The opacity of China’s one-party authoritarian political system encourages speculations at any given time. As we approach this autumn’s 20th Party Congress — the most significant political event in Chinese calendar that comes every five years — it is natural that conjectures would intensify, and more than authoritative insights we’d have a volley of commentary and reportage that relies on scrutinising the leaves of tea or any other beverage one may find.
Amid a China grappling with economic woes and a traumatic ‘zero-Covid’ strategy, most of it due to Xi Jinping’s masochistic policies, we find speculation rife that the Chinese president is in trouble. Billionaire George Soros says Xi’s third-term dreams are up in smoke due to his Covid mishandling, some say the “collective leadership system has made a comeback”, disharmony within China’s top leadership has led to policy paralysis, premier Li Keqiang has stepped out of Xi’s shadow and now poses a credible threat to the Chinese president.
It is being said that faced with a strong internal pushback from rival factions and party elders — concerned over his self-harming economic and Covid policies and unambiguous courting of Russian president Vladimir Putin — a weakened Xi may be left with no choice but to negotiate on installing members of his faction at the Poliburo Standing Committee (PBSC) and forced to suspend his ideological crusade against businesses to remain on course for a third term.
This prevalent narrative demands scrutiny. It has solidified in recent times mainly owing to three recent developments.
First, the 2022 Government Work Report, released by Chinese premier Li Keqiang on 5 March, gave a ringside view of the Chinese economy and its priorities ahead. The report pegged China’s projected GDP growth at 5.5 per cent, much higher than IMF’s revised estimates of 4.4 per cent, laid bare the difficult circumstances that China finds itself in — both internally and externally — and stated that “to fulfill the development goals and tasks for the year, we should pursue prudent and effective macro policies, micro policies that can continuously energize market entities, and structural policies that facilitate smooth flows in the economy.”
Notably, the report mentions Xi’s pet theory of ‘common prosperity’ not even once, takes a technocratic approach to deal with China’s economic challenges and announces key policy manoeuvres to boost business sentiment and consumer spending, both of which have taken a thrashing due to Xi’s strict lockdown strategy against a ‘devil virus’, and his attempts to rein in the real estate and tech sectors.
Critics have noted how Xi’s ideas — such as third distribution system — are absent in the document. The emphasis on managing China’s day-to-day economic affairs seems to have shifted, going by the thrust of the report, from fixing inequality “to save struggling private micro, small and medium-size companies, Li’s sphere of activity,” observes Asia Nikkei.
The second development was a rare videoconference held on 25 May by premier Li Keqiang, attended by over 1,000 senior officials from across the nation, where China’s second senior-most leader explained that the condition of Chinese economy was precarious and “the difficulties, in some areas and to a certain degree, are even greater than the severe shock of the pandemic in 2020,” according to a translated CNBC report.
Xi is understood to have acceded to the meeting once other senior members of the PBSC warmed up to the idea but interestingly, state media’s coverage of the event — a rare and significant affair given the urgency of the cause, the scale, seniority, and profile of attendees — was scant, possibly under orders from the propaganda division of the Chinese Communist Party. While Li addressed the conference, it was also presided over by vice premiers Han Zheng, Sun Chunlan, Hu Chunhua and Liu He.
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Li delivered a blunt warning to officials that Chinese economy will crash if enough stress is not given on economic revival, while indirectly putting down the obsession with zero-Covid policy. “We must have a firm grip over the overall situation (of the country) and avoid ‘focusing on only one goal (单打一, dandayi) and imposing rigid uniformity on policies (一刀切, yidaoqie)’,” said Li, according to Willy Wo-Lap Lam.
This has triggered fervent speculation that the star of the Chinese premier is on the rise and Xi is facing a pushback to his authority, or at least the Chinese president has arrived at a settlement to take a backseat and allow Li to fix economic woes.
According to a transcript of the call reviewed by Wall Street Journal, Li reportedly “warned that growth could slip out of a reasonable range and urged local officials to spare no effort to avoid a contraction in the second quarter” and “highlighted the importance of resuming manufacturing activities, saying that supply chains must be protected.”
Li also said that inspectors and oversight teams will be sent across the nation “to police any attempts to inflate economic statistics,” indicating that the menace that harms the reliability of China’s economic data, is real and rampant.
The third significant development, coinciding with the two above, is the CCP leadership’s issuing of recent directives to young as well as senior and retired cadres of the party, asking them to remain loyal, abide by party discipline, adhere to party commands, and watch what they say in public.
In an article published on 16 May — points out China watcher Jayadeva Ranade in The Tribune — CCP Central Committee’s (CC) Organisation Department “listed 10 points for the younger cadres to ‘better’ themselves. Among them, it urged the cadres to remember that to ‘struggle is better than enjoyment’; it is better to depend on skill and not luck; it is better to be more honest than to engage in speculation; and it is ‘better to rise on the back of effort, and not the family background’.”
For senior cadres, the message was starker, indicating that factional bickering and discontentment with Xi’s policies, style of work and his ambition to achieve the status of the Great Helmsman are now spilling over onto the public domain. As Xi looks to seal his third tenure as Communist Party chief and Chinese president, he seems to have become intolerant to even internal grumblings.
There is no space for mild or even indirect criticisms. Former Chinese ambassador to the US, Cui Tiankai, in his keynote address last December took a dig at China’s ‘wolf warrior diplomacy’ that Asia Nikkei reports was peppered with words like “careless”, “incompetent”, and “attracted tremendous interest in Chinese political and diplomatic circles.”
More recently, retired career diplomat Gao Yusheng’s scathing remarks, published in the form of an article, was quietly scrubbed from the Chinese internet because the 75-year-old had chastised Putin for invading Ukraine.
To ensure uniformity of thought, the CCP General Office in an internal “opinion” that was made public only on May 15 as a “recent event” and was subsequently carried on the front page of party mouthpiece People’s Daily, said, “retired cadres and party members, especially those who have held leadership positions, should strictly abide by the relevant discipline rules, shall not arbitrarily discuss the major policies of the Party Central Committee, shall not spread negative political remarks, shall not participate in illegal social organization activities, and shall not use the original authority or positional influence for the benefit of oneself and others. We must resolutely oppose and resist various erroneous ideological trends, and resolutely oppose hedonism and extravagance.” (via Google Translate).
The “opinion” also carried a warning. Those in violation of it “will be severely punished”. The directive also instructs senior serving or even retired cadres to declare and divest their overseas assets ostensibly to avoid western sanctions.
Taken together, along with Xi’s regulatory assault on big tech, recurrent, brutal lockdowns that have hammered the economy, youth unemployment crisis that has left “tens and millions jobless” with even skilled tech workers struggling to get or hold onto a job — suddenly it seems Xi is under considerable pressure.
As professor Minxin Pei is quoted as saying in Washington Post, “What is unusual this time is that China as a whole is doing poorly ahead of a historic Party Congress… Its economy is in terrible shape; the zero-covid policy looks increasingly untenable; and China’s relations with nearly all Western countries are at historic lows. This of course does not reflect well on Xi.”
It does seem that Xi is under pressure, but the key question is, will that jeopardise or even impact his carefully laid plans and trigger a transition battle? Have we seen anything to suggest that the small clique of China’s most powerful elites and their factions turning against him?
There’s no denying that Chinese economy is undergoing a traumatic phase. Small and medium businesses have taken the gravest hit, and a recent online survey of 16,500 small and medium units found that 40 per cent “did not have enough spare cash to last another month”. The problem facing Xi is that China’s issues are structural, and not even a call for an ‘all-out’ infrastructure push is working. For one, the local governments are debt-ridden and whatever gains were made have been wiped out with recurrent lockdowns owing to ‘zero-Covid strategy’.
April numbers were shockingly bad as persistent lockdowns hit manufacturing and retail sectors with Shanghai taking the brunt of Covid curbs and May numbers, published Wednesday, aren’t that great either with factories registering growth but consumptions remaining weak and employment a big concern.
Discontentment is also palpable among the public on Covid norms with Beijing the latest city to “race against time” to contain a “ferocious outbreak”. What kind of regulation are we talking about? Reuters report says, “two buildings housing hundreds of residents in one Chaoyang compound were put under strict lockdown on Sunday after a single positive case,” several businesses nearby put under “temporary lockdown with police tape and security personnel” and a “handful of customers and staff” at a parlour “locked in for at least two days whilst checks were carried out.”
We have also seen reports that Western firms are rethinking their investment plans in China, bankers, fund managers are looking to leave and the Chinese public, fed up with disruptions in their daily lives, are “dreaming of running away”.
The widespread public anger over Xi’s draconian Covid measures, reports of internal dissent and deleterious effect of his policies on Chinese economy, have led some commentators to suggest that economic mismanagement had led Xi to “blink”. Craig Singleton writes in Foreign Policy that China’s “fizzling economic miracle may soon undercut the CCP’s ability to wage a sustained struggle for geostrategic dominance” and the Chinese president “will probably be forced to make key personnel concessions during this fall’s 20th National Party Congress to secure the support needed to guarantee a third term.”
Hal Brands writes that “Xi Jinping’s China is about to give the world an education in the nuances of decline.”
Yet these doomsday predictions on China and indeed, on Xi’s future, must be made with caution. Projections that Xi faces ingrained resistance from intra-party factionalism, or is locked in a battle for control, and that his apparent failures in handling the economy or the pandemic may lead to thwarting of his ambitions are either overblown, or mere wishful thinking.
In fact, the widely prevalent theory that Xi may be forced to bargain hard and make key concessions on admitting his followers into the CCP’s highest decision-making body in exchange for another stint is unsupported by any concrete evidence.
That is not to say Xi’s third tenure remains unopposed or is a given. But the critical mass of opposition needed to engineer such a tectonic shift in the highest echelon of Chinese politics, as of now, simply does not exist. This is partly because Xi — as the party resolution passed during the Sixth Plenum last year showed — has systematically installed himself as the ‘leadership core’ and elevated himself to a status equalling that of Mao Zedong. “Xi is now the Party and the Party is Xi” and to cross swords with him is to go against the party itself. Even if a maverick wishes to mount a challenge, the concentric power structure of the party, and Xi’s creation of a vast patronage network will make such a coup difficult to pull off.
The CCP is such a vast political apparatus that it will, at any given time, host competing interest groups. Such internecine factionalism, even if it miraculously solidifies and coordinates into an ingrained challenge, will still find it difficult to upstage Xi because the CCP chairman has a firm grip on every hard power levers of the party.
As Willy Wo-Lap Lam writes in his column for Jamestown Foundation, “Xi is the only Politburo Standing Committee (PBSC) member with control over the People’s Liberation Army, the People’s Armed Police, as well as the ordinary police and the intelligence establishment. Xi’s confidante Ding Xuexiang, the Director of the CCP General Office, assigns drivers, secretaries and security details to most of the Politburo members and party elders” and also “maintains a surveillance system over civilian and military leaders”.
The central assumption — that Xi in riding roughshod over norms to achieve Mao-like status, harnessing the one-party authoritarian model to his advantage, using purging campaigns to oust political rivals or even in ignoring fundamental principles of the economy and damaging China’s economic model, has committed some sort of moral transgression to warrant an elite backlash — should also be contested.
As Shikha Aggarwal points out in Indian Express, “Xi’s ‘power grab’ cannot become the core reason for the dissenting voices within the CCP to coalesce into an effective opposition against him” because his predecessors were no great believers in norms.
There’s another metric of assessing whether Xi’s power is waning. The upcoming Party Congress will see a giant upheaval in 25-member Politburo and over 200-member strong Central Committee. Among the new faces that are likely to be inducted, the influence of Xi is manifest. Several of Xi’s candidates have been placed in key positions of the party. For instance, Li Shulei, top-ranked vice-president in the Communist Party’s academy and a long-time ally of Xi, has been appointed the No 2 propaganda chief of the party. South China Morning Post says he may even get a promotion to the Politburo.
SCMP also reports that Xu Lin, “a protégé of President Xi Jinping, has taken over as head of the National Radio and Television Administration, which oversees state broadcasting in China.”
Fu Hua, a media veteran and the party’s former propaganda official who places great score on Xi Jinping’s notion of “telling China’s story well” has taken over as the chief of official news agency Xinhua, reports China Media Project.
More importantly, it appears that recent changes in the leadership of party committee in provinces also reflect “prevalence of leaders who advanced their careers in Fujian, Zhejiang, and Shanghai –– all regions where Xi served as a provincial chief. They include 12 province-level Party secretaries and seven governors/mayors. Most of them are Xi’s long-time trusted associates, and some will likely play even more prominent roles in Xi’s third term. Xi’s proteges belong to an array of different age cohorts. For example, several current Politburo members born in the late 1950s will be among the top candidates for the next PSC,” writes Cheng Li in China-US focus.
Moreover, hagiographic references to Xi in official party media is increasingly touching religious fervour. For instance, Le Yucheng, the chief of China’s National Radio and Television Administration (NRTA), insisted yesterday that officials must “focus on the core, maintain the core, and promote the core,” in an apparent reference to Xi, points out David Bandurski of CMP. Xi is also being referred to as “lingxiu”, an elevated designation used only by Mao. It translates to “leader,” but alongside the word “eternal”, the way it is being used in political documents, the connotation is that of eternal leadership. The suggestion is obvious.
Li’s increased media presence and recent prominence, his brave firefighting for economic revival, scarce references to Xi’s ideological agendas in recent party documents have led to speculations of a ‘two-track strategy’ or even policy divergence at the top. It has also been suggested that Xi and Li are engaged in a power tussle.
It can equally be argued that Li, who has confirmed plans of stepping down next March, has deliberately been put forward to fix economic woes so that Xi may effectively insure himself from potential adverse fallouts and allow Li to take the blame. For instance, the Shanghai horror story has been blamed on party secretary Li Qiang while Xi has escaped the blam, even though his close aide was diligently following the ‘great leader’s’ instructions to the T.
Recall that during the early days of Wuhan outbreak in 2020, when China was the global epicentre of the pandemic, it was Li who took centrestage in battling the crisis. Xi was nowhere to be seen and returned to take the credit only when a relative normalcy was restored.
It is also to be noted that while Li has been allowed a greater share of the limelight on economic front, Xi has not acted against the premier’s interests. During the recent tour of Sichuan, for instance, Xi hammered home the message COVID-19 prevention and control should be “efficiently coordinated” with “economic and social development” and current economic challenges should be “resolutely overcome.” This indicates a synergy of messaging between the top two, not a power tussle. It would be a strange point to make for an insecure leader.
Overall, shifts in official discourse, directions of power broking, balancing of interests and actions of leaders point towards Xi’s iron grip over the party, and far from any weakening, the ongoing turbulence is likely to see him emerge even stronger. It would take a brave individual to bet against Xi’s third term in autumn. One suspects Soros, being the shrewd investor he is, won’t put money where his mouth is.
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