Zhanjiang buries ghost of scandal

For Zhanjiang City, official life came to a standstill on September 8 last year. On that day, about 10,000 central government and provincial police descended on southern Guangdong's Leizhou Peninsula to arrest more than 200 government, customs and law enforcement officials for their participation in what state media has called the largest mainland smuggling racket of the last 50 years.

The '9898' smuggling case, as the affair has been named, is believed to have robbed state coffers of some 30 billion yuan (about HK$27.98 billion) in lost revenue due to the illegal import of thousands of tonnes of crude oil and steel, as well as cars and other manufactured goods.

The mastermind behind the operation is said to be Zhanjiang's former party secretary, Chen Tongqing, who in June barely escaped death when the first round of sentences were handed down by the Zhanjiang Intermediate Court.

Not so fortunate were Chen's principal accomplices - Zhanjiang customs boss Cao Xiukang and three local gangsters - who were immediately executed by order of the court.

Local officials maintain the rackets were the handiwork of a small group of evil-minded individuals. However, the vast number of bureaucrats involved in pay-offs and cover-ups suggests a more pervasive corruption infected the local establishment.

Among the 46 sentenced last Wednesday during a second round of trials were two commanders of the public security bureau's border bureau marine police, the city's construction commission chief and a senior official at the local economic and technology development zone.

Despite lingering questions about the city's self-styled smuggling syndicate, Zhanjiang mayor Zhou Zhenhong believes it is time to bury the past and move ahead with economic development.

Mr Zhou said the municipal government's attitude towards the affair was best summed up in the policy of 'Three No's and One Yes'. The 'no's' refer to controversies, complaints and 'strong winds'. The 'yes' refers to solving problems as they arise.

'We are not going to discuss the former problems in our economy or complain about the difficulties they brought,' Mr Zhou said.

Those difficulties are exacerbated by an economy already made weak by slack demand and a reliance on inefficient state-owned industry, weighted heavily towards sugar and paper production.

During the first six months of the year, Zhanjiang's gross domestic product reached 17.18 billion yuan, representing year-on-year growth of 5.3 per cent. Utilised foreign investment was down by 39 per cent and exports fell 35 per cent.

Mr Zhou considered the peninsula's problems temporary.

'Challenges and opportunities exist hand-in-hand,' he said.

The mayor said the local government was once again concentrating on building Zhanjiang into a regional hub - as was envisioned when Beijing named the municipality one of the mainland's first 14 cities opened to foreign investment in 1984.

In that effort, Zhanjiang is receiving considerable assistance from the Guangdong government, which is not only helping the city bankroll its state enterprise reform and drought-relief efforts, but also helping it find talent for its factories and markets for its products.

Zhanjiang's geographic advantages remained formidable, and included the best deep-water seaport in the southwest mainland, Mr Zhou said.

'Over the next two decades, the city will emerge as a 'dragonhead' economy for a North Bay economic circle, which includes Vietnam and Guangxi and Hainan provinces.'