Highlights
- China's Rapid Growth in Launch Activity Signals Expanding Space Capabilities
- China's New Aircraft Carrier Poses Challenge to U.S. Power in the Pacific
- China Shock 2.0 to Continue in 2026
- Beijing Putting Building Blocks in Place for Continued Technology-Focused Industry Policy in Next Five-Year Plan
China’s Rapid Growth in Launch Activity Signals Expanding Space Capabilities
Record numbers of launches, progress in reusable launch technology, and tighter government control of the commercial sector demonstrate China’s rapidly advancing bid for global space leadership.
China has continued to advance its space launch capabilities in 2025, increasing both its number of launches and satellites placed in orbit. As of November 30, China had conducted 77 orbital launch attempts—surpassing its previous record of 68 in 2024—and placed 322 satellites in orbit, a 22 percent increase over last year.[1]
Commercial space company LandSpace reached a milestone in its development of Chinese reusable launch rockets (RLRs).[2] The first test flight of its Zhuque-3 rocket on December 3 successfully reached orbit, though it failed with a first-stage landing attempt.[3] In testimony before the Commission in April 2025, U.S. Space Force Chief of Space Operations General B. Chance Saltzman warned that China’s investment in reusable launch could lead to an inflection point in space access that may result in “China overtaking U.S. leadership in the domain.”[4] Experts cited in the Commission’s 2025 Annual Report to Congress predict that Chinese reusable launch will be competitive with SpaceX by 2030.[5]
On November 30, 2025, China’s National Space Administration announced its intention to establish the Commercial Space Department.[6] The new body would expand government oversight of China’s rapidly growing commercial space sector.[7] This new department would align it with national security priorities and strengthen Beijing’s ability to compete in the global space market.
USCC’s 2025 Annual Report to Congress discusses China’s rapidly growing, state-directed commercial space ecosystem and the technological, economic, and geostrategic challenges it poses to the United States.[8] The Report also includes a recommendation for ensuring continuing U.S. space leadership.[9]
China’s New Aircraft Carrier Poses Challenge to U.S. Power in the Pacific
China’s People’s Liberation Army’s (PLA) newly commissioned third aircraft carrier—Fujian—has significantly narrowed its capability gap with the U.S. Navy in the Pacific.[10]
Commissioned on November 5, China’s Fujian aircraft carrier features electromagnetic catapults that enable it to launch the PLA’s next generation aircrafts and heavier planes (e.g., the J-35 stealth fighter jet and the KJ-600 early warning aircraft) at a much faster rate, significantly increasing its combat lethality.[11] In a military conflict in the Indo-Pacific, Fujian could enhance the PLA’s ability to delay and disrupt U.S. forces entering the region.[12] Chinese authorities seemed to tie the PLA’s third aircraft carrier to a potential Taiwan contingency, stating it would help thwart any efforts to “violate or split apart China’s sacred territory.”[13]
Military researchers also assess that China is currently working to construct a nuclear-powered aircraft carrier.[14] Nuclear-powered aircraft carriers have a much greater range than traditionally fueled carriers and would further enhance the PLA’s ability to project power beyond its immediate waters.[15]
The Commission’s 2025 Annual Report to Congress highlights China’s ongoing military modernization with the goal of building its capability to fight and win wars against a “strong enemy” like the United States; it also recommends that U.S. Indo-Pacific Command assess its capacity to respond to a Taiwan contingency and to other forms of coercion used by China that threaten the security of Taiwan.[16]
China Shock 2.0 to Continue in 2026
At $1.1 for the first eleven months of the year, China’s trade surplus with the rest of the world is on track to hit $1.2 trillion in 2025, eclipsing its 2024 record of $992 billion. For 2026, Goldman Sachs has forecasted continued Chinese export growth in high-tech sectors at the expense of Europe, Japan, India, and others.
As its domestic economy has stalled, China has leaned more on exports to prop up its economy. Total exports hit a record $970.6 billion in Q3 2025, a 6.6 percent year-over-year increase.[17] Net exports contributed 1.5 percentage points of gross domestic product (GDP) growth in the first three quarters of 2025 compared to an average of 0.35 percentage points between 2015 and 2024.[18]
China’s continued export momentum has come despite the impact of U.S. tariffs, with exports to the United States falling 28.6 percent year-on-year in November 2025.[19] China’s export machine has shifted focus to other parts of the world, with exports to Africa increasing by 27.5 percent and exports to ASEAN increasing 8.2 percent.[20] This trend is expected to continue—Goldman Sachs upped its 2026 growth outlook for China to 4.8 percent based on even more exports, well above 4.16 percent forecasted by the International Monetary Fund.[21] The Commission’s 2025 Annual Report to Congress details deindustrialization underway in both developed and developing countries as a result of China Shock 2.0.
China’s leadership is looking to foreign markets to continue driving its growth as economic headwinds have slowed investment and China’s tepid policies to grow consumption have had meager results.
Investment: Gross capital formation contributed a mere 0.91 percent of GDP growth thus far in 2025 compared to the annual average of 2.1 percent over the prior ten-year period.[22] Tellingly, fixed asset investment year-to-date growth has turned negative for the first time in decades (outside of the early months of the COVID-19 pandemic), registering a 1.7 percent drop in October.[23] Analysts attribute falling investment to Beijing’s “anti-involution” campaign—an effort to crack down on the excess production caused by industrial policy—local governments’ debt burden, and the continued real estate slump.[24]
Consumption: Retail sales growth dropped to 3.4 percent in Q3 from 5.4 percent in Q2.[25] The dissipating effect of government support programs that boosted consumer spending in the first half of the year appears partly to blame. In October, sales of two subsidized goods categories—automobiles and household electric and video appliances—were down 6.6 percent and 14.6 percent year-over-year, respectively.[26]
Beijing Putting Building Blocks in Place for Continued Technology-Focused Industrial Policy in Next Five-Year Plan
The Chinese Communist Party’s (CCP) Central Committee confirms commitment to techno-nationalism and industrial policy with increased focus on diffusion of existing technology; lip service on consumption likely to continue.
In October 2025, the CCP Central Committee’s Fourth Plenum previewed the focus of next year’s Five-Year Plan (FYP).[27] The Committee signaled China’s continued commitment to industrial policy, with a focus on techno-nationalism and strengthening China’s industrial capacity. Importantly, the Committee elevated “industrial upgrading” to the number one priority, with technological innovation being second. In practice, this is likely to mean Beijing will put greater emphasis on policies to speed adoption of existing technologies in a bid to increase productivity.[28]
The Central Committee’s recommendations target numerous technologies, including artificial intelligence, semiconductors, biomanufacturing, and quantum.[29]
The Fourth Plenum outcome also suggested that China will continue to overpromise and under-deliver on re-balancing its economy in favor of consumption. The Committee placed consumption as the fifth-highest priority, the same as the existing FYP.[30] While the government has taken some measures in favor of consumption in recent years, they have been tepid. (The Commission’s 2025 Annual Report to Congress further addresses China’s measures for consumption).[31]
The Central Economic Work Conference (CEWC)—an annual meeting expected in mid-December at which China’s economic priorities are set—could shed additional light on how Beijing intends to expand its already extensive policy toolkit to support homegrown tech.[32] The readout may provide additional insight into the next FYP, which will be released in March 2026.[33] For example, the 2024 CEWC readout highlighted the use of fiscal policy, such as subsidized trade-in programs for consumer and capital goods, a tool that could potentially be repurposed to drive early adoption of new technologies.[34] The Commission’s 2025 Annual Report to Congress details China’s industrial policy and innovation capacity.[35]
This issue of the China Bulletin was prepared by Graham Ayres, Rachael Burton, Benton Gordon, Zoe Merewether, Jack Neubauer, and Cindy Zheng.
| Disclaimer: This bulletin is the product of research performed by professional staff of the U.S.-China Economic and Security Review Commission (USCC) and was prepared to support the ongoing research and deliberations of the Commission. Posting of this bulletin to the Commission’s website is intended to promote greater awareness and understanding of developing issues for Congressional staff and the public, in support of the Commission’s efforts to “monitor, investigate, and report” on U.S.- China economic relations and their implications for U.S. national security, as mandated by Public Law 106-398 (as subsequently modified in law, see uscc.gov/charter). The public release of this document does not imply an endorsement by the Commission, any individual Commissioner, or the Commission’s other professional staff, of the views or considerations raised in this staff-prepared bulletin. |
Endnotes
[1]Andrew Jones, “China Launches Classified Shijian-28 Spacecraft, Reusable Zhuque-3 Rocket Faces Delay,” Space News, November 30, 2025. https://spacenews.com/china-launches-classified-shijian-28-spacecraft-reusable-zhuque-3-rocket-faces-delay/; Mike Wall, “China Breaks its Single-Year Launch Record with Weekend Flurry,” Space.com, November 10, 2025. https://www.space.com/space-exploration/launches-spacecraft/china-breaks-its-single-year-launch-record-with-weekend-flurry; American Enterprise Institute, Global Space Data Navigator. https://spacedata.aei.org/.
[2] Andrew Jones, “Zhuque-3 Reaches Orbit on Test Flight, First Stage Lost during Landing Attempt,” Space News, December 3, 2025. https://spacenews.com/zhuque-3-reaches-orbit-on-test-flight-first-stage-lost-during-landing-attempt.
[3] Andrew Jones, “Zhuque-3 Reaches Orbit on Test Flight, First Stage Lost during Landing Attempt,” Space News, December 3, 2025. https://spacenews.com/zhuque-3-reaches-orbit-on-test-flight-first-stage-lost-during-landing-attempt.
[4] U.S.-China Economic and Security Review Commission, 2025 Annual Report to Congress, November 2025, 396.
[5] U.S.-China Economic and Security Review Commission, 2025 Annual Report to Congress, November 2025, 395.
[6]China’s State Council, “China’s Space Authority Sets Up New Department to Oversee Commercial Space Sector,” Xinhua, November 30, 2025. https://web.archive.org/web/20251205173219/https://english.www.gov.cn/news/202511/30/content_WS692b9763c6d00ca5f9a07da0.html.
[7]Jack C., “China National Space Administration Establishes New Commercial Space Department,” China in Space, November 29, 2025. https://www.china-in-space.com/p/china-national-space-administration.
[8] U.S.-China Economic and Security Review Commission, 2025 Annual Report to Congress, November 2025, 387–402
[9] U.S.-China Economic and Security Review Commission, 2025 Annual Report to Congress, November 2025, 408–409.
[10]Christian Shepherd and Álvaro Valiño, “China’s New Aircraft Supercarrier Challenges U.S. Dominance in Pacific,” Washington Post, November 14, 2025. https://www.washingtonpost.com/world/2025/11/14/us-china-fujian-aircraft-carrier-pacific/.
[11]Admin, “China Reveals J-35 Stealth Fighter Has Palm-Sized RCS, Signalling a Direct Challenge to the F-35 and F-22,” Defese Security Asia, November 23, 2025. https://defencesecurityasia.com/en/china-j35-stealth-fighter-palm-sized-rcs-f35-rival/; “China’s Third Aircraft Carrier Conducts 1st Live Training Exercise,” NHK World Japan. https://www3.nhk.or.jp/nhkworld/en/news/20251119_03/; Christian Shepherd and Álvaro Valiño, “China’s New Aircraft Supercarrier Challenges U.S. Dominance in Pacific,” Washington Post, November 14, 2025. https://www.washingtonpost.com/world/2025/11/14/us-china-fujian-aircraft-carrier-pacific/; Alex Luck, “Chinese Navy Takes Aircraft Carrier Fujian into Active Service in Hainan,” Naval News, November 7, 2025. https://www.navalnews.com/naval-news/2025/11/chinese-navy-takes-aircraft-carrier-fujian-into-active-service-in-hainan/; Aaron-Matthew Lariosa, “Chinese Aircraft Carrier Fujian Launches Stealth Jet, Early Warning Aircraft in Catapult Tests,” U.S. Naval Institute, September 22, 2025. https://news.usni.org/2025/09/22/chinese-aircraft-carrier-fujian-launches-stealth-jet-early-warning-aircraft-in-catapult-tests.
[12]Christian Shepherd and Álvaro Valiño, “China’s New Aircraft Supercarrier Challenges U.S. Dominance in Pacific,” Washington Post, November 14, 2025. https://www.washingtonpost.com/world/2025/11/14/us-china-fujian-aircraft-carrier-pacific/.
[13]China’s State Council Taiwan Affairs Office, 国务院台办新闻发布会辑录 [Transcript of State Council Taiwan Affairs Office Press Conference], November 12, 2025. https://archive.ph/IVAKw#selection-225.0-235.144.
[14] Ryan Chen, “China’s Next Aircraft Carrier Could Be Nuclear-Powered—What to Know,” Newsweek, December 3, 2025. https://www.newsweek.com/chinas-next-aircraft-carrier-could-be-nuclear-powered-what-to-know-11141211; Thomas Newdick, “Strong Evidence That China’s Next Carrier Will Be Nuclear Emerges in Shipyard Photo,” War Zone, November 12, 2025. https://www.twz.com/sea/strong-evidence-that-chinas-next-carrier-will-be-nuclear-emerges-in-shipyard-photo.
[15] Ryan Chen, “China’s Next Aircraft Carrier Could Be Nuclear-Powered—What to Know,” Newsweek, December 3, 2025. https://www.newsweek.com/chinas-next-aircraft-carrier-could-be-nuclear-powered-what-to-know-11141211; Associated Press, “Research Reveals China Has Built Prototype Nuclear Reactor to Power Aircraft Carrier,” CNN, November 11, 2024. https://edition.cnn.com/2024/11/11/china/china-prototype-nuclear-reactor-aircraft-carrier-intl-hnk.
[16] U.S.-China Economic and Security Review Commission, 2025 Annual Report to Congress, November 2025, 92–95, 634.
[17] China’s National Bureau of Statistics via Haver Analytics.
[18] China’s National Bureau of Statistics via Haver Analytics.
[19] “Back in Black,” Trivium China, December 8, 2025; “Exports Decline in October,” Trivium China, November 7, 2025.
[20] “Back in Black,” Trivium China, December 8, 2025; “Exports Decline in October,” Trivium China, November 7, 2025.
[21] “China’s Economy Is Forecast to Grow Faster than Expected in 2026,” Goldman Sachs, November 21, 2025. https://www.goldmansachs.com/insights/articles/chinas-economy-is-forecast-to-grow-faster-than-expected-in-2026.
[22] China’s National Bureau of Statistics via Haver Analytics.
[23] China’s National Bureau of Statistics via Haver Analytics; Logan Wright, Allen Feng, and Rogan Quinn, “Q3 2025 Macro Data Recap,” Rhodium Group, October 20, 2025, 1.
[24] Joe Leahy, Thomas Hale, and Haohsiang Ko, “Fall in Chinese Investment Suggests Xi Jinping’s ‘Anti-Involution’ Drive Is Biting,” Financial Times, November 26, 2025. https://www.ft.com/content/008738a8-2626-401a-8c79-832492d914ce; “Macro Wrap | China’s Fixed Asset Investment: What the Heck Is Going On?” Trivium China, November 21, 2025. https://triviumchina.com/2025/11/21/macro-wrap-chinas-fixed-asset-investment-what-the-heck-is-going-on; Logan Wright, Allen Feng, and Rogan Quinn, “October 2025 Macro Data Recap,” Rhodium Group, November 14, 2025, 2.
[25] China’s National Bureau of Statistics via Haver Analytics.
[26] China’s National Bureau of Statistics via Haver Analytics.
[27] Chinese Communist Party’s Central Committee, 中共中央关于制定国民经济和社会发展第十五个五年规划的建议 [The CPC Central Committee’s Proposal on Formulating the 15th Five-Year Plan for National Economic and Social Development], October 28, 2025. https://web.archive.org/web/20251109083856/https://www.gov.cn/zhengce/202510/content_7046050.htm.
[28] Junpei Gao, “How China’s 15th Five-Year Plan Signals a New Phase of Strategic Adaptation,” World Economic Forum, October 30, 2025. https://www.weforum.org/stories/2025/10/how-china-s-15th-five-year-plan-signals-a-new-phase-of-strategic-adaptation/; Chinese Communist Party’s Central Committee, 中共中央关于制定国民经济和社会发展第十五个五年规划的建议 [The CPC Central Committee’s Proposal on Formulating the 15th Five-Year Plan for National Economic and Social Development], October 28, 2025. https://web.archive.org/web/20251109083856/https://www.gov.cn/zhengce/202510/content_7046050.htm; China National People’s Congress, 中华人民共和国国民经济和社会发展第十四个五年规划和2035年远景目标纲要 [Outline of the 14th Five-Year Plan for National Economic and Social Development and the Long-Range Objectives through the Year 2035 of the People’s Republic of China], March 12, 2021. https://web.archive.org/web/20210313182413/https://www.gov.cn/xinwen/2021-03/13/content_5592681.htm.
[29]“中共中央关于制定国民经济和社会发展第十五个五年规划的建议” [Recommendations of the Central Committee of the Communist Party of China for Formulating the 15th Five-Year Plan for National Economic and Social Development], Xinhua, October 28, 2025. https://web.archive.org/web/20251109083856/https://www.gov.cn/zhengce/202510/content_7046050.htm.
[30] Jonathan A. Czin and Allie Matthias, “Assessing China’s Fourth Plenum: Policy Continuity, Personnel Turmoil,” Brookings Institute, November 26, 2025. https://www.brookings.edu/articles/assessing-chinas-fourth-plenum-policy-continuity-personnel-turmoil/; “Officials Want Stronger Consumption, but Without Stronger Policy Support,” Trivium China, October 29, 2025. https://triviumchina.com/2025/10/29/fourth-plenum-proposals-signal-party-wants-stronger-consumption-but-without-stronger-medicine; “习近平：关于《中共中央关于制定国民经济和社会发展第十五个五年规划的建议》的说明” [Xi Jinping: Explanation of the “Recommendations of the Central Committee of the Communist Party of China for Formulating the 15th Five-Year Plan for National Economic and Social Development”], Xinhua, October 28, 2025. https://web.archive.org/web/20251112210628/https://www.gov.cn/yaowen/liebiao/202510/content_7046048.htm.
[31] U.S.-China Economic and Security Review Commission, 2025 Annual Report to Congress, November 2025, 429-461.
[32] “China Likely to Chase 5% GDP Growth in 2026 in Bid to End Deflation,” Reuters, December 3, 2025. https://www.reuters.com/world/china/china-likely-chase-5-gdp-growth-2026-bid-end-deflation-2025-12-03; Mia Nurmamat, “China’s Finance Minister Calls for More Fiscal Firepower as Beijing Weighs 2026 Agenda,” South China Morning Post, December 2, 2025. https://www.scmp.com/economy/policy/article/3334924/chinas-finance-minister-calls-more-fiscal-firepower-beijing-weighs-2026-agenda.
[33] “中國未來5年最嚴峻挑戰！「十五五」劃了什麼重點？” [The Most Serious Challenges for China in the Next Five Years! What Important Points Will Be in the “15th Five-Year Plan?”], CommonWealth Magazine, December 4, 2025. https://www.cw.com.tw/article/5138598.
[34] “China Holds Central Economic Work Conference to Make Plans for 2025,” Xinhua, December 12, 2024. https://web.archive.org/web/20251204195727/https://english.www.gov.cn/news/202412/12/content_WS675a….
[35] U.S.-China Economic and Security Review Commission, 2025 Annual Report to Congress, November 2025, 313-357.