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POLITICS & LAW

By Xu Heqian and Ren Qiuyu / Jul 16, 2019 12:17 PM / Politics & Law

Photo: IC Photo

Photo: IC Photo

The current mayor of Taiwan’s Kaohsiung has clinched the opposition’s nomination for the island’s leadershp election set for next year.

Han Kuo-yu beat out Foxconn founder Terry Gou in the Kuomintang (KMT) primary and will face off with the Democratic Progressive Party’s nominee in 2020, the incumbent Tsai Ing-wen.

Han was selected by the KMT based on telephone polling, winning a solid 44.8% of support. Gou came in second, with 27.7% of support. Han’s lead was higher than expected since the two have been close in polls since they announced their respective candidacies earlier this year.

Some analysts suspect that Gou may still run as an independent candidate.

Contact reporter Ren Qiuyu (qiuyuren@caixin.com)

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POLITICS & LAW

By Zeng Jia and Zhao Runhua / Jul 10, 2019 02:07 PM / Politics & Law

Photo: VCG

Photo: VCG

The U.S. government will allow companies’ to sell products to Huawei that pose no threat to national security by issuing licenses, Secretary of Commerce Wilbur Ross said Tuesday.

The announcement was in keeping with President Trump’s promise during the June G20 summit, when China and the U.S. sought to resume halted trade talks. Ross did not elaborate on expected dates of the issuances, nor did he specify which products will meet the license requirements.

Despite allowing sales to Huawei, the Chinese telecom company will remain on a so-called “Entity List” which could deny applications of licenses, Ross said.

President Trump declined to comment when asked by Caixin during the G20 summit whether it was possible to remove Huawei from the blacklist.

Read more on Huawei

Contact reporter Zhao Runhua (runhuazhao@caixin.com)


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By Zhao Runhua / Jul 05, 2019 11:46 AM / Politics & Law

Sun Bo. Photo: VCG

Sun Bo. Photo: VCG

The former general manager of one of China’s largest shipbuilders has been sentenced to 12 years in prison and an 800,000 yuan ($116,445) fine for corruption and "abuse of power," state-run CCTV reported.

Sun Bo abused his position at China Shipbuilding Industry Corp. (CSIC) and broke corporate accounting regulations for the benefit of his own career — a charge that usually refers to falsifying financial records — while causing “significant losses” to the national interest, a local court in Shanghai ruled Thursday, without providing further details. The court found that Sun and his wife had received bribes worth nearly 9 million yuan from 2000 to 2016.

Sun, whose trial took place in March, pleaded guilty and said he would not appeal. The court said it had reduced Sun’s penalties as he had been honest about his crimes and had returned all the bribes.

Sun was previously reported to have also been investigated for leaking national secrets in addition to corruption. The court confirmed Sun's case had involved national secrets, without specifying if he had leaked them.

Chinese authorities announced they were investigating Sun in June 2018, three years after he became the general manager of the shipbuilder and the deputy secretary of its Communist Party committee. He was arrested in January. 

Related: Shipbuilding Giants Float Merger Plans

Contact Reporter Zhao Runhua (runhuazhao@caixin.com)

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By Isabelle Li / Jul 02, 2019 06:38 PM / Politics & Law

Photo:VCG

Photo:VCG

The Chinese government says it will inspect hundreds of popular apps and 50 major internet companies by the end of October for cybersecurity issues including data leaks and abuse of user data.

The inspection, which will also cover the country’s three big telecom network operators, China Mobile, China Unicom and China Telecom, is part of a national data security campaign to be rolled out over the next 12 months, the Ministry of Industry and Information Technology (MIIT) announced Monday.

The MIIT, which didn’t name the internet companies or the 200 apps it said it would inspect, also plans to put in place at least 15 sets of industrywide standards and regulations for data and cybersecurity over the next 12 months.

Lax oversight of data collection has allowed China’s internet companies to rapidly fine-tune the way they target users. But a series of data-related scandals in recent months has caught the attention of regulators.

Related: Regulators Issue More Draft Rules to Tighten Up Lax Data Protection

Contact reporter Isabelle Li (liyi@caixin.com)

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By Zhao Runhua / Jul 01, 2019 07:04 PM / Politics & Law

Photo: VCG

Photo: VCG

Wang Pengyun, strategic planning director at the state-owned China Nonferrous Metal Mining Group (CNMC), has been placed under investigation for suspected “serious violations of discipline and law,” — a euphemism for corruption, China’s top corruption watchdog announced Monday (link in Chinese).

Details of the investigation have not been made available. Wang, who began working in the state-owned metal mining sector in 1982, joined CNMC in 2017.

Contact reporter Zhao Runhua (runhuazhao@caixin.com)


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By Wang Mengyao and Han Wei / Jun 25, 2019 03:32 AM / Politics & Law

Huang Bingsong

Huang Bingsong

A former school principal in Hunan province was placed under investigation after the recent discovery of a teacher’s remains resolved a 16-year-old missing-person case.

Huang Bingsong, former principal of Xinhuang No. 1 Middle School, is being investigated by the Communist Party’s anti-graft watchdog in Xinhuang county, Hunan Province, a local official news portal reported Monday. Huang has been retired from the school for nearly 10 years.

Huang denied any knowledge of the teacher’s death. But he is a relative of a construction contractor named Du Shaoping, who confessed to killing the teacher. Huang acknowledged that he didn’t follow the rules in bidding and funding the construction project, according to the official Xinhua News Agency.

Local police said during the weekend that the remains of a teacher, Deng Shiping, were found buried under the field of the Xinhuang No. 1 school after they arrested Du in April in a crackdown on organized crime. Du confessed to killing and burying a teacher in January 2003.

The teacher was reported missing when he worked at the school overseeing the construction of a sports facility. Deng refused to approve the facility, citing poor construction quality, and accused the contractor Du of embezzlement, according to Deng’s son.


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By Zhao Runhua, Han Yi and Han Wei / Jun 21, 2019 06:50 PM / Politics & Law

Zhang Xiaolei is questioned by police on Jan. 14, 2018. Photo: VCG

Zhang Xiaolei is questioned by police on Jan. 14, 2018. Photo: VCG

Zhang Xiaolei, the man behind one of China’s largest illegal online fundraising case in history, has been sentenced to 15 years in prison for "fundraising fraud," according to state-run broadcaster CCTV.

Zhang, who was head of internet finance company Qbao.com, used his company to raise 70 billion yuan ($10 billion) illegally, a source close to the authorities told Caixin last year. The court in Nanjing that sentenced Zhang said it would also seize 100 million yuan worth of his personal assets.

The company promised high annualized investment returns to investors as long as they made a required amount of deposits and participated in promotional activities such as signing into their Qbao accounts every day. The company claimed that depositors who placed 1 million yuan with Qbao could receive a bonus of as much as 1,000 yuan each day.

Qbao said it was investing the deposits into promising enterprises to generate gains to pay members. But it mainly used funds raised from new investors to pay yields for existing investors, police involved in the investigation said. Some of the money raised was also used by Zhang for “lavish personal consumption,” the court said.

Qbao’s model was ultimately unsustainable. Unable to pay back investors, Zhang was accused of running a Ponzi scheme and surrendered to police in 2017.

Zhang pleaded guilty to the charges against him, and said he won’t appeal.

Contact reporter Zhao Runhua (runhuazhao@caixin.com)

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By Yang Ge and Teng Jing Xuan / Jun 21, 2019 01:21 PM / Politics & Law

Photo: VCG

Photo: VCG

After weeks of guessing, major iPhone maker Foxconn has finally announced who will fill the shoes of its legendary founder and Chairman Terry Gou, who is stepping down to make a bid to become the next leader of Taiwan.

And the award goes to: Liu Yang-wei, the current head of Foxconn’s semiconductor unit, the Taipei-listed company announced Friday.

The change will take effect on July 1, ending Gou’s decades-long tenure as chairman of Foxconn, which is also known as Hon Hai Precision Industry Co. Gou announced in April that he plans to run in the 2020 election for Taiwan’s top office, on behalf of the Kuomintang party.

Contact reporter Teng Jing Xuan (jingxuanteng@caixin.com)


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By Han Wei / Jun 20, 2019 03:58 AM / Politics & Law

Yu Shan.

Yu Shan.

The chief of a provincial government-backed newspaper became the latest target of China’s anti-corruption crackdown.

Yu Shan, president and Communist Party chief of Hebei Daily, has been placed under investigation on “suspicion of severe violations of law and discipline,” the provincial anti-graft watchdog said Wednesday in a brief statement.

The graft buster didn’t provide any detail about Yu’s probe, but the phrase often refers to corruption.

Yu, 58, became the chief of Hebei Daily in December 2014. Previously, he worked as the publicity director of the Tangshan city government in Hebei.


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By Wang Mengyao, Zhong Xin and Zhao Runhua / Jun 19, 2019 06:49 PM / Politics & Law

A Vienna Hotel in Shenzhen. Photo: VCG

A Vienna Hotel in Shenzhen. Photo: VCG

Chinese hotel chain Vienna Hotel has been legally named after Austria’s capital since 2012 — but now a local government is complaining that the name shows a “servile attitude to foreign things.”

The criticism, leveled by the Hainan province government, is part of a national campaign against “improper” building and place names.

One residential development in West China’s Xi’an city has been told its name, “Long’s Capitol Hill Residential Area,” is an "exaggeration" of reality. Meanwhile, “Coral Palace,” the name of a building in Hainan, is allegedly also too “feudal” for the government’s taste.

These places and businesses have been asked to change their names, prompting skepticism from social media users and owners, who say they can’t understand why they should go through the logistical hassle of changing names that have been in place for years.

At the same time, places named “Lenin Park” and “Bethune International Peace Hospital” — named after Canadian doctor and Communist hero Norman Bethune — haven’t been asked to change their names.

The national campaign, which started in December, is aimed at ridding China of place names that "exaggerate functions, use Chinese characters for foreign names, pursue strangeness, or imply vulgar or feudalistic meanings."

An official who wished to stay anonymous due to the sensitivity of the issue told Caixin that local governments knew the changes would be met with skepticism, but had no choice but to “implement policies decided by the top.”

An official from Xi’an told Caixin that the government would offer compensation to those living in or owning affected buildings.

Related: Agriculture Ministry Rejects Claimed Swine Fever Vaccine Fix

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By Wang Mengyao and Han Wei / Jun 14, 2019 03:15 AM / Politics & Law

Shen Jian. Photo: VCG

Shen Jian. Photo: VCG

Shen Jian, a retired official of Nanjing, the capital city of eastern China’s Jiangsu province, committed suicide, several sources told Caixin.

The 64-year-old Shen was the chairman of the Nanjing People's Political Consultative Conference between 2013 and 2018, the top political advisory body of the city.

Shen retired from the advisory body in January 2018. The Nanjing government has confirmed Shen’s death, sources said.

Shen was a veteran of Nanjing’s officialdom, starting as a low-level civil servant at a district government in 1975. He rose to deputy mayor of Nanjing in 2008, oversaw the city’s development and reform, major construction and financial sector.

Nanjing, the second most populous city in East China, has been rocked by the central government’s corruption crackdown since the downfall of former Mayor Ji Jianye in 2013. Several other senior leaders in the city, including a former party chief and Ji’s successor also fell under graft investigation in following years.


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By Wang Mengyao and Tang Ziyi / Jun 12, 2019 03:27 PM / Politics & Law

Yun Guangzhong. Photo: Hohhot Municipal Party Committee

Yun Guangzhong. Photo: Hohhot Municipal Party Committee

The Communist Party chief of Inner Mongolia’s capital, Hohhot, has been placed under investigation on suspicion of corruption, the party’s top graft buster announced Tuesday.

Yun Guangzhong, who became party chief of Hohhot in November 2016, is suspected of “severe violations of law and discipline” — a euphemism for corruption — the Central Commission for Discipline Inspection said, without giving further details.

Yun was last seen in public on June 6, when he gave a speech at a law enforcement conference, according to local state-run media.

Related: Liquor Giant Moutai’s Ex-Chairman Booted From Government Advisory Body

Contact Reporter Tang Ziyi (ziyitang@caixin.com)


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By Zeng Jia and Han Wei / Jun 11, 2019 02:49 AM / Politics & Law

Photo: Australian Federal Police

Photo: Australian Federal Police

Authorities in Australia seized three properties from a Chinese national targeted by Chinese investigators in a joint graft probe with China, local police said during the weekend.

The properties, including a two-bedroom apartment, a five-bedroom house and a building that used to house a supermarket, have a combined value of A$4.2 million ($2.93 million), the Australian Federal Police said in a statement. The assets were owned by a 32-year-old Chinese national under a fake name. The owner is believed to have moved to the Caribbean, the police said.

The seized properties will be sold and proceeds will be used for law enforcement initiatives, the police said.

It is the first asset seizure under a joint law-enforcement agreement between Australian and Chinese public security authorities since the Joint Agency Arrangement on Economic Crime Cooperation was re-signed in December.

The asset confiscation came after China’s Ministry of Public Security asked for assistance from Australia in 2016 to identify two Chinese nationals who allegedly defrauded investors in China. The suspects fled to Australia in 2015 and used the money to purchase properties, jewelry and vehicles, according to police.


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By Zhao Runhua / Jun 10, 2019 05:04 PM / Politics & Law

Dai Zigeng. Photo: IC Photo

Dai Zigeng. Photo: IC Photo

The former publisher of a major state-owned newspaper is under investigation for “serious violations of discipline and law” — a euphemism for corruption, a Beijing corruption watchdog announced Monday.

Dai Zigeng, vice chairman at state-owned financing platform Beijing Cultural Investment Development Group and a deputy secretary of the company's Communist Party committee, was once head of the Beijing News, an outlet known for investigative journalism.

He had also previously worked at the Communist Party-owned newspaper Guangming Daily for nearly 20 years, and only joined the investment platform in 2017.

The Beijing municipal supervisory commission didn’t offer any further details on the investigation into Dai. It’s unclear if the investigation is related to Dai’s previous roles.

Contact reporter Zhao Runhua (runhuazhao@caixin.com)

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By Shen Xinyue and David Kirton / Jun 10, 2019 03:39 PM / Politics & Law

Former Moutai chairman Yuan Renguo.Photo: VCG

Former Moutai chairman Yuan Renguo.Photo: VCG

Chinese hard-liquor giant Kweichow Moutai has stepped up its monitoring of top executives after a former chairman was arrested for allegedly becoming drunk on power and taking bribes from government officials.

The company’s leadership will now have to register all communications with public officials interested in becoming involved in Moutai’s lucrative retail business, according to a notice posted by authorities in the company’s home province of Guizhou, in Southwest China.

It comes in the wake of the arrest and dismissal of former Moutai chairman Yuan Renguo in May, after he “seriously violated Party discipline and national laws and regulations,” according to the Central Commission for Discipline and Inspection. Yuan allegedly abused his power to bestow retail licenses in order to curry favor with local politicians, a source close to the company told Caixin.

Moutai is one of the country’s most famous brands of the Chinese grain alcohol baijiu. The Shanghai-listed company became the world’s most valuable liquor company in 2017, when its market value exceeded that of British whisky giant Diageo.

Related: Liquor Giant Moutai’s Ex-Chairman Booted From Government Advisory Body

Contact reporter David Kirton (davidkirton@caixin.com)

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By Han Wei / Jun 06, 2019 11:56 PM / Politics & Law

Gu Guoming. Photo: VCG

Gu Guoming. Photo: VCG

The head of the Shanghai branch of the Industrial and Commercial Bank of China Ltd. (ICBC), the country’s largest state-owned bank, is under investigation by the Communist Party’s anti-graft watchdog.

Gu Guoming, party chief and president of ICBC Shanghai, has been placed under investigation for "suspected serious disciplinary violations," China's Central Commission for Discipline Inspection (CCDI) said in a statement Thursday.

The graft buster didn’t provide any detail about the investigation, but the phrase often refers to corruption.

Gu last appeared in a media report May 27 when he attended a ceremony at the Shanghai Futures Exchange.

Contact reporter Han Wei (weihan@caixin.com)


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By Liu Yukun and Zhao Runhua / Jun 05, 2019 04:32 PM / Politics & Law

Photo: VCG

Photo: VCG

China on Wednesday said it is fining Ford’s joint venture 162.8 million yuan ($23.56 million) for violating the country’s anti-monopoly law.

Changan Ford Automobile, the tie-up between China's Changan Automobile and U.S. carmaker Ford, had been restricting the low end of its dealers’ sales prices since 2013 in the southwestern city of Chongqing, where the firm’s headquarters is located, according to an announcement from the State Administration for Market Regulation (SAMR).

SAMR said the practice had jeopardized the dealers’ price-setting rights, and had thus caused a price monopoly. Some insiders said the case reflects the industry’s dilemma when purchasing willingness drops and sellers compete with each other with deals to attract buyers.

Under such circumstances, dealers may actually want carmakers to internally set low-end prices, to help prevent price wars, said one industry insider who wished to stay anonymous due to the sensitivity of the issue. However, the practice was bound to result in violation of the anti-monopoly law, the person said.

The fine is the equivalent to 4% of Changan Ford’s 2018 sales revenues in Chongqing.

Related: Shenzhen, Guangzhou to Ease Car Ownership Restrictions

Contact reporter Zhao Runhua (runhuazhao@caixin.com)


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By Isabelle Li / Jun 04, 2019 05:29 PM / Politics & Law

Photo: VCG

Photo: VCG

Another senior figure at Chinese state-backed chemical giant Sinochem Group has fallen from grace.

Du Keping, the former deputy general manager of Sinochem, has been expelled from the Communist Party of China for breaking party rules and regulations, the Central Commission for Discipline Inspection (CCDI) announced on its website Tuesday.

Du was put under investigation in December for suspicion of “serious violation of laws and discipline,” a euphemism for corruption.

The latest statement said he was found to have resisted investigation and violated “the Eight-Point Regulations” — a series of rules against the abuse of official privileges introduced in 2012 — among other accusations. The CCDI also said Du was suspected of serious crimes related to his job, and that prosecutors were taking over the case.

Du is the second high-ranking figure from Sinochem to face charges in recent months. His superior, former Sinochem general manager Cai Xiyou, was sentenced to 12 years in jail and a 3 million yuan fine for corruption in December. 

Du joined Sinochem in 2006 but lost his job as the deputy chief in 2017 before the investigation into his misconduct was announced.

Related: Former Sinochem Chief Gets 12 Years in Jail for Graft

Contact reporter Isabelle Li (liyi@caixin.com)


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By Wang Mengyao, Zhao Runhua and Tanner Brown / Jun 04, 2019 11:59 AM / Politics & Law

Beijing's Fourth Intermediate Court. Photo from the court's official website.

Beijing's Fourth Intermediate Court. Photo from the court's official website.

The rotten apple doesn’t fall far from the tree, it appears.

The secretary of China’s fallen former vice finance minister himself has gone down, receiving a two-year prison sentence for corruption.

Liu Xiaohua, secretary to convicted ex-Vice Finance Minister Zhang Shaochun, took 600,000 ($87,000) in bribes, a Beijing intermediate court said recently.

Liu’s 600,000 yuan pales in comparison to what his boss was convicted of. In December, Zhang — China’s longest-serving vice finance minister — pleaded guilty to accepting 67 million yuan ($9,700,000) in bribes, for which he was given a 15-year prison sentence.

Interestingly, secretary Liu was actually detained by police before the investigation in Vice Minister Zhang began. And the court said last week it was lenient on Liu because he cooperated with investigators and offered of details not known to regulators — though it stopped short of saying Liu ratted out his boss.

As for Liu, his briberies were bread-and-butter kickbacks. In 2010, an entrepreneur gave Liu 200,000 yuan cash in a Starbucks in Beijing to get his son into a leading higher education institution.

Liu also accepted 300,000 yuan in cash and shopping cards worth of 100,000 yuan in exchange for favors including attempting to persuade leaders at the Postal Savings Bank of China to allow a private company to become a strategic investor of the bank’s Hong Kong IPO.

Related: China Pushes to Restore Morale at Corruption-Tainted Science Institute


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By Cui Xiankang, Tang Ziyi and Zhao Runhua / Jun 03, 2019 06:37 PM / Politics & Law

Feng Lizhi. Photo:Hunan Province Department of Civil Affairs

Feng Lizhi. Photo:Hunan Province Department of Civil Affairs

The former deputy head of China’s national lottery system has been sentenced to 17 years in prison and fined one million yuan for “corruption” and “abuse of power,” according to a court filing released Monday.

Feng Lizhi, 59, who helped oversee the China Welfare Lottery Distribution and Management Center, illegally took 5.85 million yuan ($847,000) worth of bribes — including gold bricks and property — during his official posts between 2010 to 2013, the filing said.

Feng also served as chairman of Beijing Zhonglottery Online Technology Co., the actual operator of the welfare lotteries.

Feng's abuse of power alone cost public coffers 160 million yuan in losses, the court said.

Feng is the latest of multiple senior lottery officials brought down after a 2015 audit and subsequent special inspection uncovered extensive corruption in the sector.

Related: Former Lottery Official Under Corruption Probe

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