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1 Talking Point 5 The Week in 60 Seconds 6 China Ink Week in China 7 Economy 8 Energy and Resources 9 China Consumer 10 Media 11 Banking and Finance 2 December 2011 13 Society and Culture Issue 131 18 And Finally www.weekinchina.com 19 The Back Page China’s most corrupt man is... m o c . n i e t s p e a t i n e b . w w w y b g u in Expect more corruption scandals in the run-up to next year’s leadership change o k y n o a t B s t l t h a e g b k u o r o l a r G M B C d B n S a H Week in China Talking Point 2 December 2011 China’s most wanted Shock as corrupt top Shandong official allegedly made $9 billion n the most recent ‘Rich List’ a senior official at the government’s Odrawn up by Forbes magazine top advisory body, the Chinese Peo- in the United States, Huang Sheng’s ple’s Political Consultative Confer- wealth would (perhaps) have ranked ence, was arrested. In May former him number 34. Amazingly that Shenzhen mayor Xu Zongheng, was would have taken him above Rupert sentenced to death for corruption Murdoch, Ralph Lauren and the re- stretching back to 2001 (the death cently deceased Steve Jobs. penalty was then suspended be- But Huang is no American and cause of “good cooperation”). And, few at Forbes are likely to have even of course, Liu Zhijun, the Minister heard of him. of Railways, was detained in Feb- This week that might have ruary (see WiC95). Up until changed, as he jumped to the top of Huang’s arrest, Liu ranked as the a less prestigious ranking – that most corrupt official to be of corrupt Chinese officials. caught, with estimates of a per- Huang, the deputy governor sonal fortune approaching $2 of Shandong province, was billion (but only a mere 19 this week detained for “seri- mistresses, it seems). ous violations of discipline”, “This year there have been so apparatchik–speak for being many cases, and from now until caught with his hand in the till. Ac- October next year, there will be cording to widely-read gossip on many more,” says Liao Ran, pro- Sina Weibo, China’s Twitter-equiv- gramme officer for China and alent, Huang had accumulated an South Asia at Transparency Inter- ill-gotten $9 billion personal for- national, a non-governmental tune. (At this point Huang is “sus- anti-corruption organisation based pected” of corruption but the exact in Berlin. amount has not been officially con- ahead, with rival factions vying for Why are corruption cases the firmed. Xinhua’s website, however influence. In this drawn-out game clue to a deeper sense of political did quote from Sina the rumoured of political chess, pawns will be transition? $9 billion number.) taken or sacrificed. Huang may well “The very top uses corruption to It sounds a bit large. Then again, be an early example: it’s not clear control people, creating a basic form allegedly Huang didn’t do things who he might have been close to of stability in ordinary times,” says by halves – another number to politically, but it would be naïve to Liao. “And yet, it is dangerous when cause a stir on Sina Weibo: he is see his ousting purely as the result the power balance shifts,” he warns. said to have kept 46 mistresses. of a routine investigation. In other words, this apparent flo- As China heads into 2012, strug- rescence of graft isn’t actually about gles over corruption are moving Anyone else caught in the corrup- corruption, although the crime is Photo Source: Shutterstock Source: Photo centre stage ahead of the biggest po- tion net? obviously real enough. litical reshuffle in a decade at the On September 29 the deputy gover- Instead, it’s about power: who 18th Party Congress next October. nor of Sichuan province, Li stands with whom, who is pro- That means that there is going to Chengyun, was also detained on tected, and who is left exposed to a be much to play for in the months similar charges, and in June Li Yuan, knock-on-the-door from the Central 1 Week in China Talking Point 2 December 2011 Discipline Inspection Commission. This will affect business and busi- nessmen too. “Next year you can’t use economics to explain the economy. You’ll have to use ‘stability,’” says He Fan, deputy director of the Institute of World Economics and Politics at the Chinese Academy of Social Science. The message? Keep your head down, follow the flow of new crim- inal cases and try to work out how power is shifting. Bear in mind too that the government functionary who does you the honour of turning up at your banquet may not be around next year. Perhaps he’ll be promoted to a more senior role in Beijing. Or he might be in jail, or escaped to self- Most Innovative Most Innovative Investment Investment Bank for Bank for Infrastructure and imposed exile in Canada. Sovereign Advisory Project Finance What is going to change next year? Current leaders President Hu Jin- tao, Premier Wen Jiabao and Wu Bangguo, Chairman of the National People’s Congress, are all expected to retire. Hu’s replacement has long been tipped as Xi Jinping, the current vice-president. Wen’s suc- cessor will probably be vice-pre- Best Global Best Project Finance House Sovereign Advisor in Asia mier Li Keqiang. Who takes over from Wu is less clear. But there’s more at stake than these three positions. According to Cheng Li, an analyst at the Brook- ings Institution, as many as seven of the nine members of the Polit- buro Standing Committee, the highest decision-making body in the country, are expected to retire. Best Bond House Best FX Bank “Within the full 25-member Polit- in Hong Kong in Hong Kong buro, at least 14 leaders will vacate their seats to make way for younger candidates. Consequently, the prin- cipal figures responsible for the country’s political and ideological affairs, economic and financial ad- ministration, foreign policy, and military operations will consist of newcomers after 2012,” Cheng says. HSBC operates in various jurisdictions through its afﬁliates, including, but not limited to, HSBC Bank plc, authorised and regulated by the Financial Services Authority, The Hongkong and Shanghai Banking Corporation Limited, HSBC Securities (USA) Inc., member of NYSE, FINRA and SIPC, and In a five-part series China’s HSBC Bank USA, NA. 11-083 Midterm Jockeying: Gearing up for 2 Week in China Talking Point 2 December 2011 2012 Cheng also notes: “The main contenders for the top Chinese leadership in 2012 have already been engaged in personal political campaigns (in the Chinese style, of course). … During the New Year celebrations of 2010, for example, Xi [Jinping] used the short message service (SMS) to send a text message of his ‘personal’ greet- ings to approximately one million officials in the Party grassroots branches across the entire country – an unprecedented way for a top Party leader to communicate with local officials. Meanwhile, Li [Keqiang] has drawn attention for his strong interest in such areas as climate change, energy efficiency, healthcare and affordable hous- ing. None of these issues was a priority for Chinese leaders 10 The $9 billon dollar man: Huang Sheng years ago.” So how bad is the corruption? Chinese going into exile are man- So how does corruption touch pol- This is the million – or perhaps agers at state-owned enterprises. itics? trillion – renminbi question. The battleground is the Central Dis- As a secret vice, it’s hard to say Are corruption cases the only clues cipline Inspection Commission. how severe the problem has be- to shifting political sand? “Each top leader has his people come. But Huang Sheng’s $9 billion No. Word of mouth is another, as well there,” says Liao. These supporters haul – if true – is an eye-popper. as the tone of the coverage of the are deployed to open cases on their And reports of graft involving bil- main political contenders in the state bosses’ rivals. lions of renminbi are not especially newspapers. Take the strange fact that many of unusual. Last month, Xinhua re- Political campaigns can be reveal- the recent corruption cases involve ported that two local mafia chiefs ing too, such as the push announced deputies, such as vice governors. in the town of Benxi in Liaoning in mid-October by the 6th Party Huang Sheng, Li Chengyun and Li province had been arrested for Plenum to make China a “strong cul- Yuan are all deputies. The deputy “crazily accumulating by unfair tural nation”, which left many on- chief of the State Food and Drug Ad- means” at least Rmb2 billion of lookers wondering why it should ministration, Zhang Jingli, was also cash (the relevance here is that the figure so prominently at a major detained recently for about Rmb40 mafia often works hand-in-hand Party meeting. million of graft. with local officialdom). The answer, says He Fan, is that There’s a phrase for that in Chi- A July report by anti-corruption the gathering wasn’t really about nese: “Beat the dog and watch its researchers at the Chinese Academy culture at all. owner.” of Social Sciences (CASS) also sug- “Take the cultural policy deci- “I won’t insult you but I will kick gested that 4,000 Party or state of- sion,” he says.

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