The Party: The Secret World of China's Communist Rulers (24 page)

For an authoritarian party with a history of turbulent transitions of power, the smooth handover from Jiang to Hu was immensely important. Each succession in the Soviet Union, from Lenin to Gorbachev, followed a death in office or a purge of the top leader. In China, Mao had nominated his own successor, the hapless Hua Guofeng, who in turn had been ousted by Deng Xiaoping. Deng declined to become party secretary himself but remained the paramount power behind the scenes, later overseeing the removal of two of his protégés, Hu Yaobang and Zhao Ziyang, the latter being then placed under house arrest in 1989 for the remainder of his life. Jiang himself was plucked out of Shanghai in secret as Zhao’s replacement, by Deng and the Party’s then reigning council of elders. ‘Hu’s transition finally took the Chinese government out of the Imperial age and ensured it was no longer a one-man show,’ said Zhou Ruijin, the former editor of Shanghai’s official party newspaper. ‘No one any longer regards the leaders as God.’

Jiang didn’t leave office without trailing his coat. He retained the position of civilian head of the army, as chairman of the Central Military Commission, for another twenty months, to the fury of many officials who saw his decision to stay on as vain and self-indulgent. The nine-member Standing Committee also remained stacked with his men, paid-up members of the Shanghai gang such as Huang Ju, who had worked with Jiang in the city in the eighties and then moved up to Beijing in his slipstream in the years that followed. Jiang’s most notorious crony, Jia Qinglin, was also promoted. But the presence of Shanghai loyalists on the Standing Committee was a lagging indicator, as the 2002 congress marked the high point of the group’s power in national politics.

Hu Jintao had bided his time carefully in the decade before his elevation to party secretary, adopting a scrupulously low profile and avoiding any hint of open disagreement with his rivals. The determination of the top ranks of the Party to avoid the kind of public splits that almost toppled them from power in 1989 had created pressure for the leadership group to work together. So too did the new collective style of leadership, making Hu as much first-among-equals as he was a leader who could dictate policy and personnel decisions at will. For all their co-operation, however, the underlying rivalry between the two men and their camps remained. Hu had been neither welcome nor needed in Shanghai while Jiang was in charge. He didn’t visit the city once between 2000 and July 2004, which was akin to a candidate in the US never visiting New York while campaigning for the presidency. His lengthy absence reflected political calculation as well. Hu made sure that when he did finally visit Shanghai it was firmly on his own terms, as party secretary.

As early as 2001, stories of the Shanghai real-estate market and the blatant profiteering by local officials had begun to make their way to Beijing, through anonymous letters, petitions and reports in the Chinese-language Hong Kong press, and in the English-language foreign media as well. The necessity for Hu to keep Jiang onside did not blind his followers to the opportunities the Shanghai scandal offered. ‘Corruption investigations are always used as leverage,’ a former jailed official told me. ‘They are an essential part of power struggles.’ Hu’s allies had taken note of how Shanghai’s dirt was spreading beyond its borders. Slowly, they began gathering the evidence they could use to clip the city’s wings. Over the next three years, Chen Liangyu, appointed as Shanghai’s new party secretary in October 2002, would succeed in making himself personally vulnerable as well. Instead of maintaining a low profile, Chen gave Beijing every excuse to take him on.

Chen had joined the People’s Liberation Army at seventeen, trained at one of its academies as an architect, before being demobilized to Shanghai, where he was assigned to work in a machine-tool factory. The son of a wealthy, Chicago-educated engineer, he did not join the Party until 1980. Until then, what the Chinese call his bad family background–in other words, his father’s US education–had disqualified Chen from entering politics. Chen’s privileged father had been singled out for struggle sessions in the Cultural Revolution, when he was attacked as an American spy and thrown out of his large family house near Nanjing Road. After 1949, the Red Guards raged, Chen Snr.’s house even had luxuries like a fridge, and was protected, colonial-style, by Indian guards!

Once Chen Jnr. was allowed into the Party, his self-confidence and bumptious personality quickly put him on the fast track. By the mid-eighties, he was in charge of the Retired Cadres Bureau, which offered him a chance to ingratiate himself with powerful party elders, whose patronage was invaluable. He then moved on to head one of Shanghai’s most prosperous districts along the riverfront. As head of the Huangpu district, his signature achievement was the spectacular lighting, every evening, of the strip of colonial buildings along the Bund, the view that still dazzles visitors to the city. With Jiang’s support, Chen was elevated to the city’s party committee, and then to party secretary. Mayor Xu, a popular potential rival, was eliminated from the contest in 2001, dispatched sideways to Beijing, without a single word of explanation.

Xu had joined the Party late in life as well, in his case because of his aversion to its ideological zealotry, and had never been fully trusted by the hardcore of the Shanghai gang. Open-minded and flexible, he was an articulate spokesman for the city, often taking calls from residents on talkback radio in an effort to sell Shanghai’s development plan. Chen, who spoke loutishly by comparison, was no ambassador for Shanghai. ‘Chen’s father is a very cultivated man,’ said one friend. ‘His son was not supposed to be so rough, but that is what the system does to you.’ Chen and his acolytes commanded the city in a way that Mayor Xu, with his weak party networks, never could. ‘Everything revolved around him,’ said one city official. ‘In a way, in Shanghai, he was even more powerful than Jiang Zemin and Huang Ju.’

Chen surrounded himself with loyal former underlings from Huangpu district, his own ‘Huangpu gang’, who went through a metamorphosis similar to that of their boss. Qin Yu, Chen’s political secretary, whose detention a few years later would signal Chen’s ultimate downfall, had once been a modest, meticulous academic at a city university. In office, his friends said, he developed an unrecognizable, self-important swagger that alienated his former associates. Among subordinates, a story circulated about the time Qin had dinner with a former teacher. In place of a once respectful relationship, Qin talked loudly on his mobile phone throughout the meal and ignored his dining companion, a grotesque breach of etiquette in a society which traditionally venerates its elders.

None of this might have mattered much, but for two events, a few years apart, that impacted on each other. One was Chen’s, and Shanghai’s, addiction to grand projects and fast growth at any cost, no matter what diktats they might have received on economic policy out of Beijing to tone their big-spending plans down. But before then, the Shanghai government got caught up in the backlash against a local real-estate tycoon, Zhou Zhengyi, one of the new local currency billionaires the city’s property market had spawned in the previous decade.

Zhou’s mistake was not that he was a rich, aggressive property developer. There were lots of them. Zhou’s downfall came because he got greedy and careless. Like other officials and businessmen and women who have fallen from grace in China, he committed the cardinal sin of embarrassing the system, and so the system destroyed him. Along the way, though, he became something even more dangerous, a political target. When the complaints about Zhou started to filter up to Beijing, they found many eager ears among Shanghai’s political rivals in the capital. ‘Without Zhou Zhengyi,’ said Xu, the restaurateur-turned-protester, ‘the result for us would have probably been much poorer.’

The son of a poor factory worker, Zhou Zhengyi began his rapid ascent into high society in 1995, using funds from a successful noodle stand business to buy shares in state enterprises issued to employees just before they were partially privatized in stock-market offerings. Zhou maintained his impeccable timing in his next venture, ploughing his profits into land in Shanghai when the private property market was beginning to take off. The businessman quickly gained a dangerously flashy high profile in both Shanghai and Hong Kong, where he acquired a Bentley, an actress girlfriend (and later wife) and a number of listed companies. He kept a London Metals Exchange computer on his desk, to indulge his hobby of trading commodities. ‘He was a young guy, supremely self-confident and a brilliant trader,’ said Rupert Hoogewerf, a Shanghai-based accountant who met him while compiling lists of wealthy Chinese. ‘All of his financial accounts were in his mind.’ Unlike many other entrepreneurs, Zhou was thrilled to appear on Hoogewerf’s rich list. At his peak, he was rated the eleventh richest man in China.

Weeks before his arrest, Zhou dined with Sir Christopher Hum, the then British Ambassador, along with other members of Shanghai’s emerging entrepreneurial class. Zhou was charmingly open about his
arriviste
status, complaining to his hosts that Chinese entrepreneurs had a more difficult time than their more experienced western counterparts in refining their lifestyles. When he first became rich, he said he knew nothing about ‘standards and quality’, and so decorated his bathroom in gold. Later, after realizing what bad taste this was, he said he stacked his house with brand-name products only. Zhou at that time had a son at boarding school in the UK. Asked which school, Zhou was stumped. Picking up his mobile phone, he called his wife in Hong Kong, who didn’t know either. He then called his son in the UK, who finally told him the name of the institution, Millfield, one of the most exclusive schools in Britain. Why had he chosen it, his dining companions asked. ‘Because it was the most expensive,’ he replied.

Zhou was much less charming in business. He had already narrowly survived a corruption investigation into one of China’s most famous bankers, Wang Xuebing. The investigation into Wang led to the Bank of China branch in Shanghai which had made a number of questionable loans to Zhou. The developer got through this episode unscathed, but hubris got the better of him in his greatest business coup, the right to develop an area in the centre of the city called the ‘East Eight Blocks’. The long stretch of land on Beijing West Road in Shanghai had been covered with
shikumen
, or ‘stone gate’ houses, a style of low-rise dwellings favoured during the colonial era. The residences were modelled on late nineteenth-century European terraced houses, with an elegant chinoiserie flourish in the stonework capping their entrances. They were less elegant seventy years later. The houses, like much of the city, had been neglected under communist rule. Properties built to house a single family might now include three or four, who had simply moved in during the chaos of the Cultural Revolution.

Zhou had beaten some of the region’s most experienced and best-capitalized property developers, including Hong Kong’s Li Ka-shing, one of the world’s richest men, to win the right to clear the blocks and then rebuild on what was a prime site in central Shanghai. Zhou’s deal with the Jing’an district government in 2002 to get the land was straightforward–he would pay little for a seventy-year lease on the land, in return for compensating and rehousing the residents together in the same area in his new development, thereby preserving a longstanding community. It wasn’t long before the thousands of families who lived in the East Eight Blocks realized that Zhou had no intention of keeping his side of the bargain. Far from looking after the first batch of about 2,160-odd households whose residences were demolished, Zhou dispatched them to apartments on the distant edge of the city and offered them paltry compensation in return.

When the furious residents began to organize, Shanghai-born Shen Ting received a call at her home in Hong Kong. Shen’s grandmother had bought a house on the block for three pieces of gold in the thirties. Shen herself had grown up in the house and her mother, now on the verge of being evicted, was still there. Shen, living in Hong Kong with her husband and two children, started travelling home to Shanghai to help her mother get a better deal. She petitioned the local housing bureau and tried to start legal proceedings, without success. She then started to look for a lawyer. The first twenty or so firms she approached sent her packing. ‘No lawyer will dare to fight a demolition and relocation case,’ one told her. ‘If I do it, I will lose my job,’ said another. Finally, a day after her mother was forcibly evicted in April 2003, Shen knocked on the door of Zheng Enchong.

Zheng could not have been more different from Zhou Zhengyi. He had the plain-living look of a suburban lawyer, always dressed in the same colourless suit and carrying a matching ragged briefcase as he strode intently from meeting to meeting. But if he was a grey figure, it was a kind of gunmetal grey, shown in the resolve and toughness with which he took up the cause of the residents. Zheng agreed to Shen’s request to represent 300 residents, including her mother, in a class action against the district. He also began advising Xu Haiming, the restaurateur-turned-activist. Almost immediately, city officials tried to scare him off. Soon after Zheng filed the class action, the city investigated his tax affairs. When they found nothing, they put pressure on his law firm, which forced him to resign for ‘taking on a resettlement case without consulting the partners’. Next, the authorities deliberately delayed the transfer of his licence to practise to a new firm. Zheng said the head of the local party body overseeing the registration of lawyers had told him, ‘90 per cent of the district chiefs in Shanghai’ had complained about him and he could have his licence back when he dropped the residents’ cases. Even then, he continued to advise the residents and draft documents for them. He knew work for the residents of the East Eight Blocks would only bring him trouble. ‘Shen Ting, I will get into serious trouble with this case, and you must save me,’ he told her. ‘Zhou Zhengyi is very probably the Lai Changxing of Shanghai.’ (Lai Changxing, in exile in Canada, was the mastermind of the $6 billion Xiamen smuggling racket.)