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THIS WEEK:

Xi meets Iranian president amid reports of dodging sanctions, Party takes stock of disciplinary inspections, first tickets for commercial space flights, hints of fiscal support, and Shanghai’s Halloween crackdown

1. Xi Meets Iranian President amid Reports of Dodging Sanctions

What Happened: Xi Jinping met with Iranian President Masoud Pezeshkian at the BRICS summit in Kazan, Russia, stressing the “strategic significance” of ties between the two countries amid new reports that Beijing is complicit in Tehran’s efforts to shirk U.S. sanctions.

Heavily Sanctioned: Iran has managed to circumvent broad U.S. sanctions to fund its proxies in the Middle East and invest heavily in its military.

Banking on China: Iran is using mainland Chinese banks to launder proceeds from its sanctioned petrochemicals industry, employing Hong Kong subsidiaries to exchange RMB and move funds into the international banking system.

Why It Matters: Xi Jinping used the BRICS summit to argue that China seeks a peaceful international system. Behind the ceremony and speeches, helping nations like Iran evade sanctions signals his desire to build stronger links with autocracies to further counter Western dominance of the international order.
 
By Barclay Bram, Fellow on Chinese Society, Center for China Analysis

Learn More: A recent paper by CCA Senior Fellow Diana Choyleva explains how China’s “New Era” Changes the Game for Global Actors.

2. Party Assesses Disciplinary Inspections

What Happened: On October 28, Xi Jinping chaired a Politburo meeting to assess the outcomes of the Party’s third round of disciplinary inspections since he began his third term.

Not Enough: Thirty-four central-level economic, development, and financial institutions were inspected. Xi acknowledged progress in enhancing the Party’s overall political leadership within these institutions but also emphasized that more work is needed to effectively promote “high-quality development.” He also highlighted the need for more flexible hiring and firing practices. 

Heavy Hitters: The first round of disciplinary inspections took place in early 2023, targeting thirty state-owned enterprises (SOEs) in the defense, high-tech, and natural resource sectors; the second round, in late 2023, focused on thirty-one industrial, media, and aviation SOEs.

Why It Matters: Over the past decade, Xi disciplined and punished politicians, military leaders, intellectuals, and even entrepreneurs, and this helped him solidify his unprecedented political power. However, it remains to be seen whether he can do the same with specialists such as economists, scientists, engineers, and inventors. Currently, Xi seems much more cautious when it comes to disciplining “national-level talent.” 

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

Learn More: CCA’s interactive website, Decoding Chinese Politics, was recently updated with three new sections, one of which investigates Xi’s inherent status in the “Party Center.”

3. China Announces Commercial Space Flights

What Happened: Last week, Chinese startup Deep Blue Aerospace announced it will commence suborbital commercial space flights from 2027.

Flying High: Deep Blue Aerospace is currently building its Nebula-1 reusable orbital rocket, which will propel six passengers 100 kilometers into the air for a twelve-minute suborbital flight. The spacecraft is designed to be used over fifty times.

Tickets, Please: Tickets will retail for 1.5 million yuan ($210,000), but the first two tickets were presold at a discounted 1 million yuan ($140,000) during a Taobao livestreaming event attended by three million viewers. 

Why It Matters: China’s interest in commercial space travel is complemented by its recent release of a long-term plan to expand its space capabilities. Entering the global market not only benefits it domestically through enhanced technological and innovative capacities but also opens the door for potential information sharing and collaborative efforts that could reshape the international space race.
 
By Taylah Bland, Fellow on Climate and the Environment, Center for China Analysis
 
Learn More: Watch China's Post-Plenum Tech Gambit: Chips, Shifts, and the Race to the Next Frontier, an expert panel that discussed how China is solidifying its position in the global tech arena.

4. Officials Hint at Possible Fiscal Support

What Happened: China announced a National People’s Congress (NPC) Standing Committee session for November 4–8, and markets are closely watching as officials hint at fiscal shifts.

Tea Leaves and Breadcrumbs: In recent appearances, Finance Minister Lan Fo’an noted room for deficit expansion, while Vice Finance Minister Liao Min emphasized countercyclical support for real estate and local government finances. Former finance minister Lou Jiwei observed that, though recent policies lifted sentiment, more decisive action may be necessary. 

Green Shoots and Red Flags: Data remains mixed: industrial profits dropped sharply and property investment is weak, but high-tech sectors—such as smart manufacturing and clean energy—show resilience. The limited fiscal response has disappointed those hoping for large-scale stimulus.

Why It Matters: This NPC session is pivotal, as it holds the power to authorize sweeping fiscal changes like new debt issuance and deficit hikes. With September’s fiscal measures falling short, investors wait to see if a stronger push is on the horizon or if caution will prevail.

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

Learn More: See Lizzi’s recent article, A New “Band-Aid” for China’s Property Market: Can It Stop the Bleeding?

5. Shanghai Halloween: Trick or Tea

What Happened: Determined to prevent a repeat of last year’s Halloween when Shanghai residents expressed dissatisfaction by wearing politically charged outfits, police last weekend began detaining people in costume and warning bars against holding Halloween events.

Critical Costumes: Last year, partygoers dressed as COVID tests, surveillance cameras, censored social media posts, and giant sheets of white paper. One reveler was photographed wearing a garbage can that said “talent pool résumés,” a reference to China’s high youth unemployment rate.

Tea Time: Notices sent to bar owners in the run-up to this year’s Halloween emphasized the need to prevent large gatherings and “maintain good public order and public image.” People detained while wearing costumes have reportedly been “invited for tea,” a euphemism for being informally interrogated by police.

Why It Matters: The authorities’ early, aggressive action is motivated by fear that public displays of social discontent could snowball into something more threatening. But quashing what many citizens value as spontaneous creativity only adds to the indignation and alienation that they are trying to express.

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

Learn More: Read Senior Fellow Lynette Ong’s paper, One Year on From “White Paper” Protests, Disillusionment With China’s Government Persists.