Tag Archives: Xi Jinping

How rich Is Xi Jinping?

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Exactly how rich is the President of the People’s Republic of China?  According to an April 2024 Congressional Research Service report based on public records: “Xi Jinping holds an estimated hidden wealth of $700 million.”  But wait.  Nobody really knows if this is correct.  Other published estimates place Xi’s total worth as high as $1.2 billion or as low as $1 million.

That’s quite a range:  the highest of these three estimates is 120,000 times larger than the lowest.  What’s behind this enormous disagreement?  Secrecy.

The estimates above refer to family wealth, not personal wealth.  That’s because in China, “generally the big corruption does not happen with the officials themselves, but with relatives of officials. Just being related to a big-wig means that people will throw money at you.”  Then add the fact that “Much of the family’s wealth remains unclear and untallied because of the absence of Chinese corporate and real estate disclosure rules, as well as a propaganda system that bans media discussion of leaders’ personal details and removes them from the internet.”

For example, around the time Xi first became China’s President, Bloomberg News journalist Michael Forsythe published an expose regarding Xi’s wealth.  Soon after “Forsythe and his family received death threats, and Bloomberg’s site was blocked within [China].”  This intimidation worked.  As a result of the reaction to Forsythe’s piece, “Bloomberg declined to publish a subsequent investigation…”

Despite the difficulty of coming up with a reliable total figure, it is very clear that Xi lives a VERY comfortable life, including:

Also note that in China, “for very high ranking officials [in China], all things for their entire life are provided by the government… [and they] do not have much opportunity to use their own money” for living expenses.  But the world is full of luxuries and many Chinese leaders and their families don’t seem to have trouble finding things to spend their excess money on. 

Some examples can be seen in a Twitter account started in 2022 by Xi’s only child — his 32 year old daughter Xi Mingze (nicknamed Xiao Muzi) — showcasing her lavish lifestyle including:

  • A Van Cleef &  Arpels’ bracelet valued at over $135 thousand (US)
  • A custom Patek Philippe diamond watch worth $1 million (US).  (Normally, this particular watch is reserved for VIPs who spend over $5 million annually on this brand.)
  • A customized Rolls-Royce Cullinan worth $28 million (US)
  •  $100 million (US) mansion in Hong Kong
  • And much more
In 2022 Xi Mingze – Xi Jinping’s only child – posted these images to a Twitter account illustrating her luxurious lifestyle.  In 2023, they were deleted from the internet.

But Xi Mingze’s posts on luxuries ended “on September 25th 2023 when her Twitter account was exposed by Luda media.”  As a result, Xi Mingze “allegedly [issued] a death threat against Luda media indicating that any harm coming to the media network would be her family’s doing.”

Some US politicians seem to believe that if the facts become available “about the enormous wealth of individual leaders of the CCP, the Chinese people will turn China into a respected democracy like Taiwan.” 

For example, “Sen. Marco Rubio inserted language into… the 2023 National Defense Authorization Act… which required the US Director of National Intelligence to produce a ‘Report on the Wealth and Corrupt Activities of the Leadership of the CCP’” by December 2023.  The report would investigate not just “Xi Jinping… [but also] other members of the Central Committee, the Politburo, the Politburo Standing Committee, and regional Party Secretaries.”

Interestingly, as of the date of this post — 10 months after the publication deadline had passed — the report yet to be published.  My personal guess is that Avril Hines – Director of National Intelligence – is slow walking the report, at least until after the Presidential election. 

If all of the info on Communist leaders’ wealth was fully vetted by US intelligence, and released as part of a well-thought out strategy to manage the contentious US-China relationship, perhaps it might make a difference.  But in this case it feels more like an isolated action poking Xi Jinping in the eye with a stick, to show the world that we’re right and he’s wrong.  In my opinion, Cruz and his allies range from naïve to downright stupid if they really think that such a report would convince Chinese citizens that they would be better off in a Taiwan-style democracy. 

When (or if) this report is published, it will almost certainly prove that Xi is just one of many leaders who live luxurious lifestyles on the backs of the Chinese people.  In fact, Xi’s offenses are likely to be relatively modest compared to some others.  Since coming to power in 2012, Xi has focused on anti-corruption campaigns and earlier this year, he vowed to intensify this campaign and “target industries such as finance, energy and infrastructure.”

Corruption is a long-standing tradition in China, going back thousands of years, at least to Qin Shi Huang, the first Chinese emperor in 259 BCE.    

After the Chinese Communist Party won its revolution in 1949, many Party leaders lived the high life.  Numerous examples appear in the controversial book “The Private Life of Chairman Mao,” written by Mao’s long-term personal physician Li Zhisui, including:

  • “Luxuries not even imaginable to the Chinese citizenry, [such as] owning numerous estates, and having numerous extramarital affairs with very young women and even boys”
  • “Like Chinese emperors of antiquity, Mao believed that regular sex ensured a long life and had at least 3,000 concubines over his lifetime… He aimed to have sex with a different virgin girl every night.
  • He was also “a gourmet… [whose] favorite foods were flown to Beijing from all over the country, including a special kind of fish [that needed to be] kept alive in a plastic bag filled with water and accompanied by a servant responsible for administering oxygen.

I don’t know about you, but it feels more than a little odd to me that the heads of the largest Communist nation on Earth would have access to privileges denied China’s 1.4 billion residents.

When Karl Marx and Friedrich Engels published the Communist Manifesto in 1848, they focused on “the exploitation of the proletariat (working class of wage laborers) by the ruling bourgeoisie.”  They did not mention the possibility that the success of the Communist Party could create a new class of leaders who would exploit the proletariat.

In 1887, English historian Lord Acton wrote “Power tends to corrupt, and absolute power corrupts absolutely.”  It’s still true.

So, in my opinion, the fact that many of China’s leaders are rich while more than a billion of its citizens are poor is not surprising.  The fundamental causes lie not in communism or in capitalism, but in human nature. 

The possible role of human nature in inequality will be the basis for a number of posts in my soon to be updated “other blog”:  Understanding US economic inequality, five minutes at a time.

China’s vision for a New World Order

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Since at least 1945, international relations have been dominated by the “liberal world order,” a set of global rules defined by the United Nations, the World Trade Organization, the World Bank, and other groups.  As the world’s largest and most powerful nation, the US has played a leading role in establishing and enforcing these rules.  For all of us who lived through Vietnam, Iraq, Afghanistan, Gaza and more, the last eight decades have not always felt peaceful.  But from a big picture view, the 80 years since World War II have been one of the most prosperous and peaceful periods in human history.

To some countries, this “liberal world order” now feels outdated and “ill equipped to handle pressing global problems such as climate change, financial crises, pandemics, digital disinformation, refugee influxes, and political extremism.”

Chief among the critics is China, and for the last several years Xi Jinping has been promoting a vision of an alternative “new world order.”  In many ways, it is based on the approach that China itself used to lift 850 million people from poverty and become the second largest economy in the world.   

Among other things, the Chinese model holds that “developing countries have a right to focus on feeding, housing and giving jobs to people, rather than fussing about multi-party elections.”

As I wrote five years ago in one of the first posts in this blog, “For countries that are still stuck in poverty, democracy is not a priority.  As William Overholt put it in his book China’s Crisis of Success (p. 8), ‘If you are malnourished and ill and illiterate and your children are at risk, participating in an election doesn’t help much…. [In India’s democracy], a malnourished illiterate 12 year old girl whose mother died in childbirth… and whose father is crippled by air pollution far more debilitating than China’s, who has never seen a toilet and who was forcibly married to an old man, will have the right to a vote, but is that really what’s most important to human dignity?’”

Perhaps the most important difference between China’s vision of world order and that of the West is the very definition of the phrase human rights.  Beijing argues that “governments’ efforts to improve their people’s economic status equate to upholding their human rights, even if those people have no freedom to speak out against their rulers.”  To put it another way, “Xi seeks to flip a switch and replace [Western] values with the primacy of the state. Institutions, laws, and technology in this new order reinforce state control, limit individual freedoms, and constrain open markets.”

One result of this position is that “China has pushed to strip UN resolutions of all references to universal human rights.” And when Westerners criticize China for sending as many as one million Muslim Uighurs to prisons and re-education camps, China has two replies:  1) the West is defining “human rights” in a way that does not apply to the third world and 2) our internal matters are none of your business.

As Yun Sun, the director of China programs at the Stimson Center, put it: “What the Chinese are saying … is ‘live and let live.’  You may not like Russian domestic politics, you might not like the Chinese political regime — but if you want security, you will have to give them the space to survive and thrive as well.”   

China also argues that when the UN was formed more than 70 years ago, undeveloped countries had little power and little influence.  Nobody asked them how they defined “universal human values,” and different civilizations actually have different perceptions of human values. 

Last March, at Beijing’s “Global Civilization Initiative,” Xi Jinping gave the keynote address to 500 leaders from 150 countries, such as Afghanistan, Bangladesh, Bolivia, Iran, Russia and Uganda.  (The US, UK, Germany, France and other leading Western powers were conspicuously absent and presumably not invited.) 

Xi explained how China is working to “bring new hope for all nations to consider together on how to escape the trap of the ‘Clash of Civilizations’ and find a path that can help the world sail through the current turbulence.”  In China’s new world order: “Countries wouldn’t impose their own values or models on others.” 

Xi Jinping giving the keynote address to 500 leaders from 150 countries at Beijing’s “Global Civilization Initiative” in March 2023.

Tufts political scientist Michael Beckley noted in Foreign Affairs, that “China is [now] positioning itself as the world’s defender of hierarchy and tradition against a decadent and disorderly West.”  Beckley went on to point out that “the strongest orders in modern history—from Westphalia in the seventeenth century to the liberal international order in the twentieth—were not inclusive organizations working for the greater good of humanity. Rather, they were alliances built by great powers to wage security competition against their main rivals… Fear of an enemy, not faith in friends, formed the bedrock of each era’s order… [and alliances] tapped into humanity’s most primordial driver of collective action… ‘the in-group/out-group dynamic.’”

Mark Leonard, Director of the European Council on Foreign Relations calls China’s new world order “an audacious strategic bet [preparing] for a fragmented world… that allows other countries to flex their muscles.  [This] may make Beijing a more attractive partner than Washington, with its demands for ever-closer alignment. If the world truly is entering a phase of disorder, China could be best placed to prosper.”

In a sign of China’s attempt to promote their alternate version of world order, Xi chose not to attend the summit of G20 presidents and premiers from the US, UK, France, Germany – including Joe Biden.  As the headline of an article in the Atlantic put it:  “Snubbing the G20 is just the beginning. China wants to replace it.”

Just a few weeks before G20 meeting, Xi Jinping did travel to South Africa for the annual meeting of BRICS, a group of 150 developing nations that represents over 40 percent of the world’s GDP.  It was founded by Russia in 2009, and excludes the US, UK, and other Western powers.  China said that “Countries should ‘reform global governance’ and stop others from ‘ganging up to form exclusive groups and packaging their own rules as international norms.’”

The best example of how this new world order is playing out today may be the war in the Ukraine.  A few days before Russia’s invasion, as Russian troops assembled along Ukraine’s border, Chinese Foreign Minister Wang Yi said that “Sovereignty, independence, and territorial integrity of all countries should be respected and safeguarded.”  One week later, after the invasion occurred, China changed this view to “defend Moscow’s actions, in the name of ‘legitimate security concerns.’”

While China has carefully distanced itself from military action in Ukraine, the economic sanctions against Russia have led them to switch “from the West to China for everything from cars to computer chips.”  As a New York Times headline put it a few weeks ago, the “War in Ukraine has China Cashing In.”

In the world of Realpolitik, if you examine what China and the US have actually done in recent years, as opposed to what they have said, neither side is living up to its public statements.  Despite China’s theoretical commitment to each nation being left alone to pursue its own course, Kevin Rudd, Australia’s ambassador to the US, noted in Foreign Affairs that even before the war in Ukraine: “China has embarked on a series of island reclamations in the South China Sea [despite territorial disputes with Vietnam, the Philippines, Malaysia, and Brunei] and turned them into garrisons, ignoring earlier formal guarantees that it would not. Under Xi, the country has carried out large-scale, live-fire missile strikes around the Taiwanese coast, simulating a maritime and air blockade of the island… Xi has [also] intensified China’s border conflict with India… and embraced a new policy of economic and trade coercion against states whose policies offend Beijing and that are vulnerable to Chinese pressure.”

Actions like these have “undermined [China’s] push for leadership. A survey of Southeast Asian experts and businesspeople found that less than two percent believed that China was a benign and benevolent power, and less than 20 percent were confident or very confident that China would ‘do the right thing.’”  

Many countries believe that the US is just as hypocritical: “the West has applied its norms selectively and revised them frequently to suit its own interests or, as the United States did when it invaded Iraq in 2003, simply ignored them. For many outside the West, the talk of a rules-based order has long been a fig leaf for Western power.” 

At a meeting last April with the president of the European Council, Xi Jinping stressed how colonial powers treated China in the 19th and 20th century, including forcing China to cede territory and set up separate enclaves for Europeans that lived in key Chinese cities.  Not to mention World War II atrocities such as Japan’s 1937 massacre of up to 300,000 Chinese civilians in Nanjing.  This type of aggression “left the Chinese with strong feelings about human rights, [Xi] said, and about foreigners who employ double standards to criticise other countries.”

The most fundamental question about China’s vision is one which only the future can answer:  “Is China really trying to promote multipolarity — or does China just want to [become a] substitute [for] US influence over the world?”

Xi Jinping – A five minute bio

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Xi Jinping has been called “the most powerful person in the world” by Forbes Magazine. Kevin Rudd, Australia’s ambassador to the US and the author of “The Avoidable War” put it this way:  “Mr. Xi has in effect become the ‘Chairman of everything’ across the machinery of the [Chinese] state, the party and the military.” 

As another expert said in “The Prince,” a recent series of podcasts on Xi’s life:  “The future of China’s 1.4 billion people, and maybe world peace, hinge on the mind of one man.” 

When that one man was born in 1953, his father Xi Zhongxun was China’s propaganda minister.  Like almost all senior leaders in China at that time, Xi’s father had fought under Mao Zedong in the Chinese Revolution.  That gave the younger Xi a unique privileged position as a potential leader of the next generation, what the Chinese call a “princeling.”  He lived in an affluent private community, and went to a school where students “compared one another on the basis of whose father had a higher rank [and] whose father rode in a better car.” 

All that began to change when Xi was nine, and his father was accused of supporting a novel about the Chinese revolution that was not sufficiently enthusiastic about Mao’s role.  The elder Xi was purged from senior leadership and sent to manage a tractor factory hundreds of miles away from his four children.

Four years later, when Xi was 13, life got worse again at the start of China’s “Cultural Revolution” to root out intellectuals and enemies of the people who threatened the socialist revolution.  Mao said that many senior leaders and intellectuals had become bourgeois, and he urged China’s students to rise up against them.  Which they did, with a vengeance.

Many students formed groups of Red Guards to enforce Mao’s wishes by attacking everyone they suspected for any reason, no matter how flimsy.  They gleefully shut down schools and  attacked first their professors and personal enemies, and later attacked other competing Red Guard groups.  It was a dream come true for teenaged bullies and anyone with a grudge.  The military stood aside and it seemed there were no longer any adults in charge. 

Hundreds of thousands of people, or maybe millions, were killed in the ensuing chaos; no one will ever know the true death toll.  Countless others, including Xi Jinping’s father, were publicly beaten, tortured and humiliated in “struggle sessions” in which they were forced to describe their crimes, real and imagined, while large crowds shouted slogans and taunted them.

During the Cultural Revolution, Xi Jinping’s father was beaten, tortured, and humiliated in a series of “struggle sessions” after he was purged by Mao. In this photo, a sign covered with slogans was hung around his neck, while a large crowd taunted him for hours for such imagined crimes as owning a secret radio and “having gazed at West Berlin through binoculars during a visit to East Germany years earlier.” 

Xi Jinping’s entire family was targeted so frequently that, according to the New York Times, one of his sisters committed suicide.  Xi himself became the target of struggle sessions with crowds shouting ‘Down with Xi Jinping!’  His own mother was sometimes required to attend and when the crowd “yelled, his mother was forced to raise her arm and shout the slogan along with everyone [else].”

The impact on Xi was overwhelming.  “When the pandemonium of the Cultural Revolution erupted, he was a slight, softly spoken 13-year-old who loved classical Chinese poetry. Two years later, adrift in a city torn apart by warring Red Guards, Xi Jinping had hardened into a combative street survivor.”

By 1968 the entire Cultural Revolution had spun out of control.  To avoid further disorder “Mao ordered the Red Guards and other students to the countryside, to be ‘reeducated by the poor and lower-middle-class peasants.’” Xi was sent to Liangjiahe, a small village in northwest China where he “lived in a cave dwelling with villagers, slept on a kang, a traditional Chinese bed made of bricks and clay, endured flea bites, carried manure, built dams and repaired roads.”

The story of Xi’s years of back breaking peasant labor in Liangjiahe have become a key to the myth of Xi Jinping, protector of the peasants and man of the people.  Patriotic tourists now flock there on vacation to see such sites as “an underground chamber that Xi is said to have hand-dug, a place to ferment human and cow feces into natural gas.”

The Cultural Revolution led many Chinese at home and abroad to question their faith in Communism. Xi went in the other direction and re-dedicated himself to the CCP.  “When I went to the countryside as a 15-year-old, I was perplexed and lost,” Xi wrote in a 2002 essay. “By the time I left at the age of 22, I had a clear life goal and was filled with confidence.”  As one analyst summed it up in The Prince podcasts, Xi “does not want the chaos he saw as a young person to return to China, and he sees the Party as the one institution that can prevent that from happening.”

When Xi was still in the countryside, he applied to join the Communist Youth League of China and was rejected due to his father’s history.  So he applied again.  And again.  On his eight try, he was accepted.  His path to becoming a full Party member was no easier, with nine applications rejected before he finally became a member in 1974 on his tenth try.  From there, his rise in the party proceeded slowly and steadily, including a series of increasingly important political posts around the country.

In his personal life, at the age of 33 Xi married Peng Liyuan, one of the most famous singers in China.  It was the Chinese equivalent of Joe Biden marrying Beyonce or Taylor Swift back when he was a virtually unknown junior senator from Delaware.  (An aside:  for historical realism, a better analogy might be to say it was as if Biden had married Stevie Nicks or Dolly Parton, since they were both famous when he was 33.  Neither Beyonce nor Swift had been born yet.)  These days, both Xi’s wife and his daughter and only child keep a low public profile.  The daughter – Xi Mingzhe – currently lives in the US.  She earned a BA in psychology from Harvard in 2014 (using a pseudonym), then returned to China until 2019, when she re-enrolled in Harvard’s graduate program.

Back in the world of politics, Xi ascended to the national stage in 2002, when he became a member of China’s 200 person Central Committee.  In 2007, Xi was elected to the highest political group in China, the CCP Politburo, which then had nine members, and in 2012 he ascended to the top position.

A few years later, a profile in the New Yorker described Xi’s “essential project as a rescue: he must save the People’s Republic and the Communist Party before they are swamped by corruption; environmental pollution; unrest in Hong Kong, Xinjiang, and other regions; and the pressures imposed by an economy that is growing more slowly than at any time since 1990.”

Xi has also been obsessed with the collapse of the Soviet Union, and avoiding a similar scenario in China.  In 2009, he commissioned a study of the topic, which included this joke: When Leonid Brezhnev was one of the last General Secretary’s of the Communist Party of the Soviet Union, he proudly gave his mother a tour of his Kremlin apartment, his limousine, and his many luxuries.  “I’m so proud of you, Leonid Ilyich,” his mother said, “but what happens if the Communists find out?”

This is one mistake Xi will not make.  Instead, he has “associated himself with an earthier generation of Communists, a military caste that emphasized ‘hard work and plain living.’”

When Xi first took over the country’s top position in 2012, the Chinese constitution limited the presidency to two five year terms.  So Xi had the constitution changed, and on March 10 he was officially elected to an unprecedented third term by the National People’s Congress by a vote of 2,952 to 0. 

As a recent Foreign Affairs article summed up the current situation: “Now, as under Mao, China is a one-man show.” 

Who will come after Xi, and how will it affect China and the world?  The US may have to survive several decades of co-existing with Xi before we find out.  There is no sign that he has chosen a successor, and “as a lifelong student and practitioner of Chinese politics, he knows full well that if he did leave office, he and his family would be vulnerable to retribution from his successors. So Xi is likely to lead the country for the rest of his life.”

At “just” 69, Xi is younger than 1/3 of the members of the US Senate. If he lives as long as his 96 year old mother, it could be the 2050s before there is a change in leadership.

Who said “The Chinese Communist Party is like the Mafia”?

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Who said the CCP is like the Mafia:

  1. Tsai Ing-wen, President of Taiwan
  2. Fumio Kishida, Prime Minister of Japan
  3. Lloyd Austin, US Secretary of Defense
  4. Tony “Big Tuna” Accardo, Mafia boss
  5. None of the above

In a way, I wish the answer was #4, the now deceased Tony “Big Tuna” Accardo (Al Capone’s successor in Chicago), but it wasn’t.  # 1- 3 are more reasonable guesses, and for all I know one of them has actually said something like this.  But the answer I was looking for was #5 “none of the above,” because my quote came from a Chinese dissident with a lifetime of experience as a CCP insider:  Cai Xia. 

Cai was born into a “red family” with impeccable credentials:  her grandfather was an early Party member and her parents fought in China’s Communist Revolution.  Cai holds a PhD in Chinese Communist Theory, and worked for 15 years as a professor at the Central Party School in Beijing, where high ranking CCP cadres are trained.  At the beginning of her career, she was so orthodox that classmates nicknamed her “Old Mrs. Marx.”   But as her thinking evolved, Cai started getting into trouble for criticizing the Party. 

She left her faculty position in 2012, but continued to publish and speak, almost as if she was testing how far she could go.  She found out how far in 2016, when she gave a speech in which she likened Xi Jinping to a “mafia boss” and called the Party a “political zombie.”  From that point forward, she wrote in an article in Foreign Affairs, “the CCP blocked me from all media in China—print, online, television. Even my name could not be published.”  In 2019, while Cai was traveling on a tourist visa in the US, a friend told her that if she returned to China, she would be arrested.  Cai decided to stay and now lives in exile in the US. 

In an article in the current issue of Foreign Affairs, Cai spelled out the details of the Mafia analogy with Xi Jinping as the Don, the six members of the CCP Standing Committee as underbosses and consiglieres, and the remaining 18 members of CCP’s Politburo as capos who try to stay in Xi’s good graces by executing his orders.  As a reward “they are allowed to enrich themselves as they see fit, seizing property and businesses without penalty. And like the mafia, the party uses blunt tools to get what it wants: bribery, extortion, even violence.”

Marlon Brando portrayed Mafia boss Don Corleone in the 1972 Oscar best picture “The Godfather.”

Cultural differences between the US and China have added to misunderstandings between the two countries.  According to Cai “Americans are too naive… One basic cultural tradition of Americans is not to lie, to obey the rules, and to respect the spirit of contracts. In Chinese culture deception is in our blood. There is no spirit of the contract, no sense of fairness, and people often say different words to mean the same things under different circumstances. Something said today can change tomorrow.”

Well, I’m glad she said it.  In my posts on cultural differences between China and the US, I talked about “the relativity of truth,” but if I had written anything quite this direct I might have been sued by an anti-Asian alliance. 

Cai also highlighted another of the seven cultural differences I mentioned in my posts – “relationships as the key to success” – when she wrote “When it comes to one’s rise within the party hierarchy, individual relationships, including one’s family reputation and Communist pedigree, matter as much as competence and ideology.”

She sees President Xi Jinping as one example of the rise of a “princeling” (a descendant of an influential family) that has “failed upward.”  “Over the course of his tenure,” she wrote elsewhere, “the regime has degenerated… into a political oligarchy bent on holding on to power through brutality and ruthlessness… People who haven’t lived in mainland China for the past eight years can hardly understand how brutal the regime has become.”

All of his policies ultimately come back to holding on to power in Cai’s view.  When I wrote a post about Xi’s anti-corruption campaign, I quoted Professor Kerry Brown that Xi’s campaign “has really drawn blood.”  Perhaps I should have put more emphasis on whose blood exactly.  According to Cai, “since corruption was endemic in China, with nearly every official a potential target, Xi was able to use the campaign as a political purge.”  She proceeded in the same article to quote how Xi targeted rivals while “those who helped Xi rise have been left untouched.”  For example, while “there is reason to believe that… [Xi ally] Jia Qinglin… and his family are exceedingly corrupt—the Panama Papers, the trove of leaked documents from a law firm, revealed that his granddaughter and son-in-law own several secret offshore companies—they have not been caught up in Xi’s anticorruption campaign.”

One of the most important implications of Cai’s look behind the curtain is to remind us that the CCP is not monolithic, and that some Party members and elites strongly disagree with Xi Jinping’s policies.    Based on “more than 30 years of contact with middle and high level CCP officials,” Cai wrote in a Hoover Institution white paper (p. 25), “I can say that at least 60-70 percent of the CCP’s high level officials understand… that only a democratic constitutional government can ensure long-term stability in China and protect human rights, personal dignity, and personal safety.” 

Wait a minute.  60-70% of senior CCP officials want democracy?  Can that be true?  Why don’t they do something about it?  Cai’s answer:  “There is little chance for any form of opposition to organize under Xi’s heavy handed rule.”

Her advice to US policy makers is dark.  The CCP’s goal she believes is “to replace the free and democratic system of modern mankind represented by the United States, and the values and order of peace, democracy, freedom and justice,” with its own model of governance.  If that’s not bad enough, she has also argued that “relations with China are destined to be defined by standoff and confrontation in large part because the Chinese Communist Party is by nature totalitarian, belligerent, unpredictable, and unwilling to follow the norms of a democratic rules-based order.”

Given that Cai was basically thrown out of her home, in the country she loved, it may be wise to take what she says with a grain of salt.  If I were thrown out of the US as a result of my politics, I’d certainly hold more than a few grudges.  But it is also worth noting that her claims have an unusual credibility given that Cai is the highest ranking Chinese insider to provide insights into the hidden world of CCP politics.

In Cai’s view, if Xi were to have a fatal heart attack tomorrow, the nature of the US-China rivalry might change for the better.  But that’s probably not going to happen soon. 

What is likely to happen when the 20th Party Congress meets in Beijing October 16 is that Xi will be elected to an unprecedented third five year term as General Secretary of the People’s Republic of China.  He is 69 now so he will be 74 if his third term ends on schedule in 2027.  He could then be elected for additional terms and even become president for life. 

There’s hope for US-China relations in a post-Xi world. But in the meantime, with an adversary like Xi on the other side of the negotiating table, the US needs a very clear understanding of China’s goals and methods.  And we will also need to be prepared for a wide variety of surprises and unpredictable events.   

13.5 tons of hidden gold: Can Xi stop corruption?

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There is an old saying in China that “If the Communist Party executed every official for corruption, it would overdo it a little.  But if the Party executed every other official, it could not go wrong.” 

In 2012, two days after assuming office as the most powerful person in China, Xi Jinping gave a speech warning that corruption could “doom the party and state.”  Soon after, he announced a systematic campaign to crack down on both “tigers” (senior party officials) and “flies” (mid and lower level civil servants).

In the eight years since, according to Professor Kerry Brown, Xi’s anti-corruption campaign “has really drawn blood, in ways that no other kind of campaign like this has ever done.”

The most dramatic example to date was a provincial official who might be classified as a “fly.”   Zhang Qi was a member of the Standing Committee of Hainan, China’s smallest province with a population of about 9 million.  When investigators searched his home, they found a hidden room in his basement where he had stored 13.5 tons of gold.  Based on the current price of gold (roughly $1,700 per ounce), those gold bars would be worth about $734 million.  But wait, that’s just the flashy part of his portfolio.  Zhang also had 268 billion yuan (about $37.5 billion) in various banks, for a total of $38 billion.

Before he was arrested, Zhang Qi may have been the richest man in China, depending on the day’s price of gold, and his other assets.  The top two Chinese billionaires in Forbes magazine’s 2020 list were Jack Ma, cofounder of ecommerce giant Ali Baba at $38.8 billion, and Ma Huateng (aka Pony Ma) cofounder of Tencent, another ecommerce behemoth, at $38.1 billion.  Zhang Qi did not make the list.

Zhang Qi and some of the gold hidden in his basement

The sheer size of Zhang’s fortune was nearly unbelievable.  It was equal to more than half of the $74 billion annual GDP of his province.  He must have siphoned it off over many years.

According to an official statement last month, Zhang has been expelled from the party and is currently being detained and investigated for violating the “Party’s political discipline and rules on frugality… [and] clean governance.” 

Xi’s campaign against “tigers” has not uncovered revenue anywhere near that total.  But from a political perspective it has been far more significant, because it violated the unspoken rule that China’s top leaders were immune to criminal prosecution. 

In 2015, when Zhou Yongkang, China’s former chief of domestic security, was sentenced to life in prison for abuse of power, accepting bribes and revealing state secrets, the New York Times described the sentence as “defang[ing] the most dangerous tiger yet… [Zhou was formerly one of] the nine-members on the Politburo Standing Committee, which governs the country. Now he is the most senior leader to be jailed for corruption in more than 65 years of Communist rule.”

Mr. Zhou was found guilty of accepting about $118,000 in bribes and of “leaking six secret documents to… a Beijing fortuneteller.”  The Times went on to report that these “dollar amounts mentioned in the verdict were tiny compared with the Zhou’s wealth… [His] family had documented assets of more than $160 million, a conservative figure that did not include bank accounts, real estate, assets held by proxies or other wealth not reflected in publicly available records.”

Sounds like a case where Mr. Zhou – the $160 million plus “tiger” – may have had a lot to learn from Mr. Zhang – the $38 billion “fly.”  But they both ended up in jail, so they probably had much more to learn from those who have not yet been caught.

In any case, these two well publicized examples are just the tip of a very large iceberg.  According to one official estimate, “51 officials at or above the provincial/ministerial level [“tigers”] were among a total of 621,000 people [“flies”] punished” for corruption in 2018.  An official communique quoted in the same article ominously promised that “We will continue to see that… no stone is left unturned and no tolerance is shown for corruption,”

China experts are split about whether the motivation behind this continuing campaign is for Xi to purge rivals or this is a genuine attempt to reform the Communist Party.  Actually, it is both.  According to Professor Kerry Brown:  “There’s no question at the so called tiger level, where they’re targeting senior officials that it is very politicized. . . . [But] at the so-called flies level… the motivations are quite different… Xi correctly understands that [when]… local officials shake down the citizenry on a daily basis… [it] is eroding the party’s status with the public.”

The road to reform will be a long one, because Xi is fighting against a tradition of corruption that goes back hundreds or even thousands of years in Chinese society.  For a list of 17th century examples, see The Book of Swindles, which is still available on Amazon.

In the Chinese Civil War (1927-1949), corruption was so widespread in Chiang Kai-shek’s Kuomintang that it reduced popular support and contributed to the ultimate victory of Mao Zedong’s Communist Party.

Corruption increased as an unintended byproduct of the government’s approach to rapidly growing the economy.  For example, over the last two decades China has built the world’s longest high speed rail network.  Trains can reach speeds of up to 215 miles per hour over its 22,000 mile length. New lines are still being built, and it is expected to extend to about 25,000 miles within five years.  Much of the funding has been provided by the government. 

Construction came to a temporary halt in 2011 after the fatal collision of two bullet trains killed 40 people, and injured nearly 200 more.  Local officials at first tried to cover up the details by quickly ending rescue operations and burying the high speed cars that had been damaged.  This was followed by a public outcry not just online but also in state-controlled media.  An investigation concluded that the accident was caused by defects in both construction and in management.  A fascinating New Yorker article which explored the background of this tragedy concluded, in part, that this “famous public-works project was an ecosystem almost perfectly hospitable to corruption—opaque, unsupervised, and overflowing with cash.”

A variety of reforms and new safety measure have since restored public confidence, and the 2011 crash remains the one and only fatal accident in the history of Chinese high speed rail.

Ironically, experts believe that corruption and easy money greased the wheels of China’s economic growth.  A recent New York Times article argued that “in 1990s and 2000s, when the country grew the fastest… officials could often be corrupt, but even the party’s fiercest critics sometimes acknowledged that they got things done. Liu Zhijun, the former railway minister, is serving a lifetime sentence for taking bribes and abusing power. He also oversaw the creation of China’s high-speed rail system, which vastly improved life in the country.”

Similarly, a November Wall Street Journal article entitled “China’s Corruption Paradox” argued that “In the 90s and early 2000s, China was very corrupt but also fast-growing. These days, the country is less corrupt by most measures but also slower growing.  That may not be just a coincidence: A growing body of work hints that in the absence of deep institutional and financial-sector reforms, a certain degree of corruption might actually have been essential to China’s growth model…. The basic argument is that when public institutions like courts and markets are fair and well functioning, corruption hurts growth.  When they aren’t – and when officials have a direct stake in growth – moderate corruption can help local bureaucrats and companies circumvent ineffective institutions or nonsensical regulations.”

It will be no surprise that corruption is very difficult to measure.  The most widely accepted metric is the Corruption Perception Index published by Transparency International which “captures the informed views of analysts, businesspeople and experts in countries around the world.” 

In its summary of 2019 published last January, China ranked number 80 in corruption out of 180 countries.  (Denmark and New Zealand were tied for the least corrupt, the United States ranked #23, and Somalia was the most corrupt.)  Still, China’s scores have shown a gradual but definite increase in transparency and reduction in corruption since Xi’s anti-corruption campaign began in 2012.

What would China need to do to improve its rank?  According to a January article in the South China Morning Post:  “If Beijing is serious about tackling corruption, it has to make more transparent its processes in decision making, policy setting and accountability, establish judicial and legislative independence, and empower citizens.”  Similarly, Professor Minxin Pei has argued that “To get rid of corruption in an economy, you really have to strengthen the rule of law, you have to downsize the government, reduce the role of government in the Chinese economy, and also… give the press more leeway in exposing corruption.”  Well, that’s not happening anytime soon.

So, to answer the question in the title of this post, Xi Jinping cannot stop corruption under the current system.  But he can and will continue to reduce it because, as Professor Brown summed it up:  “This is a treacherous time. If the Party is not able to discipline itself . . . then it will lose its mandate to rule, and it will be game over. So the stakes are high, and… this struggle is not going to disappear any time soon.”