Earlier this month, after trade talks with China collapsed, President Trump ramped up his trade war, raising tariffs from ten to twenty-five per cent on a third of Chinese imports, about two hundred and fifty billion dollars’ worth of goods. In response, U.S. markets have become jumpy, and economists have grown more concerned about prospects for economic growth. But less attention has been paid in the United States to what this trade war means for China’s economy and the political fortunes of its President, Xi Jinping. I recently spoke by phone with Victor Shih, a professor of political economy at the School of Global Policy and Strategy at the University of California, San Diego, who studies Chinese economic policy. During our conversation, which has been edited for length and clarity, we discussed the biggest dangers to the Chinese economy, what the Communist Party thinks of President Trump, and whether China has entered a new era of repression.

What internal calculations are the Chinese leadership making around this tariff fight, and what are they trying to pay the most attention to?

Authoritarian regimes, because they’re not elected, can, in theory, impose a great deal of hardship on their population without suffering political repercussions. There certainly would be economic repercussions, but I would argue that for Xi Jinping and the current leadership economic growth is an important objective for them for its own sake. They’re not worried about voters voting them out of office, obviously, and there are many ways in which they prevent that from ever happening. But Xi Jinping himself has made a number of speeches where he has said that, interestingly, making China great again is an important objective, and continual growth, continual development, continual innovation, and technological breakthroughs are, according to him, important components of this great revival of China. So to the extent that an all-out trade war would jeopardize many of these objectives, it does behoove the Chinese leadership to think of ways of getting out of it.

When you say Xi has this idea about making China great again, and innovation and economic growth being important, is that driven by some long-term idea of China and its place in the world? Or—even though you said, short-term, the Party knows it’s going to stay in office—do you think it’s more that they know the Communist Party depends on long-term political success?

I think it’s similar to this Trumpian egoism. You really see some deep parallels between Trump and Xi Jinping. Both leaders see themselves as uniquely capable of reviving greatness in their respective countries. For Trump it may be partly rhetoric and partly politics, but, I think for Xi Jinping, also partly politics—he needed to innovate a new ideology that was very different from his predecessors’ ideologies, so he picked national greatness. He could have picked a number of other ideological lines, but he picked this one. And I think for him, personally, it is an important objective.

And as a result, I don’t believe some of this rhetoric that you’re seeing out of China, saying that we’re prepared to suffer great economic hardship or to continue this economic fight with the U.S. I just don’t think that is very credible, because clearly Xi Jinping would like China to continue on this trajectory of economic growth. Of course, we can say that China can always just lends more money to build more infrastructure, but, from everything that we have seen for the past two years, many of Xi Jinping’s advisers, including Vice-Premier Liu He, have really cautioned him against another massive stimulus program. He can always just ignore the advice of his advisers and launch another massive stimulus. But then China would have to deal with yet another substantially higher level of debt, as a share of G.D.P., in the near future.

Are you saying that, because Xi is wary of stimulus, that makes relations with the U.S., and coming to some agreement on tariffs, extra important?

I think it’s more important than people credit. Because, of course, in the official media they’re beginning to try to portray this scenario where China is going to suffer economic hardship to fight this war with the U.S. I just don’t believe it. I think it’s propaganda.

If you’re running a very nationalist, make-China-great-again campaign, and then you cave to demands from outsiders, you have to figure out a way to sell that to your people. What would that look like, given that Xi prides himself on—

In democratic countries, we often talk about this concept called audience costs, which is, if you tell your public one thing and then you do another thing, your public is going to punish you for it. But leaders are not elected in China, so there’s a lot less popular-audience cost. And the regime prides itself on total control over the media and censors everything that it doesn’t like. So even if it, in reality, made important concessions to the U.S., it can simply hide that fact from the Chinese public. Of course, the educated public will find out about it, but so what? The vast majority of Chinese people will be almost completely ignorant of that fact, and that’s fine. So when the U.S. is negotiating with China it should not worry about things like that, because China prides itself on its total control over the media—and there’s a lot of documentation showing that they’re pretty successful in what they do.

Of course, within the government, you can say there could be this ultranationalist contingent who may fault Xi Jinping for caving. I don’t really buy that, because Xi Jinping has made it his mission to eradicate all his potential enemies from the Party, and I think he’s been quite successful with that. So, who’s going to really challenge him? And, on top of that, I think there are face-saving ways of doing almost anything—you can couch almost anything in a nationalist and victorious kind of language. I’ll give you one example. If there is a debate right now between the U.S. and China over a mechanism that the U.S. wants to put in place to monitor whether China is adhering to the agreement, of course, from China’s side they say, well, this is like imperialism. But, actually, these mechanisms are in place today. The I.M.F. conducts an annual review of China’s financial and economic well-being, and the Chinese government opens its doors to I.M.F. inspectors who, along with Chinese government officials, inspect various provinces, inspect banks in China, open their books and go through tons and tons of data on how the financial sector is performing. China does that willingly. So if something can be structured like what the I.M.F. is doing, China can’t really say that this is an infringement on its sovereignty, because it is happening already.

There have been rumblings in the last couple years that maybe there’s some degree of unhappiness with Xi at some levels of the Party, or in society, since he reappointed himself.

I don’t believe that at all. Some people comment on it. These Long March-generation veterans are still writing these essays complaining about his style of governance. Even the old guys are being punished for complaining about Xi Jinping. I believe he doesn’t have absolute, absolute power, but I think that the threshold for some kind of intra-party uprising against him is very, very high. He would need to commit a catastrophic mistake that jeopardizes the continual rule of the Party for his potential enemies within the Party to rise up against him. And, certainly, making a few concessions to the U.S. does not come even close to that threshold.