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Beijing Diary

Xi's victory-over-poverty ceremony, as seen from a traffic jam

Nikkei's China bureau chief offers snapshots of politics amid the pandemic

An image captured from CCTV shows President Xi Jinping handing a certificate to an elderly woman during a ceremony in Beijing on Feb. 25.

China is locked in a heated diplomatic confrontation with the U.S. At home, President Xi Jinping continues to strengthen his grip on power. All the while, the world is struggling to stop the coronavirus pandemic that started on Chinese soil. Nikkei's bureau chief in China, Tetsushi Takahashi, is following these world-shaping stories from the heart of Beijing.

Friday, Feb. 26

Whenever President Xi Jinping visits the Great Hall of the People, to the west of Tiananmen Square, strict traffic controls are imposed and regular vehicles end up stranded.

On Thursday afternoon, as I was driving along Chang'an Avenue about 500 meters from the square, all of the traffic lights suddenly turned red. Numerous police cars and officers were waiting in the area. Sporadically, black cars zoomed past in the opposite lane. About 20 minutes later, the lights finally turned green.

That morning, Xi had attended a ceremony to celebrate China's accomplishments in eradicating poverty and commend role models at the Great Hall of the People. I got stuck near the square shortly after the ceremony ended, as Xi and other senior party officials were being whisked from the Great Hall to Zhongnanhai, Beijing's political district.

State-run China Central Television broadcast live coverage of Xi handing out medals, certificates and plaques to key figures in the anti-poverty fight. Thousands of people of different ethnicities from around the country were present, all wearing masks.

The highlight came when an elderly woman appeared in a wheelchair. As Xi bent over a little to hand her a certificate, the woman tried to stand up, as if she felt obliged to do so. Xi stopped her with a gentle smile. Chinese viewers must have seen a benevolent leader reaching out to the vulnerable.

After the ceremony, Xi began his speech. China has achieved a "complete victory" in its fight against poverty at an important time in its history, just before the Communist Party celebrates its centennial this year, he said. As I expected, Xi commented on the party's 100th anniversary, coming up in July.

Yet there is some debate as to whether China has fully eliminated rural poverty.

"Over the past eight years, the final 98.99 million impoverished rural residents living under the current poverty line have all been lifted out of poverty," Xi said.

China defines the poverty line as less than 4,000 yuan ($618) a year, or $1.69 a day. That is lower than the World Bank's threshold of less than $1.90 a day.

Xi himself admits there is a long way to go to close the gap between cities and rural areas. Yet, China has to declare a "complete victory" in its fight against poverty because the country set a target to do so by 2020 in its five-year plan, which started in 2016.

The president's speech lasted for an hour. The crowd must have waited for Xi and the other senior party officials to leave the hall and return to Zhongnanhai. After the traffic restrictions were lifted, they were enforced again 15 minutes later to make way for large buses.

"The people of all ethnicities must unite even closer under the party's leadership," Xi concluded in his speech. Those who declare their loyalty to Xi will help further cement the Communist Party's rule.

Monday, Feb. 22: Xi's homework for all: studying 'correct' Communist Party history

On Saturday morning, I visited Xiangshan, a western Beijing suburb known for vibrant fall foliage. My destination was Shuangqing Villa, where Communist China's founding father Mao Zedong spent half a year until the People's Republic was founded in October 1949.

When I passed through the villa's gate, I encountered about 20 women loudly chanting a slogan, "The hearts of women are with the party. Let's struggle toward a new long way."

The flag of the Chinese Communist Party, with its yellow hammer and sickle against a red background, was being raised. The women were all wearing party member badges on their chests.

They said that a large-scale campaign dubbed "girls celebrating the 100th anniversary of the party's foundation" will be launched in Beijing. They seem to have been mobilized to promote the anniversary, which is coming up in July.

They also chanted another slogan: "We propose: Let's study the party's history and repay the party's favor."

The words lingered in my ears.

At around the same time, President Xi Jinping was attending a meeting of party cadres in Beijing. The meeting was held to launch a campaign promoting knowledge of party history among all members.

Delivering a speech at the meeting, Xi called for efforts to "study the party's history, understand its theories, do practical work and make new advances." He declared the start of a new mass movement to cement the "correct view of the party's history."

Encouraging education about party history is nothing new. Xi has often referred to the importance of it since the last quinquennial national congress in October 2017. After that, he visited the venue for the party's first such conference in Shanghai and stressed that the Communists' "original aspirations" must never be forgotten.

Only by keeping those aspirations in mind, Xi argued, could current cadres reassure their predecessors, win public support and leap forward. "Don't forget original aspirations" has become a mantra for Xi.

Still, this appears to be the first campaign focused on party history that mobilizes the public. The People's Daily, a party mouthpiece, has been publishing feature articles delving into the history on a near-daily basis lately.

On Feb. 1, ahead of the Lunar New Year holidays, Xi held a meeting with businesspeople who are not Communist Party members. He detailed the history education campaign, nudging even those who do not belong to the party to learn about its past.

When Xi speaks about Communist Party history, he is acutely aware of the path Mao followed. When he visited Guizhou Province early this month, he described the Zunyi Conference as "a great turning point" for the party.

When the Communist Party was established in 1921, Mao was still just one party member. It was at the conference in Zunyi, Guizhou, in 1935 that he assumed the leadership during the grueling military retreat known as the Long March of 1934-1936.

Xi's own significant promotion came at the party congress in autumn 2007, when he joined the Politburo Standing Committee -- the top decision-making body -- after holding numerous local posts. Xi might be comparing his own path to Mao's.

The history study campaign is to continue even after the 100th anniversary. This is because it is part of Xi's efforts to secure a third term as supreme leader at the next national congress in autumn 2022.

Naturally, two incidents are missing from the party's history advocated by Xi: the 1966-1976 Cultural Revolution, which was launched by Mao and plunged China into chaos, and the 1989 military suppression of pro-democracy student demonstrators at Beijing's Tiananmen Square.

This is history designed to protect the myth of the Communist Party's infallibility.

Friday, Feb. 19: Tesla and China cultivate give-and-take relationship

U.S. electric vehicle maker Tesla Motors began shipments of Shanghai-made Model 3 sedans in January 2020, quickly selling about 140,000 units in China. The company's EVs are now a common sight in Beijing and Tesla has become one of the best-known American brands in the country, alongside Apple and Starbucks Coffee.

A Tesla dealer at an upscale Beijing shopping mall was packed with customers during the Lunar New Year holidays, which ended on Wednesday. "The cheapest model is priced at 249,900 yuan," or $38,500, a young saleswoman said. "Why don't you try it out?"

Teslas are already affordable for the average middle-class resident in Beijing. Yet, over the holidays there was speculation that the company might introduce much cheaper models to cement its strong position in the Chinese EV market. Media reports saying Tesla China's president had hinted at a 160,000 yuan EV went viral on social media.

The automaker denied the rumors and the hubbub died down. Some prospective buyers were surely disappointed, but the buzz only added to Tesla's allure.

Yet, all is not well for Tesla in China. The State Administration for Market Regulation announced on Feb. 8 that it had questioned Tesla's Chinese unit with the Ministry of Industry and Information Technology and the Ministry of Transport.

This followed scattered reports of technical problems, including abnormal accelerations, batteries catching fire and failures associated with upgrading automotive software wirelessly. Tesla immediately issued a statement on Weibo, the Twitter-like microblogging site, pledging to tighten its internal controls in accordance with the government's guidance.

Tesla attracts so much attention in China, good or bad, partly due to the popularity of founder Elon Musk. He does not hesitate to declare his affection for China and made frequent visits before COVID-19 swept the world.

His visit in July 2018 caused the biggest stir. Musk brought in two red Tesla cars to Zhongnanhai, Beijing's political nerve center, and met with Vice President Wang Qishan, a close aide to President Xi Jinping.

When he visited Zhongnanhai again in January 2019, he was quoted on the website as saying, "I love China and want to come here more often."

Premier Li Keqiang replied, "If you do, we can issue you a Chinese green card."

For Beijing, which is digging in for a protracted battle with Washington, it could be advantageous to have Tesla on its side. Indeed, Tesla and China have established a give-and-take relationship.

Monday, Feb. 15: China media fog thickens after BBC World News goes dark

Last Friday, as China ushered in the Lunar New Year or Spring Festival, it blacked out Britain's BBC World News.

Other foreign channels like America's CNN and Japan's NHK were still available. But when I flipped to BBC World News, a message appeared on screen saying the service had been blocked.

The same day, the National Radio and Television Administration -- China's broadcasting regulator -- issued a notice banning the British broadcaster. The NRTA said in a statement that BBC World News "went against the requirements that news reporting must be true and impartial, and undermined China's national interests and ethnic solidarity."

The watchdog went on: "As the channel fails to meet the requirements to broadcast in China as an overseas channel, BBC World News is not allowed to continue its service within Chinese territory."

How, exactly, did the 24-hour news network undermine Chinese "ethnic solidarity"? The NRTA was likely referring to the BBC's pursuit of stories on human rights in the Xinjiang Uighur Autonomous Region.

This includes detailed allegations of systemic sexual assaults on women in what China calls "re-education centers" for ethnic Uighurs in the region.

Of course, regular TV viewers in China have not seen these reports. Foreign channels are constantly monitored by Beijing's censors and, if their content is deemed unfavorable to China, they are quickly but temporarily blocked.

China went further against the BBC, though, issuing an outright ban. This is likely in retaliation for the U.K.'s recent move against a Chinese state-run broadcaster.

On Feb. 4, the Office of Communications, the British media regulator better known as Ofcom, revoked the broadcasting license of China Global Television Network, or CGTN.

Ofcom acted on the grounds that the Chinese Communist Party wields editorial control over CGTN. It said this puts the channel in violation of a British law stipulating that a company controlled by a political group cannot hold a broadcasting license.

No Chinese media outlet is truly independent of the Communist Party in the first place. Ultimately, all newspapers, TV channels and radio stations have little choice but to serve as the "throat and tongue" of the party. Control of the media has only increased since Xi Jinping became the country's supreme leader in autumn 2012.

CGTN was created at the end of 2016 after a spin-off of the English, French and other foreign-language broadcasting divisions of state broadcaster China Central Television, or CCTV. CGTN emerged as a vehicle for spreading the Communist Party's perspective globally.

Now the party, which does not recognize press freedom, has made an example of the BBC as a representative of Western media outlets advocating freedom and democracy.

On Saturday, the second day of the Lunar New Year period, I went to the NRTA building about 3 km west of Tiananmen Square. It is a majestic Soviet-style structure built in 1958, in a sign of the importance the Communist Party attached to broadcasting from its early days.

For the first time in a while, Beijing was hit by heavy smog on Saturday. The NRTA building looming in the haze seemed to symbolize the party's veiled propaganda operations.

Friday, Feb. 12: Timing of first Biden-Xi phone call speaks volumes

Three weeks after he replaced Donald Trump, U.S. President Joe Biden had his first telephone call with his Chinese counterpart Xi Jinping on Thursday morning, Beijing time.

It was the eve of the Lunar New Year, the most important day for spending quality family time in China. Thursday also marked the first day of the weeklong string of New Year's holidays known as the Spring Festival.

Which side requested the long-awaited call?

In an interview with CBS aired on Feb. 7, Biden had expressed his intention to call Xi. "Well, we haven't had occasion to talk to one another yet," he said, adding, "There's no reason not to call him."

The English service of China's state-run Xinhua News Agency reported that Xi "took a phone call from" Biden. It might be true that Biden called and Xi answered. But the Chinese-language version of the Xinhua report -- the official one -- hints there is more to the story.

One term that often appears in reports about Xi's telephone talks with foreign leaders is missing from the Chinese version: yingyao. It is used to imply that Xi made an appointment for a telephone conversation in response to a request from others.

When Xinhua reported on calls between Xi and Trump, it used "yingyao" almost every time.

The fact that the term is missing from the Chinese report strongly suggests that it was Xi's side, not Biden's, that requested the call.

There is also reason to think that the Xi-Biden chat was specifically set for the morning of Chinese New Year's Eve in response to a request from Beijing.

According to Xinhua, Biden offered his New Year's greetings to the Chinese people at the outset of the conversation. After listening to Xi, Biden is quoted as saying, "China is a country with a long history and great civilization, and the Chinese people are great people."

It sounds as if Biden called Xi to offer his New Year's greetings and sang China's praises.

State-run China Central Television, known as CCTV, treated the call as an "auspicious event," with a female announcer in a traditional bright-red festive dress reading out the news.

There is a 13-hour time difference between Washington and Beijing. The call occurred on Wednesday night, Washington time.

Now consider Biden's first call with Japanese Prime Minister Yoshihide Suga. It was set at shortly before 11 a.m. Washington time on Jan. 27 -- perhaps out of concern for the 78-year-old U.S. leader's health.

But that was shortly before 1:00 a.m. on Jan. 28, Tokyo time. One might even call it a thoughtless time to call another country's prime minister, who happens to be 72.

To me, this suggests Biden is giving greater consideration to Xi than to Suga.

Xi reportedly told Biden that China and the U.S. "should reestablish the various dialogue mechanisms." The Chinese president probably felt he could talk with Biden easily compared with the unpredictable Trump.

Monday, Feb. 8: Bo Xilai rumors linger over US-China ties 9 years after purge

It has been nine years since a high-profile political drama began to play out in China, shaking the Communist Party.

On Feb. 6, 2012, Wang Lijun, then the vice mayor of Chongqing, sought refuge at the U.S. Consulate in Chengdu. Wang was a close aide to Bo Xilai, the top party official in Chongqing, and his move marked the start of Bo's bizarre downfall.

Wang, who was also Chongqing's public security bureau chief, reportedly told U.S. officials that Bo's wife was behind the murder of a British businessman. In seeking asylum, Wang is said to have passed significant classified information about Bo to the Americans.

This occurred about a week before Xi Jinping, then China's vice president, traveled to the U.S., where he held hours-long talks with his counterpart Joe Biden.

At the time, Xi was already considered a shoo-in to take the helm of the Communist Party as general secretary at the national congress in fall 2012. To this day, there is lingering speculation that Biden might have informed Xi of a Bo plot to block his appointment.

There is no public evidence of that. But it is true that, after Xi returned to China, Bo's career went into a downward spiral.

Bo had been tipped to join the Politburo Standing Committee, the Communist Party's top decision-making body. Instead, he was dismissed as Chongqing's party secretary that March. Then, in April, he was dismissed from the Politburo for "serious disciplinary violations."

Bo was incarcerated at Qincheng Prison, about 50 km north of central Beijing. The facility is famous for holding first-degree political criminals. The list includes the "Gang of Four," key figures in the 1966-1976 Cultural Revolution, one of whom was Mao Zedong's last wife, Jiang Qing.

On Saturday morning, Feb. 6, I passed by Qincheng Prison.

Since the maximum-security penitentiary is surrounded by high fences, I could not see inside. Occasionally, I saw ordinary cars enter and leave the grounds. I imagined they were relatives visiting inmates.

Zhou Yongkang, a former Politburo Standing Committee member and Bo backer, and Ling Jihua, a close aide to former President Hu Jintao, are also believed to be incarcerated there.

Zhou and Ling might be there for life. Yet another lingering rumor, however, contends that Bo was released due to a serious illness and that he is recuperating somewhere else.

I visited Bo's address in central Beijing, listed in public court documents, on the off chance that he might be there. The shabby, neglected condition of the home made it difficult to picture anyone living there. "It used to be a very fine house," a neighbor told me. "I think Bo Xilai lived here for a short period of time."

Nearly a decade on, Xi is now looking to secure a third term at the party's next national congress in fall 2022.

Last Thursday, the president inspected an air force base in Guizhou Province, rewarding troops for their service ahead of the Chinese New Year. Xi has yet to hold an official call with Biden, who took office as U.S. president in January.

What sort of horse trading, if any, goes on between the Chinese and U.S. leaders? The fierce power struggle within China cannot be easily separated from Beijing's relations with Washington.

Friday, Feb. 5: Friendship and calculation: Xi and Myanmar's Suu Kyi

On Thursday afternoon, the Myanmar Embassy in Beijing was under tight security.

Four armed police officers were standing guard, although there are usually only two. Two police officers also could be seen in a vehicle parked in front of the gate.

There is no doubt that the embassy is being guarded strictly, compared with the adjacent Indonesian and Afghan embassies.

Myanmar's armed forces staged a coup on Monday, detaining the country's state counselor and de facto leader, Aung San Suu Kyi.

This is an attempt to overthrow a democratically elected government by force. It wouldn't be a surprise if protesters flocked to Myanmar's embassy in Beijing. China has probably tightened security to prevent any unexpected situation in the capital.

But it is too early to tell whether the Chinese government, led by President Xi Jinping, is unilaterally siding with Myanmar's armed forces.

Chinese media outlets have given extensive coverage to Myanmar citizens banging pots and pans loudly to protest against the coup. At least for now, China has not imposed any restrictions on such domestic reports.

This seems to reflect the Xi leadership's bid to maintain relationships both with pro-democracy forces, including Suu Kyi, and with the armed forces in Myanmar.

Xi visited Myanmar in mid-January last year, shortly before the explosive outbreak of the coronavirus in Wuhan, Hubei Province. It was the first visit to the Southeast Asian country by a Chinese president in 19 years.

Xi's visit to Myanmar came at a time when Suu Kyi was drawing strong criticism from the international community over the persecution of the Rohingya Muslim minority. Xi promised Suu Kyi that China would not interfere in Myanmar's internal affairs.

Suu Kyi might have felt she should give something back. In a joint statement issued by the two countries, Myanmar's support for China's "efforts to resolve the issues of Taiwan, Tibet and Xinjiang" was included -- Suu Kyi showed her understanding of China's policy on Taiwan, Tibet and Xinjiang despite being aware that Myanmar's friction with Western countries would further intensify over human rights.

At the time, Xi must have seen Suu Kyi as a reliable "friend." When the National League for Democracy won a landslide in the general election last November, Xi sent a congratulatory message to Suu Kyi, the party's chairwoman. In the message, Xi expressed hope on working with Suu Kyi to "deepen exchanges and mutual learning" between the Chinese Communist Party and the NLD. Xi also is the general secretary of the Chinese ruling party.

Xi probably can't betray Suu Kyi easily, as he pledged friendship with her once. The Xi leadership appears to be seeking to maintain an equal distance from both the armed forces and the pro-democracy forces.

It still can't be said that the Myanmar armed forces have taken full control of national politics. There is a possibility that pro-democracy forces will retake power, backed by public opinion and international pressure.

The Xi leadership is probably taking a wait-and-see attitude so it will not suffer in either case.

On Thursday afternoon, Xi was in Guiyang, Guizhou Province, about 1,000 km from the border with Myanmar.

The Chinese New Year holiday period starts on Feb. 11. Xi visited a supermarket in Guiyang to see if there were enough goods for locals to celebrate Chinese New Year's Eve.

Is Xi thinking that China is now in an advantageous position in the international tug of war over the situation in Myanmar? Xi appeared to have breathing room when he was shown on state-run China Central Television.

Monday, Feb. 1: Wang Qishan and the 'red central bank'

Feb. 1 is the birthday of China's "red central bank." Eighty-nine years ago today, the Chinese Soviet Republic National Bank, the predecessor of the People's Bank of China, was founded in Ruijin, Jiangxi Province.

The bank was set up three months after Mao Zedong, father of Communist China, declared the foundation of a "state" dominated by farmers in November 1931. Mao probably thought that his new state, the Chinese Soviet Republic, would need a currency.

As soon as the provisional government began to move, Mao ordered the establishment of a central bank in charge of issuing currency. Mao Zemin, a younger brother of Mao Zedong, became the bank's first governor. The Chinese Soviet Republic National Bank, which initially had only five employees, began issuing its own currency, which later led to the renminbi.

The bank's growing expertise in managing the currency was a factor in the Chinese Communist Party's eventual victory over the Nationalist Party in China's civil war.

The Nationalist Party printed an excess of bank notes during the civil war that broke out in 1946, causing runaway inflation in urban areas. Meanwhile, the Communist Party, whose stronghold was in the countryside, managed to keep prices stable by creating its own currency zone. Hyperinflation inevitably eroded public support for the nationalists while its communist rivals grew stronger.

The Communist Party, which by December 1948, was confident it would prevail in the civil war, formally established its own central bank, the People's Bank of China, in Shijiazhuang, Hebei Province, roughly 300 km south of Beijing. The renminbi, the unified national currency that the communists began to issue immediately before their forces entered Beijing, underscored their new status as China's ruling party.

After the People's Republic was founded in 1949, the People's Bank of China became a low-profile entity under the centrally planned economy. It was not until the 1990s that the central bank again entered the spotlight as the country's economic control center.

In 1993, when a serious bout of inflation threatened the livelihoods of ordinary people, China's then- premier, Zhu Rongji, replaced the central bank's governor, taking over the job himself. He then began tightening the money supply. Zhu tapped Wang Qishan, now China's vice president, to serve as the vice governor of the People's Bank of China.

Wang is a longtime ally of President Xi Jinping, who doubles as general secretary of the Communist Party. He wields enormous influence in financial circles based on his previous position.

But the situation around Wang seems to have changed recently. Since last year, a number of people close to him have faced allegations of corruption, including Ren Zhiqiang, a prominent entrepreneur who is said to have been a friend of Wang since the two were in junior high. HNA Group, a conglomerate led by Chen Feng, who has also been friendly with Wang, announced last weekend that creditors had asked a court for a bankruptcy restructuring of the company.

Wang took part in a video dialogue with U.S. business leaders on Jan. 29 and called for better U.S.-China relations. "The key to promoting a healthy and stable development of bilateral relations is to champion the spirit of non-conflict, non-confrontation, mutual respect and win-win cooperation, to focus on cooperation and manage differences," he said.

Wang has strong personal connections with the U.S. financial world. His profile has risen of late, amid growing hopes for improved U.S.-China ties with the inauguration of President Joe Biden.

It is unclear whether there political forces within the Communist Party that are unhappy with Wang's growing presence. But one thing has not changed since Mao Zedong's day: Whoever controls the "red central bank" controls China.

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