This is an edited version of the original book review published in the U.S. China Perception Monitor, November 15, 2021. https://uscnpm.org/2021/11/15/review-desmond-shums-red-roulette/
Book Review: Desmond Shum, Red Roulette (Scribner, 2021); 310 pp. hardback
Billed as a “tell-all” about the scandals of the Chinese Communist Party as it led China’s re-entry into the global system, this tale is a page-turner of policy shifts and intrigue, including the mysterious disappearance of the author’s wife. Shum’s main takeaway is that the CCP only cares about its power and protecting the top cadres’ children, who will carry on and protect the current leaders in their retirement. At the core of what Shum calls the “red aristocracy” are the original cadres who fought along with Mao Zedong, and the “princelings,” their offspring. China’s economic success, Shum argues, was achieved by connecting entrepreneurs to these political elites, an arrangement that served the interests of both. In Shum’s view, that arrangement has run its course, as President Xi, one of the princelings, pushes Chinese socialist values while condemning western ones.
Shum was born in Shanghai in 1968 but moved with his family to Hong Kong, which was not easy to arrange, especially because Shum’s father did not come from a “good” background — people who supported the CCP once they won the civil war in 1949. Shum’s grandfather had been a lawyer in Shanghai, which made him a capitalist and therefore a bad element. His father ended up in a low position teaching Chinese at a Shanghai teachers’ training school and met his mother there. But his mother had relatives in Hong Kong who helped her get to the British colony. But it took years of cajoling authorities to let his father join her in Hong Kong.
Ironically, once China began to reform, Shum’s mother and father willingly moved back to Shanghai to make fortunes. Shum’s father had a successful stint with TysonFoods in Hong Kong, and the company sent him to Shanghai to build its China market. Shum moved back to China as his company’s representative in Beijing in 1997. He lived as an expat gaining business experience but without much success.
Shum’ business career took off when he met Whitney Duan (Duan Zong) in 2001. They became business partners, eventually married and later had a son. The book opens with the fact that Whitney disappeared in 2017, and that Shum had not heard from her or received any news about her since.
Whitney, who was born in Shandong Province in 1966, started a company called Great Ocean. As a Christian, she vowed never to get ahead by being corrupt. However, she was adept at cultivating relationships with people at the highest levels of the Chinese leadership. She became especially close to Auntie Zhang (Zhang Beili), who was the wife of Wen Jiabao. Wen rose in the political ranks to become Premier from 2003 to 2012.
Through their tirelessly cultivated connections, Shum and Whitney were able to obtain valuable pieces of land and permission to build major projects, including the cargo area of the Beijing Airport and a large office-condo complex nearby. Through their development company and access to other sure-bet investments, they were able to make hundreds of millions of dollars over the years.
Three aspects of Shum’s story are especially intriguing.
First, he provides a clear description of how connections, guanxi, work and offer rewards in China. In the Chinese context, guanxi — like networking in the West — does not mean corruption, but Shum argues that to do any business in China one must curry favor with the Communist Party.
Second, one can see how business changed as reforms advanced and the business environment evolved due to new regulations, infrastructure buildout, rising incomes, and interaction with global markets.
Third, Shum’s description of the changing environment matches nicely with a recent article explaining the man behind the big ideas of the top leadership in the CCP: Wang Huning (https://palladiummag.com/2021/10/11/the-triumph-and-terror-of-wang-huning/).
Shum describes the capitalist experiment as alive and well in the early 2000s, but he saw the backlash against liberalism picking up steam in the mid-2000s. In the early 2000s, state-owned enterprises were being listed on the New York Stock Exchange, private companies had some access to bank loans, the housing market had taken off, and the middle class was growing and spending. People like Wang Qishan, a reformer, had risen to power. Wang was vice premier in 2008 under Wen Jiabaon and a close friend of Whitney’s.
By 2006, however, there were signs that capitalism was not going to work in China after all, which only accelerated with the global financial crisis in 2008. Changes that followed made it harder to do business, such as requiring private and joint venture firms to have Party committees, and regulations that gave state enterprises advantages over private firms. About that time civil society also began to feel increasing pressure to conform to Party demands.
Overall, Shum argues that despite the seemingly capitalist “experiment,” the leaders never intended to end the Communist system. For example, listing state enterprises on stock exchanges was not a move to privatize them, but rather a way to strengthen these companies to compete globally with the private sector. The shift to reassert Party control over the economy and society had begun. The Party leadership ladder changed too — less moving up the local ranks (as these people were difficult to manage) and instead bringing in loyalists from other regions.
Shum suggests that he and his business friends did not want to overthrow the Party. They did want a more open system. He and others willingly donated some of their vast wealth to support education and other social improvements. But Shum increasingly saw private companies and entrepreneurs being used by the Party, and that long-term, private investment was not a realistic option. Get in, make money, and sell out as fast as you can — that became the goal.
China’s successful economic growth and the improvement of the state sector meant the Party did not need the private sector as it did before. Hence it was no longer essential to have lax Party control over business. Shum argues that repression and control are the foundations of the Party, and this has not changed with the modernization of China under reforms. In 2012, Document No. 9 titled “Briefing on the Current Situation in the Ideological Realm” appeared. It warned of dangerous western values such as free speech. The situation has continued to worsen since then.
Just before the publication of Red Roulette, Shum received a call from Whitney. As described in a segment of Australian 60 Minutes on September 26, 2021 (https://www.youtube.com/watch?v=bOtVMFPjNUA), she had been at least temporarily released from detention, where she had been cut off from all news of her family, China, and the world. She asked Shum not to publish the book and said if he did, he and their son would be in serious danger. She called a second time as well, but Shum chose to tell their story to help the world understand the challenges of the business environment in China and the political realities behind it. Not everyone deals with such extremes of corruption and power in China as described by Shum, especially if they are located outside of Beijing. But this story helps put into perspective some of the current policies in China today, such as the anti-corruption campaign and President Xi’s move toward reestablishing socialism as the Party’s most salient goal. The bottom line is that the Party, led by President Xi, is trying to ensure that it stays in power for the long haul.