As Chinese leader Xi Jinping seeks an unprecedented third term at the 20th National Party Congress this fall, his opponents in the Communist Party of China (CCP) will take advantage of the country’s internal unrest to undermine him, according to the former diplomat and author Roger Garside.
“There are tipping points … looming on the Chinese scene of the most serious,” he said, adding that these would allow rivals within the leadership to oppose Xi.
Garside, the author of the book “China Coup”, said the Chinese leader faces a combination of external and internal pressures.
Externally, the United States is stepping up scrutiny of Chinese companies’ participation in its capital markets, he said, referring to the Foreign Company Liability Act (HFCA Act) that the former President Trump signed into law in 2020. The law aims to protect investors from foreign companies that do not comply with US auditing standards.
Under the legislation, foreign companies that fail to comply with Public Company Accounting Oversight Board (PCAOB) audits for three consecutive years could be delisted from US stock exchanges.
In total, more than 120 U.S.-listed companies are slated for potential delisting by the U.S. Securities and Exchange Commission (SEC), including major Chinese technology companies, such as e-commerce company JD.com, e-commerce focused on agriculture. platform Pinduoduo Inc., video sharing platform Bilibili and internet technology company NetEase Inc.
“This provocative path to confrontation between China and America is still a few years away, but it’s on the way,” Garside recently told Epoch TV’s “China Insider.”
In China, the massive shutdowns instituted under the regime’s strict “zero-COVID” strategies have produced “a very vulnerable state in China and an imperative to isolate China from the rest of the world”, he said. .
Analysts at Japanese bank Nomura estimate that 26 Chinese cities were implementing full or partial shutdowns or other COVID measures as of May 23, accounting for 208 million people and 20.5% of China’s economic output.
“And internally, it’s sparking, as we’ve seen on videos from Shanghai and elsewhere, anger, outrage, and an erosion of respect and loyalty to the Communist Party,” Garside said. .
“But this happened against the backdrop of a dismal performance of the real estate sector. We have seen the failure of major property developers,” he added.
Struggling with more than $300 billion in debt, Chinese property developer Evergrande defaulted on its offshore obligations last year. Other property developers, including Sunac China Holdings, Fantasia and Country Garden, also joined the list of companies struggling to meet their financial obligations.
Garside expects further economic damage as home sales are down more than 40% and unemployment rises in major cities.
According to the expert, the biggest challenge to Xi’s rule came from opposition factions within the CCP.
While Xi has done a lot over the past 10 years to centralize power, Garside believes his stance is one of being “externally strong, but internally weak.”
Meanwhile, there are others in the Party who are keeping a low profile, but “anxious for their own power and wealth”, he said, adding that “they know the risks the Chinese regime is facing. now confronted”.
“Their calculation is that their best hope of protecting their own wealth and power, as well as the interests of the nation, in the short to medium term lies in their leading the revolution,” Garside said.
The author further pointed to comments by former Chinese Party insider Cai Xia, who was a professor at the Central Party School in Beijing, to illustrate his point.
In his publication “China-US Relations in the Eyes of the Chinese Communist Party,” Xia wrote, “At least 60 to 70 percent of senior CCP officials understand the trend of progress in the modern world. They understand that only a democratic constitutional government can ensure long-term stability in China and protect human rights, personal dignity and personal security for oneself.