The Chinese government is threatening to expel nearly two dozen foreign correspondents, working for the Times and Bloomberg News, in retaliation for investigations that exposed the private wealth of Chinese leaders. It is the Chinese government’s most dramatic attempt to insulate itself from scrutiny in the thirty-five years since China began opening to the world. We won’t know if it’s prepared to follow through on the threat for another week or two, when correspondents’ annual visas begin to expire. So far, it has declined to renew them. Unless the government changes course, reporters and their dependents will be required to leave the country before the end of the year.

But following through is only part of the point. The real purpose is intimidation: to compel foreign news organizations to adopt a more compliant posture in their daily decisions, small and large. In attempting to shield themselves from the gaze of the world, the new generation of Chinese leaders has unwittingly provided one of the clearest views yet into their thinking, and their self-perception, as they confront the challenges that will define China’s future.

Before the government threatened to expel the foreign staffs of the Times and Bloomberg, there were already signs that a strategic change was underway. As I wrote last month, news organizations are facing a time of reckoning in China. The American correspondent Paul Mooney was denied a visa in November, joining a list of other journalists, including Andrew Higgins and Melissa Chan, who have been prevented from entering the country, or forced out, in the past two years. Chan, who was working for Al Jazeera English, was the first foreign correspondent expelled in thirteen years. At the time, we did not know what to make of the news; we now know that Chan’s expulsion, in May, 2012, was a milestone, not an aberration.

The present threat to expel journalists unwinds a decision, made five years ago, to signal greater openness to foreign correspondents. In 2007, as a condition for hosting the Olympics in Beijing, the Chinese government removed restrictions barring Beijing-based journalists from leaving the capital without prior written permission. It was a largely symbolic restraint—reporters travelled anyway—but removing it was symbolic as well, and that was the intent: it was designed to show the world that the host of the Olympics was confident and strong enough to bear whatever journalists might uncover in their wanderings.

Two things seem to have compelled the government to reverse course. In 2011, the uprisings in the Arab world unnerved the Chinese government by raising the prospect that the combination of technology, information, and dissatisfaction could undermine even a government that appeared secure to itself and outsiders. “If we waver,” Wu Bangguo, a senior official, told a meeting in Beijing in March, 2011, “the state could sink into the abyss.” The Arab Spring created a climate of sensitivity, but it was the events of the following year that tipped the balance. In 2012, the Times used Chinese records to calculate that the family of Prime Minister Wen Jiabao had acquired a fortune of $2.7 billion during his time in office. Bloomberg produced a similar story on the incoming President, Xi Jinping. In retaliation, the government took steps to punish the bottom line of both companies: it blocked a Times Web site aimed at Chinese readers, and it ordered financial customers not to buy any new Bloomberg terminals. Those measures remain in place.

Before President Xi and the fifth generation of Communist Party leaders took office, last November, China-watchers wondered if he would address his people’s growing appetite for information by giving them a bit more space and bit more truth—to let them blow off steam, and satisfy their sense of slow and steady progress, as a way of preventing more radical change. The leaders are choosing the opposite tack: they are seeking to create more economic opportunity but less political and intellectual opportunity. Over the course of the past six months, they have narrowed the range of free expression on the Internet and tightened their hold over professors and activists who criticize the government. Attempting to chill the activities of the foreign press is the latest step. They are betting that their people will tolerate a narrower realm of ideas than they enjoyed a year or two ago. That is a risky bet; taking things away from people who have come to expect more does not generally relieve the source of pressure.

China is gradually losing interest in soft power. The Party spent much of the past decade seeking to project a more attractive and welcoming image to the world; it placed billboards in Times Square, expanded the reach of its news outlets to broadcast more of its views to Africa and Latin America, and built hospitals, roads, and soccer stadiums in developing countries. Those efforts will continue, but the leadership is signalling that it has concluded being liked is less important than simply surviving. I spent some time with a senior Chinese diplomat recently, and when I asked what motivated the threat of expulsion, the diplomat said that the Times and Bloomberg were seeking nothing short of removing the Communist Party from power, and that they must not be allowed to continue. That argument surprised me: I had expected a bland procedural defense—this was a blunt expression of fear.

The government is adapting a policy that it has used with other businesses, but it is one that misunderstands the incentives for news organizations. For years, China expected foreign companies not to publicly voice their complaints about hacking, or intellectual-property violations, in order to protect their broader interests in the country. But over the years, that strategy failed: foreign companies began to complain openly, and the United States government took up their cases. News organizations have little reason to keep quiet; unlike a company selling industrial equipment, a company selling news depends, for its survival, on the perception of objectivity and credibility. Staying silent was not an option.

In a visit to Beijing on Thursday, Vice-President Joe Biden took up the cause of the foreign correspondents, and in doing so he officially, and rightly, ended the practice of keeping these issues unspoken. We will soon know if the Party is prepared to deliver on its threat. The deeper meaning of these efforts, however, is already clear. The new generation leading China fears that the effort to itemize its financial gains is a story so deep and dangerous that it is worth sacrificing China’s broader goals, at home and abroad, in order to prevent it from being told.

Photograph: Jason Lee/Reuters