Βι¶ΉΤΌΕΔ

The Trial of Chen Liangyu

• Paul Mason
• 8 Apr 08, 11:27 AM

"Before, you used to have to pay a one billion dollar bribe to get a personal audience with a major Chinese politician," one foreign businessperson in Beijing told me; "now you only have to invest a billion". That was five years ago and it may have been exaggeration but, as the ongoing trial of Chen Liangyu shows - or would show if it were not being held in secret - corruption went to the top of the tree under former president Jiang Zemin.

Chen was the party secretary in Shanghai, a member of the CPC Politbureau and at the centre of a grouping known as the Shanghai clique. He was and went on trial on 25 March 2008 in TIanjin, accused of diverting 25 billion RMB into the pockets of himself and associates in the Shanghai Communist Party elite. Yesterday another key figure in the scandal, , was sentenced to 19 years in prison. Zhang's case is worth lookiing at because it illustrates the proven extent of the network of bribery and corruption discovered in Shanghai's business elite - not in the bad old early 90s but as late as two years ago.

According to Zhang: a) embezzled money from the part-privatised company Shanghai Electric b) paid out 29 billion RMB in bribes c) illegally issued bonds in his own companies and d) manipulated the stock price of Haixin Group. One sentence stands out from the webpage on the state news agency's report on Zhang's sentencing. "It has not been revealed to whom he gave the money."....

...On Newsnight we have a standard practice which we go through every morning: we ask "What is the heart of darkness question?" What is the question nobody really wants to ask today, let alone answer? If we do our job right then by 2230 GMT you will see Jeremy Paxman or one of the other presenters asking that question to a politician, live, to an audience of millions (well, 1.2 million).

The sheer extend ot Zhang's crimes pose the following heart of darkness question: is Shanghai, that glittering hub of world capitalism so completely riddled with corruption that no single show trial will put it right? Was the CCP under Jiang Zemin, likewise, sustained substantially by a web of corrupt officials ripping off the Chinese people to the tune of billions of dollars? Has western business, so careful with its own image, been so unwilling to see past the bottom of a martini glass in a Bund nightclub that it ignored the existence of a scandal several times the size of Enron?

These are very big questions and I pose them because, despite the work of excellent journalists like the people who run Caijing magazine, they are rarely posed in this way - systemically. (For Caijing's latest coverage of the scandal see ).

It is of course well known to China watchers that the trial of Chen and his associates has a political motive. As the Hu Jintao leadership grappled with the remnants of Jiang Zemin's group for leadership, between 2004 and 2006, Chen's Shanghai clique were in near open defiance. Chen's arrest was the final act in Hu's struggle for supremacy within the party top layer - though a large part of the lower middle layer at local level remains unreformed.

However to read this only as a factional struggle is to ignore what the bigger issues in the struggle are about: Hu Jin Tao has, to my mind, not been well understood in the western media. It's partly his own fault for allowing "Jiang Zemin Thought" to be crammed down the throats of party members at the very point he was engaged in a fight with Jiang's group in the upper echelons. It's easy for westerners to say "Hu is just a continuation of Jiang". But not correct. Hu has reprioritised Chinese policy away from the rampant search for individual profit and towards maintaining social harmony: as I have reported, he has tried to normalise industrial relations, he has reined in the excesses of environmental pollution and is about to set up an environmental super-ministry. This is not to be pro one and anti the other, or to excuse anything Hu is doing, but to point out that there is a different set of policy objectives.

His methods remain draconian - having eschewed democratic control and with a very weak separation of powers, all that remains is to jail or execute bosses who cause tens of people to be killed in minining disasters, or tolerate slave labour in brick kilns, or rip off the taxpayer to the tune of billions (one of Chen's co-accused has already been sentenced to death). It is debatable whether the "strike hard" attitude to corrpution can ever root it out: harder journalism, a free press, greater use of forensic accounting and greater democratic control over the executive power is the way that western societies rooted out corruption - although we should acknowledge it was endemic in all the major economies at least up to the end of World War Two.

Recently, premier Wen Jiabao, of the cabinet to consider corruption: he concluded that there were not adequate controls and admitted that: "government departments' and officials' scandals have been increasing and some bribery cases, in which huge amount of capital was involved, have aroused harsh complaints and had enraged the public"

For now the big unanswered question is about Jiang Zemin himself. Since so many of Jiang's allies turn out to have been corrupt, could it be that he himself knew about it? In a country with a free press, there would be investigative journalists working on that story and it would be asked openly in editorials and on TV shows. Yet I know how hard it is to ask that question in China, so that even as I type it, my fingers shudder. Even if Jiang knew nothing about what his lieutenants were doing, the emergence of so much evidence of corruption during the Jiang years must call into question his status as a leader in retrospect.

If there is a lively debate going on about this in the Chinese media I would be happy to link to it: I suspect it is largely confined to private conversations and the ribald jokes Chinese people text to each other. But before readers in the west go off feeling superior, consider this: the case of Chen Liangyu is getting scant coverage in the west. Partly because there is so little to tell but also, I suspect, because it poses difficult questions for a those who came to see Shanghai in the Chen/Jiang years as a kind of pointer to the future of global capitalism.

There is more to come out of the Chen story. I wish the Chinese media luck in digging it out. Hit the comment button if you have anything to say....