This is the 11th Tangram from Observing China, where the leading China experts give a diverse range of succinct responses to key questions on the development of the People’s Republic of China (PRC).

The near-closure of the Strait of Hormuz due to the United States (US)-Israel-Iran conflict caused considerable disruption to the global economy, highlighting the fragility of international maritime trade. As one of the world’s most critical strategic choke points, there has been a severe impact on the global flow of commercial goods and oil supplies. For the People’s Republic of China (PRC) – the world’s largest importer of crude oil – the restriction of this vital artery could pose a challenge to both its national energy security and its heavily export-reliant economy. While the country has invested heavily in both strategic reserves and diversification, challenges remain.

The near-closure also forces diplomatic choices. In recent years, the PRC has increasingly sought to position itself as a responsible global actor and a stabilising diplomatic force. Indeed, at the end of March, Pakistan and the PRC released a five-point peace plan for ending the conflict in the Middle East, further underlining Beijing’s peaceful credentials in contrast to Washington. While a ceasefire was negotiated, action is still occurring, including an American blockade, and the future of the US’ presence in the region is not yet entirely clear.

Regardless of the immediate fallout, the fact remains that this crisis served as a stark stress test for the PRC’s economic resilience, as well as its broader geopolitical vision. How Beijing adapts its foreign and security policy in the wake of this vulnerability requires investigation.

This forms the basis of this month’s Tangram. In this article, five experts weigh in with their observations to answer the following question: What has Beijing learnt from the near-closure of the Strait of Hormuz?

George Magnus

Member of the Advisory Council of the China Observatory, Council on Geostrategy

Iran’s ability to exploit the Strait of Hormuz choke point may have left Beijing feeling smug about its own energy self-sufficiency policies over the medium term – including green tech and electrification – the advantages of stockpiling, and the US being drawn into a new crisis far away, but also at odds with some of its allies. Nevertheless, the PRC will need to weigh much more than this in assessing the lessons to be learned from Hormuz.

Beijing’s unwillingness, or inability, to use its own navy to secure distant waterways may not apply closer to home, but it reflects the PRC’s maritime capacity limitations. Building more solid regional relationships with countries that have vested interests in freedom of navigation would seem appropriate, although inconsistent with Chinese policy in the South China Sea.

The vulnerability of important geographic and waterway choke points to asymmetric conflict and a relatively modest cache of enforcement capabilities has been clearly demonstrated. Beijing will want to minimise the harm that others could inflict on it by blockading or restricting access through the Malacca and Taiwan Straits.

The PRC, which gets over 40% of hydrocarbon imports, or close to a quarter of consumption, from the Gulf, will have become more choke point-conscious. It might need to switch steadily to increasing its imports from Russia, Central Asia, and perhaps the Myanmar corridor if practical, while encouraging overland and choke point-bypass supplies from Gulf Cooperation Council (GCC) countries.

The economic damage done by the de facto closure of the Strait of Hormuz in terms of higher energy prices, disruption to supply chains (in this case also fertilisers and petrochemicals, for example), and the hit to global demand comprise a salutary lesson for the world’s biggest export nation and centre of global supply chain networks. The PRC’s craving for stability in the Middle East, as well as in a broader geography, is much less a yearning for peace than a strategic asset cutting to the heart of its commercial interests.

Militarily, Beijing will certainly want to digest the details of the conflict, in particular the success (broadly speaking) of the defensive hardware employed to restrict the damage and disruption intended by Iran’s arsenal of ballistic missiles and drones. As these figure prominently for the People’s Liberation Army (PLA) – the PRC’s armed forces – Beijing would undoubtedly want to assess this in its Taiwan strategies, as well as the difficulties encountered by ships in approaching – not to mention challenging – mobile and often hidden coastal defences in and around the Straits of Hormuz and the Persian Gulf would also feature in the context.

Andrew Yeh

Executive Director, China Strategic Risks Institute

The PRC’s most critical lesson from the US-Israel-Iran conflict is the inherent fragility of the global shipping ecosystem. The Hormuz crisis has demonstrated that you do not need to sink a fleet to stop trade; you only need to break one link in the chain of owners, crews, insurers, and financiers. If any of these actors thinks that the risks of damage, crew injury, detention, or confiscation are too high, the entire chain falls apart.

This has profound implications for a potential ‘quarantine’ or partial blockade of Taiwan. A targeted Chinese ‘stop and search’ operation on Liquified Natural Gas (LNG) tankers could create an increasingly difficult risk profile for commercial insurers to stomach. Even if Washington or Taipei offered naval escorts, the reluctance of shipping companies to enter actively contested zones – as seen with the lack of enthusiasm for the Trump administration’s offer in Hormuz – suggests that trade could grind to a halt long before a shot is fired. As previous analysis from the China Strategic Risks Institute (CSRI) has found, for Taiwan such a scenario could exhaust energy stockpiles in a matter of weeks, placing immense pressure on its government and economy.

Furthermore, the rapid depletion of American munitions in the Middle East – expending hundreds of Tomahawk cruise missiles and interceptors against asymmetric threats – has exposed an industrial gap that Beijing is uniquely positioned to exploit. In the first six days of the Iran conflict, the US expended over 300 Tomahawks. Last year, it manufactured a total of just 72 such missiles. The PRC will be content to watch the US exhaust its own ‘deterrence’ in a secondary theatre, while maintaining a stranglehold on the rare earth elements, such as gallium, that are essential for a range of defence technologies.

Ultimately, the inconclusive and protracted nature of the conflict reinforces the wisdom of Beijing’s current sub-threshold strategy against Taiwan. Rather than risking an existential and costly full-scale invasion – not to mention potential failure – the PRC is learning to slice away at Taiwan’s autonomy incrementally. The goal is to stay below the threshold of conflict, using maritime pressure, lawfare, and information operations to win the war without ever having to fight it. Until His Majesty’s (HM) Government becomes serious about helping Taiwan counteract all aspects of sub-threshold warfare – military, cyber, legal, and cognitive – it is failing to defend Britain’s interests in the Taiwan Strait.

Owen Au

Independent Researcher

The ongoing crisis in the Strait of Hormuz does not offer a new lesson for Beijing so much as reinforce an existing playbook: reduce external vulnerabilities and strengthen supply chain self-reliance.

In Chinese policy discussion, the Hormuz crisis is not seen as an isolated episode, but as part of a broader structural shift in global power dynamics, often described as a ‘once-in-a-century transformation’. As the external environment becomes increasingly volatile, uncertain, and even hostile, Chinese leadership has consistently drawn the same conclusion to reduce reliance on external supply and strengthen self-reliance.

This is particularly evident in the energy sector, where Xi Jinping, General Secretary of the Chinese Communist Party (CCP), has repeatedly emphasised that ‘the rice bowl of energy must be held firmly in one’s own hands’. The near-closure of the Strait of Hormuz represents one of the most significant shocks to global energy supply in decades. With over 40% of its imported oil transiting the Strait prior to the crisis, the PRC remains exposed to such choke point disruptions.

While stockpiling and import diversification (especially towards Russia since 2022) in recent years have helped to cushion the immediate impact, these are at best short- to mid-term mitigations. Over the longer term, this would only reinforce Beijing’s sense of urgency to accelerate energy transition as a more durable solution.

In the PRC’s context, energy transition goes far beyond climate and net zero goals. It serves a strategic purpose in reducing dependence on imported oil. After decades of state-led investment, the PRC now dominates key segments of the global renewable energy supply chain, from critical minerals processing to battery production.

This industrial position essentially allows Beijing to anchor its energy system more firmly in supply chains under its own control, while gaining leverage over others that depend on them. In this sense, energy transition functions as a de-risking strategy for the PRC’s energy security, while also strengthening its position within its broader self-reliance agenda and global supply chains.

The crisis in the Strait of Hormuz is therefore not an anomaly, but the latest validation of Beijing’s risk perception. It strengthens the belief that such disruptions would only recur in an increasingly volatile external environment. If there is a lesson for Beijing, it is that it must move faster to reduce external vulnerabilities while reshaping interdependence in its favour.

Grace Theodoulou

International Fellow, Council on Geostrategy

The main lesson that Beijing has learned from the near-closure of the Strait of Hormuz is something it already knew: the importance of courting key trading partners who may help you through tough times.

For many, the reduced access to oil is the principal blow that is delivered by the near-closure. While the PRC has a crude reserve of 1.7 billion barrels, enough for several months, Beijing knows that it does not have long-term immunity.

Perhaps this is why energy cooperation was high on the agenda during the recent state visit to the PRC of Sheikh Mohamed bin Zayed Al Nahyan, president of the United Arab Emirates (UAE) and ruler of Abu Dhabi. There were high-level meetings of executives in each side’s energy industry, and both parties agreed to increase trade on clean energy and petrochemicals. The UAE is a growing supplier of oil to the PRC and is a key re-export hub for the PRC; approximately 60% of Chinese exports to the UAE are re-exported onward globally.

The near-closure of the Strait has re-affirmed to Beijing that it can also wield itself as a rescuer, which is particularly useful for its geopolitical positioning among countries who have grown more hawkish on the PRC in recent years. As the Philippines declared a state of national energy emergency due to oil supply disruptions, Beijing sent 260,000 barrels of diesel, marking some of the small exemptions to its tight fuel export controls that had recently come into force. Earlier this month, Beijing also held talks with Canberra about increasing cooperation on energy security in light of the ongoing war in the Middle East. The PRC is a significant source of aviation fuel for Australia and is also a large importer of Australian LNG.

The domestic picture is also important. On 6th April, Xicalled for the acceleration in the planning and construction of a new energy system, particularly hydropower development and nuclear power. As the report confirmed, the PRC recognises its need for ‘a strong guarantee for energy security’ because, as the world’s largest beneficiary of globalisation, its long-term prospects as a manufacturing powerhouse are not so bright if the conflict in Iran continues.

William Freer

Research Fellow (National Security), Council on Geostrategy

The first military lesson Beijing will have drawn is how easy it is to unnerve international shipping to the point that shipping companies will not sail through an area they deem dangerous. The American and Israeli air campaign delivered overwhelming destruction on Iran’s naval forces, as well as much of its other capabilities that could contribute towards an interdiction effort in the Strait of Hormuz. Only a handful of ships came under attack, and most of these attacks were limited, yet transits mostly stopped, falling 91% from normal levels. Amid the background of such uncertainty, insurance reset and shipping companies held back their people and assets from risk; unlike with the Red Sea, there are no alternative routes.

This shows how easy it could be to shut shipping to Taiwan, an island deeply reliant on maritime trade for survival. Yet, it also shows the challenges in keeping shipping going to and from the PRC in the event of a Western Pacific conflict. The ‘Malacca dilemma’ – the PRC’s vulnerabilities to distant blockade of energy supplies – is well known, but this also extends to broader maritime trade, accounting for around a third of Chinese Gross Domestic Product (GDP). Shipping avoiding the PRC for any period of time would be an economic catastrophe, but, unlike for Taipei, not fatal. The PRC will have taken reassurance that its efforts towards material autarky at home and redundancy in trade routes are a prerequisite to any effort to use force against Taiwan.

The next lesson Beijing might draw is twofold. Firstly, conflicts like this, and their potential economic disruptions, are likely to proliferate. Secondly, it is challenging to project power. Although the PRC’s military capabilities have grown considerably in recent years, it would struggle – for now – to maintain a large naval force at distance to secure its interests.

This raises an interesting question: to what extent will conflicts in geopolitical crunch zones begin to distract Beijing from its main goal of unification with Taiwan? Is there a point at which, when Chinese interests are hit further afield, Beijing decides to use military force to secure said interests? It took Adm. Sergey Gorshkov, Commander of the Soviet Navy, almost 20 years from 1956 to develop the Soviet fleet to the point it could and would contest distant seas.

Although 21st century Beijing has a number of differences to Soviet Moscow, we should not act surprised if we see Chinese naval forces more regularly on deployment far from home; building on their recent circumnavigation of Australia.

If you would like to explore any of the Council on Geostrategy’s PRC-focused research papers, click here to visit the China Observatory.

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This is the tenth Tangram from Observing China, where the leading China experts give a diverse range of succinct responses to key questions on the development of the People’s Republic of China (PRC).

At the end of January, two generals of the People’s Liberation Army (PLA) – the armed forces of the People’s Republic of China (PRC) – were purged. Gen. Zhang Youxia was the PRC’s top general and vice-chairman of the Central Military Committee (CMC); the group responsible for controlling the PLA and headed by Xi Jinping, General Secretary of the Chinese Communist Party (CCP). Gen. Liu Zhenli was head of the CMC’s Joint Staff Department. Their dismissal – on grounds of ‘serious violations of discipline and law’ – has left the CMC reduced to two members from seven; now consisting solely of Xi and Gen. Zhang Shengmin.

The opacity of the inner workings of the PRC has led to inevitable speculation about Xi’s leadership. There have been suggestions that January’s purges resulted from power struggles, but also that they neither strengthen nor weaken his position.

Regardless of the theories as to why the purges occurred, the fact remains that they are a demonstration of Xi exercising his power; a move to exert further control over the PLA. This forms the basis of the first Tangram of 2026, in which four experts weigh in with their observations on the removal of the two generals to answer the following question: What do the recent military purges say about Xi Jinping’s leadership?

Charles Parton OBE

Chief Adviser, China Observatory, Council on Geostrategy

The first thing the purges say is that Xi is very much in charge. Of PLA Central Committee members, over three quarters of the 44 officers have been removed or are missing from meetings. Early in his tenure, Xi cut the CMC from 11 to seven; of those, five are no longer in post. The PLA is the guarantor of power – it has the guns – so Xi has left it to last, after dealing with civilian opposition figures and the security services.

Second, the purges underline his determination to dig out corruption. Xi has continually emphasised that leaders must set an example and be held to account, but he must have known that all current officers above the rank of colonel rose when promotion through payment was the norm, and that other forms of corruption will have affected all senior officers. Purging corruption is only part of the story.

Third, corruption weakens sinews, the ultimate props for power. Xi has said that one reason for the fall of the Communist Party of the Soviet Union was not exercising proper control over the Red Army. His, and the CCP’s, survival depends on not making the same mistake.

Fourth, and linked to the above, corruption leads to political and ideological deviation. Money sets up unseen links between officers, promoting loyalty to others rather than the CCP and CMC chairman. Hence, an editorial in the PLA Daily, the official newspaper of the Chinese military, fulminates that those purged had:

…seriously trampled upon and undermined the CMC Chairman Responsibility System, fuelled political and corruption issues that affect the Party’s absolute leadership over the military and endangered the Party’s ruling foundation…seriously impacted the political and ideological foundation of the unity and forge-ahead spirit of all officers and soldiers.’

This smacks of factionalism, and must be ruthlessly crushed.

Fifth, corrupt leadership detracts from Xi’s demands for greater professionalism. If the PLA is to fulfil its appointed tasks, it must be ruthlessly efficient and not distracted. In the words of the PLA Daily, the generals’ actions had ‘caused immense damage to the military’s political construction, political ecology and combat capability construction…’ Xi does not appreciate subordinates who fall short in their mission.

Finally, the rectification and corruption battle is not over yet. It will be interesting to see whether the purges are a prelude to a big change of having no PLA representation in the Politburo. A PLA which is more thoroughly under Xi’s control, and less politically powerful, may be something Xi sees as important for the next five years as he prepares to hand over power. The last thing he needs is an alternative focus of influence.

In sum, the party must command the gun…well, not exactly. The PLA must ‘resolutely obey Chairman Xi’s command, be responsible to Chairman Xi, and set Chairman Xi’s mind at ease’. Amen.

Willy Lam

Senior Fellow, Jamestown Foundation

The announcement of investigations into the alleged ‘serious violations of discipline’ on the parts of Gen. Zhang and Gen. Liu was made by the PRC’s Ministry of National Defence on 24th January. However, up to now, no officer from any PLA division has stood up to second the decision by Xi to sack the two generals.

A meeting of the Standing Committee of the National People’s Congress (NPC) – the PRC’s parliament – held on 4th February to examine the credentials of NPC delegates revoked the membership of three senior members of the defence and nuclear research establishment. However, Zhao Leji, NPC Chairman and a member of the CCP Politburo Standing Committee, did nothing to Zhang and Liu. Zhang, a longstanding foe of Xi’s, has remained on the CCP Politburo. This event revealed hitherto undisclosed ‘disagreements’ between Xi and NPC Chairman Zhao.

In late January and early February, the PLA Daily made reference in various commentaries to the sacking of the generals as evidence of the CCP’s commitment to rooting out corruption. However, it also admitted that the party was facing challenges coming from ‘complex and deep-rooted changes on the international and national fronts as well as the fronts of party and military [affairs].’ ‘The military faces interlaced and complex tests on the political front,’ said one commentary on 9th February.

While their fathers were close comrade-in-arms in the 1940s and 1950s, Xi and Zhang have been foes particularly since 2022. In October 2025, Zhang is believed to have engineered the fall of three formerly Fujian-based PLA generals: CMC Vice-Chairman He Weidong, CMC member Adm. Miao Hua and Commander of the Eastern Theatre Command Gen. Lin Xiangyang – all of whom were close friends of Xi when the latter was rising up the hierarchy in the same province.

Even though on the diplomatic front, Xi is basking in the limelight during well-publicised meetings with several European leaders, the failure of the 72-year-old ‘princeling’ to orchestrate broad support for the removal of Zhang and Liu points to his lack of thorough control of the military.

Despite Chairman Mao’s famous dictum that ‘power grows out of the barrel of a gun’, the PLA lacks the means and resources to run the country in a way that military juntas are ruling in Myanmar or Thailand, for example. However, as the PRC’s top leader, failure to exercise full control over the PLA shows fundamental flaws in Xi’s leadership. This could also affect the legitimacy and quality of the Chinese administration through to 2032, when Xi is expected to step down after 20 years at the helm.

Helena Legarda

Head of Programme, Foreign Relations, Mercator Institute for China Studies (MERICS)

Xi’s purges of Gen. Zhang and Gen. Liu were surprising to many observers. Beyond who was taken down, the most unusual aspect of these purges was the speed and the timing. Xi chose to move against the generals just a few weeks after the sweeping PLA purges in October 2025, and without waiting until a more politically opportune moment, such as an upcoming plenum of the CCP Central Committee or next year’s Party Congress, to let them exit quietly.

China watchers do not know the precise reason why Xi might have felt the urgency to act now. Theories abound, ranging from Xi’s dissatisfaction with their failure to deliver results on the 2027 and 2035 modernisation goals to Zhang’s opposition to Xi – and especially his approach to Taiwan.

What is clear, however, is that these purges were largely political in nature. Official Chinese state media outlets have published several commentaries since the investigations were announced, calling for the military to be put under the ‘absolute leadership of the party’. They have also criticised the two generals for ‘trampling on and undermining the Chairman Responsibility System of the CMC’, which dictates that all decisions related to the military lie with the CMC Chairman; that is, Xi himself.

This is not the first time that Xi has purged top military leaders. In his roughly 13 years in power, he has removed several members of the CMC and two consecutive ministers of defence, as well as the commanders of the PLA Rocket Force and other military services. The constant cycle of purges and investigations throws into question Xi’s approach to personnel appointments. Many of the purged generals were officers who had been promoted by Xi and who were considered loyalists.

But, despite all of this, Xi seems to remain firmly in control of the levers of power. While internal opposition to his leadership cannot be discounted, his ability to turf out even the most senior of the PLA’s leaders highlights the success of his long-running campaign to centralise power and take out any alternative power networks.

This personalisation of power, however, can be risky. It removes other voices from decision-making processes, potentially increasing the risk of miscalculation and conflict. And it leaves Xi as the one person ultimately responsible for all decisions. A failed military operation against Taiwan, for example, would therefore have profound implications not just for the PRC, but also for Xi personally, and likely for his ability to stay in power.

Grace Theodoulou

International Fellow, Council on Geostrategy

It is hard to see how the recent purges are a sign that Xi is concerned about a challenge to his authority, even though that might make for a more interesting headline. It is also unlikely that the purges were entirely without reason, which is the logic that gives way to the theory that Gen. Zhang and Gen. Liu were removed simply for being a threat to Xi’s power.

The grounds used for the purges – ‘serious violations of discipline and law’ – are a euphemism for corruption. The more pertinent question to ask might be: in Xi’s PRC, is the meaning of corruption still limited to fraudulent or dishonest behaviour, or has it expanded to encompass any behaviour which could be considered even a minor deviation from Xi’s prescriptive doctrine?

Xi has made the rooting out of corruption within the PLA one of the key tenets of ‘Xi Jinping Thought on Strengthening the Military’. It is true that the PLA is riddled with corruption – which, if nothing else, leads to reduced productivity and efficacy. Xi has made it clear that this cannot be afforded: the PLA must be ‘able to prepare for wars, fight wars, contain wars and win wars’.

Some of the procurement arms of the PLA are notably corrupt, which means that at times, inefficient or subpar components are embedded into the military machine. Authoritarian regimes foster a culture of cover-ups, where a high-ranking official may conceal incompetencies of a subordinate for fear of being exposed themselves. This coping mechanism is then adopted and passed down as officials climb the ranks.

So, it is possible that the ‘serious violation of discipline and law’ refers to Xi’s dissatisfaction with the generals’ handling of corruption among their own subordinates. Another key tenet of Xi’s military thought emphasises the need for the CCP to have absolute leadership over the PLA. The foundation of military cohesion and political reliability is loyalty to the party leadership, i.e., to Xi. If Zhang and Liu are unable to exert discipline, what would that say about Xi himself?

If you would like to explore any of the Council on Geostrategy’s PRC-focused research papers, click here to visit the China Observatory.

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This is the ninth Tangram from Observing China, where the leading China experts give a diverse range of succinct responses to key questions on the development of the People’s Republic of China (PRC).

Dissidents being plucked off the street and bundled into torture chambers onsite, and a confluence of cables transferring crucial data being tapped underneath an Eye of Sauron of omnipresent vigilance across London. These are the images conjured of Beijing’s potential new ‘mega embassy’ in London, if one is to believe much of the coverage of this topic by British media.

The request made by the People’s Republic of China (PRC) to upgrade its embassy has dominated news over the past year, particularly as Beijing has increased the pressure on His Majesty’s (HM) Government to approve it. Xi Jinping, General Secretary of the Chinese Communist Party (CCP), began amping this up when Sir Keir Starmer, Prime Minister, came into power last year. The current government has clarified in its manifesto that trade with the PRC is a must. Beijing is clearly using the approval of the ‘mega embassy’ as a prerequisite for the bilateral trade relationship to continue, or even to flourish.

But this saga has actually been going on for some years now. The PRC bought the site, Royal Mint Court, in 2018 – under the previous Conservative government. If the security concerns can be allayed, then what grounds can HM Government use to reject it?

In this Tangram, I asked seven experts to consider the veracity of these concerns and whether or not, in the end, Whitehall should approve the ‘mega embassy’.

Charles Parton OBE

Chief Adviser, China Observatory, Council on Geostrategy

HM Government’s handling of the new Chinese ‘mega embassy’ issue is puzzling. To this outsider, it seems simple. If, as reported, there are sensitive cables running from the financial district in the City, and if those cables cannot be rerouted, planning permission should be refused.

If such cabling does not exist, arguments for refusal are overwrought. The idea that the new embassy will be a bastion of espionage holds no water. The Ministry of State Security (MSS) does not run sensitive operations from embassies, because the security services monitor them and their staff. Agents are met either in the PRC or third countries. No doubt Chinese embassy staff do ‘targeting’, bringing to MSS attention people whom they might approach, but they can do this from any premises.

The basement of the new embassy will not be used as dungeons for holding opponents of the regime seized from the United Kingdom’s (UK) streets. The Chinese have not done this since 1896, when Qing authorities kidnapped Sun Yat-sen. In the unlikely event that they kidnapped someone today, they would surely use a safe house well away from the attention surrounding an embassy. As for blanks on the plans submitted by the PRC, surely in planning for a new embassy in Beijing, British authorities would not set out which rooms are to be used for sensitive purposes, such as communications, servers, housing political staff, safe speech rooms and so on?

Symbolically, a massive embassy squatting toadlike in a historical building in the heart of London is not a comfortable sight. However, the UK practises rule of law, and if there is no legal or security reason for withholding permission, so it must be.

So why this procrastination, particularly when a positive answer is likely to be followed by appeals, ensuring that nothing happens for years? Outsiders can only peer at this fog. But the temptation is to see within that mist a government which is scared to upset the Chinese by declaring openly that national security means a negative answer. The controversy over the new edifice is not edifying.

Dr Sari Arho Havrén

Senior Geopolitical Adviser, Business Finland, and International Fellow, Council on Geostrategy

Whitehall’s decision has been postponed repeatedly, drawing protests with warnings of ‘consequences’ from Beijing and raising the diplomatic stakes. Approving the project would signal openness to the PRC, but could raise national security risks.

On national security concerns, British and allied security services report a sharp rise in Chinese espionage targeting the political, economic and technological assets of free and open countries. MI5 has flagged growing ‘big three’ threats from the PRC, Russia and Iran, with a 35% jump in state-linked probes. Recent alerts detail Beijing-linked attempts to compromise Members of Parliament (MPs) and influence political life through blackmail and use of covert networks. Simultaneously, coordinated Chinese-Russian operations – from hybrid intrusions and disinformation campaigns – aim at destabilisation.

Prosecuting any criminal offences is difficult. Cases often falter on evidential difficulties based on political sensitivities, as seen with the collapse of the recent spying case relating to Beijing. Nevertheless, intelligence officials in free and open nations widely agree that the PRC and Russia are not only boosting espionage activities, but are actively targeting critical infrastructure, and ramping up cyber and human intelligence efforts against the UK and its allies and partners.

This is unfolding amid the two nations’ deeper intelligence entente since their 2022 ‘no-limits’ partnership. Intelligence cooperation has expanded across satellite reconnaissance, dual-use technology and influence operations fuelled by actors who seek to undermine the rules-based international order. While some argue that historic distrust limits the depth of cooperation, increasing evidence points the other way: Sergei Naryshkin, Director of the Foreign Intelligence Service of Russia, stated in June 2025 that Chinese-Russian intelligence ‘interaction is expanding year by year…in all areas’. Growing evidence of the PRC’s intelligence sharing with Russia on Ukrainian targets confirms deepened intelligence coordination. The result is a more hostile intelligence environment, in which both powers act jointly to promote a global order which undermines British interests and influence.

Approving the new embassy thus not only poses concrete security risks, but symbolically also feeds into the war on narratives, amplifying the idea that democracy is weak and has a propensity to sacrifice national security for economic gains. Foremost, however, it underlines Beijing’s own perception that, in the face of its geoeconomic might, it can sit back and let the dominoes fall.

Joshua C. Huminski

Senior Vice President for National Security and Intelligence, Centre for the Study of the Presidency and Congress, and International Fellow, Council on Geostrategy

While the decision is ultimately the UK’s to make, a rejection of the PRC’s proposed ‘mega embassy’ would be well-received in Washington by Donald Trump, President of the United States (US). Trump has already indicated that he believes the centrally located embassy, which would become Beijing’s largest in Europe, represents a ‘national security risk’. Rejecting its construction would demonstrate to Washington that No. 10 takes the threat seriously, and will stand up to the PRC’s bullying in Beijing and intransigence in London.

The Trump administration views Beijing as its central strategic competitor, and is increasingly reorienting its defence and military apparatus towards containing and deterring the PRC in the Indo-Pacific. While the US believes that it is the primary – and only – country with the capacity to do so, it nonetheless expects alignment among its allies in resisting pressure (diplomatic, political, economic or otherwise) from Beijing.

Washington is undoubtedly aware of the high-profile collapse of an espionage case in London, which, to some, reflects poorly on HM Government’s legal ability to confront Beijing’s wide-ranging intelligence efforts – to say nothing of its seriousness about the threat. Many, especially within Congress, remain displeased with Britain’s decision to hand control of the British Indian Ocean Territory (including the strategically important Diego Garcia) to Mauritius. Washington will also recall the challenging efforts undertaken to extricate and prevent further penetration of British telecommunications networks by Huawei and ZTE.

Approval now, though temporarily delayed, would serve to resurrect these less-than-desirable memories of the UK’s complex and challenged relationship with the PRC, and would be seen as conceding to Beijing’s bullying and intransigence. It would also undermine some of the goodwill which the Prime Minister has worked assiduously to build with the President since his inauguration in January 2025. For Trump, the only thing worse than no deal is a bad deal, and the ‘mega embassy’ is very much a bad deal for Britain.

Patrick Triglavcanin

Research Assistant, Defence and Security Institute, University of Western Australia, and International Fellow, Council on Geostrategy

Attempting to define and conceptualise the challenge posed by the PRC to the UK has animated HM Government since the 2021 Integrated Review, with Sir Keir landing on the dictum that the two nations will ‘cooperate where we can, compete where we need to and challenge where we must’.

This is almost a carbon copy of Australia’s dictum under Anthony Albanese, Prime Minister of Australia, that Canberra ‘must cooperate where we can, disagree where we must, but engage in our national interest’. It is the differences in the last clause which the ongoing ‘mega embassy’ row highlights, with the proposed site having potential national security implications due to surveillance concerns.

Assuming these implications are indeed accurate, the proposed embassy should be rejected. This decision would satisfy both dictums. But fear of Beijing’s reaction seems to be driving Britain’s PRC policy as of late; Australia’s handling of the relationship should again be looked to for guidance.

The Albanese administration has demonstrated that a country at odds with the PRC in many respects can deepen relations while maintaining both face and security, as well as targeted national interests, such as a dynamic economy. Even though – after much hard work – the final remaining trade sanctions placed on Australia during the 2018-2022 administration of Scott Morrison were only lifted six months prior, Albanese remained stern in the face of threatened Chinese trade retaliation, affirming that he would maintain his position to force the sale of the Chinese-owned Port of Darwin.

Furthermore, just over half a year after a lengthy – and borderline decadent – state visit to the PRC, Albanese signed a geopolitically significant critical minerals deal with the US, which has its sights set squarely on the PRC and its hold over the refining and export of those minerals. Sure, this is a juggling act; however, it is one that is broadly working.

Australia may be more deft than the UK in managing the PRC, but it does not have more leverage. It may just have more guts. Policymaking under the assumption that sometimes the PRC’s bark is worse than its bite is not without risk, but it is a path which can lead to a more balanced relationship and less room for infringements on national security.

Australia under Albanese has demonstrated this in many cases. With Sir Keir already borrowing from Australian Labour on PRC policy, he may want to consider what Canberra’s blueprint for the ‘mega embassy’ would look like – not just Beijing’s vision and the threats which accompany it.

Dr Danielle Reeder

Freelance security and defence consultant

Beijing’s current administration is preparing for a new era of great power contest, with the scale of this proposal demonstrating this figuratively and literally. The PRC seems to be hedging that HM Government will capitulate on accepting heavily redacted plans or, if not, retaining such rejection for future retaliatory actions. However, at the moment, potential retaliation for standing firm on national security grounds is not the priority concern for Whitehall. The UK is being drawn into a position that it has to understand, process and respond to with measured – yet unwavering – certainty.

As a matter of diplomacy, it is entirely reasonable for Beijing to house a new embassy in London. It is less reasonable, however, to do so on its terms alone. Whitehall cannot accept a plan which does not legitimately address its concerns over espionage, influence and political harassment. As ever, the trading game here is reciprocity. What reassurances, or even terms of goodwill, are on the table?

If Beijing is not prepared, at the very least, to offer guarantees over concerns of rights of the Chinese diaspora (including Hong Kong citizens) and non-interference in sovereign affairs, then there is little to question here. But neither firm assurances nor revised embassy plans will overcome the momentum of Chinese manoeuvres.

Whitehall has to prepare both an outright ‘reject’ and a heavy ‘revise’ strategy. To do this, it must establish its non-negotiables across parties, and understand what Britain legitimately needs from the PRC – both now and going forward.

Matthew Palmer

Adjunct Fellow, Council on Geostrategy, Richmond Fellow, Royal Navy, and former officer, British Army

HM Government’s decision on whether to approve the ‘mega embassy’ construction will prove a public test of the UK’s ‘progressive realist’ foreign policy, as well as exemplifying the UK-PRC relationship in microcosm.

Rejecting the proposal will likely lead to reciprocal action from the PRC regarding proposed repairs to the British Embassy in Beijing, as well as making future trade negotiations more difficult. Against this, the security concerns of a larger embassy, housing far greater espionage capabilities and personnel – especially one which is close to London’s financial heart – should be measured.

The ‘optics’ of the decision should also be considered: does the UK wish to allow the PRC, an authoritarian regime accused of significant human rights abuses and aggressive espionage practices, to build its largest embassy in Europe on the historic site of the British Royal Mint, a stone’s throw away from the equally historic Tower of London?

While the current government is somewhat hamstrung by the fact that the land was purchased by Beijing under a previous administration, the UK should look to turn this unhappy situation to its advantage. One boon of the consolidated embassy is that it would be easier for Britain to monitor the behaviour of the PRC. As a minimum, the UK should demand of Beijing the closure of all its other official properties in London, as well as full information on the ‘greyed-out’ areas of the proposed building plans, and retain the right to veto additional construction.

Another bold proposal would be to offer the PRC an alternative location – somewhere large enough but far less prominent or risky (and ideally where a large number of protesters can gather safely). While potentially expensive, some effective diplomacy may offer a solution in which the espionage threat and public upset are reduced, with a minimal loss of face for either side.

Ryan Wu

Policy researcher and MPhil graduate, University of Oxford

Whitehall should refuse consent for the ‘mega embassy’ unless it can verifiably eliminate the risk of transnational repression.

The proposed embassy would concentrate Chinese personnel and privilege in a fortified enclave, which could monitor, coerce and intimidate UK-based diaspora communities. Britain has already seen how Vienna Convention immunities and inviolability shield intimidation. Staff at the Manchester consulate, for example, dragged a protester into the compound and beat him, then fled to Beijing after it refused to waive their immunity.

The Manchester assault was not an aberration, but a warning that inviolable premises and diplomatic status have been repurposed to menace critics on British soil. UK authorities have also identified undeclared ‘police service stations’ in London and other British cities, used to monitor and harass expatriates.

The UK now hosts sizeable Hong Kong, Uyghur and mainland dissident communities, many of whom face bounties, threats against relatives in the PRC and organised surveillance by party-state proxies. A mega compound would amplify these activities – co-opting student and community groups, mobilising counter-protesters and normalising the party-state’s reach far beyond consular services. The Intelligence and Security Committee of Parliament has described the PRC as one of the most flagrant perpetrators of transnational repression in Britain. New powers under the National Security Act 2023 and the Foreign Influence Registration Scheme exist, but enforcement remains blunt when operatives can retreat behind diplomatic privilege.

If ministers contemplate approval at all, safeguards should be non-negotiable. HM Government should require full, unredacted plans and intrusive security vetting; establish buffer zones to protect lawful protest; and mandate targeted monitoring of suspected operatives to ensure no officials stalk, harass or direct coercion on the UK’s streets. Anything less invites impunity.

Approval on standard planning grounds would signal tolerance of state-organised coercion in Britain. Beijing bears the burden of proof. In the absence of verifiable guarantees which eliminate capacity – not merely intent – to repress, Whitehall should reject the application, and record such a decision on the grounds of national security and civil liberties.

Grace Theodoulou – Policy Fellow, China Observatory
Email: grace@geostrategy.org.uk

If you would like to explore any of the Council on Geostrategy’s PRC-focused research papers, click here to visit the China Observatory.

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This is the eighth Tangram from Observing China, where the leading China experts give a diverse range of succinct responses to key questions on the development of the People’s Republic of China (PRC).

Beijing’s political and governance system is notoriously complex, and somewhat deliberately so. Authoritarian regimes rely on the ambiguity of their rules and regulations to keep people in line. Even if you want to circumvent an oppressive system, how can you successfully evade punishment, when much of the time you do not even know what would elicit it?

As much as foreign experts of the People’s Republic of China (PRC) may caution their respective governments and industry executives on the difficulties involved in undertaking legal or business cooperation with the PRC from the outside, the truth is that many Chinese citizens are kept just as in the dark.

But surely for the country to function domestically and internationally, there is some knowledge of the Chinese Communist Party’s (CCP) playbook? Where is that information hidden, and where should we look for it? How has it changed under Xi Jinping, General Secretary of the CCP?

In this week’s Tangram, I asked four experts to share their tips, gleaned from entire careers dedicated to understanding where the power really lies in the PRC; the only country that Elbridge Colby, Under Secretary of Defence for Policy in the United States (US), believes has ‘the ambition, resources and military might to knock the United States off its pedestal as the world’s leading superpower.’

Geremie R. Barmé

Editor of China Heritage and co-founder of The Wairarapa Academy for New Sinology

When commenting on scholar Wu Guoguang’s insights into the PRC’s political black box, I quoted Frederick Teiwes, a respected expert on the inner workings of the CCP. He observed that:

The dominant contemporary Western scholarly assessments of Chinese Communist Party elite politics in almost every period of the history of the People’s Republic of China have been either dramatically wrong, or a very mixed bag, or in critical respects speculation that cannot be verified on existing evidence. Moreover, in some important cases erroneous findings have remained conventional wisdom even as new information and analysis has appeared, supporting alternative interpretations.

Little has changed, even as ‘China Watching’ enjoys something akin to a Golden Age.

How then to get to grips with the PRC today? First, study what Isaiah Berlin called ‘the artificial dialectic’ and thereby better appreciate the art of leadership pursued by Xi and his predecessors. Secondly, build up an understanding of what, decades ago, Simon Leys called ‘the lugubrious merry-go-round of Chinese politics’. Given that there are so many unknown unknowns in the equation, by and large the student of contemporary China will try to make sense of known knowns, albeit with a wink and a nod. Will Artificial General Intelligence (AGI) prove to be a deus ex machina? If nothing else, it certainly will generate beguiling hallucinations.

The ultimate ‘known known’ is that, sooner or later, biological attrition will see off Xi. Then, for a moment at least, the black box of Chinese politics will disgorge some of its contents.

Edward Schwarck

PhD Candidate, University of Oxford

Secrecy is the hallmark of Leninist systems – but so is an extensive bureaucracy which produces vast volumes of paperwork. Scholars describe politics in the PRC as the ‘rule of documents’ – as opposed to the ‘rule of law’ – as power runs through directives issued by party leaders, not an independent legal system. Officials in the PRC are also prolific essay writers. Text is used to signal policy shifts, demonstrate compliance or attract the leadership’s attention to lower-level innovation and creativity. Official output of all kinds is compiled in yearbooks, statistical databases and policy compendiums, much of which is available online.

As research into the PRC’s intelligence agencies shows, these resources can shed light on even the most secretive areas of politics. The best material does not usually come from the central government, where secrecy regulations are carefully enforced, but local governments, who may have a hazier sense of what constitutes sensitive information. As local leaders operate at arm’s length from Beijing, and control their own publishing outlets, leakage from these sources is more common. For example, those seeking to understand the functions of the PRC’s secretive National Security Council may find little in centrally run outlets, but a trawl through local government websites yields surprising results.

For researchers with Chinese language skills, research expertise and the ability to decipher the party-speak of official documents, text-based resources offer good insight into the workings of the PRC’s political system. Unfortunately, in recent years, Xi’s government has enforced tighter censorship and monitoring of key online databases, such as the China National Knowledge Infrastructure (CNKI). However, given the enormity of the country, its reliance on internet-based knowledge and communication, and the autonomy of local officials, Beijing will struggle to control information flows completely. To use a Chinese adage: ‘The mountains are high and the emperor is far away.’

Philippa Jones

Founding Partner and Managing Editor, China Policy

In major policy sectors – take energy, environment, health and education – the short answer is ‘no’. Indeed, counterintuitively, if you look at the policy process, the PRC can even be more transparent than a multiparty state.

Serious followers of the CCP administration must consume a fire hydrant of policy documents and commentary which pours out of Beijing day in, day out. Such organisations are proof that it is far from impossible to track, map and analyse major PRC policy sectors.

How does the PRC policy process differ? Broadly speaking, major social and economic legislation often traces an arc from beginnings in thinking among the academic and research community to five-year plan research agendas set by the state. Ideas then go through sometimes robust deliberation and drafting when the broader policy community and officials sit down together to nut out new laws and policies for final ratification by the State Council. Throughout this process, ideas and positions are often aired in the press or expert literature.

In multiparty states, a party in power must prevent opposition parties from gaining prior knowledge of its policy intentions. It therefore develops its policies under strict security, only announcing new ones when fully ready to release them for public comment.

So, how to be alert to next moves in the PRC? It isn’t rocket science: monitor downstream regulatory and legal notices, and map connected agencies, commentators and officials. Move back upstream, track what they are discussing, and you will likely gain insight into what may drop next.

There’s a major catch: it is mainly in Chinese, although the language barrier is not as total as it used to be. With a modicum of application, current technology can help.

But there’s another catch: what does it all mean? Deciphering, interpreting and then digesting is often the biggest hurdle. In 2015, Beijing issued a policy: ‘Made in China 2025’, which sets out its innovation plans for the next ten years. Under a deluge of adverse global coverage, Beijing went quiet on the name but not the policy. We never stopped tracking the sector. A decade later, governments and businesses worldwide are scrambling to contain Beijing’s tech onslaught. Did it come out of a black box? Could governments and businesses have tracked what was about to happen and have been better prepared for it? They sure could.

Roger Garside

Roger Garside is a former British diplomat and capital markets adviser to transition economies.

On 7th April 1976, Deng Xiaoping was dismissed from all his offices, accused of masterminding the anti-Mao demonstrations which had gripped Beijing for the past week. My ambassador summoned me to his office and asked: ‘What now, Roger?’

‘Deng will return to power and rule China’, I replied. And he did.

This totalitarian regime is secretive, and its inner workings are opaque, but the PRC is not a black box. In the 67 years since I began to study the PRC, there have been periods of greater and lesser openness, but the broad outlines of its strategies have always been on public display. Careful study of the facts, and judgement formed by front-line work on economic and political change, allow us to understand the dynamics which shape developments there.

So we know that when Xi came to power in 2012, he judged that the time had come to challenge the global leadership of the US and its allies. As a result, he has condemned the PRC to an alliance of convenience with three pariah states – Russia, Iran and North Korea – forming the ‘CRINK’. That tells us much about the quality of his judgement.

Already in 2007, Wen Jiabao, then Premier of the PRC, declared that the country’s economy was ‘unstable, unbalanced, uncoordinated and unsustainable’. Since then, the debt mountain has grown, the property market has collapsed and the crisis of funding in local government (responsible for 80% of public expenditure) has proved insoluble. No black box could hide these systemic failures.

Now, some predict that the totalitarian regime which rules the PRC will, before long, be overthrown in a political revolution. The book China Coup: The Great Leap to Freedom, published in 2021, laid out the facts which have led to that prediction. Exactly how or when this revolution will come we cannot say, but come it will.

Grace Theodoulou – Policy Fellow, China Observatory
Email: grace@geostrategy.org.uk

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This is the seventh Tangram from Observing China, where the leading China experts give a diverse range of succinct responses to key questions on the development of the People’s Republic of China (PRC).

Recently, a senior official in His Majesty’s (HM) Government broke their characteristically balanced views on Beijing by expressing very firm and very genuine discontent with the Chinese Communist Party’s (CCP) integral role in prolonging Russia’s full-scale invasion of Ukraine. I had asked the official, a senior figure in the Foreign, Commonwealth and Development Office (FCDO), how HM Government aims to square the Russia circle in its rapprochement with Beijing. In their response, the official clarified that HM Government rebuts Beijing’s denial of its involvement in the conflict and quoted the then-fresh statistic that the People’s Republic of China (PRC) had provided 70% of the machine tools and 90% of the legacy chips to aid Russia’s war machine.

The official in question assured me that the United Kingdom (UK) will not shy away from confronting Beijing on its military and technological support of Russia’s aggression against Ukraine in future UK-PRC interactions. But what will happen in these relations now that Beijing is no longer hiding its interests in the conflict?

On 2nd July, Wang Yi, Foreign Minister of the PRC, visited Kaja Kallas, the High Representative of the European Union (EU) for Foreign Affairs and Security Policy, in Brussels. Wang dropped something of a bomb by revealing that it is not in Beijing’s interests for Russia to lose in Ukraine.

According to the report in the South China Morning Post, Wang stated that the longer the conflict in Ukraine continues, the less the United States (US) can focus on the Indo-Pacific – the region which Pete Hegseth, US Secretary of Defence, has called the ‘priority theatre’ for Washington. The Pentagon’s wish to focus on the Indo-Pacific is largely born of a desire to contain the PRC’s regional military aggression.

The CCP had sworn neutrality in Russia’s illegal invasion of Ukraine, and Wang’s words last week are uncharacteristically ‘candid’ and ‘frank’, to use the favourite words of the party.

So we asked the experts: what does Beijing’s admittance of its interests in Ukraine mean for the bilateral relationship with Britain? Or rather, what should it mean?

Charles Parton OBE

Chief Adviser, China Observatory, Council on Geostrategy

On 2nd July, Wang Yi told Kaja Kallas that Beijing did not want Russia to lose in Ukraine because it feared that the US would then concentrate its attention on the PRC. The surprise is Wang’s candour, rather than the content of his remark; its timing, three weeks before the EU-PRC summit; and its likely negative effect on the aim of detaching Europe from its American allies. Unsurprisingly, Wang went on to deny that the PRC was supplying the Russians with weaponry.

It is possible, if unlikely, that Wang, being human, lost patience. Whatever the explanation, it demonstrates the CCP’s extraordinary lack of understanding of the EU and UK positions, and of the importance of Ukraine to relations with the PRC. It also underlines CCP willingness to abandon its principles (in this case, on sovereignty) in pursuit of its geopolitical interests. Those interests centre on its long-term ideological and power struggle with the US for global supremacy. Support for Russia is to help ‘the enemy of my enemy’.

For Britain, this is yet another wake-up call on the hostile intentions of the CCP, even if David Lammy, Foreign Secretary, is right to say in his statement on the ‘China Audit’ that: ‘not engaging with China is therefore no choice at all.’ Noticeably, his statement did not include the word ‘Ukraine’.

In December 2023, the previous government put sanctions on three Chinese companies for helping Russia’s war industries. The current government added a further ten in February this year. It should build quickly and stalwartly on this baseline. It should also call the PRC out more loudly for its support for Russia. Quiet words fail to disquiet the CCP; megaphone diplomacy can be effective. The message should ring out loud and clear: ‘Mr Wang Yi, the UK desires good relations with the PRC, but they can only be built on respect for international law and norms, on acceptance that the future of Ukraine is integral to the security of Britain and the EU, and on a recognition that security will always be our government’s top concern.’

Dr Sari Arho Havrén

Associate Fellow, Royal United Services Institute

Wang Yi made an unusually explicit admission in private talks with Kallas: the PRC ‘cannot afford’ for Russia to lose in Ukraine. This statement – which diverges starkly from the PRC’s longstanding position of ‘neutrality’ – signals that Beijing’s strategic interests are invested in the outcome of the invasion of Ukraine. A protracted conflict which diverts US attention from the Indo-Pacific aligns with Beijing’s geopolitical priorities and reinforces the ‘no-limits’ partnership declared by Xi Jinping, General Secretary of the CCP, and Vladimir Putin, President of Russia, in early 2022.

Despite its public denials, Beijing has been linked – via North Atlantic Treaty Organisation (NATO) and Ukrainian intelligence – to commercial entities enabling Russia’s war effort. The UK has emerged as a strong supporter of Ukraine, and last month’s National Security Strategy identified Russia as the primary military threat, labelling the PRC as a ‘persistent and systemic challenge’ to national security, economic integrity and democracy. British intelligence has repeatedly warned of Chinese espionage, cyber and sub-threshold operations.

Wang’s statement thus exposed a stark division of fundamental interests: the UK is committed to supporting Ukraine’s sovereignty while, economically, HM Government’s policy remains one of ‘progressive realism,’ recognising Beijing as an essential commercial partner. The rationale is that Britain cannot afford to cut itself off from Chinese markets, capital and supply chains – even as the risks of economic dependency grow more apparent through disruptions, such as the PRC’s rare earth export restrictions and predatory investments.

Managing this dissonance may itself turn into a geopolitical risk. On the one hand, the UK is consolidating alliances with other like-minded democracies, navigating ties with Washington, strengthening NATO and AUKUS, moving closer to the EU and redoubling efforts to reduce strategic vulnerabilities to authoritarian states. However, due to security concerns and the growing realisation of the PRC’s strategic intentions, the EU, for instance, has increasingly aligned itself with the administration of Donald Trump, President of the US, on the PRC. It has also sharply escalated its criticism, not just of Beijing’s support for Russia, but also of trade frictions and broader geopolitical concerns.

This may signal a growing strategic gap on the PRC between Britain and its closest allies. The explicit nature of Wang’s comment makes it even harder to manage the gap and continuing to bet on the PRC as the economic lifeline for the UK.

Leon Sinfield

PhD Candidate, London School of Economics and Political Science

The implications of Wang Yi’s reported statement for UK-PRC relations will depend on how it is interpreted in Westminster. While some observers have understood the statement to indicate that Beijing desires a Russian victory, Wang’s emphasis was on Russia not losing. If, as reported, Beijing’s preference for the conflict’s outcome is driven by a desire for American resources to be tied up in Europe, there are reasons to question whether Beijing would welcome Russia coming out on top in Ukraine. The Trump administration is evidently interested in reaching a comprehensive settlement on European security with the Kremlin, believing that this would allow it to draw a line under its competition with Russia, reduce its commitment to Europe, and shift resources to the region it cares about most: the Indo-Pacific.

The main sticking point between the US and Russia so far has been the question of how to resolve the situation in Ukraine, but if the conflict were to end – even by a Russian victory – this issue would be taken off of the table. While many Europeans warn that a Russian triumph would lead Moscow to put NATO’s Article 5 to the test, the Trump administration clearly does not view this as a realistic scenario.

While we cannot be sure of the strategic logic behind Beijing’s thinking, the plausibility of the above scenario casts doubt on the idea that the PRC wants to see a Russian victory. Wang’s reported statement merely demonstrates what was already clear – that Beijing does not want to see Russia defeated – and British policymakers will therefore likely see no reason to rethink the UK’s recent cautious efforts to improve its relations with Beijing.

Danielle Reeder

Freelance Security and Defence Consultant

Wang Yi’s statement pulls the PRC’s ambitions for not only Taiwan, but also the entire South China Sea, into imminent perspective. Although it has been hitherto rare for Beijing to make such strikingly partisan statements, the tide of neutrality has ebbed. The dynamics of international normativity shift, and any consensus on the rules-based international order deteriorates.

The PRC’s military behaviour is changing, but its underlying ethos is not. The steady thread of Chinese foreign policy is, and will continue to be, preservation of the PRC. Supplying Russia with defensive support – however material – is not done out of a sense of camaraderie, but rather due to a degree of existential concern. As stated, the motivation for Beijing’s current posture considers the warming contest with the US more than a sworn ideological position on Ukraine.

However, that does not dismiss the troubling implications of the PRC’s now-stated stance on the Russian invasion of Ukraine. Even if Beijing’s motivations are not driven by an ideological stance, it enters a space of a wanton disregard for the international peace and stability upon which the PRC itself relies. There is a slight unpredictability to the Chinese military projection, as perceived threats are difficult to measure. Although Beijing’s core interests are in the Indo-Pacific, its wider interests lie in a shifting global order. Combined with the PRC’s disregard for established sanctions regimes, direct and indirect support to the Houthis in the Red Sea, and aggressive multifaceted espionage campaigns across Europe, Beijing aligns with an axis diametrically opposed to British interests.

After years of courting Moscow, Beijing’s intentions cannot be viewed as unexpected. What changes, however, and what the UK must navigate, is a regional alteration in a de facto balance of power, as well as new developments in proxy warfare. The PRC has gauged that its activity will be rewarding. Britain cannot influence this presumption through force. It can, however, maintain an informed relationship with the PRC, and get better at speaking Beijing’s language.

Grace Theodoulou – Policy Fellow, China Observatory
Email: grace@geostrategy.org.uk

If you would like to explore any of the Council on Geostrategy’s PRC-focused research papers, click here to visit the China Observatory.

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This is the sixth Tangram from Observing China, where the leading China experts give a diverse range of succinct responses to key questions on the development of the People’s Republic of China (PRC).

From Beijing’s critical role in supporting and elongating Russia’s full-scale invasion of Ukraine, to its ‘unprecedented nuclear expansion’, the Strategic Defence Review (SDR), published on Monday, did not hold back from presenting how the People’s Republic of China (PRC) works against the interests of the United Kingdom (UK).

But how capable is His Majesty’s (HM) Government of enacting the suggestions made in the SDR on the PRC front? Were there other recommendations which could have been made? We ask four experts to answer.

Dr Emma Salisbury

Research Fellow on Sea Power, Council on Geostrategy

HM Government’s engagement with the PRC needs a proper strategic underpinning. At the moment, the need for Britain to engage with the PRC as an economic behemoth appears to be clashing with the national security side of the coin, and the SDR highlights this. The Review’s (correct) characterisation of the ways in which Beijing is acting stands in contrast to HM Government’s otherwise stated desire to work with the PRC on trade and climate issues.

While it would be both naïve and counterproductive to suggest that the UK should not engage with the PRC, or find ways to cooperate multilaterally on big global issues, the SDR’s exploration of the ongoing Chinese military buildup and Beijing’s increasing belligerence – both regionally and globally – remind us that economic and environmental engagement cannot take place without this backdrop in mind. We will have to wait until HM Government’s ‘China Audit’ is published for a deeper understanding of how this tension will be reconciled going forwards. But, without a broad strategy which stretches across all types of engagement with the PRC, the UK risks scenarios where the military and national security approach to Beijing and the economic and environmental approach to Beijing are not only incompatible but undermine each other, which would be potentially damaging to British interests.

A well thought out and broadly implemented PRC strategy which covers all areas of mutual interest will bring cohesion to HM Government’s engagement across departments. That strategy should start with the national security concerns highlighted in the SDR. The PRC is challenging the interests of the UK and its allies, and no amount of trade deals or climate agreements should be permitted to obscure that fact.

Andrew Yeh

Executive Director, China Strategic Risks Institute

The SDR has much to say about Beijing’s conventional threats, but little on its ‘sub-threshold’ or ‘grey-zone’ capabilities. The PRC’s nuclear expansion and rapidly advancing space capabilities are, of course, deeply concerning long-term challenges which require serious attention. However, so long as direct military confrontation with the PRC seems unlikely in the short term, Beijing’s sub-threshold operations present the more immediate threat.

As it is demonstrating with enthusiasm across the Taiwan Strait, the PRC has a full range of capabilities in its sub-threshold toolkit – from cyber attacks to undersea cable sabotage and disinformation campaigns. Beijing’s willingness to conduct cyber attacks against Britain has been known for some time, with the PRC labelled as the ‘dominant’ hacking threat by UK officials. More recently, the involvement of Chinese ships in a series of suspicious undersea cable breakages in the Baltic Sea has raised concerns about whether the ‘no-limits’ strategic partnership between the PRC and Russia extends to coordinating sub-threshold attacks in Europe. Both Beijing and Moscow increasingly see the Euro-Atlantic and the Indo-Pacific as a unified security domain, with the two countries staging joint exercises from the South China Sea to near Alaska. The likelihood of the Arctic and Wider North being seasonally ‘ice-free’ by 2040 only exacerbates this challenge.

Further work is needed to secure Britain against the PRC’s sub-threshold threats. The SDR’s proposal to establish a CyberEM Command is a positive step. However, details on undersea infrastructure protection remain scant. Under current laws, the Royal Navy does not even have the authority to detain vessels suspected of damaging undersea infrastructure outside of the UK’s territorial waters. While maritime surveillance infrastructure is well set up to detect conventional threats, identifying suspicious activity among the thousands of commercial vessels passing through Britain’s busy sea lanes every day is far more challenging. Learning from Taiwan – which has developed a range of robust responses to Beijing’s sub-threshold activities – is critical.

Owen Au

Independent Researcher

The SDR identifies the PRC as a ‘sophisticated and persistent challenge.’ While it appears to be more measured than terminologies such as ‘threat’ or ‘adversary’ – both of which are applied elsewhere in the document – the SDR nonetheless sensibly signals a serious appraisal of the risks posed by the PRC to the UK’s national interests, in which the PRC’s growing alignment with Russia (an ‘immediate and pressing threat’ to Britain) is among the top concerns.

Such recognition is critical, especially when HM Government is navigating an increasingly complex and contested global landscape. However, a gap remains between this strategic assessment and domestic policy posture. While the UK’s trade with the PRC is modest compared to that with Euro-Atlantic partners, the PRC retains considerable leverage in the British economy. State-linked Chinese entities continue to hold stakes in critical infrastructure, and Chinese technologies are deeply embedded in the UK’s energy and transport systems, raising legitimate concerns about dependency, supply chain resilience and cybersecurity.

Furthermore, Britain hosts the highest number of Confucius Institutes globally, despite sustained criticism that these institutions function as instruments of state-backed influence. While the SDR underscores growing coordination among the PRC, Russia, Iran, and North Korea, Chinese organisations remain outside the ‘Enhanced Tier’ of the Foreign Influence Registration Scheme (FIRS). In contrast, Russia and Iran are already designated under this more restrictive category, allowing PRC-affiliated actors comparatively greater latitude to engage in political activities within the UK.

Diplomatic engagement presents additional contradictions. The resumption of UK–PRC strategic and economic dialogues earlier this year, and the expected approval of a new Chinese embassy in London, alongside the plan to revive the UK-China Joint Economic and Trade Commission (JETCO), risk sending mixed signals in contrast to the SDR’s more cautious stance.

Resolving these inconsistencies will require a more coherent, cross-government approach. The forthcoming ‘China Audit’ presents a timely opportunity to align departmental perspectives and policy instruments. Both the country’s Indo-Pacific engagements and the significant Hong Kong diaspora communities, many of whom resettled in Britain following the PRC’s crackdown on the city’s democratic movement, present an asset to HM Government’s work towards a more consistent and integrated China policy across defence, domestic resilience, education and economic strategy.

Robert Clark

Fellow, Yorktown Institute

This year’s SDR presented in more clarity than previous years how the PRC is actively working against British interests, from its role in supporting and extending Russia’s full-scale invasion of Ukraine to the long-term challenge of its ‘unprecedented’ nuclear expansion’.

The PRC’s military support to Russia has enabled the war machine of Vladimir Putin, President of Russia, to continue unabated: 70% of the machine tools and 90% of the microelectronics Russia imports come from the PRC. Beijing also exports more than $300 million (£221 million) worth of dual-use items to Russia each month, and is also widely suspected of providing satellite intelligence to the Russian military.

The SDR could have mentioned how the UK can counter both the PRC’s continued disregard for international sanctions against Russia, and how to regain diplomatic support from countries seeking closer alignment with the evolving alliance between Moscow and Beijing.

Also, while Beijing continues to challenge strategic stability and nuclear non-proliferation, allied assurance will become more complicated. The SDR correctly identifies that Britain should work closer with the United States (US) to maximise the relationship’s potential as a force multiplier to combat the challenges which the PRC poses in the Indo-Pacific.

The SDR also correctly identified that the UK must leverage its network of allies and its overseas bases, particularly connecting the Euro-Atlantic with key partners across the Indo-Pacific. Recent deployments with the Five Power Defence Arrangement is a great start.

Regrettably, however, uncertainty remains regarding the Chagos Archipelago deal with Mauritius (which holds close relations with the PRC), especially concerning the access to the electromagnetic spectrum of the military base on the island of Diego Garcia. Britain’s handover of the Chagos Archipelago threatens to undermine the SDR’s aspiration to leverage overseas bases.

Ultimately, given the limited, increasingly burdened, and now post-2029 uncertain spending envelope, the UK may struggle to develop a genuinely credible ‘North Atlantic Treaty Organisation (NATO) First’ military while simultaneously acting as a force multiplier to the US in renewing deterrence in the Indo-Pacific. Achieving both ambitions will require a firmer commitment of spending levels into the next decade.

Grace Theodoulou – Policy Fellow, China Observatory
Email: grace@geostrategy.org.uk

If you would like to explore any of the Council on Geostrategy’s PRC-focused research papers, click here to visit the China Observatory.

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This is the fifth Tangram from Observing China, where the leading China experts give a diverse range of succinct responses to key questions on the development of the People’s Republic of China (PRC).

In late 2024, His Majesty’s (HM) Government commissioned a ‘China Audit’ – in other words, a comprehensive assessment of the United Kingdom’s (UK) relationship with the People’s Republic of China (PRC). This assessment, which published a call for evidence from the public, is led by the Foreign, Commonwealth and Development Office (FCDO), and aims to provide a coherent, cross-government strategy for Britain’s approach to the PRC, based on an audited review of the benefits and risks of bilateral engagement and investment.

Initially, the Audit was scheduled for release in the spring of 2025, with no specific date given. But, according to a report by Reuters last week, the Audit will be published in ‘early June’ – so in the coming weeks, if there is no delay.

But will there be a public version, as there was with the Integrated Review Refresh (IRR) – the policy paper published by the Cabinet Office, akin to a national security strategy – in 2023? And if so, what aspects of the bilateral relationship should be covered by the Audit? In this week’s Tangram, we ask four experts, who have spent their careers analysing UK-PRC relations, the question all PRC experts have been pondering since late last year: What should the ‘China Audit’ include – and should there be a public version?

Charles Parton OBE

Chief Advisor, China Observatory, Council on Geostrategy

The second part of the question is easier to answer: yes, a published PRC strategy is important. The PRC affects most ministries, making consistency across departments essential. The vetting of most civil servants does not allow them to read documents classified as secret; and any document classified at the lower, widely available level of ‘official sensitive’ will leak. It is better to be open (although a few elements of a strategy will have to remain classified). Beyond government, business, academia, society – and the Chinese – the public need to understand the background and reasons for policies towards the PRC. For example, in the crucial technology sector, startups and academics cannot be expected to know and understand the limits of cooperation if a strategy does not set out the reasons for restrictions clearly.

As for the content of the ‘China Audit’, it must fulfil ministers’ pledges that national security is HM Government’s top priority. The big challenge is reconciling that with economic growth and combatting climate change. Laying out and implementing policies requires the right structures to be in place. In turn, those must be able to draw on deeper PRC expertise, from both inside and outside HM Government.

This suggests four priorities for the Audit:

• Setting up a cabinet level ‘China committee’, chaired by the senior Cabinet Office minister or the National Security Adviser, and attended by ministers of all departments to which the PRC is relevant.

• Establishing a Scientific Advisory Committee, a centre of expertise on science and technology security – the main area of threat – to coordinate the planning and implementation of protective measures across government, business and academia. This would be the ultimate authority for deciding on Chinese investment, cooperation, use in the UK economy, etc., in the science and technology area.

• Adopting a whole-of-UK approach to combat the much-used Chinese Communist Party (CCP) tactic of going round the back of central governments and dealing directly with local governments, which are often less aware of CCP issues and methods.

• Raising expertise on the PRC within the central and local government. This requires wider and deeper training of those in PRC-facing jobs, closer collaboration with PRC experts outside government (including consultations on policy) and a more efficient use of funding to think tanks and universities carrying out research for ministries.

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Isabel Hilton OBE

Member of the Advisory Council, China Observatory, Council on Geostrategy and Visiting Professor at King’s College London

Few would quarrel with the objective of the ‘China Audit’: in a radically changing global landscape – and following sometimes extreme shifts in the UK’s own approach – a thorough review of the risks and benefits of this key relationship to produce clarity on British priorities was clearly to be welcomed.

It would be no surprise, however, if the exercise revealed tensions between the importance of being wide-reaching and the requirement for strategic discretion.

Since the PRC is the world’s second largest economy, contacts with the UK operate across culture, the economy, education, industry, science and security. If meaningful guidance is to reach all the people who deal with Beijing, many of whom will have little or no background in the PRC’s language, history, culture or current political realities, there is a clear case for the Audit to be wide-ranging, comprehensive and public.

On the other hand, if it is to offer practical, strategic guidance on how to navigate the complexities of the relationship, there will be analysis and observations which would best be kept close. Every aspect of Britain’s current policy – challenge, compete, cooperate – has grown more complicated in the last five years. Protecting national security in a digital world dominated by Chinese technology – alongside the PRC’s close relationship with Russia – presents challenges which barely existed a decade ago. Alignment with partners is more fraught as alliances shift and Donald Trump, President of the United States (US), seems bent on undermining those which exist. Uncertainty in both renders engagement subject to greater risks on multiple fronts.

Given that none of these complications are likely to diminish in the near term, a useful contribution the Audit could make in the public aspect of its work would be to encourage HM Government to build on the existing commitment to nurture and invest in UK expertise on the PRC at every level. Chinese diplomats and business people frequently possess a solid background in English language and related skills. There is a large disparity in size between Britain and the PRC. It should not be amplified by a disparity in expertise.

George Magnus

Member of the Advisory Council of the China Observatory, Council on Geostrategy

In setting a PRC strategy, the government needs to be unequivocally clear about two things: Britain’s geopolitical, economic and security interests in a fracturing world; and where these might be undermined by the practices, policies and ambitions of the CCP. The narrow business and economic related interests of, say, HM Treasury or the Department of Business and Trade alone need to be subordinated to a whole-of-government approach involving all the main ministries, especially Defence, National Security, and the Department for Science and Innovation. An Audit which comes up short on these two central ideas will not be a serious attempt to define the UK’s PRC strategy.

The Audit should insist that Britain is open to, and up for, commercial and other engagement with the PRC, provided it does not cross economic and national security red lines. It should emphasise in which areas of certain sectors – for example, critical infrastructure, advanced technologies, power and energy, transportation including electric vehicles, and science and research collaboration – it is important to exclude the PRC from ownership, participation and acquisition, and why. There should be a particular focus on the UK’s vulnerabilities to supply chain chokeholds, cybersecurity and other data security matters, and important areas for Britain to build resilience and relations with ‘friendly’ states.

The Audit should state firmly that the PRC is not simply a large country with which it is important to have a framework for commercial relations, but an adversary pursuing its own strong interests in global governance, standards, values, protocols and interactions with other nations – which often conflict with the UK’s.

This would help to frame policies and goals, and add substance to HM Government’s bland ‘challenge, compete, cooperate’ mantra.

There should certainly be a public version to contextualise and explain to the public much about the PRC where levels of familiarity and insight are low, and why certain areas are open for business or involvement and some are not.

Sam Goodman

Senior Director of Policy, China Strategic Risks Institute

It is my view that HM Government’s ‘China Audit’ has been superseded by several ministerial visits to Beijing, and by the Trade Agreement between Britain and the US. The latter includes provisions which require the UK to align with the US on its PRC policy regarding economic security, data security, forced labour supply chain screening and procurement screening.

This makes it all the more important for any China Audit to address firstly the historic Chinese investment in Britain’s critical national infrastructure. Secondly, it should create a funding pipeline to bring outside expertise on the PRC into government, separate from the civil servant recruitment process. Finally, the Audit should provide a full account of the UK’s supply chain dependencies on the PRC.

Apart from the sensitive sections in the Audit pertaining to national security, there is little reason why it should not be published, and the public brought along in support of a clear-eyed PRC strategy.

The Audit offers an opportunity for HM Government to clarify how its PRC policy will be coherent, while also in line with the commitments made earlier this month to the US – Britain’s closest partner in the recent bilateral trade agreement. As well as this, the Audit provides an opportunity for the government to outline what steps it is taking to protect growth, reindustrialise and ensure resilience in a geopolitical world which is increasingly unstable – and one where many analysts have concluded that there is a significant possibility that under the orders of Xi Jinping, General Secretary of the CCP, the People’s Liberation Army – the PRC’s armed forces – may invade Taiwan within the next few years.

Grace Theodoulou – Policy Fellow, China Observatory
Email: grace@geostrategy.org.uk

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This is the fourth Tangram from Observing China, where the leading China experts give a diverse range of succinct responses to key questions on the development of the People’s Republic of China (PRC).

Three quarters of African countries now have their police forces trained by the Chinese Communist Party (CCP). Across the Indian Ocean, Beijing has significant control over major ports. In Latin America, the People’s Republic of China (PRC) has funded a ‘megaport’ in Peru that has the potential to create new trade routes which would bypass North America entirely.

How can the United Kingdom (UK) and its allies cooperate to ensure their presence is maintained in the so-called ‘Global South’ – a term broadly referring to the regions of Africa, Latin America, Oceania and Asia? The responses of five experts consider how Britain can use its strength in energy, aid, agriculture, education and diplomacy to ensure a balance of influence.

Isabel Hilton OBE

Member of the Advisory Board, China Observatory, Council on Geostrategy and Visiting Professor at King’s College London

The UK can compete with the PRC’s influence in the Global South should it so choose. Whether it can compete successfully is another matter. The CCP has spent decades building influence in the Global South as Britain retreated – efforts which began in the 1950s with the claim of solidarity as a fellow victim of Western imperialism and colonialism. In that role, Beijing supported, trained and financed insurgent groups in a range of anticolonial struggles.

In the post-Mao era, the effort shifted to economic influence. Today, the PRC is the biggest trade partner and builder of infrastructure across Africa, Southeast Asia, Latin America and Central Asia. This investment has been accompanied by major investments in soft power.

Since the 2008 Olympics, Beijing has built a global media empire which is charged with ‘telling China’s story well’. CCP media such as Xinhua, China Daily and global broadcasting network China Global Television Network (CGTN) have benefitted from huge state investment, and now supply news services across the Global South. As a recent article puts it: ‘China has sought to erode [the free and open nations’] narrative hegemony by gaining influence in the Global South.’

The PRC’s investment budget has shrunk as the mixed results of the first three years of the Belt and Road Initiative (BRI) gave way to greater caution. Smaller, more targeted projects and a focus on shifting from funding fossil fuels to green infrastructure are now priorities.

In this unequal contest, the UK is some way from being a serious contender. The PRC has invested heavily in critical sectors such as mining and telecommunications. In 2022, its trade with Africa exceeded $282 billion (£222 billion), while UK-Africa trade was approximately $46 billion (£36 billion). Diplomatically, the PRC leads a suite of minilateral initiatives, including the Forum on China-Africa Cooperation (FOCAC), which convenes African leaders in regular summits; the Community of Latin American and Caribbean States (CELAC), which does the same in Latin America; the Shanghai Cooperation Organisation (SCO) in Central Asia; and the ever-expanding BRICS.

The PRC’s relationships in the Global South are not perfect, but an effective challenge would demand robust partnerships – with European neighbours, for example – and a reversal of Britain’s retreat from soft power. Utilising the BBC World Service and the British Council, scholarships for tertiary education, and support in multilateral fora for such issues as the energy transition in the Global South, access to blended finance and the kind of investment which adds value rather than simply extracts, would be a good start.

Jack Richardson

Associate Fellow, Council on Geostrategy

From an energy and environmental perspective, the UK needs good relationships with key countries in the Global South. Though in reality very far from a homogenous group of countries, there are valuable relationships to be nurtured. And for more fragile countries, especially in critical regions, stabilisation will still be important for Britain’s national interests as an island nation dependent on seaborne trade, even if there are fewer financial resources for it.

Regarding energy, economics and trade, the PRC’s predominance over clean tech and electric supply chains needs to be solved constructively, not ignored. Oil – and certainly gas – provide the UK with diminishing energy security and uncertain affordability. It would be unwise to forgo better technologies just because the PRC has built up a strong position through consistent policy over decades while Britain has not. The PRC’s strength is in processing and manufacturing; it does not have a monopoly over resources, which it generally imports from other countries. Good relations and trading relationships with those countries, often in the Global South, is critical for supply chain diversification, which is in everyone’s interest, but especially the UK’s as an increasingly fossil fuel-poor island.

Stabilisation and climate adaptation will also be critical to mitigate the consequences of climate change, which will hit the most fragile states the hardest. One only needs to look at the causes of the Syrian civil war – which had very real ramifications for Britain’s national security – to see that environmental pressures can cause real conflicts. The cuts to foreign aid apparently have limited impact on climate aid, but that does not mean climate aid itself should not be reformed. Energy access is crucial for some of the poorest communities, but in terms of mitigation of global climate through energy transition, financing the UK’s aid spending barely registers. There should be greater focus on disaster preparedness and state capacity building through more accountable, potentially much speedier mechanisms than the United Nations (UN), such as the Commonwealth, to maximise finance and results for partner countries in the Global South.

James Keeley

Honorary Associate, Institute of Development Studies

His Majesty’s (HM) Government’s approach to the PRC is to challenge, cooperate or compete (the ‘three Cs’) depending on the issue and the context. Research by AidData in 2023 found that Beijing is largely well-regarded in the Global South, and more so than the UK and United States (US) overall. This is a key starting point when thinking about how Britain should engage on PRC-Africa issues. It is a mixed picture, of course, and attitudes to Beijing differ depending on the issue – the UK does better on governance and environment in the AidData research.

For agriculture in Africa, the PRC is valued as a source of training and education, technologies, infrastructure investment – roads connecting farmers to markets are the single best intervention for farmer livelihoods – and as a gradually improving market for exports. Hundreds across Africa are trained each year in the PRC’s agricultural universities and research institutes.

Fish farming is an example of an area where African experts and businesses have learned from the PRC’s development in a sector. In a recent study tour, East African participants wanted to understand Chinese strategies and investments for developing the sector, given the importance of farmed fish as a source of animal protein in their region. The delegation noted how Chinese smallholder production techniques and low-cost equipment, such as pond aerators – which increase oxygen levels and allow for higher stocking rates – could make a practical difference to their production systems.

Climate change is already having devastating impacts across Africa, including on food production. In response, urgent action is needed to support resilient productivity improvements. The UK is helping to build adaptive capacity through climate smart agriculture programmes, such as Propcom+ in Nigeria. This is important, although impact will likely be reduced following the recent aid cuts. Partnership and collaboration – the ‘cooperate’ in Labour’s three Cs – will also be needed. Where possible, British researchers, businesses and practitioners should engage with Chinese agencies on African agricultural climate resilience where cooperation and exchanging ideas can deliver practical benefits. This pragmatic approach is most likely to be appreciated by African partners, with subsequent benefits for relationships with the UK.

Thomas Nurcombe

Senior Researcher, Coalition for Global Prosperity

The so-called ‘Global South’ is the foundation for the strategic objectives of Xi Jinping, General Secretary of the CCP. Through the BRI, the PRC has been able to shift global alignments in its favour, with fewer nations calling out Beijing’s human rights abuses. The PRC is also supporting its ambitions for a globally operational military. The Pentagon has indicated around 15 developing nations which Beijing is looking at to host a base for the People’s Liberation Army Navy (PLAN) – the military maritime fleet of the PRC’s armed forces – so it can have a blue-water navy, including some on Africa’s Atlantic coast.

Ultimately, developing nations will align themselves based on economic self-interest, and for a decade, many have hedged between the free and open nations and the PRC to maximise gains. The only real way to combat the PRC’s influence across the developing world is to provide a better development offer. With the dismantling of the United States Agency for International Development (USAID) alongside cuts to British and European aid budgets, the PRC has been left as the only real player in the game.

The reality is that UK aid alone cannot counter the PRC’s influence in the Global South. Nevertheless, the free and open nations collectively have a powerful asset which can outcompete the PRC and provide a better development offer: the private sector. But if the private sector is to follow, Britain and its allies will have to play a greater role in de-risking investments by improving governance and building better political, economic and legal institutions across the developing world. Weak governance has already driven businesses of the free and open nations out of the Democratic Republic of the Congo, giving the PRC control of up to 70% of its cobalt mines at a devastating human cost. Unfortunately, the UK has slashed aid funding for governance and institution-building programmes, kneecapping the private sector’s utility.

A well-designed and well-funded development budget is a powerful tool in combating the PRC’s influence and unleashing the private sector as a strategic asset. Britain and its Group of Seven (G7) partners should look to use it.

Lukas Fiala

Head of China Foresight at LSE Ideas

Competing with the PRC across the Global South is no easy endeavour. All too often, commentators believe that the UK must respond to PRC initiatives in kind without considering the feasibility and likelihood of success of such recommendations. For instance, as a deficit economy, Britain simply does not have the abundance of capital needed to rival the PRC’s overseas development finance programme delivered through the BRI and, more recently, the Global Development Initiative (GDI).

Instead, the UK should focus on the considerable human capital of its world-class university sector as well as the country’s ensuing convening power to create lasting epistemic networks in support of Britain’s global diplomatic presence in an age of American isolationism. This strategy should include three pillars.

Firstly, HM Government should encourage students from across the Global South to study at British universities to build on existing momentum in the sector. With Whitehall meeting its 2030 international student recruitment target a decade early, the evident appeal of the UK’s university sector should remain part of a broader strategy to enhance Britain’s soft power across key countries and regions.

Secondly, the government should provide more support for academic exchanges between UK research institutes and universities and their counterparts across the Global South. Ensuring equitable access for academics, researchers and journalists from developing countries – especially during the visa process for academic visits – is of critical importance in this regard.

Finally, Britain should provide more professional education opportunities, especially in cooperation with the UK’s world-leading military academies. Building on the deep expertise of British academies, such programs can compete with the PRC’s growing capacity building efforts for armed forces and civil servants across the developing world.

Grace Theodoulou – Policy Fellow, China Observatory
Email: grace@geostrategy.org.uk

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This is the third Tangram from Observing China, where the leading China experts give a diverse range of succinct responses to key questions on the development of the People’s Republic of China (PRC).

This month marks ten years since the Belt and Road Initiative (BRI) was first unveiled in the People’s Republic of China (PRC). Our recent ‘Investigator’ by Charles Parton looked at how the BRI set the precedent for other initiatives by Xi Jinping, General Secretary of the Chinese Communist Party (CCP), which further aim to perpetuate the PRC’s influence abroad as well as a Chinese model of global governance.

But how has the BRI itself evolved since its inception ten years ago, and how have public perceptions of it changed? Has the plan been successful, and is it really a form of ‘debt-trap diplomacy’, the well-known term first coined by Indian academic Brahma Chellaney which points to an aim of ensnaring poorer countries in political acquiescence?

We asked four experts to evaluate.

George Magnus

Member of the Advisory Council of the China Observatory, Council on Geostrategy

The formal announcement of the BRI, Xi’s signature foreign policy, by the National Development and Reform Commission (NDRC) a decade ago gushed with political platitudes and party-inspired perspectives. The heyday of large-scale infrastructure financing is over. There is a new focus on smaller projects and financing, and collaboration in technology, institution-building, digitisation, green energy and public health. Yet, has Beijing’s $1 trillion (£770 billion) of BRI financial commitments paid off?

For the world’s biggest trade nation, it has. Trade between the PRC and nations signed up to the BRI has tripled to over $2 trillion (£1.5 trillion) since 2014, with many nations counting the PRC as their largest trade partner, and the BRI area accounting for approximately 45% of PRC trade worldwide.

The PRC’s $1 trillion (£770 billion) in infrastructure financing and construction projects has had mixed results. Recipient countries have been able to acquire – without human rights conditions and by parroting Beijing’s Taiwan narrative – development infrastructure and access to Chinese trade, investment and know-how. The PRC has acquired raw materials, energy, security over sea routes and chokepoints, market access for its goods and other advantages which serve its financial, military, political and security agendas.

Yet, commonly cited criticisms of the BRI include mothballed and cancelled projects, cost overruns, inefficient Chinese management and, above all, financial distress – sometimes very serious – arising from debt. Approximately two dozen BRI countries are deeply affected, and indeed most of Beijing’s annual lending nowadays takes the form of rescue loans.

The ‘debt diplomacy’ criticism of the PRC, though it seems fanciful, substitutes conspiracy for incompetence and opacity, which also feature in its domestic infrastructure financing model: the model on which the BRI is based. The former links local governments, state banks and state enterprises in a cycle of rising overcapacity and debt, but in the BRI, there is simply a fourth sovereign actor.

Ultimately, this is a weak governance problem, which has given some BRI nations second thoughts about their relations with the PRC. Others are now also pushing back at the PRC’s exporting of overcapacity and dumping of goods. Despite this, the BRI is Chinese foreign policy, not a cost-benefit problem, and Beijing will carry on regardless to try to bring others into its orbit.

Francesca Ghiretti

Research Leader, China and Economic Security, RAND Europe

The emergence of other strategies such as the Global Development Strategy, the PRC’s economic performance, and the series of bad debts and subsequent difficult restructuring have shed doubts over the resilience of the BRI and whether perhaps the PRC has outgrown it. But the BRI is not going anywhere.

The BRI is – among other things – a way to frame the PRC’s foreign policy, and its content can change with Beijing’s evolving priorities. Through the years, the BRI has provided narrative support to the PRC’s bilateral relations with countries all over the world and strengthened Beijing’s influence globally. Many of the means which characterised it, such as investments and infrastructures, are still operational.

Whether we want to label them as BRI or not, recent developments include: Georgia awarding a Black Sea deepwater port project to the PRC’s state-owned China Communications Construction Company (CCCC), one of the BRI’s main players, and a new railway project in Vietnam – an emerging key player in global supply chains. The railway itself will pass through key technology manufacturing hubs in Vietnam.

Increasing connectivity with, and reliance on, the PRC is one of the drivers of Beijing’s foreign policy and thus of the BRI. This in turn increases the levers of influence at the PRC’s disposal. The BRI and its flexible nature have offered Beijing a way to shape global relationships through an economic prism, and that remains true today.

Zdenek Rod

Assistant Professor at the University of West Bohemia

Beijing claims the BRI has entered a phase of ‘high-quality cooperation’, shifting from indiscriminate investment towards more strategic, sustainable and commercially viable projects. The latest BRI forum underscored the PRC’s deepening economic integration, with trade between the PRC and nations signed up to the BRI surpassing 50% of the PRC’s total trade volume. Expanding multilateral engagements – such as agreements with Brazil and the African Union, and regional investment forums like the China-GCC Industrial and Investment Cooperation Forum – reflect an institutionalisation of Beijing’s economic diplomacy.

Proponents argue that the initiative has matured, aligning with broader trends in globalisation by leveraging the PRC’s industrial capacity, digital trade expertise and financial influence. Infrastructure projects, once emblematic of overinvestment and waste, are now complemented by smaller, more targeted initiatives – branded as ‘small but beautiful’ – aimed at local development and welfare.

A more critical assessment, however, suggests that the BRI has evolved into a pragmatic geopolitical instrument rather than a benign economic initiative. The shift towards environmental sustainability, financial discipline and private sector participation reflects not only a recalibration of Beijing’s strategy, but also a necessary response to mounting financial and reputational costs.

The PRC’s approach – moving from high-risk, sovereign-backed loans to more selective and commercially viable investments – acknowledges past miscalculations. Yet, concerns persist. Firstly, debt sustainability remains a major issue, with Beijing accused of leveraging financial distress to secure strategic assets and political influence in recipient states. Secondly, governance concerns plague many projects, as Beijing frequently partners with regimes which have weak institutional capacity, raising questions about transparency, local agency and long-term viability. Thirdly, despite its rhetoric on sustainability, Beijing’s environmental commitments under the BRI remain patchy and often subordinate to commercial interests.

While critics in Washington and Brussels have sought to counter the PRC’s influence with initiatives such as the European Union’s (EU) Global Gateway and the Partnership for Global Infrastructure and Investment (a US-led Group of Seven (G7) initiative), these efforts remain underfunded, fragmented and lacking the PRC’s state-backed financing model. Unlike the BRI, which integrates policy coordination, funding mechanisms and project execution, such alternatives struggle with bureaucratic inefficiencies and inconsistent political commitment.

Ruby Osman

Policy Advisor, Tony Blair Institute for Global Change

Beijing has no shortage of clunkily named policy frameworks, but none have cemented themselves in the minds of policy makers abroad quite like the BRI.

But for an initiative which has, by some estimates, funnelled over $1 trillion (£770 billion) into projects worldwide, detail remains conspicuously scarce. More than a decade since its conception, there is still no formal list of ‘BRI countries’, official spending tallies, or even a clear definition of what constitutes a BRI project.

This is because the initiative functions more as a branding tool than a rigid strategic master plan. The BRI label is applied across a vast spectrum of Chinese actors – public and private, national and provincial.

At times, this branding has created headaches for Beijing, with environmentally harmful projects and accusations of ‘debt-trap diplomacy’ – although these are largely debunked – offering little diplomatic upside. Yet, this same flexibility is what gives the BRI its greatest competitive advantage: the ability to evolve with the times.

In recent years, the leadership in Beijing has shifted its messaging to an evolved BRI which focuses on smaller, sustainable projects under slogans such as ‘small is beautiful’ and ‘lean, clean and green’. These minimise reputational risk and leverage the country’s dominance in green technology – and help to secure the critical minerals essential for maintaining that dominance.

For the most part, Chinese actors are following this guidance. Spending after the Covid-19 pandemic has rebounded but remains well below its 2014-2016 peak, with a shift away from large-scale infrastructure projects. Private companies are playing an increasingly central role, and, in 2023, investments outpaced state-backed loans for the first time.

And, unlike in 2015, this ‘BRI 2.0’ now operates alongside a suite of other global initiatives, all aimed at advancing Beijing’s vision of global governance. As the international order faces new pressures, Beijing hopes that this more sophisticated toolkit will position it to reshape global norms on its own terms.

Grace Theodoulou – Policy Fellow, China Observatory
Email: grace@geostrategy.org.uk

If you would like to explore any of the Council on Geostrategy’s PRC-focused research papers, click here to visit the China Observatory.

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This is the second Tangram from Observing China, where the leading China experts give a diverse range of succinct responses to key questions on the development of the People’s Republic of China (PRC).

What do the United Kingdom (UK), the United States (US), Mauritius and the People’s Republic of China (PRC) all have in common? They are all keeping a beady eye on a sprinkling of remote islands in the Indian Ocean, in excess of 1,000 miles away from the next nearest landmass. Until late last year, many had never heard of the British Indian Ocean Territory (BIOT), made up of the Chagos Archipelago of islands. If one were to look closely at a map, it might seem that the UK, US and Mauritius were fighting over breadcrumbs. But if one zooms out, it might make sense as to why.

It is thought that Donald Trump, President of the US, may ask His Majesty’s (HM) Government to cancel the deal agreed late last year to cede control of the Chagos Islands to Mauritius. The American decision is because the most important island – Diego Garcia – is home to a large military base, shared by the UK and the US, and one of the most important military bases in the world for power projection.

John Bolton, former National Security Advisor during Trump’s first term, warned of a ‘coordinated’ effort by both Tehran and Beijing in carrying out ‘clandestine activities’ in Mauritius to wean the Chagos Islands away from its current oversight by Euro-Atlantic nations.

Last week, Iran’s ambassador in the region visited Mauritius to discuss academic exchanges and collaboration – US national security advisors have pointed out Iran’s history of using academia as a front for espionage and warned that should the islands be returned to Mauritius, Iran will most certainly find a way to gather intelligence on the Diego Garcia military base.

But what about Beijing? Does the PRC really have such a vested interest in the Chagos Islands, and if so, what is it?

Alicia Kearns MP

Shadow Minister for National Security and Chair of the Advisory Council, China Observatory

The BIOT debacle demonstrates how multilateral organisations set up in good faith are no longer neutral arbiters of international disputes. While a world where all countries engage with and accept fair judgement would be ideal, the reality is that politicisation, and uneven implementation of rules is benefitting autocracies. Universalist organisations do not produce fair results when selective global powers ignore and hijack them to pursue national aims. One should compare the UK’s approach to BIOT with the PRC’s militarisation of the South China Sea.

The International Court of Justice (ICJ) ruling on BIOT is non-binding and based on the expulsion of the Chagossians in 1968. It does not address the current reality in which no agreement exists amongst Chagossians for Mauritian sovereignty.

In 2021, Mauritius enacted an extra-territorial law threatening ten years of imprisonment to anyone disputing Mauritian sovereignty over the islands. Chagossians who dispute Mauritian sovereignty could face prison if they return to their homeland after a deal is concluded.

While Chair of the Foreign Affairs Committee, I held meetings with Chagossians of all views. They felt that HM Government was not consulting them. David Lammy, Foreign Minister, has still not met them.

Effectively, HM Government is offering to pay eye-watering sums of money to Mauritius, which threatens imprisonment to Chagossians who dispute their claim, while ignoring many Chagossian voices because of a non-binding decision at the ICJ.

Over the last decade, the PRC has created and militarised dozens of islands in the South China Sea. Naturally, the BIOT would be an attractive proposition for Beijing. The PRC has unilaterally shifted its maritime zone into the internationally recognised waters of Brunei, Indonesia, Malaysia, the Philippines, and Vietnam.

In 2016, the PRC refused to participate in the international tribunal brought against it by the Philippines; actions of the Chinese Communist Party (CCP) in Tibet, Hong Kong and Xinjiang similarly show a total unwillingness to engage with multilateral organisations. No judgment will impede Chinese neo-imperialism.

By abandoning any sense of national interest or holistic justice, and focusing solely on a decision made on a narrow set of interpretations of past events, the surrender of the Chagos Islands would shift the balance of power towards the actively imperialist PRC.

The UK must awaken to the fact values it considers universal, such as freedom of navigation and freedom of expression, are under threat. The very framework established to protect them is riddled with efforts to undermine it. Combatting this threat must come from a place of strength – which requires Britain to hold onto its strategic assets, none more so than BIOT.

Otherwise, the UK will arrive at a point where the very bodies established to defend aspirational universalist values helped to manifest a new global order dominated by states whose conduct, at home and abroad, contradicts even the most basic of rights. Britain cannot simply sit back and allow this perversion to occur.

Peter Dutton

Senior Fellow, Paul Tsai China Centre

To understand why the PRC has much to gain, and Britain and America have much to lose, from the potential transfer of the BIOT to Mauritius, one must remember three key facts. First, positive global governance has always been provided by the combination of international law and the power necessary to enforce it. International law lends legitimacy to the exercise of power but is never a substitute for it.

Second, the world is increasingly unstable. Today, authoritarian states reject the restraints of international law and are undertaking expansionist policies. Russia attacked its neighbors in violation of law’s most fundamental prohibition against aggression. Iran employed proxy terrorist groups to expand its regional influence. The PRC ignored its dispute settlement responsibilities to take control of its neighbors' rights in the South China Sea.

Third, each of these states uses the desire of the free and open nations to adhere to international law against them. This is the essence of Russia’s hybrid warfare, the PRC’s maritime gray zone operations, and Iran’s terror tactics. In sum, the world is a dangerous and unstable place because authoritarian powers are ignoring international law and using violence to expand their influence.

Against this backdrop, the BIOT provides British and American power, and that of their allies, a vital geographic bulwark against the decline of global order. To leave a power vacuum for Beijing to fill – even by abandoning the Chagos Islands other than Diego Garcia – would seriously weaken Britain and America’s capacity to employ the power necessary to keep order in the region in accordance with international law, and to support allies and friends such as Australia, India, Malaysia, and Singapore.

If allowed, Beijing will act swiftly to build a base to challenge Britain and America’s influence, to secure its vulnerable supply lines, and to guard its western territories, which extend as far as the border of Pakistan. If international law is to have any chance to provide global stability, Britain must recognise the vital relationship between law and power and retain all of the Chagos Islands.

Jennifer Parker

Expert Associate, National Security College, Australian National University

In this era of a deteriorating world order, control of maritime trade routes and strategic waterways has become a focal point of competition. The Indian Ocean, in many ways, is at the heart of this shift, with countries vying for strategic dominance. And at the heart of the Indian Ocean lies the BIOT.

In this context, the UK's transfer of the BIOT could inadvertently bolster Beijing’s growing influence in the region, potentially granting it future access to the strategically vital archipelago in the worst-case scenario.

Following the ICJ advisory ruling in 2019, it has become increasingly difficult for the UK to maintain its claims while advocating for international law in other forums, particularly against Beijing’s actions in the South China Sea.

Strategic competition in the Indian Ocean centres on control of sea lanes, which handle two-thirds of global oil shipments and one-third of bulk cargo. The PRC has invested heavily in ports and airports across the region, from East Africa to Pakistan, Sri Lanka, and Bangladesh. This includes over £1.2 million in Chinese foreign direct investment in Mauritius in 2022 alone. Other forms of investment include a 20-year loan from Beijing for the construction of Mauritius International Airport, completed in 2013.

While Mauritius has received direct investment from the PRC, it appears more closely aligned with India, which would likely oppose Chinese access due to its own strategic interests. However, a shift in the balance of power, potentially resulting from the UK's handover, could create an opportunity for greater Chinese influence. Beijing’s pattern of investment across the region indicates its interest in such opportunities. Although a full-scale base is unlikely, it is possible that the PRC could establish some level of infrastructure to maintain access and enhance its ability to surveil activities in the archipelago, including around Diego Garcia – although there is no evidence to date of any plans for this to be achieved.

If the deal proceeds, the UK will need to collaborate with Mauritius and India to mitigate the potential for Chinese access.

Grant Rafferty

Parliamentary Researcher at the House of Commons

Yes, Beijing does indeed have strong interests in the transfer of the BIOT to Mauritius.

The BIOT is remote, large, and extremely easy to secure. It is made up of seven atolls and sixty islands, spread over 640,000 square kilometres, and boasts a marine protected zone. The waters are regularly patrolled and unauthorised boats are caught quickly by the Royal Marines.

However, with the transfer to Mauritius – who want to exploit the islands economically – it opens the door for fishing rights to be offered to Beijing in the waters around the base. This could allow the PRC to spy on the installation at Diego Garcia through fishing ships.

For decades, the PRC has used fishing ships as an extension of its military. Known as the Maritime Militia, first used in the South China Sea in the 1970s, their role has only expanded as Beijing has pursued aggressive operations around the South China Sea. The ships operate as commercial fisheries – providing plausible deniability – but double up as mini spy ships providing vast amounts of data to the People’s Liberation Army (PLA), the PRC’s armed forces, from the location of submarines to the activities at ports.

In the past, these ships have encroached on military vessels such as the USNS Impeccable in 2009, or floated on the fringe of economic exclusive zones of rival countries such as India.

In the eventuality that the PRC is ever granted development permission on the other islands, it would be entirely fitting with the BRI for innocuous infrastructure to be built packed with military surveillance equipment aimed directly at the base – not an uncommon tactic for Beijing; see the incident at the headquarters of the intergovernmental organisation African Union.

While Mauritius is an ally of India, that could quickly change once the transfer goes through, as the espionage opportunities are too good for the PRC to pass up.

Hillary Briffa

Senior Lecturer in National Security Studies, King’s College London

The PRC has significant interests in the potential transfer of the BIOT to Mauritius, shaped by strategic, geopolitical, and postcolonial considerations. The Chagos Archipelago’s location, near key shipping lanes and home to the UK-US military base on Diego Garcia, makes it a vital strategic asset. This is often how small islands become subjects of great power interests (e.g., historical British bases in Malta and Singapore, and American bases in Iceland, or more recently Djibouti hosting both the US and the PRC, etc.). If sovereignty is transferred to Mauritius, this could create opportunities for Beijing to enhance its influence in the Indian Ocean Region, contributing to its broader maritime and geopolitical ambitions.

The PRC-Mauritius relationship is central to this dynamic. As a partner in the PRC’s Belt and Road Initiative (BRI), Mauritius currently benefits from substantial Chinese investment in infrastructure and trade. Beijing has also supported Mauritius’ claims to Chagos at the United Nations (UN), aligning with its longstanding narrative of anti-coloniality and efforts to champion solidarity in the so-called ‘Global South’. This support of Mauritius’ claims can therefore position the PRC as an ally of postcolonial justice, enhancing its image while countering the Euro-Atlantic dominance.

For Mauritius, the relationship with Beijing likewise offers economic and diplomatic leverage in asserting its sovereignty over Chagos. Chinese investments in Mauritian infrastructure and trade partnerships strengthen Mauritius’ economic resilience, which is critical as the nation navigates the legacies of colonialism and climate-induced vulnerabilities. Additionally, Beijing’s vocal support can amplify Mauritius’ position in international fora, particularly in its asymmetrical confrontation with free and open nations.

However, while the PRC’s support can add weight to its negotiating capacity, closer ties can also risk complicating its relationships with other important partners, including India and the US. Mauritius must tread carefully to assert its diplomatic position while balancing the broader geopolitical implications for many other regional players as well.

Grace Theodoulou – Policy Fellow, China Observatory
Email: grace@geostrategy.org.uk

If you would like to explore any of the Council on Geostrategy’s PRC-focused research papers, click here to visit the China Observatory.

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This is the first Tangram from Observing China, where the leading China experts give a diverse range of succinct responses to key questions on the development of the People’s Republic of China (PRC).

As the People’s Republic of China (PRC) entered the 21st century, we saw a concerted effort on behalf of the Chinese Communist Party (CCP) to assert itself as the powerhouse for what it calls ‘the inevitable rise of China’.

Even more so since the turn of the 21st century, the CCP has invested vast amounts into the various aspects needed to make a country a ‘great’ power, with the ambition of the PRC surpassing the United States (US): the military, infrastructure projects and the state propaganda machine have all enjoyed vertiginous boosts in financial resources and personnel. The CCP’s control over its territorial claims has only tightened, from Tibet to Hong Kong. In 2020, Xi Jinping, General Secretary of the CCP, claimed that the PRC had eradicated extreme poverty according to its national standards. The PRC is now the largest trading partner to over 100 countries, and many nations around the world are all too aware that they cannot compete in terms of production capacity or cost.

So, does this mean that the PRC is on track to be the dominant power of the 21st century? How airtight is the CCP’s control, and how accurate are Xi’s claims about the country’s ‘inevitable rise’? Or are there problems ahead, regarding environmental concerns borne of massive greenhouse gas emissions and lopsided economic growth?

Welcome to Observing China’s first ‘Tangram’, where we ask the leading China experts from the United Kingdom (UK) – and further afield – for their take on the PRC’s development. Our inaugural ‘Tangram’ answers the question many are asking: Will China dominate the 21st century?

Charles Parton OBE

Chief Advisor, China Observatory, Council on Geostrategy

All things are relative. Whether the PRC emerges by 2049 as the dominant global power – this is the intention behind meeting the ‘2nd centennial goal’, marking 100 years after the founding of the PRC – depends also on the performance of other powers, notably the US and European powers. If Donald Trump, President-elect of the US, succeeds in making America weak again, the European Union (EU) continues to shrink from tough decisions, and Britain cannot consolidate a post-Brexit position, then it will be easier for the PRC to dominate.

But the odds are stacked against the CCP. To be the number one superpower requires a strong, sustainable economy. Yet the economic and social model long ago became ‘unbalanced, uncoordinated, and unsustainable’, as Wen Jiabao, former Premier of the PRC, said in 2007, and Xi himself acknowledged in 2013. That model has caused – or must deal with – four major problems:

• Debt, a real estate crisis and a broken system of local government financing (they are interlinked);

• Demographics, a society which is very rapidly ageing before it has got rich;

• A population inadequately educated and skilled for a hi-tech economy (the percentage of the working population which has finished secondary education remains low and will take decades to raise);

• A lack of water, which is being exacerbated by climate change.

These and other problems, such as deteriorating foreign relations and increasing barriers to exports, would be difficult enough to surmount, but are made more so by a political system which is still largely set up to be run by top-down command and inspection. The CCP has deliberately eschewed elements which would help the economy be more ‘self-regulating’, namely:

• A vibrant civil society. Ideas for change and pressure do not come from government bureaucrats.

• Freedom of media, speech and the internet. The decade-long war on corruption is a monument to the lack of outside help. Instead, the CCP relies on inspections and cannot eradicate corruption among the inspectors.

• An independent judiciary, which builds trust, an essential element in willingness to build for the economic long term.

• Some form of political accountability independent of the Party itself: elections, in other words. Nothing encourages ‘serving the people’ more than the knowledge that the people can serve notice on you.

But these four elements, if introduced, would drive a wooden stake through the heart of the political model. And the one element of reform which the CCP will never allow is political reform.

The CCP accepts these limitations to its model as the price for staying in power. It is banking on dominance of the new sciences and technologies, and the industries which depend on them, both as a way of gaining geopolitical superiority and of ensuring the economic muscle to maintain it. Free and open countries need to be clearer about the CCP’s use of science and technology as a geopolitical weapon and to devise coherent strategies to deal with it. The tension between engagement with Beijing and protecting economic and national security against the PRC will be a dominant theme of the first half of the 21^st century.

Isabel Hilton OBE

Member of the Advisory Board, China Observatory, Council on Geostrategy and Visiting Professor at King’s College London

The PRC will continue to be an important power in the 21st century, not least because of its size, economic heft and growing scientific and technological weight. Domination is a more complicated proposition, however, and relies on the effective deployment of both hard and soft power to frustrate the ambitions of adversaries and advance one’s own.

Xi’s New Year’s Eve speech stressed the PRC’s growing importance in the world but, notably, made little mention of the threat of climate change, which could hamper the country’s ambitions in two respects: first, the PRC is highly vulnerable to climate impacts at home. Its own national assessments point to sea level rise, intense heat waves and severe and frequent storms, droughts and floods, all of which would have severe economic and social effects. Over 150 million people live in low elevation coastal areas and several studies have warned that trillions of dollars of economic activity are at risk from sea level rise; agricultural production and food security are under threat and glacier retreat will impact the country’s hydropower sector and water supply.

Second, after nearly 20 years as by far the world’s biggest emitter and with per capita emissions now higher than most European countries, Beijing’s international position on climate change is increasingly open to challenge. The PRC presents itself as a victim of the climate excesses of the advanced economies. That narrative began to fray in 2005 when the PRC became the world’s biggest emitter. Today, as climate impacts multiply in scale and severity around the world, it will no longer serve.

A failure to take more robust action on climate will damage Beijing’s claims to moral and political leadership. This year, signatories to the Paris Agreement are required to offer enhanced Nationally Determined Contributions (NDCs) with the obligation to bring them in line with the agreement’s ambition to limit the global average temperature rise to well under 2°C. Beijing’s offer will come under closer scrutiny from the countries in the so-called ‘Global South’, whose interests the PRC claims to represent.

There are ways, however, for the PRC to mitigate some of these negative effects. If the US, under the second Trump administration, withdraws once again from the Paris Agreement, Beijing’s claim to leadership will be more plausible by comparison. And since the PRC dominates the production of low carbon technologies, it is well-placed to benefit from selling the solution, even as it continues to contribute to the problem.

George Magnus

Member of the Advisory Board of the China Observatory, Council on Geostrategy

The narrative of the PRC’s domination of the 21st century, sometimes self-servingly propagated by its main protagonists, is running into flak.

In the three years since the economic bounce in 2021, linked to Covid-19, the size of the country’s economy has barely changed, while the US, for example, has soared by 25%. Its GDP relative to the US has dropped from about 75% to 63%. Its share of world GDP has fallen from 18.5 to 16.6%. The PRC’s stock market capitalisation – or the value investors ascribe to all listed companies – has risen a bit since mid-2024, following a long slump, but at not quite US$12 trillion (£9.9 tillion), it amounts to around a fifth of the US.

‘Peak China’, defined in this way, has then already happened. While it is most likely that the PRC’s economy will grow in years to come, it seems likely to be held back by soft productivity, deflation risk and a weaker exchange rate. Its relative position may not improve that much, let alone surpass the US or dominate as per the narrative.

For a while, the PRC will retain its status as the world’s second biggest economy, and continue to be prominent in global manufacturing and exports, even dominating some specific industrial goods. Over time, though, Chinese industrial policies will encounter more resistance abroad, while its mercantilist trade policies, decoupling, and the recalibration of supply chains will lead to changes that most likely not to Beijing’s benefit.

The contrast between the PRC’s technological and scientific prowess and in some cases, global leadership on the one hand, and the persistent struggle to overcome systemic macroeconomic flaws, weaknesses, and imbalances on the other, is remarkable. While the former features persist, moreover, it would be churlish not to acknowledge the admiration and appeal the PRC commands among many emerging and developing nations, and indeed in a few developed countries too.

Yet, these dynamic sectors typically represent quite a small part of the overall economy, and their ability to have transformational effects more broadly depend on two things. First, managing and resolving the country’s structural problems, and second, the capacity of robust and flexible institutions to diffuse technological know-how and productivity growth throughout the economy. Under Xi, at least, there is scant evidence that the government is politically able or willing to address the macroeconomics issues, including debt capacity, weak demand and productivity, and deflationary risk, or at least is prepared to reform in ways that shift the distribution of political power in favour of private firms and citizens.

The PRC will doubtless continue to exert global influence, but its relative position in the world is likely to keep sliding, following Japan’s example over the last 30 years. Domination of the 21st century is more political rhetoric than economic substance.

Ruby Osman

Policy Advisor, Tony Blair Institute for Global Change

The PRC isn’t going to dominate the 21st century for one simple reason: it doesn’t want to.

We can, of course, talk about individual areas where Beijing dominates. It dominates supply chains in everything from critical minerals to consumer goods, and increasingly wants to shape the standards which will set the playing field for existing and emerging technologies. Increasingly, too, Beijing is looking to export its ideas as well as its products and carve out a stake in global governance.

But what actually are those ideas? The hallmarks of the PRC’s governance offer are concepts like ‘mutual non-interference’, a country’s right to define its own development path and, increasingly, ‘respect for the diversity of civilisations.’ In other words, Beijing’s offer is not a prescriptive one – nor is it a like-for-like rival of the Washington Consensus.

Even domestically, its leadership is making a similar case for plurality. Increasingly, the official story promulgated by the CCP of the country’s past and future is one of Chinese exceptionalism: the party line says that the PRC’s model is the unique product of the strengths of the Chinese population and its five thousand years of remarkable, often turbulent, history.

So, the thinking goes, while there might be practical lessons to share from the PRC’s rapid development (and Beijing is increasingly looking to share those through extensive ‘Global South’ training programmes), the unique blend of traditional Chinese, Marxist-Leninist, and state-capitalist influences that makes up the ‘China model’ itself will only ever suit one place.

The idea that the PRC’s system of governance is largely inapplicable beyond its borders appears to be a belief genuinely held among Chinese leadership – just look at the many cautionary tales of Western overreach in Chinese academic debates and state media. As the PRC sees it, the smart move is to focus on building an external environment amenable to Beijing’s interests, without getting bogged down in the high-risk, labour-intensive business of imposing specific models.

So, in short, Beijing isn’t looking to dominate the 21st century. But what we need to understand is that it certainly doesn't want the US to either.

Kevin Rowlands, Associate Fellow in Naval Strategy, Council on Geostrategy and Emma Salisbury, Research Fellow on Sea Power, Council on Geostrategy

This, of course, is a question of relatives not absolutes. For the PRC to rise to a relative position of dominance requires the US, the current global hegemon, to decline in relative terms. Readers may have conflicting views on the likelihood of American greatness being maintained, advanced, or lost.

If we tackle the question from one particular angle, that of naval power, then it may be easier to provide some objective analysis. During the quarter century following the end of the Cold War from 1990 to, say, 2015, there has been little doubt that the US Navy held the position of the world’s foremost sea power. It had unrivalled mass, high-end equipment, excellent sustainment, and a network of allies, partners and friends arguably unmatched by any country before or since. When Adm. Mike Mullen, then-Chief of Naval Operations, spoke of the ‘1,000 ship navy’ in 2006, it wasn’t pie in the sky. It was an (albeit exaggerated) moniker for the global maritime network that America led.

However, there is always a ‘however’. The PRC is rising. From the early 1980s onwards it embarked on an incredible naval modernisation programme, which slowly but surely, then rapidly and impressively, delivered results. In the 20 years up to the turn of the millennium, the People’s Liberation Army Navy (PLAN) started to extend its reach beyond the First Island Chain and develop command and control, missile, and electronic warfare technologies. From 2000 to approximately 2020, it went further to the Second Island Chain and occasionally beyond, underwent organisational reform, and shifted from large numbers of low-tech coastal defence ships to increasingly large numbers of sophisticated frigates and destroyers. It also procured aircraft carriers.

Today, the PLAN is the world’s largest navy and is not slackening the pace of its growth. It has high-end capabilities under, on and above the waters and is able to deploy globally. It has access to a huge fleet of domestically built commercial shipping too, much of which is specifically optimised to provide sealift capability in the event of a conflict. Is it a challenge to the US Navy? Categorically, yes.

This relative swapping of positions has been made possible because of two things. Simultaneously, Chinese maritime industrial capacity has expanded year on year, while US maritime industrial capacity has atrophied. And herein lies the issue. Can the PRC dominate the 21st century at sea? It certainly has the potential to do so, despite a current lack of experience and few if any real allies. Will it do so? That depends on America. If the US lives up to its word and recapitalises its domestic maritime defence industry and infrastructure, and if it maintains and enhances its global network of friends, then Beijing’s job will be made much harder. But these are big ‘ifs’ which require political and economic will in Washington and a sea-change in defence investment in other free and open countries.

Joe Pollard

Policy and Projects Officer, Progressive Britain

The question of whether the PRC will dominate the 21st century is neither new, nor one which we seem any closer to answering decisively.

Much political analysis in the free and open countries focusing on the PRC is split between the view that the CCP is becoming more aggressive, and the belief that Beijing is actually more interested in maintaining stability over anything else. What unites these views is that they overlook the other side of the coin – what we in the Euro-Atlantic countries can do to decide the direction of this century.

We must remember that liberal democracy is under threat; a weakened Russia and Iran positions the PRC as the leading force within the ‘CRINK’ – the acronym used by British intelligence to refer to the ‘deadly quartet’ of the PRC, Russia, Iran and North Korea. Additionally, Beijing’s popularity is growing across the Global South, particularly in Africa, fuelled by (initially) economically cheap but politically costly credit as part of the Belt and Road Initiative (BRI). We cannot afford to overlook these developments.

Too often in the Euro-Atlantic nations we fret over the actions of others and overlook the areas where we can respond proactively. We are significant actors in the dynamic landscape of international affairs. To assume the PRC’s dominance as an inevitability is defeatist. Nothing is a given, and we should embrace our capacity to effect change in a progressive direction. For example, autocratic states claim that human rights are fictitious. We need to counter this narrative by proving that human rights exist only because they are a concept worth defending, and that upholding them makes a nation stronger.

We should pursue strong partnerships with the countries of the ‘Global South’, particularly on matters of governance, development, and climate change, and leverage what remains of our soft power. When dealing with the PRC, free and open countries should present a unified front; as the US will soon learn, alienating allies and acting unilaterally undermines effectiveness during these interactions. Neither Trump nor Xi will be leaders forever. In only 75 years the CCP completely transformed the PRC following the century of humiliation – thus, nothing in the next 75 years is a certainty. So, to answer the question of the PRC dominating the 21st century – well, it is up to us to decide whether we will let this happen.

Grace Theodoulou – Policy Fellow, China Observatory
Email: grace@geostrategy.org.uk

If you would like to explore any of the Council on Geostrategy’s PRC-focused research papers, click here to visit the China Observatory.

The image at the top of this page has been generated using AI.

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