What Xi Jinping’s Military Purge Means for China and the World

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1:19All to keep you in control however buying happens next. We're built for payments, built for growth, built for agentic. PayPal Open, built for all business. Get started at PayPalOpen.com. Bloomberg Audio Studios. Podcasts, radio, news. This Wednesday in Beijing, from the gate of heavenly peace overlooking Tiananmen Square, China's President Xi Jinping will watch the country's first military parade since 2019. So the parade itself is to celebrate the end of World War II. Bloomberg's John Liu oversees our coverage of greater China from Beijing. It's an important event for President Xi because it's an occasion to show off how much the military has progressed when it comes to modernization, which has been one of the priorities for China under Xi Jinping.

2:12The parade features tens of thousands of troops and hundreds of aircraft. It showcases China's latest weapons system, including combat drones and nuclear-capable ballistic missiles. Xi will also host a who's who of political strongmen. Vladimir Putin, Kim Jong-un from North Korea will be making a very rare trip out of North Korea to attend. And you'll have heads of state from various countries around the world. So it's a chance to show that China has friends, that China has influence. I think it's meant to portray solidarity and strength. That is for both the domestic audience, but also for audiences around the world.

2:56While China makes a show of flexing its military muscle, a Bloomberg analysis found that behind the scenes, Xi Jinping is conducting an unprecedented purge of military leaders. He's firing generals at a rate not seen since the days of Mao Zedong, who founded the People's Republic of China. There has been a number of generals removed, and it has been especially notable because those generals were appointed under Xi Jinping. Xi Jinping appointed them. And so it poses the question of why is Xi doing this? Is he able to do this? And it shows that he has a greater grasp of power than any of the predecessors that came before him.

3:36Or is this a sign of challenges to Xi's power in that some of his own men are being forced out?

3:49Welcome to the Big Tech Asia from Bloomberg News. I'm Wan Ha. Every week, we take you inside some of the world's biggest and most powerful economies and the markets, tycoons and businesses that drive this ever-shifting region. Today on the show, China's biggest military purge since the rule of Mao Zedong. Why is Xi Jinping ousting so many generals? And what does China's military shake-up mean for the rest of the world?

4:20In China, the armed forces occupy a unique place in the country's power structure. The People's Liberation Army, or the PLA, isn't controlled by the government. It's controlled by the Chinese Communist Party, and specifically by the chairman of the party's Central Military Commission. It is the military, it is control of the military, that all power is derived in China. So if you look at who is the chairman of the military commission, that really tells you who is the main leader in China at any given point. In today's China, that's Xi Jinping. His power comes from the party, the government and the armed forces.

5:03President Xi Jinping and his immediate predecessors, each of them have held three titles, that of president, head of the party, and head of the Central Military Commission, so commander-in-chief. In his role as commander-in-chief, Xi has launched a sweeping purge of the military's leadership in recent years. During his current term, 14 of the 79 generals that Xi himself promoted, That's nearly a fifth of his appointees have either disappeared from public life or been the subject of investigation. In China, those are signs of leaders who've been deposed. The purge itself, in terms of the number of actual people, is not that large.

5:45I think what is very material about it is that it's never happened in the sense that these are generals that Xi Jinping himself appointed. And when we look back, Hu Jintao, she's a media predecessor. And before that, Jiang Zemin, they did not purge or remove any of the generals that were appointed during their time in power. One of the top generals that Xi Jinping appears to have taken down is He Weidong. He's the most senior general that Xi himself appointed. And this was significant because He Weidong, about three or four years ago, was promoted over a number of other generals who should have come before him to become the vice chairman of the Central Military Commission.

6:29So it was extremely surprising, given what seemed to be Xi saying, here's my guy, I'm willing to promote him over others, to then suddenly find that General He Weidong has essentially disappeared from public. We don't have any specifics about what he's being investigated for, why he has disappeared from public. But it is very telling that within this purge that even somebody with such a close relationship to Xi would come to this fate. China's military is opaque and secretive. If a senior officer is demoted or fired, their downfall typically only becomes known when they miss a public event. And even then, it's not always clear what happened or why.

7:12But John says in Xi's purge of the PLA, a theme has emerged. One of the things that Xi Jinping has done since he's been in power is try to crack down on corruption within the military. We understand that was fairly rampant in the past. For example, there were widespread cases of promotion buying, commission buying. And we've even had stories about at the lowest level, especially in the countryside, joining the military is seen as a way to make one's way up the economic ladder, secure a relatively stable income. People were paying thousands of U.S. dollars to be able to get themselves into the military.

7:55And so these are all stories and instances of corruption that Xi Jinping has said publicly he wants to get rid of. he does not want that in the military. One branch of the military that's come under particular scrutiny, the Equipment Development Department, which is responsible for acquiring weapons. In 2023, the department issued an unusual warning. It listed eight issues it was looking into, including leaking information on projects and army units and helping certain companies secure bids. It said the military was investigating these problems going back years. And that announcement signified to a lot of people that this investigation, this corruption crackdown was going to potentially affect many people.

8:45Because if you say you're going to look back into the history of the PLA, that would suggest that there would be plenty of dirt to be found on many generals. Lots of skeletons in the closet there. Yes. John says it appears that Xi's primary concern is that corruption could undermine the PLA's effectiveness as a fighting force. The soldiers who are going to be doing the fighting want to be operating under the command of officers they trust and admire. If that structure is questioned, if the soldiers who are carrying out the orders question how the officers got to where they were, that would be really undermining for morale and potentially the ability of that force to win a conflict.

9:36And so I think that is why carrying out these purges potentially is such a priority for him. And I guess that's, even though it's unclear and opaque what's driving this completely, the fact that Xi has been able to get rid of so many generals, I mean, that must say something about his power, no? Well, I think there is a contradiction here, because on one hand, I think you could say Xi Jinping is able to remove generals and maybe even willing to remove generals that he himself appointed because he is powerful and he is intent on ridding the system of corruption no matter who it is. At the same time, I think there is a camp of argument from observers that perhaps Xi Jinping's hand is being forced in these instances, that he may not have been wanting to purge these specific generals, but because of political pressures within the party, he has had to take these actions that he may otherwise have chosen not to.

10:42And unfortunately, given the opaque nature of China's political system and especially of its military, we have a very hard time of knowing whether these purges are a sign of Xi Jinping's strength. Is he able to do this? And it shows that he has a greater grasp of power than any of the predecessors that came before. Or is this a sign of challenges to Xi's power in that some of his own men are being forced out? That, unfortunately, is extremely hard to know.

11:15For about a decade, President Xi has repeatedly told the Chinese military that it needs to prepare to fight and win wars. It's a tacit acknowledgment that it lacks the ability to do so. As a result, Xi is now pushing hard to restructure the military to make it a better equipped and more effective fighting force. What could that mean for the U.S. and for the rest of the world? That's after the break.

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13:48China has the largest standing army on the planet, with more than 2 million active troops. Compare that to the U.S., which has a smaller army, about 1.3 million people in uniform. But Bloomberg's John Liu says while the People's Liberation Army is big, it doesn't mean it's especially strong. If you look instead at capability, the United States is obviously more advanced in terms of its military capability. The United States is a global power in the real sense. It's the only nation in the world able to project military power into every corner of the globe. If it's Iran, if it's in Latin America, if it's in the Arctic, the United States has battleships, aircraft carriers, planes, submarines, satellites that can touch anywhere in the world.

14:42China does not have that. What China does have is a much more narrow focus than the U.S. military. For one, China is laser-focused on Taiwan. There's a long historic rationale for that. It ultimately comes down to the Chinese state believing fundamentally that Taiwan is a part of the Chinese state and willing to go to war to ensure that it remains that way. And so the military is designed and built to fight and win a possible conflict around Taiwan. Another priority for China's military, the South China Sea. So the South China Sea is a very important theater of operation for the Chinese military.

15:25That's because the Chinese state has a number of competing territorial claims in that area, with Vietnam, with the Philippines. And so the Chinese military wants to be able to project force and to claim and protect those claims that it has there. The other part of the South China Sea is China depends a great deal on energy exports from the Middle East, oil coming through the Malacca Strait. That oil has to come by ships through the South China Sea to get to China proper. If the United States were able to close that off, that would undermine China's capabilities in a tremendous way. The Chinese armed forces weren't designed to protect its interests away from the mainland.

16:13John says that's part of the reason that the military is going through such a big revamp now.

16:21The PLA was created as a fighting force for the Chinese Civil War. And that was a conflict that was fought primarily on land. And so in the past, the People's Liberation Army was very focused on land forces, right? Tanks, foot soldiers, trucks. That is not the military that China needs today and certainly not the military that China needs if its primary objective is to fight and win a conflict around Taiwan, not if its primary objective is to contest its territorial disputes in the South China Sea. What China needs instead is a Navy. It needs aircraft. It needs missiles. And what Xi Jinping has done since he's taken power in 2012 is he's reshaped the military to put much more emphasis on those parts of its capability.

17:15He made the rocket force its own separate fighting force on par with the army, the air force, and the Navy. So, John, we have this unprecedented purge of generals by Xi Jinping. At the same time, he's restructuring and upgrading the capabilities of China's armed forces. Should the U.S. be worried? So I think today there is no doubt that the U.S. military is the preeminent force in the world. China is second, but it's a distant second. And the United States spends somewhere around a trillion dollars on its military. That's more than the nine next largest spenders combined. And so China is no match for the U.S.

18:03globally at this moment. China, though, is growing that budget. So China's military spending is going to go up by 7.2 % this year. It's been rising by more than 6 % annually for the last few decades. The U.S., by comparison, we have Defense Secretary Pete Hegseth proposing a plan to reduce defense spending by, I think, about 8 % over the next five years. And if we look at some of the Congressional Budget Office's projections, there is actually an expectation that defense spending in the U.S. as a proportion of GDP is going to decline over the next five years or so. John says this doesn't mean that China is about to catch up with the United States in terms of military power.

18:48But he says it does reflect China's broadened outlook on the world. So the famous quote from Mao Zedong is that political power grows from the barrel of a gun. And I think in this context, that is an adage Xi Jinping and the Communist Party believes. That quote from Mazzadone reminds me of another adage, which is that anything that you can win at the negotiating table, you must first be able to win on the battlefield. And so I think we are moving, unfortunately, into a world where that is becoming more and more true.

19:34This is The Big Take Asia from Bloomberg News. I'm Wan Ha. To get more from The Big Take and unlimited access to all of Bloomberg.com, subscribe today at Bloomberg.com slash podcast offer. If you like the episode, make sure to subscribe and review The Big Take Asia wherever you listen to podcasts. It really helps people find the show. Thanks for listening. See you next time.

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