Chinese Rumor Season has Arrived


Posted below is the front page of the People’s Daily on July 24th showing large propaganda love for chairman Xi’s Africa trip. This is great context for the Nikkei article and my writing about rumors around Beidaihe.

Xi July 24th

The Rumors 

China, a land of intense political opaqueness, is prone to rumors at times of large political decisions. Sit back, dear reader, and enjoy the headlines as we enter Beidaihe season. To begin, here is Nikkei. Nikkei’s article says that Chairman Xi Jinping is a victim of domestic discontent and forced to take a smaller role within the party. From Nikkei:

The compound that houses the headquarters of the Chinese Communist Party and the State Council — a walled-off part of central Beijing — looks to be on a war footing. The irregular signals that have come out of the former imperial garden, known as Zhongnanhai, over the past few weeks hint that tensions are mounting behind the bamboo curtain, likely over the trade war with the U.S.

One sign of this is the higher profile that Chinese Premier Li Keqiang has been taking and the slightly lower profile that President Xi Jinping has assumed.

What is the evidence that Chairman Xi is assuming a lower profile? Nikkei sites three reasons: Xi’s relative lack of propaganda in the People’s Daily, the relative rise of Li Keqiang, and the changing of Liu He for Wang Qishan regarding American trade.

After making unrelated points, inserting pictures of Elon Musk, and name dropping Rahm Emanuel, Nikkei makes their conclusion. Regarding the future of Xi, they state:

Although Xi is taking a less high-profile posture, his authority remains unshaken.

Kremlinology rumoring the weakening of Xi’s power? Inconclusive conclusions that contradict the larger point of an article? What is happened to China reporting?

Welcome To Beidaihe

What is Beidaihe? Beidaihe, a seaside resort 160 miles miles east of Beijing, is the summer meeting place of the Chinese communist party. The ‘summer meetings’ are not held at a publicly known time, although they usually start around early August. Who attends, what is said, and the agenda are all secret, however these informal summer meetings are known to be a key decision making mechanism. They’ve been key for some time, the 1958 Beidaihe meeting being one of the most famous. We are now entering Beidaihe season; the 2018 meeting is rumored to start soon.

Given the importance and opacity of this political occasion, this is prime-time rumor season. The meetings at Beidaihe and rumors preceding the meeting happen annually.

Regarding Nikkei’s article, before Beidaihe it is the norm for the Chinese Chairman or leader to take a relative break from the public eye. It is a time of reflection and preparation for party interaction.

It is interesting that Nikkei insinuated Li Keqiang’s rising stock given that last year he was rumored to be out of a job. It is also interesting that Nikkei noted Liu He and Wang Qishan taking turns to attack similar problems when their similar duties were previously seen as a strength.

Notable rumors of the past few years include:

I distinctly remember the 2012 coup rumors (BBC) before Xi took power. I remember searching for further news about tanks in the streets of Beijing, and I remember being surprised to find that it was a strange rumor.

Truth in Action

The truth is that China is a politically closed system, and only a handful of people are open to the inner workings of party dynamics. Every year it is worth noting when the party will meet and planning to ignore rumors at that time.

In general, it is worth knowing that China has a lot of inertia. There are powerful vested interest in staying political course and not strong mechanisms for change. It is not worth listening to talking points and noise. One should instead focus on the inertia itself.  For example, many lauded Chairman Xi Jinping’s 2017 Davos Speech for the talking points included, but 18 months (European Chamber of Commerce report worth reading) after Davos China hardly represents a repeatable system worth exporting and is empty handed on any meaningful reform.

Good luck rumor hunting.