PLA Daily cautions cadres against joining ‘emperor emeritus’ coup; is Xi going after Wang Qishan with financial institution probe?

2. PLA Daily reporters published a piece titled titled, “Always Keep Your Reputation Intact” (常令名節不墮地) about the famous Ming Dynasty official Yu Qian. The article called on CCP officials to learn from Yu, cherish their “reputation,” and be loyal to the Party instead of “changing.”The article noted that Yu Qian displayed “unyielding determination” during the “Restoration of Nangong” (奪門之變) palace coup for the sake of the country, and did not make excuses to save himself even though he was later unjustly imprisoned (“為顧全大局、鞏固社稷，手握重兵卻『屹不為動』，即使含冤入獄，也不作爭辯”). “Undaunted by death and life, his reputation has been admired for ages” (“不畏死、不顧生，名垂千古，受人敬仰”), the PLA Daily reporters wrote.

Background: The “Restoration of Nangong” incident in 1457 saw officials aid Ming Dynasty Emperor Yingzong (also known by his regal names Zhengtong and Tianshun), who was emperor emeritus (太上皇) at the time, in ousting the then-reigning Emperor Jingtai. Yu Qian was wrongly accused of conspiracy (謀逆罪) and executed. Yu was later posthumously rehabilitated by the Chenghua emperor, son of Emperor Yingzong.

Earlier, Yu recognized Jingtai as Emperor Yingzong’s successor due to strategic reasons and the preservation of dynastic security after the latter was captured by Oirat Mongols at the Battle of Tumu in 1449. Yingzong was subsequently released from captivity and returned to China, but had to serve as emperor emeritus under a form of house arrest because his younger brother, the Jingtai emperor, was already on the throne. Yingzong’s desire to regain the throne eventually led to the “Restoration of Nangong.”

Oct. 13
PRC state media reported that the PLA held an ideological and political education innovation training camp (政治教育創新集訓) from Oct. 11 to Oct. 12.

In speaking to the attendees, CMC vice chairman Zhang Youxia emphasized “Xi Jinping Thought on a Strong Military” (習近平強軍思想), called on cadres to “unbutton the deepest part of your heart, eliminate knowledge biases, outdated ideas, and inertia paths,” establish a mindset that corresponds with the “strong military in the new era,” and allow “Xi Jinping Thought on a Strong Military” to take root.

1. The “Be a Warrior Who Dares to Fight and Is Good at Fighting” article appears to address the issue of Party nature and personal interests getting in the way of governance in the PRC.

CCP officials have a tendency to “prefer left rather than right” when implementing policy. Thus, Xi’s “Great Power Diplomacy” (大國外交) becomes “wolf warrior” diplomacy (戰狼外交) in the hands of diplomats and propagandists, and calls for a “Strong Military” (强軍) become intertwined with the “wolf warrior” approach, resulting in fighter planes buzzing Taiwan’s air defense identification zone, belligerent propaganda against “Taiwan independence,” and the fierce promotion of “The Battle at Lake Changjin,” a newly released Korean War movie with strong anti-American sentiment.

However, Xi’s “top priority at present is securing a third term at the 20th Party Congress, and his biggest obstacle is intra-Party factional struggle,” as we wrote in the last newsletter. Put another way, Xi is more interested in dialing down tensions with the U.S. in the short term rather than ratcheting them up, and is unlikely to be keen on a very risky invasion of Taiwan before the 20th Party Congress given the increasingly fraught domestic political situation.

In considering Xi’s personal situation, Beijing is looking to keep things in control and avoid unintended “accidents” (擦槍走火) breaking out in the Taiwan Strait or at China’s border regions over the near term. We do not rule out factional struggle as a factor behind a recent PLA incursion at the Sino-Indian border, as well as the replacement of three Western Theater Command leaders in the near future. Thus, the Xi camp likely acted through the CMC to instruct the PLA via Zou Guoxian’s article to not “act or interfere with the overall struggle situation because of local gains and losses,” and instead “resolutely follow command and fight when we are told to fight and stop when we are told to stop.”

2. In bringing up the case of Yu Qian, the PLA Daily seems to be sending two signals.

First, the article builds on criticism this year of Zhang Guotao’s “another Party Central” and warnings of a “Lin Biao armed coup” to further caution military officials against challenging the Xi leadership. Officials are instead encouraged to learn from Yu Qian, serve the CCP regime with “unyielding determination,” and be loyal to “Party Central with Comrade Xi Jinping at the core.”

Second, the Yu Qian story sends a “you know what I mean” (你懂的) signal to the Party elite that Xi Jinping is putting on notice Jiang Zemin and the faction that takes his name. Jiang has long had a reputation of being an “Emperor Emeritus,” and most prominently so during the Hu Jintao years. And if Jiang is likened to “Emperor Emeritus” Emperor Yingzong, then the Party elite and senior military officials are advised to be “undaunted by death and life” like Yu Qian, resist the advances of coup plotters, stand firm against the Jiang faction “another Party Central,” and see their “reputation admired for ages” when Xi finally prevails.

3. Zhang Youxia’s speech is consistent with the Xi camp’s messaging this year, and is another way of instructing cadres to reject the “sectarianism” of “Party splitters” Zhang Guotao and Wang Ming, and not oppose the central government.

Zhang’s call for “Xi Jinping Thought on a Strong Military” to take root in the PLA indicates that there remain elements in the military who are still dissatisfied with Xi despite the Xi leadership’s efforts at military reform and large-scale personnel reshuffle in the senior ranks. Meanwhile, Zhang’s awkward-sounding instruction for cadres to “unbutton the deepest part of your heart” can be interpreted in the context of factional struggle as a call for military officials to abandon the Jiang faction with its “knowledge biases, outdated ideas, and inertia paths,” and instead accept the Xi leadership and “Xi Thought.”

     SinoInsight  2     

• The inspections will “focus on whether state-owned banks, investment funds and financial regulators have become too chummy with private firms, especially some that have recently landed in Beijing’s crosshairs, such as property giant China Evergrande Group, ride-hailing company Didi Global Inc. and financial-technology firm Ant Group,” according to people familiar with the matter.
• The Xi leadership will use findings from the probe to determine “whether to slash the compensation of the executives at these state financial juggernauts.”
• The Journal wrote, “The financial sector is known within China as the power base of Vice President Wang Qishan, who gained prominence while running state-owned China Construction Bank Corp. in the 1990s and for years had installed people close to him in important positions at state-backed financiers, including China Construction Bank.”
• Also, “While serving as Mr. Xi’s antigraft czar during the leader’s first term, Mr. Wang largely avoided investigating the financial sector, while he pursued probes into other parts of the economy. But financial risks in China kept building up, in part because of aggressive lending by state banks to some well-connected corporate highfliers.”
• “Mr. Wang’s political influence has diminished in recent months. A longtime aide of his was charged in August with taking more than $71 million in bribes. Mr. Wang has had connections to some of the financial firms that are now facing scrutiny, according to the people with knowledge of the plan.”

OUR TAKE
1. We previously noted that Xi Jinping’s probe of state financial institutions signal his “intention to go all-out in cracking down on factional rivals like the Jiang Zemin faction who formed ‘power and capital’ interest groups.” The Journal’s sources partially affirm our analysis in stating that the investigation is looking at whether state financial institutions have gotten “too chummy with private firms.”

2. The Journal’s report seems to imply that the investigation of state financial institutions could spell trouble for Xi’s close ally and PRC vice president Wang Qishan. However, some of the reporting repeats narratives that have been circulating among Chinese language commentators that we debunked earlier, as well as an inaccurate assessment of Wang’s influence.

The Journal described China’s financial sector as Wang Qishan’s “power base,” and added that he “largely avoided investigating the financial sector” while serving as anti-corruption head during Xi’s first term. In the following paragraph, the Journal claimed that Wang’s political influence “has diminished in recent months,” citing as evidence the purge of Wang’s former aide Dong Hong and the ongoing investigations into state financial institutions that Wang had connections to. Implicit in the Journal’s reporting is the impression that Wang was a powerful figure in China’s financial sector, did not carry out Xi’s anti-corruption effort properly previously, and could now get swept up in the latest probe.

Wang Qishan is familiar with China’s financial sector and its operations from years of overseeing it in various capacities while climbing the ranks of government. The financial sector may be Wang’s “territory” (地盤) in that he knows it well and made personnel appointments over the years. But it is hardly Wang’s “power base” (權力基地) as the Journal claims because he does not have control over it through factional networks and cronies unlike the Jiang faction and influential princelings.

Wang “largely avoided” cleaning up China’s financial sector during Xi’s first term because it was swayed by the Jiang faction and other powerful interest groups, and Xi had not yet consolidated enough power at the time to move against those elites even if he wanted to. The Jiang faction’s “financial coup” in 2015 demonstrated to Xi what his political enemies were capable of, and likely influenced his decision to amass power more rapidly so as to begin “rectifying” the financial sector with lower political risks. In 2017, Xi finally moved to tackle the financial sector with the abduction of Tomorrow Group founder and Jiang faction “white glove” Xiao Jianhua, investigating Anbang Group’s Wu Xiaohui, and restricting Wang Jianlin from leaving the country; at the time, Xi had seized the Party’s “gun” through military reforms in 2016, taken on the title of Party “core” leader, and was preparing to have his “Xi Jinping Thought” written into the Party Constitution at the 19th Party Congress. However, Wang Qishan could not stay on to oversee anti-corruption work because he was past retirement age for senior officials, and Xi only managed to keep him in power by appointing him PRC vice president and having him serve as an unofficial “eighth Politburo Standing Committee member.”

Some Chinese commentators, like the Journal, claim that Wang Qishan’s “political influence has diminished in recent months” because he is making far fewer public appearances as vice president and no longer seems to be at the forefront of elite politics. However, the role of the vice president has clearly changed under Xi Jinping from being a position where the successor-in-waiting gains experience to just a stand-in for the PRC president when the situation calls for it. Thus, it is perfectly normal for Wang not to make many public appearances and appear “diminished” so as to not take the limelight from “Party Central with Comrade Xi Jinping at the core.” On the contrary, a Wang that tries to grab attention and appears to have an elevated political profile bodes ill both for himself and Xi.

As for Wang’s “longtime aide” Dong Hong, we previously explained at length why the purge of the latter is nowhere near as significant as most observers believe and is unlikely a sign of a “Xi-Wang split.”

Based on currently available public information, we do not believe that the current probe of state financial institutions will implicate Wang Qishan or that Xi Jinping is planning to use investigations to move against his close ally; if anything, the Jiang faction and Party elites who resist Xi will find themselves at risk. We earlier looked at why neither Xi nor Wang has special incentive to turn against the other, especially with the current state of the Xi-Jiang factional struggle and the damage that a “Xi-Wang split” would do to undermine the Xi leadership and both men personally. Rather, the Jiang faction and Xi’s other enemies have huge incentive to create a “Xi-Wang split” or at least seed the impression of infighting between Xi and his close ally in the public discourse; we previously explained how CCP factions leak damaging information about each other in the mainstream press with an eye on shaping public discourse and gaining an advantage in factional struggle.

However, things can change swiftly in Party elite politics. The more Xi Jinping centralizes power, the more enemies he will have, and the greater his suspicions and paranoia. There is historical precedent of Party leaders abandoning their allies after they hit peak power. Lin Biao supported a marginalized Mao Zedong when he faced criticism from Liu Shaoqi, and Mao later returned the favor by officially designating Lin his successor in the Party Constitution. However, Mao still took out Lin in the end after correctly suspecting the latter of wanting to dispose him in a coup. Meanwhile, Deng Xiaoping, partly influenced by Jiang Zemin’s political maneuvering, seized military power from Yang Shangkun and Yang Baibing (a move that aided Jiang’s power consolidation) despite the Yang brothers being Deng’s staunch allies and supporters. We do not completely rule out the possibility that Xi could turn against Wang to preserve his interests, especially if Xi believes external information and speculation about Wang’s alleged disloyalty, or in the event of unusual circumstances.