Would China go to war over Taiwan?

This is an audio transcript of the Rachman Review podcast episode: Would China go to war over Taiwan?

[MUSIC PLAYING]

Gideon Rachman
Hello and welcome to the Rachman Review. I’m Gideon Rachman, chief foreign affairs commentator of the Financial Times. This week’s edition is about China. The Chinese military has just staged its largest ever military exercises in the Taiwan Strait. These came at a crucial time in domestic politics as President Xi Jinping prepares to extend his period in power against the backdrop of a slowing economy and a society still subject to frequent Covid-driven lockdowns. My guest this week is the US-based academic and prominent China watcher, Professor Minxin Pei. So how will China handle its growing challenges at home and abroad?

Chinese rhetoric on Taiwan has always been ferocious. But the visit to the island by Nancy Pelosi, the speaker of the US House of Representatives, provoked Beijing into an unprecedented display of military might to underline its often-repeated threat that China might one day invade the self-governing island if it ever declares formal independence. To underline its might and its anger, the Chinese military released a propaganda video tweeted out by the Chinese ambassador in Washington, and full of sirens, explosions, chanting troops and soaring ballistic missiles.

Video clip
[Rock music playing. Man shouting in Chinese. Sounds of explosions]

Gideon Rachman
President Xi can ill-afford to look weak at this particular moment in history. Later this year, the Communist party will stage a crucial congress when Xi will look to secure a third term as party leader, something that would be unprecedented since the long reign of Mao Zedong. Xi’s zero-Covid policy — initially hailed as a success — has been brought into question by the emergence of the highly infectious Omicron variant. A series of draconian lockdowns has crippled business and social interaction in major cities like Shanghai for weeks at a time. Public impatience with this boiled over at a Shanghai branch of Ikea recently when shoppers broke through a blockade as health officials attempted to seal the site.

News clip
[People speaking in Chinese]

Gideon Rachman
So how secure is Xi now? And what does he have planned for China and the wider world? To get an idea, I turn to Minxin Pei, professor of governance at Claremont McKenna College in California and author of numerous books on China, including China’s Trapped Transition. We started by discussing Beijing’s response to the Pelosi visit. I asked Minxin Pei if it was stronger or perhaps weaker than he’d expected.

Minxin Pei
It was more than I was expecting because I thought they would have reacted, but not to such an extent in terms of the scale of the military exercise and also the aggressiveness, how close it was to Taiwan. And then I think the follow-on reaction at the follow-on measures in retaliation against the US. These were totally unexpected.

Gideon Rachman
So those follow-on measures. What were they?

Minxin Pei
They cancelled a series of military dialogues. And I think in terms of managing a future crisis, these are very important. Defence dialogue, a naval incident at sea dialogue. So I thought, that’s very, very risky.

Gideon Rachman
So how do you account for the strength of this Chinese reaction? What do you think’s going on?

Minxin Pei
I would say two things. One is that they really want to demonstrate resolve. They want to show both to the Taiwanese and the Americans that you’re pushing us too far. We are at the limit of our tolerance. So this is, I think, one at the strategic level. The other is just at a very practical, pragmatic level. They just want to see how good they are. They’re conducting an exercise they’ve never conducted before involving joint forces, testing the latest hardware, and also trying to see if they can actually learn something from a very complex operation, such as a full blockade of Taiwan.

Gideon Rachman
Yeah. And I mean, I guess that one of the things that worries me about modern China, sort of viewed from a distance, is that they’ve had 20 years of a huge military build-up combined with a lot of nationalist rhetoric in the press. And it almost seems like parts of the society, maybe parts of the government, in their less rational moments, want a war to sort of test national machismo, to test the rise, you know, to demonstrate a rise.

Minxin Pei
Yeah, I’m actually not that worried because a military defeat as a result of an attack on Taiwan could be an existential defeat for the Communist party. So the Communist party is not going to gamble away its hold on power.

Gideon Rachman
So you think they’re bluffing?

Minxin Pei
Well, it’s not bluffing. I think they’re trying to show that we’re willing to fight, but don’t push us that far. What I actually worry about is an accidental conflict. And I also worry about looking forward — the situation where you have something like a Cuban Missile Crisis moment, that is, China wants to stage a military exercise on a much larger scale with much more destabilising effect on the regional security. And the US wants to challenge that, sending its own forces. And then you’re going to have a very, very delicate and dangerous situation.

Gideon Rachman
So, I mean, just briefly then talking about the American reaction, if you . . . you know, you’re based in California. If you worry about an accidental conflict, how do you think the Americans are playing it? I mean, where did you stand on whether it was a good or bad idea for Pelosi to go in the first place? And also the US is now . . . sounds like they’re gonna send ships, but maybe not an aircraft carrier. Sort of the odd calibration they’re doing.

Minxin Pei
Well, obviously, there are two aspects to this question. One is a Pelosi visit itself. I think Pelosi doesn’t care. She has a record.

Gideon Rachman
What? A record of being pro-democracy in China?

Minxin Pei
Pro-democracy, pro-Taiwan. And I think in the context of the recent deterioration, because it’s not just one visit, you have to look at really massive changes in US policy toward Taiwan. And the Chinese side believes that we have to start something here in order to prevent the US from moving further.

Gideon Rachman
And these massive changes include things like meeting Taiwanese officials in US government buildings, which they never used to do and that kind of thing.

Minxin Pei
Yeah. The framing of the one-China policy and sending military hardware to Taiwan, talking about defending Taiwan and sending Marines to Taiwan to train. So these things, again, the Chinese, of course, have a much more open-ended interpretation of the one-China policy. So they believe that the US is now hollowing out. This is actually the official Chinese description, hollowing out the one-China policy, and the Pelosi visit is on the board of some kind of official recognition. So I think the Chinese side may have some kind of ground to fear the trend, not necessarily this particular incident. So I would say that at some point they’re going to do something very similar, even with or without the visit. And I think the Pelosi visit, probably the timing is a little bit tricky.

Gideon Rachman
But they were gonna draw a line in the water or sand at some point.

Minxin Pei
At some point, yes. So that is the timing and the trend. So I’m not gonna question the wisdom of . . . 

Gideon Rachman
’Cause you also get into a tricky thing of whether it’s a wise thing or a moral thing, you know, doesn’t . . . 

Minxin Pei
Yes. Yes. Also then you raised the issue of should we actually not do things because the Chinese don’t like it? And of course, you always say that is it really smart for China to engage in such an act of intimidation?

Gideon Rachman
And of course, the other thing that a lot of people spoke about re the timing of Pelosi’s visit is that it’s August. Xi has this critical moment in his political career coming up in October, November, probably November, when the party congress is meant to give him this unprecedented third term as president. How much do you think that will have played a factor in his thinking?

Minxin Pei
I think that definitely played a role in raising the stakes because, of course, the Taiwan issue is actually elite politics issue. A leader who appears to be impotent will be attacked by his colleagues because this is an issue on which a top leader, even a powerful leader like Xi Jinping, can actually be vulnerable. So that is one. And I think cynically you might say that the right kind of crisis, the right kind of tensions may actually benefit Mr Xi because he can show that he’s strong, he can rally the nation. He is defending Chinese national honour. So in a sort of a strange sort of way, Pelosi may actually have helped Xi Jinping.

Gideon Rachman
Because the sort of consensus opinion seemed to be earlier this year that of course, Xi was gonna be confirmed. He would get his third term, go on. Then I think with the problems with the Shanghai lockdown and so on, you began to hear murmurs saying, well, maybe it’s not a 100 per cent certain.

Minxin Pei
My view is that 99 per cent certain. (Chuckles) He’s still gonna get his third term. The immediate problem concerns personnel choices. That is, obviously he’s lost a great deal of political capital as a result of the zero-Covid approach because the impact on the economy is devastating. And then the perception that this policy is now counterproductive. To be sort of fair, this zero-Covid policy worked until it stopped working. So initially, I think Mr Xi and his colleagues had a lot to be proud about, and now they are putting out one fire after another as a result of Omicron as we speak. Probably the Communist party top elites are meeting Beidaihe — this seaside resort — to put the final touches on the next part of their standing make-up. His problem is what kind of concessions he needs to make in terms of personnel appointment.

Gideon Rachman
Explain. I mean, when you say concessions, who is he making concessions to?

Minxin Pei
Really important is the position of the prime minister. Premier Li is term-limited. The president is not term-limited (laughter) but the premier is, so the premier has to move to a different position. And originally the rumour mill claimed or said that Xi would like to have the Shanghai party boss to be the premier. And obviously after the Shanghai lockdown, that person’s political fortune has waned. So who would be appointed to that position? So I think they are now really talking about the position of prime minister, the executive premier and maybe one or two other people.

Gideon Rachman
So how complete is Xi’s control of the Communist party? I mean, he sent some very important people to prison, you know, in the anti-corruption drive and so on. So that looks like a strongman leader who really controls everything that he surveys. But maybe not, you’re saying?

Minxin Pei
Well, I think there are two kinds of power. One kind of power is power of direct control, the kind of power that can protect your personal or political security. On that dimension, he’s completely in control. That is, controls the propaganda. He controls the military. Now, the domestic security apparatus and, of course, the anti-corruption agency. I think the other dimension of power is the power to get things done. The power to motivate. The ability to incentivise, to get your policies implemented at the local level. On that I mentioned, I think there’s a huge question mark.

Gideon Rachman
And so what’s he unable to do? What kind of policies are stagnating then?

Minxin Pei
I think the recent scandals about China’s semiconductor drive, when China has invested more than $100bn in semiconductors and right now they discovered that a lot of money had been stolen by state-owned enterprise. And also his dream, his vision of having common prosperity.

Gideon Rachman
Which means essentially getting rid of extreme poverty in China, yeah?

Minxin Pei
Not only that, he has another initiative called Precision Poverty Relief, and as that campaign supposedly has been concluded, but common prosperity means reducing income inequality. And one of the key measures is the levying of a property tax. It turns out to be impossible because that tax is going to hurt the middle class, who owns a lot of property, and then officials, because Chinese officials also own a lot of real estate. So that kind of policy is very difficult to implement.

Gideon Rachman
Yeah. And I mean, another thing that struck me certainly thinking about this controversy about zero-Covid and the two-month lockdown in Shanghai, which is obviously incredibly punishing and there are other lockdowns all over the country, was that it slightly surprised me that they hadn’t managed to vaccinate all the old people in China. Because my outside image is this is a state which, whatever else you can say about it, is controlling, gets things done. How’d that happen?

Minxin Pei
I have not really looked into this, but based on what I’ve read, it seems that made a very important miscalculation at the beginning because they wanted to open schools. So they prioritised the vaccination of young people and neglected the more senior citizens. And another thing is that there are a lot of doubts about the efficacy, safety of Chinese vaccines. And if you’re 65 and older retirees, and they have some doubts, it’s pretty hard to force them (laughter) to get the vaccination.

Gideon Rachman
And what do you think the psychological impact on China, I mean, its economy, its relations with the outside world? The fact that as a result of the zero-Covid policy, basically travel in and out of China’s become, if not impossible, nearly impossible for the last two years and more.

Minxin Pei
Absolutely. I’m glad you brought up this question. Other than students who can still travel back and forth, there were really not many Chinese ordinary citizens who can travel freely. So as a result — and we’re at this such crucial moment in history — they don’t know what is going on outside. For example, at the beginning of the pandemic, western democracies’ response to Covid was just described as unmitigated disaster. And if they don’t come out and they don’t see how actually successful now, how normal life has become outside China, they will have very serious doubts about the right approach of their government.

Gideon Rachman
Yeah. Coming back to this third term thing, I mean, how much of a turning point do you think it is for China that you have a president and a party leader? I mean it’s the party leadership actually that will be confirmed in November and then probably the presidency next year, actually abolishing term limits and staying on. Are we returning to sort of personality, cult-style politics?

Minxin Pei
Oh, absolutely. I think this is a very, very critical moment for the Communist party itself, because after Mao died, Deng Xiaoping tried to do everything he could to prevent the return of a Mao-like figure. And now reality shows that his efforts actually did not succeed because he did not build a strong enough institutions to ensure that won’t happen. So I think what a lot of people worry is not about the third term, it’s really about the fourth term. I think this is an issue Mr Xi has to deal with because the party was saying, well, give us some kind of indication that this is truly your last. I think besides the personnel issue, this is going to be very sticky point.

Gideon Rachman
And what about the building of this image of Xi? I mean, the creation of this Xi Jinping Thought, putting it in the constitution, making Communist party members study it every day. I mean, it seems to me a lot of people must have a lot of private doubts about that because, you know, there are highly educated people in China. It’s a bit kind of humiliating to (laughter) have to, you know, parrot all this nonsense.

Minxin Pei
Yeah, but then people in China very pragmatic. They can live in this bifurcated world. They know that one side of politics is about ritual. And that ritual you have to perform. Whether you believe it or not is irrelevant because this is part of politics in China. And then the other part of politics is substance, is reality, is pragmatism. And so you can envision the same official who proudly displays his phone to you to show that he’s done his morning exercise in reading Xi Jinping Thought. Then he turn around and he can talk in very pragmatic terms about his daily challenge.

Gideon Rachman
That’s very interesting. And I suppose western politicians are constantly saying things they don’t quite believe in. But the ritualistic element of Chinese politics and down to the repetition of key phrases.

Minxin Pei
Yeah, very robotic actually, rote memory. It’s very different from the Maoist era. I grew up in the Maoist era. In those days, people actually genuinely believed in that kind of political rituals, the substance of Mao. So today we have to discount a great deal whether Xi Jinping Thought has actually been genuinely embraced by the party members, by officials and by ordinary people.

Gideon Rachman
What about your colleagues in the academic world? I mean, university professors, a lot of whom have been lured back because they’re offered great packages, particularly in the sciences and so on, but then they find themselves in an increasingly illiberal political environment. How did they cope?

Minxin Pei
They just shut up, which is actually a huge loss both to the outside world that we now know a lot less about what they think. I have friends whom I desperately would like to meet. It’s not safe to exchange views through WeChat, which is the most common form of communication with them. They don’t talk about China. They don’t want to take any risks.

Gideon Rachman
And now they can’t even leave China.

Minxin Pei
They can’t leave China. I think this is really a very, very sad situation.

Gideon Rachman
Because there were sort of liberal, critical liberal ideas were sort of developing in the key universities in Beijing and so on, pre- the Xi era. But I wonder what’s happened to those people.

Minxin Pei
That space has completely closed. A few have lost their jobs. Then the smart ones simply shut up. They don’t write. They don’t talk. They are honest enough not to even perform, participate in those political rituals.

Gideon Rachman
And what about Xi himself? What do you think his thinking is? Is he somebody who aspires to be a new Mao? I mean, maybe the Cultural Revolution left an imprint on him.

Minxin Pei
Yeah, there are aspects of Xi that certainly recall Mao, but I don’t think in his heart he wants to be another Mao, because Mao obviously was a very complex sort of a tyrant. On the one hand, Mao’s sole concern was his personal power. I mean, that obviously you can see that in Xi as well. But Mao also had this obsession with rousing the masses. Mao distrusted bureaucracy. And you don’t see that in Xi. Xi actually is obsessed with stability. Mao thought unrest is a great thing. So one of Mao’s slogans was, “The world is in chaos and that is great”. You will never hear that from Mr Xi.

Gideon Rachman
Right. So that’s interesting. So Mao was a man who loved turmoil and Xi is somebody who’s addicted to stability, which is very characteristic of modern China. So why is he prepared to risk that stability by confronting the United States?

Minxin Pei
Well, I think initially he probably thought his predecessors were very risk averse and he thought, well, there were a lot of boxes that need to be ticked. And because of this concern of antagonising the US, those boxes were not ticked. The South China Sea, for example, Senkaku Islands and Chinese influence in the developing world. So he wanted to tick those boxes and he thought the US, in those days, was still bogged down in the Middle East, in south Asia. And the US domestic politics was so divided, he thought, well, Uncle Sam would be too preoccupied, too distracted to deal with China.

Gideon Rachman
And to some extent, he was right.

Minxin Pei
He was right. But then he didn’t expect that Trump would be in the world. Initially, Trump really did not care that much about those strategic things, but Trump kept up one thing, that’s trade deficit. And he decided to confront China over the trade deficit. I think today, I wouldn’t say he’s deliberately picking a fight. When you look at Chinese overall strategic posture, my conclusion is that it’s in a period of retrenchment.

Gideon Rachman
But on the other hand, you know maybe it was bad luck, bad timing. But he has this meeting with Putin on February the 4th where they sign this joint statement. And I think that was extremely damaging to China, if he doesn’t want a confrontation with the United States. Because in America’s mind, that’s sealed the idea that there’s this access between Russia and China.

Minxin Pei
Yes, I interpret that meeting quite differently because I think at a strategic level, he and Putin both concluded that they now needed each other because I’ve categorised the Chinese-Russian relationship as the one that began as a relationship of convenience. Now it is a relationship of necessity because they now truly need each other. Because both feels that the US is breathing down their necks and that they have to hand together or hand separately. Then I think the big question is, is they actually know what Putin was up to? The Sino-Russian strategic alignment has a lot of upside for both Putin and Xi in the medium long term. But the short term, if Putin decided to invade Ukraine and this relationship actually would be placed on enormous stress. And I always see that this relationship is an enormous stress because of the invasion, because no limits turned out to be not true. There are a lot of limits to that relationship.

Gideon Rachman
So that Xi continues, you say 99 per cent he’s there. But how far do you think he is delivering on his promises for China? I mean, I remember the only time I’ve met him was in 2013, and that was right at the beginning. And he sets out this idea of, you know, growing at 7 per cent a year, he predicted, and eradicating poverty and making China — a rather kind of moderate phrase — a moderately prosperous nation. Is he delivering?

Minxin Pei
Well, I think if you look at growth numbers, certainly for the last 10 years is not as good as the previous 10 years before Xi came to power. But of course, you can cite the problems created by his predecessor — overleveraging — and say, well . . . 

Gideon Rachman
And it’s harder also when the countries get richer to keep growing at that rate.

Minxin Pei
But I think the real problem is productivity growth, because productivity growth in the last 10 years has collapsed. Under Hu Jintao, the first decade, China’s productivity growth every year was like 3 per cent, now it’s down to 1 per cent. So that’s really a very scary development. The other is how much innovation has really happened. So the economic record clearly is a very mixed one. I think the biggest problem that has occurred in the last 10 years is really the changing mindset, because prior to 2012, the government was more or less hands-off in terms of the private sector. Last couple of years we saw this very dramatic crackdown on the private sector and the confidence of the private sector has been fundamentally shaken. So going forward, the challenge for Xi next 10 years is going to be unimaginable. He came into office with this very strong wind at his back. The relationship with the outside world was too good, entrepreneurs who were optimistic, China was optimistic and a lot of economic momentum. Now, next 10 years, he’s facing a completely different world outside. And internally, the economic problem China faces will be even worse, that is, how do you actually switch gear, turn away from global integration, relying on market to relying on the state, rely on self-sufficiency? Honestly, I think even with our economic training, I know that that is a much more difficult task to perform.

Gideon Rachman
Listening to you, I mean, it seems to me you can pinpoint a number of things that have changed really significantly in the Xi years. Firstly, the stuff we talked about, about the creation of a personality cult and extension of his period in office. Secondly, the destruction of this good relationship with the outside world, a relatively positive relationship. But the third you just highlighted, and maybe . . . 

Minxin Pei
Yes.

Gideon Rachman
It’s the most important, was this attack on the private sector and the iconic figures in Chinese business, Jack Ma. And suddenly he’s almost a non-person. If people see him in public, it’s huge news. They knocked trillions off the valuations of the big . . . 

Minxin Pei
Two trillion! (Laughter)

Gideon Rachman
 . . . companies which, you know, if you are following the Japanese model, these would have been the standard bearers for China, you know, the Sony’s, the Mitsubishi’s. And yet suddenly he’s turned on them. So why did that happen? And is it reversible?

Minxin Pei
Yes, it is reversible, but it’s unlikely (chuckles) to be reversed. I think why it happened, I think it’s just one word, because these companies or the private sector as a rule, has become too powerful for the party to feel comfortable about. So it’s really an effort to reassert the control of a Leninist state over this wealth creation engine. And now the engine is sputtering.

Gideon Rachman
And that may be the biggest flaw, really, in the whole Xi model . . . 

Minxin Pei
Obviously, one of the biggest concerns business people have, China watchers have, that can you actually make China grow, with a state is the model? History shows you can’t. History also shows that China has grown in the last 40 years mainly because of the private sector.

[MUSIC PLAYING]

Gideon Rachman
That was Professor Minxin Pei ending this edition of the Rachman Review. Thanks for listening. Please join me again next week.

[MUSIC PLAYING]

This transcript has been automatically generated. If by any chance there is an error please send the details for a correction to: typo@ft.com. We will do our best to make the amendment as soon as possible.