September 25, 2006

Shanghai Shake Up

Back in July, convicted Shanghai real estate tycoon Zhou Zhengyi was released from jail. He had been convicted in 2003 of stock manipulation a lessor charge and in some ways Zhou was a fall guy for the shady practices of Shanghai's government in speculating in rampant real estate development. Zhou was politically connected at high levels including Shanghai's party chief Chen Liangyu and officials of the Kuomintang party on Taiwan. Since he left jail Zhou's whereabouts are unknown.

Chen Liangyu, until today Communist party boss in Shanghai, is now out and accused of corruption that squandered hundreds of millions in retirement fund money. (Just think of a giant San Diego on the other side of the Pacific.)

Word is Chen's sudden departure is a sign of an internal power struggle in advance of next year's 17th Communist Party Congress and Presidential election (Hu Jintao is eligible for one more 5 year term according to China's constitution). Shanghai is an important town and political struggles there often signal big shifts in the Chinese government.

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