Xi rumors; US-China tensions; Rare earths; Xu Qiliang
There was no publicized May Politburo meeting. There was also no announced May 2023 Politburo meeting, and as Bloomberg reported a couple of years ago the skipping of announcing a monthly meeting has increased in Xi’s third term. We do not know why sometimes the leadership either does not hold the monthly meeting or does not publicize them, but that lack of knowledge does not stop the speculation.
We are now in the midst of new round of fevered rumors about Xi losing power. These rumors usually surge around the annual August Beidaihe break, but this year they have come earlier. The lack of any pictures or video of Xi in Party media since his May 19-20 Henan trip have intensified the speculation, no matter that Xi has been out of sight for this long before, not including the annual August break, and the PRC just had a three-day holiday.
Belarusian President Alexander Lukashenko is in Beijing for three days, and Xi should meet with him. If he does not then that would be very strange, though an appearance will likely not convince the people who hope/believe he is in trouble. I remain skeptical.
The unending purges in the PLA are a sign of something, though exactly what I do not think we fully understand. Former Politburo and Central Military Commission Vice Chair Xu Qiliang “died of illness at the relatively young age of 75 in Beijing at 12:12 p.m. on Monday”. There are no indications his death was not natural, but it comes as there are rumors of other generals recently having committed or tried to commit suicide while under investigation.
A call between Trump and Xi might dispel some of these rumors, and once again the US side is suggesting there may be one soon, perhaps as early as Friday. I hope there is one, because the US-China relationship is in a very dangerous position. There is increasing chatter about more US measures to express displeasure with what the US side sees as the PRC reneging on the spirit of Geneva by continuing to hold back rare earth-related exports. It is not clear what the US would have to do or say to get Xi to loosen rare earth-related controls, but if he does not soon, do not be surprised to see continued US escalation.
PRC officials of course see the US as the problem, with the Ministry of Commerce saying the US actions “seriously violate the consensus reached during the January 17 call between the two heads of state, severely undermine the existing Geneva consensus, and gravely damage China’s legitimate interests”. They specifically call out “a number of discriminatory restrictive measures against China, including the release of guidelines for export controls on AI chips, halting sales of chip design software (EDA) to China, and announcing the revocation of visas for Chinese students”.
The rare earths dependency of the US and other major economies is incredibly frustrating. The PRC has been signaling since 2010 that it was prepared to weaponize rare earths-related supply chains, while cleaning up and centralizing its own rare earths industry to have more control. The US and other major economies are at the PRC’s mercy when it comes to rare earths magnets, and will be for the foreseeable future, absent a Manhattan Project-like effort from the US and perhaps some key allies, and even then the time to fix the problem would be measured in years not months. Xi Jinping must be encouraged at just how feckless and weak the response has been to the repeated signaling about China’s rare earths leverage.
Summary of today’s Essential Eight: