China's political divisions, and its effects - Victor Shih

Victor Shih

The dismissal of flamboyant political leader Bo Xilai shows a new political landscape, where different political factions are becoming more prominent, says political analyst Victor Shih in The New Republic.

The New Republic:

 “Power is increasingly decentralized to different factions,” says Victor Shih, a political scientist at Northwestern University. Among the “vested interests” represented in the halls of power, there are the princelings, who hold a great deal of sway as the sons of the old revolutionary vanguard; the top executives of state enterprise, shaping policy-making from their ministerial seats in government; and powerful, well-connected regional leaders demanding resources from the capital. These and numerous other factional alliances are defined by networks of personal relationships, running through all levels of government, from China’s top policymaking body, the Politburo Standing Committee, to the Party magistrates in China’s cities and provinces. Whereas the top party figure once had supreme authority, attention now “must first and foremost” be paid “to the interests of the factional groups,” Shih told me, for it is the core elite from these groups “that ultimately decides policies, promotions, and even the political survival of the President of China.” 

But whatever their disparate objectives, each faction has gained from China’s furious economic growth, with wealth and political power increasing as a result of money flowing freely through their respective spheres of control. How convenient, then, that they also hold the purse-strings of finance through China’s state-controlled banks—banks whose reserves can be quickly mobilized for extending loans to projects championed by influencers in the party. It stands to reason why these vested interests haven’t been eager for the easy money to stop, and in fact have been cheerfully flexing their political muscles to direct investments into their own jurisdictions. “As long as you have politically powerful enterprises, as long as you have a banking sector which is dominated by the state and the Chinese Communist Party, there will be very high incentives to over-invest,” Shih says.

More in The New Republic.

Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Unprecedented online chatter on Bo Xilai - Jeremy Goldkorn

Jeremy Goldkorn

The recent dismissal of Chongqing party secretary Bo Xilai triggered off a lot of comments on China's microblogs. Even veteran internet watcher Jeremy Goldkorn has to admit in the Wall Street Journal he was amazed, this time.

The Wall Street Journal:

"I don't recall ever seeing anything like this on the Chinese Internet," said Jeremy Goldkorn, founder of Danwei, a website that tracks Chinese media, of the recent proliferation of political gossip. The presence of so much rumor online is one likely explanation for the stepped-up censorship, he said. 

"Things are getting a little too out of control, so they've decided to rein it in," Mr. Goldkorn said, adding that it was difficult to say whether the decision to block searches came from government authorities or the websites' own in-house censors. 

Searches for "Ferrari," "coup" and Zhou Yongkang's name were also blocked on Sina Weibo this week. To beat the blocks, users have begun referring to Mr. Zhou as "Kang Shifu," using the name of a drink and instant noodle brand in a wordplay on the last character in Mr. Zhou's name.

More in The Wall Street Journal Jeremy Goldkorn is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Bo Xilai is not yet finished - Victor Shih

Victor Shih

Chongqing communist party boss Bo Xilia might have been sacked from his post as provincial leader, earlier today, but that does not mean the big shot is finished, explains political and financial analyst Victor Shih in Bloomberg.

Bloomberg:

Shih is author of “Factions and Finance in China: Elite Conflict and Inflation” and has researched borrowing by about 8,000 local government entities in the nation. Bo was replaced by Zhang Dejiang, state news agency Xinhua reported today. 

“This series of events, starting from the walkabout of Wang Lijun and leading up to today is the strongest indication of elite tension we have seen since the arrest of Chen Liangyu.” 

Wang was an aide to Bo who is under investigation over spending a night at the U.S. consulate in Chengdu. Chen was fired as Shanghai Communist party chief in 2006 and later imprisoned for corruption. 

“I emphasize that the way the party seems to be dealing with Bo Xilai is a much milder way than the way that Chen Liangyu was treated, so far.” 

“You will hear other people say he’s finished. I’m not willing to say so at this point.” 

“I don’t think it is by any means the end of his political future. Deng Xiaoping made numerous comebacks after even more serious setbacks.”... 

“Zhang Dejiang and Bo Xilai both enjoyed a considerable amount of patronage from Jiang Zemin. If you believe that they are not necessarily in the same faction, but in the same kind of tendency in the party, then Zhang Dejiang would be a lot less likely to clean house in Chongqing than someone from the Youth League who wouldn’t have had those historical ties with Bo Xilai.” 

“People typically identified with the Youth League include Hu Jintao and Li Keqiang.” Hu is president of China and leader of the Communist party, and Li is a vice premier. 

“This strongly indicates there are major disagreements on how to interpret the events in Chengdu last month. The consensus is a compromise for now at least.”

More in Bloomberg.

Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

More on Victor Shih and China's debts on Storify.

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Bo Xilai: still an open wound - Victor Shih

Victor Shih

The political trouble surrounding political big-shot Bo Xilai has still not been solved, tells political and financial analyst Victor Shih in Business Week. More than a week after he sent 100 police men to surround the US consulate in Chengdu to fetch Wang Lijun, Beijing still has to act.

Business Week:

The situation is complicated by the fact that many officials hold shifting dual allegiances. And the relative openness allowed on the Internet to discuss Bo and Wang’s fate suggests that the outcome of the factional war is far from being decided, says Northwestern University political science professor Victor Shih. Otherwise, all comments on the incident would have been scrubbed from websites, he says. 

More worrying, says Shih, is the fact that Beijing has not yet publicly reprimanded Bo for his apparently unauthorized decision to dispatch perhaps 100 police officers from one political jurisdiction to another (from Chongqing to Chengdu, the capital of Sichuan, a few hours drive away), where they surrounded the U.S. consulate. “It’s as if the governor of Ohio has just sent armed forces across the border into Indiana. What would that say about the stability of the U.S. and what does this say about the future of China?” asks Shih. “A door has been opened to using highly unconventional means to settle conflict in China.” And that could end up being “highly disruptive to stability,” he warns.

More in Business Week.

Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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