The Party: The Secret World of China's Communist Rulers (34 page)

The final piece of the puzzle was the proprietary technology controlled by Chinalco and needed to refine the low-grade local bauxite into alumina. How Liu got hold of the technology he has not said. Other entrepreneurs trying to break into the business, however, simply stole it from under Chinalco’s nose. Just as it had with bauxite, Chinalco tried to ration the technology’s use to keep competitors out of the market and protect its monopoly. Through its control over the country’s two national aluminium research institutes in Liaoning and Guizhou provinces, Chinalco had the technology under wraps. The engineers at the institutes themselves, however, chafed at the restrictions on their work. In the market economy, the more they could licence their expertise, the larger the cash return for themselves. Frustrated, a number of the top engineers quit the two state institutes in 2003 and set up a new research centre in a university in Shenyang, taking the blueprints for refinery designs with them. Soon, they began to sell Chinalco’s proprietary designs to any entrepreneur who wanted to buy them. Over a short, twelve-month period, four of the engineers made about $5 million.

By the time the rogue engineers were caught, it was too late. The rival alumina refineries, including Liu’s project, were approved, or up and running. Their timing was perfect, catching the surge in Chinese demand for the refined product. The impact on Chinalco’s business was devastating. In the three years to 2008, Chinalco’s share of the domestic alumina market plunged from 98 per cent, a virtual monopoly, to less than half. The most astounding thing about this body-blow to one of the most powerful state companies in China was that it resulted directly from industrial espionage by local private companies. Five engineers from the former Chinalco’s institutes were convicted in a court in Guiyang of stealing commercial secrets. One received three years in jail but the other four avoided prison terms and paid only paltry fines.

Throughout the lengthy delays caused by Chinalco’s attempts to derail rival projects and hoard its technology, Liu’s greatest strength was his money. By the measure of China’s rich lists, Liu was worth about $3 billion in 2008, one of the wealthiest people in the country. He was able to finance the projects in conjunction with his partners without relying on bank finance. In Changzhou, by contrast, Dai was tied to the banks, which were susceptible to political pressure. Liu showed how a cashed-up, politically attuned entrepreneur can survive and prosper. Liu won support from some central government policy-makers who saw no value for the economy in the maintenance of Chinalco’s alumina monopoly. But Liu’s most important relationships were with the state outside Beijing, with the various provincial governments which wanted to promote economic development close to home. The local officials in the provinces had every incentive, and right, to seek out entrepreneurs like Liu. ‘We could satisfy their needs with our performance, taxation, environmental protection, and social image,’ said Liu. ‘Pardon me for being frank, but local officials, even corrupt ones, all need to have political achievements.’

In 2008, the Party invited a select group of thirty-five entrepreneurs to the Central Party School in Beijing, a gesture that took the courtship of private business to a new level. The initial invitation had gone out to thirty-four entrepreneurs. ‘The thirty-fifth one,’ said the businessman who provided this account to me, ‘begged to get in.’

The party school’s modern buildings, spread over large comfortable grounds near the Summer Palace on the fringes of the capital, sit at the pinnacle of a sprawling nationwide system of 2,800 full-time educational institutions for retraining officials. Many of these institutions simply provide stolid refresher courses for officials on party history and the latest campaign
du jour
from Beijing. Middling to minor entrepreneurs are occasionally invited, as part of the broader campaign to lure business inside the tent.

The invitation to the thirty-five entrepreneurs went further than anything the party school had offered before. They lived on campus and studied in intimate groups with up-and-coming officials from all over the country, the future leaders of China. In addition, they heard lectures from the Party’s most powerful figures. The entrepreneurs, mostly running tech and new media businesses, were all wealthy high-achievers in their own right. They included Yu Minhong, from New Oriental, a Nasdaq-listed English-teaching company; Feng Jun, from Aigo, in consumer electronics; and James Ding, Edward Tian’s old colleague from AsiaInfo. The chance to take part in the elite party school course was the equivalent in the US of being invited to do an executive MBA at Harvard alongside the next generation of US political leaders. In China, it was a networking opportunity without parallel.

The first thing many of the entrepreneurs noticed when they arrived at the party school were the fabulous facilities. Their rooms had large Lenovo televisions, with LCD screens and wireless internet. There was a 50-metre swimming pool, tennis and squash courts, and private trainers available for personal sessions in a well-fitted-out gym. Like teenagers thrown into boarding school, they quickly calibrated how they had been ranked against the officials, according to the day-to-day privileges they had been granted. Their meals in the canteen were free, whereas most of the officials had to pay 5 rmb each; and they had Colgate toothpaste in their rooms, instead of the local Heimei (‘Black Sister’) brand. ‘We did well,’ the entrepreneur said. ‘We were treated better than the officials who were at the head-of-county level.’ Each room had a plate affixed to the door, with the occupant’s name and region in the case of the officials, or their company and business for the entrepreneurs. Together with the name-tags they all wore, the course gave the entrepreneurs easy access to officials who might otherwise be hard to meet. ‘The business people selling pollution-control devices and railway communications equipment sealed some big deals while they were inside,’ the entrepreneur said.

The course started with a short overview of the Party’s sacred screeds, like ‘Mao Zedong Thought’ and ‘Deng Xiaoping Theory’, and so on. There were lengthy lectures on regional military conflicts; multilateral trade talks; and current events around the world. Like many people when they are exposed for the first time to skilled politicians on their home turf, many of the entrepreneurs were dazzled by how articulate the officials were, and their ability to balance competing views when they addressed a topic. By the end of the course, the entrepreneurs had gained a new respect for the officials and their mammoth jobs. Individually, the officials were often responsible for the welfare and provision of services to tens of millions of people. They worked investment banker hours, were forced to spend long periods away from their families and had to endure three to four banquets a night, with endless toasts. They were competitive too, performing for and against each other, and for the powerful captive audience at the school. ‘The competition among them was much more fierce than among us–we were amateurs,’ the entrepreneur said. ‘Once we were inside, we became great defenders of the system. It is kind of like the orphan principle. Once you are part of a family, you stand up for it.’

At the high point of the course, however, the entrepreneurs were firmly reminded they were more like valued foster-children than part of the family. When the president of the party school, Xi Jinping, Hu Jintao’s heir-apparent, delivered a speech to the group, copies of his address were distributed to the officials, so they could read it as they listened. The written speech, however, was withheld from the entrepreneurs. The Party’s official secrecy rules, they were told, specifically prohibited them from being given a copy. They were not even allowed to make notes. In the presence of such a lofty party figure, it was honour enough for the entrepreneurs to be allowed to sit in silence and listen.

The same kind of obedience is required by the Party in one of the areas that it most strives to control and where it least tolerates dissent–the teaching of history. The Party has adapted remarkably to the growth of the private sector, learning how to keep enough of a distance from entrepreneurs to allow them to thrive, while ensuring they do not have the chance to organize into a rival centre of power. But it is not enough for the Party to control government and business in China. To stay in power, the Party has long known it must control the story of China as well.

The Party and History

When the first editions of
Tombstone
landed in Hong Kong bookshops in mid-2008, copies had to be stacked up like old-fashioned telephone directories. The fat two-volume book was bound in thick plastic to hold it together as a single work and copies piled one on top of the other. The book’s intimidating presence in stores alone gave it a weight to match the gravity of its subject matter.

It had taken the author, Yang Jisheng, nearly two decades of painstaking research to compile a minutely chronicled, incontrovertible account of the death by starvation of 35 to 40 million Chinese over three years from 1958, a tragedy the Party has long sought to cover up. By Yang’s estimation, the birth rate was down by another 40 million or so babies in the same period, because women and their partners were too weak or too ill to conceive. His epic work was confirmation of what any serious student of world affairs outside of China already knew–that Mao Zedong’s utopian plans to accelerate the establishment of what he called ‘true communism’ had produced the worst man-made famine in recorded history, a disaster of Holocaust-like dimensions. Almost as remarkable as the book itself was how Yang, a journalist with Xinhua, the official state news agency, had managed to compile and write it.

For most of his career, Yang had faithfully done what Xinhua reporters do, writing stories for the public newswire which were then cleared through the propaganda system. Backstage, he performed a second covert function required of senior Xinhua journalists, providing secret internal reports to the Party itself. Yang had not pulled his punches in these on-the-ground dispatches, vital to Beijing’s efforts to monitor the work and behaviour of officials outside the capital. A number of his internal reports, about the military’s abuse of its powers, economic decline and official corruption, landed on the desks of senior leaders in Beijing, to the consternation of the party bosses in the regions where he was based.

Disillusioned with the Communist Party after the 1989 crackdown, Yang turned the tables on his former masters. Instead of spying on the regions for Beijing, he launched a covert mission against the Party itself. Using the privileges afforded to a senior Xinhua journalist, Yang was able to penetrate state archives around the country and uncover the most complete picture of the great famine that any researcher, foreign or local, had ever managed. The product of his labours,
Tombstone
, was one of the most searing indictments of the Party’s time in power ever published in Chinese by a local author resident in the mainland. More than that, the book was the consummate inside job, the product of a lengthy, clandestine co-operation with fellow party members determined to expose the lies told about the famine in China for decades.

Yang was helped by scores of collaborators within the system–demographers who had toiled quietly for years in government agencies to compile an accurate picture of the loss of life; local officials who for decades had hung on to the ghoulish records of the event in their districts; keepers of provincial archives who were happy to open their doors, with a nod and a wink, to a trusted comrade pretending to research the history of China’s grain production; and fellow journalists from Xinhua willing to use their local contacts so that the true story of the disaster could finally be told.

Tombstone
was published in two thick volumes for good reason. The book was dense with often numbing detail, almost as if Yang was trying to refute in advance any attempt by the authorities to discredit the work after its publication. ‘There was no war. No disease. The weather was quite normal. But 35 to 40 million people just disappeared. Incredible!’ Yang said. ‘This is a rare thing in history, but the authorities have somehow covered up such an important event, so that not many people know about this piece of history. People have passed the story down, but young people these days find it hard to believe.’

The central government had sent investigative teams to some localities during and after the famine to study the disaster, but to this day Beijing has not produced an official public report of the tragedy and its death toll. ‘We already knew that a large number of people had starved to death because we had read internal reports from local officials about it,’ said Wang Weizhi, a demographer who accumulated his own store of evidence about the mass loss of life. ‘But there was no major investigation by the centre.’ Even to ask the question itself was political dynamite, because of where the answer would lead–to Mao and his fellow leaders, and their direct responsibility for the deaths of tens of millions of their citizens.

Mao had ordered Chinese farms to be collectivized in the late fifties, and forced many once productive peasants who had grown grain to put their energy into building crude backyard blast furnaces instead. As part of this ‘Great Leap Forward’, Mao’s acolytes predicted food production would be doubled, or even tripled, in a few short years and steel production would rocket up to surpass output in advanced western countries. By this time, the brutal political controls reinforcing the emerging personality cult around Mao had started to take hold. Promoted as a ‘brilliant Marxist’ and ‘an outstanding thinker’, the chairman had taken on an infallible God-like aura.

The new rural communes began reporting huge fake harvests to meet Mao’s political imperative for record grain output. The lies were reinforced, if necessary, with state terror orchestrated by slavish officials who feared political death if they deviated from Mao’s diktats. Anyone who questioned the size of the harvests reported to Beijing was labelled a ‘rightist’. Many were beaten to death by armed militias deployed by local officials to enforce their production targets, at whatever cost. The food simply ran out in some areas. Even granaries that did have food were shut and their life-saving contents kept in storage. To have handed out the grain in these cases could perversely also have been labelled a political mistake, because the size of the stockpile contradicted the harvest reported to Beijing. Yu Dehong, an official at the time in Henan province, saw starving residents clustered outside the padlocked gates of the full local granaries. In their final moments before they expired, they shouted: ‘Communist Party! Chairman Mao, save us!’

It went without saying that
Tombstone
could not be released in China. No publisher dared touch the book, even though it sold briskly in Hong Kong. In Wuhan, a large city in central China, the office of the Committee of Comprehensive Management of Social Order put
Tombstone
on a list of ‘obscene, pornographic, violent and unhealthy books for children’, to be confiscated on sight. Otherwise, the Party killed
Tombstone
with silence, banning mention of it in the media, while refraining from launching any attention-grabbing attacks on the book itself.

The days when the Party automatically jails or even kills its critics are long gone. There are many more subtle, sophisticated ways for a media-savvy propaganda department to deal with problems. Troublemakers, as the Party likes to call its most dogged critics, as if they are naughty schoolchildren, can be removed from their jobs, silenced with quiet threats to their families, excluded from the media and shamed by being labelled unpatriotic. As a last resort, they can still be put in prison or forced into exile, where they invariably lose touch with the rhythms of local life and politics. The horrors of the ‘Great Leap Forward’ have been documented in the west and are familiar to any overseas student of recent Chinese history. The Party’s grip on the past in China ensures a very different story gets told at home, if it gets told at all. Yang survived the book’s publication and still lives at his Xinhua-sponsored home in Beijing. But by ignoring the book and its author, the Party hoped
Tombstone
would sink like a stone to the bottom of the ocean, to lie hidden there, alongside its many other uncomfortable secrets.

As the author Jasper Becker noted in his pioneering English-language account of the disaster in 1996, one of the most remarkable things about the great famine was that for twenty years no one was sure that it had even taken place. It wasn’t until US demographers looked at Chinese population statistics in the early to mid-eighties that the first authoritative estimates that 30 million people had died during the three-year period became widely known.

The cover-up of the famine has always begged the question of just how a government can hide the deaths of literally tens of millions of people. In 2003, the Chinese government tried to conceal the impact of a deadly virus, known as SARS, which had incubated in southern China, before spreading to large cities like Hong Kong and Beijing. It wasn’t until a Beijing military surgeon, who was also a senior party member, faxed the foreign media the correct numbers of people struck down by the virus in Beijing that Hu Jintao’s government owned up to the scale of the problem and took drastic measures to quarantine it. A similar scenario unfolded in the Sanlu dairy case in 2008. The cover-up by the company and the local party committee of the sale of contaminated milk powder and sick babies was not exposed until the New Zealand government belatedly blew the whistle on the scandal and a local journalist named the company, against the orders of the propaganda department.

The consensus in both cases was that the whistle-blowers had only hastened an inevitable disclosure, because the government would have been forced to acknowledge the truth in the end. After all, you cannot cover up widespread disease, death and grieving families for ever, so the argument goes, because they are spread through the community, not shut up, gagged and out of sight in prison, like some expendable dissident. Under totalitarian rule in Mao’s time, however, the government had the tools at its fingertips to enforce silence about even a mammoth famine, and to control any lingering debate about it. China had no independent media or civil society to press for information. The peasants who were the famine’s main victims were powerless and distant from the political power centres. The state statistical bureau had poor-quality data and was shut down during subsequent political campaigns. And, in any case, the Party controlled who researched what, and where they travelled. There were none of the satellite dishes and fax machines that kept the world in touch with Beijing during the demonstrations of 1989, let alone local and foreign reporters to use them.

In the twenty-first century of SARS and Sanlu, large-scale cover-ups on the scale the Party had managed with the famine are well nigh impossible. China is wired up through mobile phones and the internet, as well as being plugged into the global economy. Any food problems or restrictions on travel would show up in multiple markets outside the country in an instant, and blow back immediately into China itself. But even if it can no longer suppress news of important events, the Party still remains highly effective in keeping control of the way their narratives play out later.

The Party makes sure the great famine is officially referred to as a ‘difficult period lasting three years’, as though politics had nothing to do with it. (In the eighties and earlier, the official term was the ‘three years of natural disaster’.) It admits that the Cultural Revolution, which followed soon after, in 1966, and lasted for ten years, contained disastrous mistakes, but then twists the debate to its advantage by asserting that the Party is the only organ that can prevent such instability in the future. At a press conference in August 2009, Wang Yang, the Guangdong party secretary and Politburo member, chastised reporters who asked him about free speech in China, replying: ‘During the Cultural Revolution, there was freedom of speech and that was what drove the whole nation into chaos.’ Fresher memories of the heavily reported events of 1989 have been muddied by the Party’s unstinting management of the smallest pieces of news about the crackdown and the personalities involved. The cover-ups, obfuscations, half-truths, omissions and, when necessary, outright lies are buttressed by the Party’s strenuous efforts to eliminate competing narratives.

Examples of deep-rooted amnesia jump out from all over the country. The recently built Shanghai History Museum features lavish, and relatively balanced, re-creations of scenes of the city under foreign control. But the museum’s account of the period from about 1940 strangely peters out, without explanation. The communist takeover of the city in 1949 is not mentioned and the near half-century of upheaval that followed is entirely passed over. Once-cosmopolitan Shanghai almost descended into civil war in the 1960s and during 1970s the Cultural Revolution. The effect is strangely destabilizing when you reach the end of the exhibition, and then becomes almost comical when the realization dawns of what is missing. The museum’s account resumes in the nineties, with only a few desultory photographs of fireworks exploding over the newly bustling metropolis. The museum director, Pan Junxiang, was uncomfortable when asked why the story of Shanghai had such a gaping hole. ‘Many things should be left to history,’ he said, before looking away and changing the topic.

The Central Propaganda Department, as well as taking charge of the media, is the Party’s overarching enforcer in the history wars. Its sentries stand guard at all the key points of the debate: in schools, with the Education Ministry, to oversee textbooks; in think-tanks and universities, to monitor academic output; with the United Front department, to prepare what it calls ‘historically correct’ materials for the compatriots in Hong Kong and Taiwan; and throughout the media in all its forms, to scrutinize the output of everyone, from journalists to film directors. Like the organization department, the propaganda department has no listed phone number and no sign outside its headquarters in central Beijing, across the road from the main leadership compound adjacent to the Forbidden City. The instructions it issues to the media are secret. For a short while they were posted on a government intranet site for editors to consult, but even this was stopped, for security reasons. ‘They do not want to leave any evidence, for fear of being exposed,’ said Li Datong, an editor sacked by the department after he published a controversial article on a contested historical topic.