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Party Chief Probe Just the Tip of the Iceberg

2014-05-06 17:44:16 Caijing
As the provincial capital, Taiyuan has many layers of provincial and municipal power. Officials often use power to seek interests in land development projects.

  By staff reporters Zhang Lu and Li Tingzhen

  On April 12, 2014, the CPC Central Commission for Discipline Inspection (CCDI) launched an investigation into Shen Weichen, former Taiyuan municipal party committee secretary.

  In Jan. 2006, Shen was transferred to Taiyuan, the capital of Shanxi Province, and appointed the CPC Party Secretary of Taiyuan, a position he held until Sept. 2010 when he was transferred to Beijing and appointed Vice Minister of the Propaganda Department of the CPC Central Committee. The CCDI’s investigation is widely seen as connected to interests in the field of urban construction during Shen’s tenure in Taiyuan. Unauthorized construction, illegal land development, developers making off with money, forced demolition, homicide and other incidents occurred during Shen’s time in office from 2006-2010, triggering several large-scale mass activist events.

  According to official statistics, as of the end of June 2011, there were 1,013 real estate development enterprises in Taiyuan. Of these companies, only two possessed Class A development qualifications. Seventy enterprises held Class B qualifications, 125 had Class Cs, 313 held Class Ds, and 503 companies were categorized as “provisionally qualified” developers.

  Class A qualification requires companies to have at least 50 million yuan in registered capital and to have been engaged in real estate development and management for more than five years. There are also some requirements related to floor space completed and technical personnel. Class B, C, and D qualifications require companies to have registered capital of not less than 20 million yuan, 8 million yuan, and 1 million yuan, and to have been engaged in real estate development and operation for at least three years, two years, and one year respectively. “Provisionally qualified" developers are those that are just starting out.

  "The overabundance of small developers has caused chaos in the market and led to a heavy speculative mentality," local newspaper Taiyuan Daily published in its commentary section.

  “Exact statistics have not been compiled, but in general, there are problems with the approval, construction, and (pre) sales process of at least half of the real estate projects in Taiyuan," a Taiyuan City Housing Authority official said of the real estate development market in July 2011.

  Beginning from Feb. 2011 after Shen left Taiyuan, authorities launched investigations into a number of planning, landscaping, construction and land department cadres.

  In late Sept. 2013, a joint letter to report Shen’s illegal activities signed by numerous parties was sent to seven or eight ministries including the CCDI, the State Council, the Ministry of Land and Resources, and the Ministry of Housing and Urban-Rural Development. Prior to dispatching the letter, relevant information had also been sent to dozens of state-level media.

  A source familiar with the real estate market in Taiyuan said the case extends well beyond just Shen. "As the provincial capital, Taiyuan has many layers of provincial and municipal power. Officials often use power to seek interests in land development projects. Shen Weichen is just one of many."

  Hu Xin, a female who has a special relationship with former vice chairman of Shanxi Provincial People's Congress Standing Committee Jin Daoming, had strong influence in Taiyuan’s real estate industry and could easily obtain land. In Feb. 2014, Jin was subject to shuanggui, a form of administrative detention used on Party members.

  Ren Yunfeng, director of Shanxi Provincial Government Management Authority, was also put under investigation on Feb. 25 for serious violations of discipline and corruption in connection with real estate projects in Taiyuan.

  Full article in Chinese:http://magazine.caijing.com.cn/2014-05-03/114149445.html

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