On the Party and the Princelings

Desmund Shum is a red billionaire. Red Roulette is his memoir, a tell all expose of his family’s climb to the summits of wealth and the foothills of power. The book describes how he and his ex-wife maneuvered to the top—and why they subsequently crashed back to earth. Their fall was as dramatic as their rise: Shum now lives in exile; his unfortunate ex now lives in prison. With nothing to lose, Shum lets loose: his memoir promises to hang Beijing’s dirty laundry for all to see. What a sight this laundry turns out to be! Read this book. Though Shum is unreliable narrator, his memoir is the best single introduction to elite Chinese life yet written.

One must be careful with Red Roulette. To understand why, consider the list of officials that Shum claims he and his ex-wife, Whitney Duan, nailed their fortunes to: Sun Zhongce, Ling Jihua, Wang Qishan, and Wen Jiaobo—a catalogue of the jailed and the sidelined. Rising high in the Chinese system is an inherently dangerous proposition: the coattails of high officials are the only ladder by which strivers may climb. But whose coattails are safest to climb? As the title suggests, choosing a patron is a bit like a game of roulette. One can never be sure that a chosen patronage network survives the next factional fight. Shum represents the losing side of one of these disputes. This should color our interpretation of his work.

In this sense Red Roulette bears an interesting resemblance to another book I finished this month, Ruan Ming’s Deng Xiaoping: Chronicle of an Empire. Ruan was a hanger-on of Hu Yaobang. As a part of Hu’s “theory squad” he gave his whole hearted support to Hu’s plan to gradually liberalize the Party. Hu lost that fight, and his entire patronage network went down with him. Like Shum, Ruan would survive the purges, make his way to the United States, and publish a memoir promising to lift the veil that obscures the realities of elite Chinese politics. The parallels between the two books are illuminating.

Westerners are primed to understand Chinese politics as they understand their own, as a contest between dueling policy platforms or ideological stances. Shum and Ruan, in contrast, see almost everything, including ideology and policy, as tactical expedients in the latest round of factional infighting. Shum and Ruan represent the losing side of these fights—Red Roulette and Chronicle of an Empire thus exemplify a counterintuitive truth: “history is written by the losers. The winning factions may write up glossy myths, but they will not condescend, as these two men do, to write detailed accounts of how the sausage is made. They are too busy with governing for that. Tell-all memoirs are written by those with nothing to lose—which is to say, those who have already lost. Only the lost have the idle time to relive their pasts on the page; only the powerless must resort to the pen to get their measure of revenge.

This reality makes it difficult to trust our narrators. No single piece of information—be it Ruan Ming’s blow by blow accounts of Party resolution paragraph drafting or Desmond Shum’s lurid stories of wine tasting with party bigwigs—can be considered completely reliable. Between intentional prejudice and natural forgetfulness there is too much room for error. I would not feel comfortable citing single facts or anecdotes (such as Shum’s description of Wang Qishan’s views on democracy) without strong caveats. But if you are reading Red Roulette to find out exactly what Wang Qishan said about democracy in 2013, you are reading this book wrong. The value of Shum’s memoir is not its catalogue of uncertain facts, but rather the larger mosaic that emerges when all of its plausible—though unverifiable—vignettes are stitched together. Whether official so-and-so actually paid bribes to developer so-and-so is less important for our purposes than the fact that insiders find Shum’s account of these officials’ behavior plausible. Ruan and Shum accurately describe how the game works—even if we cannot trust them to provide an unbiased accounting of which moves were made by which players.

Of the two, Shum is the less reliable narrator. Shum describes at some length the lengths he went to present his business ventures as a natural extension of the Party’s political priorities. He would signal where the Party needed him to signal—if the Party needed Hong Kong based businessmen to join  counter-protests on the streets of Hong Kong, he made sure to march through Kowloon longer than any other billionaire at the Party’s service. This should prompt caution to any reader inclined to take Shum’s many panegyrics to liberalism and democracy uncritcally. Desmond Shum shifts with the wind: in his new country of refuge, the East wind has yet to prevail over the West.

One of the more interesting observations in Shum’s book comes near its end, as Shum relates a discussion he has with a friend he does not name. Shum simply calls him “Wolfgang.”  Wolfgang is a grandchild of a Long March. His grandfather waved the red banner in the ‘30s and ‘40s, then governed in its name before the Cultural Revolution removed him from power. People like Wolfgang are often called “princelings”: Shum prefers the term “red aristocrat.” Like many younger members of this red nobility, Wolfgang was sent abroad as a young man to study. He speaks English like a native. This man is exactly the sort of person Americans hoped might remake China in the Western image. Their hope was that the scion of the Chinese elite, punted off to places like Harvard and Berkley, might there be inflamed with the liberal faith,  as has happened to American educated technocrats and journalists across the developing world.

Such did not come to pass. Shum’s explanation for why it did not is worth quoting at length:

When he graduated, his father brought Wolfgang, his only son, back to China and into the firm. The firm continues to make solid profits. In fact Wolfgang’s business benefited from almost every single transaction made in China, from buying a coffee in Starbucks to purchasing a multi million dollar mansion in Shanghai. By this time, another company, run by the People’s Liberation Army, had moved into the same space, but there was room enough for two firms to prosper. This type of duopoly was common in China, with the state-run player sharing the market with a company controlled by a descendant of a red elite.

Wolfgang expanded his company’s production line and got involved in services that gave it access to reams of data. The data was a particular interest to China’s police. Wolfgang shared the data with the police, who trusted him implicitly because of his pedigree. In exchange the security services brought Wolfgang’s company more business.

….He wouldn’t defend China in terms of ideology or values, but he was happy to be mining his bloodline to make a mint. I imagine him as being a bit like Michael Corleone in The Godfather. In my view, Wolfgang was a reluctant monster.

…For years, western commentators insisted that people like Wolfgang have been educated overseas where agents of change in China—they would import universal values from the West and push China in a better direction. But people like Wolfgang never saw themselves in that role. His interest was in China’s remaining the way it was. That’s what made him a very rich man and allowed him to reap the benefits of two systems at once, the freedoms of the West and the managed dual police of authoritarian China.

The more I saw Wolfgang and others like him, the more I viewed them as highly competent enablers of an increasingly toxic affliction, Chinese communism. An exchange for a pot of gold, they sold their souls. Whitney and I had played by the rules they and their parents had set, and we have prospered. But we knew the rules were skewed.1

A friend of mine once described the exodus of well-to-do Chinese studying in the West as a safety valve for the communist system. Those students both well-off and well-motivated enough to pose a potential threat to the communist system all get sucked across the Pacific. Those utterly disgusted with Chinese communism never go back. At the elite level those who do go back tend to be like Wolfgang: even if they sympathize with liberal ideas in theory, their blessed position in Chinese society—their wealth, their  social standing, their business ventures, and their political influence—are a function of their family pedigree, a pedigree whose value can only be cashed in an authoritarian China. There was a window for red reform in the 1980s, when fortunes were small and privileges few. That window has closed. No amount of liberal indoctrination can hope to outweigh the incredible material interests at stake. As long as princelings are running the show, China will stay red.

American optimism in the early aughts was rooted in a our collective failure to grasp the sociology of 21st century China. Yet forms of this error persisted even after the engagement crowd were thrown out. Consider the concerted effort by the Trump administration to draw a line between the Communist Party of China and the Chinese people. I have always been skeptical of this—despite having written a well received essay on the fragility of the Chinese social contract. In that essay I described a divide between a narrow political elite that rigged all of society in its favor and the broader masses who must live with the rules rigged against them. The Trump administration saw this distinction as the division between the Party and the people. Desmond Shum points instead to the distinction between the princelings and the people—including the other people in the Communist Party of China.

The Party possesses multitudes: among its number are millions not especially attached to existing communist institutions or the CPC’s ideology. Most of these 90 million get only marginal benefits from their Party participation. The global economy is not rigged to their interests. The Chinese state does not serve at their beck and call. But Shum’s “red aristocracy?” Here things are different.

After all, what are all these congresses and plenums, the work reports and five year plans for? Why the airports, highways, and high speed rails tying the country together? The smog, smoke, and the sprawling concrete choking it from nature? The doctored bonds and secret trades, the burning rockets and polished ships, the labs, the foundries, and the state-owned business empires?  Why the censors crawling on the web? Why the policemen knocking in the night? For what cause flows the bureaucrats in their millions, the workers in their billions, the payments in their trillions? It is all for them. All of these whirring parts were slapped together and sent in motion so that a few dozen families could cling to their privileges for another generation. Communist China is the playground and safehouse of this red elite. The rest of China just happens to live there.

Or so I would write were I attempting to “heighten the contradictions” that divide the people of China from their rulers. The line that divides those who must play the game and from those who make the game that others play is not the line which separates party members from non-members. That fault-line runs through the party, not around it.

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Thanks. I was not sure whether it was worth reading, since it sounded like it focused on their personal business issues and was not a big picture story.

Mmmm. This is one way to see China, but not the only way. There is more to China than a divide between a few dozen elite families and everyone else. For instance, there is the divide between all those who hold a hukou from Beijing, Shanghai, Shenzhen or another one of a dozen big cities, people who generally hold a certain amount of wealth in the form of highly valuable apartments in those cities, and everyone else. These people are able to take holidays abroad (well, they used to be) and lead a relatively affluent consumer lifestyle. Many of them also feel that the system is working to their advantage. Their children may study abroad, but they also generally don’t change their minds about their system. The fact is that the Party’s ideology reaches deep, and the system’s justifications for its existence are quite widely believed at all levels of society.

Interestingly, your description of shifts in China as “…tactical expedients in the latest round of factional infighting” is EXACTLY how I have heard people with inside knowledge describe the dynamics in Russia.

“justifications for its existence are believed”

Absolutely, agree 100%, especially in the post 2020 world.

But that does not quite obviate the pressures I described in the “Fissures in the Facade” essay. All this “neizhuan” stuff from the last year is a part of this, IMHO. As long as upper middle classes genuinely fear they will not be able to pass their newfound status on to their children, as long as Chinese life feels something like a race which never ends, but only grows more intense, there will be this vulnerability. It would take a national failure before it could be exploited, in my mind–but it could be exploited then, if the West wished to do so. (And it might not!)

Thank you for the hukou reference. I’d heard similar type stories from others from China, but never understood how it worked. (Well I’m reading the wikipedia reference.)

In one of the interviews, Shum mentioned his son speaks with the mother/ex-wife on a weekly basis, while she was unreachable before the publishing. Mike Forsythe of NYT mentioned on Twitter the book is tell-much, not tell all, as Shum omitted some details that he should know.
To add to the unreliability argument, the Red Roulette may be a bargaining chip with someone in Beijing.

“A friend of mine once described the exodus of well-to-do Chinese studying in the West as a safety valve for the communist system. Those students both well-off and well-motivated enough to pose a potential threat to the communist system all get sucked across the Pacific. Those utterly disgusted with Chinese communism never go back”.

This a very good point even as it stands on it’s own. You can add in additionally, the concept that Peter Turchin has of Elite Overproduction : a concept which the first socialist, Ibn Khaldun in 13 century Tunis had, where the off spring of the elite outgrow the positions/sinecures available to the elite. With regime change not coming from the oppressed masses, but elites who feel they aren’t getting their just desserts.

So a reduction of the actual number of elite offspring in country, just by itself, is a benefit: malcontent or otherwise.

It cannot be overstated the degree to which the default is that princeling families subjectively also think of their role in precisely this way, as literal ownership over the country. Regardless of their true ideological commitments, princeling support for the Party derives from their conviction that it is their vehicle for power and prestige and it would betray the legacy of their parents and the right of inheritance for their progeny to reform the party or Chinese politics generally. Their status brings immense privileges including access to wealth, power, and qualified immunity from legal jeopardy, but it is also a golden cage for them. They have built a system in which they must also compete ferociously against each other. In the end, the disembodied Party itself is their master too.

Most pages are self indulgent dribble. But some of it does give some insight into the Chinese elite system.