New world of Chinese palace intrigue


When he is not tweeting lurid corruption allegations against top Communist party officials and their relatives, exiled Chinese property tycoon Guo Wengui likes sharing photos of himself lifting weights in his Fifth Avenue penthouse.

Mr Guo is the subject of an Interpol “red notice” issued at Beijing’s request, but he appears to be living the life of a Kardashian, posing on yachts and joining Donald Trump’s Mar-a-Lago golf resort in Palm Beach.

This is the new world of Chinese palace intrigue.

Factional struggles once waged behind closed doors now increasingly play out in public and online, with rival factions apparently using news media and surrogates like Mr Guo as proxies. And with a political changeover expected later this year, it seems likely that more and more scandals will play out in this way.

President Xi Jinping is certain to be chosen for another term as party secretary, but he is also seeking to install loyalists on the elite Politburo Standing Committee in order to consolidate his power. His adversaries want the same for themselves. Both sides are honing a strategy first practised during the last Communist party leadership transition five years ago, when the downfall of populist rising star Bo Xilai made clear how media leaks can be a powerful tool for discrediting political opponents. The use of proxies also enables plausible deniability in case opponents cannot be toppled.

This latest battle appears to pit the leaders of Mr Xi’s ferocious anti-corruption drive against those who see it as a thinly disguised political purge. Mr Xi pledged that his anti-corruption campaign would target both “tigers and flies”. China’s runaway TV hit this year is In the Name of the People, the story of a dogged prosecutor who unravels corruption stretching from a small city to the halls of power in Beijing. In the show, the prosecutor proceeds from bottom to top, netting low-level flies who eventually lead him to a tiger.

Yet critics of Mr Xi’s campaign argue that real-life corruption investigations proceed in the opposite direction: investigators first set their sights on a tiger, then squeeze his loyalist flies until they produce evidence against him.

Mr Guo is challenging the core legitimacy of the anti-corruption campaign by training his fire on Wang Qishan, who heads the party’s anti-graft agency and is widely viewed as the second-most powerful man in China. Mr Guo has not provided evidence to substantiate his claims. Weakening Mr Wang’s standing could affect this year’s leadership transition — by making it difficult for him to secure a second five-year term on the Politburo Standing Committee.

Beyond Mr Guo, a series of other public allegations and arrests have rocked Chinese high finance.

These include the abduction of billionaire financier Xiao Jianhua from the Four Seasons Hotel in Hong Kong by Chinese security agents and the detention of Xiang Junbo, former head of China’s insurance regulator, on allegations of corruption.

Anbang, a swashbuckling insurance conglomerate that owns the Waldorf Astoria, was also widely assumed to have allies in the upper echelons of the Communist party. So when Caixin, the country’s leading independent news website, published a lengthy investigative report last month alleging financial deception by Anbang, it was seen as a possible political salvo. Anbang has denied the allegations and stated its intention to sue Caixin and its chief editor, Hu Shuli.

Yet many saw the decision by Ms Hu, one of China’s best-connected journalists, to publish the article as a sign that the political winds had shifted against Anbang. Days after the article was published, China’s insurance regulator slapped Anbang with a three-month ban on selling new products. In a strongly worded statement, the regulator accused the insurer of “wreaking havoc” in the market.

Chinese elite politics have always been cut-throat, but rarely have outside observers been able to see the long knives glinting.

gabriel.wildau@ft.com

Twitter: @gabewildau

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