New Delhi: Elizabeth J. Perry is Henry Rosovsky professor of government and director of the Harvard-Yenching Institute. She is a comparativist with special expertise in the politics of China. In India last week, she spoke about the impact of a slowing Chinese economy, China’s relations with neighbours, especially Japan and India, and terrorism as a challenge for the country. Edited excerpts from an interview:

The Chinese economy is slowing. How will this impact the country domestically?

I am very concerned about the slowing of the Chinese economy and I think pretty much everyone in China is pretty concerned about it as well. There has been tremendous protest in China over the last 25 years which in some respect is extremely surprising because the Tiananmen uprising of 1989 was so brutally repressed, many expected that it would be a long time before we saw more protest in China and yet we have seen so much protest by workers, farmers, middle-class citizens, protests against pollution and so forth. But what we haven’t seen is campus (student) protests, nor have we seen a coming together of various protest movements. So protests have been frequent, surprisingly large in scale, but not well coordinated within territorial boundaries. I think a big worry that the government has is that if the economy slows down, there is going to be more opportunity for this kind of networking of grievances and the constellation of different kinds of concerns that up until now the government has been quite successful in keeping separate.

What are the international repercussions of a slowing Chinese economy? The popular belief is that China becomes belligerent towards its neighbours to divert attention from domestic issues.

I think it is a worrisome possibility that the slowing of the Chinese economy could create a more aggressive China. It is something we have already seen with (Chinese President) Xi Jinping’s muscular approach to territorial disputes in the South China Sea and elsewhere, the difficulties with Japan and with other countries. The Senkaku/Diaoyu (islands) dispute (between China and Japan) is another example of that. Many of us have been somewhat surprised at how aggressively Xi seems to have dealt with such foreign policy issues. If he is truly a confident leader, these issues would have been better dealt with.

If the economy slows even further, will it impact the Communist Party?

I think the Chinese Communist Party has done a remarkable job ever since it was first founded in 1921, but particularly in recent decades, it has made itself seem much more Chinese although the Chinese communist system is imported from the Soviet Union. I think the fact that the system has indigenized in such a significant way also gives it a legitimacy. People may think that it is performing badly, that it is quite corrupt and nepotistic, but the fact that they see it essentially as Chinese rather than a foreign import, puts it in a very different situation from what we saw in Eastern Europe in 1989. I don’t share the optimism that once we see a slowdown in the Chinese economy, it is curtains for the Chinese Communist Party.

Xi announced he would be carrying out economic reforms in his country. What are the main challenges that he faces in implementing them?

He faces the same challenges that his predecessors faced. There is a great deal of corruption within the Chinese political and economic systems. Many well-known bankers are the children of highly placed officials. We don’t really know how corrupt or uncorrupt the present Chinese leadership is, certainly Xi has publicly tried to prevent any perception of family corruption on his part, but I think it is unclear exactly how thorough Xi can really be in his anti-corruption campaign, which I think, he views as a prelude to more serious economic reform. But that will depend in part on how clean he and the other leaders are. Xi is definitely more capable than his predecessors because I think there is a clear understanding on the part of the top Chinese leadership that there have to be some fundamental economic reforms to prevent this slowdown turning into stagnation. I am not entirely pessimistic. We will see in the next year or so whether he is prepared to make bold moves or not.

How do you assess ties between China and the US? When President Barack Obama began his first term in 2009, there was talk of G2—China and the US. Then we saw the US pivot to Asia, which has riled China.

It’s a relationship that is on reasonably good terms today, there are misunderstandings and disappointments on both sides, but I think there is an appreciation among the top leaders of both countries of the advantages of cooperation. In a host of areas—military discussions to trade issues, educational exchange and so forth—there is an awful lot going on. On one level you could say that it has not been a better relationship for a long period of time. On the other hand, I think it can be unsettled pretty quickly too. There is a lot of mistrust at the central level and the population, largely about the long-term plans of each other.

Do you think the antagonism between India and China is deeper than their border dispute? Is it a matter of difference in outlook or a fight for primacy in Asia?

I am not an expert on this, but I do think you are on to something when you say that it may have something to do with the sense of competition. I would say that the heating up of the Senkaku/Diaoyu dispute with Japan might have a similar explanation that these are two big competitors—Japan and India—of China and that China is anxious to keep some kind of an unsettled quality in its relationship with them until it has a better sense of how it’s doing in the competition in the 21st century. In some ways, India and China are mirror images of each other, both of them went through their socialist period, one under Mao Zedong and the other under Jawaharlal Nehru. Both of them went through and are going through many kinds of liberalizing. Neither are perhaps feeling too confident yet to sit down and make long-term agreements with the other.

Tibet or Xinjiang, which is the bigger challenge for China?

I think the bigger headache for China is Xinjiang. That wasn’t true a generation or so ago when the Dalai Lama was younger and it looked like there was more of a possibility for a separatist movement in Tibet. The tactics that have been used by these two movements suggest that they represent very different concerns to the Chinese government—self-immolation is morally perhaps extremely powerful under the conditions that China is able to maintain control over popular protests. That moral power is extremely difficult to translate into a popular movement (in Xinjiang). The fact that even a tiny handful of extremists within Xinjiang have chosen to use terrorist methods and to use their limited contacts in outside world than what Tibet has, but have chosen that fashion, is I think threatening to the Chinese government. There is a limit to which any government can do to prevent terrorism. It can be practised anywhere, anytime with very limited weaponry. The problem is that if they let either Xinjiang or Tibet go, that’s a signal to the rest of China that the Centre is not committed to holding it all together. It goes against the one China policy and it can certainly have a domino effect.