Posts Tagged ‘Guo Wengui’

As ‘New Era’ Dawns, Xi’s Party Stays Out of the Sun

October 24, 2017

China’s growing influence confronts the world with a secrecy seen as a fact of life at home

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The most important moment in the life of China’s Communist Party, the coming-out parade of its top leaders, is the culmination of a process steeped in mystery.

What has gone before the red-carpet walk of the new Politburo Standing Committee, led by Xi Jinping, is anyone’s guess. None of the men at the apex of power are elected by popular vote. Just about everything known about them is filtered through state propaganda.

Ahead of the event, the few clues have been in rolling purges—the most recent prominent victim, widely seen as one of Mr. Xi’s main challengers, stands accused of being part of a coup plot. An anticorruption campaign has cut a swath through the broader Central Committee of top leaders.

Chinese citizens have learned to accept an unaccountable, enigmatic party leadership as a fact of life, the price to be paid for rising living standards.

The rest of the world will have a much harder time coming to terms with this arrangement.

Xi Jinping is arguably the most powerful Chinese leader since Mao Zedong. What’s behind his rise and how long will he remain in power? Photo: Reuters

When China was poor and backward, its unexplained leadership convulsions caused barely a ripple outside its borders. It was fodder for China watchers. Among the most eminent of these, the Belgian scholar Pierre Ryckmans, once wrote that trying to decipher Chinese politics was like looking at “nonexistent inscriptions written in invisible ink on blank pages.”

China has become richer but the party hasn’t become any more transparent. Increasingly, economic, diplomatic and military power in the 21stcentury will emanate from an organization that was born in secrecy and still obsessively guards its inner workings.

The just-concluded 19th Party Congress has confirmed the party’s reading of a historical progression: Under Mao, China stood up; under Deng, it prospered, under Mr. Xi, it has grown powerful. China now seeks to shape the global system.

The party will be at the vanguard. And power, as it is exercised within the world’s largest political group, is ruthless, peremptory and cloaked.

More than a million officials have faced punishment under the anticorruption campaign. High-level targets disappear for lengthy periods into suburban guesthouses to face party inquisitors, not state prosecutors. Only quite recently have these opaque methods come to the attention of the outside world. In New York this year, the FBI played cat-and-mouse across Manhattan with a group of Chinese security officials dispatched clandestinely to warn a prominent regime critic, the property magnate Guo Wengui, about his antiparty activities.

Australians have woken up to the Chinese party’s covert influence over their own political and academic institutions in the form of gifts from party-affiliated businessmen. The government is now preparing to overhaul laws covering espionage and foreign political interference.

More and more, multinational firms in China operate within an economy directed by party fiat. Mr. Xi’s reworking of the Chinese political order has aggregated control of everything from financial policy to foreign affairs and cybersecurity in the hands of “leading small groups,” all chaired by Mr. Xi, whose deliberations are hidden.

In the democratic West, transparency is often touted as the key to trust in government. But trust has never been the basis of the relationship between the Chinese party and the people in whose name it governs; the party-state functions on the assumption that its rule is constantly under threat. The paradox of power in China is that the stronger the country grows, the more insecure the party feels and thus more prone to bouts of repression.

President Xi Jinping bows to current and former Chinese leaders at the opening of this year’s party congress.Photo: Associated Press

Instead, the party’s domestic legitimacy derives in large measure from its ability to manage the economy; year after year, it delivers robust growth.

Wait for an economic crisis to test this social bargain at home, and challenge the assumption of China’s unstoppable rise abroad.

A reckoning isn’t imminent: On Mr. Xi’s watch, the party has likely bought itself time—some economists think five years or more—by clamping down on capital outflows and smothering the markets with regulation. But within this increasingly closeted system, debt is piling up, much of it to support state enterprises, the party’s economic bedrock.

When the debt finally comes due, the trust deficit at home and abroad will exacerbate the panic. When China engineered a slight devaluation of its currency in 2015, foreign investors, unable to peer into the black box of Chinese governance, feared the worst—that the world’s second-largest economy was in such poor shape it needed an exchange-rate boost. Spooked by the political unknown more than the devaluation itself, global markets trembled.

In the wake of the party congress we’re likely to hear endless paeans from state media about “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era.”

The formulation will be a tough sell globally, where the lack of transparency of China’s party apparatus already encounters suspicion, fear and outright resistance.

Mr. Xi wants to set his rule apart from the past as well as what Xinhua once called the “doddering democracy” of the West.

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China’s last imperial dynasty, the Qing, took its name from the Chinese ideogram that means “clear.” The earlier Ming dynasty meant “bright.” However Mr. Xi describes his new era, it has begun in the shadows.

Write to Andrew Browne at


China’s Pursuit of Fugitive Businessman Guo Wengui Kicks Off Manhattan Caper Worthy of Spy Thriller

October 23, 2017

Pressure from Beijing officials seeking Mr. Guo’s return sparks frantic response from Trump administration—and Pennsylvania Station, JFK airport standoffs

Exiled Chinese businessman Guo Wengui at the Manhattan hotel where he now lives, Sept. 30. Photo: Natalie Keyssar for The Wall Street Journal

Guo Wengui, a wealthy Chinese businessman, sat in the sun room of his apartment on the 18th-floor of the Sherry-Netherland Hotel on New York’s Fifth Avenue. With him were four officials from China’s Ministry of State Security, whom Mr. Guo had agreed to meet.

For many months, Mr. Guo, from his self-imposed exile, had been using Twitter to make allegations of corruption against senior Chinese officials and tycoons. During the hourslong conversation, the officials urged him to quit his activism and return home, after which the government would release assets it had frozen and leave his relatives in peace.

Chinese businessman Guo Wengui at his apartment at the Sherry-Netherland Hotel in Manhattan, where he says he was visited by officials from China’s Ministry of State Security.

Chinese businessman Guo Wengui at his apartment at the Sherry-Netherland Hotel in Manhattan, where he says he was visited by officials from China’s Ministry of State Security

Liu Yanping, the lead official, said he had come on behalf of Beijing “to find a solution,” according to Mr. Guo and a partial audio recording Mr. Guo said he made of the May encounter and posted online in September.

Mr. Liu’s demeanor made clear this wasn’t a friendly negotiation, and he hinted at the risks for Mr. Guo. “You can’t keep doing this forever,” Mr. Liu can be heard telling Mr. Guo on the audio recording, reviewed by The Wall Street Journal. “I’m worried about you, to tell you the truth.”

The dramatic meeting sparked an unresolved debate within the Trump administration over the Guo case and laid bare broader divisions over how to handle the U.S.’s top economic and military rival, according to people familiar with the matter. U.S.-China relations have been upset by disagreements over trade, cyberespionage and policy toward North Korea, and Mr. Guo’s New York stay is only adding to the tension.

Mr. Guo shows a video he says he made of the visit to his home by Chinese state security officials.  Photo: Michael Bucher/The Wall Street Journal

The Chinese officials, who were in the U.S. on visas that didn’t allow them to conduct official business, caught the attention of the Federal Bureau of Investigation, which wanted to move against them, according to people familiar with the matter. The bureau’s effort ran into friction with other U.S. officials, including those at the State Department, who have tended to favor a less-confrontational approach, according to the people.

Some U.S. national security officials view Mr. Guo, who claims to have potentially valuable information on top Chinese officials and business magnates and on North Korea, as a useful bargaining chip to use with Beijing, the people said.

The episode took a twist when President Donald Trump received a letter from the Chinese government, hand-delivered by Steve Wynn, a Las Vegas casino magnate with interests in the Chinese gambling enclave of Macau. Mr. Trump initially expressed interest in helping the Chinese government by deporting Mr. Guo, but other senior officials worked to block any such move, according to people familiar with the matter.

The Chinese Embassy in Washington declined to comment.

Wynn Resorts Ltd. Chief Marketing Officer Michael Weaver said in a written statement to the Journal: “[T]hat report regarding Mr. Wynn is false. Beyond that, he doesn’t have any comment.”


  • WHO: Guo Wengui, also known as Miles Kwok, is a wealthy Chinese businessman who fled China in 2014 and entered the U.S. the following year.
  • WHY HE MATTERS: In 2017, Mr. Guo launched an aggressive campaign to expose alleged corruption among China’s business and political elites, which has elicited sharp rebukes from the Chinese government. Beijing’s subsequent alleged efforts to remove Mr. Guo from the U.S. and bring him back to China have become a flashpoint in the U.S.-China relationship.
  • TARGETS: Among others, Mr. Guo is taking aim at Wang Qishan, the Communist Party’s top anticorruption official and a close ally of Chinese President Xi Jinping. Mr. Guo claims the Wang family owns a large interest in HNA Group, one of the country’s largest and most acquisitive conglomerates. HNA has denied the charge and sued Mr. Guo for defamation.
  • ALLEGATIONS: China is investigating Mr. Guo in at least 19 major criminal cases that involve bribery, kidnapping, fraud, money laundering and rape. Mr. Guo has denied the allegations and said they are part of a misinformation campaign against him being waged by Chinese officials.
  • LEGAL STATUS: Mr. Guo applied for asylum in the U.S. in September and his application is pending. Beijing has declared him a criminal suspect and has requested an Interpol arrest notice against him.

Mr. Guo, who built a real-estate empire in Beijing, has said he fled China in 2014 after hearing that a state security official to whom he was close would soon be arrested. Beijing has said it is investigating Mr. Guo in at least 19 major criminal cases that involve bribery, kidnapping, fraud, money laundering and rape, allegations that Mr. Guo denies.

Beijing has branded Mr. Guo as an attention-seeking criminal. Beginning this year, his near daily broadcasts on Twitter alleging official corruption have attracted many followers in China, who find ways to bypass China’s internet firewall.

Mr. Guo’s application for asylum in the U.S. is pending. He settled at the Sherry-Netherland in 2015, paying $67.5 million for the apartment overlooking Central Park.

The account of Mr. Guo’s interactions with U.S. and Chinese officials is based on a review of audio and video recordings he said he made of some conversations, discussions with Mr. Guo and with U.S. officials familiar with the matter.

The recent chapter in China’s pursuit of Mr. Guo began May 24, when Mr. Liu, a top official in charge of discipline at the security ministry—China’s equivalent of the Central Intelligence Agency—went with his colleagues to the fugitive’s New York home. They entered the U.S. on transit visas, which allow foreign government officials only to travel through the U.S. for a short period en route to another destination.

Mr. Guo said he had agreed to meet the officials because Mr. Liu had permitted Mr. Guo’s wife to leave China and join him in the U.S.

The Chinese officials spoke to Mr. Guo at length, touching on subjects including employees and family members who had been detained in China. Mr. Guo said the officials told him the government would treat him favorably only if he would stop inciting anti-Communist Party sentiment.

Mr. Guo didn’t agree to the officials’ demands.

Later that afternoon, at the beginning of rush hour around 5 p.m., agents from the FBI confronted the Chinese officials at New York’s Pennsylvania Station, according to people familiar with the incident.

At first, the Chinese said they were cultural affairs diplomats. Then they admitted to being security agents. The FBI agents instructed them to leave the country, saying they were in violation of their visas and weren’t to speak to Mr. Guo again.

The Chinese got on the train to Washington. The FBI assumed they would be gone in 24 hours.

Two days later, on May 26, Mr. Liu and the other Chinese officials returned to Mr. Guo’s apartment ahead of a planned flight back to China in the late afternoon.

U.S. law-enforcement authorities, whom Mr. Guo had told about the impending visit, decided it was time to act. The U.S. Attorney’s office in Brooklyn prepared charges alleging visa fraud and extortion, according to people familiar with the matter. FBI agents raced to John F. Kennedy International airport ahead of the officials’ scheduled 4:50 p.m. Air China flight.

Meanwhile, the Chinese officials dined on dumplings prepared by Mr. Guo’s wife, who was still grateful to Mr. Liu for letting her leave China, according to her husband. Mr. Guo said he again declined the officials’ offer of clemency in exchange for silence, and walked the group out of the building.

Prosecutors were still scrambling to secure final signoff from Washington to go ahead with the planned arrests at the airport.

The Sherry-Netherland Hotel in Manhattan.  Photo: Michael Bucher/The Wall Street Journal

With the flight preparing to board and FBI agents taking positions on the jet bridge, White House national security officials convened a conference call with participants from the State and Justice Departments, the Pentagon and the intelligence community.

State Department officials, worried about collateral consequences for U.S. personnel in China, hesitated to approve the Justice Department’s plan to make arrests.

An alternative was presented: Subject the Chinese officials to additional screening, which would cause them to miss their flight and buy some time, people familiar with the call said.

U.S. officials couldn’t fashion a consensus to approve either plan, and the FBI agents were permitted only to confiscate the Chinese officials’ phones before the plane took off.

A State Department representative said in a written statement: “Decisions on these kinds of matters are based on interagency consensus.”

In a written statement about the events provided to the Journal, a Justice Department spokesman said: “It is a criminal offense for an individual, other than a diplomatic or consular officer or attaché, to act in the United States as an agent of a foreign power without prior notification to the Attorney General.”

The spokesman added that the U.S. is “committed to continuing cooperation with China” on fugitive cases, and that the U.S. “is not a safe haven for fugitives from any nation.”

The U.S. and China have no extradition treaty, a recurring point of tension. Since 2014, China has escalated its global efforts to capture Chinese fugitives accused of corruption, including those who have fled to the U.S. The initiative, dubbed “Operation Fox Hunt,” often involves pressuring relatives in China, confiscating the target’s assets and sending agents to deliver personal threats.

Beijing officials tell their American counterparts they are justified in engaging in such activities because the U.S. carries out similar operations on foreign soil as well, U.S. law-enforcement officials say.

In June, U.S. officials revisited the JFK incident during a policy coordination meeting that grew heated.

Mr. Guo shows documents he says expose corruption in the Chinese government.Photo: Michael Bucher/The Wall Street Journal

Ezra Cohen-Watnick, then senior director for intelligence programs at the National Security Council, confronted Susan Thornton, an East Asia expert who serves as Acting Assistant Secretary of State, charging her agency was improperly hindering law-enforcement efforts to address China’s repeated violations of U.S. sovereignty and law, according to people familiar with the discussion.

State department officials criticized the FBI for not seeking permission from them before initially engaging the Chinese officials, the people said.

State Department official Laura Stone said she was already facing retaliation from Beijing, saying Chinese officials had allegedly confiscated her notebook as she was trying to leave the country, the people said.

The FBI’s assistant director of the counterintelligence division, Bill Priestap, deadpanned in response: “Was it because you had been trying to kidnap and extort someone in China?”

Separately, at a June meeting in the Oval Office, counterintelligence officials briefed President Trump on Beijing’s alleged efforts to steal cutting-edge research from labs and trade secrets from U.S. companies, according to people familiar with the meeting.

The president, surrounded by his top aides, including Vice President Mike Pence, his son-in-law Jared Kushner, his former chief strategist Steve Bannon and other national security and economic advisers, asked to see policy options in 90 days. In the meantime, he said he knew of at least one “Chinese criminal” the U.S. needed to immediately deport, according to the people.

“Where’s the letter that Steve brought?” Mr. Trump called to his secretary. “We need to get this criminal out of the country,” Mr. Trump said, according to the people. Aides assumed the letter, which was brought into the Oval Office, might reference a Chinese national in trouble with U.S. law enforcement, the people said.

The letter, in fact, was from the Chinese government, urging the U.S. to return Mr. Guo to China.

The document had been presented to Mr. Trump at a recent private dinner at the White House, the people said. It was hand-delivered to the president by Mr. Wynn, the Republican National Committee finance chairman, whose Macau casino empire cannot operate without a license from the Chinese territory.

A White House spokesman declined to comment.

Some aides tried to shut the topic of conversation down, including by noting Mr. Guo is a member of the president’s Mar-a-Lago club in Palm Beach, Fla., according to the people familiar with the meeting. The aides later worked to prevent any possible attempts to deport Mr. Guo, an action they believed would deprive the U.S. of a key point of leverage to use against Beijing, the people said.

Mr. Guo in his apartment in New York. Photo: Michael Bucher/The Wall Street Journal

In early September, Deputy Assistant Attorney General Bruce Swartz, who supervises the international affairs office at the Justice Department, traveled to China for an anticorruption conference and lodged a protest with Chinese law-enforcement authorities about China’s aggressive efforts to force alleged fugitives to return from the U.S., people familiar with the matter said.

While he was there, Beijing attempted to force another Chinese national to return from the U.S., the people said, without providing details.

On Oct. 4, Mr. Guo was scheduled to speak at the Hudson Institute, a prominent Washington think tank, the same day China’s Public Security Minister Guo Shengkun was scheduled to meet with Attorney General Jeff Sessions and others for high-level talks on law enforcement and cybersecurity.

In the days leading up to the speech, the Hudson Institute detected a Shanghai-based attack aimed at shutting down access to its website, according to a spokesman. The Chinese Embassy also called Hudson personnel warning them not to give Mr. Guo the opportunity to speak, according to several people who received such calls.

The institute canceled the event. Kenneth Weinstein, the Institute’s president, said Beijing “sought to dissuade” it from holding the event but said the change of plans was caused by poor planning, not Chinese pressure.

Mr. Guo continued to antagonize the Chinese in the run-up to the Communist Party’s twice-a-decade Congress, which began Wednesday. President Xi Jinping is seeking to solidify his position as the country’s strongest leader in decades during the weeklong event.

Earlier this month at an event in Washington, Mr. Guo released copies of an alleged Chinese government document purporting to authorize a group of spies to be dispatched to the U.S. to stop him and other targets. Beijing has said the document is a forgery.

He also met with lawmakers and Mr. Bannon, the former White House chief strategist who continues to advocate that the U.S. take a hard line on economic negotiations with China. Mr. Guo posted photos of himself with Mr. Bannon on a new English-language Twitter account he recently launched.

—Nicole Hong and Michael C. Bender contributed to this article.

Write to Kate O’Keeffe at, Aruna Viswanatha at and Cezary Podkul at

Xi Jinping’s Power Plays Set the Stage for a Long Encore

October 17, 2017

China’s president is likely to emerge from a Communist Party congress with enhanced powers—but will he step down in 2022?

BEIJING—Chinese President Xi Jinping is set to emerge from a Communist Party congress that starts Wednesday with all of the allies and authority he needs to monopolize decision making for the next five years.

The affirmation of Mr. Xi’s political supremacy suggests he will double down on a drive to reassert party control at home,  and project power abroad, during a second term likely to be marked by a slowing economy and volatile foreign relations, especially over North Korea.

Beyond that looms the question: Will he step down come 2022?

The twice-a-decade congress is expected to endorse Mr. Xi’s rise to a level of political control in modern China comparable only to Deng Xiaoping or Mao Zedong. Both remained dominant figures till death.

As well as packing top party postswith Mr. Xi’s lieutenants, the 2,280 delegates are expected to enshrine his political theory in the party’s constitution and grant him even tighter control over China’s armed forces, political insiders and analysts say.

And the congress could go further, opening a window for 64-year-old Mr. Xi to stay in power after his second term expires, political insiders say, despite retirement norms to protect against one-man rule.

Expectations that he will break with precedent by blocking a potential successor from joining the Politburo Standing Committee, the top leadership body, have mounted since one of two leading candidates was suddenly sacked in July.

“The issue of potentially extending Xi’s tenure will be discussed,” according to one person directly involved in preparations for the congress. The person said the idea would be proposed by a senior party figure who would praise Mr. Xi’s achievements.

One Nation Under Xi Jinping

Another possibility is that Mr. Xi gets a new title he could keep beyond 2022, such as party chairman—which was most closely associated with Mao.

China’s government press office didn’t respond to questions on whether such discussions would take place or any other expected outcomes of the congress.

In recent weeks, Chinese authorities have gone to lengths reminiscent of the Mao era in lavishing praise on Mr. Xi’s muscular leadership and his “China Dream” to rejuvenate the nation.

That resonates with many Chinese, who saw his predecessor, Hu Jintao, as out of touch and unable to protect China’s international interests.

“Xi Jinping is different from other Chinese leaders,” said Zhai Yifan, a 32-year-old railway engineer visiting a Beijing exhibition focused on Mr. Xi’s achievements. “As a Chinese person, this makes me feel proud.”

A Beijing poster recently showed Chinese President Xi Jinping with a slogan reading “Chinese Dream, People’s Dream.” Photo: greg baker/Agence France-Presse/Getty Images

Still, that doesn’t translate into unanimous popular support for Mr. Xi staying on after 2022. There are no official public opinion surveys on that issue, let alone independent ones, but at the Beijing exhibition, views were mixed, with Mr. Zhai and several others saying they opposed the idea.

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Otherwise, it could signal a return to “lifelong rule,” said Du Jingqi, a 63-year-old retiree at the exhibition.

Internationally, Mr. Xi is expected to continue asserting China’s territorial claims and expanding its military activities, while positioning China as a champion of global trade through its Belt and Road Initiative to build new East-West trade and transport links.

U.S. officials hope Mr. Xi will take bolder action to help halt North Korea’s nuclear program and open Chinese markets, and will look for signals when President Donald Trump visits China in early November.

Back home, the challenge for Mr. Xi will be delivering the improvements many Chinese now expect in areas such as education, health care and the e nvironment.

Enhanced powers allow Mr. Xi, in theory, to make painful decisions needed to shift China to more sustainable growth, such as trimming excess in state companies.

China’s Leaders: Who’s With Xi?

The flip side of Mr. Xi’s emphasis on strengthening party control is a clampdown on dissent, which discourages officials and advisers from questioning policy or experimenting with new ideas.

Despite a 2013 pledge to let market forces play a “decisive role” in the economy, Mr. Xi has kept credit flowing to the inefficient state sector to meet a goal of doubling gross domestic product over 10 years, in time for the centenary of the party’s founding, in 2021.

Many political insiders say Mr. Xi is more likely to focus on bolstering the party’s role in society and the economy rather than unleashing market forces in his second term.

As the son of a revolutionary, Mr. Xi “sees himself on a historical mission,” said Sebastian Heilmann, president of the Mercator Institute for China Studies. “First, making party rule fit and resilient for the 21st century. Second, transforming China into a global power that reshapes the power balances and rules of the game in international relations.”

Those are expected to be the major themes Mr. Xi will lay out in a speech as the congress opens Wednesday.

Delegates will spend much of the next several days in discussions behind closed doors before selecting a new Central Committee, the party’s top 375 or so officials. That body then selects a new Politburo—the top 25 leaders—and the Politburo Standing Committee, the party’s inner sanctum that currently has seven members, up to five of whom are expected to retire.

Based on past protocol, Mr. Xi will lead the new top slate single-file onto a red-carpeted podium in the Great Hall of the People, probably on Oct. 25 or 26.

Despite tensions over economic policy in recent years, it now seems highly likely Premier Li Keqiang will stay on, although his decision-making powers have been severely curtailed, according to party insiders.

Recent speculation has focused instead on Wang Qishan, the 69-year-old anticorruption chief who by many is seen as China’s de facto No. 2 leader. The custom since 2002 has been that leaders over 67 retire at a congress, though last year a senior party official denied that such a norm exists.

If Mr. Wang stays on, that creates precedent for Mr. Xi to remain in power beyond 2022, when he will be 69. It also keeps a crucial Xi ally on the slate, though some in the party say Mr. Xi has grown wary of the credit given to Mr. Wang for the antigraft campaign that has punished more than a million people.

Add to the intrigue the distraction provided by a Chinese businessman, Guo Wengui, who has lobbed allegations of corruption and other misdeeds from New York against various Chinese leaders, including Mr. Wang. In 2012, the scandal surrounding fallen party star Bo Xilai loomed over the party congress; anxious to avoid a similar cloud, Beijing has sought to discredit Mr. Guo and is seeking his arrest.

Standing committee members used to be selected by outgoing and retired members, but Mr. Xi has curbed the influence of his peers and elders. He may still have to make compromises, political insiders say, but he should be able to block anyone he considers disloyal or a threat to his authority.

He could also abandon recent party practice, which suggests the new Standing Committee should include at least one person young enough to succeed him in 2022 and serve another 10 years based on current retirement norms.

Sun Zhengcai was one of only two people on the current Politburo who fitted the bill—until he was fired in July as party chief of the southwestern city of Chongqing, the same post held by Bo Xilai.

Mr. Sun, 54, was expelled from the party last month and accused by its investigators of a long list of misdeeds, including trading power for sex, according to the official Xinhua News Agency.

Mr. Sun was succeeded in Chongqing by Chen Min’er, who is 57 and widely considered to be among Mr. Xi’s political favorites, having worked under him in the 2000s in the eastern province of Zhejiang.

If Mr. Xi does have to compromise by allowing a potential successor to join the Standing Committee, political insiders say it could be Mr. Chen although he is not yet on the Politburo and leapfrogging over that step would be unusual.

Write to Jeremy Page at, Lingling Wei at and Chun Han Wong at

China Takes On Its New Tycoons

October 14, 2017

Fearing the rise of Russia-style oligarchs, Xi Jinping looks to remind China’s wealthy class of entrepreneurs who is really in charge

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On the eve of his anointment by the Chinese Communist Party for a second five-year term as China’s leader, Xi Jinping seems to be the master of all he surveys. He has centralized economic and national-security policy in his office. The military and the police are firmly under control. Legions of corrupt officials—some of them political rivals, others caught brazenly on the take—are in jail. Dissidents and activists have been sidelined or locked up.

But Mr. Xi’s most consequential political battle today has received little attention. As he has tightened his grip on the party and the military, he now faces only one potential set of genuine rivals: China’s new class of wealthy entrepreneurs. China’s communist leaders have long been known to dread a Soviet-style collapse, but Mr. Xi and his senior colleagues are equally worried about replicating what came in its aftermath: the rise of the Russian oligarchs, who snatched control of state assets and turned themselves into billionaires and pushy political players. Mr. Xi is determined not to let that happen in China.

Some of China’s new tycoons have challenged the state; others have acquiesced after clashes with the authorities; most have kept their heads down and concentrated on making money. But whether or not the entrepreneurs are taking on Mr. Xi, Mr. Xi has decided to pre-empt any threat by taking the fight to them first.

Mr. Xi’s campaign to corral the private sector seems to have begun in earnest in June, with the disappearance of the swashbuckling businessman who had become a standard-bearer for local tycoons leading a new wave of aggressive deal-making overseas. Wu Xiaohui, the chairman of Anbang Insurance Group, went the way that communist members who fall afoul of the system do, vanishing without official explanation into the party’s extralegal detention system.

Only months earlier, Mr. Wu had been leading negotiations to spend $14 billion buying Starwood Hotels & Resorts Worldwide Inc. before the deal collapsed. Mr. Wu hasn’t been heard from since his detention; no charges have been filed.

Wu Xiaohui, the chairman of Anbang Insurance Group, Beijing, March 18. He was detained by Chinese authorities in June. Photo: Thomas Peter/Reuters

From a near-standing start in the 1990s, entrepreneurs now account for three-quarters of China’s economic output and employ more than 80% of workers in its cities, according to Andy Rothman, an investment strategist with Matthews Asia in San Francisco. “The Chinese economy has been for the last decade—and will be forever into the future—driven by the private sector. That’s not in dispute,” said Mr. Rothman. “There’s more people in Berkeley, where I live, who believe in Marxist-Leninist theory than in Beijing.”

But while China’s new entrepreneurial class may not believe in Marx, its leaders have other ideas. “If we deviate from or abandon Marxism, our party would lose its soul and direction,” Mr. Xi told a meeting of senior party officials in September. That same week, the party and the government issued a joint statement defining for the first time the essential qualities of “Chinese entrepreneurship.” At the top was “patriotism.”

As this year’s party congress, which opens Oct. 18 in Beijing, draws near, the conventional wisdom holds that Mr. Xi’s central economic challenge is energizing China’s sprawling and declining state-owned enterprises, which are clustered in heavy industry and utilities. But this view gets this issue upside down. Unproductive state ventures are hard to reform, but they have always been part of the Chinese system, with their top executives hired and fired by the party.

‘China’s private sector was born outside of the party’s control.’

The private sector, however, was born outside of the party’s control. To borrow an analogy from the popular geopolitical theory known as the “Thucydides trap,” China’s entrepreneurs are the rising power destined to battle the established power of the party and the state. “It’s been clear from before Xi’s time that if entrepreneurs try to use their business networks for political power, the party will quickly cut them down,” said Ding Xueliang of the Hong Kong University of Science and Technology. “But the party cannot control everyone in China in the private sector forever.”

As China’s private sector has blossomed, the state has hardened its Leninist core, which dictates that the communist party should face no rival centers of power. Mr. Wu’s detention—and the harassment of other rich entrepreneurs—seems to be a taste of the struggles to come between the party and the business class.

A former auto dealer who married the granddaughter of the former Chinese leader Deng Xiaoping, Mr. Wu had pulled off some big offshore acquisitions, including the 2014 purchase of New York’s famed Waldorf Astoria Hotel. In the 18 months before his fall from grace, his company had outlaid more than $20 billion. His high profile, deep connections and audacious deal-making seem to have helped make him a target for a leadership looking to remind China’s newly minted CEO class who was really in charge.

Related Reading

  • The Disappearance of a Chinese Deal Maker
  • China Cranks Up the Heat on Exiled Tycoon Guo Wengui
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Several other tycoons running large private companies fell under clouds around the same time. In July, Mr. Xi blocked Chinese state-owned banks from giving the Dalian Wanda Group, which owns AMC Theatres, new loans for expansion abroad. Wang Jianlin, the company’s billionaire chairman, backed out of major offshore deals under government pressure and, after the company’s stock price plunged on rumors that he had been banned from leaving China, issued a statement denying the travel ban.

Similarly, the billionaire Guo Guangchang—whose Fosun Group in Shanghai bought the resort operator Club Méditerranée and a stake in Cirque du Soleil—has been forced more than once to deny that he was in detention after rumors circulated online and the local press. At one point in 2015, Mr. Guo traveled to New York, pointedly posting a photo of himself online to prove he was still at liberty—and in business.

Ahead of the party congress, Mr. Xi has had a bruising firsthand experience with what can happen when an entrepreneur goes rogue. From his luxurious apartment in Manhattan, Guo Wengui, a onetime Beijing property developer, has been bombarding Beijing with lurid disclosures—in widely discussed video interviews and Twitter posts—about alleged top-level corruption and Politburo members who have children out of wedlock. Not all of his sometimes outlandish claims about China’s leaders can be independently confirmed, but the exiled entrepreneur’s ties to former high officials—notably Ma Jian, a onetime spy chief who is now in jail after a bribery and abuse-of-power probe—lend him some authority.

Exiled Chinese businessman Guo Wengui at the Manhattan hotel where he now lives, Sept. 30. Photo: Natalie Keyssar for The Wall Street Journal

Mr. Guo, who is fleeing charges of corruption in China, had promised further revelations—contained, he has said on YouTube, in “91 folders and 18 videotapes” that he had spirited out of China when he left in 2015. In October, Facebook blocked his online profile, saying that it had included someone else’s personal information without their consent. Then the Hudson Institute, a Washington think tank, postponed an event featuring Mr. Guo, who said that he suspected pressure from the Chinese government. (A Hudson Institute spokesman said that the Chinese embassy to the U.S. had complained about the event with Mr. Guo but said that it was canceled because of “poor planning” on the institute’s part.)

For now, Mr. Guo is an outlier. Few of China’s big business leaders—who range from robber barons to genuine visionaries—have dared to challenge the party’s leadership head on. For many, their party membership and connections have become paths to cheap bank loans, advancement and enrichment.

“The private companies were presented with a very clear choice: You can make money, but you must acknowledge the communist party’s ascendancy,” said Barry Naughton, an expert on the Chinese economy at the University of California, San Diego.

‘The Chinese Communist Party took a long time to declare its love for business.’

The Chinese Communist Party took a long time to declare its love for business. In the early 1980s, a few years after Deng launched his transformational market reforms, the party’s constitution still boasted of socialism’s “incomparable superiority over the capitalist system.” Local officials, nervous about discovering thriving private businesses in their midst, often checked with Deng before allowing them to stay open.

The party didn’t cross the ideological Rubicon until early in the 21st century, when Chinese leaders realized that they badly needed private business to provide more jobs as the state sector shrank. Jiang Zemin, who led the party from 1989 to 2002, fashioned amendments to party documents to put private business on a stronger political footing. “Entrepreneurs are all builders of socialism with Chinese characteristics,” Mr. Jiang declared.

Even so, China’s leaders remain wary about unbound capitalism. Over the past decade, Chinese officials at all ranks have been forced to attend study sessions about the collapse of the Soviet Union—and about its aftermath, with the rise of a new class of Russian oligarchs enriched by their virtual theft of state assets.

Chinese leaders, including President Xi Jinping (center), at a top-level Chinese Communist Party conclave, Beijing, Oct. 27, 2016. Photo: Li Xueren/Xinhua/Zuma Press

Chinese leaders watched in horror as the Soviet Union disintegrated and its assets were privatized. Having seen business threaten to take over the state in Russia, officials in China decided to do the reverse. Over the past two decades, Beijing has tried to colonize the private sector to make sure entrepreneurs stay under control.

“The party has been trying to figure out just how long the leash should be,” said Jude Blanchette of the Conference Board’s China Center for Economics and Business. “Too short, and you stifle growth. Too long, and you lose control.”

‘In 2016, businessmen and women made up more than 8% of the party’s members.’

Entrepreneurs were encouraged to join the party, which had long styled itself as a home for workers, soldiers and peasants. In 2016, amid a sharp rise in entrepreneurs’ membership, businessmen and women made up more than 8% of the party’s 89.5 million members, according to its own figures. A 2015 study by Curtis Milhaupt of Columbia Law School and Wentong Zheng of the University of Florida College of Law found that 95 of the founders or de facto controllers of China’s top 100 private firms and eight of the heads of its top 10 internet companies were or had been members of party-led political organizations.

The party “has figured out a way to incorporate the private sector fairly effectively,” said Yasheng Huang, a China specialist at MIT. As one lever, he cited the state sector’s control of such areas as finance, steel and electricity to exert strong pricing power over business. “There are many economic instruments they can exercise over the private sector.”

The party’s targeting of tycoons hasn’t just been over alleged corruption. As tens of billions of dollars have headed offshore in recent years in search of foreign assets, Beijing has feared that a plunge in foreign-exchange reserves would destabilize China’s currency. Senior officials also worried that the deal-making frenzy would end the same way that Japan’s did in the early 1990s, with huge sums wasted on inflated assets.

‘Beijing has taken particular pains to keep the titans of China’s internet industry in line.’

Beijing has taken particular pains to keep the titans of China’s internet industry in line, including Robin Li at Baidu and especially Jack Ma at Alibaba and Pony Ma at Tencent. The three companies—respectively China’s dominant search engine, e-commerce platform and messaging and social-media service—are often known collectively in China by their initials, BAT. In just a few years, thanks to online searches and electronic payments, the companies have become an efficient, real-time storehouse of data that China’s pervasive state security apparatus could only have dreamed of obtaining.

China’s tech giants are world leaders in mobile payments, and they are also working with the government on artificial intelligence, handing China’s surveillance state more tools, including face recognition. Chinese companies are using AI to try to plan and predict consumer behavior; the government wants to use the same tools to anticipate dissent and head it off. The elimination of cash is making it easier for the government to track payments—and citizens.

Baidu and Tencent have both felt the government’s wrath recently. In 2016, Baidu was investigated for selling rankings on its search engine; Tencent was driven to put time limits on its top-grossing mobile game after state-media criticism that it was harmfully addictive. Both companies have also been investigated for alleged cybersecurity violations.

Jack Ma, the most outspoken and high-profile of the tech-company CEOs, has mostly stayed out of trouble with the authorities. The Alibaba founder likes to say that in China, entrepreneurs should avoid doing business with government officials. “Love them. But don’t marry them,” he says.

Not satisfied with threatening the tech companies, the government is now pushing companies like Alibaba and Tencent to sell Beijing shares in the companies and provide a seat at the table when business decisions are made. The government would presumably also get a steady flow of dividends from its stake.

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Despite Mr. Xi’s concerns about tycoons, his career should have helped him appreciate the role that business could play in making China—and the party—great again. Between 1985 and 2007, he was posted in Fujian and Zhejiang, two coastal provinces south of Shanghai that are among the most entrepreneurial in China. “I think it is assumed, based on where he has served, that he should have a very good idea of how the private sector works and its importance, but it’s hard to see that,” said Nicholas Lardy of the Peterson Institute for International Economics, a Washington think tank.

Mr. Xi’s vision hardly seems to be one of unfettered entrepreneurship. Speaking recently about China’s private sector, he declared that entrepreneurs owed their country a political duty. Business leaders, he said, should “strengthen self-study, self-education and self-improvement.”

“They should not feel uncomfortable with this requirement,” Mr. Xi added. “The communist party has similar and stricter requirements on its leaders.”

Mr. McGregor is the author, most recently, of “Asia’s Reckoning: China, Japan, and the Fate of U.S. Power in the Pacific Century” (Viking).

China’s Goal is To Decimate America

October 8, 2017

By Adam Shaw

Self-exiled Chinese real-estate mogul Guo Wengui blasted what he called the “kleptocracy” running China, and warned that a wave of Chinese spies are being dispatched to “decimate” the United States – where Guo is currently sheltered.

CNBC reports that his remarks come as the Chinese government has doubled down on its allegations against the billionaire, accusing him of crimes including corruption and rape – crimes he firmly denies.

“What the U.S. ought to do is take action, instead of just talking to the Chinese kleptocracy,” Guo said through a translator at an event at the National Press Club in Washington, D.C.

“They are just a tiny group of Mafia, pure and simple,” said Guo, who also goes by the name Miles Kwok on social media. “I would like all the members of the Chinese Communist Party to wake up and say no to this ruling clique.”

FILE PHOTO: Billionaire businessman Guo Wengui speaks during an interview in New York City, U.S., April 30, 2017.  REUTERS/Brendan McDermid/File Photo

Guo applied for asylum in the U.S. this month after arriving on a tourist visa. He is currently working out of a $78 million penthouse in New York City as he fights off the accusations from the Chinese government surfacing after he accused powerful officials of serious corruption, including the head of the Communist Party’s anti-corruption board.

Although his social media accounts have been wiped on occasion, he has managed to often restore them and continue his barrage of attacks against the “kleptocracy.”

Guo himself is no stranger to corruption. As part of his rags-to-riches story, he befriended a Chinese intelligence official who later was accused of taking $8.8 million in bribes from Guo.

The 50-year-old has promised to continue as he wants to “change China” even in the face of the lengthy accusations against him. The Wall Street Journal reports that he has amassed a $150 million war chest with which to fight back.

“The U.S. is the last land of justice,” Guo told the Journal. “I would not be alive were it not for the U.S.”

However, he is still having issues in America. His Facebook account was taken down over the weekend, purportedly for violating terms of service and CNBC reports that a planned speech on Tuesday at the Hudson Institute was postponed.

In his remarks this week, he said he was aware of multiple attempts by the “kleptocracy … to weaken the United States, to bring about turmoil in the United States and to … decimate the United States.”

“These plans pose great threats to the American people and their property,” Guo said, according to CNBC, adding that those efforts are “100 times, or even 1,000 times” as potentially damaging as the 9/11 terror attacks.




Chinese Fugitive Guo Wengui Amasses War Chest to Battle Beijing — “The U.S. is the last land of justice”

October 3, 2017

Guo Wengui said he has set aside $150 million to advance his campaign against the Communist Party and fight Beijing’s attempts to discredit him


Guo Wengui, an exiled Chinese businessman living in New York who has accused some of China’s leaders of corruption and other misdeeds, said he has prepared a war chest to advance his vocal campaign against the Communist Party and fight Beijing’s attempts to discredit him.

Mr. Guo, who last month applied for political asylum in the U.S., told The Wall Street Journal he has set aside over $150 million for legal fees and other expenses that he expects to incur over the next few years as he battles defamation and other lawsuits and steps up his antigovernment rhetoric.

“Nothing can stop me,” Mr. Guo said in an interview in his luxury apartment overlooking Manhattan’s Central Park recently. He said he is confident the U.S. will grant him asylum and will confront what he called Chinese government efforts to “silence” him.

“The U.S. is the last land of justice,” Mr. Guo said. “I would not be alive were it not for the U.S.”

Exiled Chinese businessman Guo Wengui spoke to The Wall Street Journal at the Sherry-Netherland hotel in Manhattan, where he lives. Photo: Natalie Keyssar for The Wall Street Journal

Mr. Guo—who also calls himself Miles Kwok —is a self-made Chinese property tycoon who has lived in the U.S. since 2015. He has said he fled China after learning that a state-security official he had ties to was going to be detained as part of a government anticorruption campaign.

Over the past nine months, Mr. Guo has captivated some politically minded Chinese citizens and vexed the Chinese government with a barrage of tweets, online videos and social-media posts alleging corrupt links between China’s political and corporate elites. He has pledged to release documents detailing Chinese politicians’ wealth and ownership of luxury real estate overseas—information he claims to have obtained through past work with Chinese state security and private investigators he hired to explore leads.

Mr. Guo has stepped up his attacks in recent weeks. He recently wrote an opinion piece in the Washington Times criticizing the “leviathan Chinese Mafia state” and made plans to give a speech Wednesday at the Hudson Institute, a Washington-based think tank. He said he will talk about China’s political ambitions and the impact of Chinese investments on U.S. national security. “China is at a very dangerous crossroads now,” Mr. Guo said.

Beijing has dismissed Mr. Guo’s allegations as falsehoods and seeks his arrest. Chinese courts have jailed and fined some of Mr. Guo’s former subordinates for crimes including fraud and embezzlement. Chinese media have published articles portraying him as unscrupulous.

Many of Mr. Guo’s allegations are hard to independently ver ify. Even his age—he told the Journal that he was likely born in 1967 or 1968—has been a matter of some debate, as he previously said he was born in 1970. Yet his allegations have the potential to intrude upon the ruling Communist Party’s plans for a carefully choreographed leadership transition this month.

At the twice-a-decade congress, Beijing’s ruling elite will name President Xi Jinping’s new leadership benchfor the next five years. Mr. Guo’s attacks on certain high-ranking officials could affect behind-the-scenes jostling among senior officials vying for promotions and key positions.

In August, Chinese officials told the Associated Press that Mr. Guo was being investigated in at least 19 major criminal cases that involve bribery, kidnapping, fraud, money laundering and rape. Several Chinese companies and individuals have recently sued Mr. Guo in U.S. courts. Among the pending cases against Mr. Guo is a defamation suit from acquisitive conglomerate HNA Group Co., which he has accused of having ties to a high-ranking Chinese official in the Communist Party. Another civil case was filed in New York by a Chinese woman who has accused Mr. Guo of raping her when she worked as his personal assistant.

Guo Wengui.  Photo: Natalie Keyssar for The Wall Street Journal

Mr. Guo denied the allegations, saying the they were part of a misinformation campaign being waged by Chinese officials.

“It has nothing to do with who I am and what I have done. They haven’t publicly disputed anything that I have disclosed so far,” Mr. Guo said, referring to the Chinese government. Sipping tea in a long black Chinese gown next to a fireplace in his apartment adorned with a Lego brick model of the London bridge, he challenged his detractors to produce evidence that he is wrong.

Mr. Guo’s supporters say Beijing is trying to frustrate his efforts to reach audiences in China. Several recent disruptions to the WhatsApp messaging service in China coincided with Mr. Guo’s live video broadcasts and interviews with U.S.-based Chinese media. The Cyberspace Administration of China has said “all companies are responsible for blocking illegal information, and so is WhatsApp.”

Over the weekend, a Facebook account used by Mr. Guo was taken down. A person familiar with the matter said Facebook disabled the account because it was used to share personal-identification information, in violation of terms of service barring unauthorized disclosure of such data.

Asked about the disabling, Mr. Guo said he believed it was the work of his opponents, and called the move “despicable” in a Twitter post.

—Alyssa Abkowitz in Beijing contributed to this article.

Write to Cezary Podkul at and Chun Han Wong at


Facebook blocks Chinese tycoon Guo Wengui’s pages — His sensational corruption allegations shows why he’s a wanted man in Beijing

October 2, 2017

Social network takes down two pages associated with businessman who has made string of sensational corruption allegations against officials

South China Morning Post

PUBLISHED : Monday, 02 October, 2017, 1:14pm
UPDATED : Monday, 02 October, 2017, 1:27pm

Facebook has blocked two pages in the name of Guo Wengui, the fugitive Chinese tycoon who has been making corruption accusations against senior officials in recent months, according to a report by The New York Times.

The social media network said it had blocked a profile under Guo’s name and taken down another page associated with him, adding that both pages had included someone else’s personal identifiable information.

Facebook acted after receiving a complaint, said a spokeswoman.

“We want people to feel free to share and connect on Facebook, as well as to feel safe, so we don’t allow people to publish the personal information of others without their consent,” Charlene Chian, a spokeswoman for the social network, said.

Guo appeared to confirm the deletion of his Facebook pages on his Twitter feed with a link to The New York Times report. He blamed pressure from the Chinese government without elaborating further and did not respond to the newspaper’s requests for comment.

The incident took place at a sensitive time for China, as later this month it will host a five-yearly party congress meeting, which will see a major reshuffle in the top leadership of the Communist Party.

President Xi Jinping, who is sure to be confirmed in a second term as the general secretary of the party, is also expected to further consolidate his power by bringing his proteges into the top leadership, and writing his name in the party constitution.

 Guo Wengui has claimed asylum in the United States. Photo: Handout

Guo has made a number of corruption allegations against senior Chinese officials in recent months, including Wang Qishan, the party’s most senior anti-corruption official, who is considered an ally of Xi and the country’s second most powerful man.

But Guo has barely provided any hard evidence to back up his claims.

Beijing has previously filed an Interpol red notice requesting Guo’s arrest on bribery charges.

The Chinese authorities have also indicated they will file a second red notice concerning a rape alleged to have been committed outside China.

Last month a former employee of Guo’s also lodged a civil suit in the New York courts alleging he had raped her and seeking damages of US$140 million.

Guo has claimed political asylum in the United States, which does not have an extradition treaty with China.




Facebook Blocks Chinese Billionaire Who Tells Tales of Corruption

HONG KONG — A Chinese billionaire living in virtual exile in New York, Guo Wengui has riled China’s leaders with his sometimes outlandish tales of deep corruption among family members of top Communist Party officials.

On Saturday, his tales proved too much for one of his favorite platforms for broadcasting those accusations: Facebook.

The social media network said it had blocked a profile under Mr. Guo’s name and taken down another page associated with him. Facebook said the content on both pages had included someone else’s personal identifiable information, which violates its terms of service.

Facebook investigated the accounts after receiving a complaint, according to a spokeswoman.

“We want people to feel free to share and connect on Facebook, as well as to feel safe, so we don’t allow people to publish the personal information of others without their consent,” the spokeswoman, Charlene Chian, said. She declined to say who had complained.

Mr. Guo did not immediately respond to a request for comment. The profile under Mr. Guo’s name was not verified.

Read the rest:

China’s Highest-Profile Fugitive Assailed by Businessman Who Says He Was Framed for Crimes

September 19, 2017

BEIJING — China’s highest profile fugitive, exiled billionaire Guo Wengui, is under attack from a former business partner who claims Guo got him framed for crimes he says he did not commit.

After having a conviction for embezzling 855 million yuan ($130 million) from a company owned by Guo quashed, Qu Long told Reuters he is out for revenge.

“When he returns I will sue him in China,” Qu said of Guo, two days after being released from jail where he served six years of a 15-year sentence. “If he can’t return, I will sue him in the United States. As long as he is on the face of this Earth, I will find a lawyer and make him pay.”

In its ruling last Tuesday, the Hebei High People’s Court said there was not enough evidence to support the embezzlement conviction.

Qu’s interview with Reuters was arranged by the Chinese authorities, who also provided briefings by three members of a special police taskforce investigating Guo, who is living in New York. Chinese officials told Reuters they wanted to get Qu’s narrative out through the Western media to counteract a barrage of internet postings by Guo.

The officials and police involved in the case told Reuters that after an investigation that began in 2015 they had discovered that the charges against Qu were fabricated by Guo and government officials Guo had allegedly bribed, including Ma Jian, the former counter-intelligence chief at China’s spy agency, the Ministry of State Security.

Ma was put under investigation for alleged corruption in 2015 and was expelled from the Communist Party the following year. He remains in detention and Reuters was unable to reach him for comment.

Guo did not respond to requests for comment about Qu. Guo’s New York-based lawyer, Josh Schiller, said Qu’s threat was “further persecution of Guo in order to silence his speech”.

Guo, who left China in late 2014 shortly before Ma was detained, has previously denied bribing government officials and says accusations leveled against him are politically motivated.

The police and other Chinese officials who talked to Reuters provided no evidence to support their bribery assertions in the case. Reuters was unable to independently confirm whether Guo engaged in any wrongdoing.


Guo is currently living in a $68 million apartment overlooking Manhattan from where he has been using social media to make a series of incendiary, though mostly unverifiable, claims of corruption in the top levels of the Chinese government. His campaign has been timed for maximum impact ahead of next month’s critical congress of the ruling Communist Party, which is held only once every five years.

The Chinese authorities are trying to repatriate Guo, who applied for U.S. political asylum earlier this month. In April, at Beijing’s request, Interpol issued a ‘red notice’ seeking Guo’s arrest on corruption-related charges.

Image result for Guo Wengui, photos

Guo Wengui

The same month, a video confession from Ma surfaced online, detailing 10 instances where he claimed he abused his power to benefit Guo in exchange for more than 60 million yuan in bribes, including conspiring to detain and frame Qu.

Guo has said Ma’s testimony should not be believed, arguing it was likely coerced or made under duress. Reuters was unable to independently confirm the events that Ma cited.

Guo and Qu were once friends and business partners, having first met two decades ago and, according to Qu, bonding quickly over a mutual love of motorcycles and sports cars. The two men fell out over a dispute related to the ownership of Tianjin Huatai, an investment holding company, with Guo claiming Qu had reneged on an agreement to hand over control of the company.

Qu was initially detained on suspicion of possessing firearms and he was eventually sentenced on the embezzlement charges. Qu denied any wrongdoing.

(Reporting by Philip Wen; Editing by Martin Howell)



Chinese Communist Party’s most wanted exile Guo Wengui — China adds allegation of rape to existing charges of bribing a top Chinese intelligence official, kidnapping, fraud and money laundering

August 31, 2017


By Gerry Shih

The Associated Press

BEIJING (AP) — Escalating efforts to repatriate one of the ruling Communist Party’s most wanted exiles, Chinese police have opened an investigation on a new allegation, rape, against New York-based billionaire Guo Wengui, who has been releasing what he calls official secrets ahead of a pivotal party leadership conference.

Two Chinese officials with direct knowledge of the investigation told The Associated Press that police are requesting a second Interpol arrest notice for Guo, 50, for the alleged sexual assault of a 28-year-old former personal assistant.

Guo and his representatives did not respond to repeated requests for comment.

The rape allegation represents a new element in the sprawling case that Chinese prosecutors are building against the real estate tycoon, who is being investigated for at least 19 major criminal cases. Allegations against him include bribing a top Chinese intelligence official, kidnapping, fraud and money laundering.

Image result for Guo Wengui, photos

Guo Wengui

The Associated Press reviewed documents related to the rape investigation and confirmed their contents with Chinese official sources in Beijing, who requested anonymity to discuss an ongoing case. The Chinese officials’ disclosures to the AP — an unusual move given the political sensitivity of Guo’s case in China — underscores Beijing’s urgent effort to not only bring a fugitive to heel on criminal charges but also silence a potent irritant in the run-up to a key Communist Party congress during which political stability and the stifling of any challenges to the party head, President Xi Jinping, are paramount.

Although the United States does not have an extradition agreement with China, Beijing hopes that a mounting body of evidence could sway the U.S. government against extending the exiled businessman’s visa, which is believed to expire in October, the Chinese officials said.

Senior U.S. and Chinese officials have discussed the allegations against Guo, according to a third person with direct knowledge of the talks. The Chinese officials are asking the U.S. to cancel Guo’s visa, according to the person, who spoke on condition of anonymity.

It’s unclear what steps Washington plans to take, if any. The White House would not comment on the matter.

The Guo saga highlights how China’s efforts to repatriate elite Chinese seeking refuge on American soil have become increasingly contentious in the bilateral relationship. The U.S. government has often refused Beijing’s demands to extradite corruption suspects, citing flimsy evidence and China’s opaque justice system. But the U.S. has sent back two Chinese fugitives in the past three months, including one suspected of rape.

In recent months, Guo has become a widely followed — and, in the eyes of China’s leadership, highly destabilizing — social media presence by serving up sensational, if mostly unverifiable, tales of corruption and scandal within the Communist Party’s innermost sanctum, including among Xi’s closest allies.

In a daily stream of Twitter posts and YouTube videos tracked by Chinese who follow political gossip, Guo has revealed what he claims are everything from top leaders’ secret homes in California to their bank account information and hidden stakes in business empires. He has vowed to continue airing the party’s secrets until China unfreezes his assets and releases his relatives who have been seized by authorities, he says, as leverage against him.

Pressure on Guo has been building since April when Interpol issued a “red notice” seeking his arrest on corruption-related charges. Chinese authorities later sentenced several of his employees for fraud in June.

Police in central China opened the rape investigation July 5 after a former employee came forward, the officials said.

In interviews with police, the woman described how she was plucked from her human resources position at Guo’s real estate company in Hong Kong in 2015 and sent overseas to become his personal assistant. The woman, whose identity is being withheld by the AP, said that over the next two years, she was raped several times in New York, London and the Bahamas by Guo, who she said demanded sex from female employees as a test of their loyalty.

At times, she said, she languished in virtual detention after Guo’s staff confiscated her smartphone, computer, passport and keys and forbade her from leaving her room in his luxury apartment in the high-end London neighborhood of Belgravia. To prove her case, the woman surreptitiously met a lawyer friend in London earlier this year to give a written statement about her ordeal and kept her underwear, pregnancy tests and abortion pills as evidence, according to police documents.

In a brief phone interview with the AP arranged by Chinese officials, the woman confirmed the account and described fleeing Guo’s apartment to the Chinese Embassy in London in April to apply for a new passport before returning to China. She said she was speaking of her own volition and that police had assured her she could bring charges against Guo without facing repercussions for having worked for a highly sought-after fugitive.

“I just want him to face justice for what he did to me,” she said.

Calls to Guo’s mobile phone since Tuesday evening in New York rang unanswered. Guo also did not respond to multiple requests for comment sent by an AP reporter to his WhatsApp mobile messaging account since Tuesday. Lawyers representing him at the New York firm Boies Schiller Flexner did not respond to requests for comment.

In April, Guo told AP he believed the Interpol notice issued at the time amounted to “state intimidation” and that China had submitted bogus documents to the international police organization.

Interpol declined to comment about the latest warrant China is seeking for Guo’s arrest, referring questions to national authorities as is the policy in ongoing investigations.

Born into poverty in central China, Guo transformed himself from a humble gasoline speculator into a real estate mogul who jet-setted with the likes of former British Prime Minister Tony Blair. Key to his spectacular rise, according to investigative profiles in Chinese media, was an ability to befriend officials in China’s powerful security apparatus who helped him intimidate business rivals, secure deals and gain insights into the secret lives of the Chinese elite.

In one instance, according to these reports, Guo won the rights to build the iconic Pangu tower in 2006 as part of Beijing’s Olympics development project by working with Ma Jian, who later became China’s chief of counterintelligence, to obtain a sex tape of a Beijing vice mayor who had blocked Guo’s initial bid.

In 2015, anti-corruption investigators detained Ma and later accused him of accepting $8.8 million in bribes from Guo, who fled the country. Prior to that, Guo had enjoyed a mutually beneficial relationship with China’s intelligence service, even helping to repatriate overseas fugitives, he later said in his YouTube videos.

Guo in 2015 hired American private investigators to fan out across the U.S. to look for Ling Wancheng, the fugitive brother of a disgraced top aide to a former Chinese president who possibly sought to defect, a person involved in that search effort told the AP. The person was legally barred from discussing the case publicly and spoke on condition of anonymity.

Months later, Chinese agents arrived in the U.S. to search for Ling in a covert operation that angered U.S. officials, underscoring how the issue of politically connected Chinese fleeing to the U.S. has strained relations.

“With political cases such as Ling Wancheng and Guo Wengui, the U.S. seems reluctant to send them back because both have valuable classified information about the top echelons of the party,” said Willy Lam, an expert on Chinese politics at Chinese University of Hong Kong. “This phenomenon is a big plus for the CIA and FBI.”

Lam said that although it is unlikely that Washington would send Guo back given his intelligence value, he added that President Donald Trump “could potentially play the ‘fugitive card’ to put pressure on Beijing to make concessions on issues ranging from trade to North Korea.”

The prospect of becoming a bargaining trip has worried Guo, according to a leaked audio recording of a meeting he held earlier this year with former U.S. Secretary of Homeland Security Jeh Johnson, who offered to lobby the Trump administration for a visa extension.

A spokeswoman for Paul, Weiss, Rifkind, Wharton & Garrison, the law firm where Johnson is partner, said a meeting between Guo and Johnson “several months ago about a possible representation appears to have been recorded and released,” but the firm ultimately did not take on Guo as a client.

“I want to help you,” Johnson says in the edited recording that recently surfaced online. “I am the only member of Barack Obama’s Cabinet that has met with Donald Trump.”

In the recording, Johnson suggests Guo meet with FBI agents and consider donating to human rights organizations to strengthen his case to remain in the U.S. After Guo expresses concern that Trump had already “made a deal” with the Chinese, Johnson and an unidentified woman who appears to be a Guo adviser quickly assure him that Trump would not give him up.

“He would be violating your rights,” Johnson says, while the adviser points out that Guo, who goes by the name Miles Kwok, should also consider his membership in a Trump resort in Florida as a factor working in his favor.

“Miles is a member of Mar-a-Lago,” she says, before Guo bursts into laughter.


AP writers Lori Hinnant in Paris and Julie Pace in Washington contributed to this report.

Chinese conglomerate HNA sues exiled tycoon Guo

June 16, 2017


China’s HNA Group has filed a defamation lawsuit against Guo Wengui, days after it first broke its long silence over what it says were “baseless and meritless” allegations by the exiled billionaire, court documents show.

The aviation-to-financial services group said Guo had injured HNA’s “business reputation arising from repeated false and defamatory statements”, according to a summons filed in the New York State Supreme Court on Thursday.

Guo did not respond immediately to requests for comment by Reuters, nor did he immediately mention HNA’s lawsuit on Twitter, where he often issues statements.

The summons, seen by Reuters, cites allegations that “officials in China’s Communist Party and their relatives are undisclosed shareholders” in the group, and that subsidiary Hainan Airlines had allowed government officials and their relatives to use its aircraft “for purely personal reasons”.

HNA said in a statement posted on its website late on Thursday that Guo’s allegations had harmed its reputation and that it intended to vigorously pursue its claim.

Chinese-born Guo, who lives in New York, has emerged in recent months as a political threat to the Chinese government in an acutely sensitive year, making clear that he wants to disrupt a five-yearly congress to be held this autumn.

Through Twitter posts and video blogs, Guo has unleashed a deluge of corruption allegations against high-level Communist Party officials.

Guo began making specific allegations against HNA in April but the group did not respond publicly until last week, when it issued a denial and threatened legal action.

Guo has said he will soon make additional revelations in a scheduled live online interview with U.S.-based Chinese-language political gossip site Mingjing.

Last week, he urged HNA to make good on its threat to sue.

“If it’s just me speaking, that’s no good,” he said in a livestreamed video. “Only their replies can prove the value and the truth of the matter. This is critical.”

Several other legal cases are pending against Guo. Nine Chinese creditors launched a $50 million lawsuit in New York on Tuesday to recover outstanding debts.

Last week, three of Guo’s senior employees told a Chinese court he had instructed them to fraudulently obtain loans running into hundreds of millions of dollars.

Guo is also being sued in New York for defamation by the chairman of property developer SOHO China, Pan Shiyi, and prominent journalist Hu Shuli.

He has provided scant evidence to back up his accusations, but his standing as a former billionaire insider, and his close ties with a disgraced former senior intelligence official, have made him a center of attention in Beijing political circles.

The Chinese government requested that Interpol issue a global “red notice” for Guo’s arrest in April.

(Reporting by Philip Wen and Matthew Miller; Editing by Paul Tait and Edmund Klamann)