The Party: The Secret World of China's Communist Rulers

by Richard Mcgregor

  ‘The party leaders realize that they don’t have a dominant ideology they can use to run the country any more. For them, there is no core social value. At this moment, the sole, dominant ideology shared by the government and the people is money worship.’ For Yan, wealth did not automatically translate into strength. ‘Our military budget is already 1.6 times that of the Russians but we cannot build the same military,’ he said. ‘Our education spending is much larger than India’s, but we cannot have one single person win a Nobel Prize. They already have ten. We have more rich people than Japan and we have more first-ranked companies, but we can’t build world-class products. We have more foreign reserves than anyone in the world but we cannot build a financial centre even like HK.’ The list went on and on.

  In Taiwan, the former deputy defence minister, Lin Chong-pin, gave me a different spin on the same issue. Lin deeply admired Hu’s handling of Taiwan and the way he had wrested control of its management away from the hardliners. Years before cross-straits relations began to improve, Lin said he had received a message through relatives in China that the Politburo had resolved to turn Taiwan into ‘an innocuous international issue’, which was exactly what had happened. Hu’s new Taiwan policy was distilled, in idiomatic Chinese style, into a single saying: ‘Enter the island; enter their homes; enter their minds.’ Everything that his well-placed contacts in China had promised would happen regarding policy on Taiwan under Hu had come to pass.

  The reason why Taiwan had been pushed off the agenda, Lin said, was because Hu realized it did not threaten the stability of the country nor the Party’s grip on power and control over the military. ‘Hu knows the major enemy is not outside China,’ said Lin. ‘It is corrupt officials inside.’

  5

  The Shanghai Gang

  The Party and Corruption

  ‘People have been driven from one corner to another corner of the city. Many among us also have to endure illegal surveillance, home searches, forced repatriation, detention, re-education through labour, being locked in psychiatric asylums, phone-tapping, harassment and other ways of suppression.’

  (Zheng Enchong, a Shanghai lawyer)

  ‘If I am not mistaken, our country’s private enterprises produce over 40 per cent of GDP nationally. Here in Shanghai, state enterprises produce nearly 80 per cent of GDP. If you want to discuss who adheres most to socialism, couldn’t it be said to be Shanghai?’

  (Chen Liangyu, Shanghai Party Secretary)

  As protests go, the first one seemed like a desultory affair. In the summer of 2002, a small band of local residents strolled languidly through the laneways of old Shanghai to the district courthouse, hugging the shady side of the street for respite from the stifling heat. At the head of the march was a 41-year-old restaurateur. Tall and slender, with a gentle, almost ethereal manner, Xu Haiming seemed as low-key as the protest itself.

  The business Xu had set up in the Jing’an district, in central Shanghai, had much the same qualities: a three-storey teahouse-cum-restaurant styled with a counter-cultural Tibetan theme, the kind of hippie-chic then becoming fashionable among young urban Chinese suddenly affluent enough to ponder a laidback alternative to the rat-race of China’s richer cities. Xu had bought the corner building two years earlier, on a large block of the old colonial city, just off Nanjing Road, one of the main shopping and business thoroughfares in downtown Shanghai that sliced through the old French Concession and snaked all the way to the Huangpu river. He paid US$50,000, and ploughed the rest of his life savings into renovating the property.

  Xu had never been trying to make a political point with his teahouse. There were no pictures of the Dalai Lama, the Tibetan spiritual leader, hanging on the walls, or anything else that might have provoked the authorities. It was Xu’s timing, not his Tibetology, that was the problem. Just as his business was gathering momentum, Xu received a notice from the district government ordering him to vacate his property. District officials had sold the building to a businessman, in return for a slice of the development slated to take its place. For the development to go ahead, and the officials to get their pay-off, Xu had to go. ‘They never even asked me,’ he said. ‘They just said they were going to knock the building down.’

  Scores of neighbourhoods, once criss-crossed with colonial-era residences housing tens of thousands of people, were laid to waste in the 1990s and the early part of this century in Shanghai. Swathes of the city were left resembling Berlin after the Allied blitz. The frenzied reconstruction which followed was one of the largest building booms in recorded history. About 20 million square metres of land were developed in the city between 2000 and 2005 alone, equal to one-third the size of Manhattan. Literally hundreds of new skyscrapers and apartment blocks went up in a few short years, on top of an already massive building programme in the previous decade. On the east bank of the Huangpu river opposite the main metropolis, an entire, ready-made financial district had been constructed where there had once been a small village.

  Huge fortunes were there for the taking. Citizens like Xu who had the temerity to stand between the bulldozers and the money to be made in the real-estate boom risked more than just their livelihoods. In Shanghai, they found themselves fighting a city government which profited from the sale of land, and developers and individual officials who made buckets of money from the projects that followed. Standing up to property developers was like drawing a dagger against the all-powerful local party boss, Chen Liangyu himself, and an army of corrupt officials lined up behind him.

  A local lawyer, arrested and re-arrested numerous times after he persisted in taking up the complaints of residents, was not exaggerating when he denounced Shanghai’s top leaders in an open letter to Hu Jintao ahead of the 2007 congress. ‘People have been driven from one corner to another corner of the city,’ Zheng Enchong said, referring to the residents uprooted from their homes and communities in the city centre and then sprinkled randomly into small new apartments in the distant suburbs. ‘Many among us also have to endure illegal surveillance, home searches, forced repatriation, detention, re-education through labour, being locked in psychiatric asylums, phone-tapping, harassment and other ways of suppression.’

  When, after the street march, Xu Haiming appeared before the local court in front of a gallery filled with supporters, he waved a sheaf of property titles at the three judges. ‘Any government decision to force us out is illegal, because the law of our country protects our ownership rights,’ he declared. ‘The reason we are bold enough to come to court is because we still have faith in the integrity of our judges and the soundness of the legal system.’ In truth, Xu knew he would never find an ally in the law. The same party committees of the city and district governments against whom Xu was fighting ran the courts, appointed the judges and paid their salaries. His noble-sounding speech was just grandstanding, a public relations pitch in his high-risk campaign to force the city and the property developers with whom it was in cahoots to give him a fairer deal. All along, any trouble he could stir up in the courts and the media was a device to capture the attention of the sole body within the system with the clout to bring Chen Liangyu and Shanghai to heel, the Party’s anti-graft body, the Central Commission for Discipline Inspection in Beijing.

  The threat of an investigation by the commission is enough to send shivers down the spines of any party official, although not in the way many might think. Senior party members in China are much like members of the US military when it comes to criminal investigations. They cannot be arrested by civilian law enforcement bodies or other outside agencies for criminal offences until the allegations have been investigated by the Party first. The commission alone, as the Party’s in-house anti-graft body, has the right to investigate officials and detain them when it decides they have a case to answer. ‘The country has the country’s rules,’ said one official, in explaining the system’s logic. ‘But in your house, you must follow the house rules, and they are the most important.’

  The ‘house rules
’ are very simple. For any official it wants to probe, the commission must first get clearance by the party body one level up in the governing hierarchy. In other words, the more senior an official is, the more difficult it is for the commission to gain approval to investigate them. The stream of corruption cases in China and the ruthless justice meted out to those who fall foul of the system sometimes gives the impression of a Party committed to exterminating graft without fear or favour. Far from being a modern-day Chinese version of Eliot Ness’s ‘Untouchables’, however, the commission is structured to keep its investigators in check. The approval process, with its bias towards protecting top leaders from any scrutiny at all, means the commission is dogged by politics, and political struggle, at every turn.

  For Shanghai, the bar was set especially high. The city was more than just China’s commercial capital. Within the party firmament, the metropolis had provincial-level status and, by rights, Chen Liangyu, as the Shanghai party secretary, had a seat on the Politburo. The only way to investigate Chen and his cronies was to go over the city’s head to Beijing, to win the approval of Hu Jintao himself, and the entire nine-member Politburo Standing Committee, a body stacked with Shanghai grandees. It was Xu’s good fortune that the moment he launched his campaign for justice in Shanghai, the city’s political stocks in Beijing was beginning to tail off. But it would take years for the scandal to unfold and the political deals behind its denouement to be played out.

  When the former vice-mayor of Beijing, Liu Zhihua, was convicted in September 2008 of taking bribes worth about $1 million, local netizens lampooned him on internet postings as an under-performer. ‘That’s not much money!’ one blogger said of Liu, who had been in charge of construction for the Olympics. ‘He should count as a clean official. No need for a trial. Release him now!’

  Apocalyptic warnings from Chinese leaders about the threat posed by corruption to the Party’s grip on power have become routine fixtures of top-level political speeches in the last two decades. Hu Jintao, in a 2006 address to the anti-corruption commission, directly blamed the abuse of power by party bureaucrats for rising social conflict and public protests. ‘This time-bomb buried under society could…lead to a series of explosions, which would cause chaos throughout society and paralyse the administration,’ he said. As dramatic as it sounds, Hu’s warning about corruption was not much different from similarly dark pronouncements on the same subject by Jiang Zemin, his predecessor. The revelations about each new scandal have long been greeted with outrage and horror in the official media, followed by sombre speeches from senior leaders about the ‘life and death’ struggle the Party is waging against graft. Everyone vows to work harder and life pretty much goes on, because the anti-corruption system, which allows top officials effectively to supervise themselves, does not change. Only one thing has altered dramatically over time–the size of the bribes, which now routinely run into millions of dollars, even for relatively low-level officials.

  The notorious Xiamen case, in which a crafty, illiterate businessman bribed nearly the whole of a city administration, along with the military, to smuggle more than $6 billion dollars’ worth of goods through the coastal city’s port, free of duties, shocked the central government and ordinary people alike when it was uncovered in the late nineties. But more typical are the cases involving senior officials in all parts of the country, including impoverished backwaters, that come out so regularly that corruption stories in the official media develop an almost humdrum quality.

  In the few months in 2009 when I was writing this chapter, the railways bureau chief in Urumqi, in far-west Xinjiang, was charged with embezzling $3.6 million; in Shanghai, a mid-level official in charge of property was convicted of taking $1 million in bribes and forced to divest himself of real estate worth nearly $6 million; in a small rural township near Chengdu, in Sichuan, the party secretary and head of the local real-estate company was executed for taking $2.5 million in bribes; in the poorest town in Guangdong, the local police chief was discovered with $4.4 million in cash at home; in Chongqing, western China, the head of a development zone went on trial for misappropriating $32.1 million and taking bribes of $1.4 million in a case involving thirty other officials; in Changchun, in the north-east rust-belt, the police chief of a single district was found with $1.9 million in cash in his office; and in Suzhou, the vice-mayor in charge of construction was sentenced for taking about $12 million, the largest one-off bribe on record. With sums like that on offer, it’s little wonder that the vice-mayor of Beijing, who presided over a billion-dollar construction budget, could be mocked for taking so little.

  In a country minting new millionaires every year, the temptation to leverage official positions to make money is irresistible. An official in the Chinese bureaucracy enjoys the status, power and gravitas that comes from working in an administrative system with thousands of years of tradition. But prestige and a bent for policy-making are not the sole drivers of competition for jobs in government. Many people seek administrative positions precisely because they can monetize them. Wang Minggao, who headed a national research team studying the ‘clean official syndrome’, a title which unconsciously underlined the lack of them, said that the ‘whole idea of being an official is to become prosperous’. Without the under-the-table benefits that come with holding an official position, there would be no blossoming black market in buying and selling their government jobs, because they would carry no monetary value.

  The paltry official pay rates add an extra incentive for graft. The salary packages of senior government and party members are not published, but are so low as to prompt ministers to complain about them in public. When Chen Zhili, at the time a cabinet member, was confronted by a university professor in 2007 complaining he earned less than $13,000 a year, she asked the Minister for Science and Technology attending the same forum what he was paid. Xu Guanhua, the then minister, said he was on a salary of about $1,350 a month. Chen added that she earned about $1,450. Even allowing for the perks, such as housing, cars and lifetime pension benefits, the formal cash salaries of even senior officials are miserable and invariably padded by illicit income. ‘Every official has three lives,’ said one official-cum-businessman jailed on corruption charges. ‘Their public life, their private life and their secret life.’

  A bitter–and highly popular–internet posting called corrupt officials ‘the new black-collar class’, who concealed their wrongdoing in a shroud of secrecy. ‘They drive top-brand cars. They go to exclusive bars. They sleep on the softest beds in the best hotels. Their furniture is all of the best red wood. Their houses overlook the best landscapes, in the quietest locations. They play golf, travel at the public expense, and enjoy a life of luxury,’ said the anonymous blog, posted in July 2009. ‘They are the newly arrived “black-collar class”. Their cars are black. Their income is hidden. Their life is hidden. Their work is hidden. Everything about them is hidden, like a man wearing black, standing in the black of night.’

  Corruption thrives in sectors with heavy state involvement and considerable room for administrative discretion: customs, taxation, the sale of land, infrastructure development, procurement and any other sector dependent on government regulation. The jobs in government which attracted the most applicants in 2008 were not elite positions in the mandarinate in the Foreign Affairs and Finance ministries in Beijing and the like. Of the top ten government bodies which received the most expressions of interest for positions, eight were provincial tax bureaux, topped by Guangdong, all of them along the prosperous coast; and two were the customs bureaux of Shanghai and Shenzhen. The bottom ten, which attracted the least interest, were all provincial statistics bureaux.

  Operating out of unassuming modern premises in west Beijing, the Central Commission for Discipline Inspection has a modest 800 full-time staff at head office. Much like the organization and propaganda departments, anti-corruption work is decentralized, with small branches at each level of government and in each organ of the state. Every province, ci
ty and county government, and any state organization under them, all have their own anti-graft commissions or representatives to keep an eye on party members. Large state companies have an in-house commission delegate as well. Superficially, the commission’s investigators and their representatives, who are spread throughout the country, would seem to have all bases covered. In reality, the body’s corruption-busting abilities have long passed their prime.

  Established in its present form in the late seventies, the commission was structured for a bygone era when officials and the urban populace were confined within single work units, when workers, goods and capital were not mobile and ‘corruption was practised by individuals or small numbers of people’. According to Flora Sapio, an academic expert on its operations, the commission’s regular staff are usually ‘Communist Party generalists’, with low education levels, little or no legal training and few investigative skills. Corruption in modern China, with its surging wealth, proliferating business structures, walled-off government empires, massive vested interests and global reach, has simply left the commission’s traditional methods behind.

  The portrayal of the commission’s officials in propaganda campaigns has unconsciously reinforced this image of put-upon corruption-busters, battling insurmountable odds against entrenched graft. In an interview in 2005 played up in the domestic media, Li Youxing, an anti-corruption official in Zhejiang province, complained he had not had a holiday for eight years. He still lived in a shabby wooden house in Taizhou, a wealthy city, with a patched-up couch, a rusty fridge and a broken-down TV. His wife woke at night, screaming in fear about threats to kill them. Li battled on regardless. ‘When a cadre’s needs conflicts with those of the organization, he should unconditionally submit himself to the demands of the organization,’ Li said. ‘If someone is afraid of death or losing his official hat, then he should not be a discipline commission chief.’