Neil Heywood case sheds light on privileged lifestyles of China’s elite : One of the most explosive elements of the scandal is how communist dynasties have used their influence to amass wealth – Jonathan Watts and Tania Branigan – guardian.co.uk, Thursday 26 April 2012 17.40 BST
Compared with the murder charges against his mother and the corruption allegations that brought down his father, Bo Guagua’s adamant denial this week that “I have never driven a Ferrari” may seem, at first glance, insignificant.
Yet it strikes to the core of one of the most politically explosive elements of the unfolding scandal in China: how elite communist dynasties use their influence to amass wealth and lead privileged lifestyles.
Amid growing evidence of the fortune amassed by his family, the 24-year-old scion of the Bo family attempted to distance himself from the colourful playboy image that has made him a focus of such concerns. He insisted his expensive international education at Harrow, Oxford and Harvard was paid for with scholarships and family savings, and they he had never lent his name “nor participated in any for-profit business or venture, in China or abroad”.
In legal terms, the denial appeared unnecessary. Unlike his parents – toppled Chinese politician Bo Xilai and murder suspect Gu Kailai – who are being investigated concerning the death and possible cover-up – of British businessman Neil Heywood, Bo Guagua has not been accused of any crime. But politically, he has come under almost as much scrutiny because of what he represents.
China’s elite world of blood connections and dynastic influence has much in common with the European aristocracy or the old monied families of the US. But it is considerably more opaque – until a scandal such as this rips down some of the walls of secrecy and mutual protection.
Over the past three decades, the party of revolution has steadily transformed into the party of privilege. While once it challenged tradition, authority and championed a redistribution of wealth, it now promotes Confucian values of “harmony” and “stability” even as it presides over a nation of worsening inequality.
Guagua’s grandfather was Bo Yibo, a former vice-premier and one of the so-called “eight immortals” who helped guide China after the turbulence of the Mao years.
Guagua’s father, Bo Xilai, epitomised the party’s transition and its contradictions: like many in the communist elite, his path to power started out along a quiet, tree-lined road in central Beijing. Xihuangchenggen North Street is home to the nation’s most prestigious primary and secondary schools. The latter – Beijing No 4 Middle School – is the alma mater of Bo Xilai.
The majority of its graduates gain entry to either Peking or Tsinghua University – the Oxford and Cambridge of China – and go on to carve out high-flying careers in politics, business or the military. Years later, some even return as delegates to the National People’s Congress, which has its conference centre on the same street as the school.
Bo’s family allegedly abused his influence and connections to amass a fortune. Jiang Weiping, an investigative journalist from Dalian – where Bo was mayor in the 1990s – said the family and his wife’s law firm were earning 70 to 80 million yuan (£6.8m to £7.8m) a year during that time. “Bo’s only legal income was his salary, which was relatively insignificant. The family’s real revenue came through Bo’s ability to get projects and investments. His brother, wife and sister-in-law were all involved. It was large-scale official corruption,” said Jiang, who fled to Canada after being imprisoned in China for revealing “state secrets”.
Many wealthy families invest their assets – money and children – overseas. Thanks partly to the help of Heywood, Guagua entered Harrow and went on to Balliol college in Oxford and is now at Harvard.
Reports of his behaviour – throwing champagne parties and driving luxury cars – appeared to contradict the public image of his father who – as party chief of Chongqing – dressed himself in redder-than-red ideological clothes by staging mass Maoist singalongs and ordering Maoist dictums to be pinged by text message to millions of mobile phones.
Bo Guagua’s personal connections proved useful at Oxford, where he arranged for Jackie Chan to give a lecture and organised a Silk Road Ball held at the Oxford Union. That event was sponsored by Shenyang Jinbei, an automotive manufacturer from Liaoning – where Bo Xilai was provincial governor from 2001 to 2004 – which also placed a whole-page advert on the back cover of the union’s term card, said one of Bo’s fellow students.
“One wonders why a car company with no business at all in [western] Europe would want to sponsor such an event,” he added. A spokesman for the firm said he was not sure if it did business in the UK and did not know if it had backed the ball.
Another funding mystery is how a web address – Guagua.com – could have been bought from a Tenerife train enthusiast for $100,000 by a company with links to the Bo family.
Details of the wider family’s wealth have poured out this week. According to an investigation by Bloomberg, Bo’s close relatives – sometimes using different names – are involved in an international web of business activities worth at least $136m (£84m).
In addition to the millions amassed by Gu’s law firm, it found that Bo’s eldest son, Li Wangzhi – who also went under the name Li Xiaobai and Brendan Li – started a career in private-equity investing that focused on companies based in Dalian. He was also named as an executive for firms registered in Mauritius and the British Virgin Islands and more recently, worked for Citigroup.
Bo’s brother, Bo Xiyong – who also uses the name Li Xueming – has been listed as a director of a Hong Kong-based property developer and as deputy general manager of China Everbright Group – which is a major investor in renewable energy and green technology.
But the Bo family are unlikely to be unique in the way they have cashed in.
“This case shows that officials and their families must abide by the regulations,” said a senior official in Beijing. “The message is clear: Behave yourself!”
Earlier this month, the People’s Daily – the mouthpiece of the Communist party – lashed out at families with seemingly mysterious wealth. “Many use designated third parties – spouses, sons and daughters, lovers or friends” to generate and conceal wealth, said the newspaper.
But the political fallout from the scandal is likely to be limited by the considerable power of other elite families, who will not want to be tainted with the same brush.
Many sons and daughters of former leaders hold key positions, particularly in the military and the energy sector. The next president of China is likely to be a princeling: Xi Jinping.
But the wider trend for those with politically rich red blood is no longer towards politics.
Li Datong, a political commentator, said the founding families of the party were becoming less influential in the central committee – the inner sanctum of power.
“Fewer and fewer people accept the idea that those who won the country should rule the country,” he said.
Instead, the descendants of the old political dynasties are increasingly moving into finance and business – where their connections reap lucrative returns.
Hu Xingdou, a professor at Beijing Institute of Technology, said the influence of elite dynasties was becoming more pronounced as social strata have become more rigid. “In the last 10 years the overall power in the hands of princelings has solidified and it looks likely to grow stronger in the future.” Those on the periphery of the elite circles say the princelings tend to be quite discreet. Unlike the “new rich” children of coal mine owners, the “red aristocracy” do not usually flaunt their wealth and are under pressure to live up to their background. “Some of them are aloof, but most are modest and decent,” said a former employee at one of Beijing’s most exclusive clubs. “They are like European royals; they can’t easily marry for love. They have to consider family connections. Some suffer and accept. A few modern ones will marry a commoner or a foreigner. But they have to be very courageous to do that.” The hierarchy – and the privileges that flow from it to families – extends down through regional party bosses to township cadres.
“Life is easier for us,” said the daughter of a senior provincial official (more a lordling than a princeling). “The advantages are that I don’t need to queue up in a hospital. We always get to see good doctors without having to pay a lot of money,” said the well connected woman, who asked not to be named.
“My family ties helped me to find a good job and even a husband with a decent job and a similar background. The disadvantage is that my parents are involved in every big decision in my life, from which school I should attend, whom I should see, to when and where I should get married.”
Few think this world of privilege will be overturned as a result of the scandal. While foreign news organisations have dug into the business ties of the Bo family, the domestic media have largely avoided the subject of dynastic influence peddling.
But with the fallout not yet clear, some academics hope to see a little more openness and greater legal counterbalances to family power.
“If the lessons of this incident are taken to heart, China might shift from a system of ‘rule of man’ to one of ‘rule of law.’ That would be progress,” said the academic Hu.
General views which contribute to media’s propagation of critical thought and a general separation of social types or social castes . . .
1) “Some of them are aloof, but most are modest and decent,” said a former employee at one of Beijing’s most exclusive clubs.
Why can’t they be aloof (the right kind of aloof though, not all ‘aloof’ is negative), modest and decent all at once?
2) . “The advantages are that I don’t need to queue up in a hospital. We always get to see good doctors without having to pay a lot of money,” said the well connected woman, who asked not to be named.
Train more medical practicioners. Make medical degrees cheaper. The whole premise of needing to be connected to get quick medical service is ridiculous.
3) “My family ties helped me to find a good job and even a husband with a decent job and a similar background.
Create more *REAL* jobs. Create a state run social network that plays match maker as well as vets the participants.
4) Unlike the “new rich” children of coal mine owners, the “red aristocracy” do not usually flaunt their wealth . . .
Obesession with wealth, and obtaining wealth is a plutocrat’s perogative, unlike maintenance of stature like the aristocracy. This is where the lack of a formal recognition of these values perhaps through a Constitutional Monarch can be considered.
5) Few think this world of privilege will be overturned as a result of the scandal. “If the lessons of this incident are taken to heart, China might shift from a system of ‘rule of man’ to one of ‘rule of law.’ That would be progress,” said the academic Hu.
A plutocratic bureaucrat is a symbol of corruption. An aristocratic bureaucrat is a symbol of cronyism and nepotism. A plutocratic aristocrat is a symbol of dictatorship.
A bureaucrat cannot be a plutocratic being too busy administering (at least in efficient bureaucracies) to do business, also being involved in commonm affairs of the people. A plutocrat cannot be aristocratic being involved with the dirt of money and constant sacrifices of form and principle for mere profit that the middle class Merchantry (regardless of wealth) people involved in commercial dalliances have to accede to. An aristocrat cannot be a bureaucrat being involved with political dalliances they need to accede to and constant sacrifices of form and principle for mere political power (this is the ‘Red Aristocracy’ aptly mentioned above). There military class of course in any combination with the above results in what we all know as the military force reliant (something of the last century best forgotten and known for masssive human rights abuses) known as ‘junta‘ or the ‘khakistocracy‘.
When all 4 classes result in a single person, we end up with Mubaraks and Gaddafis, which is something that China will not want. But when separation of ‘powers’ into separate individuals occurs, with each comfortable in their own group rather than attempting to subsume other groups (in Representative Constitutional Monarchy to blunt the glamor from the bureaucrat, much like term limits do, being aware that plutocracy does not mean higher civilisation though a necessary evil for survival – which is why aristocracy cannot be typified by wealth and are slated for the privilege of ‘cashless’ living as described in ICCR Vol.1 via the financing officer – opposed to common society), a harmonious society can result.