How Secure is China’s Leadership? Part One

By Bill Stork

In the U.S., the political parties and media have their focus on the mid-term elections, and perhaps there is too much to cover and too much coverage. In China, the Chinese Communist Party has its Party Congress every five years, with the next one scheduled for this fall (date not yet revealed!). At the last Party Congress, President Xi Jinping had enough power to have scrapped all term limits on his presidency. (‘Xi’ is loosely pronounced ‘she’.) But has his power slipped? Will the Party Congress vote to restore those term limits? Will they move forward on any other limitations?

This three-part article will take a look at the current situation.

To give you a sense of how secure that leadership is, let’s get a sense of the state of affairs through three short vignettes.

China, like much of east Asia, is heavily addicted to online gaming, and much of the value in high tech companies come from their success in the selling of their games. One such company had been promoting the upcoming release of its newest game for some time. Then came the surprise announcement that the release would be delayed until some later optimal time. Upset, gamers besieged the company’s website with requests for an explanation. Soon those messages disappeared. Shortly thereafter the website was closed down. Why, why, why? Soon though, internet sleuths were able to retrace developments, and it appears that in one of the promotional pieces there was included a statement with no question mark, ‘when will the bear step down.’ Many were soon to realize in the highly censored environment of China, that a line had been crossed with the mention of ‘bear.’ Hong Kong’s South China Morning Post reported July 2017: “Disney’s Winnie the Pooh has been banned on the mainland, seemingly for no reason other than the vanity of Chinese president Xi Jinping. In 2013, a photograph of Xi walking beside former US President Barack Obama juxtaposed with one of Pooh walking with his friend Tigger went viral.

And in 2014, a photo of Xi shaking hands with Japanese Prime Minister Shinzō Abe, placed side-by-side with a picture of Pooh holding donkey Eeyore’s hoof also enjoyed massive internet fame.

The similarities were unmissable. All mentions and stickers of Winnie the Pooh and casual references to ‘bear’ have been removed from China’s internet.

Is Xi Jinping, the president of the world’s second-largest economy, so threatened by his resemblance to Winnie the Pooh that the fictional bear had to be kicked out of China, with his movies, TV series and stuffed toys banned in the country? How secure is China’s leadership?

Hong Kong’s Laura He reports this story: Jun had put his life savings of about $6 million into accounts at three small banks in China’s central Henan province. He says he hasn’t been able to access them since April.

The 45-year-old entrepreneur asked us to call him Jun for security reasons. He’s from the eastern city of Wenzhou and is just one of thousands of depositors who have been fighting to recover their savings from at least six banks in rural provinces in central China.

“I’m close to having a nervous breakdown. I can’t sleep,” Jun exclaimed.

When he tried to access his accounts online, a statement would pop up on the homepage informing him that the website was under maintenance and services would be unavailable for a while. Two months later, those services have not been restored.

The trouble began in April, when four banks in Henan suspended cash withdrawals.

“The police have opened a case for investigation into the matter.”

Runs on small Chinese banks have become more frequent in recent years and some have been accused of financial improprieties or corruption. But experts worry that a much bigger financial problem could be looming, caused by fallout from a real estate crash and soaring bad debts related to the Covid-19 pandemic. Sanlian Lifeweek, a state-owned magazine, reported in April that as many as 400,000 banking customers across China were unable to access their savings.

Rural protests are growing in size and frequency despite warnings from government officials, who often respond harshly to any form of protest.

Is this perhaps a threat for the leader of the world’s second largest economy?

Residents have been banging pans and shouting from the windows of their homes, to protest against the government-enforced Covid lockdown in Shanghai.

Residents were also heard to shout “Distribute food” as supplies run low. The lock-down is fiercely administered.

The Chinese government has been pursuing a zero-Covid strategy since the beginning of the pandemic, with the aim of keeping the country entirely Covid-free. In May, Xi Jinping personally put his leadership on the line by insisting at the supreme CCP Politburo Committee meeting that the country ‘unswervingly’ follow the “dynamic zero-Covid” policy. The committee’s concluding statement reads: “We should resolutely overcome the problems of inadequate awareness, inadequate preparation and insufficient work, and resolutely overcome contempt, indifference and self-righteousness in our thinking.” (China-watchers observed that there must have been serious push-back from within the party.)

Criticism of the government is rare in China, but residents said they have struggled to access food supplies and the government’s distribution has been sharpy criticized.

Others have been temporarily evacuated from their homes so they can be disinfected, and the isolation quarantine shelters to which they have been sent have been scorned as shoddy and unhygienic. Children have been separated from parents who tested positive. Barriers have been erected to maintain tight controls over locked-down sections.

This has caused extreme difficulty for those that need medical attention for non-Covid reasons. “There is one hospital which takes patients with fevers but we are worried about cross-infection, and other hospitals will not take patients from neighborhoods that have been locked down,” says Grace Wang, whose mother, a cancer patient, came down with a fever this week. Social workers have arranged special transport to take her and her mother to a designated hospital, on the condition that they would first test negative for Covid. “But we could not guarantee that we could get a Covid test in time, since we can only attend massive tests arranged by the community.” Her mother’s fever has gone down since, but Wang is worried about her mom’s next medical issue: Will the lock-down be lifted in time before her mother’s next chemotherapy appointment in two weeks?

Shanghai, as China’s most affluent city and one that has the highest number of western-educated residents, is usually well-behaved, but the severity and length of the lock-downs have tested its limits. In addition to the pot-banging and shouts from balconies, there are protests emerging. Shopkeepers in Shanghai staged a rare public protest on 13 June against China’s strict Covid-19 controls, which they blame for hurting their livelihoods. “How do they expect us to go on without earnings?” one woman said. The woman claimed that the authorities have ordered thousands of retailers like her on Qipu Road to pull down their shutters since March 7, to curb local outbreaks.

Chanting “tuizu” or “return our rent payment” in the morning drizzle, some protesters carried placards that read: “Return our rent or we won’t open.” Some of the protesters were taken away after refusing to disperse.

Such an event in a city like Shanghai is a rare occurrence as the CCP keeps a tight control. But the city and the country are feeling the economic pinch that the Covid policy is exacting. Shanghai’s lock-down, which affected the largest number of people of any lock-down in China since the pandemic began in 2020, has battered the economy and left many jobless. Total retail sales in April plunged 11.1% on the year, down from 3.5% in March, while the unemployment rate rose to 6.1%, the highest level since early 2020.

As Xi deprioritizes economics in following his political and social Covid path he should be loath to lose the support of the people and local leaders, especially in Shanghai.

Sources: Reuters, Washington Post, Yahoo News, NYTimes, CNN, Nikkei Times, YouTube, South China Morning Post, The Guardian

 

PART TWO

 

We welcome your comments below.