Tag: Xi Jinping

  • Has Xi Jinping been reduced to a figurehead?

    China will celebrate the 80th anniversary of the end of the “war of resistance against Japanese aggression” (i.e. what we call VJ day) tomorrow. Given that Japan’s invasion of China started some four years earlier than Japan’s attack on Pearl Harbour in 1941, and cost an estimated 20 to 30 million Chinese lives, this week’s military parade is a major milestone. As the People’s Liberation Army Daily newspaper has explained:

    “One of the highlights is a grand military parade at Beijing’s Tian’anmen Square themed on commemorating the great victory and promoting the enduring spirit of the War of Resistance.”

    Not surprisingly, China is pushing the boat out in terms of its invitation list. It includes 16 presidents and ten other world leaders. Apart from the president of Serbia, Aleksander Vucic, and the prime minister of Slovakia, Robert Fico, European leaders will be notable for their absence.

    Most importantly, the attendance of Vladimir Putin and Kim Jong Un as guests of honor is being heralded as a diplomatic coup for Xi Jinping by much of the West’s media. Thus, the BBC, reflecting its dislike of Donald Trump, has gleefully headlined one of its pieces “Xi shows Trump who holds the cards as he sets up meeting with Kim and Putin.”

    But is it a triumph? Or are Putin and Kim coming to the party to find out if Xi is still running China? Since July this year there have been two conflicting narratives about what is going on in the opaque world of Chinese politics.

    One narrative, largely proposed by new media, notably expat Chinese watchers and academics hostile to China, who rely on discretely relayed inside information, suggests that Xi is now just a figurehead; he is in power but not in office. The other narrative, largely supported by Chinese and western legacy media, reports that nothing has changed; for them, Xi is still the all-powerful authoritarian leader who broke the mould by organizing an unprecedented third five-year term as general secretary of the Chinese Communist party (CCP). Britain’s Economist magazine has recently opined that “there is no immediate threat to Mr. Xi’s leadership.”

    The “Xi has lost power” narrative proposed by the new media world is as follows. At or shortly after the 3rd CCP plenum in July 2024, Xi Jinping, overweight and reputedly a heavy drinker of Kweichow Moutai – the most expensive brand of baiju, a hard liquor distilled from sorghum and wheat – reportedly had a health scare and was taken to hospital. These reports have not been confirmed. But video footage of Xi’s recent trip to Tibet suggests that he is not a healthy man. His wobbling gait was painful to watch.

    In his absence, Xi’s enemies pounced. The coup is said to have been led by the Central Military Commission (CMC) vice chairman Zhang Youxia. This highly regarded military leader, a princeling like Xi, and a rare veteran of military action in the China-Vietnam War, had provided the military backing that underwrote Xi’s taking of a third term of office. Subsequently, their relationship faltered. Seemingly, Zhang had argued with Xi about the advisability of a high-risk military attempt to take Taiwan.

    Xi, who, from his public utterances, seemed to see the re-taking of Taiwan as the fulfillment of his legacy to “restore the nation,” “helicoptered” Fujian clique ally General He Weidong into the co-vice chairmanship of the CMC. Zhang found himself surrounded by Xi’s appointees.

    One narrative suggests that Xi is now just a figurehead; he is in power but not in office

    But now, an isolated Zhang is said to have taken his chance to save his own skin by launching a coup against Xi’s loyalists in the military. Admiral Miao Hua, another member of Xi’s Fujian clique, was suspended in November 2024 and removed from the CMC in June. Even more dramatically, in March, He Weidong disappeared. Strangely, neither of these CMC members seems to have been replaced.

    Over the last year, dozens of high-ranking officers have been dismissed or have disappeared, mainly on grounds of corruption. Albeit an endemic problem in the People’s Liberation Army (PLA) it seems likely that the charges of corruption have been a cover for a purge of Xi’s military allies. Most notable has been the sacking of the generals who led the Rocket Force, which was particularly close to Xi.

    The Chinese leader’s high-profile wife, Peng Liyuan, has also largely disappeared from public view. She is a famous Chinese folksinger whom Xi incongruously promoted to the rank of major general and to a key role in the CMC’s opaque cadre selection committee. General Zhang Youxia was reportedly furious that promotions and appointments in the army were being made by a celebrity singer. As for Xi, he has not attended a CMC meeting for a year.

    Zhang’s alleged move has allowed Xi’s political enemies to come out of the shadows. Hu Jintao, Xi’s predecessor as general secretary, who was shockingly manhandled out of the 20th CCP congress on Xi’s orders, has reemerged as a leading figure in the cabal seeking to overthrow the General Secretary. His liberal Communist Youth League faction is now in the ascendancy.

    In addition, the “princelings,” the name given to the Red aristocracy that emerged from the early political and military leaders of the CCP, have come out in force to criticize Xi’s building of a Mao-style personality cult. These include Deng Pufang, son of Deng Xiaoping, the supreme leader who banned Mao’s personality cult. Deng Pufang’s back was broken when he was thrown off a roof by red guards during Mao’s Cultural Revolution. No wonder that he and many other princelings who were banished to the countryside during the cultural revolution baulked at Xi’s return to Maoist authoritarianism.

    Though Jiang Zemin, former general secretary between 1989 and 2002, died in November 2022, his Shanghai faction continues to have a presence. They are thought to be jockeying for position in case of a restructuring of the Politburo’s current all-powerful seven-man standing committee.

    The factions opposed to Xi are said to have agreed on a few policies. Xi’s Mao-style personality cult must not be repeated; the restoration of a maximum of two five-year terms for a general secretary has been agreed; the CCP will return to Deng Xiaoping’s liberal reform path; and Xi’s foreign policy, which has generated a great deal of pushback in both Asia and the west, should become less aggressive.

    Supposedly not yet decided by the opposition factions is whether Xi Jinping should be replaced immediately or at the 20th CCP congress in 2027. It seems likely that General Zhang would like a rapid resolution of the leadership issue. As the leader of what has, in essence, been a military coup, he knows that his head is on the line. A Xi comeback could end his life.

    By contrast Hu Jintao, for the sake of party stability and public face, would reputedly like Xi to continue as a “figurehead only” leader until the next congress. The situation is complicated by the fact that potential Xi replacements are thought to be reluctant to become CCP general secretary unless they are also appointed to Chairmanship of the CMC.

    Historically, this is not surprising. The only two general secretaries who did not hold the chairmanship of the CMC were sacked from office; Hu Yaobang in 1987 and Zhao Ziyang in 1989. Both these leaders were removed by Deng Xiaoping, who never held the post of CCP general secretary; Deng’s role as China’s supreme leader rested solely on his chairmanship of the CMC from 1981 to 1989 – a clear indication that, in China, the ultimate ring of power is held by the army.

    In July, it was noted that at the dinner held to celebrate the 98th anniversary of the founding of the Chinese People’s Liberation Army, several of Xi’s enemies were seated on top tables. The biggest surprise was the reappearance of General Liu Yuan. After disputes with Xi Jinping, Liu made a dramatic resignation from the PLA in 2015.

    The Chinese leader’s high-profile wife, Peng Liyuan, has also largely disappeared from public view

    Liu is the son of Liu Shaoqi, who succeeded Mao as chairman of the People’s Republic of China. Liu Shaoqi was subsequently arrested and killed during the Cultural Revolution. His crime was to favor liberalization of the Chinese economy. Indeed, during the Cultural Revolution, Mao referred to Liu Shaoqi and Deng Xiaoping as the “number one and number two capitalist roaders.” The reemergence of General Liu Yuan after a 10-year interval seems to confirm the dramatic political shift back to the ‘capitalist roader’ path forged by Deng Xiaoping.

    Given the parallel but opposing narratives of current Chinese politics, China watchers will be fixated on what happens at tomorrow’s military parade. Protocols and placements at the parades and dinners will be analyzed in detail. Some have even suggested the possibility of a coup.

    This seems highly unlikely. Instead, China watchers should wait for the 4th plenum of the 20th congress. It was announced on July 30 that this will take place in October. If there are major changes in the Chinese leadership before the 21st CCP congress in 2027, they are most likely to take place at a plenum session of which there are usually seven during a five-year National Congress term.

    The most talked-about successors to Xi are Hu Chunhua and Wang Yang. Hu, an acolyte of Hu Jintao and his Communist Youth League faction, is a liberal who was surprisingly pushed out of the Politburo’s Standing Committee at the 20th national congress in 2022. Wang Yang, another liberal and a former Standing Committee member, was similarly discarded when Xi embarked on his third term of office.

    These are interesting times in China; perhaps President Trump should have accepted the Chinese invitation to attend the September 3 celebrations after all – if only to get a peek inside the secret world of Chinese politics.

  • The Art of the Dealmaker-in-Chief

    Who really thought Donald Trump’s America was about to join the stampede of first-world powers promising to recognize Palestine at the United Nations? 

    “Wow!” He exclaimed this morning on Truth Social. “Canada has just announced that it is backing statehood for Palestine. That will make it very hard for us to make a Trade Deal with them.” 

    All over the world, commentators convinced themselves that Trump’s expression of concern on Monday about “real starvation” in Gaza meant he was pivoting with global opinion and against Israel. 

    It turns out, however, that Team Trump is not for turning when it comes to the Middle East. Marco Rubio, the US Secretary of State, has accused the countries now embracing Palestinian statehood of falling for “Hamas propaganda”.

    Trump himself would rather focus all his diplomatic energy on trade, a subject about which he has been positively monomaniacal in recent days. He seems very taken with the new title he has given himself – the Dealmaker-In-Chief. 

    “We are very busy in the White House today working on trade deals,” said the President on Truth Social last night. Three hours later, he announced another “full and complete” agreement with South Korea, involving a 15 per cent tariff on them and $350 billion for the US. That’s on the heels of a deal between America and Japan, South Korea’s big rival in manufacturing terms. 

    The real coup for Trump’s trade strategy this week, however, has been the new framework arrangement with the European Union, which he announced on Sunday from his golf course in Turnberry, Scotland. 

    The EU deal is not simply a major breakthrough in and of itself. It’s also, as the US Treasury Secretary Scott Bessent suggested to my colleague Michael Simmons in Stockholm this week, a useful piece of leverage in the even bigger tariff struggle with China. Bessent was in Sweden for another round of negotiations with his Chinese compatriots and, for US officials, pulling Europe more towards a western trading orbit and less towards the east is an essential thing for the future of capitalism and the free world. China and the US appear to have agreed to take another pause from tariff hostilities – the two sides differ over fentanyl chemicals and Beijing’s role in supporting Iran and Russia. 

    It seems that now Russia is playing on Trump’s mind. On Monday, he suggested he would impose tariffs of up to 100 per cent on Russia if the war in Ukraine didn’t end within two weeks. Then yesterday, as he slapped further tariffs on India, he criticized New Delhi for buying up Russian oil and gas. “I don’t care what India does with Russia,” he said. “They can take their dead economies down together, for all I care.”

    Then, in perhaps the most intriguing trade development of the week, Trump declared a brand-spanking-new deal with Pakistan, including an arrangement to invest in Pakistani oil. “Who knows, maybe they’ll be selling Oil to India some day!” he “truthed”. 

    All jokes aside, Trump’s sudden enthusiasm for Pakistan at India’s expense marks a major shift in US policy in the last few years. Under Obama and Biden and Trump, the US state department has tended to prefer Modi’s India.  

    As ever with Trump, his apparent tantrum with India might conceal a subtler move. That’s the art of the Dealmaker-in-Chief. 

    In the last two decades, Beijing has made enormous investments in Pakistan, particularly in infrastructure through its Belt and Road Initiative. In some ways Pakistan has become an extension of China’s empire. 

    But not all Pakistanis relish the idea of being a Chinese satellite-state. And now the thought of Donald Trump suddenly wooing Pakistan’s government – which recently nominated him for the Nobel Peace Prize, funnily enough – will ring loud alarm bells among the highest ranks of the Chinese Communist party. With Trump’s international agenda, scratch beneath the hilariously crazy surface and you find a more serious campaign to isolate China, China, China. 

    This is taken from the latest Americano newsletter. To subscribe click here

  • Trump has gained the upper hand over China

    Stockholm

    This week, the fate of the global economy could have been decided over a Mongolian barbecue in a Stockholm tourist trap. On Tuesday, just 50 yards from Sweden’s seat of government, Rosenbad – where the US Treasury Secretary Scott Bessent and the Chinese Vice Premier He Lifeng had been wrangling over trade negotiations – the Chinese delegation suddenly exited the talks and headed for lunch near the Mongolian buffet place, where they had eaten the day before. Its windows were covered up and a sign announced it would be closed for three days for a “private event.” The Americans stayed behind, making do with salad.

    China, still the factory of the world, remains the biggest test of Donald Trump’s resolve

    The Chinese had left to “report back to the mothership,” as Bessent later put it. But the mothership apparently did not budge. After talks resumed, it soon became clear that no breakthrough agreement had been struck.

    China wanted another extension to its tariff truce with America, which expires on August 12. Bessent said that was a call for his mothership, Donald Trump. The Treasury Secretary seemed to hint that Trump would approve such an extension. “Just to tamp down that rhetoric, the meetings were very constructive. We just haven’t given that sign-off,” he said, diplomatically.

    The problem is that two major issues haven’t been resolved: fentanyl, and the Chinese support for Russia and Iran. On fentanyl, “we seem to have a sequencing problem,” said Bessent, delicately. The Chinese want Trump’s tariffs to be reduced before they take action to prevent the manufacture of the chemicals that make the drug, which killed 50,000 Americans last year. The US side wants things to happen the other way round.

    Moving on to Iran and Russia, Bessent said: “One thing we are not pleased with, I’m sure the President won’t be, but it’s no secret: the Chinese buying 90 percent of Iranian oil. They’ve contributed $15 billion in dual use technology to the Russian war machine.”

    Insiders and Chinese officials kept a nervous eye on Trump’s Truth Social media account for signs of an angry orange eruption. But Trump, returning from Scotland on Tuesday night, sounded sanguine. “They had a very good meeting with China, and it seems that they’re going to brief me tomorrow,” he told reporters on Air Force One. The President appears to be in a better mood than he was in February, when he seemed hellbent on exploding trade relations with the world and especially China.

    On rare earth metals and magnets, Bessent and his Chinese counterparts appear to have made progress, building on previous meetings in London. Other key topics that didn’t make it to the negotiating table were the future of TikTok and a possible meeting between Trump and Xi – “that’s at the leaders’ level”, the Americans said.

    Officials inside the room told me that most of that time was spent playing a civil but pointed game of “My economy’s bigger than yours”. 

    “We had a big exchange – a very long exchange – and briefings on the economies of both countries,” Bessent reported. The Chinese, he added, “believe that their economy is in good shape.”

    America’s aim is to rebalance China’s financial model – which Bessent calls “the most unbalanced economy in modern times,” the likes of which we haven’t “seen since the British Empire” – away from mass manufacturing and toward internal consumerism. This isn’t just about dollar dominance or bringing in an estimated $300 billion to the US economy from tariffs: it’s about changing China. “They believe that they have a robust consumer economy, and they do not believe that they have a manufacturing surplus that is making its way into the rest of the world. Which I disagree with,” said Bessent.

    Outside the nearby Sheraton and Diplomat hotels, bored police officers milled about. Anyone searching for drama had to look to the press corps, which consisted mostly of Chinese journalists. Trade talks are bigger news in Beijing.

    There was some fretting about “optics” from US officials. Representatives of the US Treasury were concerned about the white-walled room the Swedes provided for Bessent’s television appearance – “hostage vibes,” muttered one aide. A spat over the positioning of the Chinese and American flags outside Rosenbad was also rumoured.

    What’s clear is that Trump has gained the upper hand in the trade war. When he unleashed his tariffs on what he called “liberation day,” the global expert consensus was clear: disaster. The tariffs, we were told, would amount to the largest tax hike on Americans since the 1910s. Inflation would soar. Growth would stall. Businesses and capital would flee.

    But the orthodoxy has, so far at least, been proved wrong. The numbers have come in better than expected. Inflation has stayed close to the 2 percent target. Almost 800,000 jobs have been created this year. Second-quarter GDP is expected to grow at a healthy rate of 2.4 percent. The stock market has rebounded sharply and is up nearly 10 percent since Trump’s re-election. The forecasts were pessimistic.

    America has won in Europe too. Europe has agreed to invest some $1.4 trillion into American energy and infrastructure in exchange for a reduced yet still significant tariff rate of 15 percent. The French Prime Minister called it “submission”.

    America has won in Europe too

    America has effectively challenged Europe to pick a side, Washington or Beijing, and for now Europe has chosen Washington. “I don’t know if they have our back,” said Bessent, “but clearly, the European relationship with the Chinese had a substantial deterioration.” As the US put up the tariff wall, the door opened for increased trade flows between Europe and China.

    According to Bessent, however, the EU has decided that being flooded with more cheap Chinese goods – while Beijing continued to protect its manufacturing at every turn – is not an economic blessing.

    “I had told them: this is what’s going to happen,” says Bessent. “There is now much more unity between the US and the allies. They’re now seeing the downside [of China] the US has seen.”

    The tariff regime, then, has frightened the world away from its dependence on a frequently malevolent Chinese superpower. Trump’s madman tactic makes everyone crazy, but it appears to have worked. The fear that Trump really might go all the way with his threat of 100 percent-plus tariffs, never backing down, has enabled him to walk things back toward normality while achieving his objectives.

    China, still the factory of the world, remains the biggest test of Trump’s resolve. But all sides know that, as America settles its trade disagreements with the rest of the world, it is Xi Jinping who now most needs the tariff pause to continue.