Mystery Over China Defense Chief Raises More Questions for Xi

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(Bloomberg) -- A mystery surrounding the status of China’s defense minister is raising questions about turbulence within President Xi Jinping’s new line-up of loyalist leaders less than a year into his third term.

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Li Shangfu hasn’t been seen in public for more than two weeks, with a steady trickle of reports suggesting that China’s fourth-most senior military figure is the latest top Communist Party official to be abruptly ousted from the upper echelons of Xi’s ranks.

The US government believes the defense minister has been stripped of his duties and placed under investigation, according to a report in the Financial Times, citing three US officials and two people briefed on the intelligence. It didn’t describe the nature of the probe.

The Chinese defense minister was scheduled to attend an annual meeting with Vietnamese defense leaders last week, but canceled at short notice, Reuters reported Thursday, citing three officials with direct knowledge of the matter. Beijing cited a “health condition” for the minister’s absence, two Vietnamese officials said.

The US ambassador to Japan, Rahm Emanuel, wrote on social media platform X that Li had also skipped a meeting with the Singaporean Chief of Navy. “Something is rotten in the state of Denmark,” Emanuel added, quoting from Shakespeare’s famous tragedy Hamlet.

China’s Defense Ministry and Foreign Ministry didn’t respond to requests for comment on Friday. Singapore’s Ministry of Defense did not respond to an email requesting confirmation of Li’s absence. Vietnam’s Ministry of Foreign Affairs did not immediately respond to an email request for comment on the defense meeting.

The defense minister’s drop from public view comes after Xi purged several other top leaders in recent months without explanation. Those moves have fanned investor fears that Xi’s policy swings and official data gaps are making China more volatile, just as Beijing seeks to attract foreign capital to buoy its slowing economy.

The opaque nature of the removals will reinforce concerns “about policy continuity” in the ruling Communist Party, said Ja Ian Chong, an associate professor of political science at the National University of Singapore.

“Recent events all add to the existing uncertainty and creates a sense of unease for other governments and entities that have to work with China,” he said. “Li’s disappearance only adds to speculation over developments within the CCP’s top leadership.”

Xi’s decision to skip the annual Group of Twenty leaders’ summit last weekend for the first time since taking power led to speculation that domestic issues were demanding his attention. US President Joe Biden said the Chinese leader’s absence was due to having “his hands full” at home.

Those comments came after a series of unusual events in Chinese politics, made all the more significant because Xi was reported to have consolidated power and installed only trusted aides at last year’s leadership congress.

The Chinese leader stunned the world in July by ousting his handpicked foreign minister Qin Gang, after just seven months in the job. That same month, the PLA announced it was launching a wide-ranging corruption probe into hardware procurement going back to October 2017, without saying why that date was significant.

Li headed the equipment department from September 2017 to 2022, though the government has given no indication he is suspected of wrongdoing.

That probe coincided with Xi’s decision over the summer to abruptly purge two generals leading the secretive rocket force — manager of the country’s nuclear arsenal — also without explanation.

“What we’re seeing is a really heightened level of political risk in China,” said Drew Thompson, a former Pentagon official and a senior fellow at the Lee Kuan Yew School of Public Policy in Singapore. That was likely to create “fear, uncertainty and self-doubt” in China’s political system that could paralyze decision making, he added.

Perhaps anticipating those problems, Xi last week called for “unity, security and stability” within the military during an inspection tour in China’s northeast, as rumors about Li swirled in diplomatic circles.

Li last made a public appearance on Aug. 29, when he delivered a keynote speech at the 3rd China-Africa Peace and Security Forum in Beijing. He also traveled to Russia and Belarus in mid-August.

The defense minister’s ouster could benefit the US, which sanctioned Li in 2018 over an arms purchase he oversaw from Russia. China has since refused to hold top-level military talks between Li and his US counterpart until those curbs are lifted. That lack of communication has raised concern about an accident potentially setting off a conflict.

While upheaval within the PLA’s rocket forces could diminish China’s military readiness, Li’s removal would be less impactful to any invasion of Taiwan, which Beijing has pledged to bring under its control someday.

“His position as defense minister means his main role is to lead China’s military diplomacy with other countries,” said M. Taylor Fravel, director of the Security Studies Program at the Massachusetts Institute of Technology. “He does not play a direct role in the command of PLA forces.”

The most important person in the military is, of course, Xi who is chairman of the Central Military Commission, and his position is not in question.

Jennifer Welch, Bloomberg Economics’s chief geoeconomic analyst who was formerly director for China and Taiwan on the White House’s National Security Council, said the speculation about Li and others shouldn’t be seen as a sign that Xi faces challenges to his rule.

“But they certainly raise questions about the dynamics in Beijing right now,” she said.

--With assistance from Jing Li, Lucille Liu, Philip J. Heijmans, Jasmine Ng and John Boudreau.

(Updates with more context and expert analysis.)

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