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Monday, September 25, 2006

So, here I was, going about my boring life, and BAM, we find out that Shanghai Party Secretary Chen Liangyu has been dismissed. This time, there would be no face-saving "illness" or "promotion" to the CPPCC. Like Chen Xitong before him, the Hu-Wen leadership is using Chen as a way to send a credible signal to all of the local officials about who is in charge. Chen will face criminal prosecution and go to jail. At this point, the official annoucement still does not accuse him of embezzlement personally, only that he facilitated and protected those around him who misused public funds. But the announcement suggests that the CDIC is just starting to investigate the case of Chen, so they might "find" more incriminating evidence, depending on the outcome of elite political bargain.

So now what? The main question of course is whether they will go after Huang Ju or his wife, who by many accounts is deeply involved in siphoning social security funds as the vice chair-woman of the Shanghai Charity Trust. I tend to agree with those who say that the bucks will stop at Chen Liangyu, but then I thought that it would stop at Qin Yu. There was a rumor from a few months ago about the disappearance of Huang Ju having more to do with his wife's corruption problems than with his own illness. Perhaps there is some truth to the matter. Perhaps the bargain between Jiang and Hu was that Huang Ju would stay in the Politburo Standing Committee until next fall while Chen Liangyu is sacrificed. Soon after Huang Ju's return from his "illness," the CDIC began to investigate the Shanghai case. There is some sign that Huang Ju is nervous though. Just two days before Chen's arrest, Huang attended a forum on social security, where he urged speedy building up of the social security system.......

Again, the question becomes who will replace Chen. Currently, Han Zheng is standing in for Chen as acting secretary. This choice is interesting since it suggests that Hu-Wen are comfortable with maintaining a key Shanghai cadre in power instead of rotating in a big fish from somewhere else (as was the case after Chen Xitong was dismissed). However, this might be temporary to calm the fears in the market, which so far is fairly stable. Over time, we will find out who the permanent replacement of Chen is in Shanghai. There is some chance that they have decided to keep Han Zheng, partly because he was known as a rival of Chen Liangyu and partly because Wu Bangguo probably spoke up on his behalf. If they are replacing the party secretary, some possibilities include Wang Zhaoguo, Liu Yandong, Wang Qishan, and Dai Xianglong (okay, very long shot). Beside these veteran figures, Hu might choose to take this opportunity to sneak one of his favorite underlings into the Politburo: Li Keqiang or Li Yuanchao.

People's Daily
中共中央决定对陈良宇同志严重违纪问题立案检查



2006年09月25日13:07 【字号 大 中 小】【留言】【论坛】【打印】【关闭】


  新华社北京9月25日电 9月24日,中共中央政治局召开会议,审议了中共中央纪律检查委员会《关于陈良宇同志有关问题初核情况的报告》。

  根据目前调查的情况,陈良宇同志涉及上海市劳动和社会保障局违规使用社保资金、为一些不法企业主谋取利益、袒护有严重违纪违法问题的身边工作人员、利用职务上的便利为亲属谋取不正当利益等严重违纪问题,造成了恶劣的政治影响。

  中央决定,依据《中国共产党章程》和《中国共产党纪律检查机关案件检查工作条例》的有关规定,由中共中央纪律检查委员会对陈良宇同志的问题立案检查,免去陈良宇同志上海市委书记、常委、委员职务,停止其担任的中央政治局委员、中央委员职务。

  中央认为,对陈良宇同志严重违纪问题的查处,充分表明我们党加强党风廉政建设和反腐败的坚强决心和鲜明态度,不论是谁,不论其职务多高,只要触犯党纪国法,都要受到严肃追究和严厉惩处。

  中央强调,广大党员干部特别是领导干部一定要进一步认识反腐败斗争的长期性、复杂性、艰巨性,牢固树立正确的世界观、人生观、价值观和权力观、地位观、利益观,常修为政之德、常思贪欲之害、常怀律己之心,真正经受住权力、金钱、美色的考验。各级党组织要切实加强对党员干部特别是领导干部的教育和管理,加强制度建设和体制创新,加强对权力运行的制约和监督,毫不动摇地推进党风廉政建设和反腐败工作。

  中央相信,在以胡锦涛同志为总书记的党中央坚强领导下,经过全党同志和广大人民群众不懈努力,一定能够有效遏制腐败现象的滋生蔓延、促进党风和社会风气的根本好转,一定能够把中国特色社会主义伟大事业不断推向前进。 

Comments:
Thanks for insightful commentary on Chen's arrest. It's a little surprising that Chen was removed, but mostly that it was so soon in the latest crackdown on corruption. There are rumors that he had significant ties to foreign firms. I'm hoping you can illucidate the impact that Chen's removal will have on foreign businesses. Are there any that would be particularly hard hit? The Shanghai stock market took a dip early this week, but will there be long term effects? Thanks for a great blog.
 
Do you see Western companies getting caught up in this?
 
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