With eyes all around the world focusing on China as the Yuan, the domestic market, and global confidence in Beijing are all dropping, Chinese President Xi Jinping could arguably be holding the world’s least wanted job – the leader of the world’s second-largest economy.
But that’s not to say that he hasn’t been doing his job. President Xi Jinping has consolidated more power within his country than any other Chinese leader since the early 1990s, which happened just in time for a major economic slowdown and financial markets turmoil – the Shanghai Composite tumbled again last Tuesday as China reported its weakest factory activity in three years.
However, at the current moment, the Chinese leadership has been under a great deal of pressure both from within and from outside, says an East Asia analyst at geopolitical intelligence firm Stratfor, John Minnich.
“None of these issues by themselves would be enough to apply any pressure,” he said. “But together, It’s kind of a perfect storm where a lot of these things are hitting.”
Beijing Under Pressure, Economy Takes the Heat
There were also other internal instabilities which are making it harder for Xi. A deadly industrial explosion in Tianjin last month cast further doubt on Xi’s capability to control local officials, a politically inopportune event during a key moment in his campaign to reform China’s economy and environmental practices at the same time.
John Minnich feels that the internal uprising against the Government could be imminent with the turn of current events. “We are approaching a moment where, in the next couple of months, if there is going to be resistance from within the leadership against Xi, we are going to see (it) emerging more strongly,” he said.
It also did not help at all when the Government poorly handled the stock market crash – which saw everything from liquidity interventions to arrests for allegedly malicious selling. This represented the first big stumble for the Xi administration, said Nicholas Consonery, the Asia director for the Eurasia Group.
But even with this series of unfortunate events and resistance building up, Xi appears to have consolidated enough power to achieve his reform goals, according to experts.
While Eurasia Group’s Consonery said the equity market interventions were “definitely” counterproductive, he was still optimistic about Xi’s plans to manage broader economic headwinds.
“I’m not overly panicked about their ability to manage through these problems,” he said, adding that it’s unlikely there will be any changes at the top of the country’s leadership.
Government Cracking Down on Dissent
Minnich shared the same opinion that Xi and his close allies won’t lose control of the situation—especially given his continuing popularity with the regular citizenry — but his capacity to institute reforms may be limited by political resistance.
“Xi is not all-powerful,” Minnich said.
The government seems to be doing something to curb the internal uprisings. In fact, it appears that Beijing is trying to warn off would-be resistance from within. Chinese state media carried an editorial in August warning retired officials not to undermine the Communist Party by agitating against its current leadership. Additionally, another state commentary reportedly warned that Xi’s reforms encountered “unimaginably fierce resistance” from different interest groups.
Even the media—normally considered a mouthpiece of Beijing’s power — may have angered the Xi administration.
Last week, authorities arrested Liao Hong, CEO and editor-in-chief of People’s Daily Online, allegedly on suspicion of taking bribes. Many have suggested that the move is punishment for not following a governmental edict.
People’s Daily did not respond to requests from the press for comments.
“Leadership is moving into a time when it needs to be sure it can be effective at shaping domestic perceptions of its actions,” Minnich explained, so Xi may be attempting to redouble his control over the media.
Still, as with many aspects of China analysis, the country’s political inner workings remain largely opaque, so the exact nature of the situation is difficult to ascertain.