Analyzing personnel reshuffles at the CCP’s Hong Kong apparatus; CCP’s promotion of urban work hints at severe crisis

  1   Analyzing personnel reshuffles at the CCP’s Hong Kong apparatus

  HK apparatus personnel changes

May 30
The PRC State Council announced the removal of Zheng Yanxiong from his positions of Hong Kong Liaison Office director, Hong Kong and Macau Affairs Office deputy director, and national security adviser to the Committee for Safeguarding National Security of the Hong Kong Special Administrative Region. Zheng was succeeded by Zhou Ji, the executive deputy director (ministerial-rank) of the HKMAO.

Some overseas Chinese commentators view Zheng Yanxiong’s removal as another sign of Xi Jinping “losing power.” They further speculate that the personnel reshuffle is a precursor to a shift in Xi’s Hong Kong policy.

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i) Zheng Yanxiong (age 61) spent the early part of his career in the Guangdong officialdom, serving as secretary-general of the People’s Daily’s south China bureau, deputy director of the Guangdong provincial Party Committee’s policy research office, and in various posts in the Shanwei City government for more than eight years (January 2005 to July 2013).

As Shanwei Party secretary, Zheng Yanxiong was involved in the 2011 Wukan Village incident. Villagers in Wukan protested against the local government over illegal land sales by the village’s Party Committee, and the demonstrations escalated into clashes with the armed police. During the incident, Zheng criticized the villagers for turning to foreign media to air their grievances, saying “If you can trust foreign media, pigs can climb trees” and “You won’t rely on a responsible government like this, but you’ll count on a few lousy foreign media outlets? Rotten newspapers! Rotten websites! Everything’s been turned on its head.” Zheng’s remarks caused a stir online.

Tensions were eventually defused in Wukan when then-Guangdong Party secretary Wang Yang adopted a rare conciliatory approach by acquiescing to the holding of democratic elections in Wukan to select representatives to oversee the village’s governing committee.

Zheng Yanxiong’s career advanced rapidly after the Wukan incident, likely because his rhetoric and firm stance were aligned with the CCP’s “stability maintenance” sensibilities. He was transferred to the Guangdong provincial government where he served as executive deputy head of the provincial propaganda department, secretary-general of the provincial Party Committee, director of the provincial policy research office, and a member of the provincial Party Committee’s Standing Committee. Following Beijing’s enactment of the Hong Kong National Security Law, Zheng was appointed the first director of the Office for Safeguarding National Security in Hong Kong in July 2020. In January 2023, he became director of the Hong Kong Liaison Office and national security adviser to the Committee for Safeguarding National Security of the Hong Kong Special Administrative Region.

ii) Zhou Ji (61) began his career in local governments in Hubei Province and eventually served as a Standing Committee member of the provincial Party Committee and Party secretary of Yichang City (December 2016 to December 2020). Zhou was then transferred to Henan Province where he served as executive vice governor, deputy Party secretary, and secretary of the provincial Political and Legal Affairs Commission (December 2020 to July 2023). In July 2023, Zhou was promoted to executive deputy director (ministerial rank) of the HKMAO.

June 27
Zheng Yanxiong was appointed vice chairman of the education, science, culture and public health committee of the National People’s Congress.

July 1
Xu Qifang, deputy head of the Central Organization Department, was promoted to deputy director in charge of day-to-day affairs (ministerial rank) of the HKMAO.

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Xu, 59, began his career in Shaanxi Province and rose to become vice governor (July 2018 to January 2021). He was then transferred to Hainan Province where he served as provincial deputy Party secretary and secretary of the provincial Political and Legal Affairs Commission. After nearly 2 years, Xu was promoted to deputy head of the Central Organization Department (October 2022 to July 2025).

  Our take

1. Contrary to the speculation of overseas Chinese commentators, the removal of Zheng Yanxiong in Hong Kong is not a sign of Xi Jinping “losing power.” We previously explained that much of the speculation about Xi’s “power loss” relies on “glaring ignorance of context,” and the recent personnel adjustments in the CCP’s Hong Kong apparatus are a case in point.

2. The Xi camp and the Jiang Zemin faction have been struggling fiercely against each other even before Xi Jinping took office. The Xi-Jiang factional struggle intensified after Xi came to power in 2012, with Hong Kong being a key battleground.

The outbreak of the 2019 anti-extradition bill protests and their aftermath handed Xi an opportunity to purge the Hong Kong and Macau apparatus of Jiang faction holdouts and tighten his control over Hong Kong in particular. Notably, Xi would begin his consolidation at the top by appointing apparent loyalist Xia Baolong as HKMAO director and demoting Jiang faction member Zhang Xiaoming in 2020.

A review of the CVs of current HKMAO and Hong Kong Liaison Office officials shows that those who spent many years in foreign affairs apparatus and Hong Kong and Macau apparatus — both of which the Jiang faction had strong influence over during the faction’s era of dominance (1997 to 2012) — have since been removed (either transferred or retired) from key positions in the Hong Kong apparatus.

For example, none of the current deputy directors of the HKMAO have experience in the PRC foreign affairs apparatus or Hong Kong and Macau apparatus prior to Xi’s second term:

• Xu Qifang previously served in local governments and the Central Organization Department.
• Wang Linggui previously served as vice president of the Chinese Academy of Social Sciences.
• Zheng Xincong previously served in the Fujian provincial government.
• Nong Rong spent his early career in Guangxi local governments before being transferred to the foreign affairs apparatus in September 2020.
• Zhou Ji previously served in local governments.

By contrast, 12 of the 13 previous HKMAO deputy directors served many years in either the foreign affairs apparatus or the Hong Kong and Macau apparatus during Xi’s first two terms (2012 to 2022):

• Xu Ze entered the Hong Kong and Macau apparatus in 1982 and retired in April 2015. Xu served two stints as HKMAO deputy director, once from May 2001 to July 2004, and from June 2013 to April 2015.
• Zhang Xiaoming entered the Hong Kong and Macau apparatus in 1986 and served as secretary to former Jiang faction official and HKMAO director Liao Hui. He served as HKMAO deputy director from July 2004 to December 2017 (executive deputy director from 2012 to 2017), HKMAO director from 2017 to 2020, and HKMAO executive deputy director from 2020 to 2022. In June 2022, Zhang was transferred to the Chinese People’s Political Consultative Conference to serve as deputy secretary-general.
• Zhou Bo served as HKMAO deputy director for 13 years from May 2003 to December 2016.
• Hua Jian served as director of the HKMAO Liaison Department in 2003. In 2008, Hua replaced Chen Zuoer as HKMAO deputy director and served in that position until 2013.
• Feng Wei served as deputy director of the Hong Kong Liaison Office Research Department in 2006. Feng was appointed HKMAO deputy director in 2014 and served in that position until the end of 2018.
• Wang Zhimin was appointed deputy secretary-general and director of the Youth Work Department of the Hong Kong Liaison Office in 2006. Wang was appointed HKMAO deputy director in 2017 and held that position until 2020.
• Song Zhe joined the Ministry of Foreign Affairs in 1983 and was transferred to the Hong Kong and Macau apparatus in May 2012. He served as HKMAO deputy director from December 2016 to March 2022.
• Huang Liuquan joined the Hong Kong and Macau apparatus in 1991 and stayed there until his retirement. He served as HKMAO deputy director from December 2012 to November 2022.
• Deng Zhonghua joined the Ministry of Foreign Affairs’ Hong Kong and Macau Affairs Office in 1986 and spent the rest of his career in the Hong Kong and Macau apparatus.
• Fu Ziying spent the early part of his career in the Ministry of Foreign Trade and Commerce. In December 2018, he was appointed director of the Macau Liaison Office. Fu later served as HKMAO deputy director from February 2020 to May 2022.
• Luo Huining, a Xi ally and retired senior local official, was appointed director of the Hong Kong Liaison Office in February 2020 after the anti-extradition protests. Luo later served as HKMAO deputy director from February 2020 to January 2023.
• Wang Linggui did not serve in either the foreign affairs apparatus or the Hong Kong and Macau apparatus before his appointment as HKMAO deputy director in 2022.
• Yang Wanming, a diplomat with extensive experience in Latin America affairs who joined the foreign affairs apparatus in 1989, was appointed HKMAO deputy director in 2022.

The situation with the deputy directors of the Hong Kong Liaison Office is similar. Only one of the current four deputy directors has extensive experience in the foreign affairs system:

• Yin Zonghua, whose career was primarily in the Ministry of Commerce, rose to the rank of department-level official. After stepping back to serve as the resident deputy director of the Hong Kong, Macau, Taiwan, and Overseas Chinese Affairs Committee of the CPPCC in March 2018, he was reassigned to a frontline role as deputy director of the Hong Kong Liaison Office in March 2021.
• Luo Yonggang, who spent the bulk of his career in Inner Mongolia, was appointed secretary of the Hubei Political and Legal Affairs Commission in April 2019. Six months later, he was transferred to serve as deputy director of the Macau Liaison Office. In July 2021, he was reassigned as deputy director of the Hong Kong Liaison Office.
• Liu Guangyuan, a career diplomat, was appointed commissioner of the Ministry of Foreign Affairs’ Office in Hong Kong in May 2021. In July 2023, he was transferred to become the top-ranking deputy director of the Hong Kong Liaison Office.
• Qi Bin, whose career focused on hedge funds and the China Securities Regulatory Commission, was appointed deputy general manager of China Investment Corporation in August 2016. In November 2024, he was promoted to deputy director of the Hong Kong Liaison Office.

3. Zheng Yanxiong’s removal from his positions in the Hong Kong apparatus and subsequent appointment as a vice chairman of a special committee in the National People’s Congress is in line with the CCP’s political reshuffle norms.

As a ministerial-rank official, Zheng, who will turn 62 in August, can serve until he is 65. Per the CCP’s personnel rules, officials in key positions can hand over their post two to three years early. Meanwhile, Zheng’s appointment to the NPC suggests that he is in the Xi leadership’s good graces and has been allowed to “retreat to the second line” with a dignified post for his contributions to the regime. Therefore, Zheng’s removal from the Hong Kong apparatus is not a sign of Xi Jinping “losing power” or foreshadowing a change in Xi’s Hong Kong policy as speculated. If anything, Beijing’s decision to have Zhou Ji succeed Zheng shows that Xi’s personnel reshuffle strategy in Hong Kong remains in effect and that Xi’s control over Hong Kong is, if not strengthened, at least intact.

  2   CCP’s promotion of urban work hints at severe economic and demographic troubles

  Central Urban Work Conference

July 14 to July 15
The CCP authorities held the Central Urban Work Conference in Beijing. All members of the Politburo Standing Committee attended the meeting and premier Li Qiang gave the concluding remarks. Leading cadres from the Party, government, military, and mass organizations also participated in the meeting.

Xi Jinping delivered an important speech at the meeting. Noteworthy points include:

i) Summary of achievements

• China’s urban development has achieved historic progress since the 18th Party Congress.

ii) General requirements

• Central urban work should be:
  • Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era.
  • Implement the spirit of the 20th Party Congress and the second and third plenary sessions of the 20th Central Committee.
  • Uphold the Party’s overall leadership.
  • Practice the “people-oriented” urban development philosophy.
  • Adhere to the principle of seeking progress while maintaining stability and adapting to local conditions.

iii) Situation analysis

• China’s urbanization is shifting from rapid growth to steady development. Urban development is also transitioning from large-scale expansion to improving the quality and efficiency of existing spaces.
• Urban work must adapt to changes:
  • Shift development philosophy, and focus more on people-centered approaches.
  • Shift development mode, and focus more on intensive and efficient use of resources.
  • Shift growth drivers, and emphasize unique and differentiated development.
  • Shift priorities, and increase investment in urban governance.
  • Shift methodology, and emphasize coordination and holistic planning.

iv) Key principles

• Strengthen Party leadership, improve systems and mechanisms, enhance policy coordination, and boost execution.
• Promote a correct view of political achievements and encourage responsibility and action.
• Insist on seeking truth from facts, and oppose formalism and bureaucratism.

The meeting laid out seven priority tasks for urban work:

1. Optimize the modern urban system

• Develop networked and cluster city groups and metropolitan areas.
• Advance urbanization of counties and facilitate the integration of rural migrants.
• Promote balanced development of small, medium, and large cities and towns, as well as support urban-rural integration.

2. Build vibrant, innovative cities

• Foster innovation ecosystems and develop new quality productive forces.
• Enhance the momentum of reform and opening up, promote urban renewal, and strengthen the role of cities as hubs in both domestic and international economic cycles.

3. Create comfortable and livable cities

• Integrate planning of population, industry, urban layout, and transportation to optimize the spatial structure.
• Establish a new real estate development model, and promote the renovation of urban villages and dilapidated housing.
• Develop life-oriented service industries.

4. Build green, low-carbon, beautiful cities

• Consolidate achievements in environmental governance.
• Promote synergy in pollution control, carbon reduction, and environmental greening.

5. Build safe and resilient cities

• Upgrade critical infrastructure and aging utility systems.
• Limit construction of ultra-high-rise buildings.
• Strengthen disaster prevention and control, and enhance flood and waterlogging management.
• Enhance public security systems.

6. Build civilized and virtuous cities

• Improve systems for protecting historical and cultural heritage.
• Manage urban aesthetics, and preserve cultural heritage, geography, and landscapes.
• Strengthen cultural soft power.

7. Build smart and efficient cities

• Lead with Party building, govern cities according to law.
• Innovate governance concepts, models, and tools.
• Effectively use citizen service hotlines.

The meeting said that Xi Jinping’s speech provides scientific answers to critical questions about urban development, namely, who it serves, who it relies on, what kind of cities to build, and how to build them. Xi’s speech also offers fundamental guidance that must be diligently studied, understood, and implemented without compromise.

  Background

The CCP authorities have only convened Central Urban Work Conferences five times prior to the most recent one. Earlier meetings were called “National Urban Work Conferences,” and were renamed “Central Urban Work Conferences” from 2015.

Below is a summary of the previous five meetings:

i) First discussion on urban work

• The meeting was held from March 5 to March 13, 1949, in the town of Xibaipo in Hebei Province.
• The meeting was officially the second plenary session of the 7th Central Committee, but Party history records it as an urban work conference.
• The meeting was held as the CCP prepared to take over the mainland.
• Key points about the meeting include:
  • The Party’s urban work priorities were to be shifted from the countryside to the cities.
  • The meeting emphasized restoring and developing production, coordinating urban and rural efforts, and relying on the working class.
  • The meeting proposed that profits and taxes as funding sources for urban work.

ii) First National Urban Work Conference

• The meeting was held from July 30 to Aug. 24, 1962 in the resort town of Beidaihe in Hebei Province.
• The meeting was held as the CCP authorities sought to turn around the economy following the failure of the Great Leap Forward campaign.
• Key points about the meeting include:
  • The meeting analyzed the urban economic situation and discussed adjustments to the national economy.
  • The meeting issues instructions on “several current issues of urban work” (關於當前城市工作若干問題的指示). The instructions called for reducing urban populations, adjusting the administrative status of cities and towns, and shrinking suburban areas.
  • Action taken after the meeting led to a reduction of 26 million people from China’s urban population.

iii) Second National Urban Work Conference

• The meeting was held from Sept. 16 to Oct. 12, 1963 in Beijing.
• Key points about the meeting include:
  • The meeting said that efforts to control urban population growth should be continued.
  • The meeting said that there should be no urban recruitment from rural areas and mobilized people to return to the countryside.
  • The meeting adopted a summary that outlined nine directives, including industrial restructuring, commercial development, family planning, and promoting a reduction in the urbanization rate.

iv) Third National Urban Work Conference

• The meeting was held in March 1978 in Beijing amid the backdrop of “reform and opening up.”
• Key points about the meeting include:
  • The meeting stressed the leading role of cities in modernization.
  • The meeting issued an opinion on “strengthening urban construction work” (關於加強城市建設工作的意見) that advocated for controlling the size of large cities, developing small and medium-sized towns, and unified planning to balance economic, social, and environmental benefits.

v) 2015 Central Urban Work Conference

• The meeting was held from Dec. 20 to Dec. 21, 2015 in Beijing.
• The meeting was held 37 years after the last one and during a time when China was reeling from stock market turbulence in the middle of the year.
• Key points about the meeting include:
  • The meeting analyzed the current state of urban development.
  • The meeting emphasized people-centered development and intensive development.
  • The meeting called for coordinated planning of space, scale, and industry.
  • The meeting aimed to resolve “urban diseases” like congestion and pollution.
  • The meeting highlighted the need to strengthen Party leadership and improve planning, construction, and management capacities.

  Backdrop

Data from the National Bureau of Statistics and related reports show that China’s real estate market had performed sluggishly in the first half of 2025. While there are some signs of stabilization, housing prices have not stopped declining or begun to rebound.

  Our take

1. Historically, the CCP has convened its Central (National) Urban Work Conferences during times when the regime faces, or believes it faces, significant economic challenges. That Beijing has convened another such meeting recently suggests that it believes that China faces severe economic challenges — something that the CCP would never directly admit to in its propaganda — and needs to make changes in urban work to help tackle and alleviate economic pressures.

Beijing’s dim view of China’s economic prospects is reflected in the lackluster official economic data that has been released so far, as well as in other direct and indirect economic indicators.

2. The messaging from the 2025 Central Urban Work Conference indicates that Beijing is looking to indirectly stimulate real estate demand through vigorously advancing urbanization. This includes establishing or optimizing major central cities (i.e. urban clusters and metropolitan areas) so as to concentrate populations and boost consumption. While the meeting did not offer many details, it is likely that Beijing wants to further develop massive urban clusters like the Beijing-Tianjin-Hebei region, Yangtze River Delta, and Pearl River Delta, along with their associated industrial division layouts, to attract more migrants to those places by 2035. Additionally, the plan to concentrate populations could theoretically help the regime to alleviate structural pressures from population decline to some extent.

Meanwhile, the meeting’s call to “establish a new real estate development model, and promote the renovation of urban villages and dilapidated housing” entails the leveraging of urban renewal projects to release land for housing needs, stimulate investment, and boost housing demand. By transitioning urban development from “large-scale expansion” (i.e. building more new homes) to “improving the quality and efficiency of existing spaces” (i.e. renovating and upgrading existing homes), Beijing is looking to concentrate populations and resources to drive consumption (lifestyle services, etc.) and real estate-related investment in central cities.

Contrary to the impression given by Western legacy media, there is nothing new about the CCP’s “new real estate development model.” Beijing first proposed the model in November 2023 to address structural supply and demand issues through a “new mechanism” to “determine housing based on the people, determine land based on the housing, and determine investment based on the housing.”

3. Beijing’s effort to “optimize the modern urban system” could be an effort to address projected severe consumption shortages that would stem from large-scale population decline in China in the coming decades. Per the CCP’s official data, China’s population growth rate in 2025 was negative 0.23 percent, the population’s median age was 40.1 years old, and the total fertility rate was between 1.0 to 1.18 (far below the replacement rate of 2.1). China’s population also likely took a drastic hit during the three pandemic years (2020 to 2022), something that appears to be increasingly reflected in the sluggish economy, persistently weak consumption numbers, and sustained deflationary pressures.

The 2025 Central Urban Work Conference’s promotion of greater urban integration and development is likely intended to concentrate surplus rural populations in central cities to enhance labor supply and consumption potential. On paper, this could temporarily cushion the economic impact of population decline, especially if the urban young and middle-class population grows and there is more demand for housing, education, and consumption.

The CCP’s latest effort to address China’s demographic and economic problems aligns closely with what we anticipated Beijing would do to meet the problems caused by the pandemic. In May 2020, we wrote that the CCP authorities could attempt to “attract people with ability and wealth to medium- to large-sized cities” to resolve “labor shortage problems brought about by very low population growth”; “drive the development of areas and cities neighboring first-tier cities in China”; “facilitate labor and capital needs for ‘industrial layout optimization’”; “drive up consumption in medium- to large-sized cities”; and “prop up property prices in medium- to large-sized cities.”

4. The promotion of the “new real estate development model” at the 2025 Central Urban Work Conference is likely intended to boost real estate demand and avert a credit collapse.

The latest social financing and financial data from the People’s Bank of China shows that private sector credit is contracting, with credit growth primarily sustained by government bond issuance. In the first half of 2025, China’s social financing scale grew by 22.83 trillion yuan, an increase of 4.74 trillion yuan from the same period in 2024. However, government bond issuance drove this expansion, with net financing from government bonds reaching 7.66 trillion yuan, up 4.32 trillion yuan year-on-year, accounting for over 90 percent of the incremental growth.

Meanwhile, total renminbi loans in the first half of 2025 amounted to 12.92 trillion yuan, down 350 billion yuan from 2024. Household loans, a critical indicator of consumer confidence, totaled just 1.17 trillion yuan, a decline of 290 billion yuan compared to the prior year. Medium- and long-term loans, primarily reflecting mortgage activity, grew by 1.17 trillion yuan, a marginal decrease of 10 billion yuan from 1.18 trillion yuan in 2024, signaling persistently weak demand in the real estate sector. Home price expectations remain bearish, with residents showing limited appetite for property purchases, keeping the sector mired in a prolonged downturn.

More concerning, short-term household loans recorded a net decline of 3 billion yuan, the first such contraction on record, compared to a 276.4 billion yuan increase in the first half of 2024 — a staggering year-on-year drop of nearly 280 billion yuan. This sharp reversal highlights deepening consumer caution amid deflationary pressures and economic uncertainty.

5. We are pessimistic about the ability of the policies from the 2025 Central Urban Work Conference to turn things around for the CCP regime. For one, China’s demographic problems are likely irreversible and any consumption boost that could come from further concentrating populations in urban centers will be short-lived. Also, the prolonged real estate downturn and slowing urbanization will exacerbate regional disparities.

The Xi Jinping leadership also has to contend with the inability of local governments to implement the central government’s policies in a way that the latter finds satisfactory. Be it “bureaucratism” and its associated problems (“lying flat,” “inaction,” etc.) or local officials demonstrating an incorrect understanding of what the central authorities want (something that the Xi leadership is trying to address through improving policy coordination), Beijing will continually find that its orders never leave the gates of Zhongnanhai even after Xi has consolidated power to a high degree in the hopes of addressing persistent governance failures. If the Xi leadership cannot resolve its governance issues, it will find that the “spirit” of its various meetings will remain confined to official documents instead of actual implementation.