Day: October 15, 2021

Chinese billionaire Desmond Shum was born into a politically disadvantaged background during the Cultural Revolution (1966-1976), yet eventually rose to mingle with the highest-ranking leaders of the ruling Chinese Communist Party (CCP), going into business with his wife Whitney Duan at the helm of the hugely successful Genesis Beijing property development project. During their ascendancy, Duan and Shum rubbed shoulders with the likes of former premier Wen Jiabao, flew in private jets, and ran a multi-billion dollar property development empire that included high-end hotels and an international air cargo terminal. Until Duan was “disappeared” by the authorities on Sept. 5, 2017 while Shum was out of the country, possibly as part of an investigation into the affairs of disgraced former Chongqing party chief Sun Zhengcai. Her whereabouts remain unknown. Shum, who is now divorced from Duan, and who has never returned to China, recently published a memoir titled “Red Roulette.” He spoke to RFA’s Cantonese Service about his experience of the Chinese political and financial elite:

RFA: What did these experiences teach you?

Desmond Shum: Actually, I think that every aspect of business in mainland China depends on the powers that be. Everyone knows why. It’s because you had better not think of doing any kind of business without the support of someone in power. Even if you just want to open a store, you still have to get to know the local urban management officials in that neighborhood. Otherwise you might as well not bother.

It doesn’t matter who you are; you still need the backing of someone powerful. The days of stuffing envelopes are long gone; that’s crossing a line, and we’re not allowed to give very valuable gifts any more. But the people we were associating with have millions of options when it comes to making money, so you would never offer them money anyway. They would be able to get anything we could offer them via other channels anyway.

RFA: How did it feel to be in at the start of China’s economic boom?

Desmond Shum: Mainland China two decades ago still looked pretty backward, and was still in the process of opening up. We felt as if we were part of a positive trend. Some stuff made us feel uncomfortable, or wonder what we thought we were doing, but overall we felt like we were a part of something positive, and that made those things easier to accept.

To put it bluntly, you had to completely efface your own personality, and put their interests above everything else. You couldn’t have your own point of view; you had to look at everything from their point of view. After a while, I got used to it, but it was hard for someone who was raised in Hong Kong and went to college in the United States.

RFA: Was your ex-wife disappeared as part of the anti-corruption campaign of CCP general secretary Xi Jinping?

Desmond Shum: They’ve detained about four million people in the anti-corruption campaign. This has been reported in the media. But it’s a joke, and has been for the past three decades. Even if you hauled in every single party member and took them down, one by one, you still wouldn’t have gotten everyone. Some would always slip through the net. And there’s nobody who is uncorrupt in the entire party, if you apply party standards. So the whole thing is selective.

For example, in 2006, around the time that they detained [disgraced former Shanghai party chief] Chen Lianyu, they also looked into the affairs of the daughter of Han Zheng, who is now senior vice premier and in charge of Hong Kong. She was studying in Australia at the time, and they discovered that she had savings of around 100 million yuan. They were going to detain Han Zheng on that basis, but they were worried that would plunge Shanghai into political turmoil if they detained both the party secretary and the mayor at the same time, so they didn’t detain him. Instead, they just kept on promoting him.

And it’s not just the elite. It’s the entire country. Back when I was working [for a private equity company] that was categorized as Chinese-invested, the entire management had accounts in Hong Kong where they would stash money away. Everyone in mainland China has overseas bank accounts, to squirrel away money. Nobody believes that private assets will always be protected. There are always hidden dangers in mainland China, and nobody knows when everything will change. That’s why they stash their assets overseas. It’s a long-ingrained habit.

RFA: Do you think the CCP will lose its grip on power?

Desmond Shum: There are a few reasons why they won’t. First, they have all the guns. Second, they are willing to use them without scruple. That’s very different from the West. In Western and Eastern European countries, there’s always the stricture of religious belief, or some kind of moral restriction on using force against other people. But the CCP have no such scruples. Thirdly, I think the CCP have been highly successful at hanging onto power for the past 70 years, so they shouldn’t be underestimated. I think we are still a long way from the collapse of the CCP. Three years of famine [1958-1961] didn’t topple them, and 40 million people died.

Translated and edited by Luisetta Mudie.

As China struggles to control the latest surge of power shortages, the government seems to be hoping that the public will have short memories for how it has dealt with similar problems in the past.

After months of downplaying the power crisis and recommending partial fixes, central government authorities belatedly acknowledged the spread of electricity rationing and blackouts in late September, prompting some news media to blame China’s troubles on the United States.

Pressures on generating companies have increased since last year with the government’s push for economic growth and recovery from the COVID-19 pandemic. The demand for more power has sapped power company profits as producers are caught between rising coal prices and regulated electricity rates.

Power providers in Beijing and the surrounding region have been warning since August that they faced bankruptcy due to high summer demand and record coal costs.

“In fact, the power squeeze has been evolving throughout this summer but was noticed by the public when sudden blackouts hit households in the northeastern region,” said a Xinhua report on Oct. 4.

The official news agency confirmed that residents of the industrialized region had suffered shutoffs of traffic lights and elevator service since September.

Power restrictions have been imposed in as many as 20 provinces including coastal Guangdong and Zhejiang, according to The Wall Street Journal and other independent reports.

A XInhua commentary on Sept. 30 sought to minimize the problem, calling the shutdowns “a blip” that posed no threat to the economy or global supply chains.

In an angrier tone, Hu Xigin, editor-in-chief of the daily tabloid Global Times, blamed foreign factors for a series of international shortages including “KFC in the U.S. running out of chicken,” without explaining the connection to China’s woes.

“The root cause is the world lacks cooperation of the U.S. with China. Washington has no sense of responsibility as a superpower,” Hu stormed in a Twitter posting cited by BBC Monitoring.

But policy decisions closer to home are clearer causes of China’s power problems.

While China’s recovery-driven demand for more electricity set the stage for shortages, the central government has contributed to the outages by pressuring provinces over their failures to meet their “dual control” targets for total energy use and energy efficiency in the first half of the year.

In an editorial, the Global Times tried to shift the blame to the provinces for implementing the conflicting orders of the National Development and Reform Commission (NDRC), the government’s top economic planning authority, too rigidly.

“They need to carry out the country’s ‘dual controls’ and ‘dual restrictions’ more prudently, and try to avoid the ‘great leap forward’ or slack at work,” said the editorial, cited by the BBC.

Production increases

Coal-producing provinces have faced further contradictory pressures as a result of NDRC orders to increase production, leading to a rash of fatal accidents. The NDRC has responded by sending teams to the mines for safety inspections, slowing production for as much as two months.

Similarly, the NDRC ordered coal-fired power plants to boost their coal inventories to guard against outages, only to order a reduction in stockpiles weeks later when it realized that the increases were only serving to drive coal prices higher.

Philip Andrews-Speed, a senior principal fellow at the National University of Singapore’s Energy Studies Institute, sees the conflicting policies as a clash between market forces and heavy-handed state planning rules.

“It is a classic case of the unstoppable market meeting the immoveable plan,” said Andrews-Speed.

“The ‘plan/state’ has set limits on energy use, suspended some coal mines, banned coal imports from Australia and limits on power tariffs,” he said by email.

“The market has driven strong economic growth and exports, driven up the price of coal and gas, and fails to incentivize coal-fired power stations to produce electricity,” he said.

On Oct. 8, Premier Li Keqiang and the cabinet-level State Council promised new measures to increase energy supplies for the coming winter.

“Electricity and coal supply is crucial to people’s lives and a stable economic performance. It must be guaranteed,” said Li, according to Xinhua.

Among the new measures, the government ordered coal mines to boost production “as soon as possible.” Mines in Inner Mongolia and Shanxi province were told to increase production capacity by 160 million metric tons.

Power companies will be allowed to raise rates by up to 20 percent to cover their costs, up from the previous limit of 10 percent. While the higher rates could encourage power plants to produce more, it was unclear whether they would be enough to offset the record prices of coal.

The government’s belated measures may help to break the cycle of shortages and price increases. But the contradictory NDRC orders that have complicated the power crisis are reminiscent of its reactions to power shortages in the past.

In late 2010, for example, the NDRC took similar steps that resulted in blackouts for industrial enterprises, homes and even hospitals as the government tried to lower electricity use to meet five-year energy efficiency goals.

The following March, the NDRC issued a rare apology for the arbitrary cutoffs, although it blamed “some local governments” for going too far in carrying out its orders, Xinhua reported at the time.

At a press conference, then-director of the agency, Zhang Ping, “admitted that the NDRC, which is in charge of energy saving and emission cut, is inexperienced in dealing with such a wrong practice, and should be (held) responsible for it.”

“We will not repeat such mistakes,” Zhang said.

Reversing the ban

In December 2017, the government abruptly cancelled a coal ban for 28 northern cities that had been ordered to switch their heating systems to cleaner-burning gas and electricity after discovering that network connections could not be built in time for winter.

Local officials had scrapped coal-fired boilers on orders from the central government, leaving thousands of homes with no heat at all.

The mixup sparked public outrage after China Youth Daily published pictures of children at a primary school in Hebei province sitting outside in the winter sun because their classrooms were too cold.

Such episodes raise the question of whether China’s chronic power shortages and energy crises are the result of internal clashes between economic and environmental factions, or of failures to coordinate planning policies, or perhaps both.

The conflicts broke into the open last January when the government’s Central Environmental Inspection Team (CEIT) released a blistering report blasting the National Energy Administration (NEA) for allowing new coal-fired plants to be built despite President Xi Jinping’s pledge to combat climate change.

The CEIT charged the NEA with failing to carry out Xi’s environmental policies, demanding that a “rectification plan” should be submitted to the Communist Party of China (CPC) Central Committee and the State Council within 30 working days.

While the demand exposed the conflict, the resolution remains unclear.

The government’s list of possible remedies has said nothing about the impact of increased coal and power consumption on climate change plans, suggesting that it has deferred environmental concerns until a later date.

The climate itself appears to be creating conflicting pressures on China’s coal supplies.

As far back as August, the government began calling for more production and ordered previously-closed mines in coal- rich Shanxi and other provinces to restart.

But on Oct. 8, the same day as Premier Li’s meeting with the State Council, heavy rains forced 60 mines in Shanxi to suspend operations, Xinhua said.

On Oct. 12, Xinhua said that most of the mines had resumed production. But a separate report said the province had suffered the strongest autumn floods on record, affecting 1.76 million residents with the collapse or serious damage to 37,700 homes and the suspension of 530 high-voltage power lines.

JAKARTA– An earthquake, with a magnitude of 5.8, struck off North Sulawesi province, in the central parts of Indonesia yesterday, the meteorology and geophysics agency said here.

 

The quake hit at 10:16 a.m. Jakarta time (1516 GMT), with the epicentre at 119 km south-east of Bitung town, and the shallow at 10 km under the sea bed.

 

The quake will not potentially trigger giant waves of tsunami, the agency said.

 

Source: NAM NEWS NETWORK