Recently, the Chinese media outlet Caixin deleted an article revealing the investigation of former Chinese Justice Minister Tang Yijun by the Communist Party. Some political analysts believe that there are multiple factors behind this move and see the publication of the article on Caixin’s website as part of the internal power struggle within the CCP. Additionally, foreign media’s assertion that “Tang Yijun’s investigation reflects the real estate crisis affecting Xi Jinping’s inner circle” has some degree of credibility. How Xi Jinping will handle the many elites involved in the Evergrande case is expected to be a challenging issue.
Translation:
The Nikkei Asia recently published an analysis article by Nikkei News editorial writer Nakazawa Keiji. The article states that the CCP’s action of purging former Justice Minister Tang Yijun provides insights into Xi’s regime’s stance on China’s deepening real estate crisis. It may even indicate that this crisis is affecting Xi Jinping’s political factions.
Former Governor of Liaoning Province and former Minister of Justice in the CCP Tang Yijun was investigated on April 2.
Nakazawa Keiji mentioned in the article that Tang Yijun’s fall came as a surprise to many, as he was considered an influential member of Xi Jinping’s Zhejiang faction. The so-called “Zhejiang faction” consists of Xi Jinping’s confidants from his time as the leader of Zhejiang in the 2000s. Tang Yijun worked in Zhejiang for 40 years, and no one would doubt his close relationship with Xi Jinping.
The article mentions that Xi Jinping promoted many members of the Zhejiang faction to important positions within the CCP central government and the party. The Zhejiang faction was once strong, but this situation may be changing. Over the past decade, Xi Jinping has been targeting political enemies through the so-called anti-corruption campaign, leading to the disappearance of his main party rivals. If most or all political enemies are eliminated, internal strife within the factions is not surprising.
“The case of Tang seems more severe because it seems to be somewhat related to the Evergrande crisis,” the article states. “Chinese media hinted that reports linking Tang to Evergrande were immediately deleted. This issue is considered taboo because the authorities have not provided any official reasons for targeting Tang.”
The article also mentions that during Tang Yijun’s tenure in Liaoning Province, photos of him shaking hands firmly with Xu Jiayin, the chairman of China’s real estate giant Evergrande Group, were repeatedly circulated on Chinese social media platforms, with some of the pictures already deleted. The article also believes that the truth behind Tang Yijun’s purge is unlikely to be clarified, similar to former Defense Minister Li Shangfu and former Foreign Minister Qiangang, as their incidents have not been detailed by the CCP officials to this day.
Nakazawa Keiji’s reference to the “reports suggesting Tang’s connection to Evergrande” is about an article by Chinese media Caixin. On April 4, Caixin published an article titled “The Case Beginning with Evergrande, Liaoning, Ningbo – Why was Tang Yijun Investigated,” revealing Tang Yijun’s close relationship with Xu Jiayin while serving as the governor of Liaoning, but this report was quickly deleted by the authorities.
Caixin stated that Tang Yijun’s last public appearance was on March 22 this year. As the former Minister of Justice in the CCP, and following the investigation and death sentence of the former Minister of Justice, Fu Zhenghua in 2022, news of his investigation began circulating in legal circles on March 28.
An informant told Caixin that on the afternoon of March 28, when the Jiangxi Political Consultative Conference was holding an internal meeting, Tang Yijun was informed that there was a phone call for him. When he left the meeting, he was immediately taken to Beijing by the investigators from the Central Commission for Discipline Inspection of the CCP, “his things were left unpacked at the meeting site.”
Though Tang Yijun is from Shandong, he worked in various cities in Zhejiang for many years, serving in Ningbo, a sub-provincial city, for 12 years. Until October 2017, he was transferred to Liaoning as governor, his first time serving as a provincial-level cadre; in April 2020, he was appointed as Minister of Justice, succeeding the retired Fu Zhenghua, and in January 2023, he became the chairman of the Jiangxi Political Consultative Conference. Caixin indicated that based on multiple sources, Tang Yijun’s issues appear to be mainly related to his tenure as the leader in Liaoning and Ningbo.
The article mentioned that during his time in Ningbo, Tang Yijun reportedly allowed his family’s intervention in projects, which drew significant public criticism. It is also said that Tang Yijun’s wife engaged in business activities behind the scenes and had a very assertive and domineering personality. In October 2017, Tang Yijun was transferred to Liaoning, appointed as Deputy Secretary of the Liaoning Provincial Party Committee and then as Acting Governor and Governor, his first time holding a provincial-level position. After taking office, the cooperation between Evergrande and the Liaoning provincial government became even closer.
On June 15, 2019, the Liaoning Provincial Government and Evergrande Group signed a strategic cooperation agreement in Shenyang. Tang Yijun met with Xu Jiayin, the chairman of Evergrande Group, and jointly attended the signing ceremony. According to the agreement, Evergrande Group would invest 120 billion yuan (approximately $17.4 billion) in various fields such as new energy vehicles, health and wellness, cultural tourism, with real estate projects being the largest investment in Liaoning. Following Evergrande’s default, several properties appeared on the so-called “baojiao floor” list in Shenyang.
During Tang Yijun’s two and a half years in Liaoning, Evergrande acquired controlling stakes in Shengjing Bank, the ninth largest bank in the country and the largest in the northeastern region. A source from a CCP ministry revealed to Caixin that back then, Tang Yijun not only helped Xu Jiayin secure control of Shengjing Bank but also relinquished the necessary regulatory responsibilities towards Shengjing Bank and its controlling shareholder “Evergrande Group,” causing significant bad debts. According to investigations by CCP regulatory authorities, the funds funneled directly or indirectly from Shengjing Bank to the Evergrande Group exceeded hundreds of billions of yuan.
Evergrande Group remains heavily indebted. As of June 30, 2023, Evergrande’s total debt stood at 2.39 trillion yuan (about $334.3 billion). On the evening of September 28, 2023, China Evergrande announced on the Hong Kong Stock Exchange that the company’s Executive Director and Chairman of the Board Xu Jiayin had been placed under coercive measures on suspicion of illegal activities. Evergrande Group left behind 1.62 million unfinished housing units, affecting approximately 6 million homeowners.
American political analyst Tang Jingyuan believes that there may be three factors behind Caixin’s deletion of the article. The publication of the article itself was actually part of the CCP’s internal power struggle.
On April 18, in an interview with Dajiyuan, Tang Jingyuan stated that firstly, during the first five intense years of anti-corruption under CCP leader Xi Jinping, Caixin had published articles exposing the behind-the-scenes dealings of corrupt officials being investigated. However, these articles were soon deleted after publication. The reason for deletion could be because the top CCP officials felt that these revelations tarnished the image of the party.
Secondly, Caixin directly exposed the close relationship between Tang Yijun’s downfall and the Evergrande Group, especially during his leadership in Liaoning, where he colluded with Xu Jiayin, involving the transfer of benefits between politics and business, directly linking to the issue of billions of dollars in bad debts in Shengjing Bank. Tang Jingyuan believes that for Tang Yijun, as a provincial-level official, he cannot independently handle such a large sum of money; he may just be a frontman while there may be higher-ranking individuals involved behind the scenes.
Tang Jingyuan said, “Tang Yijun had a close relationship with Xi Jinping’s ‘Zhijiang New Army’, so it is not ruled out that this case may involve one of the people from the ‘Zhijiang New Army’ faction, who Xi Jinping considers as a confidant and is currently in a high position. In this scenario, if Caixin’s article continues to spread, it would be detrimental to Xi Jinping himself and one of his trusted confidants.”
He stated that the third factor is related to Caixin itself. He said that the CCP has not yet made a final decision on Xu Jiayin’s case. With no official conclusion from the authorities, Caixin released a report prematurely, revealing Tang Yijun’s investigation involving the Evergrande Group, which was indeed peculiar.
He remarked that in terms of political alignment, Caixin has always been at odds with Xi Jinping. He believes that Caixin deliberately highlighted Tang Yijun’s relationship with Xu Jiayin and Evergrande to strike at Xi Jinping’s “Zhijiang New Army” faction, indirectly targeting Xi Jinping himself. He said, “From this perspective, it is not ruled out that Caixin deleted the article due to pressure. In other words, the purpose of Caixin’s publication of this article itself is part of the internal struggle.”
Regarding Nikkei Asia’s assertion that Tang Yijun’s investigation reflects the Chinese real estate crisis reaching Xi Jinping’s inner circle, Tang Jingyuan believes this perspective holds some merit.
He said Tang Yijun would not be the only senior official implicated in the Evergrande case and definitely not the highest-ranking official involved; there must be individuals of even higher ranks enmeshed in it. He suggested that for Xi Jinping, the Evergrande crisis is not just about the corruption at one real estate company or arresting a few corrupt officials. It signifies Xi Jinping’s continuous efforts since the 19th Party Congress to negate Deng Xiaoping’s economic path and establish his own economic direction.
“That is to say, for Xi Jinping, the Evergrande case is not just a corruption case, nor is it only about capturing a few corrupt officials. It involves what Xi Jinping has been doing since the 19th Party Congress, where he has been attempting to negate Deng Xiaoping’s economic path and cementing his route,” Tang Jingyuan said. He noted that Xi Jinping believes Deng Xiaoping’s economic path has reached its end and poses a direct threat to the CCP’s survival, which is an essential reason for his so-called goal of safeguarding the party. The Evergrande case directly reflects the struggle between these two paths, and how Xi Jinping handles the many high-ranking red aristocratic families involved in this case could be very tricky and sensitive.
(Contributed by journalist Ningxin)
Responsibility editor: Lian Shuhua#