Category Archives: corruption

Wen Jiabao: As Corrupt As His Peers

NYT writer David Barboza tipped off a firestorm this week when he published a piece detailing the enormous sums the Wen family has accumulated recently:

The mother of China’s prime minister was a schoolteacher in northern China. His father was ordered to tend pigs in one of Mao’s political campaigns. And during childhood, “my family was extremely poor,” the prime minister, Wen Jiabao, said in a speech last year.

But now 90, the prime minister’s mother, Yang Zhiyun, not only left poverty behind — she became outright rich, at least on paper, according to corporate and regulatory records. Just one investment in her name, in a large Chinese financial services company, had a value of $120 million five years ago, the records show.

The details of how Ms. Yang, a widow, accumulated such wealth are not known, or even if she was aware of the holdings in her name. But it happened after her son was elevated to China’s ruling elite, first in 1998 as vice prime minister and then five years later as prime minister.

Many relatives of Wen Jiabao, including his son, daughter, younger brother and brother-in-law, have become extraordinarily wealthy during his leadership, an investigation by The New York Times shows. A review of corporate and regulatory records indicates that the prime minister’s relatives, some of whom have a knack for aggressive deal-making, including his wife, have controlled assets worth at least $2.7 billion.

The article is long but worth a read, as Barboza details how a Chinese politician known for his down-to-earth touch has become the center of a massive corruption vortex. None of this is surprising, as such, but the details have never been laid out so clearly and investigated so thoroughly before.

The blowback has been impressive, as the Times’ Chinese-language site was blocked in China within hours:

The episode is an extreme example of an enduring newspaper-world fact: journalism and business interests don’t always go hand in hand.

The Times did exactly what one would hope and expect: It published a great story without undue regard for the short-term business consequences.

Mr. Sulzberger said the publication of the article was preceded by “conversations with the Chinese government to discuss it.”

“They wanted to air their concerns – which I listened to, as I should,” Mr. Sulzberger said. “And eventually, we made a decision to publish.”

Joseph Kahn, the foreign editor, told me that he knew when the reporting on this story began – about a year ago – that it would be a “threshold issue” for the Chinese government.

“I expected it to test the limits of what they would tolerate from the foreign media,” he said. (In speaking with me, he emphasized that Mr. Barboza’s direct editor on the story was Dean Murphy, a deputy business editor.)

Mr. Kahn said that as recently as Wednesday, Mr. Sulzberger and the executive editor, Jill Abramson, met with Chinese government representatives at The Times. But the focus of that conversation was not about the journalism – it was about political and cultural differences.

In short, Chinese officials were making the case that The Times not publish the article.

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“China inequality causes unease – Pew survey”

Pew has a new survey out, asking Chinese about a whole lot of things. The results confirm what a lot of us have sensed about China:

A slowdown is particularly troubling for Xi because, as China prepares for its once-in-a-decade leadership transition, a Pew Global Attitudes survey conducted there this year finds that its citizens are also increasingly worried about a variety of other domestic issues, especially corruption, inequality and consumer protection.

In the economic realm, while standards of living have improved for the vast majority of Chinese, and the country’s middle class has expanded tremendously, there is nonetheless a widespread belief that not everyone is enjoying their fair share. And as consumers, many Chinese feel at the mercy of a system that cannot guarantee the safety of life’s basic necessities.

Half say corrupt officials are a very serious problem in China, up from 39% in 2008.

Second, there is a consensus that some people are being left behind by China’s rapid growth – 81% of those polled agree that today the “rich just get richer while the poor get poorer”. Nearly half (48%) describe the gap between rich and poor as a very big problem, up from 41% four years ago.

And in another sign that many do not see a level economic playing field, less than half (45%) agree with the statement “most people can succeed if they are willing to work hard”.

Roughly four-in-ten (41%) now consider food safety a very big problem, up from just 12% in 2008.

During that same time period, concerns about the safety of medicine have more than tripled, from 9% to 28%. Similarly, the percentage saying they are very worried about the quality of manufactured goods has jumped from 13% to 33%.

These are important points, and I think they’re very telling for the crisis of confidence the Party is facing. Xi needs to seriously change course if he wants these numbers to stop climbing.

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“In the Current System, I’d Be Corrupt Too”

The NYRoB has a great interview with Bao Tong, who was kicked out of the Communist Party shortly before the Tiananmen Massacre and is followed by groups of police to this day (check out the picture in the article for a glimpse of this dangerous, dangerous man):

When you served in the government, in the 1980s, the older generation was really important. Veterans of the Long March tried to get Deng Xiaoping to reverse economic reforms and many of them supported the 1989 crackdown. What about now? Is there an older generation that still plays that role? Do you think people like former party secretary Jiang Zemin have influence behind the scenes?

There aren’t elders anymore like that. Jiang isn’t a real elder. In the revolution he was a nothing. He doesn’t have that kind of influence. The big difference is that in the past it was one person who decided: Mao and then Deng. Now a few people decide.

Is this good? Some people say the lack of a single strong leader explains why there have been no major economic reforms in the past decade.

Overall it’s a good thing. It’s terrible when just one person decides. You can talk about Deng’s reforms, but what about Mao? He could decide anything but he chose the Cultural Revolution and the Great Leap Forward. And Deng, well there was June 4 [the night of the 1989 Beijing massacre].

I think that group of men at the other table are watching us.

Forget them. They follow me wherever I go.

Why is the current system so corrupt? Are there too many interest groups?

No, it’s that too many things are off-limits. If you’re in that system, they’ll say, oh, your son should be a CEO. If you say, no, he shouldn’t, then they say, how can he not? If your son can’t be one then ours can’t be one either. Then they’d push you out of the boat. So if you’re in the boat, you’re corrupt. Everyone has a villa and they give you one. One in Beijing, one in Hangzhou, one in Suzhou, one in Shanghai. You say you don’t want it. What? But even the provincial leaders have villas, how can you not? It’s legal, take it. So if I can say I’m not corrupt it’s because I was an official in the 1980s when it was different. There wasn’t so much money and privileges.

I’ll walk you home.

No, don’t. You go directly into the subway. I’ll walk home. I won’t be alone.

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“Rotting From Within”

People have been calling this piece ‘important,’ and given how much detail John Garnaut has provided, this might be the most in-depth look at the current level of corruption in the PLA we’ve seen recently:

“No country can defeat China,” Liu told about 600 officers in his department in unscripted comments to an enlarged party meeting on the afternoon of Dec. 29, according to sources who have verified notes of his speech. “Only our own corruption can destroy us and cause our armed forces to be defeated without fighting.” This searing indictment of the state of China’s armed forces, coming from an acting full three-star general inside the PLA, has no known modern precedent.

There is no way to independently verify Liu’s withering assessment of the extent of corruption in the PLA, but he is well-positioned to make it. His professional experience includes a decade in the government of the central Chinese province of Henan and a decade in the paramilitary, taking him beyond narrow lines of command and patronage. His logistics department is integrated with all other arms of the Chinese military and his status as the descendant of a high-ranking leader, or princeling, enables privileged informal networks across military ranks and the civilian side of the party-state.

The practice of buying promotions inside the military is now so widespread, Liu noted, that even outgoing President Hu Jintao, who also leads the military from his position atop the CMC, had vented his frustration. “When Chairman Hu severely criticised ‘buying and selling official posts,’ can we sit idle?”

PLA veterans told me they are organising “rights protection” movements to protest their inadequate pensions, which they contrast with the luxury lifestyles they observe among serving officers. Retired officers have told me that promotions have become so valuable that it has become routine to pay the equivalent of hundreds of thousands of dollars in bribes to even be considered for many senior positions.

The February address, the second and most detailed of Liu’s corruption speeches, suggests the problems run much deeper than anecdotal evidence suggests. “Certain individuals exchange public money, public goods, public office and public affairs for personal gain, flouting the law and party codes of conduct, even resorting to verbal abuse and threats, clandestine plots and set ups,” he said.

In that scandal, widely covered in official media, Yuanhua used military connections to evade a staggering $6.3 billion in taxes by smuggling everything from cigarettes and luxury cars to fully laden oil tankers. The case brought down hundreds of provincial and military officials, including the head of a major PLA intelligence division. It also enabled Jiang to consolidate his grip on the military.

The outside world caught another limited glimpse of military corruption in December 2005, when the deputy commander of the navy, Adm. Wang Shouye, was detained for unspecified “economic crimes.” Official reports said he was brought down by a mistress, while Hong Kong’s Asia Weekly said he kept five mistresses and stole almost 20 million dollars.

In late January, Liu followed up his tough talk by ripping out one allegedly cancerous node, the deputy director of his Logistics Department, Gu Junshan, after a protracted internal struggle. Gu was the first military official of such a high rank to be toppled since Admiral Wang in 2005. A source with direct knowledge of the case described General Gu extorting county officials with threats of violence and buying his way up through the PLA hierarchy. The source, whose allegations could not be independently confirmed, said that Gu, together with friends, relatives, and patrons in and beyond the military, profited immensely from a property development in Shanghai, distributed hundreds of PLA-built villas in Beijing as gifts to his friends and allies, and generally ran his construction and infrastructure division like a mafia fiefdom.

Chen, the son of one of China’s 10 great marshals and son-in-law of a legendary commander, Gen. Su Yu, runs a successful infrastructure investment firm, Standard International. He opted out of the government and military system after the Tiananmen massacres. He told me the 1989 bloodshed left a vacuum of purpose and integrity within the PLA, which money has rushed to fill. “The problem has really got out of hand in the last 20 years,” he said. “After the June 4 movement, when ‘opposing corruption’ was the protestors’ slogan, some of the officers no longer cared about anything. They just made money and broke all the rules.”

A second princeling who has recently retired from a ministerial-level position told me discipline and unity in the PLA has deteriorated in the past decade. He said an unprecedented leadership vacuum has opened up at the top of the military because President Hu never consolidated his grip, even after more than nine years at the helm of the Communist Party and seven years chairing the Central Military Commission.

Few analysts believe the PLA can seriously tackle its own corruption problems without decisive intervention from the civilian leadership. Whether Hu or his likely successor Xi will have the political capital to spend remains an open question.

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Wukan: Holding Steady

The latest on Wukan from a few sources:

First, Tom Lasseter continues to report from the scene-

Locals say that after they fought off a police advance on Dec. 11 and closed off the town to village security forces and Chinese Communist Party officials, government boats chased the fisherman from open waters into a harbor of the South China Sea. While there’s no blockade to be seen, the fear of the unknown is enough to keep most of the boats moored.

The government of the nearby city of Lufeng “is scared that we’ll buy weapons and bring them in,” said a 49-year-old fisherman surnamed Lin, who requested that his full name not be used for fear of reprisals.

Two other fishermen quickly offered a different theory: Officials don’t want people fleeing to Hong Kong and Taiwan across the sea.

It’s unclear whether the standoff will end with crackdown or negotiation.

Perhaps owing to those anxieties, a notice appeared Monday morning outside a house where many journalists are staying that asked them not to use the words “uprising” or “revolt” to describe the situation.

One member of the group, surnamed Shen, suggested unease about things going too far.

“We’re afraid that if we go to Lufeng the police will shoot us, or detain people and beat them to death,” said Shen, a short man in baggy black pants who also didn’t want his first name used.

Organizers have painted a less dramatic picture: If the police don’t allow the procession to pass, they’ll just stage a sit-in.

Shen said that despite his misgivings he’d probably join the march.

“I used to go out to the sea and fish, and then come back at noon and tend my family’s land,” he said. “But now I can’t fish and our land has been taken away.”

What, he asked, is there left for him to do?

Next, from RFA:

In a mass meeting on Monday, villagers made a collective decision to stage a demonstration on Wednesday and march to the city government, local sources said.

“Basically the whole village is there,” said a resident surnamed Chen on Monday. “There are maybe 6,000 or 7,000 people.”

“They are at the main intersection.”

Officials are now threatening that several thousand armed police officers now stationed in a cordon around the village, and carrying out identity checks on all those coming and leaving, are being readied for an assault on the village, according to Zhang.

An activist surnamed Yu, who traveled to Wukan in a show of solidarity with local residents, said he was detained after arriving at one of the road-blocks set up by armed police.

Yu, who traveled with a group of 10 others, said he was held from Dec. 8-16, before being escorted back home to the provincial capital, Guangzhou.

“I and a lot of other netizens are being confined to our homes,” Yu said. “We can’t go out.”

Guangzhou-based lawyer Tang Jingling was taken away by police at the weekend, his wife said.

“It’s probably to do with the Wukan incident,” said Tang’s wife, surnamed Wang. “I called up the police station to ask, and they told me that he was being held on orders from the Guangzhou municipal police department.”

A resident of Shangdaimei village, also near Shanwei city, said hundreds of villagers had marched to local government offices in Xinan township on Sunday to protest the sale of their farmland.

“There were some officials from the Communist Party commission for discipline inspection who said they would come to our village, but they never came,” said one protester, Lao Zhang.

“So we went to the township to protest … We were also protesting and calling for an allocation of land,” he said. “They should give it all back to the villagers.”

And finally, from Bloomberg:

Protesters in the Southern Chinese village of Wukan have organized to distribute food to the poor as a nine-day police blockade left people short of supplies.

People in the village in Guangdong province have not been allowed to get food from the outside and are donating remaining supplies to the poor, Huang Rongbiao, a restaurant owner in Wukan, said in a telephone interview yesterday. Villagers are allowed to come and go from Wukan as long as they don’t bring in food supplies, Huang said.

“Maybe there’s enough food for now but I can’t guess how long that will last,” said Huang, who has kept his restaurant closed for 10 days. “Hopefully, the government will handle this and we are waiting for news.”

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“China’s rebel villagers in Wukan threaten to march on government offices”

Amazingly, Wukan is still holding stable- the Telegraph has the latest:

During another day of protests and marches, Wukan village representative Lin Zulian addressed a crowd of more than 6,000, pledging to fight with their lives against the corrupt system which has robbed them of their coastal land and of their village leader, Xue Jinbo.

“We give the local government and police five days to hand back Xue’s body. If not, we shall climb over our barricades and march on the [Lufeng] town hall to try and get his remains,” said Mr Lin.

Last week protest in the village saw the local party and police lose control and flee the area, for the first time on record. In retaliation police have mounted a seven-day blockade that is choking the village of food supplies.

As the protesters filed passed the now empty village administrative centre, they slid paper notes into a ballot-like box and gripped onto their banners demanding democracy.

“If they have 100 coffins, they can bury me in 99. But I will save one for the corrupt officials who have been working with business people to take away our rights and our friend,” said Mr Lin.

Among their angry chants, the villagers once more voiced support for the Communist Party and the central government – and called for top to bottom transparency among their leaders.

It is to the capital, Beijing, that the mainly peasant farmers and fishermen look for salvation – as well as justice and emancipation from the long reign of a crooked local government that has been chased out of town.

The Sunday Telegraph toured the village barricades yesterday. Sawn down trees, crudely tied trip wire, wood embedded with nails, strategically scattered broken glass and stockpiles of rubble projectiles are the main defence against any goon snatch squads who dare to enter the village.

But defiance and anger remain the most potent weapons against the increasing number of paramilitary police seen mustering at checkpoints on the main roads.

Some villagers have walkie-talkie radios but mobile phones remain the main means of communication.

Fearing the government will soon cut the lines and down the internet connection, gongs have been placed at the barricades and are to be sounded to summon the village to defend against attack.

“There is a lot of anger here. They have been robbing and lying to use for a long time,” he said.

The small fishing vessels are tied up – unable to be put to sea because of a small flotilla of marine police are blockading the small bay’s entrance, according to Chen. “They chase you back in,” he said.

A slogan adorning a government funded hotel which was due to be open next year reads: “Running along the seaside in the golden times!”

“They built it on our land. We want it back,” said Chen.

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Wukan Protests: Dabian Hits the Fan

Wukan, the Guangzhou village which has slowly been getting more and more out of hand, seems to have crossed a handful of lines. There are a ton of good stories on this from all over the place- Malcolm Moore was in the village itself and filed this:

Wukan has been encircled by the police cordon since Sunday, after a failed attempt by 1,000 armed police to capture the village. No food or water is allowed in, and no villagers allowed out.

Villagers say that they have enough supplies to hold out for only 10 more days.

But the villagers were unbowed yesterday, and their leaders said they had seen signs that the government would “blink first”.

Trouble in Wukan has been brewing since September, after the fishing village revolted at an attempt to take one of its last parcels of farmland and give it to a major Chinese property developer, Country Garden.

However it was the death of 43-year-old Xue Jinbo, one of the village’s 13 temporary representatives, in police custody that pushed Wukan into its current fury, and saw the last of the village’s dozen Communist party officials flee. His family believes he was murdered.

Thousands of villagers have held daily protest meetings outside the village hall since the news broke on Monday.

He later left the village, explaining:

The first rule of journalism is never to leave a running story.

Especially when you are the only journalist in town.

So why did I pull out of Wukan, slipping back past the police cordon last night down a slip road?

The story in the village is far from over, although I believe the situation is unlikely to change in the next few days, as the two sides tentatively negotiate their way towards a resolution.

The siege continues and on Dec 16 the village will mark the seventh day since Xue Jinbo, one of its representatives, died in police custody, an important public day of mourning.

The reason we had to pull out is because we felt we were putting ourselves and the villagers in danger by staying.

Jonathan Watts of the Guardian once told me, in my first few months in China, that the problem with being a journalist here is that you are surrounded by a ring of fire – you stay safe, but everyone else gets burned.

Custer from ChinaGeeks has been writing about the implications:

I don’t think I need to explain the ways in which this event is amazing, and I mean that in the literal sense of the word. Anyone with a funtional brain and half an eye on the Chinese media is aware that local government land grabs are a huge source of discontent, but if you’d told me a few months ago that a Chinese town would band together, run the local officials out of town, resist a force of 1,000 police officers intent on entering the town again (but, thankfully, not willing to use lethal force to do so, at least not yet), establish their own makeshift government, and keep the whole thing running even this long, I would have told you you were nuts.

Before we go any further, I want to get this out of the way: no, this is not the first spark in some nationwide rebellion that will see the national government overthrown. In fact, it’s not even a rebellion against the central government, as you can tell from the pleas for help from Beijing in Moore’s article.

Still, it puts Beijing in an awfully interesting position. As I see it, they have three basic options:
-Come to the rescue of the down, declare the local government officials corrupt, put them on trial and restore order peacefully. This is, I suspect, exactly what the people in Wukan want.
-Come to the rescue of the officials and provide them enough manpower to completely crush the rebellion. This would be easy, but would attract a lot of negative attention internationally, and there’s a risk of it leaking online domestically, too.
-Do nothing for the time being, and see if the officials can regain control on their own, or if the rebellion spreads.

The last option seems by far the most likely to me, which is good and bad news for the protesters in Wukan. No help is coming from Beijing, but at least that means the PLA probably isn’t coming either.

Of course, the central government isn’t really doing nothing, as mentions of Wukan
are being scrubbed from the media and deleted online. As you would expect, searching for “Wukan” on Weibo gives you the classic “According to the relevant laws, these results can’t be displayed” message.

He also has some pictures that give a sense of the scale. Another post, here, has more pictures and a video from the scene. Meanwhile the WSJ has an article about Wukan which mentions the broader picture of the dangers of land grabs:

Mr. Yu estimates that local officials have seized about 16.6 million acres of rural land (more than the entire state of West Virginia) since 1990, depriving farmers of about two trillion yuan ($314 billion) due to the discrepancy between the compensation they receive and the land’s real market value.

China’s Land Ministry has also warned that misappropriation of farmland has brought the country dangerously close to the so-called red line of 296 million acres of arable land that the government believes it needs to feed China’s 1.34 billion people.

The Land Ministry, which uses satellite imagery to spot abuses, launched a fresh crackdown on illegal land use this year, targeting golf courses, hotels and villas in particular, and has announced several high-profile cases in which officials have been punished.

But the central government’s attempts to curb such abuses, and to draft new legislation that would protect against land grabs and give farmers a market rate for their land, have met fierce resistance from local authorities who rely on land sales to maintain growth, service debt and top up their budgets.

In 2010 alone, China’s local governments raised 2.9 trillion yuan from land sales. And the National Audit Office estimates that 23% of local government debt, which it put at 10.7 trillion yuan in June, depends on land sales for repayment.

Finally, China Media Project has a post about how Beijing is directing the censorship of this case:

Finally late yesterday, just minutes before midnight and after a uniform blackout in Chinese media through the day, we had two news stories on Wukan from China News Service, China’s number-two official newswire. The first reported that Shanwei city authorities revealed at a press conference on the Wukan incident (乌坎事件) yesterday that “preliminary investigations have ruled out external force as the cause of death” in Xue’s case. The news story also said that the city’s medical expert shared photos of Xue’s body during the press conference.

The second China News Service report, also based on the press conference, said that “various village officials” from Wukan had been detained for discipline violations.

Curiously, though, there seems to be no coverage of the press conference from other media. That suggests that these stories can be taken as an illustration of “public opinion channeling” tactics at work. The authorities, in other words, are selectively releasing partial information from an official perspective in an attempt to frame and re-direct public attention. Message 1: Xue Jinbo was not killed by police, an assertion that removes the immediate reason for escalated tensions in Wukan. Message 2: local Wukan leaders have been detained for suspected discipline problems, an action that (leaders undoubtedly hope) will remove the initial underlying cause of tensions, alleged dirty land deals.

More as it comes in.

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