CHAPTER 2: U.S.-CHINA SECURITY AND FOREIGN AFFAIRS (YEAR IN REVIEW) Executive Summary Over the past year, China has sought to present itself as a responsible world leader despite engaging in a range of destabilizing activities that have undermined global peace and security. General Secretary of the Chinese Communist Party (CCP) Xi Jinping has persisted in challenging U.S. global leadership and asserting China's position on the world stage, including by hosting dozens of world leaders for a Shanghai Cooperation Organization (SCO) summit in Tianjin followed by a military parade in Beijing. China has also escalated its use of gray zone tactics—coercive military, economic, and influence operations short of war—against Taiwan, in the South China Sea, and around Japan's Senkaku Islands. Beyond its own borders, Beijing has continued to stoke violence and instability by supplying dual-use goods to Russia and otherwise helping sustain its war against Ukraine, funding Iran and its terrorist proxies in the Middle East, and intensifying cyberattacks on the United States and countries around the world. China's efforts to undercut U.S. credibility and advance its own interests overseas have also been supported by its approach to domestic governance. Over the past year, China has deepened its anticorruption campaign with the aim of quashing internal dissent, forged ahead with its military modernization efforts, and continued its longstanding efforts to control religious institutions it sees as fueling separatism and undermining Party rule. Considered in the aggregate, these actions reflect Beijing's continued rapid preparations for the possibility of conflict and its systematic efforts to erode U.S. deterrence across the military, economic, technological, cyber, and diplomatic domains. Key Findings • China has used the pretext of a "turbulent" external environment to justify its ongoing campaign to quash internal dissent and enforce absolute political loyalty to the CCP. Over the past year, China has sharply increased spending on domestic public security, punished officials for disciplinary infractions at record rates, and continued to purge senior military leaders perceived as insufficiently loyal. • Despite purges of key military leaders, China's People's Liberation Army (PLA) significantly advanced its military modernization efforts over the past year—increasing its stockpile of nuclear warheads, introducing new amphibious assault ships and stealth fighter jets, expanding its drone deployment capacity, and enhancing its capability to launch an attack on Taiwan with little advance warning. China is increasingly willing to use PLA capabilities to send political messages, as demonstrated by unprecedented naval live-fire exercises conducted in the Tasman Sea off the coast of Australia and New Zealand. • Beijing has continued its efforts to construct an alternative world order with itself at the center—symbolized most powerfully in 2025 by images of the leaders of Russia, North Korea, Iran, and about 20 other mostly authoritarian countries gathered behind Xi Jinping at a military parade in Beijing commemorating China's victory in World War Two. • In meetings with leaders from Asia, Africa, and Latin America, China has sought to undermine U.S. credibility and bolster its credentials as a leader of the "Global South" by accusing the United States of disrupting international order while professing its own commitment to free trade, development assistance, and international law—despite often failing to follow through on such promises. • While claiming to be a source of international stability, China has continued to threaten global security by undertaking gray zone activities in the Indo-Pacific and around the world. China routinely engages in provocative military maneuvers near Taiwan and in the South and East China Seas, has sabotaged critical undersea communications cables near Taiwan and in the Baltic Sea, and has escalated cyberattacks on the United States. • China has also fanned the flames of conflict by supplying dual-use goods to sustain Russia's war in Ukraine, funding Iran and its terrorist proxies through purchases of sanctioned Iranian oil, and providing North Korea with diplomatic cover and material support that advances its cyber and weapons programs, thereby complicating global efforts to constrain these countries' destabilizing activities. • Taken together, these actions form a coordinated strategy to prepare China for the possibility of potential conflict while steadily seeking to erode U.S. deterrence and the resilience of allied security networks. Introduction On May 13, 2025, Xi Jinping delivered a keynote speech in Beijing to an audience of leaders from 33 Latin American and Caribbean countries. In a series of thinly veiled criticisms of the United States, Xi denounced "tariff and trade wars," "bullying," and "protectionism."1 In contrast, he presented China as a champion of "economic globalization," a responsible world power committed to providing humanitarian aid, and a principled advocate for upholding "international order."2 Similar scenes have played out over the past year in meetings with representatives from virtually every world region.3 Chinese leaders have sought to undermine the credibility of U.S. international leadership and portray Beijing as the "adult in the room," claiming to restore global stability.4 Yet a review of Beijing's domestic policies, military modernization efforts, gray zone activities, and support for malign actors over the past year reveals that Beijing has continued to engage in dangerous and destabilizing activities that have undermined peace and stability worldwide. Beijing often uses lawfare or outright denials in an attempt to mask its malicious activities, presenting itself as a source of global stability even as it undermines the very international order it claims to uphold. China's Leaders Prioritized Domestic Social Stability in the Face of a "Turbulent" External Environment In his annual New Year address for 2025, Xi Jinping called on the Chinese public to be confident in the face of challenges presented by uncertainties in the external environment and pressure from economic transformation, saying, "We grow in the wind and rain, and we get stronger through hard times."5 As the 14th Five-Year Plan entered its final year in 2025, the Party signaled it would stay its course while laying the groundwork for the future. During a symposium launching the planning process, Xi called on Party cadres to "promote beneficial interaction between high-level development and high-quality security through highly efficient governance."6 The National Security White Paper released in May reinforced this point, stating that "high-quality development" requires "high-level security" and that "development problems can become security risks," justifying the necessity of the Party's "absolute leadership" over economic development."7 China Warned Its Citizens to Prepare for the Impact of an "Increasingly Complex and Severe International Environment" Chinese Premier Li Qiang's address to delegates of the National People's Congress at the annual Two Sessions meetings in March warned that "an increasingly complex and severe external environment may exert a greater impact on China in areas such as trade, science, and technology," acknowledging the potential impact of trade disputes and supply chain decoupling.* 8 Although Premier Li's speech did not directly address the United States as a challenge, Foreign Minister Wang Yi took a strong tone at a press conference on the sidelines, saying, "No country should fantasize that it can suppress China and maintain good relations with China at the same time" and that China will withstand "any extreme pressure, threats and blackmail."9 No major new stimulus measures or policy shifts emerged from the 2025 Two Sessions, but the government signaled it was doubling down on building self-sufficiency by strengthening domestic industry and ensuring adequate stockpiles of fuel and food, continuing a notable trend from the past several years.10 The government has appeared increasingly concerned about public perceptions of quality of life and the potential for public dissatisfaction to result in social instability. Persistent weaknesses in youth employment, protests over unpaid wages, and high-profile incidents of mass violence—amplified by social media—are seen as potential flashpoints for unrest.11 The Two Sessions Work Report stated that the government needs to strengthen "social conflict resolution and risk prevention efforts," reflecting the authorities' determination to maintain grassroots surveillance and control.12 In November 2024, Xi ordered local governments to "strictly prevent extreme cases" following a car ramming attack that killed 35 people.13 The Budget Report announced a sharp 7.3 percent increase of the public security budget—up from 1.4 percent the previous year—underscoring the priority placed on strengthening the domestic security apparatus.14 The 2025 White Paper, China's first on national security, promoted Xi's comprehensive national security concept to both domestic and international audiences. The concept has grown to encompass 20 traditional and non-traditional security fields that support "political security," defined as the unchallenged rule of the CCP. The White Paper repeated the CCP's position that this comprehensive national security approach forms the basis for domestic stability and prosperity, which would enable China to act as a stabilizing force in an increasingly turbulent world.15 Mathieu Duchâtel, Director of International Studies at the Institut Montaigne, suggested this White Paper may be the public-facing counterpart to an update of China's confidential 2021–2025 National Security Strategy.16 The White Paper, projecting a righteous and confident tone, justified a higher level of security as necessary for advancing China's development, condemning the United States for violating its "right to develop" with tariffs and sanctions as well as the U.S. alliance system for "interference in China's internal affairs."17 Throughout the document, China pointed to both its domestic security needs and the turbulent international environment as justifications for its efforts to export its repressive security practices to other countries. The Party Launches an Austerity Campaign to Discipline Cadres and Civil Servants In an effort to curb government waste and improve the Party's image amid China's economic downturn, the Central Committee and State Council issued revised austerity regulations in May, ordering officials to control spending on official activities and "lead by example in living frugally."18 In January, Xi delivered a speech to the Central Commission for Discipline Inspection (CCDI), the Party's anticorruption arm, calling for "constant purification of the cadre ranks," and it launched a campaign in March to investigate local officials for violations of the Party's code of conduct, requiring self-criticism sessions on their spending on meals and travel.19 Christine Wong, Visiting Research Professor at the National University of Singapore, described the campaign as "an admission that money is tight" that intended to demonstrate "that the public sector is sharing the pain" of China's economic downturn.20 However, the government soon backtracked, sending signals that reduced spending could have a negative impact on local businesses.21 Nevertheless, during the first half of 2025, the CCDI handed down a higher number of punishments for Party discipline violations for CCP officials and members than it had at a similar time last year; the number had already increased by nearly half from 2023 to 2024.22 Although a record number of senior officials were investigated in 2024, the majority of the CCDI's investigations targeted ordinary Party members, most of whom received light punishments.23 Professor of Government at Claremont McKenna College Minxin Pei suggested that recent campaigns to enforce Party discipline regulations are intended primarily to enforce loyalty within the Party's rank and file rather than purging enemies or fighting corruption.24 Viewed alongside Xi's broader domestic security measures, the austerity drive also reinforces the Party's ability to maintain political cohesion and discipline over money in the event of future external crises. China Remained Focused on Ensuring Military Loyalty and Modernization While projecting an image of Chinese military strength on the world stage, Xi Jinping emphasized two priorities for the PLA during the 2025 Two Sessions: rooting out corruption and deploying advanced technology to improve combat effectiveness. This reflected his intent to build a force that is both politically loyal and operationally capable, consistent with his goal of having a military with the capability to "conduct a successful invasion" of Taiwan.25 Experts assessed that the ongoing purges and corruption investigations targeting senior PLA leadership are likely to hinder weapons modernization efforts, create instability within command structures, and erode troop morale—factors that could collectively undermine the PLA's combat effectiveness in the short term.26 Some analysts, however, suggest Xi views the shorter-term instability caused by installing more "reliable" commanders as a necessary trade-off to "ensure compliance with his political agenda, set an example, [and] ensure the PLA develops in the direction he intends."27 While the anticorruption drive continues to reshape military leadership, it is unlikely to be the decisive factor in determining when Xi might pursue military action against Taiwan.28 Experts note that the CCP may prioritize broader political objectives over whether the military is fully prepared or domestic conditions are optimal when making that decision.29 The Party Purged More PLA Senior Leaders The PLA's anticorruption campaign has widened in scope, reaching new branches of the PLA and deepening in intensity. Recent investigations and the removal of officers from the PLA's Political Work Department, which oversees the force's political discipline, signal that Xi views the issue not merely as financial misconduct but also as a deeper crisis of political loyalty within the ranks.30 In June 2024, Xi convened a rare Central Military Commission (CMC) Political Work Conference—the first in a decade—at the historically significant base of Yan'an and stressed the imperative of maintaining Party leadership.* Xi urged senior officers to "introspect, engage in soul-searching reflections, and make earnest rectifications."31 Between July and December 2023, at least 15 senior military officers and defense industry executives were removed from their posts as part of sweeping corruption investigations, many of them tied to the PLA's Rocket Force and the Equipment Development Department—branches long seen as vulnerable to graft due to their central role in defense procurement.32 The campaign continued into 2025 with several high-profile figures coming under scrutiny. In 2025, then-CMC Vice Chairman General He Weidong—touted for his extensive operational experience focused on Taiwan—and the then-director of the CMC's Political Work Department Admiral Miao Hua—who served as a political commissar between 2014 and 2017—were both placed under investigation.33 In March 2025, Lieutenant General Tang Yong, then-deputy secretary of the Military Discipline Commission, a key unit in the PLA's anticorruption apparatus, was dismissed under suspicion of corruption.34 Meanwhile, Admiral Dong Jun, China's defense minister who was placed under investigation in late 2024, reappeared at public events in December 2024 and at the SCO meeting in July 2025, suggesting he may have weathered the political storm.35 In the defense industry, Liu Weidong, deputy general manager of China South Industries Group Corporation—the leading producer of PLA armaments—was also placed under investigation for suspected violations of discipline and law.36 The breadth of these investigations underscores Xi's determination to enforce political loyalty at every level of the military hierarchy—an effort that, while disruptive in the short term, strengthens the CCP's control over the armed forces given increased risks of potential external conflict. The PLA Military Advanced Its Military Capabilities While the PLA has endured instability among its senior leaders, rapid advancements in military capabilities and modernization across domains have continued. The PLA has remained focused on building its capability to fight and win wars against a "strong enemy" like the United States and to enhance its capacity to credibly threaten an invasion of Taiwan. Collectively, these capability gains—paired with political loyalty enforcement—are positioning the PLA to act quickly and decisively in a crisis, shortening warning timelines for U.S. and allied militaries. • Nuclear: China's nuclear weapons and advanced delivery systems pose a direct threat to the U.S. homeland as well as to deployed U.S. and allied forces.37 The PLA continued to modernize, diversify, and expand its nuclear posture, enhancing its nuclear deterrent and second-strike capabilities.38 China has constructed around 350 new missile silo fields for its intercontinental ballistic missiles and increased its stockpile of warheads by 20 percent in the past year, significantly expanding its nuclear strike capacity.39 At the September 2025 parade commemorating China's WWII victory, Beijing for the first time unveiled a "triad" of nuclear-capable missiles that can be launched from land, air, and sea.40 • Space: China has implemented a long-term, whole-of-government strategy to expand its space capabilities across military, commercial, and civil domains, leveraging state-directed resources to enhance its comprehensive national strength and attempt to surpass the capabilities of the United States. China has continued to rapidly develop space capabilities to support its military operations, expanding its ability to persistently monitor and target U.S. forces globally as well as to enhance its counterspace capacity to degrade, damage, or destroy U.S. space assets. • Electronic warfare: The PLA's electronic warfare (EW) strategy focuses on suppressing, degrading, disrupting, or deceiving adversary systems before and during conflict.41 In a Taiwan contingency, the PLA would likely target U.S. aircraft carrier groups and space assets to disrupt long-range precision strike capabilities.42 Recent developments reflect the PLA's push toward "intelligentized" warfare, including the unveiling of a 6G-based EW platform in June 2025 and an artificial intelligence (AI)-powered EW system in July capable of detecting and suppressing U.S. radar signals as far as Guam, the Marshall Islands, and Alaska.43 • Emerging technology: Echoing Xi's calls to develop and deploy advanced technologies to improve combat effectiveness, PLA authors have stressed the need to maximize combat capabilities by adopting autonomous systems and AI. All PLA services and theater commands now employ unmanned aerial systems for a wide range of missions, including electronic intelligence; intelligence, surveillance, and reconnaissance; ground and naval strike; and air-to-air attack.44 Additionally, in May 2025, the PLA Navy held a simulated drill marking its first operational deployment of an AI-assisted decision-making system. During that drill, the PLA Navy relied on an AI system to ultimately improve the stealth capacity of a guided-missile frigate.45 Additionally, the PLA expects competitors to rely on AI systems and is developing tactics to counter AI usage, including targeting algorithms, data, and computing capacity.46 • PLA Navy: The PLA Navy's overall battle force in 2024 included over 370 ships and is projected to increase to 395 ships by 2025 and 435 ships by 2030.47 In July 2025, the PLA Navy unveiled a new amphibious assault ship that will be a drone carrier.48 China's new warship, the Type 076 Sichuan, is designed to carry troops, helicopters, and drones for missions at sea or near coastlines. Unlike traditional amphibious assault ships, the Type 076 has an advanced launch system, which allows it to operate with fixed-wing aircraft and larger drones.49 • PLA Air Force: The PLA Air Force is rapidly modernizing its capabilities, with plans to deploy the Chengdu J-36, a next-generation stealth fighter that bears some resemblance to the U.S. F-35, and the Jiu Tian, a so-called "drone mothership" that can launch and control large swarms of drones.50 In addition, the PLA's fighter jets and air-to-air missiles received their first combat use as Pakistani forces successfully flew Chinese-made fighters during a four-day conflict with India.51 This marks the first known instance of these systems being tested in actual combat, providing the PLA valuable data and potentially boosting the credibility of China's defense exports.52 PLA Exercises Demonstrated Increased Integration and Aimed to Intimidate The PLA's Taiwan-related exercises focused on integrated drills and demonstrated increased capacity to effectively blockade the Taiwan Strait. For the first time, the PLA Navy conducted live-fire exercises near Australia and New Zealand, a not-so-subtle threat indicating its ability to project power beyond the second island chain.53 • Strait Thunder exercise: The PLA's large-scale exercise around Taiwan in April 2025 practiced naval blockade maneuvers and conducted simulated strikes against Taiwan's energy and port facilities.54 The drills focused on conducting joint force operations—integrating the PLA Ground Force, Air Force, Rocket Force, and Navy capabilities—and encroached further into Taiwan waters than previous exercises, coming within 24 nautical miles of Taiwan's coast, near the edge of its contiguous zone.55 • PLA Navy live-fire exercises in the Tasman Sea: The PLA Navy conducted unannounced live-fire exercises in the Tasman Sea near Australia and New Zealand to demonstrate naval power and intimidate Australia.56 The exercise occurred after an unsafe and unprofessional encounter between an Australian maritime patrol plane and a Chinese fighter jet over the South China Sea a week prior.57 This marked the first live-fire drill the PLA has conducted in the Tasman Sea and showcased its power projection capability beyond the second island chain.58 • PLA Navy and Air Force exercises in the East China Sea/Miyako Strait: During the October 2024 Joint Sword exercise and again during the April 2025 Strait Thunder exercise, the PLA Navy and Air Force conducted large-scale joint operations transiting the Miyako Strait—the narrow international waterway between Japan's Okinawa and Miyako Islands.60 These drills tested the ability to quickly project naval and air power through critical chokepoints near Taiwan and Okinawa. • PLA Rocket Force combat exercises: In February 2025, the PLA Rocket Force conducted intensive, realistic combat exercises designed to enhance the adaptability and interoperability of units.61 These exercises reflect a growing emphasis on preparing missile units for high-pressure, multi-domain threats and modernizing training methods to simulate real combat situations.62 China Persisted in Destabilizing Gray Zone Activities In addition to reshaping norms of internationally accepted internal security behavior, China has repeatedly resorted to coercive military, economic, and influence operations short of war—a range of activities often referred to as being in the "gray zone."65 According to the U.S. National Intelligence Council, the gray zone is "a realm of international relations between peaceful interstate diplomacy, economic activity, and people-to-people contact on one end of the spectrum and armed conflict on the other."66 Gray zone activities are "coercive or subversive actions to achieve objectives at the expense of others in contravention or in the absence of international norms."67 Falling below the perceived threshold for military action, China's gray zone activities have taken place across a range of domains, including military and security, cyber, economic, information, legal, and space.68 Table 1: Examples of Recent Chinese Gray Zone Activities - Military and Security: • Aggressive intercepts of aircraft in 2025 (Australian surveillance aircraft over Yellow Sea in Feb; Japanese surveillance aircraft in July). • PLA entered Taiwan's ADIZ 3,075 times in 2024. • CCG deliberate ramming of Philippine resupply vessels near Second Thomas Shoal (Sierra Madre) and Sabina Shoal in 2024. • Record 355/366 days in contiguous zone of Senkaku Islands in 2024; entering territorial waters on 42 days. • Warship pointed lasers at German reconnaissance aircraft in the Red Sea in July 2025. - Cyber: • Infiltration of U.S. critical infrastructure OT/IT networks by APTs Volt Typhoon and Salt Typhoon throughout 2025. • Daily average of 2.4 million cyberattacks targeting Taiwan Government Service Network in 2024. • Cyberattack on Palau's government in 2024. - Economic: • Politically timed trade investigations and tariffs during Taiwan's elections targeting DPP strongholds. • Investigation into Foxconn after Terry Gou announced presidential candidacy. • Threatening to block sale of Panama ports by CK Hutchison to U.S. investors. • Restricting critical minerals/processing technologies since Dec 2023. • Removing tariffs on all African countries except Eswatini. - Information: • Disinformation campaign following May 2025 India-Pakistan border crisis regarding French Rafale aircraft. • AI-generated news anchors and social media bots sowing divisions in the U.S. over social issues in 2024. - Legal: • Coast Guard authorized to detain foreign vessels/persons in claimed waters. • Antimonopoly reviews into Google, Nvidia; blacklisting PVH and Illumina. • Prolonged delays in undersea cable repair permits for Vietnam in 2023. • Secret detention of Vietnamese fishing boat in Spratlys (late 2024). • Arrest of three Filipino nationals for espionage in April 2025 in retaliation. - Space: • Rendezvous and proximity operations (2024) highlighting counterspace capabilities. • Commercial satellite firm with PLA links providing imagery to Houthis targeting Red Sea vessels (April 2025). China's Gray Zone Activities Threaten Global Communications by Cutting Undersea Cables China has increasingly engaged in undersea cable-cutting activities as a gray zone pressure tactic, with evidence of developing dedicated deep-sea cable-cutting tools (such as an electric cutting device capable of operating at 13,000+ feet unveiled by China Ship Scientific Research Center in Feb 2025). Chinese-owned shadow fleet vessels severed cables near Taiwan in early 2025, and a Chinese vessel severed two Baltic Sea cables in Nov 2024 after dragging its anchor for over 100 miles, suspected of acting under Russian intelligence direction. The United States and China Remain Locked in Strategic Competition Over the past year, the U.S.-China relationship has remained locked in strategic competition based not only on a direct rivalry but also on a clash of opposing systems. Beijing remains deeply suspicious of U.S. intentions and views Washington's measures as a concerted containment effort. China is amassing national power to position itself as a global leader in economy, technology, and military strength. High-level military dialogue has remained inconsistent. U.S. Defense Secretary Pete Hegseth first met Chinese Defense Minister Admiral Dong Jun in September 2025, but the Chairman of the Joint Chiefs of Staff and U.S. combatant commanders have yet to meet counterparts. Dialogues on AI, nuclear weapons, and space remain absent. A bipartisan congressional delegation led by House Armed Services Committee Ranking Member Adam Smith visited China in September 2025 to emphasize open military communications. China Leverages a Range of Actors to Pose Cyber Threats to the United States China remains the most active and persistent cyber threat to U.S. government, private sector, and critical infrastructure networks. State-sponsored groups (Volt Typhoon, Salt Typhoon, Silk Typhoon, Linen Typhoon, Violet Typhoon, Storm-2603) have pre-positioned within critical infrastructure, hacked high-profile political figures' telecom data, and targeted Microsoft SharePoint vulnerabilities. China increasingly relies on private contractor companies alongside the Ministry of Public Security (MPS) and Ministry of State Security (MSS) to conduct blended state-private cyber operations. China and Russia Deepened Their Relationship China and Russia deepened their strategic partnership during Xi's visit to Moscow for the 80th anniversary of the end of WWII, describing each other as "friends of steel." China remains a key source of dual-use electronics/components for Russian military systems, including drones and laser systems, while Russia provided advanced Su-35 fighter jets, S-400 systems, and nuclear submarine technology for China's Type 096 SSBN. Joint military drills (bomber patrols in East Asia, Maritime Security Belt with Iran, Bering Sea Arctic patrols) continue to expand. China Focused on Expanding Influence in the Indo-Pacific Region - Taiwan: Escalated pressure via frequent ADIZ incursions, the Strait Thunder-2025A exercise simulating total blockade and strikes on energy/port infrastructure, violent rhetoric against President Lai Ching-te, and united front co-optation initiatives. - South China Sea: Continued aggressive ramming and water cannon actions against Philippine resupply missions at Second Thomas Shoal and Sabina Shoal, an August 2025 collision between a CCG ship and PLA Navy destroyer near Scarborough Shoal, and the declaration of Scarborough Shoal as a "nature preserve" to assert jurisdiction. - Southeast Asia: Outreach presenting China as a reliable partner amid U.S. trade policy changes; Xi visited Vietnam, Malaysia, and Cambodia in April 2025; backfilling aid gaps. - Pacific Islands: Hosted the Third China-Pacific Island Countries Foreign Ministers' Meeting in May 2025; expanded maritime security cooperation, fisheries inspections, and strategic partnership with Cook Islands. China Supported, but Remained Wary of, North Korea's Activities Kim Jong Un and Xi Jinping met in September 2025. Despite unease over Russia-DPRK military cooperation, China provided diplomatic cover for North Korean missile tests and enabled sanctions evasion through front companies and shadow networks. China Endeavored to Draw Japan and South Korea Closer China attempted to exploit U.S. tariff disputes to drive wedges between the U.S. and allies, while maintaining aggressive incursions into Japan's Senkaku contiguous zone (record 355 days in 2024) and engaging South Korea under new President Lee Jae-myung. India and China De-escalate Tensions at the Border and Beyond Modi and Xi agreed to border patrol schedules at Depsang and Demchok along the Line of Actual Control (LAC) in late 2024/2025 and held talks at the Tianjin SCO summit, though militarization and strategic rivalry continue. China Opportunistically Used Pakistan's Military Crisis During the May 2025 4-day India-Pakistan border clash, Pakistan utilized Chinese HQ-9, PL-15, and J-10 systems. China used the conflict to field-test weaponry, pitch J-35 and KJ-500 exports, and run disinformation campaigns against French Rafale fighters. China Deepened Relationships in Central Asia China leveraged the Second China-Central Asia Summit (June 2025) and SCO meeting to advance the Middle Corridor trade route, agricultural projects, and GSI counterterrorism infrastructure (including facilities in Tajikistan). China Continued Building Relationships in the Middle East & Africa - Middle East: Maintained economic lifelines to Iran (importing 90% of Iranian oil exports, supplying missile precursor chemicals and satellite imagery to Houthis) while expanding tech/AI/robotaxi investments in GCC states (Saudi Arabia, UAE, Qatar). - Africa: Largest PLA joint military exercises to date (Tanzania, Mozambique, Egypt); leveraged FOCAC 2025 to offer zero tariffs to 53 African nations and backfill aid; expanded critical mineral mining and infrastructure (Tazara corridor revival) despite severe environmental disasters like the Feb 2025 Zambian mine spill; expanded space diplomacy; pressured South Africa and Somalia against Taiwan. Latin America, Caribbean, Europe, and Arctic - Latin America: Xi visited Peru and Brazil; inaugurated Chancay Port; expanded China-CELAC Action Plan (2025–2027) with $9B credit; sought stakes in Panama Canal ports. - Europe: Strained ties over Chinese support for Russia's war in Ukraine, leading to EU sanctions on Chinese banks and China's retaliatory rare earth controls; scaled back EU-China summit. - Arctic: Expanded Northern Sea Route (NSR) commercial shipping and scientific expeditions with icebreakers (Tan Suo San Hao), raising dual-use intelligence concerns. International Institutions & Religious Interference - Multilateral Institutions: China leveraged the UN, WHO ($500M donation), UNESCO, ISA, ITU, BRICS, and SCO to promote alternative governance models (Global Governance Initiative, China-SCO AI Cooperation Center). - Religious Interference: Attempted to control the Dalai Lama's reincarnation process and pressured the Vatican regarding bishop appointments and diplomatic recognition of Taiwan following the succession of Pope Leo XIV. Contains full bibliographic citations (notes 1 through 372) referencing official government speeches, White Papers, intelligence assessments, news reporting, academic journals, and think tank analyses from 2024 and 2025 supporting Chapter 2.