Updated on Dec. 8, 2021.
SinoInsight 1
In the evening of April 7, the Beijing Commission for Discipline Inspection announced that Ren Zhiqiang, the former chairman of Huayuan Real Estate Group, had been placed under investigation for “serious violations of law and discipline.”
According to reports in overseas Chinese language media, Ren and his son were taken away for investigations on March 12 because Ren had published a controversial article attacking the CCP and Xi Jinping on Feb. 18 (the first reports about Ren’s article appeared in early March). Ren’s article criticized the CCP for restricting freedom of expression and worsening the Wuhan coronavirus epidemic by suppressing the media. Ren also mocked Xi for being a “clown who is an emperor without clothes.” News reports say that Ren originally shared his article with friends in business circles, but the article was eventually leaked to the public.
Sometime after Ren’s arrest, Chinese corporate bosses who read Ren’s article (including Alibaba’s Jack Ma and Lenovo’s Liu Chuanzhi) reportedly passed to PRC premier Li Keqiang an open letter addressed to Xi Jinping. The open letter, which was circulated on Chinese social media on March 26, contained nine requests:
1. Adhere to Deng Xiaoping’s path [reform and opening up; hide strength, bide time];
2. Reject the Cultural Revolution;
3. Begin political reform;
4. Do not discriminate against the private sector;
5. Protect entrepreneurs;
6. Distribute cash to the people;
7. Seek accountability for the coronavirus epidemic;
8. Release Ren Zhiqiang;
9. Reopen investigations into the Li Wenliang incident.
Ren Zhiqiang, who is nicknamed “Cannon Ren,” had previously gotten in trouble for criticizing Xi Jinping. In response to Xi’s 2016 statement that the “media must be surnamed ‘Party’,” Ren said that “when all media have a surname, the people will be forgotten and abandoned in a corner.” According to overseas Chinese language reports at the time, Ren Zhiqiang was placed under Party “observation” for a year instead of receiving stiffer punishment after intervention from Wang Qishan, his friend, former classmate, and political ally.
OUR TAKE
1. The investigation of Ren Zhiqiang is a sign that factional fighting in the CCP has become very intense and Xi Jinping faces very high levels of political risk.
2. Ren Zhiqiang and Wang Qishan are old friends, and Wang is Xi’s top ally. Under usual circumstances, Wang would likely have stepped in again to bail Ren out of trouble for his article and Ren should have been “let off” with perhaps only a light slap on the wrist.
According to a recent Voice of America report, however, “nobody is allowed to intervene, get involved, and plead for leniency” in Ren’s case, “possibly even [including] Wang Qishan.” Wang himself recently “vanished” from the public eye for 36 days and only reappeared with other members of the senior leadership on April 3 and April 4.
The plight of Wang Qishan and Ren Zhiqiang indicates that Xi is currently in a very precarious position politically. Xi likely believes that he cannot afford to show weakness now and undermine his own “quan wei” (權威), otherwise he will leave himself open to being attacked by political rivals or will lack the “moral authority” to deal with rivals later should the need arise. Hence, Xi must punish Ren Zhiqiang even though the latter is the old friend of his top ally to avoid compromising his own position in the “perish together” factional struggle. Xi, however, does have some room to play in the severity of punishing Ren, and could show Ren a small degree of leniency on Wang Qishan’s behalf.
3. The open letter addressed to Xi Jinping by Chinese corporate bosses like Jack Ma and Liu Chuanzhi is almost certainly an act of self-preservation on their part. The views expressed in Ren Zhiqiang’s article can be considered to be representative of the views of corporate bosses and Party princelings because Ren is one of them. And if Ren is one of them and has been investigated, then all of them are naturally at risk of being implicated in his case and investigated. The fear that they could be “vanished” next likely inspired the Chinese business elites to write what is essentially a petition for Xi to “abdicate” power. The “leak” of the open letter is also likely intentional as the Chinese business elites seek external support to pressure Xi Jinping and preserve their interests.
Discontentment towards the Xi leadership has been brewing among the Chinese business elites even before the Ren Zhiqiang case. This group of elites enjoyed the benefits of China’s entry into the World Trade Organization and have substantial assets both inside and outside China. However, the interests of Chinese business elites (including princelings) have suffered in recent years as a result of the Sino-U.S. trade war and Xi Jinping’s economic policies. Chinese business elites fear that the degeneration of the Sino-U.S. relationship and the coronavirus epidemic would ruin China’s economy and lead Xi to “close up” or partially “close up” China. Thus, from the perspective of preserving interests, it is understandable why the Chinese business elites would react strongly to the investigation of Ren Zhiqiang and issue a petition calling for Xi to “reform” and hence relinquish power.
Xi Jinping, however, would likely view the “abdication” petition as a challenge to his rule. The official announcement that Ren is being investigated and disciplined is likely meant to serve as a warning to the Chinese business elite and Party princelings who wish to oppose Xi. If this group of elites refuse to back down, there is a very good probability that Xi could move against some of the leaders behind the “abdication” petition to make an example of those who oppose him. Those who are punished could see some of their wealth confiscated (the CCP government badly needs to replenish its coffers) and could even be made the subject of popular anger as the CCP attempts to distract the people from the various problems in the regime (coronavirus, unemployment, food crisis, etc.) by calling attention to the “evils” of the “corrupt rich.”
The fiercer the factional struggle in the regime, the more likely it will be that Xi Jinping moves against the Chinese business elite (including princelings) and the heavier their punishment. This in turn will escalate the factional struggle and perpetuate the cycle.
4. Xi’s factional rivals could seize upon the Ren Zhiqiang case and the “abdication” petition by Chinese business elites to press their attack against Xi Jinping and force him to give up some power or even step down at the 20th Party Congress in 2022.
Xi will not cave to the demands of his rivals because doing so would mean the downfall of himself and his political allies. Instead, Xi could become more determined to stick to his guns and even purge top factional rivals to send a message that he will not tolerate challengers. We would not be surprised if an investigation into a senior member of the Jiang Zemin faction or a retired national-level leader is announced at the upcoming Two Sessions.
SinoInsight 2
On April 8, Xi Jinping chaired a meeting of the CCP Politburo Standing Committee. The meeting discussed and heard reports about coronavirus epidemic prevention and control, as well as the state of work resumption in China and other economic matters.
Xi also delivered a speech at the meeting with the following key points:
1. All localities are to speed up the resumption of economic and social order.
2. Unstable and uncertain factors have increased significantly with the coronavirus pandemic and the rising risk of an economic downturn.
3. Faced with a severe pandemic and a complex international economic situation, the CCP must adhere to “bottom line thinking” and make preparations to deal with external changes over the long term.
4. Close attention must be given to changes in the domestic and international epidemic situation to guard against the import of infections and domestic relapse.
5. Epidemic prevention and control work in the capital must be done well. All localities should also focus on preventing and controlling asymptomatic COVID-19 cases.
6. Epidemic prevention and control work at customs checkpoints must be strengthened.
7. China’s economic development has met with increased difficulties. Local Party commissions and governments must strengthen their sense of urgency.
8. Strengthen and improve the people’s livelihood and security, as well as ensure that market supply and prices are “basically stable.”
9. Pay attention to all security risk prevention work.
OUR TAKE
1. Xi’s speech to the Politburo Standing Committee reveals that:
- The epidemic situation in China is still grim and the CCP is concerned about asymptomatic infections and the spread of the coronavirus to Beijing.
- The CCP is laying the responsibility of the continued spread of the epidemic on asymptomatic and overseas cases; otherwise, the CCP will be blamed for causing a second wave of infections by rushing people back to work.
- Xi essentially admitted that China’s economy has been hit hard by the epidemic and that China’s economic crisis has been worsened by the global economic downturn.
- Xi’s remark on “bottom line thinking” and call for local officials to “strengthen their sense of urgency” is likely aimed at preparing the officialdom psychologically for a tremendous political and ruling crisis.
2. The spread of the “CCP virus” around the globe has led to over 1.5 million cases globally and more than 90,000 deaths as of April 9, 2020. The pandemic led many individuals and organizations in countries like the U.S., the U.K., and India to file lawsuits against the PRC government for causing the spread of the coronavirus and demanding large sums of money in reparations. (The PRC government, however, cannot be sued because it is protected by the doctrine of sovereign immunity.) Politicians also want international bodies to bring the PRC to justice. On April 8, U.S. Republican Representative Jim Banks issued a statement calling on the U.S. Department of State and the Department of Justice to bring a case against the PRC at the United Nations International Court of Justice for damages resulting from the coronavirus outbreak.
In response to the clamor for international justice, state media Global Times published an opinion piece on April 7 titled, “Is There a Case for a Second ‘Boxer Indemnity’?” (The “Boxer Indemnity” refers to an unequal treaty signed between the Qing Empire and eleven Western powers in 1901 where China had to pay 450 million taels of fine silver and fulfill other clauses to Western powers.) Written by Professor Li Haidong at the Institute of International Relations at the China Foreign Affairs University, the piece argued that “the American and British calls for compensation are not merely legal and economic issues, but are strongly political in nature and hint at international transformation.”
Prof. Li’s piece in the Global Times is disingenuous because it attempts to equate present calls for the PRC government to take responsibility for the pandemic by paying compensation to the unequal treaties of the past. Go beyond the propaganda, however, and Prof. Li’s piece reveals that the CCP is fearful of so-called “international transformation,” or the notion that countries are uniting against its communist regime. Xi’s recent speech to the Politburo Standing Committee acknowledges that the international climate is turning against the CCP and that it is making “worst-case scenario” preparations to face a crisis that is even greater than the Sino-U.S. trade war.
