August 14, 2006
THE SCANDAL involving Shanghai Electric and the embezzlement of billions of public funds has now spread to the jolly vice-mayor Zhou Yupeng, best known to foreign correspondents as the permasmile official with special responsibilities for the Shanghai Expo. An investigation by the Party's Discipline and Inspection Commission has been launched, according to Hong Kong media reports, but no action against him has yet been taken.
Zhou, Hong Kong reports suggest, was the senior official responsible for overseeing Shanghai Electric, and before the shit hit the fan, was about to promote vice-managing director Han Guozhang to the senior position at the company. On August 1, and in Zhou's presence, Han Guozhang was taken away by the Discipline and Inspection Commission.
Han is believed to have assisted vice-chairman of the board Zhang Rongshen in his efforts to illegally secure bank loans and embezzle public funds. He is also involved in illegal land use.
According to the reports, the vice-mayor was directly in charge of approving land requisitions for the company. He is also alleged to have given the go-ahead to Zhu Junyi, the former head of the Shanghai Municipal Labour and Social Security Bureau, to invest 7 billion RMB from the social security fund in foreign stock markets.
Whether all this is true or not, it comes at a time of increased tension between Beijing and Shanghai over the future of the country and the identity of the Hu Jintao's successor as the Party prepares for its Seventeenth National Congress next year. As all the hooplah and hullabaloo over the publication of his self-serving Selected Works attests, Jiang Zemin is rumoured to be pushing for a bigger role, and Shanghai is likely to be the key battleground in the power struggle. Meanwhile, Wen Jiabao has called upon Hu Jintao to put a stop to the antics of the Shanghai Faction, whom he accuses of undermining social stability by disregarding state policies.
Hu Jintao has been trying to rid himself of the Shanghai party chief and Jiang Zemin ally, Chen Liangyu, for years, and may soon finally get his way. Chen, himself the subject of persistent allegations about his relationship with disgraced real estate tycoon Zhou Zhengyi, is rumoured to be off to become the new party secretary of Tianjin, replacing the aging Zhang Lichang. Others suggest that Chen might be on his way to distant Ningxia.
The use of corruption charges in the struggle for power is nothing new, of course. Jiang Zemin and his aides spent years trying to undermine one of his chief rivals, the Politburo member and former Beijing Party Secretary Chen Xitong, who had maintained a close relationship with the patriarch and chief powerbroker Deng Xiaoping. Jiang's supporters finally managed to connect Chen to a Byzantine corruption scandal in Wuxi, Jiangsu Province that involved Beijing's Capital Iron and Steel Corporation. Chen was purged and given a sixteen-year jail sentence for his relatively minor misdemeanours, and his departure helped to undermine another of Jiang's rivals, Li Peng.
