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President Xi Jinping’s anti-corruption drive — known for its signature vow to target both ‘tigers’ (top-level officials) and ‘flies’ (low-level functionaries) — shows no sign of abating.  It may even be gathering momentum with the early April announcement that former Politburo Standing Committee member (and security portfolio chief) Zhou Yongkang will be standing trial in Tianjin on charges of bribery, abusing power and disclosing state secrets,  This announcement followed a slow-motion public ensnarement of Zhou as, for almost two years, a tightening noose methodically drew in business associates from Zhou’s time with China National Petroleum Corporation, provincial associates from his time as Party Secretary in Sichuan Province, associates from the security establishment and close family members.

As a member of the PSC for five years from 2007-2012, Zhou Yongkang was one of the seven most powerful people in China.  Not since the 1976 arrest and subsequent trial of Jiang Qing and the Gang of Four at the end of the Cultural Revolution has such a high-level Chinese official been brought to public trial by the Chinese Communist Party.

The beginning of Zhou Yongkang’s fall is associated with Chongqing, a provincial-level ‘city’ (see Direct Controlled Municipalities) in China’s far west immediately adjoining Sichuan Province and erstwhile power-base for Bo Xilai, Zhou’s protégé.  Until the death of British citizen Neil Heywood followed by the failed attempt by Bo’s police chief to seek refuge in the U.S. Consulate in Chengdu (capital of Sichuan Province) followed by the conviction of Bo’s wife on charges of ordering Heywood’s poisoning, it had appeared likely that Zhou would be able to get Bo onto the Standing Committee, thereby protecting his ‘retirement flank’ after stepping down.  Bo’s candidacy faltered under the weight of these events just as Xi Jinping was consolidating power and his new Standing Committee taking final shape.

xijinping_tiger-flies_adolfo-arranz (modified)

Now that formal charges against Zhou Yongkang have been announced, attention is swinging to Tianjin, another of China’s four Direct Controlled Municipalities (直辖市) and venue for Zhou’s upcoming trial.  It is perhaps not surprising that, for months now, the mood in Tianjin —  Philadelphia’s Sister City (since original establishment of “Friendship Cities” link in 1980) — has turned decidedly grim.  As reported by my friend Tim Weckesser and his fine team of professionals at Sino-Consulting International (SCI):

(begin extract from SCI Report)

The city of Tianjin, our main base in China, recently became a focus in the news media as it fell under scrutiny by Beijing’s powerful anti-graft campaign. This happened not only because of the sudden downfall of Tianjin’s long time police chief, Wu Changshun, based on corruption charges, but also because Tianjin courts have been chosen for the trial Zhou Yongkang, the highest ranking official ever to be charged with corruption. China’s state prosecutors formally charged Zhou, the country’s former top security czar, with accepting large bribes over a long period of time. At the height of his power, Zhou controlled China’s police, spy agencies, court systems, and prosecution offices all across the country. And he wasn’t shy about using these powerful assets to crush dissent in the name of “preserving social stability.”

 And now, to add to Tianjin’s notoriety, the city’s former mayor, Dai Xianglong, is “cooperating” in an “investigation”. From 1995 to 2002, before becoming Tianjin’s mayor, Dai was already well-known as the governor of China’s central bank, the People’s Bank of China (PBoC). The investigation, so far, is focused on the vast wealth amassed by Dai’s relatives, not on Dai himself. But this may well be just a tactical move with Dai himself as the real target. This new investigation comes on the heels of the 15 year prison term meted out to Nanjing’s former mayor, Ji Jianye, for corruption. The court found Ji guilty of accepting 11.3m yuan ($1.9m) in bribes between 1999 and 2013, when he was dismissed.

 President Xi Jinping’s anti-corruption campaign aims at trying to clean up China’s graft-riddled government at every level, with examples being set at the top. And so far, we have to say it is successful. In our experience, government officials as well as executives in state-owned enterprises (SOEs) are all keeping their heads down. No big banquets, no gifts – given or received – and strictly limited international travel are basically the norm, at least for now. The question is – will this nationwide campaign eventually help China’s economic development? We hope so. Here is some very recent China market news taken from a variety of public sources.

(end extract from SCI Report)

These then are the dangerous riptides which have been tugging at our PHL-TEDA EcoPartnership‘s Chinese partner, TEDA, since the end of 2014.   Given the fathoms-deep nature of Chinese political and legal process, many of these currents have been swirling in hidden depths while the surface continued to appear placid.  The U.S. side of our PHL-TEDA EcoPartnership has unmistakably felt the power of these currents, though.

While Xi Jinping’s anti-corruption drive remains immensely popular with the general public, there is a growing concern among many close observers of Chinese politics inside and outside China that these hidden forces can as easily become uncontrollable and destructive as they can be purging and restorative.  At the heart of all this is the crucial difference between ‘rule of law’ (with due process, standards of proof, checks and balances, etc) versus ‘rule by law’ (political power plays being managed under a thin veneer of legal process).  As Liz Economy wrote in an earlier post on this blog (see “Time for Xi to Reform his Reforms” in Feb. 6, 2015 post):

“Certainly, (Xi’s) anti-corruption campaign has hit its target—hundreds of thousands of them to be exact—and shows little sign of slowing down. He has cast a wide net, leaving little doubt that no sector of society—party, military, business, or other—is completely safe. Still, Xi remains vulnerable to accusations that the campaign is at least partially politically motivated, given that almost half of the senior-most officials arrested are tied in some way to his political opponents, and none of his Fujian or Zhejiang associates have been detained. He might want to bring some transparency to the process: uncertainty and fear of running afoul of some regulation or another are driving many officials to avoid making decisions or taking action.”   

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