Thursday, April 26, 2012 11:32:06 PM
China Slows Down, and Grows Up
By RUCHIR SHARMA
Published: April 25, 2012
MORE than half of Americans think China is already the world’s leading economy — an astonishing misperception, given that China’s gross domestic product is still less than half of America’s. As George Orwell once observed, “Whoever is winning at the moment will always seem to be invincible.” China has grown at a breakneck pace for so long that its aura of invincibility has grown to outsize proportions in the Western imagination.
Now, however, there are signs that China’s growth is slowing to a rate that is ideal for the interests of the United States: fast enough to remain an important pillar of global economic growth, but not fast enough for China to remain a disruptive threat to American power.
The news of a slowdown in China, which just posted [ http://www.nytimes.com/2012/04/13/business/global/slow-first-quarter-in-china-but-recent-signs-of-growth.html ] its worst quarter since 2009, has reignited the debate over its future. The consensus remains bullish, and is captured in the latest forecast by the International Monetary Fund, which expects China’s G.D.P. to continue growing at an annual rate of around 8 percent for five more years. A bearish minority, however, reads the warning signs — labor unrest, a housing bubble, an unprecedented investment binge — as a sign of impending collapse. Neither side has got it right. In fact, China has reached a stage at which all “miracle economies” have slowed significantly, but not disastrously.
It is well known that developing nations hit a “middle-income trap,” and stop catching up to rich nations, when per-capita income reaches about $5,000 to $15,000 (in current dollars). The examples (Brazil, Mexico, Malaysia) are numerous. What is less known is that even those rare economies that broke through the middle-class trap started to decelerate — still catching up, but more slowly — after reaching a per capita income of around $5,000 (in current dollars). Japan in the 1970s, Taiwan in the 1980s and South Korea in the 1990s all slowed from a growth rate of about 9 percent to around 5 percent, simply because the bigger the economy, the harder it becomes to grow fast.
China passed the $5,000 per capita income level last year, and is now showing the same signs of deceleration that Japan, Taiwan and South Korea exhibited at that level: rising labor demands for higher wages and a decreasing demand for new investments. China’s growth model is similar to Japan’s in the 1970s, and the most likely scenario is that China will follow the path of Japan in that decade, when its growth rate slowed to 5 percent. China will continue to catch up to the United States, but its growth will slow to a pace of around 6 to 7 percent over the next 5 to 10 years. At that point, China’s economy will be even larger, and may decelerate again.
This process is under way, and it signals a basic power shift in the global economy. China became the biggest contributor to global G.D.P. growth in 2007, and it has held the lead ever since. But if the United States continues to grow at its current pace of about 2.5 percent, and China slows to 6.5 percent, then the United States will regain the lead this year — contributing 23 percent of global growth in 2012, compared to 18 percent for China — and it will hold that lead at least through 2015, according to Morgan Stanley research.
Investors who have bet big on near-double-digit growth in China will be troubled by this slowdown and will start looking for a safer destination. With Europe and Japan both growing at less than 2 percent, the focus of global attention will shift to the improving competitive position of the United States, and capital flows will follow.
China’s slowdown is setting the stage for a drop in the price of oil, which has had a crippling effect on growth in the United States. In recent years China has accounted for nearly half of global growth in oil demand, and every 1 percent of G.D.P. growth in China added 10 to 30 percent to the price of oil.
China’s slowdown is also opening the door to a revival in American manufacturing. China is suffering many symptoms typical of a maturing miracle economy, from a strengthening currency to rising wages, land prices and transport costs, while the United States has a weak currency, stagnant wages and a moribund property market. The dollar is near record lows (in inflation-adjusted terms) against many of its trading partners, including China. The long-term decline in the United States’ share of global manufacturing exports bottomed out in 2008 at 8 percent, but has since been inching higher. The Boston Consulting Group predicts that by 2015, China will have lost most of its cost advantages, accelerating the “reshoring” that is already bringing some factory jobs back home from China.
These shifts will reshape the global balance of economic power, mostly for the better. A collapse in China to zero percent growth would be disastrous for the world economy, but it is unlikely, in large part because Chinese leaders understand that the current slowdown is inevitable. They are lowering growth targets and trying to manage rather than fight the deceleration (which would only make it worse).
At the near double-digit growth rate of the last 15 years, China was the equivalent of a company with disruptive technology — destroying competitors, lifting suppliers, sucking in capital, stealing jobs and moving so fast that rivals couldn’t keep up. A smooth downshift to 6 or 7 percent makes China a more normal rival, one the world can do business with and compete head to head against — one that should generate a lot less worry.
Ruchir Sharma [ http://books.wwnorton.com/books/Author.aspx?id=23836 ], the head of emerging market equities at Morgan Stanley Investment Management, is the author of “Breakout Nations: In Pursuit of the Next Economic Miracles [ http://www.amazon.com/Breakout-Nations-Pursuit-Economic-Miracles/dp/0393080269 ].”
© 2012 The New York Times Company
http://www.nytimes.com/2012/04/26/opinion/china-slows-down-and-grows-up.html
===
Ousted Chinese Leader Is Said to Have Spied on Other Top Officials
Bo Xilai, center, Chonquing’s former party chief, fell from power amid allegations his wife arranged a British consultant’s killing, but other charges have emerged.
Reuters
Hu Jintao, China's president, was among those Bo Xilai is thought to have spied on, a hint of the distrust among officials.
Feng Li/Getty Images
By JONATHAN ANSFIELD and IAN JOHNSON
Published: April 25, 2012
BEIJING — When Hu Jintao [ http://topics.nytimes.com/top/reference/timestopics/people/h/hu_jintao/index.html ], China [ http://topics.nytimes.com/top/news/international/countriesandterritories/china/index.html ]’s top leader, picked up the telephone last August to talk to a senior anticorruption official visiting Chongqing, special devices detected that he was being wiretapped — by local officials in that southwestern metropolis.
The discovery of that and other wiretapping led to an official investigation that helped topple Chongqing’s charismatic leader [ http://www.nytimes.com/2012/03/16/world/asia/bo-xilai-ousted-from-communist-party-post-in-china.html?_r=1&pagewanted=all ], Bo Xilai [ http://topics.nytimes.com/top/reference/timestopics/people/b/bo_xilai/index.html ], in a political cataclysm that has yet to reach a conclusion.
Until now, the downfall of Mr. Bo has been cast largely as a tale of a populist who pursued his own agenda too aggressively for some top leaders in Beijing and was brought down by accusations [ http://www.nytimes.com/2012/04/11/world/asia/detained-party-official-facing-ouster-from-politburo.html?pagewanted=all ] that his wife had arranged the murder of Neil Heywood, a British consultant, after a business dispute. But the hidden wiretapping, previously alluded to only in internal Communist Party accounts of the scandal, appears to have provided another compelling reason for party leaders to turn on Mr. Bo.
The story of how China’s president was monitored also shows the level of mistrust among leaders in the one-party state. To maintain control over society, leaders have embraced enhanced surveillance technology. But some have turned it on one another — repeating patterns of intrigue that go back to the beginnings of Communist rule.
“This society has bred mistrust and violence,” said Roderick MacFarquhar, a historian of Communist China’s elite-level machinations over the past half century. “Leaders know you have to watch your back because you never know who will put a knife in it.”
Nearly a dozen people with party ties, speaking anonymously for fear of retribution, confirmed the wiretapping, as well as a widespread program of bugging across Chongqing. But the party’s public version of Mr. Bo’s fall omits it.
The official narrative and much foreign attention has focused on the more easily grasped death of Mr. Heywood in November. When Mr. Bo’s police chief, Wang Lijun, was stripped of his job and feared being implicated in Bo family affairs, he fled to the United States Consulate in Chengdu, where he spoke mostly about Mr. Heywood’s death.
The murder account is pivotal to the scandal, providing Mr. Bo’s opponents with an unassailable reason to have him removed. But party insiders say the wiretapping was seen as a direct challenge to central authorities. It revealed to them just how far Mr. Bo, who is now being investigated for serious disciplinary violations, was prepared to go in his efforts to grasp greater power in China. That compounded suspicions that Mr. Bo could not be trusted with a top slot in the party, which is due to reshuffle its senior leadership positions this fall.
“Everyone across China is improving their systems for the purposes of maintaining stability,” said one official with a central government media outlet, referring to surveillance tactics. “But not everyone dares to monitor party central leaders.”
According to senior party members, including editors, academics and people with ties to the military, Mr. Bo’s eavesdropping operations began several years ago as part of a state-financed surveillance buildup, ostensibly for the purposes of fighting crime and maintaining local political stability.
The architect was Mr. Wang, a nationally decorated crime fighter who had worked under Mr. Bo in the northeast province of Liaoning. Together they installed “a comprehensive package bugging system covering telecommunications to the Internet,” according to the government media official.
One of several noted cybersecurity experts they enlisted was Fang Binxing, president of Beijing University of Posts and Telecommunications, who is often called the father of China’s “Great Firewall,” the nation’s vast Internet censorship system. Most recently, Mr. Fang advised the city on a new police information center using cloud-based computing, according to state news media reports [ http://cqhtg.com/xmzs.php?tid=14 ]. Late last year, Mr. Wang was named a visiting professor at Mr. Fang’s university.
Together, Mr. Bo and Mr. Wang unleashed a drive to smash what they said were crime rings that controlled large portions of Chongqing’s economic life. In interviews, targets of the crackdown marveled at the scale and determination with which local police intercepted their communications.
“On the phone, we dared not mention Bo Xilai or Wang Lijun,” said Li Jun, a fugitive property developer who now lives in hiding abroad. Instead, he and fellow businessmen took to scribbling notes, removing their cellphone batteries and stocking up on unregistered SIM cards to thwart surveillance as the crackdown mounted, he said.
Li Zhuang, a lawyer from a powerfully connected Beijing law firm, recalled how some cousins of one client had presented him with a full stack of unregistered mobile phone SIM cards, warning him of local wiretapping. Despite these precautions, the Chongqing police ended up arresting Mr. Li on the outskirts of Beijing, about 900 miles away, after he called his client’s wife and arranged to visit her later that day at a hospital.
“They already were there lying in ambush,” Mr. Li said. He added that Wang Lijun, by reputation, was a “tapping freak.”
Political figures were targeted in addition to those suspected of being mobsters.
One political analyst with senior-level ties, citing information obtained from a colonel he recently dined with, said Mr. Bo had tried to tap the phones of virtually all high-ranking leaders who visited Chongqing in recent years, including Zhou Yongkang, the law-and-order czar who was said to have backed Mr. Bo as his potential successor.
“Bo wanted to be extremely clear about what leaders’ attitudes toward him were,” the analyst said.
In one other instance last year, two journalists said, operatives were caught intercepting a conversation between the office of Mr. Hu and Liu Guanglei, a top party law-and-order official whom Mr. Wang had replaced as police chief. Mr. Liu once served under Mr. Hu in the 1980s in Guizhou Province.
Perhaps more worrisome to Mr. Bo and Mr. Wang, however, was the increased scrutiny from the party’s Central Commission for Discipline Inspection, which by the beginning of 2012 had stationed up to four separate teams in Chongqing, two undercover, according to the political analyst, who cited Discipline Inspection sources. One line of inquiry, according to several party academics, involved Mr. Wang’s possible role in a police bribery case that unfolded last year in a Liaoning city where he once was police chief.
Beyond making a routine inspection, it is not clear why the disciplinary official who telephoned Mr. Hu — Ma Wen, the minister of supervision — was in Chongqing. Her high-security land link to Mr. Hu from the state guesthouse in Chongqing was monitored on Mr. Bo’s orders. The topic of the call is unknown but was probably not vital. Most phones are so unsafe that important information is often conveyed only in person or in writing.
But Beijing was galled that Mr. Bo would wiretap Mr. Hu, whether intentionally or not, and turned central security and disciplinary investigators loose on his police chief, who bore the brunt of the scrutiny over the next couple of months.
“Bo wanted to push the responsibility onto Wang,” one senior party editor said. “Wang couldn’t dare say it was Bo’s doing.”
Yet at some point well before fleeing Chongqing, Mr. Wang filed a pair of complaints to the inspection commission, the first anonymously and the second under his own name, according to a party academic with ties to Mr. Bo.
Both complaints said Mr. Bo had “opposed party central” authorities, including ordering the wiretapping of central leaders. The requests to investigate Mr. Bo were turned down at the time. Mr. Bo, who learned of the charges at a later point, told the academic shortly before his dismissal that he thought he could withstand Mr. Wang’s charges.
Mr. Wang is not believed to have discussed wiretapping at the United States Consulate. Instead, he focused on the less self-incriminating allegations of Mr. Bo’s wife’s arranging the killing of Mr. Heywood.
But tensions between the two men crested, sources said, when Mr. Bo found that Mr. Wang had also wiretapped him and his wife. After Mr. Wang was arrested in February, Mr. Bo detained Mr. Wang’s wiretapping specialist from Liaoning, a district police chief named Wang Pengfei.
Internal party accounts suggest that the party views the wiretapping as one of Mr. Bo’s most serious crimes. One preliminary indictment in mid-March accused Bo of damaging party unity by collecting evidence on other leaders.
Party officials, however, say it would be far too damaging to make the wiretapping public. When Mr. Bo is finally charged, wiretapping is not expected to be mentioned. “The things that can be publicized are the economic problems and the killing,” according to the senior official at the government media outlet. “That’s enough to decide the matter in public.”
Edward Wong contributed reporting.
*
Related
Disgraced Chinese Official’s Son Tries to Defuse Sports Car Scandal (April 26, 2012)
http://www.nytimes.com/2012/04/26/world/asia/bo-guagua-tries-to-defuse-sports-car-scandal.html
Brother of Fallen Chinese Politician Resigns Lucrative Business Role (April 26, 2012)
http://www.nytimes.com/2012/04/26/world/asia/brother-of-bo-xilai-fallen-chinese-politician-resigns-lucrative-business-role-at-everbright-international.html
*
© 2012 The New York Times Company
http://www.nytimes.com/2012/04/26/world/asia/bo-xilai-said-to-have-spied-on-top-china-officials.html [ http://www.nytimes.com/2012/04/26/world/asia/bo-xilai-said-to-have-spied-on-top-china-officials.html?pagewanted=all ] [with comments]
By RUCHIR SHARMA
Published: April 25, 2012
MORE than half of Americans think China is already the world’s leading economy — an astonishing misperception, given that China’s gross domestic product is still less than half of America’s. As George Orwell once observed, “Whoever is winning at the moment will always seem to be invincible.” China has grown at a breakneck pace for so long that its aura of invincibility has grown to outsize proportions in the Western imagination.
Now, however, there are signs that China’s growth is slowing to a rate that is ideal for the interests of the United States: fast enough to remain an important pillar of global economic growth, but not fast enough for China to remain a disruptive threat to American power.
The news of a slowdown in China, which just posted [ http://www.nytimes.com/2012/04/13/business/global/slow-first-quarter-in-china-but-recent-signs-of-growth.html ] its worst quarter since 2009, has reignited the debate over its future. The consensus remains bullish, and is captured in the latest forecast by the International Monetary Fund, which expects China’s G.D.P. to continue growing at an annual rate of around 8 percent for five more years. A bearish minority, however, reads the warning signs — labor unrest, a housing bubble, an unprecedented investment binge — as a sign of impending collapse. Neither side has got it right. In fact, China has reached a stage at which all “miracle economies” have slowed significantly, but not disastrously.
It is well known that developing nations hit a “middle-income trap,” and stop catching up to rich nations, when per-capita income reaches about $5,000 to $15,000 (in current dollars). The examples (Brazil, Mexico, Malaysia) are numerous. What is less known is that even those rare economies that broke through the middle-class trap started to decelerate — still catching up, but more slowly — after reaching a per capita income of around $5,000 (in current dollars). Japan in the 1970s, Taiwan in the 1980s and South Korea in the 1990s all slowed from a growth rate of about 9 percent to around 5 percent, simply because the bigger the economy, the harder it becomes to grow fast.
China passed the $5,000 per capita income level last year, and is now showing the same signs of deceleration that Japan, Taiwan and South Korea exhibited at that level: rising labor demands for higher wages and a decreasing demand for new investments. China’s growth model is similar to Japan’s in the 1970s, and the most likely scenario is that China will follow the path of Japan in that decade, when its growth rate slowed to 5 percent. China will continue to catch up to the United States, but its growth will slow to a pace of around 6 to 7 percent over the next 5 to 10 years. At that point, China’s economy will be even larger, and may decelerate again.
This process is under way, and it signals a basic power shift in the global economy. China became the biggest contributor to global G.D.P. growth in 2007, and it has held the lead ever since. But if the United States continues to grow at its current pace of about 2.5 percent, and China slows to 6.5 percent, then the United States will regain the lead this year — contributing 23 percent of global growth in 2012, compared to 18 percent for China — and it will hold that lead at least through 2015, according to Morgan Stanley research.
Investors who have bet big on near-double-digit growth in China will be troubled by this slowdown and will start looking for a safer destination. With Europe and Japan both growing at less than 2 percent, the focus of global attention will shift to the improving competitive position of the United States, and capital flows will follow.
China’s slowdown is setting the stage for a drop in the price of oil, which has had a crippling effect on growth in the United States. In recent years China has accounted for nearly half of global growth in oil demand, and every 1 percent of G.D.P. growth in China added 10 to 30 percent to the price of oil.
China’s slowdown is also opening the door to a revival in American manufacturing. China is suffering many symptoms typical of a maturing miracle economy, from a strengthening currency to rising wages, land prices and transport costs, while the United States has a weak currency, stagnant wages and a moribund property market. The dollar is near record lows (in inflation-adjusted terms) against many of its trading partners, including China. The long-term decline in the United States’ share of global manufacturing exports bottomed out in 2008 at 8 percent, but has since been inching higher. The Boston Consulting Group predicts that by 2015, China will have lost most of its cost advantages, accelerating the “reshoring” that is already bringing some factory jobs back home from China.
These shifts will reshape the global balance of economic power, mostly for the better. A collapse in China to zero percent growth would be disastrous for the world economy, but it is unlikely, in large part because Chinese leaders understand that the current slowdown is inevitable. They are lowering growth targets and trying to manage rather than fight the deceleration (which would only make it worse).
At the near double-digit growth rate of the last 15 years, China was the equivalent of a company with disruptive technology — destroying competitors, lifting suppliers, sucking in capital, stealing jobs and moving so fast that rivals couldn’t keep up. A smooth downshift to 6 or 7 percent makes China a more normal rival, one the world can do business with and compete head to head against — one that should generate a lot less worry.
Ruchir Sharma [ http://books.wwnorton.com/books/Author.aspx?id=23836 ], the head of emerging market equities at Morgan Stanley Investment Management, is the author of “Breakout Nations: In Pursuit of the Next Economic Miracles [ http://www.amazon.com/Breakout-Nations-Pursuit-Economic-Miracles/dp/0393080269 ].”
© 2012 The New York Times Company
http://www.nytimes.com/2012/04/26/opinion/china-slows-down-and-grows-up.html
===
Ousted Chinese Leader Is Said to Have Spied on Other Top Officials
Bo Xilai, center, Chonquing’s former party chief, fell from power amid allegations his wife arranged a British consultant’s killing, but other charges have emerged.
Reuters
Hu Jintao, China's president, was among those Bo Xilai is thought to have spied on, a hint of the distrust among officials.
Feng Li/Getty Images
By JONATHAN ANSFIELD and IAN JOHNSON
Published: April 25, 2012
BEIJING — When Hu Jintao [ http://topics.nytimes.com/top/reference/timestopics/people/h/hu_jintao/index.html ], China [ http://topics.nytimes.com/top/news/international/countriesandterritories/china/index.html ]’s top leader, picked up the telephone last August to talk to a senior anticorruption official visiting Chongqing, special devices detected that he was being wiretapped — by local officials in that southwestern metropolis.
The discovery of that and other wiretapping led to an official investigation that helped topple Chongqing’s charismatic leader [ http://www.nytimes.com/2012/03/16/world/asia/bo-xilai-ousted-from-communist-party-post-in-china.html?_r=1&pagewanted=all ], Bo Xilai [ http://topics.nytimes.com/top/reference/timestopics/people/b/bo_xilai/index.html ], in a political cataclysm that has yet to reach a conclusion.
Until now, the downfall of Mr. Bo has been cast largely as a tale of a populist who pursued his own agenda too aggressively for some top leaders in Beijing and was brought down by accusations [ http://www.nytimes.com/2012/04/11/world/asia/detained-party-official-facing-ouster-from-politburo.html?pagewanted=all ] that his wife had arranged the murder of Neil Heywood, a British consultant, after a business dispute. But the hidden wiretapping, previously alluded to only in internal Communist Party accounts of the scandal, appears to have provided another compelling reason for party leaders to turn on Mr. Bo.
The story of how China’s president was monitored also shows the level of mistrust among leaders in the one-party state. To maintain control over society, leaders have embraced enhanced surveillance technology. But some have turned it on one another — repeating patterns of intrigue that go back to the beginnings of Communist rule.
“This society has bred mistrust and violence,” said Roderick MacFarquhar, a historian of Communist China’s elite-level machinations over the past half century. “Leaders know you have to watch your back because you never know who will put a knife in it.”
Nearly a dozen people with party ties, speaking anonymously for fear of retribution, confirmed the wiretapping, as well as a widespread program of bugging across Chongqing. But the party’s public version of Mr. Bo’s fall omits it.
The official narrative and much foreign attention has focused on the more easily grasped death of Mr. Heywood in November. When Mr. Bo’s police chief, Wang Lijun, was stripped of his job and feared being implicated in Bo family affairs, he fled to the United States Consulate in Chengdu, where he spoke mostly about Mr. Heywood’s death.
The murder account is pivotal to the scandal, providing Mr. Bo’s opponents with an unassailable reason to have him removed. But party insiders say the wiretapping was seen as a direct challenge to central authorities. It revealed to them just how far Mr. Bo, who is now being investigated for serious disciplinary violations, was prepared to go in his efforts to grasp greater power in China. That compounded suspicions that Mr. Bo could not be trusted with a top slot in the party, which is due to reshuffle its senior leadership positions this fall.
“Everyone across China is improving their systems for the purposes of maintaining stability,” said one official with a central government media outlet, referring to surveillance tactics. “But not everyone dares to monitor party central leaders.”
According to senior party members, including editors, academics and people with ties to the military, Mr. Bo’s eavesdropping operations began several years ago as part of a state-financed surveillance buildup, ostensibly for the purposes of fighting crime and maintaining local political stability.
The architect was Mr. Wang, a nationally decorated crime fighter who had worked under Mr. Bo in the northeast province of Liaoning. Together they installed “a comprehensive package bugging system covering telecommunications to the Internet,” according to the government media official.
One of several noted cybersecurity experts they enlisted was Fang Binxing, president of Beijing University of Posts and Telecommunications, who is often called the father of China’s “Great Firewall,” the nation’s vast Internet censorship system. Most recently, Mr. Fang advised the city on a new police information center using cloud-based computing, according to state news media reports [ http://cqhtg.com/xmzs.php?tid=14 ]. Late last year, Mr. Wang was named a visiting professor at Mr. Fang’s university.
Together, Mr. Bo and Mr. Wang unleashed a drive to smash what they said were crime rings that controlled large portions of Chongqing’s economic life. In interviews, targets of the crackdown marveled at the scale and determination with which local police intercepted their communications.
“On the phone, we dared not mention Bo Xilai or Wang Lijun,” said Li Jun, a fugitive property developer who now lives in hiding abroad. Instead, he and fellow businessmen took to scribbling notes, removing their cellphone batteries and stocking up on unregistered SIM cards to thwart surveillance as the crackdown mounted, he said.
Li Zhuang, a lawyer from a powerfully connected Beijing law firm, recalled how some cousins of one client had presented him with a full stack of unregistered mobile phone SIM cards, warning him of local wiretapping. Despite these precautions, the Chongqing police ended up arresting Mr. Li on the outskirts of Beijing, about 900 miles away, after he called his client’s wife and arranged to visit her later that day at a hospital.
“They already were there lying in ambush,” Mr. Li said. He added that Wang Lijun, by reputation, was a “tapping freak.”
Political figures were targeted in addition to those suspected of being mobsters.
One political analyst with senior-level ties, citing information obtained from a colonel he recently dined with, said Mr. Bo had tried to tap the phones of virtually all high-ranking leaders who visited Chongqing in recent years, including Zhou Yongkang, the law-and-order czar who was said to have backed Mr. Bo as his potential successor.
“Bo wanted to be extremely clear about what leaders’ attitudes toward him were,” the analyst said.
In one other instance last year, two journalists said, operatives were caught intercepting a conversation between the office of Mr. Hu and Liu Guanglei, a top party law-and-order official whom Mr. Wang had replaced as police chief. Mr. Liu once served under Mr. Hu in the 1980s in Guizhou Province.
Perhaps more worrisome to Mr. Bo and Mr. Wang, however, was the increased scrutiny from the party’s Central Commission for Discipline Inspection, which by the beginning of 2012 had stationed up to four separate teams in Chongqing, two undercover, according to the political analyst, who cited Discipline Inspection sources. One line of inquiry, according to several party academics, involved Mr. Wang’s possible role in a police bribery case that unfolded last year in a Liaoning city where he once was police chief.
Beyond making a routine inspection, it is not clear why the disciplinary official who telephoned Mr. Hu — Ma Wen, the minister of supervision — was in Chongqing. Her high-security land link to Mr. Hu from the state guesthouse in Chongqing was monitored on Mr. Bo’s orders. The topic of the call is unknown but was probably not vital. Most phones are so unsafe that important information is often conveyed only in person or in writing.
But Beijing was galled that Mr. Bo would wiretap Mr. Hu, whether intentionally or not, and turned central security and disciplinary investigators loose on his police chief, who bore the brunt of the scrutiny over the next couple of months.
“Bo wanted to push the responsibility onto Wang,” one senior party editor said. “Wang couldn’t dare say it was Bo’s doing.”
Yet at some point well before fleeing Chongqing, Mr. Wang filed a pair of complaints to the inspection commission, the first anonymously and the second under his own name, according to a party academic with ties to Mr. Bo.
Both complaints said Mr. Bo had “opposed party central” authorities, including ordering the wiretapping of central leaders. The requests to investigate Mr. Bo were turned down at the time. Mr. Bo, who learned of the charges at a later point, told the academic shortly before his dismissal that he thought he could withstand Mr. Wang’s charges.
Mr. Wang is not believed to have discussed wiretapping at the United States Consulate. Instead, he focused on the less self-incriminating allegations of Mr. Bo’s wife’s arranging the killing of Mr. Heywood.
But tensions between the two men crested, sources said, when Mr. Bo found that Mr. Wang had also wiretapped him and his wife. After Mr. Wang was arrested in February, Mr. Bo detained Mr. Wang’s wiretapping specialist from Liaoning, a district police chief named Wang Pengfei.
Internal party accounts suggest that the party views the wiretapping as one of Mr. Bo’s most serious crimes. One preliminary indictment in mid-March accused Bo of damaging party unity by collecting evidence on other leaders.
Party officials, however, say it would be far too damaging to make the wiretapping public. When Mr. Bo is finally charged, wiretapping is not expected to be mentioned. “The things that can be publicized are the economic problems and the killing,” according to the senior official at the government media outlet. “That’s enough to decide the matter in public.”
Edward Wong contributed reporting.
*
Related
Disgraced Chinese Official’s Son Tries to Defuse Sports Car Scandal (April 26, 2012)
http://www.nytimes.com/2012/04/26/world/asia/bo-guagua-tries-to-defuse-sports-car-scandal.html
Brother of Fallen Chinese Politician Resigns Lucrative Business Role (April 26, 2012)
http://www.nytimes.com/2012/04/26/world/asia/brother-of-bo-xilai-fallen-chinese-politician-resigns-lucrative-business-role-at-everbright-international.html
*
© 2012 The New York Times Company
http://www.nytimes.com/2012/04/26/world/asia/bo-xilai-said-to-have-spied-on-top-china-officials.html [ http://www.nytimes.com/2012/04/26/world/asia/bo-xilai-said-to-have-spied-on-top-china-officials.html?pagewanted=all ] [with comments]
Greensburg, KS - 5/4/07
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upon the Right of Election, 1790
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