SinoInsight 1
On July 9, Xi Jinping addressed a high-level work meeting on Party building in central Party and state institutions.
Xi made the following points:
- Xi emphasized the Party’s leadership and the need to “strictly govern the Party” (從嚴治黨);
- Cadres must adhere to the guidance of “Xi Jinping Thought”;
- Cadres in key organs must safeguard the authority of Party central with Xi Jinping as the core;
- Officials should not use the anti-corruption campaigns “as an excuse for shirking responsibilities or refusing to perform duties”;
- Officials should not be “muddle-headed, lazy, mediocre, and corrupt”;
- Leading officials have the responsibility of implementing Party building;
- Young cadres should receive “special training” on “consolidating their political theory, strengthening their political orientation, improving their political ability and guarding against political risks.”
OUR TAKE
1. Xi Jinping’s July 9 Party building meeting follows a string of high-level meetings convened after his return from the G20 meeting in Osaka. We believe that the meetings and subtle change in the Party’s rhetorical line are Xi’s attempts to reassert his authority in the regime in the face of pushback from his political rivals and other “hardliners” in May over the Sino-U.S. trade deal draft (see the July 5 and July 8 editions of this newsletter).
We believe that Xi needs to reassert his authority so that he can ram through the structural changes required to allow him to commit to a trade agreement with the United States. And Xi is likely emphasizing his authority at this time with an eye on the upcoming Beidaihe meeting, a summer retreat for CCP elites where informal but important horse-trading is carried out.
According to a circular issued by the Qinhuangdao police on June 29 (Beijing time), the Beidaihe District will see tightened security from July 13 to August 18. The CCP elites will very likely be at Beidaihe during the aforementioned period for their retreat.
2. Xi may have consolidated power to a high degree and marginalized the “collective leadership,” but he is by no means unchallenged or all-powerful (see our forthcoming guide to CCP factional politics). Several media outlets reported that Xi faced pushback from Party elders for his administration’s inability to avert a trade war with America at the Beidaihe retreat in 2018. We believe that Xi’s rivals subsequently attempted a “soft coup” which led to the arrest of Meng Hongwei. This year, Xi appeared to have been challenged over the Sino-U.S. draft deal, resulting in an investigation into his ally Liu Shiyu.
Xi will almost certainly face immense pressure at this year’s Beidaihe meeting given current Sino-U.S. tensions, the worsening economic situation in mainland China, a food crisis, and protests in Hong Kong. To cope with the pressure, Xi must flex his political muscles and give an impression of strength within the Party before going to Beidaihe.
3. We believe that the Hong Kong protests will likely be at the focus of discussions at Beidaihe. Han Zheng, the Politburo Standing Committee member in charge of overseeing Hong Kong, could be made to produce a “self-criticism” given the failure of recent Party policy on Hong Kong. Xi could also carry out a purge of the Hong Kong and Macau Affairs Office and the Hong Kong Liaison Office.
SinoInsight 2
On July 10, CCP state mouthpiece Xinhua published on its website homepage an announcement about the shutting down of military paid services. The article was featured in Xinhua’s important news column (left-most column on its website) with the title, “The Order is Out, a Significant Duty; A Record of Comprehensively Ceasing All Military Paid Services” (号令既出，重任如山 全面停止军队有偿服务纪实). The headline in the article read, “The Tough Battle for Comprehensively and Strictly Governing the Military — A Record of Military and Civilian Sectors Comprehensively Push Forward with Ceasing Military Paid Services” (全面从严治军必须打赢的攻坚之战——军地合力推进全面停止军队有偿服务工作纪实). The People’s Liberation Army Daily republished Xinhua’s article and title on its website homepage. The English edition of Xinhua went with a simpler, but less accurate, headline: “China announces completion of closing military paid services.”
The Chinese language Xinhua article said that the order to cease paid services was made at a key conference on military reform of the Central Military Commission in late 2015. The article also said that all military units, as well as local Party committees and governments, had heeded the order and carried it out.
The article said that “all military and civilian parties have been resolutely implementing the decision of Party Central and the CMC” for over three years, and that the work of completely ceasing paid services in the military “is basically complete.” The military has “basically achieved” its goal of not engaging in “commercial activities,” according to the article.
The Xinhua article added that paid services are a “product of special historical conditions,” and after Xi took office at the 18th Party Congress, he “deeply perceived the dangers of the military engaging in paid services and decisively made a strategic decision to completely cease military paid services.”
The article concluded by noting that while the ceasing of paid services had “achieved significant milestones,” the follow-up work remains “formidable and arduous.”
OUR TAKE
1. We believe that the Xinhua article on ceasing paid services sends multiple messages:
- The use of the phrase “The Order is Out, a Significant Duty” (号令既出，重任如山) to describe Xi’s decision to cease paid services is likely aimed at asserting Xi’s military authority;
- While the English edition of Xinhua announces the “completion of closing military paid services,” the Chinese edition is more nuanced and indicates that the shutting down of paid services is still on-going. This suggests that Xi’s control over the military is far less secure than it appears on the surface;
- Xi is signaling a coming purge of Jiang faction loyalists in the military;
- Xi is preparing a “way out” for himself in the event of a Black Swan event in China.
2. The act of “Comprehensively Ceasing All Military Paid Services” has been delayed several times since the order was given in 2015. In May 2017, the CCP authorities announced that paid military services were to be stopped by the end of June 2018. When June arrived, the authorities again delayed the completion of the order to December 2018. Now, despite having achieved “significant milestones,” the follow-up work remains “formidable and arduous.”
The fact that the work has still not been completed today indicates that there continues to be strong resistance to the order in the People’s Liberation Army. Whether or not Xi can succeed in completely ceasing paid military services is a key leading indicator of whether he can “strictly govern the military.”
3. The PLA’s paid services include hospitals run by the military and paramilitary. Independent researchers have established that military and paramilitary hospitals profit from systemic and large-scale live organ harvesting of prisoners of conscience in China. This June, an independent tribunal in London unanimously determined that the CCP regime continues to harvest organs from prisoners of conscience, and that “Falun Gong practitioners have been one – and probably the main – source of organ supply.”
We previously wrote that “the issue of political legacy is a highly sensitive one for CCP leaders” and that the “most intense factional struggles are driven by political legitimacy issues.” Former Party boss Jiang Zemin’s political legacy is the crackdown of Falun Gong. By targeting military paid services, Xi Jinping is also targeting Jiang’s political legacy.
We believe that the Xi-Jiang factional struggle could be entering a critical phase in the coming months.
