Tuesday, April 1, 2014

Zhou Yongkang: Downfall of a patron

Zhou Yongkang was one of China’s most powerful men, building up patronage networks that spanned the oil, mining and security industries as well as regional support bases. A corruption investigation has led to the detention of many officials and executives related to Mr Zhou and his family, giving unusual insight into the way Chinese officials build their networks as they rise to the top.


In 1967 Mr Zhou was a young petroleum engineer at China’s flagship Daqing field, in Heilongjiang province near Siberia. As the madness of the cultural revolution subsided, a group of military officers allied with Deng Xiaoping argued for developing the oil industry to stabilise the economy and earn foreign exchange.

Men who, like Mr Zhou, cut their teeth at the Daqing and Shengli oilfields rose up to run China National Petroleum Corporation, a behemoth that was simultaneously an instrument of state policy, a beneficiary of state subsidies and a channel for lucrative subcontracts.

In his long career, Mr Zhou headed or helped promote all of China’s big oilfields – Daqing, Liaohe and Shengli and the gasfields of Tarim and Sichuan basins.

At least six senior executives at oil company CNPC, including Jiang Jiemin, former CNPC head and head of the state assets watchdog, have been detained since August 2013.

At least five private businessmen engaged in energy services have also been detained.

Mr Zhou’s sister-in-law and nephew partnered with CNPC in gas distribution businesses in their home town of Wuxi, in Sichuan, Xinjiang, Inner Mongolia and Tianjin.

Mr Zhou’s son Zhou Bin supplied equipment to CNPC in Iraq, using faked paperwork. He had a stake in a company supplying IT services to CNPC service stations.


Mr Zhou’s first political appointments were as mayor or party secretary in cities attached to oilfields, such as Panjin City, Liaoning and Dongying City, Shandong, in the early 1990s.

Bo Xilai, an ambitious and charismatic princeling, came to national attention in 1993 as the mayor of Dalian, the big port city of Liaoning Province. Bo and Mr Zhou’s long and powerful alliance would prove Mr Zhou’s undoing, after Bo was purged in March 2012.

Mr Zhou headed the Ministry of Land and Resources in 1998-1999, when that ministry was granted control over all land and mines approvals in China. He then became party secretary of Sichuan province. At least six government officials and at least nine private businessmen in mining or energy have been detained since December 2012.

In 2002 Mr Zhou joined the politburo, becoming from 2007-2012 one of only nine men on the Politburo Standing Committee, the pinnacle of power in Communist China. His brief included the courts, the police and the internal security apparatus.

At least five of Mr Zhou’s personal aides or secretaries who moved on to local government posts have been detained in the probes.


Mr Zhou was minister of Public Security from 2002-2007. From 2007-2012 he headed the powerful Politics and Law Commission, which oversaw all courts and police forces in China.

During his tenure the budget for internal security spending surpassed the official budget for the military. He oversaw a massive increase in security deployment in ethnically distinct Xinjiang, following bloody riots in 2009, as well as on the Tibetan plateau.

Bo drew on his alliance with Mr Zhou’s security apparatus with his “strike black” campaign in Chongqing, an anti-gang movement that quickly became a shakedown of private business people. He also promoted “red songs” in a Maoist-style campaign to woo leftist elements in the party. His career ended after his security chief attempted to defect and revealed that Bo’s wife had murdered a British businessman

At least three senior security officials, including two vice-ministers and the man who oversaw Beijing’s internal listening apparatus, have been detained since the purge began. One had earlier been affiliated with the office heading the persecution of banned spiritual group Falun Gong.


The corruption probe has claimed dozens of mid-level officials and private businessmen, all of them in some way allied with Zhou Yongkang or his son. Very few of those detained have alliances with any other Chinese leader.

Nationwide, hundreds of thousands of people must have been caught up in the dragnet, based on the 11,879 people investigated in Shanxi Province alone.

The heads of Chengdu Bank and a local investment corporation have been detained.

Criminal charges against Sichuanese mining magnate Liu Han include money-laundering through gambling rings in Sichuan and casinos in Macau.

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