For the past few months, the news has noted that Communist Chinese “Premier” Xi Jinping was about to claim an unprecedented third 5-year term in office. That did take place yesterday, so no one should have been surprised. Since his accession in 2012, Xi Jinping has been steadily consolidating his power, removing opponents everywhere from office, and installing his toadies and sycophants. His “anti-corruption” drive has claimed hundreds of victims, and is ongoing. He has been gradually taking over control of the Communist Chinese economy also, returning a generous amount of power to the State from the nascent private sector.
One thing that happened Saturday in the final moments of the Party Conference which ensured his firm control of the country was especially chilling. Here is how it was described in today’s Best of the Web column in the Wall Street Journal:
Choreography of the congress that extended Xi Jinping’s rule of China was briefly disrupted over the weekend by a highly unusual and unceremonious exit from the proceedings by Mr. Xi’s predecessor, 79-year-old Hu Jintao.
The midmeeting departure of Mr. Hu on Saturday highlighted 69-year-old Mr. Xi’s supremacy…
Midway through the otherwise carefully choreographed closing session of the congress on Saturday, Mr. Hu was helped out of his chair next to Mr. Xi and inexplicably led out of the hall… Footage shot by foreign media in the hall, which wasn’t included in the official China Central Television broadcast, showed Mr. Hu seemingly reluctant or unable to stand up when an aide tried to lift him off his chair.
In the commotion, Mr. Xi leaned toward Mr. Hu and appeared to speak with him, pulling back a document Mr. Hu set his hand upon. Mr. Hu was ushered off the center dais, briefly looking back at Mr. Xi and patting outgoing Premier Li Keqiang on the shoulder as he walked out, unsupported.
I have mentioned before, here, that Xi Jinping seemed to be dismantling the market legacy of the great Deng Xiaoping; just like Biden is doing to the free-market legacy of President Trump (and yes, I meant to point out the analogy).
Throughout the Communist Chinese economy, Xi is reducing the power of the private sector, including the tech sector giants Alibaba and Tencent. Back in July, an op-ed in the Journal by Dennis Kwok and Sam Goodman detailed how the Communist Party may be installing Party cells in the Chinese outposts of Western companies.
Since 2016, Xi Jinping has pushed for state-run companies and subsidiaries of foreign-owned companies to establish cells through the provisions of the Chinese Communist Party’s Articles of Association.
In September 2020, the General Office of the Communist Party’s Central Committee issued the “Opinion on Strengthening the United Front Work of the Private Economy in the New Era,” which called on the nation’s United Front Work Department to strengthen their involvement in corporate governance. In response, the European Chamber of Commerce in China cautioned that the strengthening of the role of party cells would “have a considerable impact on business sentiment, and could lead foreign companies to reconsider future and even current investments in China.”
What the European Chamber of Commerce felt then has come to pass. With the Communist Chinese Zero-Covid policy wreaking havoc on the ability of businesses to stay open and working, as well as the new regime of Party cells, foreign businesses have been moving executives and branches out of Communist China to such business centers as Singapore. Hong King is losing its distinction as a free and open society due to the new National Security Law, and businesses are leaving there too. Foreign companies are finding it harder and harder to convince their executives to relocate to China, and executives already there are asking to be transferred out. Gee, maybe they aren’t very interested in having a Communist Party Commissar looking over their shoulder all the time!
So Xi Jinping has been setting himself up as the new Mao Zedong. We can all get an idea of what will be happening to the rapidly-growing (until now) Communist Chinese economy. The country’s population is already starting to shrink due to the one-child policy that was started in the 1980s, and only recently lifted. That kind of policy does not admit of rapid reversal. Without a nationwide robust healthcare system, all those new babies maybe won’t get the best care, and young people are still reluctant to have more than one child (they have gotten used to the disposable income and near-guaranteed jobs). Tech companies are already reducing headcount due to the new restrictions, which does not bode well for GDP.
One obvious effect of the Zero-Covid strategy is the near-constant business restriction, with forced closures and lockdowns causing disruption of peoples’ lives in many ways. Those disruptions are leading to the Communist Party’s worst nightmare-social unrest. The Party will do whatever it has to, to prevent demonstrations and internet alarm bells. With the decline of the real-estate developers who took peoples’ money for homes and then ran out and didn’t complete them, many unhappy buyers were threatening a “mortgage boycott” until their units could be completed. Property is the main way the Chinese people build wealth, and there are millions of unhappy consumers who paid in advance and have received nothing.
So the Communist Party is contracting its iron fist around the Chinese people and economy. Mr. Xi will not have an easy time of it, what with all the US sanctions against its companies and executives, especially in the vitally-important semiconductor industry. Xi Jinping has a whole raft of challenges ahead of him. And, like tyrants everywhere, he can never relax. Tyrants live in constant fear of popular uprisings, and cannot trust even those closest to them. They can install their sycophants at all levels of society and government; place Party cells in businesses; and keep up constant surveillance on the population, but they can never sleep. Those supporters in government know they can’t always tell the Big Guy the truth about what is going on, for fear of losing their jobs, prestige, and even their lives. So problems will fester, and burst out when they are least expected.
Xi Jinping may be all-powerful now, but he can never rest. And it is simply impossible for him to control a country of over 1 billion people. I do not wish him well, and I fear for the Chinese everyman.