1 Biden admin. builds ‘goodwill’ with the PRC as Xi’s political problems grow
Sino-US diplomacy
Sept. 13
The Washington Post reported that two delegations of U.S. lawmakers are planning to travel to China in the fall, including a delegation led by Senate Majority Leader Charles Schumer (D-N.Y.) and Senator Mike Crapo (R-Idaho) and a delegation of House lawmakers organized by Rep. Ro Khanna (D-Calif.), who is on the House Select Committee on the Chinese Communist Party.
Sept. 16 – Sept. 17
White House National Security Advisor Jake Sullivan and PRC foreign minister Wang Yi met in Malta for an unannounced meeting. The pair last met in Vienna from May 10 to May 11, or during a period when the Biden administration was trying to improve engagement with China to ease tensions after the PRC spy balloon incident.
According to a White House readout, both sides had “candid, substantive, and constructive discussions, building on the engagements between President Biden and President Xi in Bali, Indonesia in November 2022.” They discussed the Sino-U.S. bilateral relationship, global and regional security issues, the Russia-Ukraine war, cross-straits issues, and other topics.
PRC state media reported that both sides had “candid, substantive and constructive strategic communication on stabilizing and improving China-U.S. relations.” Wang also stressed that the “Taiwan question is the first red line that must not be crossed in the China-U.S. relationship and the U.S. must abide by the three China-U.S. joint communiques and honor its commitment to not support ‘Taiwan independence.”
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A senior Biden administration official told the press that “there have been some small or limited indications” that Beijing could re-open some cross-military communications. The official also noted that the Malta talks lasted about 12 hours over the two days.
The Financial Times reported a U.S. official as saying that Wang Yi did not explain what happened to his predecessor Qin Gang and PRC defense minister Li Shangfu during the meeting, and Sullivan did not raise the issue. The Times also said that Wang is expected to travel to the U.S. in October.
Sept. 18
U.S. Secretary of State Antony Blinken and PRC vice president Han Zheng met on the sidelines of the United Nations General Assembly in New York.
According to a U.S. readout of the meeting, both sides had a “candid and constructive discussion, building on recent high-level engagements between the two countries to maintain open lines of communication and responsibly manage the U.S.-China relationship.” Both sides also discussed a range of “key bilateral, global, and regional issues,” including the Russia-Ukraine war and North Korea. Blinken also “underscored the importance of maintaining peace and stability across the Taiwan Strait.”
State mouthpiece Xinhua reported that Han told Blinken that he hoped that both sides will “meet each other halfway and implement the important consensus reached by the two heads of state in Bali.” Han also expressed the hope that both sides will “take practical actions, create favorable conditions and do more to enhance understanding, mutual trust and mutually beneficial cooperation, so as to push China-U.S. relations back to a healthy and stable track.”
Sept. 20
NBC reported that the Biden administration told U.S. Ambassador to Japan Rahm Emanuel to stop taunting Xi Jinping on social media, citing three administration officials. The unnamed officials said that National Security Council officials told Emanuel’s staff in recent days that his remarks “risk undermining the administration’s efforts to mend deeply strained relations with China, including with a possible meeting this fall between Biden and Xi.”
NBC said that a spokesperson for Emanuel disputed their report. U.S. National Security Council Coordinator for the Indo-Pacific Kurt Campbell also told NBC that “Ambassador Emanuel is serving with distinction as an uncommonly effective representative of the United States in Japan,” and “this guy is a superstar.”
PRC spy balloon updates
Sept. 15
CNN reported that the PRC appears to have suspended its surveillance balloon program after one of its balloons was spotted transiting continental United States in February 2023, citing multiple sources familiar with U.S. intelligence assessments.
The sources said that U.S. officials believe that PRC leaders made a deliberate decision not to launch additional balloons, and the U.S. has not spotted any new launches since the incident. One of the sources said that the U.S. intelligence community believes that CCP leaders did not intend for the balloon to cross over the U.S. and even admonished the operators of the surveillance program over the incident.
Sept. 17
1. The New York Times reported American officials briefed on the intelligence as saying that Xi Jinping “berated senior generals for failing to tell him that the balloon had gone astray” after Xi learned of its trajectory and realized that it was affecting planned talks with U.S. Secretary of State Antony Blinken. Commanders on the Central Military Commission were also unaware of the balloon until “it was tipping into crisis” and they “vented their frustration at the generals overseeing the surveillance program.”
The Times’ piece, which was about U.S. and PRC spy operations, noted that “U.S. agencies are now probing exactly why China’s defense minister, General Li Shangfu, appears to have been placed under investigation for corruption, and why Mr. Xi ousted Qin Gang, his foreign minister.”
With regard to Taiwan, the U.S. has “stepped up its aerial surveillance of Chinese military bases.” PRC agents are “now trying to learn more about the Biden administration’s efforts to outfit Taiwan with certain weapons systems and provide secret training for Taiwanese troops,” as well as “seek more details on the growing military cooperation between the United States and Asian allies.”
2. In an interview with CBS, chairman of the Joint Chiefs of Staff General Mark Milley said, “The intelligence community, their assessment – and it’s a high-confidence assessment – [is] that there was no intelligence collection by that balloon.”
Milley also said, “I would say it was a spy balloon that we know with high degree of certainty got no intelligence, and didn’t transmit any intelligence back to China.”
Washington continues warning about China
Sept. 11
Air Force Secretary Frank Kendall said during a keynote address at the Air & Space Forces Association’s 2023 Air, Space & Cyber Conference that “China has been re-optimizing its forces for great power competition and to prevail against the U.S. in the Western Pacific for over 20 years. China has been building a military capability specifically designed to achieve their national goals and to do so if opposed by the United States.”
Sept. 18
FBI Director Christopher Wray told a conference, “China already has a bigger hacking program than every other major nation combined. If each one of the FBI’s cyber agents and intelligence analysts focused on China exclusively, Chinese hackers would still outnumber our cyber personnel by at least 50 to 1.”
Backdrop
The above developments come amid signs of mounting political problems for Xi Jinping (see here, here, here, and here).
Our take
1. Western media reports that the PRC spy balloon did not gather intelligence when it was transiting over the United States are in line with an earlier assessment by the Biden administration. On June 29, 2023, Pentagon spokesman Brigadier General Pat Ryder told reporters, “We assess that [the PRC spy balloon] did not collect while it was flying over the U.S.”
The reports about the spy balloon not collecting intelligence and the PRC suspending its surveillance program also indirectly affirm our early assessment of the situation and rejection of the analysis that the CCP was preparing for aggression against the United States. We wrote in the Feb. 9, 2023 edition of this newsletter that the PRC “is not yet ready for war and is not in a position to wage war at this juncture,” and hence is “not so irrational as to deliberately and brazenly challenge the global hegemon through an ‘aggressive’ intelligence/quasi-military operation and court greater crisis for itself when regime survival is already on the line.”
The various news reports also confirm our assessment that the balloon was likely part of the CCP’s routine intelligence gathering operations launched against the U.S. even though it might not have collected intelligence when flying across continental America.
2. The Western media reports about the PRC spy balloon and Xi Jinping’s reaction to the incident were published in the days leading up to the unannounced meeting between Jake Sullivan and Wang Yi. It cannot be ruled out that the Biden administration was trying to build up goodwill with the Xi leadership to secure the Sullivan-Wang meeting, seek an improvement in cross-military communications (especially in light of news that Li Shangfu is being probed), and better persuade Xi to confirm his attendance at the APEC meeting in November by leaking information that basically absolved Xi over the spy balloon case. News that the White House told off Ambassador Rahm Emanuel for mocking Xi on social media also appears to serve a similar purpose as the spy balloon disclosures.
The Biden administration could be “buttering up” Xi to get his leadership to disclose more about the political situation in China. And despite the administration’s claim that Sullivan did not raise the issues of Qin Gang and Li Shangfu with Wang Yi, such information could have been divulged through alternative lines of questioning during the 12-hour-long Sullivan-Wang meeting or via other formal and informal bilateral diplomatic channels.
Meanwhile, the Xi leadership likely went along with the Biden administration’s efforts at greater engagement in the hopes of lowering bilateral tensions and stabilizing the PRC’s geopolitical situation. Wang Yi’s warning to Jake Sullivan about Taiwan being the CCP’s “red line,” as well as The New York Times’ report about PRC agents looking to learn more about the Biden administration’s Taiwan plans, suggest that the Xi leadership is very concerned about possible U.S. plans to “Ukrainify” Taiwan and provoke Xi Jinping into ordering an invasion before the CCP regime is ready to undertake the operation with any likelihood of success. The Xi leadership’s Taiwan worries and worsening internal crises could have convinced Xi Jinping to offer up some “concessions,” likely in the form of re-opening some military communications (which would be facilitated if Li Shangfu is indeed sidelined as defense minister), to the U.S. in exchange for reduced pressure and improved bilateral relations.
2 Probes into proteges, proliferating political rumors leave Xi with tough dilemma
More political rumors about senior CCP officials
Political rumors, speculation, and “insider information” about the ongoings in CCP elite politics have emerged thick and fast since the removal of Qin Gang from his post as foreign minister, the mass reshuffle of the People’s Liberation Army Rocket Force leadership, and the “absence” of defense minister Li Shangfu.
Below is a selection of notable political rumors and information being circulated since the week of Sept. 11 to the publication of this newsletter:
Sept. 14
Wu Zuolai, a Chinese political commentator and independent scholar living in the United States, posted on X that he had received a “letter from Zhongnanhai” with the following information:
- Xi Jinping had allegedly tasked Qin Gang, who is residing in an undisclosed villa in Beijing’s Xishan area, with analyzing Wang Yi’s “diplomatic line.” Xi’s goal was to have someone from the foreign ministry system deal with the “deep power” in the foreign ministry. Qin later wrote a report detailing Wang’s “major diplomatic blunders” that shocked Xi.
- Wang exposed many of his problems during Xi’s trip to South Africa for the BRICS meeting. What was particularly intolerable to Xi was his aide being prevented from accompanying him after security guards physically grabbed the aide and shut the door on him, a scene that was caught on video and became “the world’s laughing stock.” Xi later ordered Wang to carry out a thorough self-examination and seriously account for his other problems. However, due to diplomatic protocol, Wang is still being tasked with “minor” diplomatic engagements and is not being severely dealt with for the time being.
- Li Shangfu’s “deep-seated problems” are being exposed. Most of Li’s past merits have been proven to be false and the military has “no combat effectiveness at all.” Xi has very high and idealistic requirements for the military, and the military departments, like the economic departments, selectively chose to report only the matters that would make Xi happy. When Xi found out that the military was greatly lacking in military preparedness, he had “feelings of casting himself into the ocean.”
- Xi allegedly followed Wang Huning’s advice to “unite Taiwan economically.” However, Xi also reportedly questioned Wang as to how there could be “peaceful reunification” of Taiwan when the “reactionaries” in Taiwan and the Americans would not agree to it.
Sept. 17
Dajiyuan (Chinese-language edition of The Epoch Times) reported the information it had obtained about PRC defense minister Li Shangfu and Central Military Commission vice chairman Zhang Youxia from two sources.
The first source claimed that Li Shangfu provided testimony against 17 generals, and those generals have all been subjected to internal discipline (“shuanggui”). Li’s “big problem” allegedly had to do with supplying the PLA Rocket Force with fuel of suspect quality, providing substandard equipment to the submarine force, and distributing tanks, armored vehicles, and other vehicles and other equipment of suspect quality to various military branches. Li’s problems were also “too many to count,” resulting in the military having a “serious lack of strength” and leaving it liable to be “completely defeated” during a war.
The second source claimed that Zhang Youxia had been placed under house arrest and his family members in the United States, Canada, Australia, and Europe are being “fully monitored” by CCP intelligence agents abroad. The source further alleged that Zhang’s family members will be “all taken down” when “the time is ripe.”
Sept. 18
Yuan Hongbing, an Australia-based Chinese dissident and jurist, told Dajiyuan that Party insiders disclosed to him that Qin Gang and Li Shangfu would be removed from their respective posts.
In another Dajiyuan report, Yuan cited a mainland source as saying that Wang Yi allegedly wrote in his self-examination that he had “cried bitterly” in reflecting on his mistakes and criticized himself for being “worthless.” Wang was later deemed to have “passed the test” for his “extremely profound self-examination.”
Yuan claimed that Xi Jinping had entrusted an evaluation team led by propaganda head Li Shulei to assess the impact of the Qin Gang and Li Shangfu cases. The Xi leadership was still deciding whether to fully disclose the “corruption crimes” of Qin and Li, including their “lifestyle issues and political disloyalty,” or make milder charges like officially charging them with “work mistakes” before removing them from office under the personnel reshuffle principle of “staying or leaving” (能上能下). Yuan added that the evaluation team has handed “two or three plans” to Xi, with Xi having the final say on the matter.
2. Cai Shenkun, an independent political commentator based in the United States, claimed in a post on X that Zhang Shengmin, a member of the CMC and secretary of the CMC Commission for Discipline Inspection, is “in trouble,” citing information coming out from the mainland. Cai added that if Zhang got into “trouble” on Sept. 16, then only Liu Zhenli and Miao Hua are the only two CMC members appointed by Xi in 2023 who are left in the CMC.
In another post on X, Cai claimed that Xi Jinping announced in a meeting of the CMC at 3:00 p.m. Beijing time on Sept. 4 that Li Shangfu was being detained, or after the Central Commission for Discipline Inspection had substantiated Li’s propensity for indiscipline and corruption.
Cai believes that the probe and punishment of Li Shangfu suggest that Xi is purging the “second generation red” (i.e. children of founding revolutionaries, or “princelings”) and “second generation military red” (i.e. those whose fathers were high-ranking military commanders) of the PLA. He further speculated that the “superficially harmonious and tacit understanding” between Xi and the CCP elites that was maintained over the past decade had been broken, with the founding revolutionary generation (打江山的一代) and their offspring being eased out of the Party, the government, and the military and Xi coming to dominate “all under the Party’s heaven” (黨天下).
Sept. 19
The Wall Street Journal reported that senior PRC officials, including those at the provincial and ministerial level, were briefed in August 2023 about the CCP’s investigation into Qin Gang, citing people familiar with the matter. The people added that senior officials were told that Qin was officially being dismissed for “lifestyle issues,” or a Party euphemism for sexual misconduct.
Two of the people said that officials were also told that Qin had an extramarital affair that led to the birth of a child in the United States; the names of the woman and child were not disclosed. The people added that the investigation into Qin is proceeding with his cooperation, and is currently “focusing on whether the affair or other conduct by Qin might have compromised China’s national security.”
The Journal further cited “insiders” as saying that the scrutiny of the Party’s senior ranks is “zeroing in on officials involved in dealing with foreigners and the top brass in the Chinese military in charge of ensuring the armed forces’ capacity to fight.”
Rumor debunking
1. According to PRC foreign ministry information, Wang Yi accompanied Xi Jinping to the BRICS summit in South Africa from Aug. 22 to Aug. 24, and subsequently engaged in various diplomatic activities from Aug. 29 to Sept. 21.
Analysis: Wang had a three-day gap in diplomatic activities from Aug. 26 to Aug. 28, and an eight-day gap from Sept. 8 to Sept. 16. Unless Wang had other pressing domestic matters to attend to when he was not engaged in diplomatic activities, he would have reasonably had the time to produce “self-examination” as claimed by political commentator Wu Zuolai.
But even if Wang did pen a “self-examination,” his continued diplomatic activities, including a four-day trip to Russia from Sept. 18 to Sept. 21, suggests that his political status was not significantly affected.
2. On Sept. 15, the PLA held its first summary meeting and second deployment meeting on studying and implementing Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era in Beijing. He Weidong, a CMC vice chairman and head of the Xi Thought “thematic education” leading group in the military, delivered a speech at the meeting, while Miao Hua, the deputy head of the PLA’s Xi Thought “thematic education” leading group, presided over the meeting.
Zhang Shengmin, a CMC member and a deputy head of the military’s “thematic education” leading group, was also in attendance, along with other relevant heads of “thematic education” leading groups in various military departments and units.
Analysis: Some observers have latched on to CMC vice chair Zhang Youxia’s “absence” from this “thematic education” meeting in Beijing as evidence that the latter is being detained or is in trouble. However, there is nothing irregular about Zhang skipping the meeting as it is He Weidong, and not him, who is in charge of political and ideological work in the military.
That being said, it is unclear from the publicly available official information at the time of this newsletter’s publication whether Zhang Youxia has been investigated. The authenticity of the political rumors, speculation, and “insider information” about Zhang and other senior military officials will likely become clear when the top officials attend the PRC’s National Day reception at the Great Hall of the People on Sept. 30.
Our take
1. Political rumors concerning the CCP elite historically tend to be hit-and-miss, and this trend has held true for the bulk of Xi Jinping’s tenure. For instance, rumors about investigations into “big tigers” like Zhou Yongkang proved to be true months after they surfaced. Meanwhile, rumors in the lead up to the 20th Party Congress about the “ascendency” of Li Keqiang (the so-called “Li [Keqiang] up, Xi [Jinping] down,” or “李上, 習下”), even when granted a veneer of credibility when backed by reporting in prestigious Western media outlets like The Wall Street Journal, ultimately proved hollow.
The recent political rumors and “insider information” concerning investigations into Xi’s allies or loyalists like Qin Gang, Li Shangfu, and the previous PLARF leadership, however, are incredibly accurate directionally even though many of the details are very suspect and sometimes contradictory. For example, official PRC developments (public appearances or lack thereof, personnel reshuffles, etc.) strongly suggest that Qin, Li, and the previous PLARF leadership are indeed subject to some sort of investigation and have been sidelined. Moreover, the rumors and information are much more “timely” and “verifiable” as compared to earlier rumors; notably, Zhou Yongkang was only officially purged months after the first rumors that he was being probed began circulating.
Two overlapping scenarios could have accounted for the “accuracy” and “timeliness” of the recent political rumors and “insider information.”
In the first scenario, Xi’s remnant factional rivals and the regime apparatuses they still influence, in particular the Zeng Qinghong-linked intelligence apparatus, could be coordinating the release of damaging information about the Xi leadership (i.e. Xi is investigating members of his own camp for corruption, and senior officials who had just been promoted only months ago to boot). As Xi’s factional rivals or other “anti-Xi” elements are directly in the know regarding the developments, the central thrust of the political rumors (i.e. Xi’s allies or loyalists are in trouble) are therefore unusually reliable. Meanwhile, it cannot be ruled out that the details that go along with the rumors, some of which are wild, inconsistent with CCP operations, or seemingly contradictory, were deliberately added so as to make it harder for the Xi leadership to figure out the culprits behind their spread.
In the second scenario, CCP officials who had been briefed on investigations into Qin Gang and the others decided to leak the information outside the regime as a way to get back at the Xi leadership. Xi Jinping has antagonized and made many enemies in the officialdom during his decade in charge with his grinding anti-corruption campaign, “zero-COVID,” and other “austerity” policies aimed at shoring up regime survival and tightening national security at the cost of moving the country away from “reform and opening up.” Similar to the first scenario, officials would have to wrap odd and questionable details around the “kernel of truth” of their political rumors (i.e. that Xi’s allies or loyalists are in trouble) to make it harder for the Xi leadership to trace their source, and possibly even to make the probes into Xi’s allies look worse than they might be (something that ultimately reflects extremely poorly on Xi).
It is very likely that both the first and second scenarios are unfolding simultaneously, which makes it nigh impossible for the Xi leadership to clamp down on those behind those political rumors. The spread of the political rumors ultimately serves to undermine Xi Jinping’s “quan wei” (authority and prestige) and force him to literally turn the anti-corruption knife inward to “excise” his own allies, with disastrous ramifications for Xi (see point 3).
2. Assuming that it is reliable, the information in the Sept. 19 article by The Wall Street Journal about how the Qin Gang investigation is now “focusing on whether the affair or other conduct by Qin might have compromised China’s national security” suggests that we are on track with our analysis in the July 27, 2023 newsletter. We wrote that “it cannot be ruled out that Qin and Xi’s political enemies had cast Qin’s case as one with ‘serious’ national security implications,” and Xi “would be forced to investigate Qin or at least put him under some form of control until anti-corruption or national security probes are completed.” While breaches of national security may be the fundamental reason behind the investigations into Qin Gang, Li Shangfu, and other Xi allies, the Xi leadership would have no choice but to sideline them on charges of corruption or personal misconduct, which are comparatively less severe and damaging to Xi’s “quan wei.”
We wrote in the July 31, 2023 newsletter that Xi’s remaining political enemies could be exploiting “the Xi leadership’s prioritization of national security matters to ‘manipulate’ the PRC leader into taking out his own allies and ultimately undermining his own interests.” The successful targeting of Qin, Li, the previous PLARF leadership, and others opens the door for Xi’s factional rivals to carry out national security “entrapment” operations against other Xi allies or even family members, with the goal of forcing Xi to increasingly train the anti-corruption campaign on his own relatives and camp.
3. For the longest time, Xi Jinping could count the anti-corruption campaign as his only genuine political success, while other “achievements” like “zero-COVID” and “alleviating extreme poverty” are mostly figments of propaganda. Xi now purging his own allies and loyalists over corruption, however, threatens to undo the anti-corruption effort, leaves the PRC leader with nothing to show for his decade in office, and strengthens the hand of his weakened but unvanquished political enemies in the factional struggle showdown.
In particular, Xi will be forced to take his anti-corruption investigations into “deep-water territory” and root out the “pernicious influence” of his own allies if he wants his anti-corruption campaign to retain a semblance of credibility. This means that the probe into Li Shangfu could implicate a slew of Xi allies or loyalists in the military or military-related industries, including Li’s predecessor at the CMC Equipment Development Department Zhang Youxia, as well as senior officials who were previously in military-related industries like Zhang Guoqing (second vice premier), Yuan Jiajun (Chongqing Party secretary), and Ma Xingrui (Xinjiang Party secretary).
Sweeping investigations that lead to the mass sidelining of Xi’s allies or loyalists will increase the paranoia and suspicion of Xi towards his cronies and vice versa, resulting in significant and regime-endangering political instability. Xi risks finding himself severely politically isolated in a situation akin to Mao Zedong after the denouncement of Lin Biao, or Emperor Chongzhen of the Ming Dynasty after he ordered the wrongful execution of loyal minister Yuan Chonghuan on false charges of treason.
Unless Xi is utterly delusional, he is almost certainly aware of the hugely damaging and highly consequential implications of taking out several high-ranking members of his own camp under the guise of rooting out corruption and “rectifying” the foreign affairs apparatus and the military. However, pressing ahead with formal corruption charges may be preferable to finding his own men guilty of the more serious act of breaching national security. Regardless of which option Xi chooses, he ultimately stands to indirectly implicate himself with abetting corruption and endangering national security for having elevated those men to high office in the first place—an outcome that discredits Xi’s anti-corruption campaign and severely erodes his own “quan wei.”
If Xi suspects or believes that his being forced to order probes into his own allies and loyalists is the work of the remnant Jiang Zemin faction or other “anti-Xi” forces in the Party elite, then Xi could decide to play hardball and “perish together” (同歸於盡) with his enemies by expanding the anti-corruption campaign to target previously “untouchable” groups like the princelings, CCP elders like Zeng Qinghong, and lingering “anti-Xi” elements in the military (including princeling-controlled military industrial enterprises like China Poly Group). By taking out both his factional enemies and allies, however, Xi would be generating immense political instability in the regime and would undermine the CCP’s own political legitimacy to the point that preserving the Party’s rule becomes untenable. We assess that Xi will only pursue “perish together” anti-corruption investigations if he has decided that the task of saving the CCP from its crises is inimical to his personal future.
