Tag Archives: Shen Peiping

Qiu He, top Yunnan official, ousted for corrupt land deals

Qiu He

Qiu He, Former Vice Party Secretary of Yunnan Province Photo: GoKunming

The Ides of March did not bode well for Yunnan province’s most controversial official.  Qiu He, Yunnan’s Vice Party Secretary  is being investigated for alleged corruption by the government’s corruption watchdog agency for “serious violations of discipline and law”, a common euphemism for graft.

State media reported the opening of the Central Commission for Discipline Inspection (CCDI) investigation into Qiu on Sunday March, 15.

Qiu He was in Beijing at the time of the announcement, attending the yearly National People’s Congress there, along with the rest of the Party leadership from Yunnan.

He is the latest in a number of top Yunnan officials to have been nabbed for corruption in the past year. Following the investigation of former vice governor of the province, Shen Peiping, in March 2014, former Kunming Party Secretary Zhang Tianxin and former Yunnan Party Secretary Bai Enpei were all taken down for graft.

Before taking up the position of deputy Party secretary of Yunnan in 2011, Qiu He was the Party secretary of the provincial capital, Kunming, starting in late 2007.

A controversial city-builder 

Originally from Jiangsu province, Qiu was known as an anti-graft crusader and free market reformer. He began his meteoric rise in politics as the Party secretary of northern Jiangsu’s Suqian city, where he privatized local hospitals and schools and reformed the city’s infrastructure.

In Kunming, Qiu began his tenure by organizing a taskforce to ensure city officials arrived to work on time and limited their lunch breaks to thirty minutes.  Within a week of taking office in 2007 he instituted a policy linking local political futures of local officials to waste water pollution into the feeder rivers of Kunming’s Lake Dianchi, one of China’s most polluted bodies of water.   His passionate speeches on Yunnan’s development often highlighted the need to turn Yunnan from a backwater frontier province into a fast-developing regional hub.

He was the catalyst for a swath of controversial infrastructure projects in Kunming, including a new international airport finished in 2012 and an expansive subway system, still under construction and over budget.  The fog-stricken location of Kunming’s Changshui international airport, 40km outside of the city is a common source of frustration for Kunming’s citizens.  During the winter months, the airport will often close unexpectedly, stranding thousands of passengers and costing airlines millions.

Among Kunmingers, Qiu He is also known for demolishing a majority of Kunming’s 300-plus “urban villages” – poorly-constructed, low-income neighborhoods that dotted the city’s modern landscape. Many of these villages were replaced by housing developments built by businessmen from Jiangsu, Qiu He’s home province.  While Qiu He’s economic polices are often attributed to the skyrocketing rates of growth in Yunnan province (average 12% over last 5 years), now that China’s real estate market is cooling off, the Spring City’s blue skies are marred by dense and unsightly high-rise housing projects, many of which have completely stopped construction.  During Qiu He’s tenure, this pattern of unfettered real estate development was also copied in scenic and popular tourist regions such as Dali and Xishuangbanna, greatly decreasing their natural and cultural values.

 Attracting outside investment proves fatal 

While rumor and speculation are bound to follow the announcement of Qiu’s takedown, many cite deals made with his Jiangsu and Zhejiang business connections as reason for the investigation.

The New Luosiwan International Trade Center, with an area of more than 3 million square meters, is one of the world’s largest warehouse distribution centers and the final stop before Chinese-made goods are shipped onto destinations in Southeast Asia. It was built with an investment of more than 3 billion renminbi ($500 million) from Liu Weigao, a Jiangsu businessman most famous for establishing Yiwu’s China Commodity City, the world’s largest small commodities market, in Zhejiang province. Qiu He knows Liu, a National People’s Congress representative to Jiangsu’s Suqian city, from his time as Party secretary there. Once in Kunming, Qiu He recruited Liu to invest in New Luosiwan as part of his economic development policy. When the CCDI announced an investigation into Liu Weigao in February 2015, speculation circulated that Qiu He’s downfall was imminent.

According to one source at a local bank who wished to remain anonymous, Qiu’s demise was a popular topic of discussion at the office. Liu Weigao had millions in savings seized after he was investigated in February, along with a number of business loans associated with New Luosiwan that have yet to be paid back. The source and the source’s colleagues knew of Qiu He’s connection to Liu Weigao and openly speculated prior to Sunday whether Qiu would be investigated himself.

In fact, Qiu was scheduled to visit the bank’s local offices in downtown Kunming this week for an investigation of the bank’s performance. The source and colleagues spent the weekend at the office preparing for the Vice Party Secretary’s visit. However, the work appears to be all for naught, after Qiu did not come back from Beijing Sunday.

An even bigger target

Despite his controversial track record in Yunnan, Qiu He was known as an official who cared more about his promising political path rather than benefiting financially from his position. Qiu was an extremely cautious politician who is known only to have met with supplicants during office hours, and not in decadent KTV parlors or in exclusive social clubs.

Whereas 2014 saw a raft of top Yunnanese officials taken down for their connections to the disgraced Zhou Yongkang, Qiu He’s investigation appears unrelated. Instead it may mark a shift in focus from the Sichuan-based clique that formed under Zhou to an even bigger target.

Qiu He is associated with a political faction related to Li Yuanchao, current vice president of China. Li, the former Jiangsu Party Secretary from 2003 to 2007, is a major power broker in the province and likely oversaw Qiu He’s rise. Behind Li Yuanchao however, stands former President Jiang Zemin, who oversaw the country’s development in the 1990s. Jiang’s clique includes officials from Shanghai, Zhejiang and Jiangsu.

Qiu He could be the first top official from the Jiang clique to be taken down during Xi Jinping’s current anti-corruption campaign. Further fueling speculation of a crackdown on the Jiang clique, the Governor and Provincial Party Secretary of Jiangsu province were nowhere to be found at this year’s recently concluded “two sessions” (lianghui). Some analysts see current President Xi Jinping’s crackdown on corruption as serving the dual purpose of restoring the public’s confidence in the Party and eliminating Xi’s political rivals.

Many Kunmingers welcomed news of the downfall of former top Yunnanese officials Bai Enpai, Shen Peiping, and Zhang Tianxin with support and expressed satisfaction; however reactions to Qiu He’s ousting are mixed, particularly among investment groups from outside of Yunnan.  A source close to the situation remarked that many of Kunming’s Jiangsu businessmen left the city after hearing about Qiu’s investigation. His friends with connections to Qiu, many of whom are responsible for large chunks of Yunnan’s commerce, have all cancelled their cell phone subscriptions and are currently unreachable.  Their fears, understandably justified, lie in speculation that once Xi’s political rivals are eliminated, those businessmen connected to them will soon come under the gun.

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In Anti-Corruption Campaign, Top Yunnan Officials Pay Steep Price for Graft, Political Relationships

During dynastic times, Yunnan was known as a place where disgraced mandarins were sent to live out their days and where the local officials maintained a large degree of independence from the capital. As the saying goes, “the heavens are high and the emperor is far away.” However, as new highways and railroads have linked Yunnan to the rest of China over the past century, Beijing is not as distant as it used to be, and the days of the province’s freewheeling officials seem to be at an end. If that were ever in doubt, a recent string of high profile corruption cases have confirmed Beijing’s grip on its representatives in the land south of the clouds.

President Xi Jinping

Since President Xi Jinping took office more than a year ago, the Communist Party of China (CPC) has undertaken the herculean task of ridding itself of graft, collusion and anything that would diminish the public’s already low level of trust in its leaders. By going after both high-ranking party leaders and petty bureaucrats, or ‘swatting flies and hunting tigers’ (拍苍蝇,打老虎) in the modern parlance, the current anti-corruption drive has yielded impressive results.

To date, over 50 high level party members have been arrested, 182000 government officials punished, and as of July 2014, 6,000 officials have been placed under investigation this year. Among the ‘tigers’ caught in the campaign are former mayor of Chongqing, Bo Xilai, former Minster of Railways, Liu Zhijun, former vice-chairman of the Central Military Commission Xu Caihou and former Minister of Public Security, Zhou Yongkang, also a member of the Politburo Standing Committee under Hu Jintao.

Thousands of officials from every region have been swept up in the campaign and Yunnan Province has indeed seen its fair share, with hundreds of local public servants investigated since the 18th Party Congress almost two years ago. However, in recent months, a number of high profile officials in the province have found themselves in the cross hairs of the Central Commission for Discipline Inspection.

Shen Peiping

Shen Peiping, former vice-governor of Yunnan Province

The first major official to fall was Shen Peiping, former vice-governor of Yunnan Province. Shen, a native of Baoshan, Yunnan, worked in various government posts before becoming Mayor of Pu’er City in 2007. Dubbed ‘Mayor of Tea’, Shen gained fame in promoting the local Pu’er tea to the rest of China and the world, leading to quick economic development of the region. However, Shen was also known locally for his heavy-handed tactics in dealing with petitioners and shady relationships with local businessmen.
After spending a little over a year as the vice-governor, Shen was officially investigated in March of this year and in August, he was charged with using his post for personal benefit, accepting large bribes and committing adultery. Traditionally, intra-Party disciplinary investigations almost always lead to a court case, where the conviction rate is above 99%. Therefore, few expect Shen to recover from these accusations.

It was not long after Shen Peiping’s investigation began that Kong Chuizhu, a personal friend, began his demise, albeit under much more scandalous circumstances. The provincial vice-governor from 2003 to 2013, Kong was known to share mistresses with Shen Peiping and the two would often frequent high-end brothels together. For Kong, the consequences were grave.

Kong Chuizhu

Kong Chuizhu, former vice-governor of Yunnan Province

Following the announcement that Shen was being investigated in early March, Kong, in Beijing attending meetings at the time, attempted suicide in his hotel room. The attempt, however, was unsuccessful and Kong was admitted into a Beijing hospital for recovery. Following medical tests, he was found to be HIV positive. The central government immediately opened an investigation on Kong and ordered him back to Yunnan to lay low while undergoing treatment. Two months later, he unsuccessfully attempted suicide for a second time and was admitted into the Provincial Armed Police Hospital. Finally, Kong jumped to his death from his hospital window on July 12.

Days after Kong Chuizhu’s death, the Central Commission for Discipline Inspection announced it was investigating Zhang Tianxin, former Party Secretary of Kunming. Zhang’s Party membership and posts were immediately revoked as a result of the investigation.
Zhang, the CPC Party Chief of Yunnan’s Wenshan Prefecture from 1999 to 2006, was apparently involved in corrupt practices in the prefecture’s mining industry. In addition, it is significant to note that Zhang was taken down just two weeks after an exposé aired on CCTV revealing plans for a number of illegal housing developments on the shores of the famously polluted Lake Dianchi, plans that Zhang reportedly approved.

That Zhang Tianxin was investigated is not surprising to many Yunnanese.  According to one local government employee who wished to remain anonymous, “Everyone knew Zhang Tianxin and (former Yunnan Provincial Party Secretary) Bai Enpei were corrupt. Once (the Central Commission for Discipline Inspection) started looking at Yunnan, they were done.”

Zhang Tianxin, former Party Secretary of Kunming

Indeed, Bai Enpei did not have much time left. On August 29, it was reported that an investigation was being opened on him and that he was suspected of “serious discipline and law violations,” Party jargon for ‘corruption’.

Bai, Provincial Party Secretary from 2001 to 2011, oversaw a period of rapid growth for the province. He was a vocal supporter of hydropower development and campaigned intensely in favor of damming western Yunnan’s Nu River, also known as the Salween. Following 10 years as the CPC’s top man in Yunnan, Bai assumed the post of deputy secretary for the Environmental Protection and Resources Conservation Committee.

His tenure there, however, was cut short. According to a report from YiCai, the former vice-secretary for the People’s Political Consultative Conference of Yunnan, Yang Weijun submitted to Beijing an official complaint regarding Bai’s corruption in mid-August in which he detailed Bai Enpei’s extensive dealings in selling off mining contracts in the province.

In the most grievous case, Bai sold sixty percent ownership of China’s largest zinc and tin mine for a mere one billion yuan, despite the mine having an estimated value of fifty billion yuan. The shares were sold to a relative of Liu Han, a Sichuanese mining tycoon and close friend of Zhou Yongkang. Mr. Liu was sentenced to death earlier this year for murder, among other charges.

A map of Bai Enpei's relationships with other corrupt officials. An asterisk next to the name indicates that official has been investigated. (Infographic originally produced by Sohu.com August 2014)

A map of Bai Enpei’s relationships with other corrupt officials. Click to enlarge. (Infographic originally produced by Sohu.com August 2014)

As the above infographic shows, Bai Enpei was at the center of corruption among Yunnan’s political elite and closely tied with Zhou Yongkang and Liu Han. What’s more, when Bai was the party secretary of Qinghai from 1997 to 2001, he had dealings with Jiang Jiemin, a former executive of the notoriously corrupt Sinopec who is currently under investigation for embezzlement of state funds. Many of Bai’s former colleagues from his days in Qinghai have also met the same fate as him and currently face investigation by the Central Commission for Discipline Inspection.

Bai Enpei, former Party Secretary of Yunnan Province

Bai Enpei, former Party Secretary of Yunnan Province

The dominoes did not stop falling with Bai Enpei, however. In mid-October 2014, state media announced that Yunnan Party Secretary Qin Guangrong had been relieved of his duties and would be replaced by sitting governor, Li Jiheng. Qin will now assume the post of vice-secretary of the State Organs Work Committee. However, local Kunmingers interviewed see the job transfer as more of a demotion with possible serious consequences. “(Qin’s) new position is meaningless, he has no power there. The central government just put him there until he’s formally charged… and that should be coming soon,” Yang Mouren, a local teacher, claimed. He may be right. While Qin was well-liked by many locals, he had close ties to a number of disgraced officials and it is probable that like his colleagues, Qin also had his hands in corrupt resource deals. However, unless he is formally investigated, details regarding any corruption Qin took part in will not be publicly released.

Qin Guangrong (R) with his replacement as Yunnan Party Secretary, Li Jiheng (L)

Qin Guangrong (R) with his replacement as Yunnan Party Secretary, Li Jiheng (L)

With so many high officials, and hundreds of local bureaucrats, investigated, it’s clear that the central government has its sights on Yunnan’s corrupt officialdom. But, with countless other corrupt officials scattered across China, many locals are asking ‘Why Yunnan?’ The reasons are twofold.

The first has to do with Yunnan’s natural resources. Of the two provinces that have so far been cleaned out by Beijing, Yunnan and Shanxi, one important commonality is their abundance of resources. With such wealth in natural resources come opportunities for massive corruption. In the case of Shanxi, its army of ostentatiously wealthy coal bosses were known nationwide, as were their close relationships with their political patrons. At the same time, Yunnan’s reserves of aluminum, lead, zinc and tin are the largest in China and it’s clear from the cases of Bai Enpei and Zhang Tianxin that provincial power brokers were heavily involved in the illegal distribution of these resources.

Also significant is the fact that all of the high officials mentioned in this article have ties to the disgraced Zhou Yongkang and his mining tycoon friend, Liu Han. With his power base in Sichuan, Zhou’s influence on officials in neighboring provinces, including Yunnan, was deep. Shen Peiping, Bai Enpei and Qin Guangrong especially were known to belong to the same political clique that formed under Zhou Yongkang. Shen and Qin were heavily rumored to engage in business with Zhou’s family members worth tens of millions of renminbi, while Bai Enpei sold off control of a western Yunnan mine to Liu Han’s family at a cut rate. In addition, Bai and Qin were Zhou Yongkang’s unofficial hosts when he visited the province in 2007, and Bai accompanied the Politburo Standing Committee member on his 2011 trip to Laos, all implying very close relations. For their part, Kong Chuizhu and Zhang Tianxin were intimately connected to Bai Enpei and as his power grew in the province, so did theirs. As is often the case within Chinese bureaucracy, underlings rise and fall with their leaders. Bai Enpei, and those who came up with him, were intimately connected to Zhou Yongkang; they are now paying the price for their political associations.

Former Minister of Public Security, Zhou Yongkang

Former Minister of Public Security, Zhou Yongkang

Xi Jinping’s anti-corruption drive has rocked the national bureaucracy, clearing out the upper echelon of Yunnan politicians in the process. It isn’t just top officials that have felt the squeeze however; there have been noticeable effects for local bureaucrats as well. According to one university administrator who wished to remain anonymous, his college’s office environment has changed in the past year. As he explained, “Before, you just had to show up, sit in your office, drink tea and chat with the other teachers from time to time. Now, a lot of people are very nervous at the school because we’re known to be pretty corrupt.” However, the corruption crackdown has led to some unexpected opportunities. “I actually have more freedom with my job now. Because all of the higher officials are so worried about their own jobs, I can consult for other companies on the side, and they’re too busy to notice. Plus, I wasn’t too corrupt to begin with so I’m not worried.”

The changes may not be over yet, however. When asked about corruption in Yunnan, locals still doubt the effect of the current campaign. “In Yunnan, nine out of ten officials are corrupt,’’ Mr. Yang, the school teacher, claims “and it’s the same everywhere else in the country. The story isn’t over yet.”

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Filed under China, Current Events, Governance, SLIDER, Yunnan Province