Shanghai bans children of Communist cadres from running businesses

There is something afoot in China’s biggest city, Shanghai, where, according to a new municipal regulation, the spouses of political leaders cannot go into business and their children will not be allowed to run companies.

The regulation aims to crack down on the kind of money-for-influence trading that can happen when the children of political figures go into business, in the hopes of putting a halt to collusion between officials and businessmen, Ying Yong, deputy Communist Party secretary of Shanghai, told local media.

Shanghai looks set to become a model for the whole country and approval for the plan came from on high. President Xi Jinping has launched a wide-ranging campaign to root out corruption in China, whether it involves massive wealth accumulated by the powerful “tigers” of the elite or backhanders palmed over to the “flies” at the bottom of the Communist Party.

Han Zheng, the city’s Communist Party chief, wrote on the city government website: “You can’t have your cake and eat it too . . . if you choose to be an official, you can’t go into business and strike it rich.”

The new regulation was approved by the leading group for overall reform in February, with Xi urging its implementation in a discussion with the Shanghai delegation during the National People’s Congress in March.

The use of Shanghai as a testing ground is politically not unusual. The former leader Jiang Zemin, who retains a lot of influence, has his power base here and subsequent leaders have been slow really to engage with the eastern city.

Since Xi made his pledge back in November 2012, tens of thousands of officials have been arrested and jailed, including Bo Xilai, the former party boss in Dalian and Chongqing, who is serving a life sentence for corruption and abuse of power. His wife Gu Kailai sits in jail for murder.

Former security tsar Zhou Yongkang is soon to be put on trial for corruption.

Shanghai is a pulsing, modern metropolis which is generally seen as being less political than the northern capital Beijing and there could be challenges in enforcing the new rules.

The tone of the Shanghai government decision seemed to indicate that the crackdown is real. Ying said that the children of leaders in positions of authority with the public security offices, the judiciary and the courts would not be allowed to run business in their administrative areas or do any business that conflict with the public interest.

Ying added that the importance of the regulation lies in managing some key leaders; the more power the leader had, the stricter the rules should be, he said. This is a challenge, as the senior leadership is generally ring-fenced away from corruption.

There have been a number of reports linking the families of senior cadres to great wealth, most notably in the New York Times two years ago, linking then-premier Wen Jiabao's family to money in Hong Kong.

Earlier this month, the same paper wrote a piece linking President Xi’s family to Dalian Wanda, the giant property empire controlled by the tycoon Wang Jianlin, China’s richest man.

The allegations do not seem to have dimmed the government’s enthusiasm for tracking corruption.