Chinese Corruption Crusade Causes New Factional Infighting

The plethora of regulations on party discipline introduced earlier this month by President Hu Jintao has much more to do with the Chinese Communist Party’s (CCP) perennial battle against corruption. While laying down stricter regulations against what the Chinese media calls “the exchange of power for money,” the anti-graft crusade represents an effort by Hu and allies such as Premier Wen Jiabao to rectify the aberrations–including a cavalier attitude toward graft and other crimes–under the leadership of former president Jiang Zemin. And the outcome of the clean government campaign has a direct bearing on the factional struggle between the Hu-Wen camp and the so-called Shanghai Faction led by Jiang.

At a mid-January national meeting on clean governance, the Central Commission for Disciplinary Inspection (CCDI), the CCP’s highest anti-corruption watchdog, announced eight new regulations for party cadres. For example, apart from being extra careful about conflict of interests, senior officials must keep a close watch on the business activities of their spouses and kids. Leaders at all levels must ensure the probity of their subordinates. The CCDI also stipulated that cadres, including top level officials, must “never be dictatorial, soft and lax [about discipline], or indulgent [toward their underlings].”

The new rules also institutionalized the rights of ordinary CCP members to blow the whistle on the assorted “economic crimes” committed by senior officials such as ministers and party secretaries. Moreover, the CCDI must within a reasonable period compile a report on every graft related complaint or petition filed by party members and other citizens. As Hu declared at the CCDI conclave: “We shall resolutely investigate and punish every single corrupt official that we have discovered.”

According to party sources, the CCDI dictums also included the unpublicized rule that even Politburo members–and similarly high ranking cadres and elders–are subject to systematic scrutiny and supervision. Thus, the twenty-four Politburo members, China’s de facto ruling council, have to submit a periodic report about matters including their financial holdings and those of family members. The top cadres must also give details regarding how well they have lived up to the CCP’s morality codes.

Many observers in Beijing and abroad are studying the new honest government provisions with cynicism. For example, operations within the Politburo and the CCDI remain highly secretive–and the leadership has hardly relaxed strictures forbidding the media from covering the monkey business of officials with vice ministerial ranking or above.

In spite of these shortcomings, there are reasons to expect that the Hu-Wen leadership might to some extent be more successful than its predecessors in cracking down on graft. First, like former premier Zhu Rongji, Hu and Wen are known as Mr. Cleans. Since taking over power in late 2002, the two have given new instructions to their sons and daughters–quite a few of whom are in business–to be extra scrupulous about conflicts of interest.

Moreover, Hu, with the help of ally and CCDI chief Wu Guanzheng, has served notice on quite a number of senior cadres that they have to watch their steps carefully–or else. Most of these venal officials also happen to be members of the rival Shanghai Faction. A well-placed Chinese source said that, for political reasons, it was unlikely Hu would directly confront several Politburo members believed to have been implicated in questionable business deals. For example, there has been innuendo about alleged links of Chairman of the Chinese People’s Political Consultative Conference Jia Qinglin to the smuggling and graft scandal in Fujian Province in the late 1990s, and also to more recent instances of real estate speculation in Beijing.

Likewise, Executive Vice Premier Huang Ju has been blamed for failing to at least stop a fraudulent series of stock market and real estate actions in Shanghai when he was major and party boss of the metropolis. Both Jia and Huang were cronies of ex-president Jiang, who was instrumental in promoting them to the Politburo Standing Committee in 2002.

“What the Hu-Wen team wants is a sword of Damocles hanging over the offending cadres, many of whom are affiliates of the Shanghai Faction,” said the Chinese source. “Hu and Wen may not use that sword, but it can be a potent weapon in factional infighting.”

This is most obvious regarding ex-president Jiang, who seems to exemplify what the CCDI has called qualities of being “dictatorial, soft and lax, and indulgent.” The 77-year-old kingpin of the Shanghai Faction is known for enjoying a luxurious lifestyle and for tolerating the peccadilloes of his subordinates. Jiang, who is still chairman of the Central Military Commission (CMC), was criticized a couple of years ago for importing a Boeing aircraft to be his personal Air Force One. The scheme broke down after it was discovered that plane was elaborately outfitted with bugs. At about the same time Jiang was also lambasted for reserving for himself an entire floor of a newly built CMC Headquarters Building. And since stepping down as party chief in late 2002, the influential elder has reportedly built for himself a posh house as well as a villa in the Shanghai area.

Several Jiang loyalists in the People’s Liberation Army (PLA)–particularly those with Shanghai Faction credentials–are the objects of speculation about dubious activities such as accepting gifts from private entrepreneurs, consorting with Taiwanese businessmen, and “selling” promotions and titles to well-heeled associates.

Diplomatic and PLA analysts say that underlings of Jiang suspected of having deviated from party codes include his former military aide-de-champ General Jia Tingâan as well as chief bodyguard General You Xigui. While General Jia was widely reported by the analysts to have been put under surveillance early last year, he is now off the hook. Earlier this month, the Jiang protŽgŽ was given the crucial slot of director of the CMC General Office.

And while Jiang has studiously tried to keep Hu, a CMC vice chairman since 1999, out of high level military decision making, the wily former president has managed to infiltrate his two sons into powerful PLA positions. Last year, Jiang Mianheng and Jiang Miankang were appointed to senior political commissar posts in the PLA General Equipment Department and the General Political Department. Since both Jiangs lack formal military training and experience, the moves have aroused the ill feelings of the top brass as well as the rank and file.

At least in the eyes of the Hu-Wen camp, Jiang’s worst failing over the past year was his interference in the investigation of Zhou Zhengyi, the “premier Shanghai tycoon” and stock-market and real-estate speculator who was detained last May. Zhou is known to have close personal and business ties with a large number of senior cadres and banking officials in the East China metropolis. The flamboyant tycoon is also said to be a good friend of Jiang’s elder son, Jiang Mianheng, once an active IT entrepreneur in Shanghai. Moreover, Zhou reportedly greased the palms of his cronies to obtain inside information about hot stocks as well as choice property development prospects.

Although Jiang had resigned from all party and state posts in late 2002, he lost no time in laying down instructions as to how the investigation into Zhou’s suspected crimes should be conducted. The ex-president pointed out last June that “for the sake of the party’s prestige” anti-graft agents should not cast their net too widely. What Jiang really meant was that senior members of the Shanghai Faction who might have been implicated in the Zhou case should be spared. As a result, the authorities announced in late summer that Zhou would be charged with only two relatively minor offenses: Manipulating stock prices and providing false information to securities regulatory agencies. No investigation will be launched into how he got so many sweetheart deals from Shanghai officials.

In the past year the CCDI has, under Hu’s patronage, been successful in nailing at least twelve ministerial level cadres for corruption. While the Hu-Wen team has been widely faulted for failing to promote political reform–or the lesser goal of “intra-party democracy”–the Fourth Generation leaders stand to reap substantial political capital if they can address the masses’ long standing complaints about rampant and ever worsening corruption in high places.

Willy Wo-Lap Lam, one of Asia’s best known journalists and authors, is a senior China analyst at CNN’s Asia-Pacific Office in Hong Kong.