The harder they fall
Sep 28th 2006
From The Economist print edition
What the firing of Shanghai's party boss says about China
ABROAD, China likes to portray itself as a responsible power to be reckoned with. But at home its Communist Party is still a law unto itself. As Shanghai's once-powerful party boss, Chen Liangyu(The People’s Daily has a profile of Mr Chen.), is now experiencing for himself, party investigators have the power to detain members suspected of wrongdoing indefinitely, with no access to lawyers. The party will decide whether to forgive any sins that have been committed, or hand over the accused to the police. The verdict will be reached in utter secrecy.
Such is the spine-chilling world in which Mr Chen, until last week in charge of China's showcase of modernity, now finds himself (see article). He is accused of involvement in the misuse of $400m of Shanghai's pension fund, of helping relatives in criminal ventures and of covering up law-breaking by aides. But his political demise is about more than alleged sleaze. In power struggles at the top of the Chinese leadership, charges of corruption are often a convenient weapon. Meanwhile, corruption is made worse by the party's handling of China's fast-changing economy.
Getting the wrong sort of grip
President Hu Jintao is fighting to impose his authority on wayward localities which are defying efforts to rein in economic growth and prevent a frenzy of ill-considered investment that could further cripple the banking system with bad loans. Before a five yearly party congress late next year, Mr Hu also wants to install loyalists in key posts in the provinces. Mr Chen owed his job in Shanghai to Mr Hu's predecessor, Jiang Zemin, making him an obvious target. He is also widely rumoured to have attacked Mr Hu's economic-control measures at a meeting of the ruling Politburo two years ago.
By taking on Mr Chen—the first Politburo member to be dismissed in more than decade—Mr Hu is flexing his muscles. But he is also showing how little the party has changed. When he first came to power in 2002, he seemed to signal that he would make the party more open and subject to the rule of law. Instead, its investigations are still driven by politics. Corruption is just as rife. The 200-member Central Committee is supposed to monitor the work of the 24-member Politburo headed by Mr Hu, but at its annual meeting next month it will rubber-stamp whatever is put before it.
Mr Hu's difficulties in taming the economy—it grew by 11.3% year-on-year from April to June, its fastest quarterly rate in more than a decade—show how far the party has yet to go in embracing market mechanisms. It far prefers to manage by administrative fiat—issuing orders to clamp down on this or that type of investment—rather than allow interest or exchange rates to do the job. That encourages local officials to beg for special favours. More than 5,000 localities from provincial down to county level have opened offices in Beijing in recent years, spending some $2.5 billion annually on lobbying, according to China's media—and fuelling corruption.
Shanghai has prospered on Mr Chen's watch. He helped it win the right to host the World Expo in 2010. But Shanghai's citizens will not mourn his fall. There is deep cynicism in Shanghai and the rest of China about the probity of party officials. There is also great scepticism that the party can do anything about it. By lashing out at Mr Chen, while resolutely eschewing a free press, an independent judiciary and competitive elections, Mr Hu does nothing to reassure.