Simone: This is the biggest power struggle that could decide China’s future for years.
Does this mean Xi Jinping was losing power and was forced to admit his mistakes?
The Communist Party’s 20th National Congress is going to be held in fall. The fight comes down to whether Xi Jinping will get a third term as the top leader of the country.
Tang Jingyuan: The second is that Li Keqiang did not wear a mask in public for many times, and he hardly ever mentioned the zero-covid policy in his speeches.
Li Jun: If Sun and Fu’s people dare to stir things up, Sun’s life could be taken.
Simone: The Party’s conclave is three month away, but the real decisions are being made now.
This is Beidaihe, a coastal resort town on northeast China’s Bohai Sea. Its long beaches are known for their shallow waters and fine yellow sand. Because of its proximity to the capital, Beidaihe is commonly used by the Party’s top leadership, past and present, each July to slip away from the summer heat of Beijing to plan strategies. Although those gatherings are held informally, some of the most important decisions such as the appointment and removal of senior officials are decided in this beach town.
This year, Beidaihe is of particular significance since the Party’s 20th National Congress is going to be held in fall when the new top leadership will be elected. Xi Jinping will or will not resume a third term as General Secretary of the Party, Chairman of the Central Military Commission, and President of the People’s Republic of China. This will be the pivotal event of Chinese politics for years to come. However, the October conclave is just for show. The real decisions will be made now, including at the Beidaihe meetings.
The most important part of the Beidaihe process is, however, the time leading up to it. That is when the real battles take place. The power balance between different factions hangs on the outcome of these maneuvers. And exactly during that time, multiple indications point to Xi under attack by CCP top leadership for many of his policy falterings, appearing forced to cede some power to China’s Premier, Li Keqiang.
On May 11, the Wall Street Journal published an article titled “China’s Forgotten Premier Steps Out of Xi’s Shadow as Economic Fixer.” It says “Frustrations with Mr. Xi’s leadership are building ahead of the CCP’s 20th national congress.” Meanwhile support is rallying around Mr. Li who has been known for his reform-minded economic approach.
The Journal says supporters of Mr. Li include officials with ties to the Communist Youth League, a once-powerful organization that produced past leaders including former party chief Hu Jintao.
Ten days after the Wall Street Journal was published, a primetime news piece from China Central Television, the biggest government owned TV station in China, appeared to support the journal’s position.
CCTV Anchor: On the 25th, the State Council held a national teleconference on stabilizing the economy. Li Keqiang, member of the Standing Committee of the Polibureau of the Central Committee and Premier of the State Council, delivered an important speech.
Simone: At this so-called “Stabilize the Overall Economic Condition” teleconference, Li Keqiang made a few critical points to over one hundred thousand Party officials at the provincial, county, municipal and district levels.
He first claimed that “In some ways, the challenges now are “greater than when the pandemic hit hard in 2020”. Li said “We are currently at a critical juncture in determining the economic trend of the whole year.” He stressed the importance of coordinating virus control and economic development. He laid out the bottomline: The central government will not help the local government. There is a reserved fund for major natural disasters at the central government’s disposal, other than that, the local government needs to take care of themselves.
What’s the significance of this meeting? How is it related to the power struggle in the party? I spoke with Li Jun, a senior Chinese journalist who had been covering the political affairs of the country in state owned Chinese media for two decades.
Do you think Li Keqiang’s 100,000 people conference tells us that Xi Jinping is losing power and Li is replacing him?
Li Jun: I don’t think Li Keqiang’s 100,000 people conference was an indication that Xi’s lost control of power. The most important reason for this conference is that it had to be done. China’s economy is in great trouble, from years of 5 to 7% of growth to almost zero growth in the second quarter this year according to CCP’s own statistics. The actual situation may be worse.
So under such dire circumastance, Li Keqiang had to have this conference. The second reason is that running the economy is Li Keqiang’s job anyway. It is the premier’s responsibility if the economy is in trouble. The third thing we need to know is that Li Keqiang must have obtained Xi Jinping’s approval to hold such a conference.
I don’t think Li dares to challenge Xi Jinping now because it would put him in a dangerous situation. Meanwhile, I think Xi giving Li the permission to hold such a conference is also to put the blame on Li. Li became a scapegoat for the bad economy. So to sum it up, I think it is far-fetched to say that Xi Jinping has lost power since Li Keqiang held this mega conference.
Simone: However, Li Keqiang’s mega conference isn’t the only thing that led people to think Xi is losing power. One month later, Europe had an unexpected visitor.
In mid June, the central government dispatched a special envoy representing Xi Jinping, to Europe for a three-week charm offensive. Wu Hongbo, China’s former Ambassador to the UN was given a clear task: at every stop, Wu conceded China had “made mistakes,” from its handling of Covid-19, to its “wolf warrior” diplomacy, to its economic mismanagement.
This apology tour was made against the backdrop of a dangerously slowing Chinese economy and the quick worsening of the China-Europe relationship partially due to Xi’s support of Putin in the Russia-Ukraine war. Wu made it very clear that Europeans are China’s preferred partners, as opposed to the United States. His bottom line is: China will always be China, a country of growing significance and economic opportunities for Europe.
Xi Jinping’s special envoy went on an apologizing tour in Europe. Does THIS mean Xi Jinping was forced to admit his mistakes?
Li Jun: Are you saying Xi admitted he was wrong? I don’t think that’s what the CCP members do. They would only appear to admit they were wrong when they were in crisis to avoid punishment. In fact, I think Wu’s trip was Xi Jinping’s damage control to head off the crisis before the Party’s 20th National Congress so he could be re-elected smoothly. Otherwise, I don’t believe he would send his representative to court the Europeans or the international community.
In fact, this is not the first time the CCP admitted its mistakes. In the early days of reform and opening up, the CCP invited American politicians to visit China. It conceded that the CCP’s previous path was mistaken. Now we will embark on a path to develop the economy. Only with economic development, we will be able to move towards democracy and freedom.
We truly want to change. But we are too poor, too backward. We made huge mistakes with class struggles. America should give us an opportunity to correct that mistake. You should help us. It turned out the U.S. politicians truly believed China and did its best to help China. But the result is that China becomes powerful and increasingly totalitarian.
The West should learn its lesson. Do not believe the CCP will truly repent. In fact, What Xi Jinping’s real message for the Europeans was: I am seeking re-election at the 20th National Congress. Do not make trouble for me now. Things will be taken care of after I am re-elected. That’s it.
Simone: But there are also analysts who believe there is a fierce power struggle and a tug of war within the top leadership. Tang Jingyuan who is a senior China analyst and the host of the YouTube channel Foresight Jingyuan Tang is one of them.
Jingyuan Tang: Now that the power struggle between Xi Jinping and the opposition is becoming more and more obvious in the Chinese media, we can see it from several aspects: one is that the number of articles touting Xi Jinping has decreased and his absence from the front page has increased;
the second is that Li Keqiang did not wear a mask in public for many times, and he hardly ever mentioned the zero-covid policy in his speeches, although news showing these facts was often restricted;
the third indicator is that when Li Keqiang urged local officials to rescue the economy at his 100,000 people conference, the state media was touting how China’s economy overall was in a good shape.
From these signs, we can see that there is a battle of routes between “zero-covid policy” and “economic development” at the Party’s top leadership. And this fight is becoming more and more intense and obvious. It shows that Xi Jinping’s status in the party has been strongly challenged, and his position might be as unshakable as it seemed.
This will cast doubt on his re-election at the Party’s 20th National Congress.
We can also see that after Xi politicized the Zero-Covid policy by tying it to his status and governance ability. To a large extent, whether or not the zero-covid policy can continue will become the barometer of Xi’s status in the party.
Simone: And the Zero-Covid policy continued. On May 5th, the People’s Daily published an article to reinstate the unwavering execution of the zero-Covid policy to show Xi Jinping has not conceded in this regard.
Since then, despite the public outcry in Shanghai, Tianjin and Beijing which had been hit with waves of omicron, the local governments have been insisting that their cities be locked down when the virus arrived.
Simone: Besides the epidemic control policy, there are other events that are considered to be closely related to the Party’s 20th Congress and Xi’s position at the top leadership. Most notably three high profile corruption cases. The first case is related to a Chinese-Canadian tycoon who was abducted from Hong Kong by the Party apparatus five years ago.
This is the luxury Four Seasons Hotel in Central, Hong Kong. At around 1am on January 27, 2017, billionaire Xiao Jianhua was reported to be taken away by half a dozen unidentified men from the hotel lobby in a wheelchair, his head covered with a blanket. Xiao did not resist.
Since then Xiao had disappeared from the public eye until 2020 when Xiao’s Tomorrow Group confirmed that their boss was on the mainland and cooperating with the government’s efforts to restructure the conglomerate.
The total worth of the Tomorrow Group that comprised nine companies was up to hundreds of billions of dollars. Its business expanded from securities, futures, to state-dominated industries, including banking, insurance, coal, cement, property and rare-earth minerals.
It was widely understood that the Tomorrow Group had close relationships with top Chinese elite families including Jiang Zemin, Zeng Qinghong, Liu Yunshan, Wen Jiabao, Jia Qinglin and most importantly, Xi Jinping.
In fact, it is considered the common vehicle to help these families to make money and white wash their money. Gao Wenqian, a CCP historian, once said that whoever controls Xiao Jianhua will have the upper hand in the power struggle within the party since he would obtain the corruption evidence of these elites from Mr. Xiao.
Xiao’s case was put on hold for 5 years until earlier this month when the Canadian embassy revealed that his case would be put on trial on July 4 without consular access.
Why was Xiao put on trial right now? His charges were reportedly reduced to illegal collection of public deposits. What does this mean?
Li Jun: The Westerners do not know Xiao Jianhua. Who is Xiao Jianhua? He is the one that managed the money for Jiang Zemin, Zeng Qinghong, Jia Qinglin and many other powerful families in the CCP.
We call people like Xiao the White Gloves. He knows many secrets of these powerful families. He also worked with these families to oppose Xi. For example, he was behind the stock market crash in China in 2015, which cost a damage of 2.7 trillion yuan or $450 billion dollars.
He had committed serious crimes, but why was he able to get away with it? Some people say this shows that Xi is losing power and that was Xi’s concession to his opposition. In fact, this is not the case.
I think the reason his crime was reduced to illegally collecting public deposits is because Xi Jinping was trying to show that Xiao Jianhua was very cooperative: “he told us everything”.
These powerful families’ dirt is in my hands. I have reduced Xiao’s sentence to show good will to those families.
That is to say, if these families do not stir up trouble for me before the 20th national congress, I will keep you safe. But if you mess with me, I have your dirt in my hands, I will destroy you under the name of corruption. I think this is what Xi Jinping meant.