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Strategies & Market Trends : Asia Forum

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To: Rolla Coasta who wrote (9897)2/8/2001 9:04:45 AM
From: CIMA  Read Replies (1) of 9980
 
An intensifying campaign against official corruption has begun
entangling some of China's most senior officials, with
potentially significant effects on leadership over the next three
years. The political ambitions of former Premier Li Peng, who
built his bureaucratic career in China's power industry, may be
crippled by a scandal now unfolding in the State Power
Corporation, the country's monopoly supplier of grid electricity.

Analysis

Li, an engineer by training, served as minister of electric power
in the 1980s. He has long been unpopular among Communist Party
reformers, both for his hard-line political stance - he played a
central role in the decision to use deadly force against
demonstrators in Beijing in June 1989 - and his conservative
economic views, which have obstructed what more market-oriented
officials see as critical reforms of China's state-controlled
assets.

Partly because of his unpopularity in the wake of the Tiananmen
massacre, Li was marginalized in recent years. After completing
his term as premier, he was assigned a superficially impressive
but essentially symbolic role as chairman of the National
People's Congress, China's almost powerless legislature.
Nevertheless, no one doubts he has greater ambitions, and, in the
tradition of Chinese bureaucratic politics, his old associates in
the Ministry of Electric Power should have proved useful allies
when the moment was right.

Li Peng's problem is that the Ministry of Electric Power no
longer exists. Like most Chinese specialized economic ministries,
it was abolished under the 1998 administrative reforms. The
reforms turned it into a specialized quasi-corporate body, the
State Power Corporation, and placed it under the supervision of
the nation's main economic regulator, the State Economic and
Trade Commission, or SETC. The move, which stripped power
ministry officials of their regulatory and licensing authority,
had the unintended - but perhaps not unwelcome - effect of
undermining Li's power base.

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