Xi Jinping digs in his heels despite mounting setbacks

CHINA: For the first decade of his authoritarian rule over China, Chairman Xi Jinping could do no wrong. Such was his popularity and position of strength that he was allowed to overturn recent conventions by reinstalling himself for a third term in power, and to position acolytes in the upper levels of power. Yet the gloss is starting to wear off as the realities of economic woe and international backlash bite.

Willy Wo-Lap Lam, author of the book Xi Jinping: The Hidden Agendas of China's Ruler for Life, and also a Senior Fellow at The Jamestown Foundation think-tank in the USA, held a seminar exploring Xi's legacy on January 22. Lam assessed that Xi "thinks he is the second, if not the first, most important leader in the communist party pantheon. He definitely thinks that he has outdone Deng Xiaoping in terms of contribution to the party. So he thinks of himself as the 21st-century Mao Zedong."

Lam predicted Xi likely would not seek to reign beyond a fourth five-year term, although at that time he might remain a power behind the throne by retaining the chairmanship of the all-important Central Military Commission. When the hard-nosed Xi came to power in 2012, there were two major factions in the Chinese Communist Party (CCP). Lam pointed out: "The big thing is, Xi managed to elbow aside, to at least partially demolish, these two major factions in the party." Indeed, by the time of the 20th Party Congress in September 2022, around 80-90 per cent of its members belonged to the "Xi family army," underscoring the hugely successful Machiavellian-style political intrigues in which Xi seems to have particular aptitude. However, he is not adored by all in the CCP. Lam explained: "I think Xi Jinping in his 11-year career has made a much larger number of enemies than Jang Zemin and Hu Jintao. But the fact of the matter is, Xi Jinping was so successful in his first ten years... His most potent enemies now, I think, consist of rebel elements of the so-called second-generation princelings."

However, Hong Konger Lam said that none of these rebels or remnants of factions such as the Shanghai Gang have been able to pool their resources together and coalesce a united front against Xi. Even as China's relationship with the USA has dipped to its worst since Henry Kissinger's visit to China in 1971, "There might be people who are glad that such negative events are happening so that they have enough ammunition to use against Xi. But for Xi Jinping himself, he doesn't pay much attention to economics or geopolitics." Nonetheless, Lam noted "there have been very strange events in the past half year". He gave the example of two state ministers and top leaders of the People's Liberation Army Rocket Force (PLARF) disappearing.

Indeed, the following members were expunged from the party in one fell swoop at the 7th Session of the 14th National People's Congress (NPC) in late December 2023: Lieutenant General Zhang Zhenzhong (deputy chief of staff of the Joint Staff Department and a previous deputy commander of the PLARF); Lieutenant General Zhang Yulin (deputy minister of the Equipment Development Department [EDD]); Rao Wenmin (EDD representative to the 14th NPC); Vice Admiral Ju Xinchun (naval commander of the Southern Theater Command); General Ding Laihang (commander of the PLA Air Force until September 2021); General Li Yuchao (Commander of the PLARF); Major General Lu Hong (Director of the EDD, PLARF); Lieutenant General Li Chuanguang (chief of staff and deputy commander of PLARF); General Zhou Yaning (former commander of the PLARF).

This list is staggering in terms of the breadth and depth of those that Xi is rooting out. Lyle Morris, Senior Fellow for Foreign Policy and National Security at the Asia Society Policy Institute's Center for China Analysis, noted: "The biggest takeaway is these officers' connection to [former Defense Minister] Li Shangfu, and their ties to the PLARF, Equipment Development Department and the space program. This amounts to one of the largest purges in the PLARF and EDD in decades, all tying back to Li." Lam noted that Li Shangfu's disappearance had nothing to do with an alleged illicit affair with Phoenix TV anchor Fu Xiaotian. Censors allowed juicy titbits to remain on social media, but this was designed to distract the populace from the real reason, whatever that might be. Morris continued: "Something major must have occurred to precipitate this kind of purge. Two likely scenarios are a major corruption scandal or an intelligence leak. A third unlikely scenario, but which cannot be completely ruled out, is a political rivalry to Xi's power base within the PLA (i.e. a soft coup)."

By elevating the Second Artillery Force to the PLARF as a full service of the PLA, Xi also succeeded in creating an entirely new faction involving China's aerospace defence sector, where vast amounts of money have been pouring in. With so many from the PLARF caught in Xi's net, perhaps some connected individuals grew aspirations beyond what the Chinese leader thought prudent. With all these recent arrests, Lam spoke of a "partial demise" of this faction, one in which China's military-industrial complex is heavily implicated. Technocrats like Wu Yansheng, (chairman of the China Aerospace Science and Technology Corporation [CASC]); Wang Changqing (deputy manager of the China Aerospace Science & Industry Corporation [CASIC]); and Liu Shiquan (chairman of the Board of CASIC). The churn seems to spread further and further, and yet the CCP does not feel the need to explain any reason for all these detentions. Another to be axed is Wang Xiaojun, former president of the China Academy of Launch Vehicle Technology.

Such is the trauma, that Xi has delayed the 3rd Plenary Session of the 20th Central Committee. Lam opined, "Xi Jinping is still scratching his head about the people who will replace the now disgraced" members. In a speech at the 20th Central Commission for Discipline Inspection on January 10, Xi emphasized that after ten years of unremitting anti-corruption, the struggle has "achieved an overwhelming victory and has been comprehensively consolidated". However, he immediately contradicted himself by saying "the situation remains grim and complex...We must have a clear understanding of the 'new situations and new trends' in the fight against corruption, as well as the 'conditions that create corruption problems'." In other words, corruption remains a serious problem, and victory is far from Xi's grasp. If nothing else, these shocking revelations raise serious questions about Xi's ability to select and manage high-level personnel in the PLA and CCP, most of whom he personally promoted. This disappointment will surely amplify Xi's sense of paranoia. "So now, all these strange events in the past few months, they beg the question on actually how good Xi is in his ability to manage high-level, top-echelon targets," Lam pointed out.

China's economy has caught the contagion too, further deepening Xi's woes. A recent survey by Chinese online recruitment platform Zhaopin found that 32 per cent of white- collar workers reported a wage decrease in the past year. This is just one symptom of a stumbling economy. There are rumors the central government is ready to pump in RMB2 trillion of funds to prop up local administrations in China. According to best estimates, more than 50 per cent of current expenditure of local governments is used just to service interest payments on debts previously run up. Lam said Xi is "by no means a stupid person," and that he realizes foreign direct investment (FDI) is very important for the economy. With China now experiencing negative FDI (i.e. foreign companies are withdrawing money) as the Chinese market loses its luster, it desperately needs foreign money. "Xi doesn't know that much about geopolitics," Lam said, but Xi's leadership has to be given some credit for its sweet talk and numerous assurances to multinational companies. The Jamestown Foundation academic continued: "Regarding the Global South, they were successful in the first ten years of the Belt and Road Initiative when China still had sufficient US dollar reserves, but now the country is desperately short of US dollars." He said China's oft-quoted figure of RMB3 trillion in reserves consists mostly of investments from multinationals and loans made by the Chinese government. Lam said the Chinese government could probably mobilize only 10 per cent of this amount, and much of this has already been spent in propping up the yuan. There are no ballot boxes in communist China, so only two methods exist to evaluate the government's legitimacy. One is the living standards of ordinary people, and the other is nationalism. Because GDP cannot be maintained at 6-7 per cent annually to generate a sufficient trickle-down effect to ensure ordinary Chinese benefit from an improved share of the economic pie, lower growth levels will see the bulk of people's money taken out and confiscated by the privileged classes. The CCP greatly fears popular protests, for it does not truly represent the people. Militias are now being established within state-owned enterprises and even in private companies, their role being to maintain law and order within the vicinity of their enterprises. This reluctant militarization is being imposed by the CCP, and it forms yet another plank in Xi's symbiosis between peacetime and wartime as he urges the nation on to greater "struggle". Lam said the current militarization of the Chinese population under Xi is occurring at "a very disturbing pace". With the economy failing, the only form of legitimacy left is nationalism, Lam explained. "So Xi is now putting undue weight on nationalism, 'the great renaissance of the Chinese people'." Indeed, Xi is simultaneously putting greater emphasis on his alliance of like-minded autocratic states. In a process that started about a decade ago, Russia has become a key brother of China for the first time in its history. Lam continued: "Xi Jinping is obsessed with this old Mao Zedong slogan, 'The East is rising, and the West is declining.' He is unrealistically bullish about the so-called axis of autocratic states: China, North Korea, Russia, Iran, Pakistan and so forth." He said Xi remains optimistic that such an axis of autocracy will grow bigger, and one day outdo the US-led alliance in international affairs. This is one reason why Vladimir Putin cannot be allowed to conquer Ukraine, for it will only embolden Xi. Referring to Russia's invasion of Ukraine and what it means for Chinese intentions for Taiwan, Admiral Samuel J Paparo, commander of the US Pacific Fleet, recently told a Senate Armed Services Committee: "Instead of seeing the Ukraine conflict and deciding this is too hard, [the Chinese] intention...is to take note of the actions of Russia in order to effect a short, sharp conflict that presents a fait accompli to all of the world." Admiral Paparo added that China "is doubling down on their ability to shrink strategic, operational and tactical warning and act quickly". He noted that Russia's failure is "a deterrence in the Western Pacific and directly reassures partners". Thus, "The most decisive thing we can do at the moment is to pass the supplemental [budget] that would fund capabilities for Ukraine to defend itself." Problems are mounting for Xi and for China because of the direction he has taken the country. Yet, "Xi Jinping is not interested in acknowledging a successor," Lam shared, even though there was once speculation that now disgraced ex-foreign minister Qin Gang was being groomed as the next leader. "Xi is convinced that he will live forever, he's convinced that he has the magic bullet or whatever." His self-belief may even stem from a religious ideology, as Lam quoted a Chinese source who alleged that Xi is actually a Buddhist. Xi spent 15 years in Fujian, and this source claimed that Xi became a convert during that time. Allegedly, every time he returns to Fujian, he visits a Buddhist temple there. Whatever the case, Xi seems the type of man who stubbornly digs in his heels the tougher the opposition gets. Unfortunately, he is taking China down a road that many may not agree with, but who are powerless to resist.