There are increasing signs that Chinese President Xi Jinping’s (習近平) reign is facing a serious challenge from within the Chinese Communist Party (CCP), threatening to tip China into a period of political instability that could have ramifications for the security of the region, including Taiwan.
The first indication of trouble occurred on Jan. 22, when Xi gave an address at a meeting of the Central Commission for Discipline Inspection, the CCP’s highest internal investigation unit. Xi made reference to “corruption within China’s political and legal systems,” and ordered the commission to strictly investigate “two-faced people who pay lip service in public, but are insincere toward the party.”
Xi also spoke of the “intersection between political and economic problems that threaten the political security of the party and the nation.” Xi’s speech raised eyebrows among China watchers. It is extremely rare for Chinese leaders to directly refer to political tensions inside the party.
The next day, Xinhua news agency published a follow-up article on Xi’s speech, which was even more explicit: “Some rotten elements have formed interest groups and are vainly trying to usurp Party and state authority, holding non-organized activities that damage the Party’s focus and unity,” it said. The Xinhua article also stated that a number of high-ranking party officials had been arrested for “political discipline offenses.”
The reference to “rotten elements” most likely refers to the political faction of former Chinese president Jiang Zemin (江澤民), also known as the Shanghai clique. Jiang is known to have been immensely corrupt while in power, and to have maintained a firm grip over the party and government after leaving office, placing allies in key positions to secure his interests.
Lacking his own power base to fall back on after assuming power in 2012, Xi began to break up Jiang’s influence by initiating an anti-corruption campaign to hunt out “tigers and flies” — powerful leaders and lowly bureaucrats who owed patronage to Jiang. The campaign has also extended to China’s business and financial sector. This has seen the defenestration of China’s highest profile entrepreneur, Alibaba Group founder Jack Ma (馬雲), who made his wealth during the Jiang era and maintained close ties to the former president’s family.
Following Xi’s cover-up of the COVID-19 outbreak at the end of 2019, criticism of his leadership has reached a crescendo. Party princelings and academics have penned excoriating essays, and even dyed-in-the-wool party loyalist Cai Xia (蔡霞), a prominent former professor at the CCP’s Central Party School, has criticized Xi for turning the party into a “political zombie.”
With the CCP marking its 100th anniversary on Thursday next week, it is an extremely sensitive time for the party. In a sign of Xi’s nervousness, even members of Maoist organizations have been arrested as part of “stability maintenance” operations ahead of the centenary celebrations.
The Internet is awash with rumors that China’s head of counterespionage, Chinese Vice Minister of State Security Dong Jingwei (董經緯), defected to the US with his daughter in February.
Having tossed aside numerous party norms and challenged the powerful Jiang faction head-on, Xi has thrown the CCP into a period of unprecedented instability not seen since the Cultural Revolution. This spells trouble for Taiwan.
Xi has made so many powerful enemies, and burnt so many bridges to shore up power, he now has no option but to keep going to the bitter end; he cannot step down without putting himself and his family in grave danger. If a coup appears to be in motion, there is a risk that Xi could resort to military adventurism, perhaps against Taiwan, as a last roll of the dice. A successful annexation of Taiwan would certainly make Xi untouchable within the party.
China has quietly unloaded 10 percent, or US$100 billion, of its US Treasury holdings in the first half of the year. During the past 40 years of rapid economic growth after recovering from a quasi-ruined state that officially ended in 1976, China has amassed a huge pile of foreign reserves partially through its trade surplus. The US Treasuries have always been the prime choice for China to park its foreign reserves. What made it run away from the traditional safe haven for its hard-earned foreign reserves? One explanation is that Beijing is leveraging its financial power as the second-largest US Treasury
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Chinese President Xi Jinping (習近平) has created a dilemma that could soon cause him to be hoisted with his own petard, bringing his leadership of China to an end. His threatening rhetoric over the unification of Taiwan with China, in which he has said, “we are willing to draw blood if necessary,” has placed Xi in a corner. Xi is portrayed as a strong world leader, yet he has created a scenario for himself that most likely would have an unfavorable outcome. With the 20th National Congress of the Chinese Communist Party (CCP) scheduled to convene this month, Xi cannot