Li comments unlikely to dent Xi juggernaut

“China’s opening will continue. The Yellow River and the Yangtze River will not flow backwards." When Chinese premier Li Keqiang made this declaration during a visit to Shenzhen recently, it immediately set tongues wagging about the country's future.

Then the speech disappeared from Chinese social media, giving way to speculations of a rift between Li and President Xi Jinping, as the latter is poised to retain his presidency for an unprecedented third term. The five-yearly Party Congress, set to open in Beijing on October 16, will also see Li stepping down from his post.

Li, who has a background in economics, had more or less disappeared from the state media headlines for months while Xi became the centre point of all policies, the chairman of everything.

Xi's crackdown on private businesses and push for a "shared prosperity" is driving China towards a socialist path after enjoying record-breaking growth as a freewheeling economy for the last four decades. This shift in direction and crackdown on big businesses naturally led to worries about China under Xi. So Li's speech added another dimension to the tea leaf reading by the analysts.

The goings on inside the Chinese Communist Party (CCP) always remained hazy and Beijing had projected a unified front before the world even when leaders faced headwinds.

Analysts and diplomats often had to resort to clues like state media headlines and public appearances of CCP leaders to gauge who is in favour and who is not. Going by that, it is hard to speculate Xi is facing any major challenge as he appeared in a total of 683 articles in the People’s Daily in July compared to a mere 32 featuring Li. Moreover, the news is also emerging that Xi is planning foreign visits later this year, signalling his confidence in his control over the party machinery.

So what to make of Li's pronouncements in Shenzhen? Some analysts say that his words and the act of paying respect to a statue of Deng Xiaoping are a signal to the country and the rest of the world that China will continue on its economic journey despite the recent crackdowns on high tech and real estate sectors.

But some see it as an admission by a weak premier that he failed to act as a counterweight to Xi in the party. "It is Li’s way of saying that he tried but failed, and this is goodbye," tweeted Adam Ni, who founded the widely followed China Neican newsletter.

These are the actions/words of a man found wanting against greater forces, and trying to leave his mark on the public memory. It is Li's way of saying that he tried but failed, and this is goodbye... — Adam Ni (@adam_ni) August 19, 2022

Still, it is foolhardy to think Xi has everything under control. His insistence on continuing the Zero Covid policy is throwing the supply chains into disarray while prolonged lockdowns are testing the patience of the people. The weeks-long lockdown in Shanghai recently saw frustration and anger surfacing on social media and the censors had to work overtime to remove comments targeted at the administration and CCP.

A report by a think tank on Sunday called for a change in Covid policies, but that was also taken off social media the next day. Currently, 28 cities are either completely or partially enforcing lockdown measures due to Covid outbreaks. There is no sign that Beijing is pondering changes to its Covid policies, but Chinese economists speculate lockdowns would gradually ease once the party congress is over.

Even more worrying for Beijing leaders would be the crisis in the real estate sector as people in more and more cities are now refusing to pay mortgage instalments for unfinished apartments adding to the woes of many cash-strapped builders. This could snowball into a much wider economic problem as many provinces have banked on land sales to fund government projects.

None of this is going to pave way for a coup and when the party congress opens in Beijing, the well-oiled party machinery will display the same old charade of leaders hailing the leadership and dishing out patriotic speeches about the country’s advance under the CCP.

“Don’t read the latest gossip about Li challenging Xi as anything more than gossip. Xi almost certainly will continue on to a third term, making history as the most powerful Chinese leader in generations,” wrote Dexter Tiff Roberts, who had spent more than two decades in China as a Bloomberg correspondent and is now a senior fellow at the Atlantic Council’s Asia Security Initiative.

CCP hates surprises and it is unlikely that even in the face of severe challenges they will have a sudden leadership change. The party has set aside term limits for the presidential post and declared Xi Jinping Thoughts as its guiding light. It is unlikely anything will change this immediately.

In a deep dive into the machinations that led to the rise of Xi, a senior fellow at the Asia Society Policy Institute, Christopher Johnson, argues that CCP wanted a strong leader like him to take charge and shore up the party as the opening up under Deng Xiaoping had threatened the party’s grip on power while factions linked to former President Jiang Zemin played their own games.

(Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.)