Xi has forcefully dismissed the notion that a House of Cards power struggle has been raging at the rarified heights of the Chinese Communist Party (CCP). Yet at the same time he's adamant; "conspirators," "careerists," "cabals" and "cliques" are attempting to undermine the CCP from within.
Thus, with ironic/poetic justice, a 42-part series on corruption in China -- titled In the Name of the People and financed by the Middle Kingdom's top law enforcement agency -- is bound to go live before the end of 2016, featuring a CCP stalwart as the bad guy (that's a first). Call him the Chinese Frank Underwood.
This means that what Xi is saying -- and acting -- live will be mirrored on hundreds of millions of Chinese screens, pitting conflicting factions within the 88-million-member CCP. Xi's war on corruption has produced a rash of severely disgruntled CCP officials -- to put it mildly.
Add to these Xi's status as CCP's general secretary, chairman of the Central Military Commission, president of the national security commission and head of the top group for reform of the Chinese system, and a Harvard academic who refers to him as "the chairman of everything" does not seem to be that far off the mark.
Yet even this awesome concentration of power does not mean that Xi is an unassailable deity. On the key drama -- the state of the economy -- it has emerged that in a recent interview by the People's Daily with an anonymous "authoritative person," printed on the front page and exposing deep economic divergence among the CCP leadership, the "authoritative person" in question was none other than Xi.
He had to take to the key media read by anyone who's anyone in China to press his point on how to fix China's debt-ridden economy; low growth is OK, and the new normal; as for blind credit expansion/monetary easing, that's not OK. Xi, once again, is adamant; it's now or never to start a painful restructuring of the Chinese system.
Beware the "nests of foreign spies"
Xi Jinping does wield astonishing power. There can't be any other way. Imagine the man on top of a civilization-state of 5,000 years who needs, among myriad other crucial issues, to; tweak/manage an economic system that was successful for over 30 years but now needs to be upgraded; shift the system from export-led demand to domestic consumption; manage the aspirations -- and broken dreams -- of a vast working class including millions of newly unemployed; reorganize monster state-owned enterprises (SOEs); find ways to get rid of Himalayas of bad bank loans and "nonperforming" investments; downsize and at the same time vitally upgrade the Chinese military.
And if that was not enough, Beijing has to be fully alert 24/7 about all those non-stop Pentagon provocations -- actual and rhetorical -- centered in the South China Sea.
Yet it worked in Brazil -- a BRICS weak link. The CCP leadership has carefully -- and silently -- understood the Brazilian lesson, and is fully aware that Exceptionalistan would stop at nothing to slow down China's already spectacular global reach. So if you're a NGO operating in China, from now on you need to find an official Chinese sponsor and register with local police.
Back to the Chinese economy, the mantra across multiple, powerful Beltway factions is that a crash is imminent. Once again; the House of Cards theme.
China's total debt is now a whopping 280% of GDP. That includes the 115% that apply to SOEs' debts; in Japan, for instance, that SOE figure is only 31%. Yet what really matters is that only a maximum of 25% of Chinese SOEs' debts will need to be restructured.
Xi's strategy is that the Goddess of the Market will turbo-charge those SOEs, not kill them. So forget about the CPP handing out control of the Chinese economy to companies that the CCP itself does not control. No wonder what's left for US Big Capital's spokespersons is to carp about a House of Cards.
All eyes on 2021