The recent public fight between exiled tycoon Guo Wengui and Beijing paints a dark picture at the heart of power.
Collusion between business and the state is nothing new. It has underpinned the rise of capitalism from Europe to America where the term “robber barons” came to refer to the 19th-century tycoons who amassed tremendous wealth through such unscrupulous means as monopolising natural resources and exploiting political influences.
Those robber barons once ruled America and their legacies are still felt today through their names: Rockefeller, Morgan, Carnegie.
Some of China’s political and business elites have lifted the anarchic robber baron ways to another shocking level however, as evidenced by the intensifying public fight between Guo Wengui, an exiled tycoon, and the Chinese government.
Official media reports and a video confession from Ma Jian, a former spy chief, have shown how Ma, formerly a deputy minister at the Ministry of State Security, the Chinese equivalent of the CIA, and another top security official from Hebei ( 河北 ) province, used their formidable power to help Guo usurp wealth from his business rivals and take down his opponents. According to Ma’s confession, he employed the extensive resources of his ministry, which were normally reserved for anti-espionage activities, to help Guo. These included wiretapping, freezing assets, intimidating journalists, and using police and the court to have one of his opponents arrested and jailed. In return, Ma received bribes totalling about 60 million yuan (HK$67.7 million).
The revelations have provided more damning evidence that the robber baron dynamic in its worst form has taken root in China, where state power is being so bluntly and brazenly abused for wealth grabs.
Shocking as those revelations are, they are merely the latest in a slew of similar cases throughout the rise of China’s economy over the past three decades.
The first major case to hit the country occurred in Fujian ( 福建 ) in the late 1990s – perhaps China’s biggest smuggling case in modern history. It involved Lai Changxing and more than 50 billion yuan worth of goods. The ensuing investigation, personally supervised by the incorruptible then-premier Zhu Rongji ( 朱鎔基 ), revealed Lai had built a closely-knit network of official protection. This included the country’s former spy chief from the military, a deputy minister of public security in charge of the country’s anti-smuggling operations, and top provincial and city officials in charge of law enforcement and customs. All together, several hundred officials from the central government to the local authorities were implicated and most were jailed. Lai was tipped off and fled to Canada in 1999. He was exiled there until 2011 when he was extradited to China, where he was jailed for life after a court trial the following year.
Since then, shocking cases of collusion between unscrupulous businessmen and top national security officials involved in brazen wealth grabs have popped up in dismaying regularity. Here are a few more examples.
In 2008, the arrest of Huang Guangyu (黃光裕), a Chinese tycoon who owned the electronics retail giant Gome, led to the downfall of his powerful patron, Zheng Shaodong, then an assistant minister of public security, who reportedly helped Huang and others to launder massive amounts of money through gambling in Macau, and squash previous police investigations against Huang and his associates.
Little more than three years ago, the government’s investigation into Zhou Yongkang (周永康), China’s former security tsar, led to the arrest of Liu Han and Liu Wei, two brothers from Sichuan (四川), Zhou’s former power base. The brothers, owners of Sichuan’s largest private enterprise, with interests ranging from mining to real estate, were accused of murders, running casinos, and organised crime. Mainland media reports detailed how Liu Han secured political patronage from Zhou by promising to look after his son’s business activities. In 2015, the Liu brothers were executed.
Recapping these cases is very much necessary in the context of the exiled tycoon Guo’s spat with the government.
Guo reportedly said he was a victim of a political witch-hunt and denied the wrongdoings laid out by Ma, but made no bones about his close links with Ma in interviews with overseas media and in recent rambling Twitter posts.
But the allegations against Guo sound credible enough. They are part of a government campaign to discredit Guo. Last month, Beijing asked Interpol, the international police organisation, to issue a global request for Guo’s arrest. He is believed to be in the United States, but Washington does not have an extradition treaty with Beijing.
Meanwhile, Guo has threatened to drop “a nuclear bomb” of corruption allegations against top Chinese leaders and their family members.
The Chinese leadership is gearing up for the Communist Party’s 19th congress in the autumn when President Xi Jinping (習近平) expects to orchestrate a new leadership lineup for another five-year term.
There have been concerns that Guo’s allegations could disrupt the closed-door negotiations for the leadership changes as many vested interest groups, which have been greatly affected by the anti-corruption campaign, would try to exploit the situation.
Both Xi and Wang Qishan, the top graft-buster, have repeatedly vowed to continue the drive unabated, but the details about Guo’s dealings with Ma and other officials outlined in state media reports show the robber baron dynamic will be hard to eradicate unless genuine checks and balances are introduced.