Sun, Aug 25, 2013 - Page 9 News List

Bo Xilai trial shines light on business ally’s ties to CCP elite

Businesspeople in China succeed by having close political ties, and when one goes down, the other is likely to follow

By David Barboza  /  NY Times News Service, SHANGHAI

Chinese entrepreneurs say that to get access to land, licenses and capital, they are expected to cater to the needs of CCP officials and their families. That can mean paying school tuition, entertaining spouses and giving corporate shares to the relatives of public officials.

This makes them vulnerable when an official they are close to gets forced out in a power struggle and is accused of corruption.

“To be a successful businessman in China you need to play the game and even corrupt an official, which makes you very vulnerable,” said Chen Zhiwu (陳志武), a professor of finance at Yale University. “If you don’t cooperate with them, you won’t succeed. Those are the choices you have in a system where government power is unchecked.”

Xu, a paunchy, soft-spoken billionaire, was detained last spring, shortly after the authorities removed Bo from his post as party chief in Chongqing.

“He was a very nice guy when I met him in 2000,” said Hu Kun (胡坤), a former insurance executive. “He was just about 30 years old, but he was clearly in charge. And when approval was needed for a license, he just picked up the phone and called the Shanghai party secretary’s office. Then he said: ‘It’s done,’ and we ate dinner.”

Xu grew up poor in a village in northeast China’s Liaoning Province and studied at a small aerospace college before finding work in Dalian at a company that exported shrimp to Japan, according to China’s state-run media.

Soon after, in the early 1990s, he formed Dalian Shide and won local government contracts to create landfills and beautify the city under Bo, who served as mayor there between 1992 and 2000.

By the age of 28, Xu was a multimillionaire and controlled a company that was fast becoming a conglomerate, by expanding into plastics, chemicals and real estate.

In Dalian, his connection to Bo was unmistakable. One of his top executives at Dalian Shide had worked as a close aide to Bo when he served as Liaoning governor. Xu also had indirect business ties to the family after he formed a consulting firm with Cheng. Cheng was at the same time serving as a business partner to Bo’s wife, Gu Kailai (谷開來), a lawyer.

When Gu and her young son, Bo Guagua (薄瓜瓜), traveled to Britain to search for a school for the younger Bo to attend, Xu covered all the expenses, according to one of his former business partners.

Later, as his ambition grew, Xu began networking with other powerful political figures in Beijing, according to people who worked with him. None of those relationships has come under legal scrutiny, at least publicly. However, Xu’s associates say he generally sought to develop deep personal and financial ties with close relatives of senior leaders, the way he did with Bo Xilai.

For instance, in the late 1990s, he grew friendly with Zhang Beili (張蓓莉), a diamond expert and the wife then-Chinese vice premier Wen Jiabao. They worked on the same floor in Beijing’s Ping An Insurance building, according to corporate records and interviews with his former business partners.

“Half the office in that Ping An building was Xu Ming and half was used by Zhang Beili,” one of his former business partners said.

While Xu was dating Wen Ruchun, he treated Wen Jiabao’s only son, Wen Yunsong (溫雲松), like a close friend, the former business associates said.

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