American Thought Leaders - How the CCP Dupes the West—and We Keep Falling for It | Chenggang Xu

Episode Date: August 27, 2025

Political economist Chenggang Xu grew up amid the upheaval of China’s Cultural Revolution and in the 1970s was beaten, imprisoned, and subjected to years of forced labor by the Chinese Communist Party (CCP).Today, he is a senior research scholar at the Stanford Center on China’s Economy and Institutions, a visiting fellow at the Hoover Institution at Stanford University, and author of the new book, “Institutional Genes: Origins of China’s Institutions and Totalitarianism.”For decades, Beijing has repeatedly deceived the world about its true intentions, Xu says. So why do we keep falling for it?In this episode, we dive into the origins of the Chinese Communist Party and why Xu believes its model of totalitarianism is distinct from any other regime today.Views expressed in this video are opinions of the host and the guest, and do not necessarily reflect the views of The Epoch Times.

A hundred percent of the land in China is state-owned. But the party controls the state. So there's no separation between the party and the state. In this episode, I sit down with professor and political economist Chenggeng Shu. He grew up amid the upheaval of China's cultural revolution, and in the 1970s was beaten, imprisoned, and subjected to years of forced labor by the Chinese Communist Party. When you are not challenging the Communist Party, then sure, you can can say whatever you want to say.

The author of Institutional Genes, Professor Xu explains the origins of CCP totalitarianism, which he argues is unique and distinct from any other regime today. Actually, the Cold War has not ended. So when people thought that was the end of history, that was a misunderstanding because the Chinese Communist is still there.

And now is the continuation, just in a different format. This is American Thought Leaders. And I'm Yankeelek. Professor Chungang Shu, such a pleasure to have you on American Thought Leaders. Thank you for having me. Something that is very, very difficult to understand, but I think of critical importance in the relationship of communist China and the free world is the nature of the Chinese Communist Party and how it's fundamentally different from what we think of as conventional,

institutions. I've struggled over decades trying to explain this to people. And you've actually come up with a way of doing it. So please explain to me what you've discovered here. Right. So here, actually, if we want to explain that in a very simple way, then the simplest way of telling this story is that the Chinese Communist Party is actually a part of the Soviet Union Communist Party. So it's a historical fact that it was created by the Soviet Union. And from the very beginning of establishing the Chinese Communist Party, it followed all the basic principles, basic rules of the Soviet Communist Party.

So any other interpretation, interpretations of the nature of the Chinese Communist Party is just wrong and the wrong interpretations actually started fairly early since the late 1930s since the Second World War so since that time many American intellectuals were fooled by the Chinese Communists so since then they regard the Chinese Communist Party as something else only with a name called the Communists. And that actually was a story told by Mao Zedong. So that was a story purposely portrayed a different picture of the Chinese Communist Party

that not only fooled the Americans, more importantly, it fooled Chinese intellectuals. Well, let's get to then what the Communist Party actually is. is. Because I mean, your answer here is basically that the Chinese Communist Party is masquerading as not a Communist Party. And that's, of course, of critical importance. But I don't think people understand what a Communist Party is in the first place. The so-called Communist Party is not a political party in the common sense. So if we try to understand what is a political party, then the easiest way is to go back to a definition given by Max Weber at early 20th century.

So by his definition, a political party is a party within political competition. So you have multiple political parties competing to gain the votes for power. And parties attract people voluntarily into the organization. But here, a Communist Party is going to violate all of these definitions. So first of all, a Communist Party does not allow other organizations exist. So it controls all organizations, it's not within, it's above. So all the organizations have to be controlled by. the Communist Party and also is not voluntary. So entering and exiting from the party,

these are not voluntary. A Communist Party is a secretive political organization from the very beginning till today. Well, so I want to touch on this because in your book, you describe these secret organizations that are part of the institutional genes of the original communist structure, both in China and the Soviet Union as being a secretive terrorist organization. So explain that part to me. Right. So to understand the nature of the Communist Party, we have to understand the Leninist principle. The so-called Communist Party is a creation of Lenin. But actually, Lenin didn't really create such an important institution from

from scratch. Instead, Lenin inherited these principles from those terrorist organizations. Here, by terrorists, these are not given by scholars. These are given by themselves, by those organizations themselves. And here, a leading example is the organization called People's Will. These people's will party, they call themselves as terrorists. And their core strategy is using terrorist approach to achieve their political goals. And so here, not only Lenin, but all the main founders of Bolsheviks, all of them were originally from those secretive political organizations, or terrorist organizations.

And that is why Lenin could successfully reconstruct all the principles inherited from the existing terrorist secretive organizations, using those as principles for communist. And when the Comintern, the Communist International, which is a missionary organization, of the Soviet Communist Party. When the intern came to China

and established their branch in China called the Chinese Communist Party, they actually purposely created the Chinese Communist Party as their branch following all the principles. And among their first instructions to the Chinese Communist is to expand this organization

trying to find all the existing Chinese secretive political organizations. And we have hard evidence that how they gave the instructions. And concretely, one of the most important secretive societies within China before, so they have long history, long before the creation of the Chinese Communist Party, was the so-called Brotherhood Society, which is a nationwide secretive organization. And this Brotherhood Society indeed has played essential roles in providing a kind of a foundation for the establishment and the growth of the Chinese Communist Party and also as a base for the military of the Chinese Communist Party.

So when people talk about the early history of the Chinese communist and their regimes, people talk about Jingkongshan as their base, and later Yan'an as their base. But it turns out both of these two bases were based upon the Brotherhood Society, in particular Jingkansan. But the bottom line here, I think what you're telling me, that the Chinese Communist Party, in its origins, is not a political party, but instead it's a secretive terrorist organization, not as a kind of a slander, but actually kind of by actual description, by definition. Is that what you're telling me here? Yes, yes. So literally, substantial proportion of the Chinese Communist Party's founders and cadres, core members, major figures,

substantial proportion of those have this background. For example, nowadays when people talk about Xi Jinping's father, Xi Zhongshun. So, Xi Zhongshun was one of the major assistance of Liu Zedan. And he created this revolutionary base in that area. Yan'an is the capital of that area. So that actually, he relied on the Brotherhood Society. And so he was recruited by the Brotherhood Society.

So he became a leader of that society. So, with a coalition, formed a coalition with the Brotherhood Society in that area. And people usually call them as a bandits. So a coalition between the communist and the bandage created that base. And then they recruited the local heads of the Brotherhood Society into the Communist Party. many of them became the top military leaders of the Chinese Communist Party. When people talk about the factions within the Chinese Communist Party, one of the most important factions is the so-called Prince Lin's faction.

The so-called Prince Lin's faction simply means that their fathers were the top communist leaders. But then we have to further understand who they are. So what are the principles of the institution? Nominally, the institution is a Leninist institution. Nominally, it's a Leninist principle. The reality is that in the case of Russia, that's the People's Will Party. In China, that's a brotherhood society. And then you have many experts within China who understands what is a

what is the brotherhood society. So that explains a lot. It's more than the Marxist principles, more than the usual communist principles. Well, explain to me the role of violence with the Communist Party because you highlight that as a key tool of the party. Right. So, actually, the brutality of a totalitarian party comes from two major sources. So one source is the idea that there exists only one truth, the truth to prevail. For the truth to prevail, you have to eliminate everything wrong. So that's a pure ideology, but that ideology is important because that provides justification, provides legitimacy.

Then the other part is in practice. So in practice, because it's a whole thing developed based upon secretive organizations, based upon this sort of terrorist organizations. So within, there is a tradition to eliminate your political rivals. So your political rivals become enemies. So they will not allow for the existence of anyone who is going to disagree, although the disagreement could be only tactical things. So even the tactical debates could turn your comrades become enemies.

enemies. And that is the reality in all communist parties. So Soviet Union was the first one, and then the Chinese communists has been practicing in this way. So within this kind of a structure, the political power struggle is a life and death struggle. And that is why it's so brutal. You're saying that at its base, the Chinese Communist Party, one, has to have total supremacy and two, it views all political engagement as a life or death struggle. Again, let me be sure here that I'm getting you right because this is pretty serious stuff. Yeah, this power struggles within the party is a life and death matter.

And so in Soviet Union, the most prominent examples would be The purge, the great purges launched by Joseph Stalin. So many of his comrades, like Tchausky, so on, so forth. So they were killed in many different ways. And the same is true in China. So the most prominent examples would be the Cultural Revolution. And even today, the so-called anti-corruption campaign is the power struggle. So that is a excuse, it's a justification for using the

brutal ways to eliminate their political rivals. But actually many of those are not really rivals. So they just, they could have different views or they were in a different sort of factions. By the way, the communists would not allow for any legitimate factions. The so-called all the factions are underground, so they have to hide themselves. But as long as there is a suspicion, then all of these hiding factions have to be eliminated. So whoever try to organize anything is going to be eliminated. So within the party is already in that way and then outside of the party is so obvious so no one could organize so they would not allow anyone for organizing anything including religious. So for

example a Catholic must obey the communists. They are Buddhists, the temples, they have to obey the Communists. So anyone try to have an independent organization, try to have your own ideas. All of these are going to be eliminated. So why don't we actually jump into this? You know, you highlight the difference, the crucial differences between totalitarian regimes and just simply authoritarian regimes. In fact, a lot of scholars, even quite excellent scholars, kind of don't even understand that distinction in my observation. And again, for me, it's been a kind of a lifetime of education trying to figure this out. You lay this out incredibly well using this institutional gene structure.

Can you explain to me the distinction here? Right. So this is a very important question because a confusion between totalitarianism and authoritarianism has huge consequences. So, first of all, let's look at the crucial differences between the two. In the authoritarian regime, usually you have multiple parties. Even in the case that there is only one party, and that party is not dominating in the way of a party. way of a totalitarian regime. So Taiwan, before 1988, it was an authoritarian regime.

There was only one party, which is Kuomintang. But Kuomintang was not as dominating as a communist in the sense that in Taiwan they were independent churches. They were independent temples, they were local elections, and they were true private ownership. So all of this actually laid down the foundation for the later transformation from an authoritarian regime into democracy. So it's not because of the authoritarian leader all of a sudden want to change. Instead, it was a actually bottom-up process. And this bottom-up process depends on the true private ownership, depends on the existence of organizations.

And before the transformation in Taiwan from authoritarian into democracy, there was already a quite famous theory called modernization theory. and developed in the 1960s, according to that theory, an authoritarian regime could transform peacefully into democracy. And the reason is that in an authoritarian regime, once you have an economic development, and then you have a development of the middle class. And the middle class is going to have a demand for freedom for democracy,

and then this ever-growing middle class is going to push the whole society from transform an authoritarian regime into democracy. And indeed, Taiwan is an example, and South Korea is another example, and there are many examples like that. When we confused between authoritarianism and totalitarianism, then we had an illusion if we label China,

the nature of the Chinese institution as an authoritarian institution. And then we equate today's China as Taiwan in 1980s. Then we had an illusion that once China developed, once China starts to have a large middle class, and then the large middle class is going to transform China from an authoritarian regime into democracy. Now everyone found that this is an illusion. And so in particular in the recent decade,

so what the Chinese Communist Party has done shows to the world that is impossible. The reason is impossible is because the Chinese Communist Party controls everything, including these private firms. So how could they control private firms? private firms. So here, the way that the communist controls private firms is not by nationalization legally, but if we look at the reality, actually the Chinese Communist Party controls these firms not through the legal tools, instead controlling the entrepreneurs.

So all the entrepreneurs, they have have to submit. So they have to obey whatever the party requires them to do. And that is actually part of this agenda associated with this so-called anti-corruption campaign. So this anti-corruption campaign legitimize whatever they are doing. So that's only one way of doing Another is that the Chinese Communist Party in the recent decade has made it clear that all the private firms, actually including foreign firms, all organizations, all the NGOs, including the foreign NGOs, as long as you are a large organization operating in China on the Chinese soil, then you have to have a party cell.

The party controls you through that channel. that channel. So they don't have to do the same thing like in the early 1950s to nationalize everything. So they just by controlling the heads. So actually in economics there is an important understanding about property rights. So this important understanding of property rights is to look at the ultimate control rights. Instead of looking at the details, you just look at the look at who controls the assets. So who controls the assets? Controlling the assets.

Once you control the entrepreneurs, then you control the assets through controlling the heads. So that's the way. And so when we look at the Chinese entrepreneurs, they used to have their own organizations. But the Chinese Communist Party found this is alarming. They would not allow for entrepreneurs to organize themselves.

So then even those on the surface looks like these are business organizations. But these business organizations, they have to make a public announcement that all of our organizations are under the leadership of the Chinese Communist Party. They submit themselves. So that's the way to eliminate true private ownership. You know, I really am enjoying this conversation because it's really reinforcing to me how central the supremacy of the party is to absolutely everything, right? And this is, I mean, it's actually very hard for us in living in a free society to kind of grasp how central, how it's sort of insinuates into it into every aspect of society. Can you kind of build on that a little bit

for me? The way they maintain the supremacy is by controlling everything. So one of the concrete examples is military. They are the armed forces of the party. And then we have to talk about the courts. So all the courts, all the law enforcement, agencies, they are the instruments of the party. The party completely controls the courts, completely controls the law enforcement. And then we have to talk about lawmaking. And again, the lawmaking is another tool

of the Communist Party. So the lawmaking, the party dictates what the law is going to be made. and what the law is going to be interpreted. And another important aspect is property rights. So in terms of property rights, I just mentioned that for private firms, the party controls private firms

through controlling entrepreneurs. But even just by looking at the nominal property rights, property rights, nominal owners, who are the nominal owners of properties in China. There are two most important factors that many people are, many people overlook at them. Number one is the land. So a hundred percent of the land in China is state-owned. But the party controls the state. Read the constitution.

And in the Constitution, all the agricultural lands are owned by the collectives. So agricultural land is collectively owned. So the definition of ownership should be the ultimate control rights, not using rights. So when they talk about agricultural land, they are talking about using rights. So when the land is used in agriculture, it's a used in agriculture. is used for that purpose, particular purpose, then it's collectively owned. But once you try to convert a piece of agricultural land

into something else, the law says that you have to convert that land. You have to nationalize the land first, and then you can control the using right, which actually tells everyone in a nationalized in a very clear way that the ultimate control rights are in the hands of the party state. So that's land. And then the next is the financial resources. So the number one issue is that in China, most of the finance is through banking, not through the financial market.

And then if we look at the banking sector, then nearly all of the banks are state-owned. So you have just a very small number of non-state-owned banks, but these are collectively owned. These are ultimately are also controlled by the party state in the so-called commanding height sectors. By the way, the commanding height sector, this wording is by Lenin. So that's the Lenin is the word, and that is the explicit party policy since the starting of the economic reform. So the Chinese Communist Party made it clear that all the commanding high sectors must be state-owned, literally state-owned. Not only the state controls the entrepreneurs, but even talking about nominal ownership, these are literally

state-owned. Commanding high-sectors would include upper stream, mining, and grid, communication, all of those most important things. So just by state ownership of the commanding high sectors, actually, the state can already control the whole economy. Because all the private firms are operating in the downstreams. They relied on the upper stream to provide the foundation. And that is the way that the state-owners- can squeeze the private firms.

So here we have the party state controls the armed forces, controls the lawmaking, controls the courts, and controls substantial part of the assets, all the land, almost all the banking, and controls the media, controls all organizations. So then here we can see that that in practice, the supremacy of the Communist Party is very solid on the Chinese land.

Hiding the true totalitarian nature actually has been the key. And actually, one of the most important strategies of Communist Party is the so-called United France. United French strategy. This United Front strategy was created by Lenin. So from the very beginning, so when they come in turn created the Chinese Communist Party, starting from then, the United Front strategy was one of the founding strategies of the Chinese Communist Party.

So at that time, the Chinese, according to the instructions from the Com-Intern, the Chinese Communist formed a coalition with Kuomintan. And so for that strategy to work, they have to hide their true intent. The true intent is to use Kuomintan as an instrument. to let communists grow within Khomeintan. So the Soviet is going to provide aid to Khomeintan, including military. So the whole military, the military of the Khomeintan was actually created by the Soviet Union.

So by doing so, they let the communists grow within communism. And then they supported the Kuomintan and also directed the Khomeintan in the war, try to cease the power. And then at a later stage of that war, they would let the communists to take over. So eventually, the eventual power is going to be taken by the communist, not by Kuomintan. But they hide their intent, and the Khomeintan was food. So the Kuomintan realized until 1927. So in 1927, the war supported by the Soviet Union was very successful.

The Kuomintang conquered a large piece of the land in China, and then Stalin made a judgment. Now it's the time for the Chinese Communists to take over. So then they had operations everywhere. And so only at that time, Commington realized that they were food. But this strategy was still working. So then in the Second World War, the Chinese communists,

under the instructions of Stalin and also Chinese communists, realized how important the United Front is. So then with the instructions from Stalin and also their own maturity, so Mao Zedong portrayed the Chinese Communist Party as a Communist Party only in the name. We are qualitatively different from the Soviet Communist Party. He told American journalists,

in Yanan. And the American journalists wrote books about Chinese communists, portraying them as a nationalistic party, portraying them as national heroes, portraying them as heroes in the Second World War forming allies with Americans. And indeed, the American government was fooled by the Chinese Communist. Chinese Communists at that time.

And that is how in the, in 1946, Washington made a huge decision. The huge decision is that American government would no longer support Kuomintan anymore. So when the Civil War broke out, Soviet Union was supporting the Chinese Communists, but the American government decided not to support Kuomintan support Kuomintang anymore.

So the neutrality of this American government was actually a consequence of being fooled by the Chinese communists. Only after the Korean War, during the Korean War, the American government realized that the Chinese communist was a true communist. But then fairly soon, just a few decades later, they were food again.

There was a conflict between the Chinese Communists and the Suwad Communists. They thought they could use this, they could edge this, and then they confused. So they thought this conflict is related to the nature of the Chinese Communist Party. But that is just wrong. So the Chinese Communist Party, the nature of that party, is the same as the Soviet Communist Party. So strategically, using their conflict is one thing. Confused about the nature of the Chinese Communist Party is a completely different, another thing. So then, that is how in the 1980s the American government decided to help the Chinese.

So at that time, Soviet Union was still there, and so they thought that was the way, way in the Cold War. So that's a part of the Cold War strategy. The full cooperation with the Chinese Communist in the 1980s, that was already wrong. That's the wrong starting point. And then 1989, the massacres in Tiananmen Square actually didn't wake up Washington. So just the only change of the Washington strategy after 1989 was not to cooperate militarily anymore. But still, Washington had a hope that what happened in Taiwan could happen in China. Around 2002, the American government

helped the Chinese to join WTO. And a huge amount of resources poured into China. And so then the booming of the Chinese economy really helped the Chinese communist. And the reason that Washington has been food by the Chinese Communist Party has many things to do with the intellectual basis. So scholars, China experts in the United States, a large proportion of them, don't understand the totalitarian nature of the Chinese Communist Party.

So when there is no thorough understanding of the totalitarian nature of the totalitarian nature of the Chinese Communist Party, then you'll have the illusions. Yeah, I mean, just a disastrous misunderstanding. And I mean, also I think, you know, aided by some very influential Americans who I guess really either really wanted to believe it was true or were somehow, you know, kind of, you know, engaged financially. You know, you have written this, you know, sort of deep scholarly work, you know, sort of really digging into all the different dimensions of how the Chinese Communist Party works and how totalitarianism works. Tell me a little bit about your background. How is it that you came into this huge

body of knowledge that you've developed? My research about the nature of a communist regime started very early so it's actually started in the Cultural Revolution when I was a teenage so there were two major things struck me one important thing is the is the nature of the Cultural Revolution so the Cultural Revolution was launched by Mao Zedong and that was according to the Chinese Communist party's definition, that was a class struggle. And the Chinese Communist Party said that the class struggle, in a socialist stage, you always have a class struggle until we enter the communism.

But in my understanding, this is a side of contradiction, because the so-called communism is a classless society. That's Marxism. But if in the whole socialist stage you have class struggles, but how could you eliminate classes through class struggles? So I thought that is a self-contradiction. And that also shows that in a socialist society you have classes, and a socialist society create classes. So then that triggers my curiosity to do a research about why in a socialist society it generates classes. And by the way, there is a famous book by a Yugoslavia communist called Gillas. So the title of the book is the new class.

So that book was banned in China. But the idea was circulating. So I was among those, tried to continue this kind of exploration, intellectual exploration, about the nature of a socialist society. Another important event struck me at that time was the Soviet Union's tanks crushed the Prague Spring. So our understanding at that time was that Soviet Union and China these are all communist regimes. But how could a communist regime crush another communist regime by using their tanks? And the Chinese communist portrait the Soviet Union as imperialism, called them as a socialist imperialism.

So then I thought that's another contradiction. So how could a communist regime evolve into imperialism? And by learning imperialism is the last stage of capitalism. I continued this exploration since I came to the United States for my PhD. So my, that was in the mid-1980s. And one of my supervisors, my professors, was Yannosh Kwonai from Hungary. So in his lectures, he started from totalitarianism.

So my further exploration about totalitarianism started since then. And then for the current book, just newly published, I started writing of writing this book since 2012. Since 2012, so when I was experiencing the changes in China and convinced that the peaceful transformation into democracy would not be possible,

so then I decided to do that write this book to collect all of my thoughts have been accumulated in decades of time. So after more than 12 years, so eventually this is published. You mentioned you were a teenager during the Cultural Revolution in China. So were you relocated to the countryside? What happened to you? I was in Beijing and my high school. And my high school actually was at the birthplace of the Right Guard Movement.

That's a Qinghua Fu Zhong, this high school affiliated with the Qinghua University. And from the very beginning of the Right Guard movement, person like me was a target of the movement. And being a target of the movement also, played important roles. So the reason I was exploring new classes in a socialist system is related to that background. And then I went to the countryside. So concretely, I went to a Heilongjiang province,

which is actually my farm was very close to the Soviet Union. So just 20 miles from the Soviet Union. So I spent 10 years there in the farm. Since I thought, as a teenager, I thought I understood urban situations in a socialist economy, but I didn't understand rural. And 80% of Chinese were in rural area.

rural area. So then I voluntarily went to the farm at the end of 1967. And then because of my research on the classes in the socialist system, I became a counter-revolutionary and I was under arrest. After more than a year of imprisonment, so the punishment, so the punishment was changed to hard labor under monitoring until the end of the Cultural Revolution. That experience helped me a lot in understanding the nature of totalitarianism. So when I emphasized repeatedly again and again that a totalitarian regime would not allow for existence of any organization actually is not from the books, it's from personal experience. Actually, what I was doing at that time was only reading car marks, and I wrote articles

trying to apply methodology from car marks to analyze the socialist society and male my articles to my friends. And then they charged me as organizing a counter-revolutionary organization. That was completely fabricated. I didn't do anything like that. So at the beginning, I thought my thinking was unorthodoxy. So then they criticized my thinking, that's understandable. But actually, they didn't emphasize on.

on that part. Instead, they fabricate the case. They said, I organized something which doesn't exist. So when this repeated, repeat enough, then all of a sudden I understand. This is something really serious. So they can take your life with this kind of crime. Totalitarianism means that they does not allow for existing. of any organization. So internally and also externally. And that is why under this kind of regime is impossible to transform peacefully into democracy

because democracy has to have civil society. Civil society means independent organizations, means citizens have to organize themselves only when citizens organize themselves citizens organize themselves, they have the power. So when no one can organize anything, then no one has power. So this is actually really the key of understanding totalitarianism. You know, one of the observations in this famous book, Democracy in America, from years

back, what was that the author believed that the organizing principle, the thing that made America special, the thing that made America successful and unique and had all this opportunity was these, what you described as sort of self-organizing, mediating institutions that somehow existed between the people and government. But self-organizing was the critical element. And it's so fascinating that you mentioned this in this context. It's almost like this is precisely what for a totalitarian communist regime is completely unacceptable. I think what the Chinese leadership, the Chinese communist leadership today would say, is they would say, well, yeah, maybe we had some of this totalitarian problems in the past, and maybe there were some excesses. Of course, they still

revere Mao. He's still kind of in the mausoleum. People still go and visit him, his corpse, and so forth. But today, you know, look, there's all this, you know, prosperity and, you know, it's completely changed, right? And this is why we should be investing. And actually, it's America that's the war monger. The simplest way to understand the nature of the Chinese Communist Party is to look at the relationship between the party and the parties. and armed forces, and the relationship between the party and the courts, and the relationship between the party and lawmaking. So just by looking at these three aspects, it's absolutely clear that all the armed forces

are controlled, completely controlled by the party, all the courts are completely controlled by the party. All the courts are completely controlled by the party, and all the lawmaking agencies are completely controlled by the party. And the laws are instruments of the party. And so remember, we just talked about the United Front strategy. The United France strategy is a huge strategy. So, Mazadon used to say that we have three most important weapons. Number one is propaganda.

Number two is military. Number three is United Front. So the United Front is as important as everything else. So here, United Front would cover everything, including foreign relations, including religious, including how they deal with intellectuals, how they deal with China experts. So any China expert involving China would automatically fall into their United Front strategy. So they are going to create all kinds of confusions. So this creation is on purpose.

So just let you have an illusion that looks like China is free. and indeed, if we are talking about the situation 20 years ago, and at that time, since I'm an economist, so many of my colleagues, including a large number of Nobel laureates, when they visited China, and then when they came back to the United States, they report to everyone that China is free. So in particular, for the Nobel laureates, when they gave speech, they say that they could say whatever they want to say. And so in the classroom or seminar room, people raise all kinds of questions.

So in terms of raising questions or comments, they do whatever they like. they were actually partly true. The reason partly true is because of this United Front strategy. And the United Front strategy is very successful in the sense that once you have already the illusion, you are not going to challenge the Communist Party anyway. So when you are not challenging the Communist Party anyway, not challenging the Communist Party, then sure, you can say whatever you want to say. Particularly for economists, they are not going to call for civil society.

They don't emphasize on civil society. Most of them even don't care so much about human rights. So if you don't talk about human rights, you don't talk about civil society, you don't talk about the self-organization, and you don't challenge the communist. sure, then you say whatever you want to say. However, even at that time, whoever tried to establish an independent organization with a political goal. Political goal doesn't mean you want to challenge communists for the power, the political goal could be very local, just protecting your own property rights, you are in trouble.

whoever try to do that, you are in trouble. But if you self-censored or you have no interest on those issues, then you have a feeling that you are free. So this is a, the United French is the key. So one must penetrate the United Friends strategy to really understand what is the purpose, and what is the nature of the Chinese Communist Party? Well, Chenggang, I want to just touch a little bit on something that you discovered through your work,

and this will just give people the flavor of some of what they may find in institutional genes in your book. But you highlight in there as the emergence of what you call R-A-D-T or rat. I don't know how you choose to pronounce it, but regionally administered totalitarianism. This is a kind of a unique feature to Chinese communism, and you believe that it's one of the things that's allowed the party to maintain its power

alongside the United Front efforts that you just described. So if you could just briefly tell me a little bit about that. Right, right, right. So this regionally administered totalitarianism is very, very important. feature of the Chinese totalitarian society. First of all, it's a totalitarian in the sense that you have a top-down party control. It's the central authorities of the party.

So strategically, it controls everything. So what are strategic aspects? So the number one is ideology. The ideology means how you are going to interpret the legitimacy of the Communist Party. How to interpret this dictatorship. And by the way, dictatorship is not our description. It's not a negative labeling. This is in their constitution.

So dictatorship is in the state constitution, is in the party. constitution, is their constitution. So how to interpret their dictatorship? So that is a strategic. And then the party line, that's a strategic. And personnel matters, the most important personnel appointments, promotions, and the principles of promotions, demotion, things like all of these are strategic. And also the strategically what the party now is going to push. So these are the decided top down. For all the details, for the technical things,

for admin, for resource allocation, all of these are actually distributed to local authorities. So by local means that you have a provincial level, level, you'll have a municipal level, and then you have a county level, and below the county level, you have a township level, so on and so forth. So down to the county level, there are nearly 3,000 of them. So they are going to figure out details. So the central authority is going to tell them, you work for GDP girls, but how to facilitate

how to fulfill that goal, the central authorities would say that either you do it or you lost your position. So you find your way out. So the central authorities would not care about the details. So that's one example is the growth. Another example is the physical stimulus. So when the global financial crisis hit China,

they launched a gigantic physical stimulus package. So the whole world was stunned by how large the Chinese authorities could mobilize. But the reality is that the central authority only allocated a small proportion of the resources. All the rest have to be found out by the local authorities. the provincial level, the city level, and the county level, you'll find your way out. So that's what the Premier said at that time. And then talking about nowadays the green energy. So everyone was impressed by how China pushed forward this green energy, this transformation.

How could they achieve that again by this strategy? So they just said the green mountain is more important. So you have to find a way for the green mountains. So that's the green energy strategy. So the way of solving their incentive problems is actually relies on this particular type of structure. So under this structure, almost all the Chinese counties are safe-contained. In that way, the counties are comparable with other counties. So counties are comparable, and cities are comparable. Provinces are comparable,

because there's no specialization. So when they are comparable, the central authorities can organize competition. Competition, regions against the regions. Counties against the cities against the counties, cities, provinces against the provinces. So that kind of tournament competition provided huge incentives. So you have high-powered incentives to motivate the local authorities to push forward to fulfill the targets set by the central authorities. But here there's a key issue. The key issue is that loyalty is number of. is number one.

So you'll have to loyal to your boss. And you have this nested chain of commands in terms of appointments, in terms of promotion, and in terms of evaluation. So no one is independent. There is a confusion in academic work. The confusion is to confuse this. regionally administered totalitarianism into this so-called federal system. The confusion confused China with the federal.

In a federal structure, you have independent local elections, and the local governors, the mayors, they are elected, and they have to be responsible to their constituencies. But in China, all the local cadres are appointed from above, and they are only accountable to their bosses. So they are not accountable to their constituencies. There is no constituency, there's no local constituency, there's no local election. So this is a totalitarian regime. This is a top-down totalitarian regime.

But here the key is that the Chinese version of that is much more flexible. and much more resilient than the counterpart in Soviet Union. But to understand this way that comes from, we need lots of time. So in my book, I have several chapters explaining how this whole thing has been evolved. Well, and I mean, it's very interesting because during the Cultural Revolution, I often will tell people that the communists were of all these kind of attempts at destroying tradition and destroying traditional culture. The Chinese communists were perhaps the most effective, but they also didn't destroy everything. In fact, they kept some things

that were very useful to them, like for example, a Chinese military strategy from Sun Su and others in the Warring States period and so forth. And perhaps some of these structures of, as you write, of kind of imperial organizing and so forth, actually proved very useful to the them. They didn't quite manage to eliminate everything and perhaps use some of it. If our political leaders, whether it's in Canada, whether it's in the U.S., wherever, they can understand the nature of the regime that they're dealing with, they would probably make different decisions about how to interact, right? And I just, maybe as we finish up, if you could comment a little bit on that, Because you're right, the United Front has been unbelievably effective in fooling all sorts of people, including even the Chinese people.

Right. Indeed. The influence of the United French is everywhere. So it's including all the foreign governments and Chinese intellectuals abroad in particular. If we are talking to Washington or talking to the leaders of democracies worldwide, then here really the lesson is that one must understand how the Cold War preceded and eventually the democracies wound the Cold War. But actually, the Cold War has not ended. So when people thought that there was a final victory of the Cold War, or even said that was the end of history,

that was a misunderstanding because the Chinese Communist is still there. And now is the continuation just in a different format. a different format. So China now is a part of the global trading system, it's a global market. And China has controlled substantial parts of supply chains. This actually can be very, very dangerous, when there are wars. And so So when we are talking about the wars, again here comes to illusions that democracies used to have about the nature of the Chinese communist. So there was an illusion saying that the Chinese didn't have, the Chinese don't have intention to exist. to expand their power, to have power projections outside of their territory. And usually this kind of assertion is backed up by looking at the Chinese Empire.

So they are saying that, look, the Chinese Empire had a great war, and the Great War itself actually contains the Chinese, the power of the Chinese empire. First of all, it's wrong about the Chinese empire. Second, more importantly, the totalitarian regime of China is not traditional Chinese empire. This is a totalitarian regime. And then if we look at the matter of facts, then what is the goal? of the Chinese economic reform.

The so-called Chinese economic reform started not by using the term of reform. Using the term of reform, that actually followed the communists in Eastern Europe after the end of the Cultural Revolution. Really, the Chinese communists, their original wordings for the so-called reform is the four modernization.

The four modernization, one of the key is modernization of defense. So military modernization has been a key, has been a goal. It never, ever changed. So in the 1980s, the American military helped the Chinese military. Try to help them in every way to help them to become a really a fighting force against the Soviet Union. but they didn't know this is actually a totalitarian army. This is the Communist Party's army. This is Communist Party's armed forces.

And so they have been expanding. They have been modernizing. And now you see they are more matured. So when they are matured, they are going to project powers worldwide. They are already doing so. and they are going to do a lot more when they are more matured, further matured. And when war breaks out, and when they at the same time also control supply chains,

so that is going to be devastating. So the impact is going to be a lot more serious than what the Soviet Union could do at that time. So here, understanding the nature of the regime, regime and taking all necessary measures to eventually decoupling is necessary. So actually, this is a life and death trade-off. So this is not just about the profits. It's so much more than money-making, so much more than profit. So many businesses, even today in Germany in particular, many businessmen are still talking about investing in China, still have a huge amount of investment plans in China.

But they didn't, and they don't understand what are going to be the consequences. So China is a much larger threat than today's Russia. Russia is shrinking. The Chinese Communists is expanding. So this is actually no comparison. And taking necessary measures is actually bottom line. Why is it so obvious to you? Why should it be so obvious to people?

people that the Chinese Communist Party is expansive, has this idea to expand. Because they always say, you know, we're just, we're only interested in our own territory. We're only interested in maintaining power here. The way they maintain the power is intimately related to expansion of the power. In particular, now when they already have the capacity. When they didn't have the capacity, then, so you have Deng Xiaoping said that we should better hide our strength. So here the key is hiding.

He was not saying that we don't need the strength. So the key is hiding. Meaning means misleading, means cheating. So now they find they are strong enough. So then there's no need for hiding anymore. And they thought, in particular, if we are looking at their investments in military, you find they invest hugely, as long as you see how quick they are able to produce warships,

how quick they are able to produce airplanes, to produce missiles, to produce nuclear weapons. So as long as you see how quick they can do all of this, then you know they are, in fact, converting the economy into a semi-military economy. So when you are facing that, it becomes so obvious that why they need this. So if the only thing they care about is within their territory, then they don't need this. The reason they need this is to project power.

And they are already doing everywhere. So you don't need arguments, so you just need to look at the facts. So the facts already tell us that they are expanding. And not realizing these basic facts is going to have fatal consequences. You know, I think the CCP itself and its, you know, agents would say something like, look, you know, America is also wanting to have a very large army and expanded and put a lot of money in there. Clearly, they're looking to be expand, have expansion, the exact same thing you're just accused us of wanting to do. How do you respond to that? Looking at the American military deployments worldwide, here we have to go back to history.

So this is actually the consequence of the Second World War. So since then, there is a world order. And in this world order, you have to have a world order. police to keep this world order. The reality is the United States with its allies. Together, they keep the world order. So that's the reality. So talking about the US alone is just wrong.

This is already part of the propaganda and part of the United Front strategy. So part of the United Front strategy is to is to dissolve the allies. So if the U.S. was alone, if the U.S. didn't have the allies, then indeed, there is a good excuse for anyone else to challenge the role that the U.S. has been playing.

But here really the key is that U.S. never ever is alone. So during the Second World War, the United States worked together with the allies. So before 1991, the communist camp was the same, right? So they were not alone, not Soviet alone. So Soviet Union together with the communist allies. So you had two camps. So one camp was the NATO. The other camp was the Soviet Union led,

this Warsaw pact. And China used to be part of it. And then China had the conflicts with the Soviet Union, but actually China continued whatever Soviet Union has done at that time. And actually, Kiesinger had a book talking about the difference between China and West. And in his book, he talked about that in the West, long ago, long before the United States became dominant power, the tradition is to have allies. The tradition is a kind of collective order. So you have a kind of, you have contracts among on the allies and allies work together to keep the order. So this is a Western tradition.

And Kiesinger, in my view, his diagonals about China is too much focused on the Chinese empire, too much on the history of the Chinese empire. So he emphasized on the tradition of the imperial China. But actually, this is the communist China. And the reason today's communist China, people might thought that was a continuation of the Chinese empire is because, unfortunately, from the communist point of view, that all the leading communist regimes collapsed. So that is the reason why China is alone. And China had conflicts with Vietnam, although Vietnam is a communist regime. And China didn't have intimate relationships with North Korea.

Otherwise, they are allies. So it's alone not by choice is the reality. But that is a communist regime with the allies, with the allies. the democracy allies, the democratic allies. Chengang, this has been an absolutely fascinating conversation. A final quick thought as we finish? To understand how the communist totalitarianism becomes so powerful, I would strongly recommend

interested audiences to read my book. Since we need lots of backgrounds, we need lots of discussions, and so in a short talk like this, we can simply cannot explain some of those very important things. So I strongly recommend people to read the book. I'll second that recommendation. Professor Chengkang Shu, it's such a pleasure to have had you on. Thank you so much for having me to share my views with the audience. Thank you all for joining Professor Chenggeng Shu and me on this episode of American Thought Leaders. I'm your host, Yan Ye Kelleck.