Chinese leader Xi Jinping speaks at the podium during the meeting between members of the standing committee of the Political Bureau of the 20th CCP Central Committee and Chinese and foreign journalists in Beijing on Oct. 23, 2022. (Lintao Zhang/Getty Images)
What does the removal of Hu Jintao from the 20th National Congress of the Chinese Communist Party (CCP) mean for China going forward?
It means quite a lot.
Xi Has a Long Memory
First, it’s important to understand that Xi Jinping and Hu Jintao share a history that goes back decades. Hu was Xi’s predecessor as general secretary of the Chinese Communist Party from 2002–12, retiring in 2013 as Xi took power.
Hu’s era as leader of China was a mixed bag, as economic growth masked signs of strain. He has been described as a pragmatist, but supported Li Kequiang for the top leadership position that ultimately went to Xi Jinping. Li instead became premier, China’s second most powerful political position.
By publicly removing Hu from the National Congress meeting, the leader of the CCP sent a clear message that he will not tolerate any competition. In fact, on Saturday, Xi had Li Kequiang and two other members who were also supported by Hu removed from the Central Committee.
Party Loyalty Is Not Enough
The symbolism behind Xi Jinping’s very public humiliation of Hu Jintao goes even further than political competition. Members now understand that loyalty to the CCP is no longer enough. Holding various opinions on how the Party ought to proceed on a matter, even though one is unquestionably devoted to it, is no longer safe nor smart. Furthermore, as Xi’s recent purge demonstrates, expressing one’s opinions can be hazardous to one’s political if not physical longevity.
Chinese President Xi Jinping (L) looks on as former President Hu Jintao is helped to leave early from the closing session of the 20th National Congress of the Communist Party of China, at The Great Hall of the People in Beijing, on Oct. 22, 2022. (Kevin Frayer/Getty Images)
It seems that political loyalty to the CCP and personal loyalty to Xi Jinping have now become one and the same. It would appear that members’ loyalty to Xi is the litmus test for holding onto Party membership. It was for that reason that Hu was escorted out of the congress by officials on camera, midway through the day’s events at the Great Hall of the People in Beijing.
Textbook Totalitarianism
Hu’s very public purge was a textbook totalitarianism tactic by Xi, intended to put fear into the hearts of everyone. After all, if top Party members aren’t safe from being purged, who is?
Therefore, as much as these purges were political and personal, they also send a stark message to other Party members and Chinese citizens as well.
That message: to be an enemy of Xi is to be an enemy of the Party, of the State, and of China. All three of these are embodied in Xi Jinping. In short, the broader message is that no one can escape the reach of the Party (or Xi Jinping) and no one is above “removal.”
What does Xi’s behavior tell us about China in the near future?
The Growing Instability of China’s Economy
This year has driven China’s economy into its worst financial crisis in 40 years and it grows more unstable every day. The main drivers of the economy are all collapsing due to unsound financing schemes and Xi’s zero-COVID lockdowns, which keep factories and ports closed for months.
For example, real estate development, which alone accounts for 30 percent of China’s GDP, is collapsing. Evergrande, one of the country’s leading developers, is unable to pay a crushing $300 billion burden of debt. That company is just one of many in the industry that face bankruptcy.
The effect of the development sector crash is rippling throughout the economy. The steel industry is also contracting, as demand has cratered along with the real estate sector. The manufacturing sectors, such as automobiles and other durable goods, are also seeing demand fall, with lockdowns bearing much of the blame. It is estimated that 80 percent of China’s steel mills are running at a loss.
A deserted street during a COVID-19 lockdown in the Pudong district of Shanghai, China, on May 30, 2022. (Liu Jin/AFP via Getty Images)
China’s tech industries are also in trouble, losing a trillion in market value due to Xi’s crackdown. Tencent’s quarterly profits and Alibaba’s quarterly income halved earlier this year, with both companies recording their first-ever quarterly losses.
What’s more, direct foreign investment is fleeing China’s tech sector. Over $7 billion worth of investments were withdrawn from Tencent in the second half of 2022 alone. Japan’s SoftBank and Berkshire Hathaway have also recently pulled their investments in Chinese tech firms.
Will Xi Compromise for Economic Recovery?
Some observers believe that deteriorating economic conditions will force Xi to compromise on policy and liberalize the economy going forward. I don’t think this will happen, for a few key reasons.
First, in the past several years, Xi has increased repression across all quarters of China, from adding state-owned enterprises to enforcing extended lockdowns, even though it has hurt economic performance and innovation.
This has allowed him to retain power. Why should he change now? A parallel could be drawn with North Korea. Things have been horrendous there for decades, and yet the Kims have remained in power through the consistent application of deep and broad repression. China’s capabilities outpace those of North Korea, with a much larger military and a comprehensive state security apparatus in the form of its infamous social credit system.
Secondly, the specter of Gorbachev’s glasnost and perestroika—leading to the collapse of the Soviet Union—haunts the minds of Xi and the CCP.
What many seem to overlook is the fact that the source of Xi’s power isn’t economic growth, but rather, the loyalty of the CCP and its near absolute ability to exert control over the people.
Xi Jinping has set himself up as the sole authority in China—not for the sake of economic growth, but rather, with the goal of expanding his power and that of the CCP.
China will see less economic agility due to high debt loads as well as political sclerosis. Both of these require financial support or severe state oppression, which certainly will be—and has already been—ramped up. Unfortunately, the CCP is able to ramp up its surveillance, its punishments, and the like.
Recent protests indicate that Xi and the CCP are losing loyalty among the middle class. China’s middle class is sick of mass lockdowns, losing their jobs, and being locked in their homes. At least 36 Chinese cities, across 31 provinces, were under various degrees of lockdown recently, affecting about 197 million people.
Three years of mass lockdowns and unsound financing have led to economic decline, rising unemployment, lost savings, and a negative view of the future. With nearly 20 percent of workers ages 16–24 unemployed, it’s clear that Xi’s priority isn’t economic growth. His focus is on gaining an iron grip over the country, for whatever he has planned next.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
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