Liang Jing: Issues Raised by the Guo Wengui Affair

Armed with his Twitter and YouTube accounts and a collection of corruption allegations against top Party, business, and media leaders in China, exiled billionaire has for months been engaged in a heated publicity battle with Beijing. Guo, also known by the name Miles Kwok, is a real estate tycoon with known ties to the Ministry of State Security, who left China in 2013 and is currently in the U.S. On Twitter, Guo claims to be “fighting for rule of law” on behalf of his “1.4 billion compatriots,” while fans portray him as a Chinese folk hero; Beijing, on the other hand, describes him as a fugitive criminal suspect.

As Guo continues to gather fans from his social media accounts, several employees of his company mentioned his name while confessing to fraud in an unusually public trial in Dalian earlier this month, and litigation against him has been stacking up in New York. Huang Yan, the current vice-minister of the Ministry of Housing and Urban-Rural Development and the subject of several salacious corruption allegations levied by Guo, has reportedly filed a lawsuit against Guo in New York for libel. This comes on the heels of other suits being filed against Guo in NY: one by nine Chinese creditors to seek $50 million in outstanding debts after failed attempts to seek redress in China, and another from SOHO China co-founder and CEO Pan Shiyi. Meanwhile Hainan Airlines filed a separate defamation lawsuit against Guo for his allegations. Guo has announced on Twitter that he has hired high-profile lawyer and “good friend” David Boies as his private counsel. 

On June 16, Mingjing News streamed a new interview with Guo, in which he let loose more explosive (but largely unverified) accusations, most aimed at czar and his wife, Yao Mingshan (Bill Bishop summarized these in his June 19 Sinocism newsletter). Both the Mingjing website and YouTube were very difficult to access for part of the interview broadcast, leading to speculation that they had been hacked to prevent his allegations from being heard.

Last month, as China-watchers were struggling to make sense of the unfolding Guo Wengui story and Guo’s fans were echoing his proliferating collection of politically-charged catchphrases on social media, Radio Free Asia resident political analyst Liang Jing published his burgeoning thoughts on the story. This is the first of several translated Guo-related commentaries that CDT will publish over the next week:

Issues and Lessons Raised by the Guo Wengui Affair

Liang Jing, May 9, 2017

A long-term observer of Chinese politics, I have to admit I greatly underestimated the potential impact of the Guo Wengui incident. Guo has turned out to be, I now agree, the biggest Chinese political black swan of 2017. This raises a question: how could he, a parvenu with little family background, have such huge political ability as to bring such calamity to the highest authorities in China?

Some will say that this is because he, Guo Wengui, has so much chutzpah. This is so, but some other parvenus, such as Ling Jihua’s brother Ling Wancheng, have had just as much. He must know more than Guo Wengui, yet he has not dared to directly, and with such great fanfare, confront the authorities as has Guo. Others will say that Guo dared to openly challenge China’s  highest authorities thanks to his huge wealth. This is true too, but such reasoning can run the other way: the more money you’ve got, the more you should conduct your dealings with the authorities out of the spotlight, rather than choose a fight to the death.

Reading Qin Weiping’s interview with Guo Wengui, I found some answers from the story of how Guo Wengui made his fortune, and got some useful ideas.

According to his own account, there are major differences in the way Guo made his initial fortune compared with a lot of nouveaux-riches; it was just these differences that distinguish him from most of them. Like many of them, Guo’s first pot of gold benefited from ‘foreign capital’ and the regime’s many concessions to foreign investment. The difference, though, was that those choosing Guo Wengui as an investment partner were picking someone with no real background or money, and both sides got 50% of the rights. If this is true, Guo’s collaborators not only fancied his ‘savvy’ and ‘virtue’; more importantly, it was precisely in his youth and background that they saw a chance of ‘enlightening’ Guo while working with him. This was of course a high-risk gamble, but now it seems one that Guo’s ‘aristocrats’ of those days have won. Not only have they gained huge returns on investment—they succeeded in enlightening him. And this road to ‘enlightenment’ made, I think, Guo Wengui’s experiences very different from that of most parvenus, smoothing his entry into networks of the international wealth and power elite that China’s rich generally cannot enter. In other words, Guo acquired a cultural and social background that the run of China’s nouveaux-riche can never gain.

This is important in understanding Guo Wengui’s behaviour and how he could establish close relations with the Ministry of State Security. In terms of behaviour, a major reason for his insistence that his assets were ‘cleaner’ than those of other members of the nouveaux-riches was he lacked political patronage at home, so that he had to be ‘more law-abiding’ in business, yielding to the powerful elite whenever he encountered them. But he could also use his unique international resources for ‘meritorious service’ to his country, and could ‘legally’ access opportunities to accumulate wealth that people lacking a power background cannot.

It was this special background and experience, in my view, and especially this special process of ‘enlightenment’, that allowed an insignificant member of the ‘ant tribe’ to become a ‘world citizen’, who today dares challenge the highest authorities of the CCP. Guo Wengui’s elite patrons of that time couldn’t have imagined such a result, because their ‘enlightening’ him stemmed from their own values and interests, without political designs.

A further important factor in Guo’s ability to stir up the political situation in China in 2017 is that the regime seriously underestimated him: not only his political courage, but his political intelligence as well. Guo may not have chosen to go so far had the authorities not had such arrogance bred by power. I can’t judge how much farther the game can go between a black swan like Guo and tyrannical power, but the lessons of history are quite clear: contempt and arrogance towards contenders is the most fatal weakness of power, and the most difficult to overcome. [Chinese]

Translation by . Liang Jing is an independent commentator with a background in official policy research in the PRC, whose current affairs column has been running on Radio Free Asia’s Cantonese website for 20 years.