SinoInsight 1
In the morning of Oct. 14, the Shenzhen government held a celebration meeting to mark the 40th anniversary of the establishment of the Shenzhen Special Economic Zone. Xi Jinping delivered a 52 minute-long keynote address, which took up the first 17 minutes of the CCTV Evening News program.
Highlights of Xi’s speech include:
- Xi reminisced about his father’s role in establishing the Shenzhen Special Economic Zone when Xi Zhongxun was the first-ranked Party Secretary of Guangdong Province. Xi also spoke about how Shenzhen served as a model for “reform and opening up.”
- Xi praised Shenzhen’s development over the past four decades as “a miracle in the history of world development created by the Chinese people.”
- Xi attributed Shenzhen’s development to the “wise decision” and leadership of Party Central.
- Xi laid out ten “musts” for Shenzhen, including “upholding the Party’s leadership over the Special Economic Zone,” persevering with “socialism with Chinese characteristics,” unswervingly “expand opening-up,” drive tech innovation, and the integration of Hong Kong, Macau, and the mainland under “one country, two systems.”
- Under the conditions of the “new situation” (新形勢) and “undergoing major changes unseen in a century,” the CCP wants to set Shenzhen up as a so-called “Pioneer Demonstration Zone of Socialism with Chinese Characteristics,” and serve as a model for a “modern and powerful socialist country” by 2035.
- Shenzhen should be a model for “strengthening the Party’s overall leadership and Party building.”
- Shenzhen should strengthen ideological education, especially among young people.
About seven minutes towards the end of his speech, Xi coughed several times over a three-minute period, causing overseas Chinese media to speculate about the state of his health.
In the afternoon of Oct. 14, Xi visited a bronze statue of Deng Xiaoping in Shenzhen and placed a flower bouquet underneath it. The last time Xi carried out that gesture was during his “Southern Tour” in December 2012.
OUR TAKE
1. Aside from commemorating the 40th anniversary of Shenzhen’s “reform and opening up,” Xi Jinping’s speech reveals at least three other agendas in embarking on another “Southern Tour” in Guangdong at this time.
First, Xi is defending communism and the PRC’s adherence to Marxism-Leninism, or “socialism with Chinese characteristics,” in the face of U.S. ideological confrontation.
Second, Xi is stepping up propaganda work to preserve the Communist Party’s political legitimacy in the face of a “perfect storm” of domestic and foreign problems. For instance, China’s rapidly deteriorating economy and troubles stemming from the Sino-U.S. new cold war are reframed as a “new situation” and “major changes unseen in a century,” and the CCP is sold as China’s only hope out of the “new situation.” Also, Xi is hyping up the success of Shenzhen and touting it as a “model” to justify why the CCP should continue ruling China and hide its growing failures. Further, Xi, like other CCP leaders before him, is selling the Chinese people and foreign investors a “bill of goods” by setting a far-off date to actualize a lofty goal (that is, turning Shenzhen into a model of a “modern and powerful socialist country” by 2035).
Third, Xi is signaling to the Party elite that he is still keen on “reform and opening up” even as he makes preparations to partially close up China. At the upcoming Fifth Plenum, Xi is expected to unveil aspects of the CCP’s Fourteenth Five Year Plan, which puts forth a so-called “dual circulation” model with a focus on driving economic growth through autarky (we explained here and here why “dual circulation” is unworkable).
2. Xi will likely find it difficult to find reprieve from his and the CCP’s problems despite the propaganda and signaling effort in Shenzhen.
The outpouring of public criticism of Xi from the Party elite and their associates in recent months indicate that his intra-Party popularity is at an all-time low. The Party elite will likely still be very wary of Xi and his ambitions despite his “Southern Tour” and what such a trip typically signifies in the regime. Indeed, Xi has said and done little in Shenzhen to convince the Party elite that he is going to do a Deng Xiaoping (reform and open up) instead of a Mao Zedong (strongman rule, closed China).
Meanwhile, Xi’s focus on ideology will only further convince the U.S. that he is an unrepentant true believer in “China’s virulent strain of communism,” in the words of Secretary of State Mike Pompeo. This would invite the U.S. to push back against the PRC more strongly in the ideological sphere, which puts Beijing even more at a disadvantage because it does not have a good defense for clinging on to the bankrupt Marxism-Leninism.
Finally, Xi cannot reform and save China without abandoning communism and its inhibitive culture. The CCP is bound to fail in efforts to stimulate the real economy and make advances in the manufacture of high-tech goods because Party culture (summed up by the traits, “deception, perniciousness, struggle”) is deeply ingrained in Chinese society and the top-down, authoritarian nature of the CCP curbs honest innovation. For instance, there are many anecdotal stories of Chinese businesses devising schemes to get government grants to set up semiconductor factories or new energy vehicles without actually working to produce chips or electric cars. Indeed, Party culture, alongside other systematic flaws of the CCP system, explains why Semiconductor Manufacturing International, China’s top chipmaker, is still mainly producing generations-old 40-nanometer and 28-nanometer chips today. In contrast, Taiwan, a free and democratic society that has preserved authentic Chinese culture, is capable of manufacturing the smallest and most advanced chips currently available. This is not a knock on the Chinese people, but the Communist Party that strives for total dominance over their lives and “engineers” their souls.
Red lights should be flashing for businesses, investors, and governments when they read about companies in “auto parts or seafood” entering China’s semiconductor industry to participate in the “Great Semiconductor Leap Forward.” As the Financial Times puts it, “the 1957 order by Mao Zedong to surpass western industrial nations by producing steel in backyard furnaces … eventually led to history’s largest famine.”
SinoInsight 2
On Oct. 12, the CCP Central Committee issued a set of regulations on its work (中国共产党中央委员会工作条例, henceforth referred to as the “Regulations”). The Central Committee also issued a notice (henceforth referred to as the “Notice”) on the Regulations urging its strict compliance by departments and local governments.
OUR TAKE
1. The Regulations further standardize and elaborate on rules pertaining to the Party’s Central Committee in the Party constitution. Put another way, the Regulations explain how the Central Committee should work in the “Xi New Era.”
The Regulations affirm our previous analysis—Xi Jinping is formalizing his power consolidation efforts to boost his “quan wei,” push through his policies, and better handle heightening political risks. By “codifying” through the Regulations procedures or actions that were only informal or unspoken rules, Xi is strengthening the CCP General Secretary’s ability to control the Central Committee, the Politburo, and its Standing Committee.
We earlier elaborated on the implications of Xi’s effort to formalize power consolidation. Presently, we have not observed any prominent attempts by Xi’s factional rivals to attack him, although certain narratives that hurt the Xi camp have recently been propagated widely. If the past is any guide, Xi’s rivals could still attempt to undermine him before and after the Fifth Plenum, but they would either have to engineer a Black Swan event or take advantage of one to effectively challenge Xi Jinping at this stage.
The content and timing of the release of the Regulations offer insight into the current balance of power in the CCP factional struggle. We will go over details of the documents in the following point, but in sum, the fact that Xi has not abolished the “collective leadership” system and instead emphasized his position in the Party through political slogans (Two Protections, etc.) indicates that he is not as all-powerful as appearances seem to suggest even though he might have the upper hand in the factional struggle. Also, the fact that Xi released the Regulations before the Fifth Plenum, likely with an eye on controlling what the Party’s elite can discuss at the key political conclave and ensuring that Xi can ram his agenda through, indicates that he is far from being unrivaled in the Party.
2. Below, we will spotlight and analyze key aspects of the Regulations and Notice.
a) The Notice emphasizes that the Regulations are intended to safeguard the “Xi core” (習核心) and the “Two Protections” (兩個維護, or the core status of General Secretary Xi and the central, unified leadership of the Central Committee). Departments and local governments are also expected to be consistent with the “CCP Central Committee with Comrade Xi Jinping at the core.”
The Regulations state that:
- “The Party leads everything,” and all Party organizations and members should “maintain a high degree of consistency with the CCP Central Committee” on a personal and political level.
- It is a “fundamental political requirement” for Central Committee members to uphold the “Two Protections.”
- “Xi Jinping New Era of Socialism With Chinese Characteristics” will be used to guide and educate the Party and the Chinese people as the PRC “adapts to new requirements of the new situation” (translation from Party speak: The Party and the country must listen to Xi’s orders as the CCP regime struggles to address growing domestic and external problems, including a rapidly slowing economy, worsening Sino-U.S. relations, and growing international hostility towards China.)
- In crafting policies, “the CCP Central Committee makes decisions on major issues concerning the Party and the state in accordance with the principles of collective leadership, democratic centralism, specific discussions, and committee determination.” (translation from Party speak: while the Party “collective” has a “democratic” process of deliberating major policies, Xi Jinping, the “core” of the Central Committee, will have the final say.)
Analysis
The Notice, mentions of “Two Protections” in the Regulations, and the use of certain phrasing make it crystal clear that the Party is supposed to safeguard Xi Jinping, even though the Regulations do not mention the phrase “Xi core.”
Xi Jinping cannot specify a “CCP Central Committee with Comrade Xi Jinping at the core” in the Regulations because they are supposed to be a set of general rules to be upheld across time, and there will one day be a Central Committee without Xi at the core since he is mortal. Of course, Xi could technically write the above formulation into the Regulation, but such a move would immediately signal to the Party that he has become as vainglorious as Chairman Mao; Mao, after all, wrote the fact that Lin Biao was his heir-designate into the CCP’s 1970 draft constitution, only for Lin to die trying to escape to the Soviet Union the following year, after allegedly being involved in a botched coup against Mao.
b) Several key political slogans and concepts are mentioned in the Regulations, including:
- “Xi Jinping New Era of Socialism With Chinese Characteristics” (2 mentions)
- “Two Protections” (3 mentions)
- “Quan wei of the Central Committee” (1 mention)
- “Centralized, united leadership” (3 mentions)
- “Collective leadership” (1 mention)
- “Democratic centralism” (2 mentions)
Analysis
The number of mentions referring to “Xi core” (the first four items listed above) outstrip those pertaining to “collective leadership” (the last two items). This suggests that Xi Jinping is still transitioning the Party from “consensus” rule (“collective leadership”) to “strongman” authoritarianism (“General Secretary Plus”).
c) The Regulations provide details on how high-level Party meetings are to be run:
- Meetings of the Central Committee, the Politburo, and the Politburo Standing Committee can be convened if more than half of their members are present (Central Committee: 103; Politburo: 13; Standing Committee; 4).
- Measures discussed during meetings will be passed by simple majority.
- The CCP General Secretary sets the meeting agenda for the Politburo and its Standing Committee.
Analysis
The Regulations grant Xi Jinping greater control over the Party elite and the process of passing decisions or policies. Concurrently, the Regulations suggest that Xi is not confident in his ability and “quan wei” to secure the backing of the majority of the Party elite at crunch time, and thus needs to build in “safeguards” to ensure that he can “game” the system to get his way when required.
On paper, Xi presently enjoys an advantage over his factional rivals in the Politburo and its Standing Committee. Of the seven members of the Politburo Standing Committee, three belong to the Xi camp (including Xi himself), two are in the “centrist” camp, and two are associated with the Jiang Zemin faction. And of the 25 members of the Politburo, 16 can be considered Xi camp (including Xi himself), five are “centrists,” and four are Jiang faction. However, Xi’s “advantage” could quickly evaporate given the fluidity of factions and the interest-driven nature of factional politics. Xi is almost certainly aware of this, hence the “simple majority” method of convening meetings and voting on measures; for example, Xi only needs the participation of four Politburo Standing Committee members (including himself) to call a meeting and the votes of two members pass a decision that the full Standing Committee would otherwise reject.
d) The Regulations provide details regarding the disciplining of elite officials:
- The replacement, probation, or expulsion of Central Committee full and alternate members shall be decided by a two-thirds vote of Central Committee members present during a plenary session. When a plenum is not in session, the Politburo may make a preliminary decision and ratify it later during an upcoming plenum.
Analysis
Xi Jinping will very likely be able to get his way on disciplinary decisions involving the Party elite due to the numerical advantage of the Xi camp in the Politburo. The Central Committee two-thirds vote requirement is merely a formalization process.
e) Members of the Politburo must seek guidance from the CCP Central Committee regarding “major decisions, major issues, and important situations.” Also, “important adjustments” made during the implementation of “major decisions, major issues, and important situations” must be approved by the Central Committee.
Analysis
Because the Central Committee is one with “Comrade Xi Jinping at its core,” Xi will review and have the final say over all “major decisions, major issues, and important situations.”
This arrangement is a double-edged sword for Xi. On the one hand, Xi is closing off channels to his factional rivals to implement measures without his knowledge and approval. On the other hand, Xi has created for himself a bottleneck of critical decision-making in the regime, a situation that his rivals will certainly seek to exploit.
