◎ CCP factional struggles are “you die, I live” and revolve around the preservation of interests and political legacies.
No date has yet been announced for the Chinese Communist Party’s Fourth Plenum, which was earlier official scheduled for October. We previously wrote that “the timing and agenda of the upcoming Fourth Plenum indicate that the factional struggle in the CCP is very intense, and confirms our earlier assessment of political crisis in China.”
Recent Western mainstream reports of corruption at the highest ranks of the CCP that were released before the convening of the Fourth Plenum hint at escalating tensions in the Party and the development of a three-way factional struggle.
(We strongly recommend that readers revisit our “Brief Guide to CCP Factional Politics” to better follow our analysis of an intricate and potentially consequential development in the current CCP factional struggle.)
The backdrop:
On Oct. 14, The New York Times and German newspaper Süddeutsche Zeitung published articles about Deutsche Bank’s efforts to become a “major player in China” by building “guanxi” (關係) with the family members of high-ranking CCP officials. Deutsche Bank’s guanxi-building involved giving expensive gifts to senior officials, offering their children jobs at the bank even when they failed to meet the company’s hiring standards, and other moves.
Most of the officials mentioned in the Times’s article whom Deutsche Bank sought to influence are members of the Xi camp, including former PRC premier Wen Jiabao, incumbent PRC vice president Wang Qishan, and Politburo Standing Committee members Li Zhanshu and Wang Yang. Meanwhile, two Jiang faction members, Jiang Zemin himself and former Politburo Standing Committee member Liu Yunshan, are named in the Times’s piece.
Our take:
1. One of the ways in which the various factions in the CCP try to gain leverage over each other is by leaking damaging information about their rivals to overseas media outlets. These leaks can take many forms and can be obtained in many ways, including reporters suddenly discovering (or perhaps being “allowed” to discover) explosive information that make for news stories that are too good to ignore. Put another way, media outlets may not be aware that they have become entangled in CCP factional struggles by virtue of the information they publish.
Because leaks are the most effective when made public just before major political meetings, it is fair game to be especially skeptical about all news articles published in the aforementioned period that reveal damaging information about the CCP elite, and the information in those articles should be assessed for its impact on the “you die, I live” factional struggles in the Communist Party. For instance, damaging information about the Wen Jiabao family and the Xi Jinping family reported by Bloomberg and The New York Times only weeks before the 18th Party Congress in November 2012 helps the Jiang faction and weakens the Xi camp as it prepares to carry out a major political reshuffle that would change the power balance in the CCP elite.
2. The information released by the Times and Süddeutsche Zeitung in their Oct. 14 articles is damaging for both the Xi camp and the Jiang faction. One key Jiang faction member, however, is an indirect beneficiary of the damaging information—Zeng Qinghong.
Zeng, the former PRC vice president and Politburo Standing Committee member, is Jiang Zemin’s longtime political enabler and number two in the Jiang faction. The Zeng clan has also long swayed the CCP’s intelligence apparatus, a situation that resulted in the Xi leadership receiving flawed intel and struggling to get its orders past the gates of Zhongnanhai (“政令不出中南海”).
Based on our research, Zeng Qinghong is the only top Jiang faction member who has hardly any damaging information released about him in the overseas press since the Wang Lijun incident broke out in early 2012. If anything, Western reports about Zeng during the Xi era tend to depict him as a sort of reformer whose liberal-leaning policies were unfortunately reversed after 2008. Also, we have observed that Zeng’s overseas agents have in recent years been finding opportunities to attack Xi Jinping and occasionally Jiang Zemin and his clan while largely singing praises of Zeng.
CCP factional struggles are “you die, I live” and revolve around the preservation of interests and political legacies. Thus, we have reason to believe that Zeng Qinghong could very possibly be taking advantage of political crisis in the regime and an unfavorable international climate to dispose of both Xi Jinping and his political patron Jiang Zemin while safeguarding his and his supporters’ interests. To that end, Zeng or his proxies could engineer a way to oust Xi in the name of “restoring order from chaos” (“撥亂反正”) and then hold Xi and Jiang entirely responsible for the communist regime’s many crimes (persecution of Uyghur Muslims, persecution of Falun Gong practitioners, live organ harvesting, national-level theft and cyberhacking, militarism, etc.). With Xi, Jiang, and their close supporters punished, Zeng could set up his proxies in top office and even dissolve the CCP and transition China to a democracy as a way of simultaneously putting the United States and the world at ease and avoiding international scrutiny of his own crimes. A democratic China ruled by Zeng Qinghong and his cronies, however, would likely be in name only and come to more closely resemble the authoritarian Putin regime in Russia, if not worse.
International interests who previously established guanxi with Zeng and his cronies could assist them in ousting Xi and seizing power, particularly at the onset. In the long run, however, these international interests may not necessarily benefit from their connection, especially if the guanxi becomes a political liability for the new Zeng regime. All in all, a leopard never changes its spots, and a Zeng regime would unlikely too dissimilar to the CCP regime that preceded it.
Get smart:
A three-way struggle between the Xi camp, the Jiang faction, and Zeng and his cronies would lead to conflicting messaging and signals emerging from the PRC. Businesses, investors, and governments must closely track the CCP factional struggle and improve their understanding of the various factions to avoid misreading the signs, sidestep risks, and seize hidden opportunities as political crisis in the CCP hastens the arrival of tremendous change in China.
