On Thursday 16th January, Prof Steve Tsang, Dr Yu Jie, Benedict Rogers and Nigel Inkster discussed the question ‘Where does China stand?’ in a panel event at Peterhouse, which I chaired. Between the director of Europe’s largest university, China Institute, a senior think tank expert on China, a prominent human rights activist and a former assistant chief of MI6, they covered a wide range of different experiences and expertise. But I was struck by how much they actually agreed upon – and by the message they were giving. Above all, their answers showed nuance and caution beyond the usual hysteria.

I was also very privileged to attend the Financial Times’ ‘Future Forum’ event on the US-China trade war. There, Gideon Rachman chaired a discussion between Dr Yu Jie, Martin Wolf and George Magnus, with an audience of business leaders contributing their own experiences. This panel agreed with that at Peterhouse on China’s current state, but - along with the fascinating perspective of business leaders - offered a more worrying view for the future than we had seen on the 16th.

China now

China’s extraordinary rise – remarkable both for its rapidity and for the heights to which it has now climbed – is much discussed in the West. Various journalists, academics and politicians have written about an inevitable and dramatic shift of political power eastwards and a ‘new world order’ emerging, centred on China. Others have prophesied a meteoric trajectory for China, with an even more abrupt collapse to follow its dazzling progress, but few have given the sort of subtle, intricate, nuanced picture to which we were treated last Thursday.

“It is worth reminding ourselves how much China has changed”

Our speakers at Peterhouse refused to be tied into either of the categories upon which so many writers have based their analysis, shying away from melodrama at both extremes.There was recognition of and admiration for the stunning success China has enjoyed. Nigel Inkster and Steve Tsang agreed that there had been, until recently, a period of at least fifteen years without a serious policy mistake. What other country can make that claim, they asked.

Yu Jie highlighted China’s newfound supremacy in many areas of technology, from Huawei to TikTok. She argues that this marks an important difference from the Cold War relationship between the USA and USSR: today’s superpowers are intertwined in ways which were simply impossible across the Iron Curtain, and China is ahead of the USA in areas where the USSR always struggled to keep up.

On the other hand, the speakers all agreed that the narrative of inevitable Chinese dominance, even in its own region, is overblown. When I asked whether they saw the growing authoritarianism of Xi Jinping’s regime as a sign of strength or weakness, the speakers’ unanimity surprised me. They all agreed that the CPC’s return to repression – stifling both dissent and debate – is a sign of serious weakness.

Benedict Rogers gave the example of his own treatment: he is constantly bemused at the Chinese government’s obsession with what he says. He receives regular anonymous abuse to his home address, an address which is not publicly available. His neighbours have been sent letters telling them to ‘watch him’. Even his mother has been sent smears about and threats towards her son.

On another level, he told us that Chinese officials, in high-level diplomatic meetings with their UK counterparts, have, on occasion, wanted to talk about Ben Rogers’s irritating campaigning rather than apparently bigger governmental issues. As well as entertaining the audience, Ben was making a serious point here: namely, that the CPC seems to take even distant foreign individual dissent far more seriously than might seem rational.

“They all agreed that war was possible, but none predicted it would happen”

He compared this very minor case to the infinitely bigger cases of Xinjiang and Hong Kong, where the speakers all agreed that growing Chinese repression belied a fundamental weakness and anxiety. Steve Tsang demonstrated the heavy-handedness of the mass internment policy in Xinjiang by noting that the number of terrorist incidents originating from Xinjiang can be counted on one hand. Nigel Inkster went further, warning that – although there was no significant Islamist threat in Xinjiang when the camps began – Xi’s brutal policies risk creating an irredemable hatred of the Han Chinese Communist authorities among the Uighur Muslims there.

This was one reason why Steve Tsang talked of a period of 15 years without a serious policy mistake – until recently. All four agreed that Xi Jinping has handled issues in Hong Kong, Taiwan and Xinjiang very badly. Tsai Ing-Wen has been re-elected as President of Taiwan in a landslide win, for which she should be thanking Xi Jinping. The polls showed her to be in serious trouble a year ago, but Chinese aggression – in the form both of incursions into Taiwanese airspace and waters, and of a clear demonstration in Hong Kong of the real meaning of their offer to Taiwan of ‘One Country Two Systems’ – consolidated support for her hardline pro-independence and pro-democracy position.

When discussing Hong Kong itself, Steve won the biggest laugh of the night with his claim that, because Carrie Lam and Xi Jinping have made the wrong decision more often than they would have done by tossing a coin to decide policy, “a donkey could have done better”.

It is worth reminding ourselves how much China has changed: Ben Rogers recalled dinners out in the open with human rights lawyers and campaigners in Bejing, all of whom are now in jail, in exile, disappeared or dead. Within the regime, power has been centralised in Xi’s grip, backed up by a personality cult not seen since Deng Xiaoping, or perhaps even Mao Zedong.

The most well-known element of this cult is the ‘Xi Jinping Thought’ mobile app, whose lessons in the thought of the country’s leader are compulsory for all.

The outbreak and spread of a novel coronavirus in and beyond Wuhan offers a biting example of the consequences of this authoritarianism, according to all three panellists at the FT’s event. Dr Yu explained that, on the one hand, decision-making has become far more centralised, meaning that regional party figures fear and avoid taking any action themselves.

At the party conference last year, it was made clear that key decisions would be made by the central leadership, not local officials. On the other hand, the disappearance of pluralism and debate within the top hierarchy in Beijing, as disagreement with Xi has become very difficult, has meant that those same regional leaders also fear and avoid reporting issues which might not fit into the narrative decreed at the top. Bad news, particularly during Chinese New Year, would not go down very well.

This has been demonstrated in sharp relief by the response to the coronavirus. Dr Li Wenliang, a medical doctor in Wuhan, tried to alert his colleagues to a possible new SARS-like outbreak in the city, advising them to wear protective clothing. Four days later, the police instructed him to sign a letter admitting that he had made “false comments” and “disturbed the social order”. They later apologised to him – but, by this time, he had himself contracted the virus. Dr Li died on 6 February from coronavirus.

“Deep financial links between the two powers make conflict much more difficult for both”

Such administrative paralysis has led some to use other means to push for change. Dr Yu highlighted, again at the FT event, that reformists in Beijing are using American trade pressure to push their own regime towards liberalisation measures that they wanted for China anyway.

At the time, this did not surprise me: it is far from the first time that moderates have used outside pressure to persuade hardliners to reform. However, this trend is deeply significant on two levels. Before Xi, debates between liberalisers and ideologues would have happened within the party up to the very top.

Now, decisions are far less collective, and debate far more limited – hence reformists have to work cautiously and indirectly. Secondly, the political table has turned: Deng Xiaoping started a long trend of economic liberalisation twinned with a narrow, controlled public sphere. But Xi has put a stop to that trend, brutally reversing the political liberalisation and restoring the hardliners at the expense of the liberals. So, debate has gone, and the policy has reversed.

Predictions for the Future

The Belt and Road Initiative – an enormous infrastructure investment project aiming to connect Europe and Asia to China – has only just got started. However, already, Bruno Maçães sees it as the all-encompassing vehicle for a new Chinese world order. In contrast, our speakers at Peterhouse were more sceptical about this project, and what it might mean for the future of China and the world.

One oft-cited example of BRI in action is the Sri Lankan port of Hambantota. Cases such as this led Rex Tillerson to call BRI a ‘Faustian pact’ whereby developing countries take on enormous debt from China, cannot repay it, and suffer a political price. In this case the price was to give China a 99-year lease on the port of Hambantota, which some fear will now be turned into a military base. But Steve Tsang pushed back against the notion that such cases are successes of China’s so-called ‘debt-trap diplomacy’. Instead, he sees the example of Hambantota as an embarrassing failure. Chinese businesses invested heavily in the area, but could not find any way to make a profit from those investments – so they took control of the port on the basis of the majority stake which their investments had bought.

The aim had been to turn Hambantota into a profitable port, thriving off trade with China: it was only when this failed that China took control of the port.

All the other speakers at Peterhouse agreed with this scepticism. On the basis of their analysis, and their indictment of the Chinese government’s counterproductive authoritarianism, a new Chinese-dominated world order is probably still some way off.

The other popular prediction among Western analysts is that of war. Graham Allison famously developed the idea of a ‘Thucydides trap’ whereby the dominant power and the rising power, competing with each other, so often become trapped in a cycle of growing conflict. At Peterhouse, the speakers refused to be drawn, although none agreed with Allison’s view of history. They all agreed that war was possible, but none predicted it would happen.

Dr Yu stressed the interdependence between the US and Chinese economies as an important buffer on conflict which did not exist between the two Cold War powers, whose economies were so isolated from each other. She, and others, have argued that the deep financial links between the two powers make conflict much more difficult for both.

However, here, the FT event offered a different – and more concerning – perspective. At this event, the focus was on the US-China trade war, and one word kept cropping up: ‘decoupling.’ This is the buzzword for the next few years in the economic relationship between the USA and China. Yu Jie talked of the prospects of two different regulatory regimes on technology; Martin Wolf predicted that, despite the Phase 1 trade agreement actually encouraging a closer coupling of the two economies through insisting that China buy more American goods, the USA would eventually settle on a strategy of serious decoupling.

Most interesting was the perspective of business leaders. Amongst those I heard and spoke to, there was an acceptance that decoupling is now the route they will have to take – meaning a deeper separation between US and Chinese branches of their companies. This prospect did not seem to concern them in terms of feasibility.

It was only at this point that I started to become concerned about how far this could go. Many foreign policy writers have argued that conflict will not happen because the two economies are inextricably linked. But, if the biggest companies and investments funds all start to decouple their Chinese involvement from the American, how inextricable are those links?