Those fears intensified in the fall of 2000 as rumors spread that a massive redevelopment project had been proposed for Suianbo and other nearby hutongs. Then, on a cool evening in late October as Liu was watching television, he heard a commotion in the alleyway and stepped out in his nightshirt to see what was going on. His neighbors filled the street, crowding around notices printed on white paper that had been pasted on the walls. Liu made his way to the front of a group gathered around one of the notices. “A Letter to Residents to be Relocated after Demolition,” it said at the top, and below was a long body of text that began:
The Jinbao Avenue Municipal Redevelopment Project Headquarters of the Dongcheng District People’s Government of Beijing, as approved by Document No. 0157-2000 of the Beijing Planning Bureau, is carrying out demolition and relocation on Jinbao Avenue and in redevelopment areas on both sides of the street. The construction of Jinbao Avenue and redevelopment of areas on both sides of the street is an important municipal project. This project is key to easing the strained traffic in the Wangfujing shopping area and improving city redevelopment conditions. It is a positive measure that will make the economy of Dongcheng District prosper, and a concrete realization of support for Beijing’s application to host the Olympics.
Liu was confused at first, because there was no street named Jinbao Avenue in their neighborhood. But as he continued reading, he realized the city had approved a plan to carve a new boulevard through the community, extending about a half mile from the Wangfujing shopping area to the city’s central business district. The letter listed more than two hundred residences—including every house on Suianbo Hutong—that would be demolished to make way for the road and for unspecified new projects alongside it. Demolition work was scheduled to begin the next day and to be completed within a month.
Liu and his neighbors stood on the street, dumbfounded and angry. Some had lived on the hutong all their lives, and now they were being given just a few weeks to move out. The letter said residents could collect the equivalent of about eight hundred dollars in compensation for each square meter of their homes, plus a five-hundred-dollar bonus if they moved out quickly. But there was no distinction drawn between tenants of state-owned housing on the street and residents like Liu who owned their homes. There was no attempt to assess the market value of their property, and no offer to negotiate terms for a sale. Residents stood on the alleyway fuming and cursing until well past 2 A.M. that night. Some tore down the notices in anger. Others vowed to fight the project.
After what happened to his sister-in-law, Liu was determined to protect his property. He owned the house, and if developers wanted to tear it down, they would have to pay a fair price for it. As far as he was concerned, the compensation offer outlined in the letter was nowhere near a fair price. He knew that apartments in downtown Beijing were selling for more than $2,500 per square meter, while the going rate for office space was even higher. His house occupied seventy square meters of land, and if developers built a high-rise over it, the size of the fortune they could make would be multiplied by the number of floors they were given permission to build. So Liu ignored the letter, stayed put, and waited. After a few weeks, when men from the real estate development company finally called on him, Liu told them he objected to the notices they had posted. They asked what he wanted, and Liu told them he wanted them to acknowledge that he owned the house. He refused even to discuss a price until they recognized that simple fact, but they demurred. The conversation lasted only a few minutes.
A few weeks later, the men returned with an offer. They said the developer was willing to treat Liu’s family as a hardship case and give him extra money for relocating—about sixty thousand yuan for each member of the household, for a total of three hundred thousand yuan, or about $37,500. But the men wouldn’t acknowledge that Liu owned the house, and Liu rejected the offer immediately. It was a large sum of cash, but barely enough to buy an apartment on the outskirts of the city, and nowhere near the market value of his land. In any case, Liu told the men, it wasn’t about the money. It was about respecting his rights, about proper procedures. He wanted them to understand that he was not going to roll over. It was his house, and if they wanted it, he said, they should hire someone to conduct an independent appraisal and pay him what it was worth. The conversation was again a brief one.
As the weeks passed, Liu turned out to be the most stubborn of the residents on Suianbo Hutong. His brother wanted him to sell, but Liu refused. At the same time, one after another, his neighbors struck deals with the developer, collected compensation, and moved out. They saw it was the smart thing to do, given that the government had already endorsed the developer’s plan and labeled it “an important municipal project.” It didn’t matter if people owned their houses, or how long they had lived on the street. If the developer had the government’s support, it was going to get its way. You could grumble, and you could curse, but in the end, you would have to move. One by one, Liu’s neighbors concluded that all they could really do was try to maximize what they got in return. Liu, however, took another approach. He kept insisting that the developer admit he owned the house, a concession that would improve his negotiating leverage and the strength of any lawsuit he might file—and that the developer was unlikely to make. It seemed foolish and reckless, and when I asked him later why he had been so persistent, Liu couldn’t really explain what motivated him. “I didn’t care about the money,” he told me. “It was just a matter of principle.”
By early December, the developer had reached agreements with everyone on the street except Liu, and the company applied to the government for permission to forcibly evict him. The government agreed, and a few days before the eviction was to occur, Liu was summoned to a meeting at a temporary office that the developer had set up in one of the courtyard houses in the neighborhood. Two officials from the Dongcheng District’s housing bureau sat on the edge of a table, and motioned for Liu to take a seat in front of them. There was no small talk. The men told Liu he had to move. The Jinbao Avenue project had the support of the state, they said, and if he tried to fight it, he would lose. He should turn over his deed, they said, and accept the developer’s compensation offer of three hundred thousand yuan. Otherwise, they said, his house would be demolished and he would get nothing. Liu tried to argue with them, but got nowhere. The officials warned Liu that this was his last chance. Liu refused to give in and skulked out.
As he left the office, Liu saw his brother go in. His brother wanted to accept the compensation money and move out, but the developer had refused to pay him. The brother was a tenant on the street like any other, but the developer said he wouldn’t get paid until Liu turned over the deed to the property. It was an attempt to split the family, a common tactic used by developers against those holding out, and it worked. That night, as Liu was taking a walk on the hutong, his brother and several other men jumped him. Liu cried for help and a police officer appeared, but instead of breaking up the fight, the officer held him in place as the others beat him. Liu lost a tooth in the fight before breaking free and running away. After the assault, Liu stayed away from his house, living with his mother-in-law instead. His two older sons remained at home, though, and they told him when his brother hired a crew of workers and tore down the rooms on the south side of the courtyard. They also told him that his brother was still looking for him, that he had hired thugs and was threatening to pummel him again and force him to turn over the deed. Liu’s relationship with his brother had been strained for years, but he never imagined it would come to this.
As he stood in the street on the morning of the demolition, Liu scanned the crowd warily. His brother knew him well enough to know that he would return to watch the demolition, that he needed to see the fight to the end. Liu was sure his brother was somewhere nearby, and he didn’t want trouble. Standing at the front of the crowd were his wife, his sons, and his sister-in-law. One of the city officials went up to them, said something, and then shook hands with his wife.
Liu realized that the man had just formally ordered them out of the house, and that it all would soon be over.
A crew of workers filed past his family into his home and began loading their belongings onto trucks that were parked outside. A few men were videotaping the proceedings, and the police officers escorted his family away from the house. After the furniture was removed, someone climbed into the bulldozer and started the engine. With a quiet rumble, it moved forward and knocked down one wall, then another, and soon all that was left was a pile of rubble. It happened much faster than Liu expected. As the crowd began to disperse, he stood staring at the cloud of dust that was once his family’s house. He felt furious, depressed, helpless, and then numb.
Liu knew the name of the real estate company that was building the Jinbao Avenue project. But it was not until later—after he was relocated into a slum on the outskirts of the city, after plans were announced to build a luxury hotel on the site of his home, after he filed the lawsuits that went nowhere—that he learned who ran the company. Her name was Chen Lihua, and she was the richest woman in China.
WHEN THE WORKERS broke ground on the Jinbao Avenue project, Chen Lihua was already something of a legend in Beijing. Heavyset, with big glasses and a bad perm, she looked like a frumpy aunt who had won the lottery, and residents casually referred to her as the fupo, or the Rich Lady. At fifty-nine, she presided over a vast real estate empire, held prominent positions on government advisory bodies, and lived in a ten-story mansion behind a museum she built on the city’s east side. She was one of only two women to make Forbes magazine’s list of China’s richest people in 2001, ranking sixth with assets of more than $550 million. State media fawned over her rags-to-riches story and charitable activities, and the public tittered over her marriage to a television star ten years younger than her. Her publicists seemed to work overtime planting sappy features about the couple’s romance in the press, perhaps to counter the gossip that he had married her for the money. Almost every time I mentioned Chen’s name in conversation, people brought up her marriage first and discussed her wealth later. But it was her wealth, and how she acquired it, that interested me.
There is an assumption in the West that the growing ranks of private entrepreneurs in China represent a force for democratic change in the country. These businesspeople, like businesspeople around the world, prefer a political environment conducive to commerce, and a democratic system serves their interests better than an authoritarian one, or so the argument goes. They favor the predictability of the rule of law over the arbitrary rule of party bosses. They want impartial courts that can enforce contracts, resolve disputes, and protect private property rights. They are frustrated with the government’s control of the banks, with their inability to influence economic policy, with the unfair advantages that party officials enjoy in the market. Some of China’s new capitalists fit this description. In 2003, for example, a prominent agricultural tycoon named Sun Dawu was jailed for five months after speaking out against the party. But those counting on the capitalists to lead the charge for democratization in China are likely to be disappointed. China’s emerging business elite is a diverse and disparate bunch, and for every entrepreneur who would embrace political reform, there are others who support and depend on the authoritarian system, who believe in one-party rule and owe their success to it. Chen Lihua fits in this latter category, and her story is a reminder that those with the most wealth—and thus the most resources to devote either to maintaining the status quo or promoting change—are also the most likely to be in bed with the party.
Chen’s climb into the ranks of the richest of the rich was an exaggerated illustration of how capitalism often worked in China. After living through decades of political turmoil, ambitious men and women like her saw the transition from socialism to capitalism as a once-in-a-lifetime opportunity to make a fortune. New markets were opening every day in the 1980s and ’90s as the old planned economy was dismantled, and these entrepreneurs realized that the trick was getting access to these markets first—by obtaining licenses and permits, or special privileges such as the right to buy commodities at subsidized prices, to purchase the assets of a failing state factory, or to build on a prime piece of real estate. The most successful businesspeople, many of them former officials or the children of officials, understood that the best way to secure such advantages was by winning the favor of party bureaucrats. What robber barons like Chen did wasn’t necessarily illegal. They bent the rules at a time when the rules were changing quickly, and the Chinese called their crimes “original sins.” When the political winds shifted, and their patrons in the party fell from power, some of these new millionaires were prosecuted and ended up in prison on corruption charges. Others, like Chen, managed to outlast the politicians.
Chen Lihua’s story has been told many times in the state media, but these tellings are riddled with embellishments and omissions. She is often portrayed as a descendant of Manchu nobility from the Qing Dynasty, or even a distant relative of the last emperor, and she is said to have grown up near the grounds of the Summer Palace. But there is a whiff of mythmaking in these accounts, and Chen says her family destroyed the documents proving her bloodline during the Cultural Revolution to escape persecution, making it impossible to confirm her claim to nobility. Even if true, though, the circumstances of Chen’s childhood and early life remain a mystery. The Qing court fell in 1911, three decades before she was born, and none of the published stories about her make any mention of what her parents did after the fall of the dynasty, or how they made a living after the Communists took power. When I first met Chen and asked about this, she repeated that her father had been a Manchu nobleman, and when I pressed her further, she said only that he had an “ordinary job” and declined to elaborate.
There is little doubt, however, that Chen struggled to make ends meet and suffered during the Cultural Revolution because of her family background. She was in her twenties at the time, a young mother who worked as a seamstress and was married to a civil servant. A neighbor told me that Red Guards paraded her through the streets with a placard vilifying her as a woman of loose morals, a common charge leveled against female targets of the political campaigns. None of this appears in the official accounts of Chen’s life. Instead, when Chen is quoted talking about the Cultural Revolution, she is usually telling a story about her family’s antique furniture. Red Guards seized or destroyed most of it, but she rescued a large, intricate wardrobe made of precious red sandalwood, and she dismantled it and buried it near a pigsty in the countryside. A decade later, after the end of the Cultural Revolution, she returned to the sty, dug up the wardrobe, and reassembled it. To her surprise, it remained in perfect condition. It was then, the story goes, that Chen developed a passion for sandalwood and embarked on her first business venture, running a workshop that restored antique furniture.
The authorized accounts of Chen’s life are vague about how she made her first fortune. In the late 1970s and early ’80s, she is said to have traveled several times to Southeast Asia in search of supplies of sandalwood, which derives from a rare and endangered species of tree. In several state media reports, she presents herself as a kind of swashbuckling female Indiana Jones, traveling through jungles on donkeys, getting the better of snakes, surviving a vicious attack by poisonous bees. But there are glaring inconsistencies among the reports, as if Chen were trying out different versions of her life story to see which she liked best. In the early 1980s, Chen somehow succeeded in immigrating to and establishing residency in Hong Kong. There are vague references in state media to Chen engaging in “international trade” and making money on a real estate deal there, but no details, and then the official story fast-forwards to 1988, when she returned to Beijing a wealthy woman. At some point along the way, she divorced her first husband, and in 1990 she married the television star.
Behind these ambiguous official accounts, though, was the tale of a sharp businesswoman who recognized early the quickest way to strike it rich in
China’s freewheeling, transitional economy—ingratiating oneself with party officials. Not long after the Cultural Revolution, according to the explanation I heard most often from people who knew her then, Chen befriended a neighbor who was a party official, and she took care of his daughter when the government sent him to work in Hong Kong. She used that first relationship to move to Hong Kong herself, and later to build a network of connections with increasingly higher-ranked party bureaucrats in Beijing. How she maneuvered herself into such good standing with the party apparatus remains one of the mysteries of her success, but by the late 1980s she had good enough connections to gain access to a state furniture factory on the city’s south side that had a warehouse full of antique furniture seized by Red Guards during the Cultural Revolution. According to employees at the factory, Chen visited regularly and was allowed to purchase antiques at a huge discount. These were valuable Qing and Ming dynasty pieces, many of them banned from export under Chinese laws that designated them national treasures. But the factory workers said Chen used her party ties and arranged for much of what she purchased to be exported to Hong Kong. On her visits, the workers said, Chen was always generous with gifts for the warehouse employees, and she once purchased a Soviet-made car for the factory manager. A few years later, the manager was imprisoned on corruption charges. Chen faced no charges. Investigators told workers that she enjoyed the protection of senior party officials.
Out of Mao's Shadow Page 19