Dawning Information Industry and Jiang Mianheng have Close Ties

Company now on the United States’ export ban list

Dawning Information Industry and Jiang Mianheng have Close Ties
Jiang Mianheng, son of former Chinese communist leader Jiang Zemin, hosts the 2011 annual work meeting of the Chinese Academy of Sciences. Jiang stepped down from president of the Chinese Academy of Science’s Shanghai branch, announced by official on Jan. 8, 2015. (Screen shot via China Academy of Sciences)

A Chinese supercomputer company listed on the U.S. Department of Commerce’s export control “entity list” is believed to have intimate ties with infamous former Communist Party leader Jiang Zemin.

Dawning Information Industry Co., Ltd. (Zhongke Shuguang, a.k.a. Dawning Company) is a high-tech enterprise concentrating in high-performance computer and server manufacturing.

As a state-owned listed company, Dawning's largest shareholder is Beijing Zhongke Computing Source Asset Management Co., Ltd. (with a 21.32 percent ownership), a division of the Institute of Computing Technology of the Chinese Academy of Sciences.

Dawning provides services to the Chinese Communist government and large state owned technology companies, such as the National Grid of China, China Mobile, and the China Meteorological Administration responsible for weather forecasting. It also provides data centers for e-commerce giant Jingdong and social-media applications such as Tik Tok.

Jiang Zemin Began Paying Attention to Dawning as Early as 1993

The attention towards Dawning can be traced back to when Jiang Zemin, the former leader of the Chinese Communist Party, was in power. In 1993, after the super computer Dawning No. 1 came out, Ma Bin, a researcher at the Development Research Center of the State Council, presented to the then leaders of the Chinese Communist Party a report titled “The designers and developers of the Dawning No.1 computer have seized the opportunity. The leaders are now invited to seize the opportunity to aid in its development.”

Dawning No.1 was researched and developed by the National Intelligent Computer Research and Development Center. Dawning the company, which is affiliated with the Institute of Computer Science of the Chinese Academy of Sciences, was established thereafter.

At the time, the report showed that Dawning No. 1 was very suitable for use on network servers. Its interrupt capabilities and response speed under multi-user working conditions are significantly higher than foreign machines of the same model. It would be able to help launch the CCP’s “Three Gold Projects” by providing an ideal platform for the information management and service system implementation.

The "Three Gold Projects" was proposed by the then Deputy Prime Minister Zhu Rongji when he presided over the State Council meeting in 1993, referring to the Golden Bridge Project, the Gold Card Project and the Golden Gate Project. Among them, “Golden Bridge” refers to the construction of information infrastructure; Golden Gate refers to the digitization of customs declaration tasks; Golden Card refers to various types of card-based application systems based on electronic money application.

According to records, there exists a considerable overlap between the three projects and the Jiang family’s domain of wealth accumulation. For example: Jiang Zemin's eldest son Jiang Mianheng is known as China's "Telecommunications King,” the “Big Brother” of Shanghai—where the Jiang family is based—who served a major post on the Chinese Academy of Sciences, and had been involved in a number of large technology related state-owned enterprises.

On Dec. 10, 2006, Jiang Zemin invited six academics and experts from the software and computer science fields from the Chinese Academy of Sciences to a forum at Zhongnanhai, the leadership compound of the CCP. One of the experts who attended the meeting, Li Guojie, was the chairman of Dawning.

According to an article written by Li Guojie on recollection from the forum, Jiang Zemin said that an independent and controllable software technology system and computer technology system must be established, and additionally, be promoted to the importance of national strategy.

Later, Dawning continued to receive support from the central government through large amounts of research funding, becoming the main player in its sector.

Presently, Jiang Zemin’s eldest son Jiang Mianheng, serves as the vice president of the Chinese Academy of Sciences, and naturally pays special attention to Dawning.

Jiang Mianheng Served as a Consultant to the Supercomputer Expert Committee

During Jiang Mianheng's appointment as deputy dean of the Chinese Academy of Sciences (1999-2011), he often visited Dawning’s affiliate, the Institute of Computer Science at the Chinese Academy of Sciences, and served an honorary position in the field of supercomputing.

For example, at the Chinese Academy of Sciences Supercomputing Expert Committee’s first working meeting in March 2004 the committee hired Jiang Mianheng as a consultant of its expert advisory committee. Among the two expert consultants hired Jiang, who has no relevant academic background, was ranked first.

In November 2004 Jiang Mianheng attended the launch ceremony of the high-performance computer Dawning 4000A Super Server System. The Dawning 4000A system was dubbed a “cooperation between the Academy and the City” as designed by Jiang Mianheng and deputy mayor of Shanghai Yang Xiong, and jointly developed by the Institute of Computing Technology of the Chinese Academy of Sciences, Dawning, and Shanghai Supercomputing Center.

According to a report from the official website of the Chinese Academy of Sciences at the time, before the launching ceremony Jiang Mianheng and members of the Political Bureau of the CCP Central Committee inspected the host room and exhibition hall of the Shanghai Supercomputing Center, and also talked to technical staff.

This model trades science and technology as an asset for funds from government departments and realizing them into cash. It’s a method of exchanging power for funding.

It should be mentioned that Yang Xiong, then vice mayor of Shanghai, entered the Shanghai officialdom in February 2001 under Jiang Mianheng’s arrangement; he was believed to be Jiang Mianheng's close confidant. Earlier when Jiang Mianheng was legal representative of Shanghai Lianhe Investment Co., Ltd., Yang Xiong was the company's first general manager.

Yang Xiong and Jiang were closely linked. According to rumors from Shanghai, Yang Xiong is the public mayor of Shanghai (from the end of 2012 to January 2017) while Jiang Mianheng is the de facto underground mayor, whereas the actual mayor consults with the underground mayor.

In December 2009, Jiang Mianheng once again went to the Institute of Computer Science to consult and research, where he listened to a research and industrialization intelligence report from Dawning’s sister company, Longxin.

Longxin is also a subsidiary company of the Institute of Computer Science of the Chinese Academy of Sciences, and focuses on the research and development of chips, motherboards, and processors; Li Guojie alone serves as the chairman of both Longxin and Dawning.

Jiang Mianheng instructed at the time that "future development must be better integrated with local and enterprises, and promote transfer and transformation of results and industrialization of scale."

People familiar with the matter said what Jiang Mianheng meant is that the Academy of Sciences should work downstream and cooperate with local governments and enterprises to make money.

Jiang Mianheng’s factions inside the Chinese Academy of Sciences Used Official Work to Defraud Funds

During Jiang Mianheng’s tenure, the Chinese Academy of Sciences developed principal projects such as Longxin, the Shuguang high-performance computer, and the Red Flag Linux operating system. Based off of these products, a number of listed companies under the name of the Chinese Academy of Sciences were established.

Presently, only Longxin and Dawning/Shuguang still exist. Zhongke, the company related to Red Flag, had dissolved, but not before incurring some controversy. Prior to its dissolution, certain Zhongke employees collectively went to the Ministry of Industry and Information Technology to salary bargain, which once triggered heated discussion within the industry.

On December 31, 2013, Linueden, a domestic Linux information site user, published an article entitled "Merit and Sin: Written during the Zhongke Red Flag Mansion’s Verge of Collapse," which detailed many indiscretions which occurred at the company.

"Zhongke Red Flag’s descent from the former operating system national team to its current state of dissolution, is not the lack of research and development capabilities, and even less is it fooling the world and usurping a good name. As to the black curtain, this article will not explore it. If interested, you can find familiar insiders to find out for yourselves," the article wrote.

The outside world believes that the "national team" of the Chinese Academy of Sciences, such as Zhongke Red Flag, relies mainly on government subsidies and state funding to survive. It is inseparable from the continuous support of the Communist Party regime. Even if it does not rely on government support, it must be attached to a small number of large clients such as telecom operators and state-owned commercial banks. They are thus not fully weaned and unable to be truly self-functioning.

Taking Dawning as an example, we can also see the extent of dependence on government subsidies. According to financial statements disclosed by the company, in 2018 it received government subsidies of 220 million yuan ($32 million) and national project funds of 6.77 million yuan (about $1 million). So far in 2019, Dawn has received 140 million yuan ($20 million) in government subsidies and national project funds of 180 million yuan ($26 million).

Mainland Media Divulges Jiang Mianheng’s Secret Wealth Accumulation; Authorities Retaliate

The 2014 Western Mining IPO financial investigation must also be mentioned as a black mark related to Jiang Mianheng’s factions inside the Chinese Academy of Sciences.

In 2014, Chinese media 21st Century Network published the article “An Investigation of Mao Xiaobing's Fortune: The Interests Transmission of Western Mining Company Ten Years ago,” which revealed the wealth accumulation of Jiang Mianheng’s factions inside the Chinese Academy of Sciences. Subsequently, Mao, a Standing Committee Member of the CCP Qinghai Provincial Committee and Secretary of the Xining Municipal Party Committee, was sacked.

According to the report, the IPO of the listed company Western Mining engaged in underhanded dealings with Jiang Mianheng controlled Shanghai Lianhe Investment Co. Ltd. and another company with a Chinese Department of Science and Technology background. For example, Beijing Anruisheng Technology Co., Ltd. was established in June 2006. Just 15 days after its establishment, it had acquired 45.87 million shares of Western Mining (accounting for 14 percent of the company's total share capital) from Hubei Hongjun Investment Co., Ltd., becoming the second largest shareholder of Western Mining.

And behind Anruisheng Technology are numerous companies affiliated with the Chinese Academy of Sciences.

“There is no concerted action between them; except for the joint holding of the West Mining Group, there is no other relationship between them,” the report stated. On the contrary, there are shackled, complex connections between them, and among the three there exists joint relationships.

The three companies collectively hold 66 percent of the interests of Western Mining, and appointed five people to the board of directors, who hold absolute control over the shareholding ratio and the board of directors composition. In other words, under the guise of these three Chinese companies, the Qinghai Provincial State-owned Assets Supervision and Administration Commission has become the nominal controller of the Western Mining.

After these events were revealed, Jiang Mianheng was greatly angered.

In September 2014, under the pretext of “Extraordinary News Extortion Crime”, Shanghai police arrested 8 people from 21st Century Network including the editor-in-chief and related management, editors, management personnel, and the heads of two public relations companies. At the time, it was precisely Yang Xiong who held the post of Shanghai Mayor.

Curiously, Shanghai Lianhe Investment Co. Ltd. calls itself a state-owned sole proprietorship company approved by the Shanghai Municipal People's Government on its website. It is affiliated with the Shanghai State-owned Assets Supervision and Administration Commission and was established in September 1994.

However, according to a 21st Century Network reporter, on April 28, 2014 when searching for "Shanghai Lianhe Investment Co., Ltd." on the Shanghai Industrial and Commercial Bureau website, the query results showed that no records were found that met the query conditions.