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CHINA’S VERSION OF NIGHT OF THE LONG KNIVES

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CHINA’S OWN SPECIAL VERSION OF NIGHT OF THE LONG KNIVES 

“Pursuing reform in the face of vested interests is akin to stirring the soul” – Li Keqiang, Premier of China

 

“We must eliminate evil members of the herd.” — Xi Jinping, President of China

Between June 30 and July 2 of 1934, the Nazis carried out a series of political murders in what was called the Night of the Long Knives. A version of this large-scale purge is underway in China right now, starting with this week’s trial of Liu Han. Liu is accused of murder, among other crimes, and of being part of a “Triad” gang along with 35 others.

The trial and other investigations and arrests is being fully covered by the Chinese state media. This article from the English edition of the South China Morning Post lays out in strong language the case against Liu Han. President Xi Jinping’s crackdown is also being promoted through social media. It is effectively using tools like Weibo, China’s equivalent of Twitter, and WeChat to rally public opinion around the party’s anti-graft efforts.

I will be writing more about China’s new leaders in WinterActionables in the near future. For now, it suffices to say that China’s new Premier Li Keqiang is as close to a choir boy as this system can muster. Xi himself has managed to avoid serious corruption claims in his career. Therefore, these new leaders apparently feel the time has come to lay out China’s dirty linen for all to see, especially that of political opponents and specifically the “Shanghai Gang.”

I expect this will also involve the recovery or claw-backs of loot scammed from auntie’s wealth management products and seizures (as opposed to bailouts) as restitution of the ill-gotten gains of the kleptocrats — or at least those not well connected with the new Xi regime.

Xi Jinping is also going to personally chair and oversee the shadow banking reform committee. Normally this is chaired by the Premier or a more junior official, so it seems a clear signal that Beijing intends to get its shadow bank lending under direct control. Li Keqiang, in a speech in March, indicated a willingness to allow “selective” corporate defaults, no doubt as an instrument to rein in state enterprises, control power, implement reform and settle scores. Unless it fits one of the four following categories, stimulus and bailouts would be small.

- Building the social safety net
- Environmental projects
- Social housing, hospitals, schools, water treatment, urban public transport
- Agricultural modernization

The new leadership’s purge is largely directed at the power players called the Shanghai Gang. This is an element of Jiang Zemin’s old power base. Jiang was President of China between 1993 and 2003. Jiang, who is now 87 and was generally considered a stooge and flower pot even when in office, is almost begging for mercy now. Chinese social media, however, is relentless in calling for his head and the end to the Shanghai Gang. This report from China’s version of “alternative media” NTDTV.com is illustrative. It passes the censors mocking Zemin and accuses him of being involved in “live organ harvesting” and of “hanging out with Henry Kissinger.”

Zhou Yongkang, corrupt Shanghai Gang Leader

The Liu Han trial is the next salvo in the offensive that is really directed at the titular head of the highly corrupt Shanghai Gang, Zhou Yongkang. The Xi Jinping power structure emanates from a group called the “Chinese Youth League Gang.” Premier Li Keqiang headed the League from 1993 to 1998 and is drawing his associates into the power structure. This structure has been rapidly replacing the prior security and police forces with an aggressive anti-corruption cadre since coming to power in 2013. Li has urged auditors to be “brave in thoroughly probing violations [of the law].”

Zhou Yongkang is now retired, primarily as the fallout from his association with now-jailed Bo Xilai. There are claims he didn’t go without a fight and tried to have Xi assassinated (several times) during the party Congress when the successor was being selected. From 2007 to 2012 Zhou headed the powerful Politics and Law Commission, which oversaw all courts and police forces in China. As such, he was in a position to cover up all kinds of kleptocrat criminality in China. He facilitated a “strike black” campaign in Chongqing with now-convicted ally, Bo Xilai. This was little more than Mafia-style shakedowns of private business people. Zhou was also one of only nine members on the Politburo Standing Committee.

Zhou is under investigation and the net is closing rapidly. He is joining at least three of his former senior security officials, including two vice-ministers and the man who oversaw Beijing’s internal listening apparatus. A total of $14.6 billlion in assets have also been seized so far.

It sounds like the “court of public opinion” has ruled. One of China’s main newspapers put it succinctly:

But doubts about Zhou’s fate have now been dispelled by a recent flurry of uncensored news stories in the Chinese media that revealed shocking details of corruption involving Zhou’s family and former subordinates. It has been reported that the authorities recently searched the homes of Zhou’s two brothers. Though these stories have yet to implicate Zhou directly, it will only be a matter of time before the Chinese government officially charges him with corruption.

“Whispered reports are even more lurid. Zhou is said to have plotted to murder his first wife, and there are rumours that at the height of last year’s scandal involving disgraced former Chongqing party boss Bo Xilai , he attempted to assassinate Xi in the leadership compound at Zhongnanhai.

“Based on what the Chinese press has disclosed thus far, it is clear that the Zhou case will be the ugliest and most sensational scandal involving a senior party leader that the country has ever seen. It will make Bo, an ally of Zhou and a former Politburo member who was sentenced to life imprisonment for corruption, look like a petty thief.”

Nationwide, hundreds of thousands of people must have been caught up in the dragnet, based on the 11,879 people investigated in Shanxi Province alone. The heads of Chengdu Bank and a local investment corporation have been detained. In his long career, Zhou has headed or helped promote all of China’s big oilfields – Daqing, Liaohe and Shengli — and the gasfields of Tarim and Sichuan basins. At least six senior executives at oil company CNPC, including Jiang Jiemin, former CNPC head and head of the state assets watchdog, have been detained since August 2013.

?Shen Dingcheng, the party chief and vice-president of PetroChina International, disappeared shortly before the Lunar New Year holiday, the China Business Journal reported, citing an anonymous source. The Journal also highlighted Shen’s links with three other former secretaries to Zhou and even described Shen as being part of a “gang of four” secretaries. The other former secretaries are ex-CNPC deputy general manager Li Hualin; former deputy Hainan; governor Ji Wenlin; and the former chairman of the Federation of Literary and Art Circles in Sichuan, Guo Yongxiang.

Several members of Zhou’s former inner circle have also been rumored to be under investigation or have already been detained, including Sichuan officials Li Chuncheng and Li Chongxi.

Although not yet put directly in the Night of the Long Knives list, there is enough of a purge of the military underway to keep those actors in line and wary. Xi compares it to going after tigers and flies. These are indeed scary times for the corrupt kleptocrats of China.

 

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Mon, 04/07/2014 - 17:17 | 4633564 assistedliving
assistedliving's picture

lets see

Bo XiLai vs Jon Corzine

Lui Han vs A. McClendon

YongKang vs Angelo Mozillo

JiangJemin vs Bob Diamond

and on and on

gee, those Chinese are better Capitalists and now better law enforcement?  WTF???

Mon, 04/07/2014 - 15:50 | 4633285 NEOSERF
NEOSERF's picture

China is going through the same thing the US went through in the 50s...expect them to start a war to take attention off matters at home.

Mon, 04/07/2014 - 15:14 | 4633148 GreatUncle
GreatUncle's picture

Chinese sheep and wolves akin to western sheep and wolves.

 

Still sheep and woolves, privilige over ordinary people and now only a fight to ensure one pig over another has their snout in the trough first :-) Obama, Putin, or Xi Jinping I would tell any to f^&k off the time for talkjng has passed.

Mon, 04/07/2014 - 11:23 | 4632356 Hail Spode
Hail Spode's picture

Hanging out with Henry Kissenger?  That is serious.  

Mon, 04/07/2014 - 14:37 | 4633054 logicalman
logicalman's picture

Now, if we could just get rid of that pesky 'out'......

Mon, 04/07/2014 - 10:10 | 4631996 CheapBastard
CheapBastard's picture

On $600 a month salary some of those gubmint officials can sure leverage up and by a dozen or so million dollar houses. I'm surprised Newsweek doesn not showcase them on the cover as "financial geniuses."

How do they do it?

Mon, 04/07/2014 - 08:38 | 4631775 aleph0
aleph0's picture

Read Lords of the [Pacific] Rim ....

The Chinese Govt. Elite in the north - for thousands of years - regarded the "Economy" and it's wealthy  as just cattle to be harvested .. which they did on a regular basis.
.... which is why the successful & richer Chinese went to great lengths to escape their reach ...
In the past it was the Pacific Rim ... & recently, Vancouver, Cayman Islands etc. have been their favourite hiding places.

FWIW

Mon, 04/07/2014 - 08:16 | 4631751 Gaurden
Gaurden's picture

The Chinese people would do well getting rid of anyone connected to the UN/IMF/Banksters/NWO if they want their people to survive.

Control of the many by the few always leads to a genocide of the many. There is evil in this world and it means to destroy us all. It is an ancient and formidable evil and it will not stop until all the good people of the world, whatever race and creed, are destroyed and enslaved.

There is no point in being here if they are in control.

 

 

Mon, 04/07/2014 - 09:57 | 4631970 falconflight
falconflight's picture

Yes, we all long for Mao and his enlightened vision...

Mon, 04/07/2014 - 11:10 | 4632281 Gaurden
Gaurden's picture

and who do you think put Mao in power...

like i said, if the chinese want to stay on this planet they need to clean house with the globalists because chinese people arent part of their evil plan other than a few million slaves.

the NWO is the death of humanity because the ones running it have no humanity to lose.

Mon, 04/07/2014 - 15:27 | 4633199 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

I remember 20 years ago meeting a Red Army general in Hong Kong. He was a billionaire, back when a billion was alot. I couldn't work out how a "communist" system could produce billionaires...boy was I clueless

Mon, 04/07/2014 - 10:27 | 4632093 Winston of Oceania
Winston of Oceania's picture

10,000 blossoms anyone?

Mon, 04/07/2014 - 07:44 | 4631705 New_Meat
New_Meat's picture

does this mean that the brown shirtz all get to die and be replaced with the black shirts?

Mon, 04/07/2014 - 10:28 | 4632099 Winston of Oceania
Winston of Oceania's picture

The brown shirts hid the gravy stains so much better!

Mon, 04/07/2014 - 07:11 | 4631658 new game
new game's picture

too many sociopaths>so now we will have less sociopaths?

the world will be so much better....

one sociopath inflicts damage to billions of normal people.

problem not solved and never will be.

ask adolf.

ask pol pot

ask o

majority voted...

Mon, 04/07/2014 - 07:03 | 4631651 vyeung
vyeung's picture

SCMP is a failing news outlet here in HK. There's some truth to be had in the article but they are far and away knowledgeable of whats happening in china.

Mon, 04/07/2014 - 06:17 | 4631623 Fix-ItSilly
Fix-ItSilly's picture

Today's Chinese generational purge. What's the real difference?  America has implemented its crony system and supports Chinese kleptocrats through what is called "free trade".  Except "free trade" is the importation of the Chinese governing system.

When does America shut down the "Caymans" gang?

Mon, 04/07/2014 - 05:19 | 4631572 y3maxx
y3maxx's picture

""Jiang, who is now 87 and was generally considered a stooge and flower pot even when in office, is almost begging for mercy now.""

should change to...

""Obama, considered a stooge and flower pot when in office, is begging for mercy now.""

there, fixed it for ya.

Mon, 04/07/2014 - 04:37 | 4631550 Gringo Viejo
Gringo Viejo's picture

Moon roof to the back of the head. Problem solved. Unfortunately, America has yet to learn this.

Dead offenders as opposed to repeat offenders. An idea whose time has come.

Mon, 04/07/2014 - 02:27 | 4631476 Hot Piece of Bass
Hot Piece of Bass's picture

In Amerika...corruption purge you!

Mon, 04/07/2014 - 01:06 | 4631427 toadold
toadold's picture

Actually a night of the high powered nail gun is possible in the US.  The Chinese crony's are just farther ahead in the game than the US crony's.

 The Chinese invented paper money, by one account around 1030 durning during the Song dynasty, and shortly after invented counterfiting (it is decreed that forgers shall be put to death!) and inflation so they are not exactly ignorant of the limitations of fiat currency. It was Kublai Khan the really went over board, conviscated all the metal money, and decreed that his paper money would be accepted from his bank or else "death."  This didn't last either.  

Obama and friends are woefully ignorant when it comes to history, especially financial history, so I won't be surprised if the crony's turn on them real hard when they see the options running low.

Sun, 04/06/2014 - 23:23 | 4631297 pupdog1
pupdog1's picture

Night of the Long Nail Guns is what we friggin' need.

Sun, 04/06/2014 - 23:20 | 4631293 kchrisc
kchrisc's picture

Sounds like the music has stopped and they are killing each other for chairs.

Anyways, a dead pol, crat or bankster is a good pol, crat or bankster.

Sun, 04/06/2014 - 23:20 | 4631292 laomei
laomei's picture

NTDTV is from taiwan you idiots

Mon, 04/07/2014 - 00:48 | 4631415 Uchtdorf
Uchtdorf's picture

Ignorant is more like it, but please tell me what is true and what's not in this article.

Sun, 04/06/2014 - 23:44 | 4631332 UselessEater
UselessEater's picture

blah just house cleaning to consolidate the oligarchs/PTB/whatever annoys core wealth and sells a PR meme

Sun, 04/06/2014 - 23:16 | 4631274 james.connolly
james.connolly's picture

"These are indeed scary times for the corrupt kleptocrats of USA. NOT"

>>>

There fixed it for you.

>>>

Every ZH post Substitute USA for CHINA, then these Post's make sense, ... thank ABC Media for the tip.

>>>

WRT CHINA, the Chinese are now cleaning house and removing the PRO IMF/UN Kissinger whores from the MSS (Chinese CIA), it should take some time, ... to bad that this kind of housecleaning will NEVER come to the USA.

 

Mon, 04/07/2014 - 14:12 | 4632982 SWRichmond
SWRichmond's picture

The "Night of the Long Knives was merely the end of the political purges in Germany.  I have read estimates that there were as many as 10,000 political murders in Germany during the interwar period.

Seizing and then consolidating power is what politicians do.  The kind of people who aspire to political power are not to be trusted, ever, because their ranks are heavily salted with murderers, sociopaths, and other criminals.  Thus it has always been.  Anyone who imagines things can be "fixed" through use of the political process is underinformed.

"Now who's being naive, Kay?"

Sun, 04/06/2014 - 22:04 | 4631176 mvsjcl
mvsjcl's picture

The US version is called Night of the Long, Limp Noodle.

Mon, 04/07/2014 - 00:57 | 4631420 nightshiftsucks
nightshiftsucks's picture

WTF have you've been talking to my wife ?

Sun, 04/06/2014 - 22:04 | 4631175 DeadFred
DeadFred's picture

I bet the corruption side can buy off enough people for a regime change.

Mon, 04/07/2014 - 07:27 | 4631670 Azannoth
Azannoth's picture

I guess they figured the Pie was not big enough for everybody so they decided to shrink the "Corruption Pool", this is the Lions going after the Hyenas till the Nature's "corruption" balance is restored again.

Sun, 04/06/2014 - 23:13 | 4631276 james.connolly
james.connolly's picture

Why fix it?

"If its NOT broke, don't fix it"

Infinite Fiat for free, every woman in the USA willing to sell her body for food money, ... sounds like they have created an Orwellian Uptopia.

 

Mon, 04/07/2014 - 07:43 | 4631700 New_Meat
New_Meat's picture

"if it ain't broke, you can't fix it"

- Ned

Mon, 04/07/2014 - 00:41 | 4631405 Buck Johnson
Buck Johnson's picture

No kidding, you know that will start to happen if it hasn't already.  Also this is just a rerun in China, they got rid of the old oligarchs and their minions decades ago in a purge also.  So what we are seeing is the start of a massive purge to essentially to not only go after the criminals but in the end anybody in he business class or who got rich.

Mon, 04/07/2014 - 11:57 | 4632501 hoist the bs flag
hoist the bs flag's picture

No. If it's not broken...get a bigger hammer.

Mon, 04/07/2014 - 11:37 | 4632428 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

It is OK long as there are enough spoils to be passed around. The pie is shrinking and someone has to leave the table ASAP!

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