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THIS WEEK:

Agreement on U.S.-China science and technology cooperation, private pensions face obstacles, Shanghai and Taipei City officials meet, China commits to combatting desertification, and Xi warns of political decay

1. New Framework for U.S.-China Science and Technology Cooperation

What Happened: The United States and China signed a protocol on December 13 to amend and extend the U.S.-China Science and Technology Agreement (STA) for an additional five years.

New Scientific Paradigm: The extension’s language — narrower in scope than the STA’s previous iteration — is limited to “basic research” and excludes critical and emerging technologies. The amended STA also includes new carveouts for intellectual property protections, researcher safety, and data reciprocity.

Competing Interests: The agreement’s new guardrails and reduced focus underscore a widespread consensus in Washington that science and technology is a foundational arena of U.S.-China competition. U.S. lawmakers have proposed bills aimed at enhancing congressional oversight of the STA, and this is a harbinger of closer scrutiny of U.S.-China science cooperation.

Why It Matters: The STA’s renewal may alleviate pressure on researchers in both countries seeking to conduct bilateral scientific exchanges and research studies. However, heightened political rhetoric has already had a chilling effect on cooperation in a number of areas, including public health, biotechnology, and climate research.
 
By Patrick Beyrer, Research Associate, Center for China Analysis

Learn More: Patrick analyzes how frictions between China and the U.S. are affecting scientific cooperation in his paper, “Taking Stock of U.S.-China Biotechnology Competition.”

2. Private Pensions Face Obstacles

What Happened: A private pension program launched nationwide on December 15 aims to boost retirement savings for China’s growing elderly population, supplementing both the state’s basic pension system and voluntary employer-sponsored schemes.

Saving Up: Started as a pilot in major cities in November 2022, the scheme allows individuals to contribute around $1,600 annually to tax-deferred accounts. Initially, funds could only be invested in bank deposits, mutual funds, and some insurance and wealth management products, but now treasury bonds and index funds are also eligible.

Slow Take Up: Although more than 60 million people have already opened private retirement accounts, only about one-fifth have made contributions, with the average deposit around $400. Experts blame weak tax incentives and declining incomes; the poor performance of some funds eligible for the scheme has also dampened enthusiasm.

Why It Matters: Beijing’s latest attempt to provide income security for the elderly has been held back by investment restrictions and weak incentives. While China’s savings rate is already famously high, more incentives will be needed to convince cash-strapped workers to contribute to individual pension accounts. 

By G.A. Donovan, Fellow on Chinese Society and Political Economy, Center for China Analysis

Learn More: Read about the causes and implications of the population challenges facing China and neighboring countries in the summary of a roundtable on “Navigating the Demographic Shift in Aging East Asian Societies” with Asia Society President and CEO Kyung-wha Kang.

3. Taipei-Shanghai Municipal Exchange

What Happened: The 2024 Taipei-Shanghai Twin-City Forum was held on December 17 in Taipei, marking fifteen years of municipal exchanges between the two cities. Shanghai Vice Mayor Hua Yuan and Taipei Mayor Chiang Wan-an expressed hope for strengthened cooperation despite persistent cross-strait tensions.

Entry Restrictions: Municipal-level exchanges between Taiwan and mainland China date back decades. Similar initiatives include the Fuzhou-Taipei City Forum and the Xiamen-Kinmen Forum. These platforms facilitate engagement between local officials despite strained ties.

Bridging the Gap: Beijing’s patchy record of executing previously announced stimulus measures raises doubts about its ability to deliver meaningful reforms, and the economy faces persistent structural challenges — overcapacity, a struggling housing market, weak consumer sentiment, and mounting external pressure. 

Why It Matters: While city-to-city exchanges can ease tensions by fostering dialogue, the worsening cross-strait environment limits their effectiveness. Beijing’s military maneuvers near the island and mounting political pressures have dampened public reception, with some in Taiwan viewing these events as tools of Chinese influence rather than sincere engagement efforts.
 
By Jie Gao, Research Associate, Center for China Analysis
 
Learn More: Visit the Taiwan Policy Database for a list of cross-strait exchanges throughout the years.

4. China Recommits to Combating Desertification

What Happened: At the 16th Conference of the Parties (COP16) to the United Nations Convention to Combat Desertification (UNCCD) in Riyadh, Saudi Arabia, China reinforced its commitment to the convention and highlighted its achievements to date.

Fighting Deserts: China participated in ministerial dialogues, summits, and theme days at the China Pavilion, highlighting the rehabilitation of 53% of its treatable land affected by desertification as well as the progress of its Three-North Shelterbelt Forest Program. 

Mixed Progress: Nearly 200 countries attended the summit, the largest UN land conference to date, and more than $12 billion was pledged for land restoration and drought preparedness under the Riyadh Global Drought Resilience Partnership. Further discussion of a legally binding drought protocol was deferred to COP17 in 2026.

Why It Matters: Desertification has serious consequences for food and water security, biodiversity, and the economy, and China is one of the countries most affected. Its continued work to combat desertification is crucial to its broader adaptation and resilience agenda to counter the climate crisis.

By Taylah Bland, Fellow on Climate and the Environment, Center for China Analysis

Learn More: Li Shuo argues that “The Year of Complex Challenges Will Intensify the Need for Robust Climate Action” in China 2025: What to Watch.

5. Xi Emphasizes the Need to Prevent Political Decay

What Happened: On December 15, Qiushi published an article by Xi Jinping outlining how China continues to combat chaos and disorder through reform.

Xi's Solution: Xi argues that the Chinese Communist Party (CCP) constantly contemplates ways to avoid the cyclical pattern of political decay that has historically plagued Chinese dynasties. Mao offered one solution — “allowing the people to monitor the government” — while Xi proposes a second formula: the CCP must engage in “self-revolution.”

Self-Revolution: Xi asserts that the CCP must acknowledge the ongoing external and internal changes that inevitably create conflicts and problems within the party. Therefore, the CCP must be willing to undertake self-revolution by “turning the blade inward” to promptly counter negative forces and retain vigor and vitality.

Why It Matters: Xi’s concept of self-revolution goes beyond merely eliminating political rivals and tries to address political decay driven by rapidly changing social and economic factors. Drawing inspiration from Marxism and Confucianism, Xi’s approach also reflects the ideas of Western theorists such as Samuel Huntington and Francis Fukuyama.

By Lobsang Tsering, Senior Research Associate, Center for China Analysis

Learn More: Visit CCA’s interactive website, Decoding Chinese Politics, to explore the complex web of personal and political networks at the heart of Xi’s regime.