As jostling starts over the stock market float of Cinda Asset Management, details have come to light of two previously unknown stakeholders
With the giant state-owned fund house Cinda Asset Management planning to go public in Hong Kong this year, two behind-the-scenes investors in the company, including a private equity fund co-founded by the grandson of China’s former state head Jiang Zemin, have been pushed into the spotlight.
Three well-placed financial industry sources have told the South China Morning Post that the Carlyle Group and Boyu Capital both made indirect investments to allow them to own minority stakes in Cinda, which was established in 1999 as one of the mainland’s Big Four state debt clearers and is based in Beijing.
In March 2012, Cinda brought in three new so-called strategic investors – UBS, Citic Capital, an investment firm partly owned by China Investment Corp, the mainland’s US$300 billion sovereign wealth fund, and Standard Chartered – in a deal worth around US$1 billion, for a combined stake of less than 10 per cent in the business.
What surprised the financial community more was the discovery later that after that deal, Washington-based private equity firm the Carlyle Group, and Boyu Capital, a billion-dollar private equity firm based in Hong Kong and partly funded by Li Ka-shing, Asia’s richest man, each struck deals to become the ultimate holders of their own stakes in Cinda.
Two of the three sources familiar with the matter told the Post that UBS sold part of its holdings in Cinda, which the Swiss bank obtained through its direct investment in 2012, to Carlyle, one of the world’s largest private equity firms.
Boyu also made a sophisticated financial arrangement with Citic Capital to obtain part of the stake in Cinda originally held by Citic, sources said.
Financial details such as the size of the stakes in Cinda that Carlyle and Boyu indirectly own remain unclear. On the record, UBS, Standard Chartered, and Citic Capital remain as Cinda’s three new shareholders. The rest of Cinda is owned by the Chinese government.
One of the anonymous sources said: “It may be a bit controversial if you just publicly tell everyone that two offshore funds like Boyu and Carlyle made direct investments in a company like Cinda.
“That explains why they chose to make such investments off the record and through indirect channels.”
The indirect investments by Carlyle and Boyu in Cinda were kept secret for some time within a small group of relevant people.
However, earlier this year, when more than a dozen investment banks began to pitch to Cinda over its plan for a US$3 billion listing in Hong Kong, the behind-the-scenes roles of Carlyle and Boyu in Cinda were spotted by some bankers and the word started to spread in Hong Kong’s financial community.
Such behind-the-scenes investments have grown more popular in recent years in the mainland’s fast-growing private equity business, where government relations are often the key to deal-making.
In 2008, Carlyle failed to buy into a major Chinese machinery maker because it could not get government approval: Carlyle’s target was considered by Beijing at the time to be strategically important to the country’s national security.
Boyu said it would not comment on the firm’s specific investments. Carlyle did not reply to the Post’s inquiries.
Cinda is a legacy of Beijing’s efforts to clean up nation’s bad-loan crisis in the 1990s, and it also helped to improve the financial books of the Big Four state-owned banks on the mainland before they went public.
Given Cinda’s strategic importance to the mainland’s financial security, Beijing will usually not welcome foreign private equity firms buying into such state-owned firms.
Jiang Zhicheng, born in Shanghai and educated at Harvard, the grandson of former president Jiang Zemin, is a co-founding member of Boyu.
He started his career at Goldman Sachs as a junior investment banker and later teamed up with big names including Mary Ma, the former chief finance officer of the Chinese computer maker Lenovo, to set up Boyu.
Many sons and daughters of senior Chinese officials, known as “princelings”, studied abroad and later returned to China to launch their own investment firms.
Winston Wen, the son of the former premier Wen Jiabao, studied at the Northwestern University in the US and later returned to China to co-found New Horizon Capital.
Wen junior left the firm some years ago due partly to growing public concern over the conflict between his private equity job and his father’s high position in government.
A source close to the younger Jiang, now in his late 20s and based in Hong Kong, said he was “a very smart and nice young person. Unlike many other princelings, he has tried very hard to keep a low profile”.
Source: SCMP: “Exclusive: ‘Princeling’ firm holds secret stake in giant fund house Cinda”
Reuters shows its insight in its report yesterday titled “China’s graft-fighting Xi tells party future is on the line”.
When Hu Jintao took over the post as the general secretary of the Chinese Communist Party (CCP), he did not take over the power of the post from Jiang Zemin, but he could perform his functions with the support of Jiang Zemin, the core of the third generation of CCP collective leadership with the power of an emperor.
His lack of power was conspicuously reflected in his inability to deal with Bo Xilai in spite of his and Premier Wen Jiabao’s indignation at Bo’s restoration of Maoism.
Jiang did not render Hu and Wen his help as Bo’s father was to some extent Jiang’s mentor.
Bo rallied the large number of conservatives in CCP around him and became the head of a quite powerful conservative faction. Only when Jiang’s top assistant Wu Bangguo whom Jiang has put in charge of the development of China’s rule of law joined force with Qiao Shi’s legal faction, Jiang gave his consent to bring down Bo.
Hu and Wen certainly wanted to punish Bo harshly, but the powerful elders could not reach consensus on the issue. The conservative elders certainly wanted to protect Bo. So did Jiang in order to return favor to Bo’s father. However, if Bo is not punished harshly, with the support of the powerful conservative faction, he may return to power later. That will make it impossible for Xi Jinping to achieve his goal to run China his way when he takes over the post as the general secretary as Xi and Bo have entirely different aspirations.
Bo also knows that. That was why at the end of his lunch meeting with his Japanese friend Mr. Udagawa on May 13, 2012, he said, “I will return.”
In early September 2012, Xi went to Jiang Zemin to resign. That was the beginning of his mysterious absence for nearly two weeks.
Both Hu Jintao and Wen Jiabao had to say nothing about what had become of Xi as they did not know whether Xi’s resignation would be accepted by Jiang or not.
Moreover, they really did not know what Jiang’s response would be to Xi’s resignation. That is common phenomenon in China’s dynasties. Zhang Yuangan (1091-1170), a famous Chinese poet in Song Dynasty (960-1279), described that in his famous line: “Heaven is always too high to ask about its intention.” Here by the word “heaven”, the poet meant the emperor.
If Hu and Wen had revealed the information about Xi’s resign, but it turned out that Jiang did not accept Xi’s resignation and had persuaded Xi not to resign, they would have been in trouble. If they had said everything was all right with Xi but Xi did have resigned, they would also have been in trouble. They had better say nothing. As a result, Xi’s long absence became a mystery.
Xi told Jiang the danger of CCP’s collapse due to four problems. Reuter says with deep insight in its report, “Stability and survival remain the Communist Party’s watchwords as the world’s second-largest economy grapples with an upsurge of protests and social tensions over growing inequality, environmental degradation and graft.”
That means that there is the danger of a second Tiananmen Protests.
In addition, Xi told Jiang the lesson to be learnt from the collapse of the Soviet Communist Party. If the problems raised by him are not resolved, the CCP will certainly collapse due not only to the problems that caused Tiananmen Protests but also the problems that caused the collapse of the Soviet Communist Party.
Xi has his ways to resolve the problem but like Hu Jintao, he lacks the power to do what he wants to do when he takes over. Moreover, if Bo Xilai is not punished severely, it will be very difficult for him to overcome the obstacles set by Bo to what he will be doing.
As the Party is in great danger of collapse, Xi shall have the power he needs to perform the great responsibility of the general secretary in order to realize his dream to make the country prosperous and strong and the people happy. If it is impossible for him to realize his dream because he is not provided the power required for his job, he had better resign.
Being the youngest of the new generation of talented scholars with moral integrity, Xi, like all others, has studied hard Chinese history and philosophies. Both Jiang and other elders believe that Xi will be the right person able to maintain the CCP as a communist party that regards as CCP’s guiding ideology the Marxism developed by Jiang’s Three Represents and the Mencius teachings incorporated in Hu Jintao’s Scientific Outlook on Development.
During his absence, Xi has convinced not only Jiang but also other leaders. As a result, with powerful elders’ support, Xi has been able to take sweeping thundering actions to close all black jails, encourage net users and media to expose corrupt officials and even deprive senior military officers of some of their perks in his austerity campaigns.
Xi’s talks with the elders were as important as Longzhong dui (proposal made at Longzhong where Zhuge Liang made the proposal) described in Chen Shou’s “Chronicle of the Three Kingdoms” (see Chapter 7), which changed the course of Chinese history: Cao Cao’s attempt to unify China was defeated and China was soon divided into three kingdoms.
Now, Xi has succeeded in persuading the elders to grant him the power he needs to overcome the problems and prevent China from disintegrating like the Soviet Union due the collapse of its dominant party. China will remain a communist country with a mixed ideology of Marxism and Confucianism different from Western democracies. There can be democratic administration, decision-making and supervision, but no Western democratic election because according to Chinese constitution, no multiparty democracy is allowed.
However, the serious problem remains that there is no mechanism to restrict or remove the core of the collective leadership with the power of an emperor when he becomes a despot and brings chaos to China or launches a world war.
Full text of Reuters report can be found at Reuters website at:
Reuters publishes a report today titled “Analysis: From builders to managers: educating China’s leadership” that provides lots of facts about Chinese leaders being well educated now. However, as it does no know Jiang Zeming’s coup that has substituted intellectuals’ dominance of the party for uneducated conservatives’ described in my book “Tiananmen’s Tremendous Achievements”, it believes that leaders being well educated has resulted from China’s economic success instead of vice versa. Anyway, the report provides us with valuable information. The following is the full text of the report with my comments in parentheses):
Sun Zhengcai earned his PhD from China Agricultural University in 1997, experimenting with different fertilizers for crop rotation in northern China, according to his doctoral thesis.
For the world’s biggest grain grower and consumer, this type of research is crucial for improving yields. But it was an unlikely qualification for political leadership in China where engineers have traditionally held many of the top posts.
Sun represents one of the more far reaching changes in Chinese politics. Highly educated leaders in a broad range of disciplines are rising to the top of the ruling Communist Party, according to data from Connected China, a Reuters database application that tracks the connections and careers of China’s leaders.
Sun, 49, who joined the Politburo at November’s Communist Party Congress, is one of five PhD holders in a body in which all 25 members have at least a junior college education.
Some education experts explain the rise of this more highly educated leadership class as a product of the increasing complexity of China’s economy and society.
It also reflects an evolution in the Party. A generation of revolutionary soldiers gave way to technocratic engineers who guided the following period of industrialization. The engineers are now handing over to leaders better qualified to run the world’s second-biggest economy.
“As the society matures, it is always beneficial to have a leadership with diverse backgrounds,” said Gong Peng, a Professor at TsinghuaUniversity’s Center for Earth System Science. “They bring different thinking and skills to the administration.”
The data from Connected China shows far more Politburo members now hold PhDs and graduate degrees than earlier leadership generations.
It also shows that education is not necessarily the only path to power: loyalties forged during political posts in the provinces, and family ties to former leaders also matter a great deal.
DR XI AND DR LI (Both of them are the youngest of the new generation of talented scholars with moral integrity emerged during the Cultural Revolution. In my book, I describe them as the scholars who called themselves Eclectics and who studied all kinds of knowledge through self-study. Note: Neither Xi nor Li has received normal secondary-school education due to the Cultural Revolution. China’s poor current school education system cannot turn out such talented intellectuals with moral integrity. That will be the most serious problem for China as there will be few such talented intellectuals to succeed Xi and Li.–Chan Kai Yee, author of “Tiananmen’s Tremendous Achievements”)
The other PhD holders in the current Politburo are party leader and incoming President Xi Jinping, who studied China’s rural markets at TsinghuaUniversity. Li Keqiang, expected to become Premier after the National People’s Congress in March, has a PhD in economics from Peking University. Liu Yandong studied China’s political development at Jilin University, and fellow Politburo member Li Yuanchao explored socialist art and culture in his thesis at the Central Party School.
The current Politburo also features nine members with masters degrees and three with other higher degrees. That stands in stark contrast with members of the 14th Politburo formed in 1992. Only Hu Jintao and Wen Jiabao, who became China’s top leadership duo a decade later, had graduate degrees in that group.
The change in the breadth of education has also been dramatic. Ten years ago, 15 of the 20 college-educated members of the Politburo were trained in engineering or the physical sciences. At the very top of China’s hierarchy, engineers were even more heavily represented.
In the nine-member Politburo Standing Committee appointed in 2002, eight members of the party’s top decision-making body were engineers and one was a geologist. Of these, four were engineering graduates of Tsinghua.
The current Politburo has only four engineers. They are outnumbered by colleagues with training in economics, finance and business management. It also shows a sharp increase in members educated in law, humanities and social sciences. The seven-member Standing Committee has only two engineers; Xi Jinping, who has an undergraduate degree in chemical engineering and Yu Zhengsheng who worked in missile guidance.
For some Chinese educators, the presence of fewer engineers at the top is a welcome development after decades in which technocratic leaders, often Soviet trained, dominated decision-making in Beijing.
“Engineers who do not learn about management may not be good managers and eventually good administrators,” says Tsinghua’s Gong. “I think it will improve the governing quality in China.”
WORLDY LEADERS (In Chinese history, most of the best emperors lived among common people when they were young. They became great as they understood the people’ misery and aspirations from theire personal experience. That is the case with Jiang Zemin, Hu Jintao, and especially with Xi Jinping. It is why they are so worldly. You will be amazed by Xi’s good reign, but he will have the problem of finding a good successor.)
In the early 1980s, then paramount leader Deng Xiaoping directed the party to foster a generation of better educated cadres who could accelerate China’s market reforms.
China’s subsequent rise as a major trading nation and growing military power is also increasing pressure on the party to select better educated and more worldly leaders, political analysts and education experts say.
“Because the country is changing and the world is changing, it requires a more sophisticated understanding of the issues,” says Yu Maochun, an expert on Chinese politics and a professor at the Annapolis, Maryland-based United States Naval Academy.
Some experts question whether academic qualifications are as important as loyalty and family ties in a political system where many senior leaders, including Xi Jinping, are “princelings”, children of senior party veterans.
EXPERIENCE IN PROVINCES (refer to the system of Yao and Shun advocated by China’s new generation of talented scholars with moral integrity in their secret meeting that is described in Chapter 3 of my book. China’s political system now is to some extent a repetition of that system–Chan Kai Yee, author of “Tiananmen’s Tremendous Achievements.)
Data from Connected China shows an increasing emphasis on provincial-level party leadership experience for Politburo members.
In 1992, only nine of 23 Politburo members served as a provincial or municipal-level party chief. In the current Politburo, 19 of the 25 have held or currently hold a provincial post at this level, including Sun Zhengcai who is party secretary in Chongqing.
Many of the engineers who held top posts, including President Hu Jintao, spent long periods working in unrelated fields.
“They are not really engineers in the Western sense,” says Yu. “They are really political hacks. Their career paths were not devoted to science but concentrated on the political system.”
Despite the increasing diversity of education at the upper levels of the party, one feature of China’s leadership remains virtually unchanged since the revolutionary period – the domination of men.
Only two women are in the current Politburo, Liu Yandong and Sun Chunlan, and none are in the Politburo Standing Committee.
Source: Reuters: “Analysis: From builders to managers: educating China’s leadership”
In 2001, Gordon Chang predicted in his book “The Coming Collapse of China” that China would collapse within ten years. Ten years later China did not collapse, but instead became even more prosperous.
I said in the first edition (writing of the second edition will soon finish) of my book “Tiananmen’s Tremendous Achievements”, “Gordon Chang probed into the fundamentals and had contacts with Chinese people in China for years. His approach was correct and the problems he pointed out in his book were real serious ones very difficult to resolve. He did have a whole picture of the predicament Chinese leaders were in. In addition, no one had ever tried to resolve such problems; therefore, there were no lessons or experience that Chinese leaders could learn from. However, there is a common missing link in all Westerners’ study of China: Due to the Cultural Revolution, all talented scholars with moral integration studied hard and wanted to become politicians to establish scholars’ rule and save the country. China had a large number of talented politicians with moral integrity far superior to those in other countries. Western China-watchers including Gordon Chang failed in their prediction because they underestimated Chinese scholars’ talents.”
I point out in the first edition of my book that Xi Jinping is among the youngest of the new generation of talented scholars that emerged during the Cultural Revolution. In the second edition of my book, I describe how he convinced the powerful elders to give him full support by pointing out to them three serious problems other than the rampant corruption that may cause the party to collapse and the lesson that the party shall learn from the collapse of the Soviet Communist Party.
Xi is wise to be well aware of the indispensability of purge to resolve all the problems and ensure no repetition of the collapse of the Soviet Communist Party. I believe he also knows it is a very difficult job.
SCMP proves that it knows China well by carrying a report on Xi’s purge yesterday and a commentary today titled “Xi Jinping’s campaign to purge Communist Party ‘won’t be easy’”.
I recommended to my readers SCMP’s report in my post yesterday titled “China: Xi Jinping’s Purge Begins in Guangdong”.
In my post yesterday, I said, “A purge is the best way to consolidate a new leader’s power and strike awe among corrupt officials”.
In the first edition of my book, I sum up two formulae from Chinese history:
Wise leader + talented scholars = superpower
Despot + mob = chaos
Xi’s predecessor Hu Jintao has proved that he is wise by putting forth the Scientific Outlook on Development and achieving tremendous economic growth. However, Hu has not obtained the assistance of enough talented scholars to implement his Scientific Outlook on Development. He pointed out the problem of pollution in his Scientific Outlook, but the officials under him have paid no attention to his instruction. As a result he left Xi the problem of very serious pollution.
Xi has proved that he is much wiser than Hu. Hu knew well the problem in China’s letters and calls system, a mechanism to receive and handle people’s petitions. Therefore, a national conference of the officials in charge of letters and calls was held in mid July 2012. Politburo Standing Committee (PSC) member Zhou Yongkang gave a speech stressing the importance of the work of letters and calls and top PSC leaders Hu Jintao, Wen Jiabao, Xi Jinping and Li Keqiang personally attended the conference to show the importance they attached to the work. However, there had been no change in interception, illegal detention, repatriation and torture of petitioners or decrease in mass protests.
Less than three weeks after Xi took over, on December 4, Xi took sweeping thundering actions to close all the black jails set up by local government in Beijing for detention of the petitioners they had rounded up and released all the petitioners detained there. One more week later, a conference of the officials in charge of letters and calls was held to ban interception of petitioners and order local officials to treat petitioners as their family members, the problems reflected by petitioners as their family affairs, and the work to deal with petitions as their family work.
Xi is obviously skillful in mobilizing related officials to take fast and effective actions. However, will he able to purge his huge party of 10 million of its 80 million members?
SCMP cited some analysts’ views on the difficulty to purge the party of unqualified members. It says, “Drive to get rid of ‘unqualified members’ could be turned into a political vendetta, analysts warn, adding the cull should start at the top”.
I believe that the key is whether Xi is able to find and make good use of talent assistants.
When Jiang Zemin took over the reigns, he also faced lots of seemingly insurmountable difficulties, such as the conservatives’ obstinate resistance to the reform and opening up, state-owned enterprises’ huge debts and losses, state banks being on the verge of bankruptcy, etc. But he was able to find and employ talented assistants such as Zhu Rongji, Wu Bangguo, Zeng Qihong, Li Lanqing, Wang Huning, etc. to help him overcome all the difficulties.
Xi has proved himself a wise leader by the initial success of his sweeping thundering actions. I point out in the second edition of my book the sign that Jiang Zemin has been satisfied with Xi’s initial successes and decided to choose Xi as the successor to him as the core of the party leadership.
Obviously, the beginning of the purge may strike awe and give rise to some restraints among corrupt officials. However, we still have to wait and see whether Xi also has the ability to find and employ talented assistants. The tasks Xi faces, including the purge, are not what he can fulfill alone. China is such a vast country with an enormous population of 1.3 billion people. The party is so huge as to have 80 million members. Xi needs quite a few talented assistants, but so far we have not seen any of them.
For details of SCMP’s article today, please visit SCMP website at:
Reblog of Amy Li’s blog at SCMP
The centuries-old Chinese saying “noble character and sterling integrity” (Gao Feng Liang Jie) got a new meaning when it was used on China’s Sina Weibo in reference to former president Jiang Zemin. Only this time the expression was used sarcastically.
This occurred after Jiang, who stepped down as president over 10 years ago, requested the central committee put his name behind current members of the Communist Party’s Politburo Standing Committee, along with other “senior comrades”, the Xinhua News Agency reported on Wednesday. Many in China are surprised Jiang would do this after being out of office for so long.
The Xinhua report surfaced after journalists covering the funeral service of General Yang Baibing on Tuesday discovered the wreath bearing Jiang’s name appearing behind the name of President Hu Jintao, party general secretary Xi Jinping and current members of the Politburo Standing Committee.
Xinhua explaining Jiang’s request said: “This reflects the Communist Party member’s noble character and sterling integrity.”
The state news agency’s sycophantic rhetoric was quickly mocked on China’s twitter-like service Sina Weibo, where the phrase “noble character and sterling integrity” has gone viral in hundreds of parody messages posted by netizens.
For instance, bloggers used the expression with a photo of US President Barack Obama at a meeting with colleagues.
“President Obama has requested that he sit in the back row in future meetings. This reflects the Democrat Party member’s noble character and sterling integrity, ” read one cynical post.
But another blogger, in reference to Jiang, asked: “Would Obama even appear on an official list 10 years after he retired?”.
Listing behind Politburo Standing Committee members at funeral may be a sign that former head of state is heading for full retirement
For the first time, the name of former president Jiang Zemin has been officially placed behind those of members of the Communist Party’s current Politburo Standing Committee, prompting speculation that he is set to withdraw from the political stage.
At the funeral service for General Yang Baibing , who died at the age of 93 in Beijing last Tuesday, the wreath placed in Jiang’s name came behind that of President Hu Jintao , party general secretary Xi Jinping and the other members of the Politburo Standing Committee, China Central Television reported on its main 7pm newscast yesterday.
It was the first time that Jiang’s name had been placed behind that of Politburo Standing Committee members other than the party’s general secretary since he retired as general secretary at the party’s 16th national congress in 2002 and stood down from his last official post as chairman of the party’s Central Military Commission in late 2004.
Despite speculation that Jiang would fully retire after the closing of the party’s 18th national congress in mid-November, Jiang’s name appeared behind Hu and Xi but ahead of National People’s Congress chairman Wu Bangguo and Premier Wen Jiabao at the funeral of Bishop Ding Guangxun on November 27, Xinhua reported earlier.
Even after he stepped down as CMC chairman, Jiang was still ranked No2, behind only Hu, and wielded strong political influence within the party.
Jiang, who is 86 years old, was believed to have played a key role in the framing of the new leadership line-up for the party’s 18th national congress, succeeding in getting allies including Zhang Dejiang , Yu Zhengsheng and Zhang Gaoli on to the Politburo Standing Committee.
With the latest ranking suggesting that Jiang will finally retire from politics, attention has now moved on to whether Hu will follow suit and give up his entitlement to the No 2 rank after his full retirement in March from his last post as state president. Hu broke the precedent established by Jiang when he stepped down from the helm of both the party and the CMC in November.
Beijing-based independent political analyst Chen Ziming said he believed Hu was unlikely to be ranked No2 after his retirement, making way for Xi to rule the country. Chen also said, however, that time would tell whether Jiang was willing to give up his political influence.
“Jiang can still exert his power, even if he has no ranking in the top leadership,” Chen said.
Hong Kong-based veteran China watcher Johnny Lau Yui-siu said the ranking did not necessarily mean that Jiang would play no role in Chinese politics from now on.
“On the contrary, I think that his political influence will extend for quite a while at least,” Lau said.
Source: SCMP “Jiang Zemin slips down a notch in Beijing’s order of seniority”
China’s official news agency Xinhua says that Li Yali, TaiyuanCity’s police chief and deputy director of Shanxi provincial Department of Public Security has his job suspended and himself subjected to investigation for covering up his son’s drink-driving and assault on a traffic police officer.
According to various media, when Li’s son Li Zhengyuan was driving a cross-country car at dawn on October 13, he was stopped by Xia Kun, a Taiyuan traffic police officer as Li was suspected of violating some traffic rules.
Xia told Li to produce his driving license, but Li produced his public security bureau entry card instead and told Xia that he had forgotten to bring the license with him and that he was rushing to a train station.
Xia insisted that Li should leave his license there before he was allowed to go to the station. Li was upset and began to call Xia names and beat Xia up. Xia asked Li, “Why do you beat up a police officer since you are police yourself?” Li yelled, “Yes, I am beating you up. Why can’t I do that?”
Li was then found to be drink-driving after a blood-alcohol test. In addition, Xia found some problem with the license plate of the car Li was driving. Xia detained the car and Li’s license.
Something unusual happened then. According to normal procedures, Li’s blood sample shall be taken immediately afterwards, but the police cadres there stopped the procedure. The video record Xia has taken of the entire process of law enforcement was also taken away. Xia leant later that Li, also a police officer, was the son of Li Yali, deputy director of Shanxi provincial Department of Public Security and Chief of Taiyuan City Bureau of Public Security,
Xia felt suppressed in his chest after the beating and went to hospital. The doctor there found soft tissue injury in his chest. Xia reported it to his boss, but was told “I am unable to deal with that as it is deputy director’s son”. The police team Xia was in fabricated a set of false evidence to deal with investigation from above.
Xia could not but be resigned to his bad luck and remain silent. However, that was not the end of his misfortune.
On October 28, a video showing the assault was uploaded on major mainland internet portals and triggered vehement criticism from internet users. The party’s Discipline Inspection Commission and the Ministry of Public Security sent people to investigate in Taiyuan. Xia had to tell the investigators the truth.
As a result, he was isolated in his work and his mother received a threatening message asking her whether she wanted to go to jail. Li Zhengyuan told his colleague to pass Xia the message that he want to settle the matter with money and ask Xia to fix an amount.
The large number of cases of corruption that the party has been dealing with over the past 2 weeks shows that the new leadership has the intention to deal harsh blows at corrupt officials. To succeed, it needs the support of powerful elders especially Jiang Zemin, the core of the collective leadership. It will be a hard battle not easy to win.
Sources: Singtao Daily, Xinhua, SCMP
SCMP reports: “New head of party’s discipline commission is a troubleshooter who gets results, analysts say
“In Chinese politics, it is believed that a leader’s personality and wisdom can help change the course of history, but that such qualities are not always enough.
“Thus many believe the appointment of Wang Qishan to head the Communist Party’s Central Commission for Discipline Inspection could usher in some significant changes. Corruption is widely seen as having worsened over the past decade, becoming a main source of disaffection with the ruling party.
“Wang’s personality and wisdom could be why the party leadership under new general secretary Xi Jinping chose to assign the vice-premier the task of handling internal party discipline, instead of giving the reformist leader a key economic portfolio.
“‘I think it is possible that the new leaders want one of their problem-solvers to tackle one of the most difficult and stubborn issues,’ said Gu Su, a law professor at Nanjing University.
“Analysts said Wang’s no-nonsense working style, his decisive manner and his problem-solving skills would help the party leadership bolster its disciplinary apparatus in the wake of the scandal surrounding former Chongqing party boss Bo Xilai.”
“Analysts said Wang had the confidence to take action thanks to his strong connections and his ‘princeling’ background.
“His father was a Shanxi party chief and his father-in-law, the late Yao Yilin, was a vice-premier. Wang is also known to be close to former president Jiang Zemin and former premier Zhu Rongji. Analysts said Wang would also be backed by Xi, another princeling.”
“But academics also warned that the fight against graft would go nowhere without fundamental reform of the authoritarian, one-party system, because relying on the anti-corruption commission in a non-transparent process would never work.”
For details, please visit SCMP website at:
China’s Reserve of Talented Leaders: Wang Qishan dated September 5
The Mystery of Top-Level Succession in China dated February 15
Reuters exclusive: “Retired leaders in China’s Communist Party used a last-minute straw poll to block two pro-reform candidates from joining the policymaking standing committee, including one who had alienated party elders, sources with ties to the leadership said.
“Two sources said the influential retirees flexed their muscles in landmark informal polls taken before last week’s 18th party congress, where the seven–member standing committee, the apex of China’s power structure, was unveiled.
“The clout of the elder statesmen, who include former party chief Jiang Zemin and ex-parliament head Li Peng, underscores the obstacles to even limited reform within senior levels of the party, which has held continuous power since 1949.
“The informal polls are the first time the party has flirted with ‘intra-party democracy’ to settle factional fighting over the line-up of the standing committee. It held informal polls in 2007 to decide the larger Politburo.
“Two of the candidates voted out of the standing committee were widely viewed as reformers: Wang Yang, the party chief of export powerhouse Guangdong province in the south, and Li Yuanchao, minister of the party’s organization or personnel department.
“Neither Wang nor Li could be reached for comment. The party spokesman’s office declined immediate comment.
“Shedding light on the opaque backroom process, the two sources said votes on the new standing committee were taken among the outgoing 24 members of the Politburo and more than 10 party elders, who had retired from senior posts.
“The group held more than 10 rounds of deliberations, including at least two informal polls, over several months at the military-run Jingxi hotel in Beijing and other venues, said the sources, who spoke on condition of anonymity because of the sensitivity of the subject.”
“Elders wielded considerable influence over the process and forced a second poll in October to push out Li Yuanchao, the sources said.
“Eight people were in the running for the five slots on the standing committee beneath Xi Jinping, named party chief, and Li Keqiang, who will be the next premier.
“‘Wang Yang was ousted to avoid Bo supporters creating trouble,’ one of the two sources said.”
“The sources said Li was dumped because he alienated some elders by promoting too many of outgoing President Hu Jintao’s allies in his capacity as head of the party’s personnel department and by ignoring recommendations by retirees keen to elevate their own men.”
“State news agency Xinhua said last week that senior party cadres met in Beijing in May and ‘democratically recommended’ standing committee and Politburo members. It did not reveal the results.”
“Leadership changes in China are thrashed out in advance through horse-trading between party elders and retiring leaders anxious to preserve clout and protect family interests, but must also go through a choreographed selection process at the congress.
“In previous congresses, held every five years, there was no competitive voting: the number of candidates on the ballot matched the number of seats available in the Politburo and on the standing committee.
“The straw polls hardly signal a desire for democratic political reform. But they did provide a vehicle through which some of the infighting between factions could be resolved.”
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SCMP reports from Beijing: “New tsars named to oversee personnel matters and public security as political shake-up filters through the party and government ranks
“Beijing has announced new appointments to the top party posts overseeing personnel matters and public security, marking the start of a sweeping reshuffle of senior party and government officials after the unveiling of the party’s new leadership line-up last week.
“In the first top-level reshuffle since the Communist Party’s 18th national congress, which ushered in a new generation of party leaders, Shaanxi party chief Zhao Leji, 55, a rising star who was elevated to the Politburo last week, has replaced Li Yuanchao as head of the party’s powerful Organisation Department.
“Yesterday’s brief Xinhua dispatch did not identify Li’s new portfolio. Li, 62, a protégé of the soon-to-retire President Hu Jintao, lost his bid for a seat on the party’s Politburo Standing Committee, the apex of power. But he has been widely tipped to instead become vice-president in March. In that post he is likely to oversee Hong Kong and Macau affairs.
“In another widely expected announcement, public security minister Meng Jianzhu, 65, became the country’s new security tsar, taking over from the former Politburo Standing Committee member Zhou Yongkang .
“Analysts said Zhou’s replacement by Meng, a newcomer to the 25-strong Politburo, effectively signalled the downgrading of the party’s Political and Legal Affairs Commission, which oversees the mainland’s judiciary, prosecutors and police, and had become extremely powerful under Zhou.”
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