China's naive masses fall prey to greed of officials and gangsters

Click to follow
The Independent Online

"I still regard myself a good Communist," states 70-year-old Zhou Wei firmly, despite his expulsion from the party two years ago. "What I am attacking is not Communism, which I still believe in, but the tumour in the system: corruption." The Chinese body politic may be sick, but it remains powerful enough to silence its critics.

Officials in Shenyang, China's fifth largest city, stripped Mr Zhou of party membership for reporting a vice-mayor's illegal activities to Beijing. When the retired cadre and his geriatric gang of fellow activists followed this by reporting an investment fund scandal to Beijing, they sent him to labour camp for two years, convicted of "illegally organising the masses and stirring up trouble".

But this year Mr Zhou has emerged unbowed. The vice-mayor is in prison, and a former mayor, Mu Suixin, is on trial for corruption. State media report with satisfaction that Mr Mu, a former high-flyer who once gatecrashed a Beijing banquet for Tony Blair, has had his hair turn white. China is finally getting tough on the graft corroding the capital of the nation's rustbelt.

Fresh hopes raised by the cull – more than 100 senior city officials detained in recent months – have quickly been dashed, however. No relief has come to the victims of the investment scandal with which Mr Zhou eventually brought down Mr Mu.

Zhao Zhengbao, a retired engineer, says: "At first, we thought we would have a better chance after Mr Mu was disgraced, since he was in charge of the investigation team into the Huaxing [investment] case. And the new city leaders talked about 'looking back and learning lessons from the past', and 'increasing democratic supervision'."

But, unfortunately, everything remains the same: "The same medicine with a different name." Mr Zhao stands with two dozen others before a closed office block. Their bright umbrellas and raincoats glisten in the rain, but the mood is grim. Each Friday they come, in search of the money and dreams of a better future now sunk without trace behind the locked doors of the Huaxing Investment Co.

In July, armed police broke up a demonstration of 1,000 protesters, and interrogated its leaders. However, despite detentions, threats of imprisonment and a media ban, the Huaxing victims continue to speak out.

In a city scarred by one of China's worst corruption scandals, they claim that high-ranking party cadres were rewarded for supporting the Huaxing fund, and were refunded when it folded in 1998. A three-year investigation into the 1.3bn yuan (£107m) scheme has yielded little but heartache for most of its 30,000 investors, driving some to death's door, others to suicide.

"My husband might have been saved if I hadn't put our money into Huaxing," cries Wang Zeyuan, her tears washed by the rain. "When he suffered a stroke in 1995, I desperately needed money," she recalls. She had already been laid off by a state-owned plastics factory, but their life savings of Yn100,000 (£8,200) were locked into the fund. Mrs Wang's husband died before she could fund the necessary treatment. "How could I know Boss Su is a big swindler!" she says of the founder of Huaxing, Su Yingqi, a smooth-talking former policeman and convict. "I knew that we laid-off workers had no financial security and little means to make money," she explains, "so the investment scheme seemed a good way to get some security."

For almost 15 years, Huaxing, meaning "China Prospers", appeared an excellent bet for people who craved stability in a fast-changing society, yet who sought better returns than those offered by state-run banks. But China's transition to market economics is often painful.

Investors in more mature markets worldwide might have doubted Mr Su's promise of interest rates four times those of bank rates, but many Chinese remain naïve of the downside of capitalism. They are also vulnerable to China's inadequate regulatory environment and prejudiced legal system.

Mr Su's contacts tipped him off ahead of arrest. And while Mr Mu could face execution for taking bribes worth almost £700,000, the suffering continues for victims of the corruption that flourished under his reign. Like many victims of Huaxing, Mrs Wang lives in Tiexi, Shenyang's ailing industrial zone, in a roughshod flat without running water. Unemployment runs so high that the area is called "the poor people's holiday camp". Her family scrapes by on piecemeal work – such as putting disposable chopsticks into paper sleeves.

"It was Huaxing that destroyed my husband and our family!" complains Yuan Meiling, 39, who lost their Yn100,000 life savings from running a grocery store. "After the collapse, my husband, Li Futian, a laid-off worker, became so depressed that he took up drinking. Now, he's like a vegetable."

Victims of the swindle are adamant that the authorities must bear responsibility. Mr Zhou, using a slang term for go-between, explains: "It was the government that held the donkey. Without that, Huaxing would never have become that big or lasted that long. The people's government should serve its people, not cheat its people together with gangsters."

Comments