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Bloomberg: How Low Can Bo Go?

April 12, 2012

I was on Bloomberg yesterday, sharing some thoughts on the big political drama unfolding in Beijing.  And drama it truly is — on the order of All the King’s Men or Macbeth.  You can watch my comments here.  You can also read some additional comments I made in an AFP article here.

As most readers of this blog will already know, Bo Xilai — the charismatic politician who nurtured ambitious hopes of joining the Party’s 9-man ruling circle next Fall, before the aborted defection of a disaffected lieutenant over to the Americans led to his abrupt dismissal as Party chief of Chongqing last month — was just as abruptly purged from his remaining Party positions on Tuesday night.  But the real shocker — almost too bizarre to be believed — was the arrest of Bo’s wife,  Gu Kailai, on charges of murdering (poisoning, no less!) a British expat who had served as a long-time business confidant of the family.

The New York Times reports that efforts to cover up the murder led to an angry split with Bo’s police chief, Wang Lijun, prompting Wang to seek refuge in the U.S. consulate in Chengdu and — supposedly — hand the Americans a treasure trove of information on China’s internal power struggles.  Wang was arrested by Chinese security forces upon leaving the consulate, and hasn’t been seen since.  If that wasn’t enough, Xu Ming, a billionaire business tycoon with close ties to Bo, vanished without a trace nearly a month ago, and is presumed to be in the hands of Chinese investigators.

Earlier yesterday, Robert Kuhn, the author of How China’s Leaders Think, also appeared on Bloomberg to talk about the Bo saga.  You can watch what he had to say here.  While I agree with him that Bo’s ouster is unlikely to threaten the Communist Party’s hold on power  or lead to broader instability, I don’t agree that the whole thing can be dismissed as merely a “personal issue” that has “no great political significance.”  Imagine, if you will, what would happen in America or Europe if a leading political figure were suddenly forced from office after one of his top aides tried to defect to the Chinese, and his wife was arrested for murder, amid stories of abuse of power and financial misdeeds — it’s kind of like Profumo, Berlusconi, and Vince Foster all rolled into one.  The political order would probably hold together, but it would sure shake things up.

For additional reading, here are two fascinating articles about Neil Heywood, the alleged murder victim, one in the Wall Street Journal and the other in the New York Times.  You can also check out this very interesting article from the Los Angeles Times about how people in Chongqing — where Bo was apparently quite popular — are reacting to his dramatic reversal of fortune.

Many readers, I’m sure, already know that I made another appearance on Bloomberg earlier this week where I made some rather controversial remarks about the Chinese economy.  I intend to post that link, but I wanted to offer some context in the way of some facts, figures, and personal observations that informed my comments.  I’m hoping to have that up shortly.

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7 Comments leave one →
  1. gregorylent permalink
    April 12, 2012 9:53 pm

    where is all this heywood reporting suddenly coming from? he’s been dead six months! did the uk sit on the case in deference to china? and suddenly with a chinese cop leaking the story, feel it’s safe to show concern?

    if you are a uk citizen, don’t die in china, uk won’t care.

    bo xilai, six years in jail earlier in life, no reporting on those conditions, or the effect on him. clearly, a drinker, looking at his face, and maybe a gear or two loose inside.

    i think none of the western pundits have a clue who is manipulating this story from within china. clearly many things could have been kept quiet, there was no need to go on cctv and announce it to the nation. that is somebody’s strategy. who?

  2. April 13, 2012 1:13 am

    The story is in the open because Wang went to the embassy and allegedly brought proof of corruption. Would China risk embarrassment by suggesting a totally different story if it knew that the US held evidence to the contrary?

    I think It was actually quite clever of Wang to go to the US embassy. That was the only reason this story got blown up to such big proportions which forced China’s hand. He would not have been able to achieve this had he gone to Chinese authorities since they were all connected to Bo and would have just hushed it up with no one the wiser.

    There is so much speculation in the NYT and WSJ articles regarding the circumstances leading up to Heywood’s death and also very conspicuous absences of information\outrage from characters such as Heywood’s wife, family, and the British government. How did it not seem suspicious that the family was told he died of a heart attack while the government was told it was alcohol poisoning? They didn’t speak to each other?

  3. Joy permalink
    April 13, 2012 10:43 am

    Fantastic. Can’t wait to see the movie! When is it coming out??

    BTW, Did anyone notice how Chris Devonshire of Dezan Shira fame recently announced his leaving of China after 25 years and moving to Singapore? From the business prespective one can understand why (Singapore is at a fantastic location for a general Asia view) but one cannot wonder about the timing, considering this announcement was made not too long after he posted about Bo Xilai…

  4. FrParlentAuxFr permalink
    April 14, 2012 10:40 am

    Bah,who would get shocked?, imagine you have a former CEO of GS who was Governor of New Jersey. No he gets to be CEO of primary dealer MF Global. He does a bad bet that FINRA exposes by forcing to mark a position on PIIGS disguised as repo. Now imagine that JP Morgan has a margin call from a regional Fed who refuses to extend a margin call. Now MF global violates the most important rules in the entire financial in the financial and diects money to JP Morgan at the expense of clients. It is ok because his former colleague from GS runs the CFTC, Gensler who was instrumental in breaking Glass Steagall. Is this man indicted? No because this is land of the free (connected crook). Does the party not in power (republicains) make political noise about it? No. Was JP Mogan stock suspended in relation to investigation in irregular payment from MF Global? No. The grass is always greener elsewhere…

  5. FrParlentAuxFr permalink
    April 14, 2012 10:41 am

    typo: regional Fed refuses to send TARP for JP Morgan margin call

    • Guoguo permalink
      April 16, 2012 4:25 am

      Ah, that makes it crystal clear. You are a genius!

  6. princess1960 permalink
    April 16, 2012 6:01 pm

    ok i am agree with you ..from the day i hert about wife BO’s case in my mind first think was wow finely CHINE is allready in capitalist road ..i listening both of anlaystes pr chovanec and kuhn …my opinion is allways in politcal -economical game who” is” moste be very strong diplomat and claver ..diffrent ….is dangres. for intreses noone cares ‘cut hand”. this is wrrong of course but this is the political world allways was.. thank you end even i am hurt.

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