25/02/2010 - 00:00

Power in China a family affair

25/02/2010 - 00:00


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A few well-connected individuals hold all the cards in China’s economic and political spheres.

EARLY this month a 1,500-word feature article headlined ‘Australia welcomes China’s investment, if not its influence’ appeared in The Washington Post.

Its writer, John Pomfret, who had visited Perth and the Pilbara, was quite evidently amazed.

Mr Pomfret wrote of 500-metre high Mt Whaleback having been transformed into “a hole, the biggest open-pit iron ore mine in the world – an entire mountain crushed, sold and shipped to China.

“Trucks with tyres twice the height of a grown man cart thousands of tonnes of raw ore to a processing plant, where it is separated and poured into the longest and heaviest train in the world; 336 freight cars pulled by six locomotives.

“It chugs 300 miles to Port Hedland, where it is loaded onto ships bound for the unquenchable steel mills of the People’s Republic.

“Tonnes by tonnes, including more than 300 million tonnes of ore per year and vast quantities of liquid natural gas, China is buying Australia.

“One of the world’s most staggeringly huge transfers of natural resources has both enriched and alarmed Australia, prompted a determined response from Washington and illustrated both China’s savvy and ungainliness as it aggressively expands its influence around the world.”

After describing China’s economic impact upon Perth, he said: “Money from businessmen and women with ties to China has been flowing into the coffers of all of Australia’s main political parties.

“Rich Chinese are now serving on corporate boards and advisory groups with Australians such as former prime minister Bob Hawke and former foreign minister Alexander Downer.”

University of WA senior international relations lecturer Chen Jei, who migrated to Australia 20 years ago, is reported saying: “It’s no longer that we’re begging for your assistance. Now we are on corporate boards together. We are in the room.”

This prompted Mr Pomfret to suggest that, even among China’s supposed allies in Australia, there was unease about what the relationship with Beijing portends.

“China is intruding into society itself,” Mr Jei added.

For instance, there’s that vanished Madam Liu who is linked to Newcastle’s longstanding Fitzgibbon Labor family.

“In June, defence minister Joel Fitzgibbon resigned in part because he had failed to report that he’d taken trips to China, paid for by a woman with ties to the Communist Party,” Mr Pomfret continued.

“The incident underscored the increasingly close ties between pro-Chinese business interests in Australia and its political class.”

With China set to dwarf British, American and Japanese investment, Western Australians need to become better acquainted with precisely what they’re confronting.

Since no WA politician has shown the foresight or courage to outline this, State Scene breaks rank by lifting the veil just a little.

What’s written below comes from just-retired New Zealand academic, Dong Li, who studies developments initiated by those with a gridlock hold over his former homeland, plus a detailed and outstanding recent report by The Age’s Beijing correspondent, John Garnaut.

Professor Li stresses that it’s incorrect to view today’s China as communist even though its cities still display posters eulogizing last century’s biggest killer, Mao Tse-tung, who had sought to communalise the Chinese.

Both Professor Li and Mr Garnaut contend that China is now essentially a huge personal fiefdom of the offspring of the last generation of post-Maoist party apparatchiks.

And these offspring are collectively dubbed within China as ‘The Princelings’.

Professor Li said China’s Academy of Social Sciences calculations show these princelings’ wealth is enormous, challenging that of some of the great American monied dynasties.

The academy’s findings revealed China’s 1.3 billion rural and urban toilers are overseen, in one way or another, by 3,200 rich individuals whose personal wealth exceeds 100 million Chinese yuan ($A15 million), with 2,932, or more than 90 per cent being ‘princelings’, adult children of top Chinese party leaders.

Another estimate shows that about 500 families control all major economic sectors including oil, coal, petrochemicals, metallurgy, shipping, plus the levers of power, and key political institutions such as the People’s Armed Police, judiciary, mass media, and armed forces.

What this means is that the primary beneficiaries of what the Chinese people had toiled for since Mao’s death are the offspring of those who managed by guile and cunning to survive ongoing Maoist era purges.

This is not a pretty story.

Several tens of millions of Chinese starved because of Mao’s fantasies, most especially his rural so-called Great Leap Forward of 1958-62.

Many more millions had hopes, ambitions and careers destroyed by the ongoing purges his crazed mind initiated.

But when these huge insane mass convulsions ceased, the inheritors were those closest to what Mr Garnaut calls “The Eight Immortals”: Deng Xiaoping (1904-97); Chen Yun (1905-95); Pen Zhen (1902-97); Yang Shangkun (1907-1998); Bo Yibo (1908-2007); Li Ziannian (1909-1992); Wang Zhen (1908-1993); and Song Renquiong (1909-2005).

“The Communist Party is ... a club that allocates political, financial and social privilege to its members,’’ Mr Garnaut said.

“It has its own internal system of hierarchy and quasi-royalty, where revolutionary leaders bequeath their status to their children and children’s children.

“Mostly, the princelings get on with the job of expanding the national cake and carving it up.

“Generally, however, modern China belongs to the children of the revolution.

“All three officers appointed last year to the rank of full general in the People’s Liberation Army were children of senior party leaders.

“Xi Jinping, who many expect to be the next president, is the son of a revolutionary hero.

“Eight or nine of the 25-member politburo are princelings (defined as having a parent or parent-in-law who held the rank of vice-minister or above), according to Cheng Li, an expert on Chinese elite politics at the Brookings Institution.

“The strategic heights of China’s economy are also in princeling hands.

“The family of former president Jiang Zemin, whose adoptive father was a revolutionary martyr, pulls strings in the telecommunications, railways and postal systems.

“The family of former premier Li Peng, who was adopted by former premier Zhou Enlai, has outsized influence over electricity production, transmission and hydro-electric dam building.

“His daughter Li Xiaolin, whose name appeared in the Australian media this week [early February] thanks to her run-in with [Queensland] billionaire Clive Palmer over a ‘$A67.9 billion’ contract, is at the helm of a major power generating company.

“Her brother headed another large electricity company before being transferred to help run the coal-powered province of Shanxi.

“Family friend Liu Zhenya controls the electricity grid.

“Some of the most eminent princeling families discreetly control large companies that are listed on the Hong Kong stock exchange, sometimes in concert with Hong Kong’s mega-billionaire families, and often through loyal personal secretaries or relatives who have changed their names.”

Put bluntly, China must not be viewed as the People’s Republic of China. It’s more accurately described as the ‘hereditary officials’ republic of China or the ‘princelings’ republic of China’.

Whichever title one prefers, Australians should know that the endemic nepotism inherent within China’s all-powerful and intricately linked governing and business elites ensures its members are the beneficiaries of a deliberately devised insider run to power, comfort and riches.



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