Chinese Communist Party (CCP) chief Xi Jinping is giving the appearance of defying gravity by successively tanking China’s economy—returning it to a Maoist “internal circulation” model—and simultaneously appearing to have outmaneuvered his enemies within the CCP and the general public.
The analogy is of a skydiver who jumps from an aircraft without a parachute and, on the way down, says to himself, “So far, so good.”
Eventually, Xi will need to content himself with the short-term reduction of China’s strategic reach through the economic collapse, or he will be replaced as leader by his own party—or both.
This optical illusion cannot be expected to last much longer. The only question is what will occur as the explosive precursor to change within mainland China.
There are, however, good reasons why the inertia of CCP politics has given the appearance that Xi remains in full control of the Party and mainland China.
The March 23 implementation in Hong Kong of the new “Article 23” security code, which suppresses many of the last vestiges of the city’s independence, shows that the Xi administration still fears the displays of Hong Kong’s separateness and that it is willing to sacrifice the unique economic status of the territory as a gateway for investment in the Chinese market.
Xi talks about paying greater attention to restoring the market economy, but his actions all show aggressive suppression of it.
For now, despite the widely broadcast discontent with Xi from within the ranks of his CCP opponents and the increasing public protests, Xi has been doubling down on purging his political rivals and increasing the suppression of the country’s economic latitude. He has done this while allowing his officials to talk about economic support measures to help the housing industry, foreign investment, and more.
Finally, Xi understands that most Western media, investors, and political figures pay more attention to what is said than what is done. Much of his “wolf warrior” diplomacy has become quiet, even as he steps up real pressures on, for example, the Republic of China (ROC: Taiwan), but the question remains as to what his next moves will be or what his opponents’ next moves could be.
Who are Xi’s opponents?
The large and relatively open monoliths, such as the Jiang Zemin faction centered around Shanghai, are clear, but Xi’s problem may be that he created too many enemies to deal with. He essentially disenfranchised the “red princelings,” the second generation of the original communist leaders, who feel entitled to succeed in the rewards of power and wealth. Xi has to treat them with great caution, unlike the “technocrat” officials who rise to power, even to the premiership of mainland China.
Clearly, the main opposition to Xi within the CCP—including the “second-generation reds”—has been acting discreetly, only leaking reports of Xi’s relative “isolation” within the Party. The opposition will not and cannot act until it has all its power elements under control. If Xi senses immediate danger, he will activate distractive measures or countermeasures without regard to the long-term security of either the Party or China. His only personal goal now is to ensure long-term survival.
Part of the protracted dance of death between Xi and his opponents has been the attempt to make clear to Xi that his ability to control the People’s Liberation Army (PLA) was open to question, as was the effective capability and reliability of PLA technology. This reality has been exposed during the past year, possibly because of the internal CCP warfare now underway rather than any intelligence revelations by foreign powers.
Not that the claims of PLA unreliability are necessarily false. Indeed, they seem even to be understated. But the nature and degree of that factor is still unknown. And is the PLA still faithful to the Party, if not Xi?
To what degree is Xi—or the Party opposition—attempting to take advantage of the vacuum of attention to the world stage exhibited by the United States in this presidential election year? Indeed, it could be that an attempt by Xi to seek a domestic distraction to his woes by launching overt attacks on Taiwan might fit perfectly with the agenda of the embattled U.S. presidency of Joe Biden.
Another foreign war distraction could equally help Xi and President Biden.
As noted, Xi and President Biden are concerned with short-term survival; longer-term national or party considerations are secondary. Not so, as far as the CCP is concerned. The CCP leadership knows that it has to survive the current socio-economic implosion and continue to be the only power in charge of China.
Given the uncertainty of the outcome of such a clash, a kinetic war with Taiwan would potentially be devastating for China and the CCP. Too many factors weigh against China for conflict to be a logical choice for Beijing, which highlights the irrationality of the present situation. Yet the main opposition groups within the CCP—including the virtually untouchable “elders” who made their complaints known to Xi at the Beidaihe gathering of Party elders in late 2023 in Hebei Province—seem not yet able to move against Xi.
Meanwhile, Xi seems to be accelerating his move of mainland China back to a fully Maoist state, with minimal dependence on external economic input or the private Chinese sector. This is strategically unsustainable, even more than during the Maoist period, given the increased urban population, the decline in food production, and the destruction of viable water and agricultural land resources.
Xi must ensure that he is as free from any meaningful internal opposition as the USSR’s Josef Stalin was until his death. At present, he clearly holds the levers of physical coercion within China. Can Xi’s opponents move against him if they cannot guarantee that those levers are no longer accessible to him?
Or is the economy and the restive urban majority of the population ready to collapse into an uncontrollable level of chaos? This could be unthinkable, on a scale, even during the Cultural Revolution (1966–76).
It is almost impossible for outside observers to “game” the evolution of events in China at present, but attempts clearly need to be made to understand at what point Xi could be panicked into making a bold, distractive move to outmaneuver his domestic opponents, what options remain in his opponents’ hands, and what options remain in the hands of the Chinese population.
But it is clear that, at present, Xi still—perhaps for months; maybe a year?—holds the dominant hand in the domestic power balance, even if that grip is weakening. It is still probable that Xi will move to strengthen his hand, or his opponents will need to move against him or lose out for the longer term.
And those moves will need to come in 2024.
