SinoInsight 1
On May 1, Qiushi, the CCP Central Committee ideological journal, published an article by Zhang Qingli on his experience with learning Party history as part of Xi Jinping’s recent campaign on Party history learning and education. Zhang is a vice chairman and deputy Party secretary of the central Chinese People’s Political Consultative Conference.
Main points in Zhang Qingli’s article include:
1. Zhang opened his piece by quoting from Xi’s speech at the Party History Learning and Education Mobilization Conference. Xi said, “Having a clear-cut stand in speaking about politics, as well as preserving Party unity and centralization, is the life of the Party.” Doing so is crucial to the CCP becoming a “century-old Party” and “creating great causes of the century,” Xi added. After citing Xi, Zhang wrote, “[we need to] more consciously unite around Party Central with Comrade Xi Jinping at the core, and forge ahead in unity.”
2. Zhang Qingli made an effort to flatter and burnish Xi Jinping’s leadership and accomplishments in the classic CCP “great, glorious, and correct” (偉光正) style. He also stressed the “extreme importance” of safeguarding the “Xi core,” as well as the “quan wei” and centralized leadership of Party Central. For example, Zhang praised Xi for leading the Party and the regime to “historic achievements and historic changes” despite the “severe and complex domestic and foreign situation” since the 18th Party Congress in 2012. He added, “there is a sharp contrast between ‘China governance’ (under Xi) and ‘Western chaos.’”
3. Zhang cites Marx and Engels’s assessment of the failure of the Paris Commune—“a lack of centralization and authority”—to illustrate the importance of safeguarding the “quan wei” and centralized leadership of Xi’s Party Central. Zhang then pulls up examples from CCP history of disunity in the leadership, including Party founding member Zhang Guotao splitting the Red Army and establishing “another Party Central,” and senior CCP leader Wang Ming refusing to obey the leadership of Party Central.
Zhang noted that Mao Zedong clashed with Wang Ming and Zhang Guotao, launched the Yan’an rectification movement to oppose “sectarianism,” and helped the “whole Party to further deepen their understanding of the significant meaning of safeguarding Party unity and centralized leadership, and turn it into a conscious movement.” Mao’s efforts “laid solid ideological and political foundations for wrestling important victories in the Sino-Japanese War and the liberation of the nation (from the Kuomintang),” Zhang wrote.
4. In concluding, Zhang Qingli wrote that the central CPPCC should not just say in words, but put into action the implementation of “safeguarding Party unity and centralized leadership.”
OUR TAKE
1. Zhang Qingli’s Qiushi article is thematically similar to Xi Jinping’s visit to the memorial park commemorating the Battle of Xiangjiang during his Guangxi inspection tour in late April. To recap and summarize:
- The CCP is facing unprecedented domestic and foreign troubles today, not unlike those facing the founding revolutionaries before the establishment of the PRC. Thus, Xi wants the whole Party to unite around himself just like how the Party rallied around Mao Zedong back in the day so that he, like the Chairman, can lead the CCP out of turmoil and on to “victory.”
- Xi is tapping into CCP history (Battle of Xiangjiang memorial, publishing a new edition of “A Brief History of the Communist Party of China,” etc.) and drawing parallels between his and Mao’s plight to boost his “quan wei” and make the case for why he deserves a norm-breaking third term in office come the 20th Party Congress despite policy and governance failures.
- Xi is calling attention to specific historical episodes about Mao and factional struggle (Mao versus the Bo Gu-Otto Braun-Zhou Enlai triumvirate at Xiangjiang, and Mao versus Zhang Guotao and Wang Ming, etc.) to indicate that he faces similar factional/“sectarian” problems today. Xi wants the Party to follow the leadership of his Party Central instead of that of other “Party Centrals,” and is warning those who oppose him that he will deal with them like how Mao handled his factional rivals unless they unite around Xi.
- Xi is cautioning that if the Party does not come to a consensus to “safeguard the ‘quan wei’ and centralized leadership” of Xi’s Party Central and instead supports other “Party Centrals,’ then the CCP is destined to “perish together” and fail like the Paris Commune.
Articles like the one by Zhang Qingli and the Xinhua’s explainer of why Xi Jinping attaches importance to the Battle of Jiangxiang are designed to clarify the “politically correct” way of reading Xi’s historical references and what precise lessons Party members should draw from them. At the individual level, Zhang’s essay is a pledge of loyalty to Xi, an effort to get the CPPCC and other Party organizations to unite behind the CCP General Secretary, and an attempt to lower his personal political risks amid ongoing “rectification” campaigns.
2. In reading between the lines of Xi’s recent historical references, it is clear that:
- Xi recognizes that today’s Communist China faces very serious, regime-threatening domestic and external problems (see previous newsletters for examples).
- Xi implicitly acknowledges that officials are still not really listening to him or implementing his policies properly despite his status as “core” leader of the CCP. Xi is aware that the presence of other “Party Centrals” during the Hu era, notably an immensely powerful political and legal affairs apparatus under Jiang faction lieutenant Zhou Yongkang, meant that Hu Jintao and Wen Jiabao’s orders frequently “did not make it out of the gates of Zhongnanhai” (政令不出中南海), the Party headquarters in Beijing.
- Xi is very concerned that “another Party Central” is undermining him at a critical time when the CCP is struggling with existential crises. The fact that Zhang Qingli’s essay explicitly mentions “another Party Central,” cites Mao Zedong’s struggle with Zhang Guotao and Wang Ming, and keeps harping on the need for the whole CCP to unite behind the “‘quan wei’ and centralized leadership” of Xi’s Party Central indicates that factional fighting in the CCP elite (Xi-Jiang struggle) is currently very fierce.
- Xi is worried that he still lacks “quan wei” to overcome his opponents, and hence keeps comparing himself with Mao to “borrow” the Chairman’s “quan wei.” Put another way, if Xi had sufficient “quan wei,” he would not need to explain his visit to the Battle of Xiangjiang memorial garden and Zhang Qingli need not write his essay.
- Xi is hinting that he will fight like Mao to secure his leadership over the Party—even if it means “perishing together” with his factional rivals.
3. The publication of Zhang Qingli’s article in Qiushi and the ominous political themes it contains are minor leading indicators that factional struggle in the CCP elite is heading into showdown territory.
Xi Jinping is essentially informing the Jiang faction and the “anti-Xi coalition” that they should acknowledge his “quan wei,” stop interfering with his governance, and allow him to take a third term at the 20th Party Congress. Otherwise, Xi will be “forced” to go hard on his factional rivals—even if it means scuttling the ship—because only a united CCP in total consensus with Party Central can hope to navigate the regime through treacherous domestic and geopolitical waters and onward to “victory.”
Businesses, investors, and governments must track CCP factional struggle developments to avoid being blindsided by political Black Swans in China.
SinoInsight 2
May 2
In an interview with CBS 60 Minutes, Secretary of State Antony Blinken said, “But I want to be very clear about something, and this is important: Our purpose is not to contain China, to hold it back, to keep it down. It is to uphold this rules-based order that China is posing a challenge to. Anyone who poses a challenge to that order, we’re going to stand up and defend it.”
When asked about human rights and Xinjiang, Blinken said, “We’ve made clear we see a genocide having taken place against the Uyghurs in Xinjiang.” As for whether Xinjiang constitutes a “red line” for the United States, Blinken replied, “Look, we don’t have the luxury of not dealing with China. There are real complexities to the relationship, whether it’s the adversarial piece, whether it’s the competitive piece, whether it’s the cooperative piece.”
May 4
1. Kurt Campbell, the White House National Security Council Coordinator for the Indo-Pacific, rejected calls for the U.S. to more explicitly state its willingness to defend Taiwan during a discussion hosted by the Financial Times. “I believe that there are some significant downsides to the kind of what is called strategic clarity that you lay out,” he said.
Campbell added that Sino-U.S. conflict over Taiwan would unlikely be limited to a small geographic area. “I think it would broaden quickly and it would fundamentally trash the global economy in ways that I don’t think anyone can predict,” he said.
Campbell’s remarks come amid an ongoing public debate about whether the PRC would invade Taiwan and whether the U.S. should uphold its commitments to the ROC. In an April 28 piece in the Council on Foreign Relations magazine Foreign Affairs, George Washington University professor Charles L. Glaser argued that for America, which he labeled a “declining power,” the best option “may be to cut back on its commitments. In East Asia, that would mean giving Beijing greater leeway in the South China Sea, letting go of Taiwan, and accepting that the United States is no longer the dominant power it once was in the region.” On May 5, The New York Times ran an opinion piece titled “Biden’s Taiwan Policy Is Truly, Deeply Reckless” that argued that the Biden-Harris administration is deviating from “strategic ambiguity” and that its “policy toward Taiwan is meaningfully increasing the risk of world war.”
2. The European Commission indicated that it was suspending efforts to ratify the EU-China comprehensive agreement on investment (CAI). “We now in a sense have suspended … political outreach activities from the European Commission side,” said the commission’s executive vice-president Valdis Dombrovskis. However, an EU spokeswoman said a day later that Dombrovskis remarks were taken out of context.
3. According to a Reuters report, Taiwan Semiconductor Manufacturing is planning to build up to five additional fabrication plants in Arizona. The plants will produce 20,000 wafers every month “using the company’s most sophisticated 5 nanometre semiconductor manufacturing technology.” A person with direct knowledge of the matter told Reuters that TSMC’s expansion was a response to a request by the United States.
One person with direct knowledge of the matter told Reuters the expansion was in response to a request from the U.S., but declined to provide further details.
4. U.S. Treasury Secretary Janet Yellen suggested that the Federal Reserve might have to raise interest rates to deal with inflation if Biden’s $4 trillion spending plans are enacted, but later walked back her statement.
“I don’t think there’s going to be an inflationary problem, but if there is, the Fed can be counted on to address it,” Yellen said at The Wall Street Journal’s CEO Council Summit.
Earlier, she said in a pre-recorded interview at the Atlantic’s Future Economy Summit that “It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat, even though the additional spending is relatively small relative to the size of the economy.”
May 5
1. The G7 Foreign and Development Ministers’ Meeting communique said that the countries “encourage China, as a major power and economy with advanced technological capability, to participate constructively in the rules-based international system. It is in all of our interests, including China’s, to take action that addresses global challenges including climate change and biodiversity loss, to promote economic recovery from COVID-19 and to support the fight against the current pandemic and prevent future ones. We look for opportunities to work with China to promote regional and global peace, security and prosperity.”
The communique also called on the PRC to “respect human rights and fundamental freedoms” and expressed concern “about human rights violations and abuses in Xinjiang and in Tibet.” Further, the G7 said it was “gravely concerned by China’s decision fundamentally to erode democratic elements of the electoral system in Hong Kong.”
The communique “urge[s] China to assume and fulfil obligations and responsibilities commensurate with its global economic role” and “encourage[s] China to uphold its commitments to act responsibly in cyber space, including refraining from conducting or supporting cyber-enabled intellectual property theft.”
On Taiwan, the communique “support[s] Taiwan’s meaningful participation in World Health Organisation forums and the World Health Assembly” and “underscore[s] the importance of peace and stability across the Taiwan Strait, and encourage the peaceful resolution of cross-Strait issues.” Also, the G7 “reiterate[s] our strong opposition to any unilateral actions that could escalate tensions and undermine regional stability and the international rules-based order and express serious concerns about reports of militarization, coercion, and intimidation in the region.”
2. According to a Financial Times report, Michael Bloomberg, Henry Kissinger and Hank Paulson picked Singapore instead of China to host Bloomberg’s annual New Economy Forum. They cited Singapore’s COVID-19 safety record and “‘very concerning’ conditions in China for journalists” as reasons for the venue switch.
In commenting on U.S.-China relations, Kissinger said that the Biden-Harris administration seems to be “moving towards a negotiation on a broad front in which the two major countries are trying to reset their relations to each other.” He added, “The language still has an adversarial character but I think the circumstances are better now.”
Kissinger and Bloomberg also cautioned the U.S. against pushing the PRC too strongly on human rights. “We should not use the human rights issue as a deliberate issue to undermine the existing structures, because if we do that, we will be in a permanent confrontation,” Kissinger said. Bloomberg added that “businesses understand that there’s no simple answer to cultural differences when you have to work together,” and that climate change is the most important issue for both countries to work together on. Meanwhile, Paulson said that while the Sino-U.S. relationship will remain “fraught for the foreseeable future,” business has “historically been and can continue to be a ballast for this relationship, to help ensure things don’t spiral out of control.”
OUR TAKE
1. Secretary Blinken’s comments about not containing, holding back, or keeping down the PRC, as well as his call for Communist China to uphold the rules-based international order, appears to be a rehash of pro-China remarks made by his colleague National Security Advisor Jake Sullivan during a lecture at the Lowy Institute in 2017. At the time, Sullivan said that a foreign policy expert was “right” to warn against containment, and that “we need to strike a middle course—one that encourages China’s rise in a manner consistent with an open, fair, rules-based, regional order.” He would later make more mentions in the lecture of the idea of a “rising China” and how the U.S. should foster such an environment.
Blinken and the G7’s view of “encouraging” the PRC to participate in the rules-based international system is naive at best and at worst disingenuous. The CCP has long infiltrated and subverted the post-World War II international order. Many PRC nationals currently hold top positions in key international organizations like the United Nations, as well as international trade and financial institutions like the IMF and the World Bank. Former Secretary of State Mike Pompeo told UK lawmakers last year that there is “firm intelligence” that the CCP has “bought” World Health Organization director-general Tedros Adhanom Ghebreyesus; previous WHO heads are known to be swayed by Beijing. And in his speech titled, “Communist China and the Free World’s Future,” Pompeo noted that the CCP represents a “complex new challenge that we’ve never faced before. The USSR was closed off from the free world. Communist China is already within our borders … If the free world doesn’t change, Communist China will surely change us.”
The CCP will no doubt be delighted with the rhetoric and stance of Blinken and the G7. The Biden-Harris administration’s failure to present a clear-eyed view of the CCP threat and efforts at encouraging the brutal regime to become a so-called “responsible stakeholder” and major power in the CCP-hijacked international order will embolden Communist China to act with greater impunity in advancing its global hegemonic agenda (building a “community of shared future for mankind” under CCP rule). While the PRC will still complain “bitterly” about Western “containment” and “cold war mentality,” their actions show that they are far less afraid of the U.S. under President Joe Biden than under President Donald Trump. For example, the CCP has mostly refrained from attacking Biden’s China officials in its propaganda, but has no qualms with going full “wolf warrior” on Secretary Blinken and National Security Advisor Jake Sullivan during a recent in-person bilateral meeting in Alaska. In contrast, Yang Jiechi, who attended the Alaska meeting, was on his best behavior during his meetings with Secretary Pompeo, and the CCP only felt comfortable in expressing their displeasure towards Pompeo and the Trump administration through propaganda.
2. The Biden-Harris administration’s recent public comments about China further suggests that Washington is adhering to an “anti-Xi, not anti-CCP” strategy released by an establishment think-tank soon after President Biden took office. Meanwhile, the G7 communique indicates that the G7 countries are following America’s lead on China. Going forward, we can expect the U.S. and its allies to get tough with the PRC on specific issues (Xinjiang, Hong Kong, Taiwan, increased repression and aggression under Xi, etc.) that hurt Xi Jinping, while signaling a willingness to resume “business as usual” with China if it reverts to the pre-2013 (i.e. post-Xi) status quo. Doing so leverages splits in the CCP elite against Xi and greatly heightens his personal political risks. Xi is also vulnerable to shocks to Communist China’s economy if the U.S. raises rates this year and money leaves the mainland too rapidly.
As things currently stand, Sino-U.S. relations are on track to develop per the first or second of three potential scenarios that we outlined in analyzing the Biden-Harris administration’s interim national and foreign policy strategies.
3. Taiwan should be safe from CCP invasion at least this year and the next. Xi Jinping is currently struggling with a “perfect storm” of domestic and geopolitical problems, including factional fighting ahead of the 20th Party Congress in 2022. Meanwhile, the U.S. and its allies have incentive to stand up to Xi’s CCP, especially if they are pursuing the “anti-Xi, not anti-CCP” strategy.
The U.S., however, has less incentive to stick to its commitments when dealing with a post-Xi PRC. “Strategic ambiguity” leaves Taiwan at risk of being “ceded” to Communist China in the long term (decade-plus), especially when CCP leaders who are more friendly to Western establishment elites are in office and leading Taiwanese chip manufacturers like TSMC have established supply chains in the United States (trading away Taiwan’s strategic value to the U.S. and the world).
