The Age

The rot inside

Author: John Garnaut
Date: 14/04/2012
Words: 3256
Source: AGE
          Publication: The Age
Section: Insight
Page: 16
As a scandal engulfs China's political class, a battle is being waged against graft in the other institution of power  the People's Liberation Army. John Garnaut reports.

THE People's Liberation Army is barely accountable to any civilian body, its affairs are out of bounds for China's media and netizens, and scandals are routinely airbrushed from public to preserve its image. Outsiders get glimpses of the enormous flow of military bribes and favours when they see the inner streets of Beijing crowded with luxury cars with military number plates.

Business people gravitate towards PLA officers because of the access and protection they bring. PLA veterans contrast inadequate pensions with the luxury lifestyles they observe among serving officers. Retired officers say promotions have become so valuable that it has become routine to pay six and seven-figure bribes to even be considered for senior positions.

Until General Liu Yuan took his stand, however, the culture of secrecy ensured that only fragmentary anecdotes of corruption could be observed. Liu, the highest-born of all of China's princelings, is political commissar in the General Logistics Department.

Some believe he is on the way to becoming China's most powerful general thanks, in part, to his lifelong friendship with the anointed incoming princeling president, Xi Jinping. He is known outside China as one of the rising hawks whose spasmodically firebrand comments have contributed to almost every nation in the region scrambling to upgrade its military capabilities and the United States "pivoting" its focus back towards China.

"Man cannot survive without killing," Liu wrote last year, in the preface to a friend's book.

While Liu  and other leaders  hold up the US as China's potential wartime enemy, he is more worried about what the PLA is doing to itself in times of peace. "At home and abroad, no country can defeat China and no force can destroy our party," Liu told his officers on December 28, according to sources who have seen and verified his speech. "But only corruption, our own corruption, can smash us and cause our armed forces to be defeated without firing a shot."

Liu said the practice of buying promotions is now so widespread that even President Hu Jintao, chairman of the Central Military Commission, had sounded the alarm: "When Chairman Hu severely criticised the 'buying and selling official posts', can we sit idle?"

If even half of what Liu says about the professional decay of his colleagues is true, then the Obama administration may be pivoting back towards Asia  including Australia  for the wrong reasons. Analysts may be over-estimating China's military operational capacity as much as they once underestimated its technological development. The greatest dangers presented by the PLA may derive from its lines of command being corroded by corruption, compromised by ties of patronage and asphyxiated by the ever-greater effort required to impose political control. This is a recipe for accidents, and dangerous bureaucratic paralysis in crisis situations, rather than regional military domination.

When China's princelings talk about saving the Communist Party from the rot within they like to adapt Chairman Mao's metaphor of "curing the disease to save the patient". Perhaps because Liu Yuan was talking about the PLA  where putrefaction appears more advanced than elsewhere  he took the image beyond its usual graphic limits. In a closed-door speech this year to a party-study class he recalled a childhood tale about a surgeon in Siberia who saved himself from acute appendicitis by using a mirror to guide a knife into his lower abdomen and remove the fetid organ. "How many people on this earth are really able to operate on themselves?" asked Liu Yuan. "No matter if it is an individual or an organisation, to fix a problem when it arises requires this type of guts and nerve."

One reason Liu Yuan has the guts to cut through the shiny carapace of the People's Liberation Army is because he is "the sole surviving male descendant of president Liu Shaoqi", as President Hu once put it to Liu's late mother, say sources close to Liu. One of his brothers was killed in the Cultural Revolution while the other emerged insane, to die soon after. His mother, Wang Guangmei, was jailed for a decade. His father, who had been Mao's anointed successor for 20 years, died in a cold concrete prison cell: naked, emaciated and caked in vomit and diarrhoea.

Liu Yuan's legendary pedigree gives him licence to do and say what others cannot. When he talks of a "life and death" struggle to save the PLA and the Communist Party system his father helped create nobody doubts that he means it. What is less clear, however, is whether the PLA can simply remove its own rotten parts, and if the divided and compromised civilian and military leadership will allow Liu Yuan to do the surgical work.

In January Liu Yuan ripped out one allegedly cancerous node, the deputy director of his Logistics Department, General Gu Junshan, after a protracted internal struggle. Those close to the investigation describe details of Gu extorting county officials with threats of violence and buying his way up the PLA hierarchy. Together with friends, relatives and patrons in and beyond the military, they say, he profited immensely from property developments, distributed hundreds of PLA villas to his closest friends, and generally ran his construction and infrastructure division like a mafia fiefdom. They detail a bewildering list of personal assets beginning with his own luxury villa, which stands outside the usual military compounds, behind a high wall next to Beijing's East Fourth Ring Road, called General's Mansion.

"Gu's issue is extraordinary big," says an official who is close to the investigation. "You might wonder how someone at major-general level can enjoy chartered flights when travelling domestically and overseas. How could he build a martyr's cemetery for his father, who used to be a Kuomintang soldier?"

In February, Gu's removal was officially confirmed but only in passive terms: "Gu Junshan no longer holds the position of deputy director of the General Logistics Department." The leadership, it seemed, was still battling over his fate.

The Gu Junshan investigation could turn out to be the first big corruption expose since the Yuanhua Group was found in 1999 to have used military connections to evade 30 billion yuan in taxes by smuggling everything from cigarettes and luxury cars to fully-laden oil tankers. The case brought down the head of a PLA intelligence division and enabled former president Jiang Zemin to consolidate his grip on the military.

The only significant case since then was that of deputy commander of the navy, Admiral Wang Shouye, who was arrested in December 2005. Hong Kong media reports claimed he was brought down by a mistress  he had five, according to one report  and he had stolen 160 million yuan. PLA leaders promised an anti-corruption campaign but all that seemed to change was that the sums grew much bigger.

Soon after Gu's removal, around Spring Festival, Liu Yuan gave a more detailed account of corruption and insubordination, which confirmed the problems were not confined to one rogue general. In his speech to the party study class, according to sources who have seen it, he described a disease of "malignant individualism" that makes officers follow only orders that suit them, rely on their guanxi connections everywhere and openly sell their services at "clearly marked prices".

The web of military cliques, factions and internal knots of organised crime sounds more like the workings of warlord armies before the communist revolution than the rapidly modernising force now rattling China's neighbours.

Liu Yuan described the situation: "Certain individuals exchange public money, public goods, public office and public affairs for personal gain, flouting the law and party codes of conduct. They even resort to verbal abuse and threats, clandestine plots and set-ups. They physically attack loyal and upstanding officials, kidnap and blackmail party leaders, and drag in their superiors to act as human shields. They deploy all of the tricks of the mafia trade within the army itself."

The rot was so ubiquitous that officers had little incentive to act honestly: "Why would you follow the other path when you can rely on being given a promotion and, while still not even firmly in the position, waste no time to scoop out wads of cash and extort money a few more times before being sent on again to the next position to extort again," Liu said.

And even he, the highest-born of all the princelings who are coming to dominate the upper ranks of the party and the military, admitted to feeling the pressures of playing the honest cop in a crooked system. "It is as if fighting corruption, catching and correcting people, investigating breaches, fighting mafia and eliminating evil has become some sort of secret activity," he said.

Chen Xiaolu, a princeling and former PLA colonel who gets together with Liu Yuan after each Spring Festival, declines to repeat the "terrible stories" he hears from recently retired generals  except to confirm the broad thrust of those about Gu Junshan. "Liu Yuan is an honest person and he does not collect money for himself," he says. "If Liu Yuan said those things then he must have his own proof, because he is in power and we are not."

Chen Xiaolu does, however, have a distinct vantage point from which to assess why military discipline appears to have slipped so far. He is the son of one of China's 10 great marshals, Chen Yi, who founded the Third Army. He married the daughter of his father's right-hand man, General Su Yu, widely considered one of the PLA's greatest wartime commanders.

Chen Xiaolu was a top student at an elite Beijing school who went on to serve in the PLA's 39th Army and as defence attache in London. He opted out of the system after 22 years on the PLA payroll, when on June 4, 1989, troops were sent into the heart of Beijing and massacred students and other protesters for the first time in the PLA's recorded history. Chen, who was seconded to a political reform institute at the time, refused various offers of senior positions. "I can remain silent, but I cannot tell lies," is how he explained his decision to superiors at the time.

Some of Chen's military and princeling friends say he would by now be one of the highest-ranked generals if he had stayed in the system, but he has no regrets. In an interview in Chen's father-in-law's old courtyard home, next to Beijing's Houhai Lake, he said the June 4 massacres left a vacuum of ideology, purpose and integrity which money has rushed to fill. "The problem has really got out of hand in the past 20 years," he says. "After the June 4 movement, when 'opposing corruption' was the protesters' slogan, some of the officers no longer cared about anything. They just made money and broke all the rules."

Chen says the PLA has made huge efforts to politically indoctrinate its officers to secure their loyalty, at the expense of parallel efforts to "professionalise". He does not believe the political campaigns are working. "Maybe one day they will not be willing to obey their higher authorities because they are corrupt," he says. "Maybe the young generation of officers don't want to serve anybody and just want to take their own advice."

Another princeling, who holds a senior post on the civilian side of the party apparatus, says lack of discipline and unity in the PLA has grown much worse in the past decade.

Unlike in the days of Mao and Deng Xiaoping and the latter years under Jiang Zemin, China no longer has a paramount leader who can stamp authority at crucial junctures. He says an unprecedented leadership vacuum has opened up at the top of the military because President Hu has never consolidated his grip, even after 10 years at the helm of the Communist Party.

"Corruption is the glue that keeps the whole system together, after the age of idealism," says the senior official, who is close to the family of former president Jiang Zemin. He said it is worse in the military, where "gangs" and clusters of patronage are tied together by favours and corruption.

A third princeling, whose father once oversaw China's security apparatus, goes so far as to blame Jiang for sabotaging the last leadership transition, back in 2002, by refusing to relinquish control of the military. "Jiang Zemin promoted dozens of generals while he was in power, and those people are either morons or his personal henchmen," he says. "Chinese politics has not become institutionalised." The result, he says, is that nobody is really in control.

On the civilian side of the Communist Party, the spectacular demise of Liu's friend, the former Chongqing Party boss Bo Xiali, has further punctured the facade of "institutionalised" power transitions. The episode showed there are no enforceable rules, nor independent arbiters, to decide who governs the world's most populous nation and how they do it.

Now that Bo has been suspended from the party's elite Politburo and is being investigated for "serious discipline violations", and his wife, Gu Kailai, is the prime suspect in the murder of British national Neil Heywood, Liu Yuan's "life and death" battle against corruption in the PLA may have become the new field of elite political struggle.

An official with direct knowledge of Gu Junshan's case says President Hu Jintao had three times ordered that Gu's case be dealt with after receiving a request from Liu Yuan, but it was twice obstructed by one of Gu's patrons high in the military command. "It was as if President Hu was making a show of his impotence," he says.

Some close Beijing political observers say Hu eventually succeeded only by bypassing military channels. "With Hu's direct instructions they bypassed the PLA discipline inspection commission and asked the central discipline inspection commission," says the political analyst Chen Ziming. "This means the case faced major resistance inside the PLA. It shows that those in actual power, both in the PLA and the party, have paved their paths with money and they control key people."

Liu Yuan, with President Hu's backing, eventually succeeded in removing Gu but his networks and patrons in the Central Military Commission and beyond remain in place. In speeches this year Liu Yuan spoke darkly of those who acted as "shields" and "umbrellas" for corrupt officers. He also spoke mysteriously of "hostile forces" who tried to use last year's uprisings in the Middle East "as a spear to attack our army" and sow "discord between the party", suggesting another dimension of struggle.

Other signs of PLA power struggles are bubbling to the surface. Three weeks ago a Chinese official informed a foreign military academy that one of the PLA's rising stars, General Zhang Qinsheng, would not attend a conference because he had been "replaced" as first deputy chief of the General Staff Department, according to a source at the academy. The information appeared to confirm swirling rumours at the time. Chinese defence officials then rushed to inform diplomats that there had been "a misunderstanding" and General Zhang's position was, in fact, secure. The false information was then followed by false rumours of a military coup that swept the country.

The PLA's top brass has responded with repeated pledges of loyalty to Chairman Hu Jintao and by further isolating their officers from the outside world. "Whenever reform and development reach a crucial juncture, struggle in the ideological arena becomes even more intense and complex," said an editorial in last Friday's People's Liberation Daily. "We must pay close attention to the impact of the internet, mobile phones and other new media on the thinking of officers and troops."

The status of Liu Yuan's parents, the magnitude of his family tragedy and his prodigious self-belief stands him apart from most of his peers. Working against him is the fact he has spent less than a decade in the PLA, after transferring from the People's Armed Police, and some officers resent being ordered around by a man who lacks a professional military background.

Others are suspicious of his ambition and believe his political comments have far overstepped the boundaries of military discipline. Many see Liu Yuan's challenge to their financial and other interests as an existential threat. Already, false rumours have been spread that Liu Yuan is battling cancer.

"At the slightest movement one is labelled as fomenting conflict, not being a team player and purposefully spoiling other people's fun; to the point where those who work against corruption are out-competed by those who are corrupt," said Liu Yuan, in his party study speech this year. "Justice is under pressure and people fear retaliation while the scum congratulate each other on their great career prospects, get promoted and become rich."

As Liu Yuan drives his corruption campaign deeper into entrenched networks of factions and patronage, and reveals his political ambitions more openly, he is becoming as polarising in elite political circles as his deposed friend, Bo Xilai. "Liu Yuan has gone mad," says the senior official who is close to the family of former president Jiang.

Chen Xiaolu is standing firmly on Liu Yuan's side. "He says the Communist Party is in crisis and has to change," says Chen. "Some people question his intentions. I say I don't care about intentions; I say if he's against corruption then I support him."

There are signs Liu Yuan may be making progress. In recent weeks a formal investigation into Gu Junshan was finally given official approval. A week ago the director of Liu Yuan's department, General Liao Xilong, was empowered to form a new PLA-wide corruption-fighting audit committee.

Liao had supported Liu Yuan's efforts to unseat Liao's deputy, Gu Junshan. "Thoughts and actions must be united to the decisions and instructions made by Chairman Hu and the Central Military Commission," said Liao.

Depending on how far it goes, Liu Yuan's surgical work could alter the delicate balance of factional power involving President Hu, his predecessor Jiang Zemin and his anointed successor, his staunch princeling friend Xi Jinping. If Liu Yuan succeeds he could vault into the vice-chairman position of the PLA's top governing body, the Central Military Commission.

Some close observers believe he is enabling civilian party leaders to finally assert authority, as Jiang had done with a huge anti-smuggling campaign late in his own term. "The formation of the audit committee in the military finally signifies a decisive move by the current civilian leadership to assert more control over the military," said Victor Shih, a political scientist at Northwest University. "For a variety of reasons, it has taken Hu Jintao almost his entire administration to prepare for such a move."

If the PLA is the malignant morass of theft, bribery, extortion and mistrust that Liu Yuan and other princelings say it is, then China's military offensive capabilities must be lower than many overseas strategists fear. Behind the PLA's shiny exterior is a world in which information is not trusted, important decisions require cumbersome bureaucratic consensus and leaders fear their subordinates will evade responsibility or ignore directions.

This entails a different array of risks. Even Liu Yuan appears unsure whether the PLA is capable of self-surgery in the age beyond ideals and strong leaders. "We are falling like a landslide," said Liu Yuan. "If there really was a war, who would listen to your commands or risk their life for you?"

John Garnaut is China correspondent. He is writing a book on the princelings shaping China's future. A version of this article will appear at on Monday.

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