◎ Jiang Zemin and Zeng Qinghong’s recent public appearance signals to the Jiang faction and allied interest groups that they still have clout in CCP elite politics.
On April 22, Ming Pao, a prominent Chinese-language newspaper in Hong Kong, reported that former Chinese vice president and Politburo Standing Committee member Zeng Qinghong had journeyed to his hometown in Jiangxi’s Ji’an City to conduct an “inspection” on April 20. The Ming Pao report noted that Zeng was accompanied by local officials and a heavy security detachment, and was warmly received by Ji’an residents. The report also carried comments by Chinese netizens about how Zeng still carried an air of “official prestige” about him despite being out of office for over a decade.
On April 28, Hong Kong newspaper Apple Daily reported that former Chinese Communist Party leader Jiang Zemin and his wife had made a public appearance in his hometown of Yangzhou in Jiangsu Province. A photo of Jiang and his wife in a Yangzhou hotel was circulated on Chinese social media on April 26.
Party elders Jiang Zemin and Zeng Qinghong are the two front figures in the Jiang faction. Their recent public appearance sheds light on the current state of the CCP factional struggle between the Jiang faction and the Xi camp.
Our take:
1. An understanding of Party culture and political operations is required to make sense of why public appearances by retired high-ranking Chinese officials and CCP cadres are significant.
A “public appearance” is an activity by retired official or cadre that is reported by official or semi-official mainland media or social media, or by the overseas Chinese language press. Perhaps the most famous public appearance by a retired CCP cadre in modern times is Deng Xiaoping’s “Southern Tour” to Shenzhen in 1992.
Public appearances by retired high-ranking Chinese officials or cadres are virtually taboo in the regime given that much political meaning can and will be extracted or interpreted from an appearance. Is the retired cadre looking to admonish Party Central for not sticking to certain policies (Deng forced Jiang Zemin to continue with his “reform and opening up” policy by going on his 1992 “Southern Tour”)? Is the retired cadre challenging the incumbent Party boss? Or is the retired cadre signaling to his faction and allies that he continues to have influence and power despite being out of office?
In an environment where propaganda is second nature and factional politics are implicit and not explicit, a Party elder is not simply going on a casual jaunt when he makes a public appearance in his hometown. Public appearances are classic “you know what I mean” (“你懂的”) code signaling in the Chinese regime.
2. Jiang Zemin and Zeng Qinghong’s recent public appearance signals to the Jiang faction and allied interest groups that they still have clout in CCP elite politics.
Meanwhile, Jiang faction members and associates would take the public appearance of Jiang and Zeng to mean that they have the political backing to continue resisting the Xi leadership.
3. To most observers, Xi Jinping is the most powerful leader since Mao Zedong and is virtually unchallenged as “president-for-life.” On the contrary, we believe that Xi’s position is unstable despite having consolidated power to a high degree. And with the recent public appearance of Jiang Zemin and Zeng Qinghong, Xi’s position is looking even more precarious.
Jiang and Zeng’s public appearance must be viewed in the context of an escalation in the CCP factional struggle which began after the United States imposed the first wave of tariffs on Chinese goods in July 2018. Then, there was much speculation and rumors about Party elders being displeased with Xi for his administration’s handling of trade talks with America. A leading indicator that the factional struggle had intensified was the abrupt arrest of Interpol chief Meng Hongwei in October 2018 and public appearances by leading members of the Jiang faction (Liu Yunshan, Li Yuanchao, Wu Bangguo) around the time of Meng’s arrest.
Other leading indicators include:
- The CCP Central Committee did not hold a customary plenary session (the Fourth Plenum) near the end of the calendar year in 2018. A Party plenum is an important all-hands meeting that is meant to get the Party’s elite on the same page on policies and other important decisions. At the time of writing, there is still no word on whether a Fourth Plenum will be held.
- The Beijing-based Duowei News published articles that were highly critical of Xi Jinping and his policies in the December 2018 edition of its print magazine.
- Xi offered concessions to Jiang Zemin in his Dec. 18 speech to mark the 40th anniversary of the People’s Republic of China’s reform and opening up.
- Senior provincial and ministerial-level officials were summoned to Beijing for a study session on “persevering with the bottom line in mind to guard against major risk.” All Politburo Standing Committee members were in attendance when Xi gave a keynote speech at the opening ceremony of the study session on Jan. 21.
- Since the start of 2019, the CCP ideological journal Qiushi has been republishing old speeches by Xi which are distinctively left-leaning in outlook. We previously analyzed that the CCP factional struggle was a reason why Xi needed to “signal a left-turn to go right” on policy.
- In his speech at the Second Belt and Road Forum on April 26, Xi Jinping talked about making “structural arrangements” (“结构性安排”) instead of “structural reforms” (“结构性改革”). We believe that Xi chose his words carefully “to avoid alarming Party hardliners and giving his political rivals an opportunity to attack him.”
- Jiang Zemin and Zeng Qinghong each made a public appearance in late April 2019. Around this period, news and rumors had surfaced that China and the U.S. are in the final laps of trade negotiations.
What’s next:
1. The Xi leadership has a raft of tricky problems to handle, including rescuing China’s worsening economy, resolving the trade conflict with America and the “new cold war,” and achieving ROC-PRC reunification. On top of that, Xi Jinping faces stiff resistance from the Jiang faction and other interest groups. The political crisis in the regime greatly elevates political risks in China.
2. Businesses, investors, and governments may be planning for a return to normalcy after China and the U.S. sign a trade agreement. Our understanding of the CCP factional struggle leads us to believe that the reverse is true.
We believe that now is the calm before the storm in China. The Jiang faction will very likely seek an opening to attack the Xi camp some time after the conclusion of the Sino-U.S. trade negotiations regardless of the outcome. In other words, deal or no deal, China’s political crisis is only going to worsen in the near future. The worsening political crisis will increase the probability of Black Swan events occurring.
To sidestep risks and seize opportunities, businesses, investors, and governments must closely monitor the CCP factional struggle and be prepared to act decisively.
