What happens to China now that autocrats are bad news?
What happens to China now that autocrats are bad news?
Putin's personal Covid restrictions, domestic Russia reactions, semiconductor companies and the EU's future relationship with China
Next in our series on China in the context of Russia’s invasion of Ukraine, ChinaTalk speaks to Chris Miller, a professor at Tufts and long-time friend of the show. He recently wrote an op-ed for The New York Times about how there is no leader today with a better track record when it comes to using military power than Vladimir Putin.
This episode was recorded on Sunday, Feb 27.
Transcription and editing by Callan Quinn.
The isolated world of Vladimir Putin
Jordan Schneider: I remember in 2014 after Crimea [Russian foreign minister] Sergei Lavrov had this enormous shit-eating grin on his face. I don't have the words for the contrast between this and what we saw at the Security Council meeting. They looked like they were staring death in the face.
There’s a contrast on one hand of a nation looking like it's seeing all the angles and playing 3D chess, and on the other hand what happened [on Sunday]. There was a lot of weirdness and not particularly coordinated messaging. What gives?
Chris Miller: I think the Security Council meeting is the greatest puzzle of what we've seen over the past couple of weeks. Although it was publicly described as a live broadcast, if you zoom in on the watches in the meeting, it was prerecorded.
That makes it even more puzzling because we had every key member of the Russian political elite present, a dozen of them, and every single one of them seemed a little bit uncertain about where things were going.
What I was struck by was the technocrats and the government, who are usually not the most enthusiastic about Russia's foreign policy even though they're the ones who provide the resources and funding, seeming very nervous and unsure. These are people who have made their careers in the Russian security services and have been in it for a long time.
Putin laughed twice at [Director of the Foreign Intelligence Service] Sergei Naryshkin. It was almost as though the Kremlin wanted to show that the elite was being whipped into shape. But I'm surprised that Putin felt like the elite had to be whipped into shape. My operating assumption before this was that there was, on the whole, a lot of support for Putin, at least on his foreign policy leadership.
Jordan Schneider: It's a weird dynamic when this is your team who you've had 20 years to pick. You're about to go to war alongside them and then you dress them down in public and then you record it and then five hours or however long later you have the whole world watching, it's just an odd series of events.
Chris Miller: Before this week we'd been talking a little bit about Putin becoming more isolated during the pandemic. By all accounts he has enforced a very rigid regime of quarantine, making even cabinet ministers quarantine multiple days before seeing him, regardless of their vaccination status. This is a bit of a puzzle because there's no evident reason why someone, who according to Russian media is vaccinated and in good health, would be as afraid as everyone was in March 2020.
The pandemic does seem to have affected him on a personal level and cut off his access to information. I think this has impacted him in a way that we didn't fully understand.
Jordan Schneider: It wouldn't surprise anyone right now if Putin was on drugs. No doctor is going to say he should cut back a little bit if Putin asks for sleeping pills.
There's a real psychological thing that you see in people like Elliot Spitzer, who was an anti-prostitution crusader that then spent half of his salary hiring prostitutes. Putin's starting a world war apparently because the entire nation is ruled by drug addicts.
It would not surprise me at all if we end up finding out five or 10 years later that this is the case. Maybe if he outlives Putin, Sergei Lavrov will end up having that little detail in his redemption memoirs.
Chris Miller: I can't wait for Sergei Lavrov’s memoirs. But I hope they're written from The Hague.
Europeans, Russians and Republicans
Jordan Schneider: What has the domestic reaction been like?
Chris Miller: If you compare it to 2014 when Russia annexed Crimea, people who were previously part of the opposition began expressing pride in the government, the apolitical put flags on their cars and Russian society was unified behind the annexation of Crimea.
Today this looks very different. I know many Russians who posted on social media that they're opposed to the war. We're not going to get any sort of credible polling data on this.
However, it does seem there’s certainly no wave of popular enthusiasm. Skepticism, anecdotally, seems to be much more substantial than we saw before.
Jordan Schneider: What this dynamic reminded me of is one incredible chapter in William Shirer's Rise and Fall of the Third Reich, which everyone who hasn't read should go out and read.
He was an American journalist who spent the thirties and forties in Germany, and then spent about 10 years after the war reading Nazi documents. He blended his journalistic accounts of watching all these Hitler speeches with archival documents showing what was really happening.
There are points at which it's been superseded by 75 years of historiography, but the atmospherics that he's able to provide as a firsthand witness and his skill as a writer is worth folks putting on their book list.
When Germany invaded Poland, he contrasted the mood on the street in Berlin with what happened during the Anschluss and taking the Ruhr back. After those actions by Hitler, there was rejoicing. People felt incredible and that Germany was back in the game again and that Germany was on the march. But people recognized at the time that Poland was different, that there was no justification and it was a horrible thing to do to an independent nation.
Here’s what he says:
Overhead German warplanes roared toward their targets: Polish troop columns and ammunition dumps, bridges, railroads and open cities. Within a few minutes they were giving the Poles, soldiers and civilians alike, the first taste of sudden death and destruction from the skies ever experienced on any great scale on the earth and thereby inaugurating a terror which would become dreadfully familiar to hundreds of millions of men, women and children in Europe and Asia during the next six years, and whose shadow, after the nuclear bombs came, would haunt all mankind with the threat of utter extinction.
It was a gray, somewhat sultry morning in Berlin, with clouds hanging low over the city, giving it some protection from hostile bombers, which were feared but never came.
The people in the streets, I noticed, were apathetic despite the immensity of the news which had greeted them from their radios and from the extra editions of the morning newspapers. Across the street from the Adlon Hotel the morning shift of laborers had gone to work on the new I. G. Farben building just as if nothing had happened, and when newsboys came by shouting their extras no one laid down his tools to buy one.
Perhaps, it occurred to me, the German people were simply dazed at waking up on this first morning of September to find themselves in a war which they had been sure the Fuehrer somehow would avoid. They could not quite believe it, now that it had come.
What a contrast, one could not help thinking, between this gray apathy and the way the Germans had gone to war in 1914. Then there had been a wild enthusiasm. The crowds in the streets had staged delirious demonstrations, tossed flowers at the marching troops and frantically cheered the Kaiser and Supreme Warlord, Wilhelm II.
There were no such demonstrations this time for the troops or for the Nazi warlord, who shortly before 10 A.M. drove from the Chancellery to the Reichstag through empty streets to address the nation on the momentous happenings which he himself, deliberately and cold-bloodedly, had just provoked. Even the robot members of the Reichstag, party hacks, for the most part, whom Hitler had appointed, failed to respond with much enthusiasm as the dictator launched into his explanation of why Germany found itself on this morning engaged in war.
There was far less cheering than on previous and less important occasions when the Leader had declaimed from this tribune in the ornate hall of the Kroll Opera House.
The kind of delta between 2014 and today in Russia has some echoes of that.
Chris Miller: That sounds about right. This might also be a comparison point to 1939. I don’t like the comparison in general but in this particular instance [maybe it fits]. Annexing Crimea was easy for the Russians, the war in 2008 in Georgia was easy for Russia, the war in Eastern Ukraine in 2014 was easy for Russia.
This is not looking like it's going to be a cost-free endeavor for Russia in terms of lives or money. I think part of the Russian reaction comes from realizing that this is going to be a long, messy fight.
Jordan Schneider: What has struck you watching the response in European capitals, in Washington and around the world?
Chris Miller: I think the striking thing from where we stand right now is that things that would have been inconceivable in European politics have now become mainstream, and they’ve become mainstream in 72 hours. Germany is the greatest sign of this shift. They just announced Sunday morning that they're sending arms to Ukraine.
And I think the European sanctions response has been just as dramatic a shift. There were discussions just [on Sunday] of cutting Russia out of the SWIFT interbank payment system, which would have been unthinkable a couple of days ago. But now it’s controversial for European politicians not to support it.
In the US, I think we've seen a bit less of a drastic shift but we’ve seen moves and I don’t think we’re done. I think that train is going to keep chugging along.
Jordan Schneider: So what impact will this have and when will folks really start feeling the pain?
Chris Miller: There are two big questions. One is whether we get to the stage of full blocking sanctions on the entire banking system. So, thus far, the US has imposed sanctions on several big Russian banks but it's only imposed the toughest sanctions on one Russian bank, VTB, which is the country’s second-largest bank. So these are Iran-style sanctions but only on one bank.
The US could get to the entire Russian banking system, which would be a real mess for Russia because it would be very difficult to make international payments and conduct trade.
The second question is whether we go after energy. Russia, depending on the year, makes about half of its exchange earnings by selling predominantly oil, but also gas, abroad. The Biden administration and some European powers as well are very sensitive to energy prices. The calculus the Biden administration is making right now - they won't tell you this but they are - is around their willingness to tolerate higher gas prices for the midterms versus their desire to punish Russia.
We've already seen it move because gas prices are higher than they would have been without this confrontation with Russia. I think we're going to see that move further in terms of willingness to tolerate higher gas prices because looking weak and looking inept is not a popular look to have during the midterms.
Jordan Schneider: Can we talk about the Republicans for a second? What the fuck?
Chris Miller: Over the past four days, the Trump isolationist wing has either gone very quiet or rapidly changed its views. Look at [Republican Senator] Josh Hawley of Missouri. One week ago he was advocating cutting a deal with Russia. Now he’s criticizing the Biden team for being too weak. You can question his right to criticize, but that shift is pretty notable.
The interesting thing is that it's fine to be an isolationist until America looks weak.
Jordan Schneider: I haven't seen a ton of polling but it'll be interesting the extent to which that is reflected in the electorate. With Trump, you had a dose of high profile consistent isolationism as a sort of legitimized thing. And that hasn't been something that you've seen in the US for a long time outside of Rand Paul and he never had 1/100th of the platform that Trump did in the years that he was in power. So the extent to which that continues to resonate is going to be interesting.
I remember there were a few polls before the war started where there was this very big generational gap, with younger Americans wanting to stay out of things.
The extent to which watching freedom-loving people lose that will change folks [will be interesting] because the dynamics of this versus opposing the war in Iraq or wanting to get out of Afghanistan are very different.
Chris Miller: Yeah. AOC talking about the military-industrial complex doesn't look very impressive [right now]. I think in terms of the Trump coalition and foreign policy, Trump was not really consistent in what he said. If you look at Trump's national security advisors, Pompeo and others, they weren’t isolationists. I worry that isolationism is not the right characterization of the mood we’ve been seeing. I think that doesn't get at what the Trump team or a lot of the Republicans are.
Jordan Schneider: Back to sanctions, how if at all does this change calculus in the Kremlin?
Chris Miller: I don't think it changes the calculus at all in the short term. If we get to Iran-style sanctions soon, then it might start to change calculations, but I don't think we're gonna get to Iran-style sanctions soon enough to impact the conventional military fight in Ukraine.
I think over the next six months, especially if we, as I expect, have more rounds of sanctions and intensify them further, the price is going to begin to become pretty clear. The story of higher prices mixed with a lack of domestic enthusiasm, and maybe even lack of support, that combination is not a popular one and not a good one.
So I don't think we should expect any sort of policy changes in the short term, but I do think he has increased the likelihood that he is no longer Russian president in 2025 for reasons other than his death. I used to think his probability of being in power was only limited by his own life but now I wonder if he’s opened the door to some more domestic pressure than he’s used to.
Why Xi’s passion for Common Prosperity could keep Taiwan safe
Jordan Schneider: So my mental model of Xi is that fundamentally he deeply cares about things besides taking Taiwan and expanding national greatness as defined by territory. And when he's out there trying to reform the party, he really wants to do it. There's a part of him that is passionate about common prosperity and wants to bring toilets to rural China and wants to make sure that the party is run in a clean and marginally less corrupt manner than when it was when he came into office.
He has some sense that the wellbeing of the Chinese people is something that he is responsible for. This is why, although I'm still a little less hopeful than I was before, I’m still relatively hopeful that we're not going to see this sort of development happen in Taiwan.
When you look at Putin, he doesn't have many other places to hang his hat on when he's thinking about the meaning of his existence and the meaning of Russia or the Russian Federation as an entity And once you start to define yourself by only what you can achieve from a Czarist colonial mindset, then these [other, more domestic] sorts of things start to matter less.
If all you're focused on is whether or not you can take X city and Y city and turn off Ukraine's internet so they can stop making memes of you, that is just a fundamentally different way of looking at the world. I think the chances of a coup or something like that happening is higher now.
Chris Miller: There's this extraordinary anecdote from I believe 1944 of one of the Yugoslav communist leaders visiting Moscow and he meets a Stalin, who takes him to the Kremlin for dinner and shows him a map of the world.
The parts that are controlled by the Soviet Union are colored in red. Stalin is at this time thinking about what he wants the post-war map to look like. We know from other sources that he'd had a couple of conversations with Soviet foreign policy leaders elsewhere and the foreign ministry about what the map ought to look like. That included things like which Japanese islands to take and where the border should be. So in 1944, Stalin thought of the world in terms of redrawing the map, and at that point, he was drunk on power because he was in the process of defeating the Nazis and knew he was going to win. It became impossible to draw boundaries that were in a position that left him satiated without threatening his neighbors.
Instead, he wanted to draw the lines through the center of Europe and I think that's kind of where we're at with Putin, right? He’s gotten a lot of what he’s wanted over the past few years. He's faced resistance but not very successful resistance, was able to add Crimea back into the Russian Empire and he sent troops to Kazakhstan in January with no difficulty whatsoever.
We shouldn't have been surprised when he made his big speech on Monday citing ancient treaties from Imperial Russian history.
I think that is the mindset. We're going to redraw the map so let's have a big redrawing and make sure we get enough territory.
Export sanctions and electronics
Jordan Schneider: You're writing a book about chips and we've seen an interesting dynamic of TSMC (Taiwan Semiconductor Manufacturing Company) saying that they're going to stop selling stuff to Russia, which is a somewhat tricky thing to pull off.
On the one hand, they've made the argument, and Intel's made the argument as well, that they don’t know where these chips go. These are commodities, and when you have the stories of an Intel processor being used in Xinjiang to process the faces of Uyghurs, that’s their response.
I'm curious just sort of how you see this developing because if chips don't get to Russia, that's a really dramatic thing. Are people then harvesting old motherboards?
Chris Miller: I think this will be enforced the most strictly as it relates to goods that are most directly linked to the military-industrial complex, and we already have examples in 2014 of when the US tightened export controls and it caused severe delays to the Russian space program due to problems with microelectronics.
This will have an impact on spheres that are adjacent to the military. A lot of the export controls are focused as well on aviation, and aviation is among the most complicated manufacturing, with a million different components per plane. And so you don't need to successfully restrict all that many components to cause a big problem.
Jordan Schneider: So 60% of Russian ICT parts are Chinese. That as a percentage of Chinese exports are small, however. But very quickly the US is going to start looking at which Chinese firms are continuing to export into Russia and in this sort of political economy, decision-making of both the firms as well as Beijing is going to be interesting to follow.
Xi's probably pretty pissed that Russia went in and invaded and put him and China in such an awkward spot internationally. But do they want to entirely throw Russia under the bus?
And is being sneaky about these sorts of exports to Russia worth the risk of a dramatic escalation of what Biden has done so far when it comes to export control restrictions and sanctions on the Chinese technology-industrial complex?
Over the past year and change, there have been a handful of sanctions on firms. SMIC (Semiconductor Manufacturing International Corporation) is now on the entity list, but it hasn't had the same dramatic treatment that you saw in the Trump era with Huawei.
If Beijing is trying to sort of thread the needle and not give the folks in Washington who want to escalate on China more ammunition, they're going to have to be careful about getting stuff across the border or restrict the type of exports that are going to be going into Russia, such those types of fancy specialized aviation chips that Russia is probably really focused on getting at the moment. That's a story I'm focused on and going to be watching closely
Chris Miller: One question to ask of these companies in China that are selling to Russia is how important Russia is as a customer. I bet in many cases, not that much at all.
Jordan Schneider: I think you're right. And I think there is a real research project to be done, which I'm sure is happening inside governments around the world, but also as an open-source researcher, about going down the list of Chinese firms and reading some Chinese 10Ks to figure out exactly which firms these are.
I'm sure if you look at macro OECD data it's not a huge percentage of exports but there are certainly going to be some for whom this is a large and important market.
When it's that company in your region and maybe you're getting mixed signals from Beijing, you might make a different call than a larger firm like SMIC which has much more to lose by supplying Russians in the coming month.
Chris Miller: I was surprised by the confidence with which you seem to think that Xi and the Chinese leadership were unhappy with the war. I'm less certain.
Jordan Schneider: I think this is too much chaos. I don't think Xi is a chaos fan. He likes things to be controlled. He likes knowing what is happening, seeing the steps, and the wide range of outcomes that have now been opened up by this war happening is concerning.
From a longer-term perspective, the EU and the rest of the world are now put on notice that autocrats are bad news.
A lot of what you're seeing coalescing in European politics around those sort of really harsh actions, which basically everyone is on board with now, is going to bleed over into them rethinking their relationship and dependencies on China.
That's probably not going to manifest quite as aggressively or dramatically as it's currently happening in the Russian context. But thinking about stuff like the TTC and the quad and alignment on things like export controls, watching a war happen by one country invading another I think is concentrating minds on the possibility that the same thing could in East Asia.
And that fact alone is probably going to reshape the sort of global landscape that China was confronting, which already was trending in this direction towards a focus and cognizance on the threat of China.
Coming back to our conversation earlier about the dynamic in America, you saw a pretty strong consensus about doing something on China but I think the sort of output that you've seen in terms of things like military spending could be a lot bigger.
This is the sort of thing which I think is going to rebound in America.
Chris Miller: I guess the other takeaway is that if Xi Jinping ever starts making speeches about Emperor Qianlong or the conquest of the Qing Empire, run for the hills. It’s a very bad sign when dictators have been in power for too long and start dreaming about redrawing borders and their favorite old emperors.
Thank you for reading. ChinaTalk grows only through word of mouth. Please consider sharing this post with someone who might appreciate it.