The image shows the breakdown in the relationship between Xi Jinping and Zhang Youxia

By The Marx China

A serious crisis has erupted at the top of the Chinese capitalist dictatorship, led by Xi Jinping and the Communist Party of China (CPC). On January 25, 2026, Xi Jinping announced the dismissal of Zhang Youxia and Liu Zhenli, vice-chairmen of the Central Military Commission (CMC), accusing them of serious disciplinary violations. This reduced the CMC to just two members: Chairman Xi Jinping and Vice-Chairman Zhang Shengmin. Following the publication in official Party media of reports on the arrest of Zhang Youxia and Liu Zhenli, there was immediate shockwaves within the military; however, media outlets directly subordinate to the armed forces remained silent, maintaining an unprecedented media blackout for 72 hours. At the same time, senior officers adopted a passive stance or even ignored the latest orders issued by Xi Jinping, collectively expressing the military's willingness to seriously and completely resist him.

Although Xi Jinping has detained Zhang Youxia on multiple charges, including "alleged serious violations of discipline and the law," the two previously belonged to the "princely faction" and had established a cooperative and trusting relationship.Zhang Youxia has always been a core pillar for Xi Jinping within the military and his most powerful political supporter; he steadfastly backed Xi's military reforms and serves as the strongest guarantee for Xi's ability to eradicate opposition and amend the constitution to allow for indefinite re- election. Following the completion of the military reform, the Central Military Commission clearly set the total number of active personnel at 2 million, comprising less than 1 million in the Army, approximately 290,000 in the Navy, about 400,000 in the Air Force, and about 100,000 in the Rocket Force and other units. This size has remained stable since 2017 and represents the world's largest regular military, excluding the Armed Police and reserves.

The crisis of the Chinese dictatorship is part of the global crisis of all dictatorial regimes, just like Chavismo in Venezuela, Islamic fundamentalism in Iran, or the capitalist dictatorship in Cuba—regimes that have fallen into crisis due to the people's contempt and rejection. In China, due to the still-powerful military and police violence and the excessively strict control of information, no crisis of governance is superficially perceived; however, within the ruling class, there is a growing awareness that if Xi Jinping's dictatorial model of extreme pressure continues to be supported, the CCP's "absolute rule" will completely collapse within a few years due to the excessive accumulation of social contradictions.

Thus, on January 29, troops stationed in various theaters of operation began to massify on the outskirts of Beijing, indicating that forces opposed to Xi Jinping within the ruling class have begun to employ military means, attempting to defend their political positions and vested interests by "eliminating" Xi Jinping. Currently, a confrontational situation has developed around Beijing between the besieging troops stationed in the suburbs and the forces tasked with defending the capital. The current situation in China reflects an acute crisis that has erupted at the highest levels of the political system.

Because China is under the complete economic control of Wall Street through the latest forms of capital accumulation, the country has transformed into a sub-metropolis of imperialist capital. As a subcenter of global capitalism, China has reinforced the dollar's global monopoly position and ensured an extremely high rate of exploitation. Therefore, there is no aggressor forcing the Chinese government to maintain such a large army; rather, it exists primarily to suppress workers' uprisings nationwide. To guarantee the army's repressive capacity, it must be managed by individuals with actual combat experience. Xi Jinping, lacking command experience, was forced to reach an agreement with Zhang Youxia, a veteran of the Vietnam War, to indirectly control the armed forces.

Purge in the military high command and its risks

It's worth noting that, although Zhang Youxia was an ally of Xi Jinping, he was never truly his subordinate. The conflict between them stemmed from Zhang's discontent with Xi's ambition to designate a successor after securing his indefinite reelection, and the catalyst was their differing opinions on the use of force in the "Taiwan question ." Since Xi Jinping needs political achievements to solidify his ruling legitimacy—much as the Bush administration successfully used 9/11 to marginalize its political opponents—Xi desperately wants to complete his own mythologizing by controlling Taiwan to deliver a decisive blow to internal opposition within the Party. Therefore, he is urgently leaning toward the use of force for the "unification of Taiwan . "

For his part, Zhang Youxia attempted to persuade Xi to adopt peaceful measures such as negotiation, based on the extreme difficulty of the military campaign and the enormous negative impact it would have on the national economy—a position widely considered dissenting. For an extremely arrogant dictator, any dissent is intolerable, especially when Zhang Youxia's authority, status, and real power posed a challenge to Xi. Therefore, Zhang Youxia's arrest is a necessary step for Xi Jinping to eliminate factors of instability within the Party.

It involves a fierce confrontation between various factions of the dictatorial regime

Since Zhang Youxia and Liu Zhenli disappeared, troop movements have signaled a crisis. Xi Jinping's reckless expansion of influence within the military, coupled with his continued investigation and punishment of high-ranking officers in the People's Liberation Army (PLA), has sparked a direct conflict between the Chinese military and Beijing. This is evident in the inability of Beijing's administrative bureaucracy to reach agreements with the military bureaucracies in the country's various military regions. It is a struggle between two internal factions within a capitalist dictatorship, devoid of any progressive force, as both sides are deeply corrupt and pro-imperialist capitalist sectors with inextricable ties to large corporations and Wall Street.

Nearly 500,000 people view the military as a source of employment, given that 23% of the People's Liberation Army's (PLA) 2 million active-duty personnel are civilians seeking military positions for more stable social security. The root of corruption within the PLA lies in the fact that the armed forces have access to over 1.1 trillion yuan in funds, comprised of the state budget and revenues from military-industrial enterprises. However, following the completion of military reforms in 2017, the army's management has become chaotic, corruption remains rampant, and there is a lack of real combat experience.

Most of the combat-capable equipment remains a legacy of the former Soviet Union, while the new, domestically developed weapons are unsuitable for prolonged, high-intensity use on a frontline battlefield. As for the professional soldiers, the majority are young men with a strong sense of independence and low loyalty; therefore, it could be argued that the overall strength of the Chinese army might even be inferior to that of Vietnam.

Corruption among CCP civilian officials is widespread and affects the national economy, while corruption in the military is linked to the military budget, especially the procurement of military equipment. Historically, for example during the Deng Xiaoping era, the military was allowed to engage in smuggling in exchange for political loyalty, until the Yuanhua case in 1998 exposed the PLA's oil smuggling activities. The Yuanhua case involved millions of tons of petroleum products and billions in tax evasion, generating enormous public attention and widespread complaints about corruption, which led Jiang Zemin to force the military to disengage from commercial business.

Since Jiang Zemin took action in the wake of the Yuanhua scandal, the boundaries between the interests of civil servants and military officers have been clearly defined, resulting in officers no longer holding government leadership positions. High-ranking generals like Zhang Youxia, who were dissatisfied with Xi Jinping's dictatorship and the transformation of the Party's top leader position into a hereditary system, openly confronted Xi Jinping, but they temporarily lost the political battle, were detained by Xi's security forces, and their current status is uncertain.

The real situation of Hainan's financial center

In addition to recent military conflicts, the government bureaucracy belonging to Xi Jinping's faction has also lost confidence in him. Recently, the Chinese Communist Party announced the creation of an international financial center in Hainan; however, in reality, this center functions more as a money-laundering tool for the party elite than as a true global hub. Due to its geographical location, far removed from major trade routes and time zones, it cannot compete with Hong Kong or Singapore. Under the "closed customs" operating model, cross-border capital transfers have become more convenient, such as EF accounts that support investment and financing. Transaction data from the first month reveals the illusion of re-exports: almost all transactions are domestic, effectively acting as a conduit for the elite's asset flight.

According to Edward Snowden's leaks, Chinese officials' overseas deposits amount to 4.8 trillion yuan, representing a third of all assets derived from corruption. As the crisis of capitalist China deepens, the phenomenon of capital flight becomes more severe. Currently, China's economic growth rate is only 5%, which is considered close to a recession locally, far below the historical growth levels of 12% to 14% a decade ago. The gap between rich and poor has widened dramatically, forcing the dictatorial regime to bolster social spending to over 408 trillion yuan to stimulate consumption. A significant manifestation of the crisis is that the economy has fallen into deflation, a situation caused by the collapse in consumption and purchasing power, despite the substantial economic bailouts implemented by the regime.

But now economic growth has stalled, and rescue measures have failed to pull the country out of its predicament, undoubtedly forming the backdrop to the regime's crisis. Currently, to rebuild his collapsed power base, Xi Jinping is waging a life-or-death struggle against bureaucratic factions whose interests are not aligned. Our people are watching the infighting unfold at the highest levels of power, while at the same time, discontent is mounting over the disasters wrought by the dictatorial government.

There is no doubt that the current task is to reunite Chinese revolutionaries around Marxism and orthodox Trotskyism, as championed by Peng Shuzhi, and not around the Maoist revisionism that led to the pro-capitalist dictatorship of Wall Street conglomerates. At the same time, popular discontent and the crisis are forcing Xi Jinping to choose to eradicate all forms of opposition and dissent, which will undoubtedly further aggravate the regime's crisis. Marxists denounce this crisis of the dictatorial regime as a struggle among billionaires; we must seize this crisis to advance any movement that seeks to end the capitalist dictatorship of Xi Jinping and the CCP, in order to establish a genuine workers' and peasants' government that will end the dominance of this corrupt oligarchic capitalist group of billionaires.