Purge Launched at the Fifth Plenum: The Xi-Peng Couple Shop Is Falling Apart! Peng Liyuan's "Wife Faction" Purged, Liu Yu Expelled from the Party; Xi Jinping's Two Personal Projects Hit Trouble One After Another, the Party Elders Pave a Exit Ramp for Xi! [Jiang Feng's View, 20261006, Episode 506]
This episode analyzes the power struggles and personnel purges within the top echelons of the Chinese Communist Party (CCP) on the eve of the Fifth Plenary Session. The article points out that the party elders have not only begun to liquidate the political trademarks personally endorsed by Xi Jinping thirteen years ago (such as Shenyang Machine Tool and the LOGINK logistics platform) and his financial policies, but have also targeted Peng Liyuan's Shandong power "network," purging the "First Lady's clique" through actions such as the expulsion of Liu Yu, chairman of China Resources and Environment, from both the Party and public office. Meanwhile, overseas media outlets like The Wall Street Journal have released details regarding Xi Jinping's health, which, combined with revelations from Jiang Wangzheng, are intended to pave the way for Xi Jinping's graceful exit and avoid the direct eruption of a factional struggle.
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Hello friends, welcome to Jiang Feng Vision. There are still more than twenty days until the Fifth Plenary Session, but the elders have already made their move. And what is most worth watching this time is not which minister or general has been arrested, but that the blade has begun to cut into the accounts left behind by the boss himself over the past thirteen years. Even more ruthlessly, as they cut, they have now touched his wife.
As we mentioned in our program a few days ago, what the First Lady is truly afraid of is not the Fifth Plenary Session itself, but whether the network of connections that grew up alongside this family can be preserved once the boss steps back. As it turns out, someone did get into trouble these past two days. On the surface, this person was just the head of a state-owned enterprise, but if you look back at his resume, it actually connects exactly to the old network the First Lady is most familiar with. Even more coincidentally, he was later placed into a new project personally endorsed by the boss. One person connected to both ends, and then he fell in less than two years.
Who is this person, and why is he worth us singling him out to discuss today? We will go into detail later, but let's put the conclusion here first: this round of party rectification at the Fifth Plenary Session is not just about settling the boss's own accounts. More importantly, a batch of things that were previously treated as the boss's political achievements or even political assets have begun to loosen simultaneously. Some people are being investigated, some projects are being reined in, and some things that were once highly touted have suddenly gone silent. We will go through these accounts one by one later today. Even more coincidentally, at this very moment, another line has suddenly been released overseas, directly explaining the reasons why the boss should step down. So today, we are actually looking at two actions: clearing out the "husband-and-wife shop" in the front, and building a stepping stone for an exit in the back. As for which account the elders are flipping through first, how exactly the First Lady's network is being pulled out, and what kind of narrative is being prepared overseas for whom, let's start from thirteen years ago, with the political trademark that the boss personally stood for: Shenyang Machine Tool.
Since it was the party elders who made the first move, why was the industrial machine tool sector chosen as the first target? Because this area is not just about money; it is a political banner personally hung by the leader himself. On August 30, 2013, less than a year after taking office, the leader visited Liaoning and specifically went to Shenyang Machine Tool. The remark he left behind was recited by the entire manufacturing industry for thirteen years: technology is like food; you cannot rely on others. You must hold your own rice bowl; only by standing on your own can you be strong. Since then, whether it is Shenyang Machine Tool or high-end CNC machine tools, it has ceased to be just a business for the companies themselves. Beijing raised its profile higher and higher, eventually tying it to the entire narrative of "independent and controllable," "technological self-reliance and self-strengthening," and "choke-point" technologies. Later, the China General Technology Group simply designated high-end CNC machine tools as its primary core business—note that it is the primary one, not just one of many.
Most interestingly, on August 31 of this year, exactly one month before He Xinyuan's downfall, the Party Group of the China General Technology Group specifically went to Shenyang Machine Tool for a collective study session. The theme was to revisit the speech from that inspection thirteen years ago. Two sentences in that day's official report were particularly striking: one stated that high-end CNC machine tools are the group's primary core business, and the other, even more serious, stated that the China General Technology Group is a solid carrier for implementing the national will in the machine tool industry, and it also demanded that they repay the trust and heavy responsibility of the General Secretary and the CCP Central Committee with concrete actions and achievements. You see, once this is said, the account can no longer be calculated merely as a corporate one. Since you yourself claim that this sector represents the national will, then if something goes wrong on this line, what is being investigated is not just a certain manager or a certain procurement, but how that "cannot rely on others, must be self-reliant to be strong" initiative actually turned out.
Moreover, before August 31, someone below had already exploded. On August 7, Wu Chunyu, Deputy Party Secretary, Director, and General Manager of Qiqihar No. 2 Machine Tool (a subsidiary of General Technology Group), voluntarily surrendered. There is a strange detail about this case: the disciplinary review was handled by the discipline inspection and supervision group stationed at the General Technology Group, but the supervisory investigation was handed over to the Huludao Municipal Supervisory Commission in Liaoning Province. Qiqihar is in Heilongjiang, and Huludao is in Liaoning. Why did a general manager of Qiqihar No. 2 Machine Tool end up in Huludao? Let's put this question mark aside for now. Then came August 31; just after a general manager below was taken in, the group's leadership immediately rushed to Shenyang to revisit the supreme instructions, re-shouting about "national will," "primary core business," and "repaying trust and heavy responsibility." You might ask if this is a normal study session; of course, it can be interpreted that way. But in politics, the most interesting thing is never what it is nominally called, but how the timing is arranged. This banner of supreme instructions had been hung for a month when, on September 30, He Xinyuan was investigated. His position was much higher than Wu Chunyu's: Deputy Party Secretary, Director, and General Manager of the General Technology Group Machine Tool Co., Ltd. To put it bluntly, the assets below—Shenyang Machine Tool, Qiqihar No. 2 Machine Tool, and Dalian Machine Tool—are all in this big pot.
What is even more coincidental is that He Xinyuan's disciplinary review was also handled by the discipline inspection group stationed at the group, and who was the supervisory investigation finally handed over to? Still the Huludao Municipal Supervisory Commission. At this point, it is no longer a matter of two people having bad luck. One is the general manager of Qiqihar No. 2 Machine Tool, and the other is the general manager of the entire machine tool company. One surrendered in August, and the other was investigated at the end of September. Both belong to the same machine tool sector and both ended up in the hands of the same out-of-town supervisory commission. This is the modus operandi for handling a connected case; the investigation team is not grabbing one here and bumping into another there, but is moving up along the machine tool line. More importantly, this line is not something someone suddenly thought of this year. From October to December 2023, the Sixth Central Inspection Group had already entered the General Technology Group. In March 2024, the inspection feedback was provided. By April, the group's own first round of inspections included the Machine Tool Company, Shenyang Machine Tool, and Shenji Shares on the list. By the time the 2025 public rectification situation was released, "serving the strategy of a manufacturing powerhouse and accelerating the development of the machine tool industry" was singled out. Clues transferred from central inspection and audits, as well as the investigation of key procurement projects, were all written into it. In other words, this was not a temporary move to grab He Xinyuan at the end of September just to make a show. This account has been audited for at least two years, and now it has finally been traced from the factories below all the way to the general manager of the machine tool sector. That is why the two dates of August 31 and September 30 are so interesting when placed together. On August 31, General Technology was still shouting in Shenyang about "repaying the trust and heavy responsibility of the General Secretary and the CCP Central Committee," and a month later, the general manager who was in charge of this "primary core business" was taken in. This contrast requires no further storytelling from us. So, let's be more blunt today: the first account opened in this party rectification is not He Xinyuan's personal account; it is the master account of "technological self-reliance" that the leader personally hung up thirteen years ago.
If we say the industrial mother machine flips a political signboard personally hung out by Big Daddy thirteen years ago, then the second account is even more sensitive. Because this time, not only did Big Daddy's new political achievement run into trouble, but following one person's resume, it directly touched a rarely discussed personal network behind the wife—this person is Liu Yu. On October 18, 2024, China Resources Recycling Group was officially established. The launch profile of this new state-owned enterprise was extremely high. Big Daddy personally gave important instructions on the establishment of China Resources Recycling, Li Qiang made instructions, the State Council approved its establishment, and the State-owned Assets Supervision and Administration Commission (SASAC) performed the duties of investor on behalf of the State Council. On the very day of its establishment, Liu Yu served as the first Party Secretary and Chairman. The next day, the front page of the People’s Daily and a full set of propaganda from the Xinhua News Agency rolled out together. Liu Yu himself even took careful notes of the supreme instructions at the inaugural meeting, and later simply referred to this instruction as the general guideline, general program, and general adherence for China Resources Recycling. At that time, if we only looked at this layer, the conclusion was simple: Liu Yu was the first head of the new state-owned enterprise personally designated by Big Daddy. Of course, positions like this could be recommended from below, investigated by the Organization Department of the CCP Central Committee, and processed through SASAC, but whether this name could finally sit in that seat—no one dared to make the final decision without a nod from the very top. However, friends, the truly interesting part is not in China Resources Recycling, but where Liu Yu climbed all the way up from before coming to China Resources Recycling. Flipping his resume back over twenty years, you will find that this person basically grew out of the Shandong Electric Power Luneng pipeline. He studied in Shandong, worked in the Linyi electric power system in his early years, and later entered Luneng, successively serving in multiple companies such as Chongqing Luneng and Hainan Luneng. After that, he returned to Shandong Luneng Group, advancing all the way from vice president to general manager and chairman. After Luneng was overall transferred to China Green Development, he also served as the first Party Secretary and Chairman of China Green Development, and was finally sent to China Resources Recycling. In other words, Liu Yu's final business card as the chairman of China Resources Recycling was only a matter of the last two years of his career. His true network foundation and resource foundation were all rooted in this old network of Shandong Electric Power and Luneng. Yet precisely for this network, there has been a very sensitive saying in official circles for these years. People overseas have specifically combed through the relationship between Big Daddy's wife and the China electric power system, especially the Shandong Electric Power faction. The circle of the Shandong Electric Power faction itself was not concocted out of thin air; the Shandong electric power system has indeed sent out a large number of senior executives of state-owned enterprises over the years. Places like the State Grid, Huadian, Datang, and China Southern Power Grid could all see people originating from the Shandong system, and Liu Yu himself happened to walk out of this network.
So now the most crucial question comes: in 2024, why did China Resources Recycling, a new state-owned enterprise where Big Daddy personally issued important instructions and Li Qiang made instructions, choose Liu Yu as its first head? Official documents of course will not tell you who submitted his name, let alone write that someone whispered in bed one night that this person was not bad. But CCP personnel politics often cannot just be looked at through that appointment and removal notice, especially for the first top leader of such a new state-owned enterprise. To put it bluntly, it is a political trust position. Therefore, today we directly pierce this layer of window paper: Liu Yu's chair was very likely blown out by pillow talk. Look at how smooth this line is: the wife has a deep relationship with this Shandong Electric Power network, and Liu Yu happens to be a person who grew all the way up in this Shandong Electric Power Luneng system. The new state-owned enterprise personally branded by Big Daddy is finally given to him as its first head. If you insist on saying that all of this is a coincidence, then the CCP's personnel politics cannot be looked at anymore. What's even more ruthless is that before he could even warm this chair, he crashed. On September 24, Liu Yu was subjected to double expulsion. The disciplinary inspection notice was written very heavily: using the convenience of his position to seek benefits for others in project contracting, project fund settlement, and other aspects, illegally accepting huge amounts of property, and finally suspected of the crime of bribery, directly transferred to the procuratorate organs. China Resources Recycling has been established for less than two years, and the first head has walked all the way from the general guideline, general program, and general adherence into the procuratorate. If you only see up to here, you can say that Big Daddy misjudged a person again. But once Liu Yu's preceding twenty-year Shandong Electric Power Luneng resume is reconnected, the flavor immediately changes. What the elders are flipping through now is恐怕 no longer just the account of Big Daddy alone, but that personnel network jointly managed by the couple for many years. This is what truly needs to be talked about today.
A few days ago, we saw round after round of personnel replacements and purges in the military, with the big boss's grip on the gun being dismantled layer by layer. Now, on the civilian side, the Liu Yu trail has led all the way to the wife's most familiar old circle in Shandong Electric Power. Moving against the boss's people in the military and starting to move against the wife's people in the state-owned enterprises simultaneously—this is no longer ordinary anti-corruption; this is dismantling the political foundation of a single family. Therefore, today we can take it a step further and answer what she is actually afraid of regarding the Fifth Plenary Session. What she fears is not her husband losing a title, nor is it participating in fewer foreign affairs activities in the future. What she truly fears is that once the boss begins to step back, the network of connections built around this family over the past twenty years will be unearthed layer by layer: who recommended whom, who relied on whom to climb up, who protected whom, and who kept watch for which faction. In the past, no one dared to touch these accounts, but now the party elders have started to touch them. The most interesting aspect of the Liu Yu case lies precisely here: on one end, it connects to the new state-owned enterprise whose establishment was personally instructed by the boss, and on the other end, it plunges into the old network of Shandong Electric Power and Luneng. He is like a needle, sewing together the two networks of the boss and the wife. Now that this needle has been pulled out, we can make an even bigger judgment today: this round of party rectification at the Fifth Plenum has already shifted from cleaning up the boss's political legacy to targeting the wife's faction. Moreover, Liu Yu may not be the last one. What is truly worth watching is whether more old faces will continue to get into trouble from Shandong Electric Power, Luneng, China Green Development, and those who walked out of these systems. Because as long as one or two more fall, today's judgment will no longer be an isolated point; it will become a line.
The first two accounts—one being industrial machine tools and the other being China Resources Recycling—are both visible personnel cases. But if the Fifth Plenum is truly clearing out the master ledger of the boss's past thirteen years, arresting a few chairpersons is not enough; one must also look at what is ultimately left of the policies he personally championed over the years. Uncovering this reveals a very ugly bottom line in finance. In recent years, when the boss talks about finance, his favorite terms are financial powerhouse and preventing systemic risks. After the Central Financial Work Conference in 2023, the party's control over finance tightened further, and the requirements for small and medium-sized financial institutions were also written very clearly: merge those that should be merged, reorganize those that should be reorganized, and reduce quantity while improving quality. These four words carry a heavy bureaucratic tone, but when truly implemented on the ground, it boils down to one sentence: there cannot be this many small banks anymore, and those that cannot withstand risks must be dealt with before they detonate. As a result, by 2025, the number of rural small and medium-sized banking corporate institutions decreased by a net 670 in a single year, a drop of nearly 20%. The Financial News brought this figure back up on October 4 and pointed out very clearly that small banks are currently the weakest layer in China's entire banking system, characterized by poor asset quality, thin capital, and chaotic governance. Coupled with the real estate drag over the years, plummeting interest rates, and a failure of credit demand to pick up, how do small banks survive? Of course, these 670 entities did not all pull the plug and collapse on the same day; Beijing's method is much smarter: absorption and merger, unified legal entities changed into branch offices, letting larger banks swallow the smaller ones. The signboards are removed, the original banks disappear from statistical tables, and depositors can still go to the original locations to do business. On the surface, it is calm and tranquil, but friends, this is precisely the problem. If a local small bank could survive perfectly well on its own, why would Beijing go to such great lengths to cut 670 corporate signboards in a single year? At the end of the day, it is because a batch of small banks can no longer shoulder the risks themselves. Since they cannot be allowed to explode one by one, the fuses are dismantled first, and the risks are packed into a larger box. Therefore, reducing quantity while improving quality translated into plain human language means that the small ones that cannot hold on are merged away first, and those that can still hold on are stuffed into the bigger ones.
While small banks are downsizing, the major banks are having no easy time either. Over the past year, Beijing has continuously injected capital into large state-owned banks. Down below, mergers and exits are happening; up above, capital injections are being made to keep them afloat. After shouting slogans about a financial powerhouse for so many years, the scene actually appearing on the balance sheets now is defusing mines below while giving adrenaline shots from above. This does not mean the Chinese banking system is going to collapse tomorrow; on the contrary, what Beijing is doing right now is precisely preventing it from collapsing. Yet, precisely because of this, this ledger is all the more worth auditing. Over the past few years, the real estate market has plummeted, local government debts have grown increasingly heavy, and bank profits have grown ever thinner. In the end, all problems must return to the financial system to be digested. When the Big Boss took financial security into his own hands back then, the veteran leaders settling accounts now naturally have to ask: after personally taking charge for so many years, what has ultimately been left behind—a financial powerhouse, or a risk disposal project of defusing fuses everywhere? If this financial ledger is being reined in domestically, another net was cast even more awkwardly because it was originally meant to be spread across the entire world. Reuters just published a very interesting investigation today, targeting LOGINK, China's national logistics data platform. To be clear, LOGINK was not built from scratch after the Big Boss came to power; its predecessor existed long before. However, truly lifting this platform into the national strategies of the digital economy, transportation powerhouse, and the Belt and Road over the past decade or so is a different story. In 2019, the National Comprehensive Logistics Information Platform Management Center was unveiled in Wenzhou. Officials directly linked it to instructions from the highest leadership to promote the digital economy at the time, also stating it would provide logistics information support for the Belt and Road. The truly valuable part of this network is not just a website, nor is it for truck drivers to check tracking numbers. Once logistics data is connected on a large enough scale, you can see who is shipping what and who is receiving it, which port it leaves from, which shipping route it takes, and when it arrives. The more ports connected, the more complete this map becomes. Therefore, what Beijing has always wanted is never just to connect a few more ports; what it wants is a radar map of global freight flows. This is precisely what the Americans have been eyeing LOGINK for over the past few years. Washington has consistently worried that once this system connects to enough port and shipping data, Beijing would be able to access massive amounts of non-public trade information and even track sensitive cargo. The Chinese side has naturally always denied using these data for other purposes, but regardless, this network was indeed pushed outward all the way during the Big Boss era and squeezed into the digital infrastructure of the Belt and Road. Yet, when Reuters checked back today, the picture had completely changed: international cooperation has stalled significantly, former overseas partners have stopped connecting, and LOGINK subsequently withdrew from the International Port Community Systems Association. The website has been offline since around 2024. When reporters visited the operational site in Wenzhou, almost no signs of normal operation could be seen. The company responsible for commercial operations has been entangled in a series of contract and leasing disputes over the past two years. The most ironic part? The slogans on the wall still talk about 2035, but the network has already broken first. This scene is very much like many project plans from the past 13 years—always projecting 10 or 20 years into the future, with propaganda instantly boasting about being global and world-leading. Yet when the external environment finally changes, the US starts blocking, and partners start withdrawing, what is left in the end still depends on whether this system can survive on its own. Therefore, the LOGINK ledger cannot simply be treated as a project gone wrong; what it truly slaps in the face is the overarching approach the Big Boss has pushed outward over the years—connecting ports, linking data, sending platforms abroad, and ultimately trying to hook global logistics into its own system. And now? Domestic finance is pulling back inward, and the overseas data network is also pulling back inward. Putting these two things together, the contours of the fifth-plenum account settlement become even clearer. Previously, it was individuals being investigated; here, it is the路线 (policies/line) being investigated. For industrial mother machines and China Resources Recycling, the veteran leaders can pin responsibility on specific individuals. But finance and LOGINK are different; from beginning to end, both of these areas are directions repeatedly endorsed and personally overseen by the Big Boss himself. So once it reaches this point, the ledger turns the page from who pocketed the money to a deeper question: over these 13 years, what are the things that can actually be left behind, and what are merely scaffolding propped up by political slogans?
Just as these accounts were being laid on the table, the Wall Street Journal article on October 2nd was released, and this timing is the truly interesting part. On the surface, Lingling Wei's report describes several highly unusual arrangements for the visit to the U.S.: the Chinese side canceled the original working lunch a month in advance, the White House specifically prepared a private lounge, and there was a gap of about five hours during a visit that lasted less than two days. The report also mentioned that when the Chinese side arranged the itinerary, they had to consider how long he could stand, how long he could walk, and when he needed to stop and rest. These details, when applied to an ordinary leader, would at most be called protocol arrangements, but when applied to someone who has long relied on a high-energy, strongman image to firmly hold onto power, the implications are completely different. The WSJ itself is actually quite restrained; it didn't tell you exactly what illness the boss has, nor did it say he has cognitive issues, and it specifically left a way out. A long-haul flight of over ten hours plus jet lag would naturally be tiring, but what is truly valuable politically is not a medical diagnosis, but these details that everyone can understand. Putting these things together, it only takes one sentence to complete the narrative for Beijing: it's not that he lost the power struggle, but that his body simply cannot hold up anymore. At this point, we need to dial the clock back two months. On August 18th, Jiang Wangzheng released a theory overseas that the boss would not have a fourth term—not because he was forced out by factions within the party, but because he didn't want to continue, and one of the important reasons was that his health couldn't take it. He even included Li Qiang in the succession arrangements. At the time, our program already discussed that the most important thing about this narrative is not whether every detail can be immediately verified, but that it prepared a political script in advance: voluntary retirement rather than being ousted, and health reasons rather than a failure of the political line. As a result, as soon as this WSJ piece came out, Jiang Wangzheng jumped out the next day to say, 'The Wall Street Journal confirms my news; I am always top-tier.' This statement was actually premature. The WSJ did not confirm his claim of no fourth term, nor did it confirm Li Qiang's succession, and certainly not that Beijing has already arranged a voluntary retirement. The only piece it truly filled in was that the boss's physical endurance is now being discussed by mainstream U.S. media with specific protocol details. But this is precisely the most critical piece, because if the party really wants to change leaders, the hardest thing to solve has never been who sits in that chair, but how to explain why the previous person is stepping down. Especially after these thirteen years of elevating the 'Core' to such a high pedestal, if the whole party were to see him forced to hand over power, all the previous myths would be shattered. But if the reason for the exit is changed to health, it is completely different: the political line is not denied, his historical status does not need to be overturned on the spot, and the party does not need to publicly admit who defeated whom; it is just that he has worked too hard for the party for too long and it is time to rest. Therefore, we will draw a conclusion today: the real political function of this WSJ article is to prepare a decent exit manifesto for the Fifth Plenary Session. Furthermore, we cannot view the name Lingling Wei as just an ordinary reporter. In the previous case involving Zhang Youxia, she also obtained the most sensitive and difficult-to-disclose information from the CCP's top leadership. We mentioned at the time a tactic of 'exporting to domestic markets'—there are some things Beijing finds difficult to say itself, so it lets major overseas media say them first, and once it becomes an foreign media report, the political cost of passing it back is completely different. This time, we don't need to prove which faction leaked the information; looking at the final effect is enough. The sentence that Zhongnanhai finds hardest to say itself—that the boss is physically unwell—is now being said by a major American newspaper on its behalf, which puts the final piece of the puzzle in place before the Fifth Plenary Session. The elders are digging up the accounts in the front, and overseas public opinion is paving the way in the back; while dismantling and auditing the boss's thirteen-year political project, they are also making the path of 'voluntary retirement due to health reasons' smoother and smoother. By the time it actually reaches the table at the Fifth Plenary Session, what they will be fighting over is not just whether to hand over power, but under what narrative to hand it over, in what capacity to hand it over, and whether he can still keep that 'Core' shell after handing it over. Alright, let's stop here for today. Friends who like 'Jiang Feng Vision', don't forget to follow and like. Please also share the program so that more friends can understand this true end-game of power. We will continue to talk about it in the next episode.