How Xi Jinping Swatted Flies to Trip Biggest China Tiger

July 4 (Bloomberg) -- Xi Jinping is already positioning to shape the next generation of leaders, with the biggest corruption crackdown in three decades offering a chance to promote allies. Ting Shi has more on "On The Move Asia." (Source: Bloomberg)

To catch a tiger in China, it turns out first you need to swat a lot of flies.

Less than a month after Xi Jinping took the helm of the Communist Party in 2012, a brief report appeared on the state-owned news agency saying a senior official in a southwestern province was under investigation for graft.

While announcements on corruption probes were nothing new, later developments showed the move was the opening salvo by Xi, 61, in what’s become the farthest-reaching takedown of a top Chinese leadership figure and his networks of influence since the aftermath of Mao Zedong’s death.

When the initial target, Sichuan Province deputy party chief Li Chuncheng -- accused of enriching himself and his family with state money -- was followed by the downfall of two fellow Sichuan officials, a pattern began to emerge. The individuals all had ties to Zhou Yongkang, a hardliner who backed disgraced Bo Xilai and under whom the domestic-security budget grew bigger than defense before he retired in 2012.

By last month, the campaign by Xi, who pledged to net both “tigers and flies,” parlance for cadres from the top to bottom ranks, spanned hundreds of Communists. It all came to a head yesterday with the official announcement of Zhou’s purge.

Photographer: Nelson Ching/Bloomberg

Zhou Yongkang, former member of the Standing Committee of the Political Bureau of the Chinese Communist Party Central Committee. Close

Zhou Yongkang, former member of the Standing Committee of the Political Bureau of the... Read More

Close
Open
Photographer: Nelson Ching/Bloomberg

Zhou Yongkang, former member of the Standing Committee of the Political Bureau of the Chinese Communist Party Central Committee.

Scope of Influence

Zhou, 71, was a tiger as big as they come, with power stretching across government, industry and security forces. He was a onetime member of the elite Politburo Standing Committee that rules China and a former supremo of the oil industry. His roles gave him influence comparable to being Dick Cheney, who shares a background in oil, J. Edgar Hoover of the FBI and Standard Oil founder John D. Rockefeller all rolled into one.

Each of those who vanished from public view could be connected to him as colleagues, subordinates and business associates, and some even by blood.

Taking down such a powerful man was unthinkable under the previous generation of leaders. Doing so violated an unwritten rule of elite factional politics against probing senior-most officials even after they left office. The guideline protected patronage systems used to guarantee smooth power transitions after decades of political turmoil.

The steady progression of the Zhou-faction’s dismemberment became apparent in reports in the tightly controlled Chinese media, which toward the end was freely speculating when the coup-de-grace would be delivered against its chief.

Preparing Public

How Zhou was slowly encircled reveals the care that Xi took to overcome opposition, keep the party united and prepare the public for a scandal that might damage the party’s legitimacy. It’s also a cautionary tale for a Communist elite that has accumulated wealth for decades while governing without public accountability.

Photographer: SeongJoon Cho/Bloomberg

Xi Jinping, China's president. Close

Xi Jinping, China's president.

Close
Open
Photographer: SeongJoon Cho/Bloomberg

Xi Jinping, China's president.

“At least in the reform era, no other member of the Standing Committee has been attacked for corruption,” said Joseph Fewsmith, a political science professor at Boston University who specializes in China’s elite politics. “The fear has always been that if factional infighting is taken to the Standing Committee level, then it might deepen rifts and make maintaining the appearance of unity more difficult.”

Like peeling the layers of an onion, the Zhou project has worked through layers of associates. First his old comrades from when he led Sichuan province were rounded up. Next, investigators ran through his colleagues in the energy business. They picked up in-laws of his, and his son. After that, they took down his associates in the Ministry of Public Security. They left the toughest for last -- his inner circle of senior advisers and personal secretaries.

Bo Xilai

And before they dealt with Zhou, the leadership first had to address his ally Bo Xilai, the populist Chongqing party boss with eyes on a top party slot in Beijing who was removed after his wife was convicted of murdering a U.K. businessman.

Along the way, investigators plowed through three provinces and the national broadcaster, CCTV. The campaign has felled a top general who was a Politburo member, and two incumbent members of the Central Committee, which elects the Politburo, as well as thousands of local officials.

“You work from the bottom up,” Fewsmith said. “You have to accumulate evidence to build a case and to persuade politically powerful people that it is necessary to take the extra step.”

Campaign’s Breadth

Xi’s nationwide campaign to rein in graft has ensnared more than 480 officials spanning all of China’s provinces and largest cities. Almost a quarter of those officials or senior executives in state-owned companies with a vice-minister rank or higher toppled during the past 18 months have direct links to Zhou, according to data compiled by Bloomberg. Officials are typically detained in secret, without the opportunity to address publicly charges.

“There are many political considerations and implications in making such a decision,” said Jean-Pierre Cabestan, a political-science professor at Hong Kong Baptist University. “A consensus needs to be reached at the top of the party.”

Leading the investigation is the Central Commission for Discipline Inspection, or CCDI, an internal party watchdog veiled in secrecy that only last year started a website and tipsters hotline.

Wang Qishan, 66, an economic specialist who rose through the banking sector before running Beijing’s successful bid for the 2008 Olympics and then getting a seat on the Politburo Standing Committee, is bringing increased financial savvy to the role of anti-corruption tsar.

Lead Detectives

The CCDI doesn’t have formal power to arrest or press charges. In practice, however, the zhongjiwei, as it’s called in Chinese, is among the most powerful and feared organizations. It is able to detain indefinitely and investigate any one of China’s roughly 87 million Communist Party members -- effectively every government official or executive at the state-owned enterprises that dominate China’s economy in key sectors such as finance, energy and transportation.

The CCDI sits parallel to the government’s law enforcement authorities, and outside of Zhou’s onetime control of the domestic-security apparatus. It answers only to the party hierarchy and ultimately the secretary general, President Xi.

CCDI units can report suspicions directly to Xi, state media say, letting them bypass mid-ranking bureaucrats who might seek to stymie any investigations.

‘Direct Line’

“The direct line between the dispatched central investigators and Xi showed the leadership’s resolve to crack down on corruption,” said Zhu Lijia, professor of public affairs at the Chinese Academy of Governance in Beijing. It shows that “no matter how senior the suspect is, whoever the case might involve, the investigation will get to the bottom of it,” Zhu said.

It’s unclear what specifically prompted the investigation into Zhou, though there are plenty of theories. Zhou had backed Bo Xilai, the charismatic former Chongqing municipality boss. Bo was a candidate for higher office before he was jailed for life on charges including bribery after his wife was convicted of murdering a British businessman who allegedly helped ferry the family wealth abroad.

“In a sense Zhou’s case was triggered by the Bo Xilai scandal, as they’re political allies,” said Cheng Li, director of China research and senior fellow at the Brookings Institution in Washington. “They’re both hardliners, they were both versed in internal security measures such as phone-tapping.”

No Tears

One difference is “nobody will shed tears for Zhou,” Li said, adding that Bo, who hewed to Maoist doctrines and oversaw a crackdown on organized crime, had some sympathy among cadres.

Steve Tsang, director of the China Policy Institute at the University of Nottingham, said party insiders told him the last straw might have been when Zhou ordered the phones of Xi and other Politburo members tapped ahead of the 18th Party Congress in November 2012, when Xi was appointed secretary general.

Just 22 days after Xi’s appointment, the government announced the detention of Li Chuncheng, one of two deputy party secretaries of Sichuan, the western province famous for its spicy food and rugged mountains.

Sichuan’s capital, Chengdu, garnered headlines in 2012 as the location to which Bo Xilai’s onetime police chief Wang Lijun fled with evidence that Bo’s wife was involved in the murder of Briton Neil Heywood. Wang took refuge at the U.S. consulate in the city.

Sichuan Days

Zhou served as provincial party chief of Sichuan, one of China’s four most populous provinces, from 1999 to 2002.

Li Chuncheng was the first of at least 18 Sichuan-based politicians and business executives tied to Zhou who have been detained, ousted or probed. Among them was Tan Li, vice governor of Hainan at the time of his downfall, who worked for 37 years in Sichuan, including as propaganda chief in Chengdu.

By August last year, the investigation turned to the oil industry, where Zhou had risen through the ranks for three decades from a technician in Daqing, China’s most important oilfield, during the Cultural Revolution. He ascended to lead what later became China’s biggest oil producer, China National Petroleum Corp.

The highest-ranking executive detained in the probe came in September with the fall of Jiang Jiemin, 58, the former chairman of China National Petroleum, who had been promoted to head of a commission overseeing state-owned companies.

Oil Industry

At least 13 oil-related executives have either been punished or are under investigation. More than a hundred officials and staff were queried by disciplinary agents, according to Caixin magazine.

By the end of 2013, Zhou was powerless to stop the spread of stories on China’s internet and in its media that he was destined for a fall. His family became tabloid fodder in an apparent attempt to turn public opinion against him.

Zhou Yongkang’s son Zhou Bin was reported by Caixin magazine to have done business deals with Liu Han, the Sichuan businessman sentenced to death after being convicted of running a billion dollar mafia empire involved in murder and extortion. Zhou Bin had attended university in Texas before moving back to China to dabble in tourism and oil-services companies with his wife and in-laws.

Chinese tourists started flocking to the outskirts of Wuxi, the ancestral Zhou family home in coastal Jiangsu province, after Chinese media broke the story of arrests of family members, upending a longstanding taboo on reporting on senior officials’ private lives. During his high-school years in Jiangsu, Zhou changed his name to Yongkang -- meaning always safe and healthy in Chinese -- from Yuangen because a classmate had the same name.

Family Business

Zhou’s two brothers are accused of using his influence to get rich, according to the Beijing News. Photos and a video taken from a drone flight showed a large, white-walled compound ringed with security cameras. Family members owned luxury cars and a dealership for high-end liquor, and for a price would use their connections to settle business disputes, reports in state media said.

By December, the CCDI started piercing Zhou’s stronghold in the security sector, detaining an ex-deputy minister, Li Dongsheng. Li, a former propagandist with no law-enforcement experience who had worked for the state broadcaster CCTV for more than two decades and then the propaganda ministry, was promoted by Zhou to the public security ministry in 2009.

Li had introduced Zhou to his second wife, a journalist for CCTV’s finance channel 28 years his junior, the South China Morning Post reported, citing a person close to the Supreme People’s Procuratorate. The two married in 2001.

TV Network

Since then, other CCTV employees have been accused of corruption, including the popular host of a business program, Rui Chenggang -- famous for his nationalist criticism of a Starbucks Corp. coffee shop’s presence in Beijing’s Forbidden City -- and his boss.

The investigation later swept into north China’s coal-rich Shanxi province. A provincial mayor was accused of buying his position from a Zhou relative, according to state media. Eventually, at least 15 senior provincial officials were toppled, including the brother of former President Hu Jintao’s top aide.

China’s media dropped any pretext that Zhou wasn’t the target on March 14, when the Global Times, which is owned by the party’s official People’s Daily, was the first Chinese outlet to identify explicitly Zhou Bin’s father as Zhou Yongkang.

Final Step

The final preparatory act came July 2, when three of Zhou’s former personal secretaries were expelled from the party for corruption and had their cases forwarded to prosecutors on the same day. Tan Hong was a senior member of the leadership’s Secret Service-like bodyguard. Yu Gang was one of the party’s top public security officials. Ji Wenlin was Zhou’s longest-serving secretary, assisting him from 1998 to 2008 before getting promoted to vice governor of Hainan province.

In all, six of Zhou’s former personal secretaries, who perform a function similar to chiefs of staff in American politics and who are groomed for higher office, have been investigated. They include a former vice governor of Sichuan and two senior executives at China National Petroleum.

“They can be very powerful,” Zhu at the Chinese Academy of Governance said of personal secretaries. “They are often treated like the extended family of the leader and nobody would want to offend them.”

The day after the three cases were formally handed over to prosecutors, the People’s Daily website ran a flowchart illustrating “how to beat big tigers” in the Politburo. At the bottom of the diagram was a pithy conclusion: “No special zone for corruption, no off-limits zone for anti-corruption.”

Alumni Reunion

The last time Zhou was seen publicly was at an alumni reunion on China’s National Day, Oct. 1, at the China University of Petroleum.

He has been under virtual house arrest since December, according to a South China Morning Post report.

During the 18-month campaign against Zhou and his networks, none of China’s senior or retired leaders spoke publicly about his fate, a sign of implicit consent for his downfall. Fewsmith said the July 29 announcement means “everybody has now signed off on the handling of Zhou’s case,” probably including all the retired members of the Politburo Standing Committee.

“There is consensus within the party that it must purge itself, and that if it doesn’t then its crisis will deepen,” said Kerry Brown, the director of the China Studies Centre at the University of Sydney. Xi and his supporters concluded that Zhou and his clan “grew corrupt because they did not adhere sincerely to orthodox ideology and were looking after themselves,” Brown said. “So they needed to be taken out.”

To contact the reporters on this story: Ting Shi in Hong Kong at tshi31@bloomberg.net; Shai Oster in Hong Kong at soster@bloomberg.net; Aibing Guo in Hong Kong at aguo10@bloomberg.net

To contact the editors responsible for this story: Chris Anstey at canstey@bloomberg.net Neil Western

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.