1 CCP doubles down on political indoctrination post-Third Plenum
Beijing emphasizes discipline and ideology
Aug. 29
The CCP General Office issued measures for the organizational handling of unqualified Party members (中國共產黨不合格黨員組織處置辦法) and required all regions and departments to conscientiously follow and implement them.
A person-in-charge at the Central Organization Department told reporters that the measures are an internal Party regulation specifically formulated to handle unqualified CCP members. The person-in-charge said that the measures outlined 15 situations where Party members are considered to be “unqualified” and must be dealt with, including:
Party members who must make corrections within a specified period
- Those with weak ideals and convictions, lack revolutionary will, and have weak Party consciousness.
- Those with religious beliefs, have a passive and slack work attitude, and fail to play a vanguard and exemplary role.
- Those with a weak sense of organizational discipline, do not participate in Party organizational life as required, and do not pay Party dues on time and in full.
Party members who must persuaded to leave the Party
- Those who threaten to leave the Party to achieve personal goals and refuse to change after being educated (i.e. subjected to political indoctrination).
- Those who do not change their ways after the correctional period is up.
Party members who must be expelled
- Those who have lost their ideals and beliefs, waver in their political stance, are disloyal to the Party, betray the Party’s original mission, and no longer meet the criteria for Party membership.
- Those who, without a valid reason, are not participating in Party organizational life, have not paid Party dues, or have not done the work assigned by the Party for six consecutive months.
Aug. 30
The Central Leading Group for Party Building convened a meeting to convey instructions from Xi Jinping and review an opinion on “promoting the normalization and long-term effectiveness of Party discipline study and education” (關於推動黨紀學習教育常態化長效化的意見). The meeting also summarized efforts pertaining to the study and education of Party discipline.
State media said that Politburo Standing Committee member and Central Leading Group for Party Building head Cai Qi presided over the meeting and delivered a speech. Li Xi, the deputy head of the leading group, also attended the meeting and gave a speech.
Xi Jinping emphasized the following points in his instructions:
- The study and education of Party discipline have achieved positive results, and these outcomes should be consolidated and deepened.
- Efforts should be made to ensure the implementation of tasks related to the study and education of Party discipline, and to wrap up this phase of work properly.
- There should be a continued push to normalize the study and education of Party discipline.
- There should be focus placed on eliminating the “soil and conditions” (i.e. environment) that breed corruption, and effectively curb any increase in corruption and eliminate existing problems.
- Efforts should be made to guide and encourage Party members and cadres to be active in taking action while strictly adhering to rules and discipline.
The meeting stressed that General Secretary Xi Jinping’s important instructions are “highly political, ideological, targeted, and instructive.” All Party members should study them carefully and comprehensively implement them.
The meeting noted that the current round of Party discipline study and education is “basically completed” and there is a need to summarize and apply the good experiences and practices gained from the process. Further, the disciplinary training for leading cadres (一把手), young cadres, and newly promoted cadres should be strengthened.
Sept. 1
Qiushi, the CCP Central Committee ideological journal, published in its 17th issue of the year parts of Xi Jinping’s speech at the National Education Conference on Sept. 10, 2018 under the title, “Cultivating Socialist Builders and Successors with All-round Moral, Intellectual, Physical, Aesthetic, and Labor Development” (培養德智體美勞全面發展的社會主義建設者和接班人).
The article stressed that the “fundamental task of education must be to cultivate socialist builders and successors” and the CCP regime “must not cultivate destroyers or gravediggers of socialism” and people who “have a Chinese face but not a Chinese heart, lack Chinese sentimentality, or lack a Chinese character.”
The article claimed that “for a long time, various hostile forces have never ceased their efforts to implement strategies of Westernization and division against China, nor have they stopped their attempts to subvert and undermine the leadership of the CCP and the socialist system of China.” The “various hostile forces” have also “always sought to plan a ‘color revolution’ in China, and the area where they focused their efforts the most is the battle for our youth.” The article added that the “struggle for our youth is long-term and severe; we cannot afford to lose this battle and we must stay vigilant.”
Other noteworthy points in the piece include:
- There must be efforts to strengthen the education of students with regard to Chinese history, especially modern Chinese history, the history of the Chinese Revolution, the history of the CCP, and history of the PRC, and the history of China’s “reform and opening up.” There must also be persistent efforts to cultivate and promote core socialist values.
- Students must be educated and guided to love and support the CCP, and to be determined to listen to and follow the Party.
- Textbooks must adhere to Marxism as the guiding ideology and reflect the requirements of Marxism adapted to the Chinese context.
- The content of textbooks must be reviewed and meet the political requirements of the CCP (教材建設要加強政治把關).
Sept. 2
1. The PRC National Defense University held a special seminar for senior military officers to study and implement the spirit of the Central Military Commission’s political work conference that was held in Yan’an City.
In an opening speech, CMC vice chairman He Weidong stressed that studying and implementing the spirit of the CMC’s political work conference is a “major political task.” He further emphasized that there was a need to resolutely implement the decisions and deployments of CMC chairman Xi Jinping, follow the strategy of political military-building in the new era, and promote a deeper and more practical approach to political military-building.
2. PRC state mouthpiece Xinhua published a summary of the activities of the Central Propaganda Group for studying and implementing the spirit of the Third Plenary Session of the 20th Central Committee.
The Xinhua article said that since late July, members of the Central Propaganda Group for studying and implementing the spirit of the Third Plenum have traveled to China’s 31 provinces, municipalities, and autonomous regions, the Xinjiang Production and Construction Corps, the Hong Kong and Macau Special Administrative Regions, as well as relevant systems, departments, and units to carry out a series of propaganda activities. The activities include delivering 52 reports and holding 57 interactive exchange activities in various formats. Nearly 980,000 people directly attended those events, with over 20 million people indirectly participating through television broadcasts, online streaming, and other channels.
The article said that “consensus” was built during those propaganda activities and “thoughts were elevated” through studying. Through those activities, a broad swathe of Party members, cadres, and the public grasped the spirit of the Third Plenum and understood the intentions behind the reforms.
Backdrop
Various political rumors unfavorable to Xi Jinping circulated constantly before and after the Third Plenum, including speculation that he was suffering from serious health issues and there was “serious trouble” in Zhongnanhai, including a coup or attempts to force him out of office.
Beijing is also struggling with a rapidly worsening economy and increasing geopolitical pressures.
Our take
1. The above CCP propaganda theme and activities are signs that Xi Jinping’s grip on power is secure and his political position is stable. In particular, the Central Propaganda Group’s post-Third Plenum propaganda tour and the special seminar on the CMC’s political work conference indicate that Xi’s political thoughts and line remain the central theme of Party propaganda. This would not be the case if Xi were physically incapacitated or politically displaced as the circulating political rumors and speculation claim.
2. The CCP’s recent propaganda and disciplinary moves reflect Xi and the Party’s ongoing need to maintain their rule and improve governing efficiency through intensified political indoctrination. The propaganda theme and activities appear to be partly and indirectly aimed at addressing elite opposition and public dissent towards the Xi leadership. Meanwhile, the moves made to address Party discipline suggest that the Xi leadership still has a long way to go in addressing corruption in the regime.
i) The CCP General Office’s measures for the organizational handling of unqualified Party members list the disciplinary problems that are likely prevalent among CCP members today and that Beijing is trying to fix by wielding the stick. The Xi leadership’s belief that such a move is necessary indicates that more than a decade of “self-revolution” — including increased political indoctrination, tightening Party discipline, and a grinding anti-corruption campaign — have failed to adequately address problems of discipline and corruption in the officialdom and the CCP at large.
Discipline and corruption problems negatively impact governing efficiency, which the CCP needs to improve to cope with the severe crises that it faces. Therefore, the Xi leadership is getting granular in identifying what exactly Party members are doing incorrectly and how they should be handled to get them in shape to better serve the regime. Such micromanagement, however, could backfire and disincentivize people from joining the Party.
ii) The meeting of the Central Leading Group for Party Building indicates that the campaign to study and educate CCP cadres and members in Party discipline that was launched in April 2024 has concluded, but the Xi leadership is looking to normalize the indoctrination effort.
The Party discipline study and education campaign was intended to familiarize CCP members and cadres with the revised “Regulations on Discipline and Punishment of the CCP” (中國共產黨紀律處分條例) and emphasize the need for Party discipline. The Xi leadership likely hoped to use the campaign to improve discipline among officials so as to root out corruption, as well as resolve long-standing issues of inaction (不作爲) or “lying flat” (躺平) in the officialdom. Instead, as we previously analyzed, the campaign is “likely to increase the resentment of officials towards Xi and strengthen the perception in the West that China is becoming increasingly authoritarian under Xi.”
iii) The special seminar for senior military officers to study and implement the spirit of the Central Military Commission’s political work conference in Yan’an City held at the National Defense University appears to be part of an effort by Xi Jinping to strengthen his control over the military and ensure the obedience of senior officials through stepping up political indoctrination.
Xi is likely intensifying indoctrination efforts in the military to suppress dissenting voices and keep senior officers in line as his leadership continues to investigate and deal with severe corruption in the People’s Liberation Army Rocket Force, equipment department, and the PRC’s defense industry.
iv) The Central Propaganda Group’s promotion of activities for studying and implementing the spirit of the Third Plenary Session of the 20th Central Committee is almost certainly aimed at getting both Party members and the general public to accept the decisions made at the Third Plenum. The Xi leadership would especially want CCP members and the public to accept Xi’s historical positioning as laid out at the Third Plenum, as well as his broad political and economic agenda, with the goal of safeguarding Xi’s “quan wei” and promoting acceptance of his “strongman” rule.
v) Qiushi’s publication of parts of Xi Jinping’s speech at the National Education Conference on Sept. 10, 2018 indirectly hints through the points it emphasizes that Beijing is aware of growing dissatisfaction towards Xi and the CCP regime both inside China and abroad.
The focus on politically indoctrinating the youth is partly intended to tackle the dissatisfaction issue and prop up the Party’s political legitimacy by brainwashing a particularly impressionable and vital segment of the population so that they would be loyal to the regime and be less likely to migrate like many wealthy elites and those in the middle class with the means. The ultimate goal of the propaganda is maintaining regime stability into the future as the CCP struggles with serious crises.
2 Why the CCP is spending big on large-scale canal construction
Mainland media recently reported that six provinces in China are investing heavily in canal excavation projects, with a total investment of about 850 billion yuan. The provinces are Guangxi, Hunan, Jiangxi, Zhejiang, Guangdong, and Hubei.
Some large-scale canal projects in recent years include:
- In August 2023, the Anhui provincial government invested 95 billion yuan in the “Jianghuai Canal.” The canal has since been officially open for navigation.
- In August 2022, the Guangxi provincial government launched the “Pinglu Canal” project to open up a sea access route from Nanning City to the Beibu Gulf. Total investment in the project was estimated at 72.7 billion yuan and it is expected to be completed by the end of 2026.
- The Guangxi provincial government collaborated with the Hunan provincial government to build the “Xianggui Canal” to connect the Yangtze River and Pearl River water systems to create a major north-south waterway. The canal is about 300 kilometers long and received about 150 billion yuan in investment.
- The provincial governments of Jiangxi, Zhejiang, and Guangdong plan to build the “Zhejiang-Jiangxi-Guangdong Canal.” The canal will incorporate the “Gan-Yue Canal” and the “Zhe-Gan Canal” and would be about 1,988 kilometers long. The project is planned to receive about 320 billion yuan in investment.
- The Henan provincial government plans to invest 141.6 billion yuan to develop 47 inland water transport projects, as well as connect the Yellow River, Huai River, and Yangtze River waterways.
- The Hubei provincial government plans to invest 74.8 billion yuan in the “Jinghan Canal” to connect Jingzhou and Wuhan, as well as “straighten out” the Yangtze River by cutting through its bends and shortening the shipping distance.
CCP propaganda on canals
Official mainland media has heavily promoted the idea of China entering a new “canal era” with “trillion-yuan investments to build the national fortune,” and listed the benefits of building canals (“large transport capacity,” “low transportation costs,” “low energy consumption,” and “less pollution”).
Official mainland media also noted the historical contributions of China’s Grand Canal, on which construction began in the Sui Dynasty (581–618) and is still in use today, in an attempt to demonstrate the advantages of the CCP’s canal construction efforts.
Backdrop
1. China has highly-developed road, rail, and shipping networks. However, China’s logistic costs account for about 14 percent of its GDP, which is much higher than the 7 percent to 8 percent level in other developed countries.
The CCP authorities are keen on promoting inland water transportation because logistics costs of such shipping are only half that of rail, one-fifth that of road, and one-twentieth that of air. Moreover, ships have a large carrying capacity and are suitable for the transportation of less time-sensitive bulky items such as coal and ore.
The PRC Ministry of Transport’s 2023 statistical bulletin on the development of the transportation industry notes that the input-output ratio of investment in inland waterway construction to freight volume is one to four. Investment in inland waterway construction (105.2 billion yuan) accounted for 2.68 percent of fixed asset investment in transportation in 2023 (3.914 trillion yuan). Also, inland waterway freight volume (4.791 billion tons) accounted for 8.75 percent of the 2023 operational freight volume (54.747 billion tons).
2. The CCP authorities’ 14th Five-Year Plan released in January 2022 calls for the construction of a “strong transportation country” by the middle of the century, with the aim of “basically completing” this goal by 2035.
Details on canal construction mentioned in the 14th Five-Year Plan’s water transportation development section include:
- Accelerate the preliminary study and construction of the Western Land-Sea New Corridor (Pinglu) Canal project.
- Research the feasibility of reopening the northern section of the Beijing-Hangzhou Canal north of the Yellow River and the Tianjin-Baoding route.
- Conduct preliminary studies and feasibility research on key issues for the Xianggui and Ganyue canals.
Big picture
China’s real estate sector continues to see double-digit declines and the CCP authorities are still in search of a new area to drive growth. Real estate problems have contributed to the contraction in credit and social financing in the country. Concurrently, the land-based revenue model that local governments have long relied on is on the verge of collapse and has resulted in severe fiscal shortages.
Our take
1. We see several reasons why the CCP authorities are spending big on canal construction:
i) The CCP urgently needs big infrastructure projects like canal construction to help offset the decline in economic growth and credit contraction caused by the real estate sector crisis. National real estate development investment decreased by 2.4 trillion yuan in the first seven months of 2024 to reach 6.1 trillion yuan, a sizable drop when compared to the 8.5 trillion yuan during the peak of real estate investment during the same period in 2021.
The CCP has had some success in turning to infrastructure development to boost the economy. After the 2008 global financial crisis, the PRC launched major infrastructure initiatives like high-speed rail and highway construction. In 2015, the CCP authorities’ “monetization” of shantytown redevelopment projects was a boon to the real estate sector and spurred consumer borrowing.
The CCP 14th Five-Year Plan’s call to build a “strong transportation country” was focused on the construction of high-speed railways and highways, not inland waterways. However, many local governments have halted high-speed rail construction in recent years. The shift in policy focus could be due to China’s noticeable population decline, the high operating and maintenance costs of high-speed rail and highways, and excessively high local government debt.
ii) The construction of canals and other inland waterways does help with the transportation of bulky commodities and reduces transportation costs. This benefits the authorities’ efforts to strengthen transportation networks and the development of industrial layouts in various regions.
Take Guangxi for example. Guangxi is a coastal region, but there are no rivers stretching southward from the province to the Beibu Gulf ports. This means that seabound goods from inner Guangxi often need to be rerouted through the nearby city of Guangzhou in Guangdong Province. The construction of the “Pinglu Canal” would connect the Xijiang River in Guangxi to ports in the Beibu Gulf, cutting transportation time and costs.
If the Hunan provincial authorities complete the “Xianggui Canal,” they would open up a route from the Yangtze River to the Pearl River, connecting the two major port areas of the Yangtze River Delta and the Greater Bay Area.
Meanwhile, Jiangxi Province, which has an abundance of nonferrous metal resources, rare metals, rare earths, and uranium, would benefit from the construction of the “Zhejiang-Jiangxi-Guangdong Canal.” Use of the waterway would lower the costs of transporting metals and minerals, facilitate north-south goods circulation, and better link Jiangxi to the world through the seaports of the Yangtze River Delta and the Pearl River Delta.
iii) The CCP authorities could be looking to tap canal construction to gain geopolitical advantages. If the PRC can demonstrate an ability to maintain economic growth through canal construction, countries in Southeast Asia could be encouraged to cooperate with China on canal projects and allow the PRC to strengthen its influence in the region.
For instance, China and Cambodia are currently cooperating on the construction of the Funan Techo Canal, which connects the lower Mekong River to the Gulf of Thailand. The project is expected to be finished in 2028, with a total investment of $1.7 billion. Once completed, the canal would reduce Cambodia’s dependence on Vietnamese ports and increase its reliance on China.
The PRC could also find opportunities to expand its influence in Thailand. Thailand’s new prime minister Paetongtarn Shinawatra is the daughter of pro-China former prime minister Thaksin Shinawatra. When Thaksin was in office, he proposed the idea of building a canal to connect the Gulf of Thailand with the Andaman Sea across the Kra Isthmus in southern Thailand. Paetongtarn Shinawatra could eventually revive the canal idea and potentially seek China’s help in its construction. The construction of a Kra Isthmus canal would benefit the PRC because ships would be able to bypass the Malacca Strait and directly enter the Pacific or Atlantic Oceans via the Andaman Sea in the Indian Ocean. This provides a new maritime route option for Chinese ships and helps the PRC reduce its reliance on the Malacca Strait, which is vulnerable to being blocked by the U.S. and its allies.
2. Large-scale canal construction, however, could ultimately do more harm than good to the CCP regime:
i) The investment of nearly a trillion yuan in new canals could potentially boost China’s GDP growth by 1 to 3 percent. However, investment in infrastructure generates very low returns, and local governments facing severe fiscal shortages and debt problems could see their debt burden steeply increase without experiencing more immediate benefits. Local governments also have to fork out substantial amounts in annual operating and maintenance costs, which would eat into the savings from opening the waterways.
ii) While costly, China’s existing infrastructure is sufficient to meet its transportation needs. Canals are at risk of becoming white elephants as supply chains shift away from China and exports decline; there is already an excess of capacity at large ports.
iii) New canals could divert some cargo from land transport, worsening the problem of insufficient cargo volume (caused by deflationary pressures in China) and resulting in more losses for freight companies.
iv) Building more canals may not necessarily translate to lower land transportation costs given the reasons why costs are higher in China than in other developed countries in the first place. For one, state-owned companies have a monopoly on fuel sales, leading to high transportation prices.
Land transportation companies also have to deal with local government fines. To reduce costs, transportation companies get their drivers to overload their vehicles, leaving them vulnerable to government fines. Overloaded vehicles also tend to wear out roads more quickly, creating a vicious cycle where local governments facing increased maintenance costs become incentivized to fine transport companies, and those companies become more inclined to overload vehicles to cut costs.
v) The CCP authorities have been comparing their canal projects to the construction of the Grand Canal to talk up their importance and enhance the Party’s prestige. However, the Sui Dynasty’s collapse mere decades after its establishment came partly as a result of its lack of finances, which in turn were depleted due to heavy expenditures, including investment in the Grand Canal project.
In bringing up history to burnish its endeavors, the CCP runs the risk of attracting less glamorous comparisons. In massive spending on canals and other large but economically dubious projects, the CCP also risks following in the footsteps of the Sui empire.
