'Proxy war' underlies corporate crackdown in China

Subject

Private sector tycoons and elite politics in China.

Significance

In the run-up to the five-yearly Party Congress, as leaders strive to maintain the appearance of unity and order, signs of intense competition have spilled into the open. Guo Wengui, a colourful property tycoon now living in New York, has made allegations about President Xi Jinping and anti-corruption chief Wang Qishan. Chinese authorities are taking punitive action against Guo and other high-flying entrepreneurs while regulators investigate private sector firms that have made large and high-profile overseas investments.

Impacts

• The Party Congress will be far tenser than expected, and factional rivalry may claim further private sector proxy victims.
• Guo's allegations may already have ruined Wang's chances of reappointment to the top leadership team.
• Share prices of the firms believed to have shaky credit arrangements and political patronage will struggle.