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Friday, June 30, 2006

Hu's Anti-Corruption Campaign Has Hidden Aims


The dominant faction in China's ruling Communist Party is waging a phony war on corruption as a cover for its efforts to consolidate power and continue capitalist-style economic reforms in the face of a growing leftwing opposition.

China's President and "Paramount Leader" Hu Jintao heads the dominant faction, which is known as the Qinghua clique.

In a nationally televised speech Friday marking the 85th anniversary of the founding of the party, Hu referred to fighting corruption and efforts to create a clean government as a "strategic mission."

"If a ruling party cannot maintain flesh and blood ties with the people, if it loses the people's support, it will lose its vitality," Hu said.

His latest victim: a top-level Chinese military official, sacked for corruption after his mistress informed on him to the authorities. The official Xinhua news agency reported that Wang Shouye was dismissed as deputy commander of the navy and expelled from the national legislature. Xinhua said the investigation into Wang began in January.

The news agency didn't offer details of the case against Wang or say what criminal charges he faced; but other commanders have been accused of embezzlement, smuggling or taking bribes from contractors or officers seeking promotion.

Although thousands of government and Communist Party officials have been punished in recent years for corruption offenses--and some have even been executed--a case against a senior member of the politically powerful military is rare.

Earlier this month, in an unrelated case, Xinhua reported that Liu Xiaoguang, the head of a Chinese state-owned real estate company, Beijing Capital Group, was being investigated for corruption. The case is most probably linked to the recent arrest of former Beijing Vice Mayor Liu Zhihua, who is being investigated for corruption in connection with his control of a $42 billion construction project to upgrade infrastructure for the 2008 Beijing Olympic Games.

Chinese media reported that Liu kept a "pleasure palace" populated by young concubines.

There's more: China's National Audit office has disclosed $1.1 billion worth of fraud at the Agricultural Bank of China, one of four state-owned giants. The state audit supposedly also found evidence of $1.8 billion in improperly handled deposits and $3.5 billion in illegal loans.

The National Audit Office also reported that Chinese government officials lost more than $1.5 billion last year through corruption and poor tax collection, including $685 million looted from the central budget by 48 government departments.

Widespread, worsening corruption is causing tremendous resentment among the population at large, especially in depressed rural areas.

Left-leaning party leaders and officials blame the country's capitalist-style reforms for the corruption. They advocate a return to Mao-era "socialist principles."

In this context, the anti-corruption campaign is partly an attempt by Hu and his clique to steal the thunder of the Left. But the crackdown is also aimed at people tied to the "Shanghai clique" headed by Hu's predecessor, Jiang Zemin, who still wields considerable influence in the party. Five or six of the nine members of the Politburo Standing Committee are considered members of the clique, whose members rose to prominence in the Shanghai city administration under Jiang.

Ahead of next year's party congress, Hu is seeking to isolate and diminish the power of the faction, many of whose members are known for their lavish lifestyles.

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