SinoInsight 1
At a regular PRC foreign ministry press conference on Jan. 7, foreign ministry spokesperson Geng Shuang was asked if he could confirm reports that PRC vice premier Liu He would be traveling to Washington on Jan. 13 to sign the “phase one” Sino-U.S. trade deal. Geng replied, “I’d refer you to the Ministry of Commerce for details of China-US trade talks.” At the time of writing, the PRC commerce ministry has not publicly commented on the issue of Liu or other Chinese officials traveling to America for a deal signing.
Reports of Liu He traveling to Washington for the trade deal signing emerged after U.S. President Donald Trump’s Dec. 31, 2019 tweet about holding a signing ceremony at the White House on Jan. 15 that would be attended by “high level representatives of China.”
OUR TAKE
1. Thus far, PRC officials have failed to confirm if Liu He or other Chinese officials will be traveling to the U.S. for a deal signing ceremony on Jan. 15 as announced by Trump. The PRC has also not made public the Chinese language translation of the 86-page “phase one” trade deal. These signs do not bode well for the conclusion of the “phase one” deal per the arrangements that Trump announced.
In view of the CCP’s interests, however, we are sticking by the prediction in our China 2020 outlook that the odds of a “phase one” deal being signed are higher than the odds of the deal not being signed. But CCP interests are not the most crucial factor at play. In our Dec. 14 analysis, we noted that “the CCP factional struggle is Xi’s greatest obstacle to signing and implementing the ‘phase one’ trade deal.” We believe that the PRC’s “coyness” on releasing details of the “phase one” deal and lack of confirmation on whether senior officials are attending the Jan. 15 signing are due to impasse in the CCP factional struggle.
2. We believe that the PRC continues to “hesitate” in confirming the Jan. 15 because the various factions are still in the process of political bargaining and have not arrived at a consensus on the “phase one” deal. A key reason why the CCP elite cannot forge a consensus is that Xi Jinping does not appear to have enough political strength to break the political stalemate by suppressing opposing voices and forcing them to accept his will without facing significant pushback. Indeed, the mention of the “people’s leader” phrase at a recent Politburo meeting is a sign of weakness on Xi’s part and not extraordinary strength as some commentators believe.
3. We previously wrote: “If Xi Jinping feels like he has sufficient ‘quan wei’ and is willing to expose himself to even higher levels of political risk, he could begin to purge or sideline a handful of mid- to high-ranking officials in opposing factions to ‘kill the chickens to scare the monkeys’ (殺雞嚇猴). Xi would likely use the six months of chaos in Hong Kong and the Wang Liqiang/Xiang Xin case as an excuse to target Hong Kong, intelligence apparatus, and even political and legal affairs apparatus officials who are associated with or members of rival Party factions. Hong Kong leader Carrie Lam, Hong Kong Liaison Office head Wang Zhimin (Wang can be considered to be in Xi’s camp, but could still be sacrificed), and Hong Kong and Macau Affairs Office director Zhang Xiaoming are all at risk; whether or not Zhang Xiaoming is removed will be a bellwether of how powerful Xi currently is.”
On Jan. 4, Wang Zhimin was replaced as head of the Hong Kong Liaison Office by Luo Huining.
4. If the U.S. and the PRC do go ahead with the trade deal signing on Jan. 15, high level personnel movement in the CCP regime could be imminent. As we explained on Dec. 14, “Xi and Party ‘hardliners’ could come to a compromise to ‘preserve the peace’—Xi is ‘allowed’ to go ahead with the ‘phase one’ deal and purge officials in rival factions in the name of preserving the economy and ensuring regime survival, but his own allies must also be ‘punished’ for the Xi leadership’s failure to negotiate better terms with the Americans (see the purge of Liu Shiyu). Should Xi strike such a bargain, then Liu He is the ally who is most at risk of being attacked and ‘sacrificed’; if Liu is to be “sacrificed,” he will unlikely be investigated but could announce his ‘retirement’ for ‘health’ and other seemingly innocuous reasons some time after he signs the ‘phase one’ deal.
SinoInsight 2
On Jan. 8, Australian newspaper The Age reported that defecting Chinese intelligence operative Wang Liqiang “was allegedly warned on Christmas Eve that he could be sent back to China and killed unless he publicly retracted his story.” Wang was given a script and told to record a video messaging saying that Taiwan’s Democratic Progressive Party had bribed him with “a large sum of money” to make his allegations.
According to The Age, two men are suspected of coordinating the directive to Wang are Alex Tsai, the current Kuomintang deputy secretary and an individual who is considered to be close to Beijing, and Mr. Sun, a China-based businessman who is a close friend of Xiang Xin, a Hong Kong-based Chinese business executive whom Wang Liqiang claims to be a PRC military intelligence officer and his boss. The Age and The Sydney Morning Herald obtained text messages of Tsai and Mr. Sun communicating with each other about how to handle Wang. Tsai told The Age that he had been in direct contact with Wang, while Mr. Sun denied “acting inappropriately or having any involvement in urging Mr. Wang to record a script implicating the DPP in corruption.”
The Age reported that Tsai allegedly sent photos of himself meeting with PRC leader Xi Jinping. If Wang complied with the directive to record the video message, he would be “welcomed back to China or Taiwan, given financial benefits and have his family protected.” If Wang did not follow the directive, he would be “extradited to China to face death or even be targeted for reprisals in Australia.”
The Australian Federal Police told The Age that it is aware of the threats made against Wang and takes “threats of this nature seriously and has commenced an investigation.”
We previously analyzed the Wang Liqiang and Xiang Xin cases, and believe that “Wang is more likely than not the real deal.”
OUR TAKE
1. From available information in The Age report, the CCP appears to have a hand in the recent inducement and threat against Wang Liqiang. If so, then the inducement and threat, like the CCP’s attempt to smear Wang shortly Australian media broke the news of his defection, further affirms his authenticity and story.
2. When Wang’s story first broke, we analyzed that it is likely “connected with the Five Eyes countries (Australia, Canada, New Zealand, the United Kingdom, and the United States) attempt to stop the CCP from interfering in the Taiwanese presidential election scheduled for Jan. 11, 2020.” And in analyzing Xiang Xin’s arrest in Taiwan, we wrote that the “Five Eyes countries are likely using the Wang case to not just stop the CCP from interfering in the upcoming Taiwan election, but also to disrupt and even roll back the CCP’s political interference plans for Taiwan, Australia, America, and possibly other countries.”
From The Age’s account of the inducement and threat made to Wang, it cannot be ruled out that Wang had served as “bait” so that intelligence agencies can better expose CCP interference and infiltration operations in Taiwan, Australia, and elsewhere, as well as thwart the CCP’s attempt to decisively sway the 2020 Taiwanese presidential election.
3. The Age’s report of threats made against Wang Liqiang is the latest in a series of recent events that call attention to CCP interference, propaganda and disinformation, and the dangers of CCP rule (the Hong Kong anti-extradition bill protests and “one country, two systems”). These events have made the CCP threat a key election topic and will affect candidates who are perceived to be pro-Beijing.
The Age’s report mentions the involvement of a senior Kuomintang politician in the operation to threaten Wang. This news could further worsen the KMT’s chances of winning the presidency and gaining a majority in Taiwan’s legislature when Taiwanese go to the polls on Jan. 11.
4. We wrote in our China 2020 outlook that “barring Black Swan events, Tsai Ing-wen will win re-election as Taiwan’s president” and “the Kuomintang could suffer a serious defeat in the 2020 Taiwanese legislative election with a record low number of legislators winning seats.” The latest Wang Liqiang-related exposé could lead to the confirmation of our predictions.
