China Policy Monitor No. 1663

Related Categories: Democracy and Governance; Intelligence and Counterintelligence; International Economics and Trade; Public Diplomacy and Information Operations; Science and Technology; Corruption; AI; China; India; South America

TOP GENERAL UNDER INVESTIGATION FOR "GRAVE VIOLATIONS"
China's defense ministry has launched an investigation into the country's highest-ranking PLA general for "grave violations of discipline and law." Authorities provided no specifics about the allegations against General Zhang Youxia, 75, vice-chairman of the Central Military Commission (CMC), and long considered a close Xi Jinping ally. General Liu Zhenli, another senior officer, is also under investigation. Speculation regarding Zhang and Liu intensified after both missed a high-level party event in December. The CMC now has only two of its original seven members: Chairman Xi and Zhang Shengmin, head of military discipline. (BBC, January 24, 2026)

CHINA EXPANDS POWER GENERATION FOR AI
Beijing is aggressively expanding power generation, with capacity projected to surge 50% between 2024 and 2030. China added 470 GW of capacity last year, dwarfing the 64 GW projected for the United States. China's total power generation surpassed that of the U.S. in 2013, and in 2025 it reached 10 trillion kWh—140% higher than U.S. output. American AI data centers face a projected 44 GW shortfall by 2028. Renewables comprise 80% of China's new capacity, as compared to 60% in America. Simultaneously, Beijing is constructing 27 nuclear reactors, poised to eclipse U.S. nuclear capacity by 2030. Nvidia CEO Jensen Huang noted in November that "China is nanoseconds behind America in AI." (Nikkei Asia, January 21, 2026)

CHINA "SHOT ITSELF IN THE FOOT" WITH THE ONE CHILD POLICY
China's birth rate hit record lows last year amid four consecutive years of population decline. The brutal "One-Child Policy" utilized forced abortions, mass sterilizations, and female infanticide as parents prioritized male heirs. Facing a shrinking workforce and aging populace, Beijing scrapped the policy in 2015. "China demographically shot itself in the foot," notes Mei Fong, author of One Child: The Story of China’s Most Radical Experiment. The "little emperor" generation now faces immense pressure as sole providers for two parents and four grandparents. This "4-2-1" family structure has triggered widespread anxiety and depression. "The little emperor at some point becomes the slave," Fong explains. (Associated Press, January 20, 2026)

PERU'S PRESIDENT HAD SECRET MEETINGS WITH CHINESE BUSINESSMEN
Peru's President, Jose Jeri, is vowing to remain in office despite a mounting controversy involving his undisclosed meetings with Chinese businessmen. Known as "Chifagate," the scandal centers on late-night undocumented visits to a Chinese restaurant and a wholesale shop in Lima in violation of official protocols. Leaked footage shows Jeri and Interior Minister Vicente Tiburcio arriving at businessman Zhihua "Johnny" Yang's restaurant around midnight on December 26; another video puts Jeri at Yang's shop on January 6, hours after authorities closed it for regulatory breaches. Yang, a 20-year veteran of Peru’s security sector, previously sought a $30 million bus surveillance contract. Government officials initially claimed the meetings were about "Friendship Day" preparations, but later said they were "private." Meanwhile, Ji Wu Xiaodong, a PRC national under house arrest for illegal logging, made several visits to the presidential palace. Addressing Congress, Jeri denounced the videos as a "political operation" intended to destabilize his government ahead of elections. "I will not resign," he declared. (South China Morning Post, January 23, 2026)

CHINA BUYS MORE INDIAN GOODS, BUT LARGE TRADE DEFICITS PERSIST
In the first nine months of the fiscal year, China's imports from India rose 36.7% to $14.25 billion, with December shipments to China jumping 68% to $2.05 billion. Exports of marine products exceeded $1 billion through November, while electronics saw "sharp spikes" — printed circuit board shipments rose 2,000% to $418 million and mobile components climbed 82%. Despite these gains, Beijing's trade surplus remains a concern in Delhi. Between April and December 2025, Chinese exports to India reached $95.95 billion, widening India's trade deficit to $81.7 billion. Despite President Trump's August tariffs, which hit Indian goods with 50% duties, the U.S. remains India's primary export market. (Nikkei Asia, January 22, 2026)