SinoInsight 1
On Aug. 26, a suicide bomb attack at the Kabul airport killed at least 13 U.S. service members and nearly 200 Afghans, according to news reports. Marine Corps Gen. Frank McKenzie told reporters there were also 15 injured service members, and that the U.S. military expects more attacks. ISIS-K, an offshoot of the Islamic State terrorist group, claimed responsibility for the attack.
A day prior to the attack, the State Department advised U.S. citizens to avoid traveling to Kabul Airport, and instructed those at Abbey Gate, East Gate, or North Gate at the airport to leave immediately. Evacuation flights resumed on Aug. 27. Also on Aug. 27, President Joe Biden’s national security advisers told him that another terrorist attack is likely.
In a late afternoon press conference on Aug. 26, Biden pledged to “hunt down” the perpetrators of the airport attack and “make [them] pay.” He added that orders have been given to commanders to “develop operational plans to strike ISIS-K assets, leadership, and facilities,” and that the U.S. “will respond with force and precision at our time, at the place we choose, and the moment of our choosing.”
When asked during the Q&A session if he would consider extending the Aug. 31 withdrawal deadline, Biden gave a noncommittal response, noting that there is “opportunity for the next several days, between now and the 31st,” to evacuate people. Past the deadline, “we’re going to be in a circumstance where there are — will be, I believe, numerous opportunities to continue to provide access for additional persons to get out of Afghanistan, either through means that we provide and/or are provided through cooperation with the Taliban.” When asked if he would bear responsibility for recent events, Biden said that he did, but hinted that former President Donald Trump was responsible for making a deal with the Taliban to withdraw American forces by May 1.
Republican lawmakers criticized President Biden over the Kabul attack. House Minority Leader Kevin McCarthy promised a “reckoning” over the Biden-Harris administration’s handling of the Afghanistan withdrawal. Senate Minority Leader Mitch McConnell praised American servicemen and diplomats for doing “heroic work to rescue American citizens and Afghan partners in the predictably chaotic wake of the President’s decision to withdraw,” and expressed concern that “terrorists worldwide will be emboldened by our retreat, by this attack, and by the establishment of a radical Islamic terror state in Afghanistan.” On Aug. 27, House Republicans filed articles of impeachment for Secretary of State Antony Blinken.
A Reuters/Ipsos national poll conducted from Aug. 13 to Aug. 19 found that Biden’s approval rating among independents had dropped by 14 percent since June to 46 percent. Commentators across the political spectrum have criticized Biden for his lackluster public appearances since the start of the calamitous U.S. withdrawal from Afghanistan, including his refusal to take questions from reporters during several press conferences and events.
The CCP continued to mock Biden after the Kabul attack. On Aug. 27, the nationalistic Party media Global Times published an editorial titled, “Biden wants to save face, but Kabul airport attacks prove his incompetence.” The editorial wrote, “It is difficult to leave, and it is even more difficult to leave gracefully. The fundamental reason lies in the incompetence of the current U.S. government, and the inability of the U.S. national strength in coping with complex situations.”
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An Aug. 26 Politico report noted that “U.S. officials in Kabul gave the Taliban a list of names of American citizens, green card holders and Afghan allies to grant entry into the militant-controlled outer perimeter of the city’s airport.” The move was meant to hasten the Aghanistan evacuations and “came as the Biden administration has been relying on the Taliban for security outside the airport.”
Politico wrote that the move “prompted outrage behind the scenes from lawmakers and military officials.” An anonymous defense official told the media outlet, “Basically, they just put all those Afghans on a kill list. It’s just appalling and shocking and makes you feel unclean.” Many media commentators also slammed the move, with some describing it as a major scandal for the Biden-Harris administration.
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Last week saw conflicting messages from the Biden-Harris administration regarding its approach to the CCP.
On the one hand, the administration appeared to be maintaining a tough stance on China:
- Newspapers framed Vice President Kamala Harris’s trip to Southeast Asia as an effort at “countering China” before she left for Singapore and Vietnam.
- The pro-CCP Hong Kong newspaper Sing Tao was forced to register as a foreign agent in the United States.
- All four Quad countries held naval exercises off the coast of Guam from Aug. 26 to Aug. 29.
- Newspapers reported that U.S. special climate envoy John Kerry was preparing to press the PRC over financing international coal-fired projects in a meeting with his Chinese counterpart Xie Zhenhua in Tianjin this week.
On the other hand, the administration’s rhetoric and actions signal weakness on the CCP issue:
- Harris barely mentioned China at all on her Southeast Asian trip. Singaporean academics noted that Harris’s remarks in the city meant that the U.S. was not trying to attack China, while other initiatives like supply-chain cooperation were not substantive. Meanwhile, Vietnam said that it would not ally with the U.S. against China ahead of Harris’s arrival. Near the end of last week, newspapers were reframing her Southeast Asian trip as an effort to “improve ties” while “China prods from sidelines.”
- Reuters reported on Aug. 25 that the Biden-Harris administration had approved the sale of chips to Huawei’s auto component business in recent weeks and months. A person close to the license approvals told Reuters that the U.S. government is “granting licenses for chips in vehicles that may have other components with 5G capability.” Republican lawmakers condemned the administration for failing to protect America’s economic and national security by granting waivers to sell chips to Huawei, a PRC company known to engage in espionage and other malign activities.
- Japan is openly speaking up about backing Taiwan and preparing for a crisis in the event of a conflict, with major Japanese military drills scheduled to commence in September. Deputy Prime Minister Taro Aso recently urged the U.S. to make plans together with Japan to defend Taiwan should hostilities break out. Tokyo’s moves appear to be inspired by concerns about Washington’s commitment to Taiwan.
OUR TAKE
1. The Biden-Harris administration’s botched withdrawal from Afghanistan signals a waning of U.S. power and international influence. On paper, the CCP looks poised to take advantage of “opportunities equally unprecedented in a century” and gradually replace America on the world stage. Taiwan appears to be in real danger of a PLA invasion, with the CCP sensing Washington’s reluctance and even inability to defend its allies and partners despite the Biden-Harris administration’s rhetoric.
Given the CCP’s characteristics and ambition of world dominance, it is only a matter of time before it acts in earnest to realize its goals. However, Beijing is unlikely to make major moves (including invading Taiwan) in the short term as it struggles to survive a “perfect storm” of domestic and external problems (a rapidly deteriorating economy, natural disasters, coronavirus, debt bomb, property bubble, rising food and commodity prices, growing global anti-CCP sentiment, etc.). More crucially, Xi Jinping is not politically secure enough at present to take full advantage of America’s crisis even though “time and momentum” appear to be on the CCP side.
We assess that Beijing will seriously consider kinetic military actions only after Xi has rectified the Party to a more satisfactory degree (Xi’s factional rivals remain at large and officials are providing “passive resistance”), secured a third term at the 20th Party Congress in 2022, and ensured that Chinese society is sufficiently stable. For example, the PLA might have the capability now to invade Taiwan (we do not believe this to be the case), but the real question is whether Xi Jinping feels comfortable enough to dole out sufficient ammunition and supplies to the troops for an invasion without facing an armed uprising against the regime. With Xi’s grip on power far less secure than observers believe, his immense unpopularity in the officialdom, and rising social instability, Xi will be very reluctant to take risky kinetic military activity at least until after these two years.
That being said, the CCP could still engage in provocative military actions against its neighbors, including minor border skirmishes, flying into Taiwan’s air defense zone, and the like. The CCP will also keep up its “wolf warrior” propaganda and external influence operations as it seeks to sway domestic and international public discourse.
2. The erosion of the post-WWII international order with the decline in U.S. power before the CCP is fully ready to step into the breach is not ideal for the latter. Global supply chain, commodity pricing, as well as economic and financial problems that would result from America’s inability or unwillingness to properly sustain the global order will adversely impact the PRC.
While the CCP has been preparing in recent years for a partial decoupling from the international economy (developing its supply and marketing cooperatives, promoting “dual circulation,” etc.), China is presently too “plugged in” to the rest of the world for the regime to escape the trouble that would stem from a collapse of the U.S.-led world order. The Chinese economy and the CCP face elevated political risks and will be more prone to Black Swans, particularly if the Afghanistan situation deteriorates and American legitimacy is further undermined.
3. At the time of writing, the situation in Afghanistan seems likely to worsen, not improve. Washington is struggling to meet its Aug. 31 deadline, with failure to evacuate Americans and Afghan allies looking likely to result in a hostage situation. It does not help that the Taliban appears to have a list of Americans and Afghan allies that the U.S. is looking to extract.
The Biden-Harris administration needs to turn things around and restore American credibility before the Afghanistan debacle creates greater problems for the U.S. on the world stage. Xi Jinping and the CCP may be struggling with serious problems at home, but the Party will always be looking to cause mischief and accumulate whatever advantage it can get. Great power competition does not stop just because things are not going smoothly for one side; show too much weakness, and even an opponent who is not ready to win the bout can deliver a surprise knock-out blow. Meanwhile, the Democratic Party is at real risk of losing control of the House and the Senate during the 2022 midterm elections, given the current display of incompetence by the Democrat-controlled White House.
The Biden-Harris administration could rescue its and the Democratic Party’s legitimacy, as well restore some American credibility, by improving its handling of the Afghanistan withdrawal and standing firm against the CCP. On the flipside, caving to the CCP with concessions (Huawei chip sales, possible back channel negotiations during John Kerry’s upcoming Tianjin trip, etc.) and the aggressive promotion of progressive initiatives (including targeting political opponents) will only make a bad situation immeasurably worse.
SinoInsight 2
Last week, the CCP took steps to rectify “chaos” in China’s entertainment industry, including unruly fan communities and law-breaking celebrities.
Aug. 25
The Cyberspace Administration of China (CAC) issued a notice detailing 10 rectification measures for fan communities (關於進一步加強“飯圈”亂象治理的通知), including:
1. Online ranking for celebrities will be scrapped. Only rankings of their works (songs, films, etc.) will be allowed, but the individual or group’s identification may not appear in those ranking lists.
2. Ranking rules will be “optimized and adjusted.” Fan communities should pay more attention to product quality and curb enthusiasm for celebrity chasing.
3. Celebrity marketing agencies should be strictly managed. Websites and platforms should also limit, ban, or close the accounts of celebrities, celebrity agencies, or fan communities that provoke online bickering and defamation, as well as reduce or curb the release of information about the relevant celebrities.
4. Fan community accounts should be regulated. Unauthorized individuals or organizations are forbidden from registering celebrity fan community accounts.
5. Fan communities are forbidden from releasing conflict-provoking information. Websites and platforms are required to clean up “harmful” information from fan communities in a timely manner to avert heating up the public discourse. Failure to do so will result in severe penalties.
6. Illegal groups and communities will be cleaned up, including the closure of online chat groups and channels that cause trouble.
7. Fan communities cannot encourage excessive spending.
8. Management of television programs should be strengthened.
9. The participation of minors in fan communities will be strictly controlled.
10. Fund-raising activities will be regulated.
Earlier in June this year, the CAC launched a two-month rectification “special action” (清朗‧‘飯圈’亂象整治專項行動) targeting “chaotic” fan communities. The rectification drive targeted fan communities, celebrity ranking lists, celebrity-related trending topics, online comments, “human flesh searches” (i.e. information crowd-sourcing to engage in doxing and other malicious activities), and activities that violate privacy.
Aug. 26
Prominent Chinese actress and businesswoman Zhao Wei was abruptly censored on the Chinese internet. Zhao’s name was removed from all television series (like the 1998 drama “My Fair Princess” that shot her to fame), films, short videos, and promotional materials on major video platforms, although the shows themselves were not scrubbed. In the evening, mainland netizens discovered that the Zhao’s Weibo “chao hua” (超話) hashtag had been censored. The CCP authorities provided no explanation for the censorship of Zhao Wei.
According to information circulating on social media, Zhao Wei reportedly became unreachable by people in the entertainment industry after news broke that she had been censored. Zhao’s close friends were vaguely aware that she had “gotten into trouble” (出事了). Artists and celebrities who were acquainted with Zhao hurriedly deleted their Weibo content about her. Unverified rumors claim that Zhao fled to France in the morning of Aug. 27.
Earlier in the day, a notice from an editor-in-chief of an unnamed mainland TV station concerning action to scrub “inferior artists” (劣跡藝人) from TV programs started circulating on the internet. According to the notice, the PRC National Radio and Television Administration (NRTA) had required all “relevant departments” to remove all online and offline material featuring the “inferior artists” it listed, including celebrities like Kris Wu (吳亦凡), Henry Huo (霍尊), Zhao Wei, Zheng Shuang, and Fan Bingbing.
In 2017, Zhao Wei and her husband Huang Youlong were banned from mainland securities markets for five years after the authorities discovered irregularities in their company’s takeover bid for a Tibetan media company. Recent mainland media reports note that Zhao currently has 14 companies under her name, of which eight are still in business, two have been closed, and four having their licenses revoked. Also, the shares of six of the eight companies in operation (18.6 million yuan in total) are currently frozen.
Zhao Wei began investing in “cultural” companies (companies that deal in film, television, media, advertising, media agency work, records, books, food & beverages, and other entertainment industry-related business) in China after she shot to prominence in 1999. In 2011, Zhao invested in then-newly listed video post-production company Zhejiang Talent and generated returns of about 150 times her initial investment. In 2014, Zhao and her husband bought 9.18 percent of shares in Alibaba Pictures for HK$3.1 billion, becoming the company’s second-largest shareholder. Zhao and her husband would make 2.4 billion yuan in less than half a year after shares of Alibaba Pictures soared in April 2015. However, Alibaba founder Jack Ma would later “clarify” his relationship with Zhao Wei after the latter and her husband ran afoul of the authorities in 2017, claiming that he met her no more than 10 times (i.e. Ma and Zhao were not very well acquainted despite their business relationship).
Over the past decade, Zhao Wei and some of the artists she had associated with were embroiled in controversies that saw them being accused of having “humiliated China” and “supporting Taiwan independence.”
Aug. 27
1. The NRTA said that it supported the Shanghai tax authorities’ decision to fine Chinese actress Zheng Shuang 299 million yuan (about $46 million) for tax evasion between 2019 and 2020. Previously in early April, the Shanghai tax authorities announced that it had received reports regarding Zheng Shuang evading taxes.
The NRTA also accused Zheng and Beijing Culture, a producer of Zheng’s work, of “concealing the truth and providing false information” when applying for a distribution license for a recent television drama. Further, the NRTA pulled Zheng’s dramas off the air and ordered producers not to hire her for future shows.
Additionally, the NRTA said that it had “zero tolerance” for tax evasion, “yin-yang contracts,” and “sky-high remuneration” that violate laws and regulations, disrupt order in the industry, and hit the “bottom line” of social fairness and justice.
The State Administration of Radio, Film and Television added it had “zero tolerance” for tax evasion, “sky-high pay” and “yin-yang contracts”, referring to the shady contracts commonly used in Chinese showbiz to obscure actors’ real pay.
2. The China Securities Regulatory Commission (CSRC) announced administrative penalties and market prohibitions against Beijing Culture and 17 personnel over the false transfer of income shares for two TV dramas and for publishing inflated net revenue and net profit figures in 2018. Beijing Culture was fined 600,000 yuan, and the punished personnel include company chairman Song Ge, vice chairman Lou Xiaoxi, and director Zhang Yunlong.
3. Party mouthpiece People’s Daily published a commentary (碰道德法律紅線，演藝之路就走到了「終點線」) warning artists against crossing “moral and legal red lines” and exhorting them to be “self-disciplined” and “practice virtue” lest they find themselves crossing the “finishing line” of their career (i.e. are forced by the authorities to exit the entertainment industry, as in the case of Zheng Shuang).
OUR TAKE
1. The Xi Jinping leadership’s entertainment industry crackdown appears to be driven by the same primary reason behind the recent crackdown of fintech companies, the property sector, and private tuition, that is, an overriding need to eliminate risks and preserve regime security amid mounting internal and external problems facing the Party.
By targeting the wealthy elite in China, corruption, and unhealthy social behavior, Xi is also looking to win over the masses and rescue the CCP’s flagging legitimacy. Concurrently, Xi is going after his factional rivals and other enemies, particularly those behind the capital operations affected by the crackdowns.
2. China’s entertainment industry provides yet another channel for corruption and profiteering for interest groups in the Party elite, as well as celebrities and industry insiders. For instance, box office fraud allows distributors to inflate ticket sales and money laundering activities, and “yin-yang contracts” allow celebrities to evade taxes.
The Xi leadership began rectifying the entertainment industry in 2018, most prominently by going after famous actress Fan Bingbing (see here and here). Former state television presenter Cui Yongyuan kicked things off by exposing the “yin-yang contracts” used by celebrities like Fan to evade taxes, and the public outrage generated gave the CCP authorities an excuse to move in. Prominent celebrities ended up closing their shell companies and paying back taxes, but no one was prosecuted.
Xi Jinping’s entertainment industry crackdown also concerns factional struggle in the CCP elite. Cui Yongyuan’s actions pertaining to the entertainment industry and later in the “Shaanxi 100 Billion Mining Case” indicate that he was very likely acting on behalf of the Xi camp against the Jiang faction. For his pains, Cui would be investigated by the Shanghai police over exposing “yin-yang contracts” and got into trouble over the Shaanxi case (Cui made accusations about Supreme People’s Court president and Jiang faction member Zhou Qiang) with the political and legal affairs apparatus, where the Jiang faction maintains an influence.
The Jiang faction has long had influence over China’s entertainment industry through Party elites and businesspeople. A particularly influential figure is Zeng Qinghuai, the brother of Jiang faction number two Zeng Qinghong. During the Jiang faction’s era of dominance, Zeng Qinghuai served as a special inspector of the PRC Ministry of Culture, a former commissioner of the culture ministry in Hong Kong, and a vice chairman of the China Association for Promoting Democracy, among other portfolios. Zeng Qinghuai and Zhao Wei also reportedly had a photo taken together where they locked arms. Xi Jinping has been targeting Zeng Qinghong and his clan after taking office, notably through articles published by the Wang Qishan-led Central Commission for Discipline Inspection in 2015.
Given Zhao Wei’s business and personal connections, there is a chance that her being censored recently could be due to her and other celebrities participating (through their companies) in “surprise shareholding” (突击入股) of Ant Group stocks before its Hong Kong and Shanghai IPO last year; however, Ant’s IPO was subsequently suspended after Beijing intervened. And if Zhao and other relatively minor figures in the wealthy elite class are being targeted, then the Xi leadership could be building a case to go after even bigger fish; major anti-corruption investigations in the Xi era often start with the investigation of minor figures close to top officials. Jack Ma is a likely target, with his near-total disappearance from public life and radio silence since running into trouble last October indicating that he could be in some form of house arrest as he “cooperates” with the authorities. The recent downfall of Hangzhou Party secretary Zhou Jiangyong is very likely connected with a case against Ma. Leading members of the Jiang faction could also be targets in a sweeping probe.
3. Beijing’s crackdown on the entertainment industry is also concerned with the CCP’s promotion of socialist policies (“common prosperity”), and broader effort to rein in social contradictions through enhanced ideological indoctrination and the curbing of nihilistic behavior and activities (video gaming, “laying flatism,” etc.).
The CCP views celebrity culture in China as an impediment to its quest for economic development and social stability. Organizations behind fan communities encourage youths to engage in unproductive “star-chasing,” spend excessively on fan merchandise, and attack the fans of other celebrities by spreading defamatory information online. Ultimately, those organizations reap profits from greater web traffic and merchandise sales while destabilizing Chinese society by turning an impressionable segment of the population towards meaningless and/or destructive activities. Much like video game addiction, celebrity culture is affecting the Xi leadership’s effort to rescue the real economy, and thus is being targeted as Beijing looks to boost productivity and preserve regime survival.
The CCP is also concerned about the possibility of celebrities tapping into their influence and massive fan bases to create social instability or challenge the regime. For instance, the Chinese-Canadian singer Kris Wu has over 50 million fans, and his fans have been talking openly about breaking into jail to “rescue” him after he was detained in China over rape charges. Beijing fears a nightmare scenario where Chinese celebrities, some of whom are as young and impulsive as their fans, call upon their supporters to oppose the government or voice dissatisfaction with government policy. The resulting social movement would likely be massive, especially if families of young fans (most families in China have only one child) step in to stop government suppression. Thus, the Xi leadership has moved quickly to rein in fan communities before they cause serious trouble for the regime.
Eliminating a source of instability aside, the entertainment industry crackdown allows the CCP to play the “savior” and “Robin Hood” figure as it extracts penalties from very wealthy celebrities and pins the blame of rising social inequalities and unfairness on them. In the process of the crackdown, the Party deflects attention away from its outsized role in causing the myriad social problems in China today. Going after celebrities for corruption and malpractice is also much less politically damaging for the CCP than targeting officials because a new “landlord” class, and not Party members, are now the subject of “rectification.” Finally, the crackdown on celebrities paves the way for the CCP to go after wealthy individuals from other sectors in the future; in its political campaigns, the Party has historically targeted those engaged in the cultural sphere first.
