SinoInsight 1
1. Xi Jinping presided over a meeting of the CCP Politburo that reviewed three documents, including the national security strategy for 2021-2025 period (國家安全戰略 [2021 – 2025年]) and regulations recognizing meritorious military service (軍隊功勳榮譽表彰條例).The meeting listed five major areas of security, including political security, economic security, social security, scientific security, and “new domain” (新型領域) security, and stressed that political security is the top priority.
The meeting also listed several areas of national security that the PRC government will ensure, including:
- Regime security;
- Institutional security;
- Ideological security;
- Industrial security;
- Financial security;
- Food security;
- Energy and minerals security;
- Critical infrastructure security;
- [Regime] overseas interests security;
- Biosecurity;
- Cyber security;
- Data security;
- Artificial intelligence security.
1) Xi Jinping established the national security apparatus in 2013 to circumvent the “collective leadership” system and Jiang faction-controlled political and legal affairs apparatus. Overtime, Xi’s national security apparatus evolved to become a “supra-authority organization.”
The first PRC national security strategy was passed by the Politburo in a meeting on Jan. 23, 2015. The latest national security strategy accounts for new threat variables to the regime stemming from the trade war and “new cold war” with the U.S. during the Trump administration. In particular, the strategy proposes to “enhance industrial resilience and shock resistance; establish a safe bottom line to prevent systemic financial risks; ensure food security, energy and minerals security, critical infrastructure security, and strengthen the protection of [regime] interests overseas.”
2) The 18th Central Committee established a system to reward meritorious service in the Party, state, and military apparatuses after Xi instituted military reforms near the end of 2015. The “August 1 Medal,” or “Order of Bayi,” is the highest military award given to military and civilian personnel in the PLA.
2. The Ministry of Public Security issued an updated version of the oath for public security apparatus personnel (公安機關人民警察誓詞). The new oath (last revised in 2017) adds a line about “firmly support(ing) the absolute leadership of the CCP” at the beginning, a line about safeguarding “political security,” and other slight tweaks that make the oath more of a pledge of loyalty to Xi Jinping, rather than the regime.
The full text of the oath reads: “I am a Chinese People’s Police officer, and I swear: To firmly support the absolute leadership of the CCP, to devote myself to the noble cause of the people’s public security, to be loyal to the Party, to serve the people, to enforce the law impartially, to maintain strict discipline, to safeguard political security, to maintain social stability, and to safeguard the people’s peace and struggle bravely!”
The MPS said in announcing the updated oath that the revisions were made to ensure a “high degree of ideological and political action consistent with Party Central with Comrade Xi Jinping at the core.”
The MPS announcement also said that the MPS Party Committee had recently issued a notice requesting that public security organs at all levels closely integrate Party history study and education with the public security apparatus education and rectification campaign. The updated oath should become an important part of political training and actual combat training, and cadres should ensure that the “spirit of the oath” enters “the brain, the heart, and the bloodstream.”
Nov. 19
The MPS announced during a meeting of leading cadres that Wang Xiaohong will replace public security minister Zhao Kezhi as MPS Party secretary. Wang is currently the executive vice minister of public security and the MPS Special Service Bureau head. The following day, the leadership page of the MPS official website stated that Wang was a member of the Central Political and Legal Affairs Commission.
Background:
Wang Xiaohong (age 64) is a close associate of Xi Jinping, and was rapidly promoted up the ranks during Xi’s tenure. From the position of Xiamen (Fujian Province) public security bureau director (sub-bureau rank; September 2011 to August 2013), Wang was elevated to deputy Party secretary and executive vice minister of the MPS (ministerial rank) by May 2018. Wang’s appointment as MPS Party secretary indicates that he will likely be made public security minister by the end of the year at the earliest and not later than the 2022 Two Sessions (typically held in March). Although Wang Xiaohong will hit the retirement age for ministerial rank officials (65) next year, he is eligible to serve until 70 if he is promoted to the sub-national rank and becomes a member of the PRC State Council; Wang could also become deputy Party secretary of the Central Political and Legal Affairs Commission and deputy head of the Central Leading Group for Hong Kong and Macau Work.
Zhao Kezhi (68) is also a close associate of Xi’s. Like Wang Xiaohong, Zhao was 64 when he became public security minister before the 19th Party Congress in 2017. Zhao could move to the National People’s Congress or the Chinese People’s Political Consultative Conference to serve in a vice chairman position after he is replaced by Wang; the former move seems more likely for Zhao because the rubber-stamp legislature’s power was expanded in March with the passage of the Organic Law of the National People’s Congress, and Xi will want his allies to hold key positions there.
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At least six active and retired provincial-level political and legal affairs officials were purged recently:
Nov. 13
1. Chen Jianping (65, retired), former Party secretary and procurator-general of the Yan’an City People’s Procuratorate in Shaanxi Province, was investigated.
2. Pan Chi (61, retired), former Party secretary and president of the Zhongshan City Intermediate People’s Court in Guangdong Province, was investigated.
Nov. 14
Hou Hua (58), former Party secretary and Party Committee Standing Committee member of the Suzhou City Political and Legal Affairs Commission in Anhui Province, was investigated.
Nov. 15
Fan Zhong (61, retired in October 2015), former deputy inspector of the No. 2 Intermediate People’s Court of Hainan Province, was investigated.
Nov. 17
Shen Haiqing (52), vice mayor of Liaoning’s Panjin City and director of the Panjin municipal public security bureau, was investigated. When Shen was serving as deputy director of Huludao City’s public security bureau (April 2005 to July 2012), the purged cadre Wang Like (pronounced “lee kuh”) was his boss for a brief period (December 2006 to September 2008).
Nov. 19
Li Xiangjiang (56, female), deputy Party secretary and deputy director of the Changsha City public security bureau in Hunan Province, was investigated. On the same day, Li’s husband and Changde municipal Party secretary Yang Yiwen (55), her husband’s younger sister and former director of the Changsha Radio and Television (Group) human resources department Yang Wenli were also investigated.
OUR TAKE
1. Xi Jinping’s recent focus on national security, effort to reward “meritorious services” by PLA personnel, revision of the public security oath, high-level personnel reshuffle, and purges in the political and legal affairs apparatus indicate that his political position is nowhere near as dominant or secure as the passage of his “historical resolution” would otherwise seem to indicate.
The CCP regime continues to struggle in the face of a “perfect storm” of crises, with mild improvement in some areas (Sino-U.S. relations, see SinoInsight 3) and bleak prospects in others (Evergrande and property sector financial contagion, deteriorating economy, nationwide coronavirus outbreaks, mounting international antagonism towards Xi and the CCP, etc.). Thus, Xi has to harp on the importance of national security to the regime and strengthen his national security apparatus to keep a firm handle on domestic affairs, preserve social stability, and deny his factional rivals opportunities to leverage crises against his leadership. Going forward, Xi could come to rely more heavily on his national security apparatus to consolidate power, circumvent the “collective leadership,” and rein in the intelligence apparatus while he makes preparations to take a third term at the 20th Party Congress in 2022.
2. The regulations recognizing meritorious military service, like the recent interim regulations guaranteeing medical treatment for soldiers and military-related personnel, are designed to strengthen troop loyalty towards Xi. Xi’s continued efforts to win over PLA personnel, as well as Beijing’s repeated emphasis on the Party’s absolute leadership over the military, indicate that his control over the military may not be as tight as appearances suggest.
Another possible sign that the military may not be very supportive of Xi is the lack of open pledges of loyalty by high-ranking PLA generals around the Sixth Plenum period. The PLA merely went along with the standard CCP officialdom practice of holding meetings to “learn the spirit of the Sixth Plenum.” As a comparison, many provincial leaders, senior military officers, and various mainland propaganda outlets rushed to openly hail Xi as “core” leader after he secured that title at the Sixth Plenum of the 18th Central Committee in 2016.
There are several possible explanations for the lack of open pledges of loyalty to Xi from senior PLA personnel.
A more mundane explanation is an effort by Xi to downplay the notion that he is creating a personality cult and becoming another Mao Zedong. In this scenario, Xi orders the Central Military Commission to have the PLA just “learn the spirit of the Sixth Plenum” (which glorify Xi anyway) without having senior officers make ostentatious displays of loyalty that may forcibly remind people of the Cultural Revolution and the Mao cult, and undercut his “quan wei.”
Another explanation has Xi being concerned with the loyalty of his military leaders, and there are indeed some lingering elements opposing Xi in the PLA. While those displeased with Xi are small in number and may not dare to dissent openly, Xi would be wary that calls for open pledges of loyalty could end up reflecting disunity within the ranks (disgruntled officers could issue unstandardized loyalty pledges containing “advanced blackening” [高級黑] and “low-level red” [低級紅] shenanigans), to the detriment of Xi’s image and “quan wei.” In this scenario, Xi would feel that it is safer to have the CMC instruct PLA units to “learn the spirit of the Sixth Plenum” while barring senior officers or officials from making open loyalty pledges like during 2016.
A third explanation sees substantial resistance towards Xi in the PLA and Xi deciding to explicitly ban officers from making open loyalty pledges. This scenario is the least likely given that Xi’s frequent and mass PLA personnel reshuffles over the past nine years, as well as the re-institutionalization brought about by military reform, would have eliminated many of Xi’s opponents in the PLA and allowed him to consolidate enough control over the military to the point where he can release a “historical resolution.”
3. Xi Jinping will look to “rectify” and put his stamp over the last remaining strongholds of his factional rivals in the regime as he looks to tighten his control over the regime, increase his advantage in factional struggle, and secure a norm-breaking third office term. To that end, Xi will have to keep purging the political and legal affairs apparatus, which has long been swayed by the Jiang faction, and make key personnel arrangements to bring it more firmly under his control.
The appointment of Wang Xiaohong as MPS Party secretary will enable Xi to more securely grip the Party’s “knife handle” (刀把子) during a critical period for the latter. Wang is several years younger than Zhao Kezhi, and Xi needs a public security minister who will not be past retirement age when he embarks on a third term. Unlike Zhao, Wang is a career public security official, and being more familiar with its ins and outs, will be technically better equipped to run the public security apparatus. As MPS Special Service Bureau head, Wang provides security to senior officials at the sub-national level and above; his familiarity with the Special Service Bureau and its personnel gives Wang (and Xi) an advantage in keeping the Party elite under control even when he moves up to public security minister. Xi would want the Party elite strictly controlled to guard against potential challengers and mobilizations against his authority if he plans to take out “big tigers” when the second segment of the political and legal affairs apparatus education and rectification campaign draws to a close early next year, or should he be forced to purge high-profile factional enemies in the lead-up to the 20th Party Congress.
SinoInsight 2
In response to international calls for accountability, state mouthpiece CGTN released on Nov. 17 an email that was purportedly sent by Peng Shuai to Steve Simon. The presence of what appears to be a mouse cursor in the CGTN image of the email, however, saw international commentators raise red flags and triggered even more demands from the international community for the PRC to provide proof of Peng’s whereabouts. The CCP then released more “proof” that Peng had not been “disappeared”: On Nov. 19, a state media reporter tweeted photos that Peng purportedly posted on her Weibo account. On Nov. 20, Global Times editor-in-chief Hu Xijin tweeted a video of Peng with some friends and her coach that he claimed was “shot on Saturday Beijing time,” and another video of her attending a “teenager tennis match final in Beijing on Sunday morning.”
Chinese netizens and international commentators have questioned the CCP’s ability to produce “proof” that Peng Shuai had not been “disappeared” seemingly on demand, as well as highlighted other irregularities with the “proof” provided.
On Nov. 21, Peng Shuai took part in a 30-minute video meeting with International Olympic Committee (IOC) president Thomas Bach and IOC Athletes’ Commission chair Emma Terho. “She explained that she is safe and well, living at her home in Beijing, but would like to have her privacy respected at this time,” the IOC said in a statement. The IOC did not address the issue of Peng’s sexual assault allegation; the Nov. 17 “email” released by CGTN that was purportedly by her said that the allegation of sexual assault is “not true.” According to The Wall Street Journal, the IOC call was set up through the Chinese Olympic Committee at the IOC’s request.
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In an interview with Dajiyuan (Chinese edition of The Epoch Times) published on Nov. 20, Yuan Hongbing, a prominent Chinese dissident and jurist residing in Australia, revealed details about the Xi Jinping-Jiang Zemin factional struggle that he reportedly obtained from “a person of conscience in the CCP.”
Yuan said that Xi originally wanted to denounce the “major political mistakes during the Jiang Zemin leadership” and Jiang’s “incorrect political line” (“total corruption” and admitting “capitalists” as Party members, which “betrays the Party’s fundamental political principles”) in his “historical resolution.” However, Zhang Gaoli led the effort to object to Xi’s attempt to criticize Jiang like how Deng Xiaoping went after Hua Guofeng in Deng’s “historical resolution,” Yuan said. Other Party elites, including Zhu Rongji, also joined in the objections. Hu Jintao, however, supported Xi’s motion to censure Jiang. Eventually, Xi’s effort to hold Jiang accountable in his “historical resolution” was met with “major setback,” Yuan said.
Yuan explained that Xi needed to publicly denounce Jiang to usher in his “new era” on firm footing. “There must be an ‘old era’ to establish Xi Jinping’s so-called ‘new era.’ Without rejecting the ‘old era’ of the Jiang period, Xi’s ‘new era’ is akin to a palace built on quicksand, with a weak foundation,” he said.
Yuan Hongbing added that he only understood where the focal point of the factional struggle was after hearing the aforementioned information from a “good friend within the Party” on Nov. 18. He noted that the end of the Sixth Plenum of the 19th Central Committee did not mark the end of intra-Party power struggle, but instead saw the struggle enter an even more intense phase.
Yuan said that his sources learned that Xi Jinping will not let the Jiang Zemin matter “simply rest.” Given that Xi had already brought up the matter of censuring Jiang in his “historical resolution,” there will be “an extremely brutal intra-Party struggle over the matter of whether or not to publicly criticize Jiang Zemin by name before the 20th Party Congress.”
OUR TAKE
1. We previously analyzed that the CCP would “disappear” Peng Shuai regardless of her reasoning for making a #MeToo accusation against Zhang Gaoli. “Disappearing” Peng, however, has brought political inconvenience upon the CCP in the form of international uproar, demands for accountability, and threats of boycotts.
Beijing undoubtedly fears that international furor over Peng Shuai could result in a public relations “contagion” of some sort, including multiple countries boycotting the Beijing Olympics in some form next year, increased international pressure over the CCP’s other human rights violations, and a further tarnishing of the regime’s image in general. This fear likely led to the scramble by PRC state media to furnish “proof” that Peng is safe in the hopes of placating the international community. However, official ineptitude has undercut the CCP’s propaganda effort, and could spark greater international backlash unless it smooths things over.
2. How Xi Jinping responds to the international outcry over Peng Shuai’s safety and whereabouts will likely be dictated by domestic political necessity.
If Xi believes that preserving the Party’s image is paramount and he is struggling to get the better of his factional foes, then the CCP will continue with its propaganda charade of “proving” that Peng has not been “disappeared” while continuing to keep her under some form of control. Zhang Gaoli will also remain at large instead of being probed.
If Xi is looking to boost his image internationally and is determined to hold his factional rivals accountable, then the CCP could eventually “show” that Peng Shuai has won her “freedom” (or at least upkeep the pretense of freedom; see Jack Ma’s recent overseas “study tour”) while launching an inquiry into her sexual assault allegations. Zhang Gaoli, a Jiang faction member, could be publicly investigated and taken down in relation to the Peng Shuai case and for corruption. The purge of Zhang, a former Politburo Standing Committee member, could be packaged as Xi sticking true to his word to “offend the people we must offend” in “no restricted area, full coverage, zero tolerance” anti-corruption struggle.
3. Yuan Hongbing’s account of the Xi-Jiang factional struggle and its implications for Xi’s “historical resolution,” his current “quan wei” status, and the post-Sixth Plenum political situation aligns with our assessment (see here and here). If the information provided by Yuan’s Party sources is reliable, the scenario where Zhang Gaoli is purged in connection with the Peng Shuai case stands a good chance of coming to pass. The fall of Zhang would naturally implicate others in the Jiang faction, and as the dominos topple, hasten the Xi-Jiang factional struggle to a showdown.
We believe that factional struggle in the CCP elite will sharply threaten regime security and could result in a “Berlin Wall moment” for the PRC. Businesses, investors, and governments must make contingencies for the emergence of regime-ending political Black Swans before the 20th Party Congress.
SinoInsight 3
President Joe Biden and General Secretary Xi Jinping held a three-and-a-half-hour-long virtual meeting. A broad range of topics were discussed during the meeting, including Taiwan, Afghanistan, North Korea, Iran, human rights, and climate change, according to a White House readout.In his opening remarks, Xi hailed Biden as his “old friend,” a label that CCP officials often use to describe people whom it regards as pro-PRC. The White House later insisted that Biden does not consider Xi an “old friend.”
Xi added, “China and the United States should respect each other, coexist in peace and pursue win-win cooperation. I stand ready to work with you, Mr. President, to build consensus, take active steps and move China-U.S. relations forward in a positive direction.”
Nov. 16
1. Senior Biden-Harris administration officials said in a background press call that they were “not expecting a breakthrough” from the Biden-Xi virtual meeting and “there were none to report.” They added that the meeting was about developing “ways to manage the [Sino-U.S.] competition responsibly” and “keep open lines of communication.”
2. Speaking at a Brookings Institution webinar, U.S. National Security Advisor Jake Sullivan said that Biden and Xi had agreed to “look to begin to carry forward discussion on strategic stability” in regard to the nuclear-arms control. “You will see at multiple levels an intensification of the engagement to ensure that there are guardrails around this competition so that it doesn’t veer off into conflict,” he added.
3. PRC state media said that the U.S. and China had agreed to ease visa restrictions on each others’ journalists. The U.S. will issue one-year multiple-entry visas to Chinese journalists, following which the PRC side will reciprocate; the Trump administration previously limited visas for Chinese journalists to 90 days.
PRC state media claimed that the agreement was reached ahead of the Biden-Xi meeting. Senior Biden-Harris administration officials said during the background press call that “the two leaders did not discuss visa issues in any sort of form” during their summit.
The State Department later confirmed the agreement, and noted, “We welcome this progress but see it simply as initial steps.”
4. Former Secretary of State Henry Kissinger said at the Bloomberg New Economy Forum that the Biden-Xi virtual summit marked a “good beginning.”
Kissinger added that the meeting should be “followed by concrete discussions that lead in a direction both presidents have affirmed they want to pursue.” He added, “We’re through the mountain pass, on a precipice from which you can look in both directions. And now it depends which direction is chosen.”
Kissinger also said that “both sides have to accept that a conflict between major technical powers of comparable capacities must not occur for the preservation of humanity.”
Nov. 17
1. In a speech at the Bloomberg New Economy Forum, former U.S. Treasury Secretary Hank Paulson said, “We need more certainty around how the U.S. and China are going to compete, where we’re going to cooperate, and how we’re going to manage conflict. Otherwise the world is heading for a very dangerous place.”
Paulson also said that “wholesale financial decoupling is impossible, and partial decoupling is likely to make the United States, China and the world more susceptible to financial crises.”
2. The South China Morning Post reported that the European Union put off a confidential plan to upgrade its trade ties with Taiwan.
The report also noted that Brussels is simultaneously trying to “re-engage” with Beijing. “As part of the re-engagement—a buzzword in China-focused policy circles in Brussels for the past two months—the EU and China are trying to arrange a summit before the end of the year,” according to SCMP.
Nov. 18
1. When asked by reporters if he supported a diplomatic boycott of the Beijing Olympics, President Biden said, “It’s something we’re considering.”
2. According to several news reports, the PRC withdrew a ban on an American citizen leaving China while the U.S. sent back seven PRC citizens who had served prison in America days before the Biden-Xi virtual meeting.
The American, Daniel Hsu, was allowed to leave China for the first time since 2017.
The U.S. Immigration and Customs Enforcement agency said that the seven PRC citizens include “three individuals convicted of financial crimes, two individuals convicted of photographing and sketching a defense installation, one individual convicted of unlawful entry of a restricted building, and one individual convicted of resisting an officer.”
The most notable of the seven PRC citizens is Xu Guojun, a 63-year-old former Bank of China manager who fled China about two decades ago after defrauding the bank of $485 million. PRC anti-corruption authorities noted that the “forced repatriation” of Xu “marks significant progress in the handling of the 20-year-old case”; Xi Jinping has long sought to hunt down and bring back corrupt officials who have escaped abroad.
Other notable PRC individuals include Zhang Yujing, a woman who was convicted in 2019 of unlawfully entering former U.S. president Donald Trump’s Mar-a-Lago resort in Florida; as well as Zhang Jielun and Wang Yuhao, two former University of Michigan students who had been convicted of illegally entering a Florida naval base in 2020 and taking photos.
Nov. 19
Bloomberg News, citing a person familiar with the matter, reported that Biden and Xi agreed to support high-level “discussions between the U.S. military and top officials from the People’s Liberation Army, including the vice chairman of the country’s powerful Central Military Commission” during their virtual meeting.
OUR TAKE
1. At a glance, the Biden-Xi meeting was uneventful and produced no “breakthroughs,” as senior administration officials claimed. While that may have been the case for the American side, Xi Jinping and the CCP did win minor victories with the journalist visa agreement and the repatriation of seven PRC citizens.
We previously analyzed that the U.S. and its allies played the Taiwan card “to pressure Xi Jinping into being more amenable to negotiation” and secure the virtual meeting between Biden and Xi. Recent news indicates that the Biden-Harris administration also made concessions to get the Biden-Xi summit; both the journalist visa agreement and the return of PRC citizens tangentially meet the CCP’s demands laid out in two lists handed to Deputy Secretary of State Wendy Sherman during her trip to Tianjin in July.
The U.S. concessions serve to boost Xi’s “quan wei” as they affirm the “correctness” of his approach to Sino-U.S. affairs and the rising prominence of “the East is Rising, the West is in Decline” propaganda narrative under the Xi leadership. The timing of the U.S. concessions and when they were announced—around the Sixth Plenum period and after Xi released the full text of his “historical resolution”—further embellishes Xi’s stature during a crucial time in the CCP’s political calendar.
2. We have noted on numerous occasions that the Biden-Harris administration is weakening its stance towards the PRC (see here, here, and here). The journalist visa agreement, the repatriation of PRC citizens, and President Biden not seeking accountability from the CCP over the coronavirus outbreak during his meeting with Xi Jinping offer further evidence that the Biden-Harris administration is moving away from the Trump administration’s approach to Communist China despite the popular claim by media outlets and commentators that the current White House is just as tough on China as (if not tougher than) the previous one, or that there is more “continuity” than change between the two administrations.
The Trump administration placed restrictions on PRC journalists in recognition that they are really propaganda workers, foreign agents, and even intelligence operatives, rather than being journalists in the conventional sense. By removing the Trump administration’s restrictions, the Biden-Harris administration is at best engaging in naive reciprocity with the PRC and at worst willfully turning a blind eye to the problem of CCP external influence and intelligence operations. Moreover, it is unclear at present whether the CCP authorities would live up to its side of the bargain and allow expelled U.S. journalists to return to Hong Kong and the mainland. And even if American journalists do get back to China, the CCP will undoubtedly impede their scope of operations as the Xi leadership looks to tighten its control over “approved” news sources and the media in general.
The return of the seven PRC citizens to China may not seem like much in considering that they are all convicted prisoners. However, the “forced repatriation” of individuals wanted for corruption like Xu Guojun adds luster to Xi’s anti-corruption campaign and boosts his “quan wei.” The Xi leadership’s prestige is further improved if some of the individuals it received from the lopsided “prisoner exchange” with America are in fact intelligence operatives. Beijing will no doubt seize upon this concession to demand that the Biden-Harris administration next take concrete steps to address its two lists and bring Sino-U.S. relations back on the “right track.”
Aside from the Biden-Xi virtual meeting, it is unclear what the U.S. got from the PRC in exchange for the concessions. The Xi leadership appeared to pay lip service rather than go along fully with the climate agenda put forth by the U.S. and its allies; a Nov. 17 Politico report noted that despite the U.S., EU, Italy, and the UK having “spent a year putting diplomatic pressure” to get “China to make a radical statement on climate,” they “largely failed” in their endeavor per the outcome of COP26.
3. The mainstream consensus after the CCP’s Sixth Plenum and the publication of Xi’s “historical resolution” holds that Xi Jinping is supremely powerful, unrivaled, and will almost certainly be the leader of the PRC for the foreseeable future. This assessment of Xi may incentivize countries to “kowtow” to Communist China sooner rather than later to secure financial and other benefits. Efforts by countries to “re-engage” or “intensify engagement” with the PRC to avoid antagonizing the regime and provoking conflict will embolden Beijing to accelerate plans to seek “reunification” with Taiwan, as well as advance the CCP agenda for regional and global hegemony.
Washington appears to be on track to revert the Sino-U.S. relationship back to “engagement” and make good with Xi as long as the latter appears unassailable. However, the situation could shift quickly if political Black Swans emerge in China and imperil the Xi leadership. The U.S. and its allies could also seek out opportunities to carry out “anti-Xi, not anti-CCP” maneuvers if they believe that Xi has become vulnerable to pressure and is unwilling to bring China in lockstep with the global climate agenda.
Businesses, investors, and governments should not assume that political risks in China will ebb even though Sino-U.S. relations appear to be improving for the moment and Xi Jinping seems to be completely in control at home. On the contrary, Xi is even more brittle now with the rollout of his “historical resolution,” and any inability on his part to cope with the “perfect storm” of problems facing the CCP regime will likely be latched upon by his domestic and foreign enemies to put him under pressure and pave the way for his ouster.
