Economy & Trade

Analysis

Although Xi Jinping, as everywhere, retains final decision-making power over economic policy, he has limited personal knowledge, experience, or even interest when it comes to economics, preferring to focus on broader political and strategic issues (and views economics through this lens). This means that Xi has had to effectively delegate economic policymaking to others to a degree that he has not had to in many other policy areas.

Institutionally, during the Xi era the Central Financial and Economic Affairs Commission (CFEAC), directed by Xi himself, has been elevated to command supreme decision-making power on economic policy. However, much day-to-day responsibility currently falls to the far more economically-minded Premier Li Keqiang, who in addition to being deputy head of the CFEAC is also “Director” of the State Council, otherwise the most important power center when it comes to economic policy-making, along with the National Development and Reform Commission (NDRC), which is itself housed within the State Council. The People’s Bank of China (PBOC) is also influential in economic policy.

Li, however, is not a close ally to Xi, but a factional rival (and once his competition to become top leader) and a source of policy disagreement (though rumors of a significant power struggle between the two men are overblown; Xi has successfully limited Li’s influence, making him the least powerful Premier in decades). Li’s continuing presence in his current position is partially the result of Xi’s lingering political weaknesses at the 19th Party Congress in 2017, when he was unable to appoint his own factional allies to two important positions on the Politburo Standing Committee (PBSC): Premier and Executive Vice Premier, which went to Han Zheng, a Jiang Zemin faction choice. This meant that Xi’s right-hand man and top economic advisor, Vice Premier Liu He, was also left out of the PBSC. Despite this, Xi’s elevation within the CFEAC of its powerful Central Office, which Liu directs along with the State Council’s influential Financial Stability and Development Committee (FSDC), has established Liu as China’s de facto Economic Tsar since 2017. Liu has also helped establish his influence by directing key trade talks, including those that led to the 2020 deal with the United States to pause the ongoing US-China trade war.

Now that China’s economy is facing growing headwinds to growth, including from sharper geopolitical risks, Xi is especially keen to wrest full control over economic policy, including by replacing the Premier and Vice Premiers with his own picks (see full analysis on Top Leadership for more details). The individual who will replace Li Keqiang (who has himself confirmed that he will no longer serve as Premier) is therefore of significant importance for economic policy. Because the person who takes over as Premier has historically always previously served as Vice Premier, then — if historical norms and age limits are followed — there are only two likely candidates for this position if the age limit is maintained: Wang Yang and Hu Chunhua.

Of the two, Wang is significantly more likely to become Premier, given that he is already a PBSC member, is relatively close to Xi (despite having some past connections to the Communist Youth League), and his age would only allow him to serve one term (a positive for Xi, who would prefer to limit the power of any potential rivals, even his allies). In contrast, Hu Chunhua (despite his best efforts at sucking up to the boss) remains deeply distrusted by Xi due to his close connections to former leader Hu Jintao, who is also not a PBSC member, and who, more importantly, is young enough to serve for two terms, an inconvenience that would block the chances of promotion for Xi allies like Li Qiang or Chen Miner. Li Qiang was himself once considered Xi’s top pick for Premier, but his chances appear to have been set back by his poor performance leading Shanghai during recent COVID outbreaks (making Xi’s ability to promote him more difficult), as well as by his relative lack of economic management experience now that the Chinese economy is facing greater challenges.

Importantly, Xi must also identify a replacement for Liu He, who has reached official retirement age (although there is a small chance he could nonetheless be retained, potentially even as Premier or Vice President, if Xi feels he is in a strong enough a position to break multiple party norms). Here the top contender to watch is NDRC Chair He Lifeng, along with – to a much lesser degree – PBOC Party Secretary and Deputy Governor Guo Shuqing. Others such as Li Keqiang’s former chief of staff and current State Council Secretary-General Xiao Jie are wildcard possibilities. Of these, He Lifeng is by far the most likely to replace Liu, as He is deeply connected to and trusted by Xi (He was a close friend, and drinking companion, of Xi’s when both men worked in Xiamen from 1985-1988, as well as in Fujian from 2001-2002. He was even one of a small number of friends to attend Xi’s wedding.) Due to this favor by Xi, there is a small chance that He Lifeng could even leapfrog to the PBSC, becoming Executive Vice Premier; this would indicate Xi has achieved a very strong political position. In contrast, appoint of one of the other two above would likely represent a significant factional concession by Xi.

 

Policy Implications

Were Xi to further consolidate control over economic policy by seeing Wang Yang appointed to be Premier and He Lifeng appointed to replace Liu He, this would likely serve to resolve an ongoing policy debate within the Chinese system even more firmly in Xi’s favor than it already has been.

Currently, there are essentially two sides in this debate over Chinese economic policy. The first is what might be termed “Fortress China,” led by Xi and his “Xi Jinping Economic Thought,” which emphasizes the urgent need to prepare China for geopolitical competition by prioritizing economic and technological “self-reliance” and the party-state’s guidance of the economy, including through state-owned enterprises, industrial policy, and state subsidies, as well as achieving “common prosperity” by reducing economic inequality. A second group that could be called the “Reform and Opening” faction, however, feels that Xi’s economic policies have, by rolling back market-based reforms, empowering the state sector, and limiting opening to international investment, only damaged private sector confidence, undermined productivity gains, and ultimately damaged China’s economic prospects – resulting in rapidly slowing growth and threatening China’s future as a superpower. Though they cannot be described as economic liberals, they would prefer to see a turn away from strident economic nationalism and a return to more reformist and market-oriented policies.

Although Wang Yang is known for being an advocate for market-oriented reforms, he is unlikely to significantly challenge Xi’s official line if appointed Premier. He Lifeng, meanwhile, is a strong advocate of Xi’s economic policies, writing in a fawning article in June 2022 that Xi’s thought should be integrated into “the entire process of economic work in all fields.” He is also known for his attachment to infrastructure-driven growth, having so revamped the urban landscape of Fujian that he earned the nickname “Demolition He.” His appointment could increase the chances of China implementing greater stimulus spending to attempt to alleviate slowing growth. In contrast, Guo Shuqing is an exceptionally qualified economist-technocrat who is known as one of the party’s foremost advocates for market reform and financial de-risking; his appointment would likely signal a shift away from the state sector and toward greater emphasis on the private sector, capital account liberalization, and financial sector opening and deleveraging. Guo remains a less likely pick than He, however, and is more likely to end up as Governor of the PBOC (see the full analysis on Finance for additional details). Overall, a significant shift from the “Fortress China” path is unlikely – unless Xi himself changes his mind.

Foreign Affairs

Analysis

China’s foreign affairs bureaucracy has faced turbulent times over the last 15 years as it has grappled with how to chart a pathway for China to thread the needle of showcasing and advancing the country’s enhanced power and influence on the global stage without prompting a backlash from other major powers, especially the United States. With the Trump Administration’s 2017 promulgation of “strategic competition” as Washington’s default framework for managing U.S.-China ties, and the Biden Administration’s subsequent adoption of a similar approach, one can argue that China’s diplomats largely have failed in that endeavor. To be fair, however, it is reasonable to suggest that the enterprise could be likened to “Mission Impossible” given Xi Jinping’s reorientation of the country’s core foreign policy approach away from deceased paramount leader Deng Xiaoping’s “bide and hide” dictum, wherein China adopted a low-key foreign policy approach and never took the lead, and toward Xi’s “great power diplomacy” (大国外交, da guo waijiao), which takes as its operating principle that Beijing should be wielding its newfound strategic heft in the manner of a traditional great power.

Indeed, China’s “assertiveness debate,” or the battle over how forcefully China should project its resurgent power and influence on the world stage to defend what it refers to as its “core interests,” has raged intermittently — but with consistent vigor — since the global financial crisis of 2008. Xi’s immediate predecessor, Hu Jintao, struggled to stay on top of it, feeling compelled on numerous occasions to remind the Chinese Communist Party (CCP) elite that the regime continued to be guided by “bide and hide.” In fact, after a burst of Chinese assertiveness that ran throughout 2009 and into 2010, most observers assessed the leadership had moved decisively to quell the debate with the release of a major speech in December 2010 by Hu’s top foreign policy lieutenant, Dai Bingguo, entitled “Adhere to the Path of Peaceful Development.” As if to drive the point home still further, the Hu leadership followed up Dai’s treatise by separately releasing the White Paper on Peaceful Development the following September.

As it turned out, however, the leadership was only artificially suppressing the debate as part of its campaign to maintain stability and avoid controversy during the power transition from Hu to Xi. To focus on just one consequence of that decision, the Politburo largely deferred an authoritative assessment of the implications of the Obama Administration’s “Pivot to Asia” for China’s security, allowing suspicions of U.S. intentions to mount. As the departing leader, Hu was unwilling to take a firm stance that might unduly tie the hands of his successor. Likewise, Xi, still serving as Hu’s understudy and eager to avoid upsetting his position as heir apparent, was reluctant to offer, to the degree he had them, any differing opinions on how China should respond. One consequence of the ensuing policy drift was the deepening of Sino-U.S. “mutual strategic distrust,” under which mounting bilateral tensions in the security and military sphere risked getting out from under policy control.

With the leadership transition complete, and Xi’s drive to rapidly consolidate power well underway, he put his hand firmly on the scale and unambiguously telegraphed the official dumping of “bide and hide” in his address to a CCP Foreign Affairs Work Conference in November 2014. Although endorsing well-established concepts within China’s foreign policy canon such as “peaceful development” and “the period of strategic opportunity,” Xi made clear in his speech that it was high time for China to take a more active approach internationally. He argued, for example, that China’s biggest opportunity lay in the determined leveraging and further development of its strength and influence internationally. He also noted that “China should develop a distinctive diplomatic approach befitting its role [as] a major country,” in effect telling his audience that China already was a great power, and therefore should start acting like one.

China’s top diplomat, Yang Jiechi, understood Xi’s cueing about a fundamentally new approach and ran with it, crediting Xi’s speech for embodying “the central party leadership’s latest creative achievement in diplomatic theory” in his remarks at the same forum. Nevertheless, Xi has left little room for other actors or agencies in crafting China’s approach to the world. The mere advent and promotion of “Xi Jinping Thought on Diplomacy” underscores that Chinese foreign policymaking increasingly is a one-man show. In addition, as he has in other major policy areas, Xi disrupted longstanding lines of authority and policy formulation with several organizational changes in the realm of foreign and security policy.

In March 2018, for example, he oversaw the re-designation of the CCP’s former Foreign Affairs Leading Group to the newly-established Central Foreign Affairs Commission (CFAC). That move represented a notional upgrading of the foreign affairs system by putting it on par with several other commissions (such as the Central Military Commission) holding the highest rank in the CCP bureaucratic structure, and Yang was appointed the head of the new body’s administrative office. But the earlier founding in November 2013 of the Central National Security Commission (CNSC) by Xi established something of a rival for the CFAC before it was even created. Indeed, although the limited publicly available information about the CNSC’s responsibilities suggests its primary focus is domestic security, it does seem to play a role in the shaping of China’s overall foreign policy approach, as the internal release in 2021 of China’s first official National Security Strategy made clear. Its roster also appears to boast more Politburo members than that of the CFAC, giving it at least the patina of more organizational heft within the CCP hierarchy.

Moreover, Xi has added to these pressures with his emphasis on subordinating the government’s operational ministries to the CCP’s overarching control. As with other State Council ministries, the Ministry of Foreign Affairs (MOFA) has become more an implementer of policy than a designer of it, a difficult pill to swallow for an agency long used to substantial autonomy and prestige dating back to Premier Zhou Enlai’s long stint as the regime’s first and most influential foreign minister. Similarly, the State Council’s Taiwan Affairs Office (TAO), once a strong bastion of expertise and meaningful input regarding Beijing’s approach to Taipei, seems to have lost much of that influence in the Xi era. Xi demonstrably underscored these realities with his 2019 appointment of Qi Yu, an official from the CCP’s personnel arm, as MOFA’s party secretary, the first time in its history that an outsider had controlled its personnel appointments. Xi’s emphasis on “the party leads all” also has revivified the influence of the CCP’s International Liaison Office (ILO). Notionally tasked with managing the CCP’s relations with fraternal communist parties, Xi has expanded its remit in managing Beijing’s ties with a much wider range of foreign political parties after years as a backwater when the collapse of the Soviet Union left few communist parties for the office to liaise with.

MOFA also has come under repeated pressure from an increasingly nationalistic Chinese public to more forcefully assert and defend China’s interests abroad. Xi in 2021 seemed to stoke such sentiment by exhorting party cadres to “dare to struggle” and “defend the country’s sovereignty, security, and development interests with an unprecedented quality of willpower.” Against this backdrop, it is unsurprising that MOFA officials increasingly have embraced “wolf warrior” diplomacy, an assertive and unapologetic approach to managing China’s relations with foreign countries best exemplified by up-and-coming Chinese diplomats like Assistant Foreign Minister Hua Chunying and MOFA spokesman Zhao Lijian. Of course, Yang Jiechi, who joined the Politburo at the 19th Party Congress in 2017, and his number two, Foreign Minister Wang Yi, certainly are no strangers to asserting Chinese interests on the world stage. But they are more urbane officials who also spent the formative years of their careers representing a much less powerful China than their underlings, who have been molded in the crucible of a much richer country that is brimming with confidence.

Both Yang and Wang are likely to step down in the personnel reshuffle that will accompany the 20th Party Congress, leaving a substantial vacuum atop the foreign affairs bureaucracy. Yang’s position on the Politburo appears to further complicate the search for a possible successor given that the obvious choice, Wang, also is probably too old to stay in office. That said, although media and commentariat coverage at the time ascribed Yang’s Politburo appointment to a recognition by the leadership that China’s growing international stature and role required that the day-to-day work of the foreign affairs portfolio be managed by a Politburo-level official, it is possible, and even likely, that Yang’s promotion instead reflected more of a final nod by Xi to the influence of former President Jiang Zemin, Yang’s longtime patron. This supposition is bolstered by the fact that Yang arguably does not hold a candle to the last MOFA cadre to sit on the Politburo, the legendary foreign minister Qian Qichen, and that there was a 15-year gap, or three party congresses, between Qian’s departure and Yang’s arrival on the Politburo. Consequently, the Politburo seat for China’s next top diplomat is not a foregone conclusion.

If that is to be the case, however, the pool of suitable candidates seems very small. The most obvious pick would seem to be Song Tao, the former head of the ILO. At 67, Song would be eligible to join the Politburo if the age convention followed for the last several party congresses applies again this time. Song has ministerial rank from his time at ILO, putting him just a rung below Politburo membership on the CCP’s administrative ladder. His tenure in Fujian Province in the 1980s and 90s overlapped with Xi Jinping’s service there. But Song was abruptly transferred from the ILO to the CCP’s political consultative body in late June 2022, a traditional sinecure. Still, another Xi ally, Ying Yong, hit a similar career bump earlier this year, only to be resuscitated in September 2022 as China’s putative next top prosecutor, suggesting Song’s candidacy may not yet be a dead letter.

If Song is no longer viable, the only other obvious candidate to succeed Yang would be current TAO Director Liu Jieyi. That job gives Liu ministerial-level rank, putting him on par with Song administratively. Again, mirroring Song, he is a full voting member on the current Central Committee, a definite plus. He also is younger than Song and has held an impressive variety of posts within China’s foreign affairs system, having served as China’s ambassador to the United Nations, a deputy director of the ILO, and an assistant foreign minister. Liu’s possible ascent also would align with the regime’s intensified focus on Taiwan in the wake of the August 2022 visit by U.S. Speaker of the House of Representatives Nancy Pelosi to the island.

Liu’s extensive experience with an array of other countries while serving in multilateral institutions also would be valuable in advancing Xi’s campaign to court the Global South in pushing back against Western criticism of China and could facilitate the promotion of Beijing’s influence in shaping international rules, norms, and organizations. If Liu is beat out by Song, or if Xi decides to embrace a wildcard scenario by appointing a non-career diplomat to succeed Yang in administering the foreign affairs portfolio on the Politburo, Liu would be well-positioned to become the state councilor for foreign affairs, the more senior post currently occupied by Wang Yi. If Liu does leave the TAO, he likely would be succeeded by another senior MOFA official.

As to Wang’s possible successor as foreign minister, the possible list of candidates is larger. In another surprise move, Wang’s putative successor, then Vice Foreign Minister Le Yucheng, was unceremoniously demoted in June and sent to the National Radio and Television Administration. The reasons for Le’s sidelining are unknown, but it appears his brash and combative demeanor may have worn thin with Xi. With Le out of the way, MOFA’s three remaining vice ministers may have the inside track if the leadership sticks with past precedent and picks a traditional MOFA careerist to succeed Wang. In fact, since 1982, every Chinese foreign minister had previous experience as a deputy, worked in Beijing immediately before becoming minister, and was 62 or younger when assuming office.

Ma Zhaoxu is the top-ranked of Wang’s current deputies. Like Liu Jieyi, he has extensive experience serving in multilateral institutions. He also has substantial familiarity with Western countries, having served as China’s representative in New York and Geneva, its ambassador to Australia, and earlier postings in the European Union and the United Kingdom. Wang’s other current deputies are Xie Feng and Deng Li. Xie is an American specialist and has longstanding career ties with Yang Jiechi. Deng is a Middle East and North Africa expert who was China’s ambassador to Turkey before returning to Beijing to take up his current duties.

Other possible candidates to succeed Wang include Liu Haixing and Deng Hongbo. Both also are career diplomats, though they are much more junior than Wang’s current vice ministers, a probable deficit. That said, they have had direct exposure to Xi with their current positions as deputy directors in the general offices of the CNSC and the CFAC, respectively. Like Xi, Liu is a “princeling,” the scion of a high official—his father was a deputy foreign minister in the 1980s. Deng is another Yang protege, and a U.S. specialist who spent eight years in the 2010s serving as the deputy chief of mission in China’s embassy in Washington.

A final possible choice for foreign minister could be new ILO Director Liu Jianchao. Like the other candidates, Liu is a career diplomat who has served as China’s ambassador to the Philippines and Indonesia. He also did separate stints in MOFA’s Information Department and served as its spokesman for three years in the 2000s, meaning he is quick on his feet and knows how to conduct himself in the international spotlight. He also has spent time as a deputy in the general office of the CFAC and worked in the international cooperation department of the CCP’s graft-busting agency, the Central Commission for Discipline Inspection (CCDI), making him the point man for Beijing’s efforts to hunt down overseas corruption suspects, a key Xi priority. Indeed, he served for a year as the secretary of the Zhejiang provincial CCDI, a unique credential among his competitors. Still, Liu’s recent appointment to head the ILO would seem to mitigate against his becoming foreign minister unless the leadership felt he needed an additional credential to merit that appointment. Such a scenario also could explain Song Tao’s sudden transfer if, indeed, he is still on track to replace Yang. At 58, however, Liu is young enough to serve out his term at ILO and still be a possible future contender for foreign minister, state councilor, or even the foreign affairs representative on the Politburo at the 21st Party Congress in 2027.

Policy Implications

Xi’s revamp of China’s foreign policy framework to emphasize “great power diplomacy” and “striving for achievements” means Beijing’s more pugnacious approach to dealing with the world is probably a permanent feature as long as he is China’s top leader (and perhaps even if he eventually is not). His embrace of a “no limits” partnership with his Russian counterpart Vladimir Putin; his campaign to win the Global South over to China’s side in a budding global narrative competition with the West; and his push to expand China’s influence in traditional U.S. backyards like Latin America and the Middle East all point to his determination to achieve his goal of “the great rejuvenation of the Chinese nation.” Xi’s ambition seems palpable enough that he will pursue that objective even if it entails deepening the tensions with the West beyond “strategic competition” to “strategic rivalry,” and perhaps even “strategic enmity” on a scale like that between America and the Soviet Union. Although China’s future foreign policy course is not set in stone, Xi has shown enough of his instincts in his first decade in power to indicate that the outside world should expect more of the same — if not an even sharper approach — from his next term in office. As his most recent policy manifesto, the party history resolution passed at the Sixth Plenum of the 19th Central Committee in November 2021, put it succinctly, “China must not be misguided or intimidated” by foreign pushback, as “making compromises to achieve one’s aim can only lead to more humiliating circumstances.”

Against this backdrop, foreign governments should expect to see the continued firm defense of China’s territorial claims in places like the South and East China Seas, increasing pressure on Taiwan in response to perceived U.S. erosion of its commitment to the One-China Policy, and the steady deployment of economic coercion in pursuit of foreign policy goals. Catchphrases like “the East is rising and the West is declining” and “changes unseen in a century” generally are interpreted as signs of Xi’s overconfidence that China will triumph in its effort to supersede the United States as a global power. Although that is no doubt true in some respects, it ignores the equally clear flip side of that equation, which is the Politburo’s acknowledgment that the inevitable decline of the West in their minds will be accompanied by tremendous chaos in the international system. The United States may be in decline, but that does not make it weak, in Xi’s view. In fact, it is a dysfunctional but still powerful America that Xi and his Politburo colleagues see as the greatest foreign policy danger to China’s rise for at least the next decade. Whether the team that will replace Yang and Wang is up to the challenge of managing that fraught environment and associated paranoia it likely will engender among Xi and the rest of the senior leadership will be a fundamental test of China’s foreign policy bureaucracy.

Finance

 

Analysis

There is substantial overlap between China’s top macroeconomic leadership and leadership of the financial sphere, although greater separation and important differences emerge at the ministry level and below. As with economic policy, the key leader in finance (other than Xi Jinping) has long been Xi’s right-hand man and top economic advisor Liu He, Vice Premier of the State Council and Director of the influential Central Office of the Central Financial and Economic Affairs Commission (CFEAC), which is the supreme decision-making body for both financial and economic issues (headed by Xi). Liu also heads the powerful Financial Stability and Development Committee (FSDC) of the State Council, which was set up after China’s 2015 financial crisis with the authority and mandate to essentially do whatever it takes to regulate systemic stability. Liu has therefore been elevated to almost fully oversee the direction of financial affairs.

 

Liu He is over the official retirement age, and therefore is very likely to either retire or at least be moved to a less formal position (though this norm could be broken if Xi believes he is an exceptional political position), the selection of his replacement as Vice Premier is likely to have a significant impact on the overall direction of financial policy in China. Currently, the top candidates for his position appear to be He Lifeng, Chair of the National Development and Reform Commission (NDRC), and Guo Shuqing .

 

Below the CFEAC and FSDC, the PBOC and the Ministry of Finance (MOF) encompass the next level of institutional leadership, and run day-to-day affairs in the financial policy space. The English names of these institutions may be misleading, as the Mandarin word for “finance” in Ministry of Finance, caizheng (财政), is distinct from another Mandarin word also commonly translated into English as “finance,” jinrong (金融), which is closer to the common English business usage. In short, the caizheng “finance” of the Ministry of Finance is public and government finance, or what would more commonly be understood internationally as the role of a “Ministry of the Treasury.” In contrast, the PBOC, having a significantly broader mandate than most countries’ central banks, is more generally responsible for management of China’s finance sector, including private sector finance. The MOF is currently headed by Liu Kun, and the PBOC by Yi Gang.

 

If Guo Shuqing does replace Liu He as Vice Premier, Yi Gang is likely to remain in his position. However, if He Lifeng takes that position, Guo may take over as PBOC Governor (with someone else becoming his deputy), while Yi Gang would then likely retire (or move to a deputy national-level position to extend his influence). There is also a chance Guo could retire as well if he does not become Vice Premier to replace Liu and is not shifted to another seat. Minister of Finance Liu Kun, meanwhile, is very likely to retire, as he is past the retirement age limit (65) for ministers who fail to make it into a deputy national-level leadership position (where the age limit is 68). There is still a chance, however, that he could also be retained in a different capacity, such a semi-retirement to the National People’s Congress (NPC), where he once worked. This is accentuated by his personal connections to He Lifeng (his undergraduate classmate at Xiamen University), which might factor into his retention. But if Liu Kun is replaced, likely candidates include Ding Xuedong, currently Executive Secretary-General of the State Council, and Liao Min, currently MOF’s third-ranked official and concurrently a trusted associate to Liu He at CFEAC’s Central Office.

 

In recent years, however, Xi and Liu He have successfully downgraded the influence and independence of both the PBOC and MOF, further centralizing power at the top. While previously the Governor of the PBOC would have been simultaneously appointed Party Secretary of the bank, and been assigned the high rank of a deputy-national leader, Xi notably did away with this norm in 2018. At that time, Yi Gang was appointed as PBOC Governor, but not as Party Secretary, with that position going to Guo Shuqing, who was also named Deputy Governor. This effectively forced Yi (who remained only an Alternate Member of the Central Committee) to share power with Guo (a Full Member). This cunning move ensured that neither man could leverage as much influence as Liu He, who had been elevated with the creation of the FSDC in 2017. It is also typical of the method Xi has used to carefully maneuver personnel appointments so as to limit potential rivals’ power while still retaining the most skilled officials in important technocratic positions.

 

Xi may have also sought to constrain Yi Gang and Guo Shuqing’s power in part because he had by 2018 become alarmed by the significant concentration of finance officials with patronage ties to Vice President Wang Qishan and/or Wang’s own patron, former Premier Zhu Rongji. Between the early 1990s and 2018, nearly every high-ranking financial official had such ties. While Wang was for decades among Xi’s closest allies and personal friends, this appeared to change suddenly after 2018, culminating in the 2020 investigation and arrest of Wang’s long-time right-hand man, Dong Hong, and Wang’s gradual marginalization by Xi. Why exactly this sidelining of Wang occurred is unclear, but it is possible that Xi identified the highly-influential Wang and his network as a political threat.

 

Despite this high-level factional intrigue, the vast majority of finance officials are distinctly technocratic, with no visible political affiliations or maneuvering. One of the few distinguishing features among these younger officials is that a highly disproportionate share of them are graduates of Renmin University (notably, Liu He himself is a graduate of Renmin). University networks are often important within the Chinese system, so the Renmin group may bear watching as potentially a new emerging center of influence within the financial system. Additionally, He Lifeng’s network from Xiamen University is also likely to benefit, should he take over Liu He’s position.

 

Many of the officials that compete for leadership of the MOF and PBOC will end up heading the next layer of finance institutions after the 20th Party Congress, including the CBIRC and China Securities Regulatory Commission (CSRC), followed by China’s major state banks, such as the Industrial and Commercial Bank of China (ICBC) and China Development Bank (CDB). Key figures to watch for likely promotion include: CFEAC Deputy Director Han Wenxiu, Vice Minister of Finance Liao Min, CSRC Chairman Yi Huiman, State Administration of Foreign Exchange (SAFE) Director Pan Gongsheng, ICBC Chairman Chen Siqing, CDB Chairman Zhao Huan, and Beijing Deputy Party Secretary Yin Yong.

 

Policy Implications

 

At least in the West, Guo Shuqing is widely considered to be the more qualified pick to take over Liu He’s key role. A technocrat who worked under China’s legendary market-oriented economist Wu Jinglian, Guo has deep experience in leading multiple financial regulatory bodies, and once earned the nickname “Whirlwind Guo” for the speed with which he helped modernize China’s capital markets. If Guo were to take over Liu He’s portfolio, it could signal a renewed commitment to market-based reform, financial opening, and capital account liberalization— although Xi Jinping would still retain the ability to ultimately set policy, potentially limiting any significant change in direction. In contrast, He Lifeng (who is the more likely candidate) is most closely aligned with and known as an advocate for Xi Jinping’s more protectionist and state-oriented economic and financial policies. And while he has some background in economic management (including working with Liu over the past five years), he is less experienced than Guo and has no significant experience with finance-specific measures. His appointment would likely signal a deepening commitment to China’s current economic and financial course under Xi, including tighter controls on private capital. Which personnel take over the PBOC and MOF, and other financial regulatory bodies may also help signal some change or continuity in policy – but only to a limited degree. Ministerial-level leaders have no significant ability to drive policy in any direction different from decisions made at the top, and ultimately by Xi himself. The more significant signal sent by the decisions made on who ends up where in these institutions will be on Xi’s overall political strength and ability to maneuver rising factional allies into choice positions.

Security

Analysis

 

President Xi Jinping appears to be on the cusp of finally cementing his personal control over the one key Chinese Communist Party (CCP) “system” (系统, xitong) of the regime’s control bureaucracy—the security and intelligence apparatus—that arguably has eluded his grasp in his first decade in power. Having long since established his grip over the other two major “systems” Mao Zedong famously described as “the gun” (the military) and “the pen” (propaganda), Xi has turned his attention deep in his second term to wresting control of “the knife” (the security apparatus). China’s vast security services are primarily made up of the country’s uniformed police force, the Ministry of Public Security (MPS); the civilian intelligence arm, the Ministry of State Security (MSS); and also the legal apparatus and the court system, as manifested in the Supreme People’s Procuratorate (SPP), China’s top prosecutorial body, and the country’s high court, the Supreme People’s Court (SPC). The CCP maintains its supervision and control over these nominally state-directed agencies through its Central Political and Legal Affairs Commission (CPLAC).

 

Xi’s path to bringing this xitong under his personal control has seemed to be a somewhat tortured one. Early in Xi’s tenure after assuming power in 2012, almost all of the leading posts within the security and legal apparatus were under the control of officials associated with the network of former Chinese President Jiang Zemin and his longtime lieutenant and former Vice President Zeng Qinghong: the CPLAC was led by Jiang crony Meng Jianzhu; the MPS by Zeng associate Guo Shengkun; the MSS by the Jiang-friendly Geng Huichang; and the SPP by Jiang loyalist Cao Jianming. The SPC, separately, was headed by Zhou Qiang, an associate of former President Hu Jintao. It seemed the best that Xi could muster at the time was to secure the downgrading of soon-to-be purged security czar Zhou Yongkang’s portfolio from a seat on the Politburo Standing Committee — China’s top decision-making body — to the full Politburo under Meng Jianzhu’s stewardship with the contraction of the Standing Committee from the previous nine members to seven at the 18th Party Congress that elected Xi as top leader. Even so, as the rising leader at the time, this probably was a consensus decision, even if one that suited Xi’s interests by cauterizing the immediate potential challenge to his smooth accession to top leader. Moreover, Xi faced equally daunting challenges down the ranks within the MPS and MSS, where most of the key vice ministers also were not his acolytes. Although Xi’s motives for not taking a more aggressive posture early on toward bringing these powerful coercive agencies under his personal control probably are unknowable, his decisive action to cement his grip on the Chinese military, the People’s Liberation Army (PLA), at this time likely suggests that he viewed that effort as the more pressing objective within the scope of his ability to effect significant change as China’s newly-minted top leader.

 

Indeed, Xi’s initial forays in taking on the security bureaucracy seemed fairly cautious and deliberately rooted in justifiable causes beyond a transparently naked power grab to make the security services his personal instruments. For example, an MSS vice minister allegedly was removed from office in 2012 after a counterintelligence investigation suggested that his personal assistant had been spying for the United States. Similarly, Liang Ke, then the head of the Beijing State Security Bureau — the crown jewel in the network of local provincial and municipal bureaus under the MSS — was removed in 2014 for his alleged ties to Zhou Yongkang, as was MPS Vice Minister Li Dongsheng two years later. Even MSS Vice Minister Ma Jian, the ministry’s long-serving counterintelligence chief, was ousted in early 2015 for his alleged ties to fugitive Chinese businessman Guo Wengui. Still, Xi remained fairly cautious in purging other senior security officials, relying mostly on retirements and transfers of senior police officials to remove the deadwood associated with his predecessors.

 

Xi also appeared to adopt organizational solutions as an interim method for bringing the sprawling security apparatus more directly under his control while he focused his energies regarding personnel purges on the PLA in his first five years in office. The announcement of plans to establish what is now called the CCP Central National Security Commission (CNSC) at the Third Plenum of the 18th Central Committee in 2013, for example, was consistent with the broader pattern Xi has demonstrated of creating new senior CCP bodies, all of them chaired by him, that serve to at least short-circuit, if not completely rewire, established lines of authority and policymaking processes across the regime. Although many observers at first expected the CNSC might serve as China’s analogue to the US National Security Council, it quickly emerged that the new body had more of a domestic focus than a foreign one.

 

The CNSC remains one of the most shadowy organizations in an admittedly opaque CCP enterprise, with its official size, staffing, powers, and policy remit remaining unclear, at least in the public domain. Xi chairs the group, and his chief of staff, Politburo member and CCP General Office Director Ding Xuexiang, is rumored to be the head of the group’s general office, the CNSC’s administrative nerve center. Of note, MSS Minister Chen Wenqing serves as Ding’s deputy “in charge of daily work,” but still is clearly subordinate to Ding. Although that arrangement is natural given Ding’s seniority to Chen, it serves to highlight how Xi has used the NSC to bring the previously fairly autonomous security services under the more direct supervision of the top political leadership. Liu Haixing has also played a key role as another deputy director of the CNSC’s general office over the last five years but appears to be a possible next Foreign Minister, so may soon depart.

 

Indeed, it is possible, and perhaps likely, that Xi may have sought the downgrading of the CPLAC chairman from membership on the Politburo Standing Committee(PBSC) to the full Politburo with the intent of launching the CNSC, just a year later, already in mind. Moreover, given the dramatic changes to the PLA’s command structure also announced at the 2013 Third Plenum, and those reforms’ central role in facilitating Xi’s efforts to disrupt entrenched political networks in the PLA high command, it is logical that the announcement of the setup of the CNSC at the same meeting may also have been designed to play an analogous role in the security and intelligence services at some future point.

 

Whatever the exact machinations involved with the standup of the CNSC, with the PLA firmly in hand by the 19th Party Congress in 2017, Xi seemed energized to shift his campaign to bring the security bureaucracy to heel into high gear with a similar anticorruption pogrom there. The first salvo was the arrest of another MPS vice minister and concurrent chief of Interpol, Meng Hongwei, in October 2018. But the campaign really took off with the launch in July 2020 of a Mao-style “education and rectification” campaign within the CPLAC.

 

Official media accounts from the campaign’s launch compared it with the CCP’s Yan’an Rectification Movement (1942–45), which witnessed Mao’s sweeping purges of the party ranks to establish his unquestioned position as party leader. For such a sensitive and major effort, it is striking that the lead actor has not been Guo Shengkun, who rose to the Politburo and CPLAC chairman in 2017. Instead, the campaign is being managed by Guo’s technical subordinate, Xi lieutenant and enforcer Chen Yixin, who already appears to be in day-to-day operational control of the CPLAC despite only serving formally as its secretary-general.

 

The campaign has proceeded swiftly, taking down then head of the Shanghai police, Gong Daoan, only a month after its inception. By the end of 2021, Gong and several others already had stood trial for their offenses, a breakneck pace for corruption cases to make it through the full judicial process in the Chinese system.

 

Saving the best for last, in July 2022, the party finally put on trial former Vice Minister of Public Security Sun Lijun and former Justice Minister Fu Zhenghua. In an ironic twist, Fu in better days supervised the investigation into Zhou Yongkang. Fu and Sun were charged with colluding with each other in antiparty activities, among other crimes, though Sun’s case seemed the more serious. His bribe taking dwarfed that of Fu, and Chen Yixin told law enforcement and judicial officials in early July that the investigation to weed out Sun’s influence “was not over.”

 

The common thread in the cases of Sun, Fu, Gong, and others seemed to be their overlapping connections with Meng Jianzhu, suggesting that Xi may want to bring the rectification effort to a crescendo by cashiering Meng from retirement in the manner of Zhou Yongkang — or he at least wants Jiang Zemin to know that he could. Similarly, the surprise late July detention of Minister of Industry and Information Technology Xiao Yaqing (see Technology analysis) may bode poorly for Guo Shengkun, who has ties to Xiao through their mutual service in China’s non-ferrous metals industry earlier in their respective careers.

 

Turning to some of the likely outcomes of the 20th Party Congress that will affect the security and intelligence system going forward, Xi Jinping already is demonstrating that he is poised for a major win. After an almost uncomfortably long period as MPS CCP secretary and minister-in-waiting, Xi ally Wang Xiaohong was formally made China’s top cop in late June 2022. Several former associates of Wang also recently have been transferred to important posts within the MPS and its network of provincial and municipal public security bureaus. Wang could move to a more senior post after the party congress reshuffle, but it is more likely that he will remain at MPS and also replace his predecessor, Zhao Kezhi, in the traditionally concomitant post of state councilor when the leadership turnover in the state government agencies is completed in March 2023.

 

In the MSS, Chen Wenqing is young enough to serve a second stint as minister, as has been the case for several of his predecessors, and he is said to have forged close ties with members of Xi’s patronage network in Fujian Province while serving there as head of the provincial CCP disciplinary agency from 2006-2012. In early September, another Xi ally, Ying Yong, was confirmed in a new position as China’s number two prosecutor within the SPP. Ying’s appointment came as something of a surprise given his move just a few months before to what traditionally has been a sinecure post in China’s national legislature. Ying is likely to be promoted to procurator-general in the spring, succeeding Zhang Jun. Zhang may, in turn, move to become China’s top judge. Although he does not have direct patronage ties to Xi, Zhang’s track record in a series of legal and judicial appointments has confirmed him to be much more in line with Xi’s emphasis on subordinating the courts to CCP control than current SPC President Zhou Qiang.

 

Within the CPLAC, the prospects of Xi hatchet man Chen Yixin also look bright. He has a strong chance to succeed Guo Shengkun as CPLAC chairman, but he could also be in line to replace Ding Xuexiang at the CCP General Office should the latter win promotion to the PBSC at the party congress. In addition to his current duties overseeing the “education and rectification” effort within the security and intelligence system, Chen previously was dispatched by Xi to Wuhan at the height of the original COVID-19 outbreak there to ride herd on local officials who had failed to gain control of the crisis, proving that Chen has Xi’s complete confidence. Xi also is placing his lieutenants further down the rank structure of the CPLAC — in May 2022, Lin Rui, a Xi associate from Fujian who also has ties to Wang Xiaohong, was appointed deputy-secretary general of the CPLAC, leaving him poised to potentially succeed Chen Yixin if Chen moves up or is promoted elsewhere.

 

Policy Implications

 

Xi’s expected success in putting the security, intelligence, and legal affairs apparatus firmly under his control at the party congress is likely to continue the broad pattern of the “securitization” of the regime during his tenure. Under the banner of his concept of comprehensive national security, the definition of “national security” in China has been dramatically expanded to include at least 16 forms of security: military, territorial, technological, ecological, societal, polar, cyber, space, cultural, political, economic, biological, deep sea, resource, nuclear, and overseas interests. Xi also has sought to weave a seamlessly integrated fabric of mutually reinforcing security, legal, and disciplinary frameworks under his comprehensive national security umbrella.

 

In fact, one notable feature of Xi’s new, much broader definition of national security is the more regular transfer of officials within and between the various corners of the regime’s control bureaucracy. Of particular note has been the phenomenon of officials with experience in the CCP’s disciplinary apparatus, the Central Commission for Discipline Inspection (CCDI), moving into security roles and vice versa. Once much more rigidly stove-piped and isolated bureaucracies, the move toward greater cross-fertilization between these critical control agencies arguably increases the efficiency and effectiveness of the CCP’s security enterprise. The steady expansion during Xi’s tenure of the CCDI’s remit beyond just fighting corruption and toward also serving as the guarantor of tight adherence to regime policy orthodoxy — including on economic and other policy issues as mentioned above — also serves to enhance the natural affinity between it and its more traditional security agency brethren.

 

As part of that process, Xi’s enhanced control may also lead to a further articulation of the roles and responsibilities of the CNSC as an integrative “supra-body” going forward. Consequently, a security, intelligence, and legal apparatus under the unquestioned control of Xi’s lieutenants is likely to see the further tightening of all forms of social control—whether in the physical or the digital realm—as well as the further promotion of the culture of a China besieged by spies, saboteurs, and “hostile foreign forces” seeking to overthrow the CCP regime through a “color revolution.” That, combined with Xi’s harping on an ever-expanding list of “risks” confronting the regime from “changes unseen in a century” in both the domestic and external arenas, portends a more paranoid and sharper CCP regime under Xi’s third term and beyond.

Military

Analysis

China’s military, the People’s Liberation Army (PLA), has a storied political tradition in the development and maintenance of Chinese Communist Party (CCP) rule over the regime’s one-hundred-year history. At critical watersheds for the party’s future direction, or even its survival — such as the arrest of the Gang of Four in 1976 and the 1989 Tiananmen crackdown — the PLA played a decisive role in helping top leaders navigate the crisis. In those moments, the PLA underscored its status as the armed wing of the CCP (as opposed to the national military of China), whose principal function is to serve as the ultimate guarantor of CCP rule. The PLA high command also extracted a fairly hefty political price for its loyalty in those earlier periods. For example, in the Politburos elected at the 11th Party Congress in 1977 and the 12th Party Congress in 1982, military leaders made up at least half of the full membership and one-third of the respective seats on the Politburo Standing Committee, China’s top decision-making body. This was partly due to generational factors, in that many of the CCP’s senior leaders at that time were revolutionary-credentialed individuals with at least some military background. Nevertheless, even paramount leader Deng Xiaoping struggled at the time to reduce the political influence of his uniformed peers, requiring the convocation of an extraordinary “National Conference of Delegates” in September 1985 to finally push most of them off the Politburo.

When Xi Jinping rose to power in 2012, he clearly sensed that the CCP was potentially facing yet another moment of crisis, but this time the PLA high command was seen as a major cause of it rather than the probable solution. Serving initially as understudy to President Hu Jintao, including a two-year stint (2010-12) as vice chairman of the CCP Central Military Commission (CMC) — China’s top military policy-setting body — Xi witnessed a military that, although ultimately subordinate to party control, took advantage of its particular monopolies, mainly on expertise and the control of information flow, to establish vast operational gray areas within which its leaders were able to exert substantial autonomy and therefore outsize policy influence. Illustrative examples included China’s 2007 antisatellite test and its 2011 test flight of the PLA’s prototype J-20 stealth fighter during a visit of U.S. Defense Secretary Robert Gates, where it seemed that Hu had little control over, and perhaps even little awareness of, what his military was doing.

Moreover, and far more worrisome to Xi than these subtleties of civil-military relations, was the perception that the PLA’s senior officer corps had become so corrupt that the civilian leadership could not be assured that the military would respond swiftly in a crisis. These concerns no doubt were amplified as the Politburo watched the Egyptian military stand idly by as former president Hosni Mubarak was deposed without a shot fired in early 2011. Guo Boxiong and Xu Caihou — then members of the Politburo, the top two uniformed officers on the CMC, and in charge of the PLA’s operational forces and its personnel system, respectively — were, through the selling of office and military rank, effectively creating a private army loyal to them within the PLA. As the party history resolution passed at the Sixth Plenum of the 19th Central Committee in November 2021 flatly stated, “For a period of time, the party’s leadership over the military was obviously lacking. If this problem had not been completely solved, it would not only have diminished the military’s combat capacity, but also undermined the key political principle that the party commands the gun.” Guo and Xu also served as the instruments for former President Jiang Zemin to retain a strong hand in military affairs well beyond his official retirement, encumbering Hu Jintao’s ability to consolidate power and leaving Xi concerned their remnant protégés in the high command might similarly handicap him.

Xi’s response to these looming challenges was swift. In what can best be described as “political shock and awe,” he has used the twin weapons of a withering anticorruption purge of the high command and a major retooling of the PLA’s command structure to disrupt and neutralize major PLA organizational and personal networks:

At the November 2013 Third Plenum of the 18th Central Committee, Xi decided to include in the public “Decision” document the fact that the PLA would undergo a substantial structural reorganization, a prelude to the sweeping changes to the PLA’s command system that have since been realized. Xi’s predecessors had tried to initiate such reforms before but were always thwarted by the political power of the PLA. Indeed, the establishment of a separate PLA Army headquarters equal to the military’s other service commands highlighted Xi’s breakdown of the political power of the long-dominant PLA ground forces.

Xi then conducted an artful piece of political stagecraft in November 2014 by taking advantage of the 85th anniversary of the 1929 Gutian Conference to convene an important meeting regarding the PLA’s status as the party’s army. The resolution of the original Gutian Conference established the principle of the PLA’s subordination to the party and stated that the purpose of the military was “chiefly for the service of political ends.”

In his speech at the 2014 conference, Xi described the misdeeds of Xu Caihou in detail, making clear that most of the senior generals in attendance were at least indirectly complicit in the pay-for-promotion schemes that Xu, Guo, and other generals were running. The result was to put the entire high command on notice that no one was safe from the unfolding anticorruption campaign and that Xi intended to firmly establish his personal control over the PLA in the same manner that Mao had before him. It is no accident, therefore, that PLA representation from the 18th to the 19th CCP Central Committees witnessed a massive (85 percent) turnover as Xi ripped out the remnant followers of Guo and Xu root and branch.

The powerful combination of highly-disruptive force restructuring and the threat of imprisonment for corruption paved the way for Xi to launch further initiatives to bring the military properly to heel. These included the advent of the “CMC Chairman Responsibility System,” which emphasized the top civilian leader’s grip over the military compared with the “CMC Vice-Chairman Responsibility System” under Jiang and Hu, in which their uniformed notional subordinates had de facto control. With the sudden purge of two more senior generals for corruption on the eve of the 19th Party Congress, Xi capped his victory by shrinking the CMC’s membership from the unwieldy 11 members it had for more than a decade to seven, further concentrating his influence.

Against this backdrop, Xi can be credited with “depoliticizing” the PLA in the sense of the presence of contending political interest groups of officers loyal to a particular member of the high command or to an individual senior civilian leader other than Xi. This has been no mean feat; such networks existed throughout the respective rules of Deng and Jiang, and, to a lesser extent, even under Hu. There are no credible indications that a non-Xi-aligned interest group of senior officers exists at present, however. Of course, personal networks (guanxi) are a deeply-engrained feature of Chinese culture, suggesting that it is not impossible that such a group could form over time. That said, the dismembering and downgrading of the PLA’s once formidable “General Departments” under Xi’s command restructuring have substantially reduced the potential for powerful independent fiefdoms to exist that could even hamstring Xi’s military policy agenda, to say nothing of posing a direct threat to his grip on power.

Consequently, the reshuffle of the PLA representation in the Central Committee and its more senior bodies that is sure to accompany the 20th Party Congress is likely to lack substantial political implications. Four of the six uniformed members of the current CMC, including both of its vice chairmen, probably will retire due to age, creating several vacancies for rising generals. The two current members who can theoretically remain by established age criteria—Director of the CMC Political Work Department Admiral Miao Hua and Secretary of the CMC Discipline Inspection Commission General Zhang Shengmin — both are from the PLA’s political commissariat, making it likely that only one of them could be promoted to one of the two presumed vice chairman slots on the CMC and one of the uniformed seats on the Politburo. Miao may have the edge given his already more direct standing as the PLA’s top political minder, whereas Zhang has a more niche background as the PLA’s chief disciplinarian. Miao also served in the former 31st Group Army (now the 73rd under the PLA restructuring) in Fujian Province when Xi was the governor there. Still, Zhang was Xi’s choice to replace the last senior protege of Guo and Xu, General Du Jincai, in 2017, strongly suggesting he has Xi’s trust. Regardless, however, a vice chairmanship for either Miao or Zhang would mark the formal return of a career political officer to one of the two top uniformed positions following the purge of Xu Caihou, the last commissar to hold that post. It also would highlight the PLA’s trendline toward stronger jointness following the command retooling as Miao is from the Chinese Navy and Zhang served in the PLA Rocket Force earlier in his career.

As to the other CMC vice chairman slot, it is likely to go to a career ground forces officer given the PLA’s strong historical tradition of promoting Army officers. The two most likely candidates for that post appear to be current commander of the PLA Ground Force General Liu Zhenli and PLA Eastern Theater Command Commander General Lin Xiangyang. Liu and Lin seem almost equally matched to rise to the post of CMC vice chairman. Liu is one of the few senior officers in the PLA with combat experience, having served in a unit that participated in the Sino-Vietnamese border clashes in the mid-1980s. He also has important experience in roles related to the PLA’s domestic security function, having commanded its 38th Group Army, the traditional anti-coup force outside Beijing, as well as serving as chief of staff of the People’s Armed Police, the regime’s rapid-reaction paramilitary police force designed to quickly suppress potential civil unrest. For Lin’s part, he has strong career ties to Fujian, including serving as the deputy commander of the 31st Group Army. Since 2016, he has been rapidly promoted and transferred through a series of group army and theater commands that certainly give the impression he is on the fast track for higher office. His direction of the recent military exercises around Taiwan in the wake of U.S. Speaker of the House of Representatives Nancy Pelosi’s visit to the island also would enhance his stature going into the 20th Party Congress. The consolation prize for whoever loses the race for a CMC vice chairmanship probably will be to succeed General Li Zuocheng as chief of the CMC Joint Staff Department, which would entitle the new chief to a seat on the CMC as a regular member.

The most likely contenders for the other available seats on the CMC are harder to determine, and, as noted above, also may not matter much in terms of the PLA’s political role. One key factor will be whether the revamped CMC structure from the 19th Party Congress will remain the same coming out of the 20th Congress. The current configuration has something of a hasty or slapdash feel to it, which may have resulted, in part, from the last-minute purge of two top generals—chief of the CMC Joint Staff Department Fang Fenghui and Director of the CMC Political Work Department Zhang Yang—just ahead of the convening of the 19th Congress in 2017. Both men looked on track to rise to vice chairman of the CMC, so their hasty removal suggested that Xi saw something he did not like that prompted their ouster. With the political situation in the military seemingly far more in hand going into the 20th Congress, it is possible Xi will want to make additional structural changes to the CMC’s membership to underscore his control of the PLA.

Policy Implications

With the factional battles of old within the PLA largely being a thing of the past, and the greater professionalization of the force through Xi’s command restructuring efforts and a military modernization campaign now spanning more than a quarter century, the battles inside the high command going forward are more likely to mirror the budgetary fights and inter-service rivalries more common among the world’s other advanced foreign militaries. Indeed, as China’s leaders clearly signal an intent to shift toward a lower growth economic model to meet other pressing priorities, the rapid increases in the official PLA defense budget of the last two-plus decades that sustained modernization and expansion across the force may come under increasing pressure in the coming years. Xi also has set ambitious targets for the PLA’s modernization and the advancement of its forces’ operational art by the time of its centenary in 2027.

Although those benchmarks do not, as commonly suggested, represent an expedited timeline for the PLA’s modernization goals nor for a prospective invasion of Taiwan, it does suggest that Xi will be looking to kick those efforts into high gear to achieve the new military standards he described in his political work report to the 19th Party Congress in 2017. These include ensuring that China will “basically complete national defense and military modernization” by 2035, and that its military will have been “fully transformed into a world-class military” by 2050, coinciding with the 100th anniversary celebration of the founding of the People’s Republic of China in 2049. While it is unlikely that Xi will seek to further truncate those timelines in the work report he will deliver at the 20th Party Congress, set against the backdrop of heightened U.S.-China tensions over Taiwan in the wake of the Pelosi visit, that section of Xi’s report will merit close scrutiny. Moreover, with the PLA clearly signaling in the wake of its August 2022 military exercises that it will adopt a “new normal” of military posturing aimed at promoting the operational exhaustion of Taiwan’s military and increased uncertainty among the island’s political leadership and those of Taipei’s partners as to Chinese intentions, Xi’s strong political control over the PLA will serve to facilitate the attainment of those objectives while also maintaining strict adherence to clear rules of engagement designed to ensure that escalation control remains firmly in his hands.

Top Leadership

 

Analysis

Leadership of the 96 million-member Chinese Communist party (CCP) is concentrated in the 25-member Politburo, within which real power rests with the seven-member Politburo Standing Committee (PBSC). In today’s China, however, supreme power indisputably lies with CCP General Secretary Xi Jinping.

Following his appointment as General Secretary at the 18th Party Congress in November 2012, and later simultaneous appointments as Chair of the Central Military Commission (CMC) and President of China in early 2013, Xi has rapidly concentrated power into his own hands. He has done so by having first purged many of his internal factional rivals through an early anti-corruption campaign and subsequent “party-rectification” campaigns, then by centralizing the decision-making structure of the Chinese system away from state institutions and into a number of small “leading groups” and committees, nearly all of which are staffed by his close supporters and chaired by himself. Xi has thus been dubbed the “Chairman of Everything.”

Since his rise to power, Xi has had himself declared China’s “Core Leader” and has succeeded in enshrining “Xi Jinping Thought” within the Chinese constitution, elevating himself to nearly the same level as Mao Zedong within the CCP’s ideology and history. All this has prompted accurate accusations that he has established a personality cult and effectively implemented one-man rule. Most crucially, in 2018 he succeeded in having the two-term limit for the presidency revoked. Originally chosen to serve two five-year terms, from 2013-2023, Xi now appears set for reappointment for at least one more term – and quite likely lifetime rule. Securing this reappointment is Xi’s overriding political goal for the 20th Party Congress of 2022, making it among the most consequential in recent Chinese history.

However, while Xi’s continuation in power is nearly certain, he also has broader – and more challenging – political objectives that he hopes to achieve. Namely, he wants to maneuver the appointment of as many of his factional supporters and close protégés into positions of power and influence (particularly onto the Politburo) as possible, paving his way to safely continue in office indefinitely. He may not be entirely as successful as he’d prefer, however, as opposing factions and networks continue to wield influence within the CCP despite Xi’s power. Among these are the “Shanghai Gang” of former leader Jiang Zemin and the faction associated with former leader Hu Jintao and the Communist Youth League (CYL), currently led by Premier Li Keqiang (#2 leader on the PBSC). Personnel selections made at the 20th Party Congress will therefore serve as a barometer for the continuing extent of Xi’s power within the Chinese system, as well as help foretell the future direction of Chinese politics and policy.

 

Inside the Black Box: Predicting the Next Top Leadership

Predicting the composition of the CCP’s 20th Politburo and PBSC is made especially challenging by the uncertainty surrounding what the rules and norms for the selection of candidates actually are in the Xi Jinping era. In CCP politics, rules and norms have always been manipulated for the purposes of power, meaning the “rules of the game” have always been flexible at best. But under Xi adherence to fixed norms has been further reduced by his centralization of power.

For instance, even the number of seats on the Politburo and PBSC are open to change; the current total number of PBSC seats could be enlarged from seven to nine, reduced to five, or remain the same. The best predictor is likely not past precedent, but Xi’s political calculation regarding how disruptive he can be and whether it would be more advantageous to have more factional allies in positions of power or fewer potential future rivals. This analysis makes a conscious assumption that the size of the PBSC and Politburo probably will not change.

Another important norm that has traditionally been useful for determining composition of the leadership, but which is now open to change, is the CCP’s retirement age limit for Politburo members: the so called “7 up, 8 down” (七上八下) rule, in which leaders who are age 67 or below at the time of the Party Congress are eligible for reappointment, while those older than 68 must retire. Xi is already set to break this rule, in that he is 69 years old, but intends to remain in office. But while this opens the door for him to make other exceptions, fully abandoning the norm would also eliminate a useful tool for Xi to remove older factional rivals and replace them with younger allies. We, therefore, expect this norm to largely be followed, with only a few isolated exceptions. In fact, it is even possible that the age limit could be lowered further.

Mostly absent from the selection of Politburo-level leaders is any substantial evaluation of policy or managerial expertise. This is not to say that it is entirely neglected; rather, expertise and merit comes to be mobilized as one of multiple bargaining chips in intense negotiations for positions, not only between but also within political factions. Similarly, disputes over differences in policy may play a role, if primarily for securing political advantage. Among these, policy disputes over China’s slowing economy, Xi’s management of the COVID-19 pandemic, and China’s increasingly tense foreign relations are the most prominent.

With these limitations in mind, we can nonetheless make several predictions about the composition of the next Politburo.

 

The Politburo Standing Committee: Scenarios

At the top level of the Politburo, should the norm of age limits hold, two members of the seven-member PBSC (other than Xi Jinping) are set to step down: Li Zhanshu and Han Zheng. Li is a longtime friend and ally of Xi, but at 72 he appears certain to depart. Han, on the other hand, is a member of Jiang Zemin’s faction, so Xi would likely be glad to see him go. However, because this leaves four seats filled by members that Xi may prefer to see replaced with younger allies, there is a chance that the age limit could also be refined down rather than up, and some of those members of the “1955 Generation” (Li Keqiang, Wang Yang, and Wang Huning on the PBSC) also pushed to retire.

Regardless, one of Xi Jinping’s political priorities is quite clear: replacing Premier Li Keqiang with his own protege. The replacement of Li as next Premier is now the lynchpin of Xi’s gambit to redistribute power to his advantage at the 20th Party Congress, making the question of who that will be the most pivotal item to watch.

In this regard, we foresee five plausible scenarios for the PBSC:

Scenario 1: Xi’s protégé takes the Premiership – In this scenario, Xi’s protégé Li Qiang (current Shanghai Party Secretary and Politburo member) or a similarly loyal dark horse ally wins the day. Li seems to be Xi’s first preference for Premier (leader of the State Council). However, Li’s competitiveness has been undermined by Shanghai’s serious and embarrassing difficulties in containing outbreaks of COVID-19 earlier this year. Should Li nonetheless take the position, it would therefore indicate that Xi remains in a very powerful political position. This could however increase the likelihood that Li Keqiang stays within the PBSC in the position of NPC Chairman, while Politburo member Hu Chunhua (who is part of Li’s CYL faction) might replace Han Zheng as Executive Vice Premier (#2 at the State Council), as something of a factional compromise. However, the CYL faction might not be powerful enough to maintain both Li and Hu in critical PBSC positions. Either way, one or two current PBSC members among Wang Yang, Wang Huning, and Zhao Leji would likely remain (possibly shuffling positions). There is also a fair chance, however, that an additional one or more of them might also retire and a Xi-loyalist like Ding Xuexiang, Huang Kunming, Li Xi, or Chen Min’er be handed Zhao Leji’s current position as head of the CCP’s feared internal anti-corruption force, the Central Commission for Discipline Inspection (CCDI).

Scenario 2: Wang Yang becomes Premier – In this compromise scenario Wang Yang (also connected to the CYL faction, if more loosely) becomes Premier. This would almost certainly squeeze Li Keqiang out of the PBSC and into retirement entirely. Younger CYL contender Hu Chunhua would also be kept out of the PBSC (as Xi would hardly allow two CYL members to dominate the State Council, unless he is far weaker than conventionally expected). In this scenario Li Qiang would likely take Han Zheng’s position as Executive Vice Premier, while one of Xi’s other protégés such as Ding Xuexiang, Chen Min’er, Li Xi, or Cai Qi would take over from Zhao Leji as head of CCDI. Zhao Leji and Wang Huning would each become head of one of China’s legislative bodies (the NPC and CPPCC), while another close Xi ally (probably Huang Kunming) would take over ideology tsar Wang Huning’s position as head of the Central Secretariat.

Scenario 3: Han Zheng becomes Premier – In this less likely scenario, in which the age limit norm is abandoned, and Xi’s influence is revealed to be significantly more circumscribed, Han Zheng would remain on the PBSC and take the position of Premier, while Li Keqiang would also remain but become Chair of the NPC. Wang Yang would then likely also remain as Chair of the CPPCC, meaning two CYL faction members would make it onto the PBSC alongside Jiang Zemin’s man Han Zheng. Wang Huning would likely retire, and Zhao Leji would take his position. In this case, Xi’s protégé Li Qiang might still then become Executive Vice Premier, while other protégés like Chen Min’er, Ding Xuexiang, Li Xi, Cai Qi, or Huang Kunming would battle for the seat of CCDI head.

Scenario 4: Xi unbound – In this scenario, Xi’s influence proves to be unconstrained and he takes full advantage to set up his ideal PBSC. Li Keqiang, Han Zheng, Wang Yang, Wang Huning, and Li Zhanshu are all replaced by younger, absolutely loyal Xi allies. Ding Xuexiang, Li Qiang, Chen Min’er, Huang Kunming, and Li Xi are all potential candidates here. Xi may also demonstrate some magnanimity under this scenario by promoting someone from another interest group, such as Hu Chunhua, to the PBSC. This scenario appears to remain relatively unlikely, but it is hardly impossible.

Scenario 5: Packing the PBSC – In this wildcard scenario, the PBSC is enlarged from seven to nine seats. This seems most likely to occur if Xi is out-maneuvered and a non-Xi factionalist is set to become Premier, in which case Xi might push to expand the PBSC to compensate by creating new room for more factional appointments. Alternatively, Xi could receive intense pressure (including from his own allies) to set up a next generation of leadership by appointing a greater number of younger leaders to PBSC positions. In this case, Xi might choose to expand the PBSC rather than attempt to oust additional older members, making a strategic move to reward and temporarily satisfy his political base.

Competition for the Politburo

Below the PBSC, a total of nine Politburo members appear set for retirement if age limit norms are followed. Among these are several key policy figures who would need to be replaced, including Xi’s close advisor and “economy tsar” Liu He (see Economy and Trade analysis for more details), China’s top diplomat Yang Jiechi (see Foreign Affairs analysis), security chief Guo Shengkun (see Security analysis), and both Vice Chairs of the Central Military Commission, Xu Qiliang and Zhang Youxia (see Military analysis). Among those who are not yet at the age ceiling, one or two (such as Chen Quanguo) might nonetheless also be pushed to retire.

Among those up-and-coming leaders within the Chinese system who will compete intensely to replace these individuals on the Politburo, three are particularly strong competitors:

He Lifeng (born February 1955): Currently Vice Chairman of the CPPCC and Director of the National Development and Reforms Commission (NDRC), He Lifeng is the most likely candidate to replace Liu He as Vice Premier in charge of economic and financial affairs. With a degree in economics from Xiamen University, he began his relationship with Xi early in his career when they worked together in Fujian province. In the past five years he has been among the leaders who has notably accompanied Xi during nearly all of his domestic and overseas trips.

Miao Hua (born November 1955): Currently a member of the CMC and the head of the CMC Political Work Department, Miao is the most likely candidate to take the second-ranking position on the next CMC (after Xi himself) as the Vice Chairman in charge of political affairs, thereby joining the Politburo. He has long-running connections with Xi since they overlapped in Fujian early in their careers. Moreover, Miao served as Political Commissar of the PLA Navy before moving to his current position, and there is some evidence from recent promotions within the military to indicate a growing influence of the Navy within the PLA staff – further boosting Miao’s chances.

Ma Xingrui (born October 1959): The current Party Secretary of Xinjiang, Ma is an aerospace engineer who has previously served as party chief of Shenzhen and Governor of Guangdong. His experience increases his credibility in local governance. His hometown of Yuncheng, Shandong, is also the birthplace of Peng Liyuan, Xi’s wife, which might win him some extra credit.

Other hopefuls include:

Yang Zhenwu (born May 1955): Currently Secretary-General of the NPC Standing Committee, Yang may join the next Politburo as the #2 of the national legislature, succeeding Wang Chen as Xi’s top watchdog in the NPC leadership. Yang’s career is very similar to Wang’s (both are from the party-state media, and both served as publisher of the People’s Daily). Also like Wang, Yang’s relationship to Xi can be traced back to their early years, when Xi and Yang worked together in Hebei province. The NPC is not an insignificant body. There is a reason that Li Zhanshu, widely regarded as one of Xi’s closest political allies, was positioned to run it. Xi is now likely to prioritize an ally at the head of the NPC even over checking Li Keqiang’s power. As it is very possible that the next NPC Chairman is not a close ally of Xi’s, he will need to secure his own deputy there to run the NPC’s daily operations; Yang is one of the best available choices in this regard.  

Wang Xiaohong (born July 1957): Currently Party Secretary and Minister of Public Security, Wang recently gained concurrent appointment as Deputy Secretary of the Central Political and Legal Commission (CPLAC), the organization overseeing China’s entire legal-enforcement system, including the courts, the procuratorate, and the intelligence system. Wang is said to be among those most trusted by Xi, as their relationship can also be traced back to the local politics of Xiamen in the 1980s. Xi has made huge efforts since coming to power to tightly control the so-called “knife” of the party (the legal enforcement system), and Wang has been promoted quickly over the past ten years as a part of that push.　

Chen Yixin (born September 1959): Currently Secretary-General of the CPLAC, and a close ally of Xi who worked alongside him in Zhejiang province (making him part of Xi’s “New Zhijiang Army” factional subgroup), Chen has like Wang Xiaohong (above) achieved rapid promotion under Xi’s push to control the security system. He is a very strong candidate to become head of CPLAC, with Chen and Wang potentially alternatives to each other as contenders for the Politburo seat. However, if Xi is powerful enough to send both into the Politburo then Chen might be transferred to another post outside the CPLAC system.

Xiao Jie (born June 1957): Currently State Councilor and Secretary-General of the State Council, Xiao is a former Minister of Finance with a close working relationship with Li Keqiang and career connections to the Jiang Zemin and Hu Jintao administrations. However, he shares an educational background with Liu He. Thus, he could emerge on the Politburo functioning as a factional compromise between Xi and Li, probably in the capacity of a Vice Premier.

Gong Zheng (born March 1960): Mayor of Shanghai, Gong is rumored to be a brother-in-law of Liu He. Shanghai party secretary Li Qiang will almost certainly move to Beijing. Gong then has a very high possibility of becoming Shanghai’s next Party Secretary and thereby joining the Politburo.

Zhang Qingwei (born November 1961): Party Secretary of Hunan, Zhang is the most senior incumbent provincial leader nationwide, and a leading figure among those politicians with a military-industrial background – a group that has emerged as highly influential in the Xi era. However, the fact that Zhang’s major career advancements took place under Jiang Zemin may limit his trustworthiness, while other candidates represent more important localities. Ma Xingrui (above) and Lou Yangsheng (below) are probably more likely candidates for any seat he might take.

Lou Yangsheng (born October 1959): Party Secretary of Henan, with a background in Zhejiang working under Xi, Lou is the second most senior among the incumbent provincial party secretaries nationwide after Zhang Qingwei. His experience as party chief of two provinces (Shanxi before Henan) is unparalleled by his peers (other than Zhang Qingwei) and will give him a boost in reaching the Politburo.

Shen Yiqin (born December 1959) or Shen Yueyue (born January 1957): Traditionally, the Politburo has included only a single token female member, and this norm is likely to continue. Currently that member is Sun Chunlan, who will almost certainly retire. As there are very few female leaders at the top levels of China’s intensely patriarchal politics, there are very few candidates who could replace her. The most likely is one of the “Two Shens.” Shen Yueyue is the more senior, and worked in Xi’s powerbase of Zhejiang, but has a CYL background. This may make Shen Yiqin, the only female provincial party chief as Party Secretary of Guizhou, the stronger candidate. Shen Yiqin also has the advantage of having worked with Li Zhanshu in Guizhou, as well as being an ethnic minority (Bai), given that the almost entirely Han CCP also prefers to include token representatives of ethnic minorities in the Politburo. She lacks experience in national-level governance, however.

Liu Guozhong (born July 1962): Party Secretary of Shaanxi, and a political protégé of Li Zhanshu.

Zhang Guoqing (born August 1964): Party Secretary of Liaoning, former Mayor of Tianjin, and former Mayor of Chongqing. Based on a recent high-profile visit by Xi to Liaoning, he seems to have a higher than average chance to join the Politburo.

Hao Peng (born July 1960): Current head of the State-owned Assets Supervision and Administration Commission, and former Governor of Qinghai, the power base of Zhao Leji.

Yin Li (born August 1962): Party Secretary of Fujian province, who has some connections through Xi’s wife Peng Liyuan.

 

Dark horse candidates include:

Jing Junhai (born December 1960) and Xu Lingyi (born April 1958): If Xi Jinping’s predominance during the selection process is exceptional, one or both of these candidates could be elevated to the Politburo. Jing is Party Secretary of Jilin province, while Xu is a Deputy Secretary of the Central Disciplinary Inspection Committee (CDIC). Jing is from Shaanxi, where he won favor with Xi by building a lavish tomb for Xi Zhongxun, Xi Jinping’s father. Xu, meanwhile, is one of Xi’s long-time subordinates in Zhejiang, and, due to his connection with Xi, has gained a reputation as a formidable discipline inspector.

Chen Jining (born February 1964) and Li Shulei (born January 1964): Chen is Mayor of Beijing (and close to Xi Jinping’s ally Chen Xi), while Li is deputy head of the CCP Central Public Relations Department (and rumored to have once been Xi’s private secretary). Both young rising stars, their inclusion on the Politburo would be a long-shot, but is possible if Xi decides to make generational change a key goal of reorganizing the body.

 

Policy Implications

When it comes to top-level decision-making on policy, including choices on strategy and overall direction, the selection of the new Politburo will have a relatively limited effect. At this level, Xi Jinping will retain final say over every major decision. However, more fine-grained decision-making on policy details and implementation will be directly impacted by the selection of leadership personnel.

Visit each policy area in the visualization above for more analysis on how personnel changes are likely to influence policy moving forward.

Energy & Environment

 

Analysis

Leadership on energy, environmental, and climate issues is, like with every realm of China’s governance, dominated by Xi Jinping and the top decision-making bodies directly under him. These include the CCP Politburo and its Standing Committee, the State Council, the Central Financial and Economic Affairs Commission (CFEAC), and Central Comprehensively Deepening Reforms Commission (CCDRC). Other than the State Council, Xi Jinping personally chairs all of these bodies.

 

Xi has stepped up the priority for energy and environmental issues across the board during his time in office, and has in fact made them a part of his personal ideological brand, inaugurating “Xi Jinping Thought on Ecological Civilization” as part of the “thought” that cadres and students across China are now required to study and follow. This includes such innovations as “speeding up building [China up as] an energy power,” “deepening the push forward of the energy revolution,” and achieving carbon neutrality. Day-to-day management of environmental regulation or energy policy is not something Xi likely busies himself with, however.

 

Under Xi and the Politburo, the National Development and Reform Commission (NDRC) plays a pivotal role in coordinating governance matters on both energy and the environment. This is especially the case with energy since the NDRC directly supervises the National Energy Administration (NEA). The current head of the NDRC, He Lifeng, is very likely to join the incoming 20th Politburo as Vice Premier, replacing Xi’s right-hand man on the economy, Liu He, within the State Council (see Economy and Trade and Finance analyses for more details). Who will step into He Lifeng’s shoes as head of the NDRC, is not yet clear at this stage, however, as there are a number of worthy candidates. Apparent top contenders include: Mu Hong, current NDRC Vice Chair, and Han Wenxiu, Executive Deputy Director of the CFEAC’s general office. Both are veterans in national economic management. But it’s also possible that Xi will choose to appoint one of his direct protégés, rather than an indirect one via connection to Liu He and He Lifeng. In that case, this would likely be someone who is currently a provincial party secretary.

 

The National Energy Commission (NEC) of the State Council operates separately, with Li Keqiang as Director and Han Zheng as deputy. Its general office (where most day-to-day decisions are made) is directed by He Lifeng in his capacity as NDRC Director, while the deputy head is the Director of the NEA, Zhang Jianhua. Like other State Council organizations, the NEC’s major function is to coordinate inter-ministry affairs. This arrangement allows the NEC to add some weight to the NEA’s inter-ministry bureaucratic influence on energy issues, as the NEA, a vice-ministerial level organization, would otherwise be incapable of managing full-ministerial level departments within the state administration.

 

The NEA is functionally in charge of energy policy at the national level. Its current Director, Zhang Jianhua, is only 57, and probably will stay in office for two more years (assuming the age cap for a vice-ministerial level cadres remains at 60). Otherwise, he is likely to be promoted to a full-ministerial level position in this round of power redistribution – though he could, however, also be promoted to this level while staying in the same position, as a number of his predecessors were ministerial-level cadres. Who might replace him if he changes positions is not yet clear.

 

The Central Rural Work Leading Group (CRWLG), headed by Hu Chunhua, also plays an overlapping role in both energy and environmental policy, given the development needs for rural parts of China and the fact that these areas often suffer among the worst environmental pollution. In 2021, China additionally set up a special team, the Central Ecological and Environmental Inspection Team (CEEIT), to operate independently from the energy and environmental ministries, and report on progress and failures in environmental protection. This team reports to Han Zheng.

 

The role of the Ministry of Ecology and Environment (MEE) in environmental management is similar to that of the NEA in the area of energy, but its administrative ranking has been elevated to the full-ministerial level. Accordingly, it is not subordinate to the NDRC. The MEE in fact now actually has two full-minister level leaders, as MEE Minister Huang Runqiu is not a member of the CCP and instead part of one of China’s recognized minority political parties, obviously making him ineligible to hold CCP leadership positions. Sun Jinlong is therefore actually the top leader of the MEE as Secretary of the ministry’s CCP leadership group, despite being Vice Minister. Both are relatively young; it is quite possible that Huang will enter his second term in spring 2023, when the State Council is reorganized following the 20th Party Congress. In contrast, Sun’s future is not so certain, as he belongs to the Communist Youth League (CYL) faction, a group of cadres that Xi Jinping does not much trust. Once a rising star during the Hu Jintao era, Sun’s career became stagnant after Xi took office. Sun’s rich grassroots experience and effective governance abilities – rare attributes among the CYL gang – may advantage him, however.

 

In recent years, China’s leaders have intentionally mobilized environmental issues, and in particular China’s international climate commitments, for foreign-policy purposes, including as a means of increasing China’s bargaining power when dealing with developed democracies — especially the United States. Climate cooperation, for example, has been closely tied to management of the U.S.-China relationship and broader geopolitical affairs. The MEE is not permitted full responsibility in managing China’s participation in these relations or global environmental governance, however (though it has some functions in these areas). In this regard, the NDRC plays a more significant role than the MEE, including in heading global climate change negotiations. Similar to the NEC, there is also a State Council leadership group for climate change, also headed by Li Keqiang and Han Zheng, but including Foreign Minister Wang Yi as an additional deputy head as well. This helps demonstrate Beijing’s special attention to the foreign policy relevance of environmental and ecological issues.

 

China’s environmental management org-chart has also seen a unique organizational addition: the appointment (from 2015-2019 and then again in 2021) of Xie Zhenhua as China's Special Climate Envoy at the full-minister level. Xie is 72, putting him far beyond the retirement age limit, but his experience in environmental administration and pertinent international experience and connections — including warm personal connections with a number of Western leaders and officials — have justified making him an exception to the rule. During the course of his career, Xie was previously Minister of MEE and then Vice Minister of the NDRC; this cross-department experience may have helped solidify MEE-NDRC cooperation. Xie’s office as Special Climate Envoy is located within the MEE, but it seems that some NDRC staff also work for him. Su Wei, a diplomat turned NDRC deputy secretary-general, is head of Xie’s staff group (he will reach retirement age this year, however, and it is unclear who might replace him).

 

Policy Implications

It is unclear whether Xie will stay on in the next round of government reshuffling, however, or even whether the position of special climate envoy will be maintained (especially now that the U.S.-China climate dialogue has been halted following a spat over Taiwan). Either way, the outcome of this decision will be a very useful indicator for stakeholders to watch regarding the future of China’s climate-change policies and its global commitments.

 

More broadly speaking, the specific personnel selected to head China’s energy and environmental bodies are unlikely to significantly change the direction of Chinese policy in these areas. This does not mean there may not be significant policy changes – only that those decisions will be made at the top, by Xi Jinping, who considers them an integral part of his economic and societal planning.

Technology

 

Analysis

China’s system draws on party, state, military, industrial, and educational organizations to form and implement technology policy and governance. But there is no central commission devoted to science and technology at the top level. Instead, the Politburo and its Standing Committee — meaning primarily Xi Jinping – control this area through central commissions on general governance, such as the Central Comprehensively Deepening Reforms Commission (CCCDR), the Central Integrated Military-Civilian Development Commission (CIMCDC), and the Central Cyberspace Affairs Commission (CCAC). All are under Xi’s control, though day-to-day decision-making tends to be delegated.

 

The State Council also houses two technology leading small groups. One is the National Science and Technology Leadership Group (NSTLG), headed by Li Keqiang with Liu He as deputy, which conducts cross-ministry coordination regarding science and technology. In addition, there is a National Science and Technology Structural Reform and Innovation Systems Construction Leading Small Group, headed by Liu He. It is not very clear how the two groups divide their responsibilities, if at all (and the latter is therefore not listed in the data visualized above). What is clear is that Liu He has attained a central role in Chinese technology policy. Liu is unquestionably Xi Jinping’s right-hand man in this area, and, conversely, Xi’s close control over technology policy seems to be dependent on Liu’s continuing influence and/or the loyalty and competence of his replacement.

 

Following the Party Congress, both Li Keqiang and Liu He will leave their current posts in the State Council. Who will be the next Premier is unclear at this stage, although Wang Yang appears to have the best shot (see Top Leadership and Economy and Trade analyses for more detail and other scenarios). Liu He’s replacement seems more apparent: He Lifeng appears to be the most likely. Whether He’s responsibilities will also extend to technology as much as Liu’s have is not certain, however. That will depend on how the next State Council leadership as a whole is composed, and will especially hinge on whether Xi can maneuver more of his own protégés into top leadership.

 

Directly below — and indeed functioning as the executive arm of — the CCAC sits the Cyberspace Administration of China (CAC), which essentially serves as China’s central state censor of online content and also regulates overall data security and digital safety rules. The CAC has since around 2018 seen its role and mandate steadily expand as Xi Jinping’s simultaneous determination to both grow China’s digital economy and strictly regulate its large technology and internet “platform” companies has rapidly increased. This has made CAC Director Zhuang Rongwen among the most powerful figures in Chinese technology policy and regulation today. It is possible he could see his overall rank within the party increase at the 20th Party Congress, even if he remains in his ministerial position.

 

At a lower level, technology policy leadership can be categorized into via five sub-systems: the State Council ministries; the military-industry complex; the state organizations on scientific and technological research; state-owned enterprises (SOEs); and provincial government leadership.

 

Two ministries help govern technology under the auspices of the State Council: the Ministry of Science and Technology (MST) and the Ministry of Industry and Information Technology (MIIT). Many other ministries and departments also play a relevant role, including the Ministry of Education (MOE) and the State-owned Assets Supervision and Administration Commission (SASAC). Neither are yet controlled by Xi’s men, at least as of the latest MIIT personnel changes. This is because former party chief Jiang Zemin and former PBSC member Zeng Qinghong both paid special attention to the fields of science and technology and built up strong (separate but related) power bases in these fields.

 

Jiang Zemin’s influence in the MST in particular, and the state organizations on scientific and technological research in general, has been substantial. But most of his protégés are now nearing retirement age; incumbent Minister of Science and Technology Wang Zhigang, for example, will retire following the Party Congress. The pool of his potential replacements is extremely large. Among them are two incumbent vice ministers, Zhang Guangjun and Xiang Libin. However, the winner will very likely be someone who has already gained Xi Jinping’s trust. Xi’s longtime friend and head of the Central Organization Department Chen Xi – who was also once in charge of the China Association for Science and Technology (CAST) – is likely to play an influential role here in selecting a capable but loyal individual.

 

The MIIT, meanwhile, still carries the significant legacy of Zeng Qinghong, who extended a powerful influence by developing exchange between China’s military and industrial sectors during the Jiang Zemin and Hu Jintao eras. There is some evidence that Xi may be in the process of trying to purge this influence from the system. The Minister of MIIT, Xiao Yaqing, was removed from his post in late July 2022 after being placed under investigation for unspecified offenses. Xiao is widely seen as the protégé of the Politburo’s security and legal system chief Guo Shengkun, himself a protégé of Zeng Qinghong. Following Xiao’s fall from power, an anti-corruption campaign then quickly swept through MIIT and the SASAC, taking a number of middle-level cadres with experience working under Xiao into custody as well. This hints at the intriguing possibility that Xi may be building momentum to purge Guo himself before or after the Party Congress.

 

The military plays an especially crucial role in China’s technological progress. In particular, the Central Commission for Integrated Military and Civilian Development (CCIMCD) and its general office occupy a crucial position at the top level of China’s technology policy system. This commission is the first of its kind, established by Xi (who Chairs the commission) in January 2017. At its first meeting, in June of 2017, Xi emphasized the critical importance of technology and technological innovation in making China a “self-reliant” great power. Jin Zhuanglong, an engineer of aerospace technology and one of the youngest members of the 19th Central Committee, was in charge of the CCIMCD’s general office before he was recently appointed as Minister of Industry and Information Technology to replace Xiao Yaqing (see above). Lei Fanpei, also an aerospace engineer and an alternative member of the 19th Central Committee, may be gaining influence as a candidate to take over this office. Both men notably have connections to Xi (Jin was born in Zhejiang and Lei in Shaanxi), and are therefore likely to be more trusted by him and see promising careers under his leadership.

 

The MIIT also works as another organizational link between the civilian sector and the military-industry complex. In the current organizational chart of the Chinese government, the State Administration for Science, Technology and Industry for National Defense (SASTIND), currently headed by Zhang Kejian, is a subordinate agency of the MIIT, but traditionally was run by the military. As its title suggests, it still works closely with the PLA and the defense industry. Many leading cadres in the technology field, such as Jin Zhuanglong and Lei Fanpei, have a background at this organization; some of them have even gone on to become provincial leaders, including Ma Xingrui, Party Secretary of Xinjiang and a hopeful for the next Politburo; Zhang Qingwei, Party Secretary of Hunan province and previously of Heilongjiang province, and one of the most veteran members of the Central Committee; Yuan Jiajun, Party Secretary of Zhejiang province; and Zhang Guoqing, former Mayor of Tianjin and now Liaoning Party Secretary. All of them help comprise what’s colloquially known as the “Military-Industry Gang,” and are competitive for positions in the national leadership.

 

Current SASTIND director Zhang Kejian (who is also concurrently MIIT vice minister, China National Space Administration Director, and China Atomic Energy Authority Director), seemingly has no hope of a promotion, however. This is partially due to his age (61), though he may stay in his current positions until he turns 65, the retirement age for a full minister. If he is transferred to another position, none of the incumbent deputy directors of SASTIND seem like hopefuls to succeed him, with Xi more likely to find a dark horse choice.

 

Within the PLA itself, two departments are in charge of technology development and policy: the Science and Technology Commission of the Central Military Commission (STCCMC) and the Equipment Development Department of the CMC (EDDCMC). The current Director of the STCCMC, General Zhao Xiaozhe, took the office in June 2022; he is the first Naval officer to hold the position. The Director of the EDDCMC, General Li Shangfu is, like Jin Zhuanglong and Lei Fanpei, an aerospace engineer, and is expected to retire in the near future if he is not promoted into CMC membership.

 

The third sub-set of technology governance institutions includes research organizations and “mass organizations.” These include the Chinese Academy of Sciences (CAS), the Chinese Academy of Engineering (CAE), and the China Association for Science and Technology (CAST), which all enjoy the privilege of being at the “full ministerial level” within the party-state hierarchy. The CAS is actually even a bit higher than the full ministerial level in terms of leadership personnel; both its President and Executive Vice President are full ministers. Current CAS President Hou Jianguo has some hope to join the next national leadership by taking a concurrent position within the NPC or CPPCC leadership; CAS senior Vice President Yin Hejun and CAST Party Secretary Zhang Yuzhuo are also top competitors to fill the position of MST Minister after Wang Zhigang retires.

 

The SASAC is the administrative lynchpin of the fourth sub-set of technology leadership since it supervises large-scale SOEs. In China, high technology is often managed by SOEs, and Xi Jinping’s leadership has further promoted this phenomenon. SASAC Director Hao Peng spent his early career within the aerospace industry; his political experience in Gansu, Tibet, and Qinghai established close connections with former party chief Hu Jintao and current PBSC member Zhao Leji, while his shared home province with Xi Jinping (Shaanxi) might have earned him some brownie points. He is therefore a potential candidate for elevation to the 20th Politburo, possibly as head of the National Development and Reform Commission (NDRC).

 

Provincial leadership is also critical for China’s technology governance, especially in recent years after Xi adopted an organizational and personnel measure mirroring the deputy provincial governor arrangement previously used for financial regulation. Many provinces now have deputy governors responsible for science and technology; this is especially true for provincial-level localities with huge research and development capabilities within their geography, such as Shanghai and Guangdong.

 

Many of those posts are held by the younger generation of leaders, as exemplified by Yu Yingjie in Shanxi, Lu Shan in Zhejiang, Cheng Fubo in Shaanxi, Zhang Zhili in Yunnan, and Gao Tao in Liaoning. Some of these leaders are already widely regarded as rising stars, among them Ren Wei (currently Executive Deputy Governor of Tibet) and Zhang Hongwen (now Deputy Governor of Anhui), who are highly prominent and even considered as potential successors to Xi Jinping sometime in the 2030s.

 

Policy Implications

 

 

On the personnel front, the most significant unknown is whether Xi manages to get loyal allies who can work on technology issues appointed to key roles in the reshuffled State Council, especially if Liu He retires or is transferred, as is expected. Since digital policy is now effectively run through central commissions under the Politburo that Xi has ultimate control over, these appointments won’t make or break his policy preferences. But they could represent varying degrees of disagreement on how China should approach technology policy. This is especially relevant as Xi continues to stress the utmost importance of technological self-reliance, and the United States and China continue to pursue technological competition, the aftershocks of which continue to be felt around the world.

Hong Kong, Xinjiang, and Tibet

 

Analysis

Few Chinese policies under the rule of President Xi Jinping have roiled China’s relations with foreign countries, and particularly the West, like those in Hong Kong, Xinjiang, and, if to a lesser degree, Tibet. Xi’s striking moves to bring Hong Kong more directly under mainland China’s control and remit have undermined foreign confidence in the meaningfulness of China’s “One Country, Two Systems” policy for Hong Kong (and potentially for Taiwan), which promised fifty years of autonomy for the former British colony after its reversion to mainland control in 1997. For example, China’s passage of its National Security Law (NSL) in June 2020, which was in response to renewed Hong Kong protests a year earlier over a proposed extradition bill being considered by the Hong Kong Special Administrative Region Government (HKSARG), led the government of the United Kingdom to charge that China had abrogated the 1984 Sino-British Joint Declaration that established the framework for Hong Kong’s fifty-year autonomy program. The United States and other countries responded by sanctioning relevant Chinese and HKSARG officials, prompting China to respond with the passage of its Anti-Foreign Sanctions Law in June 2021. The mainland government had threatened to extend the law to Hong Kong, but wound up pulling back, at least for the time being, in October 2021.

 

In May 2022, the Beijing-controlled Election Committee selected career policeman and security official John Lee Ka-chiu, the only mainland-approved candidate, as Hong Kong’s next Chief Executive, the territory’s notional top leader. Lee was a strong advocate for the ill-fated extradition bill, and, in his earlier role as the HKSARG’s Secretary for Security, sternly cracked down on the protests that erupted in response to the measure. Lee also has praised the NSL, saying it helped Hong Kong restore "stability from chaos." He joined the Committee for Safeguarding National Security of the HKSAR when it was formed in July 2020 after the passage of the NSL, and now chairs that body as Chief Executive. Lee has closely liaised with key mainland security officials such as Vice Minister of Public Security Chen Siyuan, and has publicly promised to eliminate "the ideology of Hong Kong independence, violence and extremism." He also has hinted that he will seek to pass the controversial Article 23 legislation aimed at prohibiting acts of “treason, secession, sedition, and subversion." The HKSARG tried to pass that legislation in 2003 but withdrew it after it sparked massive protests that ultimately led the then Chief Executive, Tung Chee-hwa, to resign. Lee also has taken a tough line on media freedoms in Hong Kong, saying his administration would look into making laws to address what he described as "fake news."

 

The situation in the Xinjiang Uyghur Autonomous Region (XUAR) has been even more controversial with the revelations that the Chinese Communist Party (CCP) since 2017 has been operating extra-judicial detention centers (the regime calls them “vocational training centers”) there, where an estimated one to two million people are being held on the basis of notional allegations of “extremism.” The CCP also has instituted a labor transfer program that allegedly has displaced hundreds of thousands of Uyghurs — the XUAR’s predominant minority ethnic group — from camps or villages, especially in the Uyghur-dominated south, and into forced labor in factories in the XUAR or other areas of China. In response, the United States and several other Western nations have issued denunciations and findings of genocide, slapping economic sanctions and import bans on XUAR individuals and entities, most notably the Xinjiang Production and Construction Corps (Bingtuan), a massive state-corporate conglomerate and paramilitary organization that serves as an additional control arm supporting the local CCP and regional government institutions. China responded by enacting its own reciprocal sanctions on individuals in several of those countries.

In late December 2021, Ma Xingrui, the former governor of economic powerhouse Guangdong Province, was transferred to replace Chen Quanguo as XUAR party secretary. Chen had been sanctioned by the United States for his role in the suppression of Uyghurs in Xinjiang, prompting some observers to speculate that he was being removed to help alleviate foreign pressure over Chinese practices in Xinjiang. Similar speculation posited that Ma’s appointment meant that the CCP would shift the focus of its policies in the XUAR away from the crackdown on the Uyghurs and toward the promotion of economic development. Ma seemed to deflate such hopes, however, when he promised no wavering on the region’s stability-first policies in his first address after taking up his post, saying his administration would “firmly promote continuous and long-term social stability in Xinjiang and never allow any reversal for the hard-won stability.”

 

 

Still, there does seem to be some indication of a change in emphasis, if not any major shift in policy, toward the XUAR. Xi seemed to manifest this subtle change during his July 2022 inspection tour there. In contrast to other official statements about Xinjiang in recent years, state media’s official account of Xi’s visit did not report him mentioning terrorism, extremism, or separatism. He also made no references to the “vocational training centers” or the labor transfer program. Similarly, Chen Quanguo, despite retaining his seat on the Politburo so far, went into limbo for six months after his removal from the XUAR and resurfaced with an effective demotion by being reassigned to a deputy slot on the CCP’s Central Rural Work Leading Group. Separately, Chen’s predecessor in the XUAR, Zhang Chunxian failed to be reappointed to the Politburo at the 19th Party Congress in 2017 despite being well within the age range for another term on that body. The exact reasons for the travails of Chen and Zhang remain a mystery, however, making it difficult to discern whether their fates were a result of policy mistakes or other factors.

 

The Tibet Autonomous Region (TAR) has not been in the headlines as much as Hong Kong or Xinjiang, but the CCP retains every bit as staunch a policy approach there as it does those other regions. The TAR has largely been quiet in social unrest terms since the last major protests there in 2008. The CCP’s last major policy signaling on its approach to the TAR came at the Seventh Central Symposium on Tibet Work in August 2020. In his speech at the symposium, Xi vowed to build a "new modern socialist Tibet that is united, prosperous, culturally advanced, harmonious and beautiful," which would be primarily facilitated by secondary school reforms that “plant the seeds of loving China deep in the heart of every youth." Xi also stirred controversy with his call at the forum for the CCP to “actively guide Tibetan Buddhism to adapt to the socialist society and promote the Sinicization of Tibetan Buddhism.” Xi’s signature emphasis on the “Sinicization” of religion in China has been an effort to reform or mold the belief systems and doctrine of any religious major faith into compliance with CCP values and objectives. As early as 2015, he called for the Sinicization of the five largest religious groups in China: Buddhism, Daoism, Catholicism, Protestantism and Islam. In the TAR, Xi seems to see the Sinicization of Tibetan Buddhism as intimately linked to his calls for struggling against “splittism” and building “an impregnable fortress” of stability in the TAR and the Tibetan areas in Sichuan, Yunnan, Gansu and Qinghai Provinces, according to his remarks at the 2020 Tibet Work Symposium.

 

The CCP’s United Front Work Department (UFWD) is the body overseeing the day-to-day management of the party’s control in all three of these regions. Although it has mainly been in the headlines in recent years for its alleged promotion of CCP influence operations in foreign countries, its principal remit remains managing the CCP’s relationship with and oversight of Chinese ethnic minorities, the country’s religious groups, and overseas Chinese. In keeping with his emphasis on tighter party control of all elements of Chinese society, Xi has expanded the UFWD’s responsibilities and concomitantly increased its staffing and budget. Its current Director, You Quan, is rumored to be on good terms with Xi from the former’s stint as party boss in Fujian Province from 2012-17. On You’s watch, the UFWD absorbed as two new internal bureaus a pair of former state agencies—the State Administration for Religious Affairs and the Overseas Chinese Affairs Office — with direct responsibilities concerning the management of issues related to Xinjiang, Tibet, and Hong Kong. You also sits on the CCP’s Central Secretariat, the Politburo’s executive arm, alongside the directors of the CCP’s major power ministries like the Propaganda and Organization Departments.

 

At the 20th Party Congress, Ma Xingrui is likely to be handed the Politburo seat that has accompanied the position of XUAR party secretary since the 16th Party Congress in 2002. A former senior aerospace executive, Ma is associated with a group of former defense firm cadres that Xi seems to have taken a shine to elevating up the CCP ranks (see Military analysis). Other members of the notional grouping include Zhejiang Province Party Secretary Yuan Jiajun and Hunan Province Party Secretary Zhang Qingwei. Xi is believed to favor these defense cadres because those institutions in China have been a rare bright spot for successful innovation and accomplishing challenging tasks handed to them by the top CCP leadership.

 

At 68, You Quan will be retiring. He is likely to be replaced by his top deputy, Chen Xiaojiang. A native of Zhejiang, Chen worked for the Ministry of Water Resources for most of his career but, in 2015, he was transferred to the CCP Central Commission for Discipline Inspection (CCDI) at the height of Xi’s corruption crackdown. In December 2020, he was controversially appointed as the first ethnic Han Chinese to head the National Ethnic Affairs Commission, which since 1954 had always been helmed by a representative of one of China’s ethnic minorities. Chen’s appointment was viewed as the latest step in a shift away from the earlier autonomy model for ethnic minorities in favor of the so-called second-generation ethnic minority, or minzu, policy, which suggests that all minorities in China should integrate to form the great Chinese state.

 

In the Hong Kong policy arena, current State Council Hong Kong and Macao Affairs Office (HKMAO) Director Xia Baolong, at 69, definitely will leave his post. In fact, Xia was already in something of a sinecure position as a vice chairman of the CCP’s political consultative body when he was tapped to take over at HKMAO after Beijing demoted his predecessor in response to unrest in the city. Xia had worked under Xi in Zhejiang in the 2000s, clearly earning the latter’s trust. As such, Xia associate Shi Kehui, who currently serves as the HKMAO’s top disciplinarian, could be a possible candidate to replace Xia. Shi worked under Xia in Zhejiang, and previously had served as the secretary to former Zhejiang Party Secretary Zhao Hongzhu, another close ally of Xi Jinping. Zhao was later the chief deputy at the CCDI under current Vice President Wang Qishan, and presumably engineered Shi’s 2014 transfer to the CCDI, where he was appointed director of that agency’s general office working directly under Wang. If Shi does not take the top slot at the HKMAO or is transferred elsewhere, Xia could be succeeded by one of his deputies, such as Huang Liuquan.

 

Policy Implications

Whoever ends up running the key portfolios in these areas, China’s firm stance toward their management is unlikely to change in the wake of the 20th Party Congress. The pressure for greater homogenization with the mainland in the case of Hong Kong and with the Han ethnic majority for Xinjiang and Tibet are signature policies of Xi Jinping. In particular, policies like the Greater Bay Area, which is meant to integrate Hong Kong and Macau with nine megacities in Guangdong to create a giant megalopolis of over 70 million people, are illustrative of Xi’s grand design. Indeed, Xi’s party history resolution passed at the Sixth Plenum of the 19th Central Committee in November 2021 specifically lauded his approach to all three regions, and also toward Taiwan. It also had a direct message for how China should respond to foreign criticisms, warning that “making compromises to achieve one’s aim can only lead to more humiliating circumstances.”