Hong Kong, July 7 : As with every socialist nation run by authoritarian regimes, the leaders in China see threats and dangers at every turn. Many are internal risks, but there are also external threats that leave the top rungs of the Chinese Communist Party (CCP) feeling nervous.
On 18 June, the International Security and Strategy Center (ISSC) at Tsinghua University in Beijing published its annual threat assessment. Called the "2026 External Security Risks for China", the 13-page document is essentially a top-ten list of threats to the wellbeing of communist China.
It makes for interesting reading as it reveals something of the CCP's psyche. Indeed, one explicit aim of the ISSC, a think-tank established in 2018, is "to elucidate and disseminate China's perspectives and policy propositions" and to "enhance the international community's understanding of China".
Topping the list of dangers is cross-strait relations with Taiwan, with the Tsinghua University academics unsurprisingly claiming this is China's foremost security risk. It pointed to three contributing factors - Taiwan independence activities, American arms sales to Taipei, and Japan's deepening involvement. For example, they are afraid that Tokyo will explicitly link the Taiwan Strait to Japan's own security.
The report added, "Special attention should be paid to the possibility of third parties or non-state actors launching cyberattacks on Taiwan's critical infrastructure; the resurgence of the '2027 timeline' narrative in new forms; and the prospect of a sitting head of state from an individual European country visiting Taiwan. Though low in probability, any of these events would produce an enormous impact."
Such triggers could lead parties to suspect each other's intentions, and events subsequently spiral out of control. The list calls this "third-party entrapment", where parties inadvertently react to one another and generate unwanted escalation. It is perhaps reassuring that China is well aware of this peril.
Despite lamenting such risks, China is unilaterally upping the ante against Taiwan. In military exercises, it routinely rehearses blockades of Taiwan, and it rings the island with a constant naval and coast guard presence. On 4 July, for instance, the China Coast Guard promised a patrol group would continue routine "law-enforcement patrols" east of Taiwan. This implies that China's non-naval presence there will be continuous as it harasses commercial vessels.
China's Taiwan Affairs Office said two days earlier that the patrols were a "lawful exercise of jurisdiction, a just act to safeguard national territorial sovereignty and maritime rights and interests". This is just one example of Beijing intensifying "gray zone" pressure on Taiwan. Another method is tampering with seabed communications cables.
China's second-highest external risk, for they are listed in descending order, is the structural deterioration of China-Japan relations. In fact, China believes bilateral ties have reached their lowest ebb, as it accuses Prime Minister Sanae Takaichi of provocative right-wing moves. The authors said "manageable friction" has eroded to "structural confrontation", indicating that problems cannot be contained in isolation anymore. They warned of little prospect of Japan's political line softening, and that relations would become permanently hardened.
The document also highlighted specific military threats. "Japan's moves in the following areas warrant close attention: increasing military presence in Okinawa, taking provocative actions in waters near the Diaoyu Islands, accelerating the deployment of US missile and missile defense systems on Japanese soil, and potentially breaching the last of the 'Three Non-Nuclear Principles' - the prohibition on bringing nuclear weapons into Japan."
The ISSC added that the risk of a maritime or aerial collision between China and Japan persists, and that the rise of populist sentiment in Japanese society could escalate friction incidents involving Chinese nationals in Japan.
However, China must take the blame for the plummeting relationship. It is China who is provocatively sending ships to the Senkaku/Diaoyu islands, and Beijing can hardly accuse Japan of militarism when its own defense budget is nearly five times greater.
The correlation between Chinese and Japanese defense expenditure is that Tokyo is responding to Beijing's snowballing investment in the People's Liberation Army(PLA).
Activities such as firing a long-range ballistic missile from a nuclear-powered submarine into the Pacific Ocean on 6 July do not help either. This provocative test followed the firing of an intercontinental ballistic missile deep into the Pacific in September 2024, the first such test in 40 years. These demonstrations are designed to send signals to would-be adversaries, and to show that the PLA can hurl nuclear- capable missiles well beyond the First Island Chain.
The third external threat to China, according to the Tsinghua University report, is decoupling of the China-US technology and supply chain. It suspects that concerns will rise in the second half of 2026, coinciding with US midterm elections that might exacerbate President Donald Trump's unpredictability. The report warns that bilateral "technology relations face the risk of a qualitative shift from 'transactional shocks' to 'systemic containment'".
The USA and UK initiated the "Tech Prosperity Deal" last year, and this will likely help consolidate a technology barrier against China. The report lamented that "the establishment of rare-earth supply chains bypass China, eroding Beijing's capacity for resource-based countermeasures"! All in all, volatility should be expected, and multinational companies may reassess the wisdom of maintaining high-end manufacturing inside China.
Deniz Karakullukcu, a foreign policy and security advisor at the Grand National Assembly of Turkey, commented that Beijing's fear is that "the US goal may not be to completely sever China from technology; the real aim is to ensure that while China maintains access to certain American technologies, it remains dependent in the most critical areas". China refers to this as "controlled dependency".
Fourth on the list, China warns of South China Sea tensions. Beijing perceives dual structural pressure, the first caused by the rotating chairmanship of ASEAN being taken up by the Philippines in 2026, which allows it to set the agenda. The other factor is the tenth anniversary (specifically 12 July) of the Permanent Court of Arbitration's ruling on China's exorbitant and illegal claims in the South China Sea.
The report warned, "The Philippines may attempt to force the content of the arbitration ruling into the negotiating text of the South China Sea Code of Conduct, while simultaneously dispatching warships to force resupply and reinforcement at Second Thomas Shoal. Any collision between Chinese and Philippine vessels at the shoal resulting in casualties would cause the situation to escalate sharply." This is somewhat ironic given that it is always overbearing Chinese vessels attempting to collide with smaller Philippine vessels. Funnily enough, two Chinese vessels ended up colliding with each other when they attempted to ram a diminutive Philippine vessel in August 2025.
China said the implications of escalating South China Sea tensions "extend well beyond regional security, directly threatening China's energy supply, trade corridors and its broader economic relationship with ASEAN". Yet despite the risks, Beijing continues to antagonise the Philippines and encroach into its exclusive economic zone.
Next up in terms of risks is global economic and financial turmoil. A convergence of international storms could conspire to damage the credibility of the US dollar, cause surging commodity prices and passive appreciation of the renminbi. This would put Chinese foreign trade under pressure. Last year, China had a trade surplus of USD1 trillion, and it fears a wolf-pack mentality of targeting China with tariffs and the like.
Karakullukcu commented here: "China's trade surplus is addressed in the report not as a sign of a weakening Chinese economy, but as a problem that China's export success could provoke political backlash in other countries. In other words, as China's trade surplus grows, the narrative in other countries - that China is suppressing our industry by selling state-subsidized, cheap and abundant products; we should respond with tariffs, quotas or import restrictions - could gain strength."
Sixthly, China is leery of spillovers from the Russia-Ukraine conflict. The authors stated: "In the first half of 2026, the Russia-Ukraine conflict enters a critical transition phase toward its 'political endgame'. Amid the broader strategic push to bring the conflict to a close, the tactical picture could manifest either as de-escalation and even ceasefire, or as a temporary expansion of hostilities. Each scenario would exert a different form of strategic pressure on China."
Karakullukcu commented: "The logic here is this: If the war ends, the US and Russia's behaviour toward China could shift; this could diminish China's current strategic advantages." The Turkish foreign policy advisor mentioned three subplots here. The first is that the USA "could allocate fewer resources to Europe and focus more on China. In other words, while the war continues, a significant portion of US attention and military stockpiles remains in Europe. If a ceasefire occurs, it's thought that Washington could concentrate more on the Indo-Pacific, technology competition and alliances around China."
The second corollary is that "Russia could become less dependent on China," according to Karakullukcu. "The war and sanctions have drawn Russia economically and diplomatically closer to China. In the aftermath of a ceasefire, if Russia can partially rebuild ties with Europe or other actors, it might seek to reduce its dependence on Beijing. The suggestion is that if Russia's room to maneuver expands, it might not feel compelled to align with China to the same degree on every security issue."
The third subheading is that "Europe and Ukraine could continue their criticisms directed at China. In other words, even with a ceasefire, Europe and Ukraine might keep accusing China of supporting Russia; this could lead them to pay more attention to maritime-security issues in China's near abroad."
Of course, the fact is that Beijing has not been neutral in this conflict. It clearly backs Russia and has repeatedly amplified Moscow's narrative about the war.
The seventh risk factor is institutional secularization of China-EU economic relations. Some in Europe are calling for a harder line against China, while de-risking in terms of energy, raw materials and digital technology is accelerating. This hardening stance was illustrated by the electoral loss of Viktor Orban in Hungary in April. Orban was considered an ally of both Russia and China.
Eighth, China is worried about artificial intelligence (AI)-enabled cyberattacks and the security of critical infrastructure. China routinely commits state-sponsored espionage against foreign governments and commercial entities, but it fears the same treatment. It is particularly worried about the weaponization of AI, and warned, "A coordinated attack on China's critical infrastructure represents the most destructive scenario."
As deemed by the ISSC, the penultimate external risk to China is how to protect overseas interests amidst a worsening terrorism landscape. After investing so much money in the Belt and Road Initiative, terrorism and political instability in places like Pakistan are threatening Chinese money and lives. For instance, 1,000+ terrorist attacks occurred in Pakistan last year. The report also cited instability in Bangladesh and Nepal.
Finally, the report listed a sudden North Korean crisis, including the possibility of a nuclear test or launch of a long-range ballistic missile. The authors believe North Korea is the most likely source of a "black swan" event in 2026. Beijing is worried that revision of the civilian US-South Korea Atomic Energy Agreement could provoke a strong backlash from Pyongyang, for instance.
One takeaway for Karakullukcu from the Tsinghua report was that the East China Sea, Taiwan Strait and the South China Sea are not being treated as separate issues. "It proceeds on the assumption that a large-scale crisis doesn't necessarily have to start with a military attack. This is a more sophisticated approach than the question of 'will there be a war?'"
However, threats to China are not just external. Last year, the CCP reached 101.29 million members, yet more than 1.012 million corruption cases were launched against members in 2025. That's one in every 1000! Such numbers underscore the endemic and corrupt nature of a one-party authoritarian system where elites steal vast sums and hide behind loyalty oaths.
Political scientist Minxin Pei of the Carnegie Endowment for International Peace estimates that corruption in China costs US$86 billion annually, or about 3% of its GDP.