CCP Censors Chinese Media’s Coverage of Purged Justice Minister’s Ties With Evergrande CEO

How the CCP leader copes with the Red families involved in the real estate crisis is a thorny issue: Analysis

A man walks past a map of China which shows Evergrande commercial complexes at a partially operating Evergrande commercial complex in Beijing on January 29, 2024. Greg Baker/AFP via Getty Images

An article by a Chinese financial news outlet recently linked the case of the fallen Justice Minister to the chairman of the debt-ridden property giant Evergrande, but the article was quickly removed. Political analysts suggest the ongoing real estate crisis is a thorn in the Chinese Communist Party’s (CCP) core interests.

Tang Yijun, the former Minister of Justice and incumbent chairman of the Jiangxi Political Consultative Conference, had been investigated on suspicion of “serious disciplinary violations,” according to an announcement of CCP’s top anti-corruption body on April 2.

On April 4, Caixin posted an article suggesting Tang Yijun may be related to the case of Xu Jiayin, founder and chairman of property giant Evergrande, who was arrested in September 2023 for alleged illicit financial dealings with numerous high-ranking officials. The bankrupt Evergrande is the world’s most indebted developer and a landmark of China’s real estate crisis.

The article was quickly deleted, but it had already circulated and been archived outside of China.

Founded by Hu Shuli, one of the CCP patriarch’s princelings, Caixin often publishes articles with bold views or sensitive information representing the political stance and interests of the party’s elite class, which are not always in line with that of the current party leader, Xi Jinping.

Nikkei Asia’s editorial writer Katsuji Nakazawa wrote that “Tang’s case seems slightly more serious as it appears to be related in some way to the Evergrande crisis.”

The recent purge of the former Chinese justice minister, according to Mr. Nakazawa, might offer “a keyhole glimpse into the Xi Jinping regime regarding the country’s deepening property crisis. It might even be a clue that the crisis is impacting Xi’s powerful faction of political aides.”

Tang Yijun and Xu Jiayin

According to the report, a person familiar with the matter revealed that Mr. Tang was interrupted by a call from China’s anti-graft agency while holding an internal meeting at the Jiangxi Provincial Committee of the Chinese People’s Political Consultative Conference on March 28. He was immediately taken away to Beijing.

The 63-year-old is a native of Shandong. He served for 12 years in Ningbo, Zhejiang Province, before being transferred to the governor of Liaoning Province. In April 2020, he was promoted to the Minister of Justice, replacing his predecessor, Fu Zhenghua. In January 2023, he became chairman of the Jiangxi Political Consultative Conference.

Caixin’s report said that Mr. Tang’s case fell mainly during his tenure in charge of Liaoning and Ningbo.

According to the article, during his tenure in Ningbo, Mr. Tang condoned his family’s meddling in engineering and construction, which caused resentment among the locals. From October 2017 to March 2020, he served as deputy secretary of the Liaoning Provincial Party Committee, acting governor, and governor of Liaoning Province, and his cooperation with Evergrande became closer.

(C) Evergrande's president Xu Jiayin, also known as Hui Ka Yan in Cantonese, attending a meeting in Wuhan, in China's central Hubei province on June 5, 2017. STR/AFP via Getty Images

On June 15, 2019, the authority of Shenyang, the capital of Liaoning Province, and Evergrande Group signed a strategic cooperation agreement. Mr. Tang met with Mr. Xu and attended the signing ceremony together. According to the agreement, Evergrande Group would invest 120 billion yuan (approximately $17.4 billion) in various fields, such as real estate and new energy vehicles.

After Evergrande defaulted on astronomical debts, Shenyang authorities intervened with a so-called “guaranteed delivery,” attempting to save Evergrande through government credits.

The article also claims that photos of Mr. Tang shaking hands with Mr. Xu, the chairman of Evergrande, during his tenure in Liaoning province, were repeatedly uploaded to Chinese social media platforms and that some of the images have been deleted.

During Mr. Tang’s two-and-a-half years as governor of Liaoning, he helped Evergrande take a controlling stake in Shengjing Bank, China’s ninth-largest city commercial bank and the largest in the northeastern region.

A source in the ministry told Caixin that during Mr. Tang’s two-and-a-half-year grip on Liaoning, he not only allegedly aided Mr. Xu in obtaining a controlling stake in Shengjing Bank, China’s ninth-largest city commercial bank and the largest in the northeastern region but also abandoned his necessary supervisory duties over the bank and Evergrande, “causing huge bad debts in banks.” According to the investigation by the regulatory authorities, the size of the funds transferred by Shengjing Bank to Evergrande Group through direct or indirect channels exceeded hundreds of billions of yuan, according to Caixin.

As of June 30, 2023, Evergrande’s total debt reached 2.39 trillion yuan (about $334.3 billion). Evergrande left behind as many as 1.62 million sets of unfinished buildings, which were estimated to involve as many as 6 million property owners.

Economic Strategies of Several Generations of CCP Leaders

U.S.-based current affairs analyst Tang Jingyuan told The Epoch Times on April 18 that Mr. Tang Yijun would not be the only high-ranking official involved in the Evergrande case, let alone the highest-ranking official, and that there must be cadres of higher rank than him involved.

“To Xi Jinping, the Evergrande disaster is not just the disaster of a real estate company, but the end of the high-leverage model of China’s real estate industry, which has driven the country’s rapid economic expansion promoted by several former CCP leaders ranging from Deng Xiaoping to Jiang Zemin to Hu Jintao, with a large amount of money privately divided among the CCP’s red families of powerbrokers.” Mr. Tang Jingyuan said.

“In other words, the Evergrande case is not just a corruption case for Xi Jinping, nor is it just a matter of arresting a few corrupt officials. It is about what Xi has been doing since the 19th National Congress, that is, he is paving his way to reject Deng Xiaoping’s line and establish his economic line.”

“Xi affirmed that Deng’s ‘economic reform’ policy has long since run its course and poses a direct threat to the survival of the CCP,” said Mr. Tang Jingyuan. The Evergrande case reflects the struggle of economic lines between Deng and Xi, and how Xi deals with the red families involved in the real estate case is likely to be very tricky and sensitive.

Deleted Article May Be Part of CCP’s Internal Struggle: Analyst

Mr. Tang Jingyuan believes that Caixin covered the report about the fall of the former Minister of Justice as a sign of the CCP’s internal power struggle.

During the first five years of Xi’s intensive anti-corruption campaign, Caixin published several articles exposing the inside story of corrupt officials’ investigations and punishments, but these articles were soon deleted, as observed by Mr. Tang Jingyuan. He surmised that Xi thinks those articles erode the party’s image.

Offering another layer of perspective, Mr. Tang Jingyuan pointed out that for a provincial official like Mr. Tang Yijun, he could not have absorbed such a large amount of money on his own and that he was probably just an agent in “the front office,” while behind the scenes there may have been higher-level figures manipulate the case.

For example, Mr. Tang Yijun has close ties with Xi’s ‘New Zhijiang Army’ or Zhejiang fraction. Those loyal to Xi are, therefore, promoted to prominent political posts in central party and state organs. “In this case, if the Caixin article is allowed to circulate online, it would be detrimental to Xi himself and a particular crony whom he trusts.”

So far, the CCP has not yet made a final statement on Mr. Tang Yijun’s case. “From this perspective, Caixin’s purpose of publishing this article can be seen as part of the party’s infighting,” Mr. Tang Jingyuan concluded.

Xin Ning contributed to this article.