At the 20th National Congress of the Chinese Communist Party in October, it is widely anticipated that Chinese President Xi Jinping will be granted a third term as party leader, which would be unprecedented given that CCP leaders typically serve only two terms. This alone has heightened tensions for the National Congress – an event that occurs only once every five years. If granted a third term, which is already possible due to a constitutional amendment, Xi would continue to lead the CCP for an additional five years.
By amending both the state constitution of the People’s Republic of China and the constitution of the Communist Party of China, it appeared that any doubt that Xi would be granted a third term as CCP leader had been dispelled.
Instead, the tension centred on who would be promoted within the party and who would be retired from the Central Committee and Politburo of the CCP.
Then, on Saturday, completely unfounded rumours that appear to have originated on social media and been picked up almost exclusively by Indian media outlets suggested a coup was imminent and that Xi had been placed under house arrest, with the 20th Party Congress only a few weeks away.
Indeed, Xi faces numerous obstacles, ranging from controversial and ruthless COVID lockdowns to an economic slowdown that appears to be worsening. There are no indications, however, that a coup is imminent or that Xi is under house arrest. The rumours have not been verified or validated, and they are nothing more than a social media fantasy world and a disinformation campaign that ceased operations shortly after its launch.
Immediately after Xi returned from Uzbekistan, where he attended the Shanghai Cooperation Organization (SCO) Summit, it was reported that China had sentenced two former ministers to death (with suspended sentences) and four officials to life in prison. Following this, rumours of a coup centred on General Li Qiaoming as a possible organiser. Despite the fact that the sentencing of these ex-officials was part of Beijing’s anti-corruption campaign, wild rumours connected it to a coup plot.
All of this leads back to the real struggle taking place in the lead-up to the 20th Party Congress, which is over the top positions in the CCP Committee and Politburo. After the initial rumours circulated, further unfounded rumours circulated that senior military figures were dissatisfied with Xi’s open preference for Qiaoming over other senior officials. Specifically, the rumours appeared to express fear and discontent over what some may view as Xi’s attempt to give the CCP more control over the People’s Liberation Army (PLA).
Regardless of the veracity of the rumours, there is no denying that this is a pivotal moment in Xi’s consolidation of power within the CCP, and tensions will remain elevated in the lead-up.
There is much at stake. The CCP must assume full responsibility for the slowing economy, and Xi’s selections will determine the new strategy for the future.
Increasing unemployment is accompanied by a decline in consumer spending power. The Chinese economy is expected to grow by slightly more than 3% in 2022, compared to official projections of 5.5%. This decline from 8% ten years ago is attributable to the CCP.
As this unfolds, Xi is on a collision course with Western powers, whose investors he will likely attempt to persuade to remain firmly rooted in China’s manufacturing capital.
And while the rest of the world’s economies have largely brought COVID under control and learned to live with new cases without shutting down everything, Beijing’s zero-COVID policies are extremely controversial.
This past Sunday, a prominent commentator, Hu Xijin, publicly criticised Beijing and called for more thorough and transparent research. “The people must have faith in the state, but the state must also have faith in the people’s intelligence,” Hu was quoted as saying by Reuters.
None of this will cripple China or Xi. Instead, the weaknesses of the world’s economic powerhouse are currently flashing brighter and may continue to do so until the middle of next year.
David Mahon, Executive Chairman of Beijing-based Mahon China Investment Management Limited, writes, “Even though many officials, intellectuals, and business leaders are concerned that President Xi Jinping is consolidating too much power around himself, the masses of the people support his continued leadership.” “Xi may not immediately bring economic relief after the upcoming National Party Congress, but he is aware that he will soon have to offer a path to normalcy. Xi will listen to the economic and social realists around him, as he is also a realist. China will stumble into the following year, but will not fall.”
Considering that oil markets are heavily influenced by Chinese economic data, which speaks volumes about future demand, it is important to keep this in mind.
