BIG IDEA | ‘Mr. Xi is determined to bring the creators of wealth under the control of the one-party state.’

‘Mr. Xi came to power in 2013, but he was the beneficiary of the bold reform agenda of his predecessor Deng Xiaoping, who had a very different concept of China’s place in the world.’

• ‘Deng realized that the West was much more developed and China had much to learn from it.’
• ‘Far from being diametrically opposed to the Western-dominated global system, Deng wanted China to rise within it.’

‘Mr. Xi failed to understand how Deng achieved his success.’

• ‘He took it as a given and exploited it, but he harbored an intense personal resentment against Deng.’

‘He held Deng Xiaoping responsible for not honoring his father, Xi Zhongxun, and for removing the elder Xi from the Politburo in 1962.’

• ‘As a result, Xi Jinping grew up in the countryside in very difficult circumstances.’
• ‘He didn’t receive a proper education, never went abroad, and never learned a foreign language.’
• ‘Xi Jinping devoted his life to undoing Deng’s influence on the development of China.’

‘His personal animosity toward Deng has played a large part in this, but other factors are equally important.’

• ‘He is intensely nationalistic and he wants China to become the dominant power in the world.’
• ‘He is also convinced that the Chinese Communist Party needs to be a Leninist party, willing to use its political and military power to impose its will.’
• ‘Xi Jinping strongly felt this was necessary to ensure that the Chinese Communist Party will be strong enough to impose the sacrifices needed to achieve his goal.’
• ‘Mr. Xi realized that he needs to remain the undisputed ruler to accomplish what he considers his life’s mission.’

‘He intends to overstep the term limits established by Deng, which governed the succession of Mr. Xi’s two predecessors, Hu Jintao and Jiang Zemin.’

• ‘Because many of the political class and business elite are liable to oppose Mr. Xi, he must prevent them from uniting against him.’
• ‘Thus, his first task is to bring to heel anyone who is rich enough to exercise independent power.’

‘That process has been unfolding in the past year and reached a crescendo in recent weeks.’

• ‘It started with the sudden cancellation of a new issue by Alibaba’s Ant Group in November 2020 and the temporary disappearance of its former executive chairman, Jack Ma.’
• ‘Then came the disciplinary measures taken against Didi Chuxing after it floated an issue in New York in June 2021.’
• ‘It culminated with the banishment of three U.S.-financed tutoring companies, which had a much greater effect on international markets than Mr. Xi expected.’
• ‘Chinese financial authorities have tried to reassure markets but with little success.’

‘Mr. Xi is engaged in a systematic campaign to remove or neutralize people who have amassed a fortune.’

• ‘His latest victim is Sun Dawu, a billionaire pig farmer. Mr. Sun has been sentenced to 18 years in prison and persuaded to “donate” the bulk of his wealth to charity.’

‘Mr. Xi is determined to bring the creators of wealth under the control of the one-party state.’

• ‘He has reintroduced a dual-management structure into large privately-owned companies that had largely lapsed during the reform era of Deng.’
• ‘Now private and state-owned companies are being run not only by their management but also a party representative who ranks higher than the company president.’
• ‘This creates a perverse incentive not to innovate but to await instructions from higher authorities.’

‘To prevail in 2022, Mr. Xi has turned himself into a dictator.’

• ‘Instead of allowing the party to tell him what policies to adopt, he dictates the policies he wants it to follow.’
• ‘State media is now broadcasting a stunning scene in which Mr. Xi leads the Standing Committee of the Politburo in slavishly repeating after him an oath of loyalty to the party and to him personally.’
• ‘This must be a humiliating experience, and it is liable to turn against Mr. Xi even those who had previously accepted him.’
• ‘In other words, he has turned them into his own yes-men, abolishing the legacy of Deng’s consensual rule.’

‘With Mr. Xi there is little room for checks and balances.’

• ‘He will find it difficult to adjust his policies to a changing reality, because he rules by intimidation.’
• ‘His underlings are afraid to tell him how reality has changed for fear of triggering his anger.’
• ‘This dynamic endangers the future of China’s one-party state.’