China's Favorite Villainess

Why Chinese TV viewers can't get enough of a fictitious, Qing-era concubine.
BY JIANYU HOU

Many U.S. viewers identify with serial killer Dexter Morgan of Dexter, inveterate womanizer Don Draper of Mad Men, or family man turned meth kingpin Walter White of Breaking Bad -- however morally bankrupt they may be. 

Now, China has its own anti-hero, one that citizens love -- and authorities merely tolerate. 

Concubine-turned empress Zhen Huan is the protagonist of Empress in the Palace, a fictitious television drama series set during the Qing dynasty reign of emperor Yong Zheng, who assumed the throne in 1722. The show is a hit; not only has it set viewership records for some of the many local networks that broadcast it, it's also a web sensation, with over 4.4 billion total views on Letv, a Chinese video-streaming site.
While China's leaders have sought to promote an optimistic worldview with slogans like the "Chinese Dream" and an emphasis on "positive energy," Zhen epitomizes everything but. 

Her rise to power is nasty, brutish, and rapid. 

In the first episode, which aired in Nov. 2011, the 17-year-old Zhen is uninterested in politics, and does not even wish to join the emperor's retinue; nonetheless, she is eventually selected as a concubine because of her beauty. 

Over the course of the 76-episode series, now complete, Zhen's outlook darkens, and she ascends the palace hierarchy by destroying those who stand in her way. 

Zhen poisons a friend-turned-enemy, causing the woman to miscarry. 

Later in the show, she frames the empress for causing Zhen herself to miscarry -- and uses that to usurp the empress's throne.
The show's web-savvy viewers have taken Zhen's machinations to heart. 

Many feel the series reflects contemporary Chinese society, in which the unwritten rules of a system based more on connections and corruption than merit often force a choice between success and integrity. 

And Zhen has taught them that the quickest path to success is a willingness and ability to be more manipulative than anyone else. 

Zhen's journey, one web user wrote, "makes people aware that society is dark, a society that makes bad people worse, and good people bad."
Television antiheros have been popular in places like the United States for decades, but in China, where the government sits in final judgment on the moral correctness of television content, Zhen is something new and potentially threatening. 

Chinese censors have not moved to quash Empress in the Palace: the show is an "historical drama," a permitted typology unlike "time travel" dramas, which are banned for their "frivolous" treatment of history.
Zhen is anything but frivolous -- but to a Communist Party trying to promote positivity, she may simply be too nasty. 

On Sept. 19, the newspaper People's Daily, a Communist Party mouthpiece, published a widely discussed op-ed by Tao Dongfeng, a professor of cultural studies at Beijing's Capital Normal University, critiquing Empress in the Palace for its potential to negatively impact social mores. 

Tao maintained that television should serve as a "vehicle" by which to bolster a culture of integrity. 

"Artistic works should be superior to reality," he wrote. 

"They should not simply copy it."
Many Chinese, or at least those with an Internet connection, disagree. 

In an ongoing survey conducted by Sina, one of China's largest Internet portals, only about 29 percent of 219,000 respondents thus far agree that "shows and movies should transmit positive energy; Empress in the Palace, which encourages an ethical race to the bottom," is not worthy of promotion. 

The majority, about 68 percent, felt that "a gap between art and reality" leads to "fake and monotonous" work. 

The masses have spoken, and they want their anti-heroes.

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New China Cities: Shoddy Homes, Broken Hope

By IAN JOHNSON

Dissatisfaction and Dysfunction in a Model for China’s Urbanization: As China pushes ahead with government-led urbanization, Huaming might be an example of another transformation: the ghettoization of China’s new towns.

HUAMING, China — Three years ago, the Shanghai World Expo featured this newly built town as a model for how China would move from being a land of farms to a land of cities. 

In a dazzling pavilion visited by more than a million people, visitors learned how farmers were being given a new life through a fair-and-square deal that did not cost them anything.

Today, Huaming may be an example of another transformation: the ghettoization of China’s new towns.
Signs of social dysfunction abound. 

Young people, who while away their days in Internet cafes or pool halls, say that only a small fraction of them have jobs. 

The elderly are forced to take menial work to make ends meet. 

Neighborhood and family structures have been damaged.
Most worrying are the suicides, which local residents say have become an all-too-familiar sign of despair.
As China pushes ahead with government-led urbanization, a program expected to be endorsed at a Communist Party Central Committee meeting that began Saturday, many worry that the scores of new housing developments here may face the same plight as postwar housing projects in Western countries. Meant to solve one problem, they may be creating a new set of troubles that could plague Chinese cities for generations.
“We’re talking hundreds of millions of people who are moving into these places, but the standard of living for these relocatees has actually dropped,” said Lynette Ong, a University of Toronto political scientist who has studied the resettlement areas. 

“On top of that is the quality of the buildings — there was a lot of corruption, and they skimped on materials.”
Huaming is far from being a dangerous slum. It has no gangs, drug use or street violence. 

Nearly half the town is given over to green space. 

Trees line the streets that lead to elementary, middle and high schools.
But the new homes have cracked walls, leaking windows and elevators with rusted out floors. 

For farmers who were asked to surrender their ancestral lands for an apartment, the deterioration adds to a sense of having been cheated.
“That was their land,” said Wei Ying, a 35-year-old unemployed woman whose parents live in a poorly built unit. 

“You have to understand how they feel in their heart.”
The sense of despair and alienation surfaces in the suicides, a late-night leap from a balcony, drinking of pesticide or lying down on railroad tracks.
“I have anxiety attacks because we have no income, no job, nothing,” said Feng Aiju, 40, a former farmer who moved to Huaming in 2008 against her will. 

She said she had spent a small fortune by local standards, $1,500, on antidepressants. 

“We never had a chance to speak; we were never asked anything. I want to go home.”
The situation in these new towns contrasts with the makeshift housing where other migrants live. 

Many of those are created by farmers who chose to leave their land for jobs in the city. 

Although cramped and messy, they are full of vitality and upward mobility, said Biao Xiang, a social anthropologist at Oxford University who has studied migrant communities.
“These migrant neighborhoods in big cities are often called slums, but it’s the new resettlement communities that will be harder to revive, partly because they are not related to any productive economic activity,” Professor Xiang said. 

“And the population tend to be homogeneous, disadvantaged communities.”

Addressing ‘Disorder’
The idea behind Huaming was radically different. 

In 2005, Huaming Township was chosen to be a demonstration for successful, planned urbanization. 

A township is an administrative unit in China above a village but below a county, and Huaming had 41,000 people living in 12 small villages dotted across 60 square miles, most of which was farmland.
For northern China it was unusually fertile because water was plentiful. 

On the outskirts of one of China’s largest cities, the port of Tianjin, it was well known for its local handicrafts, such as decorative paper-cutting, and, especially, its vegetables that were easily sold in the big city.
City planners, however, saw it as a major problem.
“The naturally formed villages had undergone disorderly developments resulting in low building density, in disarrayed industrial space and layout,” according to a publication explaining the need for change. (Officials refused requests for interviews, but have published copiously on the project, allowing insights into their thinking.) 

The villages had no sewage treatment, and were “dirty, messy and substandard.”
The idea was to consolidate the villages into one new town called Huaming that would take up less than one square mile, versus the three square miles that the dozen villages had occupied. 

A portion of the remaining 59 square miles could be sold to developers to pay for construction costs, meaning the new buildings would cost farmers and the government nothing.
The rest of the land would stay agricultural, but worked by a few remaining farmers using modern methods. This would achieve another aim: not reducing the amount of arable land — a crucial goal for a country with a huge population and historic worries about being able to feed itself.
Construction started in March 2006, and was finished just 16 months later. 

The town is made up of six- to nine-story buildings divided into gated compounds of a dozen or so buildings each. 

Commercial space is officially limited to two streets, making the rest of town a quiet residential area centered on the new public schools. 

An attractive park and lake are given over at night to dancing and socializing.
The biggest selling point in official literature is how space was to be allocated. 

Farmers would able to trade the living space in their farmhouse for the same-size apartment in the new town. Even the yard around the farmhouse figured into the equation.
What happened was more complicated. 

Most families got 322 square feet per member. 

That is 22 square feet more than the average per capita living space in the city of Tianjin, but most of the new units were just 800 square feet, so a typical family of three would not get their full allotment. 

In theory, they could use the remaining allotment and spend their own money to purchase another unit, but most ended up with less floor space than they had on the farm.
Some were still happy to take up the offer.

In interviews, those most happy about the new plan already had nonfarming jobs and saw this as a way to get a modern apartment.
“It’s survival of the fittest,” said Yang Huashuai, a 25-year-old electrician and gypsy-cab driver who said his family got three apartments. 

“If you don’t work hard, you don’t deserve to make it.”
But many others did not want to leave their land. 

By 2008, the government’s offer had met limited success, with only half the population choosing to move. 

Already, though, government propaganda was extolling Huaming as a success, and officials planned to feature it at the world’s fair in two years’ time.
“They said if we didn’t move, it would affect the World Expo,” said Jia Qiufu, 69, a former resident of Guanzhuang Village. 

“They said it had to happen by 2009 because the Expo was the next year.”
The local government used intense pressure to force farmers out of their villages. 

It tore up roads and cut electricity and water. 

Even so, thousands stayed on. 

As a final measure, the schoolhouses — one in each village — were demolished. 

With no utilities and no way to educate their children, most farmers capitulated and moved to town.

Losing the Jobs Competition
Besides dissatisfaction over the amount of space they would receive, farmers were most concerned about jobs, a common worry in other resettlement projects. 

In the official literature, Huaming had that taken care of. 

Compared with relocation projects in remote rural areas, such as southern Shaanxi Province, Huaming is next to a major transportation corridor, the Beijing-Tianjin Expressway. 

It is also adjacent to Tianjin’s massive airport logistics center, which is expanding and adding thousands of jobs.
Many farmers said, however, that they were not qualified for these jobs.
“We know how to farm, but not how to work in an office,” said Wei Dushen, a former resident of Guanzhuang Village now living in town. 

“Those are for educated people.”
Almost uniformly, Huaming residents say the only jobs open to them are in dead-end menial positions, such as street sweepers or low-level security guards. 

These jobs pay the equivalent of $150 a month.
Even so, competition for them is fierce. 

Poor migrants from other parts of China are willing to work for even less, often because they have lower living costs. 

Almost all the gardening in public spaces in Huaming, for example, is done by workers from the inland province of Henan who come for a short time and leave. 

Workers pruning bushes in the town’s beautifully manicured park, for example, said they were paid $100 a month and were happy for it.
“Compared to Henan it’s good work,” said Zhuang Wei, 58, who said he lived in a room with five other men and ate simple canteen food offered by the company that had brought him to Huaming. 

“I’ll stick around here for a few months and then head back.”
Other migrants, mostly from Shandong Province, dominate Huaming’s taxi industry because they have teams of experienced mechanics, drivers and dispatchers.
“You can’t really compete with them,” said one local driver, Wei Zhen. 

“They’re professionals who have been doing this for years.”
Retraining was supposed to have allowed Huaming villagers a chance to get skills to compete. 

According to official literature, $1,500 was allotted for each resident. 

However, it was impossible to find any who had received retraining or had heard of anyone who had.
For young people, the problems are especially acute.
Even when they can get the well-paying menial jobs of $150 a month, residents overwhelmingly said this barely allowed them to make ends meet. 

Day care costs $100 per month per child, which would take a third of an average couple’s salary. 

Unlike in the villages, many families do not live near one another, making it hard to leave children with their grandparents.
Costs are also high. 

Inflation has nearly doubled the price of rice, something the residents find especially galling because in the past they grew it themselves.
Many young people seem to have given up trying to find work. 

Internet cafes are packed with them playing games. 

Although the cafes are supposed to be limited to the commercial streets, they are found in converted apartments in many housing blocks.
In one, 28-year-old Zhang Wei said he had invested $4,300 to renovate an apartment and install computers. 

The unit’s former living room was packed with young people hunched over screens, many of them playing games like World of Warcraft for money.
“They’re all unemployed local people, but without qualifications, what can they do?” Mr. Zhang said.
In a nearby unit, Liu Baohua, an unemployed 62-year-old farmer, said the buildings were almost uninhabitable during the winter. 

“These buildings look modern outside, but they’re not,” Mr. Liu said. 

“It’s the worst quality.”
Mr. Liu’s apartment leaks water from the ceiling, which he said maintenance crews told him they could not fix. 

Windows were double-glazed but the quality was bad and seals broken, causing them to mist up with condensation. 

Radiators, he said, had almost no hot water. 

He also showed work bills from maintenance visits in January confirming that his north-facing bedroom was 55 degrees.
“We need to buy space heaters to survive here,” Mr. Liu said. 

His wife works as a street sweeper and the couple get the equivalent of welfare for an additional $60 a month.
For many, the disappointment leads to suicides. 

Recently, residents said, a 19-year-old man ill with cancer flung himself off the family’s third-floor balcony at 5:30 a.m. and landed on the parking lot next to two vans serving breakfast. 

His father dead and his mother living on welfare, the family was too poor to afford further cancer treatment. The story could not be verified with the authorities but was repeated independently by residents.

The Good Earth
More common are stories of old people who cannot get used to the new lives and quickly die of illnesses. One term that residents repeatedly use is “biesi” — “stifled to death” in the new towers.
“I’m tired, I’m so tired,” said an elderly woman who would give only her surname, Wei. 

In the past, Chinese farmers wanted sons because they lived at home, whereas daughters married into other families. 

Now, this is reversed because of the burden of having to help a son find a home or job.
Mrs. Wei said her son had bought a car with the family savings but was losing money driving it. 

The family’s savings now almost exhausted, she said she did not know what to do.
“It’s tough having a son,” she said, quietly weeping. “I wish I had a daughter.”

Some residents wonder why they went through these travails when so little development is visible. 

Outside the town, most of the former township lies empty. 

Some hotels and office blocks have been built next to the airport logistics center. 

But mostly, one is confronted by mile after mile of empty lots — once farmland, now lying fallow, sometimes blocked from view by endless sheet-metal fences painted with propaganda about prosperity and development.
“Look at the empty fields,” said Wei Naiju, formerly of Guanzhuang Village. 

“That’s good earth; you could really plant something on it.”
Driving through the demolished villages with former residents is especially poignant. 

Some of the streets are still serviceable but mostly one is surrounded by a gutted, bombed-out landscape of foundations overgrown with scrub and small trees.
Given all the fallow land, claims that agricultural production would not suffer do not seem possible. 

Official propaganda material shows greenhouses that produce vegetables. 

Many greenhouses have indeed been built, but dozens were empty during a visit in June. 

Doors swung wildly in the wind and the clear plastic used to let the sun in was torn and flapping. 

Two greenhouses seemed to be functioning; local residents said they were used to make gifts of produce to visiting leaders as Potemkin-like proof of the still-vibrant agricultural sector.
Back in town, the life that once existed in the township has been memorialized in a museum. 

It is rarely open to the public, but its front door was ajar one day this past summer. 

Filled with full-scale dioramas of village homes and human figures, it was a re-creation of the old village life, accurate down to the dried corn hanging from the eaves. 

An introductory plaque explained: “Time goes by, and things change.”

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Xi Borrows From Mao Playbook in Power Play Ahead of Plenum

By Bloomberg News

Sidney Rittenberg, former translator for Chinese leader Mao Zedong and member of the Chinese Communist Party from 1946 to 1980, is seen in this 2009 file photo.

The mission for the near-dozen Communists sitting round a table at a Beijing ministry was explicit: criticize their boss, who was present. 

Party cadres carefully recorded their comments as they spoke, in an echo of sessions held decades ago under Chairman Mao Zedong’s direction.
“Every party member, every division chief, each department head and the ministers have to go through it,” said 31-year-old Tang, who participated in the September gathering and asked to withhold his full name and work unit because he isn’t authorized to talk to reporters. 

“There are clear instructions that criticism must be genuine. For instance, you can’t say ‘Oh, you have worked too hard and should take more breaks.’”
The purpose of such meetings being held across China -- at least one of which was attended by party chief and Chinese President Xi Jinping -- is to reinforce adherence to the official line and strengthen the position of the nation’s new leaders in the minds of China’s 85 million Communists, according to Sidney Rittenberg, 92, a party member from 1946 to 1980 who was Mao’s translator.
Getting cadres in line behind the leadership that started taking up its positions a year ago would reduce the danger of fracture should Xi follow through on what one member of the paramount Politburo Standing Committee says will be “unprecedented” reforms to reshape China’s $8.4 trillion economy. 

The introspective sessions come ahead of a four-day conclave, known as a plenum, starting Nov. 9 that Credit Suisse Group AG says may see decisions that allow local governments to issue bonds and ease China’s one-child policy.

Maoist Techniques
“It’s not Maoism -- Mao would be the last one to increase the role of market forces in the economy -- but what it is doing is reviving some of the practices from Mao’s day which made the party popular,” said Rittenberg. 

“The reason Xi is trying to do it is his main interest is focused on restructuring the economy.”
Party members are encouraged during the sessions to learn more about the concerns of ordinary citizens, shun extravagance and admit their shortcomings. 

Xi himself listened to top local officials in the northern Hebei province on Sept. 23. 

The provincial leaders pledged to live among the masses for at least three days, according to an account published by the official Xinhua News Agency.
“I don’t want to hear fancy words from you when I take part in your sessions,” Xi was quoted as saying. 

“I want real criticisms and self-criticisms.”

Economic Upswing
The plenum, a meeting of the party’s more than 200-strong Central Committee, will provide Xi with a chance to put his mark on China’s economy, much as the late Deng Xiaoping did more than three decades ago. 

Two years after the death of Mao, the 1978 plenum helped usher in reforms that led to the dismantling of the communal farm system and the opening of China to foreign trade.

Analysts surveyed by Bloomberg News last month said policies that emerge from the plenum will lessen the odds of a severe economic slowdown or financial crisis and will most likely include changes in financial markets and local-government funding.
Signs of an economic upswing may boost the leadership’s confidence in promoting reforms. 

A non-manufacturing Purchasing Managers’ Index rose to the highest level this year in October, a government report showed yesterday, following faster-than-expected growth in two manufacturing indexes last week.

Deviant Leaders
Rittenberg, who took part in self-criticism campaigns in the late 1940s, said the group sessions were essential for bolstering unity by smoking out “politically deviant tendencies” among leaders at all levels and involved close study of the top leadership’s policies.
“The current leadership wants everything under control and no surprises, no indirect challenges, before the plenum,” said Ding Xueliang, a professor of social science at the Hong Kong University of Science and Technology.
The campaign may be having the desired effect on a 31-year-old bureaucrat surnamed Wang, who works at a government ministry in Beijing. 

He said he didn’t know what to say in the 90-minute sessions he attended before seeing television footage of the Hebei meeting where Xi spoke.
“It’s easier to understand than what we learned in the past 10 years under Hu and Wen,” Wang said, referring to former President Hu Jintao and Premier Wen Jiabao, who stepped down this year. 

“The new leadership has already demonstrated its vision and has already set out some plans or initiatives like a free-trade zone in Shanghai.”

No Flowers
While the self-criticism campaign is aimed at bolstering party control, Ding said it will spur “distrust” in the ranks. 

“This has already created a lot of embarrassment for party officials,” he said.
Zuo Chunhe, who sits on Hebei’s legislature and isn’t a party member, questioned whether the group confessions would address core problems like official graft.
“This kind of mindset provides no solution for corruption and carries little meaning, because corruption comes from the way our system is built,” he said.
The surroundings in the room where the Beijing ministry’s Tang faced his boss were austere, in line with Xi’s frugality drive.
“No flowers, no ornaments, just a bottle of mineral water for each person,” he said. 

“When it was a leader’s chance to hear criticism from colleagues about his working style, he had to listen to everyone and then make comments himself. The atmosphere was serious.”

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Forging an Art Market in China

By David Barboza, Graham Bowley and Amanda Cox

BEIJING -- When the hammer came down at an evening auction during China Guardian’s spring sale in May 2011, “Eagle Standing on a Pine Tree,” a 1946 ink painting by Qi Baishi, one of China’s 20th-century masters, had drawn a startling price: $65.4 million. 

No Chinese painting had ever fetched so much at auction, and, by the end of the year, the sale appeared to have global implications, helping China surpass the United States as the world’s biggest art and auction market.
But two years after the auction, Qi Baishi’s masterpiece is still languishing in a warehouse in Beijing. 

The winning bidder has refused to pay for the piece since doubts were raised about its authenticity.

Qi Baishi’s “Eagle Standing on a Pine Tree” has not been paid for.

“The market is in a very dubious stage,” said Alexander Zacke, an expert in Asian art who runs Auctionata, an international online auction house. 

“No one will take results in mainland China very seriously.”
Indeed, even as the art world marvels at China’s booming market, a six-month review by The New York Times found that many of the sales — transactions reported to have produced as much as a third of the country’s auction revenue in recent years — did not actually take place.
Just as problematic, the market is flooded with forgeries, often mass-produced, and has become a breeding ground for corruption, as business executives curry favor with officials by bribing them with art.
Fraud is certainly no stranger to the international art world, but experts warn that the market here is particularly vulnerable because, like many industries in China, it has expanded too fast for regulators to keep pace.
In fact, few areas of business offer as revealing a view of this socialist society’s lurch toward capitalism as the art market. 

Like many luxury businesses in China, the explosion of buyers for art here has been fueled by the pent-up consumerism of the newly rich. 

The demand is so great that last year, in a country that barely had an art market two decades ago, reported auction revenues were up 900 percent over 2003 — to $8.9 billion. (The United States auction market for 2012 was $8.1 billion.)
While the luxury-buying habits in China often mimic those in the West, the demand for art reflects uniquely Chinese tastes. 

While the rest of the world bids up Pollocks and Rothkos, Chinese buyers typically pursue traditional Chinese pieces, some by 15th-century masters, and others by modern artists, like Zhang Daqian, one of many who have chosen to work in that old style.

Ceramic vases and jugs dry before being fired in the kilns at the Xiong Jianjun factory, one of China’s best-known makers of reproductions, in Jingdezhen, the ancient center of porcelain making.

This very reverence for the cultural past is now contributing greatly to the surge in forgeries. 

Artists here are trained to imitate the old Chinese masters, and they routinely produce high-quality copies of paintings and other works, such as ceramics and jade artifacts. 

That tradition has intersected with the newly lucrative art market, in which reproductions that so many have the skills to create are often offered as the real thing. 

It would be hard to create a more fertile environment for the proliferation of fakes.
“This is the challenge right now,” said Wang Yannan, the president and director of China Guardian, the nation’s second-biggest auction house. 

“In the mind of every Chinese, the first question is whether it’s fake.”
For years, much of the forgery went unnoticed as works passed from buyer to buyer, their prices spiraling up. 

But, increasingly, high-profile scandals are exposing the extent of the fakery and sowing doubts about the larger market. 

In one case, three years ago, an oil painting attributed to the 20th-century artist Xu Beihong, which sold at auction for more than $10 million, turned out to have been produced 30 years after the artist’s death by a student during a class exercise at one of China’s leading arts academies.
Even more embarrassing was the government’s decision last July to close a private museum in Hebei because of suspicions that nearly everything in it — all 40,000 artifacts, including a Tang dynasty porcelain vase — were fake.
“There’s always been forgers on the market, but it’s a matter of proportion,” said Robert D. Mowry, a former curator of Asian art at Harvard who is now a consultant for Christie’s.
Concern about fraud and a cooling economy seem to have tempered enthusiasm in the Chinese art market. After peaking in 2011, reported revenues dropped off 24 percent last year, according to Arts Economics, a research company that studies the international market. 

This year is expected to be modestly better than 2012.
The Chinese auction industry and the government have taken notice, and say they are looking to clean up the abuses and stem further damage to consumer confidence, especially since the art market is actually perceived by many as one of the safer places to invest.
“A majority of Chinese people do not trust the Chinese stock market,” said Melanie Ouyang Lum, a consultant on Chinese art. 

“The housing boom has slowed tremendously. A lot of people are looking to art for investment.”
In fact, Zhang Daqian, a 20th-century artist known for his landscapes, is one of several Chinese painters who have joined Picasso and Warhol as the best-selling artists in the world even though their names hardly register outside collecting circles.

China has identified culture as a core area for economic growth, and a vibrant art market as a useful tool of soft power, promoting a view of Chinese society as a center of aesthetics and beauty and deflecting the international focus from political and human rights issues. 

The Chinese are handicapped in cleaning up the art market, though, by a weakness in their laws, which absolve auction houses of any responsibility if a work turns out to be fake.
The forgery problem helps account for the soaring number of payment defaults. 

In the past three years, a study of sales at mainland auction houses by the China Association of Auctioneers found that about half the sales of artworks worth more than $1.5 million — a major portion of the market — were not completed because the buyer failed to pay what was owed. (For major auction houses in the United States, the default rate for works of the same value is negligible, several experts said.)
“It has something to do with the general environment in China,” said Zhang Yanhua, the association chairwoman. 

“As you know, China is still trying to build the rule of law in this country.”

Other explanations for the wave of defaults and late payments, experts say, include instances in which bidders got buyer’s remorse or just bid up a price to increase the value of works by a particular artist they collect.
Even when you factor in faulty revenue reporting, the rise in art buying over the past decade has been meteoric, with Chinese banks, state-owned companies and business tycoons continuing to invest in the boom. 

Art has become a kind of currency, and collecting is so popular in China now that auctions are often mobbed. 

On Chinese television, more than 20 programs offer tips on collecting and on identifying cultural relics, and late-night infomercials promise quick riches to viewers who purchase a $2,500 collection of works by former students of renowned masters. 

Purchase today, the ad declares, and you can immediately secure a profit of $100,000. 

With so much at stake, Chinese art dealers have rushed to Europe and America to buy back Chinese relics. There has also been a rash of museum thefts involving Chinese antiquities. 

And a black market in artifacts has emerged, with so-called tomb raiders digging up buried treasures that they can sell.

At a time when some other markets are drawing fewer investors, packaged collections of paintings in the traditional style are advertised on infomercials as having a huge potential returns.

The interest in addressing the market’s weaknesses may have played a role in China’s recent decision to loosen longstanding rules that restrict Western auction houses from access to the Chinese market.
Now Sotheby’s has a joint venture with a state-run company, and Christie’s won a license this year to become the first international auction house to operate independently in China — developments that may serve to foster competition and higher standards in the market. 

Ms. Zhang, the head of the auction association, said bringing in the Western auction houses was like putting a crocodile in a pond.
“It makes the fish swim faster,” she said.

The Rising Price of Culture
Less than a decade ago, the Chinese art market was still quite sleepy, a legacy of the Cultural Revolution when luxury items were viewed as bourgeois and the Red Guards raided homes, seizing and destroying art.
Ma Weidu, a major collector based in Beijing, recounted how easy it still was in the 1980s to secure small artifacts. 

People gave them to him for nothing, he said, or traded them for a few cigarettes. 

Occasionally, he would pay a small fee.

Ma Weidu, a major collector who picked up some pieces in exchange for cigarettes after the Cultural Revolution devalued art.

“They’d say: ‘Take it all. All I want is a washing machine,’” he recalled.
The auctioning of art remained rare until the early 1990s, when the government lifted restrictions on the sale of cultural relics. 

Still, the art market did not begin to take off until 2004, fueled by rising incomes.
Now there are more than 350 Chinese auction houses that deal in fine arts. 

The two largest — Poly International Auction company, and China Guardian — are billion-dollar enterprises with offices in several cities, including Tokyo and New York, and close ties to the country’s ruling elite.
But as the market has grown, so has its dark underbelly. 

Price manipulation is rampant, analysts say, as collectors and investors, perhaps an art investment fund with large holdings in a particular artist, bid up a work to boost the value of their entire inventory. 

Sometimes, experts say, auction houses themselves throw in fake bids. 

The Chinese have a name for the price-boosting process. 

They call it “stir frying.”

Qi Baishi’s Fish and Shrimp

While some collectors care deeply about their art, even exhibiting it in their own elaborate private museums, many buyers are primarily investors looking to flip a work for profit, experts say. 

Objects are sold and resold. 

One painting by Qi Baishi, “Fish and Shrimp,” sold four times at auction in the 10 years ending last December, the price climbing to $794,000 from $30,000 in 2002, before trailing off last year to $552,000.
Resale opportunities are a priority for many buyers. 

At an auction in Beijing last month, four men from Guangzhou bought several paintings worth tens of thousands of dollars. 

“Most people you see here, we don’t have a real job, we are traders,” said one of the men, in a white bomber jacket. 

“We buy them and resell them to educated, wealthy people.”
Analysts say that flipping artwork contributes to the market’s nonpayment problem. 

Before an auction, a buyer might find a collector interested in a piece and bid successfully for it, but refuse to pay if the deal with the collector falls through.
And then there are the payment problems that arise because China’s art market is, economically speaking, so young, and its rich are so recently minted.
“There is still a big difference between East and West in understanding whether raising a paddle at an auction is actually a binding contract or not,” said Philip Tinari, director of the Ullens Center for Contemporary Art in Beijing. 

“Some young starlet buys a bunch of paintings at an auction, walks out and says, ‘Nos. 13, 11, 7, 6, 5 those are the ones I don’t want.’ It happens all the time.”
Auction houses have typically papered over the nonpayments, reporting aborted transactions as true sales, even posting record prices and seldom correcting the record. 

This has misleadingly burnished their revenues, making the market seem hotter and propping up prices, industry experts said.
The practice has so alarmed the Chinese authorities, who worry that it could undermine the credibility of the market, that the auction association and state bodies like the ministries of commerce and culture stepped in a few years ago.
As part of a larger program of reforms, the association now collects nonpayment data and publishes its findings in an effort to expose malefactors. 

It not only encourages auction houses to blacklist buyers with a history of not paying, but also recommends that the houses require steep deposits from potential bidders. 

The government has canceled or suspended the licenses of 150 auction houses between 2008 and 2011 for a variety of problems, including the sale of fake items.
Even with the fraud and fakery, many collectors and investors say there is too much excitement and profit in the market to warrant dropping out, especially when new money keeps showing up at auctions, ready to buy.
“In the newspapers, there are always stories of someone buying something for a dollar and selling it for a million,” said Rui Zhang, who runs the art market and management programs at Tsinghua University in Beijing. 

But Jiang Yinfeng, an artist, critic and curator, said that the people who suffer in such an overheated market are often those with little experience in such matters. 

“Some of my friends use their houses as collateral to buy art items,” he said. 

“Some of them take high-interest loans.”
One engine driving the Chinese art market has been the culture of gift-giving, which prompts provincial officials to arrive en masse in Beijing during the Mid-Autumn Festival in September, further clogging the congested streets as they ferry presents of art, alcohol and other items to senior government officials.
But art is also used in more elaborate bribery schemes. 

In some cases, an official will receive a work of art with instructions to put it up for auction; a businessman will use it as the currency for a bribe, purchasing the art at an inflated price and giving the official a tidy profit.
“Unlike cash, the value is less obvious,” said Zhang Pingjie, a curator at the Himalayas Art Museum in Shanghai.
Whether the given work is real often doesn’t matter, experts say, because the buyer intends to spend lavishly anyway. 

And were the scheme to be discovered, the minimal value of a fake would mean a lesser punishment.
The bribery of public officials with art is so widespread that the Chinese have coined a term to describe this kind of aesthetic corruption.
They call it “yahui” or “elegant bribery.”
One such bribery case occurred several years ago when the city of Chongqing cracked down on the gangsters who controlled its buses, taxis and gambling parlors.
In 2009, the authorities detained the man who had protected the criminals: the city’s own deputy police chief, Wen Qiang.
Searches of Mr. Wen’s properties turned up watches, wine and other items typical of graft around the world, including $3 million in cash wrapped in oil paper and submerged in a fish pond.
But investigators also discovered a surprisingly expansive and expensive collection of art at Mr. Wen’s mountainside villa and another home he kept at the Crabapple Moon Residences. 

He had been given, they said, more than 100 works, including fine ivory sculptures and a Buddha head carved from stone. 

Valuable calligraphy scrolls were stored in a ceramic container. 

A painting attributed to Zhang Daqian rested on a bookshelf.
Mr. Wen was executed for his crimes the next year.
“Who is in the auction market?” asked Li Yanjun, an art expert and authenticator at Beijing Oriental University.
“Government officials,” he said. 

“They hide and have people bid for them, or buy up their works.”

An ornate jade dressing table and stool, sold in 2011 as Han dynasty antiquities, later proved to have been made just a year earlier.

Brand New Antiquities

The stool and dressing table were a set, carved from jade and said to date from the Han dynasty, some 2,000 years ago. 

Their sale at auction in Beijing two years ago drew $33 million and lots of fanfare.
But then experts began pointing out that Chinese did not sit on chairs during the Han dynasty (206 B.C. to A.D. 220). 

They sat on the floor.

Eventually, a leader of the jade trade in Pizhou, a village in Jiangsu Province in eastern China, acknowledged that the pieces had been created by craftsmen there in 2010.
Wang Rumian, former president of the Pizhou Gemstone and Jade Industry Association, said in an interview last month that it had been the art dealers, not the craftsmen, who chose to pass off the set as ancient.
“It wasn’t made that well,” he insisted.
But it was good enough to fool the Chinese art market and draw a record price for jade that year.
The trail of phony “antiques,” bogus paintings and fake bronzes winds throughout China these days. 

In Jingdezhen, a city in the rugged mountains of southeast China, small workshops produce exquisite reproductions of Ming and Qing dynasty porcelain, the craftsmen going to some lengths to build the wood-fired kilns that help create the subtle textures and glazes.
In Yanjian, a dusty village in central Henan Province, they use ammonia on bronze to induce corrosion and produce that same greenish, oxidized patina that comes from exposure, allowing a bell or ritual wine vessel made a few days ago to pass for an artifact unearthed from a tomb.

And in Beijing, Tianjin, Suzhou and Nanjing, highly skilled painters and calligraphers are replicating the brush strokes of revered masters.
So-called traditional Chinese paintings typically depict the natural beauty of mountains, rivers and forests in an ancient style, and, together with calligraphy, are the workhorses of China’s art market, accounting for nearly half the money taken in at auction last year. 

So, throughout the country, painters work to copy masters like Qi Baishi and Fu Baoshi.
“I’ve seen 700 to 800 people in a painting workshop, with a clear division of labor, making the works of Qi Baishi,” says Zhang Jinfa, a professional arts authenticator based in Beijing.
A study last year by Artron, an art data company based in China, estimated that as many as 250,000 people in about 20 Chinese cities may be involved in producing and selling fakes. 

Visits to several of these cities in recent months documented that such production centers are thriving.
Thousands of people in Jingdezhen, the ancient center of porcelain making, are employed by its bustling workshops, where bare-chested craftsmen sit hunched over, spinning clay into ancient forms. 

Down the production line, painters dip their brushes in ink and copy the outlines of flowers or traditional Chinese patterns onto the pottery. 

Often, the images are taken directly from auction catalogs that are pressed open on a nearby table.
One of the best-known ceramic reproduction makers in Jingdezhen is Xiong Jianjun, who spent eight years making a copy of a Qianlong vase at the request of the National Museum in Beijing.
“You need to study the fundamentals and decipher what they did back then,” said Mr. Xiong, who said some of his reproductions have been sold without his consent as antiquities.

Workers recreating antique ceramics from clay at Xiong Jianjun’s factory, which specializes in such reproductions. Mr. Xiong spent eight years making a copy of a Qianlong vase at the request of the National Museum in Beijing. 

In China, the tradition of copying reflects more than a simple reverence for the past; it is an appreciation that beauty has been captured in a fashion worth emulating. 

Unlike the West, where “the shock of the new” is admired, China values tradition, and its best-selling works often pay homage to, and look like, those made hundreds of years earlier.
At prestigious art schools, students engage in what the Chinese refer to as “lin mo,” or imitating the masters. Forgery and fraud are not necessarily part of the tradition, experts say, though famous painters like Zhang Daqian, who died 30 years ago, took pleasure in fooling the experts.
“Zhang Daqian felt he was an equal to the old masters,” said Maxwell K. Hearn, chairman of the Asian art department at the Metropolitan Museum of Art in New York. 

“And so the true test was whether he could copy them. “
One story that illustrates Mr. Zhang’s playful approach to copying concerns his 1967 trip to review an exhibition of the works of Shitao, a 17th-century painter, at the University of Michigan Museum of Art. 

His tour guides were proud to show him the works of such a famous painter, who had died more than two centuries earlier. 

So they were surprised when Mr. Zhang began to laugh and point to various works on the wall, saying: “I did that! And that.”
“That is how Zhang Daqian talked,” said Marshall Wu, a retired professor at the University of Michigan who first met Mr. Zhang in the 1960s. 

“You never really knew if he was serious or kidding. But he did a lot of Shitao forgeries.”
Mr. Zhang’s work now serves as a model for a painter in Beijing, Liang Zhaojin, who studied with the master and now works in his own classical style that is based on that tradition.

Liang Zhaojin 

“I am honoring Master Zhang,” he said, “by inheriting and promoting his style.”
It is easier to detect fakes, of course, when the artists are still alive. 

Artron recently collected 100 works attributed to a popular painter, He Jiaying, and, with his help, determined that about 80 were fakes.
“Basically, everything is controlled by middlemen,” said Wu Shu, a writer who has posed as an art dealer and published three books on the subject, including, “Who Is Swindling China?”
“They generally divide the goods into three categories: the best-quality things go to the auction market; midlevel works go to the antiquity markets; and lower-level things go to flea markets,” Mr. Wu said.
Experts say some Chinese dealers and consignors slip works into auction by doctoring old sales catalogs to invent a provenance, and — if all else fails — paying an auction house specialist to include a suspect item.
Auction houses need impressive consignments to attract collectors, and experts say that, in their desperation for inventory, many have ordered forgeries.
“I would say 80 percent of the lots at small and medium-sized auction houses are replicas,” said Xiao Ping, a prominent painter who formerly worked as an authentication adviser to the Nanjing Museum.

Qi Baishi, an often imitated modern master of traditional Chinese painting, who died in 1957.

Immortal Creativity

Qi Baishi was a master of the ordinary. 

In the summer of 1957, with his health deteriorating, the painter went into the studio of his traditional courtyard residence in Beijing, dabbed his brush in ink and created a portrait of a flower, a long-stemmed raspberry-and-yellow peony.
Three months later, he was dead, at 93.
“That was the last work he completed,” said his grandson Qi Bingyi, who keeps the painting locked in a safe at his home in Beijing. 

“I have it right here. Do you want to see it?” he said before unrolling the work for visitors last month.
Death, however, seems to have done little to curb Qi Baishi’s productivity, according to auction records and interviews with experts and his family. 

They indicate that rising values and his popularity as one of China’s greatest modern painters have led to a flood of fake Qi Baishis on the market.
Liu Xilin, editor of “The Complete Works of Qi Baishi at the Beijing Fine Arts Academy,” said about half the Qi Baishi works that come up for auction in China are fake. 

“I can see that by just looking at their catalogs.”
In the past 20 years, works attributed to Qi Baishi have been put up for auction more than 27,000 times in China.
In one sign of the mania, 5,600 works attributed to Qi Baishi came on the market in 2011, up from 381 works in 2000.
Qi Baishi, born in 1864 into a peasant family, herded cows and worked as a carpenter’s apprentice before taking up painting at 27. 

Fame came a few decades later, after he moved to Beijing and adopted a fluid, almost calligraphylike style, using an ink wash.
He specialized in vivid landscapes and portraits of nature, documenting begonias, dragonflies, grasshoppers, frogs, chickens, crabs and shrimp, lots of shrimp.
Scholars say he was prolific and estimate he produced between 10,000 and 15,000 works in his lifetime. 

Of those, about 3,000 are in the collections of major museums and some are assumed to have been destroyed during the Japanese invasion in the 1930s or during the Cultural Revolution, when Red Guards looted and occupied his family’s home.
Auction records, though, show that more than 18,000 distinctive works by Qi Baishi have been offered for sale since 1993, an impossible number, if the expert estimates are right.
In a study this year, Artron said many of China’s leading modern artists are being counterfeited, but none more so than Qi Baishi. 

Arnold Chang, who ran Sotheby’s Chinese painting division in the 1980s, is equally emphatic.
“There is no doubt,” he said, “that there are far more works ascribed to Qi Baishi in the market than he could have possibly painted, even with an assembly line of assistants — which he supposedly had.”
Just about every major city in China has an art dealer who claims access to high-quality Qi Baishi fakes. They are often sold as reproductions, as are many of the elaborate counterfeits created here, but experts say many of them invariably end up at auction, rebranded as the real thing.
Qi Baishi’s own family, some of them painters, aggressively promote themselves as descendants of the famous artist in order to sell their works, done in his style.
“Some distant relatives can’t even draw very well, and they go out and claim they are Qi Baishi’s family,” said Qi Binghui, a granddaughter of the artist, who is based in Beijing.

“If you’re going to do something in your grandfather’s name, at least live up to his standard.”
Family members say they have been pressed to authenticate fakes, to pose for photos with pieces that might go to auction and even to mass-produce famous works by Qi Baishi.
“I can tell you I was once asked to go to Thailand to justify a batch of 20 fake paintings claimed to be my grandfather’s,” Qi Binghui said.

“That person was trying to sell those fake paintings in Thailand, and he wanted me to assure the buyers that they were real.”
Concern over fake Qi Baishis is now a challenge for auction houses. 

China Guardian, the big auction house, says it has an enviable record of spotting fakes, and most experts agree that its reputation stands above all others. 

But in the spring of 2011, China Guardian marketed “Eagle Standing on a Pine Tree” as the classic masterpiece the painter had created decades earlier to honor the birthday of Chiang Kai-shek, then president.
The work was put up for sale by Liu Yiqian, a former taxi driver turned wealthy financier, who has become one of China’s largest art collectors. 

He sold it as a set with a calligraphic couplet Qi Baishi wrote to accompany the painting, and the auction house estimated it could bring in as much as $20 million.
On a cool evening in May, bidding on the work went back and forth for more than 30 minutes as a collector in the room jousted with someone calling in bids by telephone. 

When the hammer fell at a record $65.4 million, the room burst into applause.
The euphoria did not last long, though. 

An art critic, Mou Jianping, soon suggested that the work might be fake, and the bidder decided not to pay. 

Two years later, the buyer has effectively defaulted on the item.
Mr. Liu declined to comment on the failed sale.
But in an interview last month, Kou Qin, director and vice president of China Guardian, described the nonpayment problem in the market as “a very bad phenomenon,” but one that will be fought. 

His company reduced its nonpayment rate for the most expensive items to 17 percent last year.
“Lack of honor,” he said. 

“It is a problem faced by the whole of society.”

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China, corruption and the court intrigues of Nanjing

What really lay behind the sacking of Ji Jianye, mayor of one of China's largest and booming cities?
By David Hearst

'To have called the sacked mayor Ji Jianye a Mr Big was something of an understatement.' 

For much of the week, few locals in Nanjing knew what to say to a group of foreign journalists on an exchange visit organised to show a western audience life in a part of booming China that was neither Beijing or Shanghai.
The historians talked up the city's glorious past, the six dynasties it lived through as the pre-communist capital of China. 

Software engineers pointed to a glorious future as a clean new Silicon Valley, a city with two top-class universities and an abundant supply of graduates. 

It has to be said the smog was pretty persistent.
Together they waxed lyrical with a combination of genuine local pride at a city with modern infrastructure and confected party rhetoric. 

Brilliant achievements, social development and, that ubiquitous word, harmony featured large in their presentations.
There was just one elephant in the room. 

The day we arrived, Beijing announced Nanjing's mayor had been fired. 

The city's boss had become the latest target of President Xi Jinping's anti-corruption crusade. 

It was too late to cancel the visit. 

Everyone froze.
To have called the sacked mayor, Ji Jianye, a Mr Big was something of an understatement. 

In a city with a population the size of London and in a province with more people than Britain, the former mayor had a finger in every pie.
The trouble started when he began ripping up the city's beloved plane trees to build the underground. 

Two lines have been completed, seven more are under construction and four of them will be completed by next year. 

The breakneck pace of construction earned Ji the title of "the digger", and prompted a silent march of 3,000 people.
Then there were the motorways, the railway station (the biggest reportedly in Asia), the tower blocks bearing 82,000 flats. 

They sprout like mushrooms in the once-rural hinterland of the lush Yangtze delta. 

Every day the cranes swing and bulldozers clear another footprint for a high-rise block. 

Even by China's standards, the construction boom in this once sleepy walled city is frenetic.
So when the organisation department of the central committee of the Communist party of China announced that Ji had been fired for "suspected serious disciplinary violations", and when the People's Daily put the figure for the sum that Ji had allegedly embezzled by passing construction contracts to friends at 20m yuan ($3.3m), many here greeted the news with a wry grin. 

That could only have been a fraction of the sum involved. 

The CPC, they concluded, was once again sheltering one of its own.
News of Ji's removal triggered a wave of rumour on the internet: Ji had been arrogant; he had run city hall from a luxury hotel suite; he had a bad temper and hit his aides round the head with their briefing papers.
The pall cast over a man who had still to face any charges, let alone defend himself in a court of law, spread by osmosis to the projects he promoted. 

A dodgy venture to separate rainwater from sewage water, into which millions of yuan had been poured, was suspended.
But then people started asking other questions. 

Was Ji a rotten apple, was he different from the rest of the party elite, or had he simply lost political cover? The People's Daily said that investigations into Ji were connected to a parallel probe into the richest man in Suzhou in Jiangsu province, Zhu Xingliang. 

His construction company received many of Ji's contracts. 

Ji worked for eight years as mayor and party secretary in Yangzhou, which was Jiang Zemin's hometown. The former president and head of the party often used to return for a visit and Ji became one of Jiang's proteges.
Not long ago Jiang emerged from the shadows of his retirement praising Xi Jinping as an "extraordinarily capable and wise leader". 

Observers were at the time perplexed by Jiang's lavish praise for the princeling who had displaced him. 

They speculated that one motive for doing so was to shield Jiang's supporters from Xi's anti-corruption drive. If Ji does indeed belong to that group, we now know that Jiang's efforts were in vain.
The silence about Ji's fate was broken by his former boss, Nanjing party secretary Yang Weize. 

To the foreign journalists, it was clear that Yang was a man on the rise. 

He compared his own city to Boston, where his daughter and grandchildren live. 

He was unabashed by the comparison. 

He spoke with ease about the failings of the man who just one week ago had the same relationship to him as a prime minister has to a president.
Ji was responsible for the city budget and yet ,according to Yang, removing Ji was like removing a tumour from your body. 

At the time, the operation hurts, the cool party secretary explained, but then the body recovers and leads a healthy life: "The root of Mr Ji's corruption was that he let his personal interests prevail against the people's interests. We needed to remove this person from his position, which has been done."
The legacy of Ji's removal was a good one: "The rule of law has been established. Anyone who violates the law will be punished. This case will help improve the legal environment of the city. In the past, the fairness and justice of the market was affected by corruption, but now we will be able to build a fairer and better market governed by the rules of competition."
Yang dismissed any talk of a political coup. 

Political trials belonged, the city's party secretary maintained, to the era of the cultural revolution. But today that path "had been corrected". 

The party had its own disciplines and procedures and anyone who violated them knew what to expect.
Yang did not talk like a man who had anything to hide. 

He embellished the party line with his own metaphors and rhetorical swirls. 

Whatever battle had been waged behind the scenes in some luxury hotel where Ji was forced to write his confession, it was clear that Yang now represented the winning side. 

The people of Nanjing may never know what went on way over their heads. 

Their jobs, contracts, flats and, ultimately, freedom depends on keeping as far away from these court intrigues as they can.

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In China, everyone is guilty of corruption

Your business can't survive a day if you are not corrupt.

By Lijia Zhang

Police stand guard outside the court where disgraced politician Bo Xilai was sentenced to life in prison in September.

• Use of guanxi or connections part of everyday life
• Businessmen say they can't survive unless they are corrupt
• China needs to focus on rule of law not "rule of men"

Another "tiger" has been caught. 

Last week, Ji Jianye, the mayor of my hometown Nanjing, a major city in eastern China, was arrested on suspicion of accepting bribes worth about 20 million yuan ($3.3 million)
After taking power in March, President Xi Jinping launched a high-profile anti-corruption campaign, vowing to catch both tigers and flies -- big and small corrupt officials. 

China has seen plenty of such campaigns, arising and subsiding like summer storms.
But this one appears to be the most vigorous since China opened up; when corruption became rampant in the new market economy and officials started to trade power for financial gains.

Author and social commentator Lijia Zhang

Much as I appreciate our president's determination, his battle feels like an attempt to "put out a big fire with a glass of water," given how corruption has reached every corner of our society.
Chinese public opinion surveys identify corruption as the most hated social problem, yet everyone is also guilty of it.
Last year, when my father fell seriously ill, we took him to a decent hospital close by but were told the beds were fully occupied. 

As always, we turned to our guanxi -- our network of connections -- for help.
Fortunately, a relative, a not so senior but well-connected official, managed to secure a private room at the hospital, which is reserved for ranking leaders. 

In return, the relative agreed to get the son of the hospital director into the most desirable school in Nanjing.

Corruption hurt Communist Party

On China: Reform

On China: Tigers and flies

I became aware the weight of guanxi shortly after I was thrust into adulthood: At 16 I was dragged out of the school to work at a military rocket factory.
Two months later, when Spring Festival came, my mother requested that I visit my boss' home with gifts she had prepared.

Naive and embarrassed, I refused. 

Mother angrily predicted: "You'll never go far in life if you don't know how to la guanxi!" 

The verb la means to pull or to develop. 

Sure enough, I never got any promotion during my decade-long stint at the factory even though I acquired a degree in mechanical engineering.
For any Chinese businessman, guanxi is essential. 

Recently, I met up with a long-lost friend, with whom I marched in the Nanjing streets back in the spring of 1989 and shouted "Down With Corruption" -- one of the complaints that had sparked the unprecedented Tiananmen Square democratic movement.
More than 20 years later, this friend spends 90% of his time running his high-tech company. 

His youthful idealism has gone and his waistline has expanded considerably. 

With a ghost of a smile, he blames it on the excessive dining, drinking and occasional visits to prostitutes that are part of the tiresome game of guanxi. 

"Your business can't survive a day if you are not corrupt," he told me.
He has to smooth every step of his business with gifts or outright bribes: From obtaining the business license, to entertaining potential clients, to receiving 15% of the tax deduction that a high-tech company is entitled to. He estimates that 3% to 5 % of operating costs goes to guanxi.
Such practices drive entrepreneurs to seek senior officials as their patrons because politicians in China have the power to approve projects and allocate resources.
The relationship between the now disgraced politician Bo Xilai and businessmen Xu Ming, the founder of Dalian Shide Group, was typical of such patron-client relationships. 

Xu, a large man, allegedly fattened his pockets through his guanxi with the Bo family as he funded the family's jet-set life style.
Xu was detained shortly after Bo's arrest and testified against Bo at his trial in August, although Xu has not been charged with any wrongdoing.
Local media reports suggest that authorities are investigating similar ties between the newly disgraced Nanjing mayor and Zhu Xingliang, the richest businessman in Suzhou, a city near Nanjing, who has also been placed under house arrest.
And politically, China produces its top leaders more or less based on patron-client ties rather than meritocracy. 

Both President Xi and Bo are "princelings" -- the children of senior leaders, the most powerful and influential group in China. 

Nepotism, a form of corruption, has feudal roots.
In fact, I believe the whole corrupt practice of guanxi is rooted in China's long tradition of renzhi -- rule of men rather than the rule of law.
President Xi has called for a curb on official extravagance: No red carpet treatment, no luxury banquets and no fancy office buildings. 

But these are the symptoms not the root of the problem.
To stamp out corruption, he will have to not only observe the rule of law but also introduce genuine political reforms that would allow checks and balances, transparency, and independent scrutiny. 

Such remedies, although proven elsewhere, may be too strong for him to take.
I don't doubt that the authorities will net more tigers. 

But there will be hundreds and thousands more at large and countless flies, thriving in China's politically and culturally rich breeding ground for corruption.

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George Osborne in China – wide-eyed, innocent and deeply ignorant

Prostituting one's security and economic interests to a country whose values, practices and interests are wholly at odds with one's own is not openness but recklessness.
By Will Hutton

'Bambi in Beijing': George Osborne on last week's trade visit to China. 

Britain must be an open trading nation, welcoming inward investment just as it seeks to invest in others. 

But prostituting one's security and economic interests to a country whose values, practices and interests are wholly at odds with one's own is not openness but recklessness. 

Last week, George Osborne was Bambi in Beijing – wide-eyed and innocent to the threats of the Chinese forest in which he was so ignorantly wandering.
Together, the succession of deals – on banks, nuclear energy and hi-tech – represent such one-sided economic concessions and expose our own fundamental weaknesses that they are embarrassing to the point of humiliation. 

In each, Britain surrendered sovereignty and exposed itself to economic risks that were not worth the potential gain, especially for anybody with even an elementary understanding of contemporary China.
They also showed how indefensible so much financial and industrial policy has been over the past 30 years. Britain has surrendered its capabilities in sector after sector in the name of liberalisation and privatisation, a strategic policy that Bambi is continuing with unquestioning enthusiasm. 

I wonder, as he prostrated himself before the Chinese, whether he asked himself why he – and Britain – had ended up kowtowing to such a degree. 

I doubt it.
The most eye-catching deal was on nuclear power, with the agreement that the Chinese nuclear industry will be able to build and own nuclear power stations in Britain. 

Lady Thatcher boasted, when the electricity industry was privatised, that she was giving power back to the people. 

Thirty years later, we learn it's become a gift to the Chinese Communist party, offering its state-owned nuclear power companies price and profit-margin guarantees that privatisation and liberalisation, wholly unrealistically in such a long-term business, were supposed to have left behind for ever.
This is a breathtaking step in an industry where the sensitivities over operating safety, technical efficiency and waste disposal are so acute. 

Fukushima, Three Mile Island and Chernobyl are remembered around the world. 

Chinese state-owned companies are a byword, not least in China, for inefficiency, loss-making and politicisation of decision-making. 

The party has wrestled for a generation with the reality that these companies, designed by Mao to embody the communist dream of uniting economic and social obligations, abolishing worker exploitation and spearheading modernisation, are sclerotic economic duds.
Of course the party should let go, but it does not operate the kind of market economy that Bambi thought he was admiring. 

This is a system of Leninist corporatism. 

The party sustains its monopoly of power by control of the economy; it owns what it considers strategically important and allows private companies to operate only because they submit to a board of communist officials.
There are thus no sources of independent economic and political power. 

Crucially, the role of the state-owned enterprises is to offer employment, so heading off another potential challenge to party authority from social unrest. 

The job of the state-owned banks is to provide unconditional credit to the loss-making state-owned enterprises so they can avoid cumulative lay-offs that would otherwise run into tens of millions. Unsurprisingly, this politicised system is opaque and corrupt.
The state-owned nuclear power companies are at its heart. 

Last week, Transparency International declared that China's companies were the least transparent of any it surveyed. 

The Chinese nuclear industry is a black box unpenetrated by independent Chinese scrutiny, let alone foreigners. 

But you can be certain that the regulatory processes and decision-making will be as politicised as everything else. 

This is China's strategic and military heartland, central to one-party control.
British energy policy, post-privatisation, is a mess. 

Centrica, which owns British Gas, was EDF's partner in building nuclear power stations. 

It dropped out claiming that the probable financial returns were not high enough and too uncertain, preferring to spend £500m buying back its own shares to support their price and thus the bonuses of its directors, the kind of capitalism Bambi refuses to reform.
British ownership structures and director remuneration should be reconstructed and reconstituted and Centrica offered a long-term energy policy framework in which to invest. 

But that would be the sort of interventionist "socialism" that Ed Miliband favours. 

So, instead, we ask the Chinese Communist party to build nuclear power stations for us. 

Nor will they be as diligent as EDF has been in ensuring as much work as possible is sourced in Britain: the open ambition is to win work for China. 

Only Bambi could end up in such a position.
Compounding the error, he has decided to allow Chinese banks to trade in London through branches. Iceland's bankrupted banks operated in Britain through branches. 

Never again, we said.

If a bank wants to function here, it must put its own capital behind its British operations. 

But desperate to win the City's right to trade in renminbi, Bambi wants to waive this obligation uniquely for Chinese banks. 

China's banking system is precarious; non-performing loans could be as high as $5trn, proportionally far in excess of pre-crisis Iceland. 

At least the British taxpayer will be able to underwrite their British operations when the system crashes, as it almost certainly will.
Every executive from a hi-tech company visiting China is advised to travel with a new laptop, so extensive are the cyber attacks. 

But Bambi, oblivious to this reality, was busy promoting hi-tech collaboration, including with the space industry.
Here, Britain's position is once again crass. 

Eurosceptic Bambi and his party refuse deeper collaboration with the EU on space, recoil before the overt mercantilism of the Americans and so think China offers a blank cheque book. 

Chinese hackers need no longer hack the nuclear, space and other industries for insights and codes they can use for military and commercial advantage. 

Bambi is offering them all on a plate.
A Chinese schoolgirl told him and Thumper, aka Boris Johnson, that China would be concerned if so much of their country was being sold to foreigners. 

Thumper laughed it off. 

But with the People's Daily writing that progress had only been possible because of David Cameron's admission that he had mishandled Tibet (where, since 2009, 100 monks and nuns have set fire to themselves in protest against Chinese rule), Britain's abasement was complete. 

Economically misgoverned for a generation, we are reduced to being principle-free economic mendicants, with Bambi Osborne and Thumper Johnson touring the world for hand-outs. 

I don't know about you, but I am ashamed.

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Chinese American accused of being mob boss in China

Police in China say Vincent Wu was a ruthless mob boss who led gangsters.

• Wu's children and lawyers say he is upstanding philanthropist, entrepreneur
• Wu is expected to stand trial within weeks in China

BEIJING (AP) — When more than 500 policemen swooped in to arrest 40 suspected gangsters in southern China last year, the alleged kingpin was a Los Angeles businessman who had hoisted an U.S. flag amid a crowd to welcome Xi Jinping, now China's president, to California.
Vincent Wu's children and lawyers say he's an upstanding, philanthropic Chinese-American entrepreneur who has been framed by business foes who want to seize his assets, including a nine-story shopping mall. 

But police in the southern city of Guangzhou say he was a ruthless mob boss who led gangsters with nicknames such as "Old Crab" and "Ferocious Mouth."
Wu is expected to stand trial within weeks in Guangzhou on charges of heading a crime gang that kidnapped rivals, threw acid at a judge, set fire to farmers' sheds, operated illegal gambling dens and committed other offenses. 

Wu has told his lawyers that police interrogators tortured him into confessing.
In the absence of an independent legal system, the truth may never emerge. 

And although Wu is a naturalized U.S. citizen, American diplomats have not been able to see him because China recognizes only his residency in Hong Kong, a semi-autonomous Chinese territory.
The case provides a glimpse into the often murky world of business in China. 

Widespread corruption means entrepreneurs can cozy up with police and run roughshod over the law, but they are also vulnerable if their rivals gang up with local authorities.
When disgraced politician Bo Xilai led the southwestern metropolis of Chongqing, hundreds of businesspeople were accused of involvement in organized crime; many were believed to have been tortured into confessing while authorities seized their assets. 

Bo was sentenced to life imprisonment last month for embezzlement, bribery and abuse of power, but allegations that the businessmen were wrongfully convicted were not aired at his trial.
Wu was detained in June last year in a dramatic pre-dawn operation involving hundreds of police across Guangdong province, which includes Guangzhou and Wu's hometown of Huizhou.
He is charged with getting an associate to throw acid at a judge who ruled against him in a lawsuit, and with ordering thugs to set fire to sheds owned by farmers who refused his offer of compensation to clear off land he wanted to develop. 

He's also accused of operating illegal casinos that raked in 48 million yuan ($7.8 million), and of attacking or kidnapping people who crossed him in various disputes. 

About 30 other people face related charges of gang crimes.
Wu maintains his innocence, his attorney Wang Shihua said. 

Prior to his detention, Wu had been praised by local Chinese newspapers for giving more than 20 million yuan ($3 million) to his hometown.
"My dad is a really good person at heart, especially to the people who are farmers and have not enough money to go to school. He's donated money to the elderly and to help build a road," said Wu's daughter, Anna Wu, in an interview from Hong Kong, where she has based herself to try to draw attention to her father's case. 

"But in China, money speaks louder than law… if you want to bring someone down, you can bribe the police and certain people to make it happen."
Huang Xiaojun, a former business partner of Wu's and one of his accusers, said it is Wu who exploited government corruption. 

Huang said Wu tried to kidnap him four times and sought to seize his share of their business by bribing court officials.
"He is a man with no morals and integrity," Huang said in a phone interview. 

"He's extremely good at playing or acting and confusing right and wrong."
Wu's lawyers want to use his case to test the Chinese government's resolve to stick by its stated opposition to convictions based on evidence extracted through torture. 

In a written record of a December 2012 meeting with his lawyers, Wu described being beaten, kicked and deprived of food and sleep as police tried to coerce him to sign a confession.
On occasion, Wu's arms were tied behind his back with a rope that was then strung from a ceiling beam — a torture method dubbed the "suspended airplane," he told his lawyers.

If he fainted, he was woken with water or chemical stimulants.
"As soon as I did not cooperate, they hit me, hanged me," Wu told his lawyers, according to a copy of the deposition provided to The Associated Press by Wu's family.
Wu's legal adviser, Li Zhuang, said more than 20 witnesses also were tortured. 

During a pretrial meeting at the Guangzhou Intermediate People's Court on Monday, Wu's lawyers demanded that the court keep their testimony out of Wu's trial, which they expect to begin within a month.
An official at the Huizhou police bureau's propaganda department said he "had not heard" that interrogators might have tortured Wu.
Wu left China in the late 1970s as a stowaway to neighboring Hong Kong, where he obtained residency. 

He moved with his family to the U.S. in 1994, settled in Los Angeles and eventually became a U.S. citizen.
Even as an American, Wu spent most of his time in China, tending to his businesses and visiting Los Angeles twice a year, his daughter said. 

But she said he was also active in Los Angeles' Chinese-American business community; photos provided by her show him hoisting an American flag as he welcomed then-Vice President Xi Jinping — now the president — to the city early last year.
Chinese authorities have denied Wu access to U.S. officials, saying they regard him as a Hong Kong resident because he last entered China on a Hong Kong identity card.
U.S. officials have sent several notes to Chinese authorities about Wu's case, Wu's daughter said. 

U.S. Embassy spokesman Nolan Barkhouse said American officials were monitoring the case but could not comment out of privacy concerns.

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Xi Jinping Is No Fun

By Dexter Roberts

Xi, taking a page from Chairman Mao, doesn't go for fancy dinners

At the end of September, Chinese officials gathered in Shijiazhuang, in Hebei province, to discuss their shortcomings in Maoist-style self-criticism sessions. 

Under the watchful eye of President Xi Jinping, senior Communist Party members admitted to sins ranging from excessive ambition to detachment from the people.
“Formalism, bureaucracy, hedonism, and extravagance,” are “undesirable work styles,” that are “harmful, stubborn in nature, and prone to relapse,” Xi warned the Hebei party secretary and other assembled provincial cadres, reported the Xinhua News Agency on Sept. 25. 

“Party members and officials should be taught to look in the mirror, straighten their attire, take a bath, and seek remedies,” Xi said.
Much to the consternation of those who hoped the new leadership would adopt a more liberal approach, Xi is promoting what some Chinese scholars are calling a Maoist restoration. 

While authorities clamp down on the Internet and lash out at foreign pharmaceutical companies and infant formula makers, they’re resurrecting party slogans and practices used decades ago.

The campaign aims to restore party discipline and purity by stamping out everything from lavish banqueting to bribery, including the practice of cadres taking gifts. 

Some businesses are already getting hit hard. 

High-end restaurants, Swiss watchmakers, and sellers of the fiery baijiu liquor, all favorites of bureaucrats, have seen sales slump. 

“Now nobody dares to eat out or wear nice things,” says one traffic police investigator in Dongguan, in Guangdong province, who declined to give his name, as he was not authorized to comment.
At the center of Xi’s rectification campaign is a hoary Maoist doctrine known as the “mass line.” 

That means making sure the Communist Party of China learns from and remains close to the people, or as Mao Zedong himself put it, “from the masses, to the masses.” 

In June, Xi launched a one-year campaign to strengthen party-people ties and crack down on luxurious living among the party’s 85 million members. 

“Winning or losing public support is an issue that concerns the CPC’s survival or extinction,” Xi warned in a speech kicking off the campaign.
Confidence in the government has been badly battered as more cases of corruption emerge. 

The recently concluded trial of former Chongqing Party Secretary Bo Xilai, sentenced to life imprisonment for embezzlement, abuse of power, and accepting bribes valued at 20.4 million yuan ($3.3 million), has fueled cynicism about the party. 

“China today is so far away from what the Communist Party tried to build in its first 30 years. But Xi wants to demonstrate that the party is legitimate,” says Jean-Pierre Cabestan, director of government and international studies at Hong Kong Baptist University. 

“So he is trying to reinvigorate ideology and reintroducing Maoism Lite.”
The campaign is pinching purveyors of luxury goods. 

Exports to China and Hong Kong of Swiss watches, a sought-after gift for those currying favor with officials, were down 17 percent in May. 

The 14-year jail sentence announced Sept. 4 for Shaanxi province’s work safety administrator Yang Dacai, nicknamed Brother Watch on the Chinese Internet for his many luxury timepieces, won’t help sales. 

Yang was convicted on corruption charges.
“You have to be much more circumspect about whom you are gifting to and what you are gifting to them,” says Rupert Hoogewerf, chairman of the Hurun Research Institute, which surveys the lifestyles and buying habits of China’s rich. 

A Hurun study from early this year shows that in 2012 Rolex had already fallen off a list of the top 15 most popular gifts in China. 

“If you are in a position of power, now that the line has been drawn, accepting certain gifts makes you vulnerable,” he says.
Another casualty: expensive liquors, particularly baijiu, a standard gift for Chinese officials. 

In Guangdong province annual sales have exceeded 10 billion yuan ($1.63 billion) in each of the last four years, estimates a Dongguan-based sales representative from baijiu producer Luzhou Laojiao, who declined to give her name because she wasn’t authorized to speak by her company. 

This year sales have fallen 35 percent to 40 percent. 

The price for a bottle of fancy Feitian Moutai, produced by distiller Kweichow Moutai, has come down from as high as 2,300 yuan ($376) last year, to 1,100 yuan now, she estimates. 

Moutai fell from 5th to 13th in the latest Hurun gift survey (No. 1 is Louis Vuitton). 

“The baijiu industry has suffered because high-end entertaining has been hit so hard,” Hurun’s Hoogewerf says.
The catering industry, including all restaurants, saw growth slow to 9.4 percent in July, down from 12.7 percent the year before, according to China’s Ministry of Commerce. 

“Before, you needed to make reservations two days in advance for my restaurant. Officials from the court, police force, and industry and commerce departments were all regulars,” says Yin Xiaobing, the 54-year-old owner of a Cantonese-style eatery in Dongguan. 

“Now none of them come to eat. Xi has had a huge impact on our business,” she says, surveying her largely deserted restaurant.
The optimists say Xi’s Maoist tactics may be temporary and even meant to provide cover for a good cause. They say the campaign will strengthen the top leadership’s conservative credentials, even as it prepares, at a crucial party meeting in early November, to make sweeping economic and financial reforms that will hurt powerful state enterprises and the bureaucrats who control them.

Others say they are less hopeful. 

Rather than targeting unhealthy cadre behavior or providing cover for economic change, Xi wants to strengthen his own position, argues Willy Lam, an expert on Chinese elite politics at the Chinese University of Hong Kong. 

That’s true of Xi’s anti-corruption campaign, which has mainly netted officials with connections to jailed princeling Bo and his patron, former security czar Zhou Yongkang, says Lam.
Bo Zhiyue, a senior research fellow at the National University of Singapore, doubts the Maoist tactics will work. 

He points out that if the party really wanted a watchdog for corrupt behavior among its ranks, it wouldn’t be cracking down on the Internet. 

Popular bloggers have been called in and warned to behave responsibly. 

New rules making “rumor mongering” on the Web illegal have already led to arrests. 

On Sept. 17, Wu Dong, the microblogger who played a key role in exposing Brother Watch, was detained for 24 hours on suspicion of blackmail. 

The episode led to online speculation that Wu was targeted for his whistle-blowing.
Bo notes that ordinary Chinese have already begun mocking Xi’s ne0-Maoism on China’s microblogging site Sina Weibo. 

“These are tactics used by Mao in the 1940s. When you use them in the 21st century, it looks really ridiculous,” Bo says. 

Xi and the top leadership “are somehow detached not only from the masses, but also from all political reality in China.”

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