Beijing is cleaning house ahead of its Third Plenum July 15-18, intensifying a crackdown on Chinese Communist Party (CCP) officials with a series of rapid dismissals. In June, three party officials were “double expelled” simultaneously from the party and relieved of their public duties. And last week two former defense ministers were expelled from the party as well, as part of an “anti-corruption” campaign that has picked up steam in recent months. Analysts interpret the recent moves as a strategy by CCP leader Xi Jinping to quell dissent.
Along with the recent expulsions, China has admonished officials to stay away from the so-called “high-voltage line” of party disciplinary boundaries, as the CCP stresses its no tolerance policy toward factions and cliques.
On June 27, the CCP expelled former defense minister Li Shangfu and his predecessor Wei Fenghe. Mr. Li had disappeared from view late last summer, and was fired in October 2023. His predecessor, Mr. Wei, had retired in 2023 after five years in office.
On June 17, China’s Central Commission for Discipline Inspection (CCDI) and the National Supervisory Commission announced the “double expulsion” of three high-ranking officials: Li Pengxin, deputy secretary of the CCP committee for the Xinjiang Autonomous Region; Wang Yixin, executive vice governor of Heilongjiang Province; and Chen Yuxiang, deputy secretary of the Hebei provincial commission for discipline inspection, and deputy director of the provincial supervisory commission.
Li Pengxin was accused of abusing his authority by “cultivating personal power, disloyalty and dishonesty to the Party,” and engaging in corrupt practices, including selling official positions. Wang Yixin was charged with associating with political frauds, obstruction of party investigations, and involvement in power-for-sex and money-for-sex transactions. Meanwhile, Chen Yuxiang was accused of lavish personal indulgences, misuse of influence for personal profit, and interference in legal matters.
In a separate development on June 16, the CCDI and National Supervisory Commission reported the investigation of Wu Yingjie, the former party secretary of Tibet, who had recently retired and held prominent positions within the Chinese People’s Political Consultative Conference.
Avoiding the ‘High-Voltage Line’
On June 17, the CCDI and National Supervisory Commission announced major revisions to the CCP’s disciplinary regulations. These revisions underscored the imperative to “uphold firmly the authority of the Party Central Committee and ensure the smooth implementation of Party policies,” while warning officials against any “ambiguity or wavering.” The updated regulations explicitly prohibited “factionalism and cliques,” stressing their strict prevention.Simultaneously, state media and CCP mouthpiece CCTV released an article summarizing Xi’s longstanding admonitions to party officials, particularly his stern caution against crossing the party’s disciplinary boundaries, dubbed the “high-voltage line.”
Analysts note that such media releases are customary during critical times in the CCP’s political calendar, serving as warnings to party members. The warnings take on particular significance ahead of the long-delayed Third Plenum, which is expected to address significant internal discord within the CCP.
Li Yuanhua, a former professor at Beijing’s Capital Normal University, told The Epoch Times on June 19 that ahead of a major meeting, it’s common for the CCP to take actions like those seen in recent weeks. Factions are inherent to the CCP’s bureaucratic structure, “where alliances dictate advancement,” he said. Internal struggles and mutual accusations are common, leading to the targeting of rival factions.
U.S. based political analyst Lan Shu shared similar sentiments, citing Xi’s use of party discipline “to purge dissent within the party.” Mr. Lan compared Xi’s approach to that of historical figures like Stalin. Emphasizing the autocratic nature of Xi’s leadership, he said that while dissent is being purged, no faction within the party currently poses a substantial challenge to the CCP leader.
Real Estate Policies Face Market Skepticism Ahead of Third Plenum
The July party conclave is expected to focus on economic reform, as China faces a slumping economy and sluggish real estate sector. Prior to the Third Plenum, along with its “anti-corruption” measures weeding out potential dissent within the party, the CCP made additional moves to tackle its real estate crisis.In May, the People’s Bank of China (PBOC) and China’s financial regulatory bodies introduced “three big moves” to address problems in the real estate market, particularly China’s huge glut of unfinished housing. However, market observers remains skeptical of the measures’ effectiveness.
The first move involves lowering the minimum down payment ratio for first homes to 15 percent, and for second homes, to 25 percent.While this adjustment may facilitate market entry for buyers, it also increases monthly payments and overall mortgage burdens.
The second move focuses on reducing mortgage interest rates, including adjustments to rates for housing provident fund loans and removing lower limits on commercial mortgage rates. In cities where similar adjustments have already been implemented, the scope for further rate reductions is limited.
The third move entails the CCP’s plan to purchase housing inventory. The PBOC announced plans to establish a three hundred billion yuan ($41.5 billion) special loan program for affordable housing, featuring a 1.75 percent interest rate, a one-year term, and four possible extensions.
However, experts argue the CCP’s funding allocation falls far short of what is needed to stabilize the housing market. Arthur Budaghyan, chief emerging markets strategist at Canada’s BCA Research, calls it insufficient, estimating that at least five trillion yuan ($691 billion) would be required to make an impact.
Mike Sun, a senior Chinese investment strategist in the United States, told The Epoch Times he feels that Beijing’s “three big moves” will have limited effect in boosting the housing market. The government is heavily indebted and lacks the funds to clear inventory, he said. The fundamental issue is that the consumers lack confidence in the future of China’s economy and are reluctant to buy homes.
Mr. Li, formerly of Capital Normal University, said the CCP’s policy announcements leading up to the Third Plenum aim to project stability amid a challenging economic climate and reassure the public that the real estate market is not on the brink of collapse.
However, he said, the policy announcements actually indicate that the market situation is dire. Many local governments are burdened with heavy debt and lack the resources to repurchase properties as proposed by the PBOC.
Mr. Shu posited that the CCP’s objective is less about economic stimulus and more about consolidating political control. He said that initiatives such as purchasing commercial properties at discounted rates for welfare housing will strengthen CCP loyalty by offering benefits to its supporters.
Mr. Lan contends that “the CCP’s current approach is not about saving the economy but waging a war against private capital.” The CCP believes that private capital in China has grown to a point where it threatens the political system. The CCP must choose between sacrificing China’s private market-driven economy or allowing this economy to grow and eventually threaten the CCP’s authoritarian rule.
These policies reflect a strategic choice by Xi, Mr. Lan said: to prioritize CCP authority over private capital growth, which the party perceives as potentially threatening its governance model.
