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Making Sense of China’s Muddled Economic Policy By: Dylan Shepard “Chinese Communist Party (CCP) general secretary Xi Jinping addresses Chinese and foreign journalists at the Great Hall of the People” via China News Service is licensed under CC BY 3.0 From an outside perspective, China’s current economic policies appear to make little sense. On the one hand, China dispatches its envoys overseas to reassure multinationals and foreign governments that China is open for business after two years of zero-covid lockdowns (Landler and Bradsher 2023). On the other hand, numerous reports have emerged of continued invasive Chinese probes into foreign businesses operating within the country and other punitive measures against its own domestic firms based on seemingly either ideological or national security justifications (Leahy et al. 2023a; The Economist 2023). So which is it? Is Xi Jinping seeking to continue his “common prosperity” crackdown on private enterprise or does he wish to divert from his often maligned leftist economic agenda to rescue his country from its recent malaise and anemic growth? Although perfectly reading Xi’s mindscape proves impossible, the recent preponderance of both pro-market and anti-market economic policies coming out of Zhongnanhai reflects a senior Chinese leadership that is deeply ambivalent about its policy direction. In many ways the Chinese government appears to be of two minds on this issue. While some of their actions reflect a genuine attempt to improve China’s dour economic outlook through revitalizing China’s private sector, the simultaneous holdover of many aspects of Xi’s radical “common prosperity” agenda reveal both contrasting responsibilities and incentive structures for the communist regime. This is because in order to maintain the legitimacy of the party, the government is tasked with managing a delicate dual mandate: satisfy the business interests within the party with high growth rates while at the same time appeasing their historical grassroots among the rural poor and employees of the state that rely upon the government for financial support. The dilemma for Beijing is that to advance the interests of one of these groups frequently worsens the condition of the other. In practice, this simple contradiction has proven an immense headache for the Chinese government and threatens to derail the success of Xi Jinping’s third term in office. Historical Context: A Jaunt Through CCP Economic History In the violent tumult of Mao Zedong’s nearly three decades in power, the vestiges of the wealthy elite and landed gentry from the Republican era were largely wiped out in a series of party orchestrated land reform and class struggle campaigns (Rossabi 2014, 382-385). Much of this was guided under Mao’s vision of 共同富裕, or common prosperity, which posited that wealth needed to be distributed equally — even if that meant holding back the economic development of one region or group in order to achieve the equitable development of all (Dunford 2022). As Mao’s ideas fell out of favor during reform and opening up in the 1980s, they gave way to Deng Xiaoping’s corollary of allowing those in geographically fortuitous positions — such as those more closely linked to international supply chains on the eastern seaboard — to achieve prosperity first (先富论) before the more remote rural interior would catch up (Zhou 2007, 8). This was part of Deng’s broader “ladder-step transition theory” (梯度推移理论) which aimed for the prosperity seen on the coasts to eventually radiate outward, creating a ladder of economic growth for China’s poorer provinces to climb up (Lim and Horesh 2016). Consequently, these policies led to growing inequality as different areas of China developed at different rates. On the coasts, poverty undoubtedly persisted for many, but the dynamism of their liberalized economies also heralded the rise of a nascent middle class and a growing number of self-made millionaires. This dynamism contrasted with the continued stagnation of interior China, which primarily relied upon agriculture and state owned industries as major sources of employment — neither of which offered many opportunities for capital accumulation. Responding to this changing economic landscape, Jiang Zemin’s “Three Represents” (三个代表) policy exemplified the Communist Party’s full transition from the class-based dogma of the Mao era into a new more inclusive mass membership party (Goldkorn 2021, 198). In July of 2001, the “Three Represents” was codified in the CCP constitution at the 17th Party Congress which stated that the party must “represent the interests of the overwhelming majority of the people,” including the growing number of Chinese entrepreneurs and capitalists primarily situated on the coasts (Atwill and Atwill 2021, 349-350). In doing this, however, the CCP had unwittingly created its dual mandate catch-22. On the one hand, Jiang’s expansion of the party successfully integrated China’s commercial class — an interest group that is primarily benefited by enhancing China’s economic competitiveness on the world stage, thus desiring further deregulation and liberalization. At the same time, however, the Communist Party still had to represent the interests of its traditional grassroots among the People's Liberation Army, industrial workers, and the rural peasantry which benefit tremendously from state patronage. This tension between obligations for the party quickly created a conflict of interest. As pointed out in George Washington University professor Bruce Dickson’s 2016 book, The Dictator's Dilemma , although the early economic reforms of the Deng era represented a “reform without losers,” Jiang’s further liberalizations often came at the expense for many of the groups that comprised the CCP’s traditional base of support (Lau et al. 2000, 120-143). For example, as a result of Jiang’s reforms of China’s state owned enterprises (SOEs) during the latter half of the 1990s, tens of millions of workers were laid off or forced into early retirement as a result of privatizations that were necessary to improve the productivity and efficiency of China’s macroeconomy (Dickson 2016, 222-224; Rossabi 2014, 400). Although most authoritarian regimes rarely trouble themselves with the plights of the poor, instead focusing on securing critical support among the ruling elites, Dickson illustrates how the Chinese leadership has historically behaved differently in this respect. He claims the Chinese leadership is driven principally by a paranoia of mass popular unrest mobilizing into revolution rather than from fear of interior party plot (Dickson 2016, 11-12). Dickson may be downplaying the CCP’s fear of internal coup — the lessons from Bo Xilai, Lin Biao, the Gang of Four, and Hua Guofeng prove otherwise — but he demonstrates beyond reasonable doubt that the leadership cares deeply about ameliorating discontent among the masses, on top of traditional totalitarian regime preoccupations (Rossabi 2014, 389-390; Torigian 2022). The administration of Jiang Zemin’s successor, Hu Jintao, is perhaps the perfect exemplification of this point. Although Hu Jintao’s policy salience from Jiang Zemin is frequently over emphasized in the discourse of the so-called “lost decade” of his rule, efforts to reduce the urban-rural divide undoubtedly took up a precedence in the Hu-Wen era to a degree not seen previously in his predecessor (Howell and Duckett 2018; Rossabi 2014, 400). Under his government, unpopular tax levies against farmers were abandoned, labor rights and rural healthcare was expanded, and Hu’s occasionally dubbed “new deal” industrial policy invested significantly in creating job opportunities in the remote interior while simultaneously increasing its linkages to critical supply chains through massive infrastructure projects (Howell and Duckett 2018; Lam 2002; Cheng 2003, 339-342). Officially, this policy in Beijing was known as the “construction of a new socialist countryside” (社会主义新农村建设) which came to define the policy legacy of the Hu-Wen era (Howell and Duckett 2018). In doing this, however, Hu made sure to strike a careful balance between advancing the welfare of China’s rural poor while also maintaining the country’s export-driven economic growth. After all, Hu’s welfare and public works programs proved expensive, requiring ever larger revenues for the state that were predicated upon rising tax receipts from a burgeoning middle class and China’s further integration into global markets (Howell and Duckett 2018). It was in this backdrop of Hu’s managed balance of interests between China’s nouveau riche and the CCP’s grassroots that Xi Jinping would assume power in 2013, bringing a new outlook on how to deal with the party’s dual mandate dilemma. For much of his first two terms, however, Xi had yet to formulate a coherent strategy to address the issue. Although there were many continuities with Hu on social welfare policy, Xi Jinping initially wavered on his commitment to reform China’s unequal household registration scheme known as hukou (户口) with his paltry 2014 reforms that continued to frustrate those living in rural areas due to restrictions on employment and access to public services ( The Economist 2022). At the same time, Xi largely continued the principle of reform and opening up (改革开放) which saw a further increase of inequality within the country despite his growing public admonishments of “excessive incomes” (Xi 2021a, 170). It would not be until 2021 when Xi Jinping would fully roll out his philosophy to address the CCP’s disparate incentive structures. To his dismay, it has largely only exacerbated the CCP’s legitimacy crisis through disrupting Hu’s delicate balancing act of appeasing both sides. Common Prosperity’s Failed Attempt to Address the Dual Mandate Dilemma On August 17th, 2021, Xi Jinping delivered a landmark speech at the 10th meeting of the Commission for Financial and Economic Affairs that would form the blueprint of his emerging common prosperity doctrine and his attempt to address the dual mandate dilemma. Acknowledging the structural threat posed by rising inequality to the party’s legitimacy, he told the commission that the pursuit of common prosperity was necessary in order to “... strengthen the foundations of our party’s long-term governance” (Xi 2021a, 164). To achieve common prosperity, Xi outlined six headline strategies, each of which have come into force in some form at the policy implementation level. Pursue more balanced, coordinated, and inclusive development. Enlarge the middle-income group. Promote equitable access to basic public services. Adopt rigorous measures to regulate and adjust high incomes. Promote common cultural prosperity. Promote common rural prosperity. Although some of these measures appear to be an anathema to a market economy, Xi makes clear he has no intention of returning to the command and control system of Chairman Mao. Rather than abolishing the private sector entirely, Xi aims to harness capital as a tool to achieve the CCP’s social welfare objective of reducing economic inequality. Wei Lingling, chief China correspondent at the Wall Street Journal , described this mixed economy posture as creating “... a state in which the party does more to steer flows of money, sets tighter parameters for entrepreneurs and investors and their ability to make profits, and exercises even more control over the economy than now” (2021). In other words, the private sector would continue to exist, albeit under increased supervision and management by the central government. To achieve common prosperity, Xi has emphasized how he is mobilizing “... the whole Party, the entire nation, and all sectors of society to join the war against poverty” (Xi 2021b, 156). With respect to the private sector, this frequently involves public-private partnerships such as the “10,000 enterprises helping 10,000 villages” (万企兴万村) scheme which aimed at supporting rural revitalization through poverty alleviation and economic stimulation (Xi 2021b, 156; Xu and Bo 2022). Although these “partnerships” may be popular among the CCP’s core base of support, participation is hardly voluntary or beneficial for private industry, despite Xi’s claims to the contrary (Xi 2021b, 156). After all, a brief examination of the immense pressures faced by domestic Chinese firms proves otherwise. In an attempt to further distort business behavior to government directives, Zhongnanhai has undertaken a dual pronged approach of quashing epicenters of independent private power and replacing them with smaller, more decentralized enterprises that are directed by pro-CCP executives. In practice, this is observed at the policy implementation level in the government’s recent antitrust and regulatory drive along with the creation of “golden shares” which are Chinese state-owned equity shares that allow the CCP to elect special board members in large corporations that have effective veto power on any firm decision that goes against government policy (McMorrow et al. 2023a). For example, Alibaba, one of China’s biggest business success stories, was fined a $2.8 billion antitrust levy, has a government backed board member through a “golden share,” and is set to be split up into six smaller firms (Fu 2023; McMorrow et al. 2023a; Leahy et al. 2023b). In doing this, Xi Jinping may have believed he had finally struck the right balance in the dual mandate dilemma. On the one hand, he was actively supporting the party’s grassroots through tackling the urban-rural divide via mass state intervention. As a compromise to the capitalists, he would also allow the party’s allies in private industry to be able to continue to grow and prosper in so far as they did so in a socially beneficial way. A critical line in Xi’s August 2021 speech exemplifies this point. “We should encourage part of the population to prosper first and urge these people to guide and help the rest on their way to a better life” (Xi 2021a, 166). Xi is not disagreeing with Deng’s mantra of “let some prosper first,” but rather is delivering on the promise for rural provinces to catch-up via the iron fist of state power (Zhou 2007, 8). Unfortunately for Xi, while his initiatives may have made sound social policy, they have proven hardly economical. Despite growing demand, the government’s abolishment of for-profit tutoring for middle and elementary school students to reduce educational inequalities is projected to erase $75 billion in annual revenues for a private tutoring industry which once raked in $100 billion a year (Mitchell et al. 2021). Moreover, China’s socially driven restrictions on gaming for under-18s contributed to Tencent reporting its first ever revenue decline in the company’s nearly 25 year history. Since pre-pandemic, the ten largest Chinese tech firms have lost $300 billion in valuation while their U.S.-based counterparts have gained $5 trillion (McMorrow et al. 2023b). Although one might think these measures may only negatively impact isolated firms, they have immense ripple effects on the broader macroeconomy. Despite China’s young people being the most educated generation in the country’s history, many graduates with advanced degrees have found difficulty finding jobs in industries such as tech and education which were directly impacted by common prosperity (Yu and Leahy 2023). Currently, 16-24 year olds face an unprecedented 20.4% unemployment rate which was less than half that figure just five years earlier (Goldman Sachs 2023). Although there are undoubtedly a number of additional externalities and structural forces at play in China’s recent economic underperformance that go beyond common prosperity, it is clear that the redistributive agenda has not helped China’s competitiveness on the world stage. Instead of reducing burdensome barriers for businesses like in the 1990s, Chinese firms have experienced greater regulatory oversight from Beijing in a myriad of realms such as antitrust, data security, corporate governance, and social impact. Thus, just as how SOE liberalization under Jiang had worsened the economic condition of the party’s grassroots, policies that explicitly advanced the interests of the CCP’s traditional base of support also wound up working against the interests of entrepreneurs and capitalists. In essence, the Chinese leadership wanted firms to facilitate more balanced, equitable growth. This required the government to wield greater control over the private sector in order to bend firm behavior. In restricting business agency, however, they inadvertently hindered their global competitiveness, harming the interests of their shareholders. Xi Jinping may have succeeded in strong arming firms to support his common prosperity agenda, but in doing so he had wreaked tremendous harm on the Chinese economy, revealing the ultimate catch-22 of modern Chinese politics. In prioritizing the interests of the party’s grassroots, he had undeniably worsened the condition of the CCP’s capitalist constituency. Epilogue: Common Prosperity Tactical Retreat or U-Turn? Starting in 2022, but accelerating in 2023, a growing number of China commentators in major newspapers began to speculate on if the government had abandoned most of its common prosperity agenda (Xie 2022; Sharma 2023). Both the charges against Didi and Alibaba were eventually settled (albeit with a major financial penalty), regulations relaxed on private firms such as New Oriental, and the once hallmark “three red lines” policy against speculative real estate investment was virtually abandoned as the People’s Bank of China (PBoC) resumed its rescue plan of China’s flagging real estate sector (Chiang 2023; White et al. 2022; Hale and Leng 2022). Today, Chinese Foreign Minister Qin Gang and Premier Li Qiang are attempting to rebuild China’s damaged business reputation overseas by assuring worried investors that China is “open for business” (Landler and Bradsher 2023). Recently, as the renminbi approaches currency deflation, the PBoC even announced plans to reduce interest rates in order to pump liquidity in the Chinese economy to spur lending and business investment (Hale and Lockett 2023). Although these actions do reflect genuine attempts to revitalize China’s private sector as well as pay more attention to the interests of the business wing of the CCP, the fundamental conflict of interests between the party’s conflicting constituent groups remains unchanged. Xi himself said in his August 2021 speech that common prosperity would be a long-term project (Xi 2021a, 165). Given that many aspects associated with the initiative such as “golden shares” have remained intact, it appears unlikely to be over (McMorrow et al. 2023a). Likewise, the headache of balancing the CCP’s disparate interest groups has only become more perilous, threatening a state of policy paralysis as Zhongnanhai weighs out the benefits of a full out stimulus intervention in the economy (Hale et al. 2023). The stakes for error are immense. If China becomes too lenient on real estate developers or inequality only worsens, for example, it could lead to even more public acrimony and discontent. If it continues populist campaigns against major firms or resumes stringent regulations on developers, however, it also risks massive capital outflows or at worst the meltdown of China’s entire financial system. Given Professor Dickson’s insight on the Chinese leadership’s paranoia of popular unrest, neither option is very appealing (Dickson 2016, 11-12). Xi will likely attempt to walk the tightrope of placating both sides, but he is operating with less legroom than his predecessor, Hu Jintao, had. Ultimately, Chinese leaders are faced with many of the same problems as modern central banks. Whereas the latter have a dual mandate to ensure price stability and maximum employment, the Chinese Communist Party must respond to the interests of both their backers in big business and their traditional grassroots among the rural poor and employees of the state. Like central banks, however, attempting to achieve one of these objectives often undermines the success of the other. Some economists suggest that central bankers should pick a lane — perhaps concentrating on their initial function of managing the money supply. For political or economic viability, perhaps the CCP will be forced to do the same. Works Cited Cheng, Li. “The “New Deal”: Politics and Policies of the Hu Administration.” Journal of Asian and African Studies , vol. 38, 2003, pp. 339-42, https://journals.sagepub.com/doi/epdf/10.1177/002190960303800402 . 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By: Michael Cinque Via R. Rajesh In September of 1794, Lord Macartney returned to Britain from China; his reports of the mission disappointed British expectations that the Chinese would recognize the two empires as equals and instead exuded an impression of Chinese arrogance (Shakir, 3). He had set out to establish formal diplomatic relations between his native Britain and the Qing empire. However, upon arriving at the imperial court, the request to kowtow before the emperor and the Chinese refusal to submit to western norms of the equality of nations left the British delegation feeling humiliated. The Chinese, on their part, emerged from their meeting, further convinced that the West was lacking in cultural sophistication and that its influence in China needed to be curtailed (Shakir, 10). The West would return to the country determined to humble it and impose its definition of civilized practices onto China. Through a string of defeats starting with the First Opium War in 1839, Chinese confidence in their place in the world would be challenged as Western notions of the nation-state began to seep into China during the 19th and 20th centuries. In China’s fallen state, the Chinese identity would be re-contextualized to fit the new world that the West introduced to China. Imperial Universalism In the wake of these defeats, Chinese assumptions of their preeminence needed to be reconciled with the West’s ideas that appeared to be proven dominant through their military victories and robust economic growth. The ideas of supremacy were embedded in Chinese culture: The Chinese thought of themselves as a superior culture that adhered to the universal standards of material, aesthetical, and moral perfection (Cranmer-Byng, 68). Throughout history, China did not assert its primacy through military strength but through the durability of its cultural institutions because it believed foreigners would recognize their inherent excellence (Chang, 109). Even when China failed to defend its kingdom during the Mongol conquest, the Mongols adopted the Chinese social, political, and cultural models on their own accord. This notion of cultural dominance was united with the political right to rule under the concept of “All-under-Heaven.” Under this construction, the ruler would model his behavior on the universal standard of heaven and thus was worthy of emulation by the Chinese people. This invitation for emulation also extended to the foreign “barbarians.” Confident that China held this universal standard, Chinese elites initially resisted the Western world order because they prioritized national interests over any universal morality (Cranmer-Byng, 69). As unconvinced as the Chinese were of Western ideas when presented by diplomats, they would find more trouble refuting them when presented by arms. However, this universalism of Chinese culture was not unquestioned even before western gunboats sailed up the Pearl River Delta. In the wake of a Jin invasion in the 12th century, some scholars would ditch universalism in favor of characterizing the Han Chinese as the heirs of China (Duara, 5-6). These sentiments would lie mostly dormant until the Han majority would find itself under the rule of the ethnically Manchu Qing dynasty. Wang Fuzhi, an intellectual who oversaw the transition from the Ming to Qing, would publish vehemently anti-Manchu works that put Chinese civilization in the hands of the Han alone and call for the annihilation of the Manchu “barbarians.” Wang’s works and the writings of other scholars like Huang Zongxi and Gu Yanwu would formulate the first stirrings of a Han ethnonationalism that would manifest in points of high tension between Han and non-Han in the empire during the mid-18th century (Duara, 5-6). Despite these developments, the Qing dynasty held firm its control by resting their sovereignty on the previously mentioned universalist Chinese cultural superiority. The Crisis of Modernity Starting in the first half of the 19th century, the Opium Wars and successive Western military incursions would leave cracks in Qing control. The certainty of “All-under-heaven” was shattered and the notion of Chinese cultural exceptionalism was put into question by the repeated advances of western armies, industry, and missionaries. Desperate to hold together the Chinese identity, Chinese thinkers began to experiment with the Western idea of the nation-state. This would form into two main streams of thought: one that rejected nationalism and embraced China’s unique tradition of Confucianism and another that adopted nationalism as China’s path to salvation. K’ang Yu-Wei, a late 19th century Chinese thinker, was of the former stream; he rebuked nationalist thought, instead advocating for his “world community” theory, which posited that the states should move towards the creation of a world government that was guided by Confucian values (Palmer, 90). This theory was an effort to preserve the ancient concept of “All-under-heaven” through a philosophy of moral supremacy. K'ang emphasized that Chinese moral supremacy lay in Confucianism and particularly in his new interpretation of the teaching. He sought to “modernize” Confucianism into a “national religion” that would unite the Chinese nation state, as other national religions had in the West (Dessein, 210). The unity of the Chinese nation under the universal values of Confucianism was a step towards his world community. Conversely Sun Yat-sen, influenced by anti-Manchu intellectuals, would reject this position and instead advocated that China ought to reform itself in the style of the secular Western nation-state, defined by the Chinese ethnicity. He believed that the Chinese race was doomed to destruction should they not embrace nationalism (Chang & Gregor, 24-28). Accordingly, he saw the Manchu ruling class, even with their adoption of Chinese culture, as unacceptable and argued that imperial cosmopolitan attitudes were a threat to the Chinese identity. He believed that China’s ideas of universalism to be a relic of an age where China was unchallenged and that this universalism was not only unfit for modernity but was a road to China’s destruction. Nationalists like Sun saw the defeat of the Qing as a lesson of the hubris of Confucian universalism. To separate themselves from K'ang’s new universalist Confucian thought, the Kuomintang, Sun’s Nationalist Party, distanced itself from Confucianism and all religions that would discourage the Chinese people from putting their nation first. Despite his push against Confucianism, he did subscribe to a distinct Chinese mission to civilize the world, which is likely a holdover from Confucianian tradition. Through nationalism, China would strengthen herself and take up a special leadership role in the world to spread the virtues of Chinese culture. Moreover, he did not totally reject Confucianism, as China’s future world leadership would be based on “the foundation of [their] ancient morality” (Cranmer-Byng, 72). Sun and K'ang converge on the idea of Chinese exceptionalism that professes the ultimate end of a world order led by Chinese virtue. Thus, both movements exhibited a level of confidence in the universality of Chinese traditions (Cranmer-Byng, 73). Communist Development of Nationalism These two thinkers would influence the Chinese Communist Party’s (CCP) further development of Chinese nationalism even to the point of the CCP contradicting Marxist principles. Although Mao’s CCP rejected Confucianism and religion as a whole, K'ang’s modern version of “All-under-heaven” was adapted into the CCP’s rhetoric. In an essay written in 1949, Mao defined the goal of the CCP as the creation of “the conditions in which classes, state power and political parties will die out and mankind will enter the era of Great Harmony” (Cranmer-Byng, 75). The theory of Great Harmony found in K'ang’s Da-t’ung Shu (Book of Great Harmony) posits that harmony is achieved through human action that aligns with moral principles intrinsic to human nature; this view of morality and human nature is contrary to Marxist criticism of any natural order and emphasis on materialism. Zhou Enlai also interpreted Chinese nationalism in a manner that borrowed elements of both thinkers’ thoughts. He proclaimed “socialist patriotism is not a narrow nationalism, but a patriotism aimed to strengthen national pride under the guidance of internationalism” (Dessein, 213). Socialist patriotism, similar to Sun’s nationalism, is understood as a role to strengthen the nation; meanwhile the aim of socialist patriotism is a China that will bring about a communist but distinctly Chinese world order, resembling K'ang’s world community. Apart from the contributions of K'ang and Sun, modern Chinese nationalism is also built on the development of the “century of humiliation” narrative. This narrative frames China as a nation exploited by foreign powers and sold out by corrupt officials for a century, starting from the First Opium War in 1839 and ending with the rise of the CCP in 1949. The narrative’s inculpation of foreigners and corrupt Chinese officials is the fundamental foundation for its long-term aspiration of redeeming China. To save China from foreign subjugation, the CCP must cleanse China of embarrassment by defeating foreign imperialism and re-uniting the country To bring salvation from the wickedness of domestic corruption, the CCP must also prove itself better than previous regimes through economic, social, and cultural development (Callahan, 207). This narrative has persisted in the Chinese national consciousness since China’s defeat in the Opium Wars (Callahan, 203-204 & 208). The term “national humiliation” was coined in response to China’s submission to Japan’s twenty-one demands in 1915 and, from 1927 to 1940, the Republic of China held a day of national humiliation. This obsession with humiliation traces its roots to ancient Chinese conceptions of embarrassment and revitalization. The ancient work Liji (the Book of Rites) comments: “the humiliation of a thing is sufficient to stimulate it; the humiliation of a country is sufficient to rejuvenate it” (Callahan, 203). In the Chinese mind, embarrassment is not just something that needs to be redeemed but is itself a tool to carry out redemption. This language of rejuvenation and humiliation is also something characteristic of the more recent nationalism under Xi with his narrative of the Chinese Dream of national rejuvenation. In Xi’s thought, national rejuvenation strives for something closer to the period of supremacy of imperial China rather than the utopia found in the pages of Das Kapital . Xi was not reversing decades of CCP narratives that characterized the imperial era as backwards and feudal but was encouraging China to accept the possibility of the restoration of Chinese preeminence. With imperial Chinese supremacy as the goal, the century of humiliation fits into Xi’s theory comfortably, as it illustrates the event from which China must be redeemed. In 2012, while positioned in front of an imperial China exhibition at the National Museum of China, Xi delivered a speech that reiterated the dream of national rejuvenation. The exhibition acting as his backdrop made clear his view of communist China as the successor state of imperial China (Economy, 3). In keeping with the narrative of national humiliation, Xi’s policies have moved to prove his government can materially provide for its citizens and cast off foreign domination. The rapid economic growth over his tenure is used to validate that the CCP is a more than capable regime to govern the Chinese nation. The 19th CCP Central Committee Report contextualizes economic breakthroughs as a demonstration of the regime's relative competence in the context of Chinese history ( Full Text of Resolution on 19th CPC Central Committee Report ). However, slowing growth in recent years threatens the party’s image as a competent regime. To distract from this, Xi is shifting the nation’s focus to the second mission of national rejuvenation, casting off Western domination. On March 13th of this year, Xi declared “the unification of the motherland,” referring to Taiwan’s return, as the “essence” of national rejuvenation (Pomfret & Pottinger). Despite Taiwan being an entity of its own in all but official legal status, China interprets its separation from historically Chinese territory as a symptom of Western domination during the century of humiliation and thus as an embarrassment that necessitates correction (Cranmer-Byng, 76-77). In addition to the redemption of the century of humiliation, Xi also espouses rhetoric of Chinese exceptionalism in global leadership analogous to K'ang and Sun. Xi’s narrative of “A Community of Common Destiny” traces some of its influence to K'ang’s “World Community” in their common promotion of multilateral cooperation and resolving conflict under Chinese leadership. However, the “Community of Common Destiny” relies more on the common goal of economic development than an international appreciation of Chinese virtues. In Xi’s order, economic development according to the Chinese model replaces Chinese moral philosophy as the guiding principle of Chinese global leadership. Chinese organizations like the Asian Infrastructure Investment Bank, the BRICS New Development Bank, and the Contingency Reserve Agreement are created as a “parallel order” to Western institutions that is more in line with Chinese principles of development (Smith, 454). Furthermore, following the financial crisis of 2008 and more recently the advent of increased populism in Western democracies that manifested in the election of Donald Trump and Brexit, the current Western international order is as illegitimate and inferior in the eyes of current Chinese party bosses as it was in the eyes of the elites of imperial China (Smith, 455). Accordingly, Xi recognizes that China can offer distinctive contributions to global governance that liberalism is failing to provide. His report to the 19th Party Congress outlined that “China will continue to play its part as a major and responsible country, take an active part in reforming and developing the global governance system, and keep contributing Chinese wisdom and strength to global governance” (2008). Conclusion The story of the development of Chinese nationalism recounts the scramble to understand the essence of Chinese civilization and adapt it into a nation-state that can secure Chinese interests in the modern world. In the wake of the turbulence of the 19th and 20th centuries, Chinese thinkers have devised theories of the Chinese nation that maintained the idea of Chinese exceptionalism in the realities of modernity. Today, Xi’s China draws upon this nearly 200 year-long development to formulate a narrative of past humiliation, present development, and future glory. The goal of his China is not to return to the China of the Macartney mission, arrogant and isolated from the world, but one that will truly be strong and able to fashion a more Chinese world. Works Cited Callahan, William A. “National Insecurities: Humiliation, Salvation, and Chinese Nationalism.” Alternatives: Global, Local, Political, vol. 29, no. 2, 2004, pp. 199–218. JSTOR, http://www.jstor.org/stable/40645112 . Accessed 31 Mar. 2023. ​ Chang, Pao-min. “Chinese Perspectives On Nation, State And The World.” World Affairs: The Journal of International Issues, vol. 5, no. 1, 2001, pp. 102–22. JSTOR, http://www.jstor.org/stable/45064823 . Accessed 31 Mar. 2023. ​ Cranmer-Byng, John. “The Chinese View of Their Place in the World: An Historical Perspective.” The China Quarterly, no. 53, 1973, pp. 67–79. JSTOR, http://www.jstor.org/stable/652507 . 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Accessed 31 Mar. 2023. ​ Palmer, Norman D. “Makers of Modern China: I. The Reformer: Kang Yu-Wei.” Current History, vol. 15, no. 84, 1948, pp. 88–104. JSTOR, http://www.jstor.org/stable/45307384 . Accessed 31 Mar. 2023. ​ Pottinger, Matt and John Pomfret. “Xi Jinping Says He Is Preparing China for War: The World Should Take Him Seriously.” Foreign Affairs, 30 Mar. 2023, www.foreignaffairs.com/united-states/xi-jinping-says-he-preparing-china-war . Shakir, Sana. “Confucianism And The Macartney Mission: Dispelling The Myth Of Chinese Arrogance.” Emory College, 2008, history.emory.edu/home/documents/endeavors/volume2/SanaShakir.pdf . ​ Smith, Stephen N. “Community of Common Destiny: China’s ‘New Assertiveness’ and the Changing Asian Order.” International Journal, vol. 73, no. 3, 2018, pp. 449–63. JSTOR, https://www.jstor.org/stable/26499706 . Accessed 31 Mar. 2023. ​ Xi, Jinping. 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By: Julian Anderson Can war between the U.S. and China over Taiwan be averted? U.S. policymakers must make hard choices between competing policies that may lead to peace or catastrophic conflict. via TFI Global Danger to World Peace Given the escalating conflict in Ukraine, it is understandable if concerns about stability in the Taiwan Strait have taken a backseat. However, there are many similarities between the ongoing war in Ukraine and the potential for war between the U.S. and China over the Republic of China (ROC) — widely known as Taiwan — that deserve close attention. In both China-Taiwan relations and Ukraine-Russia relations, a larger, more powerful state claims territorial sovereignty over a smaller and weaker one. There is great complexity in the differences between U.S. policy towards Ukraine and Taiwan, especially after the invasion of Ukraine, but at a minimum the U.S. has supported the autonomy of both Ukraine and Taiwan through arms sales. Additionally, both situations involve unresolved historical issues between two groups of peoples with close cultural and economic ties. If the war in Ukraine is any indication, U.S.-China relations over Taiwan could be a powder keg. As China emerges as a great power with the military and economic capability to rival the U.S., how will Taiwan factor into foreign policy? Can the U.S. preserve peace with China while maintaining its current commitment to Taiwan? It is within this context that American experts and scholars on U.S.-China relations propose three potential policy options: strategic ambiguity, strategic clarity, and limited accommodation. Let’s examine each of them with a critical lens to understand which of them, if any, hold the key to peace in the Taiwan Strait. Strategic Ambiguity Strategic ambiguity has constituted the status quo policy towards China on Taiwan for decades. There are two foundations of strategic ambiguity : dual deterrence and the “one-China” policy. Dual deterrence reflects the need to prevent both China and Taiwan from unilaterally changing the status quo. If China were to take steps to invade Taiwan, the U.S. may intervene. Similarly, if Taiwan were to move towards a formal declaration of independence, the U.S. could threaten to abandon support for Taiwan and force it to reconsider. While dual deterrence relies on the importance of U.S. intervention to preserve peace, the one-China policy dictates the shape of the tripartite relationship. Passed by Congress in 1979, the Taiwan Relations Act determines what kind of relations the U.S. can have with Taiwan. It stipulates that the U.S. maintain informal political and economic relations with Taiwan and directs the president to take actions to defend the island’s autonomy. Meanwhile, the U.S. recognized the PRC as the sole legitimate government of China, formalizing full diplomatic relations. Finally, the one-China policy states that Taiwan is an autonomous, self-ruled entity without sovereign status. Thus, the policy functions as a compromise that neither party wants but both must live with. Taiwan has autonomy but not sovereignty, and China has full diplomatic recognition but not full reunification. Benefits Advocates of strategic ambiguity argue that the historical success of the policy speaks for itself. Dual deterrence was essential in resolving all three Taiwan Strait crises, but especially the third. The Third Taiwan Strait Crisis kicked off when the Clinton Administration in 1995, at the behest of Congress, issued a visa to allow Taiwan’s President Lee Teng-hui (1988-2000) to visit the U.S. Infuriated by this perceived slight to China, the PRC began conducting missile tests and live military exercises in the Taiwan Strait. These tests were aimed at disincentivizing Taiwanese people from electing Lee Teng-hui that election year. The Clinton administration responded by deploying two aircraft carrier battle groups, causing China to back down. Thus, America’s strong willingness to intervene and deter provocative intimidation tactics were successful at maintaining stability. Conversely, when Taiwanese President Chen Shui-bian (2002-2008) seemed to be moving towards formal independence, the Bush administration publicly reprimanded him. In a 2003 meeting with Chinese Prime Minister Wen Jiabao, President George W. Bush issued a statement that “the comments and actions made by the leader of Taiwan indicate that he may be willing to make decisions unilaterally, to change the status quo, which we oppose”. Supporters assert that, while not ideal, strategic ambiguity preserves a fragile peace and secures U.S. interests in the region. Risks Nevertheless, contenders argue that while strategic ambiguity has worked in the past, the Taiwan Strait situation is evolving such that the foundations of the policy may crumble. For deterrence to work, it must maintain a credible threat to win a conflict, or at least make it too costly for Chinese leaders to bear. Given the shifting balance of power, China is likely to question U.S. resolve or readiness to intervene militarily in the future. This is exacerbated by the fact that, compared to formal defense treaties it has with Japan and South Korea, the U.S. has no obligation to defend Taiwan. Moreover, deterrence through imposing costs assumes that Chinese leaders act rationally and perceive the situation clearly. If the U.S. underestimates the willingness of Chinese leaders to seize Taiwan, then war may occur. Even without nationalism or domestic troubles clouding judgment, escalating tensions can create a fog of war which prompts states to strike first . Strategic ambiguity’s second foundation may already be eroding. Political data shows Taiwan’s population is developing an identity separate from the mainland. An annual survey by the National Chengchi University shows that the percentage of Taiwanese respondents identifying as only Taiwanese grew from 20% in 1992 to 64.3% in 2020. Meanwhile, the percentage of Taiwanese respondents identifying as both Chinese and Taiwanese dropped from 46.4% in 1992 to 29.9% in 2020. This coalescing independent identity apart from the mainland played a role in the election and reelection of Taiwanese President Tsai Ing-wen in 2016 and 2020, a member of the pro-independence Democratic Progressive Party (DPP). As a candidate aligned with the DPP, a key part of her platform includes potent opposition to the idea of one-China. In a January 2019 speech responding to Chinese President Xi Jinping, President Tsai stated that “we have never accepted the ‘1992 Consensus.’...I want to reiterate that Taiwan absolutely will not accept ‘one country, two systems.’ The vast majority of public opinion in Taiwan is also resolutely opposed…and this opposition is also a ‘Taiwan consensus.’” The 1992 Consensus is the foundation of the one-China principle. It holds that while both governments agree there is one China, they disagree on which one – the PRC or the ROC — is the legitimate government over all of China. By adhering to the 1992 Consensus, diplomatic space was opened for semi-official cross-strait exchanges. It was China’s basic precondition for dialogue between the PRC and the ROC. President Tsai’s explicit rejection of the 1992 Consensus has therefore played a key role in souring relations and a major instigator for the PRC’s intimidation tactics towards Taiwan. Meanwhile, Taiwan’s more pro-China KMT party could make a comeback, but the race ahead of the January 2024 presidential election is just beginning . Regardless of the outcome, time is likely to only strengthen the trend of Taiwanese people identifying with a uniquely Taiwanese identity. That by itself may be perceived as a threat to the CCP’s firm belief in reunification. Via National Chengchi University Election Study Center, 2020 The PRC’s current acceptance of the current compromise rests on the possibility of peaceful reunification at some point in the future. Chinese leaders view the use of force as a last resort only as long as peaceful alternatives remain. If they become increasingly pessimistic about the prospect of peaceful reunification, they may believe an invasion of Taiwan is necessary despite the risks. Thus, worrying trends have opponents arguing that strategic ambiguity lies on shaky ground. Proponents of strategic ambiguity push back on these claims, arguing that worries about the changing balance of power and political developments in Taiwan are unfounded. The balance of power may be shifting, but it is changing slowly. The U.S. can continue to impose costs on both China and Taiwan if they were to unilaterally change the status quo arrangements. Thus, they contend that policy change for the foreseeable future is unnecessary and more risky than attempting to uphold the current compromise. Strategic Clarity Some opponents of strategic ambiguity believe that strategic clarity is the solution to the status quo’s policy woes. According to experts like Richard Haass and David Sacks, the U.S. should clarify that it will defend Taiwan from China. This would give Taiwan a formal defense commitment from the U.S. Compared to strategic ambiguity, which lacks a firm commitment, the deterrence signal from strategic clarity is far stronger. In addition to an unambiguous policy of defending Taiwan, strategic clarity may also call for enhanced arms sales to Taiwan and revisions to Taiwan’s military structure and reservist system to improve readiness. Benefits Advocates of this policy assume that the most likely scenario for conflict is a lack of credibility that the U.S. will defend Taiwan. In this scenario, Chinese leaders question American resolve, believing that when push comes to shove, the U.S. will not sacrifice Los Angeles for Taipei. Aware that the window for reunification is closing, President Xi may decide an invasion now will tip over an already unsteady opponent. Adherents fear that strategic ambiguity opens the door for such thinking by Chinese leaders, which increases the likelihood of military conflict. After the invasion of Ukraine, more foreign policy experts in Washington D.C. have adopted this view. They point to Putin’s invasion of Ukraine to show America’s ambiguous commitment to Ukraine in the vague Budapest Memorandum and promise of admitting Ukraine into NATO later – but not now – is exactly what caused the war. If the U.S. had integrated Ukraine into NATO in 2007, the argument follows, Putin’s invasion would not have occurred, and the same may be true for Taiwan. If implemented, an unconditional assurance that the U.S. will come to Taiwan’s aid may also strengthen its people’s will to fight. Deterrence strategies involve imposing costs that the adversary is not willing to bear. By improving Taiwan’s military morale, the likelihood of a successful Chinese invasion is reduced. This makes it less likely that Chinese leaders will attempt such an operation. Risks One problem is that strategic clarity risks undermining the one-China policy. As a key pillar of strategic ambiguity, the one-China policy assures China that the U.S. and Taiwan will not cross any red lines it deems a casus belli — a reason for war. This assurance reduces the likelihood that China sees a reason to strike. Credible threats must be paired with credible assurances, otherwise deterrence will fail. China has made it clear it views any move by Taiwan towards formal independence as intolerable. An official commitment to defend Taiwan would give China good reason to question the credibility of America’s assurances of neutrality. There is every indication Chinese leaders would view strategic clarity as a hostile act. At a November 2022 Summit in Bali, Indonesia between President Xi and U.S. President Joe Biden, Xi is reported to have said that “the Taiwan question is at the very core of China's core interests, the bedrock of the political foundation of China-U.S. relations, and the first red line that must not be crossed in China-U.S. relations.” This is not bluster: U.S. support for Taiwanese independence is the reddest of all red lines for the CCP. Furthermore, actions by the U.S. to strengthen higher level cultural, economic, and diplomatic engagement with Taiwan have riled Chinese officials and confirmed fears that the U.S. will do exactly that. A high-profile visit to Taiwan by Speaker Pelosi in August 2022 has only exacerbated those fears. In many ways, China relies on the U.S. to help keep the Taiwan Strait stable. In the past, when Taiwan has elected pro-independence leaders, China has signaled to the U.S. to rein in Taiwan. This arrangement where both sides are kept in check has maintained a fragile peace for decades. Announcing a formal commitment to defend Taiwan would be a dramatic shift in policy, upending this stable balance of relations. China has good reason to be concerned about an announcement of unconditional support for Taiwan. A November 2020 survey done shows that support for Taiwanese independence among the Taiwanese people will likely go up as a result. Variation in U.S. Support and Taiwanese Respondents’ Willingness to Fight Via War on the Rocks. Johnston, Chia-Hung, Yin, & Goldstein 2021 Even if strategic clarity is successful at deterring China in the short term, the shifting balance of power could threaten the credibility of future deterrence. An antagonistic relationship over Taiwan has motivated China to build up its military strength such that the U.S. has no chance of competing. In this way, strategic clarity may hasten military modernization and great power competition by cutting off pathways to peaceful reunification. Limited Accommodation In response to the risk of worsening relations over Taiwan spiraling into conflict, some experts including Charles Glaser have recommended a policy of limited accommodation. According to this policy, the U.S. would offer to end its commitment to defend Taiwan — if and only if China peacefully resolves its maritime disputes in the South and East China Seas and officially accepts the United States’ long-term military security role in East Asia. Limited accommodation seeks to solve a very different problem than strategic clarity. Whereas strategic clarity sees the problem with the current policy as a failure of deterrence, limited accommodation envisions the problem as a security dilemma. A security dilemma is “a situation in which actions taken by a state to increase its own security causes reactions from other states.” Thus, the greatest threat to world peace isn’t Chinese aggression. Instead, the most likely scenario is that China, driven by suspicions of U.S. containment, enters into protracted great power competition with the U.S. In this scenario, even a small accident would very likely get out of control. The solution must then be to reduce tensions and Chinese suspicions by showing willingness to accommodate China’s core security interests. Benefits First, limited accommodation would reduce the risk of great power war over Taiwan. Taiwan may be forced to acquiesce to Chinese control without a fight. Second, the policy would reinvigorate U.S.-China relations since the agreement would quell Chinese suspicions of a U.S. containment or encirclement strategy. Also, China’s peaceful resolution of its maritime disputes would demonstrate that the nation seeks to be a responsible great power and rejects regional hegemony. Finally, broader military competition becomes less likely, because much of China’s military modernization is aimed at creating the conditions for a successful invasion of Taiwan. Risks If China’s regional goals for dominance are beyond Taiwan, then accommodating China’s territorial aims will only embolden further expansion. Additionally, China would then be more likely to renegotiate its maritime disputes after Chinese control over Taiwan is consolidated. With Washington having no enforcement mechanism to hold Beijing to its word, backtracking on the deal is very possible. Such fears are part of why there is no political will in the U.S. for this kind of an arrangement. Double the political resistance towards this strategy for Taiwan, where there is little interest in reunification. In the eyes of many Taiwanese, China’s “one country, two systems” model has already been proven a farce by its dealings with Hong Kong. Moreover, sacrificing Taiwan as part of this deal could be interpreted as a Faustian bargain in direct violation of the democratic principle of self determination, whereby free people should decide for themselves how they are governed. Taiwan would not be the only thing sacrificed, but core American values as well. America’s image as a shining city on a hill standing for democracy and liberty would be deeply tarnished across the world. However, the greatest risk would be to America’s alliances with Japan and South Korea. They may question the United States’ willingness to come to their defense and decide they must nuclearize to defend themselves. Bilateral consultations and continued joint defense exercises could help strengthen alliance credibility, mitigating the risks of limited accommodation. Nevertheless, the reliability of U.S. commitment and resolve in East Asia will suffer. Where We Go From Here The diverse set of policy recommendations presented shows both the depth of the debate and the enormity of the stakes. Each policy has tradeoffs. Strategic ambiguity emphasizes weak compromise over lasting resolution. Strategic clarity upholds deterrence at the expense of assurance and positive relations, which may be necessary for cooperation over global issues like climate change. Finally, limited accommodation advocates peaceful resolution and positive relations to the detriment of deterrence, credibility, and democratic values. Each represents a different vision of the likeliest scenario for conflict that must be managed cautiously and attentively. Critically, the direction of U.S.-China relations depends not just on the U.S., but China as well. While the U.S. is at a crossroads, China may soon face a similar fork in the road. From Beijing’s perspective, Washington has been meddling in Chinese internal affairs since 1949. However, China has been invaded by foreign powers since at least a century before that during the First and Second Opium Wars (1839-1860). During this period, the weakness of China’s Qing Dynasty allowed Britain, Japan, and other imperial powers to impose their will on China, forcing them to open their markets to extremely addictive opium products. The lessons the CCP has taken from this so-called “ century of humiliation ” is that China will be ruthlessly exploited and divided unless it is militarily and economically strong enough to secure its sovereignty and territorial integrity. They believe that the West continues to this day to exploit China’s territorial division by protecting Taiwan, and therefore see their actions to reunify with Taiwan as just and righteous. From their perspective, China’s rise to great power status has been faced with increasing hostility and anti-Chinese sentiment from the West rather than peaceful relations. In that sense, they see the U.S. as the provocateur responsible for deteriorating relations. From this perspective, the U.S. sending a congressional delegation to Taiwan to meet with President Tsai Ing-wen in April 2022, and Pelosi’s trip to Taiwan in August 2022, are just the latest signs of the United States’ belligerence. China may not want war, but if their core national interest requires it and they have exhausted all avenues for peaceful settlement, then the CCP sees itself as having no choice. Washington’s reliance on deterrence during the three Taiwan Strait crises may have convinced President Xi Jinping that the only thing the U.S. responds to is force. The perceptions of great powers can be a canary in the coal mine, warning us of where the relationship is headed. 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By: Edward Kemelmakher Overview Found between the South China Sea and the Indian Ocean, Malaysia occupies territory that is strategically important for the success of the Belt and Road Initiative (BRI). Enticed by the opportunity to add the vital Straits of Malacca to the maritime routes of the BRI, China has worked with the Malaysian government on $150 billion in projects since launching in 2013. China has used its resources to buy stakes in Malaysian companies, construct deep-sea ports, and finance large-scale railroad lines. Yet, China’s investments in Malaysia have not come without scandal — it is alleged that the government of former Prime Minister Razak used Chinese investments to cover up the embezzlement of billions from Malaysia’s sovereign wealth fund “1MDB”. This report will detail specific BRI projects financed by China in Malaysia as well as discuss the implications of those projects on the Malaysian economy, people, and government. A Brief History of Sino-Malaysian Relations In 1974, Malaysia became the first ASEAN member to formally recognize the People’s Republic of China. From then onwards, bilateral relations between the two countries steadily grew. By 2009, China had become Malaysia’s largest trading partner with nearly $38 billion in bilateral trade that year. Over the last decade, however, China has expanded from trading with Malaysia to investing in the country heavily with major infrastructure projects through the BRI. In November 2016, then-Malaysian Prime Minister Najib Razak returned from China with $31 billion in Chinese investment into Malaysian infrastructure.
Despite this, a number of Malaysians began to worry about the increasing influence of China over Malaysia’s sovereignty. By 2018, this worry had culminated in a crushing defeat for PM Razak in a national election — the first time Najib’s party, Barisan Nasional (BN), had been defeated since Malaysia’s independence 61 years prior. Razak’s successor, Mahathir Mohammad, quickly discontinued a number of BRI projects worth hundreds of millions and warned against a “new version of colonialism” – referring to BRI projects in Malaysia. Worse, PM Mahathir’s government lays out several charges against ex-PM Najib, concerning embezzlement from BRI projects and the 1MDB sovereign wealth fund. This scandal will be covered in depth in a further section of this report. By 2019 however, after a year of financial renegotiations, relations seemed to be back on track. 2019 saw a resumption of key BRI projects, as well as an endorsement by PM Mahathir of both the BRI and Chinese corporate investment in Malaysia during a state visit to Beijing. Key BRI Infrastructure Projects The East Coast Rail Link (ECRL) On October 21, 2016, then-Malaysian prime minister Najib announced plans for a railroad line that would connect the more-developed western states of Peninsular Malaysia to the relatively less-developed eastern states. The railroad was to have 23 stations, high-speed trains traveling at 200 km/h and cut travel time across Malaysia by 4-5 hours. The Malaysian government hoped that the project would “bridge a development gap between the east and west coastal regions of Malaysia”, and be “beneficial to the country and the people”.
By November 1st, 2016, the Malaysian government had signed a “framework finance deal and construction agreement” valued at $13.1 billion with the China Construction Communications Company (CCCC) as the builder of the ECRL. Crucially, the agreement requires that only 30% of the workforce on the ECRL has to come from Malaysia. Despite owning and operating the rail link, the Malaysian government sought private funding for a large portion of the ECRL. 15% of the project funding would be covered by the Malaysian government. The rest of the funding would come as a loan from China’s EXIM Bank at a low-interest rate.
By 2018 however, the new Malaysian government had canceled the ECRL project due to financial disagreements. It took a further year of negotiations for a breakthrough to take place. In April 2019, the two governments announced that the cost of the project would be reduced by $5.4 billion with a slightly different route. The ECRL is expected to be complete by December 2026, at which point it will be the largest railway in Southeast Asia. Additionally, the rail line is estimated to carry nearly 6 million passengers and 53 million tonnes of cargo by 2030. Finally, it is projected that the ECRL will create 80,000 Malaysian jobs, and boost economic growth by nearly 3% . Bandar Malaysia and the 1MDB Scandal In July 2009, then-Prime minister and finance minister Najib launched the 1Malaysia Development Berhad (1MDB), a state fund that would be used to drive new development in Malaysia.
In total, 1MDB had raised $8 billion in bonds so that it could develop various infrastructure projects in Malaysia. As debts piled up and became unmanageable, the Malaysian government began secretly repaying 1MDB’s debt in 2014. However, by January 2015, 1MDB had missed a $550 million repayment of its bonds sparking an investigation by the U.S. and Malaysian governments.
Reports began to emerge that PM Najib had received $681 million in money siphoned off from 1MDB. By May 2018, with the election of PM Mahathir, now former PM Najib was banned from leaving the country. Worse, Malaysian police raided a number of properties linked to Mr. Najib, seizing $275 million in luxury goods and another $30 million in cash. Bandar Malaysia — a transport-oriented development hub in Kuala Lumpur valued at over $34 billion — was one of the many projects owned by 1MDB. The project was meant to become the world’s largest underground city – with an indoor theme park, shopping malls, residential buildings, a financial center, and a railway hub connecting all of Southeast Asia. Prior to December 2015, the project was owned by the Malaysian government, specifically 1MDB. 1MDB then sold 60 percent of its shares in Bandar Malaysia to a Chinese consortium. Unfortunately, in May 2017, the Malaysian government had to terminate the project over payment disputes with the Chinese consortium. Despite numerous attempts to revive the deal, Kuala Lumpur announced that the deal had officially fallen through in July 2021. Currently, the Malaysian government is working on finding a number of developers from different companies to work on Bandar Malaysia together in hopes to ensure that no one country or company dominates the project again. The Second BRI Forum In April 2019, Prime Minister Mahathir Mohamad visited Beijing to take part in the Second Belt and Road Initiative Forum. While there, Mahathir met with Chinese President Xi Jinping and re-announced his support for the BRI. Mahathir’s reversal on the BRI came as China agreed to buy nearly $150 million worth of palm oil from Malaysia in return for greater BRI cooperation.
Observers of the deal believed Beijing’s agreement to purchase palm oil was necessary for reviving BRI projects in Malaysia. Previously, when the Mahathir government had announced its intention to end projects like the ECRL and Bandar Malaysia, the CCP heavily hinted at significant reductions in both Chinese palm oil purchases and Chinese tourists.
The BRI forum has led to the possibility of revival for a number of canceled projects including: Forest City : a city-building project valued at $100 billion, located in the jungle of Johor Province near the Singapore border. The project was canceled in 2018 after criticism from PM Mahathir that the city was being built for wealthy Chinese nationals. Various Pipeline Projects : The Multi-Product Pipeline (MPP) and the Trans-Sabah Gas Pipeline (TGSP), valued at $2.3 billion, are two pipelines originally planned to crisscross Malaysia. The pipelines are alleged to be part of the 1MDB scandal, with the Malaysian government seizing $234 million in payments from the Chinese company contracted to build the pipeline and recouping another $2 billion from China. Malacca Gateway : Costing up to $10 billion, the Malacca Gateway was a planned deep-sea port in the Strait of Malacca initiated in 2016 by the Malaysian and Chinese governments. The project was terminated in November 2020 amid revelations that the country’s eight major ports can cover shipping demand until 2040 – rendering the Malacca gateway nearly useless. Worse, there have been persistent rumors that China had planned to use the deep-sea port for military purposes. Despite these claims, as of March 2022, the project has been reinstated and negotiations with Chinese companies are ongoing. Kuantan Port : With a $2 billion investment into a deep-sea terminal port on Malaysia’s east coast, the Malaysian government hopes to boost Malaysia’s east coast economy and compete with Singapore over port and shipping traffic. Implications of the Belt and Road in Malaysia:
1. Economic Outcomes Malaysia is a top 10 BRI recipient country and its projects are the widest in scope and financial scale of any BRI projects across Southeast Asia. Trade with China has continued to rise during Malaysia’s involvement with the BRI. In fact, Sino-Malaysian trade has reached record highs year after year over the last decade.
Yet despite the more than $100 billion in Chinese investment deals, the BRI has failed to make any significant changes to Malaysia’s economy. However, this is not entirely China’s fault. As numerous expert reports explain , the primary reason the BRI has failed in Malaysia is due to widespread corruption. Much of the money invested by China has been embezzled or squandered . Yet, the FDD makes it clear that while Malaysia’s kleptocracy was homegrown, it was facilitated in part by China through the BRI. Chinese state-owned enterprises (SOEs) invested significant capital in the 1MDB fund to keep it afloat. Worse, senior Malaysian officials claimed China even received lucrative contracts for BRI projects in exchange for helping to mitigate the 1MDB scandal.
Additionally, political changes in Malaysia have led to long-term pauses on a number of construction projects that would have already been completed otherwise.
Thus, while Chinese goods and FDI have been flowing into Malaysia, the economic impact of BRI projects is inconclusive. Thus far, only three BRI projects in Malaysia — collectively valued at just $1.56 billion — have been completed. Only time will tell if the BRI will have a positive impact on the Malaysian economy. 2. Public Response Quantitative surveys of the Malaysian public done by the Asia Foundation reveal nuanced and mixed perceptions of the BRI projects being undertaken in Malaysia. Malaysian citizens believe that the BRI is creating positive change — specifically by creating jobs and stimulating the local Malaysian economy. Moreover, Malaysian locals surveyed by the Asia Foundation “hope that the [BRI] will play a greater and more socially active role in assisting the needy and providing badly needed employment.” That being said, there are a number of criticisms of the BRI. First, the same Asia Foundation study finds that BRI projects involve powerful federal and state decision-makers without actively engaging local representatives. Many local Malays believe that their perspectives should be considered before approving Chinese investments. Second, a number of BRI projects in Malaysia have been plagued by scandal – lacking transparency, causing environmental degradation, and consistently costing the Malaysian government far more than they are worth. Indeed, the criticisms from local Malays have already led to a change in Chinese investment. Recent years have seen a shift from the large “mega-projects” discussed above towards smaller-scale humanitarian projects such as hospital construction.
3. Political Change As discussed in previous sections, investment from the Peoples' Republic of China (PRC) has been a significant voting issue in past Malaysian elections. In Malaysia’s 2018 general election, the issue of China’s influence boiled over. Prime Minister Najib Razak was voted out of office, and his party Barisan Nasional (BN) lost power for the first time in 61 years.
Malaysian politics have yet to recover from this shift in power. PM Mahathir, Razak’s replacement, resigned unexpectedly after just seventeen months in power because of infighting within his party. Successive governments have been equally short-lived , with two prime ministers resigning in under two years. Worse, the 2022 general election did little to solve Malaysia’s problems as the country elected a hung parliament , continuing its four-year political crisis. Ultimately, China’s involvement in the 1MDB crisis as well as its increasing influence within the Malaysian economy have been important drivers of the Malaysian political crisis.
Luckily for China, Malaysia’s newest PM, Anwar Ibrahim, has described ties with China as “pivotal”, and seems likely to enhance ties with Beijing. It is not yet clear whether PM Anwar will create a more steady political climate in Malaysia, but thus far China seems to have had significant negative effects on Malaysian politics.

By: Edward Kemelmakher Overview Known as China’s “ Gateway to Europe ”, Greece is vital to China’s expansion of the Belt and Road Initiative (BRI). Since the BRI was first announced in 2013, the Port of Piraeus has been designated by China as one of the BRI’s key projects in Europe. Specifically, China intends to shorten travel times for Chinese goods by expanding Greek port infrastructure and then connecting those ports to key European cities. To date, the majority of Chinese investment projects have targeted specific sectors of the Greek economy — transportation, energy, and telecommunications infrastructure. Indeed, the vast majority of China’s investments were in companies previously owned by the Greek government. The Sino-Greek relationship has been characterized by a large number of official state visits in recent years, which have culminated in signed agreements and memorandums of understanding (MOU) covering economic, cultural, scientific, and trade cooperation agreements.
In the last five years, Greece has also become increasingly involved in Chinese institutions. In August 2018, Greece officially joined the BRI. In April 2019, Greece became a member of the Cooperation between China and Central and Eastern European Countries (also known as 17+1). Finally, in August 2019, Greece joined the Asian Infrastructure Investment Bank. China is investing heavily in Greece, with over $3.0 billion in investment projects since Greece joined the BRI. Despite heavy investment, Sino-Greek trade is quite moderate albeit with a high growth rate. In 2021, trade between the two countries stood at $12.1 billion , an increase of 55.6% from 2020. This report will detail specific BRI projects financed by China in Greece as well as discuss the implications of those projects on the Greek economy, people, and government. A Timeline of the Greek Financial Crisis and Chinese Investment Before discussing individual Chinese investment projects, it’s important to first understand the Greek economic climate that allowed for significant increases in Chinese investment. In 2009 amidst the global financial crisis, Greek Prime Minister George Papandreou announced that Greece’s budget deficit would exceed 12% of GDP. In other words, the Greek government was spending 12% more than it earned — four times more than it was allowed to spend by the European Union. Already facing questions over whether or not it could pay back its existing debts, the Greek government's problems were compounded when global credit agencies downgraded Greek sovereign debt. What followed were three successive bailouts of the Greek government by the European Union and the IMF; these bailouts totaled over $375 billion . One of the key conditions instituted by the EU and IMF as part of their bailouts was a massive privatization program. The third bailout signed in 2015 obliged the Greek government to sell a number of state-owned enterprises in order to boost economic growth and reduce budget deficits.
Directly after the third bailout agreement was signed, China ramped up its involvement in the Greek economy. In August 2016, a Chinese state-owned enterprise (SOE) paid €280.5m for 51% of the shares of the Piraeus Port Authority (PPA). In June 2017, a separate Chinese conglomerate spent €320 million for the purchase of a 24% stake in Greece’s Independent Power Transmission Operator. These deals, which will be discussed in detail later in this report, were just the beginning of billions in Chinese investment intended to acquire majority stakes in a number of formerly nationalized Greek companies. Key BRI Infrastructure Projects: The Port of Piraeus Located in the southeast of Greece, the Port of Piraeus is the main port of Athens. Piraeus is not only the largest port in Greece , but it is also one of the largest passenger and container ports in the world. For decades, Piraeus was a port of significant value, but by the early 2000s, it had fallen into decline. Hastened by the 2008 financial crisis and Greece’s subsequent debt crisis, the Greek Government decided to launch an international tender inviting companies to upgrade and run commercial facilities at Piraeus.
In June 2008, the China Ocean Shipping Company (COSCO) was announced as the winner of the tender to operate the Port of Piraeus’s container facilities for 35 years in exchange for $5.9 billion in payment to the Greek government.
COSCO sought to revitalize the port, starting repairs on existing piers and beginning construction on a third pier to expand port capacity — investments worth over €230 million. COSCO quickly improved port traffic, which encouraged China to increase port ownership in Europe. In August 2016, COSCO paid €280.5 million for 51% of the shares of the Piraeus Port Authority (PPA) giving them majority ownership. Crucially, from 2016 onwards, China has viewed its business in Piraeus as a model for future European investment. COSCO publicly focused on labor and environmental guidelines and has ensured that Piraeus employees remain Greek. In fact, only eight Chinese employees have been appointed in the PPA while all 1,087 Greek employees have kept their jobs.
Following the 2016 takeover of Piraeus, COSCO embarked on a multi-million investment project to turn the port into a hub for cruise ships, turning it into the center of nearly all cruise activity in the Mediterranean. Indeed, the PRC embassy in Athens has claimed that COSCO intends to invest over $1 billion more in Piraeus infrastructure in the next few years.
In October 2021, China’s acquisition of the port continued, with COSCO acquiring an additional 16% ownership stake in the Piraeus port. This increased acquisition has led to additional investments in Piraeus, with COSCO pledging a further $300 million in construction.
Ultimately, China’s investments in Piraeus are key to the BRI. Through Piraeus, China gains access to Central Europe and shortens the delivery time between China and Europe by 10 days.
Greece’s Independent Power Transmission Operator (IPTO) In June 2017, China’s State Grid, the world's largest utility company, purchased a 24% stake in Greece’s national power operator for $330 million . Not only did Chinese banks offer to lend money to IPTO at half the rates of European lenders, but IPTO also secured the know-how for its most technologically complex project yet — adding Greek islands to its power grid. Over two decades ago, Greece began building a complex underwater power transmission network across the Aegean Sea in the hopes of providing power to its islands. Greece’s island chains — key to the Greek tourism industry — account for just over 25% of GDP . Powering Greece’s islands is therefore vital to growing tourism in the country. Despite the importance of such a project, it wasn’t until State Grid got involved that true progress began. Greece’s IPTO is now rolling out more than 300 kilometers of cable at depths of up to 550 meters, linking dozens of islands. China’s involvement with the Greek power sector doesn’t stop there. A growing number of Chinese companies have begun to invest in renewable energy in Greece. Chinese conglomerate Sky Solar Holdings has invested tens of millions in building solar parks throughout Greece. Moreover, Shenhua Renewables has signed deals worth over $3 billion to build and operate wind parks in southern Greece. ​ Athens Airport Hellenikon Chinese companies have also been at the center of a massive development project — rebuilding Athens Hellenikon Airport. In 2014, Chinese company Fosun International won a public tender for a €7 billion project to develop Athens’ former airport at Hellenikon.
Hellenikon Airport, formerly Greece’s largest airport, had been abandoned in 2001 and converted into a resort complex in preparation for the 2004 Olympic games. Years of neglect followed as disagreements over the redevelopment of the airport plagued the Greek government. Fosun claimed that the complex it wanted to build there, known as the Hellenikon, will revitalize the Athenian economy. They believed that Hellenikon would attract a million tourists a year and create 10,000 jobs in the construction phase, plus 75,000 when it was fully operating.
Despite the profits Fosun stood to make from the redevelopment of Hellenikon, the firm announced in 2019 that it had withdrawn from the project due to years of delays resulting from bureaucratic red tape and the country's economic crisis.
Implications of the Belt and Road in Greece 1. Economic Outcomes Economists tend to agree that upgrading Piraeus and its connection to the BRI’s European Southeast Corridor remains essential for the future of the Greek economy. COSCO’s investments in Piraeus have been key to turning the port into a logistical hub and improving Sino-Greek economic cooperation. Indeed, China has invested so heavily in Greece that Chinese investment is already approaching 18% of Greece’s GDP . Crucially, expansion at the port of Piraeus has aided in Sino-Greek trade. China has become Greece’s third-largest trading partner and its largest trading partner outside of the EU. From an economic perspective, BRI investment has been quite positive, creating tens of thousands of jobs, increasing trade, and helping Greece to recover from its financial crisis.
2. Public Response Reactions to Chinese involvement with the port of Piraeus have been mixed. Athenian locals living near the port of Piraeus have had a rather negative reaction to Chinese investment. For years, locals have led a movement known as No Port in Piraeus against the transformation of the port into an industrial park. On a number of occasions, Chinese investment in Greece has been met with suspicion and resistance. Chinese investors have not been spared the anger of Greek protests, many of which involve trade unions . That’s because companies like COSCO either don’t allow unionization or respond poorly to attempts at collective bargaining.
Worse, the construction of the port has been damaging to the environment. An investigation by Greek journalist Myrto Boutsi for Reporters United found that hundreds of thousands of tons of waste from dredging in the port of Piraeus have been dumped in nearby fishing grounds by port manager COSCO with permission from the Greek Environment Ministry.
Ultimately, Pew Research found in a poll of Greek citizens that just 44% of Greeks hold a favorable opinion of the Chinese government. While this number is seemingly low, it is important to note that Greece’s population holds a more favorable view of China than any other country in Europe. Yet, when it comes to BRI projects, Greek public opinion has gone from euphoria to mild opposition . Because many Sino-Greek business deals have been interrupted or outright canceled, the Greek public has become increasingly skeptical of any benefits arising from Chinese investment.
Thus, despite the perceived macroeconomic benefits to the Greek government described above, it is clear that China and its investors have a lot of work to do before it gets the Greek people back on its side.
3. Political Change Despite significant economic gains, the political implications of increased Chinese investment in Greece are becoming increasingly difficult to ignore. In 2016, President Xi Jinping referred to Greece as “an important strategic partner and China’s most reliable friend in the EU”. This statement has largely rung true. Athens has been seen by many in the EU as explicitly supporting China in exchange for increased trade and investment. In 2016, Greece was one of just three states which opposed the adoption of a joint-EU statement condemning China’s actions in the South China Sea. Worse, in 2017, the Greek government blocked an EU statement to the UN on China’s human rights record. This was the first time the EU had failed to make a statement to the UN Human Rights Council. China has also engaged in a number of operations in an attempt to influence Greek voters and shape domestic politics. China has been increasingly employing diplomacy at the local level . As of 2021, China has set up over 20 partnerships between Chinese and Greek cities and established dozens of cultural and educational exchanges. In doing so, China hopes to cultivate a more favorable image with the Greek public. Additionally, China has repeatedly targeted Greek media outlets as amplifiers of its message. In May 2016, Greece’s official Athens Macedonian News Agency (AMNA) signed a cooperation agreement with China’s state news agency, Xinhua. In April 2017, the leading Greek daily newspaper, Kathimerini, signed a cooperation agreement with Xinhua. Agreements with China have caused a large increase in reporting on China. In 2020 alone, for example, Kathimerini republished 66 Xinhua reports for its Greek readers. These reports ranged from praising the BRI to backing China’s position on European and domestic political issues.
These cooperation agreements have allowed China to push two key narratives into Greece. First, that China is a benign superpower promoting harmonious international relations through cooperation. Second, they hope to persuade Greek citizens that China is a true friend of Greece and offers significant amounts of generous assistance. Notably, China’s media strategy in Greece does not seem to be aimed at the general public — rather they use cooperation agreements to target Greek political and economic elites. Despite all of these measures, the most recent Greek government — led by Prime Minister Kyriakos Mitsotakis — has attempted to distance itself from China in favor of the U.S. Just last year, for example, Athens refused to host China’s 16+1 Summit. ​

By: Kyle Lim Chinese President Xi Jinping has embarked on one of the most ambitious military reforms in its history. What does this mean for the PLA’s structure and capabilities? The honor guards of China’s People’s Liberation Army’s Navy, Army, and Air Force march in Russia’s Victory Day parade in May 2015 in Moscow. (via Global Times) The honor guards of China’s People’s Liberation Army’s Navy, Army, and Air Force march in Russia’s Victory Day parade in May 2015 in Moscow. (via Global Times) The nature of warfare is always changing. Wars fought a decade ago are significantly different than wars fought today. Russia’s invasion of Ukraine has shown the importance of leveraging cutting edge technology such as drones. Ukraine’s military has used unmanned combat aerial vehicles built to carry missiles such as the Bayraktar TB2 and smaller UAVs used for reconnaissance to devastating effect. However, the real innovations Ukraine has adopted have been subtler. What has really given Ukraine a fighting chance is not just technology but the institutions that adopted these systems, found best practices, and distributed new battle doctrines to frontline units. All too often, analysts get overly enamored with individual weapons systems like tanks, aircraft, or drones. What really matters is how these systems are organized. For example, what is the nature of the service branches that contain these forces and employ these weapons? Which branches are prioritized, and which are sidelined? China’s recent actions such as the increased military activity around Taiwan, gray-zone actions in the South China Sea, or spy balloons over the U.S. did not come from nowhere. These activities are the result of the institutions that make up China’s military. What strengthens China's military power is not just technology, but the institutions that govern their use. Let’s delve behind-the-scenes — beyond individual weapons systems — to an analysis of People’s Liberation Army (PLA) organizational reforms since 2016. In 2016, Chinese President Xi Jinping began the first phase of one of the largest military reforms in the history of the People’s Republic of China (PRC). These reforms were split into two phases: the “above-the-neck” reforms which began in 2016 and the “below-the-neck” reforms in 2017. The first phase sought to reorganize the PLA at the top levels of the branches, regional commands, and the Central Military Commission. Meanwhile, the “below-the-neck” reforms included changes to the operational-level formations of the various service branches. These reforms, completed in 2020, were the culmination of several decades of developments and were intended to modernize the PLA to fight a modern war. History and Evolution of the New Round of Reforms The PLA has undergone multiple rounds of reforms since the establishment of the PRC in 1949. Xi’s reforms, by Chinese accounts, are the 11th round of reforms since then and are by far the largest. Previous reforms under Presidents Jiang Zemin and Hu Jintao were unable to implement the required restructuring changes critical for joint operations or fully deemphasizing the PLA Army (PLAA). These failures can be attributed to weak influence over the military, lack of political strength, and corruption in the PLA. Xi’s political skill and charisma seem to have overcome these issues, amounting to the most important and most extensive round of reforms as of yet. These reforms are intended to modernize the PLA and prepare it to fight a modern war against a peer competitor. Chinese military theorists have applied a number of terms to describe how they want a modernized PLA to fight. Terms like “joint operations'' and “information warfare” are regularly used, with the former referring to conducting operations with all the branches – such as the air force, navy, and ground forces – in close cooperation with each other under a unified command-and-control system. The latter advocates for a type of warfare that uses information systems to improve the effectiveness of military forces, such as by enhancing the ability to conduct precision-strikes on enemy forces and positions. Information warfare also includes electronic warfare, the use of deception, operations security (OPSEC), and psychological operations (PSYOPS) to disrupt or defend against enemy actions. Command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) is also a vital part of information warfare. Both joint operations and information warfare require a unified command-and-control system, in which data and commands can be shared with the entire force. Chinese military thinkers first realized the need for a modern force embodying joint operations and information warfare after the U.S.’ performance in the 1991 Gulf War, which showed the power of an information-integrated modern force equipped with state-of-the-art weapons and led by a capable C4ISR system able to coordinate U.S. and coalition forces. Victory against a largely-obsolete Iraqi force with little coordination was overwhelming. The PLA’s doctrine up until 1991 was primarily characterized as a “People’s War”. This meant employing large but technologically unsophisticated ground formations and mass mobilizing the Chinese people to fight a total war against an invading great power. Chinese military thinkers viewed their own forces as similar to Saddam’s military, and seeking to avoid their fate, sought to adopt a doctrine similar to the Americans. Now under Xi’s reforms, this has been transformed into “Informatized Local Wars”, embodying the concepts of information warfare and joint operations. Theater Commands - Streamlining Command & Control At the heart of Xi Jinping’s reforms were the replacement of the seven military regions with five theater commands as well as the disbanding of the four General Departments and their replacement by 15 smaller General Military Commissions in late 2015. That same year, the PLA Rocket Forces (PLARF) and PLA Strategic Support Force (PLASSF) also became their own branches, and the PLA Navy (PLAN), PLA Army (PLAA), and PLA Air Force (PLAAF) all received changes. These will be discussed in more detail later. What caused the transition from military regions to theater commands? Official statements cite four reasons: to streamline the command structure, strengthen the ability to conduct joint operations, increase readiness, and make military policy regarding enemy actors more coherent. The previous military regions were highly bureaucratic, dealing mainly with day-to-day peacetime functions which severely constrained wartime operations. In the event of war, an ad hoc system would be used instead. Theater commands are more geared towards wartime command-and-control and have greater control over forces in their area. These theater commands are now responsible for wartime operations and war planning while the branches are responsible for force-building. China’s theater commands take a note from the U.S.’ unified combatant commands (COCOMs), organized geographically, and formed in order to facilitate better coordination between service branches. U.S. COCOMs meld ground, air, naval, and other forces into a single, multi-domain “joint force” in which C3 is integrated and shared across the entire force. China seeks to emulate this joint force. PLA Rocket Forces (PLARF) - New Branch on the Block? In addition to the creation of new theater commands, Xi also elevated the Second Artillery Force, which was responsible for the PLA’s conventional and nuclear land-based missile forces, to a full branch, renaming it the PLA Rocket Forces (PLARF). The PLARF’s arsenal includes conventional ground-launched short, medium, and intermediate-range ballistic missiles and ground-launched cruise missiles. According to the 2022 China Military Power Report by the U.S. Department of Defense, the PLARF launched around 135 ballistic missiles for testing and training in 2021, more than the rest of the world combined. It continues to grow its inventory of DF-26 intermediate-range ballistic missiles as well as develop new intercontinental ballistic missiles (ICBMs). The Second Artillery Force was formed in 1966, two years after China’s first successful nuclear weapon test, as a secondary force beneath the other PLA branches. For most of its existence, the Second Artillery Force was subordinated to the civilian National Defense Science and Technology Commission when outlining Chinese nuclear policy and planning, but that changed to the PLA General Armaments Department after 1998. With the creation of the PLARF, the organization may have a stronger voice in determining Chinese nuclear posture and nuclear force structure. Although the PLARF’s elevation to a full branch is significant, its forces remain under the Central Military Command. Additionally, some of its units are split between multiple theater commands, signifying that the PLARF exists outside them. In this way, the PLARF as an independent branch may be less groundbreaking than it may seem. The formal elevation of the PLARF is actually a continuation of policies over the past 15 years of increasing status within the PLA, shown by the equivalency of ranks between the Second Artillery commander and commanders in the full branches and a similar bureaucratic structure composed of a Political Department, Logistics Department, Armaments Department, and Command Academy. What do these efforts mean? The PLARF has “emerged as the biggest winner in the reforms,” while also being “the service least affected by the reforms.” It has emerged with greater organizational clout and a greater ability to control its forces independently of the theater commands compared to the PLAN, PLAA, and PLAAF. For the PLARF, this is a double-edged sword. While it retains its independence as the service least integrated into the new theater command system, it could cause issues when conducting joint operations. However, the more strategic nature of nuclear and conventional missiles compared to the other services mitigates this. The PLARF is essential for China’s Anti-Access/Area Denial (A2/AD) strategy, which leverages long-range missile capabilities to deny access to U.S. forces in China’s periphery. In wartime, China would use ballistic and cruise missiles to destroy U.S. military bases in the Pacific as well as any warships within range. With A2/AD being the basis for any considerations on both sides, the PLARF has a vital role to play in any future conflict in the seas around China. PLA Strategic Support Force (PLASSF) - Tip of the Informationalized Spear The PLA Strategic Support Force (PLASSF) is another new branch created under Xi’s reforms. If anything represents Xi’s desire to shift to “informationalized warfare,” it is the PLASSF. Similar to the PLARF, it was not created from scratch but rather from preexisting formations, a method often used by PLA policymakers called a “bricks not clay” approach coined by Western observers. The PLASSF was created from various space, cyberspace, electronic, information, communications, and psychological warfare units mainly from the PLA’s General Staff Department, an organization that primarily dealt with C4ISR. The PLASSF consists of two deputy theater command-level departments. The Space Systems Department is responsible for the PLA’s space operations such as space launch and support, space surveillance, information support, telemetry, tracking, control, space warfare, R&D, and maintenance of satellites. The Network Systems Department is responsible for information operations, including electronic warfare, cyberwarfare, and psychological warfare. With the growing importance of military space operations since 2015, the PRC has placed a premium on space operations, putting considerable resources into both civilian and military projects. China has always used “civil-military fusion” to bolster its military efforts, and the PLA has historically been deeply involved in all Chinese space activities. Supporting Chinese scientific and technological research in universities and other research organizations and collaborating with international satellite projects have been key objectives for the PLA. Chinese satellites allow them to track and monitor potential adversaries. The PLASSF is also developing methods to offensively contest the space domain using direct ascent, co-orbital, electronic warfare, and directed energy capabilities. The Network Systems Department brings together electronic warfare, cyberwarfare, psychological operations, and intelligence gathering to not only strengthen each but also better synergize and coordinate efforts between them. This department is a major step towards conducting the “informatized war” capabilities the PLA sought after taking lessons learned from the 1991 Gulf War, which involves controlling the information domain and reducing the ability of the enemy’s C4ISR to conduct critical battlefield operations. The PLASSF would conduct psychological warfare to reduce the will to fight of both soldiers and civilians as well as prevent their command-and-control systems from functioning through both cyberattacks and kinetic strikes. The creation of the PLASSF shows that the PLA views electronic, cyber, and psychological operations as interconnected within the umbrella of information warfare. The goal is to not just strengthen each, but rather use them in synergy with each other to fulfill the PLA’s objectives more effectively. PLA Navy (PLAN) - China’s Premier Fighting Force In the words of China’s 2019 white paper on national defense, the PLA Navy (PLAN) “has a very important standing in the overall configuration of China’s national security and development.” Chinese thinking has changed from an emphasis on war on land and by the coast to “open seas protection,” operations beyond China’s land borders. This shift is for several reasons, the first of which is due to China’s territorial claims over Taiwan and in the South and East China Seas, all of which require a strong maritime force. The PLAN also received emphasis beginning in 2004 with Hu Jintao’s “New Historic Missions,” one of which was the need to defend China’s growing international interests such as defending shipping lanes from pirates. China continues to undertake counter-piracy operations off the Horn of Africa. Another reason for the shift towards maritime operations is China’s increasing focus on great power competition with the U.S. The 2013 issue of the Chinese Science of Military Strategy argues that the U.S. “will rely on its comprehensive distant combat superiority from the ocean direction,” and that it will become “increasingly difficult to protect the homeland from the homeland and the near seas from near seas, it might even become untenable.” Hence, the enemy must be met far from Chinese coasts. The PLAN has capitalized on these paradigm shifts and has become the recipient of an ever-growing share of the defense budget since 2004. These resources have allowed the PLAN to become a major player in the Indo-Pacific and the world. According to the 2022 China Military Power Report published by the Department of Defense, the PLAN is the largest navy in the world in terms of raw numbers with 340 platforms, the majority of these being modern warships and submarines, including approximately 125 surface combatants. China’s rate of shipbuilding is superior to the U.S.’ while also shifting to an emphasis on quality over quantity. By U.S. Department of Defense estimates, the PLAN is projected to grow to 400 and 440 ships by 2025 and 2030, respectively. Xi’s reforms since 2016 organizationally weakened the emphasis on the ground forces by replacing the military regions, dominated by the army and led by PLAA generals, with theater commands in which all branches share equal power. This has improved the independence of the PLAN while also allowing it to act in tandem with the other branches when conducting joint operations. Although the autonomy of PLAN forces is limited by having them answer to their respective theater commands, this is somewhat mitigated by having PLAN admirals in theater command positions. The commander of the Southern Theater Command, responsible for the South China Sea, is a PLAN admiral, and although the Eastern Theater Command facing Taiwan is commanded by a PLAA general, its deputy commander is a PLAN admiral. In addition, Chinese maritime operations beyond the Indo-Pacific and the related theater commands are under full PLAN control. The PLAN Marine Corps (PLANMC) has also been significantly expanded under the reforms. Three PLAA coastal defense units and one motorized infantry brigade have been converted into marine units, growing the PLANMC from two brigades before 2016 to six brigades and tripling the force size from around 12,000 personnel to 36,000. Such forces are vital to defend China’s island claims in the South China Sea and would be frontline units in a potential invasion of Taiwan. PLA Air Force (PLAAF) - Downsizing and Flexibility The PLA Air Force (PLAAF), when combined with the PLAN’s aviation assets, constitutes the third-largest air power in the world with more than 2,800 aircraft. Around 2,250 are combat aircraft, including fighters, strategic and tactical bombers, and attack aircraft. China’s fighter inventory is increasingly dominated by fourth-generation fighters, and the Department of Defense predicts that they will become the majority in the next few years. Alongside the bomber fleet, the PLAAF is quickly rivaling the U.S. in terms of modern technology. Under the reforms, the command structure of the PLAAF has been downsized and its units have shrunk. The PLAAF, in accordance with the PLA-wide transition from seven military regions to five theater commands, adapted its number of military region Air Forces from seven to five theater command Air Forces. Similarly, in tune with comparable reforms in the PLAA, the PLAAF moved to a brigade-focused organizational structure for its fighters and ground attack aircraft, abolishing many of its air divisions in favor of a focus on brigades. This was done for the same reasons as the PLAA to promote flexibility. However, the air divisions that consist of bombers remain, most likely because these units have larger missions that span across theater commands and thus require larger formations. PLA Army (PLAA) - Sidelined, But Still Strong The PLA Army (PLAA) is said to be the “biggest loser” in Xi’s reforms. This branch has been the target of various reforms incrementally introduced since Jiang Zemin intended to deemphasize the PLAA and equalize the service branches. From 1997 to 2018, it has lost 55% of its manpower. With PLA planners increasingly looking to the seas as the theater for future conflict, the PLAA is the slowest of the branches to modernize. Xi’s organizational reforms mean the PLAA has lost its dominance over the other branches, with PLAN and PLAAF getting an equal seat at the table at the new theater commands. However, despite the shrinking of the PLAA’s size and command prestige, it still received much-needed reforms as befits the largest branch in the PLA. Under Xi, the PLAA has become a force more able to fight a modern, mobile war. The goal of Xi’s “below-the-neck reforms” for the PLAA was to shed the bulky, massive formations once characteristic of Chinese forces. The number of group armies decreased from 18 in 2013 to 13 accompanied by a similar decrease in the number of independent combat divisions, with some being turned into combined arms brigades. Today, the standard army group contains six combined arms brigades and six supporting brigades of artillery, air defense, army aviation or air assault, engineer and NBC (nuclear, biological, and chemical) defense, special operations forces (SOF), and service. Combined arms brigades are either heavy (armored or mechanized) or light (motorized or mountain) and contain four combined battalions plus six supporting battalions of reconnaissance, artillery, air defense, engineer and NBC defense, communications, and service. These combined arms battalions and brigades are now the basic combat units of the PLAA. According to the PRC’s 2013 defense white paper, the PLAA is “gradually making its units small, modular, and multifunctional in organization so as to enhance their capabilities for air-ground integrated operations, long-distance maneuvers, rapid assaults, and special operations.” Keeping with the emphasis on flexibility, the PLAA is also strengthening its army aviation and air assault forces as well as SOF. Under the new group army structure, the PLAA maintains a total of 15 army aviation brigades for 13 group armies plus the Xinjiang and Tibet Military Districts in addition to 17 SOF brigades. Continuing Issues: The Manpower Quality Question With the last war the PLA fought being the 1979 Sino-Vietnamese War, is the quality of PLA commanders and soldiers good enough for a future conflict with the U.S.? The simultaneous drawdowns and disbanding of some units combined with the creation of new ones only exacerbates the issue of quality officers and soldiers. New PLA officers are required to man PLAF and PLAN systems as well as the new PLAA battalions. Many officers have been discharged as a result of the drawdowns, putting a greater emphasis on NCOs for fulfilling responsibilities. And in the PLAF, the shift from the regiment to the brigade structure requires higher-ranked officers while also creating obstacles for officers to advance. With a growing emphasis on smaller, more independent battalions, the PLA needs more competent junior and non-commissioned officers that can fight and lead on a modern battlefield. The PLA has already begun to address these issues. The PLA’s academies have modernized and the PLAN has introduced advanced training ships to train sailors and naval aviators. Under Xi, military exercises have also been reformed. In a 2016 PLA symposium, Chinese military leaders acknowledged that there is “a large gap between the PLA’s level of training and the requirements of actual combat.” All branches of the PLA now carry out increasingly realistic and regular exercises emphasizing joint operations, with a growing amount of these being cross-service and cross-theater command. In regards to junior officers and NCOs, there seems to be increasing professionalization, trust, and importance, though Xi and senior officials are impatient with the rate of professionalization. Much effort has been put into training and recruiting NCOs with a focus on training returning conscripts as NCOs as well as commissioning college and technically skilled high school graduates. Despite attempts at improving the quality of officers and enlisted soldiers, there are still questions about how competent PLA commanders will be in a hot war — particularly when conducting joint operations. The PLAA especially, with a massive transition to combined-arms battalions, may have issues with battalion commanders from non-infantry or armored backgrounds being able to understand and carry out their roles. Although theater commands are intended to encourage jointness between commanders, the PLA still struggles with getting commanders to cooperate with each other. Additionally, while China has put in place the Western-style command structure, the Western-style culture that emphasizes competency and independence in its junior and non-commissioned officers has yet to be seen. China is attempting to build an American-style army with the associated command structure while retaining the old Soviet-style controls and culture. Loyalty to the party is still strongly emphasized and the PLA is still struggling to retain experienced non-commissioned officers, with many veterans and college graduates seeking private sector work. New U.S. Army NCOs, on average, have twice the amount of experience as their counterparts in the PLAA. Finally, such massive reorganizational efforts take a lot of effort, resources, and most importantly, time. Other modern militaries require multiple decades and continual changes to doctrine and procedures for things to work smoothly. Similarly, the massive overhauls in command and control will cause issues with readiness in the short term. Looking Forward Under Xi’s reforms, there is not one section of the People’s Liberation Army that has not been affected. Where previous attempts have tried and failed to bring the PLA into the modern age, this round introduced a slew of changes that herald a new era for the PLA. Under the “above-the-neck” and “below-the-neck” reforms, the branches of the PLA have increased their interoperability and ability to conduct joint operations while also gaining the ability to fight “informationalized wars”, using information and cyber warfare in conjunction with conventional forces. The PLAA, which once dominated the PLA, is now increasingly relegated to the sidelines as maritime operations take center stage. However, although great strides have been made in cultivating operational flexibility and jointness between services, only a future war will show if these efforts have been fruitful. The most vital uncertain factor influencing PLA readiness is the quality of its manpower, whether it be enlisted personnel or junior and senior officers. Western analysts continue to question the capability of China’s non-commissioned officer corps. In a Western-style military command structure that gives greater independence to its lower-level officers, a culture that emphasizes an ability to think and act independently is required. Against Ukraine, Russia was unable to utilize its vast quantitative and qualitative advantage — which existed at least on paper — due to its poor quality of leadership and lackluster command and control. These were qualities that were unknown to Western observers until the war began. Likewise, it is still unknown whether China’s military culture will survive first contact in a future conflict. Leadership quality and organizational structure more broadly are unquantifiable qualities which, as the Ukraine war has shown, can only be measured in combat. Works Cited Borden, Andrew. n.d. “What is Information Warfare?” Air University. Accessed December 22, 2022. https://www.airuniversity.af.edu/Portals/10/ASPJ/journals/Chronicles/borden.pdf. Burke, Edmond J., Kristen Gunness, Cortez A. Cooper III, and Mark Cozad. 2020. “People's Liberation Army Operational Concepts.” RAND Corporation. https://www.rand.org/content/dam/rand/pubs/research_reports/RRA300/RRA394-1/RAND_RRA394-1.pdf. “Chairman Xi Remakes the PLA: Assessing Chinese Military Reforms.” Washington, DC: National Defense University Press. Dahm, Michael, and Mike Dahm. 2021. “China's Desert Storm Education | Proceedings - March 2021 Vol. 147/3/1417.” U.S. Naval Institute. https://www.usni.org/magazines/proceedings/2021/march/chinas-desert-storm-education. “Full Text: China's National Defense in the New Era.” 2019. The State Council of the People's Republic of China. https://english.www.gov.cn/archive/whitepaper/201907/24/content_WS5d3941ddc6d08408f502283d.html. Kenneth W. Allen, Brendan S. Mulvaney & James Char (2021) Ongoing organizational reforms of the People’s Liberation Army Air Force, Journal of Strategic Studies, 44:2, 184-217, DOI: 10.1080/01402390.2020.1730818 U.S. Department of Defense. 2022. “Military and Security Developments Involving the People's Republic of China.” McKeown, Robert. 2022. “Assessing Military Capability: More than Just Counting Guns.” U.S. Naval Institute. https://www.usni.org/magazines/proceedings/2022/december/assessing-military-capability-more-just-counting-guns. Tetreau, Matt. 2023. “The PLA's Weak Backbone: Is China Struggling to Professionalize its Noncommissioned Officer Corps? - Modern War Institute.” Modern War Institute -. https://mwi.usma.edu/the-plas-weak-backbone-is-china-struggling-to-professionalize-its-noncommissioned-officer-corps/. “China's Anti-Access Area Denial – Missile Defense Advocacy Alliance.” 2018. Missile Defense Advocacy Alliance. https://missiledefenseadvocacy.org/missile-threat-and-proliferation/todays-missile-threat/china/china-anti-access-area-denial/.

On Monday, March 27, the US-China Strategic Studies Organization hosted its second annual Spring Conference in the Elliott School City View Room. From 6:30 p.m. to 9:30 p.m., 50+ attendees experienced the Spring Conference in three segments: a moderated discussion with a guest speaker from American University, a catered intermission accompanied by a research showcase highlighting 6 USCSSO projects, and an advice panel and networking session featuring three young professionals currently working in international affairs industries like D.C. think tanks, departments in the federal government, or private sector corporations. The evening began with the moderated speaker discussion entitled "Xi Jinping: Where He Came From, Where He’s Going" featuring Dr. Joseph Torigian of the Wilson Center and American University as the distinguished guest speaker. The event focused on the key underlying experiences and influences that underpin Xi Jinping's governing philosophy. This recording of the hour-long discussion was published for the viewing pleasure of those who were unable to attend our Spring Conference in March. About Our Speaker: Dr. Joseph Torigian is an assistant professor at the School of International Service at American University in Washington and a Global Fellow at the Wilson Center, specializing in the politics of authoritarian regimes with a specific focus on elite power struggles, civil-military relations, and grand strategy. As a scholar, his philosophy is to select topics based on the widest gap between the under-utilization of available documents and their theoretical and empirical importance, extract broader lessons, and use those lessons to help us to understand two nations of crucial geopolitical importance – Russia and China. His research agenda draws upon comparative politics, international relations, security studies, and history to ask big questions about the long-term political trajectories of these two states. In particular, Dr. Torigian is interested in how leaders in those countries create security against threats from within the elite, their own people, and other states. Previously, Dr. Torigian was a Stanton Fellow at the Council on Foreign Relations, a Postdoctoral Fellow at Princeton-Harvard’s China and the World Program, a Postdoctoral (and Predoctoral) Fellow at Stanford’s Center for International Security and Cooperation (CISAC), a Predoctoral Fellow at George Washington University’s Institute for Security and Conflict Studies, an IREX scholar affiliated with the Higher School of Economics in Moscow, a Fulbright Scholar at Fudan University in Shanghai, and a research associate at the Council on Foreign Relations. His research has also been supported by the Stanford Center on International Conflict and Negotiation, MIT’s Center for International Studies, MIT International Science and Technology Initiatives, the Critical Language Scholarship program, and FLAS. About Our Moderator: Dylan Shepard is the Director of Research at the U.S.-China Strategic Studies Organization. He is also an Undergraduate Research Fellow at the GW Institute for Korean Studies and the Director of Events at the GW chapter of the Alexander Hamilton Society. His primary research focus is on Chinese political economy and the intellectual history of the Chinese Communist Party.

In pursuit of maintaining power and achieving the China Dream, Xi must manage three levels of interconnected threats and navigate between two competing visions of China’s future. By: Michelle Wang Chinese President Xi Jinping has secured an unprecedented third term as Chinese Communist Party (CCP) General Secretary and Chair of the Central Military Commission (CMC). For the past ten years, Xi has endeavored through extensive efforts to centralize decision-making authority, including undoing several informal but long-established Party norms. ​ Xi overturned the separation of Party and state convention by reintegrating Marxist-Leninist ideological frameworks into official decision making, including technical and managerial government agencies. In a speech at the Fourth Plenary Session of the 19th CPC Central Committee, Xi claimed that scientific socialism and Marxism will guide China to realization of the Chinese Dream of national rejuvenation. ​ Xi’s ideological control permeates through all domains. Cadres are instructed to use “Xi Jinping’s Economic Thought” and “Xi Jinping Thought on Diplomacy” as a foundational theory to guide economics and foreign affairs policy. The increased significance and revival of ideology’s role in governance is expressed by the ideological tone of the 20th Party Congress report and the amendments to the constitution: “Xi Jinping Thought on Socialism with Chinese Characteristics for the New Era is the Marxism of contemporary China and of the 21st century and embodies the best Chinese culture and ethos of the era.” ​ Xi has become the “core” of the Party, as declared by the 18th Central Committee, and has centralized power to an extent comparable to Mao Zedong. He currently chairs nine powerful Party commissions, including the Central Finance and Economic Affairs Commission, the Central Foreign Affairs Commission, and the Central Taiwan Affairs Leading Small Group. For comparison, Hu Jintao only chaired four commissions. Xi sometimes even bypasses government agencies, engaging in skip-echelon, with his own ad-hoc Party commissions. Xi’s authority has become increasingly synonymous with Party authority. ​ Xi has also widened the gap between himself and the Standing Committee of the Politburo by packing the body with loyalists. His marginalization and purging of any opposition has been another departure from the convention of factional compromise, which requires balancing policy interests within the Standing Committee. The sweeping anti-corruption campaign he launched in 2012 has also been a tool to neutralize opposition in high-level Party and military leadership. The return of ideology as the foundation for policy and decision-making, the purposeful faction asymmetry within the Standing Committee, and the general restructuring of decision-making, military, and economic apparatuses have concentrated power at the highest levels, solidified a top-down government system, and consolidated Xi’s dominance over the Party and over China. However, there are still key challenges to his power. Three Threats to Xi’s Power Despite Xi’s successful centralization and personalization of political power, three interconnected levels of risks remain as pervasive threats to Xi Jinping’s regime. Somewhat paradoxically, the rigidity of the top-down system that Xi created through extensive institutional restructuring and his upending of Party norms might be the underlying force behind threats to Xi’s power. ​ First and perhaps the most evident source of political instability is the absence of a clear successor following the 20th Party Congress. Beginning with Deng Xiaoping, Jiang Zemin and Hu Jintao enacted political reforms such as restricting China’s presidency to two five-year terms and setting term limits at ministerial levels. Xi has dramatically shifted away from promoting collective leadership and completely ignored the Seven Up, Eight Down convention by his third term appointment. Seven Up, Eight Down refers to the informal rule that members aged 68 or older are expected to retire, whereas members aged 67 or younger would remain in the committee and could still obtain promotions. Li Keqiang and Wang Yang, both 67, were unexpectedly omitted from the 20th Standing Committee at the same time Xi himself — age 69 — remained president. Again deviating from historical norms, Xi has refused to promote any apparent successors and has even purged candidates for succession from the CCP, such as Sun Zhengcai. This absence of a clear successor will accumulate risk the longer Xi stays in power. Especially in a tumultuous and vulnerable time of post-COVID economic decline and inequality, heightened U.S.-China competition, and rising tensions with Taiwan, a lack of successor is a lack of predictability and assurance of the Party’s and China’s future. As a soon-to-be septuagenarian, China’s economic, political, and international problems will extend beyond Xi’s lifetime. Since China’s political structure and decision-making authority revolves around Xi, there is pervasive uncertainty about how Xi’s authority will be transferred or distributed when he inevitably retires or passes away. This uncertainty fuels political instability. Even during Xi’s regime, political supporters and opponents alike are likely experiencing infighting within their respective factions, scrambling to gain prominence over a post-Xi China.

Factional competition and conflict within the CCP will intensify not only as Xi nears the end of his lifetime, but also alongside dissatisfaction and resentment with Xi’s policies and Xi himself. Factional tensions and dynamics have long seemed to constitute Chinese politics, but the old order intended to reduce and control internal competition is gone. The increasing disillusionment with Xi from both elitist and populist factions of the CCP, exacerbated by Xi’s disastrous zero-COVID policy, have already been expressed through passive resistance such as stalling and inaction. During the Shanghai lockdown, members of the residents’ committee in Salin collectively resigned. As pressure mounts on top Party leadership, even the unity of Xi loyalists might fracture. In many authoritarian political systems, leaders are emboldened to pursue more reckless policies in order to combat growing dissent. Similarly, some predict an action-reaction cycle in which Xi reacts to growing opposition by implementing more extreme policies in an attempt to rejuvenate support and muffle dissent. ​ However, these measures would likely generate significant pushback. Xi is already pursuing ambitious plans, especially towards Taiwan reunification. The rigidity and echo-chamber-esque nature of Xi’s government will lead to a lack of policy flexibility and inability to correct policy mistakes. As we have seen in Putin’s Russia, this increases the likelihood of miscalculations and policy failures. Ultimately, factional competition in conjunction with informal resistance could destabilize Chinese politics, threaten Xi’s power, and undermine the peace and prosperity of China. Disillusionment with Xi within the CCP is a reflection of growing civilian discontent and backlash against COVID-19 restrictions, economic hardships and inequality, lack of freedom, and other pervasive social, political, and economic issues plaguing Chinese civilians. Dissatisfaction with the CCP has manifested in the form of civilian protests despite media suppression and brutal police repression, most notably with the 1989 Tiananmen Massacre. Protests against the CCP have been sparse since the Tiananmen Massacre until late 2022 when people across China protested the zero-COVID policy and demanded greater respect for human rights. These protests were triggered and epitomized by Peng Lifa through protest banners on a Beijing bridge voicing opposition against Xi. These unprecedented movements exemplify the most pervasive threat to Xi’s power: that no matter the degree of constraints on civil engagement and political activities, the possibility of mass unrest due to civilian discontent remains an unavoidable fact. Xi may be losing legitimacy and support amongst the Chinese people, and his restrictive, widely unpopular zero-COVID policies have fueled significant grievances. There is no legal or peaceful mechanism to voice these grievances or compel changes in governance and policies, so civilian discontent may have no choice but to fester and spill out into the streets. ​ Li Qiang and Wang Huning: Two Differing Perspectives Despite mounting domestic and international pressures working against Xi, a vicious action-reaction cycle and the precipitation of disastrous policies are not inevitable. China is not on a predetermined path towards political uncertainty and instability. Members of the CCP, if afforded certain levels of maneuverability under Xi, could help direct both the Party and China towards a more moderate, resilient, and productive path politically, economically, and ideologically. The newly elected premier of China, Li Qiang, epitomizes this possibility. However, Wang Huning, one of only two standing committee members retained by Xi, represents an ideologically-charged counterforce resisting and combatting liberalization. Li Qiang was newly elected premier of China during the National People’s Congress. As a close confidant of Xi, Li Qiang previously served under Xi in Zhejiang Province from 2012 to 2016. Li was also Party Secretary of Shanghai from 2017 to 2022. Known as a pro-business pragmatist and a strong supporter of private sector entrepreneurialism, Li promoted “ market-oriented, rule-of-law-based ” policies during 14th National People’s Congress Press Conference. During his service in Zhejiang, he contended that innovation was “the most scarce and valuable resource in the world today”. When commenting on Wenzhou’s development, he maintained that the government should be a good “attendant”, “navigator”, and “umpire” in economic affairs.
Li Qiang’s loyalty to Xi precedes his lack of experience; Li has never served as Vice Premier or worked outside of the Yangtze Delta region. Additionally, Li’s role in the chaotic and unpopular Shanghai COVID-19 lockdown regulations further weakened the image of his competency. Li originally favored a restrained and targeted lockdown system in response to COVID-19 in order to minimize economic disruptions, but was nevertheless steadfast in carrying out Xi’s zero-COVID orders. However, Li was instrumental in pushing for the loosening of zero-COVID regulation. He helped companies restart production after the financially devastating lockdowns, including the opening of the first wholly foreign-owned car company in China, Tesla Inc. Li also pushed for importing the more effective foreign vaccines but was denied by the central government. Li, as a market liberal , could steer China’s economic policy towards a more liberalized and private market oriented approach, but ultimately the level of economic or political autonomy he has is dependent on Xi. The Premier role that Li Qiang inherited from Li Keqiang has been diminished in power and prestige; the distance between the General Secretary and the Premier has significantly widened. Li may be unable to resist Xi in terms of power and policy, as demonstrated by Xi’s overriding orders during zero-COVID. Conversely, due to the subordinate nature of Li, if Xi encounters economic problems it will be difficult for him to subvert blame and responsibility onto Li, as he did with Li Keqiang. Whether Li Qiang becomes a complacent consigliere to Xi or a moderating market-oriented force depends on the level of maneuverability he affords Li. How Xi utilizes and delegates Li will determine the extent to which Li can implement economic policies and governance decisions.
Wang Huning, unlike Li Qaing, is a leading opponent of Western liberalism. Known as the Grey Eminence, Wang serves as Chairman of the Chinese People's Political Consultative Conference and was one of two members of the Politburo Standing Committee who retained their seats, excluding Xi Jinping. Unlike Li Qiang, Wang is not a long-standing Xi career loyalist. As “Chaplain of Three Dynasties”, Wang’s political career is marked by longevity and continued ascendancy by serving under and closely aligning himself with Jiang Zemin, Hu Jintao, and now Xi Jinping. Wang is the architect of CCP foundational ideologies, the chief political strategist, and theoretician. Ideas such as “China Dream”, “Chinese-style modernization” and “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era” as well as other governing philosophies such as Jiang’s “Three Represents” and Hu’s “Harmonious Society” are attributed to him. Wang Huning is an undeniable far-reaching authority in the ideology and politics of the CCP that transcends regime and complex Party dynamics.
In a 1988 essay “The Structure of China’s Changing Political Culture,” he concluded that China “must combine the flexibility of [China’s] traditional values with the modern spirit [both Western and Marxist]” in order to fill the missing holes of “core values” in China’s modernization. In his 1991 book “America against America,” he attributes America’s internal division and social issues to individualism and capitalism, underpinning the case for China’s resistance to global liberal influence. Wang’s Marxist and Confucian influenced “Neo-Authoritarian” ideology has manifested in actual policy, including Xi’s “Common Prosperity” campaign. The campaign was designed to combat nihilistic individualism and commodification by cracking down on monopolies and implementing bans on various social and cultural phenomena from LGBT groups to video games. Wang’s reputation across regimes and alignment with Xi secures his influence in the Chinese political sphere.
Wang plays an instrumental role in articulating and integrating ideology into the foundations of Chinese goals and policy-making. Wang’s ideology is inherently anti-liberalization and anti-globalization, representing a strong counterforce to the economically liberal Li Qiang. The dichotomy of Wang and Li is reminiscent of Mao and Deng in their opposing ideological and economic approaches to the pursuit of Chinese prosperity, stability, and preeminence. Although ideology has always driven the direction of Chinese policy, China’s economic prowess is ultimately the source of China’s power. Xi must navigate between these influences and decide from which playbook he will draw from to propel China forwards while performing a careful political balancing act of mitigating domestic threats. Whether Xi will be swayed by economic liberalization or ideological rejuvenation remains to be seen.

By: John Grintzias Premier Li Keqiang is the most notable figure of those removed from the Politburo Standing Committee during the 20th National Party Congress. As Premier, Li Keqiang was the second most powerful figure within the Chinese Communist Party (CCP), behind President Xi Jinping. Following the 20th National Party Congress, Li Keqiang was replaced by Xi loyalist Li Qiang. So why was Li Keqiang purged? The best explanation from expert China watchers is that his ideology did not align with Xi Jinping’s. His reformist policies did not reflect Xi’s more authoritarian agenda, and Xi did not approve of the way Li was attempting to steer the country. In fact, Xi had previously sidelined Li and removed his influence over economic policy. Xi’s ascension to a third term in office gave him the power to further compose the Politburo Standing Committee to his liking. And the fact that a Xi loyalist has purged Li Keqiang, who held the second most powerful position within the CCP, indicates that Xi Jinping has centralized power with little opposition. An examination of Li Keqiang’s upbringing and beliefs may provide better context as to why he was removed. Early Life Li Keqiang was born into a middle class family in the Anhui province. Growing up, Li’s early education was halted due to the events of the Cultural Revolution. His father, Li Fensang, sent him to a commune where he was required to do hard labor. His father was a member of the People’s Liberation Army (PLA) and later became a low-ranking official in the CCP. In 1976, Li joined the CCP as a secretary of the commune’s branch. Unlike many current and former high-ranking CCP officials, Li Keqiang did not have any family members in prestigious government positions. Li wanted his career to be based on merit , not lineage. In fact, when Li’s father offered him a position within the CCP, he declined. Li instead chose to carve his own path. In 1978, Li enrolled in Peking University—one of China’s top universities. While there, he studied international affairs and law and began to affiliate with the Communist Youth League (CYL) of China. It was at Peking that Li befriended future Chinese president Hu Jintao. Career After graduating from Peking University in 1982, Li Keqiang would continue to rise in rank through his work for the Communist Youth League. Many at the time believed that Li would help foster the democratic wave in China. That is, until the Tiananmen Square Massacre in 1989. Li saw the potential consequences associated with the democratic wave in China. It was clear that the CCP was against the promotion of democracy, and those who did would be prosecuted or executed, as shown by Tiananmen Square. Li sought to avoid those potential consequences. While avoiding controversy, he was eventually promoted to First Secretary of the CYL in 1993. In 1998, Li was appointed governor of Henan Province. As governor, Li would improve the economy within Henan despite facing major controversies during his tenure. An AIDS epidemic, which yielded a 62% infection rate within small villages in Henan, plagued the region. There were even reports that poor farmers participated in illegal blood sales which contributed to the spread. Officials in Henan denied the report and condemned any sort of speculation regarding the epidemic. The party praised Li for his handling of the epidemic.
Despite facing controversy, Li’s career trudged forward. In 2004 he was named Party Secretary in Liaoning Province, and in 2007, he was promoted to the Politburo Standing Committee, where he would be named Executive Vice Premier of the State Council. The State Council is effectively China’s cabinet, which is composed of every single ministry within China. In 2011, Li was once again mired in controversy. In a human rights incident known as Hong Kong 818 , Li visited the city in order to promote development between Hong Kong and the rest of mainland China. While there, Li toured the University of Hong Kong where many students protested his visit. The protestors opposed Chinese rule and advocated for an independent, sovereign Hong Kong. Three students who attempted to approach Li were forcefully restrained by police. Students were outraged about the situation, believing that their rights to freedom of expression were violated. As a result of this incident, not only was the image of Hong Kong University tarnished, but Hong Kong journalists were no longer permitted to be around Li.
Leading up to the 18th National Party Congress in 2012, many in the CCP believed that Li was in position to be Hu Jintao’s successor. However, Li had to compete with another rising star , Xi Jinping. Due to Xi’s rise within the CCP, and his father being a prominent figure during the Cultural Revolution, Xi beat out Li Keqiang and ultimately assumed the position of President. Meanwhile, Li was granted the second most powerful position in the CCP as Premier. He would then serve as Premier until he was removed from the Politburo Standing Committee in 2022.
Policies and Notable Achievements Li Keqiang was an economist at heart, and many of his policies reflected that. Li’s first major policy decision came as Party Secretary in Liaoning Province, known as the “ Five Points, One Line ” strategy. It was designed to boost the economy of Liaoning Province. The five port cities of Dalian, Yingkou, Jinzhou, Dandong, and Huludao along the coast of Liaoning Province would be connected by one road, allowing trade to flow between the five cities seamlessly. Ultimately, Li’s “Five Points, One Line” plan aimed to turn Liaoning Province into one of China’s major port networks for imports and exported goods. In 2010, Li Keqiang made a crucial appearance at the World Economic Forum in Davos, Switzerland. At this time, the global financial crisis had stymied the world economy. Despite this, China’s economy actually continued to grow. Thus, China was in a position to act as a leading economy that could initiate global economic recovery. China planned to do so by providing economic stimulus to struggling economies, which would help China’s GDP grow by 8.7%. At the World Economic Forum, Li emphasized the promotion of open markets , world development, and sustainable economic development. While his speech did not directly affect global markets, it was a much-needed boost to the spirit of the global economy. In the post-recession environment, Li helped pioneer — along with The Economist — a method to measure economic growth. It was reported that Li himself actually measured China’s economic growth by using these measures instead of official measures used by most Chinese economists. As a result, these metrics became known as the Keqiang Index . Although the index did not account for technological growth in China, this index was seen as a more reliable alternative to GDP data in China because many economists distrusted China’s official GDP reporting. Economists use the Keqiang Index to measure economic growth by analyzing the weighted average growth rate of railway freight, power consumption, and bank loans.
Li Keqiang’s Marginalization Because of Li Keqiang’s close friendship with former CCP president Hu Jintao during their time in the CYL, it is safe to say that Li’s ideology reflects Hu Jintao’s. Hu Jintao’s Policies were reformist and focused on the promotion of an open economy. Many of Li’s supporters were also affiliated with the Communist Youth League, which Xi has repeatedly criticized. Xi believes that the CYL promotes differing ideologies, including Western thought, among younger people. Li often criticized China’s economy and helped create the ‘Keqiang Index’ because he believed that China’s GDP data was“man-made” and “unreliable”, and condemned corruption within the CCP. While Xi also showed concern with corruption through his massive anti-corruption campaign, their definitions of corruption may differ. Li wanted to remove corruption for the interest of China, whereas Xi’s anti-corruption campaign was seen by many observers as politically motivated for his own benefit. As part of the policy, Xi purged many in the CYL who ideologically opposed him and replaced them with those affiliated with his power base in Zhejiang. As a result of their opposing ideologies, it is believed that he was marginalized by Xi Jinping. Li’s reformist beliefs clashed with Xi’s authoritarian style, and it seemed as if Xi had cast Li into his shadow. Li has been attempting to push Xi to maintain capitalist open economic policies, but his efforts were ignored. For example, after the outbreak of COVID-19, Li was given authority to decide how China would deal with the economic effects of COVID. However, the media and public credited Xi with the decision to shut down businesses in China. Li likely would have made a different decision since he had shown discontent with zero-COVID, stating that “we must ensure both the smooth functioning of supply chains and COVID prevention are both achieved”. Xi pushed COVID prevention policies in a totally different direction. Li seems to believe that China’s economy is currently in a worse position than it was at the beginning of the pandemic, and measures should be taken to course-correct. The End of Li It is likely that Xi viewed Li Keqiang as a threat since he was one of the last remaining politically powerful members of Hu Jintao’s reformist clique — a faction that Xi wants diminished. Because Li held one of the most powerful positions within the CCP, he had some authority to enact reformist policies and help China maintain an open economy. But Xi, ideologically opposed to these reforms, pushed Li to the sidelines. In the end, Li was forced into an early retirement — despite age rules allowing him to continue — and pushed out of the 20th Politburo Standing Committee. Now that he is gone, Xi is surrounded by more Xi loyalists than ever. Li Keqiang’s removal sends a strong message that Xi wields all power within the CCP.

The Rising Stars that Missed the Politburo Standing Committee Chinese politicians Hu Chunhua and Chen Min’er were seen as potential successors to Xi and top contenders for the Politburo Standing Committee. Neither made it onto China’s most important leadership body. By: Julian Anderson China’s 20th National Party Congress witnessed the consolidation of President Xi Jinping’s power, the elevation of his inner circle to the Politburo Standing Committee (PBSC), and the humiliation of his political rivals. These Party Congresses happen only every five years and select China’s next leaders, which has huge implications for China’s future. But what is most intriguing are the individuals whose political fortunes were unexpectedly dashed. ​ While four Politburo members were raised to the most secretive and important decision-making body, the PBSC, two were considered strong contenders but ultimately not selected. The selection process itself is extremely opaque, forcing China watchers to read the tea leaves. Relying on analysis of informal rules, career paths, personal relationships, faction affiliation, and policy records, experts make tentative predictions about the likely direction of Chinese politics. ​ Unlike democratic systems, China’s top decision-making bodies — the 25-member Politburo and 7-member Politburo Standing Committee — are not directly elected by constituents. Instead, a short-listing process is ostensibly used where Party Congress participants are polled on their top nominations for the Politburo and PBSC. Incumbent PBSC members then use these straw polls to guide their decisions on electing new members. However, the actual voting process of incumbent members is not at all transparent and susceptible to backroom dealing, which is why Party Congress outcomes are so difficult for China watchers to predict. ​ What is known is that Xi undoubtedly wields enormous influence over the selection of candidates to the Politburo and PBSC, so who does not make it onto the committee says just as much about Xi’s power and desires as who does. The bottom line is this: if up-and-coming members of the CCP didn’t make it onto the committee, it means Xi did not want them there. ​ Let’s turn our attention to the rising political stars whose fortunes were dashed at last year’s 20th Party Congress: Hu Chunhua and Chen Min’er.
Hu Chunhua: The Challenger eading up to the 20th Party Congress, Hu Chunhua was seen as a potential contender for the PBSC. As the Vice Premier of the State Council, Hu was well positioned with high ranking experience in Party administration and governance of Hebei and Guangdong provinces. He is also the most prominent sixth generation leader of the Communist Youth League (CYL) — former President Hu Jintao’s faction. His mentor-protege relationship with the older Hu Jintao (no familial relation) gave him the moniker “Little Hu”. Hu Jintao boosted Little Hu’s career path and was influential in placing him onto the Politburo. Unfortunately for Hu Chunhua however, his strong relationship with the former president and his factional connections with the CYL were in fact severe weaknesses.

First, the CYL is the major rival of Xi’s faction, dubbed by some China watchers as the “Zhejiang New Army” as Xi’s allies tend to follow his career path through leadership positions in the Zhejiang province. Xi has been openly critical of the CYL, calling them “paralyzed from the neck down”. Meanwhile, Xi has sought to systematically remove CYL members from top leadership positions. Former Chongqing Party Secretary Sun Zhengcai, boosted to the Politburo by Hu Jintao at the same time as Little Hu, was purged by Xi in 2017 to little fanfare. Wang Yang, a member of the 19th Standing Committee with ties to the CYL, was forced into an early retirement when he didn’t make it onto the 20th PBSC despite meeting the informal “seven-up eight-down” age requirement. Instead, his seat was likely vacated to make room for another close Xi ally.
Fearful of being marginalized and aware of Xi’s power to destroy his political rivals with minimal reprisal, CYL members have bent over backwards to criticize their organization and show deference to Xi. The latest and most provocative demonstration of Xi’s disdain for the CYL came when he humiliated its leader during the 20th National Party Congress. Hu Jintao was unceremoniously escorted out of the Party Congress in a way that seems likely planned. As China watcher Bill Bishop put it, the “image of Hu Jintao being led out is a perfect symbol of Xi’s absolute decimation of [Hu’s] ‘Communist Youth League’ faction”. In the context of Xi’s extraordinary power over domestic politics, Little Hu’s connections to CYL and Hu Jintao are anything but a strength.
Hu Chunhua, likely concerned about his political fortunes in the era of Xi, attempted to keep a low profile while continuing his upward career trajectory. But that was not enough to escape Xi’s ire. Little Hu not only did not make it onto the Politburo Standing Committee, but he didn’t even keep his position on the Politburo. While Hu remains on the Central Commission, the governing body one step below the Politburo, his political career is effectively over. With Xi in power, no potential challenger from a different faction stands a chance. But as Chen Min’er shows, even potential successors affiliated with Xi’s ideology and faction have been sidelined. ​ Chen Min’er: The Successor? Since before his time as Chongqing Party Secretary, Chen Min’er seemed groomed for leadership. Not only is he a member of Xi’s so-called Zhejiang New Army, but he is also well experienced with provincial-level leadership credentials and is seen as a capable administrator. Chen climbed rapidly through the ranks under Xi’s leadership as a trusted confidant. Even in 2017, during the last Party Congress, some analysts predicted that Xi would take the extraordinary move to elevate Chen from the Central Commission to the PBSC, skipping the Politburo. While Chen was ultimately promoted to the Politburo, talk itself of emulating Xi’s career path demonstrates his meteoric rise.
Chen’s ties to Xi have been a key part of that. His relationship with Xi is not considered on the same level as mentor-protege, but they do have a strong working relationship. Reports indicate that Chen has Xi’s trust, having apparently worked with Xi during his time in Zhejiang to write a weekly newspaper column that helped to “burnish Xi’s public image”. Chen was also promoted to become deputy governor of Zhejiang during Xi’s final year there.
But Chen has other things going for him as well. First, analysis from The Diplomat suggests that he has had a “nearly perfect” political career, rising through the ranks of the CCP’s propaganda departments, provincial standing committees, and landing leadership positions in Guizhou and Chongqing. Moreover, his factional connections make him a great candidate. Chen is now the “highest ranking member” of both Xi’s Zhejiang New Army and the Guizhou Connect , an emerging political faction united around scientific innovation and techno-industrial policy. These latter connections, established during his time in Guizhou, may give him a cross-faction base of support.
Lastly, CCP political tradition usually dictates that a rising leader from the next generation is elevated to the PBSC. That way, this new member can serve one or two terms on the Standing Committee and be groomed for the presidency until their time is ready. Xi, the current General Secretary, is 69 years old and is part of the fifth generation of CCP leaders. Chen was one of the few sixth generation leaders not only in the Politburo and politically connected enough to garner a promotion, but also part of Xi’s faction. If Xi were to tap a leader-in-waiting, it would likely be Chen Min’er.
Companies were so confident that Chen would get the promotion to the PBSC that they pledged more than $10 billion in investments to curry favor with him. Yet, it was not to be. Chen remains on the Politburo, but was not elevated to the Standing Committee by Xi.
What went wrong? Two possibilities: Xi may think Chen Min’er still has more to prove. Chen lacks economic policy and financial management experience at the national level. However, this wouldn’t explain Xi’s other picks to the Standing Committee, such as Ding Xuexiang and Li Qiang (who is also part of the sixth generation, but according to CCP tradition, is too old to be promoted at the next Party Congress). The more likely possibility is that Xi doesn’t want to name any potential successor to the PBSC, no matter their qualifications or faction affiliation. ​ What it means for China’s future If Xi were to promote a sixth generation leader-in-waiting to the Standing Committee, he may be seen as a lame duck. By winning a third term, he is already on track to outlast every Chinese leader since Mao Zedong. According to some China watchers, he may even be angling to name himself the title of Chairman at the next Party Congress, a title that Mao held for life.
After enshrining his name into China’s Constitution in the 19th Party Congress and stacking the PBSC with sycophants in this round, it's clear that Xi’s political ambitions are not over. He has no plans to retire soon and does not want to be considered on his way out. By leaving no immediate successor, Xi leaves no alternative to his continued rule — no matter the cost to China’s next generation of leaders. ​

Implications of the Russo-Ukrainian War on Taiwanese and Chinese Security Prospects By: Andrew J. Harding The Russo-Ukrainian War has been a tragedy in the making for nearly a decade. In fact, I would personally know. In the summer of 2012, my family and I moved to Moscow, Russia. While attending the Anglo-American School of Moscow, I was able to experience some of the most memorable times of life. Not all memories, however, were pleasant. Beginning in late 2013 and early 2014, Ukrainian civil unrest began with the removal of then-President Viktor Yanukovych and subsequently Russia’s annexation of Crimea. The back-and-forth sanctions between the West and Russia further destabilized our living conditions and safety. Ultimately, in the fall of 2014, my family and I were forced to evacuate . As we held our breaths leaving Russia, the 2014 Russo-Ukrainian War dramatically shaped my initial understanding of international conflict.
Now, almost eight years later, Russia has brought war back to Europe not seen since World War II. On February 24, 2022, Russia re-entered Ukrainian territory by sending “peacekeepers” to Donetsk and Luhansk, bringing tensions between Russia and the West to levels not seen since the Cold War. Since then, and at the time of publication, over 250 Russian missiles have launched , over 2,000 Ukrainian casualties have been recorded, thousands of heavy pieces of equipment have been destroyed, and over 1.4 million refugees have fled Ukraine. Not only has the European security environment been radically altered, but countless lives will forever be bound by irreversible trauma. As a result, the United States—alongside North Atlantic Treaty Organization (NATO) allies—is under extraordinary pressure to respond appropriately.
As those in the West keep a watchful eye on U.S. leadership, those in the East are paying equal attention. Specifically, Taiwan and China are closely following any and all U.S. actions taken regarding the developing Russo-Ukrainian conflict. Simply, decisions made by the United States to defend Ukrainian sovereignty and confront Russia may shed light on how the United States could defend Taiwan in the face of Chinese assertiveness, including a full-scale military takeover of the island. It is important to note that the security environments and strategic values of Ukraine and Taiwan differ in many ways. Following a thorough assessment of U.S. relations with Ukraine and Taiwan, however, a key similarity overshadows potential differences: the lack of binding defense agreements gives the United States flexibility in any response to military conflict, meaning both Taiwan and China have significant interest in U.S. precedents set with Ukraine. The Taiwan Relations Act To offset the United States normalizing relations with China, officially known as the People’s Republic of China in 1979, the Taiwan Relations Act was signed into law to maintain de facto relations with Taiwan that same year, and established a complicated relationship between Taiwan and U.S. military operations. Section Three of the Act indicates that the United States will provide “defense articles and defense services” that Taiwan may need “to maintain a sufficient self-defense capability.” These articles and services will be determined by the President, Congress, and military officials. Generally, this portion of the Act has been interpreted to justify arms sales to Taiwan — a practice that has been supported and carried out by all U.S. administrations. The final part of Section Three — part (c) — creates a degree of ambiguity. Specifically, the Act states that, should there be “any threat to the security or the social or economic system of the people on Taiwan and any danger to the interests of the United States,” then the “President and the Congress shall determine…appropriate action by the United States in response to any such danger.” Given the subjective nature of the word “appropriate”, the United States allows itself significant flexibility in defining what the appropriate action would be while Taiwan and China are left guessing as to how the United States may be willing to militarily defend Taiwan. The primary driver for Taiwan’s and China’s interest in U.S. actions regarding Ukraine is the U.S. stance of “strategic ambiguity.” Strategic ambiguity is the practice of purposely lacking clarity on elements of foreign policy. This ambiguity is considered “strategic” because the policy, or lack thereof, allows a state to keep its options open to achieve its interests, and potential competitors are forced to guess what option the state may select. Strategic ambiguity is heavily associated with Taiwan because, as established above, the term “appropriate” opens the door for various interpretations that may, or may not, include direct military support. U.S. strategic ambiguity, however, has not checkmated China. Both Chinese President Xi Jinping and official Chinese government documents have heavily reduced–or even eliminated–their use of the term “peaceful reunification” with Taiwan. As China’s military continues to grow, Section Two of the Act is growing in importance. Given that the United States and its official recognition of China is dependent on “the expectation that the future of Taiwan will be determined by peaceful means” and any action “other than peaceful means” is “a threat to the peace and security of the Western Pacific area,” a Chinese military invasion of Taiwan can trigger a domino effect of U.S. military and diplomatic actions towards China. Since the Act permits the United States to “maintain the capacity” to “resist any resort to force or other forms of coercion that would jeopardize…the people on Taiwan,” any U.S. response to Chinese aggression must be carefully calculated, executed, and strategically sound. The Budapest Memorandum Shifting to the European front, a somewhat similar policy is shared with Ukraine. On December 5, 1994, the United States and Ukraine — along with Russia and the United Kingdom — signed the Budapest Memorandum on Security Assurances. The Budapest Memorandum offered Ukraine security “assurances” in return for surrendering its physical control of nuclear weapons within its territory. These assurances included the signatories respecting “the independence and sovereignty and the existing borders of Ukraine,” refraining “from the threat or use of force against the territorial integrity or political independence of Ukraine, and that none of their weapons will ever be used against Ukraine except in self-defense.” Notably, the signatories also agreed to “provide assistance to Ukraine…if Ukraine should become a victim of an act of aggression or an object of a threat of aggression in which nuclear weapons are used.” Importantly, the term “assurances” is used, rather than “guarantees.” This distinction is critical , for if the agreement included security guarantees, then the U.S. military would be obligated, by an international agreement, to defend Ukrainian sovereignty if it were to be threatened. Simply, as with the Taiwan Relations Act’s usage of “appropriate,” the Budapest Memorandum’s usage of “assurances” can be subjectively interpreted and lacks hard commitments. Unlike the Taiwan Relations Act, however, the security assurances of the Budapest Memorandum have been tested. The 2014 Russo-Ukrainian War witnessed Russia technically violate Ukrainian territorial integrity through its generally unrecognized annexation of Crimea — a strategic peninsula along the Black Sea — and support of pro-Russian separatists in Eastern Ukraine. Russia’s actions hypothetically violate the Budapest Memorandum, which is an agreement Russia is a signatory of. Therefore, the following question can be asked: what did the United States do in response? In short, the United States issued punishing economic sanctions and multiple diplomatic punishments. No direct military operations were conducted despite the “assurances” promised to Ukraine.
The 2022 Russo-Ukrainian War has flipped security politics on its head. Rather than just supporting pro-Russian separatists, Russia has invaded Ukraine, conducted deadly military operations that have killed civilians and children, is actively encircling Ukraine’s capital Kyiv, and aspires to replace Ukrainian President Volodymyr Zelenskyy with a pro-Russian regime. In response, the United States has stationed a total of 90,000 U.S. service members in Europe, including 9,000 troops in Poland, nearly 2,000 in Romania, and moved multiple aircrafts– including eight F-35 Lightning II aircraft– to Eastern Europe. Notably, the Pentagon, along with NATO member states, has maintained its position that it will not send troops into Ukraine—a stark blow for the Ukrainian military that, while impressively resisting ongoing Russian offensives, remains outnumbered and outgunned versus the powerful Russian military. Instead, the United States, NATO, and European Union unleashed the most powerful combination of economic and diplomatic punishments in history. Russia’s largest banks have been cut off from Western financial systems, including SWIFT; the Russian ruble has lost over 25% of its value and is now worth less than one U.S. cent; Western companies have cut ties with Russian companies and limited their abilities to operate in Western states; Russian oligarchs, as well Russian President Vladimir Putin himself, have seen their personal assets frozen; Western states have closed their airspace to Russian aircraft; and Russia has been banned from multiple sporting competitions, to name some of the most significant actions taken.
Despite these economic and diplomatic punishments, an unfortunate fact still exists: Russia is physically occupying Ukrainian territory and ignoring Ukrainian sovereignty. Ukrainians, as well as observers, could argue that the United States is failing to assure Ukraine of its territorial integrity, given its calculation that it is not in its best interests to militarily confront Russia, despite agreeing to “assure” Ukraine of its integrity. While the economic and diplomatic efforts are certainly necessary, as the war continues, the decision to not commit military personnel to Ukraine will likely be questioned for years to come. Taiwanese and Chinese military strategists are glued to their seats, carefully watching every U.S. move. Simply, U.S. actions to defend Ukraine may offer some insight into what the United States may do if China invades Taiwan. While the two policies considered certainly have their differences—as well as different actors involved, a key similarity is shared: the United States has flexibility in its actions to defend both Taiwan and Ukraine. The question, then, is if the United States will reproduce its actions regarding Ukraine with Taiwan. How will Taiwan and China React? Depending on what actions the United States ultimately takes, both Taiwan and China may fairly ask how such actions may impact their own security situations. Again, the security environment in East Asia in comparison to Eastern Europe is vastly different. For starters, one could argue that Taiwan possesses far more strategic value to the United States than Ukraine. From economic to geostrategic considerations, American interests would likely be impacted more severely if Taiwan were to be attacked than if Ukraine were to be attacked. Additionally, the Quadrilateral Security Dialogue (QUAD) — the military alliance between the United States, India, Japan, and Australia — is not as influential and powerful as NATO. The “Asian NATO” lacks the institutional and cultural structures that NATO possesses, and while the QUAD is certainly expanding its capabilities to militarily challenge China, the alliance has somewhat hindered member states’ economic ties to China. Finally, any armed conflict over Taiwan would be a very different experience than conflict in Ukraine. While conflict in Ukraine prioritizes land-based warfare, such as heavy armor, artillery forces, and cyber operations, conflict over Taiwan would heavily prioritize naval and air forces. This forces the United States and relevant states to have very different strategies in their respective theaters of conflict. Despite these caveats as well as many others that certainly exist, both Taiwan and China will understandably evaluate their positions.
Taiwan ​ Taiwan will likely experience a slight degree of concern with the United States prioritizing economic and diplomatic responses, and offering military aid instead of directly joining the war. Given that Taiwanese President Tsai Ing-wen ordered a task force to “study how the confrontation thousands of miles away in Europe could affect [its] longstanding conflict” with China weeks ago, Taiwan is aware that U.S. actions with Ukraine, or lack of, will impact its own security situation. The fundamental interest that Taiwan holds is that the Russo-Ukrainian conflict serves as a test of Taiwan’s strategic belief that the United States would militarily defend Taiwan during an attempted Chinese invasion of Taiwan. While Ukraine and Taiwan are of different values to the United States, the actions, statements, and overall posturing of the United States sends signals to how the United States may interpret ambiguous language when push comes to shove. Put bluntly, it is easy for the United States to publicly state its support of Taiwan, but in the face of a Chinese invasion, Taiwan will want to see U.S. action that warrants its words.
Additionally, with President Putin confirming Russia’s recognition of Taiwan as “an inalienable part of China”, following a heavily publicized meeting with President Xi, an emboldened Russia may support Chinese efforts to coerce Taiwan. As previously mentioned, Section Two of the Taiwan Relations Act is growing in importance, and should China continue to harass Taiwanese airspace, for example, Taiwan may feel as though the United States is not as heavily committed to defending the island as previously thought. During a hypothetical invasion of Taiwan, the United States would not have the same economic leverage to use against China it is currently leveraging against Russia—given China’s overall economic might. This may force the United States to either defend Taiwan militarily, or to hardly defend Taiwan at all. Should Russia have its way with Ukraine, then, understandably, Taiwan may feel very uneasy. The rapid intensification of sanctions and punishments against Russia may be a silver lining for Taiwan. The United States, EU, NATO, and allies—notably Japan—have closely cooperated with each other to collectively punish Russia. In fact, many European states have broken long-standing traditions to support Ukraine, including Germany sending military arms and Switzerland ending its well-known stance of neutrality by siding with EU allies. The United States and NATO are considered to be more united than ever before, and, should Taiwan be facing Chinese coercion, then Taiwan would certainly hope for the same degree of unity developed regarding Ukraine. While NATO would not be as involved in a Taiwan contingency, democratic states alike may be willing to weigh economic and diplomatic punishments against China. Understandably, a conflict in East Asia carries different implications than an Eastern European conflict, but the West has set a precedent for how it will respond to war. Taiwan will expect similar support—at the minimum, should it find itself in its own fight for survival.
China
Comparatively, China will likely be more receptive with what it is witnessing in Ukraine. Independent of its plans for Taiwan, China will appreciate Russia pulling the United States’ focus away from East Asia. While in the grand scheme of strategic planning, this temporary shift in U.S. attention offers little in the short term, but, with a long-term perspective, Russia’s ability to grasp U.S. attention highlights a bigger theme: the United States has to actively compete in two major geographical areas—a problem China nor Russia currently have. As the United States balances its interests and security commitments around the world, China has the ability to, at times, take advantage of a U.S. military that is stretched thin. This may turn into tempting opportunities for China. While the Taiwan Relations Act may be considered ambiguous in certain aspects, other states scattered throughout Asia do not have this same degree of ambiguity. Notably, the United States has collective defense agreements with Japan, South Korea, the Philippines, Thailand, as well as Australia and New Zealand. Meaning, states that have heavy influence over the Malacca Strait—undisputedly China’s most important trade artery, such as Indonesia, Malaysia, and Singapore, may be vulnerable to Chinese influence and cannot completely rely on U.S. military support. Thus, should the United States determine that defending states in Southeast Asia with military personnel is not worth the risk of a military confrontation with China—the policy it has adopted regarding Ukraine and Russia, then China stands to gain in Southeast Asian influence. Focusing on Taiwan, China also stands to gain. Following the United States’ retreat from Afghanistan, China immediately pounced on the opportunity to correlate U.S. policy decisions in Afghanistan to how the United States would botch any attempt to defend Taiwan. Should Russia successfully control Ukraine, then the United States’ attempts at diplomacy and economic coercion, though certainly impactful, will have not been enough, and China will make Taiwan aware. Independent of the influence strategies, the United States’ unwillingness to directly confront the Russian military would likely apply to the Chinese military. From a Chinese perspective, if the United States does not want to confront Russian infantry and artillery, then why would it be willing to challenge a rapidly improving Chinese navy and air force—especially over a territory roughly 100 miles away from mainland China? Assuming China can develop the necessary capabilities to successfully invade Taiwan, as an advisor to President Xi believes to be possible within five years, then it may become less likely for the United States to militarily defend Taiwan. Given that the United States calculated that it is not worth losing American lives on Ukrainian soil, the odds of the United States being willing to sacrifice American lives in Chinese waters may decrease in likelihood—both now and in the future. Therefore, this restraint of force in Ukraine may embolden China to increase pressure towards Taiwan, for a lack of military deterrence hinders the United States’ primary tool to influence Chinese military decisions. Finally, should military conflict over Taiwan break out, the United States’ economic tools of coercion will not only have a limited impact on China, but any usage of such tools would also likely hurt the United States more than it would hurt China. The U.S. economy is heavily intertwined with the Chinese economy—namely in strategic industries, including semiconductors, energetics, batteries, and composite materials. Should the United States attempt to use targeted economic sanctions on Chinese entities and individuals—as it is using against Russia, then not only will China likely retaliate against the United States through possible sanctions, but it could also hit the United States far harder than once thought possible through disrupting supply chains and international trade. Russia, excluding its oil and natural gas industries, does not possess this ability; hence why economic coercion is a preferred choice of deterrence. Comparatively, China, in many aspects, has tied the United States’ hands in just how far it can challenge it. While China is likely to continue its observations of U.S. actions regarding Ukraine, it is set to feel more comfortable with its attempts to influence Taiwanese affairs. The West, however, has proven its willingness to accept limited losses in an attempt to pressure Russia to end its hostilities. As previously mentioned, the United States and NATO are more unified than ever before. While China could calculate that states would rather allow it to take Taiwan than have it damage markets and supply chains, Germany’s willingness to halt Nord Stream II and EU members’ willingness to remove many Russian entities from accessing SWIFT are two examples of democratic states willing to prioritize their support for a democratic state under existential threat. China, therefore, must be cautious with any Taiwan strategy, for while China’s economic power is easily its greatest strength to dictate the behavior of other states, this calculation may lose its value, should such states be willing to accept economic hardship in return for supporting a democratic Taiwan. Conclusion The ongoing invasion of Ukraine has grabbed the world’s attention. As the thunderstorms of war have struck Europe, an overcast continues to develop between Taiwan and China. How the United States and its allies react to the Russo-Ukrainian conflict will set the standard for how it may handle other brewing conflicts. While U.S. strategy will change, based on the opponent, it is difficult to fundamentally reorient the entire playbook. Both Taiwan and China will be impacted, but, as it stands, China will likely feel more emboldened to pressure Taiwan and its surrounding areas. With President Tsai noting Taiwan’s ability to “empathize with Ukraine’s situation,” the unraveling of Ukraine may not only impact Taiwan’s empathy, but also its potential relatability.

By: Michael Cinque Creative Commons The Chinese fleet, the largest in the world, wastes away in its own harbors. These ships once carried and protected treasure bound for China, collected from all around the world. This is not some scene from the Cold War or even a Tom Clancy novel. This is the result of an intentional decision of the Ming Dynasty elite. By 1525, the once mighty fleet of 3,500 ships was completely gone; there was not a single ocean-capable ship and no new ships with more than two masts could be built (Edwards). The Chinese elites feared the development of a wealthy trader class and how international trade might disrupt the stability of the Chinese imperial system. The elite of modern China hold a different view. Today, the People’s Republic of China (PRC) is the largest ship builder by tonnage (Department of Defense, 144) and security for Chinese ships has become a key national interest. Since 2005, the People’s Liberation Army Navy (PLAN) has expanded from 216 ships to 348 ships, surpassing the U.S. Navy in 2015 (Congressional Research Service, “China Naval Modernization” 7). General Secretary Xi Jinping laid out two PLA modernization goals during his 2017 speech to the 19th Party Congress: to “basically complete” PLA modernization by 2035 and to transform the PLA into a “world class” military by 2049. One of the PLAN’s biggest steps was development of its first ever domestically built aircraft carrier, the Shandong . It was commissioned in 2019 and preceded the foreign acquired carrier, Liaoning . In addition, the PLAN prioritized the development of anti-submarine capabilities for carrier defense and has built a fleet of support ships ready for long-distance, long duration deployments, including the Fuyu -class fast combat support ships, which are specialized for carrier support operations (Department of Defense, 48, 83). These developments would allow China to project military power to protect its economic interests across the globe. In 2020, defense “overseas development interests” was written into the National Defense Law (Department of Defense, IX). In pursuit of its overseas development interests, leaders in Beijing are in the process of securing access to ports around the world. The country already uses commercial infrastructure to support its military operations abroad and its Belt & Road Initiative (BRI) is poised to secure more ports in the Mediterranean, Atlantic, and Indian Ocean (Department of Defense, 131). China already boasts a port and military base in Djibouti from which the Chinese military can project power and protect its interests and citizens in the Middle East and Africa (Department of Defense, 52). From the base, the PLA launches anti-piracy operations to protect trade routes. However, China’s wish to operate military bases at these ports is a tough sell for host nations. China has likely considered possible PLA bases in Cambodia, Myanmar, Thailand, Singapore, Indonesia, Pakistan, Sri Lanka, United Arab Emirates, Kenya, Seychelles, Tanzania, Angola, and Tajikistan, but none of these plans have materialized yet except for limited use of Sir Lanka’s Hambantota port (Department of Defense, 130-131). The development of carriers, the ships to protect and support them, and the procurement of additional military ports demonstrate that China plans to take an increasingly assertive role in forwarding its global interests. Despite all the attention given to China's first ever domestically developed carrier, the PLAN has a daunting obstacle in the way before China can effectively project power across the globe: the first island chain. The first island chain, a string of islands stretching from Vietnam to Malaysia, the Philippines, Taiwan, and Japan, presents an opportunity for China’s adversaries to strangle the PLAN’s access to the open seas. Islands are essentially unsinkable carriers from which anti-ship weapons could sink Chinese commercial and military vessels if conflict were ever to break out. As China has grown more dependent on global shipping lanes, it has increasingly feared containment inside the first island chain, especially in the South China Sea and Taiwan. This insecurity is one reason for a more aggressive Chinese posture in the last decade. The most contentious of these first islands is Taiwan. China’s goal of reunification with Taiwan, by violent means if necessary, is the primary reason for its modernization of amphibious warships, the PLAN Marine Corps, and anti-ship missiles. The development of land-based anti-ship missiles has seen special attention by U.S. military analysts. China performed its first test of the DF-21 and SDF-26 anti-ship missiles on moving targets in 2020 (Congressional Research Service, “China Naval Modernization” 12). This is of particular concern to the U.S. Navy, which wishes to deter an invasion of Taiwan. A large and modern land based anti-ship weapons system would give China an advantage in establishing naval superiority around Taiwan and throughout the first island chain. Despite this, China is not yet ready for an invasion. According to Chairman of the Joint Chiefs of Staff Gen. Mark Milley, President Xi ordered the PLA to be ready for an invasion of Taiwan by 2027 rather than the former projected target of 2035. China currently lacks the numbers of landing craft for a successful invasion of Taiwan (Department of Defense, 121). But because China is the largest ship builder, it could fill that gap relatively quickly. Department of Defense, 62. Outside the first island chain, the Chinese military seems far from capable of power projection on the scale of a great power. The number of Chinese warships compared to the U.S. Navy obscures the reality of their naval hardware. Comparing navies by tonnage examines a reality closer to what a navy is capable of. The American navy is more than double the tonnage of the PLAN because the U.S. Navy boasts more guided missile destroyers and cruisers. These ships give the U.S. better cruise missile capabilities than China’s navy, which are particularly useful in the vast Pacific and Indian Oceans. In addition, the U.S. Navy operates 68 nuclear-powered attack submarines compared to the PLAN’s six, 11 carriers to China’s two, and 31 amphibious assault ships compared to China’s seven (Congressional Research Service, “Navy LPD and LHA Ship Programs ” 2). However, comparing overall naval strength does not entirely gauge China’s ability to challenge the United States in the specific Indo-Pacific theater. American commitments spread the U.S. Navy thin throughout the world, whereas China can afford to concentrate its navy in Asia. Furthermore, while American tonnage is impressive on paper, some experts have serious doubts about whether it can be effectively deployed. The Heritage Foundation’s 2023 index for the U.S. Navy rated it “weak” due to capacity and readiness bottlenecks (Sadler). It would also be foolish to call America’s lead unsurpassable. As mentioned before, China is the largest ship builder today and has built more in naval tonnage since 2014 than the third largest navy, the Russian Navy, has in total. Even with this production capacity, China is still decades from overtaking American hegemony on the high seas. China’s geography adds an extra handicap to effective power projection. The country’s great distance from major oil producers makes its energy security tenuous. 84% of China’s oil imports must pass through the Strait of Malacca and the South China Sea (Department of Defense, 137). Chinese ships passing through the South China Sea are at risk from the land-based anti-ship weapons of a range of potentially hostile countries. Furthermore, the Strait of Malacca is a choke point that can be controlled by a number of local state actors, global state actors, and even potentially non-state actors. In response, China has been seeking land-based oil transportation alternatives in Central Asia and Russia, and is currently transitioning to more green energy production. China also possesses immense economic influence that could dissuade states from countering Chinese interests in the South China Sea and the Strait of Malacca. In 2016, Philippine President Rodrigo Duterte put aside a favorable ruling by the Permanent Court of Arbitration, which China strongly opposed, in exchange for increased trade and investment with China (Economy, 206). Duterte even made promises to move the Philippines away from military cooperation with the U.S. (Economy, 206). Thus, the goal of China’s naval modernization is to project influence as a great power, retake Taiwan, secure the first island chain, and protect its energy security. Although considerable doubts remain about the capabilities of the PLAN, China's navy grows in strength with every new ship launched to sea. However, it is important to remember that these challenges are constantly evolving as other nations react to China’s naval build up. America is already in the process of expanding security partnerships, and countering China is becoming a unifying force in American politics. Although China’s capabilities to secure the first island chain and project power on a global scale continue to strengthen, it will have to outpace the strength of the alliances forming against the rising power. The struggle for Asia’s waterways is heating up and no one is backing down — especially China. Unlike during the rule of the Ming Dynasty, the PRC is not the sole possessor of a formidable navy, and it cannot cast off the troubles of the sea again. In the modern globalized world, international trade is no longer a threat to internal stability but a necessity for it. The survival of the ruling CCP rests on the waves of the sea. Works Cited Congressional Research Service. China Naval Modernization: Implications for U.S.
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