Members of the Politburo and its Standing Committee begin laying out Xi Jinping’s third term plans

     SinoInsight  1       

Party mouthpiece People’s Daily began publishing a series of commentary articles by old and new members of the Politburo and its Standing Committee in the second week after the 20th Party Congress. The articles revolve around the theme of urging Party members to “conscientiously study, propagate, and implement the spirit of the 20th Party Congress.

Oct. 31
People’s Daily published on page two of its print edition an over 6,000 character-long piece titled “Unswervingly and Strictly Governing the Party” (堅定不移全面從嚴治黨) by Zhao Leji, the third-rank member of the 20th Politburo Standing Committee.

Noteworthy points in the article include:

• “Strictly governing the Party in a comprehensive way” is the “only path [for the Party to take] on the new road to taking the test” because the Party will inevitably encounter “many predictable and unpredictable risks and tests” on its “new journey.”
• The Party should be willing to “offend thousands” in “removing illnesses and managing chaos” (祛疴治亂) so as not to let down 1.4 billion Chinese people.
• The Party will “resolutely investigate and deal with corruption cases where political and economic issues are intertwined” and “resolutely eliminate corrupt elements who do not restrain themselves, thus eliminating serious hidden dangers within the Party, the country, and the military.”
• The Party will “resolutely guard against and correct whatever the people oppose and hate.”
• The Party will “resolutely guard against leading cadres becoming spokespersons and agents of interest groups and powerful groups.”
• The Party will “deepen the rectification of corruption in areas where power is concentrated, capital-intensive, and resource rich.”

Analysis: Zhao Leji is indicating that there is still lingering resistance to Xi Jinping in the regime who could pose political risks to his rule. Hence, Xi needs to double down on “strictly governing the Party” in his third term, including “rectifying” the financial sector, state and central-owned enterprises, and particularly corrupt industries or localities where “political and economic issues are intertwined” and “power is concentrated, capital-intensive, and resource rich.” In doing so, Xi will inevitably tread on the interests of Party elites who have long operated in the financial sector like the Jiang Zemin faction.

Zhao’s essay is almost certainly the work of experienced CCP propagandists as part of a broader effort to advance Xi’s political agenda. While Zhao could have some input, it was unlikely that he wrote the piece entirely in his own hand, if at all. Zhao was also likely picked to publish this piece under his name because he was previously the head of the anti-corruption authorities and was responsible for a key component of “strictly governing the Party.”

It is thus somewhat ironic that Zhao Leji, a Jiang faction associate, was tasked to obliquely condemn his faction and its figurehead leader in the article. In particular, the sentence “resolutely guard against and correct whatever the people oppose and hate” is a coded reference to Jiang Zemin. Also, Zhao’s point about how the Party should “resolutely guard against leading cadres becoming spokespersons and agents of interest groups and powerful groups” could be aimed at himself and Wang Huning, as well as Jiang faction members (Guo Shengkun, Zhou Qiang, etc.) who have retired or are stepping down from the senior leadership at the 2023 Two Sessions. Zhao would not have been able to refuse to publish an article that puts himself, the Jiang faction, and others in the “anti-Xi coalition” on notice lest he outs himself as an opponent of Xi and the leadership that he is currently still in; such is the contradiction of factional struggle in the CCP elite.

Nov. 1
People’s Daily published on page three of its print edition a nearly 6,000 character-long article by Han Zheng, the outgoing seventh-rank member of the 19th Politburo Standing Committee and first-rank vice premier.

Titled “Promoting the Great Rejuvenation of the Chinese Nation in a Comprehensive Way with Chinese-style Modernization” (以中國式現代化全面推進中華民族偉大復興), the article contained the following noteworthy points:

• Xi Jinping’s 20th Party Congress report elaborated on the “scientific connotation, Chinese characteristics, and essential requirements” of “Chinese-style modernization,” or CCP-led socialist modernization.
• Han wrote that “Chinese-style modernization” is an important part of “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era.” The theory provides not just “fundamental guidelines” for building a “modern socialist country” in a comprehensive way, but also “expands” the pathways of developing countries towards “modernization.” Further, “Chinese-style modernization” provides a “Chinese solution” to mankind’s quest for a better social system.
• Han listed five characteristics of “Chinese-style modernization”: Adhering to China’s national conditions; adhering to the common prosperity of all people; adhering to the coordination of material and spiritual civilization; adhering to the harmonious coexistence of man and nature; and adhering to the path of peaceful development.
• Han wrote that the essential requirements of “Chinese-style modernization” are upholding the leadership of the CCP and upholding socialism with Chinese characteristics.

Analysis: Han Zheng, like Zhao Leji, belongs to the Jiang faction. Like Zhao, Han has no choice but to publish an article that advances the Xi camp’s agenda to meet propaganda requirements, display his “loyalty” to Xi Jinping, and maintain the CCP elite’s fiction of being in “consensus” with each other in public. This is not to say that Han would have refused to put his name on the byline of the piece; as a retiring Jiang faction member who will lose formal power and the protection it affords, Han has incentive to stay in Xi’s good books and propagate the Xi agenda even if he disagrees with it so as to avoid being purged under the “self-revolution” campaign.

Nov. 2
People’s Daily published on page three of its print edition an over 6,000-character commentary titled “Unite and Struggle in Comprehensively Promoting the Great Rejuvenation of the Chinese Nation” (為全面推進中華民族偉大復興而團結奮鬥) by Ding Xuexiang, the seventh-rank member of the 20th Politburo Standing Committee.

Notable points in the article include:

• Ding wrote that the 20th Party Congress “deeply analyzed the situation and challenges facing regime development” and “comprehensively deployed the goals, tasks, and major policies for the development of the regime over the next five years and even longer.” He then urged the “entire Party, the military, and the people of all ethnic groups in the country to unite and struggle for the comprehensive promotion of the great rejuvenation of the Chinese nation.”
• Ding wrote that the Party members need to “continue uniting and struggling” due to the “complexity of the situation.” From the international perspective, the world has undergone “tremendous changes unseen in a century,” with “hostile forces deliberately trying to block the historical progress of the great rejuvenation of the Chinese nation.” From the domestic perspective, the “situation and environment are changing rapidly” with “many contradictions, risks, and challenges,” resulting in an “unprecedented test of governance and administration.” Thus, “the whole Party and the people of all ethnic groups in the country” need to “unite and struggle” in building “an impregnable wall to prevent and resolve various risks and challenges” and “win all kinds of encounters, battles, and protracted battles.”
• Ding stressed that unity and struggle are fundamentally about unifying and actions using “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era.”
• Ding wrote that Party unity is the “first and foremost political unity.” Party members need to deeply comprehend the “decisive significance” of the “Two Establishes,” and more firmly and consciously achieve the “Two Safeguards.” To achieve the “Two Safeguards,” Party members must have both “correct understanding and correct actions,” and cannot just shout slogans or engage in any form of “low-level red” (低級紅) or “advanced blackening” (高級黑).
• Ding stressed the need for Party members to draw inspiration from the “majestic force of unity and struggle” in “daring to struggle and being good at struggling.”  Also, the unity being pursued by the CCP is a “principled unity,” not merely “harmony” or “cliques and factions.”
• Ding wrote that with regard to resolving the people’s “internal contractions and ideological problems,” Party members must insist on starting from the “desire of unity,” apply the formula of “unity-criticism-unity,” and use the methods of “discussion, criticism, and reasoning” to achieve “new unity on a new basis.”

Analysis: A staunch Xi ally, Ding Xuexiang essentially reinforced Xi Jinping’s messaging from his trip to Yan’an with the new Politburo Standing Committee on Oct. 27 in the essay that bears his name. In particular, Ding is urging Party members to walk in lockstep with Xi and allow the Party to achieve “unprecedented unity” like during Mao Zedong’s reign over the Yan’an Soviet so that the Party will be able to weather the serious domestic and foreign crises it faces.

Ding also warned Xi’s opponents against attempting insidious and subtle means to undermine Beijing (“cannot engage in ‘low-level red’ or ‘advanced blackening’”). Moreover, Party members are only allowed to unify around Xi, not “unite and struggle” against the Xi leadership through “cliques and factions.”

Nov. 4
People’s Daily published on page six of its print edition a more than 6,500 character-long piece by vice premier Liu He. Titled “Integrate Implementing the Strategy of Expanding Domestic Demand and the Deepening of Supply-side Reform” (把實施擴大內需戰略同深化供給側結構性改革有機結合起來), the article went over Xi’s economic reform policy as laid out in his 20th Party Congress report.

Key points Liu brought up in the piece include:

• “Implementing the strategy of expanding domestic demand” is aimed at helping the PRC cope with external shocks and stabilize economic operations.
• The integration of “implementing the strategy of expanding domestic demand” and “deepening supply-side structural reform” is meant to allow the PRC to “actively respond to changes in the domestic and foreign environment” and enhance its development initiative.
• “Deepening supply-side structural reform” is the mainline because be it in the present or in the future, the “main contradiction” restricting China’s economic development lies in the supply side. Also, the PRC must take action to speed up the making up of its shortcomings in areas of “high external dependence” where external alternative sources are difficult to come by in the short term and supply chain breakdowns could occur.
• The PRC should persevere in giving “full play to the advantages of the mega market (超大規模市場).” China has a population of more than 1.4 billion people and a middle income group of over 400 million people, which means that the country is the “mega market with the most potential in the world.” To “implement the strategy of expanding domestic demand, the PRC should make full use of the “precious strategic resource” that is the “mega market.”
• The PRC must adhere to the “general tone” of “seeking progress while maintaining stability.” The PRC must “stabilize the overall macroeconomic situation, stabilize the integrity of the industrial chain and supply chain, and stabilize the supply of primary products such as energy” so as to strengthen its confidence to “cope with complex situations and various challenges.”
• The PRC must adhere to “systems concept” (系统观念, or overall playing and deployment) and “bottomline thinking.”
• Liu called for “building [of] a unified national market, removing various obstacles that hinder domestic circulation, and paying special attention to achieving medium-level circulation in extreme cases.”
• The PRC would adhere to “high-level opening to the outside world” and have “deep participation in the global industrial division of labor and cooperation.”
• Efforts should be made to “maintain macroeconomic stability and avoid major ups and downs.”
• The PRC will “accelerate the construction of world-class enterprises.” Meanwhile, it is necessary to set up “traffic lights” to regulate and guide the “healthy development of capital in accordance with the law.”
• The PRC will focus on improving total factor productivity, education quality, and the “strategy layout of talent.” The PRC will also strengthen the dominant position of enterprises in scientific and technological innovation, as well as optimize “population development strategies.”
• Efforts would be made to improve the resilience and security level of the industrial chain and supply chains.
• Efforts would be made to promote urban-rural integration and coordinate regional development.
• Efforts would be made to “prevent and defuse systemic risks.”

Analysis: Liu He’s article indicates that the Xi leadership is neither entirely abandoning “reform and opening up” as it pursues survival and domination, nor is it attempting to revert China to a planned economy. Beijing still hopes to attract investment to China and more deeply integrate the Chinese economy with the world economy, partly as a strategy to make sure that global interests are intertwined and deter the West from going too hard on the PRC.

However, the Xi leadership is also planning to roll out policies that can be interpreted as “semi-isolationist” as it makes contingencies for escalating risks and crises at home and abroad. For instance, Liu’s point about the PRC needing to make up for its shortcomings in “high external dependence” is clearly a nod at the Biden administration’s effort to cut off China’s access to advanced chips and chip making tools, as well as other future export curbs imposed on the PRC by the U.S. and its allies. The CCP is also anticipating “external shocks” that could destabilize economic operations as “great power competition” heats up.

Hence, Beijing is looking to step up “supply-side structural reform,” improve industrial and supply chain resilience, build a “unified national market,” focus on training and education to “strengthen the dominant position of enterprises in scientific and technological innovation,” and make efforts to “prevent and defuse systemic risks.” In preparing for worst-case scenarios that could arise from “ complex situations and various challenges,” the Xi leadership is preparing to develop the CCP’s rural supply cooperatives and state canteens to “guarantee the people’s basic livelihood” and ensure so-called “medium-level circulation in extreme cases.”

OUR TAKE
The recent People’s Daily articles by Politburo Standing Committee members reflect the CCP regime’s sense of crisis, lack of belief, persistent factional struggle, dissatisfaction with Xi Jinping in the Party, and Xi’s efforts to overcome the aforementioned problems.

1. The so-called “Chinese-style modernization” promoted by Han Zheng is a CCP theoretical fabrication with roots in Xi’s “historical resolution” that is meant to spin the tragedy of the latter’s decade in office (rapid economic deterioration, “zero-COVID,” tightening CCP control over society, etc.) into “victory” as the regime looks to survive and dominate amid worsening crises at home and abroad.

Previously, the Xi leadership sought to explain away China’s slower economic growth as the pursuit of “high-quality development.” Meanwhile, to claim having achieved a “moderately prosperous society” on the centenary of the CCP’s founding, Xi announced that the Party had “eliminated extreme poverty” under his leadership. Now as the PRC faces severe economic problems, including debt and financial crises, Xi Jinping is claiming that the CCP is adhering to “Chinese-style modernization” to avoid comparisons with Western modernization standards. By promoting “Chinese-style modernization,” Xi is also looking to steel the Party and the Chinese people as “great power competition” heats up between the PRC and the U.S. and its allies.

The CCP has a long history of fabricating political theories and rolling out associated campaigns at junctures of crisis. Under Mao, the CCP advanced the Great Leap Forward and the Cultural Revolution to preserve its political legitimacy. Those campaigns were billed as “experiments and explorations on the road to socialism” as the Party “sought happiness for the Chinese people.” Similarly, Xi’s “Chinese-style modernization” is being packaged as CCP-led socialist modernization that seeks to bring “common prosperity” to the people.

Under Deng Xiaoping, the Party traded “class struggle” for “reform and opening up” as it sought to restore lost political legitimacy and rescue the economy. But Deng also stuck to the so-called “Four Cardinal Principles,” which call for upholding “the socialist path, the people’s democratic dictatorship, the leadership of the CCP, and Mao Zedong Thought and Marxism–Leninism.” Likewise, Xi may eventually attempt to sell his “Chinese-style modernization” as a more comprehensive form of “reform and opening up,” but the CCP will still cling to its Marxist-Leninist roots and act accordingly regardless of how many new political theories and slogans are unveiled.

2. The Xi leadership emphasis on “strictly governing the Party in a comprehensive way” in promoting the “spirit of the 20th Party Congress affirms our analysis that Xi Jinping is planning a major purge of political enemies and rival factions in the short term. Xi likely believes that the CCP must achieve “unprecedented unity” under his rule and “unite and struggle” if the regime is to survive its current crises. Efforts to undermine his rule cannot be tolerated given the “tremendous changes unseen in a century” and the “complexity of the situation.”

As noted in our Oct. 31, 2022 newsletter, we believe that Xi is preparing to transform his “self-revolution” campaign into a “Yan’an Rectification Movement-style effort to purge the Party ranks of lingering factional rivals, those with disloyal inclinations, and others opposed to his rule, and bring “unprecedented unity” to the CCP.” Xi’s big rectification push could commence quickly and will likely target the following groups and apparatuses:

• The Jiang faction and others in the “anti-Xi coalition” in China. Retired, retiring, or sinecured Jiang faction leading cadres with ties to the “Sun Lijun political gang” are at risk, including Zeng Qinghong, Meng Wanzhou, Zhou Qiang, and Guo Shengkun. Xi, however, could spare those in rival factions who show no signs of wanting to challenge him or who convincingly switch their loyalties like Tianjin Party secretary Li Hongzhong. Chinese businessmen who toe the line or eat humble pie like Alibaba’s Jack Ma will likely not fall victim to “Yan’an-style” rectification.
• Areas where “power is concentrated, capital-intensive, and resource rich” will be rectified, including the financial sector, the state sector, problematic industries (recalcitrant tech giants, those who engage in the “disorderly expansion of capital,” etc.), and Jiang faction strongholds in the provinces (like Hebei) or government organs (political and legal affairs apparatus, intelligence, etc.).
• Other interest groups that challenge the Xi leadership or are suspected of engaging in massive corruption or profiteering, including pharmaceutical companies and individuals that profited immensely from the “zero-COVID” policy.

Meanwhile, the Xi leadership will likely work on long-term goals like stepping up “semi-isolationist” policies (including “dual circulation,” expanding rural supply cooperatives, etc.) and moving the PRC towards greater self-sufficiency in manufacturing and the development of core technologies as it prepares for potential conflict with the West, growing social instability in China, and other extreme situations. Beijing’s longer term efforts to preserve the regime make purging the Party of lingering “poisonous” and disloyal elements (individual officials, interest groups, other cliques and factions, etc.) in the short term even more essential.