Desmond Shum's memoir Red Roulette, detailing a fast life deep in the bowels of Chinese politics, is the bombshell China book of 2021.
It tells the story of his rise from an impoverished childhood in Cultural Revolution-era Shanghai to his years of social-climbing among the elite of China, and his ultimate downfall when anti-corruption efforts caught up with him.
I spoke with New York Times reporter Mike Forsythe (@PekingMike) and Lizzi C Lee (@wstv_lizzi), a journalist at the independent Chinese outlet Wall St TV, about their reactions to the book, and what it reveals about the inside world of Chinese business and political power.
Where are Wang Qishan’s bullets?
Jordan Schneider: Desmond Shum and his wife Whitney Duan had the occasion to interact with a handful of pretty prominent folks, Xi Jinping himself included. What are your reflections on his characterizations of some of the most senior folks he was able to interact with in Beijing.
Lizzi Li: In the book, Shum recalled that Wang Qishan revealed in conversations with Duan that China’s system was like a giant game of musical chairs, that even SOEs couldn't survive in the long-term.
Wang’s suggestion to Duan was to get the bullets ready so when it is time to pull the trigger, you already have your ammunition ready.
That was quite a shocking admission for someone in a position as high as Wang.
Jordan Schneider: And it also begs the question, where are Wang’s bullets? Where is his capital sitting, waiting for that moment?
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Lizzi Li: That's actually very true. The disgraced chairman of HNA, Chen Feng, was widely believed to be close to Wang. He is currently under investigation so maybe that will tell us more about Wang’s business connections.
Mike Forsythe: Whenever the New York Times or somebody puts out a story about the wealth of the leaders, there are always rumors going around that some faction gave the reporter a sheaf of documents, as if we can't figure this stuff out for ourselves!
A lot of times you can actually pull out these documents and figure it out. But there's these conspiracy theories in Zhongnanhai. I have been the target of them.
I have had US citizens who are from China and may live on Central Park South call my boss saying this reporter Mike Forsythe is very bad, he obtained documents from an enemy of Xi, and now he's publishing them. You must stop this right away.
I've spent a lot of my time looking for Wang’s money. The Wen family, the Xi family and Jia Qinglin really didn't hide it very well, nor did He Guoqiang. That's four former Politburo Standing Committee members right there who didn't hide their family wealth. Wang is different. Either he doesn't have any or it's really well hidden.
It was very interesting to see his interest in being close to Duan. It was confusing to me whether it was in order to know more about Wen Jiabao. But it was an interesting relationship.
And then the interaction with Xi and Peng Li was also very interesting, as was the disdain that Shum seem to hold towards Xi. You certainly hear the story that he's not the sharpest tack in the drawer.
That's certainly something that's out there, although I don't have any personal or real knowledge to affirm that or anything. But maybe Xi was being quiet because he was being smart.
Jordan Schneider: And he knew that this Shum guy might have a book up his sleeve one day!
Mike Forsythe: Exactly. So it could speak well for Xi's wisdom that he kept his mouth shut around this guy.
Anti-corruption: politics vs cleaning up governance
Jordan Schneider: This book very explicitly characterizes the anti-corruption push by Xi as being as much a political push as a need to clean up governance.
Lizzi Li: The one person I would point to is Chen Xi, who is believed to be a Xi ally. The book had a paragraph about an interaction between Duan and Chen.
Duan was a little worried about where the anti-corruption campaign was going to end up. Chen said not to worry too much because Xi was going to wind it down before the first half of his term ended.
And why was that? Because if it kept going, people would realize that it's not just a few bad apples in the system. The entire system itself is corrupt. So that was Chen’s interpretation of what was going on.
The anti-corruption campaign was not about picking out the bad apples in the system and restoring some sort of glory and purity to the communist party system: it was practical from the very beginning and starting this was political. And ending it was also political and strategic.
The question that I'm asking myself nowadays is whether there’s going to be another round of anti-corruption campaigning.
I do think we see some signs of it, especially in the banking and financial sectors in China.
Mike Forsythe: There's no doubt that Xi, when he came to power in late 2012, was concerned about rampant corruption. It was a little bit out of control.
During Hu Jintao’s leadership, especially his second term, there was so much more money and there was so much that a connected person could do. There were so many IPOs. China was growing like gangbusters. Money was just sloshing around everywhere.
And so the opportunities were rife, but it was really causing a lot of resentment in China and the wealth gap was astronomical. And so there was a genuineness to his concerns about corruption.
But then when you saw the people who were at the top who were taken down, they followed a pattern of being people that were maybe not on Xi’s side.
The book helped push the needle a little bit for me towards more of a political take down than a real anti-corruption drive.
Of course, it is still both, and to have Wang be in charge of it for so many years was also very interesting given his background. But, as far as we know, he’s also a very competent manager and leader.
Billionaire inferiority complexes
Jordan Schneider: You’d think being a billionaire would be more fun. I don't know if this is a function of Shum as a lost soul or just the soul-sucking nature of being a billionaire in China and having to be friends with all these folks.
It wasn't just the subordinates who had to go to too many sauna nights. It was also him who had to hang out with these individuals who he clearly thought were his intellectual and moral inferiors. He talks about going to Italy and not being able to eat croissants because Wen Jiabao’s wife preferred to eat congee and instant noodles.
Lizzi Li: According to one of my well-connected friends, eating congee and instant noodles on foreign trips is actually pretty common among Chinese officials. We saw that on record during the Alaska summit when Yang Jiechi and Wang Yi were caught on camera talking about their lunch. In answering Wang’s question Yang apparently answered that he had had noodles in his hotel room.
Jordan Schneider: But it speaks to a larger theme, which is that Shum saw himself in a class of folks who made it rich in coming from China and getting a Western education and then going back. They saw themselves as sort of evangelists.
What we've seen for the past few years, in particular, is entrepreneurs, not just the foreign ones but also the more successful Chinese ones as well, realizing and having to internalize that they are not actors, they are being acted upon within the CCP system.
Mike Forsythe: Shum and his wife had a lot of money but they were still supplicants in many ways to these elite masters of theirs.
Lizzi Li: One of the more subtle topics of the book is how inferior Shum and Duan actually feel. I think the book talks about how they were like the foot soldiers for the Wen family, slugging it out in the trenches.
But at the same time they can never rely on when Wen Jiabao for direct support, or even from Zhang Peili herself.
Jordan Schneider: It was interesting because it was inferiority but also superiority, right? He was trashing all these red princes saying they never work hard or they can't make their way around a spreadsheet, that they just sell access and drink Maotai. All the while here I am doing the research and understanding the marketplace. I am just trying to do real business.
Investigative reporting in China
Mike Forsythe: I'm very lucky because if Chinese reporters were allowed to do what I do then I would be nowhere. You see that when they are allowed to do things. The example that is clear as a bell is when Zhou Yongkang was in trouble.
There was a green light that went off in late 2013 or early 2014 that it was okay to write about Zhou and they received some excellent Chinese journalism on that. I have not read it yet, but I heard that the Caixin story on HNA is superb.
We Western reporters are beneficiaries of the closed Chinese system. If the Chinese system were open, we would be nothing because it's the Chinese reporter's country, they understand it a hundred times better than we do, and they can just run circles around us. But they can't because of the system and that leaves it open for schmucks like me.
Lizzi Li: According to a friend who worked for Caixin, apparently they had the HNA story ready for quite some time but it was banned from being published. But after Chen Feng and [HNA CEO] Tan Xiangdong were taken away by the Ministry of Public Security, suddenly they got the green light to write about those people.
The story was published basically the day after they got detained by Chinese authorities. And the story was amazing. It had lots of texture, lots of details. They talked with people who had connections to HNA.
I wouldn't be surprised if those people are much more open to talking to a Chinese media outlet rather than a foreign one.
The book also talks about how impactful The New York Times exposés are. Wen Jiabao himself was not fully aware of the extent of his family members’ dealings until The New York Times broke the story.
The article got a really dramatic response from Wen, according to the book. He wanted to file for divorce, relinquish all worldly concerns and convert to Buddhism. Wen only gave up that plan because central party leadership intervened and convinced him not to because that would be harmful for the party.
Jordan Schneider: When it comes to reporting, there is this weird relationship where Beijing only trusts you guys in an odd way. What does that feel like?
Mike Forsythe: It's very crazy reporting on this. It's always shocking that no one has done it already. As a reporter, you always expect a whole bunch of other reporters to be circling around it. It's really a testimony to the fact that the Chinese system is so closed. There are so few reporters in the world that have the freedom to write about this.
Over the years I have been very disappointed in the crop of Hong Kong and Taiwan reporters where, instead of writing real investigative pieces, oftentimes they just write rumor-based stuff. That's not universally true and there have been some very well-researched books and everything but it seems to me that The New York Times reporters, me and David Barboza mostly, have much more in common with Caixin and domestic Chinese reporters than just about anybody else in the world.
I think we think the same way. We're looking at the same companies, the same documents and we want to talk to the same people. And Lizzi is absolutely right: for a Chinese reporter it is much easier for them to talk to the Chinese people who are the keys to the story. And that's what you see in the HNA piece.
Want to hear the full interview with Mike and Lizzi? Check out the ChinaTalk podcast episode here.
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Thanks for reading,
Superb! I look forward to reading Red Roulette!