SinoInsight 1
On June 6, state mouthpiece Xinhua published a piece titled “Manifesto: Socialism Has Not Failed China” (宣言：社会主义没有辜负中国). The piece was the lead article on Xinhua’s website, and was republished by other Party and state media outlets.
A little over twenty-four hours later, Xinhua ran a piece titled “Manifesto: China Has Not Failed Socialism” (中国没有辜负社会主义). The piece was again the lead article on Xinhua’s website, and was shared even more widely by Party and state media.
The two Xinhua “Manifestos” may sound similar, but they send contrasting messages:
===
First ‘Manifesto’
Word breakdown
- 6,107 words, five sections
- Mentions of Xi Jinping: 4
- Mentions of Mao Zedong: 3
- Mentions of Deng Xiaoping: 1
- Mentions of Jiang Zemin and his “Three Represents”: 0
- Mentions of Hu Jintao and his “Scientific Outlook on Development”: 0
Title
“Socialism Has Not Failed China,” with the focus on how “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era” is revitalizing China.
Opening
The first “Manifesto” recalls Xi Jinping’s speech at the Party History Study and Education Mobilization Conference on Feb. 20, 2021, using it to spotlight Xi’s “quan wei” and set the tone of the piece (“Xi Thought” is revitalizing China). In a previous newsletter, we wrote that Xi is rewriting and promoting Party history to boost his “quan wei” and establish a theoretical basis to justify his bid for a norm-breaking third term in office at the 20th Party Congress in 2022.
Sections one to three
The first three sections argue that “firm belief” and “firm conviction” in the CCP allowed the regime to overcome everything; no matter how severe setbacks may be, “the Party leads the people in exploring the path of socialism from beginning to the end, always moving forward.” This echoes Xi’s recent remarks in commemorating the Battle of Xiangjiang, where he stressed that “sky-high revolutionary ideals and persistence in the most difficult times” can help the PRC continually achieve “miraculous victories.”
Section four
The section focuses on defining socialism and “building socialism.” The section notes that Deng Xiaoping stopped using “class struggle as a guiding principle” to advance socialism and instead concentrated on economic development through “reform and opening up.” The Party then worked towards realizing the “primary stage of socialism,” which comprises the two stages of reaching a “moderately prosperous society” and “modernization.” Finally, the section notes that the PRC’s present “achievements” in the face of many adversities is the result of over four decades of perseverance in “reform and opening up.”
Section five
The entire section plays up the “political achievements” of the PRC under Xi Jinping, including “comprehensively deepening reforms; comprehensively ruling the country by law; comprehensively establishing a moderately prosperous society, comprehensively governing the Party strictly,” poverty alleviation, the space program, controlling the coronavirus epidemic, etc. The section also makes the case for China’s “bright prospects” in the “new era” under the leadership of Xi Jinping.
===
Second ‘Manifesto’
Word breakdown
- 5,868 words, four sections
- Mentions of Xi Jinping: 6
- Mentions of Mao Zedong: 1
- Mentions of Deng Xiaoping: 1
- Mentions of Jiang Zemin: 0
- Mentions of Jiang’s “Three Represents”: 1
- Mentions of Hu Jintao: 0
- Mentions of Hu’s “Scientific Outlook on Development”: 1
Title
“China Has Not Failed Socialism,” with the focus on how “Socialism With Chinese Characteristics,” a derivative of Marxism, has brought “success” to China and actualized Karl Marx’s ideology.
Opening
The section opens with a glorification of Karl Marx, who “transformed socialism from a utopian vision to a science.” The second paragraph recalls Xi Jinping’s speech on the 95th anniversary of the CCP in 2016, but represents it as the Party’s “declaration to the world” of how the PRC is an example of the success of the “500-year-old socialist proposition” and how socialism is the “correct path” for China. This contrasts sharply with the first “Manifesto,” where Xi is promoting his revised Party history.
The section also credits “Socialism With Chinese Characteristics” with delivering a “grand victory” for the Chinese people, and notes that it stems from socialism.
Sections one and two
Marxism’s contributions to the development of Chinese socialism are highlighted, with the PRC’s present “achievements” being attributed to Marxist thought. Moreover, “Sinicized” Marxism is credited with the production of Mao Zedong Thought, Deng Xiaoping Theory, “the important thought of the ‘Three Represents’” (Jiang Zemin’s political thought, but he is not named), and “Scientific Outlook on Development” (Hu Jintao’s political thought; as with Jiang, he is not mentioned by name). Meanwhile, “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era” is described as the “historical accumulation” of an “ideological new Long March,” a climb down from the political theory behind the “revitalization” of the PRC as billed in the first “Manifesto.”
Section three
The section focuses on the CCP’s construction of socialist system in China, with an emphasis on the leadership of the Party and “Chinese-style democracy.” Discussion of the aforementioned topics inevitably reminds those who follow CCP elite politics of Xi’s moves to marginalize the collective leadership system.
Section four
The section stresses that socialist values are “Socialism With Chinese Characteristics,” but avoids mentioning Xi’s political thought.
OUR TAKE
1. Both “Manifestos” talk about socialism and seem to have similar titles, but their content could not be more different. The first “Manifesto” casts Xi Jinping as the leading figure in driving Chinese socialism and credits him with the PRC’s present achievements. “Xi Jinping Thought” is “retconned” as an important part of CCP history that deserves to be mentioned in the same breath as the political theories of Mao and Deng, despite Xi’s political thought being introduced barely four year ago and the PRC seeing more failures than successes in Xi’s second term.
In sharp contrast, the second “Manifesto” places “Xi Jinping Thought” as merely the most current political theory in the Marxist tradition in the second “Manifesto,” and one that is established on the basis of political theories of past PRC leaders. Also, Xi is regarded as being just the latest communist leader in a long line of revolutionaries who embraced the ideology of Karl Marx, and not the great deliverer of “bright prospects” in the “new era.”
2. The emergence of the second “Manifesto” and its time of publication—just over a day after the first “Manifesto” was posted on the Xinhua home page—is highly suspicious. As we previously analyzed, Xi Jinping is struggling to boost his “quan wei” ahead of the 20th Party Congress, and has even taken to revising Party history to better make his claim for a third office term come 2022. It does not make sense for Xi to be “objective” by crediting Marxism (or more specifically, the Marxism-derived “Socialism With Chinese Characteristics”) for the PRC’s accomplishments with the second “Manifesto” when he badly needs to assign that credit to himself and has already done so with the first “Manifesto.” Put another way, Xi may be ideological and a “true believer” in Marxism-Leninism, but not to the point where he goes out of his way to shoot himself in the foot.
Therefore, we strongly suspect that factional elements opposed to Xi were behind the second “Manifesto.” Those behind it evidently have an axe to grind with Xi over his “revisionism” of Party history. The release of the second “Manifesto”—just three weeks before the CCP centennial celebration on July 1—appears to be timed to deliver maximum embarrassment to the General Secretary. Party officials and China watchers who are familiar with CCP culture, operations, and factional struggle would gather from the two contrasting “Manifestos” that powerful factional forces, or the unnamed “another Party Central” alluded to in a May Qiushi essay, are actively resisting Xi and preparing for a showdown. It is worth mentioning at this juncture that the Jiang faction held strong sway over the CCP propaganda apparatus during its era of domination (1997 to 2012), and the “permanent bureaucracy” inside the apparatus may not be fully loyal to Xi despite multiple purges and personnel reshuffles over the past nine years. We would not be surprised to see subsequent “rectifications” in the propaganda apparatus (like the ongoing campaign targeting the political and legal affairs apparatus) if Xi is looking to “kill chickens to scare monkeys” and ensure that “Party media is surnamed the ‘Party’” (黨媒姓黨).
3. It does not seem coincidental that Xi Jinping appears to be attacked internally just when Washington and the international community are ramping up pressure against Beijing. Issues like Xinjiang, Taiwan, Hong Kong, and the origins of the coronavirus—all of which directly implicate Xi—are gaining greater traction and exposure in the mainstream, while the Biden-Harris administration and Congress have rolled out one China measure after another in the past fortnight (see here, here, here, here, and here). As we anticipated in our China 2021 Outlook, the Biden-Harris administration could be “‘anti-China’ in ways that would affect Xi Jinping personally, particularly with regard to Xinjiang, Taiwan, and Hong Kong.”
Also, as we observed in an earlier newsletter, an establishment think-tank recently identified the CCP’s centennial celebrations in July, the 2022 Winter Olympics in Beijing, and the 20th Party Congress near the end of 2022 as “important events whose success is critical to Xi’s long-term political fortunes and national ambitions.” It is very likely that international establishment elites are taking advantage of the “sensitive” period ahead of the CCP centennial to heap pressure on him and erode his “quan wei.”
The emergence of the second “Manifesto” suggests that the “anti-Xi coalition” in China is currently working in tandem with those outside to take down Xi Jinping. We hinted at this development in analyzing the “anti-Xi, not anti-CCP” U.S. strategy against China published in January by an establishment think-tank. Increased Sino-U.S. tensions in strategic areas will give Xi’s domestic rivals greater reason to heap on the pressure, including demanding accountability from him for bringing a modern-day “Eight-Nation Alliance” (八國聯軍) to China’s doorstep with his policies.
Xi’s personal political risks are rising steeply, and political Black Swans are just on the horizon in China. Businesses, investors, and governments must track developments in CCP elite politics and China-related geopolitics to mitigate risks.
SinoInsight 2
June 7
Xi Jinping arrived in Qinghai Province on an inspection tour. He was accompanied by close allies Ding Xuexiang (CCP General Office director), Liu He (vice premier), Chen Xi (Organization Department director), and He Lifeng (National Development and Reform Commission head).
June 8
1. Hu Xiaogang (age 58), the vice president at China Great Wall Asset Management Co. and the former vice president at China Orient Asset Management Co., was investigated by the anti-corruption authorities for “serious violations of law and discipline.”
Hu spent the bulk of his career at China Orient Asset Management (September 1999 to November 2018) before moving on to China Great Wall Asset Management. Both companies, along with Huarong Asset Management and China Cinda Asset Management, are the four major state-owned bad-debts managers in China.
China Orient Asset Management was established by the PRC finance ministry and the National Social Security Fund. As of the end of 2020, the company held consolidated assets exceeding 1.14 trillion yuan.
2. Taiwan’s state-run media Central News Agency (CNA) reported that PRC police in several provinces in northern China carried out mass inter-provincial arrests of Maoists on May 12. The Maoists and their organizations later referred to the crackdown as the “512 arrests” after the date on which they occurred.
One of the first Maoists to be arrested was Ma Houzhi, a 77-year-old professor of Qufu Normal University in Shandong Province and a prominent figure in the movement. In 2009, Ma established the “Chinese Maoist Communist Party” in Chongqing and pushed in a high-profile manner for then-Chongqing Party boss Bo Xilai to serve as its “General Secretary”; at the time, Bo was pushing a Maoist “Singing Red, Striking Black” campaign in Chongqing. Subsequently, Ma was arrested and sentenced to 10 years in prison on charges of “subverting state power,” and was only released on Oct. 14, 2019.
Other prominent Maoists arrested on May 12 include Liu Qingfeng, Fu Mingxiang, Hu Jiahong, Nie Jubao, and Wu Ronghua. CNA sources believe that the Maoist camp crackdown is part of Beijing’s “stability maintenance” effort ahead of the CCP’s centennial celebration on July 1.
June 9
WeChat Security Center announced on its official WeChat account that it would immediately “clean up” accounts that “spread historical nihilism, slander Party history, hype up scandals” and push other such problematic content. Accounts that have been flagged for problematic content or deliberately use various means to provoke “malicious confrontation” will be permanently banned.
OUR TAKE
1. The return of Xi Jinping’s usual inspection tour entourage (Liu He and Chen Xi) refutes recent speculation of discord in the Xi camp that was fueled by leaks of “damaging information” in international media.
The public appearance of Liu He and others also affirm our previous analyses (see here and here).
2. The investigation of Hu Xiaogang could shape out similar to the Lai Xiaomin-Huarong scandal. Lai was officially investigated in 2018 and executed this January. The fact that the authorities have gone after Hu suggests that China Orient Asset Management could be facing debt problems like Huarong; in announcing the probe into Hu, the anti-corruption authorities refer to him as the “former vice president at China Orient Asset Management.”
The PRC’s four major bad-debt management companies were all established in 1999 when Jiang Zemin was Party boss. The main purpose of those companies was the acquiring non-performing assets of the four state-owned commercial banks at book value, a move which greatly reduced the bad debt ratio of the banks and allowed them to get listed on exchanges. Jiang would arrange for his cronies to join the senior management of those bad-debt management companies to help the CCP elite secure financial benefits at low cost.
For Xi Jinping, getting a handle on bad-debt companies allows him to tighten Beijing’s control over the economy, curb financial risks, and get ahead in factional struggle against his rivals.
3. Ideology is a double-edged sword for Xi and the CCP. On the one hand, ideology serves the purpose of society control and is a basis of governing legitimacy. On the other hand, the people can also cite Marxist revolutionary theory in standing up to regime exploitation, oppression, and persecution. The paradox of ideology is on full display with WeChat’s tightened censorship ahead of the Party centennial and the crackdown on Maoists in northern China.
International observers’ portrayal of Xi Jinping as a “true believer” in Marxism-Leninism may not be far from the truth, at least insofar as Xi sees himself as heir to and custodian of the “red dynasty.” One thing is certain: Xi’s embrace of both “left” (renewed focus on Marxist education, suffocating control over society, etc.) and “right” policies (unprecedented “reform and opening up” measures, including allowing foreign financial institutions to wholly own their mainland branches and the establishment of free-trade areas like Hainan, etc.) are more influenced by considerations of power consolidation and factional struggle, and less a product of ideological dogmatism.
4. On the whole, the developments in this entry show that intra-Party fighting is currently very fierce, which translates to acute crisis for Xi Jinping and the CCP.
