Out of Mao's Shadow: The Struggle for the Soul of a New China (23 page)

W
HEN THE WORKERS
broke ground on the Jinbao Avenue project, Chen Lihua was already something of a legend in Beijing. Heavyset, with big glasses and a bad perm, she looked like a frumpy aunt who had won the lottery, and residents casually referred to her as the
fupo,
or the Rich Lady. At fifty-nine, she presided over a vast real estate empire, held prominent positions on government advisory bodies, and lived in a ten-story mansion behind a museum she built on the city’s east side. She was one of only two women to make
Forbes
magazine’s list of China’s richest people in 2001, ranking sixth with assets of more than $550 million. State media fawned over her rags-to-riches story and charitable activities, and the public tittered over her marriage to a television star ten years younger than her. Her publicists seemed to work overtime planting sappy features about the couple’s romance in the press, perhaps to counter the gossip that he had married her for the money. Almost every time I mentioned Chen’s name in conversation, people brought up her marriage first and discussed her wealth later. But it was her wealth, and how she acquired it, that interested me.

There is an assumption in the West that the growing ranks of private entrepreneurs in China represent a force for democratic change in the country. These businesspeople, like businesspeople around the world, prefer a political environment conducive to commerce, and a democratic system serves their interests better than an authoritarian one, or so the argument goes. They favor the predictability of the rule of law over the arbitrary rule of party bosses. They want impartial courts that can enforce contracts, resolve disputes, and protect private property rights. They are frustrated with the government’s control of the banks, with their inability to influence economic policy, with the unfair advantages that party officials enjoy in the market. Some of China’s new capitalists fit this description. In 2003, for example, a prominent agricultural tycoon named Sun Dawu was jailed for five months after speaking out against the party. But those counting on the capitalists to lead the charge for democratization in China are likely to be disappointed. China’s emerging business elite is a diverse and disparate bunch, and for every entrepreneur who would embrace political reform, there are others who support and depend on the authoritarian system, who believe in one-party rule and owe their success to it. Chen Lihua fits in this latter category, and her story is a reminder that those with the most wealth—and thus the most resources to devote either to maintaining the status quo or promoting change—are also the most likely to be in bed with the party.

Chen’s climb into the ranks of the richest of the rich was an exaggerated illustration of how capitalism often worked in China. After living through decades of political turmoil, ambitious men and women like her saw the transition from socialism to capitalism as a once-in-a-lifetime opportunity to make a fortune. New markets were opening every day in the 1980s and ’90s as the old planned economy was dismantled, and these entrepreneurs realized that the trick was getting access to these markets first—by obtaining licenses and permits, or special privileges such as the right to buy commodities at subsidized prices, to purchase the assets of a failing state factory, or to build on a prime piece of real estate. The most successful businesspeople, many of them former officials or the children of officials, understood that the best way to secure such advantages was by winning the favor of party bureaucrats. What robber barons like Chen did wasn’t necessarily illegal. They bent the rules at a time when the rules were changing quickly, and the Chinese called their crimes “original sins.” When the political winds shifted, and their patrons in the party fell from power, some of these new millionaires were prosecuted and ended up in prison on corruption charges. Others, like Chen, managed to outlast the politicians.

Chen Lihua’s story has been told many times in the state media, but these tellings are riddled with embellishments and omissions. She is often portrayed as a descendant of Manchu nobility from the Qing Dynasty, or even a distant relative of the last emperor, and she is said to have grown up near the grounds of the Summer Palace. But there is a whiff of mythmaking in these accounts, and Chen says her family destroyed the documents proving her bloodline during the Cultural Revolution to escape persecution, making it impossible to confirm her claim to nobility. Even if true, though, the circumstances of Chen’s childhood and early life remain a mystery. The Qing court fell in 1911, three decades before she was born, and none of the published stories about her make any mention of what her parents did after the fall of the dynasty, or how they made a living after the Communists took power. When I first met Chen and asked about this, she repeated that her father had been a Manchu nobleman, and when I pressed her further, she said only that he had an “ordinary job” and declined to elaborate.

There is little doubt, however, that Chen struggled to make ends meet and suffered during the Cultural Revolution because of her family background. She was in her twenties at the time, a young mother who worked as a seamstress and was married to a civil servant. A neighbor told me that Red Guards paraded her through the streets with a placard vilifying her as a woman of loose morals, a common charge leveled against female targets of the political campaigns. None of this appears in the official accounts of Chen’s life. Instead, when Chen is quoted talking about the Cultural Revolution, she is usually telling a story about her family’s antique furniture. Red Guards seized or destroyed most of it, but she rescued a large, intricate wardrobe made of precious red sandalwood, and she dismantled it and buried it near a pigsty in the countryside. A decade later, after the end of the Cultural Revolution, she returned to the sty, dug up the wardrobe, and reassembled it. To her surprise, it remained in perfect condition. It was then, the story goes, that Chen developed a passion for sandalwood and embarked on her first business venture, running a workshop that restored antique furniture.

The authorized accounts of Chen’s life are vague about how she made her first fortune. In the late 1970s and early ’80s, she is said to have traveled several times to Southeast Asia in search of supplies of sandalwood, which derives from a rare and endangered species of tree. In several state media reports, she presents herself as a kind of swashbuckling female Indiana Jones, traveling through jungles on donkeys, getting the better of snakes, surviving a vicious attack by poisonous bees. But there are glaring inconsistencies among the reports, as if Chen were trying out different versions of her life story to see which she liked best. In the early 1980s, Chen somehow succeeded in immigrating to and establishing residency in Hong Kong. There are vague references in state media to Chen engaging in “international trade” and making money on a real estate deal there, but no details, and then the official story fast-forwards to 1988, when she returned to Beijing a wealthy woman. At some point along the way, she divorced her first husband, and in 1990 she married the television star.

Behind these ambiguous official accounts, though, was the tale of a sharp businesswoman who recognized early the quickest way to strike it rich in China’s freewheeling, transitional economy—ingratiating oneself with party officials. Not long after the Cultural Revolution, according to the explanation I heard most often from people who knew her then, Chen befriended a neighbor who was a party official, and she took care of his daughter when the government sent him to work in Hong Kong. She used that first relationship to move to Hong Kong herself, and later to build a network of connections with increasingly higher-ranked party bureaucrats in Beijing. How she maneuvered herself into such good standing with the party apparatus remains one of the mysteries of her success, but by the late 1980s she had good enough connections to gain access to a state furniture factory on the city’s south side that had a warehouse full of antique furniture seized by Red Guards during the Cultural Revolution. According to employees at the factory, Chen visited regularly and was allowed to purchase antiques at a huge discount. These were valuable Qing and Ming dynasty pieces, many of them banned from export under Chinese laws that designated them national treasures. But the factory workers said Chen used her party ties and arranged for much of what she purchased to be exported to Hong Kong. On her visits, the workers said, Chen was always generous with gifts for the warehouse employees, and she once purchased a Soviet-made car for the factory manager. A few years later, the manager was imprisoned on corruption charges. Chen faced no charges. Investigators told workers that she enjoyed the protection of senior party officials.

Chen turned to real estate in the late 1980s, but her inaugural project wasn’t an apartment complex, or an office building, or a shopping mall. Instead, she built a private club—the first of its kind in Beijing—and then used it to woo the capital’s political and business elite. The ten-story $46 million building boasted fine restaurants, plush lounges with sandalwood furniture, tennis and squash courts, a swimming pool, even a bowling alley, and when it opened in 1995 it quickly became the venue of choice for the city’s new rich to hobnob with the party’s power brokers. Chen built the Chang’an Club not far from Tiananmen Square and the Forbidden City, on the Avenue of Eternal Peace, the boulevard that runs through the heart of Beijing. The state still dominated the real estate industry at the time, and only the most connected private developers could secure the right to build on such a coveted parcel of government land. When I asked her about the project, Chen told me she spent six years lobbying officials for permission to begin construction, and she hinted at her relationship with city leaders. After one sleepless night worrying about her investment, she recalled, she walked to the site at 2
A.M.
, picked up a shovel, and began breaking the ground herself. “It was a chilly evening, with a strong wind,” she said. “Someone reported me to Vice Mayor Zhang Baifa, and he rushed to the site. When he saw what I was doing, he was worried about me, and pleaded with me to give him the shovel and go inside. He was moved, and he said he would take care of the permits.”

The club was a shrewd investment. Even before it was built, Chen recalled, she recognized its potential as “a gold mine.” Nearly two decades after Mao’s death, the private sector was flourishing and a new class of businessmen had emerged, pragmatic wheeler-dealers who understood the value of access to party officials and were not shy about spending money to impress them. To them, the Chang’an Club was the perfect place to curry favor with a party cadre and strike a deal, and they paid handsomely to use it. But if the club generated a good income for Chen, that was nothing compared with the intangible benefits that flowed from her status as the proprietor. The club gave her a stage to sell herself, an excuse to meet everyone who came in, a chance to hear about every deal going down, a platform to court even the most senior of party officials. It put her closer to the center of the action than any former seamstress might have imagined possible. The vice mayor may have helped her build the club, but Chen was soon linked to Politburo members such as the party chief of Beijing, Chen Xitong, and even a member of the all-powerful Politburo Standing Committee, Li Ruihuan, who was photographed playing tennis at the club with the prime minister of Singapore.

Chen put the headquarters of her company, the Fu Wah International Group, on an upper floor of the Chang’an Club. She served as the chairman of the board, her son as the chief executive officer and her daughter as a board member. In 1999, the company opened its first residential complex, the luxury Lee Garden Service Apartments. Beijing is divided into sixteen districts, each with its own government, and both the club and the apartments were built in Dongcheng District, the downtown area east of Tiananmen Square with a population of more than half a million. Chen cultivated particularly close relationships with the officials in Dongcheng. Some even resigned and joined her company. Such ties at the local level of the party bureaucracy were as important to Chen’s success as her access to senior party leaders, and they were critical to her most ambitious project, Jinbao Avenue, which also ran through Dongcheng District. Chen couldn’t just pick up her phone and call a Politburo member, but she didn’t need to. As long as lower-level officials knew she had clout at the top, she could usually count on getting her way.

On occasion, though, Chen’s ventures ran into obstacles. In 2004, as her company was clearing another old neighborhood in Dongcheng District to make way for a new development, a city agency refused to transfer the land-use rights to her. Residents had been complaining about the demolition of their homes, their case had made headlines in the foreign media, and someone in the bureaucracy decided it would be wise to hold off on the project, at least temporarily. Chen wrote to Li Ruihuan, her contact who had served on the Politburo Standing Committee and was thus one of the most powerful men in the country. A few years later, I saw a copy of the letter. It was handwritten on plain white paper, and instead of letterhead, Chen wrote her company’s name at the top of the page. The text itself was fairly formal, beginning with an expression of gratitude for Li’s support and help over the years, then laying out Chen’s complaint in a businesslike tone. She emphasized that she had followed all the procedures and met all the regulations for the land transfer to be approved, and presented the decision to delay the transfer as inexplicable: