Xi’s Personnel Mismanagement

Paramount leader Xi Jinping (习近平) has been widely blamed by foreign governments and media for failing to take effective measures to remedy an economy hurt by excessive leverage, weak exports, anemic consumer spending, and the massive withdrawal of investment by multinationals (Foreign Policy, September 6). Yet President Xi, who is Chinese Communist Party (CCP) General Secretary and Chairman of its Central Military Commission (CMC), has long been lauded for his grasp of Machiavellian palace intrigue and factional manipulations. For example, while the so-called Xi Jinping Faction did not even exist when the 70-year-old first came to power in 2012, the 20th Party Congress last October saw his acolytes monopolize the bulk of seats on the CCP Central Committee, the Politburo, the Politburo Standing Committee (PBSC) as well as the top echelons of the People’s Liberation Army (PLA) (NPR.com, October 23, 2022; Tw.news, October 23, 2022).

Over the past two months, evidence has frequently emerged that dozens of bad apples are being detained for infractions including corruption, leakage of state secrets, and failure to carry out the commander-in-chief’s orders — particularly among Xi protégés. These intriguing developments run counter to the conventional wisdom that Xi is a master of the party. That this series of stunning personnel movements has not been explained to the public only adds to the intrigue, and in the contributes to the CCP’s reputation for lack of transparency (New York Times Chinese, July 28; Deutsche Welle Chinese, July 26).

High-ranking disappearances

Foreign Minister Qin Gang (秦刚), a key Xi protégé, was dumped from his post in late July after a disappearance of more than two months (BBC Chinese, July 26; Aljazeera, July 25). Former Foreign Minister Wang Yi (王毅), who was promoted to the Politburo at the 20th Party Congress, was then reinstated in his place. Officials have refused to make any comments on these unusual moves. Owing to Wang’s absence at the G20 summit in New Delhi earlier this month, as well as his no-show at the recent annual opening session of the UN General Assembly, there has even been speculation that Wang, another Xi favorite, might be in trouble. These rumors were only dismissed this week when the Ministry of Foreign Affairs disclosed that he had met with U.S. National Security Advisor Jake Sullivan in Malta on September 17 (Ministry of Foreign Affairs, September 17), and then when a Xinhua dispatch the following day announced that he would be travelling to Moscow for talks with top Russian diplomats (Sputnik.cn, September 18; Wionews.com, September 18).

Another mystery surrounds the unexplained three-week “disappearance” of Minister of National Defense General Li Shangfu (李尚福). Li had decades of experience managing China’s missile and space programs as well as the procurement of hardware from Russia and other countries. The Foreign Ministry spokespeople have refused to confirm or deny either his whereabouts or whether he remains as defense minister. However, Li’s fall from grace was apparently confirmed by a social-media posting by Rahm Emanuel, the American ambassador to Japan, who analogized China’s elite politics to Agatha Christie’s famous novel And Then There Were None (Radio Free Asia, September 15; Nikkei Asia, September 12).

It transpires that General Li — who was reportedly detained around September 1 — was accused of large-scale corruption when he headed PLA departments responsible for the acquisition of military equipment. In 2018, during his time as Head of the CMC Equipment Development Department (CMCEDD) (which he led from 2017 to 2022), the U.S. Government sanctioned Li for his role in procuring sophisticated weaponry from Russia. It was believed that he colluded with the top echelons of the Rocket Force and the CMCEDD to line their own pockets while buying and selling components of expensive weapons, including missiles and satellites.

General Li’s downfall comes at a time when the PLA Rocket Force, in charge of missiles and nuclear weapons, is also undergoing a thorough purge (Voice of America, September 16; Japan Times, September 15). On August 1, Xi replaced General Li Yuchao (李玉超), the commander of the Rocket Force, and its political commissar General Xu Zhongbo (徐忠波), with generals Wang Houbin (王厚斌) and Xu Xisheng (徐西盛). More than ten top-echelon officers in the Rocket Force, as well as CMCEDD, were also hauled in by military disciplinary departments as part of investigations for alleged graft-related crimes (Radio French International Chinese Edition, August 2; BBC Chinese, August 1). Disciplinary and state security authorities are also investigating allegations that senior Rocket Force officers have leaked secrets to American intelligence concerning the makeup of the Force, the location of missile silos, and other logistical and operational materials. General Li Yuchao’s son, who is based in the United States, is suspected to have close ties with U.S. “spies” (VOAChinese, August 2; Liberty Times, July 27; South China Morning Post, April 14).

The on-going purges of the Rocket Forces and the CMCEDD could also implicate another crony of Xi’s, the First Vice-Chairman of the CMC, General Zhang Youxia (张又侠). A life-long expert in military equipment and logistics, General Zhang’s father had worked together in PLA divisions in Shaanxi in the 1940s with Xi Jinping’s father, Xi Zhongxun (习仲勋). General Zhang, who is deemed close to Xi, has not been seen in public since August 30 (Radio French International Chinese Edition, September 17; VOAChinese, September 15, People’s Daily, August 30).

Questionable Decision-making

Xi’s decision to replace the ousted commander and political commissar of the Rocket Force with officers who have had no previous experience with missiles and other nuclear weapons is unconventional. General Wang, a former deputy naval commander, had served in the Navy most of his career, and General Xu was a veteran of the Air Force. Given that nuclear missiles and related weapons are expected to play a pivotal role in possible military maneuvers such as an invasion of Taiwan, putting two leaders with no experience in the technology-intense Rocket Force could not only have deleterious effects on the Force’s operational capabilities, but could also cause resentment among senior officers many of whom are well-trained aerospace engineers.

In a speech given on the eve of the August 1 Army Day this year, Xi admonished the troops to “deeply push forward preparations for military struggle… [and] raise officers’ ability to prepare for war.” He also vowed to push forward the campaign to “rectify the style and practice [of the PLA], straighten up disciple and fight against corruption [among PLA officers] in both depth and width.” Xi also doubled down on the importance of the PLA’s “absolute loyalty” to the orders of the central party authorities (People’s Daily, July 31; Deutsche Welle Chinese, July 30). This kind of rhetoric echoes exhortations that have be seen in speeches and policy documents for years, in particular during the Xi era, which has seen an enduring focus on reforming and modernizing the PLA (See for instance: China Brief, August 23, 2013; China Brief, January 12, 2018; China Brief, September 20, 2022).

Experts in the United States and Taiwan are divided on whether the contretemps that Xi has faced in the PLA — and the possibility that the efficacy of Chinese missiles, nuclear submarine and other heavy-duty weapons might have been compromised by corruption — might cause delays to the dictator’s ambitions for “national reunification” (Radio Free Asia, August 2; BBC Chinese, July 28). U.S. Ambassador Emanuel, who has been outspoken of late in his remarks on China, quoted Shakespeare’s Hamlet in his assessment of the Li Shangfu debacle: “Something is rotten in the state of Denmark” (X.com, September 14; BBC Chinese, September 16). Nevertheless, the supreme leader is still committed to his theory that “the East is rising and the West is declining.” In addition, events in elite Chinese politics have certainly not dented the commitment of the “leadership core” to building what commentators in the U.S. have termed an “axis of autocratic states” to counter the alleged eastward movement of NATO (CSIS.org, April 6; CEPA.com, March 31), something that Wang Yi is expected to further cement on his trip to Moscow this week.

Growing doubts about Xi’s ability to handle the military overlaps with and exacerbates concerns that have increased this year over China’s control of the economy and other aspects of the polity. The enthusiasm of multinationals in investing in China, already cooling, could weaken further still. According to Fitch Securities, foreign direct investment (FDI) in the first seven months of 2023 declined by 9.8 percent compared to the same period last year. Moreover, direct investment liabilities, another gauge of FDI in China, slumped to just $4.9 billion in the second quarter of 2023, according to the State Administration of Foreign Exchange. This was down 87 percent from the same period last year and was the smallest amount in any quarter since 1998 (Fitchratings.com, August 30; Bloomberg, August 7). The supreme leader’s less-than-satisfactory performance could have knock-on effects, hurting the confidence of ordinary Chinese, whose desire to spend, especially on apartments and other big-ticket items, is already low.

Conclusion

China’s position as leader of the “axis of autocratic states” will be spotlighted during next month’s grand celebration in Beijing of the ten-year anniversary of the Belt and Road Initiative, another of Xi’s geopolitical grand schemes. Much Chinese power projection in Asia and around the world is dependent on generous financial offerings. The precipitous drop in the standard of CCP governance, with its attendant impact on the economy, could change this. Increased uncertainty in both the caliber of personnel in key positions in the military, and in Xi’s ability to select the right people for the job, could handicap Xi’s room for maneuver. The supreme leader’s persistent lack of transparency as he reshuffles his top brass will serve to deepen the country’s problems, a state of affairs that is unlikely to change while he remains in power. While we do not know where Qin Gang, Li Shangfu, and their fellow disgraced officials are, we are ever-more aware of where Xi’s China is heading.

Dr. Willy Wo-Lap Lam is a Senior Fellow at The Jamestown Foundation, and a regular contributor to China Brief. He is an Adjunct Professor at the Center for China Studies, the History Department, and the Master’s Program in Global Political Economy at the Chinese University of Hong Kong. He is the author of six books on China, including Chinese Politics in the Era of Xi Jinping (2015). His latest book, Xi Jinping: The Hidden Agendas of China’s Ruler for Life, was released by Routledge Publishing in August 2023.