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Early analysis of Pence’s 2nd China speech; analyzing personnel reshuffles before the Fourth Plenum

SinoInsight 1
On Oct. 24, the CCP Politburo convened a meeting and announced that the Fourth Plenum of the 19th Central Committee would be held from Oct. 28 to Oct. 31.

Key personnel reshuffles also took place between Oct. 24 to Oct. 26, including three at the provincial-level and five at large state-owned enterprises.

Three provincial-level personnel changes:

  • Shi Taifeng, former Ningxia Party Secretary, was transferred to the position of Inner Mongolia Party Secretary.
  • Chen Run’er, former governor of Henan, was transferred to the position of Ningxia Party Secretary.
  • Li Jiheng, former Inner Mongolia Party Secretary, succeeded retiring official Huang Shuxian as head of the Ministry of Civil Affairs.

Five SOE personnel changes:

  • Deng Jianling, former deputy general manager of China Huadian Corporation, was promoted to general manager and director, and was appointed as Deputy Party Secretary of Huadian’s Party group.
  • Wang Dongjin, former general manager of China National Offshore Oil Corporation (CNOOC), was transferred to the positions of CNOOC chairman and Party Secretary of CNOOC’s Party group.
  • Chi Jingtao, former deputy general manager of China Grain Reserves Corporation (CGRC), was promoted to general manager, director, and Deputy Party Secretary of CGRC.
  • Tan Chengxu, former mayor of Dalian, Liaoning Province, was transferred to Ansteel Group to serve as the company’s chairman and Party secretary.
  • Yao Lin, former chairman and Party Secretary of Ansteel Group, was transferred to Aluminum Corporation of China Limited to replace retiring official Ge Honglin as the company’s chairman and Party Secretary.

OUR TAKE
1. Since March 22, 2018 until last week, there were no reshuffles involving provincial-level officials. Then the above mentioned three reshuffles took place within the span of three days—a sign of something unusual afoot.
We believe that the latest round of personnel changes are connected with factional struggle in the CCP. Contrary to recent speculation that Xi Jinping is planning to promote officials to groom as his replacement—a move that would indicate that he is planning to relinquish his grip on power—we believe that Xi is reshuffling personnel to rally officials and further consolidate his position.

2. The reshuffle of leadership at the Ministry of Civil Affairs offers a glimpse at the complexity of factional politics. Earlier anti-corruption investigations found that corruption was rampant at the Ministry, and the former minister, Li Liguo, was probed in October 2016 and subsequently dismissed. Replacing him was Huang Shuxian, the former deputy Party Secretary of the Central Commission for Discipline Inspection, Minister of Supervision, and director of the National Bureau of Corruption Prevention. And replacing the retiring Huang at the plump Ministry of Civil Affairs post is Li Jiheng, the Party Secretary of Inner Mongolia (a poor province).

Li Jiheng’s CV suggests that he is connected to the Jiang faction. While Xi Jinping had vigorously purged the provincial heads who were Jiang faction members during his first term in office, Li found himself promoted from governor of Yunnan Province to Inner Mongolia Party Secretary. After his promotion, Li took the initiative to back Xi on a number of occasions. Viewed from the perspective of reworking patron-client networks, it seems that Li Jiheng’s recent promotion is Xi’s way of rewarding him for his support.

Support and loyalty, however, are sometimes met with political realities. Newly promoted Inner Mongolia Party Secretary Shi Taifeng previously worked with Xi Jinping at the Central Party School and won promotion during Xi’s first term. While Shi was again promoted after the 19th Party Congress from Jiangsu governor to Ningxia Party boss, Ningxia is one of China’s poorer provinces, as is Inner Mongolia. While Xi might be trusting Shi Taifeng to push his poverty alleviation effort, Shi is basically at a “dead-end” when it comes to his political advancement. We believe that the main reason for why Shi did not get a more prestigious post is because he is nearing retirement age (Shi was born in 1956; the unofficial retirement age for senior officials is 65).

Finally, Chen Run’er’s career background indicates strong affiliation with the Jiang faction. His transfer to Ningxia from Henan will likely make it difficult for him to build political capital (unless he somehow achieves stellar poverty alleviation results) and advance in his career.

3. We believe that the many personnel changes at the SOEs after the 19th Party Congress is Xi Jinping’s way of keeping the senior executives on edge while strengthening his control over the SOEs. And particularly in this year where China’s poor economic performance requires greater extraction of profits from the SOEs, Xi needs to disrupt and dismantle the long-entrenched Jiang faction connected interests in the SOEs.

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