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    Greater China
     Mar 27, 2012

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Crisis closes in on China's inner circle
By Chris Stewart

Zhou Yongkang, a member of China's ruling Politburo Standing Committee (PSC) and head of the country's 1.5 million-strong police force, is the latest and most senior leader to fall in the battle for control of the Chinese Communist Party (CCP) if rumors of his downfall have any substance. It was certainly a fall foretold.

Rumors late last week of Zhou's crash from grace came after talk of an attempted coup in Beijing last Monday night or early on Tuesday, supposedly linked to his protege Bo Xilai, former party boss of the strategically important Chongqing municipality and until his dismissal this month a contender to succeed Zhou on the PSC when he steps down in November.

Bo's dismissal, announced on March 14, was "the most important political event in China in more than two decades"; that is, since


the party schism that opened over the crackdown of Tiananmen Square protests in 1989. He is now reportedly under arrest, though still a member of the 25-strong politburo, the stepping stone to the PSC. Any denunciation of Zhou would overshadow those events by a large margin. [1-3]

Existing PSC members have only until October to decide, with consultation down the line, on seven replacements to the nine-member body for approval by more than 2,000 delegates at the 18th National Congress of the CCP.

Vice President Xi Jinping, as things stand, is the presumptive president, Vice Premier Li Keqiang presumptive prime minister, in a once-in-a-decade change of the top two PSC posts. Only two, perhaps three, of the remaining vacancies are considered still unsettled. About 70% of the members of the Central Military Commission and the executive committee of the State Council, or cabinet, will also be changed.

Deep divisions exist in the PSC and the country at large over what the new government should do with its vast new wealth, and who should get their hands on it over the next 10 years. Zhou is reported to control the state monopoly of the oil sector as well as being head of the Political and Legal Committee. [4, 5]

The stakes could not be higher. Bo's downfall alters the balance of political forces involved in the selection process. Effective removal of Zhou, close to still powerful former president Jiang Zemin, could be akin to knocking over the chessboard. The future strength of putative president Xi Jinping, like Bo a "princeling" - son of a revolutionary - may be undermined.

The influence of Jiang, a promoter of the careers of Zhou, Bo and Xi, is being questioned in full public view. Coup rumors, however credible, ring truer by the day - on Friday, army officials in Shaanxi province west of Beijing called on the People's Liberation Army to unite behind President Hu Jintao. [6]

The March 19 'coup' - real, attempted or non-existent?
Stock and bond market traders were among the first to hear of a Beijing "coup" early last Tuesday, March 20, thanks to reports sent out by, among others, United States market website Nasdaq.com, which at 4:53 am New York Time (09:55 GMT) identified "rumors" of a coup without saying where it got the information.

An hour later, at 10.41 GMT, fxstreet.com reported the same rumors in its "Morning Wrap" of breaking news for market traders, this time citing "Epoch Times" as the source, though failing to mention that Epoch Times' own source was another financial writer, Li Delin, "who is on the editorial board of Securities Market Weekly and lives in Dongcheng district of Beijing". [7, 8]

The prospect of a coup attempt in the world's second-biggest economy should have stunned markets - but they appear to have been unimpressed, given the absence of any physical sign of military activity in the capital.

Shares traded in Shanghai fell a mere 1.4%, although a 10 basis point jump in the cost of buying insurance on Chinese government debt and a 15% surge in the volume of shares traded, the most since November 9, indicated some traders were hewing to the market dictum of "buy on the rumor, sell on the news". [9]

Bo Xilai's name has since mid-February been linked by Epoch Times to a coup plot and it identified Zhou as necessarily the next to fall. (At the time of writing, Zhou was seen on Friday, March 23, but failed to meet visiting Indonesian President Susilo Bambang Yudhoyono on Saturday, despite the previous day anticipating a discussion.) [10]

Epoch Times reports are treated warily by the mainstream press for several reasons. Not least, it is backed by the Falungong spiritual group. Its teachings can be as beyond the non-believer's comprehension as those of any faith. The group also claims Bo and his former police chief Wang Lijun led a brutal (and award-winning) campaign of repression of the Falungong, including torture and live organ transplants, after then-president Jiang banned the group, with its membership of millions, in the late 1990s. [11]

The Falungong has strong support in the US Congress (see below), and still has large numbers of adherents in China subject to arrest for practicing their beliefs.

Epoch Times, in short, has an ax to grind. Its reports noticeably differ from mainstream publications in not favoring labels such as "rightist", "ultra-left", "charismatic" and so forth, to explain complex affairs. It seems to eschew the tag "reform", perhaps given Falungong's insights into how the CCP works. (For a graphic explanation of the pointlessness of these labels in the present context, see [12]).

The thread that Epoch Times runs through the CCP maze goes like this. A coup, initially timed for early next year, was to target presumptive president Xi Jinping after he succeeded Hu Jintao in November's shake-up. [13] By the end of this year, Bo was to have followed Zhou Yongkang into the PSC, taking control of the public security forces, which would help supply the post-handover coup firepower.

Implicitly upsetting the coup apple cart, if there was one, was the intervening denunciation this month of Bo. Events had to be brought forward, making President Hu and Prime Minister Wen Jiabao the "coup" targets, as claimed on Chinese blogs last Tuesday.

Late last week, Mingjing News, a US-based website said to be affiliated to the "faction" of former president Jiang Zemin, opposed to the incumbent president, came out with its own version of the Bo-Zhou coup plot "to block the expected succession of Chinese vice president Xi Jinping", Taiwan's Want China Times reported on March 22. Jiang has allegedly called Zhou a traitor for backing Bo, the report said. [14]

Race to the tape
The present crisis was triggered by the flight of former Chongqing Public Security chief Wang Lijun to the US consulate in Chengdu, capital of Sichuan province adjoining Chongqing, carrying with him evidence of wrongdoing by Bo, Epoch Times reports, in line with other media. Its account then diverges from the trodden path.

Premier Wen, seeking a way to secure Bo's downfall for purely political reasons, had initiated investigation of Wang late in 2011, the website said on February 15, with the fruits of those inquiries to be used to undermine Bo. (Alternatively, He Guoqiang, former Chongqing party boss and current head of the disciplinary committee of the central CCP committee, initiated the probe; Bo previously executed He's Chongqing police chief.) [15, 16]

Bo got wind of the investigation, and on February 2 this year distanced himself from Wang by dropping him from his post as head of the Chongqing Public Security Bureau. (After his own downfall, he would have to go a step further and denounce Zhou to save his own skin, Epoch Times commented on February 16. [17]

Four days later, Wang did a runner - to secure political asylum, if lucky; more probably to see that (a) the US was made aware of his anti-Bo evidence, and (b) to ensure that he would be picked up by Beijing security forces rather than by the hotly pursuing Bo, in the form of Chongqing mayor Huang Qifan. [18]

The secrets Wang carried to the consulate included, according to Epoch Times, a plan, that also implicated nationwide police chief Zhou, to stage a coup against Xi. The evidence included a tape in which Bo proclaimed in damning and imperial terms his superiority over the present leadership, the report said on March 5, citing the "dissident" Boxun Chinese-language web site:
On the tape, Bo is reported to have said that former head of the CCP Jiang Zemin is the "current Empress Dowager Cixi'' - a powerful and charismatic woman who unofficially but effectively controlled the Manchu Qing Dynasty in China for 47 years, from 1861 to 1908.

Bo described current CCP head Hu Jintao as the "Emperor Xian of Han", who was the last emperor (reigned 189-220) of the Han Dynasty and was thought to be nothing but a puppet, with even Han loyalists abusing his sovereignty.

Bo also talked about [vice president] Xi Jinping, ticketed to succeed Hu at the 18th Party Congress later this year. Bo said Xi is "Liu E'dou," the infant name of Liu Shan, the second and last emperor of the state of Shu Han during the Three Kingdoms era of Chinese history. Liu Shan was commonly perceived as an incapable, even retarded ruler.

Bo said it is he that will lead China into its future, not the current nine incompetent and mentally retarded members, nor the new "incompetent and mentally retarded" members selected by the current members. Bo is referring to the nine members of the Standing Committee of the Politburo ... [ 19]
Epoch Times continues:
The Boxun report went on to say that Bo Xilai and his wife Gu Kailai had accumulated 8 billion yuan (US$1.3 billion) before they moved from northeastern Liaoning province to Chongqing. Bo is said to have now transferred most of his money to the United States, Canada, Britain and France.
On February 13, the PSC agreed to a special investigation task force into the Wang Lijun affair; Jiang "insisted on the investigation", Epoch Times reported, commenting this was understood to be Jiang severing links to Bo. It cited Mingjing News, "connected to the political faction headed by Jiang Zemin" as the source. [20]

At the time of the decision, Vice President Xi Jinping, a recognized protege of Jiang, was set to fly to Washington, where he arrived "late on February 13" local time after a flight that takes 12 hours commercially; meaning he had to leave Beijing by midnight at the latest on February 13. His involvement in this decision - which could crucially affect the strength of his political support on the PSC when president - is not clear. 

Continued 1 2 3

Bo exit shows China's true colors
(Mar 23, '12)

Wen hangs tough on home sweet home (Mar 21, '12)

China's Ides of March (Mar 20, '12)

A Chinese princeling loses his fiefdom (Mar 20, '12)

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8. China outlook gloomy

9. Angry Birds shuns Windows

10. Russia nudges Syria to move on

(Mar 23-25, 2012)


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