SinoInsight 1
Sept. 5
1. According to videos circulating on social media, a black swan landed on Tiananmen Square after the morning flag-raising ceremony. The swan stood in a spot between the Monument to the People’s Heroes and the flagpole, attracting nearby tourists. Mainland media reported that the black swan was eventually caught by wildlife protection department staff at about 8:00 a.m. that day.
The so-called “Tiananmen Black Swan Incident” trended in Chinese language circles, with many seeing it as an ill omen for the CCP regime. The English language concept of Black Swan events aside, the incident seemed to fit a Chinese proverb, “wild birds entering a temple” (野鳥入廟), which is used to refer to a sign of a dynasty’s end. The word “temple” in the proverb is a place where emperors would make offerings or discuss important matters, and Chinese netizens felt that the Monument to the People’s Heroes counts as the CCP’s “temple” because Party leaders would place flower wreaths—a modern form of “offering” ceremony—at the Monument on the anniversaries of revolutionary events.
2. People’s Daily published a lead article on Xi Jinping’s recent speech at the opening ceremony of a training class for young and middle-aged cadres (“堅持原則敢於鬥爭——論學習貫徹習近平總書記在中青年干部培訓班開班式上重要講話”).
According to the article, Xi told cadres that “communists talk about Party nature, principles, and struggle.” He added that “daring to struggle” is showing “outstanding character” for a communist, and the CCP had “relied on struggle to get to this day, and must rely on struggle to win the future.” Xi also said that being a “Mr. Good” (“好好先生”) is “not really being a good person.”
The article concluded: “On the way forward, we must united most closely around Party Central with Comrade Xi Jinping at the core, strengthen the ‘Four Consciousnesses,’ strengthen the ‘Four Self-confidences,’ achieve the ‘Two Safeguards,’ dare to struggle, be good at struggle, clear a passageway in the mountains, and build bridges over water. Our Party will surely be able to unite and lead the people to effectively deal with major challenges, resist major risks, overcome major obstacles, resolve major contradictions, and continue to win new victories in the great struggle!”
Subsequently, the People’s Liberation Army and the anti-corruption apparatus published commentaries in their respective mouthpieces on the topic of “adhering to principles and daring to fight” (“堅持原則敢於鬥爭”) to hammer home the messaging in Xi’s speech.
Explainer: In traditional Chinese culture, “Mr. Good” usually refers to Daoists, spiritual cultivators, or people with good moral standing who respond in a positive fashion (“hao, hao,” “good, good,”) to avoid offending and hurting others. In CCP culture, however, “Mr. Good” refers to a person who seeks to be inoffensive to the point of being unprincipled, including not engaging in politically correct “struggle” when they see behavior that violates Party regulations (i.e. shutting an eye to corruption).
Sept. 6
1. Xi Jinping presented promotion certificates to five new full generals at the Central Military Commission headquarters in Beijing.
The five promoted officers are PLA Western Theater Command commander Wang Haijiang (54 years old), PLA Central Theater Command commander Lin Xiangyang (57), PLA Navy commander Dong Jun (age unknown), PLA Air Force commander Chang Dingqiu (54), and PLA National Defence University president Xu Xueqiang (59).
2. People’s Daily published a lead article on how the Party’s “anti-flood spirit” helped communist cadres “overcome” the 1998 floods in China (“弘揚抗洪精神，凝聚中國力量——論中國共產黨人的精神譜系之十五”). The article seeks to reinforce the Sept. 1 Qiushi article by Xi Jinping promoting the so-called “Party’s great spirit” (“黨的偉大精神”).
Former Party boss Jiang Zemin took advantage of the 1998 floods to mobilize over 1 million soldiers to carry out flood rescue operations and establish his “quan wei” in the wake of Deng Xiaoping’s death the previous year. However, Jiang’s name was entirely omitted from the People’s Daily piece on the 1998 floods despite his central role directing flood rescue work, while Xi Jinping’s name was mentioned three times.
Sept. 10
The PLA Daily, the official newspaper of the CCP military, published an article by the Liaoning Provincial Military District titled, “We Must Take a Clear-cut Stance Against ‘Mr. Good’” (旗幟鮮明反對“好好先生” ).
The article quoted a speech by Xi Jinping delivered at the opening ceremony of training classes for young and middle-aged cadres at the Central Party School (Chinese Academy of Governance) in the 2021 fall semester. Xi said, “for communists, being “Mr. Good” is not really being a good person.” The article added that some “Mr. Goods” are, to a certain degree, looking to preserve their position.
The article explained that “Mr. Good” originally referred to Sima Hui from the Eastern Han Dynasty, a scholar with “extensive knowledge and talents” whom the article described as “smooth” and “only said nice things to everyone.” The article wrote that Sima Hui recommended famous strategists Zhuge Liang and Pang Tong to warlord Liu Bei’s camp instead of to his patron Liu Biao because the latter was “narrow-minded, did not distinguish between loyalists and traitors, and sought to harm those who are good,” and Sima Hui was being cautious.
OUR TAKE
1. The newly promoted generals appear to be part of the new guard of senior military officials that Xi Jinping is promoting up the ranks to ensure the PLA’s loyalty to him and further consolidate power over the Party’s “gun” (槍桿子). Four of the five generals were born in the 1960s, and while Dong Jun’s birth date does not appear to be on public record, he is likely born in the 60s. Further, all five generals secured exceptional promotion due to their post (theater commanders should hold full general rank by PLA protocol), having held the rank of lieutenant general for less than four years; Lin Xiangyang was only promoted to lieutanent general in July 2020.
Xi appears to be much more in control of the military now as compared to the 19th Party Congress going by promotions and personnel reshuffles alone. Xi promoted nine officials to general rank this year, eight of whom head a theater command or military branch (ground force, navy, air force, strategic support force, armed police, central and western theater commands); there are a total of 11 commanders and 11 political commissars in the five major theater commands and various service branches. Xi replaced the head of the Western Theater Command twice this year, with commander Xu Qiling making way for Wang Haijiang less than two months after he took office in June. Some Hong Kong media outlets claim that Xu and his predecessor Zhang Xudong stepped down due to health problems (possibly either altitude sickness or COVID-19).
Only two of the 33 active service officials (CMC vice chairs Xu Qiliang and Zhang Youxia) holding the rank of general were not promoted by Xi Jinping. Twenty-eight of the 33 received their promotion from 2017, or starting from the 19th Party Congress year. Twenty-four of the 33 received exceptional promotions, including five who were promoted to general after holding the lieutenant general rank for barely two years. Meanwhile, all commander and political commissar posts, with the exception of the Air Force and Ground Force political commissars, have been reshuffled at least once since Xi launched military reforms in 2015. According to mainland media reports in 2017, major general Jin Yinan once disclosed in a speech that over 140 generals at the deputy military rank and above had been investigated since the 18th Party Congress in 2012; the CCP stopped reporting such investigations after July 2017.
Xi’s mass promotion of generals in the past eight years and other high-level reshuffles means that the military is now virtually “coup-proof.” For one, most of the full generals who secured their rank during the Jiang Zemin era have been replaced, making it very difficult for the Jiang faction to involve the military in potential schemes against the Xi leadership. The new generals will also very likely be loyal to their political patron Xi Jinping. Even if there are would-be sympathizers of rival factions among the fresh crop of senior officials, they would have reduced ability to mutiny given their obvious deficiencies in “quan wei,” as well as relative lack of authority, experience, and commanding ability seeing how they came to their current positions rather recently. On the downside for Xi, the same “qualities” that make his new guard of senior officials “coup-proof” also affect their ability to properly implement his orders, possibly to Beijing’s detriment when dealing with crises.
Xi Jinping’s military personnel reshuffles and promotions are clearly designed to boost his chances of securing a third term at the 20th Party Congress in 2022. The promotion of new generals allows Xi to reshape patron-client relations in the military’s senior ranks in his favor, while frequent personnel movement makes it difficult for his “new hires” to form local interests and resist Beijing even if they wanted to. There are negatives, however, to handing out so many exceptional promotions and constantly reshuffling commanders; Xi’s grip over the military is stronger but not stable, and the loyalty of his commanders will always be in question.
2. At first glance, the Liaoning Provincial Military District article is an unambiguous critique of military officials who prioritize the preservation of self-interests over Party interests, engage in factionalism, or carry out “passive resistance” (不作爲) to the Xi leadership instead of “struggling” for the regime per Party Central’s orders. In other words, the piece is likely meant to promote Xi’s agenda and even an effort at bootlicking by the Liaoning Provincial Military District.
Unfortunately for the author(s) of the piece, the inclusion of the Sima Hui example, can and has already been read by overseas Chinese language commentators as a subtle jibe against Xi Jinping. For instance, the article targets the “Mr. Good” phenomenon because there are many “Mr. Goods” in the military, and there are many such “cautious” officials precisely because Xi, like Liu Biao, is a “narrow-minded” ruler who “did not distinguish between loyalists and traitors, and sought to harm those who are good.”
Based on our assessment, it is more likely that the author(s) of the Liaoning Provincial Military District article simply made a poor decision to include the Sima Hui example to bolster their argument, with a small probability of deliberate malicious intent.
3. Many of Xi Jinping’s recent actions—telling cadres to “dare to struggle”; targeting anti-monopoly practices, the tech sectors, and capitalists; cracking down on the entertainment sector and the elite interests behind the scenes; creating the Beijing Stock Exchange; various propaganda messaging (including the airbrushing of Jiang Zemin from his role in the 1998 floods in the Sept. 5 People’s Daily article); promoting generals; and rectifying the political and legal affairs apparatus—indicate that he is preparing to deal with the Jiang faction once and for all as he clears out obstacles that would hinder his taking a third term at the 20th Party Congress.
However, the Xi camp will find overcoming the Jiang faction an exceptionally daunting challenge. Xi Jinping still lacks “quan wei” and is nowhere near the all-powerful dictator that mainstream observers make him out to be. This is apparent from Xi “borrowing” a tactic from Mao Zedong—winning over the masses to oppose the elites through a “Common Prosperity” movement—to consolidate power. Students of Party history will recall that Mao launched the Cultural Revolution not because he was all-powerful, but precisely because he lacked power and had lost “quan wei” after the disastrous Great Leap Forward campaign, yet wanted to be back in the driver’s seat.
Xi presently has an edge in the factional struggle. America’s botched withdrawal from Afghanistan and weakening stance towards China (see SinoInsight 2), along with some favorable geopolitical trends, allow Xi to claim “victory” in external matters. Meanwhile, Xi is tightening control at home and relentlessly building the case for why he should take a norm-breaking third term and be allowed to use “Xi Jinping Thought” to seize “opportunities unprecedented in a century” to bring about “the great rejuvenation of the Chinese nation.”
Conversely, Xi’s power consolidation efforts, propaganda push, and constant calls for cadre loyalty to Party Central indicates that things are going less favorably for him than appearances suggest. If Xi has sufficient “quan wei,” he would not need to keep up the exhortations for Party members to “resolutely safeguard the quan wei and centralized leadership of Party Central” and the “CMC Chairman System.” Things could very quickly unravel for Xi and swing the factional struggle in the favor of the Jiang faction should crises erupt. Trigger points to watch include the potential explosion of Evergrande’s debt troubles and subsequent chain reaction, epidemic outbreaks, global central bank policy to combat inflationary pressures, China risk avoidance by foreign investors, growing global anti-CCP sentiment, etc.
4. Factional struggle in the CCP elite is headed for a showdown and various signs indicate that the situation in China is becoming more unstable. Businesses, investors, and governments must make contingencies for the sudden emergence of regime-endangering political Black Swans in China.
SinoInsight 2
President Joe Biden and PRC leader Xi Jinping spoke by phone for 90 minutes on the evening of Sept. 9.
According to a White House readout of the call, Biden and Xi had a “broad, strategic discussion” in which they discussed where their interests converge and areas of divergence. Biden also “underscored the United States’ enduring interest in peace, stability, and prosperity in the Indo-Pacific and the world and the two leaders discussed the responsibility of both nations to ensure competition does not veer into conflict.”
A senior administration official told reporters that Biden requested the call, his second with Xi in seven months, after the White House concluded that PRC officials were “unwilling to engage in serious or substantive conversations” with their U.S. counterparts in meetings this year.
“What we’ve gotten is the usual talking points, which are more designed for propaganda purposes. Xi has really centralized power in some pretty marked ways… engagement at the leader level is really what’s needed to move the ball forward,” the official said.
The official added that Biden “took the opportunity to explain the intention behind U.S. actions that are sometimes misinterpreted by Beijing as a means to undermine China,” according to a Bloomberg News report. Also, the Biden-Harris administration’s review of its overall China policy, including what it plans to do with the Trump administration’s China tariffs and trade agreement, “could be concluded and its outcomes unveiled in the near future.”
The official said that Biden “had not planned to raise the prospect of U.S. retaliatory action or ‘costs’ if China refused to co-operate on a range of issues, including investigations into the origin of COVID-19,” according to Reuters.
The official also said that the Biden-Harris administration would require a “training period” to convince CCP leaders that Beijing’s stance would not pay dividends. “We also think that essentially Beijing’s actions are quieter than their words. Their responses to our actions have actually been largely symbolic and frankly their hard line rhetoric isn’t really working.”
According to the PRC’s statement on the call, Xi Jinping noted that “due to the U.S. policy on China, the China-U.S. relationship has run into serious difficulty,” and both countries should “bring China-U.S. relations back to the right track of stable development as soon as possible for the good of the people in both countries and around the world.” He also said that the U.S. and China may “continue their engagement and dialogue to advance coordination and cooperation on climate change, COVID-19 response and economic recovery as well as on major international and regional issues” on “the basis of respecting each other’s core concerns and properly managing differences.” The PRC statement cited President Biden as saying that the U.S. side “looks forward to more discussions and cooperation with China to reach more common positions on climate change and other important issues,” and to “get U.S.-China relations back on track.”
On the same day, Xi Jinping spoke with German Chancellor Angela Merkel over the phone. According to a PRC readout of the call, Xi thanked Merkel for “actively committing to promoting practical cooperation and friendly exchanges between Germany and Europe with China,” and noted “the high level of mutual trust between China and Germany.” Meanwhile, Merkel shared her thoughts on the situation in Afghanistan with Xi and expressed her hope of “strengthening communication and coordination with China under the framework of the United Nations and other multilateral organizations. Merkel also said that the European Union’s Comprehensive Agreement on Investment with China is “mutually beneficial and win-win” for both sides, according to the PRC readout.
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According to a Sept. 10 Wall Street Journal report, officials in the Biden-Harris administration “are considering launching an investigation into Chinese subsidies under Section 301 of the U.S. trade law, which could lead to new tariffs,” citing people familiar with the plans. Also, the White House is “looking to team up with the European Union, Japan and other allies in Asia, and rally support within the World Trade Organization to take on Chinese subsidies” in a “full-court press.”
Further, the report noted that the Office of the United States Trade Representative “doesn’t plan a wholesale reduction in tariffs on more than half of Chinese imports which were imposed during the Trump years.” Rather, the USTR “has been conducting exercises to see which tariffs are hurting the U.S. economy or could substantially raise the costs of other parts of the Biden agenda … particularly the president’s plans to invest hundreds of billions of dollars into new U.S. infrastructure.” Cutting tariffs aside, U.S. officials are “looking at granting exclusions from tariffs for some products.”
American Enterprise Institute economist Derek Scissors told the Journal that while the new tariffs could replace the Trump tariffs, the “lengthy investigation could also be used politically by the administration to push off any tough actions until sometime in the future.” Scissors said, “It could be a built-in way to do nothing and look tough on China before the midterm elections” for Congress in 2022.
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The Financial Times reported on Sept. 10 that the Biden-Harris administration is “seriously considering a request from Taiwan to change the name of its mission in the US capital from ‘Taipei Economic and Cultural Representative Office’ (Tecro) to ‘Taiwan Representative Office.’”
National Security Council Coordinator for the Indo-Pacific Kurt Campbell is in favor of the change and Taipei’s request had “wide support inside the National Security Council and from state department Asia officials,” according to the Financial Times. However, there has been no final decision on the matter.
OUR TAKE
1. Publicly available information about the Biden-Xi call and recent Sino-U.S. news indicate that Xi Jinping and the CCP had come out on top of the latest Sino-U.S. engagement.
From the White House readout of the call and remarks by the senior administration official, it appears that Washington’s priority is accommodation and rapprochement with Beijing. The White House readout was extremely vague on what was discussed, but stressed the need to ensure that Sino-U.S. “competition does not veer into conflict.” The official also noted that Biden “had not planned to raise the prospect of U.S. retaliatory action or ‘costs’ if China refused to co-operate on a range of issues, including investigations into the origin of COVID-19,” which indicates that further confrontation was not on the cards. Moreover, Biden initiated his call with Xi after the administration lost legitimacy with the recent debacle in Afghanistan and while America’s domestic situation is steadily worsening (poor economic figures, pandemic control problems, Biden and Democrats losing popular support, etc.)—hardly the “position of strength” from which the Biden-Harris administration said it would speak to China.
Washington also appears to be preparing to make concessions to Beijing. It is unclear how or why Biden “took the opportunity to explain the intention behind U.S. actions that are sometimes misinterpreted by Beijing as a means to undermine China,” as the senior administration official revealed. However, the gesture would very likely be interpreted as a mea culpa by the CCP and a sign that the U.S. is planning to “make up” for the “misunderstanding.”
News that the Biden-Harris administration could make wholesale reductions on up to half of Trump-era tariffs while launching an investigation into Chinese subsidies that could ultimately amount to nothing further indicates that the U.S. and PRC leaders had during their phone call struck a bargain in Xi and the CCP’s favor.
President Biden could later explain that a tariff reduction and other policies favoring the PRC were done to repeal the Trump administration’s “unhelpful” China tariffs and policies, rescue the deteriorating Sino-U.S. relationship, benefit the American people, and are in so doing score a win for the U.S. due to PRC “concessions” (note that the CCP is notoriously bad at upholding its pledges) on climate change, cooperation over Afghanistan (putting pressure on the Taliban to get Americans and green card holders out, security, etc), and other areas. Simultaneously, the Biden-Harris administration could claim that it is being “tougher” on China than the Trump administration through “targeted” investigation of PRC subsidies that could lead to new tariffs, taking pro-Taiwan actions, and other measures. Beijing will unlikely be overly alarmed by new U.S. “anti-China” measures if Biden had informed Xi about them in their call to avoid, in the PRC’s words, “miscommunication, miscalculation and unintended conflict”; the CCP, however, will publicly express outrage when those measures are announced.
Further, the CCP’s lecturing and somewhat smug statement on the Biden-Xi call suggests that it had possibly secured benefits or received positive assurances from the White House. Xi Jinping’s call with Germany’s Merkel also appears to be meant to reinforce the PRC’s dominance over the U.S. and its allies, and burnish its narrative of “the East is Rising, the West is in Decline.”
2. The Afghanistan debacle could be the driving reason behind the Biden-Harris administration becoming more accommodating in its stance towards the PRC.
As we noted in our earlier analysis, the administration needs to “restore America’s damaged credibility over Afghanistan and bolster its flagging domestic support.” The administration could believe that cooperation with the PRC is essential to avoiding a hostage situation in Afghanistan that would further erode American legitimacy and credibility. The administration could also be betting that the U.S. economy would receive a much-needed boost from the removal of some China tariffs, and that an improved economy would translate into domestic support. And as we anticipated, the Biden-Harris administration is currently focusing on “COVID-19 management (including vaccine distribution at home and abroad), climate change, social support measures, etc. as it seeks to get back in the game” after Afghanistan.
Being more accommodating towards the PRC, however, will likely backfire given growing anti-Beijing sentiment in America and the international community. The Biden-Harris administration will also likely face popular pushback over recent vaccine mandates and growing authoritarianism (we analyzed this back in March). Rising social instability in America could result in political Black Swans domestically and accelerate the destabilization of the U.S.-led world order.
Rapid destabilization of the current world order is a huge negative for the CCP regime. While the CCP wants to replace America as global hegemon, the PRC is far from ready at the moment to take over the reins. In fact, the economic, financial, and geopolitical turmoil that would stem from America’s swift retreat from the world stage would almost certainly deliver shocks to the PRC’s deteriorating economy and fragile financial system, possibly triggering regime-threatening crises in China as well.
3. In our China 2021 Outlook, we noted that “Sino-U.S. relations will appear to partially ‘recover’ and ‘stabilize’ as the Biden-Harris administration moves away from ‘anti-CCP’ ideological confrontation with the PRC. However, the administration could be ‘anti-China’ in ways that would affect Xi Jinping personally, particularly with regard to Xinjiang, Taiwan, and Hong Kong.”
Should Xi Jinping encounter serious domestic pushback from his factional rivals, we do not rule out the implementation of “anti-Xi, not anti-CCP” measures by the Biden-Harris administration, including calling attention to “sensitive” human rights issues connected with the political legacies of Xi and his enemies like the persecution of Uyghurs, Falun Gong practitioners, and forced organ harvesting.
4. Businesses, investors, and governments should not see the PRC’s rise as inevitable in the wake of U.S. decline given the manner in which the decline is unfolding, and hold off on increasing their exposure to China.
Meanwhile, U.S. allies and partner nations, especially China’s neighbors, must cultivate, maintain, or strengthen a tough stance towards China regardless of Washington’s approach. Because the CCP fears strength and takes advantage of weakness, being tough on China would help keep the CCP in check and lower the risk of serious provocations from Beijing.
