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    Greater China
     Mar 8, 2011


SUN WUKONG
Danger signals in China's high-speed graft
By Wu Zhong, China Editor

HONG KONG - The Chinese proverb "When a turnip is pulled out of the ground, some soil will inevitably come with it," certainly applies to China's crackdowns on official graft, with the associates of guilty parties often soon implicated in the crime.

So in mid-February, when Beijing dismissed railway minister Liu Zhijun on suspicion of graft, it was widely expected that more railway officials would soon face similar charges.

Indeed, last week Chinese media reported that Zhang Shuguang, deputy general engineer of the Ministry of Railway and director of its Transportation Department, had been suspended pending an investigation by the Chinese Communist Party's (CCP's) anti-graft watchdog.

Zhang, 56, an associate of Liu, was regarded as the "father of

 
China's high-speed railways". He supported Liu's plans for "leapfrog development" by building a $300 billion high-speed rail network covering 16,000 kilometers by 2015, and for China to build state-of-the-art bullet trains, according to China Daily.

Details of the case are shocking the public. Zhang reportedly has US$2.8 billion stashed away in Swiss and US bank accounts, wealth rivaling that of a small country. This despite his status as a prefecture-level official, with a monthly salary of just 8,000 yuan (US$1,220).

In terms of the money involved, Liu's case pales into insignificance in comparison with his protege - Chinese media estimate that Liu took up to 2.1 billion yuan in bribes. "The protege has outdone his master," as another Chinese proverb has it.

In a typical case of a "naked official", Zhang had already moved his wife, child and presumably a large portion of his ill-gotten gains to the United States some time ago. The term "naked official", coined by Chinese netizens, describes an official who gradually shifts his family and wealth overseas so he can flee the country at any time.

It can be reasonably suspected that any naked official is a corrupt official. This is why the party ordered nationwide background checks to enure that "naked officials" did not take important posts. Regions like Shenzhen now demand all officials taking important posts to declare whether spouses or children have moved overseas.

So how did Zhang - such a blatant "naked official" - remain in such a key post? How could he transfer such money out of the country without being discovered? How corrupt is the high-speed railway project, if Zhang took such a big bite off the cake? And rampant corruption is involved, has it affected the quality of high-speed railway projects?

It is obvious that Zhang acted so recklessly because he had a "protective umbrella" - Liu Zhijun. Liu could have protected Zhang because he had virtually absolute, unchecked power in China's railway sector.

When asked to comment on Liu's case, Premier Wen Jiabao said in an online chat with netizens on February 27 that it showed Beijing's determination to crack down on official corruption. However, he admitted that the abuse of power by the highest-ranking leader of a region or institution was possible because "our government and major officials have too much power. Power is too centralized without restriction."

Wen said this year Beijing would make curbing official corruption its top priority, and that Beijing would strengthen public supervision of government operations. He declined to give any concrete measures, and admitted that it would take some time for China to open its government budget to public supervision.

However, without transparency of government operations and genuine public supervision, Beijing's fight against official corruption is doomed.

The high-speed railway network is a major part of the 4-trillion yuan economic stimulus package launched by Wen in late 2008 to combat the international financial crisis. At that time, officials of the National Development and Reform Commission (NDRC) confidently proclaimed that it had the "resolute and methods" needed to prevent any of the money being misused. The NDRC now owes the Chinese public an explanation on how such huge amounts could apparently be pocketed by officials like Liu and Zhang.

Naturally, when the funds for a construction project are found to have been pilfered by officials in charge, people cast doubts on its quality. In 1998, when unprecedented floods devastated the Yangtze River, then Chinese premier Zhu Rongji inspected dykes along the river and found some collapsed sections were of poor quality. He called these "bean-curd projects" and threatened to chop off the heads of officials in charge.

Now, there are worries about the quality of the high-speed railways. Chinese media have reported Liu and Zhang gave some purchase orders or construction contracts to companies based on the bribes they would receive, rather than on the firms' reputations. Substandard construction is risky on tracks supporting a train that travels at 250 kilometers per hour. Many Chinese, especially rural migrant workers, have also been complaining that the fares are too high.

A deputy to the Chinese People's Political Consultative Conference (CPPCC), China's top political advisory body, is expected to soon table a motion that will demand China slow and scale down the construction of high-speed railways. The CPPCC and the National People's Congress (NPC), China's parliament, are concurrently holding their annual sessions.

Chinaís railway companies have about 1.8 trillion yuan in debt, against 3.3 trillion yuan in assets, the new railways minister Sheng Guangzu told the National Peopleís Congress on Sunday. He said Liuís case was an isolated one and would not have a major impact on railway development, the South China Morning Post reported, citing a report in Beijing News.

The World Bank estimated in a report last year that China spent $163 billion on the network from 2007 to 2009 and would spend another $100 billion in 2010, with the ultimate tab totaling some $300 billion.

(Copyright 2011 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)


China's rail boss vows cleanup
(Feb 16, '11)

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