SinoInsight 1
On Sept. 22, a Beijing court sentenced Ren Zhiqiang to 18 years in jail on charges of corruption, embezzlement, and abuse of power. Ren, 69, briefly disappeared in mid-March after an essay he wrote made rounds in China. In the essay, Ren obliquely slammed Xi Jinping as a “clown with no clothes who is still determined to play the emperor” in response to Xi’s speech to 170,000 cadres on epidemic prevention work. He was officially investigated by the authorities in April and expelled from the Communist Party in July.
Nicknamed “Cannon Ren” for his scathing criticisms of Beijing, Ren Zhiqiang is an influential businessman and Party princeling who is well-connected to both political and business elites in the CCP regime. Wang Qishan, the PRC vice president and close ally of Xi Jinping, is a former classmate, friend, and political ally of Ren. In December 2011, Ren announced officially on social media his corruption audit results came back negative, found to be clean of “personal corruption problems.”
OUR TAKE
1. Ren Zhiqiang’s case sheds light on the state of play in the CCP elite and factional politics, as well as Xi Jinping’s current situation.
When the investigation into Ren was announced in April, we noted that Xi is in “very precarious position politically” and “must punish Ren Zhiqiang even though the latter is the old friend of his top ally [Wang Qishan] to avoid compromising his own position in the ‘perish together’ factional struggle.” Ren’s “clown” essay was a blow to Xi’s “quan wei” (權威) at a crucial period (two months into the epidemic) for both himself and the CCP regime. Xi could not afford to set a weak precedent, otherwise he would leave himself open to criticism and attacks by political rivals or appear to lack the “moral authority” to punish rivals in future. We also noted earlier that Xi had “some room to play” and could show “Ren a small degree of leniency on Wang Qishan’s behalf.” However, for someone as well-connected as Ren to be harshly punished suggests Xi’s situation in CCP elite politics is much dire than it was five months ago.
Xi and the CCP are under a “perfect storm” of domestic and external problems, some of which have exacerbated since April when Ren was investigated, namely economic matters and U.S.-China relations. Meanwhile more storms are on the horizon, with large protests taking place in Inner Mongolia by ethnic minorities (Mongolians and Koreans) over the curbing of ethnic language instruction in schools in favor of Chinese. The many disturbances vexing the CCP regime and Xi’s subpar responses leave him open to criticism from factional rivals.
Thus far, Xi has weathered challenges thrown at him, including pushback from the Party elite during the summer Beidaihe meeting. However, Xi does not seem at all secure politically judging from moves made in recent weeks to consolidate power, boost his “quan wei,” and tighten the Party’s control over society and the economy. These actions include:
- Stressing the Party’s (and by extension, Xi’s) absolute leadership over the military.
- Stepping up a “scraping poison away from the bones”-style rectification of the political and legal affairs apparatus.
- Conferring a flag to the PRC police force.
- Tighter regulations of passport issuance and stricter capital controls.
- Appointing officials who are more inclined to be loyal to him to key posts.
- Promoting a digital renminbi and a “dual circulation” policy.
- Manufacturing a “crisis” at the Sino-Indian border.
- Strengthening united front work in the private sector.
- Delivering “important instructions” to the All-China Federation of Supply and Marketing Cooperatives (ACFSMC).
We believe Xi made the aforementioned moves with an eye on the 20th Party Congress in 2022 and to ensure that the upcoming Fifth Plenum in October will be convened without incident. Also, Xi likely intends to “kill the chicken to scare the monkeys” (殺鷄儆猴), or make a handful of cadres scapegoats to intimidate the majority of the CCP elite, by timing Ren Zhiqiang’s sentence only weeks prior to the plenary session. Xi is taking harsh steps to coerce elite cadres because the various policies he has pursued (like “dual circulation” and the ACFSMC, an important “closed-door” (閉關鎖國) era organ) and plans to be unveiled at the Fifth Plenum (details of CCP’s fourteenth five-year plan) hint at a partial closing up of China—a serious threat to the interests of the Party elite.
Given what’s at stake, the “anti-Xi coalition” is unlikely to be menaced into submission. The Party elite, many of whom are involved in the financial sector, stand to lose big if Xi brings his economic, financial, and social agenda to its logical conclusion. While the diminishing assets and reduced ability to accumulate wealth are definitely concerning, the gravest consternation for top cadres and their families is being meted out a punishment as harsh as princeling Ren Zhiqiang received. Worse still is the possibility of detention at a “re-education” facility if the Xinjiang model of social control is eventually implemented throughout China. Fear for their personal safety and interests under the Xi leadership has led to some of the Party elite, most prominently princeling Cai Xia, to publicly denounce Xi’s “draconian” turn and call for his ouster. Ironically, Xi’s aggressive power consolidation and tightening of social controls are direct responses to his factional rivals’ (particularly the Jiang Zemin faction) fierce efforts to hamstring his rule and dethrone him in the first place.
In sum, Xi Jinping likely punished Ren Zhiqiang severely to put the CCP elite on notice so that he can smoothly push ahead with his agenda at important political conclaves. However, Ren’s plight is likely to strengthen, not weaken, the resolve of the “anti-Xi coalition” to oust him while they still retain some level of power and influence. In the climate of “perish together” factional struggle, we believe Xi’s efforts to quell political instability via the usual CCP methods will backfire and create even greater hostility and instability.
2. The CCP Fourth Plenum was likely delayed by a year because Xi Jinping was unable to forge consensus within the Party over crucial issues like the Sino-U.S. trade war. Xi is currently facing far greater challenges than before the Fourth Plenum, and will find it exponentially tougher to convene the Fifth Plenum.
Xi’s factional rivals and the “anti-Xi coalition” are less powerful and influential now than several years ago. Less power and influence, however, does not mean they cannot deal severe damage. Xi’s rivals, if desperate, could resort to unrestricted warfare tactics before the Fifth Plenum, including:
- An economic or financial coup by engineering or manipulating turbulence in the stock markets, bank runs, etc. Such a coup cannot be ruled out as many of the Party elite are involved in the financial sector. Also, while Xi has purged “financial crocodiles” associated with his factional rivals like Tomorrow Group’s Xiao Jianhua and Anbang’s Wu Xiaohui, they represent only the tip of the iceberg in the murky waters of business and politics in the CCP regime.
- A major human rights incident in Hong Kong that engenders international outrage, including arresting pro-democracy activists, politicians, and journalists en masse, closing down prominent pro-democracy media outlets, and targeting media groups and organizations linked with persecuted religious groups. The “anti-Xi coalition” can easily stir trouble in Hong Kong, as the Jiang faction has deeply embedded political and business networks there.
- Excessive aggression at the Sino-Indian border snowballing into an uncontrollable conflict. Xi stands to benefit from a “controllable” external crisis, not a serious prelude to war. However, disloyal elements in the military command chain could skew Xi’s instructions in a “prefer left rather than right” (寧左勿右) fashion to see that overzealous border troops interpret Beijing’s orders to an extreme. While Xi has purged many Jiang faction officers from the military’s senior leadership, their immediate subordinates and entrenched networks will take time to be weeded out. For instance, the mountain troops stationed at the border now are from the Tibet Military District, previously helmed by disgraced Jiang faction loyalist Yang Jinshan.
- Nuclear energy or weapon-related “accidents.”
- Coronavirus and infectious diseases related events.
3. High-level CCP cadres could be purged if Xi suspects or catches his factional rivals red-handed before the Fifth Plenum. Retired Politburo Standing Committee members, as well as active or retired Politburo members and Central Committee members, are at risk of being investigated.
The escalation of “perish together” factional struggle bodes for a good chance of political Black Swans to emerge in China before the year is out.
SinoInsight 2
On Sept. 22, CCP General Secretary Xi Jinping delivered a speech at the 75th session of the United Nations General Assembly. Most news outlets praised Xi for his climate change pledges in the speech, including making China carbon neutral by 2060.
OUR TAKE
There is a difference between what the CCP says and what it really believes. A parsing of Xi’s speech reveals the CCP’s plight and ambitions, as well as its drive to survive and dominate. Below, we differentiate between propaganda and fact in key parts of Xi’s speech.
1) “Seventy-five years ago, China made historic contributions to winning the World Anti-Fascist War and supported the founding of the United Nations.”
Analysis
The CCP left most of the fighting against the Japanese in the Second World War to the Kuomintang. The declassification of Soviet archival material and the research of Japanese scholars also show the CCP had in fact collaborated with the Japanese against the Kuomintang on several occasions, and seized the opportunity to expand its presence in mainland China under the guise of “resisting” Japanese invaders. After the war, a depleted KMT was unable to fend off the CCP’s armed takeover, especially when the CCP had Soviet support and duped Washington into believing that Mao Zedong and his revolutionaries offered similar, if not better hopes of democracy in China as compared with the KMT. Thus in October 1949, the CCP ousted the KMT and established a fascist dictatorship.
Meanwhile, it was the KMT and the Republic of China who “supported the founding of the United Nations,” not the CCP and the People’s Republic of China. The PRC only joined the UN at the ROC’s expense in 1971, and it can be argued there still remains legitimacy issues over its permanent member status.
2) Xi made the following remarks on the coronavirus and globalism:
- “We should embrace the vision of a community with a shared future in which everyone is bound together (你中有我、我中有你) … reject attempts to build blocs to keep others out and oppose a zero-sum approach … see each other as members of the same big family, pursue win-win cooperation, and rise above ideological disputes and do not fall into the trap of ‘clash of civilizations’ … respect a country’s independent choice of development path and model.”
- “The world will never return to isolation, and no one can sever the ties between countries.”
- “We should say no to unilateralism and protectionism, and work to ensure the stable and smooth functioning of global industrial and supply chains.”
- “COVID-19 is a major test of the governance capacity of countries; it is also a test of the global governance system. We should stay true to multilateralism and safeguard the international system with the UN at its core.”
Analysis
Xi and the CCP want to avoid accountability for the pandemic by appealing to kumbaya-style global unity and “multilateralism.” Concurrently, Xi is subtly reminding the world to pursue “win-win cooperation” with China, where many “global industrial and supply chains” are located. Yet Xi’s rhetoric belies a naked ambition—the “community with a shared future in which everyone is bound together” is neo-Marxist jargon for the eventual establishment of CCP-led international communism.
Xi and the CCP are well aware that the Trump administration calling out Beijing’s ideology and distinguishing between the Party and the Chinese people will isolate the PRC on the world stage, paving the way for regime collapse. This is why Xi specifically “opposes a zero-sum approach,” calls for “rising above ideological disputes,” and warns about “falling into the trap of ‘clash of civilizations.’”
3) “China is the largest developing country in the world, a country that is committed to peaceful, open, cooperative and common development. We will never seek hegemony, expansion, or sphere of influence. We have no intention to fight either a Cold War or a hot war with any country. We will continue to narrow differences and resolve disputes with others through dialogue and negotiation. We do not seek to develop only ourselves or engage in a zero-sum game. We will not pursue development behind closed doors. Rather, we aim to foster, over time, a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other.”
Analysis
This is a classic example of CCP “survival and domination” rhetoric. Xi is selling the CCP as both “savior” of the world and “victim” of America’s attempt to make the Sino-U.S. relationship more reciprocal. Xi’s goal is to shirk the CCP’s responsibility for the pandemic and its other efforts to destabilize the international order, including provocations in the South China Sea and the Sino-Indian border.
Publicly available information suggests that Xi’s “new development paradigm,” or the so-called “dual circulation” strategy, is really an attempt to partially close up China. On the one hand, Xi aims to grow PRC self-sufficiency in key technologies and manufacturing, to avoid being hampered by U.S. sanctions and become more robust as the international climate turns hostile towards China. On the other hand, Xi welcomes foreign investors to pour capital into China so that it would be difficult to isolate the PRC and make it riskier for countries to confront China when there is a high degree of financial coupling.
4) “China will continue to work as a builder of global peace, a contributor to global development and a defender of international order.
- China will provide another $50 million to the UN COVID-19 Global Humanitarian Response Plan.
- China will provide $50 million to the China-FAO South-South Cooperation Trust Fund (Phase III).
- China will extend the Peace and Development Trust Fund between the UN and China by five years after it expires in 2025.
- China will set up a UN Global Geospatial Knowledge and Innovation Center and an International Research Center of Big Data for Sustainable Development Goals to facilitate the implementation of the 2030 Agenda for Sustainable Development.”
Analysis
This is another attempt by Xi and the CCP to play the “world savior” and cover up its role in the pandemic. However, the $50 million Xi is pledging to contribute to the UN’s global COVID response plan is a fraction of the over $10 billion that the U.S. has already given to benefit the global coronavirus response.
Xi’s “generosity” may be why he was identified as “His Highness” instead of “His Excellency” on the English and Chinese webpages of the Journal of the United Nations.
5) Xi said that China “aims to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060.”
Analysis
While Xi was praised for his climate pledge, there is still skepticism given the general unreliability of the CCP regime and its position as one of the worst polluting countries. We believe Xi’s “carbon neutrality before 2060” is an empty promise as it is impossible for him to personally guarantee that outcome, owing to his age.
