24 January, 15:33
The arrests of Generals Zhang Youxia and Liu Zhenli mark an unprecedented near-complete destruction of China's Central Military Commission. As of January 2025, only two figures remain in this body that effectively commands the entire People's Liberation Army: Chairman Xi Jinping and his deputy, Zhang Shengmin, secretary of the Commission for Discipline Inspection, who orchestrated the removal of all others.
Zhang Youxia and Liu Zhenli were the only CMC members with actual combat experience. Both participated in PLA campaigns against Vietnam in the late 1970s. All other generals with combat experience had already been purged during anti-corruption campaigns in 2023-2024. Zhang Youxia faces accusations of corruption and failing to control his closest associates, family members, and relatives. He is also charged with not reporting problems to party leadership from the outset.
His patron, Liao Xilong, a former PLA Chief of Staff and Minister of Logistics who played a key role in advancing Zhang's military career, died on January 23. The timing proved convenient.
Zhang Youxia's arrest carries particular significance. As the son of Zhang Zongxun, one of the PLA's founding generals, his detention shattered the "red line" that Xi Jinping's anti-corruption campaign had maintained over the past decade. While the campaign touched many high-ranking military and political officials, it consistently preserved the untouchability of revolutionary founders' descendants, especially second-generation military figures. That red line no longer exists. The message to the old guard is unambiguous: no one is untouchable, no one enjoys immunity.
Not Tukhachevsky, but Shoigu
Parallels with Marshal Tukhachevsky's 1937 execution appear compelling but fundamentally mislead. Tukhachevsky lived in an era when armies served as instruments of war rather than mechanisms for budget distribution. Stalin eliminated military elites because he feared conspiracies and opposition. Generals then genuinely could threaten a dictator's power.
Today's generals pose an entirely different threat. They control financial flows of staggering magnitude. Twenty-first century militaries are not instruments of war but vast machines for distributing budgetary resources. The sums involved would have been inconceivable to either Tukhachevsky or Stalin.
The proper parallel is not 1937 but 2024. Not Tukhachevsky's execution but the arrest of Shoigu's team. Timur Ivanov was arrested not for military failures but for poor control over embezzlement flows. More precisely, he controlled them too well but in the interests of an old system that no longer suited supreme authority.
Shoigu's removal had nothing to do with battlefield setbacks. Putin understood perfectly well that Russia's military was corrupt to its core long before the Ukraine invasion began. Shoigu was removed when authorities realized that old corruption management methods could not handle new financing volumes. The veteran embezzler gave way to technocrat Belousov, whose task is putting embezzlement on fundamentally new tracks.
The Military as Mega-Corporation of Embezzlement
Consider the numbers. China officially spends approximately $230 billion annually on its military, unofficially far more. The United States spends over $800 billion. Russia has increased military spending to a record 6.3% of GDP. Europe is ramping up defense expenditures. The world is entering an era of military Keynesianism, with trillions of dollars pumped into armed forces.
These funds do not enhance actual combat capability. They flow into a system that exists for self-reproduction. Militaries transform into mega-corporations where the primary objective is not winning wars but managing flows. Construction, procurement, contracts, subcontracts, technologies – all serve as channels through which enormous sums flow. Whoever controls these channels controls real power.
The problem with China's old military guard is not that they stole. The problem is they stole using outdated methods. Kickbacks, embezzlement, nepotism, family clans – all functioned adequately when millions were at stake. But when tens and hundreds of billions are involved, old schemes do not scale. More critically, they become dangerous to the system because they create uncontrollable power centers.
Corruption in the PLA reached such dimensions that it no longer constitutes mere theft. It represents a parallel power structure. Generals controlled entire industrial sectors through family clans. They distributed contracts, appointed contractors, determined who gained access to budgetary flows. They evolved into feudal princes of the military-industrial complex.
Xi Jinping observed this and understood: the system had escaped control. Not because generals might stage a military coup – that notion is absurd in contemporary China. Rather, because they control money, and money in volumes comparable to small nation-states' budgets.
Digitizing Embezzlement
Belousov in Russia symbolizes a new era. He is not a general but an economist and technocrat. His mission is not warfare but flow management. Creating a system where corruption does not vanish but becomes controlled, predictable, centrally managed. Digitizing embezzlement constitutes his assignment.
Shoigu's old methods were comprehensible and predictable but inefficient. Money disappeared en route, settled in generals' and contractors' pockets, never reached intended destinations. The system functioned while purchasing tanks and aircraft. But when war became reality, it emerged that embezzlement efficiency inversely correlates with military capability.
Belousov must create a new model. Embezzlement will persist, but it will pass through centralized digital control systems. Artificial intelligence for corruption optimization. Blockchain for kickback distribution transparency. Big data for identifying those who steal beyond permissible limits. This is not fantasy but the logic of any large system's development, including corrupt ones.
China follows the same path, only faster and more ruthlessly. Xi Jinping is not purging the old guard because he prepares for war. He purges it because he prepares for a new era of military financing. The PLA budget will grow, technologies will become more complex, sums will increase. Managing these flows requires not old-school generals accustomed to dividing contracts over banquets but new technocrats skilled at working with digital systems.
War of Flows, Not Armies
The US-China conflict is not a war over Taiwan. It is a war for control over global financial and technological flows. Taiwan matters not as an island but as a semiconductor manufacturing hub. The South China Sea matters not as waters but as a transport corridor carrying one-third of global trade. Armies exist not to fight but to control flows.
In this logic, PLA purges represent not war preparation but management system reorganization. Xi removes those who controlled flows without oversight and installs those who will control them under his supervision. These are not repressions but corporate restructuring. Only instead of layoffs come arrests, and instead of severance packages come prison terms.
Russia's experience demonstrated that war exposes all system flaws. When actual combat begins, it becomes clear that stolen billions translate into ammunition shortages, communication failures, rotten body armor, and non-functional equipment. Xi observes and draws conclusions. But his conclusions are not about making the military combat-capable. His conclusions concern making the embezzlement system more efficient and manageable.
Because the real threat to a dictator is not losing a war. The real threat is losing control over flows. While you control money, you control power. War is a risky enterprise with unpredictable outcomes. Control over military budgets provides a stable power system.
China's Central Military Commission was not destroyed because Xi prepares for war. It was destroyed because Xi prepares for a new era of military spending management. Old embezzlers are departing. New technocrats will replace them, putting corruption on digital rails and making it transparent to supreme authority while opaque to everyone else.
This is not a story about Tukhachevsky and repressions. This is a story about Shoigu and Belousov, only at Chinese scale with Chinese specifics. The army of the future is not a war machine. It is a machine for managing flows. Whoever controls that machine controls the future.