SinoInsight 1
On Oct. 18, Reuters reported that United States Vice President Mike Pence is planning to deliver his second major policy speech on China on Oct. 24. Pence’s speech will reportedly “reflect on the U.S.-China relationship over the past year” and “look at the future” of the relationship. Earlier in the year, news outlets reported that Pence was originally scheduled to give a speech which focuses on human rights in China on the anniversary of the Tiananmen Square Massacre, but the speech was postponed time and again; it is unclear if Pence’s upcoming speech is the same one that was rescheduled.
On Oct. 22, the Financial Times cited sources as saying that Beijing is planning to replace Hong Kong chief executive Carrie Lam with an “interim” leader by March 22, 2020. Candidates who are being considered to replace Lam include pro-Beijing figures like former Hong Kong financial secretary Henry Tang and former Hong Kong Monetary Authority head Norman Chan.
On Oct. 23, PRC foreign ministry spokesperson Hua Chunying denied the Financial Times report on Carrie Lam, saying that it was a “political rumor with ulterior motives behind it.” Hua added that the central government is firmly behind Lam and the Hong Kong government’s efforts to stop violence and restore order in Hong Kong.
On the same day, Hong Kong’s Secretary for Security John Lee announced that the controversial extradition bill which inspired over 20 weeks of protest was withdrawn.
Also on Oct. 23, Chan Tong-kai, the Hong Kong man who was accused of murdering his ex-girlfriend in Taiwan, was granted an early release. Chan had earlier said that he would voluntarily surrender to Taiwan. The ROC government criticized the Hong Kong government for the move because it sought legal cooperation for Chan’s extradition, not a voluntary surrender.
OUR TAKE
1. The CCP has both long and short-term strategic reasons for wanting to calm down the situation in Hong Kong, including growing economic and financial problems in Hong Kong and the mainland; a need to focus on influencing and subverting the upcoming 2020 Taiwan presidential election; and Mike Pence’s China policy speech scheduled for Oct. 24.
The Xi Jinping leadership has pressing political reasons for wanting the Hong Kong protests to die down—as long as there is chaos in Hong Kong, the Jiang Zemin faction has an excuse to challenge his rule and seize opportunities to escalate the Hong Kong situation to undermine the Xi leadership and gain an advantage in the “you die, I live” Xi-Jiang factional struggle. We have reason to believe that the anti-extradition bill protests in Hong Kong is one of several pressing problems that are making it difficult for Xi Jinping to convene the CCP Fourth Plenum; we wrote earlier that the delayed Fourth Plenum is a sign of political crisis in the regime.
2. We previously wrote about the strategies which the CCP is using to resolve the Hong Kong situation (see here, here, and here). The strategies can be further divided into hardline and soft measures.
The CCP might be growing less confident in sustaining hardline measures to quell the Hong Kong protests the longer unrest drags on in light of Pence’s second China speech, the Taiwan presidential election in January 2020, and the fact that hardline strategies have thus far only encouraged more and more people to step out and join the protest movement (in recent weeks, increasing numbers of young teenagers [12-14] and white-collar workers have been spotted in the streets protesting). While the CCP would unlikely abandon its hardline measures, it would likely seek to re-evaluate the effectiveness of existing tactics.
Meanwhile, the CCP appears to be stepping up the use of soft measures to pacify Hong Kong. We believe that the news that Beijing is planning to replace Carrie Lam and the official withdrawal of the extradition bill are some of the CCP’s soft measures. The planning for Chan Tong-kai to return to Taiwan to surrender instead of working with the Taiwan government on his legal extradition is likely intended to lower tensions in Hong Kong while causing headaches for Taiwan with possibly an eye on tripping up ROC leader Tsai Ing-wen.
Going forward, the CCP could even promise to implement universal suffrage in Hong Kong elections, get the Hong Kong government to set up an independent commission to investigate the police, and sacrifice senior Hong Kong government officials, police officers, and even senior Chinese officials overseeing Hong Kong affairs to “appease” the angry Hong Kong public. It should be noted that while the CCP’s soft measures may seem like concessions, the CCP will see to it that it has not actually given up anything to the Hong Kong people. For instance, the Hong Kong officials that will replace those who are sacrificed will likely still be pro-Beijing; the independent commission could take years to deliver its findings and then recommend only lenient punishment for brutal police action; and the implementation of universal suffrage could be dragged out indefinitely.
3. In considering the PRC’s need to improve Sino-U.S. relations and influence the Taiwan presidential election, there is a chance that the CCP will roll out a series of soft measures to resolve the Hong Kong protests in December, including getting Carrie Lam to step down, reshuffling the Hong Kong government, and even announcing the establishment of an independent commission to look into police behavior. Again, we stress that the CCP’s soft measures are part of its broader strategies, and should not be read as genuine concessions.
SinoInsight 2
Recent non-developments and public information concerning Xi Jinping offer a glimpse at the severity of the political crisis in the CCP (see here and here).
With only a week to go in the month of October, the CCP has yet to announce or convene the Fourth Plenum of the 19th Central Committee; the Politburo had earlier announced on Aug. 30 that the Fourth Plenum would be convened in October.
Also, there has been much speculation lately about the state of Xi Jinping’s health; the possibility that he will step down at the 20th Party Congress and rule as a “power behind the throne” (垂簾聽政); and that Xi has designated Chen Min’er, Han Zheng, or other senior officials as his successor.
OUR TAKE
1. In an earlier piece, we noted that one should be “especially skeptical about all news articles published [before major political meetings] that reveal damaging information about the CCP elite, and the information in those articles should be assessed for its impact on the “you die, I live” factional struggles in the Communist Party.” The same guideline should be applied to all rumors and speculation about the CCP elite. Hence, we are deeply skeptical about the recent speculation on Xi’s health and his “plans” to hand over power, particularly to officials who are either Jiang faction members (Han Zheng) or those who rapidly rose through the official rungs during the Jiang era (Chen Min’er).
2. We believe that the Xi camp and the Jiang faction are locked in a stalemate; neither side has the confidence or the means to subjugate/overthrow the other. In a stalemate, Xi needs to boost his “quan wei” (權威) and cannot afford to show any sign of weakness. Thus, it is extremely unlikely that Xi would be floating trial balloons about his imminent retirement and “retirement plans,” or naming his successors at this stage. Xi is also not powerful enough or has established a broad enough factional network to rule as a “power behind the throne” like Jiang Zemin or Deng Xiaoping (see our brief guide to CCP factional politics and our analysis of why Xi needed to scrap term limits for the presidency).
Xi’s political opposition does not want him to be “president-for-life.” There is a possibility that some of the speculations about Xi stepping down at the 20th Party Congress and him already deciding on successors are “leaks” by Xi’s opposition to undermine his position.
This is not the first time that information challenging Xi’s lifetime tenure has emerged in recent months. On Aug. 22, the 115th anniversary of Deng Xiaoping’s birthday, the official WeChat account of the People’s Daily published a piece titled, “Deng Xiaoping Scraps Lifetime Tenure for Cadres.” The piece was quickly deleted after it was posted.
3. We previously wrote that “Xi was forced to delay the Fourth Plenum and ‘skip over’ discussing economic work because he has been unable to forge a consensus within the Party on reaching a trade agreement with the United States. Xi also seems to lack sufficient “quan wei” to force the CCP elites to follow his lead.”
Xi’s lack of “quan wei” can be seen from his compromises to the Jiang faction during the period of celebrations for the 70th anniversary of the founding of the PRC. As we wrote earlier, “truces in factional struggles are temporary and consensus can be sacrificed to further factional interests. The fierce factional struggle is highly consequential and can be glimpsed from contradictions in the CCP’s implementation of domestic policies, foreign affairs, Hong Kong, etc.”
In light of the escalating “you die, I live” factional struggle, it is also becoming more apparent that Xi’s repeated use of the word “struggle” (nearly 60 times) in a September speech, his particularly venomous Oct. 13 speech in Nepal (“any attempt to split China in any part of the country will end in crushed bodies and shattered bones”), and a recent Qiushi Magazine article by Xi about needing to “turn the blade inward” are aimed at both cautioning external enemies and putting his political rivals in the CCP on notice.
4. The CCP regime is not just facing a political crisis. China only recorded a 6 percent GDP growth in the third quarter of 2020, a 27-year low, with some observers (including a prominent Chinese economist and President Donald Trump) believing that China could even be seeing negative growth. The economic and political problems pose an unprecedented challenge to the CCP as the PRC begins its seventh decade.
We believe that Black Swans are imminent in China if the CCP fails to announce the Fourth Plenum next week, or does not convene a Fourth Plenum.
