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Recent China research
|China Weekly: A China case study: Bottled water adds to food safety problems, 14 May 2013|
|China Weekly: China’s White Goods: Survival of the biggest, 9 May 2013|
|China’s grain seeds sector gets a boost but openings for foreign companies will be limited, Fergus Naughton, 9 May 2013|
|China Report Update: Food safety, 8 May 2013|
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Recent blog posts
Watch the clouds,
20 May 2013
China’s food safety – and the trust deficit,
7 May 2013
Rising confrontations and the China Dream,
2 May 2013
China’s regional policy dilemma deepens,
10 Apr 2013
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The Bo business fallout
When a prominent Chinese politician falls, there are usually repercussions in the business world. Those who had enjoyed protection from yesterday’s man are well advised to watch their back.
So it was in Shenzhen when the mayor went: Huang Guangyu, the Chairman of the big retailer Gome who had been close to him, was convicted of various nefarious deeds and jailed for 14 years. And when Chen Liangyu, the powerful Party Secretary of Shanghai and Politburo member, was dismissed in 2006 and then imprisoned two years later for 18 years, property developers who had prospered during his reign found that life had suddenly become more difficult. If they escaped jail terms, their business was no longer the same.
The same fallout can be expected from the political demise of Bo Xilai in Chongqing - though there has been no announcement that he has been ousted from the Politburo as well as from the Chongqing job, he is said to be under house arrest at a seaside resort favoured by the leadership. The development of the mega-municipality will continue under his successor, Vice-Premier Zhang Dejiang, who is known for his close association with bosses of central state enterprises. But it will be under tighter control from Beijing, and that will inevitably have an impact on local businessmen who have benefited from the hectic expansion of the city in recent years.
The most immediate effect of Bo’s political demise - has been felt in the north-eastern port city of Dalian, which he ran before he became commerce minister and then went to Chongqing. Xu Ming, the renminbi billionaire head of a big conglomerate, Dalian Shide Group, who had been linked to Bo, has been held by the Party’s fearsome Discipline Commission, which can detain people for up to six months in a secret location without charge. Chinese media say he is being questioned for “economic cases”, a synonym for corruption. Other sources say the Commission is also quizzing additional business figures and officials connected to Bo.
Having connections is essential for prospering in business in China. But when those connections fall from grace, there is no hiding place if the authorities decide to follow a political execution with a crack down on the business beneficiaries.