Families of China’s leader Xi Jinping and a rival faction led by former leader Jiang Zemin have been involved in business conflicts, leading to speculation that there are warring factions within the CCP.
As a one-party state, the Chinese Communist Party (CCP) monopolizes power in China. The leadership, however, is not monolithic.
After taking office, Xi sought to consolidate his power in the party, avoiding being hamstrung by factional politics, like his predecessor Hu Jintao was. In Xi’s anti-corruption campaign, many high-ranking officials associated with the Jiang Zemin faction have been arrested. Even though Jiang is now retired, he remains a force behind the scenes.
Xi has seemingly gained the upper hand over the Jiang faction, as the Jiang faction seems powerless to stop Xi amending China’s constitution.
However, a halt to Ant Group’s IPO indicates that conflicts continue in the business world, one U.S.-based political commentator said.
Beneficiaries Behind Ant Group
Xi scuttled Ant Group’s $35 billion initial public offering two days before the Hong Kong and Shanghai dual debut was scheduled in November 2020, because he believed the real beneficiary may be the Jiang faction.
The ownership structure of Ant is complex, revealed firstly by China’s state-run media Caixin on Aug. 27, 2020.
One of the investors is Boyu Capital, a private company founded in part by Alvin Jiang Zhicheng. He is the oldest grandson of the former regime leader Jiang Zemin. Boyu holds the shares through a private equity firm, Beijing Jingguan Investment Center.
Another shareholder linked to Jiang’s network is Li Botan, the son-in-law of the former head of a top-level Communist Party advisory committee, Jia Qinglin. Li invested in Ant through Beijing Zhaode Investment Group.
This year, Alvin Jiang’s Boyu Capital was moved from Hong Kong to Singapore and Shanghai according to The Wall Street Journal on Feb. 22.
The transition of the business to Hong Kong started in late 2019, coinciding with the time when Xi tightened control over Hong Kong. Key executives of the Hong Kong base have moved to its Singapore office, including the CFO Vincent Fok.
Shanghai is the base of the Jiang faction, which is also known as the Shanghai Gang, because most of its members hail from Shanghai and the surrounding area.
Commentator Li Linyi interpreted the suspension of Ant’s IPO and the transfer of Boyu as a sign that the factional conflicts have been transferred to the economy as Xi tries to bring the curtain down on Jiang’s era.
Xi’s High Roller Cousin
On Feb. 9, the WSJ reported that Australia’s largest casino operator Crown Resort had been found unfit to run its Sydney casino.
Crown has been dogged for years by allegations of illegal activity, such as money laundering and junkets bringing in high spending gamblers from Asia.
Chief among its high rollers is Australian citizen Ming Chai, one of Xi’s cousins.
He was under a broad investigation as part of broader organized crime and money laundering probes, the WSJ reported.
Chai is not the main target of the investigation, according to Australian officials. His ties to Tom Zhou, the millionaire Crown junket operator, were the focus of investigators. Both men were aboard when Australian federal agents searched a private jet with high-stakes gamblers in 2016.
Officials also looked at the source of Chai’s money.
Chai spent $39 million over 18 months starting in June 2012. The next year, according to gambling turnover, he was listed among the top 50 customers. He was described as a “VVIP,” a very, very important person in a trove of thousands of files leaked from Crown.
Chai’s father is a former high-ranking chief of the Chinese People’s Armed Police service. Before Chai become an Australian citizen, he held a senior position in ZTE, the telecommunications company closely linked to CCP, which was subject to bans by the United States over national security concerns.
A month later, the WSJ report’s co-author, Wong Chun Han, was expelled from mainland China.