Prepared by Frank Zhou & Alan Jameson

Editor”s Note: Can we count Chen Liangyu as a big bomb? An influential Chinese commentator, Shui Pi, said yes. Shui Pi is the pen name of Lu Pingbo, a commentator on economic and political issues in China. He works for the China Industrial and Commercial Daily as its deputy editor-in-chief and is a guest commentator for the CCTV and BTV.  After the dismissal of Chen Liangyu, the Party boss in Shanghai, Shui Pi wrote a commentary that has attracted wide spread attention.  The following is a summary of Shui Pi’s article entitled ”Can We Count Chen Liangyu as A Big Bomb?”  On August 28, Shui Pi wrote a column called  “How Big Is the Bomb Thrown by Zhang Rongkun?”  When Zhang, a businessman in Shanghai, was detained in the summer for his involvement in the social security fund scandal, many observers at the time felt this could be the beginning of Chen Liangyu’s downfall because of Zhang”s close relationship with the Shanghai government.

Shui Pi first cited the list of charges against Chen Liangyu.  They are1) misuse of the pension fund from the Shanghai Bureau of Labor and Social Security, 2) providing assistance to crook businessmen, 3) offering protection to his aides who have violated the law, and 4) extending favors to his relatives. 

Shuipi’s analysis of the four charges is as follows.  Charge I is related to Zhang Rongkun but not limited to Zhang Rongkun because the social security funds were also diverted to real estate investment.  Charge II is also related to Zhang but it is also likely to involve businessmen from Hong Kong and Macao.  Charge III stems from Qin Yu (who had been Chen’s chief of staff until July 2006 but was detained in late August, barely a month after he was appointed the magistrate of Baoshan District in Shanghai) but Qin’s problem cannot be limited only to the issue of being a bridge between Zhang Rongkun and Chen.  Charge IV is new whose content may or may not be known by the public.

In its decision to dismiss Chen, it was made very clear by the CCP Central Committee that no matter who the person is and at what rank, if laws are broken and regulations violated, this person will be held accountable. Chen was not only the Party boss in Shanghai but also a Politburo member.  In the anti-corruption history of the CCP, the highest official executed for corruption is Cheng Kejie (vice chairman of the Standing Committee of the NPC) and the highest official given a jail term is Chen Xitong (Party boss of Beijing and also a Politburo member).  The difference between Chen Liangyu and Chen Xitong is that Chen Liangyu has yet to be convicted of anything.

When Zhu Junyi (director of the Shanghai Bureau of Labor and Social Security) was detained, Shuipi commented that there has been no significant corruption case in Shanghai in a decade but when one breaks it is seismic. From Zhou Zhengyi to Zhang Rongkun, to Qin Yu and Zhu Junyi, they are only cracks on the glittering edifice of Shanghai. 

Frankly, the economic accomplishments of Shanghai are quite impressive and its urbanization drive breathtaking.  Beijing is certainly trailing behind for now. Ten years ago, residents of Shanghai thought Beijing was a target to catch up with.  Ten years later, residents of Beijing feel Shanghai is too far ahead to be caught up.

There are 4,000 skyscrapers in Shanghai, more than the total of skyscrapers on both the East and West Coasts of the United States.  In addition, its real estate price has shot through the roof, presenting a metropolitan stature that is more dominant than New York City.

To play the first fiddle in this economic powerhouse, one must be equipped with special capability and possess a wholesome view.  It appears Chen is weak on both counts. 

Shui Pi suggests that Chen most likely failed to see the urgency and importance of the macro regulation.  Chen probably did not feel Shanghai needs any center-imposed control. He probably thought that neither Shanghai nor the entire six provinces on China’s East Coast should be subject to any kind of macro regulation because an intervention may not lead to a soft landing but can trigger a massive recession. 

As far as the housing price was concerned, in Chen’s calculation, Shanghai did not only belong to the entire China, it also belonged to the world.  This perception is not just the excuse of the real estate developers in Shanghai but has also been the consensus of the Shanghai officialdom.  Otherwise, the media in Shanghai should have long ago initiated a debate on the rationale of the skyrocketing price.  On the contrary, it has remained entirely silent.  We hope the downfall of Chen Liangyu may also lead to a certain fall in the housing price in Shanghai.

Can Chen Liangyu be counted as a big bomb?

It is certain that Chen Liangyu is by all means a big bomb.  What is uncertain is will the detonation of this bomb create an even bigger chain reaction? 

Editor”s Note: Can we count Chen Liangyu as a big bomb? An influential Chinese commentator, Shui Pi, said yes. Shui Pi is the pen name of Lu Pingbo, a commentator on economic and political issues in China. He works for the China Industrial and Commercial Daily as its deputy editor-in-chief and is a guest commentator for the CCTV and BTV.  After the dismissal of Chen Liangyu, the Party boss in Shanghai, Shui Pi wrote a commentary that has attracted wide spread attention.  The following is a summary of Shui Pi’s article entitled ”Can We Count Chen Liangyu as A Big Bomb?”  On August 28, Shui Pi wrote a column called  “How Big Is the Bomb Thrown by Zhang Rongkun?”  When Zhang, a businessman in Shanghai, was detained in the summer for his involvement in the social security fund scandal, many observers at the time felt this could be the beginning of Chen Liangyu’s downfall because of Zhang”s close relationship with the Shanghai government.

Shui Pi first cited the list of charges against Chen Liangyu.  They are1) misuse of the pension fund from the Shanghai Bureau of Labor and Social Security, 2) providing assistance to crook businessmen, 3) offering protection to his aides who have violated the law, and 4) extending favors to his relatives. 

Shuipi’s analysis of the four charges is as follows.  Charge I is related to Zhang Rongkun but not limited to Zhang Rongkun because the social security funds were also diverted to real estate investment.  Charge II is also related to Zhang but it is also likely to involve businessmen from Hong Kong and Macao.  Charge III stems from Qin Yu (who had been Chen’s chief of staff until July 2006 but was detained in late August, barely a month after he was appointed the magistrate of Baoshan District in Shanghai) but Qin’s problem cannot be limited only to the issue of being a bridge between Zhang Rongkun and Chen.  Charge IV is new whose content may or may not be known by the public.

In its decision to dismiss Chen, it was made very clear by the CCP Central Committee that no matter who the person is and at what rank, if laws are broken and regulations violated, this person will be held accountable. Chen was not only the Party boss in Shanghai but also a Politburo member.  In the anti-corruption history of the CCP, the highest official executed for corruption is Cheng Kejie (vice chairman of the Standing Committee of the NPC) and the highest official given a jail term is Chen Xitong (Party boss of Beijing and also a Politburo member).  The difference between Chen Liangyu and Chen Xitong is that Chen Liangyu has yet to be convicted of anything.

When Zhu Junyi (director of the Shanghai Bureau of Labor and Social Security) was detained, Shuipi commented that there has been no significant corruption case in Shanghai in a decade but when one breaks it is seismic. From Zhou Zhengyi to Zhang Rongkun, to Qin Yu and Zhu Junyi, they are only cracks on the glittering edifice of Shanghai. 

Frankly, the economic accomplishments of Shanghai are quite impressive and its urbanization drive breathtaking.  Beijing is certainly trailing behind for now. Ten years ago, residents of Shanghai thought Beijing was a target to catch up with.  Ten years later, residents of Beijing feel Shanghai is too far ahead to be caught up.

There are 4,000 skyscrapers in Shanghai, more than the total of skyscrapers on both the East and West Coasts of the United States.  In addition, its real estate price has shot through the roof, presenting a metropolitan stature that is more dominant than New York City.

To play the first fiddle in this economic powerhouse, one must be equipped with special capability and possess a wholesome view.  It appears Chen is weak on both counts. 

Shui Pi suggests that Chen most likely failed to see the urgency and importance of the macro regulation.  Chen probably did not feel Shanghai needs any center-imposed control. He probably thought that neither Shanghai nor the entire six provinces on China’s East Coast should be subject to any kind of macro regulation because an intervention may not lead to a soft landing but can trigger a massive recession. 

As far as the housing price was concerned, in Chen’s calculation, Shanghai did not only belong to the entire China, it also belonged to the world.  This perception is not just the excuse of the real estate developers in Shanghai but has also been the consensus of the Shanghai officialdom.  Otherwise, the media in Shanghai should have long ago initiated a debate on the rationale of the skyrocketing price.  On the contrary, it has remained entirely silent.  We hope the downfall of Chen Liangyu may also lead to a certain fall in the housing price in Shanghai.

Can Chen Liangyu be counted as a big bomb?

It is certain that Chen Liangyu is by all means a big bomb.  What is uncertain is will the detonation of this bomb create an even bigger chain reaction?