The Economist Europe – July 22-28, 2017

24 China The EconomistJuly 22nd 2017

2 ters. And the debt burden will be much saf-

er if it is carried by the government, which

has the power to tax and print money, rath-

er than by individual companies.

Sceptics will point out correctly that

China’s tightening is still new. It may be too

soon to see its full impact on growth. But al-

though the stock of credit has declined (as a

percentage ofGDP) only in the most recent

quarter, the flow of credit has been shrink-

ing year-on-year for longer, according to

the BIS measure. It is the expansion or con-

traction of this credit flow, not a rise or fall

in the stock, that should affectGDPgrowth.

At the recent conference, Mr Xi urged

lenders to serve the “real” economy rather

than make speculative deals. That would

help credit to contribute more directly to

GDP. Rollercoasters rise and fall but usually

end up back where they began. Credit, on

the other hand, should be a vehicle of eco-

nomic progress, not a circular thrill ride. 7

The Chinese government got rid of Liu Xiaobo in hugger-mugger. After arranging a short

memorial service for the Nobel peace-prize laureate (family members and secret police

only), it hastily took the group out to sea to deposit his ashes. Mr Liu’s elder brother

thanked the Communist Party for carrying out the family’s wishes. But nothing was

heard from his widow, Liu Xia (pictured on the boat). She remains under house

arrest—guilty by association. In a letter to her from his deathbed, Mr Liu praised her

“calmness that confronts suffering”. Tributes to him could only be oblique. Tens of

thousands shared online a Taiwanese pop song. Its first verse runs: “You disappeared

from the far end of the sea.... I wanted to say something but didn’t know where to start.

I just bury you in the bottom of my heart.” Despite no-holds-barred censorship of

everything connected with Mr Liu, this eulogy slipped through the censors’ net.

Their virtues we write in water

I

N 2012 Bo Xilai, the Communist Party

leader of Chongqing, a region in the

south-west, was stripped of his post, ex-

pelled from the partyand later jailed. Mr

Bo’s downfall cleared the way for Xi Jin-

ping, his rival, to become the country’s

leader. On July 15th lightning struck again.

Sun Zhengcai, who had succeeded Mr Bo

in Chongqing following a brief interreg-

num, was sacked.

A cloud appeared over Mr Sun in Febru-

ary, when party investigators accused him

of failing to clear MrBo’s “toxicresidue”.

Now Mr Sun is said to be under investiga-

tion for violating party rules. His offences

are unclear, but he might become the first

serving member of the ruling Politburo to

be booted out of that body since Mr Bo. Mr

Sun is the Politburo’s youngest member

and had been considered a possible suc-

cessor to Mr Xi. Not since the 1980s has

someone being groomed in this way been

so unceremoniously purged.

Earlier expulsions from the Politburo

(this would be the fourth in over two de-

cades) resulted from eruptions of high-lev-

el infighting. Mr Sun’s downfall appears to

reflect something different: Mr Xi’s me-

thodical ascendancy. The president did not

appoint Mr Sun, nor was Mr Sun close to

him. But the new chief of Chongqing,

Chen Min’er, is Mr Xi’s man. The two

worked together between 2002 and 2007

when the president was party boss in Zhe-

jiang, a coastal province. Mr Chen’s ap-

pointment is the culmination of a sweep-

ing reshuffle that has seen Mr Xi appoint or

promote almost all of China’s 31 provincial

party chiefs in the past 18 months.

There hasbeen no overtopposition to

Mr Xi’s amassing of ever-greater power. Of-

ficials queue up to praise him, while critics

are reduced to posting online pictures of

Winnie-the-Pooh, whom the president

supposedly resembles. Such images were

duly banned by China’s censors this week.

But disquiet about Mr Xi’s grip has

turned the unlikely figure of Guo Wengui,

a Chinese billionaire who lives in exile in

New York, into a person of political signif-

icance. In a series of tweets that are eagerly

discussed in China (and indignantly dis-

missed by the state-run media), Mr Guo

has thrown explosive and unproven accu-

sations against the family of Mr Xi’s closest

ally, Wang Qishan, who is leading an anti-

corruption campaign. Mr Guo, who also

called Mr Sun “a genius among geniuses”

(perhapshastening his fate), has his sup-

porters. Police recently arrested two peo-

ple in the aviation industry who allegedly

provided Mr Guo with information from

Hainan Airlines about well-connected

passengers. The carrier is owned byHNA, a

conglomerate at the centre of Mr Guo’s

claims about Mr Wang’s family. HNAis su-

ing Mr Guo for defamation.

Mr Guo’s assertions do not seem to

have damaged Mr Wang. On July 17th a

long article by Mr Wang in the party’s flag-

ship newspaper, People’s Daily, de-

nounced “insufficient efforts to strictly en-

force party discipline.” It does not sound as

if his authority is weakening, though

whether he will stay in office after a five-

yearly party congress due this autumn is

another matter. According to the party’s

unwritten rules he should retire (he is 69).

The bigger question is how long Mr Xi

will stay on. By convention, he should step

down as general secretary in 2022. His like-

ly successor would be expected to emerge

at the party congress. Getting rid of Mr Sun

doubtless makes it easier for Mr Xi to pick

whomever he chooses. But his power is

now so great that it is getting harder to

imagine anyone else in charge. Odds are

growing that he will try to keep his job

after 2022, or appoint a placeman and rule

China from behind the scenes. He would

hardly be the first leader to do that. 7

Politics

Sun’s out

BEIJING

A potential successor to Xi Jinping is purged