Welcome to Foreign Policy’s China Brief.

The highlights this week: The Chinese Communist Party ends the year with a military purge, Chinese President Xi Jinping delivers platitudes in a New Years’ speech, and media tycoon Jimmy Lai faces trial in Hong Kong.

Beijing’s Final Purge of the Year

China marked the end of the year with one of the favorite traditions of the Chinese Communist Party (CCP): a purge. This time, it was the military’s turn, with nine high-ranking generals removed from China’s rubber-stamp parliament, the National People’s Congress (NPC), last Friday.

Although the NPC itself isn’t important, such removals often set the stage for further disciplinary or criminal charges. Last week’s purge included several figures from the People’s Liberation Army (PLA) Rocket Force, under investigation since last summer. Former Chinese Defense Minister Li Shangfu was also officially replaced months after disappearing from public view; there is still no word on any charges against him.

One line of thinking from Western hawks sees every military purge in China as preparation for war. In an abstract sense, that could be true: Any military’s job is to prepare for war, and Chinese leaders see corruption as a threat to military readiness. But these latest removals do not signal preparation for a specific conflict. Military purges are a feature of autocratic rule, especially in communist states, where the ruling party feels the need to assert its primacy over the military.

China’s need to get corruption in the military under control has been apparent for decades—and often stated. PLA officers have long had their hands in the till but especially since the 1970s, when the military took over large parts of the Chinese economy amid the chaos of the Cultural Revolution. Going after graft in the military is no more a sign of preparing for war than the recent arrest of a Malaysian businessman at the heart of a U.S. Navy bribery scandal is.

Chinese President Xi Jinping didn’t begin anti-corruption efforts inside the PLA, but they intensified once his rule began in 2012. In 2015, the Chinese leader made a point of having one general arrested and expelled from the CCP as he was dying of cancer. In the long run, Xi may see the purges as necessary to get the army in fighting shape for a putative war over Taiwan. But in the short term, it’s about his own control of a vital institution.

So, if there was particular corruption within the PLA Rocket Force, what was it, and how did the figures involved get caught? One possibility is that they fell victim to China’s real estate market downturn and got caught. Or it may have happened more directly: China has been expanding its nuclear arsenal, which has involved substantial land acquisition in western China, leading to potential for corruption as well as exposure.

The combination of real estate and government funding used to create frequent opportunities for graft. If an official had an excuse to requisition land from the local government or buy it cheaply, they could then sell it for private use and make a handsome profit. But even if the Rocket Force scandal wasn’t a complete real estate scam, much Chinese money is invested in property; plenty of dubious investments have fallen apart, leaving suspicious holes in the books.

Weapons development and logistics is another likely area for corruption. China has watched Russia’s war in Ukraine closely, especially since its own predictions of Moscow’s victory turned out so wrong; one reason Russia’s invasion failed dramatically in 2022 was endemic small-scale corruption, with troops getting out-of-date food packets and fraying tires. That may have led China to take a closer look at PLA Rocket Force acquisitions and logistics, leading to some discoveries about just how much was being stolen.

Whatever the scheme, China’s cleanup probably won’t make a big difference to PLA Rocket Force operations in the long run. After all, despite crackdown after crackdown, the same issues with corruption keep emerging. The military’s status and lack of transparency mean the only institution that can oversee it effectively is the CCP, which has even higher status and even less transparency. Without any outside investigation or criticism, corruption will keep returning.

However, while outsiders rarely get to see inside the Chinese military, it is known that institutions under investigation in China tend to be less efficient in the short term. Officials want to make sure they are not the scapegoat. The small, regular acts of corruption that keep the wheels greased in a highly bureaucratic system come to a stop—until the discipline inspectors turn their eyes elsewhere.

As happened after the purges at the Big Fund, the investment fund that was supposed to turn China into a chip production superpower, all the money invested in China’s nuclear modernization may be stuck for quite some time.

What We’re Following

Xi’s New Year’s speech. In China, both Jan. 1 and the Spring Festival, when the country marks the Lunar New Year, are occasions for a leader’s address. This year, Xi hit the usual talking points of great advancements, bumper harvests, and the inevitable rise of the Chinese nation—but he paused to acknowledge “headwinds” and that “some enterprises had a tough time.” By past standards, that is a sign of real concern about the economy.

A brief mention of the inevitability of reunification with Taiwan got some play in Western media but means very little. If anything, China’s language on Taiwan tends to get a little tougher when the CCP is trying to compensate for nothing happening—and little has changed in practice since Xi dedicated a whole speech to the topic in 2019.

Jimmy Lai’s trial. This week, Hong Kong media tycoon Jimmy Lai is standing trial on sedition charges brought under a combination of a colonial law and the draconian National Security Law introduced in 2020. Lai, 76, has spent the last three years in jail and faces life in prison if convicted. That is very likely: Despite the structure of Hong Kong’s once-independent legal system remaining, it is effectively a show trial. As is normal in Hong Kong, there is no jury.

Lai is accused of foreign collusion, and it seems that one of the purposes of the trial against him is to scare Hong Kongers away from any cooperation with international organizations. Two individuals from the Inter-Parliamentary Alliance on China, a Hong Kong human rights group that works with politicians in many democratic countries, were named as co-conspirators.

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Tech and Business

Video game kerfuffle. In China, a change in gaming regulations accidentally revealed fears among the markets and within technology firms—as well as how the government is trying to rebuild their confidence. Rules for online gaming announced last week caused a stock market panic, wiping $80 billion in value. Chinese authorities have repeatedly targeted different economic sectors for ideological reasons; 14,000 video game companies closed as a result of a long freeze on the approval of new games by the censors in 2021 and 2022.

The government quickly tried to walk back the latest regulations, keen to rebuild trust with businesses as the economy slumps, and even removed an official from his post over the affair. However, Chinese firms are bitterly aware that at the leader’s whim, an overzealous censor can destroy their business. Alibaba, once the most valuable company in Asia, has lost 75 percent of its share value since being targeted by the government in 2020.

BRICS loses a member. Far-right libertarian Javier Milei, the new president of Argentina, has pulled the country out of a plan to join the BRICS group. Argentina was set to join the bloc alongside other new members on Jan. 1: Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates. China has long-standing ties with past Argentine governments and is a major consumer of Argentine produce. Milei, for his part, has expressed anti-communist views.

Argentina, grappling with a struggling economy, will probably not be much missed by the BRICS bloc. But as the group enters 2024 with new members, it remains uncertain exactly what it is for; it was, after all, born out of a Goldman Sachs slogan. For now, BRICS seems to be an attempt by regional powers to hedge their bets on which superpower will dominate the future.