In Beijing, Signs of a Major Political Power Struggle in the Offing

by Team FNVA
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​Fortune.com
MARCH 28, 2016

A spate of stories suggests Chinese President Xi Jinping may face a challenge to his authority.

When asked his opinion of the political intrigue at the Kremlin, Winston Churchill reportedly compared the power struggle in the Soviet Union to a dog fight under a carpet: you may see a lot of movement, but you have no idea who is winning or losing.

The Soviet Union is no more, but politics within dictatorships is just as difficult to decipher. Take, for example, the recent spate of stories coming out of Beijing that China’s top leader, Xi Jinping, faces a significant challenge to his authority.

In late February, Ren Zhiqiang, an outspoken real estate mogul with nearly 38 million followers on weibo, China’s answer to Twitter, publicly derided statements attributed to Xi calling for the Chinese media’s unconditional loyalty to the Chinese Communist Party (CCP). When the government shut off Ren’s weibo account, China’s netizens were virtually up in arms denouncing the authorities and praising Ren for his courage to speak out.

Ren was not the only one to push back against party orthodox. In an even more daring act of defiance, Zhou Fang, a journalist at Xinhua, China’s official news agency, published a letter online on March 7 calling for the government to investigate China’s Internet censorship agency for violating Chinese citizens’ constitutional rights.

And on March 4, an an anonymous letter demanding Xi’s resignation was posted on a well-known website, Wujie News, a joint venture owned by SEEC Media Group (publisher of Caijing, a highly respected publication), Alibaba, and the government of Xinjiang. In late March, the Chinese police arrested 11 individuals in connection with the letter.

While no one knows whether these incidents amount to a coherent plot against Xi, they nevertheless signal the potential beginnings of a period of heightened tensions inside the Chinese regime.

These signs of defiance seem largely spontaneous and reflective of Chinese civil society’s disillusionment with the policies of the Xi administration in general and its crackdown on press freedom in particular. In a one-party regime, forces in civil society may not have much direct influence on elite politics, but their voices can change public perception. In this case, public opposition to the government’s attempts to restore ideological conformity and reinstitute Maoist-style propaganda tactics will likely undermine Xi’s popular appeal.

The timing of these events is also noteworthy. The CCP will hold its 19th congress in late 2017. At this gathering, Xi will certainly receive a second five-year term. Less certain is the make-up of the next Politburo Standing Committee, the regime’s top decision-making body. Five of its seven incumbents are set to retire. Will Xi be able to fill those slots with his own supporters? Will the regime name two successors to take over from Xi and Premier Li Keqiang in 2022 and thus enforce its two-term limit?

Based on the experience of the last leadership succession, power struggles at the top often precede party congress gatherings. In late 2006—one year before the 17th party congress, when the CCP had to choose a successor to Hu Jintao—a contender for the top position, Shanghai’s party boss Chen Liangyu, was purged on charges of corruption. In March 2012, eight months before the 18th congress, Bo Xilai, Chongqing’s party chief and a rival to Xi, was toppled on similar charges. It’s highly probable that we will witness the fall of a significant political figure in the next 12 months.

As the head of the CCP, Xi enjoys an overwhelming advantage in getting rid of his rivals in the run up to the 19th congress. However, sensing their imminent danger, his rivals are not going to wait for their demise passively. If they want to push back against Xi, they must act now.

For all the talk about Xi being China’s most powerful leader since Mao Zedong, one glaring weakness of his strategy is that he excessively relies on purging rivals and centralizing power inside the regime as a principal means of ruling China. Without a broad coalition, he is forced to rely on a bureaucracy, now deeply resentful of his anti-corruption fight, to implement his policies. It is increasingly clear that this bureaucracy wants him to fail.

It is impossible to determine who will prevail in this power struggle. Xi has a clear advantage in controlling the levers of power inside the regime, but his opponents appear to benefit from Xi’s failure to deliver on his promises of bold reform and from the disillusionment among China’s social elites, such as the business community and the intelligentsia.

While Xi may be able to purge his rivals, a coalition of opposition forces will likely thwart his quest to build a highly centralized and personalized regime that rules with an iron fist. This is not good news, either for China or the rest of the world. A political stalemate will only further undermine business confidence and depress China’s growth.

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