SinoInsight 1
1. The CCP General Office issued a document promoting the “normalization and long-termization” of Party history study and education (關於推動黨史學習教育常態化長效化的意見). All regions and departments are required to “conscientiously implement” the document per local conditions.The document stated that the whole Party’s study and education of Party history is a “new starting point” and “major strategic decision” by Party Central with Comrade Xi Jinping at the core. The initiative is also meant to further promote the thorough study and implementation of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and the spirit of the Sixth Plenum of the 19th Central Committee.
The document put forth six points on promoting the “normalization and long-termization” of Party history:
- Focus on strengthening historical self-confidence, and unremittingly make Party history a mandatory and regular course.
- Focus on enhancing theoretical awareness and unremittingly arm the mind with Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era.
- Focus on improving political ability, unremittingly comprehend the decisive significance of the “two establishes,” and firmly attain a high degree of self-awareness of the “two safeguards.”
- Focus on strengthening the sense of purpose, and unremittingly perform good and practical deeds for the masses.
- Focus on stimulating high morale, and unremittingly carry forward the great spirit of Party building.
- Focus on perpetuating the original mission, and unremittingly promote self-revolution.
The commentary also brought up the case of CCP founding member Zhang Guotao “serious mistake of undermining Party unity” by splitting the Red Army and establishing a separate “Party Central.” In concluding, the commentary said that the key to maintaining Party unity in the new era is adhering to the “two safeguards” (“resolutely safeguard General Secretary Xi Jinping’s core position in Party Central and the core position of the entire Party,” as well as resolutely safeguarding “the ‘quan wei’ and centralized and unified leadership of Party Central”) to ensure that the Party moves forward in unison.
March 22
Guangming Daily published a commentary piece titled, “Maintaining Party Unity is a Must in Walking the New Path to the Big Exam” (走好新的趕考之路必須始終保持黨的團結統一). The piece was later republished by Qiushi and other official media.
The Guangming Daily piece echoed the theme of the March 21 People’s Daily commentary, stressing the importance and “fundamental guarantee” of Party unity as the regime treads the “new path to the big exam.”
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March 18
Li Wanjun (age 60), a former deputy Party secretary of the Beijing Municipal Political and Legal Affairs Commission and a cadre with director-level treatment in the Beijing Major Railway Station Areas Administration Party Committee, was investigated.
Li spent the bulk of his career in various positions in the Beijing municipal political and legal affairs apparatus, including secretary general of the Beijing municipal PLAC, director of the Beijing Public Security Comprehensive Management Commission and its office, and deputy Party secretary of the Beijing municipal PLAC and Party secretary of Beijing municipal PLAC departments Party committee.
In February 2012, Li was transferred to the Beijing Municipal Civil Affairs Bureau to serve as its director and Party secretary. He was removed as Beijing Municipal Civil Affairs Bureau director this Feb. 25.
March 21
Shen Deyong (68), a standing committee member of the 13th National Committee of the Chinese People’s Political Consultative Conference and director of the CPPCC Social and Legal Affairs Committee, was investigated. Shen is the first ministerial-level official to be probed in 2022.
Shen worked in the political and legal affairs apparatus in Jiangxi Province in his formative years. In 1998, Shen joined the Supreme People’s Court, and would eventually serve as vice president, Party Group member, and member of the judicial committee. In November 2006, Shen was temporarily transferred to Shanghai to serve as secretary of the Shanghai Municipal Commission for Discipline Inspection and oversee the investigation of the Shanghai social security fund embezzlement case and the Chen Liangyu (Jiang Zemin’s former protégé and preferred successor) corruption case.
In April 2008, Shen would return to the Supreme People’s Court again to serve as its executive vice president, deputy secretary of the Party Group (ministerial-rank appointment), and first-rank justice, positions that he would hold for the following decade. Shen would step down from his Supreme People’s Court positions in March 2018 and take up “second-line” appointments in the CPPCC.
Mainland media Caixin published several articles after Shen was taken away about how three of Shen’s secretaries from his Supreme People’s Court tenure were taken away in succession to assist in investigations about a fortnight before his investigation was made official. One of the secretaries, Xin Zhihong, is a director of a Beijing law firm that handled cases involving over 100 billion at the Supreme People’s Court. Caixin noted that it had earlier reported in 2020 a New China Life Insurance equities dispute case where Xin accepted 100 million yuan in lawyer fees to get the original verdict overturned in a retrial at the Supreme People’s Court during a period when Shen Deyong was the court’s vice president. Caixin believes that that particular Xin Zhihong case caught the attention of central supervision teams during the political and legal affairs apparatus “education and rectification” campaign, and was one of the triggers for an investigation into Shen. Caixin also noted that Shen’s relatives had been investigated.
Analysis: Shen Deyong’s career marks him as a Jiang faction official. Tellingly, Shen was dispatched to Shanghai in November 2006 and put in charge of the two high-profile cases after the Central Commission for Discipline Inspection had already investigated Chen Liangyu and “double expelled” (shuangkai, 雙開) him earlier in September. It is likely that the Jiang faction was behind Shen’s deployment to Shanghai as it sought to carry out “damage control” in wake of Chen’s downfall.
Shen’s own fall could be the outcome of the political and legal affairs apparatus “rectification and education” campaign at the provincial level and higher that began in mid-August 2021 and is scheduled to conclude this March.
March 22
1. Lin Yijun (59), vice chairman of the Wenzhou CPPCC in Zhejiang Province, was investigated. Lin was previously the Party secretary of the Pingyang Country PLAC.
2. Chen Shengliang (64, retired in 2016), the former deputy mayor of Chaozhou City in Guangzhou Province and director of the Chaozhou Municipal Public Security Bureau, voluntarily surrendered himself for investigation.
March 23
Official mainland media reported that central inspection teams of the 19th Central Committee would inspect the following 26 work units and Party organs in its ninth round of inspections:
- Organs of the Central Commission for Discipline Inspection and the National Supervisory Commission;
- General Office of the CCP;
- Central Organization Department;
- Central Policy Research Office;
- Central Comprehensively Deepening Reforms Commission;
- Central National Security Commission;
- Central Integrated Military-Civilian Development Commission;
- Office of the Central Financial and Economic Affairs Commission;
- Office of the National Administration of State Secret Protection;
- General Office of the State Council;
- National Development and Reform Commission;
- Ministry of State Security;
- Ministry of Civil Affairs;
- Ministry of Human Resources and Social Security;
- Ministry of Transport;
- Ministry of Veteran Affairs;
- State Taxation Administration;
- Hong Kong and Macau Affairs Office;
- State Council Research Office;
- National Food and Strategic Reserves Administration;
- National Railway Administration;
- Civil Aviation Administration of China;
- State Post Bureau;
- National Council for Social Security Fund;
- China Academy of Engineering Physics;
- China Railway.
OUR TAKE
Party and state propaganda’s emphasis on “Party unity” at this time indicates that the CCP regime is feeling tremendous pressure as the “perfect storm” of internal and external problems (economy, coronavirus, Russia-Ukraine war, etc.) battering the PRC threatens to upend regime stability and security. The call to “Party unity” also suggests that internal divisions within the CCP are severe, with Xi Jinping facing heavy resistance to his agenda and bid for a norm-breaking third term at the 20th Party Congress from both his factional enemies in the Party elite and the CCP rank-and-file.
The Xi leadership is relying on the usual “struggle” tools to get a handle on the situation. Political mobilization to rally cadres in support of Xi is underway with propaganda organs promoting “Party unity” and the “normalization and long-termization” of Party history study and education. Forcing officials to undertake political and ideological study also gets them to demonstrate their loyalty to Xi while denying them spare time to discuss Xi’s failing governance and potentially foment revolt. Beijing, however, runs the risk of encouraging greater “passive resistance” and “laying flatism” in the officialdom with sustained indoctrination work, loyalty tests, and political mobilization, especially if Xi’s policies continue to backfire and the international community increasingly faults him for China’s woes and other crises like the Russia-Ukraine war.
The Xi leadership is also turning to the anti-corruption campaign and “self-revolution” to get the regime in order. The ninth round of central inspections of key work units and Party organs is likely intended to weed out troublemakers and put personnel on notice ahead of the 20th Party Congress in the fourth quarter of 2022. Meanwhile, the “rectification” of the political and legal affairs apparatus that commenced in July 2020 has led to the purge of two ministerial-level officials (Fu Zhenghua and Shen Deyong), six sub-ministerial level officials, 44 bureau-level officials, and 82 deputy bureau-level officials. The few “big tiger” scalps and relatively unimpressive results of the political and legal affairs apparatus “education and rectification” campaign thus far, however, suggests that Xi Jinping could be running into stiff resistance in purging senior officials.
SinoInsight 2
The Office of the PRC National Health Commission and the Office of the National Administration of Traditional Chinese Medicine jointly issued as notice on the ninth trial edition of the regime’s COVID-19 diagnosis and treatment protocol (新型冠狀病毒肺炎診療方案 [試行第九版]).
The notice said that the COVID diagnosis and treatment protocol was updated in view of the Omicron strain replacing Delta as the predominant circulating strain. Per the updated protocol, the cycle threshold value when testing those isolated in hospitals with mild cases was lowered to allow for earlier release, while home quarantine for those released from hospital isolation was reduced from 14 days to seven days.
March 17
The Politburo Standing Committee held a meeting to analyze the COVID pandemic situation and discuss the deployment of “strict measures” to prevent and control the virus.
In a speech at the meeting, General Secretary Xi Jinping boasted that since the “normalization” epidemic prevention and control in China, the PRC’s “economic development and epidemic prevention and control have maintained a leading position globally, fully reflecting China’s solid strength and powerful capabilities in epidemic prevention and control, and fully demonstrating the leadership of the CCP and the remarkable achievements of China’s socialist system.”
March 18
Wang Hesheng, the deputy director of the National Health Commission and director of the Chinese Center for Disease Control and Prevention, said at a State Council Information Office press conference that “the facts” have shown that the “dynamic zero-COVID” policy is “in line with China’s national conditions and scientific laws,” and is “the correct path” with “good effects.” While the policy had some impact on “production and life in some areas,” the impact was “short-term and limited in scope.” Wang added that all prevention and control measures “will have a certain price,” but the costs are worth it when it comes to protecting the people’s safety and physical health.
Wang also said that the COVID-19 pandemic will have a “certain impact” on the economy and society of all countries, with different negative impacts stemming from different prevention and control measures. He added that assessment of economic impact or prevention and control costs should distinguish between the impact of the epidemic, epidemic prevention and control measures, and economic development. Wang believes that COVID’s impact on the economy cannot be solely attributed to prevention and control measures.
March 22
The National Health Commission issued the third edition of regional guidelines for COVID-19 nucleic acid testing (區域新型冠狀病毒核酸檢測組織實施指南 [第三版]).
Points revised from the second edition include:
- “Mass nucleic acid testing” was changed to “area nucleic acid testing.” “Area” includes sealed off areas, control areas, and prevention areas. “Area” can also mean an area as small as a single building to as large as a city. “Dynamic adjustments” should be made depending on the location of infected persons after each round of “area nucleic acid testing.”
- All nucleic acid testing must be completed within 24 hours.
- Several additional work teams were established for nucleic acid testing work, including nine specialized teams responsible for compiling data, collection and testing matching, disposal of positive results, material security, quality control, medical waste disposal, information security, and comprehensive management.
- Testing technical requirements were streamlined.
Pandemic impact
March 19
1. The local government of Tangshan City, Hebei Province announced that the city had “fully entered a state of emergency” over a COVID outbreak, and requested the strict management of villagers and enterprises in accordance with policy.
Steel trading plants and logistics businesses in Tangshan were temporarily suspended for between one to two weeks, according to mainland media Sina News, citing industry insiders. Tangshan is an important steel manufacturing area, and Tangsteel Group is one of the top ten state-owned steel mills in China. The extent of local production suspension is unknown at the time of writing.
2. The South China Morning Post published a piece about how the PRC’s “zero-COVID” policy is pushing cash-strapped local governments “to the brink.”
The Post reported that while the central government dedicated funds to help local governments with the pandemic in 2020, “local authorities have had to rely on their own revenue” since 2021. For example, Suzhou City spent 120 million yuan on “protective equipment, nucleic acid testing, infrastructure and medical care” to control an outbreak tracing back to Feb. 13. The article also cited Great Wall Securities chief macro analyst Jiang Fei’s estimate of mass nucleic acid testing costing between 24 to 48 yuan per person in China, a steep burden for local governments with populations of over 1 million who typically would spend less than 200 yuan a year on health care per resident, according to 2020 official data.
The Post cited Moody’s Analytics as saying that “China’s mass testing approach requires the use of nucleic acid tests that require labs to process samples, but Omicron’s rapid spread means that the approach is hitting its limits. We expect more downsides to the Chinese economy to materialize in the first quarter, with the economic pain possibly stretching to the early parts of the second quarter should the lockdowns continue if the Omicron spread proves to be more than a flash in the pan.”
3. The Financial Times reported that foreign investors dumped a record $6 billion in Chinese stocks in the first three months of 2022 as they took fright over fresh coronavirus outbreaks in major cities like Shanghai and Shenzhen, potential delisting of Chinese shares trading in New York, and possible Western sanctions over the Russia-Ukraine war.
March 21
1. The Shenyang City local government issued a notice calling for the strengthening of epidemic prevention and control measures in the city’s residential quarters, villages, Party and government agencies, enterprises, and institutions. The notice added that the city’s residential quarters and villages would be locked down from March 22, with residents needing a 48-hour negative nucleic acid test certificate and a “resident entry-and-exit pass” to be allowed to enter or leave those areas. Those without a negative test and strictly forbidden from entry.
2. Beijing Hospital’s official WeChat account announced that its outpatient and emergency departments would temporarily suspend the admission and hospitalization of patients. The announcement did not specify when such services would be restored.
March 22
The South China Morning Post found that at least 74 Chinese officials had been fired or reprimanded over the past month for failing to do their job amid the current wave of COVID outbreaks.
March 23
BMW Group suspended production at all its plants in Shenyang due to the COVID outbreak from March 24 to March 30. The BMW-Brilliance China Automotive joint venture production base in Shenyang includes two vehicle plants, a research and development center, and a powertrain plant.
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Social friction
As outbreaks spread across China, videos showing humanitarian crises stemming from the “zero-COVID” policy and residents breaking lockdowns to take to the streets started circulating on Chinese social media.
March 15
1. The Shenzhen Municipal Public Security Bureau issued a notice listing 10 “illegal and criminal activities related to epidemic prevention and control” (關於依法嚴厲打擊涉疫情防控違法犯罪行為的通告) including:
- Not wearing masks when required to;
- Not cooperating with nucleic acid testing and epidemic prevention inspections;
- Breaking into epidemic prevention and control areas;
- Price gouging;
- Refusing to self-isolate;
- Violating the personal safety of medical and epidemic prevention staff;
- Fabricating or spreading epidemic misinformation and creating panic;
- Forging or selling documents such as nucleic acid test reports, health codes, and itinerary codes;
- Illegally crossing the border;
- Other behaviors involving the refusal to implement epidemic prevention policy and the disruption of social order.
A video circulating on social media showed a woman from Shanghai’s Zhenxing Community kneeling and crying in the rain as she begged the neighborhood Party committee to allow her husband to receive treatment for terminal cancer at the nearby Shanghai Cancer Hospital.
March 20
Videos of Shanghai Pudong New District Zhoupu Hospital staff going on strike over the conversion of the facility into a makeshift hospital and safety concerns were circulated on the internet.
Some staff were heard saying that the hospital head had “sold them out” in a press conference that was held shortly after they went on strike. Others said that they are okay with supporting a makeshift hospital, but are against converting Zhoupu Hospital into a makeshift hospital.
March 22
Residents in Shenzhen, Huizhou, Shanghai, and Sichuan were filmed protesting the latest round of lockdowns and violating them. Rumors circulating on the internet that some in Shenzhen had starved to death due to the lockdowns also roused public anger.
OUR TAKE
1. Despite Xi Jinping’s brag about the strength of the Chinese economy during the coronavirus pandemic at the March 17 Politburo Standing Committee and Wang Hesheng’s attempt to deflect blame away from Xi’s “zero-COVID” policy, recent official data and the latest wave of outbreaks indicate that the economy has suffered significantly under the Xi leadership’s epidemic prevention and control regime without a reasonable trade-off in curbing the virus.
Recent production suspensions and lockdowns are set to further strain the economy. The effectiveness of “zero-COVID” measures in stopping the highly transmissible Omicron strain is also questionable.
2. The adjustment in nucleic acid testing guidelines is almost certainly a response to the “prefer left rather than right,” “one-size-fits-all,” and in some cases fraudulent approaches to testing by local officials in implementing the “zero-COVID” policy.
Beijing is looking to cut down on testing costs to minimize the strain on the economy and resolve other humanitarian issues stemming from the previous mass testing approach. Also, Beijing is finding a workaround for limited testing capacity and seeking more accountability from officials to ensure that whatever testing is done serves its intended purpose and is not just for show, to the detriment of regime legitimacy and stability.
We are pessimistic about the Xi leadership’s effort to “right the ship” with the recent tweaks to the nucleic acid testing guidelines. The fundamental problem with the testing regiment lies with the Party culture-steeped officials and pharmaceutical businesses carrying them out. Those businesses and officials are also swayed by what Xi camp scholar Huang Wansheng describes as “massive interest groups,” who are more interested in finding ways to profit from the pandemic than implementing policy in a manner that benefits “Party Central with Comrade Xi Jinping at the core.” Put another way, Beijing is likely going to continue encountering the same or similar issues it has with nucleic acid testing despite the updated guidelines as officials and pharmaceutical businesses exploit new loopholes and innovate ways to accrue benefits. As things continue going south, local governments will blame external factors and claim that it was merely following the central government’s orders, indirectly shifting the responsibility to Beijing.
3. Recent adjustments to the PRC’s COVID-19 diagnosis and treatment protocol and Wang Hesheng’s effort to disassociate the “zero-COVID” policy from economic deterioration suggest that Beijing is aware that its pet epidemic prevention and control measures are failing in the face of Omicron and foreign investors voting with their feet.
The Xi leadership, however, will unlikely abandon “zero-COVID” or “dynamic zero-COVID” even as it subtly loosens the policy overtime because it has become Xi Jinping’s political legacy. Beijing could eventually declare “victory” over the virus ahead of the 20th Party Congress while crediting Xi and “zero-COVID” for delivering success even though the policy may end up a far cry from what it once was in the first two years of the pandemic.
