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Dr Geeta Kochhar Writes : 

China may have, more or less, successfully dealt with the COVID-19 pandemics, but the global wrath and the internal issues have intensified, as accountability remains ambiguous. The pressure to revive the economy as a consequence of the impact of the pandemic has started to show signs of inner-Party differences. In specific, the future orientation of reform path is again a matter of much debate at the highest levels, with President Xi Jinping and Premier Li Keqiang looking at different directions. Recent spat is over Li’s announcement of stimulus measures of letting people put street stalls to earn a living, which has not gone well with the Party boss Xi and his supporters.

Although Xi had been successful in silencing many opponents and has consolidated his position far above his predecessors Hu Jintao and Jiang Zemin, who remain alive and active behind the scenes, the pandemics has brought in new risks to his image. This has reactivated some back-door opponents within the party, who have found an opportunity to attack Xi. At the heart of post-COVID revival of Chinese economy lies issues challenging Xi’s leadership image as the hard fist against corruption, a builder of China Dream, a promoter of Chinese rejuvenation, and enhancing the capabilities of China as the next great power. The life-long position he had acquired and the enormous power he had accumulated prior to the pandemic, now pose major challenges to his leadership, unless he is able to silence the culprits within and counter the western attacks.

As China struggles to cope up with the external environment led by USA’s vociferous attacks, there are multiple fronts within creating worrisome scenarios. Many reports suggest protests and discontent among masses and intense pressure to manage the economic slow-down. Whether one talks of Hong Kong or Taiwan or looks at the border tensions with India or concerns over Indo-Pacific alliance, there is one thing that clearly defines China’s current posture – insecurity. There is heightened tension among Chinese diplomats and scholars, especially at the leadership level to ‘maintain stability’ (维稳 Weiwen), a core factor to sustain CCP’s leadership. The insecurity is visible also at the policy levels where clash of opinions over future economic course is mounting.

Xi started his rule as a proponent of strong fight against corruption, which was greatly appreciated by the masses. His campaign ‘hunt tigers, swat flies’ (打虎拍蝇 Da hu, pai ying), spearheaded by close ally Wang Qishan, yielded a target of more than 2 million officials with some 280 at or above the Vice-Minister level and 8,600 officials at the bureau/department chief level, according to some estimates.[i] This, in fact, was also the way that Xi cleared his path for his total control over the Party and his opponents. Wu Qiang, a scholar at Tsinghua University in Beijing states, “anti-corruption [campaigns] were used to conceal political struggles inside the ruling Communist party, and such struggles were becoming fiercer.”[ii]

Inner Party Differences Over Economic Road

Initial signs of differences among party members is now visible with Secretary of the Beijing Municipal Committee Cai Qi openly announcing Li’s ‘Street vendor economy’ as illegal. On June 7, in a Beijing Daily article, Cai Qi noted that Beijing needs “high quality development” and there is a need to deepen structural reforms on the supply side; while implementing strategies to expand domestic demand.[iii] Cai Qi is a close supporter of Xi and has strongly attacked the idea of letting city streets become unmanageable.

At the 13th NPC session, Li had proposed stimulus measures to support the unemployment crisis and ensure people’s livelihood while giving a push to domestic consumption. He had announced what is called as ‘street vendor economy’, encouraging people to set up open-air stalls as full or part-time jobs. This is complete U-turn from previous policy of 2017, whereby street vendors were removed from almost all major cities to manage cities and control urban life, expelling thousands of migrant workers as unwanted ‘low-end population’ (低端人口 Diduan renkou). Cai Qi and his urban management team launched a ferocious attack on Li’s proposition. Li is reviving veteran leader Deng Xiaoping’s strategy of opening markets for businesses and encouraging entrepreneurship, as was done in early 1980s with Deng supporting a sunflower street vendor in Anhui province. Li wants to stick to the old school of letting the ‘cat catch the mice, no matter whether it is black or white’.

Li had visited Yantai in Shandong province on June 1st and proposed the ‘street vendor economy’, after which many local leaders started to promote the idea. However, by June 4, Central Propaganda Department under Wang Huning ordered ‘cooling down’ and banned the term to express loyalty to Xi.[iv] All orders on ‘Street vendor economy’ were withdrawn. Scholars opine that Xi wants to promote political populism; while Li wants to promote economic populism,[v] which leads to some differences between the two over how to restore the economy. It is understood that Xi wants to restore the economic production activities immediately as many large-scale businesses are suffering, while Li is more inclined to people’s livelihood and employment guarantees.

On June 6, People’s Daily also published an article discussing the reasons over ‘street vendor economy’ becoming a hot topic, stating that cities and street stalls are not incompatible, but pose problems of “order”, “cleanliness”, and “governance”. Thereby, rejecting Li’s proposition and advocating “prompt introduction and implementation of various measures to stimulate consumption, and do everything possible to minimize the losses caused by the epidemic.”[vi] This indicates that Xi and his supporters are against the ideas of Li’s economic path.

Worth noting is that on May 28, in a press conference at the closing of the two sessions (NPC & CPPCC), Li had stated that the income of 600 million people is barely RMB 1000 that is medium or low income levels and therefore unveiled these measures.[vii] This became a social media sensation and an embarrassment for Xi, as he had been promising to ‘get rid of poverty and enter a well-off society by 2020’. Li had in one sense acknowledged the gravity of issue of poverty that might get accentuated in the post-COVID scenario, while also undermining Xi’s propaganda and work on ‘poverty relief’.

To cover up, Economic Daily published an exclusive interview of CCP expert Li Shi interpreting Li’s statement as the average monthly income of 600 million people is on an ‘average’ RMB 1000. Further on June 1, Qiushi, one of the most authoritative magazine of CCP and under the control of Propaganda head Wang Huning, republished 2019 speech of Xi, which stated that according to Development Index, China has “jumped to middle income countries” that is an “excellent” position for any developing country. The speech also mentioned that “by 2020, China’s urban and rural per capita income will ‘double growth figures’ of 2010, and that “completely eradicating poverty and building a comprehensive well-off society is not egalitarianism, but the overall objective of the country.”[viii] Hence, the proposal of Li was being subsumed with promotion of Xi’s concepts on economic path. During his current tour to Ning Xia (June 8-10), Xi again reiterated the resolute resolve to eradicate poverty, build a comprehensive well-off society, and talked of ethnic unity.[ix] But he did not clearly state whether the 2015 plan to eradicate poverty by 2020 can be achieved now or not.

Wuhan Lab and Power Tussle

Social media recently was flooded with rumours that Shi Zhengli, Deputy Director of Wuhan Lab and Bat expert, fled to France along with her family and was seeking USA asylum, though later found as not true. Yet, there has been no clarity on the role of Wuhan lab and the real culprit; while Shi Zhengli’s recent research indicates the possibility of virus emerging from Laos, Myanmar, Vietnam or other South East Asian countries.[x] Interestingly, Sun Lijun, who was investigating Shi Zhengli, was suddenly removed from the post for severe violations of discipline and law.[xi] Various interpretation floated for his dismissal, with some relating it to a case similar to that of Zhou Yongkang and calling him a protege of Jiang Zemin, planning for a coup.

Sun Lijun was the Director of the First and 26th Bureau of the Ministry of Public Security (that comes under Domestic Security Department and Political Security Department) as well as the Deputy Director of the CPC Central Committee Office no. 610. Worth noting is that the power of Political Security Department of China is greater than the power of National Security. Hence, his removal meant that there were greater behind the scenes issues than visible, as Sun was linked to having close linkages with Jiang faction. It must be noted that Wang Hunning is also a close supporter of Jiang. There are some who believe that the current Xi-Li friction could be an intentional uproar ignited in the media by Wang Huning. Yet, some analysts believe that in the 20th National Congress of CCP in 2021, Xi could be reaffirmed as the head for the third time; Xi, however, seems reluctant to let Li continue on the position for a third term.[xii]

China, therefore, is at a crucial juncture to balance the internal economic situation and fissures, and the external pressures. The discourse on future economic reform path was intense even prior to the pandemics, however, the current situation has exemplified the differences in opinions. In case, Xi is unable to overcome the internal discontent and stabilize economy, there is greater possibility of him using diversion tactics in the name of invoking nationalist sentiments. India, in this regard needs to be alert and cautious of the internal turmoil, as inner-Party frictions over failing economy in China have a history of spill over effect.

End Notes:

[i] Nakazawa, Katsuji (2017) “Xi Jinping Has More Tigers, Foxes, and Flies in his Sights”, Nikkei Asian Review, at, Retrieved on March 20, 2018.

[ii] Branigan, Tania (2013) “Xi Jinping Vows to Fight ‘Tigers’ and ‘Flies’ in Anti-Corruption Drive”, The Guardian, January 22, at, Retrieved on June 7, 2020.

[iii] Beijing Daily (2020) “Overcoming the Impact of the Epidemic, Seizing the Opportunities After the Epidemic, and Promoting High-Quality Economic Development” (克服疫情影响 抢抓疫后机遇 推动经济高质量发展), cited in CPC News, at, Retrieved on June 7, 2020.

[iv] Apple News (2020) “[Fight Between Xi and Li intensifies] Li Keqiang’s Promotion of “Street Vendor Economy” Was Banned by the Central Propaganda Department to Express Loyalty to XI: Stalls are Illegal” (【習李鬥白熱化】李克強推「地攤經濟」遭中宣部禁宣傳 首都北京向習表忠:擺攤違法), June 6, at, Retrieved on June 7, 2020.

[v] Apple News (2020), ibid.

[vi] Qin Chuan (2020) “Remarks by the People: Street Vendor Economy, Rising Temperature Cannot Lead to ‘Fever’” (人民锐评:地摊经济,升温不能“发烧”), People’s Daily, June 6, at, Retrieved on June 8, 2020

[vii] MoFA (2020) “Premier Li Keqiang Meets the Press: Full Transcript of Questions and Answers”, May 28, at, Retrieved on May 30, 2020.

[viii] Xinhua News (2020) “‘Seeking Truth’ Magazine Publishes an Important Article by General Secretary Xi Jinping ‘About the Problem of Building a Comprehensive Well-Off Society’” (《求是》杂志发表习近平总书记重要文章 《关于全面建成小康社会补短板问题》), at, Retrieved on June 8, 2020

[ix] CCTV (2020) “During Inspection to Ning Xia, Xi Jinping Emphasized the Decisive Victory to Build a Comprehensive Well-off society, Fight Poverty, Continue to Build an Environment for Prosperity and Ethnic Unity, and to Build Beautiful Prosperous People’s Beautiful Ning Xia” (习近平在宁夏考察时强调 决胜全面建成小康社会决战脱贫攻坚 继续建设经济繁荣民族团结环境优美人民富裕的美丽新宁夏), June 10, at, Retrieved on June 10, 2020.

[x] Sina (2020) “Shi Zhengli’s New Research focuses on Bat Coronavirus in China: Exploration of Origin and Cross-Species Transmission” (石正丽新论文聚焦中国地区蝙蝠冠状病毒:探讨起源与跨种传播), June 3, at, retrieved on June 10, 2020.

[xi] CGTN (2020) “Chinese High-ranking Security Official Removed From Post”, May 8, at–QjUDOoOTrG/index.html retrieved on May 8, 2020.

[xii] Apple News (2020), ibid.



Dr Geeta Kochhar is an Asst Prof at the JNU, Centre for Chinese and South East Asian Studies, School of Language Literature and Culture Studies. She is also part of the Resource Faculty of the USI of India.
Article uploaded on 13-06-2020
Disclaimer: The views expressed are those of the author and do not necessarily represent the views of the organisation that he belongs to or of the USI of India.

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