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China-Japan-Koreas

China rocket man held for bribery

2005-04-16

Li Jianzhong, a key figure in China's successful space programme, has been arrested on bribery charges, state news agency Xinhua has reported. Mr Li, former head of China's launch vehicle maker CALT, is alleged to have taken more than $200,000 in bribes and to have embezzled nearly $19m. CALT builds China's Long March rockets, one of which powered the manned Shenzhou V craft into space in 2003. Investigations into Mr Li started soon after that launch, Xinhua said. Mr Li is said to have taken the bribes during his time as president of the China Academy of Launch Vehicle Technology (CALT), between 1994 and 2000. He won plaudits for his contribution to the Long March rockets, which have sent various satellites and the Shenzhou V - China's first manned spaceship - into orbit.

China's space programme is one if its most prestigious projects, and the charges against Mr Li will be seen as a setback for the project's standing. The next manned space mission, Shenzhou VI, is due to take place later this year, and aims to launch two Chinese astronauts into space for a seven-day period. "Li's case will not erode the courageous, collective spirit of the Shenzhou VI team," Xinhua quoted a senior researcher as saying.
*wipes tear*

Posted by:.com

#9 PF: That you used Robert Moses (who I thought mainly worked in the public sector) as a counterexample puzzles me.

I used Moses to show that government seizure of land affects the people who land it was, but pretty much no one else, providing that the seized land is put towards uses that benefit the many. Note that in China, few of these people actually "own" the land - theirs are squatters' rights from having lived there for decades after the pre-revolution landlords who owned them were executed in gruesome ways, in some cases by the tenants themselves.

PF: I don't think "zoning" per se has had nearly as much impact on American construction as the environmental regulations.

I don't think there is such a thing as "American" construction. All construction occurs at the township level - when zoning boards decree that all new housing units must include at least 1 acre of land, property developers have to toe the line.

Posted by: Zhang Fei 2005-04-16 11:51:55 PM

#8 ZF, the property development thing was an example.

And I don't consider "eminent domain" as practiced here to be entirely good either.

That you used Robert Moses (who I thought mainly worked in the public sector) as a counterexample puzzles me.

I don't think "zoning" per se has had nearly as much impact on American construction as the environmental regulations. Then again as near as I can tell my entire state qualifies as a wetland under Federal regulations.

Posted by: Phil Fraering 2005-04-16 10:26:31 PM

#7 PF: This may count as "unregulated capitalism," but who has property rights and who doesn't depends on who has money to bribe the party with.

I guess that would be the Chinese equivalent of the zoning disputes we have over here. Developers pay off the zoning board, and new commercial or residential development goes up.

Remember this - developers can't eat the housing. To make money off it, they have to rent or sell it to somebody. The cheaper they can get it, the lower the price they can sell or rent it for. Note that there are no real cartels here - huge numbers of developers are competing to put up new properties. They compete with each other on price and quality. The bottom line is cheap new housing or commercial space for the new residents or businesses. That significantly contributes to new economic growth. Think of what happened when Robert Moses seized property in New York City in the 1950's to pave the way for highways and other urban amenities. It wasn't wonderful for the people whose property was taken, but the rest of NYC made out just fine.

As to bribing the party - no one bribes the party - the party is just an unwitting bystander, just as the Republican or Democratic Party doesn't take bribes - individual Republicans or Democrats do. In China, the penalty for taking bribes is often execution.

PF: Just because these party officials are plundering the pension funds of workers in the NE to pay for all this industrial development, and are therefore "exploiting" people, doesn't make this capitalism. I suspect this is less socially stable than a more "honest" capitalism would be.

This is no more dishonest than what was prevalent in 19th century America. As to social stability - remember that the people who benefit from it - the developers and the far more numerous new tenants or owners who previously lived or worked in mud-brick hovels - have a strong stake in the new order. In China, the rule has always been that the needs of the many outweigh the needs of the few. The Chinese are very unsentimental about minority rights. The idea of a single property owner derailing a major highway or development just doesn't fly there. Note also that everyone gets compensated - they just don't necessarily get paid what they think the property is worth. The Chinese form of eminent domain isn't particularly fair, but it doesn't retard economic growth.

I would argue that zoning rules here in America have significantly retarded economic growth by inflating property prices and making it more expensive for both residential and commercial property developers to put up new buildings. There is no free lunch. Business owners just pass the additional cost along.

Posted by: Zhang Fei 2005-04-16 6:29:12 PM

#6 The cornerstone of communism was the higher up the heirarchy you were, the more perks you got - better housing, healthcare, education, cars, flunkies, and yes bribes, although in the old days money was of limited value so they would often be in kind.

China has two systems today. there are lots of real capitalists, but there are the communist party officials who are in a position to extract bribes (their salaries will be miniscule) and from what I hear they all do becuase now money can buy more and better stuff then the communist system can deliver.

Did he takes bribes? Almost certainly yes, but everyone does. So he also transgressed in some way. Either he stepped out of line politically or went overboard with the bribes. Another possibility is a rocket has blown up or some serious flaw has been found and they need a scapegoat.

Posted by: phil_b 2005-04-16 3:58:20 PM

#5 China is more or less a capitalist country now, but in the relatively unregulated 19th century American style.

That's my question, why the bust? Was he getting too greedy?

Posted by: Shipman 2005-04-16 2:40:31 PM

#4 It's almost more like a funhouse mirror version of capitalism created by Marxists who had read what Lenin said capitalism was like than anyone with experience with the real thing.

Posted by: Phil Fraering 2005-04-16 12:01:28 PM

#3 Zhang Fei wrote:

China is more or less a capitalist country now, but in the relatively unregulated 19th century American style.

You keep saying this, but I think the analogy is very inexact... I read an analysis of the Chinese housing boom the other day, and along the way they mentioned as factors the idea that people can't own land in China, but landlords can own (for instance) apartments. Therefore all the businessman has to do is bribe a couple party officials in order to be able to displace a peasant from his farmland and put up cheap apartments. This may count as "unregulated capitalism," but who has property rights and who doesn't depends on who has money to bribe the party with.

Not to mention that a lot of the "businesses" are being owned and run outright by the party (whether nationally or a provincial branch), or the government (of provincial or national level), or the armed forces.

I've talked to people who go over to do business in China, who say that the local party officials are part of the decision-making process of the company they had to deal with.

Just because these party officials are plundering the pension funds of workers in the NE to pay for all this industrial development, and are therefore "exploiting" people, doesn't make this capitalism.

I suspect this is less socially stable than a more "honest" capitalism would be.

Posted by: Phil Fraering 2005-04-16 11:51:14 AM

#2 Shipman: What the deal ZF? Commrade Li sounds like he's doing a good job, is he in the wrong faction?

No surprise here. An expensive government program like this involves buying a lot of supplies and spending a lot of money. Lots of room for both bribery and theft. As to the "comrade" stuff, no one calls anyone comrade any more, except maybe at Party functions. China is more or less a capitalist country now, but in the relatively unregulated 19th century American style.

Posted by: Zhang Fei 2005-04-16 11:40:21 AM

#1 What the deal ZF? Commrade Li sounds like he's doing a good job, is he in the wrong faction?

Posted by: Shipman 2005-04-16 11:17:56 AM

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