Wealthy being extorted in China

By Paul Lin 林保華
Sunday, Jun 06, 2010, Page 8

The truth behind the recent spate of suicides at Foxconn plants in China remains unclear because Beijing has worked hard to distract attention from the issue. However, the effects of the suicides cannot be underestimated, as they may yet give impetus to the moribund Chinese labor movement.

As a result, the Chinese Communist Party’s (CCP) Propaganda Department has ordered local media outlets to refrain from reporting on the issue without prior permission. This is a missed opportunity.

Foxconn Technology Group chairman Terry Gou (郭台銘) is one of the richest men in Taiwan. Not long ago, Hong Kong’s richest man, Li Ka-shing (李嘉誠), and his son, Richard Li (李澤楷), were accused by Beijing of hoarding land, and the younger Li’s company was even fined.

What these cases have in common is that it shows the extent to which wealthy individuals from Taiwan and Hong Kong have become targets in China because they lack political backing and their interests conflict with those of Chinese officialdom. These businesspeople can easily be used as scapegoats by the CCP.

However, the rich in China are even more unlucky. Wealthy Chinese businesspeople often find themselves in serious trouble and some even end up in jail. A case in point is the former chairman of GOME Group, Huang Guangyu (黃光裕), who was recently jailed. Others involved in the same case included the former president of China’s Supreme People’s Court, Xiao Yang (蕭揚), but he was not prosecuted because the authorities were worried about the possible ramifications of locking him up.

In contrast, the vice president of the Supreme People’s Court, a personal assistant to the public security minister and local and judicial political leaders all resigned. Shanghai’s richest man, Zhou Zhengyi (周正毅), also fell from grace as a result of a power struggle between Chinese President Hu Jintao (胡錦濤) and former president Jiang Zemin (江澤民).

China’s richest people are those unlucky individuals who have been listed in misleading reports by Chinese and foreign financial magazines. Many of them run listed companies, which means their wealth can be calculated.

However, because China is a totalitarian state, the accumulation of wealth depends on CCP connivance and collusion with government officials. This in turn gives the CCP access to information that can be used against businesspeople any time.

So who really are the wealthiest people in China? The CCP-appointed senior leaders of China’s state-owned enterprises.

Their wealth is equal to that of any of the world’s wealthiest companies, but it is not visible to outsiders and therefore not listed on any ranking. If these individuals were ever to be ranked it would have to be on a list of “China’s most corrupt people.” At the top we would probably find the family of Deng Xiaoping (鄧小平).

Following his death, the Deng family was pressured by Jiang, but he failed to follow up on any suspicions of impropriety in order to pave the way for his own people. We know this because Jiang’s family succeeded Deng’s as the most corrupt in China. In the power struggles between Jiang and Deng and Hu and Jiang, the families of former premier Li Peng (李鵬), former vice president Wang Zhen (王震) and former premier Zhu Rongji (朱鎔基) benefited greatly because they were deeply involved in the struggle for power. They were therefore able to amass vast fortunes from business leaders across a wide range of industries.

The families of Hu and Chinese Premier Wen Jiabao ­­(溫家寶) have not yet amassed enough wealth to make the list because they have not been in power long enough. Private business leaders or less powerful members of the bureaucracy are used as scapegoats by anonymous wealthy political leaders to conceal their own ill-gotten gains.

Gou was smart enough to show humility and offer 30 percent pay raises to Foxconn employees. This will eventually result in Chinese workers demanding more rights and the protection of their interests from Taiwanese companies doing business in China. Media reports have also suggested that it is opposition from businesses controlled by the central government that has prevented the passing of a law on minimum wage in China. If the suicides at Foxconn result in improved circumstances for Chinese workers, at least something good will have come out of this unfortunate situation.

However, after witnessing Gou’s recent woes, many Taiwanese businesspeople have probably given up on any dreams they might have had about the benefits of signing an economic cooperation framework agreement with China.


Paul Lin is a political commentator.



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