The pro-market wing is targeting the "common prosperity" advocated by the Chinese leader: it could turn into "common poverty". It is unlikely that Xi will save Evergrande, the real estate giant at risk of bankruptcy: links with the opposing faction of the Communist Youth. Sinologist Willy Lam: the president does not even have the unconditional support of the army.
Beijing (AsiaNews) - Xi Jinping's Maoist revival has caused divisions within the Chinese Communist Party (CCP), according to well-known sinologist Willy Lam writing for China Brief. Above all, there are allegedly differences over the "common prosperity" plan promoted by Xi: the attempt to force large (private) industrial groups to share their growing wealth with the less privileged strata of the population.
What at first glance seems to be an 'egalitarian' process is exemplified by the Chinese president's attack on the big monopolies in the hi-tech sector. However, the Chinese leader's anti-trust campaign has not targeted large state-owned enterprises.
Some observers point out this is a sign that Xi's Maoist turn has little to do with wealth redistribution, but is actually a way to take down leading businessmen whose economic strength could threaten the power of the Party and its top "helmsman".
Lam argues that the more "liberal" wing of the CCP would push to maintain the system of economic liberalization launched by Deng Xiaoping in the late 1970s and strengthened since 1992.
Liberal scholars such as the Peking University economics professor Zhang Weiying, warns that Xi's common prosperity goes against the fundamental laws of the market and could result in "common poverty". The most immediate risk is to frighten foreign investors.
The authorities are increasingly worried about social unrest linked to the possible bankruptcy of Evergrande, a large real estate company that has accumulated a debt of almost 300 billion dollars. Street protests by creditors and investors have already taken place in Shenzhen, Zhengzhou and other cities.
Analysts disagree on whether the state should intervene to save a company that is 'too big to fail'. Nikkei Asia points out, however, that Evergrande founder Xu Jiayin's proximity to the Communist Youth makes saving the company less likely.
Since becoming president in 2013, Xi has marginalised the powerful Party faction linked to his predecessor Hu Jintao and Premier Li Keqiang.
The power struggle in the Party is emerging as the national economy grows an increasingly slow pace, with consumer spending struggling to recover from the Covid crisis and youth unemployment remaining around 15%.
In order to shore up his power ahead of the 6th plenum in November and the 20th Party Congress next year, Xi reportedly ordered the purge of many members of the security apparatus and the judiciary. The purged, Lam reports, are accused of planning actions against the top leadership. The group also includes the billionaire Lai Xiaomin, former chairman of the public investment company Huarong, who was sentenced to death in January for corruption, embezzlement and "bigamy".
Lam maintains that Xi no longer enjoys the unconditional support of the armed forces. This was demonstrated by the four changes of guard in less than a year at the head of the Western Command, the largest regional unit of the Chinese army. This command encompasses sensitive provinces such as Tibet and Xinjiang and is responsible for security along the hot borders with India and Afghanistan.