Economy

Little Bo peep

No sign of Bo Xilai’s favourite businessman, as scandals roll on

Xu Ming w

Chin up? Xu Ming hasn’t been seen in public for months

Xu Ming, formerly the head of the conglomerate Dalian Shide, is an unlikely pick for someone personifying a theme in China. Why? Because he’s been out of the news completely since he disappeared from public view in March last year.

But Xu is significant as the most prominent businessman to fall from grace after the purge of Bo Xilai, the disgraced Party chief of Chongqing.

Xu’s case is also an interesting one in showing how closely the worlds of politics and business can become intertwined, as well as how widely the ripples of a corruption case – real or imagined – can reverberate.

When the dominoes started to fall in the Bo scandal, the impact was felt first in Dalian and Chongqing, the two cities in which he had built most of his reputation. But as the investigation widened to include Gu Kailai, Bo’s wife, and Bo Guagua, his youngest son, the ripples reached further afield. Bo junior was soon in hiding at Harvard where he was studying, for instance, while Gu’s involvement even dragged Bournemouth, a sleepy seaside town in England, into the spotlight.

There, the news was that the boss of a hot air balloon firm had refused to pad out his invoice so that Gu could move money surreptitiously out of China. Furious at his impertinence, she later threatened the man. “I know very powerful people in government, we can get you thrown in jail, you’ll never see the light of day,” she seethed.

But what happened to Xu Ming, the businessman? WiC first wrote about Xu long before his downfall in one of our Who’s Hu columns on prominent business people. The 21CN Business Herald reckons that Xu’s fortune was built on his relationship with Bo and especially an order from Bo that 175 residential areas in Dalian had to switch their window frames to a type made by a firm that Xu owned. He would use this opportunity to go on to become the world’s biggest maker of PVC metal windows and doors.

But the political ties that Xu once enjoyed have evaporated. Gu Kailai is in jail, found guilty of murdering Neil Heywood, a fixer who used to be a Bo family friend. Wang Lijun, the self-styled “Robocop” police chief from Chongqing (who started out as Bo’s enforcer but ended up betraying him) seems to have cut a deal in getting 15 years in jail. Bo himself has been hidden from wider view although there is speculation that he could be tried later this year (see WiC145 for a fuller dramatis personae of the Bo case). And Xu has disappeared, with some Hong Kong newspapers even claiming that he has died in prison.

Despite this (or perhaps because of it) Xu’s name has resurfaced repeatedly in a number of unsavoury cases to make the headlines.

In June last year, a prominent actress sued Hong Kong’s Apple Daily, for allegations that she had slept with Bo Xilai for money. The reports claimed she did so under arrangements made by Xu. The rumour quickly lost credibility, but still required unwelcome effort on her part to scotch it.

During Wang Lijun’s trial, Xu’s name came up again when the court was told that the former police chief had freed two detainees at his request.

Shortly afterwards, the sports pages brought news that Dalian Shide, formerly bankrolled by Xu and once China’s most successful football team, had gone bust now that its patron was no longer around.

Back in the financial pages, Xu was then linked to a scandal involving casinos in Macau that saw Yang Kun, vice president at Agricultural Bank, come under formal investigation.

Of course, the wider story is China’s struggle with corruption, a battle that is fought increasingly in the public glare. Helped by eagle-eyed netizens on China’s Twitter-equivalent weibo, a flood of new cases has come to light. In some of WiC’s favourites, public bosses have been exposed for wearing watches worth multiples of their salaries or going on hectic home-buying sprees. One man (later nicknamed ‘Grandpa House’, see WiC182) was caught forging identities to purchase almost 200 apartments.

Then there are the mistresses who seem to accompany every story of graft. Last year a university in Beijing published an academic paper suggesting that 95% of the officials exposed for corruption have been keeping girlfriends on the side. In a crowded field, special mention must go to Huang Sheng, a senior official from Shandong province, who is said to have conducted at least 45 illicit relationships before he was caught.

“Allegedly, Huang Sheng likes the ladies” is how the Yangcheng Evening News put it, with careful understatement.

Licentiousness has led others to ruin as well. In WiC180 we wrote about how a construction boss from Chongqing employed girls to blackmail 11 local bigwigs into giving him sweetheart deals by filming their trysts with hidden cameras (the reports last month were that 21 Party officials are now under investigation). The sting was discovered but kept quiet until graphic footage of a middle-aged mayor with a much younger woman finally got onto the internet. A seducer of six of the hapless men, the girl in question even became an unlikely heroine, receiving nominations as the Sina Weibo ‘person of the year 2012’. And guess what? Xu Ming’s name was again in the frame, with rumours that he had bought cheap land in a district run by of one of the officials caught.

Mindful of how pervasive the problem of corruption has become, new leader Xi Jinping has appointed one of the Politburo’s most respected figures, Wang Qishan, as his anti-corruption tsar. Wang is seen as a respected crisis manager, parachuted into problem situations throughout his career (see WiC176 for more). But corruption has undermined public confidence so severely that most Chinese will need to see a lot more evidence of a new approach before they believe that change is possible. “That’s unbelievable!” one weibo contributor scoffed when Huang Sheng (of 45-mistress fame) was finally sent for trial on the grounds of embezzling Rmb12 million (or less than $2 million). “A vice governor of a province who takes so little money, less than the price of two houses?”

Similar cynicism is fuelling accusations that a system for registering property ownership is being deliberately held back because officials are dragging their feet.

“If our mobile population [of migrant workers] can be properly surveyed, why not fixed assets?” a prominent economist told the Southern Metropolis Daily earlier this year. “The resistance lies in municipal officials who don’t want to declare their multiple property holdings.”

In the meantime, there have been signs of more arrests of high-profile people. The latest scalp is Liu Tienan, a deputy director at the powerful economic planning body, the National Development and Reform Commission. Apart from providing yet another salacious story – featuring an attempt to have a mistress killed – Liu’s case gives hope to those who believe that Wang is ratcheting up his campaign.

Indeed, it looks like the new regime may be trying to set a fresh course. But longtime China watchers fear that the problem of graft is so widespread that solving it may be an impossible task. Certainly the international press had a field day in the past year in revealing the fabulous wealth made by the relatives of many of the Party’s most powerful people.

Hence WiC also made the point that if the childless Wang cannot win the battle against corruption, perhaps no one can.


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