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THIS WEEK:

A new direction for carbon, the party takes summer vacation in Beidaihe, the PLA celebrates its 97th anniversary, internet identification system and its discontents, and Beijing expands service sector support to revitalize demand.

1. A New Direction for Carbon

What Happened: Last Friday, China’s State Council released a plan to speed up the creation of a system to control total carbon emissions.
 
A New Path: The plan states that China will set a binding target on reducing carbon emission intensity (emissions per unit of GDP) and will soft launch a target to control its total emissions during the 15th Five-Year Plan (2026–2030). After reaching peak emissions before 2030, controlling absolute carbon emissions will become China’s primary climate priority.
 
Controlling Carbon: China’s previous climate targets emphasized controlling energy consumption and carbon intensity, as opposed to carbon emissions and absolute carbon emissions, respectively. But as China’s renewable energy sector grows and its emissions peak, this approach limits future renewable energy growth and is insufficient to bend the emission curve. To ensure a smooth transition, the plan indicates that improvements will need to be made to carbon emissions data, accounting, and assessment mechanisms. 
 
Why It Matters: Pivoting toward an absolute carbon emissions target during the 15th Five-Year Plan aligns with China’s international commitment to peak its carbon emissions before 2030. Following this, the hope is that absolute carbon emissions will start to decline from their peak en route to reaching carbon neutrality by 2060.
 
By Li Shuo, Senior Fellow, Center for China Analysis, and Taylah Bland, Fellow, Center for China Analysis
 
Learn More: Read Charting China’s Path to Its 2035 Nationally Determined Contribution by Taylah and ASPI’s Lauri Myllyvirta.

2. The Party Takes Summer Vacation in Beidaihe

What Happened: On August 3, Chief of Staff Cai Qi visited with a group of prominent Chinese experts from various sectors at a Party-arranged summer vacation in Beidaihe, a beach resort in northern China.

Political Recognition: Since 1987, the Party has invited specific experts in fields such as the natural sciences, engineering, philosophy, social sciences, culture, and arts to a summer vacation in Beidaihe as a way of showing political appreciation. During the retreat, the experts participate in group discussions and exchanges with a specific political theme, as well as take part in recreational activities.

Patriotic Struggle: This year’s theme was “patriotic struggle.” During the meeting, Cai urged the attendees to study and implement the guiding principles of the recent Third Plenum while upholding Xi’s core leadership to achieve China’s great rejuvenation through Chinese-style modernization. One of this year’s prominent attendees was Andrew Yao, dean of the School of Artificial Intelligence at Tsinghua University. Yao was a naturalized U.S. citizen who received a PhD from Harvard University in 1972 and worked at MIT, Stanford, UC Berkeley, and Princeton. In 2015, Yao renounced his U.S. citizenship and became an academician at the Chinese Academy of Sciences as a practitioner of Xi Jinping’s slogan, “Science has no borders, but scientists have a motherland.”

Why It Matters: The Beidaihe retreat, traditionally seen by China watchers as an important gathering of current and retired top leaders that could influence China’s politics, has become more secretive in the Xi era. Yet it still provides a unique glimpse into who and what is important for the Party when it comes to development issues.

By Lobsang Tsering, Senior Research Associate on Chinese Politics, Center for China Analysis

Learn More: Neil Thomas, CCA Fellow on Chinese Politics, reviewed the outcomes of the recent plenary session in Why Did Xi Jinping Stick to His Guns at China’s Third Plenum?

3. The PLA Celebrates Its 97th Anniversary

What Happened: The People’s Liberation Army (PLA) celebrated the 97th anniversary of its founding last Thursday.
 
Xi Makes the Rounds: President Xi Jinping, who is also chairman of the Central Military Commission, engaged in a series of activities to celebrate the anniversary. In a Party leadership study session, he called for modernizing border, coastal, and air defense units. He penned a letter to officers and soldiers of an elite army company, urging them to increase training in real combat conditions. He also issued instruction on veterans affairs, emphasizing the importance of military service as an “honorable occupation” and “ensuring that ex-service personnel enjoy respect from the whole society.”
 
Strategic Task: In a Qiushi article, Xi said that developing a “world-class military at a faster pace” is the “strategic task” for the PLA. He also called on the PLA to “comprehensively strengthen the Party-building of the People’s Army and ensure that the gun will always obey the Party’s command” — echoing Chairman Mao’s famous dictum that “political power comes from the barrel of a gun.”
 
Why It Matters: The PLA has undergone major structural transformations since Xi came to power. Corruption, however, remains a problem, despite unprecedented purges of senior PLA leaders. Xi’s call for the “realization of the PLA’s 2027 centenary goals” during his anniversary remarks speaks to the urgency he places on achieving military modernization.

By Lyle Morris, Senior Fellow on Foreign Policy and National Security, Center for China Analysis

Learn More: Lyle discussed China’s military modernization in his short perspective as part of What Happened at China’s Two Sessions in 2024?

4. Internet Identification System and Its Discontents

What Happened: On August 2, the Ministry of Public Security and the Cyberspace Administration of China released a draft proposal for a national internet identification system for China’s netizens. 
 
The Proposal: The government stated that the measure will “protect citizens’ personal information” by minimizing “the excessive collection and retention of citizens’ personal information by internet service providers.” The measure is voluntary for the time being, but at least 67 of China’s popular apps — including Taobao, WeChat, and Xiaohongshu — have already introduced beta versions enabling the use of the government’s virtual identification tokens. 
 
The Backlash: The draft regulation remained largely unnoticed until a series of critiques from experts surfaced on social media. One legal scholar from Peking University posted on WeChat that a centralized digital identification could cast a pall and limit the “vibrancy of the digital economy.” Another scholar from Tsinghua University bluntly stated that the government’s “claim of protecting personal information is a facade” and that the “real intention” of the draft regulations was to “regulate people’s online behavior.” Censors have now limited online postings about the proposed rule and disabled the comment function on accounts that addressed the topic.
 
Why It Matters: The proposal is still in its early stages. According to the government, the policy will provide a heightened degree of data security, but its detractors perceive it as a means to tighten social control. At a minimum, as one commentator pointed out, “There is a mistaken view that Chinese people care less about their privacy and state intrusion than other places.”

By Jennifer Choo, Director of Research and Strategy, Center for China Analysis

Learn More: Former CCA junior fellow Johanna Costigan analyzed the differences in the U.S. and Chinese digital policy frameworks.

5. Beijing Expands Service Sector Support to Revitalize Demand

What Happened: The State Council is rolling out new policies to support small enterprises and expand service consumption in dining, tourism, and digital services.

Policy Package: China’s policy package includes enhancing financial support and personal income tax deductions for family care expenses to increase household spending; boosting consumption in dining, tourism, and digital services, such as new spending avenues like unmanned retail stores and live-streaming e-commerce; and developing leisure tourism sectors with initiatives like visa-free travel.

The Challenges: Implementation, however, faces funding and execution challenges. Expanding the service sector requires substantial resources from local governments, necessitating efficient central government support. Supporting emerging consumer sectors requires a high level of regulatory flexibility, and the impact of these measures remains uncertain. 

Why It Matters: China's economy has slowed to its weakest pace in five quarters, with weak consumer spending overshadowing overall growth. This increases pressure on policymakers to implement bold measures to meet the 2024 growth target. Successful reforms could shift China toward a more balanced economic model that is less reliant on exports and investment, but unresolved issues within the local-central fiscal framework may hinder progress and undermine Beijing's long-term goals. 

By Lizzi C. Lee, Fellow on Chinese Economy, Center for China Analysis

Learn More: Take a look at a Diplomat excerpt by Lizzi, where she analyzes China’s five-year plan to overhaul the hukou system.