Beijing power struggle sinks Red Princess's HK firm

Evergrande's woes are wreaking collateral damage in China's real estate sector, contributing to recent defaults of Hong Kong-listed property companies like Colour Life, Fantasia, and Modern Land. In the worst-case scenario, the liquidity of a third of the Chinese property developers rated by S&P Global Ratings "may be acutely strained," according to a report of the international rating agency on October 27.

"There are signs of increasing tensions within the different factions of the CPC (Communist Party of China), with Zeng Qinghong being one group, Andre Wheeler, chief executive officer of Asia Pacific Connex, an Australian consulting firm, told Asia Sentinel. "The CPC are trying to downplay this tension, particularly as they are now saying that the review of Xi Jinping's leadership is normal at these "events, but the fact that Xi is not going to Glasgow suggests it is not business as usual."

"There also appear to be social cracks emerging in Beijing, with social media questioning Xi's handling of the real estate crisis (Evergrande), zero-carbon push and the impact it will have on production, jobs and basic heating," Wheeler added.

The Chinese president is under increasing internal pressure as resistance grows amid China's economic slowdown, the failure of some Chinese officials' aggressive "wolf warrior" diplomacy and the associated increased international isolation of China, Wheeler explained.

The police

Probably, fears for his safety are part of the reason that Xi is cracking down on the Ministry of Public Security, said a source linked to Chinese officials.

Asia Sentinel reported on October 2 that Xi indirectly admitted he was locked in a power struggle with the Shanghai Faction headed by Jiang, through charges announced against Sun Lijun, a former Public Security vice minister and a Jiang ally.

Several days ago, a meeting was convened at the Ministry of Public Security in Beijing to "eradicate the poisonous influence of Sun Lijun and others," the ministry announced on its website.

At that meeting, it was announced that Sun and others "severely damaged the unity of the Chinese Communist Party and seriously endangered the political security of the party and nation." With that statement, the Public Security Ministry effectively admitted the party is divided and that a cabal of Chinese officials, not just Sun, is plotting against Xi.

The meeting called for a thorough investigation of "people and matters involved in the serious crimes of Sun and others" and the cautionary education of the entire police force on the lessons of Sun and others. Thus, the Public Security Ministry acknowledged there remain rebels still at large within its ranks and it is trying to root them out.

Entertainment

The Zeng family is facing pressure from Xi in another sector, the entertainment industry. Baby Zeng's father is Zeng Qinghuai, a brother of the former Vice President. Thanks to his previous position as the Hong Kong-based special commissioner of China's Ministry of Culture, Zeng Qinghuai is well connected in entertainment circles in Hong Kong and the mainland. He knows Chinese movie stars like Vicki Zhao Wei. As a sign of official displeasure, all mention of Zhao was expunged from China's internet system in August. At least 25 Chinese artists including Zhao are on the Chinese government's blacklist, according to media reports.