MIGHTY TRENDING
Rosie Perper

China's communist party might be cracking under trade pressure

The intensifying trade war between China and the US has caused a massive rift between the countries, but sources say tension is also rising internally among elite members of the Communist Party of China.

Over the past decade, President Xi Jinping has worked diligently to consolidate power and cement his rule over China, claiming control over the country' military and government and cracking down on all forms of political dissent.


In the process, Chinese propaganda has pushed hard on the portrayal of China as a strong, nationalistic country, with Xi at its core.

Several sources close to the government told Reuters that this aggressive branding had backfired, further provoking the US as it ramps up tariffs in one of the largest trade wars in economic history.

An anonymous government-policy adviser told Reuters of a growing concern among leadership that China's economic outlook had "become grim" as its relationship with the US deteriorated over trade.

"The evolution from a trade conflict to trade war has made people rethink things," the policy adviser said.

Chinese President Xi Jinping.

"This is seen as being related to the exaggeration of China's strength by some Chinese institutions and scholars that have influenced the US perceptions and even domestic views."

Two additional sources told Reuters that disapproval was being felt among senior government members and that backlash might hit the close Xi aide and chief ideological strategist Wang Huning, who has been widely credited for crafting Xi's strongman image.

"He's in trouble for mishandling the propaganda and hyping up China too much," a source tied to China's leadership and propaganda system said.

And discontent has echoed through the ranks of China's Communist veterans.

Sources told the Japanese daily Sankei Shimbun that several party elders including former President Hu Jintao and former Premier Wen Jiabao sent a letter in July 2018 to Communist leadership urging a review of economic and diplomatic policy and noting the party's tendency toward personality-cult leadership.

A veteran member of the Communist Party who was said to be close to Hu told Sankei Shimbun that signs of waning support for Xi's "dictatorial regime" had been emerging since June 2018, as Xi's prominent presence in state propaganda was beginning to diminish. In July 2018, Xi's name was noticeably absent from the front pages of the state mouthpiece People's Daily — twice in one week.

July 2018, Xi swiftly called for a meeting with the powerful Politburo decision-making body, made up of the party's 25 most senior members, reportedly outlining plans to stabilize the economy hit hard by US tariffs.

Xi was most likely gearing up for the annual Communist summit at the resort of Beidaihe, where top party leaders gather to discuss party policy behind closed doors.

The retreat, which is often kept secret, is said to be underway, and Xi's leadership and US-China trade are likely to be high on the agenda, according to Taiwan News.

China and the US have kicked their trade war into high gear, as the US announced it would impose 25% tariffs on $16 billion worth of Chinese goods starting August 23, 2018.

In response, China announced 25% tariffs on $16 billion worth of US goods meant to take effect the same day — though critics have suggested China is running out of cards to play as the US imports more Chinese goods than the reverse and can deal far deadlier blows to China's economy.

This article originally appeared on Business Insider. Follow @BusinessInsider on Twitter.