SinoInsight 1
Jan. 13
Economic Information Daily, a media outlet under state mouthpiece Xinhua, published an investigative report exposing the construction of illegal villas in an ecological preserve in Jinan City, capital of Shandong Province (“多年拆違巋然不動！數千棟“堅挺別墅”野蠻侵蝕濟南泉域保護區”).
According to the report, thousands of illegal villas were constructed in the southern mountainous area of Jinan between 2003 to 2015, or in the years after the banning of such constructions in important ecological and water conservation areas were introduced. Located in the Taishan Mountain area, the southern mountainous area of Jinan is also a main source of groundwater supply; the report noted that the “surprising number” of villas there poses a potential threat to the continuous flow of springs in the area.
In May 2017, the Jinan Southern Mountain Management Committee person-in-charge disclosed at an unspecified conference that “wealthy and privileged people (非富即貴) are building villas in the southern mountain area.” That year, the area’s local government reportedly embarked on a “demolition storm” under the supervision of the Ministry of Ecology and Environment to deal with the issue. However, Economic Information Daily reporters found that only a token number of illegal buildings had been demolished while thousands remained untouched. Further, the reporters spotted individual new villa projects being constructed with “great fanfare.”
The Economic Information Daily noted that despite its findings, the official website of the Jinan Southern Mountain Management Committee claimed that 6,871 illegal constructions covering 4.23 million square meters were demolished from May 2017 to September 2020. A management committee meeting report on March 4, 2021 claimed that the demolition of 188,000 square meters of illegal construction in 2020 meant that there was “zero growth” of such construction “for the first time,” according to other mainland media reports.
An Economic Information Daily reporter who reviewed southern mountainous area demolition task accounts reported to Jinan City since 2017 found that the objects that were taken down were mainly illegal bungalows, factories, temporary farmhouses, breeding houses, and “factory-style sheds,” but few villas.
After the publication of the report, the Shandong provincial Party Committee and government, as well as the Jinan municipal Party Committee and government, established investigation teams respectively. The authorities announced that they would conduct a comprehensive and thorough inspection of the “relevant issues” concerning illegal villas in Jinan’s southern mountainous area.
Party mouthpiece People’s Daily also weighed in on the topic via a Weibo post criticizing the building of illegal villas in Jinan and calling for “resolute investigation and thorough reform.”
Jan. 14
1. The National People’s Congress Environmental Protection Committee held a symposium in Beijing on ecological and environmental protection. Li Zhanshu, the NPC Standing Committee chairman and third-rank Politburo Standing Committee member, attended the symposium and delivered a speech.
Li stressed in his speech the need to “thoroughly implement Xi Jinping Thought on ecological civilization and coordinate the promotion of legislative amendments in the field of ecological environment.”
2. Jiemian News, a semi-official mainland news website, reported that the local urban management department in the southern mountainous area of Jinan had begun demolishing illegal villas in Tianjingyu Village.
Tianjingyu Village is one of the locations mentioned in the Economic Information Daily report. The villa project was 15,000 square meters in scale and the major shareholder (60 percent) of the project’s construction work unit is Jinan Cultural Tourism Development Group. The State-owned Assets Supervision and Administration Commission of the Jinan municipal government owns 93 percent of Jinan Cultural Tourism Development Group.
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Related background information
1. State media reported that four central ecological and environmental protection inspection teams (second round, fifth batch) were stationed in Heilongjiang Province, Guizhou Province, Shaanxi Province, and the Ningxia Hui Autonomous Region from Dec. 3 to Dec. 5 to carry out inspections.
On Jan. 9, the Ministry of Ecology and Environment announced that 478 Party and government leading cadres nationwide have been held accountable over various violations.
2. Illegal villas in the Shaanxi Qinling Mountains (see here and here)
Starting from around 2000, more than 1,000 luxury villas were illegally constructed in the nature reserves of Qinling Mountains in Shaanxi Province. From May 2014 to July 2018, Xi issued six separate “important instructions” specifically requesting that the villas be demolished, but was met with resistance from local officials.
Progress was made on demolition only after Central Commission for Discipline Inspection deputy director Xu Lingyi personally made two inspection trips to Shaanxi in July 2018 while setting up a special rectification work group in the area. Several senior provincial- and city-level officials were subsequently investigated, including former Shaanxi Party Secretary Zhao Zhengyong. The authorities later made a documentary (“一查到底正風紀——秦嶺違建整治始末”) about the investigation and handling of the Shaanxi illegal villas issue, which aired on state broadcaster CCTV on Jan. 9, 2019.
OUR TAKE
1. The recent attention to the construction of illegal villas in Jinan may seem like Beijing’s attempt to tackle climate issues and protect the environment at a glance. However, the factional backgrounds of officials in charge of Jinan and the earlier case of illegal villas in Shaanxi’s Qinling Mountains indicate that the Xi leadership is addressing factional struggle, political loyalty of officials, and the longstanding problem of “orders not leaving Zhongnanhai” (政令不出中南海).
2. A review of Shandong Party secretaries and governors from 2003 to 2015, the period where thousands of villas were constructed, coincides with the tenure of targeted Jiang faction member Zhang Gaoli and other Jiang faction cronies.
Shandong Party secretaries (2003 – 2015)
- November 2002 to March 2007: Zhang Gaoli (retired; former Politburo Standing Committee member).
- March 2007 to March 2008): Li Jianguo (retired; former National People’s Congress first-rank vice chairman and All-China Federation of Trade Unions chairman).
- March 2008 to April 2017: Jiang Yikang (retired; former Shandong Party secretary).
Shandong Governors (2003 – 2015)
- December 2001 to January 2003: Zhang Gaoli.
- January 2003 to June 2007: Han Yuqun (retired; former National People’s Congress Financial and Economic Committee vice chairman).
- June 2007 to March 2013: Jiang Daming (current member of the Chinese People’s Political Consultative Conference).
- March 2013 to February 2017: Guo Shuqing (current head of the China Banking and Insurance Regulatory Commission).
With the exception of Guo Shuqing, all the officials listed above are associated with the Jiang faction.
Zhang Gaoli, who recently made headlines for having allegedly sexually assaulted tennis star Peng Shuai, is in hot water with Xi Jinping over blocking the latter’s effort to criticize Jiang Zemin in his “historical resolution” passed at the Sixth Plenum of the 19th Central Committee (see here and here). Investigations into illegal villas in Jinan, the construction of which began under Zhang, could be used against Zhang and other Jiang faction associates if the Xi leadership is looking to build a case against them.
Guo Shuqing would unlikely be implicated by investigations into the Jinan illegal villas. For one, Guo belongs to the Xi camp, and Xi Jinping will refrain from purging one of his own in a Party Congress year to preserve his “quan wei” (prestige and authority). Further, Xi would be aware that Guo could not do much to change things in Shandong given entrenched Jiang faction interests in the province and Guo’s relative inability to shake things up as he was not the provincial “yi ba shou” (一把手; Party secretary or leading cadre) at the time. Finally, there is the unspoken rule in the CCP officialdom where succeeding officials tend to avoid overturning their predecessors’ policies and legacy so as not to offend their superiors and ruin their political career; succeeding officials therefore usually turn a blind eye to or end up partaking in their predecessor’s corruption.
3. Xi Jinping previously harped on the demolishing of illegal villas in Shaanxi’s Qinling Mountains in the lead-up to the 19th Party Congress in 2017 and after to secure several political objectives:
- The act of tearing down physical structures that were mainly the work of his factional rivals and the punishing of officials responsible for the illegal constructions helps Xi to establish his “quan wei.” Officials are visibly reminded of who’s boss now and local officials are “incentivized” to obey and properly implement Beijing’s orders.
- Xi is better able to gauge the loyalty of officials based on how faithfully they implement the central government’s decrees on illegal villas. Failure to properly carry out Beijing’s orders gives the Xi leadership a reason to remove disloyal officials and break up their local interest networks, and appoint loyalists to cultivate new networks devoted to Xi Jinping.
- Illegal villa inspections provide a ready-made opportunity for Xi to perpetuate the anti-corruption campaign and carry out further “rectification” work.
- Xi gains credit for his work in promoting environmental protection.
Xi will likely be looking to secure similar political objectives ahead of the 20th Party Congress with the ongoing campaign to demolish illegal villas in Jinan’s southern mountainous area and punish disobedient officials.
SinoInsight 2
Last week, Xi Jinping signaled a strengthening of anti-corruption efforts as he looked to boost his “quan wei.” Xi’s political maneuvering sparked a response from his factional rivals in an overseas Chinese language media known to carry factional struggle messaging.
Jan. 13
Wu Fulai, Renmin University’s deputy Party secretary and discipline inspection Party secretary, published an article titled, “Enhance the Political Consciousness of Being Always on the Path of Strictly Governing the Party” (增強全面從嚴治黨永遠在路上的政治自覺). The article was published in the fifth edition of the weekly publication “China Discipline and Supervision News” (中國紀檢監察報) and on the official website of the Central Commission for Discipline Inspection.
Wu’s article opened by praising Xi Jinping’s Jan. 11 speech to provincial and ministerial-level leading cadres at the Central Party School. He wrote that Xi’s emphasis that the Party is “always on the road” in fighting corruption and “self-revolution” reflects “lofty concept; profound thinking; steeped in Marxist worldview, epistemology and methodology; and is full of profound historical vision, demonstrating a high-degree of strategic sobriety.”
The article added that since the 18th Party Congress, Party Central with Xi Jinping at the core has:
- “Raised the flag and turned the tide”;
- Had the “courage to turn the blade inward and apply the scalpel to stubborn chronic diseases in the Party, and promote strict governance of the Party with thunderous force”;
- “Stopped some unhealthy trends that were thought to be difficult to stop previously; overcame some common, stubborn chronic diseases; resolved many long-term problems that should have been resolved but were not; and eliminated serious, hidden dangers within the Party and the nation.”
However, the Party continues to face:
- “Long-term and complex” tests (long-term governance, reform and opening up, market economy, external environment, etc.);
- “Sharp and severe” dangers (mental laxity, lack of ability, being out of touch with the masses, etc.);
- “Many unresolved outstanding problems” (ideological impurity, political impurity, organizational impurity, behavioral impurity, etc.);
- “Various factors that weaken the Party’s advance nature and damage its purity are ever-present, and various dangers that go against the original intention and mission and shake the Party’s foundation are everywhere.”
Wu’s article concludes with a call to be “always on the road” in terms of political consciousness and “deepen the comprehensive and strict governance of the Party.”
Jan. 14
1. Party mouthpiece People’s Daily published a front page article titled, “Respondents to the ‘Cycle Conversation’” (‘窯洞之問’的答卷人).
The article noted that Xi Jinping brought up “cycle” conservation between Mao Zedong and Huang Yanpei—a famous conversation where Mao claimed that democracy would enable China to escape the rise and fall of dynastic political power—at the Sixth Plenum and in the Jan. 11 seminar for provincial and ministerial-level leading cadres. While Mao’s answer to breaking the “cycle” was “democracy,” Xi’s answer was “self-revolution,” the article said.
The People’s Daily article added that the CCP regime faces problems such as Black Swans and Gray Rhinos emerging “all the time.” While the Party’s “historic achievements and historical changes” should be praised, “the heavy task of reform, development, and stability, the staggering amount of contradictions, risks, and challenges, and the great tests of governance are unprecedented; the world is seeing profound changes unprecedented in a century.”
The article then notes Xi Jinping’s warning to the CCP that corruption would lead to the “destruction of the Party and the nation” before trotting out Xi quotes that show his determination to fight corruption and preserve the regime:
- “I believe that only we can defeat ourselves, and no one else”;
- Xi cites a passage from “Dream of the Red Chamber: “It is known that a great house such as this, if killed from the outside, will not be dead for a while. As the ancients once said, ‘a many-legged insect will not be stiff until it is dead’; there must be suicide and self-destruction at home first before [the family faces] complete defeat. As the saying goes, ‘things must first decay before insects can grow!’”
- At the Jan. 11 seminar, Xi reportedly raised his voice when he said, “Here, I’ll again strike the drum with a heavy mallet.” He added “resolutely and decisively” (斬釘截鐵): “Party Central’s attitude is very clear. Party discipline and national laws will never forgive those with problems with Party discipline and national laws! In particular, those who usurp the interests of the nation and the people, erode the Party’s ruling base, shake the socialist regime’s political power, and those who engage in political cliques and factions, small circles, and interest groups within the Party, should be investigated and punished resolutely and without mercy!”
- “Either offend hundreds of corrupt elements, or you offend 1.4 billion people. This is a political account that can’t be more clearly understood, and an account of the people’s hearts and minds.”
- There is “nothing to fear” when it comes to “hunting tigers and swatting flies,” even if the officials are of high rank (刑不上大夫).
Analysis: Following a recent theme (see here and here), the article obliquely criticizes Jiang Zemin and his faction for allowing serious corruption to endanger the regime during their era of dominance (1997 to 2012). The article also signals that intra-Party “political cliques and factions” must be dealt with “without mercy and resolutely,” and without regard for the high rank of certain officials, if the Xi leadership is to engage in “self-revolution” and overcome the various internal and external problems endangering the regime.
2. Duowei News, an overseas Chinese language media headquartered in Beijing, published an op-ed titled, “Xi Jinping Intensively Emphasizes Historical Self-confidence; ‘Five Confidences’ Soon to Emerge” (習近平密集強調歷史自信 “五個自信”呼之欲出).
The op-ed believes that Xi will expand his “Four Confidences” (chosen path, guiding theories, political system, and culture) to “Five” given his repeated emphasis on “historical self-confidence” after the Sixth Plenum last year. The op-ed added that there is “basis and significance” to the CCP’s affirmation of “historical confidence” given the May Fourth Movement and the Soviet Union’s denial of its own history (Khrushchev denouncing Stalin, etc.); the Soviet leadership’s “simple denial” of its past led to the disintegration of the regime.
In concluding, the op-ed notes that Xi’s “intensive emphasis” on “historical self-confidence is both an effort to affirm and recognize the Party’s century-long history and construct a “historical legitimacy narrative” for generations of continuous struggle for national rejuvenation.
Analysis: Duowei is widely believed to be part of the Party’s “Great External Propaganda Plan” (大外宣) network and is known to carry the political messaging of various CCP factions. If the Jiang faction is behind this op-ed, then they are warning Xi Jinping that the “simple denial” of Jiang’s political legacy could potentially lead to the regime’s demise.
Jan. 15
1. According to a Xinhua report, Xi Jinping recently gave instructions on political and legal affairs work, and affirmed the political and legal affairs apparatus’s “new achievements” last year in “maintaining national political security and social stability; comprehensively deepening reforms in the field of politics and the law; normalizing anti-gangsterism (掃黑除惡); and educating and rectifying political and legal affairs teams.”
Xi also called on Party Committees at all levels to support the political and legal affairs apparatus in ensuring the successful convening of the 20th Party Congress. Xi’s instructions were conveyed by Central Political and Legal Affairs Commission secretary Guo Shengkun at the Central Political and Legal Affairs Work Conference held that day.
2. The Central Commission for Discipline Inspection released the first episode (“Don’t Let Down 1.4 Billion [People],” “不負十四億”) of a new documentary series on fighting corruption (“Zero Tolerance,” “零容忍”) on its website.
The documentary stressed Xi Jinping’s determination to combat corruption, and quoted him as saying, “The hearts and minds of the people are politically paramount (民心是最大的政治), and the people hate corruption the most. Either offend hundreds of corrupt elements, or you offend 1.4 billion people. This is a political account that can’t be more clearly understood, and an account of the people’s hearts and minds.”
The documentary then cites anti-corruption data under Xi Jinping, noting that discipline inspection and supervisory organs handled 4.078 million cases and 4.379 million people as of October 2021. A total of 484 centrally administered cadres (中管幹部, senior cadres under the central government’s management) and 3.998 million people have since been punished.
The documentary highlights the problems of corruption in the political and legal affairs apparatus and in the financial sector, noting that the intertwining of political and economic issues poses a great threat to the CCP regime’s political and financial security.
The documentary also features “confessions” and “repentance” statements by several purged deputy ministerial-level officials, including former public security vice minister Sun Lijun. The documentary claims that Sun was the “political backer” (政治靠山) of other senior political and legal affairs officials like Wang Like (pronounced “lee kuh”), Gong Daoan, Deng Huilin, and Liu Xinyun. Those officials formed a “political gang,” with Liu Xinyun and Gong Daoan taking advantage of their positions to furnish Sun Lijun with surveillance information and intelligence.
The documentary added that the central government’s investigation into the Sun Lijun “political gang” is still ongoing, including investigations into former justice minister Fu Zhenghua. Also, anti-corruption investigators say that the Sun Lijun case is a typical example where political and economic problems intertwined, and is one of the most serious cases being handled since the 19th Party Congress.
The documentary further revealed that Hu Huaibang, the former Party secretary and chairman of China Development Bank, previously made “power and money” deals with former CEFC China Energy chairman Ye Jianming, including issuing a $4.8 billion loan to CEFC. The documentary added that 71 companies under CEFC have since been placed on merger or bankruptcy proceedings, and their assets are under judicial auction.
Analysis: As we have noted on numerous occasions, the Jiang faction has long influenced the political and legal affairs apparatus and the financial sector, and Xi Jinping is looking to “rectify” the strongholds of his factional rivals to solve his governance issues.
The information in the new anti-corruption documentary affirms our earlier analysis about Sun Lijun, as well as his and other political and legal affairs officials’ involvement with “cliques and factions” in the Party. The Xi leadership appears to be setting the stage to later reveal Fu Zhenghua as Sun’s “political backer.” The investigation into Fu will likely implicate even more senior officials in the political and legal affairs apparatus, including other active or retired public security ministers and vice ministers, Central Political and Legal Affairs Party secretaries, the Supreme People’s Court president, and former 610 Office leading cadres.
OUR TAKE
1. Xi Jinping’s renewed focus on anti-corruption matters and continued, indirect criticism of Jiang Zemin and his faction suggest that he is preparing to make major factional struggle moves in the lead up to the 20th Party Congress. Such moves would likely come after the conclusion of the ongoing campaign to “educate and rectify” the political and legal affairs apparatus concludes this March, and should concern the political and legal affairs system and the financial sector.
Xi is describing his anti-corruption efforts as an attempt to escape the “rise and fall” political cycle and avert the destruction of the Party and the regime. This suggests that the major factional struggle moves he is planning could prove to be very shocking to the public and conceivably damage the Party’s “great, glorious, correct” (偉光正) image even further (the “Zero Tolerance” documentary, which airs the CCP’s dirty laundry, already undercuts the regime’s image). Thus, Xi needs to start softening the blow to the regime’s legitimacy now by providing ample “justification” for the moves upfront.
Xi’s promotion of the anti-corruption campaign and his “self-revolution” solution to the regime’s woes also appear to be efforts at boosting his “quan wei” to improve his third term bid at the 20th Party Congress.
2. Xi Jinping seems determined to condemn the political legacy of Jiang Zemin and his faction one way or another despite being blocked from doing so officially in his “historical resolution” (see here and here). The Jan. 14 Duowei op-ed would unlikely dissuade Xi from his agenda, and even more so if the Jiang faction was behind it.
Xi could later move to criticize Jiang and the faction named after him more directly if doing so is necessary to establish his “quan wei” and secure a third office term. Concurrently, Party propagandists would seek to credit Xi with “sparking another ‘great awakening’ in dealing with the ‘problems’ and ‘deviation’ of Party leadership from the “reform and opening up” era (i.e. criticizing Jiang Zemin and purging Jiang faction members). Once the ‘problems’ and ‘deviation’ are ‘rectified,’ Xi will be justified in seeking a third term to serve as the ‘great helmsman’ in leading the regime towards its ‘Second Centenary Goal’ in the ‘new era.’”
3. The recent propaganda on anti-corruption and warnings about dangers facing the CCP regime run counter to the Xi leadership’s earlier claims that it had achieved “overwhelming victory” and “comprehensive consolidation” in the anti-corruption struggle. This glaring contradiction affirms our assessment that Xi Jinping still lacks “quan wei” and is struggling to cope with a “perfect storm” of domestic and external problems facing the regime.
Continued and even increased propaganda messaging of the sort that we have listed above foreshadows an intensification of factional fighting in the CCP elite. Businesses, investors, and governments must account for escalating political risks and Black Swans this Party Congress year.
