SinoInsight 1
CCP General Secretary Xi Jinping went on an inspection tour of Guangxi Province from April 25 to April 27. Xi’s first stop on day one of his trip was a visit to a memorial garden in Guilin’s Quanzhou County dedicated to the Red Army’s Battle of Xiangjiang during its Long March in 1934.
According to PRC state media, Xi said at the memorial garden, “Why did the Chinese Revolution succeed? The secret is sky-high revolutionary ideals and persistence in the most difficult times. This way, miraculous victories can be continually achieved.” He added, “While on the ‘New Long March’ to realize struggle goals for the second hundred years, we must hold on to belief in victory, bravely overcome various major risks and challenges at home and abroad, and move forward courageously towards the goal of achieving the great rejuvenation of the Chinese nation.” Xi also said, “In the face of even greater difficulty, think about the Long March and the Battle of Xiangjiang.”
Also on April 25, Xinhua published a piece titled, “Why Does Xi Jinping Attach So Much Importance to This Critical Battle?” to decode the political implications of Xi’s trip to the memorial garden. The article noted that Xi previously mentioned the Battle of Xiangjiang on numerous occasions. The battle was a disaster for the CCP, with the Red Army encircled by Kuomintang troops for days in Guangxi. When the CCP finally broke out of the encirclement, crossed the Xiangjiang River, and embarked on their Long March, their numbers had shrunk from 86,000 to about 30,000. The Xiangjiang fiasco led to factional struggle within the CCP elite over whom control of military command fell to, with Mao Zedong finally establishing his leadership role in the CCP Central Committee and the Red Army at the Zunyi Conference in January 1935.
Highlights of the Xinhua article include:
1. The article said that the Battle of Xiangjiang was “a concentrated expression of ideals, beliefs, and powerful force,” with a CCP facing near-destruction “killing out a bloody road, and killing out a path to rebirth and victory.” Then the article draws a parallel between the Party’s experience at Xiangjiang with the PRC’s current domestic and geopolitical position: “In today’s world, the century of change is accelerating, and our country is in a critical period in the realization of the great rejuvenation of the Chinese nation. Risks and challenges still exist, while the domestic and international environment is even more complex. Only [through] resolute ideals and beliefs can [we] keep up with difficulties. With the mentality of ‘forging ahead through trials and tribulations’ (砥砺奋进), [we will] continually move from victory to new victory.”
- Analysis: Xinhua is indicating that Xi Jinping is highlighting with his visit to the memorial garden dedicated to the Battle of Xiangjiang that the PRC today, like the Red Army back in 1934, is in an extremely perilous situation. Xi is therefore reminding the CCP of its history of surviving crises and noting that the Party can still dominate later as did its founding revolutionaries; Mao and comrades survived the Xiangjiang fiasco, ousted the Kuomintang, and founded the People’s Republic of China. In the meantime, the CCP should have “strong ideals and beliefs” and trust Xi Jinping to lead them through the crisis.
2. The article quotes Xi Jinping, “Every generation has its own Long March, and every generation must walk its own Long March.” The article added, “The path of the ‘New Long March’ will feature one “blockade line” after another, as well as ‘Loushanguan Passes’ and ‘Lazikou Passes.’” However, “great struggle is inseparable from revolutionary heroes’ fearless spirit of sacrifice.”
- Analysis: Xi wants the Party to view the difficulties facing the regime as a “New Long March” and overcome them through a “fearless spirit of sacrifice.” In other words, Xi is repackaging his policy and governance failures as a price that must be paid in treading the “New Long March.”
3. The Xinhua article describes the disastrous Battle of Xiangjiang as “a great new turning point for the Chinese revolution.” Moreover, “the correct path can only be validated from bloody lesson after bloody lesson, and the revolution will eventually find its bright direction.” The deeper historical value of the Xiangjiang fiasco is “establishing the correct leadership of the CCP Central Committee.”
- Analysis: Again, Xi is defending his policy and government failures, recasting them as necessary “bloody lessons” that eventually illuminate a “bright direction” for the regime. And despite his failures, the Party must above all accept the leadership of “Party Central with Comrade Xi Jinping at the core.”
OUR TAKE
1. Observers who are “locked” in the “Xi is the new Mao” framework will be delighted to find more justification for the comparison in Xi Jinping’s trip to the Battle of Jiangxiang memorial garden. After all, Xi is implicitly likening himself to the Chairman by invoking Jiangxiang; the Red Army failed at Jiangxiang because Mao Zedong was not yet Party leader, but Mao proceeded to set the CCP on the victorious path of seizing China from the Kuomintang after establishing his leadership at the Zunyi Conference. Party cadres and members who know their CCP history will infer that Xi is blaming the regime’s plight today on intra-Party factional fighting, which is preventing Xi from governing and having his policies implemented the right way. Just like how Mao set things right after the Zunyi Conference when his authority and “quan wei” were established, Xi is signaling that he will do likewise when his own “quan wei” and third office term are secured at the 20th Party Congress in 2022.
Of course, the analysis above is how Xi would prefer the Party view his trip to Jiangxiang. It is very possible that the political signaling would fly over the heads of a good majority of card-carrying Party members, many of whom may have zero interest in CCP history or are less familiar with the Jiangxiang episode and its implications. That is why Xinhua had to publish an explainer article on the day of Xi’s Guangxi tour about his first stop to make sure that the points about domestic and foreign “risks and challenges,” the strength of the CCP’s “ideals and beliefs,” the need for the “spirit of sacrifice” of the revolutionary years, and the necessity of rallying around Xi’s Party Central are hammered home to the Party rank-and-file.
Meanwhile, Xi’s factional rivals and opposing interest groups in the regime could choose to view Xi Jinping’s invoking the Battle of Jiangxiang as him indirectly admitting to his lack of accomplishments and many failures since 2012. Under Xi, the PRC has seen years of shrinking GDP, capital flow woes (substantial outflows through legal and illegal channels and “hot money” headaches), a stock market turbulence in 2015 (worsened by the Jiang faction’s “financial coup” efforts), the outbreak of the COVID-19 pandemic in late 2019, and sluggish “post-pandemic” economic recovery. Worse, Xi’s ambitious external policies (Belt and Road, Taiwan, border clashes with neighbors, RMB internationalization, etc.), enhanced militarism, imposition of a national security law over Hong Kong, and persecution of Uyghur Muslims in Xinjiang have courted serious international pressure. Beijing felt existential danger most keenly during the Trump era when Washington shifted America’s longstanding “engagement” policy to “strategic competition,” waged a trade war against the PRC that worsened the regime’s economic situation, and locked the CCP in an ideological battle that “wolf warrior” diplomats and propaganda outlets are still struggling with today. The CCP’s aggressiveness under Xi—particularly its role in the COVID pandemic and efforts at exploiting the pandemic to gain an advantage—has rallied an informal global “anti-CCP coalition” that continues to resist the PRC post-Trump. The Chinese regime’s treatment of Hong Kong (national security law and de facto ending of “one country, two systems”) is making it much harder to persuade Taiwan to go along with “peaceful unification.” Many countries, companies, and organizations have condemned China and Xi’s role in the Xinjiang persecution campaign, with some legislatures and politicians labeling what the Party is doing to the Uyghurs as genocide and crimes against humanity. No wonder Xi Jinping called attention to “various major risks and challenges at home and abroad” when visiting the Jiangxiang memorial garden, and compared the PRC’s situation today with the CCP being encircled by the Kuomintang in 1934.
From the perspective of his factional rivals, Xi Jinping more closely resembles the Bo Gu-Otto Braun-Zhou Enlai triumvirate than Mao Zedong for his role in bringing failure to the CCP. Xi’s rivals will seek to flip his narrative on its head and “bring order out of chaos” (撥亂反正) at the 20th Party Congress, similar to how Mao established himself at the Zunyi Conference.
2. According to Xi Jinping, the CCP can survive its current crises and dominate later through “sky-high revolutionary ideals and persistence in the most difficult times.” Indeed, Xi has shown through his “successful” poverty alleviation campaign that the Party can still deliver “miraculous victories” when things are going against them. Further, Xi has talked about how “the East is rising, and West is declining” (東升西降) and “time and momentum” are on the CCP’s side. Thus, Xi hopes that Party members will rally around him and “the revolution will eventually find its bright direction.”
That Xi and propaganda outlets even have to “spin tragedy into victory,” talk about beating the odds, and encourage self-sacrifice are signs that Beijing and the regime are in a tough spot. Having grown up during good times and in a very corrupt environment, the current generation of Party members and cadres are nothing like the founding revolutionaries in terms of possessing sheer grit, tenacity, and a “fearless spirit of sacrifice.” Worse for Xi Jinping, these Party members and cadres remember the good, easy times in the pre-Xi era and are resentful of tougher Party discipline, drop in prosperity, and increased international hostility towards China under the current leadership. Party princeling Cai Xia said in a 2020 interview that “discontent within the Party was widespread, especially among her generation as well as among middle and higher-level officials who came up through the Party during China’s reform era under Deng Xiaoping,” with an estimated “70 percent” of officials today wanting “reform.” In other words, Party members and cadres are more inclined to find Xi’s Battle of Jiangxiang political messaging more alienating than inspiring. Aside from close allies and perhaps officials whose promotions were accelerated in recent years, Xi Jinping will not be able to find too many CCP members and cadres who will wholeheartedly struggle and sacrifice to achieve his “pie-in-the-sky” political goals.
That being said, Xi’s bleak situation could dramatically reverse if international pressure on the PRC is lifted. For instance, the Biden-Harris administration may eventually show through actions that it favors “cooperation” over “competition” with China, while rolling out policies that destabilize the global situation and set the U.S. on a path of accelerated decline. Also, the international community could overtime fail to push back strongly against the CCP over its malign behavior. Changes in the international climate that fit Xi’s triumphalist propaganda narratives (“the East is rising, and West is declining”; “time and momentum are on our side”) will change the Party and the Chinese people’s perception of him for the better, have a positive impact on China’s domestic situation, and boost Xi’s “quan wei” to unimpeachable levels. But Xi will never realize his “China Dream” as long as America and the world strongly challenge the CCP on all fronts.
SinoInsight 2
Recent days have seen yet more CCP factional struggle-related developments unfold.
April 24
The 50th meeting of the 6th Shenzhen People’s Congress passed a series of resolutions and announced several personnel reshuffles:
- Qin Weizhong (age 50), vice governor of Guangdong Province, replaced Chen Rugui (59, approaching retirement age) as deputy mayor and acting mayor of Shenzhen.
- Zhang Hua (56), full-time vice chairman of the Guangdong Federation of Industry and Commerce, was appointed deputy mayor of the Shenzhen Municipal government.
- Liu Liansheng (57), the Guangzhou Commission for Discipline Inspection secretary and director of the Guangzhong Municipal Supervisory Commission, was appointed deputy director and acting director of the Shenzhen Municipal Supervisory Commission. Zhang Zixing (55), whom Liu replaced at the Shenzhen Municipal Supervisory Commission, retained his position as Shenzhen Municipal Commission for Discipline Inspection secretary. (Factional struggle note: Zhang Zixing was deputy director of the Building Spiritual Civilization Commission of the Guangzhou Propaganda Department from October 1998 to June 2002. After Jiang Zemin launched the Falun Gong persecution campaign, Zhang rose quickly up the ranks, becoming deputy director and executive deputy director [deputy bureau rank] of the Guangzhou Building Spiritual Civilization Commission, then secretary of the Shenzhen Municipal Commission for Discipline Inspection in October 2011.)
- Ren Zongli (53), president of the Chaozhou Intermediate Court, was appointed deputy director of the Shenzhen Municipal Supervisory Commission.
- Zhang Yingjie (53), president of the Guangzhou Railway Transportation Intermediate Court, was appointed vice president and acting president of the Shenzhen Intermediate People’s Court, replacing Wan Guoying (56) who resigned. Wan served as deputy director of the Guangdong High Court Political Department and president of the Zhuhai Intermediate Court before becoming Shenzhen Intermediate Court president and deputy secretary of the Shenzhen Municipal Political and Legal Affairs Commission in July 2014.
- Li Xiaodong, the chief prosecutor of the Guangzhou Railway Transportation Branch of the Guangdong Provincial Procuratorate, replaced the outgoing Wang Yanlin (58) as deputy chief procurator and acting chief procurator of the Shenzhen Procuratorate. Before coming to those positions in April 2015, Wang served as deputy chief procurator of the Guangdong Provincial Procuratorate and chief procurator of the Guangzhou Railway Transportation Procuratorate.
Of the five officials who were replaced, only Chen Rugui is slated to retire. Mainland media and official statements gave no indication where the other four officials were headed after resigning from office; Zhang Zixing will almost certainly be replaced by Liu Liansheng as Shenzhen Municipal Commission for Discipline Inspection secretary in the near future because Supervisory Commission heads usually double up as secretary of Commissions for Discipline Inspection. The aforementioned sweeping personnel reshuffles are unusual, especially seeing how they come after provincial Two Sessions where mass personnel movements often take place.
On the same day, eight other Shenzhen officials in four bureau-level positions were reshuffled (appointed or removed). Previously on March 19, 10 Shenzhen officials in five bureau-level positions were reshuffled. And in August 2020, Liu Guozhou (50), deputy director of the Beijing Municipal Public Security Bureau, was appointed (a promotion) to deputy mayor of Shenzhen, while the heads of the Shenzhen court and procuratorate were replaced.
April 27
The Wall Street Journal reported that Beijing is investigating how Jack Ma got quick approvals for Ant Group’s listing last year. “The central-government investigation, which started early this year, focuses on regulators who greenlighted the initial public offering, local officials who advocated it and big state firms that stood to gain from it. Mr. Ma’s relationships with these state stalwarts are being examined as part of the scrutiny, according to the people” with knowledge of the matter, according to the Journal.
The Journal noted that Shanghai’s STAR Market where Ma planned to list Ant is under scrutiny. Per the Journal:
- “According to officials with knowledge of the process, one of the few people [Xi Jinping] had discussed the STAR plan with before the announcement was Shanghai Communist Party chief Li Qiang … Mr. Li is seen as a rising political star, trusted by Mr. Xi. But as a former governor of Zhejiang province, home to Mr. Ma’s empire, Mr. Li has also been supportive of the entrepreneur and his businesses.”
- “In 2018, the Shanghai government signed a strategic-cooperation agreement with both Ant and Alibaba Group Holding Ltd., the e-commerce giant founded by Mr. Ma. In a meeting with Mr. Ma around that time, according to a release by the Shanghai government, Mr. Li and Shanghai’s mayor both pledged to ‘fully support’ Mr. Ma’s business in the city. Inside Ant, the code name for the company’s listing plans was ‘Project Star.’ And Mr. Ma’s plan to list Ant on the new Shanghai board sailed through the regulators.”
- “The local securities watchdog in Zhejiang spent about a week in mid-2020 reviewing and advising on the IPO plan. On Aug. 25, Ant submitted its listing prospectus to the STAR Market and to the stock exchange in Hong Kong. Less than a month later, Shanghai regulators completed their audit of the application, enabling Ant to jump ahead of earlier applicants.”
- “It isn’t clear whether any individual involved in approving or otherwise facilitating Ant’s IPO will be held accountable, the people familiar with the investigation say.”
April 28
According to a Radio Free Asia report, Zhou Zhengyi, a Shanghai property developer and once the 11th richest man in China, ran afoul of the authorities again over his 60th birthday celebrations on April 18 at a hotel on the Bund.
Zhou was previously sentenced to 16 years in prison in November 2007 on charges of bribery and embezzlement, and is still wanted by the Hong Kong authorities. The Shanghai Municipal No. 2 People’s Intermediate Court that sentenced him, however, released him in September 2020, or more than two years ahead of schedule. Zhou’s criminal background also did not stop hundreds of guests from attending his birthday banquet; he reportedly paid six hosts and presenters from local state broadcaster Dragon Television 100,000 yuan (about $15,438) each to join his banquet. Dragon Television later issued a statement criticizing those staff who attended Zhou’s event, calling it “incompatible with their status and image.”
Even more controversial was theme of the birthday bash, “Do not forget the original aspirations, return the true colors” (不忘初心，回歸本色), that was prominently projected on a giant screen on the main stage and sent out in invitations (see photo above). The words appeared to be a subversion of Xi Jinping’s “Do not forget the original aspirations, firmly remember the mission” (不忘初心、牢記使命 ) slogan, and implied a political challenge. Radio Free Asia cited sources as saying that Party Central had dispatched an investigation team to Shanghai to investigate the ins and outs of Zhou’s birthday banquet, including what “true colors” really meant. Meanwhile, information circulating on the Chinese internet noted that all those at the Shanghai Municipal No. 2 People’s Intermediate Court who signed off on Zhou’s early release will be investigated.
Zhou Zhengyi’s dealings and political associations mark him as a member of the Jiang Zemin faction. In June 2003, he was investigated for acquiring state land and bank loans illegally, but was eventually charged with stock market manipulation in 2004 and sentenced to only three years in prison. Zhou’s light sentence led many to believe that he was protected by Jiang Zemin protégé and Shanghai Party secretary Chen Liangyu. Zhou was also suspected of being involved in the Shanghai pension scandal that implicated Chen and led to the latter’s downfall in 2006.
Zheng Enchong, a Shanghai human rights lawyer whose tussles with powerful local elites led to him being placed under indefinite house arrest, previously told overseas Chinese language media details about Zhou Zhengyi that further affirm his factional alignment. In May 2002, Chen Liangyu had a hand in Zhou obtaining a government reconstruction project to develop 176,400 square meters of prime land in the “East Eight Blocks” (“東八塊”) area of Shanghai’s Jiang’an District at no cost. Zhou would later see that Jiang Zemin’s two sons each got a piece of prime land. Moreover, Zhou served as the Jiang clan’s “white glove” (bagman), running several loan and capital operations in Hong Kong and local banks on the mainland.
The Hu Jintao-Jiang Zemin factional struggle led to investigations against Zhou Zhengyi and others. In May 2003, Liu Jinbao, the former vice chairman and president of the Bank of China (Hong Kong), was investigated by the central government for granting a 1.5 billion yuan load to Zhou. Zhou himself would be officially investigated in June that year, but the dominance of the Jiang faction at the time meant that he got off lightly. The downfall of Chen Liangyu in 2006 and its ramifications for the Shanghai officialdom meant that Zhou would be locked away for a lengthy stint after he was investigated again in January 2007.
OUR TAKE
1. The reshuffling of 18 Shenzhen officials in the municipal government, the courts and procuratorates, and the anti-corruption organs, including several leading officials (yi ba shou, 一把手), amounts to a mini political earthquake for the Shenzhen officialdom.
Some observers believe that the huge personnel shakeup in Shenzhen is linked with the issue of illegal operating loans and housing market speculation in the city last year. This theory is not implausible, but unlikely. After all, Shenzhen and first-tier Chinese cities have had this problem with varying degrees of severity since Wen Jiabao’s 4-trillion-yuan stimulus program was rolled out in 2008. Further, Shenzhen’s recently released official figures for illegal loans are relatively small. On March 19, the Shenzhen Banking and Insurance Regulatory Bureau announced that a “self-inspection” revealed the amount of illegal operation loans issued to be only 51.8 million yuan out of 177.173 billion worth of total loans, while the national figure at the end of March stood at 669 million yuan. The official figures, however, are rather suspicious given the staggering increase in property prices in Shenzhen in recent years. According to a South China Morning Post report, data compiled by mainland real estate agencies showed that property prices in Shenzhen jumped 48.4 percent in February 2021 from two year ago, as compared to 22.6 percent in Shanghai, 9.2 percent in Guangzhou, and 3.8 percent in Beijing. But presuming that Beijing was punishing the Shenzhen officialdom over illegal loans and property speculation, it does not make sense for the bulk of replacements to take place in the political and legal affairs apparatus instead of the economic and financial work departments.
In considering the replacement of numerous political and legal affairs officials on April 24 and the factional alignment of some of the replaced officials, it is possible that the sweeping Shenzhen personnel reshuffles are linked with the Xi-Jiang struggle. Readers may recall that the Shenzhen CCP was behind recent attacks against the Falun Gong in Hong Kong, an unusual development seeing how the Hong Kong Youth Care Association that usually coordinates anti-Falun Gong activity in the city was officially disbanded at the end of December 2020. Put another way, Xi Jinping could be “rectifying” the Shenzhen officialdom to stop the Jiang faction in Shenzhen from worsening Xi’s negative political legacy in Hong Kong while allowing him to target Jiang Zemin’s negative political legacy over Falun Gong with less interference.
2. Shanghai Party secretary Li Qiang spent the bulk of his career in the Zhejiang officialdom, and served in the Zhejiang Party Committee when Xi Jinping was provincial boss in 2005. Li’s subsequent rise during the Xi era suggests that he is a trusted official who is being groomed for higher office, and could potentially join the Politburo Standing Committee in future Party Congresses.
While the Wall Street Journal’s sources suggest that Li Qiang could be probed over the approval of Ant Group’s IPO, they also note that it is unclear whether he will be held accountable. Li’s ties to Xi and political potential indicate that the latter will likely afford protection to the former unless very serious transgressions were made. After all, Li was merely carrying out what Xi wanted with the STAR board, and it is very possible that neither man was fully aware at the time that Ant’s IPO would end up enriching Jiang faction members given that the use of opaque investment vehicles had obscured the company’s ownership.
Xi’s factional rivals, however, will likely seize upon Li Qiang’s role in approving Ant’s IPO to disrupt Xi’s personnel arrangements and gain advantages in political horse trading ahead of the 20th Party Congress. For instance, they could count Li’s “transgressions” against him in considering personnel appointments for top positions, or only “allow” his promotion if their candidates are elevated as well.
3. The Zhou Zhengyi case has the potential to blow up big, or may come to nothing.
Zhou’s factional alignment suggests that he is calling for a revival of the Jiang faction in CCP elite politics by displaying the phrase “return the true colors” at his birthday banquet. Investigations will certainly implicate Shanghai’s political and legal affairs apparatus and the Jiang clan. Xi Jinping could conceivably exploit the Zhou case to make serious inroads into the “Shanghai Gang” clique of the Jiang faction, and purge a number of influential Jiang faction members.
That being said, the fact the Zhou Zhengyi was released from prison early, as well as his being able to throw a high-profile birthday bash and brazenly exhibit a clearly defiant message when Xi has been targeting “two-faced persons” and warning against the formation of “cliques and factions,” indicate that the Jiang faction is still very influential. As the Wall Street Journal wrote on Feb. 16, “[m]any of Mr. Jiang’s allies have been purged in Mr. Xi’s anti-corruption campaign, though he remains a force behind the scenes.” Indeed, while Xi has managed to remove numerous “big tigers” and install his own associates like Li Qiang to important positions, he has been unable to rapidly and thoroughly rectify the middle to lower official ranks. It is very likely that the Shanghai political and legal affairs apparatus went around Li Qiang to free Zhou Zhengyi, and Zhou, having deduced the situation, decided to boldly celebrate his freedom with a rebellious political message.
Xi’s recent “education and rectification” campaign targeting the political and legal affairs apparatus appears to be aimed at addressing the aforementioned problem to prevent it from posing an issue to his bid for a norm-breaking third term at the 20th Party Congress. But more permanent solutions to the longstanding challenge from the Jiang faction that will not seriously destabilize the regime are endless personnel reshuffles (particularly of areas known to be Jiang strongholds like Shenzhen), the occasional “rectification” campaigns, and Xi simply outlasting his more elderly rivals.
If Xi moves too aggressively and quickly against his factional rivals, he risks endangering the regime. The Jiang faction still influences the political and legal affairs apparatus (which oversees domestic security), the intelligence apparatus, and the financial sector, and financial risks are likely what will give Xi the most headaches in dealing with his rivals. When pushed to the brink, the Jiang faction could launch “financial unrestricted warfare” to cause economic and financial turmoil in China, and exploit the situation to weaken or sideline Xi. In an April 28 podcast, former CIA senior China analyst Chris Johnson noted that Beijing “keeps running into problems” in defusing financial risks, including challenges with “Alibaba, Tencent, and the platform economy.” He added, “there is a risk that Xi’s political imperative to ‘tighten, tighten, tighten’ on this financial risk thing could cause them to make some mistakes that will have huge consequences for them economically.”
