Corruption and the private sector, targets of Xi Jinping to consolidate in China

First it was the high ranks of the party and now the private sector. Xi Jinping’s anti-corruption campaign continues as the Chinese president tries to consolidate his power with an unprecedented third term.

The annual session of the National People’s Congress (Chinese parliament) was the starting signal for Xi’s campaign to secure command of the world’s most populous country for at least five more years.

“The opening period resembles an election campaign for President Xi: corruption investigations and power games have already begun”, assures the political scientist Willy Lam, from the Chinese University of Hong Kong.

By the end of 2022, Xi Jinping is due to receive a third term as general secretary at the 20th Five-Year Congress of the Communist Party of China (CPC). Later, at the beginning of 2023, he would begin a new term, also for five years, as head of state.

At the 2017 congress, his “thought” was included in the founding documents of the party.

Months later, the Constitution was amended to abolish the two-term limit. In theory, Xi Jinping can preside over the People’s Republic for life.

But behind the apparent unity of the communist regime, behind the scenes disputes arise that the president seeks to quell in order to establish his power.

the red princes

After coming to power at the end of 2012, more than one and a half million party officials were sanctioned in a huge anti-corruption campaign, according to official figures.

This campaign, seen by many as a strategy to get rid of opposition and rivals, is now being extended to the private sector, even though it is the source of the country’s economic miracle in the last 40 years.

“Investigations and sanctions will focus on the disorderly expansion of capital at the origin of corruption”, warned Zhao Leji, head of the CCP’s inspection services, at the beginning of the year.

“We will sever the link between power and capital”, threatened this next to the president.

In his sights is the caste of the “red princes”, the heirs of the founders of the communist regime who became rich with the economic reform and hold stakes in numerous companies.

“Big groups backed by old Party ranks or red princes who disagree with Xi are now targetedWilly Lam says.

“Some reproach him for having reestablished a cult of personality similar to that of Mao and for having modified the rules of the transfer of power”, he comments.

technology in sight

All this is accompanied by measures to control companies in the technology, real estate and financial sectors.

The most famous Chinese tycoon, Jack Ma, has suffered in his own flesh after publicly criticizing financial regulators at the end of 2020. Once a media darling, the founder of the online commerce giant Alibaba has almost completely disappeared from the public sphere.

An example of the links between the Party and business, the party’s number one in Hangzhou (east), Alibaba’s headquarters, was arrested earlier this year because a subsidiary of the company invested in companies belonging to his brother.

A Cambridge magazine pointed out that companies in which a member of the Board of Directors studied with a member of the Political Bureau of the CCP (the 25-member body that runs China) receive an average of 16% more subsidies than other companies.

The regime justifies this intervention and the control of the billionaires by the need to reduce inequality in the name of “common prosperity”, a slogan launched in 2021.

The richest 20% of Chinese have an average income ten times higher than that of the poorest 20% of Chinese, according to official data published in 2021.

Control of the tech sector comes at an economic cost: The tech sector lost $1 trillion in market value last year.

“Among the well-off groups, many people have foreign passports and will leave if the pressure is too strong.”, predicts Victor Shih, from the University of California at San Diego.