Saturday, August 04, 2007

Will the saga ever end? Even after Chen Liangyu's expulsion from the CCP, the press reports a new arrest in the Shanghai social security case. The former personal secretary of deceased Vice Premier Huang Ju--Wang Weigong-- was just arrested for involvement in the social security scandal. Interestingly, Takungpao, a Hong Kong based pro-CCP newspaper, immediately published an article stating that Huang Ju had denounced Wang to the Central Committee before his death. Clearly some fast thinking Jiang faction member ordered Takungpao to issue the story to prevent Wang's arrest from implicating Huang Ju. In a way, Huang is still very much at the heart of the factional game even after his death. If Huang Ju is implicated posthumously, the Shanghai gang would not have much of a leg to stand on and would have to cave into the demands of Hu Jintao. As long as he remains unsullied, they can at least bargain for some concessions from Hu. But will Hu take the next step to implicate Huang Ju and his family? If he is confident of his control over the military, he may take the next step, but Zhou Yongkang has been busy gathering evidence against Hu as well, so we'll see.......

China arrest takes scandal into politburo
Financial Times
By Richard McGregor in Beijing

Published: August 3 2007 18:01 | Last updated: August 3 2007 18:01

The former political secretary to a member of China's politburo has been detained in a widening probe over misuse of Shanghai's pension funds, elevating the scandal for the first time into the inner-circle of the Chinese leadership.

The detention of Wang Weigong, reported by a Chinese financial magazine on Friday, comes ahead of the five-yearly Communist party congress in October, which will choose the country's senior leadership until 2012.

Mr Wang had headed the office in Beijing of Huang Ju, who until his death earlier this year was the fifth-ranked member of the nine-member politburo standing committee, China's elite leadership group.

Before moving to Beijing in 2002, Mr Huang was the mayor and then party secretary of Shanghai. Mr Wang worked for him in both capacities.

The scandal has already led to the arrest and expulsion from the party of Chen Liangyu, the former Shanghai party secretary and the highest ranking official to be toppled for corruption in a decade.

In line with disciplinary practices, the party investigates and passes judgment on officials detained for corruption before handing them over to the criminal justice system, which ritually tries and then sentences them.

The latest arrest gives further weight to the conventional explanation of the unfolding scandal, which is regarded as an effort by Hu Jintao, the president, to take down the once dominant "Shanghai gang".

Jiang Zemin, Mr Hu's predecessor, hailed from Shanghai and surrounded himself in Beijing with officials trained in the city. Mr Hu has an entirely different power base.

Shanghai officials have sought to play down the implications of the purge of more than a dozen former top officials from the city over the past year. A retired senior Shanghai official said that the central government had singled out the city only because Mr Chen's behaviour had been so blatant.

"This is not about Shanghai, but about sending a message to other cities, where there are similar problems," said the official. He said that Mr Jiang had helped to initiate the investigation into Mr Chen.

The party congress will usher in a new leadership team, both in the politburo and also among the four vice-premiers, which are key day-to-day policymaking posts for the economy.

Although there are a number of favoured candidates for promotion into the new leadership group, the outlines of Mr Hu's new team are not yet clear.

The scandal, plus the leaking to a Beijing-backed newspaper in Hong Kong last week of details of Mr Chen's crimes, is a sign that the struggle over the new line-up is intensifying.

Copyright The Financial Times Limited 2007

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