Shanghai corruption inquiry closes in on top officials

CHINA: A deepening inquiry into corruption in Shanghai, which has already taken some high-ranking scalps in a move by President…

CHINA: A deepening inquiry into corruption in Shanghai, which has already taken some high-ranking scalps in a move by President Hu Jintao to reinforce his rule, is widening its scope in China's financial hub.

Scores of corruption investigators, who have taken over a city-centre hotel and are speeding around in cars with tinted windows, are investigating the use of funds from Shanghai's 10 billion yuan (€1 billion) social security fund for illicit loans and investments.

Now the inquiry has trained its sights on some of the highest figures in the city.

Investigators reportedly questioned former leader Jiang Zemin's nephew, who is Shanghai's top policeman, while Sun Luyi, vice secretary-general of the Shanghai municipal committee, is accused of a severe breach of party discipline as part of the same inquiry.

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The highly public campaign, driven by the central government in Beijing, is trying to weed out corruption in the ruling Communist Party. The party fears corruption has a destabilising influence.

This week, Chen Liangyu, the most senior Communist Party official in Shanghai, was sacked for corruption following the investigation into abuses of the city's pension fund.

He was the first member of the politburo, which is the party's decision-making council, to be sacked since 1995, when Beijing party chief Chen Xitong was purged and jailed.

The move is seen as part of President Hu's efforts to consolidate his grip on power, using the punishment of corrupt officials to flex his muscles ahead of a series of crucial Communist Party meetings this year and early next year.

Communist Party officials have said more officials are bound to be targeted in the investigation, and a top party corruption buster said the government would try to make its operations more "transparent".

Shanghai, China's largest city, is the bastion of officials loyal to Mr Hu's predecessor, Jiang Zemin, who is a former mayor of Shanghai.

Fearful of disruption, stability was the watchword in the state-run media. Xinhua news agency ran reports highlighting the success of efforts by the Beijing government to transform Shanghai into a true international financial centre.

Shanghai local newspaper Wen Hui Bao gave an upbeat reading of a meeting of top Shanghai communist officials, saying the cadres had pledged to work for "social stability". Shanghai deputy party chief Liu Yungeng said the city's organisational structure was "healthy, reliable, firm and strong". Mr Liu urged fellow cadres to ensure there would be no "serious public security or criminal cases" during the week-long National Day celebrations.