Leaders in Beijing Feared Arab Spring Could Infect China - Bloomberg

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China Leaders Revealed Concern of Uprisings From Arab Rebellion

Bo Xilai attends the closing ceremony of China's National People's Congress at the Great Hall of the People in Beijing, on March 14, 2012.

Bo Xilai attends the closing ceremony of China's National People's Congress at the Great Hall of the People in Beijing, on March 14, 2012. Photographer: Nelson Ching/Bloomberg

Shortly after a Tunisian fruit vendor set himself on fire in 2010, some senior Chinese leaders began asking if the rebellions that followed throughout the Arab world could ignite similar uprisings in China, according to U.S. diplomatic and intelligence reports.

Some members of China’s ruling Politburo, the reports reveal, began musing about whether bribery and other abuses of power were undermining the Communist Party’s authority at least 16 months before the corruption scandal surrounding deposed party leader Bo Xilai shined an international spotlight on the issue. The reports were described by five U.S. officials familiar with the contents who spoke on the condition of anonymity because the intelligence is classified.

As the Arab Spring revolts spread from Tunisia to Egypt and Libya after vendor Mohamed Bouazizi’s self-immolation on Dec. 17, 2010, the reports said, some Politburo members questioned whether protests might follow against Chinese provincial politicians demanding bribes; local party officials confiscating land; and products and government services rendered shoddy by influence peddling, the U.S. officials said.

Now, U.S. Secretary of State Hillary Clinton and Treasury Secretary Timothy F. Geithner, who will arrive in Beijing this week to discuss such matters as North Korea and China’s currency, will find the country’s leaders preoccupied by the corruption scandal, a fugitive human rights activist, a leadership transition and slowing economic growth.

Insecure Leaders

“The leadership is quite insecure now,” said Michael Green, an associate professor of international affairs at Georgetown University and a former senior director for Asia at the National Security Council under President George W. Bush.

The fifth generation of leaders since Mao Zedong led China’s 1949 revolution will be appointed to take the helm of the Communist Party later this year. That historic shift already has been clouded by the Bo scandal and the case of activist Chen Guangcheng, who human rights advocates say is under U.S. protection in Beijing.

Both cases touch a sensitive nerve in China: the concern that foreign pressure could rouse some Chinese people against their leaders and upset the country’s stability, as they have at other times in the nation’s history.

The Chinese are watching a “soap opera” of murder and corruption surrounding Bo and his family, and they’re asking, “How could the system let someone like that emerge?” said Cheng Li, a senior fellow at the Washington-based Brookings Institution and a scholar of China’s leadership. “As people find corruption is out of control, the very legitimacy of China’s Communist Party is in jeopardy.”

Personal Gain

The state-run Xinhua News Agency said on April 14, four days after reporting that Bo had been suspended from the Politburo, “The spouses and children of some cadres have taken advantage of their power to seek personal gains, disregarding the law, thus stirring public outcry.”

Three days later, Xinhua said the Communist Party is “being confronted with the danger of a slackened spirit, incompetence, divorced relations from the people, inactivity and corruption.”

The U.S. officials said the Chinese leaders’ concern about popular protests prompted by the Arab Spring and now the Bo incident have been compounded by the knowledge that China’s “Great Firewall” on the Internet no longer can block reports of the Middle Eastern uprisings and domestic political scandals on social media, blogs, websites, and from Chinese students and business people in the U.S. and elsewhere.

Beijing Protest

The leadership’s concern wasn’t unfounded, as protesters gathered weeks after the Tunisian incident outside a McDonald’s restaurant in Beijing. While a government crackdown quickly ended the Feb. 20, 2011 rally, the “Jasmine Revolution” remained on social media, using computers and mobile phones mostly made in China, said one of the U.S. officials.

Kenneth Lieberthal, another scholar at Brookings, and other former and current U.S. officials who travel regularly to China said they’ve never seen so much open discussion of a political scandal in Chinese social media and among people they meet.

There’s been much to talk about. The wealth of just three relatives of Chongqing party chief Bo and wife, Gu Kailai, is at least $136 million, according to regulatory and corporate filings tracked by Bloomberg and reported on April 23. Bloomberg has also reported that the richest 70 members of the National People’s Congress have amassed assets of some $90 billion in a nation where the World Bank calculates that the average income last year was $4,428.

Bo Violations

Bo, 62, has been accused of serious violations of party discipline, and Gu is under arrest on suspicion of involvement in murdering a British businessman after an alleged scheme to launder and transfer funds overseas.

The unfolding account of murder and double-crossing is a drama worthy of Shakespeare, said Douglas Paal, who worked on China policy at the White House, the State Department and the Central Intelligence Agency under several administrations. “Imagine a centipede with 100 shoes and only three have dropped.”

The U.S. officials said they’re watching to see if the Chinese leadership responds to the Bo scandal by continuing to paint his as an isolated case, beginning a more aggressive crackdown on official corruption in the provinces, or urging party leaders at every level to curb bribe-taking and public extravagance by themselves and their offspring.

‘Bad Apple’

China’s leadership doesn’t want the investigation to go too far and will present Bo as “one bad apple, and we found him out,” Lieberthal, who served as a special assistant to President Bill Clinton on China, said in an interview. “They’re trying to make this out as a good news story, to persuade people that at the highest national level, officials are honest. The question is: Will people buy it?”

James Sasser, a former Democratic senator from Tennessee and U.S. ambassador to Beijing, described Bo in an interview as “an outlier, almost a deviant from the stereotype” of a circumspect Chinese communist leader.

Sasser said he met Bo several times when Bo was mayor of Dalian and minister of commerce, and recalled him as “a sharp dresser, very flamboyant in his personality, very handsome, aggressive and antagonistic.” Sasser said when then-President Jiang Zemin visited Dalian, he supposedly commented that the town square Bo had built was larger than Tiananmen in Beijing.

Publicity Campaign

“Bo Xilai was playing games that are not normal in China: promoting his brand name, his own legitimacy, running his own public-relations campaign, right up to the end when he gave his own press briefing at the National People’s Conference” in March, giving himself a spotlight at the annual event, said Paal, now vice president of studies at the Carnegie Endowment for International Peace in Washington.

Paal said Chinese official media, which already have received directives to denounce Bo and Gu, may pile on by revealing “mi-shi,” or secret histories of Bo’s family and associates, so that he can’t be rehabilitated.

“They’re going to limit this as much as possible -- identify the main tumor, excise it and move on,” said Orville Schell, director of the Center on U.S.-China Relations at the Asia Society in New York. “They’re not going to go into a mass purge if they can avoid it, because everyone at the top leadership has a complex web of connections.”

Web of Influence

Bo wasn’t unique with his links between political power and family wealth, said China analysts and U.S. officials. A full investigation would mean exposing his close ties to the military, state-owned enterprises and banks, and provincial officials that helped him land $159 billion in financing for projects in Chongqing, China’s largest municipality with 29 million residents.

Nor were Bo’s family connections unique. He’s the son of a founder of Communist China; Gu is a daughter of a well-known Chinese revolutionary general. Both were members of the elite cadre of “princelings,” privileged offspring of high-ranking party leaders who hold senior positions in China’s intertwined government and businesses.

Vice President Xi Jinping, the man expected to be tapped as China’s next president during the 18th Party Congress later this year, is also the son of a revolutionary hero, though he keeps a lower profile than Bo did.

Clean-Up Man

Xi’s daughter studies at Harvard University under an assumed name, and a joke in China is that his singer wife Peng Liyuan is more famous than Xi is. Xi is known for cleaning up corruption in Fujian Province, and he was named Shanghai party chief after his predecessor was brought down for graft. No evidence has emerged of corruption connected to Xi.

Still, even if Xi, President Hu Jintao, and other members of the Politburo Standing Committee have rooted out Bo’s alleged abuses, “every tongue in China is wagging about this,” and citizens are disappointed that their leaders would allow a man whose power and ambition were no secret to rise, Paal said.

The Bo scandal has brought public cynicism to a new high, said Andrew Nathan, a China scholar at Columbia University in New York. “That doesn’t mean the public in China is going to rise up in rebellion, but it’s definitely a big hole to climb out of.”

To contact the reporter on this story: Indira A.R. Lakshmanan in Washington at ilakshmanan@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net