In seeking to consolidate power and erode the influence of a rival political faction, Chinese leader Xi Jinping has, over the past four years, elected to go slow and steady.
The arrest of former Chinese leader Jiang Zemin’s key allies, like ex-security czar Zhou Yongkang, and former military vice chairs Xu Caihou and Guo Boxiong, was preceded by months of investigating lower ranking cronies.
Xi appeared to formally signal his control over the military with a grand parade and a new title only after spending two years purging officers loyal to Jiang; recent investigations and abrupt “retirement” of officers suggests that the cleanup of the People’s Liberation Army is still underway.
But Xi Jinping has recently heaved a “Hail Mary” pass by bringing into custody prominent Chinese billionaire Xiao Jianhua—a move which puts him on very shaky ground, but gives him significant leverage against the Jiang faction.
Chinese and Western media had widely reported Xiao, a Canadian citizen, going missing from his luxury apartment in the Four Seasons hotel in Hong Kong on Jan. 27. Most accounts indicated that Xiao had been brought across the border into mainland China by a handful of mysterious men.
Officially, Xiao is “abroad” seeking medical treatment, according to a deleted post from the social media account of his company, Tomorrow Group, and a front page ad on a prominent Hong Kong newspaper.
But Xiao, a key financier for the Chinese Communist Party’s elite, is currently in Beijing and assisting in corruption investigations, a high-level source with authoritative information about discussions in the top Chinese leadership told Epoch Times. Xiao’s case is now “top priority” in Zhongnanhai, the official work and living quarters of the Chinese leadership.
Xiao, the source said, is the Jiang faction’s most important money launderer, and one of the most potent figures in the Chinese financial sector. His investigation is intended to implicate other members of the Jiang faction, including Zhang Dejiang, the top Hong Kong overseer and elite Politburo Standing Committee member; Zeng Qinghong, the former Chinese regime vice chairman and right-hand man of Jiang Zemin; and Party godfather Jiang Zemin himself.
The source also said that the investigation of Xiao Jianhua is the “prologue” in the Xi administration’s plan to purge Jiang’s remaining influence in Hong Kong’s financial sector, as well as the arts and cultural fields. The investigation is also aimed at countering the Jiang faction’s sway over upcoming elections for Hong Kong chief executive.
Xiao’s case, however, is deeply unsettling for many parties.
Hongkongers and the international community are alarmed at the mob-style vanishing of a prominent figure in Hong Kong’s business community. They are also concerned about the Chinese regime’s apparent violation of Hong Kong’s semiautonomous status in what is very likely a Chinese security operation on Hong Kong soil.
Chinese businessmen and Chinese officials in Hong Kong also fear being suddenly whisked away to Beijing. Epoch Times has learned from Chinese official circles that some officials are confused as to what Xi Jinping is really up to by investigating Xiao.
The anti-corruption campaign has thus far appeared to be a genuine attempt at rooting out graft in the lower and middle official ranks, and a political purge in elite Chinese politics. But given that Xiao Jianhua has handled the business transactions of the families of Communist Party elites across factional lines, his being probed potentially implicates a huge swath of cadres and their cronies.
“The Xiao Jianhua case wasn’t just being hyped up by the media,” Xin Ziling, a retired Chinese defense official with channels to moderate voices in top leadership, told Epoch Times. “This is something that shakes up China and Zhongnanhai.”
For Xi Jinping, the opportunity cost of not vanishing and investigating Xiao the billionaire could be much worse than the criticism currently being directed at his administration.
Xi currently faces resistance and pushback from the Jiang faction, particularly from the regime’s legal and security apparatus, which is still under Jiang’s control. Xi also has to contend with a hawkish Trump administration and invigorated neighboring countries.
Facing existential threats from within and without, Xi is probably seeking to deal with Jiang Zemin and his faction, before the United States increases pressure on the Chinese regime to end its unfair trade practices and retreat from its militarized man-made islands in the South China Sea.
If Xiao releases enough incriminating evidence, or calls out other money launderers, Xi Jinping could conceivably move against Zhang Dejiang, Zhang Gaoli, and Liu Yunshan, Jiang’s three allies in the Politburo Standing Committee, before the 19th National Congress of the Chinese Communist Party, an important political conclave in the later half of 2017.
If the Jiang faction pushes even harder against Xi, Zeng Qinghong and Jiang Zemin could even be denounced before the 19th Congress. Already, Zeng and Jiang haven’t been attending or sending flower wreaths to the funerals of recently deceased prominent cadres—a sign that indicates waning influence in the coded language of the Chinese regime.