Since Washington’s overarching goal of strategic competition with China is unchanged, relevant US government departments are still likely to roll out policies that Beijing reads as confrontational, thereby undermining the stability of the relationship. — Director, Institute for Global Cooperation and Understanding, Peking University (China-US Focus, 19 May)
Zhao Minghao (赵明昊): The Trump administration’s willingness to accept the new positioning of “constructive strategic stability” [建设性战略稳定] represents an important adjustment on the American side, demonstrating that flexible realism [灵活的现实主义] has become the foreign-policy principle Trump favours. On Taiwan, Trump displays new thinking, questioning the so-called Six Assurances made by the Reagan administration in 1982 and neither endorsing nor accepting Taiwan independence. However, many US members of Congress and senior officials still live in the world of 1979 and 1982, underestimating China’s resolve and capacity to defend its core interests, and should they continue to send the wrong signals to separatist forces, they could very well drag China and the United States into a war. — Deputy Director, Centre for American Studies, Fudan University (China-US Focus, 19 May)
Huang Ping (黄平): Chinese AI risks repeating the fate of China’s internet: formidable at home, but internationally reduced to a bounded “local-area network” [局域网] if China misses the narrowing window to enter global AI rule-making before standards, industrial ecosystems and governance frameworks harden against it. The new China–US intergovernmental AI dialogue is therefore a time-sensitive strategic opening. Its success depends on recognising that the United States is not monolithic: Trump needs visible wins, the tech right wants market access, MAGA hardliners respond more to jobs and manufacturing, the pro-Israel camp needs security reassurances over Iran, and Democrats matter for the next political cycle. China should engage each layer differently while maintaining autonomy in chips, foundation models and core algorithms. — Associate Professor and Assistant Dean, School of Public Policy, CUHK-Shenzhen (大湾区评论, 20 May)
Jia Min (贾敏): Rather than “the East rising and the West declining”, the United States is better understood as standing at the starting point of a new historical development cycle. Its “ideational founding period” [观念建国时期] of 1940–2020 has closed, and it has now entered an “AI founding period” [AI建国时期]: new technological-innovation capacity, fused with new forces of American social development, is propelling the country into a fresh cycle animated by a hardening consensus that American hegemony can be rebuilt through technological innovation. China, meanwhile, is in its own rising and rejuvenating phase, thus setting two development models against each other—China’s people-centred model, which emphasises inclusiveness and shared benefit, against an American one that exalts the individual, is market-driven and puts self-interest first. Far from having retreated from the globe, the US has instead grown more flexible, more strategically attuned and more expansionary. — Special Research Fellow, Shanghai Development Research Foundation (观察者网, 21 May)
Di Dongsheng (翟东升) & Ji Xianbai (嵇先白): America’s emerging techno-industrial complex is driving the United States to abandon free-market orthodoxy for state-led industrial policy, civil–military fusion and resistance to regulation. The digital-age heir to the military–industrial complex, it fuses big tech, the national-security state and venture capital into a single interest bloc. As the line between public power and tech capital blurs, regulatory capture intensifies: Palantir shows how government contracts, revenue and valuation can rise together. Abroad, the complex harvests “war dividends” [战争红利] across the Ukraine, Gaza and Iran conflicts, while using “small yard, high fence” containment to preserve American technological hegemony. — Di Dongsheng: Dean, Department of Area Studies; Ji Xianbai: Associate Professor, School of International Studies, Renmin University of China (Qiushi, 1 May)
2. Global Order
Da Wei (达巍) and Zhou Wuhua (周武华): An open “dual-core multipolar” order [双核多极], in which China and the US respect each other’s security space while giving third parties room to hedge selectively between them, is essential to preventing a slide into bloc confrontation and the entrenchment of supply-chain weaponisation. The globalisation-centred post-Cold War order has given way to an international order grounded in nationalism and sovereignty-centred politics, making “competitive coexistence” the realistic basis for a new equilibrium. “Constructive strategic stability” therefore requires open multipolarity rather than strategically instrumentalising diplomatic “large triangles” [大三角] that play other powers against the rival core. — Da Wei: Professor; Zhou Wuhua: PhD candidate, Department of International Relations, Tsinghua University (现代国际关系研究, Issue 5, 2026)
Zhang Jian (张健): The weakening of the US-European front against China and Russia is accelerating a more genuinely multipolar China-US-Europe-Russia interaction, as China, Europe and Russia separately reduce dependence on the United States and generate a loose “collective policy effect” [集体对美的政策效应] against US hegemony. The earlier US-Europe versus China-Russia “large bilateral” [大双边] structure is dissolving, leaving Europe more exposed as it confronts Russia without reliable US support while reassessing dependence on Washington. This disaggregation has “expanded China’s room for manoeuvre, making it a connective point among the other three actors” [中国回旋空间增大，成为另外三方联结点]. The missing piece is Europe: it must drop security-driven pressure on China and pursue greater strategic autonomy from the US. — Vice-President, CICIR (现代国际关系研究, Issue 5, 2026)
Wang Wen (王文) and Ding Zhuang (丁壮): Western cognitive warfare [认知战] exploits China’s limited “conceptual autonomy”, making it vulnerable to narrative manipulation and cultural penetration. Cultural penetration promotes individualism and “historical nihilism”, including the demystification and belittling of revolutionary leaders under the banner of “humanisation”, and the distortion of major historical events in the name of “restoring historical truth”. In AI and biotechnology, Western “ethics first” [伦理前置] standards turn technical rule-setting into barriers that restrict latecomers’ application space while preserving Western flexibility through security exemptions. China must move beyond a defensive firewall and build an offensive “spear” [长矛] through agenda-setting, original concepts and cognitive sovereignty. — Wang Wen: Dean; Ding Zhuang: Associate Research Fellow, Chongyang Institute for Financial Studies, Renmin University of China (智库理论与实践, Issue 2, 2026)
Chen Jianhong (陈建洪): Drawing on Carl Schmitt, the modern Western order rests on two linked foundations: the continental land order, centred on territorial division and balance of power, and the Anglo-American maritime order of trade routes controlled through blockades, trade, finance and technology. China’s tributary system [朝贡秩序] offers a third order-form: like both Western orders, it contains a centre–periphery structure, but differs in combining virtue and power rather than relying on territorial partition or maritime hegemony alone. The modern competition over the Schmittian “great spaces” [大空间]—that today include regional blocs such as the EU and ASEAN as well as military or ideological functional spaces—makes this tributary model a valuable concept on which China can draw. — Professor and Chair, Department of Philosophy (Zhuhai), Sun Yat-sen University (开放时代, Issue 3, 2026)
3. East Asia
Li Cheng (李成): The recent US-China summit signalled a dramatic strategic reversal [戏剧性转变] after nearly nine years of deterioration, as Trump’s readiness to frame China through the language of friendship helped move ties away from enemy logic and opened space for “constructive strategic stability”. The more plausible trajectory is not full reconciliation or renewed Cold War, but managed competition alongside selective cooperation. A durable improvement in relations would depend on a deeper recognition that neither power can secure its interests through confrontation alone, whereas the greatest danger would be inadvertent escalation rather than planned confrontation. On Taiwan, Washington is unlikely to abandon strategic ambiguity, making crisis mismanagement, misread signals or accidental clashes [擦枪走火] across nearby seas the central risk. — Professor, University of Hong Kong (观察者网, 27 May); Note: Shanghai-born, US-educated former Brookings scholar and US citizen
Jin Canrong (金灿荣): China’s immediate strategic focus with regards to Taiwan should remain on the United States under Trump, but Japan may become a far more dangerous obstacle after 2028. First, Japan is moving from backstage involvement to open confrontation, hollowing out its pacifist constitution, expanding arms exports and joining first island chain military activity, yet it still depends heavily on US intelligence, space and strike systems. Second, if constitutional revision succeeds after the 2028 upper-house election, a fully militarised and potentially nuclear-armed Japan would greatly complicate China’s Taiwan strategy, thereby compressing the current window of opportunity [窗口期] for resolving the Taiwan issue. — Professor, School of International Studies, Renmin University of China (金金乐道, 8 May)
Jin Canrong (金灿荣): India’s growing capabilities and infrastructure push on Great Nicobar Island mean China’s Malacca difficulty is no longer centred only on the US Navy, but now includes a rising Indian challenge around a critical maritime chokepoint. China must shed its “weakling mentality” [弱者心态] and respond through concrete capabilities rather than expecting others to change their strategic perceptions. This requires three steps: continued strengthening of China’s blue-water navy, especially by expanding its aircraft-carrier fleet; developing practical bypasses through Myanmar and Thailand; and resolving the Taiwan issue to free up resources in the East and South China Seas. — Professor, School of International Studies, Renmin University of China (金金乐道, 19 May)
Xu Yongzhi (徐永智) & Duan Zhiyou (段致佑): Japan’s 2026 revision of the “Three Principles on Transfer of Defence Equipment” marks a major breach in Japan’s post-war pacifist framework, further weakening constraints on lethal weapons exports and accelerating Japan’s remilitarisation. First, expanded arms sales strengthen Japan’s defence-industrial base, sustain wartime production capacity, and push the country towards becoming a regional “source of trouble” [祸源]. Second, exports to the United States, Australia, the Philippines and other partners reinforce a “grid-like” US alliance system [网格化同盟体系], deepen first-island-chain military integration, and help Japan court neighbouring states into a potential China-containment network. — Xu Yongzhi: Director, Japan Security Research Office; Duan Zhiyou: Assistant Research Fellow, Institute of Northeast Asian Studies, CICIR (世界知识, Issue 10, 2026)
Wang Junsheng (王俊生): Existing studies of Sino-US rivalry overemphasise hegemony, ideology, development models and comprehensive competition while overlooking where that rivalry is geographically concentrated. East Asia — defined as Northeast and Southeast Asia, excluding Russia — is the geostrategic centre [地缘战略重心] of this contest, where the decisive struggle is not direct military confrontation but leadership over regional order. China must make East Asian order-building [东亚秩序重塑] a core diplomatic task: politically consolidating friendly states and winning over neutral ones; economically leveraging trade, Belt and Road cooperation and regional mechanisms; and strategically, addressing its security weaknesses through increased arms trade, training, exercises and dialogue with both neutral states and US-aligned countries. — Researcher and Professor, Institute of Asia-Pacific and Global Strategy, CASS (教学与研究, Issue 3, 2026)
Taiwan specialist roundtable: Senior mainland scholars broadly predict that the post-Xi-Trump meeting window could ease near-term risk around Taiwan, but not transform the structural logic of US Taiwan policy. Li Peng (李鹏) identifies Trump’s personal unpredictability as the largest variable, but argues that repeated interactions between Trump and Xi could stabilise the American president himself [稳住特朗普] and thereby support both cross-Strait stability and US-China strategic stability. Shao Yuqun (邵育群) sees a significant shift in Trump’s approach: his willingness to discuss arms sales with Beijing amounts to a partial abandonment of the “Six Assurances” [六项保证], while his refusal to endorse “Taiwan independence” [台独] adds a clearer element to strategic ambiguity [为对台战略模糊政策添加了一点清晰成分], implying non-intervention if separatism triggers conflict. Wang Hailiang (王海良) offers the most ambitious forecast, urging Beijing to use the next three years to create a positive, irreversible trend [积极的、不可逆转的态势] in China-US-Taiwan interactions and push Washington towards “informal honourable neutrality” [非正式光荣中立]. — (中评社, 24 May)
Taiwan specialist roundtable: Senior mainland scholars judge that the Taiwan Strait over the next two years should remain “broadly controllable, but under multi-sided pressure and overlapping risks” [总体可控、多面承压、风险叠加], even as “positive factors gradually increase” [积极因素渐增]. Yan Anlin (严安林) predicts new momentum for cross-Strait relations, but warns that tensions over “Taiwan independence” and external interference will sharpen, making US-China stabilisation crucial. Peng Weixue (彭维学) sees challenges outweighing opportunities, though US-China “constructive strategic stability” and Taiwan’s “doubt America, fear Trump” mood [疑美恐特] may help Beijing manage these risks. Zheng Jian (郑剑) argues that changes in global power, international alignments and attitudes towards war are creating more favourable conditions for China’s reunification with Taiwan. Qiu Changgen (仇长根) expects competition and confrontation to remain the main US-China trend, despite the newfound room for consultation, warning that Washington will not abandon “using Taiwan to contain China” but wants to avoid a strategically unbearable “Taiwan independence” crisis. — (中评社, 25 May)
4. Europe
Ding Chun (丁纯) and Wu Jiwei (吴佶蔚): The EU’s proposed Industrial Accelerator Act signals a shift from “rules neutrality” to “conditional openness”, integrating decarbonisation, manufacturing revival, economic security and supply-chain control. It may push EU–China industrial ties from “goods trade” [产品贸易] towards “capacity cooperation” [产能合作], including joint investment, localised production and joint R&D. Yet its foreign-investment conditions in batteries, photovoltaics and other strategic sectors would most directly affect Chinese firms, creating potentially WTO-inconsistent discrimination. The Ministry of Commerce’s response is “reasonable and measured” [有理有节]: China remains open to dialogue, but reserves countermeasures if Chinese firms’ interests are harmed. — Ding Chun: Director, Centre for European Studies; Wu Jiwei: Postdoctoral Fellow, Institute for the Belt and Road and Global Governance, Fudan University (China Focus, 13 May)
Wang Jiankun (王健坤) and Guo Kai (郭凯): The widening EU trade deficit with China is not driven primarily by Chinese overcapacity, low-price dumping, trade diversion from the US or weak Chinese demand, but by the interaction between Europe’s changing demand structure and China’s upgraded supply capacity. China’s export growth to Europe is concentrated in the “new three” (batteries, EVs and solar) and chemicals, reflecting Europe’s green transition, energy-cost pressures and shrinking local industrial capacity, rather than a general surge of cheap exports. On the import side, weaker EU exports to China stem less from Chinese market contraction than from falling import dependence and faster domestic substitution as China moves up the value chain. Tariffs and trade protection therefore cannot address the structural roots of the imbalance. — Researchers, China Finance 40 Forum (CF40 Research, 10 May)
5. Middle East & Pakistan
Hu Bo (胡波): After the war, Iran may be able to implement a system of “appropriate fees” for passage, allowing Tehran to present this as recognition of its leverage, and Washington to present the resumption of shipping as proof that navigation had been restored. For China, the lesson is that sea-lane security should not be over-militarised. Military power is a last-resort deterrent, while diplomacy, economics, finance and law should form the core toolkit [组合拳] for managing maritime chokepoints. China should aim for relative security, not an unaffordable pursuit of absolute security that would damage the open trade system on which China depends. — Research Professor and Director, Centre for Maritime Strategy Studies, Peking University; Director, South China Sea Strategic Situation Probing Initiative (SCSPI) (世界知识, Issue 10, 2026)
Liu Zongyi (刘宗义): China-Pakistan friendship remains strategically strong, but sustaining it requires economic realism, domestic development consensus, safer Chinese projects and deeper people-to-people affinity. CPEC 2.0 should move beyond the state-led “1+4” model towards high-quality co-construction, industrial cooperation, livelihood projects, private investment and market discipline, with Chinese support acting only as a catalyst for Pakistan’s own industrialisation. Security cooperation may require intelligence, counterterrorism technology and possible Chinese personnel, yet lasting stability depends on reducing extremism and improving centre-provincial relations. For Pakistan to become a South Asian “little China” [小中国], it would require a much deeper process of ideological emancipation [解放思想]. — Director, South Asia Research Centre, Shanghai Institutes for International Studies (观察者网, 26 May)
Huang Yunsong (黄云松) and Wang Jing (王静): China’s reception of Pakistan’s civilian-military delegation reaffirms Pakistan’s priority in Beijing’s neighbourhood diplomacy, countering claims that the “ironclad” partnership has cooled. The wider prescription rests on consolidating Islamabad’s civil-military consensus, turning the Sino-Pakistani CPEC 2.0 into a platform for autonomous economic “blood-making” [自主造血] through industrial transfer, technological upgrading and supply-chain integration, and strengthening resilience against fiscal, political and regional pressure. Chinese governance experience, including party-school and public-policy cooperation, can help Pakistan manage domestic contradictions [内部矛盾] through development and multidimensional social governance [多维社会治理]. — Huang Yunsong: Vice Dean; Wang Jing: PhD candidate, School of International Studies, Sichuan University (观察者网, 29 May)
6. Chinese Economy
Huang Qifan (黄奇帆): China’s $1.2 trillion trade surplus reflects decades of manufacturing upgrading rather than an active export-surplus policy, but such an exceptional surplus is not sustainable, since it exceeds the internationally tolerable range and risks intensifying trade friction. Made in China 2025 has brought China close to one-third of global manufacturing value added, deepened domestic supply chains and shifted exports towards higher-value machinery and electronic products, yet a reasonable surplus should be 2–3% of GDP, or roughly $400–700 billion. Adjustment should combine gradual RMB appreciation, targeted cuts to export tax rebates as “invisible subsidies”, lower import tariffs, reduced labour “involution” among exporters and expanded paid leave to boost consumption. — Executive Vice Chair, Academic Committee, China Institute for Innovation and Development Strategy; former Mayor of Chongqing (2026 Tsinghua PBCSF Global Finance Forum, 19 May)
Liu Yuanchun (刘元春): China’s goods surplus appears less exceptional once service-trade and investment-income deficits are considered, leaving a current-account surplus of roughly $800 billion [Note: a contestable accounting treatment] but the imbalance nonetheless exists and is rooted in China’s savings, investment and consumption structure. Rebalancing should therefore proceed through structural adjustment: greater overseas expansion, “optimised imports” [优化进口], stronger household consumption, broader consumer-service provision, more efficient investment, lower excessive net savings, expanded services trade and stronger pricing discipline. In AI and digital technology trade, data security rules and digital-trade regulation, especially in Europe, will shape China’s ability to export digital services and application scenarios, so future competition will turn as much on rules and governance systems as on technology itself. — President, Shanghai University of Finance and Economics (澎湃, 18 May)
Yu Yongding (余永定): The 15th Five-Year Plan’s emphasis on building a modern infrastructure system has effectively answered claims that China has run out of useful infrastructure investment opportunities, with market estimates suggesting nearly RMB 40 trillion of investment over the plan period, or more than RMB 7 trillion annually. The 2009 four-trillion-yuan stimulus [四万亿计划] was a “great success” [巨大成功] in delivering a V-shaped rebound after the global financial crisis, even though it also created serious problems, including inefficient investment, shadow banking and local debt. Those flaws do not invalidate infrastructure investment as a macroeconomic tool; rather, they show the need for better institutional design. Consumption support, including trade-in subsidies and vouchers, cannot by itself deliver durable demand, whereas infrastructure investment serves public needs while generating stronger multipliers and crowding-in effects. — Academician and Research Fellow, Institute of World Economics and Politics, Chinese Academy of Social Sciences (观察者网, 12 May)
Li Xunlei (李迅雷): China’s use of stimulus to prevent sharp downturns since the 2008 financial crisis should not be mistaken for immunity to economic cycles, since macro tools can stabilise headline growth while leaving deeper cyclical forces intact and aggravating overcapacity, weak PPI and dependence on investment and exports. Cycles are deep forces, and reading steadier GDP figures as recovery is like mistaking a falling fever for a cured illness. The property market is now the main drag on China’s economy, shaped by population ageing, slower urbanisation and weak effective demand [有效需求不足]. Policy therefore needs to tackle the demand-side roots of the cycle through higher household incomes, distributional and fiscal reform, and less reliance on investment-led stabilisation, rather than measures that merely support GDP or produce isolated rallies. — Chief Economist, Zhongtai International (李迅雷金融与投资, 24 May)
Liu Shijin (刘世锦): China’s demand problem is rooted in weak end-user demand [终端需求], so raising rural pensions would do more for growth than relying on investment-led stimulus without real demand behind it. The slowdown in property and infrastructure has exposed a consumption gap long masked by real estate expansion, producing low nominal growth, weak prices, overcapacity and heavier debt. Raising pensions for 170–180 million rural recipients from roughly 249 yuan a month towards 600 or 1,000 yuan would directly lift low-income consumption and support GDP. Macro policy should put funds at the source of demand: “effective investment” [有效投资] must rise with demand, not replace it. — Vice Chair, Economic Affairs Committee of the 13th CPPCC; former Vice President, Development Research Centre of the State Council (腾讯财经, 8 May)
Zheng Yongnian (郑永年): China needs more economic breakthroughs rooted in a vibrant society, where enterprise is “allowed to get lively and managed well” [放得活、管得好] rather than be “governed to death” [管死], enabling development and security to “walk on two legs” [两条腿走路]. Zhang Xue Motorcycles is emblematic: a junior-middle-school-educated mechanic turned practical skill, entrepreneurial flair, supportive local capital and China’s accumulated manufacturing capabilities into a globally visible industrial success. Yet local governments and private capital often rush into and then abandon strategic sectors such as chips, large models and EVs, spreading China’s limited capital too thinly. The priority should be to give SMEs and private firms fairer access to finance, expand room to experiment and the definition of “talent”, and establish clearer boundaries between state and market. — Dean, School of Public Policy, Chinese University of Hong Kong, Shenzhen (观一线, 28 May)
Liu Xiaoxia (刘笑霞) & Yang Yuanyuan (杨媛媛): “Reverse mixed-ownership reform” [反向混改], meaning state-owned capital taking stakes in private firms, has become a national capital-market phenomenon, examined here through a Jiangsu survey of private enterprises. Private firms seek state capital to obtain resources, ease liquidity pressure, integrate supply chains, solve succession problems and improve governance, while state capital pursues rescue, returns and strategic industrial layout. Yet the reform risks being misunderstood as one-way assistance without reciprocal obligations, while state-asset supervision can overemphasise control, reinforcing fears of “state advance, private retreat” [国进民退], cultural friction and lower efficiency. — Liu Xiaoxia: Professor; Yang Yuanyuan: PhD candidate, School of Economics and Management, Nanjing University of Science and Technology (社会科学文摘, Issue 3, 2026)
Wang Qing (王庆): Building a national unified market has moved from removing visible barriers to regularising rules, improving system-wide efficiency and supporting institutional opening, while serving security as the “ballast stone” of economic security by improving resource allocation, attracting global resources and stabilising supply chains. Explicit local protection and market segmentation have been largely addressed, but indirect protection persists through local investment funds and SOE platforms. In addition, fiscal incentives and official performance assessments continue to encourage local GDP growth and firm protection over national market efficiency, making it necessary to strengthen “national chessboard” consciousness [全国一盘棋] and systems thinking among cadres. — Associate Research Fellow, Capital Markets Research Office, Institute of Finance and Banking, Chinese Academy of Social Sciences; Researcher, Center for National Balance Sheet, National Institution for Finance and Development (金融时报, 7 May)
7. Research and Education
Wang Mingyuan (王明远): Recent accusations of paper-padding, fraud and academic corruption expose the production-line logic and “froth” within Chinese research, where originality has been displaced by metricised output and “performance-grid management” [绩效网格化]. Quantity-based rankings create an illusion of Chinese scientific supremacy: China’s Nature Index output rose from 5,022 papers in 2014 to 32,122 in 2024, producing anomalies such as Sichuan University ranking above Stanford and Jilin University above MIT, yet by the share of papers in the global top 10% for citations, no non-Hong Kong Chinese universities enter the top 50. China’s bottlenecks will not be solved by producing still more doctoral students, but by breaking an evaluation regime that rewards grant-hunting, title accumulation and bureaucratic compliance while burying the genuinely talented. — Research Fellow, Beijing Reform and Development Society (阜成门六号院, 21 May)
Yao Yang (姚洋): China’s struggle to produce truly original, world-class talent — the “Qian Xuesen question” — stems from confusing education with selection: exams, elite tracks and early “cream-skimming” [掐尖] cannot manufacture “geniuses”. The 985, 211 and Double First-Class policies have lifted China’s best universities in global rankings, but they have also hardened institutional stratification, making admission to Peking and Tsinghua the organising logic of schools and families. However, “geniuses” need a looser environment in which to emerge. Education must recover its function of cultivation, not merely selection. — Dean, Dishui Lake Advanced Finance Institute, Shanghai University of Finance and Economics (姚洋说, 9 May)
Sun Xueyu (孙学玉): China’s “talent security” challenge combines internal bottlenecks — high-end talent shortages, structural imbalance and insufficient use — with external risks such as overseas students not returning and high-level talent loss. The response should include: 1) legal safeguards, talent datasets and security training to protect major national projects and key technologies; 2) “autonomous cultivation” that encourages innovation, tolerates failure, expands STEM and skills enrolment, and corrects Chinese education’s tendency to value “intuition over logic, principle over technique, generalism over specialisation” [重感性轻逻辑、重道轻术、重通轻专]; 3) global recruitment through visas and overseas research platforms; and 4) “loyalty education” to defend national interests and state secrets. — Special Commissioner, State Ethnic Affairs Commission; Director, Editorial Board, China Information Security (中国信息安全, Issue 4, 2026)
Wen Hongyu (文红玉) & Hao Haiguang (郝海光): Chinese universities are becoming defined by a “stranger phenomenon”. Dormitories were once imagined as a “second family”, but students now tend to maintain shallow relationships that avoid personal topics so that everyday interaction continues in the form of aimless “relationship idling” [关系空转], without becoming usable “social capital”. Classrooms have turned into sites of “functional attendance”, with a culture of exam-driven and risk-averse learning causing students to avoid speaking because they fear mistakes or being seen as showing off. Expression shifts online, causing the “collapse of the physical ‘nearby’” [空间“附近”的塌缩], while student organisations and supervisor-student ties become increasingly ritualised. The urgent task is to preserve “warmth” within rational modern boundaries, rather than let students become lonely islands. — School of Marxism, Huazhong University of Science and Technology (当代青年研究, Issue 2, 2026)
8. Tech & AI
Huang Yiping (黄益平): AI may reinforce deflationary pressure in China if “intelligence abundance” allows productivity and supply to expand faster than household income and demand. This resembles the problem identified in Xiong Wei’s work on China’s production-oriented monetary policy: credit expansion may briefly lift inflation, but soon creates stronger downward pressure by stimulating supply more effectively than demand. The deeper risk is a “substitution spiral” in which firms rationally replace labour and wages fall, weakening aggregate demand and thereby increasing pressure on firms to cut costs by substituting still more workers. Macroeconomic policy must therefore incorporate new monetary, employment and distribution frameworks to mitigate these risks and support demand. — Boya Distinguished Professor and Dean, National School of Development, Peking University (辛庄课堂, 6 May)
Dai Mingjie (戴明洁): As US AI militarisation expands the strategic uses of new technology, Chinese AI risks going the way of the “four great inventions”: a frontier technology may again be channelled more into civilian consumption than into military, industrial and national power. Palantir, Anduril and SpaceX are being drawn into a new “technology–military-industrial complex”, embedding AI into kill chains and command systems. By contrast, Chinese AI applications and capital flows remain concentrated in the consumer internet, turning AI into “entertainment infrastructure” rather than a strategic productive force. This reflects the platform-economy path dependence of Chinese internet giants, visible in the 2025 food-delivery subsidy war, which wasted capital that could have been used for high-tech R&D. — Research Fellow, Institute of Public Policy, South China University of Technology (IPP Review, 6 May)
Zhang Zhan (张战): Accelerating strategic capability in emerging domains is now pivotal to converting China’s new quality productive forces into new quality combat power [新质战斗力], thereby strengthening China’s integrated national strategic system amid technological and military upheaval. The priority is to seize initiative in AI, quantum information, biotechnology, aerospace, deep-sea and other frontier fields, translating scientific breakthroughs into deterrence, asymmetric advantage and future warfighting capacity while breaking bottlenecks imposed by external technological containment. Policy execution must rest on Party leadership, the new whole-nation system [新型举国体制], civil-military resource integration, strategic science projects and talent mobilisation. — Political Commissar, National University of Defense Technology (Study Times, 6 May)
Hormuz and the Global Order: From Maritime Chokepoints to Continental Corridors (22 May)
As the Hormuz crisis drags on, Chinese analysts are moving beyond oil prices to a bigger question: what happens when US power can no longer keep maritime chokepoints open? The answer is not restoration, but adaptation — land corridors, Eurasian connectivity and a more fragmented global order. Read here
Trump-Xi Summit: Chinese Analysts on the New Strategic Stalemate (19 May)
Chinese analysts emerged from Trump’s Beijing visit strikingly upbeat. The summit is being read not merely as a reset, but as proof that coercion has reached its limits and US-China relations have entered a phase of strategic stalemate. Stability now rests on parity and mutual constraint. Taiwan is the test. Read here
China’s G2 Dilemma (17 May 2026)
Beijing says it rejects “G2”. Chinese analysts are less ready to let it go. Trump’s revival of the phrase has exposed an awkward question at the heart of Chinese strategy: can China take the status, bargaining power and stability that come with US peer recognition without explicitly accepting a two-power order — or losing the Global South in the process? Read here
Yan Xuetong on the World to 2035: Hegemony and Its Challengers (11 May)
Leading Chinese IR scholar Yan Xuetong’s forecast to 2035 sketches a harder, more divided world: entrenched US-China bipolarity, middle powers hedging issue by issue, AI-driven overproduction, fractured markets, rival digital spheres and more frequent cyber conflict. The sharper question is what follows disorder: can China wait out what Yan calls the current wave of “counter-globalisation” and help shape a more morally grounded order? Read here
Spring Recovery or Price-Shock Mirage? | Economics Digest: April 2026 (6 May)
Our first economics digest cuts through China’s spring-recovery debate. Was Q1 a genuine turn, or a rebound flattered by commodity prices, policy front-loading and fragile confidence? Economists divide over infrastructure stimulus, household rebalancing, local-government exhaustion, RMB internationalisation and the Iran war’s economic spillovers — revealing a debate more contested, and more politically constrained, than headline optimism suggests. Read here
Triangles and Chokepoints | Digest: April 2026 (4 May)
Last month’s digest follows Chinese analysts as they make sense of a more fractured world: Europe’s search for autonomy, US-China economic pressure, the Iran war, vulnerable energy routes, RMB internationalisation and AI governance. Across these debates, one question keeps returning: how can China build resilience when the systems it relies on become less reliable? Read here.
N.B. Sinification features a broad spectrum of voices, ranging from conservative hawks and state propagandists to more moderate and liberal thinkers. Readers are encouraged to bear this diversity in mind when engaging with the content.
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