Original Sin (of the Wealthy) and the Chinese Communist Party

Sinfully rich
Apr 11th 2007
From Economist.com

Behind every great fortune in China may lie a crime

FOR all its avowed atheism, China is quite taken with the Christian idea of original sin. The term has become a fashionable one in the state-controlled media, though used almost exclusively in reference to one group of people: wealthy private entrepreneurs. As more prominent businessmen in China fall foul of the law, a debate is raging about whether any of them acquired their wealth entirely legally.

The usage of “original sin” in this context seems to have originated with a Communist propaganda official called Feng Lun, who has since gone into the property business.

He suggested a few years ago that any early entrepreneur must necessarily have made his “first bucket of gold” through shady transactions, since China’s legal system used to be full of restrictions on private capital that made it all but impossible to get rich otherwise.

He was stating the obvious, but that still gave rise to an argument between liberals who believed that past sins of the rich should be forgiven (as long as they were not too egregious) and conservatives who said that the law was the law. The Communist Party has leaned towards forgiving and forgetting. Private business owners were welcomed into the party in 2002. The constitution was amended two years later to give explicit protection to private property.

But a slew of arrests and criminal investigations late last year put private business back on the defensive. Among the targets was Zhang Rongkun, a Shanghai tycoon alleged to have been involved in a huge corruption scandal that toppled the city’s party-chief. Zhou Weibin, a wealthy paint manufacturer in the southern province of Guangdong, was accused of evading more than $800,000 in tax. Zhang Wenzhong, the chairman and founder of one of China’s biggest supermarket chains, Wumart, stepped down in November.

Liberals renewed their efforts to pass a new law strengthening property rights. It was adopted in March and will take effect in October. Critics grumble that it will protect former officials who bought state assets at give-away prices in rigged privatisations.

EPASome are more equal than others
The Communist Party has been sticking to its capitalist guns. Wang Yang, party chief in the south-western city of Chongqing, said in December that “irregularities” in the formative years of private enterprise were mere “birthmarks”, and perhaps even a source of later vitality. Mr Wang is seen as a rising star in Chinese politics and a possible candidate for prime minister in five years’ time.

Another argument holds that the state itself is not free from original sin. The stain here is a once-rigid separation of urban and rural populations from the early years of Communist rule, an apartheid system which enabled urbanites to live in relative prosperity but trapped peasants in poverty. It is now disintegrating. But, ironically, many of the urban residents who grumble about a growing gap between rich and poor remain deeply uneasy about removing remaining obstacles to rural migration into the cities.

And, where there is sin, there can also be atonement. This week a British businessman in Shanghai called Rupert Hoogewerf publishes his annual list of China’s top philanthropists. He says the rich are giving more and more to worthy causes such as schools and hospitals. Of the country’s 100 richest people, he says, 30 are among the 100 most generous; the biggest philanthropists are all from private companies.

But even generous Chinese prefer to avoid too much scrutiny of their wealth. They give to local projects rather than to state charities, which might ask more questions about the origins of the money. Nor does generosity always ensure a quiet life. Zhang Rongkun, the Shanghai tycoon detained last year, had been China’s 17th-biggest philanthropist, by Mr Hoogewerf’s reckoning. Keeping on the right side of the party is still the best investment.