China Hu Jintao’s CYL Faction in Serious Trouble


The open attack on officials who cut their teeth in the Communist Youth League comes as power struggles and political jockeying intensify in the run-up to next year’s 19th party congress. Photo: AP

The open attack on officials who cut their teeth in the Communist Youth League comes as power struggles and political jockeying intensify in the run-up to next year’s 19th party congress. Photo: AP

SCMP says in its report “Strike Two: Communist Youth League ‘aristocracy’ under fire again” that cadres with youth league (CYL) backgrounds are warmed that “they would face ‘tough weather’after several scandals compounded the leadership’s resentment over their ‘self-serving’ attitude”.

CYL, is former Chinese Communist Party (CCP) general secretary Hu Jintao’s powerbase. When Hu was in power, he promoted lots of his CYL protégés to high official positions. As a result a powerful CYL faction emerged and is second only to Jiang Zemin’s Shanghai faction.

SCMP’s report is based on a microblog posted on Capitalnews, a WeChat account operated by Beijing Daily, the official newspaper of the party’s Beijing municipal committee.

Such a microblog on the Internet seems insignificant, but we should recall that it was the article by Deng Yuwen on Hu Jintao’s legacy of ten problems on August 30, 2012 that brought about tremendous consequence on the eve of the 18th CCP National Congress.

At that time Deng Yuwen was the deputy chief editor of Study Times, a magazine of CCP Party School controlled by Hu Jintao’s designated successor Xi Jinping. Soon after the article was published, Xi Jinping mysteriously disappeared for almost half a month in early September.

Before Xi’s mystic disappearance, the CCP could not determine the date of its 18th Congress as there is no consensus on the formation of its Politburo, especially the PSC.

Deng’s article on the Internet seemed insignificant when Chinese official media was filled with articles and reports on Hu Jintao’s achievements, but it gave Xi the ammunition when he visited the powerful elders during his mystic disappearance to win over their support for his fight against corruption and other malpractices.

As a result, soon after Xi reemerged from his mystic disappearance, Jiang Zemin came to Beijing to preside over a Politburo meeting to determine the date of the 18th Congress and severe punishment of Bo Xilai that Hu Jintao lacked power to determine.

Due to the problems listed in Deng’s article, Hu’s CYL faction lost in the fight for control of the PSC. Jiang’s Shanghai faction had all the new PSC members. However, as a compromise, all Jiang’s members were old and had to retire in the 19th Congress and Hu’s faction had 8 Politburo members who were quite talented and might well be chosen as PSC member in the 19th Congress.

However, the arrangement of having 5 PSC members to retire at the next Congress also meant that Jiang wanted Xi to succeed him as the core of CCP leadership and choose the new PSC members to succeed those chosen by him.

It seems that Xi does not want to choose members of CYL faction as PSC members and like Deng’s article on the Internet in 2012, the current microblog by Beijing Daily will play a role similar to Deng’s article.

As for what happened during and after Xi’s mysterious disappearance, it is a very long story described in full in the expanded 2nd edition of my book Tiananmen’s Tremendous Achievements.

Comment by Chan Kai Yee on SCMP’s report.

Full text of SCMP’s report can be viewed at http://www.scmp.com/news/china/policies-politics/article/1911332/strike-two-communist-youth-league-aristocracy-under


Title Determines Power or Vice Versa in China


Recent repeated appearance of the term “core” has given rise to people’s speculation that Chinese leader Xi Jinping wants to assume the title of “core”.

In my book Tiananmen’s Tremendous Achievements, I mentioned that Xi Jinping’s predecessor Hu Jintao opposed the use of the phrase “the Party’s Central authority with Hu Jintao as the core” when he came to power as Jiang Zemin remained the core though retired. Hu preferred the phrase “the Party Central authority with Hu Jintao as the general secretary”. Xi has continued the use of that kind of phrase, i.e. “The Party Central authority with Xi Jinping as the general secretary”.

The term “core of the collective leadership” was invented by China’s paramount leader Deng Xiaoping when he remained the dominant leader though retired from all official posts.

Deng granted his chosen successor Jiang Zemin the title of the “core of the collective leadership” and knew well that his granting of the title could not make Jiang the real “core”; therefore, he told Jiang that he would not rest at ease until Jiang became the core.

The greatest help Deng rendered Jiang was the removal of Yang brothers (Yang Shangkun and Yang Baibing) from the military to enable Jiang to control the PLA as Deng knew well that his promotion of Jiang to the post of the Chairman of the Central Military Commission (CMC) did not enable Jiang to take over control the PLA from the Yangs.

Deng knew China much better than those China watchers outside China who have been making hue and cry about Xi’s desire to assume the title of “core” so as to have the dominant power.

The person who has the dominant power as an emperor is the core, but the person who has the title of emperor or core does not necessarily have the dominant power. That is why I said in my book Tiananmen’s Tremendous Achievements:

One thing quite interesting in Chinese politics is that there are no definition, codes or rules whatever about the power of an emperor in the past and the core of CCP (the Chinese Communist Party) now. In fact, even if there are some codes or rules, there is no institution or mechanism to enforce them.

An emperor could have absolute power like Emperor Shihuangdi of Qin (259-221 BC), but might have almost no power like Shihuangdi’s successor Huhai, whose power was usurped by Zhao Gao, a eunuch. Zhao Gao even dared to give Huhai a stag as a gift and told Huhai that the stag was a wonderful horse. Huhai protested, “It is a stag not a horse”, but most of the officials in the court echoed Zhao Gao’s view as Zhao Gao had already usurped almost all the power and would punish those who dared to challenge him. Huhai was later killed by Zhao Gao.

Seeing that the sovereign power in quite a few states was usurped by powerful courtiers at the end of the Period of Warring States (476-221 BC), Han Fei Tzu, a Legalist master, wrote a book entitled Han Fei Tzu to teach sovereigns of state the art for being an emperor… Emperor Shihuangdi praised the book highly and adopted Han Fei Tzu’s ways to rule the country.

You see that Huhai had the title of emperor but did not have the power as the emperor. That was also the case in 1997 after Deng’s death. Jiang had the title of core but was challenged by Li Peng and Qiao Shi before the 15th CCP National Congress. Jiang had to ask Bo Yibo, a powerful elder king maker, for help. Bo forced Qiao to retire to enable Li to take over Qiao’s position. Bo had thus ensured that Jiang’s position as the core was not challenged.

It was quite impressive that when the congress was over and most of the delegates had left, Bo remained in the hall to give a speech that stressed that Jiang was the core of the Party’s collective leadership. It was obvious that without Bo’s support, Jiang could not even maintain his position as the general secretary, let alone the core.

I gave detailed description how through hard efforts, Jiang became the real core in Chapters 6 and 7 of my book.

If one really understood Chinese politics, one would not have believed that Xi was so stupid as to want the title of core for the power of core. If Xi has the power of the core, he does not need the title of core, but if he does not have the power, the title of “core” cannot help him.

The local officials who said that they would safeguard the core General Secretary Xi Jinping, showed their fear that they might be deprived of their official positions during the reshuffle in the 19th National Congress of the Chinese Communist Party.

What they said does not mean that Xi wants the title of core. Xi’s protégé Li Zhanshu mentioned the awareness of the core. He means the Party instead of Xi Jinping as the core. So does the document of the January Politburo meeting.

Xi seems to have the power of core in reorganizing Chinese military, but we do not know what roles powerful elders have played in such reorganization. I mentioned in my book, there are two powerful black boxes in China, the powerful elders and the secret police. Jiang Zemin wants Xi to succeed him as he chose all the five new Politburo Standing Committee members at the 18th Party Congress that were old and had to retire at the 19th Congress to leave Xi to choose their successors, but whether Xi will have established his powerbase strong enough to have all his protégés elected at the congress remains a question. If through the reshuffle at the next congress, he has enough protégés to control the central committee, he will be the core whether he has that title or not.

Note: Xi would have been an incompetent core if the central committee is filled with new people of his choice. If a leader lacks the charisma to win over powerful officials appointed by other factions, he cannot be the core as he will encounter strong opposition.

Let me conclude with another quote from my book:

For the Party, the best way to have a successor to the core is to appoint the successor the posts of general secretary and concurrently the CMC chairman, but as mentioned in Chapter 1, that general secretary and CMC chairman may only be a “daughter-in-law”. He has to obey the instructions of the core who will be the “mother-in-law”, or to a number of powerful elders, i.e. several “mothers-in-law” if there is no core.

From this, we can see how serious China’s problems are. Even in a developing country such as India, Indonesia or the Philippines, when a person is elected the prime minister or president, he naturally has the power of his office as soon as he has been elected in the parliament or inaugurated. In China, however, a Party leader elected by the Party central committee may be powerless and the country may remain dominated by the elders who hold no official posts at all. In order to really have power and be firmly established, the leader has to gradually establish his powerbase and become the core. Even if he is lucky enough to really succeed in establishing his powerbase, it will take at least several years. Anyway, it is a very difficult process because he should be skilled in applying the art for being an emperor.

Article by Chan Kai Yee as comments on various media reports and articles.


No Worry about China’s Rise if US Gets Its House in Order – Paulson


Paulson meets Chinese Premier Li Keqiang. AFP/Getty Images

Paulson meets Chinese Premier Li Keqiang. AFP/Getty Images

You should be less worried about whether China will overtake us than what we’re going to do [in the United States]. Because if we do the things we need to do to get our house in order and fix our economic problems and restore our economy, we’re going to be the preeminent power for a long time. And if we don’t, we won’t.

Former US Treasury Secretary Hank Paulson

The above is US media Foreign Policy’s quote of Paulson’s advice on US maintaining its no. 1 position.

The media carried a report titled “Xi Jinping’s Problems Are ‘Monumental’” on Paulson’s new book, especially his views on China and its leaders. Due to his experience in doing lots of work along with Chinese leaders when he was first an international banker and then US treasury secretary, Paulson has profound insight in understanding China.

He sees Chinese President Xi Jinping’s charisma as a leader in describing Xi as “a big presence who lit up a room.”

The report quotes Paulson as saying, “I can’t think of a leader in history that is attempting to change so much for so many people on such a massive scale as Xi. He’s got the economy to reboot, he’s got an urbanization model to reboot or change, in addition to the environment to clean up, the corruption problem…. You’re talking about really [deep] reforms.”

Paulson reminded the reporter in the report: While Xi “doesn’t want our values or our form of government,” it’s also true that the problems Xi is “dealing with are very significant; they’re monumental.”

Paulson described how China learnt from the US, which enabled China to rise so drastically.

He believes that the US has to help Xi Jinping’s reform which will benefit the US.

For example, the controversial U.S.-China Bilateral Investment Treaty (BIT). He regards it as a possible agreement to liberalize mutual investment and further open China’s economy to Western competition. The report quotes him as saying, “I’m very positive about the progress so far.” “I think that the Chinese side has crossed a big threshold with their willingness to provide a negative list which essentially says, rather than having to go seek approval for every investment, these are the parts of our economy that are open and these are the parts that aren’t. Now this won’t be easy to get done. And it sure won’t be easy to get done this year. But if this is done properly and it’s a high standard BIT, it can be transformational and help open up more of the Chinese economy to competition and create more opportunities for U.S. businesses and U.S. workers.”

According to Paulson, the US shall support Xi in his reform because the problems Xi is “dealing with are very significant; they’re monumental…” “(I)f he doesn’t (succeed), it’s going to hurt us all.”

Source: Foreign Policy “Xi Jinping’s Problems Are ‘Monumental’”

Full text of the report can be found at https://foreignpolicy.com/2015/04/16/xi-jinpings-problems-are-monumental-henry-paulson-interview/?utm_source=Sailthru&utm_medium=email&utm_term=%2AEditors%20Picks&utm_campaign=Russia_Direct_April_Promo_PowerInboxRS4%2F16


Xi Jinping’s ‘Four Comprehensives’, a Strategic Blueprint for China’s Future


Jiang Zemin put forth his Three Represents and Hu Jintao put forth his Scientific Outlook on Development. Both are regarded as the legacy guidelines they left for the Chinese Communist Party (CCP) to follow. Now it is Xi Jinping’s turn. He put forth his “Four Comprehensives” in his speech last December. Just like Jiang Zemin’s first mention of his Three Represents in a speech in 2000, Xi’s mentioning of his Four Comprehensives did not attract much attention until now. CCP mouthpiece the People’s Daily has published and will publish one commentary after another to publicize it as “a strategic blueprint for China’s future”.

I am going to give below the full texts of People’s Daily commentary and Reuters report on the Four Comprehensives:

However, it is interesting to point out that Jiang put forth his Three Represents for the first time in 2000, 11 years after he was appointed CCP general secretary. It indicated the difficulties in establishing his powerbase. Hu put forth his Scientific Outlook on Development within one year after being appointed. It indicated the strong support he got from Jiang the core of the third generation of CCP leadership.

Xi has obtained strong support from not only Jiang, the core, but also other elders so that he was able to put forth his Chinese Dream as soon as he was appointed. Now he has substantiated his Chinese Dream with the Four Comprehensives. It indicates his success in establishing his position as CCP leader.

However, judging by the serious pollution, corruption, overcapacity, excessive local government debts, etc. left behind by Hu Jintao, Hu has not had much success in realizing his Scientific Outlook in developing Chinese economy.

Will Xi be able to realize his Four Comprehensives to “comprehensively build a moderately prosperous society, comprehensively deepen reform, comprehensively implement the rule of law, and comprehensively strengthen Party discipline”?

That is the question.

Deepen reform? Can he surmount the resistance from conservatives and vested interests?

Rule of law? Can China’s judiciary be independent?

Strengthen Party discipline? Can he overcome rampant corruption?

PEOPLE’S DAILY COMMENTARY

Xi’s ‘Four Comprehensives’ a strategic blueprint for China’s future
(Xinhua) 08:20, February 26, 2015

BEIJING – A moderately prosperous society, reform, rule of law, Party discipline — these “Four Comprehensives” are Xi Jinping’s blueprint for China’s future.

The “Four Comprehensives” are tasks raised at Communist Party of China (CPC) meetings over the last two years, since President Xi Jinping took office.

The concept was first mentioned by Xi in December, “..comprehensively build a moderately prosperous society, comprehensively deepen reform, comprehensively implement the rule of law, and comprehensively strengthen Party discipline.”

Shortly after Xi took helm of the CPC in November 2012, he put forward the concept of “the Chinese Dream,” or “the great renewal of the Chinese nation”.

“A moderately prosperous society” is not only the primary objective identified at the 18th Party Congress, but also “a crucial step towards the Chinese dream of great rejuvenation.”

Xi’s first trip as China’s leader was to Shenzhen, symbolic hub of Deng Xiaoping’s reforms, and promised “no stop to reform and opening up”.

“Deepening reform” identifies the route to prosperity and social progress.

The “Four Comprehensives” come as China pays greater attention to improving governance following the economic miracle. Social justice has become an important goal.

“The rule of law” came to prominence at the fourth session of the 18th CPC Central Committee, and guarantees modernization of the system of government while championing social justice.

The leadership has taken great pains to address corruption, which they believe may threaten the very survival of the Party and the state: “Strengthening Party discipline” is a must for the CPC to survive.

The “Four Comprehensives” will ensure China continues steadily on its path of development.

REUTERS REPORT

After the ‘Three Represents,’ China pushes ‘Four Comprehensives’
BEIJING Thu Feb 26, 2015 1:13am EST

(Reuters) – Following in the footsteps of Mao Zedong Thought, Deng Xiaoping Theory and the “Three Represents,” China is promoting President Xi Jinping’s “Four Comprehensives,” calling for rule of law and enforcement of Communist Party discipline.

State media has ratcheted up promotion of the doctrine in the run-up to the country’s annual parliamentary session in March.

The People’s Daily, the ruling Communist Party’s most important mouthpiece, praised the slogan in a front-page commentary on Wednesday. The commentary also appeared on state television and other party-owned news outlets.

The “Four Comprehensives” refer to China working “comprehensively” to build a moderately prosperous society and strengthen reforms, rule of law and party discipline.

Building
Party discipline is Communist Party jargon for efforts to fight corruption. A campaign against graft has formed the centerpiece of Xi’s administration and the leadership has vowed to target both high- and low-level offenders.

Xi has referred to the “Four Comprehensives” in past months but the People’s Daily editorial signals a wide endorsement.

Xi’s best-known slogan so far has been his call for the “Chinese dream”, an ambiguous catchphrase leaders have said refers to national rejuvenation in everything from ties with Taiwan to China’s space program.

Critics say pursuing rule of law is futile without granting independence to courts, which are controlled by the Communist Party. China’s top court on Thursday said it rejected the notion of Western-style judicial independence and separation of powers.

Former President Jiang Zemin was famed for his “Three Represents,” which embraced private entrepreneurs and were written into the party’s constitution.

Hu Jintao, Xi’s immediate predecessor, was primarily known for the economic doctrine of “scientific development”.

I believe that Reuters’ report today on China’s rule of law is also interesting; therefore, I give its full text below:

China’s top court unveils deadlines for legal reform
BEIJING Thu Feb 26, 2015 1:53am EST

(Reuters) – China’s top court set a five-year deadline on Thursday for legal reforms to protect the rights of individuals, prevent miscarriages of justice and make its judiciary more professional as the ruling Communist Party seeks to quell public discontent.

A statement on the Supreme Court’s website promised specific deadlines for each goal, including support for a “social atmosphere of justice” by 2018.

It gave more details of a decision reached at a four-day meeting last year, when the party pledged to speed up legislation to fight corruption and make it tougher for officials to exert control over the judiciary.

Despite the legal reforms, Chinese President Xi Jinping’s administration has shown no interest in political change and has detained dozens of dissidents, including lawyers.

China’s top court stressed that one of the five basic principles of legal reform was adhering to the party’s leadership and “ensuring the correct political orientation”.

He Xiaorong, the director of the Supreme People’s Court’s reform division, said the court “would make officials bear responsibility for dereliction of duty” for cases that have a wide impact.

“Only through the establishment of such a system can we ensure that we can guarantee social fairness and justice in every case,” He told a news conference, according to a transcript on the court’s website.

The measures reflect worries about rising social unrest. Anger over land grabs, corruption and pollution – issues often left unresolved by courts – have resulted in violence between police and residents in recent years, threatening social order.

The court said it would prohibit criminal defendants from wearing vests and jumpsuits to trials, effectively removing the presumption of guilt that is common in China. It pledged to strengthen the prevention of torture to gain evidence and “effectively prevent miscarriages of justice”.

It would also establish a performance evaluation system for judges, “perfect the mechanism for protecting lawyers’ rights” and establish media galleries in courts for certain trials.

It also promised to boost transparency, saying it would make more information available, and reduce local protectionism by changing the jurisdiction of courts.

How much impact the reforms would have was uncertain. Laws are often not enforced and can be abused by the police.

On Wednesday, the court urged party officials to shun Western-style judicial independence and reject “erroneous Western thought”, state media said on Thursday, as controls over the media, dissent and the Internet are tightened.

Source: Reuters “After the ‘Three Represents,’ China pushes ‘Four Comprehensives’” and “China’s top court unveils deadlines for legal reform”

Source: People’s daily “Xi’s ‘Four Comprehensives’ a strategic blueprint for China’s future”


The Agony of China’s Reforms


Few reforms succeeded in China’s thousands years of history mainly due to the agony caused by the reform. Shang Yang’s reform was the greatest. It made the State of Qin strong both economically and militarily and finally able to unify China.

However, due the agony caused by the reform, Shang Yang was cruelly killed by conservatives. Fortunately, in spite of strong conservative opposition, the sovereigns of Qin wisely carried on the reform. Pressure from other powerful states was one of the major factors that forced the sovereigns of Qin to gain the strength through the reform to counter the threat from them, especially its powerful neighbor, the State of Wei to which the State of Qin had lost quite a large part of its territory.

In a sense, Qin should be grateful to those states for the pressure placed on it by them.

The situation is being repeated in China’s current reforms.

Due to the agony caused by the reforms, major reform leaders Hu Yaobang and Zhao Ziyang fell into disgrace.

Due to the agony caused by the reforms, there was mass protest in 1989 that almost overthrew the communist regime.

Jiang Zemin led the new generation of talented intellectuals with moral integrity to exploit the panic caused by the mass protest and carry out a silent peaceful coup d’etat to substitute intellectuals’ dominance of Party and state for uneducated workers’ and peasants dominance. (See my book Tiananmen’s Tremendous Achievements Expanded 2nd Edition). He was thus able to carry on Deng Xiaoping’s reform.

However, the reform seemed to be at a dead end. It seemed that no one knew how to conduct the trickiest reform of China’s state owned enterprises. There were the popular predictions that China will soon collapse so that American Chinese writer Gordon Chang’s book The Coming Collapse of China became a best seller in early 2010s.

I said in my book that Gordon Chang knew China well and his prediction was well founded. He saw the problems China faced at that time, especially the trickiest problem in China’s state-owned sector. No one in the world has ever resolved the problem satisfactorily. The Soviet Union tried to solve the problem by privatization but collapsed as a result.

However, Jiang’s talented assistant Premier Zhu Rongji smoothly carried out the reform of China’s state-owned sector and turned it from a source of huge losses into a lucrative sector.

I said in my book that Gordon Chang failed in his prediction because he underestimated Chinese talents.

While carrying on Jiang’s reforms and economic development, Hu Jintao saw the problem of corruption, pollution and over-reliance on export and investment and put forth the Scientific outlook on development as a remedy. He had to conduct another round of economic reform for thorough economic liberalization, but he was unable to overcome the resistance from vested interests and conservatives.

Hu left Xi Jinping a legacy of rampant corruption, a stagnant economy with overinvestment and excessive local government debts and fierce power struggle between conservatives and reformists.

I have described in my book how Xi launched his anti-corruption storm, put an end to the power struggle and was happy that economic slowdown facilitated his thorough economic reform.

Now, seeing the economic slowdown, quite a few China watchers have predicted the coming collapse of China again. A typical article is Linette Lopez’s “ANALYST: China’s ‘Long-Awaited Day Of Reckoning’ Is Almost Here” at Business Insider (it can be viewed at http://www.businessinsider.com/credit-drying-for-chinas-soes-2015-1).

Ms. Lopez does not know China so well as Gordon Chang. She failed to see the huge assets Chinese central and local governments have for resolution of the debt problems. However, if Xi’s thorough economic reform fails, economic slowdown will be a prolonged reality.

Xi and his assistant Premier Li Keqiang repeatedly said that China’s reform is now in deep water due to the strong resistance of vested interests. The State of Qin successfully carried out Shang Yang’s reform as its sovereigns were able to overcome the resistance from powerful aristocrats. Now, China’s problem is whether Xi and Li are able to overcome the resistance of powerful vested interests. (As described in my book Xi has overcome powerful conservatives’ even greater resistance.)

Xi and Li are now carrying out their thorough reforms step by step smoothly. When Jiang Zemin met Henry Kissinger, he told Kissinger that China needed a strongman and Xi was strong enough. He was happy Xi was the right choice as China’s leader.

Xi has proved himself as a sufficiently strong leader by his mass line campaign and anti-corruption storm. However, according to Chinese history, a leader has to master the art for being the emperor, in which discovery, wise use and creation of bondage with talented assistants is the key for a Chinese emperor’s success. (I have described in my book that China’s current political system is the CCP (Chinese Communist Party) Dynasty with a core like an emperor.)

Only when Xi has found and appointed to high posts his loyal protégés can we be sure he is able to carry out his reforms successfully to make China the richest and strongest nation in the world.

The following is the full text of Reuters report today on China’s economic slowdown:

China’s imports slump, capping dismal January trade performance

China’s trade performance slumped in January, with exports falling 3.3 percent from year-ago levels while imports tumbled 19.9 percent, far worse than analysts had expected and highlighting deepening weakness in the Chinese economy.

Largely as a result of the sharply lower imports – particularly of coal, oil and commodities – China posted a record monthly trade surplus of $60 billion.

The data contrasted sharply with a Reuters poll which showed analysts expected exports to gain 6.3 percent and the slowdown in imports to slow to 3 percent, following a better-than-expected showing in December. The poll had also forecast a trade surplus of $48.9 billion.

The slide in imports is the sharpest since May 2009, when Chinese factories were still slashing inventories in reaction to the global financial crisis. Exports have not produced a negative annual reading since March 2014.

The dismal trade performance will increase concerns that an economic slowdown in China – originally considered a desirable adjustment away from an investment-intensive export model toward one based on domestic consumption – is at risk of derailing.

The government is expected to lower its GDP target to around 7 percent this year, after posting 7.4 percent in 2014 – the slowest pace in 24 years.

Chinese economic indicators in January and February are typically viewed with caution given the distortions caused by the shifting week-long Lunar New Year holiday, and while the analyst median estimate was for a rise, the range of estimates was extremely wide.

However the data – in particular the import data – is worrisome even after accounting for cyclical factors; last year the new year holiday idled factories and financial markets for a week in January, but this year the holiday comes in late February and January was a full month of business as usual.

“It’s a very strange data print,” said Andrew Polk, economist at the Conference Board in Beijing, noting that exports tended to be less effected by the holiday than other indicators, but added he was more concerned by the implications of the startlingly negative import figure.

“The import data suggests a substantial slowdown in the industrial sector. The first quarter looks to be pretty horrible.”

Investors had hoped that the announcement of domestic stimulus spending plans, combined with moves to ease monetary policy, including a reduction in banks’ reserve requirement ratios on Wednesday, would restore confidence and boost demand in China’s struggling manufacturing sector.

However, many analysts believe measures taken so far to boost yuan liquidity are insufficient to do much more than offset surging capital outflows. Advocates of more aggressive action will seize on the weak January trade data to support their case.

Chinese imports have fallen every month since October, seen as reflecting weak domestic demand, and the scale of January’s drop was mostly due to an across-the-board fall in import volumes of major commodities.

For example, coal imports dropped nearly 40 percent to 16.78 million tonnes, down from December’s 27.22 million tonnes, and China also appeared to cut back on its strategic stocking of crude oil imports, which slid by 7.9 percent in volume terms.

Imports from Australia and the Russian Federation, both major fuel and commodity suppliers, slid by 35.3 percent and 28.7 percent, respectively.

EUROPEAN HEADACHE

Chinese officials had predicted that monetary easing measures in Europe would boost demand for Chinese goods, and analysts polled by Reuters had also been optimistic that signs of economic strengthening in the United States would support exports.

However, the data showed that while exports to the United States rose by 4.8 percent year-on-year to $35 billion, exports to the European Union slid 4.6 percent to $33 billion in the same period.

Exports to Hong Kong, South Korea and Japan were also down, with exports to Japan slumping over 20 percent.

During 2014, China’s total trade value increased by 3.4 percent from a year earlier, short of the official target of 7.5 percent, and some analysts have raised questions about whether export data was inflated by fake invoicing as firms speculated in the currency and commodities markets.

Source: Chan Kai Yee Tiananmen’s Tremendous Achievements Expanded 2nd Edition

Source: Reuters “China’s imports slump, capping dismal January trade performance”


China Xi Jinping to Establish His Powerbase through Leadership Reshuffle


The upcoming congress will see five of the seven Politburo Standing Committee members retire. They are (from left) Wang Qishan, Zhang Gaoli, Liu Yunshan, Zhang Dejiang and Yu Zhengsheng. Photos: Xinhua, Reuters

The upcoming congress will see five of the seven Politburo Standing Committee members retire. They are (from left) Wang Qishan, Zhang Gaoli, Liu Yunshan, Zhang Dejiang and Yu Zhengsheng. Photos: Xinhua, Reuters

Jiang Zemin the core of the third generation of CCP leadership has chosen Xi Jinping as his successor as the core of CCP Dynasty with a core like an emperor (see the section “Signs of Jiang Zemin’s Intention to Have Xi Jinping Succeed Him as the Core” in Chapter 16 of my book Tiananmen’s Tremendous Achievements Expanded 2nd Edition)

Jiang is now in Beijing to help Xi deal with the tricky issues Xi is facing and establish Xi’s powerbase (see my post “Retired Chinese Leader Jiang Zemin Stays in Beijing to Help Xi” dated January 4, 2015).

I described the difficulty of succession in the section “Succession to the Core Is the Trickiest Problem” in Chapter 6 of my book:

One thing quite interesting in Chinese politics is that there are no definition, codes or rules whatever about the power of an emperor in the past and the core of CCP now. In fact, even if there are some codes or rules, there is no institution or mechanism to enforce them.

An emperor could have absolute power like Emperor Shihuangdi of Qin (259-221 BC), but might have almost no power like Shihuangdi’s successor Huhai, whose power was usurped by Zhao Gao, a eunuch.

Seeing that the sovereign power in quite a few states was usurped by powerful courtiers at the end of the Period of Warring States (476-221 BC), Han Fei Tzu, a Legalist master, wrote a book entitled Han Fei Tzu to teach sovereigns of state the art for being an emperor.

Shihuangdi’s practice of Han’s art proved its great shortcoming in failure to ensure smooth succession. In later dynasties, the art has been greatly improved and enriched. As described in my book, Jiang skilfully applied the art to establish his powerbase. I said in my book:

For the Party, the best way to have a successor to the core is to appoint the successor the posts of general secretary and concurrently the CMC (Central Military Commission) chairman, but as mentioned in Chapter 1, that general secretary and CMC chairman may only be a “daughter-in-law” (the term used by Deng Xiaoping to denote the then Politburo Standing Committee (PSC) members in Zhao Ziyang’s secret memoir. Deng regarded himself as the “mother-in-law” who had dominating power over the daughters-in-law according to Chinese tradition.) He has to obey the instructions of the core who will be the “mother-in-law”, or to a number of powerful elders, i.e. several “mothers-in-law” if there is no core.

From this, we can see how serious China’s problems are. Even in a developing country such as India, Indonesia or the Philippines, when a person is elected the prime minister or president, he naturally has the power of his office as soon as he has been elected in the parliament or inaugurated. In China, however, a Party leader elected by the Party central committee may be powerless and the country may remain dominated by the elders who hold no official posts at all. In order to really have power and be firmly established, the leader has to gradually establish his powerbase and become the core. Even if he is lucky enough to really succeed in establishing his powerbase, it will take at least several years. Anyway, it is a very difficult process because he should be skilled in applying the art for being an emperor.

To really become the core, there must not only be reshuffle to appoint one’s protégés to important posts but more importantly to create bondage with them to ensure their loyalty.

Jiang has been successful in doing so. As a result, he has always managed to have a majority of his protégés in the Politburo Standing Committee (PSC) since his retirement.

Hu Jintao, however, has not obtained the status as the core and has not even chosen by Jiang as the successor to core even though he has appointed lots of his protégés to powerful posts through lots of reshuffles. Why? Because he failed to create close bondage with his protégés. As a result, he could not rally all the members of his large and powerful Youth League faction to contend with Jiang’s Shanghai faction.

Now, everybody expect that there will be reshuffle after Xi took over the reigns, but that is not the key issues. What we are interested in is: first whether Xi will find and appoint honest and talented officials to important posts and second and more important, whether Xi is able to create bondage with them to ensure their loyalty.

The following is the full text of SCMP’s article today on the coming reshuffle in China:

Xi Jinping paves the way for leadership reshuffle

Retirements in Politburo Standing Committee strengthen president’s hand

The first change of personnel involving a Politburo member since the 18th party congress suggests that President Xi Jinping has kick-started his preparation for the semi-leadership transition at the 19th party congress when a large number of top officials are expected to retire.

Analysts said the recent secondment of Politburo member Sun Chunlan from the post of Tianjin party secretary to be the head of the party’s United Front Work Department was the first such step since November 2012, and paved the way for a major reshuffle of personnel in 2017.

Sun took over the party portfolio from Ling Jihua one week after the aide to former president Hu Jintao was placed under investigation for graft. Sun’s post was taken by Tianjin mayor Huang Xingguo, 60, an ally of Xi’s since their days working together in the coastal Zhejiang province. Huang’s promotion suggests he is likely to be elevated to the Politburo as the Tianjin party post usually comes with a seat in the 25-person body.

Analysts expect Xi to make the reshuffle his priority this year, as the upcoming congress will see five of the seven Politburo Standing Committee (PSC) members – all except Xi and Premier Li Keqiang – retire due to age.

Another six members in the Politburo, the second most powerful body, will also step down by then as they will all pass the compulsory retirement age of 68 in 2017. The remaining 12 Politburo members, excluding Xi and Li, will compete for the five PSC seats, the party’s innermost cabinet, while about 250 Central Committee members will compete for one of 11 Politburo seats.

Steve Tsang, from the School of Contemporary Chinese Studies, University of Nottingham, said top-level changes at the 19th Congress were required by retirement rules and Xi was more aware of this than anyone else.

Heading into his third year in office, Xi appears more confident with his status, having emerged as the most powerful leader in the post-Deng Xiaoping era. In the past two years, Xi has set out a vision for his two five-year terms. At the Third Plenum of the 18th Party Central Committee in November 2013, the leadership mapped out comprehensive reforms to the social, economic and government systems. At the fourth plenary session in October, the leadership agreed to overhaul the judicial system to promote “rule by law” and “constitutional rule”.

Hong Kong-based analyst Johnny Lau Yui-siu said Xi would shift his focus to personnel matters this year and next, with only two plenary sessions of the Central Committee left before 2017.

Zhang Ming, a political scientist with Renmin University, said he believed Xi would use the upcoming party congress as a platform to consolidate his status as paramount leader after Deng.

Xiaoyu Pu, professor of political science at the University of Nevada, Reno, said the contest for a seat on the Politburo and its smaller Standing Committee would depend on many factors and much remained uncertain. But Lau said Xi had probably already made a shortlist of candidates for both bodies, though he might take some time to test “the ability and loyalty of these guys”.

“President Xi might take this year and next to decide who he likes in 2017,” Lau said.

Lau said that Xi would focus on consolidating his influence in the Central Committee, the panel that selects the Politburo, by stacking it with supporters.

Analysts said Xi would use his anti-graft campaign to dismantle vested interest groups and tighten his grip on power.

The campaign has already detained and expelled from the party several allies and aides of former leaders, including former security chief Zhou Yongkang and retired general Xu Caihou, both of whom had been under the patronage of former president Jiang Zemin . Jiang is believed to be the leader of the “Shanghai faction” – which comprises officials from the financial hub – while Hu is head of the “Youth League faction” – comprised of those who once served in the Communist Youth League.

The party watchdog has detained about 30 officials at the vice-ministerial level or higher for graft since December 2012.

Zhang said the “process of purges and personnel reshuffles will likely continue through the next several months”.

Source: SCMP “Xi Jinping paves the way for leadership reshuffle”

Source: Chan Kai Yee Tiananmen’s Tremendous Achievements Expanded 2nd Edition


Retired Chinese Leader Jiang Zemin Stays in Beijing to Help Xi


Former president Jiang Zemin and family members visit Dongshan Ridge in Hainan, in photos the park posted online. Photos: SMP

Former president Jiang Zemin and family members visit Dongshan Ridge in Hainan, in photos the park posted online. Photos: SMP

Jiang Zemin in a park vehicle.

Jiang Zemin in a park vehicle.

I have pointed out in my book Tiananmen’s Tremendous Achievements Expanded 2nd Edition that there are three black boxes in China: The CCP Politburo Standing Committee (PSC), the group of powerful elders who control China behind the scene and the secret police.

I describe how Xi obtained powerful elders support for his cyclone to fight rampant corruption, official despotism, extravagance, bureaucratism, hedonism, etc. in early September during his mysterious absence (refer to Chapter 15 The Mystery of Xi Jinping’s Absence in September, 2012—Xi’s Inaction before and Xi Cyclone after His Absence of my book).

Now, as Xi’s anti-corruption storm and mass line campaign have offended lots powerful officials, Jiang Zemin has to leave his mansion of retirement in Shanghai to stay in Beijing to provide the most powerful support of the group of elders.

Those who are ignorant of China’s political system of CCP Dynasty with a core of leadership like are emperor remain naïve in their comments on Jiang’s recent appearance in Hainan.

In its report on Jiang’s appearance in Hainan, SCMP quotes Hong Kong-based political observer Johnny Lau Yui-siu as saying, “Jiang wants to warn President Xi Jinping – who has brought down several Jiang protégés including former security chief Zhou Yongkang amid his ongoing anti-graft campaign – don’t target my sons and grandchildren while I am still alive. We can see the praying tour was accompanied by the Hainan party head, which indicated some local officials still look up to him as he still has political influence.”

Obviously Mr. Lau is entirely ignorant of the fact that Jiang remains the core that has the power as an emperor and due to his mastery of the art for being an emperor, he has made satisfactory arrangement for succession so that like Deng his relatives will be protected by his successor after he died.

If Jiang had not created bondage with his successor like the bondage Deng has created with Jiang, it is no use that Jiang shows his influence now when he is alive. When his successor has established a sound powerbase after Jiang’s death and wants to punish Jiang’s relatives, nobody can help them.

Emperor Qianlong of the Qing Dynasty was a powerful emperor ruling China firmly for more than 60 years. He was able to protect his favorite corrupt official He Shen even after his retirement, but soon after he died, his successor arrested, executed He and confiscated He’s enormous assets.

He Shen was closer to Qianlong even than Qianlong’s relatives, but Qianlong could not protect He after his death even though he married his daughter to He’s son.

In fact, Jiang’s public appearance has shocking impact on the powerful officials who want to retaliate due to Xi Jinping’s investigation and punishment of their corrupt crimes.

In spite of the threat of their retaliation, Xi continued his anti-corruption storm relentlessly. He challenged their threat with his public appearance in a meal at a popular fast-food restaurant as if saying, “Come to assassinate me. I am not afraid of assassination.”

In fact, people must understand the strength of secret police in a communist country by Putin’s emergence as a Russian strongman.

Chinese secret police is not less powerful. Previously they brought down powerful conservative leader Bo Xilai by tricks to ensure Xi Jiping’s smooth succession. (Please refer to Chapter 18 The Third Black Box—The Mystery of Bo Xilai Falling into Disgrace.) Now, they are secretly protecting Xi so that Xi is able to appear in public with a small entourage.

People shall never underestimate the influence of the third black box in China.

Jiang’s words there revealed some important information but SCMP seems failing to attach importance to it. It quotes Jiang as saying, “”I will help you to promote it when I return to Beijing. The mountain will be crowded in the future”.

Hong Kong’s Singtao Daily noticed that Jiang’s words about his return to Beijing indicated that Beijing is perhaps Jiang’s permanent residence now. It gives the impression that Xi has asked Jiang to come out of retirement and help him deal with lots of tricky issues Xi is facing.

Here I give a translation of Singtao’ report on Jiang’s words:

“Jiang said to Luo Baoming the Hainan provincial Party secretary who accompanied him, ‘A famous spot with such nice scenery shall be vigorously promoted by Hainan. Beijing shall also vigorously promote it. When I return to Beijing, I will also promote it for you, then there will be a huge crowd here.’ Those words seem to hint that at present Jiang Zeming stays in Beijing permanently.”

The following is the full text SCMP report:

Jiang Zemin family steps out in public

Robust former president leads family on hike at age of 88 in possible show of strength amid Xi Jinping’s anti-graft campaign, observers say

Former president Jiang Zemin has taken a walk with family members in Hainan province, photos posted online show, in an apparent demonstration of the retired leader’s health and continuing political influence, according to observers.

It was Jiang’s second high-profile public appearance in a month.

The photos were posted on the WeChat account of the Dongshan Ridge parkland in the southern province. They showed Jiang, with his wife Wang Yeping and two other generations of their family, on their way to a mountainside Buddhist temple. They were accompanied by Luo Baoming, the Communist Party’s provincial head, and several officials and bodyguards.

“It’s a pity [that people] do not come to visit such a famous mountain in Hainan,” Jiang, 88, was quoted by the WeChat message as saying. “It’s a worthwhile trip for Jiang Zemin.”

Jiang promised Luo he would help to promote the beauty of Dongshan, the message said. “Hainan [officials] should try to promote such a nice scenic spot,” as should leaders in Beijing.

“I will help you to promote it when I return to Beijing. The mountain will be crowded in the future,” Jiang was quoted as saying.

The pictures showed Jiang and his wife in apparent good spirits while hiking, although they needed some assistance to get up and down the mountain.

The details about the family’s tour in Hainan were deleted by yesterday afternoon, but the pictures and quotes were widely picked up by media websites at home and overseas.

Some internet users and political observers noted that Dongshan in Chinese means “staging a comeback”.

Hong Kong-based political observer Johnny Lau Yui-siu said the family’s praying tour, involving three generations, suggested the former president was making every effort to protect the interests of his two sons and grandsons.

“Jiang wants to warn President Xi Jinping – who has brought down several Jiang protégés including former security chief Zhou Yongkang amid his ongoing anti-graft campaign – don’t target my sons and grandchildren while I am still alive,” Lau said. “We can see the praying tour was accompanied by the Hainan party head, which indicated some local officials still look up to him as he still has political influence.”

On December 3 – just two days before the Communist Party’s anti-graft watchdog announced the dismissal and formal investigation into Zhou – state media reported Jiang, former vice-premier Li Lanqing and current vice-premier Liu Yandong had visited the National Museum in Beijing.

“Every time Jiang makes a public appearance it has a purpose, because he is such a typical old-style Chinese leader who is unwilling to give up power,” said Zhang Ming, a professor of political science at Renmin University.

Source: Chan Kai Yee Tiananmen’s Tremendous Achievements Expanded 2nd Edition

Source: Singtao Daily “Jiang Zeming at winter resort in Hainan, Climbing Dongshan mountain to Pray for Blessing” (summary by Chan Kai Yee based on the report in Chinese)

Source: SCMP “Jiang Zemin family steps out in public”


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