Months of heated U.S.-China trade talks were derailed in early May when Beijing suddenly backtracked on much of what had been previously agreed to with the Trump administration. This prompted increased tariffs from Washington and cast serious doubts on the possibility of any successful deal between the world’s two largest economies.
Observers immediately understood the development to show that the Chinese government was negotiating in bad faith. At first glance, it would appear that the structural economic reforms the Trump administration has been demanding China implement are irreconcilable with the goals of the Chinese Communist Party, and by extension those of Chinese president and Party leader, Xi Jinping.
What mainstream analysis missed, however, was the role played by an internal struggle between Communist Party factions in fouling Beijing’s side of the back-and-forth bilateral discussions. Though the Xi administration’s efforts at negotiations via Vice Premier Liu He were able to make headway in terms of finding common ground with Washington, entrenched interest groups and opposition within the CCP have been working to undermine Xi’s leadership by exploiting the opaque, cutthroat nature of Party politics.
Retired leaders drop hints with high-profile public activities
On April 20, Zeng Qinghong, a powerful retired official who had served as both China’s vice president and a high-ranking CCP Politburo member, made a trip to his hometown in Jiangxi Province to conduct an “inspection,” according to Hong Kong newspaper Ming Pao. Just six days later, former Party leader Jiang Zemin, a close political ally of Zeng, got media attention when a posed photo of him and his wife in Jiang’s hometown of Yangzhou, Jiangsu Province, was spread on Chinese social media. It was the first time in a year and a half that the 92-year-old Jiang had made any kind of public appearance.
Ming Chu-cheng, a professor of political science at Taiwan’s National Taipei University, explained on a local channel called Nian dai xiang qian kan (年代向錢看) on May 16 that while former and incumbent politicians’ public activities are an unremarkable occurrence in democratic societies, the movements of Party officials in China are part of complex political intrigue.
The Communist Party faction centered around Jiang Zemin was dominant in Chinese politics from around 1997 to 2012, when Xi came to power. Lacking his own network of patronage, Xi began to purge high-ranking Jiang loyalists as part of his anti-corruption campaign, beginning with Bo Xilai, the Politburo member whose involvement with an alleged coup in 2012 led to his receiving a life sentence in 2013.
“If someone like Zeng Qinghong shows his face and goes for a stroll outside, don’t think that’s all there is to it,” Prof. Ming said. “It’s very extraordinary. When these people come out, it motivates their factional allies by showing that their bosses are still in good health and looking after them.”
“The Ming Pao report noted that Zeng was accompanied by local officials and a heavy security detachment, and was warmly received by Ji’an residents,” political risk consultancy SinoInsider wrote in a May 3 article. Featured in the Ming Pao report were comments from Chinese social media saying that Zeng carried himself with an air of “official prestige.
Factional struggle in the Party is escalating
According to SinoInsider, the public appearance of Jiang faction leaders indicates that the factional struggle within the Communist Party has escalated greatly during the U.S.-China trade war, as Xi Jinping’s opponents look for openings to score political or ideological victories against him.
Apart from the Jiang faction, Xi faces stiff opposition from a variety of groups in the CCP establishment whose benefits and privileges are threatened by his anti-corruption campaign and other policies. Among them are rank-and-file Party cadres, military officers, and financial interest groups.
Cheng Xiaonong, a U.S.-based scholar of politics and economics, wrote in an analysis translated and published by The Epoch Times that at the heart of opposition to Xi “results from the extreme animosity against the senior leadership’s anti-corruption campaigns. The nostalgia for the Jiang and Hu eras is, in fact, a preference for the ‘corruption for cooperation’ policy of the previous leadership.”
On May 18, Reuters reported that Liu Shiyu, the former head of the China Securities Regulatory Commission, was being investigated by the state anti-corruption commission. According to SinoInsider, Liu is a key ally of Xi Jinping, has helped stabilize the Chinese financial system following the stock market crash of 2015. In 2017, he stated that several purged CCP officials of the Jiang faction had “plotted to usurp” Xi’s leadership.
The move against Liu Shiyu suggests that amid the crisis of the trade war and China’s economic downturn, Xi is not fully capable of protecting his own allies from criticism as his administration toes a fine line between negotiations with the United States and disloyal forces in the Communist Party.
Last December, Xi Jinping reportedly made a long list of commitments in his summit with President Trump in Argentina, many of which were hashed out by Chinese and U.S. representatives over the course of the next few months. During this trade “truce,” the United States froze tariffs at 25 percent for around US$60 billion worth of Chinese goods and 10 percent for another US$200 billion.
According to SinoInsider, Xi’s efforts at negotiation with the U.S. have placed him in an ideologically dangerous position at a time when Party propaganda has been railing against supposed U.S. aggression and pumping up the strengths of the Chinese communist system.
In China’s authoritarian political environment, appearing weak or out of line with communist ideology is dangerous, even for Party leaders themselves. In 1989, CCP General Secretary Zhao Ziyang was ousted for supporting pro-democracy protesters, and Hu Yaobang, the general secretary Zhao had replaced, was sidelined in 1987 for advocating political reforms that could have challenged the Communist Party’s authoritarian status.
According to Ming Chu-cheng, the Taiwanese professor of political science, it is unlikely that the Chinese government had always planned to renege on its prior understandings in the U.S.-China trade talks, given a large number of bilateral meetings held since the Dec. 1 trade truce. Instead, the Chinese government’s backtracking reflects the Xi administration’s attempts to stave off attacks from Communist Party rivals.
“Xi currently faces very high levels of political risk,” wrote SinoInsider in its May 19 analysis. “However, he might be able to avoid risk if he recognizes that preserving CCP rule will not ensure his self-preservation.”