After living the good life through the idyllic years of rapid development that transformed the Chinese tropical island of Hainan into a luxurious resort destination, Zhang Qi, the local Communist party boss, knew precisely what to do when the music stopped.
In late 2019, a business associate tipped off Zhang to an imminent investigation by the Central Commission for Discipline Inspection, the Chinese Communist party’s deeply feared corruption watchdog. The next day, his adult son was hurried aboard a flight to Canada — and, Zhang hoped, to safety.
Over the following months, the anti-corruption officials questioned Zhang over his family’s millions of dollars in ill-gotten gains from years of property dealings. During the interrogation he flipped. Zhang abandoned his earlier moves to protect his son, instead sending a flurry of messages, begging him to come home and face the officials.
The tale of a father turning against his own son — detailed in a recent state television documentary — highlights the enduring ferocity of Xi Jinping’s corruption crackdown.
Xi came to power in 2012. From the outset, his targeting of “tigers and flies”, or high- and low-ranking government officials, had a clear dual purpose: eliminate corruption and eviscerate political rivals.
A decade later, there is no end in sight. The Chinese political system is about to enter a crucial few months where Xi is widely expected to extend his period in office into an unprecedented third term — a process that starts with the annual National People’s Congress which begins next week and concludes with a party congress in the autumn. With Xi expected to continue unchallenged as head of the party and president for the foreseeable future, but with little clarity about his long-term plans, there are indications that the anti-corruption crusade will not just continue but could even intensify.
The initial years of the campaign mostly targeted members of the now-95mn-strong party. Since then, Xi has laid the ground to extend the campaign. Private sector entrepreneurs who have profited the most from China’s economic growth appear increasingly at risk.
Xi and his allies insist that he has set out to dismantle the rampant corruption of what some have called China’s “Gilded Age” — in particular, the past three decades of economic boom, where lucrative property deals have generated fantastic private wealth, including for some officials.
His campaign is already unparalleled in its scale and longevity, ensnaring about 2mn officials over 10 years. At least 10,000 such “involuntary” returns from 120 countries have been successfully notched as part of Operation Fox Hunt, which started in 2014, and Sky Net, a year later.
Yuen Yuen Ang, author of China’s Gilded Age and an expert on Chinese politics, points out that before Xi, five major anti-corruption campaigns had been launched, going back to the early 1980s.
Yet Xi’s battle on graft has become the “longest, widest-ranging and most penetrative anti-corruption campaign in the post Mao-era”. “Unlike his predecessors [in the Jiang Zemin and Hu Jintao eras] who held on to stable, power-sharing arrangements, Xi is a political disrupter . . . Given his ambition in reshaping the Chinese political economy, Xi’s campaigns should be seen as part of his long-term vision to attain ‘socialist modernisation’ by 2035. That is why they go on and on.”
Xi’s campaigns, according to western government officials, have deployed a playbook of extralegal coercion and covert overseas missions, including kidnappings, to compel fugitive Chinese political and business elites — and their families — to return from foreign soil.
The scope of Beijing’s attempts to repatriate its nationals is posing a growing problem for western governments — especially since the suspects, if sent back, would enter into a secretive criminal justice system notorious for arbitrary detention, torture, forced confessions and a near 100 per cent conviction rate.
Christopher Wray, director of the Federal Bureau of Investigation, sounded an alarm in a speech in late January. Fox Hunt, he said, was launched to stamp out corruption, but in reality China “targets, captures, and repatriates former Chinese citizens living overseas whom it sees as a political or financial threat”.
“The Chinese government is increasingly targeting people inside the US for personal and political retribution — undercutting the freedoms that our constitution and laws promise,” Wray said. “Currently, there are hundreds of people on US soil who are on the Chinese government’s official [target] list and a whole lot more that are not on the official list.”
Escaping the CCP’s clutches
As part of his drive against graft, Xi has reshaped the bureaucracy. Four years ago, just as Xi orchestrated a historic removal of the party leadership’s two-term limit precedent established by Deng Xiaoping, a new state organ, the National Supervision Commission, was launched.
According to a report by Safeguard Defenders, a European human rights group, the NSC is in effect an expanded version of the CCDI and gives the inspectorate cover to deal with non-party members. And its creation marked “one of the single greatest strikes to the rule of law in China”.
“The NSC also has investigatory powers over the police, prosecutor’s offices and courts. In particular, it is the NSC that is leading the growing reach of China’s policing overseas. And despite not being a judicial organ, it is often the department that leads China’s international judicial co-operation” the group added.
The threat this new security apparatus poses to members of the Chinese diaspora — and the tough decisions facing foreign governments trying to protect them — is illustrated in the experience of Grace Meng, the wife of the former Interpol chief Meng Hongwei, who was seized and jailed by the Chinese authorities in 2018.
Meng, a businesswoman and former member of the jet-setting elite whose Chinese name is Gao Ge, and her husband, a vice-minister of public security until he was jailed, are among the highest profile of the many Chinese politicians, activists and business leaders to have been targeted at home and overseas by Xi and the CCP in recent years.
In interviews with the FT in Paris and Lyon she described how days after her husband was detained in 2018, Chinese agents made at least two attempts to kidnap her from Lyon — the French city where Interpol is based and where the couple lived — and take her back to China.
Shortly after her husband’s disappearance in Beijing, she fled to a hotel after her home alarm was triggered and her car appeared to have been broken into. Two Chinese men tried to find her at the hotel before she moved to a new location. At the same time, a Chinese acquaintance tried to persuade her to join him on a private jet from Lyon for a business trip to eastern Europe but she smelled a trap and declined to go.
On yet another occasion, the Chinese consul in Lyon invited her to come and collect a letter from her husband, but she responded that she would only meet in a public place in the presence of journalists and with the knowledge of the French authorities. The meeting never took place and she says she never saw any letter from her husband.
For months afterwards, China pressed France to extradite Grace Meng. “The Chinese repeatedly contacted us to demand that we send her to China, saying she was corrupt,” says one senior French official who asked to remain anonymous.
The official added the corruption charges were obviously a pretext and the case showed “the violence of the divisions in the CCP”. China’s embassy in Paris did not respond to requests for comment.
Meng’s case is a high-profile example of an under-reported exodus. The number of Chinese citizens seeking asylum globally has surged from about 15,000 in 2012 to more than 100,000 in recent years, while Chinese with refugee status topped 175,000 in 2020, UN data shows.
Beijing’s imposition of a national security law on Hong Kong, allowing suspects to be tried across the border in China, is deepening the trend: under a special passport scheme tens of thousands of Hong Kongers fled to the UK last year. There are estimates the number will reach 300,000 over five years.
The Chinese authorities claim that tens of thousands of corruption suspects remain at large overseas and is adamant that it has the right to repatriate them. In 2020 alone, more than 1,400 fugitives were brought back to China, along with in excess of $450mn in ill-gotten gains, according to the CCDI.
According to a study by Jiangnan Zhu, a China expert at the University of Hong Kong, the most popular destinations for China’s most-wanted fugitives are the US, Canada, New Zealand and Australia. Their escapes are normally well-planned, with large amounts of capital concealed, transferred or laundered over many years.
Questions over what protections such people have outside China “really test” governments’ commitment to the principles of human rights, says Margaret Lewis, a China law expert and professor at Seton Hall University in New Jersey.
“Countries that have the more robust protections for the accused will be the places that are more appealing for people to flee with their families and their assets if they can, because they are more likely to get protection than countries that will just say, ‘We’re putting people on a plane right back to China,’” she says.
“How do you have robust protections for deep-seated principles about the rights of the accused, while also not becoming a haven for corrupt officials? That’s a complicated task.”
Xi the ‘disrupter’
Xi’s re-energised overseas dragnet dovetails with a stunning clampdown at home on some of China’s biggest businesses and their leaders. What started in the autumn of 2020 as an attack on Jack Ma, the founder of Alibaba, and the risky lending practices of his Ant Group, has turned into a storm of regulatory and policy curbs extending beyond business and into culture — under a banner policy of “common prosperity”.
“Over the years the problem of disorderly expansion of capital has become more pressing,” Xi cautioned at a December study session of the politburo, composed of the party’s 25 top officials, another signal that the storm rages on.
After watching more than $1tn wiped from the value of China’s tech stocks, investors are still trying to guess which companies — and which tycoons — could be next hit. Some debate whether China is even investable, given the uncertainties.
Despite the lack of a clearly articulated policy, experts believe that the intersections between finance and the state looms as a likely target. New investigations into dozens of high-level officials and executives from state-owned Chinese banks, oil and tobacco groups and insurers have been announced by the CCDI since the beginning of the fourth quarter last year.
Xi’s relationship with China’s business elite has long been fraught. The tension, experts say, was crystallised by the private sector’s response to the early years of the corruption crackdown. China’s stock of currency reserves, which reached $4tn in 2014, was a source of national pride and gave the government security against times of turmoil, like the global financial crisis. In the mid 2010s, the level of reserves fell by around one quarter.
Victor Shih, a professor of Chinese political economy at the University of California, San Diego, believes the wave of capital flight marked a critical turning point for the powerful leader.
“Xi Jinping really began to distrust the financial elite during that period. ‘Losing’ one trillion dollars in the space of one year was a big shock to the leadership. It instilled a long-term distrust of the financial sector,” Shih says.
A collection of the highest flyers among China’s corporate elite — those viewed as responsible for overseeing the explosion in outbound investment — felt Xi’s wrath. The reprisals served a clear warning over the future direction of the relationship between the authoritarian CCP leadership and the entrepreneurs and business leaders on whom the country relies for economic growth.
One of the most striking examples was the abduction of Xiao Jianhua: the secretive billionaire financier with links to Beijing’s top leaders was snatched from Hong Kong’s Four Seasons Hotel in January 2017 and taken to the mainland. Many of China’s business elites — including tech titans such as Jack Ma, have homes in Hong Kong. Xiao’s case — a Canadian citizen abducted extrajudicially by Chinese agents — was a cautionary tale: no one was safe.
‘They are all in danger’
Even Xi’s fiercest critics do not deny that the authorities needed to do more to limit corruption — a subject of consistent public outrage and a clear threat to the legitimacy of the party.
Yuen Yuen Ang suggests Xi inherited a Gilded Age akin to late-19th-century America: “a period characterised by both feverish growth and glaring inequality, conniving plutocrats and corrupt politicians”.
As to who could be next, however, she argues that politics often plays a bigger role than evidence of wrongdoing: “Patronage, not performance, predicts the likelihood of a downfall”.
The political motivations mixed with the secretive judicial process makes it very difficult for outsiders to conclude whether individual cases involve genuine corruption, state persecution — or both.
In January 2019 Meng Hongwei, the former Interpol chief, was jailed for 13 and a half years after confessing that he took the equivalent of more than $2mn in bribes when he was at the ministry of public security and in his previous role as head of the coast guard.
Two years later, Zhang Qi, the Hainan party boss, was sentenced to life in prison for taking more than $16mn in bribes via construction and land deals. Grace Meng remains beyond Xi’s reach and there have been no reports that Zhang Qi’s son has been returned. The safety and whereabouts of many others, including Xiao Jianhua, however, is not known.
Grace Meng, who remains under French police protection 24 hours a day, rejects the corruption charges levelled at her husband. She claims the real reason for his downfall is that he was one of a group of senior Chinese officials and party leaders who wanted to reform the country’s political system. In her telling, he wanted to nudge China towards applying the rule of law and was among those who are critical of Xi’s dictatorial tendencies.
“It’s an old style of operating,” she says of the CCP. “If you don’t like someone, you accuse them of corruption. We are very clean but they didn’t like people to be clean because they are difficult to control.” She adds: “Mr Meng and I have the same dream for China: freedom, human rights, the rule of law and democracy.”
Her assertions about her husband’s democratic leanings are treated with scepticism by China-watchers. He was, after all, a senior police figure in a highly repressive police state — but few would question her analysis of the way Xi and the party have cracked down on their perceived rivals in politics and business.
Grace Meng likens the crackdown on China’s big businesses to Mao Zedong’s overhaul of the private sector, including her own family’s industrial interests, in the 1950s.
“[Business leaders] are all in a dangerous situation now,” she said. “The Chinese authorities know who they are. They have a different idea of China’s future.”
Additional reporting by Sun Yu in Beijing