In a reversal of fortunes that may say as much about Chinese power politics as it does about corruption, China's richest commercial city has come under investigation by the central government for a huge pension fraud scheme.
So far, the budding scandal, which has been written about in unusual detail in the country's news media, has ensnared the chief of the city's Labor and Social Security Bureau, or pension fund, along with the chairman of the Shanghai Electric Group, a municipal utility.
The two, along with the heads of at least two of the city's districts, including a former top aide to the city's Chinese Communist Party leader, have been taken to Nanjing, where they are being held by investigators for interrogation.
Meanwhile, the presence of more than 100 investigators from the party's Central Commission for Discipline Inspection, who have been sent from Beijing and have taken up residence in a historic old hotel, has fed widespread speculation that the arrest or demotion of others, possibly including more senior municipal and party officials, may follow.
The Chinese government routinely bans publication of articles on subjects it deems sensitive or embarrassing, so the widespread reporting on the scandal here has led many to conclude that it is the first act in what may be a long season of political jockeying leading up to the 17th Communist Party Congress next year.
In recent years Shanghai appeared to be all but immune to high-level scandals, with city leaders benefiting from the patronage of former president Jiang Zemin (江澤民),who rose to national prominence as mayor of the city and cultivated it as a power base.
Indeed, three years ago a large team of investigators descended from Beijing to look into collusion between officials and real estate developers, only to be recalled abruptly to Beijing, reportedly at Jiang's insistence.
In the current scandal, according to reports in the Chinese news media, city officials arranged for US$1.2 billion of municipal pension funds to be lent to an obscure private holding company for investment in a toll expressway between Shanghai and Hangzhou.
Chinese journalists who have reported on the case say the loan was nearly paid off when employees at the highway company informed on their superiors, bringing the arrangement to light.
Chinese news reports have said that if the investigators are allowed to pursue their work to its conclusion, the highway deal may in the end prove to be a modest piece of a much larger web of corruption linking municipal officials, banks and developers.
The newsweekly Caijing, for example, has carried detailed reports of how money from the city's Social Security Bureau was funneled into private real estate projects as long ago as the early 1990s.
"At the center of the issue is the bureau's dual role as both administrative regulator and investment manager of the fund, despite public demand to entrust the fund to market-oriented operators," Caijing wrote in a cover story on the scandal. "The monopoly it created is at the root of the fund's current problems."
Besides weakening the city's national standing, the pension scandal constitutes a blow to Shanghai's ambition to be China's financial center. The reported pension dealings highlight the lack of transparency in a system in which the media and the courts are subject to political direction.
‘HYANGDO’: A South Korean lawmaker said there was no credible evidence to support rumors that Kim Jong-un has a son with a disability or who is studying abroad South Korea’s spy agency yesterday said that North Korean leader Kim Jong-un’s daughter, Kim Ju-ae, who last week accompanied him on a high-profile visit to Beijing, is understood to be his recognized successor. The teenager drew global attention when she made her first official overseas trip with her father, as he met with Chinese President Xi Jinping (習近平) and Russian President Vladimir Putin. Analysts have long seen her as Kim’s likely successor, although some have suggested she has an older brother who is being secretly groomed as the next leader. The South Korean National Intelligence Service (NIS) “assesses that she [Kim Ju-ae]
In the week before his fatal shooting, right-wing US political activist Charlie Kirk cheered the boom of conservative young men in South Korea and warned about a “globalist menace” in Tokyo on his first speaking tour of Asia. Kirk, 31, who helped amplify US President Donald Trump’s agenda to young voters with often inflammatory rhetoric focused on issues such as gender and immigration, was shot in the neck on Wednesday at a speaking event at a Utah university. In Seoul on Friday last week, he spoke about how he “brought Trump to victory,” while addressing Build Up Korea 2025, a conservative conference
DEADLOCK: Putin has vowed to continue fighting unless Ukraine cedes more land, while talks have been paused with no immediate results expected, the Kremlin said Russia on Friday said that peace talks with Kyiv were on “pause” as Ukrainian President Volodymyr Zelenskiy warned that Russian President Vladimir Putin still wanted to capture the whole of Ukraine. Meanwhile, US President Donald Trump said that he was running out of patience with Putin, and the NATO alliance said it would bolster its eastern front after Russian drones were shot down in Polish airspace this week. The latest blow to faltering diplomacy came as Russia’s army staged major military drills with its key ally Belarus. Despite Trump forcing the warring sides to hold direct talks and hosting Putin in Alaska, there
North Korea has executed people for watching or distributing foreign television shows, including popular South Korean dramas, as part of an intensifying crackdown on personal freedoms, a UN human rights report said on Friday. Surveillance has grown more pervasive since 2014 with the help of new technologies, while punishments have become harsher — including the introduction of the death penalty for offences such as sharing foreign TV dramas, the report said. The curbs make North Korea the most restrictive country in the world, said the 14-page UN report, which was based on interviews with more than 300 witnesses and victims who had
RSS