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Beijing Diary

Xi shakes the house Jack Ma and Jiang Zemin built

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

Alibaba founder Jack Ma, left, is a card-carrying member of the Chinese Communist Party thanks, at least indirectly, to former leader Jiang Zemin, right. But Ma appears to have irked President Xi Jinping. (Nikkei montage/Reuters and Kyodo)

China is locked in a heated diplomatic confrontation with the U.S. -- one that may not end with the arrival of a new White House occupant. 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, Nov. 27

To the surprise of no one, Jack Ma, the founder of Chinese e-commerce powerhouse Alibaba Group, did not make an appearance at this year's World Internet Conference.

The annual Chinese government-organized event -- which opened in Wuzhen, Zhejiang Province, this past Monday -- brings together public officials and high-profile tech executives. Ma was a regular attendee in the past. But this time, it was all up to Alibaba Chairman and CEO Daniel Zhang to represent the company.

Zhang looked tired as he gave a speech describing China's proposed new rules on internet companies as "timely and necessary," repeatedly welcoming more industry supervision by the authorities.

Alibaba has come under increased scrutiny from President Xi Jinping's government since late October, when Ma told a financial forum in Shanghai that "good innovation is not afraid of regulation, but is afraid of outdated regulation."

Days later, the planned initial public offering of Alibaba financial affiliate Ant Group in Shanghai and Hong Kong was abruptly postponed at the authorities' behest. Many in the financial industry believe Xi himself made the final decision to halt the IPO.

Ma has not appeared in public recently, fueling rumors that he has been banned from leaving the country.

The outspoken billionaire's provocative remarks have often irked the authorities. But he is a genuine member of the Chinese Communist Party. His membership was revealed by the People's Daily, a party mouthpiece, on the 40th anniversary of the country's "reform and opening-up" policy in December 2018.

There was a time when someone like Ma could not have even contemplated joining. Heads of private companies were once regarded as "capitalists" and denied party membership. It was former Chinese President Jiang Zemin who changed this.

At the Communist Party's national congress in autumn 2002, Jiang's proposed political theory, called "Three Represents," was enshrined in the party constitution. The theory was rooted in the notion that, as the next stage of reform and opening-up, China must reduce the state's role gradually and unleash the vigor of the private sector.

The party's purpose was redefined as representing "the fundamental interests of the overwhelming majority of people in China" as well as promoting "the development trend of China's advanced productive forces" and "the orientation of China's advanced culture."

The Communists sought to bring entrepreneurs into the fold. Without this new way of thinking, it seems unlikely that China would have the Alibaba and digital society we know today.

Yet, Xi appears alarmed by the rise of huge private enterprises, and is pushing the state back to the forefront.

I visited Yangzhou in Jiangsu Province, Jiang's hometown, on Sunday because I wanted to see the house where he grew up. Every local resident knew its location. "Lao (old) Jiang's house is over there," one told me.

It turned out to be a mansion surrounded by high walls, showing that Jiang grew up in a wealthy family. Despite the lack of a sign, the place receives a steady stream of visitors who snap photos in front of the gate.

Xi, too, visited Yangzhou for an inspection on Nov. 13. He did not drop in at Jiang's house.

Is the president trying to close the curtain on the Jiang era and its emphasis on the private sector? The answer has major implications for the future of Ma and Alibaba.

Friday, Nov. 20: Politburo member's conspicuous absence clouds Xinjiang's future

The Chinese Communist Party earlier this week decided to implement "Xi Jinping Thought on the Rule of Law."

This refers to President Xi Jinping's call to stick to a path of "socialist rule of law with Chinese characteristics," and to promote the modernization of China's governance system in accordance with this. The meeting where the party's decision was made, a two-day affair, was an important one. Normally, the 25 members of the Politburo, including all seven members of the Politburo Standing Committee, would attend.

But one person was not there: Chen Quanguo, the Communist Party secretary of the Xinjiang Uyghur Autonomous Region.

This is not the first time Chen has missed a key meeting. He did not attend the fifth plenary session of the party's 19th Central Committee, which ended on Oct. 29. It is unusual for members of the Politburo to be absent from the plenum -- a gathering of about 200 Central Committee members and 170 candidate members.

Just before the plenum, there had been a cluster of coronavirus infections in Xinjiang. Hong Kong media speculated that Chen, who had visited the affected area, was unable to go to Beijing because of a 14-day quarantine period.

This seemed like a compelling argument at the time. But the quarantine period is long over. It remains unclear why Chen did not show up at this week's meeting.

The U.S. is casting a stern eye on Chen over the treatment of Xinjiang's Uighur Muslims on his watch.

In July, the U.S. slapped sanctions on four senior Chinese officials, including Chen, and an organization over alleged human rights abuses in Xinjiang. The sanctions banned them from doing business with Americans and froze their assets in the U.S.

Many experts say the U.S. is likely to increase pressure on China over Xinjiang after President-elect Joe Biden takes office, citing his vocal advocacy of human rights. Now there is rampant speculation that something might have happened to Chen.

On Thursday afternoon, I stopped by the Xinjiang regional office in Beijing, located about 10 km northwest of Tiananmen Square. Chen must have visited there often. I had tried to visit the office's restaurant myself in July, but it had been closed due to the coronavirus.

This time, it was open. As I was enjoying what is said to be the best Xinjiang cuisine in the city, two women wearing blue protective suits came in, carrying virus test kits.

This was unnerving: Had customers tested positive for COVID-19?

A restaurant employee assured me it was just a regular hygiene inspection to make sure the virus was not present. I felt relieved, but I was still uncomfortable dining with the inspectors around.

As they checked the premises thoroughly, I couldn't help thinking about Chen and Xinjiang's future.

Monday, Nov. 16: Xi's China spells challenges for Biden that Jiang's never did

I recently came across an old picture of Joe Biden shaking hands with China's president at the time, Jiang Zemin. It was published on the front page of the People's Daily, the Chinese Communist Party's main mouthpiece, on Aug. 9, 2001. Both men looked much younger, of course.

Biden, now the U.S. president-elect, was 58 years old when he visited China as chairman of the Senate Foreign Relations Committee and met Jiang at the coastal resort of Beidaihe, Hebei Province.

Jiang, who was 74, said that Chinese people had always had friendly feelings toward Americans, according to accounts of the meeting. Biden apparently responded that the U.S. wanted China to develop and grow strong, and that this would be in the interest of both countries.

Back then, the U.S. had overwhelming strength as the world's lone superpower after winning the Cold War. Biden must not have seen China as a competitor yet. Of course, he could not have known that just one month later, the Sept. 11 attacks would shake the foundations of American supremacy.

Nearly 20 years on, China is rapidly catching up with the U.S.

President Donald Trump has tried to stall China's momentum by waging a trade war. Biden, who is set to become the oldest U.S. president inaugurated at age 78, surely sees China and its one-party rule very differently now.

Chinese President Xi Jinping, 67, visited Jiangsu Province last Thursday and Friday. He stopped by Yangzhou, which is known for the Grand Canal built in the seventh century.

"The Grand Canal has brought significant benefits to the city and its people for thousands of years," Xi said, stressing China's long history as a source of strength. He clearly wants to put up a fight against the U.S., founded less than 250 years ago, under a rallying cry of "the great reconstruction of the Chinese people."

Yangzhou also happens to be the hometown of Jiang, who at age 94 is still considered an influential figure. As Xi looks to cement his grip on power for a long rein into the 2030s, his visit to Jiang's turf has enormous political implications.

The Jiang connection brought to mind the People's Liberation Army General Hospital, or the 301 Hospital, in western Beijing. On the roof is a sign with the hospital's name in Jiang's handwriting. Deng Xiaoping, who led China's "reform and opening up" policy, died there in 1997, leaving Jiang to inherit the policy.

But walking in the courtyard, one can now find Xi's portrait and a big sign with the slogan, "Follow the party's orders, win the fight and show good performance."

Xi is determined to break China's dependence on the U.S. and build a comparable superpower. The China that Biden is about to face is not the country he used to deal with.

Friday, Nov. 13: 'Cheer up, Mr. Trump': Why China keeps Biden at arm's length

Until today, Chinese authorities had not yet recognized Joe Biden as the victor in the U.S. presidential election. At least officially, the Democrat was seen only as the candidate projected by the media to win.

On Friday, foreign ministry spokesman Wang Wenbin finally said that China "extends its congratulations" to Biden and running mate Kamala Harris. "We respect the choice of the American people," he said in his regular briefing, while also reiterating that the "results of the U.S. election will be determined according to U.S. laws and procedures."

It sounded a bit like an excuse after stubbornly insisting for days that the outcome was not finalized. Perhaps, Beijing came to the conclusion that Biden will indeed be the next occupant of the White House. Now another question is when Chinese President Xi Jinping himself might congratulate Biden.

What do ordinary Chinese people think of Biden? To gauge public sentiment, I visited a popular restaurant known for its connection to the former U.S. vice president.

Yaoji Chaogan Restaurant, adjacent to Gulou, or the Drum Tower, is a famous tourist spot in Beijing. The restaurant is known for its signature chaogan, a dish made by stewing pork liver and intestine with soy sauce. Biden stopped by in August 2011, when he was serving under President Barack Obama.

When I last visited the restaurant five months ago, China was still on high alert against COVID-19. This time, the place was comparatively crowded with customers, about half of whom were likely tourists. I've heard that Biden's visit raised the restaurant's profile dramatically, prompting many domestic travelers to Beijing to drop in.

I shared a table with a married couple in their 60s who live in the capital. I asked them what they thought of Biden. One replied: "[Biden] might be better than Trump. Trump has been really terrible, launching a trade war and meddling in Taiwan."

They seemed relieved that the Trump era was ending. It sounded like they were simply fed up with Trump -- as opposed to having high hopes for Biden.

Indeed, not everyone in China is pleased with the apparent election outcome, judging from online chatter. It is easy to find posts on social media supporting Trump. One, for example, said, "Cheer up, Mr. Trump."

I have heard two theories why this might be.

One holds that sympathy for Trump is really an expression of discontent with the Communist Party.

If Biden eases U.S. pressure on China, it might only strengthen the party's authoritarian grip. Such fears are driving support for Trump in Hong Kong and Taiwan as well.

Another theory is that the Xi administration actually hopes to see Trump stay in office.

It is possible that Biden, who values democratic ideals, would take a firm stand on human rights and pose a more formidable opponent than Trump.

Some contend that this prospect was a factor in the recent decision to grant the Hong Kong government the authority to disqualify pro-democracy lawmakers.

I think there is truth to both theories. In any case, China is not exactly rolling out the welcome mat for Biden.

Monday, Nov. 9: Who stopped Ant's IPO? In China, one can only speculate

While Joe Biden's slow march to victory in the U.S. presidential election was commanding the world's attention, the suspension of Alibaba Group Holding affiliate Ant Group's planned listing in Shanghai and Hong Kong drew a similar flurry of interest in China last week.

"The decision to suspend Ant Group's planned initial public offering in China was based on a comprehensive consideration about safeguarding the interests of financial consumers and investors," People's Bank of China Deputy Gov. Liu Guoqiang told reporters on Friday, the day after the company had been set to go public.

If completed, the $35 billion IPO would have smashed Saudi Aramco's record $29.4 billion offering last year as the largest ever.

It seems unlikely that the suspension was ordered only by the monetary authorities, including the central bank. It is natural to assume that the directive came from someone high in the leadership hierarchy, headed by President Xi Jinping.

The first sign that something was brewing came last Monday, when the PBOC and the China Banking and Insurance Regulatory Commission abruptly summoned Ant's founder and "actual controller" Jack Ma, among others.

Ma's comments at a financial forum in Shanghai on Oct. 24 may have provoked the authorities. "Good innovations are not afraid of supervision, but they do fear outdated supervision," Ma said. He also said that China does not have systemic financial risk -- rather, the risk comes from not having a system.

Speculation is rife that the remarks upset Beijing and prompted an investigation.

At the same forum, Vice President Wang Qishan, who is known as Xi's close aide, said in a prerecorded speech that for China the bottom line is preventing systemic risk. Knowingly or not, Ma in effect denied Wang's comment moments later. This might have pushed the vice president's buttons.

Wang, a financial expert, and Ma, who guided the smartphone payment app Alipay to amass more than 1 billion users, were once said to be very close. Ma even accompanied Wang on a visit to Israel in October 2018. Has their relationship soured?

Or is there another angle? Over the past few months, close Wang associates have run into trouble with the authorities. In late September, Ren Zhiqiang, former head of a state-owned real estate group, was sentenced to 18 years in jail. And in early October, Dong Hong, who had served as Wang's aide for nearly 20 years, was investigated for "serious disciplinary violations."

Who stopped Ant's listing? The question remains unanswered in China, where there is no freedom of expression and the media is tightly controlled. This is one reason why, even after Biden replaces President Donald Trump, the U.S. and China are likely to remain at odds.

Monday, Nov. 2: China Central TV anchor's sudden absence stirs sense of deja vu

China's Communist Party concluded its Central Committee plenum on Thursday with the release of a communique. That night, state-run China Central Television's news program "Xinwen Lianbo" began its ritual: An anchor read out the full text of the document, describing the decisions that had been made.

It took the anchor half an hour to finish, including the gist of the next five-year plan and a long-term initiative through 2035.

"Xinwen Lianbo," which is broadcast every evening at 7 p.m., is the country's best-known nightly news show. It reports on the activities of President Xi Jinping and explains the government's policies. Even in China, where the media is regarded as the party's "throat and tongue," Xinwen Lianbo wields special authority and significance.

Curiously, popular 43-year-old anchor Ouyang Xiadan has not appeared since late April. Her absence has stirred considerable controversy on Chinese social media.

Ouyang, who became a "Xinwen Lianbo" anchor in 2011, is known for her bright smile and approachable personality. After the coronavirus outbreak in January, she often appeared on special programs. It is not known why she abruptly went off the air, but many speculate that she has been questioned about her ties to a senior government official who fell from power over alleged misconduct.

CCTV journalists are often caught up in scandals involving senior party and government officials -- whether the allegations are true or not.

Jia Xiaoye, the wife of Zhou Yongkang -- a senior member of former President Hu Jintao's administration who was convicted of corruption-related charges in 2014 and expelled from the party -- was also a former TV journalist. She was found guilty of bribery in 2016. There were even rumors, never proved, that Zhou had his first wife killed in a car crash disguised as an accident so that he could marry Jia.

For many, CCTV brings to mind the channel's oddly shaped headquarters building, completed in 2012 in Beijing's Guomao business district. Apparently, however, the studio for the news department is still at the old headquarters in western Beijing. The building is across the street from the Jingxi Hotel, where the party plenary session was held. The area is also home to military facilities -- the Military Museum of the Chinese People's Revolution and, next to it, the Bayi Building, or China's Pentagon.

The former CCTV headquarters is nestled there, as if it were protected by the armed forces. Indeed, in developing countries, rebel groups attempting to take power have targeted broadcasters first.

This much is clear: CCTV remains shrouded in secrecy.

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