The Memoir Details How China Keeps Business on the Line

The Memoir Details How China Keeps Business on the Line

Desmond Shum spent three years assembling 150 official seals from a multi-level Chinese bureaucracy to build a logistics hub next to Beijing’s main airport.

To obtain these seals of approval, he sided with government officials. For example, the airport’s customs chief demanded that the agency build a new office building with indoor basketball and badminton courts, a 200-seat theater and a karaoke bar.

“If you don’t give it to us,” the chief said with a big grin to Mr. Shum over dinner, “we won’t let you build.”

Mr. Shum recounts the conversation in a memoir that shows how the Communist Party keeps business on the line – and what happens when businessmen move in. Released this month, “Red Roulette: An Insider’s Story of Wealth, Power, Corruption and Vengeance in Today’s China” reveals how government officials keep rules vague and face a crackdown limiting their role in the country’s development. Danger is always present.

“To achieve anything in China, you have to get into the gray zone,” Mr Shum said in a phone interview from his home in the UK. “We were all licking the blood off the blades.”

Many of the events depicted in the book cannot be independently verified, but there is no question Mr. Sham’s front-seat approach to the interplay between money and Chinese politics.

He was once married to Duan Weihong, formerly close to the family of Wen Jiabao, the chief of China. Ms Duane, also known as Whitney, was a central figure in a 2012 investigation by The New York Times into vast hidden assets controlled by Mr Wayne’s relatives.

Ms Duane disappeared in September 2017, although Mr Shum said she had reached out to urge her to stop shortly before the book’s release.

Some readers may struggle to sympathize with the former power couple and wealthy Chinese business leaders like them. The book describes the wealth he earned by driving the wheel and dealing with powerful government officials, who used their influence to make deals. And, of course, the combination of money and politics gives rise to corruption around the world.

But Mr. Sham’s book has come out just as the future of Chinese entrepreneurs is in doubt. The government has cracked down on the most successful private enterprises, including Alibaba Group, the e-commerce giant, and Didi, the ride-hailing company. It has sentenced business leaders who have served long prison sentences for criticizing the government.

China’s paramount leader, Xi Jinping, has urged the tycoon to share his wealth with the rest of the country in an effort to pursue “shared prosperity”, raising concerns that the state could strangle the private sector. and could affect the Communist Party even more. in everyday life.

“The party has an almost animal instinct towards oppression and control,” Mr. Sham wrote in the book. “This is one of the fundamental principles of the Leninist system. Whenever the party can afford to succumb to repression, it will do so.

Despite its flaws, mistakes, and transgressions, China’s business types have been instrumental in lifting the country out of poverty and making it the world’s second largest economy – something the Communist Party has been reluctant to acknowledge.

Instead, the party forces business owners to remain subservient to the state. They must follow written, as well as unwritten, rules. Even the relationship with Mr. Wayne didn’t help when a middle-level bureaucrat needed something.

“In China, power is everything, while money is not much,” Mr. Shum said in the interview. “The entrepreneurial class is also a oppressed class under the party.”

In response to a request for comment, China’s foreign ministry said the book was full of stigma and baseless allegations about China.

Mr. Sham and Ms. Duan operated businesses during China’s Gilded Age in the 1990s and 2000s, when the party took its toll on society to strengthen its legitimacy and economic goodwill following the 1989 crackdown on pro-democracy protesters in Tiananmen. loosened the controls. At the time, the party often tried to co-opt rather strong-arm business leaders to help keep business under its thumb and claim credit for China’s economic miracle. This meant talking to him about becoming a member of the party and joining the ranks of the country’s parliamentarians and political advisors.

It worked. Many businessmen believed that they could shape a liberalized China. He called for protection of assets, an independent judiciary system and a more transparent government decision-making process so that people – the wealthy and otherwise – could be better protected from party power. Some raised serious issues during the parliamentary session of the government. Others supported NGOs, educational institutions and investigative media outlets.

That period was short-lived.

“It is only in times of crisis that the party loosens its grip, allowing for more free enterprise and more freedom,” Mr Shum wrote. “China’s growing economy provided an opportunity for the party to re-establish its dominance.”

According to Mr. Shum, the tightening process began after the 2008 financial crisis, but accelerated after Mr. Xi took charge of the party in late 2012.

“The economy used to be the first order of business,” he said. “Since Xi, there is no doubt that politics became the driving force behind everything.”

Mr. Xi set the tone that the relationship between government and business should be “friendly and clean”. He said government officials should not hesitate to interact and help private businesses.

But years of crackdowns on lawyers, journalists and civil society activists under Mr. Xi have left little checks and balances. The power imbalance between government and business has only deepened.

Mr. Shum believes that most of the business class is aware of the system’s problems, but few are willing to speak up because the cost is too high.

He said that many businessmen have managed to transfer at least a part of their assets abroad. Some people make long term investments because they are very risky and difficult. “Only idiots plan for the long term,” he said.

Mr. Sham’s observations are in line with what others have said. A Beijing businessman told me that “red roulette” poked a hole in the black box of the government-business dynamic in China. Two real estate tycoons told me about their humiliating experience of standing outside the office of some bureaucrats for hours to get approval for their projects.

To win the green light for the airport’s logistics hub, Mr. Sham dined with officers almost every day for some years, spilling a bottle of the famous Chinese liquor, Mutai, at each meal. His servants brought fine tea to the officers, ran their errands and looked after the needs of their wives and children.

He wrote, an employee went on so many sauna trips with so many people that his skin started peeling.

The top airport and local district officials made three changes during the duration of the project. Each time, Mr. Sham’s team had to restart the ingestion process.

“Many assumed that with the safety of the Wayans,” he said, referring to the family of the former prime minister, “we would count the money without getting up in the morning. The truth is, it was exhausting.”

If Ms Duane and Mr Shum had to jump through all kinds of hoops to get their projects moving, other businesses would have to endure more to do things without their political connections.

Mr Shum said he began writing the book in 2018 partly because his son, then 8, had started searching for his mother’s name online. He thought it would be better if he could give an account of her and their marriage, which ended in divorce in 2015.

Then, just before the book’s expected publication earlier this month, he said, Duane called him while trying to persuade him to pull the book. She is not sure whether she was speaking for herself or conveying a message from Chinese officials. But she’s sure she won’t be happy with the book.

“It is who he is,” he said. “She never wants to come out of the shadows.”

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