Zhou Jiangyong, a former party secretary in China’s communist regime, pleaded guilty in an April 27 court hearing to crimes of collecting nearly 200 million yuan ($28.91 million) in bribes over some 20 years in his official roles. The verdict is set to be announced soon.
Sacked in 2021 from his position as secretary of the Hangzhou Municipal Party Committee, Zhou stands accused of “colluding with capital investors,” trading power for personal interest, family corruption, and illegal intervention in the economy, judiciary, and law enforcement.
Zhou has long had a close association with Jack Ma, the founder of Chinese e-commerce giant Alibaba. Ma once noted the significance of Alibaba’s hometown of Hangzhou—both for him on a personal level and for his business.
More significantly, however, Zhou has also been listed by the WOIPFG (World Organization to Investigate the Persecution of Falun Gong) for his involvement in the persecution of the peaceful practice.
Falun Gong is a cultivation method for mind and body that promotes living in accordance with the universal principles of truthfulness, compassion, and tolerance, and is rooted in ancient Chinese culture and history. The former leader of the Chinese Communist Party (CCP), Jiang Zemin, came to consider the spiritual practice’s popularity as a threat to the communist regime’s atheist ideology. He issued an order to ban Falun Gong in 1999, leading to the group’s brutal persecution—which has resulted in practitioners being imprisoned, tortured, and even killed for their organs across China.
Family Corruption
Zhou is also alleged to have assisted in his younger brother’s business expansion, which Alibaba’s Ant Group had a stake in.According to state media reports, the younger Zhou’s company won contracts to build mobile subway payment systems in the coastal hubs of Ningbo and Wenzhou when his brother was the party secretary of those cities.
In 2016, the younger Zhou launched Youcheng United (Ningbo) Information Technology Development Co., which focuses on big data internet systems and payment apps for China’s metro and subway systems.
This family connection allowed the younger Zhou’s investors to acquire cheap land and enjoy preferential policies. In return, he is alleged to have charged them higher prices for their investments.
Ant Group’s Denial
Ant Group’s subsidiary, Shanghai Yunxin Venture Capital Management Co., bought a 14.3 percent stake and a board seat in Youcheng United in March 2019.On Sept. 7, 2019, Zhou Jiangyong personally awarded Jack Ma the honor of “Meritorious Hangzhou Person.” A few days later, Hangzhou’s municipal government signed a comprehensive strategic cooperation agreement with Alibaba, and Zhou promised that he would unswervingly support the online retailer’s development.
In November 2019, Shanghai Yunxin bought a 13.5 percent stake in another Hangzhou-based online subway payment provider owned by the younger Zhou.
In less than a year, Ant Group won an auction for a construction site in Hangzhou for 5,194 yuan ($819) per square meter as the only qualified bidder, while the average home prices in the neighborhood exceeded 45,000 yuan ($7,100) per square meter, according to a Financial Times report.
When Zhou was sacked in 2021, it was rumored that the Zhou brothers had bought shares for around 500 million yuan ($72.34 million) before Ant’s intended initial public offering in 2020. When the listing was suspended, a refund of 520 million yuan ($75.23 million) was made.
However, Ant Group immediately issued a notice denying any wrongdoing associated with the activities of buying shares and seeking the IPO refund.
Graft
Cultivating good connections to the authorities has long been common practice for many of China’s private businesses that hope to succeed under the ruling Communist regime.It’s very much like how the younger Zhou garnered so much business in Hangzhou, as his elder brother boasted on state TV: “He won the business because I was a government official.”
Ma also showed his gratitude to Zhou when he won his “meritorious person” award. “Without Hangzhou, there would be no Jack Ma, and there would be no Alibaba,” he said.
According to Chinese state media, Zhou was the first official to date to be sacked on charges of “colluding with capital investors.”
