Analytics and Reports, China Analytics, Country Analytics

SITREP China – Week Ending February 06, 2026

Executive Summary

The strategic landscape of the People’s Republic of China (PRC) during the reporting period ending February 06, 2026, is characterized by a high-stakes convergence of internal political consolidation and external strategic maneuvering. The primary development of the week is the comprehensive purge of the senior leadership within the People’s Liberation Army (PLA), specifically the formal investigation of Central Military Commission (CMC) Vice Chairman Zhang Youxia and Chief of the CMC Joint Staff Department Liu Zhenli.1 This action, framed as a “political rectification” to ensure the military’s readiness for the 2027 centenary modernization goals, suggests a profound crisis of confidence in the high command’s ability to execute a high-intensity Taiwan contingency.2 The removal of Zhang, a long-time confidant of President Xi Jinping, indicates that the “Chairman Responsibility System” is being enforced with unprecedented severity, prioritizing absolute political loyalty over operational experience as the risk of regional conflict increases.4

Diplomatically, Beijing has navigated a complex tri-polar interaction with Washington and Moscow. A wide-ranging phone call between President Xi and U.S. President Donald J. Trump on February 4 highlighted a transactional attempt to stabilize bilateral ties through energy and agricultural deals, even as the U.S. administration escalates its efforts to isolate Iran—a critical Chinese energy partner.7 Simultaneously, the expiration of the New Strategic Arms Reduction Treaty (New START) on February 5 has introduced a period of significant strategic uncertainty. While Beijing expresses regret over the treaty’s collapse, it continues to reject any trilateral arms control framework that would include its own rapidly expanding nuclear arsenal.9

In the maritime domain, the PRC has unveiled a sophisticated new “gray zone” tactic involving the mobilization of over 2,000 maritime militia vessels to create “floating walls” in the East China Sea.12 These maneuvers, alongside the “Justice Mission 2025” exercises and the first confirmed PLA drone violation of Taiwanese territorial airspace, signify a maturation of blockade tactics designed to isolate Taiwan while remaining below the threshold of conventional warfare.15 Economically, despite a record $1.2 trillion trade surplus, China faces an increasingly organized Western effort to decouple from its critical minerals supply chains, led by the newly established Forum on Resource Geostrategic Engagement (FORGE).19 The internal legislative environment is also tightening, with the 2026 Cybersecurity Law amendments granting the state sweeping extraterritorial powers to penalize foreign entities deemed to threaten national security.22

Internal Political Stability and Military Governance

The Purge of the Central Military Commission

The internal stability of the Chinese Communist Party’s (CCP) relationship with its military wing, the PLA, has entered a period of acute disruption. On January 25, 2026, the PRC announced formal investigations into General Zhang Youxia, the first-ranked Vice Chairman of the CMC, and General Liu Zhenli, the Chief of the Joint Staff Department.1 This development is significant not only because of the rank of the individuals involved but because of their historical proximity to General Secretary Xi Jinping. Zhang Youxia, in particular, was widely considered one of Xi’s most trusted military allies, with a shared family history rooted in Shaanxi province and a career that bridged the gap between the revolutionary generation and the modern technocratic military.6

The official justification for these investigations centers on “political threats” and the failure to foster an environment conducive to the achievement of the 2027 modernization milestones.1 Unlike previous waves of purges that targeted former CMC members such as He Weidong and Li Shangfu—who were explicitly accused of “job-related crimes” like bribery and the abuse of power—the charges against Zhang and Liu are notably abstract.1 They are accused of fostering the “conditions” for corruption and “severely trampling” the Chairman Responsibility System.3 This shift in rhetoric suggests that the current purge is less about financial malfeasance and more about a strategic disagreement or a perceived failure to implement Xi’s specific directives regarding the readiness for a Taiwan invasion.1

Key Leadership Purges and Structural Changes (2023-2026)
OfficialFormer PositionReported Status / Allegations
Zhang YouxiaCMC Vice Chairman (1st Rank)Under investigation for political threats to 2027 goals 1
Liu ZhenliChief of CMC Joint StaffUnder investigation for fostering conditions for corruption 1
He WeidongFormer CMC Vice ChairmanReported suicide in early 2026 following corruption probe 1
Li ShangfuFormer Defense MinisterRemoved for bribery and procurement scandals 1
Li YuchaoFormer Rocket Force CmdrRemoved during 2023-24 Rocket Force cleanup 2
Zhang ShengminCMC Discipline InspectionEmerging as the primary enforcer of military loyalty 3

The implications of these purges extend to the core of the PLA’s command-and-control capabilities. By removing Zhang Youxia, one of the few senior officers with actual combat experience (from the 1979 Sino-Vietnamese War), Xi Jinping has significantly hollowed out the professional “command” knowledge of the CMC.3 The commission is now increasingly dominated by political enforcers rather than operational strategists. Intelligence assessments indicate that this may lead to a “confidence crisis” within the PLA, where lower-level officers become reluctant to provide honest assessments of combat readiness for fear that any identified weakness will be interpreted as political disloyalty.3

The 2027 Centenary Goal and Combat Readiness

The driving force behind this internal upheaval is the looming 2027 deadline, by which time the PLA is expected to have achieved the capability to execute a successful invasion of Taiwan.1 The “Justice Mission 2025” exercises conducted in late December 2025 provided a window into the CCP’s dissatisfaction with the military’s progress.17 These exercises, while large in scale, revealed ongoing challenges in joint-theater operations and the integration of the various service branches under a single command structure.18

The purge of the high command is interpreted by some analysts as a “correction” designed to increase Xi’s control over the military ahead of this critical window.3 There are rumors that Xi became disillusioned with Zhang Youxia’s performance in rooting out deep-seated corruption in the equipment procurement chains, particularly after the Rocket Force scandals of 2023-2024 revealed that critical systems, including nuclear silos, were compromised by shoddy construction and embezzlement.2 By making an example of his closest military confidant, Xi is signaling to the entire PLA that performance and loyalty are inextricably linked to personal survival.3

However, the “rebirth through changing feathers” program—as described in PLA media—carries significant operational risks.26 The removal of senior generals creates a “churn” that disrupts the long-term planning required for a cross-strait campaign.3 Furthermore, it suggests that the PLA may currently be viewed as “unready” for major tasks, as the leadership transition period inevitably creates a period of tactical stasis.3

Diplomatic Strategy and External Relations

The Xi-Trump Virtual and Telephonic Engagement

On February 4, 2026, President Xi Jinping engaged in two critical diplomatic interactions: a virtual meeting with Russian President Vladimir Putin and a subsequent wide-ranging phone call with U.S. President Donald J. Trump.8 The call with Trump was described by the U.S. side as “excellent,” “long,” and “thorough,” focusing heavily on the transactional aspects of the relationship.8 Trump’s social media readouts emphasized agricultural and energy deals, specifically pointing to China’s interest in increasing imports of American soybeans, oil, and gas.8

Proposed China-U.S. Agricultural and Energy Targets (Feb 2026)
CommodityTarget / Discussion Point
SoybeansIncrease to 20M tonnes (current season); 25M tonnes (next season) 8
Crude Oil & LNGBeijing exploring significant purchase increases to offset trade imbalances 8
Aircraft EnginesDiscussions on maintaining deliveries amid technology restrictions 8
Iran Tariff PenaltyUS warning of 25% tariff on countries continuing trade with Tehran 7

Despite the seemingly positive tone regarding trade, the underlying geopolitical friction remains acute. President Trump used the call to pressure Beijing to isolate Iran, following the 12-day conflict in June 2025 and the subsequent U.S. bombing of Iranian nuclear sites.7 Trump reiterated his threat to impose a 25% tariff on all imports from countries that continue to do business with Iran.8 Given that China conducted approximately $32 billion in trade with Iran in 2024, this poses a direct threat to Chinese energy security and its strategic interests in the Middle East.7

Xi Jinping’s response to these pressures emphasized “stability” and “red lines”.8 According to the Chinese readout, Xi stressed that the Taiwan question remains the “most important” issue in the relationship and urged Washington to handle arms sales with “extreme caution”.8 The Chinese statement notably omitted any confirmation of Trump’s planned visit to Beijing in April, suggesting that Beijing is withholding this high-profile symbolic win until it receives concrete assurances on tariff reductions or the easing of technology export controls.7

The Russia-China Strategic Alignment

The virtual meeting between Xi and Putin, held just hours before the Trump call, served to underscore the “no-limits” partnership that continues to define the anti-Western axis.8 Foreign Minister Wang Yi’s earlier meeting with Russian Security Council Secretary Sergei Shoigu on February 1 further cemented this, with Wang stating that bilateral relations could “break new ground” in 2026.30 Russia has reaffirmed its “consistent and unwavering” support for China on the Taiwan issue, a critical diplomatic asset as Beijing faces increasing pressure from the G7.31

The strategic coordination between Beijing and Moscow is increasingly visible in their joint opposition to U.S.-led mineral and technology blocs. While the U.S. administration attempts to peel China away from its energy ties to Iran and Russia, Beijing is leveraging its economic “backfilling” of the Russian economy to ensure a stable supply of resources that are immune to Western sanctions.31 However, there are indications of mutual concern regarding the “unpredictability” of the second Trump administration, which has led both leaders to deepen their nuclear and high-technology coordination as a hedge against a potential breakdown in global strategic stability.6

The Expiration of New START and the Nuclear Order

February 5, 2026, marked the formal expiration of the New Strategic Arms Reduction Treaty (New START) between the United States and Russia.9 China’s Ministry of Foreign Affairs expressed “regret” over the treaty’s collapse, warning of negative repercussions for the international arms control regime.9 The expiration leaves the world’s two largest nuclear arsenals unconstrained for the first time in over fifty years.10

Beijing’s position on nuclear arms control remains a point of significant contention with Washington. The Trump administration has repeatedly insisted that any future nuclear framework must include China, citing the rapid expansion of the PLA’s nuclear forces, including the construction of hundreds of new ICBM silos.11 Beijing, however, maintains that its arsenal is at a “minimum level” required for national security and that it adheres to a “no first use” policy.10 The U.S. State Department’s statement to the Conference on Disarmament on February 5 explicitly rejected this claim, arguing that China is expanding its arsenal at a scale and pace not seen in over half a century and that a bilateral treaty with only Russia is “inappropriate” in 2026.11

Maritime Strategy and Cross-Strait Coercion

The “Floating Wall” of the Maritime Militia

One of the most striking developments of the reporting period is the deployment of a massive “floating wall” of fishing vessels in the East China Sea.12 Geospatial data analysis by firms like ingeniSPACE and Starboard Maritime Intelligence confirmed that approximately 2,000 Chinese fishing boats—acting as part of the People’s Armed Forces Maritime Militia (PAFMM)—formed parallel barriers stretching over 460 kilometers.12

Characteristics of Recent Maritime Militia Mobilizations
DateEstimated Vessel CountFormation & Location
Dec 25-27, 2025~2,000 vesselsInverted L-shape; 460km length; NE of Taiwan 12
Jan 9-12, 2026~1,400 vesselsRectangular strip; 320km length; East China Sea 13
Target / PurposePractice BlockadeSignal capability to impede maritime logistics routes 12

These formations were so dense that commercial cargo ships were forced to zigzag or divert entirely around the “maritime barrier”.12 Experts suggest that these maneuvers were exercises to test the mobilization and command of civilian vessels for use in a future blockade or “quarantine” of Taiwan.12 By using fishing vessels, which carry a civilian profile under international law, Beijing creates a “gray zone” that complicates the rules of engagement for the U.S. and Taiwanese navies.12 If these vessels are used to blockade Taiwan’s ports, any military action against them by Western forces could be framed by PRC propaganda as an attack on “peaceful fishers,” providing a pretext for further escalation.12

Justice Mission 2025 and Blockade Simulation

The “Justice Mission 2025” exercises (conducted in late December and early January) represent a maturation of the PLA’s blockade strategy.17 These drills, which involved the Army, Navy, Air Force, and Rocket Force, focused on:

  • Sea-Air Combat Readiness: Establishing regional air dominance and sea control in eight zones surrounding Taiwan.18
  • Interdiction of Energy Imports: Simulating a blockade of Taiwan’s major port cities (Kaohsiung and Keelung) to choke off LNG and oil imports.18
  • Decapitation Strikes: Practicing special operations raids to capture or eliminate Taiwan’s political leadership, integrated with lessons learned from recent global conflicts.16

A significant escalatory step occurred on January 17, when a PLA surveillance drone violated Taiwanese territorial airspace over Pratas (Dongsha) Island.15 This is believed to be the first such confirmed violation in decades and is seen as a “test” of Taiwan’s air defense response.16 By normalizing drone flights over outlying islands, the PLA is engaging in “lawfare,” attempting to erode Taiwan’s sovereignty through the creation of new de facto precedents.15

Political Subversion: The KMT Visit to Beijing

While the PLA exerts military pressure, the CCP is simultaneously intensifying its efforts to influence Taiwan’s internal politics. From February 2 to 4, 2026, a high-level delegation from the Kuomintang (KMT), led by Deputy Chairman Hsiao Hsu-tsen, visited Beijing.1 This was the first such exchange since 2016 and represents a major push by the CCP to co-opt the Taiwanese opposition.1

The delegation met with Wang Huning, the Chairman of the CPPCC and the CCP’s top official for Taiwan policy, and Song Tao, the TAO Director.1 The meetings focused on the “1992 Consensus” and the “common family of the Chinese nation”.1 The forum concluded with 15 recommendations for cross-strait cooperation in areas like tourism and industrial exchange.1

KMT-CCP Forum Recommendations (Feb 2026)
CategorySpecific Recommendation / Target
TourismResumption of large-scale mainland tour groups to Taiwan 1
IndustryJoint development of green energy and semiconductor supply chains 1
EnvironmentCoordinated disaster prevention and environmental monitoring 1
Defense PolicyPromotion of the 1992 Consensus as the basis for regional stability 1

The CCP’s strategy is to legitimize the KMT as the primary interlocutor for cross-strait peace, thereby bypassing and isolating the ruling DPP government.1 This political warfare is having tangible effects in Taipei, where the KMT and the Taiwan People’s Party (TPP) have jointly blocked President William Lai’s version of the defense budget ten times, favoring a version that significantly cuts funding for asymmetric warfare systems, including drones and missile defense.1

Economic Statecraft and the Resource War

China Shock 2.0 and the Trade Surplus

China’s economic strategy remains focused on export-led growth to offset a sluggish domestic economy. In 2025, the PRC recorded a trade surplus of $1.2 trillion, driven by a 5.5% increase in exports.19 While the U.S. administration’s tariffs have successfully reduced direct exports to the United States by 20%, Chinese manufacturers have effectively “pivoted” to other regions.19

Shift in China’s Export Destinations (2025-26)
RegionTrade Trend / Growth
Southeast Asia (ASEAN)+32.7% growth; $26.3B in low-value exports 19
European Union (EU)+41.8% growth; $26.9B (before de minimis removal) 19
United States-20.0% decline; $419.5B total 19
Global SurplusReached record $1.2 Trillion 19

The “China Shock 2.0” is causing significant friction with the EU, which is slated to eliminate its de minimis customs exemption in 2026 to curb the flood of low-cost Chinese goods.19 Beijing’s willingness to exploit the “America crisis”—the perception that the U.S. is withdrawing from global trade leadership—is tempered by the reality of its own demographic and debt woes.35 However, in the short term, Beijing is hitting back hard against individual trade war measures, having seen the U.S. retreat in certain sectors in late 2025.35

The Critical Minerals Conflict: FORGE vs. China Dominance

On February 4, 2026, the Trump administration launched a major counter-offensive against China’s dominance of the critical minerals market.20 During a ministerial meeting in Washington, Vice President JD Vance and Secretary of State Marco Rubio unveiled the Forum on Resource Geostrategic Engagement (FORGE), a successor to previous mineral security partnerships.20 The goal of FORGE is to create a preferential trade zone of allies that can guarantee supply chains immune to Chinese disruption.20

New U.S. Critical Minerals Frameworks / MOUs (Feb 4, 2026)
CountryType of AgreementKey Commodity Focus
United KingdomMOU / FrameworkProcessing and Mining 38
PhilippinesFrameworkNickel and Copper 20
ArgentinaFrameworkLithium 20
UAEMOU / FrameworkStrategic Investment 20
UzbekistanMOU / FrameworkRare Earths 38
GuineaMOU / FrameworkBauxite and Iron Ore 38

FORGE intends to implement “border-adjusted price floors” to protect Western mining projects from China’s tactic of “market flooding,” where Beijing drops prices to bankrupt competitors before ratcheting them up once a monopoly is secured.21 Simultaneously, the U.S. has launched “Project Vault,” a plan for a strategic rare earth stockpile funded with $10 billion.37 Beijing has responded by calling these moves the work of “small cliques” that undermine the international trade order.37 In a retaliatory move, China has tightened its own export controls on dual-use items to Japan, leading to a significant search by Tokyo for alternative rare earth sources.1

Regulatory Tightening: The 2026 Cybersecurity Law

The PRC’s internal legislative environment for foreign businesses has become increasingly hostile. On January 1, 2026, the first major overhaul of the Cybersecurity Law (CSL) since 2017 came into force.22 These amendments include:

  • Massive Financial Penalties: Fines for violations involving “very serious consequences”—such as large-scale data leaks or loss of critical infrastructure function—can now reach RMB 10 million ($1.41 million).22
  • Streamlined Enforcement: Authorities no longer need to issue a warning before imposing fines, allowing for immediate financial penalties for even minor breaches.22
  • Extraterritorial Reach: The law now explicitly targets “overseas actors” whose activities are deemed to endanger China’s cybersecurity, including the power to freeze assets and revoke business licenses.23
  • AI Ethics and Surveillance: A new mandate for the state to improve ethical norms for AI and strengthen security risk monitoring, providing a legal basis for the further regulation of foreign AI models.23

These changes reflect Beijing’s heightened focus on “data sovereignty” and its desire to control the digital landscape as part of its broader competition with the United States. Foreign firms, particularly in the biotechnology and high-tech sectors, face an increasingly complex compliance environment where “security” is defined broadly and enforced unilaterally.23

Regional Security and Defense Proliferation

Submarine Proliferation in the Indian Ocean

China is aggressively expanding its naval footprint in the Indian Ocean through high-end defense exports to key partners. The Pakistan Navy is set to receive its first Chinese-designed Hangor-class (Type 039A derivative) submarine in 2026.45 This $5 billion deal is the largest arms export agreement in Chinese history and includes the delivery of eight submarines by 2028.45

Hangor-Class (Type 039A) Submarine Deal Details
MetricSpecification / Detail
Total Contract Value~$5 Billion 45
Number of Vessels8 (4 built in China, 4 in Pakistan) 46
First Delivery2026 (Wuhan-built unit) 45
Primary ArmamentYJ-18 Anti-ship missiles; Torpedoes 45
PropulsionDiesel-electric with AIP (Air-Independent Propulsion) 48

This deal provides Beijing with a secondary foothold in the Indian Ocean, as the Hangor-class is significantly more sophisticated than the Russian Kilo-class submarines operated by India and Iran.45 Similarly, Egypt is in advanced negotiations for the acquisition of Type 039A/B submarines, part of a “comprehensive strategic partnership” that includes the transfer of drone technology (Wing Loong-1D) and local manufacturing hubs for advanced radar systems.50

Northeast Asian Friction and the Japan-Korea Pivot

The relationship with Japan has continued to deteriorate following remarks by Prime Minister Sanae Takaichi suggesting that a Chinese attack on Taiwan would be a “survival-threatening situation” for Japan.16 In response, China has utilized the maritime militia formations in the East China Sea as a show of force against Tokyo.16 South Korea and Japan, in a rare display of unity, have agreed to resume bilateral naval search-and-rescue exercises for the first time in nine years to counter the growing security threats from China and North Korea.51

Beijing’s use of trade as a weapon—specifically the suspension of dual-use goods to Japan—is part of a broader “coercive signaling” campaign.1 While China has approved some Japan-bound exports of rare earths under tightened controls in January, observers believe this is a tactical maneuver to avoid pushing Japan too far into the U.S. orbit ahead of the April summit.42

Intelligence Assessment and Strategic Outlook

Crisis of Command and the Risk of Miscalculation

The purge of the CMC senior leadership marks a critical inflection point for the PLA. The removal of professional commanders in favor of political loyalists suggests that Xi Jinping is more concerned with the internal stability of the military than its immediate operational efficiency.3 This “paranoia” at the top of the CCP structure could lead to a strategic shock, where decision-making becomes opaque and based on flawed or “filtered” reporting from a high command that is afraid to deliver bad news.3

In the short term, this instability likely decreases the probability of a deliberate, large-scale invasion of Taiwan, as the leadership churn degrades the complex planning required for such a campaign.3 However, it increases the risk of accidental escalation, as the lack of trusted intermediaries between the PLA and the political leadership means that a local incident (such as a drone violation or a maritime militia collision) could rapidly spiral into a conventional conflict.3

The Bifurcation of Global Supply Chains

The launch of FORGE and the expiration of New START signal the end of the post-Cold War era of global integration. China is successfully diversifying its export markets to ASEAN and the Global South, but it remains vulnerable to Western-led efforts to secure critical minerals and high-end technology.19 The next twelve to eighteen months will likely see a hardening of “bloc-based” economic policies, where China leverages its dominance in green technology (EVs, batteries) to create its own dependencies in Europe and Asia while the U.S. and its partners build a “fortress economy” for critical minerals.35

Outlook for the April 2026 Summit

The upcoming visit of President Trump to Beijing in April 2026 is the most significant variable in the immediate term. Beijing is expected to maintain a “subdued” military posture near Taiwan—avoiding massive, named exercises—to facilitate a successful “business trip” for Trump.24 However, the “floating wall” of the maritime militia demonstrates that China is not backing down; it is simply shifting its tactics to lower-profile “gray zone” operations that are harder for the U.S. administration to frame as a violation of the current truce.12 The ultimate success of the summit will depend on whether Trump’s transactionalism can find common ground with Xi’s non-negotiable red lines on Taiwan and data sovereignty.8

Conclusion

The situation report for the week ending February 6, 2026, portrays a China that is aggressively fortifying its internal and external positions. The purge of the CMC senior leadership is a definitive sign of Xi Jinping’s move toward absolute, personalized control of the military, even at the cost of operational readiness. Externally, China is deploying sophisticated new maritime militia tactics to refine its blockade capability while using its record trade surplus to fund a global defense and resource strategy that bypasses Western-led orders. As the world enters a period of unconstrained nuclear arsenals and mineral-based trade blocs, the PRC is positioning itself as the central pole of an alternative global system, betting that Western domestic instability will provide the necessary opening for its final resolution of the Taiwan question.

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