1 Politburo confirms Third Plenum dates, announces purge of two former defense ministers
The CCP Politburo held a meeting on June 27. The meeting, which was chaired by Xi Jinping, announced the date of the Third Plenum of the 20th Central Commission, discussed the issue of “comprehensively deepening reforms and promoting Chinese-style modernization,” and announced corruption charges against former PRC defense ministers Wei Fenghe and Li Shangfu.
Draft decision on ‘further comprehensively deepening reform’
The Politburo meeting announced that the Third Plenum would be held from July 15 to July 18 and that a draft decision by the 20th Central Committee on “further comprehensively deepening reform and advancing Chinese-style modernization” (中共中央進一步全面深化改革、推動中國式現代化的決定; henceforth referred to as the “draft decision”) would be reviewed during the Plenum.
According to a report by state mouthpiece Xinhua on the meeting, the Politburo believes that the draft decision thoroughly analyzes the “new situations and new issues” that the CCP regime faces in its development. The draft decision also includes plans for the overall deployment of “comprehensively deepening reform” and serves as a programmatic document to guide the regime on its “new journey.”
The Politburo meeting stressed that the overall goals of “further comprehensively deepening reform” are continuing the improvement and development of the socialist system with Chinese characteristics, as well as advancing the modernization of the national governance system and governance capacity. The meeting said that a high-level socialist market economy system should be fully established and socialist modernization should be basically achieved by 2035.
The Politburo meeting said that “further comprehensively deepening reform” should summarize and utilize the valuable experiences of “reform and opening up,” especially the “comprehensive deepening of reform in the new era,” and adhere to the following principles:
- Adhere to the CCP’s overall leadership and firmly safeguard the “quan wei,” as well as centralized and unified leadership, of Party Central.
- Adhere to a people-centered approach.
- Adhere to innovating while maintaining fundamental principles and unwavering adherence to socialism with Chinese characteristics.
- Adhere to taking institutional building as the main line, strengthening “top-level design” (頂層設計, i.e. models governing how power is distributed in the CCP, like “collective leadership” or Xi-style one-man dictatorship [定於一尊]) and overall planning, and simultaneously establishing and abolishing, with establishing coming first (破立並舉、先立後破).
- Adhere to comprehensively ruling by law, ensure that major reforms are based on the law, and promptly elevate reform achievements into the legal system.
- Adhere to adopting a systematic perspective and properly handle major relationships, including the relationship between the economy and society, government and the market, efficiency and fairness, vitality and order, and development and security.
The Politburo meeting also emphasized the necessity of adhering to Party Central’s centralized and unified leadership in “further comprehensively deepening reform” and leading social revolution with the Party’s “self-revolution.”
Two former defense ministers charged with corruption
According to Xinhua, the Politburo meeting reviewed and approved the Central Military Commission’s report on the investigation and handling of issues pertaining to former defense ministers Wei Fenghe and Li Shangfu. Both men were expelled from the Party, stripped of their rank (both were four-star generals), and handed over to the military procuratorate for prosecution.
Xinhua said that the CMC discipline inspection and supervision commission launched investigations into Wei and Li on Aug. 31, 2023 and Sept. 21, 2023 respectively. Both men were accused of having severely violated political discipline, resisted organizational scrutiny, and accepted huge sums of money (implying corruption). Li Shangfu was specifically accused of bribery and accepting bribes, and had “severely polluted the political and professional environment in the military equipment sector.” Wei Fenghe was accused of accepting bribes and “severely polluting the political environment in the military.”
Xinhua added that both men had caused “significant damage to the Party’s cause, national defense, and military construction, as well as to the image of the senior leadership.” Also, their offenses were “extremely serious, the impact was extremely egregious, and the damage was particularly immense.”
Backdrop
1. The CCP authorities began to officially sideline senior officers in the People’s Liberation Army from May 2023, including Li Shangfu, former commanders of the PLA Rocket Force Li Yuchao and Zhou Yaning, and several former military officers and defense industry executives who were members of the National Committee of the Chinese People’s Political Consultative Conference and the National People’s Congress (see here, here, and here).
Rumors that Wei Fenghe, who is also a former PLARF commander, was in trouble began circulating in Chinese-speaking circles in early 2024. Also, rumors have been circulating that Jiang Zemin’s elder son Jiang Mianheng is directly involved in the cases of severe corruption in the military.
2. The CMC held a political work conference in Yan’an City from June 17 to June 19. At the conference, Xi Jinping said that the international situation, the national situation, the Party’s situation, and the military’s situation are all undergoing “complex and profound changes,” which present intricate political tests for the PLA. Xi also said that there must be “no place in the military for corrupt elements to hide,” and called for strengthening comprehensive supervision of senior cadres’ performance of their duties and use of power. Additionally, Xi stressed that the Party’s “gun barrel must always be grasped by people who are loyal and reliable to the Party.”
3. Western media, think tanks, and observers have been paying increasing attention to the prospect of a PLA invasion of Taiwan and the CCP’s “gray zone” operations in the South China Sea, particularly its harassment of Philippine vessels and the Ayungin Shoal incident on June 17. Meanwhile, Xi Jinping has claimed that Washington was trying to provoke Beijing into attacking Taiwan, but he would not take the bait.
Our take
The details of the Politburo meeting on June 27 as reported by Xinhua suggest that the Xi leadership’s struggle to cope with economic and political troubles is likely the main reason why the Third Plenum of the 20th Central Committee was delayed.
1. Since the 11th Party Congress in 1977, the CCP authorities have typically held the Second Plenum of the new Central Committee in February of the second year following a Party Congress to confirm personnel selections for the state government ahead of the Two Sessions in March. Meanwhile, the Third Plenum of the new Central Committee is usually held between September and November in the second year after a Party Congress to discuss and put forward topics related to economic and political system reforms.
Starting from Xi Jinping’s second term, various circumstances and difficulties led the CCP authorities to push back the Third Plenum instead of sticking to precedent. After the 19th Party Congress in October 2017, the CCP authorities held an “extra” plenary session, or the Second Plenum of the 19th Central Committee, in January 2018 to amend the PRC Constitution and abolish term limits for the PRC presidency and vice presidency. A Third Plenum was convened very soon after in February 2018 to carry out the agenda of a usual Second Plenum. However, the Fourth Plenum of the 19th Central Committee, which served the role of the Third Plenum had the regular schedule been followed, was convened in October 2019 instead of around the same period in 2018. At the time, we analyzed that the plenum was delayed and economic issues were not discussed chiefly because trade negotiations between the United States and the PRC were ongoing and Xi Jinping was struggling to find intra-Party consensus on how to deal with the Sino-U.S. trade war.
Meanwhile, the Third Plenum of the 20th Party Congress appears to have been postponed to July 15 to July 18, 2024 instead of September to November 2023 because the Xi leadership was having political, geopolitical, and economic troubles. First, China’s economy did not rebound strongly after “zero-COVID” was near the end of 2022, the real estate crisis continued to worsen, and China reported its first official population drop in decades. Like the Sino-U.S. trade war in 2018 that led to a rethink of the PRC’s economic situation, the aforementioned issues that emerged in 2022 would have prompted the Xi leadership to reconsider and reformulate its economic agenda for the rest of Xi’s third term instead of carrying on as though it was “business as usual.”
The Xi leadership also likely needed more time to recraft its political agenda in light of mounting tensions with the West and the exposure of serious corruption in the officialdom. In the second half of 2023, the Xi leadership sidelined former foreign minister Qin Gang, former defense minister Li Shangfu, the senior leadership of the PLARF, and other military officers and defense industry executives. The corruption cases, especially involving those in Xi’s camp and potentially involving members of the remnant Jiang faction, would have generated political instability in the Party elite and created political dilemmas for Xi. Xi being undecided on how to proceed pending the outcome of corruption investigations and the clear lack of intra-Party consensus amid the political turmoil would almost certainly have contributed to his decision not to hold the Third Plenum during the usual period in the second year after a Party Congress.
Further, Beijing would have needed more time to reconsider what sort of political and economic reforms it should pursue after relations between the PRC and the West steadily deteriorated following Russia’s invasion of Ukraine in early 2022 and the PRC’s unwillingness to renounce its “no limits” partnership with Moscow, the PRC spy balloon incident, escalating U.S. efforts to restrict China’s access to advanced technology, and Western concerns about China’s exporting of excess capacity.
2. The details of the draft decision on “further comprehensively deepening reform and advancing Chinese-style modernization” as reported by state media suggest that Xi Jinping is attempting to consolidate his paramount position (定於一尊) to an even greater degree, make more headway in abolishing the collective leadership system, and double down on a “pie in the sky” agenda (畫大餅) to divert attention away from the failures of his governance.
The clearest sign that Xi is looking to entrench his authority is seen from the draft decision’s call to “firmly safeguard the ‘quan wei,’ as well as centralized and unified leadership” of Party Central, of which Xi is the “core” leader. Meanwhile, the draft decision’s call to “take institutional building as the main line” and “promptly elevate reform achievements into the legal system” indicates Xi’s desire to “legalize” and legitimize his changes to the CCP political system. Finally, the draft decision’s point about strengthening “top-level design” hints at the greater entrenchment of Xi’s one-man rule and further sidelining of the “collective leadership.”
The draft decision’s call for the “full establishment” of a “high-level socialist market economy system” and the achievement of “socialist modernization” by 2035 echoes the propaganda found in Xi Jinping’s 20th Party Congress work report. The rehashing of vague “pie in the sky” goals is intended to give the CCP officialdom and the Chinese people something to look forward to and hopefully distract them from the Xi leadership’s mounting failures of governance.
Given the current state of China’s economy and the real estate sector downturn, the Xi leadership is likely to focus on promoting so-called “new productive forces” (manufacturing of new and core technologies), as well as fiscal and tax reforms, to reverse economic deterioration and fiscal shortages. We believe, however, that Beijing’s “further comprehensively deepening reform” is very unlikely to take off and could instead worsen the business environment in China as the CCP regime increasingly tightens control to deal with its many crises.
3. There is a high chance that Wei Fenghe and Li Shangfu are guilty of serious corruption as charged by the Xi leadership. The CCP does not casually admit to matters that affect its image of being “great, glorious, correct” (偉光正) and typically attempts to gloss over its mistakes. The CCP also tends to obscure its shortcomings when geopolitical tensions are high. Further, Beijing has minimized public reporting on military corruption issues since the 19th Party Congress. Hence, the unusually blunt assessment that the two former defense ministers had caused “significant damage to the Party’s cause, national defense, and military construction, as well as to the image of the senior leadership” is likely to be actually the case (it is possible that even this assessment downplays the impact of Wei and Li’s actions), and Wei and Li had likely not been sacrificed for petty political reasons or as an elaborate ruse to have the international community misevaluate the combat and command readiness of the PLA.
The purge of Wei Fenghe and Li Shangfu comes as a serious political and military crisis for Xi and the CCP. Despite years of anti-corruption work, the Xi leadership failed to rectify the corruption problems in the PLA that expanded greatly during the Jiang-Hu era when the Jiang faction dominated the regime. Instead, Wei and Li likely partook in corrupt activities that negatively impacted the PLA’s military equipment, strategic and tactical missile force, and other crucial sectors of the armed forces. This in turn disastrously affects the PLA’s war-fighting ability and readiness during a time when the PRC’s geopolitical risks are expanding and the military has been instructed to prepare to use force to “reunify” Taiwan if necessary. Possibly worse for Xi, the personnel whom he believes are loyal to him have been revealed to be so-called “two-faced persons” whose actions undermine his rule and threaten regime security. The seriousness of the Wei and Li cases explains in retrospect why Xi needed to hold the recent CMC political work conference in Yan’an and focus on issues such as the loyalty of the military senior cadre and the need to stamp out corruption in the military.
Xi’s sidelining of Wei Fenghe perhaps best underscores the severity of the situation. Wei is an associate of the Hu Jintao camp and was “handed over” by Xi Jinping when he took office in 2012. Wei subsequently became the first senior officer to whom Xi awarded the full general rank and served as Xi’s second defense minister. The Hu-Xi alliance was likely also a factor behind why Wei and very few military leaders in the PLARF were investigated before the 20th Party Congress and the removal of Li Shangfu as defense minister. Xi would also be unlikely to go after a supporter, who happens to be a retired general and sub-national level leader, for the run-of-the-mill corruption. Wei Fenghe appeared to be in the clear as late as May 2024 despite the rumors circulating that he was being probed when CCTV footage of the wake of former National People’s Congress Standing Committee vice chairperson Uyunqimg showed a wreath with Wei’s name, which implied that he was not affected by corruption investigations into the PLARF. However, Wei being officially purged and the language used to describe his alleged offenses indicate that his corruption was not limited to the garden-variety malfeasance ubiquitous throughout the regime; rather, his actions had troubled the Xi leadership to the point where even Wei’s political connections and standing in the Party were insufficient to prevent his downfall.
We do not rule out that “anti-Xi” forces in the regime were behind the exposing of Wei Fenghe and Li Shangfu’s corruption that forced the Xi leadership to open investigations into them. For instance, the remnant Jiang faction and members of the Party elite with interests in the financial sector who are dismayed by Xi Jinping’s elevation of anti-corruption work in the financial sector and system could believe that exposing Xi camp corruption could weaken Xi’s “quan wei” and dissuade Xi from further “self-rectification” that would seriously undermine all their interests. If so, the “anti-Xi” forces may have miscalculated. Xi Jinping has demonstrated with the removal of Wei and Li that he is serious about taking his anti-corruption campaign into “deep-water territory” and will not spare even his own supporters when the offenses are serious enough. This bodes ill for Jiang Mianheng and others who have been rumored to be involved in PLA corruption.
4. The purge of Wei Fenghe indicates that other senior or retired military officers are almost certainly being investigated. It is possible that former CMC members who did not attend a cultural performance in Beijing in January 2024 for retired and veteran military cadres are currently being investigated (but have not yet been publicly disclosed) or soon to be probed. Minus Wei, the other former CMC members who were not present at the cultural performance include:
- Liao Xilong (83), a member of the 16th and 17th CMC and former head of the PLA General Logistics Department.
- Jing Zhiyuan (79), a member of the 16th and 17th CMC and former commander of the Second Artillery Corps.
- Wu Shengli (78), a member of the 18th CMC and former commander of the PLA Navy.
- Ma Xiaotian (75), a member of the 18th CMC and former commander of the PLA Air Force.
The attendance of former CMC vice chairs Fan Changlong and Xu Qiliang at the cultural performance suggests the low likelihood of their being under investigation. The conclusion of the Li Shangfu case also suggests that the current members of the CMC should be safe in their jobs for now.
5. At the time of writing, there are no obvious signs that Xi Jinping will criticize Jiang Zemin’s “incorrect political line” at the Third Plenum and purge the remnant Jiang faction. But if Jiang Mianheng is indeed involved in the PLA corruption cases as rumored, then there is an increasing likelihood that Xi will eventually move publicly to condemn Jiang’s legacy and eradicate the Jiang faction.
If Xi is preparing to go after the remnant Jiang faction and Jiang’s political legacy, the Xi leadership will launch a propaganda campaign in the mainland to both openly and covertly blame Jiang and his faction for the ills of corruption in the military, China’s economic problems (including the property sector crisis), and other crises in the CCP regime. The Xi camp could also leak more information about Jiang Mianheng’s situation overseas and spark greater public discussion about the issue.
6. The U.S. and its allies could step up pressure on Xi Jinping and the CCP if they believe that the purge of two former defense ministers underscores the PRC’s current vulnerabilities (military problems that are so severe that the CCP cannot engage in serious acts of aggression against Taiwan and in the South China Sea for at least a decade, economic recession, explosion of financial risks, etc.) and lack of ability to effectively retaliate. Increasing pressure could manifest in a variety of ways, including showing greater support for Taiwan (including arms sales), enhancing ties with allies in the Indo-Pacific region (particularly the Philippines, Japan, and South Korea), exposing PRC espionage and influence operations, adding tariffs on Chinese goods, sanctioning PRC entities over backing Russia, and other moves.
Greater external pressure on the PRC will increase its geopolitical risks and worsen its many domestic crises. Raising economic and social risks will transform into political risks for Xi and the CCP.