Mutiny in China? Protests and Market Crashes Hit Xi’s Secret Meeting

At 11.20pm on October 26, Xinhua published a commentary titled Relying on Resolute Struggle to Achieve New Great Victories. In this feisty article, the Chinese word 斗争, meaning struggle or fight or fighting, appeared 37 times, counting the repeated headlines. Yes, 37 times. And listen to this passage. In the face of major risks and powerful adversaries, it is unrealistic to expect a peaceful life without struggle. Developing weak bones or suffering from a fear syndrome will accomplish nothing. Now, in CCP's own language, weak bones, what do they say in Chinese? 软骨病. Weak bones means lacking political backbone. It's a criticism of those unwilling to stand firm and fight. Now, officially, this article was about Xi Jinping's speech from four days ago commemorating the 90th anniversary of the Long March. But this Cultural Revolution style piece is Xi Jinping's style. It has his fingerprints all over. As CCP's top leadership is embroiled in a fight, the volatility is also felt outside the meeting hall. It's also showing up in China's financial markets. The next day, that's the 27th, yes, today, the second day of the plenum, Chinese stock markets took a sharp dive. The Shanghai Composite fell 1.33%. The Shenzhen Index dropped 2.5%. The tech-heavy Qi Next plunged 3.4%. And the Star 50 fell nearly 5%. More than 4,900 stocks declined. What made the sell-off particularly striking was what was happening elsewhere. U.S. technology stocks had a rally overnight. Markets in Japan and South Korea were also rising. Chinese stocks initially opened higher, but then they reversed course and kept falling. By the closing bell, the sell-off had accelerated. Even China's financial media were asking, what happened? Well, some Chinese investors jokingly wondered whether their market was following Brazil's stock market rather than Wall Street or other Asian markets. Is the Chinese market reacting to political uncertainty surrounding the fifth plenum in the same way that the Brazilian markets reacted to Lula da Silva's contested comeback? You tell me. Yeah, but people made the parallel. I have no evidence that China's sell-off was caused by what happened in Brazil or by the first day of the plenum. Maybe people have really reacted to that at the Xinhua editorial at 7 p.m. that night. Who knows? Anything is possible. But the timing certainly attracted attention. And then came another development, one that's potentially even more politically sensitive. On October the 26th, that's day one, on opening day, an open letter appeared online claiming to represent students from 14 Chinese universities, including Beijing University, Kunming University, and Jiao Tong University, and its central demand, restore presidential term limits. Now, you know that those limits were removed through a constitutional amendment in 2018 by Xi Jinping. And the letter goes further. It calls for democratic constitutional reform, greater public participation in government, and protection of citizens' rights to openly discuss national affairs. And here's what makes the letter particularly interesting. Rather than rejecting China's political history, the authors invoke some of its most important historical figures. It began with Dr. Seng Ye-san, the founder of the Republic of China. who voluntarily stepped down as a provisional provisional president in 1912. They then quote Mao Zedong who argued in 1945 that democracy and public supervision were essential to preventing a ruling party from falling into decline. And then they cite Deng Xiaoping who warned in 1980 that good institutions could restrain bad leaders. While bad institutions could prevent even good leaders from governing effectively. So these authors use the words and examples of China's own historical leaders to challenge the concentration of power under Xi Jinping. And one passage is especially striking. It says, we understand that a country needs stability, but stability should come from predictable institutions, not dependence on one individual. The letter makes three demands. First, restore presidential term limits and establish clear limits for the party's highest offices. Second, initiate democratic constitutional reform, including a national constitutional convention and greater public participation in elections and government oversight. And third, protect citizens' rights to discuss national affairs openly. Now, there is an important question about authenticity. Authenticity. The letter appeared on a Chinese language website called Siyuan Lake BBS at 3.18 p.m. on October the 26th. It lists, and under the username Lin Ziyi, it listed 14 universities, but provided no verifiable individual signatures or evidence that students from those institutions had actually endorsed it. But you could also argue that for security reasons, maybe they didn't show the signatures. But the website itself raised questions. According to media investigations, its registration and hosting information pointed to locations outside mainland China, including South Korea and Singapore. Although some contact information was linked to Chinese services. So we do not know who really organized the petition. Or whether it originated inside China. But it's very possible that this petition was the work of students, both inside and outside China. So we can't tell. Then the next day, the 27th, the website became inaccessible. Yeah, it only stayed for one day. Now, but that's not the end of the story. Another poster began circulating on social media, prompting a campaign scheduled for November 1st to the 11th. And its language is much more confrontational. So the poster was in bold Chinese calligraphy, and it declares, We, the youth of this generation, cannot allow imperial rule to return to our country. And beneath it, in enormous fonts, it says, Say no! You are not fit to rule! Exclamation mark. The poster features a raised fist against the backdrop of the Great Wall. It lists 22 Chinese universities, all top schools in China. At the bottom, it declares, more universities continue to join. Now, again, I do not know who created the poster, whether any of these universities actually endorsed the campaign or whether it is connected to the earlier open letter. But there is a contrast between the two messages. The open letter appeals to constitutional principles and political legacy of Sun, Mao Zedong, and Deng Xiaoping. The poster takes a much more confrontational approach, warning against what it calls the restoration of imperial rule. And both are circulating at a time when China's political elite is meeting behind closed doors to discuss the future of the Communist Party. Thank you so much for watching. If you're new here, please hit subscribe. Don't forget to give my video a like. If you want me to answer your questions directly, please join my live every Tuesday, Thursday, and Saturday at 9 p.m. Eastern Time. I'd love to chat with you there.