Power, Corruption, and Hubris in Xi’s China

Graham Fletcher is one of Australia’s foremost China experts. Now a nonresident fellow at the Lowy Institute, he was Australia’s ambassador to China from 2019 to 2023, having had three previous postings to Beijing. He sat down with GMF’s Robert McKinnon for a wide-ranging interview on political dynamics in China and how they affect its international behavior. 

Q: Starting with China’s leader Xi Jinping, there is broad acceptance that he will get a fourth term and maintain his grip on power. So what's the real driver of his ongoing purges? 

Xi is a remarkable figure in that he managed, very quickly after he attained the position of general secretary, to take hold of and use all the tools available to him in that position. He took on the military and the security apparatus very effectively and achieved dominance. 

He's a party man through and through with the credentials of a member of the Hong’erdai—the revolutionary second generation. He is very deliberate about wanting to preserve the regime in its current form, and he's anxious about what happened to the Soviet Union. He believes that corruption—moral, financial, and ideological, especially ideological—is a dangerous cancer that needs to be expunged at every opportunity. 

So I think he's cleaning out because he believes that it's critical that political discipline and ideological discipline are continually upheld. Now, of course, that suits him personally, because it reinforces loyalty to the leader and adherence to orthodoxy. If the investigators can come after anyone on the Central Committee [of the Chinese Communist Party, CCP], then that makes everyone in the system anxious and more obedient. 

But it's like weeding the garden: The system has enabled, almost tolerated, corruption in one way or another, for a long time. The weeds of corruption will continue to come, like it or not. Xi wants the party to survive and thrive in its current construct, so that requires ongoing anticorruption campaigns.

The pervasive fear this creates obviously has a downside in that you don't have contestability in such an environment. Xi doesn't necessarily get told the truth. That’s a danger, especially with something like COVID-19 that probably got away earlier than it should have because people weren't prepared to report the problem. But Xi knows this and is no doubt doing his best to try and find out what's really going on through other means.

Xi has taken on risk by putting himself forward as the number one leader, changing the constitution to allow him to stay in power indefinitely, and setting out his own brand of ideology that others are required to echo. It's risky taking on everybody like that. He's filled the Politburo and key positions with people that are loyal to him, but he's also annoyed many. Rather than balancing various factions, he's decided that his supporters will dominate. He's alienated a lot of people. So, even though his personal authority is still strong—if not as much as Mao’s—his dominance carries risks. 

Q: What does Xi want as his legacy and how close is he to securing it? 

I think he's setting himself up to be considered one of the great Chinese leaders: first Mao, then Xi. Deng fades a little into the background. What he did was helpful, but Xi wants to go down in history as the man who made national rejuvenation a reality. 

Reunification with Taiwan would be, I'm sure, something that’s on his to-do list. But even without that, he wants to restore China to the ranks of “great powers” so that China has international respect, and the party and regime are prosperous, successful, and accepted. 

Xi wants China to be seen as one of the world's great civilizations and a major power in its own right and on its own terms. He wants to demonstrate that China is creating a new model of human development in which Westernization doesn't equal modernization. This also underpins the idea of “whole process democracy” as an alternative to Western models. Some of this still represents a form of cultural cringe and it also causes China to protest too reflexively against assumed Western superiority. 

Now, of course, he doesn't know how long he's going to be at the top, but I'm sure he wants to stay there as long as he can. He's only 73, so it’s plausible he would be looking to a fifth term in 2032. 

Q: How will China approach rising economic challenges, given signs of a moderating growth outlook, increasing inequality, and growing international resistance to China’s manufacturing overcapacity? 

Xi is persisting with a status quo, state-led program. He's not reforming the system in the way that most people think must be done sooner or later. He's assuming the rest of the world is going to keep buying the products China is producing. 

It seems Xi’s view is that existing political and economic settings have worked well so let's keep on with the same game plan. But a manufacturing export strategy is easier to maintain when the Chinese economy represents only 5% of the world economy than when it represents 18%. You can’t keep squeezing the lemon forever. 

That said, one of the positive things about the Chinese system is that they do a lot of research and they read everything that's written by their critics. They know what the problems are and are prepared to make pragmatic adjustments when absolutely necessary. 

Ideology is important but mostly as a defensive mechanism for the system, rather than as a strict guide to what they should do in practice. Back in the 1950s and 1960s, their economic policies were dictated by what they believed Marxist dogma dictated. They don't do that now. They certainly want state control of everything that matters. But they also want to keep things working in practice. 

This dichotomy means they can still make mistakes from an economic perspective, simply because their top priority is political control, not economic efficiency, though, of course, the two things are connected. 

So they will make adjustments, and they do want to increase domestic consumption. But they're not making the very significant changes needed to deliver a rapid transition. Domestic consumption will certainly increase in the next 20 years, but they don't have 20 years. They need to do things more quickly. Or at least the rest of the world needs this. It's an urgent issue. 

There are pockets of excellence in the system. But as a totality the population is not contented and prosperous. They are anxious.

Q: How does China see the opportunities and risks of AI?

Like most countries, they see AI offering a potential bonanza but at the same time they're nervous about employment consequences. There are already anecdotes about workers being asked to document everything they do to enable an AI transition and authorities then intervening because they can't have people just being laid off en masse. Beijing is also quite concerned that AI may be dangerous in the wrong hands or if it acts independently. 

They certainly want to win the AI contest internationally, although we might see specialization in aspects of AI that China is very good at, thereby achieving a level of complementarity. But it’s unclear how it will play out. 

Internally, AI gives the surveillance state more options. It will improve China’s capacity to monitor and respond quickly to undesirable behavior or developments. It will still be a cat-and-mouse game with pockets of dissent potentially enabled by AI, but I suspect it may end up being more help to the security authorities than a problem for them. 

Q: What’s the outlook for opposition and dissent in China? 

China’s system creates disaffected groups by its very operation. There are grievances stretching back to before the cultural revolution that persist, plus newer ones—for example, from the one-child policy to land appropriations. Even when people see lifestyle improvements like modern apartments, the legal system can't effectively respond when quality failings in construction arise. 

Grievances go hand in hand with progress. Many people in China are very pleased at how things have progressed for them personally. But at the same time, there's a high level of anxiety and unhappiness. The system keeps producing both outcomes. It is able to put out fires and nip emerging problems in the bud, but eventually that becomes more difficult to sustain. 

Q: On Europe-China relations, how difficult could trade relations get and why hasn’t Beijing offered even modest concessions to Europe? 

China drinks its own Kool Aid to a certain extent. There’s a lot of confidence in Beijing that it’s only a matter of time before everyone else comes to their senses and agrees that China's success is in their interests. They see nothing wrong with swamping the world with electric vehicles when, for example, they see France dominating the world market for cognac. They see the fact that China has become more successful in foreign markets as the natural order of things. 

Beijing doesn’t seem to appreciate the angst this raises for other countries. They underestimate the problem that it's creating for them in Europe. And they don't take seriously enough the downsides of Europe getting very unhappy with China’s actions.

However, taking the kinds of steps on trade that Europe is seeking would require fundamental changes to China’s economic structure. Beijing simply can't conceive of operating in a way that the Europeans want them to. It believes it’s on a roll: Success and national rejuvenation are within sight, so let’s maintain the current settings.

China also thinks it’s only a matter of time before Europe and the United States split. They probably overestimate the depth of current political fractures. There are certainly many in Europe unhappy with Washington but it’s implausible that Europeans will prefer China’s values to those it shares with the United States. 

Q: Why has Beijing given essentially nothing to Europe on Ukraine? 

I don't think Beijing thinks it needs to do anything for Europe on Ukraine. They see Russia’s actions as a manifestation of what great powers do within their spheres of influence. And China certainly doesn’t want Russia to lose in Ukraine. It would see many downsides to such an outcome. Moreover, it’s unlikely that Beijing has enough leverage to compel Moscow to change course. 

That said, China’s unwillingness to criticize Russia’s full-scale invasion as well as its subsequent material assistance and collaboration in the UN Security Council have contributed to the poisoning of China’s relationship with Europe in ways that Beijing doesn’t fully appreciate.

Q: Turning to Taiwan: How serious is the threat of an attempt at forceful reunification?

I think it is a serious threat, and if China felt that it had a window of opportunity it would take it. 

Q: Is a move before the end of this decade really in prospect?

I don't think so, because I don't expect such a window will open in the next few years. Will it happen between now and 2049? It's not quite a 50-50 proposition, but in Beijing there is a strong conviction that they will “fix it” by then. They see force as a last resort and will try all other means first, but if those efforts fail, they believe they will have by then the overwhelming strength needed to achieve reunification by force. A war is not their preference and they prefer to achieve a satisfactory settlement through coercion.

Q: How deeply are these convictions embedded in China’s system? 

That’s hard to know. I don’t imagine many outside Beijing think about it too much. But everyone who matters in the system would agree. They see it as unfinished business from the civil war. 

Q: How does Beijing weigh the risk of a protracted international backlash? 

I think their calculus is that they’ve coped with periods of heavy sanctions previously and that achieving the larger national priority of reunification is worth the pain. 

Q: What are the implications of Xi's apparent high confidence that he can manage US President Donald Trump and that China is gradually overtaking the United States in comprehensive national power?

China thinks it has the upper hand vis-a-vis the United States. This is partly because of Marxist historical materialism and partly because they believe they’ve discovered the secret sauce of success: scientific socialism/capitalism with Chinese characteristics. There is much more hubris about this than when I was first in China in the 1980s. It may work for a time but it is hard to sustain performance under an authoritarian construct. There is no pressure release valve.

Despite this sense of inevitable superiority, China wants stability and consistency in its US relationship. Xi is likely to reiterate this at his next meeting with Trump at the end of September. I expect Xi will emphasize that the status quo is fine and urge Trump to stop taking unhelpful actions. So I don’t foresee any alarming surprises from Beijing. If there are surprises, they are more likely to come from Washington.

Q: How do you see the United States’ China policy evolving?

I don't think we've ever had such a gap between the White House and the hawkish positions of others, including in Congress. The president doesn’t seem to rate East Asia as a strategic priority. His focus seems to be on economics and trade in a transactional sense. My assumption is that the current truce won’t last; rivalry will intensify.

Q: What are the limits of the “no limits” China-Russia relationship? 

China’s support for Russia is a fairly low-cost policy. China gets cheap energy and Russia does most of the dirty work internationally that China would prefer not to have to get involved with. For example, China is quite happy for Russia to take the lead in UN Security Council veto action. 

There would be limits if Russia’s actions damaged China's own national interests, but Beijing hasn’t had to pay much of a price so far. It’s not clear how much Russia is assisting China in terms of military technology. Russia would certainly think carefully about what they're sharing with China: They want China to prevail vis-à-vis the United States, but they don't want China to get everything its own way—especially at Russia’s expense.

Putin and Xi get on well, but I don't think that further down in the Russian system there is a lot of affection for China—and they don’t like the idea that China is now the big brother in the relationship. Many probably judge that, in the long run, China might become more of a concern. 

For its part, I think China is worried about how the Russia-North Korea relationship is developing. China wants the DPRK as a dependent little neighbor that behaves itself. Moscow, however, has little to lose: It gains ammunition and troops to fight in Ukraine, and the technology and equipment it provides to Pyongyang presents little risk to Russia. Beijing doesn’t see it the same way and probably fears it could lead to North Korean adventurism. This means Beijing and Moscow are competing in Pyongyang—and the North Koreans will be happily playing one against the other. 

Q: How do you weigh the influence of China’s hegemonic ambitions on its actions?

China thinks it’s entitled to reach the top in everything and it has a lot of talented people who will enable it to get there. But it’s not interested in policing the global commons. If the United States were to pull back further from that role, I don't think China would fill the gap. China may have to take some actions out of necessity but would do so reluctantly, seeing it as a waste of its resources. It is very narrowly focused on its own interests, rather than on collective good. Beijing was very wary of Washington’s overtures during the George W. Bush administration about China becoming a “responsible stakeholder”. It feared a trap and could not accept that the US invitation might have been genuine. 

Q: Has China decided that it must have nuclear parity with the United States and does it see any risk in not having nuclear dialogue? 

I think they would say, well, why not? It is the natural entitlement of a superpower. 

It's quite interesting that, during the Cold War, the USSR was prepared to talk to the United States about nuclear arms control and risk mitigation. I'm not sure that China is yet at that position and it may never get there. They see dialogue and transparency as a disadvantage for them, and they likely assume that if the United States is advocating it then they've got to be suspicious. I'm also not sure that the notion of mutually assured destruction has the same psychological weight in China as it had during the Cold War. 

Q: Where does Australia fit into China’s world view? 

Australia is more significant than it was 20 years ago, but it is still on the edge of their radar screen. If you examine major public statements about foreign policy and the region, Australia is rarely mentioned. We are not one of China’s major relationships and don’t fit into its global narratives—which has some advantages. They see us as a bit of a nuisance, but they believe that, over time, US influence will weaken and Australia will become more malleable. 

China pays attention to the Quad [the United States, Australia, India, and Japan], but it probably doesn’t judge that it has much strategic weight. Perhaps if others joined, like the Philippines or South Korea, China might be more worried about it. Similarly, China would be concerned if other countries, beyond Australia, the United Kingdom, and the United States, were to join the AUKUS Pillar Two defense technology partnership. 

Q: What do countries get wrong when engaging with China?

Countries often don't apply the same cost-benefit and interests-based framework with China as they do with everyone else. China is impressive in many ways. It’s easy to be dazzled by the modern infrastructure in the large cities, the plausible propaganda, and the size of its market. There is more to China than that, and its many layers make it hard to understand. It’s important to be as skeptical and hard-headed in dealing with China as you would be with any other country. 

Q: What have you gotten wrong about China?

I underestimated Xi’s ability to impose political and ideological discipline. He has been able to exercise power, use the security apparatus, and control political networks more effectively than predicted, without predecessors interfering in the way that Deng faced with other Party elders. And his success is not simply through fear. He is a very capable political operator and a leader with charisma who is being followed. In many ways, Xi’s success is China’s success. He has also deftly woven classical Chinese philosophy and CCP ideology together to great political advantage.