When Beijing purges generals, what CEOs should know

When China's second-highest military officer falls from grace amid allegations of espionage and corruption, CEOs should pay attention. The ouster of General Zhang Youxia—accused of leaking nuclear weapons program information to the United States and accepting bribes for military promotions—represents what one analyst called "the total annihilation of the high command." This isn't merely a Beijing palace intrigue story. It's a signal flare for every Fortune 1,000 company with exposure to China.

Since March 2023, approximately 20 Chinese generals have been purged. Six came from the Rocket Force, which controls China's arsenal of ballistic, hypersonic, and cruise missiles. More than 50 senior military officers and defense industry executives have been removed or placed under investigation over the past two and a half years. The purge has touched every branch: army, air force, navy, strategic missile force, paramilitary police, and major theater commands—including the one focused on Taiwan.

This represents the most aggressive dismantling of Chinese military leadership since the Mao Zedong era. Christopher Johnson of China Strategies Group assessed it as "unprecedented in the history of the Chinese military." That assessment matters because it reveals a fundamental aspect of China's internal dynamics—and, by extension, the stability of the geopolitical environment in which global businesses operate.

The control question

Remember the Chinese spy balloon that drifted across North America in 2023? The incident raised uncomfortable questions about who actually controls China's military. Did Xi Jinping approve that mission, or did the People's Liberation Army (PLA) act independently? The question wasn't academic then, and it isn't now.

The parallel to 2011 is instructive. When Defense Secretary Robert Gates visited Beijing to mend relations, the PLA unveiled a new stealth fighter hours before he met with President Hu Jintao—apparently without Hu's knowledge. The pattern suggests a recurring challenge: civilian control over military operations in China remains, at best, inconsistent.

Unlike America's National Security Act, which was implemented after World War II, China lacks comparable institutional safeguards. In the United States, the President serves as civilian Commander-in-Chief, with the Department of Defense managing military operations and Congress providing budgetary oversight. China's Central Military Commission concentrates power differently. Comprised almost entirely of high-ranking uniformed officers, it places ultimate authority in the Chairman—currently Xi Jinping—who often serves as the sole civilian member.

More fundamentally, the People's Liberation Army answers to the Chinese Communist Party, not the state itself. Its primary mission is ensuring the Party's survival. This "Party-Army" model creates a dual mandate: national defense and domestic political enforcement. In many ways, the PLA remains the Wild West in Beijing.

Business implications: Beyond the headlines

For corporate leaders, Xi's military purge carries implications that extend far beyond defense policy. It signals intensifying internal political pressures at a moment when global business already faces unprecedented complexity. Companies must now navigate not just US-China tensions, but uncertainty about China's internal stability and decision-making coherence.

The timing matters. With 18 months until the next Communist Party Congress in late 2027—which will select a new Central Commission and appoint a new Central Military Commission—Xi appears to be consolidating control and eliminating potential rivals. This consolidation occurs as American intelligence agencies unanimously assess that while Russia creates mayhem in Europe, only China possesses the capacity to mount a genuine global challenge to US interests.

Yet the PLA remains unprepared for conflict with the United States. China aims to "modernize" its armed forces by 2035 and make them world-class by 2049. The question for business leaders: Does Xi's military surge indicate preparation for global confrontation, or does it reveal that loyalty now trumps competence in Beijing's power structure?

Preparing for the new reality

Innovative companies recognize that this environment demands fundamental strategic recalibration. The era of endless tit-for-tat tariffs has arrived. Supply chain diversification is no longer optional. Interest rate volatility will persist as geopolitical risk premiums get priced into capital markets. Companies must engage governments and stakeholders across multiple jurisdictions with unprecedented sophistication.

This isn't your father's globalization. The old playbook—minimize political risk, optimize for efficiency, assume stable rules—no longer applies. Today's environment requires active navigation of geopolitical crosscurrents, real-time intelligence about shifting power dynamics, and communications strategies that account for multiple audiences across competing national interests.

Fortune 1,000 companies need to stress-test China strategies against scenarios ranging from continued integration to accelerated decoupling. They must evaluate exposure not only in manufacturing and sales but also in technology transfer, intellectual property, talent flows, and financial dependencies. The question isn't whether to maintain China operations, but how to build resilience against multiple potential futures.

Navigating complexity

Senior executives responsible for geopolitics, corporate affairs, and stakeholder engagement increasingly recognize they're operating in an environment where traditional risk management frameworks fall short. The interconnected nature of today's geopolitical business landscape demands specialized expertise at the intersection of global commerce and political dynamics.

This is precisely the domain where Caracal Global operates. As a geopolitical business communications firm, Caracal specializes in helping companies navigate the intersection of globalization, disruption, and politics. Led by a Michigan-born, DC-based advocate with deep experience in US and UK national political campaigns, US-China commercial relations, NATO, and strategic media engagement, the firm provides intelligence, strategy, and communications services designed explicitly for this moment.

Caracal Global's clients—senior executives at leading corporations—rely on the firm to transform geopolitical complexity into actionable strategy. Whether stress-testing supply chain alternatives, developing stakeholder engagement frameworks for multiple governments, or crafting communications that resonate across different political environments, Caracal brings expertise in both globalization and American politics to bear on the most challenging questions facing multinational enterprises today.

The bottom line

Xi Jinping's most significant domestic challenge is keeping the People's Liberation Army happy and in check. For CEOs, the challenge is understanding how that internal dynamic affects their business—and preparing accordingly. The old assumption that China's domestic politics stayed separate from international commerce no longer holds. Every purge, every power consolidation, every question about who controls what in Beijing ripples through global supply chains, market access decisions, and risk calculations.

The companies that thrive in this environment will be those that treat geopolitical intelligence as a core competency, not an afterthought. They'll build strategies that account for multiple scenarios. They'll engage stakeholders proactively across different jurisdictions. And they'll recognize that in a world of persistent uncertainty, the ability to navigate complexity becomes a competitive advantage.

When Beijing's generals fall, smart CEOs don't just watch. They recalibrate.

-Marc

*****

Marc A. Ross is a geopolitical strategist and communications advisor. He is the founder of Caracal Global and is writing a book entitled Globalization and American Politics: How International Economics Redefined American Foreign Policy and Domestic Politics.

The end of predictability: Why CEOs must rethink global business strategy now

"There are decades where nothing happens, and there are weeks where decades happen." This observation, often attributed to Vladimir Lenin, captures the seismic shifts reshaping global commerce in early 2026. For corporate leaders, the comfortable assumptions that guided international strategy for a generation have evaporated, replaced by a landscape demanding fundamentally different capabilities.

The pillars supporting the postwar economic order are crumbling simultaneously. The United States, long the guarantor of rules-based trade and stable global finance, is pursuing an explicitly transactional foreign policy that weaponizes economic interdependence. The Federal Reserve's independence faces unprecedented political pressure. Meanwhile, the capital flows that financed global growth are reversing as major creditor nations prioritize domestic needs and strategic autonomy.

This new paradigm represents more than cyclical turbulence. We are witnessing a structural break from the system that delivered a ninefold global economic expansion since 1960. The implications for business strategy are profound and immediate.

Recent events crystallize the new paradigm. When Washington threatened tariffs against European allies over Greenland, nearly $1 trillion in transatlantic trade hung in the balance. A Justice Department investigation of Federal Reserve Chair Jerome Powell—ostensibly about building renovations—sent shockwaves through global finance. Foreign central bankers now openly question whether the Fed's emergency lending facilities remain apolitical tools or could become instruments of coercion.

These are not isolated incidents but symptoms of a fundamental reorientation. Something fundamental has shifted. Washington's viewpoint is now all about power, dependency, and coercion. Nations are systematically reducing strategic exposure to the United States, even as they recognize the enormous costs involved.

The consequences ripple across every dimension of global business. Trade relationships worth trillions face chronic uncertainty. Supply chains optimized for efficiency must be rebuilt for resilience. The "risk-free" asset underpinning global finance is increasingly viewed as politically contingent. And the pool of low-cost international capital that financed both public deficits and private expansion is shrinking rapidly.

This environment demands four critical responses from corporate leadership:

First, prepare for persistent tariff volatility and trade fragmentation. The era of steady trade liberalization has ended. Companies must develop scenario planning that accounts for rapid policy shifts, retaliatory cycles, and the politicization of commercial relationships. Supply chain strategies require geographic diversification beyond single-country dependencies, with particular attention to critical inputs and technologies. The old calculus of global optimization must give way to resilience planning that accepts higher costs as insurance against disruption.

Second, anticipate structurally higher capital costs. As Europe and Canada accelerate defense spending, as Asian economies retain more capital domestically, and as the United States continues deficit financing amid political uncertainty, competition for investment capital will intensify. Chief financial officers must reassess leverage assumptions, refinancing timelines, and return hurdles. Projects that penciled out in a low-rate environment require fresh evaluation. Strategic capital allocation becomes even more crucial when capital itself becomes scarcer and more expensive.

Third, develop sophisticated government engagement capabilities across multiple jurisdictions. The fragmentation of global governance means companies can no longer rely solely on US diplomatic infrastructure or multilateral frameworks. Direct relationships with foreign governments, regulatory bodies, and political stakeholders are now essential. This requires understanding local political dynamics, building a credible presence in key markets, and maintaining dialogue channels that can survive bilateral tensions between capitals.

Fourth, invest in geopolitical intelligence and strategic communications. The speed and unpredictability of recent events underscore the inadequacy of traditional business intelligence. Companies need real-time analysis of political developments, assessment of their commercial implications, and the ability to communicate effectively with diverse stakeholder audiences during periods of volatility.

Business leaders cannot change the geopolitical environment, but they can adapt their strategies, capabilities, and stakeholder relationships to thrive despite uncertainty. This requires acknowledging that efficiency is no longer the sole metric, that political risk has become a first-order concern, and that success demands capabilities many companies have not traditionally prioritized.

The comfortable world of predictable trade rules, cheap capital, and stable political frameworks is gone. The question is whether business leaders will adapt quickly enough to the world replacing them. Those who do—who invest in intelligence, diversify strategically, engage governments proactively, and communicate effectively—will find opportunities even in turbulence. Those who wait for stability to return will discover they've waited too long.

Navigating this environment requires specialized expertise at the intersection of globalization, disruption, and politics—precisely where Caracal Global operates. As a geopolitical business communications firm, Caracal Global provides the intelligence, strategy, and communications capabilities essential for this new era.

Our clients—senior executives responsible for geopolitics, corporate affairs, public affairs, stakeholder engagement, and communications—face unprecedented challenges requiring specialized skills. They need partners who understand both the substance of the global political economy and the nuances of engaging diverse stakeholders across cultures and regulatory systems.

Caracal Global's leadership brings this combination: Michigan roots and a Washington base, experience spanning US and UK national campaigns, deep expertise in US-China commercial relations and NATO affairs, and sophisticated media engagement. This background enables Caracal Global to translate geopolitical developments into actionable business strategy and to help clients communicate effectively in today's fractured landscape.

Caracal Global specializes in helping companies understand how American politics intersects with globalization pressures, providing the intelligence to anticipate shifts, the strategy to position advantageously, and the communications capabilities to engage stakeholders effectively.

At Caracal Global, we exist to help clients navigate exactly these challenges. Because in a world where decades happen in weeks, having the right expertise, intelligence, and strategic communications capabilities isn't optional—it's essential for survival and success.

-Marc

*****

Marc A. Ross is a geopolitical strategist and communications advisor. He is the founder of Caracal Global and is writing a book entitled Globalization and American Politics: How International Economics Redefined American Foreign Policy and Domestic Politics.

When American allies stop trusting and a post-predictability era

Canadian Prime Minister Mark Carney's Davos warning was blunt: we are entering a new world order "in the midst of a rupture." For multinational executives, this isn't abstract geopolitics—it's a planning crisis. How do you allocate capital, structure supply chains, and enter markets when the post-WWII framework that made cross-border commerce predictable is fracturing in real time?

Trump's rambling Davos address and his public dismissal of Carney crystalized the problem: mid-tier nations—Japan, Germany, Canada, South Korea, Australia, and others—are being forced to choose sides between the US and China. These aren't ideological choices. They're commercial decisions that will reshape trade flows, technology standards, and regulatory environments for a generation.

Trump's Davos performance reminded me of the Midwest business leaders I grew up around—the type who return from London with a Burberry scarf from Harrods and a conviction they know how to run the planet. The rhetoric is familiar: "You'd be speaking German without us," and "Canada wouldn't exist without us."

These statements might be historically defensible, but they reveal a psychological pattern that matters for business planning: American oscillation between global engagement and continental withdrawal.

Robert Kagan—Brookings senior fellow and former State Department official—has spent decades analyzing this pattern. In his 2021 Foreign Affairs essay and his book The World America Made, Kagan identifies what he calls America's core strategic problem: "Their capacity for global power exceeds their perception of their proper place and role in the world."

Unlike China (seeking to recover past greatness) or Russia (nostalgic for superpower status), Americans have never internalized their global role as permanent. Even after defeating Nazism, Soviet communism, and radical Islamist terrorism, most Americans view international engagement as exceptional rather than normal.

The result, Kagan writes, is "a century of wild oscillations—indifference followed by panic, mobilization and intervention followed by retreat and retrenchment."

For executives navigating transatlantic and transpacific strategy, this oscillation is the risk variable. It's why calling Afghanistan and Iraq "forever wars" matters—it signals American intolerance for the "messy, unending business of preserving a general peace."

Kagan argues that this on-again, off-again approach "has confused and misled allies and adversaries alike, often sparking conflicts that a steady application of American power and influence in service of a peaceful, stable, liberal world order could have avoided."

For business leaders, the question isn't whether America should be a reliable hegemon—it's whether America will be predictable enough to build long-term strategies around.

Carney's speech suggests allied governments are no longer confident in the answer. When Canada's prime minister urges mid-tier nations to "band together" and Trump refuses to meet with him, that's not diplomatic theater—it's a signal that traditional alliance frameworks are no longer reliable guardrails for commercial planning.

Companies with significant cross-border exposure face three immediate planning challenges:

1. Alliance reliability as a supply chain variable: If US security commitments become transactional or unpredictable, allied nations will diversify away from US-dependent systems. This affects everything from semiconductor supply chains to defense procurement to technology standards. Scenario plan for reduced US-allied coordination.

2. The mid-tier nation dilemma: When countries like South Korea, Australia, or Germany are forced to choose between US and Chinese economic orbits, they won't choose ideology—they'll choose commercial pragmatism. Map your exposure to markets facing this binary choice and develop strategies for both scenarios.

3. Institutional breakdown risk: Kagan warns that declining US leadership leads to "global instability, renewed great-power conflict, and the breakdown of vital international institutions." For multinationals, this means the WTO, international arbitration systems, and multilateral agreements may lose enforcement power. Build redundancy into governance frameworks.

The Kagan framework suggests this isn't a Trump phenomenon—it's an American psychology that predates and will outlast any single administration. That has planning implications:

+ Stop planning for policy clarity; plan for policy volatility. Build flexibility into capital allocation decisions that assume US oscillation between engagement and withdrawal.

+ Develop direct government engagement channels in key allied markets that don't depend on Washington coordination. If Carney is urging mid-tier nations to band together, your government affairs strategy should reflect that emerging architecture.

+ Treat US power as a declining variable, not a constant. Kagan argues the post-WWII order "depends on US power, not just American ideals." If that power becomes unreliable or internally focused, the order changes. Stress-test your strategies against scenarios where US economic and security commitments are transactional rather than foundational.

As for the recovery question, can America recover from what I view as a self-inflicted wound?

I believe yes, but Kagan's point is that American psychology makes sustained global leadership unnatural for most US citizens. The twentieth century, he notes, "was littered with the carcasses of foreign leaders and governments that misjudged the United States."

For executives, the lesson isn't to bet against American power—it's to stop assuming American consistency.

The unprecedented peace and prosperity of the post-WWII era represents a unique achievement in human history. But as Carney warned, we're now in the rupture. Your planning frameworks need to reflect that new reality.

Bottom line: Build strategies that can succeed whether America remains globally engaged or retreats into continental psychology. The oscillation itself is the constant.

-Marc

*****

Marc A. Ross is a geopolitical strategist and communications advisor. He is the founder of Caracal Global and is writing a book entitled Globalization and American Politics: How International Economics Redefined American Foreign Policy and Domestic Politics.