1 CMC targets ‘pernicious influence,’ seeks reshaping of political work cadres
Background
July 21
The PLA Daily reported that the Central Military Commission issues regulations on “vigorously promoting fine traditions,” “thoroughly eliminating pernicious influences,” and “reshaping the image and authority of political work cadres” (關於大力弘揚優良傳統、全面肅清流毒影響 重塑政治幹部形象威信的若干規定; henceforth referred to as the Regulations). The Regulations contain 22 articles covering seven areas.
PLA Daily said that the Regulations represent Xi Jinping’s strategic decision to carry out “deep political rectification” within the military, are part of his broader approach to strengthening the military through political work, and seek to re-establish the credibility and authority of political power within the military. The Regulations are described as “iron rules and hard red lines” (鐵規矩硬槓槓), and require political work cadres, and especially the political work leadership, to “lead by example, rigorously eliminate corruption and pernicious influences, and reshape their image and authority.” The Regulations also set clear rules for political work cadres to “strengthen political loyalty, adhere to Party principles, practice fairness in appointments, and lead by example.”
July 21 to July 24
The PLA Daily published a series of front-page editorials on the importance of political work. The titles of the commentaries are:
- “Iron Rules and Hard Red Lines for Firmly Establishing the Image and Authority of Political Cadres” (穩固立起政治幹部形象威信的鐵規矩硬槓槓)
- “Strengthen Political Loyalty and Always Keep the Original Mission in Mind” (強化政治忠誠 永保初心本色)
- “Uphold Party Principles and Maintain Integrity and Character” (恪守黨原則 堅守風骨品格)
- “Develop Talent for a Strong Army and Make Appointments Based on Merit” (為強軍育人 以事業取人)
Backdrop
The CCP authorities previously announced that CMC Political Work Department director Miao Hua, the PLA’s top political officer, was being investigated in November 2024.
Also, CMC vice chairman, He Weidong, another senior officer overseeing political work, has not made a public appearance since the 2025 Two Sessions in March. In early April, Financial Times reported that He had been removed from his post.
Our take
1. The CCP authorities have greatly limited the public release of information pertaining to military personnel matters and dynamics since the 19th Party Congress. This is likely because Beijing wants to avoid divulging sensitive arrangements to adversaries where possible and allow the Xi leadership to better advance its “strong army” agenda.
However, Beijing still has to be partially transparent about why it removed senior officials overseeing political work like Miao Hua and He Weidong to ensure greater accountability in the PLA and avoid demoralization. The CMC’s recent release of the Regulations and the PLA Daily’s publication of related editorials appear to be a preliminary step in Beijing’s eventual move to publicize the fates of Miao, He, and other purged political work officers, as well as a propaganda effort to consolidate Xi Jinping’s control over the military.
2. The issuance of the Regulations suggests that the Miao Hua case and the likely investigation of He Weidong had triggered a purge of political work officers in the PLA. The scale of the purge could be large if Miao and He implicated numerous officers (particularly those involved in political work) who they were engaged in corruption (i.e. taking bribes to secure promotion) or disloyalty (i.e. partaking in activities that undermine Xi’s agenda) with, and the anti-corruption authorities chased those leads down the ranks.
If many key officers involved in political work had indeed been investigated, then the efficiency and effectiveness of Xi leadership’s political indoctrination efforts targeting the military was likely much reduced. This represents a setback to Xi Jinping’s efforts to keep the military disciplined and loyal to him, though perhaps not crucial enough to undermine Xi’s “quan wei” (authority and prestige) in the military. Compromised political work in the military would have also likely set back Xi’s “strong army” agenda more broadly.
The Regulations’ choice of the phrase “pernicious influence” does not bode well for Miao Hua, He Weidong, and others who could have been investigated. The Xi leadership previously used the phrase in condemning purged senior military officers like Xu Caihou, Guo Boxiong, Fang Fenghui, and Zhang Yang; Xu and Guo were prominent Jiang Zemin faction members who plunged the PLA more deeply into corruption while they served as CMC vice chairmen.
3. The Xi leadership is unlikely to be able to “vigorously promote fine traditions,” “thoroughly eliminate pernicious influences,” and “reshape the image and authority of political cadres” in the PLA by issuing the Regulations. Party culture, the systemic flaws of the CCP authoritarian system, and pervasive corruption will prevent the reforms and guidances of the Regulations from being properly implemented and taking root in the military.
The status quo of corruption in the PLA appears to have barely shifted even after the Xi leadership oversaw the mass purge of Jiang faction members and loyalists during Xi Jinping’s first two terms. Having a new set of political guidelines is unlikely to budge the needle, especially if officials continue to avoid responsibility and selectively implement policies in a way that placates the central government while not achieving the intended results of those policies.
What’s next
The Xi leadership could announce the fates of Miao Hua, He Weidong, and potentially others at the Fourth Plenum of the 20th Central Committee. The Fourth Plenum could be held after the CCP elite’s annual Beidaihe work retreat during the July-August period.
2 The strategic implications of the PRC’s Yarlung Tsangpo dam
PRC begins construction of hydropower dam in Tibetan territory
On July 19, the CCP authorities officially commenced construction of the world’s largest hydropower dam on the lower reaches of the Yarlung Tsangpo River in the Tibet Autonomous Region. PRC premier Li Qiang attended the groundbreaking ceremony.
The project is being undertaken by China Yajiang Group Co., Ltd., a newly established central state-owned enterprise. Per state media reports, the project will primarily adopt the development model of “straightening bends and diverting water through tunnels,” with plans to construct five cascading hydropower stations.
The project has a total investment of approximately 1.2 trillion yuan (about $165 billion) and is expected to generate 300 billion kilowatt-hours of electricity annually, equivalent to three times the output of the Three Gorges Dam and enough to meet the annual electricity needs of 300 million people, according to state media. Most of the electricity will be transmitted to other provinces, while also supplying local demand in Tibet.
Following the announcement of the Yarlung Tsangpo mega dam project, shares in related sectors — including water conservancy, infrastructure, steel, cement, construction machinery, and Tibet-based companies — soared to their daily limits. The cement sector, in particular, saw nearly all constituents hit their trading caps.
India and Bangladesh have expressed concerns over the project’s potential impact on hundreds of millions of downstream residents, various water security risks, and how the dam could become a geopolitical flashpoint. Some NGOs have also warned of the threat that the project poses to the rich and diverse ecosystems of the Tibetan Plateau.
Backdrop
The PRC’s 14th Five-Year Plan and 2035 Long-Term Goals Outline issued in March 2021 explicitly called for the development of hydropower on the lower reaches of the Yarlung Tsangpo River.
In March 2025, the National Development and Reform Commission designated the Yarlung Tsangpo hydropower dam as a key major investment project in its report on the implementation of the 2024 national economic plan and the 2025 draft plan. The NDRC also stated that construction should be pushed forward.
Our take
The Yarlung Tsangpo hydropower dam project appears to be one of the CCP’s solutions to mitigating the economic impact of the three COVID-19 pandemic years. The dam’s construction could also provide the regime with some economic relief amid significant downward pressures on the Chinese economy and escalating U.S.-China trade tensions, as well as improved food security, energy security, and domestic stability after the dam is up and running.
Additionally, the CCP could exploit the hydropower dam to advance its international agenda, including leveraging control over the river’s watershed to pressure downstream nations and expanding neighboring countries’ reliance on China through exporting low-cost energy.
1. Amid an economic slowdown and persistent real estate downturn, the Yarlung Tsangpo hydropower dam project is expected to stimulate fixed asset investment, boost domestic demand, and expand credit. The initiative also injected fresh momentum into a lackluster stock market.
The roughly 1.2 trillion yuan project is six times the cost of the Three Gorges Dam or equivalent to constructing 6 million affordable housing units. Spanning a 10-year construction timeline, the project entails annual investments of roughly 120 billion yuan, representing 0.85 percent of 2024’s infrastructure investment total (14.1 trillion yuan). This is expected to drive an annual increase in infrastructure investment growth by 0.8 percent, contribute 0.1 percentage points to GDP growth, and generate approximately 200,000 jobs.
Industries related to the dam’s construction are primed for significant growth. The project’s cement demand, estimated at 16 million tons (over 1 million tons annually, or 10 percent of Tibet’s cement output over the past five years), will spur expansion in cement, steel, and construction machinery sectors, amplifying domestic demand.
On the credit front, the project’s substantial investment will rely on state-owned bank loans and bonds, expanding credit volume. In 2024, cumulative social financing increments reached 32.26 trillion yuan, with government bonds totaling 11.3 trillion yuan. The project is likely to amplify fiscal expenditure, further stimulating infrastructure demand.
The hydropower initiative also provided a new catalyst for equity markets. Infrastructure stocks rallied following the official announcement of construction commencement. The China Securities Construction Engineering Index climbed 4 percent, while stocks such as China Power Construction Group hit their daily trading limit. Investors interpreted the project as a signal of economic stabilization, and propelled a broader A-share market surge.
2. The Yarlung Tsangpo hydropower dam project is intended to catalyze economic growth and employment in western China over the next decade, fostering long-term regional development and stabilizing social governance in border areas through economic upliftment.
Public data indicates that Tibet’s GDP reached 276.5 billion yuan in 2024, with a growth rate of 6.3 percent, outpacing national GDP growth. Also, fixed asset investment surged by 19.6 percent and industrial added value rose by 18.3 percent. The dam project is projected to contribute over 20 billion yuan annually to fiscal revenue, equivalent to 70 percent of Tibet’s 2024 public budget revenue (27.719 billion yuan), while generating over 300,000 person-years of employment. This could boost Tibet’s annual GDP growth by 1.5 to 2 percentage points, a huge impact for an autonomous region with just over 3 million people.
The project’s commencement will also significantly enhance local infrastructure:
- Transporting equipment and materials necessitates high-grade highway construction. Local economic development would be spurred if upgrading transforms the local Medog Highway from a perilous “death route” to a vital “economic corridor.”
- Establishing ultra-high-voltage power grids and transmission infrastructure will generate over 3 trillion yuan in upstream and downstream industrial chain value. This could transform Tibet from a peripheral region into a “green energy hub” and a “core investment area in the west,” to use the CCP’s parlance.
- During the peak of construction, demand for cement, steel, and machinery will stimulate local service industries (catering, accommodation, retail), boosting regional income.
- Upon completion, the project is set to deliver stable, low-cost electricity, enabling local mining development (rich in copper, gold, silver, and zinc, previously constrained by energy bottlenecks) and high-tech industries (e.g., data centers, electrolytic aluminum). The project could also lead to the optimizing of industrial structures and fostering of new growth drivers.
The dam project could promote sustained development in western China, enhance economic growth, boost the local population, stabilize border regions, and strengthen economic integration between Tibet and other parts of China. It could also allow the CCP to provoke or escalate potential future China-India conflicts as the area gains more resources and high-altitude-acclimated personnel.
3. Agriculture in the western parts of China could improve following the construction of the Yarlung Tsangpo dam. For instance, irrigation areas could increase in western China and large-scale inter-basin water transfer capabilities to the northwest part of the country could be enhanced. Successful future water conservancy projects could also reclaim some wasteland for cultivation, thereby boosting China’s grain production.
Significant improvements in food security in western China would potentially expand the CCP regime’s development space and strategic depth, promote balanced population distribution, narrow the economic gap between eastern and western regions, and improve long-term domestic stability in border areas.
4. The PRC’s energy security would be enhanced if the Yarlung Tsangpo hydropower dam project is successfully completed.
According to public data, China’s oil dependency in 2024 was 71.4 percent and natural gas dependency was 40.4 percent. If the downstream hydropower project generates 300 billion kWh annually, it would be equivalent to 150 million tons of oil. This would allow China to reduce national oil imports by one-third, saving about 100 million tons of standard coal and cutting CO2 emissions by 260 to 300 million tons.
Increased domestic energy self-sufficiency would also allow the PRC to reduce its reliance on Middle Eastern energy supply chains and mitigate geopolitical vulnerabilities.
5. The construction of the Yarlung Tsangpo dam lays critical groundwork for China’s future green energy grid, positioning the CCP to exert greater geopolitical influence and pressure over South Asian nations.
Economic Advantage and Regional Dependency
China’s hydropower exports to South Asia hold a competitive edge, potentially fostering dependency in manufacturing, industry, and broader economies. The Yarlung Tsangpo dam, generating 300 billion kWh annually, benefits from a low levelized cost of electricity (LCOE). According to the International Renewable Energy Agency (IRENA), global hydropower LCOE averages $0.057 per kWh. But such costs are as much as 20 to 30 percent lower for the Three Gorges Dam. China’s mega-projects. The Yarlung Tsangpo project is estimated at $0.03–$0.05 per kWh, undercutting South Asia’s average of $0.08 per kWh.
Mirroring strategies in telecom (Huawei) and electric vehicles (Chinese EVs make up 52 percent of global EV exports, capturing markets via low prices), China could export cheap electricity and equipment, sidelining local suppliers. South Asia’s peak power deficits, estimated at 10 to 20 GW, create a market opportunity. If the Yarlung Tsangpo dam’s energy exports cover 10 percent of demand, local firms in South Asia could lose 20 to 30 percent of market share.
The PRC’s infrastructure financing often promotes its power equipment, raising debt trap risks for South Asian nations. Notable examples include Sri Lanka’s Hambantota Port, where Chinese loans accounted for 20 percent of debt, leading to a 99-year lease, and Laos, where $670 million in Chinese loans to a hydropower project resulted in a transfer of 51 percent grid equity to China in 2020. The CCP could also compromise South Asian infrastructure security through embedding cybersecurity risks, such as backdoors in Chinese-built power facilities.
Geopolitical Leverage Through Energy Supply
The PRC could leverage its electricity supply to pressure South Asian nations into concessions on national interests. As economies grow reliant on cheap Chinese power, Beijing could disrupt energy supplies during critical periods to create destabilization.
The CCP has already weaponized water resources against downstream countries. For example, China’s Mekong River dams have triggered droughts downstream, severely impacting rice and fishery yields in affected countries. This has given Beijing leverage to pressure downstream nations into signing CCP-led cooperation agreements, joining the Belt and Road Initiative, or supporting the PRC’s stance on the South China Sea. With the Yarlung Tsangpo dam, the CCP has another avenue to weaponize water and energy supplies against downstream countries, affording Beijing leverage in trade or border disputes.
A successful CCP power export model could extend through the Belt and Road Initiative to Central Asia, advancing the PRC’s Global Energy Interconnection (GEI) plan. The GEI, aiming to connect over 100 countries’ grids with over $1 trillion in Chinese-led investment, is an effort by the CCP to leverage environmental (“green”) agendas to dominate global energy markets. With China holding 90 percent of global ultra-high-voltage (UHV) technology, GEI could link Africa and Eurasia by 2030, cementing Beijing’s energy leadership.
6. The CCP’s strategic ambitions are hampered by the serious deficiencies of its authoritarian system. Pervasive and persistent corruption could see the Yarlung Tsangpo hydropower project fail to deliver as expected upon completion or remain unfinished in the worst-case scenario. It remains unclear if the project will be completed on schedule (estimated at 10 years, with an initial power-generation date in early to mid-2030s) due to geological challenges in the seismically active Yarlung Tsangpo Grand Canyon and potential delays due to engineering complexities.
Regardless, South Asian countries that stand to be impacted by the Yarlung Tsangpo dam must be vigilant and develop contingencies for the CCP’s power plays. The CCP takes the long view in advancing its hegemonic agendas, and will press on doggedly even if its projects meet with initial setbacks.
