China Security Report — July 18, 2026

Security analysis based on open-source intelligence and web research. Period: July 11 — July 18, 2026.

Executive Summary

During the period of July 11-18, 2026, China demonstrated a robust and assertive security posture, marked by significant military exercises, continued expansion in disputed maritime territories, and complex diplomatic engagements. Key developments included the conclusion of the "Joint Sea-2026" naval exercise with Russia, followed by joint Pacific patrols, signaling deepening military alignment. Concurrently, China faced international condemnation on the 10th anniversary of the South China Sea arbitration ruling, yet continued its militarization efforts, notably at Antelope Reef. Domestically, the People's Liberation Army Navy (PLAN) advanced its carrier aviation capabilities with intensive training for the Fujian carrier, while the cybersecurity sector saw military procurement bans and new financial regulations. Geopolitically, relations with the EU deteriorated amid accusations of China seeking to reshape the global order, and Sino-US ties remained fraught with visa disputes despite calls for economic dialogue.

Key Security Developments

• Joint Sea-2026 Naval Exercise with Russia Concludes
  The "Joint Sea-2026" naval exercise between China and Russia concluded on July 13, 2026, at a military port in Qingdao, Shandong Province, after commencing on July 6. The drills involved ten vessels, including surface, underwater, aerial, and support units, focusing on "jointly countering maritime security risks" and simulating real maritime and aerial combat environments. Following the exercise, some participating forces proceeded to the Pacific Ocean for joint maritime patrols, underscoring enhanced interoperability and strategic coordination between the two navies.

• China-Russia Joint Bomber Patrols
  Prior to and following the naval exercise, China and Russia conducted joint bomber aircraft patrols over the Sea of Japan, the East China Sea, and the Western Pacific, including through the Miyako Strait. These maneuvers, described by Beijing as routine annual cooperation, are seen by analysts as retaining significant strategic importance, aimed at jointly responding to security challenges and maintaining regional peace and stability.

• Strategic Submarine Missile Test
  On July 6, 2026, the Chinese People's Liberation Army (PLA) Navy successfully conducted a test launch of a strategic missile from a strategic nuclear submarine. The missile, carrying a dummy warhead, landed precisely within designated waters in the Pacific Ocean. The PLA Navy stated that this was a routine annual training arrangement and that relevant countries were notified in advance, emphasizing compliance with international law and non-direction at any specific target.

• Advanced Carrier Aviation Training for Fujian
  The PLA Navy released imagery on July 14, 2026, showcasing expanded land-based J-15 carrier-cycle training near Huangdicun, Huludao in Liaoning province. This intensive training is aimed at methodically expanding the pool of pilots and deck crews required to operate China's newest and most advanced carrier, the Fujian, which is fitted with electromagnetic catapults. The goal is to achieve full combat capability for the Fujian during 2026, marking a significant step in China's blue-water navy ambitions.

• Continued Militarization in the South China Sea
  Satellite imagery from June 2026 revealed ongoing dredging and construction at Antelope Reef in the Paracel Islands, with the likely goal of transforming the largely submerged feature into another military outpost. This development, potentially including a military-grade runway, is part of China's broader effort to assert control over South China Sea features, despite the 2016 arbitration ruling. The projected size of 603 hectares could make it China's largest feature in the Paracels.

• International Condemnation on South China Sea Ruling Anniversary
  On July 12, 2026, the 10th anniversary of the South China Sea arbitration ruling, 14 countries, including the United States, the Philippines, Australia, Japan, Germany, and the United Kingdom, issued a joint statement reaffirming the ruling's legal bindingness and urging China to comply. The European Union also released a separate statement. China's Foreign Ministry vehemently rejected these statements, calling the 2016 ruling an "illegal award" and a "political farce," and warned of negative effects on EU-China relations.

• Mounting Military Procurement Bans for Cybersecurity Firms
  China's military procurement system has suspended or permanently barred more than a dozen of the country's leading cybersecurity vendors since 2024. These actions, based on research from Natto Thoughts, are primarily due to contract bidding misconduct rather than technical failures. Notably, Beijing TopSec Network Security received a lifetime ban on all military procurement in January 2026, and Venustech Group also faced escalating sanctions, highlighting a broader shift in PLA procurement oversight.

• Tougher Cybersecurity Rules for Financial Sector
  On July 17, 2026, China's financial regulator proposed new cybersecurity rules for insurers and banks. These regulations aim to strengthen executive accountability, tighten risk monitoring requirements, and impose stricter penalties for failures in cyber incident management, indicating a national push to enhance financial sector resilience against cyber threats.

• EU Accuses China of Reshaping Global Order
  The European Union issued a new strategy paper on July 15, 2026, accusing China, alongside Russia, of attempting to "reshape the global order in line with their interests" and "fostering a return to a sphere-of-influence logic." This represents some of the bloc's strongest official criticism of Beijing. An EU Foreign Affairs Committee delegation is scheduled to visit Beijing and Shanghai from July 21-23 to discuss these geopolitical implications, economic imbalances, and human rights.

• Sino-US Diplomatic Tensions Over Journalist Visas
  On July 17, 2026, the US Trump administration announced it would drastically shorten visas for foreign journalists, cutting those for Chinese journalists to only 90 days. China's Foreign Ministry spokesperson Lin Jian condemned this as "discriminatory" and warned of potential reciprocal countermeasures, further straining already tense Sino-US relations despite recent high-level dialogues aimed at stabilization.

• Pakistan-China Counterterrorism and Border Security Cooperation
  Pakistan's Interior Minister Mohsin Naqvi and China's Minister of Public Security Wang Xiaohong met at the United Nations headquarters in New York City on July 9, 2026. They agreed to enhance cooperation in counterterrorism, internal security, and border management, including joint efforts against illegal migration and drug trafficking. Pakistan also highlighted its special protection force for Chinese nationals working in the country.

• China's Rapid Advancement in Space Capabilities
  Lt. Gen. Douglas A. Schiess, the nominee for the next Chief of U.S. Space Force, stated on July 16, 2026, that China's advancements in "counter-space and space superiority capabilities" are "breathtakingly fast." He noted China's development of a "kill chain" to target US carrier strike groups and bombers. Classified documents also revealed a joint China-Russia plan to disrupt Starlink satellites through cyberwarfare and jamming, highlighting space as a critical domain for future conflict.

Geopolitical Impact and Regional Dynamics

China's security developments during this period significantly impact regional stability and its relations with major global powers. The intensified military cooperation with Russia, exemplified by the "Joint Sea-2026" exercise and joint bomber patrols, solidifies a strategic alignment that directly challenges the US-led security architecture in the Indo-Pacific. This partnership, underscored by the 25th anniversary of their Treaty of Good-Neighborliness and Friendly Cooperation and a 25.6% increase in bilateral trade in H1 2026, positions Beijing and Moscow as a formidable counterweight to Western influence. The joint activities, particularly in sensitive areas like the Sea of Japan and the Western Pacific, contribute to a perception of increased assertiveness and a coordinated effort to project power beyond their immediate borders.

In the South China Sea, China's continued disregard for the 2016 arbitration ruling and ongoing militarization of features like Antelope Reef exacerbate tensions with claimant states, particularly the Philippines, and draw strong condemnation from Western powers. The joint statement by 14 nations and a separate EU statement on the ruling's 10th anniversary highlight a growing international consensus against China's expansive maritime claims, yet Beijing remains defiant, threatening negative repercussions for EU relations. This persistent assertiveness risks accidental clashes and miscalculations, maintaining an elevated risk profile in the disputed waters.

Relations with the European Union have notably deteriorated, with the EU accusing China of actively seeking to "reshape the global order". This strong criticism, coupled with the EU's development of a "solidarity instrument" to reduce reliance on China, indicates a hardening stance and a move towards "de-risking" in economic and strategic spheres. While dialogue channels remain open, with an EU delegation visiting China, the underlying tensions over trade imbalances, human rights, and geopolitical alignment with Russia are profound. Sino-US relations, despite recent high-level summits aimed at stabilization, remain fraught. The US decision to shorten visas for Chinese journalists prompted immediate warnings of reciprocal countermeasures from Beijing, illustrating the fragility of diplomatic ties amidst ongoing competition in areas like cybersecurity, trade, and regional influence.

Military and Defense Analysis

China's military and defense posture during this period reflects a sustained and ambitious modernization drive, particularly within its naval and space forces. The intensive land-based training for the Fujian aircraft carrier's deck crews, utilizing electromagnetic catapults, signals a rapid progression towards fielding a genuine blue-water carrier force with enhanced operational capabilities. This development, coupled with the successful strategic submarine missile test in the Pacific, underscores China's commitment to expanding its power projection capabilities and strengthening its nuclear deterrent. The participation of submarines in the "Joint Sea-2026" exercise with Russia further highlights the PLA Navy's growing underwater warfare capabilities and its increasing interoperability with a key strategic partner.

Defense spending continues its upward trajectory, with China's 2026 defense allocation set at approximately $281 billion, a 6.9% increase from the previous year. This consistent growth, around 7% annually since 2023, is directed towards advancing the integrated development of mechanization, strengthening joint operating systems, and accelerating the growth of new domain, high-quality combat capabilities. This investment supports the modernization of military logistics, advanced weaponry, defense science, and personnel training, all aimed at building a highly skilled and technologically advanced military.

The space domain is emerging as a critical area of focus for China's military strategy. US Space Force officials have noted China's "breathtakingly fast" advancements in counter-space and space superiority capabilities, including the development of a "kill chain" designed to target US carrier strike groups and bombers. The revelation of a joint China-Russia plan to destroy Starlink satellites through cyberwarfare and jamming further illustrates Beijing's intent to leverage space for military advantage and disrupt adversary capabilities in future conflicts. This strategic emphasis on space, coupled with ongoing naval expansion and modernization, indicates a comprehensive approach to developing multi-domain combat power capable of challenging existing regional and global security dynamics.

Outlook and Forecast

Short-term trends (1-3 months):
In the immediate future, China is likely to maintain its assertive stance in the South China Sea, continuing its island-building and militarization efforts while rejecting international rulings. We can anticipate further diplomatic exchanges and condemnations following the 10th anniversary of the arbitration ruling, but little change in China's operational behavior. Military cooperation with Russia is expected to deepen, with more joint exercises and patrols, particularly in the Indo-Pacific, as both nations seek to counter perceived Western encirclement. The PLA Navy will likely continue its rigorous training for the Fujian carrier, with potential for further sea trials or public demonstrations of its catapult launch capabilities. Cybersecurity will remain a critical internal and external focus, with the implementation of new financial sector rules and continued efforts to address procurement misconduct within the military. Tensions with the US over issues like journalist visas are likely to persist, potentially leading to reciprocal actions.

Critical flashpoints and risk areas:
The South China Sea remains a primary flashpoint, with the risk of accidental clashes and miscalculations remaining elevated due to increased "gray-zone" maritime pressures and China's persistent assertiveness. The ongoing militarization of features like Antelope Reef could provoke stronger reactions from claimant states and their allies. The Taiwan Strait also remains a critical area, with China Coast Guard operations east of Taiwan contributing to regional instability. Any significant increase in military activity or perceived provocations in this area could rapidly escalate tensions. The cyber domain is another critical risk area, given suspected China-aligned hacking activities against sensitive targets in the US and Canada, and the potential for cyber warfare against critical infrastructure or satellite networks, as suggested by the joint China-Russia plan to target Starlink.

Indicators to monitor:
Key indicators to monitor include the frequency and scale of China-Russia joint military exercises, particularly those involving strategic assets or operating in sensitive regions. Any further reports on the progress of the Fujian carrier's operational readiness or the deployment of new advanced weaponry will be crucial. In the South China Sea, observe satellite imagery for further construction or deployment of military assets on disputed features, and monitor interactions between Chinese vessels and those of other claimant states or their allies. Diplomatic statements and actions from the EU regarding its "de-risking" strategy and any reciprocal measures from China will also be important. Finally, watch for developments in China's space program, particularly regarding counter-space capabilities and any public statements or actions related to satellite interference or destruction.

Strategic recommendations:
For regional and international actors, it is recommended to maintain a united front in upholding international law, particularly regarding the South China Sea arbitration ruling, and to consistently challenge China's unlawful claims through diplomatic channels and freedom of navigation operations. Strengthening alliances and partnerships in the Indo-Pacific, including joint exercises and intelligence sharing, is vital to enhance deterrence and collective security. Investing in resilient supply chains and cybersecurity defenses is crucial to mitigate risks associated with China's economic and cyber influence. Dialogue channels with Beijing should be maintained where possible, focusing on de-escalation mechanisms and areas of mutual interest, such as AI governance, while clearly communicating red lines on sensitive issues like Taiwan and human rights.

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