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Chongqing Officials Mired in Web of Sex, Lies and Video

Struggling Businessman’s Million-Yuan Scam Used Women to Compromise Government Figures

When a sex video involving a Chongqing official went viral on the Internet on November 2012, like millions of others, Tan Linling clicked out of curiosity.

To her surprise, Tan recognized the woman in the video as a former colleague and friend named Zhao Hongxia. Tan immediately contacted Zhao and told her about the nation’s hottest news: a video recording of Lei Zhengfu, Communist Party secretary of Beibei District in the large southwestern region of Chongqing, having an extramarital affair. The video was put online by a Beijing-based citizen journalist.

Tan and Zhao decided to meet at a sports stadium to discuss how to handle the reemergence of an unpleasant episode both thought was long over: a scheme to blackmail more than twenty Chongqing officials with sex videos. The two women, who both married in recent years and had children, talked for an hour and decided to do nothing. They had no idea the video would eventually put them in the national spotlight, trigger a legal storm that affected more than twenty officials and reopen a case once sealed by the city’s now disgraced police chief Wang Lijun.

A screen grab from the leaked sex tape of Lei Zhengfu, a former C.C.P. secretary of Chongqing’s Beipei District.

On September 5, the second trial in the sex video case started in Chongqing. In late June, six defendants, including Zhao and Tan, received up to ten years in jail for extortion. Some have appealed, and some argued that what they did amounted to combating corruption.

Indictments and evidence presented by prosecutors present an intriguing story involving sex, business and politics. The cast includes a businessman, more than ten women and a dozen officials, and Chongqing’s police boss. The story was set in a city at the center of a political storm.

Xiao, the Boyfriend’

It started with a Sichuan businessman born in Linchi County originally named Yan Zongyi. Believing the name to be unlucky he changed his name to Yan Su, then to Xiao Ye. Initially unsuccessful in his hometown and the nearby city of Guang’an, Xiao moved to Chongqing.

In 2005, Xiao and his cousin Yan Peng set up a company called Hong Kong Hualunda Apparel in Chongqing with registered capital of 1 million yuan. Including “Hong Kong” in the name was a ploy by Xiao, the executive director of the company, to fabricate his personal history. Xu Sheqing, a friend of Xiao’s from Henan Province, was the director of trustees. Xu, the human resources manager, recruited only young and beautiful women.

In 2007, Zhao was looking for a job and met Xiao at a dinner. She was impressed when people described Xiao as a rich boss with powerful connections in the city government. Xiao asked for Zhao’s phone number after the dinner and called her several days later. Zhao rejected the first several calls, but later agreed to attend a hotpot dinner with Xiao and several of his employees.

“I had just one beer and completely passed out,” Zhao told prosecutors. She was taken to a hotel room by Xiao’s employees, and later Xiao forced himself on her. Zhao said she was very upset the next morning, but Xiao said he was in love and asked to be her boyfriend. Zhao agreed.

About a month later, Xiao gave her 5,000 yuan and asked her to work in Hualunda. There was one condition: don’t let others know the two were intimate. Zhao took the offer and obeyed the rule. 

A few months later, something similar happened to Tan: a dinner, alcohol, sex, a new boyfriend, and a job offer. Tan became an administrative assistant at Hualunda. Through a similar process, the company recruited more than ten girls, prosecutors said, and most saw themselves as Xiao’s girlfriend. Xu told the police: “Girls like rich guys.”

From Xu, Yan and other figures at the company, Zhao and Tan learned about Xiao’s fabricated back story, falsely claiming he was a Hong Kong native who moved to the mainland when he was eight years old but still had many rich relatives in the former British colony. The story also went that Xiao was ambitious and passionate, but was an unlucky widower whose wife died years earlier.

In fact, Xiao married four times. His current wife, who is eighteen years younger than him, is Chai Si. She often became upset when she found messages on Xiao’s phone that he had sent to other women. The women only helped the company deal with business matters, Xiao told his wife. Chai also worked for the company, but was known as Xiao’s sister and used the name Xiao Cai.

Zhao, Tan and other female employees had a simple job: perform secretarial chores in the daytime and entertain officials at dinners and karaoke bars at night. Each adopted a fake name—Zhao went by Zhao Xiaoxue—and a false back story, usually that they were recent college graduates looking for jobs.

Xu, the Mastermind

But dining and entertainment were only the beginning of Xiao’s plan. Zhao said that Xiao often complained about the company’s dire situation, indicated he was short on cash and asked her to “help him and the company to get out of trouble.” She didn’t think she was capable of helping, until one day Xiao showed her how. It involved a video clip.

The video he played in his office featured sex scenes recorded by a secret camera. Zhao watched the clip with Xiao and Yan. Yan told Zhao that the woman in the video was his wife, a previous employee of the company. Sleeping with officials blessed the company with contracts, Zhao recalled Yan saying. He summed it up this way: “Now we have houses and cars. It’s a lucrative business.” To convince Zhao to play along, Xiao promised to marry her and split the company’s profits with her.

It took days of persuading, but Zhao finally agreed. Tan was also enlisted. She declined at first, but relented when Xiao threatened to kill her entire family.

Xu devised the scheme as early as 2007. By secretly recording sex videos of government officials, then confronting the officials, the company could build powerful connections to drive its business forward, Xiao told investigators.

Xu recruited the women, then was responsible for arranging hotel rooms and setting up the cameras. The scheme usually involved Xu, Yan and Wang Jianjun, an assistant of Xiao’s, breaking into a room at some point to catch an official in bed with a women. Xiao would play a good guy who came along later and handled negotiations.

Xu bought the private cell phone numbers of more than 200 Chongqing officials from a government employee. Xiao and Xu selected a handful of targets, mostly the first- and second-in-command at government offices or state-owned enterprises (SOEs). They then had the girls sent out scripted messages from company cell phones.

The initial message went like this: “Dear leader, I met you before and was very impressed by you. I just graduated from university, changed jobs and stopped working at a modeling company. Now I’m at Hualunda Group. Hope we can have dinner when you are free.” And the follow up message after a week was: “Dear leader, a week has passed. Are you busy with work?” The women sent messages on holidays, weekends and other seemingly opportune times until they got a response.

Yan handled purchases of equipment at a large wholesale market in Chongqing. He bought lighter-size spy cameras and connected them with MP4 players to store the video file. The gadgets were put in the women’s handbags, whose gaudy patterns disguised a hole for the camera. Yan trained Zhao and the other women to operate the cameras. The key, he told them, was to get the man’s face in focus.

Lei, the Victim’

Zhao’s first target was Lei Zhengfu, the party secretary of Beibei District. Lei told the police that he received many messages from a woman named Zhou Xiaoxue in October 2007. She described herself as a salesperson at Hualunda and repeatedly asked to meet Lei. Lei said he refused many times, but finally agreed to meet at a tea house in January 2008. They talked for a few hours and parted company, Lei said. The second meeting was at karaoke room, which ended with the pair agreeing to date.

Zhao, however, told the police a different story. She said Lei asked her out after she sent the first message. They indeed met for tea, she said, but afterward Lei gave her more than 1,000 yuan to check into a hotel and they had sex. The camera in her bag recorded everything, she said, but Xiao later decided that the video quality was poor, meaning Zhao and Lei would have to meet again.

So, Zhao said, she asked for another meeting at the same hotel a week later. This time the recording was clear. Other meetings followed. Chongqing police found that since 2008 Zhao checked into hotels thirty-two times using her ID card.

On February 14, 2008—Valentine’s Day—Zhao called Lei again and asked to see him. They had tea, Zhao checked into a hotel and sent Lei the room number. The otherwise romantic meeting was interrupted by a knock on the door, which Zhao answered. Two men rushed in and beat Lei. They yelled at Zhao, saying she had been unfaithful. One man claimed to be Zhao’s boyfriend, and the other said he was a private detective. They showed Lei video clips of Zhao and Lei having sex.

The two men told Lei that they would make the video public. Lei was nervous, and asked Zhao what to do. Zhao, now in tears, said “big brother Xiao” could handle the situation. About twenty minutes later, Xiao arrived at the hotel room. He sent the two men away and told Lei that he could handle the problem. “You can leave first,” Xiao told Lei.

Lei thought his troubles were over. But they had just begun. Two days later, Xiao asked Lei to meet him in the lobby of the same hotel. Xiao told him he had destroyed the recording and gotten the matter under control, but his company was in financial difficulty and he hoped Lei could get him 5 million yuan.

“I immediately knew that I was being blackmailed with the cheating thing and the sex videos,” Lei told police. He complied, but bargained the payment down to 3 million yuan. Soon afterward, the founder of Yongzhi Group, a trading company in Lei’s jurisdiction, wired Xiao 3 million yuan.

Lei was not alone. At the end of 2008, Zhou Yuntian, the chairman and party chief of state-owned Chongqing Real Estate Group was Tan’s target. In that episode, Xiao asked for 2 million yuan.

“I found the girl very lovely and trustworthy,” Zhou said. “She didn’t ask me for anything and I thought she enjoyed being with me. Once Xiao has evidence against me, for the sake of my career I borrowed 2 million yuan from relatives to give him.”

In late 2012, the sex video of Lei was put online. Two months later, eleven government officials and executives of SOEs were sacked for their involvement in the scandal. By May this year, the number rose to twenty-one: fifteen from government and six from SOEs.

Lei lost his membership in the Communist Party and was charged with taking 3 million yuan bribes. Two other officials were investigated for corruption, and the rest received warnings for “violating socialism’s moral rules.”

Wang, the White Knight

While Xiao was busy trapping officials, Chongqing police were building a massive intelligence network. Wang Lijun, then the police chief, told the media in 2009 that the system would allow police to search the information of all 1.3 billion people in the country. Within four minutes, he bragged, the information of at-large criminals could be searched.

Wang later fell out with his boss, former Chongqing party chief Bo Xilai, an episode that saw Wang flee to the U.S. consulate in nearby Chengdu, Sichuan Province. (In 2012, Wang was sentenced to fifteen years in prison for bribery, abuse of power and defection.)

It is not known how Wang came to know of the sex tape case. One explanation was that Lei grew tired of Xiao’s repeated blackmailing and reported it to Wang. Other insiders say Wang intercepted phone messages between the women and officials with his vaunted surveillance system.

What is certain is that Wang told his deputy, Guo Weiguo, to set up a special task force. He wanted Guo to wrap up an investigation in two weeks and hand over all the video recordings. Wang told Guo that he would report the case to the Chongqing party committee before making any decisions, but there is no evidence he did this. Evidently, Wang used the scandal to bring the officials involved under his control. (Last year Guo was sentenced to eleven years in prison for covering up the murder of British citizen Neil Heywood for Gu Kailai, Bo’s wife.)

In 2009, Xiao and several of his employees were arrested for extortion. However, Wang never gave his underlings clear directions on handling the case and Chongqing police never contacted the victims. A local court convicted Xiao of illegally using an official government stamp and gave him a suspended jail term. His employees were released on bail.

Yonghuang, the Reborn Enterprise

Xiao sent Lei a message as he left a detention center, telling Lei was returning home. “It’s good to be home,” Lei replied. “Live your life well.”

Two months later, Xiao and Lei met in a tea house. Xiao pledged to return 1 million yuan.

The 3 million yuan helped Xiao to pay off his credit card bills, buy a large office space and move into more lucrative businesses. In 2008, Xiao set up a company that carried out housing demolitions. The firm, called Chongqing Taihe, acquired Hualunda in the same year and expanded into eighteen types of registered business, ranging from real estate to selling construction materials.

Xiao renamed the company Yonghuang. From 2008 to 2010, the company’s number of employees jumped from fifty to 604, and its assets ballooned from 52 million yuan in value to more than 1 billion yuan. Part of the secret was government projects. Xiao’s company easily won bids for infrastructure project through information collected by his female employees or help from officials trapped in his scheme. 

After his release, Xiao acquired an organic farming company. He sold Yonghuang to his assistant for 20 million yuan, and made himself a deputy manager of the firm with an annual salary of 400,000 yuan. He also charged Yonghuang 600,000 yuan per year for renting office space. The company, however, was still under Xiao’s control.

Who Leaked the Tape?

Xiao received an urgent call from Yan, his cousin, on November 22 last year. After being caught by the Chongqing police in 2010, Yan left Yonghuang and had not been in contact. Before his arrest, Yan had asked Xiao to return some money he borrowed years earlier, but Xiao refused. In response, Yan stole a sex video from Xiao’s home.

“Every disk had characters on it,” Yan said. “I took the one with Lei’s name because I only knew Lei Zhengfu. I wanted to ask Lei to investigate Xiao’s company.”

The members of Xiao’s old team disappeared after police released them in 2009. Tan had access to a bank account of Xiao’s that had 800,000 yuan in it. She and Zhao each took 300,000 yuan; another three people took the rest. They were all upset that they got so little for working at the company so long.
 
When Yan called Xiao he asked a startling question: “Did you put Lei’s sex video online?”

Xiao was surprised. He did a quick Internet search and found the video. Both Xiao and Yan panicked. They met in Xiao’s office and started yelling at each other, each claiming they were unaware how the video made it on the Internet. The clash lasted for a few minutes, then they thought of another person who might have done it: Xu, the human resources manager. Yan heard Xu had visited Beijing recently, and the independent journalist who posted the video, Zhu Ruifeng, was based in the capital. They asked Xu for a meeting.

Xu was by now chairman of Yongbo, a company he set up after his partnership with Xiao ended. The firm ran the same sort of scam that Hualunda had. Xu even hired some of Xiao’s former employees and asked Tan and Zhao to train employees. They refused.

Xu told Xiao and Yan that he went to Beijing, but said he was not involved in the leak. The three agreed on a solution: hunkering down. Since Web users had already identified Zhao, Xiao said if the police track them down again, Xu should pretend to be Zhao’s boyfriend. He should say he released the tape after a quarrel.

The next day, Yan drove to his ex-wife’s home and asked her for some materials he had told her to keep. It was a stack of video disks wrapped in tape. Yan broke them all and burned the pieces. Yan told police that Xiao had asked him to keep copies of the sex videos. Since police had not asked for them during the 2009 investigation, he kept them all.

Thousands of miles away, Henan resident Wang Qunjiang saw the video and understood what was happening. In October, 2010, Wang had a visitor: Xu.

Xu told Wang that he had left Yonghuang because Xiao failed to follow through on promises to turn over a 10 percent stake in the company, houses and cars as a reward for the sex video scam.

“My boss was not a good guy,” Xu told Wang. “Can you find someone trustworthy to help me punish him?”

Wang said he knew some people in Beijing, including a well-connected journalist.

Xu told police he never trusted Xiao, so he had snuck into his office in early 2008 and took copies of sex videos from Xiao’s computer. They were put on a USB drive and forgotten. Then Xu came across the drive while cleaning house last year.

Xu told police that the reason he chose to release the video with Lei was that he had not been one of the people who broke into the room to confront the official. Also, “getting Lei sacked would definitely be negative for Xiao,” Xu said.

So Wang and Xu drove to Beijing, and Xu met Zhu, the journalist, over lunch. Xu told him that he had many sex tapes of Chongqing officials, including Lei. Xu played clips of the Lei video on his cell phone, and Zhu asked for a copy.

“What would you do with it,” Xu asked.

“You don’t need to worry about it,” Zhu replied.

After lunch was over, Xu put a copy of the video on Zhu’s computer. The next day Xu and Wang drove back to Henan. Days later, Xu saw the clip online.

Within days, Chongqing’s party discipline watchdog confirmed that the man in the video was Lei, who was removed from his public post and put under investigation. Meanwhile, Zhu was lauded as a national hero. He said he had many more videos to release and the leak was assisted by sources in the Chongqing police department.

Lei became a national laughingstock, not only because the scandal, but also because his sexual efforts were somewhat brief. Web users took to calling him the “twelve-second brother.” He contacted Zhu to have the video removed from the Net, but Zhu brushed him off.

On June 28, Lei was sentenced to thirteen years in jail. “I chose the wrong woman and that had a negative impact on the party, the government, society, my family and myself, but it wasn’t a crime,” he said.

The same day, Xiao and five others stood trial. Xiao was accused of extorting 5 million yuan from Lei and Zhou and sentenced to ten years in jail. Xu received a four year term; Yan got three and a half years. Zhao, Tan and Wang Jianjun got suspended sentences.

Xiao, Xu and Yan appealed and faced the court again on September 5. The court adjourned and said it would announce a decision later. Lei’s appeal was heard on September 6. Zhao returned home after spending six months in a detention center.

Caixin Media Company Limited is a media group dedicated to providing high-quality and authoritative financial and business news and information through periodicals, online content, mobile apps,...

By Caixin Staff Reporter Pang Jiaoming. This article was first published by Caixin.

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05.04.13

Earth Moves, China Rallies

CAIXIN

Rapeseed was ripening in the lush fields ringing the village of Renjia when a local farmer, forced from his home, stepped into the sea of green stalks and pitched a tent.Less than a day earlier, the farmer and each of his more than 3,000 neighbors in Renjia had been rendered...

Caixin Media

04.20.13

Bird Flu’s Latest Talons Force Fresh Defense

CAIXIN

A surprise attack by a new strain of the bird flu virus has forced Chinese authorities into the trenches for a two-pronged defense against unseen enemies.The primary threat is the deadly virus that scientists identified as a new strain of H7N9. It first surfaced in February in...

Caixin Media

04.01.13

New Hands Take the Financial Regulation Wheel

CAIXIN

Who’s steering China’s carefully managed financial system? Speculators were busy name-guessing before and for several months after the Communist Party’s 18th National Congress in November.Finally, the dust started to settle with formal appointments announced a few days...

Caixin Media

03.23.13

Achieving Real Progress in How Government Functions

CAIXIN

After months of speculation, the reorganization of the State Council has finally been approved by the National People’s Congress.Under the shake-up, China’s rail business will no longer be managed by the regulator. Three national agencies will be formed or beefed up—on...

Caixin Media

03.09.13

Is Railway Reform Finally On Track?

CAIXIN

Finally, it seems the railways ministry may soon be restructured as part of a wider exercise by the government to streamline its ministries. Putting railway reform on the agenda of this year’s meetings of the National People’s Congress and the Chinese People’s Political...

Caixin Media

02.24.13

Dirty Business for China’s Internet Scrubbers

CAIXIN

Flames of a public relations disaster were licking at the heels of a private equity firm when China’s most notorious Internet-scrubbing company rode to the rescue.Saving the Shenzhen-based firm’s image was not cheap, and it took more than two months to douse the flames of...

Caixin Media

02.23.13

China’s 3D Printing: Not a Revolution—Yet

CAIXIN

Engineers, inventors, and industrial futurists in China are setting sights on a new technological frontier as three-dimensional printing slowly revolutionizes manufacturing.A Beijing University research team, for example, has been working on what industry sources say is a...

Caixin Media

02.04.13

Lights, Camera, Pending IPOs for Filmmakers

CAIXIN

The cameras could be rolling soon for long-anticipated stock listings by the nation’s largest movie producer and foreign flick importer China Film Group, as well as a smaller but ambitious rival, Shanghai Film Group.The state-owned companies’ names were added January 11 to a...

Caixin Media

02.04.13

Defining the Chinese Dream

CAIXIN

A new phase of Sino-American relations is poised to begin now that Xi Jinping has been confirmed as China’s next leader and Barack Obama re-elected U.S. president.In both countries, the debate about foreign policy options has been robust, particularly about the bilateral...

Caixin Media

01.26.13

Garden of Lost Children

CAIXIN

It started with a baby that was left in the doorway of a hospital bathroom. Yuan Lihai took in the girl with a cleft lip while working at a Henan province hospital in 1989. At the department of gynecology and obstetrics, she was paid 20 yuan for every infant she buried. This was...

Caixin Media

01.19.13

Shandong’s Slippery Gutter Oil Man

CAIXIN

It’s oil with an extra something, but there’s nothing virgin about it. Pumped from sewers outside restaurants and drained from dumpsters, it’s cooking oil born from waste both human and mechanical.Known in China as “gutter oil,” it’s commonly used by cooks at greasy...

Caixin Media

01.13.13

Police to Stop Camps This Year, Politburo Member Says

CAIXIN

The notorious system that lets police send detainees to labor camps without trial will be halted this year, said Meng Jianzhu, secretary of the Central Politics and Law Commission, at a conference on January 7.Meng said the Communist Party’s Central Committee would submit its...

Caixin Media

12.28.12

Uncertain Future for Architectural Treasures

CAIXIN

Nestled between mountains and a winding river in a scenic corner of Shanxi province is Zhongyang County, the home of an exquisite Confucian temple built during the Ming dynasty.The colorful wooden temple graced this idyllic valley for hundreds of years before a construction crew...

Caixin Media

12.21.12

When I Met Xi Jinping

CAIXIN

I was informed in late November that the State Administration of Foreign Experts Affairs (SAFEA) had invited me to a whole-day meeting in Beijing to discuss my impressions of the 18th National Party Congress and give advice to the Chinese government. I had no idea the meeting...

Caixin Media

12.16.12

In Bo Xilai’s City, a Legacy of Backstabbing

CAIXIN

A deathbed plea brought an unexpected guest to Li Zhuang’s home one day last March, setting in motion a legal process that soon may clear the Beijing lawyer’s name, throw out a number of convictions, and close a sordid chapter of the Bo Xilai story.The visitor was Gong...

Caixin Media

12.07.12

China’s Dream Team

CAIXIN

The country’s recent leadership transition was widely depicted as a triumph for conservative hardliners and a setback for the cause of reform—a characterization that has deepened the gloominess that pervades Western perceptions of China.In fact, nothing could be further from...

Caixin Media

12.03.12

Toxic Effects and Environmental Nondisclosure

CAIXIN

High-profile talk emphasizing environmental action at the Communist Party’s 18th national congress attracted a lot of attention. News from the November proceedings spurred industry demands for more information and pushed stock prices higher for companies that make environmental...

Caixin Media

11.26.12

When Tradition is Flattened by Policy

CAIXIN

A “tomb-flattening policy” in Henan province has sparked intense controversy, with millions of tombs reportedly destroyed by local authorities in a quest to turn graveyards into farmland.The policy can be seen as a historical extension of land-saving reforms implemented after...

Caixin Media

11.23.12

Asset Transparency Urged to Fight Government Graft

CAIXIN

Calls for government officials to disclose personal and family assets are growing louder in China, mainly in reaction to the rising number of corruption cases affecting officialdom.And some officials are listening. A local Communist Party official in Hunan province, for example,...

Caixin Media

11.17.12

Political Reform: The Way to Go

CAIXIN

Sections of the 18th National Party Congress report that have justifiably generated the most attention are references to political reform.Anyone who did not harbor unrealistic hopes about the congress and its outcome can read the report and find indications of progress in the...

Caixin Media

11.17.12

As 18th Congress Ends, a Peek into the Process

CAIXIN

Over the past twenty years, economist Zhang Zhuoyuan has witnessed and actively participated in building the nation’s economic policy.He participated in the drafting of reports at each of the Communist Party’s three previous national congresses, setting broad policy and...

Caixin Media

11.12.12

Weighing Risks Amid a Wealth Management Boom

CAIXIN

Is China’s wealth management business a booming profit volcano for investors, or just another smoke-and-mirrors pyramid scheme?It’s a question dividing the nation’s bankers and banking regulators as investors of all kinds pour cash into bank-sponsored wealth management...

Caixin Media

11.05.12

Scenes from a Leadership Transition

CAIXIN

Jiang Zemin’s Lyrical MemoryCompiled by Caixin(Beijing)—A glance at off-hours correspondence between two veteran leaders has added a lighter dimension to the recent public appearances of former Politburo members in the run-up to the party’s 18th National Congress.Li Lanqing...

Caixin Media

11.05.12

Thanks, But No Thanks

CAIXIN

On the last day of Zhao Xiang’s short life, her request to donate every organ possible to save the lives of others was brushed off by the president of Shenzhen Liulian Hospital.Zhao, her parents, and transplant specialists from the Shenzhen branch of the Red Cross Society of...

Caixin Media

11.02.12

18 Reforms for the Party’s 18th Congress

CAIXIN

China’s leadership handover comes at a critical moment for society and the economy, and changes are in order.The 18th National Congress of the Communist Party this month comes at a critical time described by economist Wu Jinglian as “a tipping point for China’s economic...

Caixin Media

10.26.12

Below-Belt Blows in Kungfu Restaurant Battle

CAIXIN

The crestfallen former chairman of fast-food restaurant giant Kungfu Catering Management Co. Ltd. is awaiting a verdict after a trial on corporate embezzlement charges apparently instigated by his former business partner’s wife.If Cai Dabiao is found guilty in Guangzhou’s...

Caixin Media

10.19.12

Flying Splinters

CAIXIN

Liu Futang expressed a sense of foreboding just before his recent arrest by posting a microblog entry that began, “If one day I’m invited out for tea, please don’t worry about me.”“Drink tea” is a euphemism in China for an unwanted interrogation by government...

Caixin Media

09.28.12

Bo Xilai Ousted from Communist Party

CAIXIN

The Communist Party has expelled Bo Xilai, the former party chief of Chongqing, who’s been embroiled in corruption allegations since early this year.The Politburo made the decision on September 28, the official Xinhua News Agency said. Bo will next face criminal charges.On...

Caixin Media

09.28.12

Living on Dangerous Ground

CAIXIN

Fractures had long plagued the rocky mountainside next to Huang Daihong’s home. When an earthquake jolted Luozehe County in Yunnan province, Huang watched a large black boulder release a shower of stones that instantly killed her neighbor.The September 7 quake that struck the...

Caixin Media

09.20.12

Hit TV Show Sings Song of Media Model Success

CAIXIN

A reality-talent TV songfest popular in more than forty countries around the world has become an instant hit in China, underpinning enthusiasm for an experimental business model linked to media sector reform.The Voice of China’s debut show in July immediately won high audience...

Caixin Media

09.17.12

How a Protest in Beijing Stuck to the Script

CAIXIN

On the afternoon of September 16, rows of policemen and security personnel in black T-shirts lined Beijing’s Liangmaqiao Road near the Japanese embassy during protests over the Diaoyu Islands controversy. Security guards were visible everywhere, both in the middle of the road...

Caixin Media

09.14.12

Why War is Not a Possibility

CAIXIN

There won’t be a war in East Asia.The United States has five military alliances in the western Pacific. Its allies are South Korea, Japan, Thailand, the Philippines, and Singapore. And American battleships are busy patrolling the seas.Without a go-ahead from Washington, there...

Caixin Media

09.14.12

Moneyless Pensions Yield No Gold for the Old

CAIXIN

SHENYANG—Morning breezes turn chilly in late August, signaling fall’s approach in the Tiexi factory district.For the unemployed men and women standing on sidewalks between a labor bureau office and a park every day at 6 a.m., the change of seasons is a reminder that searching...

Caixin Media

09.07.12

Despite Regulations, Bus Travel Still Risky

CAIXIN

Thirty-six people died recently on a Shaanxi province highway when a double-decker bus slammed into a fuel tanker.The crash underscored ongoing demands for beefing up traffic law enforcement and improving the design of these often-crowded overnight buses, which transport nearly...

Caixin Media

09.07.12

Long Ride for Justice

CAIXIN

Lea Cao had his first inkling that something was wrong when he got a long-distance phone call from relatives in southeastern China.His family members in Fuzhou phoned Cao in New York to say that his parents and brother had failed to arrive at the local train station as scheduled...

Caixin Media

09.05.12

Making a Killing on Herbal Medicine

CAIXIN

Mushroom gatherers converge and crawl on hillsides in Qinghai province every March while foraging for wild caterpillar fungus.Theirs is not a garden-variety morel hunt. Caterpillar fungus is a hard-to-find parasite that infects and mummifies a host before forming a mushroom, the...

Caixin Media

08.31.12

Tall Order in Ordos

CAIXIN

A desert city infamously littered with new but vacant apartment buildings and idle construction sites is getting no relief in the parched climate for local government budgets.Ordos, where local leaders have been trying for years to build a thriving community almost from scratch,...

Caixin Media

08.25.12

Gu Kailai: Getting Away with Murder?

CAIXIN

Closer Look: Nearly Getting Away with MurderBy Zhang JianjingShortly after Bogu Kailai received a death sentence with a two-year reprieve, four former high-ranking Chongqing police officers were sentenced to jail terms ranging from five to eleven years. Each officer was convicted...

Caixin Media

08.18.12

Economist Lin Yifu on State-Sustained Growth

CAIXIN

Standing up to a wave of pessimism about China’s prospects for continuing high-level economic growth is no easy task.But economist Lin Yifu, who recently retired as a senior vice president and chief economist at the World Bank, is holding his ground with a prediction that China...

Caixin Media

08.13.12

We Make It Pour, Declare Cloud-Seeders

CAIXIN

Will it be clear or gray skies today? Increasingly, the answer in China may be decided by the government.The Chinese have been seeding clouds for decades. Airplanes equipped with rocket-launchers and chemicals for inducing rainfall are based in thousands of counties across the...

Caixin Media

08.09.12

Subsidized Cartoons, Comics Tickling Too Few

CAIXIN

Breaking into the animated film industry usually requires a basic plan for blending colorful images and clever storytelling in ways that entertain the public—and make money.Since 2006, however, animated film start-ups in China have done quite well with a lot less effort by...

Caixin Media

08.03.12

Queerly Not Dangerous

CAIXIN

Several authors of a “danmei” fiction website were recently detained by authorities. The injustice is so glaringly obvious that I can’t stop myself from saying something.Danmei (or “boys' love”) fiction is particularly interesting only to a minority. The idea comes from...

Caixin Media

08.02.12

Landlords of the Rings Push Urban Rents Higher

CAIXIN

A twenty-six-year-old woman who moved to Beijing from a distant town for work could be a poster child for urban China’s latest housing market phenomenon: skyrocketing rents.The woman, surnamed Fang, said goodbye to Liaoning province three years ago for a job that paid 2,400...

Caixin Media

07.31.12

Shedding Light on the Solar Crisis

CAIXIN

After Suntech Power Holdings Co. Ltd., a Wuxi-headquartered photovoltaic cell producer, went public on the New York Stock Exchange in 2005, China’s solar industry grew at an astonishing speed. More than 200 photovoltaic product manufacturers are operating in Zhejiang province...

Caixin Media

07.26.12

Mass Medal Preparedness

CAIXIN

China’s Olympic training system demands its athletes give their all—and not expect much in return.It’s a structured, planned, and government-funded system specifically designed to churn out winners.While other countries around the world build Olympic teams with professional...

Caixin Media

07.26.12

Buried Under Water

CAIXIN

Ding Zhijian, a 34-year-old editor at a children’s literature publishing company, was on his way home after meeting a colleague when a horrific rainstorm hit Beijing.Earlier that day, his wife had asked Ding not to leave the house. It was the weekend, after all, and rain had...

Caixin Media

07.19.12

Vineyards Pop Corks on Chinese Wine Investors

CAIXIN

Wine-tasting party conversations among investors in China are increasingly sounding like sour grapes.Some well-heeled wine investors have been anxiously debating whether a price bubble for investment-grade wine is getting ready to burst. Others complain that counterfeiters who...

Caixin Media

07.19.12

More than Medals for China’s Olympic Stars

CAIXIN

China’s best athletes have not only broken records but they’ve hauled in increasingly sizeable cash bonuses from central and local governments for their champion, medal-winning performances at Olympic events.Between 1984, when China re-entered the Olympics arena, and the 2008...

Caixin Media

07.11.12

Economic Ties that Bind

CAIXIN

Labor leader Wayne Swan has his finger on the pulse of the Australian economy as the nation’s deputy prime minister and treasurer, which means he’s well-equipped to explain factors defining the increasingly robust relationship between China and Australia.The period since...

Caixin Media

07.11.12

Railroaded into a Fast-Train Technology Trap

CAIXIN

The professional dreams of a team of locomotive designers and rail systems engineers sped along steel tracks through the countryside of northeastern China.The year was 2003, and high-speed track testing was under way between the cities of Shenyang and Qinhuangdao for the China...

Caixin Media

07.06.12

Land of Vanishing Lakes

CAIXIN

The last lakes in Hubei province are shrinking so fast that no one knows whether new government regulations—the latest leg of a sixteen-year-old environmental scramble—can reverse the disappearing act.The province has been losing its once-bountiful lakes for about a hundred...

Caixin Media

07.06.12

Fighting the Filth

CAIXIN

Has the division of spoils from China’s rapid economic growth become a one-sided affair? The answer is less abstract when one considers the state of the nation’s environment.Waterways are barricaded by garbage, mountains gouged with dusty pits, and the air in many major...

Caixin Media

07.06.12

Powering Down Coal-Fired Economic Expansion

CAIXIN

Slowing nationwide power demand and coal consumption, twin barometers for economic growth, suggest the Chinese economy may be sailing into the doldrums while at the same time changing its course. Electricity use in May rose a relatively mild 5.2 percent compared to the same...

Caixin Media

06.29.12

Barclay’s Diamond Offers an Optimistic Vision

CAIXIN

A calm, confident Robert Diamond discussed financial restructuring in Europe and economic options for the Chinese government during a June 14 interview—thirteen days before the British bank where he serves as CEO, Barclays Group, was fined for manipulating interbank lending...

Caixin Media

06.29.12

Shale Gas Race

CAIXIN

The shale gas revolution in the United States has led to a debate in China over shale gas development. But can the United States really achieve energy self-sufficiency? And if it can, what are the implications for China?Ever since the Nixon era, almost every American president...

Caixin Media

06.27.12

Cash for China’s Homegrown Smartphone

CAIXIN

Xiaomi Mobile Internet Co. has raised US$216 million, its CEO says, raising the total value of the upstart, homegrown Chinese smartphone maker to US$4 billion.If Lei Jun’s claim is accurate, his two-year-old company’s value is close to the market capitalization of Research In...

Caixin Media

06.20.12

China’s Food Fright

CAIXIN

There’s no denying that the gastronomic horizons of Chinese cuisines sometimes verge on the infinite. But on factors of food quality, there’s little subtlety or nuance for safety standards. In the past five years, the number of public food and drug safety scandals has hit...

Caixin Media

06.18.12

Recurring Dreams for the Rule of Law

CAIXIN

On the Beijing campus of the China University of Political Science and Law stands a dramatic monument inscribed with the words of legal expert and former university president Jiang Ping: “Rule of Law for Everyone.”Jiang’s words carry special weight, even from retirement,...

Caixin Media

06.14.12

Uproar over Aborted Fetus Photo

CAIXIN

A Shaanxi Province woman provoked an uproar with an online posting of a photo showing her with her seven-month-old fetus after what she said was a forced abortion.The gruesome photo was reposted across the Internet in China, prompting provincial officials to...

Caixin Media

06.08.12

Road Show Media Bandits Squeeze IPO Hopefuls

CAIXIN

Buying media silence is a common first step toward an initial public offering in China that siphons billions of yuan every year from companies seeking investors in Shanghai and Shenzhen. The phenomenon has been documented by the China Securities Regulatory Commission (CSRC)....

Caixin Media

05.28.12

Rail Builders Shift Interest to Overseas Mines

CAIXIN

After a three-year wait, China Railway Construction Corp. Ltd. (CRCC) recently won permission to launch a major copper mining project in Ecuador. The production agreement signed April 25 by Ecuador’s government and Corriente Resources, a Canadian company jointly controlled...

Caixin Media

05.25.12

Policeman Burned for Dealing With the Devil

CAIXIN

On March 17, the Chenzhou Public Security Bureau announced Huang Bailian had been removed as head of the police department’s drug squad. Huang offered a simple explanation for his sacking: “This is retaliation.” Three years earlier Huang, who is forty-eight years old...

Caixin Media

05.23.12

Identity Crisis Rattles Volvo’s Chinese Owner

CAIXIN

New models bearing the Chinese-owned Volvo badge shared a luxury spotlight at the Beijing International Auto Show in April with perennial stars Mercedes-Benz, BMW, and Lexus.But behind the diamond-studded presentation was confusion over the legal status of Sweden-based Volvo Car...

Caixin Media

05.18.12

Demography and Destiny

CAIXIN

China is facing a demographic reckoning that is approaching a nightmare.For thirty years, the government has been obsessed with keeping population growth down, often resorting to late-term abortions and other brutal measures. The panic now is that China is growing old before it...

Caixin Media

05.18.12

Message in a Bottle for Spirits Maker Moutai

CAIXIN

A glass of Feitian Moutai packs a wallop, which is one reason why the 106-proof baijiu is a hit among influential government officials.They also like Feitian Moutai because a single bottle, thanks to special arrangements between state agencies and distiller Kweichow Moutai Co....

Caixin Media

05.18.12

Era Ends for China’s Legendary Stock Picker

CAIXIN

Investors who closely followed the stock picks of one of China’s most successful brokers are wandering in the wilderness—and wondering what will happen next to their unemployed luminary Wang Yawei.In April, and without warning, Wang resigned from his position as a star public...

Caixin Media

05.09.12

Along the Xiang, It’s Toxic from the Tap

CAIXIN

Water flowing from the Xiang River into the faucets of Hunan Province homes has been dangerous for decades. The central government first classified the river’s water as toxic in the 1980s. But the river was being called the most polluted in China as early as 1978, years before...

Caixin Media

05.04.12

The Ruins of Yuanmingyuan

CAIXIN

On a balmy, moonlit evening in the autumn of 2010, I took my son out to Yuanmingyuan to wander among the ruins. The 150th anniversary of the destruction of “The Garden of Perfect Brightness”—often called the Old Summer Palace—was approaching and I wanted him to see what...

Caixin Media

05.04.12

Chinese Firms Try Scoring with Spanish Soccer

CAIXIN

When NBA journeyman Damon Jones signed a shoe deal with sporting goods maker Li Ning in 2006, he became the first in a long line of American basketball players to win a sponsorship from a Chinese company.Today, China’s Peak Sport Products leads other domestic companies in terms...

Caixin Media

05.02.12

Yearning for the Yuan

CAIXIN

London is forging ahead with plans for yuan-based financial services by developing an infrastructure and banking services that match its ambitions for the Chinese currency. On April 18, the city welcomed the first yuan-denominated bond issuance outside China’s sovereign...

Caixin Media

05.02.12

Garish Flowers of War

CAIXIN

The Flowers of War begins December 13, 1937, with young convent girls fleeing for their lives through a besieged Nanjing shrouded in mist. The first words heard are those of the lead girl Shujuan: “Everybody was running that day but no one could escape the thick fog.”It feels...

Caixin Media

04.25.12

Watery Grave for Yangtze River Fish

CAIXIN

(Beijing)—Fishermen along the banks of the mighty Yangtze River have long spoken of emptier nets and longer waits for a catch.On April 2, an unusual auction held in a downstream city in Jiangsu Province added weight to their bleak reports: A single, 325-...

Caixin Media

04.18.12

Unscathed by Scandals, Official Promoted

CAIXIN

(Beijing)—Although sacked once for the coverup of the 2003 SARS epidemic and a second time for blocking media coverage of the 2008 Shanxi mudslides, Meng Xuenong’s career has always bounced back.According to the website of the China Youth Political...

Caixin Media

04.06.12

China: The Worst Place To Retire

CAIXIN

China is facing a crisis over providing for the elderly as its population ages and the supply of labor diminishes. The Beijing News reported in late March that state-run homes for the elderly in the capital are overcrowded. One had 7,000 applicants waiting for a vacancy,...

Caixin Media

03.29.12

Give Wenzhou What It Needs

CAIXIN

The development of China's private economy requires financial support, especially private financial support. Wenzhou is the home of the private economy. With 99.5 percent of companies falling into the category of small and micro enterprises, one in three people in Wenzhou is a...

Caixin Media

03.19.12

Fair Trade

CAIXIN

A typically opaque investigation can begin with a tip from a Shanghai Stock Exchange official and end with a ten-year jail term for a businessman convicted of insider trading. What happens in between is a carefully guarded secret. Likewise hidden from the public eye are the...

Caixin Media

03.19.12

An Insider's Account of the Wukan Protest

CAIXIN

For months, thousands of villagers in Wukan, Guangdong Province, staged large protests over illegal land seizures, rigged elections and official corruption. The unrest started in September, and as the months wore on they attracted nationwide, then worldwide, attention. Finally,...

Caixin Media

03.09.12

Ex-Officials Battle Plan to Build Nuclear Plants

CAIXIN

Work on China’s nuclear power plants started picking up again about a year after the Fukushima disaster in Japan. But the meltdown in March 2011 was still fresh on the minds of four retired cadres in Anhui Province’s Wangjiang County. They filed a petition opposing the...

Caixin Media

01.20.12

Melodies of My Youth

CAIXIN

When I was a child, my family had an old-fashioned phonograph that had been passed down from my grandfather. It required hand-winding and used a bamboo needle, and it came with special silver tweezers for cutting the bamboo needles. On the side of the phonograph was a logo...

DISCUSSION

The Popularity of Chinese Patriotism

MARTIN BERNAL

Fundamentally China is a sellers’ market. The first half of this century, when there was a glut of books, seems to have been the exception. Since 1949 a veil has once more been drawn over the center of the mysterious east, and the situation has reverted to that of the...

Mao’s China

MARTIN BERNAL

To most Westerners China is not a part of the known world and Mao is not a figure of our time. The ignorant believe he is the leader of a host of martians whose sole occupation is plotting the destruction of civilization and the enslavement of mankind. The more sophisticated say...

Contradictions

MARTIN BERNAL

Professor Schurmann is not modest. Near the beginning of his book he writes: “translations from Chinese, Russian and Japanese are my own, and hundreds of articles had to be read in the original Chinese with precision and at the same time extensively. It was important to...