I wish I did not have to write my new book, The Avoidable War: The Dangers of Catastrophic Conflict between the U.S. and Xi Jinping’s China. I am just old enough to remember marching as a small child in our annual ANZAC Day parade — the Australian equivalent of Memorial Day — in our tiny country town with my father, who had fought in World War II. I also remember marching beside men in their seventies, by then a little unsteady on their feet, who had fought back in World War I. One of them, my father confided in me, still suffered from shell shock.

There was nothing inevitable about the Great War from 1914 to 1918. It came about because of the flawed decisions of political and military leaders in July and August 1914. Those decisions cost approximately 40 million lives, including 117,000 Americans and 60,000 Australians. The decisions about how to punish the losers of that war set the fuse for the next global conflagration, one so horrific that when it was done, as many as 85 million — approximately 3 percent of the world’s population — lay dead.

When I think of the collective killings of the last century, I fully acknowledge that my mindset forces me to make every effort to do whatever can be done to avoid yet another episode of global carnage on an industrial scale. Even before the war in Ukraine, the 2020s were poised to be a decade of living dangerously, and now Russia’s invasion of Ukraine has underscored the crisis looming in the background: the changing balance of power between Beijing and Washington. 

China has deep strategic interests in the long term importance of the Russian Federation. But less fully understood in the collective West is the extraordinary personal chemistry between the two authoritarian, great men of history: Xi Jinping and Vladimir Putin. The bond between these two men is unique, and we underestimate it at our peril. Indeed, understanding their worldview — especially their disdain for the order which the United States represents — is fundamental to any analysis of the likelihood of broader war and how we might avoid it.

This is why a substantial portion of my book is devoted to defining Xi’s core priorities, which will likely be the main lens for Chinese policy making in the decades ahead. I don’t know Putin personally, but in my role as prime minister of Australia, I have met with Xi Jinping and other senior Chinese leaders many times. I have been a student of China since I was 18 years old, beginning with my undergraduate degree at the Australian National University, where I majored in Mandarin Chinese and classical and modern Chinese history. I have lived and worked in Beijing, Shanghai, Hong Kong, and Taipei through different diplomatic postings and have developed many friendships across greater China.

Throughout my many trips to China over the last 40 years, I have been struck not only by the changes in the objective balance of power between the U.S. and China, but also by the changing character of China’s leadership. In the first decades of post-Mao reform, from the 1980s to 2012, when Xi Jinping became leader, Beijing hewed to the maxim set out by the architect of reform and opening, Deng Xiaoping, as a guide to the PRC’s actions in the world: “Hide your strength; bide your time; never take the lead.” Xi has consigned that maxim to oblivion.

Consider his relationship with Putin. The mainstream CCP certainly wants a strong relationship with Russia; they don’t want border issues, for instance, and they do like to see Russia giving the U.S. grief. But with the joint statement professing “no limits” to China’s friendship with Russia, Xi Jinping went further than where China’s center of gravity would normally be on this issue. 

As China has become far more powerful, Xi is removing the mask of modesty and restraint that China’s leaders had carefully crafted for themselves over the previous 35 years. Such evasion is no longer required when, as Xi told a gathering of central and provincial party leaders in 2021, “time and momentum are on our side.”

Still, such momentum risks Xi losing his sense of balance. He is certainly, for instance, ahead of his skis when it comes to Putin. While this does not mean Xi will fall, it does mean that if Putin fails in Ukraine, Xi will have a more difficult time steadying himself. Indeed, although Xi Jinping sits at the apex of the Chinese political system — his influence permeating every level of party and state — it is important to take stock of where Chinese politics stands right now, at the dawn of this most crucial decade. 

It is particularly important to delve inside the opaque world of internal party politics in the lead-up to the Twentieth Party Congress scheduled for late 2022. The reason for this is straightforward: the politics of the Politburo, the Central Committee, the military, security, and intelligence apparatus — and, to some extent, the distilled opinions of China’s elder statesmen — will shape the outcome of the congress on three consequential questions. Will Xi Jinping secure reappointment for a record third term through to 2027? If so, what does that mean for him continuing as China’s paramount leader beyond 2027? Will his future powers be increasingly untrammeled as a result?

My argument, based on the evidence to date, is that the answer to all three of these questions is yes, but Xi’s current relationship with Putin, China’s recent struggles containing Covid-19 and its lagging economic prospects represent meaningful caveats. 

XI, THE MASTER POLITICIAN

Xi Jinping’s political modus operandi, when confronted with a challenge — either foreign or domestic — is to double down: to either crash through or crash. Unlike most of his recent predecessors, Xi is a calculated, albeit not a reckless, risk taker. His critical skill is to identify a political or policy vacuum and to fill it before others do. He is a master tactician in building political momentum across the cumbersome internal machinery of the CCP by deploying key personnel to critical positions; mobilizing the party’s propaganda apparatus; and anchoring his worldview in a single, all-encompassing ideological framework in order to convince the party and the country that they are critical parts of a historical, righteous, and “correct” cause. 

Xi is also his own master class in internal party politics, possessing a ruthlessness not seen since Mao in dealing with political opponents. To take but one example, the anti-corruption campaign he has wielded across the party has helped “clean up” the country’s almost industrial levels of corruption. It has also afforded him the additional benefit of “cleaning out” — via expulsion from the party and sentences to life imprisonment — nearly all his political rivals and critics. Under Xi, more senior Chinese leaders have been imprisoned than under the rest of his post-Mao predecessors combined. There is now no credible competitor of comparable political stature left standing in the inner sanctums of Chinese party politics — or, at least, none that we know of.

[Xi Jinping’s] critical skill is to identify a political or policy vacuum and to fill it before others do. He is a master tactician in building political momentum across the cumbersome internal machinery of the CCP…

However, it is important to understand that the reason Xi continues to resort to these harsh measures is because he is acutely aware that the radical changes he has brought about in China’s overall political and policy direction have earned him a powerful group of enemies. Each of the leaders who has been purged has an extensive network of friends, family, and supporters. Although Xi has been meticulous in taking out his enemies’ protégés and camp followers or intimidating them into silence, or at least inertia, they nonetheless make up an informal network of the politically alienated. 

For any political opposition to effectively mobilize against Xi Jinping’s reappointment in late 2022, there would need to be a series of catalytic and catastrophic events. These events could take a number of different forms, but we’re already seeing hints of a few of them, including a faltering economy, natural calamities (such as pandemics) and a military defeat, large or small. 

The recent surge in Covid cases in China — resulting in Shanghai, China’s largest city, going into lockdown — is particularly interesting given its potential to destabilize the party’s leadership. Throughout Chinese history, disasters were commonly taken to mean leaders had lost the “mandate of heaven,” which explains why the internal politics of China became particularly intense in the first half of 2020 following the eruption of Covid-19 in Wuhan and the leadership’s initially tepid response. It also underscores the party’s acute response to any foreign attacks regarding the Chinese origins of the virus for fear this would become part of the country’s internal discourse, in addition to an international loss of face.

In Xi’s case in particular, the critique was that because of his feared status as an unforgiving and dictatorial leader, senior provincial officials hid the news of the pandemic from Beijing in its early and most critical weeks, hoping to contain it locally rather than following long-agreed protocols mandating immediate national and global notification. In adopting his zero-tolerance strategy toward the virus itself, Xi then quashed all domestic dissent — all the while deploying the party’s propaganda apparatus to ensure that any international criticism was aggressively rebutted through his global team of wolf warrior diplomats, even seeking to sow doubt as to whether the virus actually originated in China in the first place. Now, Shanghai’s surge of Covid cases threatens to highlight the limits of Xi’s “Zero Covid” strategy.

Another cataclysmic event would be a military defeat that undermines Xi’s national political narrative about “the rise of the East and the decline of the West.” Although this narrative carries with it the assumption that China would prevail in any direct military contest, it would still not redound well for Xi if Putin fails in Ukraine. Xi’s decision to militarize his presidency (wearing battle fatigues, undertaking frequent troop reviews, and his constant public references to China’s ever-growing comprehensive national power) means that China’s association with a defeated Russian military would be embarrassing while China’s inability to win an outright victory in any armed confrontation with the U.S. or its allies would be politically lethal. 

This is one reason why I refuse to buy the argument that there is any sense of imminence regarding Xi Jinping taking military action against Taiwan. Although Xi may be forward leaning in dealing with U.S. and Japanese naval and air incursions into what he describes as Chinese territory, he is unlikely to allow any incidents to escalate to a point of no return — unless convinced that there is no risk that Chinese forces would not prevail or that the domestic political cost of blinking and backing down is simply too great.

Lastly, the possibility of any self-inflicted economic crisis, decline or even financial collapse represents the most pressing political threat hanging over Xi Jinping’s head. The party has only relatively recently rebuilt its domestic credibility and political legitimacy in China following the country’s near economic collapse of the Great Leap Forward and, later, the Cultural Revolution. That’s because in the decades after 1978, the party finally lifted people’s living standards in what had long been an impoverished socialist paradise. To undo the unspoken social contract between party and people (i.e., political control in exchange for economic prosperity) in any way would reflect poorly on Xi.

Indeed, Xi’s greatest political liability not just in 2022 but for the next decade is the economy, which is not his policy strong suit. In Xi’s vision, his focus on common prosperity by reducing income inequality, achieving national technological self-reliance and, most importantly, embracing state leadership over the market will simultaneously win over the people to his side, reduce China’s vulnerability to external pressures and provide a robust new driver for the sustainable growth of China’s “real economy” far into the future. 

Xi’s greatest political liability not just in 2022 but for the next decade is the economy, which is not his policy strong suit… Casting aside the proven growth engine of China’s recent economic transformation — the private sector — in favor of more centralized control of the economy risks stunting China’s growth momentum at the most critical time.

This is, however, highly optimistic. Casting aside the proven growth engine of China’s recent economic transformation — the private sector — in favor of more centralized control of the economy risks stunting China’s growth momentum at the most critical time. Indeed, private fixed capital investment is already lagging, reflecting declining levels of private-sector confidence.

Xi’s gambit, then, is best understood as fundamentally a political one, meant to strengthen both his and the party’s grip on power. He has limited feel for financial markets or the complexities of macroeconomic management, and his recent major adjustments to China’s domestic economic growth model — including the reemphasis of the state over the market and his new restrictions on the Chinese private sector — pose a real political danger to his leadership. 

The era of high growth in China, after all, is over. Even ahead of Xi’s crackdown on the private sector and the Evergrande crisis, a consensus had emerged among global economists that China’s economic growth will probably slow to around 4 percent by 2025. This forecast deceleration also reflects China’s aging population, declining workforce, weak productivity growth, a negative trade environment and high levels of official debt. Added to this is the as yet unknown impact of Xi’s macro economic pivot at the potential expense of China’s hitherto remarkable culture of private-sector dynamism. 

For years, economists have warned that only increases in total factor productivity can ultimately save China from the middle-income trap and that this increase can only come from an economy with less state involvement, not more. The next decade is likely to determine once and for all whether this hard-won collective wisdom proves still to be true — or whether China really is sui generis in the future efficacy of its new, but still unfolding, economic model. 

If Xi Jinping is fully aware of the economic policy gamble he is taking by changing the model in the midst of unfolding geopolitical risk, it may induce a level of caution about adding further risks to his overall strategic calculus. But, if he is unaware — which may be the case because of his reported intolerance of official doubt, caution and negativity, compounded by his lack of familiarity with the technical granularity of the economic policy brief — then China may embark on a decade of growing international assertiveness at a time when its domestic economy is weakening.

XI JINPING’S NATIONALISM

The balance of probabilities suggests that Xi Jinping will be reappointed comfortably in late 2022. At the same time, we would be foolish to ignore the political headwinds that are still being generated. Xi’s political methodology for dealing with such headwinds is to push back hard against them, threatening the introduction of even more intense restrictions coupled with individual retribution against those whom the system happily calls troublemakers.

When it comes to dealing with political and social unrest, however, another significant quiver to Xi Jinping’s bow is his ability to call on the deep reserves of Chinese nationalism to reconsolidate his political position. Indeed, nationalism is becoming a core pillar of both the party’s and Xi’s personal political legitimacy and has become a central focus of the party’s vast propaganda apparatus. Nationalism therefore becomes a dangerous additive to the already dangerous decade that lies ahead. 

As we think about the China of the 2020s, beyond the internal dynamics of the 2022 Party Congress and Xi Jinping’s reelection, the fluctuations in its economy, and the greater controls imposed on Chinese society, we also need to understand that Xi’s China will be increasingly nationalist. This will have profound implications for how Beijing navigates its already complex external relationships, particularly with the United States.

Of course, in recent years, the principal foil against which national sentiment is deployed in China is the United States. At one level, Chinese nationalist positions reinforce some of the analysis put forward by the party, claiming that American national power is, by and large, spent. Chinese news coverage in recent years has focused on the dysfunctionality of the American democracy, the inability to contain Covid-19 (especially under the Trump administration), and other recent manifestations of declining American power, including the fall of Kabul in August 2021. 

In the Chinese nationalist take, all of these are indicative of the overall decline of the West, especially the United States. This line of substantive analysis and public presentation by the Chinese propaganda apparatus is likely to continue into the future, although with varying degrees of intensity to accommodate the political circumstances of the time. But in doing so, the regime’s principal audience is domestic, and its principal objective is its political legitimacy.

China’s traditional foreign policy establishment is weaker than ever before, as the locus of international policy decision-making… has been progressively relocated to the party center and Xi’s powerful personal office. Therefore, nationalist sentiment as a tool of domestic political legitimacy building is also likely to play a larger role in strategic decision-making…

If we accept that official nationalism will be allowed to wax and wane as needed in Xi Jinping’s China, the question arises whether Chinese nationalism will also become a more potent force in pushing the party toward more hard-line policy positions toward the United States that the party would not normally take. There is no evidence that this has happened in the past, mostly because the official bureaucratic class in China has historically been strong enough to resist any such domestic political impulse.

But China’s traditional foreign policy establishment is weaker than ever before, as the locus of international policy decision-making (as with all areas of policy) has been progressively relocated to the party center and Xi’s powerful personal office. Therefore, nationalist sentiment as a tool of domestic political legitimacy building is also likely to play a larger role in strategic decision-making — often in defiance of classical foreign policy logic — than has been the case in the past. It is perhaps too crude to say that Chinese foreign policy is simply becoming the prosecution of Chinese domestic politics by other means, but there is increasing resonance in that proposition.

Three fundamental sources of political legitimacy remain for the CCP: Marxist-Leninist ideology, economic prosperity, and Chinese nationalism. If all three work together seamlessly, the party’s overall legitimacy will be high. But the truth is, despite the party’s concerted efforts, they don’t. 

First, however powerful a tool Marxism-Leninism may be as a legitimizing and disciplining force within the party, such ideology will not of itself provide a sufficiently legitimizing force within the broader body politic to comfortably sustain either the party’s or the leader’s long-term political standing. Second, if, for whatever reason, economic prosperity falters during the decade ahead, Xi would have no alternative but to revert to the coercive instruments of party power to maintain political and social control. Third, if both the ideological and economic underpinnings of party legitimacy become unstuck, nationalism, if effectively harnessed, could potentially become the most important legitimizing force in Chinese politics for the future. Furthermore, from the regime’s perspective, it could reduce (but not remove) the need for purely coercive measures to maintain effective political control.

For these reasons, if Xi or the broader CCP leadership were to come under serious domestic pressure as a result of a failing economy, compounded by a failing ideology that had led Xi toward decisions that brought about that economic decline in the first place (through a return to greater party control), nationalism would become the only political card left to play in the party’s legitimacy pack. 

We do not know if the Chinese economy is going to falter. On the balance of probabilities and given the historical experience of Xi’s economic team in dealing with previous crises (in both 2008 and 2015), they will likely manage their way through. But contending with a leader as politically powerful and as ideologically determined as Xi Jinping under such circumstances may become more problematic than in the past. 

These, then, are the dynamics that present themselves for the decade ahead. Nationalism is likely to add a new and potentially more volatile dynamic in the way that Chinese political elites respond to the United States in the future. And Chinese foreign policy will therefore not be as predictable or rational in American eyes as it has been in the past (i.e., in rational pursuit of what the West would define as China’s abiding national interests). Chinese nationalism, therefore, looms as a new and potentially dangerous wild card for the wider management of the U.S.-China relationship during the 2020s.

While some observers may question the ability to manage this relationship at all, my view is decidedly more optimistic. Politicians have agency, after all, and with realists in both the White House and in Beijing, a “managed strategic competition,” as I call it, may be able to help us navigate the decade of living dangerously. Indeed, my mission in life is to get through this decade.

Excerpted from The Avoidable War: The Dangers of a Catastrophic Conflict between the US and Xi Jinping’s China by Kevin Rudd. Copyright © 2022. Available from PublicAffairs, an imprint of Hachette Book Group, Inc.

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