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Bo Suspended After Wife Suspected in British Man’s Murder

Photographer: Nelson Ching/Bloomberg

Bo Xilai, Chinese Communist Party secretary of Chongqing, attends a plenary session on the work report of the National People's Congress (NPC) as China's NPC takes place in Beijing on March 9, 2012. Close

Bo Xilai, Chinese Communist Party secretary of Chongqing, attends a plenary session on... Read More

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Photographer: Nelson Ching/Bloomberg

Bo Xilai, Chinese Communist Party secretary of Chongqing, attends a plenary session on the work report of the National People's Congress (NPC) as China's NPC takes place in Beijing on March 9, 2012.

China’s Communist Party moved to show unity after suspending Bo Xilai from the ruling Politburo and declaring his wife a murder suspect, ordering the nation’s more than 80 million party members to back the decision.

China’s central television station read the charges against Gu Kailai, Bo’s wife, every hour on the hour, detailing how she had been arrested on suspicion of murdering British businessman Neil Heywood in Chongqing. A commentary on the front page of today’s People’s Daily (PEODOZ), the party’s mouthpiece, urged cadres to “firmly support the correct decision” to investigate Bo.

“The death of Neil Heywood is a serious criminal case involving the family and close staff of a Party and state leader,” the commentary said. “Bo has seriously violated the Party discipline, causing damage to the cause and the image of the Party and state.”

Bo’s downfall, which comes as China prepares for a once-in- a-decade leadership change this year, is the biggest political upheaval in the country’s top ranks since Communist Party General Secretary Zhao Ziyang was purged in the wake of the 1989 Tiananmen protests. Removal from the Politburo and Central Committee, which would come at a formal party meeting, is often a precursor to prison or detention. Among four other men removed from the Politburo outside regular Communist Party congresses since 1989, two were imprisoned and a third, Zhao, lived out most of the rest of his life confined to his home.

‘Greatest Fear’

“They’ve struggled with how to portray this,” said Christopher K. Johnson, a senior adviser at the Washington-based Center for Strategic and International Studies and a former China analyst at the Central Intelligence Agency. “Their greatest fear is to show any inkling that the leadership is anything but totally unified.”

The People’s Daily commentary said the decision to suspend Bo “highlights the Party and the government’s apparent attitude of firmly maintaining discipline and laws” that will “certainly get the wholehearted support from the whole party and all of the nation’s people.”

Party newspapers across the country, including Chongqing, where Bo served as the top official until last month, reprinted the commentary. The evening news featured a series of party leaders from Shanxi, Shandong and other areas voicing their support.

Contracts to insure China’s sovereign debt against non- payment for five years rose 2.5 basis points to 118 as of 5 p.m. in Tokyo, erasing an earlier increase of 3.8 basis points on the day, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.

Political Downfall

Gu and a personal attendant are “highly suspected” of killing British businessman Neil Heywood, who died in Chongqing in November, the official Xinhua News Agency reported late yesterday. The U.K. was originally told that Heywood died of alcohol poisoning.

Bo’s wife and the attendant, Zhang Xiaojun, “have been transferred to judicial authorities on suspected crime of intentional homicide,” Xinhua said yesterday. Bo has been suspended from his party posts and is “suspected of being involved in serious discipline violations,” Xinhua said in a separate report.

Bo’s political downfall comes ahead of a party congress scheduled for later this year that will pick a new generation of Chinese leaders. Before his lieutenant Wang Lijun, who Xinhua said made the murder allegations, spent a night in February at the U.S. consulate in Chengdu, Bo, 62, was seen by many analysts of Chinese politics as being a top contender for membership in the elite Politburo Standing Committee. That panel, now with nine men, exercises supreme authority in China.

Orderly Transition

“It’s another step toward putting him in jail on a very serious charge,” said Li Cheng, an analyst of Chinese politics at Washington’s Brookings Institution. “It reflects the unity of the party leadership and their plan to resolve this problem in a relatively short period of time, and move on to make sure the party congress will be held in an orderly and institutional way.”

The U.K. embassy in Beijing had asked earlier this year for an investigation into Heywood’s death based on increasing rumors and suspicions, spokesman John Gallagher said on March 26. Gu Kailai and her son were on “good terms with Heywood” and then had “a conflict over economic interests, which had been intensified,” Xinhua reported.

‘Tragic Case’

U.K. Prime Minister David Cameron said his government wants to “get to the bottom” of the case involving the death of a British national.

“We did ask the Chinese to hold an investigation,” Cameron told a news conference in Jakarta today. “We are pleased they are now doing that and I stand ready to cooperate in any way we can. It is very important we get to the bottom of what has happened in this very disturbing and tragic case.”

Heywood and the son of Bo and Gu, Bo Guagua, both attended Harrow school in the U.K., with Heywood attending in the 1980s and Bo from 2001 to 2006, Luke Meadows, information officer for the Harrow Association, said in a March 27 e-mail. Heywood, 41, lived in Beijing with his wife and had two children, according to U.K. birth records. Bo Guagua is a student at Harvard University’s John F. Kennedy School of Government in Cambridge, Massachusetts.

Bo’s troubles became public in early February, after his former police chief Wang Lijun spent the night of Feb. 6 at the U.S. Consulate in Chengdu, an event confirmed by both the U.S. and Chinese governments. On Feb. 8, Wang was booked with a first-class seat on an Air China (753) flight from Chengdu to Beijing accompanied by a vice minister for state security, Bloomberg reported on Feb. 10.

Crime Crackdown

Bo won national attention for his success in cracking down on organized crime with Wang as police chief and for his “Chongqing Model” of emphasizing state-led investment to ease wealth gaps between urban and rural residents. Bo also reintroduced songs and slogans from the era of Chairman Mao Zedong to re-instill a socialist spirit.

Meeting with reporters on March 9 in Beijing, Bo revealed China’s wealth gap as measured by the Gini coefficient was at a level that social scientists say sparks unrest. He evoked Mao in vowing to reverse it.

‘Slide Into Capitalism’

“As Chairman Mao said as he was building the nation, the goal of our building a socialist society is to make sure everyone has a job to do and food to eat, that everybody is wealthy together,” Bo said. “If only a few people are rich, then we’ll slide into capitalism. We’ve failed. If a new capitalist class is created then we’ll really have turned onto a wrong road.”

Chongqing led the other three municipalities directly under the central government -- Beijing, Shanghai and Tianjin -- in growth in per capita economic output after Bo took the helm in 2007.

Bo is the son of Bo Yibo, one of the founders of the People’s Republic of China and one of the eight “immortals” who helped shape Chinese politics after Mao’s death in 1976.

The younger Bo rose from being the mayor of Dalian to become governor of northeastern Liaoning province before becoming commerce minister, where he oversaw trade ties with the U.S. from 2004 through 2007. In 2007, Bo secured a spot on the Politburo and became the top official in Chongqing, according to his official biography.

Violent Protest

A violent demonstration took place in Chongqing yesterday, according to Zhang Beiping, a spokesman for the city’s Qijiang district. Zhang didn’t say why people were protesting. Postings on Sina Corp.’s Twitter-like Weibo microblogging service said the protests were over the merging of two local districts. The posts included photos of people allegedly injured in the demonstrations.

On March 14, the day before Bo’s firing was announced, Chinese Premier Wen Jiabao told reporters in Beijing’s Great Hall of the People that China in the late 1970s had taken a decisive turn away from the politics of the Cultural Revolution. Wen said China risked a return of the Cultural Revolution -- where millions of people were persecuted by Chairman Mao’s Red Guards -- unless the country continued to pursue political change.

Murder Allegations

Allegations of murder and treason among top officials is reminiscent of Cultural Revolution politics, said Nicholas Howson, a law professor at the University of Michigan in Ann Arbor and a former managing partner at Paul Weiss Rifkind Wharton & Garrison LLP (1178L) in Beijing. Mao’s top lieutenant Lin Biao was killed when his British-made jet crashed in Mongolia in 1971 as he was apparently trying to flee the country after a failed coup attempt against Mao.

Bo’s case goes beyond those of two other Politburo members jailed in the past two decades -- former Beijing party boss Chen Xitong and former Shanghai party boss Chen Liangyu -- whose cases centered around corruption, not murder, Howson said.

“Ironically, given the fact that Bo Xilai is accused of fanning Cultural Revolution-type flames, the case now apparently being made against Bo’s wife is reminiscent of the one made against Chairman Mao’s appointed revolutionary successor Lin Biao and his family after Lin Biao’s political demise and at the height of the same Cultural Revolution,” Howson said in an e- mail. “Complete with tales of moral turpitude, sexual impropriety and murder.”

To contact Bloomberg News staff for this story: Michael Forsythe in Beijing at mforsythe@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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