SinoInsight 1
Dec. 30
Xi Jinping chaired the 17th meeting of the Central Comprehensively Deepening Reforms Commission and delivered a keynote speech.
Highlights of Xi’s speech include:
- Xi stressed that since the Third Plenum of the 18th Party Congress (2013), Party Central has, with “unprecedented determination and strength,” broken through “the fetters of notions,” the “barriers of solidified interests,” the “shortcomings of various institutions and mechanisms,” the “risks and challenges brought about by changes in the external environment,” and started a “reform process with overpowering momentum that is unfolding on a tremendous scale” (氣勢如虹、波瀾壯闊的改革進程).
- The objectives and tasks identified by the Third Plenum of the 18th Congress are being “comprehensively carried out,” and the Party has made “great historical achievements in comprehensively deepening reform.”
- Xi said that “reforms over the years have witnessed the development of a series of innovative theories, the launch of a host of major initiatives, and a raft of major breakthroughs, all of which are revolutionary and have broken new ground in advancing the causes of the Party and the country toward historic achievements and changes through reform and opening-up.”
- “Historic achievements and changes” have come in the realms of “ideology,” “organizational reform,” “regime system and governance,” and “mass participation.”
- Xi stressed that the PRC still faces “complex contradictions and problems on the road to reform.” While the Party has “bite down on bone” several times, it needs to keep doing so in attacking the many problems facing the regime.
The meeting was attended by all seven members of the Politburo Standing Committee and deputy heads of the Commission. The meeting noted that centrally managed state-owned enterprises are an important Party organization and play a “leading role” in “setting direction, managing the overall situation, and promoting implementation.” Also, the relationship between Party Committees and top executives in SOEs should be “correctly handled.” The meeting further stressed that “ideological and political work” is a “fine tradition and political advantage” of the CCP.
Dec. 31
Party mouthpiece People’s Daily published an international commentary piece by the group of writers behind the “Guo Jiping” pen name titled, “Facts Speak Louder Than Words” (事實勝於雄辯).
The commentary rattled off the CCP’s various “achievements” in 2020, including “being the only major economy in the worth with growth,” securing victory in “three tough battles” (preventing and defusing financial risks, poverty alleviation, pollution control), making “significant progress in scientific and technological innovation,” seeing “important breakthroughs in reform and opening up,” and “vigorously safeguarding” people’s livelihoods. The commentary credited the “achievements” to the “strong leadership of Party Central with Comrade Xi Jinping at the core.”
Jan. 2
PRC foreign minister Wang Yi gave an extensive interview with state mouthpiece Xinhua. Highlights include:
- Wang said that 2020 was an “extraordinary year for China and the world,” and the “sudden onslaught of COVID-19 has accelerated the once-in-a-century transformation in an increasingly fluid and changing world.”
- “Unilateralism, protectionism and power politics are standing in the way of international cooperation.”
- “In China, the CCP Central Committee with Comrade Xi Jinping at its core has rallied the nation behind a common purpose, and secured major strategic gains in the fight against COVID-19.”
- “The resilience and dynamism of China’s development have won global recognition.”
- “Under the strong leadership of the CCP Central Committee with Comrade Xi Jinping at its core and following Xi Jinping Thought on Diplomacy, we have advanced China’s foreign relations by taking into account both domestic needs and the international context … Fighting the coronavirus and the ‘political virus’ at the same time, we have done our best to safeguard national interests and global stability.”
- The PRC has “helped erect an international bulwark against the coronavirus.”
- The PRC has “has deepened friendship and cooperation with all countries, making active efforts to develop relations with major powers, achieving solid progress in building a community with a shared future with neighbors, protecting and advancing the shared interests of the developing world, and working for a new type of international relations.”
- “We have responded resolutely and rationally to unjustified moves by the United States. We have handled issues relating to Taiwan, Hong Kong, Xinjiang and Tibet with justified, strong and proportionate countermeasures and won one fierce battle after another in international organizations, vigorously safeguarding China’s sovereignty, dignity and development interests.”
- “China-U.S. relations have come to a new crossroads, and a new window of hope is opening. We hope that the next US administration will return to a sensible approach, resume dialogue with China, restore normalcy to the bilateral relations and restart cooperation.”
- The PRC is “ready to develop with the United States a relationship based on coordination, cooperation and stability. China never meddles in the internal affairs of the United States and values peaceful co-existence and mutually beneficial cooperation with the United States. Likewise, the United States also needs to respect the social system and development path chosen by the Chinese people and respect their legitimate rights to pursue a better life.”
OUR TAKE
1. The CCP is taking a “victory lap” over the United States while seizing the opportunity to “spin tragedy into cause for celebration” (喪事當喜事辦).
Longtime SinoInsider readers will know the CCP is struggling with a “perfect storm” of domestic and external problems, particularly the coronavirus pandemic, the Sino-U.S. “new cold war,” severe economic deterioration, Chinese tech giants challenging Party dominance, poor harvest and food shortages, natural disasters, etc. The Chinese people and most of the world, however, are either unaware of or underestimate the seriousness of the problems plaguing the CCP, due to successful propaganda and influence campaigns, as well as a pro-China informational environment. Statements issued by the CCP should be critically evaluated with an understanding of Party characteristics (for e.g., when the CCP admits something is going wrong, the actual situation is far worse) to sieve out the grains of truth from the propaganda. Likewise, CCP data is heavily manipulated (for e.g., “calculated according to a comparable caliber”) and rarely reflects reality accurately. Accounting for the Party’s propaganda spin, the many “achievements” in 2020 are inflated.
The CCP is particularly exuberant in touting its “achievements” last year partially due to the aftermath of the 2020 U.S. presidential election. Beijing believes it will deal with a compromised Biden administration pursuing a “competition without confrontation” China policy, as well as a fractured United States with both sides of the political aisle disillusioned with democracy. With its greatest geopolitical rival seemingly sidelined by domestic political and ideological turmoil, the CCP is emboldened to deploy celebratory rhetoric without fearing repercussions.
2. Xi Jinping’s speech to the 17th meeting of the Central Comprehensively Deepening Reforms Commission encapsulates what we have laid out above, while also revealing his and the CCP’s vulnerabilities.
First, Xi’s points about overcoming institutional inertia to reform since the Third Plenum of the 18th Congress in 2013 allude to his problems with factional struggle and why he moved to aggressively consolidate power from his first term. Resistance from the Jiang Zemin faction and other CCP interest groups meant that the Xi leadership struggled immensely to effectively ram through reform; Li Keqiang famously pounded his desk in frustration and boycotted the opening of the Shanghai Free-Trade Zone when he realized that Jiang faction elements in Shanghai were blocking his reform blueprint. The Xi leadership continued to face massive resistance to reform after Xi took over reform duties from Li Keqiang and the PRC State Council via the establishment of the Central Comprehensively Deepening Reforms Commission. Xi has indeed tackled institutional inertia with “unprecedented determination and strength” since 2013, particularly by purging the Jiang faction and other factional elements from the government through anti-corruption campaigns. However, we remain skeptical that Xi has made significant headway in overcoming those “barriers of solidified interests,” or that he resolved the age-old problem of orders failing to make it beyond the gates of CCP headquarters in Zhongnanhai (政令不出中南海).
Second, Xi is talking up his reform “achievements” now to lay groundwork for the 20th Party Congress in 2022. As we previously analyzed, Xi is expected to “break” recent Party governing norms (these are more malleable than what most experts believe) and campaign for a third term at the 20th Congress, which requires amassing political results in the interim. Xi, however, has virtually no real political achievements worth bragging about beyond the anti-corruption campaign since taking office in 2012, and thus is forced to “spin tragedy into cause for celebration” and take credit for dubious “achievements.” For instance, Xi took the Party backwards in economic, organizational, and “regime system and governance” reforms by marginalizing the “collective leadership” and promoting a techno-totalitarian, one-man dictatorship. Of course, most of Xi’s policy failures in the past four years can legitimately be reframed as real success if former vice president Joe Biden is irrefutably confirmed as the winner of the 2020 U.S. presidential election this month. A Biden victory will cast Xi as a “strategic genius” who “delayed and waited for change” (以拖待變), greatly boost his “quan wei” (權威) in the Party, and minimize problems pertaining to the factional struggle in the CCP elite.
Lastly, Xi Jinping is likely feeling confident about talking up his reform and other political “achievements” now because he and the CCP believe America is under their sway with Team Biden in charge. This is especially clear from Di Dongsheng’s boast about elite capture in America. State legislature hearings on election fraud, as well as U.S. intelligence assessment, have also evidenced CCP interference in the 2020 U.S. presidential election and the upcoming Georgia Senate race. Given the success of communist subversion and infiltration of American politics and society, the CCP likely expects only minimal pushback in the great power competition with the United States going forward regardless of what it says or does.
3. Xi and the CCP might be celebrating prematurely. Currently, legal and constitutional challenges to the 2020 U.S. presidential election are still in play. According to various news reports, at least 140 Republican House members and 12 Senators intend to object to the certification of the election results on Jan. 6 when Vice President Mike Pence is supposed to count the electoral college votes. Eleven of the 12 Senators are calling for an emergency 10-day audit of the election results in disputed states by an election commission appointed by Congress.
Pence’s sympathies appear to lie with the objectors. Marc Short, his chief of staff, said in a statement that the vice president shares “the concerns of millions of Americans about voter fraud and irregularities” and “welcomes the efforts of members of the House and Senate to use the authority they have under the law to raise objections and bring forward evidence before the Congress and the American people.”
The re-election of President Donald Trump will come as a Black Swan event for the CCP and the international community. To sidestep Black Swan risks, businesses, investors, and governments are advised to wait until the election result is confirmed before betting on China.
SinoInsight 2
On Dec. 31, the Hong Kong Youth Care Association (HKYCA; 青關會), a pro-CCP, anti-Falun Gong organization in Hong Kong, officially disbanded, according to overseas Chinese language media. The HKYCA subsequently dismantled its street booths slandering Falun Gong positioned near the latter’s “truth clarification sites” across Hong Kong. Two days earlier, a Hong Kong pro-democracy activist prominently informed local journalists that the HKYCA was disbanding and that they were invited to “witness” its official dissolution of its anti-Falun Gong booth in Causeway Bay.
According to the Hong Kong edition of Dajiyuan (The Epoch Times), an unnamed source revealed that Xi Jinping personally ordered the disbanding of the HKYCA because the group had been “violently attacking Falun Gong in the streets for many years, affecting Hong Kong’s image as an international financial hub.”
The HKYCA was founded on June 8, 2012, and first started attacking Falun Gong practitioners two days later on June 10. The date the HKYCA began anti-Falun Gong operations is not happenstance; the Party agency that oversaw the persecution of Falun Gong in the mainland is known as the “610 Office” because it was established on June 10, 1999, by then-Party boss Jiang Zemin. Over time, the HKYCA expanded its thuggish operations to include harassment and intimidation of Hong Kong pro-democracy or anti-CCP activists.
The 610 Office was officially disbanded in 2018. However, the persecution of Falun Gong is still on the books, and currently falls under the purview of the Central Political and Legal Affairs Commission headed by Jiang faction member Guo Shengkun.
OUR TAKE
1. The persecution of Falun Gong is the most controversial aspect of Jiang Zemin’s political legacy and a critical issue in the CCP factional struggle between the Jiang faction and the Xi camp. Xi Jinping has leveraged the “Falun Gong card” on several occasions over the past eight years to push back against the once-dominant Jiang faction and force them into compromises. Meanwhile, the Jiang faction has strived to prolong the persecution and stop Xi from holding them accountable for the brutal campaign, which includes forced organ harvesting and other human rights atrocities currently being inflicted upon the Uyghurs in Xinjiang.
The founding of the HKYCA in June 2012 is almost certainly a direct consequence of the Xi-Jiang factional struggle. Earlier that year, the Jiang faction suffered a grievous blow with the purge of Chongqing boss and top Jiang lieutenant Bo Xilai following the Wang Lijun incident. Bo was Jiang Zemin’s preferred candidate to succeed Hu Jintao because he was no threat to Jiang’s political legacy; after all, Bo rose rapidly through the official ranks on Jiang’s advice to build political capital by diligently executing the Falun Gong persecution campaign. In contrast, Xi Jinping’s stance on Falun Gong was unclear, and the Jiang faction feared he could find reasons to undo their chief patron’s political legacy, especially with Bo Xilai already purged (for a loose historical parallel, Zhao Ziyang was purged and his allies sidelined after the Tiananmen Square Massacre to preserve Deng Xiaoping’s political legacy). Thus, for factional interests and self-preservation, the Jiang faction established the HKYCA, a move which signaled to the world that the CCP would not abandon the Falun Gong persecution campaign under Xi Jinping while tying the latter to Jiang Zemin’s legacy.
2. It is plausible that the HKYCA was disbanded because the CCP now has the Hong Kong National Security Law (NSL) and the supra-authority National Security Commission (NSC) in place. Instead of mobilizing what is essentially a group of paid ruffians (HKYCA), the Hong Kong government and the CCP can simply summon the Hong Kong police to perpetuate its persecution campaign against Falun Gong. The CCP likely believes it can get away with using the Hong Kong police against Falun Gong because Team Biden is unlikely to take any effective action against the PRC over human rights abuses in Hong Kong.
Another valid hypothesis is that the CCP is cutting costs to alleviate financial problems and fiscal shortages. With the NSL and the NSC, the CCP no longer requires a “duplicate” organization like the HKYCA to target Falun Gong in Hong Kong, and can thus save money by disbanding the group.
We are unconvinced about the reasoning put forth by Dajiyuan’s source that Xi Jinping’s motive in disbanding the HKYCA is for it “violently attacking Falun Gong in the streets for many years” and “affecting Hong Kong’s image as an international financial hub.” Gangster tactics are the CCP’s bread-and-butter, and its “wolf warrior” diplomacy shows it has no qualms about saving “face” or cultivating its violent “image” when it comes to attacking individuals or groups that defy and expose the Party. It is plausible, however, that Xi disbanded the HKYCA to send a message to the Jiang faction or for other related factional struggle reasons.
