Corruption in China

Shanghai faction still part of the gang

PUBLISHED : Thursday, 11 October, 2007, 12:00am
UPDATED : Thursday, 11 October, 2007, 12:00am

Officials from the financial capital remain a force despite moves to sideline the city

When an article praising Shanghai appeared in People's Daily just a few weeks before the Communist Party congress, it sparked speculation. Had a resurgent 'Shanghai Gang' hijacked the front page of the party mouthpiece, or was it just an affirmation of the work of the city's new leader?

With Shanghai's new party secretary, Xi Jinping , expected to be promoted at the meeting, the article (Glad to Hear Good Tidings from Shanghai) appeared to be directed at praising him and showing the city's support of the centre.

This was in direct contrast to Shanghai's former party secretary, Chen Liangyu , who was sacked for corruption after he defied President Hu Jintao over policy. Chen's ousting removed a key member of the Shanghai faction of current and former leaders from the city, which shares power with the current administration.

The Shanghai Gang might be down, but it is not out, political analysts say. It remains a force within the party and the central government. But Mr Hu is expected to elevate his allies and members of his own faction from the Communist Youth League at next week's congress.

'While the fall of Chen Liangyu was a major blow, this political faction has nonetheless largely survived, with almost all of the other prominent members for the network remaining in positions of power,' Cheng Li, a professor of government at Hamilton College in New York state and a fellow at the Brookings Institution, wrote in the China Leadership Monitor earlier this year.

'Factional politics is becoming less a zero-sum game in which the winner takes all, and more a power-sharing dynamic in which two factions or coalitions compete in certain arenas and co-operate in others.'

This was different from the days of a single supreme leader, like Mao Zedong or Deng Xiaoping , he said.

Chen rose through the ranks with help from his patron, former president and party secretary Jiang Zemin . There has been speculation over what kind of political deal Mr Jiang made in return for giving up his protege.

After Chen was sacked last September, the party made Mr Jiang's collected works part of the canon. His nephew, Shanghai police chief Wu Zhiming , retained his seat on Shanghai's party standing committee. Most importantly, neither Mr Jiang nor his relatives have been tainted by the corruption case, though Chen's removal is indirect criticism of his leadership.

A secretary of the late vice-premier Huang Ju , also a member of the Shanghai Gang, was recently arrested in the case but his boss will never answer speculation about any possible involvement.

The corruption case, which involved misuse of money from Shanghai's pension fund, has implicated more than 25 government officials and corporate executives. Although the investigation has been portrayed as a crackdown on corruption, it is widely viewed as a political purge by Mr Hu.

With corruption thought to be endemic on the mainland, the campaign in Shanghai has narrowly targeted those with links to Chen. Top officials in other key cities have also been removed for corruption, moves also viewed as politically motivated.

Mr Jiang played a similar game. More than a decade ago, he manoeuvred to have Chen Xitong sacked as Beijing party secretary over a corruption case, removing a powerful political enemy.

What remains to be seen is how Mr Hu will stack the party and government with his own people between now and the annual session of the National People's Congress next March, and what posts he will agree to concede to the Shanghai faction.

'We will see a standing committee that very much has Hu's stamp on it, but that doesn't mean the Shanghai faction will be wiped out. I characterise the Shanghai faction as weaker but still around,' a foreign diplomat said.

Mr Hu and Premier Wen Jiabao have deliberately sought to set their administration apart from that of Mr Jiang's, by putting less emphasis on rapid economic growth and more stress on underprivileged groups left behind in the development boom.

Some members of Mr Hu's so-called tuanpai faction tipped to rise include Liaoning party secretary Li Keqiang , Jiangsu party secretary Li Yuanchao , head of the party's United Front department Liu Yandong and Shanxi party secretary Zhang Baoshun .

As political analysts note, however, Mr Hu's faction generally lacks experience in the key economic portfolio, meaning he will have to retain officials outside his immediate circle.

'Shanghai officials are very likely to get onto the Politburo. This result would indicate the central government has placed great emphasis on Shanghai's political status due to its financial importance,' a Shanghai academic said.

Shanghai is a major contributor to government coffers and host of the 2010 World Expo, an event China has put on par with the Olympics.

Still, Shanghai has recently lost out to other cities, notably Tianjin , which was chosen as the site for an Airbus plant and economic reforms, including the first city to pilot a scheme allowing mainland investors to buy Hong Kong shares.

'Since the [party] meeting will put forward the new concept of co-ordinated development, the central government should order Shanghai to offer more co-operation, contributions and support to other regions, especially western provinces,' the academic said.

Shanghai's new party secretary Mr Xi, himself previously the party chief of Zhejiang province , has stressed co-operating with other cities in the Yangtze River Delta area. Chen Liangyu always called Shanghai the 'dragon's head' of the region, stressing the city's lead role.

'Shanghai belongs to the whole country ... Shanghai's development can't be for its own benefit,' Mr Xi was quoted as saying by the People's Daily.