China Probes Guangzhou Party Chief, Widening Drive Against Graft

President Xi Jinping’s campaign against corruption struck at Guangdong, China’s largest regional economy, as the Communist Party chief of its capital Guangzhou was put under investigation.

Wan Qingliang, previously a vice governor of the southern province, is being probed for “serious violations of discipline and laws,” the Central Commission for Discipline Inspection said on its website on June 27 without giving further details. The phrase is usually used to signal corruption.

Xi started his crackdown after taking control of the party in November 2012, warning that graft threatens its six-decade grip on power. Guangdong, China’s most-populous province, is the latest region to come under the spotlight in a campaign that has ensnared thousands of officials in government, the media and industries including energy and telecommunications.

“This corruption campaign is being run on so many levels and has gone on far longer than most people expected,” said Ding Xueliang, a professor of politics at Hong Kong University of Science and Technology. Xi and commission chief Wang Qishan “fear enormously that they may be the last kings of the party and they are fighting to save the regime.”

The watchdog said in January it punished 182,000 government officials for corruption and abuse of power last year, 13 percent more than in 2012. Du Shanxue, a deputy governor of Shanxi province, and Ling Zhengce, a top provincial official and brother of an aide to former President Hu Jintao, were put under investigation earlier this month.

The commission also this month announced a probe into Su Rong, a vice chairman of the nation’s top political advisory body and a former party chief of Jiangxi province.

Youth League

Wan, who was born in 1964, appeared in public as recently as June 26 when he gave a speech urging local officials to better discipline themselves and their relatives, according to a report in the Guangzhou Daily.

A native of Wuhua County in Guangdong, Wan served as party chief of Jiaoling county, Jieyang city and vice governor of Guangdong before he became Guangzhou party chief in December 2011, according to the official Xinhua News Agency. From 2000 to 2003, Wan served as secretary of the Guangdong branch of the Chinese Communist Youth League, former President Hu Jintao’s power base.

Wan’s downfall won’t affect Hu Chunhua, a member of the Politburo who was appointed Guangdong party secretary in 2012, or the previous party chief Wang Yang, also a member of the elite body, Ding said. Hu is tipped by some analysts to win a top position in the country’s next political transition in 2022.

‘Few Connections’

“Hu, like Wang before him, was an outsider with few local connections and he may even have helped bring this case to the attention of the higher levels,” Ding said. “It’s been quite normal over the past 35 years for the central authorities in Beijing to launch investigations into the coastal provinces of Guangdong, Fujian and Hainan, where they are worried about corruption and localism.”

Wan is the latest Guangdong official to be investigated or punished for corruption. A former director of the province’s tax bureau and a former manager of the Guangdong unit of state-owned China Southern Power Grid Co. were expelled from the party this month for allegedly accepting bribes, Xinhua reported.

Cao Jianliao, party secretary of Zengcheng city and a former vice mayor of Guangzhou, was put under investigation in December, and Wang Huayuan, a former head of the province’s discipline inspection commission, was given a suspended death sentence in 2010 for bribery, according to Xinhua reports.

Hurt Growth

Xi’s anti-corruption and frugality campaigns are hurting the country’s economy, according to Bank of America Corp. analysts led by Hong Kong-based chief Greater China economist Lu Ting.

“While the channel of economic impact in 2013 was slumping luxury consumption, the channel in 2014 has been mainly the slowing fixed-asset investment growth,” they wrote in a June 25 report. Local government officials and executives at state-owned enterprises fear corruption charges or are not financially motivated to invest, they said.

The crackdown could last for two or three more years, they said. “Having achieved milestone victories in putting some high-ranking officials in jail and successfully consolidated power,” China’s current leadership would seriously consider long-term institution building to deal with corruption, they wrote.

To contact Bloomberg News staff for this story: Nerys Avery in Beijing at navery2@bloomberg.net

To contact the editors responsible for this story: Stanley James at sjames8@bloomberg.net Jim McDonald, Nerys Avery

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