The Shanghai pension scandal just gets hotter and hotter. First Shanghai’s top Party chief, Chen Liangyu, was sacked for gross ethics violations, and now the imminent IPO of Shui On could be endangered by the company’s possible entanglement with the scandal. And investigators have said that there may be more purges to follow.
Most of the commentary on the subject portrays it as a consolidation of power on the part of Hu Jintao. With the party congress coming up next year, many positions of power will change hands, and Hu naturally wants to get his allies into as many posts as possible. The thought that the president might be cracking down on graft simply because it’s the right thing to do is dismissed.
But what about a third possibility? I’ll call it the Enron option: namely, that when routine corruption gets so out of hand as to be potentially damaging to the system as a whole, somebody has to pay. Consider Chen Liangyu and whoever else goes down with him as the Ken Lay and Jeff Skilling of the Shanghai pension scandal. My theory is that, just like with the Enron scandal, this pension thing got so out of hand and so obvious that somebody had to take the rap, to show the people that the leaders are doing something about corruption. Everybody’s happy: the leaders gain face for upholding justice, the people see that justice has been done; but meanwhile, the system remains as it is and things proceed as they always have, with the powerful exploiting the powerless.