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A house divided: Contentious politics within the CCP
Willy Lam
8/18/2004

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It's neither U.S. military muscle, nor the Chinese Communist Party (CCP) leadership's fear of a global boycott of the 2008 Olympic Games. The one factor that most inhibits China attempting an "armed liberation of Taiwan" is that there are two command posts in Beijing: one led by CCP chief and state President Hu Jintao, and the other headed by ex-president and Central Military Commission (CMC) Chairman Jiang Zemin. With two power centers competing for the loyalty of cadres and officers in the party, government and military, it is most unlikely that Beijing will undertake arguably its most risky venture since 1949. Apart from Taiwan and foreign policy, hardly concealed jockeying for position between these two principal CCP factions has also manifested itself in areas ranging from economic policy to the anti-corruption campaign.

It is an open secret that there is no love lost between Jiang and Hu even before the 16th CCP Congress of November 2002 – which elevated Fourth Generation leaders such as Hu and his key ally, Premier Wen Jiabao, both 61, to the Politburo Standing Committee (PSC). Since early 2003, the so-called Hu-Wen leadership has fought many an under-the-table skirmish with the Shanghai Clique led by Jiang and his alter ego, Vice-President Zeng Qinghong. In the past month or so, however, there is evidence that this internecine bickering might break into the open.

The Hu-Jiang rivalry is all the more intriguing because there are no major discrepancies in terms of ideology or policy between the two camps. The single most important difference in philosophy and statecraft may be that the Hu-Wen team favors a more equitable distribution of resources and wealth among China's disparate regions, whereas the Shanghai Clique wants to concentrate on developing the coast – in particular the Greater Shanghai Region – first. Most of the flashpoints between the two cliques are related to the division of the spoils: for example, who gets a fatter share of the plum and powerful jobs; and who has control over coveted financial and economic resources.

The latest clash between the Hu-Wen Group and the Shanghai Clique concerns the People's Liberation Army (PLA). It is well known that Jiang, 78, intends to serve out his full five-year term as CMC Chairman, that is, until the 17th CCP Congress in late 2007. What has particularly infuriated Hu, who has been First CMC Vice-Chairman since 1999, is that Jiang has continued to exclude him from high-level military decision-making. Even more insulting to the president, Jiang has made it possible for Vice-President Zeng – who has no military position whatsoever – to take part in CMC deliberations in the capacity of the ex-president's representative.

"It is not uncommon for important military decisions to be made by three people – CMC Vice-Chairmen Generals Guo Boxiong and Cao Gangchuan – and Zeng, who stands in for Jiang during the latter's absence," said a Beijing source close to the defense establishment. The source added Jiang has already made it known that he wanted Zeng, 65, to become a CMC vice-chairman after Hu takes over the CMC chairmanship in 2007. It is understood that Hu has vehemently opposed Zeng's induction to the CMC. After all, according to past practices, Zeng is due to retire from the Politburo in 2007, when the Jiang protιgι will have reached the age of 68 – the same age of two former PSC members, Qiao Shi and Li Ruihuan, when they retired from the scene in 1997 and 2002 respectively.

Kept out of the CMC loop, Deputy Commander-in-Chief Hu has to use his power base in the CCP to establish his military credentials. Since 2002, Hu has convened two so-called Politburo Study Sessions to discuss defense-related policies. These occasions have afforded him the necessary justification for enunciating his own ideas about military affairs. Thus at a Politburo study session late last month, Hu expatiated on the inter-relationship between economic and military development. He said that while "national defense construction" was dependent on overall economic progress, "the safe environment necessary for economic construction cannot be guaranteed unless there is a strong national defense." While Hu's views were by no means controversial, his using the Politburo platform to spell out defense-related policy reportedly ran afoul of Jiang and his aides.

Jiang fought back just two days after the Politburo study session. In a speech on PLA ideological work, the ex-president heaped praise on his own "Theory of the Three Represents" as having provided the answers to "new phenomena and new questions that have come about as a result of deep changes in the domestic and international scene." (The Theory says that the CCP must represent the foremost production forces, the most advanced culture, and the overall interests of the people.) Jiang went on to say that in studying the "Three Represents Theory," "special emphasis should be put on the word ‘truthful'," This, he added, meant cadres must take an "authentic and sincere" approach when immersing themselves in the important theory.

Quite a few party insiders in Beijing think Jiang's outburst amounted to a not-so-subtle dig at Hu. Since becoming party chief in late 2002, the Fourth-Generation leader has either played down Jiang's favorite theory, or given it a different twist by equating the "Three Represents Theory" with his own yiren weiben ("put the people first") credo. Given that most cadres outside of the Shanghai Faction resent the way Jiang and his publicists have lionized the former president's hard-to-understand dictum, it has not been difficult for Hu to displace the "Three Represents" shibboleth with his simpler, and more to-the-point exhortation about "serving the people"

Rivalry between the two camps is, of course, not confined to questions of personnel or philosophical niceties. The Hu-Wen group and the Shanghai Clique are at loggerheads over the on-going hongguan tiaokong ("macro-economic control and adjustment") crusade to cool down the economy. The State Council under Wen has mounted a vigorous campaign since the spring to defuse the "bubbles" that have developed over industries and sectors, such as properties and construction materials. The Hu-Wen team also wants to stop local chieftains from undertaking glamorous and prestige projects such as towers, bridges and tunnels unless return on investment is guaranteed.

However, Shanghai officials such as the municipal party secretary Chen Liangyu – as well as their principal Beijing patrons such as ex-president Jiang and Vice-President Zeng Qinghong – have interpreted the hongguan tiaokong exercise as a bid to constrain Shanghai's development. Shanghai party boss Chen has gone so far as to assert in internal meetings that if overdone, the cooling-down measures could lead to a contraction of the national economy that the country can ill afford. After it was announced that the GDP growth rate in the first half of the year was 9.7% – about one percentage point lower than earlier forecasts – Shanghai officials were among the first to proclaim that hongguan tiaokong policies had already achieved their results and that austerity measures could be considerably relaxed.

President Hu took on the Shanghai cadres during a trip to the East China metropolis late last month – his first visit to the economic powerhouse since 2000. The official media quoted Hu as saying that the hongguan tiaokong measures were "totally necessary and extremely timely." The president asked Shanghai officials to "firmly establish and seriously implement the scientific view on development." He further admonished them to look for "thorough-going solutions as well as to seek after long-term benefits" in economic work. It seems clear that despite senior Shanghai cadres' protests, Hu was sticking to his view that the metropolis' single-minded pursuit of super-speedy GDP growth, as well as prestige projects, left a lot to be desired.

The Hu-Wen team and the Shanghai Clique have also clashed over the handling of several instances of alleged corruption and related crimes in Shanghai. Take the case of Zhou Zhengyi, who became Shanghai's "premier tycoon" largely through speculation in the property and stock markets. Zhou was able to build his empire reportedly through securing choice pieces of down-town real estate – as well as billions of Yuan of bank loans – from his cronies among elite government and financial circles. In early June, Zhou was sentenced to three years in jail for manipulation of stock prices and providing false information to state securities authorities. But no charges were made against his alleged bribery of high-placed officials.

This has led to wide-spread criticism that Zhou was given a mere slap on the wrist because his business partners included senior Shanghai officials as well as the sons of prominent Shanghai Clique chieftains. According to Western diplomatic sources in Shanghai, Zhou was first detained in May of last year on orders from the Central Commission for Disciplinary Inspection (CCDI), whose head, PSC member Wu Guanzheng, is close to President Hu. The sources said, however, that ex-president Jiang swiftly intervened by laying down internal instructions that investigations into the Zhou case be confined to the wrongdoings of the flamboyant speculator – and that there was no urgent need to look into the finances of most of his cronies and business partners.

While the Hu-Wen group seems to have lost a battle regarding the Zhou case, it has struck back by empowering the usually low-profile National Audit Office to hit out at "big tigers" among corrupt officials. Since June, the NAO has struck left, right and center in uncovering misuse of funds and other monkey business in a number of ministries, provinces as well as state corporations. Several of the associates of former premier Li Peng, including senior executives in the electricity and energy sector, have been implicated. And it is possible that the NAO will join forces with the CCDI in targeting a Shanghai-based "big tiger" in the near future.

What about the implications of the Hu-Jiang rivalry for China's relations with Taiwan and Asia-Pacific countries including the U.S. It is true that the phenomenon of the "two command posts" in Beijing would make it unlikely for the PSC and the CMC to decide on military action against the "renegade province." Neither the Hu nor the Jiang faction wants to deal with accusations of misjudgment or inaptitude – should a mishap occur in the course of an invasion of Taiwan. However, the factional dynamics are also such, that neither the Hu nor the Jiang clique wants to appear weak and soft in the face of Taiwan President Chen Shui-bian's alleged "creeping independence." The possibility is high that, if only to preempt criticism from the other side, both the Hu and Jiang camps want to appear tough by flexing China's military muscles and pushing hawkish positions.

The same may be true for Sino-US relations. Again, internecine power struggles within the CCP are one major factor that will predispose the Hu-Wen team – as well as the Shanghai Clique – to adopt a hard-line posture toward the U.S.; hence the vitriolic accusations in recent months that Washington is again spearheading an anti-China containment and encirclement policy.

Willy Wo-Lap Lam, one of Asia's best known journalists and authors, is a senior China analyst at CNN's Asia-Pacific Office in Hong Kong.

This article appears on AFAR with permission from Jamestown Foundation, China Brief.

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