China's Policy and Intellectual Debates | Sinification: January 2026

Source: Sinocism

Update: Feb 3rd, 2026 

Sinification is a terrific resource for understanding how domestic and international affairs are being debated by the Chinese establishment, and for getting a better sense of where China may be heading. Sinification’s team track, translate, and analyze key debates shaping thought and policy in China, adding the context needed to understand why they matter. I’m very pleased to be able to share this year’s first edition with Sinocism readers.

In 2026, Sinocism and Sinification will cooperate on monthly editions for Sinocism’s subscribers, highlighting the internal discussions and policy thinking that matter in a system that remains so stubbornly opaque. More on Sinification, including weekly subscription options, is available here. — Bill

International Relations

A noteworthy development in January’s foreign relations discourse is the emergence of more assertive calls to recalibrate China’s diplomatic posture, against a backdrop of overwhelmingly cautious reactions to the Maduro operation. The position taken by the hawkish Jin Canrong is particularly striking: moving beyond his earlier restraint on Venezuela, he warns that China will struggle to compete with the United States for influence among small or middle powers through economic engagement alone, absent credible security guarantees.

Jin’s proposal is unusual. While many other commentators similarly interpret declining cohesion among Western states as an opportunity for China to assume greater global responsibility, what such responsibility would entail remains vague in their formulations. Enthusiasm for engaging US allies is muted, and Europe-focused commentaries are often openly scornful of the continent’s continued dependence on the illusory “paradise” of security guarantees from an unpredictable—and potentially coercive—partner. Only Feng Yujun and the liberal scholar Xu Jilin depart from this prevailing mood, with Xu offering an affirmative reading of Mark Carney’s Davos “middle powers declaration” as signalling the rise of a strategically significant “second world”.

Most scholars argue that China is better served by attracting partners through a posture of defending globalism, rather than mirroring any Monroeist drift towards spheres of influence, and they generally reject any direct analogy between Venezuela and Taiwan. One notable outlier is the tub-thumping scholar Zhang Weiwei, who suggests that Trump’s Monroeism creates an opening for China to “act decisively” on Taiwan should an opportune moment arise—an argument the retired scholar Xiao Gongqin explicitly cautions against as a dangerous misreading of the strategic environment. A recent Qiushi analysis of the US National Security document by Ni Feng of CASS offers an authoritative framing closer to Xiao’s position, portraying the appearance of American retreat as a “smokescreen” for a continued war of attrition against China.

Chinese Economy

Economics analyses are dominated by the dual issues of “strong supply; weak demand” (供强需弱), officially recognised at December’s Central Economic Work Conference. Responses to this signalling fall into two main camps, proposing either large-scale macroeconomic rebalancing or more technical fixes.

Advocates of macroeconomic rebalancing call for reallocating state investment from manufacturing towards domestic consumption in order to strengthen demand, partially compensating for the limited scope for further export-led growth in an already high-surplus economy. This view is expressed by several influential economists who have advised the government, including Peking University’s Lu Feng and Huang Yiping, as well as CICC’s Peng Wensheng who likens the supply–demand imbalance to pre-Depression Fordist America.

However, although such rebalancing through “internal circulation” seems intuitive, it remains unclear how the 15th Five Year Plan’s emphasis on building a high-tech “complete industrial system” can be effectively anchored in household consumption—a tension that only Huang acknowledges explicitly in his discussion of services.

By contrast, the camp favouring technical fixes does not view a reallocation of resources from the supply to the demand side as the core solution. Renmin University’s Di Dongsheng attributes deflation and unemployment primarily to an economy-wide liquidity shortfall rather than overinvestment, and proposes lifting restrictions on the PBoC’s purchase of government bonds to enable fiscal expansion. Tsinghua’s Li Daokui advocates production-quota trading and faster overseas expansion to curb destructive price wars among Chinese manufacturers, alongside steering investment towards more profitable manufacturing. On the trade front, Xu Mingqi argues that, rather than changing the approach to investment, reducing institutional barriers to imports should be the main focus in addressing the surplus.

Society and Governance

Other scholars interpret deflation and unemployment through a social lens, focusing on structural failings in the education system and the gig economy. The Macau-based historian Wang Di argues for education reform on the scale of the Late-Qing’s abolition of the civil service exams, contending that the current system primarily serves an elite 20%. Peking University’s Zhang Dandan emphasises the need to institutionalise social protections to prevent the estimated 80% of delivery drivers who earn little on irregular hours from sliding into permanent precarity.

On local government, scholars observe a clear trend towards the increased centralisation of local administrative functions. Lü Dewen relates this shift to political missteps such as the ban on coal heating in Hebei, while Nie Huihua suggests that technology and artificial intelligence may drive a potentially constructive “flattening” of bureaucratic hierarchies.

Technology

On semiconductors and AI, discussion has centred on policy responses to Meta’s acquisition of Manus, as well as China’s broader posture towards foreign chip supply. Gu Wenjun, of chip research consultancy ICwise, highlights a tension between the drive for export substitution in chips and the need to preserve access to advanced hardware as the material foundation of competitiveness in AI.