Protests turn author's warning into reality


It was the very thing China's best-selling author, Ms He Qinglian, has been warning about: 200 angry residents marching through Beijing city centre yesterday, wheeling their bicycles through crisp yellow leaves in one of China's growing street protests.

Their demonstration on the fringes of Tiananmen Square - at one point police formed a solid line to prevent the mostly middle-aged citizens approaching the hallowed ground - was perhaps the boldest in the capital since 1989. Their protest was about a dollar futures fraud which robbed them of their savings.

It might just as easily have been about lay-offs, unpaid wages or other forms of corruption. The grim-faced protesters passed pavement bookstalls where Ms He's 394-page best-seller, China's Pit- falls, has been going like hot cakes.

The book, with its warning of political and public resentment building at the social chasms developing in modern China, has been a sensation. Its print run of 30,000 was sold out within days in January and since then more than 170,000 official and pirated copies have been printed.

Speaking out about corruption can mean a visit from the public security bureau in China but Ms He had a powerful mentor in the shape of Mr Liu Ji, a member of President Jiang Zemin's brains trust and chief adviser to a series of official books called "China's Problems".

Mr Liu sponsored the publication of China's Pitfalls apparently because it offered valuable insights into corruption for consideration by the top party leadership, which regards its battle against graft as a fight for survival.

The author explains exactly how people are defrauded of their savings and cheated of their wages, and how state property is stolen by officials and factory managers through complex business deals.

Rather than attacking China's leaders by name, the 42-year-old economic journalist blames the reforms initiated by Deng Xiaoping, designed to shift the Communist country from a state-run to a market economy but which have enabled those in authority to grab the state's wealth.

The result, she suggests, is that China is becoming more vulnerable to major social and political upheaval. The scenes on Beijing streets these days give a hint of what might be to come. Police have been very careful to use persuasion rather than force in such circumstances and yesterday was no different.

As the angry investors made their way slowly towards the offices of the official news agency, Xinhua, lines of police blocked the entrance and officials took videotape of the protesters, but they did not intervene.

Police even stopped traffic to allow the long slow-moving line of people to file across the road. Such restraint indicates sympathy with the protesters and a desire not to be seen siding with the fraud perpetrators, as well as a realisation that anger over corruption, unemployment, and widespread fraud could pose a threat to stability.

The marchers had invested their life savings in Beijing-based Xin Guo Da Futures Co Ltd, a brokerage which once had state backing, and which promised monthly interest payments of up to 30 per cent. It suddenly shut its doors in August. The company was run by a Taiwan resident, Mr Michael Ni Wen-liang, who allegedly had connections in the People's Liberation Army.

Xinhua reported on Sunday that Mr Ni had been arrested along with two Chinese citizens, on charges of illegally taking over the futures company in January, a form of words which suggested that the government would not accept responsibility or offer compensation.

Investment fraud has become a phenomenon of China's rush to the future. Recently thousands of people staged similar protests in the southern city of Xinhui, where local authorities refused to pay back investments in five public utilities firms which squandered the money in bad deals.

In her pessimistic prognosis of the future in China's Pitfalls, Ms He writes: "The excessive gap between poor and rich which has caused anger to build up in society; excessive employment pressures and crime waves, the undermining of grassroots organisations in the Chinese countryside, the spread of the black economy, the rise of underworld organisations and the collusion of officials and the underworld . . . these will be the chief sources of social crisis for China in the future."