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    Greater China
     Jan 27, 2007
Shanghai clique takes another hit
By Poon Siu-to

HONG KONG - A key figure was missing from the two-day Central Conference on Financial Affairs that ended last Saturday. Huang Ju, who ranks sixth on the nine-member standing committee of the Politburo, is in charge of China's financial affairs.

It was reported that Huang has handed over his power overseeing financial affairs to Prime Minister Wen Jiabao. It will be revealing if Huang, who is a key member of the Shanghai clique headed by former president Jiang Zemin, has in fact lost his power ahead of

the Chinese Communist Party's (CCP's)17th National Congress this autumn.

Huang supposedly dropped his official functions due to worsening health, reported the Hong Kong Economic Times. Wen takes charge of financial affairs with the assistance of Huang Jianmin, general secretary of the State Council.

Earlier, the top echelon in Beijing had permitted Huang Ju to excuse himself from routine meetings. But health permitting, he was supposed to preside over meetings concerning affairs that were under his direct charge. Therefore, his absence from the financial conference of which he is in charge, indicates that either his health - or his political health - has reached a critical state.

The ailing vice premier, who reportedly suffers from pancreatic cancer, began to retire from public view a year ago. He was notably absent at the annual sessions of the National People's Congress, China's parliament, and the Chinese People's Political Consultative Conference in March, 2006. He did not show up at the opening ceremony of a conference co-sponsored by the Chinese Academy of Sciences and Chinese Academy of Engineering.

On November 21, Huang met with Charles Goode, chairman of the Australia and New Zealand Banking Group. His last public appearance was at the State-Owned Enterprise (SOE) executives' conference on January 5, which is construed by some analysts to show that at the time he was still the top helmsman of financial and SOE affairs.

Then, is it likely that Huang's health had deteriorated so rapidly that in a fortnight he became too weak to attend a much more important meeting and to hold onto his power?

In the CCP, power handover is an extremely sensitive thing. There are few, if any, examples of any high-ranking leader willingly surrendering power. And poor health would be the last thing to make them do so. Even though gravely ill, they would hang on until their last breath to protect their political faction or pass on the torch to favorite successors.

Former Chinese leaders such as Mao Zedong and Zhou Enlai never gave up power, even when they were on their death beds. In the post-Mao era, many ailing Politburo members died during their terms. In the CCP's history, high-ranking officials lose power mainly because of their political "incorrectness" instead of their health.

In 1993, the then premier Li Peng was not happy with paramount leader Deng Xiaoping's instructions on furthering economic reform so he pretended to be ill. An angry Deng ordered Li give up his power overseeing economic affairs, delegating the responsibility to Zhu Rongji, then a vice premier.

In 1999, Zhu embarked on a formal visit to the United States, but failed to strike the World Trade Organization entry deal with then US president Bill Clinton. And no sooner had he returned home than the Chinese Embassy in Belgrade was bombed by the US Air Force. Zhu was blamed for fawning on Washington, and former president Jiang Zemin seized on the opportunity to deprive Zhu of his duty of overseeing financial and SOE affairs.

Thus, there are good reasons for many analysts to believe that Huang's being politically marginalized has more to do with his political misconduct than with his health. But what kind of misdeeds or mistakes? The past two weeks have provided some clues.

The CCP's Central Commission for Discipline Inspection (CCDI), China's top anti-graft watchdog, held its Seventh plenary session on January 8, just two days after Huang delivered a key-note speech at the SOE executives' conference. The CCDI announced the latest findings in its investigations into several charges against the ousted Shanghai CCP chief, Chen Liangyu, widely seen as a protege of Huang and Jiang.

And recently, Shanghai tycoon Zhou Zhengyi was arrested again on charges of financial irregularities and offering bribes to officials. Zhou's arrest is believed to be related to Chen's corruption case. More than 50 Shanghai officials have also been sacked and put under investigation. His losing power must be seen in this context. Has he cut a deal to quit rather than face prosecution?

Recently, the Beijing Cai Jing magazine exposed a scandal involving huge losses of state assets. According to the magazine, Shandong Luneng Group, a mega-SOE with total assets of more than 73.8 billion yuan (US$9.5 billion), has recently undertaken a restructuring for privatization. Its ownership was transferred, at an unbelievably low price of 3.7 billion yuan, to two Beijing-based private companies through a chain of complex equity sales. Pulling strings behind the deal were believed to be two offspring of some top-ranking officials.

But the Luneng case is just the tip of the iceberg. Losses of state assets like this are conservatively estimated to be at least 100 billion yuan each year. In addition, since 2002 when Huang was put in charge, there have been more than a dozen big corruption cases, each involving more than 100 million yuan, in the banking sector every year. As China's top man in charge of financial and SOE affairs, Huang definitely should take responsibility for these scandals.

On Wednesday, chinesenewsnet.com, a Chinese-language online news website based in the US, reported that Wang Weigong, director of Huang's office, had been sacked and put under investigation for suspected corruption, further indicating Huang's fall into disgrace. However, the report could not be immediately confirmed.

Of course, if Huang still had strong backing, he would not have had to surrender. His losing his power, as well as the disgrace of Chen, suggests his boss, Jiang, is no longer capable of protecting his proteges. With Hung's downfall, the collapse of the Shanghai clique can be expected, paving the way for the coming of President Hu Jintao's era after the party's 17th National Congress this autumn - Hu is also party boss.

Poon Siu-to is a Hong Kong-based freelance writer for the Chinese-language edition of Asia Times Online.

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Rumors of a split in China's elite (Jan 17, '07)

China's flawed fight against corruption (Dec 22, '06)


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