Xi Jinping’s order to suspend Ant Group’s IPO in Hong Kong at the last minute has shocked the international financial community. The company’s founder Jack Ma belongs to the Jiang faction and has a close relationship with Jiang Zhicheng, the grandson of former President Jiang Zemin. Jiang Zhicheng is also one of the partners of Chinese private equity firm Boyu Capital, which is one of Ant’s early investors and holds about 3% of its shares. This is all public information and there is nothing insider whatsoever. Other shareholders of Ant include pro-Jiang corporate figures such as Guo Guangchang, one of the founders of Chinese multinational conglomerate Fosun International, Shi Yuzhu, founder and chairman of Giant Network Group, and Lu Zhiqiang, chairman of Chinese property company Pan Ocean Holdings.
Recently, The Wall Street Journal reported again the inside story of Ant’s power struggle, pointing out that in addition to Jiang Zhicheng, another secret backer behind Ant’s IPO was Li Botan, the son-in-law of Jia Qinglin, a former member of the Politburo Standing Committee. Actually, all these are old news. The question is why is it being reported by a foreign media outlet at this time? The most interesting part of the article is that it quotes “the people familiar with the matter stressed that Xi Jinping had little interest in having the Ant IPO funnel enormously lucrative financial stakes to well-known Chinese princelings; the leader was concerned that could only widen the income gap and hurt his initiative to reduce poverty.” According to the insider informants to The Wall Street Journal, the dispute between Xi and the second-generation rich is depicted as not a fight between interest groups, but rather as a fight for the collective interests of the people of the country; Xi Jinping represents justice, and he is willing to cut his ties with the second-generation rich and second-generation red in order to combat the disparity between the rich and the poor.
From the back-and-forth exchanges in the Ant’s power struggle, it is clear that the Chinese Communist Party’s (CCP) inherent defects will be further aggravated by Xi Jinping’s shattering of the decade-old consensus on power distribution within the party. The CCP has been engaged in a fierce power struggle since its founding, ostensibly over the political line, but in reality around who should take control of the party. There are several dichotomous concepts: individual dictatorship vs. collective leadership, cult of personality vs. organizational discipline, and political dominance vs. economic development. After the failure of the Great Leap Forward, Mao Zedong was forced to hand over the reins of power. Since then, he kept envisioning ways to seize power and did not hesitate to use the Red Guards to crush the party machinery, resulting in the disastrous Cultural Revolution that plunged the country into turmoil.
Deng Xiaoping cleaned up the mess by setting rules within the party to put a seal on the “madness around Mao Zedong.” Deng banned personality cults, restored collective leadership, diversified power within the party, proposed measures that limited the term of office of leading positions, and adopted the tradition of designating successors in alternate generations. The purpose of these mechanisms was to prevent the re-emergence of the extreme politics represented by Mao Zedong. Although Deng Xiaoping himself could not escape the DNA of the party’s power struggle, and personally destroyed two successors, Hu Yaobang and Zhao Ziyang, these rules still served their purpose. Jiang Zemin and Zhu Rongji came to power after the Tiananmen Square protests of 1989, followed by Hu Jintao and Wen Jiabao for 10 years and then Xi Jinping and Li Keqiang for another 10 years. The transition of power was smooth and brought political stability to the CCP for three decades. There were still power struggles, such as the political incidents of Chen Xitong, Chen Liangyu and Bo Xilai, but the struggles did not rattle the political order and stability of the CCP.
Now that the “seal” has been lifted, Xi Jinping has changed the country’s constitution to remove the presidential term limits. As for the successor to the party secretary, Xi has one year left in his 10-year term and there is no successor in sight. Xi hopes to emulate Mao’s era when there were no term limits, but he does not have Mao’s absolute power and political charisma within the party. This will jeopardize the political order within the party that was built up over the past 30 years.
The Wall Street Journal’s insider report on Ant Group indicates that the “wealth gap” will be the direction of the struggle in the future. If this populist approach to manipulating class conflicts is the master plan for Xi’s re-election, then is Ant just an isolated incident or is it the first strike against the interests of the second-generation rich and the second-generation red?
(Lau Sai-leung, political commentator)
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