Chinese Crony Communism Update

by Patrick Brennan

The Times has a story today confirming what most of us already knew: China’s economic and political system is deeply corrupt. In particular, they highlight how much palm-greasing is necessary for Western companies to begin doing business in China, and how wealthy this has made the Chinese political elite, especially top members of the Communist Party. For example:

The Hollywood studio DreamWorks Animation recently announced a bold move to crack China’s tightly protected film industry: a $330 million deal to create a Shanghai animation studio that might one day rival the California shops that turn out hits like “Kung Fu Panda” and “The Incredibles.”

What DreamWorks did not showcase, however, was one of its newest — and most important — Chinese partners: Jiang Mianheng, the 61-year-old son of Jiang Zemin, the former Communist Party leader and the most powerful political kingmaker of China’s last two decades.

The younger Mr. Jiang’s coups have included ventures with Microsoft and Nokia and oversight of a clutch of state-backed investment vehicles that have major interests in telecommunications, semiconductors and construction projects.

That a dealmaker like Mr. Jiang would be included in an undertaking like that of DreamWorks is almost a given in today’s China. Analysts say this is how the Communist Party shares the spoils, allowing the relatives of senior leaders to cash in on one of the biggest economic booms in history. . .

For example, Wen Yunsong, the son of Prime Minister Wen Jiabao, heads a state-owned company that boasts that it will soon be Asia’s largest satellite communications operator. President Hu Jintao’s son, Hu Haifeng, once managed a state-controlled firm that held a monopoly on security scanners used in China’s airports, shipping ports and subway stations. And in 2006, Feng Shaodong, the son-in-law of Wu Bangguo, the party’s second-ranking official, helped Merrill Lynch win a deal to arrange the $22 billion public listing of the giant state-run bank I.C.B.C., in what became the world’s largest initial public stock offering.

Meanwhile, three former mid-level Communist Party officials have called on Party leaders to disclose their and their families’ wealth. This, like the letters calling on Bo Xilai’s supporters to resign from various Party positions (including one member of the Standing Committee), is a minor gesture, and the sentiments aren’t coming from top officials — but they’re still surprising and telling when they emerge from China, just before such a crucial political transition.

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