“He did not fit any of the categories for the United States giving him asylum. He had a record of corruption, of thuggishness, brutality… he was trying to somehow get his way to a place of safety,” is what Hillary Clinton said to the Chatham House think tank in London four years ago.
The former US secretary of state was referring to the visit to the US consulate in Chengdu by Wang Lijun – the security chief and right-hand man of ex-Chongqing boss Bo Xilai – who turned up unexpectedly there in February 2012. Wang brought with him priceless intelligence about China’s political elite, including a House of Cards-style story about the murder of a British expat by Bo’s wife. But Clinton decided against granting him political refuge and Wang was taken into Chinese custody and subsequently sentenced to 15 years in jail (see WiC166).
Few details have been made public about what Wang told the Americans during his 33-hour stay at the consulate. But his brief defection vanquished any chances of Bo trumping fellow princeling Xi Jinping as China’s new leader at the 18th Party Congress a few months later.
As ever, the political horse-trading in the run-up to the Congress was hidden from public view. But Wang’s arrest helped to throw a little more light on the infighting at the top of Chinese politics, with revelations that included the wiretapping of former President Hu Jintao (see WiC148) and confirmation of the Ferrari crash that killed the son of another senior figure (see WiC207).
China’s leaders surely hope to avoid such a situation again. But as cadres gear up for the 19th Party Congress – where several new figures could enter the powerful Politburo Standing Committee this autumn – international newspapers have been titillated with tales from the top once more. This particular can of worms has been opened by Guo Wengui, a controversial property tycoon with close ties to one of the country’s senior spymasters. Observers are now second-guessing whether Guo’s allegations will send out shockwaves of the same magnitude as Wang Lijun’s five years ago.
Who is Guo Wengui?
Also going by the name of Miles Kwok, Guo is the founder of Beijing-based developer Zenith Holdings. According to Caixin Weekly, the 50 year-old was a close ally of Ma Jian, the former vice minister of state security, who was slapped with anti-corruption charges in 2014. Having spent more than 30 years on counter-espionage operations, Ma is the highest-ranking national security officer to be caught and charged with graft.
Caixin Weekly has reported that Ma helped Guo topple Beijing’s deputy major Liu Zhihua with a compromising sex tape in 2006, clearing the way for him to take control of a prime parcel of land on which he developed the iconic Pangu Plaza project (see cover photo). Atop the Pangu Plaza, which enjoys views over the Bird’s Nest stadium constructed for the Beijing Olympics, Guo built a luxury hotel and an extravagant “Pangu Club” to host senior officials. The Pangu Club was home to an influential faction of Guo’s political and business allies, Beijing News has reported, including Ma, who used the state’s espionage apparatus to help Guo eliminate his rivals. “He collected evidence of wrongdoing by officials by secretly shooting videos of them living in luxury and engaging in affairs so that he could blackmail them later and help his business interests,” Caixin writes.
The allegations have been rebuffed by Guo, who left China while Ma was under investigation. But he found himself back in the headlines following the sacking of insurance regulator Xiang Junbo earlier this month, with Caixin reporting that Xiang’s downfall was related to a problematic loan extended by Agricultural Bank of China to Guo in 2010 when Xiang was the lender’s boss (see WiC362).
What allegations has Guo made?
Guo had stayed low profile in the early period of his exile. But since the beginning of this year, he has started making more of a major nuisance of himself by putting all kinds of allegations about Beijing’s leaders on social media platforms such as Facebook and Twitter.
He has also given interviews on a news website that focuses on Chinese political gossip. The South China Morning Post noted that the first of these interviews, in which Guo alleged that a senior security official had been abusing his power, came just a day before Xiao Jianhua, a powerful financier who has resided in Hong Kong’s Four Seasons Hotel for years, was reportedly abducted and spirited across the border to mainland China (see WiC354). Guo did not provide any evidence to back up his claims although he vowed to come up with some “nuclear bomb” revelations on “more senior officials”.
Last week he gave a much-anticipated live interview on Voice of America’s (VoA) Chinese-language service. In the online broadcast, he again denied that he had bribed Ma Jian. But he went on to make allegations about some of China’s most powerful business empires – such as the acquisitive HNA Group (see WiC362) – stating they are controlled by powerful clans inside the Party. Shares of HNA Holding Group, the owner of Hainan Airlines, reacted poorly in Hong Kong, registering their biggest intraday plunge in 17 months.
The outspoken tycoon also claimed that there is a rift between Xi Jinping and the anti-corruption tsar Wang Qishan, who is widely regarded as one of Xi’s closest allies. Again, the claims could not be substantiated. But US government-funded VoA pulled the interview half way through, leading to all sorts of speculation on social media. A spokeswoman said the original plan was to keep the livestream to just one hour and attributed its abrupt end to “miscommunication”. Reuters reported that the Chinese government had pressured VoA to cancel the interview ahead of time, however, with the Foreign Ministry summoning one of the broadcaster’s Beijing-based correspondents.
Facebook also terminated Guo’s account following the interview, although it was restored after he complained publicly, with the company saying the suspension was an administrative mistake. Guo’s Twitter account was also briefly suspended on Thursday, before reactivating again.
Guo has refused to stay quiet, promising to arrange another press conference within the next few weeks to reveal the “truth about the anti-corruption campaign in 2013-2017.” He said the revelations would focus on key individuals including Wang Qishan and Meng Jianzhu, a Politburo member now in charge of internal security.
How is Beijing fighting back?
The central government has pushed hard to discredit the renegade tycoon. When asked to comment on Guo’s allegations, a spokesperson of the foreign ministry pointed out that the businessman is hiding in the US, which hasn’t signed an extradition agreement with China. Yet the Chinese are still seeking Guo’s return. In fact, a day before his interview, Interpol had issued a red notice for his arrest at the request of the Chinese authorities (countries do not have to honour a red notice, so it isn’t the same as an international arrest warrant).
Less than an hour before Guo appeared on VoA, Beijing News published a long investigative story on the tycoon and his dodgy deals. And hours after the interview, a video confession from a man said to be Ma Jian was uploaded onto YouTube (which is banned in China). In the 20-minute footage, he confessed that he and Guo had formed a long-time alliance, whereby Ma said he would settle Guo’s business disputes. Indeed, he claimed when Guo wanted rid of a competitor, the spy agency threw the rival in jail. When Guo wanted to take over a local brokerage, Ma contacted the reluctant sellers and advised them to cooperate. Ma also said he wiretapped another of Guo’s business rivals for a year, froze bank accounts, deleted negative comments about Guo online and threatened journalists over bad press. In return, Ma says Guo paid him more than Rmb60 million in properties and cash (which sounds like a real bargain for having a spymaster in your pocket).
“Chinese authorities have launched an unusually sophisticated publicity war in conventional media and cyberspace against fugitive tycoon Guo Wengui,” the SCMP reckons.
Is Guo a reliable whistleblower?
The Financial Times said Guo had predicted the detention of Xiang Junbo six weeks before it was announced (although according to Beijing News, the insurance regulator’s fate was the subject of intense speculation on WeChat since late 2016). And if other remarks made by Guo are half as accurate as his call on Xiang, the revelations could turn out to be more damaging than Wang Lijun’s dash to the US consulate five years ago. Having said that, if Guo is such an informed whistleblower, American officials aren’t likely to let him flush his insights away on a free webcast.
Back in China, some have suggested that Guo’s smear campaign is simply a plot to pave the way to seek political asylum in the West. In Guo’s case, some of his previous rants have barely made sense. For instance, after Caixin Weekly published a report two years ago detailing his collusion with Ma Jian, Guo countered swiftly with allegations that the magazine’s founder Hu Shuli has an illegitimate child with Li You, the CEO of tech conglomerate Founder, which was battling Zenith for the control of a local brokerage (see WiC267). Often dubbed “China’s most feared woman”, Hu is 64 and 13 years older than Li. Caixin reported Guo’s claims to the police, which took legal action against him for “spreading rumours”.
Catch me if you can…
The drama unfolding around Guo takes place as China’s anti-corruption drive reaches deeper into the lucrative and politically sensitive financial sector. For instance, Yang Jiacai, assistant chairman of the China Banking Regulatory Commission, is now reported to be under investigation over his connections to Xiang, the detained insurance boss. “With the collusion between officials and businesspeople, the financial sector is in the deep-water zone of China’s anti-corruption drive,” the Global Times opines. A popular blogger on the the People’s DailyWeChat account agrees, claiming that 2017 will become “a landmark year” for graft busters in the financial sector.
How about those suspects who, like Guo, have fled the country? Regulators have vowed to hunt down those fugitive “crocodiles” and Wang Qishan’s anti-graft commission published an update on its efforts to stop suspects from fleeing China. At least 101 officials fled abroad in 2014, the discipline body said, but the number fell to 31 in 2015 and only 19 last year. Moreover, the authorities have published a list of a hundred of the most wanted suspects targeted with an Interpol red notice. So far 40 have returned to China with most of them being “persuaded to give themselves up”. Surely the authorities now want to add Guo to the tally.
The intrigue is an indication of business as usual – in political terms. Power struggles are common in the run-up to the Party Congresses that cement the senior positions in the Chinese leadership, like the one this autumn. Shortly before the 2007 Congress, Chen Liangyu, the former Party secretary of Shanghai, fell from power. Analysts said then-President Hu Jintao was solidifying his authority by exposing Chen, a close ally of former-President Jiang Zemin. Five years ago it was the scandal around police chief Wang Lijun that stirred the pot, leading to the downfall of Bo Xilai, a rival of Xi’s. And this year the main protagonist is Guo, an exiled billionaire with social media savvy. Only time will tell whether the scandal surrounding him has wider-ranging implications.
© ChinTell Ltd. All rights reserved.
Sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.