One of the most common rackets was illegal subcontracting. A single contract could be divvied up and sold for kickbacks, then sold again and again, until it reached the bottom of a food chain of labor, where the workers were cheap and unskilled. Railway ministry jobs were bought and sold: $ 4,500 to be a train attendant, $ 15,000 to be a supervisor. In November 2011 a former cook with no engineering experience was found to be building a high-speed railway bridge using a crew of unskilled migrant laborers who substituted crushed stones for cement in the bridge’s foundation. In railway circles, the practice of substituting cheap materials for real ones was common enough to rate its own expression: touliang huanzhu—“ robbing the beams to put in the pillars.”
With so many kickbacks changing hands, it wasn’t surprising that parts of the railway went wildly over budget. A station in Guangzhou slated to be built for $ 316 million ended up costing seven times that. The ministry was so large that bureaucrats would create fictional departments and run up expenses for them. A five-minute promotional video that went largely unseen cost nearly $ 3 million. The video led investigators to the ministry’s deputy propaganda chief, a woman whose home contained $ 1.5 million in cash and the deeds to nine houses.
Reporters who tried to expose the corruption in the railway world ran into dead ends. Two years before the crash, a journalist named Chen Jieren posted an article about problems in the ministry entitled, “Five Reasons That Liu Zhijun Should Take Blame and Resign,” but the piece was deleted from every major Web portal. Chen was later told that Liu oversaw a slush fund used for buying the loyalty of editors at major media and websites. Other government agencies also had serious financial problems— out of fifty, auditors found problems with forty-nine— but the scale of cash available in the railway world was in a class by itself. Liao Ran, an Asia specialist at Transparency International, told the International Herald Tribune that China’s high-speed railway was shaping up to be “the biggest single financial scandal not just in China, but perhaps in the world.”
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In February 2011, five months before the train crash, the Party finally moved on Liu Zhijun. According to Wang Mengshu, investigators concluded that Liu was preparing to use his illegal gains to bribe his way onto the Party Central Committee and, eventually, the Politburo. “He told Ding Shumiao, ‘Put together four hundred million for me. I’m going to need to spread some money around,’” Wang told me. Four hundred million yuan is about sixty-four million dollars. Liu managed to assemble nearly thirteen million yuan before he was stopped, Wang said. “The central government was worried that if he really succeeded in giving out four hundred million in bribes he would essentially have bought a government position. That’s why he was arrested.”
Liu was expelled from the Party the following May, for “severe violations of discipline” and “primary leadership responsibilities for the serious corruption problem within the railway system.” An account in the state press alleged that Liu took a 4 percent kickback on railway deals; another said he netted $ 152 million in bribes. He was the highest-ranking official to be arrested for corruption in five years. But it was Liu’s private life that caught people by surprise. The ministry accused him of “sexual misconduct,” and the Hong Kong newspaper Ming Pao reported that he had eighteen mistresses. His friend Ding was said to have helped him line up actresses from a television show in which she invested. Chinese officials are routinely discovered indulging in multiple sins of the flesh, prompting President Hu Jintao to give a speech a few years ago warning comrades against the “many temptations of power, wealth, and beautiful women.” But the image of a gallivanting Great Leap Liu, and the sheer logistics of keeping eighteen mistresses, made him into a punch line. When I asked Liu’s colleague if the mistress story was true, he replied, “What is your definition of a mistress?”
By the time the libidinous Liu was deposed, at least eight other senior officials had been removed and placed under investigation, including Zhang, Liu’s bombastic aide. Local media reported that Zhang, on an annual salary of less than five thousand dollars, had acquired a luxury home near Los Angeles, stirring speculation that he had been preparing to join the growing exodus of officials who were taking their fortunes abroad. In recent years, corrupt cadres who sent their families overseas had become known in Chinese as “naked officials.” In 2011 the central bank posted to the Web an internal report estimating that, since 1990, eighteen thousand corrupt officials had fled the country, having stolen $ 120 billion— a sum large enough to buy Disney or Amazon. (The report was promptly removed.)
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in China, people were more inclined to quote a very different statistic: in forty-seven years of service, high-speed trains in Japan had recorded just one fatality, a passenger caught in a closing door. It was becoming clear that parts of the new China had been built too fast for their own good. Three years had been set aside for construction of one of the longest bridges in North China, but it was finished in eighteen months, and nine months later, in August 2012, it collapsed, killing three people and injuring five. Local officials blamed overloaded trucks, though it was the sixth bridge collapse in a single year.
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After years of not daring to measure the Gini coefficient, in January 2013 the government finally published a figure, 0.47, but many specialists dismissed it; the economist Xu Xiaonian called it “a fairy tale.” (An independent calculation put the figure at 0.61, higher than the level in Zimbabwe.) Yet, for all the talk about income, it was becoming clear that people cared most of all about the gap in opportunity. When the Harvard sociologist Martin Whyte polled the Chinese public in 2009, he discovered that people had a surprisingly high tolerance for the rise of the plutocracy. What they resented were the obstacles that prevented them from joining it: weak courts, abuses of power, a lack of recourse. Two scholars, Yinqiang Zhang and Tor Eriksson, tracked the paths of Chinese families from 1989 to 2006 and found a “high degree of inequality of opportunity.” They wrote, “The basic idea behind the market reforms was that by enabling some citizens to become rich this would in turn help the rest to become rich as well. Our analysis shows that at least so far there are few traces of the reforms leveling the playing field.” They found that in other developing countries, parents’ education was the most decisive factor in determining how much a child would earn someday. But in China, the decisive factor was “parental connections.” A separate study of parents and children in Chinese cities found “a strikingly low level of intergenerational mobility.” Writing in 2010, the authors ranked “urban China among the least socially mobile places in the world.”
More (#1) from Osnos’ Age of Ambition:
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