Xi’s Jiang Dilemma

LAST AUGUST, RUMOURS circulated that former but still-powerful President Jiang Zemin, then just turning 89, had been placed ‘under control’ — a measure to restrict his freedom of movement for a while.

Jiang (seen left above) slipped from public view and it was being said that this was a prelude to President Xi Jinping moving against the man who had been instrumental in elevating him to the top leadership positions, but whose desire to rule from retirement remains the greatest constraint on Xi’s political supremacy.

Jiang led the Party from 1989 to 2002, but has remained one of the most politically powerful actors since. Before retiring, he appointed acolytes to key positions and let them establish varying degrees of autonomy from the formal leadership, particularly in the security apparatus.

With Zhou Yongkang, as head of the security services, and Guo Boxiong and Xu Caihou, in place as vice-chairmen of the Central Military Commission, the Party agency that controls the PLA, Jiang had more sway over the military and the security services than the man who succeeded him as Party boss and president, Hu Jintao. And he had enough power in within the Party to promote Xi over Hu’s favoured successor, Li Keqaing, who had to settle for being prime minister.

Once in the top positions, however, Xi showed more determination that Hu to shake free of Jiang’s controlling hand. Xi’s anti-corruption campaign was directed against many associated with Jiang’s Shanghai faction. Zhou, like Xu and Guo, three of the biggest ‘big tigers’ snared, were purged and expelled from the Party. One way to view that is as a rooting out of the parallel power network Jiang had established and restoring the leadership’s centralised control.

Rumours are circulating again that Xi may now feel political secure enough to move against the biggest tiger of them all, Jiang himself. This, the word is, would not be another round of control, but a prosecution for corruption.

Xi’s frustration with what he perceives as Jiang’s hinderance of his political control and economic reforms (which Xi sees as critical to the Party’s success in the existential struggle in which he believes it is engaged, but which would financially disadvantage many members of Jiang’s ‘Shanghai’ faction) is well known.

This, rarely, bubbled into public view when an editorial in the People’s Daily referred to former leaders who prevented their successors “rolling up their sleeves and doing bold work” and sniped at leaders who, “being unhappy to retire … do everything they can to extend their power”. Most readers would have quickly parsed the list of ‘former leaders’ to one.

Darker minds talk about conspiracies by Jiang’s supporters to overthrow Xi. Meanwhile, newly published writings by Xi carry a similarly coded warning that even ‘super-emperors’ should not be spared from the anti-corruption campaign.

Prosecuting Jiang would carry enormous risks for Xi. For one, it would sweep away the unwritten promise of immunity for former Party leaders that has allowed a leadership succession every decade.

Xi might then feel he would have to hold onto power beyond the customary ten years. That and the vacuum created by ripping up the old political rules that delivered a steady escalator of professional advancement and personal enrichment could trigger a revolt in a Party where morale at many levels is already fragile.

However, Xi is also time boxed. At the 19th Party Congress next year, the new generation of leaders — Xi’s heirs — could be expected to be nailing down their promotions for the top jobs which are due to rotate in 2022. If Xi is to move openly against Jiang, he will need to have done so — successfully — before then.

The calculation, though, is finely balanced.

The purges and Xi’s reorganisation of the PLA have diminished Jiang’ s influence in the military. That will have choked off some of the ‘pay for promotion’ that has enriched the Shanghai faction, just as the anti-graft probes into the state oil industry have closed off another honeypot. But it persists in the Party, including in the Politburo — which makes the promotions at the next Party Congress so critical. Taking Jiang down now would cement Xi’s absolute grip on power from the Congress on.

However, it would also risk splitting the Party and perhaps fatally damage it at a time when a slowing economy makes it especially vulnerable to social unrest, particularly if the newly affluent middle class starts to feel the effects.

Xi may also reckon that he need not take the risk; that he has taken down enough of Jiang’s inner circle to have undercut Jiang from below, and that Jiang will finally give up the game knowing Xi has the evidence to charge him whenever he chooses.  And there is always the alternative of hoping that age and infirmity do the job for him.

Beside The Seaside, Beyond The Grave

Mystery surrounds this year’s annual Beihaide meeting. Mystery surrounds every Beihaide meeting. It is a secretive, closed-door gathering of past and present senior officials who turn up at the salubrious Hebei seaside resort around August 10 each year.

There are unconfirmed reports that this year’s meeting was cancelled or that it was held early, ostensibly to accommodate preparations for President Xi Jinping’s visit to Washington next month. Most likely it has been scaled back and downplayed in importance this year.

The traditional significance of the meeting is that it allows the leaders of the factions and interest groups within the Party informally to discuss policy in a way that both ensures collective buy-in and brokers the constraints on the actions of both the top leadership and those not supporting their policies.

Beihaide meetings can bring final consensus to thorny policy questions. The ending of the one-child policy followed a Beihaide meeting and, our man on the seashore assures us, a lot of the questions about the public face of dealing with the disgraced Bo Xilai were fixed there.

This year’s agenda, as far as anyone knows, was meant to include approval of the draft 13th five-year plan. That would already have been agreed in outline by the Politburo but the Beihaide meeting would set the tone for the priorities and pace of implementation that will be contained in the final draft to be presented to the Party Congress plenum in October for rubber-stamping.

Similarly, discussions would likely be held on how to deal with the economic slowdown, reforming state-owned enterprises (and their embedded vested interests), and how far  Xi’s crackdown on corruption should be allowed to run in the current economic circumstances.

However, most critically, Beihaide has provided an effective forum for former leaders to continue exerting power and influence long after they have retired from office. Former President Jiang Zemin would be a prime example, and one who the very pinnacle of official mouthpieces, the People’s Daily, obliquely suggested should stay retired from active politics.

It is an open secret that Xi has found Jiang an obstacle to his extension of control over every aspect of the party, government, and state. Xi is said to be annoyed that the excesses of Jiang’s drive for untrammeled economic growth when he was president are having to be cleaned up on his watch, from corruption and cronyism to environmental degradation. It is no accident that many of the biggest tigers snared by Xi’s anti-corruption campaign have connections to the Jiang faction.

Bringing down a former president would be a reach too far, even for Xi, who may also be betting that time will do the job for him. Jiang is 88, and indeed rumoured on more than one occasion to have died.

Much of the political turmoil that seems to be churning at the top of Chinese politics despite the official narrative of Xi’s consolidated grip on power may best be explained by Jiang trying to secure the legacy of his Shanghai faction come the day when he has to wield his influence not from beside the seaside but from beyond the grave.

The loyal Politburo members Jiang had left in place after he left office in 2002 were certainly an impediment to scaling back of the state-owned-enterprise-led model of infrastructure investment when Xi’s predecessors, Hu Jintao and Wen Jiabao, first tried. Their influence has since waned and Xi has sought to diminish it further. The question is whether it will survive at all once Jiang is gone.

China’s Party Factions Prep For The 2022 Leadership Succession

The Jiang Zemin-led Shanghai faction’s predominance among the members of China’s new Politburo standing committee at the expense of outgoing President Hu Jintao’s has been widely noted, including by this Bystander. It seems a throw back to an earlier generation of Party leadership. In a sense it is. Elite, conservative state capitalists again dominate the inner sanctum of power. But the change is by no means permanent, to our eye. Hu’s faction, rooted in the Communist Youth League, is much more prevalent among the Politburo’s 25 members, a de facto layer below the standing committee, and, a rung of power below that, among the 376 members of the Central Committee, which has also taken on a distinctly younger look.

We count at least nine Politburo members in or aligned with the Hu faction, a number Jiang’s faction cannot muster. The disparity in the Central Committee is even greater. Hu’s  proteges are also well represented on the Party’s Central Military Commission, which oversees the PLA. Such influence is likely to have been the price Hu extracted for giving up the committee’s chairmanship at the same time as he relinquished his Party post. It may also have given him some surety that that would make it more difficult for hardline, dissident elements of the military to move against either the people or the Party in the event of some breakdown of social order.

Hu’s proteges are also more broadly represented in the so-called sixth generation of leaders coming along behind those being ushered in as China’s fifth generation under new Party general secretary and President assumptive Xi Jinping. Five of the seven members of the Politburo standing committee hit retirement age at or around the time of the next Party Congress in five years time. Jiang himself is already 86. Prominent Hu loyalists and proteges such as Li Yuancho, the head of the Party’s organization department and  Wang Yang, the 57-year old Guangdong party boss, both of whom failed to get promoted to the standing committee this time but retained Politburo membership, may feel their time will come again then, especially as the sixth generation of leaders will be starting to stake out their ground then for 2022 leadership transition.

It is early days, but Inner Mongolia party boss Hu Chunhua and Sun Zhengcai, newly appointed as party boss in disgraced Bo Xilai’s old stamping ground, Chongqing, are being marked out to succeed Xi and prime minister assumptive Li Keqiang, respectively, in 2022. Hu Chunhua is a Hu Jintao protege and Sun is allied to outgoing prime minister Wen Jiabao.  To our mind, that means that the factional in-fighting that marked the run-up to the leadership transition now underway will continue, if not as virulently as earlier this year. Factional jockeying for power is part of the warp and weft of China’s elite politics. Xi will need to move decisively to establish his authority, impose unity, and, perhaps, establish his own faction in the vacuum that Jiang’s looks likely to leave.

China’s New Gang Of Seven

Men in Black: Xi Jinping (C), Li Keqiang (3rd R), Zhang Dejiang (3rd L), Yu Zhengsheng (2nd R), Liu Yunshan (2nd L), Wang Qishan (1st R), Zhang Gaoli (1st L).

We now have the names of the seven men who will run China for the next decade, the new Politburo standing committee, arguably, the most powerful septet in the world. Xi Jinping, long the heir assumptive as paramount leader, heads, in order of precedence, Li Keqiang, the presumptive prime minister; Vice Premier Zhang Dejiang, the man sent to clean up Chongqing after Bo Xilai’s ousting and who looks set to become head of China’s rubber-stamp parliament; Shanghai party secretary Yu Zhengsheng; propaganda chief Liu Yunshan; Vice Premier Wang Qishan, the economic reformer being shunted off to be the Party’s disciplinarian; and Tianjin party secretary Zhang Gaoli, the most pro-reform member of the standing committee after Wang.

A first reading of the list suggests that the security and propaganda interests have held their ground while the economic reformers have lost some. The important calibration, though, is between the Party’s factions. The list, close to what was expected, bears a heavier than expected stamp of former president  and leader of the Party’s Shanghai faction, Jiang Zemin, at the expense of his successor President Hu Jintao, whose power base lies in the Party’s rank and file organization, the Youth League. Yu Zhengsheng, Shanghai party secretary, makes the final cut, pushing out Li Yuancho, the head of the Party’s organization department and a Hu loyalist. Wang Yang, the 57-year old Guangdong party boss and a Hu protege, also didn’t make the cut, but his promotion had faltered in earlier political horse trading. His losing out may have been the price Hu paid for Bo’s ousting. Both he and Li were identified with political reform.

Most significantly, to this Bystander’s eye, is that Xi takes over the chairmanship of the Party’s military commission, and thus oversight of the armed forces. Hu was expected to hold the post until the end of the leadership transition in 2014 and thus give himself a political base to be a power behind the throne once he yielded his Party and state jobs.

This is a line-up designed to keep a tight lid on China’s development over the next decade. It is not one to to take political or economic risks in a period in which the country will grow less fast than it has for the past three decades and which will face the challenges of dealing with a rebalancing of the economy at home and finding a place for itself in the world abroad. Several of the new leaders have deep roots in state-owned companies and infrastructure investment. The vested interests have circled their wagons.

Jiang’s presidency was marked by a spate of bold economic reforms without any substantive movement towards political reform. China has developed to a point since where a repeat of that formula may just not work. No country has become rich without developing good-quality institutions to support the rule of law, sound governance and political accountability. Without that there is political instability, government inefficiency and the prevalence of corruption. The new leadership has set out its stall in a bet that it can tackle those three challenges without giving up the Party’s monopoly on power. It is a brave bet.

Footnote: Xi and Li are the only two members of the new Standing Committee in their fifties. The other five are all 64 and up. Given that Politburo standing committee members generally retire at 70, it may be only Xi and Li of the fifth-generation leaders who serve two five-year terms.

Jiang Zemin Redux

The men in the middle that matter: Hu Jintao and Jiang Zemin

A vignette of the reemergence of former President Jiang Zemin at the heart of the highest levels of Chinese politics: The opening of the 18th Party Congress was marked by loud–thunderous is the word the headline writers would have used–applause for the arrival of President Hu Jintao, the first top leader to make his entry. Behind Hu was Jiang, now 86, hair dyed what is described as walnut brown, and far from having passed on to that great standing committee in the sky, as had been rumored last year. Then came the rest of the Politburo standing committee. It was plain to see who were the two most important men in Chinese politics.

A man who has been out of office for more than a decade remains not just a Party elder but a power broker. The likely line-up of the new Politburo standing committee to be unveiled, finally, in less than a week bears, as we noted earlier, Jiang’s imprint.  He has a frenemy relationship with Hu. Both men represent powerful factions within the Party, Jiang the Shanghai group and Hu the Youth League (not that those are the only two overlapping and interweaving sets of interests in the Party that straddle its evershifting fault lines). Jiang’s longstanding patronage of paramount leader apparent Xi Jinping was instrumental in Hu changing horses from his original choice for his successor, Li Keqiang, who rose through the Youth League. And Hu doesn’t look to have got all the allies he would like on the final list for the standing committee to help cement his own future power from behind the throne, particularly if  Wang Yang, the reformist 57-year old Guangdong Party boss, is passed over as word has it that he has been.