Head of Shanghai Free Trade Zone Removed

By Frank Fang, Epoch Times
September 16, 2014 10:02 pm Last Updated: September 17, 2014 11:07 am

The chief of a much-vaunted free trade zone established in Shanghai has been ejected from his post as the anniversary of the initiative nears.

Observers of the project are generally in consensus that little has come of the Shanghai Free Trade Zone (FTZ), which at the time received much fanfare in the state press as a leading initiative for reform-oriented economic policies. A year later, it appears that the obstacles posed by local political forces have hampered progress and frustrated the top leadership.

The official news agency, Xinhua, announced that Dai Haibo, the head of the FTZ, no longer held the position on Sept. 15.

Dai, as well as being the deputy secretary of the Shanghai People’s Municipal Government, was also deputy director of the FTZ’s committee, and also its Party secretary, the post with the most power.

Chinese media reports said that Dai’s ex-wife had reported him to anti-corruption authorities, who then began looking into his alleged accumulation of real estate—an endeavor that his civil servant salary would hardly have afforded.

The dismissal also suggests an attempt by the Communist Party to reinvigorate efforts in the FTZ, which is being set up in the back yard of the political network most indisposed to the initiatives of Party leader Xi Jinping and his premier, Li Keqiang: that of former Party leader Jiang Zemin.

Jiang was Party chief from 1989 to 2002, but retained outsize influence for the next decade. He has for decades called Shanghai his de facto base of operations. Officials and family members loyal to him still retain strong influence in the city.

Dai had close ties with Shanghai Party Chief Han Zheng, who was long friendly with Jiang.

Duowei News, an overseas media outlet that sometimes seems to speak for the Chinese regime, reported that, in dealing with Dai, Party authorities dispatched head of the Central Commission for Discipline Inspection, Wang Qishan, to Shanghai personally.

Mr. Xu, a Shanghai resident, captured the feeling on the street in a telephone interview, saying, “It is very significant that Wang Qishan personally came here. It means that there are problems that require Wang’s personal attention—the level of the tiger must be very high. This is related to Jiang and his two sons.”

The two sons are Jiang Mianheng and Jiang Miankang; the former has held prominent political positions, while the latter has tended to stay out of the spotlight.

The FTZ was supposed to be a testing space for economic reform in China, allowing better conditions for foreign investors and importers, and removing bureaucratic barriers to establishing new businesses, for example. Before the FTZ was established, it was even suggested that uncensored Internet access would be allowed inside the zone (though this did not turn out to be the case.)

Economic reform in China can often infringe on entrenched political interests, however.

The state-funded media outlet Peng Pai on Sept. 10 published a story announcing that Sun Rise Duty Free, controlled by Boyu Capital, the private equity firm set up by the grandson of Jiang Zemin, Alvin Jiang, was going to open a store inside the Shanghai FTZ. This report was later deleted, suggesting that it carried unwelcome political connotations. 

“The Shanghai FTZ is about the heights of reform—it’s not a political basin,” said Hua Po, an independent political commentator based in Beijing.

The FTZ was known from the beginning to be a priority for Li Keqiang, the premier, who made a series of high-profile public appearances and speeches about its import.

Hua said that the central Party leadership has been sending signals to “try to put pressure on them—force them to obey.”

“They’re saying, ‘We know what you’re doing. Don’t force us to bring down your son and grandson,'” Hua Po said.