SinoInsight 1
Jan. 26
Or Hin-cham, a 22-year-old triad member, was sentenced by the Hong Kong District Court to two years and nine months in prison for serving as a look-out in an “injuring with intent” case involving a female Falun Gong practitioner in 2019.
Judge Hui Shiu-keung noted that injuring with intent is a very serious crime and that the incident appeared to have been organized and premeditated, the Hong Kong edition of The Epoch Times reported. The judge added that the severeness of the injuries suffered by the Falun Gong practitioner Ms. Liu—blows struck with an object similar to a police baton left a head wound of between 4 to 5 centimeters that required five stitches at the hospital, as well as bruises on the inner thigh—was an “aggravating factor” for Or’s stiff sentence.
According to Hong Kong Epoch Times reports, Ms. Liu was leaving the Cheung Sha Wan Police Station on Sept. 24, 2019 after discussing details of an approved annual parade on Oct. 1 with the police when she was attacked by two black-clad men. After beating her up and leaving her with the injuries described above, Ms. Liu’s assailants fled in a seven-seater vehicle. The assailants and mastermind remain at large.
Or Hin-cham was implicated in the assault of Ms. Liu by happenstance. That day, Or and two others were found loitering near the Cheung Sha Wan Police Station and were arrested by the police on suspicion of intending to attack the police. The police were on alert due to intensifying clashes between police and protesters during the anti-extradition bill movement at the time, and there was an attack on the police in nearby Kwai Chung earlier in the day. Ms. Liu was attacked within an hour of the detention of Or Hin-cham and his buddies, and the police later found two photos of Ms. Liu and other information tracking her whereabouts on Or’s cellphone, which led to his being charged with being a look-out for an “injuring with intent” case. Or’s buddies escaped charges due to insufficient evidence.
The Hong Kong Epoch Times reported that Ms. Liu had applied for permits with the police for Falun Gong rallies and demonstrations in Hong Kong on several occasions. Ms. Liu had also been intimidated, harassed, and even stalked by CCP agents for several years, including an incident in 2016 where she was drenched with red oil and warned that “things will not end like this next time” if she continued with her Falun Gong activities. Ms. Liu continued to receive threatening telephone calls and to be followed by suspicious characters after the 2019 attack, causing her to move overseas in 2020 due to safety considerations.
OUR TAKE
1. The sentencing of a minor triad member over the assault of a Falun Gong practitioner in Hong Kong would be a trivial issue if it did not concern “you die, I live” factional struggle in the CCP elite. Many proxy battles between the Jiang Zemin faction and the Xi Jinping camp have been waged in Hong Kong since Xi took office in 2012. The persecution of Falun Gong is also a core issue in the Xi-Jiang factional struggle; Xi has repeatedly played the “Falun Gong card” to gain leverage against the Jiang faction since he ordered the dismantling of the CCP’s labor camp system (a key persecution apparatus) in January 2013, and the Jiang faction has sought to have Xi “inherit” Jiang Zemin’s political legacy by creating the impression that Xi approves of his predecessor’s persecution campaign (with the logic being that Xi’s hands are just as bloody as Jiang’s on the Falun Gong issue, and hence it would be folly to end the persecution and target its perpetrators). The Or Hin-cham-Ms. Liu case thus represents an intersection of factional struggle issues (Hong Kong and Falun Gong) with consequences for Party elite politics, and is more than meets the eye.
The serving of justice in a case where Falun Gong is targeted in Hong Kong is noteworthy in and of itself. Until December 2020, the Hong Kong police have never seriously followed up on reports of abuse or made arrests in cases where Falun Gong practitioners were attacked by assailants or in which their street stalls were vandalized, a phenomenon that is almost certainly linked with the Jiang faction’s longtime sway over Hong Kong. The passage of the Hong Kong National Security Law in June 2020 seemingly made police action in favor of Falun Gong even more unlikely because practitioners are the definition of “unpatriotic,” “anti-CCP” elements—Falun Gong adherents display “Heaven will destroy the CCP” (天滅中共) banners around the city, publish literature exposing the Party, and Falun Gong-linked media report on topics that the PRC actively censors to upkeep its “great, glorious, correct” image. Yet in the Or Hin-cham-Ms. Liu case, the police made an effort to investigate the assault of the Falun Gong practitioner and one of those involved was successfully prosecuted when the issue could have just as easily been ignored—a virtually unthinkable outcome given the political sensitivity of Falun Gong to the CCP and the Party’s tighter grip over Hong Kong.
The Or Hin-cham-Ms. Liu case appears to be the latest effort by the Xi leadership to play the “Falun Gong card” in Hong Kong against the Jiang faction (for more on the topic, see here, here, here, here, and here).
Notable Xi-Jiang factional struggle incidents involving Falun Gong and Hong Kong since late 2020 include:
- December 2020: The Hong Kong police arrested a mobster who attacked six Falun Gong information booths in the city.
- Dec. 31, 2020: The pro-CCP, anti-Falun Gong Hong Kong Youth Care Association announced its official disbandment.
- April 12, 2021: Four masked men broke into the Hong Kong Epoch Times printing press and smashed up the place.
- April 22, 2021: The Hong Kong police announced the arrest of eight men for vandalizing and destroying Falun Gong information booths earlier that month. The following day, the Hong Kong Epoch Times cited police sources as saying that the eight men have triad backgrounds.
- April 23, 2021: The Hong Kong Epoch Times reported that police officers from the New Territories South Region Crime Squad were investigating the attack on the Epoch Times printing press in Hong Kong on April 12, citing police sources. The police sources also said that the Hong Kong police “attach great importance to cases of political vandalism” and “will never allow anyone to commit such crimes under any pretext.”
- May 11, 2021: Hong Kong Epoch Times reporter Liang Zhen was attacked outside her residence by a man wielding a baseball bat.
- July 7, 2021: Pro-CCP Hong Kong lawmakers pressed Secretary for Security Chris Tang to outlaw Falun Gong and target Falun Gong-linked media. Tang replied that the Hong Kong government is looking into allegations that Falun Gong broke national security law and will take further action “if there is evidence.” He then read out Article 4 of the NSL, which states that “human rights shall be respected and protected in safeguarding national security” in Hong Kong, as well as the protection of “freedoms of speech, of the press, of publication, of association, of assembly, of procession and of demonstration” that Hong Kong residents enjoy under the Basic Law.
How the Hong Kong authorities handle the ongoing cases where Falun Gong was targeted (vandalism, attacks, etc.), and whether Falun Gong and Falun Gong-linked media outlets are allowed to operate in the city, are key indicators to watch to gauge the intensity of the Xi-Jiang factional struggle and political risk in China. Xi Jinping will be more inclined to use the “Falun Gong card” this year if he is facing steep opposition from the Jiang faction and the “anti-Xi coalition” over his third term bid at the 20th Party Congress.
2. The sentencing of Or Hin-cham could also be the Xi camp’s way of cautioning the Hong Kong establishment elites and triads against spreading chaos and violence in the city. A similar signal appeared to have been sent last year with the sentencing of seven men to between three-and-a-half to seven years in prison over the Yuen Long Incident; on July 21, 2019, triad members attacked anti-extradition bill protesters and passers-by at the Yuen Long MTR station and its vicinity.
According to various news reports and information circulating after the Yuen Long Incident in 2019, Zhongnanhai had allegedly dispatched a team to Hong Kong around the middle of August to investigate the Hong Kong government’s insistence on passing the anti-extradition bill and the police force’s firing of tear gas and rubber bullets against protesters after the massive June 9 protest march. Such a move by Zhongnanhai would indicate that the Xi leadership was not behind the escalation of violence and chaos during the anti-extradition bill protests, and had suspected the hand of factional rivals at work. The lack of police action on Aug. 18 when 1.7 million Hongkongers held a protest match suggests that the information about a Zhongnanhai team in Hong Kong at the time has a ring of veracity.
SinoInsight 2
Jan. 26
1. The CCP anti-corruption authorities announced the “double expulsion” (雙開) of former Hangzhou Party secretary Zhou Jiangyong from the Party and his office. Zhou is accused of having “low political awareness, publicly complying but privately defying (陽奉陰違) the decisions and deployment of Party Central, colluding with capital, and supporting the disorderly expansion of capital.”
2. “Xiakedao,” the official People’s Daily WeChat account, published an article titled, “Do You Understand the Central Commission for Discipline Inspection’s Inaugural Mention of ‘Cutting the Link Between Power-Capital Collusion’?” (中央紀委首提“斬斷權力與資本勾連” 你看懂了嗎?)
The article noted that a sentence in the communiqué of the sixth plenary session of the 19th Central Commission for Discipline Inspection, “investigate and punish the corruption behind the disorderly expansion of capital and platform monopolies, and cut the link between power and capital collusion” had garnered “much attention,” before noting that Zhou Jiangyong had been accused of the following in the announcement of his “double expulsion.”
The article then cited its interview with Professor Wang Xu, a researcher at Renmin University’s Contemporary Political Parties Research Platform and vice dean of the university’s law school, on the problem of “power and capital collusion” and its threat to the regime:
- Power helps to lower the threshold for loans and listings for platform companies. For instance, Lai Xiaomin, the former Party secretary of the state-owned bad-debt manager Huarong Asset Management, oversaw the issue of illegal loans and the transfer of hundreds of millions of yuan to many substandard enterprises.
- Power helps capital to engage in unfair competition and platform monopoly. For instance, Peng Bo, former deputy director of the Central 610 Office, favored specific online platforms (靠網吃網), attacked their competitors, and disrupted the order of market competition when he was deputy director of the Cyberspace Administration of China.
- Market insider trading, manipulation of stock prices, malicious speculation on futures, using insider information to court and corrupt stakeholders, and other such activities seriously disrupted market expectations. Former public security deputy minister Sun Lijun was named as an “particularly serious” example of an official who participated in securities market manipulation.
- Capital serves as a “supporter” of power. Many fallen officials share a common “capital master” and “interest foundation.”
The “Xiakedao” article added that “power-capital collusion” threatens national economic security, affects the economic system’s normal operations, undermines existing economic rules, and is a huge hidden danger that cannot be ignored. Meanwhile, “cutting the link” refers to cutting cross-circle connections between political power and external economic systems and wealth groups. The article warns that bureaucratic capitalism controlling state power and harming the people’s livelihood is a “profound historical lesson” in modern China, and calls for a high degree of vigilance to this hazard.
The article stresses that capital is a necessary element in the socialist market system and is indispensable in economic operation. Preventing the “disorderly expansion” of capital means to ensure that capital is confined to the economic sphere and cannot encroach on other fields. That is, the accumulation of capital to a “certain level” cannot be a reason for its interference in politics, manipulation of public opinion, and its influence of some legislative provisions and the common will of the people. “This is unacceptable in socialist China,” the article writes.
The article also explains that the authorities’ promotion of the anti-corruption struggle and the encouragement of development of new economic and business formats are not contradictory. The anti-corruption effort does not oppose specific economic formats, and the suppressing and stifling of new economic and business formats are by no means in line with economic development in (Xi Jinping’s) new era.
3. China Economic Weekly, a periodical under the People’s Daily, published an article titled, “What Capital Did Zhou Jiangyong Support in Disorderly Expansion?” (周江勇到底支持了哪家資本無序擴張?)
The article noted that two companies linked to Zhou Jiangyong’s family that were mentioned, but not named, in an episode of “Zero Tolerance,” a new anti-corruption documentary that aired on state broadcaster CCTV, are both controlled by Ant Group.
The article concluded by noting that the power of capital can be glimpsed from the “silent disappearance” of an earlier China Economic Weekly piece exposing the extent of Zhou’s corruption (“Elaborating on Zhou Jiangyong’s Downfall: Complaints [about Zhou] Came in Like Snowflakes,” 起底周江勇落馬：“舉報信就像雪花片一樣”) from “certain capital-controlled media platforms.”
Jan. 28
Fang Xinghai, the China Securities and Regulatory Commission vice chairman, held a virtual meeting with over a dozen foreign financial institutions on Jan. 25, according to Reuters, citing people familiar with the matter. Senior executives from BlackRock, Credit Suisse, Fidelity International, Goldman Sachs, JPMorgan, Morgan Stanley, and UBS were in attendance.
Fang reassured the attendees that China will achieve “respectable growth” in 2022. Also, the Xi leadership “understood that the regulatory changes Beijing introduced in 2021 would affect economic growth but was determined to tolerate the pains,” but 2022 would be different due to a “series of significant events,” including the 20th Party Congress, Fang said.
OUR TAKE
1. The “double expulsion” of Zhou Jiangyong for “colluding with capital” and supporting the “disorderly expansion of capital,” the exposure of his connections with Ant Group, and Party propaganda’s focus on “cutting the link between power-capital collusion” indicate that the Xi leadership is ramping up efforts to tackle financial sector corruption and opposing factional elements this year.
Xi Jinping’s move against the financial sector affirms several of our past analyzes:
- October 2017: After the 19th Party Congress, we noted that Xi will step up anti-corruption efforts in the financial sector and the domestic security apparatus.
- November 2020: We wrote that “the rapid development and growing scale of big tech companies in China, as well as their market monopoly, pose a threat to CCP rule.” Also, “the CCP fears a scenario where Chinese big tech companies accumulate enough money and resources to become serious political challengers. Thus, Beijing is preemptively stepping in to regulate tech companies and their online platforms to mitigate the Party’s financial and political risks.”
- February 2021: We looked at the links between Jack Ma’s Ant Group and the Jiang faction.
The Party elites most at risk from Xi’s financial sector purge include those in the Zeng Qinghong clique and the Jiang faction at large. Party princelings involved in finance and who oppose Xi are also at risk of being taken out if they continue to put up resistance. With Xi showing greater determination to criticize Jiang Zemin’s “incorrect political line” and target the Jiang faction, we expect to see high-level purges and even “shocking” political Black Swans before the 20th Party Congress near the end of the year.
2. Aside from placing corrupt officials and factional rivals on notice, the “Xiakedao” article on “cutting the link between power-capital collusion” is also meant to signal to businesses and investors inside and outside of China that Xi Jinping is not turning his back on financial opening or looking to take the PRC backwards with his regulatory crackdown. Rather, Xi’s increased regulatory actions are aimed only at specific companies or individuals who harm “national economic security,” and the PRC is still very much open for business.
Fang Xinghai’s recent meeting with Western financiers is likely intended to convey the same message.
3. The strengthening “rectification” of the financial sector further affirms our analysis that Xi is doubling down on his only successful political achievement—the anti-corruption campaign—as his other “achievements” quickly fall by the wayside with the rapid deceleration of China’s economy and the regime struggles to deal with coronavirus outbreaks while adhering to the “zero-COVID” policy.
Concurrently, Xi is laying the groundwork to blame the PRC’s economic and financial ills on Jiang Zemin and the Jiang faction, while setting himself up as the “savior” who “turned the tide,” “delivered the country from distress,” “prevented the building from collapsing,” and “steered the giant ship of China through dangerous shoals and turbulent waves” via anti-corruption action and the purge of his factional foes.
