Challenges Mount as China’s Xi Makes Bid For Third Term in Power This Fall: Author

As Chinese leader Xi Jinping seeks to secure an unprecedented third term in power at this fall’s 20th National Party Congress, his opponents within the Chinese Communist Party (CCP) will be leveraging the country’s internal troubles to undermine him, according to former diplomat and author Roger Garside.“There are tipping points … looming up in the Chinese scene of the very gravest kind,” he said, adding that these would allow rivals within the leadership to move against Xi. Garside, the author of the book “China Coup”, said that the Chinese leader is facing a combination of external and internal pressures. On the external front, the United States is ramping up scrutiny of Chinese firms’ participation in its capital markets, he said, referring to the Holding Foreign Companies Accountable Act (HFCA Act) that former President Trump signed into law in 2020. The law aims to protect investors from foreign companies that don’t comply with U.S. audit standards. Under the legislation, foreign companies that fail to comply with the Public Company Accounting Oversight Board’s (PCAOB) audits for three consecutive years could potentially be delisted from U.S. exchanges. In total, there are more than 120 U.S.-listed companies set to be potentially delisted by the U.S. Securities and Exchange Commission (SEC), including prominent Chinese tech companies, such as e-commerce company JD.com, agriculture-focused e-commerce platform Pinduoduo Inc., video-sharing platform Bilibili, and internet technology company NetEase Inc. “That route of provocation of confrontation between China and America is still a few years off, but it’s on the way,” Garside recently told Epoch TV’s “China Insider” program. Inside China, the mass lockdowns instituted under the regime’s strict ‘zero-COVID’ strategies have produced “a very vulnerable state in China, and an imperative to isolate China from the rest of the world,” he said. Analysts at Japanese bank Nomura estimate that 26 Chinese cities were implementing full or partial lockdowns or other COVID measures as of May 23, accounting for 208 million people and 20.5 percent of China’s economic output. “And internally, it’s aroused, as we’ve seen on videos from Shanghai and elsewhere, anger, indignation, and an erosion of respect and loyalty for the Communist Party,” Garside said. “But this came against a background of disastrous performance in the property sector. We’ve seen the default of major property developers,” he added. Saddled with more than $300 billion in liabilities, Chinese property developer Evergrande defaulted on payments for its offshore bonds last year. Other real estate developers including Sunac China Holdings, Fantasia, and Country Garden have also joined the list of firms struggling to meet their financial obligations. Garside expects further economic harm as home sales have decreased by more than 40 percent, and unemployment rises in big cities. Infighting The biggest challenge to Xi’s rule has come from opposition factions within the CCP, according to the expert. While Xi has done a lot over the last 10 years to centralize power, Garside believes that his position is one of being “outwardly strong, but inwardly weak.” Meanwhile, there are others in the Party who are lying low, but “anxious for their own power and wealth,” he said, adding that “they know the risks that face the Chinese regime now.” “Their calculation is, that their best hope of guarding their own wealth and power, as well as the nation’s interests, in a short- and medium-term lies in them leading the revolution,” Garside said. The author further pointed to comments by former Chinese Party Insider Cai Xia, who was a professor at Beijing’s Central Party School, to illustrate his point. In her publication “China-Us relations in the eyes of the Chinese Communist Party”, Xia wrote, “At least 60–70 percent of the CCP’s high-level officials understand the trend of progress of the modern world. They understand that only a democratic constitutional government can ensure long-term stability in China and protect human rights, personal dignity, and personal safety for oneself.” Follow Hannah Ng is a reporter covering U.S. and China news. Follow David Zhang is the host of China Insider on EpochTV. He is currently based in New York and Washington DC covering China-related news. He focuses on expert interviews and news commentary on China affairs, especially issues regarding the U.S.–China relationship.

Challenges Mount as China’s Xi Makes Bid For Third Term in Power This Fall: Author

As Chinese leader Xi Jinping seeks to secure an unprecedented third term in power at this fall’s 20th National Party Congress, his opponents within the Chinese Communist Party (CCP) will be leveraging the country’s internal troubles to undermine him, according to former diplomat and author Roger Garside.

“There are tipping points … looming up in the Chinese scene of the very gravest kind,” he said, adding that these would allow rivals within the leadership to move against Xi.

Garside, the author of the book “China Coup”, said that the Chinese leader is facing a combination of external and internal pressures.

On the external front, the United States is ramping up scrutiny of Chinese firms’ participation in its capital markets, he said, referring to the Holding Foreign Companies Accountable Act (HFCA Act) that former President Trump signed into law in 2020. The law aims to protect investors from foreign companies that don’t comply with U.S. audit standards.

Under the legislation, foreign companies that fail to comply with the Public Company Accounting Oversight Board’s (PCAOB) audits for three consecutive years could potentially be delisted from U.S. exchanges.

In total, there are more than 120 U.S.-listed companies set to be potentially delisted by the U.S. Securities and Exchange Commission (SEC), including prominent Chinese tech companies, such as e-commerce company JD.com, agriculture-focused e-commerce platform Pinduoduo Inc., video-sharing platform Bilibili, and internet technology company NetEase Inc.

“That route of provocation of confrontation between China and America is still a few years off, but it’s on the way,” Garside recently told Epoch TV’s “China Insider” program.

Inside China, the mass lockdowns instituted under the regime’s strict ‘zero-COVID’ strategies have produced “a very vulnerable state in China, and an imperative to isolate China from the rest of the world,” he said.

Analysts at Japanese bank Nomura estimate that 26 Chinese cities were implementing full or partial lockdowns or other COVID measures as of May 23, accounting for 208 million people and 20.5 percent of China’s economic output.

“And internally, it’s aroused, as we’ve seen on videos from Shanghai and elsewhere, anger, indignation, and an erosion of respect and loyalty for the Communist Party,” Garside said.

“But this came against a background of disastrous performance in the property sector. We’ve seen the default of major property developers,” he added.

Saddled with more than $300 billion in liabilities, Chinese property developer Evergrande defaulted on payments for its offshore bonds last year. Other real estate developers including Sunac China Holdings, Fantasia, and Country Garden have also joined the list of firms struggling to meet their financial obligations.

Garside expects further economic harm as home sales have decreased by more than 40 percent, and unemployment rises in big cities.

Infighting

The biggest challenge to Xi’s rule has come from opposition factions within the CCP, according to the expert.

While Xi has done a lot over the last 10 years to centralize power, Garside believes that his position is one of being “outwardly strong, but inwardly weak.”

Meanwhile, there are others in the Party who are lying low, but “anxious for their own power and wealth,” he said, adding that “they know the risks that face the Chinese regime now.”

“Their calculation is, that their best hope of guarding their own wealth and power, as well as the nation’s interests, in a short- and medium-term lies in them leading the revolution,” Garside said.

The author further pointed to comments by former Chinese Party Insider Cai Xia, who was a professor at Beijing’s Central Party School, to illustrate his point.

In her publication “China-Us relations in the eyes of the Chinese Communist Party”, Xia wrote, “At least 60–70 percent of the CCP’s high-level officials understand the trend of progress of the modern world. They understand that only a democratic constitutional government can ensure long-term stability in China and protect human rights, personal dignity, and personal safety for oneself.”

Hannah Ng

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Hannah Ng is a reporter covering U.S. and China news.


Follow

David Zhang is the host of China Insider on EpochTV. He is currently based in New York and Washington DC covering China-related news. He focuses on expert interviews and news commentary on China affairs, especially issues regarding the U.S.–China relationship.