Sept. 29 (Bloomberg) —China’s Communist Party expelled former Politburo member Bo Xilai yesterday and said he will face criminal charges, reaching consensus on a murder scandal that roiled the political elite and clearing the way for a once-in-a- decade transition of power in November.
Bo abused his power, bore “major responsibility” in the murder of British businessman Neil Heywood and had improper sexual relations with several women, the official Xinhua News Agency said. China’s Politburo removed him from public office and transfered his case to the judicial system, Xinhua said.
“They’ve thrown the kitchen sink at him,” said Steven Tsang, director of the China Policy Institute at the University of Nottingham in the U.K. The announcement “means the party has a basic lineup for the leadership. It’s a good thing for them. They’ve reached agreement on the succession,” Tsang said.
The decision is part of an effort by China’s leaders to deal decisively with a scandal that embarrassed the Communist Party, saw Bo’s wife convicted of murder and upset plans for a smooth transition of power set for this year. The condemnation of Bo, son of one of the founders of the People’s Republic of China, aims to paint his case as an aberration at a time when the party is trying to bolster its legitimacy amid a widening wealth gap and rising unrest.
In a separate Xinhua announcement, the Politburo decided it would hold the 18th Communist Party Congress, where China’s next generation of leaders will be anointed, beginning Nov. 8.
Bo was the party chief of southwestern China’s Chongqing Municipality until he was ousted in March. He was suspended from China’s Politburo in April and accused of serious disciplinary violations, as his wife, Gu Kailai, was accused in the murder of British businessman Neil Heywood.
Bo’s wrongdoing dates back to his time as mayor of Dalian, governor of Liaoning province and minister of commerce, Xinhua said. It said investigators had “found clues to his suspected involvement in other crimes.”
Gu was convicted Aug. 20 and sentenced to death with a two- year reprieve after she confessed in a one-day trial to poisoning Neil Heywood in a hotel room because she believed he posed a threat to her son as a result of a financial dispute.
A month later, Wang Lijun, the former Chongqing police chief and Bo protege who exposed evidence of Gu’s crime to U.S. diplomats, was convicted on all four charges connected to the case, including bribe-taking and abuse of power. Prosecutors said he tried to cover up the murder.
A Sept. 19 Xinhua account of Wang’s trial recounted how Chongqing’s most senior official slapped Wang across the face when he presented evidence that Gu was involved in the murder. Although Bo was not identified by name, he was the most-senior official in the city at the time.
“Bo’s behaviors have brought serious consequences, badly undermined the reputation of the Party and the country, created very negative impact at home and abroad and significantly damaged the cause of the Party and people,” Xinhua said.
China’s new leaders face a slowing economy and also have to contend with public discontent over official corruption and a widening wealth gap. The economy may struggle to reach its 7.5 percent expansion target this year, according to data from areas including production and exports, compared with growth exceeding 9 percent when President Hu Jintao and Premier Wen Jiabao took power in 2003.
The leadership transition also follows the worst quarterly loss for Shanghai stocks this year. TheShanghai Composite (SHCOMP) Index lost 6.3 percent this quarter, the most since the three months ended December, on concern the slowdown is deepening. The gauge is valued at 9.7 times estimated earnings, compared with the average of 17.9 since Bloomberg began compiling the weekly data in 2006.
Yesterday’s news is “quite positive to the economy and markets for two reasons,” Lu Ting, chief Greater China economist at Bank of America Corp. in Hong Kong, wrote in a note to clients. “One, it will significantly reduce perceived political and economic risks; two, it will help end policy paralysis.”
Bo’s ouster has focused attention on the accumulation of wealth by politically-connected families. The extended families of Bo and Gu, for example, accumulated at least $136 million in company shares and property, according to regulatory and corporate filings.
At a briefing days before he was ousted, Bo denied that his son Bo Guagua, who attended Oxford and Harvard University’s John F. Kennedy School of Government, drove a Ferrari. Bo Guagua graduated from Harvard with a master’s degree this year.
The severity of the charges against Bo fits a past pattern “wherein the party decided that no one should be portrayed as having elements of both good and evil within them — they were either wholly devoted to the party and the people or wholly evil and against them,” said June Teufel Dreyer, a professor of political science at the University of Miami who focuses on China. “A domestic version of Mao’s ‘whoever is not with us is against us’ in foreign policy.”
A former commerce minister, Bo, 63, rose to prominence for his moves in Chongqing to boost social spending and state-led financing, and revive songs and slogans from the era of Chairman Mao Zedong. Bo’s crackdown on organized crime, called “da hei,” or “strike black,” was a cornerstone of his tenure.
While in Chongqing, a municipality whose population of 29 million is larger than that of any U.S. state except California, Bo sought to balance the fastest municipal growth rate in the country with measures to stop millions of rural migrants being left behind by China’s industrial boom.
The number of so-called mass incidents — strikes, protests and riots — doubled nationwide in the period from 2006 to 2010 to 180,000 a year, Sun Liping, a sociologist at Beijing’s Tsinghua University, wrote last year.
Bo was touted as a possible candidate for the Politburo Standing Committee, the country’s most powerful ruling body, whose new membership will be unveiled at the end of the 18th Communist Party Congress.
Bo’s downfall was set in motion by Wang, who led his battle against organized crime in Chongqing. In early February, Wang fled to the U.S. Consulate in Chengdu, where he outlined to American officials a plot of money laundering, betrayal and murder involving Gu, according to current and former U.S. officials briefed on the matter.
Wen hinted at a rift when he told a briefing in Beijing a day before Bo was ousted as Chongqing party secretary that the city’s leaders must reflect on Wang’s flight to the U.S. consulate. In an indication of deeper ideological differences with Bo, Wen warned of the dangers of returning to the chaos of the 1966-76 Cultural Revolution, which Mao spearheaded.
Bo’s isn’t the first case of a Politburo member to be referred to the criminal justice system. Former Beijing party chief Chen Xitong was imprisoned for corruption following his 1995 Politburo expulsion and former Shanghai party boss Chen Liangyu was sentenced to 18 years in prison in 2008 for taking bribes after he was expelled from the Politburo in 2006.
Chen was replaced in Shanghai by Xi Jinping, the current vice president, who is forecast to take over the top party and government positions within the next year.
China’s leadership shakeup: What’s next for Bo Xilai and the Communist Party
A government meeting today answered two anticipated political questions: How the controversial Bo would be treated, and when the party would be ready to unveil its new leaders.
Mr. Bo will be handed over for criminal investigation and trial, the state news agency Xinhua said, ending speculation that the former high-flyer would be subjected only to party disciplinary measures.
The decision on Bo’s fate, taken Friday by a meeting of the 24 member Politburo – the party’s second highest body – also cleared the way for an announcement that the 18th party congress will open on Nov. 8.
The Politburo meeting thus answered two questions that had bedeviled the Chinese political scene for several months: How would the controversial Bo be treated, and when would the party be ready to unveil its new leaders at a national congress.
That meeting had apparently been delayed by infighting at the highest level of the party. Analysts suspected it had to do with how to handle Bo, whose wife, Gu Kailai, was convicted last month of murdering British businessman Neil Heywood and whose former top aide, Wang Lijun, was sentenced last week to 15 years in jail for covering up the murder, taking bribes, and seeking to defect to the US.
“Bo has his supporters and the leadership needed a collective decision to send him to trial” before agreeing when to convene the congress, due to seal a once-in-a-decade leadership transition, says Michael Davis, a politics professor at the Chinese University of Hong Kong. “That decision has not been easy to reach.”
A government statement carried by Xinhua said that Bo, who has been in detention since he was fired in March as party chief of the southwestern megalopolis of Chongqing, had “abused his powers of office, committed serious errors and bears a major responsibility in the Wang Lijun incident and the intentional homicide case of Bogu Kailai [Bo’s wife].”
It is unclear when Bo will stand trial. “Chinese justice can be pretty quick,” says Professor Davis. “The critical thing is clearing up this mess so that it does not interfere with the transition.”
The Xinhua statement did not specify the crimes of which Bo stands accused, but said that he had been involved in the murder of Mr. Heywood, that he had taken “massive bribes,” and had violated party discipline in government posts going back nearly two decades. Investigators had also found evidence of Bo’s “inappropriate sexual relationships with multiple women,” the report said.
The statement made it clear that despite an apparent rearguard action by his allies to protect Bo, the party leadership has decided to treat him severely. The major bribery charges he is likely to face can carry the death penalty.